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UNITED STATES
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 (Date of earliest event reported): October 20, 1997
EAGLEMARK, INC.
(Exact name of registrant as specified in its charter)
Nevada 333-21793 88-0292891
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
4150 Technology Way
Carson City, Nevada 89706
(Address of principal executive offices) (Zip Code)
(702) 885-1200
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
The registrant is filing a term sheet relating to the Harley-Davidson
Eaglemark Motorcycle Trust 1997-3 Harley-Davidson Motorcycle Contract Backed
Securities under Item 7(c).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements: None
(b) Pro Forma Financial Information: None
(c) Exhibits:
EXHIBIT NO. DOCUMENT
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20 Term Sheet
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SIGNATURE
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 hereunto duly authorized.
EAGLEMARK, INC.
By: /s/ Donna F. Zarcone
---------------------------------------------
Donna F. Zarcone
Vice President and Chief Financial Officer
October 20, 1997
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EXHIBIT INDEX
EXHIBIT NO. DOCUMENT PAGE
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20 Term Sheet 1
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The information contained in the attached materials is referred to as the
"INFORMATION".
The attached Term Sheet has been prepared by Eaglemark, Inc. ("EAGLEMARK")
and relates to Harley-Davidson Eaglemark Motorcycle Trust 1997-3. Neither
Salomon Brothers Inc ("SALOMON") nor any of its affiliates makes any
representation as to the accuracy or completeness of the Information herein.
The information contained herein is preliminary and will be superseded by the
applicable prospectus supplement and by any other information subsequently filed
with the Securities and Exchange Commission.
The Information contained herein will be superseded by the description of
the collateral pool contained in the prospectus supplement relating to the
securities.
The information addresses only certain aspects of the applicable security's
characteristics and thus does not provide a complete assessment. As such, the
Information may not reflect the impact of all structural characteristics of the
security. The assumptions underlying the Information, including structure and
collateral, may be modified from time to time to reflect changed circumstances.
Although a registration statement (including the prospectus) relating to
the securities discussed in this communication has been filed with the
Securities and Exchange Commission and is effective, the final prospectus
supplement relating to the securities discussed in this communication has not
been filed with the Securities and Exchange Commission. This communication
shall not constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of the securities discussed in this communication in any
state in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state.
Prospective purchasers are referred to the final prospectus and prospectus
supplement relating to the securities discussed in this communication for
definitive Information on any matter discussed in this communication. Any
investment decision should be based only on the data in the prospectus and the
prospectus supplement ("OFFERING DOCUMENTS") and the then current version of the
Information. Offering Documents contain data that is current as of their
publication dates and after publication may no longer be complete or current. A
final prospectus and prospectus supplement may be obtained by contacting the
Salomon Brothers Syndicate Desk at 212-783-3727.
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Harley-Davidson Eaglemark Motorcycle Trust 1997-3
Eaglemark, Inc., Seller and Servicer
Eaglemark Customer Funding Corporation-IV, Trust Depositor
Subject to Revision
Term Sheet dated October 20, 1997
Trust. . . . . . . . . . . . Harley-Davidson Eaglemark Motorcycle Trust
1997-3 (the "TRUST").
Trust Depositor. . . . . . . Eaglemark Customer Funding Corporation-IV, a
wholly owned, limite-purpose subsidiary
of Eaglemark, Inc. (the "TRUST
DEPOSITOR")
Seller/Servicer or
Seller/Servicer . . . . . . Eaglemark, Inc. ("EAGLEMARK" or the "SELLER"
or, in its capacity as Servicer, the
"SERVICER"), a 100% owned subsidiary of
Eaglemark Financial Services, Inc.
Owner Trustee. . . . . . . . Wilmington Trust Company, a Delaware banking
corporation (in such capacity, the
"OWNER TRUSTEE").
Indenture Trustee. . . . . . Harris Trust and Savings Bank, an Illinois
banking corporation (in such capacity,
the "INDENTURE TRUSTEE"). The Indenture
Trustee will also act as Paying Agent
under the Indenture and the Trust
Agreement.
Closing Date . . . . . . . . On or about October 30, 1997
Securities Offered . . . . . The securities offered are as follows:
A. General. . . . . . . The Harley-Davidson Eaglemark Motorcycle
Trust 1997-3 Harley-Davidson Motorcycle
Contract Backed Notes (the "NOTES") will
represent indebtedness of the Trust
secured by the assets of the Trust
(other than certain bank accounts
associated with the Certificates). The
Harley-Davidson Eaglemark Motorcycle
Trust 1997-3 Harley-Davidson Motorcycle
Contract Backed Certificates (the
"CERTIFICATES" and, together with the
Notes, the "SECURITIES") will represent
fractional undivided equity interests in
the Trust.
2
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materials. If you did not receive such a disclaimer please contact your
Salomon Brothers Financial Advisor immediately.
<PAGE>
The Trust will issue two Classes of Notes
pursuant to an Indenture to be dated as
of October 1, 1997 (the "INDENTURE"),
between the Trust and the Indenture
Trustee, as follows: (i) $62,500,000
aggregate principal amount (the "INITIAL
CLASS A-1 NOTE BALANCE") of Class A-1
____% Harley-Davidson Motorcycle
Contract Backed Notes (the "CLASS A-1
NOTES") and (ii) $31,000,000 aggregate
principal amount (the "INITIAL CLASS A-2
NOTE BALANCE") of Class A-2 ____%
Harley-Davidson Motorcycle Contract
Backed Notes (the "CLASS A-2 NOTES").
Payments of principal, made through the
application of available collections on
the Contracts in an amount reflecting
reductions in the principal balances of
the Contracts, and from certain other
available amounts as described herein,
will be made first on the Class A-1
Notes until the Class A-1 Notes have
been repaid in full, and thereafter on
the Class A-2 Notes until the Class A-2
Notes have been repaid in full, and in
each case prior to any repayment of
principal on the Certificates. Payments
of interest on the Class A-1 Notes and
the Class A-2 Notes will be made from
available collections on the Contracts,
and from certain other available amounts
as described herein, without priority of
payment between such Classes, but in
each case prior to payment of interest
on the Certificates. Accordingly, the
principal distinction between an
investment in the Class A-1 Notes and
the Class A-2 Notes is that holders of
Class A-1 Notes will receive a return of
invested principal sooner than holders
of Class A-2 Notes.
The Trust will issue $6,500,000 aggregate
principal amount of ___% Certificates
pursuant to a Trust Agreement to be
dated as of October 1, 1997 (the "TRUST
AGREEMENT") by and between the Trust
Depositor and the Owner Trustee (the
Owner Trustee, together with the
Indenture Trustee, being sometimes
collectively referred to herein as the
"TRUSTEES"). Payments in respect of
principal and interest on the
Certificates will be subordinated to
payments on the Notes to the extent
described herein.
