DBRS confirms GMP

DBRS said it confirmed the Pfd-3 (low) rating on GMP Capital Inc.'s preferred shares with a stable trend.

The agency said the rating reflects the strength of the company's business franchise as a premier provider of investment banking and capital markets products and services to its targeted market of mid-sized Canadian companies, most of whom operate in the resource and energy sectors.

Since early 2011, the company's capitalization has become relatively more aggressive as a result of C$66 million of share buybacks. At current levels of financial leverage, the company's financial flexibility is somewhat impaired, the agency said. Nevertheless, DBRS remains comfortable with the Pfd-3 (low) rating given the company's flexible cost base and its excess regulatory capital at its operating subsidiaries.

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