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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
Date of Report (Date of earliest event reported): December 14, 1998
AAMES FINANCIAL CORPORATION
(Exact name of Registrant as Specified in Its Charter)
Delaware 0-19604 95-340340
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
350 South Grand Avenue, 52nd Floor
Los Angeles, California 90071
(Address of Principal Executive Offices)
(323) 210-5000
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(Registrant's Telephone Number, Including Area Code)
NA
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
Reference is made to the press release of Registrant issued on December
14, 1998 which contains information meeting the requirements of this Item 5 and
is incorporated herein by this reference. A copy of the press release is
attached to this Form 8-K as Exhibit 99.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Current Report on Form 8-K to be
signed on its behalf by the undersigned hereunto duly authorized.
AAMES FINANCIAL CORPORATION
Dated: December 15, 1998 By: /s/ Barbara S. Polsky
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Barbara S. Polsky
Executive Vice President,
General Counsel and Secretary
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
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99 Press release issued December 14, 1998
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EXHIBIT 99
Contact:
David Sklar
Aames Financial Corporation
(213) 210-5311
or
Jeffrey Lloyd/Steve Hawkins
Sitrick And Company
(310) 788-2850
FOR IMMEDIATE RELEASE
AAMES FINANCIAL CORPORATION RECEIVES ACCESS TO
ADDITIONAL $20 MILLION IN REVOLVING CREDIT LINE
Postpones Annual Meeting Because of Ongoing
Discussions with Potential Equity Investor
LOS ANGELES, CALIFORNIA, DECEMBER 14, 1998 - AAMES FINANCIAL
CORPORATION (NYSE:AAM), a leader in subprime home equity lending, today
announced that its revolving credit line secured by its interest-only strips has
been amended to permit the Company to borrow up to an additional $20 million
under that line.
Neil B. Kornswiet, Aames' president and co-chairman, said, "The
Company's liquidity needs typically peak in mid-month due primarily to our
obligation as the servicer of the loans we securitize to advance delinquent
interest to the securitization trusts at that time. Our ability to draw upon the
revolving credit line has assisted us in meeting our December obligations."
Cary H. Thompson, Aames chief executive officer, stated, "We are
acutely aware that the Company's long-term liquidity needs require a more
permanent solution, and we are taking steps to address this situation. We are
continuing in our discussions with a private equity fund concerning a proposal
for an up to $100 million equity investment in the Company, which we believe
would provide that permanent solution."
Thompson said that the Company has not yet reached an agreement with
the potential investor, and, if an agreement were reached the closing of such an
investment would be subject to certain conditions beyond the Company's control.
He added that no assurance could be given
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that an agreement will be reached and, if reached, that the transactions
contemplated by the agreement would be consummated.
Thompson added, "The Company has not yet felt the effects of the recent
improvement in the global markets, and access to the credit and capital markets
is still severely restrained for the subprime home equity sector."
According to the terms of the amended revolving line of credit, new
borrowings would be available for a ten-business-day-period and are secured by
interest-only strips with a book value far in excess of the borrowings. The
interest-only strips are subject to mark-to-market valuation or may otherwise be
deemed unacceptable, in the sole discretion of the lender. The Company's ability
to draw upon this line against next January's servicing obligations is dependent
upon the Company's execution of a definitive agreement with the private equity
fund with which the Company is currently in discussions and certain other
conditions.
The Company also announced that in the light of ongoing discussions
with the potential equity investor, the Company's annual meeting that had been
scheduled for December 18, 1998 would be postponed to a later to-be-announced
date.
Aames Financial Corporation is a leading home equity lender, and
currently operates 95 Aames Home Loan offices serving 33 states, including the
District of Columbia. Its wholly owned subsidiary, One Stop Mortgage, Inc.
currently operates 41 broker offices serving 46 states, including the District
of Columbia, and 17 Retail Direct offices serving 11 states.
From time to time the Company may publish forward-looking statements
relating to such matters as anticipated financial performance, business
prospects and similar matters. The Private Securities Litigation Reform Act of
1995 provides a safe harbor for forward-looking statements. In order to comply
with the terms of the safe harbor, the Company notes that a variety of factors
could cause the Company's actual results and experience to differ materially
from the anticipated results or other expectations expressed in the Company's
forward-looking statements. The risks and uncertainties that may affect the
operations, performance and results of the Company's business include the
following: negative cash flows and capital needs; delinquencies and losses in
securitization trusts; negative impact on cash flow, right to terminate mortgage
servicing; changes in interest rate environment; year 2000 compliance and
technological enhancement; prepayment risk; basis risk; credit risk; risk of
adverse changes in the secondary market for mortgage loans; dependence on
funding sources; dependence on broker network; risks involved in commercial
mortgage lending; strategic alternatives; competition; concentration of
operations in California; timing of loan sales; economic conditions; contingent
risks; and government regulation. For a more complete discussion of these risks
and uncertainties, see "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Risk Factors" in the Company's
form 10-K for the fiscal year ended June 30, 1998 and "Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations -- Risk
Factors" in form 10-Q for the quarter ended September 30, 1998.
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