<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
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 22, 1996
---------------
HOUSEHOLD CONSUMER LOAN TRUST 1996-2
------------------------------------------------------
(Exact name of registrant as specified in its charter)
HOUSEHOLD FINANCE CORPORATION
------------------------------------------------------
(Administrator of the Trust)
(Exact name as specified in Administrator's charter)
To Be
Delaware 333-6047 Applied For
---------------------- ------------------------- --------------
(State or other juris- (Commission File Numbers) (IRS Employer
diction of incorpora- Identification
tion of Administrator) Number of
Registrant)
2700 Sanders Road, Prospect Heights, Illinois 60070
- -------------------------------------------------------------------------------
(Address of principal executive offices of (Zip Code)
Administrator)
847/564-5000
-----------------------------------------------------
Administrator's telephone number, including area code
<PAGE> 2
Item 5. OTHER EVENTS
Attached as Exhibit 99 are certain Computational Materials used in the
distribution of the Household Consumer Loan Asset Backed Notes, Series
1996-2 (the "Notes") which will be issued on August 27, 1996. The
Prospectus relating to such offering will be filed on August 22, 1996.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99 Computational Materials used in the offering of the Notes.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrator has duly caused this report to be signed on behalf of the
undersigned hereunto duly authorized.
HOUSEHOLD FINANCE CORPORATION,
as Administrator of and on behalf of the
HOUSEHOLD CONSUMER LOAN TRUST 1996-2
---------------------------------------------
(Registrant)
By: /s/ S. E. Casey
---------------------------------------------
S. E. Casey
Assistant Secretary
Dated: August 22, 1996
---------------
-3-
<PAGE> 4
EXHIBIT INDEX
Exhibit
Number Exhibit Page
- ------ -------
99 Computational Materials used in the offering
of the Notes.
-4-
<PAGE> 1
REVISED
MERRILL LYNCH & CO.
PRELIMINARY COMPUTATIONAL MATERIALS
$963,510,000 ASSET BACKED NOTES, SERIES 1996-2
HOUSEHOLD CONSUMER LOAN TRUST 1996-2
HOUSEHOLD CONSUMER LOAN CORPORATION (SELLER)
HOUSEHOLD FINANCE CORPORATION (SERVICER)
- --------------------------------------------------------------------------------
Recipients must read the information contained in the prospectus related to the
offering of the Notes. All information contained herein is supplemented by the
information contained in the prospectus. Do not use or rely on this information
if you have not received and reviewed the prospectus. If you have not received
the prospectus, call your Merrill Lynch account executive for another copy.
<PAGE> 2
TABLE OF CONTENTS
I. Securities Offered
II. Class A-1 Note Weighted Average Life and Payment Window Sensitivity -
Exercise of 10% Call
III. Class A-1 Note Weighted Average Life and Payment Window Sensitivity - No
Exercise of 10% Call
IV. Class A-2 Note Weighted Average Life and Payment Window Sensitivity -
Exercise of 10% Call
V. Class A-2 Note Weighted Average Life and Payment Window Sensitivity - No
Exercise of 10% Call
VI. Class A-3 Note Weighted Average Life and Payment Window Sensitivity -
Exercise of 10% Call
VII. Class A-3 Note Weighted Average Life and Payment Window Sensitivity - No
Exercise of 10% Call
VII. Class B Note Weighted Average Life and Payment Window Sensitivity -
Exercise of 10% Call
IX. Class B Note Weighted Average Life and Payment Window Sensitivity - No
Exercise of 10% Call
X. Collateral Summary
- --------------------------------------------------------------------------------
Recipients must read the information contained in the prospectus related to the
offering of the Notes. All information contained herein is supplemented by the
information contained in the prospectus. Do not use or rely on this information
if you have not received and reviewed the prospectus. If you have not received
the prospectus, call your Merrill Lynch account executive for another copy.
<PAGE> 3
I. SECURITIES OFFERED(1)
TO 10% CALL:
<TABLE>
<CAPTION>
ESTIMATED
APPROX. ESTIMATED PRINCIPAL EXPECTED STATED EXPECTED
APPROX. EXPECTED WAL(2) PAYMENT FINAL FINAL RATINGS
SECURITIES SIZE BENCHMARK CAP PRICE (YRS.) WINDOW MATURITY MATURITY (S&P/M/F/D&P)
- ---------- ------- --------- --- -------- --------- --------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cl. A-1 Notes $794,000,000 1 mo LIBOR 13% 100.00% 2.39 1-77 1/2003 8/2006 AAA/Aaa/AAA/AAA
Cl. A-2 Notes $ 52,240,000 1 mo LIBOR 15% 100.00% 5.07 35-77 1/2003 8/2006 AA/Aa3/AA+/AA+
Cl. A-3 Notes $ 67,900,000 1 mo LIBOR 15% 100.00% 5.07 35-77 1/2003 8/2006 A/A2/A+/A+
Cl. B Notes $ 49,370,000 1 mo LIBOR 15% 100.00% 5.07 35-77 1/2003 8/2006 BBB/Baa2/BBB+/A
Certificates(3) $ 36,886,000 -- -- -- -- -- -- -- --
</TABLE>
TO MATURITY:
<TABLE>
<CAPTION>
ESTIMATED
APPROX. ESTIMATED PRINCIPAL EXPECTED STATED EXPECTED
APPROX. EXPECTED WAL(2) PAYMENT FINAL FINAL RATINGS
SECURITIES SIZE BENCHMARK CAP PRICE (YRS.) WINDOW MATURITY MATURITY (S&P/M/F/D&P)
- ---------- ------- --------- --- -------- --------- --------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cl. A-1 Notes $794,000,000 1 mo LIBOR 13% 100.00% 2.40 1-79 3/2003 8/2006 AAA/Aaa/AAA/AAA
Cl. A-2 Notes $ 52,240,000 1 mo LIBOR 15% 100.00% 5.17 35-82 6/2003 8/2006 AA/Aa3/AA+/AA+
Cl. A-3 Notes $ 67,900,000 1 mo LIBOR 15% 100.00% 5.26 35-85 9/2003 8/2006 A/A2/A+/A+
Cl. B Notes $ 49,370,000 1 mo LIBOR 15% 100.00% 5.36 35-88 12/2003 8/2006 BBB/Baa2/BBB+/A
Certificates(3) $ 36,886,000 -- -- -- -- -- -- -- --
</TABLE>
(1) Based on pricing assumptions which are: (i) Prepayments of 43% CPR
(inclusive of annual charge-offs), (ii) annual charge-offs of 6% with a
100% loss severity, (iii) 2.37% Monthly Draw Rate, (iv) $1,044.8 million
of credit lines securing the $1,044.8 million Series 1996-2 Participation,
and (v) no addition of new accounts. All rates are assumed to remain
constant throughout the life of the securities.
