DBRS downgrades Morguard

DBRS said it downgraded the issuer and senior unsecured debenture ratings of Morguard Corp. to BB (high) and changed the trend to stable. The recovery rating of the senior unsecured debentures is RR4.

“The downgrades are largely the result of sustained deterioration in the company’s financial risk metrics, most notably leverage as measured by total debt to EBITDA of 11.9 times (x) for the last 12 months ended Dec. 31, 2021, and DBRS Morningstar's expectation that such deterioration will persist for the foreseeable future. No doubt contributing to higher leverage is the difficult operating environment resulting from the coronavirus disease (Covid-19) pandemic, most acutely in Morguard's hotel portfolio, which was expanded pursuant to its privatization of Temple Hotels Inc. on Feb. 18, 2020,” the agency said in a press release.

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