SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 10, 1999
UACSC AUTO TRUSTS
(Exact name of registrant as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation)
333-70177 35-1937340
(Registration Number) (IRS Employer Identification No.)
9240 Bonita Beach Road
Suite 1109-A
Bonita Springs, Florida 34135
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (941) 948-1850
<PAGE>
Item 5. Other Events.
Computational Materials
-----------------------
On February 10, 1999, Computational Materials were distributed to
potential investors in connection with a proposed offering of
asset-backed certificates under Reg. No. 333-70177. Under the proposed
pooling and servicing agreement (the "Proposed Agreement"), UAC
Securitization Corporation ("UACSC") will act as the proposed
depositor and establish the UACSC 1999-A Auto Trust (the "Proposed
Trust") by selling and assigning the proposed trust property to the
trustee in exchange for certificates, each of which represents a
fractional and undivided interest in the Proposed Trust. Pursuant to
the Proposed Agreement, Union Acceptance Corporation will act as
servicer. Such Computational Materials are filed with this Current
Report on Form 8-K on the basis of the position of the Division of
Corporation Finance set forth in Kidder, Peabody Acceptance
Corporation I (available May 20, 1994), Public Securities Association
(available May 27, 1994), Public Securities Association (available
February 17, 1995) and subsequent related no-action letters.
Item 7. Financial Statements and Exhibits.
Exhibit
Number Description
------ -----------
99 Computational Materials
-2-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized in the City of Bonita Springs, State of
Florida, on February 12, 1999.
UAC SECURITIZATION CORPORATION
as Depositor (Registrant)
/s/ Leeanne Graziani
----------------------------------------
Leeanne Graziani
Vice President, Assistant Treasurer and
Secretary
Computational Materials
UACSC 1999-A Auto Trust
$61,200,000.00 Class A-1 Money Market Automobile Receivable Backed Certificates
$67,525,000.00 Class A-2 Automobile Receivable Backed Certificates
$96,050,000.00 Class A-3 Automobile Receivable Backed Certificates
$39,950,000.00 Class A-4 Automobile Receivable Backed Certificates
$55,820,134.82 Class A-5 Automobile Receivable Backed Certificates
Class I Interest Only Automobile Receivable Backed Certificates
UAC Securitization Corporation
Depositor
Union Acceptance Corporation
Servicer
Computational
Materials
The information contained in the attached computational materials (the
"Information") is preliminary and will be replaced by the prospectus supplement
and accompanying prospectus applicable to the UACSC 1999-A Auto Trust (the
"Offering Documents") and any other information subsequently filed with the
Securities and Exchange Commission. You should make your investment decision
with respect to the securities described in the Information based solely upon
the information contained in the Offering Documents.
These computational materials do not constitute an offer to sell or the
solicitation of an offer to buy and we will not sell the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold and no offer to buy will be accepted prior to the
delivery of the Offering Documents relating to the securities.
The Information is preliminary, limited in nature and subject to
completion or amendment. We do not claim that the securities will actually
perform as described in any scenario presented.
The Information has been prepared by the Depositor. None of NationsBanc
Montgomery Securities LLC ("NationsBanc Montgomery"), Bear, Stearns & Co. Inc.
("Bear Stearns" and together with NationsBanc Montgomery, the "Underwriters") or
any of their affiliates make any representation as to the accuracy or
completeness of the Information.
The Information addresses only certain aspects of the characteristics
of the securities and does not provide a complete assessment of the securities.
As such, the Information may not reflect the impact of all structural
characteristics of the securities. The assumptions underlying the Information,
including structure, Trust property and collateral, may be changed from time to
time to reflect changed circumstances.
<PAGE>
The data supporting the Information has been obtained from sources that
the Underwriters believe to be reliable, but the Underwriters do not guarantee
the accuracy of or computations based on such data. The Underwriters and their
affiliates may engage in transactions with the Depositor or its affiliates while
the Information is circulating. The Underwriters may act as principal in
transactions with you, and accordingly, you must determine the appropriateness
for you of such transactions and address any legal, tax, or accounting
considerations applicable to you. The Underwriters shall not be a fiduciary or
advisor, unless they have agreed in writing to receive compensation specifically
to act in such capacities. If you are subject to ERISA, the Information is being
furnished on the condition that it will not form a primary basis for any
investment decision.
Although a registration statement (including a form of prospectus)
relating to the securities described in this Information has been filed with the
Securities and Exchange Commission and is effective, the Offering Documents
relating to the securities described in this Information have not been filed
with the Securities and Exchange Commission. You must refer to the Offering
Documents for definitive information on any matter described in these
computational materials. Your investment decision should be based only on the
data in the Offering Documents. Offering Documents contain data that is current
as of the applicable publication dates and after publication may no longer be
complete or current. The Offering Documents may be updated by information
subsequently filed with the Securities and Exchange Commission.
You may obtain the Offering Documents by contacting the NationsBanc
Montgomery Syndicate Desk at (704) 386-9690 or the Bear Stearns Syndicate Desk
at (212) 272-4955.
<PAGE>
UACSC 1999-A Auto Trust
Computational Materials
Subject to Revision
Dated as of February 10, 1999
SUMMARY OF TERMS
The definitions or references to capitalized terms used in these
materials can be found on the pages indicated in the "Index of Terms" and
"Glossary" beginning on page 30 of these materials.
Issuer
The UACSC 1999-A Auto Trust (the "Trust") will issue the Certificates offered in
these materials.
Depositor
UAC Securitization Corporation (the "Depositor") is the depositor of the Trust.
In this capacity, the Depositor will transfer the automobile receivables and
related property to the Trust.
Servicer
Union Acceptance Corporation will act as the servicer of the Trust (in its
capacity as servicer, the "Servicer," otherwise "UAC"). In its role as Servicer,
UAC will receive and apply payments on the automobile receivables, service the
collection of the receivables and direct the trustee to make the appropriate
distributions to the certificateholders. The Servicer will receive a monthly
servicing fee as compensation for its services (the "Monthly Servicing Fee").
Trustee
Harris Trust and Savings Bank
The Certificates
The Trust will issue automobile receivable backed certificates on or about
February 23, 1999 (the "Closing Date") under the terms of a pooling and
servicing agreement among the Depositor, the Servicer and the Trustee (the
"Pooling and Servicing Agreement"). The "Certificates" will consist of the
following:
o _____% Class A-1 Money Market Automobile Receivable Backed Certificates
in the aggregate principal amount of $61,200,000.00 (the "Class A-1
Certificates");
o _____% Class A-2 Automobile Receivable Backed Certificates in the
aggregate principal amount of $67,525,000.00 (the "Class A-2
Certificates");
o _____% Class A-3 Automobile Receivable Backed Certificates in the
aggregate principal amount of $96,050,000.00 (the "Class A-3
Certificates");
<PAGE>
o _____% Class A-4 Automobile Receivable Backed Certificates in the
aggregate principal amount of $39,950,000.00 (the "Class A-4
Certificates");
o ______% Class A-5 Automobile Receivable Backed Certificates in the
aggregate principal amount of $55,820,134.82 (the "Class A-5
Certificates");
o Class I Interest Only Automobile Receivable Backed Certificates in the
Original Notional Principal Amount of $256,316,037.87 (the "Class I
Certificates"); and
o the Class IC Automobile Receivable Backed Certificate (the "Class IC
Certificate").
The Class IC Certificate will be issued to the Depositor and is not offered for
sale in this offering.
We are offering the Certificates, other than the Class IC Certificate, for sale
in these materials and we refer to these certificates offered for sale as the
"Offered Certificates."
Each of the Certificates will represent a fractional and undivided interest in
the Trust. The Trust assets will include:
o a pool of simple and precomputed interest installment sale and
installment loan contracts originated in various states in the United
States of America, secured by new and used automobiles, light trucks
and vans (the "Receivables");
o certain monies due in respect of the Receivables as of and after
January 31, 1999 (the "Cutoff Date");
o security interests in the related vehicles financed through the
Receivables (the "Financed Vehicles");
o funds on deposit in a certificate account and a spread account;
o any proceeds from claims on certain insurance policies relating to the
Financed Vehicles or the related obligors;
o any lender's single interest insurance policy;
o an unconditional and irrevocable insurance policy issued by MBIA
Insurance Corporation guaranteeing payments of principal and interest
on the Offered Certificates (the "Policy"); and
o certain rights under the Pooling and Servicing Agreement.
The Class A Certificates
The term "Class A Certificates" includes the Class A-1 Certificates, the Class
A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates and the
Class A-5 Certificates. We refer to the owners of the Class A Certificates in
these materials as the "Class A Certificateholders," and this term includes the
"Class A-1 Certificateholders," the "Class A-2 Certificateholders," the "Class
A-3 Certificateholders," the "Class A-4 Certificateholders" and the "Class A-5
Certificateholders."
<PAGE>
Interest on the Class A Certificates
The Trust will distribute interest on the eighth calendar day of each month or,
if such day is not a business day, on the next business day (each, a
"Distribution Date"), beginning March 8, 1999, to holders of record of the Class
A Certificates as of the day before the Distribution Date (the "Record Date").
However, if Definitive Certificates are issued, the Record Date will be the last
day of the calendar month immediately preceding the calendar month in which such
Distribution Date occurs.
The applicable pass-through rates for the Class A Certificates are:
o ______% for the Class A-1 Certificates (the "Class A-1 Pass-Through
Rate");
o ______% for the Class A-2 Certificates (the "Class A-2 Pass-Through
Rate");
o ______% for the Class A-3 Certificates (the "Class A-3 Pass-Through
Rate");
o ______% for the Class A-4 Certificates (the "Class A-4 Pass-Through
Rate"); and
o ______% for the Class A-5 Certificates (the "Class A-5 Pass-Through
Rate").
The Class A-5 Pass-Through Rate will be increased by 0.50% per annum after the
Clean-Up Call Date (as described under "--Increase of the Class A-5 Pass-Through
Rate").
Interest on the Class A-1 Certificates will be calculated on the basis of a
360-day year and the actual number of days from the previous Distribution Date
through the day before the related Distribution Date. Interest on all other
classes of Class A Certificates will be calculated on the basis of a 360-day
year consisting of twelve 30-day months. See "Yield and Prepayment
Considerations" in these materials.
Class A-1 Monthly Interest. Generally, the amount of interest distributable to
the Class A-1 Certificateholders on each Distribution Date is the product of:
(1) 1/360th of the pass-through rate for the Class A-1 Certificates;
(2) the number of days from the previous Distribution Date through the day
before the related Distribution Date; and
(3) the aggregate outstanding principal balance of the Class A-1
Certificates on the preceding Distribution Date (after giving effect to
all distributions to Class A Certificateholders on such date).
Monthly Interest for Other Class A Certificates. Generally, the amount of
interest distributable to each class of Class A Certificateholders (other than
the Class A-1 Certificateholders) on each Distribution Date is the product of:
(1) one-twelfth of the pass-through rate applicable to such class; and
(2) the aggregate outstanding principal balance of such class as of the
preceding Distribution Date (after giving effect to all distributions
to Class A Certificateholders on such date).
<PAGE>
The amount of interest distributable on the first Distribution Date of March 8,
1999 will be based upon the original principal balance of the applicable class
and will accrue from the Closing Date until the day before the first
Distribution Date (and in the case of all of the Class A Certificates other than
the Class A-1 Certificates, assuming that the month of the Closing Date has 30
days).
The amount of interest distributable to the Class A Certificateholders and the
Class I Certificateholders on any Distribution Date constitutes "Monthly
Interest."
Principal
The Trust will distribute principal on each Distribution Date to the Class A
Certificateholders of record as of the Record Date. Generally, the amount of
principal which will be distributed ("Monthly Principal") is equal to the
difference between the aggregate Certificate Balance as of the previous
Distribution Date (after giving effect to any distributions of principal made on
such Distribution Date) and the outstanding balance of the Receivables (the
"Pool Balance") on the last day of the preceding calendar month.
