Scope Ratings GmbH (Scope) monitors and reviews its credit ratings on an ongoing basis and at least annually, or every six months in the case of sovereigns, sub-sovereigns and supranational organisations.

Scope performs monitoring reviews to determine whether material changes and/or changes in macroeconomic or financial market conditions could have an impact on the credit ratings. Scope considers all available and relevant information when undertaking the monitoring review.

Monitoring reviews are conducted by performing a peer comparison, benchmarking against the rating-change drivers, and/or reviewing the credit ratings’ performance over time, as deemed appropriate by the Lead Analyst or Analytical Team Head, in addition to an assessment of all aspects of the relevant methodologies, including key rating assumptions and models. Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for Buonconsiglio 4 S.r.l. on 21 June 2024. The credit ratings remain as follow:

Class A (ISIN IT0005473647), EUR 78.6m outstanding: BBB_SF

Class B (ISIN IT0005473654), EUR 16.5m outstanding: not rated

Class J (ISIN IT0005473662), EUR 5.9m outstanding: not rated

The reviews were conducted considering available servicer reports, payment reports and investor report up to January 2024.

This monitoring note does not constitute a credit rating action, nor does it indicate the likelihood that Scope will conduct a credit rating action in the short term. Information about the latest credit rating actions connected with this monitoring note along with the associated rating history can be found on www.scoperatings.com.

Key Rating factors

Rating factors assessed during the monitoring review include realised profitability on closed positions, the timing of cumulative collections and the amount of recovery expenses, against Scope’s expectations. The rating also considered Italy´s macro-economic outlook, the issuers’ exposure to key counterparties, the legal and structural protection provided to the notes, the liquidity protection and the interest rate hedging agreement.

The transaction has so far performed significantly better than expected in terms of the timing of collections. Indeed, as of the January 2024 payment date, aggregate net collections stood at EUR 48.6m, representing 256% of the original business plan projections. The pace of collections is also above Scope’s initial expectations. Meanwhile, the average discount on sold properties was about 44%, which is 4 percentage points higher than Scope’s base case assumption at closing. Structurally, because of the faster than expected pace of collections, the deferral trigger of the mezzanine coupon has not been triggered, as initially anticipated by Scope.

The methodologies applicable for the reviewed ratings (General Structured Finance Rating Methodology, 6 March 2024; Non-Performing Loan ABS Methodology, 3 August 2023; Counterparty Risk Methodology ,13 July 2023) are available on https://scoperatings.com/governance-and-policies/rating-governance/methodologies.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst Stefano Bracchi, Specialist

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