Japan-Based Capital Servicing STRONG Ranking As A Commercial Loan Special Servicer Outlook Stable

Stocks and Financial Services Press Releases Thursday July 5, 2018 16:06
TOKYO--5 Jul--S&P Global Ratings

TOKYO (S&P Global Ratings) July 5, 2018--S&P Global Ratings today said it has affirmed its STRONG servicer ranking on Capital Servicing Co. Ltd. (CSC), which it categorizes as a commercial loan special servicer. The outlook on the ranking is stable. CSC remains on S&P Global Ratings' Select Servicer List in the above category (see below for an explanation of this list).

We affirmed our ranking on CSC largely because:
  • The company has built up a proven track record in the special servicing of commercial loans;
  • Its collection staff have ample servicing experience; and
  • Its highly versatile computer systems have allowed it to streamline servicing operations.
We also maintained our assessment of CSC's financial position as sufficient.

CSC was established in September 1998 to conduct servicing operations as allowed under Japan's Act on Special Measures Concerning Claim Management and Collection Businesses (the Servicer Law), which came into effect in February 1999. The Ministry of Justice licensed CSC as Japan's 23rd servicer in September 1999, and the company began operations in December 1999. In July 2017, CSC became a part of the Evolution Financial Group.

Our STRONG ranking on CSC as a commercial loan special servicer reflects our analysis and assessment of various factors, including:
  • The servicing experience of its collection staff;
  • Its internal policies and procedures, and their accessibility to employees;
  • The implementation and results of its internal audits;
  • Its implementation of internal controls;
  • The quality and capacity of the computer systems that support its day-to-day business operations;
  • Its data backup systems, disaster contingency plans, and execution of system resumption tests;
  • Its track record in the special servicing of commercial loans;
  • Its method for preparing collection plans;
  • Its loan boarding and verification processes;
  • Its cash management methods;
  • The workload per servicing employee; and
  • Its ability to report to investors and relevant parties.

S&P Global Ratings bases its servicer evaluations on an objective and comprehensive assessment of a servicer's operational capabilities for servicing various types of receivables and obligatory rights. Based on the assessment, we assign rankings in the following five categories: STRONG, ABOVE AVERAGE, AVERAGE, BELOW AVERAGE, and WEAK.

To be included in, or to remain on, S&P Global Ratings' Select Servicer List, servicers must, in principle, meet the criteria for attaining at least an AVERAGE ranking with a stable outlook and a sufficient financial position.


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