The Preference Shares, Series 4 will be retractable at the option of their holders on or after
The Company's portfolio (the Portfolio) is a well-diversified, actively managed portfolio of common shares, which currently includes 60 well-known names that operate in different sectors. As of
Holders of the Preference Shares, Series 4 currently receive fixed cumulative preferential cash dividends of
In an effort to enhance returns to the common shareholders, the Company employs a leverage strategy that is achieved through the issuance of Class A Preference Shares and bank debt. The Company expects total leverage to not exceed 35% of the total Portfolio. In addition to the Preference Shares, Series 4, the Company currently has
As of
The confirmation of the rating at Pfd-1 (low) is based on the amount of downside protection available, the Portfolio composition, and the Company's overall performance metrics.
The main constraints on the rating are as follows:
(1) The downside protection available to holders of the Preference Shares, Series 4 depends on the market value of the underlying common shares held in the Portfolio, which will fluctuate over time.
(2) Dependence on the Portfolio manager to generate sufficient income to cover expenses and the Preference Shares, Series 4 distributions.
(3) Unhedged foreign currency exposure.
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/396929/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings>.
Notes:
All figures are in Canadian dollars unless otherwise noted.
The principal methodology is Rating Canadian Split Share Companies and Trusts (
The DBRS
The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info@dbrsmorningstar.com' >info@dbrsmorningstar.com.
The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.
For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com' >info@dbrsmorningstar.com.
Tel. +1 416 593-5577
Ratings
Date Issued Debt Rated Action Rating Trend Attributesi
US = Lead Analyst based in USA
CA = Lead Analyst based in
E =
U =
Unsolicited Participating With Access
Unsolicited Participating Without Access
Unsolicited Non-participating
08-Jun-22 3.75% Cumulative Redeemable Class A Preference Shares, Series 4 Confirmed Pfd-1 (low) -- CA
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