Each Class of Notes and the Certificates will
be issued in minimum denominations of
$1,000 and will be available in
book-entry form only. Security holders
will be able to receive Definitive
Securities (as defined herein) only in
certain limited circumstances.
B. Trust Property . . . The Trust Property consists of, among other
things, the pool of initial contracts
(those Contracts described in Tables 1
through 6 under "THE CONTRACTS" are
hereinafter referred to as the "INITIAL
CONTRACTS") together with any Subsequent
Contracts (as hereinafter defined)
transferred to the Trust, and all
rights, benefits, obligations and
proceeds arising therefrom or in
connection therewith, including security
interests in the Harley-Davidson (and,
in certain limited instances, Buell)
motorcycles (see "THE CONTRACTS")
securing such Contracts and proceeds, if
any, from certain insurance policies
with respect to individual Motorcycles.
3
This page must be accompanied by the disclaimer on the cover page of these
materials. If you did not receive such a disclaimer please contact your
Salomon Brothers Financial Advisor immediately.
<PAGE>
C. Distribution Dates . . . . Distributions of interest and principal on
the Securities will be made on the
fifteenth day of each month (or, if such
day is not a Business Day, on the next
succeeding Business Day) (each, a
"DISTRIBUTION DATE"), commencing
November 17, 1997. Payments on the
Securities on each Distribution Date
will be paid to the holders of the
related Securities who are of record on
the last Business Day immediately
preceding the calendar month in which
such Distribution Date occurs (each, a
"RECORD DATE").
A "BUSINESS DAY" will be any day other than a
Saturday, a Sunday or a day on which
banking institutions in Chicago,
Illinois or Wilmington, Delaware are
authorized or obligated by law,
executive order or government decree to
be closed.
To the extent not previously paid prior to
such dates, the outstanding principal
amount of (i) the Class A-1 Notes will
be payable on the Distribution Date
occurring in December 2001 (the "CLASS
A-1 FINAL DISTRIBUTION DATE") and (ii)
the Class A-2 Notes will be payable on
the Distribution Date occurring in April
2003 (the "CLASS A-2 FINAL DISTRIBUTION
DATE" and, together with the Class A-1
Final Distribution Date, the "NOTE FINAL
DISTRIBUTION DATES"). To the extent not
previously paid in full prior to such
date, the unpaid principal balance of
the Certificates will be payable on the
Distribution Date occurring in April
2004 (the "CERTIFICATE FINAL
DISTRIBUTION DATE" and, together with
the Note Final Distribution Dates, the
"FINAL DISTRIBUTION DATES").
Terms of the Notes. . . . . . The principal terms of the Notes will be as
described below:
A.Interest Rates. . . . . The Class A-1 Notes will bear interest at the
rate of ____% per annum (the "CLASS A-1
RATE") and the Class A-2 Notes will bear
interest at the rate of ______% per
annum (the "CLASS A-2 RATE" and,
together with the Class A-1 Rate, the
"INTEREST RATES").
B. Interest . . . . . . Interest on the outstanding principal amount
of the Class A-1 Notes and Class A-2
Notes will accrue at the related Interest
Rate from and including the fifteenth day
of the month of the most recent
Distribution Date based on a 360-day year
consisting of 12 months of 30 days each
(or from and including the Closing Date
with respect to the first Distribution
Date) to but excluding the fifteenth day
of the month of the current Distribution
Date (each, an "INTEREST PERIOD").
Interest on the Notes for any
Distribution Date due but not paid on
such Distribution Date will be due on
the next Distribution Date, together
with, to the extent permitted by
applicable law, interest on such
shortfall at the related Interest Rate.
4
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materials. If you did not receive such a disclaimer please contact your
Salomon Brothers Financial Advisor immediately.
<PAGE>
C. Principal. . . . . . . . Principal of the Notes will be payable on
each Distribution Date in an amount
generally equal to the Note Principal
Distributable Amount (as hereinafter
defined) for such Distribution Date.
"NOTE PRINCIPAL DISTRIBUTABLE AMOUNT"
means, with respect to any Distribution
Date, the sum of the Note Monthly
Principal Distributable Amount for such
Distribution Date and any outstanding
Note Principal Carryover Shortfall for
the immediately preceding Distribution
Date; PROVIDED, HOWEVER, that the Note
Principal Distributable Amount for a
Class of Notes shall not exceed the
outstanding principal amount of such
Class of Notes. On each Distribution
Date, the Note Principal Distributable
Amount will be applied in the following
priority: first to reduce the principal
amount of the Class A-1 Notes to zero,
and thereafter, to reduce the principal
amount of the Class A-2 Notes to zero.
Notwithstanding the foregoing, if the
principal amount of either the Class A-1
Notes or Class A-2 Notes has not been
paid in full prior to its related Note
Final Distribution Date, the Note
Principal Distributable Amount for such
Note Final Distribution Date will be the
unpaid principal amount of such Class of
Notes as of such Note Final Distribution
Date.
D. Optional
Redemption . . . . . . . In the event of an Optional Purchase, the
Class A-2 Notes will be redeemed in
whole, but not in part, at a redemption
price equal to the unpaid principal
amount of the Class A-2 Notes plus
accrued interest thereon at the related
Interest Rate.
E. Mandatory
Redemption . . . . . . . Under certain conditions, the Notes may be
accelerated upon the occurrence of an
Event of Default under the Indenture.
F. Mandatory Special
Redemption . . . . . . . The holders of Class A-1 Notes ("CLASS A-1
NOTEHOLDERS") and Class A-2 Notes
("CLASS A-2 NOTEHOLDERS") will be
prepaid in part, without premium, on the
Distribution Date on or immediately
following the last day of the Funding
Period in the event that any amount
remains on deposit in the Pre-Funding
Account after giving effect to the
purchase of all Subsequent Contracts,
including any such purchase on such date
(a "MANDATORY SPECIAL REDEMPTION"). The
aggregate principal amount of Class A-1
Notes and Class A-2 Notes to be prepaid
will be an amount equal to the amount
then on deposit in the Pre-Funding
Account allocated pro rata; PROVIDED,
HOWEVER, in the event the Mandatory
Special Redemption Amount is less than
$150,000 such amount shall be allocated
solely to the Class A-1 Noteholders, pro
rata.
5
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materials. If you did not receive such a disclaimer please contact your
Salomon Brothers Financial Advisor immediately.
