Morningstar DBRS Assigns Credit Rating of AAA With a Stable Trend to the Guaranteed Bonds of CAD 400 Million Issued by Stonlasec8 Indigenous Holdings Limited Partnership

DBRS Limited (Morningstar DBRS) assigned a credit rating of AAA with a Stable Trend to Stonlasec8 Indigenous Holdings Limited Partnership's (the Issuer) $400 million Series 1 Guaranteed Bonds (the Guaranteed Bonds). The 30-year Guaranteed Bonds will be interest only until January 2030 but start to amortize afterwards to nil upon maturity in 2055. The credit rating is essentially a flow-through of Government of Canada's (Canada; rated AAA with a Stable trend) credit rating.

The Issuer is a special-purpose vehicle established to issue the Guaranteed Bonds for the purpose of acquiring a minority equity interest of 12.5% in the business and operations of Westcoast Energy Limited Partnership (Westcoast LP), which is currently wholly owned by Enbridge Inc. (Enbridge; rated A (low) with a Stable trend) through its subsidiary, Westcoast Energy Inc. (WEI; rated A (low) with a Stable trend).

KEY CREDIT RATING CONSIDERATIONS
Canada Indigenous Loan Guarantee Corporation (CILGC) provides a guarantee to the $400 million Guaranteed Bonds. Because of CILGC's legal status as an Agent of federal Crown, Morningstar DBRS assessed that CILGC's credit quality to be on par with Canada's. CILGC's primary mandate is to facilitate investment and participation by Indigenous communities in commercially reasonable and viable acquisitions or projects. As part of this mandate, CILGC can deploy equity loan guarantees to support third party financing of acquisitions.

The credit rating of the Guaranteed Bonds is based on an unconditional and irrevocable guarantee provided by CILGC (the Guarantor). Morningstar DBRS has received a legal opinion from counsel to CILGC covering the execution and enforceability of the Guarantee. The Guarantee is consistent with the requirements under the Guarantees and Other Forms of Support section of the "Morningstar DBRS Global Corporate Criteria." Because the Guarantor CILGC's credit quality is on par with Canada's, Morningstar DBRS can flow through Canada's AAA credit rating to the Guaranteed Bonds.

CREDIT RATING DRIVERS
The credit rating currently stands at the highest AAA level, there is no possibility for positive credit rating action. Any negative credit rating action would result from (1) a change in legislation affecting CILGC's status as an agent of federal Crown or (2) a negative credit rating action on Canada.

FINANCIAL OUTLOOK
A minimum deconsolidated debt service coverage ratio of 1.44 times is projected throughout the debt term.

CREDIT RATING RATIONALE
The credit rating is essentially a flow-through of Canada's.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS   
There were no Environmental/Social/Governance factor(s) 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 (May 16, 2025) at https://dbrs.morningstar.com/research/454196.

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

Morningstar DBRS applied the following principal methodology:
-- Morningstar DBRS Global Corporate Criteria (February 3, 2025) https://dbrs.morningstar.com/research/447186

The following methodologies have also been applied:
-- Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025), https://dbrs.morningstar.com/research/454196.

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 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 did have 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.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website: https://dbrs.morningstar.com/understanding-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 https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.

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