Presentation to:

Ottawa Real Estate Board

March 12th, 2009

Overview

• Who we are!

•Types of Commercial Properties

• How do we Assess

• Typical Information Requirements

• Current Market Impact

• Questions

2

TD BUSINESS BANKING

DELIVERY CHANNELS:

1. Small Business Banking

* typically loans up to $500M

* can do owner occupied mortgages up to $500M

* serviced through Small Business Advisors in several retail branches

2. Commercial Banking

* loans from $500M - $15MM

* ongoing personal involvement of dedicated Relationship Manager

* clients with greater complexity in banking requirements

* requires more custom solutions

* high requirement for cash management services

* supports financing for commercial investment properties

Commercial Banking

* TD Commercial Banking has one of the largest mid market Commercial Financial Institution presence in the National Capital Region with coverage including the Ottawa Valley and Gatineau/Hull areas. * We feature staff/on site experienced consultants for all of your Credit and Cash Management needs

* Our 9 Relationship Managers average more than 20 years experience with TD with a total of 30 people on staff.

•We maintain an in-house Cash Management group and credit adjudication which helps in providing more local decisions.

* Located at 45 O’Connor St at the World Exchange Plaza

4

Commercial Properties

Owner Occupied (TD Commercial Mortgage Product)

• Operating business which owns and operates from its owned premises, either directly or through a separate holding company

• Typically properties are retail, office, commercial, industrial use

• Assessment of lending is primarily based on the quality of the property and strength/performance of the operating company combined

• Really no limit on level of financing, but based on capacity to repay and LTV

Commercial Properties

Investment Properties (Small Commercial Mortgage Product)

• Borrower which operates a commercial property for investment purposes with tenants

• Can be partially owner occupied, but if greater than 50% then considered investment

• Typical types of properties includes industrial, office, commercial, retail (strip plaza), mixed use (retail/apartment/office)

• Minimum occupancy level of 75% required

• Lending limit for this product is $1.5MM

How do we Assess

The 3 Cs of Credit:Collateral • quality and age of property• Environmental concerns• Structure/mechanical • Up to 75% of the lower of p/p, appraised value, and bank economic value

Cashflow * EBITDA of the business (sustained over a period of time) – owner

occupied* retention of earnings (building the equity)* balance sheet management (debt vs equity levels)* Tenant quality and length of leases*Property specific NOI (including allowance for mgmt fee and vacancy -10%)*Debt service coverage of min 125% (based on business EBITDA or

investment property NOI)* Maximum 20 yr amortization

How do we Assess

Character

* management business strength

* experience in the industry/background

* internal/external reporting

* level and strength of personal recourse

Typical Information Requirements

• Two year’s property specific operating statements and/or proforma operating statements

• Two year’s financial statements if borrower includes more than subject property

• Personal net worth statements of owners/guarantors

• Rent roll

• Copy of all leases and offer to lease

• Purchase and sale agreement (if applicable)

• Confirmation that property taxes are up to date

• Copies of enviro assessments and/or structure/mechanical reports (if applicable)

Current Market Impact

• We are still lending money for commercial real estate!• Bank debt syndication market and the securitization vehicles that

became popular a few years back has dried up on larger mortgage dealsOur lending policies for both owner occupied and investment properties have not changed due to current economic conditions

• Properties do not have to be considered “A or B” class investment grade type of assets for financing (up to the $1.5MM ceiling)

• Other non-bank lending conduits have scaled back or are not lending in this segment at all.

• Pricing: Rates have gone up over the past year, primarily due to higher borrowing costs for Banks, but are still considered fairly attractive, both fixed and floating options.

• Where are rates going and what should clients do?

QUESTIONS