<PAGE>
Terms of the Certificates. . The principal terms of the Certificates will
be as described below:
A. Interest . . . . . . On each Distribution Date, the Owner
Trustee or any paying agent or paying
agents as the Owner Trustee may
designate from time to time (each, a
"PAYING AGENT", which initially will be
the Indenture Trustee) will distribute
pro rata to Certificateholders of record
as of the related Record Date accrued
interest at the rate of _____% per
annum (the "PASS-THROUGH RATE") on the
Certificate Balance (as defined herein)
as of the immediately preceding
Distribution Date (after giving effect
to distributions of principal to be
made on such immediately preceding
Distribution Date) or, in the case of
the first Distribution Date, the Initial
Certificate Balance. Interest in
respect of a Distribution Date will
accrue from and including the Closing
Date (in the case of the first
Distribution Date) or from and including
the fifteenth day of the month of the
most recent Distribution Date to but
excluding the fifteenth day of the month
of the current Distribution Date based
on a 360-day year consisting of 12
months of 30 days each. Interest on the
Certificates for any Distribution Date
due but not paid on such Distribution
Date will be due on the next Distribution
Date, together with, to the extent
permitted by applicable law, interest on
such shortfall at the Pass-Through Rate.
The "CERTIFICATE BALANCE" will equal
$6,500,000 (the "INITIAL CERTIFICATE
BALANCE") on the Closing Date and on any
date thereafter will equal the Initial
Certificate Balance reduced by all
distributions of principal previously
made in respect of the Certificates.
Distributions on the Certificates will
be subordinated to payments of interest
and principal on the Notes to the extent
described herein.
B. Principal. . . . . . No principal will be paid on the Certificates
until the Distribution Date on which the
principal amounts of the Class A-1 Notes
and Class A-2 Notes have been reduced to
zero. On such Distribution Date and
each Distribution Date thereafter,
principal of the Certificates will be
payable in an amount equal to the
Certificate Principal Distributable
Amount (as defined herein) for such
Distribution Date.
C. Optional Prepayment. In the event of an Optional Purchase, the
Certificates will be repaid in whole,
but not in part, at a repayment price
equal to the Certificate Balance plus
accrued interest thereon at the
Pass-Through Rate.
6
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materials. If you did not receive such a disclaimer please contact your
Salomon Brothers Financial Advisor immediately.
<PAGE>
Security for the Securities. The principal security for the Securities
will be as described below:
A. The Contracts. . . . . . The Contracts will be fixed-rate,
simple-interest conditional sales
contracts for Motorcycles, including any
and all rights to receive payments
collected thereunder on or after the
related Cutoff Date and security
interests in the Motorcycles financed
thereby.
On the Closing Date, the Trust Depositor will
sell, transfer and assign to the Trust
pursuant to the Sale and Servicing
Agreement dated as of October 1, 1997
(the "AGREEMENT") among the Trust
Depositor, the Trust, the Indenture
Trustee and Eaglemark (as servicer), and
the Trust will pledge to the Indenture
Trustee, pursuant to the Indenture,
Initial Contracts with an aggregate
principal balance of $78,615,521.31 as
of October 9, 1997, (the "INITIAL CUTOFF
DATE"). Following the Closing Date,
pursuant to the Agreement, the Trust
Depositor will be obligated, subject
only to the availability thereof, to
sell, and the Trust will be obligated to
purchase and pledge subject to the
satisfaction of certain conditions set
forth therein, Subsequent Contracts from
time to time during the Funding Period
(as defined below) having an aggregate
principal balance equal to
$21,384,478.69, such amount being equal
to the amount on deposit in the
Pre-Funding Account established under
the Indenture on the Closing Date. With
respect to each transfer of Subsequent
Contracts to the Trust and the
simultaneous pledge of Subsequent
Contracts to the Indenture Trustee, the
Trust Depositor will designate as a
cutoff date (each a "SUBSEQUENT CUTOFF
DATE") the date as of which such
Subsequent Contracts are deemed sold to
the Trust and pledged to the Indenture
Trustee. Each date on which Subsequent
Contracts are conveyed and pledged is
referred to herein as a "SUBSEQUENT
TRANSFER DATE."
The Initial Contracts and the Subsequent
Contracts will be selected from retail
Motorcycle installment sales contracts
in the Trust Depositor's portfolio based
on the criteria specified in the
Transfer and Sale Agreement. The
Contracts arise and will arise from
loans to Obligors located in the 50
states of the United States and the
District of Columbia. As of the Initial
Cutoff Date, the annual percentage rate
of interest on the Initial Contracts
ranges from 8.50% to 22.99% with a
weighted average of approximately
13.18%. The Initial Contracts had a
weighted average term to scheduled
maturity, as of origination, of
approximately 66.53 months, and a
weighted average term to scheduled
maturity, as of the Initial Cutoff Date,
of approximately 64.44 months. The
final scheduled Distribution Date on the
Initial Contract with the latest
maturity is no later than October 2003.
No Contract (including any Subsequent
Contract) will have a scheduled maturity
later than January 2004. The Contracts
generally are or will be prepayable at
any time without penalty to the Obligor.
Following the transfer of Subsequent
Contracts to the Trust, the aggregate
characteristics of the entire pool of
Contracts may vary from those of the
Initial Contracts as to the criteria
identified and described in "THE
CONTRACTS" herein.
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materials. If you did not receive such a disclaimer please contact your
Salomon Brothers Financial Advisor immediately.
<PAGE>
B. The Reserve Fund . . The Securityholders will be afforded certain
limited protection, to the extent
described herein, against losses in
respect of the Contracts by the
establishment of an account in the name
of the Indenture Trustee for the benefit
of the Securityholders (the "RESERVE
FUND").
The Reserve Fund will be created with an
initial deposit by the Trust Depositor
of $786,155.21 (the "RESERVE FUND
INITIAL DEPOSIT") on the Closing Date.
The funds in the Reserve Fund will
thereafter be supplemented on each
Distribution Date by the deposit of
certain Excess Amounts and Subsequent
Reserve Fund Amounts (as defined herein)
(such Excess Amounts and Subsequent
Reserve Fund Amounts, together with the
Reserve Fund Initial Deposit and the
Certificate Reserve Amount as defined
herein, the "RESERVE FUND DEPOSITS")),
until the amount in the Reserve Fund
reaches the Specified Reserve Fund
Balance (as defined herein). "EXCESS
AMOUNTS" in respect of a Distribution
Date will equal the funds on deposit in
the Collection Account in respect of
such Distribution Date, after giving
effect to all distributions required to
be made on such Distribution Date from
Available Monies (as defined herein).
