As the home-equity loan sector shows increased strength, HomeGold Financial Inc. is gearing up to be a quarterly issuer going forward, starting with a transaction in March.
"We hope to be back in the market quarterly," said Kevin Mast, treasurer and chief financial officer at HomeGold.
The projected increase in issuance level can be partly attributed to HomeGold's expected merger with Columbia, S.C.-based HomeSense Financial Corp., an originator and seller of loans in the subprime mortgage market. The company recently entered into a letter of intent to join with HomeSense. Both companies hope to get HomeGold shareholder approval and to finalize the transaction by mid-April.
"HomeSense has not participated in the securitization market in the past and we have," Mast said. "We would consider putting some of their loans into some of our pools going forward."
HomeSense's origination capabilities are also seen as a plus. "They've got a very strong origination capability and a good production arm with a mix of retail and wholesale," noted Mast.
"We've got a good, solid infrastructure, so together it would be a very good fit," Mast said. "We would be able to utilize our infrastructure and expand our production through their origination sources."
HomeGold last came to market in May with a $53.9 million offering backed by home-equity loans. The two-part deal with certificates featured a financial guaranty insurance policy from FSA. The average lives ranged from 2.50 years to 2.60 years. Prudential Securities was lead manager.