SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended 0-23961
December 31, 1997 Commission file
number
____________________
METRIS MASTER TRUST
Metris Receivables, Inc., as Transferor
(Exact name of registrant as specified in its charter)
Delaware 41-1810301
(State of Incorporation) (I.R.S. Employer
Identification No.)
4400 Baker Road, Suite F-470, Minnetonka, Minnesota 55343
(Address of principal executive offices)
(612) 525-5020
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
6.45% Asset Backed Certificates, Series 1996-1, Class A
6.80% Asset Backed Certificates, Series 1996-1, Class B
6.87% Asset Backed Certificates, Series 1997-1, Class A
7.11% Asset Backed Certificates, Series 1997-1, Class B
Floating Rate Asset Backed Certificates, Series 1997-2, Class A
Floating Rate Asset Backed Certificates, Series 1997-2, Class B
The Registrant has no voting stock or class of common stock
outstanding as of the date of this report.
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
and (2) has been subject to such filing requirements for the
past 90 days. Yes X No
The aggregate principal amount of Certificates held by non
affiliates as of December 31, 1997 was approximately
$1,884,500,000.
TABLE OF CONTENTS
PART I
Page
Item 1. Business 3
Item 2. Properties 3
Item 3. Legal Proceedings 3
Item 4. Submission of Matters to a Vote of Security Holders 4
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters 4
Item 6. Selected Financial Data 4
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 4
Item 8. Financial Statements and Supplementary Data 4
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 4
PART III
Item 10. Directors and Executive Officers of the Registrant 4
Item 11. Executive Compensation 4
Item 12. Security Ownership of Certain Beneficial
Owners and Management 5
Item 13. Certain Relationships and Related Transactions 5
PART IV
Item 14.Exhibits, Financial Statement Schedules
and Reports on Form 8-K 5
Signatures 6
PART I
The Metris Master Trust (the "Trust" or the
"Registrant") was originated by Metris Receivables Inc.
f/k/a Fingerhut Financial Services Receivables Inc.
(the "Transferor"), as Transferor under the Pooling and
Servicing Agreement dated as of May 26, 1995, as
amended (the P&S Agreement") by and among the
Transferor, Direct Merchants Credit Card Bank, National
Association, as servicer (the "Servicer") and The Bank
of New York (Delaware), as trustee. The P&S is
supplemented by various series supplements providing
for the issuance of certificates in varying series.
The Series 1996-1 Supplement dated as of April 23, 1996
to the P&S Agreement provided for the issuance of the
Asset Backed Certificates, Series 1996-1 (the "Series
1996-1 Certificates"). The Series 1997-1 Supplement
dated as of May 8, 1997 to the P&S Agreement provided
for the issuance of another series of Asset Backed
Certificates, (the "Series 1997-1 Certificates"). The
Series 1997-2 Supplement dated as of November 20, 1997
to the P&S Agreement provided for another series of
Asset Backed Certificates (the "Series 1997-2
Certificates"). Hereafter, Series 1996-1 Certificates,
Series 1997-1 Certificates, and Series 1997-2
Certificates are collectively referred to as the
"Certificates." The Certificates represent interests
in the Trust only and do not represent interests in or
obligations of Metris Receivables Inc., Direct
Merchants Credit Card Bank, National Association,
Metris Companies Inc. or any affiliate thereof. There
are four classes of Certificates in each series. Class
A and Class B are to be registered pursuant to Section
12(g), Class C is privately held and the Transferor
holds Class D. The Transferor has retained the
transferor's interest in the Trust.
The Registrant has prepared this Form 10-K in
reliance upon various no-action letters issued by the
Securities and Exchange Commission (the "Commission")
to other trusts which are substantially similar to the
Trust. Items designated herein as "Not Applicable"
have been omitted as a result of this reliance.
Item 1. Business
Not Applicable
Item 2. Properties
The Trust's sole asset is a pool of credit card
receivables originated or acquired by Direct Merchants
Credit Card Bank, National Association.
Item 3. Legal Proceedings
Metris Receivables Inc. is not aware of any
material pending litigation involving the Registrant,
the Trustee, the Seller, or the Servicer with respect
to the Certificates or the Registrant's Property.
