As filed with the Securities and Exchange Commission on March 18, 1997
Registration No. ( )
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington , D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
U.S. BANCORP AUTO TRUSTS
(Issuer with respect to the Securities)
U.S. BANCORP AUTO RECEIVABLES
CORPORATION
(Sponsor of the Trusts described herein)
(Exact name of Registrant as specified in its charter)
Oregon Not Yet Available
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
111 S.W. Fifth Avenue
Portland, OR 97204
(503) 731-1817
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
C. Marie Eckert
Attorney
U.S. Bancorp Auto Receivables Corporation
111 S.W. Fifth Avenue
Portland, OR 97204
(503) 275-6182
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copies to:
Mary Ann Frantz, Esq. Renwick D. Martin, Esq.
Miler, Nash, Wiener, Hager & Carlsen LLP Brown & Wood LLP
111 S.W. Fifth Avenue, 35th Floor One World Trade Center
Portland, Oregon 97204-3699 New York, New York 10048
(503) 224-5858 (212) 839-5300
-----------------
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /x/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / -----------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ------------
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities Amount to Be Proposed Maximum Proposed Maximum Amount of
to Be Registered Registered Offering Price Per Unit Aggregate Offering Registration Fee
(1) Price(1)
<S> <C> <C> <C> <C>
Asset Backed $1,000,000 100% $1,000,000 $304
Certificates
</TABLE>
(1) Estimated pursuant to Rule 457 solely for the purpose of calculating the
registration fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
=============================================================================
INTRODUCTORY NOTE
This Registration Statement contains a form of Prospectus relating to
the offering of series of Asset Backed Certificates by various U.S. Bancorp
Auto Trusts created from time to time by U.S. Bancorp Auto Receivables
Corporation and a form of Prospectus Supplement relating to the offering by a
U.S. Bancorp Auto Trust of the particular series of Asset Backed Certificates
described therein. The form of Prospectus Supplement relates only to the
securities described therein and is a form that may be used, among others, by
U.S. Bancorp Auto Receivables Corporation to offer Asset Backed Certificates
under this Registration Statement.
Information contained herein is subject to completion or amendment. These
securities may not be sold nor may offers to buy be accepted prior to the
time a final Prospectus Supplement is delivered. This Prospectus Supplement
shall not constitute an offer to sell or the solicitation of an offer to buy
nor shall there be any sale of these securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
Subject to completion, dated _______________, 1997
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 199__)
$( )
U.S. BANCORP AUTO TRUST 199 -( )
( %) ASSET BACKED CERTIFICATES, CLASS A
( %) ASSET BACKED CERTIFICATES, CLASS B
U.S. BANCORP AUTO RECEIVABLES CORPORATION, SELLER
UNITED STATES NATIONAL BANK OF OREGON, SERVICER
____________________
The Asset Backed Certificates, Series 199_-_ (the "Certificates") will
consist of two Classes of Certificates, the Class A Certificates and the
Class B Certificates. The Class A Certificates will evidence in the
aggregate an undivided ownership interest of approximately ___% in a trust
(the "Trust") to be formed pursuant to a Pooling and Servicing Agreement to
be entered into among U.S. Bancorp Auto Receivables Corporation, as Seller
(the "Seller"), United States National Bank of Oregon ("U.S. Bank"), as
Servicer (the "Servicer"), and _____________________, as Trustee (the
"Trustee"). The Class B Certificates will evidence in the aggregate an
undivided ownership interest of approximately ___% in the Trust. The rights
of the Class B Certificateholders to receive distributions with respect to
the Receivables are subordinated to the rights of the Class A
Certificateholders, to the extent described herein. The Trust property will
include a pool of motor vehicle retail installment sale contracts (the
"Receivables"), all monies due thereunder on or after __________, security
interests in the vehicles financed thereby and certain other property.
Principal, and interest to the extent of the Pass-Through Rate of ___%
per annum, will be distributed on the 15th day of each month (or the next
following business day) beginning ________, 199_ (the "Distribution Date").
The Final Scheduled Distribution Date on the Certificates will be __________.
THE CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE TRUST ONLY AND DO NOT
REPRESENT OBLIGATIONS OF OR INTERESTS IN U.S. BANCORP AUTO RECEIVABLES
CORPORATION, U.S. BANCORP, UNITED STATES NATIONAL BANK OF OREGON OR ANY OF
THEIR RESPECTIVE AFFILIATES. NONE OF THE CERTIFICATES OR THE RECEIVABLES ARE
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION> ORIGINAL
PRINCIPAL PRICE TO UNDERWRITING THE PROCEEDS TO
AMOUNT PUBLIC(1) DISCOUNT THE SELLER(1)(2)
<S> <C> <C> <C> <C>
Per Class A Certificate . . . $ % % %
Per Class B Certificate . . . $ % % %
Total $ $ $
- -----------
</TABLE>
- -----------
(1) Plus accrued interest, if any, from , 199 .
(2) Before deducting expenses, estimated to be $ .
The Certificates are offered subject to prior sale and subject to the
Underwriters' right to reject any order in whole or in part. It is expected
that delivery of the Certificates will be made in book-entry form only
through the facilities of The Depository Trust Company, Cedel Bank, societe
anonyme, and the Euroclear System on or about , 199 .
____________________
(UNDERWRITER)
____________________
The date of this Prospectus Supplement is , 199 .
____________________
The Servicer may purchase the Receivables when the aggregate principal
balance of the Receivables shall have declined to 10% or less of the initial
aggregate principal balance of the Receivables purchased by the Trust.
PROSPECTIVE INVESTORS SHOULD CONSIDER THE FACTORS SET FORTH UNDER
"SPECIAL CONSIDERATIONS" HEREIN AND IN THE ACCOMPANYING PROSPECTUS.
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION ABOUT
THE OFFERING OF THE CERTIFICATES. ADDITIONAL INFORMATION IS CONTAINED IN THE
PROSPECTUS, AND PROSPECTIVE INVESTORS ARE URGED TO READ BOTH THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS IN FULL. SALES OF THE CERTIFICATES MAY NOT BE
CONSUMMATED UNLESS THE PURCHASER HAS RECEIVED BOTH THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS. TO THE EXTENT ANY STATEMENTS IN THIS PROSPECTUS
SUPPLEMENT CONFLICT WITH STATEMENTS IN THE PROSPECTUS, THE STATEMENTS IN THIS
PROSPECTUS SUPPLEMENT SHALL CONTROL.
Certain persons participating in this offering may engage in
transactions that stabilize, maintain, or otherwise affect the price of the
Certificates. Such transactions may include stabilizing and the purchase of
Certificates to cover syndicate short positions. For a description of these
activities, see "Underwriting" herein.
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates are issued, monthly and annual
unaudited reports containing information concerning the Receivables will be
prepared by the Servicer and sent on behalf of the Trust only to Cede & Co.
("Cede"), as nominee of The Depository Trust Company ("DTC") and registered
holder of the Certificates. See "Description of the Certificates --
Book-Entry Registration" and "-- Reports to Certificateholders" in the
accompanying Prospectus (the "Prospectus"). Such reports will not constitute
financial statements prepared in accordance with generally accepted
accounting principles. The Seller, as originator of the Trust, will file
with the Securities and Exchange Commission (the "Commission") such periodic
reports as are required under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations of the Commission
thereunder.
SUMMARY OF TERMS
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere herein and in the Prospectus.
Certain capitalized terms used herein are defined elsewhere in this
Prospectus Supplement on the pages indicated in the "Index of Terms" or, to
the extent not defined herein, have the meanings assigned to such terms in
the Prospectus.
Issuer . . . . . . . . . . . . . . U.S. Bancorp Auto Trust 199 -( )
(the "Trust" or the "Issuer"), to
be formed pursuant to a Pooling and
Servicing Agreement to be dated as
of __________, 199_ among the
Seller, the Servicer and the
Trustee (the "Pooling and Servicing
Agreement")
Seller . . . . . . . . . . . . . . U.S. Bancorp Auto Receivables
Corporation (the "Seller").
Servicer . . . . . . . . . . . . . United States National Bank of
Oregon (in such capacity, the
"Servicer").
Trustee . . . . . . . . . . . . . . , as
trustee under the Pooling and
Servicing Agreement (the
"Trustee").
The Certificates . . . . . . . . . The Certificates will consist of
two classes, entitled ___% Asset
Backed Certificates, Class A (the
"Class A Certificates") and ___%
Asset Backed Certificates, Class B
(the "Class B Certificates"). Each
Certificate will represent a
fractional undivided ownership
interest in the Trust.
The Class A Certificates will
evidence in the aggregate an
undivided ownership interest (the
"Class A Percentage") of
approximately ___% of the Trust
(initially representing
$__________) and the Class B
Certificates will evidence in the
aggregate an undivided ownership
interest (the "Class B Percentage")
of approximately ___% of the Trust
(initially representing
$__________). The Class B
Certificates are subordinated to
the Class A Certificates, to the
extent described herein.
The Receivables . . . . . . . . . . The Receivables will have an
aggregate principal balance of
approximately $ (the
"Initial Pool Balance") as of
, 199 (the "Cutoff Date").
The Receivables will consist of
retail installment sale contracts
between Obligors and Dealers. The
retail installment sale contracts
were purchased by __________,
__________ and __________ (the
"Originators"), which are
subsidiaries of U.S. Bancorp, a
regional multi-bank holding company
and the parent of the Seller. The
Receivables will be transferred by
the Originators to the Seller for
sale to the Trust, based on the
criteria specified in the Pooling
and Servicing Agreement and
described herein and in the
Prospectus. As of the Cutoff Date,
the weighted average annual
percentage rate of the Receivables
was approximately %, the
weighted average remaining maturity
of the Receivables was
approximately ____ months, and the
weighted average original maturity
of the Receivables was
approximately _____ months. No
Receivable has a scheduled maturity
later than ______________, 20__
(the "Final Scheduled Maturity
Date"). See "The Receivables Pool"
herein.
The "Pool Balance" at any time will
represent the aggregate principal
balance of the Receivables at the
end of the preceding Collection
Period, after giving effect to all
payments (other than Payaheads)
received from Obligors, Advances
and Purchase Amounts to be remitted
by the Servicer or the Seller, as
the case may be, all for such
Collection Period, and all losses
realized on Receivables liquidated
during such Collection Period.
Distribution Dates . . . . . . . . Distributions with respect to the
Certificates will be made on the
day of each month or, if any such
day is not a Business Day, on the
next succeeding Business Day (each,
a "Distribution Date") commencing
, 199 . The Servicer shall
determine the amount to be
distributed on the Distribution
Date on or before the __ Business
Day preceding such Distribution
Date (the "Determination Date").
Distributions will be made to
holders of the Certificates (the
"Certificateholders") of record as
of the day immediately preceding
such Distribution Date or, if
Definitive Certificates are issued,
as of the ____ day of the preceding
month (a "Record Date").
Class A Pass Through Rate . . . . . ___% per annum.
Class B Pass Through Rate . . . . . ___% per annum.
Interest . . . . . . . . . . . . . On each Distribution Date, the
Trustee will distribute to the
Class A Certificateholders interest
at the Class A Pass-Through Rate on
the Class A Certificate Balance as
of the last day of the preceding
calendar month (before giving
effect to distributions of
principal on the related
Distribution Date) generally to the
extent of funds available from (i)
the Class A Percentage of the
Interest Distribution Amount; (ii)
the Reserve Account and (iii) the
Class B Percentage of the Total
Distribution Amount. The "Class A
Certificate Balance" shall equal,
initially, the Class A Percentage
of the Pool Balance as of the
Cutoff Date and thereafter shall
equal the initial Class A
Certificate Balance, reduced by all
principal distributions on the
Class A Certificates. Interest on
the Certificates will be calculated
on the basis of a 360- day year
consisting of twelve 30-day months.
Class A Principal . . . . . . . . . On each Distribution Date, the
Trustee will distribute to Class A
Certificateholders an amount equal
to the Class A Percentage of the
Principal Distribution Amount for
the Collection Period preceding
such Distribution Date to the
extent of funds available therefor.
The "Principal Distribution Amount"
is the amount of principal paid or,
in certain circumstances, the
principal balance of defaulted
Receivables, as calculated by the
Servicer as described under
"Description of the Certificates --
Distributions." The Class A
Percentage of the Principal
Distribution Amount will be passed
through on each Distribution Date
to the Class A Certificateholders
to the extent of funds available
from (i) the Class A Percentage of
the Principal Distribution Amount
(exclusive of the portion thereof
attributable to Realized Losses),
(ii) the Reserve Account and (iii)
the Class B Percentage of the Total
Distribution Amount. "Realized
Losses" means the excess of the
principal balance of any Liquidated
Receivable over Liquidation
Proceeds to the extent allocable to
principal received in the
Collection Period in which the
Receivable became a Liquidated
Receivable. A "Collection Period"
with respect to a Distribution Date
will be the calendar month
preceding the month in which such
Distribution Date occurs.
Class B Interest . . . . . . . . . On each Distribution Date, the
Trustee will distribute to the
Class B Certificateholders interest
at the Class B Pass Through Rate on
the Class B Certificate Balance as
of the last day of the preceding
calendar month (before giving
effect to distributions of
principal on such Distribution
Date) generally to the extent of
funds available, after giving
effect to the prior rights of the
Class A Certificateholders to
receive the distribution of
principal and interest due them as
described above, from (i) the Class
B Percentage of the Interest
Distribution Amount and (ii) the
Reserve Account. The "Class B
Certificate Balance" will equal,
initially, $______ and, thereafter,
will equal the initial Class B
Certificate Balance reduced by all
amounts previously distributed to
Class B Certificateholders (or
deposited in the Reserve Account,
exclusive of the Reserve Account
Initial Deposit) and allocable to
principal and by Realized Losses.
Class B Principal . . . . . . . . . On each Distribution Date, the
Trustee will distribute the Class B
Percentage of the Principal
Distribution Amount to the Class B
Certificateholders to the extent of
funds available (after giving
effect to the distribution of the
interest and principal due to the
Class A Certificateholders and the
interest due to the Class B
Certificateholders) from (i) the
Class B Percentage of the Principal
Distribution Amount (exclusive of
the portion thereof attributable to
Realized Losses) and (ii) the
Reserve Account.
Optional Prepayment . . . . . . . . If the Servicer exercises its
option to purchase the Receivables,
which can occur after the Pool
Balance declines to (10%) or less
of the initial Pool Balance, the
Class A Certificateholders will
receive an amount equal to the
Class A Certificate Balance
together with accrued interest at
the Class A Pass Through Rate, the
Class B Certificateholders will
receive an amount equal to the
Class B Certificate Balance
together with accrued interest at
the Class B Pass Through Rate, and
the Certificates will be retired.
Reserve Account . . . . . . . . . . The Reserve Account will be created
with an initial deposit by the
Seller on the Closing Date of cash
or Eligible Investments having a
value of at least $_______.
Certain amounts in the Reserve
Account on any Distribution Date
(after giving effect to all
distributions to be made on such
Distribution Date) in excess of the
Specified Reserve Account Balance
for such Distribution Date will be
released to the Seller. The
"Specified Reserve Account Balance"
with respect to any Distribution
Date generally will be equal to
(state formula). The amount in the
Reserve Account will be increased
by the deposit thereto on each
Distribution Date of the amount, if
any, of the Total Distribution
Amount remaining after the payment
of the Servicing Fee and any prior
unpaid Servicing Fee, the Class A
Distributable Amount and the Class
B Distributable Amount until the
amount in the Reserve Account
equals the Specified Reserve
Account Balance. Amounts in the
Reserve Account on any Distribution
Date (after giving effect to all
distributions made on such
Distribution Date) in excess of the
Specified Reserve Account Balance
for such Distribution Date
generally will be released to the
Seller and will no longer be
available to the
Certificateholders. The Reserve
Account will be maintained with the
Trustee as a segregated trust
account, but will not be part of
the Trust.
Collection Account . . . . . . . . Except under certain conditions
described herein, the Servicer will
be required to remit collections
received with respect to the
Receivables within two Business
Days of receipt thereof to one or
more accounts in the name of the
Trustee (the "Collection Account").
Pursuant to the Pooling and
Servicing Agreement, the Servicer
will have the revocable power to
instruct the Trustee to withdraw
funds on deposit in the Collection
Account and to apply such funds on
each Distribution Date to the
following (in the priority
indicated): (i) the Servicing Fee
for the prior Collection Period and
any overdue Servicing Fees to the
Servicer, (ii) the Class A
Distributable Amount to the Class A
Certificateholders, (iii) the Class
B Distributable Amount to the Class
B Certificateholders, and (iv) the
remaining balance, if any, to the
Reserve Account.
Tax Status . . . . . . . . . . . . In the opinion of Miller, Nash,
Wiener, Hager & Carlsen LLP ("Tax
Counsel") the Trust will be treated
as a grantor trust for federal
income tax purposes and will not be
subject to federal income tax.
Certificate Owners will report
their pro rata share of all income
earned on the Receivables (other
than amounts, if any, treated as
"stripped coupons") and, subject to
certain limitations in the case of
Certificate Owners who are
individuals, trusts, or estates,
may deduct their pro rata share of
reasonable servicing and other
fees. See "Certain Federal Income
Tax Consequences" in the Prospectus
for additional information
concerning the application of
federal income tax laws to the
Trust and the Certificates.
ERISA Considerations . . . . . . . Subject to the considerations
discussed under "ERISA
Considerations" herein and in the
Prospectus, the Class A
Certificates are eligible for
purchase by employee benefit plans.
The Class B Certificates may not be
acquired by any employee benefit
plan subject to the Employee
Retirement Income Security Act of
1974, as amended ("ERISA"), or
Section 4975 of the Internal
Revenue Code of 1986, as amended
(the "Code"), or by an individual
retirement account. See "ERISA
Considerations" herein and in the
Prospectus.
Ratings of the Class A
Certificates . . . . . . . . . . . It is a condition to the issuance
of the Class A Certificates that
they be rated " " by (at least)
two nationally recognized rating
agencies. There can be no
assurance that a rating will not be
lowered or withdrawn by a rating
agency if circumstances so warrant.
Ratings of the Class B
Certificates . . . . . . . . . . . It is a condition to the issuance
of the Class B Certificates that
they be rated at least in the " "
category or its equivalent by (at
least) two nationally recognized
rating agencies. There can be no
assurance that a rating will not be
lowered or withdrawn by a rating
agency if circumstances so warrant.
SPECIAL CONSIDERATIONS
LIMITED LIQUIDITY. There is currently no secondary market for the
Certificates offered hereby. Each Underwriter currently intends to make a
market in the Certificates offered hereby, but it is under no obligation to
do so. There can be no assurance that a secondary market will develop or, if
a secondary market does develop, that it will provide the Certificateholders
with liquidity of investment or that it will continue for the life of the
Certificates offered hereby.
GEOGRAPHIC CONCENTRATION. Economic conditions in states where Obligors
reside may affect the delinquency, loan loss and repossession experience of
the Trust with respect to the Receivables. Obligors on Receivables
representing approximately _____% by principal balance of the Receivables
were located in Washington, Oregon, Idaho, Utah, Nevada and California,
respectively, as of the Cutoff Date. As a result, economic conditions in
such states may have a disproportionate impact on the Trust. In particular,
an economic downturn in one or more of such states could adversely affect the
performance of the Trust as a whole (even if national economic conditions
remain unchanged or improve) as Obligors in such state or states experience
the effects of such a downturn and face greater difficulty in making payments
on their Financed Vehicles. See "The Receivables Pool."
