Bangkok--28 Aug--Fitch Ratings
Fitch Ratings (Thailand) Limited has affirmed Capital Advisory Services (Thailand) Limited’s (CAS) residential mortgage special servicer rating at ‘RSS2(tha)’.
The rating reflects CAS’s still strong overall servicing capabilities based on its strengths, including its experienced senior and middle management, advanced and highly efficient integrated IT system, and its demonstrated stable performance in managing and collecting large NPL portfolios of Thai residential loans. However, CAS’s major challenges include the uncertainty of future servicing fee income generated from the portfolios owned by Lehman Brothers (Lehman)-related entities as well as its ability to diversify its customer base amid the current weak economic environment.
While CAS has been affected by the bankruptcy of Lehman in September 2008 (Lehman-related entities have been CAS’s predominantly largest source of revenue), the impact on CAS has been somewhat manageable so far due to the fact that CAS continues to service almost the entire Lehman-related residential NPL portfolios, receiving full servicing fees. CAS has been able to maintain substantially all experienced management and key staff as well as its various well-structured training programmes. Fitch notes that the company is intensifying its efforts to further enhance its risk control measures, adding depth with more localised focus.
Established in Thailand in 2000, CAS is effectively the second-largest subsidiary of the Capital Services Holding Corporation (CSHC), a holding company offering real estate and loan asset management services through its subsidiaries. CAS added two large residential NPL portfolios into its servicing portfolios from late 2007 to early 2008, and its total servicing portfolios included more than 9,700 loans with unpaid principal balance exceeding THB15.5bn and more than 1,000 REO properties as of December 2008.
Fitch provides primary, special and master servicer ratings to servicers of commercial and residential mortgage loans and unsecured loans in Thailand on a scale of one through five, with one being the highest rating. In addition, Fitch may attach a plus (+) or minus (-) sign to the rating, indicating a relative position within each rating category. ‘tha’ appears in the Thai ratings to reflect their relevance in Thailand’s legal, economic and social context. For further details, please refer to the report titled ‘Thai Servicers Rating Criteria’, dated 27 June 2008 available on Fitch’s websites at ‘www.fitchratings.com’.
The rating report on CAS will be available shortly on Fitch’s websites, or through Fitch Market Services at 1-800-853-4824 in New York or Fitch Thailand Limited at 662-655-4755 in Bangkok.
Contacts: Mitsuhiro Ueno, Tokyo, +81 3 3288 2605/ [email protected], Orawan Karoonkornsakul, Bangkok, +66 2 655 4766/ [email protected]; Masaaki Kudo, Tokyo, +81 3 3288 2630/ [email protected].