Standard & Poor’s has announced:
S&P Global Ratings today said it has lowered its global scale and Canada scale issue-level ratings on Aimia Inc.’s preferred shares to ‘D’ from ‘B-‘ and ‘P-4(Low)’, respectively, on the company’s continued deferral of preferred dividend payments. The company’s ability to meet the dividend payments in full and on schedule remains restricted by Aimia’s inability to pass the capital impairment test set forth under the CBCA (Canada Business Corporations Act). S&P Global Ratings views this as a breach of the “imputed promise” on the preferred shares’ timely payment of dividends, and characterize it as a payment default.
Aimia had suspended the dividend payments on its preferred and common shares almost a year ago, on June 14, 2017, due to its inability to satisfy the capital impairment test as set forth under the CBCA. As per our criteria (see “Use Of ‘C’ And ‘D’ Issue Credit Ratings For Hybrid Capital And Payment-In-Kind Instruments,” published Oct. 24, 2013, on RatingsDirect), we lower the issue-level ratings on a hybrid capital instrument to a ‘D’ if the company is unable to repay the dividends within one year of the deferral date and is unable to pay future dividend payments in full and on time.
The above rating action does not have any impact on our corporate credit rating on Aimia (BB-/Negative/–) or our ‘BB’ issue-level rating on the company’s senior secured debt, because the deferral of payments on the preferred shares is allowed in the instrument’s terms and conditions.
Affected issues are AIM.PR.A, AIM.PR.B and AIM.PR.C.
DBRS has muttered darkly about AIMIA after downgrading the preferreds to Pfd-5(high) in August 2017, following the suspension of preferred share dividends by the company and the subsequent downgrade to P-4(high) by S&P.
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AIM Preferreds Have Defaulted, says S&P
Standard & Poor’s has announced:
Affected issues are AIM.PR.A, AIM.PR.B and AIM.PR.C.
DBRS has muttered darkly about AIMIA after downgrading the preferreds to Pfd-5(high) in August 2017, following the suspension of preferred share dividends by the company and the subsequent downgrade to P-4(high) by S&P.
This entry was posted on Monday, June 11th, 2018 at 5:35 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.