DBRS Assigns Provisional Rating to OPB Finance Trust’s Series D Debentures at AA (high)

DBRS Limited (DBRS) has today assigned a provisional rating of AA (high) to the proposed $250 million Series D Debentures (the Debentures), to be issued by OPB Finance Trust (the Trust). The trend on the rating is Stable. The Trust is a wholly owned and principal financing subsidiary of Ontario Pension Board (OPB or the Fund). The Debentures will be unconditionally and irrevocably guaranteed by OPB, and will rank pari passu with all other unsecured and unsubordinated indebtedness of the Trust. Net proceeds will be used to finance OPB real estate transactions.

To DBRS’s knowledge, no material adverse developments have occurred in OPB’s operations or financial position since DBRS’s most recent rating review in August 2014. Once issued, the proposed Series D Debentures will increase debentures outstanding, with recourse to OPB, to $1.0 billion. However, this still remains well below OPB’s internal debt policy, which limits total debt (including both recourse and non-recourse) to 10% of the market value of the Fund. DBRS notes that this is more conservative than other rated pension fund managers, and provides resilience to the assigned rating.

It is anticipated that OPB’s 2014 Annual Report will be released later this summer, at which time DBRS will provide a full report with additional analytical detail.

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

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The applicable methodology is Rating Canadian Public Pension Funds & Related Exclusive Asset Managers (May 2014) and DBRS Criteria: Guarantees and Other Forms of Explicit Support (July 2013), which can be found on our website under Methodologies.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.