DBRS Rates CFI Trust Series 2006-1 Notes at R-1 (middle)

Dominion Bond Rating Service (DBRS) has today assigned the rating of R-1 (middle) to the Series 2006-1 ECP Notes (the Notes) of CFI Trust (the Trust).

The Notes are secured by a pool of loans made by the Trust to housing providers (Borrowers) under the Social Housing Reform Act, 2000 (the Act); the loans are guaranteed by the Ontario Power Authority (the OPA). The rating assigned to the Notes has been influenced by the following factors:

(1) Borrowers represent qualified housing providers under the Act, with proceeds of loans used as part of an Ontario provincial program to increase energy efficiency.

(2) Payments due from Borrowers are supported by a 100% guarantee of the principal amount of the Notes (up to $6.7 million) provided by the OPA, rated AA (low) by DBRS.

(3) A reserve of three months’ estimated principal and interest on the loan is held back from the initial advance.

(4) Strong incentive for CFI Leasing Limited, the administrator of the Trust and servicer of the portfolio of loans, to service the portfolio of loans prudently because the noteholders, representing 25% of the outstanding Notes, can cause the indenture trustee to remove CFI Leasing Limited as servicer.

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