The aggregate outstanding principal balance of the Class A Certificates as of
the Closing Date is as follows:
o $61,200,000.00 for the Class A-1 Certificates (the "Class A-1
Certificate Balance");
o $67,525,000.00 for the Class A-2 Certificates (the "Class A-2
Certificate Balance");
o $96,050,000.00 for the Class A-3 Certificates (the "Class A-3
Certificate Balance");
o $39,950,000.00 for the Class A-4 Certificates (the "Class A-4
Certificate Balance"); and
o $55,820,134.82 for the Class A-5 Certificates (the "Class A-5
Certificate Balance").
The sum of the Class A-1 Certificate Balance, the Class A-2 Certificate Balance,
the Class A-3 Certificate Balance, the Class A-4 Certificate Balance and the
Class A-5 Certificate Balance will equal the "Certificate Balance."
The outstanding principal amount of any class of Class A Certificates will be
payable in full on the final scheduled Distribution Date applicable to that
class. The final scheduled Distribution Dates of the Class A Certificates are as
follows:
o March 8, 2000, for the Class A-1 Certificates (the "Class A-1 Final
Scheduled Distribution Date");
o January 8, 2002, for the Class A-2 Certificates (the "Class A-2 Final
Scheduled Distribution Date");
o September 8, 2003, for the Class A-3 Certificates (the "Class A-3 Final
Scheduled Distribution Date");
o June 8, 2004, for the Class A-4 Certificates (the "Class A-4 Final
Scheduled Distribution Date"); and
o September 8, 2006, for the Class A-5 Certificates (the "Class A-5 Final
Scheduled Distribution Date").
<PAGE>
Generally, principal will be distributed to the Class A Certificateholders in
the order of the numerical designation of each class of the Class A
Certificates, starting with the Class A-1 Certificates and ending with the Class
A-5 Certificates. For example, no principal will be distributed to the Class A-2
Certificateholders until the Class A-1 Certificate Balance has been reduced to
zero.
Since the rate of payment of principal of each class of Class A Certificates
depends upon the rate of payment of principal on the Receivables (including
voluntary prepayments and principal in respect of Defaulted Receivables and
Purchased Receivables), the final distribution in respect of each class of Class
A Certificates could occur significantly earlier than the respective final
scheduled distribution dates. See "Risk Factors -- You Will Bear the Risk of
Loss if there is a Default Under the Policy" in these materials.
The Class I Certificates
The Class I Certificates are interest only certificates which will not receive
any principal distributions. The pass-through rate for the Class I Certificates
is 0.80% per annum (the "Class I Pass-Through Rate"). Interest on the Class I
Certificates will accrue on the Notional Principal Amount (defined below) of the
Class I Certificates at the Class I Pass-Through Rate. The Notional Principal
Amount represents a designated notional principal component of the Receivables
(the "Notional Principal Amount"). The Notional Principal Amount is
$256,316,037.87 as of the Closing Date (the "Original Notional Principal
Amount") and shall be reduced on each Distribution Date as the Certificate
Balance is reduced as described below.
Interest on the Class I Certificates will be calculated on the basis of a
360-day year consisting of twelve 30-day months. Generally, the amount of
interest distributable to holders of Class I Certificates (the "Class I
Certificateholders") on each Distribution Date is the product of one-twelfth of
the Class I Pass-Through Rate and the Notional Principal Amount as of the
preceding Distribution Date (after giving effect to any reduction of the
Notional Principal Amount on such Distribution Date). The amount of interest
distributable on the first Distribution Date of March 8, 1999 will be based on
the Original Notional Principal Amount and will accrue from the Closing Date
until the day before the first Distribution Date. Such amount will also be
determined by assuming that the month of the Closing Date has 30 days. Class I
Certificateholders will not be entitled to any distributions after the Notional
Principal Amount has been reduced to zero.
Class I Notional Principal Amount
The Class I Certificates are interest-only certificates based upon a planned
amortization of the Notional Principal Amount of the Class I Certificates. We
intend this amortization feature to reduce the uncertainty to Class I
Certificateholders caused by prepayments on the Receivables. We base the
reduction in the Notional Principal Amount on a principal paydown schedule
rather than on the reduction in the actual principal balances of the
Receivables. We expect the interest payments on the Class I Certificates to come
from the excess of interest earned on the Receivables over Class A Monthly
Interest and the Monthly Servicing Fee. We divided the Certificate Balance into
two notional principal components, the "PAC Component" and the "Companion
Component," for purposes of calculating the Notional Principal Amount. The sum
of the PAC Component and the Companion Component at any time will equal the then
aggregate unpaid Certificate Balance at such time. The Notional Principal Amount
of the Class I Certificates will equal the principal balance of the PAC
Component at all times as such amount is calculated using the allocations of
principal payments described below.
<PAGE>
The Pooling and Servicing Agreement establishes the planned schedule for the
amortization of the Notional Principal Amount (the "Planned Notional Principal
Amount Schedule") and we provide the schedule to you in these materials under
"The Class I Certificates--Calculation of Notional Principal Amount." On each
Distribution Date, the amount of Monthly Principal allocated to Class A
Certificateholders will determine the reduction in the Notional Principal Amount
as follows:
(1) to the PAC Component in an amount up to the amount necessary to reduce
the amount thereof to the amount specified in the Planned Notional
Principal Amount Schedule (the "Planned Notional Principal Amount") for
such Distribution Date;
(2) to the Companion Component, until the outstanding amount is reduced to
zero; and
(3) to the PAC Component, without regard to the Planned Notional Principal
Amount.
The Notional Principal Amount of the Class I Certificates will be the same
amount as the outstanding amount of the PAC Component and will decline as the
PAC Component declines.
The Planned Notional Principal Amount Schedule is based on the assumption that
the Receivables prepay at a constant prepayment rate between 1.60% and 2.50% ABS
(which is an assumed constant rate of prepayments used in the ABS prepayment
model set forth in these materials). The yield to maturity of the Class I
Certificates will be sensitive to the rate and timing of principal payments
(including prepayments) on the Receivables and may fluctuate significantly
during the actual term of the Class I Certificates. If the Receivables prepay at
a constant rate within the range of 1.60% to 2.50% ABS, the PAC Component (and
the Notional Principal Amount of the Class I Certificates) will decline
according to the Planned Notional Principal Amount Schedule. If the Receivables
prepay at a constant rate higher than 2.50% ABS, the yield on the Class I
Certificates will be reduced because (1) the amount of the Companion Component
will be reduced to zero more quickly than scheduled, and (2) the amount of the
PAC Component (and the Notional Principal Amount) will decline more quickly than
provided in the Planned Notional Principal Amount Schedule. A rapid rate of
principal prepayments (including liquidations due to losses, repurchases and
other dispositions) will have a material negative effect on the yield to
maturity of the Class I Certificates.
The Planned Notional Principal Amount Schedule has been prepared on the basis of
certain assumptions, which are described in these materials under "The Class I
Certificates -- Class I Yield Considerations." You should fully consider the
risks associated with owning Class I Certificates, including the risk that a
rapid rate of prepayments could prevent you from recovering your initial
investment in the Class I Certificates. See "Risk Factors -- Prepayments May
Reduce the Yield on the Class I Certificates" and "Yield and Prepayment
Considerations --The Class I Certificates" in these materials.
Spread Account; Rights of Class IC Certificateholder
The Depositor will establish an account (the "Spread Account") on the Closing
Date for the benefit of the Class A Certificateholders, the Class I
Certificateholders and the Insurer. The Spread Account will hold the excess, if
any, of the collections on the Receivables over the amounts which the Trust is
required to distribute to the Class A Certificateholders, the Class I
Certificateholders, the Servicer and the Insurer. The amount of funds available
for distribution to Certificateholders on any Distribution Date ("Available
Funds") will consist of funds from the following sources:
<PAGE>
(1) payments received from obligors in respect of the Receivables (net of
any amount required to be deposited to the Payahead Account in respect
of Precomputed Receivables);
(2) any net withdrawal from the Payahead Account in respect of Precomputed
Receivables;
(3) interest earned on funds on deposit in the Certificate Account;
(4) liquidation proceeds received in respect of Receivables;
(5) advances received from the Servicer in respect of interest on certain
delinquent Receivables; and
(6) amounts received in respect of required repurchases or purchases of
Receivables by UAC or the Servicer.
The Trustee will withdraw funds from the Spread Account (up to the amount on
deposit in the account) and then draw on the Policy, if the amount of Available
Funds for any Distribution Date is not sufficient to pay:
(1) the amounts owed to the Servicer (including the Monthly Servicing Fee
and reimbursement for advances made by the Servicer to the Trust); and
(2) the required payments of
o Monthly Interest to the Class A Certificateholders and the
Class I Certificateholders, and
o Monthly Principal to the Class A Certificateholders.
If the amount on deposit in the Spread Account is zero, after any withdrawals
for the benefit of the Class A Certificateholders and the Class I
Certificateholders, and there is a default under the Policy, any remaining
losses on the Receivables will be borne directly pro rata by the Class A
Certificateholders (to the extent of the class or classes of Class A
Certificates which are outstanding at such time) and the Class I
Certificateholders. See "Risk Factors -- You Will Bear the Risk of Loss if there
is a Default Under the Policy" in these materials.
Any amount on deposit in the Spread Account on any Distribution Date in excess
of the Required Spread Amount (after all other required deposits to and
withdrawals from the Spread Account have been made) will be distributed to the
holder of the Class IC Certificate (the "Class IC Certificateholder"). Any such
distribution to the Class IC Certificateholder will no longer be an asset of the
Trust.
We intend for the amount on deposit in the Spread Account to grow over time to
the Required Spread Amount through the deposit of the excess collections, if
any, on the Receivables. However, we cannot assure you that the amount on
deposit in the Spread Account will actually grow to the Required Spread Amount.
The "Required Spread Amount" with respect to any Distribution Date will equal
the lesser of:
(1) 1.50% of the initial Pool Balance, or
(2) the Certificate Balance as of the previous Distribution Date (after
giving effect to all distributions of principal to Class A
Certificateholders on such date).
<PAGE>
If the average aggregate yield of the Receivables in excess of losses falls
below the levels set forth in the Insurance and Reimbursement Agreement, entered
into on the Closing Date among the Depositor, Union Acceptance Funding
Corporation ("UAFC"), UAC, in its individual capacity and as Servicer, and the
Insurer (the "Insurance Agreement"), the Required Spread Amount will be
increased to 4.50% of the Pool Balance. During an Event of Default or upon the
occurrence of certain other events described in the Insurance Agreement
generally involving the amount of losses on the Receivables, a failure of
performance by the Servicer or a material misrepresentation made by the Servicer
under the Pooling and Servicing Agreement or the Insurance Agreement, the
Required Spread Amount may be increased.
The Policy
The Depositor will obtain an irrevocable insurance policy (the "Policy") issued
by MBIA Insurance Corporation for the benefit of the Class A Certificateholders
and the Class I Certificateholders. Subject to the terms of the Policy, the
Insurer will unconditionally and irrevocably guarantee the payment of Monthly
Interest and Monthly Principal up to the Policy Amount. The Trustee will draw on
the Policy, up to the Policy Amount, if Available Funds and the amount on
deposit in the Spread Account (after paying amounts owed to the Servicer) are
not sufficient to fully distribute Monthly Interest and Monthly Principal. In
addition, the Policy will cover any amount distributed or required to be
distributed by the Trust to Class A Certificateholders and Class I
Certificateholders that is sought to be recovered as a voidable preference by a
trustee in bankruptcy of UAC, the Depositor or UAFC pursuant to the United
States Bankruptcy Code (11 U.S.C.), as amended, in accordance with a final
nonappealable order of a court having competent jurisdiction.
Policy Amount
The term "Policy Amount" means with respect to any Distribution Date:
(1) the sum of:
(A) the lesser of: (i) the Certificate Balance (after giving effect to
any distribution of Available Funds and any funds withdrawn from
the Spread Account to pay Monthly Principal on such Distribution
Date) and (ii) the Net Principal Policy Amount, plus
(B) Monthly Interest, plus
(C) the Monthly Servicing Fee;
less
(2) all amounts on deposit in the Spread Account on such Distribution Date
(after giving effect to any funds withdrawn from the Spread Account to
pay Monthly Principal on such Distribution Date).
