<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest Event
Reported) September 28, 1999
HEADLANDS MORTGAGE SECURITIES INC., (as sponsor under the Sale and
Servicing Agreement, dated as of September 1, 1999, providing for the
issuance of Headlands Home Equity Loan Trust 1999-1, Home Equity Loan
Asset-Backed Notes).
Headlands Mortgage Securities Inc.
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(Exact name of registrant as specified in its charter)
Delaware 333-79833 68-0397342
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
700 Larkspur Landing Circle 94939
Suite 240 ---------
Larkspur, California (Zip Code)
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(Address of Principal
Executive Offices)
Registrant's telephone number, including area code (415) 925-5442
<PAGE>
Item 5. Other Events
In connection with the offering of the Home Equity Loan Asset-Backed
Notes, Series 1999-1, Class A-1 and Class A-2 Notes, of which Headlands Home
Equity Loan Trust 1999-1 is the issuer, as described in a Prospectus Supplement
dated as of September 22, 1999 to the Prospectus dated as of June 14, 1999,
certain "Collateral Term Sheets" within the meanings of the May 20, 1994 Kidder,
Peabody No-Action Letter and the February 17, 1995 Public Securities Association
No-Action Letter were furnished to certain prospective investors (the "Related
Computational Materials").
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibit 99.1. Related Computational Materials (as defined in Item
5 above).
2
<PAGE>
SIGNATURES
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 hereunto duly authorized.
HEADLANDS MORTGAGE
SECURITIES INC.
By: /s/ Kristen Decker
---------------------
Name: Kristen Decker
Title: Vice President
Dated: September 29, 1999
3
<PAGE>
Exhibit Index
Exhibit
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99.1. Related Computational Materials (as defined in Item 5 above).
4
<PAGE>
This information is furnished to you solely by Greenwich Capital Markets, Inc.
and not by the Issuer of the securities or any of its affiliates. Greenwich
Capital Markets, Inc. is acting as Underwriter and not acting as Agent for the
Issuer or its affiliates in connection with the proposed transaction.
This Preliminary Term Sheet is provided for information purposes only, and does
not constitute an offer to sell, nor a solicitation of an offer to buy, the
referenced securities. It does not purport to be all-inclusive or to contain all
of the information that a prospective investor may require to make a full
analysis of the transaction. All amounts are approximate and subject to change.
The information contained herein supersedes information contained in any prior
term sheet for this transaction. In addition, the information contained herein
may be superseded by information contained in term sheets circulated after the
date hereof and is qualified in its entirety by information contained in the
Prospectus and Prospectus Supplement for this transaction. An offering may be
made only through the delivery of the Prospectus and Prospectus Supplement.
Final Term Sheet Prepared: September 28, 1999
$268,735,000 (Approximate)
Headlands Home Equity Loan Trust 1999-1
Home Equity Loan Asset-Backed Notes, Series 1999-1
[LOGO]Ambac
(Note Insurer)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
WAL Payment Expected
(Yrs.) Window Spread/ Rating Legal Final
Class Amount (1) Call Call (mos) Benchmark Coupon (S&P/Moody's) Maturity
<S> <C> <C> <C> <C> <C> <C> <C>
A-1 $211,693,000 2.75 1 - 80 1 M LIBOR 35.5 bps AAA/Aaa September 2025
A-2 $57,042,000 2.77 1 - 80 1 M LIBOR 40.0 bps AAA/Aaa September 2025
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
Total $268,735,000
(1) Subject to a plus or minus 10% variance.
Underwriter: Greenwich Capital Markets, Inc.
Seller & Servicer: Headlands Mortgage Company ("Headlands" or the
"Company").
Sponsor: Headlands Mortgage Securities, Inc.
Note Insurer: Ambac Assurance Corporation.
Indenture Trustee: First National Bank of Chicago.
Owner Trustee: Wilmington Trust Company.
Federal Tax Status: It is anticipated that the Class A-1 and the Class
A-2 Notes (the "Notes") will be treated as debt
instruments for federal income tax purposes.
Registration: The Notes will be available in book-entry form
through DTC.
