New Century Completes 1st NIM Deal

New Century Mortgage Corp., Irvine, Calif., has completed its first net interest margin private placement.The $58 million offering, NC Finance Trust 1998-1, is collateralized by the residual bonds from four prior asset-backed securitizations: SBM7 1997-NC4, SBM7 1997-NC5, SBM7 1998-NC1, and NCHET 1997-NC5. The transaction was structured with debt and equity components, and New Century retained the equity portion, entitling it to receive residual cash flows from the trust. Brad Morrice, vice chairman and president of New Century Financial Corp., New Century Mortgage's parent, said the NIM transaction improved the company's balance sheet. "We reduced our residual assets, reduced the amount of residual financing outstanding, and improved liquidity," he said.