Nomura securitizes high-risk loans.

Nomura Securities International is jumping into the business of securitizing mortgages made to borrowers with shaky credit records.

Arbor National Mortgage, Westbury. N.Y., and Admiral Mortgage Co. San Marino. Calif., will be the first to sell loans through the conduit.

Gaining in Popularity

Nomura is negotiating with other lenders and hopes to have six originators feeding loans into the conduit by the end of the year, said Thomas Borer, a vice president at the firm.

Securitization of mortgages to B and C borrowers - those with blemished credit records - is increasingly popular, partly because the mortgages, and hence the securities, have higher yields than conventional paper.

A number of investment concerns are said to be in the process of setting up programs to bring B and C loans to a yield-starved market.

Beginning Sept. 1, Arbor for the first time will offer mortgages to B and C borrowers, according to Nancy Boles, a senior vice president. Arbor will service all the loans it provides to Mew York-based Nomura. Admiral has been originating B and loans for about five years.

The Nomura Securities program will not issue securities for about two months but eventually plans to issue about $25 million a month from each participating mortgage bank, according to Mr. Borer.

In order to provide a buffer from local economic downturns, the Nomura conduit will try to develop a geographically diverse stable of lenders.

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