Morningstar DBRS Assigns Rating of AA (low), Stable, to BCI QuadReal Realty's $350 Million 3.281% Series 7 Senior Notes

DBRS Limited (Morningstar DBRS) assigned a rating of AA (low) with a Stable trend to BCI QuadReal Realty's (BQR or the Issuer) $350 million 3.281% Series 7 Senior Notes, Due March 14, 2028 (the Senior Notes). 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 Senior Notes are direct senior secured obligations of BQR and rank ahead of any unsecured and unsubordinated indebtedness of the Issuer. The Senior Notes are secured by back-to-back Intercompany Loans to bcIMC Realty Corporation (BRC) that contain essentially the same terms and conditions as the Senior Notes, which allows the Senior Notes to carry the same AA (low) rating as BRC's medium term notes due to the equivalency of the two debt instruments.

Morningstar DBRS understands that the Senior Notes are issued as Green Bonds under BQR's Green Bond Framework. As such, the Issuer intends to use the proceeds from the issue of the Senior Notes and cash on hand to make an Intercompany Loan to BRC, and BRC will use the proceeds of the Intercompany Loan to finance or refinance, in whole or in part, expenditures associated with Eligible Green Projects under the Green Bond Framework. Although the Issuer intends to use the net proceeds of this offering as described herein, it will not be an Event of Default under the Trust Indenture if the Issuer fails to comply with such obligations.

Please refer to the most recent Morningstar DBRS press release on BQR dated May 3, 2024 (https://dbrs.morningstar.com/research/432340) for more information, including all relevant disclosures.

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 BQR, the BRA factors were considered in the order of importance contemplated in the methodology.

B) Weighting of FRA Factors
In the analysis of BQR, 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 BQR, 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 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 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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