DBRS Assigns Provisional BB (high) Rating to New Debt Issue of Sherritt International Corporation

DBRS has today assigned a provisional rating of BB (high) with a Stable trend to the $400 million senior unsecured notes (the New Senior Unsecured Notes) to be issued by Sherritt International Corporation (Sherritt or the Company). Sherritt indicates that it will use the proceeds from the notes issue to fund the redemption of all of the $225 million outstanding principal amount of the Company’s 8.25% Senior Unsecured Debentures Series B due October 24, 2014, and for general corporate purposes. DBRS views Sherritt’s new debt issuance as a prudent funding initiative to resolve in a timely manner the Company’s need to fund the maturity of the 8.25% notes, in light of ongoing uncertainty in commodity and financial markets and, potentially, to help supplement its existing financial resources as it seeks to ramp up its 40%-owned Ambatovy project in Madagascar and to complete its other growth projects.

The New Senior Unsecured Notes are being offered by way of a supplementary prospectus to the Company’s short form base shelf prospectus dated August 24, 2012. They will rank equally with Sherritt’s other senior, unsecured indebtedness.

The provisional rating is based on DBRS’s review of a draft preliminary prospectus supplement to its short form base shelf prospectus received September 17, 2012, as well as Sherritt’s public security document filings, including its Q2 2012 report, 2011 Annual Information Form and 2011 annual report, and other information provided by Sherritt to DBRS as of September 18, 2012.

The assignment of final ratings is subject to receipt by DBRS of final documentation that is consistent with that which DBRS has already reviewed.

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.