SUBORDINATION; LIMITED ASSETS. Distributions of interest and principal
on the Class B Certificates will be subordinated in priority of payment to
interest and principal due on the Class A Certificates. Consequently, the
Class B Certificateholders will not receive any distributions with respect to
a Collection Period until the full amount of interest on and principal of the
Class A Certificates due on such Distribution Date has been deposited in the
Certificate Distribution Account.
The Trust will not have, nor is it permitted or expected to have, any
significant assets or sources of funds other than the Receivables and the
Reserve Account. Holders of the Certificates must rely for repayment upon
payments on the Receivables and, if and to the extent available, amounts on
deposit in the Reserve Account. Although funds in the Reserve Account will
be available on each Distribution Date to cover shortfalls in distributions
of interest and principal on the Certificates, amounts to be deposited in the
Reserve Account are limited in amount. If the Reserve Account is exhausted,
the Trust will depend solely on current distributions on the Receivables to
make payments on the Certificates.
RATINGS OF THE CERTIFICATES. It is a condition to the issuance of the
Certificates that the Class A Certificates be rated in the highest investment
rating category, and that the Class B Certificates be rated at least in the "
" category or its equivalent, by (at least) two nationally recognized rating
agencies (the "Rating Agencies"). A rating is not a recommendation to
purchase, hold or sell Certificates, inasmuch as such rating does not comment
as to market price or suitability for a particular investor. The ratings of
the Certificates address the likelihood of the payment of principal and
interest on the Certificates pursuant to their terms. There can be no
assurance that a rating will remain for any given period of time or that a
rating will not be lowered or withdrawn entirely by a Rating Agency if in its
judgment circumstances in the future so warrant.
THE TRUST
GENERAL
The Seller will establish the Trust by selling and assigning the Trust
property, as described below, to the Trustee in exchange for the
Certificates. The Servicer will service the Receivables pursuant to the
Pooling and Servicing Agreement and will be compensated for acting as the
Servicer. See "Description of the Certificates -- Servicing Compensation and
Payment of Expenses". To facilitate servicing and to minimize administrative
burden and expense, the Servicer will be appointed custodian for the
Receivables by the Trustee, but will not stamp the Receivables to reflect the
sale and assignment of the Receivables to the Trust or amend the certificates
of title of the Financed Vehicles. In the absence of amendments to the
certificates of title, the Trustee may not have perfected security interests
in the Financed Vehicles securing the Receivables originated in some states.
See "Certain Legal Aspects of the Receivables" in the Prospectus.
If the protection provided to the Certificateholders by the Reserve
Account and, in the case of the Class A Certificateholders, the subordination
of the Class B Certificates is insufficient, the Trust will look only to the
Obligors on the Receivables and the proceeds from the repossession and sale
of Financed Vehicles which secure defaulted Receivables. In such event,
certain factors, such as the Trust's not having first priority perfected
security interests in some of the Financed Vehicles, may affect the Trust's
ability to realize on the motor vehicles securing the Receivables, and thus
may reduce the proceeds to be distributed to Certificateholders with respect
to the Certificates. See "Description of the Certificates -- Distributions"
and "-- Reserve Account" herein and "Certain Legal Aspects of the
Receivables" in the Prospectus.
Each Certificate represents a fractional undivided ownership interest in
the Trust. The Trust property includes retail installment sale contracts
between Dealers and Obligors, and all payments due thereunder on or after the
related Cutoff Date with respect to the Precomputed Receivables and all
payments received thereunder on or after the related Cutoff Date with respect
to the Simple Interest Receivables. The Trust property also includes (i)
such amounts as from time to time may be held in one or more trust accounts
established and maintained by the Servicer pursuant to the Pooling and
Servicing Agreement, as described below; (ii) security interests in the
Financed Vehicles and any accessions thereto; (iii) the rights to proceeds
with respect to the Receivables from claims on physical damage, credit life
and disability insurance policies covering the Financed Vehicles or the
Obligors, as the case may be; (iv) the interest of the Seller in any proceeds
with respect to the Receivables from recourse, if any, to Dealers on
Receivables or Financed Vehicles with respect to which the Servicer has
determined that eventual repayment in full is unlikely; (v) any property that
shall have secured a Receivable and that shall have been acquired by the
Trustee; and (vi) any and all proceeds of the foregoing. The Reserve Account
will be maintained by the Trustee for the benefit of the Certificateholders,
but will not be part of the Trust.
THE RECEIVABLES POOL
The pool of Receivables (the "Receivables Pool") will include only the
Receivables purchased on the Closing Date. The Receivables will be purchased
by the Seller from the Originators, which purchased the Receivables, directly
or indirectly, from Dealers in the ordinary course of business or in
acquisitions. The Receivables were selected from the Seller's portfolio for
inclusion in the Receivables Pool by several criteria, some of which are set
forth in the Prospectus under "The Receivables Pools", as well as the
requirement that, as of the Cutoff Date, each Receivable (i) had an
outstanding gross balance of at least $ and (ii) was not more than 30
days past due (an account is not considered past due if the amount past due
is less than % of the scheduled monthly payment). As of the Cutoff Date,
no Obligor on any Receivable was noted in the related records of an
Originator as being the subject of a bankruptcy proceeding. No selection
procedures believed by the Seller to be adverse to Certificateholders were
used in selecting the Receivables.
Set forth in the following tables is information concerning the
composition, distribution by annual percentage rate ("APR") and the
geographic distribution of the Receivables Pool as of the Cutoff Date.
U.S. BANCORP AUTO TRUST 199 -( )
COMPOSITION OF THE RECEIVABLES POOL
<TABLE>
<CAPTION>
Weighted Weighted Weighted
Average Aggregate Average Average Average
APR of Principal Number of Remaining Original Principal
Receivables Balance Receivables Term Term Balance
- -------------- ------------ ------------ ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
_____% $________________ __________ _____ months _____ months $__________
</TABLE>
U.S. BANCORP AUTO TRUST 199 - ( )
DISTRIBUTION BY APR OF THE RECEIVABLES POOL
<TABLE>
<CAPTION> Percent of
Aggregate
Number of Aggregate Principal
APR Range Receivables Principal Balance Balance(1)
- --------- ----------- ----------------- ---------------
<S> <C> <C> <C>
0.00% - 5.00% . . . . . . . . . . . . . . . . $ %
5.01% - 6.00% . . . . . . . . . . . . . . . .
6.01% - 7.00% . . . . . . . . . . . . . . . .
7.01% - 8.00% . . . . . . . . . . . . . . . .
8.01% - 9.00% . . . . . . . . . . . . . . . .
9.01% - 10.00% . . . . . . . . . . . . . . . .
10.01% - 11.00% . . . . . . . . . . . . . . . .
11.01% - 12.00% . . . . . . . . . . . . . . . .
12.01% - 13.00% . . . . . . . . . . . . . . . .
13.01% - 14.00% . . . . . . . . . . . . . . . .
14.01% - 15.00% . . . . . . . . . . . . . . . .
15.01% - 16.00% . . . . . . . . . . . . . . . .
16.01% - 17.00% . . . . . . . . . . . . . . . .
17.01% - 18.00% . . . . . . . . . . . . . . . .
Greater than 18.00% . . . . . . . . . . . . . . ------------------ -----------------
</TABLE>
_______________
(1) Percentages may not add to 100.0% because of rounding.
U.S. BANCORP AUTO TRUST 199 -( )
GEOGRAPHIC DISTRIBUTION OF THE RECEIVABLES POOL
STATE(2) PRINCIPAL BALANCE(1)
-------- --------------------
California . . . . . . . . . . . %
Idaho
Nevada
Oregon . . . . . . . . . . . . .
Utah
Washington . . . . . . . . . . .
Other . . . . . . . . . . . . . .
__________
%
_______________
(1) Percentages may not add to 100.0% because of rounding.
(2) Based on physical addresses of the Obligors as of the Cutoff Date.
Approximately % of the aggregate principal balance of the
Receivables, constituting % of the number of the Receivables, represent
previously titled vehicles.
By aggregate principal balance, approximately % of the receivables
are Precomputed Receivables and % of the Receivables are Simple Interest
Receivables. See "The Receivables Pools" in the Prospectus for a further
description of the characteristics of Precomputed Receivables and Simple
Interest Receivables.
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Set forth below is certain information concerning the experience of the
following Originators pertaining to retail new and used automobile and light
duty truck receivables, including those previously sold which the Servicer
continues to service. All of the following Originators will sell Receivables
to the Seller which will thereafter be sold by the Seller to the Trust:
(U.S. Bank of California
U.S. Bank of Idaho
U.S. Bank of Nevada
United States National Bank of Oregon
U.S. Bank of Washington, National Association
U.S. Bank of Utah)
There can be no assurance that the delinquency, repossession and net loss
experience on the Receivables will be comparable to that set forth below.
DELINQUENCY EXPERIENCE(1)
<TABLE>
<CAPTION> AT , AT DECEMBER 31,
199 199 199 199
---- ---- --- ----
NUMBER OF NUMBER OF NUMBER OF NUMBER
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
--------- ------ --------- ------- --------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio . . . . . . . $ $ $ $
Period of Delinquency
31-60 Days . . . . .
61 Days or More . . . --------- ------ ---------- ------ ---------- --------- --------- -------
Total Delinquencies . . $ $ $ $
Total Delinquencies
as a Percent of the
Portfolio . . . . . . % % % % % % % %
</TABLE>
<TABLE>
<CAPTION> AT DECEMBER 31,
199 199 199
--- --- ---
NUMBER OF NUMBER OF NUMBER OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
----------- ------ --------- ------ ---------- ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Portfolio . . . . . . . . . . $ $ $
Period of Delinquency
31-60 Days . . . . . . . .
61 Days or More . . . . . . ---------- ------ ---------- ------- ------------ -------
Total Delinquencies . . . . .
Total Delinquencies
as a Percent of the
Portfolio . . . . . . . . . % % % % % %
</TABLE>
_______________
(1) All amounts and percentages are based on the gross amount scheduled
to be paid on each contract, including unearned finance and other
charges. The information in the table includes an immaterial amount
of retail installment sale contracts on vehicles other than
automobiles and light duty trucks and includes previously sold
contracts which the Servicer continues to service.
CREDIT LOSS/REPOSSESSION EXPERIENCE(1)
<TABLE>
<CAPTION> ------------- ENDED
YEAR ENDED DECEMBER 31,
------------ -------------------------------------------------
199 199 199 199 199 199 199
--- --- --- --- --- --- ---
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Amount Outstanding
During the Period . . . . . . . . . . . . $ $ $ $ $ $ $
Average Number of Contracts
Outstanding During the Period . . . . . .
Percent of Contracts Acquired During the
Period with Recourse to the Dealer . . . % % % % % % %
Repossessions as a Percent of Average
Number of Contracts Outstanding . . . . . % % % % % % %
Net Losses as a Percent of
Liquidations(3)(4) . . . . . . . . . . . % % % % % % %
Net Losses as a Percent of Average
Amount Outstanding(2)(3) . . . . . . . . % % % % % % %
</TABLE>
____________________
(1) (Except as indicated, all amounts and percentages are based on the
gross amount scheduled to be paid on each contract, including
unearned finance and other charges. The information in the table
includes previously sold contracts that the Servicer continues to
service.)
(2) Percentages have been annualized for the _____ months ended
____________, 199 and 199 and are not necessarily indicative of
the experience for the year.
(3) (Net losses are equal to the aggregate of the balances of all
contracts which are determined to be uncollectible in the period,
less any recoveries on contracts charged off in the period or any
prior periods, including any losses resulting from disposition
expenses and any losses resulting from the failure to recover
commissions to dealers with respect to contracts that are prepaid or
charged off.)
(4) Liquidations represent a reduction in the outstanding balances of
the contracts as a result of monthly cash payments and charge-offs.
The net loss figures above reflect the fact that Originators had
recourse to Dealers on a portion of their retail installment sale contracts.
By aggregate principal balance, approximately % of the Receivables
represent contracts with recourse to Dealers. The Originators apply
underwriting standards to the purchase of contracts without regard to whether
recourse to Dealers is provided. However, the net loss experience of
contracts without recourse against Dealers is higher than that of contracts
with recourse against Dealers because, under its recourse obligation, the
Dealer is responsible to the Originator for payment of the unpaid balance of
the contract, provided that the Originator repossesses the vehicle from the
retail buyer and returns it to the Dealer within a specified time. In the
event of a Dealer's bankruptcy, a bankruptcy trustee might attempt to
characterize recourse sales of contracts as loans to the Dealer secured by
the contracts. Such an attempt, if successful, could result in payment
delays or losses on the affected Receivables.
THE SELLER, THE SERVICER AND U.S. BANCORP
Information regarding the Seller is set forth under "The Seller" in the
Prospectus and information regarding the Servicer is set forth under "The
Servicer" in the Prospectus. U.S. Bancorp is a regional multi-bank holding
company incorporated under the laws of the State of Oregon and registered
under the Bank Holding Company Act of 1956, as amended. U.S. Bancorp owns
subsidiaries, including the Originators, the Seller and the Servicer, engaged
in banking and a variety of related businesses. U.S. Bancorp will have no
obligations or responsibilities relating to payments on the Certificates or
Receivables.
WEIGHTED AVERAGE LIFE OF THE CERTIFICATES
Information regarding certain maturity and prepayment considerations
with respect to the Certificates is set forth under "Weighted Average Life of
the Certificates" in the Prospectus. As the rate of payment of principal of
the Certificates depends primarily on the rate of payment (including
prepayments on liquidations due to default) of the principal balance of the
Receivables, the final distribution in respect of the Certificates could
occur significantly earlier than their final scheduled Distribution Date.
Certificateholders will bear the risk of being able to reinvest principal
payments on the Certificates at yields at least equal to the yields on their
respective Certificates.
DESCRIPTION OF THE CERTIFICATES
GENERAL
The Certificates will be issued pursuant to the terms of the Pooling and
Servicing Agreement, a form of which has been filed as an exhibit to the
Registration Statement. A copy of the Pooling and Servicing Agreement will
be filed with the Commission following the issuance of the Certificates. The
following summary describes certain terms of the Certificates and the Pooling
and Servicing Agreement. The summary does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all the provisions
of the Certificates and the Pooling and Servicing Agreement. The following
summary supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Certificates of any
given series and the related Pooling and Servicing Agreement set forth in the
Prospectus, to which description reference is hereby made.
In general, it is intended that Class A Certificateholders receive, on
each Distribution Date, the Class A Percentage of the Principal Distribution
Amount plus interest at the Class A Pass Through Rate on the Class A
Certificate Balance. Subject to the prior rights of the Class A
Certificateholders, it is intended that the Class B Certificateholders
receive, on each Distribution Date, the Class B Percentage of the Principal
Distribution Amount plus interest at the Class B Pass Through Rate on the
Class B Certificate Balance.
The Certificates will evidence interests in the Trust created pursuant
to the Pooling and Servicing Agreement. The Class A Certificates will
evidence in the aggregate an undivided ownership interest (the "Class A
Percentage") of approximately % of the Trust and the Class B Certificates
will evidence in the aggregate an undivided ownership interest (the "Class B
Percentage") of approximately % of the Trust.
OPTIONAL PREPAYMENT
If the Servicer exercises its option to purchase the Receivables when
the Pool Balance declines to (10%) or less of the Initial Pool Balance, the
Class A Certificateholders will receive an amount in respect of the Class A
Certificates equal to the outstanding Class A Certificate Balance together
with accrued interest at the Class A Pass Through Rate, and the Class B
Certificateholders will receive an amount in respect of the Class B
Certificates equal to the outstanding Class B Certificate Balance together
with accrued interest at the Class B Pass Through Rate, which distributions
shall effect early retirement of the Certificates. See "Description of the
Pooling and Servicing Agreement -- Termination" in the Prospectus.
SALE AND ASSIGNMENT OF RECEIVABLES
Certain information regarding the conveyance of the Receivables by the
Seller to the Trust on the Closing Date pursuant to the Pooling and Servicing
Agreement is set forth in the Prospectus under "Description of the Pooling
and Servicing Agreement -- Sale and Assignment of Receivables".
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicing Fee Rate with respect to the Servicing Fee for the
Servicer will be (1.00%) per annum of the Pool Balance as of the first day of
the related Collection Period. The Servicing Fee in respect of a Collection
Period (together with any portion of the Servicing Fee that remains unpaid
from prior Distribution Dates) will be paid at the beginning of such
Collection Period out of collections for such Collection Period. See
"Description of the Pooling and Servicing Agreement -- Servicing Compensation
and Payment of Expenses" in the Prospectus.
DISTRIBUTIONS
DEPOSITS TO COLLECTION ACCOUNT. On or before each Distribution Date,
the Servicer will cause all collections and other amounts constituting the
Total Distribution Amount to be deposited into the Collection Account. The
"Total Distribution Amount" for a Distribution Date shall be the sum of the
Interest Distribution Amount and the Principal Distribution Amount (other
than the portion thereof attributable to Realized Losses). "Realized Losses"
means the excess of the principal balance of any Liquidated Receivable over
Liquidation Proceeds to the extent allocable to principal received in the
Collection Period in which the Receivable became a Liquidated Receivable.
The "Interest Distribution Amount" on any Distribution Date will
generally be the sum of the following amounts with respect to the preceding
Collection Period: (i) that portion of all collections on the Receivables
(including Payaheads that have been applied as payments on the related
Receivables in that Collection Period) allocable to interest; (ii) all
proceeds of the liquidation of defaulted Receivables ("Liquidated
Receivables"), net of expenses incurred by the Servicer in connection with
such liquidation and any amounts required by law to be remitted to the
Obligor on such Liquidated Receivables ("Liquidation Proceeds"), to the
extent attributable to interest due thereon in accordance with the Servicer's
customary servicing procedures, and all recoveries in respect of Liquidated
Receivables which were written off in prior Collection Periods; (iii) all
Advances made by the Servicer of interest due on the Receivables; (iv) the
Purchase Amount of each Receivable that was repurchased by the Seller or
purchased by the Servicer under an obligation which arose during the related
Collection Period, to the extent attributable to accrued interest thereon;
and (v) Investment Earnings for such Distribution Date. The Interest
Distribution Amount shall be determined on the related Determination Date.
The "Principal Distribution Amount" on any Distribution Date will
generally be the sum of the following amounts with respect to the preceding
Collection Period: (i) that portion of all collections on the Receivables
(exclusive of Payaheads allocable to principal that have not been applied as
payments under the related Receivables in such Collection Period and
inclusive of Payaheads allocable to principal that have been applied as
payments under the related Receivables in such Collection Period) allocable
to principal; (ii) all Liquidation Proceeds attributable to the principal
amount of Receivables which became Liquidated Receivables during such
Collection Period in accordance with the Servicer's customary servicing
procedures, plus the amount of Realized Losses with respect to such
Liquidated Receivables; (iii) all Precomputed Advances made by the Servicer
of principal due on the Precomputed Receivables; (iv) to the extent
attributable to principal, the Purchase Amount received with respect to each
Receivable repurchased by the Seller or purchased by the Servicer under an
obligation which arose during the related Collection Period; (v) partial
prepayments relating to refunds of extended warranty protection plan costs or
of physical damage, credit life or disability insurance policy premiums, but
only if such costs or premiums were financed by the respective Obligor as of
the date of the original contract; and (vi) on the Distribution Date
immediately following the Final Scheduled Maturity Date (the "Final Scheduled
Distribution Date"), any amounts advanced by the Servicer with respect to
principal on the Receivables. The Regular Principal Distribution Amount
shall be determined on the related Determination Date.
