Teranet Holdings LP

That said, S&P Global Ratings expects Ontario registration volumes to be lower by 8%-12% for the full year 2020 as compared to 2019. Because of this, in 2020 the company's key financial measure--funds from operations (FFO) interest coverage--will likely fall below our rating downgrade trigger of 1.75x but should remain above the threshold on a rolling five-year basis. Furthermore, the company has taken a proactive approach to protecting its liquidity through this period of economic stress, including a temporary suspension of distributions. A 12 month debt service reserve account provides additional protection to bond holders. Furthermore, VAS revenues, which are primarily subscription- and licensing fee-based, have low exposure to market fundamentals, adding another layer of stability to the consolidated cash

...Ontario and Manitoba real estate markets are facing a COVID-19 induced slowdown, which will continue for the remainder of 2020 tempered only by modest recovery. Measures to contain COVID-19 led to a slowdown in the Ontario and Manitoba real estate markets. The slowdown effect was most magnified from March to May of 2020, which weakened registration volumes for Teranet, leading to a decline in its revenues. Because Teranet's revenues are received at the time of transaction closing, which typically is delayed by 60-90 days after contracts are initially signed, we believe the greatest impact of slowdown will be seen in the company's third quarter financial performance. Prior to that, Teranet's markets were showing solid recovery from a slowdown in 2018 that followed several policy level changes designed to cool off an overheated real estate market. Beginning in June of this year, and continuing into the third quarter, there are signs of a modest recovery. While some of the jump in volumes...

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