DBRS Assigns A (high) Provisional Rating to Lower Mattagami Energy Limited Partnership Senior Secured Bonds

DBRS has today assigned a provisional rating of A (high) with a Stable trend to Series 2013-2 Senior Secured Bonds (the Bonds) issued by Lower Mattagami Energy Limited Partnership (LMELP or the Issuer; rated A (high) and R-1 (low)). This rating is based on the existing LMELP Issuer Rating of A (high), which was intended to apply to multiple secured bond issuances for a total amount of $1.9 billion. Please refer to the rating report dated February 11, 2013.

Construction has proceeded consistent with the approved budget and schedule. Total life-to-date expenditures are approximately $1.7 billion, with completion still scheduled for June 2015.

The financing plan to fund the $2.6 billion redevelopment and expansion of the Lower Mattagami River Project includes Senior Secured Bonds to be issued in various series throughout the construction period to repay interim funding amounts provided by a $600 million Commercial Paper program (rated R-1 (low)), backstopped by a total of $600 million in bank credit facilities.

The planned issuing amount for Series 2013-2 is $200 million. Net proceeds from the current Bonds offering will be used to repay commercial paper due and payable and construction cost payables. Including the expected Series 2013-2 amount, the total Senior Secured Bonds outstanding will be approximately $1,468 million.

The Bonds are being issued by way of private placement and pursuant to a master trust indenture and supplemental indenture. The Bonds will be direct, secured and unsubordinated obligations of the Issuer, ranking equally with all other bonds of the Issuer. The Bonds are obligations of LMELP and guaranteed by the affiliate Lower Mattagami Limited Partnership. Until the Recourse Release Date, which is after construction completion, the Bonds also have full recourse to the sponsor, Ontario Power Generation Inc. (OPG; rated A (low) and R-1 (low)).

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

The applicable methodology is Rating Project Finance (August 2013), which can be found on our website under Methodologies.