{"id":2069,"date":"2008-04-17T21:43:48","date_gmt":"2008-04-18T01:43:48","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=2069"},"modified":"2008-04-17T21:43:48","modified_gmt":"2008-04-18T01:43:48","slug":"cbwpra-downgraded-to-pfd-3low-by-dbrs","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=2069","title":{"rendered":"CBW.PR.A Downgraded to Pfd-3(low) by DBRS"},"content":{"rendered":"

DBRS<\/a> has announced that it:<\/p>\n

has today downgraded the Preferred Shares issued by Copernican World Banks Split Corp. (the Company) to Pfd-3 (low) from Pfd-2 (low) with a Stable trend. The rating had been placed Under Review with Developing Implications on March 19, 2008.<\/p>\n

In November 2007, the Company raised gross proceeds of $96.1 million by issuing 4.805 million Preferred Shares (at $10 each) and an equal amount of Class A Shares (at $10 each). The initial structure provided downside protection of 50% to the Preferred Shares as all issuance costs were paid by AIC Investment Services Inc. (the Manager).<\/p>\n

The net proceeds from the offering were used to invest in a portfolio of common shares (the Portfolio) issued by bank-based financial institutions with strong credit quality (World Banks). The Portfolio is actively managed by the Manager to invest in World Banks that have at least a US$1 billion market capitalization and exhibit the potential for attractive dividend yields and strong earnings growth momentum. It is expected that a minimum of 80% of all foreign content will be hedged back to the Canadian dollar at all times to mitigate net asset value (NAV) volatility relating to foreign currency exchange fluctuation.<\/p>\n

Holders of the Preferred Shares receive fixed cumulative quarterly dividends yielding 5.25% per annum. The Company aims to provide holders of the Class A Shares with monthly distributions targeted at 8.0% per annum.<\/p>\n

There is an asset coverage test in place that does not permit the Company to make monthly distributions to the Class A Shares if the dividends on the Preferred Shares are in arrears or if the NAV of the Portfolio is less than $15 after giving effect to such distributions. Since the Company\u2019s NAV has decreased below $15, distributions to the Class A Shares are currently suspended, which greatly reduces the grind on the Portfolio going forward.
\nThe credit quality of the Portfolio is strong and globally diversified, but the NAV of the Portfolio has experienced downward pressure due to its concentration in the financial industry. Since inception, the NAV has dropped from $20 per share to $13.06 (as of April 11, 2008), a decline of about 35%. As a result, the current downside protection available to the Preferred Shareholders is approximately 23%.<\/p>\n

The downgrade of the Preferred Shares is based on the greatly reduced asset coverage available to cover repayment of principal.<\/p>\n

The redemption date for both classes of shares issued is December 2, 2013. <\/p><\/blockquote>\n

CBW.PR.A is not tracked by HIMIPref™. The DBRS mass review of financial split shares has been previously discussed<\/a>.<\/p>\n

Update<\/b>: Financial statements and other information is available on the fund’s website<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

DBRS has announced that it: has today downgraded the Preferred Shares issued by Copernican World Banks Split Corp. (the Company) to Pfd-3 (low) from Pfd-2 (low) with a Stable trend. The rating had been placed …<\/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-2069","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/2069","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=2069"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/2069\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2069"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2069"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2069"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}