DBRS Assigns Provisional Ratings to DECO 2012-MHILL Limited

DBRS Ratings Limited (DBRS) has today assigned provision ratings to the following classes of Commercial Real Estate Loan Backed Floating Rate Notes due 2021 (collectively, the Notes) to be issued by DECO 2012-MHILL Limited:

– AAA (sf) to Class A
– AA (high) (sf) to Class B
– A (high) (sf) to Class C

The collateral for the transaction is a charge over QIC Finance (Ireland) Limited’s rights under loans it made to six of the Merry Hill Limited Partnerships and the related collateral for such loans, which includes the equitable charge of Merry Hill Limited Partnerships over the beneficial title of the Merry Hill portfolio of properties and the related companies legal charges over the legal title to such properties.

The Merry Hill portfolio of properties consists of a U.K. shopping centre, with approximately 1.3 million square feet of retail space, and another 0.7 million square feet of space located across a number of ancillary properties, including a retail park, a business park, a leisure complex, a free-standing supermarket, an industrial estate and a petrol station. In addition, there are approximately 47 acres of development ground.

The retail aspect of the collateral, which includes the shopping centre, the retail park and a stand-alone supermarket, comprises 94.9% of the portfolio’s entire value. The remaining value of the portfolio is split between office use (2.9%), development ground (1.5%) and other uses (0.7%). The properties are located in the town of Brierley Hill in the West Midlands, approximately eight miles west of the Birmingham city centre.

The final legal maturity of the Notes is in July 2021, five years beyond the maturity of the loan. This is believed to be sufficient time to enforce and repay bondholders given the unique security structure and the property’s jurisdiction.

Finalization of ratings is contingent upon receipt of final documents conforming to information already received by DBRS.

Notes:
The principal methodology applicable is European CMBS Methodology, Legal Criteria for European Structured Finance Transactions and Unified Interest Rate Model for European Securitisations, which can be found on www.dbrs.com under Methodologies.

The sources of information used for this rating include Deutsche Bank AG, Cushman & Wakefield, Rider Levett Bucknall and Westfield Shoppingtowns Limited. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

This rating concerns a newly issued financial instrument. This is the first DBRS rating on this financial instrument.

The Rule 17g-7 Report of Representations and Warranties is hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

For additional information on this rating, please see Linking Document: European CMBS under Related Research to the right or by contacting us at info@dbrs.com.

Lead Analyst: Scott Goedken
Rating Committee Chair: Mary Jane Potthoff
Initial Rating Date: 1 February 2012