Prospectus Supplement
(To Prospectus dated November 14, 2000)
$510,000,000
UACSC 2000-D Owner Trust [UACSC LOGO]
Automobile Receivable Backed Notes
UAC Securitization Corporation,
as seller
Union Acceptance Corporation,
as servicer
We are offering the following classes of automobile receivable backed
notes:
<TABLE>
<CAPTION>
Price Underwriting
Class of Initial Aggregate Interest Final to Public Discount
Notes Principal Balance Rate Maturity Date per Note per Note
-------- ----------------- -------- ------------- --------- ------------
<S> <C> <C> <C> <C> <C>
A-1 $44,525,000 6.72938% September 10, 2001 100.00000% 0.140%
A-2 $139,250,000 6.68% September 8, 2003 99.99412% 0.210%
A-3 $184,625,000 6.72% October 11, 2005 99.98554% 0.220%
A-4 $116,100,000 6.89% April 9, 2007 99.99453% 0.240%
B $25,500,000 8.25% July 8, 2008 103.99496% 0.330%
</TABLE>
The total price to the public is $510,977,479.46. The total underwriting
discount is $1,123,725.00. The total proceeds to the trust are $509,853,754.46.
You should carefully consider the factors set forth under "Risk Factors"
beginning on page S-10 of this prospectus supplement and on page 10 in the
prospectus.
The notes represent obligations of the UACSC 2000-D Owner Trust only and do
not represent obligations of or interests in UAC Securitization Corporation,
Union Acceptance Corporation, any of their affiliates or any governmental
agency.
This prospectus supplement may be used to offer and sell the notes only if
accompanied by the prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus supplement or the accompanying prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
Underwriters
Banc of America Securities LLC Salomon Smith Barney
The date of this prospectus supplement is November 14, 2000.
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
We tell you about the notes in the following documents:
(1) this prospectus supplement, which describes the specific terms of your
notes; and
(2) the accompanying prospectus, which provides general information, some
of which may not apply to the notes.
If the description of the notes varies between this prospectus supplement
and the prospectus, you should rely on the information in this prospectus
supplement.
We include cross-references in this prospectus supplement and in the
accompanying prospectus to captions in this prospectus supplement where you can
find further related discussions. The following table of contents and the table
of contents included in the accompanying prospectus provide the pages on which
these captions are located.
In this prospectus supplement and the accompanying prospectus, "we" refers
to the seller of the notes, UAC Securitization Corporation, and "you" refers to
any prospective investor in the notes.
<PAGE>
SUMMARY OF TERMS................................. S-4
Issuer...................................... S-4
Seller...................................... S-4
Servicer.................................... S-4
Indenture Trustee........................... S-4
Owner Trustee............................... S-4
Cut-Off Date................................ S-4
Statistical Cut-Off Date.................... S-4
Closing Date................................ S-4
The Notes................................... S-4
Payment Date................................ S-5
Interest on the Notes....................... S-5
Note Principal.............................. S-5
The Certificate............................. S-6
The Trust Assets............................ S-6
Spread Account;
Rights of the Certificateholder......... S-6
The Policy.................................. S-7
Policy Amount............................... S-8
Insurer..................................... S-8
Indenture Default; Control by the
Insurer and Noteholders................. S-8
Legal Investment............................ S-8
Optional Redemption......................... S-8
Increase of the Class A-4 Interest Rate
and the Class B Interest Rate........... S-9
Tax Status.................................. S-9
Ratings..................................... S-9
ERISA Considerations........................ S-9
RISK FACTORS..................................... S-10
You May Not Be Able
to Resell the Notes..................... S-10
The Notes Are Obligations of the Trust
Only and Are Not Guaranteed by
Any Other Party......................... S-10
The Amount in the Spread Account
May Not Be Sufficient to Assure
Payment of Principal
and Interest............................ S-10
You May Incur a Loss If There Is a
Default Under the Policy................ S-11
Some Notes Are More at Risk
Than Others If There Are
Losses on the Receivables............... S-11
Some Payments on the Notes
Are Subordinate to
Other Payments on the Notes............. S-11
Noteholders Have a Limited Right to
Declare Indenture Defaults or
Remedies................................ S-12
A Change in the Note Ratings
May Adversely Affect the Notes.......... S-12
FORMATION OF THE TRUST........................... S-13
THE RECEIVABLES POOL............................. S-14
Composition of the Receivables by
Financed Vehicle Type as of
October 31,2000......................... S-15
Distribution of the Receivables
by Financed Vehicle Model
Year as of October 31,2000.............. S-15
Distribution of the Receivables by
Contract Rate as of
October 31,2000......................... S-16
Geographic Distribution of the
Receivables as of
October 31,2000......................... S-17
Distribution of the Receivables by
Remaining Term as of
October 31,2000......................... S-17
Delinquencies and Net Losses................ S-18
Delinquency and Credit
Loss Experience......................... S-19
WEIGHTED AVERAGE LIFE OF
THE NOTES................................... S-20
Percent of Initial Note Balance at
Various ABS Percentages................ S-22
YIELD AND PREPAYMENT
CONSIDERATIONS.............................. S-25
THE NOTES........................................ S-25
Sale and Assignment of Receivables.......... S-25
Accounts.................................... S-25
Advances.................................... S-26
Payments on the Notes....................... S-26
Distributions on the Certificate............ S-32
The Policy.................................. S-32
Default under the Indenture................. S-33
Rights of the Insurer upon Servicer
Default, Amendment or Waiver............ S-33
THE SELLER AND UAC............................... S-33
THE INSURER...................................... S-34
MBIA........................................ S-34
MBIA Financial Information.................. S-34
Where You Can Obtain Additional
Information About MBIA.................. S-35
Financial Strength Ratings of MBIA.......... S-35
REPORTS TO NOTEHOLDERS........................... S-36
FEDERAL INCOME TAX
CONSEQUENCES................................ S-36
General..................................... S-36
Discount and Premium........................ S-37
Gain or Loss on Disposition................. S-37
Backup Withholding and
Information Reporting................... S-37
Withholding Regulations Effective
December 31, 2000....................... S-37
Alternative Treatment of the
Class B Notes........................... S-38
State and Local Taxation.................... S-39
ERISA CONSIDERATIONS............................. S-39
UNDERWRITING..................................... S-41
LEGAL OPINIONS................................... S-42
EXPERTS ........................................ S-42
INDEX OF PRINCIPAL TERMS......................... S-43
<PAGE>
SUMMARY OF TERMS
o This summary highlights selected information from this prospectus
supplement and does not contain all of the information that you should
consider in making your investment decision. To understand all of the terms
of this offering, read the entire prospectus supplement and accompanying
prospectus.
o The definitions of or references to capitalized terms used in this
prospectus supplement can be found on the pages indicated in the "Index of
Principal Terms" on page S-42 in this prospectus supplement or on page 55
of the accompanying prospectus.
Issuer
The UACSC 2000-D Owner Trust, a Delaware business trust, will issue the notes
described in this prospectus supplement.
Seller
UAC Securitization Corporation is the seller and the depositor of the trust. The
seller will transfer the automobile receivables and related property to the
trust. See "The Seller and UAC" in this prospectus supplement.
Servicer
Union Acceptance Corporation ("UAC") will act as the servicer of the trust. The
servicer will receive and apply payments on the automobile receivables, service
the collection of the receivables and direct the trustees to make the
appropriate payments to the noteholders and the certificateholder. The servicer
will receive a monthly servicing fee as compensation for its services. See "The
Seller and UAC" in this prospectus supplement.
Indenture Trustee
BNY Midwest Trust Company, a subsidiary of The Bank of New York, will serve as
the indenture trustee under the terms of an indenture between the trust and the
indenture trustee.
Owner Trustee
First Union Trust Company, National Association will serve as the owner trustee
under the terms of a trust and servicing agreement between the seller, the
servicer and the owner trustee.
Cut-Off Date
The cut-off date is the close of business on or about November 16, 2000.
Receivables included in the trust will have been initially acquired by UAC on or
before this date.
Statistical Cut-Off Date
The statistical cut-off date is the close of business on October 31, 2000. This
is the date we used in preparing the statistical information presented in this
prospectus supplement. As of such date the aggregate principal balance of the
receivables was $434,340,011.52. Such statistical information does not reflect
the inclusion of additional receivables in the aggregate principal amount of
approximately $75,659,988.48, which will have been initially acquired by UAC
after October 31, 2000 through the cut-off date.
Closing Date
The closing date will be on or about November 21, 2000.
The Notes
On the closing date, the trust will issue the class A-1 notes, the class A-2
notes, the class A-3 notes, the class A-4 notes and the class B notes, as
described below, under an indenture between the trust and the indenture trustee.
We are offering the notes for sale in this prospectus supplement. The notes are
non-recourse obligations of the trust and are secured by certain assets of the
trust. The interest rates and initial principal balances of the notes are as
follows:
<PAGE>
Interest Rate Initial Aggregate
(per annum) Principal Balance
----------- -----------------
class A-1 notes 6.72938% $44,525,000
class A-2 notes 6.68% $139,250,000
class A-3 notes 6.72% $184,625,000
class A-4 notes 6.89% $116,100,000
class B notes 8.25% $25,500,000
See "The Notes" in this prospectus supplement.
Payment Date
The trust will pay interest and principal on the notes on the eighth calendar
day of each month or, if such day is not a business day, on the next business
day. The payments will begin on January 8, 2001 and will be made to holders of
record of the notes as of the record date, which will be the business day before
the payment date. However, if definitive notes are issued, the record date will
be the last day of the collection period related to the payment date. The
collection period with respect to any payment date (other than the initial
payment date) is the calendar month immediately preceding the calendar month in
which such payment date occurs. The collection period with respect to the
initial payment date will begin on November 17, 2000, and end on December 31,
2000. See "The Notes -- Payments on the Notes" in this prospectus supplement and
"Description of the Securities -- Definitive Securities" in the accompanying
prospectus.
Interest on the Notes
Interest on the class A-1 notes will be calculated on the basis of a 360-day
year and the actual number of days from the previous payment date through the
day before the related payment date. Interest on all other classes of notes will
be calculated on the basis of a 360-day year consisting of twelve 30-day months.
See "Yield and Prepayment Considerations" and "The Notes -- Payments on the
Notes" in this prospectus supplement.
Class A-1 Monthly Interest. Generally, the amount of monthly interest
distributable to the class A-1 noteholders on each payment date is the product
of:
(1) 1/360th of the interest rate for the class A-1 notes;
(2) the actual number of days from the previous payment date through the
day before the related payment date; and
(3) the aggregate outstanding principal balance of the class A-1 notes on
the preceding payment date (after giving effect to all payments to
noteholders on such date).
Monthly Interest for Other Notes. Generally, the amount of monthly interest
distributable to each class of noteholders (other than the class A-1
noteholders) on each payment date is the product of:
(1) one-twelfth of the interest rate applicable to such class of notes;
and
(2) the aggregate outstanding principal balance of such class on the
preceding payment date (after giving effect to all payments to
noteholders on such date).
Monthly Interest on First Payment Date. The amount of interest distributable on
the first payment date of January 8, 2001 will be based upon the initial
aggregate principal balance of the applicable class of notes and will accrue
from the closing date through the day before the first payment date (and in the
case of all of the notes other than the class A-1 notes, assuming that every
month has 30 days).
Note Principal
The trust will distribute principal on each payment date to the noteholders of
record as of the record date. Generally, the amount of monthly principal the
trust will pay is equal to the decrease in the outstanding principal balance of
the receivables pool during the preceding calendar month. See "The Notes --
Payments on the Notes" in this prospectus supplement.
Generally, principal will be distributed to the noteholders in the order of the
alpha-numeric designation of each class of the notes, starting with the class
A-1 notes and ending with the class B notes. For example, no principal will be
distributed to the class A-2 noteholders until the outstanding principal balance
of the class A-1 notes has been reduced to zero. No principal will be
distributed to the class B noteholders until the principal of all of the class A
notes has been paid in full. See "Risk Factors -- Some Notes Are More at Risk
Than Others If There Are Losses on the Receivables" in this prospectus
supplement.
The trust must pay the outstanding principal balance of each class of notes, to
the extent not previously paid, by the final maturity date for such class of
notes as follows:
Final Maturity Date
-------------------
class A-1 notes September 10, 2001
class A-2 notes September 8, 2003
class A-3 notes October 11, 2005
class A-4 notes April 9, 2007
class B notes July 8, 2008
Since the rate of payment of principal of each class of notes depends greatly
upon the rate of payment of principal on the receivables (including voluntary
prepayments and principal paid in respect of defaulted receivables and purchased
receivables), the final payment in respect of each class of notes could occur
significantly earlier than the respective final maturity dates. See "The Notes
-- Payments on the Notes" in this prospectus supplement.
The Certificate
In addition to the notes, the trust will issue an automobile receivable backed
certificate pursuant to the trust and servicing agreement. The certificate
represents an undivided beneficial ownership interest in the trust and will be
retained by the seller. We are not offering the certificate for sale in this
offering.
The Trust Assets
The trust will pledge its assets to the indenture trustee as collateral for the
repayment of the notes. 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 vehicles, with an
anticipated aggregate principal amount on November 16, 2000, of
$510,000,000;
o certain monies (including accrued interest) due in respect of the
receivables as of and after November 16, 2000, but excluding accrued
interest paid before the closing date;
o security interests in the related vehicles financed through the
receivables;
o funds on deposit in a collection 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 notes; and
o certain rights under the agreements by which the receivables are sold
from UAC to the seller and from the seller to the trust.
The trust will acquire its assets from the seller pursuant to the trust and
servicing agreement. See "Formation of the Trust" in this prospectus supplement.
Spread Account; Rights of the Certificateholder
The trust will establish a spread account on the closing date for the benefit of
the noteholders and the insurer. On the closing date we will deposit into the
spread account the amount, if any, required by the insurer as an initial
deposit. The spread account will hold the excess, if any, of the collections on
the receivables over the amounts which the trust is required to pay to the
noteholders, the servicer and the insurer. The amount of funds available for
payment to noteholders on any payment date will consist of funds from the
following sources:
(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 collection 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 indenture trustee will withdraw funds from the spread account (up to the
amount on deposit in the spread account) and then draw on the policy, if the
amount of available funds for any payment 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 interest and principal to the noteholders
(including required payments of interest to the class B noteholders
after an event of default under the indenture).
