Westar Financial Services, a prime auto lease securitization originator and servicer with $625 million worth of bonds outstanding, is looking for an acquirer. "We are talking to a few people [about] selling our portfolio, our origination and servicing platform, or the company itself," says Bob Christensen, president and ceo. Westar's portfolio represents 25,000 accounts totalling $625 million. No pricing has been set for the acquisition, he says. Christensen says his firm's difficulties started last month, when Bank One terminated its obligation to make further loans to Westar under a credit facility because Westar failed to complete a term asset-backed transaction in the given timeframe. Asked whether he was going to sue Bank One, Christensen would only say that, "Westar has sought counsel and will take the steps necessary to protect the value of its assets and of the enterprise itself." Other factors have contributed to delay the securitization attempt, he says, such as the effect of Sept. 11 on the capital markets and insurance industry. Christensen says Bank One's decision resulted in the end of Westar's origination business because the company is deprived of its source of funding. Thomas Kelly, a Bank One spokesman, declined comment, citing client confidentiality.
Christensen says he will make important announcements in the next two weeks, but declined to elaborate. He says the sale of the portfolio to a third party, with Westar continuing to service the leases, is an option that might make sense. Commenting about Bank One's decision, he says: "We were extremely disappointed. The damage is irreversible and our job, here, is to continue to be the servicer." Westar has not hired any firm as an adviser for the acquisition. One reason for that is because "the company has been too busy since last month, getting its arms around the damage and maintaining servicing operation," he says. The second reason lies in the fact that, "the auto finance industry is small enough that almost all the players know each other already."