Item 4. Submission of Matters to a Vote of Security Holders
No vote or consent of holders of any Class A or
Class B Certificates was solicited for any purpose
during the year ended December 31, 1997.
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholders Matters
Each Class of the Certificates representing
investors' interests in the Trust is represented by a
single Certificate of such Class registered in the name
of Cede & Co. ("Cede"), the nominee of The Depository
Trust Company. To the best knowledge of the
Registrant, there is no established public trading
market for the Certificates.
Item 6. Selected Financial Data
Not applicable.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Not applicable.
Item 8. Financial Statements and Supplementary Data
Not applicable.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Not applicable.
Item 11. Executive Compensation
Not applicable.
Item 12. Security Ownership of Certain Beneficial Owners
and Management
The Certificates representing investors' interests
in the Trust are represented by a single Certificate
registered in the name of Cede, the nominee of DTC, and
an investor holding an interest in the Trust is not
entitled to receive a Certificate representing such
interest except in certain limited circumstances.
Accordingly, Cede is the sole holder of record of
Certificates, which it holds on behalf of brokers,
dealers, banks and other direct participants in the DTC
system. Such direct participants may hold Certificates
for their own accounts or for the accounts of their
customers. The name and address of Cede is :
Cede & Co.
c/o The Depository Trust Company
Seven Hanover Square
New York, New York 10004
The Seller is not aware of any Schedules 13D or
13G filed with the Commission in respect of the
Certificates.
Item 13. Certain Relationships and Related Transactions
Not applicable.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K
(a) 1. Financial Statements:
Not Applicable
2. Financial Statement Schedules:
Not Applicable
3. See Exhibit 99 below
(b) The following reports on Form 8-K were filed
during the fourth fiscal quarter of 1997.
Date of Report Items Covered
October 20, 1997 Certificateholders' Statement with
November 24, 1997 respect to distribution made during such
December 22, 1997 months
(c) Exhibit 99
99.1 Annual Servicer's Certificate dated March 30, 1998.
99.2 Supplementary Metris Master Trust
99.3 Independent Public Accountants Review of Agreed Upon Procedures
(d) Not applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on this 30th day of
March, 1998.
METRIS MASTER TRUST
METRIS RECEIVABLES, INC.
(Registrant)
By:/s/
Robert W. Oberrender
President and Treasurer
Metris Receivables, Inc.,
as Transferor
INDEX TO EXHIBITS
Exhibit Description of
Number Exhibit
99.1 Annual Servicer's Certificate
99.2 Supplementary Master Trust Data
99.3 Independent Public Accountant's Review of Agreed
Upon Procedures
Exhibit 99.1
ANNUAL SERVICER'S CERTIFICATE
METRIS MASTER TRUST
The undersigned, a duly authorized representative of
Direct Merchants Credit Card Bank, National Association, as
Servicer pursuant to the Pooling and Servicing Agreement
dated as of May 26, 1995, as amended (the "Pooling and
Servicing Agreement"), by and among Metris Receivables, Inc.
(the "Transferor"), Direct Merchants Credit Card Bank,
National Association, as Servicer and The Bank of New York
(Delaware), as trustee (the "Trustee") does hereby certify
that:
1. Direct Merchants Credit Card Bank, National
Association, is Servicer under the Pooling and Servicing
Agreement.
2. The undersigned is duly authorized pursuant to the
Pooling and Servicing Agreement to execute and deliver this
Certificate to the Trustee.
3. This Certificate is delivered pursuant to Section
3.5 of the Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during
the period from December 28, 1996 until December 31, 1997
was conducted under my supervision.
5. Based on such review, the Servicer has, to the
best of my knowledge, fully performed all of its obligations
under the Pooling and Servicing Agreement throughout such
period and no default in the performance of such obligations
has occurred or is continuing except as set forth in
paragraph 6 below.
6. The following is a description of each default in
the performance of the Servicer's obligations under the
provisions of the Pooling and Servicing Agreement, including
any Supplement, known to me to have been made during such
period which sets forth in detail (i) the nature of each
such default, (ii) the action taken by the Servicer, if any,
to remedy each such default and (iii) the current status of
each such default:
None.
