PrefBlog

Quadravest has announced:

Canadian Banc Corp. (the “Company”) announces that it will issue Rights to all Class A Shareholders thereby allowing existing shareholders to increase their investment in the Company. Each Class A Shareholder will be entitled to receive one Right for each Class A Share held as of the record date of August 25, 2014. Six Rights will entitle the holder to purchase a Unit consisting of one Class A Share at $14.18 and one Preferred Share at $10.00 for the total subscription price of $24.18. The Rights are exercisable at any time once issued and will expire at 5:00 p.m. (EST) on October 6, 2014.

The net proceeds from the subscription of Units will be used to acquire additional securities in accordance with the Company’s investment objectives. The exercise price is consistent with current trading prices and accretive to the most recently published net asset value per Unit. The offering is expected to increase the trading liquidity of the Company and reduce the management expense ratio.

Both the Preferred Shares and Class A Shares trade on the Toronto Stock Exchange (the “TSX”) under the symbol “BK.PR.A” and “BK” respectively. The Rights will be listed and will trade on the TSX until 12:00 noon (EST) on October 6, 2014. The Rights will be eligible for exercise on and following August 26, 2014.

The Company invests in a portfolio of six publicly traded Canadian Banks as follows: Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Bank of Nova Scotia, Toronto-Dominion Bank.

Separately, in a review of the credit of six Split Share Corporations:

Of the six structured Preferred Share ratings updated today by DBRS, one has been upgraded and five have been confirmed. Equity performance has been strong over the past year, with the S&P/TSX Composite Index rising by 22.8% from July 31, 2013, to July 31, 2014. All six Issuers experienced increasing net asset values (NAVs) over that same period. Notwithstanding the positive performance over the past year, the ratings assigned to the many of the Preferred Shares continue to be constrained by distributions paid to holders of the Capital Shares, which depress NAVs and downside protection levels. Other key rating factors include the downside protection volatility in recent months, the credit quality and diversification of each Portfolio and the expected maturity date of the Preferred Shares of each Issuer.

One Preferred Share was upgraded, primarily based on the level and stability of the downside protection over the past year.

The upgrade was for BK.PR.A, which has a Unit Value of 24.16 as of 2014-8-29, implying Asset Coverage of 2.4+:1. It is now rated Pfd-3(high), one notch higher than the confirmation in 2013.

This entry was posted on Friday, September 5th, 2014 at 7:05 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.