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MARGARETTEN FINANCIAL CORP. $40 MILLION PREFERRED STOCK RATED 'BBB-' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Sept. 21 /PRNewswire/ -- Margaretten Financial Corp.'s new $40 million preferred stock is rated "BBB-" by Fitch. The preferred stock issuance will be used for possible servicing acquisitions and to initiate repurchase of up to 2 million shares of common stock. The preferred stock is non-callable for five years.
 The rating is based on the company's sound balance sheet, solid management experience, and strong retail operation. Offsetting these positive factors are the rapid servicing growth through acquisitions and the cyclical nature of the business. The credit trend is stable.
 Margaretten Financial expects to report a loss in the third quarter and roughly break-even earnings for the year as a result of the previously announced third-quarter $60 million charge against its purchased servicing asset due to current purchased mortgage servicing rights impairment and provisioning for further prepayments. However, cash flow, which will be unaffected by these non-cash charges, remains good. For 1993's first six months, cash flow was $39.1 million compared to $16.8 million for the same period in 1992. Following the charge, the company's servicing asset, as reflected on the balance sheet, will be reduced to a conservative 75 basis points compared to 109 basis points at Dec. 31, 1992. Leverage will remain moderate.
 The company maintains a $15.3 billion servicing portfolio as of June 30 and originations remain strong with $4.8 billion of production or 2.2x runoff for the six months ended June 30. Retail production continues to be a source of strength for the company. With 63 branches nationwide, the retail network originated $2.9 billion of mortgage loans for the first six months of 1993.
 -0- 9/21/93
 /CONTACT: Teri L. Seelig, 212-908-0638, or Felix Huang, 212-908-0621, both of Fitch/
 (MRG)


CO: Margaretten Financial Corp. ST: IN: FIN SU: RTG

TW -- NY062 -- 4207 09/21/93 13:29 EDT
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Publication:PR Newswire
Date:Sep 21, 1993
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