ContiFinancial Closes on $65 Million of Net Interest Margin Notes.NEW YORK--(BUSINESS WIRE)--March 23, 1997--ContiFinancial Corporation (NYSE NYSE See: New York Stock Exchange :CFN CFN Center for Functional Nanomaterials CFN Companhia Ferroviaria do Nordeste (Brazil) CFN Commercial Fueling Network CFN Conselho Federal de Nutricionistas (Brazil) ), has today announced the closing of a $65 million issue of ContiMortgage Net Interest Margin Notes, Series 1998-A (the "Notes"). The Notes were issued by ContiSecurities Residual Corporation II, a wholly-owned subsidiary of ContiFinancial, and will be retired through monthly distributions from a pool of residual certificates (the "Certificates") which were created from previous ContiMortgage securitizations. The Notes sold were rated "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. " by Fitch IBCA IBCA International Braille Chess Association IBCA Institute of Burial and Cremation Administration IBCA Integrated Business Communications Alliance IBCA International Barbeque Cookers Association IBCA Department of Interior Board of Contract Appeals Inc., have approximately a 1.3 year average life and bear interest at a rate of 7.92%. Since certain covenants in ContiFinancial's senior debt indentures restrict the sale of residual Certificates, ContiFinancial will retain the balance of the Certificates for which Fitch has provided cash flow ratings of "BBB CF" on $110 million and "BB CF" on $95 million. The Certificates represent direct or indirect interests in certain fixed-rate and floating-rate home equity loans which were securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. in six REMIC trusts: ContiMortgage Home Equity Loan Trust 1996-2, ContiMortgage Home Equity Loan Trust 1996-3, ContiMortgage Home Equity Loan Trust 1996-4, ContiMortgage Home Equity Loan Trust 1997-1, ContiMortgage Home Equity Loan Trust 1997-4 and ContiMortgage Home Equity Loan Trust 1997-5, as to which ContiMortgage Corporation and ContiWest Corporation were sellers and ContiMortgage Corporation is the servicer. The Notes were sold privately under Rule 144A Rule 144A A Securities & Exchange Commission rule modifying a two-year holding period requirement on privately placed securities to permit qualified institutional buyers to trade these positions among themselves. by Bear, Stearns & Co. Inc. The Notes have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. absent registration or an applicable exemption from registration requirements. James E. Moore, President and Chief Executive Officer of ContiFinancial said "This is ContiFinancial's second successful net interest margin transaction and continues to be an important additional source of liquidity for the Company. Through a combination of net interest margin sales and the "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. " IO sales done at the time of the initial 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. , we are able to recover a substantial portion of the cash used by ContiMortgage and ContiWest in originating the related underlying home equity loans. Over the past 12 months we have raised approximately $245,000,000 through the sale of NIM nim 1 tr. & intr.v. nimmed, nim·ming, nims Archaic To steal; pilfer. [Middle English nimen, to take, from Old English niman; see and IO securities." ContiFinancial Corporation is a consumer and commercial finance company with headquarters in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . The Company, through ContiMortgage Corporation and other subsidiaries, is a leading originator, securitizer, and servicer of home equity loans made to borrowers whose needs may not be met by traditional financial institutions. In addition, through ContiTrade Services L.L.C., the Company provides financing and securitization services and, through ContiFinancial Services Corporation, bond placement services, to originators of a broad range of loans, leases and receivables, including loans for a variety of commercial real estate property types; home equity loans; home improvement loans; prime, sub-prime and non-prime auto loans; equipment leases; franchisee loans and time-share loans. -0- Certain statements contained in this press release, which are not historical fact, may be deemed to be forward-looking statements under the federal securities laws. There are many important factors that could cause ContiFinancial Corporation's actual results to differ materially from those indicated in the forward-looking statements. Such factors include, but are not limited to, general economic conditions, interest rate risk, prepayment speeds, delinquency and default rates, changes (legislative and otherwise) in the asset securitization industry, demand for ContiFinancial Corporation's services, the impact of certain covenants in loan agreements of ContiFinancial Corporation, the degree to which ContiFinancial Corporation is leveraged, its needs for financing, the net interest margin securities market, and other risks identified in ContiFinancial Corporation's Securities and Exchange Commission filings. CONTACT: Jerome M. Perelson Allison H. Wey n. 1. Way; road; path. v. t. & i. 1. To weigh. n. 1. A certain measure of weight. Senior Vice President Senior Vice President ContiFinancial Corporation Edelman Financial 212/207-5402 212/704-4424 |
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