<PAGE>
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 December 31, 1999 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)
-----------------
<TABLE>
<CAPTION>
<S> <C>
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
</TABLE>
-----------------
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
------- -------
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
- --------------------------------------------------------------------------------
* 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.
<PAGE>
FORM 10-K (Pursuant to No-Action Letter)
PART 1
Item 1. Business.
The Volkswagen Credit Auto Master Trust (the "Trust") was
created pursuant to the Pooling and Servicing Agreement (the "Pooling
Agreement") dated February 29, 1996 among Volkswagen Credit Auto
Receivables Corporation (the (Company") as seller, VW Credit, Inc., as
servicer, and Citibank, N.A., as trustee (the "Trustee"). The Trust
assets include wholesale receivables ( the "Receivables") generated
from time to time in a portfolio of revolving financing arrangements
with automobile dealers to finance their automobile inventory and
collections on the Receivables. Such property was obtained by the
Company pursuant to the Receivables Purchase Agreement dated as of
February 29, 1996 between the Company, as purchaser, and VW Credit,
Inc. as seller.
The Company has registered with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and sold to
the general public the Series 1996-1, Floating Rate Auto Loan Asset
Backed Certificates in the initial principal amount of $375,000,000.
The Monthly Certificates contain information relating to 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 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 1999 through December 1999 are incorporated by
reference from the registrant's Current Reports on Form 8-K filed with
the Commission on February 25, 1999, March 24, 1999, April 20, 1999,
May 18, 1999, June 21, 1999, July 21, 1999, August 19, 1999, September
20, 1999, October 21, 1999, November 30, 1999, December 20, 1999,
January 24, 2000, respectively.
Item 2. Properties.
For information regarding the property of the Trust, see the
Pooling and Servicing Agreement and the Current Reports on Form 8-K
incorporated by reference herein. For additional information regarding
the Certificates, see Exhibit 99.
Item 3. Legal Proceedings.
Nothing to Report.
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.
<PAGE>
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.
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 if 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.
Nothing to Report.
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 25, 1999, March 24, 1999, April 20, 1999, May 18,
1999, June 21, 1999, July 21, 1999, August 19, 1999, September 20,
1999, October 21, 1999, November 30, 1999, December 20, 1999, January
24, 2000.
(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).
<PAGE>
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).
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 1999
through December 1999 are incorporated by reference
from the registrant's Current Reports on Form 8-K
filed with the Commission on February 25, 1999, March
24, 1999, April 20, 1999, May 18, 1999, June 21,
1999, July 21, 1999, August 19, 1999, September 20,
1999, October 21, 1999, November 30, 1999, December
20, 1999, January 24, 2000, respectively..
<PAGE>
EXHIBIT 99.1
------------
FORM OF ANNUAL SERVICER'S CERTIFICATE
VW CREDIT, INC.
_____________________________________
VOLKSWAGEN CREDIT, AUTO MASTER TRUST
================================================================================
The undersigned, a duly authorized representative of VW Credit, Inc.
("VCI"), 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, VCI, as Servicer, and
Citibank, N.A., as Trustee, do hereby certify that:
1. VCI 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, 1999
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 Fourteenth day of March, 2000.
