DBRS has announced:
that the Under Review with Developing Implications status has been maintained for GMP Capital Inc.’s (GMP or the Company) Cumulative Preferred Shares at Pfd-4 (high). The rating was put Under Review with Developing Implications on June 18, 2019, following the announcement that GMP had agreed to sell substantially all of its capital markets business to Stifel Financial Corp. (Stifel).
On June 17, 2019, GMP announced that it was selling substantially all of its capital markets business to Stifel for a cash consideration of tangible book value of the business plus $45 million, subject to adjustment and pending shareholder and regulatory approval. It was later announced that Harris Fricker, then Chief Executive Officer (CEO) of GMP, and other key personnel agreed to join Stifel. On August 6, 2019, the majority of shareholders voted to approve the sale during a special meeting.
Furthermore, under the leadership of Interim President and CEO, Kish Kapoor, the Company announced that it is in discussions to consolidate the ownership of Richardson GMP. Richardson GMP is the Company’s wealth management joint venture in Canada, which will become a wholly owned subsidiary and the cornerstone of GMP’s business upon closing this second transaction. The acquisition will only take place once the capital markets business transaction closes and is also subject to separate shareholder and regulatory approval.
…
The rating could be upgraded if GMP’s franchise prospects and its pro forma financials post-transactions are deemed to be stronger as a result of shedding the capital markets businesses, which have been highly volatile and loss-making.
The rating could be downgraded if the transactions fail to be completed as proposed — including if GMP is not able to acquire majority control of Richardson GMP, which might limit its wealth management growth strategy — or if GMP’s credit fundamentals post-transaction are deemed to be weaker.
GMP.PR.B and GMP.PR.C were initially placed on Review-Developing in June, 2019.
GMP.PR.B was issued as a FixedReset, 5.50%+289, that commenced trading 2011-2-22 after being announced 2011-2-1. Notice of extension was published 2016-2-23, followed by the announcement of a reset to 3.611%. I recommended against conversion, but there was a 22% conversion into GMP.PR.C anyway.
As indicated above, GMP.PR.C is a FloatingReset, +289, that came into being in 2016 via a 22% conversion into GMP.PR.C.
This entry was posted on Thursday, September 19th, 2019 at 1:49 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed.
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GMP.PR.B & GMP.PR.C Remain on Review-Developing with DBRS
DBRS has announced:
GMP.PR.B and GMP.PR.C were initially placed on Review-Developing in June, 2019.
GMP.PR.B was issued as a FixedReset, 5.50%+289, that commenced trading 2011-2-22 after being announced 2011-2-1. Notice of extension was published 2016-2-23, followed by the announcement of a reset to 3.611%. I recommended against conversion, but there was a 22% conversion into GMP.PR.C anyway.
As indicated above, GMP.PR.C is a FloatingReset, +289, that came into being in 2016 via a 22% conversion into GMP.PR.C.
This entry was posted on Thursday, September 19th, 2019 at 1:49 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.