Exhibit 8.1
June 22, 2000
To the Addressees Indicated
on Schedule A hereto
Re: Ford Credit Auto Owner Trust
2000-C Asset Backed Notes
You have requested our opinion as to certain federal income
tax consequences in connection with the issuance of the Class A-1 6.621% Asset
Backed Notes (the "Class A-1 Notes"), the Class A-2 6.822% Asset Backed Notes
(the "Class A-2 Notes" and, together with the Class A-1 Notes, the "Exempt
Notes"), the Class A-3 7.13% Asset Backed Notes (the "Class A-3 Notes"), the
Class A-4 7.24% Asset Backed Notes (the "Class A-4 Notes"), the Class A-5 7.26%
Asset Backed Notes (the "Class A-5 Notes" and, together with the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, the
"Class A Notes"), the Class B 7.50% Asset Backed Notes (the "Class B Notes" and,
together with the Class A-3 Notes, the Class A-4 Notes and the Class A-5 Notes,
the "Publicly Offered Notes" and, together with the Exempt Notes, the "Notes"),
the Class C 7.89% Asset Backed Certificates (the "Class C Certificates") and the
Class D 9.00% Asset Backed Certificates (the "Class D Certificates" and,
together with the Class C Certificates, the "Certificates") by Ford Credit Auto
Owner Trust 2000-C (the "Trust") pursuant to the terms of, (a) with respect to
the Notes, an Indenture dated as of June 1, 2000 (the "Indenture") between the
Trust and The Chase Manhattan Bank, as Indenture Trustee (the "Indenture
Trustee"), and (b) with respect to the Certificates, an Amended and Restated
Trust Agreement dated as of June 1, 2000 (the "Trust Agreement") between Ford
Credit Auto Receivables Two L.P. (the "Seller"), The Bank of New York, as Owner
Trustee (the "Owner Trustee") and The Bank of New York (Delaware), as Delaware
Trustee (the "Delaware Trustee"). A portion of the Class A-3 Notes having an
aggregate principal amount of $745,000,000 of the Class A-3 Notes and the entire
aggregate initial principal amount of the Class A-1 Notes, the Class A-2 Notes,
the Class A-4 Notes, the Class A-5 Notes and the Class B Notes will be sold to
the underwriters (the "Underwriters") who are named in Schedule I pursuant to an
underwriting agreement (the "Underwriting Agreement") between the Seller and
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill") and J.P. Morgan
Securities Inc. ("J.P. Morgan"), as representatives of the several Underwriters.
An additional $250,000,000 in aggregate principal amount of the Class A-3 Notes
will be sold to Merrill Lynch Bank & Trust Co. and Merrill Lynch Bank USA
pursuant to separate Class A Note Purchase Agreements (the "Class A Note
Purchase Agreements") through Merrill as placement agent under a placement
agency agreement (the "Placement Agency Agreement"). The Class C Certificates
and the Class D Certificates will initially be retained by the Seller.
The rights of the holders of the Class A Notes (the "Class A
Noteholders") will be senior to the rights of the holders of the Class B Notes
(the "Class B Noteholders" and, together with the Class A Noteholders, the
"Noteholders"). The rights of the Noteholders will be senior to the rights of
the holders of the Certificates (the "Certificateholders"). The rights of the
holders of the Class C Certificates (the "Class C Certificateholders") will be
senior to the rights of the holders of the Class D Certificates (the "Class D
Certificateholders"). Each payment period, the Seller will be entitled to
receive any remaining portion of funds on deposit in the Collection Account
after (i) the Total Required Payment has been made, (ii) the Reserve Account's
balance has been restored, if necessary, to the Specified Reserve Balance and
(iii) the Regular Principal Distribution Amount has been deposited into the
Principal Distribution Account. The Seller will at all times hold the right to
receive all such excess amounts.
