DBRS Morningstar Assigns Rating of “A” with a Stable Trend to Newfoundland Power Inc.’s $100 Million First Mortgage Sinking Fund Bonds

DBRS Limited (DBRS Morningstar) assigned a rating of “A” with a Stable trend to Newfoundland Power Inc.’s (Newfoundland Power) $100 million 3.608% Series AQ First Mortgage Sinking Fund Bonds (Series AQ Bonds), maturing April 20, 2060. The Series AQ Bonds settled on April 20, 2020. The rating assigned to this newly issued debt instrument is based on the rating of an already-outstanding debt series of the above-mentioned debt instrument.

The Series AQ Bonds will be secured pari passu with all bonds issued and to be issued under the Deed of Trust and Mortgage dated September 15, 1966, and Deeds Supplemental thereto.

Net proceeds from the sale of the Series AQ Bonds will be used to reduce short-term bank indebtedness incurred principally to fund capital expenditures and for general corporate purposes.

DBRS Morningstar believes that the regulated business model and strong financial credit metrics of Newfoundland Power provides enough cushion to weather the impact of the Coronavirus Disease (COVID-19) pandemic and does not expect any material impact on the credit quality of Newfoundland Power in the near term. However, DBRS Morningstar acknowledges the uncertainties associated with COVID-19 and will continue to actively monitor the situation.

ESG CONSIDERATIONS

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792.

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

The principal methodology is Rating Companies in the Regulated Electric, Natural Gas and Water Utilities Industry (September 2019), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

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

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