DBRS Morningstar Assigns Rating of BBB (high), Stable Trend to Saputo Inc.’s New Debt Issuance

DBRS Limited (DBRS Morningstar) assigned a rating of BBB (high) with a Stable trend to Saputo Inc.’s (Saputo or the Company) debt issuance of $400 million 2.876% Medium Term Notes due November 19, 2024 (the Notes). The assigned rating is based on the rating of an already-outstanding series of the Company’s Senior Unsecured Notes.

The Notes are unsecured obligations, which rank pari passu with Saputo’s existing and future unsecured and unsubordinated indebtedness. The Notes are guaranteed by Saputo Foods Limited; Saputo Dairy Products Canada G.P.; Saputo U.S., L.P.; Saputo Cheese USA Inc.; Saputo Dairy Foods USA, LLC; Saputo Dairy Australia Pty Ltd.; Dairy Crest Group Limited; Dairy Crest Limited; MH Foods Limited; and Saputo Dairy UK Ltd.

The Company intends to use the proceeds from the Notes to repay the $300 million Series 1 Medium Term Notes due November 26, 2019, and the remainder will be used to repay a portion of the 2017 term facility that was incurred to finance the acquisition of Murray Goulburn Co-Operative Co. Limited or for general corporate purposes.

Saputo’s ratings continue to be supported by its leading market position, diversification of operations by distribution channel and geography and strong free cash flow generation. The ratings also reflect the Company’s exposure to volatile commodity prices while operating in a highly competitive industry and the risks associated with the mature markets in which Saputo operates, all of which are highly regulated.

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

The principal methodology is Rating Companies in the Consumer Products Industry, which can be found on dbrs.com under Methodologies & Criteria.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

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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