DBRS Rates Lower Mattagami Energy Limited Partnership Senior Secured Bonds A (high) with a Stable Trend

DBRS has today assigned an A (high) rating with a Stable trend to the $200 million 2.228% Senior Secured Bonds (the Bonds) Series 2012-2 issued by Lower Mattagami Energy Limited Partnership (LMELP or the Issuer).

The financing plan to fund the $2.6 billion redevelopment and expansion of the Lower Mattagami River Project includes $1.9 billion Senior Secured Bonds to be issued in various series throughout the construction period to repay interim funding provided by a $700 million Commercial Paper program (rated R-1 (low)) backstopped by a total of $700 million in bank credit facilities. Proceeds from the current Bond offering will be used to repay $144 million of commercial paper outstanding. Including the current series, the total amount of Senior Secured Bonds outstanding is approximately $995 million.

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 Senior Secured Bonds of the Issuer. The Bonds, issued by 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 September 30, 2012, according to OPG, work was proceeding consistent with the approved budget and schedule. Total life-to-date expenditures were approximately $1,188 million.

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.