Pricing Date: September 22, 1999.
Expected Closing Date: On or about September 29, 1999.
Expected Settlement Date: On or about September 29, 1999.
Cut-off Date: The close of business on September 15, 1999.
Interest Accrual Period: The interest accrual period with respect to the Class
A-1 and Class A-2 Notes for a given Distribution Date
will be the period beginning with the previous
Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) and ending on
the day prior to such Distribution Date (on an
Actual/360 basis).
GREENWICH CAPITAL
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<PAGE>
This information is furnished to you solely by Greenwich Capital Markets, Inc.
and not by the Issuer of the securities or any of its affiliates. Greenwich
Capital Markets, Inc. is acting as Underwriter and not acting as Agent for the
Issuer or its affiliates in connection with the proposed transaction.
This Preliminary Term Sheet is provided for information purposes only, and does
not constitute an offer to sell, nor a solicitation of an offer to buy, the
referenced securities. It does not purport to be all-inclusive or to contain all
of the information that a prospective investor may require to make a full
analysis of the transaction. All amounts are approximate and subject to change.
The information contained herein supersedes information contained in any prior
term sheet for this transaction. In addition, the information contained herein
may be superseded by information contained in term sheets circulated after the
date hereof and is qualified in its entirety by information contained in the
Prospectus and Prospectus Supplement for this transaction. An offering may be
made only through the delivery of the Prospectus and Prospectus Supplement.
Distribution Dates: The 15th day of each month (or the next succeeding
business day), beginning October 15, 1999.
Credit Enhancement: Excess Interest, Overcollateralization, Cross
Collateralization, the Reserve Fund and a surety wrap
to be provided by Ambac Assurance Corporation
("Ambac").
ERISA Eligibility: The Notes are expected to be ERISA
eligible. Prospective investors must review the
Prospectus and Prospectus Supplement and consult with
their professional advisors for a more detailed
description of these matters prior to investing in
the Notes.
SMMEA Treatment: The Notes will not constitute "mortgage related
securities" for purposes of SMMEA.
Optional Termination: 10% optional termination provision. If the optional
termination is not exercised, the Class A-1 and Class
A-2 margin will each double.
Prepayment Assumption: 40% CPR, 20% Draw Rate on the HELOCs
30% CPR on the Closed-End Seconds.
Mortgage Loans: As of the Cut-off Date, the aggregate
principal balance of the Mortgage Loans will be
approximately $270,767,162, of which: (i)
approximately $213,293,227 will be in Group I (the
"Group I Mortgage Loans") and (ii) approximately
$57,473,935 will be in Group II (the "Group II
Mortgage Loans" and together with the Group I
Mortgage Loans, the "Mortgage Loans").
Group I Mortgage Loans: The Group I Mortgage Loans will consist of
$186,294,677 of adjustable-rate home equity revolving
credit line loans (the "Group I HELOCs") made under
certain home equity revolving credit line loan
agreements and $26,998,550 of fixed-rate closed-end
second lien home equity loans (the "Group I
Closed-End Seconds"). The Group I Mortgage Loans
substantially conform to certain loan origination
standards with respect to loan balances as of the
date of origination set forth by the Federal National
Mortgage Association. These criteria have been used
solely in selecting the Group I Mortgage Loans. No
representation and warranty is made that each
individual Group I Mortgage Loan would be eligible
for purchase by the Federal National Mortgage
Association.
Group II Mortgage Loans: The Group II Mortgage Loans will consist of
$52,387,942 adjustable-rate home equity revolving
credit line loans (the "Group II HELOCs") made under
certain home equity revolving credit line loan
agreements and $5,085,993 of fixed-rate closed-end
second lien home equity loans (the "Group II
Closed-End Seconds").
Group I HELOC
Amortization: Approximately 75.22% of the Group I HELOCs have 5
year draw periods followed by a 10 year amortization
period, while the remaining 24.78% have a 15 year
draw period followed by a 10 year amortization
period. Each outstanding Group I HELOC principal
balance is fixed at the end of the draw period, and
then amortized over the subsequent 10 year period.
