Morningstar DBRS Confirms Credit Rating on Mortgage Loan Made to South Block (Concert) Ltd. and Jawl Precinct Lands Corporation - 525 Superior Street

DBRS Limited (Morningstar DBRS) confirmed its credit rating on the following mortgage loan made to South Block (Concert) Ltd. and Jawl Precinct Lands Corporation - 525 Superior Street (collectively, the Borrowers) by a major Canadian financial institution:

-- Mortgage Loan No. 814650.1 at AA (high)

The trend is Stable.

The credit rating confirmation reflects the overall stable performance of the transaction, which remains in line with Morningstar DBRS' expectations.

The transaction is a credit tenant lease transaction whereby the credit rating on the tenant serves as the basis for the credit rating on the notes. The loan is secured by a 2017 vintage office building at 525 Superior Street in Victoria, British Columbia. Morningstar DBRS' current credit rating on the mortgage loan reflects the rating on the credit tenant, the Government of the Province of British Columbia (the Tenant; rated AA (high) with a Stable trend by Morningstar DBRS), which occupies 99% of the total net rentable area and has a lease that is co-terminus with the fully amortizing loan term with no rights to early termination. The net cash flow from the Tenant's lease is sufficient to cover the Borrowers' financial obligations with respect to the mortgage loan. Morningstar DBRS expects any change to its credit rating on the Tenant during the loan term to have an effect on the credit rating on the mortgage loan.

Morningstar DBRS' credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transactions' respective press releases at issuance.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS 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 Morningstar DBRS 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, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factors 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 -Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (August 13, 2024; https://dbrs.morningstar.com/research/437781).

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

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

The principal methodology is North American CMBS Surveillance Methodology (March 1, 2024; https://dbrs.morningstar.com/research/428798).

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 info-DBRS@morningstar.com.

The credit rating was not initiated at the request of the rated entity. The credit rating was initiated at the request of a third party.

The rated entity or its related entities did not 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
DBRS Tower, 181 University Avenue, Suite 700
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.

-- Global Methodology for Rating Credit Tenant Leases (July 11, 2024), https://dbrs.morningstar.com/research/435975
-- Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria (September 19, 2024), https://dbrs.morningstar.com/research/439702
-- North American Commercial Mortgage Servicer Rankings (August 23, 2024), https://dbrs.morningstar.com/research/384040
-- Legal and Derivatives Criteria for Canadian Structured Finance (August 12, 2024), https://dbrs.morningstar.com/research/437761

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 https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.