{"id":1700,"date":"2008-01-17T15:59:28","date_gmt":"2008-01-17T19:59:28","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=1700"},"modified":"2008-01-17T15:59:28","modified_gmt":"2008-01-17T19:59:28","slug":"hpfpra-hpfprb-downgraded-again","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=1700","title":{"rendered":"HPF.PR.A &amp; HPF.PR.B Downgraded Again"},"content":{"rendered":"<p>Geez, you know, downgrades are just like peanuts! It hasn&#8217;t been too long since <a href=\"http:\/\/www.prefblog.com\/?p=1365\">the last downgrade of these issues<\/a>.<\/p>\n<p><a href=\"http:\/\/www.dbrs.com\">DBRS<\/a> has announced it has:<\/p>\n<blockquote><p>downgraded two series of Preferred Shares issued by High Income Preferred Shares Corporation (the Company). The Series 1 Shares have been downgraded from Pfd-2 to Pfd-2 (low) and the Series 2 Shares have been downgraded from Pfd-3 to Pfd-4. Both series of shares maintain a Negative trend.<\/p>\n<p>At inception, the Company issued 1.26 million Series 1 Shares at $25 per share, 1.26 million Series 2 Shares at $14.70 per share and privately placed 1.26 million Equity Shares at $3.54 per share. The termination date for each series of shares is June 29, 2012 (the Redemption Date).<\/p>\n<p>Approximately 33% of the gross proceeds from the initial offering were used to enter into a forward agreement with the Canadian Imperial Bank of Commerce (the Counterparty) to provide for the full repayment of the Series 1 Shares principal on the Redemption Date. The remaining net proceeds from the initial offering were invested in a portfolio of common shares (the Managed Portfolio), which initially provided asset coverage to the Series 2 Shares of about 1.8 (downside protection of 44%). In addition to providing coverage to the Series 2 Shares principal, the Managed Portfolio is used to pay annual fees and expenses, as well as monthly distributions to the Series 1 and Series 2 Shares (5.85% and 7.25% per annum, respectively).<\/p>\n<p>Since inception, the Managed Portfolio\u2019s net asset value (NAV) has declined 39% from about $27 to $16.36 per share (as of January 11, 2008), providing downside protection of 10% to the Series 2 Shareholders. Using a covered call option approach, the Managed Portfolio\u2019s NAV has suffered in recent months due to high volatility in equity markets.<\/p><\/blockquote>\n<p><!--0ebaba1e152159314b01015b9c2b8e6d--><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Geez, you know, downgrades are just like peanuts! It hasn&#8217;t been too long since the last downgrade of these issues. DBRS has announced it has: downgraded two series of Preferred Shares issued by High Income &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-1700","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1700","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=1700"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1700\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1700"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}