================================================================= AMERCO BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2003 (ISSN XXXX-XXXX) June 23, 2003 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 609-392-0900 FAX 609-392-0040 ----------------------------------------------------------------- AMERCO BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 24 Perdicaris Place, Trenton, New Jersey 08618, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtor's case. New issues are prepared by Iris L. Sasing, Frauline Sinson-Abangan and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re-mailing of AMERCO BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO AMERCO BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF AMERCO & ITS OPERATING UNITS [00002] AMERCO'S CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 2002 [00003] COMPANY'S PRESS RELEASE CONCERNING THE CHAPTER 11 FILING [00004] AMERCO CHAPTER 11 DATABASE [00005] LIST OF AMERCO'S 22-LARGEST UNSECURED CREDITORS [00006] DEBTOR'S MOTION TO USE JPMORGAN CHASE'S CASH COLLATERAL [00007] DEBTOR'S MOTION TO OBTAIN $300,000,00 OF DIP FINANCING KEY DATE CALENDAR ----------------- 06/20/03 Voluntary Petition Date 07/05/03 Deadline for filing Schedules of Assets and Liabilities 07/05/03 Deadline for filing Statement of Financial Affairs 07/05/03 Deadline for filing Lists of Leases and Contracts 07/10/03 Deadline to provide Utilities with adequate assurance 08/19/03 Deadline to make decisions about lease dispositions 09/18/03 Deadline to remove actions pursuant to F.R.B.P. 9027 08/18/03 Expiration of Debtor's Exclusive Plan Proposal Period 12/17/03 Expiration of Debtor's Exclusive Solicitation Period 07/16/04 [Proposed] Expiration of $300 Million DIP Financing Pact 06/20/03 Deadline for Debtor's Commencement of Avoidance Actions Organizational Meeting with UST to form Committees Bar Date for filing Proofs of Claim First Meeting of Creditors pursuant to 11 USC Sec. 341 ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO AMERCO BANKRUPTCY NEWS ----------------------------------------------------------------- AMERCO BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtor's case. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of AMERCO BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. To continue receiving AMERCO BANKRUPTCY NEWS, please complete the form below and return it by fax or e-mail to: Bankruptcy Creditors' Service, Inc. 24 Perdicaris Place Trenton, NJ 08618 Telephone (609) 392-0900 Fax (609) 392-0040 E-mail: peter@bankrupt.com We have published similar newsletters tracking billion-dollar insolvency proceedings since 1990, starting with Federated Department Stores. Currently, we provide similar coverage about the restructuring proceedings involving WestPoint Stevens, Pillowtex, Burlington Industries, Warnaco, Fruit of the Loom, Fleming Companies, Kmart Corp., Ames Department Stores, Spiegel, Inc. (and its Eddie Bauer and Newport News subsidiaries), NRG Energy, Covanta Energy Corp., Pacific Gas and Electric Company, Enron Corp., National Steel, Bethlehem Steel, LTV, Weirton Steel, Wheeling-Pittsburgh, Kaiser Aluminum, Metals USA, Leap Wireless, Adelphia Communications and Adelphia Business Solutions, Genuity, WorldCom, Global Crossing and Asia Global Crossing, Winstar, 360networks, DirecTV Latin America, GenTek, Federal-Mogul, Hayes Lemmerz, Exide Technologies, W.R. Grace & Co., Owens Corning, Armstrong World Industries, USG Corporation, Safety-Kleen, Laidlaw, The IT Group, Encompass Services Corporation, NationsRent, Polaroid Corporation, Acterna, Magellan Health Services, National Century Financial Enterprises, Integrated Health Services, Vencor, Inc., Sun Healthcare Group, Inc., Mariner Post-Acute & Mariner Health, Genesis Health & Multicare, Conseco, Inc., and Conseco Finance Corp., Reliance Group Holdings & Reliance Financial, The FINOVA Group, Inc., Comdisco, Air Canada, United Airlines, US Airways Group, Budget Group, ANC Rental, Bridge Information Services, Loewen Group, Vlasic Foods, and Harnischfeger Industries, Inc. ================================================================= [ ] YES! Please enter my personal subscription to AMERCO BANKRUPTCY NEWS at US$45 per issue until I tell you to cancel my subscription. Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) AMERCO BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtor's case. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of AMERCO BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF AMERCO & ITS OPERATING UNITS ----------------------------------------------------------------- AMERCO 1325 Airmotive Way, Suite 100 Reno, Nevada 89502-3239 Telephone (775) 688-6300 Fax (775) 688-6338 http://www.amerco.com/ AMERCO's principal operation is U-Haul International, renting its fleet of 96,000 trucks, 87,000 trailers, and 20,000 tow dollies to do-it-yourself movers through over 1,000 company-owned centers and 15,000 independent dealers located throughout the United States and Canada. U-Haul, founded in 1945, is a leading provider of self-storage facilities, with more than 1,000 locations in the United States and Canada, housing 28.5 million square feet of space in more than 360,000 self-storage units. U-Haul is the largest do-it-yourself moving and storage company. With a near-50% market share, U-Haul is 2-1/2 times larger than its nearest competitor. AMERCO (Nasdaq: UHAL) is a holding company for four non-bankrupt operating units: 2002 Earnings 2002 Revenues from Operations ------------- --------------- $1,243,400,000 $69,500,000 U-Haul International, Inc. is AMERCO's moving and self- storage operation. The business involves renting trucks and trailers, the sale of moving supplies, trailer hitches and propane and self-storage space rental to the do-it-yourself mover. Operations are under the registered U-Haul(R) tradename throughout the United States and Canada. U-Haul Co. (Canada) Ltd., is U-Haul's Canadian operating subsidiary. $78,700,000 $72,300,000 AMERCO Real Estate Company owns approximately 90% of AMERCO's real estate assets, including U- Haul's Center and Storage locations. The remainder of the properties are owned by various U-Haul entities. Real Estate is responsible for managing all of the properties including the environmental risks of the properties. Real Estate is responsible for the purchase of all properties used by AMERCO or any of its subsidiaries. Real Estate also handles all of the dispositions (sale and lease) of unused real estate. $274,000,000 ($68,200,000) Republic Western Insurance Company, domiciled in Arizona, originates and reinsures property and casualty type insurance products for various market participants, including independent third parties, U- Haul's customers, independent dealers and AMERCO. Consistent with its April 25, 2003, announcement, RepWest continues to exit from all non-U-Haul lines of business to cut costs and focus on its core business. $160,100,000 $11,100,000 Oxford Life Insurance Company originates and reinsures annuities, credit life and disability, life insurance, and supplemental health products. Oxford also administers the self-insured employee health and dental plans for AMERCO. SAC Holdings Corporation and SAC Holding II Corporation own self- storage facilities, which are managed by U-Haul under management agreements. AMERCO has no (and has never had any) ownership interest in SAC Holdings. Revenues totaling $111,100,000 are and income from operations totaling $47,800,000 are consolidated into AMERCO's 2002 financial statements under EITF 90-15. SAC Holdings' creditors have no recourse to AMERCO. AMERCO is not liable for the debts of SAC Holdings. Further, there are no cross default provisions on indebtedness between AMERCO and SAC Holdings. The Road to Chapter 11 AMERCO blames its problems on PricewaterhouseCoopers and has filed a $2.5 billion lawsuit against its former auditing firm. A copy of that lawsuit is available at no charge at: http://www.amerco.com/press_releases/final_complaint.pdf In February 2002, AMERCO says, PwC informed the Company that, contrary to its prior advice, SAC Holding should be included in AMERCO's consolidated financial statements. The timing of PwC's announcement made it impossible, AMERCO claims, to raise money in the bond market to refinance debt coming due. AMERCO defaulted on a $100 million principal and $3.6 million interest payment owed to holders of the Series 1997-C Bond Backed Asset Trust Certificates, $26.6 million of swap agreement obligations owed to Citibank and Bank of America, and $175 million owed to holders of its 7.85% Senior Notes. That triggered cross-defaults under other debt instruments and synthetic lease arrangements with Bank of Montreal, Citibank