EX-10.1



 





Exhibit 10.1









	 	 	 
	CONTACT:

	 	 
	 

	 	Stephen D. Axelrod, CFA
	Mitchell Cohen, CFO

	 	Alisa D. Steinberg (Media)
	Asta Funding, Inc.

	 	Wolfe Axelrod Weinberger Assoc. LLC
	(201) 567-5648

	 	(212) 370-4500; (212) 370-4505 (Fax)
	 

	 	steve@wolfeaxelrod.com
	 

	 	alisa@wolfeaxelrod.com






ASTA FUNDING COMPLETES PURCHASE OF $6.9 BILLION PORTFOLIO



ENGLEWOOD CLIFFS, NJ, March 5, 2007 — Asta Funding, Inc., (NASDAQ: ASFI), a leading consumer
receivable asset management and liquidation company, today announced that Palisades Acquisition
XVI, LLC (“Palisades XVI”), its indirect wholly-owned subsidiary, has closed on its definitive
agreement to purchase a portfolio of approximately $6.9 billion in face value receivables for a
purchase price of $300 million plus 20% of net payments after we recover 150% of the purchase price
plus our cost of funds. The portfolio is made up of predominantly credit card accounts and includes
accounts in collection litigation and accounts as to which the sellers have been awarded judgments
and other traditional charge-offs. The Company originally paid a $60 million deposit upon execution
of the contract on February 5, 2007 and funded an additional deposit of $15 million on February 16,
2007 using its existing credit facility, as modified on that date. The remaining $225 million was
paid in full, today, March 5, 2007, by borrowing under a new Receivables Financing Agreement
entered into by Palisades XVI with a major financial institution as the funding source, and
consists of debt with full recourse only to Palisades XVI, bearing an interest rate of
approximately 170 basis points over LIBOR. Asta has provided limited undertakings to support the
new credit facility.



Gary Stern, President and Chief Executive Officer of Asta Funding, commented, “It is rare that an
opportunity of this size and quality becomes available in the market. I am very pleased about the
closing of this transaction as it approximately doubles the size of our assets acquired for
liquidation on our balance sheet. We worked diligently to find the proper financing for this
purchase and believe we selected the best funding source for our shareholders and the Company. This
significant portfolio purchase not only validates our leadership in the debt buying industry, but
will further demonstrate our outsourcing strategy and our ability to absorb such a large purchase
without adding materially to our infrastructure. We are excited to begin servicing this portfolio
and believe it will build shareholder value in the near future.”




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Conference Call Details



Asta Funding will conduct a teleconference to discuss this transaction and to briefly discuss its
first quarter results for the period ended December 31, 2006 on Friday, March 9, 2007 at 10:30 a.m.
EST. To participate in the conference call please dial USA/Canada (888) 693-0944, International
(706) 679-0662 about 5-10 minutes prior to 10:30 am EST. Please refer to the Asta Funding earnings
teleconference ID # 1933846. A recording of the conference call will be available from 1:30 pm EST
March 9th through March 16th, by dialing USA/Canada (800) 642-1687,
International (706) 645-9291, conference ID # 1933846.




 





Based in Englewood Cliffs, NJ, Asta Funding, Inc., is a leading consumer receivable asset
management company that specializes in the purchase, management and liquidation of performing and
non-performing consumer receivables. For additional information, please visit our website at
http://www.astafunding.com.



Except for historical information contained herein, the matters set forth in this news release are
“forward-looking” statements (as defined in the Private Securities Litigation Reform Act of 1995.)
Although Asta Funding, Inc. believes the expectations reflected in such forward-looking statements
are based upon reasonable assumptions, there can be no assurance that its expectations will be
realized. Forward-looking statements involve certain risks and uncertainties that could cause
actual results to differ materially from Asta Funding, Inc.’s expectations. Factors that could
contribute to such differences include those identified in Asta Funding, Inc.’s Form 10-K for the
fiscal year ended September 30, 2006, Form 10-Q for the quarter ended December 31, 2006 and those
described from time to time in Asta Funding, Inc.’s other filings with the Securities and Exchange
Commission, news releases and other communications, including that the portfolio purchase described
in this press release may not be consistent with Asta’s initial valuation analysis, that the terms
of the new financing obtained, or the anticipated benefits of the portfolio purchase may not meet
Asta’s expectations, that Asta may experience operational difficulties in acquiring a portfolio of
this size, that Asta received only limited representations and warranties with respect to the
quality, quantity and characteristics of the portfolio and that there are other risks associated
with the portfolio. Asta Funding, Inc.’s reports with the Securities and Exchange Commission are
available free of charge through its website at http://www.astafunding.com.




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