DBRS Confirms Rating on Dundee Properties Limited Partnership - Enbridge Place Mortgage Loan

DBRS has today confirmed the rating of BBB with a Stable trend on 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 $55,071,818 as of May 1, 2014.

The Mortgage Loan is secured by a fee interest in a two-storey podium with a 22-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.

The BBB rating confirmation takes into consideration the updated rent roll and financial information. The income and expenses are consistent with the expectations of the initial rating. Based on the underwriting of the property cash flows, DBRS derived a stabilized NCF for the property, which translates to term and refinance debt service coverage ratios, each of which is greater than one. DBRS considers the loan per square foot to be reasonable and a stabilizing factor. DBRS also considers the investment grade main tenant and their lease term expiry date well beyond the loan maturity date an additional stabilizing factor.

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

The full report providing additional analytical detail is available by clicking on the link under Related Research at the right of the screen or by contacting us at info@dbrs.com.