DBRS Morningstar Confirms AAA (sf) Rating of CBC Monetization Trust

DBRS Limited (DBRS Morningstar) confirmed the AAA (sf) rating on the CBC Monetization Trust Notes (the Notes) issued by CBC Monetization Trust (the Trust).

The confirmation is part of DBRS Morningstar’s continued effort to provide timely credit rating opinions and increased transparency to market participants and is based on the following considerations:

(1) The unconditional and irrevocable guarantee by Canadian Broadcasting Corporation (CBC) of full and timely payments due to the Trust under the receivables.

(2) The Support Agreement whereby CBC agreed to support the Trust for all operating costs and any tax liabilities.

(3) The status of CBC as an Agent of Her Majesty in Right of Canada means that CBC’s obligations under the CBC Guarantee and Support Agreement carry the full faith and credit of the Crown.

The Trust is a special-purpose vehicle established under the laws of the Province of Ontario pursuant to a Declaration of Trust. The Trust was established on December 23, 2009, to monetize four receivables related to previous sales and leases entered into by CBC, with respect to four parcels of land adjacent to the CBC Broadcasting Centre in downtown Toronto. The Notes pay a blend of principal and interest on a semiannual basis in arrears, which commenced May 15, 2010, and continues until the maturity date of May 15, 2027. The initial issuance size was $135.7 million, which amortized to $63.6 million as at December 2020.

DBRS Morningstar initially published its outlook on the Coronavirus Disease (COVID-19) pandemic’s impact on key economic indicators for the 2020–22 time frame in April 2020. DBRS Morningstar last updated the macroeconomic scenarios on December 2, 2020, in its “Global Macroeconomic Scenarios: December Update” at https://www.dbrsmorningstar.com/research/370672. Coronavirus-related analytical considerations for the moderate macroeconomic scenario published on December 2, 2020, were incorporated in the assessment of the credit quality of the CBC Guarantee and Support Agreement. DBRS Morningstar will continue to monitor the credit quality.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology is Master Canadian Structured Finance Surveillance Methodology (August 31, 2020), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

For more information regarding structured finance rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308.

For more information regarding the structured finance rating approach and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/359905.

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 [email protected].

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

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].

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