Each Group I HELOC interest rate continues to adjust
(on the first of each month) over the life of the
loan.
GREENWICH CAPITAL
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<PAGE>
This information is furnished to you solely by Greenwich Capital Markets, Inc.
and not by the Issuer of the securities or any of its affiliates. Greenwich
Capital Markets, Inc. is acting as Underwriter and not acting as Agent for the
Issuer or its affiliates in connection with the proposed transaction.
This Preliminary Term Sheet is provided for information purposes only, and does
not constitute an offer to sell, nor a solicitation of an offer to buy, the
referenced securities. It does not purport to be all-inclusive or to contain all
of the information that a prospective investor may require to make a full
analysis of the transaction. All amounts are approximate and subject to change.
The information contained herein supersedes information contained in any prior
term sheet for this transaction. In addition, the information contained herein
may be superseded by information contained in term sheets circulated after the
date hereof and is qualified in its entirety by information contained in the
Prospectus and Prospectus Supplement for this transaction. An offering may be
made only through the delivery of the Prospectus and Prospectus Supplement.
Group I Closed-end
Second Amortization: Fully amortizing and balloons.
Group I
HELOC Interest Rates: 100% Prime-based, monthly re-setting Group I HELOCs.
Substantially all of the Group I HELOCs are teased
for 3 months from origination and adjust thereafter.
The weighted average margin on the Group I HELOCs as
of the Cut-off Date is approximately 3.321%, with the
margins ranging from -1.000% to 7.000%. Substantially
all of the Group I HELOCs have a maximum interest
rate of 18% or higher, with no periodic caps.
Group I Closed-end
Second Interest Rates: 100% Fixed Rate.
Group II HELOC
Amortization: Approximately 71.49% of the Group II HELOCs have 5
year draw periods followed by a 10 year amortization
period, while the remaining 28.51% have a 15 year
draw period followed by a 10 year amortization
period. Each outstanding Group II HELOC principal
balance is fixed at the end of the draw period, and
then amortized over the subsequent 10 year period.
Each Group II HELOC interest rate continues to adjust
(on the first of each month) over the life of the
loan.
Group II Closed-end
Second Amortization: Fully amortizing and balloons.
Group II
HELOC Interest Rates: 100% Prime-based, monthly re-setting Group II HELOCs.
Substantially all of the Group II HELOCs are teased
for 3 months from origination and adjust thereafter.
The weighted average margin on the Group II HELOCs as
of the Cut-off Date is 2.982%, with the margins
ranging from 0.000% to 6.250%. Substantially all of
the Group II HELOCs have a maximum interest rate of
18% or higher, with no periodic caps.
Group II Closed-end
Second Interest Rates: 100% Fixed Rate.
The Trust
Headlands Home Equity
Loan Trust 1999-1: The Headlands Home Equity Loan Trust 1999-1 (the
"Trust") will issue the Class A-1 and Class A-2
Notes. The Class A-1 Notes are supported by the Group
I Mortgage Loans. As of the Closing Date, the Class
A-1 Notes will represent 99.25% of the mortgage loan
balance of the Group I Mortgage Loans as of the
Cut-off Date. The Class A-2 Notes are supported by
the Group II Mortgage Loans. As of the Closing Date,
the Class A-2 Notes will represent 99.25% of the
mortgage loan balance of the Group II Mortgage Loans
as of the Cut-off Date.
The property of the Trust, as of the Closing Date,
will consist primarily of the Group I Mortgage Loans
and the Group II Mortgage Loans, the Surety Policies
and the Reserve Fund.
GREENWICH CAPITAL
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<PAGE>
This information is furnished to you solely by Greenwich Capital Markets, Inc.
and not by the Issuer of the securities or any of its affiliates. Greenwich
Capital Markets, Inc. is acting as Underwriter and not acting as Agent for the
Issuer or its affiliates in connection with the proposed transaction.
This Preliminary Term Sheet is provided for information purposes only, and does
not constitute an offer to sell, nor a solicitation of an offer to buy, the
referenced securities. It does not purport to be all-inclusive or to contain all
of the information that a prospective investor may require to make a full
analysis of the transaction. All amounts are approximate and subject to change.
