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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): November 5, 1999
HARLEY-DAVIDSON CREDIT CORP.
(Exact name of registrant as specified in its charter)
Nevada 333-62849 88-0292891
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) 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 1999-3 Harley-Davidson Motorcycle Contract Backed
Securities under Item 7(c).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
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(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.
HARLEY-DAVIDSON CREDIT CORP.
By: /s/ PERRY A. GLASSGOW
---------------------
Perry A. Glassgow
Treasurer
November 5, 1999
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EXHIBIT INDEX
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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 Harley-Davidson Credit
Corp. ("HARLEY CREDIT") and relates to Harley-Davidson Eaglemark Motorcycle
Trust 1999-3. 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Information contained herein is preliminary and will be superseded by the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 212-723-6171.
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Harley-Davidson Eaglemark Motorcycle Trust 1999-3
Harley-Davidson Credit Corp., Seller and Servicer
Eaglemark Customer Funding Corporation-IV, Trust Depositor
Subject to Revision
Term Sheet dated November 5, 1999
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Trust............................. Harley-Davidson Eaglemark Motorcycle
Trust 1999-3 (the "TRUST").
Trust Depositor................... Eaglemark Customer Funding
Corporation-IV, a wholly owned,
limited-purpose subsidiary of
Harley-Davidson Credit Corp. (the "TRUST
DEPOSITOR")
Seller and Servicer or
Seller/Servicer................. Harley-Davidson Credit Corp. ("HARLEY
CREDIT" or the "SELLER" or, in its
capacity as Servicer, the "SERVICER"), a
100% owned subsidiary of Harley-Davidson
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 November 17, 1999
Securities Offered................ The securities offered are as follows:
A. General.............. The Harley-Davidson Eaglemark Motorcycle
Trust 1999-3 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 1999-3 Harley-Davidson Motorcycle
Contract Backed Certificates (the
"CERTIFICATES" and, together with the
Notes, the "SECURITIES") will represent
fractional undivided equity interests in
the Trust.
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these materials. If you did not receive such a disclaimer, please
contact your Salomon Smith Barney Financial Advisor immediately.
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The Trust will issue two Classes of
Notes pursuant to an Indenture to be
dated as of November 1, 1999 (the
"INDENTURE"), between the Trust and the
Indenture Trustee, as follows: (i)
$112,000,000 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) $52,500,000
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 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.
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.
The Trust will issue $10,500,000
aggregate principal amount of [ ]%
Certificates pursuant to a Trust
Agreement to be dated as of November 1,
1999 (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"). Distributions
of interest on the Certificates will be
subordinated to payments of interest on
the Notes to the extent described
herein. Distributions of principal on
the Certificates will be subordinated to
payments of principal 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.
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.
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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 Smith Barney Financial Advisor immediately.
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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
December 15, 1999. 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 February 2004 (the "CLASS
A-1 FINAL DISTRIBUTION DATE") and (ii)
the Class A-2 Notes will be payable on
the Distribution Date occurring in
October 2005 (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 September 2007 (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.
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these materials. If you did not receive such a disclaimer, please
contact your Salomon Smith Barney Financial Advisor immediately.
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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 amount by which the
aggregate principal balance of the
Contracts has declined since the
immediately preceding Distribution Date
and any shortfall of principal payments
due on the Notes from 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 (as
hereinafter defined), 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 (the
"CLASS A-1 NOTEHOLDERS") and Class A-2
Notes (the "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 (as hereinafter defined) 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.
Terms of the Certificates......... The principal terms of the Certificates
will be as described below:
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these materials. If you did not receive such a disclaimer, please
contact your Salomon Smith Barney Financial Advisor immediately.
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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
$10,500,000 (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 of interest on the
Certificates will be subordinated to
payments of interest 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 amount by which the
aggregate principal balance of the
Contracts has declined, allocable to the
Certificates, since the immediately
preceding Distribution Date and any
shortfall of principal payments due on
the Certificates from the immediately
preceding Distribution Date.
