DBRS Comments on Innergex Renewable Energy Inc. Acquisition in British Columbia

DBRS notes that Innergex Renewable Energy Inc. (Innergex or the Company; rated BBB (low) and Pfd-3 (low), both with Stable trends) has today announced a prospective acquisition of two small (total 40 megawatts) hydroelectric generation facilities in the province of British Columbia. The transaction has a total estimated cost of $70 million and is subject to regulatory approvals and other closing conditions. Accordingly, the financing plan has not yet been finalized. Innergex expects to finance the purchase with new equity capital, supplemented by limited use of cash on hand and draws on the Company’s existing bank credit facility.

Based on the information available to date, DBRS does not expect the transaction to have a negative rating impact if financed as currently envisioned. However, DBRS could review the effect of the proposed acquisition should there be significant changes to the final financing plan or other additional information.

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

The applicable methodology is Rating Companies in the Non-Regulated Electric Generation Industry (May 2011), which can be found on our website under Methodologies.