Capital One 2002 Annual Report Download - page 62

PeopleFirst, a subsidiary of COAF, currently maintains four agreements to
transfer pools of consumer loans accounted for as secured borrowings. The
agreements were entered into between 1999 and 2000 relating to the transfer
of pools of consumer loans totaling approximately $886.0 million. Principal
payments on the borrowings are based on principal collections, net of losses,
on the transferred consumer loans. The secured borrowings accrue interest at
fixed rates and mature between September 2003 and September 2007, or
earlier depending upon the repayment of the underlying consumer loans. At
December 31, 2002 and 2001, $243.0 million and $477.3 million of the
secured borrowings were 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 $100.0 million aggregate amount of
Floating Rate Junior Subordinated 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
Domestic Revolving Credit Facility
The Domestic Revolving Credit Facility (the “Credit Facility”) is available for
general corporate purposes of the Company. The Credit Facility is
comprised of two tranches: a $810.0 million Tranche A facility available to
the Bank and the Savings Bank, including an option for up to $250.0
million in multicurrency availability; and a $390.0 Tranche B facility
available to the Corporation, the Bank and the Savings Bank, including an
option for up to $150.0 million in multicurrency availability. 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. The Credit Facility has a total capacity of $1.2 billion all of
which was available at December 31, 2002. The Credit Facility expires in
May of 2003.
Multicurrency Facility
The Multicurrency Facility is intended to finance the Bank’s business in
Europe and was initially comprised of two Tranches, each in the amount of
Euro 300.0 million. The Tranche A facility terminated August of 2001. The
Tranche B facility terminates August 2004. The Corporation serves as
guarantor of all borrowings by Capital One Bank (Europe) plc under the
Multicurrency Facility. Internationally, the Company has funding programs
designed for foreign investors or to raise funds in foreign currencies allowing
the Company to borrow from the U.S. and non-U.S. lenders, including
foreign currency funding options under the Credit Facility discussed above.
The Company funds its foreign assets by directly or synthetically borrowing
or securitizing in the local currency to mitigate the financial statement effect
of currency translations. The Multicurrency Facility has a total capacity of
Euro 300.0 million ($315.0 million equivalent based on the exchange rate at
closing) all of which was available at December 31, 2002.
the Upper Decs®by substituting, as pledged securities, specifically identified
treasury securities that will pay $50 on the relevant stock purchase date,
which is the amount due on that date under each forward purchase contract.
In February 2005, the senior notes will be remarketed, and the interest rate
will be reset based on interest rates in effect at the time of remarketing. The
holders will use the proceeds of the remarketing to fund their obligations to
purchase shares of the Company’s common stock under the forward purchase
contract, with such number of shares to be determined based upon the
average closing price per share of the Company’s common stock for 20
consecutive trading days ending on the third trading day immediately
preceding the stock purchase date at a minimum per share price of $63.91
and a maximum per share price of $78.61.
Corporation Shelf Registration Statements
As of December 31, 2002, the Corporation had two effective shelf
registration statements under which the Corporation from time to time may
offer and sell senior or subordinated debt securities, preferred stock, common
stock, common equity units and stock purchase contracts. The Corporation
Shelf Registration statements had a total capacity of $2.2 billion all of which
was available at December 31, 2002. There was $587.2 million available at
December 31, 2001.
On November 11, 2002, the Corporation issued shares of its common stock
having an aggregate value of $54.9 million to certain former shareholders of
AmeriFee Corporation (“AmeriFee”) in connection with the termination of
the stock purchase agreement relating to the Corporation’s acquisition of
AmeriFee. Of this amount, $43.9 million of the Corporation’s common
stock was issued through its shelf registration statement and $11.0 million
was issued in an unregistered offering.
In January 2002, the Company issued $300.0 million of five-year senior
notes with a coupon rate of 8.75%.
During 2001, the Corporation issued 6,750,390 shares of common stock in
a public offering under the shelf registration statement that resulted in
proceeds of $412.8 million.
OTHER BORROWINGS
Secured Borrowings
COAF, a subsidiary of the Company, currently maintains seven agreements
to transfer pools of consumer loans accounted for as secured borrowings.
The agreements were entered into between 1999 and 2002, relating to the
transfers of pools of consumer loans totaling $6.2 billion. Principal payments
on the borrowings are based on principal collections, net of losses, on the
transferred consumer loans. The secured borrowings accrue interest
predominantly at fixed rates and mature between June 2006 and September
2008, or earlier depending upon the repayment of the underlying consumer
loans. At December 31, 2002 and 2001, $4.6 billion and $2.5 billion,
respectively, of the secured borrowings were outstanding.
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