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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): April 14, 2000
HARLEY-DAVIDSON CREDIT CORP.
(Exact name of registrant as specified in its charter)
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Nevada 333-62849 88-0292891
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification Number)
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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 2000-1 Harley-Davidson Motorcycle Contract Backed
Securities under Item 7(c).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements: None
(b) Pro Forma Financial Information: None
(c) Exhibits:
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EXHIBIT NO. DOCUMENT
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20 Term Sheet
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HARLEY-DAVIDSON CREDIT CORP.
By: /s/ Perry A. Glassgow
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Perry A. Glassgow
Treasurer
April 14, 2000
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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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Exhibit 20
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 2000-1. Neither Salomon Smith Barney nor any of its affiliates makes any
representation as to the accuracy or completeness of the Information herein. The
Information contained herein is preliminary and will be superseded by the
applicable prospectus supplement and by any other information subsequently filed
with the Securities and Exchange Commission.
The Information contained herein will be superseded by the description
of the collateral pool contained in the prospectus supplement relating to the
securities.
The Information addresses only certain aspects of the applicable
security's characteristics and thus does not provide a complete assessment. As
such, the Information may not reflect the impact of all structural
characteristics of the security. The assumptions underlying the Information,
including structure and collateral, may be modified from time to time to reflect
changed circumstances.
Although a registration statement (including the prospectus) relating
to the securities discussed in this communication has been filed with the
Securities and Exchange Commission and is effective, the final prospectus
supplement relating to the securities discussed in this communication has not
been filed with the Securities and Exchange Commission. This communication shall
not constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of the securities discussed in this communication in any state
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state.
Prospective purchasers are referred to the final prospectus and prospectus
supplement relating to the securities discussed in this communication for
definitive Information on any matter discussed in this communication. Any
investment decision should be based only on the data in the prospectus and the
prospectus supplement ("OFFERING DOCUMENTS") and the then current version of the
Information. Offering Documents contain data that is current as of their
publication dates and after publication may no longer be complete or current. A
final prospectus and prospectus supplement may be obtained by contacting the
Salomon Smith Barney Syndicate Desk at 212-723-6171.
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Harley-Davidson Eaglemark Motorcycle Trust 2000-1
Harley-Davidson Credit Corp., Seller and Servicer
Eaglemark Customer Funding Corporation-IV, Trust Depositor
Subject to Revision
Term Sheet dated April 13, 2000
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Trust ............................... Harley-Davidson Eaglemark Motorcycle Trust 2000-1 (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 ................... Bank One, NA, a national banking corporation (in such capacity, the "INDENTURE TRUSTEE").
The Indenture Trustee will also act as Paying Agent under the Indenture and the Trust
Agreement.
Closing Date ........................ On or about April 26, 2000
Securities Offered .................. The securities offered are as follows:
A. General ..................... The Harley-Davidson Eaglemark Motorcycle Trust 2000-1 Harley-Davidson Motorcycle Contract
Backed Notes (the "NOTES") will represent indebtedness of the Trust secured by the
assets of the Trust (other than certain bank accounts associated with the
Certificates). The Harley-Davidson Eaglemark Motorcycle Trust 2000-1 Harley-Davidson
Motorcycle Contract Backed Certificates (the "CERTIFICATES" and, together with the
Notes, the "SECURITIES") will represent fractional undivided equity interests in the
Trust.
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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 Trust will issue two Classes of Notes pursuant to an Indenture to be dated as of
April 1, 2000 (the "INDENTURE"), between the Trust and the Indenture Trustee, as
follows: (i) $182,000,000 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) $85,900,000 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 $17,100,000 aggregate principal amount of [ ]% Certificates pursuant
to a Trust Agreement to be dated as of April 1, 2000 (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 May 15, 2000. 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 August
2004 (the "CLASS A-1 FINAL DISTRIBUTION DATE") and (ii) the Class A-2 Notes will be
payable on the Distribution Date occurring in March 2006 (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 February 2008 (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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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. 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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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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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 $17,100,000 (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 April 1, 2000 (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 $214,471,329.09
as of April 11, 2000 (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 $70,528,670.91, 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 13.66%. The Initial Contracts had a weighted average term to
scheduled maturity, as of origination, of approximately 71.48 months, and a weighted
average term to scheduled maturity, as of the Initial Cutoff Date, of approximately
69.41 months. The final scheduled payment on the Initial Contract with the latest
maturity is due no later than April 2007. No Contract (including any Subsequent
Contract) will have a scheduled maturity later than July 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
$1,072,356.65 (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.
