DBRS Confirms Ratings of Merrill Lynch Financial Assets Inc., Series 2003-Canada 10

DBRS Limited (DBRS) has today confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2003-Canada 10 (the Certificates) issued by Merrill Lynch Financial Assets Inc., Series 2003-Canada 10:

-- Class XC-1 at AAA (sf)
-- Class XC-2 at AAA (sf)

All trends are Stable.

The rating confirmations on the interest-only certificates address the likelihood of receiving interest based on the notional amount outstanding. DBRS considers the interest-only certificate’s position within the transaction payment waterfall when determining the appropriate rating. There is one loan remaining in the trust with a current balance of $4.3 million. The loan exhibits strong credit metrics with a loan-to-value ratio of 30.1% and a current debt yield of 29.8%.

The remaining loan in the pool (Prospectus ID#16) is secured by a flex industrial/office property in the Foothills Industrial Park of Calgary. The loan is scheduled to mature on July 1, 2016, and is 97.3% occupied, according to the December 2014 rent roll. Combined, the two largest tenants occupy over 90.0% of the net rentable area, and their respective leases expire beyond loan maturity. The YE2014 DSCR was reported at 1.31 times (x), an increase compared with the YE2013 DSCR of 1.24x. This loan benefits from full recourse to its respective sponsor, H&R Real Estate Investment Trust, which DBRS rates at BBB (high) with a Stable trend.

For additional detail on the DBRS viewpoint for this transaction, and for details on the remaining loan in the pool, please see the April 2016 Monthly CMBS Surveillance Report for this transaction, which will be published shortly.

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.

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

The applicable methodologies are North American CMBS Rating Methodology (March 2016) and CMBS North American Surveillance (December 2015), which can be found on our website under Methodologies.

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