CONFORMED
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1996
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from__________________to________________
Commission file number -
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PREMIER AUTO TRUST 1996-1
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
State of Delaware 38-3294846
- ----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) (Identification No.)
27777 Franklin Road, Southfield, Michigan 48034
- ----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (810) 948-3058
-------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter 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__ No_ X_
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The interim financial data presented herein are unaudited, but in the opinion
of management reflect all adjustments necessary for a fair presentation of
such information. Results for interim periods should not be considered
indicative of results for a full year.
2
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
<TABLE>
<CAPTION>
PREMIER AUTO TRUST 1996-1
STATEMENT OF ASSETS, LIABILITIES AND EQUITY
JUNE 30, 1996
(in millions of dollars)
<S> <C>
ASSETS
Cash and Cash Equivalents (Note 1) $ 94.2
Receivables (Note 3) 1,371.3
--------
TOTAL ASSETS $1,465.5
========
LIABILITIES AND EQUITY
Amounts Held for Future Distribution (Note 1) $ 131.6
Asset Backed Notes (Notes 3 and 4) 1,277.7
Asset Backed Certificates (Notes 3 and 4) 56.2
--------
TOTAL LIABILITIES AND EQUITY $1,465.5
========
<FN>
See Notes to Financial Statements.
</TABLE>
3
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
<TABLE>
<CAPTION>
PREMIER AUTO TRUST 1996-1
STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
FOR THE PERIOD MARCH 1, 1996 (INCEPTION)
THROUGH JUNE 30, 1996
(in millions of dollars)
<S> <C>
CASH RECEIPTS
Proceeds from Sale of Notes and Certificates $1,500.0
Collections of Principal & Interest, and Other 340.8
--------
TOTAL CASH RECEIPTS 1,840.8
--------
CASH DISBURSEMENTS
Purchases of Receivables 1,557.7
Distributions of Principal 166.1
Distributions of Interest 16.1
Distributions of Excess Reserves to Seller 3.0
Distributions of Service Fees 3.7
--------
TOTAL CASH DISBURSEMENTS 1,746.6
--------
CASH RECEIPTS IN EXCESS OF CASH DISBURSEMENTS $ 94.2
========
<FN>
See Notes to Financial Statements.
</TABLE>
4
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
PREMIER AUTO TRUST 1996-1
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of Premier Auto Trust 1996-1 (the "Trust") are
prepared on the basis of cash receipts and disbursements, which is a
comprehensive basis of accounting other than generally accepted accounting
principles.
Cash and Cash Equivalents
Short-term instruments with a maturity of less than three months when
purchased are considered to be cash equivalents. The Trust received certain
cash deposits from Chrysler Financial Corporation ("CFC") which are held as
liquidity and credit enhancement reserves and invested in short-term
instruments. Under the Sale and Servicing Agreement, the servicer is required
to convey principal and interest collections to the Trust within two business
days after their receipt. The Trust invests these collections in short-term
instruments pending distribution.
Amounts Held for Future Distribution
Amounts held for future distribution represent certain short-term investments
and receivables held for future distributions to Noteholders and
Certificateholders, and for liquidity and credit enhancement reserves. Amounts
held for liquidity and credit enhancement reserves which are not utilized for
future distributions to Noteholders and Certificateholders will be distributed
to Premier Receivables L.L.C. ("Premier L.L.C.").
NOTE 2 - RELATED PARTIES
Premier L.L.C. is a limited liability company controlled by CFC. Premier Auto
Receivables Company ("PARCO") is a wholly-owned subsidiary of CFC.
NOTE 3 - SALE OF ASSET BACKED NOTES AND CERTIFICATES
The Trust was formed under the laws of Delaware pursuant to an Amended and
Restated Trust Agreement dated as of March 1, 1996, among PARCO, CFC, and
Chemical Bank Delaware, acting thereunder not in its individual capacity but
solely as trustee of the Trust.
Chemical Bank Delaware is now known as Chase Manhattan Bank Delaware. Pursuant
to an Assignment and Assumption Agreement, PARCO assigned all of its rights
and delegated all of its duties in regard to the Trust Agreement and the
Purchase Agreement dated as of March 1, 1996, between CFC and PARCO, effective
as of June 30, 1996, to Premier L.L.C.
