{"id":2149,"date":"2008-05-13T17:38:19","date_gmt":"2008-05-13T21:38:19","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=2149"},"modified":"2008-05-13T17:38:19","modified_gmt":"2008-05-13T21:38:19","slug":"spla-downgraded-to-pfd-5-by-dbrs","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=2149","title":{"rendered":"SPL.A Downgraded to Pfd-5 by DBRS"},"content":{"rendered":"

DBRS<\/a> has:<\/p>\n

today downgraded the Class A Shares issued by Mulvihill Pro-AMS RSP Split Share Corp. (the Company) to Pfd-5 from Pfd-4; the trend is Negative.<\/p>\n

In March 2002, the Company issued six million Class A Shares at $10 per share and six million Class B Shares at $20 per share, both with a redemption date of December 31, 2013 (the Termination Date). The Company invested approximately 34.5% of the gross proceeds in a portfolio of Canadian equity securities to enter into a forward agreement with Royal Bank of Canada (the Counterparty) to provide for the full capital repayment of the Class B Shares on the Termination Date.<\/p>\n

The rest of the net proceeds from the initial offering were invested in a diversified portfolio of Canadian and U.S. equities (the Managed Portfolio). After offering expenses, the Managed Portfolio provided asset coverage of approximately 1.8 times to the Class A Shares (downside protection of about 44%). In addition to providing principal protection for the Class A Shares, the Managed Portfolio is used to make distributions to the Class A Shares equal to 6.5% per annum and pay annual fees and expenses. Also, the Company has been making semi-annual contributions of $0.43 per Class A Share from the Managed Portfolio to an account (the Class A Forward Account), which was used to enter a forward agreement with the Counterparty for the repayment of the Class A Shares principal on the Termination Date.<\/p>\n

The Managed Portfolio has a current value of $2.65 per share (as of May 8, 2008), a decrease of nearly 85% since inception. About one-third of the decline has resulted from the semi-annual contributions to the Class A Forward Account. The present value of the Class A Forward Account is $6.53, and the future value is $8.08, meaning 80.8% of the Class A Shares principal is now guaranteed by the Counterparty on the Termination Date. In order for the Company to return the $10 principal to each Class A Shareholder on the Termination Date, the Company would still need to contribute approximately $1.54 (present value) to the Class A Forward Account today in order to secure the remaining $1.92 (future value) of required principal protection. Consequently, the Company will find it challenging to meet its annual expenses and monthly dividend payments to the Class A Shareholders.<\/p><\/blockquote>\n

SPL.A is tracked by HIMIPref\u2122 with a securityCode<\/a> of A43400. The creditRatings<\/a> table of the permanentDatabase<\/a> has been updated to reflect the new information. It was included in the SplitShare Index until the 2002-10-31 rebalancing<\/a>, when it was transferred to “Scraps” on volume concerns.<\/p>\n

This issue was downgraded to Pfd-4 in October, 2007<\/a>. The rating history is:<\/p>\n

\n\n\n\n\n\n\n\n
SPL.A Rating History<\/td>\n<\/tr>\n
Rating<\/td>\nFrom<\/td>\nTo<\/td>\n<\/tr>\n
Pfd-2<\/td>\n2002-3-15<\/td>\n2003-4-8<\/td>\n<\/tr>\n
Pfd-3<\/td>\n2003-4-9<\/td>\n2007-10-23<\/td>\n<\/tr>\n
Pfd-4<\/td>\n2007-10-24<\/td>\n2008-5-13<\/td>\n<\/tr>\n
Pfd-5<\/td>\n2008-5-14<\/td>\n?<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

Further information is available via the Mulvihill website<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

DBRS has: today downgraded the Class A Shares issued by Mulvihill Pro-AMS RSP Split Share Corp. (the Company) to Pfd-5 from Pfd-4; the trend is Negative. In March 2002, the Company issued six million Class …<\/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-2149","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/2149","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=2149"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/2149\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}