DBRS Morningstar Assigns Rating of BB with a Stable Trend to Parkland Corporation’s New Debt Issuance

DBRS Limited (DBRS Morningstar) assigned a rating of BB with a Stable trend to Parkland Corporation’s (Parkland or the Company; rated BB with a Stable trend by DBRS Morningstar) $400 million 6.00% Senior Unsecured Notes (the Notes) due in 2028, which closed on June 23, 2020. The rating being assigned is based upon the rating of an already-outstanding series of the above-mentioned debt instrument.

The net proceeds from the Notes are intended to be used to redeem all of the outstanding $200 million aggregate principal amount of 5.50% senior notes with a final maturity date of May 28, 2021, and redeem, in whole or in part, a portion of the $200 million aggregate principal amount of 6.00% senior notes with a final maturity date of November 21, 2022. The Notes are direct senior unsecured obligations of Parkland, rank pari passu with all of the Company’s existing and future senior unsecured indebtedness, and are senior in right of payment to any future subordinated indebtedness. The Notes are effectively subordinated to all secured indebtedness, which includes Parkland’s credit facilities.

Parkland has also decided to exercise the accordion option of its Canadian credit facility and increased the facility’s limit by an additional $300 million, resulting in a Canadian facility limit of $700 million from $400 million previously. The existing U.S. credit facility limit will remain unchanged at USD 780 million. DBRS Morningstar notes that the increased credit facility, which ranks ahead of Parkland’s Senior Unsecured Notes, does not change DBRS Morningstar’s Recovery Rating on the notes of RR4, which corresponds to an anticipated recovery of 30% to 60%.

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 Merchandising Industry (August 15, 2019) and DBRS Criteria: Recovery Ratings for Non-Investment Grade Corporate Issuers (August 22, 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.

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

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