DBRS Morningstar has also affirmed the ratings assigned to the Class AA Preferred Shares, Series 8 (the Series 8 Preferred Shares); the Class AA Preferred Shares, Series 9 (the Series 9 Preferred Shares); Class AA Preferred Shares, Series 10; Class AA Preference Shares, Series 11; and Class AA Preference Shares, Series 12 (collectively, the Class AA Preferred Shares) at Pfd-2 (low).
Series 13 Preferred Shareholders will be entitled to receive a quarterly fixed cumulative dividend of
The Company holds a portfolio (the Portfolio) of
All series of Class AA Preferred Shares rank ahead of Capital Shares, Class AAA Preferred Shares and Junior Preferred Shares Series 1; the Junior Preferred Shares, Series 2; and the Junior Preferred Shares, Series 3 (collectively, the Junior Preferred Shares) and rank pari passu with all other Class AA Preferred Shares with respect to payment of dividends and return of capital.
Junior Preferred Shareholders are entitled to receive quarterly non-cumulative cash distributions at an annual rate of 5% when declared by the Board of Directors. There are
The Company has issued a limited number of Class A Voting Shares which have priority over the Class AA Preferred Shares with respect to capital in the event of the dissolution, liquidation or insolvency of the Company. There are currently 100 such shares outstanding with a book value of
Following the offering of the Series 13 Preferred Shares, the downside protection available to the Class AA Preferred Shares is expected to be approximately 88.7%. Based on current dividends paid on BAM shares and the Canadian dollar and
The main constraints to ratings are as follows:
(1) The downside protection available to Class AA Preferred Shareholders depends solely on the market value of BAM Shares held in the Portfolio, which will fluctuate over time.
(2) There is a lack of diversification, as the Portfolio is entirely made up of BAM Shares.
(3) Changes in BAM's dividend policy may result in reductions in Class AA Preferred Shares dividend coverage.
(4) As BAM declares dividends in
U.S.dollars, the Company is exposed to foreign currency risk relating to the Canadian- U.S.exchange rate, specifically the appreciation of the Canadian dollar versus the U.S.dollar. This may have a negative impact on the dividend coverage ratio of the Class AA Preferred Shares as these dividends are paid in Canadian dollars.
(5) Downside protection available to the Class AA Preferred Shares may be negatively affected by the retraction of the Junior Preferred Shares.
A description of how DBRS Morningstar considers ESG factors in the DBRS Morningstar Analytical Framework is available in DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/ research/373262.
Unless otherwise stated, all figures are in Canadian dollars.
The primary methodology is the Canadian Fractional Share Trust and Corporation Rating (
Related regulatory information pursuant to National Instrument 25-101 Designated Rating Organizations is incorporated by reference and may be viewed by clicking the link under Related Documents or by contacting us at [email protected]
The rated entity or its related entities participated in the rating process for this rating metric. 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.
The full report providing additional analytical detail is available by clicking the link under Related Documents below or by contacting us at [email protected]
For more information about this credit or this industry, visit www.dbrsmorningstar.com or contact us at [email protected]
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Date Issued Debt Rated Action Rating Trend Attributesi
US = Lead Analyst based in the USA
CA = Lead Analyst based in
EU = Lead Analyst based in EU
E = EU approved
Unsolicited participation with access
Unsolicited participation without access
Unsolicited Non Participating
28-Mar-22Class AA Preferred Shares, Series 10 Confirmed Pfd-2 (low) -- CA
28-Mar-22Class AA Preferred Shares, Series 11 Confirmed Pfd-2 (low) -- CA
28-Mar-22Class AA Preferred Shares, Series 12 Confirmed Pfd-2 (low) -- CA
28-Mar-22Class AA Preferred Shares, Series 13 Provis.-Final Pfd-2 (low) -- CA
28-Mar-22Class AA Preferred Shares, Series 8 Confirmed Pfd-2 (low) -- CA
28-Mar-22Class AA Preferred Shares, Series 9 Confirmed Pfd-2 (low) -- CA