<PAGE>
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): April 17, 1998
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.)
<PAGE>
ITEM 5. OTHER EVENTS
The registrant is filing a term sheet relating to the Harley-Davidson
Eaglemark Motorcycle Trust 1998-1 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:
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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
April 17, 1998
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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
1998-1. Neither Salomon Smith Barney 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The information contained herein is preliminary and will be superseded by the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The Information contained herein will be superseded by the description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 Smith Barney Syndicate Desk at
212-783-3727.
<PAGE>
Harley-Davidson Eaglemark Motorcycle Trust 1998-1
Eaglemark, Inc., Seller and Servicer
Eaglemark Customer Funding Corporation-IV, Trust Depositor
Subject to Revision
Term Sheet dated April 17, 1998
Trust Harley-Davidson Eaglemark Motorcycle Trust 1998-1
(the "TRUST").
Trust Depositor Eaglemark Customer Funding Corporation-IV, a wholly
owned, limited-purpose subsidiary of Eaglemark,
Inc. (the "TRUST DEPOSITOR")
Seller and 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 April 28, 1998
Securities Offered The securities offered are as follows:
A. General The Harley-Davidson Eaglemark Motorcycle Trust 1998-
1 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 1998-1 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 Smith Barney Financial Advisor immediately.
<PAGE>
The Trust will issue two Classes of Notes pursuant
to an Indenture to be dated
as of April 1, 1998 (the "INDENTURE"), between
the Trust and the Indenture Trustee, as
follows: (i) $100,000,000 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) $49,600,000 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 $10,400,000 aggregate principal
amount of ___% Certificates pursuant to a Trust
Agreement to be dated as of April 1, 1998 (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
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materials. If you did not receive such a disclaimer please contact your
Salomon Smith Barney Financial Advisor immediately.
<PAGE>
C. Distribution Distributions of interest and principal on the
Dates 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 May
15, 1998. 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 May 2002 (the
"CLASS A-1 FINAL DISTRIBUTION DATE") and (ii)
the Class A-2 Notes will be payable on the
Distribution Date occurring in February 2004
(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 January 2005
(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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<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 Smith Barney Financial Advisor immediately.
<PAGE>
Terms of the The principal terms of the Certificates will be as
Certificates 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 $10,400,000
(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 Smith Barney Financial Advisor immediately.
<PAGE>
Security for the The principal security for the Securities will be as
Securities 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
April 1, 1998 (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 $114,449,218.84
as of April 2, 1998, (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
$45,550,781.16, 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 8.75% to 23.99%
with a weighted average of approximately
13.15%. The Initial Contracts had a weighted
average term to scheduled maturity, as of
origination, of approximately 67.28 months, and
a weighted average term to scheduled maturity,
as of the Initial Cutoff Date, of approximately
64.95 months. The final scheduled Distribution
Date on the Initial Contract with the latest
maturity is no later than April 2004. No
Contract (including any Subsequent Contract)
will have a scheduled maturity later than July
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.
7
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materials. If you did not receive such a disclaimer please contact your
Salomon Smith Barney Financial Advisor immediately.
<PAGE>
B. The Reserve The Securityholders will be afforded certain limited
Fund 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 $572,246.09
(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 .50% 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 equal 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.
8
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materials. If you did not receive such a disclaimer please contact your
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<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 second 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 $45,550,781.16 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 July 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."
9
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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.
10
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<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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materials. If you did not receive such a disclaimer please contact your
Salomon Smith Barney Financial Advisor immediately.