(2) Assumes settlement on week of August 28, 1996, (the "Closing Date").
(3) The Certificates will be privately placed.
(4) Distributions of principal and interest on the Notes will be made on the
15th day of each calendar month regardless of the day on which the Payment
Date actually occurs.
- -------------------------------------------------------------------------------
Recipients must read the information contained in the prospectus related to the
offering of the Notes. All information contained herein is supplemented by the
information contained in the prospectus. Do not use or rely on this information
if you have not received and reviewed the prospectus. If you have not received
the prospectus, call your Merrill Lynch account executive for another copy.
<PAGE> 4
II. CLASS A-1 NOTE WEIGHTED AVERAGE LIFE AND PAYMENT WINDOW SENSITIVITY -
EXERCISE OF 10% CALL
The Average Life and Percentage of Original Security Balance sensitivities
indicated in the tables below are based on the following assumptions:
(1) The Credit Lines have a yield of 17%;
(2) The Class A-1, Class A-2, Class A-3, Class B Note and Certificate
rate remain constant at 5.70%, 5.82%, 5.95%, 6.10%, and 6.50%,
respectively throughout the life of such securities;
(3) Annual charge-off rates of 6% and a 100% loss severity, and
(4) Annual prepayment and monthly draw rates remain constant throughout
the life of the securities.
Average Life/Payment Window Sensitivity: Class A-1 Notes
(page 46 of the Prospectus)
<TABLE>
<CAPTION>
MONTHLY TOTAL CPR
DRAW RATE 20% 30% 43% 50%
- --------- --------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
1.00% 3.01 yrs./1-102 2.75 yrs./1-91 1.60 yrs./1-62 1.24 yrs./1-48
2.37% 3.01 yrs./1-102 2.82 yrs./1-86 2.39 yrs./1-77 1.75 yrs./1-65
3.00% 3.01 yrs./1-102 2.82 yrs./1-86 2.71 yrs./1-77 2.09 yrs./1-71
4.00% 3.01 yrs./1-102 2.82 yrs./1-86 2.71 yrs./1-77 2.68 yrs./1-74
</TABLE>
Percentage of Original Security Balance: Class A-1 Notes - Amortization
Schedule (1) (2)
(page 46 of the Prospectus)
<TABLE>
<CAPTION>
CONSTANT PREPAYMENT RATE % CPR
---------------------------------------------------------
PAYMENT DATE 20% 30% 43% 50%
- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
August 1996 100% 100% 100% 100%
December 1996 91% 91% 89% 84%
December 1997 66% 66% 60% 46%
December 1998 47% 47% 38% 27%
December 1999 33% 33% 28% 18%
December 2000 27% 27% 21% 12%
December 2001 21% 20% 15% 4%
December 2002 16% 13% 3% 0%
December 2003 12% 0% 0% 0%
December 2004 4% 0% 0% 0%
December 2005 0% 0% 0% 0%
December 2006 0% 0% 0% 0%
- --------------------------------------------------------------------------
W. AVG. LIFE
(YRS.) (3) 3.01 2.82 2.39 1.75
- --------------------------------------------------------------------------
</TABLE>
(1) Assumes that (i) an optional termination is exercised when the aggregate
Security Balance of the Notes and Certificates has been reduced to 10% or
less of the aggregate Security Balance of the Notes and Certificates as of
the Closing Date and 30 days notice has been given and (ii) a monthly
constant draw rate of 2.37%.
(2) All percentages are rounded to the nearest 1%.
(3) The weighted average life of each of the Notes is determined by (i)
multiplying the amount of each principal payment by the number of years
from August 28, 1996 to the related Payment Date (on a 30/360 basis), (ii)
adding the results, and (iii) dividing by the sum of all principal payments
received since issuance.
(4) Distributions of principal and interest on the Notes will be made on the
15th day of each calendar month regardless of the day on which the Payment
Date actually occurs.
- -------------------------------------------------------------------------------
Recipients must read the information contained in the prospectus related to the
offering of the Notes. All information contained herein is supplemented by the
information contained in the prospectus. Do not use or rely on this information
if you have not received and reviewed the prospectus. If you have not received
the prospectus, call your Merrill Lynch account executive for another copy.
