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 3 S.r.l. on 9 July 2024. The credit ratings remain as follow:

Class A (ISIN IT0005428138), EUR 97.6m outstanding: BB+_SF

Class B (ISIN IT0005428146), EUR 21.0m outstanding: not rated

Class J (ISIN IT0005428153), EUR 4.5m 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 better than expected in terms of the timing of collections. As of the January 2024 payment date, aggregate net collections stood at EUR 72.2m, representing 111% of the original business plan projections. The pace of collections is also above Scope’s initial expectations. Meanwhile, the secured profitability on closed debtors remains below Scope’s original expectations for the B case scenario at 92%. Recovery expenses at 13.7% of gross cumulative collections are still above Scope’s expectations, however they are showing a decreasing trend since closing.

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, 10 July 2024) 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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