DBRS Morningstar Finalizes Provisional Ratings on ARC Resources Ltd.

DBRS Limited (DBRS Morningstar) finalized the provisional Issuer Rating and Senior Unsecured Notes (Senior Notes) rating of BBB on ARC Resources Ltd. (the Company). All trends are Stable. The finalized ratings follow the close of the strategic combination (the Combination) with Seven Generations Energy Ltd. (7G). The terms of the Combination and the issuance of the Senior Notes was consistent with those contemplated by DBRS Morningstar when it assigned provisional ratings on March 1, 2021.

The aggregate gross proceeds from the Senior Notes totalled $1.0 billion. Proceeds from the Senior Notes issuance along with draws on its $2.0 billion senior unsecured revolving credit facility (Credit Facility) were used to repay and/or defease all of 7G’s outstanding senior debt. As of April 6, 2021, the Company had net debt of approximately $2.4 billion and $1.2 billion of available capacity under the Credit Facility.

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 Oil and Gas and Oilfield Services Industries (August 17, 2020; https://www.dbrsmorningstar.com/research/365808), DBRS Morningstar Criteria: Rating Corporate Holding Companies and Parent/Subsidiary Rating Relationships (November 2, 2020; https://www.dbrsmorningstar.com/research/369167), and DBRS Morningstar Criteria: Guarantees and Other Forms of Support (January 14, 2021; https://www.dbrsmorningstar.com/research/372344). 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.

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].

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