DBRS Morningstar Comments on the Proposed Acquisition of AltaGas Canada Inc. by Public Sector Pension Investment Board and the Alberta Teachers' Retirement Fund Board

DBRS Limited (DBRS Morningstar) notes that on October 21, 2019, AltaGas Canada Inc. (ACI or the Company) announced that it has concluded a definitive agreement with the Public Sector Pension Investment Board (rated AAA with a Stable trend by DBRS Morningstar) and the Alberta Teachers' Retirement Fund Board (together, the Sponsors) whereby the Sponsors will acquire the outstanding common shares of ACI for a total consideration of approximately $1.7 billion (the Transaction).

ACI’s ratings are based on the strength of its ownership of regulated natural-gas distribution utilities, its contracted renewable power assets and its strong financial risk profile. DBRS Morningstar considers the Transaction to be neutral to the Company’s credit ratings as the Transaction is not financed with any incremental debt at ACI and the new Sponsors intend to govern and finance ACI in a manner consistent with the current strategy. DBRS Morningstar expects the Company to continue to pursue a self-funded financing model to fund organic growth capital at the regulated utilities it owns.

The Transaction is subject to the customary closing conditions, including shareholder approval and regulatory approvals from the Alberta Utilities Commission and the British Columbia Utilities Commission. The Transaction is expected to close in the first half of 2020.

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

The principal methodologies are Rating Companies in the Regulated Electric, Natural Gas and Water Utilities Industry and DBRS Criteria: Rating Corporate Holding Companies and Their Subsidiaries, which can be found on dbrs.com under Methodologies & Criteria.

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

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