Ford Press Release: Ford Sells Part of USL Capital to BankAmerica
07/29/96
FORD SELLS USL CAPITAL'S TRANSPORTATION AND INDUSTRIAL FINANCING LEASES TO BANKAMERICA DEARBORN, Mich., and SAN FRANCISCO, July 26 -- Ford Motor Company and BankAmerica Corporation today announced that they have reached agreement for BankAmerica Leasing and Capital Group affiliates to acquire the Transportation and Industrial Financing (T&I) leasing portfolio of USL Capital Corporation, a Ford subsidiary. In addition, BankAmerica and Ford will enter into a partnership under which BankAmerica will acquire an interest in and manage certain other assets currently owned by Ford Motor Credit Company and managed by USL Capital, both part of Ford's Financial Services Group. The sale and the partnership combined cover all $3.5 billion (as of December 31, 1995) in T&I assets owned or managed by USL Capital's T&I unit. The portfolio to be acquired by BankAmerica comprises approximately $1.8 billion in financial assets and consists of leases on aircraft, rail, marine, and other industrial equipment and facilities. "These transactions will benefit Ford shareholders now and in the longer term," said Ken Whipple, president of the Financial Services Group. "We achieved the highest value for the assets with this structure in cooperation with BankAmerica." David A. Coulter, chairman and chief executive officer of BankAmerica, said, "The transactions represent an investment of additional capital in our commercial leasing and equipment finance business, which has been generating very attractive returns for our shareholders." Richard Harris, president of the BankAmerica Leasing Group, added, "We already have a globally integrated, world-class leasing business which provides high-value solutions to our customers' capital raising needs. This transaction builds on an attractive product segment which is a competitive advantage for Bank of America." BankAmerica Leasing, one of the largest bank-affiliated leasing businesses in the United States, provides a broad array of structured equipment finance and leasing services to customers worldwide. The T&I transactions increase the size of the bank's portfolio investment in financial leases by approximately 50 percent as well as increasing assets under management. The sale of the leases and establishment of the partnership are expected to be completed in the current quarter, subject to certain conditions. USL Capital is a diversified commercial financing and leasing company headquartered in San Francisco. Its T&I unit is one of the country's leading sources of financing for big-ticket transportation equipment and industrial facilities and has investments ranging from $10 million to $100 million. T&I represents about a third of USL Capital's business. Ford said that proceeds from the sale of the T&I leases will be used to pay down Financial Services Group debt, further strengthening its capitalization. Ford purchased USL Capital, then known as U.S. Leasing, in 1987 for $512 million. USL Capital's managed assets at year-end 1995 were $9.7 billion. It has 640 employees and 70 branches in the United States. Ford said in May that it would sell USL Capital's businesses separately to achieve the highest value for its assets. Ford has announced an agreement to sell USL Capital's Rail Services unit and has closed on the sale of the Fleet Services unit. Ford has also sold essentially all of the Municipal and Corporate Financing assets. Discussions continue with potential buyers for USL Capital's other businesses, according to Ford. These transactions are expected to be completed in the second half of this year.
