VOLKSWAGEN CREDIT AUTO RECEIVABLES CORP
8-K, 1997-08-21
ASSET-BACKED SECURITIES
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<PAGE>
                                                                   
                      SECURITIES AND EXCHANGE COMMISSION

                            450 Fifth Street, N.W.
                            Washington, D.C. 20549



                                   FORM 8-K



                                CURRENT REPORT


                      Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934

                        Date of report: August 15, 1997


                Volkswagen Credit Auto Receivables Corporation                
                ----------------------------------------------
               (Exact Name of Registrant as Specified in Carter

                                   EXHIBITS

           Delaware                  33-80055                38-2748796
           --------                  --------                ---------- 

   (State of incorporation)      (Commission File)       (IRS Employer
                                     Number)             Identification No.)


                3800 Hamlin Road, Auburn Hills, Michigan 48326
                ----------------------------------------------
              (Address of Principal Executive Offices) (Zip Code)

       Registrant's telephone number, including area code:(810) 340-5000

                                     N/A 
- -------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
 
Item 5. Other Events

                The Monthly Servicing Report relating to the Volkswagen Credit 
Auto Master Trust, Series 1996-1 for the Collection Period ended  August 15, 
1997, provided to Citibank, N.A., as trustee is attached hereto as Exhibit 20 
and is incorporated herein by reference.

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits

     Designation               Description              Method of Filing
     -----------               -----------              ----------------

     Exhibit 20         Report for the month ended      Filed with this report.
                        August 15, 1997 provided to
                        Chemical Bank, as trustee
                        under the Volkswagen
                        Credit Auto Master Trust
                        Series 1996-1

        Pursuant to the requirements of the Securities Exchange Act of 1934, 
the Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                     Volkswagen Credit Auto Master Trust



                                     By: Volkswagen Credit Auto
                                         Receivables Corporation


                                     By:  /s/ Allen L. Strang
                                         -----------------------
                                             Allen L. Strang
<PAGE>
 
                  Volkswagen Credit Auto Master Trust 1996-1 

- ------------------------------------------------------------------------------


                 Distribution Date Statement: August 15, 1997
 
<TABLE> 
<S>                                                            <C>
a.  Aggregate Amount of Collections                            $284,019,730.94
    Aggregate Amount of Interest Collections                   $  4,099,291.17
    Aggregate Amount of Principal Collections                  $279,920,439.77
    Investment Proceeds                                        $          0.00
                                                              
b.  Series Allocation Percentage                                       100.00%
    Floating Allocation Percentage                                      75.08%
    Fixed Allocation Percentage                                            N/A
                                                              
c.  Total Amount Distributed on Series 1996-1                  $  1,888,255.21
                                                              
d.  Amount of Such Distribution Allocable to Principal on
    1996-1                                                     $          0.00
                                                              
e.  Amount of Such Distribution Allocable to Interest on
    1996-1                                                     $  1,888,255.21
                                                              
f.  Investor Default Amount                                    $          0.00
                                                              
g.  Draw Amount                                                $          0.00
                                                              
h.  Investor Charge Offs                                       $          0.00
    Amounts of Reimbursements                                  $          0.00
                                                              
i.  Monthly Servicing Fee                                                1.00%
                                                              
j.  Expected Controlled Distribution Amount                    $          0.00
                                                              
k.  Invested Amount                                            $375,000,000.00
                                                              
l.  Pool Factor                                                        100.00%
                                                              
m.  Available Subordinated Amount                              $ 66,532,612.27
                                                              
n.  Reserve Fund Balance                                       $  1,875,000.00
                                                              
o.  Principal Funding Account Balance                          $          0.00
    Yield Supplement Account Balance                           $  1,875,000.00
</TABLE>

<PAGE>
 
VW CREDIT, INC. -- SERVICER                                               PAGE 1
15-AUG-97
              VOLKSWAGEN CREDIT AUTO MASTER TRUST, SERIES 1996-1
 
                MONTHLY SERVICER REPORT INPUT AND SUMMARY PAGE
                ---------------------------------------------- 
 
<TABLE> 
<CAPTION> 
TRANSACTION SUMMARY                                           PORTFOLIO CHARGE OFF RATE AT COLLECTION PERIOD END
- -------------------                                           --------------------------------------------------
                                   From         To     Days
                                   ----         --     ----
<S>                          <C>             <C>      <C>     <C>                                                          <C>
Current Interest Period          7/15/97      8/14/97    31   Net losses as a % of Avg. Receivables Balance (annualized)     0.00%
                                                              
 
Series Allocation                    100.00%                  PORTFOLIO AND DEALERSHIP STATISTICS
 Percentage                                                   -----------------------------------

