Former New Jersey Gov. Jim Florio's municipal asset management firm XSPAND, has its first transaction in the ABS market, a $111.2 million California tax-lien offering dubbed PFC Tax Receivables Trust 2002-A - PFC standing for XSPAND parent Plymouth Financial Co. The trade, backed by delinquent tax liens due school districts on primarily residential properties, is led by WestLB and boutique shop Scura, Rise & Partners.

The tax is assessed yearly by the county collector, although there is no followup on behalf of the collector, meaning no need for a servicer, according to Moody's Investors Service. XSPAND, in its role as administrative agent, is responsible for coordinating payments from the districts as they are paid by the county. Collections peak in the first six months of the tax being assessed, leveling out to 10% to 15% of collections in months nine through 12.

Should a homeowner neglect to pay the tax, a 10% penalty is assessed and 1.5% interest is tacked on monthly. The lien can be enforced by foreclosure on the property if delinquent for five years. The tax, however, is limited by law to just 1% of the property value, notes Moody's in its presale report, increasing the likelihood of payment on behalf of the homeowner.

Moody's did not take foreclosure collections into account, as the 18.5- month average seasoning of the delinquent loans leaves too large a window (five years plus) to force a liquidation of the property.

For enhancement, Moody's stipulated a reserve fund equal to at least six months of interest payments for the first year of the deal life, expanding to nine months excess interest after one year. But, unlike previous New York tax lien securitizations, the 64.5% concentration of residential obligations leads to lower losses and loss severity.

Despite limited year-to-year performance data, Moody's reports that over a five-year to six-year period, cumulative collections have topped 95% of delinquent balances. Moody's used this data to stress for high defaults as well as both high and low prepayments.

XSPAND, based in Morristown N.J., was founded in 2000 with the purpose of assisting municipalities in maximizing tax revenues. As governor of N.J., Florio was best known for raising the state sales tax and was subsequently voted out of office in 1994 after one term.

Scura Rise is headed by Paul Scura, who worked as a senior manager in the securitization group at Prudential Securities before the firm exited the business almost three years ago.

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