DBRS Assigns Provisional Rating to TransAlta Corporation’s Preferred Share Issue

DBRS Limited (DBRS) has today assigned a provisional rating of Pfd-3 with a Negative trend to TransAlta Corporation’s (TAC or the Company) new Cumulative Redeemable Minimum Rate Reset First Preferred Shares, Series 1.

TAC is currently contemplating exchanging the existing five series of preferred shares with a book value of $965 million for Series 1 preferred shares, structured to ensure dividend neutrality and with financial and other terms that are very similar to those attached to the existing preferred shares. As such, TAC’s Series 1 preferred shares have been assigned, on a provisional basis, the same rating that DBRS has assigned to TAC’s existing preferred shares. Each series of TAC’s preferred shares, including the new Series 1, rank on parity with each other series of preferred shares of TAC and senior to all other shares of TAC with respect to priority on the payment of dividends, return of capital and the distribution of assets on the dissolution, liquidation or winding-up of TAC.

The preferred share exchange transaction is not expected to result in a material financial ratio impact to warrant a rating action.

The assignment of a finalized rating is subject to receipt by DBRS of final documentation that is consistent with that which DBRS has already reviewed.

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

The applicable methodologies are Rating Companies in the Independent Power Producer Industry and DBRS Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers, which can be found on our website under Methodologies.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.

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