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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) September
2, 1997.
NORWEST FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Iowa 2-80466 42-1186565
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
206 Eighth Street, Des Moines, Iowa 50309
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (515) 243-2131
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Item 2. Acquisition or Disposition of Assets.
As previously reported by Norwest Financial, Inc. (the
"Company") in its Form 8-K Current Report dated July 8,
1997, on June 23, 1997, Norwest Corporation ("Norwest"), the
indirect parent of the Company, entered into a definitive
purchase agreement with BankBoston Corporation ("BankBoston")
for Norwest to acquire Fidelity Acceptance Corporation
("Fidelity"), BankBoston's sub-prime automobile finance
subsidiary. At that time, Norwest and the Company
contemplated that the Company would acquire Fidelity,
directly or indirectly, and thereafter own and operate
Fidelity and its subsidiaries.
Norwest, through its wholly-owned subsidiary, Fidelity
Acceptance Holding, Inc. ("FAHI"), consummated the purchase
of Fidelity on August 31, 1997. On September 2, 1997,
Norwest made a capital contribution, without consideration,
of all of the issued and outstanding shares of capital stock
of FAHI to Norwest Financial Services, Inc. ("NFSI"), the
direct parent of the Company. Immediately thereafter, NFSI
made a capital contribution, without consideration, of all
of the issued and outstanding shares of capital stock of
FAHI to the Company and, as a result thereof, Fidelity
became an indirect wholly-owned subsidiary of the Company on
September 2, 1997.
As of June 30, 1997, Fidelity and its subsidiaries
operated 150 branch offices in 31 states and Guam. As of
such date Fidelity and its subsidiaries had approximately
$1.13 billion of net finance receivables outstanding.
The principal business of Fidelity and its subsidiaries
is making direct loans secured by automobiles and purchasing
sales finance contracts directly from automobile dealers.
Fidelity and its subsidiaries also offer credit life and
disability insurance to borrowers; some of these insurance
policies are reinsured by Fidelity's life insurance
subsidiary.
The cash purchase price for Fidelity included a $70
million premium in excess of the adjusted consolidated
stockholder's equity of Fidelity and its subsidiaries at
closing. The total purchase price was approximately $344
million. In addition, intercompany borrowings of Fidelity
and its subsidiaries, which totaled approximately $756
million, including accrued interest, were repaid at closing.
Funds necessary for the purchase of Fidelity and its
subsidiaries were obtained from the incurrence of additional
indebtedness by the Company (both short-term and long-term),
as well as from retained earnings. The sources and
approximate amounts of such funds were as follows:
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(In millions)
Long-term debt securities issued to the public $650
Short-term borrowings (commercial paper) 254
Internally generated funds (retained earnings) 196
$1,100
Such funds, totaling approximately $1.1 billion, were
lent by the Company to FAHI immediately prior to closing in
order to effectuate the purchase of Fidelity. No indebtedness
for borrowed money was assumed by the Company or any of its
subsidiaries in this transaction, except that $80,000,000
of 6.67% Senior Notes due October 15, 1997 issued by Fidelity
remain outstanding.
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 thereunto duly
authorized.
NORWEST FINANCIAL, INC.
By: /s/ Dennis E. Young
Dennis E. Young
Senior Vice President, Chief Financial
Officer and Treasurer
Date: September 3, 1997
