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                                                                       EXHIBIT 1

                                 TERMS AGREEMENT

                                                                January 22, 1999

ARISTAR, INC.
1201 Third Avenue
Suite 1500
Seattle, Washington 98101

Dear Sirs:

                We (the "Underwriters" and the "Representatives") understand
that Aristar, Inc., a Delaware corporation (the "Company"), proposes to issue
and sell $ 200,000,000 aggregate principal amount of its 5.85% Senior Notes due
January 27, 2004 (the "Underwritten Securities"). Subject to the terms and
conditions set forth herein or incorporated by reference herein, the
Underwriters hereby offer to purchase, severally and not jointly, the principal
amount of Underwritten Securities set forth opposite their respective names
below at 99.25% of the principal amount thereof, together with accrued interest
thereon, if any, from January 27, 1999 to (but not including) the Delivery Date.


<TABLE>
<CAPTION>
                                                             Principal
Underwriter                                                     Amount     
-----------                                                 ------------
<S>                                                         <C>         
Merrill Lynch, Pierce, Fenner & Smith Incorporated........  $120,000,000
Goldman, Sachs & Co.......................................    40,000,000
Salomon Smith Barney Inc..................................    40,000,000
                                                            ------------
                  Total................................... $ 200,000,000
                                                            ============
</TABLE>


                The Underwritten Securities shall have the following terms:

<TABLE>
<S>                               <C>                                  
Date of maturity:                 January 27, 2004

Interest rate:                    5.85% per annum, payable semiannually

Initial public offering price:    99.85%, plus accrued interest, if any, from January 27, 1999 to
                                  (but  not including) the Delivery Date

Interest payment dates:           January 27th and July 27th, commencing July 27, 1999

Redemption provisions:            The Underwritten Securities are not redeemable

Form:                             The  Underwritten  Securities  are to be  issued in the form of one or
                                  more global securities registered in the name of The Depository Trust
                                  Company or its nominee (the "Depositary"); delivery of the
                                  Underwritten Securities at closing will be made through the
                                  facilities of the Depositary

Specified funds for payment
 of purchase price:               Wire transfer of immediately available funds

Specified address for notices:    Merrill Lynch & Co.
                                  10877 Wilshire Blvd.
                                  Suite 1900
</TABLE>




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<TABLE>
<S>                               <C>                                  
                                  Los Angeles, California 90024
                                  Attention: Chris Del Moral-Niles

Delivery Date:                    10:00 A.M., New York City time, on January 27, 1999

Place of closing:                 Simpson Thacher & Bartlett
                                  425 Lexington Avenue
                                  New York, New York 10017
</TABLE>

        The Underwriters hereby confirm that they have furnished to the Company
in writing the following information for inclusion in the Company's Prospectus
Supplement dated January 22, 1999 to the Company's Prospectus dated June 23,
1997 relating to the Underwritten Securities (the "Prospectus Supplement"): (i)
the second and third sentences of the first paragraph on page S-7 of the
Prospectus Supplement; (ii) the table on page S-7 of the Prospectus Supplement,
(iii) the second paragraph below the table on page S-7 of the Prospectus
Supplement concerning the public offering price, concession and discount; (iv)
the third sentence of the third paragraph below the table on page S-7 of the
Prospectus Supplement; (v) the fourth and fifth paragraphs below the table on
page S-7 of the Prospectus Supplement concerning overallotment, stabilizing
transactions and syndicate covering transactions; and (vi) as it relates to the
Underwriters, the sixth paragraph below the table on page S-7 of the Prospectus
Supplement concerning the absence of any representation with respect to the
direction, magnitude and continuance of the transactions described therein.

        All of the provisions contained in the document entitled "Aristar, Inc.
-- Debt Securities -- Underwriting Agreement Basic Provisions" and dated October
6, 1997 (the "Basic Provisions"), a copy of which you have previously furnished
to us, are herein incorporated by reference in their entirety and shall be
deemed to be a part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein; provided, however, that

                        (i) the Company also represents to the Underwriters
        that, to the best of its knowledge, Deloitte & Touche, L.L.P. are
        independent accountants as required by the Act and the Rules and the
        Regulations;

                        (ii) the first sentence of clause (d) of Paragraph 1 of
        such provisions shall be deleted and shall be replaced in its entirety
        by the following: "From the dates as of which information is given in
        the Registration Statement and the Prospectus, and except as described
        therein, (i) there has not been any material adverse change or any
        development involving a prospective material adverse change in the
        financial condition or results of operations of the Company and its
        Subsidiaries taken as a whole and (ii) there has been no dividend or
        distribution of any kind declared, paid or made by the Company on any
        class of its capital stock.";

