Fitch Places Vesting Finance Servicing's Servicer Ratings on RWE
OREANDA-NEWS. Fitch Ratings has placed Vesting Finance Servicing B. V.'s (VFS) Dutch Servicer Ratings on Rating Watch Evolving (RWE), as follows:
Residential Primary (Prime) Servicer Rating at 'RPS2-'; on RWE
Residential Primary (Sub-prime) Servicer Rating at 'RPS2-'; on RWE
Residential Special Servicer Rating at 'RSS2-'; on RWE
Asset Backed Primary Servicer Rating at 'ABPS2-'; on RWE
Asset Backed Special Servicer Rating at 'ABSS2-'; on RWE
The RWE follows the recent announcement on 4 May 2016 Arrow Global Group PLC (Arrow) completed the acquisition of InVesting B. V., consisting of VFS and Focum Group B. V. The acquisition was approved by the Dutch Authority for the Financial Markets.
Arrow is a UK listed provider of debt purchase and receivables management solutions, with operations across Europe and the US. As a result of the ownership change, Fitch has been informed that two Arrow directors have joined VFS's board of directors.
A change of ownership can lead directly or indirectly to changes in the senior management team. There were several changes to VFS's senior management team in 2014, including the appointment of a new Chief Executive Officer and joint Chief Financial Officer/Chief Operations Officer. The RWE reflects the potential effect of the new ownership on the stability of the senior management team.
Neither InVesting, the previous parent, or Arrow are Fitch-rated financial institutions. Thus, the agency will continue to assess the servicer's financials as a standalone entity post sale. Some credit is given during the rating process for demonstrated support from the parent company.
VFS's audited financial statements showed reported losses for both year-end 2013 and year-end 2014, although these results were influenced by a number of extraordinary costs. VFS was financially supported by InVesting, as demonstrated by an increase of the group's equity through the conversion of a subordinated loan into share premium/equity in 2015. The RWE also addresses the uncertainty around the longer-term commitment and support which Arrow may offer to VFS.
The RWE also addresses uncertainties around the impact of the sale on VFS's current loan servicing operations. The ratings will remain on RWE until Fitch can conduct a full operational assessment of VFS, which we expect to take place before year end 2016. Depending on the outcome of the assessment, it could result in an upgrade, affirmation or downgrade of the servicer ratings.
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