Aames extends exchange for convertibles

New York, June 21 - Aames Financial Corp. again extended its exchange offer to refinance its outstanding 5.5% convertible subordinated debentures due 2006.

The offer will now expire at 5.00 p.m. on Aug. 2, pushed back from 5.00 p.m. ET on July 19. It had originally been set to expire at 5.00 p.m. on June 13.

Aames said so far it has received tenders from holders of $42.8 million of the existing convertibles, the same as at the last announcement on July 2. The figure is 37.6% of the amount outstanding.

Aames noted that as previously announced the trustee for the company's 9.125% senior notes due 2003 Wilmington Trust Company has brought an action seeking to prevent Aames from completing the exchange. On July 1, the Supreme Court of the State of New York denied the trustee's request for an order preliminarily enjoining the Company from proceeding with the Exchange Offer. On July 12, Aames said it filed a motion to dismiss the complaint.

The Los Angeles consumer finance company is offering holders $800 principal amount of new 4% convertible subordinated debentures due 2012 for each $1,000 principal amount of the existing securities. The new securities will be convertible at any time on the same terms as the old ones.

The new debentures will have a sinking fund, requiring Ames to redeem 30% of the outstanding principal amount on Dec. 15, 2002.

There will also be a change-of-control clause giving the company the option to redeem the convertibles. They will also be redeemable if Ames' 9.125% senior notes due 2003 are repaid in full or if the note indenture is modified to permit redemption.

Redemptions will be at 33.5% of the principal amount if ahead of the Dec. 15, 2002 sinking fund payment or 5% of their principal amount after that time.

Ames said the offer applies to all its existing $113.9 million of 5.5% convertibles. If all are tenders, it will issue $91.12 million of the new convertibles.

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