DBRS Comments on SNC-Lavalin Group Inc.'s PPP Projects

DBRS Limited (DBRS) rates four public-private partnership projects for which SNC-Lavalin Group Inc. (SNC or the Company) is a service provider or service provider guarantor — namely, 407 East Development Group, Rainbow Hospital Partnership, SNC-Lavalin Innisfree McGill Finance Inc. and InPower BC General Partnership (collectively, the SNC Projects). DBRS notes that all of the SNC Projects are in the service phase.

Earlier today, DBRS placed SNC’s Issuer Rating and Senior Debentures rating of BBB Under Review with Negative Implications (the SNC Rating Action). As noted in its methodology “Rating Public-Private Partnerships,” DBRS considers risk transfer to be effective when it is to a party of adequate size, significant relevant experience and investment-grade creditworthiness. As such, notwithstanding the SNC Rating Action, DBRS notes that this rating action, in and of itself, has caused no changes to the current ratings, trends or review status of any of the SNC Projects. In addition, DBRS is of the view that a single-notch downgrade of the Company, should one occur, would not be expected to affect the ratings of the SNC Projects. However, if at that time, DBRS believed that a subsequent negative rating action concerning SNC was likely, this could potentially depress the ratings of some or all of the SNC Projects.

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