DBRS Confirms WN After Review

DBRS has announced that it:

has today confirmed the Issuer Rating and Notes & Debentures rating of George Weston Limited (GWL or the Company) at BBB, its Commercial Paper rating at R-2 (high) and Preferred Shares rating at Pfd-3, all with Stable trends. This action removes the ratings from Under Review with Developing Implications.

On July 15, 2013, GWL’s ratings were placed Under Review with Developing Implications following Loblaw Companies Limited’s (Loblaw or the Company) announcement of an offer to acquire the shares of Shoppers Drug Mart Corporation (Shoppers) for $12.4 billion and the assumption of approximately $1.2 billion of debt (the Transaction).

The confirmation of GWL’s ratings is directly related to DBRS’s confirmation of Loblaw following the conclusion of our review of the Transaction.

The proposed financing, including GWL’s $500 million investment in Loblaw, would effectively reduce GWL’s voting ownership of Loblaw to approximately 45% from 63% at the end of F2012. That said, GWL remains in effective control of Loblaw and intends to subsequently increase its ownership stake to a majority position.

GWL’s ratings reflect its holding in Loblaw as well as its strong bakery brands and efficient operations, balanced by continuing volatility in its input cost environment and the mature nature of the bakery industry.

The onset of the Review-Developing was reported on PrefBlog.

Weston has four preferred share issues outstanding, WN.PR.A, WN.PR.C, WN.PR.D and WN.PR.E, all Straight Perpetuals.

Leave a Reply

You must be logged in to post a comment.