<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 April 2004, 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 July 2004, and (d) with respect to the Initial Contracts, has its
first scheduled payment due no later than May 1998. 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 62.48% 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 37.52% 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 8.75% per annum and not more than 23.99% per annum and the weighted
average contractual rate of interest of the Initial Contracts as of the
Initial Cutoff Date is approximately 13.15% 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 4 months but not more than, 72 months and original maturities of at
least 12 months but not more than 72 months. The Initial Contracts had a
weighted average term to scheduled maturity, as of origination, of
approximately 67.28 months, and a weighted average term to scheduled maturity
as of the Initial Cutoff Date of approximately 64.95 months (see
13
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<PAGE>
Tables 3 and 4 below). The average principal balance per Initial Contract as
of the Initial Cutoff Date was approximately $11,560.53 and the principal
balances on the Initial Contracts as of the Initial Cutoff Date ranged from
$687.56 to $33,606.50 (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: 13.24% in
California, 9.19% in Texas, 8.73% in Florida and 5.83% in Pennsylvania, (see
Table 6 below). No other state represented more than 4.02% 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 $114,449,218.84
Number of Contracts 9,900
Average Principal Balance $11,560.53
Weighted Average Annual Percentage
Rate ("APR") 13.15%
(Range) 8.75%-23.99%
Weighted Average Original Term 67.28
(Range) 12 to 72
Weighted Average Calculated Remaining Term 64.95
(Range) 4 to 72
14
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<PAGE>
TABLE 2
DISTRIBUTION BY APR OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF TOTAL OUTSTANDING PERCENT OF POOL
RATE CONTRACTS CONTRACTS(1) PRINCIPAL BALANCE BALANCE(1)
---- --------- ----------- ----------------- ---------------
<S> <C> <C> <C> <C>
8.750- 9.000% 301 3.04% $ 4,411,917.74 3.85%
9.001-10.000 405 4.09 5,322,164.89 4.65
10.001-11.000 1,017 10.27 13,592,171.26 11.88
11.001-12.000 1,383 13.97 16,682,468.59 14.58
12.001-13.000 2,368 23.92 28,339,194.87 24.76
13.001-14.000 1,886 19.05 20,775,406.12 18.15
14.001-15.000 1,129 11.40 11,612,237.54 10.15
15.001-16.000 489 4.94 4,677,462.30 4.09
16.001-17.000 143 1.44 1,234,627.63 1.08
17.001-18.000 214 2.16 2,079,274.55 1.82
18.001-19.000 80 0.81 963,463.11 0.84
19.001-20.000 275 2.78 2,743,258.66 2.40
20.001-21.000 79 0.80 778,652.97 0.68
21.001-22.000 129 1.30 1,222,520.79 1.07
22.001-23.000 1 0.01 7,057.54 0.01
23.001-23.990% 1 0.01 7,340.28 0.01
----- ------- --------------- ------
Totals: 9,900 100.00% $114,449,218.84 100.00%
</TABLE>
(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 94 0.95% $ 209,442.22 0.18%
13 - 24 438 4.42 1,801,241.02 1.57
25 - 36 358 3.62 2,525,504.11 2.21
37 - 48 623 6.29 5,400,747.15 4.72
49 - 60 2,309 23.32 24,612,330.71 21.51
61 - 72 6,078 61.39 79,899,953.63 69.81
