NEW YORK--(BUSINESS WIRE)--Fitch Ratings has taken the following actions on the commercial mortgage servicer ratings of Berkadia Commercial Mortgage LLC (Berkadia):
--Commercial primary servicer rating upgraded to 'CPS1' from 'CPS1-';
--Commercial master servicer rating affirmed at 'CMS2'.
The upgrade of the primary servicer rating reflects Berkadia's improved technology infrastructure following its recent conversion to McCracken Strategy 17.3 as well as its experienced and tenured management team, the integration of the U.S. operations with its captive offshore operations in Hyderabad, India, and strong quality controls. Additionally, the company made the interim CEO, the former Leucadia National Corporation chief operating officer permanent, thereby eliminating some uncertainty that comes with a temporary leader.
The affirmation of the master servicer rating reflects similar factors, as well as Fitch's financial assessment of the company, the ability of Berkadia to oversee primary servicers, as well as reporting and advancing capabilities. Fitch's financial assessment of Berkadia carries greater weight in its master servicer rating given a master servicer's need to advance payments for securitized loans. While not publicly rated, Fitch found the company's financial viability adequate to support the servicing platform, including servicer advances under stressed scenarios.
Over the past several years, Berkadia has off-set its legacy CMBS runoff through increased GSE originations as well as fee for service clients. Berkadia is focused on its fee for service business in which it has a large subservicing relationship with Key Bank, which represents about 31% of its total primary serviced portfolio.
The servicer rating is based on the methodology described in Fitch's reports 'U.S. Commercial Mortgage Servicer Rating Criteria,' dated Feb. 14, 2014, and 'Rating Criteria for Structured Finance Servicers' dated April 23, 2015, available on Fitch's web site www.fitchratings.com.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria
Rating Criteria for Structured Finance Servicers (pub. 23 Apr 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864375
Rating Criteria for U.S. Commercial Mortgage Servicers (pub. 14 Feb 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=735382
Additional Disclosures
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=990171
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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