The Interest Distribution Amount and the Regular Principal Distribution
Amount on any Distribution Date shall exclude the following:
(i) amounts received on Precomputed Receivables to the extent that
the Servicer has previously made an unreimbursed Precomputed Advance;
(ii) Liquidation Proceeds with respect to a particular
Precomputed Receivable to the extent of any unreimbursed Precomputed
Advances thereon;
(iii) all payments and proceeds (including Liquidation Proceeds)
of any Receivables, the Purchase Amount of which has been included in
the Total Distribution Amount in a prior Collection Period;
(iv) amounts received in respect of interest on Simple Interest
Receivables during the preceding Collection Period in excess of the
amount of interest that would have been due during the Collection Period
on Simple Interest Receivables at their respective APRs (assuming that a
payment is received on each Simple Interest Receivable on the due date
thereof); and
(v) Liquidation Proceeds with respect to a Simple Interest
Receivable attributable to accrued and unpaid interest thereon (but not
including interest for the then current Collection Period) but only to
the extent of any unreimbursed Simple Interest Advances.
CALCULATION OF DISTRIBUTABLE AMOUNTS. The "Class A Distributable
Amount" with respect to a Distribution Date will be an amount equal to the
sum of (i) the "Class A Principal Distributable Amount", consisting of the
Class A Percentage of the Principal Distribution Amount, plus (ii) the "Class
A Interest Distributable Amount", consisting of thirty (30) days' interest at
the Class A Pass Through Rate on the Class A Certificate Balance as of the
close of business on the last day of the preceding Collection Period. In
addition, on the Final Scheduled Distribution Date, the Class A Principal
Distributable Amount will include the lesser of (A) the Class A Percentage of
any payments of principal due and remaining unpaid on each Receivable in the
Trust as of the last day of the preceding Collection Period and (B) the
portion of such amount necessary (after giving effect to the other amounts
described above to be distributed to the Class A Certificateholders on such
Distribution Date and allocable to principal) to reduce the Class A
Certificate Balance to zero.
The "Class A Certificate Balance" will equal, initially, $ ______ and,
thereafter, shall equal the initial Class A Certificate Balance reduced by
all amounts previously distributed to Class A Certificateholders and
allocable to principal.
The "Class B Distributable Amount" with respect to a Distribution Date
shall be an amount equal to the sum of (i) the "Class B Principal
Distributable Amount", consisting of the Class B Percentage of the Principal
Distribution Amount plus (ii) the "Class B Interest Distributable Amount",
consisting of thirty (30) days' interest at the Class B Pass Through Rate on
the Class B Certificate Balance as of the close of business on the last day
of the preceding Collection Period. In addition, on the Final Scheduled
Distribution Date, the principal required to be distributed to the Class B
Certificateholders will include the lesser of (i) the Class B Percentage of
any payments of principal due and remaining unpaid with respect to the
Receivables in the Trust as of the last day of the preceding Collection
Period and (ii) the portion of the amount in clause (i) above that is
necessary (after giving effect to all other amounts distributed to Class A
and Class B Certificateholders on such Distribution Date and allocable to
principal) to reduce the Class B Certificate Balance to zero.
The "Class B Certificate Balance" shall equal, initially, $__________
and, thereafter, shall equal the initial Class B Certificate Balance, reduced
by all amounts previously distributed to Class B Certificateholders (or
deposited in the Reserve Account, but not including the Reserve Account
Initial Deposit) and allocable to principal and by Realized Losses.
CALCULATION OF AMOUNTS TO BE DISTRIBUTED. Prior to each Distribution
Date, the Servicer will calculate the Total Distribution Amount, the Class A
Distributable Amount and the Class B Distributable Amount.
The holders of the Class A Certificates will receive on any Distribution
Date, to the extent of available funds, the Class A Distributable Amount and
any outstanding Class A Interest Carryover Shortfall and Class A Principal
Carryover Shortfall (each as defined below) as of the close of the preceding
Distribution Date. On each Distribution Date on which the sum of the Class
A Interest Distributable Amount and any outstanding Class A Interest
Carryover Shortfall from the preceding Distribution Date (plus interest
on such Class A Interest Carryover Shortfall at the Class A
Pass Through Rate from such preceding Distribution Date to the current
Distribution Date, to the extent permitted by law) exceeds the Class A
Percentage of the Interest Distribution Amount (after payment of the
Servicing Fee) on such Distribution Date, the Class A Certificateholders
shall be entitled generally to receive such amounts, first, from the Class B
Percentage of the Interest Distribution Amount; second, if such amounts are
insufficient, from the amounts available in the Reserve Account; and third,
if such amounts are insufficient, from the Class B Percentage of the
Principal Distribution Amount (other than the portion thereof attributable
to Realized Losses). The "Class A Interest Carryover Shortfall" as of the
close of any Distribution Date means the excess of the Class A Interest
Distributable Amount for such Distribution Date, plus any outstanding Class
A Interest Carryover Shortfall from the preceding Distribution Date, plus
interest on such outstanding Class A Interest Carryover Shortfall, to the
extent permitted by law, at the Class A Pass Through Rate from such
preceding Distribution Date through the current Distribution Date, over the
amount of interest that the holders of the Class A Certificates actually
received on such current Distribution Date.
On each Distribution Date on which the sum of the Class A Principal
Distributable Amount and any outstanding Class A Principal Carryover
Shortfall from the preceding Distribution Date exceeds the Class A Percentage
of the Principal Distribution Amount (exclusive of the portion thereof
attributable to Realized Losses) on such Distribution Date, the Class A
Certificateholders shall be entitled to receive such amounts first, from the
Class B Percentage of the Principal Distribution Amount (other than the
portion thereof attributable to Realized Losses); second, if such amounts are
insufficient, from amounts available in the Reserve Account; and third, if
such amounts are insufficient, from the Class B Percentage of the Interest
Distribution Amount. The "Class A Principal Carryover Shortfall" as of the
close of any Distribution Date means the excess of the Class A Principal
Distributable Amount plus any outstanding Class A Principal Carryover
Shortfall from the preceding Distribution Date over the amount of principal
that the holders of the Class A Certificates actually received on such
current Distribution Date.
The holders of the Class B Certificates will receive on any Distribution
Date, to the extent of available funds, the Class B Distributable Amount and
any outstanding Class B Interest Carryover Shortfall and Class B Principal
Carryover Shortfall (each as defined below) as of the close of the preceding
Distribution Date. On each Distribution Date on which the sum of the Class B
Interest Distributable Amount and any outstanding Class B Interest Carryover
Shortfall from the preceding Distribution Date (plus interest on such Class B
Interest Carryover Shortfall at the Class B Pass Through Rate from such
preceding Distribution Date to the current Distribution Date, to the extent
permitted by law) exceeds the Class B Percentage of the Interest Distribution
Amount (after payment of the Servicing Fee) on such Distribution Date less
any portion thereof required to be distributed to the Class A
Certificateholders pursuant to their prior rights as described above, the
Class B Certificateholders shall be entitled generally to receive such
amounts, first, from the Class A Percentage of the Interest Distribution
Amount that is not otherwise required to be distributed to the Class A
Certificateholders as described above and, second, from the amount, if any,
available in the Reserve Account (after giving effect to any withdrawals
therefrom for distribution to the Class A Certificateholders on such
Distribution Date). The "Class B Interest Carryover Shortfall" as of the
close of any Distribution Date means the excess of the Class B Interest
Distributable Amount for such Distribution Date, plus any outstanding Class B
Interest Carryover Shortfall from the preceding Distribution Date, plus
interest on such outstanding Class B Interest Carryover Shortfall, to the
extent permitted by law, at the Class B Pass Through Rate from such preceding
Distribution Date through the current Distribution Date, over the amount of
interest that the holders of the Class B Certificates actually received on
such current Distribution Date.
On each Distribution Date on which the sum of the Class B Principal
Distributable Amount and any outstanding Class B Principal Carryover
Shortfall from the preceding Distribution Date exceeds the Class B Percentage
of the Principal Distribution Amount (exclusive of the portion thereof
attributable to Realized Losses) on such Distribution Date less any portion
thereof required to be distributed to the Class A Certificateholders pursuant
to their prior rights as described above, the Class B Certificateholders
shall be entitled to receive such amounts, first, from the Interest
Distribution Amount that is not otherwise required to be distributed to the
Class A or Class B Certificateholders as described above and, second, from
amounts available in the Reserve Account (after giving effect to any
withdrawals therefrom on such Distribution Date for distribution to the Class
A Certificateholders and for distribution of interest to the Class B
Certificateholders). The "Class B Principal Carryover Shortfall" as of the
close of any Distribution Date means the excess of the
Class B Principal Distributable Amount plus any outstanding Class B Principal
Carryover Shortfall from the preceding Distribution Date over the amount of
principal that the holders of Class B Certificates actually received on such
current Distribution Date.
SUBORDINATION OF THE CLASS B CERTIFICATES; RESERVE ACCOUNT
The rights of the Class B Certificateholders to receive distributions
with respect to the Receivables generally will be subordinated to the rights
of the Class A Certificateholders in the event of defaults and delinquencies
on the Receivables as described herein and provided in the Pooling and
Servicing Agreement. The protection afforded to the Class A
Certificateholders through subordination will be effected both by the
preferential right of the Class A Certificateholders to receive current
distributions with respect to the Receivables and by the establishment of the
Reserve Account. The Reserve Account will be created with an initial deposit
by the Seller of the Reserve Account Initial Deposit and will be augmented by
deposit therein on each Distribution Date of the amount, if any, remaining
from the Total Distribution Amount after the distributions due to the
Certificateholders have been made until the amount in the Reserve Account
reaches the Specified Reserve Account Balance for such Distribution Date.
The Reserve Account will not be part of or otherwise includible in the
Trust and will be a segregated trust account held by the Trustee. On each
Distribution Date, (i) if the amounts on deposit in the Reserve Account are
less than the Specified Reserve Account Balance for such Distribution Date,
the Trustee will, after payment of any amounts required to be distributed to
Certificateholders and the payment of the Servicing Fee due with respect to
the related Collection Period (including any unpaid Servicing Fees with
respect to prior Collection Periods) withdraw from the Collection Account and
deposit in the Reserve Account the amount, if any, remaining in the
Collection Account that would otherwise be distributed to the Seller, or such
lesser portion thereof as is sufficient to restore the amount in the Reserve
Account to such Specified Reserve Account Balance for such Distribution Date,
and (ii) if the amount on deposit in the Reserve Account on such Distribution
Date (after giving effect to all deposits or withdrawals therefrom on such
Distribution Date) is greater than the Specified Reserve Account Balance for
such Distribution Date, the Trustee will release and distribute any such
excess to the Seller. Upon any such distribution to the Seller, the
Certificateholders will have no rights in, or claims to, such amounts.
Amounts held from time to time in the Reserve Account will continue to
be held for the benefit of holders of the Class A Certificates and holders of
the Class B Certificates. Funds in the Reserve Account shall be invested as
provided in the Pooling and Servicing Agreement in Eligible Investments. The
Seller will be entitled to receive all investment earnings on amounts in the
Reserve Account. Investment income on amounts in the Reserve Account will
not be available for distribution to the Certificateholders or otherwise
subject to any claims or rights of the Certificateholders.
The time necessary for the Reserve Account to reach and maintain the
Specified Reserve Account Balance at any time after the Closing Date will be
affected by the delinquency, credit loss, repossession and prepayment
experience of the Receivables and, therefore, cannot be accurately predicted.
The subordination of the Class B Certificates and the Reserve Account
described above are intended to enhance the likelihood of receipt by Class A
Certificateholders of the full amount of principal and interest on the Class
A Certificates due them and to decrease the likelihood that the Class A
Certificateholders will experience losses. However, in certain
circumstances, the Reserve Account could be depleted and shortfalls could
result.
If on any Distribution Date the holders of the Class A Certificates do
not receive the sum of the Class A Distributable Amount, the Class A Interest
Carryover Shortfall and the Class A Principal Carryover Shortfall for such
Distribution Date (after giving effect to any amounts withdrawn from the
Reserve Account and the Class B Percentage of the Total Distribution Amount
and applied to such deficiency, as described above), the holders of the Class
B Certificates generally will not receive any portion of the Total
Distribution Amount. While the Class B Certificateholders are entitled to
receive amounts from the Reserve Account as described above, such entitlement
is subordinated to the rights of the Class A Certificateholders to receive
amounts from the Reserve Account as described above. If the Reserve Account
becomes depleted, the Class B Certificateholders may experience shortfalls in
the distributions due them and incur a loss on their investment.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Miller, Nash, Wiener, Hager & Carlsen LLP, the Trust
will be treated as a grantor trust for federal income tax purposes and will
not be subject to federal income tax. For additional information regarding
federal income tax consequences, see "Certain Federal Income Tax
Consequences" in the Prospectus.
ERISA CONSIDERATIONS
THE CLASS A CERTIFICATES
Subject to the considerations set forth under "ERISA Considerations --
Senior Certificates" in the Prospectus, the Class A Certificates may be
purchased by an employee benefit plan or an individual retirement account (a
"Plan") subject to ERISA or Section 4975 of the Code. A fiduciary of a Plan
must determine that the purchase of a Class A Certificate is consistent with
its fiduciary duties under ERISA and does not result in a nonexempt
prohibited transaction as defined in Section 406 of ERISA or Section 4975 of
the Code. For additional information regarding treatment of the Class A
Certificates under ERISA, see "ERISA Considerations" in the Prospectus.
The Class A Certificates may not be purchased with the assets of a Plan
if the Seller, the Trustee or any of their affiliates (a) has investment or
administrative discretion with respect to such Plan assets; (b) has authority
or responsibility to give, or regularly gives, investment advice with respect
to such Plan assets for a fee and pursuant to an agreement or understanding
that such advice (i) will serve as a primary basis for investment decisions
with respect to such Plan assets and (ii) will be based on the particular
investment needs for such Plan; or (c) is an employer maintaining or
contributing to such Plan.
THE CLASS B CERTIFICATES
The Class B Certificates may not be acquired by (a) an employee benefit
plan (as defined in Section 3(3) of ERISA) that is subject to the provisions
of Title I of ERISA, (b) a plan described in Section 4975(e)(1) of the Code
or (c) any entity whose underlying assets include plan assets by reason of a
plan's investment in the entity or which uses plan assets to acquire Class B
Certificates. By its acceptance of a Class B Certificate, each Class B
Certificateholder will be deemed to have represented and warranted that it is
not subject to the foregoing limitation. In this regard, purchasers that are
insurance companies should consult with their counsel with respect to the
United States Supreme Court case interpreting the fiduciary
responsibility rules of ERISA, John Hancock Life Ins. Co. v.
-----------------------------
Harris Trust and Sav. Bank, 114 S. Ct. 517 (1993). In
- -------------------------------------------------
John Hancock, the Supreme Court ruled that assets held in an insurance
- ------------
company's general account may be deemed to be "plan assets" for ERISA
purposes under certain circumstances. Prospective purchasers should
determine whether the decision affects their ability to make purchases of
the Class B Certificates. In particular, such an insurance company should
consider the exemptive relief granted by the Department of Labor for
transactions involving insurance company general accounts in Prohibited
Transactions Exemption 95-60, 60 Fed. Reg. 35925 (July 12, 1995). For
additional information regarding treatment of the Class B Certificates under
ERISA, see "ERISA Considerations" in the Prospectus.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement (the "Underwriting Agreement"), the Seller has agreed to cause the
Trust to sell to the Underwriter, and the Underwriter has agreed to purchase,
the entire principal amount of the Certificates.
The Seller has been advised by the Underwriter that it proposes
initially to offer the Certificates to the public at the prices set forth
herein, and to certain dealers at such prices less the initial concession not
in excess of % per Class A Certificate and % per Class B Certificate.
The Underwriter may allow and such dealers may reallow a concession not in
excess of % per Class A Certificate and % per Class B Certificate
to certain other dealers. After the initial public offering of the
Certificates, the public offering prices and such concessions may be changed.
Until the distribution of the Certificates is completed, rules of the
Commission may limit the ability of the Underwriter and certain selling group
members to bid for and purchase the Certificates. As an exception to these
rules, the Underwriter is permitted to engage in certain transactions that
stabilize the price of the Certificates. Such transactions consist of bids
or purchases for the purpose of pegging, fixing or maintaining the price of
the Certificates.
If the Underwriter creates a short position in the Certificates in
connection with the offering, i.e., if it sells more Certificates than are
set forth on the cover page of this Prospectus Supplement, the Underwriter
may reduce that short position by purchasing Certificates in the open market.
In general, the purchase of a security for the purpose of stabilization
or to reduce a short position could cause the price of the security to be
higher than it might be in the absence of such purchases.
Neither the Seller nor any Underwriter makes any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the prices of the Certificates. In
addition, neither the Seller nor any Underwriter makes any representation
that the Underwriter will engage in such transactions or that such
transactions, once commenced, will not be discontinued without notice.
The Underwriter has represented and agreed that (a) it has not offered
or sold, and will not offer or sell, any Certificates to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances
that do not constitute an offer to the public in the United Kingdom for the
purposes of the Public Offers of Securities Regulations 1995, (b) it has
complied and will comply with all applicable provisions of the Financial
Services Act 1986 of Great Britain with respect to anything done by it in
relation to the Certificates in, from or otherwise involving the United
Kingdom and (c) it has only issued or passed on and will only issue or pass
on in the United Kingdom any document in connection with the issue of the
Certificates to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1995 or is a person to whom the document may otherwise lawfully be issued or
passed on.
Upon receipt of a request by an investor who has received an electronic
Prospectus Supplement and Prospectus from the Underwriter or a request by
such investor's representative within the period during which there is an
obligation to deliver a Prospectus Supplement and Prospectus, the Seller or
the Underwriter will promptly deliver, or cause to be delivered, without
charge, a paper copy of the Prospectus Supplement and Prospectus.
LEGAL OPINIONS
Certain legal matters relating to the Certificates and certain federal
income tax matters will be passed upon for the Seller by Miller, Nash,
Wiener, Hager & Carlsen LLP. Certain legal matters relating to the
Certificates will be passed upon for the Underwriter by Brown & Wood LLP, New
York, New York.
