DBRS Morningstar Assigns “A” Ratings to 407 International Inc.’s New Issues

DBRS Limited (DBRS Morningstar) assigned the rating of “A” to the $350 million Series 20-A2 Senior Secured Medium-Term Notes (the Series 20-A2 Notes) and to the $400 million Series 20-A3 Senior Secured Medium-Term Notes (the Series 20-A3 Notes, and, together with the Series 20-A2 Notes, the Notes) of 407 International Inc. (407 or the Company). Both trends are Stable. The Notes have been issued from 407’s Shelf Prospectus dated May 13, 2020. The ratings being assigned are based upon the rating on already-outstanding series of the above-mentioned debt instrument.

There have not been any material changes to the underlining assumptions of the DBRS Morningstar Base Case referred to in the DBRS Morningstar commentary, “DBRS Morningstar Comments on 407 International Inc.,” published on April 30, 2020. The intended use of proceeds from the issuance of the Notes is (1) to repay the principal amount and accrued interest on the Company’s outstanding Series 10-A3 and Series 99-A5 Senior Bonds, on maturity or redemption, and (2) to fund the Series Reserve Account in the Debt Service Reserve Fund (as both terms are defined in the Indenture) in respect of the Notes.

The Series 20-A2 Notes and the Series 20-A3 Notes mature on May 22, 2025, and May 25, 2032, respectively, with semi-annual interest payments due in May and November of each year. The Notes rank pari passu with all other senior obligations of 407. Correspondingly, the “A” rating and Stable trend are consistent with the rating and trend currently assigned to the Company’s senior debt.

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-Private Partnerships (August 23, 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.

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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