TOKYO (Standard & Poor's) March 31, 2006--Standard & Poor's Ratings Services
today raised its Servicer Evaluation Ranking on SHINSEI SERVICING CO. (SSC) as
a residential loan primary servicer to STRONG from ABOVE AVERAGE. The outlook
on SSC is stable. SSC remains on the Select Servicer List, which includes
servicers assigned a ranking of AVERAGE or above.
The upward revision of the ranking on SSC reflects improved efficiency in
its residential loan primary servicing operations, and significant enhancement
of its ability to manage delinquent receivables.
Through close ties with its parent company, Shinsei Bank Ltd.
(BBB+/Positive/A-2), and its group companies, SSC will continue to expand its
servicing of residential loans originated by third parties. SSC is also
expected to participate in structured transactions featuring residential
loans, acting as both primary servicer and back-up servicer.
SSC was established in October 2001 as the Shinsei Bank group's servicing
arm. The company was licensed by the Ministry of Justice as Japan's 63rd
servicer in January 2002, allowing it to conduct servicing operations as
regulated under Japan's Law Concerning Special Measures for Servicing Business
(Servicer Law), which came into effect in February 1999. SSC also has an Asset
Management Division that oversees special servicing, and a Nonrecourse Loan
Division that is in charge of primary servicing for nonrecourse loans.
The company's Retail Loan Division is in charge of primary servicing and
backup servicing for residential loans purchased by the bank. Currently, SSC
is one of the few servicers in Japan that service a large pool of performing
residential loans originated by third parties.
Standard & Poor's raised the ranking on SSC to STRONG by examining and
analyzing the following factors:
-- The company's track record as a primary servicer;
-- The servicing experience of its management and collection staff;
-- Its detailed internal policies and procedures;
-- Its future business expansion plans;
-- The implementation and results of its internal audits;
-- Its internal training system;
-- Its management of important internal information, including personal
information;
-- The firm's disaster contingency programs, including computer backup
systems;
-- The quality and capacity of the computer system that supports its
day-to-day business operations;
-- Its experience in servicing securitization transactions;
-- Its effective boarding of loans originated by third parties;
-- Its cash- and asset-management methods;
-- Its customer service;
-- Its ability to report to investors and other relevant parties;
-- Its management of delinquent receivables; and
-- SCC's oversight and control over third parties to which it outsources a
part of its servicing business;
Standard & Poor's servicer evaluations are based on an objective and
comprehensive assessment of a servicer's operational capabilities for
servicing various types of receivables and obligatory rights. The assessment
is described in five rankings: STRONG, ABOVE AVERAGE, AVERAGE, BELOW AVERAGE,
and WEAK.
The Japanese-language report is available on Standard & Poor's Research
Online at www.researchonline.jp, or via CreditWire Japan on Bloomberg
Professional at SPCJ <GO> and Standard & Poor's Japanese Web site, at
www.standardandpoors.co.jp. The report is listed in Rating News under
Structured Finance and Servicer Evaluation.
