Island Capital Group's recently announced recapitalization of Centerline Holding Co. (CHC) has prompted Fitch Ratings to review Centerline Servicing Inc. (CSI) as a potential replacement collateralized debt obligation (CDO) collateral manager/administrator for seven commercial real estate CDOs currently affiliated with Centerline REIT Inc., Centerline Capital Group Inc. or Centerline/AMAC Manager Inc., and determined CSI's capabilities to be consistent with the current ratings assigned to the transactions.
The affiliated transactions include ARCap 2003-1 Resecuritization Inc., ARCap 2004-1 Resecuritization Inc., ARCap 2004-RR3 Resecuritization Inc., ARCap 2005-RR5 Resecuritization Inc., ARCap 2006-RR7 Resecuritization Inc., AMAC CDO Funding I and Nomura CRE CDO 2007-2 LTD/LLC.
Fitch was notified last month of a proposal to transfer the CDO collateral management and administration responsibilities for the above-referenced CDOs to CSI from Centerline REIT, Centerline Capital Group or Centerline/AMAC Manager. After the proposed recapitalization of CHC by Island, CSI will be a wholly owned subsidiary of C-III Capital Partners LLC, a newly formed entity controlled by Island.
Although the ownership structure of the existing CDO asset management platform will change as a result of the acquisition, the organizational structure, investment capabilities, key employees and technology infrastructure of the existing entity responsible for managing the above-referenced CDOs are expected to remain in place, Fitch says.
Fitch's initial and ongoing rating of CDO transactions includes a review of the CDO asset manager to determine whether the transactions meet the appropriate standards. Fitch emphasizes that the scope of its review was solely to determine that CSI meets Fitch's minimum guidelines to manage the above-referenced CDOs within the context of Fitch's stated review procedure for replacement managers.
SOURCE: Fitch Ratings