Fitch: Varde Acquisition of Trimont Not Expected to Impact Ratings

NEW YORK--(BUSINESS WIRE)-- Following the acquisition of Trimont Real Estate Advisors (Trimont) by Varde Partners, Fitch Ratings expects to withdraw the commercial loan level special servicer rating of 'CLLSS3+' for FirstCity Servicing Corporation (FCSC), which is also owned by Varde Partners.

The withdrawal of FCSC's servicer rating is expected to occur in the first half of 2016 in conjunction with Fitch's review of the newly combined Trimont platform in the first quarter of 2016. Fitch does not currently anticipate an impact to Trimont's commercial primary servicer rating of 'CPS2+' and commercial special servicer rating of 'CSS2'. Fitch expects Trimont's special servicing assets- to- asset manager ratio of less than three to one as of year-end 2014 will provide sufficient capacity to absorb special servicing assignments from FCSC.

Fitch has reviewed a summary of the proposed transaction and discussed the timing and operational impact on the two companies with senior management of Varde Partners, Trimont and FCSC. The proposed transaction includes the consolidation of FCSC's servicing portfolio and employees into a new Trimont branded entity, and assimilation of best practices and technology of the two platforms as well as the retention of servicing operations in Dallas, Texas. The integration of the two companies is expected to occur over the next six to nine months.

At March 31, 2015, FCSC was named special servicer for two securitized NPL transaction, VFC 2014-2and VFC 2015-3. At the same date, 1,339 loans remained in the two pools, of which 1,126 loans with a UPB of $626.1 million were being worked out and an additional 213 REO properties with a UPB of $139.2 million were being managed. The portion of the assets being serviced by FCSC in the securitized structure accounted for approximately 65% of the overall portfolio. The company was also special servicing 394 non-securitized loans with a UPB of $280.9 million, inclusive of 19 REO assets with a balance of $8.1 million.

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

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View source version on businesswire.com: http://www.businesswire.com/news/home/20150910006270/en/

Fitch Ratings
Primary Analyst
Adam Fox
Senior Director
+1-212-908-0869
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Secondary Analyst
James Bauer
Director
+1-212-908-0343
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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