Johannesburg, 8 Jul 2013 – Global Credit Ratings has today assigned MBD Credit Solutions Holdings (Pty) Limited initial primary and special servicer ratings of SQ1-(ZA) and SQ2+(ZA) respectively; with the outlook accorded as Stable.
Global Credit Ratings has accorded the above credit rating(s) on MBD Credit Solutions Holdings (Pty) Limited based on the following key criteria:
Servicing experience: The group boasts a long history of servicing arrear loan accounts, both as administrator and principal collection agent (outsourced or for own account).
Experienced, tenured management and staff: A stable and experienced senior management team is in place, with no major changes to the team or company structure during the review term. Also, staff turnover has started to trend down.
Staff training and welfare programs: The group has a comprehensive training and development program in place, as well as voluntary access to medical/health and provident /retirement schemes – part of the group’s employee value proposition, an integral part to help attract and retain talent.
Robust internal control environment: The group upholds a good control environment through its management-level quality control reviews (on operational areas to ensure each functional area is performing as intended) and reporting.
Industry standard technology: The group uses industry standard servicing technology, accounting and reporting systems; overall, the technology infrastructure is deemed flexible, secure, stable and reliable (strong data integrity) – the group continues to enhance its systems and processes, with on-going infrastructure developments noted (internal).
Financial condition: Recording its most profitable period to date, the group benefitted from growth in revenues from the collection of acquired book debts, a refined debit order collection strategy, containing costs and effective productivity management – the group’s financial strength demonstrates a strong ability to support its operations and remain solvent.
Positive rating movement/s: Further progress in the group’s market positioning, trading performance, financial profile and portfolio collections track record (both principal and agency collections).
Negative rating movement/s: Lower than expected collections, lower business volumes due to the insourcing of collections by clients and the profit impact of legislation and/or regulatory burdens.
SERVICER QUALITY RATINGS HISTORY
Initial rating (Mar/2011)
Servicer quality (combined): SQ2+(ZA)
Last rating (Jun/2012)
Servicer quality (combined): SQ2+(ZA)
Sector Head: Financial Institution Ratings
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APPLICABLE METHODOLOGIES AND RELATED RESEARCH
GCR’s Criteria for Rating Servicers
The ratings above were solicited by, or on behalf of, the rated client, and therefore, GCR has been compensated for the provision of the ratings.
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GCR affirms that a.) no part of the rating was influenced by any other business activities of the credit rating agency; b.) the rating was based solely on the merits of the rated entity, security or financial instrument being rated; c.) such rating was an independent evaluation of the risks and merits of the rated entity, security or financial
instrument; and d.) the validity of the rating is for a maximum of 12 months, or earlier as indicated by the applicable credit rating document.
MBD Credit Solutions Holdings (Pty) Limited participated in the rating process via face-to-face management meetings, teleconferences and other written
correspondence. Furthermore, the quality of info received was considered adequate and has been independently verified where possible.
The credit rating/s has been disclosed to MBD Credit Solutions Holdings (Pty) Limited with no contestation of the rating.
The information received from MBD Credit Solutions Holdings (Pty) Limited and other reliable third parties to accord the credit rating included the latest available
audited annual financial statements (plus four years of comparative numbers), latest internal and/or external report to management, full year detailed budgeted financial statements, most recent year to date management accounts, corporate governance and enterprise risk framework, reserving methodologies, capital management policy, Industry comparative data and regulatory framework and a breakdown of facilities available and related counterparties.
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