Distributions of principal on the
Certificates will be subordinated to
payments of principal on the Notes to
the extent described herein.
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.
Security for the Securities....... The principal security for the
Securities will be as described below:
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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 November 1, 1999
(the "AGREEMENT") among the Trust
Depositor, the Trust, the Indenture
Trustee and Harley Credit (as servicer),
and the Trust will pledge to the
Indenture Trustee, pursuant to the
Indenture, Initial Contracts with an
aggregate principal balance of
$127,443,773.17 as of November 1, 1999
(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 $47,556,226.83, 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, the
District of Columbia and the U.S.
Territories. As of the Initial Cutoff
Date, the annual percentage rate of
interest on the Initial Contracts ranges
from 8.50% to 23.99% with a weighted
average of approximately 13.32%. The
Initial Contracts had a weighted average
term to scheduled maturity, as of
origination, of approximately 70.90
months, and a weighted average term to
scheduled maturity, as of the Initial
Cutoff Date, of approximately 68.11
months. The final scheduled payment on
the Initial Contract with the latest
maturity is due no later than December
2006. No Contract (including any
Subsequent Contract) will have a
scheduled maturity later than March
2007. 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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these materials. If you did not receive such a disclaimer, please
contact your Salomon Smith Barney Financial Advisor immediately.
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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 $637,218.87 (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)
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
amounts received by the Servicer from
the Contracts. The "SUBSEQUENT RESERVE
FUND AMOUNT" will equal the amount on
each Subsequent Transfer Date equal to
0.50% of the aggregate balance of the
Subsequent Contracts conveyed to the
Trust. On each Distribution Date, funds
will be withdrawn from the Reserve Fund
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 greater of (a) 2.50% of
the Principal Balance of the Contracts
in the Trust as of the first day of the
immediately preceding Due Period;
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 6.00% of the
Principal Balance of the Contracts in
the Trust as of the first day of the
immediately preceding Due Period and (b)
1.00% of the aggregate of the Initial
Class A-1 Note Balance, Initial Class
A-2 Note Balance and Initial Certificate
Balance; PROVIDED, HOWEVER, in no event
shall the Specified Reserve Fund Balance
be greater than the aggregate
outstanding principal balance of the
Securities.
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.
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these materials. If you did not receive such a disclaimer, please
contact your Salomon Smith Barney Financial Advisor immediately.
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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
$47,556,226.83 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 February
2000. 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."
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 Interest Reserve 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.
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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 aggregate outstanding
principal balance of the Contracts has
declined to less than 10% of the sum of
(i) the aggregate outstanding principal
balance of the Contracts as of the
Closing Date and (ii) the Pre-Funded
Amount (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 be rated
at least "BBB" by S&P and "Baa1" by
Moody's.
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 amounts
then held in the Collection Account.
</TABLE>
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 Smith Barney Financial Advisor immediately.
-9-
<PAGE>
<TABLE>
<S> <C>
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.
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, through 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.
</TABLE>
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 Smith Barney Financial Advisor immediately.
-10-
<PAGE>
<TABLE>
<S> <C>
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.
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.
</TABLE>
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 Smith Barney Financial Advisor immediately.