The information contained herein supersedes information contained in any prior
term sheet for this transaction. In addition, the information contained herein
may be superseded by information contained in term sheets circulated after the
date hereof and is qualified in its entirety by information contained in the
Prospectus and Prospectus Supplement for this transaction. An offering may be
made only through the delivery of the Prospectus and Prospectus Supplement.
The Notes
Class A-1 Notes: The Class A-1 Notes will initially evidence
approximately 99.25% of the Group I Mortgage Loan
Balance as of the Cut-off Date. The Class A-1 Notes
receive distributions of principal in the manner
described below. The Class A-1 Notes will receive
interest on each Distribution Date based on a
variable rate described more fully below.
Class A-2 Notes: The Class A-2 Notes will initially evidence
approximately 99.25% of the Group II Mortgage Loan
Balance as of the Cut-off Date. The Class A-2 Notes
receive distributions of principal in the manner
described below. The Class A-2 Notes will receive
interest on each Distribution Date based on a
variable rate described more fully below.
Credit Enhancement
Credit Enhancement: The Noteholders will have the benefit of the
following credit enhancement;
(a) Excess Interest Collections (described below);
(b) the Overcollateralization Amount (described
below);
(c) Cross Collateralization (described below);
(d) the Surety Policies (described below);
(e) the Reserve Fund (described below).
Excess
Interest Collections: For each class of Notes, the related interest
collections minus the sum of (i) the related Class A
Note Interest Paid; (ii) the related Servicing Fee
Paid; (iii) the related Premium Paid to Ambac and any
unreimbursed draws on the Policy; and (iv) the
related Trustee Fees Paid.
Class A-1
Overcollateralization
Amount: The Class A-1 Noteholders will be entitled to receive
distributions of Excess Interest Collections as
principal ("Class A-1 Accelerated Principal
Distribution Amounts") up to 3.50% of the Group I
Mortgage Loan Balance as of the Cut-off Date (the
"Class A-1 Required Overcollateralization Amount").
This distribution of interest as principal will have
the effect of accelerating the Class A-1 Notes
relative to the underlying Group I Mortgage Loans. On
any Distribution Date, the Class A-1
Overcollateralization Amount will be the amount by
which the Group I Mortgage Loan Balance exceeds the
Class A-1 Note Principal Balance. On any Distribution
Date on which the Group I Mortgage Loan Balance does
not exceed the Class A-1 Note Principal Balance by
the Class A-1 Required Overcollateralization Amount,
Excess Interest Collections will be distributed as
principal to the Class A-1 Noteholders to increase
the Class A-1 Overcollateralization Amount to the
Class A-1 Required Overcollateralization Amount.
GREENWICH CAPITAL
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<PAGE>
This information is furnished to you solely by Greenwich Capital Markets, Inc.
and not by the Issuer of the securities or any of its affiliates. Greenwich
Capital Markets, Inc. is acting as Underwriter and not acting as Agent for the
Issuer or its affiliates in connection with the proposed transaction.
This Preliminary Term Sheet is provided for information purposes only, and does
not constitute an offer to sell, nor a solicitation of an offer to buy, the
referenced securities. It does not purport to be all-inclusive or to contain all
of the information that a prospective investor may require to make a full
analysis of the transaction. All amounts are approximate and subject to change.
The information contained herein supersedes information contained in any prior
term sheet for this transaction. In addition, the information contained herein
may be superseded by information contained in term sheets circulated after the
date hereof and is qualified in its entirety by information contained in the
Prospectus and Prospectus Supplement for this transaction. An offering may be
made only through the delivery of the Prospectus and Prospectus Supplement.
Class A-2
Overcollateralization
Amount: The Class A-2 Noteholders will be entitled to receive
distributions of Excess Interest Collections as
principal ("Class A-2 Accelerated Principal
Distribution Amounts") up to 3.50% of the Group II
Mortgage Loan Balance as of the Cut-off Date (the
"Class A-2 Required Overcollateralization Amount").
