DBRS Morningstar Assigns Credit Rating of BBB (high) with Stable Trend to Granite REIT Holdings Limited Partnership’s Series 7 Senior Unsecured Debentures

DBRS Limited (DBRS Morningstar) assigned a rating of BBB (high) with a Stable trend to Granite REIT Holdings Limited Partnership’s (Granite) $400 million 6.074% Series 7 Senior Unsecured Debentures due April 12, 2029 (the Series 7 Debentures). The assigned rating is based on the rating of the already-outstanding series of Senior Unsecured Debentures.

The Series 7 Debentures are direct senior unsecured obligations of Granite and rank equally and rateably in right of payment with one another and with all other unsecured and unsubordinated indebtedness of Granite, senior in right of payment to any future indebtedness of Granite that is expressly subordinated to the Series 7 Debentures, effectively junior to any existing and future indebtedness of Granite that is secured and structurally junior to any existing and future indebtedness and other liabilities of any subsidiary of Granite that is not a guarantor.

The Series 7 Debentures are fully and unconditionally guaranteed, on a joint and several basis, by Granite Real Estate Investment Trust and Granite REIT Inc. and by any subsidiary of Granite that in the future becomes a guarantor under the Credit Agreement.

The Series 7 Debentures are being issued as Green Bonds under Granite’s Green Bond Framework. DBRS Morningstar understands that Granite intends to finance or refinance, in whole or in part, expenditures in an amount equal to the net proceeds from the offering associated with Eligible Green Projects as described in the Granite Green Bond Framework. Although Granite intends to use an amount equal to the net proceeds of this offering as described herein, it will not be an Event of Default under the Series 7 Debentures Indenture if Granite fails to comply with such obligations.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factor(s) 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:
All figures are in Canadian dollars unless otherwise noted.

DBRS Morningstar applied the following principal methodology:
-- Global Methodology for Rating Entities in the Real Estate Industry (April 11, 2023; https://www.dbrsmorningstar.com/research/412477)
-- DBRS Morningstar Global Criteria: Guarantees and Other Forms of Support (March 28, 2023; https://www.dbrsmorningstar.com/research/411694)

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 corporate finance transactions and how the methodologies are collectively applied can be found at: https://www.dbrsmorningstar.com/research/397223.

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

Information regarding DBRS Morningstar credit ratings, including definitions, policies, and methodologies, is available on www.dbrsmorningstar.com or contact us at [email protected].

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