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Accredited maps $1 bln ABCP conduit

Accredited Home Lenders closed its recently created $1 billion Carmel Mountain Funding Trust extendable asset-backed commercial paper conduit last week and plans to quickly tap its full capacity, said Charlie Ryan, securitization coordinator at Accredited.

The facility cuts out some of the fees charged by warehouse lenders, making it a cheaper funding source, Ryan said. The line will also give the company diversified funding lines - up until this month, the lender obtained all of its funding through eight warehouse lines. Ryan said, however, the company does not have plans to decrease reliance on those lines. The ABCP conduit brings Accredited's total borrowing capacity to $5 billion. "We intend to utilize it to the extent that we can," Ryan said. "We'd like to get up to the billion dollars within the next two months."

The trust has a pre-funded cash reserve fund equal to 2.15% of the aggregate principal amount of mortgages it owns; the subordinated notes, accounting for 4% of the program amount, provide additional cushion. Calyon Securities is providing a market value swap for the collateral. Lehman Brothers structured the conduit while Deutsche Bank will serve as indentured trustee, collateral agent and depository.

Moody's Investors Service assigned a P1' rating to the secured liquidity notes that will be issued by Carmel Mountain. The notes are extendable ABCP with an expected maturity of up to 180 days, extendable to an additional 120 days under certain conditions.

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