New York Post – J.P. Morgan Securities is shopping Ameriquest, one of the largest sub-prime mortgage lenders in the U.S., to bond hedge funds, sources said.
Ameriquest’s bankers have approached several buyers recently, including Ellington Capital Management, a large Old Greenwich, Conn.-based hedge fund, to gauge interest in bidding on the sub-prime lending giant.
News of the possible sale was first reported by trade publication Asset Securitization Report.
A source familiar with the fund said J.P. Morgan bankers asked the high- profile fund if it was interested; fund executives haven’t decided if they want to proceed and receive an offering circular. No price talk was available.
In the business of buying and selling bonds created from residential mortgages since 1995, Ellington manages around $4.5 billion, with over $3 billion dedicated to mortgage bonds. One of the fund’s specialties is hedging what Wall Street terms “mortgage credit risk” or the risk that homeowners with less than stellar credit profiles – which is Ameriquest’s customer base – might default or fall behind on their payments.
