Fitch Takes Rating Actions On Wells Fargo’s CMBS Servicer Ratings

Fitch Ratings has taken rating actions on Wells Fargo Bank's commercial mortgage-backed securities (CMBS) servicer ratings. The company has affirmed the bank's primary-servicer rating at CPS2+, downgraded its master-servicer rating to CMS2- from CMS2, and upgraded its special-servicer rating to CSS2- from CSS3+.

Fitch says the servicer ratings reflect the integration of the Wachovia Securities CMBS servicing platform into Wells Fargo. On Aug. 12, Fitch withdrew Wachovia's CMBS servicer ratings. Going forward, the bank will have one set of servicer ratings under the Wells Fargo name, because all CMBS transactions, including those previously serviced by Wachovia, are now serviced by Wells Fargo. Fitch also says the servicer ratings reflect the combined platform's experienced CMBS servicing management and staff. The primary servicer rating is based Wells Fargo's strong primary-servicer operations and control environment.

The master-servicer rating downgrade is based on the challenges associated with the complexity of the legacy Wachovia servicing portfolio. Although there have been some improvements following the integration of Wachovia into Wells Fargo, the overall surveillance interaction has been uneven, Fitch explains. The rating is also based on the fact that the bank maintains separate investor reporting websites for each legacy portfolio, each of which has its own functionality, which can be confusing for users.

The special-servicer rating upgrade is based on the combination of the legacy Wells Fargo and Wachovia special-servicing teams under one management, Fitch says. The expanded team has increased its CMBS loan resolutions, and Wells Fargo now has experience in special servicing and working out large loans and loans with complex structures.

All of the servicer ratings incorporate the financial strength of Wells Fargo Bank and its commitment to CMBS servicing, Fitch adds.

SOURCE: Fitch Ratings


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