Full Circle: FBR to Sell First NLC to Sun Capital

Friedman, Billings, Ramsey Group, Inc. said on Thursday that it will sell most of First NLC Financial Services, LLC to an affiliate of Sun Capital Partners in a deal worth $75 million. Under the terms of the deal, FBR will invest $15 million as part of a recapitalizatin of the subprime originator, with the remaining funds coming from Sun Capital. What I haven’t seen reported elsewhere is that FBR originally purchased First NLC from Sun Capital in February 2005 in a $101 million cash and stock deal. In a way, then, it certainly feels like FBR is pawning off a misbehaving stepchild. More terms of the deal seem to suggest who was in control at the negotiating table:

During the third quarter, FBR Group expects to fund approximately $15 million in losses associated with further restructuring and operating costs incurred prior to entering into the transaction with Sun Capital. FBR Group will also retain ownership of approximately $250 million of conforming and non-conforming mortgages recently originated by FNLC which are expected to be sold or securitized during the third quarter.

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