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Subprime Lender Accredited May Seek New Capital

U.S. subprime mortgage specialist Accredited Home Lenders said on Tuesday it was exploring various strategic options, including raising additional capital to enhance liquidity.

Accredited said it may raise the additional capital to provide it with the flexibility to retain or sell originated loans based on an assessment of the best overall return.

Accredited also said it was pursuing cost restructuring initiatives, including further workforce reductions.

The mortgage company's available cash resources have been affected primarily by margin calls under its warehouse and repurchase facilities since Jan. 1, all of which have been met to date, as well as ongoing loan repurchases.

The company said it had paid approximately $190 million in margin calls on its facilities since Jan 1.

Approximately two-thirds of those margin calls have been received and paid since Feb. 15.

In addition, Accredited is seeking waivers and extensions of waivers of certain financial and operating covenants under its warehouse and repurchase facilities, including waivers relating to required levels of net income.

The company said it had been operating under various waivers under these facilities since Dec. 31, 2006.

It said it continued to evaluate impairment of the goodwill established in its acquisition of Aames Investment in the fourth quarter of 2006.

In light of this evaluation, along with work that must be completed for its year-end audit, Accredited said it was unlikely that it would file its annual report by March 16, 2007 as previously indicated.