IN WITNESS WHEREOF, the undersigned has duly executed
this certificate on March 30, 1998.
DIRECT MERCHANTS CREDIT CARD BANK,
NATIONAL ASSOCIATION
By: /s/
Name: Robert W. Oberrender
Title: Chief Financial Officer
Exhibit 99.2
SUPPLEMENTARY METRIS MASTER TRUST DATA
SERIES 1996-1
1. The total amount distributed during Class A $64.5000000
1997 stated on the basis of an Class B $71.4285710
original principal amount of $1,000 Class C $63.5463912
per Certificate:
2. The amount of such distribution Class A $0
allocable to Certificate Principal Class B $0
stated on the basis of an original Class C $0
principal amount of $1,000 per
Certificate:
3. The amount of such distribution Class A $64.5000000
allocable to Certificate Interest Class B $71.4285710
stated on the basis of an original Class C $63.5463912
principal amount of $1,000 per
Certificate:
4. The amount of Principal Collections Class A $294,860,850.63
received in the Collection Account Class B $ 49,807,576.10
during the period from December 28, Class C $ 28,461,472.03
1996 to December 31, 1997 and Class D $ 25,248,093.54
allocated in respect of the Class $398,377,992.31
A Certificates, the Class B Certificates,
the Class C Certificates
and the Class D Certificates,respectively:
5. The amount of Finance Collections Class A $127,530,608.56
processed during the period from Class B $ 21,542,332.55
December 28, 1996 to December 31, 1997 Class C $ 12,309,904.27
and allocated in respect of the Class Class D $ 10,919,325.74
A Certificates, the Class B $172,302,171.12
Certificates, the Class C Certificates
and the Class D Certificates, respectively:
6. The aggregate amount of the:
Principal Receivables $2,755,708,485.44
Invested Amount $ 700,000,000.00
Class A Invested Amount $ 518,000,000.00
Class B Invested Amount $ 87,500,000.00
Class C Invested Amount $ 50,000,000.00
Class D Invested Amount $ 44,500,000.00
Floating Allocation Percentage 25.40181604%
Class A Floating Allocation Percentage 18.79734387%
Class B Floating Allocation Percentage 3.17522700%
Class C Floating Allocation Percentage 1.81441543%
Class D Floating Allocation Percentage 1.61482973%
each as of the end of the day on
December 31, 1997.
7. The aggregate outstanding balance of
Receivables which are :
Current $2,431,375,302.14
30 Days to 59 Days $ 225,467,051.92
60 Days to 89 Days $ 64,504,283.10
90 Days and Over $ 133,582,169.64
as of the end of the day on
December 31, 1997.
8. The aggregate Investor Default Amount $ 67,801,779.29
for the period from December 28, 1996
to December 31, 1997.
9. The aggregate amount of Class A Class A $0
Investor Charge-Offs, Class B Investor Class B $0
Charge-Offs, Class C Investor Charge- Class C $0
Offs and Class D Investor Charge-Offs Class D $0
for the period from December 28, 1996
to December 31,1997.
10. The amount of the Servicing Fee for $ 14,153,424.66
the period from December 28, 1996 to
December 31, 1997.
11. The Class A Pool Factor, the Class B Class A Pool Factor 1.000
Pool Factor and the Class C Pool Class B Pool Factor 1.000
Factor as of December 31, 1997: Class C Pool Factor 1.000
12. The amount of Reallocated Class B Class B 0
Principal Collections, Reallocated Class C 0
Class C Principal Collections and Class D 0
Reallocated Class D Principal
Collections for the period from
December 28, 1996 to December 31,
1997.
13. The aggregate amount of funds in the None
Excess Funding Account and the Pre-
Funding Account at December 31, 1997.
14. Whether a Class C Trigger Event has
occurred and if so the Specified Class
C Reserve Amount at December 31, 1997.
