DBRS confirms AltaGas

DBRS said it confirmed AltaGas Ltd.'s medium-term notes at BBB and preferred shares at Pfd-3, both with stable trends.

The rating actions follow the announcement that AltaGas has offered to acquire all of the issued and outstanding shares of Pacific Northern Gas Ltd. (BBB (low) and Pfd-3 (low)) and that both parties have executed an acquisition agreement. The transaction value equates to 9.6 times PNG's EBITDA, which the agency said is reasonable.

DBRS expects the acquisition to modestly improve AltaGas's business risk profile through the addition of relatively low-risk, regulated natural gas distribution assets.

Conversely, the agency expects moderate deterioration in the company's credit metrics as a result of the acquisition being funded through existing credit facilities (plus assumed Pacific Northern Gas debt).

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