<PAGE> 5
III. CLASS A-1 NOTE WEIGHTED AVERAGE LIFE AND PAYMENT WINDOW SENSITIVITY - NO
EXERCISE OF 10% CALL
The Average Life and Percentage of Original Security Balance sensitivities
indicated in the tables below are based on the following assumptions:
(1) The Credit Lines have a yield of 17%;
(2) The Class A-1, Class A-2, Class A-3, Class B Note and Certificate
rate remain constant at 5.70%, 5.82%, 5.95%, 6.10%, and 6.50%,
respectively throughout the life of such securities;
(3) Annual charge-off rates of 6% and a 100% loss severity; and
(4) Annual prepayment and monthly draw rates remain constant throughout
the life of the securities.
Average Life/Payment Window Sensitivity: Class A-1 Notes
<TABLE>
<CAPTION>
MONTHLY TOTAL CF
DRAW RATE 20% 30% 43% 50%
- ---------- --------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
1.00% 3.02 yrs./1-107 2.76 yrs./1-97 1.61 yrs./1-67 1.25 yrs./1-54
2.37% 3.02 yrs./1-107 2.82 yrs./1-88 2.40 yrs./1-79 1.76 yrs./1-69
3.00% 3.02 yrs./1-107 2.82 yrs./1-88 2.71 yrs./1-78 2.10 yrs./1-74
4.00% 3.02 yrs./1-107 2.82 yrs./1-88 2.71 yrs./1-78 2.68 yrs./1-75
</TABLE>
Percentage of Original Security Balance: Class A-1 Notes - Amortization
Schedule (1)(2)
<TABLE>
<CAPTION>
CONSTANT PREPAYMENT RATE % CPR
------------------------------------------------------
PAYMENT DATE 20% 30% 43% 50%
--------------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
August 1996 100% 100% 100% 100%
December 1996 91% 91% 89% 84%
December 1997 66% 66% 60% 46%
December 1998 47% 47% 38% 27%
December 1999 33% 33% 28% 18%
December 2000 27% 27% 21% 12%
December 2001 21% 20% 15% 4%
December 2002 16% 13% 3% 0%
December 2003 12% 0% 0% 0%
December 2004 4% 0% 0% 0%
December 2005 0% 0% 0% 0%
December 2006 0% 0% 0% 0%
- ----------------------------------------------------------------------------
W. AVG. LIFE (YRS.)(3) 3.02 2.82 2.40 1.76
</TABLE>
(1) Assumes that a monthly constant draw rate of 2.37%.
(2) All percentages are rounded to the nearest 1%.
(3) The weighted average life of each of the Notes is determined by (i)
multiplying the amount of each principal payment by the number of years
from August 28, 1996 to the related Payment Date (on a 30/360 basis),
(ii) adding the results, and (iii) dividing by the sum of all principal
payments received since issuance.
(4) Distributions of principal and interest on the Notes will be made on the
15th day of each calendar month regardless of the day on which the
Payment Date actually occurs.
- -------------------------------------------------------------------------------
Recipients must read the information contained in the prospectus related to the
offering of the Notes. All information contained herein is supplemented by the
information contained in the prospectus. Do not use or rely on this information
if you have not received and reviewed the prospectus. If you have not received
the prospectus, call your Merrill Lynch account executive for another copy.
<PAGE> 6
IV. CLASS A-2 NOTE WEIGHTED AVERAGE LIFE AND PAYMENT WINDOW SENSITIVITY -
EXERCISE OF 10% CALL
The Average Life and Percentage of Original Security Balance sensitivities
indicated in the tables below are based on the following assumptions:
(1) The Credit Lines have a yield of 17%;
(2) The Class A-1, Class A-2, Class A-3, Class B Note and Certificate
rate remain constant at 5.70%, 5.82%, 5.95%, 6.10%, and 6.50%,
respectively throughout the life of such securities;
(3) Annual charge-off rates of 6% and a 100% loss severity; and
(4) Annual prepayment and monthly draw rates remain constant
throughout the life of the securities.
Average Life/Payment Window Sensitivity: Class A-2 Notes
(page 47 of the Prospectus)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
MONTHLY TOTAL CPR
DRAW RATE 20% 30% 43% 50%
- --------- ---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
1.00% 6.47 yrs./43-102 5.85 yrs./40-91 3.60 yrs./22-62 2.78 yrs./17-48
2.37% 6.47 yrs./43-102 5.83 yrs./43-86 5.07 yrs./35-77 3.87 yrs./24-65
3.00% 6.47 yrs./43-102 5.83 yrs./43-86 5.46 yrs./43-77 4.51 yrs./30-71
4.00% 6.47 yrs./43-102 5.83 yrs./43-86 5.46 yrs./43-77 5.34 yrs./43-74
- ---------------------------------------------------------------------------------------------------
</TABLE>
Percentage of Original Security Balance: Class A-2 Notes-Amortization
Schedule (1)(2)
(page 47 of the Prospectus)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
CONSTANT PREPAYMENT RATE % CPR
------------------------------------------------------------------
PAYMENT DATE 20% 30% 43% 50%
- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
August 1996 100% 100% 100% 100%
December 1996 100% 100% 100% 100%
December 1997 100% 100% 100% 100%
December 1998 100% 100% 100% 86%
December 1999 100% 100% 88% 58%
December 2000 84% 84% 68% 39%
December 2001 67% 64% 47% 36%
December 2002 52% 40% 36% 0%
December 2003 38% 0% 0% 0%
December 2004 36% 0% 0% 0%
December 2005 0% 0% 0% 0%
December 2006 0% 0% 0% 0%
- -------------------------------------------------------------------------------------------
W. AVG. LIFE (YRS.)(3) 6.47 5.83 5.07 3.87
- -------------------------------------------------------------------------------------------
</TABLE>
(1) Assumes that (i) an optional termination is exercised when the aggregate
Security Balance of the Notes and Certificates has been reduced to 10% or
less of the aggregate Security Balance of the Notes and Certificates as of
the Closing Date and 30 days notice has been given and (ii) a monthly
constant draw rate of 2.37%.
