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.

The deal is backed by residual interests in Paragon's four outstanding securitizations and is structured as a sequential pay transaction.

Paragon said it believes this is the first rated securitization of residuals for auto loans.

- Dave Feldheim

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.