----- ------ --------------- ------
TOTALS: 9,900 100.00% $114,449,218.84 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
15
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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 6 0.06% $ 25,281.28 0.02%
13 - 24 142 1.43 754,666.90 0.66
25 - 36 302 3.05 2,098,586.00 1.83
37 - 48 585 5.91 5,047,559.59 4.41
49 - 60 2,627 26.54 25,323,100.08 22.13
61 - 72 6,238 63.01 81,200,024.99 70.95
----- ------ --------------- ------
TOTALS: 9,900 100.00% $114,449,218.84 100.00%
</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 9 0.09% $ 7,582.83 0.01%
$ 1,000.01 - 2,000.00 91 0.92 147,931.70 0.13
$ 2,000.01 - 3,000.00 188 1.90 483,060.84 0.42
$ 3,000.01 - 4,000.00 250 2.53 883,416.91 0.77
$ 4,000.01 - 5,000.00 387 3.91 1,766,795.97 1.54
$ 5,000.01 - 6,000.00 504 5.09 2,813,175.43 2.46
$ 6,000.01 - 7,000.00 603 6.09 3,929,513.10 3.43
$ 7,000.01 - 8,000.00 606 6.12 4,551,773.05 3.98
$ 8,000.01 - 9,000.00 659 6.66 5,609,377.56 4.90
$ 9,000.01 - 10,000.00 705 7.12 6,718,624.28 5.87
$ 10,000.01 - 11,000.00 570 5.76 5,992,047.60 5.24
$ 11,000.01 - 12,000.00 561 5.67 6,467,960.95 5.65
$ 12,000.01 - 13,000.00 567 5.73 7,097,710.22 6.20
$ 13,000.01 - 14,000.00 656 6.63 8,869,078.24 7.75
$ 14,000.01 - 15,000.00 802 8.10 11,654,114.85 10.18
$ 15,000.01 - 16,000.00 803 8.11 12,448,662.56 10.88
$ 16,000.01 - 17,000.00 655 6.62 10,800,645.55 9.44
$ 17,000.01 - 18,000.00 508 5.13 8,886,695.93 7.76
$ 18,000.01 - 19,000.00 337 3.40 6,221,756.85 5.44
$ 19,000.01 - 20,000.00 203 2.05 3,954,772.52 3.46
$ 20,000.01 - 21,000.00 101 1.02 2,066,842.10 1.81
$ 21,000.01 - 22,000.00 71 0.72 1,522,904.78 1.33
$ 22,000.01 - 23,000.00 27 0.27 605,824.70 0.53
$ 23,000.01 - 24,000.00 13 0.13 306,537.82 0.27
$ 24,000.01 - 25,000.00 8 0.08 197,592.33 0.17
$ 25,000.01 - 26,000.00 6 0.06 152,372.61 0.13
$ 26,000.01 - 27,000.00 3 0.03 80,341.08 0.07
$ 27,000.01 - 28,000.00 2 0.02 55,625.35 0.05
$ 29,000.01 - 30,000.00 1 0.01 29,444.34 0.03
$ 30,000.01 - 31,000.00 1 0.01 30,550.66 0.03
$ 31,000.01 - 32,000.00 2 0.02 62,879.63 0.05
$ 33,000.01 - 34,000.00 1 0.01 33,606.50 0.03
----- ------ --------------- ------
TOTALS: 9,900 100.00% $114,449,218.84 100.00%
</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
(AS OF THE INITIAL CUTOFF DATE)
<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 115 1.16% $ 1,298,819.16 1.13%
ALASKA 30 0.30 348,064.36 0.30
ARIZONA 280 2.83 3,361,150.62 2.94
ARKANSAS 34 0.34 423,628.09 0.37
CALIFORNIA 1,281 12.94 15,155,417.79 13.24
COLORADO 121 1.22 1,507,765.75 1.32
CONNECTICUT 202 2.04 2,099,905.73 1.83
DELAWARE 42 0.42 486,779.27 0.43
DISTRICT OF COLUMBIA 5 0.05 55,199.87 0.05
FLORIDA 819 8.27 9,986,345.44 8.73
GEORGIA 250 2.53 3,126,575.47 2.73
HAWAII 97 0.98 1,121,658.08 0.98
IDAHO 10 0.10 120,156.36 0.10
ILLINOIS 366 3.70 4,140,705.04 3.62
INDIANA 154 1.56 1,720,875.54 1.50
IOWA 67 0.68 821,483.51 0.72
KANSAS 62 0.63 664,614.56 0.58
KENTUCKY 79 0.80 786,454.16 0.69
LOUISANA 108 1.09 1,375,924.33 1.20
MAINE 48 0.48 447,092.00 0.39
MARYLAND 291 2.94 3,418,952.87 2.99
MASSACHUSETTS 233 2.35 2,488,970.86 2.17
MICHIGAN 117 1.18 1,384,032.45 1.21
MINNESOTA 96 0.97 1,072,454.59 0.94
