Morningstar DBRS Discontinues Ratings for McGill University Health Centre

DBRS Limited (Morningstar DBRS) discontinued and withdrew the Series A Senior Unsecured Debentures rating for McGill University Health Centre/Centre universitaire de sante McGill (MUHC). The discontinuation reflects the amalgamation of MUHC into Santé Québec, a new Crown Corporation responsible for coordinating the operations of Quebec's health and social services network. This change is pursuant to the implementation of Bill 15, An Act to make the health and social services system more effective, by the Province of Quebec (Québec or the Province; rated AA (low) with a Stable trend by Morningstar DBRS).

Effective December 1, 2024, the 5.36% Series A Senior Unsecured Debentures issued by MUHC and maturing on December 31, 2043, are now obligations of Québec payable out of the Province's consolidated revenue fund pursuant to section 1495 of Bill 15. Morningstar DBRS continues to rate this security AA (low) by applying Québec's Long-Term Debt rating.

Pursuant to Bill 15, and the amalgamation of various institutions into Sante Quebec, Santé Québec has assumed the rights and obligations of a number of Québec hospitals, including MUHC, Saint-Justine University Hospital, and Centre Hospitalier de l'Université de Montréal. In our opinion, there has been no meaningful change in the Province's commitment to honour the obligations of these institutions and Santé Québec will play a critical role in the delivery of healthcare services in Québec going forward.

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

Notes:
Morningstar DBRS applied the following principal methodology:
-- Global Methodology for Rating Public and Not-For-Profit Hospitals and Health Systems (December 16, 2024),
https://dbrs.morningstar.com/research/444619

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

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-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.

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. 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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