If the amount on deposit in the spread account is zero, after any withdrawals
for the benefit of the noteholders, and there is a default under the policy, any
remaining losses on the receivables will be borne directly by the class B
noteholders (up to the full class B note balance at the time a loss is incurred)
and then by the class A noteholders pro rata (to the extent of the outstanding
class or classes of class A notes at such time). See "Risk Factors -- You May
Incur a Loss if there is a Default Under the Policy," "-- Some Notes are More at
Risk than Others if there are Losses on the Receivables," "The Notes --
Accounts" and "--Payments on the Notes" in this prospectus supplement.
The trust will be required to maintain a specified amount on deposit in the
spread account through the deposit of excess collections, if any, on the
receivables. The required spread amount will be set forth in the indenture.
In no event will the amount on deposit in the spread account exceed the
aggregate outstanding principal balance of the notes.
Any amount on deposit in the spread account on any payment 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
certificateholder. Any such distribution to the 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.
If net losses on the receivables pool exceed the levels set forth in the
insurance and reimbursement agreement among the seller, the trust, the UAC
funding subsidiaries participating in the transaction (the "Funding
Subsidiaries"), UAC, in its individual capacity and as servicer, and the
insurer, the required spread amount will be increased to the amount set forth in
the indenture. The required spread amount may be increased:
(1) if the servicer defaults, fails to perform its obligations, or breaches
a material representation under the trust and servicing agreement, the
indenture or the insurance and reimbursement agreement; or
(2) upon the occurrence of certain other events described in the insurance
and reimbursement agreement generally involving the performance of the
receivables.
See "The Notes -- Accounts" and " -- The Policy" in this prospectus supplement.
The Policy
The seller will obtain an unconditional and irrevocable insurance policy.
Subject to the terms of the policy, the insurer will guarantee the payment of
monthly interest and monthly principal on the notes up to the policy amount.
In addition, the policy will cover any amount paid or required to be paid by the
trust to the noteholders, which amount is sought to be recovered as a voidable
preference by a trustee in bankruptcy of UAC, the seller or any of the Funding
Subsidiaries under the United States Bankruptcy Code in accordance with a final
nonappealable order of a court having competent jurisdiction.
See "The Notes -- The Policy" in this prospectus supplement.
Policy Amount
The policy amount with respect to any payment date will be:
(a) the sum of:
(1) the monthly servicing fee;
(2) monthly interest;
(3) the lesser of (i) the outstanding aggregate principal balance of all
classes of notes on such payment date (after giving effect to any
distributions of available funds and any funds withdrawn from the
spread account to pay monthly principal on such payment date) and (ii)
the initial aggregate principal balances of the notes minus all amounts
withdrawn from the spread account or drawn on the policy with respect
to principal;
less:
(b) all amounts on deposit in the spread account on such payment date (after
giving effect to any amounts withdrawn from the spread account on such
date).
Insurer
MBIA Insurance Corporation is the insurer and, subject to the terms of the
policy, will unconditionally and irrevocably guarantee the payment of monthly
interest and monthly principal. See "The Insurer" in this prospectus supplement.
Indenture Default; Control by the Insurer and Noteholders
Certain events will cause events of default under the indenture. If an indenture
default occurs and the insurer is not in default under the policy, the insurer
may declare the indenture default and control the remedy for such default. If an
indenture default occurs and the insurer is in default under the policy, the
noteholders holding notes evidencing at least two-thirds of the outstanding
principal balances of the notes may declare the indenture default and control
the remedy.
The party that controls the remedy may give notice of acceleration and declare
the principal of the notes to be immediately due and payable. The rights and
remedies of the insurer and the noteholders upon the occurrence of an indenture
default may include the right to direct the indenture trustee to liquidate the
property of the trust. The rights and remedies are further described under "The
Indenture -- Default under the Indenture" in the accompanying prospectus. See
also "Risk Factors -- Noteholders Have a Limited Right to Declare Indenture
Defaults or Remedies" in this prospectus supplement.
Legal Investment
The class A-1 notes will be eligible for purchase by money market funds under
Rule 2a-7 of the Investment Company Act of 1940, as amended.
Optional Redemption
The servicer has the right to purchase all of the receivables as of the last day
of any collection period on which the aggregate principal balance of all classes
of the notes on the related payment date (after the payment of all amounts to be
paid on such payment date) will be equal to or less than 10% of the initial
aggregate principal balance of all classes of notes. We will redeem the notes as
a result of such a purchase of the receivables.
The purchase price for the receivables will be equal to the fair market value of
the receivables; provided that such amount may not be less than the sum of:
(1) 100% of the outstanding aggregate principal balance of all classes of
notes,
(2) accrued and unpaid interest on the outstanding principal balances of
all outstanding classes of notes at the weighted average interest rate
of such notes, and
(3) any amounts due the insurer.
Increase of the Class A-4 Interest Rate and the Class B Interest Rate
If the servicer does not exercise its rights with respect to the optional
redemption on the first payment date that the optional redemption is permitted,
each of the class A-4 interest rate and the class B interest rate will be
increased by 0.50% after such date.
Tax Status
In the opinion of special tax counsel to the seller, for federal income tax
purposes:
o the class A notes will be characterized as debt,
o the class B notes may be characterized as debt or as equity, and
o the trust will not be treated as an association taxable as a
corporation or as a "publicly traded partnership" taxable as a
corporation.
The owner trustee, the noteholders and the certificateholder will agree to treat
the notes as indebtedness for federal income tax purposes. Should the class B
notes be characterized as equity, a non-U.S. person, a tax-exempt entity or an
individual who is a class B noteholder may suffer adverse tax consequences.
Accordingly, such persons may not be suitable investors for the class B notes.
See "Federal Income Tax Consequences" in this prospectus supplement and in the
accompanying prospectus.
Ratings
On the closing date, each class of notes will be issued only if such class
receives ratings from Moody's Investors Service, Inc. and Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc. as follows:
Rating
------
Class Moody's S&P
----- ------- ---
A-1 P-1 A-1+
A-2 Aaa AAA
A-3 Aaa AAA
A-4 Aaa AAA
B Aaa AAA
A rating is not a recommendation to buy, sell or hold the notes and may be
subject to revision or withdrawal at any time by the assigning rating agency.
See "Risk Factors -- A Change in the Note Ratings May Adversely Affect the
Notes" in this prospectus supplement.
ERISA Considerations
The class A notes 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 notes should,
among other things, consult with experienced legal counsel in determining
whether all required conditions for such purchase have been satisfied. While
exemptive relief may be available to permit benefit plans to purchase the class
B notes, benefit plan fiduciaries should consult with their tax and legal
advisors regarding the consequences of the class B notes being characterized as
equity for federal income tax purposes. Specifically, benefit plan fiduciaries
should be aware that such characterization would cause income on the class B
notes to be considered "unrelated business taxable income" for tax-exempt
investors, including benefit plans. See "Federal Income Tax Consequences" and
"ERISA Considerations" in this prospectus supplement and in the accompanying
prospectus.
<PAGE>
RISK FACTORS
You should carefully consider the risk factors set forth below and in the
accompanying prospectus as well as the other investment considerations described
in such documents as you decide whether to purchase the notes.
You May Not Be Able to Resell
the Notes There is currently no secondary market
for the notes. The underwriters
currently intend to make a market to
enable resale of the notes, but are
under no obligation to do so. As such,
we cannot assure you that a secondary
market will develop for your notes 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 notes.
The Notes Are Obligations
of the Trust Only and Are Not
Guaranteed by Any Other Party The notes are obligations of the trust
only and do not represent an interest in
or obligation of the seller, UAC, any of
their affiliates or any other party or
governmental body. Except for the
policy, the notes have not been insured
or guaranteed by any party or
governmental body. See The Notes
Payments on the Notes and The Policy and
The Insurer in this prospectus
supplement.
The Amount in the Spread Account
May Not Be Sufficient to Assure
Payment of Principal and Interest If the amount of available funds on any
payment date is not sufficient to pay
monthly interest and monthly principal
(after payment of the monthly servicing
fee) to you, the indenture trustee will
withdraw funds from the spread account,
up to the full balance of the funds on
deposit in such account.
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.
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 indenture
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 May Incur a 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 payments on the
notes. 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 make the required
payments to noteholders on a payment
date during a default by the insurer,
amounts to be distributed on the notes
on such payment date will generally be
reduced in the following order:
1. class B monthly principal,
2. class B monthly interest,
3. class A monthly principal, pro
rata, and
4. class A monthly interest, pro
rata.
See "The Receivables Pool --
Delinquencies and Net Losses" and "--
Delinquency and Credit Loss Experience"
and "The Notes -- Accounts," " --
Payments on the Notes" and "-- The
Policy" in this prospectus supplement.
Some Notes Are More at Risk Than
Others If There Are Losses on
the Receivables Principal will be paid on the notes in
alpha-numeric order, beginning with the
class A-1 notes and ending with the
class B notes, with certain exceptions
noted in this prospectus supplement if
an indenture default occurs. Because
payments of principal will be applied
first to the class A-1 notes, second to
the class A-2 notes, third to the class
A-3 notes, fourth to the class A-4
notes, and finally to the class B notes,
in the event the insurer defaults under
the policy after the class A-1 notes
have been fully or partially repaid and
before the other classes of notes have
been fully repaid, delinquencies,
defaults and losses experienced on the
receivables will have a
disproportionately greater effect on the
classes of notes which pay principal to
noteholders later.
Some Payments on the Notes Are
Subordinate to Other Payments on
the Notes Interest due on the class B notes is
subordinate in priority of payment to
interest due on the class A notes, and,
on the final maturity date for a class
of class A notes or after an event of
default under the indenture, interest
due on the class B notes is subordinated
to principal due on such class A notes.
Principal due on the class B notes is
subordinated to principal and interest
due on the class A notes. Consequently,
after an insurer default, the class B
noteholders will not receive any
interest on a payment date until the
full amount of interest on the class A
notes due on such payment date has been
paid, and, if such payment date is on or
after the final maturity date for a
class of class A notes or an event of
default under the indenture, the class B
noteholders will not receive any
interest until all principal on such
class A notes has been paid in full. No
principal will be paid on the class B
notes until each class of class A notes
has been paid in full.
In the event of a default by the
insurer, the class B notes will be more
at risk than the class A notes due to
delinquencies, defaults and losses
experienced on the receivables. See "The
Notes -- Payments on the Notes" in this
prospectus supplement.
Noteholders Have a Limited Right
to Declare Indenture Defaults
or Remedies The insurer is the only party that has
the right to declare an indenture
default and control the remedy for such
default, unless the insurer is in
default under the policy, in which case
the noteholders will have such right
subject to applicable voting
requirements.
If an indenture default occurs, the
insurer or, in certain limited
circumstances, the noteholders, will
have the right to accelerate the payment
of principal of the notes and, possibly,
to direct the indenture trustee to
liquidate the trust property.
Following an indenture default, the
indenture trustee and the owner trustee
will continue to submit claims under the
policy to enable the trust to make
payments to you each month. However,
following an indenture default, the
insurer may elect to prepay all or any
portion of the outstanding notes, plus
accrued interest.
A Change in the Note Ratings May
Adversely Affect the Notes Moodys Investors Service and Standard &
Poors Ratings Services are the rating
agencies rating the notes. The rating
for any class of notes will reflect only
the view 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 notes. A rating is
not a recommendation to buy, sell or
hold the notes.
<PAGE>
FORMATION OF THE TRUST
The trust is a business trust formed under the laws of the State of
Delaware under a trust and servicing agreement between the seller, the servicer
and the owner trustee. The trust was formed solely for the purpose of
accomplishing the transactions described in this prospectus supplement. Upon
formation, the trust will not engage in any business activity other than:
o acquiring, managing and holding the receivables and related interests
described in this prospectus supplement;
o issuing the notes and the certificate;
o making payments and distributions on the notes and the certificate;
and
o engaging in those activities, including entering into agreements, that
are necessary, suitable or convenient to accomplish the above listed
activities or are incidental to those activities.
Pursuant to an indenture between the trust and the indenture trustee, the
trust will grant a security interest in the trust assets in favor of the
indenture trustee on behalf of and for the benefit of the noteholders and the
insurer. The seller will transfer the trust assets to the owner trustee in
exchange for the certificate and the cash proceeds of the notes. The seller will
retain the certificate. UAC will service the receivables pursuant to the trust
and servicing agreement and will receive compensation for acting as the
servicer. To facilitate servicing and to minimize administrative burden and
expense, the servicer will serve as custodian of the receivables for the owner
trustee. However, the servicer will not stamp the receivables to reflect the
sale and assignment of the receivables to the trust or the indenture trustee or
make any notation of the indenture trustee's lien on the certificates of title
of the financed vehicles. In the absence of such notation on the certificates of
title, the trust or the indenture trustee may not have perfected security
interests in the financed vehicles securing the receivables. Under the terms of
the trust 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. See "Description of the Transfer
and Servicing Agreements -- Servicing Compensation and Payment of Expenses" and
"Certain Legal Aspects of the Receivables" in the accompanying prospectus.
The trust will establish a spread account for the benefit of the
noteholders and the insurer and will obtain the policy. The indenture 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 payments of interest and principal on the notes. In
such event, certain factors, such as the indenture trustee 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 noteholders. See "The Notes --
Accounts," "--Payments on the Notes" and "--The Policy" in this prospectus
supplement and "Certain Legal Aspects of the Receivables" in the accompanying
prospectus.
THE RECEIVABLES POOL
The receivables were selected from the portfolio of the Funding
Subsidiaries for purchase by the seller 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;
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 6.50%.
No selection procedures adverse to the noteholders will be utilized in
selecting the receivables to be conveyed to the trust.
The statistical information presented in this prospectus supplement is
based on the receivables as of the statistical cut-off date which is October 31,
2000.
o As of the statistical cut-off date, the receivables have an aggregate
principal balance of $434,340,011.52.
o As of the cut-off date, the receivables are expected to have an
aggregate principal balance of approximately $510,000,000.
