Dallas-based investment banking and financial services firm Southwest Securities Group (SWS) looks to throw its hat in the ABS ring as an issuer, originator and underwriter after agreeing last week to buy ASBI Holdings Inc., a holding firm for Arlington, Texas-based First Savings Bank. SWS will start to originate and securitize home equity and mortgage product by using First Savings Bank collateral, and will also underwrite its first asset-backed transaction in coming weeks.

"The purchase will really help us open up our mortgage market and mortgage business," said Dan Leland, head of fixed income, sales and underwriting.

Until acquiring ASBI, SWS had been known in the Southwest U.S. as a brokerage and investment banking house with a mortgage trading desk active in the pass-through and CMO markets. But originating and securitizing debt wasn't a priority for the company.

"As far as originating product, this would be something new for us," said Leland.

A spokesman for SWS said it was "absolutely certain" that the firm will securitize First Savings' mortgage loans acquired in the sale. This includes home equity, home improvement and more traditional mortgage-related debt. First Savings also carries consumer loans for autos, boats and vacation homes, and provides business and equipment loans to construction and other businesses. First Savings' has more than $100 million in outstanding loans, total assets of $264 million, and total deposits of $231million.

While the deal is diminutive, valued at only $140.7 million, it marks a new direction for SWS.

"This acquisition will allow us to offer banking services to our existing and future customers," said David Glatstein, president and chief executive of SWS. The purchase will enable the firm to utilize securitization as a mode of financing going ahead, he added.

On the underwriting side, the firm previously focused on managing municipals, corporate trust-preferreds and home-loan-backeds. A source close to SWS said several asset-backed deals are now being worked on in the firm's corporate finance department, one of which is around $100 million and looks to land soon. - SK

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.