<PAGE>
EXHIBIT 99.1
Financial Corporation
[LOGO]
Contact: Joseph R. Tomei
Investor Relations Department
Aames Financial Corporation
(323) 210-5311
FOR IMMEDIATE RELEASE
AAMES FINANCIAL CORPORATION RECEIVES $15.3
MILLION IN SECOND PHASE OF $50.0 MILLION EQUITY INVESTMENT
BY CAPITAL Z AFFILIATE.
LOS ANGELES, CALIFORNIA, JULY 12, 2000 - AAMES FINANCIAL CORPORATION
(NYSE: AAM), a leader in subprime home equity lending, today reported that it
received $15.3 million in the second phase of the previously announced $50.0
million equity investment by Specialty Finance Partners, an affiliate of Capital
Z Financial Services Fund II, L.P., and the Company's lead stockholder ("Capital
Z"), following the filing of certain amendments to its Certificate of
Incorporation.
In the first phase of the investment by Capital Z, which closed on June
7, 2000, the Company sold 40.8 million shares of Series C Convertible Preferred
Stock to Capital Z for $0.85 per share (or $34.7 million in the aggregate) and
issued to Capital Z warrants to purchase an additional 5.0 million shares of
Series C Convertible Preferred Stock for $0.85 per share.
Today, the Company sold 18.0 million shares of a newly designated class
of preferred stock, the Series D Convertible Preferred Stock, for $0.85 per
share (or $15.3 million in the aggregate). In addition, Capital Z exchanged the
40.8 million shares of Series C Convertible Preferred Stock it purchased on June
7, 2000 for 40.8 million shares of Series D Convertible Preferred Stock and also
exchanged the warrant to purchase 5.0 million shares of Series D Convertible
Preferred Stock that was issued on June 7, 2000 for a new warrant to purchase
5.0 million shares of Series D Convertible Preferred Stock for $0.85 per share.
Prior to today's investment by Capital Z, the Company amended its
Certificate of Incorporation to designate shares of the Company's preferred
stock as Series D Convertible Preferred Stock, which has identical terms and
conditions as the Series C Convertible Preferred Stock, except that the Series D
Convertible Preferred Stock has a stated value and a liquidation value per share
of $0.85. The holders of Series D Convertible Preferred Stock have no right to
vote to elect directors of the Company.
1
<PAGE>
The Company's Certificate of Incorporation was also amended to
eliminate the effect of the investment by Capital Z on the "conversion ratio" of
the Company's Series B Convertible Preferred Stock and Series C Convertible
Preferred Stock. The "conversion ratio" is the number of shares of the Company's
Common Stock that holders of the Series B Convertible Preferred Stock and Series
C Convertible Preferred Stock are entitled to receive upon conversion of such
preferred stock. As a result of the first phase of the investment by Capital Z,
the conversion ratio of the Series B Convertible Preferred Stock was adjusted
from 0.2 to 0.23 and the conversion ratio of the Series C Convertible Preferred
Stock was adjusted from 1.00 to 1.153. The amendment to the Company's
Certificate of Incorporation adjusted the conversion ratio of the Series B
Convertible Preferred Stock back to 0.2 and the conversion ratio of the Series C
Convertible Preferred Stock back to 1.00. The conversion ratio of the Series B
Convertible Preferred Stock was adjusted from 1.00 to 0.2 in April 2000 to
reflect a one-for-five reverse stock split of the Common Stock.
Aames Financial Corporation is a leading home equity lender, and at
March 31, 2000 operated 101 retail Aames Home Loan offices and 7 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 and 10-K/A for the fiscal year ended June 30, 1999
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 March
31, 2000, and subsequent Company Filings with the United States Securities and
Exchange Commission.
2
