LoanTrade Inc.

 


$61 Million

Charged-Off Visa/MasterCards

OPTIONAL PURCHASE CONTRACTS (“OPC”)

NATIONWIDE

 

LoanTrade Inc. is pleased to exclusively present our client’s offer to sell the above referenced portfolios of fresh charged-off Visa/MasterCard accounts that have never been placed for third party collection.  In a new and innovative market concept, charged-off credit card buyers can now enter into purchase agreements with First USA that grant the buyer the right, but not the obligation, to buy future portfolios Chevy Chase brand fresh charge-offs.  Offered exclusively through LoanTrade Inc. of Boca Raton, Florida -- who created the concept -- First USA’s Optional Purchase Contracts (OPCs) enable buyers to optionally contract to purchase individual monthly charge-off pools. 

 

What are OPCs?

First USA (FUSA) OPCs give the Buyer the right, not the obligation, to buy a portfolio Chevy Chase brand charge-offs for a fixed price and at a specified date in the future.  The purchase price of the portfolio is established via a bid process managed exclusively by LoanTrade Inc.  After payment of a Commitment Fee, purchase of the portfolio is optional for the Buyer (but mandatory for the Seller), up until the Notification Date. 

 

 

On or before the Notification Date (typically 60 days prior to the scheduled Closing Date) the Buyer must notify FUSA of its intention to purchase the portfolio.  If the Buyer notifies FUSA, purchase of the portfolio becomes mandatory for the Buyer.  Failure to perform by either party after Buyer has given notification will result in obligation to pay a predetermined Non-Compliance Fee by the non-performing party.

 

Portfolios Available For Bid By Month of Delivery (millions):
 

 

 

Jul-00

Aug-00

Sep-00

Oct-00

Nov-00

Dec-00

Total

Chevy Chase

$11.3

$17.8

$11.3

$7.6

$6.7

$6.3

$61.2

 

THIS IS A COMPETITIVE SEALED BID OFFERING

 

PRE-BID DUE DILIGENCE:         March 20 to April 13, 2000

 

BID DATE:                       APRIL 14, 2000

 

Pools will not be sub-divided, however, potential purchasers interested in smaller segments of the portfolio should contact LoanTrade Inc. with their specific requirements and price indications.  LoanTrade maintains a listing of FUSA prior approved buyers and their geographic preferences.  This listing is available to OPC buyers seeking to arrange the re-sale of accounts prior to taking delivery from FUSA.  FUSA and LoanTrade assume no liability for the performance of any buyers on this listing. 

OPCs offer these unique advantages to Buyers:   

   Purchase is optional. 

   Portfolio price is locked-in well in advance of actual purchase date.

   Liquidation performance of a single pool may be tested before committing to larger mandatory purchases.

   Lowest cost and least restrictive financing terms may be negotiated:  

   Plenty of time to shop for the best lender financing

   Lenders will recognize FUSA’s strength as a Seller

   OPCs are specific and may be desirable as Lender collateral

   Staffing can be planned and managed months before taking delivery.

   Buyer may pre-arrange sale of all or portions to other Buyers well in advance of delivery date -- or pre-dispose of inventory segments that do not match its existing business plan -- and potentially earn locked-in profits prior to acquisition.

   First USA OPCs are assignable, with FUSA prior approval, should a Buyer find it necessary or desirable to exit its position prior to closing.

 

More about OPCs:  

OPC pools contain debtor accounts with last known addresses in all 50 states.  FUSA recognizes that some buyers may want to re-sell portions of OPC pools in order to reduce this geographic distribution, or to recapture all or a portion of the purchase price paid to FUSA.  FUSA OPCs permit the re-sale of accounts if (a) the new buyer is prior approved by FUSA, (b) the original buyer remains liable to FUSA for OPC representations and warranties, and (c) all post closing correspondence with subsequent buyers is handled by the original buyer.

 

First USA has partnered with LoanTrade Inc. in the design and implementation of this new and exciting program.  First USA will continue to manage its cash and forward flow delivery sales.  LoanTrade will manage the sales of all FUSA Optional Purchase Contracts throughout 2000. 

 

Pre-Bid Due Diligence Information:  Program information is available to qualified investors.   Potential bidders should sign and return the attached Confidentiality Agreement.

LoanTrade Inc.

Attn:         Tim Kirkpatrick             Email: tim@loantrade.com

Phone:    (561) 417-5002              
Fax:          (561) 417-5662

370 W. Camino Gardens Blvd., Suite 300

Boca Raton, FL  33432

 

IMPORTANT DISCLAIMER

The terms, conditions, and information presented by LOANTRADE in connection with this transaction were provided to LOANTRADE by sources we consider to be reliable, however, LOANTRADE makes no representation as to the accuracy of this information.  LOANTRADE cannot guarantee the performance of the Seller.  Seller may reject any and all bids.  Seller may reduce portfolio up to the date of Seller's acceptance of Buyer's offer to purchase.