From: ASAP
The Spiegel Group (Spiegel, Inc.) today announced that it has reached an agreement with MBIA Insurance Corporation (MBIA) regarding certain asset-backed securities issued by its credit-card bank subsidiary, First Consumers National Bank (FCNB). The company also announced that FCNB has entered into an agreement with the Office of the Comptroller of the Currency (OCC), the bank's primary federal regulator.
The company stated that the agreement with MBIA resolves the declaration of a "Pay Out Event" by MBIA regarding two asset-backed securities offerings involving credit-card receivables originated by FCNB. The company agreed to dismiss its litigation against MBIA and The Bank of New York, and MBIA agreed to withdraw its letter declaring the "Pay Out Event." The company said that the agreement strengthens the insured transactions.
FCNB's agreement with the OCC calls for FCNB to comply with certain requirements with respect to capital, liquidity, growth, product offering, and transactions with affiliates. The agreement, among other things, includes restrictions on extending credit to certain customers and requires the bank to obtain a $198 million guarantee, which has been provided through the company's majority shareholder. In addition, the bank must provide to the OCC the details of a plan to sell, merge or dispose the bank. The agreement (Consent Order) is available on the OCC Web site at occ.treas.gov.
Martin Zaepfel, vice chairman, president and chief executive officer of The Spiegel Group, stated, "The terms and conditions of the bank's agreement with the OCC are consistent with our internal objectives which are focused on improving the quality of our credit-card portfolios while continuing our efforts to sell our credit-card business. These efforts are ongoing and we are actively engaged in discussions with interested parties."
On February 21, 2002, the company announced plans to sell its credit-card operations in 2002, including FCNB. In addition, the company stated that it plans to form a relationship with a third party to continue to provide private-label credit-card programs to customers of its retail brands, allowing the brands to maintain an important connection with their customers.
This release contains statements that are forward-looking within the meaning of applicable federal securities laws and are based upon the Company's current expectations and assumptions. You should not place undue reliance on those statements because they speak only as of the date of this report. Forward-looking statements include information concerning the Company's possible or assumed future results of operations. These statements often include words such as "expect," "plan," "believe," "anticipate", "intend," "estimate," or similar expressions. As you read and consider this report, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results and results of operations and could cause actual results to differ materially from the forward-looking statements. These factors include, but are not limited to, the uncertainty relating to the timing of the disposal of the Company's FCNB business and the marketability and value thereof; increased oversight or restrictions by the OCC on the FCNB business which could reduce the market value of FCNB; the Company's ability to restructure its credit facilities; the availability of future liquidity support from our majority stockholder; reduction in cash available from the Company's securitization transactions; the financial strength and performance of the retail and direct marketing industry; changes in consumer spending patterns; dependence on the securitization of credit card receivables to fund operations; state and federal laws and regulations related to offering and extending credit; risks associated with collections on the Company's credit card portfolio; interest rate fluctuations; postal rate increases; paper or printing costs; the success of planned merchandising, advertising, marketing and promotional campaigns; and various other factors beyond the Company's control.
All future written and oral forward-looking statements made by the Company or persons acting on the Company's behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Except for the Company's ongoing obligations to disclose material information as required by the federal securities laws, we do not have any obligation or intention to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future or to reflect the occurrence of unanticipated events.
The Spiegel Group is a leading international specialty retailer marketing fashionable apparel and home furnishings to customers through catalogs, nearly 580 specialty retail and outlet stores and e-commerce sites, including eddiebauer.com, newport-news.com and spiegel.com. The Spiegel Group's businesses include Eddie Bauer, Newport News, Spiegel and First Consumers National Bank. The company's Class A Non-Voting Common Stock trades on the NASDAQ National Market System under the ticker symbol: SPGLA, now SPGLE. Investor relations information is available on The Spiegel Group Web site http://www.thespiegelgroup.com.
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