DBRS Provisionally Rates CBC Monetization Trust Notes at AAA

DBRS has today assigned a provisional rating of AAA to the CBC Monetization Trust Notes (the Notes) to be issued by CBC Monetization Trust (the Trust). The Notes will be semi-annual, fully amortizing notes that will pay a blend of principal and interest commencing on May 15, 2010, and continuing until and including the final maturity date of May 15, 2027, when the final interest and principal payment will be due.

The Trust has been established in order to monetize four receivables held by the Canadian Broadcasting Corporation (CBC) related to previous sales and leases entered into by CBC with respect to four parcels of land adjacent to the CBC Broadcasting Centre in downtown Toronto.

Payments due to the Trust under the receivables will be unconditionally and irrevocably guaranteed by CBC (the CBC Guarantee). In addition, CBC will enter a Support Agreement with the Trust whereby CBC will provide financial support to the Trust to the extent that the Trust is unable to pay its ongoing expenses and any tax liabilities from the small amount of enhancement in the transaction. An Order in Council will be passed and appropriate statutory amendments will be made in connection with the CBC Guarantee before any Notes are issued.

The status of CBC as an Agent of Her Majesty in Right of Canada (the Crown) means that CBC’s obligations, including those arising under the CBC Guarantee, will carry the full faith and credit of the Crown. The rating of the Notes consequently mirrors DBRS’s Canadian sovereign rating of AAA for the Government of Canada’s domestic and foreign currency obligations.

Notes:
Factors considered by DBRS in determining this provisional rating include the following:
– The CBC Guarantee.
– CBC’s status as an Agent of Her Majesty in Right of Canada.

The applicable methodologies are Rating Sovereign Governments (for the rating of the Government of Canada) and Legal Criteria for Canadian Structured Finance, which can be found on our website under Methodologies.

This is a Structured Finance rating.