Correction: Fitch Affirms HML's UK and Irish Servicer Ratings
OREANDA-NEWS. This announcement replaces the version published on 15 December 2015 to correct the reported portfolio statistics.
Fitch Ratings has affirmed Homeloan Management Ltd's (HML) UK and Irish residential mortgage servicer ratings as follows:
UK Primary (Prime) Servicer Rating affirmed at 'RPS1-'
UK Primary (Sub-prime) Servicer Rating affirmed at 'RPS1-'
UK Special Servicer Rating affirmed at'RSS2+'
Ireland Primary (Prime) Servicer Rating affirmed at 'RPS2+'
Ireland Primary (Sub-prime) Servicer Rating affirmed at 'RPS2+'
Ireland Special Servicer Rating affirmed at 'RSS2'
The affirmation reflects the completed integration of HML into its new owner Computershare Ltd. (Computershare). Resources such as IT backup provisions, reporting lines, policies and procedures have been aligned, which are expected to result in measurable synergies/cost savings.
All ratings benefit from the shared operation and servicing platform and the continuous improvements made to it. HML possesses strong data analytics. The wide range of data available to HML through its wide client base ensures strong reporting capabilities for clients available through its iPortal. This has also driven the continuous enhancement and development of collection strategies by the use of behavioural scorecards. The application of these within the Irish servicing functions, however, is restricted by limited availability of data and experience.
With Computershare's ownership the high level of technological enhancement continues to increase with further investment in HML's servicing platform. Computershare has expressed a clear interest in the servicing platform with the intention to grow the business. The new ownership also will give access to a wider client base within the financial services industry/investors.
As neither HML nor Computershare have a credit rating/IDR with Fitch the servicer's financial strength has been assessed as if it were a standalone entity for rating purposes. However, Computershare is listed on the Australian Stock Exchange with global revenues of USD 1.97bn and EBITDA of USD0.55bn for the financial year ending 30 June 2015.
The Primary Servicer Ratings benefit from a highly automated and efficient contact centre, an enhanced quality assurance framework with an embedded training regime, and streamlined processes adapted to clients' needs. HML has a dedicated planning team that is able to adapt its resources in a timely manner for new portfolio take-ons. Fitch takes a positive view of this flexibility given the high amount of backup servicing mandates.
As of 30 September 2015, HML's total portfolio in the UK had a value of GBP29.57bn (2013:GBP31.8bn) and comprised 269,733 loans (2013: 294,039). The primary servicing portfolio totalled GBP17.6bn and comprised 141,881 residential loans. The special servicing portfolio totalled GBP5.3bn and comprised 43,024 loans. RMBS represented 35% of the UK servicing portfolio by value.
HML's special servicing portfolio in Ireland totalled EUR2.9bn (2013: EUR1.7bn) and comprised 11,329 loans (2013: 8,483). The primary servicing portfolio totalled EUR2.9bn and comprised 11,552 loans. RMBS represented 12% of the Irish servicing portfolio by value.
Fitch employed its global servicer rating criteria in analysing the servicer's operations and financial condition, with the former criteria including a comparison of similar UK servicers as part of the review process.