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Credito Fondiario Special Servicer Rankings Raised, Master Servicer Rankings Affirmed; Outlooks Stable


  • Credito Fondiario SpA (CF) is a bank that provides primary, special, and master servicing across seven servicing sites in Italy, among other banking activities. Assets under management for the master and special servicing portfolios are approximately €46.9 billion and €10.0 billion, respectively.
  • We raised our AVERAGE ranking to ABOVE AVERAGE on CF as a residential and commercial special servicer in Italy.
  • We affirmed our ABOVE AVERAGE rankings on CF as a master servicer of residential and commercial mortgages and unsecured loans in Italy.
  • The outlook on the rankings is stable.

MILAN (S&P Global Ratings) Dec. 17, 2020--S&P Global Ratings today raised to ABOVE AVERAGE from AVERAGE its overall rankings on Credito Fondiario SpA (CF) as a residential and commercial mortgages special servicer and affirmed the ABOVE AVERAGE rankings as a master servicer of residential and commercial mortgages and unsecured loans in Italy. The outlook on all the rankings is stable.

We raised our loan administration subrankings for special servicing to ABOVE AVERAGE from AVERAGE and concurrently raised each of these overall rankings to ABOVE AVERAGE. CF has successfully grown the special serviced portfolio by boarding new assets, acquiring and integrating the Gerica NPL servicing platform (formerly owned by Banca Carige), and entering into the CF Liberty Servicing (CFLS) joint venture (JV) with Banco Popolare di Milano (BBPM). To increase operational efficiencies, it reorganized certain aspects of the special servicing activity. The servicer has not reported any deterioration in special servicing performance throughout the implementation of those changes, and we believe its experience levels remain fine. Finally, CF strengthened its internal controls, and it has robust processes for managing nonperforming loans (NPLs) and unlikely-to-pay loans (UTPs).

Our rankings reflect:

  • Successful growth of the special servicing portfolio, driven by the acquisition and integration of the Gerica NPL platform, entering the CFLS JV with BBPM, and adding other new mandates;
  • The fine experience and tenure levels within the operations;
  • A well-designed training regimen that was augmented over the past 12-18 months;
  • A reliable IT environment that fully supports master and special servicing;
  • A robust internal control environment that applies a three lines of defense model;
  • No critical issues reported from the most recent internal audit;
  • Proven historical abilities to board new loans; and
  • Special and master servicing operations that have robust processes and oversight in place.

Furthermore, CF maintains a disaster recovery and business continuity plan, including response procedures to address operational disruption as a result of a pandemic event. The company implemented its plan this year due to the COVID-19 pandemic. Management reported that there were no material disruptions to the company's operations or data facilities this year.

Since our prior review (see "Servicer Evaluation: Credito Fondiario SpA,"published on Sept. 17, 2018), the following changes and/or developments have occurred:

  • CF integrated Banco Carige's NPL platform into its operations throughout 2018.
  • Since May 2019, CF controls 70% of CFLS, established as a JV with BBPM, which retains the minority share. CFLS operates as a CF unit that manages BBPM's NPLs only. CF also offers CFLS the support related to nonservicing activities such as internal controls, IT, and human resources.
  • In November 2018, Tiber Investments S.a.r.l., a subsidiary of Elliot Management Corp., became the controlling shareholder of CF.
  • Servicing operations are located at seven sites versus the prior three, as a result of the recent operations expansion.
  • CF reorganized its operations, repositioning certain existing managers and hiring new individuals in special servicing. Also, master servicing now reports to the operations group rather than to the finance department to ensure a more appropriate segregation of duties.
  • The chief servicing officer left CF during October 2020, and the general manager has replaced him ad interim until a successor is found.
  • The training program now includes additional courses, including formal instructional academies for asset managers and financial analysts.
  • The servicer set up a self-dedicated function, including a data protection officer role, in compliance with GDPR.
  • Additional internal control group staff were added, and internal controls were implemented, primarily to address the additional portfolio growth.

The outlook is stable for all the rankings. CF continues to invest in its operations, and management indicated that it will remain active in pursuing additional special and master servicing mandates. The company made significant progress in expanding its special servicing portfolio over recent years while maintaining a sound internal control environment. We expect CF will remain a competent special servicer of residential and commercial mortgages and a master servicer of residential and commercial mortgages and unsecured loans in Italy.

Financial Position

The financial position is SUFFICIENT.

Related Criteria

Related Research

This report does not constitute a rating action.

Servicer Analysts:Corrado Boschi, Milan (39) 02-72111-259;
Steven L Frie, New York + 1 (212) 438 2458;
Analytical Manager, Servicer Evaluations:Robert J Radziul, New York + 1 (212) 438 1051;

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