ContiMortgage Prices $400 Million Senior/Subordinated Home Equity Loan ABS.NEW YORK--(BUSINESS WIRE)--Jan. 30, 1997--ContiMortgage Corporation, a unit of 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 priced a $400 million Asset Backed Security issue backed by home equity loans. This issue, their first for 1997, is unique in that it has been structured using subordinated classes as 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 , as opposed to a 100% surety wrap, the Company said. The bonds were issued through ContiMortgage Home Equity Loan Trust 1997-1 and included 12 tranches. The first 9 classes (Class A-1 through Class A-9) were rated Aaa/AAA, the mezzanine classes (Class M-1 and M-2) were rated Aa2/AA and A3/A, respectively, and the subordinated class (Class B) was rated Baa3/BBB by Moody's and Fitch. All classes of certificates pay interest at fixed rates at yields from 5.82% to 7.71% for Classes A-1 through A-9, and yields of 7.48%, 7.73% and 7.98% for the M-1, M-2 and B Classes, respectively, "The deal was received exceptionally well, resulting in historically tight spreads," said John Banu, Senior Vice President, ContiFinancial Corporation. "By introducing a natural 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. along with some higher yielding sub pieces, ContiMortgage was able to broaden the market for its bonds, increasing investor demand and tightening spreads," he added. The offering was led by Greenwich Capital Markets, Inc., with Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. and ContiFinancial Services Corporation co-managing the issue. 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 subsidiaries, is a leading originator, purchaser, seller and servicer of home equity loans made to borrowers whose borrowing needs may not be met by traditional financial institutions. In addition, ContiFinancial provides financing, 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. and, through ContiFinancial Services Corporation, bond placement services to originators of a broad range of loans, leases and receivables, including home equity loans, adjustable rate mortgages, sub-prime and non-prime auto loans, home improvement loans, franchisee loans, time-share loans, equipment leases and multi-family and other commercial real estate mortgage loans. CONTACT: ContiFinancial Corporation John Banu, 212/207-2840 |
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