CFS Deal

Troubled Commercial Financial Services of Tulsa confirmed Thursday that its proposed sale to Atlanta-based Worldwide Asset Management has been delayed. Yesterday, Worldwide substantially lowered its price and other terms following its three week due diligence phase. Worldwide made its proposal May 27 to purchase certain assets of CFS and enter into new servicing agreements for the trust accounts that CFS services. CFS, under bankruptcy protection, said yesterday the unsecured creditors committee and the asset-backed security holders are in the process of reviewing Worldwide’s new proposal and the company has asked the Court to delay the hearing on the sale procedure motion until June 29.

Credit Store

The Credit Store, Inc. announced that it completed its third securitization of performing credit card receivables. The transaction involved the sale of approximately $6.2 million in seasoned credit card receivables to a wholly-owned qualified special-purpose corporation, TSC Funding III, Inc., that was established for this transaction. The receivables were fully current and had been seasoned in excess of eight months.

This transaction was funded, in part, by a $4.0 million term loan from Miller & Schroeder Investments Corporation of Minneapolis, MN. The excess of the purchase price for the receivables over the cash proceeds will be retained by The Credit Store as a capital contribution to TCS Funding III. The Credit Store will continue to service the credit-card receivables sold to TSC Funding III on a fee basis. The Credit Store completed similar securitizations in Sept. and Dec. 1998, for approximately $6.5 million and $7.8 million in credit card receivables respectively.

Martin J. Burke III, chairman and chief executive officer commented: “We are pleased with this, our third transaction, which demonstrates a growing market for our performing credit card assets. Our first two securitized transactions continue to perform well within modeling parameters. We believe we are demonstrating the continued saliency of our business plan and are well on our way defining a new niche in the consumer credit marketplace.” The Credit Store, Inc. is a nationwide financial services company engaged in the acquisition and collection of non-performing consumer receivables and the origination and servicing of credit cards. The Company acquires portfolios of non-performing consumer debt at substantial discounts, and then uses its direct marketing expertise to contact and negotiate settlements with consumers, most of the time placing settlement on new unsecured credit cards offered through The Credit Store.

April Spurt

Revolving credit grew at an annual rate of 6.8% during April compared to 5.4% last April according to preliminary figures released this week by the Federal Reserve. However overall consumer credit slipped from 4.3% for April 1998 to 3.4% for April 1999. Revolving credit, mostly credit card debt, increased more than $3 billion during April. Since the first of this year revolving credit has grown about $10 billion, according to the FRB. At the end of April, American consumers were $1.335 trillion in debt, exclusive of home mortgages.

Apr99 Mar99 Feb99 Jan99 Dec98 Nov98 Oct98 Sep98 Aug98 Jul98
%GRWTH: 6.8% -1.0 3.4 11.6 8.6 -2.4 13.0 7.5 10.7 -4.2
$OWED: $ 570.3 567.1 567.5 565.9 560.5 556.5 557.6 551.7 548.3 543.4

Source: Federal Reserve; revised figures as of
06/07/99; For complete historical data visit

The Credit Store Board Member

Geoffrey A. Thompson has joined the Board of Directors of The Credit Store, Inc. Mr. Thompson is the retired former president and chief executive officer of Marine Midland Banks, Inc., Buffalo, NY, now HSBC Bank USA. With Mr. Thompson, The Credit Store’s Board membership now stands at five, including three outside directors. Thompson, 58, serves currently on the boards of several other private and public corporations and non-profit organizations, including the Near East Foundation, where he is chairman and chief executive officer. In addition to Marine Midland, previous positions include being a principal at the investment firm Kohlberg & Company, the head of the consumer credit subsidiary of General Electric Credit, and president at two executive search firms. He is a former director of the Bank Holding Company Association and the former vice-chairman of the National Second Mortgage Association and the New York Business Council. Thompson also has served on the Board of Directors at HSBC Holdings plc, London, the world’s most profitable bank. Thompson began his banking career at Citibank.

“We are gratified that Jeff Thompson will bring his significant credentials and skill to The Credit Store Board of Directors,” Martin J. Burke, chairman and chief executive officer of The Credit Store said. “In just under three short years, The Credit Store has defined a new and profitable niche in the consumer credit marketplace. Jeff Thompson, through his wide knowledge and experience, will bring exceptional insight and direction to The Credit Store over the years ahead.”

The Credit Store, Inc. is a nationwide financial service company engaged in the acquisition and collection of non-performing consumer receivables and the origination of and servicing of credit cards. The Company acquires portfolios of non-performing consumer debt at substantial discounts, and then uses its direct marketing expertise to contact and negotiate settlement with consumers, most of the time placing settlement on new unsecured credit cards offered through The Credit Store.