"Net Principal Policy Amount" means the initial Certificate Balance minus all
amounts previously drawn on the Policy or withdrawn from the Spread Account with
respect to Monthly Principal.
<PAGE>
Insurer
MBIA Insurance Corporation is the "Insurer" and will guarantee the payment of
Monthly Interest and Monthly Principal under the terms of the Policy.
Legal Investment
The Class A-1 Certificates will be eligible securities for purchase by money
market funds under Rule 2a-7 of the Investment Company Act of 1940, as amended.
Optional Sale
The Class IC Certificateholder has the right to purchase all of the Receivables
as of the last day of any Collection Period on which (1) the Pool Balance is
equal to or less than 10% of the initial Certificate Balance and (2) the
Notional Principal Amount of the Class I Certificates is zero (or will be
reduced to zero on or before the related Distribution Date) (the "Optional
Sale"). The purchase price applicable to the Optional Sale will be equal to the
fair market value of the Receivables; provided that such amount is equal to or
greater than the sum of:
(1) 100% of the outstanding Certificate Balance,
(2) accrued and unpaid interest on the outstanding Certificate Balance at
the weighted average note rates of the Receivables less any payments
received but not applied to interest or principal, and
(3) any amounts due the Insurer.
Increase of the Class A-5 Pass-Through Rate
If the Class IC Certificateholder does not exercise its rights with respect to
the Optional Sale on the first Distribution Date that the Optional Sale is
permitted (the "Clean-Up Call Date"), the Class A-5 Pass-Through Rate will be
increased by 0.50% after the Clean-Up Call Date.
Tax Status
In the opinion of special tax counsel to the Depositor, the Trust will not be
treated as an association taxable as a corporation or as a "publicly traded
partnership" taxable as a corporation. The Trustee and the Certificateholders
will agree to treat the Trust as a partnership for federal income tax purposes.
As a partnership, the Trust will not be subject to federal income tax and the
Certificateholders will be required to report their respective shares of the
Trust's taxable income, deductions and other tax attributes.
Ratings
On the Closing Date, each class of Offered Certificates must be rated in the
highest applicable category by Moody's Investors Service, Inc. and Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. (each a
"Rating Agency" and collectively, the "Rating Agencies"). A security rating is
not a recommendation to buy, sell or hold securities and may be subject to
revision or withdrawal at any time by the assigning rating agency. See "Risk
Factors -- The Limitations of the Certificate Ratings" in these materials.
ERISA Considerations
The Offered Certificates may be eligible for purchase by employee benefit plans
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). Any benefit plan fiduciary considering the purchase of
Offered Certificates should, among other things, consult with experienced legal
counsel in determining whether all required conditions for such purchase have
been satisfied.
<PAGE>
RISK FACTORS
You should carefully consider the risk factors set forth below as well
as the other investment considerations described in these materials as you
decide whether to purchase the Offered Certificates.
Limited Resale of the Certificates There is currently no secondary
market for the Offered
Certificates. The Underwriters
currently intend to make a market
to enable resale of the Offered
Certificates, but are under no
obligation to do so. As such, we
cannot assure you that a secondary
market will develop for your
Offered Certificates or, if one
does develop, that such market will
provide you with liquidity of
investment or that it will continue
for the life of your Offered
Certificates.
The Certificates Are Obligations
of the Trust Only The Offered Certificates are
interests in the Trust only and do
not represent an interest in or
obligation of the Depositor, UAC or
any other party or governmental
body. Except for the Policy, the
Offered Certificates have not been
insured or guaranteed by any party
or governmental body. See "The
Insurer" in these materials.
Prepayments May Reduce the
Yield on the Class I Certificates If the Receivables prepay at a
constant rate within the range of
1.60% to 2.50% ABS assumed in
preparing the Planned Notional
Principal Amount Schedule, the
Notional Principal Amount will be
reduced in accordance with the
Planned Notional Principal Amount
Schedule. If the Receivables prepay
at a constant rate higher than
2.50% ABS, the Notional Principal
Amount will be reduced more quickly
than provided in the Planned
Notional Principal Amount Schedule
and will reduce the yield of the
Class I Certificates. A rapid rate
of principal prepayments will have
a material negative effect on the
yield to maturity of the Class I
Certificates. You should fully
consider the risks associated with
owning Class I Certificates,
including the risk that a rapid
rate of prepayments could prevent
you from recovering your initial
investment in the Class I
Certificates. See "Yield and
Prepayment Considerations -- The
Class I Certificates" in these
materials.
<PAGE>
Spread Account Limitations The Trustee will withdraw funds
from the Spread Account, up to the
full balance of the funds on
deposit in such account, if the
amount of Available Funds on any
Distribution Date is not sufficient
to distribute Monthly Interest and
Monthly Principal (after payment of
the Monthly Servicing Fee) to you.
The amount on deposit in the Spread
Account may increase over time to
an amount equal to the Required
Spread Amount. We cannot assure you
that such growth will occur or that
the balance in the Spread Account
will always be sufficient to assure
payment in full of Monthly Interest
and Monthly Principal. The Trustee
will withdraw funds from the Spread
Account if the amount of Available
Funds (after paying amounts owed to
the Servicer) is not sufficient to
fully distribute Monthly Interest
and Monthly Principal on any
Distribution Date. If the amount on
deposit in the Spread Account is
reduced to zero (after giving
effect to all deposits and
withdrawals from the Spread
Account), the Trustee will then
draw on the Policy, up to the
Policy Amount, in an amount equal
to any remaining shortfall in
respect of Monthly Interest and
Monthly Principal.
You Will Bear the Risk of Loss if there
is a Default Under the Policy If the Spread Account is reduced to
zero and the Insurer defaults under
the Policy, the Trust will depend
solely on payments on and proceeds
from the Receivables to make
distributions on the Offered
Certificates. The Insurer will
default under the Policy if it
fails to pay any required amount to
the Trust when due, for any reason,
including the insolvency of the
Insurer.
If the Trust does not have
sufficient funds to fully
distribute the required
distributions of Monthly Interest
and Monthly Principal during a
default by the Insurer,
distributions on the Offered
Certificates will be made pro rata
based on the amounts to which Class
A Certificateholders of each class
and the Class I Certificateholders
are entitled. In such event, you
would incur a loss which you may
not recover from subsequent
collections on the Receivables or
from the Insurer. See "The
Receivables Pool -- Delinquencies
and Net Losses" and "-- Delinquency
and Credit Loss Experience" in
these materials.
<PAGE>
The Limitations of the
Certificate Ratings On the Closing Date, each class of
Offered Certificates must be rated
in the highest applicable category
by the Rating Agencies. Such
ratings will reflect only the views
of the relevant rating agency. We
cannot assure you that any such
rating will continue for any period
of time or that any rating will not
be revised or withdrawn entirely by
such rating agency if, in its
judgment, circumstances so warrant.
A revision or withdrawal of such
rating may have an adverse effect
on the liquidity and market price
of your Offered Certificates. A
security rating is not a
recommendation to buy, sell or hold
securities.
<PAGE>
FORMATION OF THE TRUST
The Depositor will establish the Trust by assigning the Trust assets to
the Trustee in exchange for the Certificates. The Depositor will sell the
Offered Certificates and retain the Class IC Certificate. UAC will be
responsible for servicing the Receivables pursuant to the Pooling and Servicing
Agreement and will be compensated for acting as the Servicer. To facilitate
servicing and to minimize administrative burden and expense, the Servicer will
be appointed custodian of the Receivables by the Trustee. However, the Servicer
will not stamp the Receivables to reflect the sale and assignment of the
Receivables to the Trust or make any notation of the Trust's lien on the
certificates of title of the Financed Vehicles. In the absence of such notation
on the certificates of title, the Trustee may not have perfected security
interests in the Financed Vehicles securing the Receivables. Under the terms of
the Pooling and Servicing Agreement, UAC may delegate its duties as Servicer and
custodian; however, any such delegation will not relieve UAC of its liability
and responsibility with respect to such duties.
The Depositor will establish the Spread Account for the benefit of the
Class A Certificateholders, the Class I Certificateholders and the Insurer and
will obtain the Policy. The Trustee will draw on the Policy, up to the Policy
Amount, if Available Funds and the amount on deposit in the Spread Account
(after paying amounts owed to the Servicer) are not sufficient to fully
distribute Monthly Interest and Monthly Principal. If the Spread Account is
reduced to zero and there is a default under the Policy, the Trust will look
only to the obligors on the Receivables and the proceeds from the repossession
and sale of Financed Vehicles that secure Defaulted Receivables for
distributions of interest and principal on the Class A Certificates and
distributions of interest on the Class I Certificates. In such event, certain
factors, such as the Trustee's not having perfected security interests in some
of the Financed Vehicles, may affect the Trust's ability to realize on the
collateral securing the Receivables, and thus may reduce the proceeds to be
distributed to the Class A Certificateholders and the Class I
Certificateholders.
THE RECEIVABLES POOL
The Receivables were selected from the portfolio of UAFC for purchase
by the Depositor according to several criteria, including that each Receivable:
o has an original number of payments of not more than 84 payments and not
less than twelve payments (except that approximately 0.99% of the
aggregate principal balance of the Receivables as of the Cutoff Date
consist of Modified Receivables which have been amended or modified
after origination to provide that the number of payments from the time
of origination to maturity may exceed 84 payments);
o has a remaining maturity of not more than 84 months and not less than
three months;
o provides for level monthly payments that fully amortize the amount
financed over the original term; and
o has a contract rate of interest (exclusive of prepaid finance charges)
of not less than 4.95%.
The weighted average remaining maturity of the Receivables is
approximately 71 months as of the Cutoff Date.
<PAGE>
Approximately 0.93% of the aggregate principal balance of the
Receivables as of the Cutoff Date were selected from the "non-prime" or "Tier
II" portfolio of UAFC (the "Tier II Receivables").
See "-- Delinquency and Credit Loss Experience."
Approximately 98.83% of the aggregate principal balance of the
Receivables as of the Cutoff Date are simple interest contracts which provide
for equal monthly payments. Approximately 1.17% of the aggregate principal
balance of the Receivables as of the Cutoff Date are Precomputed Receivables
originated in the State of California. All of such Precomputed Receivables are
rule of 78's receivables. Approximately 27.05% of the aggregate principal
balance of the Receivables as of the Cutoff Date represent financing of new
vehicles; the remainder of the Receivables represent financing of used vehicles.
Receivables representing more than 10% of the aggregate principal
balance of the Receivables as of the Cutoff Date were originated in the States
of North Carolina and Texas. The performance of the Receivables in the aggregate
could be adversely affected in particular by the development of adverse economic
conditions in such states.
Composition of the Receivables as of the Cutoff Date
<TABLE>
<CAPTION>
Weighted
Aggregate Original Average
Number of Principal Principal Contract
Receivables Balance Balance Rate
----------- ------- ------- ----
<S> <C> <C> <C> <C>
New Automobiles and Light-Duty Trucks............ 3,879 $ 80,855,146.88 $ 82,494,699.00 12.03%
Used Automobiles and Light-Duty Trucks........... 14,824 214,138,411.15 217,938,222.84 13.36%
New Vans (1)..................................... 249 5,860,098.83 6,021,264.37 11.71%
Used Vans (1).................................... 1,311 19,691,477.96 20,146,692.91 13.28%
------ --------------- --------------- -----
All Receivables.................................. 20,263 $320,545,134.82 $326,600,879.12 12.99%
====== =============== =============== =====
</TABLE>
<TABLE>
<CAPTION>
Weighted Weighted Percent
Average Average of Aggregate
Remaining Original Principal
Term(2) Term(2) Balance(3)
------- ------- ----------
<S> <C> <C> <C>
New Automobiles and Light-Duty Trucks.......... 76.1 mos. 78.0 mos. 25.22%
Used Automobiles and Light-Duty Trucks......... 69.7 71.4 66.80
New Vans (1)................................... 76.9 79.4 1.83
Used Vans (1).................................. 70.5 72.5 6.14
---- ---- ------
All Receivables................................ 71.5 mos. 73.3 mos. 100.00%
==== ==== ======
</TABLE>
(1) References to vans include minivans and van conversions.