(2) All percentages are rounded to the nearest 1%.
(3) The weighted average life of each of the Notes is determined by (i)
multiplying the amount of each principal payment by the number of years
from August 28, 1996 to the related Payment Date (on a 30/360 basis), (ii)
adding the results, and (iii) dividing by the sum of all principal payments
received since issuance.
(4) Distributions of principal and interest on the Notes will be made on the
15th day of each calendar month regardless of the day on which the Payment
Date actually occurs.
- --------------------------------------------------------------------------------
Recipients must read the information contained in the prospectus related to
the offering of the Notes. All information contained herein is supplemented by
the information contained in the prospectus. Do not use or rely on this
information if you have not received and reviewed the prospectus. If you have
not received the prospectus, call your Merrill Lynch account executive for
another copy.
<PAGE> 7
V. CLASS A-2 NOTE WEIGHTED AVERAGE LIFE AND PAYMENT WINDOW SENSITIVITY - NO
EXERCISE OF 10% CALL
The Average Life and Percentage of Original Security Balance sensitivities
indicated in the tables below are based on the following assumptions:
(1) The Credit Lines have a yield of 17%;
(2) The Class A-1, Class A-2, Class A-3, Class B Note and Certificate rate
remain constant at 5.70%, 5.82%, 5.95%, 6.10%, and 6.50%, respectively
throughout the life of such securities;
(3) Annual charge-off rates of 6% and a 100% loss severity; and
(4) Annual prepayment and monthly draw rates remain constant throughout the
life of the securities.
Average Life/Payment Window Sensitivity: Class A-2 Notes
<TABLE>
<CAPTION>
MONTHLY TOTAL CPR
DRAW RATE 20% 30% 43% 50%
- ----------- ---------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
1.00% 6.67 yrs./43-111 6.09 yrs./40-101 3.84 yrs./22-72 3.03 yrs./17-59
2.37% 6.67 yrs./43-111 5.93 yrs./43-90 5.17 yrs./35-82 4.04 yrs./24-72
3.00% 6.67 yrs./43-111 5.93 yrs./43-90 5.52 yrs./43-80 4.62 yrs./30-76
4.00% 6.67 yrs./43-111 5.93 yrs./43-90 5.50 yrs./43-79 5.38 yrs./43-76
</TABLE>
Percentage of Original Security Balance: Class A-2 Notes -
Amortization Schedule(1)(2)
<TABLE>
<CAPTION>
CONSTANT PREPAYMENT RATE % CPR
---------------------------------------------------------------------------------
PAYMENT DATE 20% 30% 43% 50%
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
August 1996 100% 100% 100% 100%
December 1996 100% 100% 100% 100%
December 1997 100% 100% 100% 100%
December 1998 100% 100% 100% 86%
December 1999 100% 100% 88% 58%
December 2000 84% 84% 68% 39%
December 2001 67% 64% 47% 36%
December 2002 52% 40% 36% 0%
December 2003 38% 33% 0% 0%
December 2004 36% 0% 0% 0%
December 2005 0% 0% 0% 0%
December 2006 0% 0% 0% 0%
- -------------------------------------------------------------------------------------------------------
W. Avg. Life (yrs.)(3) 6.67 5.93 5.17 4.04
</TABLE>
(1) Assumes that a monthly constant draw rate of 2.37%.
(2) All percentages are rounded to the nearest 1%.
(3) The weighted average life of each of the Notes is determined by (i)
multiplying the amount of each principal payment by the number of years
from August 28, 1996 to the related Payment Date (on a 30/360 basis), (ii)
adding the results, and (iii) dividing by the sum of all principal payments
received since issuance.
(4) Distributions of principal and interest on the Notes will be made on the
15th day of each calendar month regardless of the day on which the Payment
Date actually occurs.
- ------------------------------------------------------------------------------
Recipients must read the information contained in the prospectus related to the
offering of the Notes. All information contained herein is supplemented by the
information contained in the prospectus. Do not use or rely on this information
if you have not received and reviewed the prospectus. If you have not received
the prospectus, call your Merrill Lynch account executive for another copy.
<PAGE> 8
VI. CLASS A-3 NOTE WEIGHTED AVERAGE LIFE AND PAYMENT WINDOW SENSITIVITY -
EXERCISE OF 10% CALL
The Average Life and Percentage of Original Security Balance sensitivities
indicated in the tables below are based on the following assumptions:
(1) The Credit Lines have a yield of 17%;
(2) The Class A-1, Class A-2, Class A-3, Class B Note and Certificate
rate remain constant at 5.70%, 5.82%, 5.95%, 6.10%, and 6.50%,
respectively throughout the life of such securities;
(3) Annual charge-off rates of 6% and a 100% loss severity; and
(4) Annual prepayment and monthly draw rates remain constant
throughout the life of the securities.
