Amherst Securities is preparing a $185.5 million securitization of non-performing commercial loans and repossessed commercial properties, according to a Fitch Ratings presale.

The deal is called VFC 2013-1 and it is backed by assets that were acquired, at a significant discount, by First City Financial Corporation, a subsidiary of Varde Partners and VFC  Member LP.

The underlying properties are primarily commercial and multifamily properties, which make up 85% of the portfolio.  Residential and commercial land and single-family residences represent 11% of the portfolio; non real-estate secured and unsecured loans represent 4% of the assets.

The transaction is structured as single tranche that has been rated ‘BBB-‘ with a legal final maturity of March 2026.

A non-performing loan deals’ success is very dependent on its sponsorship component.  In VFC 2013-1, First City will serve as the transaction’s repurchase guarantor in the event of any breach in representations and warranties.

First City Financial is headquartered in Waco, TX. The company was founded in 1986.  The company’s primary focus is the purchase of NPLs. According to the Fitch presale, First City Financial has invested more than$4.5 billion to acquire loans with a total unpaid balance exceeding $12.7 billion.


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