</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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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 $70,528,670.91 and, during the
Funding Period, will be reduced by the amount thereof that the Trust uses to purchase
Subsequent Contracts from the Trust Depositor and contemporaneously therewith from the
Seller by the Trust Depositor. The Trust Depositor expects that the Pre-Funded Amount
will be reduced to less than $150,000 by the Distribution Date occurring in July 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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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 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.
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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.
- 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 April 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
July 2007. The first scheduled payment date of Contracts representing
approximately 99.31% of the aggregate principal balance of the Initial Contracts
is due no later than May 2000; the first scheduled payment date of Contracts
representing approximately 0.69% of the aggregate principal balance of the
Initial Contracts is due no later than August 2000. The first scheduled payment
date of Contracts representing approximately 99.00% of the aggregate principal
balance of the Subsequent Contracts will be due no later than August 2000; the
first scheduled payment date of Contracts representing approximately 1.00% of
the aggregate principal balance of the Subsequent Contracts will be due no later
than February 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 59.77% 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
40.23% 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 13.66% 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 4 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 71.48 months, and a weighted average term to
scheduled maturity as of the Initial Cutoff Date of approximately 69.41 months
(see Tables 3 and 4 below). The average principal balance per Initial Contract
as of the Initial Cutoff Date was approximately $12,418.72 and the principal
balances on the Initial Contracts as of the Initial Cutoff Date ranged from
$501.60 to $36,598.61 (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:
12.14% in California, 9.06% in Texas, 8.49% in Florida and 5.10% in Pennsylvania
(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................................................................. $214,471,329.09
Number of Contracts......................................................................... 17,270
Average Principal Balance................................................................... $12,418.72
Weighted Average Annual Percentage
Rate ("APR")........................................................................... 13.66%
(Range)................................................................................ 8.50% - 22.99%
Weighted Average Original Term (in months).................................................. 71.48
(Range)................................................................................ 12 - 84
Weighted Average Calculated Remaining Term (in months)...................................... 69.41
(Range)................................................................................ 4 - 84
</TABLE>
TABLE 2
DISTRIBUTION BY APR OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NUMBER NUMBER OF TOTAL OUTSTANDING POOL
