Accredited Selling $2.7B in Loans; Stock Rises

Hoping to bolster its liquidity, Accredited Home Lenders says it has found a buyer for $2.7 billion in "loans held for sale" but will take a $150 million hit on the deal.The San Diego-based subprime firm said the mortgages are being sold at a "substantial" discount. The identity of the buyer was not disclosed. The nondepository said the assets are being sold "to alleviate recent pressures from margin calls" from its warehouse providers. Terms of the sale include a holdback reserve of $40 million "to satisfy all future claims against the loans, including early payment defaults," the company said. "Claims in excess of the holdback reserve will have no recourse against the company." The sale is expected to close in the next few days. At deadline time its shares were rallying, up 20% to $11. A few days ago the stock hit a 52-week low of $3.77. The company also said it will not file its annual 10-K on time. Accredited can be found online at http://www.accredhome.com.