DBRS has announced that it:
has today upgraded the Class B Preferred Shares, Series 2 (the Preferred Shares) rating of BNS Split Corp. II (the Company) to Pfd-2 from Pfd-2 (low). The Preferred Shares were issued in September 2015 following a reorganization of the Company at an issue price of $19.71 each. At the same time, the Company redeemed all of the outstanding Class B Preferred Shares, Series 1. The redemption date of the Preferred Shares is September 22, 2020.
The Company holds a portfolio (the Portfolio) of common shares of Bank of Nova Scotia (BNS) (rated AA, Negative trend by DBRS). The dividends received from the Portfolio are used to pay fixed cumulative quarterly distributions to the holders of the Preferred Shares in the amount of $0.1971 per quarter, representing 4.0% per annum on the issue price. Excess dividends net of all expenses of the Company, after the preferred cumulative dividends have been paid to the holders of the Preferred Shares, may be paid as dividends on the Capital Shares or re-invested by the Company in additional BNS Shares as determined by the board of directors of the Company. The distributions of dividends on the Preferred Shares may be additionally funded from the sale of the underlying shares. The Company may engage in securities lending to supplement the income generated by the dividends.
As of September 1, 2016, the downside protection is 68.4%, an increase from the initial 61.6% recorded in September 2015 at the time of the Preferred Shares issuance. An increase in dividend distributions from BNS helped boost the dividend coverage ratio, which is approximately 2.7 times. Taking into consideration the dividend coverage, the amount of downside protection available, and the absence of the grind on the Portfolio, the rating of the Preferred Shares has been upgraded to Pfd-2.
BSC.PR.C is tracked by HIMIPref™ but relegated to the Scraps index on volume concerns – the average trading volume is less than 100 shares daily.
This entry was posted on Tuesday, September 13th, 2016 at 11:47 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed.
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BSC.PR.C Upgraded to Pfd-2 by DBRS
DBRS has announced that it:
BSC.PR.C is tracked by HIMIPref™ but relegated to the Scraps index on volume concerns – the average trading volume is less than 100 shares daily.
This entry was posted on Tuesday, September 13th, 2016 at 11:47 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.