CF.PR.A, CF.PR.C : DBRS Says Trend Now “Stable”

DBRS has announced that it:

has today confirmed its rating of the Cumulative Preferred Shares of Canaccord Genuity Group Inc. (Canaccord or the Company) at Pfd-3 (low). The trend was restored to Stable (from Negative) largely on the strength of integration success and because improved geographic diversity has demonstrated a strengthening of Canaccord’s through-the-cycle resilience in the extended weak market environment in Canada. Results in U.K. and Europe, in particular, have counterbalanced poor results in Canada. The return to a Stable trend reflects DBRS’s belief that a negative rating action is less likely to occur in the very near term.

Canaccord’s leverage, as measured by total debt plus preferred shares-to-capitalization, of around 20% is acceptable to DBRS, as are the coverage ratios that have rebounded from recent periods. DBRS does recognize that the current environment represents a low point in the cycle and thus metrics are expected to be in the weaker end of the ranges; nevertheless, any deterioration will be unfavourable for the rating.

The trend has been negative for a long time! CF.PR.A was last mentioned on PrefBlog when the trend was revised to negative by DBRS in December 2011; CF.PR.C started trading in April 2012.

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