Cavalry Investments, LLC Reports Record Portfolio Acquisitions in Third Quarter

Cavalry Investments LLC, one of the nation's largest acquirers of distressed consumer debt, reported a record pace of portfolio acquisitions in the third quarter of 2002.

In the three months ended September 30, the firm acquired six portfolios with aggregate principal balances of $847 million, compared to $169 million in portfolio acquisitions during the same period last year. For the first nine months of 2002, acquisitions totaled $2 billion in aggregate principal balances, compared to $902 million last year. Cavalry's portfolio of receivables now totals nearly $5.5 billion.

Earlier this year, the firm, which is based in Hawthorne, New York, expanded its operations in Phoenix, Arizona, with a new 22,000-square-foot facility and the addition of 90 employees. Cavalry also purchased the assets and operations of First Credit Solutions, which added 300,000 consumer accounts with aggregate balances of more than $850 million, and an operations center in Tulsa, Oklahoma.

Andrew Zaro, Cavalry chief executive officer, said the firm has begun a significant expansion of its Hawthorne facility to permit the addition of over 100 employees and create an inbound call center utilizing the latest call center technology. Cavalry now has more than 300 total employees in its three locations servicing 1.5 million accounts, and plans to add over 200 employees by the end of the first quarter of 2003, Zaro said.

Current economic conditions, high levels of consumer debt and rising debt delinquencies all are factors contributing to Cavalry's acquisition activity, he said. This climate has strengthened debt sales as a viable strategy for companies to increase their cash position and realize some return from non- performing loans. Also sparking growth is the fact that companies in industries other than financial services, such as utilities, telecom and healthcare, are looking at selling their debt portfolios, he said. In addition, he said Cavalry is the nation's largest acquirer of automobile deficiencies and charge-offs.

"We've clearly established a record pace of expansion and portfolio acquisitions so far this year," Zaro said. "Our goal was to complete $1 billion in portfolio acquisitions in 2002, a figure that we've already well exceeded."

Al Brothers, Cavalry vice president of acquisitions, said the firm continues to assess opportunities and anticipates further substantial portfolio acquisitions before the end of the year.

"With the rate of consumer delinquencies the highest in a decade, there is a large supply of debt portfolios currently on the market," Brothers said. "We continue to look at strategic deals that make sense for us and anticipate further growth in 2002 and 2003."

About Cavalry Investments LLC
With a $5.5 billion portfolio of receivables, Cavalry Investments is one of the nation's largest acquirers of non-performing consumer loans. The firm ranks in the top ten of the country's largest debt buyers, according to Thompson Financial. Cavalry's client roster includes some of the nation's largest banks and consumer finance companies, as well as automotive companies, retailers, utilities, telecom and healthcare companies. The firm offers significant expertise, proven collection strategies and a proprietary credit scoring system that pinpoints "recoverable" loans, as well as a national legal network. Cavalry has offices in Hawthorne, New York, Phoenix, Arizona, and Tulsa, Okla.