Hi everyone. J.G. Wentworth here.
The news about our recent bond sale is all over the news wires, but nonetheless, I thought it appropriate to take a few moments here to discuss it further, and offer up one “big picture” idea.
The facts are we sold $212 million worth of bonds. We created them by taking all the structured settlement payment streams that we bought, pooling them together, and then separating them into individual bonds that investors could buy. The bonds are generally bought by big institutional investors. The good news is more and more of these investors are attracted to our bonds because of their historical track record.
Understanding the creation and sale of bonds is complex subject matter that few people really understand.
What’s more important than the mechanics of the process is the impact it has on consumers. Specifically, creating a link between sellers of structured settlement payments, and the credit markets, where investors actively compete for bonds, has the effect of driving down the discount rates. Net, net, the lower discounts rates are, the more cash consumers get for their payments. And you don’t have to be a Wall Street wizard to understand that’s a very good thing.
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J.G. Wentworth Completes $212 Million Securitization of
Asset Backed Notes
November 5, Bryn Mawr, PA – Specialty finance company J.G. Wentworth has completed a $212.5 million securitization of rights under structured settlement and fixed-annuity purchase contracts. J.G. Wentworth was the first issuer to securitize structured settlement payment streams in the asset-backed markets in 1997. Since then, the company has issued 22 securitizations backed by structured settlement and fixed-annuity receivables totaling nearly $3 billion.
The most recently completed $212 million securitization consisted of two issued classes of notes: $180.7 million of Class A notes rated Aaa by Moody’s Investors Service and $17.0 million of Class B notes rated A2 by Moody’s Investors Service and a Residual Class of $14.8 million which was retained by the Company. Jefferies & Company and UBS Investment Bank acted as co-lead arrangers and Jefferies & Company as sole bookrunner.
According to J.G. Wentworth Chief Investment Officer Stefano Sola, “We believe that our continued access to the capital markets demonstrates our commitment to the securitization program by delivering a consistent flow of product to a growing and diversified investor pool. We are pleased with the execution of our latest securitization and glad that a growing pool of institutional investors recognize the strength of our program.”
So far in 2010, J.G. Wentworth has sponsored a total of three securitizations. According to Chief Executive Officer David Miller, “This latest securitization demonstrated strong demand from our historical investor base while attracting new investors who, after conducting substantial due diligence, recognize and appreciate the underlying strength of the cash flows. The participation from new investors will continue to benefit this sector by driving continued liquidity both in purchasing these receivables from consumers and the secondary market for institutional investors.”
About the J.G. Wentworth family of companies
J.G. Wentworth, LLC, based in Bryn Mawr, PA, is a leading buyer of deferred payments for illiquid financial assets such as structured settlements and fixed annuities. Since 1992, J.G. Wentworth has purchased over $4 billion of future payment obligations from consumers.
For more information about J.G. Wentworth, visit www.jgwentworth.com.
Contact: David R. Evanson, devanson@comcast.net, 610-505-0832.