(2) Based on scheduled maturity and assuming no prepayments of the Receivables.
(3) Sum may not equal 100% due to rounding.
<PAGE>
Distribution of the Receivables by Remaining Term as of the Cutoff Date
<TABLE>
<CAPTION>
Percent Percent
of Total Aggregate of Aggregate
Remaining Number of Number of Principal Principal
Term Range Receivables Receivables (1) Balance Balance(1)
---------- ----------- --------------- ------- ----------
<S> <C> <C> <C> <C>
1 to 12 months........... 68 0.34% $ 170,571.31 0.05%
13 to 24 months........... 240 1.18 1,133,685.87 0.35
25 to 36 months........... 568 2.80 3,716,625.13 1.16
37 to 48 months........... 1,313 6.48 12,402,325.26 3.87
49 to 60 months........... 3,633 17.93 47,853,483.90 14.93
61 to 72 months........... 6,627 32.70 105,498,306.11 32.91
73 to 84 months........... 7,814 38.56 149,770,137.24 46.72
------ ------ --------------- ------
Total........... 20,263 100.00% $320,545,134.82 100.00%
====== ====== =============== ======
</TABLE>
(1) Sum may not equal 100% due to rounding.
Geographic Distribution of the Receivables as of the Cutoff Date
<TABLE>
<CAPTION>
Percent Percent
of Total Aggregate of Aggregate
Number of Number of Principal Principal
State (1) (2) Receivables Receivables (3) Balance Balance (3)
------------- ----------- --------------- ------- -----------
<S> <C> <C> <C> <C>
Arizona...................... 773 3.81% $ 12,561,302.86 3.92%
California................... 1,570 7.75 24,882,237.10 7.76
Colorado..................... 381 1.88 5,748,739.36 1.79
Florida...................... 1,503 7.42 23,070,001.17 7.20
Georgia...................... 1,036 5.11 17,203,765.67 5.37
Idaho........................ 50 0.25 707,933.63 0.22
Illinois..................... 1,554 7.67 23,302,590.42 7.27
Indiana...................... 574 2.83 8,440,385.37 2.63
Iowa ........................ 615 3.04 9,377,819.45 2.93
Kansas....................... 213 1.05 3,346,976.29 1.04
Kentucky..................... 155 0.76 2,242,328.42 0.70
Maryland..................... 272 1.34 4,340,334.11 1.35
Massachusetts................ 542 2.67 8,588,713.54 2.68
Michigan..................... 463 2.28 7,309,583.87 2.28
Minnesota.................... 395 1.95 5,884,936.81 1.84
Missouri..................... 401 1.98 5,972,463.43 1.86
Nebraska..................... 177 0.87 2,421,762.18 0.76
Nevada....................... 108 0.53 1,881,952.31 0.59
New Mexico................... 53 0.26 900,538.03 0.28
North Carolina............... 2,400 11.84 39,008,903.54 12.17
Ohio ........................ 977 4.82 13,651,443.80 4.26
Oklahoma..................... 662 3.27 9,935,256.38 3.10
Oregon....................... 46 0.23 753,384.45 0.24
Pennsylvania................. 85 0.42 1,235,839.59 0.39
South Carolina............... 791 3.90 12,693,200.23 3.96
South Dakota................. 9 0.04 114,644.81 0.04
Tennessee.................... 631 3.11 10,512,933.43 3.28
Texas........................ 2,291 11.31 40,947,991.64 12.77
Utah ........................ 118 0.58 2,034,708.31 0.63
Virginia..................... 1,008 4.97 15,416,401.58 4.81
Washington................... 88 0.43 1,651,700.52 0.52
Wisconsin.................... 322 1.59 4,404,362.52 1.37
------ ------ --------------- ------
Total............... 20,263 100.00% $320,545,134.82 100.00%
====== ====== =============== ======
</TABLE>
(1) Based on address of the Dealer selling the related Financed Vehicle.
(2) Receivables originated in Ohio were solicited by Dealers for direct
financing by UAC or the Predecessor. All other Receivables were originated
by Dealers and purchased from such Dealers by UAC or the Predecessor.
(3) Sum may not equal 100% due to rounding.
<PAGE>
Distribution of the Receivables by Financed Vehicle Model
Year as of the Cutoff Date
<TABLE>
<CAPTION>
Percent Percent
of Total Aggregate of Aggregate
Model Number of Number of Principal Principal
Year Receivables Receivables(1) Balance Balance(1)
---- ----------- -------------- ------- ----------
<S> <C> <C> <C> <C>
1985 and earlier..................... 7 0.03% $ 41,159.46 0.01%
1986................................. 14 0.07 54,732.06 0.02
1987................................. 14 0.07 59,784.39 0.02
1988................................. 28 0.14 136,008.22 0.04
1989................................. 115 0.57 694,456.38 0.22
1990................................. 379 1.87 2,707,417.96 0.84
1991................................. 547 2.70 4,353,163.83 1.36
1992................................. 876 4.32 8,301,993.24 2.59
1993................................. 1,513 7.47 16,179,232.33 5.05
1994................................. 2,156 10.64 27,177,992.78 8.48
1995................................. 3,136 15.48 45,994,183.34 14.35
1996................................. 2,834 13.99 45,994,368.56 14.35
1997................................. 2,682 13.24 46,625,770.41 14.55
1998................................. 3,335 16.46 64,698,897.92 20.18
1999................................. 2,627 12.96 57,525,973.94 17.95
------ ------ ---------------- ------
Total................. 20,263 100.00% $ 320,545,134.82 100.00%
====== ====== ================ ======
</TABLE>
(1) Sum may not equal 100% due to rounding.
Distribution of the Receivables by Contract Rate as of the Cutoff Date
<TABLE>
<CAPTION>
Percent Percent
of Total Aggregate of Aggregate
Number of Number of Principal Principal
Contract Rate Range Receivables Receivables(1) Balance Balance(1)
- ------------------- ----------- -------------- ------- ----------
<S> <C> <C> <C> <C>
Less than 7.000%...................... 53 0.26% $ 814,471.31 0.25%
7.000 to 7.999%...................... 130 0.64 2,104,458.49 0.66
8.000 to 8.999%...................... 322 1.59 5,528,168.58 1.72
9.000 to 9.999%...................... 854 4.21 14,599,253.30 4.55
10.000 to 10.999%...................... 1,800 8.88 30,699,645.35 9.58
11.000 to 11.999%...................... 3,028 14.94 51,465,535.13 16.06
12.000 to 12.999%...................... 4,227 20.86 69,730,143.40 21.75
13.000 to 13.999%...................... 3,792 18.71 59,255,245.91 18.49
14.000 to 14.999%...................... 2,612 12.89 38,192,185.54 11.91
15.000 to 15.999%...................... 1,559 7.69 21,926,414.80 6.84
16.000 to 16.999%...................... 856 4.22 12,252,234.96 3.82
17.000 to 17.999%...................... 419 2.07 5,900,872.83 1.84
18.000 to 18.999%...................... 522 2.58 7,196,870.14 2.25
19.000 to 19.999%...................... 42 0.21 452,650.66 0.14
20.000 to 20.999%...................... 28 0.14 271,164.68 0.08
21.000 to 21.999%...................... 14 0.07 126,307.35 0.04
22.000 to 22.999%...................... 3 0.01 14,424.96 0.00
23.000 to 23.999%...................... 1 0.00 6,161.67 0.00
24.000 to 24.999%...................... 1 0.00 8,925.76 0.00
------ ------ --------------- ------
Total...................... 20,263 100.00% $320,545,134.82 100.00%
====== ====== =============== ======
</TABLE>
(1) Sum may not equal 100% due to rounding.
<PAGE>
Delinquency and Credit Loss Experience
As indicated in the foregoing delinquency experience table, delinquency
rates for UAC's prime automobile portfolio based upon outstanding balances of
receivables 30 days past due and over decreased to 3.04% at December 31, 1998
compared to 3.07% and 3.94% at June 30, 1998 and December 31, 1997,
respectively.
As indicated in the foregoing credit loss experience table, net credit
losses on UAC's prime automobile portfolio totaled approximately $26.5 million
for the six months ended December 31, 1998, or 2.46% (annualized) of the average
servicing portfolio, compared to $28.8 million, or 3.03% (annualized) for the
six months ended December 31, 1997. For the year ended June 30, 1998, net credit
losses on UAC's prime automobile portfolio totaled approximately $53.8 million
or 2.80% of the average servicing portfolio.
From September 30, 1997 through December 31, 1998, UAC has experienced
steady improvement in its delinquency and credit loss performance. UAC
attributes the improvement to strategic changes in its origination and
collection departments. The efforts in the origination department include:
o implementing tighter credit standards in March, 1997;
o developing quality control procedures that rank a prospective obligor
by credit score and by predetermined debt and income ratios;
o growing the portfolio with quality obligors through dealer development
and dealer expansion;
o increasing the staff in the origination department; and
o expanding the origination department's hours of service.
The collection department's efforts to improve delinquency and credit loss
performance since September 30, 1997 include:
o restructuring the collectors to form specialized sub-departments of
collectors for auxiliary functions such as skip tracing and high risk
accounts;
o initiating collection calls earlier in the delinquency process through
the use of a power dialer;
o targeting higher risk obligors through the use of quarterly updated
credit scores; and
o increasing collection efforts on charged-off accounts.
<PAGE>
Recoveries as a percentage of gross charge-offs decreased slightly to
38.28% for the six months ended December 31, 1998, compared to 38.41% for the
year ended June 30, 1998. On a year to year comparison, recovery rates improved
to 38.28% for the six months ended December 31, 1998, compared to 36.68% for the
six months ended December 31, 1997. In an effort to improve recovery rates, UAC
opened a franchised new car dealership in Indianapolis in July, 1998 and is
retailing a portion of its repossessed automobiles through the dealership. UAC
expects to continue this method of disposing of repossessions and strictly
monitor the rest of its repossession and resale process. UAC believes that these
efforts should improve the recovery rate. Although the overall recovery
percentage remains below UAC's expectations, recovery rates for repossessed
automobiles sold by UAC's retail operations have been significantly higher than
recovery rates on vehicles sold at auction. However, only 15% of all repossessed
automobiles sold by UAC during the last six months were sold through its new
retail operation.
UAC's non-prime lending began in 1994 and was replaced by UAC's "Tier
II" lending on March 1, 1998. The majority of the Tier II Receivables were
originated under UAC's Tier II lending from applications that did not qualify
for credit under UAC's "Tier I" lending. Although it is too early to determine
actual trends with respect to delinquency and credit losses of the Tier II
Receivables, UAC believes that the rate of delinquency and credit loss
associated with the Tier II Receivables will more closely follow the experience
of UAC's non-prime portfolio rather than the prime or Tier I portfolio which is
set forth on the preceding page. At December 31, 1998, UAC's non-prime servicing
portfolio consisted of approximately $66.4 million in receivables and had a
delinquency rate based upon outstanding balances of receivables 30 days past due
and over of 9.66% compared to 8.14% and 8.29% at September 30, 1998 and June 30,
1998, respectively. For the six months ended December 31, 1998, the credit
losses on the non-prime portfolio were 7.32% (annualized) of the average
non-prime servicing portfolio, compared to 8.18% (annualized) for the quarter
ended September 30, 1998 and 7.67% for the year ended June 30, 1998. As the Tier
II Receivables account for approximately 0.93% of the Receivables as of the
Cutoff Date, UAC believes that the credit quality of the Tier II Receivables
will not affect the credit quality of the Receivables as a whole in a materially
adverse manner. UAC ceased originating Tier II Receivables in January, 1999.
