DBRS Finalizes A (high) Rating on Lower Mattagami Energy Limited Partnership Senior Secured Bonds

DBRS has today finalized the A (high) rating with a Stable trend on the $225 million Lower Mattagami Energy Limited Partnership (LMELP or the Issuer) 4.175% Senior Secured Bonds (the Bonds) Series 2012-1.

The existing LMELP Issuer Rating of A (high), initially assigned on August 17, 2010, had been intended to apply to LMELP’s future secured bond issuance. Please see the updated rating report for more detail.

The financing plan to fund the $2.6 billion redevelopment and expansion includes a $700 million Commercial Paper program (rated R-1 (low)), backstopped by a $700 million bank credit facility, to be periodically repaid with Senior Secured Bonds. Proceeds from the current Bond offering will be used to repay existing short-term indebtedness and to fund future redevelopment costs.

The Bonds are being issued by way of private placement, and pursuant to a master trust indenture and supplemental indenture. The Bonds will be direct, secured and unsubordinated obligations of the Issuer, ranking pari passu with all other bonds of the Issuer. The Bonds, obligations of LMELP, are also guaranteed by affiliate Lower Mattagami Limited Partnership and have full recourse until the Recourse Release Date to sponsor Ontario Power Generation Inc. (OPG, rated A (low) and R-1 (low)).

Construction commenced in June 2010. As of March 31, 2012, according to OPG, work was proceeding consistent with the approved budget and schedule. Total life-to-date expenditures were approximately $900 million, and $107 million of commercial paper was outstanding.

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

The applicable methodology is Rating Project Finance, which can be found on our website under Methodologies.