The following is a press release from Standard & Poor's:
(Editor's note: The presale has been amended from the original draft dated
Oct. 5, 2007.)
TORONTO (Standard & Poor's) Oct. 26, 2007--Standard & Poor's Ratings Services
today assigned its preliminary 'AAA' senior secured debt rating to Royal Office
Finance LP's C$1.23 billion senior secured amortizing bonds due October 2032.
Final ratings will be issued on receipt and satisfactory review of all final
transaction documentation, including legal opinions. Accordingly, the
preliminary rating should not be construed as evidence of final ratings. If
Standard & Poor's Ratings Services does not receive final documentation within a
reasonable timeframe, or if documentation departs from materials reviewed,
Standard & Poor's reserves the right to withdraw or change its rating.
The preliminary 'AAA' rating assigned to the issue of senior secured bonds by
Royal Office Finance LP (ROFLP) reflects the creditworthiness of Public Works
and Government Services Canada (PWGSC) and the federal government; the certainty
of a rent stream fixed for 25 years; triple net leases with limited setoff and
termination rights; bankruptcy-remote sole-purpose special purpose entities (
SPEs) established for the transaction; and a minimum 1x debt service cover
through the 25-year term. These strengths are somewhat counterbalanced by the
risk associated with refinancing C$425 million at term-end; and a minor amount
of appropriation risk.
The bonds are secured by an absolute assignment of rent payments from PWGSC, a
ministry of the federal government. Canadian Leaseback LP (CLLP) and ROFLP are
formed by Larco Investments Ltd. PWGSC is the ministry of the federal government
responsible for providing support to federal ministries and agencies by
purchasing goods and services and providing office accommodation and technology
services. Larco is a successful privately-owned real estate operator and
developer based in British Columbia.
Ratings List Ratings Assigned Royal Office Finance LP C$1.23 Billion Senior
Secured Amortizing Bonds AAA/Stable (prelim)
Complete ratings information is available to subscribers of RatingsDirect, the
real-time Web-based source for Standard & Poor's credit ratings, research, and
risk analysis, at www.ratingsdirect.com. All ratings affected by this rating
action can be found on Standard & Poor's public Web site at
www.standardandpoors.com; select your preferred country or region, then Ratings
in the left navigation bar, followed by Credit Ratings Search.
Primary Credit Analyst: Stephen Ogilvie, Toronto (1) 416-507-2524;
stephen_ogilvie@standardandpoors.com Secondary Credit Analyst:
Christian Green, CFA, Toronto (1) 416-507-2588;
christian_green@standardandpoors.com
(END) Dow Jones Newswires
10-26-07 1818ET
Copyright (c) 2007 Dow Jones & Company, Inc.
