DBRS Publishes Methodology: Operational Risk Assessment for European ABS and SME CLO Servicers

DBRS has today published its methodology for the operational risk assessment of European Asset-Backed Securities (ABS) and small- and medium-sized enterprise loan collateralised loan obligation (SME CLO) servicers. In this methodology, DBRS outlines its procedures used to evaluate the quality of the parties that service or conduct backup servicing on the loans (or leases as applicable) that are about to be securitised or have previously been securitised in a transaction to be rated by DBRS.

While DBRS does not assign formal ratings to these processes, it does conduct operational risk reviews to determine if a servicer is acceptable and incorporates the results of the review into the rating process for new transactions and into the surveillance process for outstanding transactions rated by DBRS. It should be noted that DBRS recognises that there are different rules, regulations and practices for each jurisdiction in Europe and as such tailors its approach as applicable.

This new methodology replaces and supersedes the servicer sections in other DBRS structured finance methodologies.

-Rating European Consumer and Commercial Asset-Backed Securitisations
-Master European Granular Corporate Securitisations (SME CLOs)

DBRS criteria and methodologies are publicly available on its website www.dbrs.com under Methodologies.