The seller will acquire additional receivables after the statistical
cut-off date but prior to the cut-off date. In addition, some amortization of
the receivables will occur after the statistical cut-off date, and some
receivables included as of the statistical cut-off date may prepay in full or
may be determined not to meet the eligibility requirements regarding the
receivables and may not, therefore, be included in the trust. As a result, the
statistical distribution of characteristics as of the cut-off date will vary
from the statistical distribution of characteristics as of the statistical
cut-off date. However, the variance in statistical distribution of
characteristics should not be material.
The weighted average remaining maturity of the receivables is approximately
73 months as of the statistical cut-off date.
Approximately 99.96% of the aggregate principal balance of the receivables
as of October 31, 2000 are simple interest contracts which provide for equal
monthly payments. Approximately 0.04% of the aggregate principal balance of the
receivables as of October 31, 2000 are precomputed receivables originated in the
State of California. All of such precomputed receivables are rule of 78's
receivables. Approximately 31.25% of the aggregate principal balance of the
receivables as of October 31, 2000 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 October 31, 2000 were originated in the State of Texas.
The performance of the receivables in the aggregate could be adversely affected
in particular by the development of adverse economic conditions in such state.
<PAGE>
Composition of the Receivables by Financed Vehicle Type as of October 31, 2000
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
New Vehicles............. 6,506 $135,738,176.66 $138,690,474.40 12.65%
Used Vehicles............ 19,784 298,601,834.86 304,748,534.43 13.97%
------ ---------------- ---------------- -----
All Receivables.......... 26,290 $434,340,011.52 $443,439,008.83 13.56%
</TABLE>
Weighted Weighted Percent
Average Average of Aggregate
Remaining Original Principal
Term(1) Term(1) Balance(2)
------- ------- ----------
New Vehicles............. 75.5 mos. 77.0 mos. 31.25%
Used Vehicles............ 71.6 mos. 72.9 mos. 68.75
--------- --------- -------
All Receivables.......... 72.8 mos. 74.1 mos. 100.00%
(1) Based on scheduled maturity and assuming no prepayments of the receivables.
(2) Sum may not equal 100% due to rounding.
<TABLE>
<CAPTION>
Distribution of the Receivables by Financed Vehicle Model Year as of October 31, 2000
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>
1991 and earlier....................... 549 2.09% $ 3,475,814.21 0.80%
1992................................... 555 2.11 4,064,408.57 0.94
1993................................... 801 3.05 6,497,845.87 1.50
1994................................... 1,260 4.79 12,235,525.82 2.82
1995................................... 2,062 7.84 23,652,438.93 5.45
1996................................... 2,246 8.54 30,487,960.34 7.02
1997................................... 4,188 15.93 67,777,301.01 15.60
1998................................... 3,403 12.94 59,574,607.85 13.72
1999................................... 3,065 11.66 56,120,197.04 12.92
2000................................... 5,952 22.64 121,711,688.87 28.02
2001................................... 2,209 8.40 48,742,223.01 11.22
--------------------------------------------------------------
Total................................ 26,290 100.00% $434,340,011.52 100.00%
==============================================================
</TABLE>
(1) Sum may not equal 100% due to rounding.
<PAGE>
<TABLE>
<CAPTION>
Distribution of the Receivables by Contract Rate as of October 31, 2000
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%.................... 21 0.08% $ 303,406.09 0.07%
7.000 to 7.999%.................... 269 1.02 4,475,151.62 1.03
8.000 to 8.999%.................... 590 2.24 9,745,731.59 2.24
9.000 to 9.999%.................... 882 3.35 15,007,666.77 3.46
10.000 to 10.999%.................... 1,442 5.48 25,214,443.06 5.81
11.000 to 11.999%.................... 2,527 9.61 45,014,696.71 10.36
12.000 to 12.999%.................... 4,244 16.14 74,207,326.99 17.09
13.000 to 13.999%.................... 5,556 21.13 95,798,780.88 22.06
14.000 to 14.999%.................... 4,756 18.09 77,344,909.56 17.81
15.000 to 15.999%.................... 2,797 10.64 44,080,361.71 10.15
16.000 to 16.999%.................... 1,289 4.90 19,651,086.61 4.52
17.000 to 17.999%.................... 776 2.95 11,132,352.57 2.56
18.000 to 18.999%.................... 789 3.00 9,907,316.07 2.28
19.000 to 19.999%.................... 77 0.29 809,142.24 0.19
20.000 to 20.999%.................... 61 0.23 480,643.91 0.11
21.000 to 21.999%.................... 188 0.72 1,019,891.97 0.23
22.000 to 22.999%.................... 10 0.04 52,314.94 0.01
23.000 to 23.999%.................... 4 0.02 29,158.66 0.01
24.000 to 24.999%.................... 4 0.02 37,245.73 0.01
25.000 to 25.999%.................... 8 0.03 28,383.84 0.01
---------------------------------------------------------------
Total.............................. 26,290 100.00% $434,340,011.52 100.00%
==============================================================
</TABLE>
(1) Sum may not equal 100% due to rounding.
<PAGE>
Geographic Distribution of the Receivables as of October 31, 2000
<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...................... 525 2.00% $ 9,046,835 2.08%
California................... 2,551 9.70 43,425,152.32 10.00
Colorado..................... 507 1.93 7,892,783.46 1.82
Connecticut.................. 199 0.76 3,161,269.10 0.73
Delaware..................... 131 0.50 1,946,085.92 0.45
Florida...................... 1,501 5.71 24,426,651.33 5.62
Georgia...................... 1,097 4.17 20,090,937.84 4.63
Idaho........................ 103 0.39 1,603,679.74 0.37
Illinois..................... 1,651 6.28 26,239,930.09 6.04
Indiana...................... 1,260 4.79 19,227,697.47 4.43
Iowa ........................ 480 1.83 7,276,231.44 1.68
Kansas....................... 110 0.42 1,762,814.25 0.41
Kentucky..................... 561 2.13 9,024,407.66 2.08
Maine........................ 286 1.09 4,626,782.96 1.07
Maryland..................... 386 1.47 6,872,165.89 1.58
Massachusetts................ 558 2.12 8,785,514.06 2.02
Michigan..................... 691 2.63 11,634,157.13 2.68
Minnesota.................... 526 2.00 8,095,406.86 1.86
Missouri..................... 778 2.96 13,353,238.55 3.07
Nebraska..................... 247 0.94 3,446,412.01 0.79
Nevada....................... 317 1.21 5,690,595.63 1.31
New Hampshire................ 194 0.74 3,155,728.50 0.73
New Jersey................... 99 0.38 1,741,406.77 0.40
New Mexico................... 191 0.73 3,382,826.16 0.78
New York..................... 536 2.04 8,446,600.22 1.94
North Carolina............... 1,888 7.18 31,896,702.19 7.34
Ohio ........................ 952 3.62 14,264,978.14 3.28
Oklahoma..................... 1,012 3.85 16,017,707.84 3.69
Oregon....................... 248 0.94 3,727,279.44 0.86
Pennsylvania................. 431 1.64 6,671,487.13 1.54
South Carolina............... 751 2.86 13,123,368.64 3.02
South Dakota................. 10 0.04 138,559.44 0.03
Tennessee.................... 901 3.43 15,283,451.20 3.52
Texas........................ 2,481 9.44 44,544,080.41 10.26
Utah ........................ 268 1.02 4,569,915.41 1.05
Vermont...................... 151 0.57 2,431,146.58 0.56
Virginia..................... 975 3.71 15,005,691.23 3.45
Washington................... 294 1.12 5,540,653.16 1.28
Wisconsin.................... 443 1.69 6,769,679.91 1.56
----------------------------------------------------------------------------
Total..................... 26,290 100.00% $434,340,011.52 100.00%
============================================================================
</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 its predecessor. All other receivables were originated
by dealers and purchased from such dealers by UAC or its predecessor.
(3) Sum may not equal 100% due to rounding.
<TABLE>
<CAPTION>
Distribution of the Receivables by Remaining Term as of October 31, 2000
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............... 295 1.12% $ 1,032,500.51 0.24%
13 to 24 months.............. 559 2.13 3,680,141.42 0.85
25 to 36 months.............. 779 2.96 5,883,349.84 1.35
37 to 48 months.............. 1,304 4.96 12,503,276.84 2.88
49 to 60 months.............. 4,056 15.43 56,438,331.94 12.99
61 to 72 months.............. 7,913 30.10 129,551,604.30 29.83
73 to 84 months.............. 11,384 43.30 225,250,806.67 51.86
--------------------------------------------------------------------------
Total..................... 26,290 100.00% $434,340,011.52 100.00%
==========================================================================
</TABLE>
(1) Sum may not equal 100% due to rounding.
<PAGE>
Delinquencies and Net Losses
We have set forth below certain information about the experience of UAC
relating to delinquencies and net losses on the prime fixed rate retail vehicle
receivables serviced by UAC. We cannot assure you that the delinquency and net
loss experience of the receivables will be comparable to that set forth in the
following tables.
<TABLE>
<CAPTION>
Delinquency Experience (1)
At June 30,
------------------------------------------------------------------------------
1998 1999 2000
---------------------- -------------------- ------------------------
(Dollars in thousands)
Number of Number of Number of
Receivables Amount Receivables Amount Receivables Amount
----------- ------ ----------- ------ ----------- ------
<S> <C> <C> <C> <C> <C> <C>
Servicing portfolio........ 184,003 $1,978,920 213,746 $2,464,371 235,732 $2,848,150
Delinquencies
30-59 days.............. 3,179 $ 32,967 3,962 $ 41,475 4,204 $ 45,442
60-89 days.............. 1,907 20,819 1,614 16,654 2,176 25,250
90 days or more......... 657 6,993 670 6,754 886 9,710
------------------------------------------------------------------------------
Total delinquencies........ 5,743 $ 60,779 6,246 $ 64,883 7,266 $ 80,402
==============================================================================
Total delinquencies as a
percent of servicing
portfolio............... 3.12% 3.07% 2.92% 2.63% 3.08% 2.82%
</TABLE>
At September 30, At September 30,
1999 2000
------------------------ -------------------------
Number of Number of
Receivables Amount Receivables Amount
----------- ------ ----------- ------
Servicing portfolio........ 217,296 $2,530,654 252,293 $3,133,025
Delinquencies
30-59 days.............. 4,714 $ 50,734 5,120 $ 56,184
60-89 days.............. 1,955 20,439 2,482 29,062
90 days or more......... 875 9,291 1,158 12,918
-----------------------------------------------------
Total delinquencies........ 7,544 $ 80,464 8,760 $ 98,164
=====================================================
Total delinquencies as a
percent of servicing
portfolio............... 3.47% 3.18% 3.47% 3.13%
<PAGE>
<TABLE>
<CAPTION>
Credit Loss Experience (1)
Year Ended June 30,
------------------------------------------------------------------------------
1998 1999 2000
---------------------- --------------------- -------------------------
(Dollars in thousands)
Number of Number of Number of
Receivables Amount Receivables Amount Receivables Amount
----------- ------ ----------- ------ ----------- ------
<S> <C> <C> <C> <C> <C> <C>
Avg. servicing portfolio(2) 179,822 $1,922,977 202,187 $2,269,177 221,948 $2,610,803
-------------------------------------------------------------------------------
Gross charge-offs.......... 7,909 $ 87,325 7,752 $ 82,437 8,548 $ 95,815
Recoveries (3)............. 33,546 32,526 38,863
---------- ---------- ----------
Net losses................. $ 53,779 $ 49,911 $ 56,952
========== ========== ==========
Gross charge-offs as a % of
average servicing
portfolio(4)............ 4.40% 4.54% 3.83% 3.63% 3.85% 3.67%
Recoveries as a % of gross
charge-offs............. 38.41% 39.45% 40.56%
Net losses as a % of
average servicing
portfolio(4).. 2.80% 2.20% 2.18%
</TABLE>
Three Months Ended Three Months Ended
September 30, 1999 (5) September 30, 2000 (5)
-------------------------- ------------------------
Number of Number of
Receivables Amount Receivables Amount
----------- ------ ----------- ------
Avg. servicing portfolio(2) 216,508 $2,515,461 246,406 $3,031,640
-------------------- --------------------
Gross charge-offs.......... 2,003 $ 21,088 2,306 $ 27,099
Recoveries (3)............. 8,672 11,112
---------- ----------
Net losses................. $ 12,417 $ 15,987
========== ==========
Gross charge-offs as a % of
average servicing
portfolio(4)............ 3.70% 3.35% 3.74% 3.58%
Recoveries as a % of gross
charge-offs............. 41.12% 41.01%
Net losses as a % of
average servicing
portfolio(4).. 1.97% 2.11%
(1) There is generally no recourse to dealers under any of the receivables in
the portfolio serviced by UAC, except to the extent of representations and
warranties made by dealers in connection with such receivables.
(2) Equals the monthly arithmetic average, and includes receivables sold in
prior securitization transactions.
(3) Recoveries include recoveries on receivables previously charged off, cash
recoveries and unsold repossessed assets carried at fair market value.
(4) Variation in the size of the portfolio serviced by UAC will affect the
percentages in "Gross charge-offs as a percentage of average servicing
portfolio" and "Net losses as a percentage of average servicing portfolio."
(5) Percentages are annualized in "Gross charge-offs as a percentage of average
servicing portfolio" and "Net losses as a percentage of average servicing
portfolio" for partial years.
<PAGE>
Delinquency and Credit Loss Experience
As indicated in the foregoing delinquency experience table, the delinquency
percentage for UAC's prime automobile portfolio based upon outstanding balances
of receivables 30 days past due and over was 3.13% at September 30, 2000,
compared to 3.18% at September 30, 1999, and 2.82% at June 30, 2000.
As indicated in the foregoing credit loss experience table, net credit
losses on UAC's prime automobile portfolio totaled approximately $16.0 million
for the quarter ended September 30, 2000, or 2.11% (annualized) of the average
servicing portfolio, compared to $12.4 million, or 1.97% (annualized) for the
quarter ended September 30, 1999. For the year ended June 30, 2000, net credit
losses on UAC's prime automobile portfolio totaled approximately $57.0 million,
or 2.18% of the average servicing portfolio.
Notwithstanding modest increases during the quarter ended September 30,
2000, delinquency and credit loss percentages are within management's
expectations and continue to exhibit relative stability. UAC attributes the
overall strength of the portfolio to strong underwriting guidelines, based on
improved risk-based portfolio analysis, and focused collection efforts.
