CES ENERGY SOLUTIONS CORP. The recovery rating of RR4 suggests a recovery of 30% to 60% in a default scenario for the Senior Notes. There is no change to the Company's Issuer Rating of B (high) with a Positive trend.
The Senior Notes are unsecured, ranking equal in right of payment to all existing and future unsecured indebtedness and are guaranteed by all of CES' current and future subsidiaries. The Senior Notes have standard covenants, including, but not limited to, limits on indebtedness, restricted payments, liens, and asset sales as well as mergers and acquisitions.
Morningstar DBRS expects the net proceeds of the Senior Notes issuance will be used by CES to repay its existing
The credit rating is underpinned by CES' leading market position in
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.
A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (
BUSINESS RISK ASSESSMENT (BRA) AND FINANCIAL RISK ASSESSMENT (FRA)
(A) Weighting of BRA Factors
In the analysis of CES, the BRA factors were considered in the order of importance contemplated in the methodology.
(B) Weighting of FRA Factors
In the analysis of CES, the FRA factors were considered in the order of importance contemplated in the methodology.
(C) Weighting of the BRA and the FRA
In the analysis of CES, the BRA and the FRA carry approximately equal weight.
Notes:
All figures are in Canadian dollars unless otherwise noted.
Morningstar DBRS applied the following principal methodology:
Global Methodology for Rating Companies in the Oil and Gas and
Morningstar DBRS credit ratings may use one or more sections of the Morningstar DBRS Global Corporate Criteria (
The following criteria has also been applied:
Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (
The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.
A description of how Morningstar DBRS analyzes corporate finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/431153.
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-DBRS@morningstar.com.
A provisional credit rating is not a final credit rating with respect to the above-mentioned debt facility and may change or be different than the final credit rating assigned or may be discontinued. The assignment of a final credit rating on the above-mentioned debt facility is subject to receipt by Morningstar DBRS of all data and/or information and final documentation that Morningstar DBRS deems necessary to finalize the credit rating.
The credit rating was initiated at the request of the rated entity.
The rated entity or its related entities did participate in the credit rating process for this credit rating action.
Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.
This is a solicited credit rating.
The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS trends and credit ratings are under regular surveillance.
Information regarding Morningstar DBRS credit ratings, including definitions, policies, and methodologies, is available on dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.
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