PrefBlog

Dominion Bond Rating Service has announced that it:

has today downgraded the rating of the Preferred Shares issued by Financial 15 Split Corp. (the Company) to Pfd-4 (high) from Pfd-3.
…
On September 6, 2011, DBRS confirmed the ratings on the Preferred Shares at Pfd-3 due to the fairly stable level of downside protection available to holders of the Preferred Shares, despite the NAV and downside protection decreasing gradually in the months leading up to the confirmation. However, since the rating confirmation, the NAV has continued to decline, with downside protection falling from 28.3% on August 31, 2011, to 23.4% on November 30, 2011. The dividend coverage ratio is currently around 0.68, but the Company has also written covered call options in order to generate additional income for distributions. However, the current level of downside protection available to the Preferred Shares, together with its trend, is not commensurate with the previously assigned Pfd-3 rating, and as a result of the downside protection dropping below acceptable levels for a sustained period of time, the rating has been downgraded to Pfd-4 (high).

The scheduled final maturity date of the Preferred Shares is December 1, 2015.

The NAV per $10 preferred share is 12.83 as of December 15.

Update: Oddly, the very similar FFN.PR.A, with a NAV per $10 preferred share of 12.10, continues to be rated Pfd-3(low) by DBRS – which doesn’t make any sense at all.

This entry was posted on Thursday, December 29th, 2011 at 11:15 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.