-11-
<PAGE>
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 and, (c) with respect to the Initial Contracts, has
its last scheduled payment due no later than December 2006, 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 March 2007. The first scheduled payment date of Contracts representing
approximately 99.01% of the aggregate principal balance of the Initial Contracts
is due no later than December 1999; the first scheduled payment date of
Contracts representing approximately 0.99% of the aggregate principal balance of
the Initial Contracts is due no later than December 2000. The first scheduled
payment date of Contracts representing approximately 99.01% of the aggregate
principal balance of the Subsequent Contracts will be due no later than March
2000; the first scheduled payment date of Contracts representing approximately
0.99% of the aggregate principal balance of the Subsequent Contracts will be due
no later than March 2001. 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 61.85% 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
38.15% 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
23.99% per annum and the weighted average contractual rate of interest of the
Initial Contracts as of the Initial Cutoff Date is approximately 13.32% per
annum (see Table 2 below). Harley Credit 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 84 months and
original maturities of at least 12 months but not more than 84 months. The
Initial Contracts had a weighted average term to scheduled maturity, as of
origination, of approximately 70.90 months, and a weighted average term to
scheduled maturity as of the Initial Cutoff Date of approximately 68.11 months
(see Tables 3 and 4 below). The average principal balance per Initial Contract
as of the Initial Cutoff Date was approximately $11,876.23 and the principal
balances on the Initial Contracts as of the Initial Cutoff Date ranged from
$716.54 to $33,764.16 (see Table 5 below). The Contracts arise (or will arise)
from loans to Obligors located in 50 states, the District of Columbia and the
U.S. Territories 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:
12.32% in California, 9.38% in Texas and 8.33% in Florida (see Table 6 below).
No other state represented more than 5.00% by aggregate principal balance 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.
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 Smith Barney Financial Advisor immediately.
-12-
<PAGE>
TABLE 1
COMPOSITION OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<S> <C>
Aggregate Principal Balance......................................... $127,443,773.17
Number of Contracts................................................. 10,731
Average Principal Balance........................................... $11,876.23
Weighted Average Annual Percentage
Rate ("APR")................................................... 13.32%
(Range)........................................................ 8.50% - 23.99%
Weighted Average Original Term (in months).......................... 70.90
(Range)........................................................ 12 - 84
Weighted Average Calculated Remaining Term (in months).............. 68.11
(Range)........................................................ 6 - 84
</TABLE>
TABLE 2
DISTRIBUTION BY APR OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
PERCENT OF NUMBER TOTAL OUTSTANDING PRINCIPAL PERCENT OF POOL
RATE NUMBER OF CONTRACTS OF CONTRACTS(1) BALANCE BALANCE(1)
---- ------------------- ----------------- --------------------------- ---------------
<S> <C> <C> <C> <C>
8.500- 9.000% 76 0.71% $731,121.20 0.57%
9.001-10.000 268 2.50 3,136,116.78 2.48
10.001-11.000 979 9.12 12,496,388.19 9.81
11.001-12.000 1,915 17.85 23,964,238.89 18.80
12.001-13.000 2,714 25.29 32,980,808.52 25.88
13.001-14.000 2,629 24.50 30,760,734.09 24.14
14.001-15.000 907 8.45 9,814,898.12 7.70
15.001-16.000 421 3.92 4,256,727.62 3.34
16.001-17.000 106 0.99 1,023,063.13 0.80
17.001-18.000 265 2.47 3,102,936.27 2.43
18.001-19.000 28 0.26 380,505.61 0.30
19.001-20.000 203 1.89 2,356,831.11 1.85
20.001-21.000 70 0.65 783,799.87 0.62
21.001-22.000 147 1.37 1,598,017.99 1.25
22.001-23.000 2 0.02 24,367.54 0.02
23.001-23.990 1 0.01 6,218.24 0.00
------------------- ----------------- --------------------------- ---------------
Totals: 10,731 100.00% $127,443,773.17 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
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 Smith Barney Financial Advisor immediately.
