DBRS Assigns BBB (high) Rating to SNC-Lavalin’s New Debenture Issue

DBRS has today assigned a BBB (high) rating, with a Stable trend, to the $350 million 6.19% unsecured debentures issued by SNC-Lavalin Group Inc. (SNC or the Company). The debentures will rank pari passu with all other unsecured debt of the Company. Proceeds from the issuance are expected to be used for the repayment of SNC’s $105 million 7.70% unsecured debentures, which mature in September 2010; to fund potential infrastructure concession investments and acquisitions; and for general corporate purposes.

DBRS expects that the impact of the issuance on SNC’s credit profile will be relatively modest. Although core credit metrics will weaken from the increase in debt, leverage is likely to remain within the range previously targeted by the Company (recourse debt-to-equity of 30-to-70) and coverage ratios will continue to be well within the range of acceptability for the current rating. In addition, SNC’s net cash position is expected to remain favourable and near-term liquidity is not an issue. Please refer to the SNC report that was issued by DBRS on May 28, 2009, for additional details regarding the Company’s credit profile.

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

The applicable methodology is Rating Engineering and Construction Companies, which can be found on our website under Methodologies.

This is a Corporate rating.