Fitch affirms Pepper's UK master, primary & special servicer ratings

Posted 17-03-2014

Fitch Ratings-London-17 March 2014: Fitch Ratings has affirmed Pepper (UK) Limited's (Pepper) UK residential mortgage servicer ratings as follows:

UK Primary (Prime) Servicer Rating at 'RPS2'
UK Primary (Sub-prime) Servicer Rating at 'RPS2'
UK Special Servicer Rating at 'RSS2+'
UK Master Servicer Rating at 'RMS2'

The ratings take into consideration the recent change of ownership of Oakwood Global Finance LLP and its affiliated entities (collectively the Oakwood Group). The Pepper Group acquired Oakwood Global Finance LLP in September 2013, and Engage Credit Limited (ECL) and the balance of the Oakwood Group in its entirety in October 2013, following all required regulatory approvals. In February 2014, as part of rebranding of the Oakwood Group's UK business, ECL formally changed its name to Pepper (UK) Limited. Fitch believes that the new ownership will give the business a more stable platform for growing the business further within the UK.

The Primary Servicer Ratings continue to reflect a solid internal audit (IA) and risk management framework, a robust technology platform, and a sustained focus on training. These continue to allow Pepper to have a sound level of control and efficiency.

The Special Servicer Rating reflects Pepper's ability to maintain its proactive approach for the management of impaired and high-risk loans and the range of rehabilitation options available to borrowers. Fitch views this positively given the substantial increase in size of Pepper's special servicing portfolio in the last 12 months.

The Master Servicer Rating reflects the continued strong oversight role that Pepper has over Home loan Management Limited (RPS1-/RSS2) for the ALBA transactions. The sound performance of the ALBA transactions demonstrates the effectiveness of this oversight role and the strong relationship between the parties.

Pepper's portfolio of assets under management increased to GBP3.4bn at end-2013 from GBP2.23bn end-2012. Fitch views this growth positively given the current slow servicing market conditions.

Fitch employed its global servicer rating criteria in analysing the servicer's operations and financial condition, with the criteria including a comparison of similar UK servicers as part of the review process.



Primary Analyst
Simon Murphy
+44 20 3530 1639
Fitch Ratings Limited
30 North Colonnade
London E14 5GN

Secondary Analyst
Lauren Hipwood
+44 20 3530 1612

Committee Chairperson
Robbie Sargent
Senior Director
+44 20 3530 1404

Media Relations: Athos Larkou, London, Tel: +44 203 530 1549, Email:

Additional information is available at

Applicable criteria 'Global Rating Criteria for Structured Finance Servicers', dated January 2014 is available on