There was no significant widening seen in the $682 million MSDW Capital 2003-NC3 home equity ABS marketing last week, despite that fact that Provident Bank parent company, Provident Financial Corp., restated earnings by $70 million Wednesday due to securitization-related accounting misstatements. Provident Bank is acting as servicer for the New Century Financial collateral-backed offering as well as on six outstanding Provident Auto Lease ABS Trust auto-lease securitizations, totaling roughly $1.44 billion.
Specifically, Provident said it would restate its operating results for the years 1997 through 2002, because it had erred in the accounting for nine auto-lease securitizations issued between 1997 and 1999. Subsequently, Standard & Poor's lowered its unsecured debt rating on Provident Financial Group Inc. to double-B-plus from triple-B-minus and the bank operating company's debt to triple-B-minus from triple-B. Moody's Investors Service, on the other hand, placed the senior unsecured debt rating, currently at Baa3' for the parent and Baa2' for the bank, both on watch for a possible downgrade.