PrefBlog

DBRS has announced that it:

has today upgraded the rating of the Class C Preferred Shares, Series 1 (the Class C Preferred Shares) issued by TD Split Inc. (the Company) to Pfd-2 from Pfd-2 (low).
…
On November 21, 2011, DBRS confirmed the ratings on the Class C Preferred Shares at Pfd-2 (low) mainly based on the stable downside protection levels available to holders of the Class C Preferred Shares over the prior year. Since the rating confirmation, the net asset value (NAV) of the Company has been increasing fairly steadily, rising from $25.93 on December 1, 2011, to $29.41 as of October 11, 2012. Downside protection available to the holders of the Class C Preferred Shares increased to approximately 66.0% as of October 11, 2012, from 61.4% on December 1, 2011. In addition, TD raised its dividends on August 30, 2012, increasing quarterly distributions by five cents to 77 cents per share. This dividend boost increases the Class C Preferred Share distribution coverage ratio to 2.0 times. The Class C Preferred Shares are being upgraded mainly due to the increased downside protection available and the improved distribution coverage ratio.

The main constraints to the rating are the following:

(1) The downside protection provided to holders of the Class C Preferred Shares is dependent on the value of the shares in the Portfolio.

(2) Volatility of price and changes in the dividend policies of TD may result in significant reductions in downside protection or dividend coverage from time to time.

(3) The concentration of the entire Portfolio is in the common shares of TD.

TDS.PR.C is tracked by HIMIPref™ but is relegated to the Scraps index on volume concerns. It was last mentioned on PrefBlog when there was a partial call for redemption last November.

This entry was posted on Friday, October 19th, 2012 at 12:58 am 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.