and the Royal Bank of Canada. AMERCO says it's solvent, it's negotiated with representatives of every major creditor constituencies and has every intention to propose and confirm a consensual chapter 11 plan that will pay all creditors in full and not dilute existing equity. ----------------------------------------------------------------- [00002] AMERCO'S CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 2002 ----------------------------------------------------------------- AMERCO AND CONSOLIDATED SUBSIDIARIES AND SAC HOLDING CORPORATIONS AND CONSOLIDATED SUBSIDIARIES Condensed Consolidated Balance Sheets At December 31, 2002 Assets Cash and cash equivalents $51,910,000 Receivables 284,708,000 Inventories, net 64,154,000 Prepaid expenses 48,722,000 Investments, fixed maturities 930,461,000 Investments, other 266,102,000 Other assets 176,737,000 -------------- 1,822,794,000 Property, plant and equipment, at cost: Buildings and improvements 717,020,000 SAC Holdings' Buildings and improvements 475,794,000 Rental trucks 1,128,422,000 Other property, plant and equipment 626,263,000 SAC Holdings other property, plant and equipment 267,072,000 -------------- 3,214,571,000 Less accumulated depreciation (1,282,675,000) -------------- Total property, plant and equipment 1,931,896,000 -------------- Total Assets $3,754,690,000 ============== Liabilities and Stockholders' Equity Liabilities: AMERCO's notes and loans payable $908,430,000 SAC Holdings notes and loans payable 583,856,000 Policy benefits and losses, claims and loss expenses payable 675,175,000 Liabilities from premium deposits 635,924,000 Other liabilities 430,548,000 -------------- Total liabilities 3,233,933,000 Commitments and Contingent Liabilities Stockholders' equity: Serial preferred stock - Series A preferred stock -- Series B preferred stock -- Serial common stock - Series A common stock 1,441,000 Common stock 9,122,000 Additional paid-in-capital 266,073,000 Accumulated other comprehensive loss (52,782,000) Retained earnings 758,474,000 Cost of common shares in treasury, net (448,394,000) Unearned ESOP shares (13,177,000) -------------- Total stockholders' equity 520,757,000 -------------- Total Liabilities and Stockholders' Equity $3,754,690,000 ============== ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE CONCERNING THE CHAPTER 11 FILING ----------------------------------------------------------------- AMERCO Files Voluntary Chapter 11 To Facilitate Financial Restructuring -- Not Included In The Filing Are Subsidiaries, U-Haul, Oxford Life Insurance Company, Republic Western Insurance Company Reno, Nevada -- June 20, 2003 -- AMERCO (Nasdaq: UHAL), today announced that in order to facilitate its financial reorganization, it has filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code. AMERCO has taken this action in order to expedite the financial restructuring of its debt. Not included in the Chapter 11 filing are the following AMERCO subsidiaries: U-Haul, Oxford Life Insurance Company and its subsidiaries, and Republic Western Insurance Company, among others. The Chapter 11 filing by AMERCO is not expected to impact the operations of these subsidiaries, and their business will continue uninterrupted. Additionally, since the Company is solvent, with asset value in excess of its debt, AMERCO intends to repay its creditors in full, pursuant to a full-value plan of reorganization, without diluting the interest of its shareholders. On October 15, 2002, AMERCO defaulted on a $100 million principal payment owed to its Series 1997-C Bond Backed Asset Trust notes. Since that time, the Company and its financial advisors have been negotiating with representatives of its major creditor constituencies with the goal of developing a consensual, full-pay reorganization plan. A commitment has been obtained from Wells Fargo Foothill for a $300 million debtor-in-possession (DIP) financing facility, and for a $650 million bankruptcy emergence facility. These commitments provide the basic foundation upon which the Company will build its reorganization plan. It is anticipated that a Chapter 11 filing of Amerco Real Estate Company (AREC) may take place within the next 30-45 days in order to implement the DIP financing facility. AREC is a wholly owned subsidiary of AMERCO that holds and develops real estate. "The opportunity at AMERCO is in its capital