Accredited Home Lenders, the San Diego-based nonprime mortgage lender, closed its final securitization of first lien mortgage loans last week, a $1 billion securitization that will be its final deal in a year that saw the company shatter its yearly high for securitization volume. Accredited securitized over $3.2 billion in 2004 and Executive Vice President Ray McKewon says his goal for 2005, is to exceed that amount. "We hope to grow [our] portfolio faster than we were able to keep in 2004. [We] hope to secure more in 2005," said McKewon.

McKewon said the increasingly large deals are part of the firm's plan to grow its portfolio through quarterly securitizations and 2004 was the first year Accredited completed deals in all four quarters. Absent a market disruption, added McKewon, Accredited plans to continue its quarterly securitization plan into 2005, and he hopes each of its quarterly deals in 2005 will total the size of the 2004-4 deal.

That will depend on the firm's origination volume and whether or not it can keep its debt-to-equity ratio in the area of 14-or-16 to one. If leverage gets higher than that level, McKewon says the company may have to throttle back the sizes of its deals. McKewon also said unforeseen factors such as general economic conditions, real estate values and competition will affect whether Accredited can reach its goal for 2005.

The most recent deal, which priced Nov. 11, utilized a senior/subordinated structure, just the issuer's third ever. Since ditching off-balance-sheet accounting, Accredited is entitled to all amounts received after the payment of principle and interest on the notes, and after the satisfaction of certain credit enhancement requirements.

Copyright 2004 Thomson Media Inc. All Rights Reserved.

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