Compaq Financial Services Forms First-of-Kind Facility to Finance Internet Infrastructure Equipment
Banc One, Heller Financial Team With CFS to Provide Large Ticket Leases And Loans to Mature Service Providers
MURRAY HILL, N.J., Feb. 8 /PRNewswire/ -- Compaq Financial Services Corporation (CFS), the wholly-owned leasing and financing subsidiary of Compaq Computer Corporation (NYSE: CPQ - news), today announced the formation of a first-to- market, uniquely structured $300 million financing facility to serve the information technology equipment financing needs of mature Service Providers in the United States.
The facility is led by CFS with participation from leading financial industry partners Banc One Capital Corporation and Heller Financial, Inc. (NYSE: HF - news). Combining CFS' extensive expertise in structuring Service Provider financing arrangements with the strength of two highly respected financial institutions, the fund uses an innovative risk-sharing structure to provide large-ticket financing to finance Internet infrastructure development. The first of its kind in this market, the facility extends CFS' support of Compaq's leadership position in the Service Provider marketplace.
``Recent developments in the financial markets may have limited traditional funding sources for Internet-related companies. Nonetheless, significant opportunities still exist for forward-thinking lenders to support well managed Service Providers that will be the Internet backbone of tomorrow,'' said Irv Rothman, Compaq Financial Services president and CEO. ``This latest facility expands our ability to provide SPs with an innovative option for financing acquisitions of Compaq technology while giving Compaq and its shareholders, as well as our financing partners, the tools to prudently manage the risks of participating in this fast-evolving sector.''
Service Providers eligible for equipment financing under the CFS facility generally are in the post-IPO development stages. They include Application Service Providers (ASPs), Hosting Service Providers (HSPs) and Network Service Providers (NSPs) that use Internet technology to provide 24x7 access and hosting services from centrally managed facilities to other Service Providers and/or end customers.
``While funding for the Service Provider community has consolidated in recent months, it is a very important growth segment as corporate and small- to-medium size organizations increasingly use their services,'' said Peter Blackmore, Compaq executive vice president, sales and services. ``Consistent with Compaq's SP strategy, CFS has developed creative approaches to help fast- growing SPs acquire Compaq's exceptional and flexible solutions.''
``Compaq provides the premier Internet infrastructure, solutions and services to help Service Providers succeed in this evolving marketplace,'' said Mike Heald, vice president, Compaq Service Provider/dotCOM Business Unit. ``SPs are in need of technology, services and financing to meet around-the- clock demands in this market. Compaq's specialized products, professional services, financial services and strategic partnerships enable SPs to deliver best-in-class solutions to their end customers.''
The facility is an extension of CFS' commitment to advance the development of the Internet infrastructure and supports Compaq's commitment to build and maintain long-term relationships with Service Providers as they grow. Since announcing its financial offerings to this market in March 2000, CFS has established over $700 million in credit lines to qualified SPs.
``Compaq Financial Services has worked closely with us in managing the credit available for technology acquisition to match and facilitate Data Return's growth,'' said Stuart Walker, senior vice president and chief financial officer of hosting services provider Data Return Corporation. ``As our business has grown, the CFS team has shown a keen understanding of our business requirements and developed creative solutions to help us acquire the Compaq technologies we need to service our enterprise customers.''
About Compaq Financial Services
Compaq Financial Services Corporation is a wholly owned subsidiary of Compaq Computer Corporation. Compaq established Compaq Financial Services in January 1997 to provide information technology leasing and financing solutions for Compaq customers around the world. Today, Compaq Financial Services is the sole authorized provider of Compaq-branded financing, serving customers in 41 countries from regional headquarters in Dublin and Sydney, as well as from its worldwide headquarters in Murray Hill, N.J., which covers the Americas.
The company serves all of Compaq's individual and business customers, including small and mid-sized businesses, government agencies, educational institutions and large, multinational corporations. Typical transactions range in size from $499 to $100 million. Additional information on Compaq Financial Services' financing and leasing programs is available at www.compaq.com/financialservices.
About Compaq
Compaq Computer Corporation, a Fortune Global 100 company, is a leading global provider of technology and solutions. Compaq designs, develops, manufactures, and markets hardware, software, solutions, and services, including industry-leading enterprise computing solutions, fault-tolerant business-critical solutions, and communications products, commercial desktop and portable products, and consumer PCs that are sold in more than 200 countries. Information on Compaq and its products and services is available at www.compaq.com.
About Heller Financial
Heller Financial, Inc., is a worldwide commercial finance company providing a broad range of financing solutions to middle-market and small business clients. Partnering with Compaq, Heller's EMX Group specializes in entertainment, media and technology equipment leasing.
With over $19 billion in total assets, Heller offers equipment financing and leasing, sales finance programs, collateral and cash flow-based financing, financing for healthcare companies and financing for commercial real estate. The company also offers trade finance, factoring, asset-based lending, leasing and vendor finance products and programs to clients in Europe, Asia and Latin America. Heller's common stock is listed as ``HF'' on the New York and Chicago Stock Exchanges. Heller can be found on the World Wide Web at hellerfinancial.com.
About Banc One
Banc One Capital Corporation, a subsidiary of Bank One Corporation, invests in and manages Bank One's proprietary investment portfolio, including a broad-based tax-oriented structured finance business with major market positions in the leasing, affordable housing and energy industries. Bank One is the nation's fifth-largest bank holding company with assets of more than $265 billion. Bank One can be found on the Internet at www.bankone.com.
Compaq is Registered with the U.S. Patent and Trademark Office. Product names mentioned herein may be trademarks and/or registered trademarks of their respective companies. This release contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The potential risks and uncertainties that could cause actual results to differ materially include implementation of new distribution systems; changes in product mix; unanticipated component shortages; increased competitive factors and pricing pressures; market responses to pricing actions and promotional programs; inventory risks due to shifts in market demand; volatility of certain equity investments; and instability in developing countries that may affect operations. Further information on the factors that could affect Compaq's financial results is included in the company's Securities and Exchange Commission (SEC) filings, including the latest annual report on Form 10-K and the latest quarterly report on Form 10-Q.
SOURCE: Compaq Computer Corporation |
