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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 COMMISSION FILE NO. 33-80055
VOLKSWAGEN CREDIT AUTO RECEIVABLES CORPORATION
ON BEHALF OF
VOLKSWAGEN CREDIT AUTO MASTER TRUST
(Issuer of the Volkswagen Credit Auto Master Trust Floating Rate Dealer Loan
Backed Certificates, Series 1996-1 (the "Certificates"))
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 38-2748796
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3800 HAMLIN ROAD 48326
Auburn Hills, Michigan (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (248) 340-4938
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Form 8-A was filed with the Securities and Exchange Commission (the
"Commission") registering the Series of Certificates pursuant to Section 12(g)
of the Securities Exchange Act of 1934 (the "Act").
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 (the "Act") during the preceding 12 months (or for such period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X * NO
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State the aggregate market value of the voting stock held by non-affiliates
of the registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked price of
such stock, as of a specific date within 60 days prior to the date of filing.
(See definition of affiliate in Rule 405, 17 C.F.R. 230.405):
NOT APPLICABLE
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* On May 9, 1997, the registrant was issued a no-action letter (the "No-
Action Letter") by the commission with respect to certain of the registrant's
reporting requirements pursuant to Section 13 or 15(d) of the Act. This Form
10-K has been prepared in accordance with the terms of such No-Action Letter.
FORM 10-K (Pursuant to No-Action Letter)
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PART 1
ITEM 1. BUSINESS.
Omitted pursuant to the No-Action Letter.
ITEM 2. PROPERTIES.
Pursuant to Section 3.06 of the Pooling and Servicing Agreement
(the "Pooling Agreement") dated as of February 29, 1996 relating to the
Volkswagen Credit Auto Master Trust (the "Trust") among Volkswagen Credit
Auto Receivables Corporation, VW Credit, Inc. and Citibank, N.A., as
trustee (the "Trustee"), Coopers & Lybrand L.L.P. has performed certain
procedures in connection with the Monthly Servicer's Certificates (the
"Monthly Certificates") for the months of January 1997 through December
1997. The Monthly Certificates contain information relating to the
receivables (the "Receivables") and the accounts from which the Receivables
arise (the "Accounts") and are prepared by the Servicer and delivered to
the Trustee pursuant to Section 3.04 of the Pooling Agreement. The report
issued by Coopers & Lybrand L.L.P. in connection with the servicing
activities of VW Credit, Inc., as servicer (in such capacity, the
"Servicer"), is attached hereto as Exhibit 99.2. The Monthly Certificates
containing information relating to the Receivables and the Accounts for the
Collection Periods from and including January 1997 through December 1997
are incorporated by reference from the registrant's Current Reports on Form
8-K filed with the Commission on February 26, 1997, March 26, 1997, April
28, 1997, May 21, 1997, June 23, 1997, July 23, 1997, August 21, 1997,
September 23, 1997, October 23, 1997, December 1, 1997, December 23, 1997,
January 30, 1998, respectively.
ITEM 3. LEGAL PROCEEDINGS.
The registrant knows of no material pending legal proceedings
involving the Trust, Volkswagen Credit Auto Receivables Corporation, VW
Credit, Inc. or the Trustee (in its capacity as such), other than routine
litigation incidental to the business of the Trust, Volkswagen Credit Auto
Receivables Corporation, VW Credit, Inc. or the Trust (in its capacity as
such).
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(a) To the best knowledge of the registrant, there is no established
public trading market for the Certificates.
(b) The Certificates are represented by one or more certificates
registered in the name of Cede & Co. ("Cede"), the nominee of The
Depository Trust Company ("DTC").
(c) Omitted pursuant to the No-Action Letter.
ITEM 6. SELECTED FINANCIAL DATA.
Omitted pursuant to the No-Action Letter.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.
Omitted pursuant to the No-Action Letter.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
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Omitted pursuant to the No-Action Letter.
ITEM 9. CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) The Certificates are represented by one or more certificates
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 limited circumstances set forth in the
Pooling Agreement. Accordingly Cede is the sole holder of record of
Certificates, which it holds on behalf of brokers, dealers, bank, 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, NY 10004.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
There have not been, and there are not currently proposed, any
transactions, to which either the Trust, Volkswagen Credit Auto Receivables
Corporation, as seller, VW Credit, Inc., as Servicer, or the Trustee, on
behalf of the Trust, is a party with any Certificateholder who owns of
record more than five percent of the Certificates.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) Omitted pursuant to the No-Action Letter.
(b) The registrant has filed Current Reports on Form 8-K
containing certain financial information with regard to the Trust, the
Receivables and the Accounts, in accordance with the No-Action Letter, on
February 26, 1997, March 26, 1997, April 28, 1997, May 21, 1997, June 23,
1997, July 23, 1997, August 21, 1997, September 23, 1997, October 23, 1997,
December 1, 1997, December 23, 1997, January 30, 1998.
(c) 3.1 The Articles of Incorporation and By-Laws of the
registrant are incorporated by reference from Exhibits 3.1
and 3.2, respectively, of the registrant's Registration
Statement on Form S-3 (File No. 33-80055).
4.1 The Pooling Agreement and the Series 1996-1 Supplement
thereto are incorporated by reference from Exhibits 2.2
and 2.3, respectively, of the registrant's Form 8A filed
with the Commission on September 13, 1996.
5.1 The opinion of Cravath, Swaine & Moore with respect to
certain matters involving the Certificates is incorporated
by reference from Exhibit 5.1 of the registrant's
Registration Statement on Form S-3 (File No. 33-80055).
8.1 The opinion of Cravath, Swaine & Moore with respect to
federal tax matters s incorporated by reference from
Exhibit 8.1 of the registrant's Registration Statement on
Form S-3 (File No. 33-80055).
