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A Matter Of Preference: Hybrid Capital Regains Popularity Among Canadian Pipeline, Utility, And IPP Issuers Jan 11
Standard & Poors, Jan 2011
Abstract
Canadian pipeline and utility companies are again opting to issue preferred shares as a small--but noticeable--part of their overall capital financing strategy. Several independent power producers (IPP), formerly structured as trusts, have also availed themselves of a receptive market. Neither pure equity nor debt, in our view, these instruments offer some flexibility and allow companies to gain access to an additional source of capital. While the details differ, some European utilities have also found this type of instrument to be an attractive option. In both regions, Standard & Poor's Ratings Services has so far applied its 'intermediate' treatment (as per its criteria) in its analysis, treating issuances to date as 50% debt and 50% equity. Standard & Poor's believes the...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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