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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): July 19, 1999
EAGLEMARK, INC.
(Exact name of registrant as specified in its charter)
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Nevada 333-62849 88-0292891
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification Number)
incorporation)
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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 1999-2 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/ Perry A. Glassgow
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Perry A. Glassgow
Treasurer
July 19, 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 Eaglemark, Inc. ("EAGLEMARK")
and relates to Harley-Davidson Eaglemark Motorcycle Trust 1999-2. 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contained herein is preliminary and will be superseded by the applicable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 1999-2
Eaglemark, Inc., Seller and Servicer
Eaglemark Customer Funding Corporation-IV, Trust Depositor
Subject to Revision
Term Sheet dated July 19, 1999
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Trust............................. Harley-Davidson Eaglemark Motorcycle Trust 1999-2 (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 July 28, 1999
Securities Offered................ The securities offered are as follows:
A. General.............. The Harley-Davidson Eaglemark Motorcycle Trust 1999-2 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
1999-2 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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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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The Trust will issue two Classes of Notes pursuant to an Indenture to be
dated as of July 1, 1999 (the "INDENTURE"), between the Trust and
the Indenture Trustee, as follows: (i) $133,000,000 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) $59,700,000 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 $12,300,000 aggregate principal amount of [ ]%
Certificates pursuant to a Trust Agreement to be dated as of July
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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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 August 16, 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 October 2003 (the "CLASS A-1 FINAL
DISTRIBUTION DATE") and (ii) the Class A-2 Notes will be payable
on the Distribution Date occurring in May 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 December 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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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 ("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.
Terms of the Certificates......... The principal terms of the Certificates will be as described below:
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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 $12,300,000 (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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materials. If you did not receive such a disclaimer, please contact your
Salomon Smith Barney Financial Advisor immediately.
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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
July 1, 1999 (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 $153,744,301.60 as of July 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 $51,255,698.40, 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 22.99% with a weighted
average of approximately 13.33%. The Initial Contracts had a
weighted average term to scheduled maturity, as of origination, of
approximately 70.77 months, and a weighted average term to
scheduled maturity, as of the Initial Cutoff Date, of
approximately 69.15 months. The final scheduled payment on the
Initial Contract with the latest maturity is due no later than
January 2007. No Contract (including any Subsequent Contract)
will have a scheduled maturity later than April 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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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 $768,721.51 (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 Available Monies (as defined
herein). 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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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 $51,255,698.40 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 October 1999. 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.
</TABLE>
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materials. If you did not receive such a disclaimer, please contact your
Salomon Smith Barney Financial Advisor immediately.
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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 each be rated at least
"BBB" by S&P and "Baa2" 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 Available Monies (as hereinafter defined)
then held in the Collection Account.
</TABLE>
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materials. If you did not receive such a disclaimer, please contact your
Salomon Smith Barney Financial Advisor immediately.
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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.
-11-
<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.
-12-
<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 January 2007, 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
April 2007. The first scheduled payment date of Contracts representing
approximately 99.30% of the aggregate principal balance of the Contracts
(including any Subsequent Contracts) is due no later than August 1999; the first
scheduled payment date of Contracts representing approximately 0.70% of the
aggregate principal balance of the Contracts (including any Subsequent
Contracts) is due no later than August 2000. 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 65.35% 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 34.65% is attributable to loans to purchase
Motorcycles which were used at the time the related Contract was originated.
All Initial Contracts have a contractual rate of interest of at least 8.50% per
annum and not more than 22.99% per annum and the weighted average contractual
rate of interest of the Initial Contracts as of the Initial Cutoff Date is
approximately 13.33% 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 7 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 70.77 months, and a weighted
average term to scheduled maturity as of the Initial Cutoff Date of
approximately 69.15 months (see Tables 3 and 4 below). The average principal
balance per Initial Contract as of the Initial Cutoff Date was approximately
$12,325.18 and the principal balances on the Initial Contracts as of the Initial
Cutoff Date ranged from $1,217.49 to $34,269.38 (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: 11.72% in California, 8.44% in Texas, 6.95% in Florida
and 5.22% in Pennsylvania (see Table 6 below). No other state represented more
than 5.00% 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.
