DBRS Morningstar Maintains Shaw Communications Inc.’s Under Review with Developing Implications Status

DBRS Limited (DBRS Morningstar) maintained the Under Review with Developing Implications status on all ratings of Shaw Communications Inc. (Shaw or the Company). The ratings were placed under review following the March 16, 2021, announcement of an agreement to combine Shaw with Rogers Communications Inc. (Rogers; rated BBB (high) and Under Review with Negative Implications by DBRS Morningstar) in a $26 billion transaction (including the assumption of approximately $6 billion of Shaw’s debt; the Transaction).

Shaw shareholders voted to approve the Transaction at a special shareholder meeting held on May 20, 2021. The court-approved plan of arrangement for the implementation of the Transaction under the Business Corporations Act (Alberta) was approved on May 25, 2021. The Transaction is subject to customary closing requirements, including the receipt of three key regulatory approvals under the Broadcasting Act (Canada), the Competition Act (Canada), and the Radiocommunication Act (Canada). The Transaction is expected to close by the first half of 2022.

The status of Under Review with Developing Implications reflects Rogers’ potential assumption of approximately $6 billion of Shaw’s debt should the Transaction close according to terms substantially similar to those initially proposed. DBRS Morningstar expects Shaw’s debt will effectively rank pari passu with Rogers’ existing senior unsecured indebtedness.

DBRS Morningstar will proceed with its review as more information becomes available and aims to resolve the Under Review status by the closing of the Transaction.

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 methodologies are Rating Companies in the Communications Industry (July 27, 2021; https://www.dbrsmorningstar.com/research/382119); DBRS Morningstar Criteria: Preferred Shares and Hybrid Security Criteria for Corporate Issuers (October 21, 2021; https://www.dbrsmorningstar.com/research/386355); and DBRS Morningstar Criteria: Rating Corporate Holding Companies and Parent/Subsidiary Rating Relationships (October 29, 2021; https://www.dbrsmorningstar.com/research/386615), which can be found on dbrsmorningstar.com 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; https://www.dbrsmorningstar.com/research/373262), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

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 did not have 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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