Recoveries as a percentage of gross charge-offs on the Tier I portfolio
improved to 41.01% for the quarter ended September 30, 2000, compared to 40.56%
and 41.12% for the year ended June 30, 2000 and the quarter ended September 30,
1999, respectively. Overall recovery percentages have been relatively stable
over the past year, bolstered in part by the significantly higher recovery rates
UAC is able to realize by disposing of repossessed vehicles throughout its
retail operation rather than at auction. Approximately 15% of repossessed
automobiles were sold at UAC's retail operation during the quarter ended
September 30, 2000.
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.
<PAGE>
WEIGHTED AVERAGE LIFE OF THE NOTES
Information regarding certain maturity and prepayment considerations about
the notes is described under "Weighted Average Life of the Securities" in the
accompanying prospectus. Because the rate of payment on principal of the notes
depends primarily on the rate of payment of the receivables (including voluntary
prepayments, principal in respect of receivables as to which there has been a
default and principal in respect of required repurchases or purchases of
receivables by UAC or the servicer), final payment on each class of notes could
occur much earlier than the applicable final maturity date. You will bear the
risk of being able to reinvest early principal payments on the notes at yields
at least equal to the yield on your notes.
Prepayments on retail installment sale contracts, such as the receivables,
can be measured relative to a prepayment standard or model. The model used in
this prospectus supplement 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 S-22 to S-24 have been prepared on the basis of certain
assumptions, including that:
o all payments on the receivables are made on the last day of each month
and include 30 days of interest beginning November 2000;
o payments on the class A-1 notes are paid in cash on each payment date
commencing January 8, 2001 and on the eighth calendar day of each
subsequent month or, if such day is not a business day, on the next
business day, in accordance with the description set forth under "The
Notes -- Payments on the Notes";
o payments on the notes other than the class A-1 notes are paid in cash
on the eighth calendar day of each month in accordance with the
description set forth under "The Notes -- Payments on the Notes";
o the closing date will be November 21, 2000;
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 servicer exercises its rights with respect to the optional
purchase of the receivables on the first payment date that it is
entitled to exercise such rights.
The tables indicate the projected weighted average life of each class of notes
and set forth the percentage of the initial aggregate principal balance of each
class of notes that is projected to be outstanding after each of the payment
dates shown at specified ABS percentages. The tables also assume that (i) the
receivables have an aggregate principal balance of $510,000,000 as of November
16, 2000, the cut-off date, and (ii) the receivables have been aggregated into
five hypothetical pools with all of the receivables within each such pool having
the characteristics described below:
<PAGE>
<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 $ 3,393,169.84 16.896% 78 18
2 22,515,540.72 12.960% 42 41
3 64,188,144.98 12.708% 60 59
4 147,411,303.76 13.444% 70 70
5 272,491,840.70 13.818% 82 81
---------------
Total $510,000,000.00
===============
</TABLE>
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 S-22 to
S-24. We have provided these hypothetical illustrations using the assumptions
listed above to give you a general illustration of how the aggregate principal
balance of the notes 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 five hypothetical pools could produce slower or
faster rates of principal payments than indicated in the table at the various
specified ABS rates. Any difference between such hypothetical assumptions and
the actual characteristics, performance and prepayment experience of the
receivables will cause the actual percentages of the initial principal balances
of the notes outstanding over time and the weighted average lives of the notes
to vary from what is illustrated in the tables below.
Important notice regarding calculation of the weighted average life
and the assumptions upon which the tables on pages S-22 to S-24 are
based
The weighted average life of a note is determined by: (a)
multiplying the amount of each principal payment on the
applicable note by the number of years from the assumed closing
date to the related payment date, (b) adding the results, and (c)
dividing the sum by the related initial principal amount of such
note.
The tables on pages S-22 to S-24 have been prepared based on
(and should be read in conjunction with) the assumptions
described on pages S-20 and S-21 (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 Note Balance at Various ABS Percentages (1)
Class A-1 Notes Class A-2 Notes
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Payment Date 1.0% 1.4% 1.6% 1.8% 2.5% 1.0% 1.4% 1.6% 1.8% 2.5%
------------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Closing Date..............100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
1 January, 2001........ 55.3% 45.3% 36.5% 30.5% 14.4% 100.0% 100.0% 100.0% 100.0% 100.0%
2 February, 2001....... 33.1% 18.4% 6.8% 0.0% 0.0% 100.0% 100.0% 100.0% 100.0% 92.3%
3 March, 2001.......... 11.0% 0.0% 0.0% 0.0% 0.0% 100.0% 97.3% 93.2% 90.3% 80.2%
4 April, 2001.......... 0.0% 0.0% 0.0% 0.0% 0.0% 96.5% 88.9% 84.3% 80.8% 68.2%
5 May, 2001............ 0.0% 0.0% 0.0% 0.0% 0.0% 89.5% 80.5% 75.5% 71.3% 56.4%
6 June, 2001........... 0.0% 0.0% 0.0% 0.0% 0.0% 82.6% 72.2% 66.7% 61.9% 44.7%
7 July, 2001........... 0.0% 0.0% 0.0% 0.0% 0.0% 75.7% 64.0% 58.1% 52.6% 33.2%
8 August, 2001......... 0.0% 0.0% 0.0% 0.0% 0.0% 68.8% 55.9% 49.5% 43.4% 21.8%
9 September, 2001...... 0.0% 0.0% 0.0% 0.0% 0.0% 62.0% 47.9% 41.0% 34.3% 10.6%
10 October, 2001........ 0.0% 0.0% 0.0% 0.0% 0.0% 55.2% 40.0% 32.6% 25.3% 0.0%
11 November, 2001....... 0.0% 0.0% 0.0% 0.0% 0.0% 48.5% 32.2% 24.3% 16.4% 0.0%
12 December, 2001....... 0.0% 0.0% 0.0% 0.0% 0.0% 41.8% 24.5% 16.1% 7.6% 0.0%
13 January, 2002........ 0.0% 0.0% 0.0% 0.0% 0.0% 35.1% 16.9% 7.9% 0.0% 0.0%
14 February, 2002....... 0.0% 0.0% 0.0% 0.0% 0.0% 28.5% 9.4% 0.0% 0.0% 0.0%
15 March, 2002.......... 0.0% 0.0% 0.0% 0.0% 0.0% 22.0% 1.9% 0.0% 0.0% 0.0%
16 April, 2002.......... 0.0% 0.0% 0.0% 0.0% 0.0% 15.5% 0.0% 0.0% 0.0% 0.0%
17 May, 2002............ 0.0% 0.0% 0.0% 0.0% 0.0% 9.0% 0.0% 0.0% 0.0% 0.0%
18 June, 2002........... 0.0% 0.0% 0.0% 0.0% 0.0% 2.7% 0.0% 0.0% 0.0% 0.0%
19 July, 2002........... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
20 August, 2002......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
21 September, 2002...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
22 October, 2002........ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
23 November, 2002....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
24 December, 2002....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
25 January, 2003........ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
26 February, 2003....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
27 March, 2003.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
28 April, 2003.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
29 May, 2003............ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
30 June, 2003........... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
31 July, 2003........... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
32 August, 2003......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
33 September, 2003...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
34 October, 2003........ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
35 November, 2003....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
36 December, 2003....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
37 January, 2004........ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
38 February, 2004....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
39 March, 2004.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
40 April, 2004.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
41 May, 2004............ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
42 June, 2004........... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
43 July, 2004........... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
44 August, 2004......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
45 September, 2004...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
46 October, 2004........ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
47 November, 2004....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
48 December, 2004....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
49 January, 2005........ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
50 February, 2005....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
51 March, 2005.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
52 April, 2005.......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
53 May, 2005............ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
54 June, 2005........... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
55 July, 2005........... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
56 August, 2005......... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
57 September, 2005...... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
58 October, 2005........ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
59 November, 2005....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Weighted Average
Life (years)......... 0.21 0.18 0.17 0.16 0.14 0.99 0.82 0.75 0.70 0.55
</TABLE>
(1) See pages S-20 and S-21 of this prospectus supplement for the important
notice regarding calculation of the weighted average life and the
assumptions upon which these tables are based.
<PAGE>
<TABLE>
<CAPTION>
Percent of Initial Note Balance at Various ABS Percentages (1)
Class A-3 Notes Class A-4 Notes
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Payment Date 1.0% 1.4% 1.6% 1.8% 2.5% 1.0% 1.4% 1.6% 1.8% 2.5%
------------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Closing Date..............100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
1 January, 2001........100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
2 February, 2001.......100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
3 March, 2001..........100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
4 April, 2001..........100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
5 May, 2001............100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
6 June, 2001...........100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
7 July, 2001...........100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
8 August, 2001.........100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
9 September, 2001......100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
10 October, 2001........100.0% 100.0% 100.0% 100.0% 99.6% 100.0% 100.0% 100.0% 100.0% 100.0%
11 November, 2001.......100.0% 100.0% 100.0% 100.0% 91.4% 100.0% 100.0% 100.0% 100.0% 100.0%
12 December, 2001.......100.0% 100.0% 100.0% 100.0% 83.3% 100.0% 100.0% 100.0% 100.0% 100.0%
13 January, 2002........100.0% 100.0% 100.0% 99.2% 75.3% 100.0% 100.0% 100.0% 100.0% 100.0%
14 February, 2002.......100.0% 100.0% 99.9% 92.8% 67.5% 100.0% 100.0% 100.0% 100.0% 100.0%
15 March, 2002..........100.0% 100.0% 93.9% 86.4% 59.8% 100.0% 100.0% 100.0% 100.0% 100.0%
16 April, 2002..........100.0% 95.9% 88.0% 80.1% 52.2% 100.0% 100.0% 100.0% 100.0% 100.0%
17 May, 2002............100.0% 90.4% 82.2% 73.9% 44.8% 100.0% 100.0% 100.0% 100.0% 100.0%
18 June, 2002...........100.0% 85.0% 76.4% 67.8% 37.4% 100.0% 100.0% 100.0% 100.0% 100.0%
19 July, 2002........... 97.3% 79.6% 70.7% 61.8% 30.3% 100.0% 100.0% 100.0% 100.0% 100.0%
20 August, 2002......... 92.6% 74.3% 65.1% 55.8% 23.3% 100.0% 100.0% 100.0% 100.0% 100.0%
21 September, 2002...... 88.0% 69.0% 59.5% 50.0% 16.4% 100.0% 100.0% 100.0% 100.0% 100.0%
22 October, 2002........ 83.4% 63.9% 54.1% 44.3% 9.7% 100.0% 100.0% 100.0% 100.0% 100.0%
23 November, 2002....... 78.8% 58.8% 48.7% 38.6% 3.1% 100.0% 100.0% 100.0% 100.0% 100.0%
24 December, 2002....... 74.2% 53.7% 43.4% 33.1% 0.0% 100.0% 100.0% 100.0% 100.0% 94.7%
25 January, 2003........ 69.7% 48.7% 38.2% 27.6% 0.0% 100.0% 100.0% 100.0% 100.0% 84.7%
26 February, 2003....... 65.3% 43.8% 33.1% 22.3% 0.0% 100.0% 100.0% 100.0% 100.0% 75.0%
27 March, 2003.......... 60.8% 39.0% 28.1% 17.1% 0.0% 100.0% 100.0% 100.0% 100.0% 65.5%
28 April, 2003..........56.5% 34.3% 23.1% 11.9% 0.0% 100.0% 100.0% 100.0% 100.0% 56.3%
29 May, 2003............52.1% 29.6% 18.3% 6.9% 0.0% 100.0% 100.0% 100.0% 100.0% 47.4%
30 June, 2003...........47.8% 25.0% 13.5% 2.0% 0.0% 100.0% 100.0% 100.0% 100.0% 38.7%
31 July, 2003...........43.6% 20.5% 8.9% 0.0% 0.0% 100.0% 100.0% 100.0% 95.6% 30.4%
32 August, 2003.........39.4% 16.0% 4.3% 0.0% 0.0% 100.0% 100.0% 100.0% 88.1% 22.2%
33 September, 2003......35.2% 11.7% 0.0% 0.0% 0.0% 100.0% 100.0% 99.7% 80.9% 0.0%
34 October, 2003........31.1% 7.4% 0.0% 0.0% 0.0% 100.0% 100.0% 92.8% 73.8% 0.0%
35 November, 2003.......27.0% 3.2% 0.0% 0.0% 0.0% 100.0% 100.0% 86.0% 66.9% 0.0%
36 December, 2003.......23.0% 0.0% 0.0% 0.0% 0.0% 100.0% 98.6% 79.4% 60.3% 0.0%
37 January, 2004........19.1% 0.0% 0.0% 0.0% 0.0% 100.0% 92.2% 73.0% 53.8% 0.0%
38 February, 2004.......15.2% 0.0% 0.0% 0.0% 0.0% 100.0% 85.9% 66.7% 47.5% 0.0%
39 March, 2004..........11.3% 0.0% 0.0% 0.0% 0.0% 100.0% 79.8% 60.7% 41.4% 0.0%
40 April, 2004.......... 7.5% 0.0% 0.0% 0.0% 0.0% 100.0% 73.9% 54.7% 35.6% 0.0%
41 May, 2004............ 3.9% 0.0% 0.0% 0.0% 0.0% 100.0% 68.3% 49.2% 30.1% 0.0%
42 June, 2004........... 0.5% 0.0% 0.0% 0.0% 0.0% 100.0% 62.8% 43.8% 24.7% 0.0%
43 July, 2004........... 0.0% 0.0% 0.0% 0.0% 0.0% 95.3% 57.5% 38.6% 0.0% 0.0%
44 August, 2004......... 0.0% 0.0% 0.0% 0.0% 0.0% 89.9% 52.4% 33.6% 0.0% 0.0%
45 September, 2004...... 0.0% 0.0% 0.0% 0.0% 0.0% 84.6% 47.4% 28.7% 0.0% 0.0%
46 October, 2004........ 0.0% 0.0% 0.0% 0.0% 0.0% 79.3% 42.5% 24.0% 0.0% 0.0%
47 November, 2004....... 0.0% 0.0% 0.0% 0.0% 0.0% 74.2% 37.8% 0.0% 0.0% 0.0%
48 December, 2004....... 0.0% 0.0% 0.0% 0.0% 0.0% 69.2% 33.3% 0.0% 0.0% 0.0%
49 January, 2005........ 0.0% 0.0% 0.0% 0.0% 0.0% 64.2% 28.9% 0.0% 0.0% 0.0%
50 February, 2005....... 0.0% 0.0% 0.0% 0.0% 0.0% 59.4% 24.6% 0.0% 0.0% 0.0%
51 March, 2005.......... 0.0% 0.0% 0.0% 0.0% 0.0% 54.6% 0.0% 0.0% 0.0% 0.0%
52 April, 2005.......... 0.0% 0.0% 0.0% 0.0% 0.0% 49.9% 0.0% 0.0% 0.0% 0.0%
53 May, 2005............ 0.0% 0.0% 0.0% 0.0% 0.0% 45.4% 0.0% 0.0% 0.0% 0.0%
54 June, 2005........... 0.0% 0.0% 0.0% 0.0% 0.0% 40.9% 0.0% 0.0% 0.0% 0.0%
55 July, 2005........... 0.0% 0.0% 0.0% 0.0% 0.0% 36.5% 0.0% 0.0% 0.0% 0.0%
56 August, 2005......... 0.0% 0.0% 0.0% 0.0% 0.0% 32.3% 0.0% 0.0% 0.0% 0.0%
57 September, 2005...... 0.0% 0.0% 0.0% 0.0% 0.0% 28.1% 0.0% 0.0% 0.0% 0.0%
58 October, 2005........ 0.0% 0.0% 0.0% 0.0% 0.0% 24.1% 0.0% 0.0% 0.0% 0.0%
59 November, 2005....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Weighted Average
Life (years)......... 2.57 2.17 2.00 1.86 1.46 4.40 3.79 3.49 3.21 2.48
</TABLE>
(1) See pages S-20 and S-21 of this prospectus supplement for the important
notice regarding calculation of the weighted average life and the
assumptions upon which these tables are based.
