Advanta subsidiary prices $700 million mortgage loan securitization.SPRING HOUSE, Pa.--(BUSINESS WIRE)--May 27, 1997--Advanta Corp. (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 : ADVNB; ADVNA ADVNA Advanta Corporation (stock symbol) ) announced Tuesday that its wholly-owned subsidiary, Advanta Mortgage Conduit Services Inc., has priced a $700 million mortgage loan securitization. Closing is anticipated to be June 17, 1997. "The record size of this transaction reflects the sustained strong performance that we are producing in our home equity business," said Milt Riseman, president of Advanta Mortgage. "I am happy to report that during May we have hit the $10 billion mark in loans we service." Advanta Mortgage Loan Trust 1997-2 will consist of fixed and adjustable-rate mortgage Adjustable-rate mortgage (ARM) A mortgage that features predetermined adjustments of the loan interest rate at regular intervals based on an established index. The interest rate is adjusted at each interval to a rate equivalent to the index value plus a predetermined spread, or loans. Certificates representing ownership interests in the Trust will be sold by Morgan Stanley & Co. as lead underwriter. J P Morgan, Lehman Brothers and Salomon Brothers are co-managers on the transaction. The effective pass-through yield on the fixed-rate loans will be approximately 7.28%, which equates to 84 basis points over the interpolated interpolated /in·ter·po·lat·ed/ (in-ter´po-la?ted) inserted between other elements or parts. 3.35 year Treasury yield. The effective pass-through yield on the adjustable rate certificates will be 24 basis points over one-month LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). . The Trust is utilizing a senior/subordinated tranche structure for the fixed-rate loan group and an AMBAC-wrapped tranche for the adjustable-rate loan group. For the fixed-rate group of loans, it is anticipated that there will be 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. , AA, A and BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. Certificates rated by Standard & Poor's, Moody's and Fitch. For the adjustable-rate group of loans, it is anticipated that there will be AAA Certificates rated by Standard & Poor's, Moody's and Fitch. Advanta Mortgage will retain the servicing and customer relationships of the loan accounts. With more six million customers, $20 billion in managed assets and over 3,600 employees at March 31, 1997, Advanta is a consumer financial services enterprise serving consumers and small businesses through high quality, innovative offerings of credit cards, mortgages, leases, insurance and deposit products. CONTACT: Advanta Corp. Janet M. Point, VP, Investor Relations, 215/444-5335 or Advanta Mortgage Mark Dunsheath, VP and Treasurer, 215/444-4745 |
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