DBRS Assigns Ratings of A (low) with Stable Trends to Ontario Power Generation Inc.’s $500 Million Series 4 and $300 Million Series 5 Medium-Term Notes

DBRS Limited (DBRS) assigned ratings of A (low) with Stable trends to Ontario Power Generation Inc.’s (OPG or the Company) $500 million 2.977% Series 4 Medium-Term Notes maturing September 13, 2029; and $300 million 3.651% Series 5 Medium-Term Notes maturing September 13, 2050 (together, the Series 4 and 5 Notes). The ratings assigned are based upon the rating on already-outstanding series of the above-mentioned debt instruments.

The Series 4 and 5 Notes are direct unsecured obligations of OPG and rank equally and pari passu with all other medium-term notes issued and outstanding from time to time under the Trust Indenture and with all other present and future unsubordinated and unsecured indebtedness of the Company. Proceeds from the Series 4 and 5 Notes will be used for repayment of existing indebtedness, financing OPG’s acquisition and capex program, working capital requirements and general corporate purposes.

As noted in the DBRS press releases, “DBRS Comments on Ontario Power Generation’s Acquisition of Cube Hydro,” dated June 25, 2019, and “DBRS Comments on Ontario Power Generation’s Acquisition of Natural Gas Assets from TC Energy and ATCO,” dated July 30, 2019, OPG had planned to fully debt-fund acquisitions totalling approximately $4.1 billion. Pro forma the total acquisition debt, the Company’s debt-to-capital and cash flow-to-debt ratios (excluding non-recourse debt) are expected to remain strong for the current rating at 34% and over 30%, respectively. As such, the Series 4 and 5 Notes will not materially affect OPG’s credit profile.

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

The principal methodologies are Rating Companies in the Regulated Electric, Natural Gas and Water Utilities Industry (September 2018) and DBRS Criteria: Guarantees and Other Forms of Support (January 2019), which can be found on dbrs.com under Methodologies & Criteria.

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

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