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Falcon Financial Completes $115 Million Securitization - Premier Bond Issue Also a First for Auto Dealership Finance Industry -

18 August 1999

Falcon Financial Completes $115 Million Securitization - Premier Bond Issue Also a First for Auto Dealership Finance Industry -

    STAMFORD, Conn., Aug. 18 -- Falcon Financial LLC has
completed a $115 million bond issue that represents the first securitization
to consist entirely of auto dealership franchise loans.  The issue represents
bonds backed by long-term, fixed rate loans to such well-known brands as
Toyota, Honda, Ford, Dodge and Chevrolet, among others.  The transaction also
marks the first securitization for Falcon Financial, a company specializing in
originating and servicing franchise loans to auto dealers nationwide.
    "This initiative validates a new asset class in franchise loan
securitization," said David A. Karp, chief operating officer for Falcon
Financial.  "Traditional asset classes include quick-service restaurants and
gas station/convenience stores.  With this securitization, auto dealerships
have now emerged as an asset class in their own right.  Based on the investor
appetite for these bonds and the favorable subordination levels from the
rating agencies, we are extremely pleased with the interest this deal
received."
    This transaction was rated by Moody's Investors Service and Duff & Phelps
Credit Rating Co., with 77 percent of the offering receiving a AAA rating and
86.5 percent receiving investment grade ratings.  Goldman Sachs & Co. was the
underwriter on the deal.
    Karp said the securitization was well received because of the high quality
of the loan collateral and the growing interest by investors in the automotive
retailing industry.
    "Auto dealerships have become less reliant on new and used car sales as
the contribution to profits from the parts and service activities increases.
As this trend continues, the stability of the dealership's cash flow increases
and, consequently, the overall credit quality of the business enterprise is
enhanced," Karp said.
    Stamford, Conn.-based Falcon Financial was incorporated in 1997 to provide
capital solutions for automotive dealers.  The company offers, without
personal recourse, 15-year, fixed rate loans backed by a dealership's real
estate, net worth and estimated franchise value based on cash flow.  Because
Falcon Financial recognizes and lends on "blue sky" or estimated franchise
valuations, auto dealers are likely to obtain loan proceeds higher than from
traditional lenders.  Falcon Financial is owned by the senior management of
the company and SunAmerica Inc., an affiliate of Goldman, Sachs & Co.