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      Scope has completed a periodic review for Wolf Receivables Financing 3 Plc
      MONDAY, 09/12/2024 - Scope Ratings UK Ltd
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      Scope has completed a periodic review for Wolf Receivables Financing 3 Plc

      No action has been taken on Class A notes following the periodic review.

      Scope Ratings UK Limited (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 periodic 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 periodic review.

      Periodic 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 methodology/ies, including key rating assumptions and model(s). Scope publicly announces the completion of each periodic review on its website.

      Scope completed the periodic review for Wolf Receivables Financing 3 Plc on 3 December 2024. The credit rating remains as follows:

      Class A (XS2712625669), GBP 85,263,848 outstanding: A+SF

      Class B (XS2712625743), GBP 126,560,000 outstanding: not rated


      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 action connected with this monitoring note along with the associated rating history can be found on www.scoperatings.com.

      Key rating factors

      The key rating drivers remain aligned with those disclosed by Scope at closing (2023). Scope conducted the periodic review considering the investor and servicer reports up to the payment date of 20 November 2024.

      Class A has amortised by 28.5% since closing and its credit enhancement has increased from 51.5% to 60%. Class A is well protected against higher interest rates since current cap notional is above the outstanding amount. Cumulative collection ratio is 97.8% as gross collections are slightly below the projected collections in the business plan. Senior expenses are in line with Scope’s expectations at closing.

      The rating also addresses transaction’s exposure to key counterparties including risk due to the servicer (Lowell Financial Ltd), which has increased since closing as evidenced by the deterioration of the public ratings of the servicer group entity (Garfunkelux Holdco 2 S.A.). Scope has updated its commingling risk analysis considering these developments.

      Mitigants against operational risk due to the servicer disruption are still deemed effective. Scope considers the occurrence of servicer termination event due to the servicer group entity’s potential debt restructuring unlikely. Servicer disruption risk is further mitigated by the presence of replacement servicer facilitator and agreements that ensure the replacement of the servicer within sixty calendar days in case of a servicer termination event. Debtor collections are directed to a trust account held for the benefit of the issuer, from which there are weekly sweeps to the issuer’s transaction account. Lastly, liquidity reserve covers around four months of senior expenses and Class A coupon by Scope’s estimations. Scope continues to monitor servicer group entity’s credit situation.

      The methodologies applicable for the reviewed rating (General Structured Finance Rating Methodology, 6 March 2024; Non-Performing Loan ABS Rating Methodology, 2 August 2024; 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 UK Limited at 52 Grosvenor Gardens, London, SW1W 0AU, +44 207 8245180.
      Lead analyst Mirac Ugur, Senior Analyst

      © 2024 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings GmbH, Scope Ratings UK Limited, Scope Fund Analysis GmbH, Scope Innovation Lab GmbH and Scope ESG Analysis GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided ‘as is’ without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or other damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party as, opinions on relative credit risk and not a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings GmbH at Lennéstraße 5, D-10785 Berlin.

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