The "SUBSEQUENT RESERVE FUND AMOUNT"
will equal the amount on each Subsequent
Transfer Date equal to 1.00% of the
aggregate balance of the Subsequent
Contracts conveyed to the Trust. On
each Distribution Date, funds will be
withdrawn from the Reserve Fund, up to
the Available Amount (as hereinafter
defined), for distribution to
Securityholders to cover any shortfalls
in interest and principal required to be
paid on the Securities.
The "SPECIFIED RESERVE FUND BALANCE" will
equal the sum of (i) 2.50% of the
Principal Balance of the Contracts in
the Trust as of the first day of the
immediately preceding Due Period and
(ii) $450,000; PROVIDED, HOWEVER, that
if certain trigger events occur (as more
specifically described in the Prospectus
Supplement), the Specified Reserve Fund
Balance will be qual to the sum of (i)
6.00% of the Principal Balance of the
Contracts in the Trust as of the first
day of the immediately preceding Due
Period and (ii) $450,000; PROVIDED,
FURTHER, that in no event shall the
Specified Reserve Fund Balance be less
than the sum of (i) 1.00% of the
aggregate of the Initial Class A-1 Note
Balance, Initial Class A-2 Note Balance
and Initial Certificate Balance and (ii)
$450,000.
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materials. If you did not receive such a disclaimer please contact your
Salomon Brothers Financial Advisor immediately.
<PAGE>
In addition to the Reserve Fund Initial
Deposit, the Trust Depositor will
deposit $450,000, (the "CERTIFICATE
RESERVE AMOUNT"), into the Reserve Fund
on the Closing Date. If funds in the
Reserve Fund (other than the Certificate
Reserve Amount) are applied in
accordance with the last sentence of the
preceding paragraph and are insufficient
to distribute the interest or principal
due on the Certificates, funds available
from the Certificate Reserve Amount will
be withdrawn from the Reserve Fund and
applied solely to cover any shortfalls
of interest on the Certificates on each
Distribution Date and of interest and
principal on the Certificates on the
Certificate Final Distribution Date.
The Certificate Reserve Amount will not
be available to pay interest or
principal on the Notes. The "AVAILABLE
AMOUNT" will equal the amount of all
funds on deposit in the Reserve Fund
less the undistributed balance of the
Certificate Reserve Amount, if any.
On each Distribution Date, after giving
effect to all distributions made on such
Distribution Date, any amounts in the
Reserve Fund that are in excess of the
Specified Reserve Fund Balance will be
allocated and distributed to the Trust
Depositor.
C. Pre-Funding Account. During the period (the "FUNDING PERIOD") from
and including the Closing Date until
the earliest of (a) the Distribution
Date on which the amount on deposit in
the Pre-Funding Account is less than
$150,000, (b) the date on which an Event
of Termination occurs with respect to
the Servicer under the Agreement, (c)
the date on which certain events of
insolvency occur with respect to the
Trust Depositor or (d) the close of
business on the date which is 90 days
from and including the Closing Date, the
Pre-Funding Account will be maintained
as an account in the name of the
Indenture Trustee on behalf of the
Noteholders to secure the Trust
Depositor's obligations under the
Agreement, as applicable, to purchase
and transfer Subsequent Contracts to the
Trust and the Trust's obligations under
the Indenture to pledge Subsequent
Contracts to the Indenture Trustee. The
Pre-Funded Amount will initially equal
$21,384,478.69 and, during the Funding
Period, will be reduced by the amount
thereof that the Trust uses to purchase
Subsequent Contracts from the Trust
Depositor and contemporaneously
therewith from the Seller by the Trust
Depositor. The Trust Depositor expects
that the Pre-Funded Amount will be
reduced to less than $150,000 by the
Distribution Date occurring in January
1998. Any Pre-Funded Amount remaining
at the end of the Funding Period will be
payable to the Noteholders as described
above in "TERMS OF THE NOTES - MANDATORY
SPECIAL REDEMPTION."
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materials. If you did not receive such a disclaimer please contact your
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<PAGE>
D. Interest Reserve
Account. . . . . . . The Trust Depositor will establish, and fund
with an initial deposit on the Closing
Date, a separate collateral account in
the name of the Indenture Trustee on
behalf of the Securityholders under the
Agreement (the "INTEREST RESERVE
ACCOUNT"), for the purpose of providing
additional funds for payment of Carrying
Charges (as described below) to pay
certain distributions on Distribution
Dates occurring during (and on the first
Distribution Date following the end of)
the Funding Period. In addition to the
initial deposit, all investment earnings
with respect to the Pre-Funding Account
are to be deposited into the Collection
Account and, pursuant to the Agreement,
on each Distribution Date described
above, amounts in respect of Carrying
Charges from such account will be
transferred into the Collection Account.
"CARRYING CHARGES" means (i) the product
of (x) the weighted average of the Class
A-1 Rate, the Class A-2 Rate and the
Pass-Through Rate and (y) the
undisbursed funds (excluding investment
earnings) in the Pre-Funding Account (as
of the last day of the related Due
Period, as defined herein) over (ii) the
amount of any investment earnings on
funds in the Pre-Funding Account which
was transferred to the Interest Reserve
Account, as well as interest earnings on
amounts in the Interest Reserve Account.
The Interest Reserve Account will be
established to account for the fact that
a portion of the proceeds obtained from
the sale of the Notes will be initially
deposited in the Pre-Funding Account (as
the initial Pre-Funded Amount) rather
than invested in Contracts, and the
monthly investment earnings on such
Pre-Funded Amount (until the Pre-Funded
Amount is used to purchase Subsequent
Contracts) are expected to be less than
the weighted average of the Class A-1
Rate, the Class A-2 Rate and the
Pass-Through Rate with respect to the
corresponding portion of the Class A-1
Principal Balance, Class A-2 Principal
Balance and the Certificate Balance, as
well as the amount necessary to pay the
Trustees' Fees. The Interest Reserve
Account is not designed to provide any
protection against losses on the
Contracts in the Trust. After the
Funding Period, money remaining in the
Interest Reserve Account will be
released to the Trust Depositor.
Optional Purchase. . . . . . The Seller, through the Trust Depositor may,
but will not be obligated to, purchase
all of the Contracts in the Trust, and
thereby cause early retirement of all
outstanding Securities, on any
Distribution Date as of which the Pool
Balance has declined to less than 10% of
the Initial Pool Balance (an "OPTIONAL
PURCHASE").
Ratings. . . . . . . . . . . It is a condition of issuance that the Class
A-1 Notes and Class A-2 Notes be rated
AAA by Standard & Poor's Ratings
Services, A Division of The McGraw-Hill
Companies ("S&P") and Aaa by Moody's
Investors Service, Inc. ("MOODY'S" and,
together with S&P, the "RATING
AGENCIES") and the Certificates each be
rated at least BBB by S&P and Baa2 by
Moody's.
