Fitch Takes Rating Action on Torchlight Loan Services' Commercial Mortgage Servicer Rating

Fitch Ratings has downgraded the commercial mortgage special servicer rating of Torchlight Loan Services, LLC (Torchlight) to 'CSS2-' from 'CSS2'.

While Fitch recognizes the long history and experience of Torchlight as a special servicer for CMBS transactions, the 'CSS2-' rating reflects the operational changes following the relocation of principle special servicing operations to Miami, FL that resulted in increased turnover, lower employee tenure and experience metrics, the ongoing development and implementation of a new asset management system, and the company's level of internal controls relative of other Fitch rated servicers.

Torchlight is the captive special servicer of Torchlight Investors (previously ING Clarion Capital), which was formed in 1995 to provide investment management services to institutional clients seeking exposure to commercial real estate debt markets. While Torchlight performs special servicing predominantly for Torchlight's investors, it was increasingly appointed as a third-party special servicer in 2013. The company relocated the majority of special servicing operations to Miami, FL with back office support and shared resources of Torchlight Investors remaining in New York in 2014.

As of March 31, 2014, Torchlight's total servicing portfolio was comprised of 2,004 CMBS loans with an unpaid principal balance of $25.6 billion in 30 transactions. As of the same date, the company was actively special servicing 87 loans totaling $1.3 billion and managing 42 real estate owned (REO) assets with an underlying loan balance of $515.2 million.

The servicer rating is based on the methodology described in Fitch's reports 'U.S. Commercial Mortgage Servicer Rating Criteria,' dated Feb. 14, 2014, and 'Rating Criteria for Structured Finance Servicers' dated Jan. 30, 2014, available on Fitch's web site www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

-- 'U.S. Commercial Mortgage Servicer Rating Criteria' (Feb. 14, 2014);

-- 'Rating Criteria for Structured Finance Servicers' (Jan. 30, 2014).

Applicable Criteria and Related Research:

Rating Criteria for U.S. Commercial Mortgage Servicers
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=735382

Rating Criteria for Structured Finance Servicers
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=731750

Additional Disclosure

Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=861574

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