structure. Business fundamentals at the Company remain strong. AMERCO has taken a positive step in choosing Chapter 11 to facilitate the restructuring of its debt. We are getting our financial house in order," stated Joe Shoen, AMERCO Chairman. "Additionally, the Company made positive progress in reducing costs throughout last winter. Cost- cutting measures remain in effect. As a result, I do not expect any related layoffs at any of the non-filing subsidiaries. Employment and benefits will continue uninterrupted. U-Haul, Republic Western and Oxford Life operations are not affected by this filing and continue to operate as usual, serving customers and paying vendors without interruption." The Chapter 11 petitions were filed today in the United States Bankruptcy Court, District of Nevada, the Honorable Judge Gregg W. Zive, presiding. ----------------------------------------------------------------- [00004] AMERCO CHAPTER 11 DATABASE ----------------------------------------------------------------- Debtor: AMERCO 1325 Airmotive Way, Suite 100 Reno, Nevada 89502 Chapter 11 Petition Date: Friday, June 20, 2003 at 12:25 a.m. Bankruptcy Case No.: 03-52103 Bankruptcy Court: United States Bankruptcy Court District of Nevada 300 Booth Street, Room 1109 Reno, NV 89509 Telephone (775) 784-5559 Bankruptcy Judge: The Honorable Gregg W. Zive Debtor's Counsel: Craig D. Hansen, Esq. Jordan A. Kroop, Esq. Thomas J. Salerno, Esq. Carey L. Herbert, Esq. Squire, Sanders & Dempsey LLP Two Renaissance Square, Suite 2700 40 North Central Avenue Phoenix, AZ 85004 Telephone (602) 528-4000 http://www.ssd.com/ - and - Bruce Thomas Beesley, Esq. Bridget Robb Peck, Esq. Beesley, Peck, Matteoni, Ltd 5011 Meadowood Mall Way, Suite 300 Reno, NV 89502 Telephone (775) 827-8666 Fax (775) 827-8722 http://www.beasleyandpeck.com/ Debtor's Special PwC Litigation Counsel: Ronald J. Cohen, Esq. Cohen, Kennedy, Dowd & Quigley, P.C. The Camelback Esplanade 2425 E. Camelback Road, Suite 1100 Phoenix, Arizona 85016 Telephone (602) 252-8400 Fax (602) 252-5339 http://www.lawyers.com/cohenkennedylaw/ Debtor's Financial Advisor and Restructuring Consultant: Richard Williamson Alvarez & Marsal, Inc. 2525 East Camelback Rd., Suite 1040 Phoenix, AZ 85016 Telephone (602) 522-9000 Fax (602) 522-9006 http://www.alvarezandmarsal.com/ Debtor's Accountants: Bradley W. Schrupp BDO Seidman, LLP 1900 Avenue of the Stars, 11th Floor Los Angeles, CA 90067 Telephone (310) 557-0300 Fax (310) 557-1777 http://www.bdo.com/ Debtor's Claims Agent: Lorenzo Mendizabel Trumbull Associates, L.L.C. Griffin Center 4 Griffin Road North Windsor, CT 06095 Telephone (860) 684-5400 Fax (860) 683-8697 http://www.trumbullgroup.com/ U.S. Trustee: Nicholas Strozza Assistant U.S. Trustee for Region 17 300 Booth Street, Room 2129 Reno, NV 89509 Telephone (775) 784-5335 Fax (775) 784-5531 ----------------------------------------------------------------- [00005] LIST OF AMERCO'S 22-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Entity Nature Of Claim Claim Amount ------ --------------- ------------ AIG Global Investment Group Debt - Bonds & Notes $110,535,000 Attn: Kaye Handley 175 Water St., 25th Floor New York, NY 10038 Conseco Capital Mgt. Debt - Swap Note $29,575,000 Attn: Eric Johnson 11835 North Pennsylvania St. Carmel, IN 46032 Apollo Advisors, LP Debt - Bonds & Notes $25,250,000 2 Manhattanville Rd. Purchase, NY 10577 Bayerishe Hypovereinsbank Debt - Bonds & Notes $25,250,000 Group Attn: Kaye Handley 175 Water Street, 25th Floor New York, NY 10038 Apollo Advisors, LLP Debt - Bonds & Notes $25,250,000 2 Manhattanville Rd. Purchase, NY 10577 John Hancock Advisers, Inc. Debt - Bonds & Notes $25,000,000 Attn: Tony Dellaplana 200 Clarendon St. PO Box 111 Boston, MA 02116 Bayerishe Hypovereinsbank Debt - Bonds & Notes $25,000,000 150 East 42nd Street, 30th Floor New York, NY 10017 Deutsche Asset Management Debt - Bond & Notes $20,000,000 222 South Riverside Plaza Chicago, IL 60606 Satellite Asset Management, Debt - Bonds & Notes $19,350,000 LP Attn: Josh Trump 623 Fifth Avenue, 20th Floor New York, NY 10022 ING Investment Mgt. Inc. Debt - Bonds & Notes $15,500,000 Attn: Michael Lisenby 5780 Powers Ferry Rd., N.W. Suite 300 Atlanta, GA 30327 Citibank Debt - Bonds & Notes $15,300,000 Attn: Fernando Lopez-Ona 250 West Street, 8th Floor New York, NY 10013 General Electric Asset Mgt. Debt - Bonds & Notes $15,000,000 3003 Summer St. Stamford, CT 06905 Mellon Finance Debt - Bonds & Notes $13,000,000 200 Park Avenue #3300 New York, NY 10166 Credit Suisse First Boston Debt - Bonds & Notes $10,100,000 (NY Trading Desk) 13th Floor 466 Lexington Avenue New York, NY 10017 Credit Suisse First Boston Debt - Bonds & Notes $10,000,000 (London) One Cabot Square London, E14 4QJ England Erie Insurance Group Debt - Bonds & Notes $10,000,000 100 Erie Insurance Plaza Erie, PA 16530 Lloyd Miller Debt - Bonds & Notes $10,000,000 4550 Gordon Drive Naples, Florida 34102 Mutual of Omaha Insurance Debt - Bonds & Notes $10,000,000 Co. Mutual of Omaha, 4th Floor Omaha, NE 68175 Pacific Investment Mgt. Debt - Bonds & Notes $10,000,000 Attn: David Behanna 840 Newport Center Dr., Suite 300 Newport Beach, CA 92660 SAFECO Asset Management Debt - Bonds & Notes $10,000,000 Attn: Michael-Ann McAboy PO Box 34895 Seattle, WA 98124-1895 MBIA Capital Management Debt - Bonds & Notes $9,000,000 Attn: Robert Claiborne 113 King Street Armonk, NY 10504 Muzinich & Co., Inc. Debt - Bonds & Notes $8,350,000 450 Park Avenue, 18th Floor New York, NY 10022 ----------------------------------------------------------------- [00006] DEBTOR'S MOTION TO USE JPMORGAN CHASE'S CASH COLLATERAL ----------------------------------------------------------------- AMERCO owes $205,000,000 under a 3-Year Credit Agreement dated June 28, 2002, to -- according to information obtained from http://www.LoanDataSource.com -- a Ten-Lender Syndicate: JP Morgan Chase Bank $25,000,000 12.195% Bank of America, N.A. 25,000,000 12.195% Bank One, NA 25,000,000 12.195% Citicorp USA, Inc. 20,000,000 9.756% Wells Fargo Bank, N.A. 20,000,000 9.756% Fleet National Bank 20,000,000 9.756% U.S. Bank National Association 20,000,000 9.756% Washington Mutual Bank 20,000,000 9.756% LaSalle Bank Natioanl Association 20,000,000 9.756% KBC Bank N.V. 10,000,000 4.878% ------------ ------- Total $205,000,000 100.000% ============ ======= All of AMERCO's obligations are guaranteed by 76 subsidiaries and secured by a first-priority security interest in existing and future intercompany receivables, proceeds thereof and any instruments evidencing those intercompany receivables. At June 28, 2002, Intercompany Receivables totaled $517,200,000; the Debtor can't compute the total today, but they're confident the Lenders are oversecured by a wide margin. The Debtor does not dispute the validity of the Lenders' liens and does not believe any portion of the debt is avoidable or subject to subordination. The Debtor believes all cash coming in the door constitutes the Lenders' Cash Collateral. Section 363 of the Bankruptcy Code prohibits AMERCO's continued use of the Lenders' Cash Collateral without bankruptcy court approval. AMERCO needs continued access to the Lenders' Cash Collateral to fund on-going operations until a DIP Financing Facility can be put in place to pay-off this $205 million prepetition debt. To protect the Lenders from any diminution in the value of the Collateral, the Debtor asks Judge Zive to approve a consensual Cash Collateral Siptulation granting the Lenders' post-petition replacement liens, approving continued interest payments, and authorizing continued payment of the Lenders' Professionals' Fees. The Debtor also asks Judge Zive, subject to a 60 to 90-day review period by any official committee, to ratify the Company's waiver of all potential claims, causes of action and subordination rights against the Lenders. The Debtor agrees to provide the Lenders with a variety of reports and keep them informed at each step in the restructuring process. Additionally, in no event will the Lenders' collateral be subject to any surcharge under 11 U.S.C. Sec. 506. Considering the Debtor's request at an Emergency First Day Hearing, Judge Zive approves the Debtor's request. Judge Zive will convene a Final Cash Collateral Hearing on July 16 at 2:00 p.m. in Reno to consider any objections to entry of a Final Cash Collateral Order allowing AMERCO access to the Lenders' cash collateral throughout the chapter 11 restructuring process. Richard Levin, Esq., and Seth Goldman, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, in Los Angeles, and John Murtha, Esq., at Woodburn and Wedge in Reno, represent the Lenders in AMERCO's chapter 11 proceeding. ----------------------------------------------------------------- [00007] DEBTOR'S