Springleaf Finance Corp., the subprime lender that’s been raising cash to repay maturing debt by packaging older mortgages into bonds, sold home-loan notes in a $1 billion securitization.
A $500.7 million slice of the transaction granted AAA ratings by Standard & Poor’s priced to yield 1.23 percent, or 0.85 percentage point more than benchmark rates, a person familiar with the offering said. The notes have a projected average life of 1.85 years and 51 percent of credit enhancement, or buffer against losses on the underlying loans, according to the person, who asked not to be identified because they weren’t authorized to speak about the transaction.
The company, which is mostly owned by Fortress Investment Group LLC, completed $3 billion of securitizations tied to older mortgages in four transactions in 2011 and 2012, according to data compiled by Bloomberg. The Evansville, Indiana-based lender’s corporate bonds have been the best performing this year among the top 50 U.S. high-yield issuers.
Springleaf sold $604 million of bonds backed by subprime personal loans in February, the first deal of its type in at least 10 years. The firm exited real-estate lending at the start of last year to focus on other consumer financing and its insurance operations. Bank of America Corp. and Credit Suisse Group AG managed its latest offering, the person said.