DBRS Morningstar Assigns Rating of BBB With a Stable Trend to Saputo Inc.’s New Debt Issuance

DBRS Limited (DBRS Morningstar) assigned a rating of BBB with a Stable trend to Saputo Inc.’s (Saputo or the Company; rated BBB with a Stable trend by DBRS Morningstar) $300 million, 5.250% Series 10 Medium Term Notes (the Notes) due November 29, 2029, which closed November 29, 2022.

The rating assigned to this newly issued debt instrument is based on the ratings of an already-outstanding debt series of the above-mentioned debt instrument.

Saputo will use the proceeds to repay a portion of the revolving bank credit facility, which was used to repay the $300 million of Series 4 Notes that matured on June 13, 2022, and for general corporate purposes. The Notes will be unsecured and will rank pari passu with each other, the Notes of every other series, and with all other existing and future unsecured and unsubordinated indebtedness of the Company.

Saputo’s ratings continue to be supported by its leading market position, diversification of operations by distribution channel and geography, and strong free cash flow generation. The ratings also continue to reflect the Company’s exposure to volatile commodity prices, the highly competitive industry, and risks associated with the mature geographies in which Saputo operates.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.

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/396929/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings (May 17, 2022).

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

The principal methodologies are Global Methodology for Rating Companies in the Consumer Products Industry (https://www.dbrsmorningstar.com/research/402329/global-methodology-for-rating-companies-in-the-consumer-products-industry, September 2, 2022) and DBRS Morningstar Criteria: Guarantees and Other Forms of Support (https://www.dbrsmorningstar.com/research/394683/dbrs-morningstar-criteria-guarantees-and-other-forms-of-support, April 4, 2022), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

A description of how DBRS Morningstar analyzes corporate finance transactions and how the methodologies are collectively applied can be found at: https://www.dbrsmorningstar.com/research/397223/interplay-of-global-corporate-finance-rating-methodologies-when-analyzing-corporate-finance-transactions

The conditions that lead to the assignment of a Negative or Positive trend are generally 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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