DBRS Comments on Potential Sale of AltaLink Investments, L.P. and AltaLink, L.P.

DBRS notes that SNC-Lavalin Group (SNC; rated BBB (high)) has today announced its intention to sell an equity stake in AltaLink, including AltaLink Investments, L.P. (rated BBB) and AltaLink, L.P. (rated “A”) (referred to in aggregate as AltaLink). This announcement is part of SNC’s strategic plan to monetize its infrastructure investments. SNC will explore all options for the sale, including private sale, strategic partnerships or through an initial public offering.

DBRS predominantly views AltaLink on a standalone basis, with its ratings largely independent from that of its owner, SNC. As a result, a change in ownership alone is not expected to have a material impact on AltaLink’s ratings. This expectation assumes that the new part-owner is an investment-grade entity with a strong ability to inject the equity necessary to maintain AltaLink, L.P.’s deemed capital structure. Should new ownership be non-investment-grade, there could be negative implications on AltaLink’s ratings, as concerns could arise relating to the weaker part-owner’s ability to provide the necessary equity injections.

Notes:
The applicable methodology is Rating Companies in the North American Energy Utilities (Electric and Natural Gas) Industry (May 2011), which can be found on our website under Methodologies.