-13-
<PAGE>
TABLE 3
DISTRIBUTION BY CALCULATED REMAINING TERM
OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
CALCULATED PERCENT OF
REMAINING NUMBER NUMBER OF TOTAL OUTSTANDING PERCENT OF POOL
TERM (MONTHS) OF CONTRACTS CONTRACTS (1) PRINCIPAL BALANCE BALANCE (1)
------------- ------------ ------------- ----------------- -----------
<S> <C> <C> <C> <C>
6 - 12 317 2.95% $795,641.20 0.62%
13 - 24 545 5.08 2,643,863.56 2.07
25 - 36 400 3.73 2,829,414.60 2.22
37 - 48 434 4.04 3,903,910.42 3.06
49 - 60 1,684 15.69 17,487,582.50 13.72
61 - 72 6,116 56.99 77,323,866.23 60.67
73 - 84 1,235 11.51 22,459,494.66 17.62
----- ----- ------------- -----
TOTALS: 10,731 100.00% $127,443,773.17 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
TABLE 4
DISTRIBUTION BY CALCULATED ORIGINAL TERM
TO MATURITY OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
PERCENT OF
ORIGINAL NUMBER OF NUMBER OF TOTAL OUTSTANDING PERCENT OF POOL
TERM (MONTHS) CONTRACTS CONTRACTS (1) PRINCIPAL BALANCE BALANCE (1)
------------- --------- ------------- ----------------- ---------------
<S> <C> <C> <C> <C>
0 - 12 9 0.08% $58,048.57 0.05%
13 - 24 110 1.03 573,027.73 0.45
25 - 36 258 2.40 1,902,475.90 1.49
37 - 48 419 3.90 3,758,469.22 2.95
49 - 60 2,032 18.94 18,229,431.05 14.30
61 - 72 6,661 62.07 80,368,389.16 63.06
73 - 84 1,242 11.57 22,553,931.54 17.70
--------- ------------- ----------------- ---------------
TOTALS: 10,731 100.00% $127,443,773.17 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
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 Smith Barney Financial Advisor immediately.
-14-
<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>
$ 716.54 - 1,000.00 10 0.09% $8,628.37 0.01%
$ 1,000.01 - 2,000.00 130 1.21 208,780.62 0.16
$ 2,000.01 - 3,000.00 247 2.30 622,978.46 0.49
$ 3,000.01 - 4,000.00 277 2.58 971,617.08 0.76
$ 4,000.01 - 5,000.00 311 2.90 1,414,250.22 1.11
$ 5,000.01 - 6,000.00 479 4.46 2,657,222.01 2.09
$ 6,000.01 - 7,000.00 696 6.49 4,556,108.82 3.57
$ 7,000.01 - 8,000.00 725 6.76 5,460,735.37 4.28
$ 8,000.01 - 9,000.00 715 6.66 6,093,672.52 4.78
$ 9,000.01 - 10,000.00 716 6.67 6,815,107.52 5.35
$ 10,000.01 - 11,000.00 548 5.11 5,755,029.71 4.52
$ 11,000.01 - 12,000.00 567 5.28 6,514,723.88 5.11
$ 12,000.01 - 13,000.00 580 5.40 7,257,446.09 5.69
$ 13,000.01 - 14,000.00 614 5.72 8,298,389.44 6.51
$ 14,000.01 - 15,000.00 751 7.00 10,902,714.18 8.55
$ 15,000.01 - 16,000.00 758 7.06 11,758,603.09 9.23
$ 16,000.01 - 17,000.00 727 6.77 11,994,246.56 9.41
$ 17,000.01 - 18,000.00 605 5.64 10,590,157.24 8.31
$ 18,000.01 - 19,000.00 471 4.39 8,710,673.31 6.83
$ 19,000.01 - 20,000.00 318 2.96 6,186,515.73 4.85
$ 20,000.01 - 21,000.00 189 1.76 3,869,568.96 3.04
$ 21,000.01 - 22,000.00 134 1.25 2,874,818.77 2.26
$ 22,000.01 - 23,000.00 68 0.63 1,527,085.11 1.20
$ 23,000.01 - 24,000.00 28 0.26 657,015.37 0.52
$ 24,000.01 - 25,000.00 33 0.31 807,870.31 0.63
$ 25,000.01 - 26,000.00 13 0.12 330,277.97 0.26
$ 26,000.01 - 27,000.00 8 0.07 211,329.60 0.17
$ 27,000.01 - 28,000.00 3 0.03 82,662.70 0.06
$ 28,000.01 - 29,000.00 2 0.02 56,255.21 0.04
$ 29,000.01 - 30,000.00 2 0.02 59,324.49 0.05
$ 30,000.01 - 31,000.00 3 0.03 91,793.47 0.07
$ 31,000.01 - 32,000.00 1 0.01 31,436.42 0.02
$ 32,000.01 - 33,000.00 1 0.01 32,970.41 0.03
$ 33,000.01 - 33,764.16 1 0.01 33,764.16 0.03
--------- ------------- ----------------- -----------
TOTALS: 10,731 100.00% $127,443,773.17 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
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 Smith Barney Financial Advisor immediately.
