Quarterly issuer of home equity loan-backed paper, Centex Corp., is mulling its first-ever senior/subordinated structure, according to a company source, who added the decision is based strictly upon cost-benefit analyses rather than any benefits of tapping a new investor base.

"Each of the deals we have done, Centex evaluates senior/sub structure versus a wrap. The decisions have been based on economic analysis," said Jeff Upperman, managing director of structured finance for the Dallas-based homebuilder.

Upperman noted that prior to each of the 13 home-equity loan securitizations to date, Centex had considered senior/sub issuance, "but we had never done one because surety fees have been steadily declining." Upperman credited the price declines to competitive pressures.

But the benefits of tapping the subordinated buyer investor base can not always be measured by economic analysis, as sub-prime auto lender AmeriCredit Corp. found out with its second-ever senior/sub structure, which priced April 20. The offering's size was doubled to just over $1 billion, from the initial $495 million, due to strong demand for the scarce subordinated paper in the portfolios of subordinated buyers.

Centex does have plans to bring a deal before the end of the second quarter, which historically have been in the $400 million to $500 million range. Although no mandate for this offering was made public, Centex issues via a rotating underwriting group, consisting of Banc of America Securities, Lehman Brothers, JP Morgan Securities (Formerly Chase Securities Inc.) and Salomon Smith Barney.

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