Walter Industries, a modular homebuilder and seller, will attempt to attract investors in early 2000 with another of its bond offerings backed by consumer payments for the company's "build-on-your-lot homes."

Walter securitizes the revenue from its home sales through Mid-State Homes Inc., its financing subsidiary, and expects to offer a $250 million to $350 million transaction in March or April of next year.

Walter constructs modular homes "stick-by-stick," onsite for the lot owner.

Lehman Brothers has lead managed Mid-State Homes deals since 1995. The most recent priced in December 1998, and was wrapped by Ambac Assurance Corp.

Though some might lump Mid-State in with the manufactured housing sector, a source close to the company bristles at the idea, and says the differences lie in the accounting and the general way business is done.

"We're not in the same market," said the source. "You've got some manufactured housing folks recognizing profits on manufactured houses when they sell them to their dealers. The dealer is not the end customer."

The source added that Walter is not in the business of predicting how much business should occur during a particular economic cycle.

"We're not in the development business, where houses are constructed out in front of their actual sales, in anticipation of a sale sometime during a construction period," the source said. "We don't build any houses on speculation, we build them for a specific customer on his lot."

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