-13-
<PAGE>
TABLE 1
COMPOSITION OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<S> <C>
Aggregate Principal Balance................................................................. $153,744,301.60
Number of Contracts......................................................................... 12,474
Average Principal Balance................................................................... $12,325.18
Weighted Average Annual Percentage
Rate ("APR")........................................................................... 13.33%
(Range)................................................................................ 8.50% - 22.99%
Weighted Average Original Term (in months).................................................. 70.77
(Range)................................................................................ 12-84
Weighted Average Calculated Remaining Term (in months)...................................... 69.15
(Range)................................................................................ 7-84
</TABLE>
TABLE 2
DISTRIBUTION BY APR OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NUMBER OF NUMBER OF TOTAL OUTSTANDING POOL
RATE CONTRACTS CONTRACTS(1) PRINCIPAL BALANCE BALANCE(1)
---- --------- ------------ ----------------- -----------
<S> <C> <C> <C> <C>
8.500- 9.000% 33 0.26% $394,780.06 0.26%
9.001-10.000 320 2.57 3,993,649.78 2.60
10.001-11.000 1,289 10.33 17,468,534.38 11.36
11.001-12.000 2,130 17.08 27,819,417.86 18.09
12.001-13.000 3,142 25.19 38,835,080.56 25.26
13.001-14.000 3,049 24.44 37,433,896.96 24.35
14.001-15.000 1,047 8.39 11,794,858.23 7.67
15.001-16.000 310 2.49 3,055,574.23 1.99
16.001-17.000 104 0.83 1,097,060.31 0.71
17.001-18.000 360 2.89 4,242,820.40 2.76
18.001-19.000 30 0.24 390,812.55 0.25
19.001-20.000 308 2.47 3,469,966.30 2.26
20.001-21.000 119 0.95 1,222,795.69 0.80
21.001-22.000 231 1.85 2,500,003.00 1.63
22.001-22.990 2 0.02 25,051.29 0.02
------ ------ --------------- ------
Totals: 12,474 100.00% $153,744,301.60 100.00%
</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 3
DISTRIBUTION BY CALCULATED REMAINING TERM
OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
CALCULATED REMAINING PERCENT OF NUMBER TOTAL OUTSTANDING PERCENT OF
TERM (MONTHS) NUMBER OF CONTRACTS OF CONTRACTS (1) PRINCIPAL BALANCE POOL BALANCE (1)
-------------------- ------------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C>
7 - 12 21 0.17% $68,621.59 0.04%
13 - 24 142 1.14 757,153.63 0.49
25 - 36 341 2.73 2,447,084.84 1.59
37 - 48 601 4.82 5,310,654.45 3.45
49 - 60 2,391 19.17 25,095,625.91 16.32
61 - 72 7,356 58.97 91,279,985.58 59.37
73 - 84 1,622 13.00 28,785,175.60 18.72
------ ------ --------------- ------
TOTALS: 12,474 100.00% $153,744,301.60 100.00%
</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 4
DISTRIBUTION BY 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 3 0.02% $24,619.44 0.02%
13 - 24 110 0.88 614,706.38 0.40
25 - 36 304 2.44 2,239,371.28 1.46
37 - 48 579 4.64 5,059,191.27 3.29
49 - 60 2,404 19.27 24,994,780.46 16.26
61 - 72 7,427 59.54 91,733,500.83 59.67
73 - 84 1,647 13.20 29,078,131.94 18.91
------ ------ --------------- ------
TOTALS: 12,474 100.00% $153,744,301.60 100.00%
</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.
