FINOVA Enters Agreement with Berkshire Hathaway , Leucadia National for $6 Billion Loan Commitment

February 28, 2001

The FINOVA Group, Berkshire Hathaway and Leucadia National Corp. have entered into an agreement for a $6 billion loan to FINOVA Capital, the principal operating subsidiary of The FINOVA Group in connection with a restructuring of all of FINOVA Capital’s outstanding bank and publicly traded debt securities.

The restructuring will be accomplished pursuant to proceedings under Chapter 11 of the United States Bankruptcy Code. FINOVA expects to file a petition for reorganization under Chapter 11 in the near future.

Subject to necessary approval of creditors and the court, FINOVA Capital will use proceeds of this $6 billion senior secured five-year term loan to pay down, at par value, its existing bank and publicly traded indebtedness on a pro-rata basis. The balance of FINOVA Capital’s bank and bond indebtedness will be restructured into approximately $5 billion of new senior notes of FINOVA.

The $6 billion loan will be made by Berkadia LLC, an entity formed for this purpose and owned jointly by Berkshire Hathaway and Leucadia. Berkadia has received a $60 million commitment fee and, in addition to certain other fees, will receive an additional $60 million fee upon funding under the agreement.

Berkadia’s commitment for the loan has been guaranteed by Berkshire Hathaway and Leucadia and expires on August 31, 2001, or earlier, if certain conditions are not satisfied.

The FINOVA Group, through its principal operating subsidiary, FINOVA Capital Corp., is a financial services company providing capital solutions primarily to midsize business.

FINOVA is headquartered in Scottsdale, Ariz., with business development offices throughout the U.S. and London, U.K., and Toronto, Canada.

Topics Berkshire Hathaway

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