European asset-backed security (ABS) issuance has grown in recent years and demand for high quality ABS is now huge.
Accompanying the increasing demand amongst investors and funders for asset backed loans is a desire to mitigate more risk. The role of the servicer in the performance of a portfolio of assets is key, and servicing risks are under increasing scrutiny.
Servicer risks, for example through a failure of the servicer or a threat to servicer solvency, often manifest as:
- Disruption to transaction cash flows
- Deterioration of data quality
- Breaches of agreed service levels and regulation
- Increases in borrower complaints.
Engaging a back-up servicer helps to mitigate risk and reduces the severity of loss to investors.
We have 20 years’ experience of being engaged as a back-up servicer. We have been asked by investors / funders on three occasions to ‘step in’ to the shoes of the servicer at short notice to take over the servicing of assets in the UK, Ireland and Northern Europe.
This experience means we are uniquely placed to act as back up servicer and formulate an effective back up servicer plan for implementation, if required.
We can take on the role of back up servicer or facilitator on ABS portfolios in Europe, covering unsecured and secured loans to commercial entities and consumers. As part of this, we can:
- Develop a fall back plan
- Act quickly to preserve asset value in a default scenario
- Co-ordinate services across subcontractors relevant to assets
- Monitor to ensure subcontractor performance and communicate this to investors
- Act across jurisdictions to identify and mitigate risk
Why choose us as your back-up servicer?
- Our dedicated team has many years’ experience of working in default scenarios in which access to data
- We have a flexible, pragmatic approach, and constantly work to mitigate risks and ensure recovery.
Trusted reputation with rating agencies, lenders and issuers
- Lenders and issuers rely on effective back-up servicing to co-ordinate asset recovery or service continuation. We contract widely across the market and have strong relationships with the majority of banks, so lenders can take comfort from our involvement.
- We are strongly rated by both Fitch and Standard & Poor’s, giving your investors confidence and, as a result increased take up.
Flexibility and value
- Our service and pricing structure is flexible and tailored to the requirements of investors and asset types.
- We offer back-up servicing on a cold, warm, hot or dynamic basis. We covera range of ABS asset classes, secured and unsecured loans.