-16-
<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>
$ 1,217.49 - 2,000.00 26 0.21% $45,962.06 0.03%
$ 2,000.01 - 3,000.00 79 0.63 200,057.30 0.13
$ 3,000.01 - 4,000.00 123 0.99 436,669.37 0.28
$ 4,000.01 - 5,000.00 257 2.06 1,171,242.73 0.76
$ 5,000.01 - 6,000.00 463 3.71 2,576,858.90 1.68
$ 6,000.01 - 7,000.00 738 5.92 4,827,134.76 3.14
$ 7,000.01 - 8,000.00 904 7.25 6,797,390.88 4.42
$ 8,000.01 - 9,000.00 972 7.79 8,292,669.75 5.39
$ 9,000.01 - 10,000.00 938 7.52 8,923,519.61 5.80
$ 10,000.01 - 11,000.00 792 6.35 8,315,686.55 5.41
$ 11,000.01 - 12,000.00 689 5.52 7,931,472.22 5.16
$ 12,000.01 - 13,000.00 727 5.83 9,090,755.07 5.91
$ 13,000.01 - 14,000.00 777 6.23 10,522,165.12 6.84
$ 14,000.01 - 15,000.00 947 7.59 13,767,347.94 8.95
$ 15,000.01 - 16,000.00 1,022 8.19 15,857,230.77 10.31
$ 16,000.01 - 17,000.00 1,022 8.19 16,869,189.64 10.97
$ 17,000.01 - 18,000.00 694 5.56 12,139,089.06 7.90
$ 18,000.01 - 19,000.00 518 4.15 9,572,656.91 6.23
$ 19,000.01 - 20,000.00 330 2.65 6,431,593.05 4.18
$ 20,000.01 - 21,000.00 199 1.60 4,074,453.47 2.65
$ 21,000.01 - 22,000.00 107 0.86 2,299,067.27 1.50
$ 22,000.01 - 23,000.00 61 0.49 1,369,812.82 0.89
$ 23,000.01 - 24,000.00 36 0.29 841,145.89 0.55
$ 24,000.01 - 25,000.00 15 0.12 367,812.63 0.24
$ 25,000.01 - 26,000.00 12 0.10 305,110.14 0.20
$ 26,000.01 - 27,000.00 13 0.10 343,679.38 0.22
$ 27,000.01 - 28,000.00 7 0.06 192,459.87 0.13
$ 28,000.01 - 29,000.00 1 0.01 28,722.04 0.02
$ 29,000.01 - 30,000.00 3 0.02 88,919.12 0.06
$ 30,000.01 - 31,000.00 1 0.01 30,157.90 0.02
$ 34,000.01 - 34,269.38 1 0.01 34,269.38 0.02
------ ------ --------------- ------
TOTALS: 12,474 100.00% $153,744,301.60 100.00%
</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>
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 134 1.07% $1,829,216.99 1.19%
ALASKA 31 0.25 360,381.96 0.23
ARIZONA 288 2.31 3,925,732.91 2.55
ARKANSAS 57 0.46 693,078.22 0.45
CALIFORNIA 1,444 11.58 18,023,822.50 11.72
COLORADO 286 2.29 3,844,942.82 2.50
CONNECTICUT 299 2.40 3,420,097.26 2.22
DELAWARE 77 0.62 901,529.68 0.59
DISTRICT OF COLUMBIA 5 0.04 54,193.59 0.04
FLORIDA 829 6.65 10,683,404.41 6.95
GEORGIA 266 2.13 3,612,040.12 2.35
HAWAII 79 0.63 922,992.08 0.60
IDAHO 25 0.20 278,729.38 0.18
ILLINOIS 458 3.67 5,544,516.75 3.61
INDIANA 236 1.89 2,983,482.98 1.94
IOWA 85 0.68 1,119,573.62 0.73
KANSAS 92 0.74 1,127,344.89 0.73
KENTUCKY 142 1.14 1,636,546.59 1.06
LOUISANA 118 0.95 1,491,421.36 0.97
MAINE 61 0.49 705,904.66 0.46
MARYLAND 295 2.36 3,551,609.04 2.31
MASSACHUSETTS 322 2.58 3,515,697.86 2.29
MICHIGAN 221 1.77 3,002,003.89 1.95
MINNESOTA 121 0.97 1,396,403.85 0.91
MISSISSIPPI 45 0.36 600,269.07 0.39
MISSOURI 168 1.35 1,953,695.23 1.27
MONTANA 19 0.15 223,491.67 0.15
NEBRASKA 42 0.34 465,811.00 0.30
NEVADA 210 1.68 2,814,907.88 1.83
NEW HAMPSHIRE 186 1.49 1,979,763.03 1.29
NEW JERSEY 450 3.61 5,179,429.23 3.37
NEW MEXICO 131 1.05 1,851,528.43 1.20
NEW YORK 556 4.46 6,060,540.95 3.94
NORTH CAROLINA 444 3.56 5,646,836.02 3.67
NORTH DAKOTA 6 0.05 61,812.77 0.04
OHIO 500 4.01 5,812,865.75 3.78
OKLAHOMA 130 1.04 1,617,573.93 1.05
OREGON 180 1.44 2,155,754.89 1.40
PENNSYLVANIA 729 5.84 8,024,099.22 5.22
RHODE ISLAND 40 0.32 410,701.91 0.27
SOUTH CAROLINA 209 1.68 2,615,164.67 1.70
</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.
