DBRS Assigns Rating of BBB (low), Stable to Gibson Energy Inc.’s $500 Million Medium-Term Notes

DBRS Limited (DBRS) assigned a rating of BBB (low) with a Stable trend to Gibson Energy Inc.’s (Gibson or the Company) $500 million Medium-Term Notes offering. The Company intends to use the proceeds from the offering to fully redeem and repay the Company’s $300 million aggregate principal amount of 5.375% Senior Unsecured Notes due July 15, 2022; to repay indebtedness under the Company’s credit facilities; and to fund general corporate purposes. The rating assigned to this newly issued debt instrument is based on the rating of an already outstanding debt series of the above-mentioned debt instrument.

Gibson’s ratings are underpinned by high-quality contracted cash flows from the Company’s (1) infrastructure assets, primarily comprising crude oil-storage terminals; (2) strong competitive position; and (3) improved business and financial risk profile following the disposal of its non-contracted assets in 2017–2018. Gibson’s ratings are constrained by variable earnings from its wholesale segment, lack of geographic diversification and a high dividend payout ratio.

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

The principal methodologies are Rating Companies in the Pipeline and Diversified Energy Industry and DBRS Criteria: Guarantees and Other Forms of Support, which can be found on dbrs.com under Methodologies & Criteria.

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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