NovaStar Financial subsidiary NovaStar Mortgage has completed its second securitization of 2005, the company said.Lead managers RBS Greenwich Capital, Wachovia Securities and Deutsche Bank Securities, underwrote the transaction with co-manager Morgan Stanley. The transaction -- NovaStar Mortgage Funding Trust, series 2005-2 -- includes 17 rated classes of certificates with a face value of about $1.78 billion. NovaStar Mortgage retained the class C certificate in the deal, which has a notional amount of $1.8 billion and entitles the company to excess and prepayment penalty fee cash flow from the underlying loan collateral and serves as overcollateralization. The company said class C is subordinated to all other classes. NovaStar can be found on the Web at http://www.novastarmortgage.com.

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