DBRS Comments on Enterprise Holdings, Inc. Consent Solicitation Unaffected at A (low), Trend Stable

DBRS, Inc. (DBRS) has today commented that the A (low) Issuer Rating of Enterprise Holdings, Inc. (Enterprise or the Company), and the A (low) Senior Notes and R-1 (low) Commercial Paper ratings of its Canadian finance subsidiary, ERAC Canada Finance Ltd., are unaffected by the Company’s announcement that it has commenced a consent solicitation with respect to USD 4.13 billion and CAD 250 million of outstanding debt securities (the Securities). The trend on the ratings is Stable.

Under the consent solicitation, Enterprise is seeking to make certain changes to the covenants and events of default applicable to all series of the Securities issued by the Company’s U.S. and Canadian finance subsidiaries and to conform certain covenants in certain indentures of its U.S. financing subsidiary to those of other U.S. indentures. Further, Enterprise is seeking to add to the Securities a provision for an interest rate adjustment in the event of a rating downgrade of a series of Securities and a provision for a put upon the occurrence of a change of control of Enterprise Holdings. In consideration for bondholder consent Enterprise is offering to pay a consent fee in the form of cash.

Given the Company’s prudent management of the balance sheet, ability to generate solid levels of organic capital, as well as the protective features afforded to bondholders should they consent, including the coupon step-up, DBRS views this action as having no impact on the ratings.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal applicable methodology is Rating Finance Companies Operating in the United States, which can be found on the DBRS website under Methodologies.

The sources of information used for this rating include company documents. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

Lead Analyst: David Laterza
Approver: Roger Lister
Initial Rating Date: May 16, 2001
Most Recent Rating Update: April 9, 2012

For additional information on this rating, please refer to the linking document under Related Research.