INDEX OF TERMS
APR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Cede . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Cedel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Certificate Owners . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A Distributable Amount . . . . . . . . . . . . . . . . . . . . . . S-
Class A Interest Carryover Shortfall . . . . . . . . . . . . . . . . . . S-
Class A Interest Distributable Amount . . . . . . . . . . . . . . . . . . S-
Class A Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A Principal Carryover Shortfall . . . . . . . . . . . . . . . . . . S-
Class A Principal Distributable Amount . . . . . . . . . . . . . . . . . S-
Class B Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class B Distributable Amount . . . . . . . . . . . . . . . . . . . . . . S-
Class B Interest Carryover Shortfall . . . . . . . . . . . . . . . . . . S-
Class B Interest Distributable Amount . . . . . . . . . . . . . . . . . . S-
Class B Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class B Principal Carryover Shortfall . . . . . . . . . . . . . . . . . . S-
Class B Principal Distributable Amount . . . . . . . . . . . . . . . . . S-
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Collection Account . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Collection Period . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Cutoff Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Euroclear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Final Scheduled Distribution Date . . . . . . . . . . . . . . . . . . . S-
Final Scheduled Maturity Date . . . . . . . . . . . . . . . . . . . . . S-
Interest Distribution Amount . . . . . . . . . . . . . . . . . . . . . S-
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Liquidated Receivable . . . . . . . . . . . . . . . . . . . . . . . . . S-
Liquidation Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . S-
Pass Through Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Pool Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Pooling and Servicing Agreement . . . . . . . . . . . . . . . . . . . . . S-
Principal Distribution Amount . . . . . . . . . . . . . . . . . . . . . . S-
Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Rating Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Realized Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Receivables Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Specified Reserve Account Balance . . . . . . . . . . . . . . . . . . . S-
Tax Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Total Distribution Amount . . . . . . . . . . . . . . . . . . . . . . . S-
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Underwriter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . S-
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE SELLER OR BY THE UNDERWRITER. THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, THE CERTIFICATES OFFERED HEREBY TO ANYONE IN ANY
JURISDICTION IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE ANY SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF THIS PROSPECTUS SUPPLEMENT OR PROSPECTUS.
___________________
TABLE OF CONTENTS
PAGE
---
PROSPECTUS SUPPLEMENT
Reports to Certificateholders . . . . . . . . . . . . . . . . . . . . . . . .
Summary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Receivables Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted Average Life of the Certificates . . . . . . . . . . . . . . . . . .
Description of the Certificates . . . . . . . . . . . . . . . . . . . . . . .
Description of the Pooling and Servicing . . . . . . . . . . . . . . . . . .
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . .
ERISA Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROSPECTUS
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Incorporation of Certain Documents by
Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Summary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Receivables Pools . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted Average Life of the Certificates . . . . . . . . . . . . . . . . . .
Pool Factors and Trading Information . . . . . . . . . . . . . . . . . . . .
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of the Certificates . . . . . . . . . . . . . . . . . . . . . . .
Description of the Pooling and Servicing Agreement . . . . . . . . . . . . .
Certain Legal Aspects of the Receivables . . . . . . . . . . . . . . . . . .
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . .
ERISA Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UNTIL 90 DAYS AFTER THE DATE OF THIS PROSPECTUS SUPPLEMENT, ALL DEALERS
EFFECTING TRANSACTIONS IN THE CERTIFICATES OFFERED BY THIS PROSPECTUS
SUPPLEMENT, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. THIS IS
IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS WHEN ACTING AS UNDERWRITER(S) AND WITH RESPECT
TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
$( )
U.S. BANCORP AUTO TRUST 199_ -( )
$
____% ASSET BACKED CERTIFICATES, CLASS A
$
____% ASSET BACKED CERTIFICATES, CLASS B
U.S BANCORP AUTO RECEIVABLES CORPORATION
SELLER
____________________
PROSPECTUS SUPPLEMENT
____________________
(UNDERWRITER)
____________________
DATED , 199
____________________
____________________
PROSPECTUS
U.S. BANCORP AUTO TRUSTS
ASSET BACKED CERTIFICATES
---------------------
U.S. BANCORP AUTO RECEIVABLES CORPORATION
Seller
---------------------
UNITED STATES NATIONAL BANK OF OREGON
Servicer
--------------------
The Asset Backed Certificates (the "Certificates") described herein may
be sold from time to time in one or more series, in amounts, at prices and on
terms to be determined at the time of sale and to be set forth in a
supplement to this Prospectus (a "Prospectus Supplement"). Each series of
Certificates will be issued by a trust to be formed with respect to such
series (each, a "Trust") pursuant to a Pooling and Servicing Agreement to be
entered into among U.S. Bancorp Auto Receivables Corporation (the "Seller"),
United States National Bank of Oregon ("U.S. Bank"), as servicer (the
"Servicer") and the Trustee specified in the related Prospectus Supplement
(the "Trustee"). The Certificates of a series will represent fractional
undivided interests in the related Trust. The related Prospectus Supplement
will specify which class or classes of Certificates, if any, of the related
series are being offered thereby. The property of each Trust will include a
pool of motor vehicle retail installment sale contracts secured by new or
used automobiles and light duty trucks (the "Receivables"), certain monies
due or received thereunder on and after the applicable Cutoff Date set forth
in the related Prospectus Supplement, security interests in the vehicles
financed thereby and certain other property, all as described herein and in
the related Prospectus Supplement. In addition, if so specified in the
related Prospectus Supplement, the property of the Trust will include monies
on deposit in a trust account (the "Pre-Funding Account") to be established
with the Trustee, which will be used to purchase additional motor vehicle
retail installment sale contracts (the "Subsequent Receivables") from the
Seller from time to time during the Funding Period specified in the related
Prospectus Supplement.
Except as otherwise provided in the related Prospectus Supplement, each
class of Certificates of any series will represent the right to receive a
specified amount of payments of principal and interest on the related
Receivables, at the rates, on the dates and in the manner described herein
and in the related Prospectus Supplement. If a series includes multiple
classes of Certificates, the rights of one or more classes of Certificates to
receive payments may be senior or subordinate to the rights of one or more of
the other classes of such series. The rate of payment in respect of
distributions in respect of the Certificate Balance of the Certificates of
any class will depend on the rate and timing of payments (including
prepayments, defaults, liquidations and repurchases of Receivables) on the
related Receivables. A rate of payment lower or higher than that anticipated
may affect the weighted average life of each class of Certificates in the
manner described herein and in the related Prospectus Supplement.
PROSPECTIVE INVESTORS SHOULD CONSIDER THE FACTORS SET FORTH UNDER
"SPECIAL CONSIDERATIONS" HEREIN AND IN THE RELATED PROSPECTUS SUPPLEMENT.
EXCEPT AS OTHERWISE SPECIFIED IN THE RELATED PROSPECTUS SUPPLEMENT, THE
CERTIFICATES OF A SERIES REPRESENT BENEFICIAL INTERESTS IN, THE RELATED TRUST
ONLY AND DO NOT REPRESENT OBLIGATIONS OF OR INTERESTS IN, AND ARE NOT
GUARANTEED OR INSURED BY, U.S. BANCORP, UNITED STATES NATIONAL BANK OF
OREGON, U.S. BANCORP AUTO RECEIVABLES CORPORATION OR ANY OF THEIR RESPECTIVE
AFFILIATES. NONE OF THE CERTIFICATES OR THE RECEIVABLES ARE GUARANTEED OR
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, ANY OTHER GOVERNMENT
AGENCY OR INSTRUMENTALITY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Retain this Prospectus for future reference. This Prospectus may not be used
to consummate sales of Certificates offered hereby unless accompanied by a
Prospectus Supplement.
------------------------
The date of this Prospectus is ____________, 199__.
AVAILABLE INFORMATION
The Seller, as originator of each Trust, has filed with the Securities
and Exchange Commission (the "Commission") a Registration Statement (together
with all amendments and exhibits thereto, referred to herein as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Certificates offered pursuant to this
Prospectus. For further information, reference is made to the Registration
Statement which may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549; and at the Commission's regional offices at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and
Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of
the Registration Statement may be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a Web site at http://www.sec.gov
containing reports, proxy and information statements and other information
regarding registrants, including U.S. Bancorp Auto Receivables Corporation,
that file electronically with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All documents filed by the Seller, as originator of the Trust referred
to in the accompanying Prospectus Supplement, pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), subsequent to the date of this Prospectus and prior to the
termination of the offering of the Certificates offered by such Trust shall
be deemed to be incorporated by reference in this Prospectus. Any statement
contained herein or in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Seller will provide without charge to each person, including any
beneficial owner of the Certificates, to whom a copy of this Prospectus is
delivered, on the written or oral request of any such person, a copy of any
or all of the documents incorporated herein or in any related Prospectus
Supplement by reference, except the exhibits to such documents (unless such
exhibits are specifically incorporated by reference in such documents).
Requests for such copies should be directed to Secretary, U.S. Bancorp Auto
Receivables Corporation, 111 S.W. Fifth Avenue, Second Floor, Portland,
Oregon 97204 (telephone (503) 731-1817).
SUMMARY OF TERMS
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus and by reference
to the information with respect to the Certificates of any series contained
in the related Prospectus Supplement to be prepared and delivered in
connection with the offering of such Certificates. Certain capitalized terms
used in this summary are defined elsewhere in this Prospectus on the pages
indicated in the "Index of Terms".
Issuer . . . . . . . . . . . . . . With respect to each series of
Certificates, the trust (referred
to herein as the "Trust" or the
"Issuer") to be formed pursuant to
a Pooling and Servicing Agreement
(as amended and supplemented from
time to time, the "Pooling and
Servicing Agreement") among the
Trustee, U.S. Bancorp Auto
Receivables Corporation, as Seller,
and United States National Bank of
Oregon ("U.S. Bank"), as Servicer.
Seller . . . . . . . . . . . . . . U.S. Bancorp Auto Receivables
Corporation (the "Seller").
Servicer . . . . . . . . . . . . . U.S. Bank (the "Servicer").
Trustee . . . . . . . . . . . . . . With respect to each series of
Certificates, the Trustee specified
in the related Prospectus
Supplement.
The Certificates . . . . . . . . . A series will include one or more
classes of Certificates. The
related Prospectus Supplement will
specify which class or classes, if
any, of the Certificates are being
offered thereby.
Unless otherwise specified in the
related Prospectus Supplement,
Certificates will be available for
purchase in a minimum denomination
of $1,000 and in integral multiples
thereof and will be available in
book-entry form only. Unless
otherwise specified in the related
Prospectus Supplement,
Certificateholders will be able to
receive Definitive Certificates
only in the limited circumstances
described herein or in the related
Prospectus Supplement. See
"Description of the Certificates --
Definitive Certificates".
Unless otherwise specified in the
related Prospectus Supplement, each
class of Certificates will have a
stated Certificate Balance
specified in the related Prospectus
Supplement (the "Certificate
Balance") and will accrue interest
on such Certificate Balance at a
specified rate (with respect to
each class of Certificates, the
"Pass Through Rate"). Each class
of Certificates may have a
different Pass Through Rate, which
may be a fixed, variable or
adjustable Pass Through Rate, or
any combination of the foregoing.
The related Prospectus Supplement
will specify the Pass Through Rate
for each class of Certificates or
the method for determining the Pass
Through Rate.
With respect to a series that
includes two or more classes of
Certificates, each class may differ
as to timing and priority of
distributions, seniority,
allocations of losses, Pass Through
Rate or amount of distributions in
respect of principal or interest,
or distributions in respect of
principal or interest in respect of
any such class or classes may or
may not be made upon the occurrence
of specified events or on the basis
of collections from designated
portions of the Receivables Pool.
In addition, a series may include
one or more classes of Certificates
("Strip Certificates") entitled to
(i) distributions in respect of
principal with disproportionate,
nominal or no interest
distributions or (ii) interest
distributions with
disproportionate, nominal or no
distributions in respect of
principal.
If a series of securities includes
two or more classes of
Certificates, distributions in
respect of one or more classes of
Certificates may be subordinated in
priority of payment to payments on
one or more other classes of
Certificates to the extent
specified in the related Prospectus
Supplement.
If the Servicer exercises its
option to purchase the Receivables
of a Trust (or, if not, and if and
to the extent provided in the
related Prospectus Supplement,
satisfactory bids for the purchase
of such Receivables are received),
in the manner and on the respective
terms and conditions described
under "Description of the Pooling
and Servicing Agreement --
Termination", Certificateholders
will receive as a prepayment an
amount in respect of the
Certificates as specified in the
related Prospectus Supplement. In
addition, if the related Prospectus
Supplement provides that the
property of a Trust will include a
Pre-Funding Account,
Certificateholders may receive a
partial prepayment of principal on
or immediately following the end of
the Funding Period in an amount and
manner specified in the related
Prospectus Supplement. In the
event of such partial prepayment,
the Certificateholders may be
entitled to receive a prepayment,
in the amount and to the extent
provided in the related Prospectus
Supplement.
The Trust Property . . . . . . . . The property of each Trust will
include a pool of motor vehicle
retail installment sale contracts
secured by new or used automobiles
or light duty trucks (the
"Receivables"), including rights to
receive certain payments made with
respect to such Receivables,
security interests in the vehicles
financed thereby (the "Financed
Vehicles"), certain accounts and
the proceeds thereof and any
proceeds from claims on certain
related insurance policies. On the
Closing Date specified in the
related Prospectus Supplement with
respect to a Trust, the Seller
will, if so specified in such
Prospectus Supplement, sell or
transfer Receivables (the "Initial
Receivables") having an aggregate
principal balance specified in the
related Prospectus Supplement as of
the dates specified therein (the
"Initial Cutoff Date") to such
Trust pursuant to the related
Pooling and Servicing Agreement
among the Seller, the Servicer and
the Trustee. A Prospectus
Supplement may specify that not all
of the Receivables will be sold to
the Trust on the Closing Date and
that some Receivables will be sold
to the Trust during the Funding
Period (which may include the
Closing Date) as described below.
The property of each Trust will
also include amounts on deposit in
certain trust accounts, including
the related Collection Account, any
Pre-Funding Account and any other
account identified in the
applicable Prospectus Supplement.
To the extent provided in the
related Prospectus Supplement, the
Seller will be obligated (subject
only to the availability thereof)
to sell, and the related Trust will
be obligated to purchase (subject
to the satisfaction of certain
conditions described in the
applicable Pooling and Servicing
Agreement), additional Receivables
(the "Subsequent Receivables") from
time to time (as frequently as
daily) during the Funding Period
specified in the related Prospectus
Supplement having an aggregate
principal balance approximately
equal to the amount on deposit in
the Pre-Funding Account (the
"Pre-Funded Amount") on such
Closing Date.
The Receivables arise or will arise
from loans originated by motor
vehicle dealers (the "Dealers") and
purchased by subsidiaries or
affiliates of U.S. Bancorp (the
"Originators") pursuant to
agreements with the Dealers. The
Receivables will be sold to the
Seller and will be selected from
the contracts owned by the
Originators based on the criteria
specified in the Pooling and
Servicing Agreement and described
herein and in the related
Prospectus Supplement.
Credit and Cash Flow Enhancement . If and to the extent specified in
the related Prospectus Supplement,
credit and cash flow enhancement
with respect to a Trust or any
class or classes of Certificates
may include any one or more of the
following: subordination of one or
more other classes of Certificates,
a Reserve Account, over-
collateralization, letters of
credit, credit or liquidity
facilities, surety bonds,
guaranteed investment contracts,
swaps or other interest rate
protection agreements, repurchase
obligations, yield supplement
agreements or accounts, other
agreements with respect to third
party payments or other support,
cash deposits or other
arrangements. Unless otherwise
specified in the related Prospectus
Supplement, any form of credit or
cash flow enhancement will have
certain limitations and exclusions
from coverage thereunder, which
will be described in the related
Prospectus Supplement.
Reserve Account . . . . . . . . . . If specified in the related
Prospectus Supplement, a Reserve
Account will be created for a Trust
with an initial deposit by the
Seller of cash or certain
investments having a value equal to
the amount specified in the related
Prospectus Supplement. To the
extent specified in the related
Prospectus Supplement, funds in the
Reserve Account will thereafter be
supplemented by the deposit of
amounts remaining on Distribution
any Date after making all other
distributions required on such date
and any amounts deposited from time
to time from the Pre-Funding
Account in connection with a
purchase of Subsequent Receivables.
Amounts in the Reserve Account will
be available to cover shortfalls in
amounts due to the holders of those
classes of Certificates specified
in the related Prospectus
Supplement in the manner and under
the circumstances specified
therein. The related Prospectus
Supplement will also specify to
whom and the manner and
circumstances under which amounts
on deposit in the Reserve Account
(after giving effect to all other
required distributions to be made
by the applicable Trust) in excess
of the Specified Reserve Account
Balance (as defined in the related
Prospectus Supplement) will be
distributed.
Pooling and Servicing Agreement . . With respect to each Trust, the
Seller will sell the related
Receivables to such Trust pursuant
to a Pooling and Servicing
Agreement. The Servicer will agree
with such Trust to be responsible
for servicing, managing,
maintaining custody of and making
collections on the Receivables.
Unless otherwise specified in the
related Prospectus Supplement, the
Servicer will advance scheduled
payments under each Precomputed
Receivable which shall not have
been timely made (a "Precomputed
Advance"), to the extent that the
Servicer, in its sole discretion,
expects to recoup the Precomputed
Advance from subsequent payments on
or with respect to such Receivable
or from other Precomputed
Receivables. With respect to
Simple Interest Receivables, the
Servicer shall advance any interest
shortfall (a "Simple Interest
Advance" and, together with a
Precomputed Advance, an "Advance").
The Servicer shall be entitled to
reimbursement of Advances from
subsequent payments on or with
respect to the Receivables to the
extent described herein and in the
related Prospectus Supplement.
Unless otherwise provided in the
related Prospectus Supplement, the
Seller will be obligated to
repurchase any Receivable if the
interest of the applicable Trust in
such Receivable is materially
adversely affected by a breach of
any representation or warranty made
by the Seller with respect to the
Receivable, if the breach has not
been cured following the discovery
by or notice to the Seller of the
breach. The Seller's obligation to
make such repurchase is contingent
upon the related Originator's
repurchase of such Receivable from
the Seller on account of such
breach.
Unless otherwise provided in the
related Prospectus Supplement, the
Servicer will be obligated to
purchase or make Advances with
respect to any Receivable if, among
other things, it extends the date
for final payment by the Obligor of
such Receivable beyond the
applicable Final Scheduled Maturity
Date (as defined in the related
Prospectus Supplement, the "Final
Scheduled Maturity Date"), changes
the annual percentage rate ("APR")
or amount of a scheduled payment of
such Receivable or fails to
maintain a perfected security
interest in the related Financed
Vehicle.
Unless otherwise specified in the
related Prospectus Supplement, the
Servicer will be entitled to
receive a fee for servicing the
Receivables of each Trust equal to
a specified percentage of the
aggregate principal balance of the
related Receivables Pool, as set
forth in the related Prospectus
Supplement, plus certain late fees,
prepayment charges and other
administrative fees or similar
charges. See "Description of the
Pooling and Servicing Agreement --
Servicing Compensation and Payment
of Expenses" herein and in the
related Prospectus Supplement.
Certain Legal Aspects of the
Receivables; Repurchase
Obligations . . . . . . . . . . . . In connection with the sale of
Receivables to a Trust, security
interests in the Financed Vehicles
securing such Receivables will be
assigned by the related Originator
to the Seller and by the Seller to
such Trust. Due to administrative
burden and expense, the
certificates of title to the
Financed Vehicles will not be
amended to reflect either such
assignment. In the absence of such
an amendment, such Trust may not
have a perfected security interest
in the Financed Vehicles securing
the Receivables in some states.
