The Federal housing Finance Board has approved a risk-based capital structure for the Federal Home Loan Banks. The system replaces the existing "subscription capital" structure. The goal of the risk-based rule is to provide capital for the FHLBanks to pursue new mission-related business opportunities, said FHFB Chairman Bruce Morrison. The proposed rule will have a 90-day public comment period upon publication in the Federal Register.
Advanta Conduit Receivables Inc. of Spring House, Pa., has completed a $400 million securitization of mortgage loans originated by Advanta National Bank and Advanta Bank Corp. Morgan Stanley Dean Witter managed the deal, with Bear, Stearns & Co. and Salomon Smith Barney co-managing the fixed-rate group. Prudential Securities Corp. co-managed the adjustable-rate group.
The Federal Home Loan Bank of Topeka has joined the Federal Home Loan Bank System's Mortgage Partnership Finance program. The MPF, pioneered by the FHLB-Chicago, is an alternative for lenders who sell their mortgages in the secondary market. It splits the risks associated with home mortgage lending between the FHLBank and the participating member.
Duff & Phelps Credit Rating Co. has downgraded the Class A-5 of Asset Securitization Corp. Commercial Pass-Through Certificates, Series 1997-MDVII from BB to B-plus. The certificates are collateralized by seven mortgage loans on 71 properties with an outstanding principal balance of $471.8 million as of May 15. The downgrade reflects the continued decline in the operating performance of the Fairfield Inns portfolio, which consists of 50 cross-collateralized and cross-defaulted limited-service hotels in eight regions.