DBRS Places Ivanhoe Cambridge I’s Debentures Secured by Burlington Mall Under Review – Positive

DBRS has today placed the 10.18% Series III Secured Debentures due March 31, 2013 (the Series III Debentures) issued by Ivanhoe Cambridge I Inc. (the Issuer) and secured by Burlington Mall Under Review with Positive Implications. The debentures are currently rated BBB.

The rating action follows the Issuer’s announcement that it will substitute the existing collateral (Burlington Mall) with the Montréal Eaton Centre, a shopping mall located just a few blocks east of McGill University and at the heart of the Montréal underground city, which features 30 kilometres of tunnels.

The Under Review with Positive Implications status reflects DBRS’s view that the new collateral will have an increased value and higher sustainable cash flow. When compared with the outstanding debt on the Series III Debentures, this would result in a significant improvement in the credit metrics.

DBRS expects to complete the review upon closing of the substitution, which will likely result in a multiple-notch upgrade.

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