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materials. If you did not receive such a disclaimer please contact your
Salomon Brothers Financial Advisor immediately.
<PAGE>
Advances . . . . . . . . . . The Servicer is obligated to advance each
month an amount equal to accrued and
unpaid interest on the Contracts which
was delinquent with respect to the
related Due Period (as defined herein)
(each an "ADVANCE"), but only to the
extent that the Servicer believes that
the amount of such Advance will be
recoverable from collections on the
Contracts. The Servicer will be
entitled to reimbursement of outstanding
Advances on any Distribution Date by
means of a first priority withdrawal of
Available Monies (as hereinafter
defined) then held in the Collection
Account.
Mandatory Repurchase by the
Trust Depositor. . . . . . . Under the Agreement, the Trust Depositor has
agreed, in the event of a breach of
certain representations and warranties
made by the Trust Depositor and
contained therein which materially and
adversely affects the Trust's interest
in any Contract and which has not been
cured, to repurchase such Contract
within two business days prior to the
first Determination Date after the Trust
Depositor becomes aware of such breach.
"Determination Date" means the fourth
business day following the conclusion of
a Due Period. The Seller is obligated
under the Transfer and Sale Agreement
(which right against the Seller the
Trust Depositor has assigned in such
circumstances to the Trust) to
repurchase the Contracts from the Trust
Depositor contemporaneously with the
Trust Depositor's purchase of the
Contracts from the Trust.
11
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<PAGE>
Security Interests and Other
Aspects of the Contracts . . In connection with the establishment of the
Trust as well as the assignment,
conveyance and transfer of Contracts
(including Subsequent Contracts) to the
Trust and pledge to the Indenture
Trustee, security interests in the
Motorcycles securing the Contracts have
been (or will be) (i) conveyed and
assigned by the Seller to the Trust
Depositor pursuant to the Transfer and
Sale Agreement (and, in the case of
Subsequent Contracts, the related
Subsequent Purchase Agreement as defined
therein and executed thereunder), (ii)
conveyed and assigned by the Trust
Depositor to the Trust pursuant to the
Agreement (and, in the case of
Subsequent Contracts, the related
Subsequent Transfer Agreement as defined
herein and executed thereunder) and
(iii) pledged by the Trust to the
Indenture Trustee pursuant to the
Indenture. The Agreement will designate
the Servicer as custodian to maintain
possession, as the Indenture Trustee's
agent, of the Contracts and any other
documents relating to the Motorcycles.
Uniform Commercial Code financing
statements will be filed in both Nevada
and Illinois, reflecting the conveyance
and assignment of the Contracts to the
Trust Depositor from the Seller, from
the Trust Depositor to the Trust and the
pledge from the Trust to the Indenture
Trustee, and the Seller's and the Trust
Depositor's accounting records and
computer systems will also reflect such
conveyance and assignment and pledge.
To facilitate servicing and save
administrative costs, such documents
will not be segregated from other
similar documents that are in the
Servicer's possession. However, the
Contracts will be stamped to reflect
their conveyance and assignment and
pledge. If, however, though fraud,
negligence or otherwise, a subsequent
purchaser were able to take physical
possession of the Contracts without
notice of such conveyance and assignment
and pledge, the Trust's and Indenture
Trustee's interest in the Contracts
could be defeated.
In addition, due to administrative burden and
expense, the certificates of title to
the Motorcycles will not be amended or
reissued to reflect the conveyance and
assignment of the Seller's security
interest in the Motorcycles related to
the Contracts to the Trust Depositor and
the Trust or the pledge to the Indenture
Trustee. In the absence of amendments
to the certificates of title, the Trust
and Indenture Trustee will not have a
perfected security interest in the
Motorcycles in some states. Further,
federal and state consumer protection
laws impose requirements upon creditors
in connection with extensions of credit
and collections on conditional sales
contracts, and certain of these laws
make an assignee of such a contract
liable to the obligor thereon for any
violation of such laws by the lender.
The Trust Depositor has agreed to
repurchase any Contract as to which it
has failed to perfect a security
interest in the Motorcycle securing such
Contract, or as to which a breach of
federal or state laws exists if such
breach materially and adversely affects
the Trust's interest in such Contract
and if such failure or breach has not
been cured within 90 days. The Seller
has entered into a corresponding
obligation to repurchase such Contracts
from the Trust Depositor under the
Transfer and Sale Agreement and
Subsequent Purchase Agreements.
12
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<PAGE>
Monthly Servicing Fee. . . . The Servicer will be entitled to receive for
each Due Period a monthly servicing fee
(the "MONTHLY SERVICING FEE") equal to
1/12th of 1% of the Principal Balance of
the Contracts as of the beginning of
such Due Period. The Servicer will also
be entitled to receive any extension
fees or late payment penalty fees paid
by Obligors (collectively with the
Monthly Servicing Fee, the "SERVICING
FEE"). The Servicing Fee is payable
prior to any payments to the Noteholders
or the Certificateholders.
Tax Status . . . . . . . . . In the opinion of Winston & Strawn, federal
tax counsel to the Trust Depositor, for
federal income tax purposes, the 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.
Each Noteholder, by the acceptance of a
Note, will agree to treat the Notes as
indebtedness, and each
Certificateholder, by the acceptance of
a Certificate, will agree to treat the
Trust as a partnership in which the
Certificateholders are partners for
federal income tax purposes.
ERISA Considerations . . . . Subject to the considerations discussed under
"ERISA CONSIDERATIONS" in the Prospectus
Supplement, the Notes will be eligible
for purchase by employee benefit plans.
Any benefit plan fiduciary considering
purchase of the Notes should, however,
consult with its counsel regarding the
consequences of such purchase under
ERISA and the Code.
The Certificates are not eligible for
purchase by (i) employee benefit plans
subject to ERISA, or (ii) individual
retirement accounts and other retirement
plans subject to Section 4975 of the
Code.
THE CONTRACTS
Each Contract is (or will be, in the case of Subsequent Contracts) secured
by a Motorcycle and is (or will be) a conditional sales contract originated by a
Harley-Davidson dealer and purchased by the Trust Depositor. No Contract may be
substituted by the Seller or the Trust Depositor with another Motorcycle
contract after such Contract has been sold by the Trust Depositor to the Trust.
