DBRS Confirms George Weston at BBB, R-2 (high) and Pfd-3, Stable Trends, Following Loblaw’s Creation of Choice Properties REIT

DBRS has today confirmed the Issuer Rating and Notes & Debentures of George Weston Limited (GWL or the Company) at BBB, its Commercial Paper at R-2 (high) and its Preferred Shares at Pfd-3, all with Stable trends.

These rating actions follow Loblaw Companies Limited’s (Loblaw) and Choice Properties Real Estate Investment Trust’s (the REIT) announcement earlier today that the REIT has filed and obtained receipt for two preliminary prospectuses in respect of its initial public offering (IPO) of trust units and a concurrent public offering of two series of senior unsecured debentures and the announcement that GWL will purchase $200 million of units from the REIT at the IPO price.

The GWL confirmation is based on DBRS’s confirmation of Loblaw’s ratings at BBB (see separate press release; Loblaw is 63% owned by GWL), as well as GWL’s relatively stable operating performance and the Company’s significant cash resources. GWL’s ratings reflect its holding in Loblaw and the Company’s strong brands and efficient operations, balanced by a continuing volatile input cost environment and the mature nature of the bakery industry.

DBRS will continue to monitor GWL’s decisions on the deployment of its remaining cash, cash equivalents and short-term investments, and will assess any potential impact on the Company’s credit risk profile at such time.

GWL’s liquidity remains commensurate with the R-2 (high) rating category, reflecting the Company’s high levels of cash on hand and marketable investments, positive free cash flow generating capacity and its manageable debt levels and maturity schedule.

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

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The applicable methodology is Rating the Consumer Product Industry (April 2011), which can be found on our website under Methodologies.