DBRS Confirms Data Centres Trust at AA (low)

DBRS has today confirmed the Series A, Asset-Backed Notes (the Series A Notes) of Data Centres Trust at AA (low), with a Stable trend.

The transaction is a straight pass-through of the rental obligations of the tenants of nine buildings. Therefore, the ratings are primarily based on the credit quality of the majority tenant, Royal Bank of Canada (RBC), which now accounts for 100% of the rental payment stream due to the Series A Notes. The Series A Notes do not rely upon any lease renewals; however, RBC has exercised its lease extension options on several of the buildings.

The loan-to-value (LTV) ratio of 14.8% is indicative of all properties remaining in the pool and assumes that the original appraised value of $147.5 million holds. The assets with the longest lease terms, 315 Front Street and 325 Front Street, carry the highest allocated appraised values, at $109.9 million combined. If individual properties are released from the collateral as the leases mature, the value of the remaining properties would greatly exceed the remaining Series A Note balance at any point in the future.

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

The applicable methodologies are CMBS Rating Methodology and CMBS North American Surveillance Methodology, which can be found on our website under Methodologies.