DBRS Confirms Ratings of Mint 2015 Plc

DBRS Ratings Limited (DBRS) has today confirmed the ratings of the Commercial Real Estate Loan Backed Floating Rate Notes (the Notes) due February 2025 issued by Mint 2015 Plc as follows:

-- Class GBP-A rated AAA (sf)
-- Class GBP-B rated AA (low) (sf)
-- Class GBP-C rated A (low) (sf)
-- Class GBP-D rated BBB (low) (sf)
-- Class GBP-E rated BB (low) (sf)
-- Class GBP-F rated B (high) (sf)

-- Class EUR-A rated AAA (sf)
-- Class EUR-B rated AA (high) (sf)
-- Class EUR-C rated A (low) (sf)
-- Class EUR-D rated BBB (low) (sf)
-- Class EUR-E rated BB (high) (sf)

The trends are Stable.

The rating confirmations reflect the stable performance of the transaction since issuance. The collateral comprises two interest-only loans denominated in GBP Sterling and in euros with current balances of GBP 251.1 million and EUR 131.0 million respectively. The GBP loan is secured by two hotels in London, namely DoubleTree by Hilton – Tower of London and Westminster and the Euro loan is secured by one hotel in Amsterdam, namely DoubleTree by Hilton – Amsterdam Centraal Station.

All three hotels have been performing within DBRS’s expectations since issuance. As of May 2016, the aggregate trailing 12-month Net Operating Income (NOI) of the London hotels was reported to be GBP 26.5 million, of which more than half is from the Tower of London hotel. Together, this represents a slight 0.5% increase in NOI since issuance. The highest growth in NOI has been observed in the Amsterdam hotel, which increased 16.0% since issuance. The reported NOI increased from EUR 16.8 million at cut-off to EUR 19.4 million as of the tailing 12-month period ending May 2016. Consequently, the reported Interest Covering Ratio (ICR) has improved to 2.05x.

Pursuant the Senior Facility Agreement, a valuation of the portfolio has been commissioned in March 2016. According to the latest surveyor’s report, the market values of the three hotels with management contract have increased by 6.4% to GBP 475.1 million for London hotels and by 26.1% to EUR 293.7 million for Amsterdam hotel. As a result, the reported Loan-To-Value (LTV) ratio for the portfolio has gone down to 48.4%.

The sponsor of the securitisation, Blackstone Group L.P., has laid out its business plan at issuance, which is to drive average daily rates while maintaining occupancy and to increase food and beverage revenues at the properties. The exit strategy for the portfolio is to sell the hotels independently of each other over the term of the loan. The sale of each of the remaining properties is subject to a 115% release premium.

DBRS continues to monitor this transaction on a quarterly basis.

Notes:

All figures are in British pounds and/or euros as noted.

The principal methodology applicable is: European CMBS Surveillance.

The applicable methodologies are: European CMBS Surveillance, European CMBS Rating Methodology, Legal Criteria for European Structured Finance Transactions, Derivative Criteria for European Structured Finance Transactions and Unified Interest Rate Model for European Securitisations, which can be found on www.dbrs.com under Methodologies.

Other methodologies referenced in this transaction are listed at the end of this press release.

DBRS has applied the principal methodology consistently and conducted a review of the transaction in accordance with the principal methodology.

A review of the transaction legal documents was not conducted as the documents have remained unchanged since the most recent rating action.

For a more detailed discussion of the sovereign risk impact on Structured Finance ratings, please refer to the DBRS commentary “The Effect of Sovereign Risk on Securitisations in the Euro Area” found at http://www.dbrs.com/industries/bucket/id/10036/name/commentaries.

The sources of information used for this rating include CBRE Loan Services Limited, CBRE Hotels Limited and U.S. Bank Global Corporate Trust Services. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

DBRS was not supplied with third party assessments. However, this did not impact the rating analysis.

DBRS does not rely upon third-party due diligence in order to conduct its analysis.

DBRS does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance.

Information regarding DBRS ratings, including definitions, policies and methodologies, is available on www.dbrs.com.

To assess the impact of changing the transaction parameters on the rating, DBRS considered the following stress scenarios as compared with the parameters used to determine the rating (the Base Case):

A decrease of 10% and 20% in the DBRS net cash flow (NCF), derived by looking at comparable properties, market rents and market occupancies, in addition to expenses ratios, capital expenditures and re-tenanting costs, would lead to the following ratings in the transaction, as noted below for each class respectively:

Class GBP-A Note Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class GBP-A to AAA (sf)
-- 20% decline in DBRS NCF, expected rating of Class GBP-A to AAA (sf)

Class GBP-B Note Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class GBP-B to A (low) (sf)
-- 20% decline in DBRS NCF, expected rating of Class GBP-B to BBB (low) (sf)

Class GBP-C Note Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class GBP-C to BBB (low) (sf)
-- 20% decline in DBRS NCF, expected rating of Class GBP-C to BB (high) (sf)

Class GBP-D Note Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class GBP-D to BB (low) (sf)
-- 20% decline in DBRS NCF, expected rating of Class GBP-D to B (low) (sf)

Class GBP-E Note Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class GBP-E to B (low) (sf)
-- 20% decline in DBRS NCF, expected rating of Class GBP-E to NR

Class GBP-F Note Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class GBP-F to NR
-- 20% decline in DBRS NCF, expected rating of Class GBP-F to NR

Class EUR-A Note Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class EUR-A to AAA (sf)
-- 20% decline in DBRS NCF, expected rating of Class EUR-A to AAA (sf)

Class EUR-B Note Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class EUR-B to AA (high) (sf)
-- 20% decline in DBRS NCF, expected rating of Class EUR-B to A (high) (sf)

Class EUR-C Note Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class EUR-C to BBB (low) (sf)
-- 20% decline in DBRS NCF, expected rating of Class EUR-C to BB (high) (sf)

Class EUR-D Note Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class EUR-D to BB (sf)
-- 20% decline in DBRS NCF, expected rating of Class EUR-D to B (sf)

Class EUR-E Note Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class EUR-E to BB (low) (sf)
-- 20% decline in DBRS NCF, expected rating of Class EUR-E to B (low) (sf)

For further information on DBRS historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml.

Ratings assigned by DBRS Ratings Limited are subject to EU regulations only.

Initial Lead Analyst: Scott Goedken, Senior Vice President
Initial Rating Date: 29 May 2015
Initial Rating Committee Chair: Erin Stafford, Managing Director

Lead Surveillance Analyst: Rick Shi, Senior Financial Analyst
Rating Committee Chair: Erin Stafford, Managing Director

DBRS Ratings Limited
20 Fenchurch Street, 31st Floor, London EC3M 3BY
United Kingdom

The rating methodologies used in the analysis of this transaction can be found at http://www.dbrs.com/about/methodologies:
-- European CMBS Rating Methodology
-- European CMBS Surveillance
-- Legal Criteria for European Structured Finance Transactions
-- Unified Interest Rate Model for European Securitisations

A description of how DBRS analyses structured finance transactions and how the methodologies are collectively applied can be found at http://www.dbrs.com/research/278375.