Aames Financial Corporation Completes $235.0 Million Securitization; Plans Commencement of Rights Offering and Retains Financial Advisor.Business Editors LOS ANGELES--(BUSINESS WIRE)--Jan. 23, 2002 Aames Financial Corporation (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :AMSF AMSF Australian Motor Sport Foundation AMSF Area Maintenance and Supply Facility (US Army) AMSF Army Morale Support Fund AMSF Area Maintenance Support Facility AMSF Army Maintenance Supply Facilities AMSF Alkali Metal Storage Facility ), a leader in subprime home equity lending, announced today the successful completion of a $235.0 million asset backed securitization of mortgage loans during the three months ended December 31, 2001, the planned commencement of its previously announced rights offering and the retention of UBS UBS Union Bank of Switzerland UBS United Bible Societies UBS United Blood Services UBS United Buying Service UBS Used Bookstore UBS University Business Services UBS Universal Building Society (UK) UBS Ulaanbaatar Broadcasting System Warburg as a financial advisor. Securitization Aames closed a $235.0 million securitization transaction of fixed rate mortgage loans during the three months ended Dec. 31, 2001. At Dec. 31, 2001, Aames had retained the residual interest Residual Interest A type of interest payment received by investors in a real estate mortgage investment conduit (REMIC). Notes: Investors receive interest payments after all required regular interest has been paid to investors within higher priority tranches. created in the securitization transaction. Aames sold for cash the servicing rights and prepayment penalties related to the mortgage loans in the securitization transaction to an independent third party mortgage loan servicing company. "The December 2001 securitization transaction was our sixth consecutive quarterly securitization and demonstrates our commitment to pursuing a diversified loan disposition strategy by accessing both the whole loan sale and securitization markets," said A. Jay Meyerson, Aames' Chief Executive Officer. Rights Offering Aames plans to commence on January 29, 2002 its previously announced rights offering to record holders of its common stock. Aames has set a record date for this offering as of January 22, 2002. The rights offering grants holders of common stock on the record date the right to purchase 2.56 shares of Aames Series D convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". at $0.85 per share for each share of Aames common stock owned. Aames anticipates the rights offering will expire February 12, 2002. Please refer to Aames' registration statement on Form S-3 filed with the Securities and Exchange Commission for more information. Financial Advisor Aames has retained UBS Warburg as a financial advisor to explore options for a possible restructuring of Aames' outstanding 9.125% senior notes due November 2003 and its 5.5% convertible subordinated debentures due March 2006. There can be no assurance that any such restructuring can be successfully completed. Aames is a leading home equity lender and at December 31, 2001 operated 100 retail Aames Home Loan branches, five wholesale loan centers and two National Loan Centers throughout the United States. From time to time Aames may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects and similar matters. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for forward-looking statements. In order to comply with the terms of the safe harbor, Aames notes that a variety of factors could cause its actual results and experience to differ materially from the anticipated results or other expectations expressed in its forward-looking statements. The risks and uncertainties that may affect the operations, performance and results of Aames' business include the following: negative cash flow and continued access to outside sources of cash to fund operations; dependence on funding sources; third party rights to terminate mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. ; high delinquencies and losses in its securitization trusts; prepayment risk Prepayment Risk The uncertainty related to unscheduled prepayment in excess of scheduled principal repayment. Notes: This risk is generally associated with mortgage securities. ; changes in interest rates; basis risk; prolonged interruptions or reductions in the secondary market for mortgage loans; timing of loan sales; dependence on broker network; competition; concentration of operations in California and Florida; economic conditions; contingent risks on loans sold; government regulation; changes in federal income tax laws; ability to pay dividends and the concentrated ownership of its controlling stockholder. For a more complete discussion of these risks and uncertainties, see "Item 7. Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations -- Risk Factors" in Aames' Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended June 30, 2001 and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" in Form 10-Q for the quarter ended September 30, 2001, and subsequent filings with the United States Securities and Exchange Commission. |
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