Initial Principal Balance    $375,000,000.00                  Used Vehicle Receivables' Balance                    $ 37,248,766.87
Outstanding Principal                                         Used Vehicle Percentage                                       8.036%
 Balance                     $375,000,000.00
Principal Balance of                                          Used Vehicle Percentage During Last Collection                
 Receivables for                                              Period                                                        7.922%
 Determination Date          $451,347,783.52
Amount Invested in                                            Early Amortization Event?                                         NO
 Receivables on Series
 Issuance Date               $375,000,000.00
Initial Invested Amount      $375,000,000.00                  Largest Dealer or Dealer Affiliation Balance         $ 22,113,824.42
Invested Amount at the                                        Largest Dealer Percentage                                     4.428%
 Beginning of Period         $375,000,000.00
Invested Amount              $375,000,000.00
Required Subordinated                                         Aggregate Principal Amount of Receivables of         
 Amount                      $ 66,532,612.27                  Dealers over 2%                                      $ 14,018,333.75
Excess Funded Amount         $          0.00                  Aggregate % Principal Amount of Receivables of                
                                                              Dealers over 2%                                               3.024%
 
Available Subordinated                                        SUMMARY OF COLLECTIONS
 Amount (previous period)    $ 78,526,342.93                  ----------------------
Incremental Subordinated     
 Amount (previous period)    $ 14,638,252.22
                                                              Aggregate Amount of Collections                      $284,019,730.94
RESERVE FUND AND YIELD SUPPLEMENT ACCOUNT                     Aggregate Amount of Interest Collections             $  4,099,291.17
- -----------------------------------------
                                                              Investment Proceeds                                  $          0.00
Yield Supplement Account                                      Aggregate Amount of Principal Collections            $279,920,439.77
 Initial Deposit             $  1,875,000.00
Yield Supplement Account                                      Asset Receivables Rate                                        8.883%
 Beginning Balance           $  1,875,000.00
Yield Supplement Account                                      Use Asset Receivables Rate?                                       NO
 Required Amount             $  1,875,000.00
                                                              Carryover Amount (this Distribution Date)                        N/A
Reserve Fund Initial                                          Total Carryover Amount                                           N/A
 Deposit                     $  1,875,000.00
Reserve Fund Required
 Amount                      $  1,875,000.00
Reserve Fund Beginning                                        PAYMENT RATE INFORMATION
 Balance                     $  1,875,000.00                  ------------------------
 
Outstanding Carryover                                         Monthly Payment Rate                                          58.14%
 Amount - Beginning Balance  $          0.00 
Yield Supplement Account                                      Previous Collection Period Monthly Payment Rate               53.35%
 Draw Amount                 $          0.00 
Outstanding Carryover                                          Monthly Payment Rate 3 months ago                            48.57%
 Amount - Ending Balance     $          0.00
Yield Supplement Account                                      3-month Average Payment Rate                                  53.35%
 Balance - Ending Balance    $  1,875,000.00 
Yield Supplement Account                                      12-month Minimum Payment Rate                                 48.57%
 Required Deposit Amount     $          0.00
                                                              Early Amortization Event?                                         NO
Reserve Fund Draw Amount     $          0.00
Reserve Fund Ending Balance  $  1,875,000.00                  ACCUMULATION PERIOD/EARLY AMORTIZATION PERIOD
                                                              ---------------------------------------------
Reserve Fund Required        
 Deposit Amount              $          0.00
                                                              Extend Revolving Period?                                         YES
1-month LIBOR Rate                                            Last Day of Revolving Period                                     N/A
 (annualized)                     5.6875000%
Certificate Coupon                                            Invested Amount as of Last Day of Revolving Period               N/A
 (annualized)                     5.8475000% 
Prime Rate (annualized)           8.5000000%                  Accumulation Period Length (months)                              N/A
Servicing Fee Rate                                            First Accumulation Date                             TO BE DETERMINED
 (annualized)                         1.000%
Excess Spread                     1.9425000%                  Expected Final Payment Date                                      N/A
                                                              Required Participation Percentage                              4.00%
TRUST PRINCIPAL RECEIVABLES                                   Principal Funding Account Balance                    $          0.00
- ---------------------------
                                                              Principal Payment Amount                             $          0.00
Pool Balance at the                                           Controlled Deposit Amount                            $          0.00
 Beginning of Period         $499,455,872.76
Pool Balance at the Ending   
 of Period                   $463,526,901.62
Average Aggregate                                             TOTAL AMOUNT DISTRIBUTED ON SERIES 1996-1
 Principal Balance           $481,491,387.19                  -----------------------------------------
 
