SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report: October 9, 1998
(Date of earliest event reported)
CAPCO America Securitization Corporation
(formerly known as Nomura Asset Securities Corporation)
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(Exact name of registrant as specified in its charter)
Delaware 33-48481-06 13-3672336
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(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number Identification No.)
Incorporation
Two World Financial Center, Building B, New York, New York 10281
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Address of Principal Executive Office
Registrant's telephone number, including area code: (212) 667-9300
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Item 5. Other Events
Recent Developments
Following losses experienced by NACC's subsidiary, The Capital Company of
America LLC ("CCA") and Nomura Holding America Inc. ("NHA") (NACC's parent), the
Board of Directors (the "NSC Board") of the ultimate parent of all of these
companies, Nomura Securities Co., Ltd. ("NSC"), authorized NSC to provide
additional capital to NHA (which, in turn, authorized a capital contribution to
CCA) designed to substantially restore the total capitalization (shareholder's
equity plus subordinated debt) of NHA and CCA to the levels that existed on
April 1, 1998 (that is, approximately $843 million of subordinated debt and
common shareholder's equity) in the case of NHA, and to the level that existed
on June 29, 1998 (that is, approximately $500 million of common shareholder's
equity) in the case of CCA.
As of September 25, 1998, and as authorized by the NSC Board as described
above, NSC made an equity investment in NHA of approximately $380 million, and
acquired (through Nomura Global Funding plc) subordinated debt of NHA in the
amount of approximately $250 million. Accordingly, NHA has received a total of
approximately $628 million in cash from or at the direction of NSC and has wired
approximately $214 million of that amount to CCA as equity capital. Although the
September 25, 1998 investment in CCA was intended to restore CCA's shareholder's
equity to it's June 1998 level, a September 28, 1998 mark-to-market estimate of
the value of CCA's assets indicated that the $214 million contributed to CCA was
insufficient (by approximately $150 to $200 million) to restore CCA's
capitalization to that level. NHA, which was informed of the revised estimate on
September 28, 1998, indicated at that time that it had capital sufficient to
permit it to contribute additional equity, based on CCA's mark-to-market losses
then estimated, sufficient to restore CCA's shareholder's equity to
approximately $500 million as of September 30, 1998. NHA authorized the
contribution of such equity to CCA. There can be no assurance that either CCA or
NHA will not experience further losses, that NSC will provide additional
capitalization to NHA or that NHA will contribute capital to CCA beyond what is
currently authorized. In addition, current market uncertainty and volatility
have had, and may continue to have, further significant adverse impact on the
financial condition of CCA and NHA.
In another development, Ethan Penner, who was appointed Chief Executive
Officer and President of CCA at its formation on June 29, 1998, resigned that
office and was appointed Vice Chairman of the Board of Directors of CCA on
August 14, 1998. Mr. Penner resigned as Vice Chairman of the Board of Directors
on September 16, 1998. Also, William Wraith, IV, the co-chief executive officer
and co-president of NHA and the chairman of the Board of Directors of NSI, and
Mark McGauley, the chief operating officer of NHA, have resigned from those
positions and as members of the CCA Board of Directors.
In another development, CRIIMI MAE Inc., the parent of CRIIMI MAE Services
Limited Partnership (the "Special Servicer"), filed for bankruptcy law
protection on October 5, 1998 under Chapter 11 of the U.S. Bankruptcy Code. As a
result of that filing, Standard & Poor's Rating Services ("S&P") removed the
Special Servicer from its approved servicer list as a commercial asset
manager/special servicer. Fitch IBCA, Inc. ("Fitch") placed the Special
Servicer's rating of "Above Average" on "Rating Alert" with negative
implications, stating that special servicing functions could be affected by the
loss of personnel resulting from bankruptcy-related disruptions. With regard to
the ratings on the Series 1998-D6 Certificates (the "Certificates"), Fitch and
Moody's Investors Service, Inc. each affirmed its ratings for the Certificates.
S&P stated that the developments have no immediate impact on the ratings for the
Certificates. Duff & Phelps Credit Rating Co. ("DCR") placed the ratings for the
Certificates on "Ratings Watch-Uncertain" until DCR can fully determine the
impact of the bankruptcy filing of CRIIMI MAE Inc. In addition, on October 7,
1998, S&P lowered its subordinated debt rating on AMRESCO Inc., the parent of
AMRESCO Services, L.P. (the "Servicer"), from "B" to "CCC+" and its long-term
counterparty credit rating from "BB-" to "B." As a result of these rating
downgrades, S&P revised its commercial loan servicer rating for the Servicer
from "Strong" to "Average." The Servicer remains on S&P's approved list of
servicers.
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Pursuant to the requirements of the Securities Act of 1934,
the Registrant has duly caused this report to be signed on behalf of the
Registrant by the undersigned thereunto duly authorized.
CAPCO AMERICA SECURITIZATION CORPORATION
/s/ Marlyn A. Marincas
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Marlyn A. Marincas
Director
Date: October 16, 1998
