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MONTREAL, QUEBEC--(Marketwired - Jan 12, 2016) - Valener Inc. ("Valener") (TSX:VNR)(TSX:VNR.PR.A) today announced that it has requested a withdrawal of its Standard & Poor's ("S&P") corporate credit rating following a methodology change that resulted in what it views as an unjustified downgrade by the rating agency.
As a result of the application of new criteria set forth by S&P when rating companies with one or two non-controlling equity interests ("NCEI"), Valener's corporate credit rating was downgraded from BBB+ to BB+ earlier today. Upon review of the new methodology, which includes the introduction of a cap of BB+ on companies with one or two NCEI, Valener notified S&P that the resulting credit rating would not accurately take into consideration the company's investment in Gaz Métro Limited Partnership ("Gaz Métro"), an investment grade company with a corporate credit rating of A. Also, it would fail to provide an accurate assessment of Valener's creditworthiness, especially considering that just a few weeks ago, in December, S&P reiterated Valener's BBB+ rating, and that there has been no change in the company's financial situation since.
"It is Valener's opinion that the new methodology does not accurately reflect the quality and stability of cash flows of Gaz Métro, Valener's principal investment, and as such is unfairly punitive. What's more, Valener is well represented on Gaz Métro's board and has significant influence on Gaz Métro's distributions to unitholders," said Pierre Monahan, Chairman of Valener's board of directors. "The downgrade attributed by S&P is purely the result of an amendment to the rating agency's methodology, not the outcome of an event affecting Valener's or Gaz Métro's operations, and as such, Valener has suspended its relationship with Standard & Poor's and has asked to have its credit rating withdrawn. We are confident that this will not affect Valener's ability to borrow additional funds".
Valener remains rated by DBRS, with a current corporate credit rating of BBB+.
Valener is a widely held public company that serves as the investment vehicle in Gaz Métro. Through its investment in Gaz Métro, Valener offers its shareholders a solid investment in a diversified and largely regulated energy portfolio in Quebec and Vermont. As a strategic partner, Valener, on the one hand, contributes to Gaz Métro's growth, and on the other, invests in wind power production in Quebec alongside Gaz Métro. Valener favours energy sources and uses that are innovative, clean, competitive and profitable. Valener's common and preferred shares are listed on the Toronto Stock Exchange under the "VNR" symbol for common shares and under the "VNR.PR.A" symbol for Series A preferred shares.
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