Teranet Holdings L.P.

For the rolling 12 months ended June 30, 2021, Teranet's funds from operations (FFO) to interest coverage was 2.5x and FFO to debt 7.1%, higher than our projections and historical performance. We expect Teranet to outperform our projections for the full year 2021, normalizing in 2022 and 2023. The stable outlook reflects our view that Teranet's operating and financial measures will remain comfortably sufficient for the rating over the next two years. We expect the company will exceed our forecasts for 2021 given robust COVID-19 recovery in the Ontario markets. We expect FFO to interest coverage of about 2.5x in 2021 and 2x in 2022. We could: Lower the rating if, contrary to current market dynamics, transaction volumes start to

...Robust housing market activity in the Greater Toronto Area (GTA) led to a sharp uptick in registration volumes for Teranet, resulting in solid financial performance so far in 2021. After a marked slowdown at the onset of the COVID-19 pandemic, the Ontario housing market started to recover in the middle of 2020 when governments eased restrictions. This shifted the pent-up real estate demand from the spring to late summer and fall of 2020. This trend has continued well into 2021, supported by factors such as low interest rates, increased household savings, and changing needs of homeowners. In 2021, GTA housing market activity picked up significantly, leading to a sharp uptick in Teranet's registration volumes and, by extension, to search and writs volumes. Total registration volumes increased approximately 37% for the six months ended June 30, 2021, compared to the same period last year. Search volumes increased approximately 36% and writs 47% for the same period. By comparison, total registration...

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