Orchard & First Union Subprime

Orchard Federal Savings Bank announced Tuesday its partnership with First Union Corporation and the acquisition of First Union’s existing secured card account portfolio. Under the new terms, Orchard Bank and its sister company, Renaissance Bankcard Services, will issue, service and closely manage First Union branded subprime accounts. The original partnership was formed in 1995 which enabled First Union to offer secured MasterCards with Renaissance servicing and managing the portfolio. First Union had marketed the secured card product through its branches and issued the credit cards. Under this new agreement, First Union Direct Bank will function as an agent of Orchard Bank.

S&P Rates Euronet Services

Standard & Poor’s Friday revised its outlook on Euronet Services Inc. to negative from stable. At the same time, Standard & Poor’s affirmed its single-‘B’-minus long-term corporate credit and senior unsecured ratings on Euronet.

The outlook revision reflects Euronet’s slower-than-anticipated revenue growth in the second half of 1998 and the first quarter of 1999, mainly because of slower-than-expected growth of credit and debit card usage in some of the company’s main Central European markets. This has lead to a delayed improvement of operating margins and cash flow generation compared with the initial business plan. For Euronet to maintain its current ratings, it is therefore necessary that the company’s profitability and operating cash flow improve considerably during 1999.

The ratings on Euronet reflect the challenges the company faces to grow the size of its operations sufficiently to service its debt obligations. With a network of close to 1,600 automatic teller machines (ATMs) at April 30, 1999 — mainly in Germany, Hungary, and Poland — the company is the leading independent provider of ATM services in Central Europe. While these markets offer great growth potential for ATM services, the growth rate is closely linked to the general issuance of new debit and credit cards, the level of which is hard to predict. Furthermore, Euronet faces competition from networks set up by consortiums of banks with larger scales and resources. It must also negotiate favorable deals with banks and card-issuance organizations in order to attract customers to its ATMs. Euronet’s competitive advantages are its early market entrance — which has given it access to prime site locations — and its modern network and focused operations, which make it possible to offer a full range of ATM services at low cost. Furthermore, the company’s geographic diversity limits its dependence on one specific market, and makes it possible to direct investments toward the most profitable locations. Euronet’s service offerings were broadened following the $18 million acquisition of the U.S. computer software company Arksys in December 1998, and the company is now able to offer vertically integrated products to customers. While the acquisition had a negative effect on Euronet’s liquidity position in the short term, the company still expects to have sufficient cash to fund its initial ATM roll-out plan. In 1998, Euronet had $12 million revenues and a negative $23 million operating cash flow after working capital needs, while Arksys had $12 million revenues and a slight negative operating cash flow. At March 31, 1999, Euronet’s total debt to capital was 88%. Because the company is constantly installing new ATMs, and it takes a certain time for new machines to become profitable, Euronet also expects to have negative operating cash flow and operating losses during 1999. During the first quarter of 1999, revenues were up to $8 million ($5 million excluding Arksys) compared with $2 million in 1998, while cash and short-term liquid assets amounted to $38 million at March 31, 1999, down from $59 million at year-end 1998.

March Slump

One year ago American consumers added $4.1 billion to revolving credit during the month of March. This year, the trend has completely reversed as American consumers paid down $800 million of revolving credit during March. According to preliminary figures released Friday afternoon by the Federal Reserve, revolving credit, mostly credit card debt, dropped at an annual rate of 1.6% during March, compared to a 5.1% gain in February. Since the first of this year revolving credit has grown $7.8 billion. Overall consumer credit is growing 1.4% annually, compared to 6.6% one year ago, according to the FRB. At the end of March, American consumers were $1.325 trillion in debt, exclusive of home mortgages.


Mar99 Feb99 Jan99 Dec98 Nov98 Oct98 Sep98 Aug98 Jul98 Jun98
%GRWTH: -1.6% 5.1 13.2 8.6 -2.4 13.0 7.5 10.7 -4.2 9.2
$OWED: $ 568.3 569.1 566.7 560.5 556.5 557.6 551.7 548.3 543.4 545.3

Source: Federal Reserve; revised figures as of
05/07/99; For complete historical data visit

