A pair of cash-strapped issuers announced fresh injections of liquidity last week, as AmeriCredit Corp. set up a $1 billion whole-loan sales facility and The Metris Companies secured a new ABCP conduit facility. For both lenders, each in the midst of reorganizations, the developments were positives that caused both companies stock prices to spike - 75% in the case of Metris.

Metris actually had two significant announcements last Wednesday. In its most recent 8-K filing it first declared that the Office of the Comptroller of the Currency (OCC) had dissolved the regulatory agreement signed last April and this allowed its bank subsidiary, Direct Merchants Bank, to pay the parent a $155 million dividend.

The conduit facilities, totaling $850 million, were set up with a number of undisclosed bank syndicates. The programs are secured by receivables at the Metris Master Trust level. In tandem with these conduits being set up, Metris said it is closing its $150 million unsecured revolving facility.

Metris isn't completely off the hook, however, as it announced that a new regulatory agreement had been reached with the OCC. While the new agreement set up new restraints for Metris, such as limiting the size, by total assets, to which the bank may grow, the dividend payment allowance is added liquidity on a quarterly basis.

Fresh off announcing the week before that it was on target to complete its planned restructuring by the 3Q03 deadline, AmeriCredit announced it closed its first-ever whole loan purchase facility, with which it can sell receivables on a revolving basis. Deutsche Bank Securities set up the facility for AmeriCredit.

Under the facility agreement, AmeriCredit retains the servicing rights for the loans transferred to Deutsche Bank, for a 225 basis point fee.

"This funding option allows us to permanently finance our receivable inventory while we continue to pursue opportunities in the securitization market," said CFO Daniel Berce.

Additionally AmeriCredit is still expected to bring to market a new term ABS, via Credit Suisse First Boston and Deutsche Bank, the timing for which has been delayed for undisclosed reasons. AmeriCredit's first auto loan ABS, reported to feature a new surety provider, is seen totaling approximately $1 billion.

Copyright 2003 Thomson Media Inc. All Rights Reserved.


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