Average Life/Payment Window Sensitivity: Class A Notes
(page 48 of the Prospectus)
<TABLE>
<CAPTION>
MONTHLY TOTAL CPR
DRAW RATE 20% 30% 43% 50%
- --------- ---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
1.00% 6.47 yrs./43-102 5.85 yrs./40-91 3.60 yrs./22-62 2.78 yrs./17-48
2.37% 6.47 yrs./43-102 5.83 yrs./43-86 5.07 yrs./35-77 3.87 yrs./24-65
3.00% 6.47 yrs./43-102 5.83 yrs./43-86 5.46 yrs./43-77 4.51 yrs./30-71
4.00% 6.47 yrs./43-102 5.83 yrs./43-86 5.46 yrs./43-77 5.34 yrs./43-74
</TABLE>
Percentage of Original Security Balance: Class A-3 Notes -
Amortization Schedule(1)(2)
(page 48 of the Prospectus)
<TABLE>
<CAPTION>
CONSTANT PREPAYMENT RATE % CPR
------------------------------------------------
PAYMENT DATE 20% 30% 43% 50%
- --------------------- ----- ----- ----- -----
<S> <C> <C> <C> <C>
August 1996 100% 100% 100% 100%
December 1996 100% 100% 100% 100%
December 1997 100% 100% 100% 100%
December 1998 100% 100% 100% 86%
December 1999 100% 100% 88% 58%
December 2000 84% 84% 68% 39%
December 2001 67% 64% 47% 36%
December 2002 52% 40% 36% 0%
December 2003 38% 0% 0% 0%
December 2004 36% 0% 0% 0%
December 2005 0% 0% 0% 0%
December 2006 0% 0% 0% 0%
- ----------------------------------------------------------------------------
W. AVG. LIFE (YRS.)(3) 6.47 5.83 5.07 3.87
</TABLE>
(1) Assumes that (i) an optional termination is exercised when the aggregate
Security Balance of the Notes and Certificates has been reduced to 10% or
less of the aggregate Security Balance of the Notes and Certificates as of
the Closing Date and 30 days notice has been given and (ii) a monthly
constant draw rate of 2.37%.
(2) All percentages are rounded to the nearest 1%.
(3) The weighted average life of each of the Notes is determined by (i)
multiplying the amount of each principal payment by the number of years
from August 28, 1996 to the related Payment Date (on a 30/360 basis), (ii)
adding the results, and (iii) dividing by the sum of all principal payments
received since issuance.
(4) Distributions of principal and interest on the Notes will be made on the
15th day of each calendar month regardless of the day on which the Payment
Date actually occurs.
- -------------------------------------------------------------------------------
Recipients must read the information contained in the prospectus related to the
offering of the Notes. All information contained herein is supplemented by the
information contained in the prospectus. Do not use or rely on this information
if you have not received and reviewed the prospectus. If you have not received
the prospectus, call your Merrill Lynch account executive for another copy.
<PAGE> 9
VII. CLASS A-3 NOTE WEIGHTED AVERAGE LIFE AND PAYMENT WINDOW SENSITIVITY - NO
EXERCISE OF 10% CALL
The Average Life and Percentage of Original Security Balance sensitivity
indicated in the tables below are based on the following assumptions:
(1) The Credit Lines have a yield of 17%;
(2) The Class A-1, Class A-2, Class A-3, Class B Note and Certificate
rate remain constant at 5.70%, 5.82%, 6.10%, and 6.50%,
respectively throughout the life of such securities;
(3) Annual charge-off rates of 6% and a 100% loss severity; and
(4) Annual prepayment and monthly draw rate remain constant throughout
the life of the securities.
Average Life/Payment Windows Sensitivity: Class A-3 Notes
<TABLE>
<CAPTION>
MONTHLY TOTAL CPR
DRAW RATE 20% 30% 43% 50%
- --------- ------------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
1.00% 6.81 yrs./43-116 6.25 yrs./40-108 4.03 yrs./22-81 3.24 yrs./17-67
2.37% 6.81 yrs./43-116 6.00 yrs./43-93 5.26 yrs./35-85 4.16 yrs./24-77
3.00% 6.81 yrs./43-116 6.00 yrs./43-93 5.58 yrs./43-82 4.70 yrs./30-79
4.00% 6.81 yrs./43-116 6.00 yrs./43-93 5.55 yrs./43-81 5.42 yrs./43-78
</TABLE>
Percentage of Original Security Balance: Class A-3 Notes - Amortization
Schedule (1)(2)
<TABLE>
<CAPTION>
CONSTANT PREPAYMENT RATE % CPR
------------------------------------------------------------------------
PAYMENT DATE 20% 30% 43% 50%
- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
August 1996 100% 100% 100% 100%
December 1996 100% 100% 100% 100%
December 1997 100% 100% 100% 100%
December 1998 100% 100% 100% 100%
December 1999 100% 100% 88% 58%
December 2000 84% 84% 68% 39%
December 2001 67% 64% 47% 36%
December 2002 52% 40% 36% 5%
December 2003 38% 36% 0% 0%
December 2004 36% 0% 0% 0%
December 2005 22% 0% 0% 0%
December 2006 0% 0% 0% 0%
- ---------------------------------------------------------------------------------------------------
W. AVG. LIFE (YRS.)(3) 6.81 6.00 5.26 4.16
- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) Assumes that a monthly constant draw rate of 2.37%.
(2) All percentages are rounded to the nearest 1%.
(3) The weighted average life of each of the Notes is determined by (1)
multiplying the amount of each principal payment by the number of years from
August 28, 1996 to the related payment Date (on a 30/360 basis), (ii) adding
the results, and (iii) dividing by the sum of all principal payments
received since issuance.
(4) Distributions of principal and interest on the Notes will be made on the
15th day of each calendar month regardless of the day on which the Payment
Date actually occurs.
- --------------------------------------------------------------------------------
Recipients must read the information contained in the prospectus related to the
Offering of the Notes. All information contained herein is supplemented by the
information contained in the prospectus. Do not use or rely on this information
if you have not received and reviewed the prospectus. If you have not received
the prospectus, call your Merrill Lynch account executive for another copy.
