DBRS Maintains MI Developments Under Review with Negative Implications

DBRS is maintaining the Senior Unsecured Debentures of MI Developments Inc. (MID or the Company) Under Review with Negative Implications following the announcement that Magna Entertainment Corp. (MEC) is filing for Chapter 11 bankruptcy protection. DBRS notes that MID is the controlling shareholder of MEC and is the largest secured creditor of MEC. DBRS also notes that MID does not guarantee any of MEC’s debt. In addition, MID’s Senior Unsecured Debentures covenants are based on the real estate business of MID and DBRS does not expect these covenants to be affected by the Chapter 11 filing of MEC.

In resolving the Under Review with Negative Implications status, DBRS will assess several key rating factors, including the following:

(1) The increased risk profile of Magna International Inc. (Magna; MID’s key tenant and occupying substantially all of its properties) and the impact of this event on MID’s credit profile. DBRS notes that Magna was downgraded to BBB (high) with a Stable trend from “A” on March 5, 2009.

(2) The significant deterioration of the auto parts sector, which DBRS believes could result in further plant closures at MID’s properties and affect the Company’s growth through Magna-related industrial properties.

(3) MID’s real estate business strategy going forward.

Note:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Rating Real Estate, which can be found on our website under Methodologies.

This is a Corporate rating.