DBRS Morningstar Confirms the City of Calgary’s Commercial Paper Rating at R-1 (high), Stable, Following Program Limit Increase

DBRS Limited (DBRS Morningstar) confirmed the City of Calgary’s (Calgary or the City) Commercial Paper (CP) rating at R-1 (high) with a Stable trend following the authorized program limit increase to $300 million from $200 million. The City has no immediate liquidity needs and the program ensures that Calgary has sufficient liquidity to offset cash flow volatility arising from the timing of property tax collection and other operational needs.

DBRS Morningstar notes that the City’s CP program complies with the “DBRS Morningstar Criteria: Commercial Paper Liquidity Support for Nonbank Issuers.” DBRS Morningstar notes that Calgary has stable and predictable cash flows, ample liquidity in the form of cash, and highly rated government bonds comfortably covering anticipated same-day CP maturities and the total CP program. In addition, the City maintains a committed bank credit facility of $100 million and an uncommitted bank line of $60 million.

At December 31, 2019, Calgary had $4.5 billion in cash and investments on hand, including $829.7 million in unrestricted cash and investments. The City currently has $220 million outstanding under the CP program.

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 Canadian Municipal Governments (May 13, 2020) and DBRS Morningstar Criteria: Commercial Paper Liquidity Support for Nonbank Issuers (March 10, 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 related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at [email protected].

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’s 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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