{"id":3261,"date":"2008-10-02T17:33:28","date_gmt":"2008-10-02T21:33:28","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=3261"},"modified":"2008-10-02T17:33:28","modified_gmt":"2008-10-02T21:33:28","slug":"spla-downgraded-to-d-by-dbrs","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=3261","title":{"rendered":"SPL.A Downgraded to "D" by DBRS"},"content":{"rendered":"

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

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

After paying offering expenses and an initial contribution to a Class B Shares forward agreement, the net proceeds from the initial offering were invested in a diversified portfolio of Canadian and U.S. equities (the Managed Portfolio), providing asset coverage of approximately 1.8 times to the Class A Shares. In addition to providing principal protection for the Class A Shares, the Managed Portfolio has been used to make fixed cumulative monthly distributions to the Class A Shares equal to 6.5% per annum and to pay annual fees and expenses. In addition to this, the Company has been making semi-annual contributions of $0.43 per Class A Share from the Managed Portfolio to a forward agreement with the Counterparty for the repayment of the Class A Shares principal on December 31, 2013 (the Termination Date).<\/p>\n

On September 3, 2008, the Company announced that distributions to the Class A Shares would be suspended subsequent to the September 2008 distribution payment in order to provide greater certainty to the repayment of principal.<\/p>\n

The Managed Portfolio has declined more than 90% since inception. About one-third of the decline has resulted from the semi-annual contributions to the Class A Forward Account. Based on previous contributions to the Class A Forward Account, the Counterparty has guaranteed to repay 89.8% of the Class A Shares principal amount on the Termination Date. The current net asset value (NAV) of the Managed Portfolio is $1.48 (as of September 25, 2008), which is sufficient for the Company to contribute the remaining funds necessary to secure 100% of the principal amount on the Termination Date through the forward agreement. However, there is an additional $3.41 per Class A Share in cumulative dividends still to be paid at maturity. In order for the Company to repay full principal and cumulative dividends on the Termination Date, a return of 23% per year on the Managed Portfolio is required. Once Company expenses are taken into account, the return required to meet all Class A Shares principal and dividend obligations increases to more than 40% per year. Based on the foregoing, DBRS has downgraded the rating of the Class A Shares to D.<\/p><\/blockquote>\n

SPL.A was last mentioned on PrefBlog when it was downgraded to Pfd-5<\/a>. SPL.A is tracked by HIMIPref™ and is included in the “Scraps” index – it would be SplitShare … but there are credit concerns!<\/p>\n","protected":false},"excerpt":{"rendered":"

DBRS has announced that it: has today downgraded the Class A Shares issued by Mulvihill Pro-AMS RSP Split Share Corp. (the Company) to D from Pfd-5. After paying offering expenses and an initial contribution to …<\/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-3261","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/3261","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=3261"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/3261\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}