Morningstar DBRS Confirms CBC Monetization Trust at AAA (sf)

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

The confirmation is part of Morningstar DBRS’ 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; the CBC Guarantee) 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 His 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 continue until the maturity date of May 15, 2027. The initial issuance size was $135.7 million, which amortized to $36.6 million as at December 2023.

ENVIRONMENTAL, SOCIAL, AND 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 Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://dbrs.morningstar.com/research/416784 (July 4, 2023).

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

The principal methodology applicable to the credit rating is the Master Canadian Structured Finance Surveillance Methodology (June 7, 2023; https://dbrs.morningstar.com/research/415503).

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

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.

Morningstar DBRS 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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Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

-- North American Structured Finance Flow-Through Ratings (November 13, 2023; https://dbrs.morningstar.com/research/423240)

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

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