<PAGE> 10
VIII. CLASS B NOTE WEIGHTED AVERAGE LIFE AND PAYMENT WINDOW SENSITIVITY -
EXERCISE OF 10% CALL
The Average Life and Percentage of Original Security Balance sensitivities
indicated in the tables below are based on the following assumptions:
(1) The Credit Lines have a yield of 17%;
(2) The Class A-1, Class A-2, Class A-3, Class B Note and Certificate
rate remain constant at 5.70%, 5.82%, 5.95%, 6.10%, and 6.50%,
respectively throughout the life of such securities;
(3) Annual charge-off rates of 6% and a 100% loss severity; and
(4) Annual prepayment and monthly draw rates remain constant throughout
the life of the securities.
Average Life/Payment Window Sensitivity: Class B Notes
(page 49 of the Prospectus)
<TABLE>
<CAPTION>
MONTHLY TOTAL CPR
DRAW RATE 20% 30% 43% 50%
- --------- ---------------- ---------------- ---------------- -----------------
<S> <C> <C> <C> <C>
1.00% 6.47 yrs./43-102 5.85 yrs./40-91 3.60 yrs./22-62 2.78 yrs./17-48
2.37% 6.47 yrs./43-102 5.83 yrs./43-86 5.07 yrs./35-77 3.87 yrs./24-65
3.00% 6.47 yrs./43-102 5.83 yrs./43-86 5.46 yrs./43-77 4.51 yrs./30-71
4.00% 6.47 yrs./43-102 5.83 yrs./43-86 5.46 yrs./43-77 5.34 yrs./43-74
</TABLE>
Percentage of Original Security Balance: Class B Notes - Amortization
Schedule (1)(2)
(page 49 of the Prospectus)
<TABLE>
<CAPTION>
CONSTANT PREPAYMENT RATE % CPR
------------------------------------------------------------------------
PAYMENT DATE 20% 30% 43% 50%
- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
August 1996 100% 100% 100% 100%
December 1996 100% 100% 100% 100%
December 1997 100% 100% 100% 100%
December 1998 100% 100% 100% 86%
December 1999 100% 100% 88% 58%
December 2000 84% 84% 68% 39%
December 2001 67% 64% 47% 36%
December 2002 52% 40% 36% 0%
December 2003 38% 0% 0% 0%
December 2004 36% 0% 0% 0%
December 2005 0% 0% 0% 0%
December 2006 0% 0% 0% 0%
- ---------------------------------------------------------------------------------------------------
W. Avg. Life (in years)(3) 6.47 5.83 5.07 3.87
- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) Assumes that (i) an optional termination is exercised when the aggregate
Security Balance of the Notes and Certificates has been reduced
to 10% or less of the aggregate Security Balance of the Notes and
Certificates as of the Closing Date and 30 days notice has been given
and (ii) a monthly constant draw rate of 2.37%.
(2) All percentages are rounded to the nearest 1%.
(3) The weighted average life of each of the Notes is determined by (i)
multiplying the amount of each principal payment by the number of years from
August 28, 1996 to the related Payment Date (on a 30/360 basis), (ii) adding
the results, and (iii) dividing by the sum of all principal payments
received since issuance.
(4) Distributions of principal and interest on the Notes will be made on the
15th day of each calendar month regardless of the day on which the Payment
Date actually occurs.
- --------------------------------------------------------------------------------
Recipients must read the information contained in the prospectus related to the
offering of the Notes. All information contained herein is supplemented by the
information contained in the prospectus. Do not use or rely on this information
if you have not received and reviewed the prospectus. If you have not received
the prospectus, call your Merrill Lynch account executive for another copy.
<PAGE> 11
IX. CLASS B NOTE WEIGHTED AVERAGE LIFE AND PAYMENT WINDOW SENSITIVITY - NO
EXERCISE OF 10% CALL
The Average Life and Percentage of Original Security Balance sensitivities
indicated in the tables below are based on the following assumptions:
(1) The Credit Lines have a yield of 17%;
(2) The Class A-1, Class A-2, Class A-3, Class B Note and Certificate
rate remain constant at 5.70%, 5.82%, 5.95%, 6.10%, and 6.50%,
respectively throughout the life of such securities;
(3) Annual charge-off rates of 6% and a 100% loss severity; and
(4) Annual prepayment and monthly draw rates remain constant throughout
the life of the securities.
Average Life/Payment Window Sensitivity: Class B Notes
<TABLE>
<CAPTION>
MONTHLY TOTAL CPR
DRAW RATE 20% 30% 43% 50%
- --------- ---------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
1.00% 6.94 yrs./43-119 6.44 yrs./40-114 4.27 yrs./22-89 3.49 yrs./17-76
2.37% 6.94 yrs./43-119 6.08 yrs./43-95 5.36 yrs./35-88 4.30 yrs./24-81
3.00% 6.94 yrs./43-119 6.08 yrs./43-95 5.63 yrs./43-83 4.79 yrs./30-82
4.00% 6.94 yrs./43-119 6.08 yrs./43-95 5.59 yrs./43-82 5.46 yrs./43-79
</TABLE>
Percentage of Original Security Balance: Class B Notes - Amortization
Schedule (1)(2)
<TABLE>
<CAPTION>
CONSTANT PREPAYMENT RATE % CPR
---------------------------------------------------------------------------
PAYMENT DATE 20% 30% 43% 50%
- ------------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
August 1996 100% 100% 100% 100%
December 1996 100% 100% 100% 100%
December 1997 100% 100% 100% 100%
December 1998 100% 100% 100% 86%
December 1999 100% 100% 88% 58%
December 2000 84% 84% 68% 39%
December 2001 67% 64% 47% 36%
December 2002 52% 40% 36% 36%
December 2003 38% 36% 0% 0%
December 2004 36% 0% 0% 0%
December 2005 36% 0% 0% 0%
December 2006 0% 0% 0% 0%
- ------------- ---- ---- ---- ----
W. AVG. LIFE
(in years)(3) 6.94 6.08 5.36 4.30
</TABLE>
(1) Assumes that a monthly constant draw rate of 2.37%.
