Fitch Ratings has downgraded Centerline Servicing Inc.'s commercial mortgage-backed securities (CMBS) servicer ratings, dropping the company's primary servicer rating to CPS3+ from CPS2- and its special servicer rating to CSS2 from CSS1-.
The downgrades are due to the significant financial challenges facing Centerline's parent company, Centerline Holding Co. (CHC), and the potential impact of these challenges on the servicing operations, Fitch says.
The agency adds that it is monitoring the servicing operation's efforts to manage growth and continue to provide the level of service the CMBS market expects while under financial stress and facing the challenge of a rapidly growing portfolio of specially serviced loans. The downgrades are not attributed to the management or operations of the servicing group, as they both remain strong and in place today.
The company has taken significant recent write-downs on the values of its investments. Additionally, while CHC has repaid the bulk of its unsecured bank term loan maturing at the end of the year, the company has additional upcoming debt maturities in 2010 that have yet to be addressed.
As of Sept. 30, Centerline was named special servicer on 81 CMBS transactions totaling $109.7 billion and was specially servicing 419 assets, totaling $5.5 billion. As of the same date, Centerline was primary servicer for 139 loans in eight CMBS transactions totaling $1.39 billion.
SOURCE: Fitch Ratings