Liberty prices $1bn paper for non-conforming loans

Liberty Financial, a specialist in loans to borrowers who don't fit conventional lending criteria, is about to break new ground by pricing a deal from a $1 billion commercial paper vehicle.

Liberty is one of several niche lenders which have begun tapping the potential of the capital markets via securitisation, to finance its non-conforming loans business.

Liberty was established six years ago, and has a new approach to credit management and loan servicing, with over 25 staff looking after 5,000 accounts, compared with a bank's 4-5 staff dealing with up to 50,000 accounts.

MD Sherman Ma emphasises the importance of this high quality in-house loan servicing. He adds that Liberty's loan managers are tougher than the banks', with shortfall payments showing up on borrowers' statements as missed or delinquent, when a bank would not do so.

But Liberty also has a constructive attitude to its borrowers, such as when they divorce, providing them with different options to continue making payments on their loans.