Investors

Credit Ratings

Credit ratings are intended to provide investors with an independent measure of credit quality of an issue of securities and are indicators of the likelihood of payment and of the capacity and willingness of an issuer to meet its financial commitment on an obligation in accordance with the terms of the obligation. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the rating organization.

Company Security DBRS S&P FITCH

ATCO Ltd.

Issuer Rating

A (low)

BBB+

BBB+

Canadian Utilities Limited

Issuer Rating

Senior Unsecured Debt

Commercial Paper

Preferred Shares

A

A

R-1 (low)

PFD-2 (high)

BBB+

BBB

A-1 (low)

P-2

A-

A-

F2

BBB

CU Inc.

Issuer Rating 

Senior Unsecured Debt

Commercial Paper

Preferred Shares

A (high)

A (high)

R-1 (low)

PFD-2 (high)

A-

A-

A-1 (low)

P-2

A-

A

F2

BBB+

ATCO Gas Australia

Issuer Rating

N/A

BBB+

N/A

Long Term Debt and Issuer Credit Ratings                                                     

An A issuer rating by DBRS is the third highest of ten categories. An issuer rated A is of good credit quality. The capacity for the payment of financial obligations is substantial, but of lesser credit quality than AA. A-rated issuers may be vulnerable to future events, but qualifying negative factors are considered manageable. Each rating category other than AAA and D contains the subcategories high and low. The absence of either a high or low designation indicates the rating is in the middle of the category.

An A issuer rating by S&P is the third highest of ten categories. An entity rated A by S&P has a strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than an entity in higher-rated categories. Ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.                                                 

A BBB issuer rating by S&P is the fourth highest of ten categories. An obligation rated BBB exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to weaken the obligor's capacity to meet its financial commitments on the obligation. Ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.                                                 

An A rating by Fitch is the third highest of the eleven categories. An A rating denotes expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings. For ratings AA through CCC levels Fitch may use modifiers, a plus or a minus sign may be appended to a rating to denote relative status within major rating categories, indicating relative differences of probability of default or recovery for issues.                                                     

A BBB rating by Fitch is the fourth highest of the eleven categories. A BBB rating indicates that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate, but adverse business or economic conditions are more likely to impair this capacity. For ratings AA through CCC levels Fitch may use modifiers, a plus or a minus sign may be appended to a rating to denote relative status within major rating categories, indicating relative differences of probability of default or recovery for issues.                                                     

Commercial Paper and Short Term Debt Credit Ratings                                         

An R-1 (low) rating by DBRS is the lowest subcategory in the highest of six categories and is granted to short-term debt of good credit quality. The capacity for the payment of short-term financial obligations as they fall due is substantial. Overall strength is not as favourable as higher rating subcategories and may be vulnerable to future events, but qualifying negative factors are considered manageable. Rating categories R-1 and R-2 are denoted by the subcategories high, middle, and low.                                       

An A-1 (Low) rating by S&P is the third highest of eight categories in its Canadian commercial paper ratings scale. A short-term obligation rated A-1 (Low) is slightly more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitments on the obligation is satisfactory.                                              

An F2 rating by Fitch is the second highest of seven categories. F2 indicates a good capacity for timely payment of financial commitments relative to other issuers or obligations in the same country or monetary union. However, the margin of safety is not as great as in the case of the higher ratings.                                                  

Preferred Share Credit Ratings                                        

A PFD-2 rating by DBRS is the second highest of six categories granted by DBRS. Preferred shares rated in this category are generally of good credit quality. Protection of dividends and principal is still substantial, but earnings, the balance sheet, and coverage ratios are not as strong as PFD-1 rated companies. Each rating category is denoted by the subcategories high and low. The absence of either a high or low designation indicates the rating is in the middle of the category.

A P-2 rating by S&P is the second highest of eight categories S&P uses in its Canadian preferred share rating scale. An obligation rated P-2 exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to weaken the obligor's capacity to meet its financial commitments on the obligation. A high or low designation shows relative standing within a rating category. The absence of either a high or low designation indicates the rating is in the middle of the category.               

A BBB rating by Fitch is the fourth highest of the eleven categories. A BBB rating indicates that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate, but adverse business or economic conditions are more likely to impair this capacity. For ratings AA through CCC levels Fitch may use modifiers, a plus or a minus sign may be appended to a rating to denote relative status within major rating categories, indicating relative differences of probability of default or recovery for issues.