-18-
<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>
SOUTH DAKOTA 37 0.30 373,613.22 0.24
TENNESSEE 275 2.20 3,611,394.55 2.35
TEXAS 956 7.66 12,971,658.04 8.44
UTAH 41 0.33 484,616.54 0.32
VERMONT 32 0.26 342,642.77 0.22
VIRGINIA 377 3.02 4,475,530.93 2.91
WASHINGTON 333 2.67 4,490,013.08 2.92
WEST VIRGINIA 56 0.45 665,250.22 0.43
WISCONSIN 312 2.50 3,756,915.57 2.44
WYOMING 26 0.21 324,206.56 0.21
OTHER 13 0.10 149,547.06 0.10
------ ------ --------------- ------
TOTALS: 12,474 100.00% $153,744,301.60 100.00%
</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.
-19-
<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 1995
---- ---- ---- ----
Number Number Number Number
of of of of
Contracts Amount Contracts Amount Contracts Amount Contracts Amount
--------- ------ --------- ------ --------- ------ --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio................... 67,137 $651,248.7 45,258 $434,890.7 32,574 $303,682.4 20,590 $184,054.0
Period of Delinquency(2)/
30-59 Days.............. 1,970 $17,768.1 1,264 $11,454.6 904 $8,002.9 477 $4,043.3
60-89 Days.............. 745 6,153.9 559 5,112.1 374 3,170.7 157 1,298.7
90 Days or more......... 304 2,591.0 269 2,196.5 213 1,880.6 140 1,120.2
----- --------- ------ --------- ----- --------- --- --------
Total Delinquencies......... 3,019 $26,513.0 2,092 $18,763.2 1,491 $13,054.2 774 $6,462.2
----- --------- ------ --------- ----- --------- --- --------
----- --------- ------ --------- ----- --------- --- --------
Total Delinquencies as a
Percent of Total Portfolio.. 4.50% 4.07% 4.62% 4.31% 4.58% 4.30% 3.76% 3.51%
</TABLE>
<TABLE>
<CAPTION>
At June 30,
----------------------------------------------------------
1999 1998
---- ----
Number Number
of of
Contracts Amount Contracts Amount
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Portfolio...................... 80,843 $807,205.6 52,546 $511,856.8
Period of Delinquency(2)/
30-59 Days................. 1,989 $18,509.5 999 $9,256.7
60-89 Days................. 602 5,535.2 254 2,247.1
90 Days or more............ 183 1,615.3 72 661.2
----- --------- ----- ---------
Total Delinquencies............ 2,774 $25,660.0 1,325 $12,165.0
----- --------- ----- ---------
----- --------- ----- ---------
Total Delinquencies as a
Percent of Total Portfolio..... 3.43% 3.18% 2.52% 2.38%
</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.
-20-
<PAGE>
LOAN LOSS/REPOSSESSION EXPERIENCE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended
December 31,
-------------------------------------------------------------
1998 1997 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Principal Balance of All Contracts
Serviced(1)/.................... $653,836.0 $436,771.0 $304,730.9 $184,548.7
Contract Liquidations(2)/........... 1.54% 1.42% 0.74% 0.76%
Net Losses:
Dollars(3)/..................... $5,245.3 $3,781.1 $1,639.5 $866.4
Percentage(4)/.................. 0.80% 0.87% 0.54% 0.47%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------------------------------------------------------------
1999 1998
---- ----'
<S> <C> <C>
Principal Balance of All Contracts
Serviced(1)/..................... $809,208.7 $513,828.0
Contract Liquidations(2)/............ 1.62% 1.43%
Net Losses:
Dollars(3)/...................... $2,726.0 $1,748.1
Percentage(4)/................... 0.67% 0.68%
</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.
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.
-21-
