In a first of its kind deal, Paragon Acceptance Corp. has closed a securitization of residual interests in securitized auto portfolios, a $13.5 million transaction structured in the form of residual interest notes and privately placed by Descap Securities Inc.

The asset-backed securities were sold in one tranche and rated BBB by Duff & Phelps Credit Rating Co. The notes carried a 9.79% coupon and were reportedly purchased by two institutional investors. Paragon has retained a subordinated certificate below the Class-A notes.

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