Bay View Financial Corp. recently lifted a balance sheet securitization off its sheet, selling approximately $260 million worth of securitized franchise loans into the asset-backed market, according to sources familiar with the situation.

The 144A placement is backed by loans from the Franchise Mortgage Acceptance Corp. (FMAC) portfolio. Greenwich Capital Markets is lead manager with Countrywide Securities and Salomon Smith Barney as co-managers.

For regulatory capital, Bay View had securitized the loans in March 2000, receiving triple-A ratings from both Standard & Poor's and Moody's Investors Service, based on a guaranty from Financial Security Assurance.

According to a source following FMAC, the company has been trying to structure a new deal, though it has run into problems securing bond insurance at a manageable premium.

Further, depending upon the fate of Bay View, FSA could opt to transfer the servicing on the segments of FMAC's it is exposed to, an analyst said (see Franchise, ASR 1/15/01). When last contacted, FMAC's portfolio was still more than $500 million in size.

Officials at FMAC did not return phone calls as of press time.

Meanwhile, Fitch downgraded FMAC's 1996-B series class A to DDD from CC, citing a 55% rate of delinquencies, and exhausted reserve accounts.

"Unlike other FMAC securitizations, 1996-B does not provide for servicer advances as the reserve account was to act in this capacity," Fitch said in a release.

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