<PAGE>
You have asked us whether, for federal income tax purposes,
the Class A Notes and the Class B Notes will be characterized as debt and
whether the Trust will be classified as an association (or publicly traded
partnership) taxable as a corporation. In rendering our opinion, we have
examined and relied upon (i) the registration statements for the Publicly
Offered Notes on Form S-3, consisting of Registration No. 333-82895, filed with
the SEC on July 15, 1999, Amendment No.1 thereto filed with the SEC on September
3, 1999, Post-Effective Amendment No. 1 thereto filed with the SEC on January
18, 2000 and Post-Effective Amendment No. 2 thereto filed with the SEC on April
10, 2000 (such registration statements, as so amended, the "Registration
Statement"), including the prospectus dated March 11, 2000 as supplemented by
the prospectus supplement dated June 13, 2000 included therein (the
"Prospectus"), (ii) the offering memorandum dated June 13, 2000, relating to the
offering of the Exempt Notes (the "Offering Memorandum"), which includes and
incorporates the Prospectus as a part thereof, (iii) the Indenture, (iv) the
Trust Agreement, (v) the Sale and Servicing Agreement, (vi) a certificate
executed by an officer of the Seller dated the date hereof regarding the
Seller's projections of the losses that the Trust will incur in respect of the
Receivables (the "Loss Assumption Certificate"), and (vii) such other documents
as we have deemed necessary or appropriate as a basis for the opinion set forth
below, and we have assumed that the parties to such documents will comply with
the terms thereof, that such documents are not amended and that such documents
are enforceable in accordance with their respective terms. In connection
therewith, we note that you will receive an opinion from this firm regarding
such enforceability.
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such latter
documents. As to any facts material to the opinions expressed herein which were
not independently established or verified, we have relied upon statements,
representations, and certifications of officers and other representatives of the
Seller, the Servicer, the Underwriters, and others including certain
calculations performed by Merrill. In addition, our opinion is premised on the
accuracy of the facts set forth in the Prospectus and the Offering Memorandum
and the facts set forth in the representations referred to in the Prospectus and
the Offering Memorandum.
In rendering our opinion, we have also considered and relied
upon the Internal Revenue Code of 1986, as amended (the "Code"), administrative
rulings, judicial decisions, Treasury Regulations, and such other authorities as
we have deemed appropriate. The statutory provisions, Treasury Regulations,
interpretations, and other authorities upon which our opinion is based are
subject to change, and such changes could apply retroactively. In addition,
there can be no assurance that positions contrary to those stated in our opinion
will not be taken by the Internal Revenue Service.
<PAGE>
I. Federal Income Tax Characterization of the Notes.
Whether the Class A Notes and the Class B Notes are debt or
equity interests in the Trust Property is determined both by the terms of the
Notes and by whether the "substantial incidents of ownership" of the Trust
Property have been transferred to the Noteholders. See, Watts Copy Systems,
Inc. v. Commissioner, 67 TCM 2480, 2483 (1994); Coulter Electronics, Inc. v.
Commissioner, 59 TCM 350 (1990), aff'd, 943 F.2d 1318 (11th Cir. 1991);
United Surgical Steel Co. v. Commissioner, 54 T.C. 1215 (1970), acq.,
1971-2 C.B. 3; Town & Country Food Co. v. Commissioner, 51 T.C. 1049 (1969),
acq., 1969-2 C.B. xxv; GCM 39567 (June 10, 1986); and GCM 39584 (December 3,
1986). Thus, the most important considerations are: i) whether the Noteholders
bear the burdens of ownership of the Trust Property, (ii) whether the
Noteholders have any of the benefits of ownership of the Trust Property, and
(iii) whether the terms of the Notes have features which are more characteristic
of debt than of equity. As discussed below, the Class A Noteholders do not
obtain, and the Class B Noteholders should not be viewed as obtaining, the
benefits and burdens of ownership of the Trust Property.
A0 The Benefits and Burdens of the Trust Property are Retained by the
Seller.
1. Burdens of Ownership. The principal burden of ownership
with respect to the Trust Property is the risk of loss arising from shortfalls
in the payments on the Receivables. As described below, the transaction pursuant
to which the Notes are issued has been structured so that the risk of loss is
borne by the Seller and the holders of the Certificates.
The total face amount of Notes and Certificates issued by the
Trust is equal to approximately 96.23% of the initial aggregate principal amount
of the Receivables. As a result, as of the date hereof, there is a 'cushion' of
equity supporting the Notes and the Certificates equal to 3.77% of the initial
Pool Balance (the "Initial Equity"). Additionally, the Class A Notes will
initially be supported by the Class B Notes and the Certificates which,
together, have a face amount equal to 7.08% of the initial Pool Balance, and the
principal of which will not be paid until the Class A Notes are paid in full.
