DBRS Assigns Provisional Rating of AAA to the Guaranteed Senior Bonds of Maritime Link Financing Trust

DBRS has today assigned a provisional rating of AAA with a Stable trend to the proposed $1.3 billion Guaranteed Senior Bonds issue (the Bonds) of Maritime Link Financing Trust (the Issuer), the special-purpose trust established under the laws of Nova Scotia to finance construction of the Maritime Link Transmission Project (the Project). The rating is predicated on the unconditional and irrevocable loan guarantee (the Guarantee) provided by the Government of Canada (Canada; rated AAA with a Stable trend by DBRS) on the Bonds and pledge bonds issued under the trust indenture.

The Issuer is a single-purpose financing trust whose sole business is to issue the Bonds, on-lend the proceeds to a project company responsible for undertaking and operating the Project and to service the Bonds with the cash flow from the loans to the Project. The total borrowing amount includes funds necessary to service the Bonds during construction up to the commercial operation date, which is scheduled in 2017.

DBRS has reviewed the constituting documents of the Issuer and the Guarantee Agreement between Canada and the Indenture Trustee and notes that the Guarantee meets all of DBRS’s requirements, allowing for the flow-through of the Government of Canada’s AAA rating to the Bonds. Of note, the Guarantee constitutes an irrevocable, unconditional, absolute and continuing obligation of the Government of Canada. There is no requirement to exhaust recourse against the Issuer before being entitled to payment from Canada, all defences are waived by Canada and subrogation rights are postponed as long as guaranteed obligations are outstanding and no amendment of the Guarantee is permitted except by agreement with the Indenture Trustee. Furthermore, release of the guarantor is only permitted once all obligations are repaid in full.

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 DBRS Criteria: Guarantees and Other Forms of Explicit Support, which can be found on our website under Methodologies.

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