DBRS Morningstar Finalizes Provisional Rating on Gibson Energy Inc.’s Fixed-to-Fixed Rate Subordinated Notes

DBRS Limited (DBRS Morningstar) finalized its provisional rating of BB with a Stable trend on Gibson Energy Inc.’s (Gibson; rated BBB (low) with a Stable trend by DBRS Morningstar) $250 million 5.25% Fixed-to-Fixed Rate Subordinated Notes (the Notes) due December 22, 2080.

DBRS Morningstar also assigned an equity weight of 50% to the Notes until December 22, 2040; 25% after December 22, 2040, until December 22, 2045; and on and after December 22, 2045, the Notes will be treated as 100% debt. The equity weight is based on the currently applicable “DBRS Morningstar Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers,” released on November 2, 2020.

Gibson intends to use the net proceeds from the offering to fund the previously announced redemption of its outstanding 5.25% convertible unsecured debentures due July 15, 2021, to reduce outstanding indebtedness under its revolving credit facility, and for general corporate purposes.

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 methodologies are Rating Companies in the Pipeline and Diversified Energy Industry (November 19, 2020), DBRS Morningstar Criteria: Rating Corporate Holding Companies and Parent/Subsidiary Rating Relationships (November 2, 2020), DBRS Morningstar Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers (November 2, 2020), and DBRS Morningstar Criteria: Guarantees and Other Forms of Support (January 22, 2020), 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.

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@dbrsmorningstar.com.

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.

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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