Ugly Duckling Announces Closing of Senior Secured Loan Facility
17 May 1999
Ugly Duckling Announces Closing of Senior Secured Loan Facility and Completion of Securitization
PHOENIX--May 17, 1999--Ugly Duckling Corporation (Nasdaq NM: UGLY) today announced that it has entered into a $38 million senior secured loan facility. The facility has a two year term and is secured by the residual interests retained by the Company from its securitization transactions. The Company intends to use the facility to fund its growth. In the meantime, the Company will use the proceeds to pay down existing debt. Said Greg Sullivan, president and chief operating officer of the Company: "We believe this facility reflects confidence in our business and, in particular, the quality of the loan portfolio originated by our dealerships."The Company also announced that in April it securitized $120 million in auto finance loans and sold $87 million in certificates to investors in a private placement, the Company's largest securitization transaction to date. The transaction is part of the Company's ongoing securitization program instituted in March 1996. The $120 million in auto finance contracts backing the certificates were originated exclusively at Ugly Duckling's chain of used car dealerships. The certificates, which have a 5.65% coupon rate, are insured by MBIA and have been rated "AAA" by Standard & Poor's and "Aaa" by Moody's Investors Services. Since the inception of its securitization program in March 1996, the Company has closed 13 securitization transactions, securitizing over $775 million in loans and has sold nearly $600 million in certificates to investors.
Headquartered in Phoenix, Arizona, Ugly Duckling Corporation is a used car sales and finance company that operates through its 59 Ugly Duckling dealerships the nation's largest chain of used car dealerships focused exclusively on the sub-prime market. The Company also provides receivable-backed financing to small, independent sub-prime auto dealers and services over $450 million in sub-prime auto loans for third parties.
This press release may include statements that constitute forward-looking statements, usually containing the words "believe," "estimate," "project," "expects" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that could cause or contribute to such differences include factors detailed in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Risks Factors," in Ugly Duckling Corporation's most recent reports on Form 10-K and Form 10-Q (including Exhibit 99 to any such Form 10-Q), and elsewhere in Ugly Duckling Corporation's Securities and Exchange Commission filings. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this press release.