MINNEAPOLIS, June 3 /PRNewswire/ -- Arcadia Financial Ltd. (NYSE: AAC)
announced today the pricing of $650 million of automobile receivables-backed
securities through Banc of America Securities LLC, Chase Securities Inc.,
Credit Suisse First Boston and J.P. Morgan & Co.
The coupon cost to the investor was approximately 6.45% compared to the
APR of loans in the initial delivery of approximately 17.29%. This gives
Arcadia a gross interest spread before hedges of approximately 10.84%.
Richard A. Greenawalt, Arcadia's Chief Executive Officer commented, "We
are very pleased with this transaction. The increased size of this deal
reflects our modest growth from the prior quarter and from one year ago. We
believe the improvements in our credit risk and loan origination programs are
helping us to achieve our targeted yields."
Greenawalt also noted the overall performance of the Arcadia servicing
portfolio continues to improve as well. "Our newer loans are beginning to
dominate our loan performance statistics, which we believe will improve
portfolio results. In addition, the operational enhancements we made over the
past two years should continue to drive our delinquency and loss numbers in
the right direction," said Greenawalt.
The securities are issued via an owner trust, Arcadia Automobile
Receivables Trust, 1999-B, in five classes:
Average Annual
Security Amount Life (yrs) Coupon Price Yield
A-1 $71,500,000 0.24 5.099% 1.00000000 5.099%
A-2 $211,100,000 1.00 5.715% 0.99999270 5.784%
A-3 $126,525,000 2.00 6.300% 0.99987770 6.390%
A-4 $151,650,000 3.00 6.510% 0.99997260 6.600%
A-5 $89,225,000 3.88 6.660% 0.99977180 6.760%
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 $455 million in automobile loans acquired from Arcadia's network
of automobile dealers. In addition, approximately $195 million will be
available to purchase receivables to be delivered in the next several 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 Annual Report on Form 10-K for the year ended December 31, 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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CONTACT:
Scott R. Fjellman, Vice President, Investor
Relations of Arcadia Financial Ltd., 612-944-4582
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