Daimler Canada Finance Inc.

Headnote

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

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 74(1).

TRANSLATION

November 24, 2020

IN THE MATTER OF THE SECURITIES LEGISLATION OF QUÉBEC AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF DAIMLER CANADA FINANCE INC. (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) for granting an exemption from the prospectus requirement of the Legislation in connection with the trades of negotiable promissory notes or commercial paper, maturing not more than one year from the date of issue (the Short-Term Debt), issued by the Filer and offered for sale in Canada (the Exemption Sought).

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

(a) the Autorité des marchés financiers is the principal regulator for this application;

(b) the Filer has provided notice that section 4.7(1) of Regulation 11-102 respecting Passport System, CQLR, V1.1, r.1 (Regulation 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut, 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 Regulation 14-101 respecting Definitions, CQRL, V1.1, r-3 or Regulation 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

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

1. The Filer is a corporation governed by theBusiness Corporations Act (Québec) with its registered and head office located in Québec.

2. The Filer is not a reporting issuer in any jurisdiction of Canada. The Filer is not in default of the requirements of securities legislation of any jurisdiction of Canada.

3. The Filer has implemented a program that involves the sale of Short-Term Debt issued by the Filer to purchasers located in Canada.

4. The offering and sale of Short-Term Debt issued by the Filer are subject to the prospectus requirement under the Legislation.

5. Prior to August 10, 2020, the Short-Term Debt had a designated rating of "R-1 (low)" from DBRS Limited (DBRS), which satisfied the rating categories prescribed in the exemption (the CP Exemption) from the prospectus requirement under paragraphs 2.35(1)(b) and (c) of Regulation 45-106 respecting Prospectus Exemptions, CQLR, V1.1, r.21 (Regulation 45-106).

6. Accordingly, prior to August 10, 2020, the Short-Term Debt were offered and sold pursuant to, and in accordance with, the CP Exemption.

7. On August 10, 2020, DBRS issued a news release indicating, among other things, that it had downgraded the Short-Term Debt by one ratings notch to R-2 (high) (the Downgrade) with stable trends, following the decline in global auto demand due to the Covid-19 pandemic.

8. As a result of the Downgrade, the Filer is no longer able to rely on the CP Exemption for the distribution of Short-Term Debt.

9. All Short-Term Debt will have a maturity not exceeding 365 days from the date of issuance and will be sold in denominations of $1,000 or multiples thereof for a minimum subscription of $250,000.

10. The Short-Term Debt will be offered and sold only:

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

(b) to persons or companies (Qualified Purchasers) that are "accredited investors" as defined in Regulation 45-106, 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 or company 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);

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

11. The Filer will require each Dealer to follow procedures to ensure that sales of Short-Term Debt by such Dealer, as well as any subsequent resales of previously issued Short-Term Debt by such Dealer, are made only to Qualified Purchasers.

Decision

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

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

(a) the Short-Term Debt is not convertible or exchangeable into, or accompanied by a right to purchase, another security other than Short-Term Debt;

(b) the Short-Term Debt is not a "securitized product", as defined in Regulation 45-106;

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

Designated Rating Organization	Rating
DBRS	R-1 (low)
Fitch, Inc.	F1
Moody's Canada Inc.	P-1
Standard & Poor's Ratings Services (Canada)	A-1 (low) (Canada national scale)

and has no rating below:

Designated Rating Organization	Rating
DBRS	R-2 (high)
Fitch, Inc.	F2
Moody's Canada Inc.	P-2
Standard & Poor's Ratings Services (Canada)	A-1 (low) (Canada national scale) or A-2 (global scale)

(d) the distribution is made:

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

(ii) through a Dealer;

(e) each Dealer has agreed to follow the procedures referred to in paragraph 11 of this decision.

"Benoit Gascon"

Directeur principal du financement des sociétés