<PAGE>
<TABLE>
<CAPTION>
Percent of Initial Note Balance at Various ABS Percentages (1)
Class B Notes
<S> <C> <C> <C> <C> <C>
Payment Date 1.0% 1.4% 1.6% 1.8% 2.5%
------------ ------ ------ ------ ------ ------
Closing Date.............. 100.0% 100.0% 100.0% 100.0% 100.0%
1 January, 2001........ 100.0% 100.0% 100.0% 100.0% 100.0%
2 February, 2001....... 100.0% 100.0% 100.0% 100.0% 100.0%
3 March, 2001.......... 100.0% 100.0% 100.0% 100.0% 100.0%
4 April, 2001.......... 100.0% 100.0% 100.0% 100.0% 100.0%
5 May, 2001............ 100.0% 100.0% 100.0% 100.0% 100.0%
6 June, 2001........... 100.0% 100.0% 100.0% 100.0% 100.0%
7 July, 2001........... 100.0% 100.0% 100.0% 100.0% 100.0%
8 August, 2001......... 100.0% 100.0% 100.0% 100.0% 100.0%
9 September, 2001...... 100.0% 100.0% 100.0% 100.0% 100.0%
10 October, 2001........ 100.0% 100.0% 100.0% 100.0% 100.0%
11 November, 2001....... 100.0% 100.0% 100.0% 100.0% 100.0%
12 December, 2001....... 100.0% 100.0% 100.0% 100.0% 100.0%
13 January, 2002........ 100.0% 100.0% 100.0% 100.0% 100.0%
14 February, 2002....... 100.0% 100.0% 100.0% 100.0% 100.0%
15 March, 2002.......... 100.0% 100.0% 100.0% 100.0% 100.0%
16 April, 2002.......... 100.0% 100.0% 100.0% 100.0% 100.0%
17 May, 2002............ 100.0% 100.0% 100.0% 100.0% 100.0%
18 June, 2002........... 100.0% 100.0% 100.0% 100.0% 100.0%
19 July, 2002........... 100.0% 100.0% 100.0% 100.0% 100.0%
20 August, 2002......... 100.0% 100.0% 100.0% 100.0% 100.0%
21 September, 2002...... 100.0% 100.0% 100.0% 100.0% 100.0%
22 October, 2002........ 100.0% 100.0% 100.0% 100.0% 100.0%
23 November, 2002....... 100.0% 100.0% 100.0% 100.0% 100.0%
24 December, 2002....... 100.0% 100.0% 100.0% 100.0% 100.0%
25 January, 2003........ 100.0% 100.0% 100.0% 100.0% 100.0%
26 February, 2003....... 100.0% 100.0% 100.0% 100.0% 100.0%
27 March, 2003.......... 100.0% 100.0% 100.0% 100.0% 100.0%
28 April, 2003.......... 100.0% 100.0% 100.0% 100.0% 100.0%
29 May, 2003............ 100.0% 100.0% 100.0% 100.0% 100.0%
30 June, 2003........... 100.0% 100.0% 100.0% 100.0% 100.0%
31 July, 2003........... 100.0% 100.0% 100.0% 100.0% 100.0%
32 August, 2003......... 100.0% 100.0% 100.0% 100.0% 100.0%
33 September, 2003...... 100.0% 100.0% 100.0% 100.0% 0.0%
34 October, 2003........ 100.0% 100.0% 100.0% 100.0% 0.0%
35 November, 2003....... 100.0% 100.0% 100.0% 100.0% 0.0%
36 December, 2003....... 100.0% 100.0% 100.0% 100.0% 0.0%
37 January, 2004........ 100.0% 100.0% 100.0% 100.0% 0.0%
38 February, 2004....... 100.0% 100.0% 100.0% 100.0% 0.0%
39 March, 2004.......... 100.0% 100.0% 100.0% 100.0% 0.0%
40 April, 2004.......... 100.0% 100.0% 100.0% 100.0% 0.0%
41 May, 2004............ 100.0% 100.0% 100.0% 100.0% 0.0%
42 June, 2004........... 100.0% 100.0% 100.0% 100.0% 0.0%
43 July, 2004........... 100.0% 100.0% 100.0% 0.0% 0.0%
44 August, 2004......... 100.0% 100.0% 100.0% 0.0% 0.0%
45 September, 2004...... 100.0% 100.0% 100.0% 0.0% 0.0%
46 October, 2004........ 100.0% 100.0% 100.0% 0.0% 0.0%
47 November, 2004....... 100.0% 100.0% 0.0% 0.0% 0.0%
48 December, 2004....... 100.0% 100.0% 0.0% 0.0% 0.0%
49 January, 2005........ 100.0% 100.0% 0.0% 0.0% 0.0%
50 February, 2005....... 100.0% 100.0% 0.0% 0.0% 0.0%
51 March, 2005.......... 100.0% 0.0% 0.0% 0.0% 0.0%
52 April, 2005.......... 100.0% 0.0% 0.0% 0.0% 0.0%
53 May, 2005............ 100.0% 0.0% 0.0% 0.0% 0.0%
54 June, 2005........... 100.0% 0.0% 0.0% 0.0% 0.0%
55 July, 2005........... 100.0% 0.0% 0.0% 0.0% 0.0%
56 August, 2005......... 100.0% 0.0% 0.0% 0.0% 0.0%
57 September, 2005...... 100.0% 0.0% 0.0% 0.0% 0.0%
58 October, 2005........ 100.0% 0.0% 0.0% 0.0% 0.0%
59 November, 2005....... 0.0% 0.0% 0.0% 0.0% 0.0%
Weighted Average
Life (years)......... 4.96 4.30 3.96 3.63 2.80
</TABLE>
(1) See pages S-20 and S-21 of this prospectus supplement for the important
notice regarding calculation of the weighted average life and the
assumptions upon which these tables are based.
<PAGE>
YIELD AND PREPAYMENT CONSIDERATIONS
Monthly Interest will be distributed to noteholders on each payment date to
the extent of the interest rate applicable to each class of notes applied to the
aggregate principal balance for each class of notes, as of the preceding payment
date or the closing date, as applicable (after giving effect to payments of
principal on such preceding payment date). See "The Notes -- Payments on the
Notes" in this prospectus supplement.
Upon a full or partial prepayment on a receivable, noteholders should
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.
The receivables will have different contract rates. The contract rate on a
small percentage of the receivables will not exceed the sum of:
(1) the weighted average of the interest rates on the notes;
(2) the per annum rate used to calculate the insurance premium paid to the
insurer; and
(3) the per annum rate used to calculate the monthly servicing fee.
Disproportionate rates of prepayments between receivables with higher and
lower contract rates could affect the ability of the trust to pay Monthly
Interest to you. See "Risk Factors -- Rapid Prepayments May Reduce Your
Anticipated Yield" and "Weighted Average Life of the Securities" in the
accompanying prospectus.
THE NOTES
The notes will be issued by the trust pursuant to the indenture, and the
certificate will be issued pursuant to the trust and servicing agreement. You
may request a copy of these agreements (without exhibits) by contacting the
servicer at the address set forth under "Reports to Noteholders" in this
prospectus supplement. We do not claim that the following summary is complete.
For a more detailed description of the agreements, you should read the indenture
and the trust and servicing agreement.
Sale and Assignment of Receivables
We have described (1) the conveyance of the receivables from each of the
Funding Subsidiaries to the seller pursuant to purchase agreements among each
Funding Subsidiary, UAC and the seller, (2) the conveyance of the receivables
from the seller to the trust pursuant to the trust and servicing agreement, and
(3) the grant of a security interest in the receivables from the trust to the
indenture trustee pursuant to the indenture in the accompanying prospectus under
the heading "Description of the Transfer and Servicing Agreements -- Sale and
Assignment of Receivables."
Accounts
In addition to the collection account, the property of the trust will
include the spread account and the payahead account.
Spread Account. On the closing date, the indenture trustee will establish
the spread account for the benefit of the noteholders and the insurer. The
amount held in the spread account will increase up to the required spread amount
by the deposit of payments on the receivables not used to make payments to the
noteholders, the insurer and the servicer for the monthly servicing fee and any
permitted reimbursements of outstanding advances on any payment date. Although
we intend for the amount on deposit in the spread account to grow over time to
equal the required spread amount through monthly deposits of any excess
collections on the receivables, we cannot assure you that such growth will
actually occur. On each payment date, any amounts on deposit in the spread
account after the payment of any amounts owed to the noteholders and the insurer
in excess of the required spread amount will be distributed to the
certificateholder.
Under the terms of the indenture, the indenture trustee will withdraw funds
from the spread account, up to the amount on deposit in such account, and
transfer such funds to the collection account for any deficiency of the monthly
servicing fee, Monthly Interest or Monthly Principal, as further described below
under "-- Payments on the Notes," prior to making any draw on the policy.
In the event that the balance of the spread account is reduced to zero and
there is a default under the policy on any payment date, the trust will depend
solely on current distributions on the receivables to make payments of principal
and interest on the notes. In addition, because the market value of motor
vehicles generally declines with age and because of difficulties that may be
encountered in enforcing motor vehicle contracts as described in the
accompanying prospectus under "Certain Legal Aspects of the Receivables," the
servicer may not recover the entire amount due on such receivables in the event
of a repossession and resale of a financed vehicle securing a receivable in
default. In such event, the class B noteholders may suffer a corresponding loss
up to the extent of the outstanding principal balance of the class B notes at
such time. Any remaining losses will be borne pro rata by the class A
noteholders (based upon the then relative outstanding principal balance of each
class of class A notes).
Payahead Account. The servicer will establish a payahead account in the
name of the indenture trustee on behalf of obligors on the receivables and the
noteholders. The payahead account will initially be maintained with the
indenture trustee. To the extent required by the trust and servicing agreement,
early payments by or on behalf of obligors on precomputed receivables will be
deposited in the payahead account until such time as the payment becomes due.
Until such time as payments are transferred from the payahead account to the
collection account, they will not constitute collected interest or collected
principal and will not be available for payment to noteholders. We will pay the
interest earned on the balance in the payahead account to the servicer each
month. We will apply collections received on a precomputed receivable during a
collection period first to any overdue scheduled payment on such receivable,
then to the scheduled payment on such receivable due in such collection period.
If the amount collected on a precomputed receivable exceeds the amount required
for any overdue scheduled payment or scheduled payment, but is insufficient to
prepay the precomputed receivable in full, then generally such excess
collections will be transferred to and kept in the payahead account until such
amount may be applied either to a later scheduled payment or to prepay such
receivable in full.
Advances
With respect to each receivable delinquent more than 30 days at the end of
a collection period, the servicer will make an advance in an amount equal to 30
days of interest, but only if the servicer, in its sole discretion, expects to
recover the advance from subsequent collections on the receivable. The servicer
will deposit the advance in the collection account on or before the second
business day before the payment date. The servicer will recover its advance (1)
from subsequent payments by or on behalf of the respective obligor, (2) from
insurance proceeds, or (3) upon the servicer's determination that reimbursement
from the preceding sources is unlikely, from any collections made on other
receivables.
Payments on the Notes
Available Funds. The servicer will deposit in the collection account the
aggregate principal and interest payments, including full and partial
prepayments (except certain prepayments in respect of precomputed receivables as
described above under "--Accounts") received on all receivables with respect to
the preceding collection period. The funds available for distribution on the
next payment date ("Available Funds") will consist of:
o all payments on the simple interest receivables received during the
related collection period;
o the scheduled payments received from obligors on precomputed
receivables;
o interest earned on funds on deposit in the collection account;
o the net amount to be transferred from the payahead account to the
collection account for the related payment date;
o all advances for such collection period; and
o the purchase amount for all receivables that were purchased or
repurchased by UAC or the servicer during the preceding collection
period.
As an administrative convenience, the servicer will be permitted to make
the deposit of collections and aggregate advances and purchase amounts for or
with respect to the collection period net of distributions to be made to the
servicer with respect to the collection period (as described below). The
servicer, however, will account to the indenture trustee and to the noteholders
as if all deposits and distributions were made individually.
