DBRS Confirms the Rating of Platinum Canadian Mortgage Trust, Series 2010-1

As part of DBRS’s continued effort to provide timely credit rating opinions and increased transparency to market participants, DBRS has today confirmed the rating of Home Equity Lines of Credit Receivables-Backed Floating Rate Notes, Series 2010-1 (the Notes), issued by Platinum Canadian Mortgage Trust (the Trust) at AAA (sf).

The confirmation is based on the following factors:

(1) Historical loss levels have been extremely low as all home equity line of credit (HELOC) accounts are secured by Canada Mortgage and Housing Corporation (CMHC)-insured, prime credit, first-lien mortgages on residential properties. CMHC is an agent of Her Majesty in right of Canada and is rated AAA by DBRS.

(2) The maximum loan-to-value for any HELOC account is 80%, which ensures a minimum 20% equity in the properties, based on the original appraisal values.

(3) The level of credit enhancement is commensurate with AAA-rated programs in Canada consisting of similarly insured mortgage products, provided by (i) the Cash Reserve Account, seeded at 0.50%, and (ii) excess spread of 0.51% through a swap with the seller.

Manulife Bank of Canada, rated A (high) and R-1 (middle), had assets of $20.4 billion as of September 30, 2011, and is the originator, seller and servicer of the assets and the swap counterparty for the Notes.

DBRS monitors the performance of the transactions to identify any deviation from DBRS’s expectation at issuance of the Notes and to ensure that the rating remains appropriate. The review is predicated on the timely receipt of performance information from the related providers.

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

The applicable methodologies are Rating Canadian Home Equity Lines of Credit (HELOCs), Legal Criteria for Canadian Structured Finance and Swap Criteria for Canadian Structured Finance Transactions, which are available on our website under Methodologies.