UAC's expectations with respect to delinquency and credit loss trends
constitute forward-looking statements and are subject to important factors that
could cause actual results to differ materially from those projected by UAC.
Such factors include, but are not limited to, general economic factors affecting
obligors' abilities to make timely payments on their indebtedness such as
employment status, rates of consumer bankruptcy, consumer debt levels generally
and the interest rates applicable thereto. In addition, credit losses are
affected by UAC's ability to realize on recoveries of repossessed vehicles,
including, but not limited to, the market for used cars at any given time.
WEIGHTED AVERAGE LIFE OF THE CLASS A CERTIFICATES
Because the rate of payment on principal of the Class A Certificates
depends primarily on the rate of payment (including voluntary prepayments and
principal in respect of Defaulted Receivables and Purchased Receivables) of the
principal balance of the Receivables, final payment on each class of Class A
Certificates could occur much earlier than the applicable final scheduled
Distribution Date. You will bear the risk of being able to reinvest early
principal payments on the Class A Certificates at yields at least equal to the
yield on your Class A Certificates.
<PAGE>
Prepayments on retail installment sale contracts, such as the
Receivables, can be measured relative to a prepayment standard or model. The
model used in these materials is the Absolute Prepayment Model ("ABS"). The ABS
model represents an assumed rate of prepayment each month relative to the
original number of receivables in a pool. The ABS model further assumes that all
of the receivables are the same size, amortize at the same rate and that each
receivable will be paid as scheduled or will be prepaid in full. For example, in
a pool of receivables originally containing 100 receivables, a 1% ABS rate means
that one receivable prepays in full each month. The ABS model, like any
prepayment model, does not claim to be either a historical description of
prepayment experience or a prediction of the anticipated rate of prepayment.
The tables on pages 20 to 22 have been prepared on the basis of certain
assumptions, including that:
o the Receivables prepay in full at the specified monthly ABS;
o each scheduled payment on the Receivables is made on the last day of
each Collection Period and includes a full month of interest;
o distributions on the Class A Certificates are paid in cash on each
Distribution Date commencing March 8, 1999 and on the eighth calendar
day of each subsequent month;
o the Closing Date occurs on February 23, 1999;
o no defaults or delinquencies in the payment of any of the Receivables
occur;
o no Receivables are repurchased due to a breach of any representation or
warranty or for any other reason; and
o the Class IC Certificateholder exercises its rights with respect to the
Optional Sale on the first possible Distribution Date.
The tables indicate the projected weighted average life of each class of Class A
Certificates and sets forth the percentage of the initial Certificate Balance of
each class of Class A Certificates that is projected to be outstanding after
each of the Distribution Dates shown at specified ABS percentages. The tables
also assume that the Receivables have been aggregated into four hypothetical
pools with all of the Receivables within each such pool having the
characteristics described below.
<TABLE>
<CAPTION>
Weighted Average Weighted Average
Cutoff Date Weighted Average Original Term to Remaining Term to
Pool Principal Balance Note Rate Maturity (in Months) Maturity (in Months)
- ---- ----------------- --------- -------------------- --------------------
<S> <C> <C> <C> <C>
1 $ 15,139,074.32 12.962% 43 42
2 44,292,334.47 12.811 59 58
3 100,818,544.82 12.923 70 69
4 160,295,181.21 13.076 82 80
----------------- ------
Total $ 320,545,134.82 12.986%
================= ======
</TABLE>
<PAGE>
The information included in the following tables consists of
forward-looking statements and involves risks and uncertainties that could cause
actual results to differ materially from those in the forward-looking
statements. The actual characteristics and performance of the Receivables will
differ from the assumptions used in constructing the tables on pages 20 to 22.
We have provided these hypothetical illustrations using the assumptions listed
above to give you a general illustration of how the principal balances of the
Class A Certificates may decline. However, it is highly unlikely that the
Receivables will prepay at a constant ABS until maturity or that all of the
Receivables will prepay at the same ABS. In addition, the diverse terms of
Receivables within each of the four hypothetical pools could produce slower or
faster rates of principal distributions than indicated in the table at the
various specified ABS rates. Any difference between such hypothetical
assumptions, the actual characteristics, performance and prepayment experience
of the Receivables will affect the percentages of initial Certificate Balances
outstanding over time and the weighted average lives of the Class A
Certificates.
================================================================================
Important notice regarding calculation of the
weighted average life and the assumptions
upon which the tables on pages 20 to 22 are based
The weighted average life of a Class A Certificate is determined by:
(a) multiplying the amount of each principal payment on the applicable
Class A Certificate by the number of years from the assumed Closing Date to
the related Distribution Date, (b) adding the results, and (c) dividing the
sum by the related initial Certificate Balance of such Class A Certificate.
The tables on pages 20 to 22 have been prepared based on (and should be
read in conjunction with) the assumptions described on pages 18 and 19
(including the assumptions regarding the characteristics and performance of
the Receivables, which will differ from the actual characteristics and
performance of the Receivables).
================================================================================
<PAGE>
<TABLE>
<CAPTION>
Percent of Initial Certificate Balance at Various ABS Percentages (1)
Class A-1 Certificates Class A-2 Certificates
----------------------------------------- -----------------------------------------
Distribution Date 1.0% 1.4% 1.6% 1.8% 2.5% 1.0% 1.4% 1.6% 1.8% 2.5%
- ----------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Closing Date........ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
1 March, 1999......... 89.7% 87.5% 86.4% 85.3% 81.5% 100.0% 100.0% 100.0% 100.0% 100.0%
2 April, 1999......... 79.4% 75.1% 73.0% 70.8% 63.1% 100.0% 100.0% 100.0% 100.0% 100.0%
3 May, 1999........... 69.2% 62.8% 59.6% 56.4% 45.0% 100.0% 100.0% 100.0% 100.0% 100.0%
4 June, 1999.......... 59.0% 50.6% 46.4% 42.2% 27.1% 100.0% 100.0% 100.0% 100.0% 100.0%
5 July, 1999.......... 48.8% 38.5% 33.3% 28.1% 9.4% 100.0% 100.0% 100.0% 100.0% 100.0%
6 August, 1999........ 38.8% 26.5% 20.3% 14.1% 0.0% 100.0% 100.0% 100.0% 100.0% 92.7%
7 September, 1999..... 28.7% 14.6% 7.5% 0.3% 0.0% 100.0% 100.0% 100.0% 100.0% 77.1%
8 October, 1999....... 18.8% 2.8% 0.0% 0.0% 0.0% 100.0% 100.0% 95.2% 87.9% 61.7%
9 November, 1999...... 8.9% 0.0% 0.0% 0.0% 0.0% 100.0% 91.9% 83.8% 75.6% 46.6%
10 December, 1999...... 0.0% 0.0% 0.0% 0.0% 0.0% 99.1% 81.4% 72.5% 63.5% 31.6%
11 January, 2000....... 0.0% 0.0% 0.0% 0.0% 0.0% 90.2% 71.0% 61.3% 51.5% 16.9%
12 February, 2000...... 0.0% 0.0% 0.0% 0.0% 0.0% 81.4% 60.7% 50.2% 39.7% 2.3%
13 March, 2000......... 0.0% 0.0% 0.0% 0.0% 0.0% 72.7% 50.5% 39.3% 28.0% 0.0%
14 April, 2000......... 0.0% 0.0% 0.0% 0.0% 0.0% 64.0% 40.4% 28.5% 16.5% 0.0%
15 May, 2000........... 0.0% 0.0% 0.0% 0.0% 0.0% 55.3% 30.4% 17.8% 5.2% 0.0%
16 June, 2000.......... 0.0% 0.0% 0.0% 0.0% 0.0% 46.7% 20.5% 7.3% 0.0% 0.0%
17 July, 2000.......... 0.0% 0.0% 0.0% 0.0% 0.0% 38.2% 10.7% 0.0% 0.0% 0.0%
18 August, 2000........ 0.0% 0.0% 0.0% 0.0% 0.0% 29.7% 1.1% 0.0% 0.0% 0.0%
19 September, 2000..... 0.0% 0.0% 0.0% 0.0% 0.0% 21.3% 0.0% 0.0% 0.0% 0.0%
20 October, 2000....... 0.0% 0.0% 0.0% 0.0% 0.0% 13.0% 0.0% 0.0% 0.0% 0.0%
21 November, 2000...... 0.0% 0.0% 0.0% 0.0% 0.0% 4.7% 0.0% 0.0% 0.0% 0.0%
22 December, 2000...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
23 January, 2001....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
24 February, 2001...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
25 March, 2001......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
26 April, 2001......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
27 May, 2001........... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
28 June, 2001.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
29 July, 2001.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
30 August, 2001........ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
31 September, 2001..... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
32 October, 2001....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
33 November, 2001...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
34 December, 2001...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
35 January, 2002....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
36 February, 2002...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
37 March, 2002......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
38 April, 2002......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
39 May, 2002........... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
40 June, 2002.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
41 July, 2002.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
42 August, 2002........ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
43 September, 2002..... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
44 October, 2002....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
45 November, 2002...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
46 December, 2002...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
47 January, 2003....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
48 February, 2003...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
49 March, 2003......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
50 April, 2003......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
51 May, 2003........... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
52 June, 2003.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
53 July, 2003.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
54 August, 2003........ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
55 September, 2003..... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
56 October, 2003....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
57 November, 2003...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
58 December, 2003...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
59 January, 2004....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Weighted Average Life
(in years) ..... 0.41 0.34 0.31 0.29 0.23 1.31 1.09 1.00 0.93 0.73
(1) See the important notice on page 19 of these materials regarding calculation of the weighted average life and the assumptions
upon which these tables are based.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Percent of Initial Certificate Balance at Various ABS Percentages (1)