RATE OF CONTRACTS CONTRACTS(1) PRINCIPAL BALANCE BALANCE(1)
---- ------------ ------------ ----------------- ----------
<S> <C> <C> <C> <C>
8.500- 9.000% 37 0.21% $ 454,391.92 0.21%
9.001-10.000 225 1.30 3,213,258.11 1.50
10.001-11.000 883 5.11 12,056,280.70 5.62
11.001-12.000 2,925 16.94 38,352,245.31 17.88
12.001-13.000 4,224 24.46 53,203,341.71 24.81
13.001-14.000 4,422 25.61 54,178,433.83 25.26
14.001-15.000 2,092 12.11 25,214,963.12 11.76
15.001-16.000 789 4.57 9,053,110.45 4.22
16.001-17.000 223 1.29 2,422,870.48 1.13
17.001-18.000 490 2.84 5,520,873.78 2.57
18.001-19.000 83 0.48 1,106,078.34 0.52
19.001-20.000 402 2.33 4,598,152.72 2.14
20.001-21.000 151 0.87 1,695,540.09 0.79
21.001-22.000 321 1.86 3,367,369.11 1.57
22.001-22.990 3 0.02 34,419.42 0.02
----- ----- -------------- -----
Totals: 17,270 100.00% $214,471,329.09 100.00%
</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 OF NUMBER OF TOTAL OUTSTANDING PERCENT OF POOL
TERM (MONTHS) CONTRACTS CONTRACTS(1) PRINCIPAL BALANCE BALANCE (1)
------------- --------- ------------ ----------------- -----------
<S> <C> <C> <C> <C>
4 - 12 40 0.23% $ 120,046.13 0.06%
13 - 24 197 1.14 1,045,845.77 0.49
25 - 36 457 2.65 3,548,355.37 1.65
37 - 48 761 4.41 6,802,204.72 3.17
49 - 60 2,605 15.08 27,200,051.29 12.68
61 - 72 10,766 62.34 132,247,059.62 61.66
73 - 84 2,444 14.15 43,507,766.19 20.29
------ ------ --------------- ------
TOTALS: 17,270 100.00% $214,471,329.09 100.00%
</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>
CALCULATED PERCENT OF
REMAINING 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 16 0.09% $ 69,318.89 0.03%
13 - 24 154 0.89 872,948.89 0.41
25 - 36 422 2.44 3,307,292.45 1.54
37 - 48 710 4.11 6,350,804.62 2.96
49 - 60 2,556 14.80 26,656,157.16 12.43
61 - 72 10,928 63.28 133,215,117.50 62.11
73 - 84 2,484 14.38 43,999,689.58 20.52
------ ------ --------------- ------
TOTALS: 17,270 100.00% $214,471,329.09 100.00%
</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>
$ 501.60 - 1,000.00 2 0.01% $ 1,101.56 0.00%
$ 1,000.01 - 2,000.00 34 0.20 55,517.00 0.03
$ 2,000.01 - 3,000.00 122 0.71 314,943.68 0.15
$ 3,000.01 - 4,000.00 207 1.20 748,777.34 0.35
$ 4,000.01 - 5,000.00 417 2.41 1,889,710.53 0.88
$ 5,000.01 - 6,000.00 649 3.76 3,629,841.12 1.69
$ 6,000.01 - 7,000.00 1,057 6.12 6,920,008.74 3.23
$ 7,000.01 - 8,000.00 1,204 6.97 9,057,532.06 4.22
$ 8,000.01 - 9,000.00 1,228 7.11 10,467,118.42 4.88
$ 9,000.01 - 10,000.00 1,338 7.75 12,707,423.18 5.92
$10,000.01 - 11,000.00 1,004 5.81 10,515,489.72 4.90
$11,000.01 - 12,000.00 940 5.44 10,806,880.82 5.04
$12,000.01 - 13,000.00 960 5.56 12,007,643.85 5.60
$13,000.01 - 14,000.00 1,067 6.18 14,434,080.87 6.73
$14,000.01 - 15,000.00 1,257 7.28 18,279,230.76 8.52
$15,000.01 - 16,000.00 1,346 7.79 20,897,175.13 9.74
$16,000.01 - 17,000.00 1,283 7.43 21,151,489.48 9.86
$17,000.01 - 18,000.00 1,098 6.36 19,187,685.01 8.95
$18,000.01 - 19,000.00 721 4.17 13,322,498.00 6.21
$19,000.01 - 20,000.00 515 2.98 10,032,725.02 4.68
$20,000.01 - 21,000.00 304 1.76 6,221,612.75 2.90
$21,000.01 - 22,000.00 216 1.25 4,645,143.42 2.17
$22,000.01 - 23,000.00 121 0.70 2,714,947.99 1.27
$23,000.01 - 24,000.00 69 0.40 1,612,371.92 0.75
$24,000.01 - 25,000.00 58 0.34 1,419,784.90 0.66
$25,000.01 - 26,000.00 16 0.09 407,322.73 0.19
$26,000.01 - 27,000.00 19 0.11 504,849.28 0.24
$27,000.01 - 28,000.00 9 0.05 248,265.97 0.12
$28,000.01 - 29,000.00 5 0.03 141,647.02 0.07
$29,000.01 - 31,000.00 3 0.02 91,912.21 0.04
$31,000.01 - 36,598.61 1 0.01 36,598.61 0.02
------ ------ --------------- ------
TOTALS: 17,270 100.00% $214,471,329.09 100.00%