Each Contract (a) is (or will be) secured by a Motorcycle, (b) has (or will
have) a fixed annual percentage rate and provide for, if timely made, payments
of principal and interest which fully amortize the loan on a simple interest
basis over its term, (c) with respect to the Initial Contracts, has its last
scheduled payment due no later than October 2003, and with respect to the
Contracts as a whole (including any Subsequent Contracts conveyed to the Trust
after the Closing Date), will have a last scheduled payment due no later than
January 2004, and (d) with respect to the Initial Contracts, has its first
scheduled payment due no later than November 1997. The Contracts were (or will
be) acquired by the Trust Depositor in the ordinary course of the Trust
Depositor's business. (For general composition of the Initial Contracts see
Table 1 below). Approximately 66.14% of the Principal Balance of the Initial
Contracts as of the Initial Cutoff Date is attributable to loans to purchase
Motorcycles which were new and approximately 33.86% is attributable to loans to
purchase Motorcycles which were used at the time the related Contract was
originated. All Initial Contracts have a contractual rate of interest of at
least 8.50% per annum and not more than 22.99% per annum and the weighted
average contractual rate of interest of the Initial Contracts as of the Initial
Cutoff Date is approximately 13.18% per annum (see Table 2 below). Eaglemark
applies a tiered system of interest rates to reflect varying degrees of risk
assigned to different credit underwriting categories. The Initial Contracts
have remaining maturities as of the Initial Cutoff Date of at least 6 months but
not more than, 72 months and original maturities of at least 12 months but not
more than 72
13
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<PAGE>
months. The Initial Contracts had a weighted average term to scheduled
maturity, as of origination, of approximately 66.53 months, and a weighted
average term to scheduled maturity as of the Initial Cutoff Date of
approximately 64.44 months (see Tables 3 and 4 below). The average principal
balance per Initial Contract as of the Initial Cutoff Date was approximately
$10,990.57 and the principal balances on the Initial Contracts as of the Initial
Cutoff Date ranged from $610.11 to $38,020.25 (see Table 5 below). The
Contracts arise (or will arise) from loans to Obligors located in 50 states and
the District of Columbia and with respect to the Initial Contracts, constitute
the following approximate amounts expressed as a percentage of the aggregate
principal balances on the Initial Contracts as of the Initial Cutoff Date:
11.26% in the state of Texas, 10.14% in California, 6.64% in Pennsylvania,
5.95% in Florida and 5.22% in Ohio, (see Table 6 below). No other state
represented more than 4.85% of the Initial Contracts.
Except for certain criteria specified in the preceding paragraph, there
will be no required characteristics of the Subsequent Contracts. Therefore,
following the transfer of the Subsequent Contracts to the Trust, the aggregate
characteristics of the entire pool of the Contracts, including the composition
of the Contracts, the distribution by weighted average annual percentage rate of
the Contracts, the distribution by calculated remaining term of the Contracts,
the distribution by original term to maturity of the Contracts, the distribution
by current balance of the Contracts, and the geographic distribution of the
Contracts, described in the following tables, may vary from those of the Initial
Contracts as of the Initial Cutoff Date.
TABLE 1
COMPOSITION OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
Aggregate Principal Balance. . . . . . . . . . . . . . $78,615,521.31
Number of Contracts. . . . . . . . . . . . . . . . . . 7,153
Average Principal Balance. . . . . . . . . . . . . . . $10,990.57
Weighted Average Annual Percentage
Rate ("APR"). . . . . . . . . . . . . . . . . . . 13.18%
(Range) . . . . . . . . . . . . . . . . . . . . . 8.50%-22.99%
Weighted Average Original Term . . . . . . . . . . . . 66.53
(Range) . . . . . . . . . . . . . . . . . . . . . 12 to 72
Weighted Average Calculated Remaining Term . . . . . . 64.44
(Range) . . . . . . . . . . . . . . . . . . . . . 6 to 72
14
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<PAGE>
TABLE 2
DISTRIBUTION BY APR OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
PERCENT OF
NUMBER OF NUMBER OF TOTAL OUTSTANDING PERCENT OF POOL
RATE CONTRACTS CONTRACTS PRINCIPAL BALANCE BALANCE(1)
---- --------- --------- ----------------- ----------
8.001- 9.000% 258 3.61% $ 3,839,666.30 4.88%
9.001-10.000 283 3.96 3,859,604.98 4.91
10.001-11.000 666 9.31 8,575,381.33 10.91
11.001-12.000 954 13.34 11,404,118.00 14.51
12.001-13.000 1,647 23.03 19,134,724.66 24.34
13.001-14.000 1,257 17.57 12,975,357.34 16.50
14.001-15.000 901 12.60 8,714,028.68 11.08
15.001-16.000 419 5.86 3,486,666.39 4.44
16.001-17.000 136 1.90 791,361.86 1.01
17.001-18.000 179 2.50 1,524,388.31 1.94
18.001-19.000 21 0.29 221,197.55 0.28
19.001-20.000 261 3.65 2,597,294.48 3.30
20.001-21.000 46 0.64 374,229.95 0.48
21.001-22.000 121 1.69 1,079,383.53 1.37
22.001-23.000 % 4 0.06 38,117.95 0.05
---- ----- --------- -----
Totals: 7,153 100.00% $78,615,521.31 100.00%
(1) Percentages may not add to 100.00% because of rounding.