Further, the Class B Notes will be supported by the Certificates having a face
amount equal to 3.77% of the initial Pool Balance, the principal of which will
not be paid until the Notes are paid in full. Finally, the Notes (and the
Certificates) will also be supported by the Reserve Account, which may be drawn
upon to make required payments of principal and interest to Noteholders, and
which will initially be funded by a portion of the proceeds of the Notes and
Certificates in the amount of $14,999,852.84 or 0.5% of the initial Pool
Balance. Thus, the initial total credit enhancement supporting the Class A Notes
is equal to 7.58% of the initial Pool Balance, and the initial total credit
enhancement supporting the Class B Notes is equal to 4.27% of the initial Pool
Balance. A portion of the Initial Pool Balance, equal to $169,698,313.04 (the
"Yield Supplement Overcollateralization Amount" or "YSOC") is intended to
compensate for receivables having below-market interest rate. This mechanism, of
course, reduces the overcollateralization available to cover losses and other
shortfalls in the amounts available to pay the Notes. If the YSOC is deducted
from the Initial Pool Balance, the equity supporting the Class A and Class B
Notes will consist of (i) Class C Certificates approximately equal to 2% of the
Pool Balance minus the YSOC (the "Adjusted Pool Balance") and (ii) Class D
Certificates having a principal balance approximately equal to 2% of the
Adjusted Pool Balance, which will be repaid out of interest cash flows on the
Receivables and the Reserve Account. In addition, the Notes will have the
benefit, on each payment date, of the "spread" as is further discussed below.
<PAGE>
On each Distribution Date, any shortfalls in amounts available
to make required payments of principal and interest to Noteholders will first be
absorbed by the portion of the monthly payments from the Receivables which are
attributable to the "spread" between the income from the Receivables (less
certain Trust expenses) and the weighted average rate on the Notes and the
Certificates (the "Spread"). The rights of the Class B Noteholders will be
subordinate to the rights of the Class A Noteholders (the rights of the holders
of each Class of Class A Notes are pari passu with the rights of the holders of
each other Class of Class A Notes). Any amounts remaining in the Collection
Account after giving effect to the payment of the Total Required Payment and
depositing amounts in the Reserve Account to the extent necessary to replenish
it to the Specified Reserve Balance will first be applied to retire the Class
A-1 Notes and the Class A-2 Notes in full. Thereafter, amounts remaining in the
Collection Account are to be deposited in the Principal Distribution Account on
each Distribution Date to the extent of the Regular Principal Distribution
Amount. [1]
Based on calculations provided by Merrill (calculated using
historic loss and prepayment levels) the excess of the Pool Balance over the
outstanding amount of the Class A Notes at the end of one year will have
increased to 11.95% of the then Pool Balance and at the end of two years will
have increased to approximately 21.94% of the then Pool Balance, while the
overcollateralization supporting the Class B Notes (i.e., the excess of the Pool
Balance over the outstanding amount of the Class A Notes and the Class B Notes)
at the end of one year will have increased to 11.42% of the then Pool Balance
and at the end of two years such overcollateralization will have increased to
approximately 17.83% of the then Pool Balance.
While the Indenture permits interest to be paid on the
Certificates ahead of principal on the Class A Notes and the Class B Notes in
some circumstances, such right will be curtailed in any period in which the
aggregate outstanding principal balance of the Class A Notes and Class B Notes
is greater than the current Pool Balance minus the YSOA.
Based on the amounts of credit support and
overcollateralization described above, the Class A-1 Notes and the Class A-2
Notes will be given a rating in the highest short-term rating category, the
Class A-3 Notes, the Class A-4 Notes and the Class A-5 Notes will be given a
rating in the highest long-term rating category and the Class B Notes will be
given a rating of "A" or their respective equivalents from at least two
nationally recognized rating agencies. These investment grade ratings indicate a
very high likelihood that all interest and principal will be timely paid with
respect to the Notes and that the Noteholders do not bear any significant risk
of loss associated with ownership of the Trust Property (although, obviously the
risk of loss with respect to the Class B Notes is greater than the risk
associated with the Class A Notes).
