DBRS Morningstar Assigns Credit Rating of A (high) With a Stable Trend to Hydro One Inc.’s $400 Million Medium-Term Notes Issue

DBRS Limited (DBRS Morningstar) assigned a credit rating of A (high) with a Stable trend to Hydro One Inc.’s (HOI or the Company) $400 million 4.85% Unsecured Medium-Term Notes (Series 58) offering due 2054 (the Notes). The credit rating assigned to the Notes is based on the credit ratings of other already-outstanding series of Senior Unsecured Debentures.

The Notes will be direct, unsecured obligations of HOI, ranking pari passu with all other unsecured and unsubordinated indebtedness of the Company. HOI intends to allocate net proceeds from the issuance to finance and/or refinance, in whole or in part, new and/or existing Eligible Projects (as defined pursuant to the Company’s Sustainable Financing Framework) that are Green Projects (as described in the Company's Sustainable Financing Framework). Prior to such allocation, net proceeds may be initially used, in part or in full, for repayment of indebtedness or investments in bank deposits or other cash equivalents.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
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 https://www.dbrsmorningstar.com/research/416784/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings (July 4, 2023).

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

DBRS Morningstar applied the following principal methodology:
-- Global Methodology for Rating Companies in the Regulated Electric, Natural Gas, and Water Utilities Industry (September 27, 2023; https://www.dbrsmorningstar.com/research/421106/global-methodology-for-rating-companies-in-the-regulated-electric-natural-gas-and-water-utilities-industry).

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 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 credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

DBRS Morningstar had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

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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