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EXHIBIT 99.3
PRESS RELEASE
KBK COMPLETES $350 MILLION SECURITIZATION
FORT WORTH, Texas--(BUSINESS WIRE)--Dec. 18, 2000--KBK Capital Corporation,
(AMEX:KBK - news; PCX:KBK), which provides commercial loans and other financial
services to middle-market businesses, today announced that the Company has
completed a $350 million securitization, through its wholly-owned subsidiary,
KBK Financial, Inc. Under this new facility, factored receivables and commercial
business loans originated by KBK Financial, Inc., will be transferred, on a
non-recourse basis, into a newly created wholly-owned subsidiary, or special
purpose vehicle ("SPV"), named KBK Acceptance Company LP. Upon transfer to the
SPV, the assets will be pledged to a multi-user conduit, sponsored by a German
bank. After enhancement by a British insurance concern, the transaction was
rated A1 by Moody's and F1 by Fitch IBCA. KBK will not recognize any gain or
loss through its income statement as a consequence of this securitization
transaction.
This new facility will initially carry a five-year commitment of $200 million,
which may be increased to up to $350 million upon request by the Company and
consent by the conduit sponsor. The facility will revolve, allowing for daily
advances and pay downs, based on fluctuations in the Company's loan portfolio
and capital needs.
The new financing will replace both the Company's existing $85 million
off-balance sheet securitization, which was completed in 1997, and its $72.9
million multi-bank credit line. The Company's previous securitization facility
was structured as an off-balance sheet transaction under FAS 125 and was
dependent on annual renewal of 364-day liquidity lines provided by four
commercial banks. The multi-bank line was subject to a two-year maturity.
Historically, it had been the Company's practice to renew these commitments
annually.
Commenting on this new financing, Deborah B. Wilkinson, Executive Vice President
and Chief Financial Officer stated, "This new facility significantly enhances
KBK's capital structure and provides numerous benefits, including:
o (1) protection from possible disruptions in the liquidity and
credit markets for up to five years,
o (2) capacity to double the size of the Company's current
portfolio of loans and factored receivables, therefore
leveraging our strong equity capital and enhancing the return
on shareholder equity,
o (3) substantial reduction in the negotiation, communication
and reporting requirements involved in maintaining short-term
credit and liquidity lines through a group of financial
institutions,
o (4) flexibility to deal with an ever shifting portfolio asset
mix, as fluctuating economic and competitive conditions drive
changes in customer demand for factoring, working capital
lines of credit and term loans, and
o (5) simplification of the presentation of our financial
reporting to shareholders by returning the portfolio assets to
our balance sheet and eliminating cumbersome "as managed" vs.
"owned assets" disclosures and discussions."
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Robert J. McGee, Chairman and Chief Executive Officer, noted that, "The credit
markets continue to reflect clear signs of tightening and reduced liquidity.
During our 38-year history, KBK has done business throughout many changes in the
credit cycle. This experience has taught us that strong access to capital during
tighter credit environments brings strong profit opportunities. The financing
that we have just completed provides a level of capital significantly above our
current requirements and insulates KBK from market liquidity events for the next
5 years. We believe that this will allow the Company to fund our organic growth
without interruption, and allow us to be opportunistic regarding portfolio
acquisitions. Additionally, we believe that our own shares, which are currently
trading below book value, are significantly undervalued."
KBK Capital Corporation provides commercial loans, mezzanine loans, and
factoring to middle-market businesses. KBK operates through its branch offices
in the states of Texas, Missouri and California, as well as a nationwide
correspondent network. The Company is headquartered in Fort Worth, Texas, and
its common stock is listed on the American and Pacific Stock Exchanges under the
ticker symbol "KBK."
Additional information on the Company is available on the World Wide Web at
http://www.kbkcapital.com.
This press release includes statements that may constitute "forward-looking"
statements, usually containing the words "believe," "estimate," "project,"
"expect" or similar expressions. These statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements inherently involve risks and uncertainties that could
cause actual results to differ materially from the forward-looking statements.
Factors that would cause or contribute to such differences include, but are not
limited to, continued acceptance of the Company's products and services in the
marketplace, competitive factors, interest rates, and other risks detailed in
the Company's periodic report filings with the Securities and Exchange
Commission. By making these forward-looking statements, the Company undertakes
no obligation to update these statements for revisions or changes after the date
of this release.
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Contact:
KBK Capital Corporation, Fort Worth
Kathy Snook, 817/258-6000
or
RJ Falkner & Company, Inc.
R. Jerry Falkner, 800/377-9893
