Subprime Lending

New Century Bankrupt; Will Sell Servicing Platform For $139 Million 

New Century Financial Corporation announced this morning that it had filed a voluntary petition for relief under chapter 11 of the U.S. Bankruptcy Code. As part of the widely-expected move, the company said it will layoff 52 percent of its workforce — roughly 3,200 employees — effective immediately. In conjunction with the filing, The CIT Group and Greenwich Capital Financial Products, Inc. have agreed to provide New Century up to $150 million in debtor-in-possession (DIP) financing, subject to court approval. The financing provides New Century with a $50 million commitment level at closing with the potential to increase the commitment to $150 million. The DIP financing is expected to provide New Century with funding to facilitate the chapter 11 process.