National Auto Finance Announces Completion of $51M Securitization
1 October 1999
National Auto Finance Company, Inc. Announces Completion of $51 Million Securitization
JACKSONVILLE, Fla.--Oct. 1, 1999--National Auto Finance Company, Inc. (OTC:NAFI), a leading non-prime auto finance company based in Jacksonville, Florida, today announced that it has completed a $51 million asset-backed securitization with two of the nation's largest financial institutions.Keith Stein, Chairman and CEO of National Auto Finance Company, Inc., said that certain affiliates of Prudential Insurance Company of America and First Union National Bank purchased asset-backed notes from NAFI. Under terms of the transaction, Prudential purchased $48 million in Class A Notes, while First Union National Bank purchased $3 million in Class B Notes, each secured by a pool of NAFI's non-prime automobile loans. Payment of principal and interest on the Class A Notes has been guaranteed under an insurance policy issued by Financial Security Assurance, Inc.
"While securitizations are fairly routine in the industry," Stein said, "this transaction is very significant in that it is the first one for National Auto Finance Company, Inc., since the company underwent a major financial restructuring. The successful closure of this securitization shows that three major financial institutions, Prudential Insurance Company of America, First Union National Bank and Financial Security Assurance, believe NAFI can continue to effectively generate and successfully service the kind of loans that make these investments attractive."
"Notwithstanding our financial challenges," Stein emphasized, "a number of financial institutions have recognized the major transformation NAFI has undergone within the last 18 months, especially the efforts we've made in improving the efficiency and effectiveness of our business processes and systems, including setting up state-of-the-art servicing and collections units."
Through NAFI's restructuring and reorganization process, which included significant investment in technology, the non-prime auto finance company can quickly and efficiently process loans, thus speeding the application and decision process. Aiding in the process is NAFI's risk-based pricing structure, which helps consumers with less than perfect credit obtain the financing they need. "While we make loans through our national dealer network," Stein said, "we know that, ultimately, consumers are the winners. They drive away happy with their needs having been met."
NAFI has made tremendous strides toward profitability in the past several months. The $51 million securitization is the latest in a series of positive developments that has signaled a major turnaround for the Jacksonville-based non-prime auto finance company.
The company has built a strong leadership team of innovative industry veterans, consolidated its headquarters, operations and servicing in one location in Jacksonville, FL, and successfully completed important elements of its financial restructuring. Most importantly, NAFI's positive outlook has been buoyed by the ongoing support and commitment from its lending partners, particularly First Union National Bank. First Union recently extended the company's warehouse line for an additional two years, along with a $10 million increase to $85 million.
What's more, NAFI has engaged an aggressive marketing strategy to establish alliance relationships with myriad financial institutions for referral of their non-prime auto lending business. NAFI has also positioned itself to take on client servicing of loan portfolios, having recently been licensed in Florida as a consumer collection agency.
"We've accomplished a lot in a short time," said NAFI's Stein. "And we are well positioned to further execute on our business plan, which includes measured growth in our loan originations and in the size of our servicing portfolio without compromising prudent credit underwriting.
"In addition to focusing our efforts in the geographic regions in which we have historically been strongest with a continuation of our highly personalized approach to dealer servicing, we are aggressively pursuing several e-commerce marketing alliances, and have enhanced our web site to enable on-line loan applications and retrieval of loan performance data," Stein added.
National Auto Finance Company, Inc. is a specialized consumer finance company engaged in the purchase, securitization and servicing of automobile loans primarily originated by manufacturer-franchised automobile dealers for non-prime consumers. The company markets its products and services to dealers through the efforts of its direct sales force and through strategic referral and marketing alliances with financial and other institutions that have established relationships with dealers. NAFI has active contractual relationships with approximately 775 dealers in 35 states.