</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 262 1.52% $3,317,478.06 1.55%
ALASKA 35 0.20 478,080.80 0.22
ARIZONA 451 2.61 6,205,276.98 2.89
ARKANSAS 122 0.71 1,437,874.57 0.67
CALIFORNIA 2,066 11.96 26,036,613.00 12.14
COLORADO 304 1.76 4,140,357.83 1.93
CONNECTICUT 275 1.59 3,201,523.57 1.49
DELAWARE 112 0.65 1,262,350.87 0.59
DISTRICT OF COLUMBIA 4 0.02 55,070.56 0.03
FLORIDA 1,377 7.97 18,204,376.37 8.49
GEORGIA 535 3.10 7,146,583.36 3.33
HAWAII 112 0.65 1,453,747.20 0.68
IDAHO 28 0.16 353,259.50 0.16
ILLINOIS 640 3.71 7,753,729.75 3.62
INDIANA 385 2.23 4,674,946.42 2.18
IOWA 135 0.78 1,579,123.24 0.74
KANSAS 97 0.56 1,289,076.23 0.60
KENTUCKY 173 1.00 2,046,700.98 0.95
LOUISIANA 189 1.09 2,256,479.52 1.05
MAINE 55 0.32 618,918.66 0.29
MARYLAND 397 2.30 4,785,884.81 2.23
MASSACHUSETTS 336 1.95 3,996,469.46 1.86
MICHIGAN 310 1.80 4,121,974.60 1.92
MINNESOTA 152 0.88 1,760,233.35 0.82
MISSISSIPPI 67 0.39 806,917.18 0.38
MISSOURI 269 1.56 3,304,278.60 1.54
MONTANA 31 0.18 324,323.23 0.15
NEBRASKA 57 0.33 654,912.06 0.31
NEVADA 275 1.59 3,712,997.13 1.73
NEW HAMPSHIRE 186 1.08 2,113,796.94 0.99
NEW JERSEY 591 3.42 6,794,657.36 3.17
NEW MEXICO 199 1.15 2,588,406.07 1.21
NEW YORK 611 3.54 6,616,019.82 3.08
NORTH CAROLINA 705 4.08 8,837,301.22 4.12
NORTH DAKOTA 13 0.08 110,335.93 0.05
OHIO 676 3.91 7,802,697.10 3.64
OKLAHOMA 171 0.99 2,142,022.60 1.00
OREGON 226 1.31 2,746,610.30 1.28
PENNSYLVANIA 974 5.64 10,931,771.75 5.10
</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 41 0.24 450,190.37 0.21
SOUTH CAROLINA 306 1.77 3,779,448.92 1.76
SOUTH DAKOTA 35 0.20 382,812.97 0.18
TENNESSEE 486 2.81 6,248,179.59 2.91
TEXAS 1,452 8.41 19,439,649.18 9.06
UTAH 67 0.39 792,425.32 0.37
VERMONT 32 0.19 370,121.73 0.17
VIRGINIA 491 2.84 6,121,198.58 2.85
WASHINGTON 379 2.19 4,845,516.61 2.26
WEST VIRGINIA 75 0.43 816,248.08 0.38
WISCONSIN 244 1.41 2,859,892.89 1.33
WYOMING 28 0.16 316,479.70 0.15
OTHER 31 0.18 385,988.17 0.18
------ ------ --------------- ------
TOTALS: 17,270 100.00% $214,471,329.09 100.00%
</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,
---------------------------------------------------------------------------
1999 1998 1997
-------------------- -------------------- -------------------
Number Number Number
of of of
Contracts Amount Contracts Amount Contracts Amount
--------- ------ --------- ------ --------- ------
<S> <C> <C> <C> <C> <C> <C>
Portfolio ........................... 91,556 $914,545.5 67,137 $651,248.7 45,258 $434,890.7
Period of Delinquency(2)/
30-59 Days ..................... 2,868 28,307.9 1,970 $17,768.1 1,264 $11,454.6
60-89 Days ..................... 983 9,424.3 745 6,153.9 559 5,112.1
90 Days or more ................ 371 3,569.9 304 2,591.0 269 2,196.5
------ ---------- ------ ---------- ------ ----------
Total Delinquencies ................. 4,222 $ 41,302.1 3,019 $26,513.0 2,092 $18,763.2
====== ========== ====== ========= ===== =========
Total Delinquencies as Percent of
Total Portfolio ..................... 4.61% 4.52% 4.50% 4.07% 4.62% 4.31%
</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.
LOAN LOSS/REPOSSESSION EXPERIENCE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended
December 31,
-------------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Principal Balance of All Contracts
Serviced(1) ........................... $918,481.6 $653,836.0 $436,771.0
Contract Liquidations(2) ................ 1.59% 1.54% 1.42%
Net Losses:
Dollars(3) ............................ $5,875.0 $5,245.3 $3,781.1
Percentage(4) ......................... 0.64% 0.80% 0.87%
</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.
- 18 -
