DBRS Assigns Rating of BB, Stable Trend, to Parkland Fuel Corporation’s New Debt Issuance

DBRS Limited (DBRS) has today assigned a rating of BB with a Stable trend to Parkland Fuel Corporation’s (Parkland) issuance of $300 million 5.75% Senior Unsecured Notes (the Notes) due September 16, 2024, which was announced on Friday, August 26, 2016, and is expected to close on Friday, September 16, 2016.

The Notes will be direct senior unsecured obligations of Parkland and will rank pari passu with all of Parkland’s existing and future senior unsecured indebtedness and senior in right of payment to any future subordinated indebtedness. Consistent with Parkland’s existing Senior Unsecured Notes, the Notes will be unconditionally guaranteed by certain of Parkland’s restricted subsidiaries, which currently account for more than 99% of Parkland’s consolidated assets and revenues.

The net proceeds from the Notes are expected to be placed in escrow, and upon satisfaction of the Escrow Release Condition (defined as all other conditions of the acquisition satisfied other than payment of the purchase price and no event of default), the net proceeds will be used by Parkland to fund a portion of the costs in connection with the acquisition of a majority of the Canadian business and assets of CST Brands, Inc. from Alimentation Couche-Tard Inc. (Couche-Tard). If the agreement between Couche-Tard and Parkland is terminated or the Escrow Release Condition is not satisfied, Parkland will be required to redeem the Notes in whole at a redemption price equal to 100% of the aggregate principal amount.

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

The applicable methodologies are Rating Companies in the Merchandising Industry and DBRS Criteria: Recovery Ratings for Non-Investment Grade Corporate Issuers, which can be found on our website under Methodologies.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.