BlackRock, Inc. (NYSE: BLK) and Highfields Capital Management today announced that they have sponsored a new company that will acquire and restructure distressed residential mortgage loans in response to the ongoing dislocation in the U.S. mortgage market.
The new company, Private National Mortgage Acceptance Company, LLC (PennyMac), has been formed by BlackRock, Highfields, and a management team of mortgage industry veterans led by Stanford L. Kurland, PennyMac’s Chairman and Chief Executive Officer. PennyMac will raise capital from private investors, acquire loans from financial institutions seeking to reduce their mortgage exposures, and seek to create value for both borrowers and investors through distinctive loan servicing.
Mr. Kurland was President and Chief Operating Officer of Countrywide Financial Corporation until his departure in October 2006. The PennyMac management team also includes David Spector, Chief Investment Officer, who is former Co-Head of global residential mortgages for Morgan Stanley.
“We are pleased to sponsor PennyMac, a company that seeks to bring patient capital to the unprecedented distress in residential mortgages,” said Laurence D. Fink, BlackRock Chairman and Chief Executive Officer. “Stan Kurland and his team have enormous talent and experience in the mortgage business, making them well equipped to develop effective solutions for sellers of mortgage assets and homeowners alike.”
“There has been intense market focus on write-downs of mortgage-related securities, but whole loan losses have barely begun to materialize,” said Jonathon S. Jacobson, Highfields Co-Founder and Senior Managing Director. “Over the next two to three years, we anticipate that the volume of bank-held non-performing mortgages will grow dramatically. PennyMac will be extraordinarily well positioned as both a buyer and servicer of these assets.”
“Our intent is to combine fresh capital with deep mortgage portfolio management and servicing expertise,” said Mr. Kurland. “We are delighted to have the support of BlackRock and Highfields Capital as we expand our business and work to help both lenders and borrowers as one step in addressing the U.S. mortgage crisis.”
“PennyMac’s strategy is to avoid foreclosures, and instead restructure the loans of struggling borrowers so they can continue paying and stay in their homes,” he said. “As a specialty servicer without the burden of a legacy portfolio or business practices, we have the flexibility to offer individual borrowers unique solutions to address their needs.”
PennyMac’s loan servicing activities will be managed through a proprietary servicing operation based in southern California.
Mr. Kurland is recognized for his leadership in developing the strategic direction, risk management activities, financial management and organizational development of Countrywide Financial Corporation during his 27-year tenure at the company, ending in 2006. While at Countrywide, he also served as Chief Financial Officer and President of Countrywide Home Loans.
Both BlackRock and Highfields will serve as strategic partners, enhancing PennyMac’s relationships with global financial institutions and providing valuable input in structuring PennyMac’s investment management activities.
PennyMac will also utilize BlackRock’s capital markets and mortgage expertise, including risk management analytics. As one of the world’s largest investment managers, BlackRock manages more than $500 billion in fixed income assets, including approximately $175 billion in mortgage related assets. In addition, more than $1 trillion in mortgages are valued and analyzed daily on the BlackRock Solutions® platform, which incorporates industry leading, proprietary mortgage analytics.
About Private National Mortgage Acceptance Company, LLC
Private National Mortgage Acceptance Company, LLC (PennyMac or PNMAC) is a financial services firm created to address the dislocations in the U.S. mortgage market. PennyMac’s focus is investing in and servicing residential mortgage assets on behalf of private investors. The company is managed by a team of mortgage industry veterans led by Stanford L. Kurland, and is based in Calabasas, Calif. PennyMac’s strategic partners are BlackRock and Highfields Capital Management. For additional information, please visit the Company’s website at www.pnmac.com.
BlackRock is one of the world’s largest publicly traded investment management firms. At December 31, 2007, BlackRock’s AUM was $1.357 trillion. The firm manages assets on behalf of institutions and individuals worldwide through a variety of equity, fixed income, cash management and alternative investment products. In addition, a growing number of institutional investors use BlackRock Solutions®investment system, risk management and financial advisory services. Headquartered in New York City, as of December 31, 2007, the firm has approximately 5,500 employees in 19 countries and a major presence in key global markets, including the U.S., Europe, Asia, Australia and the Middle East. For additional information, please visit the Company's website at www.blackrock.com.
About Highfields Capital Management LP
Highfields Capital Management, founded in 1998, is a value-oriented investment firm focused on achieving long-term capital appreciation by investing in public and private companies. It invests over $11 billion of capital worldwide, across a wide variety of industries, security types and geographies. Highfields has invested over $1 billion in private investments and approximately $2 billion in mortgage and real estate securities. For further information, see www.highfieldscapital.com.
This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to PNMAC's future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as "trend," "potential," "opportunity," "pipeline," "believe," "comfortable," "expect," "anticipate," "current," "intention," "estimate," "position," "assume," "outlook," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" or similar expressions.
Readers are reminded that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and PNMAC assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.
Andrea Calise, 212-521-4845
Molly Morse, 212-521-4826
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