DBRS Assigns Rating to Dundee Properties Limited Partnership - Enbridge Place Mortgage Loan

DBRS has today assigned a rating of BBB, with a Stable trend, to the 4.132% Mortgage Loan due August 1, 2016, by a major Canadian financial institution in relation to Enbridge Place, Edmonton.

The Mortgage Loan was made in two separate advances, with a blended interest rate of 4.132% per annum, calculated and compounded semi-annually, not in advance, for a term maturing on August 1, 2016, and an amortization period to August 1, 2031. The Mortgage Loan had an outstanding balance of $57,228,684.96 as of May 1, 2013.

The Mortgage Loan is secured by a fee interest in a two-storey podium with a twenty-two-floor office tower occupied primarily by Enbridge Pipelines Inc., known as Enbridge Place. Enbridge Place is located at 10130 103 Street NW, Edmonton, Alberta, in a designated Heritage Area Zone, with approximately 260,000 square feet of office space and approximately 3,000 square feet of retail space.

Based on its own underwriting of the property cash flows, DBRS derived a stabilized net cash flow of $6.9 million for Enbridge Place, representing a term debt service coverage ratio (DSCR) that exceeds 1.50 times. The DSCR is also expected to exceed 1.50 times at the time of refinancing, as the projected amortization of the principal balance on the Mortgage Loan will most likely more than offset the projected increase in the cost of financing.

DBRS assumes that Dundee Properties Limited Partnership (the Borrower) will refinance in 2016 to pay off the principal remaining on the Mortgage Loan and the rating considers the ability of the Borrower to refinance at the end of the Mortgage Loan term. The creditworthiness of the largest tenant, the term of the Mortgage Loan compared with the weighted-average term of the in-place leases, the projected term DSCR, the commensurate DBRS loan-to-value ratio and the amortization collectively support the BBB rating.

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

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are 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.

The applicable methodology is CMBS Rating Methodology, which can be found on our website under Methodologies.