American Business Financial Services, Inc. Closes $376.2 Million Securitization; Deal Puts Company Past $5 Billion Mark in Total Securitized Home Equity Loans.Business Editors BALA CYNWYD, Pa.--(BUSINESS WIRE)--Dec. 23, 2002 American Business Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , Inc. (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 :ABFI), today announced that it has closed a $376.2 million public senior/subordinated mortgage loan securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. through lead manager 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. . Bear Stearns The Bear Stearns Companies, Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., one of the largest global investment banks and securities trading and brokerage firms in the world. & Co. Inc. was co-manager of the deal. ABFI has now completed 26 securitizations over the past eight years, which has resulted in the securitization of more than $5.0 billion in mortgage loans. This current deal was ABFI's third consecutive public senior/subordinated securitization, which means that the securities offered are not guaranteed by any surety or certificate insurance policies. 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 is provided through the senior/subordinated structure of the securitization. Approximately 87% of the securities issued in this securitization are rated AAA/Aaa by Standard & Poor's and Moody's. "The fact that a government-sponsored entity purchased 100% of the triple-A bonds makes us very proud of what we've been able to accomplish, and the business we have built over the years," said ABFI 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. Anthony J. Santilli. "We have just completed our eighth year of securitizing mortgage loans, and have built a loan portfolio, which we manage and service for others, of more than $3.2 billion. We believe it is that managed portfolio which will bring the Company to the position where we consistently achieve positive cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , through servicing fees and cash derived from the interest-only strips, thus creating significant value for our shareholders." American Business Financial Services, Inc. is a financial services company operating predominantly in the eastern and central portions of the United States. The Company originates business purpose loans and first and second mortgage loans through a combination of channels, including a national processing center located at its centralized operating office in Bala Cynwyd, Pennsylvania Bala Cynwyd is a village in Lower Merion Township which is located in the Main Line in southeastern Pennsylvania, bordering the western edge of Philadelphia. It was originally two separate towns, Bala and Cynwyd, but is commonly treated as a single community. , a regional processing center in Roseland, New Jersey, and several retail branch offices. Certain statements contained in this press release, which are not historical fact, may be deemed to be forward-looking statements under federal securities laws. There are many important factors that could cause American Business Financial Services, Inc. and its subsidiaries' actual results to differ materially from those indicated in the forward-looking statements. Such factors include, but are not limited to, general economic conditions, including interest rate risk, future residential real estate values, regulatory changes (legislative or otherwise) affecting the real estate market and mortgage lending activities, competition, demand for American Business Financial Services, Inc. and its subsidiaries' services, availability of funding, loan payment rates, delinquency and default rates, changes in factors influencing the loan securitization market and other risks identified in American Business Financial Services, Inc.'s Securities and Exchange Commission filings |
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