This distribution of interest as principal will have
the effect of accelerating the Class A-2 Notes
relative to the underlying Group II Mortgage Loans.
On any Distribution Date, the Class A-2
Overcollateralization Amount will be the amount by
which the Group II Mortgage Loan Balance exceeds the
Class A-2 Note Principal Balance. On any Distribution
Date on which the Group II Mortgage Loan Balance does
not exceed the Class A-2 Note Principal Balance by
the Class A-2 Required Overcollateralization Amount,
Excess Interest Collections will be distributed as
principal to the Class A-2 Noteholders to increase
the Class A-2 Overcollateralization Amount to the
Class A-2 Required Overcollateralization Amount.
Cross Collateralization: After paying the "OC Deficit" (the amount by which
the Note Principal Balance exceeds the related Group
Mortgage Loan Balance) on the related class of Notes
from the related Excess Interest Collections, any
remaining amounts will be used (i) to pay accrued and
unpaid interest to the other unrelated class of
Notes; (ii) to pay the OC Deficit on the unrelated
class of Notes (iii) to pay unreimbursed draws on the
Policy with respect to the unrelated class of Notes;
(iv) to increase the Overcollateralization Amount on
the related mortgage loan group to the Required
Overcollateralization Amount and (v) to fund the
Reserve Fund up to the Reserve Fund Target Amount.
The Surety Policies: Ambac Assurance Corporation will issue a note
insurance policy with respect to each Class of Notes
which will guarantee timely interest and ultimate
repayment of principal to the Noteholders.
Reserve Fund: The Reserve Fund will initially be $0 on the Closing
Date and then will be funded on each Distribution
Date up to the Reserve Fund Target Amount. The
"Reserve Fund Target Amount" will be equal to the sum
of (i) the amount by which the Class A-1
Overcollateralization Amount is less than the Class
A-1 Required Overcollateralization Amount; and (ii)
the amount by which the Class A-2
Overcollateralization Amount is less than the Class
A-2 Required Overcollateralization Amount. The
Reserve Fund may be used to fund interest shortfalls
and OC Deficits on both classes of Notes.
Stepdown Date: On or after the Distribution Date occurring in
January 2003, the required targets for the Class A-1
Overcollateralization and the Class A-2
Overcollateralization will each be allowed to step
down to 7.00% of the mortgage loan balance of the
related mortgage loan group as of the end of the
related Collection Period, subject to a floor of
0.50% of the related group mortgage loan balance as
of the Cut-off Date.
GREENWICH CAPITAL
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<PAGE>
This information is furnished to you solely by Greenwich Capital Markets, Inc.
and not by the Issuer of the securities or any of its affiliates. Greenwich
Capital Markets, Inc. is acting as Underwriter and not acting as Agent for the
Issuer or its affiliates in connection with the proposed transaction.
This Preliminary Term Sheet is provided for information purposes only, and does
not constitute an offer to sell, nor a solicitation of an offer to buy, the
referenced securities. It does not purport to be all-inclusive or to contain all
of the information that a prospective investor may require to make a full
analysis of the transaction. All amounts are approximate and subject to change.
The information contained herein supersedes information contained in any prior
term sheet for this transaction. In addition, the information contained herein
may be superseded by information contained in term sheets circulated after the
date hereof and is qualified in its entirety by information contained in the
Prospectus and Prospectus Supplement for this transaction. An offering may be
made only through the delivery of the Prospectus and Prospectus Supplement.
Distributions on the Class A-1 and Class A-2 Notes
Principal Distributions
Managed Am. Period: The Managed Amortization Period will begin on the
Closing Date and end on the Distribution Date
occurring in September 2004 or earlier upon the
occurrence of a Rapid Amortization Event (as
described below). During the Managed Amortization
Period, the Class A-1 and Class A-2 Noteholders will
receive (a) the lesser of (i) the related Maximum
Principal Payment (as defined herein) and (ii) the
related Alternative Principal Payment (as defined
herein) minus (b) the related Overcollateralization
Reduction Amount (as defined herein). The related
"Overcollateralization Reduction Amount" is the
amount by which the related Overcollateralization
Amount exceeds the related Required
Overcollateralization Amount. The "Maximum Principal
Payment" is equal to 100% of the related principal
collections for such Distribution Date. The
"Alternative Principal Payment" is equal to the
amount (not less than zero) of related principal
collections for such Distribution Date less the
aggregate of related additional draws on existing
Trust HELOCs created during such Distribution Date.
