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

Stocks and Financial Services Press Releases Thursday October 5, 2017 12:49
TOKYO--5 Oct--S&P Global Ratings

TOKYO (S&P Global Ratings) Oct. 5, 2017--S&P Global Ratings today said it has affirmed its STRONG servicer ranking on SMBC Servicer Co. Ltd. as a commercial loan special servicer. The outlook on the ranking is stable. SMBC Servicer remains on S&P Global Ratings' Select Servicer List in the above category (see below for an explanation of this list).

The STRONG ranking primarily reflects our views on: The ample servicing experience of the company's management team and collection staff;The company's significant track record in handling commercial loans as a special servicer;Its computer systems supporting efficiency of the servicing business; andIts established data backup procedures and facilities, including periodic system resumption tests executed under its disaster contingency plans. SMBC Servicer is a wholly owned subsidiary of Sumitomo Mitsui Banking Corp.

SMBC Servicer was established through a merger between SMBC Business Servicing Co. Ltd. and SMBC Loan Servicer Co. Ltd. in October 2007. SMBC Business Servicing was established in March 1999 to conduct servicing operations as allowed under Japan's Act on Special Measures Concerning Claim Management and Collection Businesses (the Servicer Law) and was licensed by the Ministry of Justice as Japan's 10th servicer in June of the same year. SMBC Loan Servicer was established in July 1999 and was licensed as Japan's 25th servicer in October of the same year. As of March 31, 2017, SMBC Servicer employed 231 staff--20 were directors and executive officers, and the rest were 211 non-executive employees. The company's head office is in Tokyo and it has branches in Osaka and Kobe.

Today's affirmation reflects our overall evaluation of SMBC Servicer as a commercial loan special servicer, based on our analysis and assessment of various factors, including: The company's track record in handling commercial loans as a special servicer;The servicing experience of its management team and collection staff;Its development of internal controls;Its detailed internal manual of procedures, and the manual's accessibility to employees;Its maintenance and enhancement of service standards via use of internal training programs;The implementation and results of its internal audits;The quality and capacity of the computer systems that support its day-to-day business operations;Its disaster contingency plans, data backup systems, and system resumption tests; Its method for preparing collection plans;Its cash management methods; andBusiness and financial support from the parent company.

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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