DBRS Morningstar Assigns Ratings of A (high) with Stable Trends to Hydro One Inc.’s $1,050 Million Medium-Term Notes Issues

DBRS Limited (DBRS Morningstar) assigned ratings of A (high) with Stable trends to Hydro One Inc.’s (HOI or the Company) $1,050 million Medium-Term Notes (the Notes) offering, which is composed of $300 million of 3.93% (Series 53) due 2029, $450 million 4.16% (Series 54) due 2033, and $300 million 4.46% (Series 55) due 2053. The ratings assigned to the Notes are based on the ratings of other already-outstanding series of Senior Unsecured Debentures.

The Notes will be direct, unsecured obligations of HOI, ranking pari passu with all other unsecured and unsubordinated indebtedness of the Company. HOI intends to allocate net proceeds from the issuances to finance and/or refinance Eligible Projects (as defined pursuant to the Company’s Sustainable Financing Framework). Prior to such allocation, net proceeds may be initially used for repayment of indebtedness or investments in bank deposits or other cash equivalents.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/396929/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings (May 17, 2022).

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

The principal methodology applicable to the rating is the Global Methodology for Rating Companies in the Regulated Electric, Natural Gas, and Water Utilities Industry (https://www.dbrsmorningstar.com/research/402616; September 13, 2022).

The rating methodologies used in the analysis of this transaction can be found at: https://www.dbrsmorningstar.com/about/methodologies.

A description of how DBRS Morningstar analyzes corporate finance transactions and how the methodologies are collectively applied can be found at: https://www.dbrsmorningstar.com/research/397223/interplay-of-global-corporate-finance-rating-methodologies-when-analyzing-corporate-finance-transactions.

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.

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

Information regarding DBRS Morningstar ratings, including definitions, policies, and methodologies, is available on www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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