American Business Financial Services announced last week that it will report a net loss of $29.9 million for the fiscal year, primarily tied to its inability to close a securitization last quarter. In its 8-K filing with the Securities and Exchange Commission last week, ABFI indicated that its detailed full-year statement would follow shortly, which will address other aspects of its year, such as any liquidity issues associated with the inability to securitize during the second quarter (calendar).

Contributing to the loss is a pre-tax charge to the income statement of $45.2 million associated with net valuation adjustments on its securitizations, caused in large part by the spike in prepayments this year that have eaten away at retained interests. ABFI offset the initial $63.1 million adjustment to its retained securitization assets by reducing certain valuation discount rates to reflect the sustained decline in interest rates.

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.