Delta Financial Corp. sold $400 million of securities backed by closed-end home equity loans last week though its subsidiary Delta Funding Corp.
The deal was underwritten by Lehman Brothers and co-managed by NationsBank Montgomery Securities, Prudential Securities Inc., First Union Capital Markets Inc., and First Chicago Capital Markets Inc.
Delta used a hybrid structure, issuing senior and subordinate tranches and wrapping the senior piece with credit enhancement.
The deal was well subscribed, said chief executive Hugh Miller, and was rated by Standard & Poors and Moodys Investors Service.
Delta's ability to sell the deal "shows tremendous confidence from investors," said Mr. Miller.
Home equity lenders have suffered in recent months as investors fled from the asset-backed securities market.