News Column

Fitch Affirms ORIX Capital Markets' Special Servicer Rating

August 8, 2014



NEW YORK--(BUSINESS WIRE)-- Fitch Ratings affirms ORIX Capital Markets, LLC's (OCM) commercial mortgage-backed securities (CMBS) special servicer rating at 'CSS2'.

The special servicer rating reflects Fitch's assessment of the company's strong management and experienced asset managers, internal controls with thorough policies and procedures and use of technology for quality control, as well as the financial strength of OCM's ultimate parent, ORIX Corporation. The rating also reflects OCM's 24 month internal audit cycle and limited but flexible staffing structure.

The rating reflects stabilization of turnover since Fitch's last review; in the last 12 months, OCM experienced overall turnover of 7% as one staff level employee left the company. In 2013, the company experienced overall turnover of 92% in conjunction with a large reduction of active special servicing volumes through a bulk sale. Subsequent to the staff reduction, OCM retained an experienced asset management team of seven with over 21 years of experience and maintains a strong leadership team with two senior managers and three middle managers averaging 27 years of experience.

As of June 30, 2014, OCM was named special servicer for 235 loans totaling $902.3 million in CMBS transactions and is in the process of working out 18 CMBS loans totaling $198.7 million (including REO). Of these, office and retail properties form the majority of assets. OCM's non-CMBS book totaled 26 loans and $166.2 million, and included 15 REO properties totaling $123.2 million. In 2014 ORIX USA and OCM hired new management teams, including a CEO and CIO, with a plan to grow special servicing assignments by leveraging the company's lending platform and CMBS investments.

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=847954

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

Primary Analyst

James Bauer, +1 212-908-0343

Director

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Adam Fox, +1 212-908-0869

Senior Director

or

Committee Chairperson

Christopher Bushart, +1 212-908-0606

Senior Director

or

Media Relations:

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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