Credit Store Completes Sale of Securitization Interests; Company Also Releases Preliminary Numbers for the First Quarter.SIOUX FALLS Sioux Falls, city (1990 pop. 100,814), seat of Minnehaha co., SE S.Dak., on the Big Sioux River; settled 1856, inc. as a village 1877, as a city 1883. Settlers abandoned the site in 1862 because of Native American raids, but with the establishment (1865) of Fort , S.D.--(BUSINESS WIRE)--Nov. 30, 1999-- The Credit Store, Inc. (EBB: PLCR) announced today it has completed the sale of its three special-purpose subsidiaries, which hold approximately $19 million in performing credit card receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed . This sale is expected to generate a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern gain of approximately $5.0 million, depending on confirmation of final settlement amounts, the Company said, which will be reflected in financial statements for the second quarter, fiscal year 2000, which ends today. The Credit Store said that the special-purpose subsidiaries sold were formed by the Company during FY 1999 to securitize Securitize The practice of a company selling accounts receivables or other debts owed to it. The third party that buys the debt assumes ownership of it and the responsibility for collecting the debts, and keeps the repayments when made. three separate pools of seasoned performing credit card receivables. At the time of the securitizations, the Company recorded a total $8.0 million pretax gain. The approximately $5.0 million gain is in addition to that initial $8.0 million gain, and resulted from the sale of all remaining equity interest in each subsidiary that had been retained by The Credit Store at the time of each securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. . The purchaser subsequently has sold the subsidiaries'credit card receivables and underlying accounts to a large independent credit card bank. No other details of the transactions were disclosed. Separately, The Credit Store announced preliminary results for the first quarter of fiscal year 2000, which ended August 31, 1999. Total revenues for the first quarter were approximately $8.1 million and the net loss was $2.5 million. After the requirement for preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) , the Company showed a loss applicable to common shareholders of approximately $3.0 million, which translated to a loss of approximately $0.09 per common share for the quarter. The net loss in the first quarter was primarily the result of the lack of the securitization or sale of any receivables portfolios in the quarter. The Company has noted previously that the lack of a securitization or sale in any given quarter can cause revenues and the level of profit or loss to fluctuate sharply from quarter to quarter as a matter of routine business. The customary detailed results for the fiscal first quarter will be released in early to mid December December: see month. , in conjunction with The Credit Store's filing of its Form 10 with the Securities and Exchange Commission, the Company said. Based on today's announced sale of the three special-purpose subsidiaries, the Company additionally said it expects to report a profitable second quarter. The detailed results for fiscal year's second quarter are expected to be announced To be announced (TBA) A contract for the purchase or sale of an MBS to be delivered at an agreed-upon future date but does not include a specified pool number and number of pools or precise amount to be delivered. early next calendar year. Martin J. Burke The name Burke (from Irish Gaelic de Burca, of Norman origin). In English the meaning of the name Burke is "fortified hill." See also Berkley. Places Australia
Burke continued, "The sale of the special-purpose subsidiaries is an important event for The Credit Store. Our business has now reached the stage where our receivables are sufficiently seasoned to be attractive to other credit card companies. More importantly, the market has shown us that once sufficiently seasoned, our receivables trade in the market place at prices similar to standard credit card receivables. Our customers are of great interest to traditional credit card companies who are looking to grow their portfolios." The Credit Store, Inc. is a technology-based financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. company that provides credit card products to consumers who may otherwise fail to qualify for a traditional unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. bank credit card. The Company reaches these consumers by acquiring portfolios of non-performing consumer receivables and offering a new credit card to those consumers who agree to pay all or a portion of the outstanding amount due on their debt. The new card is issued with an initial balance and credit line equal to the agreed repayment amount. After appropriate seasoning, the Company seeks to sell or securitize the credit card receivables generated by this business strategy. |
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