DBRS Morningstar Assigns a Rating of BBB (high), Stable, to Choice Properties REIT’s Series Q Senior Unsecured Debentures

DBRS Limited (DBRS Morningstar) assigned a rating of BBB (high) with a Stable trend to Choice Properties Real Estate Investment Trust’s (Choice or the Trust) issuance of $350 million 2.456% Series Q Senior Unsecured Debentures due November 30, 2026 (the Debentures), which are the Trust’s inaugural Green Bonds issued pursuant to its new Green Financing Framework.

The rating listed above is based on the rating on the already-outstanding series of Senior Unsecured Debentures.

The Debentures are direct senior unsecured obligations of Choice, and rank equally and rateably with all other unsecured and unsubordinated indebtedness of the Trust. The Debentures are guaranteed by Choice Properties Limited Partnership (rated BBB (high) with a Stable trend by DBRS Morningstar), Choice Properties GP Inc., and any other wholly owned subsidiaries of Choice.

DBRS Morningstar understands that Choice intends to allocate the net proceeds of the offering of the Debentures (the Offering) to fund the financing and/or refinancing of eligible green projects (Eligible Green Projects) as described in the Trust’s November 2021 Green Financing Framework. Prior to the allocation of the net proceeds of the Offering to Eligible Green Projects, Choice intends to use the net proceeds of the Offering (1) to repay existing indebtedness, including the early redemption of the $300 million principal amount of the Trust’s 3.01% Series I Senior Unsecured Debentures on December 10, 2021, and (2) to repay all or a portion of the balance drawn on its credit facility.

Although Choice intends to allocate an amount equal to the net proceeds of the Offering as described herein, it will not be an Event of Default under the trust indenture governing the Debentures if the Trust fails to do so.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

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

The principal methodologies are Rating Entities in the Real Estate Industry (April 23, 2021; https://www.dbrsmorningstar.com/research/377358) and DBRS Morningstar Criteria: Guarantees and Other Forms of Support (May 31, 2021; https://www.dbrsmorningstar.com/research/379424), which can be found on dbrsmorningstar.com under Methodologies & Criteria. Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (February 3, 2021; https://www.dbrsmorningstar.com/research/373262).

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

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

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