DBRS Assigns BBB Ratings to Enercare Solutions Inc.’s New Issues

DBRS Limited (DBRS) has today assigned ratings of BBB with Stable trends to Enercare Solutions Inc.’s (Enercare or the Company; rated BBB with a Stable trend by DBRS) issuance of $275 million 3.38% Series 2017-1 Senior Unsecured Notes, maturing February 21, 2022, and $225 million 3.99% Series 2017-2 Senior Unsecured Notes, maturing February 21, 2024 (together, the Notes). The Notes settled on February 21, 2017.

The Notes will be direct unsecured obligations of Enercare ranking pari passu with all other unsecured and unsubordinated debt of the Company.

Net proceeds from the Notes are expected to be used to fund the redemption, in full, of the outstanding $250 million 4.30% 2012-1 Senior Unsecured Notes, repayment of existing credit facilities and for general corporate purposes.

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

The principal methodology is Rating Companies in the Consumer Products Industry (September 2016), which can be found on dbrs.com under Methodologies. However, DBRS views Enercare’s strong franchise as having a superior business risk profile than that of a traditional consumer products company. As a result, the Company is able to manage higher leverage metrics.

Overall, in DBRS’s assessment of the credit quality of Enercare, DBRS factors in the following key items: (1) competition arising from regulatory changes, (2) effects of attrition on the customer base, (3) stability of cash flow generated from the customer base, (4) flexibility to increase rental rates and (5) dependency on new home developments for growth.

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