IMC Raises $228M Securitizing Expected Profits

IMC Mortgage Corp. raised $228 million by selling investors securities backed by the expected profits on securitizations.

The IMC Excess Cashflow Securities are backed by interest-only and residual certificate assets from 11 loan securitizations.

Tampa-based IMC sold off 85% of the certificates, a significantly larger portion than Contifinancial Corp. sold off in similar deal.

Securitizing such assets allows home equity lenders, who have traditionally been a negative cash-flow group, to pull in more capital immediately for the loans that they make, without selling these loans off. It also allows them to transfer the risk of loans' future performance off their books.

The securities were purchased by private investors.

The transaction is noteworthy in part because of the large amount of risk that the investors bought. "Eighty-five percent is a lot. That's pretty big for a relatively new company," said Kevin Spinner, analyst with Keefe, Bruyette & Woods, New York.

IMC is only four years old, he noted. "No one else out there but the Money Store could do a transaction that large," Mr. Spinner said.

Fitch Investors Services assigned the notes a BBB rating and the certificates a BB.

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