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ROC Pref III Corp. (the "Company") announced that Lear Corporation has reached agreement on a consensual debt restructuring under court supervision pursuant to a voluntary bankruptcy filing under Chapter 11 of the United States Bankruptcy Code. This plan is expected to constitute a credit event under the credit linked note ("CLN") issued by TD Bank to which the Company has exposure.
Given the unprecedented economic downturn and corresponding decline in global automobile production volumes, as well as continued difficult conditions in credit markets generally, Lear's Board of Directors concluded that this action was the fastest and most effective way to delever its capital structure.
The recovery rate for ROC Pref III Corp. is fixed at 40%. As a result, the Lear credit event is expected to reduce the number of additional defaults that ROC Pref III Corp. can sustain before the payment of $25.00 per Preferred Share at maturity is adversely affected by 1.0 to 1.6.
The table below shows the estimated impact of additional reference company defaults on the amount payable at maturity on March 23, 2012.
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Number of Additional Reference Estimated Payment per
Companies Defaulting Preferred Share at Maturity
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1.6 or less $25.00
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2.0 $20.09
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3.0 $7.99
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3.7 $0.00
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>>
ROC Pref III Corp. is listed for trading on the Toronto Stock Exchange under the symbol RPB.PR.A.
This document may make forward-looking statements and there are risks that actual results could differ materially from forecasts, projections or conclusions in the forward-looking statements. Certain material factors and assumptions were applied in drawing the conclusions or making the forecasts or projections in the forward-looking statements and you may find additional information about such material factors and assumptions and the material factors that could cause actual results to so differ, in the prospectus for the Company and on an ongoing basis in the Company's management reports of fund performance. The above information should be considered as background information only and should not be construed as investment or financial advice. Further, it should not be construed as an offer or solicitation to buy or sell securities. Investors should read the prospectus and continuous disclosure documents available at www.cclcapitalmarkets.com or www.sedar.com, which further describe the risks and fees and expenses associated with an investment in the preferred shares of ROC Pref III Corp. and should consult with professional advisors before making investments decisions.
SOURCE: Connor, Clark & Lunn Capital Markets Inc.
on ROC Pref III Corp., please visit www.cclcapitalmarkets.com or contact: Neil Murdoch, President & CEO, Connor, Clark & Lunn Capital Markets Inc., (416) 364-2839, nmurdoch@cclgroup.com or Darren Cabral, Vice-President, Connor, Clark & Lunn Capital Markets Inc., (416) 214-6182 or 1-888-276-2258, dcabral@cclgroup.com
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