Alexa
  • Directory of Taiwan

Barclays gets Region's subprime mortgage unit for $76M, down from $225M original price

Barclays gets Region's subprime mortgage unit for $76M, down from $225M original price

In another sign of the woeful state of the U.S. subprime mortgage market, Barclays PLC on Monday said it is paying $76 million (euro56.86 million) for a unit of Regions Financial _ a two-thirds discount to the amount it agreed to pay just months ago.
Barclays said it has closed on the deal to buy from Regions Financial Corp. its EquiFirst nonprime mortgage originator. Barclays will pay $76 million (euro56.86 million) for the unit, subject to another adjustment to book value _ though Barclays said that adjustment won't be significant.
In January, Barclays agreed to pay $225 million (euro168.34 million) for the unit. Collins Stewart analyst Alex Potter said Barclays was either "very good or very lucky" that the subprime mortgage market collapsed in the United States when it did, drastically cutting the purchase cost. He recommends Barclays at "buy."
EquiFirst is the twelfth-largest nonprime wholesale mortgage originator in the United States. The sector has seen woes deepen over the last few months. The second-largest subprime lender, New Century Financial Corp., filed for bankruptcy Monday.
Barclays was interested in buying EquiFirst because it also buys and sells mortgages via mortgage-backed securities.
Barclays is in talks to buy Dutch bank holding company ABN Amro in a deal that would form the world's fifth-largest bank.


Updated : 2021-10-17 05:51 GMT+08:00