5
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
PREMIER AUTO TRUST 1996-1
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - SALE OF ASSET BACKED NOTES AND CERTIFICATES - continued
On March 27, 1996, the Trust issued $250,000,000 aggregate principal amount of
5.4375% Asset Backed Notes, Class A-1 (the "Class A-1 Notes"), $645,000,000
aggregate principal amount of Floating Rate Asset Backed Notes, Class A-2 (the
"Class A-2 Notes"), $400,000,000 aggregate principal amount of 6.00% Asset
Backed Notes, Class A-3 (the "Class A-3 Notes"), and $148,750,000 aggregate
principal amount of 6.05% Asset Backed Notes, Class A-4 (the "Class A-4 Notes"
and, together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes, the "Notes"). The Notes were issued pursuant to an Indenture dated as
of March 1, 1996, between the Trust and The Bank of New York, as Indenture
Trustee. The Trust also issued $56,243,689.73 aggregate principal amount of
6.35% Asset Backed Certificates (the "Certificates"). The Certificates
represent fractional undivided interests in the Trust.
The assets of the Trust include a pool of motor vehicle retail installment
sale contracts ("Receivables"), secured by security interests in the motor
vehicles financed thereby and including certain monies due or received
thereunder on or after March 8, 1996, transferred to the Trust by CFC on March
27, 1996. The Notes are secured by the assets of the Trust pursuant to the
Indenture.
During April 1996, the Indenture Trustee used certain monies on deposit in the
trust reserve account (the "Reserve Fund") to purchase from CFC approximately
$57,700,000 of Receivables secured by security interests in the motor vehicles
financed thereby. Cash proceeds from the liquidation of these Receivables are
returned to the Reserve Fund. The aggregate principal balance of these
Receivables was approximately $52,600,000 as of June 30, 1996.
NOTE 4 - PRINCIPAL AND INTEREST PAYMENTS
Interest on the Class A-1 Notes, the Class A-3 Notes and the Class A-4 Notes
will accrue at the respective fixed per annum interest rates specified above.
The per annum rate of interest on the Class A-2 Notes for each monthly
interest period will equal one-month LIBOR plus 0.07%, subject to a maximum
rate of 12% per annum. Interest on the Notes will generally be payable on the
sixth day of each month or, if any such day is not a Business Day, on the next
succeeding Business Day (each, a "Distribution Date"), commencing May 6, 1996.
Principal of the Notes will be payable on each Distribution Date to the extent
described in the Prospectus Supplement dated March 21, 1996, and the
Prospectus dated March 21, 1996 (collectively, the "Prospectus"); however, no
principal payments will be made (i) on the Class A-2 Notes until the Class A-1
Notes have been paid in full, (ii) on the Class A-3 Notes until the Class A-2
Notes have been paid in full, or (iii) on the Class A-4 Notes until the Class
A-3 Notes have been paid in full.
Interest on the Certificates will accrue at the fixed per annum interest rate
specified above and will be distributed to the Certificateholders on each
Distribution Date. No distributions of principal on the Certificates will be
made until all the Notes have been paid in full.
6
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
PREMIER AUTO TRUST 1996-1
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - PRINCIPAL AND INTEREST PAYMENTS - continued
Each class of the Notes and the Certificates will be payable in full on the
applicable final scheduled Distribution Date as set forth in the Prospectus.
However, payment in full of a class of Notes or of the Certificates could
occur earlier than such dates as described in the Prospectus. In addition, the
Class A-4 Notes will be subject to redemption in whole, but not in part, and
the Certificates will be subject to prepayment in whole, but not in part, on
any Distribution Date on which CFC exercises its option to purchase the
Receivables. CFC may purchase the Receivables when the aggregate principal
balance of the Receivables shall have declined to 10% or less of the initial
aggregate principal balance of the Receivables purchased by the Trust.
