Item - 2017.EX25.5

The Executive Committee recommends that:

1.  City Council, in its capacity as Shareholder of Toronto Community Housing Corporation (TCHC)

a.  pursuant to Section 7.4.1(a) of the City's Amended and Restated Shareholder Direction to Toronto Community Housing Corporation approve the term sheet substantially in the form attached as Attachment 1 to the report (April 26, 2017) from the Deputy City Manager and Chief Financial Officer and the General Manager, Shelter, Support and Housing Administration (the Term Sheet) between Toronto Community Housing Corporation as "Borrower" and Ontario Infrastructure and Lands Corporation as "Lender" for refinancing totalling $64.8 million in order to address the renewal of 22 Toronto Community Housing Corporation mortgages ("Mortgaged Properties") totalling $25.9 million, as well as obtaining incremental financing of $38.9 million (less transaction costs and legal fees);

b.  authorize the net amount of incremental financing be held in trust by the Lender invested for the Borrower within a separate account (the "Capital Expenditure Investment Account") for release to pay costs of major repairs and maintenance on the Mortgaged Properties as allocated by the Lender in Appendices 2 and 3 (the "Cap-Ex Reserve Funds") of the Term Sheet in the report (April 26, 2017) from the Deputy City Manager and Chief Financial Officer and the General Manager, Shelter, Support and Housing Administration;

c.  authorize the Deputy City Manager and Chief Financial Officer or his delegate to execute on behalf of the shareholder an amendment to the agreement among the City, Toronto Community Housing Corporation and Ontario Infrastructure and Lands Corporation which will provide for an amended City guarantee for the repayment of all principal and interest payable by Toronto Community Housing Corporation to Ontario Infrastructure and Lands Corporation under the 2013, 2014, 2015, 2016, and 2017  financing agreements on conditions satisfactory to the Deputy City Manager and Chief Financial Officer or his delegate and in a form approved by the City Solicitor.

2.  City Council deem the foregoing guarantee to be in the interests of the City.

3.  City Council, in its capacity as Service Manager under the Housing Services Act, 2011 (the HSA):

a.  grant Service Manager consent to Toronto Community Housing Corporation pursuant to section 162(2) of the HSA to mortgage those properties described in Appendix 1 of the Term Sheet in the report (April 26, 2017) from the Deputy City Manager and Chief Financial Officer and the General Manager, Shelter, Support and Housing Administration that require Service Manager consent to secure the obligations of Toronto Community Housing Corporation to Ontario Infrastructure and Lands Corporation described in the Term Sheet;

b.  authorize the Deputy City Manager and Chief Financial Officer or his delegate to execute on behalf of the City as Service Manager an amendment to the agreement among the City, Toronto Community Housing Corporation and Ontario Infrastructure and Lands Corporation which will provide for an amended City consent to the lender security over all City subsidies payable with respect to the properties previously mortgaged to secure all loans to be advanced pursuant to the Term Sheet, on terms and conditions satisfactory to the Deputy City Manager and Chief Financial Officer or such delegate and in a form approved by the City Solicitor;

c. authorize the General Manager, Shelter, Support and Housing Administration to:

-  request all necessary third party waivers, consents or other authorizations which the Service Manager is required to seek in connection with the transactions contemplated by the Term Sheet;

-  provide the necessary notice to the Minister of Municipal Affairs and Housing pursuant to Section 163 of the HSA.

4.  City Council consent pursuant to subsection 453.1(6) of the City of Toronto Act, 2006 to any mortgage or charge given by Toronto Community Housing Corporation to Ontario Infrastructure and Lands Corporation with respect to any of the properties described in Appendix 1 to the Term Sheet in the report (April 26, 2017) from the Deputy City Manager and Chief Financial Officer and the General Manager, Shelter, Support and Housing Administration, and that where required, the City Clerk provide a certificate, in registerable form, pursuant to subsection 453.1(9) of the City of Toronto Act, 2006.

5.  City Council authorize the City Manager or the Deputy City Manager and Chief Financial Officer to execute and deliver such other notices, consents, authorizations, approvals and agreements on behalf of the City as shareholder or Service Manager in order to facilitate the refinancing of the Toronto Community Housing Corporation mortgages on the properties described in the Term Sheet in the report (April 26, 2017) from the Deputy City Manager and Chief Financial Officer and the General Manager, Shelter, Support and Housing Administration, including, without limitation, amendments to the Operating Agreement between the City and Toronto Community Housing Corporation.

There are currently a number of long-term Canada Mortgage and Housing Corporation ("CMHC") mortgages on Toronto Community Housing Corporation ("TCHC") properties that were established in periods when mortgage interest rates were considerably higher than they are today. Until now, Toronto Community Housing Corporation has not been able to refinance these mortgages without incurring substantial prepayment penalties.

However, in mid-July 2016, Canada Mortgage and Housing Corporation established the eligibility guidelines for a new program that will allow certain housing providers to pay out their long-term Canada Mortgage and Housing Corporation mortgages without penalty.  Toronto Community Housing Corporation was able to take advantage of this program with a first group of ten mortgages that were refinanced in 2016.  Toronto Community Housing Corporation and Shelter, Support and Housing Administration staff were recently informed that a second group of twenty-two Canada Mortgage and Housing Corporation mortgages on Toronto Community Housing Corporation properties, with an outstanding principal amount approximately $25.9 million, have been approved for prepayment without penalty.

Toronto Community Housing Corporation has negotiated refinancing terms with Ontario Infrastructure and Lands Corporation ("IO") that will result in a new 30-year term for these mortgages at the much lower interest rates that prevail today. By extending the repayment term, Toronto Community Housing Corporation will be able to raise the $25.9 million required to repay the existing Canada Mortgage and Housing Corporation mortgages as well as a further $38.9 million in funding that will be used for capital maintenance work on the twenty-two refinanced properties.

These twenty-two properties do not currently receive mortgage subsidies from the City and Toronto Community Housing Corporation is not requesting that mortgage subsidies be provided as part of the refinancing. However, Ontario Infrastructure and Lands Corporation has required that the City provide a guarantee for repayment of all principal and interest payable by Toronto Community Housing Corporation to Ontario Infrastructure and Lands Corporation under the proposed refinancing agreement.