Aames starts exchange offer for 5.5% convertibles due 2006

New York, April 30 - Aames Financial Corp. announced an exchange offer to refinance its outstanding 5.5% convertible subordinated debentures due 2006.

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.

Ames said it reserves the right to set a minimum level for the tender to be completed.

Ames added that holders of $50 million principal amount - approximately 44% - of the existing convertibles have agreed with Specialty Finance Partners, Ames' principal stockholder, that Specialty Finance will purchase their debentures at a price of $260 per $1,000 principal amount or before May 14, 2002.

Specialty Finance has told Ames it intends to tender these debentures in the exchange.

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