DBRS Morningstar Assigns Rating of BBB (low), Stable Trend to AltaGas Ltd.’s $500 Million Medium-Term Notes

DBRS Limited (DBRS Morningstar) assigned a rating of BBB (low) with a Stable trend to AltaGas Ltd.’s (AltaGas or the Company) $500 million 2.157% Medium-Term Notes issuance due June 10, 2025 (the Notes). 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.

AltaGas intends to use the net proceeds from the Notes to pay down existing indebtedness including, without limitation, indebtedness under AltaGas’ credit facility, and for general corporate purposes.

AltaGas’ ratings reflect its diversified portfolio of regulated utilities and midstream business in the United States and Canada. The Company’s Utilities segment generates stable cash flows that are supported by natural gas distribution rates approved under cost-of-service models; however, structural subordination at AltaGas’ U.S. regulated utilities and earnings volatility and weaker counterparties in its Canadian Midstream segment weaken the Company’s credit profile.

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 methodologies are Rating Companies in the Regulated Electric, Natural Gas, and Water Utilities Industry (September 16, 2019); Rating Companies in the Pipeline and Diversified Energy Industry (November 26, 2019); DBRS Morningstar Criteria: Rating Corporate Holding Companies and Parent/Subsidiary Rating Relationships (November 25, 2019); and DBRS Morningstar Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers (November 1, 2019), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

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 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.

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

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577