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Fitch Affirms Berkadia's Commercial Real Estate Servicer Ratings

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the commercial mortgage master and primary servicer ratings of Berkadia Commercial Mortgage LLC (Berkadia) as follows:

--Master servicer rating at 'CMS2';

--Primary servicer rating at 'CPS1-'.

The affirmation of the master and primary servicer ratings reflect Fitch's assessment of the company's experienced and tenured management team, including the depth provided by the middle managers, the integration of the U.S. operations with its captive offshore operation in Hyderabad, India, and strong quality controls.

Both ratings also reflect the ongoing transition of its technology platform. Berkadia uses an older, albeit highly customized version of McCracken's Strategy as its core loan servicing application, supplemented with a number of integrated ancillary systems. Berkadia has transitioned two of its seven portfolios to the newest version of Strategy, with the entire portfolio scheduled to be converted by year-end 2014.

In addition, Berkadia's CEO, who continues to be the chairman of the company, stepped down as CEO and was replaced on an interim basis by the chief operating officer of Leucadia while a search continues for a permanent replacement.

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 30% of its serviced portfolio.

The servicer rating is based on the methodology described in Fitch's reports 'U.S. Commercial Mortgage Servicer Rating Criteria,' dated Feb. 18, 2011, and 'Rating Criteria for Structured Finance Servicers' dated Feb. 6, 2013, available on Fitch's web site www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Rating Criteria for U.S. Commercial Mortgage Servicers' (Feb. 14, 2014);

--'Rating Criteria for Structured Finance Servicers' (Jan. 30, 2014).

Applicable Criteria and Related Research:

Rating Criteria for U.S. Commercial Mortgage Servicers

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=735382

Rating Criteria for Structured Finance Servicers

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=731750

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=837216

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Contacts

Fitch Ratings, Inc.
Primary Analyst
Howard Miller, +1-212-908-0737
Director
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Mary MacNeill, +1-212-908-0785
Managing Director
or
Committee Chairperson
Adam Fox, +1-212-908-0869
Senior Director
or
Sandro Scenga, +1-212-908-0278
Media Relations, New York
sandro.scenga@fitchratings.com