A $5.7 billion portfolio and a wholesale mortgage operation will trade hands in two upcoming acquisitions.
Credit-Based Asset Servicing and Securitization LLC, or C-BASS, announced that it will acquire Fieldstone Investment Corp. in a transaction expected to occur next quarter.
C-BASS has agreed to pay a 112 percent premium per share over Fieldstone's closing stock price on Thursday, but will reduce the per share purchase price of $5.53 by 20 cents if Fieldstone does not complete settlement of certain litigation pending prior to the merger.
"We believe the significant premium to the market price that C-BASS is offering to our stockholders is the best opportunity for our stockholders to recognize value in this very challenging time in the nonprime mortgage industry," said Michael J. Sonnenfeld, Fieldstone president and chief executive, in the announcement. "We believe that we will be more successful building our origination business by integrating our platform with C-BASS and Litton and their industry leading analytics, servicing and loss mitigation capability."
Upon merging, C-BASS and subsidiary Litton Loan Servicing will manage $5.7 billion of Fieldstone's serviceable loans, according to the announcement.
C-BASS, which claims it is the established leader in servicing and securitizing credit-sensitive residential mortgages, said acquiring the primarily nonconforming lender supports its strategy of aligning with companies that have significant investments in mortgage securities so that Litton can enhance the underlying value of the securities.
"We believe that Fieldstone's origination business will be stronger as a result of our affiliation, and we look forward to the opportunity to acquire a portion of Fieldstone's loans for the C-BASS portfolio on an ongoing basis," C-BASS said in the written statement.
In a separate announcement, New York Mortgage Trust Inc. said Tribeca Lending Corp. agreed to buy substantially all the assets of New York Mortgage Co.'s wholesale lending arm in a transaction expected to close by the end of the month.
Tribeca will pay 50 basis points of the principal amount of the pipeline loans closed within 90 days after the closing of the transaction, the book value of fixed assets totaling approximately $485,000 and a pipeline mortgage adjustment marking all locked pipeline loans to market, New York Mortgage said.
Tribeca will assume the operating assets, including the existing pipeline of locked and unlocked mortgage applications, and certain lease liabilities related to New York Mortgage's Bridgewater, N.J. office and the pipeline loans. It will also make employment offers to approximately 60 employees.
The wholesale operation was originally launched in July 2005 to generate high-quality, adjustable-rate loans and Alt-A loans, the company announced at the time.
"While our initial efforts will be concentrated on the East Coast, from Maine to Florida, we will look to expand our presence to the Central and Western regions of the United States once the new division achieves profitability at the end of 2005," New York Mortgage's president at the time said in the press release.
The wholesale unit's sale follows last week's announcement that IndyMac Bank will acquire New York Mortgage's retail lending businesses.