Tornado Relief

VISA U.S.A. announced this morning it will make a $250,000 donation to be divided between the American Red Cross and the San Francisco Bay Area Chapter to support tornado relief efforts in the Midwest and Red Cross services in the Bay Area. Atlanta-based Cox Communications also announced this morning it is donating 5,000 pre-paid 30-minute telephone calling cards to victims of Monday’s tornadoes in Oklahoma City via the Red Cross. The insurance industry said this morning that insurance costs could easily exceed $500 million as more than 2,000 homes were destroyed and 8,000 damaged when the tornadoes swept across the Midwest states this week. The median sale price of homes in the Oklahoma City area, where the losses were concentrated, is $77,000. Meanwhile a number of other firms have joined the relief efforts. Yesterday afternoon announced it is making 1,000 hotel room nights, mostly through Marriott, available free of charge to relief effort volunteers. Bank One Oklahoma also announced two disaster loan programs on Thursday, designed to quickly provide individuals and small business with new loan funds for disaster-related expenses. Fannie Mae’s says its disaster relief provisions give lenders the discretion to help borrowers in several ways, including suspending mortgage payments for up to three months, reducing the payments for up to 18 months, or in more special cases, creating longer loan payback plans. Phillips Petroleum contributed $100,000 to a special relief fund established by the American Red Cross for the tornado victims. Miller Brewing Company interrupted production yesterday to bottle 1,000 cases of drinking water. And SCI Oklahoma Funeral Services is donating funeral arrangements including casket and burial services for victims of the tornados.

Aspire Stats

Atlanta-based sub-prime credit card specialist CompuCredit Corp. reported Thursday it added over 90,000 new ‘Aspire’ credit card accounts so far this year. The company says it generated over 40,000 new accounts during the first three weeks of April, from a March marketing program. During the first quarter CompuCredit spent $3.4 million in marketing and added 39,000 accounts. The issuer now has 382,000 accounts compared to 343,000 accounts at yearend 1998. For the first quarter ’99 managed loan balances increased to $487.7 million compared to $44.1 million for 1Q/98. As with a typical sub-prime portfolio, delinquency and chargeoffs remain extraordinary high. CompuCredit’s net chargeoff rate for 1Q/99 was 16.4% compared to 9.8% for 1Q/98. Delinquency (60+ days) climbed to 8.2% from 3.8% last year. CompuCredit completed its IPO, raising net proceeds of approximately $54.8 million, and began trading on Nasdaq under the symbol “CCRT” last Thursday.

For more financial details on CompuCredit visit CardData ([][1]).


Metris New Headquarters

Metris Companies Inc. announced Friday that the company’s growth and infrastructure development have led to the need for a new corporate headquarters. As a result, the company has signed a lease with Opus Northwest, L.L.C., to anchor the second phase of the Crescent Ridge Corporate Center in Minneapolis, Minn.

“As the nation’s fastest-growing direct marketing company, we have experienced rapid growth in both our fee-based and consumer credit businesses,” said Ronald N. Zebeck, president and chief executive officer. “An expanded corporate headquarters will provide the space necessary to add additional management, finance, IT and operations staff to serve our current customers and continue our growth.”

The Crescent Ridge Corporate Center is located at I-394 and Hopkins Crossroads. Initially, Metris will utilize four floors of the second building, which they expect to occupy in September 2000.

“In our search for a new corporate headquarters location, we evaluated several sites in the western suburbs and chose this one because of its proximity to our current headquarters and the flexibility Opus can provide,” explained Zebeck.

Earlier this year, Metris announced it will open a new operations center in Jacksonville, Fla., to house an additional 800 collections, customer services, teleservices and management employees; this new facility is expected to open in June.

“As we move forward, we will continue our expansion efforts across the nation and will be opportunistic about the growth opportunities available within the direct marketing and credit card industries,” concluded Zebeck.

Metris Companies Inc. is an information-based direct marketer of consumer credit products and fee-based services primarily to moderate income consumers. Based in St. Louis Park, Minnesota, Metris also has operations in Tulsa, Oklahoma; Baltimore, Maryland; Champaign, Illinois; Phoenix, Arizona, and Jacksonville, Florida and currently employs over 2,000 people. Visit Metris on the Internet at [][1].

This press release contains forward-looking statements. These statements include statements regarding intent, belief or current expectations of the company and its management. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that may cause the company’s actual results to differ materially from the results discussed in the forward-looking statements. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: the company’s limited operating history as a stand-alone entity; the company’s limited experience with respect to originating and servicing credit card accounts, including limited delinquency, default and loss experience, the lack of seasoning of its credit card portfolio, which makes the predictability of delinquency and loss levels more difficult; risks associated with unsecured credit transactions, particularly to moderate income consumers; risks associated with acquired portfolios; interest rate risks; dependence on the securitization of the company’s credit card loans or the capital markets to fund operations; general economic conditions affecting consumer income, which may increase consumer bankruptcies, defaults and delinquencies; state and federal laws and regulations, including consumer and debtor protection laws; and the highly competitive industry in which the company operates. Each of these factors is more fully discussed in Exhibit 99 to the company’s Annual Report on Form 10-K, for the fiscal year ended December 31, 1997. Reference to this Cautionary Statement or Exhibit 99 in the context of a forward-looking statement or statements shall be deemed to be a statement that any one or more of these factors may cause actual results to differ materially from those anticipated in such forward-looking statement or statements.


