DBRS Morningstar Assigns Provisional Rating of A (high), Stable, to Brock University’s Series B Senior Unsecured Debentures

DBRS Limited (DBRS Morningstar) assigned a provisional rating of A (high) with a Stable trend to Brock University’s (the University) proposed Series B Senior Unsecured Debentures (Series B Debentures) maturing on May 17, 2060. The rating being assigned is based upon the rating on already-outstanding series of the above-mentioned debt instrument.

The $125 million Series B Debentures will be direct senior unsecured obligations of the University and will rank equally with its other unsecured obligations. The University will use the proceeds of the issuance to fund capital projects and debt retirement.

Since DBRS Morningstar’s February 4, 2020, review, debt has increased and the medium-term enrolment forecast has weakened. Furthermore, the Coronavirus Disease (COVID-19) raises uncertainty about enrolment expectations for Fall 2020, especially regarding international enrolment. DBRS Morningstar believes the University has flexibility to withstand temporary weakness in enrolment and operating results for the upcoming year. However, a negative rating action could arise from an increase in debt beyond current expectations or a sustained deterioration in other financial metrics.

ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792.

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

The principal methodology is Rating Public Universities (May 8, 2019), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

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.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].

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