Rapid Am. Period: Commencing no later than the Distribution Date
occurring in October 2004 (or earlier, upon the
occurrence of a Rapid Amortization Event (as
described below)), the Class A-1 and Class A-2
Noteholders will receive (a) the lesser of (i) the
related Maximum Principal Payment and (ii) the then
outstanding related Note Principal Balance minus (b)
the related Overcollateralization Reduction Amount.
Rapid Am. Event: With respect to each Class of Notes, any of the
following events described below:
a) failure on the part of the Company, the
Servicer or the Sponsor (i) to make a payment
or deposit required under the Sale and
Servicing Agreement or the Insurance Agreement
within two Business Days after notification
that such payment or deposit is required to be
made or (ii) to observe or perform in any
material respect any other covenants or
agreements of the Company, the Servicer or of
the Sponsor set forth in the Sale and
Servicing Agreement or the Insurance Agreement
or the Indenture, which failure continues
unremedied for a period of 60 days after
written notice;
b) any representation or warranty made by the
Company, the Servicer or the Sponsor in the
Sale and Servicing Agreement or the Insurance
Agreement or the Indenture proves to have been
incorrect in any material respect when made
and continues to be incorrect in any material
respect for a period of 60 days after written
notice and as a result of which the interests
of the Noteholders or the Insurer are
materially and adversely affected;
GREENWICH CAPITAL
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<PAGE>
This information is furnished to you solely by Greenwich Capital Markets, Inc.
and not by the Issuer of the securities or any of its affiliates. Greenwich
Capital Markets, Inc. is acting as Underwriter and not acting as Agent for the
Issuer or its affiliates in connection with the proposed transaction.
This Preliminary Term Sheet is provided for information purposes only, and does
not constitute an offer to sell, nor a solicitation of an offer to buy, the
referenced securities. It does not purport to be all-inclusive or to contain all
of the information that a prospective investor may require to make a full
analysis of the transaction. All amounts are approximate and subject to change.
The information contained herein supersedes information contained in any prior
term sheet for this transaction. In addition, the information contained herein
may be superseded by information contained in term sheets circulated after the
date hereof and is qualified in its entirety by information contained in the
Prospectus and Prospectus Supplement for this transaction. An offering may be
made only through the delivery of the Prospectus and Prospectus Supplement.
provided, however, that a Rapid Amortization
Event shall not be deemed to occur if the
Company, the Servicer or the Sponsor has
purchased the related Mortgage Loan or
Mortgage Loans if applicable during such
period (or within an additional 60 days with
the consent of the Indenture Trustee and the
Insurer) in accordance with the provisions of
the Indenture;
c) the occurrence of certain events of
bankruptcy, insolvency or receivership
relating to the Company, the Sponsor or
relating to the Trust;
d) the Trust becomes subject to regulation by the
Securities and Exchange Commission as an
investment company within the meaning of the
Investment Company Act of 1940, as amended;
e) the aggregate of all draws related to the
Class A-1 or Class A-2 Notes under the Policy
exceeds 1% of the related group mortgage loan
balance as of the Cut-off Date;
f) the default in payment of any interest,
principal, or any installment of principal on
the related Class of Notes when the same
becomes due and payable, if such default shall
continue for a period of five days;
g) a Servicer Termination Delinquency Rate
Trigger or Servicer Termination Loss Trigger,
as those terms are defined in the Insurance
Agreement, has occurred and is continuing.
