MINNEAPOLIS, March 12 /PRNewswire/ -- Arcadia Financial Ltd. (NYSE: AAC)
announced today the pricing of $550 million of automobile receivables-backed
securities through Chase Securities Inc., Credit Suisse First Boston, J.P.
Morgan & Co. and NationsBank Montgomery Securities LLC.
The coupon cost to the investor was approximately 5.93% compared to the
APR of loans in the initial delivery of approximately 17.33%. This gives
Arcadia a gross interest spread before hedges of approximately 11.40%, the
second largest spread the company has ever achieved on a securitization.
Richard A. Greenawalt, Arcadia's Chief Executive Officer commented, "This
deal marks Arcadia's 25th securitization transaction since 1993 and brings
total loans securitized to more than $11 billion. This deal enables Arcadia
to securitize 14 percent more loans than in the 1998 fourth quarter. With the
improved pricing reflected in the record APRs of loans securitized and the
positive trends we have experienced recently in our loan portfolio, we are
looking forward to reporting favorable results for the first quarter of 1999."
The securities are issued via an owner trust, Arcadia Automobile
Receivables Trust, 1999-A, in five classes:
Security Amount Average Coupon Price Annual
Life (yrs) Yield
A-1 $60,000,000 .24 4.96% 1.00000000 4.96%
A-2 $153,000,000 .92 5.373% 1.00000000 5.373%
A-3 $65,000,000 1.65 5.75% 0.99994420 5.823%
A-4 $105,000,000 2.3 5.94% 0.99993790 6.017%
A-5 $167,000,000 3.5 6.12% 0.99995687 6.20%
The Class A-1, A-2, A-3, A-4 and A-5 Notes will be rated AAA by Standard &
Poor's and Aaa by Moody's. Timely principal and interest on the Notes are
guaranteed by an insurance policy provided by Financial Security Assurance
Inc. ("FSA"). The ratings by Standard & Poor's and Moody's of the Notes will
be based on the issuance of the insurance policy provided by FSA.
Use of the owner trust in this transaction enables Arcadia to offer
multiple, sequential-pay securities and to prefund a portion of the trust,
thereby issuing a larger amount of securities than the amount of receivables
initially available. The Company anticipates initial delivery to the trust of
approximately $400 million in automobile loans acquired from Arcadia's network
of automobile dealers. In addition, approximately $150 million will be
available to purchase receivables to be delivered in the next three weeks.
This news release contains forward-looking statements that are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those projected. The most significant among these risks and
uncertainties are (1) the level of delinquencies, gross charge-offs and net
losses, (2) the company's ability to achieve adequate interest rate spreads
and (3) the level of operating expenses. Earnings may also be affected by the
effects of economic factors on consumer debt and by competitive pressures.
Additional risks which may affect the company's future performance are
detailed under the caption "Cautionary Statements" in Exhibit 99.1 to the
company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998.
Arcadia Financial Ltd. is a Minneapolis-based consumer financial services
company specializing in purchasing, selling and servicing retail installment
contracts for new and used automobiles originated in 45 states. The company,
founded in 1990, is the nation's largest independent provider of automobile
financing. Its 18 Regional Buying Centers are located in Arizona; northern
and southern California; Colorado; Florida; Georgia; Maryland; Massachusetts;
Minnesota; Missouri; New York; North Carolina; Ohio; Tennessee; north, south
and west Texas; and Washington.
SOURCE Arcadia Financial Ltd.
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800-758-5804, ext. 652638
CONTACT:
Scott R. Fjellman, Vice President, Investor
Relations of Arcadia, 612-944-4582
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