MOTION TO OBTAIN $300,000,00 OF DIP FINANCING ----------------------------------------------------------------- To cash-out the Ten-Lender Consortium and provide on-going liquidity while in chapter 11 AMERCO secured a $300,000,000 debtor-in-possession financing commitment from Wells Fargo Foothill, Inc. The DIP Facility also lays the groundwork for a $650,000,000 Exit Financing Facility backed by Foothill and Credit Suisse First Boston to fund the Reorganized Debtor's obligations under a plan of reorganization as it emerges from chapter 11. The DIP Facility provides AMERCO with access to $200,000,000 of revolving credit ($25,000,000 of which backs letters of credit) and a $100,000,000 term loan, all subject to a Borrowing Base equal to 40% of the fair market value of the Debtor's Real Property. The Exit Facility consists of a $200,000,000 revolver (with a $25,000,000 subfacility for letters of credit), a $350,000,000 amortizing Term Loan A and a $100,000,000 non- amortizing Term Loan B, all subject to a Borrowing Base equal to 50% of the fair market value of the Debtor's Real Property. AMERCO and Amerco Real Estate Company are the direct Borrowers under the DIP Facility, as well as any other wholly owned subsidiaries Foothill may require. All of AMERCO's other U.S. affiliates and subsidiaries will guarantee repayment of AMERCO's obligations. The DIP Facility matures 12 months after entry of a Final DIP Financing Order or 10 days following confirmation of a chapter 11 plan. The Exit Facility contemplates a five-year term (with zero to 2% prepayment penalties for early termination). Subject to a $5,000,000 Carve-Out to permit payment of professional fees and fees owed to the U.S. Trustee and Court Clerk, all of AMERCO's borrowings under the DIP Facility constitute super-priority administrative expenses pursuant to 11 U.S.C. Sec. 364(c) and are secured by super-priority liens on all of the Debtor's otherwise unencumbered assets. The Exit Facility will be secured by first-priority liens on substantially all of the Reorganized Debtor's assets. AMERCO will pay interest on all amounts borrowed under the DIP Facility, at its option, at LIBOR plus 3.0% or the Base Rate plus 1.0%. The interest rate post-emergence will be tied to various performance measures. AMERCO will pay Foothill a variety of fees for the DIP Financing: (a) 0.50% per year on every dollar not borrowed as an Unused Line Fee; (b) customary 3.5% letter of credit fees; (c) $850 per-day per-analyst Field Examination Fees; and (d) other fees set forth in one or more non-public Fee Letters. All Letters of Credit must be cash collateralized at a rate of 105%. To make sure that AMERCO has ample liquidity to cash-out the Ten- Lender Syndicate and continue operating, the DIP Financing Package is conditioned on the Debtor having $40,000,000 of unrestricted cash on hand plus available credit under the DIP Financing Facility. The Final DIP Financing Documents will impose quarterly EBITDA, EBITDAR, leverage and fixed charge coverage ratio financial covenants on the Debtor. These financial covenants, the Debtor indicates, will be not less than 80% of the Company's projected operating performance. The Debtor anticipates filing the final DIP financing documents with the Bankruptcy Court this week. The Debtor will ask the Court to approve the DIP Financing Facility on an interim basis this week and convene a Final DIP Financing Hearing on July 16. AMERCO CFO Andrew A. Stevens tells Judge Zive that he solicited DIP financing proposals from other financial institutions. Those institutions declined or offered proposals on inferior terms. "Under the circumstances," Mr. Stevens is convinced, Foothill's proposal is "the most favorable in light of the Debtor's working capital needs" and presents "the most attractive economic package." *** End of Issue No. 1 *** ------------------------------------------------------------------------- Peter A. Chapman peter@bankrupt.com http://bankrupt.com ------------------------------------------------------------------------- Recommended Reading: Professor Stuart Gilson's newest title, "Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups." List Price: $79.95 -- Discounted to $55.96 at http://amazon.com/exec/obidos/ASIN/0471405590/internetbankrupt -------------------------------------------------------------------------