Morningstar DBRS Confirms Credit Rating of AAA on PSP Capital Inc.’s 4.150% Senior Notes Due 2033 Following Reopening

DBRS Limited (Morningstar DBRS) confirmed the credit rating of AAA with a Stable trend on the 4.150% Senior Notes due 2033 (the Notes) issued by PSP Capital Inc. (PSP Capital), following the reopening of the Notes. PSP Capital reopened the Notes by issuing an additional $750 million with the same coupon rate (4.150%) and maturity date (June 1, 2033) as the initial issuance. The total amount of Notes outstanding after the reopening is $2.5 billion. The credit rating confirmation is based upon the existing credit rating assigned to PSP Capital’s Medium-Term Notes. PSP Capital is a wholly owned subsidiary and the principal financing vehicle of the Public Sector Pension Investment Board (PSP Investments; rated AAA with a Stable trend by Morningstar DBRS). The Notes are unconditionally and irrevocably guaranteed by PSP Investments and rank pari passu with all other present and future unsecured and unsubordinated obligations of PSP Capital.

Morningstar DBRS’ credit rating on the above-mentioned security addresses the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents.

Morningstar DBRS’ credit rating does not address nonpayment risk associated with contractual payment obligations
contemplated in the applicable transaction documents that are not financial obligations.

Morningstar DBRS’ long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued.

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

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at dbrs.morningstar.com/research/427030 (January 23, 2024).

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

The principal methodology applicable to the credit rating is North American Structured Finance Flow-Through Ratings (November 13, 2023); https://dbrs.morningstar.com/research/423240.

Other methodologies referenced in this transaction are listed at the end of this press release.

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.

Morningstar DBRS 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.

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

-- Rating Canadian Public Pension Funds & Related Exclusive Asset Managers (April 27, 2023); https://dbrs.morningstar.com/research/413011

A description of how Morningstar DBRS analyzes structured finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/410863.

For more information on this credit or on this industry, visit dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.