{"id":3401,"date":"2008-10-15T17:48:58","date_gmt":"2008-10-15T21:48:58","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=3401"},"modified":"2008-10-15T17:48:58","modified_gmt":"2008-10-15T21:48:58","slug":"ftupra-quadravest-requests-silence","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=3401","title":{"rendered":"FTU.PR.A: Quadravest Requests Silence"},"content":{"rendered":"

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

has today discontinued its ratings on the Preferred Shares issued by US Financial 15 Split Corp. at the request of Quadravest Capital Management Inc. (the Promoter).<\/p><\/blockquote>\n

DBRS had downgraded the issue to Pfd-5 [Trend Negative]<\/a> on September 30. The asset coverage at September 30 was just under 1.1:1 according to the company<\/a>, but there have – ahem! – been further developments in the financial markets since then. S&P reports<\/a> that the S&P 500 Financials were down 14.54% month-to-October 14, and I think it’s reasonably safe<\/a> to say the figure is now worse than -20%. So say that NAV is now about $8.50.<\/p>\n

One thing I find interesting about the issue is the monthly retraction<\/a>:<\/p>\n

Holders retracting a Preferred Share will be entitled to receive an amount per Preferred Share equal to the lesser of (i) $10.00; and (ii) 96% of the Net Asset Value per Unit determined as of the Retraction Date less the cost to the Company of the purchase of a Class A Share in the market for cancellation. Payment for any shares so retracted will be made within 15 days of the Retraction Date.<\/p><\/blockquote>\n

Unfortunately, hope is springing eternal for the capital unitholders – FTU closed at $2.65 today. The termination date is Dec. 1, 2012, so quick! What’s the fair value of a call option on US Financials currently worth $8.50, with strike price $10.00 and a four year term? Don’t forget the management fee grind<\/a>! Whatever it is, I bet it’s less than $2.65!<\/p>\n

FTU.PR.A closed at $5.50. Assuming the $8.50 NAV (an extremely approximate number, don’t anyone dare take market action without doing their own work!) then the preferred share monthly retraction price is (96% * $8.50) – $2.65 = about $5.50. It’s surprisingly close!<\/p>\n","protected":false},"excerpt":{"rendered":"

DBRS has tersely announced that it: has today discontinued its ratings on the Preferred Shares issued by US Financial 15 Split Corp. at the request of Quadravest Capital Management Inc. (the Promoter). DBRS had downgraded …<\/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-3401","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/3401","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=3401"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/3401\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3401"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3401"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3401"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}