Reserve Amount $17,500,000.00
Reserve Account Balance $ 3,679,548.26
SUPPLEMENTARY METRIS MASTER TRUST DATA
SERIES 1997-1
1. The total amount distributed during Class A $48.0900000
1997 stated on the basis of an Class B $49.7700000
original principal amount of $1,000 Class C $46.7492577
per Certificate:
2. The amount of such distribution Class A $0
allocable to Certificate Principal Class B $0
stated on the basis of an original Class C $0
principal amount of $1,000 per
Certificate:
3. The amount of such distribution Class A $48.0900000
allocable to Certificate Interest Class B $49.7700000
stated on the basis of an original Class C $46.7492577
principal amount of $1,000 per
Certificate:
4. The amount of Principal Collections Class A $212,844,892.35
received in the Collection Account Class B $ 36,697,395.24
during the period from May 8, 1997 to Class C $ 24,954,228.75
December 31, 1997 and allocated in Class D $ 19,154,725.55
respect of the Class A Certificates, $293,651,241.89
the Class B Certificates, the Class C
Certificates and the Class D
Certificates, respectively:
5. The amount of Finance Charge Collections Class A $ 95,104,353.14
processed during the period from May Class B $ 16,397,302.27
8, 1997 to December 31, 1997 and Class C $ 11,150,165.53
allocated in respect of the Class A Class D $ 8,552,842.81
Certificates, the Class B $131,204,663.75
Certificates, the Class C Certificates
and the Class D Certificates,respectively:
6. The aggregate amount of the:
Principal Receivables $2,755,708,485.44
Invested Amount $ 850,000,000.00
Class A Invested Amount $ 616,250,000.00
Class B Invested Amount $ 106,250,000.00
Class C Invested Amount $ 72,250,000.00
Class D Invested Amount $ 55,250,000.00
Floating Allocation Percentage 30.84506233%
Class A Floating Allocation Percentage 22.36267019%
Class B Floating Allocation Percentage 3.85563279%
Class C Floating Allocation Percentage 2.62183030%
Class D Floating Allocation Percentage 2.00492905%
each as of the end of the day on
December 31, 1997.
7. The aggregate outstanding balance of
Receivables which are :
Current $2,431,375,302.14
30 Days to 59 Days $ 225,467,051.92
60 Days to 89 Days $ 64,504,283.10
90 Days and Over $ 133,582,169.64
as of the end of the day on
December 31, 1997.
8. The aggregate Investor Default Amount $ 54,250,573.42
for the period from May 8, 1997 to
December 31, 1997.
9. The aggregate amount of Class A Class A $0
Investor Charge-Offs, Class B Investor Class B $0
Charge-Offs, Class C Investor Charge- Class C $0
Offs and Class D Investor Charge-Offs Class D $0
for the period from
May 8, 1997 to December 31, 1997.
10. The amount of the Servicing Fee for $ 10,977,095.89
the period from May 8, 1997 to
December 31, 1997.
11. The Class A Pool Factor, the Class B Class A Pool Factor 1.000
Pool Factor and the Class C Pool Class B Pool Factor 1.000
Factor as of December 31, 1997: Class C Pool Factor 1.000
12. The amount of Reallocated Class B Class B 0
Principal Collections, Reallocated Class C 0
Class C Principal Collections and Class D 0
Reallocated Class D Principal
Collections for the period from May 8,
1997 to December 31, 1997.
13. The aggregate amount of funds in the None
Excess Funding Account and the Pre-
Funding Account at December 31, 1997.
14. Whether a Class C Trigger Event has
occurred and if so the Specified Class
C Reserve Amount at December 31, 1997.
