UNITED STATES
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): February 3, 1999
UNITED COMPANIES FINANCIAL CORPORATION
(Exact name as specified in its charter)
Louisiana 1-7067 71-0430414
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
4041 Essen Lane, Baton Rouge Louisiana 70809
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(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (225) 987-0000
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events.
The Registrant files herewith the exhibit listed in Item 7(c) below.
Item 7(c). Exhibits.
The following exhibit is furnished in accordance with Item 601 of
Regulation S-K:
99 Press Release dated February 3, 1999
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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.
UNITED COMPANIES FINANCIAL CORPORATION
(Registrant)
Date: February 8, 1999 By: /s/ Dale E. Redman
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Dale E. Redman, Executive Vice President
and Chief Financial Officer
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INDEX TO EXHIBITS
EXHIBIT SEQUENTIALLY
NO. EXHIBIT NUMBERED PAGE
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99 Press Release dated February 3, 1999
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EXHIBIT 99
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[UNITED COMPANIES LOGO] For More Information,
Contact:
Dale E. Redman
Executive Vice President &
Chief Financial Officer
225-987-2385 or 800-234-8232
RELEASE DATE: February 3, 1999
UNITED COMPANIES ANNOUNCES MANAGEMENT CHANGES;
COMMENTS ON DEVELOPMENTS RELATING TO BANK CREDIT
FACILITY AND OTHER FINANCIAL MATTERS
BATON ROUGE, LA - - United Companies Financial Corporation (NYSE: UC)
today announced that J. Terrell Brown, Chief Executive Officer and President,
has been granted a requested 90-day leave of absence. Mr. Brown requested
the leave to pursue personal interests, including his possible participation
in offers to purchase all or a portion of the Company and its operations.
Mr. Brown will continue to serve as a director.
Mr. Brown's responsibilities will be substantially assumed by Deborah
Hicks Midanek, who was named Executive Vice President and Chief Restructuring
Officer. Ms. Midanek, a principal of Jay Alix & Associates, formerly served
as CEO of Solon Asset Management, an institutional investment management firm
specializing in mortgage-related instruments. Previously, she headed
non-agency mortgage finance at Drexel Burnham Lambert Group, Inc. Ms. Midanek
has been providing consulting services to the Company on a full-time basis
since December 1998. C. Geron Hargon, who has succeeded John D. Dienes as
Chief Operating Officer,will continue in that position.
Henry C. McCall III, treasurer of the Company, retired earlier this week,
but has agreed to be available as a consultant to the Board and Ms. Midanek.
The Company also announced that it anticipates that it will fail to be in
compliance with financial covenants in its $850 million bank credit facility
and $375 million aggregate principal amount of senior and subordinated notes
when its audited financial results for 1998 are finalized and become available.
Such a failure would result in an event of default under the related credit
agreement and indentures, unless, prior to the applicable cure periods, such
defaults are cured or waivers were to be sought and obtained.
The Company has not as yet engaged in any substantive discussions with its
bondholders concerning its compliance with financial covenants and no assurances
can be given that the requisite waivers will be obtainable. The Company said
that the previously announced agreement in principle with the agent bank for
its bank group regarding the restructuring of its credit facility has not
resulted in a definitive agreement. The Company is continuing its discussions
with the agent bank in an attempt to arrive at a mutually acceptable
restructuring of the facility.
The Company also stated that its bank credit facility currently is fully
drawn upon and recently it has been experiencing difficulties in generating
the liquidity necessary to maintain home equity loan production at levels
contemplated by its previously announced restructuring plan. The Company is
continuing to pursue all available alternatives to improve its liquidity and
financial condition, including whole loan sales and alternate sources of
financing, as well as other extraordinary transactions that could involve a
sale of all or a substantial part of the Company. The Company noted that
there can be no assurance that any such transactions or alternative financing
will be available to the Company.
United Companies Financial Corporation is a specialty finance company that
provides consumer loan products nationwide through its lending subsidiaries,
UC Lending(R) and Ginger Mae (R), Inc. The Company's Common and
Preferred Stock trade on the New York Stock Exchange under the symbols "UC"
and "UCPRI" respectively.
The following is a "Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995: The statements contained in this release that
are not historical facts are forward-looking statements based on the Company's
current expectations and beliefs concerning future developments and their
potential effects on the Company. There can be no assurance that future
developments affecting the Company will be those anticipated by the Company.
Actual results may differ from those projected in the forward-looking
statements. These forward-looking statements involve significant risks and
uncertainties (some of which are beyond the control of the Company) and are
subject to change based upon various factors, including but not limited to
the following risks and uncertainties: changes in the asset securitization
industry and in performance of the financial
markets, in the demand for and market acceptance of United Companies'
products, and in general economic conditions, including interest rates; the
presence of competitors with greater financial resources and the impact of
competitive products and pricing; the effect of the Company's policies
including the amount and rate of growth of Company expenses; the continued
availability to the Company of adequate funding sources; actual prepayment
rates and credit losses on loans sold as compared to prepayment
rates and credit losses assumed by the Company at the time of sale for purposes
of its gain on sale computations; the effect of changes in market interest rates
on the spread between the coupon rates on loans sold and the rates on securities
backed by such loans issued by the Company in securitization transactions and
on the discount rate assumed by the Company in its gain on sale computations;
timing of loan sales; the quality of the Company's owned and serviced loan
portfolio including levels of delinquencies, customer bankruptcies and
charge-offs; ratings; and various legal, regulatory and litigation risks.
The Company undertakes no obligation to publicly update or revise any forward-
looking statements, whether as the result of new information, future events or
otherwise. For a more detailed discussion of some of the on going risks and
uncertainties, see Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Investment Considerations in the Company's
Annual Report on Form 10-K for the year ending December 31, 1997, as well as
other Company filings with the Securities and Exchange Commission.
