Fitch Takes Rating Action on Hudson Americas LLC's Servicer Ratings

Fitch Ratings has taken the following rating actions on Hudson Americas LLC (Hudson):

-- Commercial special servicer affirmed at 'CSS2';

-- Commercial primary servicer affirmed at 'CPS3+' and withdrawn.

The withdrawal of the primary servicer rating is due to insufficient information necessary to maintain the rating. Hudson believes its processes differ considerably from traditional CMBS primary servicers as they focus on non-performing loans and the rating is unnecessary for its current business model. Hudson does not primary service a significant volume of loans, and as such, the rating is no longer considered by Fitch to be relevant to the agency's coverage.

The special servicer rating considers Hudson's demonstrated ability to work out and liquidate commercial real estate (CRE) loans as well as its history with its affiliate Lone Star Funds which has been successful at fundraising through the economic cycles. The rating also reflects the company's commitment to technology. In the past year, Hudson implemented a new special servicing and asset management application; while Fitch is concerned the new system is less robust than the application it replaces, Hudson continues to improve this technology with new reporting and controls in the development pipeline for 2015.

In 2014, the company performed a corporate restructuring to improve efficiency and better align its special servicing teams. The restructuring resulted in 48% overall turnover, inclusive of 43% management turnover and 37% asset manager turnover. However, only 15% of the total turnover was voluntary. While Hudson's staffing has historically been fluid and turnover higher than other highly rated servicers, turnover is not expected to be a continuing concern.

Hudson Americas is the U.S. subsidiary of Hudson Advisors, a full-service CRE and asset management company with affiliates worldwide. Hudson Advisors was established to underwrite, manage, restructure, and service CRE assets of the Lone Star funds.

The servicer rating is based on the methodology described in Fitch's reports 'U.S. Commercial Mortgage Servicer Rating Criteria,' dated Feb. 18, 2011, and 'Global Rating Criteria for Structured Finance Servicers' dated Aug. 16, 2010, available on Fitch's web site 'www.fitchratings.com'.

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

Applicable Criteria and Related Research:

--'Rating Criteria for U.S. Commercial Mortgage Servicers' (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=978917

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Contacts:

Fitch Ratings
Primary Analyst
Howard Miller
Director
+1-212-908-0737
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
James Bauer
Director
+1-212-908-0343
or
Committee Chairperson
Daniel Chambers
Managing Director
+1-212-908-0782
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
Email: sandro.scenga@fitchratings.com

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