TABLE 3
DISTRIBUTION BY CALCULATED REMAINING TERM
OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
PERCENT OF
CALCULATED REMAINING NUMBER OF NUMBER OF TOTAL OUTSTANDING PERCENT OF
TERM (MONTHS) CONTRACTS CONTRACTS(1) PRINCIPAL BALANCE POOL BALANCE(1)
------------- --------- ------------ ----------------- ---------------
<S> <C> <C> <C> <C>
0 - 12 240 3.36% 522,923.85 0.67%
13 - 24 484 6.77 2,005,277.80 2.55
25 - 36 264 3.69 1,941,074.30 2.47
37 - 48 475 6.64 4,068,815.91 5.18
49 - 60 1,772 24.77 18,654,132.33 23.73
61 - 72 3,918 54.77 51,423,297.12 65.41
----- ----- ------------- ------
TOTALS: 7,153 100.00% 78,615,521.31 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
15
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materials. If you did not receive such a disclaimer please contact your
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<PAGE>
TABLE 4
DISTRIBUTION BY ORIGINAL TERM TO MATURITY
OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
TOTAL
PERCENT OF OUTSTANDING
ORIGINAL NUMBER OF NUMBER OF PRINCIPAL PERCENT OF POOL
TERM (MONTHS) CONTRACTS CONTRACTS(1) BALANCE BALANCE(1)
------------ --------- ------------ ------- ----------
<S> <C> <C> <C> <C>
0 - 12 2 0.03% $ 5,115.77 0.01%
13 - 24 82 1.15 510,610.12 0.65
25 - 36 228 3.19 1,707,188.26 2.17
37 - 48 483 6.75 3,961,535.04 5.04
49 - 60 2,376 33.22 20,489,748.72 26.06
61 - 72 3,982 55.67 51,941,323.40 66.07
----- ----- ------------- -----
TOTALS: 7,153 100.00% $78,615,521.31 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
16
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<PAGE>
TABLE 5
DISTRIBUTION BY CURRENT BALANCE OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF TOTAL OUTSTANDING PERCENT OF POOL
CURRENT BALANCE CONTRACTS CONTRACTS(1) PRINCIPAL BALANCE BALANCE (1)
--------------- --------- ------------ ----------------- ---------------
<S> <C> <C> <C> <C>
$ 0.01 - 1,000.00 12 0.17% $ 9,825.76 0.01%
$ 1,000.01 - 2,000.00 141 1.97 224,793.63 0.29
$ 2,000.01 - 3,000.00 219 3.06 546,713.62 0.70
$ 3,000.01 - 4,000.00 267 3.73 941,402.31 1.20
$ 4,000.01 - 5,000.00 318 4.45 1,439,108.22 1.83
$ 5,000.01 - 6,000.00 346 4.84 1,919,473.34 2.44
$ 6,000.01 - 7,000.00 453 6.33 2,961,538.63 3.77
$ 7,000.01 - 8,000.00 466 6.51 3,504,295.95 4.46
$ 8,000.01 - 9,000.00 544 7.61 4,628,319.02 5.89
$ 9,000.01 - 10,000.00 544 7.61 5,187,033.46 6.60
$ 10,000.01 - 11,000.00 407 5.69 4,280,512.26 5.44
$ 11,000.01 - 12,000.00 376 5.26 4,331,700.71 5.51
$ 12,000.01 - 13,000.00 358 5.00 4,485,540.31 5.71
$ 13,000.01 - 14,000.00 410 5.73 5,537,045.70 7.04
$ 14,000.01 - 15,000.00 482 6.74 6,995,038.01 8.90
$ 15,000.01 - 16,000.00 519 7.26 8,044,895.13 10.23
$ 16,000.01 - 17,000.00 400 5.59 6,613,080.89 8.41
$ 17,000.01 - 18,000.00 320 4.47 5,591,253.86 7.11
$ 18,000.01 - 19,000.00 217 3.03 4,013,283.94 5.10
$ 19,000.01 - 20,000.00 168 2.35 3,274,358.23 4.17
$ 20,000.01 - 21,000.00 74 1.03 1,514,902.72 1.93
$ 21,000.01 - 22,000.00 46 0.64 986,333.75 1.25
$ 22,000.01 - 23,000.00 30 0.42 672,890.79 0.86
$ 23,000.01 - 24,000.00 15 0.21 352,477.54 0.45
$ 24,000.01 - 25,000.00 9 0.13 221,171.38 0.28
$ 25,000.01 - 26,000.00 4 0.06 101,063.43 0.13
$ 26,000.01 - 27,000.00 4 0.06 105,937.69 0.13
$ 27,000.01 - 28,000.00 1 0.01 27,363.09 0.03
$ 31,000.01 - 32,000.00 1 0.01 31,143.36 0.04
$ 35,000.01 - 36,000.00 1 0.01 35,004.33 0.04
$ 38,000.01 - 39,000.00 1 0.01 38,020.25 0.05
----- ---- --------- ----
TOTALS: 7,153 100.00% $78,615,521.31 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
17
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<PAGE>
TABLE 6
GEOGRAPHIC DISTRIBUTION OF THE INITIAL CONTRACTS
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NUMBER OF NUMBER OF TOTAL OUTSTANDING POOL
STATE CONTRACTS CONTRACTS(1) PRINCIPAL BALANCE BALANCE(1)
----- --------- ------------ ------------------ ----------
<S> <C> <C> <C> <C>
ALABAMA 76 1.06 834,688.54 1.06
ALASKA 18 0.25% $ 222,466.97 0.28%
ARKANSAS 28 0.39 348,723.77 0.44
ARIZONA 159 2.22 1,761,944.72 2.24
CALIFORNIA 774 10.82 7,970,636.25 10.14
COLORADO 73 1.02 864,724.85 1.10
CONNECTICUT 112 1.57 1,098,535.91 1.40
DELAWARE 31 0.43 352,278.60 0.45
FLORIDA 429 6.00 4,674,702.17 5.95
GEORGIA 146 2.04 1,696,913.09 2.16
HAWAII 86 1.20 895,952.25 1.14
IOWA 40 0.56 457,026.19 0.58
IDAHO 8 0.11 75,186.03 0.10
ILLINOIS 238 3.33 2,686,276.14 3.42
INDIANA 101 1.41 1,115,943.55 1.42
KANSAS 50 0.70 526,542.28 0.67
KENTUCKY 97 1.36 1,000,060.14 1.27
LOUISANA 69 0.96 816,424.04 1.04
MAINE 24 0.34 190,013.19 0.24
MARYLAND 170 2.38 1,947,867.19 2.48
MASSACHUSETTS 140 1.96 1,424,993.79 1.81
MICHIGAN 66 0.92 839,962.75 1.07
MINNESOTA 71 0.99 731,965.78 0.93
MISSISSIPPI 16 0.22 191,986.93 0.24
MISSOURI 42 0.59 441,208.81 0.56
MONTANA 26 0.36 222,921.02 0.28
NEBRASKA 15 0.21 197,727.41 0.25
NEVADA 78 1.09 876,351.96 1.11
NEW HAMPSHIRE 80 1.12 774,455.18 0.99
NEW JERSEY 255 3.56 2,752,967.69 3.50
NEW MEXICO 77 1.08 910,811.35 1.16
</TABLE>
18
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<PAGE>
TABLE 6
GEOGRAPHIC DISTRIBUTION OF THE INITIAL CONTRACTS
(CONTINUED)
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NUMBER OF NUMBER OF TOTAL OUTSTANDING POOL
STATE CONTRACTS CONTRACTS(1) PRINCIPAL BALANCE BALANCE(1)
----- --------- ------------ ----------------- ----------
<S> <C> <C> <C> <C>
NEW YORK 198 2.77 2,020,327.69 2.57
NORTH CAROLINA 273 3.82 2,828,379.87 3.60
NORTH DAKOTA 5 0.07 63,283.70 0.08
OHIO 406 5.68 4,100,281.00 5.22
OKLAHOMA 79 1.10 942,782.54 1.20
OREGON 176 2.46 2,005,764.99 2.55
PENNSYLVANIA 501 7.00 5,217,921.36 6.64
RHODE ISLAND 27 0.38 295,139.79 0.38
SOUTH CAROLINA 107 1.50 1,380,881.63 1.76
SOUTH DAKOTA 28 0.39 303,441.62 0.39
TENNESSEE 203 2.84 2,312,741.98 2.94
TEXAS 726 10.15 8,855,263.61 11.26
UTAH 28 0.39 354,440.13 0.45
VERMONT 13 0.18 132,553.52 0.17
VIRGINIA 250 3.50 2,711,125.22 3.45
WASHINGTON 325 4.54 3,812,663.55 4.85
WEST VIRGINIA 33 0.46 361,505.59 0.46
WISCONSIN 170 2.38 1,901,660.33 2.42
WYOMING 10 0.14 113,104.65 0.14
------ ------- --------------- -------
TOTALS: 7,153 100.00% $78,615,521.31 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
19
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<PAGE>
DELINQUENCY, LOAN LOSS AND REPOSSESSION INFORMATION
The following tables set forth the delinquency experience and loan loss and
repossession experience of the Seller's portfolio of conditional sales contracts
for Motorcycles. These figures include data in respect of contracts which the
Seller has previously sold with respect to prior securitizations and for which
the Seller acts as servicer.
