DBRS Morningstar Assigns Rating of “A” With a Stable Trend to Caterpillar Financial Services Limited’s New Issuance of $300 Million Medium Term Notes

DBRS Limited (DBRS Morningstar) assigned a rating of “A” with a Stable trend to Caterpillar Financial Services Limited’s (CFSL or the Issuer; guaranteed by Caterpillar Financial Services Corporation, rated “A” with a Stable trend by DBRS Morningstar) $300 million Medium-Term Notes (the Notes) due September 25, 2026.

CFSL intends to use the net proceeds from the Notes for general corporate purposes. The Notes will rank equally with all of CFSL’s existing and future unsubordinated and unsecured indebtedness. The Notes will constitute unsubordinated and unsecured obligations of the Issuer. Caterpillar Financial Services Corporation (Cat Financial) has unconditionally and irrevocably guaranteed the due payment of all sums to be payable under the Notes issued by the Issuer pursuant to the terms of the amended and restated guarantee dated March 31, 2023 (the Guarantee). The Guarantee constitutes an unsubordinated and unsecured obligation of Cat Financial and shall at all times rank pari passu with all its existing and future unsubordinated and unsecured obligations.

Cat Financial is a captive finance subsidiary of Caterpillar Inc. (Caterpillar or the Company). Caterpillar’s ratings continue to be underpinned by its robust business profile as the leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. The Company's strong technological capabilities, superior product quality, and world-class manufacturing operations also lend support to its leading market position and strong brand recognition. Additionally, Caterpillar’s captive finance subsidiary and large global network of independent dealers provide intensive geographic coverage and strong customer relationships. New services growth opportunities and long-term energy transition trends also reflect positively on the business risk profile. These factors are balanced by the Company's inherent exposure to deeply cyclical industries and volatile input prices.

The credit rating being assigned is based upon the credit rating of an already-outstanding series of the above-mentioned debt instrument.

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/416784 (July 4, 2023).

Notes:
All figures are in U.S. dollars unless otherwise noted.

DBRS Morningstar applied the following principal methodology:
-- Global Methodology for Rating Companies in the Industrial Products Industry (14 February, 2023); https://www.dbrsmorningstar.com/research/409775

The following methodologies have also been applied:
-- DBRS Morningstar Global Criteria: Commercial Paper Liquidity Support for Nonbank Issuers (February 24, 2023);
https://www.dbrsmorningstar.com/research/410196
-- DBRS Morningstar Global Criteria: Guarantees and Other Forms of Support (March 28, 2023); https://www.dbrsmorningstar.com/research/411694

The credit rating methodologies used in the analysis of this transaction can be found at: https://www.dbrsmorningstar.com/about/methodologies.

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.

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 credit ratings are under regular surveillance.

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

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