Moody's rates Cordelio bonds Baa1

Moody's Investors Service said it assigned a first-time Baa1 rating to two amortizing senior secured bonds totaling about C$858.2 million proposed to be issued by Cordelio AmalCo LP I.

The outlook is stable.

The proceeds will be used to refinance the existing outstanding debt on a portfolio of renewable energy projects acquired in June 2018 by Cordelio Power, Inc., which includes two wind projects and two solar projects.

Cordelio is a wholly owned subsidiary of Canada Pension Plan Investment Board, Moody's explained.

The portfolio is located in the southwestern Ontario region with the wind projects situated along the southeast shore of Lake Huron and the solar projects located south of Sarnia, Ontario, the agency said.

All projects in the portfolio have achieved commercial operation and have at least four years of operating history, Moody's said.

The issuer is supported by a very strong financial sponsor in the pension board and its subsidiary, Cordelio, which currently owns and manages a portfolio of renewable power assets, the agency said.

The ratings also consider the structure of the financing as the bonds will be issued by Cordelio AmalCo, a holding company that directly owns the project entities, Moody's said.

While the issuer is a holding company, bondholders will benefit from upstream guarantees from the project entities, along with a pledge of collateral from the Issuer and each of the project companies, the agency said.

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