DBRS Confirms Ratings of Calloway REIT (Barrie) Inc. – Barrie South Smart Centre Mortgage Loans

DBRS has today confirmed the ratings on the 7.500% Mortgage Loan due March 1, 2018 (Mortgage Loan 1), and the 4.415% Mortgage Loan due March 1, 2018 (Mortgage Loan 2; together with Mortgage Loan 1, the Mortgage Loans), at A (high). The Mortgage Loans were made by a major Canadian financial institution (the Lender) in relation to the Barrie South Smart Centre (the Subject Property) located at the intersection of Highway 400 and Mapleview Drive in Barrie, Ontario.

Mortgage Loan 1 was initially made in July 2005, subject to an interest rate of 7.500% per annum, calculated monthly and compounded semi-annually, not in advance, for a term maturing on March 1, 2018. Mortgage Loan 2 was advanced on November 1, 2010, with an interest rate of 4.415% per annum, calculated monthly and compounded semi-annually, not in advance, for a term maturing on March 1, 2018, with a 25-year amortization period. Mortgage Loan 1 and Mortgage Loan 2 had an outstanding balance of $8.0 million and $20.1 million, respectively, as of July 1, 2014. The Mortgage Loans are secured by a fee interest in Barrie South Smart Centre (the Subject Property). At maturity, the outstanding balance under the Mortgage Loans will have amortized by more than 20%. Based on a January 2011 valuation by a reputable appraiser, the going-in loan-to-value of the property is around 41%.

The Mortgage Loans are secured by a fee interest in the Subject Property, which is anchored by Wal-Mart, Sobeys, Winners, La-Z-Boy, Michaels and PetSmart, for a total area of 374,641 square feet.

The financial performance of the Subject Property, in line with DBRS’s original underwriting, the derived DBRS term DSCR above 1.6 times and the amortization collectively support the A (high) ratings.

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 methodologies are CMBS North American Surveillance Methodology and CMBS Rating Methodology, which can be found on our website under Methodologies.