NOTE 5 - FEDERAL INCOME TAXES
In the opinion of outside legal counsel, for federal income tax purposes, the
Class A-2 Notes, Class A-3 Notes, and Class A-4 Notes will be characterized as
debt, and the Trust will not be characterized as an association (or a publicly
traded partnership) taxable as a corporation.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Trust was formed under the laws of Delaware pursuant to an Amended and
Restated Trust Agreement (the "Trust Agreement") dated as of March 1, 1996,
among Premier Auto Receivables Company ("PARCO"), Chrysler Financial
Corporation ("CFC"), and Chemical Bank Delaware, acting thereunder not in its
individual capacity but solely as trustee of the Trust.
Chemical Bank Delaware is now known as Chase Manhattan Bank Delaware. Pursuant
to an Assignment and Assumption Agreement, PARCO assigned all of its rights
and delegated all of its duties in regard to the Trust Agreement and the
Purchase Agreement dated as of March 1, 1996, between CFC and PARCO, effective
as of June 30, 1996, to Premier Receivables L.L.C., a Michigan limited
liability company.
On March 27, 1996, the Trust issued $250,000,000 aggregate principal amount of
5.4375% Asset Backed Notes, Class A-1, $645,000,000 aggregate principal amount
of Floating Rate Asset Backed Notes, Class A-2, $400,000,000 aggregate
principal amount of 6.00% Asset Backed Notes, Class A-3 and $148,750,000
aggregate principal amount of 6.05% Asset Backed Notes, Class A-4
(collectively, the "Notes"). The Notes were issued pursuant to an Indenture
dated as of March 1, 1996, between the Trust and The Bank of New York, as
Indenture Trustee. The Trust also issued $56,243,689.73 aggregate principal
amount of 6.35% Asset Backed Certificates (the "Certificates"). The
Certificates represent fractional undivided interests in the Trust. The assets
of the Trust include a pool of motor vehicle retail installment sale
contracts, secured by security interests in the motor vehicles financed
thereby and including certain monies due or received thereunder on or after
March 8, 1996, transferred to the Trust by CFC on March 27, 1996. The Notes
are secured by the assets of the Trust pursuant to the Indenture.
During April 1996, the Indenture Trustee used certain monies on deposit in the
trust reserve account (the "Reserve Fund") to purchase from CFC approximately
$57,700,000 of Receivables secured by security interests in the motor vehicles
financed thereby. Cash proceeds from the liquidation of these Receivables are
returned to the Reserve Fund. The aggregate principal balance of these
Receivables was approximately $52,600,000 as of June 30, 1996.
The Trust has no employees.
8
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1,2,3,4,5
There is nothing to report with regard to these items.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed as a part of this report:
Exhibit No.
3 Certificate of Trust of Premier Auto Trust 1996-1. Filed as
Exhibit 3 to the Trust's Quarterly Report on Form 10-Q for the
period ended March 31, 1996, and incorporated herein by reference.
4.1 Amended and Restated Trust Agreement, dated as of March 1, 1996,
among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee. Filed as
Exhibit 4.1 to the Trust's Quarterly Report on Form 10-Q for the
period ended March 31, 1996, and incorporated herein by reference.
4.2 Indenture, dated as of March 1, 1996, between Premier Auto Trust
1996-1 and The Bank of New York, as Indenture Trustee (excluding
Schedule A). Filed as Exhibit 4.2 to the Trust's Quarterly Report
on Form 10-Q for the period ended March 31, 1996, and incorporated
herein by reference.
4.3 Sale and Servicing Agreement, dated as of March 1, 1996, between
Premier Auto Trust 1996-1 and Chrysler Financial Corporation
(excluding Schedules A and C). Filed as Exhibit 4.3 to the Trust's
Quarterly Report on Form 10-Q for the period ended March 31, 1996,
and incorporated herein by reference.
4.4 Assignment and Assumption Agreement, dated as of June 30, 1996,
among Premier Auto Receivables Company, Premier Receivables L.L.C.
and each of the Premier Auto Trusts parties thereto.
27 Financial Data Schedule
(b) No reports on Form 8-K were filed by the Trust during the quarter for
which this report is filed.
