Commercial First suspends new lending activity

Commercial First has suspended all new commercial lending, saying that its existing funding facilities have been fully utilised and planned new arrangements have failed to materialise.

In November, Commercial First completed the only public securitisation since the credit crisis began but despite this it has been forced to put a hold on new originations.

Stephen Johnson, the company’s sales and marketing di-rector, said: “The business had been given positive indications that warehouse lines and working capital funding would be made available.

“We also re-ceived an initial offer to buy the firm recently.

“But certain events in the fi-nancial markets including the sale of Bear Stearns meant that both the offer for the business and the additional funding had to be withdrawn.

“As a consequence of these de-velopments, the business had no alternative but to suspend its originations.

He added: “Our management team is in dialogue with the company’s funding partners to ex-plore some possible solutions for pipeline business.”

Commercial First made a pro-fit of some £13m last year and the firm is on target to make more than £20m this year, with a balance sheet of £1.6bn in mortgage assets at an average LTV of 68% and a margin of 4%.

Johnson said: “It is abundantly clear that the credit market has failed.”