Capital One 1999 Annual Report Download - page 55

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In October 1999, the Bank entered into a £750,000 revolv-
ing credit facility collateralized by a security interest in certain
consumer loans of the Company. Interest on the facility is based
on commercial paper rates or London InterBank Offering Rates
(“LIBOR”). The facility matures in 2000. At December 31, 1999,
£500,000 ($809,100 equivalent) was outstanding under the
facility.
In May 1999, Summit Acceptance Corporation, a subsidiary
of the Company, entered into an agreement to transfer a pool of
consumer loans totaling $350,000. Proceeds from the transfer
were recorded as a secured borrowing. Principal payments on
the borrowing are based on principal collections net of losses
on the transferred consumer loans. The borrowing accrues
interest based on commercial paper rates and matures on June
15, 2006 or earlier depending upon the repayment of the under-
lying consumer loans. At December 31, 1999, $290,065 of the
secured borrowing was outstanding.
Junior Subordinated Capital Income Securities
In January 1997, Capital One Capital I, a subsidiary of the Bank
created as a Delaware statutory business trust, issued
$100,000 aggregate amount of Floating Rate Junior Subordi-
nated Capital Income Securities that mature on February 1,
2027. The securities represent a preferred beneficial interest in
the assets of the trust.
Other Short-Term Borrowings
In May 1999, the Company entered into a four-year, $1,200,000
unsecured revolving credit arrangement (the “Credit Facility”).
The Credit Facility is comprised of two tranches: a $810,000
Tranche A facility available to the Bank and the Savings Bank,
including an option for up to $250,000 in multicurrency avail-
ability, and a $390,000 Tranche B facility available to the
Corporation, the Bank and the Savings Bank, including an option
for up to $150,000 in multicurrency availability. Each tranche
under the facility is structured as a four-year commitment and
is available for general corporate purposes. All borrowings under
the Credit Facility are based on varying terms of LIBOR. The
Bank has irrevocably undertaken to honor any demand by the
lenders to repay any borrowings which are due and payable by
the Savings Bank but have not been paid. Any borrowings under
the Credit Facility will mature on May 24, 2003; however,
the final maturity of each tranche may be extended for three
additional one-year periods with the lenders’ consent. As of
December 31, 1999 and 1998, the Company had no outstand-
ings under the Credit Facility or its predecessor facility.
In August 1997, the Company entered into a three-year,
$350,000 equivalent unsecured revolving credit arrangement
(the “UK/Canada Facility”), which is being used to finance the
Company’s expansion in the United Kingdom and Canada. The
UK/Canada Facility is comprised of two tranches: a Tranche A
facility in the amount of £156,458 ($249,800 equivalent based
on the exchange rate at closing) and a Tranche B facility in the
amount of C$139,609 ($100,200 equivalent based on the
exchange rate at closing). An amount of £34,574 or C$76,910
($55,200 equivalent based on the exchange rates at closing)
may be transferred between the Tranche A facility and the
Tranche B facility, respectively, upon the request of the Company.
In the second quarter of 1998, the Company requested the
transfer of the £34,574 from the Tranche A facility to the
Tranche B facility. Each tranche under the facility is structured
as a three-year commitment. All borrowings under the UK/
Canada Facility are based on varying terms of LIBOR. The Cor-
poration serves as the guarantor of all borrowings under the
UK/Canada Facility. There were no outstandings under the UK/
Canada Facility as of December 31, 1999. As of December 31,
1998, the Company had a total of $166,345 outstanding under
the UK/Canada Facility ($66,400 under Tranche A and $99,945
under Tranche B).
Bank Notes
Under the Company’s bank note program, the Bank from time
to time may issue senior bank notes at fixed or variable rates
tied to LIBOR with maturities from 30 days to 30 years. The
aggregate principal amount available for issuance under the
program is $8,000,000 (of which, up to $200,000 may be sub-
ordinated bank notes). There were no subordinated bank notes
issued or outstanding as of December 31, 1999 and 1998.
The Bank has established a program for the issuance of
debt instruments to be offered outside of the United States.
Under this program, the Bank from time to time may issue
instruments in the aggregate principal amount of $1,000,000
equivalent outstanding at any one time ($5,000 outstanding as
of December 31, 1999 and 1998). Instruments under this pro-
gram may be denominated in any currency or currencies.
The Corporation has three shelf registration statements
under which the Corporation from time to time may offer and
sell (i) senior or subordinated debt securities, consisting of
debentures, notes and/or other unsecured evidences, (ii) pre-
ferred stock, which may be issued in the form of depository
shares evidenced by depository receipts and (iii) common stock.