Avco Financial Services Offering to Buy Notes

Avco Financial Services Inc. said that it is offering to purchase its outstanding senior and senior subordinated notes in four series having a aggregate value of $400 million.

A company spokesman said that Avco is “willing to purchase any and all” of the notes. The offer expires Friday, July 17.

Ron Bukow, senior vice president and treasurer, said that the move will save the company money in the long run, even though Avco is willing to pay considerably more for the notes than their principal amounts.

He said that Avco is offering to pay $1,071.90 per $1000 principal amount for the 11 1/8% notes; $1,123.10 per $1000 for the 12 3/8% notes; $1,125 per $1000 for the 12 1/2% notes; and $1218.90 per $1000 for the 12 3/4% notes.

“If we finance the cash tender with short term debts, we reduce the (interest) rate to about 7%,” said Bukow. He added that the long term interest rates on the notes now stand at an average of about 12%.