9
<PAGE>
PREMIER AUTO TRUST 1996-1
SIGNATURES
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.
Premier Auto Trust 1996-1 (Registrant)
By: Chrysler Financial Corporation, as Servicer
-------------------------------------------
Date: August 8, 1996 By: s/T. F. Gilman
-------------------------------------
T. F. Gilman, Vice President and Controller
Principal Accounting Officer
10
<PAGE>
PREMIER AUTO TRUST 1996-1
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
3 Certificate of Trust of Premier Auto Trust 1996-1. Filed as
Exhibit 3 to the Trust's Quarterly Report on Form 10-Q for the
period ended March 31, 1996, and incorporated herein by reference.
4.1 Amended and Restated Trust Agreement, dated as of March 1, 1996,
among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee. Filed as
Exhibit 4.1 to the Trust's Quarterly Report on Form 10-Q for the
period ended March 31, 1996, and incorporated herein by reference.
4.2 Indenture, dated as of March 1, 1996, between Premier Auto Trust
1996-1 and The Bank of New York, as Indenture Trustee (excluding
Schedule A). Filed as Exhibit 4.2 to the Trust's Quarterly Report
on Form 10-Q for the period ended March 31, 1996, and incorporated
herein by reference.
4.3 Sale and Servicing Agreement, dated as of March 1, 1996, between
Premier Auto Trust 1996-1 and Chrysler Financial Corporation
(excluding Schedules A and C). Filed as Exhibit 4.3 to the Trust's
Quarterly Report on Form 10-Q for the period ended March 31, 1996,
and incorporated herein by reference.
4.4 Assignment and Assumption Agreement, dated as of June 30, 1996,
among Premier Auto Receivables Company, Premier Receivables L.L.C.
and each of the Premier Auto Trusts parties thereto.
27 Financial Data Schedule
E-1
Exhibit 4.4
ASSIGNMENT AND ASSUMPTION AGREEMENT
PREMIER AUTO TRUSTS
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of June 30, 1996, (the
"Assumption Agreement") among PREMIER AUTO RECEIVABLES COMPANY, a Delaware
corporation (the "Transferor"), PREMIER RECEIVABLES L.L.C., a Michigan limited
liability company (the "Transferee") and each of the Premier Auto Trusts
listed on Schedule A hereto (each a "Trust").
WHEREAS, Section 5.06 of the Purchase Agreement for each Trust among
the Transferor and CHRYSLER FINANCIAL CORPORATION, a Michigan corporation
("CFC") (each, a "Purchase Agreement") and Section 3.10 of the Amended and
Restated Trust Agreement for each Trust among the Transferor, CFC and CHEMICAL
BANK DELAWARE, a Delaware banking corporation, not in its individual capacity
but solely as Owner Trustee (the "Trustee")(each a "Trust Agreement")
contemplate the sale, transfer and assignment of the Rights and the Trust
Certificate owned by the Transferor in respect of such Trust from the
Transferor to a limited liability company;
WHEREAS, Transferee meets the requirements in Section 5.06(i) of each
Purchase Agreement in that it is a limited liability company, the equity of
which is owned indirectly by CFC; and
WHEREAS, both the Purchase Agreement and the Trust Agreement in
respect of each Trust require Transferee to execute an agreement of assumption
to perform every obligation of Transferor under those two agreements;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
<PAGE>
1. Transfer and Assignment of Rights.
Transferor hereby sells, transfers and assigns the intercompany debt
owed to Chrysler Financial Corporation in connection with the issuance of
Certificates or Notes and the Rights in respect of each Trust to the
Transferee, and Transferee hereby accepts such transfer and assignment of such
intercompany indebtedness owed to Chrysler Financial Corporation and the
Rights.
2. Transfer of Trust Certificates.
Transferor hereby transfers and assigns to the Transferee the Trust
Certificates owned of record by the Transferor in respect of each Trust, which
Trust Certificates represent at least 1% of the Certificate Balance of each
such Trust. The Transferee hereby accepts such transfer and assignment of such
Trust Certificates and hereby assumes and agrees to perform every obligation
of the Transferor under the Purchase Agreement and the Trust Agreement in
respect of each Trust. Without limiting the generality of the foregoing, the
Transferee hereby assumes the liability of the Transferor under Section 2.07
of the Trust Agreement for each Trust.
