ES.PR.B Upgraded to Pfd-3 by DBRS

Dominion Bond Rating Service has announced that it:

has today updated the ratings of preferred shares issued by three split share companies and trusts (the Issuers): Energy Split Corporation, SNP Split Corp. and Utility Split Trust. The preferred shares of Energy Split Corporation have been upgraded to Pfd-3 from Pfd-3 (low), and the preferred shares/securities of SNP Split Corp. and Utility Split Trust have been confirmed at Pfd-3 (high) and Pfd-2 (low), respectively.

Each of the Issuers has invested in a portfolio of securities funded by the issuance of two classes of shares – dividend-yielding preferred shares (or securities) and capital shares (or units). The main form of credit enhancement available to preferred shares is a buffer of downside protection. Downside protection corresponds to the percentage decline in market value of a portfolio that must be experienced before the preferred shares would be in a loss position. The amount of downside protection available to preferred shares will fluctuate over time based on changes in the market value of the portfolio.

Today’s rating actions reflect generally upward trends in the net asset value (NAV) of the respective portfolios over the past year. In its surveillance of split share funds, DBRS reviews historical trends in downside protection and assigns greater weighting to more recent Issuer NAVs. Each of the Issuers has a scheduled termination date in 2011.

Energy Split Corporation is ES.PR.B, last mentioned on PrefBlog when it was upgraded to Pfd-3(low) by DBRS. ES.PR.B is not tracked by HIMIPref™, but it will be considered for inclusion in the database if they go for a term extension.

One Response to “ES.PR.B Upgraded to Pfd-3 by DBRS”

  1. […] was last mentioned on PrefBlog when it was upgraded to Pfd-3 by DBRS in April. ES.PR.B is not tracked by […]

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