MINNEAPOLIS, Dec. 11 /PRNewswire/ -- Arcadia Financial Ltd. (NYSE: AAC)
announced today the pricing of $225 million of automobile receivables-backed
securities through Credit Suisse First Boston, Chase Securities Inc. and
NationsBank Montgomery Securities LLC.
The coupon cost to the investor was approximately 5.69%, compared to the
APR of loans in the initial delivery of approximately 17.14%, giving Arcadia a
gross interest spread before hedges of approximately 11.45%, the highest gross
spread ever achieved by Arcadia in the asset-backed securities market.
Including the pre-funded amount remaining from the 1998-D transaction, Arcadia
has the ability to securitize up to $483 million of loans in the fourth
quarter. Total securitizations for 1998 were approximately $2.2 billion.
Richard A. Greenawalt, Arcadia's President and Chief Executive Officer
commented, "We are very pleased to have successfully completed our second
securitization transaction during the fourth quarter. Our decision to sell
loans in two separate transactions reduced our market risk during a volatile
period of the asset-backed securities market. Our investors in these bonds
remain confident, as we do, of our continued ability to bring successful
transactions to market."
The securities are issued via an owner trust, Arcadia Automobile
Receivables Trust, 1998-E, in three classes:
Security Amount Average Coupon Price Annual
Life (yrs) Yield
A-1 $64,000,000 0.93 5.429% 1.00000000 5.555%
A-2 $100,000,000 1.68 5.60% 0.99960938 5.691%
A-3 $61,000,000 3.62 5.75% 0.99984375 5.822%
The Class A-1, A-2 and A-3 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 $158 million in automobile loans acquired from Arcadia's network
of automobile dealers. In addition, approximately $67 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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800-758-5804, ext. 652638
CONTACT:
Scott R. Fjellman, Vice President, Investor
Relations of Arcadia Financial Ltd., 612-944-4582
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