-15-
<PAGE>
TABLE 6
GEOGRAPHIC DISTRIBUTION OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF TOTAL OUTSTANDING PERCENT OF POOL
STATE CONTRACTS CONTRACTS (1) PRINCIPAL BALANCE BALANCE (1)
----- --------- ------------- ------------------ ---------------
<S> <C> <C> <C> <C>
ALABAMA 154 1.44% $1,924,060.50 1.51%
ALASKA 22 0.21 237,210.14 0.19
ARIZONA 339 3.16 4,500,561.55 3.53
ARKANSAS 51 0.48 591,641.93 0.46
CALIFORNIA 1,320 12.30 15,698,767.86 12.32
COLORADO 206 1.92 2,552,705.47 2.00
CONNECTICUT 186 1.73 1,922,738.16 1.51
DELAWARE 58 0.54 670,791.11 0.53
DISTRICT OF COLUMBIA 11 0.10 128,405.56 0.10
FLORIDA 816 7.60 10,620,026.01 8.33
GEORGIA 354 3.30 4,754,203.54 3.73
HAWAII 78 0.73 867,753.48 0.68
IDAHO 17 0.16 189,659.13 0.15
ILLINOIS 373 3.48 4,348,497.54 3.41
INDIANA 230 2.14 2,725,860.19 2.14
IOWA 78 0.73 875,664.25 0.69
KANSAS 82 0.76 1,041,196.64 0.82
KENTUCKY 99 0.92 1,167,992.83 0.92
LOUISANA 115 1.07 1,427,826.38 1.12
MAINE 33 0.31 361,367.84 0.28
MARYLAND 245 2.28 2,771,330.02 2.17
MASSACHUSETTS 192 1.79 2,039,501.33 1.60
MICHIGAN 183 1.71 2,290,366.78 1.80
MINNESOTA 80 0.75 882,068.38 0.69
MISSISSIPPI 31 0.29 400,780.84 0.31
MISSOURI 149 1.39 1,787,266.45 1.40
MONTANA 19 0.18 235,908.28 0.19
NEBRASKA 42 0.39 454,789.56 0.36
NEVADA 184 1.71 2,401,866.71 1.88
NEW HAMPSHIRE 108 1.01 1,123,086.75 0.88
NEW JERSEY 364 3.39 4,071,263.08 3.19
NEW MEXICO 128 1.19 1,581,342.22 1.24
NEW YORK 363 3.38 4,062,226.29 3.19
NORTH CAROLINA 407 3.79 4,776,002.95 3.75
NORTH DAKOTA 6 0.06 49,282.54 0.04
OHIO 452 4.21 4,863,007.07 3.82
OKLAHOMA 104 0.97 1,175,554.33 0.92
OREGON 148 1.38 1,654,645.22 1.30
PENNSYLVANIA 577 5.38 5,946,600.89 4.67
</TABLE>
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 Smith Barney Financial Advisor immediately.
