News Column

Fitch Takes Rating Action on Torchlight Loan Services' Commercial Mortgage Servicer Rating

August 29, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has downgraded the commercial mortgage special servicer rating of Torchlight Loan Services, LLC (Torchlight) to 'CSS2-' from 'CSS2'.

While Fitch recognizes the long history and experience of Torchlight as a special servicer for CMBS transactions, the 'CSS2-' rating reflects the operational changes following the relocation of principle special servicing operations to Miami, FL that resulted in increased turnover, lower employee tenure and experience metrics, the ongoing development and implementation of a new asset management system, and the company's level of internal controls relative of other Fitch rated servicers.

Torchlight is the captive special servicer of Torchlight Investors (previously ING Clarion Capital), which was formed in 1995 to provide investment management services to institutional clients seeking exposure to commercial real estate debt markets. While Torchlight performs special servicing predominantly for Torchlight's investors, it was increasingly appointed as a third-party special servicer in 2013. The company relocated the majority of special servicing operations to Miami, FL with back office support and shared resources of Torchlight Investors remaining in New York in 2014.

As of March 31, 2014, Torchlight's total servicing portfolio was comprised of 2,004 CMBS loans with an unpaid principal balance of $25.6 billion in 30 transactions. As of the same date, the company was actively special servicing 87 loans totaling $1.3 billion and managing 42 real estate owned (REO) assets with an underlying loan balance of $515.2 million.

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 Jan. 30, 2014, available on Fitch's web site www.fitchratings.com.

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

Applicable Criteria and Related Research:

-- 'U.S. Commercial Mortgage Servicer Rating Criteria' (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=861574

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings, Inc.

Primary Analyst

Adam Fox, +1-212-908-0869

Senior Director

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Howard Miller, +1-212-908-0737

Director

or

Committee Chairperson

Dan Chambers, +1-212-908-0782

Managing Director

or

Media Relations, New York

Sandro Scenga, +1-212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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