The confirmation follows the completion of the previously announced spin-off of
The Spin-off, in conjunction with the use of proceeds from the previous
H&R's FRA factors remain relatively unchanged despite the reduction in debt (from use of proceeds from the Bow Disposition) because the improvement helped to offset the negative effects of the Spin-off, whereby
In order for DBRS Morningstar to change the trends to Stable from Negative, the total debt-to-EBITDA metric would need to improve and remain comfortably below 9.2x on a sustained basis, all else being equal. The trigger for a downgrade is total debt-to-EBITDA exceeding current expectations of 9.4x in 2022 and 9.3x in 2023, respectively, all else being equal. As a reminder, DBRS Morningstar changed the trends to Negative from Stable on
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/373262.
Notes:
All figures are in Canadian dollars unless otherwise noted.
The principal methodology is Rating Entities in the Real Estate Industry (
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 under Related Documents or by contacting us at info@dbrsmorningstar.com.
The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.
Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.
For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.
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Ratings
Date Issued Debt Rated Action Rating Trend Attributesi
US = Lead Analyst based in USA
CA = Lead Analyst based in
EU = Lead Analyst based in EU
E = EU endorsed
U =
Unsolicited Participating With Access
Unsolicited Participating Without Access
Unsolicited Non-participating
04-Jan-22 Issuer Rating Confirmed BBB (high) Neg CA
04-Jan-22 Senior Unsecured Debentures Confirmed BBB (high) Neg CA
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