Bank Plans Bond Offer Backed by Car Loans

For the fourth time in 18 months, Western Financial Savings Bank in Orange plans to offer bonds backed by automobile loans. Although the amount of the issue is not set yet, it will probably be $100 million to $150 million, said Regan Kelly, a Western Financial executive.

In previous auto-backed bond offerings, the savings and loan has raised $427 million.

Typically, car loans make up about half of the S&L;’s $1.3 billion in assets. Because regulators want S&Ls; to have 60% of their loans in real estate, Western Financial uses the car-loan-backed securities to lower the amount of its consumer loans.

Approval of the latest issue by the Securities and Exchange Commission is expected within three weeks, Kelly said.

Separately, shareholders of Westcorp, the Orange-based holding company for Western Financial, have approved reincorporating the company in Delaware.

Such an action, which has been taken by many California corporations, makes it more difficult for unfriendly mergers to succeed and increases a company’s ability to obtain liability insurance for its officers and directors. A reincorporation is merely a legal manuever and does not involve physically moving the company’s offices.