Aggregate Principal                                           CERTIFICATEHOLDERS
 Collections                 $279,920,439.77                  ------------------
New Principal Receivables    $244,028,156.63                  i.    Monthly Interest Distribution                  $  1,888,255.21
Receivables Added for                                         ii.   Monthly Servicing Fee Distribution             $    312,500.00
 Additional Accounts         $          0.00 
Investor Default Amount      $          0.00                  iii.  Reserve Fund Deposit Amount Distribution       $          0.00
Net Losses                   $          0.00                  iv.   Investor Default Amount Distribution           $          0.00
Monthly Interest Accrued,                                     v.    Outstanding Carryover Amount Distribution      $          0.00
 but not Paid                $          0.00
Ineligible Receivables       $          0.00                  vi.   Yield Supplement Account Deposit Amount          
                                                                        Distribution                               $          0.00
Ineligible Receivables in                                                                                          ---------------
 Prior Collection Period     $          0.00                            Excess Servicing                           $    877,062.62
Defaulted Receivables in     
 Ineligible and Overconc.
 Accounts                    $          0.00
                                                              Excess Servicing (Previous Period)                   $    694,846.14
MISCELLANEOUS DATA
- ------------------
                                                              DEFICIENCY AMOUNT
                                                              -----------------
Recoveries on Receivables    
 Written Off                 $          0.00
Spread Over Prime for                                         Deficiency Amount                                    $           0.0
 Portfolio                             0.29%
Weighted Average Interest                                     Draw Amount                                          $           0.0
 Rate                                  8.79%
</TABLE>
<PAGE>
 
VW CREDIT, INC.  CREDIT, INC. -- SERVICER                                 PAGE 2
     15-AUG-97

              VOLKSWAGEN CREDIT AUTO MASTER TRUST, SERIES 1996-1
 
                                    SUMMARY
                                    -------

<TABLE> 
<CAPTION> 
                      COLLECTIONS              ACCRUAL   DISTRIBUTION
                      ------------             -------   ------------
<S>                   <C>                      <C>       <C> 
From:                   15-Jul-97                       
To:                     14-Aug-97                       
Days:                          30                       
                                                        
LIBOR RATE             5.6875000%                       
(1 month)                                               
                                                        
SERIES #                    1     Active                
VCI RATING:                N/A                          
</TABLE> 
 
               TRUST AND SERIES ALLOCATIONS - BEGINNING OF PERIOD
              --------------------------------------------------
 
<TABLE> 
<CAPTION> 
                           SERIES                                      EXCESS    REQUIRED         REQUIRED       OUTSTANDING   
SERIES       SERIES      ALLOCATION      INVESTED       SUBORDINATED   FUNDED  PARTICIPATION   PARTICIPATION     CERTIFICATE   
NUMBER       NAME       PERCENTAGE        AMOUNT           AMOUNT      AMOUNT   PERCENTAGE         AMOUNT          BALANCE     
- ------       ------     -----------      --------          ------      ------   ----------         ------          -------     
<S>      <C>            <C>           <C>              <C>             <C>      <C>            <C>             <C> 
          Trust                       $375,000,000.00  $66,532,612.27   $0.00       N/A        $15,000,000.00                  
         1 Series 1996-1  100.00%     $375,000,000.00  $66,532,612.27   $0.00     4.00%        $15,000,000.00  $375,000,000.00  
</TABLE> 
<PAGE>
 
VW CREDIT, INC.-- SERVICER                                               PAGE 3
15-AUG-97

<TABLE> 
<CAPTION> 

              VOLKSWAGEN CREDIT AUTO MASTER TRUST, SERIES 1996-1
 
                             SERVICING CERTIFICATE
                             --------------------- 
INITIAL AMOUNTS                                                                 EXCESS SPREAD CALCULATION
- ---------------                                                                 -----------------------------
<S>                                       <C>                              <C>                                    <C>    
Initial Invested Amount                   $375,000,000.00                     Weighted Average Rate Charged to      
                                                                              Dealers                               8.79%
Invested Amount                           $375,000,000.00                     LIBOR                                 5.69%
Controlled Accumulation Amount            $          0.00                     Certificate Rate (LIBOR+16 b.p.)      5.85%
Required Subordinated Amount              $ 66,532,612.27                     Servicing Fee Rate                    1.00%
Annualized Servicing Fee Rate                       1.00%                     Investor Net Losses                   0.00%
                                                                                                                    ----
First Controlled Accumulation Date        TO BE DETERMINED                    Excess Spread                         1.94%
Accumulation Period Length (months)             N/A
Expected Final Payment Date                     N/A
Initial Settlement Date                         28-Mar-96
Required Participation Percentage                    4.00%
Subordinated Percentage                             14.29%