February Pause

After piling on $5 billion in additional revolving debt in January, American consumers cooled their jets a bit in February, adding a modest $2.3 billion to revolving credit. According to preliminary figures released Wednesday afternoon by the Federal Reserve, revolving credit, mostly credit card debt, grew at an annual rate of 4.8% during February, compared to 13.2% in January. For February 1998 revolving credit card debt grew at annual rate of 5.1% and stood at $535.3 billion. Overall consumer credit is growing 7.9% annually, compared to 4.9% one year ago, according to the FRB. At the end of February, American consumers were $1.323 trillion in debt, exclusive of home mortgages.

Feb99 Jan99 Dec98 Nov98 Oct98 Sep98 Aug98 Jul98 Jun98 May98
%GRWTH: 4.8% 13.2 8.6 -2.4 13.0 7.5 10.7 -4.2 9.2 -1.4

$OWED: $569.0 566.7 560.5 556.5 557.6 551.7 548.3 543.4 545.3 541.2

Source: Federal Reserve; revised figures as of 04/07/99; For complete historical data visit [][1].

Consumer credit grew at about an 8 percent annual rate in February, down from about 14 percent in January. Growth in all major
categories slowed in February, though the rise in auto loans remained quite rapid.

Seasonally adjusted
1998 1999
:::::::::::::::::__ :::

Feb. Mar. Apr. May June July r Aug. r Sept. r Oct. r Nov. r Dec. r Jan. r Feb. p
Percent change at annual rate 2
Total 4.9 6.6 4.3 2.3 9.0 5.4 6.6 6.9 10.6 1.6 2.4 14.1 7.9
Automobile 4.2 8.8 4.1 4.0 8.2 8.0 12.1 8.1 6.1 12.6 12.4 19.0 13.7
Revolving 5.1 9.1 5.4 -1.4 9.2 -4.2 10.7 7.5 13.0 -2.4 8.6 13.2 4.8
Other 3 5.5 -1.2 2.3 6.9 9.6 19.6 -8.9 4.2 12.7 -7.2 -24.1 8.2 5.1

Amount: billions of dollars
Total 1,240.5 1,247.3 1,251.8 1,254.2 1,263.5 1,269.2 1,276.2 1,283.6 1,294.9 1,296.6 1,299.2 1,314.5 1,323.2
Automobile 416.7 419.8 421.2 422.6 425.5 428.3 432.7 435.6 437.8 442.4 447.0 454.1 459.3
Revolving 535.3 539.4 541.8 541.2 545.3 543.4 548.3 551.7 557.6 556.5 560.5 566.7 569.0
Other 3 288.4 288.2 288.7 290.4 292.7 297.5 295.3 296.3 299.5 297.7 291.7 293.7 294.9

Percent except as noted: not seasonally adjusted
Institution, terms, and type of loan
Commercial banks
Interest rates
48-mo. new car 8.87 n.a. n.a. 8.69 n.a. n.a. 8.71 n.a. n.a. 8.62 n.a. n.a. 8.34
24-mo. personal 14.01 n.a. n.a. 13.76 n.a. n.a. 13.45 n.a. n.a. 13.75 n.a. n.a. 13.41
Credit card plan
All accounts 15.65 n.a. n.a. 15.67 n.a. n.a. 15.83 n.a. n.a. 15.69 n.a. n.a. 15.41
Accounts assessed interest 15.33 n.a. n.a. 15.62 n.a. n.a. 15.85 n.a. n.a. 15.54 n.a. n.a. 14.73

New car loans at auto finance companies
Interest rates 6.98 6.47 6.20 6.07 6.02 6.23 6.00 5.92 6.33 6.79 6.43 6.22 6.43
Maturity (months) 52.6 51.5 50.7 50.8 50.9 51.7 53.0 53.1 53.1 52.8 52.2 52.1 53.4
Loan-to-value ratio 92 92 91 93 91 92 93 93 92 91 91 92 92
Amount financed (dollars) 18,825 18,932 18,922 18,793 18,878 19,084 19,068 19,028 19,199 19,590 19,734 19,628 19,304
This release is issued around the fifth business day of each month. The exact date and time may be obtained by calling (202) 452 – 3206.
Footnotes appear on reverse.