MISSISSIPPI 28 0.28 331,123.49 0.29
MISSOURI 100 1.01 1,010,905.50 0.88
MONTANA 37 0.37 421,558.01 0.37
NEBRASKA 26 0.26 281,967.96 0.25
NEVADA 135 1.36 1,629,552.50 1.42
NEW HAMPSHIRE 130 1.31 1,344,674.58 1.17
NEW JERSEY 374 3.78 3,924,443.06 3.43
NEW MEXICO 84 0.85 1,092,649.17 0.95
</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 332 3.35% $ 3,387,126.19 2.96%
NORTH CAROLINA 395 3.99 4,604,666.82 4.02
NORTH DAKOTA 6 0.06 62,909.13 0.05
OHIO 429 4.33 4,501,073.11 3.93
OKLAHOMA 85 0.86 1,041,463.64 0.91
OREGON 161 1.63 1,963,020.81 1.72
PENNSYLVANIA 624 6.30 6,669,599.11 5.83
RHODE ISLAND 24 0.24 261,685.29 0.23
SOUTH CAROLINA 135 1.36 1,710,558.06 1.49
SOUTH DAKOTA 16 0.16 170,848.57 0.15
TENNESSEE 235 2.37 2,739,719.03 2.39
TEXAS 830 8.38 10,515,015.24 9.19
UTAH 28 0.28 349,937.07 0.31
VERMONT 18 0.18 171,066.40 0.15
VIRGINIA 250 2.53 2,929,743.93 2.56
WASHINGTON 291 2.94 3,499,009.87 3.06
WEST VIRGINIA 34 0.34 418,513.64 0.37
WISCONSIN 172 1.74 1,857,836.33 1.62
WYOMING 14 0.14 145,526.43 0.13
----- ------ --------------- ------
TOTALS: 9,900 100.00% $114,449,218.84 100.00%
</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, MARCH 31, MARCH 31,
1995 1996 1997 1997 1998
------------ ------------ ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NUMBER OF CONTRACTS
AND ASSOCIATED
OUTSTANDING
PRINCIPAL DOLLAR
BALANCES 20,590 $184,054.0 32,574 $303,682.4 45,258 $434,890.7 35,452 $334,396.9 47,751 $457,400.6
PERIOD OF
DELINQUENCY AND
ASSOCIATED
OUTSTANDING
PRINCIPAL
BALANCES(2)/
30-59 DAYS 477 $ 4,043.3 904 $ 8,002.9 1,264 $ 11,454.6 891 $ 7,770.4 923 $ 8,392.4
60-89 DAYS 157 $ 1,298.7 374 $ 3,170.7 559 $ 5,112.1 271 $ 2,300.2 258 $ 2,260.6
90 DAYS OR MORE 140 $ 1,120.2 213 $ 1,880.6 269 $ 2,196.5 127 $ 1,183.1 106 $ 1,020.0
TOTAL NUMBER OF
DELINQUENT CONTRACTS 774 1,491 2,092 1,289 1,287
DELINQUENT CONTRACTS
AS A % OF TOTAL
NUMBER OF CONTRACTS 3.76% 4.58% 4.62% 3.64% 2.70%
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, DECEMBER 31, MARCH 31, MARCH 31,
1995 1996 1997 1997 1998
------------ ------------ ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGGREGATE PRINCIPAL
BALANCE OF
DELINQUENT CONTRACTS $ 6,462.2 $13,054.2 $ 18,763.2 $ 11,253.7 $ 11,673.0
AGGREGATE PRINCIPAL
BALANCE OF
DELINQUENT CONTRACTS
AS A PERCENTAGE OF
THE AGGREGATE
OUTSTANDING
PRINCIPAL BALANCE OF
CONTRACTS 3.51% 4.30% 4.31% 3.37% 2.55%
</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.
22
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<PAGE>
LOAN LOSS/REPOSSESSION EXPERIENCE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
TWELVE TWELVE TWELVE THREE THREE
MONTHS MONTHS MONTHS MONTHS MONTHS
ENDED ENDED ENDED ENDED ENDED
DECEMBER DECEMBER DECEMBER MARCH MARCH
31, 31, 31, 31, 31,
1995 1996 1997 1997 1998
-------- -------- -------- ------ ------
<S> <C> <C> <C> <C> <C>
PRINCIPAL BALANCE OF
ALL CONTRACTS
SERVICED(1) $184,548.7 $304,730.9 $436,771.0 $335,755.2 $459,616.7
CONTRACT
LIQUIDATIONS(2) 0.76% 0.74% 1.42% 1.07% 1.39%
NET LOSSES:
DOLLARS(3) $866.4 $1,639.5 $3,781.1 $741.8 $696.0
PERCENTAGE(4) 0.47% 0.54% 0.87% 0.88% 0.61%
</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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