S&P rates Canadian Pacific Railway notes BBB+

S&P said it assigned a BBB+ rating to Canadian Pacific Railway Co.'s proposed C$400 million senior unsecured notes due 2029.

The agency said it expects the company to use the proceeds to refinance existing debt and for general corporate purposes.

The BBB+ issuer credit rating and stable outlook are unchanged and reflect an expectation that adjusted funds from operations-to-debt should be 30% to 35% over the next few years, S&P said.

The ratings are supported by strong demand across most of the products within the company's portfolio, the agency said.

The ratings also emphasize Canadian Pacific's adherence to its financial policies, including a target net debt-to-EBITDA ratio of 2x to 2.5x, S&P said.

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