DBRS Morningstar Assigns Rating of BBB With a Stable Trend to Dollarama Inc.’s New Debt Issuance

DBRS Limited (DBRS Morningstar) assigned a rating of BBB with a Stable trend to Dollarama Inc.’s (Dollarama or the Company) $500 million 5.533% Senior Unsecured Notes (the Notes) due September 26, 2028, which closed on September 26, 2023.

The credit rating assigned to this newly issued debt instrument is based on the credit rating of an already-outstanding debt series of the above-mentioned debt instrument.

Dollarama intends to use the net proceeds of the $500 million in Notes to repay, together with cash on hand, the $500 million aggregate principal amount of the outstanding 3.55% Senior Unsecured Notes due November 6, 2023, and for general corporate purposes. The Notes will be unsecured and will rank pari passu with all other existing and future unsecured and unsubordinated indebtedness of Dollarama.

The credit rating continues to reflect the Company’s strong brand and market position, efficient operations, and national diversification, while also considering the competitive retail environment and dependence on supply chain management to maintain low prices.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factor(s) 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/416784 (July 4, 2023).

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

DBRS Morningstar applied the following principal methodology:
-- Global Methodology for Rating Companies in the Merchandising Industry (https://www.dbrsmorningstar.com/research/417461; July 21, 2023)

The credit 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.

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

DBRS Morningstar had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

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 credit ratings are under regular surveillance.

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

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577