Class A-3 Certificates Class A-4 Certificates
----------------------------------------- -----------------------------------------
Distribution Date 1.0% 1.4% 1.6% 1.8% 2.5% 1.0% 1.4% 1.6% 1.8% 2.5%
- ----------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Closing Date........ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
1 March, 1999......... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
2 April, 1999......... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
3 May, 1999........... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
4 June, 1999.......... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
5 July, 1999.......... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
6 August, 1999........ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
7 September, 1999..... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
8 October, 1999....... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
9 November, 1999...... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
10 December, 1999...... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
11 January, 2000....... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
12 February, 2000...... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
13 March, 2000......... 100.0% 100.0% 100.0% 100.0% 91.6% 100.0% 100.0% 100.0% 100.0% 100.0%
14 April, 2000......... 100.0% 100.0% 100.0% 100.0% 81.7% 100.0% 100.0% 100.0% 100.0% 100.0%
15 May, 2000........... 100.0% 100.0% 100.0% 100.0% 72.0% 100.0% 100.0% 100.0% 100.0% 100.0%
16 June, 2000.......... 100.0% 100.0% 100.0% 95.7% 62.5% 100.0% 100.0% 100.0% 100.0% 100.0%
17 July, 2000.......... 100.0% 100.0% 97.8% 88.0% 53.1% 100.0% 100.0% 100.0% 100.0% 100.0%
18 August, 2000........ 100.0% 100.0% 90.6% 80.3% 43.9% 100.0% 100.0% 100.0% 100.0% 100.0%
19 September, 2000..... 100.0% 94.0% 83.4% 72.8% 34.9% 100.0% 100.0% 100.0% 100.0% 100.0%
20 October, 2000....... 100.0% 87.4% 76.4% 65.4% 26.1% 100.0% 100.0% 100.0% 100.0% 100.0%
21 November, 2000...... 100.0% 80.8% 69.5% 58.1% 17.5% 100.0% 100.0% 100.0% 100.0% 100.0%
22 December, 2000...... 97.6% 74.4% 62.7% 50.9% 9.0% 100.0% 100.0% 100.0% 100.0% 100.0%
23 January, 2001....... 91.9% 68.0% 55.9% 43.8% 0.8% 100.0% 100.0% 100.0% 100.0% 100.0%
24 February, 2001...... 86.2% 61.7% 49.3% 36.9% 0.0% 100.0% 100.0% 100.0% 100.0% 82.5%
25 March, 2001......... 80.6% 55.5% 42.8% 30.1% 0.0% 100.0% 100.0% 100.0% 100.0% 63.6%
26 April, 2001......... 75.0% 49.4% 36.4% 23.4% 0.0% 100.0% 100.0% 100.0% 100.0% 45.2%
27 May, 2001........... 69.5% 43.4% 30.2% 16.9% 0.0% 100.0% 100.0% 100.0% 100.0% 27.2%
28 June, 2001.......... 64.0% 37.4% 24.0% 10.5% 0.0% 100.0% 100.0% 100.0% 100.0% 9.8%
29 July, 2001.......... 58.6% 31.6% 18.0% 4.2% 0.0% 100.0% 100.0% 100.0% 100.0% 0.0%
30 August, 2001........ 53.3% 25.9% 12.0% 0.0% 0.0% 100.0% 100.0% 100.0% 95.4% 0.0%
31 September, 2001..... 48.0% 20.2% 6.2% 0.0% 0.0% 100.0% 100.0% 100.0% 81.1% 0.0%
32 October, 2001....... 42.8% 14.7% 0.5% 0.0% 0.0% 100.0% 100.0% 100.0% 67.0% 0.0%
33 November, 2001...... 37.6% 9.3% 0.0% 0.0% 0.0% 100.0% 100.0% 88.0% 53.4% 0.0%
34 December, 2001...... 32.5% 4.0% 0.0% 0.0% 0.0% 100.0% 100.0% 74.9% 40.1% 0.0%
35 January, 2002....... 27.4% 0.0% 0.0% 0.0% 0.0% 100.0% 97.0% 62.2% 27.1% 0.0%
36 February, 2002...... 22.4% 0.0% 0.0% 0.0% 0.0% 100.0% 84.7% 49.7% 14.5% 0.0%
37 March, 2002......... 17.5% 0.0% 0.0% 0.0% 0.0% 100.0% 72.7% 37.6% 2.3% 0.0%
38 April, 2002......... 12.7% 0.0% 0.0% 0.0% 0.0% 100.0% 60.9% 25.8% 0.0% 0.0%
39 May, 2002........... 7.9% 0.0% 0.0% 0.0% 0.0% 100.0% 49.5% 14.4% 0.0% 0.0%
40 June, 2002.......... 3.1% 0.0% 0.0% 0.0% 0.0% 100.0% 38.3% 3.3% 0.0% 0.0%
41 July, 2002.......... 0.0% 0.0% 0.0% 0.0% 0.0% 96.3% 27.4% 0.0% 0.0% 0.0%
42 August, 2002........ 0.0% 0.0% 0.0% 0.0% 0.0% 85.3% 16.7% 0.0% 0.0% 0.0%
43 September, 2002..... 0.0% 0.0% 0.0% 0.0% 0.0% 75.1% 6.9% 0.0% 0.0% 0.0%
44 October, 2002....... 0.0% 0.0% 0.0% 0.0% 0.0% 65.0% 0.0% 0.0% 0.0% 0.0%
45 November, 2002...... 0.0% 0.0% 0.0% 0.0% 0.0% 55.1% 0.0% 0.0% 0.0% 0.0%
46 December, 2002...... 0.0% 0.0% 0.0% 0.0% 0.0% 45.4% 0.0% 0.0% 0.0% 0.0%
47 January, 2003....... 0.0% 0.0% 0.0% 0.0% 0.0% 35.8% 0.0% 0.0% 0.0% 0.0%
48 February, 2003...... 0.0% 0.0% 0.0% 0.0% 0.0% 26.4% 0.0% 0.0% 0.0% 0.0%
49 March, 2003......... 0.0% 0.0% 0.0% 0.0% 0.0% 17.2% 0.0% 0.0% 0.0% 0.0%
50 April, 2003......... 0.0% 0.0% 0.0% 0.0% 0.0% 8.1% 0.0% 0.0% 0.0% 0.0%
51 May, 2003........... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
52 June, 2003.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
53 July, 2003.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
54 August, 2003........ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
55 September, 2003..... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
56 October, 2003....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
57 November, 2003...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
58 December, 2003...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
59 January, 2004....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Weighted Average Life
(in years).......... 2.57 2.17 2.00 1.86 1.45 3.80 3.25 3.00 2.78 2.15
</TABLE>
(1) See the important notice on page 19 of these materials regarding
calculation of the weighted average life and the assumptions upon which
these tables are based.
<PAGE>
Percent of Initial Certificate Balance at Various ABS Percentages (1)
<TABLE>
<CAPTION>
Class A-5 Certificates
-----------------------------------------------------------
Distribution Date 1.0% 1.4% 1.6% 1.8% 2.5%
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Closing Date................... 100.0% 100.0% 100.0% 100.0% 100.0%
1 March, 1999.................... 100.0% 100.0% 100.0% 100.0% 100.0%
2 April, 1999.................... 100.0% 100.0% 100.0% 100.0% 100.0%
3 May, 1999...................... 100.0% 100.0% 100.0% 100.0% 100.0%
4 June, 1999..................... 100.0% 100.0% 100.0% 100.0% 100.0%
5 July, 1999..................... 100.0% 100.0% 100.0% 100.0% 100.0%
6 August, 1999................... 100.0% 100.0% 100.0% 100.0% 100.0%
7 September, 1999................ 100.0% 100.0% 100.0% 100.0% 100.0%
8 October, 1999.................. 100.0% 100.0% 100.0% 100.0% 100.0%
9 November, 1999................. 100.0% 100.0% 100.0% 100.0% 100.0%
10 December, 1999................. 100.0% 100.0% 100.0% 100.0% 100.0%
11 January, 2000.................. 100.0% 100.0% 100.0% 100.0% 100.0%
12 February, 2000................. 100.0% 100.0% 100.0% 100.0% 100.0%
13 March, 2000.................... 100.0% 100.0% 100.0% 100.0% 100.0%
14 April, 2000.................... 100.0% 100.0% 100.0% 100.0% 100.0%
15 May, 2000...................... 100.0% 100.0% 100.0% 100.0% 100.0%
16 June, 2000..................... 100.0% 100.0% 100.0% 100.0% 100.0%
17 July, 2000..................... 100.0% 100.0% 100.0% 100.0% 100.0%
18 August, 2000................... 100.0% 100.0% 100.0% 100.0% 100.0%
19 September, 2000................ 100.0% 100.0% 100.0% 100.0% 100.0%
20 October, 2000.................. 100.0% 100.0% 100.0% 100.0% 100.0%
21 November, 2000................. 100.0% 100.0% 100.0% 100.0% 100.0%
22 December, 2000................. 100.0% 100.0% 100.0% 100.0% 100.0%
23 January, 2001.................. 100.0% 100.0% 100.0% 100.0% 100.0%
24 February, 2001................. 100.0% 100.0% 100.0% 100.0% 100.0%
25 March, 2001.................... 100.0% 100.0% 100.0% 100.0% 100.0%
26 April, 2001.................... 100.0% 100.0% 100.0% 100.0% 100.0%
27 May, 2001...................... 100.0% 100.0% 100.0% 100.0% 100.0%
28 June, 2001..................... 100.0% 100.0% 100.0% 100.0% 100.0%
29 July, 2001..................... 100.0% 100.0% 100.0% 100.0% 94.9%
30 August, 2001................... 100.0% 100.0% 100.0% 100.0% 83.2%
31 September, 2001................ 100.0% 100.0% 100.0% 100.0% 71.8%
32 October, 2001.................. 100.0% 100.0% 100.0% 100.0% 60.9%
33 November, 2001................. 100.0% 100.0% 100.0% 100.0% 50.3%
34 December, 2001................. 100.0% 100.0% 100.0% 100.0% 40.1%
35 January, 2002.................. 100.0% 100.0% 100.0% 100.0% 30.3%
36 February, 2002................. 100.0% 100.0% 100.0% 100.0% 20.9%
37 March, 2002.................... 100.0% 100.0% 100.0% 100.0% 12.0%
38 April, 2002.................... 100.0% 100.0% 100.0% 93.2% 3.4%
39 May, 2002...................... 100.0% 100.0% 100.0% 85.0% 0.0%
40 June, 2002..................... 100.0% 100.0% 100.0% 77.2% 0.0%
41 July, 2002..................... 100.0% 100.0% 94.7% 69.6% 0.0%
42 August, 2002................... 100.0% 100.0% 87.2% 62.3% 0.0%
43 September, 2002................ 100.0% 100.0% 80.2% 0.0% 0.0%
44 October, 2002.................. 100.0% 98.0% 73.5% 0.0% 0.0%
45 November, 2002................. 100.0% 91.3% 67.1% 0.0% 0.0%
46 December, 2002................. 100.0% 84.9% 60.8% 0.0% 0.0%
47 January, 2003.................. 100.0% 78.6% 0.0% 0.0% 0.0%
48 February, 2003................. 100.0% 72.5% 0.0% 0.0% 0.0%
49 March, 2003.................... 100.0% 66.7% 0.0% 0.0% 0.0%
50 April, 2003.................... 100.0% 61.0% 0.0% 0.0% 0.0%
51 May, 2003...................... 99.4% 0.0% 0.0% 0.0% 0.0%
52 June, 2003..................... 93.2% 0.0% 0.0% 0.0% 0.0%
53 July, 2003..................... 87.1% 0.0% 0.0% 0.0% 0.0%
54 August, 2003................... 81.2% 0.0% 0.0% 0.0% 0.0%
55 September, 2003................ 75.4% 0.0% 0.0% 0.0% 0.0%
56 October, 2003.................. 69.7% 0.0% 0.0% 0.0% 0.0%
57 November, 2003................. 64.2% 0.0% 0.0% 0.0% 0.0%
58 December, 2003................. 58.8% 0.0% 0.0% 0.0% 0.0%
59 January, 2004.................. 0.0% 0.0% 0.0% 0.0% 0.0%
Weighted Average Life
(in years) ................ 4.73 4.09 3.76 3.45 2.76
</TABLE>
(1) See the important notice on page 19 of these materials regarding
calculation of the weighted average life and the assumptions upon which
these tables are based.
<PAGE>
YIELD AND PREPAYMENT CONSIDERATIONS
General
Monthly Interest will be distributed to Class A Certificateholders and
Class I Certificateholders on each Distribution Date to the extent of the
pass-through rate applied to the applicable Certificate Balance or Notional
Principal Amount, as applicable, as of the preceding Distribution Date or the
Closing Date, as applicable (after giving effect to distributions of principal
on such preceding Distribution Date).
Upon a full or partial prepayment on a Receivable, Class A
Certificateholders and Class I Certificateholders will receive interest for the
full month of such prepayment either:
(1) through the distribution of interest paid on the Receivables;
(2) from a withdrawal from the Spread Account;
(3) by an advance from the Servicer; or
(4) by a draw on the Policy.
Although the Receivables will have different contract rates, the
contract rate of each Receivable generally will exceed the sum of:
(1) the weighted average of the Class A-1 Pass-Through Rate, the Class A-2
Pass-Through Rate, the Class A-3 Pass-Through Rate, the Class A-4
Pass-Through Rate and the Class A-5 Pass-Through Rate;
(2) the Class I Pass-Through Rate;
(3) the per annum rate used to calculate the Insurance Premium; and
(4) the per annum rate used to calculate the Monthly Servicing Fee.
However, the contract rate on a small percentage of the Receivables,
will be less than the foregoing sum. Disproportionate rates of prepayments
between Receivables with higher and lower contract rates could affect the
ability of the Trust to distribute Monthly Interest to you.
