DBRS Releases Updated Structured Finance Servicer Evaluations Methodology

DBRS has today released its updated methodology for evaluating servicers in structured finance transactions. The existing methodology was reviewed and publication of this methodology is part of DBRS’ continued effort to provide market participants with insights into the rationale behind DBRS’ operational risk reviews.

The methodology outlines a number of considerations specific to the servicing structured finance assets that are considered when DBRS performs servicer evaluations.

DBRS has taken no rating actions as a result of this updated methodology.

Servicer evaluations provide a consistent measure for comparison by capital market participants. Specifically, servicer evaluations allow for cross-company comparisons as the criteria considered within the evaluations is from established and publicly available industry benchmarks and best practices. Since the servicer is the only party that has regular interaction with the obligors of the pledged assets, the trustee, rating agencies and investors, among other parties, rely upon the servicer’s judgment, actions and accuracy in the receiving and reporting of data, which has an impact on the ultimate repayment of the rated debt.