Fitch Affirms PHH Ratings on Positive Mortgage Operations
Fitch Ratings affirmed ratings of PHH Corporation (PHH), reflecting the mortgage operations’ improved financial flexibility. In addition to mortgage operations, PHH also runs a vehicle management business segment. Fitch kept the long-term Issuer Default Rating (IDR) at double-B-positive and the short-term IDR at B, according to a corporate release. Fitch pointed to the recent improvement of the ABS markets for the commercial fleet asset class, as well as rational pricing and higher mortgage volume as positive trends toward profitability. The action affects approximately PHH’s $1.69bn in debt, but Fitch highlighted PHH’s ability to issue $3.5bn of notes under the Term Asset-Backed Liquidity Facility (TALF) securities as a “key element” in the recovery of its profile, according to the release. For the second quarter of 2009, PHH reported $8.93bn in assets. The recent improvements in the mortgage segment appears sustainable, and the company has adequate liquidity and funding through the first half of 2010, according to Fitch. Write to Jon Prior.