Morningstar DBRS Assigns R-1 (high) Credit Rating to the Province of Ontario's U.S. Commercial Paper Program

DBRS Limited (Morningstar DBRS) assigned a R-1 (high) credit rating to the Province of Ontario's (Ontario or the Province) U.S. Commercial Paper (USCP) Program. The credit rating on the USCP program is the same as the Short-Term Debt credit rating of the Province.

The securities issued under this program constitute direct, unsecured obligations and rank pari passu with the Province's other unsecured indebtedness payable out of the Consolidated Revenue Fund of Ontario. The maximum amount of USCP outstanding at any time cannot exceed CAD 15 billion or USD equivalent, and the maximum term for USCP is 270 days from the issue date. Morningstar DBRS expects the Province to have, at any time, sufficient liquidity available to cover its USCP program outstanding amounts.

CREDIT RATING DRIVERS
Ontario's USCP credit rating is expected to move in tandem with the Short-Term Debt credit rating of the Province. Therefore, an upgrade of the Province's Short-Term Debt credit rating would lead to an upgrade of the USCP program. Conversely, a downgrade of Ontario's Short-Term Debt credit rating would result in a downgrade of the USCP program.

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 Factors in Credit Ratings (August 13, 2024), https://dbrs.morningstar.com/research/437781.

Critical Rating Factors (CRFs) and Financial Risk Assessment (FRA) Factors
(A) Weighting of CRFs
In the analysis of the Province, the CRFs are considered in the order of importance contemplated in the methodology.

(B) Weighting of FRA Factors
In the analysis of the Province, the FRA factors are considered in the order of importance contemplated in the methodology.

(C) Weighting of the CRF and the FRA
In the analysis of the Province, the CRF carries greater weight than the FRA.

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

Morningstar DBRS applied the following principal methodology:
-- Rating Canadian Provincial and Territorial Governments (April 15, 2024), https://dbrs.morningstar.com/research/431208

Morningstar DBRS credit ratings may use one or more sections of the Morningstar DBRS Global Corporate Criteria (April 15, 2024; https://dbrs.morningstar.com/research/431186), which covers, for example, topics such as holding companies and parent/subsidiary relationships, guarantees, recovery, and common adjustments to financial ratios.

The following methodology has also been applied:
-- Morningstar DBRS Global Corporate Criteria (April 15, 2024), https://dbrs.morningstar.com/research/431186

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

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.

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@dbrsmorningstar.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.

This is a solicited credit rating.

This credit rating is endorsed by DBRS Ratings Limited for use in the United Kingdom, and by DBRS Ratings GmbH for use in the European Union, respectively. The following additional regulatory disclosures apply to endorsed credit ratings:

This credit rating concerns a newly issued financial instrument/newly rated issuer. This is the first Morningstar DBRS credit rating on this financial instrument/issuer.

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.

For further information on Morningstar DBRS historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: https://registers.esma.europa.eu/cerep-publication. For further information on Morningstar DBRS historical default rates published by the Financial Conduct Authority (FCA) in a central repository, see https://data.fca.org.uk/#/ceres/craStats.

Lead Analyst: Travis Shaw, Senior Vice President, Sector Lead
Rating Committee Chair: Thomas R. Torgerson, Managing Director
Initial Rating Date: May 15, 1987

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

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577