                        (iii) subparagraph (ii) of the first proviso in clause
        (a) of Paragraph 7 of such provisions shall be deleted and and shall be
        replaced in its entirety by the following: "and (ii) that with respect
        to any Preliminary Prospectus or Prospectus, the foregoing
        indemnification shall not inure to the benefit of any Underwriter, any
        Participant or any person controlling that Underwriter or Participant on
        account of any loss, claim, damage, liability or action arising from the
        purchase of Securities by any person from that



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        Underwriter or Participant, if that Underwriter or Participant in fact
        failed to send or give a copy of the Prospectus (excluding documents
        incorporated by reference) provided by the Company in accordance with
        Paragraph 6(b) hereof (as such Prospectus may then be amended or
        supplemented, in each case exclusive of the documents incorporated
        therein by reference) to that person within the time required by the
        Act;";

                        (iv) subparagraph (iii) of the proviso in the third
        sentence of clause (c) of Paragraph 7 of such provisions shall be
        deleted and shall be replaced in its entirety by the following: "or
        (iii) the indemnifying party has failed to assume the defense of such
        claim or action and employ counsel reasonably satisfactory to the
        indemnified party, in which case, if such indemnified party notifies the
        indemnifying party in writing that it elects to employ separate counsel
        at the expense of the indemnifying party, the indemnifying party shall
        not have the right to assume the defense of such claim or action on
        behalf of such indemnified party, it being understood, however, that the
        indemnifying party shall not, in connection with any one such claim or
        action or separate but substantially similar or related claims or
        actions in the same jurisdiction arising out of the same general
        allegations or circumstances, be liable for the reasonable fees and
        expenses of more than one separate firm of attorneys (in addition to
        local counsel) at any time for all such indemnified parties, which firm
        shall be designated in writing by the Representatives, if the
        indemnified parties under this Paragraph consist of any Underwriter, any
        Participant or any of their respective controlling persons, or by the
        Company, if the indemnified parties under this Paragraph consist of the
        Company of any of its directors, officers or controlling persons.";

                        (v) the following sentence in clause (c) of Paragraph 7
        of such provisions shall be deleted in its entirety: "Each indemnified
        party, as a condition of the indemnity agreements contained in Paragraph
        7(a) and 7(b) hereof, shall use its best efforts to cooperate with the
        indemnifying party in the defense of any such claim or action.";

                        (vi) the following sentence shall be inserted at the end
        of clause (c) of Paragraph 7 of such provisions: "No indemnifying party
        shall, without the prior written consent of the indemnified party (which
        consent shall not be unreasonably withheld), effect any settlement of
        any pending or threatened proceeding in respect of which any indemnified
        party is or could have been a party and indemnity could have been sought
        hereunder by such indemnified party unless such settlement includes an
        unconditional release of such indemnified party from all liability on
        claims that are the subject matter of such proceeding.";

                        (vii) clause (a) of Paragraph 8 of such provisions shall
        be deleted and shall be replaced in its entirety by the following: "(a)
        trading in securities generally on the New York Stock Exchange is
        suspended or minimum prices are established on that Exchange or trading
        in any securities of the Company have been suspended by any exchange or
        by the Commission";

                        (viii) clause (c) of Paragraph 8 of such provisions
        shall be deleted and shall be replaced in its entirety by the following:
        "(c) there is an outbreak or escalation of hostilities involving the
        United States or the declaration by the United States of a national
        emergency or war if the effect of any such event is to make it
        impracticable to proceed with



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        the public offering or the delivery of the Underwritten Securities on
        the terms and in the manner contemplated in the Prospectus as first
        amended or supplemented relating to the Underwritten Securities, or";

                        (ix) clause (d) of Paragraph 8 of such provisions shall
        be deleted and shall be replaced in its entirety by the following: "(d)
        there shall have occurred such a material adverse change in general
        economic, political or financial conditions (or the effect of
        international conditions on the financial markets in the United States
        shall be such) as to make it, in the judgment of a majority in interest
        of the several Underwriters, impracticable or inadvisable to proceed
        with the public offering or delivery of the Underwritten Securities on
        the terms and in the manner contemplated in the Prospectus, or (e) the
        rating of any of the Company's debt securities shall have been lowered
        by either Moody's Investors Services, Inc. or Standard & Poor's or
        either of such rating agencies shall have publicly announced that it has
        placed any of the Company's debt securities on what is commonly termed a
        "watch list" for possible downgrading.";