The Class I Certificates
The Class I Certificates are interest-only certificates. We intend the
planned amortization feature of the Notional Principal Amount of the Class I
Certificates to reduce the effect that prepayments will have on the Class I
Certificates. However the Notional Principal Amount of the Class I Certificates
may be reduced more quickly than provided in the Planned Notional Principal
Amount Schedule if the Receivables prepay more quickly than 2.50% ABS. Such
prepayments in excess of the rate assumed in the Planned Notional Principal
Amount Schedule will reduce the yield of the Class I Certificates. As such, the
yield to maturity on the Class I Certificates will be very sensitive to the rate
of prepayments, including voluntary prepayments and prepayments due to
liquidations and repurchases. See "Risk Factors -- Prepayments May Reduce the
Yield on the Class I Certificates" and "The Class I Certificates -- Calculation
of Notional Principal Amount" and "-- Class I Yield Considerations" in these
materials.
<PAGE>
THE CLASS I CERTIFICATES
Calculation of Notional Principal Amount
The Class I Certificates are entitled to receive interest at the Class
I Pass-Through Rate on the Notional Principal Amount of the Class I
Certificates. Solely for the purpose of calculating the amount payable to the
Class I Certificateholders, the Certificate Balance will be divided into two
notional principal components, the "PAC Component" and the "Companion
Component." The Notional Principal Amount will be the same amount as the PAC
Component, originally $256,316,037.87. The sum of the PAC Component and the
Companion Component at any time will equal the then aggregate unpaid Certificate
Balance at such time.
The Pooling and Servicing Agreement establishes the Planned Notional
Principal Amount Schedule under which principal will be allocated to the PAC
Component and the Companion Component. On each Distribution Date, the amount of
Monthly Principal allocated to Class A Certificateholders will determine the
reduction in the Notional Principal Amount as follows:
(1) to the PAC Component up to the amount necessary to reduce the
PAC Component to the amount specified in the Planned Notional
Principal Amount Schedule for such Distribution Date;
(2) to the Companion Component until the balance thereof is
reduced to zero; and
(3) to the PAC Component, without regard to the Planned Notional
Principal Amount for such Distribution Date.
As the PAC Component is reduced, the Notional Principal Amount and
payments to the Class I Certificateholders will also be reduced. The Class I
Certificates are not entitled to receive any principal payments.
<PAGE>
Planned Notional Principal Amount Schedule
Planned Notional
Distribution Date in Principal Amount
-------------------- ----------------
Initial.................................. $256,316,037.87
March 1999............................... 248,011,123.96
April 1999............................... 239,775,307.57
May 1999................................. 231,609,890.00
June 1999................................ 223,516,192.61
July 1999................................ 215,495,557.11
August 1999.............................. 207,549,345.80
September 1999........................... 199,678,941.95
October 1999............................. 191,885,749.99
November 1999............................ 184,171,195.88
December 1999............................ 176,536,727.37
January 2000............................. 168,983,814.35
February 2000............................ 161,513,949.08
March 2000............................... 154,128,646.60
April 2000............................... 146,829,444.98
May 2000................................. 139,617,905.65
June 2000................................ 132,495,613.75
July 2000................................ 125,464,178.45
August 2000.............................. 118,525,233.26
September 2000........................... 111,680,436.40
October 2000............................. 104,931,471.15
November 2000............................ 98,280,046.14
December 2000............................ 91,727,895.78
January 2001............................. 85,276,780.56
February 2001............................ 78,928,487.42
March 2001............................... 72,684,830.15
April 2001............................... 66,547,649.73
May 2001................................. 60,518,814.70
June 2001................................ 54,600,221.57
July 2001................................ 48,793,795.19
August 2001.............................. 43,101,489.13
September 2001........................... 37,525,286.10
October 2001............................. 32,067,198.34
November 2001............................ 26,729,268.01
December 2001............................ 21,513,567.64
January 2002............................. 16,422,200.52
February 2002............................ 11,457,301.11
March 2002............................... 6,621,035.52
April 2002............................... 1,915,601.88
May 2002................................. 0.00
The Class I Certificates will not be entitled to any distributions after the
Notional Principal Amount has been reduced to zero.
Class I Yield Considerations
We intend the planned amortization feature of the Class I Certificates
to reduce the uncertainty caused by prepayments of the Receivables and the
effect of prepayments to the Class I Certificates. However, the yield to
maturity of the Class I Certificates will still be very sensitive to the
prepayment experience of the Receivables, including voluntary prepayments and
prepayments due to liquidations and repurchases. You should note that you will
not be entitled to any distributions on your Class I Certificates after the
Notional Principal Amount of the Class I Certificates has been reduced to zero
and that Receivables may be repurchased due to breaches of representations. See
"Risk Factors -- Prepayments May Reduce the Yield on the Class I Certificates"
in these materials.
<PAGE>
The following tables illustrate the significant effect that prepayments
on the Receivables have upon the yield to maturity of the Class I Certificates.
The first table assumes that the Receivables have been aggregated into four
hypothetical pools having the characteristics described therein and that the
level scheduled monthly payment for each of the four pools (which is based on
its principal balance, weighted average contract rate, weighted average
remaining term as of the Cutoff Date and its weighted average original term)
will be such that such pool will be fully amortized by the end of its weighted
average remaining term. Based on such hypothetical pools, the second table shows
the approximate hypothetical pre-tax yields to maturity of the Class I
Certificates, stated on a corporate bond equivalent basis, under five different
prepayment assumptions based on the assumed purchase price and the ABS
prepayment model described below.
<TABLE>
<CAPTION>
Weighted Average Weighted Average
Cutoff Date Weighted Average Original Term to Remaining Term to
Pool Principal Balance Note Rate Maturity (in Months) Maturity (in Months)
---- ----------------- --------- -------------------- --------------------
<S> <C> <C> <C> <C>
1 $ 15,139,074.32 12.962% 43 42
2 44,292,334.47 12.811 59 58
3 100,818,544.82 12.923 70 69
4 160,295,181.21 13.076 82 80
----------------- ------
Total $ 320,545,134.82 12.986%
================= ======
</TABLE>
For purposes of the table, it is also assumed that:
(1) the purchase price of the Class I Certificates is as set forth
below;
(2) the Receivables prepay monthly at the specified percentages of
ABS as set forth in the table below;
(3) prepayments representing prepayments in full of individual
Receivables are received on the last day of the month and
include a full month's interest;
(4) the Closing Date for the Offered Certificates is February 23,
1999;
(5) distributions on the Offered Certificates are made, in cash,
commencing on March 8, 1999, and on the eighth day of each
month thereafter;
(6) no defaults or delinquencies in the payment of the Receivables
are experienced; and
(7) no Receivable is repurchased for any breach of representation
or warranty or for any other reason.
<PAGE>
Sensitivity of the Yield on the Class I Certificates to Prepayments
1.0% 1.6% 1.8% 2.5% 3.0%
Price(1) ABS ABS ABS ABS ABS
-------- ------ ----- ----- ----- -----
1.102231% 26.092% 5.110% 5.110% 5.110% - 4.788%
(1) Expressed as a percentage of the Original Notional Principal Amount.
Based on the assumptions described above and assuming a purchase price
of 1.102231% at approximately 2.806% ABS, the pre-tax yield to maturity of the
Class I Certificates would be approximately 0%.
We do not expect that the Receivables will prepay at a constant rate
until maturity or that the Receivables will prepay at the same rate. The
foregoing table assumes that each Receivable bears interest at its specified
contract rate, has the same remaining amortization term, and prepays at the same
rate. In fact, the Receivables will prepay at different rates and have different
terms.
The yields set forth in the preceding table were calculated by
determining the monthly discount rates which, when applied to the assumed stream
of cash flows to be paid on the Class I Certificates, would cause the discounted
present value of such assumed cash flows to equal the assumed purchase price of
such Class I Certificates. Then we convert such monthly rates to corporate bond
equivalent rates. Our calculations do not take into account variations that may
occur in the interest rates at which you may be able to reinvest funds received
as distributions on the Class I Certificates and we do not purport to reflect
the return on any investment in the Class I Certificates when such reinvestment
rates are considered.
The Receivables will not necessarily have the characteristics assumed
above and we cannot assure you that:
(1) the Receivables will prepay at any of the rates shown in the
table or at any other particular rate or will prepay
proportionately;
(2) the pre-tax yield on the Class I Certificates will correspond
to any of the pre-tax yields shown above; or (3) the aggregate
purchase price of the Class I Certificates will be equal to
the assumed purchase price.
Because the Receivables will include Receivables that have remaining
terms to stated maturity shorter or longer than those assumed and contract rates
higher or lower than those assumed, the pre-tax yield on the Class I
Certificates will differ from those set forth above, even if all of the
Receivables prepay at the indicated constant prepayment rates.
The ABS prepayment model was used in the preceding table to model the
rate of prepayment each month on the Receivables. For a description of the ABS
model, see "Weighted Average Life of the Class A Certificates" in these
materials.
<PAGE>
THE INSURER
MBIA Insurance Corporation (the "Insurer") is the principal operating
subsidiary of MBIA Inc., a New York Stock Exchange listed company (the
"Company"). The Company is not obligated to pay the debts of or claims against
the Insurer. The Insurer is domiciled in the State of New York and licensed to
do business in and subject to regulation under the laws of all 50 states, the
District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands of the United States and the
Territory of Guam. The Insurer has two European branches, one in the Republic of
France and the other in the Kingdom of Spain. New York has laws prescribing
minimum capital requirements, limiting classes and concentrations of investments
and requiring the approval of policy rates and forms. State laws also regulate
the amount of both the aggregate and individual risks that may be insured, the
payment of dividends by the Insurer, changes in control and transactions among
affiliates. Additionally, the Insurer is required to maintain contingency
reserves on its liabilities in certain amounts and for certain periods of time.
Effective February 17, 1998, the Company acquired all of the
outstanding stock of Capital Markets Assurance Corporation ("CMAC") through a
merger with its parent CapMAC Holdings Inc. Pursuant to a reinsurance agreement,
CMAC has ceded all of its net insured risks (including any amounts due but
unpaid from third party reinsurers), as well as its unearned premiums and
contingency reserves, to the Insurer. The Company is not obligated to pay the
debts of or claims against CMAC.
The consolidated financial statements of the Insurer, a wholly owned
subsidiary of the Company, and its subsidiaries as of December 31, 1997 and
December 31, 1996 and for each of the three years in the period ended December
31, 1997, prepared in accordance with generally accepted accounting principles
("GAAP"), included in the Annual Report on Form 10-K of the Company for the year
ended December 31, 1997 and the consolidated financial statements of the Insurer
and its subsidiaries as of September 30, 1998 and for the nine month periods
ending September 30, 1998 and September 30, 1997 included in the Quarterly
Report on Form 10-Q of the Company for the period ending September 30, 1998, are
hereby incorporated by reference into these materials and shall be deemed to be
a part hereof. Any statement contained in a document incorporated by reference
herein shall be modified or superseded for purposes of these materials to the
extent that a statement contained herein or in any other subsequently filed
document which also is incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of these materials.
All financial statements of the Insurer and its subsidiaries included
in documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, as amended, subsequent to the date of
these materials and prior to the termination of the offering of the Offered
Certificates shall be deemed to be incorporated by reference into these
materials and to be a part hereof from the respective dates of filing such
documents.
<PAGE>
The tables below present selected financial information of the Insurer
determined in accordance with statutory accounting practices prescribed or
permitted by insurance regulatory authorities ("SAP") as well as GAAP:
SAP
-------------------------------------------
December 31, September 30,
1997 1998
------------ -------------
(Audited) (Unaudited)
(in millions)
Admitted Assets $5,256 $6,318
Liabilities 3,496 4,114
Capital and Surplus 1,760 2,204
GAAP
-------------------------------------------
December 31, September 30,
1997 1998
------------ -------------
(Audited) (Unaudited)
(in millions)
Assets $5,988 $7,439
Liabilities 2,624 3,268
Shareholder's Equity 3,364 4,171
Copies of the financial statements of the Insurer incorporated by reference
herein and copies of the Insurer's 1997 year-end audited financial statements
prepared in accordance with SAP are available, without charge, from the Insurer.
The address of the Insurer is 113 King Street, Armonk, New York 10504. The
telephone number of the Insurer is (914) 273-4545.
