teranet HolDings lP ($2.1-billion senior secureD Debt sHelf fileD in 2010)

The position: Avoid Why don’t you like it? The managers believe Teranet, whose businesses include managing Ontario’s land registry database, would be vulnerable to a slowdown in the Canadian housing market. “We found Teranet’s debt policy aggressive,” Berlettano said, noting that S & P and DBRS cut their ratings outlook for the company this year. “They are now in contravention of one of their covenants in regard to their ability to incur additional debt. As well, the company’s financial results appear highly leveraged to small declines in real estate activity.” Potential positives: The housing market has a soft landing; owner OMERS injects additional equity to strengthen the balance sheet.