Morningstar DBRS Upgrades Credit Ratings on Multiple Public Finance Issuers Following Province of Ontario’s Rating Upgrade

DBRS Limited (Morningstar DBRS) upgraded its credit ratings on multiple Ontario public hospitals, the MaRS Development Trust, and debt issued by the Ontario School Boards Financing Corporation to AA from AA (low). The upgrades reflect Morningstar DBRS' recent credit rating upgrade (dated June 6, 2024) on the Long-Term Debt ratings of the Province of Ontario. In addition, Morningstar DBRS changed the trends on all ratings to Stable from Positive.

This upgrade affects the following issuers:
-- Hamilton Health Sciences Corporation (HHSC)
-- Lakeridge Health (LH)
-- The Ottawa Hospital (TOH)
-- Scarborough Health Network (SHN)
-- University Health Network (UHN)
-- Windsor Regional Hospital (WRH)
-- The MaRS Development Trust
-- Ontario School Boards Financing Corporation (OSBFC)

Morningstar DBRS has not changed the credit ratings of any Ontario public universities at this time. The funding government's rating is an important critical rating factor for public universities and, hence, Ontario's credit rating upgrade is credit positive for Ontario universities; however, any credit rating actions are likely to be linked to changes in multiple critical rating and financial risk assessment factors rather than just the funding government's rating alone. Morningstar DBRS will update individual university ratings through ongoing annual reviews, or as needed.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS   
There were no Environmental/Social/Governance 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: https://dbrs.morningstar.com/research/427030/morningstar-dbrs-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings

Notes:
Morningstar DBRS applied the following principal methodology to the credit ratings of HHSC, LH, TOH, SHN, UHN, and WRH: Rating Canadian Public Hospitals (https://dbrs.morningstar.com/research/429932; March 21, 2024).

Morningstar DBRS applied the following criteria to the credit rating of the MaRS Development Trust: Morningstar DBRS Global Corporate Criteria (https://dbrs.morningstar.com/research/431186; April 15, 2024).

Morningstar DBRS applied the following principal methodology to the debt ratings of OSBFC: Global Methodology for Rating Government Related Entities (https://dbrs.morningstar.com/research/431178; April 15, 2024)

A description of how Morningstar DBRS analyzes corporate finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/431153/interplay-of-global-corporate-finance-rating-methodologies-when-analyzing-corporate-finance-transactions.

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

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 info-DBRS@morningstar.com.

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.

These are solicited credit ratings.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS trends and credit ratings are under regular surveillance.

Information regarding Morningstar DBRS credit ratings, including definitions, policies, and methodologies, is available on dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.

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