2. Benefits of Ownership. The primary benefits of ownership of
the Trust Property are the payments due from Obligors with respect to the
Receivables. If market interest rates for comparable receivables decrease in
relation to the yield on the Receivables, the Receivables will increase in
value. The Indenture, the Trust Agreement and the Sale and Servicing Agreement
together provide that the rate of return to the Noteholders is, for each of the
Classes of the Notes, a fixed rate set at the time of the pricing of the Notes
and the Seller receives the remaining proceeds from the Receivables (after
payment of fixed costs including interest on the Certificates). Thus the
economic return to a Noteholder is the result not of any change in the value of
the Receivables but rather reflects the rate of interest payable on a fixed rate
debt instrument.
<PAGE>
As described above, the Seller retains an ownership interest
in the Trust Property in the form of the right to receive, on a periodic basis,
amounts not used to make payments on the Notes or Certificates and, upon payment
in full of the Notes and Certificates, any Receivables remaining in the Trust.
According to projections provided by Merrill, the net present value of such
amount will equal 3.93% of the initial Pool Balance (discounted at a rate of
8.40%). [2]
3. Default Rights. In the event that the Trust defaults in the
payment of any interest (other than a default in the payment of interest on the
Class B Notes prior to the time that all of the Class A Notes have been paid in
full) and such default is not remedied within five days, or the Trust defaults
in the payment of the full amount of the principal or any installment of the
principal of any Note when the same becomes due and payable, an Event of Default
will occur and either the Indenture Trustee or the holders of Notes representing
not less than a majority of the outstanding amount of the Notes may declare all
of the Notes, including interest accrued and unpaid, to be immediately due and
payable (however, if an Event of Default occurs, the Class B Noteholders will
not have any right to direct or to consent to any actions by the Indenture
Trustee until the Class A Notes have been paid in full). Upon such a
declaration, the Indenture Trustee could sell the Trust Property and the
proceeds therefrom would be applied to pay the Noteholders to the extent of the
outstanding amount and any accrued and unpaid interest, before making any
payments to Certificateholders.
B. Other Factors.
A number of other factors support the conclusion that the
Class A Notes are, in substance, debt and that the Class B Notes should also be
considered debt. The Notes are denominated as indebtedness and the Seller and
the Noteholders, by their purchase of the Notes, will agree to treat the Notes
for federal, state and local income and franchise tax purposes as indebtedness
of the Trust. The terms of the Receivables differ materially from the terms of
the Notes with regard to their respective interest rates. Moreover, Merrill has
informed us that the Receivables will have a weighted average life of 2.09 years
(based on the assumptions set forth in the Prospectus under the caption
"STRUCTURAL SUMMARY-composition of the Receivables"). On the other hand, the
Notes, of which there will be six classes, will have weighted average lives of
0.10 years for the Class A-1 Notes, 0.30 years for the Class A-2 Notes, 0.87
years for the Class A-3 Notes, 2.00 years for the Class A-4 Notes, 2.94 years
for the Class A-5 Notes and 2.98 years for the Class B Notes (based on the
pricing prepayment assumption and the other assumptions set forth in the
Prospectus under the caption "THE RECEIVABLES POOL-Weighted Average Life of the
Securities"). The Trust will retain control and possession of the Receivables.
The Servicer is responsible for servicing, collection and administration of the
Receivables and will bear all costs and expenses incurred in connection with
such activities, although an amount to compensate the Servicer for collection
activity is permitted by the Sale and Servicing Agreement to be periodically
withdrawn by the Servicer from the assets otherwise held by the Trust for the
benefit of the Noteholders. The Indenture Trustee, on behalf of the Noteholders,
has the right to inspect the documentation with respect to the Receivables that
the Servicer will maintain on behalf of the Trust, a right which is common in
loan transactions. The foregoing additional factors support the conclusion that
the transaction described in the Indenture, the Trust Agreement and the Sale and
Servicing Agreement with respect to the Notes constitutes an issuance of debt.
Moreover, the substance of the transaction is consistent with the
characterization of the Notes as debt.
<PAGE>
Based on and subject to the foregoing, although there are no
authorities involving closely comparable situations, in our opinion the Class A
Notes will be treated as indebtedness for federal income tax purposes.
