DBRS Comments on Denial of Keystone XL Permit

DBRS Limited (DBRS) notes that TransCanada Corporation (TCC or the Company) has announced today that it will review all of its options in light of a Presidential Permit (Permit) denial for the Keystone XL liquids pipeline project. Those options include filing a new application to receive a Permit for a cross-border crude oil pipeline from Canada to the United States.

The current ratings of TCC and its wholly owned subsidiaries -- TransCanada PipeLines Limited (TCPL) and Nova Gas Transmission Limited (NGTL) -- primarily reflect (1) expected improvement in TCC’s overall business risk profile over the medium term, (2) potential medium-term pressure on its credit metrics and (3) environmental, regulatory and political risks with respect to its natural gas and liquids pipelines segments (please refer to DBRS rating report dated June 5, 2015). While the details and timing of the Company’s next steps are unclear at this time, DBRS views today’s denial of the Permit as having no impact on the credit ratings of TCC, TCPL and NGTL.

Notes:
The applicable methodology is Rating Companies in the Pipeline and Diversified Energy Industry (January 2015), which can be found on our website under Methodologies.

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