MINNEAPOLIS, Nov. 12 /PRNewswire/ -- Arcadia Financial Ltd. (NYSE: AAC)
announced today the pricing of $200 million of automobile receivables-backed
securities through Credit Suisse First Boston and Chase Securities Inc.
The coupon cost to the investor was approximately 5.71% compared to the
APR of loans in the initial delivery of approximately 16.75%, giving Arcadia a
gross interest spread before hedges of approximately 11.04%, slightly lower
than the previous quarter.
Richard A. Greenawalt, Arcadia's President and Chief Executive Officer
commented, "We are very pleased with the successful sale of these bonds. Once
again, Arcadia has proven our ability to maintain access to the asset-backed
securities market and sell our bonds at favorable prices."
Commenting on the size of the 1998-D transaction, Greenawalt noted, "In
today's market, issuers have to remain flexible and offer securities that will
be attractive to investors. We saw the recent improvement in the market and
moved to take advantage of its positive tone. We anticipate accessing the
market again during the remainder of this quarter, especially as the market
demonstrates additional strength."
The securities are issued via an owner trust, Arcadia Automobile
Receivables Trust, 1998-D, in four classes:
Average Annual
Security Amount Life (yrs) Coupon Price Yield
A-1 $13,000,000 0.25 5.482% 1.000000 5.4823
A-2 $32,000,000 0.99 5.564% 1.000000 5.7102
A-3 $55,000,000 2.73 5.800% 1.000000 5.8710
A-4 $100,000,000 1.85 5.650% 0.999375 5.7540
The Class A-1 Notes will be rated A-1+ by Standard & Poor's and P-1 by
Moody's. The Class A-2, A-3 and A-4 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 $147 million in automobile loans acquired from Arcadia's network
of automobile dealers. In addition, approximately $53 million will be
available to purchase receivables to be delivered in the next two 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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CONTACT:
Scott R. Fjellman, Vice President, Investor
Relations of Arcadia Financial, 612-944-4582
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