Amway Debt Free?

"Do you know why Amway has so much money? Do you know why they make so much money? One simple reason...Something a lot of you might not be able to relate to, but we are debt free. We don't carry one dime of long term debt, and that puts money back in our pockets." Double Diamond-Greg Duncan-tape: "EDC Attitude" RP419

"I talk about Amway being a debt free company" Diamond Distributor-Bill Hawkins-Tape: "Prospecting in the 21st Century" PR863

" Amway is debt free. They have no debt to retire at the end of the year. No interest to pay. And, they don't have any shareholders so they don't have any dividends to pay. So they are able because of the efficiency and integrity of they way the built Amway and structured it to throw another 5% out of their profit margins that would normally go to retire debt and pay dividends to shareholder on top of the 65% so that you and I can make 70% on every dollar that goes through the business." Triple Diamond - Ron Puryear-Tape: "The goose that laid the golden egg" RP-887 (In fiscal year 2000 Quixtar paid total bonuses of $143 million on total sales of $513Million or 27.8% of sales)

"It is the finest corporation in America. Debt free, $7 billion company.....we got a debt free worldwide company that pays 65% back....there margin of profit for them self is the lowest in the nation, because they are debt free..." Executive Diamond - Jim Head - Tape: "Jim & Judy Head Rally" RP-855 ã 2000 (In fiscal year 1999 Amway reported sales at "estimated retail" of $5 billion. In Forbes '99 list of the largest private companies, Forbes estimated corporate sales of $3.5B)

It would seem that Amway/Quixtar/Alticor distributors can no longer claim their mother company to be debt free. More and more news articles are being issued about the company and its debt. Amway reabsorbed its formerly publicly held sister companies of Amway Japan and Amway Asia Pacific in the summer of 2000.

From: Amway Corp. To Reorganize Feb. 2000

By LISA SINGHANIA. The Associated Press

Mark Bain, Amway spokesman

"Our cash position is solid, our debt is manageable, we're financially very strong,'' Bain said. ``Our sales are a bit behind what we hoped they would be, but that's not the driving force here.''

Amway Japan $500 Mln Syndicated Loans Wins Rating From Fitch

Tokyo, Nov. 30 (Bloomberg) -- Amway Japan Ltd., a seller of houseware products, will use the proceeds of a $500 million syndicated loan to refinance existing debt, Amway and arranger J.P. Morgan & Co. said.

Ratings agency Fitch has given the loan a ``BBB-'' rating, making Amway Japan one of the first Japanese companies to have a syndicated loan rated by a credit agency.

Amway Asia Pacific Ltd. and two holding companies in the U.S. guaranteed the credit, Fitch said.

The loan will be drawn in three tranches: one of $125 million for three years, one of $275 million for four-and-a-half years, and one of $100 million for five years as a private placement, said Aniruddha Roy, head of credit origination at J.P. Morgan Securities Asia Ltd.

Amway Japan has seen sales, profitability and its distributor base decline over the last three years, Fitch said in a statement. The company was purchased in July by a Japanese personal care products firm owned by ALAP Holding Co. of the U.S., one of the loan guarantors.

Amway Japan, which Roy said will use the money for refinancing, was delisted as of Sept. 27 due to the acquisition.

Nov/30/2000 0:35 ET

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