REIT Issues 1st Public MBS FASIT

In the first use of a financial asset securitization investment trust in a publicly offered residential mortgage deal, American Residential Eagle Inc., Del Mar, Calif., recently issued approximately $422 million of mortgage-backed securities via a FASIT.American Residential Investment Trust Inc., a real estate investment trust that is the parent company of American Residential Eagle, said the structure "allowed for the creation of subordinate bonds with different maturities without generating excess inclusion income" for the company. As a result, the securities were issued at a lower combined yield than would have been the case with traditional collateralized mortgage obligation structures, the company said. The transaction, American Residential Eagle Certificate Trust 1998-1, was underwritten by Lehman Brothers Inc. FASITs are tax vehicles designed to facilitate the securitization of revolving short-term assets, but they may be used for virtually any kind of debt. They permit the addition and substitution of loans, the issuance of new securities, and the inclusion of various hedging instruments. The REIT's website address is http://www.amerreit.com.