{"id":2276,"date":"2008-06-18T17:25:37","date_gmt":"2008-06-18T21:25:37","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=2276"},"modified":"2008-06-18T17:25:37","modified_gmt":"2008-06-18T21:25:37","slug":"rpbpra-on-credit-watch-negative-sp","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=2276","title":{"rendered":"RPB.PR.A on Credit Watch Negative: S&amp;P"},"content":{"rendered":"<p>ROC Pref III Corp <a href=\"http:\/\/www.cclgroup.com\/portals\/3\/newsitems\/ROCIII\/ROCIIIAnnouncementJune182008.pdf\">has announced<\/a>:<\/p>\n<blockquote><p>its Preferred Shares have been placed on CreditWatch with negative implications. The move comes as a result several downgrades of companies held in the Reference Portfolio including the monoline insurance companies and Residential Capital (\u201cResCap\u201d) during the past several weeks. The rating on the Preferred Shares reflects the rating on the fixed-rate managed credit linked note issued by The Toronto-Dominion Bank (the \u201cCLN\u201d). The return on the CLN, and thus on the Preferred Shares, is linked to the credit performance of a portfolio of 125 companies (the &#8220;Reference Portfolio&#8221;). The Reference Portfolio is actively managed by Connor, Clark &#038; Lunn Investment Management Ltd. (the \u201cInvestment Manager\u201d). The Investment Manager commented that \u201cwe remain confident in the overall portfolio credit quality. The vast majority of the holdings are performing well. Challenges in the US housing and mortgage market have caused a number of the holdings in the Reference Portfolio to be downgraded.<\/p>\n<p>Recently, S&#038;P classified ResCap\u2019s debt restructuring as a \u201cselective default\u201d until they do further analysis. A selective default is not a default from the perspective of the Reference Portfolio and the CLN. If S&#038;P restores ResCap\u2019s rating to CCC, it may result in the removal of the Preferred Shares from CreditWatch.\u201d<\/p>\n<p>The Preferred Shares benefit from the protection of a first loss tranche equal to 3.35% of the Reference Portfolio and from a fixed recovery rate of 40% on any defaults. As a result, ROC Pref III Corp. will be able to sustain 7 defaults, which is approximately 2.5 times the average default rate and 1.3 times the worst default rate experienced in a portfolio of the same credit quality as the Reference Portfolio in any 3.8 year period since 1981. ROC Pref III Corp.\u2019s Preferred Shares pay a fixed quarterly coupon of 4.40% on their $25.00 principal value and will mature on March 22, 2012. The Standard &#038; Poor\u2019s rating addresses the likelihood of full payment of interest and payment of $25.00 principal value per Preferred Share on the maturity date.<\/p><\/blockquote>\n<p>CC&#038;L had to make <a href=\"http:\/\/www.prefblog.com\/?p=2118\">a similar announcement for RPQ.PR.A<\/a> in May.<\/p>\n<p>RPB.PR.A is not tracked by HIMIPref&trade;.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>ROC Pref III Corp has announced: its Preferred Shares have been placed on CreditWatch with negative implications. The move comes as a result several downgrades of companies held in the Reference Portfolio including the monoline &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-2276","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/2276","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=2276"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/2276\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2276"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2276"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}