-16-
<PAGE>
TABLE 6
GEOGRAPHIC DISTRIBUTION OF THE INITIAL CONTRACTS
(CONTINUED)
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF TOTAL OUTSTANDING PERCENT OF POOL
STATE CONTRACTS CONTRACTS (1) PRINCIPAL BALANCE BALANCE (1)
----- --------- ------------- ------------------ ---------------
<S> <C> <C> <C> <C>
RHODE ISLAND 16 0.15 182,339.32 0.14
SOUTH CAROLINA 205 1.91 2,578,287.45 2.02
SOUTH DAKOTA 36 0.34 379,632.40 0.30
TENNESSEE 253 2.36 3,125,876.46 2.45
TEXAS 954 8.89 11,959,303.01 9.38
UTAH 31 0.29 349,443.32 0.27
VERMONT 15 0.14 175,715.84 0.14
VIRGINIA 287 2.67 3,390,926.55 2.66
WASHINGTON 246 2.29 2,879,930.32 2.26
WEST VIRGINIA 47 0.44 562,148.80 0.44
WISCONSIN 190 1.77 2,218,088.37 1.74
WYOMING 19 0.18 190,252.78 0.15
OTHER 28 0.26 278,008.75 0.22
--------- ------------- ------------------ ---------------
TOTALS: 10,731 100.00% $127,443,773.17 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
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 Smith Barney Financial Advisor immediately.
-17-
<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.
DELINQUENCY EXPERIENCE(1)/
---
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
At December 31,
-------------------------------------------------------------------------
1998 1997 1996
----- ----- ----
Number Number Number
of of of
Contracts Amount Contracts Amount Contracts Amount
--------- ---------- --------- ------ --------- ------
<S> <C> <C> <C> <C> <C> <C>
Portfolio................... 67,137 $651,248.7 45,258 $434,890.7 32,574 $303,682.4
Period of Delinquency(2)/
---
30-59 Days 1,970 $17,768.1 1,264 $11,454.6 904 $8,002.9
60-89 Days.............. 745 6,153.9 559 5,112.1 374 3,170.7
90 Days or more......... 304 2,591.0 269 2,196.5 213 1,880.6
------ ---------- ------ ---------- --------- ----------
Total Delinquencies......... 3,019 $26,513.0 2,092 $18,763.2 1,491 $13,054.2
====== ========== ====== ========== ========= ==========
Total Delinquencies as a
Percent of Total
Portfolio................... 4.50% 4.07% 4.62% 4.31% 4.58% 4.30%
</TABLE>
<TABLE>
<CAPTION>
At September 30,
-----------------------------------------------------------
1999 1998
----- ----
Number Number
of of
Contracts Amount Contracts Amount
--------- ------ --------- ------
<S> <C> <C> <C> <C>
Portfolio................... 86,998 $871,024.6 56,434 $553,838.3
Period of Delinquency(2)/
---
30-59 Days.............. 2,190 $21,222.3 1,295 $11,679.5
60-89 Days.............. 678 6,423.3 318 2,935.1
90 Days or more......... 248 2,294.2 99 853.9
------ ---------- ------ ----------
Total Delinquencies......... 3,116 $29,398.8 1,712 $15,468.5
====== ========== ====== ==========
Total Delinquencies as a
Percent of Total
Portfolio................... 3.58% 3.43% 3.03% 2.79%
</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.
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 Smith Barney Financial Advisor immediately.
-18-
<PAGE>
LOAN LOSS/REPOSSESSION EXPERIENCE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended
December 31,
-------------------------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Principal Balance of All Contracts
Serviced(1)/.................... $653,836.0 $436,771.0 $304,730.9
---
Contract Liquidations(2)/........... 1.54% 1.42% 0.74%
---
Net Losses:
Dollars(3)/..................... $5,245.3 $3,781.1 $1,639.5
---
Percentage(4)/.................. 0.80% 0.87% 0.54%
---
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-----------------------------------------------------
1999 1998
---- ----
<S> <C> <C>
Principal Balance of All Contracts
Serviced(1)/..................... $873,860.6 $555,597.4
---
Contract Liquidations(2)/............ 1.50% 1.47%
---
Net Losses:
Dollars(3)/...................... $3,894.7 $2,770.0
---
Percentage(4)/................... 0.59% 0.66%
---
</TABLE>
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(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.
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 Smith Barney Financial Advisor immediately.
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