New Century Enters into Strategic Alliance with USB

Publicly-traded subprime lender New Century Financial Corp., Irvine, Calif., has entered into a strategic alliance with U.S. Bancorp, Minneapolis.As part of the deal U.S. Bancorp will: purchase $20 million in New Century convertible preferred stock; purchase a significant portion of the B&C lender's production (whole loans for cash); and create a cross-selling relationship between the two companies. Several publicly-traded non-depository subprime lenders are looking to strike strategic alliances or sell out entirely. Firms actively looking for partners include Aames Financial, Los Angeles; IMC Mortgage, Tampa; and United Companies, Baton Rogue, La., to name but a few. According to The 1999 Home Equity Lending Directory, New Century is the 17th largest subprime originator in the nation. Over the past year or so U.S. Bancorp has shown increased interest in the subprime sector and even the high LTV sector, investment bankers have said. In trading this morning New Century (symbol: NCEN) was up 50 cents to $8.