ECC Capital Corp., a real estate investment trust based in Irvine, Calif., has announced the completion of a $1.03 billion securitization of subprime mortgage loans.Encore Credit Receivables Trust 2005-3 contains 14 classes of notes, including what the REIT said would be deemed by investors the equivalent of a net-interest-margin security. "With the class N notes, we were able to monetize approximately $34.5 million of residual cash flow at a 5% yield, which is lower than the implied cost of funding those cash flows with our equity," said John Kohler, executive vice president of ECC Capital. "And in a traditional structure, we would not have received residual cash flow until the required overcollateralization was built up." The joint lead managers of the deal were Wachovia Capital Markets LLC and Countrywide Securities Corp., and the co-manager was Credit Suisse First Boston LLC. ECC Capital, a mortgage finance REIT, can be found online at http://www.encorecredit.com.

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