(2) All percentages are rounded to nearest 1%.
(3) The weighted average life of each of the Notes is determined by (i)
multiplying the amount of each principal payment by the number of years
from August 28, 1996 to the related Payment Date (on a 30/360 basis),
(ii) adding the results, and (iii) dividing by the sum of all principal
payments received since issuance.
(4) Distributions of principal and interest on the Notes will be made on the
15th day of each calendar month regardless of the day on which the
Payment Date actually occurs.
- -------------------------------------------------------------------------------
Recipients must read the information contained in the prospectus related to the
offering of the Notes. All information contained herein is supplemented by the
information contained in the prospectus. Do not use or rely on this information
if you have not received and reviewed the prospectus. If you have not received
the prospectus, call your Merrill Lynch account executive for another copy.
<PAGE> 12
<TABLE>
<S> <C> <C>
X. COLLATERAL SUMMARY
Collateral statistics for the Credit Lines are
listed below as of the Cut-Off Date.
Total Number of Credit Lines 572,384
Total Outstanding Credit Line Balance $2,911,818,229.60
Average Loan Credit Line Balance $5,087.18
Weighted Average Loan Utilization Rate 86.85%
Loan Type:
Personal Unsecured Credit Lines $2,225,548,871.71
Personal Homeowner Credit Lines $686,269,387.89
Rate Basis (Fixed Rate/Variable Rate) 30.33%/69.67%
Weighted Average Coupon (All Credit Lines) 19.64%
Weighted Average Coupon (Fixed Rate Credit Lines) 19.41%
Weighted Average Margin (Variable Rate Credit Lines) 11.65%
Geographic Distribution (States with greater than 5%
principal balance concentration):
California 21.54%
Michigan 7.64%
New York 7.62%
Pennsylvania 6.50%
Florida 6.33%
Ohio 5.27%
Days Delinquent:
0 to 29 89.47%
30 to 59 4.27%
60 to 89 1.70%
90 to 119 1.05%
120 to 149 0.72%
150 to 179 0.63%
180+ 2.16%
</TABLE>
________________________________________________________________________________
Recipients must read the information contained in the prospectus related to the
offering of the Notes. All information contained herein is supplemented by the
information contained in the prospectus. Do not use or rely on this information
if you have not received and reviewed the prospectus. If you have not received
the prospectus, call your Merrill Lynch account executive for another copy.
<PAGE> 13
REVISED
MERRILL LYNCH & CO.
PRELIMINARY COMPUTATIONAL MATERIALS
$36,517,140 ASSET BACKED CERTIFICATES, SERIES 1996-2
HOUSEHOLD CONSUMER LOAN TRUST 1996-2
HOUSEHOLD CONSUMER LOAN CORPORATION (SELLER)
HOUSEHOLD FINANCE CORPORATION (SERVICER)
_______________________________________________________________________________
Recipients must read the information contained in the Private Placement
Memorandum related to the offering of the Certificates. All information
contained herein is supplemented by the information contained in the Private
Placement Memorandum. Do not use or rely on this information if you have not
received and reviewed the Private Placement Memorandum. If you have not
received the Private Placement Memorandum, call your Merrill Lynch account
executive for another copy.
<PAGE> 14
TABLE OF CONTENTS
<TABLE>
<S> <C>
I. Certificates Weighted Average Life and Payment Window Sensitivity -
Exercise of 10% Call
II. Certificates Weighted Average Life and Payment Window Sensitivity -
No Exercise of 10% Call
</TABLE>
- --------------------------------------------------------------------------------
Recipients must read the information contained in the Private Placement
Memorandum related to the offering of the Certificates. All information
contained herein is supplemented by the information contained in the Private
Placement Memorandum. Do not use or rely on this information if you have not
received and reviewed the Private Placement Memorandum. If you have not
received the Private Placement Memorandum, call your Merrill Lynch account
executive for anohter copy.
<PAGE> 15
I. CERTIFICATES WEIGHTED AVERAGE LIFE AND PAYMENT WINDOW SENSITIVITY -
EXERCISE OF 10% CALL
The Average Life and Percentage of Original Security Balance sensitivities
indicated in the tables below are based on the following assumptions:
(1) The Credit Lines have a yield of 17%;
(2) The Class A-1, Class A-2, Class A-3, Class B Note and Certificate rate
remain constant at 5.70%, 5.82%, 5.95%, 6.10%, and 6.50%, respectively
throughout the life of such securities;
(3) Annual charge-off rates of 6% and a 100% loss severity; and
(4) Annual prepayment and monthly draw rates remain constant throughout the
life of the securities.
