Westcorp Announces $1.4 Billion Securitization Transaction
IRVINE, Calif.--May 10, 2001--Westcorp , the financial services holding company whose principal subsidiaries are WFS Financial Inc and Western Financial Bank today announced the pricing of a $1.4 billion offering of automobile receivable asset-backed securities.The offering was lead managed by Salomon Smith Barney and co-managed by Banc of America Securities LLC, Credit Suisse First Boston, and Deutsche Banc Alex. Brown. This offering is expected to close on May 17, 2001.
The securities will be issued via an owner trust, WFS Financial 2001-B, in four classes of Notes:
Security Amount Average Price Interest
Life Rate
(yrs)
A-1
Notes $230,000,000 0.40 100.00000 4.025%
A-2
Notes $405,000,000 1.00 99.99456 4.320%
A-3
Notes $400,000,000 2.00 100.00000 3 mo. LIBOR + 0.15%
A-4
Notes $335,000,000 3.24 100.00000 3 mo. LIBOR + 0.19%
Total $1,370,000,000
The Class A-1 and A-2 Notes are priced on a fixed rate basis while
the Class A-3 and A-4 Notes are priced on a variable rate basis in
order for the company to take full advantage of the current interest
rate environment, as well as to expand its current base of investors.
As part of this transaction, WFS will sell contracts on a whole loan basis to WFS Receivables Corp. 2 ("WFSRC2"), a subsidiary of Westcorp. WFSRC2 in turn will transfer a first priority perfected security interest in the contracts to the WFS Financial 2001-B Owner Trust, the issuer of the securities. The transaction will be accounted for as a secured financing at Westcorp rather than a sale due to the underlying structure of the securitization transaction.
"This sale is designed to most efficiently utilize the additional capital expected to be raised by us and our subsidiary, WFS Financial, through rights offerings this quarter," said Joy Schaefer, president. "We do not expect that this transaction will materially impact our financial results. We expect that all our future securitization transactions at Westcorp will be structured and accounted for as secured financings."
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 payments on the Notes are guaranteed by an insurance policy provided by Financial Security Assurance Inc. The rating by Standard & Poor's of the Class A-1 Notes will be issued without regard to the benefit afforded by the Note Policy. The ratings by Standard & Poor's of the Class A-2, A-3 and A-4 Notes, as well as the ratings by Moody's of all of the Notes will be based on the issuance of the Note Policy by FSA.
Westcorp and its affiliates have issued a total of $21.4 billion of automobile receivable asset-backed securities in 52 transactions to date, making it the fourth largest issuer of such securities in the U.S.
Westcorp is a financial services holding company whose principal subsidiaries are WFS Financial Inc. and Western Financial Bank. Westcorp is a publicly owned company whose common stock is traded on the New York Stock Exchange under the symbol WES. Information about Westcorp can be found at its Web site at http://westcorpinc.com.
Westcorp, through its subsidiary, WFS, is one of the nation's largest independent automobile finance companies. WFS specializes in originating, securitizing, and servicing new and pre-owned prime and non-prime credit quality automobile contracts through its nationwide relationships with automobile dealers. Information about WFS can be found at its Web site at http://www.wfsfinancial.com.
Westcorp, through its subsidiary, Western Financial Bank, operates 25 retail bank branches throughout California and provides commercial banking services in Southern California. Information on the products and services offered by the bank can be found at its Web site at http://www.wfb.com.