Friedman, Billings, Ramsey Group, Inc., a provider of investment banking and merger and acquisition advisory services, is limiting its exposure to the subprime market by giving up 80-percent ownership in its nonprime mortgage lending unit, First NLC Financial Services, Inc.

FBR Group says a definitive agreement it signed with an affiliate of Sun Capital Partners will “result in a $75-million recapitalization of FNLC and a reduction of FBR’s ownership interest in FNLC to 20-percent.”
The company says when the transaction is complete, FNLC will no longer function as a subsidiary of FBR Group.
“Two things are accomplished through this transaction,” said J. Rock Tonkel, Jr., president and chief operating officer of FBR Group. “First, as discussed in our earlier press release today, FBR Group has substantially limited its exposure going forward as a result of FNLC’s recapitalization. The 20-percent ownership interest FBR Group retains will permit it to participate in FNLC’s upside potential when the mortgage market strengthens. Second, FNLC – with a $75 million cash infusion – will have liquidity to navigate through an exceptionally difficult mortgage market environment and to position itself for future growth.”