Fitch Affirms HFF's Primary and Special Servicer Ratings

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the following ratings on Holliday Fenoglio Fowler, L.P. (HFF):

--Commercial primary servicer at 'CPS2';

--Commercial loan level special servicer rating at 'CLLSS3'.

The affirmation of the primary servicer rating reflects Fitch's assessment of HFF's experienced and tenured management and staff, long history as a commercial mortgage primary servicer (including for life insurance companies and Freddie Mac), and its demonstrated ability to effectively primary service CMBS loans. The rating also reflects recent high staff-level turnover of 37%. While high turnover is a concern, HFF replaced all positions with new employees, increased headcount from Fitch's previous review, and continues to maintain experienced and well tenured management.

The affirmation of the loan level special servicer rating reflects the limited basis in which the company special services non-performing loans, experience of the company's portfolio managers shared between primary and special servicing, and limited technology to perform special servicing for a large volume of defaulted loans. Nine portfolio managers responsible for special servicing (in addition to primary servicing) average 23 years of industry experience. Fitch believes HFF's portfolio managers have suitable experience for the limited special servicing functions performed; however, highly rated special servicers typically have more asset disposition experience.

Both ratings also reflect the company's financial condition, adequate internal controls and the broad real estate resources of HFF.

As of June 30, 2015, HFF's total servicing portfolio consisted of 2,580 loans totaling $44.7 billion, up 13% by loan count and 43% by balance since year-end 2012. As of the same date, the company acted as primary servicer on 1,087 CMBS loans totaling $20.1 billion, an increase of 53% (by loan count) since Dec. 31, 2012. Approximately 42% of HFF's total portfolio (by loan count) is CMBS, up from 31% as of Dec. 31, 2012. As the company continues to grow its CMBS servicing, cashiering has become a focus and HFF expects to add more cashiering assignments.

The servicer rating is based on Fitch's methodology, as described in the reports highlighted at the end of the press release.

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

Applicable Criteria

Rating Criteria for Structured Finance Servicers (pub. 23 Apr 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864375

U.S. Commercial Mortgage Servicer Rating Criteria -- Effective Feb. 18, 2011 to Feb. 14, 2014 (pub. 18 Feb 2011)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=584005

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=997170

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151221006088/en/

Fitch Ratings
Primary Analyst
James Bauer
Director
+1-212-908-0343
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Adam Fox
Senior Director
+1-212-908-0869
or
Committee Chairperson
Daniel Chambers
Managing Director
+1-212-908-0782
or
Media Relations
Elizabeth Fogerty, New York, +1-212-908-0526
[email protected]

Source: Fitch Ratings

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