DBRS Mass Review of SplitShares

DBRS has announced:

DBRS Limited (DBRS Morningstar) placed certain preferred shares issued by various split share companies Under Review with Negative Implications. Each of these split share companies invests in a portfolio of securities funded by issuing two classes of shares: dividend-yielding preferred shares or securities (the Preferred Shares) and capital shares or units (the Capital Shares). In such structure, the Preferred Shares normally benefit from the downside protection provided by the net asset value (NAV) of the Capital Shares. Following the stock market sell-off in response to the worldwide spread of Coronavirus Disease (COVID-19) and various geopolitical news, the Preferred Shares experienced substantial declines in their downside protection. As a result, DBRS Morningstar placed the Preferred Shares listed below Under Review with Negative Implications. DBRS Morningstar will take final rating action on these Preferred Shares once a longer-term trend has been established for the NAVs of the affected split share companies.

Affected issues, with my estimates of the current (as of the close, March 24) Net Asset Value of the Whole Units, are:

Ticker Current
DGS.PR.A Pfd-3 11.28
LBS.PR.A Pfd-3 11.77
PDV.PR.A Pfd-3(high) Not
SBN.PR.A Pfd-3 11.54

Update, 2020-6-25: LCS.PR.A should have been in the table.

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