DBRS Morningstar Assigns Rating of AA (low), Stable, to BCI QuadReal Realty’s $400 Million 1.073% Series 3 Senior Notes

DBRS Limited (DBRS Morningstar) assigned a rating of AA (low) with a Stable trend to BCI QuadReal Realty’s (BQR or the Issuer) $400 million 1.073% Series 3 Senior Notes due February 4, 2026 (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 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; rated AA (low) with a Stable trend by DBRS Morningstar) 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 because of the equivalency of the two debt instruments. The Senior Notes of BQR are unconditionally guaranteed by Parkpool, a sister fund whose sole trustee is also British Columbia Investment Management Corporation, the sole trustee of BQR, and the guarantee ranks pari passu with all present and future unsecured obligations of Parkpool. In addition, other Property Affiliates with stabilized international real estate assets may, in the future, be designated by BQR as additional guarantors of the debt issued by BQR.

DBRS Morningstar understands that BQR will use the proceeds from the offering and cash on hand to make the Intercompany Loan to BRC, and BRC will use the proceeds of the Intercompany Loan to directly or indirectly repay existing indebtedness of the Issuer.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792.

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

The principal methodologies are Rating Entities in the Real Estate Industry (June 4, 2020), DBRS Morningstar Criteria: Guarantees and Other Forms of Support (January 14, 2021), DBRS Morningstar Criteria: Rating Corporate Holding Companies and Parent/Subsidiary Rating Relationships (November 2, 2020), and DBRS Morningstar Criteria: Commercial Paper Liquidity Support for Nonbank Issuers (March 10, 2020), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

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

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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