Press Release

DBRS Morningstar Assigns Provisional Ratings of BBB (low) and BB, Respectively, to Gibson Energy Inc.’s Medium-Term Notes and Fixed-to-Fixed Rate Subordinated Notes

June 21, 2023

DBRS Limited (DBRS Morningstar) assigned a provisional rating of BBB (low) with a Stable trend to Gibson Energy Inc.’s (Gibson or the Company) $900 million Medium-Term Notes (the Notes) offering, comprising $350 million 5.80% Notes due 2026, $350 million 5.75% Notes due 2033 and $200 million 6.20% Notes 2053.

DBRS Morningstar has also assigned a provisional rating of BB with a Stable trend to Gibson’s $200 million 8.70% Fixed-to-Fixed Rate Subordinated Notes (the Hybrids) due 2083.

The rating assigned are based upon the rating on an already-outstanding series of the above-mentioned debt instruments.

DBRS Morningstar also assigned an equity weight of 50% to the Hybrids. The equity weight is based on the currently applicable “DBRS Morningstar Global Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers” released on October 20, 2022.

Gibson intends to use the net proceeds from the offerings to pay a portion of the purchase price for the acquisition of South Texas Gateway Terminal, LLC (the “Acquisition”) and to pay fees and expenses associated with the Acquisition. Under the terms of the offering, Gibson is required to redeem the Notes and the Hybrids if the Acquisition is not completed by December 14, 2023.

There were no Environmental/Social/Governance factors 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 (May 17, 2022).

All figures are in Canadian dollars unless otherwise noted.

DBRS Morningstar applied the following principal methodology:
-- Global Methodology for Rating Companies in the Pipeline and Midstream Energy Industry (November 3, 2022;

The following methodologies have also been applied:
-- DBRS Morningstar Global Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers (October 20, 2022;

-- DBRS Morningstar Global Criteria: Guarantees and Other Forms of Support (March 28, 2023;

The credit rating methodologies used in the analysis of this transaction can be found at:

A description of how DBRS Morningstar analyzes corporate finance transactions and how the methodologies are collectively applied can be found at:

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.

Information regarding DBRS Morningstar ratings, including definitions, policies, and methodologies, is available on or contact us at [email protected].

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