PrefBlog

Assiduous Readers will remember that I am following the Fortress receivership with great interest and today there was a new development:

Companies affiliated with Fortress Real Developments Inc. misled syndicated mortgage lenders about the value of land earmarked for real estate development projects, putting investors at risk of losing their money if the loans could not be repaid, the RCMP alleged in a search-warrant application filed in court in April.

In the Collier Centre condominium development in Barrie, Ont., the RCMP allege investors were told in 2012 that the “as is” value of the land was $21.9-million, but the RCMP believe the land was worth only about $7-million, according to the application.

Syndicated mortgage lenders provided $16.9-million in financing for the project, believing the amount was fully secured by the value of the land.

The plot thickens!

DBRS has confirmed Enbridge at Pfd-3(high):

DBRS Limited (DBRS) confirmed the Issuer Rating of Enbridge Inc. (ENB or the Company) at BBB (high) and the ratings on the Company’s Medium-Term Notes & Unsecured Debentures at BBB (high), Fixed-to-Floating Subordinated Notes at BBB (low), Cumulative Redeemable Preferred Shares at Pfd-3 (high) and Commercial Paper (CP) at R-2 (high), all with Stable trends.

The confirmations incorporate DBRS’s assessment of ENB’s strong business risk profile, which should benefit over the medium term from its strategic plan to reposition its asset mix to a pure regulated pipeline and utility business model (demonstrated by $7.5 billion of announced non-core asset sales to date) and completion of its current large portfolio of low-risk capital projects, combined with an improving financial risk profile that should benefit from ENB’s more conservative recent funding plan (including the expected $4.0 billion consolidated debt reduction), corporate simplification and the potential for reduced structural subordination at the ENB level over time. The Stable trends incorporate DBRS’s expectation that any incremental investments in new projects would be consistent with maintaining a strong overall business risk profile and medium-term improvement in key credit metrics with the completion of the current large capital expenditure (capex) program.
…
A positive rating action is unlikely without substantial reduction in structural subordination. DBRS expects ENB to meet its key target metrics of 15% funds from operations-to-debt and five times debt-to-EBITDA, likely in late 2018 or early 2019. A negative rating action is not expected over the medium term.

This entry was posted on Monday, July 23rd, 2018 at 5:54 pm and is filed under Market Action. 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.