Unless otherwise specified in the
related Prospectus Supplement, the
Seller will be obligated to
repurchase any Receivable as to
which a first perfected security
interest in the name of the related
Originator in the related Financed
Vehicle shall not exist as of the
date such Receivable is purchased
by a Trust, if such breach shall
materially adversely affect the
interest of such Trust in such
Receivable and if such failure
shall not have been cured by the
last day of the second (or, if the
Seller elects, the first) month
following the discovery by or
notice to the Seller of such
failure. The Seller's obligation
to make such repurchase is
contingent upon the related
Originator performing its
obligation to repurchase such
Receivable from the Seller on
account of such failure. If such
Trust does not have a perfected
security interest in a Financed
Vehicle, its ability to realize on
such Financed Vehicle in the event
of a default may be adversely
affected. To the extent the
security interest is perfected,
such Trust will have a prior claim
over subsequent purchasers of such
Financed Vehicle and holders of
subsequently perfected security
interests. However, as against
liens for repairs of Financed
Vehicles or for taxes unpaid by an
Obligor under a Receivable, or
because of fraud or negligence,
such Trust could lose the priority
of its security interest or its
security interest in Financed
Vehicles. None of the Seller, any
Originator or the Servicer will
have any obligation to repurchase a
Receivable as to which any of the
aforementioned occurrences result
in a Trust's losing the priority of
its security interest or its
security interest in the related
Financed Vehicle after the Closing
Date.
Federal and state consumer
protection laws impose requirements
upon creditors in connection with
extensions of credit and
collections of retail installment
loans, and certain of these laws
make an assignee of such a loan
liable to the obligor thereon for
any violation by the lender.
Unless otherwise specified in the
related Prospectus Supplement, the
Seller will be obligated to
repurchase any Receivable which
fails to comply with such
requirements. The Seller's
obligation to make such repurchase
is contingent upon the related
Originator performing its
obligation to repurchase such
Receivable from the Seller on
account of such failure.
Tax Status . . . . . . . . . . . . Except as otherwise provided in the
Prospectus Supplement, upon the
issuance of the related series of
Certificates, Tax Counsel to such
Trust will deliver an opinion to
the effect that such Trust will be
treated as a grantor trust for
federal income tax purposes and
will not be subject to federal
income tax.
ERISA Considerations . . . . . . . Subject to the considerations
discussed under "ERISA
Considerations" herein and in the
related Prospectus Supplement, and
unless otherwise specified therein,
any Certificates that are not
subordinated to any other class of
Certificates are eligible for
purchase by employee benefit plans.
Unless otherwise specified in the
related Prospectus Supplement, the
Certificates of any series that are
subordinated to any other
Certificates of that series may not
be acquired by any employee benefit
plan subject to the Employee
Retirement Income Security Act of
1974, as amended ("ERISA"), or by
any individual retirement account.
See "ERISA Considerations" herein
and in the related Prospectus
Supplement.
SPECIAL CONSIDERATIONS
CERTAIN LEGAL ASPECTS -- SECURITY INTERESTS IN FINANCED VEHICLES. In
connection with the sale of Receivables to a Trust, security interests in the
Financed Vehicles securing such Receivables will be assigned by the
Originators to the Seller and by the Seller to such Trust simultaneously with
the sale of such Receivables to such Trust. Due to administrative burden and
expense, the certificates of title to the Financed Vehicles will not be
amended to reflect the assignment to the Trust. In the absence of such an
amendment, such Trust may not have a perfected security interest in the
Financed Vehicles securing the Receivables in some states. Unless otherwise
provided in the related Prospectus Supplement, the Seller will be obligated
to repurchase any Receivable sold to such Trust as to which a perfected
security interest in the name of the Seller in the Financed Vehicle securing
such Receivable shall not exist as of the date such Receivable is transferred
to such Trust, if such failure shall materially adversely affect the interest
of such Trust in such Receivable and if such failure shall not have been
cured by the last day of the second (or, if the Seller elects, the first)
month following the discovery by or notice to the Seller of such breach. The
Seller's obligation to make such repurchase is contingent upon the related
Originator performing its obligation to repurchase such Receivable from the
Seller on account of such failure. If such Trust does not have a perfected
security interest in a Financed Vehicle, its ability to realize on such
Financed Vehicle in the event of a default may be adversely affected. To the
extent the security interest is perfected, such Trust will have a prior claim
over subsequent purchasers of such Financed Vehicle and holders of
subsequently perfected security interests. However, as against liens for
repairs of Financed Vehicles or for taxes unpaid by an Obligor under a
Receivable, or through fraud or negligence, such Trust could lose the
priority of its security interest or its security interest in a Financed
Vehicle. None of the Seller, the Servicer or any Originator will have any
obligation to repurchase a Receivable as to which any of the aforementioned
occurrences result in such Trust's losing the priority of its security
interest or its security interest in such Financed Vehicle after the date
such security interest was conveyed to such Trust.
Federal and state consumer protection laws impose requirements upon
creditors in connection with extensions of credit and collections of retail
installment loans and certain of these laws make an assignee of such a loan
(such as such Trust) liable to the obligor thereon for any violation by the
lender. The application of such laws could render a Receivable unenforceable
or otherwise uncollectible or result in liability to a Trust. Unless
otherwise specified in the related Prospectus Supplement, the Seller will be
obligated to repurchase any Receivable which fails to comply with such
requirements. The Seller's obligation to make such repurchase is contingent
upon the related Originator performing its obligation to repurchase such
Receivable from the Seller on account of such failure.
CERTAIN LEGAL ASPECTS -- INSOLVENCY CONSIDERATIONS. The Originators.
Each Originator intends that the transfer of the Receivables by it to the
Seller constitutes a sale and, accordingly, that the Receivables will not be
a part of the assets of such Originator in the event of the appointment of a
conservator or receiver of such Originator and will not be available to
creditors of such Originator. However, in the event of an insolvency of an
Originator, it is possible that a conservator or receiver for, or a creditor
of, such Originator may argue that the transaction between such Originator
and the Seller was a pledge of the Receivables in connection with a borrowing
by such Originator rather than a true sale or that the Seller should be
consolidated with such Originator. Such an attempt, even if unsuccessful,
could result in delays in distributions on the Certificates.
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") significantly expanded the powers of the Federal Deposit Insurance
Corporation ("FDIC") as a conservator or receiver of insolvent depository
institutions. To the extent that an Originator has granted a first priority
perfected security interest in the Receivables to the Seller, and the
interest is validly perfected by the Seller and by the Trust as the Seller's
assignee and was not taken in contemplation of insolvency or with the intent
to hinder delay or defraud such Originator's creditors, that security
interest should not be subject to avoidance by the FDIC as conservator or
receiver of such Originator. If, however, the FDIC were to take a contrary
position, such as by requiring the Trustee to establish its rights in the
Receivables by submitting to and complying with the administrative claims
procedure established under FIRREA, delays in payments on the Certificates
and possible reductions in the amounts of those payments could occur. In
addition, under FIRREA, the FDIC may disaffirm or repudiate any contract to
which an insolvent depository institution is a party, the performance of
which is determined to be burdensome, and the disaffirmance of which is
determined to promote the orderly administration of such institution's
affairs. If the FDIC were to successfully contend that the transfer of the
Receivables evidences a secured borrowing and that it has the power to
repudiate such borrowing, the effect of such repudiation could be to
accelerate the maturity of the Certificates. In the event of such
acceleration, the amount paid on the Certificates would depend, among other
things, on the amount which could be realized from the sale or other
disposition of the Receivables at such time. Although the Pooling and
Servicing Agreement provides for the replacement of the Servicer as servicer
of the Receivables in the event of the appointment of a conservator or
receiver of the Servicer, the FDIC as conservator or receiver may enforce
most types of contracts, including the Pooling and Servicing Agreement,
pursuant to their terms, notwithstanding any such provision. The FDIC, as
conservator or receiver, may also transfer to a new obligor an insolvent
depository institution's assets and liabilities (including, in the event that
the transfer of the Receivables were deemed to evidence a secured borrowing,
the Receivables and the liability evidenced by the borrowing) without the
approval of the institution's creditors (including, in the event the transfer
of the Receivables were deemed to evidence a secured borrowing, the Seller or
the Trust, as assignee of the Seller).
The Seller. The Seller intends that the sale of the Receivables by the
Seller to each Trust is a valid sale of the Receivables to such Trust.
Notwithstanding the foregoing, if the Seller were to become a debtor in a
bankruptcy case under Title 11 of the United States Code (the "Bankruptcy
Code") (or if the Seller's parent, U.S. Bancorp, were to become a debtor in
a bankruptcy case under the Bankruptcy Code and the assets of the Seller
were consolidated with those of U.S. Bancorp) and a creditor or trustee-in-
bankruptcy of such debtor or such debtor itself were to take the position that
the sale of Receivables to such Trust should instead be treated as a pledge of
such Receivables to secure a borrowing of such debtor, delays in payments of
collections of Receivables to the related Certificateholders could occur or
(should the court rule in favor of any such trustee, debtor or creditor)
reductions in the amounts of such payments could result. If the transfer of
Receivables to a Trust is treated as a pledge instead of a sale, a tax or
government lien on the property of the Seller arising before the transfer of a
Receivable to such Trust may have priority over such Trust's interest in such
Receivable. If the transactions contemplated herein are treated as a sale, the
Receivables would not be part of the Seller's bankruptcy estate and would not
be available to the Seller's creditors.
General. In Octagon Gas Systems, Inc. v. Rimmer, 995 F.2d 948 (10th
Cir. 1993), the U.S. Court of Appeals for the Tenth Circuit determined that
"accounts," a defined term under the Uniform Commercial Code, would be
included in the bankruptcy estate of a transferor regardless of whether the
transfer is treated as a sale or a secured loan. Although the Receivables
are likely to be viewed as "chattel paper," as defined under the Uniform
Commercial Code, rather than as accounts, the Octagon holding is equally
applicable to chattel paper. The circumstances under which the Octagon ruling
would apply are not fully known and the extent to which the Octagon decision
will be followed in other courts or outside of the Tenth Circuit is not
certain. If the holding in the Octagon case were applied in a bankruptcy of
the Seller, however, even if the transfer of Receivables to the Trust were
treated as a sale, the Receivables would be part of the Seller's bankruptcy
estate and would be subject to claims of certain creditors, and delays and
reductions in payments to the Certificateholders could result.
TRUST'S RELATIONSHIP TO THE SELLER AND ITS AFFILIATES; LACK OF RECOURSE
TO ORIGINATORS, THE SELLER AND ITS AFFILIATES. None of U.S. Bancorp, U.S.
Bank, any of the Originators or any of their affiliates is generally
obligated to make any payments in respect of the Certificates or the
Receivables of the related Trust. However, in connection with the sale of
Receivables by the Seller to a Trust, the Seller will make representations
and warranties with respect to the characteristics of such Receivables and,
in certain circumstances, the Seller may be required to repurchase
Receivables with respect to which such representations and warranties have
been breached. The Seller's obligation to make such repurchase is contingent
upon the related Originator performing its obligation to repurchase such
Receivable from the Seller. See "Description of
the Pooling and Servicing Agreement -- Sale and Assignment of Receivables".
In addition, under certain circumstances, the Servicer may be required to
purchase Receivables. See "Description of the Pooling and Servicing
Agreement -- Servicing Procedures". Moreover, if U.S. Bank were to cease
acting as Servicer, delays in processing payments on the Receivables and
information in respect thereof could occur and result in delays in payments
to the Certificateholders.
SUBORDINATION; LIMITED ASSETS. To the extent specified in the related
Prospectus Supplement, distributions of interest and principal on one or more
classes of Certificates of a series may be subordinated in priority of
payment to interest and principal due one or more other classes of
Certificates of such series. Moreover, each Trust will not have, nor is it
permitted or expected to have, any significant assets or sources of funds
other than the Receivables and, to the extent provided in the related
Prospectus Supplement, a Pre-Funding Account, a Reserve Account and any other
credit or cash flow enhancement. The Certificates of any series will
represent interests solely in the related Trust and will not be insured or
guaranteed by any Originator, the Seller, any of their affiliates, the
applicable Trustee or any other person or entity. Consequently, holders of
the Certificates of any series must rely for repayment upon payments on the
related Receivables and, if and to the extent available, amounts on deposit
in the Pre-Funding Account (if any), the Reserve Account (if any) and any
other credit or cash flow enhancement, all as specified in the related
Prospectus Supplement.
REGIONAL ECONOMIC CONDITIONS. Economic conditions in the states where
the Obligors reside may affect the delinquency, loan loss and repossession
experience of the Trust with respect to the Receivables. Unless otherwise
specified in the related Prospectus Supplement, all of the Receivables have
been, or will be, originated or acquired by the Seller in the States of
Oregon, Washington, California, Idaho, Utah and Nevada. Consequently, the
rate of payments and defaults with respect to the Receivables owned by a
Trust will be sensitive to economic and social conditions in the northwestern
United States and in the States of Oregon, Washington, California, Idaho,
Utah and Nevada in particular.
MATURITY AND PREPAYMENT CONSIDERATIONS. All the Receivables are
prepayable at any time. (For this purpose the term "prepayments" includes
prepayments in full, partial prepayments (including those related to rebates
of extended warranty contract costs and insurance premiums) and liquidations
due to default, as well as receipts of proceeds from physical damage, credit
life and disability insurance policies and certain other Receivables
repurchased for administrative reasons.) The rate of prepayments on the
Receivables may be influenced by a variety of economic, social and other
factors, including the fact that an Obligor generally may not sell or
transfer the Financed Vehicle securing a Receivable without the consent of
the Originator. The rate of prepayment on the Receivables may also be
influenced by the structure of the loan. In addition, under certain
circumstances, the Seller will be obligated to repurchase Receivables
pursuant to a Pooling and Servicing Agreement as a result of breaches of
representations and warranties and, under certain circumstances, the Servicer
will be obligated to purchase Receivables pursuant to such Pooling and
Servicing Agreement as a result of breaches of certain covenants. See
"Description of the Pooling and Servicing Agreement -- Sale and Assignment of
Receivables". Any reinvestment risks resulting from a faster or slower
incidence of prepayment of Receivables held by a given Trust will be borne
entirely by the Certificateholders of the related series of Certificates.
See also "Description of the Pooling and Servicing Agreement -- Termination"
regarding the Servicer's option to purchase the Receivables of a given
Receivables Pool.
RISK OF COMMINGLING. With respect to each Trust, the Servicer will
deposit all payments on the related Receivables (from whatever source) and
all proceeds of such Receivables collected during each Collection Period
into the Collection Account of such Trust within two business days of
receipt thereof. However, in the event that U.S. Bank satisfies certain
requirements for monthly or less frequent remittances and the Rating
Agencies (as such term is defined in the related Prospectus Supplement, the
"Rating Agencies") affirm their ratings of the related Certificates at the
initial level, then for so long as U.S. Bank is the Servicer and provided
that (i) there exists no Servicer Default and (ii) each other condition to
making such monthly or less frequent deposits as may be specified by the
Rating Agencies and described in the related Prospectus Supplement is
satisfied, the Servicer will not be required to deposit such amounts into
the Collection Account of such Trust until on or before the business day
preceding each Distribution Date. The Servicer will deposit the aggregate
Purchase Amount of Receivables purchased by the Servicer into the applicable
Collection Account on or before the business day preceding each Distribution
Date. Pending deposit into such Collection Account, collections may be
invested by the Servicer at its own risk and for its own benefit and will
not be segregated from funds of the Servicer. If the Servicer were unable
to remit such funds, the applicable Certificateholders might incur a loss.
To the extent set forth in the related Prospectus Supplement, the Servicer
may, in order to satisfy the requirements described above, obtain a letter
of credit or other security for the benefit of the related Trust to secure
timely remittances of collections on the related Receivables and payment of
the aggregate Purchase Amount with respect to Receivables purchased by the
Servicer.
BOOK-ENTRY REGISTRATION. Unless otherwise specified in the related
Prospectus Supplement, each class of Certificates of a given series will be
initially represented by one or more certificates registered in the name of
Cede & Co. ("Cede"), or any other nominee for the Depository Trust Company
("DTC") set forth in the related Prospectus Supplement (Cede, or such other
nominee, "DTC's Nominee"), and will not be registered in the names of the
holders of the Certificates of such series or their nominees. Because of
this, unless and until Definitive Certificates for such series are issued,
holders of such Certificates will not be recognized by the Trustee as
"Certificateholders" (as such terms is used herein or in the related Pooling
and Servicing Agreement). Hence, until Definitive Certificates are issued,
holders of such Certificates will only be able to exercise the rights of
Certificateholders indirectly through DTC and its participating
organizations. See "Description of the Certificates --
Book-Entry Registration" and "-- Definitive Certificates".
THE TRUSTS
With respect to each series of Certificates, the Seller will establish a
separate Trust pursuant to the respective Pooling and Servicing Agreement
for the transactions described herein and in the related Prospectus
Supplement. The property of each Trust will include a pool (a "Receivables
Pool") of motor vehicle retail installment sales contracts between the
respective dealers (the "Dealers") and purchasers (the "Obligors") of new
and used automobiles or light duty trucks and all payments due thereunder on
and after the applicable cutoff date (as such term is defined in the related
Prospectus Supplement, a "Cutoff Date") in the case of Precomputed
Receivables and all payments received thereunder on and after the applicable
Cutoff Date in the case of Simple Interest Receivables. The Receivables of
each Receivables Pool were or will be originated by the Dealers and
purchased by the Originators, directly or indirectly, pursuant to agreements
with Dealers ("Dealer Agreements"). Such Receivables will continue to be
serviced by the Servicer and evidence indirect financing made available by
the Originators to the Obligors. On or prior to the applicable Closing
Date, the Originators will sell the Receivables to the Seller. On the
applicable Closing Date, the Seller will sell the Initial Receivables of the
applicable Receivables Pool to the Trust to the extent, if any, specified in
the related Prospectus Supplement. To the extent so provided in the related
Prospectus Supplement, Subsequent Receivables will be conveyed to the Trust
as frequently as daily during the Funding Period. Any Subsequent
Receivables so conveyed will also be assets of the applicable Trust. The
property of each Trust will also include (i) such amounts as from time to
time may be held in separate trust accounts established and maintained
pursuant to the related Pooling and Servicing Agreement and the proceeds of
such accounts, as described herein and in the related Prospectus Supplement;
(ii) security interests in the Financed Vehicles and any other interest of
the Seller in such Financed Vehicles; (iii) the rights to proceeds from
claims on certain physical damage, credit life and disability insurance
policies covering the Financed Vehicles or the Obligors, as the case may be;
(iv) the interest of the Seller in any proceeds from recourse, if any, to
Dealers on Receivables or Financed Vehicles with respect to which the
Servicer has determined that eventual repayment in full is unlikely; (v) any
property that shall have secured a Receivable and that shall have been
acquired by the applicable Trust; and (vi) any and all proceeds of the
foregoing. To the extent specified in the related Prospectus Supplement, a
Pre-Funding Account, the right to receive funds from a Reserve Account or
other form of credit enhancement may be a part of the property of any given
Trust or may be held by the Trustee for the benefit of holders of the
related Certificates. Additionally, pursuant to the Dealer Agreements, the
Dealers have an obligation after origination to repurchase Receivables as to
which Dealers have made certain misrepresentations.
