Magazine article American Banker

American Savings Begins Sale of CD Offering

Magazine article American Banker

American Savings Begins Sale of CD Offering

Article excerpt

NEW YORK -- The American Savings and Loan Association, the primary unit of the troubled Financial Corporation of America, has begun selling its expected offering of $1 billion in certificates of deposit.

As of midday Monday, the sale "was doing very nicely," said Edwin Payne, senior vice president of Prudential Bache Securities Inc., lead manager for the offering.

The CD offering is another in a list of billion-dollar financing deals recently arranged by American Savings, based in Stockton, Calif. American Savings ranks as the nation's largest thrift with $33 billion in 1984 midyear assets, but was plagued by large deposit withdrawals in July and august.

The thrift priced its certificates aggressively, offering stated rates that range from 12.5% for six-month CDs to 13% for seven-year certificates. American Savings also offered a premium rate of 13.25% for eighteen-month certificates.

Financial Corp. previously announced financing deals with secondary mortgage market agencies that could bring as much as $5 billion in cash.

Financial, based in Los Angeles, also announced late Friday that it has dismissed its accountants, Arthur Andersen & Co., and is seeking a new auditor for its 1984 financial statements.

The company had said earlier that Arthur Andersen's officers approved the accounting for certain mortgage security transactions that was disallowed by the Securities and Exchange Commission in July. That forced Financial to restate a $75 million first-half profit as an $80 million loss. …

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