ARC Ratings’ NPL criteria provides a consistent framework for the quantitative and qualitative assessment of each transaction. We analyse the historical performance of the originator and/or servicer and assess their ability to perform their respective functions in terms of the business strategy, their work out procedures and servicing continuity. ARC Ratings calculates transaction specific stresses based upon transaction data, independent valuations, macro-economic variables, in combination with a servicer’s historical ability to create and execute a business plan.