DBRS Morningstar Confirms Ratings on 41 Manulife/John Hancock First Mortgage Loans

DBRS, Inc. (DBRS Morningstar) confirmed the ratings on 41 loans, as discussed in greater detail below. The rating confirmations generally reflect the overall stable performance of each loan since the last review. All trends are Stable. All loans were made by John Hancock Life Insurance Company, a subsidiary of Manulife Financial Corporation. DBRS Morningstar also discontinued its outstanding rating on the Coliseum Park Apartments as the loan was paid on full. This concludes DBRS Morningstar’s surveillance of that loan.

Thirty-six of the loans are secured by first mortgages on 26 cooperative apartment properties in New York, New Jersey, Connecticut, and Washington, D.C. The AA (sf) ratings on those loans reflect (1) the stability of debt payments provided by the co-operative structure of ownership, in which share-owners are highly incentivized to meet their share of the loan payments to protect their ownership interest in their co-operative; (2) the low loan to value (LTV) ratios; and (3) each property’s strong location within a major metropolitan area.

Three loans are secured by first mortgages on three manufactured housing communities (MHCs; Trails West, Bay Indies, and Colony Cove) in Florida and Arizona. The A (high) (sf) ratings on these loans reflect (1) the expected stability of debt payments given strong operating history and institutional sponsorship, (2) moderate LTV ratios, (3) the strong locations of these properties in well-established communities with a demand for highly amenitized MHCs, and (4) the expected partial amortization that will take place over the remaining term of the loans.

One loan is secured by a first mortgage on an investment-grade office building (The Plaza at Continental Park) in El Segundo, California. The A (high) (sf) rating reflects (1) the expected stability of debt payments, given a strong operating history and institutional-quality sponsorship; (2) a moderate LTV ratio; (3) the property’s strong location in a well-established Los Angeles office submarket; and (4) the expected partial amortization that will take place over the remaining term of the loan.

One loan is secured by a mortgage on the ground lease on an office building (1111 Pennsylvania) in Washington D.C. The A (sf) rating reflects (1) the expected stability of debt payment, given the strong operating history and institutional-quality sponsorship, (2) a moderate LTV ratio, (3) the property’s strong location between the White House and the United States Capitol Building in a highly desirable office submarket, and (4) its historic occupancy by a global law firm, ranked the 10th-largest in the United States, with approximately 10 years remaining on the lease term.

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.

All ratings are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by DBRS Morningstar.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is the North American CMBS Surveillance Methodology (March 4, 2022), which can be found on dbrsmorningstar.com under Methodologies & Criteria. For a list of the structured-finance-related methodologies that may be used during the rating process, please see the DBRS Morningstar Global Structured Finance Related Methodologies document, which can be found on dbrsmorningstar.com in the Commentary tab under Regulatory Affairs. Please note that not every related methodology listed under a principal structured finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.

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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