Credit Rating

Empire Company Limited. is not currently rated by any credit rating agency. Empire’s subsidiary, Sobeys Inc., is rated by both DBRS Ltd. and Standard & Poor’s (S&P).

Sobeys’ Credit Ratings

DBRS Ltd. S&P
Medium Term Notes BB low
(Stable Trend)
BB+
(Positive Outlook)
Sinking Fund Debentures BB low
(Stable Trend)
BB+
(Positive Outlook)
Notes BB low
(Stable Trend)
BB+
(Positive Outlook)

The credit ratings accorded to the debt by the rating agencies are not a recommendation to purchase, hold or sell the debt, inasmuch as such ratings do not comment as to market price or suitability for a particular investor. Credit ratings are intended to provide investors with an independent measure of the credit quality of an issue of securities. The Company provides the rating agencies with confidential, in- depth information in support of the rating process.

DBRS’ credit ratings for long-term debt instruments range from AAA to D. The DBRS BBB (low) rating is investment grade. The capacity for the payment of a company’s financial obligations is considered acceptable and may be vulnerable to future events. Ratings designations may be modified by the addition of a high or low to indicate relative standing within the BB category. Each DBRS rating category is appended with one of three rating trends: “positive”, “stable” or “negative”. The rating trend helps to give an investor an understanding of DBRS’ opinion regarding the outlook for the rating in question. However, the investor must not assume that a positive or negative trend necessarily indicates that a rating change is imminent.

S&P’s credit ratings for long-term debt instruments range from AAA to D. S&P’s BB+ rating is non-investment grade. Ongoing uncertainties or exposure to adverse business, financial, or economic conditions could lead to a company’s inadequate capacity to meet financial commitments on its obligations. Ratings designations may be modified by the addition of a plus or minus to indicate relative standing within the BB category. A plus or minus designation indicates the debt’s relative standing within the BBB category. S&P’s rating outlook assesses the potential direction that a rating may be headed over the immediate to longer-term, with outlooks falling into one of five categories: “positive”, “negative”, “stable”, “developing” or “not meaningful”. A positive outlook indicates steady credit metrics are expected, and the rating may be raised in the intermediate to long term.

The credit ratings on the MTNs, Notes and Sinking Fund Debentures may not reflect the potential impact of all risks related to structure and other factors on the value of the MTNs, Notes and Sinking Fund Debentures. In addition, real or anticipated changes in the Company’s credit ratings will generally affect the market value of the debt. The foregoing ratings may be revised or withdrawn at any time by the rating agency if, in its judgment, circumstances warrant.

The Company has made, or will make, payments in the ordinary course to the rating agencies in connection with the assignment of ratings on the Company or its subsidiaries and their securities. In addition, the Company has made customary payments in respect of certain subscription services provided to the Company by the rating agencies during the last two years.