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Non-Tech : Amresco [AMMB] -- Ignore unavailable to you. Want to Upgrade?

To: AnnaInVA who wrote (31)	10/23/1998 10:42:00 PM
From: Noel	Read Replies (1) \| Respond to of 218

News came out after the close: 05:22 PM ET 10/23/98 Moody's cuts AMRESCO Inc ratings (Press release provided by Moody's Investors Service) NEW YORK, Oct 23 - Moody's Investors Service today downgraded the debt ratings (senior to Caa3) of AMRESCO, Inc. (AMRESCO). These rating actions conclude the review which began October 7, 1998. The outlook for the ratings is stable. Moody's said these rating actions reflect the company's increasingly constrained liquidity, limited financial flexibility, and weak prospects in two of its businesses, commercial mortgage banking and sub-prime home equity lending. The rating agency added that AMRESCO recently announced a substantial pre-tax loss related to an unprofitable whole loan sale of sub-prime home equity loans reflecting the company's limited access to the securitization market. As the company continues to originate subprime home equity loans without a cost-efficient, established channel for disposition, Moody's believes this business could put further stress on AMRESCO's balance sheet and cash flow. Furthermore, the company's ability to divest or restructure the sub-prime home equity loan operation may be hampered as AMRESCO carries a substantial investment in this business on its balance sheet. This asset may be impaired if AMRESCO ceased to operate or was to change significantly its sub-prime home equity loan operation, Moody's added. AMRESCO is also facing significant challenges in its commercial mortgage banking business with severe spread widening, a reduction in access to liquidity as well as downward pressure on asset values, Moody's said. Finally, in reaching this conclusion, Moody's recognizes the company's inherent strength of its asset management business. The following ratings were lowered: Secured revolving credit facility to Caa1 from B2; Senior debt to Caa3 from B3; Subordinated debt to Caa3 from Caa1. AMRESCO is a commercial and consumer finance company which originates and securitizes commercial and residential loans. Other lines of business include investing in distressed loan portfolios and commercial lending. At September 30, 1998, the company had total assets of $4.8 billion.