Morningstar DBRS Assigns Credit Rating of BBB (high) With Stable Trend to Granite REIT Holdings Limited Partnership's Series 10 Senior Unsecured Debentures

DBRS Limited (Morningstar DBRS) assigned a credit rating of BBB (high) with a Stable trend to Granite REIT Holdings Limited Partnership's (Granite) $300 million Floating Rate Series 10 Senior Debentures due December 11, 2026 (the Series 10 Debentures): The rating assigned to this newly issued debt instrument is based on the rating of an already-outstanding debt series of the above-mentioned debt instrument.

The Series 10 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 10 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 10 Debentures are fully and unconditionally guaranteed, on a joint and several basis, by Granite Real Estate Investment Trust and Granite REIT Inc. (Granite GP) and by any subsidiary of Granite that in the future becomes a guarantor under the Credit Agreement.

Morningstar DBRS also understands that the net proceeds of the Series 10 Debentures will be used to prepay the December 2026 Term Loan in full and for general corporate purposes. Prior to such use, the net proceeds may be initially used, in part or in full, for investments in bank deposits or other cash equivalents, in each case in accordance with Granite's internal liquidity management policies.

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 Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (August 13, 2024) at https://dbrs.morningstar.com/research/437781.

BUSINESS RISK ASSESSMENT (BRA) AND FINANCIAL RISK ASSESSMENT (FRA)

(A) Weighting of BRA Factors
In the analysis of Granite REIT Holdings Limited Partnership, the BRA factors were considered in the order of importance contemplated in the methodology.

(B) Weighting of FRA Factors
In the analysis of Granite REIT Holdings Limited Partnership, the FRA factors were considered in the order of importance contemplated in the methodology.

(C) Weighting of the BRA and the FRA
In the analysis of Granite REIT Holdings Limited Partnership, the BRA carries greater weight than the FRA.

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

Morningstar DBRS applied the following principal methodology:
-- Global Methodology for Rating Entities in the Real Estate Industry (April 15, 2024),
https://dbrs.morningstar.com/research/431170

Morningstar DBRS credit ratings may use of one or more sections of the Morningstar DBRS Global Corporate Criteria (February 3, 2025), https://dbrs.morningstar.com/research/447186, which covers, for example, topics such as holding companies and parent/subsidiary relationships, guarantees, recovery, and common adjustments to financial ratios.

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

A description of how Morningstar DBRS analyzes corporate finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/431153.

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.

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

Information regarding Morningstar DBRS credit ratings, including definitions, policies, and methodologies, is available on https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.

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