Dominion Bond Rating Service today assigned a public issuer rating of BBB to mortgage lender Maple Trust Co., which is to be acquired by Bank of Nova Scotia at the end of the month.

The rating is on a stand-alone basis, without implied support from Scotiabank. “Over time, the relationship with BNS has the potential to improve the rating as integration increases and benefits translate into proven stronger performance,” it noted. The rating had been a private rating, used since 2002 solely in relation to securitization vehicles, DBRS added.

“Maple’s rating continues to be supported by its conservative credit risk profile. However, Maple has a narrowly focused strategy operating in a single product area – broker-originated retail mortgages. The rating had also been limited by high-cost funding. As a wholly owned subsidiary of BNS, Maple will have access to lower-cost and more diversified funding sources, which will improve both the financial risk and earnings profiles and outlooks,” the rating agency added.

On February 14, Maple Financial Group , the parent company of Maple Trust, entered into a deal to sell Maple Trust and other mortgage-related assets to Scotiabank. The deal, which is subject to regulatory approval, is expected to close on March 31.

DBRS said that Scotiabank does not expect to fund new mortgage originations through Maple’s existing securitization structures as it has access to less expensive funding elsewhere.