The Insurer does not accept any responsibility for the accuracy or
completeness of these materials or any information or disclosure contained
herein, or omitted herefrom, other than with respect to the accuracy of the
information regarding the Insurer set forth under the heading "The Insurer."
Additionally, the Insurer makes no representation regarding the Offered
Certificates or the advisability of investing in the Offered Certificates.
THE POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY
FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.
Moody's Investors Service, Inc. rates the claims paying ability of the
Insurer "Aaa."
Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. rates the claims paying ability of the Insurer "AAA."
Fitch IBCA, Inc. (formerly known as Fitch Investors Service, L.P.)
rates the claims paying ability of the Insurer "AAA."
Each rating of the Insurer should be evaluated independently. The
ratings reflect the respective rating agency's current assessment of the
creditworthiness of the Insurer and its ability to pay claims on its policies of
insurance. Any further explanation as to the significance of the above ratings
may be obtained only from the applicable rating agency.
The above ratings are not recommendations to buy, sell or hold the
Offered Certificates, and such ratings may be subject to revision or withdrawal
at any time by the rating agencies. Any downward revision or withdrawal of any
of the above ratings may have an adverse effect on the market price of the
Offered Certificates. The Insurer does not guaranty the market price of the
Offered Certificates nor does it guaranty that the ratings on the Offered
Certificates will not be revised or withdrawn.
<PAGE>
INDEX OF TERMS
We have listed below the terms used in these materials and the pages
where definitions of the terms can be found. The "Glossary" follows this "Index
of Terms."
ABS..................................................... 18
Available Funds......................................... 7
Bear Stearns............................................ 2
Certificates............................................ 3
Certificate Balance..................................... 5
Class A Certificateholders.............................. 4
Class A Certificates.................................... 4
Class A-1 Certificate Balance........................... 5
Class A-1 Certificateholders............................ 4
Class A-1 Certificates.................................. 3
Class A-1 Final Scheduled Distribution Date............. 5
Class A-1 Monthly Interest.............................. Glossary
Class A-1 Pass-Through Rate............................. 4
Class A-2 Certificate Balance........................... 5
Class A-2 Certificateholders............................ 4
Class A-2 Certificates.................................. 3
Class A-2 Final Scheduled Distribution Date............. 5
Class A-2 Monthly Interest.............................. Glossary
Class A-2 Pass-Through Rate............................. 4
Class A-3 Certificate Balance........................... 5
Class A-3 Certificateholders............................ 4
Class A-3 Certificates.................................. 3
Class A-3 Final Scheduled Distribution ................. 5
Class A-3 Monthly Interest.............................. Glossary
Class A-3 Pass-Through Rate............................. 4
Class A-4 Certificate Balance........................... 5
Class A-4 Certificateholders............................ 4
Class A-4 Certificates.................................. 3
Class A-4 Final Scheduled Distribution Date............. 5
Class A-4 Monthly Interest.............................. Glossary
Class A-4 Pass-Through Rate............................. 4
Class A-5 Certificate Balance........................... 5
Class A-5 Certificateholders............................ 4
Class A-5 Certificates.................................. 3
Class A-5 Final Scheduled Distribution Date............. 5
Class A-5 Monthly Interest.............................. Glossary
Class A-5 Pass-Through Rate............................. 4
Class I Certificateholders.............................. 6
Class I Certificates.................................... 3
Class I Monthly Interest................................ Glossary
Class I Pass-Through Rate............................... 6
Class IC Certificate.................................... 3
Class IC Certificateholder.............................. 8
Clean-Up Call Date...................................... 9
Closing Date............................................ 3
CMAC.................................................... 27
Collection Period....................................... Glossary
Companion Component..................................... 6, 24
Company................................................. 27
<PAGE>
Cutoff Date............................................. 4
Defaulted Receivable.................................... Glossary
Depositor............................................... 3
Distribution Date....................................... 4
ERISA................................................... 9
Financed Vehicles....................................... 4
GAAP.................................................... 27
Information............................................. 1
Insurance Premium....................................... Glossary
Insurance Agreement..................................... 8
Insurer................................................. 9, 27
Issuer.................................................. 3
Modified Receivables.................................... Glossary
Monthly Interest........................................ 5, Glossary
Monthly Principal....................................... 5, Glossary
Monthly Servicing Fee................................... 3
NationsBanc Montgomery.................................. 2
Net Principal Policy Amount............................. 9
Notional Principal Amount............................... 6
Offered Certificates.................................... 3
Offering Documents...................................... 1
Optional Sale........................................... 9
Original Notional Principal Amount...................... 6
PAC Component........................................... 6, 24
Planned Notional Principal Amount....................... 6
Planned Notional Principal Amount Schedule.............. 6
Policy.................................................. 4, 8
Policy Amount........................................... 8
Pool Balance............................................ 5
Pooling and Servicing Agreement......................... 3
Predecessor............................................. Glossary
Rating Agency or Rating Agencies........................ 9
Receivables............................................. 4
Record Date............................................. 4
Required Spread Amount.................................. 8
SAP..................................................... 28
Servicer................................................ 3
Spread Account.......................................... 7
Tier II Receivables..................................... 12
Trust ............................................... 3
Trustee................................................. 3
UAC..................................................... 3
UAFC.................................................... 8
Underwriters .......................................... 2
<PAGE>
GLOSSARY
We have listed below the definitions of certain terms used in these
materials and the pages where definitions of other terms can be found are listed
in the preceding "Index of Terms."
"Class A-1 Monthly Interest" ...........(1) for the first Distribution Date,
the product of the following:
(a) one-three hundred sixtieth
(1/360th) of the Class A-1
Pass-Through Rate,
(b) the actual number of days from
the Closing Date through the
day before the first
Distribution Date, and
(c) the Class A-1 Certificate
Balance on the Closing Date;
and
(2) for any subsequent Distribution
Date, the product of the following:
(a) one-three hundred sixtieth
(1/360th) of the Class A-1
Pass-Through Rate,
(b) the actual number of days from
the previous Distribution Date
through the day before the
related Distribution Date, and
(c) the Class A-1 Certificate
Balance as of the immediately
preceding Distribution Date
(after giving effect to any
distribution of Monthly
Principal made on such
Distribution Date).
"Class A-2 Monthly Interest" ...........(1) for the first Distribution Date,
the product of the following:
(a) one-twelfth of the Class A-2
Pass-Through Rate,
(b) the number of days from the
Closing Date (assuming the
month of the Closing Date has
30 days) through the day before
the first Distribution Date
divided by 30, and
(c) the Class A-2 Certificate
Balance on the Closing Date;
and
<PAGE>
(2) for any subsequent Distribution
Date, the product of the following:
(a) one-twelfth of the Class A-2
Pass-Through Rate and
(b) the Class A-2 Certificate
Balance as of the immediately
preceding Distribution Date
(after giving effect to any
distribution of Monthly
Principal made on such
Distribution Date).
"Class A-3 Monthly Interest" ...........(1) for the first Distribution Date,
the product of the following:
(a) one-twelfth of the Class A-3
Pass-Through Rate,
(b) the number of days from the
Closing Date (assuming the
month of the Closing Date has
30 days) through the day before
the first Distribution Date
divided by 30, and
(c) the Class A-3 Certificate
Balance on the Closing Date;
and
(2) for any subsequent Distribution
Date, the product of the following:
(a) one-twelfth of the Class A-3
Pass-Through Rate and
(b) the Class A-3 Certificate
Balance as of the immediately
preceding Distribution Date
(after giving effect to any
distribution of Monthly
Principal made on such
Distribution Date).
"Class A-4 Monthly Interest" ...........(1) for the first Distribution Date,
the product of the following:
(a) one-twelfth of the Class A-4
Pass-Through Rate,
(b) the number of days from the
Closing Date (assuming the
month of the Closing Date has
30 days) through the day before
the first Distribution Date
divided by 30, and
<PAGE>
(c) the Class A-4 Certificate
Balance on the Closing Date;
and
(2) for any subsequent Distribution
Date, the product of the following:
(a) one-twelfth of the Class A-4
Pass-Through Rate and
(b) the Class A-4 Certificate
Balance as of the immediately
preceding Distribution Date
(after giving effect to any
distribution of Monthly
Principal made on such
Distribution Date).
"Class A-5 Monthly Interest" ...........(1) for the first Distribution Date,
the product of the following:
(a) one-twelfth of the Class A-5
Pass-Through Rate,
(b) the number of days from the
Closing Date (assuming the
month of the Closing Date has
30 days) through the day before
the first Distribution Date
divided by 30, and
(c) the Class A-5 Certificate
Balance on the Closing Date;
and
(2) for any subsequent Distribution
Date, the product of the following:
(a) one-twelfth of the Class A-5
Pass-Through Rate and
(b) the Class A-5 Certificate
Balance as of the immediately
preceding Distribution Date
(after giving effect to any
distribution of Monthly
Principal made on such
Distribution Date).
"Class I Monthly Interest" .............(1) for the first Distribution Date,
the product of the following:
(a) one-twelfth of the Class I
Pass-Through Rate,
<PAGE>
(b) the number of days from the
Closing Date (assuming the
month of the Closing Date has
30 days) through the day before
the first Distribution Date
divided by 30, and
(c) the Class A-2 Certificate
Balance on the Closing Date;
and
(2) for any subsequent Distribution
Date, the product of the following:
(a) one-twelfth of the Class I
Pass-Through Rate and
(b) the Class I Certificate Balance
as of the immediately preceding
Distribution Date (after giving
effect to any distribution of
Monthly Principal made on such
Distribution Date).
provided, however, that after the Class
A-5 Final Scheduled Distribution Date,
the Class I Monthly Interest shall be
zero.
Collection Period.......................(1) for the first Distribution Date,
the period from the day after the
Cutoff Date to February 28, 1999
(2) for each subsequent Distribution
Date, the preceding calendar month,
until the Trust terminates.
Defaulted Receivable....................for any Collection Period, a Receivable
as to which any of the following has
occurred:
(1) any payment, or part thereof,
in excess of $10 is 120 days or
more delinquent as of the last
day of such Collection Period;
(2) the Financed Vehicle that
secures the Receivable has been
repossessed; or
<PAGE>
(3) the Receivable has been
determined to be uncollectable
in accordance with the
Servicer's customary practices
on or prior to the last day of
such Collection Period;
provided, however, that any
Receivable which the Depositor
or the Servicer is obligated to
repurchase or purchase pursuant
to the Pooling and Servicing
Agreement shall be deemed not
to be a Defaulted Receivable.
Insurance Premium.......................for any Distribution Date, one-twelfth
of the product of the Policy per annum
fee rate set forth in the Insurance
Agreement and the Certificate Balance
calculated as of the last day of the
Collection Period to which such
Distribution Date relates and payable
monthly in arrears.
Modified Receivables....................Receivables which have been modified
from the terms of the original contract
to provide a different monthly payment,
a different interest rate and/or a
longer term to maturity.
Monthly Interest........................for any Distribution Date, the sum of
Class A-1 Monthly Interest, Class A-2
Monthly Interest, Class A-3 Monthly
Interest, Class A-4 Monthly Interest,
Class A-5 Monthly Interest and Class I
Monthly Interest.
Monthly Principal.......................for any Distribution Date, the amount
necessary to reduce the Certificate
Balance as of the prior Distribution
Date (after giving effect to the
distribution of Monthly Principal on
such date) (or as of the Closing Date in
the case of the first Distribution Date)
to the aggregate unpaid principal
balance of the Receivables on the last
day of the related Collection Period;
provided, however, that Monthly
Principal on the final scheduled
Distribution Date for each class of
Class A Certificates will be increased
by the amount, if any, which is
necessary to reduce the Certificate
Balance of such class to zero on such
date. For the purpose of determining
Monthly Principal, the unpaid principal
balance of a defaulted receivable or a
purchased receivable is deemed to be
zero on and after the last day of the
Collection Period in which such
Receivable became a Defaulted Receivable
or a Purchased Receivable.
Predecessor.............................Union Federal Savings Bank of
Indianapolis.
