DBRS Confirms Ratings of 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) to Calloway REIT (Barrie) Inc. (the Borrower) and are secured by a fee interest in Barrie South Smart Centre (the Subject Property).

These ratings reflect DBRS’s opinion on the first-dollar loss that the Lender may experience regarding the Borrower’s interest and principal payment obligations in respect of 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 confirmed 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 $6.6 million and $18.9 million, respectively, as of July 1, 2016.

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 407,600 square feet.

The financial performance of the Subject Property which is in line with DBRS’s original underwriting, the derived DBRS term debt service coverage ratio above 1.7 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 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.

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.

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