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Post# of 87366
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neilhk

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neilhk

Re: neilhk post# 5024

Thursday, 10/11/2007 9:13:53 PM

Thursday, October 11, 2007 9:13:53 PM

Post# of 87366
Conduit Lenders: Following website provides a bit more info

http://www.commercialbanc.com/conduit-loans-102.html

Extract:

"Within the capital marketplace there are a number of conduit lenders, including, life insurance companies, pension companies, financial services firms and some of the nation's largest banks and investment banks. Conduit lenders generally hold the conduit loan only until it can be securitized, typically 2 years.

In a securitization, there is sale of interests in the conduit loan ( Note: Sale of interests in the case of HCPC being the sale of BCLOC Promissory notes to Institutional Investors/ Funding Source) and an assignment of the loan within a few weeks or months after the closing to an institutional trustee."



So it seems the conduit lender acts as an intermediary to fund loans initially, to enable them to be securitised before their sale to the institutional investor (i.e. funding source). In the case of HCPC securitised would be the sale of the BCLOC Promissory notes to the institutional investor/ funding source.

The range of institutions that act as conduit lenders mentioned above, suggests to me that they could also be the funding source HCPC have referred too but equally the funding source could be another institutional investor. Without more information from HCPC we can't be sure at this stage.

We do know, however, when they mention conduit lender, the type of company that HCPC could be planning to merge with imo

GLTA






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