DBRS Morningstar Assigns Rating of BBB, Positive Trend, to METRO INC.’s New Debt Issuance

DBRS Limited (DBRS Morningstar) assigned a rating of BBB with a Positive trend to METRO INC.’s (Metro or the Company) $300 million 4.657% Senior Unsecured Notes (the Notes) due February 7, 2033, which closed on February 6, 2023. The rating being assigned is based upon the rating of an already-outstanding series of the above-mentioned debt instrument.

The Notes will be direct unsecured obligations of Metro and will rank equally and pari passu with each other and with all other existing and future unsecured and unsubordinated indebtedness of the Company. Metro intends to use the net proceeds from the Notes for the repayment of indebtedness incurred under the revolving credit facility and for general corporate purposes.

Metro's ratings continue to reflect its well-established brand and market position in Ontario and Québec, diversified formats and banners, and disciplined financial management. The ratings also consider the intensely competitive operating environment, Metro’s geographical concentration, and the high level of union penetration.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no environmental, social, and 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 Global Methodology for Rating Companies in the Merchandising Industry (September 2, 2022; https://www.dbrsmorningstar.com/research/402334).

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 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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