OREANDA-NEWS. S&P Global Ratings today affirmed its 'A - (sf)' credit rating on Debussy DTC PLC's class A notes.

Today's affirmation follows our review of the credit quality of the transaction under our European commercial mortgage-backed securities (CMBS) criteria (see "European CMBS Methodology And Assumptions," published on Nov. 7, 2012).

Debussy DTC is backed by a fixed-rate interest-only loan secured on a portfolio of 30 retail stores and one distribution warehouse in the U. K. Toys "R" Us Properties (UK) owns the properties and lets them to Toys "R" Us Ltd. on 30-year leases. Toys "R" Us Ltd. is the main U. K. operating company of Toys"R" Us Inc.

The seven-year loan is divided into three tranches, which match each of the issued notes--including the unrated class B and C notes. The three classes of notes pay fixed-rate interest. The borrower pays a facility fee, which covers the senior fees due from the issuer. The loan matures in July 2020 and the notes' legal maturity is in July 2025.

The properties in the portfolio are each leased on an identical full repairingand insuring lease and the current weighted-average remaining lease term is 19.88 years. The assets are primarily standalone detached stores built for Toys "R" Us. They range in size from 24,785 sq ft to 49,771 sq ft, and the average store size is 40,130 sq ft.

The current portfolio annual rental income is ?24.2 million, up from ?23.0 million at closing. Rents are index-linked to the retail price index (RPI), subject to a minimum annual increase of 1.0% and a maximum of 2.5%. CBRE revalued the portfolio at ?362.57 million in April 2016, which is higher than its valuation at closing. The whole loan's loan-to-value (LTV) ratio has decreased to 72.58% from 83.50% at closing.

RATING RATIONALE

Our rating in this transaction addresses the timely payment of interest, payable quarterly in arrears, and payment of principal not later than the legal final maturity date in July 2025.

Following our review of the performance of the remaining loan, we consider that the available credit enhancement for the class A notes is sufficient to mitigate the risk of losses from the underlying loan at the currently assignedrating. We have therefore affirmed our 'A - (sf)' rating on the class A notes.