The Servicer will continue to service the Receivables held by each Trust
and will receive fees for such services. See "Description of the Pooling and
Servicing Agreement -- Servicing Compensation and Payment of Expenses" herein
and in the related Prospectus Supplement. To facilitate the servicing of the
Receivables, each Trustee will authorize the Servicer to retain physical
possession of the Receivables held by each Trust and other documents relating
thereto as custodian for each such Trust. Due to the administrative burden
and expense, the certificates of title to the Financed Vehicles will not be
amended to reflect the sale and assignment of the security interest in the
Financed Vehicles to each Trust. In the absence of such an amendment, a
Trust may not have a perfected security interest in the Financed Vehicles in
all states. See "Certain Legal Aspects of the Receivables" and "Description
of the Pooling and Servicing Agreement -- Sale and Assignment of
Receivables".
If the protection provided to any Certificateholders of a series by the
subordination, if any, of any other class of Certificates, by the Reserve
Account, if any, or by any other credit enhancement for such series is
insufficient, such Certificateholders would have to look principally to the
Obligors on the related Receivables, the proceeds from the repossession and
sale of Financed Vehicles which secure defaulted Receivables and the proceeds
from any recourse against Dealers with respect to such Receivables. In such
event, certain factors, such as the applicable Trust's not having perfected
security interests in the Financed Vehicles in all states, may affect the
Servicer's ability to repossess and sell the collateral securing the
Receivables, and thus may reduce the proceeds to be distributed to the
holders of the Certificates of such series. See "Description of the Pooling
and Servicing Agreement -- Distributions", "-- Credit and Cash Flow
Enhancement" and "Certain Legal Aspects of the Receivables".
The principal offices of each Trust and the related Trustee will be
specified in the applicable Prospectus Supplement.
THE TRUSTEE
The Trustee for each Trust will be specified in the related Prospectus
Supplement. The Trustee's liability in connection with the issuance and sale
of the related Certificates is limited solely to the express obligations of
such Trustee set forth in the related Pooling and Servicing Agreement. A
Trustee may resign at any time, in which event the Servicer, or its
successor, will be obligated to appoint a successor trustee. The Servicer in
respect of a Trust may remove the Trustee if the Trustee ceases to be
eligible to continue as Trustee under the related Pooling and Servicing
Agreement or if the Trustee becomes insolvent. In such circumstances, the
Servicer will be obligated to appoint a successor trustee. Any resignation
or removal of a Trustee and appointment of a successor trustee will not
become effective until acceptance of the appointment by the successor
trustee.
THE RECEIVABLES POOLS
GENERAL
The Receivables in each Receivables Pool are and will be installment
sales contracts ("Motor Vehicle Loans") that have been or will be originated
by a Dealer and purchased by an Originator pursuant to a Dealer Agreement
between the Originator and the Dealer. Receivables held by any Originator
may have been originated by other Originators. In addition, to the extent
described in any Prospectus Supplement, the related Receivables Pool may
include Receivables acquired by an Originator through acquisitions.
Receivables of an Originator will be transferred to the Seller pursuant to
a Receivables Purchase Agreement for sale by the Seller to the applicable
Trust.
The Receivables to be held by each Trust will be selected from the
portfolio of each Originator for inclusion in a Receivables Pool by several
criteria, including that each Receivable (i) is secured by a new or used
vehicle, (ii) was originated in the United States, (iii) is a Simple Interest
or Precomputed Receivable and (iv) as of the Cutoff Date (a) had an
outstanding principal balance of at least the amount set forth in the related
Prospectus Supplement, (b) was not more than 30 days (or such other number of
days specified in the related Prospectus Supplement) past due, (c) had a
remaining number of scheduled payments not more than the number set forth in
the related Prospectus Supplement, (d) had an original number of scheduled
payments not more than the number set forth in the related Prospectus
Supplement and (e) had a Contract Rate of not less than the rate per annum
set forth in the related Prospectus Supplement. No selection procedures
believed by the Originator to be adverse to the Certificateholders of any
series were or will be used in selecting the related Receivables. All terms
of the retail motor vehicle installment sales contracts constituting such
Receivables which are material to investors are described herein or in the
related Prospectus Supplement.
"Simple Interest Receivables" are receivables that provide for the
amortization of the amount financed under each receivable over a series of
fixed level payment monthly installments. Each monthly installment consists
of an amount of interest which is calculated on the basis of the outstanding
principal balance of the receivable multiplied by the stated Contract Rate
and further multiplied by the period elapsed (as a fraction of a calendar
year) since the preceding payment of interest was made. As payments are
received under a Simple Interest Receivable, the amount received is applied,
first, to interest accrued to the date of payment, second, to reduce the
unpaid principal balance, and third, to late fees and other fees and charges,
if any. Accordingly, if an obligor pays a fixed monthly installment before
its scheduled due date, the portion of the payment allocable to interest for
the period since the preceding payment was made will be less than it would
have been had the payment been made as scheduled, and the portion of the
payment applied to reduce the unpaid principal balance will be
correspondingly greater. Conversely, if an obligor pays a fixed monthly
installment after its scheduled due date, the portion of the payment
allocable to interest for the period since the preceding payment was made
will be greater than it would have been had the payment been made as
scheduled, and the portion of the payment applied to reduce the unpaid
principal balance will be correspondingly less. In either case, the obligor
pays a fixed monthly installment until the final scheduled payment date, at
which time the amount of the final installment is increased or decreased as
necessary to repay the then outstanding principal balance and unpaid accrued
interest. If a Receivable is prepaid, the Obligor is required to pay
interest only to the date of prepayment.
"Precomputed Receivables" consist of either (i) monthly actuarial
receivables ("Actuarial Receivables") or (ii) receivables that provide for
allocation of payments according to the "sum of periodic balances" or "sum of
monthly payments" method, similar to the "Rule of 78's" ("Rule of 78's
Receivables"). An Actuarial Receivable provides for amortization of the loan
over a series of fixed level payment monthly installments. Each monthly
installment, including the monthly installment representing the final payment
on the Receivable, consists of an amount of interest equal to 1/12 of the APR
of the loan multiplied by the unpaid principal balance of the loan, and an
amount of principal equal to the remainder of the monthly payment. A Rule of
78's Receivable provides for the payment by the obligor of a specified total
amount of payments, payable in equal monthly installments on each due date,
which total represents the principal amount financed and add-on interest in
an amount calculated on the stated APR for the term of the receivable. The
rate at which such amount of add-on interest is earned and, correspondingly,
the amount of each fixed monthly payment allocated to reduction of the
outstanding principal are calculated in accordance with the "Rule of 78's".
Information with respect to each Receivables Pool will be set forth in
the related Prospectus Supplement, including, to the extent appropriate, the
composition, the geographic distribution and distribution by Contract Rate
and the portion of such Receivables Pool consisting of Precomputed
Receivables and of Simple Interest Receivables and the portion of such
Receivables Pool secured by new vehicles and by used vehicles.
SUBSEQUENT RECEIVABLES
Subsequent Receivables may be originated by the Dealers at a later date
using credit criteria different from those which were applied to any Initial
Receivables and may be of a different credit quality and seasoning. In
addition, following the transfer of Subsequent Receivables to the applicable
Trust, the characteristics of the entire pool of Receivables included in such
Trust may vary significantly from those of the Initial Receivables
transferred to such Trust. Each Prospectus Supplement will describe the
effects that including such Subsequent Receivables may have on the
Receivables Pool included in the Trust Property of each Trust issuing
Certificates.
UNDERWRITING
The Receivables have been or will be originated or acquired by the
applicable Originator in accordance with such Originator's underwriting
standards, which standards are based upon the vehicle buyer's ability to
repay the obligation as well as the value of the vehicle being financed.
Each Originator's underwriting standards also require physical damage
insurance to be maintained on each Financed Vehicle. The motor vehicle
lending, underwriting and servicing operations of the Originators are subject
to the application of uniform written underwriting and servicing guidelines
(the "Guidelines"). The Guidelines are not a fixed set of criteria which are
required to be met by all Motor Vehicle Loans and are not intended to replace
the judgment of the credit underwriter in reviewing a loan application. The
Guidelines described herein are the Guidelines in their current form. The
Guidelines have evolved over time. Consequently, Receivables have been
originated under previous versions of the Guidelines, which differ in various
ways from the current form described herein.
Applicants are required to complete an application which generally
includes such information as the applicant's income, employment history and
other general information. The application is reviewed for completeness and
compliance with the Guidelines.
All applications for Motor Vehicle Loans are analyzed using a
combination of empirical and subjective judgments based upon the Guidelines.
Upon receipt of an application, a credit bureau report on the applicant is
ordered. Based on information provided in the application and credit bureau
reports, the underwriter evaluates the relationships among the applicant's
income, debt and expenses, including debt and expenses related to the
proposed Motor Vehicle Loan. The credit underwriter then reviews the data
for stability in employment and residence, other banking relationships with
its Originators and creditworthiness based on historical information.
Finally, the manufacturer's invoice price or average retail value reported in
the National Automotive Dealers Association's Used Car Guide or Kelly Blue
Book, as applicable, is verified for the vehicles and an evaluation is made
of the collateral and the applicant's ability to repay.
Under the Guidelines, an Originator generally will (i) require the
applicant's ratio of aggregate debt service to gross monthly income not to
exceed 50% and (ii) not finance more than 120% of the manufacturer's invoice
price, in the case of new vehicles, and 120% of the average retail value
(determined as described in the preceding paragraph), in the case of used
vehicles, plus related amounts financed in connection therewith, if any, such
as taxes, insurance and extended warranties. Motor Vehicle Loans which do
not conform to the Guidelines generally require approval by a more senior
credit underwriting employee than Motor Vehicle Loans which conform to the
Guidelines.
Neither the Servicer nor any Originator monitors the value of the
Financed Vehicle in the ordinary course of business after a Motor Vehicle
Loan is originated and, consequently, there is no required relationship
between the outstanding principal balance of any Motor Vehicle Loan included
in a Trust and the value of the Financed Vehicle securing such Motor Vehicle
Loan.
SERVICING AND COLLECTIONS
The Consumer Loan Servicer Center ("CLSC"), a division of U.S. Bank,
services all of the Motor Vehicle Loans. The servicing functions include
customer service, document file keeping, Motor Vehicle Loan record keeping,
vehicle title processing and collections. CLSC's servicing policies and
practices may change from time to time in accordance with the Originators'
and CLSC's business judgment.
Servicing of Motor Vehicle Loans, including payment processing,
collateral monitoring, and maintenance of computer systems, is conducted by
CLSC from (Beaverton, Oregon). Collections are handled centrally from CLSC's
headquarters in Beaverton, Oregon. All obligors on Motor Vehicle Loans are
given coupon books or set up on automated debiting arrangements to remit
their scheduled payments. The use of coupon books aids in the efficient and
timely processing of payments through CLSC's operations and systems.
Payments on the Motor Vehicle Loans are generally received by CLSC through
lock box accounts, designated post office boxes, direct debit to bank
accounts, and customer service centers.
If a Motor Vehicle Loan becomes delinquent, it is transferred from the
consumer loan system to the collection system, each operated by CLSC. The
collection system utilizes behavioral scoring methodology to assess the risk
of loss and to establish a collection strategy. The strategy addresses the
optimal timing and method for written and verbal communications with the
delinquent obligor.
Generally, accounts that remain delinquent for 120 days, or are
otherwise recognized by CLSC's collections personnel as having a serious
delinquency problem, are considered for liquidation. To minimize losses on
liquidation, CLSC has a dedicated unit established to manage the liquidation
of collateral effectively. This group principally contracts with outside
agencies to acquire the collateral and transport it to a selected wholesale
auction.
Deficiencies remaining after liquidation may be pursued by CLSC on
behalf of the applicable Originator in various ways, including settlement and
payment arrangements, litigation, post-judgment initiatives and collection
agency referrals. Generally, if a Financed Vehicle has been repossessed, the
Motor Vehicle Loan is charged off 180 days after repossession or when
repossession proceeds have been received, whichever is earlier. If a
Financed Vehicle has not been repossessed, the Motor Vehicle Loan is
generally charged off when the loan is 120 days delinquent.
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Certain information concerning the Originators' experience with respect
to their portfolio of Motor Vehicle Loans (including previously sold
contracts which an Originator continues to service, (but not including retail
motor vehicle installment sales contracts purchased by any of the Originators
under certain special financing programs)) will be set forth in each
Prospectus Supplement. There can be no assurance that the delinquency,
repossession and net loss experience on any Receivables Pool will be
comparable to prior experience or to such information.
PHYSICAL DAMAGE INSURANCE
The Originators and CLSC discontinued force placing physical damage
insurance on uninsured accounts effective (April, 1995). Although CLSC
continues to require Dealers to submit an Agreement to Provide Accidental
Physical Damage Insurance form with each contract, thus confirming insurance
on the Financed Vehicle at the inception of each Motor Vehicle Loan, it no
longer tracks the continued maintenance of insurance after that date.
WEIGHTED AVERAGE LIFE OF THE CERTIFICATES
The weighted average life of the Certificates of any series will
generally be influenced by the rate at which the principal balances of the
related Receivables are paid, which payment may be in the form of scheduled
amortization or prepayments. (For this purpose, the term "prepayments"
includes prepayments in full, partial prepayments (including those related to
rebates of extended warranty contract costs and insurance premiums),
liquidations due to default, as well as receipts of proceeds from physical
damage, credit life and disability insurance policies and certain other
Receivables repurchased by the Seller or the Servicer for administrative
reasons.) All of the Receivables are prepayable at any time without penalty
to the Obligor. The rate of prepayment of automotive receivables is
influenced by a variety of economic, social and other factors, including the
fact that an Obligor generally may not sell or transfer the Financed Vehicle
securing a Receivable without the consent of the Seller. The rate of
prepayment on the Receivables may also be influenced by the structure of the
loan. In addition, under certain circumstances, the Seller will be obligated
to repurchase Receivables from a Trust pursuant to the related Pooling and
Servicing Agreement as a result of breaches of representations and warranties
and the Servicer will be obligated to purchase Receivables from such Trust
pursuant to such Pooling and Servicing Agreement as a result of breaches of
certain covenants. In the case of any Certificate purchased at a discount to
its principal amount, a slower than anticipated rate of principal payments is
likely to result in a lower than anticipated yield. In the case of a
Certificate purchased at a premium to its principal amount, a faster than
anticipated rate of principal payments is likely to result in a lower than
anticipated yield. See "Description of the Pooling and Servicing
Agreement -- Sale and Assignment of Receivables" and "-- Servicing
Procedures". See also "Description of the Pooling and Servicing Agreement --
Termination" regarding the Servicer's option to purchase the Receivables from
a given Trust. No prediction can be made as to the rate of prepayment that
the Receivables will experience.
In light of the above considerations, there can be no assurance as to
the amount of principal payments to be made on the Certificates of a given
series on each Distribution Date, since such amount will depend, in part,
on the amount of principal collected on the related Receivables Pool
during the applicable Collection Period. Any reinvestment risks
resulting from a faster or slower incidence of prepayment of Receivables
will be borne entirely by the related Certificateholders. The related
Prospectus Supplement may set forth certain additional information with
respect to the maturity and prepayment considerations applicable to the
particular Receivables Pool and the related series of Certificates.
POOL FACTORS AND TRADING INFORMATION
The "Certificate Pool Factor" for each class of Certificates will be a
seven-digit decimal which the Servicer will compute prior to each
distribution with respect to such class of Certificates indicating the
remaining Certificate Balance of such class of Certificates, as of the
applicable Distribution Date (after giving effect to distributions to be made
on such Distribution Date), as a fraction of the initial Certificate Balance
of such class of Certificates. Each Certificate Pool Factor will initially
be 1.0000000 and thereafter will decline to reflect reductions of the
Certificate Balance of the applicable class of Certificates. A
Certificateholder's portion of the aggregate outstanding Certificate Balance
for the related class of Certificates is the product of (a) the original
denomination of such Certificateholder's Certificate and (b) the applicable
Certificate Pool Factor.
Unless otherwise provided in the related Prospectus Supplement with
respect to a Trust, the Certificateholders will receive reports on or about
each Distribution Date concerning amounts being distributed on such
Distribution Date and, with respect to the Collection Period immediately
preceding such Distribution Date, payments received on the Receivables, the
Pool Balance (as such term is defined in the related Prospectus Supplement,
the "Pool Balance"), the Certificate Pool Factor and various other items of
information. In addition, Certificateholders of record during any calendar
year will be furnished information for tax reporting purposes not later than
the latest date permitted by law. See "Description of the Certificates --
Reports to Certificateholders".
USE OF PROCEEDS
Unless otherwise provided in the related Prospectus Supplement, the net
proceeds from the sale of the Certificates of a given series will be applied
by the applicable Trust (i) to the purchase of the Receivables from the
Seller, (ii) to make the initial deposit into the Reserve Account, if any,
and (iii) to make the deposit of the Pre-Funded Amount into the Pre-Funding
Account, if any. Unless otherwise specified in the related Prospectus
Supplement, the Seller will use that portion of such net proceeds paid to it
with respect to any such Trust to purchase Receivables from Originators and
for general corporate purposes.
THE SELLER
The Seller is a wholly-owned subsidiary of U.S. Bancorp, a regional
multi-bank holding company incorporated under the laws of the State of Oregon
and registered under the Bank Holding Company Act of 1956, as amended. The
Seller was incorporated in the State of Oregon on March 14, 1997. The
principal executive offices of the Seller are located at 111 S.W. Fifth
Avenue, Portland, Oregon 97204 (telephone (503) 731-1812).
THE SERVICER
United States National Bank of Oregon, a national banking association,
is a wholly-owned subsidiary of U.S. Bancorp. U.S. Bank is engaged in
banking and related activities, including providing indirect financing of
motor vehicles. The principal executive offices of U.S. Bank are located at
111 S.W. Fifth Avenue, 31st Floor, Portland, Oregon 97204, and its telephone
number is (503) 275-6111.
THE ORIGINATORS
The Originators will include one or more of the principal banking
subsidiaries of U.S. Bancorp, which, at December 31, 1996, were United States
National Bank of Oregon, U.S. Bank of Washington, National Association, U.S.
Bank of Idaho, U.S. Bank of California, U.S. Bank of Nevada, and U.S. Bank of
Utah, and may include others of its banking subsidiaries (collectively, the
"banking subsidiaries"). It is anticipated that the banking subsidiaries
will be merged into U.S. Bank beginning in June 1997 as permitted by the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. The
Originators of the Receivables to be owned by a Trust will be specified in
the related Prospectus Supplement.
DESCRIPTION OF THE CERTIFICATES
GENERAL
With respect to each Trust, one or more classes of Certificates of the
related series will be issued pursuant to the terms of a Pooling and
Servicing Agreement, a form of which has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The following
summary does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all the provisions of the Certificates and
the Pooling and Servicing Agreement.
Unless otherwise specified in the related Prospectus Supplement, each
class of Certificates will initially be represented by one or more
Certificates registered in the name of DTC's Nominee, except as set forth
below. Unless otherwise specified in the related Prospectus Supplement, the
Certificates will be available for purchase in minimum denominations of
$20,000 and integral multiples of $1,000 in excess thereof in book-entry form
only. The Seller has been informed by DTC that DTC's nominee will be Cede,
unless another nominee is specified in the related Prospectus Supplement.
