eTrade 2006 Annual Report Download - page 120

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The Company entered into management agreements to provide certain collateral management services for
the CDOs. As compensation for its services, it receives a management fee from the trustee based on the quarterly
amount of assets managed (as defined in the management agreements). During 2006, the Company earned $5.1
million of management fees under the CDOs.
At December 31, 2006, the Company managed both its on-balance sheet asset-backed securities and the
off-balance sheet securitized asset-backed securities of the CDOs, which are presented in the following table
(dollars in thousands):
Managed on-balance sheet asset-backed securities, classified as:
Available-for-sale $2,161,728
Trading securities 49,201
Total managed on-balance sheet asset-backed securities 2,210,929
Managed off-balance sheet securitized asset-backed securities:
CDO I(1) 69,376
CDO III 256,638
CDO IV 292,761
CDO V 300,049
Total managed off-balance sheet securitized asset-backed securities 918,824
Total managed asset-backed securities $3,129,753
(1) During the third quarter of 2006, the preference shares related to CDO I were written off as the Company did not expect any future
payments on the investment, although the Company continues to manage CDO I.
Securitized Consumer Finance Receivables
The origination and servicing businesses of Consumer Finance Corporation were sold in late 2005. As a
result of the sale, the Company retained the consumer receivables and beneficial interests in the securitized trusts.
Prior to the sale, Consumer Finance Corporation securitized recreational vehicle and marine consumer
receivables by sales or other transfers to ETCF Asset Funding Corporation through the formation of trusts. There
were no securitizations of consumer receivables in 2006 or 2005. During 2004, Consumer Finance Corporation
securitized approximately $0.3 billion of recreational vehicle and marine receivables. On October 20, 2003, the
Company acquired ETCF Asset Funding Corporation and the retained beneficial interests in four trusts.
On December 14, 2005, the Company exercised its option to redeem at par the collateral associated with
RV 1999-1. This resulted in a full payoff of the residual interest in January 2006.
On March 10, 2006, the Company exercised its option to redeem at par the collateral associated with
Marine 1999-2. This resulted in a full payoff of the residual interest in April 2006.
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