DBRS Limited (DBRS Morningstar) noted that Hydro-Québec (the Company; rated AA (low) with a Stable trend by DBRS Morningstar) increased the limit on its Commercial Paper (CP) program to USD 5 billion or CAD equivalent from USD 3.5 billion or CAD equivalent. The Company’s CP program is fully guaranteed by the Province of Québec (the Province; rated AA (low) with a Stable trend by DBRS Morningstar) and backstopped by a USD 2 billion committed bank facility guaranteed by the Province maturing in 2025.
Based on its review, DBRS Morningstar is satisfied that the Company’s revised CP program limit continues to meet DBRS Morningstar’s requirements with respect to the “DBRS Morningstar Criteria: Guarantees and Other Forms of Support,” and the “DBRS Morningstar Criteria: Commercial Paper Liquidity Support for Nonbank Issuers.” DBRS Morningstar is of the view that the increase in the Company’s CP program limit has no impact on the credit profile of the Company. The current DBRS Morningstar rating on the Company’s CP program (based on the Province) is R-1 (middle) with a Stable trend.
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 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/396929 (May 17, 2022).
The principal methodologies are DBRS Morningstar Criteria: Guarantees and Other Forms of Support (April 4, 2022; https://www.dbrsmorningstar.com/research/394683) and DBRS Morningstar Criteria: Commercial Paper Liquidity Support for Nonbank Issuers (March 1, 2022; https://www.dbrsmorningstar.com/research/393065), which can be found on dbrsmorningstar.com under Methodologies & Criteria.
A description of how DBRS Morningstar analyzes corporate finance transactions and how the methodologies are collectively applied can be found at: https://www.dbrsmorningstar.com/research/397223.
The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.
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