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CAPSTEAD SECURITIES IV $350 MILLION SERIES 1992-IV 'AAA' BY FITCH -- FITCH FINANCIAL WIRE --

   CAPSTEAD SECURITIES IV $350 MILLION SERIES 1992-IV 'AAA' BY FITCH
                    -- FITCH FINANCIAL WIRE --
    NEW YORK, March 30 /PRNewswire/ -- Capstead Securities Corp. IV's, $350 million collateralized mortgage obligations Series 1992-IV are rated 'AAA' by Fitch.
    The rating takes into account the characteristics of the underlying collateral as well as the level of credit support.  Fitch also believes that cash flow from the loans will be sufficient to cover principal and interest on the bonds and that the bondholders are legally insulated from bankruptcy concerns.  The prudent underwriting standards developed by Capstead Mortgage Corp. (CMC) for acquiring mortgage loans enhances the credit quality of the pool further.
    The pool consists of approximately 1,139 conventional, fixed-rate mortgage loans.  They generally have 30-year original terms and are secured by first liens on one- to four-family residential properties. The low weighted average loan-to-value (LTV) ratio of approximately 72 percent, combined with all of the loans being secured by owner-occupied properties, mitigates the potential for defaults and losses. Additionally, approximately 70 percent of the pool is located in California.  Therefore, losses arising from loan defaults should be comparably lower than those of other regions due to the state's economic strength and diversity.  These factors are reflected in the low level of credit enhancement.
    Credit enhancement will be provided by a 9.5 percent pool insurance policy issued by General Electric Mortgage Insurance Corp. (GEMICO). Additionally, special hazard losses will be covered by two special hazard insurance policies issued by Aetna Casualty and Surety Co., and a bankruptcy account will be established by the trustee, with funds deposited by CMC, to cover losses due to bankruptcies.  Fitch believes the loss coverage provided by these sources is more than sufficient and supports the 'AAA' rating.
    CMC's underwriting standards generally conform to FHLMC and FNMA guidelines with the exception of initial principal balances.  The guidelines were developed based on anticipated requirements of insurers and management's analysis of rating agency criteria.  Fitch believes that CMC's underwriting standards contribute to the pool's overall credit quality and will have a positive impact on its performance.
    -0-                      3/30/92
    /CONTACT:  Alexander K. Zabik or Michele J. Loesch of Fitch, 212-908-0500/ CO:  Capstead Securities Corp. IV ST: IN:  FIN SU:  RTG SM -- NY099 -- 3113 03/30/92 17:51 EST
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Publication:PR Newswire
Date:Mar 30, 1992
Words:378
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