DBRS Confirms All Classes of N-45 First CMBS Issuer Corporation, Series 2003-2

DBRS has today confirmed the following classes of N-45 First CMBS Issuer Corporation, Series 2003-2:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class IO at AAA (sf)
-- Class B at AA (high) (sf)
-- Class C at AA (low) (sf)
-- Class D at BBB (high) (sf)

The trend on all classes is Stable.

The ratings confirmations reflect the stability of the pool, with both loans continuing to perform as expected. The pool has experienced approximately 16.4% of collateral reduction as a result of amortization, as the two loans secured at issuance remain outstanding as of the July 2013 remittance. Both loans are scheduled to mature in November 2013.

The largest of the two is Bankers Hall Complex (93.8% of the current pool balance) and the second loan is Royal Bank Building (6.2% of the current pool balance). The assets securing these loans are considered highly desirable properties. They benefit from excellent visibility and location in Calgary’s downtown core, being connected to the city’s Plus 15 network, and very experienced management/sponsorship from Brookfield Office Properties Inc., which is rated BBB by DBRS.

Bankers Hall Complex consists of twin Class AA office towers connected with a retail concourse. While major tenant, Encana Corporation, has made its new headquarters The Bow, a neighbouring high-quality office property, the space it currently leases has already been released to new tenants. The Royal Bank Building is a smaller office property and is considered part of the overall Bankers Hall Complex. The property is named after its largest tenant, Royal Bank of Canada, which leases almost half of the net rentable area (NRA) well past the loan’s scheduled maturity. The combined leverage for both properties is $217 psf, and the loans have a weighted-average debt yield of 19.2%.

The pending repayment of these two loans in the coming months will contribute to the full principal repayment of all outstanding classes in this deal. DBRS continues to monitor this transaction in its Monthly CMBS Surveillance Report, with additional information on the DBRS viewpoint for this transaction, including details on the remaining loans in the pool. The July 2013 Monthly Surveillance Report for this transaction will be published shortly. If you are interested in receiving this report, contact us at info@dbrs.com.

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

The applicable methodologies are CMBS Rating Methodology (January 2012) and CMBS North American Surveillance Methodology (November 2012), which can be found on our website under Methodologies.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.