DBRS Morningstar Assigns Credit Rating of BBB, Stable to Saputo Inc.’s New Debt Issuance

DBRS Limited (DBRS Morningstar) assigned a credit rating of BBB with a Stable trend to Saputo Inc.’s (Saputo or the Company; rated BBB with a Stable trend by DBRS Morningstar) 5.492%, $550 million Series 11 Senior Unsecured Notes (the Notes) due November 20, 2030, which closed on November 20, 2023.

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

The proceeds from the issuance were used to repay the $300 million aggregate principal amount of Series 3 Notes due November 21, 2023, and will also be used to repay outstanding indebtedness, and for general corporate purposes. The Notes will be unsecured and will rank pari passu with each other, the Notes of every other series, and with all other existing and future unsecured and unsubordinated indebtedness of the Company.

Saputo’s credit ratings continue to be supported by its leading market position, diversification of operations by distribution channel and geography, and strong free cash flow generation. The credit ratings also continue to reflect the Company’s exposure to volatile commodity prices, the highly competitive industry, and the risk associated with the mature geographies in which Saputo operates, all of which are regulated.

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/416784/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings (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 Consumer Products Industry (July 21, 2023; https://www.dbrsmorningstar.com/research/417460/global-methodology-for-rating-companies-in-the-consumer-products-industry).

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.

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