Springleaf Nonprime MBS Gets AAA Rating from S&P

Mortgage & Real Estate

Nonprime lender/servicer Springleaf Financial late Wednesday priced a $242 million nonprime residential MBS, at a yield of 4%, according to market reports.

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The senior bonds garnered a AAA rating from Standard Poor’s after the lender/servicer structured the deal with 51.15% in credit enhancement, according to the term sheet.

The Evansville, Ind.-based company owns roughly $11.6 billion of seasoned residential whole loans – 149,000 units.

The Springleaf offering is one of several that issuers — including Springleaf under its previous name, American General Finance — have cobbled together with older delinquent and performing loans since 2008.  Several have been issued privately, however.

Springleaf is 80%-owned by Fortress Investment Group – a company headed by former Fannie Mae CEO Daniel Mudd.

Earlier this year Springleaf filed documents with the Securities and Exchange Commission, signaling its intention to raise equity through a REIT offering. The company plans to originate and invest in nonprime residential mortgages.

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