DBRS Morningstar Assigns BB (high), Stable, to Inter Pipeline Ltd.’s Fixed-to-Floating Rate Subordinated Notes Series 2019-B Due November 19, 2079

DBRS Limited (DBRS Morningstar) assigned a rating of BB (high) with a Stable trend to Inter Pipeline Ltd.’s (IPL or the Company; rated BBB with a Stable trend by DBRS Morningstar) $700 million 6.625% Fixed-to-Floating Rate Subordinated Notes Series 2019-B due November 19, 2079 (the Hybrid Notes). The rating is based on the rating of an already-outstanding series of the above-mentioned debt instrument. DBRS Morningstar also assigned an equity weight of 50% to the Hybrid Notes based on the current “DBRS Morningstar Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers” released in November 2019.

DBRS Morningstar notes that the Hybrid Notes are direct unsecured subordinated obligations of IPL and subordinated in right of payment to the prior payment in full of all present and future senior indebtedness. The Hybrid Notes will be effectively subordinated to all indebtedness and obligations of the Company’s subsidiaries. IPL proposes to use the net proceeds from the sale of the Hybrid Notes to fund capital projects, repay indebtedness under its revolving credit facility and for other general corporate purposes.

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

The principal methodologies are Rating Companies in the Pipeline and Diversified Energy Industry, Rating Companies in the Oil and Gas and Oilfield Services Industries and DBRS Morningstar Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers, 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 Morningstar 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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