American Residential Investment Trust Inc. announced last week that it completed a $394.1 million residential mortgage securitization through its wholly owned subsidiary American Residential Eagle Inc.
Bear, Stearns & Co. was the lead underwriter for the collateralized mortgage obligation, with First Union Capital Markets and Morgan Stanley Dean Witter acting as co-managers.
The securitization consists of two classes of American Residential Eagle Collateralized Home Equity Bonds, Series 1999-2: Class A-1 consists of one-month LIBOR floating rate bonds collateralized by a pool of adjustable-rate, first-lien residential mortgage loans. Class A-2 consists of fixed-rate bonds collateralized by a pool of fixed-rate, first-lien residential mortgage loans. Substantially all of the mortgage loans were originated and are being serviced by either Option One Mortgage Corp. or Countrywide Home Loans Inc.
Moody's Investors Service and Standard & Poor's Ratings Group have rated both classes of bonds triple-A. Approximately 25% of the mortgage loans are covered by a private-mortgage insurance policy issued by Radian wherein mortgages with loan-to-value ratios above 80% are insured' to the 60% level in the event of a loss or default.
"During the last nine months we have made tangible progress in solidifying our residential mortgage asset base and in mitigating balance sheet risk," said John M. Robbins, chairman and CEO of American Residential Investment Trust. "This securitization, along with the other securitizations completed in 1998 and 1999, helps insulate the company from liquidity risk and provides attractive long-term financing.
"We now have a portfolio of over $1 billion funded entirely through equity and securitized debt. Recent portfolio growth and this securitization are milestones in our strategic plan."
American Residential Investment Trust, Inc. is a real estate investment trust that invests primarily in non-conforming, residential mortgage assets.