DBRS Morningstar Assigns Rating of BB with 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) $600 million 4.375% Senior Unsecured Notes (the Notes) due March 2029, which closed on March 25, 2021. The Recovery Rating is RR4. 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 $300 million aggregate principal amount of 5.75% Senior Unsecured Notes due in 2024 and redeem $300 million of the outstanding $500 million aggregate principal amount of its 5.625% Senior Unsecured Notes due in 2025. The Notes are direct senior unsecured obligations of Parkland and 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 amended its syndicated senior secured credit facility agreement and increased the facility’s limit by an additional $200 million, resulting in the amount available under its syndicated credit facilities increasing to approximately $1.9 billion from approximately $1.7 billion previously. 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%.

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 methodologies are Rating Companies in the Merchandising Industry (July 30, 2020; https://www.dbrsmorningstar.com/research/364692) and DBRS Criteria: Recovery Ratings for Non-Investment Grade Corporate Issuers (August 24, 2020; https://www.dbrsmorningstar.com/research/366063), 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 (February 3, 2021; https://www.dbrsmorningstar.com/research/373262).

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.

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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