Accordingly, such nominee is expected to be the holder of record of the
Certificates of any series that are not purchased by the Seller. Unless and
until Definitive Certificates are issued under the limited circumstances
described herein or in the related Prospectus Supplement, no
Certificateholder will be entitled to receive a physical certificate
representing a Certificate. All references herein and in the related
Prospectus Supplement to actions by Certificateholders refer to actions taken
by DTC upon instructions from the Participants and all references herein and
in the related Prospectus Supplement to distributions, notices, reports and
statements to Certificateholders refer to distributions, notices, reports and
statements to DTC or its nominee, as the case may be, as the registered
holder of the Certificates, for distribution to Certificateholders in
accordance with DTC's procedures with respect thereto. See "Description of
the Certificates -- Book-Entry Registration" and "-- Definitive Certificates".
DISTRIBUTIONS OF PRINCIPAL AND INTEREST
The timing and priority of distributions, seniority, allocations of
losses, Pass Through Rate and amount of or method of determining
distributions with respect to principal and interest of each class of
Certificates will be described in the related Prospectus Supplement.
Distributions of interest on such Certificates will be made on the dates
specified in the related Prospectus Supplement (each, a "Distribution Date")
and will be made prior to distributions with respect to principal of such
Certificates. To the extent provided in the related Prospectus Supplement, a
series may include one or more classes of Strip Certificates entitled to
(i) distributions in respect of principal with disproportionate, nominal or
no interest distributions or (ii) interest distributions with
disproportionate, nominal or no distributions in respect of principal. Each
class of Certificates may have a different Pass Through Rate, which may be a
fixed, variable or adjustable Pass Through Rate (and which may be zero for
certain classes of Strip Certificates) or any combination of the foregoing.
The related Prospectus Supplement will specify the Pass Through Rate for each
class of Certificates of a given series or the method for determining such
Pass Through Rate. Unless otherwise provided in the related Prospectus
Supplement, distributions in respect of the Certificates of a given series
may be subordinate to payments in respect of one or more other classes of
Certificates of such series as more fully described in the related Prospectus
Supplement.
In the case of a series of Certificates which includes two or more
classes of Certificates, the timing, sequential order, priority of payment or
amount of distributions in respect of interest and principal, and any
schedule or formula or other provisions applicable to the determination
thereof, of each such class shall be as set forth in the related Prospectus
Supplement.
BOOK-ENTRY REGISTRATION
Holders of the Certificates may hold through DTC (in the United States)
or Cedel or Euroclear (in Europe) if they are participants of such systems
(the "Participants"), or indirectly through organizations that are
participants in such systems. Cedel and Euroclear will hold omnibus
positions in the Certificates on behalf of the Cedel Participants and the
Euroclear Participants, respectively, through customers' securities accounts
in Cedel's and Euroclear's names on the books of their respective
depositaries (collectively, the "Depositaries"), which in turn will hold such
positions in customers' securities accounts in the Depositaries' names on the
books of DTC.
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York UCC and a "clearing agency"
registered pursuant to Section 17A of the Exchange Act. DTC was created to
hold securities for its Participants and to facilitate the clearance and
settlement of securities transactions between Participants through electronic
book-entries, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations. Indirect access to the DTC system
also is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly ("Indirect Participants").
Transfers between DTC's participating organizations (the "Participants")
will occur in accordance with DTC rules. Transfers between Cedel
Participants and Euroclear Participants will occur in the ordinary way in
accordance with their applicable rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel
Participants or Euroclear Participants, on the other, will be effected in DTC
in accordance with DTC rules on behalf of the relevant European international
clearing system by its Depositary; however, such cross-market transactions
will require delivery of instructions to the relevant European international
clearing system by the counterparty in such system in accordance with its
rules and procedures and within its established deadlines (European time).
The relevant European international clearing system will, if the transaction
meets its settlement requirements, deliver instructions to its Depositary to
take action to effect final settlement on its behalf by delivering or
receiving securities in DTC, and making or receiving payment in accordance
with normal procedures for same-day funds settlement applicable to DTC.
Cedel Participants and Euroclear Participants may not deliver instructions
directly to the Depositaries.
Because of time-zone differences, credits of securities in Cedel or
Euroclear as a result of a transaction with a Participant will be made during
the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and such credits or any transactions in
such securities settled during such processing will be reported to the
relevant Cedel Participant or Euroclear Participant on such business day.
Cash received in Cedel or Euroclear as a result of sales of securities by or
through a Cedel Participant or a Euroclear Participant to a Participant will
be received with value on the DTC settlement date but will be available in
the relevant Cedel or Euroclear cash account only as of the business day
following settlement in DTC.
Unless otherwise specified in the related Prospectus Supplement,
Certificateholders that are not Participants or Indirect Participants but
desire to purchase, sell or otherwise transfer ownership of, or other
interests in, Certificates may do so only through Participants and Indirect
Participants. In addition, Certificateholders will receive all
distributions of principal and interest from the related Trustee through
Participants. Under a book-entry format, Certificateholders may experience
some delay in their receipt of payments, since such payments will be
forwarded by the Trustee to DTC's nominee. DTC will forward such payments
to its Participants, which thereafter will forward them to Indirect
Participants or Certificateholders. It is anticipated that the only
"Certificateholder" will be DTC's nominee. Certificateholders will not be
recognized by the Trustee as Certificateholders as such term is used in each
Pooling and Servicing Agreement, and Certificateholders will be permitted
to exercise the rights of Certificateholders only indirectly through DTC and
its Participants.
Under the rules, regulations and procedures creating and affecting DTC
and its operations (the "Rules"), DTC is required to make book-entry
transfers of Certificates among Participants on whose behalf it acts with
respect to the Certificates and to receive and transmit distributions of
principal of, and interest on, the Certificates. Participants and Indirect
Participants with which Certificateholders have accounts with respect to the
Certificates similarly are required to make book-entry transfers and receive
and transmit such payments on behalf of their respective Certificateholders.
Accordingly, although Certificateholders will not possess Certificates, the
Rules provide a mechanism by which Participants will receive payments and
will be able to transfer their interests.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a
Certificateholder to pledge Certificates to persons or entities that do not
participate in the DTC system, or to otherwise act with respect to such
Certificates, may be limited due to the lack of a physical certificate for
such Certificates.
DTC has advised the Seller that it will take any action permitted to be
taken by a Certificateholder under the related Pooling and Servicing
Agreement only at the direction of one or more Participants to whose accounts
with DTC the applicable Certificates are credited. DTC may take conflicting
actions with respect to other undivided interests to the extent that such
actions are taken on behalf of Participants whose holdings include such
undivided interests.
Cedel Bank, societe anonyme ("Cedel") is incorporated under the laws of
Luxembourg as a professional depository. Cedel holds securities for its
participating organizations ("Cedel Participants") and facilitates the
clearance and settlement of securities transactions between Cedel
Participants through electronic book-entry changes in accounts of Cedel
Participants, thereby eliminating the need for physical movement of
certificates. Transactions may be settled in Cedel in any of 28 currencies,
including United States dollars. Cedel provides to its Cedel Participants,
among other things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities lending and
borrowing. Cedel interfaces with domestic markets in several countries. As
a professional depository, Cedel is subject to regulation by the Luxembourg
Monetary Institute. Cedel Participants are recognized financial institutions
around the world, including underwriters, securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations
and may include the Underwriters. Indirect access to Cedel is also available
to others, such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Cedel Participant, either
directly or indirectly.
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System ("Euroclear Participants") and to clear
and settle transactions between Euroclear Participants through simultaneous
electronic book-entry delivery against payment, thereby eliminating the need
for physical movement of certificates and any risk from lack of simultaneous
transfers of securities and cash. Transactions may now be settled in
Euroclear in any of 32 currencies, including United States dollars. The
Euroclear System includes various other services, including securities
lending and borrowing, and interfaces with domestic markets in several
countries generally similar to the arrangements for cross-market transfers
with DTC. The Euroclear System is operated by Morgan Guaranty Trust Company
of New York, Brussels, Belgium office (the "Euroclear Operator" or
"Euroclear"), under contract with Euroclear Clearance System, S.C., a
Belgian cooperative corporation (the "Cooperative"). All operations are
conducted by the Euroclear Operator, and all Euroclear securities clearance
accounts and Euroclear cash accounts are accounts with the Euroclear
Operator, not the Cooperative. The Cooperative establishes policy for the
Euroclear System on behalf of Euroclear Participants. Euroclear
Participants include banks (including central banks), securities brokers and
dealers and other professional financial intermediaries and may include the
Underwriters. Indirect access to the Euroclear System is also available to
other firms that clear through or maintain a custodial relationship with a
Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such,
it is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear
and the related Operating Procedures of the Euroclear System and applicable
Belgian law (collectively, the "Terms and Conditions"). The Terms and
Conditions govern transfers of securities and cash within the Euroclear
System, withdrawal of securities and cash from the Euroclear System, and
receipts of payments with respect to securities in the Euroclear System. All
securities in the Euroclear System are held on a fungible basis without
attribution of specific certificates to specific securities clearance
accounts. The Euroclear Operator acts under the Terms and Conditions only on
behalf of Euroclear Participants and has no record of or relationship with
persons holding through Euroclear Participants.
Distributions with respect to Certificates held through Cedel or
Euroclear will be credited to the cash accounts of Cedel Participants or
Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by its Depositary. Such distributions
will be subject to tax reporting in accordance with relevant United States
tax laws and regulations. See "Certain Federal Income Tax Consequences" in
the Prospectus and "Global Clearance, Settlement and Tax Documentation
Procedures" in Annex I to this Prospectus. Cedel or the Euroclear Operator,
as the case may be, will take any other action permitted to be taken by a
Certificateholder under the Pooling and Servicing Agreement on behalf of a
Cedel Participant or Euroclear Participant only in accordance with its
relevant rules and procedures and subject to its Depositary's ability to
effect such actions on its behalf through DTC.
Although DTC, Cedel and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Certificates among
participants of DTC, Cedel and Euroclear, they are under no obligation to
perform or continue to perform such procedures and such procedures may be
discontinued at any time.
In the event that any of DTC, Cedel or Euroclear should discontinue its
services, the Servicer would seek an alternative depository (if available) or
cause the issuance of Definitive Certificates to the owners thereof or their
nominees in the manner described below under "-- Definitive
Certificates".
Except as required by law, neither the Servicer nor the Trustee will
have any liability for any aspect of the records relating to or payments made
on account of beneficial ownership interests of the Certificates of any
series held by DTC's Nominee, or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
DEFINITIVE CERTIFICATES
If so specified in the related Prospectus Supplement, the Certificates
of a series will be issued in fully registered, certificated form (the
"Definitive Certificates") to Certificateholders or their respective
nominees, rather than to DTC or its nominee, only if (i) the related Trustee
determines that DTC is no longer willing or able to discharge properly its
responsibilities as depository with respect to such Certificates and such
Trustee is unable to locate a qualified successor, (ii) the Trustee, at its
option, elects to terminate the book-entry system through DTC or (iii) after
the occurrence of a Servicer Default with respect to such Certificates,
holders representing at least a majority of the outstanding principal amount
of the Certificates of such series advise the Trustee through DTC in writing
that the continuation of a book-entry system through DTC (or a successor
thereto) with respect to such Certificates is no longer in the best interest
of the holders of such Certificates.
Upon the occurrence of any event described in the immediately preceding
paragraph, the Trustee will be required to notify all applicable
Certificateholders of a given series through Participants of the availability
of Definitive Certificates. Upon surrender by DTC of the definitive
certificates representing the corresponding Certificates and receipt of
instructions for re-registration, the Trustee will reissue such Certificates
as Definitive Certificates to such Certificateholders.
Distributions of principal of, and interest on, such Definitive
Certificates will thereafter be made by the Trustee in accordance with the
procedures set forth in the related Pooling and Servicing Agreement directly
to holders of Definitive Certificates in whose names the Definitive
Certificates were registered at the close of business on the applicable
Record Date specified for such Certificates in the related Prospectus
Supplement. Such distributions will be made by check mailed to the address
of such holder as it appears on the register maintained by the Trustee. The
final payment on any such Definitive Certificate, however, will be made only
upon presentation and surrender of such Definitive Certificate at the office
or agency specified in the notice of final distribution to the applicable
Certificateholders.
Definitive Certificates will be transferable and exchangeable at the
offices of the Trustee or of a registrar named in a notice delivered to
holders of Definitive Certificates. No service charge will be imposed for
any registration of transfer or exchange, but the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge imposed in
connection therewith.
LIST OF CERTIFICATEHOLDERS
Unless otherwise specified in the related Prospectus Supplement, with
respect to the Certificates of any series, three or more holders of the
Certificates of such series or one or more holders of such Certificates
evidencing not less than 25% of the Certificate Balance of such Certificates
may, by written request to the related Trustee, obtain access to the list
of all Certificateholders maintained by such Trustee for the purpose of
communicating with other Certificateholders with respect to their rights
under the related Pooling and Servicing Agreement or under such Certificates.
REPORTS TO CERTIFICATEHOLDERS
With respect to each series of Certificates, on or prior to each
Distribution Date, the Servicer will prepare and provide to the related
Trustee a statement to be delivered to the related Certificateholders that
will include (to the extent applicable) the following information (and any
other information so specified in the related Prospectus Supplement) as to
the Certificates of such series with respect to such Distribution Date or the
period since the previous Distribution Date, as applicable:
(i) the amount of the distribution allocable to the Certificate
Balance of each class of Certificates of such Series;
(ii) the amount of the distribution allocable to interest on or with
respect to each class of Certificates of such series;
(iii) the Pool Balance as of the close of business on the last day of
the preceding Collection Period;
(iv) the Certificate Balance and the Certificate Pool Factor for each
class of such Certificates, each after giving effect to all payments
reported under clause (i) above on such date;
(v) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period or Collection Periods, as the
case may be;
(vi) the Pass Through Rate for the next period for any class of
Certificates of such series with variable or adjustable rates;
(vii) the amount of the aggregate realized losses, if any, for the
preceding Collection Period;
(viii) the Certificateholders' Interest Carryover Shortfall and the
Certificateholders' Principal Carryover Shortfall (each as defined in
the related Prospectus Supplement), if any, in each case as applicable
to each class of Certificates, and the change in such amounts from the
preceding statement;
(ix) the aggregate Purchase Amounts for receivables, if any, that
were repurchased in such Collection Period;
(x) the balance of the Reserve Account (if any) on such date, after
giving effect to changes therein on such date;
(xi) for each such date during the Funding Period (if any), the
remaining Pre-Funded Amount; and
(xii) for the first such date that is on or immediately following the
end of the Funding Period (if any), the amount of any remaining
Pre-Funded Amount that has not been used to fund the purchase of
Subsequent Receivables and is being passed through as payments of
principal on the Certificates of such series.
Each amount set forth pursuant to subclauses (i), (ii), (v) and (viii)
with respect to the Certificates of any series will be expressed as a dollar
amount per $1,000 of the initial Certificate Balance of such Certificates, as
applicable.
Within the prescribed period of time for tax reporting purposes after
the end of each calendar year during the term of each Trust, the Trustee will
mail to each person who at any time during such calendar year has been a
Certificateholder with respect to such Trust and received any payment thereon
a statement containing certain information for the purposes of such
Certificateholder's preparation of federal income tax returns. See "Certain
Federal Income Tax Consequences".
DESCRIPTION OF THE POOLING AND SERVICING AGREEMENT
The following summary describes certain terms of each Pooling and
Servicing Agreement pursuant to which a Trust will be created, Receivables
will be purchased from the Seller, the Servicer will agree to service such
Receivables and Certificates will be issued. A form of the Pooling and
Servicing Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. This summary does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, all the provisions of the Pooling and Servicing Agreement.
SALE AND ASSIGNMENT OF RECEIVABLES
On or prior to the closing date (the "Closing Date") specified in the
Prospectus Supplement for a Trust, the Originators specified in such
Prospectus Supplement will transfer and assign, without recourse, to the
Seller their respective entire interests in the related Initial Receivables
and their security interests in the related Financed Vehicles pursuant to a
receivables purchase agreement (a "Receivables Purchase Agreement"). On or
prior to such Closing Date, the Seller will transfer and assign to the
applicable Trustee, without recourse, pursuant to a Pooling and Servicing
Agreement its entire interest in such Initial Receivables, including its
security interests in the related Financed Vehicles. Each such Receivable
will be identified in a schedule appearing as an exhibit to such Pooling and
Servicing Agreement (a "Schedule of Receivables"). The Trustee will,
concurrently with such transfer and assignment, execute and deliver the
related Certificates. The Trustee will not verify the existence of the
Receivables or review the Receivables files. Unless otherwise provided in
the related Prospectus Supplement, the net proceeds received from the sale
of the Certificates of a series will be applied to the purchase of the
related Receivables from the Seller and, to the extent specified in the
related Prospectus Supplement, to the deposit of the Pre-Funded Amount into
the Pre-Funding Account. The related Prospectus Supplement for a given
Trust will specify whether, and the terms, conditions and manner under
which, Subsequent Receivables will be sold by the Seller to the applicable
Trust from time to time during any Funding Period on each date specified as
a transfer date in the related Prospectus Supplement (each, a "Subsequent
Transfer Date").
In each Receivables Purchase Agreement the related Originator will
represent and warrant to the Seller and, in each Pooling and Servicing
Agreement, the Seller will represent and warrant to the applicable Trust,
among other things, that: (i) the information provided in the related
Schedule of Receivables is correct in all material respects; (ii) the Obligor
on each related Receivable is required to maintain physical damage insurance
covering the Financed Vehicle in accordance with the Seller's normal
requirements; (iii) as of the applicable Closing Date or the applicable
Subsequent Transfer Date, if any, to the best of its knowledge, the related
Receivables are free and clear of all security interests, liens, charges and
encumbrances and no offsets, defenses or counterclaims have been asserted or
threatened; (iv) as of the Closing Date or the applicable Subsequent Transfer
Date, if any, each of such Receivables is or will be secured by a first
perfected security interest in favor of the Seller in the Financed Vehicle;
(v) each related Receivable, at the time it was originated, complied and, as
of the Closing Date or the applicable Subsequent Transfer Date, if any,
complies in all material respects with applicable federal and state laws,
including, without limitation, consumer credit, truth in lending, equal
credit opportunity and disclosure laws; and (vi) any other representations
and warranties that may be set forth in the related Prospectus Supplement.
Unless otherwise provided in the related Prospectus Supplement, as of
the last day of the second (or, if the Seller elects, the first) month
following the discovery by or notice to the Seller of a breach of any
representation or warranty of the Seller that materially and adversely
affects the interests of the related Trust in any Receivable, the Seller,
unless the breach is cured, will repurchase such Receivable from such Trust
at a price equal to the unpaid principal balance owed by the Obligor thereon
plus interest thereon at the respective APR to the last day of the month of
repurchase (the "Purchase Amount"). The repurchase obligation constitutes
the sole remedy available to the Certificateholders or the Trustee in respect
of such Trust for any such uncured breach. The Seller's obligation to make
such purchase is contingent upon the related Originator performing its
corresponding obligation to purchase such Receivable from the Seller.
Pursuant to each Pooling and Servicing Agreement, to assure uniform
quality in servicing the Receivables and to reduce administrative costs, each
Trust will designate the Servicer as custodian to maintain possession, as
such Trust's agent, of the related motor vehicle retail installment sale
contracts and any other documents relating to the Receivables. The Seller's
and the Originators' accounting records and computer systems will reflect the
sale and assignment of the related Receivables to the applicable Trust, and
Uniform Commercial Code ("UCC") financing statements reflecting such sales
and assignments will be filed. The Receivables will not be segregated,
stamped or otherwise marked to indicate that they have been sold to the
related Trust. If through inadvertence or otherwise, another party purchases
(or takes a security interest in) the Receivables for new value in the
ordinary course of business and takes possession of the Receivables without
actual knowledge of the related Trust's interest, the purchaser (or secured
party) will acquire an interest in the Receivables superior to the interest
of the related Trust.
