DBRS Assigns Rating of BBB (high), Stable, to Canadian Tire Corporation’s New Debt Issuance

DBRS Limited (DBRS) assigned a rating of BBB (high) with a Stable trend to Canadian Tire Corporation, Limited’s (CTC or the Company) new multi-tranche debt issuance totalling $650 million, which closed on July 3, 2018.

The issuance is made up of the following tranches (collectively, the Notes):

(1) $250 million, 2.646% Series E Medium-Term Notes, due July 6, 2020; and
(2) $400 million, 3.167% Series F Medium-Term Notes, due July 6, 2023.

The Notes will be unsecured obligations of CTC and will rank equally and pari passu with each other and with all other existing and future unsecured and unsubordinated indebtedness of CTC. The Company intends to use the net proceeds to finance a portion of the purchase price for the acquisition of the company that owns and operates the Helly Hansen brands and related businesses, to repay indebtedness and/or for general corporate purposes.

CTC’s ratings continue to be supported by CTC’s strong brands and market positions, geographic diversification, real estate ownership and control (through CT Real Estate Investment Trust) and reasonable stability through economic cycles. The Company’s ratings also reflect intense competition and risks related to CTC’s ambitions for growth and/or increasing shareholder returns as well as the Company’s more cyclical financial services business.

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

The principal methodologies are Rating Companies in the Merchandising Industry and Global Methodology for Rating Finance Companies, which can be found on dbrs.com under Methodologies.

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

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