3. Representations and Warranties.
Pursuant to Section 5.06(iii) of each Purchase Agreement, effective as
of the date of this Assumption Agreement, each representation or warranty set
forth in Section 3.01 of each Purchase Agreement (adjusted to reflect that the
Transferee is a limited liability company) is hereby incorporated herein by
reference thereto and made by Transferee, and each such representation and
warranty is true and correct. In addition, the Transferee hereby represents
and warrants that the equity of the Transferee is indirectly owned by Chrysler
Financial Corporation.
4. Definitions.
2
<PAGE>
(A) Transferee shall, for all purposes under the Purchase Agreements,
the Trust Agreements, the Sale and Servicing Agreements related to the Trusts
(the "Sale and Servicing Agreements") and the other Basic Documents of the
respective Trusts, become the "Company" thereunder without any further act on
the part of any parties to the said agreements.
(B) Capitalized terms used herein and not defined herein are as
defined in the Sale and Servicing Agreement, Purchase Agreement and Trust
Agreement for the related Trust.
5. Notices.
Any notice, report or other communication given to Transferee under
the Purchase Agreements, the Trust Agreements or any other Basic Documents for
the respective Trusts shall be addressed as follows:
Premier Receivables L.L.C.
27777 Franklin Road
Southfield, Michigan 48034
Attention: Secretary
or to such other address as Transferee shall provide to the other parties
under the Purchase Agreements and Trust Agreements in writing.
6. Governing Law.
THIS ASSUMPTION AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
7. Headings.
The section headings hereof have been inserted for convenience of
reference only and shall not be construed to affect the meaning, construction
or effect of this Assumption Agreement.
8. Counterparts.
This Assumption Agreement may be executed in counterparts,
3
<PAGE>
each of which when so executed shall together constitute but one and the same
Assumption Agreement.
9. Severability.
Any provision of this Assumption Agreement that is prohibited or
unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
10. Limitation of Liability of Owner Trustee.
Notwithstanding anything contained herein to the contrary, this
Agreement has been executed by Chemical Bank Delaware not in its individual
capacity but solely in its capacity as Owner Trustee of each Trust and in no
event shall Chemical Bank Delaware in its individual capacity have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Transferor, the Transferee or any Trust hereunder. The
Owner Trustee shall be subject to, and entitled to the benefits of, the terms
and provisions of Articles VI, VII and VIII of each Trust Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first written above.
PREMIER RECEIVABLES L.L.C.
By: \s\ D. H. Olsen
-----------------------------
Name: D. H. Olsen
Title: Assistant Treasurer
of Premier Auto
Receivables Company,
a Member
PREMIER AUTO RECEIVABLES COMPANY
By: \s\ D. H. Olsen
-----------------------------
Name: D. H. Olsen
Title: Assistant Treasurer
Each Trust listed on Schedule A
hereto.
Chemical Bank Delaware, not
in its individual capacity, but
solely as Owner Trustee
By: \s\ John Cashin
------------------------------
Authorized Signatory
5
<PAGE>
Schedule A
Related Purchase
Agreement, Trust
Agreement and Sale
and Servicing Agreement
Name of Trust dated as of
- ------------- -----------------------
Premier Auto Trust 1995-1 February 1, 1995
Premier Auto Trust 1995-2 April 1, 1995
Premier Auto Trust 1995-3 July 1, 1995
Premier Auto Trust 1995-4 November 1, 1995
Premier Auto Trust 1996-1 March 1, 1996
Premier Auto Trust 1996-2 May 1, 1996
Premier Auto Trust 1996-3 June 1, 1996
6
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> MAR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> $ 94
<SECURITIES> 0
<RECEIVABLES> 1,372
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,466
<CURRENT-LIABILITIES> 132
<BONDS> 1,278
<COMMON> 0
0
0
<OTHER-SE> 56
<TOTAL-LIABILITY-AND-EQUITY> 1,466
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
