DBRS Rates Groupe Aeroplan’s New Preferred Shares at Pfd-3

DBRS has today assigned a rating of Pfd-3 with a Stable trend to Groupe Aeroplan Inc.’s (Aeroplan or the Company) issuance of $150 million in Cumulative Rate Reset Preferred Shares, Series 1 (Preferred Shares). At the same time, the Issuer and Senior Secured Debt ratings of Aeroplan are confirmed at BBB with a Stable trend, as the Company’s credit profile remains in line with DBRS’s expectations.

Proceeds from the Preferred Shares are expected to be applied mainly toward bank debt. Given that DBRS views the Preferred Shares largely as equity rather than debt (as per the methodology DBRS Preferred Share and Hybrid Criteria for Corporate Issuers), the impact on Aeroplan’s financial profile from the issuance will be modestly positive.

Aeroplan will issue six million Preferred Shares with a price of $25, with a first reset date of March 31, 2015. The Preferred Shares are redeemable by Aeroplan on or after March 31, 2015, and will rank subordinate to the Company’s outstanding debt but above its common shares.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodologies are Consumer Products and DBRS Preferred Share and Hybrid Criteria for Corporate Issuers, which can be found on our website under Methodologies.

This is a Corporate rating.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.

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