/S/ Dennis Tack
----------------------
Name: Dennis Tack
Title: Controller
<PAGE>
<TABLE>
<CAPTION>
Volkswagen Credit Auto Master Trust 1996-1
Annual Distribution Statement: 1999 Activity
- --------------------------------------------------------------------------------------------------------------
15-Feb-99 15-Mar-99 15-Apr-99
<S> <C> <C> <C> <C>
a. Aggregate Amount of Collections $401,338,001.80 $323,822,152.75 $400,579,599.72
Aggregate Amount of Interest Collections $ 3,535,717.65 $ 3,559,468.05 $ 3,831,466.58
Aggregate Amount of Principal Collections $397,802,284.15 $320,262,684.70 $396,748,133.14
Investment Proceeds $ 0.00 $ 0.00 $ 0.00
b. Series Allocation Percentage 100.00% 100.00% 100.00%
Floating Allocation Percentage 73.26% 60.69% 57.82%
Fixed Allocation Percentage N/A N/A N/A
c. Total Amount Distributed on Series 1996-1 $ 1,720,000.00 $ 1,433,145.94 $ 1,646,471.35
d. Amount of Such Distribution Allocable to $ 0.00 $ 0.00 $ 0.00
Principal on 1996-1
e. Amount of Such Distribution Allocable to Interest $ 1,720,000.00 $ 1,433,145.94 $ 1,646,471.35
on 1996-1
f. Investor Default Amount $ 0.00 $ 0.00 $ 0.00
g. Draw Amount $ 0.00 $ 0.00 $ 0.00
h. Investor Charge Offs $ 0.00 $ 0.00 $ 0.00
Amounts of Reimbursements $ 0.00 $ 0.00 $ 0.00
i. Monthly Servicing Fee 1.00% 1.00% 1.00%
j. Expected Controlled Distribution Amount $ 0.00 $ 0.00 $ 0.00
k. Invested Amount $375,000,000.00 $375,000,000.00 $375,000,000.00
l. Pool Factor 100.00% 100.00% 100.00%
m. Available Subordinated Amount $ 69,309,201.75 $ 78,139,381.89 $ 67,952,873.35
n. Reserve Fund Balance $ 1,875,000.00 $ 1,875,000.00 $ 1,875,000.00
o. Principal Funding Account Balance $ 0.00 $ 0.00 $ 0.00
Yield Supplement Account Balance $ 1,875,000.00 $ 1,875,000.00 $ 1,875,000.00
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
17-May-99 15-Jun-99 15-Jul-99
<S> <C> <C> <C> <C>
a. Aggregate Amount of Collections $406,863,062.68 $393,869,039.45 $467,731,365.54
Aggregate Amount of Interest Collections $ 4,122,211.67 $ 4,513,677.89 $ 4,624,162.90
Aggregate Amount of Principal Collections $402,740,851.01 $389,355,361.56 $463,107,202.64
Investment Proceeds $ 0.00 $ 0.00 $ 0.00
b. Series Allocation Percentage 100.00% 100.00% 100.00%
Floating Allocation Percentage 56.46% 56.18% 53.40%
Fixed Allocation Percentage N/A N/A N/A
c. Total Amount Distributed on Series 1996-1 $ 1,589,453.13 $ 1,529,296.88 $ 1,608,593.75
d. Amount of Such Distribution Allocable to $ 0.00 $ 0.00 $ 0.00
Principal on 1996-1
e. Amount of Such Distribution Allocable to Interest $ 1,589,453.13 $ 1,529,296.88 $ 1,608,593.75
on 1996-1
f. Investor Default Amount $ 0.00 $ 0.00 $ 0.00
g. Draw Amount $ 0.00 $ 0.00 $ 0.00
h. Investor Charge Offs $ 0.00 $ 0.00 $ 0.00
Amounts of Reimbursements $ 0.00 $ 0.00 $ 0.00
i. Monthly Servicing Fee 1.00% 1.00% 1.00%
j. Expected Controlled Distribution Amount $ 0.00 $ 0.00 $ 0.00
k. Invested Amount $375,000,000.00 $375,000,000.00 $375,000,000.00
l. Pool Factor 100.00% 100.00% 100.00%
m. Available Subordinated Amount $ 72,595,133.64 $ 63,952,938.31 $ 65,174,349.87
n. Reserve Fund Balance $ 1,875,000.00 $ 1,875,000.00 $ 1,875,000.00
o. Principal Funding Account Balance $ 0.00 $ 0.00 $ 0.00
Yield Supplement Account Balance $ 1,875,000.00 $ 1,875,000.00 $ 1,875,000.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Volkswagen Credit Auto Master Trust 1996-1
Annual Distribution Statement: 1999 Activity