The servicer will determine the amount of funds necessary to make payments
of Monthly Principal and Monthly Interest to the holders of the notes and to pay
the monthly servicing fee to the servicer. If there is a deficiency with respect
to Monthly Interest or Monthly Principal on any payment date, after giving
effect to payments of the monthly servicing fee and permitted reimbursements of
outstanding advances to the servicer on such payment date, or if there is a
deficiency with respect to the monthly servicing fee, the servicer will direct
the indenture trustee to withdraw amounts from the spread account, up to the
amount on deposit in such account. If there remains a deficiency of Monthly
Interest, Monthly Principal or the monthly servicing fee after such a
withdrawal, the servicer will notify the indenture trustee of the remaining
deficiency, and the indenture trustee will draw on the policy, up to the Policy
Amount, to pay Monthly Interest, Monthly Principal, and the monthly servicing
fee. Additionally, if the Available Funds for a payment date are not sufficient
to pay current and past due insurance premiums and other amounts owed to the
insurer pursuant to the insurance and reimbursement agreement, plus accrued
interest thereon, the servicer will notify the indenture trustee and the owner
trustee of such deficiency. The amount, if any, then on deposit in the spread
account (after giving effect to any withdrawal to satisfy a deficiency described
in this and the preceding sentences) will be available to cover such deficiency.
Payments. On each payment date (unless there has been an event of default
under the indenture), the indenture trustee will use the Available Funds (plus
any amounts withdrawn from the spread account or drawn on the policy, as
applicable) to make the following payments in the following priority:
(a) without duplication, an amount equal to the sum of (1) the amount of
outstanding advances in respect of receivables that became defaulted
receivables during the prior collection period plus (2) the amount of
outstanding advances in respect of receivables that the servicer
determines to be unrecoverable, to the servicer;
(b) the monthly servicing fee, including any overdue monthly servicing
fee, to the servicer, to the extent not previously distributed to the
servicer;
(c) Class A Monthly Interest (including any overdue amounts) to the class
A noteholders;
(d) Class B Monthly Interest (including any overdue amounts) to the class
B noteholders; provided that if the payment date is the final maturity
date for a class of class A notes, payments of Class B Monthly
Interest to the class B noteholders will be subordinated to payments
of Monthly Principal to the holders of such class A notes;
(e) Monthly Principal (including any overdue amounts) to the class A
noteholders, in accordance with the Principal Payment Sequence;
(f) Monthly Principal (including any overdue amounts) to the class B
noteholders, in accordance with the Principal Payment Sequence;
(g) the insurance premium including any overdue insurance premium plus any
accrued interest to the insurer;
(h) the amount of recoveries of advances (to the extent such recoveries
have not previously been reimbursed to the servicer pursuant to clause
(a) above), to the servicer;
(i) the aggregate amount of any unreimbursed draws on the policy payable
to the insurer under the insurance and reimbursement agreement for
Monthly Interest, Monthly Principal and any other amounts owing to the
insurer under the insurance and reimbursement agreement plus accrued
interest thereon; and
(j) the balance into the spread account.
After all payments and deposits have been made for each payment date, the
servicer will determine the amount of funds remaining in the spread account on
such date. If the funds in the spread account exceed the required spread amount,
the indenture trustee will distribute any such excess to the owner trustee for
distribution to the certificateholder or will distribute such excess directly to
the certificateholder. Any amounts so distributed to the certificateholder will
no longer be property of the trust and will not be available to make payments to
you.
Accelerated Payments Following Indenture Default. If the notes are
accelerated following an indenture default, amounts collected will be applied in
the following priority:
(a) first, to pay any unpaid monthly servicing fee and outstanding
advances to the servicer;
(b) second, to pay any accrued and unpaid fees of the indenture trustee
and the owner trustee without preference or priority of any kind;
(c) third, to pay accrued interest on each class of class A notes on a pro
rata basis based on the interest accrued (including interest accrued
on past due interest) on each class of class A notes;
(d) fourth, to pay principal on each class of class A notes, on a pro rata
basis based on the aggregate principal balance of each class of class
A notes, until the aggregate principal balance of each class of class
A notes is reduced to zero;
(e) fifth, to pay accrued interest on the class B notes (including accrued
interest on past due interest);
(f) sixth, to pay principal on the class B notes until the aggregate
principal balance of the class B notes is reduced to zero;
(g) seventh, to pay amounts owing the insurer under the insurance and
reimbursement agreement; and
(h) eighth, to the spread account, to be applied in accordance with the
indenture.
Definitions. The following defined terms are used in this "Payments on the
Notes" section.
"Monthly Principal" for any payment date will equal the sum of the
following:
1. the amount by which the aggregate principal balance of the receivables
pool declined during the related collection period; and
2. the additional amount, if any, which is necessary to reduce the
principal balance of a class of notes to zero on its final maturity
date.
If there is a shortfall in Available Funds (together with amounts withdrawn
from the spread account and/or drawn on the policy) on any payment date, the
amount of Monthly Principal otherwise payable to noteholders will be reduced by
the lesser of: (1) the amount of such shortfall or (2) the amount, if any, by
which the aggregate outstanding principal balance of the notes as of the
preceding payment date (after giving effect to all payments of principal on such
date) was less than the aggregate principal balance of the receivables pool as
of the end of the related collection period. For the purpose of determining
Monthly Principal, the unpaid principal balance of a defaulted receivable or a
receivable required to be purchased or repurchased by UAC or the servicer will
be zero as of the end of the collection period in which such receivable became a
defaulted receivable or a purchased receivable. In no event will Monthly
Principal exceed the aggregate outstanding principal balance of the notes.
A defaulted receivable for any collection period is a receivable as to
which the earliest to occur of 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 (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 seller or the servicer is obligated to repurchase or
purchase pursuant to the trust and servicing agreement shall be deemed not to be
a defaulted receivable.
"Monthly Interest" for any payment date will equal the sum of Class A
Monthly Interest and Class B Monthly Interest for such payment date and the
related collection period.
"Class A Monthly Interest" means, for any payment date, the sum of Class
A-1 Monthly Interest, Class A-2 Monthly Interest, Class A-3 Monthly Interest and
Class A-4 Monthly Interest.
"Class A-1 Monthly Interest" means:
(1) for the first payment date, the product of the following:
(a) one-three hundred sixtieth (1/360th) of the class A-1 interest
rate,
(b) the actual number of days from the closing date through the day
before the first payment date, and
(c) the aggregate principal balance of the class A-1 notes on the
closing date; and
(2) for any subsequent payment date, the product of the following:
(a) one-three hundred sixtieth (1/360th) of the class A-1 interest
rate,
(b) the actual number of days from the previous payment date through
the day before the related payment date, and
(c) the aggregate principal balance of the class A-1 notes as of the
immediately preceding payment date (after giving effect to any
distribution of principal made on such payment date).
"Class A-2 Monthly Interest" means:
(1) for the first payment date, the product of the following:
(a) one-twelfth of the class A-2 interest rate,
(b) the number of days from the closing date (assuming every month
has 30 days) through the day before the first payment date,
divided by 30, and
(c) the aggregate principal balance of the class A-2 notes on the
closing date; and
(2) for any subsequent payment date, the product of the following:
(a) one-twelfth of the class A-2 interest rate, and
(b) the aggregate principal balance of the class A-2 notes as of the
immediately preceding payment date (after giving effect to any
distribution of principal made on such payment date).
"Class A-3 Monthly Interest" means:
(1) for the first payment date, the product of the following:
(a) one-twelfth of the class A-3 interest rate,
(b) the number of days from the closing date (assuming every month
has 30 days) through the day before the first payment date,
divided by 30, and
(c) the aggregate principal balance of the class A-3 notes on the
closing date; and
(2) for any subsequent payment date, the product of the following:
(a) one-twelfth of the class A-3 interest rate, and
(b) the aggregate principal balance of the class A-3 notes as of the
immediately preceding payment date (after giving effect to any
distribution of principal made on such payment date).
"Class A-4 Monthly Interest" means:
(1) for the first payment date, the product of the following:
(a) one-twelfth of the class A-4 interest rate,
(b) the number of days from the closing date (assuming every month
has 30 days) through the day before the first payment date,
divided by 30, and
(c) the aggregate principal balance of the class A-4 notes on the
closing date; and
(2) for any subsequent payment date, the product of the following:
(a) one-twelfth of the class A-4 interest rate, and
(b) the aggregate principal balance of the class A-4 notes as of the
immediately preceding payment date (after giving effect to any
distribution of principal made on such payment date).
"Class B Monthly Interest" means:
(1) for the first payment date, the product of the following:
(a) one-twelfth of the class B interest rate,
(b) the number of days from the closing date (assuming every month
has 30 days) through the day before the first payment date,
divided by 30, and
(c) the aggregate principal balance of the class B notes on the
closing date; and
(2) for any subsequent payment date, the product of the following:
(a) one-twelfth of the class B interest rate, and
(b) the aggregate principal balance of the class B notes as of the
immediately preceding payment date (after giving effect to any
distribution of principal made on such payment date).
"Principal Payment Sequence" means the order in which Monthly Principal
will be distributed among the noteholders. The order of distribution of Monthly
Principal is:
(1) to the class A-1 noteholders until the aggregate principal balance of
the class A-1 notes has been reduced to zero;
(2) to the class A-2 noteholders until the aggregate principal balance of
the class A-2 notes has been reduced to zero;
(3) to the class A-3 noteholders until the aggregate principal balance of
the class A-3 notes has been reduced to zero;
(4) to the class A-4 noteholders until the aggregate principal balance of
the class A-4 notes has been reduced to zero; and
(5) to the class B noteholders until the aggregate principal balance of
the class B notes has been reduced to zero.
However, if the amount of Available Funds (together with amounts withdrawn from
the spread account and/or drawn on the policy) are not sufficient to pay the
required payment of Monthly Principal to class A noteholders in full on any
payment date, the amount of such funds available to pay Class A Monthly
Principal to class A noteholders will be distributed pro rata to the class A
noteholders based upon the relative aggregate principal balance of each class of
class A notes.
Example of Payment Date Activities. The following chart sets forth an
example of the application of the foregoing provisions to the payment date on
February 8, 2001:
January 1 - January 31, 2001............ Collection Period. The collection
period for each payment date is the
calendar month preceding the payment
date. The servicer receives monthly
payments, prepayments, and other
proceeds in respect of the receivables
and deposits them in the collection
account. The servicer may deduct the
monthly servicing fee from such
deposits.
February 6, 2001......................... Determination Date. The determination
date is the second business day before
the payment date. On or before this
date, the servicer delivers the
servicer's certificate setting forth the
amounts to be distributed on the payment
date and the amounts of any
deficiencies. If necessary, the
indenture trustee notifies the insurer
of any draws in respect of the policy.
February 7, 2001......................... Record Date. The record date is the
business day before the payment date.
Payments on the payment date are made to
noteholders of record at the close of
business on this date.
February 8, 2001......................... Payment Date. The payment date is the
eighth calendar day of the month, or if
such day is not a business day, the
first business day thereafter. The
indenture trustee withdraws funds from
the collection account and, as
necessary, from the spread account and
then draws on the policy, if necessary,
to pay Monthly Interest and Monthly
Principal to the noteholders as
described in this prospectus supplement.
The indenture trustee distributes
Monthly Interest and Monthly Principal
to the noteholders, pays the monthly
servicing fee to the extent not
previously paid and pays the insurance
premium and all other amounts owing to
the insurer.
Distributions on the Certificate
The certificate will be in the form of a trust certificate initially issued
to the seller and will entitle the seller to receive all funds held in the
spread account in excess of the required spread amount on each payment date
after payment of all amounts owed to the noteholders, the servicer and the
insurer. On or after the termination of the trust, the certificateholder is
entitled to receive any amounts remaining in the spread account (only after all
required payments to the insurer are made) after the payment of expenses and
payments to the noteholders. See "-- Accounts" and "-- Payments on the Notes"
above.
The Policy
On or before the closing date, the seller, the trust, the Funding
Subsidiaries, UAC, in its individual capacity and as servicer, and the insurer
will enter into the insurance and reimbursement agreement pursuant to which the
insurer will issue an unconditional and irrevocable insurance policy. Subject to
the terms of the policy, the insurer will guarantee the payment of the monthly
servicing fee, monthly interest and monthly principal up to the policy amount.
Under the terms of the indenture, after withdrawal of any amounts in the spread
account with respect to a payment date to pay a deficiency in monthly interest
or monthly principal, the indenture trustee will be authorized to draw on the
policy for the benefit of the noteholders and credit the collection account for
such draws as described above under "--Payments on the Notes."
The maximum amount that may be drawn under the policy on any payment date
is limited to the policy amount for such payment date. The policy amount with
respect to any payment date will equal:
(a) the sum of:
(1) the monthly servicing fee;
(2) Monthly Interest;
(3) the lesser of (i) the outstanding aggregate principal balance of
all classes of notes on such payment date (after giving effect to
any distributions of available funds and any funds withdrawn from
the spread account to pay monthly principal on such payment date)
and (ii) the initial aggregate principal balances of the notes
minus all amounts withdrawn from the spread account or drawn on
the policy with respect to principal;
less:
(b) all amounts on deposit in the spread account on such payment date
(after giving effect to any amounts withdrawn from the spread account
on such date).
The policy will also cover any amount paid or required to be paid by the
trust to noteholders that is sought to be recovered as a voidable preference by
a trustee in bankruptcy of UAC, the seller or any of the Funding Subsidiaries
pursuant to the United States Bankruptcy Code (11 U.S.C.), as amended from time
to time, in accordance with a final nonappealable order of a court having
competent jurisdiction.
The insurer will be entitled to receive the insurance premium and certain
other amounts on each payment date as described under "--Payments on the Notes"
and to receive certain amounts on deposit in the spread account as described
above under "--Accounts." Generally, the insurance premium for a payment date
will be the product of one-three hundred sixtieth (1/360th) of the policy per
annum fee rate (as set forth in the insurance and reimbursement agreement), the
actual days elapsed and the aggregate principal balances of the notes as of the
preceding payment date (after giving effect to all payments of principal on such
date). The insurer will not be entitled to reimbursement of any amounts from the
noteholders. The insurer's obligation under the policy is irrevocable and
unconditional. The insurer will have no obligation to the noteholders or the
indenture trustee other than its obligations under the policy.