20
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<PAGE>
DELINQUENCY EXPERIENCE(1)/
(DOLLARS IN THOUSANDS)
AT
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1994 1995 1996 1996 1997(3)/
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NUMBER OF
CONTRACTS AND
ASSOCIATED
OUTSTANDING
PRINCIPAL DOLLAR
BALANCES . . . . . 11,695 $97,389.6 20,590 $184,054.0 32,574 $303,682.4 30,530 $285,406.3 43,679 $421,433.7
PERIOD OF
DELINQUENCY AND
ASSOCIATED
OUTSTANDING
PRINCIPAL
BALANCES(2)/ . . .
30-59 DAYS . . . . 168 $1,436.8 477 $4,043.3 904 $8,002.9 779 $6,784.2 1,538 $13,982.8
60-89 DAYS . . . . 41 $330.3 157 $1,298.7 374 $3,170.7 306 $2,439.7 595 $5,339.1
90 DAYS OR MORE. . 31 $371.2 140 $1,120.2 213 $1,880.6 178 $1,517.4 406 $3,471.2
TOTAL NUMBER OF
DELINQUENT
CONTRACTS. . . . . 240 774 1,491 1,263 2,539
DELINQUENT
CONTRACTS AS A % OF
TOTAL NUMBER OF
CONTRACTS. . . . . 2.05% 3.76% 4.58% 4.14% 5.81%
AGGREGATE PRINCIPAL
BALANCE OF
DELINQUENT
CONTRACTS. . . . . $2,138.3 $6,462.2 $13,054.2 $10,741.3 $22,793.1
</TABLE>
21
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<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
------------ ------------ ------------ ------------- -------------
1994 1995 1996 1996 1997(3)/
---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
AGGREGATE PRINCIPAL
BALANCE OF
DELINQUENT
CONTRACTS AS A
PERCENTAGE OF THE
AGGREGATE
OUTSTANDING
PRINCIPAL BALANCE OF
CONTRACTS. . . . . 2.20% 3.51% 4.30% 3.76% 5.41%
</TABLE>
(1) Excludes Contracts already in repossession, which Contracts the
Servicer does not consider outstanding.
(2) The period of delinquency is based on the number of days payments
are contractually past due (assuming 30-day months).
Consequently, a Contract due on the first day of a month is not
30 days delinquent until the first day of the next month.
Obligors do not receive initial statements until 60 days after
the origination of their Contracts; therefore, the Obligors'
associated nonpayment is not considered for delinquency
experience until after the end of such 60-day period.
(3) Eaglemark, Inc., through its credit card bank, recently began
issuing a Visa credit card ("VISA"), Payments of which are
received through a separate lockbox. Payments with respect to
the predecessor "HARLEY" credit card were made jointly with
Motorcycle contract payments into a lockbox and the amounts
therein were segregated into Harley credit card payments and
Motorcycle contract payments pursuant to a Lockbox Administration
Agreement. Eaglemark, Inc. Underwent a systems conversion on
August 25, 1997 to facilitate the transfer of the Harley card
balances to the Visa credit card as well as the processing of new
originations under the Visa card. Because of such system
conversions there has been difficulty segregating the now
separate Visa credit card payments and the Motorcycle contract
payments which has resulted in payments on the Motorcycle
contracts not being posted on a timely basis. At the present
time, management is not able to quantify the impact on
delinquencies due to the system conversion. It is anticipated it
will take 60 days from the date of conversion (I.E. August 25,
1997) To reestablish accurate compilations for the Motorcycle
contract payments. Management believes that the increase in
delinquencies is due primarily to the system conversion and that
the credit quality of the Motorcycle contract portfolio has not
materially changed.
22
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<PAGE>
LOAN LOSS/REPOSSESSION EXPERIENCE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
TWELVE TWELVE TWELVE NINE NINE
MONTHS MONTHS MONTHS MONTHS MONTHS
ENDED ENDED ENDED ENDED ENDED
DECEMBER DECEMBER DECEMBER SEPTEMBER SEPTEMBER
31, 31, 31, 30, 30,
1994 1995 1996 1996 1997
<S> <C> <C> <C> <C> <C>
PRINCIPAL BALANCE OF
ALL CONTRACTS
SERVICED(1)/ . . . . $97,643.2 $184,548.7 $304,730.9 $285,406.3 $421,433.7
CONTRACT
LIQUIDATIONS(2)/ . . 0.50% 0.76% 0.74% 0.76% 1.33%
NET LOSSES:
DOLLARS(3)/ . . . . $131.1 $866.4 $1,639.5 $1,220.9 $2,327.7
PERCENTAGE(4)/ . . . 0.13% 0.47% 0.54% 0.57% 0.73%
</TABLE>
(1) As of period end. Includes Contracts already in repossession.
(2) As a percentage of the total number of Contracts being serviced as of
period end, calculated on an annualized basis.
(3) The calculation of net loss includes actual charge-offs, deficiency
balances remaining after liquidation of repossessed vehicles and
expenses of repossession and liquidation, net of recoveries.
(4) As a percentage of the principal amount of Contracts being serviced as
of period end, calculated on an annualized basis.
THE DATA PRESENTED IN THE FOREGOING TABLES ARE FOR ILLUSTRATIVE PURPOSES ONLY
AND THERE IS NO ASSURANCE THAT THE DELINQUENCY, LOAN LOSS OR REPOSSESSION
EXPERIENCE OF THE CONTRACTS WILL BE SIMILAR TO THAT SET FORTH ABOVE.
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materials. If you did not receive such a disclaimer please contact your
Salomon Brothers Financial Advisor immediately.
