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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of Earliest Event Reported): April 13, 1999
National Auto Finance Company, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-22067 65-0688619
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(Commission File Number) (I.R.S. Employer
Identification No.)
10302 Deerwood Park Boulevard, Suite 100
Jacksonville, Florida 32256
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(Address of Principal Executive Offices) (Zip Code)
(904) 996-2500
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
Filed herewith and incorporated herein by reference is a copy of the
National Auto Finance Company, Inc. (the "Company") Press Release, dated April
13, 1999, announcing that it has completed a comprehensive financial
restructuring of its Senior Subordinated and Junior Subordinated Notes, resolved
certain other issues with its Senior Subordinated Noteholders and Junior
Subordinated Noteholders, entered into several loan facilities and arrangements
with First Union National Bank, and modified certain of the terms of the
insurance guarantee arrangements with Financial Security Assurance, the
Company's bond insurer, related to the Company's securitized asset-backed bonds.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Exhibits.
(99) Press Release, dated April 13, 1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
Date: April 13, 1999.
NATIONAL AUTO FINANCE COMPANY, INC.
By: /s/ Stephen R. Veth
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Name: Stephen R. Veth
Title: Vice President, Secretary and
General Counsel
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NATIONAL AUTO FINANCE COMPANY, INC.
FORM 8-K
CURRENT REPORT
Exhibit Index
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Exhibit No. Description Page
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(99) Press Release,
dated April 13, 1999
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[NATIONAL AUTO FINANCE COMPANY LOGO]
EXHIBIT 99
Contact: Stephen R. Veth
Vice President, Secretary and General Counsel
(904) 996-2500
NATIONAL AUTO FINANCE COMPANY, INC.
ANNOUNCES COMPLETION OF
FINANCIAL RESTRUCTURING
JACKSONVILLE, Fla. (April 13, 1999) - National Auto Finance Company, Inc.
(Nasdaq/OTC:NAFI) today reported that it has completed a financial restructuring
of its Senior Subordinated and Junior Subordinated Notes, resolved certain other
issues with its Senior Subordinated Noteholders and Junior Subordinated
Noteholders, entered into several loan facilities and arrangements with First
Union National Bank, and modified certain of the terms of the insurance
guarantee arrangements with Financial Security Assurance, the Company's bond
insurer, related to the Company's securitized asset-backed bonds.
More specifically, the agreements and transactions with the Senior Subordinated
Noteholders provide for and include, among other things: (1) the waiver of the
past defaults and breaches of covenants, representations and warranties, if any,
made in connection with the Senior Subordinated Notes; (2) the granting to the
Company of the option to pay during the two-year period ending March 31, 2001,
fifty percent (50%) of the interest owed on the Senior Subordinated Notes
through the issuance of additional senior subordinated notes that are
convertible into common stock at the conversion price of $.75 per share; (3) the
issuance to the Senior Subordinated Noteholders of 7,071,429 shares of common
stock as consideration for the waivers and amendments granted to the Company;
and (4) the issuance to those Noteholders that also purchased common stock of
the Company at the time of their debt investment an additional 1,178,571 shares
of common stock in exchange for the execution and delivery of full and complete
releases of any claims arising by virtue of those Noteholders' equity
investment. In addition, the Senior Subordinated Noteholders were granted the
right to name three additional persons to the Board of Directors of the Company,
increasing to six seats their total number of Board representatives, thereby
giving them majority control of the Board.
The agreements and transactions with First Union National Bank provide for and
include, among other things: (1) the extension of the Company's warehouse line
for an additional two years and an increase in the amount the Company may borrow
under such facility from $75 million to $85 million; (2) the commitment by First
Union to purchase up to $20 million of subordinated asset-backed debt securities
in connection with the Company's securitizations; and (3) a revolving credit
facility enabling the Company to borrow up to $8 million for working capital
purposes, secured by the Company's residual interests in securitizations.
The agreements and transactions with the Junior Subordinated Noteholders provide
for and include, among other things: (1) the waiver of the past defaults and
breaches under the Junior Subordinated Notes; (2) the granting to the Company of
the option to pay during the period ending January 31, 2002 up to one hundred
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percent (100%) of the interest owed on the Junior Subordinated Notes through the
issuance of additional Junior Subordinated Notes that are convertible into
common stock at the conversion price of $.75 per share; and (3) the granting to
the Board designees of the Senior Subordinated Noteholders an irrevocable proxy
to vote the 4,230,000 shares of common stock held by National Auto Finance
Company, L.P. (a limited partnership controlled by certain of the Junior
Subordinated Noteholders) in all matters as to which such shares are entitled to
vote.
The agreements and transactions with Financial Security Assurance provide for
and include, among other things: (1) the resetting of the cash spread accounts
in each of the Company's term asset-backed securitizations that have been
guaranteed by Financial Security Assurance for the remaining term of such
securitizations, assuming no further performance defaults or servicer defaults
(the Company has already funded all such spread accounts above the required
level and, therefore, expects to receive in June 1999 from the trustee of each
such securitizations a distribution of all amounts previously funded in excess
of the required level, anticipated to be approximately $2.5 million); and (2)
the resetting of the portfolio performance requirements that, if violated, would
constitute a default under the insurance guaranty agreements issued by Financial
Security Assurance, to levels that are commensurate to the Company's expected
future portfolio performance in each of such securitizations.
"The consummation of these transactions brings to closure a turbulent year for
National Auto Finance Company," said Keith Stein, chief executive officer. "With
the closing of this comprehensive restructuring, NAFI is well positioned to
execute on its business plan, which includes the resumption of measured growth
in our loan originations and the size of our servicing portfolio. We intend to
focus our efforts in the geographic regions in which we have historically been
strongest, and to continue our highly personalized approach to dealer servicing.
We have been successful in generating business through strategic alliances with
banks, and expect to pursue new opportunities of a similar nature. We also
intend to engage in aggressive marketing strategies to attract third-party
client servicing portfolios, thereby fully exploiting our extensive servicing
capabilities."
The Company also announced today that it expects to release its earnings for the
year ended December 31, 1998, and file its annual report on Form 10-K for such
year within the next several days.
This news release contains statements that are forward looking statements within
the meaning of applicable federal securities laws and are based upon the
Company's current expectations and assumptions, which are subject to a number of
risks and uncertainties, which could cause actual results to differ materially
from those anticipated. Primary factors that could cause actual results to
differ include the availability of financing on terms and conditions acceptable
to the Company, the ability of the Company to securitize its finance contracts
in the asset-backed securities market on terms and conditions acceptable to the
Company, and changes in the quality or composition of the serviced loan
receivable portfolio. Certain of these as well as other factors will be
described in more detail in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998, and in certain other reports filed by the Company
with Securities and Exchange Commission.
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