Fitch Affirms Hudson Americas' Commercial Special Servicer Rating at 'CSS2'
OREANDA-NEWS. Fitch Ratings has affirmed Hudson Americas LP's (Hudson) special servicer rating at 'CSS2'.
The special servicer rating reflects Hudson's demonstrated ability to work out and liquidate commercial real estate loans, its strong management team, and the company's investment in technology. While quality control aspects of its new asset management system are less robust than the legacy application, Hudson continues to improve new reporting and controls and make greater use of new technology (McCracken Strategy) to address quality control for CMBS loans. The rating also considers Hudson's internal controls, primarily consisting of management reporting and internal audits, the financial condition of the parent company, as well as the relationship with its affiliate, the Lone Star Funds (Lone Star).
Hudson is the U.S. subsidiary of Hudson Advisors, LP (Hudson Advisors), the captive asset manager and commercial real estate servicer for Lone Star. The founder of Hudson Advisors is a principal of Lone Star, and in addition to servicing responsibilities, it underwrites and develops resolution strategies for fund investments that include subperforming and nonperforming CRE loans. Hudson does not service for third parties. Hudson's business model is dependent on the future CRE investments made by Lone Star funds, which has a track record of successfully capitalizing on market dislocations during the past 20 years, demonstrated by Lone Star's successful fundraising history.
As of Sept. 30, 2015, Hudson was named special servicer for 1,026 assets (totaling $6.6 billion), the majority of which are non-CMBS investments within the Lone Star funds. The non-CMBS portfolio is predominately made up of real estate owned (REO) assets, with 486 properties totaling $5.5 billion. Also as of the same date, Hudson was also named special servicer for the three CMBS transactions issued by LStar Capital, with Loan Star funds retaining the control positions. The CMBS portfolio included 238 loans, totaling $532.9 million, of which Hudson was actively special servicing six CMBS loans totaling $6.7 million and one REO totaling $4.9 million.