Accredited Securitizes $707.2 Million of Mortgage Loans under a Newly Formed REIT Subsidiary.Business Editors SAN DIEGO--(BUSINESS WIRE)--May 26, 2004 Accredited accredited recognition by an appropriate authority that the performance of a particular institution has satisfied a prestated set of criteria. accredited herds cattle herds which have achieved a low level of reactors to, e.g. Home Lenders Holding Co. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : LEND), a national non-prime mortgage lender based here, has closed a securitization of approximately $707.2 million of first priority residential mortgage loans through Accredited Mortgage Loan REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). Trust, a newly formed real estate investment trust (REIT) subsidiary of Accredited Home Lenders, Inc., the operating subsidiary of Accredited Home Lenders Holding Co. The REIT subsidiary was established this month, primarily to provide flexibility in structuring securitizations and thereby reduce long-term funding costs. Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Jim Konrath said: "We have created this REIT subsidiary initially as a vehicle to reduce the funding costs for loan securitizations. The REIT subsidiary may also provide Accredited with a number of other potential advantages in future transactions." The lead manager for the transaction was Credit Suisse First Boston Credit Suisse First Boston was originally the trading name of the Financière Crédit Suisse-First Boston, a London-based 50-50 investment banking joint venture formed in 1978 between the First Boston Corporation and Credit Suisse. , with Morgan Stanley, Goldman Sachs & Co. and Banc of America Securities acting as co-managers. Two classes of notes, totaling $684.9 million, were issued in the securitization, each backed primarily by a pledge of one of two groupings of the mortgage loans. The mortgage loans backing the Class A-1 Notes conform to principal balance limits and other investment requirements of Freddie Mac Freddie Mac: see Federal Home Loan Mortgage Corporation. and Fannie Mae Fannie Mae: see Federal National Mortgage Association. . The notes are guaranteed as to the timely payment of interest and as to specified payments of principal pursuant to the terms of a note insurance policy issued by Financial Guaranty Insurance Company. Each class of the notes is rated "AAA AAA: see American Automobile Association. (Triple A) A common single-cell battery used in a myriad of electronic devices of all variety. Like its double A (AA) cousin, it provides 1.5 volts of DC power. When used in series, the voltage is multiplied. " by Standard & Poor's Ratings Services and "Aaa" by Moody's Investors Service Moody's Investors Service A leading global credit rating, research and risk analysis firm. Moody's Investors Service A leading firm engaged in credit rating, risk analysis, and research of fixed-income securities and their issuers. , Inc.
Original Note Price to Final Stated
Class Principal Balance Interest Rate the Public Maturity Date
A-1 $342,200,000 1 Month LIBOR + 0.29% 100% July 25, 2034
A-2 $342,720,000 1 Month LIBOR + 0.30% 100% July 25, 2034
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Total $684,920,000
The securitization is structured as a financing by Accredited with the result being that both the mortgage loans and the debt represented by the notes remain on Accredited's consolidated balance sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. . As payments are made on the underlying mortgage loans over time, Accredited is entitled to amounts remaining after payment of the notes and the expenses of the securitization, and after the satisfaction of certain credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing requirements. Accredited used the proceeds from the securitization primarily to repay warehouse financing for the mortgage loans. Copies of the prospectus and supplement relating to the notes may be obtained from Accredited's Investor Relations Investor relations The process by which the corporation communicates with its investors. Department, 15090 Avenue of Science, San Diego, CA 92128. Forward-Looking Statements Certain matters discussed in this news release constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include statements regarding anticipated securitizations, funding costs and future transactions. Actual results and the timing of certain events could differ materially from those projected in or contemplated by these forward-looking statements due to a number of factors, including but not limited to: interest rate volatility and the level of interest rates generally; general political and economic conditions; the sustainability of loan origination volumes; the availability of financing for the origination of mortgage loans; the ability of the company and its subsidiaries to sell or securitize mortgage loans; changes in federal and state laws; the ability of the company and its subsidiaries to grow their portfolios and access the capital markets and other risk factors outlined in Accredited Home Lenders Holding Co.'s annual report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 26, 2004, its report on Form 10-Q filed with the SEC on May 17, 2004 and other SEC filings. About Accredited Home Lenders Accredited Home Lenders Holding Co. is a nationwide mortgage banking company that originates, finances, sells, securitizes and services non-prime mortgage loans secured by single-family residences. The company is headquartered in San Diego. Additional information may be found at www.accredhome.com. |
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