Fitch Affirms Pacific Life Insurance Company's Commercial Servicer Ratings

NEW YORK--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Rating Criteria for U.S. Commercial Mortgage Servicers

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=735382

Fitch Ratings has affirmed the commercial real estate (CRE) servicer ratings of Pacific Life Insurance Company (Pacific Life) as follows:

--Commercial primary servicer rating at 'CPS1';

--Commercial loan level special rating at 'CLLSS2+'.

The primary and loan level special servicer ratings reflect Fitch's assessment of the company's long history and demonstrated ability to effectively service commercial mortgage loans. The ratings also consider the company's established policies and procedures for loan servicing and default resolution supplemented by a robust internal control environment consisting of manager reviews and an internal quality assurance program, as well as internal and external audits. Additionally, both ratings consider the investment-grade rating of Pacific Life and the critical role of the commercial mortgage servicing group that supports the company's CRE investment platform which contributes to the company's overall investment returns.

Primary servicing senior managers average 25 years of tenure and 28 years of CRE experience. Middle managers average 17 years with the company and 24 years of experience. Staff-level employees average 13 years of tenure and 20 years of experience. The primary servicing operations group experienced no turnover during the past 12 months and added two employees in response to growth in the company's servicing portfolio and increased loan complexity and reporting requirements. The special servicing team has CRE workout experience through numerous real estate cycles inclusive of all CRE properties in various stages of development, throughout the United States and Canada.

Pacific Life has originated and serviced its own CRE loans since its inception in 1868, and for third-party investors and clients since the 1970s. CRE lending operations at the company generate $1 billion-$2 billion per year of new, directly serviced commercial mortgages, including a significant number of construction loans. In recent years, Pacific Life's approach to servicing has been to pursue strategic primary and/or special servicing assignments in conjunction with B-note investments. Recent special servicer appointments include the WP Glimcher Mall Trust 2015-WPG and Houston Galleria Mall Trust 2015-HGLR single borrower transactions as well as Impact 2015-1, a multiborrower affordable housing transaction on behalf of a third party client.

As of March 31, 2016, Pacific Life was servicing 671 CRE loans totaling $19.5 billion in outstanding balance. As of the same date, Pacific Life was named special servicer on 604 loans totaling $13 billion in outstanding balance, of which 425 loans are securitized across 10 CMBS transactions totaling $3 billion, none of which are currently in special servicing. Pacific Life is actively working out nine non-CMBS loans totaling $278 million and four REO assets representing $39.7 million in outstanding balance from its balance sheet portfolio. Non-CMBS loans, which represent approximately 30% of Pacific Life's named special servicing portfolio, are balance sheet loans originated by Pacific Life and private client loan portfolios.

The servicer rating is based on the methodology described in Fitch's reports 'U.S. Commercial Mortgage Servicer Rating Criteria,' dated Feb. 14, 2014, and 'Rating Criteria for Structured Finance Servicers' dated April 23, 2015, available on Fitch's website www.fitchratings.com.

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

Applicable Criteria

Rating Criteria for Structured Finance Servicers (pub. 1 July 2015)

Rating Criteria for U.S. Commercial Mortgage Servicers (pub. 14 Feb 2014)

Applicable Criteria

Rating Criteria for Structured Finance Servicers (pub. 01 Jul 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=884140

Rating Criteria for U.S. Commercial Mortgage Servicers (pub. 14 Feb 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=735382

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1008553

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/20160707005970/en/

Fitch Ratings
Primary Analyst
Adam Fox
Senior Director
+1-212-908-0869
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
James Bauer
Director
+1-212-908-0343
or
Committee Chairperson
Robert Sutherland
Senior Director
+1-312-606-2346
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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