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EXHIBIT 99.1
[AAMES FINANCIAL CORPORATION Letterhead]
Contact: James Huston
Investor Relations Department
Aames Financial Corporation
(323) 210-5311
FOR IMMEDIATE RELEASE
AAMES FINANCIAL CORPORATION ANNOUNCES $471.0 MILLION SECURITIZATION
SELLS SERVICING RIGHTS AND RESIDUAL INTEREST FOR CASH
RENEWS REPURCHASE FACILITY
LOS ANGELES, CALIFORNIA, DECEMBER 19, 2000 - AAMES FINANCIAL
CORPORATION (NYSE: AAM), a leader in subprime home equity lending, announced the
securitization of a pool of $471.0 million of home equity mortgage loans owned
by its wholly owned subsidiary, Aames Capital Corporation. Morgan Stanley Dean
Witter, Countrywide Securities Corporation, Greenwich Capital Markets, Inc. and
Lehman Brothers served as underwriters for the transaction. The securitization
transaction included the sale of the right to service the loans in the
securitization as well as the sale of the residual interest in the trust created
by the securitization for cash to third parties.
The $471.0 million securitization consists of approximately $146.0
million of fixed rate and $325.0 million of adjustable rate mortgage loans. The
mortgage pass-through certificates issued represent ownership interests in home
equity mortgage loans on one- to four-family residential properties located
throughout the United States. The certificates are insured by Financial Security
Assurance, Inc. and are rated "AAA" by Standard & Poor's, "AAA" by Fitch and
"Aaa" by Moody's.
The Company sold, in exchange for cash, the right to service the
mortgage loans in the pool to an unaffiliated third party. The Company also sold
for cash its residual interest in the trust created by the securitization
transaction to Capital Z Investments, an affiliate of the Company's largest
stockholder, pursuant to an existing Residual Forward Sale Facility.
"We are pleased with the pricing we received on this securitization
transaction and we continue to be encouraged by the support from the asset
backed investors which we believe validates the improvements we have achieved in
loan quality and volume," said A. Jay Meyerson, Chief Executive Officer. "This
marks the second consecutive quarter where we were able to take advantage of the
securitization market to sell our loans and, at the same time, improve our
liquidity position through the sale for cash of the residual interest and
servicing rights."
"While we sold our servicing rights in the two most recent
securitization transactions, our long-term business plan calls for growing our
servicing portfolio," said Meyerson. "We will continue to evaluate our
opportunities to improve our liquidity position in the future; however, we
remain committed to growing our servicing platform as it has historically
provided the Company with a stable, significant and recurring revenue source."
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The Company also announced that it renewed a $200.0 million committed
repurchase facility which would have expired in October. The Company has current
borrowing capacity under committed revolving warehouse and repurchase facilities
of $680.0 million (excluding a non-revolving subline).
Meyerson added, "Following the profitable September 30, 2000 quarter,
our first profitable quarter in a year, the transactions we are announcing today
show what I believe to be positive events for the Company as we are achieving
our turnaround objective to improve the value and quality of our higher
production levels while reducing our cost to originate. We are all very
confident about our progress toward improving shareholder value."
Aames Financial Corporation is a leading home equity lender, and at
September 30, 2000 operated 97 retail Aames Home Loan offices and 5 wholesale
loan centers nationwide.
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 flow and continued access to outside sources of cash to
fund operations; dependence on funding sources; third party rights to terminate
mortgage servicing; high delinquencies and losses in the Company's
securitization trusts; prepayment risk; changes in interest rates; basis risk;
prolonged interruptions or reductions in the secondary market for mortgage
loans; timing of loan sales; dependence on broker network; competition;
concentration of operations in California and Florida; economic conditions;
contingent risks on loans sold; government regulation; changes in federal income
tax laws; ability to pay dividends and the concentrated ownership of the
Company's controlling stockholder. 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
Annual Report on Form 10-K for the year ended June 30, 2000, Quarterly Report on
Form 10-K for the quarter ended September 30, 2000 and subsequent filings by the
Company with the United States Securities and Exchange Commission.
