Ocwen Financial Corp. Wednesday said it has completed a $365 million securitization of subprime loans in the United Kingdom, the largest such transaction there.

The securitization is backed by loans made by City Mortgage, the British subsidiary of Cityscape Financial Corp., an Elmsford, N.Y., subprime lender.

Ocwen, West Palm, Fla., purchased a large chunk of City's U.K. portfolio and its servicing and origination platform earlier this year after City was felled by changes in U.K. lending laws.

The securitization "reinforces Ocwen's belief that our entry into the U.K. market will be beneficial," said William C. Erbey, chief executive of Ocwen. Investor interest in the notes was "very strong," he said. "We're very pleased with the execution."

More than 80% of the notes in the securitization have been rated AAA by Duff & Phelps and Standard & Poors, and all subordinate classes are investment grade, Ocwen said.

"A lot of pairs of eyes have looked at this transaction, ours amongst them," said Robert Marshall, analyst at Duff & Phelps, London.

The rating agency had to be very diligent when reviewing the securitization, Mr. Marshall said. "Everyone knew what happened with the parent company, though we know Ocwen is a strong servicer."

Although many U.S. lenders have high hopes for the market, "it's extremely competitive and overcrowded at the moment," said Duff & Phelps' Mr. Marshall. "We're keeping our eye on it because the more competitive the market gets, the worse credit lenders write."

Greenwich Natwest, London, structured the securities, and underwrote the transaction. Greenwich Capital was the U.S. placement agent.

Ocwen plans to continue to grow its business in the United Kingdom, Mr. Erbey said, and expand its servicing platform. Through its acquisition of most of City Mortgage's assets, Ocwen became the leading originator and largest servicer in the U.K.

Increasing levels of competition in the market that lead to writing loans to lower credit borrowers are "ultimately to Ocwen's advantage," Mr. Erbey said, because of Ocwen's servicing capability.

Ocwen has considerably revamped City's accounting since its purchase, said Joseph Dlutowski, a senior vice president at Ocwen, who is running operations in the U.K.

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