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Peachtree Securitizes Annuity Income Streams

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NU Online News Service, March 31, 2005, 4:09 p.m. EST

A Boca Raton, Fla., financing firm says it has completed a $100 million securitization of structured settlement payments.[@@]

The firm, Peachtree Settlement Funding L.L.C., says it had an easy time selling the securities through a private placement involving institutional investors and other sophisticated investors.

The securitization is the second of its kind that Peachtree has completed in the past 2 years, and the firm says it may conduct a third securitization in the $125 million range in a few months.

Peachtree pays cash up front for the right to collect annuity income streams from people who have received large cash awards in connection with settlements of personal injury lawsuits.

The companies that sell the annuities argue that the purchases threaten the tax status of the annuities and may hurt severely injured, hard-pressed consumers who have problems with financial management. Peachtree and its competitors say they help settlement award recipients who need large sums of cash get lump sums without going to court to change award payment terms.

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