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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) OCTOBER 12, 1998
AMRESCO, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 001-11599 59-1781257
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
700 NORTH PEARL STREET
SUITE 2400, LB 342
DALLAS, TEXAS 75201
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (214) 953-7700
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ITEM 5. OTHER EVENTS.
On October 12, 1998, AMRESCO, INC. (the "Company") completed the sale
of approximately $936 million of commercial mortgage loans.
On October 19, 1998, the Company completed the sale of approximately
$1.0 billion of home equity loans and entered into a commitment to sell
approximately $400 million of additional home equity loans.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
99.1 Press Release dated October 12, 1998.
99.2 Press Release dated October 19, 1998.
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.
AMRESCO, INC.
Date: October 21, 1998 By: /s/ L. KEITH BLACKWELL
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Name: L. Keith Blackwell
Title: Senior Vice President,
General Counsel and Secretary
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EXHIBIT INDEX
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Item No. Description
- ------- -----------
99.1 Press Release dated October 12, 1998.
99.2 Press Release dated October 19, 1998.
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACTS: Media: Caroline Free
October 12, 1998 (214) 953-8478
[email protected]
Investors and Analysts: Tom Andrus
(214) 953-7704
[email protected]
AMRESCO ANNOUNCES $936 MILLION COMMERCIAL MORTGAGE LOAN SALE
DALLAS - AMRESCO (Nasdaq: AMMB) announced today that it has completed
the sale of $936 million in commercial mortgage loans. The cash proceeds from
the sale were used to payoff the warehouse facility used to finance the mortgage
loans, with the remainder used for other corporate needs.
In conjunction with this transaction, AMRESCO has closed its hedge
position related to the mortgages and thereby has eliminated the potential for
future margin calls related to these hedges and mortgage loans. The gain
resulting from the loan sale was offset by hedging losses, resulting in a $35.8
million net loss.
"This transaction substantially reduces the size of our balance sheet,
strengthens our liquidity position and reduces the risk associated with carrying
commercial mortgages in the current difficult market environment," said Robert
H. Lutz, Jr., chairman and CEO of AMRESCO.
Earnings per share for the recently completed third quarter are
expected to be nominal, ranging from $0.00 to $0.03 per fully diluted share.
This level of profitability reflects the mark to market of the company's entire
commercial mortgage portfolio at quarter end, including unfunded commitments.
AMRESCO expects to provide a full earnings release on October 20, 1998.
AMRESCO, INC. is a diversified financial services company specializing
in commercial and residential real estate and home equity lending; asset
management workout services; and commercial finance. The company is
headquartered in Dallas and has offices nationwide as well as internationally in
Canada, United Kingdom and Mexico. For more information about AMRESCO, visit the
web site at www.amresco.com.
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EXHIBIT 99.2
FOR IMMEDIATE RELEASE CONTACTS: Media: Caroline Free
October 19, 1998 (214) 953-8478
[email protected]
Investors and Analysts: Tom Andrus
(214) 953-7704
[email protected]
AMRESCO REPORTS THE SALE OF HOME EQUITY LOANS
DALLAS - AMRESCO (Nasdaq: AMMB) announces that it has completed the
sale of approximately $1.0 billion of home equity loans. The company has also
entered into a commitment to sell an additional $400 million in home equity
loans. This commitment is expected to close by October 23, 1998. The cash
proceeds from these transactions will repay the warehouse debt used to finance
the loans with the remainder available for general corporate purposes. As a
result of these transactions, AMRESCO will have less than $100 million in home
equity loans remaining on its balance sheet.
AMRESCO received a price of 100.625 percent of par for the loans.
Additionally, AMRESCO retained an interest in the loans that provides for
participation in the profits from a subsequent sale or securitization of the
loans. The company has also mutually agreed with a third party loan seller to
terminate a commitment to purchase an additional $260 million of home equity
loans. The company expects to recognize a fourth quarter pre-tax loss related to
these items ranging from $40 to $45 million. As a result, the company does not
have any significant unfunded home equity loan commitments.
"Although the loss resulting from this loan sale is disappointing, we
believe that this transaction greatly benefits the company by reducing the size
of our balance sheet, improving
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liquidity and eliminating the risk of margin calls related to the market value
of the loans and hedge positions," said Robert H. Lutz, Jr., chairman and CEO of
AMRESCO.
AMRESCO, INC. is a diversified financial services company specializing
in commercial and residential real estate and home equity lending; asset
management workout services; and commercial finance. The company is
headquartered in Dallas and has offices nationwide as well as internationally in
Canada, United Kingdom and Mexico. For more information about AMRESCO, visit the
web site at www.amresco.com.
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Note: Certain statements contained in this press release are not based on
historical facts. These statements are forward-looking statements that are based
on current expectations that involve a number of risks and uncertainties.
Consequently, actual results achieved may differ materially from what is
presented. For a discussion of such risks and uncertainties, see "Risk Factors"
in the reports that the company files with the Securities and Exchange
Commission, including the company's registration statement.
