U.S. Bancorp and subprime lender New Century Financial Corp. have executed their previously announced business arrangement.

Under it, U.S. Bancorp has bought $20 million of New Century convertible preferred stock.

The two companies are developing a cross-selling program to sell real estate loans and financial services through each other's branch system.

U.S. Bancorp may bid on certain New Century whole-loan sales transactions, with price and volume subject to agreement by the parties.

"The addition of $20 million to our equity base positions New Century with additional financial resources to capitalize on the changing industry conditions within our sector," said Robert K. Cole, New Century's chief executive.

Finance companies have suffered from a liquidity crunch in the past 12 months, and several have been forced to downsize or file for bankruptcy.

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