DBRS Assigns “A” Ratings with Stable Trends to EEN CA Rivière du Moulin L.P.

DBRS Limited (DBRS) assigned an Issuer Rating of “A” to EEN CA Rivière du Moulin L.P. (the Issuer or the Initial Borrower) and a debt rating of “A” to the $320 million Senior Loan due November 24, 2034 (the Senior Loan), made to the Initial Borrower and several other Co-Borrowers. Both trends are Stable. The Senior Loan was made by several major Canadian financial institutions.

The Senior Loan was used to finance the development and operations of the 350-megawatt (MW) Rivière du Moulin wind power generating facility (the Project), located approximately 130 kilometers north of Québec City. The Project sells all the electricity generated to the offtaker, Hydro-Québec (rated A (high) with a Stable trend by DBRS), under a 20-year power purchase agreement (PPA) that expires in November 2034, at which time the Senior Loan will be fully amortized. The assigned ratings are anchored by (1) the strength of the long-term, inflation-adjusted, fixed-price PPA with a highly rated offtaker; (2) the proven wind turbine technology and appropriate operations and maintenance (O&M) arrangements with experienced operator and wind turbine O&M provider; (3) the exceptionally strong minimum senior debt-service coverage ratio of 2.86 times at P90 production levels (DBRS base case) for the term of the Senior Loan; (4) the reliable early operating and financial results matching or exceeding the DBRS base case projections; and (5) the credit strength and technical expertise of the Project’s major co-owners. The main challenges include (1) long-term O&M risk as the facility operates in relatively complicated terrain and (2) energy production volatility caused by extreme weather events. The ratings are also constrained to a degree by (1) some sub-standard structural features embedded in the loan covenant package and (2) the offtaker’s rating, currently at the A (high) level.

PXX means exceedance probabilities. A P50-P90-P99 value describes estimated minimum electricity generation with a probability of 50%, 90% or 99% in any given year (P50, 1-year P90 and 1-year P99). Unless otherwise specified, all PXX values in this press release are in reference to one-year PXX values.

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

The principal methodology is Rating Wind Power Projects, which can be found on dbrs.com under Methodologies.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info@dbrs.com.

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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