Fitch Rates AMRESCO Independence Funding Series 2000-1.Business Editors CHICAGO--(BUSINESS WIRE)--Sept. 28, 2000 Fitch has assigned a `AAA' rating to the AMRESCO Independence Funding Inc. SBA SBA abbr. Small Business Administration Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government loan-backed adjustable rate Adjustable rate Applies mainly to convertible securities. Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on Treasury bonds or notes. Certificates, Series 2000-1 Class A certificates and a rating of `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. +' to the Class M certificates. Principal and interest are paid to the holders of the certificates on the 15th of every month following the date of issuance. The Class A and M certificates will pay annual interest rates of 7.656% and 8.90%, respectively, during the initial accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. period. Thereafter, the Class A certificates will pay a per-annum interest rate equal to the prime rate less 185 basis points. The Class M certificates will pay a per-annum interest rate equal to the prime rate less 60 basis points. The SBA loans are sold to the trust by AMRESCO Independence Funding Inc. The certificates were privately placed by Prudential Securities Inc. The applicable interest rate earned on the Class A and Class M certificates will be adjusted quarterly on the first business day of every January, April, July and October using the lowest prime lending rate The lowest rate of interest that a financial institution, such as a bank, charges its best customers, usually large corporations, for short-term unsecured loans. The prime lending rate is an economic indicator and is often used as a measuring point for adjusting interest published in the eastern edition of The Wall Street Journal on the applicable adjustment date. Principal payments on the SBA loans are passed through to the holders of the certificates on a pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. basis with the holders of the guaranteed portions of the loans. The `AAA' rating on the Class A certificates and the `BBB+' rating on the Class M certificates are based on the following: -- Aggregate credit enhancement in the form of subordination, a spread account and excess spread; -- The characteristics of the pool of loans being purchased by the trust; -- The low delinquency and default history of the AMRESCO Independence Funding Inc.'s SBA loan portfolio, as well as the historical performance of SBA 7(a) Unguaranteed Loans of the Small Business Administration; -- The loan origination and servicing policies and procedures of the AMRESCO Independence Funding Inc; and -- The analysis of the legal and financial structure of the transaction. Aggregate 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 for the Class A certificates of 11.75% on the date of issuance and 15.50% thereafter is provided through subordination from the Class M and the unrated Class B certificates and a spread account. Aggregate credit enhancement for the Class M certificates of 3.75% on the date of issuance and 7.50% thereafter is provided through subordination from the Class B certificates and a spread account. In addition, the certificates will benefit from excess spread on both the guaranteed and unguaranteed portions of the underlying SBA loans. Fitch is an international rating agency that provides global capital market investors with the highest quality ratings and research. With dual headquarters in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and London and a major office in Chicago, Fitch rates entities in 75 countries and has some 1,100 employees in more than 40 local offices worldwide. The agency, which is a combination of 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 and Duff & Phelps Credit Rating Co., provides ratings for Financial Institutions, Insurance, Corporates, Structured Finance, Sovereigns and Public Finance Markets worldwide. |
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