(Billions of dollars)
Not seasonally adjusted

1998 1999
:::::::::::::::::__ :::

Feb. Mar. Apr. May June July r Aug. r Sept. r Oct. r Nov. r Dec. r Jan. r Feb. p

Total 1,234.2 1,236.0 1,241.1 1,243.1 1,256.8 1,262.4 1,276.4 1,286.6 1,297.6 1,304.5 1,331.7 1,323.3 1,316.3

Major holders
Commercial banks 492.5 492.1 500.1 497.3 491.4 491.4 498.2 497.9 502.1 498.8 508.9 507.3 497.7
Finance companies 155.7 156.5 154.3 153.6 154.3 156.1 159.6 159.1 165.6 166.6 168.5 167.3 169.7
Credit unions 150.8 150.7 151.1 152.2 152.4 153.5 153.6 154.3 155.0 155.2 155.4 155.7 155.1
Savings institutions 47.1 47.1 47.5 47.9 48.3 49.0 49.6 50.3 51.0 51.6 51.6 52.0 52.5
Nonfinancial business 72.8 72.7 65.1 65.2 65.3 65.5 66.0 65.5 66.0 66.6 74.9 71.0 67.9
Pools of securitized assets 5 315.3 316.8 323.1 326.9 345.1 346.9 349.4 359.4 358.0 365.6 372.4 370.0 373.4

Major types of credit 6
Automobile 412.1 415.5 416.0 418.2 425.2 429.9 435.4 439.6 443.1 446.6 451.0 452.2 454.1
Commercial banks 152.7 153.9 151.3 151.7 150.9 153.2 155.5 156.3 156.8 157.1 158.1 160.3 159.9
Finance companies 84.7 86.8 90.6 89.6 89.9 91.7 95.3 96.2 97.6 99.0 103.1 102.8 105.0
Pools of securitized assets 5 66.0 65.1 63.7 66.0 71.6 72.5 70.8 72.1 71.8 72.6 73.0 73.2 73.2

Revolving 535.3 534.1 535.6 535.6 539.6 537.2 545.1 549.0 556.0 559.2 586.5 575.7 569.0
Commercial banks 204.6 201.3 209.2 207.3 200.9 197.6 200.4 197.6 200.9 196.9 210.3 204.8 197.6
Finance companies 36.9 36.6 30.4 30.5 29.9 29.4 29.6 28.4 33.3 33.1 32.3 32.4 32.2
Nonfinancial business 41.0 41.2 33.5 33.4 33.5 33.8 34.0 33.7 33.8 33.8 39.2 36.4 34.3
Pools of securitized assets 5 223.4 226.2 233.7 235.3 245.6 246.6 251.2 259.3 258.1 265.3 272.3 269.9 272.6

Other 286.8 286.4 289.6 289.2 292.0 295.2 296.0 298.0 298.5 298.7 294.2 295.4 293.2
Commercial banks 135.2 136.9 139.7 138.3 139.6 140.6 142.2 144.0 144.4 144.8 140.5 142.2 140.2
Finance companies 34.1 33.0 33.4 33.5 34.4 35.0 34.7 34.6 34.6 34.6 33.1 32.1 32.5
Nonfinancial business 31.8 31.5 31.6 31.8 31.7 31.7 32.0 31.8 32.2 32.9 35.7 34.6 33.6
Pools of securitized assets 5 26.0 25.6 25.6 25.5 27.9 27.8 27.5 27.9 28.1 27.7 27.1 26.8 27.7

1. Covers most short- and intermediate-term credit extended to individuals, excluding loans secured by real estate.
2. Percent changes calculated from unrounded data.
3. Comprises mobile home loans and all other loans not included in automobile or revolving credit, such as loans for education, boats,
trailers, or vacations. These loans may be secured or unsecured.
4. Interest rates are annual percentage rates (APR) as specified by the Federal Reserve’s Regulation Z. Interest rates for new-car loans
and personal loans at commercial banks are simple unweighted averages of each bank’s most common rate charged during the first calendar
week of the middle month of each quarter. For credit card accounts, the rate for all accounts is the stated APR averaged across all
credit card accounts at all reporting banks. The rate for accounts assessed interest is the annualized ratio of total finance charges at
all reporting banks to the total average daily balances against which the finance charges were assessed (excludes accounts for which no
finance charges were assessed). Finance company data are from the subsidiaries of the three major U.S. automobile manufacturers and are
volume-weighted averages covering all loans of each type purchased during the month.
5. Outstanding balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of
the loan originators.
6. Includes estimates for holders that do not separately report consumer credit holding by type.
r=revised. p=preliminary.