Vermont Business Magazine Valener Inc (TSX:VNR)(TSX:VNR.PR.A) has announced that it has requested a withdrawal of its Standard & Poor's corporate credit rating following a methodology change that resulted in what it views as an unjustified downgrade by the rating agency.Valener is the investment vehicle for Gaz Metro, which owns Green Mountain Power and Vermont Gas Systems.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 Metro Limited Partnership, 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 Metro, Valener's principal investment, and as such is unfairly punitive. What's more, Valener is well represented on Gaz Metro's board and has significant influence on Gaz Metro'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 Metro'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and as such, Valener has suspended its relationship with Standard & Poor's and has asked to have its credit rating withdrawn.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+.
About Valener
Valener is a widely held public company that serves as the investment vehicle in Gaz Metro. Through its investment in Gaz Metro, 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 Metro's growth, and on the other, invests in wind power production in Quebec alongside Gaz Metro. 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.
MONTREAL, QUEBEC--(Marketwired -January 12, 2016) - Valener Inc