If the balance in the spread account is reduced to zero and there has been
a default under the policy, the trust will depend solely on current collections
on the receivables to make payments of principal and interest on the notes. In
addition, because the market value of motor vehicles generally declines with age
and because of difficulties that may be encountered in enforcing motor vehicle
contracts as described in the accompanying prospectus under "Certain Legal
Aspects of the Receivables," the servicer may not recover the entire amount due
on such receivables in the event of a repossession and resale of a financed
vehicle securing a receivable in default. In such event, first, the class B
noteholders and second, the class A noteholders may suffer a corresponding loss.
Any such losses of the class A noteholders will be borne pro rata based upon the
relative principal balances of the outstanding classes of class A notes. See "
-- Payments on the Notes" above.
Default under the Indenture
If one of the events of default under the indenture described in the
accompanying prospectus occurs, either the insurer or in certain limited
circumstances, the noteholders may declare an indenture default. The insurer
will control the remedy for an indenture default, unless the insurer is in
default under the policy, in which case the noteholders will control the remedy.
The party who declares the indenture default may give notice and accelerate the
payment of principal in respect of the notes, declaring the principal on the
notes immediately due and payable. The rights and remedies of the insurer and
the noteholders may include the right to direct the indenture trustee to
liquidate the property of the trust. See "Risk Factors -- Noteholders Have a
Limited Right to Declare Indenture Defaults or Remedies" in this prospectus
supplement and "The Indenture -- Default under the Indenture" in the
accompanying prospectus.
Rights of the Insurer upon Servicer Default, Amendment or Waiver
Upon the occurrence of an event of default by the servicer under the trust
and servicing agreement, the insurer, or the owner trustee upon the consent of
the insurer, will be entitled to appoint a successor servicer. In addition to
the events constituting a servicer default as described in the accompanying
prospectus, the trust and servicing agreement will also permit the insurer to
appoint a successor servicer and to redirect payments made under the receivables
to the indenture trustee upon the occurrence of certain additional events
involving a failure of performance by the servicer, a breach of certain
financial covenants of the servicer or a material misrepresentation made by the
servicer under the insurance and reimbursement agreement.
The trust and servicing agreement cannot be amended or any provisions
thereof waived without the consent of the insurer if such amendment or waiver
would have a materially adverse effect upon the rights of the insurer.
THE SELLER AND UAC
UAC currently acquires receivables from over 5,200 manufacturer franchised
automobile dealerships in 40 states. UAC is an Indiana corporation, formed in
December 1993 by UAC's predecessor, Union Federal Savings Bank of Indianapolis,
to succeed to the predecessor's indirect automobile finance business, which the
predecessor had operated since 1986. UAC began purchasing and originating
receivables in April 1994. For the fiscal years ended June 30, 1997, 1998, 1999,
and 2000, UAC acquired prime receivables aggregating $1.1 billion, $945 million,
$1.4 billion and $1.4 billion, respectively. Receivable acquisitions were $576
million for the quarter ended September 30, 2000, compared to $450 million for
the quarter ended June 30, 2000, an increase of 28%, and $330 million for the
quarter ended September 30,1999, an increase of 75% . Of the approximately $2.9
billion of receivables in the servicing portfolio of UAC (consisting of the
principal balance of receivables held for sale and securitized receivables) at
June 30, 2000, approximately 73.0% represented receivables on used cars and
approximately 27.0% represented receivables on new cars. The seller is a
wholly-owned bankruptcy remote subsidiary of UAC.
THE INSURER
MBIA
MBIA Insurance Corporation ("MBIA"), 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
MBIA. MBIA 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. MBIA 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 MBIA, changes in control and transactions among affiliates.
Additionally, MBIA is required to maintain contingency reserves on its
liabilities in certain amounts and for certain periods of time.
MBIA does not accept any responsibility for the accuracy or completeness of
this prospectus supplement or any information or disclosure contained in, or
omitted from, this prospectus supplement, other than with respect to the
accuracy of the information regarding the policy and MBIA set forth under the
heading "The Insurer." Additionally, MBIA makes no representation regarding the
notes or the advisability of investing in the notes.
The policy issued by MBIA as insurer is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
MBIA Financial Information
The consolidated financial statements of MBIA, a wholly owned subsidiary of
the Company, and its subsidiaries as of December 31, 1999 and December 31, 1998,
and for each of the three years in the period ended December 31, 1999, 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,
1999, and the consolidated financial statements of MBIA and its subsidiaries as
of June 30, 2000, and for the six month periods ended June 30, 2000, and June
30, 1999, included in the Quarterly Report on Form 10-Q of the Company for the
period ended June 30, 2000, are hereby incorporated by reference into this
prospectus supplement and shall be deemed to be a part of this prospectus
supplement. Any statement contained in a document incorporated by reference in
this prospectus supplement shall be modified or superseded for purposes of this
prospectus supplement to the extent that a statement contained in this
prospectus supplement or in any other subsequently filed document which also is
incorporated by reference in this prospectus supplement 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 this prospectus
supplement.
All financial statements of MBIA 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 this
prospectus supplement and prior to the termination of the offering of the notes
shall be deemed to be incorporated by reference into this prospectus supplement
and to be a part of this prospectus supplement from the respective dates of
filing such documents.
<PAGE>
The tables below present selected financial information of MBIA determined
in accordance with statutory accounting practices prescribed or permitted by
insurance regulatory authorities ("SAP") and GAAP:
SAP
------------------------------------------------
December 31, June 30,
1999 2000
------------ -------------
(Audited) (Unaudited)
(in millions)
Admitted Assets $7,045 $7,349
Liabilities 4,632 4,880
Capital and Surplus 2,413 2,469
GAAP
------------------------------------------------
December 31, June 30,
1999 2000
------------ -------------
(Audited) (Unaudited)
(in millions)
Assets $7,446 $7,858
Liabilities 3,218 3,384
Shareholder's Equity 4,228 4,474
Where You Can Obtain Additional Information About MBIA
Copies of the financial statements of MBIA incorporated by reference in
this prospectus supplement and copies of MBIA's 1999 year-end audited financial
statements prepared in accordance with SAP are available, without charge, from
MBIA. The address of MBIA is 113 King Street, Armonk, New York 10504. The
telephone number of MBIA is (914) 273-4545.
Financial Strength Ratings of MBIA
Moody's Investors Service, Inc. rates the financial strength of MBIA "Aaa."
Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. rates the financial strength of MBIA "AAA."
Fitch IBCA, Inc. (formerly known as Fitch Investors Service, L.P.) rates
the financial strength of MBIA "AAA."
Each rating of MBIA should be evaluated independently. The ratings reflect
the respective rating agency's current assessment of the creditworthiness of
MBIA 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 notes,
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 notes. MBIA does not
guaranty the market price of the notes nor does it guaranty that the ratings on
the notes will not be revised or withdrawn.
REPORTS TO NOTEHOLDERS
Unless and until definitive notes are issued (which will occur only under
the limited circumstances described in the accompanying prospectus), BNY Midwest
Trust Company, as indenture trustee, will provide monthly and annual statements
concerning the trust and the notes to Cede & Co., the nominee of The Depository
Trust Company, as registered holder of the notes. Such statements will not
constitute financial statements prepared in accordance with generally accepted
accounting principles. A copy of the most recent monthly or annual statement
concerning the trust and the notes may be obtained by contacting the servicer at
Union Acceptance Corporation, 250 North Shadeland Avenue, Indianapolis, Indiana
46219 (telephone (317) 231-2717).
FEDERAL INCOME TAX CONSEQUENCES
General
Set forth below is a summary of certain United States federal income tax
considerations relevant to the beneficial owner of a note that holds the note as
a capital asset and, unless otherwise indicated below, is a U.S. Person (as
defined in the accompanying prospectus). This summary does not address special
tax rules which may apply to certain types of investors, and investors that hold
notes as part of an integrated investment. This summary supplements the
discussion contained in the accompanying prospectus under the heading "Federal
Income Tax Consequences," and supersedes that discussion to the extent that the
two discussions are not consistent. The authorities on which we based this
discussion are subject to change or differing interpretations, and any such
change or interpretation could apply retroactively. This discussion reflects the
applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), as well as regulations promulgated by the U.S. Department of Treasury.
You should consult your own tax advisors in determining the federal, state,
local and any other tax consequences of the purchase, ownership and disposition
of the notes.
Characterization of the Notes. There are no regulations, published rulings
or judicial decisions addressing the characterization for federal income tax
purposes of securities with terms that are substantially the same as those of
the notes. A basic premise of United States federal income tax law is that the
economic substance of a transaction generally will determine the federal income
tax consequences of such transaction. The determination of whether the economic
substance of a loan secured by an interest in property is instead a sale of a
beneficial ownership interest in such property has been made by the Internal
Revenue Service (the "IRS") and the courts on the basis of numerous factors
designed to determine whether the trust has relinquished (and the investor has
obtained) substantial incidents of ownership in such property. Among those
factors, the primary factors examined are whether the investor has the
opportunity to gain if the property increases in value, and has the risk of loss
if the property decreases in value. Based on an assessment of these factors, in
the opinion of Cadwalader, Wickersham & Taft, special tax counsel to the seller,
(i) the class A notes will be treated as indebtedness for federal income tax
purposes and not as an ownership interest in the receivables or an equity
interest in the trust and (ii) the class B notes may either be treated as
indebtedness or as an equity interest in the trust for federal income tax
purposes. See "Federal Income Tax Consequences" in the accompanying prospectus.
Except as set forth below under "--Alternative Treatment of the Class B Notes,"
the remainder of this discussion assumes that the class B notes are debt for
federal income tax purposes. Prospective investors should consult their own tax
advisors as to the characterization of the class B notes.
Classification of the Trust. In the opinion of Cadwalader, Wickersham &
Taft, special tax counsel to the seller, the trust will not be treated as an
association taxable as a corporation or a publicly traded partnership taxable as
a corporation for federal income tax purposes, but rather will be disregarded as
a separate entity and treated as a mere security device when there is a single
beneficial owner of the trust, or will be treated as a domestic partnership when
there are two or more beneficial owners of the trust, including the case if the
class B notes are treated as equity interests in the trust.
Discount and Premium
For federal income tax reporting purposes, it is anticipated that the notes
will not be treated as having been issued with original issue discount. The
prepayment assumption that will be used in determining the rate of accrual of
original issue discount and of market discount and premium, if any, for federal
income tax purposes will be based on the assumption that subsequent to the date
of any determination the receivables will prepay at 1.60% ABS, and there will be
no extensions of maturity for any receivable. However, no representation is made
as to the rate, if any, at which the receivables will prepay.
The IRS has issued regulations under Sections 1271 and 1275 of the Code
generally addressing the treatment of debt instruments issued with original
issue discount. The original issue discount regulations and Section 1272(a)(6)
of the Code do not adequately address certain issues relevant to, or are not
applicable to, securities such as the notes. Prospective purchasers of the notes
are advised to consult with their tax advisors concerning the tax treatment of
such notes.
Certain classes of the notes may be treated for federal income tax
purposes as having been issued at a premium. Whether any holder of such a class
of notes will be treated as holding notes with amortizable bond premium will
depend on such noteholder's purchase price and the payments remaining to be made
on such note at the time of its acquisition by such noteholder. You should
consult your own tax advisors regarding the possibility of making an election to
amortize such premium on such classes of notes.
Gain or Loss on Disposition
If you sell a note, you must recognize gain or loss equal to the difference
between the amount realized from the sale and your adjusted basis in such note.
The adjusted basis generally will equal your cost of such note, increased by any
original issue discount or market discount included in your ordinary gross
income with respect to the note and reduced (but not below zero) by any payments
on the note previously received or accrued by you (other than qualified stated
interest payments) and any amortizable premium. Similarly, when you receive a
principal payment with respect to a note, you will recognize gain or loss equal
to the difference between the amount of the payment and the allocable portion of
your adjusted basis in the note. Such gain or loss will generally be a long-term
capital gain (or ordinary income to the extent of any accrued market discount
not previously included in income) or long-term capital loss if you held the
note for more than one year.
Backup Withholding and Information Reporting
Payments of interest and principal, as well as payments of proceeds from
the sale of notes, may be subject to the "backup withholding tax" under Section
3406 of the Code at a rate of 31% if you fail to furnish to the trust certain
information, including your taxpayer identification number, or otherwise fail to
establish an exemption from such tax. Any amounts deducted and withheld from a
payment should be allowed as a credit against your federal income tax.
Furthermore, certain penalties may be imposed by the IRS on a recipient of
payments that is required to supply information but that does not do so in the
proper manner.
We will report to noteholders and to the IRS for each calendar year the
amount of any "reportable payments" during such year and the amount of tax
withheld, if any, with respect to payments on the notes.
Withholding Regulations Effective December 31, 2000
Final Treasury Department regulations make certain modifications to the
withholding rules for investors who are Non-U.S. Persons (as defined in the
accompanying prospectus) and the backup withholding and information reporting
rules described above. The regulations attempt to unify certification
requirements and modify reliance standards. Such regulations will generally be
effective for payments made after December 31, 2000, subject to certain
transition rules. A new series of withholding certificates must be used for all
payments after that date and may be used currently. Non-U.S. Persons are urged
to consult their tax advisors regarding the effect of these regulations. See "--
Alternative Treatment of the Class B Notes" below, concerning the possible
application of withholding tax with respect to class B notes held by Non-U.S.
Persons.
Alternative Treatment of the Class B Notes
If the class B notes were treated as equity (partnership) interests rather
than indebtedness, while the aggregate amount of income reportable by an
investor should not differ over the life of the obligation, the timing and
character of such income could differ significantly. It is possible that
payments on the class B notes would be treated as "guaranteed payments" under
the Code to the extent of the amount of interest and any discount accrued, and a
return of capital as to any excess. To the extent payments are so characterized,
a class B noteholder who is a U.S. Person would be subject to federal income tax
in substantially the same manner, except for timing and income characterization
differences, as if the class B notes were treated as debt.
If a class B noteholder's ownership of a class B note were characterized as
an equity interest but payments thereon were not treated as "guaranteed
payments", it is unclear how its distributable share of partnership income would
be calculated. In such event, a class B noteholder may be allocated a share of
net income of the partnership equal to the amount of interest and discount
income that accrued on the class B notes for the applicable period. A class B
noteholder would be subject to federal income taxes on such income even though
it may not have received an equivalent amount of cash from the partnership, for
example, because of defaults or delinquencies on the trust assets. The
characterization of an item of income or loss (e.g., as dividends, as interest,
as rental income or as capital gain or loss as opposed to ordinary income or
loss) would usually be the same for the class B noteholder as it is for the
partnership.
