DBRS Confirms RBC Centre, Toronto, at A (low) with Stable Trend

DBRS has today confirmed the rating of the RBC Centre, Toronto (RBC Centre), $300 million First Mortgage Bonds (the Bonds) at A (low) with a Stable trend. The Bonds are direct obligations of Ontrea Inc. and Ontario Pension Board, with recourse limited to RBC Centre. The Bond issuance had an initial term of seven-years, subject to a 30-year amortization period.

The rating takes into consideration credit characteristics of the issuance of the Bonds, inclusive of the quality of the asset; the stability of the cash flow, with long-term leases to investment-grade tenants extending beyond the loan maturity; sponsorship strength; and management experience. The DBRS stabilized net cash flow, when measured against a reversionary capitalization rate and stressed refinance debt, results in a 68.7% exit loan-to-value and a 1.41 times refinance debt service coverage ratio, respectively, supporting the A (low) rating.

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

DBRS ratings for single purpose real estate credits include consideration for the asset’s position within the market, the lease profiles, the valuation, the cash flow over the term of the issuance, the refinance position of the asset and the structure of the transaction, including the organization of the Issuer.

For more information on property underwriting, DSCR and LTV guidelines that DBRS uses, please see the CMBS Rating Methodology.