Ugly Duckling Corporation, which bills itself as the largest used-car sales company focused exclusively on the non-prime market, has announced it has completed its 18th securitization.

The securitization was among the company's largest, with loan principal balances being securitized totaling approximately $145 million and with Class A bonds being issued in the amount of $102.6 million. The coupon on the Class A bond is 6.76 percent, a 50 basis point reduction from the rate paid by the company for its last securitization, which closed in August of this year.

As is the company's practice, the securitization was insured by a bond insurance company and carries an investment rating of "AAA." The company received a Class A bond advance rate of 71 percent of the pledged principal balances, generally consistent with prior transactions. The credit enhancements for this transaction were increased. The company increased its initial deposit into a reserve account from 4 percent to 6 percent, and reserve account maximums were raised from the traditional 8 percent to 11 percent. A termination event was added to this transaction that requires the company to replace its warehouse lender by April 1, 2001.

The company's primary warehouse lender under its existing $125 million facility recently informed Ugly Duckling that as part of a global decision to exit the automobile finance market, it intends not to renew the existing warehouse line that terminates June 30, 2001.

"The company believes that with its strong balance sheet, its five-year history of successful securitization transactions, and its proven business model, the company will be able to replace its warehouse facility," according to a statement issued by Ugly Duckling. "To that end, the company has received a non-binding proposal for alternative financing and intends to pursue other alternative financing sources."

About Ugly Duckling

Headquartered in Phoenix, Ariz., Ugly Duckling Corporation is one of the largest operators of used-car dealerships focused exclusively on the non-prime market.

The company underwrites, finances and services non-prime contracts generated at its 77 Ugly Duckling dealerships, located in 11 metropolitan areas in eight states.