DBRS Assigns Provisional Ratings to Westfield Stratford City Finance PLC

DBRS has today assigned provisional ratings to the following class of Commercial Mortgage-Backed Floating-Rate Notes Due August 2024 (the Notes) to be issued by Westfield Stratford City Finance PLC (the Issuer):

-- Class A at AAA (sf)

The trend is Stable.

Westfield Stratford City Finance PLC is a securitisation of a fixed-rate loan made by Westfield Stratford City Finance PLC to the borrower, Stratford City Shopping Centre (No.1) Limited Partnership. The loan sponsors are Westfield Corporation (50%), Algemene Pensioen Groep NV (25%) and the Canada Pension Plan Investment Board (25%). The loan is expected to have an initial securitised balance of £750,000,000 and is going to be hedged with issuer-level interest rate swap.

The purpose of the loan is to provide refinancing of existing indebtedness of the borrower and to provide funding for general corporate purposes of the borrower. The collateral securing this loan consists of a single shopping centre and car parking facility located in Stratford City, England. The property contains 327 tenancies within approximately 1.9 million square feet of leasable area. The property was 98.9% occupied as of 22 April 2014.

The collateral property was valued by CBRE in May of 2014 for £1,955,000,000. DBRS’s stressed value for the property is £1,301,740,085. Utilising this stressed value for the property and the loan’s initial securitised balance of £750,000,000, DBRS calculated a stressed loan-to-value ratio of 57.62%. This compares with a loan-to-value ratio of 38.36% calculated using CBRE’s May 2014 market valuation.

The final legal maturity of the Notes is in August 2024, five years beyond the maturity of the loans. If necessary, this is believed to be sufficient time, given the security structure, jurisdiction of the collateral and governing law of the underlying loans, to enforce on the loan collateral and repay bondholders.

The ratings assigned by DBRS to the Notes are based exclusively on the credit provided by the transaction structure and underlying trust assets. Notes will be subject to ongoing surveillance, which could result in upgrades or downgrades by DBRS after the date of issuance.

Notes:
All figures are in U.K. Pounds Sterling unless otherwise noted.

The principal methodologies applicable are European CMBS Rating Methodology, Legal Criteria for European Structured Finance Transactions, Operational Risk Assessment for European Structured Finance Servicers, Derivative Criteria for European Structured Finance Transactions and Unified Interest Rate Model for European Securitisations, which can be found on www.dbrs.com.

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

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.

Lead Analyst: Mary Jane Potthoff