DBRS Assigns Rating to High Park Bayview Inc. – Bayview Village Apartments Mortgage Loan

DBRS has today assigned a rating of BBB (low), with a Stable trend, to the 5.86% Mortgage Loan due November 1, 2017 (the Mortgage Loan), by a major Canadian financial institution in relation to Bayview Village Apartments, Toronto.

The Mortgage Loan was made on October 30, 2009, with an interest rate of 5.86% per annum, calculated and compounded semi-annually, not in advance, for a term maturing on November 1, 2017, with a 25-year amortization period. The Mortgage Loan had an outstanding balance of $35,090,982 as of September 1, 2013.

The Mortgage Loan is secured by a fee interest in a large-scale multifamily rental complex, including three 19-storey high-rise rental apartment buildings containing a total of 382 residential suites. The complex is situated in the suburban neighbourhood of Bayview Village community on a site of approximately 4.453 acres. It has frontage onto the north side of Sheppard Avenue East and extensive flankage along the east side of Hawksbury Drive.

Based on its own underwriting of the property cash flows, DBRS derived a stabilized net cash flow that is slightly higher than the year-end 2012 net cash flow of High Park Bayview Inc. (the Borrower), representing a derived term DBRS debt service coverage ratio (DSCR) that exceeds 1.30 times. The DSCR is also expected to exceed 1.40 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 the Borrower will refinance in 2017 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 derived term DBRS DSCR and DBRS loan-to-value, along with the location and the condition of the property, collectively support the BBB (low) 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.