The Class B Notes are subordinate to the Class A Notes, and
are supported, as described above, by less credit enhancement than the Class A
Notes. In addition, the rights of holders of Class B Notes as creditors are
limited while the Class A Notes are outstanding. For these reasons, the Class B
Notes could be viewed as bearing certain burdens of ownership of the
Receivables. However, despite the foregoing factors, the Class B Notes are rated
"A" or its equivalent by at least two nationally recognized rating agencies
evidencing a high degree of certainty that they will be repaid (and thus do not
bear any expected risk of losses with respect to the Receivables). In addition,
the Class B Notes do not receive any benefits of ownership of the Receivables.
Accordingly, while the issue is not free from doubt, in our opinion the Class B
Notes should be characterized as indebtedness for federal income tax purposes.
II. Federal Income Tax Characterization of the Trust.
The Certificates are denominated as equity interests in the
Trust, and the Seller and the Certificateholders, in purchasing the
Certificates, agree to treat the Trust as a partnership for federal income tax
purposes, with the partners being the Seller and the Certificateholders. The
Seller will at all times, possess the right to receive all of the Trust Property
not used to pay the Notes and Certificates.
Although, in some respects, the Trust is similar to trusts
established to hold collateral pledged as security in connection with lending
transactions, because no opinion of counsel is sought that such Certificates are
debt, the Trust must be viewed as an entity whose characterization will be
determined under Sections 7701 or 7704 and applicable Treasury Regulations
promulgated thereunder. [3]
Section 7704 of the Code provides that, subject to certain
exceptions, a partnership the interests in which are (i) traded on an
established securities market or (ii) readily tradable on a secondary market (or
the substantial equivalent thereof) will be treated as a corporation for federal
income tax purposes. Section 7704(c), however, excepts certain publicly traded
partnerships ("PTPs") from treatment as a corporation for tax purposes if they
have sufficient passive-type income. Specifically, Section 7704(c) provides that
a PTP shall not be treated as a corporation for tax purposes if 90 percent or
more of its gross income consists of "qualifying income." Qualifying income is
defined by Section 7704(d) to include interest and any gain from the sale or
disposition of a capital asset. The Trust's sole source of income will derive
from interest paid with regard to and gain resulting from the disposition of the
Receivables.
We note that Section 7704(d)(2) disqualifies from the category
of otherwise "qualifying income" interest that is derived in the conduct of a
"financial or insurance business." In our view, because the Indenture Trustee,
Owner Trustee and Servicer cannot manage the assets of the Trust in any ordinary
sense, and in particular, cannot sell the Receivables (except in the event of an
Event of Default or dissolution of the Trust) and cannot acquire additional
assets, the Trust should not be found to be carrying on a financial business.
However, the Service has not provided guidance as to what constitutes a
financial or insurance business and accordingly our conclusion is based on our
interpretation of the statutory language of Section 7704 and not on authorities
construing the statute. Accordingly, we believe that since the Trust should not
be found to be engaged in a financial business the interest received on the
Receivables will constitute qualifying income.
<PAGE>
Accordingly, the Trust would qualify for the Section 7704(c)
exception to the PTP rules and would not be taxable as a corporation thereunder,
assuming that it otherwise would qualify as a partnership for federal income tax
purposes.
"Eligible entities" (i.e.,entities not explicitly classified
as a corporation under Treas. Reg.ss.301.7701-2(b)) with at least two members
are, by default, treated as partnerships for federal income taxation purposes,
and if they have only a single member, will be disregarded entities. Treas.
Reg.ss.301.7701-3(b). The Trust, which is a business trust formed under the
laws of the State of Delaware pursuant to the Trust Agreement, may not be
treated as a trust for federal income taxes because it may not be "simply an
arrangement to protect or conserve [the Trust Property] for beneficiaries".
Treas Reg.ss.301.7701-4(b). Therefore, because the Trust is not included in the
list of corporate entities described in Treas. Reg.ss.301.7701-2(b), it will be
treated as a partnership for federal income tax purposes under Treas.
Reg.ss.301.7701-3(b), if it (i) is not a trust for federal income tax
purposes and (ii) is treated as having multiple owners (which would occur if any
of the Certificates are sold) and, for so long as all of the Certificates are
held by the Seller will be a disregarded entity. In such a case, in our opinion
the Trust will not be classified as an association or a PTP taxable as a
corporation for federal income tax purposes.
