DBRS Limited (DBRS Morningstar) assigned a rating of BBB with a Stable trend to Dollarama Inc.'s (Dollarama or the Company) $375 million 1.871% Senior Unsecured Notes due July 8, 2026, and $375 million 2.443% Senior Unsecured Notes due July 9, 2029 (together, the Notes), which closed on July 8, 2021.
The ratings assigned to these newly issued debt instruments are based on the rating of an already-outstanding debt series of the above-mentioned debt instruments.
Dollarama intends to use the combined net proceeds of the $750 million in Notes to repay the $525 million aggregate principal amount of its outstanding 2.337% Senior Unsecured Notes due July 22, 2021; to repay a portion of its outstanding U.S. commercial paper notes; and for general corporate purposes. The Notes will be unsecured and will rank pari passu with all other existing and future unsecured and unsubordinated indebtedness of Dollarama.
The ratings continue to reflect the Company's strong brand and market position, efficient operations, and national diversification while also considering the competitive retail environment and dependence on supply chain management to maintain low prices.
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/373262.
All figures are in Canadian dollars unless otherwise noted.
The principal methodology is Rating Companies in the Merchandising Industry (July 30, 2020; https://www.dbrsmorningstar.com/research/364692), which can be found on dbrsmorningstar.com under Methodologies & Criteria. Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (February 3, 2021; https://www.dbrsmorningstar.com/research/373262).
For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.
Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.
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