DBRS Confirms Woodbridge Finance Corporation at A (high) and R-1 (middle), With a Stable Trend

DBRS has today confirmed the Medium-Term Notes of Woodbridge Finance Corporation (Woodbridge Finance) at A (high) and the Commercial Paper rating at R-1 (middle); the trends are Stable.

The ratings reflect the implicit rating of its parent, The Woodbridge Company Limited (Woodbridge), which holds 66% of the common shares of The Thomson Corporation (Thomson). Woodbridge Finance’s ratings are supported by the following factors: (1) pledged Thomson shares must equal at least 1.5 times the commercial paper outstanding and 2.0 times the notes outstanding; (2) $500 million in committed bank backup lines; (3) a guarantee from Woodbridge for interest payments on the notes and the difference between the issue price and face value of the commercial paper; and (4) the quarterly dividends received from Thomson.

DBRS notes that Woodbridge Finance’s commercial paper program can be fully utilized up to its $750 million limit. The $500 million committed backup bank line combined with the share pledge and guarantee referenced above provide adequate liquidity to warrant the R-1 (middle) rating. Additionally, DBRS notes that Woodbridge owns approximately $4.0 billion of investments in addition to its shares in Thomson.

Note:
All figures are in Canadian dollars unless otherwise noted.