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FUND AMERICA INVESTORS CORP. II CMOS 1993-G CLASS F & B 'AAA' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Oct. 6 /PRNewswire/ -- Fund America Investors Corp. II $129 million pass-through certificates, series 1993-G class F and B are rated "AAA" by Fitch.
 The "AAA" rating indicates Fitch's confidence that class F bondholders will receive at least $120 million in cash by Oct. 25, 2023, and the class B bondholders will receive at least $9 million in cash by April 25, 2030. The rating does not address the principal or interest composition of payments; only that the amounts above will be distributed by the dates above.
 The bonds are supported by the aggregate cash flow from a portfolio of derivative mortgage-backed securities, which will be deposited in a trust. The portfolio is composed of FNMA and FHLMC agency securities. The aggregate outstanding principal amount of these certificates is expected to be approximately $91 million, of which $48 million is due from the Resolution Funding Corp. principal only (PO) strips. The "AAA" rating on the certificates is based on the results of Fitch's cash flow analysis described below and reflects the high ratio (approximately 75 percent) of underlying aggregate principal to the size of the certificates.
 To determine a cash flow level of sufficient certainty to warrant an "AAA" rating, Fitch performed a worst-case analysis of 13 constant PSA scenarios and 13 varying interest rate scenarios. Fitch determined that the rated amount of $120 million class F certificates, and $9 million class B certificates could be paid under any one of the scenarios. Both classes maintained sufficient cash flow levels under extremely stressful interest rate and prepayment assumptions, such as high levels for LIBOR and high mortgage prepayments.
 The securities underlying the trust are made up entirely of agency- backed CMO real estate mortgage investment conduit and private mortgage- backed securities. These securities were originally issued by FHLMC and FNMA and as such are rated "AAA." The types of classes that make up the portfolio are: principal-only securities, interest-only (IO) securities, PAC IOs and IOettes (high coupon, small principal), and inverse floating rate securities. The market risk of these securities, and their effects on the yield of the certificates, depends on the rate of prepayment on the underlying mortgages and the level of LIBOR. Varying combinations of these factors will have differing effects on the performance of the securities. The most adverse being a high rate of prepayment and high LIBOR rates. Fitch's CMO Volatility analysis indicates that the class F and B certificates are sensitive to these factors.
 -0- 10/6/93
 /CONTACT: Brandon Einhorn, 212-908-0672, or Glenn Costello, 212-908-0633/


CO: Fund America Investors Corp. II ST: IN: FIN SU: RTG

TS -- NY083 -- 9489 10/06/93 16:58 EDT
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Publication:PR Newswire
Date:Oct 6, 1993
Words:442
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