                        (x) the obligations of the Underwriters described in
        Paragraph 9 of the Basic Provisions shall also be subject to their
        receipt on the Delivery Date of a letter from Deloitte & Touche L.L.P.
        of the type described in Paragraph 9(g) of the Basic Provisions;

                        (xi) the first clause of Paragraph 9 of such provisions
        shall be deleted and shall be replaced in its entirety by the following:
        "The respective obligations of the Underwriters under this Agreement
        with respect to the Underwritten Securities are subject to the accuracy,
        on the date of the Terms Agreement and on the Delivery Date, of the
        representations and warranties of the Company contained herein, to the
        accuracy of the statements of the Company's officers made in any
        certificate furnished pursuant to the provisions hereof, to the
        performance and observance by the Company in all material respects of
        all covenants and agreements contained herein, and to each of the
        following additional terms and conditions applicable to the Underwritten
        Securities:";

                        (xii) subparagraph (vii) in clause (c) of Paragraph 9 of
        such provisions shall be deleted and shall be replaced in its entirety
        by the following: "(vii) The Registration Statement, as of the time it
        became effective, and the Prospectus, as of its issue date (except that,
        in each case, no opinion need be expressed as to the financial
        statements and schedules and other financial data contained or
        incorporated by reference therein), complied as to form in all material
        respects with the requirements of the Act and the Trust Indenture Act
        and the rules and regulations of the Commission under said Acts, and the
        documents incorporated by reference in the Prospectus, when filed with
        the Commission (except that no opinion need be expressed as to the
        financial statements and schedules and other financial data contained or
        incorporated by reference therein), complied as to form in all material
        respects with the applicable requirements of the Exchange Act and the
        rules and regulations of the Commission thereunder; and (except that no
        opinion need be expressed as to the financial statements and schedules
        and other financial data contained or incorporated by reference therein)
        nothing has come to the attention of such counsel to lead them to
        believe that the Registration Statement, as of the time it became
        effective, contained an untrue statement of a material fact or omitted
        to state a material fact required to be stated therein or necessary to
        make the statements therein not misleading or that the Prospectus, as of
        its date and as of the Delivery Date, contained any untrue statement of
        a



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        material fact or omitted to state a material fact necessary in order to
        make the statements therein, in the light of the circumstances under
        which they were made, not misleading.";

                        (xiii) Paragraph 14 of such provisions shall be deleted
        and shall be replaced in its entirety by the following: "14. All
        representations, warranties, indemnities, and agreements of the Company
        contained in this Agreement, or contained in certificates of officers
        submitted pursuant hereto, shall remain operative and in full force and
        effect, regardless of the termination of this Agreement or any
        investigation made by or on behalf of the Underwriters or any person
        controlling the Underwriters or by or on behalf of the Company, and
        shall survive each delivery of and payment for any of the Underwritten
        Securities.";

                        and (xiv) clause (j) of Paragraph 9 of such provisions
        shall be deleted and shall be replaced in its entirety by the following:
        "(j) During the period from the date of the Terms Agreement to and
        including the Delivery Date, there shall have occurred no material
        adverse change and no development involving a prospective material
        adverse change in the financial condition or results of operations of
        the Company and its Subsidiaries taken as a whole."

                Terms defined in such Underwriting Agreement Basic Provisions
are used herein as therein defined.




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                Please accept this offer no later than 6:00 P.M., New York City
time, on January 22, 1999 by signing a copy of this Terms Agreement in the space
set forth below and returning the signed copy to us, or by sending us a written
acceptance in the following form:

                "We hereby accept your offer, set forth in the Terms Agreement
        dated January 22, 1999, to purchase the Underwritten Securities on the
        terms set forth therein."

                              MERRILL LYNCH, PIERCE, FENNER & SMITH
                                INCORPORATED,
                              GOLDMAN, SACHS & CO.,
                              SALOMON SMITH BARNEY INC.

                              By:  MERRILL LYNCH, PIERCE, FENNER & SMITH
                                   INCORPORATED

                                    BY /S/ Eric Wilson
                                      --------------------------------------
                                      (Merrill Lynch, Pierce, Fenner & Smith
                                      Incorporated)
                                      Name:  Eric Wilson
                                      Title: Managing Director

Accepted:

ARISTAR, INC.

By /s/ MARANGAL I. DOMINGO
  ----------------------------------
   Name: Marangal I. Domingo
   Title: Senior Vice President