American Business Financial defaults on agreement with Patriot, credit facility

By Jeff Pines

Washington, Jan. 19 - American Business Financial Services Inc. has had several default events under its Patriot Group repurchase agreement, the company said in a Wednesday filing with the Securities and Exchange Commission.

The company said it has accepted a default interest rate of 20% and obtained a $750,000 increase to the facility.

The Philadelphia-based company also is in default under its $100 million agreement with Fortress Credit Corp., it said. As a result, American Business Financial cannot borrow on the facility.

In addition, the company has been informed it must find a new bond insurer and transfer servicing to the new insurer by Feb. 1.

American Business Financial originates, sells and services home equity loans and money mortgage loans. Last month, the company warned it may have to file for Chapter 11.

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