Interest Distributions
Interest Distributions: Interest will be distributed on the Class A-1
Noteholders at a rate equal to the lesser of (a) One
Month LIBOR plus a margin of 35.5 basis points based
on the actual number of days elapsed since the prior
Distribution Date (or in the case of the first
Distribution Date, from the Closing Date) and (b) the
related Maximum Rate. Interest will be distributed on
the Class A-2 Noteholders at a rate equal to the
lesser of (a) One Month LIBOR plus a margin of 40
basis points based on the actual number of days
elapsed since the prior Distribution Date (or in the
case of the first Distribution Date, from the Closing
Date) and (b) the related Maximum Rate. The margin on
each Class of Notes will double if the optional
termination is not exercised.
The "Maximum Rate" is equal to the lesser of (x) the
weighted average of the loan rates minus (i) the
Servicing Fee Rate, (ii) the Insurance Premium Fee
Rate; (iii) a spread carveout of 0.50% per annum
after the twelfth Distribution Date and (iv) the
Indenture and Owner Trustee Fee Rates and (y) 15.50%.
Should the Noteholders receive an interest amount
based on clause (x) above (creating a "Deferred
Interest Amount"), future remaining interest amounts
to be distributed will first be allocated to
Noteholders accrued interest due and any
GREENWICH CAPITAL
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<PAGE>
This information is furnished to you solely by Greenwich Capital Markets, Inc.
and not by the Issuer of the securities or any of its affiliates. Greenwich
Capital Markets, Inc. is acting as Underwriter and not acting as Agent for the
Issuer or its affiliates in connection with the proposed transaction.
This Preliminary Term Sheet is provided for information purposes only, and does
not constitute an offer to sell, nor a solicitation of an offer to buy, the
referenced securities. It does not purport to be all-inclusive or to contain all
of the information that a prospective investor may require to make a full
analysis of the transaction. All amounts are approximate and subject to change.
The information contained herein supersedes information contained in any prior
term sheet for this transaction. In addition, the information contained herein
may be superseded by information contained in term sheets circulated after the
date hereof and is qualified in its entirety by information contained in the
Prospectus and Prospectus Supplement for this transaction. An offering may be
made only through the delivery of the Prospectus and Prospectus Supplement.
overdue accrued interest (with interest), then
Deferred Interest (with interest). In no event are
Deferred Interest Amounts rated by the Rating
Agencies or guaranteed under the Policy.
The Seller and Servicer
The Company was incorporated in California and commenced its mortgage banking
business in 1986. On February 10, 1998 the Company sold 8 million shares offered
at $12 per share through an initial pubic offering (Symbol "HDLD" listed on the
Nasdaq).
Prior to July 1, 1993, the Company's originated mortgage loans were funded by,
and in the name of, First California Mortgage Company ("FCMC"). On July 1, 1993,
the Company began originating mortgage loans in its own name as an authorized
seller/servicer with FCMC acting as subservicer for the Company with respect to
newly originated mortgage loans. By February 1994, the Company's Servicing
Center became operational, and all of the servicing functions were transferred
from FCMC to the Servicing Center by June, 1994.
The Company has 11 wholesale branches and a network of approximately 5,060
mortgage brokers. In addition, the Company initiated its correspondent and
retail lending divisions in 1994 to access new mortgage loan origination
markets.
On December 8, 1998, Greenpoint Financial Corp. reached a definitive agreement
to acquire the Company in a stock transaction worth about $473 million. On March
30, 1999, Greenpoint Financial Corp. completed the acquisition of Headlands
Mortgage Company. The acquisition was accounted for as a tax-free pooling of
interests, with 0.62 shares of Greenpont Financial Corp. stock being exchanged
for each share of Headlands stock. Headlands currently operates as a unit of
Greenpoint Bank.
GreenPoint Financial Corp. (NYSE: GPT) is a leading national specialty home
finance company with three principal subsidiaries. GreenPoint Mortgage, a
national mortgage banking company headquartered in Charlotte, is a leading
national lender in no-documentation residential mortgages. GreenPoint Credit,
headquartered in San Diego, is the second largest lender nationally in the
manufactured housing finance industry. GreenPoint Bank, a New York State
chartered savings bank, has $10.9 billion in deposits in 73 branches serving
more than 400,000 households in the Greater New York City area.
GREENWICH CAPITAL
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