It looks like collateral originated by Amresco Commercial Finance will make up the ABS market's first franchise loan-backed term deal for the year. Pricing is expected within the next few weeks, a buyside source said.
The $115 million transaction is being led by Credit Suisse First Boston, and will look similar to ACLC's previous franchise deals. The 144A offering will have a senior/subordinate structure.
Amresco was purchased out of bankruptcy last December by NCS I, which is partially owned by Fortress Investment Fund and Goldman Sachs Mortgage Co., an affiliate of Goldman Sachs.
The securitization is expected to be the last franchise deal with the Amresco stamp on it, as the company is no longer originating loans, sources said. Counting Commercial Lending Corp. deals (an affiliate of Amresco that was acquired by the company in 1997), the company had closed at least 12 securitizations, mostly out of its ACLC trust.
Despite Amresco's bankruptcy last July, the outstanding bonds have, for the most part, weathered the franchise storm. Just one of 29 classes reviewed by Moody's Investors Service immediately following the Chapter 11 was downgraded. In the first quarter of this year, franchise downgrades were the largest component of a record-setting number of negative rating actions taken (see story p. 9).
Elsewhere in franchise, it's heard that CNL Franchise Networks has placed a franchise securitization with an ABCP conduit. CNL established a $200 million warehouse facility with CSFB last summer. Also, there are still rumors that Morgan Stanley is looking to securitize its portfolio of franchise loans, some directly originated and others acquired through its past warehouse lines to lenders such as Enterprise Mortgage Acceptance Co. This deal, however, has been in the pike for the past year.
On the origination front, Shell Capital, which had been making loans to the gas station and convenience store segment (C&G), recently shut its finance operation.