It is not known whether any of the receivables were issued with original
issue discount greater than a de minimis amount. If any of such trust assets
were in fact issued at greater than de minimis discount or are otherwise treated
as issued with original issue discount under the Treasury regulations, an amount
of income will be imputed to the trust with respect to such trust assets. In
general, aggregate amount of original issue discount imputed to the trust with
respect to each such trust asset will be the excess of the "stated redemption
price at maturity" of such asset over its original issue price. The trust would
have to include original issue discount in income as interest over the term of
the respective trust asset possessing original issue discount under a constant
yield method. In general, original issue discount must be included in income in
advance of the receipt of cash representing that income. As indicated above, if
the class B notes were treated as equity, class B noteholders may be allocated
items of income of the trust in the event that such class B noteholder's income
is not treated as "guaranteed payments". Such allocated income would include any
original issue discount determined to exist with respect to any of the trust
assets. Each class B noteholder should consult its own tax adviser regarding the
impact the original issue discount rules would have as applied to the trust and
to such class B noteholders. Some receivables may not have been issued with
original issue discount, but, rather, may have been issued with "unstated
interest" as determined under Section 483 of the Code. In this event, such
unstated interest will be treated in a manner similar to original issue
discount.
Moreover, the purchase price paid by the trust for receivables may be
greater or less than the remaining principal balance of the receivables at the
time of purchase. If so, such trust assets will have been acquired at a premium
or discount, as the case may be. Accordingly, in a manner similar to original
issue discount, if the class B notes were treated as equity, a class B
noteholder may be allocated a portion of such market discount income or premium
amortization in the event that such class B noteholder's income were not treated
as "guaranteed payments". Each class B noteholder should consult its own tax
adviser regarding the impact the market discount and premium rules would have as
applied to the trust and to such class B noteholder.
If the class B notes were treated as equity, a class B noteholder would not
be able to deduct its share of losses on the trust assets (to the extent
otherwise deductible under the Code) to the extent that such losses exceeded its
adjusted basis in its partnership interest (i.e., the class B note). In
addition, class B noteholders who are individuals or certain closely held
corporations (and certain other taxpayers) would be subject to other limitations
on losses or deductions including the at risk limitations, the passive loss
rules, the limitation on the deduction of investment interest, the limitation on
deduction of non-business bad debts, and the limitation on the deduction of
certain miscellaneous itemized non-trade or business expenses to the extent they
do not, in the aggregate, exceed two percent of the taxpayer's adjusted gross
income. Such taxpayers should consult their tax advisor concerning the various
limitations on losses that may be applicable to an investment in a class B note
treated as equity.
If the class B notes were treated as equity, all or a portion of any
taxable income allocated to a class B noteholder that is a pension,
profit-sharing or employee benefit plan or other tax-exempt entity (including an
individual retirement account) may constitute "unrelated business taxable
income" which generally would be taxable to the holder under the Code.
If the class B notes were treated as equity, a class B noteholder who is a
Non-U.S. Person may be subject to withholding tax on its share of the income of
the trust.
In view of the foregoing treatment of individuals, certain closely held
corporations, tax-exempt entities and Non-U.S. Persons, if the Class B Notes
were treated as equity, the class B notes may not be a suitable investment for
such persons, and such persons should consult their own tax advisors in this
regard.
State and Local Taxation
The discussion above does not address the tax consequences of purchase,
ownership or disposition of the notes under any state or local tax law. In
particular, in the event that a class B noteholder's interest were characterized
as a partnership interest, such class B noteholder may be subject to state and
local income tax with respect to the trust's activities. Investors should
consult their own tax advisors regarding state and local tax consequences of the
purchase, ownership and disposition of the notes.
ERISA CONSIDERATIONS
Subject to the considerations set forth below and under "ERISA
Considerations" in the accompanying prospectus, the class A notes may be
purchased by an employee benefit plan or an individual retirement account
subject to ERISA or Section 4975 of the Code or any federal, state or local law
materially similar to the foregoing provisions of ERISA and the Code (a "Benefit
Plan"). A fiduciary of a Benefit Plan must determine that the purchase of a note
is consistent with its fiduciary duties under ERISA and does not result in a
nonexempt prohibited transaction as defined in Section 406 of ERISA or Section
4975 of the Code or a materially similar characterization under any similar law.
Section 406 of ERISA prohibits parties in interest or disqualified persons
("Parties in Interest") with respect to a Benefit Plan from engaging in certain
transactions (including loans) involving a Benefit Plan and its assets unless a
statutory or administrative exemption applies to the transaction. Section 4975
of the Code imposes certain excise taxes (or, in some cases, a civil penalty may
be assessed pursuant to Section 502(i) of ERISA) on Parties in Interest which
engage in non-exempt prohibited transactions.
The United States Department of Labor (the "DOL") has issued a regulation
(29 CFR Section 2510.3-101) concerning the definition of what constitutes the
assets of a Benefit Plan. This regulation provides that, as a general rule, the
underlying assets and properties of corporations, partnerships, trusts and
certain other entities in which a Benefit Plan purchases an "equity interest"
will be deemed for purposes of ERISA to be assets of the investing Benefit Plan
unless certain exceptions apply. This regulation defines an "equity interest" as
any interest in an entity other than an instrument that is treated as
indebtedness under applicable local law and which has no substantial equity
features. Although the issue is not free from doubt, we believe that the class A
notes should not be treated as "equity interests" for purposes of the
regulation. Accordingly, the acquisition of the class A notes by benefit plan
investors should not cause the assets of the trust to be treated as Benefit Plan
assets for purposes of Title I of ERISA. However, the class A notes may not be
purchased with the assets of a Benefit Plan if the seller, the servicer, the
indenture trustee, the owner trustee or any of their affiliates:
(1) has investment or administrative discretion with respect to such
Benefit Plan assets;
(2) has authority or responsibility to give, or regularly gives, investment
advice with respect to such Benefit Plan assets, for a fee and pursuant to an
agreement or understanding that such advice (a) will serve as a primary basis
for investment decisions with respect to such Benefit Plan assets and (b) will
be based on the particular investment needs for such Benefit Plan; or
(3) is an employer maintaining or contributing to such Benefit Plan.
Certain affiliates of the trust or the servicer might be considered or
might become Parties in Interest with respect to a Benefit Plan. In either case,
the acquisition or holding of class A notes by or on behalf of such a Benefit
Plan could be considered to give rise to an indirect prohibited transaction
within the meaning of ERISA and the Code, unless it is subject to one or more
exemptions such as one of the following Prohibited Transaction Class Exemptions
("PTCE"):
o PTCE 84-14, which exempts certain transactions effected on behalf of a
Benefit Plan by a "qualified professional asset manager,"
o PTCE 90-1, which exempts certain transactions involving insurance
company pooled separate accounts,
o PTCE 91-38, which exempts certain transactions involving bank
collective investment funds,
o PTCE 95-60, which exempts certain transactions involving insurance
company general accounts, or
o PTCE 96-23, which exempts certain transactions effected on behalf of a
Benefit Plan by certain "in-house asset managers."
The DOL has issued to each of the underwriters an Exemption (in the case of
Bank of America Securities LLC, Prohibited Transaction Exemption 93-31 and in
the case of Salomon Smith Barney, Prohibited Transaction Exemption 89-89), as
discussed under "ERISA Considerations" in the accompanying prospectus. Recent
amendments by the DOL to the Exemptions make them applicable in certain
circumstances to the initial purchase, holding and subsequent resale of the
notes by Benefit Plans. In addition to extending the Exemptions to the
acquisition and holding of securities issued in the form of debt, the amendments
alter some of the conditions that must be satisfied for the Exemptions to apply.
In the case of securities backed by receivables from automobile sales, the
Exemptions may apply to both senior and subordinated securities rated any of the
four highest generic rating categories by S&P, Moody's or Fitch IBCA, Inc.
Each purchaser or transferee of a class A note that is a Benefit Plan shall
be deemed to have represented that the relevant conditions for exemptive relief
under at least one of the foregoing exemptions (or other applicable exemption
providing substantially similar relief) have been satisfied. A fiduciary of a
Benefit Plan contemplating purchasing class A notes must make its own
determination that, at the time of such purchase, the class A notes satisfy the
general conditions for relief under any applicable exemption described above or
in the accompanying prospectus.
While the Exemptions may apply to subordinated securities such as the class
B notes, Benefit Plan investors should consider the possibility that the class B
notes may constitute equity in the trust for federal income tax purposes. In
that case, income on the class B notes would be "unrelated business taxable
income" which would be taxable income for otherwise tax-exempt investors,
including Benefit Plans. See "Federal Income Tax Consequences--Alternative
Treatment of the Class B Notes." Benefit Plan investors should consult with
their advisors regarding the consequences of purchasing the class B notes.
For additional information regarding treatment of the notes under ERISA,
see "ERISA Considerations" in the accompanying prospectus.
UNDERWRITING
Under the terms and subject to the conditions set forth in the underwriting
agreement for the sale of the notes, dated November 14, 2000, the seller has
agreed to sell and each of the underwriters named below has severally agreed to
purchase the principal amount of the notes set forth below its name below:
Banc of America Salomon
Securities LLC Smith Barney Inc. Total
--------------- ----------------- -----
Principal amount
of class A-1 notes....... $22,262,500 $22,262,500 $44,525,000
Principal amount
of class A-2 notes....... $69,625,000 $69,625,000 $139,250,000
Principal amount
of class A-3 notes....... $92,312,500 $92,312,500 $184,625,000
Principal amount
of class A-4 notes....... $58,050,000 $58,050,000 $116,100,000
Principal amount
of class B notes......... $12,750,000 $12,750,000 $25,500,000
In the underwriting agreement, the underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all the notes.
The underwriters propose to offer part of the notes directly to you at the
prices set forth on the cover page of this prospectus supplement and part to
certain dealers at a price that represents a concession not in excess of 0.085%
of the denominations of the class A-1 notes, 0.125% of the denominations of the
class A-2 notes, 0.130% of the denominations of the class A-3 notes, 0.145% of
the denominations of the class A-4 notes, or 0.200% of the denominations of the
class B notes. The underwriters may allow and such dealers may reallow a
concession not in excess of 0.070% of the denominations of the class A-1 notes,
0.100% of the denominations of the class A-2 notes, 0.105% of the denominations
of the class A-3 notes, 0.115% of the denominations of the class A-4 notes, or
0.160% of the denominations of the class B notes.
The seller and UAC have agreed to indemnify the underwriters against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended.
The underwriters tell us that they intend to make a market in the notes, as
permitted by applicable laws and regulations. However, the underwriters are not
obligated to make a market in the notes and any such market-making may be
discontinued at any time at the sole discretion of the underwriters.
Accordingly, we give no assurances regarding the liquidity of, or trading
markets for, the notes.
In connection with this offering, the underwriters may over-allot or effect
transactions which stabilize or maintain the market price of the notes at a
level above that which might otherwise prevail in the open market. Such
stabilizing, if commenced, may be discontinued at any time.
In the ordinary course of their businesses, the underwriters and their
affiliates have engaged and may in the future engage in investment banking,
commercial banking and other advisory or commercial relationships with the
seller, UAC and their affiliates.
We will receive proceeds of $509,853,754.46 from the sale of the notes,
before deducting our net expenses estimated to be $555,000.
LEGAL OPINIONS
Certain legal matters relating to the notes will be passed upon for the
seller and the trust by Barnes & Thornburg, Indianapolis, Indiana, and for the
underwriters by Cadwalader, Wickersham & Taft. Certain federal income tax
consequences with respect to the notes will be passed upon for the trust by
Cadwalader, Wickersham & Taft.
EXPERTS
The consolidated balance sheets of MBIA Insurance Corporation and
subsidiaries as of December 31, 1999, and December 31, 1998, and the related
consolidated statements of income, changes in shareholder's equity, and cash
flows for each of the three years in the period ended December 31, 1999,
incorporated by reference in this prospectus supplement, have been incorporated
into this prospectus supplement in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in accounting and auditing.
<PAGE>
INDEX OF PRINCIPAL TERMS
We have listed below the terms used in this prospectus supplement and the
pages where definitions of the terms can be found.
ABS..................................................................S-20
Available Funds......................................................S-27
Benefit Plan.........................................................S-39
Class A Monthly Interest.............................................S-29
Class A-1 Monthly Interest...........................................S-29
Class A-2 Monthly Interest...........................................S-29
Class A-3 Monthly Interest...........................................S-30
Class A-4 Monthly Interest...........................................S-30
Class B Monthly Interest.............................................S-30
Code.................................................................S-36
Company..............................................................S-34
DOL..................................................................S-39
ERISA................................................................ S-9
Funding Subsidiaries................................................. S-7
GAAP.................................................................S-34
IRS..................................................................S-36
MBIA.................................................................S-34
Monthly Interest.....................................................S-29
Monthly Principal....................................................S-28
Parties in Interest..................................................S-39
Principal Payment Sequence...........................................S-30
PTCE.................................................................S-39
SAP..................................................................S-35
UAC.................................................................. S-4
<PAGE>
$510,000,000
UACSC 2000-D OWNER TRUST
UAC Securitization Corporation, [UACSC LOGO]
as seller
Union Acceptance Corporation,
as servicer
$44,525,000 Class A-1 Automobile Receivable Backed Notes
$139,250,000 Class A-2 Automobile Receivable Backed Notes
$184,625,000 Class A-3 Automobile Receivable Backed Notes
$116,100,000 Class A-4 Automobile Receivable Backed Notes
$25,500,000 Class B Automobile Receivable Backed Notes
Prospectus Supplement
Banc of America Securities LLC
Salomon Smith Barney
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not authorized anyone to provide you with different or additional information.
We are not offering the notes in any state where the offer is not
permitted.
Dealers will deliver this prospectus supplement and prospectus when acting
as underwriters of the notes with respect to their unsold allotments or
subscriptions. In addition, all dealers selling the notes will deliver this
prospectus supplement and prospectus through February 12, 2001.