<CAPTION> 

SERIES 1996-1 MONTHLY REPORTING
- -------------------------------
                                                                                        REQUIRED             EXCESS 
                                           SERIES 1996-1       INVESTED               SUBORDINATED           FUNDING
PRINCIPAL RECEIVABLES                          TOTAL            AMOUNT                   AMOUNT              AMOUNT
- ---------------------                          -----            ------                   ------              ------
<S>                                       <C>               <C>                          <C>               <C> 
Series Allocation Percentage                       100.00%
Beginning Balance                         $375,000,000.00   $375,000,000.00               $66,532,612.27              $0.00
  Floating Allocation Percentage           75.08%           75.08%
  Fixed Allocation Percentage               N/A
 
Principal Collections                     $279,920,439.77   $279,920,439.77               N.A.               N.A.
New Principal Receivables                 $244,028,156.63   $244,028,156.63               N.A.               N.A.
Principal Default Amounts                           $0.00             $0.00               N.A.               N.A.
Receivables Added for Additional                    $0.00             $0.00               N.A.               N.A.
 Accounts
Controlled Deposit Amount                           $0.00               N/A               N.A.               N.A.
Principal Allocation Percentage
"Pool Factor"                                100.00000000%
 
Ending Balance                            $375,000,000.00   $375,000,000.00                  $66,532,612.27           $0.00
  Floating Allocation Percentage          80.90%            80.90%
 
NON-PRINCIPAL RECEIVABLES
- -------------------------

Interest Collections                      $  3,077,817.83
Recoveries on Receivables Written Off               $0.00
Investment Income                                   $0.00
</TABLE>
<PAGE>
 
VW CREDIT, INC. -- SERVICER                                              PAGE 4
15-AUG-97
 
              VOLKSWAGEN CREDIT AUTO MASTER TRUST, SERIES 1996-1
 
                             SERVICING CERTIFICATE
                             ---------------------
 
<TABLE> 
<CAPTION> 

SUBORDINATED AMOUNT & RESERVE FUND            CURRENT             PREVIOUS   
- ----------------------------------            -------             --------   
<S>                                     <C>                   <C>            
Available Subordination Amount            
 (Previous)                               $78,526,342.93       $81,938,934.64
  Required Subordination Draw Amount      $         0.00                  N/A
  Reserve Fund Funds to Inv. Default      
   Amount                                 $         0.00                  N/A
  Excess Servicing (Previous Period)      $   694,846.14       $   600,330.44
                                          --------------                     
(a) Available Subordinated Amount?        $79,221,189.07       $82,539,265.08
                                                                             
(b) Available Subordinated Amount?        $53,571,428.57       $53,571,428.57
                                                                             
Available Subordinated Amount             $76,849,274.41       $78,526,342.93
                                                                             
Incremental Subordinated Amount           $12,961,183.69       $14,638,252.22
  Overconcentration Amount                $14,018,333.75       $17,059,375.75
                                                                             
Beginning Reserve Fund Balance            $ 1,875,000.00       $ 1,875,000.00
Reserve Fund Required Balance             $ 1,875,000.00       $ 1,875,000.00
Reserve Fund Draw                         $         0.00                  N/A
Reserve Fund Required Deposit             $         0.00                  N/A
Reserve Fund Deposit Amount               $         0.00                  N/A
Reserve Fund Release                      $         0.00                  N/A
Ending Reserve Fund Balance               $ 1,875,000.00       $ 1,875,000.00
                                                                             
REQUIRED INTEREST DISTRIBUTIONS                                              
- -------------------------------                                              
                                                                             
Available Interest Collections            $ 4,099,291.17       $ 3,749,608.49
  Certificateholder Interest Collections  $ 3,077,817.83       $ 2,773,778.43
  Subordinate Interest Collections        $   546,067.36       $   504,529.44
Investment Income                         $         0.00       $         0.00
Reserve Fund Balance                      $ 1,875,000.00       $ 1,875,000.00
                                          --------------                     
Total Interest  Available                 $ 5,498,885.19       $ 5,153,307.88
                                                                             
Interest Shortfall                        $         0.00                  N/A
Additional Interest                       $         0.00                  N/A
Carry-over Amount                         $         0.00                  N/A
Carry-over Shortfall                      $         0.00                  N/A
Additional Carry-over Shortfall           $         0.00                  N/A
                                                                             
Monthly Servicing Fee                     $   401,242.82       $   419,326.20
Investor Monthly Servicing Fee            $   312,500.00       $   312,500.00
</TABLE>


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