ContiFinancial to Sell Triad Financial Corporation
8 June 1999
ContiFinancial to Sell Triad Financial Corporation
NEW YORK--June 7, 1999--ContiFinancial Corporation has entered into a definitive agreement to sell, subject to obtaining requisite state and federal regulatory approvals, Triad Financial Corporation, its wholly-owned non-prime automobile finance subsidiary, to Fairlane Credit LLC, a wholly-owned subsidiary of Ford Motor Credit Company.Glenn Goldman, Executive Vice President of ContiFinancial, said, "The sale of Triad will result in a gain to ContiFinancial and provide approximately $125 million of liquidity through sale proceeds, repayment of intercompany debt and return of warehouse financing haircuts. Of this amount, approximately $90 million will be used to pay down ContiFinancial's revolving credit and commercial paper facilities. This transaction is consistent with ContiFinancial's strategy of creating liquidity to focus on its core businesses and moving toward operating on a cash flow positive basis."
Triad Financial is an automobile finance company based in Huntington Beach, California, engaged in the business of purchasing and servicing prime and non-prime retail installment sale contracts from automobile dealers, and by direct lending. Triad provides funding primarily for late model used vehicles and has relationships with over 3,500 dealers in 33 states. As of May 31, 1999, its serviced portfolio was approximately $555 million.
ContiFinancial Corporation is a diversified financial services company, with headquarters in New York City and over 3,000 employees nationwide. The Company, through ContiMortgage Corporation and other subsidiaries, is a leading originator, securitizer, servicer and seller of home equity loans made to borrowers whose needs may not be met by traditional financial institutions. In addition, through Keystone Mortgage Partners LLC, the Company arranges financing for a wide range of commercial real estate. Through ContiTrade Services L.L.C., the Company also provides financing and securitization services and, through ContiFinancial Services Corporation, bond placement services, to subsidiaries and other originators of a broad range of loans including home equity loans; home improvement loans; charged-off consumer debt and franchisee loans. Please visit the Company's Web site at www.contifinancial.com.
Certain statements contained in this news release, including, but not limited to, statements relating to the Company's strategic objectives, raising additional equity and future performance, which are not historical fact, may be deemed to be forward-looking statements under the federal securities laws. There are many important factors that could cause the Company's actual results to differ materially from those indicated in the forward-looking statements, including the ability of the Company, in fact, to raise new equity and to conclude the sale of Triad as contemplated. Such factors also include, but are not limited to, general economic conditions; interest rate risk; prepayment speeds; delinquency and default rates; credit losses; changes (legislative and otherwise) in the asset securitization industry; demand for the Company's services; residential and commercial real estate values; the ability of the Company to negotiate agreements to sell whole loans; the impact of certain covenants in loan agreements of the Company; the degree to which the Company is leveraged; its needs for financing; the continued availability of the Company's credit facilities; the risk of margin calls on the Company's credit facilities and hedge positions; capital markets conditions, including the markets for asset-backed securities, commercial mortgage-backed securities and net interest margin securities; the performance of the Company's subsidiaries and affiliates; the Company's Year 2000 issues; and other risks identified in the Company's Securities and Exchange Commission filings. In addition, it should be noted that past financial and operational performance of the Company is not necessarily indicative of future financial and operational performance.