DBRS Confirms Bow Centre Street Limited Partnership Ratings at “A,” Changes Trends to Negative

DBRS Limited (DBRS) has today confirmed the ratings of the Series A, Series B and Series C Secured Bonds (the Bonds) of Bow Centre Street Limited Partnership (the Issuer) secured by the Bow (the Property) at “A” and changed its trends to Negative from Stable. The change in trends follows DBRS’s downgrade of Encana Corporation’s (Encana or the Company) ratings to BBB (low) while it maintains the Company’s trends at Negative (see DBRS press release dated July 15, 2016).

In its previous report dated June 28, 2016, DBRS did not expect a one-notch downgrade of Encana’s ratings to have any credit implications for the Bonds, but noted that, if Encana’s ratings fell into non-investment grade territory, a negative rating action would occur. DBRS has changed the trend on the Bonds to Negative from Stable, reflecting the likelihood of additional ratings pressure for Encana.

Should DBRS downgrade Encana’s Issuer Rating to BB (high) from BBB (low), DBRS would also downgrade the Bonds’ ratings to A (low) from “A.” Any additional deterioration in Encana’s credit risk profile would result in at least the same magnitude of decline for the Bonds’ ratings. If Encana’s Negative trend returns to Stable, DBRS may consider revising the Bonds’ trends back to Stable.

The Bow is a Class AA office building located in the central business district of downtown Calgary with a total leasable area of approximately two million square feet and is Encana’s head office. Encana’s head lease accounts for 100% of the Property’s total space and its term extends well beyond the Bonds’ term.

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 methodology is Rating Entities in the Real Estate Industry (June 2016), which can be found on our website under Methodologies.

The full report providing additional analytical detail is available by clicking on the link below or by contacting us at info@dbrs.com.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.