ROC Pref III Corp. Announcement



    TORONTO, June 18 /CNW/ - ROC Pref III Corp. announces that its Preferred
Shares have been placed on CreditWatch with negative implications. The move
comes as a result several downgrades of companies held in the Reference
Portfolio including the monoline insurance companies and Residential Capital
("ResCap") during the past several weeks. The rating on the Preferred Shares
reflects the rating on the fixed-rate managed credit linked note issued by The
Toronto-Dominion Bank (the "CLN"). The return on the CLN, and thus on the
Preferred Shares, is linked to the credit performance of a portfolio of 125
companies (the "Reference Portfolio").
    The Reference Portfolio is actively managed by Connor, Clark & Lunn
Investment Management Ltd. (the "Investment Manager"). The Investment Manager
commented that "we remain confident in the overall portfolio credit quality.
The vast majority of the holdings are performing well. Challenges in the US
housing and mortgage market have caused a number of the holdings in the
Reference Portfolio to be downgraded. Recently, S&P classified ResCap's debt
restructuring as a "selective default" until they do further analysis. A
selective default is not a default from the perspective of the Reference
Portfolio and the CLN. If S&P restores ResCap's rating to CCC, it may result
in the removal of the Preferred Shares from CreditWatch."
    The Preferred Shares benefit from the protection of a first loss tranche
equal to 3.35% of the Reference Portfolio and from a fixed recovery rate of
40% on any defaults. As a result, ROC Pref III Corp. will be able to sustain
7 defaults, which is approximately 2.5 times the average default rate and
1.3 times the worst default rate experienced in a portfolio of the same credit
quality as the Reference Portfolio in any 3.8 year period since 1981. ROC Pref
III Corp.'s Preferred Shares pay a fixed quarterly coupon of 4.40% on their
$25.00 principal value and will mature on March 22, 2012. The Standard &
Poor's rating addresses the likelihood of full payment of interest and payment
of $25.00 principal value per Preferred Share on the maturity date.
    The Preferred Shares are listed for trading on the Toronto Stock Exchange
under the symbol RPB.PR.A.





For further information:

For further information: please visit www.cclcapitalmarkets.com or
contact: Tim Bradshaw, Connor, Clark & Lunn Capital Markets Inc., (416)
364-3658, tbradshaw@cclgroup.com, www.cclcapitalmarkets.com

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ROC PREF III CORP.

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