Average Life/Payment Window Sensitivity: Certificates
<TABLE>
<CAPTION>
MONTHLY TOTAL CPR
DRAW RATE 20% 30% 43% 50%
- ----------- ---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
1.00% 5.20 yrs./39-102 4.74 yrs./36-91 2.82 yrs./20-62 2.17 yrs./15-48
2.37% 5.20 yrs./39-102 4.82 yrs./39-86 4.11 yrs./32-77 3.05 yrs./22-65
3.00% 5.20 yrs./39-102 4.82 yrs./39-86 4.60 yrs./39-70 3.61 yrs./27-71
4.00% 5.20 yrs./39-102 4.82 yrs./39-86 4.60 yrs./39-77 4.53 yrs./39-74
</TABLE>
Percentage of Original Security Balance: Certificates -
Amortization Schedule(1)(2)
<TABLE>
<CAPTION>
CONSTANT PREPAYMENT RATE % CPR(1)
---------------------------------------------------------------------------------
PAYMENT DATE 20% 30% 43% 50%
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
August 1996 100% 100% 100% 100%
December 1996 100% 100% 100% 100%
December 1997 100% 100% 100% 100%
December 1998 100% 100% 100% 51%
December 1999 81% 81% 52% 34%
December 2000 50% 50% 40% 23%
December 2001 40% 38% 28% 21%
December 2002 31% 24% 21% 0%
December 2003 22% 0% 0% 0%
December 2004 21% 0% 0% 0%
December 2005 0% 0% 0% 0%
December 2006 0% 0% 0% 0%
- -------------------------------------------------------------------------------------------------------
W. AVG. LIFE (YRS.)(3) 5.20 4.82 4.11 3.05
</TABLE>
(1) Assumes that (i) an optional termination is exercised when the aggregate
Security Balance of the Notes and Certificates has been reduced to 10% or
less of the aggregate Security Balance of the Notes and Certificates as of
the Closing Date and 30 days notice has been given and (ii) a monthly
constant draw rate of 2.37%.
(2) All percentages are rounded to the nearest 1%.
(3) The weighted average life of each of the Certificates is determined by (i)
multiplying the amount of each principal payment by the number of years
from August 28, 1996 to the related Payment Date (on a 30/360 basis), (ii)
adding the results, and (iii) dividing by the sum of all principal payments
received since issuance.
(4) Distributions of principal and interest on the Certificates will be made on
the 15th day of each calendar month regardless of the day on which the
Payment Date actually occurs.
- ------------------------------------------------------------------------------
Recipients must read the information contained in the Private Placement
Memorandum related to the offering of the Certificates. All information
contained herein is supplemented by the information contained in the Private
Placement Memorandum. Do not use or rely on this information if you have not
received and reviewed the Private Placement Memorandum. If you have not
received the Private Placement Memorandum, call your Merrill Lynch account
executive for another copy.
<PAGE> 16
II. CERTIFICATES WEIGHTED AVERAGE LIFE AND PAYMENT WINDOW SENSITIVITY - NO
EXERCISE OF 10% CALL
The Average Life and Percentage of Original Security Balance sensitivities
indicated in the tables below are based on the following assumptions:
(1) The Credit Lines have a yield of 17%;
(2) The Class A-1, Class A-2, Class A-3, Class B Note and Certificate
rate remain constant at 5.70%, 5.82%, 5.95%, 6.10%, and 6.50%,
respectively throughout the life of such securities;
(3) Annual charge-off rates of 6% and a 100% loss severity; and
(4) Annual prepayment and monthly draw rates remain constant
throughout the life of the securities.
Average Life/Payment Window Sensitivity: Certificates
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
MONTHLY TOTAL CPR
DRAW RATE 20% 30% 43% 50%
- --------- ---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
1.00% 5.52 yrs./39-124 5.17 yrs./36-122 3.34 yrs./20-105 2.73 yrs./15-99
2.37% 5.52 yrs./39-124 4.99 yrs./39-98 4.32 yrs./32-92 3.36 yrs./22-88
3.00% 5.52 yrs./39-124 4.99 yrs./39-98 4.72 yrs./39-85 3.81 yrs./27-85
4.00% 5.52 yrs./39-124 4.99 yrs./39-98 4.69 yrs./39-84 4.62 yrs./39-80
- ---------------------------------------------------------------------------------------------------
</TABLE>
Percentage of Original Security Balance: Certificates - Amortization
Schedule (1)(2)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
CONSTANT PREPAYMENT RATE % CPR (1)
------------------------------------------------------------------
PAYMENT DATE 20% 30% 43% 50%
- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
August 1996 100% 100% 100% 100%
December 1996 100% 100% 100% 100%
December 1997 100% 100% 100% 100%
December 1998 100% 100% 100% 51%
December 1999 81% 81% 52% 34%
December 2000 50% 50% 40% 23%
December 2001 40% 38% 28% 21%
December 2002 31% 24% 21% 21%
December 2003 22% 21% 14% 0%
December 2004 21% 0% 0% 0%
December 2005 21% 0% 0% 0%
December 2006 0% 0% 0% 0%
- -----------------------------------------------------------------------------------------------
W. Avg. Life (in years) (3) 5.52 4.99 4.32 3.36
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Assumes that a monthly constant draw rate of 2.37%.
(2) All percentages are rounded to the nearest 1%.
(3) The weighted average life of each of the Certificates is determined by (i)
multiplying the amount of each principal payment by the number of years
from August 28, 1996 to the related Payment Date (on a 30/360 basis), (ii)
adding the results, and (iii) dividing by the sum of all principal payments
received since issuance.
(4) Distributions of principal and interest on the Certificates will be made
on the 15th day of each calendar month regardless of the day on which the
Payment Date actually occurs.
- --------------------------------------------------------------------------------
Recipients must read the information contained in the Private Placement
Memorandum related to the offering of the Certificates. All information
contained herein is supplemented by the information contained in the Private
Placement Memorandum. Do not use or rely on this information if you have not
received and reviewed the Private Placement Memorandum. If you have not received
the Private Placement Memorandum, call your Merrill Lynch account executive for
another copy.
