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Pricing Supplement dated March 14, 1999 Rule #424(b)(3)
(To Prospectus dated August 6, 1997) File No. 333-28291
$200,000,000 Principal Amount
Advanta Corp.
91 Day Notes
Six, Eighteen and Thirty Month Notes
One, Two, Three, Four, Five, Seven and Ten Year Notes
<TABLE>
<CAPTION>
Annual
Annual Interest Percentage
Interest Rate Percentage Rate Yield
Maturity Per Annum Yield (APY) Maturity Per Annum (APY)
<S> <C> <C> <C> <C> <C>
91 Days 6.77% 7.00% One Year 8.39% 8.75%
Six Months 7.93% 8.25% Two Years 8.62% 9.00%
Eighteen Months 8.57% 8.95% Four Years 9.08% 9.50%
Thirty Months 8.85% 9.25% Five Years 9.53% 10.00%
</TABLE>
RECENT DEVELOPMENTS
On October 28, 1997, Advanta Corp. (the "Company") announced that it
had reached a definitive agreement under which the Company would contribute its
consumer credit card business to Fleet Credit Card, LLC, a Rhode Island limited
liability company (the "LLC") in exchange for a 4.99% interest in the LLC,
pursuant to the terms of a Contribution Agreement (the "Contribution Agreement")
with Fleet Financial Group, Inc. ("Fleet") (the "Transaction"). Under the terms
of the Contribution Agreement, Fleet would contribute its consumer credit card
business to the LLC in exchange for a 95.01% interest in the LLC. The Company
would continue to operate its mortgage and business services companies.
A Special Meeting of stockholders of the Company (the "Special
Meeting") was held on February 20, 1998 at the Company's headquarters. At the
Special Meeting, holders of shares of the Company's Class A Common Stock and
Class A Preferred Stock were asked to vote upon a proposal to approve the
Transaction.
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At the Special Meeting, 12,754,956 votes were cast in favor of
approving the Transaction, 53,954 votes were cast against the Transaction and
7,838 votes cast to abstain.
The transactions contemplated by the Contribution Agreement were
consummated on February 20, 1998.
In connection with the consummation of the transactions contemplated by
the Contribution Agreement, the various nationally recognized rating agencies
lowered their ratings of the Company's debt securities. As of the date of this
Pricing Supplement, senior debt of the Company is rated investment grade by one
of the nationally recognized rating agencies and below investment grade by the
other four rating agencies.
Pursuant to the terms of an Offer to Purchase dated January 20, 1998
(the "Offer to Purchase"), the Company made a tender offer (the "Tender Offer")
to purchase 7,882,750 shares of its Class A Common Stock, including associated
Class A Purchase Rights (collectively, the "Class A Shares"), 12,482,850 shares
of its Class B Common Stock, including associated Class B Purchase Rights
(collectively, the "Class B Shares") and 1,078,930 shares of its Depositary
Shares each representing a one one-hundredth interest in a share of 6-3/4%
Convertible Class B Preferred Stock, Series 1995 (Stock Appreciation Income
Linked Securities (SAILS)) (the "SAILS Depositary Shares"). The Company offered
to purchase the Class A Shares and Class B Shares each at a purchase price, net
to the seller, in cash of $40 per share and offered to purchase the SAILS
Depositary Shares at a purchase price, net to the seller, in cash of $32.80 per
share.
The Tender Offer expired at 12:00 Midnight, New York City time on
February 20, 1998 (the "Expiration Date"). As more shares were tendered than the
amount sought to be purchased by the Company, the shares were purchased on a pro
rata basis. The proration factor for shares purchased was 44.80% of the shares
of Class A Common Stock tendered, 45.64% of the shares of Class B Common Stock
tendered and 46.66% of the SAILS Depositary Shares tendered. Following the
purchase, on a diluted basis, the Company has approximately 10.4 million shares
of Class A Common Stock outstanding and 15.3 million shares of Class B Common
Stock outstanding, including 1.4 million SAILS Depositary Shares.
On January 22, 1999, Fleet and certain of its affiliates ("Fleet")
filed a complaint against the Company and certain of its affiliates relating to
the Transaction with Fleet that closed on February 20, 1998. The complaint
centers on post-closing adjustments to the Transaction and other matters
relating to the Transaction with Fleet. The Company believes that the lawsuit
is inappropriate and without merit. On February 16, 1999, the Company filed an
answer to the complaint in which it denied all of the substantive allegations
in the complaint and the Company filed counterclaims against Fleet seeking
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damages. The Company does not expect this lawsuit to have any material adverse
impact on its business. However, because of the uncertainties of the legal
process and the significant legal and other expenses associated with litigation,
including the time and effort that will be spent by Company personnel involved
in defending the litigation, there can be no assurance that this lawsuit will
not have a material adverse impact on the Company's operations or financial
condition.
As of December 31, 1998, the Company had over $12 billion in managed
assets and an additional $8.3 billion in assets serviced for third parties.
This Pricing Supplement contains forward-looking statements that are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those projected. The most significant among these risks
and uncertainties are: (1) factors that affect consumer debt; (2) competitive
pressures; (3) the level of delinquencies, customer bankruptcies and
charge-offs; (4) interest rates; (5) the rate of prepayments; (6) the level of
expenses; (7) the Company's net interest margin; (8) volume of receivables
originated; (9) the timing of the securitizations of the Company's receivables;
(10) governmental regulation; (11) the amount and cost of financing available to
the Company; (12) the uncertainty of the legal process; and (13) the ratings on
the debt of the Company and its subsidiaries. Additional risks that may affect
the Company's future performance are detailed in the Company's filings with the
Securities and Exchange Commission, including its most recent Annual Report on
Form 10-K and its Quarterly Reports on Form 10-Q.
