Tourmaline Oil Corp.

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Filer granted exemption from the prospectus requirement in connection with trades of commercial paper/short term debt instruments that do not meet the rating threshold condition requirement of the short-term debt exemption in section 2.35 of National Instrument 45-106 Prospectus and Registration Exemptions -- Relief granted subject to conditions.

Legislation

Securities Act, R.S.O. 1990, c. S.5.

National Instrument 45-106 Prospectus Exemptions.

Citation: Re Tourmaline Oil Corp., 2025 ABASC 10

January 31, 2025

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA AND ONTARIO
(the Jurisdictions)

AND

IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF
TOURMALINE OIL CORP.
(the Filer)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation), in respect of certain negotiable promissory notes or commercial paper maturing not more than one year from the date of issuance (Notes), that distributions of Notes issued by the Filer and offered for sale in Canada are exempt from the prospectus requirement under the Legislation (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Alberta Securities Commission is the principal regulator for this application;

(b) the Filer has given notice that it intends to rely on Section 4.7(1) of Multilateral Instrument 11-102 Passport System (the MI 11-102) in each of British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick, Prince Edward Island, Nova Scotia and Newfoundland and Labrador; and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions or MI 11-102 have the same meaning if used in this decision, unless otherwise defined herein.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation existing under the Business Corporations Act (Alberta) and the head office and registered office of the Filer are located in Calgary, Alberta.

2. The Filer is a reporting issuer in each of the provinces of Canada and is not in default of any requirement of the securities legislation in Canada.

3. The common shares of the Filer are listed for trading on the Toronto Stock Exchange under the symbol "TOU".

4. The Filer desires to implement a commercial paper program (the Commercial Paper Program) that involves the sale, from time to time, of Notes.

5. The offering and sale of Notes issued by the Filer are subject to the prospectus requirement under the Legislation.

6. Section 2.35(1) of National Instrument 45-106 Prospectus Exemptions (NI 45-106) provides that an exemption from the prospectus requirement of the Legislation for commercial paper (the CP Exemption) is only available where such commercial paper: (a) matures not more than one year from the date of issue; (b) has a credit rating from a designated rating organization that is at or above one of the prescribed short-term ratings set forth in Section 2.35(1)(b) of NI 45-106; and (c) has no credit rating from a designated rating organization that is below one of the prescribed short-term ratings set forth in Section 2.35(1)(c) of NI 45-106.

7. Upon implementation of the Commercial Paper Program, the Notes will have a designated rating of "R-2 (High)" from DBRS Limited, and as a result, the Filer will not satisfy the requirements prescribed by Section 2.35(1)(b) and 2.35(1)(c) of NI 45-106.

8. All Notes will have a maturity not exceeding 365 days from the date of issuance, and will be sold in denominations of not less than $1,000,000.

9. The Notes will be sold in Canada only:

(a) through investment dealers registered, or exempt from the requirement to register, under applicable securities legislation in Canada (Canadian Dealers); and

(b) to "accredited investors" (as defined in NI 45-106) (Canadian Qualified Purchasers), other than those that are any of the following:

(i) an individual referred to in any of paragraphs (j), (j.1), (k) and (l) of that definition;

(ii) a person referred to in paragraph (t) of that definition in respect of which any owner of an interest, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, is an individual referred to in any of paragraphs (j), (j.1), (k) and (l) of that definition; or

(iii) a trust referred to in paragraph (w) of that definition.

10. The Filer will require each Canadian Dealer to apply procedures to ensure that sales of Notes by such Canadian Dealer, as well as any subsequent resales of previously issued Notes by such Canadian Dealer, are made only to Canadian Qualified Purchasers in accordance with paragraph 9 of this decision.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted provided that:

(a) each Note:

(i) is not convertible or exchangeable into, or accompanied by a right to purchase, another security other than a Note;

(ii) is not a "securitized product" (as defined in NI 45-106); and

(iii) is of a class of Notes that has a rating issued by a "designated rating organization" or a "DRO affiliate", both as defined in NI 45-106, at or above one of the following rating categories:

Designated Rating Organization

Rating

DBRSR-2 (High)
Fitch Ratings, Inc.F1
Moody's Canada Inc.P-1
S&P Global Ratings CanadaA-1 (Low) (Canada national scale)

and has no credit rating below:

Designated Rating Organization

Rating

DBRS

R-2 (High)

Fitch Ratings, Inc.

F2

Moody's Canada Inc.P-2
S&P Global Ratings Canada

A-1 (Low) (Canada national scale) or A-2 (global scale)

(b) each distribution of Notes is made:

(i) to a purchaser that is purchasing as a principal and is a Canadian Qualified Purchaser; and

(ii) through a Canadian Dealer; and

(c) each Canadian Dealer has agreed to comply with the procedures referenced in paragraph 10 of this decision.

This decision expires on December 31, 2029.

For the Commission:

"Tom Cotter"
Vice-Chair

"Kari Horn, K.C."
Vice-Chair

OSC File #: 2024/0598