- ---------------------------------------------------------------------------------------------------------------------
16-Aug-99 15-Sep-99 15-Oct-99 15-Nov-99
<S><C> <C> <C> <C> <C>
Aggregate Amount of Collections $402,160,099.00 $412,575,654.51 $355,930,114.14 $390,918,791.42
Aggregate Amount of Interest Collections $ 4,343,636.10 $ 4,376,601.61 $ 3,793,750.37 $ 4,424,761.63
Aggregate Amount of Principal Collections $397,816,462.90 $408,199,052.90 $352,136,363.77 $386,494,029.79
Investment Proceeds $ 0.00 $ 0.00 $ 0.00 $ 0.00
Series Allocation Percentage 100.00% 100.00% 100.00% 100.00%
Floating Allocation Percentage 57.28% 58.43% 59.45% 67.34%
Fixed Allocation Percentage N/A N/A N/A N/A
Total Amount Distributed on Series 1996-1 $ 1,780,000.00 $ 1,696,484.38 $ 1,731,250.00 $ 1,797,434.90
Amount of Such Distribution Allocable to $ 0.00 $ 0.00 $ 0.00 $ 0.00
Principal on 1996-1
Amount of Such Distribution Allocable to $ 1,780,000.00 $ 1,696,484.38 $ 1,731,250.00 $ 1,797,434.90
Interest on 1996-1
Investor Default Amount $ 0.00 $ 0.00 $ 0.00 $ 0.00
Draw Amount $ 0.00 $ 0.00 $ 0.00 $ 0.00
Investor Charge Offs $ 0.00 $ 0.00 $ 0.00 $ 0.00
Amounts of Reimbursements $ 0.00 $ 0.00 $ 0.00 $ 0.00
Monthly Servicing Fee 1.00% 1.00% 1.00% 1.00%
Expected Controlled Distribution Amount $ 0.00 $ 0.00 $ 0.00 $ 0.00
Invested Amount $375,000,000.00 $375,000,000.00 $375,000,000.00 $375,000,000.00
Pool Factor 100.00% 100.00% 100.00% 100.00%
Available Subordinated Amount $ 63,655,917.67 $ 65,290,363.16 $ 63,814,361.75 $ 68,933,383.20
Reserve Fund Balance $ 1,875,000.00 $ 1,875,000.00 $ 1,875,000.00 $ 1,875,000.00
Principal Funding Account Balance $ 0.00 $ 0.00 $ 0.00 $ 0.00
Yield Supplement Account Balance $ 1,875,000.00 $ 1,875,000.00 $ 1,875,000.00 $ 1,875,000.00
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
15-Dec-99 18-Jan-00 Total
<S><C> <C> <C> <C>
Aggregate Amount of Collections $390,464,619.51 $390,807,204.76 $4,737,059,705.28
Aggregate Amount of Interest Collections $ 3,970,589.72 $ 4,313,174.97 $ 49,409,219.14
Aggregate Amount of Principal Collections $386,494,029.79 $386,494,029.79 $4,687,650,486.14
Investment Proceeds $ 0.00 $ 0.00 $ 0.00
Series Allocation Percentage 100.00% 100.00% 100.00%
Floating Allocation Percentage 64.57% 58.86% 60.31%
Fixed Allocation Percentage N/A N/A N/A
Total Amount Distributed on Series 1996-1 $ 1,746,093.75 $ 2,345,468.75 $ 20,623,692.83
Amount of Such Distribution Allocable to $ 0.00 $ 0.00 $ 0.00
Principal on 1996-1
Amount of Such Distribution Allocable to $ 1,746,093.75 $ 2,345,468.75 $ 20,623,692.83
Interest on 1996-1
Investor Default Amount $ 0.00 $ 0.00 $ 0.00
Draw Amount $ 0.00 $ 0.00 $ 0.00
Investor Charge Offs $ 0.00 $ 0.00 $ 0.00
Amounts of Reimbursements $ 0.00 $ 0.00 $ 0.00
Monthly Servicing Fee 1.00% 1.00% 1.00%
Expected Controlled Distribution Amount $ 0.00 $ 0.00 $ 0.00
Invested Amount $375,000,000.00 $375,000,000.00 $ 375,000,000.00
Pool Factor 100.00% 100.00% 100.00%
Available Subordinated Amount $ 67,824,499.48 $ 68,192,859.08 $ 67,902,938.60
Reserve Fund Balance $ 1,875,000.00 $ 1,875,000.00 $ 1,875,000.00
Principal Funding Account Balance $ 0.00 $ 0.00 $ 0.00
Yield Supplement Account Balance $ 1,875,000.00 $ 1,875,000.00 $ 1,875,000.00
</TABLE>
<PAGE>
(1700)
FOR IMMEDIATE RELEASE:
Wednesday, February 9, 2000
CONTACT: David Schulz
(248) 340-5223
VW CREDIT, INC. COMMENCES ACCUMULATION PERIOD FOR DEALER
LOAN BACKED CERTIFICATES, SERIES 1996-1 ISSUED BY THE
