RPT-Fitch Affirms Guber's Italian Servicer Ratings; Assigns ABS Rating
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Jan 13 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has affirmed Guber S.p.A.'s Italian Residential and Commercial Mortgage Special Servicer Ratings at 'RSS2' and 'CSS2', respectively. Fitch has also assigned Guber an Italian asset backed securities (ABS) Special Servicer Rating of 'ABSS2'.
The Residential and Commercial Mortgage Special Servicer ratings reflect Guber's continued ability to manage the workout process for defaulted loans. The ABS Special Servicer rating reflects that following growth in recent years, just over 90% of assets under management are now unsecured (by value). Guber has consistently taken on new loans, with 35 portfolios boarded in the past 24 months.
The diversification of servicing included the purchase and absorption of a small ticket loans (STL) servicing business at end-2010. The business was previously based in Milan, but operations were transferred to Guber's central office in Brescia over the past 12 months. This presented the company with a number of challenges, most notably the loss of a large proportion of the original STL servicing team. Fitch is comfortable that the transfer was well managed. However, at the time of review, the changes had been in place for less than a year so it was difficult to make a full assessment.
Guber continues to use a wide variety of workout methods, both non-judicial and judicial, to achieve the maximum possible recoveries. The in-house legal department ensures the company has a tight control over the judicial process, with dedicated internal teams managing any outsourced third-party activities, providing adequate quality control.
The ratings are supported by an embedded internal audit and compliance programme, which forms part of what Fitch considers an appropriate governance structure for a company of this size, with oversight and clear lines of escalation. Fitch notes the changes of responsible persons in these key control functions in recent years. However, the agency understands the reasons for these changes and hopes they will have a positive impact and lead to greater stability in these functions.
Technology developments over the past 12 months have further improved the servicer's analytical abilities and enhanced an already automated workout process. Fitch views positively the servicer's continued focus on technology infrastructure improvement.
Although Guber does not benefit from the support of a financially strong parent company like some of its rated peers, the company's financial performance remains robust. This is evidenced by several years of continued profitability and its current sound liquidity. Guber's independence remains beneficial in acquiring new clients, as demonstrated by its continued growth.
As of 30 June 2013, Guber managed a servicing portfolio of 120,702 loans with a gross book value of just over EUR 3.1bn, which is stable compared with 2012 (EUR3bn). The secured portfolio consisted of 1,537 residential mortgage loans, 229 commercial mortgage loans and 1,702 judicial mortgage loans on ABS assets.
The remainder of the portfolio consisted of 117,234 unsecured ABS loans. Fitch employed its global servicer rating criteria in analysing the servicer's operations and financial condition, including a comparison against similar Italian servicers as part of the review process.