8.2 The opinion of Honigman, Miller Schwartz & Cohn with
respect to Michigan state tax matters is incorporated by
reference from Exhibit 8.2 of the registrant's
Registration Statement on Form S-3 (File No. 33-80055).
23.1 The consent of Cravath, Swaine & Moore is incorporated by
reference from Exhibit 23.1 of the registrant's
Registration Statement on Form S-3 (File 33-80055).
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23.2 The Consent of Honigman, Miller, Schwartz & Cohn is
incorporated by reference from Exhibit 23.2 of the
registrant's Registration Statement on Form S-3 (File No.
33-80055).
99.1 The Annual Certificate of VW Credit, Inc., as Servicer is
attached hereto as Exhibit 99.1
99.2 The report on the activities of VW Credit, Inc., as
Servicer, prepared by Coopers & Lybrand L.L.P., pursuant
to Section 3.06 of the Pooling Agreement is Attached
hereto as Exhibit 99.2.
99.3 The Monthly Certificates containing information relating
to the Receivables and the Accounts for the Collection
Periods from and including January 1997 through December
1997 are incorporated by reference from the registrant's
Current Reports on Form 8-K filed with the Commission on
February 26, 1997, March 26, 1997, April 28, 1997, May 21,
1997, June 23, 1997, July 23, 1997, August 21, 1997,
September 23, 1997, October 23, 1997, December 1, 1997,
December 23, 1997, January 30, 1998, respectively.
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EXHIBIT 99.1
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FORM OF ANNUAL SERVICER'S CERTIFICATE
VW CREDIT, INC.
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VOLKSWAGEN CREDIT, AUTO MASTER TRUST
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The undersigned, a duly authorized representative of VW Credit, Inc.
("VWCI"), as Servicer, pursuant to the Pooling and Servicing Agreement dated as
of February 29, 1996 (as amended and supplemented, the "Agreement"), by and
among Volkswagen Auto Receivables Corporation, as seller, VWCI, as Servicer, and
Citibank, N.A. as Trustee, do hereby certify that:
1. VWCI is, as of the date hereof, the Servicer under the Agreement.
2. The Undersigned is a Servicing Officer and is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to the
Trustee, any Agent and any Enhancement Providers.
3. A Review of the activities of the Servicer during the period from the
initial Closing Date through the calendar year ended December 31, 1997 and of
its performance under the Agreement was conducted under my supervision.
4. Based on such review, the Servicer has, to the best of my knowledge,
performed in all material respects all of its obligations under the Agreement
throughout such period and no default in the performance of such obligations has
occurred or is continuing except as set forth in paragraph 5 below.
5. None.
Capitalized terms used but not defined herein are used as defined in the
Agreement.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
this 27 day of March , 1998.
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/s/ [ILLEGIBLE]
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Name:
Title: PROCESS LEADER
RISK MANAGEMENT
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EXHIBIT 99.2
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[LETTERHEAD OF COOPERS & LYBRAND L.L.P.]
INDEPENDENT ACCOUNTANT'S REPORT
To the Board of Directors of
VW Credit, Inc. as servicer under
the Pooling and Servicing Agreement
dated February 29, 1996 and
Citibank, N.A. as Trustee:
We have examined management's assertion about VW Credit, Inc.'s compliance with
the minimum servicing standards identified in the Mortgage Bankers Association
of America's Uniform Single Attestation Program for Mortgage Bankers ("USAP")
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for the year ended December 31, 1997 included in the accompanying management
assertion to the extent the procedures in such program are applicable to the
Pooling and Servicing Agreement dated February 29, 1996. As Program Step I.,
four relating to Escrow Accounts, Program Step III., three and four relating to
Tax, Insurance and Late Payment Penalties, Program Step V., two, three and four
relating to Adjustable Rate Mortgages and Program Step VII., one relating to
Fidelity Bond and Error and Omissions Policies are not applicable to the
servicing obligations set forth in the Pooling and Servicing Agreement, we did
not perform the related procedures. Management is responsible for VW Credit,
Inc.'s compliance with those minimum servicing standards. Our responsibility is
to express an opinion on management's assertion about the entity's compliance
based on our examination.
Our examination was made in accordance with the standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about VW Credit, Inc.'s compliance with the
minimum servicing standards and performing other such procedures as we
considered necessary in the circumstances. We believe that our examination
provides a reasonable basis for our opinion. Our examination does not provide a
legal determination on VW Credit, Inc.'s compliance with the minimum servicing
standards.
In our opinion, management's assertion that VW Credit, Inc. complied with the
aforementioned minimum servicing standards for the year ending December 31, 1997
is fairly stated, in all material respects.
/s/ Coopers & Lybrand L.L.P.
Detroit, Michigan
February 6, 1998
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EXHIBIT 99.2
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[LOGO] VOLKSWAGEN CREDIT
[LOGO] AUDI FINANCIAL SERVICES
February 6, 1998 3800 Hamlin Road
Auburn Hills, MI 48326
Tel. (248) 340-5885
Fax (248) 340-5387
Coopers & Lybrand L.L.P.
400 Renaissance Center
Detroit, MI 48243
Ladies and Gentlemen:
As of and for the year ended December 31, 1997, VW Credit, Inc. has complied in
all material respects with the applicable minimum servicing standards set forth
in the Mortgage Bankers Association of America's Uniform Single Attestation
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Program for Mortgage Bankers and the Pooling and Servicing Agreement dated
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February 29, 1996.
Sincerely,
/s/ Wolfgang J. Rasper
Wolfgang J. Rasper
Chief Financial Officer, VW Credit, Inc.
