August 21, 2012 / 1:57 PM / 5 years ago

TEXT-S&P affirms ORIX Capital's ABOVE AVERAGE servicer ranking

OVERVIEW
     -- We affirmed our ABOVE AVERAGE overall ranking on ORIX Capital Markets 
LLC as a commercial loan special servicer. The outlook remains stable.
     -- ORIX has been a CMBS investor and special servicer for over 20 years. 
The company has a highly experienced management team, solid compliance and 
quality control structure, and sound credit and surveillance practices.
     -- Investor reporting capabilities are adequate, but could be improved by 
providing more timely and detailed loan status updates. 
 
NEW YORK (Standard & Poor's) Aug. 21, 2012--Standard & Poor's Ratings Services 
today affirmed its ABOVE AVERAGE ranking on ORIX Capital Markets LLC (OCM) as 
a commercial loan special servicer. Our outlook for the special servicer 
ranking remains stable.

We based our ranking on our favorable assessment of OCM's management and 
organization, which includes a highly experienced staff, an effective 
organizational structure, and a sound quality control and audit framework.

KEY RANKING FACTORS

Strengths:
     -- 20-plus years in CMBS B piece investing and special servicing.
     -- A seasoned and experienced management team.
     -- A strong audit, compliance, and control environment, including an 
enhanced disaster recovery plan.
     -- A good credit and surveillance structure.

Weakness:
     -- Adequate investor reporting capabilities; however, timeliness and 
detail could be improved.

OCM is a subsidiary of ORIX USA Corp., which is a subsidiary of ORIX Corp., an 
international financial services company headquartered in Japan, which had 
assets of $106.5 billion as of Dec 31, 2011. The companies provide 
finance-related services such as consumer and commercial finance, banking, and 
securitizations.

OCM has been a special servicer of commercial mortgage-backed securities 
(CMBS) and B piece buyer since the early 1990s. It has resolved approximately 
7,600 loans and $8 billion in principal balance over a 12-year period. OCM has 
experience managing all collateral property types in all 50 U.S. states. Like 
most CMBS special servicers, OCM's special servicing volume began to increase 
significantly in 2009 due to the economic downturn. It had the capacity, 
systems, and expertise needed to handle this sharp increase, and over the past 
three years, its average disposition time for specially serviced loans was 15 
months.

As of June 30, 2012, the company actively managed a special servicing 
portfolio of 62 loans totaling $1.2 billion and 57 real estate owned (REO) 
assets totaling $449.1 million. As of same date, it was the named special 
servicer for 22 CMBS transactions with 1,230 loans totaling over $8.7 billion. 
For all but one transaction, OCM owns the lowest rated tranche. OCM does not 
typically engage in third-party special servicing assignments.

OUTLOOK

The outlook for the commercial mortgage special servicer ranking is stable. 
OCM maintains the staffing, processes, and technology required to administer 
its portfolio in accordance with generally accepted servicing practices. The 
company has an experienced management team and reasonable growth plans, which 
should enable it to achieve its goals and serve its customers.

RELATED RESEARCH AND CRITERIA

     -- Servicer Evaluation: ORIX Capital Markets LLC, Jan. 19, 2010
     -- Revised Criteria For Including RMBS, CMBS, And ABS Servicers On 
Standard & Poor's Select Servicer List, April 16, 2009
     -- Servicer Evaluation Ranking Criteria: U.S., Sept. 21, 2004
     -- Select Servicer List

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