Union Acceptance Corporation Announces Terms of Rights Offering; Up to $80 Million Committed

    INDIANAPOLIS--May 14, 2001--Union Acceptance Corporation ("UAC"), one of the nation's largest independent, indirect automobile finance companies, today announced that the Board of Directors has approved the price of $5.00 per share for the previously announced rights offering and that it has received commitments from certain executive officers, members of the board of directors, other principal shareholders, and institutional investors to subscribe for up to $80 million, or 16.0 million shares in the offering.
    Holders of the Company's Class A and Class B common stock will receive, at no cost, one basic subscription right representing the right to purchase one share of Class A common stock for each share of common stock held as of the close of business on May 10, 2001, or approximately 13.3 million additional shares in the aggregate. Shareholders may be entitled to purchase additional shares pursuant to limited oversubscription rights to the extent shares are available after allocation of 4.0 million shares to satisfy minimum purchase rights of UAC's standby purchasers. The Company expects to issue 16.0 million shares for gross proceeds of $80 million. UAC may, however, issue up to 17.6 million shares, for gross proceeds of $88 million, if necessary to satisfy the minimum purchase rights of standby purchasers, or, at UAC's election, to satisfy additional oversubscription by shareholders or requests for additional shares by standby purchasers.
    Certain executive officers, members of the board of directors and other principal shareholders have committed approximately $32 million to exercise their basic subscription rights, and in some cases their oversubscription rights, for approximately 6.4 million shares or approximately 40% of the anticipated 16.0 million shares offered. Castle Creek Financial LLC, limited placement agent for the rights offering, has identified standby purchasers who have committed up to $48 million to purchase up to 9.6 million shares in the offering to the extent that shares remain available at the expiration date.
    The rights will expire on June 12, 2001 at 5:00 p.m. Eastern Time, unless the Company, in its sole discretion, decides to extend the expiration date. The subscription rights will be transferable only to a shareholder's affiliates and related parties. The Company will hold a conference call on May 30, 2001 at 11:00 a.m., Eastern Time (10:00 a.m., Indianapolis, Indiana time) for shareholders to discuss the rights offering with UAC management. Shareholders may participate by telephone by calling 800-347-6311.
    As soon as practicable after the record date, the Company expects to mail to its shareholders of record a final prospectus for the rights offering accompanied by a subscription rights certificate and related instructions for exercising their rights. The prospectus contains a description of the rights offering and other relevant information.
    If shareholders have any questions about this rights offering, including questions about subscription procedures and requests for additional copies of the prospectus or other documents, they should contact D.F. King & Co., Inc., the Information Agent, at 800-859-8509 (toll free) or 212-269-5550 (collect).
    This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state or jurisdiction.

    Corporate Description

    UAC is one of the nation's largest independent, indirect automobile finance companies. The Company's primary business is acquiring, securitizing and servicing prime retail installment sales contracts. These contracts are originated by dealerships affiliated with major domestic and foreign automobile manufacturers. The Company is focused on the upper-end of the credit quality spectrum. UAC commenced business in 1986 and currently acquires receivables from over 5,500 manufacturer-franchised dealerships in 40 states. By using state-of-the-art technology in a highly centralized underwriting and servicing environment, UAC enjoys one of the lowest cost operating structures in the independent prime automobile finance industry. More information on UAC can be obtained from its web site at www.unionacceptance.com.