Dental and medical equipment lessor HPSC Inc is planning a term securitization within the next few months, but has yet to choose an underwriter. The company last graced the market in December 2000, with a $500 million offering via Credit Suisse First Boston.
Meanwhile, the Boston-based company reported last week that a former employee had fraudulently siphoned $5 million from its accounts receivables factoring program over the past four to five years.
Though the former employee worked for American Commercial Finance Corp. - described as HPSC's "asset-backed" lending subsidiary - the incident was in no way associated with the HPSC's securitization programs or any of its bank lines, according to company Chairman John Everets. Further, PricewaterhouseCoopers, which conducted the investigation, found "no material weaknesses in controls at any level, other than the one factoring account," Everets stated in an investor conference call.
The defalcation was part of a complex scam executed by a single employee who was a CPA. HPSC has already filed a claim with an insurance provider, from which it hopes to recoup $1 million. Cash from the insurance and any recoveries will be accounted for as income on its balance sheet during the relevant reporting periods.
In addition to its term program, HPSC has a $385 million securitization conduit facility with MBIA.