Optimus Corp., through its wholly owned subsidiary AmeriFirst Home Improvement Co., entered the term ABS market last week with an $81 million deal backed by subprime home improvement loans. The deal was led by investment bank Harris Nesbitt Burns.
Moody's Investors Service assigned a provisional Aaa' rating to the twelve-year, single-tranche deal, thanks to a full XLCA wrap. The deal had yet to price as of press time, but talked in the 30 basis point area over one-month Libor. An official from Harris Nesbitt did not return calls by press time.
The collateral in the deal consists of fixed-rate, predominantly second-lien, home improvement loans. The AmeriFirst portfolio has an average FICO score of 663, roughly 10 basis points higher than that of subprime home equity deals, according to Moody's Assistant Vice President Olga Filipenko.
Filipenko added that since this is a first-time issuer, one of the key factors that Moody's considered was the seasoning of the collateral. At 15 months with a weighted average maturity of 93 months, the seasoning collateral was a stabilizing factor to the deal, since Optimus had recently been spun off from Pacesetter Corp., a home improvement products manufacturer and finance company that seeking to shed its finance arm.
The largest geographic concentration of the 17,476 loans in the pool is 9.88% from Texas, with 9.39% from Ohio and 7.48% from Pennsylvania. Optimus is the originator and servicer of the loans, with AmeriFirst as sub-servicer and a backup servicing arrangement with JPMorgan Chase unit Systems Services & Technologies.
Inquiries to the Omaha, Neb. of AmeriFirst were not returned by press time.
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