DBRS Morningstar Assigns Provisional Rating of AAA to British Columbia Investment Management Corporation’s Medium-Term Notes

DBRS Limited (DBRS Morningstar) assigned a provisional rating of AAA with a Stable trend to the Medium-Term Notes (the MTNs) to be issued from time to time by British Columbia Investment Management Corporation (BCI or the Issuer).

Debtholders under the MTN program will have recourse to all of BCI’s pooled investment portfolios, excluding pooled real estate and real estate debt investments managed by BCI's wholly owned real estate arm, QuadReal Property Group Limited Partnership and QuadReal Finance LP (the Combined Funds or Recourse AUM). In addition to pooled real estate and real estate debt investments, assets under management held outside of the pooled investment portfolios are also excluded from the Recourse AUM. All Combined Funds will be backing the recourse debt even if the proceeds of such debt are not used by all the Combined Funds. BCI maintains access and control over the assets in all of its pooled investment portfolios, including to facilitate meeting funding obligations.

Certain provisions contained in the funds management agreement with each client restricts the ability of a client to withdraw its funds until such client's existing investment commitments and obligations in respect of the funds are satisfied. In other words, should a client request to withdraw funds, the funds management agreement authorizes BCI to withhold amounts necessary to satisfy such clients' investment commitments and obligations, including the MTNs.

The MTNs will be direct senior unsecured obligations of BCI in its capacity as Issuer (in respect of the assets of the Combined Funds which it holds in trust) and will rank equally and rateably with all other present and future unsecured and unsubordinated indebtedness of the Issuer, rank junior to any present and future secured indebtedness of the Issuer to the extent of the value of the assets securing such obligations, rank senior to all future subordinated unsecured indebtedness of the Issuer, and be structurally subordinated to any existing and future obligations and other liabilities of any subsidiaries of any of the Combined Funds.

Recourse could be available only if BCI defaulted on its obligations in respect of such debt and such default was not cured within any applicable grace period. Limitations, with respect to total recourse leverage, will provide a limit to the amount of recourse debt that can be outstanding relative to BCI's Combined Funds.

DBRS Morningstar’s credit rating on the MTNs addresses the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are interest and principal amounts.

DBRS Morningstar’s credit rating does not address non-payment risk associated with contractual payment obligations contemplated in the applicable transaction document(s) that are not financial obligations.

DBRS Morningstar’s long-term credit ratings provide opinions on risk of default. DBRS Morningstar considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. The DBRS Morningstar short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance (ESG) factors that had a significant or relevant effect on the credit analysis.

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/416784 (July 4, 2023).

Notes:
The principal methodology applicable to the credit rating is Rating Canadian Public Pension Funds & Related Exclusive Asset Managers (April 27, 2023; https://www.dbrsmorningstar.com/research/413011).

Other methodologies referenced in this transaction are listed at the end of this press release.

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 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 credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

DBRS Morningstar had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

DBRS Limited
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The credit rating methodologies used in the analysis of this transaction can be found at: https://www.dbrsmorningstar.com/about/methodologies.

A description of how DBRS Morningstar analyzes structured finance transactions and how the methodologies are collectively applied can be found at: https://www.dbrsmorningstar.com/research/410863.

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