Press Release

DBRS Morningstar Upgrades Lièvre Power Financing Corporation to BBB with a Stable Trend

Project Finance
December 29, 2021

DBRS Limited (DBRS Morningstar) upgraded the Issuer Rating and the Series 1 Senior Bonds (the Bonds) rating of Lièvre Power Financing Corporation (the Issuer) to BBB from BBB (low). Both trends are Stable. The Issuer is a single-purpose funding vehicle established to finance Lièvre Power L.P.'s (ProjectCo) operations of four hydroelectric generating facilities on the Lièvre River in Québec (the Project). Starting from December 31, 2021, all of ProjectCo's power generation products will be sold to a high investment-grade offtaker under primarily an annually escalated fixed-price power purchase agreement (PPA). The PPA term extends well beyond the maturity of the Bonds.

DBRS Morningstar notes that $125.3 million of the Bonds has been exchanged for Series B Notes issued by Lièvre Power Holdings LP (Holdco; rated BBB with Stable trend by DBRS Morningstar). Please refer to the Holdco press release dated December 29, 2021, for details. The remaining interest-only Bonds of $99.7 million will mature on October 6, 2025, subject to refinancing. However, the refinancing uncertainty is significantly mitigated by the significant PPA tail beyond the maturity of the Bonds. Until maturity, the Issuer will continue to have full security of the Project’s assets, and the debt at Holdco will be structurally subordinated to the Bonds.

Under the PPA, the Issuer’s debt service will be underpinned by the contracted cash flow as opposed to the current exposure to the merchant risk. This is the main driver for the rating upgrades. Nonetheless, the contracted cash flow is bifurcated, and the equal rights of HoldCo and the Issuer to the cash flow are granted under the PPA through a co-ownership agreement on a proportionate basis. Based on DBRS Morningstar’s forecast of long-term average generation, the Issuer’s minimum debt service coverage ratio (DSCR) of 1.40 times is consistent with that of contracted hydroelectric assets at the midpoint of DBRS Morningstar's BBB rating universe.

A rating upgrade is unlikely considering the rating-case DSCR level. A negative rating action may be triggered by a material and sustained deterioration of credit metrics and/or asset quality.

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

All figures are in Canadian dollars unless otherwise noted.

The principal methodologies are Rating Project Finance (August 18, 2021; and DBRS Morningstar Criteria: Guarantees and Other Forms of Support (May 31, 2021;, which can be found on under Methodologies & Criteria. Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (February 3, 2021;

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

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.

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