Northwest Acquisitions ULC, an entity affiliated with The Washington Companies, is acquiring Dominion Diamond Corp., a Canada-based rough diamond producer.


  • Northwest Acquisitions ULC, an entity affiliated with The Washington Companies, is acquiring Dominion Diamond Corp., a Canada-based rough diamond producer.
  • We are assigning our 'B+' long-term corporate credit rating and stable outlook to Northwest.
  • The rating primarily reflects the company's limited operating breadth, with relatively conservative leverage ratios that we expect will remain notably sensitive to rough diamond price volatility amid a period of high growth-related capital expenditures.
  • At the same time, we are assigning our 'BB' issue-level rating and '1' recovery rating to Northwest's proposed US$200 million first-lien senior secured credit facility.
  • We are also assigning our 'BB-' issue-level rating and '2' recovery rating to the company's proposed US$550 million second-lien senior secured notes.
  • The stable outlook reflects our expectation that Northwest will generate adjusted funds from operations-to-debt of just over 30% in the next 12 months, with relatively stable debt levels as growth-related capital spending is likely to be funded with internally generated cash flows.

The rating on Northwest primarily reflects our view of the company's limited 
operating breadth related to the production of rough diamonds exclusively from 
interests in two mines that Dominion Diamond Corp. currently owns. On close of 
Northwest's acquisition of Dominion Diamond (likely before calendar year-end 
2017), the company's assets will consist of a 100% interest in Dominion 
Diamond, the fourth-largest global producer of diamonds--estimated at close to 
10 million carats in fiscal 2018. Dominion Diamond owns substantially all of 
the Ekati mine and 40% of the Diavik mine (operated and 60% owned by Rio Tinto 
plc; A-/Positive/A-1) in the Northwest Territories.