{"id":1172,"date":"2007-09-07T20:10:16","date_gmt":"2007-09-08T00:10:16","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=1172"},"modified":"2007-09-07T20:10:16","modified_gmt":"2007-09-08T00:10:16","slug":"bscpra-partial-call-for-redemption","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=1172","title":{"rendered":"BSC.PR.A : Partial Call for Redemption"},"content":{"rendered":"<p>Scotia Managed Companies <a href=\"http:\/\/www.scotiamanagedcompanies.com\/mcapp\/BSC_09_07_2007.pdf?FILE=BSC_09_07_2007.pdf&#038;TYPE=PRESS_RELEASE&#038;CONTENT_TYPE=pdf\">has announced<\/a> that BNS Split Corp II:<\/p>\n<blockquote>\n<p>has called 192,141 Preferred Shares for cash redemption on September 21, 2007 (in accordance with the Company\u2019s Articles) as a result of the special annual retraction of 1,296,280 Capital Shares by the holders thereof. The Preferred Shares shall be redeemed on a pro rata basis, so that each holder of Preferred Shares of record on September 20, 2007 will have approximately 6.863% of their Preferred Shares redeemed. The redemption price for the Preferred Shares will be $20.83 per share.<\/p>\n<\/blockquote>\n<p>The underlying security for BSC.PR.A is shares in the Bank of Nova Scotia. Asset coverage is 2.5:1.<\/p>\n<p>The issue is rated Pfd-2(low) by <a href=\"http:\/\/www.dbrs.com\">DBRS<\/a>, which looks very low to me. Their initial and as yet unchanged rating report for the company dated October 11, 2005, states:<\/p>\n<blockquote>\n<p>The rating of the Preferred Shares is based on:<br \/>\n(1) The available downside protection, which is approximately 50% to the principal amount of the outstanding Preferred Shares at closing;<br \/>\n(2) The credit quality and consistency of BNS\u2019s dividend distributions; and<br \/>\n(3) Portfolio shares that could be sold to provide liquidity and certainty of dividends to Preferred Shares.<\/p>\n<p>The main constraint to the rating is the dependence of the entire portfolio on the shares of BNS for downside protection and dividend income.<\/p>\n<p>The redemption date for both classes of shares will be September 22, 2010.<\/p>\n<\/blockquote>\n<p>ScotiaBank\u00a0preferreds are\u00a0rated Pfd-1, this represents the upper limit for a split share corporation based on the common. As of <a href=\"http:\/\/www.prefblog.com\/?p=561\">last year&#8217;s Tier 1 analysis<\/a>, Scotiabank had &#8230; call it $4,000-million of non-equity tier 1 capital covered by $16,000-million-odd equity. So call it 4:1 on the Scotiabank preferreds that are issued directly.<\/p>\n<p>I don&#8217;t think Pfd-1 is appropriate until coverage exceeds 3:1 in any event &#8230; but I would be comfortable with a Pfd-2(high) rating on BSC.PR.A, given the 2.5:1 coverage.<\/p>\n<p>BSC.PR.A is not tracked by HIMIPref\u2122\n<\/p>\n<p><!--3ff5239deb0b771a1296f70753801a56--><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Scotia Managed Companies has announced that BNS Split Corp II: has called 192,141 Preferred Shares for cash redemption on September 21, 2007 (in accordance with the Company\u2019s Articles) as a result of the special annual &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-1172","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1172","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1172"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1172\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1172"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1172"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1172"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}