Morningstar Credit Ratings, LLC Affirms 'MOR CS3' Commercial Mortgage Primary and Special Servicer Rankings for RAIT Financial Trust; Revises Primary Servicer Ranking Forecast to Stable

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Dec 17, 2015, 03:26 ET

NEW YORK, Dec. 17, 2015 /PRNewswire/ -- Morningstar Credit Ratings, LLC today affirmed its 'MOR CS3' commercial mortgage primary and special servicer rankings for RAIT Financial Trust. The company revised its primary servicer ranking forecast for RAIT to Stable from Positive and maintained its Stable forecast for the special servicer ranking.

Morningstar affirmed its rankings based on RAIT's experienced management and staff, proactive asset management, acceptable internal audit function, and sound technology platform. The revised primary servicer ranking forecast reflects a noncompliance citation in RAIT's most recent Uniform Single Attestation Program, while recognizing the servicer's stated efforts to remediate the exception through procedural changes. As a special servicer for its primary-servicing portfolio only, RAIT has sufficient loan-workout staffing depth and proactive, controlled loan-recovery practices. RAIT has managed only a small number of specially serviced assets at any one time. However, the company has achieved solid resolution results through different methods, although primarily through loan modifications. Additionally, Morningstar believes RAIT, based on its stated governance practices, acceptably manages any potential conflicts of interest as the servicer, special servicer, and principal investor for its commercial real estate collateralized debt obligation (CRE CDO) and other securitized transactions.

As of June 30, 2015, RAIT had approximately $4.8 billion in assets under management, consisting primarily of commercial real estate mortgage and mezzanine loans and ownership positions in commercial real estate. The primary-servicing portfolio consisted of 287 loans with an unpaid principal balance (UPB) of approximately $2.4 billion, including 154 loans in the company's two seasoned CRE CDO portfolios and 63 loans in its four floating-rate securitizations. The active special-servicing portfolio consisted of 10 loans with a UPB of approximately $67.3 million.

To access Morningstar's operational risk assessments methodology and all published reports, please visit https://ratingagency.morningstar.com.

About Morningstar Credit Ratings, LLC and Morningstar, Inc.
Morningstar Credit Ratings, LLC is a Nationally Recognized Statistical Rating Organization (NRSRO) offering a wide array of services including new-issue ratings and analysis, operational risk assessments, surveillance services, data, and technology solutions.

Morningstar Credit Ratings, LLC is a subsidiary of Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research in North America, Europe, Australia, and Asia.

Morningstar, Inc. offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 17 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $170 billion in assets under advisement and management as of Sept. 30, 2015. The company has operations in 27 countries. Morningstar, Inc. is not an NRSRO and does not issue NRSRO credit ratings.

Morningstar rankings, forecasts, and assessments contained in this press release are not assessments of creditworthiness of an obligor or a security and thus are not credit ratings subject to NRSRO regulations.

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SOURCE Morningstar, Inc.