VOLKSWAGEN CREDIT AUTO MASTER TRUST
AUBURN HILLS, Mich.--VW Credit, Inc. today announced that it had taken all
action necessary to commence the Accumulation Period for the $375,000,000
Floating Rate Dealer Loan Backed Certificates, Series 1996-1, issued by the
Volkswagen Credit Auto Master Trust.
Under the applicable transaction documents, VW Credit, as Servicer, may
elect to cause principal on the Certificates to be paid in full before the April
2001 distribution date. On February 9, 2000, the Servicer notified the Trustee
of the trust that the Servicer had made that election. Based on that notice,
the "Principal Payment Date Establishment Date" will be March 15, 2000 and the
"Initial Accumulation Period Commencement Date" will be April 1, 2000. This
means that on monthly distribution dates with respect to the Accumulation
Period, principal collections on the underlying receivables will be deposited in
the "Principal Funding Account" where those collections will be held (or
"accumulated") for the purpose of paying principal to the holders of the
Certificates.
It is currently anticipated that principal will be paid in full to the
holders of the
(more)
<PAGE>
- 2 -
Certificates on the June 15, 2000 distribution date. However, if insufficient
collections are received by the Servicer prior to May 31, 2000 to pay principal
in full by the June 15, 2000 distribution date, then it is anticipated that
principal on the Certificates will be paid in full on a future distribution date
on which sufficient funds are available for that purpose.
The information in this Press Release summarizes certain provisions of the
transaction documents. For a more detailed description, please refer to the
Prospectus and Prospectus Supplement dated March 14, 1996. This letter is
qualified by reference to the terms of the transaction documents.
The above referenced transaction is part of VW Credit's overall asset
securitization program. The Company expects asset securitization to maintain an
important role in the Company's overall funding strategy.
# # #
<PAGE>
EXHIBIT 99.2
PRICEWATERHOUSECOOPERS[LOGO]
- --------------------------------------------------------------------------------
PricewaterhouseCoopers LLP
400 Renaissance Center
Detroit MI, 48143-1507
Independent Accountant's Report Telephone (313) 394 6000
Facsimile (313) 394 6555
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")
----------------------------------------------------------
for the year ended December 31, 1999 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., two, three and four
relating to Disbursements Made on Behalf of Investor, 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,
1999 is fairly stated, in all material respects.
/S/ PricewaterhouseCooper LLP
Detroit, Michigan
January 24, 2000
<PAGE>
January 24, 2000
[LOGO]Volkswagen
Credit
[LOGO]
Audi
Financial Services
PricewaterhouseCoopers LLP
400 Renaissance Center
Detroit, MI 48243
3800 Hamlin Road
Auburn Hills, MI 48326
Tel (248) 340-5885
Fax (248) 340-5387
Ladies and Gentleman:
As of and for the year ended December 31, 1999, 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
--------------------------
Program for Mortgage Bankers and the Pooling and Servicing Agreement dated
- -----------------------------
February 29, 1996.
Sincerely,
/S/Wolfgang J. Rasper
Wolfgang J. Rasper
Chief Financial Officer, VW Credit, Inc.
