January 27, 2005
Mail Stop 0409
Shabi S. Asghar
President and Co-Chief Executive Officer
ECC Capital Corporation
1833 Alton Parkway
Irvine, CA 92606
Re: ECC Capital Corporation
Amendment No. 3 to Registration Statement on Form S-11
Filed January 20, 2004
Registration No. 333-118253
Dear Mr. Asghar:
We have reviewed your filing and have the following comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Page references below refer to the marked bound copy of the
S-11
you provided to us via mail.
General
Directed Share Program Materials
1. We have reviewed your response to our prior comment number 3;
however we continue to believe that it is not clear, in the fourth
paragraph, that a potential purchaser may decline to accept shares
when they are contacted by FBR after the registration statement
has
become effective. We do not believe that the general statement in
the second sentence of your letter is specific enough to inform
investors of their right to decline to purchase shares when they
are
contacted after pricing. Please revise or advise.
Risk Factors
2. In light of your November financial covenant breach newly
disclosed on page 75 and your previously disclosed March covenant
breach, please tell us what consideration you have given to
inclusion
of a risk factor describing these covenant breaches; including a
discussion of their affect on your current debt instruments and
credit rating as well as your ability to obtain credit in the
future
on favorable terms or at all.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations, pages 54 - 85
Stock-Based Compensation, page 58
3. We note your response to our prior supplemental comment 1.
Please
revise your disclosure in your next amendment as follows:
* Revise your disclosure to eliminate any discussion of a discount
taken due to lack of control.
* Revise your disclosure to clarify, if true, that the discount
taken
on the earnings multiples are due to differences between the
Company
and the comparable companies used in the analysis and that they do
not represent an additional discount due to lack of marketability.
4. We note your new disclosure on page 75 regarding the November
2004
covenant breach related to your Countrywide Warehouse Lending
facility. Please revise your disclosure in the final sentence of
this paragraph to indicate whether you were in compliance in
December
2004 with all of your credit facility covenants and whether you
are
currently in compliance with those covenants.
Exhibits
5. We note that a number of exhibits listed in the exhibit table
have
not yet been filed, many of which were entered into in 2003 and
2002.
Please file these exhibits with your next amendment and advise us
as
to why the company was unable to file these exhibits prior to
commencing its roadshow. In addition, please file executed copies
of
your legal and tax opinions.
* * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
You may contact Robert Telewicz, Staff Accountant, at (202)
824-
5356 or Deborah Wilson, Branch Chief, at (202) 942-2956 if you
have
questions regarding comments on the financial statements and
related
matters. Please contact Amanda McManus, Attorney-Advisor, at
(202)
942-7184 or me at (202) 942-1972 with any other questions.
Sincerely,
Owen Pinkerton
Senior Counsel
cc: William J. Cernius, Esq. (via facsimile)
Jeevan B. Gore, Esq. (via facsimile)
Latham & Watkins LLP
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ECC Capital Corporation
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