DBRS Comments on CPPIB Capital Inc.’s Commercial Paper Notes Limit Increase

DBRS Limited (DBRS) notes today that CPPIB Capital Inc. (CPPIB Capital or the Issuer) has increased the limit on its combined Canadian Short-Term Promissory Notes program (Canadian Notes) and U.S. Commercial Paper Notes program (U.S. Notes) issuance to an aggregate principal amount of CAD 15 billion, up from CAD 10 billion. DBRS notes that the limit increase does not adversely affect the Issuer’s short-term ratings of R-1 (high), with Stable trends. CPPIB Capital is the financing subsidiary of the Canada Pension Plan Investment Board (CPPIB or the Fund). The notes issued under the both programs are unconditionally and irrevocably guaranteed by CPPIB and rank pari passu with all other unsecured and unsubordinated obligations of the Issuer. DBRS expects that net proceeds of issuances will be used to loan funds to CPPIB and/or entities owned by CPPIB for general corporate purposes, in accordance with its internal investment policies.

The Fund continues to adhere to the DBRS Criteria: Commercial Paper Liquidity Support for Non-Bank Issuers, specifically Appendix A: Liquidity Requirements for CP Programs of Canadian Pension Funds. The Fund maintains a robust liquidity position, with highly liquid assets, as defined by DBRS, in excess of DBRS’s liquidity requirement for the rating. Additionally, the Fund maintains an overall internal limit on total recourse debt-to-adjusted net assets that is consistent with the rating.

For increased clarity, DBRS is now differentiating its ratings for the U.S. Commercial Paper Notes and the Canadian Short-Term Promissory Notes, which historically were grouped together under Short-Term Promissory Notes.

Notes:
The applicable methodology is Rating Canadian Public Pension Funds & Related Exclusive Asset Managers (May 2014). Applicable criteria are Commercial Paper Liquidity Support for Non-Bank Issuers (February 2014) and Guarantees and Other Forms of Explicit Support (February 2015), which can be found on our website under Methodologies.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.