DBRS Finalizes BB (high) Rating on Noranda Operating Trust’s Senior Secured Notes

DBRS has today finalized its rating of BB (high) with a Stable trend for the $90 million of 6.875% senior secured notes (Senior Secured Notes) due December 28, 2016, issued by Noranda Operating Trust (the Trust) by way of a private placement that closed today. The Senior Secured Notes issuance has been made by way of a confidential offering memorandum dated July 22, 2011, that is consistent with the Trust’s draft offering memorandum dated July 22, 2011; the public disclosure documents of Noranda Income Fund; and other materials that DBRS had examined prior to assigning the provisional rating to the Senior Secured Notes (see the July 25, 2011, press release “DBRS Assigns Provisional BB (high) Rating to Noranda Operating Trust’s Senior Secured Notes”). The Trust has also announced that concurrent with the offering of the Senior Secured Notes, it has entered into a five-year secured asset-based revolving credit facility, which will provide up to a maximum $150 million in borrowing capacity.

DBRS expects that the Trust will use the net proceeds from the sale of the Senior Secured Notes, together with borrowings under the asset-based revolving credit facility, to repay all amounts outstanding under its existing bridge facility and for general corporate purposes. DBRS considers that the issuance of the Senior Secured Notes and the signing of the asset-based revolving credit facility will provide the Trust adequate funding capacity to meets its normal-course needs until their respective maturity dates in 2016.

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

The applicable methodology is Rating Companies in the Mining Industry, which can be found on our website under Methodologies.