C-Bass responded to market enthusiasm by upsizing its credit line to $550 million in late June, replacing a $390 million line that was due to expire. Eric Freeman, senior v.p. and treasurer, said the company sought to replace its line with a same-sized deal but that it was oversubscribed by $160 million. "We were very pleasantly surprised," he said, noting the syndication climate in a weaker economy. C-Bass, based in New York City, secures and services credit-sensitive residential mortgages. "We seek to restore performing status on the loans rather than foreclose them," he said. "Foreclosure is a last resort."
Despite the significant size of additional financing, the company's strategy will remain the same. Freeman explained that the money supports the company's servicing operation and goes toward whole-loan acquisitions. "We want to grow the business at a reasonable level," he explained. Covenants were renewed without material changes, said Freeman. The company's minimum net worth went up. He explained that pricing went up modestly, but declined to reveal it. "It was a very fair deal," he said. Freeman believes the company's deal was well received partly because it is in a defensive industry. "[The weaker economy] has increased the supply of non-performing loans," he said.
C-Bass opted to stick with its original lenders, rather than going out to bid. "We're big on relationship banking," said Freeman. Bank of America is the lead agent, and First Union National Bank is administrative agent. "Bank of America has a strong reputation in the syndication market. Their banker was instrumental in structuring the original deal," Freeman said.