DBRS Confirms Fifth Avenue Place Bonds at “A,” Trend Remains Negative

DBRS Limited (DBRS) has today confirmed the rating on the First Mortgage Bonds (the Bonds) of Fifth Avenue LP & ARI 5AP Investment LP (ARI 5AP; formerly 1023803 Alberta Ltd.) at “A.” The trend remains Negative. The confirmation reflects a review of information provided to DBRS regarding 1023803 Alberta Ltd.’s transfer of its 50% interest in Fifth Avenue Place (FAP or the Complex) to a newly formed entity, ARI 5AP Investments LP (the Transaction).

ARI 5AP and its general partner are organized as special-purpose entities for the limited purpose of jointly owning, operating and maintaining the Complex (with Fifth Avenue LP). ARI 5AP is managed by Alberta Investment Management Corporation on behalf of certain Government of Alberta funds and endowments and certain Alberta public sector pension plans.

DBRS has reviewed the documents executed in connection with the Transaction, including the external legal opinions issued with respect to the Transaction, and confirms that the Transaction has met the conditions to transfer an interest in the Complex to an approved transferee under the terms of the Trust Indenture dated August 11, 2011. Accordingly, DBRS confirms that ARI 5AP has assumed all the rights and obligations of 1023803 related to the Trust Indenture, the security, the mortgage and such other transaction documents related to jointly owning the Complex.

On June 26, 2015, DBRS confirmed the rating on the Bonds of Fifth Avenue LP & ARI 5AP secured by FAP at “A” and changed its trend to Negative from Stable. The Negative trend reflects DBRS’s concern that it will now take longer for the property manager to re-lease the pending vacant space (currently occupied by Imperial Oil) to new tenants in this more challenging office environment and that the economics of any new tenant leases will likely be less favourable to the Complex than those under Imperial Oil’s current leases.

Notes:
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 methodology is Rating Entities in the Real Estate Industry, which can be found on our website under Methodologies.

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.