DBRS Morningstar Assigns Rating of BBB (low) With a Stable Trend to Ovintiv Inc’s Senior Notes

DBRS Limited (DBRS Morningstar) assigned a rating of BBB (low) with a Stable trend to Ovintiv Inc’s (Ovintiv or the Company; rated BBB (low) with a Stable trend by DBRS Morningstar) USD 600 million 5.650% Senior Notes due May 15, 2025; USD 700 million 5.650% Senior Notes due May 15, 2028; USD 600 million 6.250% Senior Notes due July 15, 2033; and USD 400 million 7.100% Senior Notes due July 15, 2053 (collectively the Notes). The rating being assigned is based upon the rating of an already-outstanding series of the above-mentioned debt instruments.

DBRS Morningstar expects Ovintiv to use the net proceeds from the issuance of the Notes to finance the cash portion of the recently announced acquisition in the Permian Basin and for general corporate purposes.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS

Environmental (E) Factors
DBRS Morningstar considered Carbon and Greenhouse Gas Costs as a relevant Environmental factor, given that compliance with ever-increasing environmental regulations and standards is adding costs for oil and gas producers such as Ovintiv. While Ovintiv's cost of complying with current environmental regulations is not expected to be material, additional environmental regulations could add incremental costs for Ovintiv and the oil and gas industry as a whole.

There were no Social or 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).

Notes:

DBRS Morningstar applied the following principal methodologies:
-- Global Methodology for Rating Companies in the Oil and Gas and Oilfield Services Industries (August 31, 2022) https://www.dbrsmorningstar.com/research/402196
-- DBRS Morningstar Global Criteria: Guarantees and Other Forms of Support (March 28, 2023) https://www.dbrsmorningstar.com/research/411694

The credit rating methodologies used in the analysis of this transaction can be found at: https://www.dbrsmorningstar.com/about/methodologies.

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/interplay-of-global-corporate-finance-rating-methodologies-when-analyzing-corporate-finance-transactions

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 rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the rating process for this rating action.

DBRS Morningstar had access to the accounts, management and other relevant internal documents of the rated entity or its related entities in connection with this 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. DBRS Morningstar trends and ratings are under regular surveillance.

Information regarding DBRS Morningstar ratings, including definitions, policies, and methodologies, is available on www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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