DBRS Confirms Trust 600 De La Gauchetière West’s Series A Bonds at A (sf)

DBRS Limited (DBRS) confirmed the rating of the outstanding 7.96% Series A Bonds (the Series A Bonds) issued by Trust 600 De La Gauchetière West (the Trust) at A (sf).

The confirmation is part of DBRS’s continued effort to provide timely credit rating opinions and increased transparency to market participants.

The Trust is a special-purpose vehicle established under the laws of Ontario pursuant to an Amended and Restated Declaration of Trust dated as at February 1, 2000. Pursuant to a 30-year lease (the Long-Term Lease), the Trust leased the National Bank Tower office property located at 600 de la Gauchetière West in Montréal and related amenities (the Property) from National Bank Realty Inc. The Trust subleased its interest in the Property to the National Bank of Canada (the Bank; rated AA (low) with a Stable trend by DBRS) on a triple-net basis for a term of 20 years.

On February 10, 2000, the Trust issued the Series A Bonds and 8.29% Series B Bonds (the Series B Bonds). The Series A Bonds pay a blend of principal and interest on a semi-annual basis until the maturity date of February 10, 2020 (the Maturity Date). The initial issuance size of the Series A Bonds was $97,000,000, and as at YE2017, the Series A Bonds had an outstanding balance of $21,764,731. The Series B Bonds pay interest only until the Maturity Date, at which time the entire principal amount in respect of the Series B Bonds will be paid in a single payment.

The amount of basic rent payable by the Bank under the Bank Lease is sufficient to pay all principal and interest under the Series A Bonds and interest (and principal at maturity) under the Series B Bonds. All additional rent obligations of the Trust under the Long-Term Lease have been passed down to the Bank under the Bank Lease.

The rating of the Series A Bonds is primarily based on the rating of the Bank.

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 under Related Documents or by contacting us at info@dbrs.com.

The principal methodologies are the Master Canadian Structured Finance Surveillance Methodology, Structured Finance Flow-Through Ratings and Legal Criteria for Canadian Structured Finance, which can be found on dbrs.com under Methodologies.

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

For more detailed information on the transaction structure, please refer to the rating report of the Trust at www.dbrs.com.

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