Reserve Amount $21,250,000.00
Reserve Account Balance $ 4,465,409.52
SUPPLEMENTARY METRIS MASTER TRUST DATA
SERIES 1997-2
1. The total amount distributed during Class A $10.2026042
1997 stated on the basis of an Class B $10.5923263
original principal amount of $1,000 Class C $11.6428819
per Certificate:
2. The amount of such distribution Class A $0
allocable to Certificate Principal Class B $0
stated on the basis of an original Class C $0
principal amount of $1,000 per
Certificate:
3. The amount of such distribution Class A $10.2026042
allocable to Certificate Interest Class B $10.5923263
stated on the basis of an original Class C $11.6428819
principal amount of $1,000 per
Certificate:
4. The amount of Principal Collections Class A $ 23,733,599.66
received in the Collection Account Class B $ 5,294,418.38
during the period from November 20, Class C $ 5,111,852.23
1997 to December 31, 1997 and Class D $ 2,548,613.34
allocated in respect of the Class A 36,688,483.62
Certificates, the Class B
Certificates, the Class C Certificates
and the Class D Certificates,respectively:
5. The amount of Finance Charge Collections Class A $ 10,718,974.45
processed during the period from Class B $ 2,391,155.84
November 20, 1997 to December 31, 1997 Class C $ 2,308,702.19
and allocated in respect of the Class Class D $ 1,152,694.92
A Certificates, the Class B $ 16,571,527.39
Certificates, the Class C Certificates
and the Class D Certificates,
respectively:
6. The aggregate amount of the:
Principal Receivables $2,755,708,485.44
Invested Amount $ 700,000,000.00
Class A Invested Amount $ 455,000,000.00
Class B Invested Amount $ 101,500,000.00
Class C Invested Amount $ 98,000,000.00
Class D Invested Amount $ 45,500,000.00
Floating Allocation Percentage 25.40181604%
Class A Floating Allocation Percentage 16.51118042%
Class B Floating Allocation Percentage 3.68326333%
Class C Floating Allocation Percentage 3.55625425%
Class D Floating Allocation Percentage 1.65111804%
each as of the end of the day on
December 31, 1997.
7. The aggregate outstanding balance of
Receivables which are :
Current $2,431,375,302.14
30 Days to 59 Days $ 225,467,051.92
60 Days to 89 Days $ 64,504,283.10
90 Days and Over $ 133,582,169.64
as of the end of the day on
December 31, 1997.
8. The aggregate Investor Default Amount $ 7,716,690.45
for the period from November 20, 1997
to December 31, 1997.
9. The aggregate amount of Class A Class A $0
Investor Charge-Offs, Class B Investor Class B $0
Charge-Offs, Class C Investor Charge- Class C $0
Offs and Class D Investor Charge-Offs Class D $0
for the period from November 20, 1997
to December 31, 1997.
10. The amount of the Servicing Fee for $ 1,477,260.27
the period from November 20, 1997 to
December 31, 1997.
11. The Class A Pool Factor, the Class B Class A Pool Factor 1.000
Pool Factor and the Class C Pool Class B Pool Factor 1.000
Factor as of December 31, 1997: Class C Pool Factor 1.000
12. The amount of Reallocated Class B Class B 0
Principal Collections, Reallocated Class C 0
Class C Principal Collections and Class D 0
Reallocated Class D Principal
Collections for the period from
November 20, 1997 to December 31, 1997.
13. The aggregate amount of funds in the None
Excess Funding Account and the Pre-
Funding Account at December 31, 1997.
14. Whether a Class C Trigger Event has
occurred and if so the Specified Class
C Reserve Amount at December 31, 1997.
Reserve Amount $ 0.00
Reserve Account Balance $ 3,542,591.38
Exhibit 99.3
March 12, 1998
Direct Merchants Credit Card Bank, N.A. and
Metris Receivables, Inc.
Attn: Senior Vice President, Chief Financial Officer
600 South Highway 169
Suite 1800
St. Louis Park, Minnesota 55426
Moody's Investors Services
Attn: Compliance Department
99 Church Street
New York, New York 10007
Standard & Poor's Ratings Group
Attn: Compliance Department
25 Broadway
New York, New York 10004-1064
Chase Manhattan Bank, as Agent
c/o Chase Securities, Inc.