III. Federal Tax Matters in Prospectus
Based on and subject to the foregoing, it is our opinion that,
under present law, the discussions presented under the captions "SUMMARY -- Tax
Status", "TAX MATTERS" and "FEDERAL INCOME TAX MATTERS" in the Prospectus,
although general in nature, to the extent that they address matters of federal
income tax law or legal conclusions with respect thereto, are correct in all
material respects.
* * *
We express no opinion with respect to the matters addressed in
this opinion other than as set forth above, and this opinion is not to be used,
circulated, quoted or otherwise referred to for any other purpose without prior
written consent in each instance. We hereby consent to the filing of this
opinion as an exhibit to material filed in accordance with the Securities
Exchange Act of 1934, as amended, to be incorporated by reference in the
Registration Statement. We disclaim any obligation to update this opinion letter
for events occurring or coming to our attention after the date hereof.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
<PAGE>
Schedule A
Ford Credit Auto Receivables Two L.P.
One American Road
Dearborn, Michigan 48121
The Bank of New York,
as Owner Trustee
Ford Credit Auto Owner Trust 2000-C
101 Barclay Street, Floor 12 East
New York, New York 10286
The Chase Manhattan Bank,
as Indenture Trustee
Corporate Trust Administration
450 West 33rd Street, 15th floor
New York, New York 10001-2697
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities Inc.
On behalf of themselves and
as representatives (the "Representatives")
of the several Underwriters
c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
250 Vesey Street
World Financial Center - North Tower
New York, New York 10281
Merrill Lynch, Pierce, Fenner & Smith Incorporated
as Agent
250 Vesey Street
World Financial Center - North Tower
New York, New York 10281
Standard & Poor's Ratings Services
55 Water Street
New York, New York 10041
<PAGE>
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Fitch, Inc.
One State Street Plaza
New York, New York 10004
--------
[1] The Regular Principal Distribution Amount will equal the difference between
(i) the greater of (1) the then principal balance of the Class A-1 Notes and
Class A-2 Notes and (2) an amount sufficient to cause the then Pool Balance to
exceed the aggregate outstanding principal amount of the Notes and Certificates
by the difference between (x) the Pool Balance and (y) the sum of the Specified
Overcollateralization Amount and the Yield Supplement Overcollateralization
Amount, and (ii) the First Priority Principal Distribution Amount and the Second
Priority Principal Distribution Amount. The "Yield Supplement
Overcollateralization Amount" for each Receivable for each Collection Period is
the excess, if any, of the present value of the scheduled payments due on such
Receivable for each future Collection Period discounted at the APR of the
Receivable over the present value of such scheduled payments discounted at
10.50%, assuming that future scheduled payments on the Receivables are made on
their scheduled due dates without any delays, defaults or prepayments. Based on
this formula, amounts otherwise distributable to the Seller will be applied
generally to establish and maintain a "cushion" of at least 1% (including the
Reserve Account) of the Pool Balance in addition to the credit enhancement of
(i) with respect to the Class A Notes, 7.08% of the initial Pool Balance
(provided by the Class B Notes and the Certificates), and (ii) with respect to
the Class B Notes, 3.77% of the initial Pool Balance (provided by the
Certificates).
[2] A substantial portion of the Receivables bear rates of interest
below the sum of the highest note interest rate and the Servicing Fee ("Subvened
Receivables"). Accordingly, for purposes of this opinion, a significant portion
of the "spread" that would otherwise contribute to the "cushion" supporting the
Notes and the Certificates will been reallocated to provide for payments due
with respect to the Notes that could not otherwise be made because of shortfalls
in Trust cash flow caused by the Subvened Receivables. Moreover, Merrill's
determination of the net present value of the "spread" does not take into
account losses that the Trust will incur in respect of the Receivables (which,
according to the Loss Assumption Certificate provided by the Seller, are
projected to be approximately 5 basis points (expressed as a percentage of the
initial Pool Balance) less than the losses incurred by Ford Credit Auto Owner
Trust 2000-C in respect of its pool of receivables). Accordingly, we recognize
that the net present value of the remaining spread will, in reality, be less
than 3.93% of the initial Pool Balance.
[3] Unless otherwise indicated, all "Section" references hereinafter shall
be to the Code.
