Homestar Mortgage recently completed its first term securitization backed by $308 million of Alt-A mortgages and underwritten by Citigroup Global Markets, according to records filed with the Securities and Exchange Commission. This transaction is larger than the $200 million deal the company initially planned when it received regulatory approval last year (See ASR 8/11/03).

The inaugural HMAC 2004-1 transaction offered investors $285 million in triple-A rated notes supported by eight tranches of mezzanine notes. The $256 million A1 and $28.5 million A2 senior classes, each with 3.54-year average lives, priced at par with coupons of 32 and 42 basis points, respectively, over one-month Libor.

In addition, Homestar has set up a single-seller mortgage warehousing facility with Citigroup, roughly $300 million in size.

The Paramus, N.J.-based mortgage lender plans to become a regular issuer in the term market, according to Homestar's head of capital markets Jeff Pancer. A follow-up deal, also to be underwritten by Citigroup, is slated for May. No further details are available.

Privately held Homestar is a licensed mortgage broker in 42 states, with a majority of its Alt-A loans made in the Western U.S., including Arizona, California, Colorado and Nevada.

Homestar's originations are split roughly in half between refinance loans and new purchase loans, Homestar's Pancer added.

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