Exeter Finance Corp. can now issue public securitizations, said Ben Miller, the company’s senior vice president and treasurer.
“One of the questions we’re always getting from investors is: ‘How can I get more information?’” Miller said. “Exeter itself has an SEC-approved shelf. We haven’t started to use it yet, but that’s going to be coming in the not-too-distant future, and we’re hoping to use that as a method of getting more information to investors within the subprime world.”
Previously, issuances from Exeter have been designated as 144A securities — private issuances that do not need to be registered with the Securities and Exchange Commission. Registering with the SEC also means that Exeter will have to include loan-level data for the loans in any trust, going forward.
“There will be a greater amount of data needed to issue under a public shelf, but the investor pool for public deals is larger than [the private deals],” Miller told AFN. “This gives Exeter the opportunity to have a wider audience of investors looking at Exeter issuances.”
Exeter hopes to spur investor interest in lower rated bonds by including the asset-level data, Miller said. Exeter does not have a “firm timeline” for issuing its first deal, though, as the company will not issue before it has “complete confidence that the new data required to be disclosed is fully captured and processes are put in place to ensure that this data can be captured in all future months,” Miller said.
The data now required under Reg AB II is aimed at increasing transparency for investors, and includes loan terms; scheduled payment amounts; how payment terms change over time; geographic location of the collateral; LTVs; the performance of each asset over time; and loss mitigation efforts by the servicer to collect amounts past due, as well as the losses passed on to investors.1 - Reader Likes This Post