Delta Financial recently priced its first deal since restructuring its corporate debt in August, an event marking the end of a slow-growth period for the company, according to a company source who asked not to be named.
"We're now back in growth mode, but we've always believed in controlled growth," the source said, projecting between 15% and 20% expansion per annum. Delta's origination had slowed during the second and third quarter, as the company worked to extinguish its high yield debt, essentially swapping the cashflow from its residual portfolio and other assets for its outstanding bonds (see ASR 9/10/01).
Delta's securitization was for just less than $200 million, roughly representing third quarter origination. Greenwich Capital Markets was lead manager. Both the company source and Greenwich preferred not to release pricing details, though market sources said the deal widened somewhat from initial guidance. Delta priced on Oct. 5, the Friday prior to Columbus Day weekend.
"Given the current market conditions, we were overall happy with the deal," the source said. "We had the chance, and we could have waited for a few more investors, but because of the holiday weekend, we figured, Let's price.'"
Delta had originally planned to securitize before quarter-end, but postponed its deal due to market conditions following the events of Sept. 11. Because of this, the company will consider not coming again in the fourth quarter, although Delta, like many home-equity issuers, has traditionally come to market at the end of each quarter.
"We can push a deal back now, since We've technically already securitized in the fourth quarter," the source said. "If we can take the securitizations off cycle, hopefully there'll be more demand for our product when we return."