XE.com - TEXT-S&P asgns Credit Network & Finance AVERAGE ...

(The following statement was released by the rating agency)

Oct 04

OVERVIEW

-- We have assigned an overall AVERAGE ranking to CNF as a special servicer for insurance debt in Italy.

-- The outlook is stable.

Standard & Poor's Ratings Services' servicer evaluation team has assigned an AVERAGE overall servicer ranking to Credit Network & Finance S.r.l. (CNF). The outlook is stable.

We have assigned an AVERAGE subranking for management and organization.

We have assigned an ABOVE AVERAGE subranking for credit administration.

We consider CNF's financial position to be sufficient to sustain its servicing operations for the next 12-18 months. This opinion is a complementary element to our servicer assessment. It can be either sufficient or insufficient and it does not take the place of a senior debt or counterparty credit rating.

We understand that CNF is the first Italian special servicer exclusively focused on debt collection for the insurance sector.

The rankings reflect the following, in our view:

-- CNF has registered steady growth since it was established in 2007.

-- In 2011, CNF approved its business plan for the next three years. It foresees a consolidation of its core business in the short term, and a diversification into new services and markets in the long term.

-- The experience of management and staff in relevant sectors is adequate for the ranking, while the tenure is limited by CNF's reasonably short history.

-- The turnover of staff has been relatively high, mainly driven by some employees who did not complete the probation period. CNF has put in place actions to strengthen the recruitment and selection process in order to reduce the turnover.

-- CNF's structure is well organized and appropriate to support the current level of business and the forecasted growth.

-- The internal control function was established and outsourced at the beginning of 2011. The first CNF-completed internal control review is expected to be finalized by the end of this year.

-- Similarly, CNF expects to finalize a complete audit review by the beginning of 2012. It appointed PricewaterhouseCoopers (PWC) as internal auditor at the beginning of 2011.

-- CNF's debt management system allows a highly automated management of the collection activity, which reduces cost and improves outcomes compared with the insurance market standard.

-- CNF has created a powerful data warehouse and can run, in real time, an exhaustive set of key performance indicators (KPIs) and statistics for each portfolio under management, and also on the overall portfolio.

-- Finally, CNF provides its clients with online access to its management system, in order for them to monitor the collection activity by running queries and generating statistics.

RELATED CRITERIA AND RESEARCH

-- Structured Finance Sector Report Card: Low Lending Levels Continue To Constrain European Servicers' Portfolio Growth, Nov. 23, 2009

-- Standard & Poor's Revises Criteria Methodology For Servicer Risk Assessment, May 28, 2009

-- Servicer Evaluation Ranking Criteria: U.S., Sept. 21, 2004

-- Select Servicer List, published monthly

-- Structured Finance Sector Report Card: European Loan Servicers, published half-yearly

(Bangalore Ratings Team, Hotline: +91 80 4135 5898 satish.kb@thomsonreuters.com, Reuters Messaging: satish.kb.thomsonreuters.com@reuters.net)

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Source: http://www.xe.com/news/2011/10/04/2193117.htm?utm_source=RSS&utm_medium=TL&utm_content=NOGEO&utm_campaign=News_RSS_Art5

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