Attn: David Christopher
10 South LaSalle Street
Suite 2300
Chicago, Illinois 60603-1097
Bank of New York (Delaware)
Attn: Cheryl Laser
101 Barclay Street
New York, New York 10286
Ladies and Gentlemen:
We have performed the procedures enumerated below, which were
agreed to by the addressees, to the servicing records of Direct
Merchants Credit Card Bank, N.A. (DMCCB or the Servicer), a
wholly owned subsidiary of Metris Companies, Inc. (Metris) for
the period from December 28, 1996 to December 31, 1997 (the
Period) solely to assist you in evaluating the Servicer's
compliance with the requirements of Section 3.6(a) and Section
3.6 (b) of the Pooling and Servicing Agreement dated as of May
26, 1995, as amended September 16, 1996, (the Agreement) among
Metris Receivables, Inc., as Transferor; Direct Merchants Credit
Card Bank, N.A., as Servicer; and the Bank of New York
(Delaware), as Trustee, on behalf of Certificateholders of the
Metris Master Trust (the Master Trust). This agreed-upon
procedures engagement was performed in accordance with standards
established by the American Institute of Certified Public
Accountants. The sufficiency of these procedures is solely the
responsibility of the specified users of the report.
Consequently, we make no representation regarding the sufficiency
of the procedures described below either for the purpose for
which this report has been requested or for any other purpose.
Capitalized terms used herein without definition will have
meanings ascribed to them in the Pooling and Servicing Agreement.
Unless otherwise indicated, the following conventions have been
adopted in presenting our procedures and findings:
The term "compared" means compared to and found to be in
agreement with, unless otherwise noted. Such compared
amounts and percentages are deemed to be in agreement if
differences are attributable to rounding or if differences
are less than $1,000.
The term "recomputed" means calculated and found the amount
so calculated to be in agreement with, unless otherwise
noted. Such recomputed amounts and percentages are deemed to
be in agreement if differences are attributable to rounding
or if differences are less than $1,000.
We have performed the following procedures:
Section 3.6 (a)
1. For five haphazardly selected days (the Five Days) within
the Period, we obtained the Daily Report and compared sales, cash
advances, payments, interest income, charge-offs, miscellaneous
charges and adjustments amounts set forth on the Daily Report
with corresponding amounts set forth in the Servicer's accounts
receivable reports and recomputed the mathematical accuracy of
the amounts and percentages within the Daily Report.
2. For the Five Days, we compared the cash transfers indicated
on the Daily Reports to entries on the relevant Master Trust bank
statements.
3. For three haphazardly selected fiscal month ends (the Three
Months) in the Period, we compared the aggregate customer
balances in the "30-59 day delinquent" and "90-119 day
delinquent" categories as reflected on the monthly Settlement
Statements for the Three Months to the corresponding amounts set
forth in the Servicer's accounts receivable aging reports for
such month ends.
4. For five haphazardly selected weekly periods (the Five
Weeks), we compared beginning and end of week total receivables
balances on the Servicer's accounts receivable reports with the
corresponding balances on the corresponding Daily Reports and
recomputed each Daily Report's beginning and ending Principal
Receivables balances and Finance Charge Receivables balances,
based on the information contained in such Daily Reports, for
each of the days within the Five Weeks.
5. For the Five Days, we recomputed the daily allocation of
Principal and Finance Charge Collections to each series issued
under the Agreement based upon information appearing on the Daily
Report.
6. For one monthly Settlement Statement in the period, we
compared the amounts and percentages appearing therein to the
information appearing in the corresponding Daily Reports or the
reports which are the source of such amounts and percentages or
recomputed such percentages to the extent they were derived from
such information.
Section 3.6 (b)
7. For the March, June, September, and December 1997 monthly
Settlement Statements (the Settlement Statements), we compared
amounts and percentages appearing therein to the information
appearing in the corresponding Daily Reports or other reports
which are the source of such amounts and percentages or
recomputed such percentages to the extent they were derived
from such information.
We noted no exceptions during the performance of the agreed upon
procedures as stated above.
* * * * *
Management of Metris Receivables, Inc. has represented to us that
the Daily and Monthly Reports provided to us are the same as
those provided to the Trustee.
We were not engaged to, and did not, perform an examination, the
objective of which would be the expression of an opinion on the
servicing records. Accordingly, we do not express such an
opinion. Had we performed additional procedures, other matters
might have come to our attention that would have been reported to
you.
This report is intended solely for the use of the addressees and
should not be used by those who have not agreed to the procedures
and taken responsibility for the sufficiency of the procedures
for their purposes.
/s/ KPMG Peat Marwick LLP
