DBRS Morningstar Places TransEd Partners General Partnership Ratings Under Review with Negative Implications

DBRS Limited (DBRS Morningstar) placed TransEd Partners General Partnership’s (ProjectCo) Issuer Rating and the rating on the Series A $394.5 million Senior Long-Term Amortizing Bonds (the Series A Bonds), both currently rated BBB (low), Under Review with Negative Implications.

The rating action stems from DBRS Morningstar’s understanding that the Design-Build Contractors (comprising affiliates of EllisDon Inc., Bombardier Inc., and Bechtel Corp.) submitted a revised construction schedule, which shows a forecast service commencement date that is beyond the Finance Party Longstop Date of October 15, 2021, with very little buffer before the Project Agreement Longstop Date of December 15, 2021. DBRS Morningstar further notes that the City of Edmonton has been informed of ProjectCo’s revised construction schedule, which is currently under review. Pursuant to the terms of the Common Terms and Intercreditor Agreement (CTIA), ProjectCo is currently working on an initial remedial plan in consultation with the Lenders’ Technical Advisor (LTA). ProjectCo is required to submit the initial remedial plan to the LTA within 10 business days from the date of the notice to the trustee and administrative agent (February 16, 2021) and to demonstrate that it will achieve service commencement no later than the Finance Party Longstop Date.

DBRS Morningstar will provide an update as information becomes available in the coming weeks. Absence of satisfactory solution, DBRS Morningstar may take a further negative rating action.

ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology is Rating Public-Private Partnerships (August 19, 2020), which can be found on dbrsmorningstar.com under Methodologies & Criteria. Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262 (February 3, 2021).

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 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].