STABILITY RATINGS The Noranda Income Fund has been assigned a rating of STA-3 (low) by the Dominion Bond Rating Service1 (DBRS) and a stability rating of SR-3 (stable, moderate) by Standard & Poor's2. On July 20, 2009, DBRS downgraded the Noranda Income Fund to STA-3 (low) from STA-3 (high). The rating remains Under Review with Negative Implications where they were placed on February 18, 2009. On February 24, 2009, S&P’s Ratings Services placed its 'SR-3' Canadian stability rating on the Noranda Income Fund on StabilityWatch with Negative Implications. ¹ Dominion Bond Rating Service (DBRS) DBRS has assigned a rating of STA-3 (low) to the Fund. A stability rating provides an indication of both the stability and sustainability of a fund’s cash distributions per unit. The DBRS stability rating philosophy is an indication of the Fund's ability to generate sufficient cash to pay out a stable level of distributions on a per unit basis over the longer term. It is comparable across industries and through an economic cycle. The DBRS income fund rating scale ranges from 'STA-1' to 'STA-7'. All ratings categories are subdivided into: "high" "middle" "low" to indicate the Fund’s relative position within its assigned rating category. There are seven factors that comprise a stability rating: (1) Operating Characteristics, (2) Asset Quality, (3) Financial Profile, (4) Diversification, (5) Size and Market Position, (6) Sponsorship/Governance, and (7) Growth. In addition, consideration is given to specific structural or contractual elements that may eliminate or mitigate specific risks or other potentially negative factors. Rating trends provide guidance in respect of DBRS's opinion regarding the outlook for the rating in question, with rating trends falling into one of three categories - "Positive", "Stable" or "Negative". The rating trend indicates the direction in which DBRS considers the rating is headed should present tendencies continue, or in some cases, unless challenges are addressed. In general, the DBRS view is based primarily on an evaluation of the issuing entity or guarantor itself, but may also include consideration of the outlook for the industry or industries in which the issuing entity operates. ² Standard & Poor's (S&P) Standard & Poor's has assigned a SR-3 (stable, moderate) rating to the Fund. A stability rating opinion is expressed through three key components: the rating, the outlook and the distribution profile. The rating level represents S&P's current opinion on the prospective relative sustainability and variability of an income fund's distributable cash flows, which underpin cash distributions. The stability rating level is expressed on a scale from 'SR-1' to 'SR-7'. The outlook, which indicates the expected short- to medium-term stability ratings trend. A stable, negative, positive, or developing outlook expresses which way the rating might change if current trends continue over a one- to three-year horizon. In addition, Stability Watch indicates a special surveillance period. The distribution profile, which considers an income fund's distribution policy in the context of its cash flow dynamics with implications for the likelihood of a prospective change in its distributions. Terms & Conditions of Use   -   Privacy Policy