DBRS Morningstar Assigns Provisional Rating of “A,” Stable, to University of Windsor’s Series C Senior Unsecured Debentures

DBRS Limited (DBRS Morningstar) assigned a provisional rating of “A” with a Stable trend to the University of Windsor’s (the University) proposed Series C Senior Unsecured Debentures (Series C Debentures) with a term of approximately 40.3 years. The rating being assigned is based upon the rating on already-outstanding series of the above-mentioned debt instrument.

The Series C Debentures (up to $60 million) 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 previously approved capital projects, replenish working capital and general corporate purposes.

This marks an increase in debt since DBRS Morningstar’s March 20, 2020 review and coincides with a deterioration in the medium-term enrolment forecast. The Coronavirus Disease (COVID-19) pandemic raises uncertainty about enrolment expectations for Fall term 2020, especially about international enrolment. DBRS Morningstar believes the University has the flexibility to withstand both the temporary weakness in enrolment and operating results for the upcoming year as well as the planned increase in debt. However, a negative rating action could arise from a sustained deterioration in financial risk metrics beyond current expectations.

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 15, 2020), 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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