Bear Stearns Completes Encore Acquisition

Bear Stearns & Co., New York, has completed the purchase of the ECC Capital Corp. subprime mortgage banking platform.The unit, known as Encore Credit Corp., will retain its brand name, and Shabi Asghar, who has resigned as president and co-chief executive of ECC, will be Encore's president and chief executive. Bear Stearns paid $26 million for Encore. The purchase price was credited against certain amounts owed to Bear Stearns, including warehouse borrowings, because Bear Stearns had agreed to acquire ECC's loan production from Oct. 10, 2006, until the sale closed on Feb. 9. Because loan sale prices were lower than anticipated, ECC owed $33 million to repay the outstanding warehouse borrowings, so Bear Stearns received a payment of $7 million from ECC. ECC had intended to make a distribution of $0.80 per share to its shareholders within 30 days of the closing of the asset sale. For a number of reasons, ECC said it might not be able to make a distribution to shareholders prior to March 30. It has already made a distribution of $0.24 per share, which counts toward a total eventual distribution of $1.60 per share. Roque Santi, formerly ECC's chief financial officer, is the REIT's new president. Steve Holder remains as chairman and chief executive. Bear Stearns can be found online at http://www.bearstearns.com, and Encore can be found at http://www.encorecredit.com.