Fitch lowers Kensington’s rating
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Fitch Ratings has downgraded Kensington Mortgages’ ‘UK special servicer’ rating due to concerns that its finances could be hit if the downturn continues.
Based on a scale of one to five with one being the highest, Kensington’s UK residential mortgage special servicer rating has been moved down from RSS1- to RSS2+.
Fitch says it has noted a deterioration in the firm’s asset quality as well as weakening profitability. It says these factors are inconsistent with a level one-rated servicer.
But the ratings agency acknowledges Kensington’s robust risk and process management systems, which the company has sought to improve in the past 12 months.
Kensington’s special servicing group has undergone significant restructuring following the departure of head of customer management Ian Carr, who left last September after 10 years to join Homeloan Management Limited.
Edward Register, senior director of European structured finance at Fitch, says: “This downgrade reflects Kensington’s financial situation. We still see it as performing well operation ally and regard the changes it has implemented since Carr’s departure as positive.”
A spokesman for Kensington says: “Our special servicer rating remains the highest in the UK and Fitch has recognised our enhanced risk and process management systems.
“These improvements were made against a back drop of uncertainty and the rating reflects that.”
As of March 31, Kensington was a special servicer on 12 residential mortgagebacked securities issues, with an outstanding balance of £3.27bn.
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