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

DBRS Limited (DBRS) has today confirmed the ratings on the 7.50% 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 Hwy. 400 and Mapleview Drive in Barrie, Ontario.

This rating reflects DBRS’s opinion on the first-dollar loss that may be experienced by the Lender with respect to the interest and principal payment obligations of the Borrower in relation to the Mortgage Loans solely based on the cash flows (not necessarily considering the timing of those cash flows) generated by the Subject Property as well as on the current and/or future value of such property.

DBRS assigns these ratings by applying its long-term obligations rating scale.

Mortgage Loan 1 was initially advanced in July 2005, subject to an interest rate of 7.500% per annum (p.a.), 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% p.a., 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 $7.3 million and $19.5 million, respectively, as of July 1, 2015.

The Mortgage Loans are secured by a fee interest in the Subject Property, which is anchored by Walmart, Sobeys, Winners, La-Z-Boy and PetSmart, for a total area of 407,845 square feet.

The financial performance of the Subject Property, in line with DBRS’s original underwriting, the derived DBRS term debt service coverage ratio 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.

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.