ACCOUNTS
The Servicer will establish and maintain with the related Trustee one or
more accounts, in the name of the Trustee on behalf of the related
Certificateholders, into which all payments made on or with respect to the
related Receivables will be deposited (the "Collection Account"). The
Servicer will establish and maintain with the related Trustee an account, in
the name of such Trustee on behalf of such Certificateholders, into which
amounts released from the Collection Account and any Pre-Funding Account,
Reserve Account or other credit or cash flow enhancement for distribution to
such Certificateholders will be deposited and from which all distributions to
such Certificateholders will be made (the "Certificate Distribution
Account").
If so provided in the related Prospectus Supplement, the Servicer will
establish for each series an additional account (the "Payahead Account"), in
the name of the related Trustee, into which, to the extent required by the
Pooling and Servicing Agreement, early payments by or on behalf of Obligors
on Precomputed Receivables will be deposited until such time as the payment
becomes due. Until such time as payments are transferred from the Payahead
Account to the Collection Account, they will not constitute collected
interest or collected principal and will not be available for distribution to
the applicable Certificateholders. The Payahead Account will initially be
maintained with the applicable Trustee.
Any other accounts to be established with respect to a Trust, including
any Pre-Funding Account or any Reserve Account, will be described in the
related Prospectus Supplement.
For any series of Certificates, funds in the Collection Account, the
Certificate Distribution Account and any Pre-Funding Account, Reserve Account
and other accounts identified as such in the related Prospectus Supplement
(collectively, the "Trust Accounts") will be invested as provided in the
related Pooling and Servicing Agreement in Eligible Investments. "Eligible
Investments" are generally limited to investments acceptable to the Rating
Agencies rating such Certificates as being consistent with the rating of such
Certificates and may include motor vehicle retail sale contracts. Except as
described below or in the related Prospectus Supplement, Eligible Investments
are limited to obligations or securities that mature on or before the date of
the next distribution for such series. However, to the extent permitted by
the Rating Agencies, funds in any Reserve Account may be invested in
securities that will not mature prior to the date of the next distribution
with respect to such Certificates and will not be sold to meet any
shortfalls. Thus, the amount of cash in any Reserve Account at any time may
be less than the balance of the Reserve Account. If the amount required to
be withdrawn from any Reserve Account to cover shortfalls in collections on
the related Receivables (as provided in the related Prospectus Supplement)
exceeds the amount of cash in the Reserve Account, a temporary shortfall in
the amounts distributed to the related Certificateholders could result, which
could, in turn, increase the average life of the Certificates of such series.
Except as otherwise specified in the related Prospectus Supplement,
investment earnings on funds deposited in the Trust Accounts, net of losses
and investment expenses (collectively, "Investment Earnings"), shall be
deposited in the applicable Collection Account on each Distribution Date and
shall be treated as collections of interest on the related Receivables.
The Trust Accounts will be maintained as Eligible Deposit Accounts.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution have a credit rating
from each Rating Agency in one of its generic rating categories which
signifies investment grade. "Eligible Institution" means, with respect to a
Trust, (a) the corporate trust department of the related Trustee or (b) a
depository institution organized under the laws of the United States of
America or any one of the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), (i) which has either (A) a long-term
unsecured debt rating acceptable to the Rating Agencies or (B) a short-term
unsecured debt rating or certificate of deposit rating acceptable to the
Rating Agencies and (ii) whose deposits are insured by the FDIC.
SERVICING PROCEDURES
The Servicer will make reasonable efforts to collect all payments due
with respect to the Receivables held by any Trust and will, consistent with
the related Pooling and Servicing Agreement, follow such collection
procedures as it follows with respect to comparable motor vehicle retail
installment sale contracts it services for itself or others. Consistent with
its normal procedures, the Servicer may, in its discretion, arrange with the
Obligor on a Receivable to extend or modify the payment schedule, but no such
arrangement will, for purposes of the related Pooling and Servicing
Agreement, modify the original due dates or the amount of the scheduled
payments or extend the final payment date of any Receivable beyond the Final
Scheduled Maturity Date (as such term is defined with respect to any
Receivables Pool in the related Prospectus Supplement). Some of such
arrangements may result in the Servicer purchasing the Receivable for the
Purchase Amount, while others may result in the Servicer making Advances. The
Servicer may sell the Financed Vehicle securing the respective Receivable at
public or private sale, or take any other action permitted by applicable law.
See "Certain Legal Aspects of the Receivables".
COLLECTIONS
With respect to each Trust, the Servicer will deposit all payments on
the related Receivables (from whatever source) and all proceeds of such
Receivables collected during each collection period specified in the related
Prospectus Supplement (each, a "Collection Period") into the related
Collection Account within two business days after receipt thereof. However,
at any time that and for so long as (i) U.S. Bank (or its successor) is the
Servicer, (ii) there exists no Servicer Default and (iii) each other
condition to making deposits less frequently than daily as may be specified
by the Rating Agencies or set forth in the related Prospectus Supplement is
satisfied, the Servicer will not be required to deposit such amounts into the
Collection Account until on or before the applicable Distribution Date.
Pending deposit into the Collection Account, collections may be invested
by the Servicer at its own risk and for its own benefit and will not
be segregated from its own funds. If the Servicer were unable to remit
such funds, Certificateholders might incur a loss. To the extent set forth
in the related Prospectus Supplement, the Servicer may, in order to satisfy
the requirements described above, obtain a letter of credit or other security
for the benefit of the related Trust to secure timely remittances of
collections on the related Receivables and payment of the aggregate Purchase
Amount with respect to Receivables purchased by the Servicer.
Collections on a Precomputed Receivable made during a Collection Period
shall be applied first to repay any outstanding Precomputed Advances made by
the Servicer with respect to such Receivable (as described below), and to the
extent that collections on a Precomputed Receivable during a Collection
Period exceed the outstanding Precomputed Advances, the collections shall
then be applied to the scheduled payment on such Receivable. If any
collections remaining after the scheduled payment is made are insufficient to
prepay the Precomputed Receivable in full, then, unless otherwise provided in
the related Prospectus Supplement, generally such remaining collections (the
"Payaheads") shall be transferred to and kept in the Payahead Account, until
such later Collection Period as the collections may be transferred to the
Collection Account and applied either to the scheduled payment or to prepay
such Receivable in full.
ADVANCES
Unless otherwise provided in the related Prospectus Supplement, to the
extent the collections of interest and principal on a Precomputed Receivable
with respect to a Collection Period fall short of the respective scheduled
payment, the Servicer will make a Precomputed Advance of the shortfall. The
Servicer will be obligated to make a Precomputed Advance on a Precomputed
Receivable only to the extent that the Servicer, in its sole discretion,
expects to recoup such advance from subsequent collections or recoveries on
such Receivable or other Precomputed Receivables in the related Receivables
Pool. The Servicer will deposit the Precomputed Advance in the applicable
Collection Account on or before the business day preceding the applicable
Distribution Date. The Servicer will recoup its Precomputed Advance from
subsequent payments by or on behalf of the respective Obligor or from
insurance or liquidation proceeds with respect to the Receivable and
will release its right to reimbursement in conjunction with its purchase of
the Receivable as Servicer, or, upon the determination that reimbursement
from the preceding sources is unlikely, will recoup its Precomputed Advance
from any collections made on other Precomputed Receivables in the related
Receivables Pool.
Unless otherwise provided in the related Prospectus Supplement, on or
before the business day prior to each applicable Distribution Date,
the Servicer shall deposit into the related Collection Account as a
Simple Interest Advance an amount equal to the amount of interest that would
have been due on the related Simple Interest Receivables at their respective
APRs for the related Collection Period (assuming that such Simple Interest
Receivables are paid on their respective due dates) minus the amount of
interest actually received on such Simple Interest Receivables during the
related Collection Period. If such calculation results in a negative number,
an amount equal to such amount shall be paid to the Servicer in reimbursement
of outstanding Simple Interest Advances. In addition, in the event that a
Simple Interest Receivable becomes a Liquidated Receivable (as such term is
defined in the related Prospectus Supplement), the amount of accrued and
unpaid interest thereon (but not including interest for the then current
Collection Period) shall be withdrawn from the Collection Account and paid to
the Servicer in reimbursement of outstanding Simple Interest Advances. No
advances of principal will be made with respect to Simple Interest
Receivables. As used herein, "Advances" means both Precomputed Advances and
Simple Interest Advances.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
Unless otherwise specified in the Prospectus Supplement with respect to
any Trust, the Servicer will be entitled to receive the Servicing Fee for
each Collection Period in an amount equal to a specified percentage per annum
(as set forth in the related Prospectus Supplement, the "Servicing Fee Rate")
of the Pool Balance as of the first day of the related Collection Period (the
"Servicing Fee"). The Servicing Fee (together with any portion of the
Servicing Fee that remains unpaid from prior Distribution Dates)
will be paid solely to the extent of the Interest Distribution Amount.
However, the Servicing Fee will be paid prior to the distribution of any
portion of the Interest Distribution Amount to the Certificateholders of the
given series.
Unless otherwise provided in the related Prospectus Supplement with
respect to a given Trust, the Servicer will also collect and retain any late
fees, prepayment charges and other administrative fees or similar charges
allowed by applicable law with respect to the related Receivables and will be
entitled to reimbursement from such Trust for certain liabilities. Payments
by or on behalf of Obligors will be allocated to scheduled payments and late
fees and other charges in accordance with the Servicer's normal practices and
procedures.
The Servicing Fee will compensate the Servicer for performing the
functions of a third party servicer of motor vehicle receivables as an agent
for their beneficial owner, including collecting and posting all payments,
responding to inquiries of Obligors on the Receivables, investigating
delinquencies, sending payment coupons to Obligors, reporting tax information
to Obligors, paying costs of collections and disposition of defaults and
policing the collateral. The Servicing Fee also will compensate the Servicer
for administering the particular Receivables Pool, including making Advances,
accounting for collections and furnishing monthly and annual statements to
the related Trustee with respect to distributions and generating federal
income tax information for such Trust and for the related Certificateholders.
The Servicing Fee also will reimburse the Servicer for certain taxes, the
fees of the related Trustee, accounting fees, outside auditor fees, data
processing costs and other costs incurred in connection with administering
the applicable Receivables Pool.
DISTRIBUTIONS
With respect to each series of Certificates, beginning on the
Distribution Date specified in the related Prospectus Supplement,
distributions of principal and interest (or, where applicable, of
interest only) on each class of such Certificates entitled thereto will be
made by the Trustee to the Certificateholders of such series. The timing,
calculation, allocation, order, source, priorities of and requirements for
all distributions to each class of Certificateholders of such series will be
set forth in the related Prospectus Supplement.
With respect to each Trust, on each Distribution Date, collections
on the related Receivables will be transferred from the Collection
Account to the Certificate Distribution Account for distribution to
Certificateholders to the extent provided in the related Prospectus
Supplement. Credit enhancement, such as a Reserve Account, will be
available to cover any shortfalls in the amount available for distribution on
such date to the extent specified in the related Prospectus Supplement. As
more fully described in the related Prospectus Supplement, and unless
otherwise specified therein, distributions in respect of principal of a class
of Certificates of a given series will be subordinate to distributions in
respect of interest on such class, and distributions in respect of one or
more classes of Certificates of such series may be subordinate to payments in
respect of other classes of Certificates of such series.
CREDIT AND CASH FLOW ENHANCEMENT
The amounts and types of credit and cash flow enhancement arrangements
and the provider thereof, if applicable, with respect to each class of
Certificates of a given series, if any, will be set forth in the related
Prospectus Supplement. If and to the extent provided in the related
Prospectus Supplement, credit and cash flow enhancement may be in the form of
subordination of one or more classes of Certificates, Reserve Accounts, over-
collateralization, letters of credit, credit or liquidity facilities, surety
bonds, guaranteed investment contracts, swaps or other interest rate
protection agreements, repurchase obligations, yield supplement agreements,
other agreements with respect to third party payments or other support, cash
deposits or such other arrangements as may be described in the related
Prospectus Supplement or any combination of two or more of the foregoing. If
specified in the applicable Prospectus Supplement, credit or cash flow
enhancement for a class of Certificates may cover one or more other classes
of Certificates of the same series, and credit or cash flow enhancement for a
series of Certificates may cover one or more other series of Certificates.
The presence of a Reserve Account and other forms of credit enhancement
for the benefit of any class or series of Certificates is intended to enhance
the likelihood of receipt by the Certificateholders of such class or series
of the full amount of principal and interest due thereon and to decrease the
likelihood that such Certificateholders will experience losses. Unless
otherwise specified in the related Prospectus Supplement, the credit
enhancement for a class or series of Certificates will not provide protection
against all risks of loss and will not guarantee repayment of the entire
principal balance and interest thereon. If losses occur which exceed the
amount covered by any credit enhancement or which are not covered by any
credit enhancement, Certificateholders of any class or series will bear their
allocable share of deficiencies, as described in the related Prospectus
Supplement. In addition, if a form of credit enhancement covers more than
one series of Certificates, Certificateholders of any such series will be
subject to the risk that such credit enhancement will be exhausted by the
claims of Certificateholders of other series of Certificates.
Reserve Account. If so provided in the related Prospectus Supplement,
pursuant to the related Pooling and Servicing Agreement, the Seller will
establish for a series or class of Certificates an account, as specified in
the related Prospectus Supplement (the "Reserve Account"), which will not be
part of the Trust but will be maintained with the related Trustee. Unless
otherwise provided in the related Prospectus Supplement, the Reserve Account
will be funded by an initial deposit by the Seller on the Closing Date in the
amount set forth in the related Prospectus Supplement and, if the related
series has a Funding Period, will also be funded on each
Subsequent Transfer Date to the extent described in the related Prospectus
Supplement. As further described in the related Prospectus Supplement, the
amount on deposit in the Reserve Account will be increased on each
Distribution Date thereafter up to the Specified Reserve Account
Balance (as defined in the related Prospectus Supplement) by the
deposit therein of the amount of collections on the related Receivables
remaining on each such Distribution Date after the payment of
all other required payments and distributions on such date. The related
Prospectus Supplement will describe the circumstances and manner under which
distributions may be made out of the Reserve Account, either to holders of
the Certificates covered thereby or to the Seller.
NET DEPOSITS
As an administrative convenience, unless the Servicer is required to
remit collections daily (see "-- Collections" above), the Servicer will be
permitted to make the deposit of collections, aggregate Advances and Purchase
Amounts for any Trust for or with respect to the related Collection Period
net of distributions to be made to the Servicer for such Trust with respect
to such Collection Period. The Servicer may cause to be made a single, net
transfer from the Collection Account to the related Payahead Account, if any,
or vice versa. The Servicer, however, will account to the Trustee and the
Certificateholders with respect to each Trust as if all deposits,
distributions and transfers were made individually.
STATEMENTS TO TRUSTEE AND TRUST
Prior to each Distribution Date with respect to each series
of Certificates, the Servicer will provide to the applicable Trustee
as of the close of business on the last day of the preceding Collection
Period a statement setting forth substantially the same information as is
required to be provided in the periodic reports provided to
Certificateholders of such series described under "Description of the
Certificates -- Reports to Certificateholders".
EVIDENCE AS TO COMPLIANCE
Each Pooling and Servicing Agreement will provide that a firm of
independent public accountants will furnish to the related Trustee, annually,
a statement as to compliance by the Servicer during the preceding twelve
months (or, in the case of the first such certificate, from the applicable
Closing Date) with certain standards relating to the servicing of the
applicable Receivables, the Servicer's accounting records and computer files
with respect thereto and certain other matters.
Each Pooling and Servicing Agreement will also provide for delivery to
the related Trustee, substantially simultaneously with the delivery of such
accountants' statement referred to above, of a certificate signed by an
officer of the Servicer stating that the Servicer has fulfilled its
obligations under the Pooling and Servicing Agreement, throughout the
preceding twelve months (or, in the case of the first such certificate, from
the Closing Date) or, if there has been a default in the fulfillment of any
such obligation, describing each such default. The Servicer has agreed to
give each Trustee notice of certain Servicer Defaults under the related
Pooling and Servicing Agreement.
Copies of such statements and certificates may be obtained by
Certificateholders by a request in writing addressed to the Trustee.
CERTAIN MATTERS REGARDING THE SERVICER
Each Pooling and Servicing Agreement will provide that U.S. Bank may not
resign from its obligations and duties as Servicer thereunder, except upon
determination that U.S. Bank's performance of such duties is no longer
permissible under applicable law. No such resignation will become effective
until the related Trustee or a successor servicer has assumed U.S. Bank's
servicing obligations and duties under such Pooling and Servicing Agreement.
Each Pooling and Servicing Agreement will further provide that neither
the Servicer nor any of its directors, officers, employees and agents will be
under any liability to the related Trust or the related Certificateholders
for taking any action or for refraining from taking any action pursuant to
such Pooling and Servicing Agreement or for errors in judgment; except that
neither the Servicer nor any such person will be protected against any
liability that would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence in the performance of the Servicer's duties
thereunder or by reason of reckless disregard of its obligations and duties
thereunder. In addition, each Pooling and Servicing Agreement will provide
that the Servicer is under no obligation to appear in, prosecute or defend
any legal action that is not incidental to the Servicer's servicing
responsibilities under such Pooling and Servicing Agreement and that, in its
opinion, may cause it to incur any expense or liability.
Under the circumstances specified in each Pooling and Servicing
Agreement, any entity into which the Servicer may be merged or consolidated,
or any entity resulting from any merger or consolidation to which the
Servicer is a party, or any entity succeeding to the business of the Servicer
or, with respect to its obligations as Servicer, any corporation 50% or more
of the voting stock of which is owned, directly or indirectly, by U.S.
Bancorp, which corporation or other entity in each of the foregoing cases
assumes the obligations of the Servicer, will be the successor of the
Servicer under such Pooling and Servicing Agreement.
SERVICER DEFAULT
Except as otherwise provided in the related Prospectus Supplement,
"Servicer Default" under each Pooling and Servicing Agreement will consist of
(i) any failure by the Servicer to deliver to the Trustee for deposit in any
of the Trust Accounts or the Certificate Distribution Account any required
payment or to direct the Trustee to make any required distributions
therefrom, which failure continues unremedied for three business days after
written notice from the Trustee is received by the Servicer or after
discovery of such failure by the Servicer; (ii) any failure by the Servicer
or the Seller, as the case may be, duly to observe or perform in any material
respect any other covenant or agreement in such Pooling and Servicing
Agreement, which failure materially and adversely affects the rights of the
Certificateholders of the related series and which continues unremedied for
60 days after the giving of written notice of such failure (A) to the
Servicer or the Seller, as the case may be, by the Trustee or (B) to the
Servicer or the Seller, as the case may be, and to the Trustee by holders of
Certificates of such series evidencing not less than 25% of such Certificate
Balance; and (iii) the occurrence of an Insolvency Event with respect to the
Servicer and the Seller. "Insolvency Event" means, with respect to any
Person, any of the following events or actions: certain events of insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings with respect to such Person and certain actions by such Person
indicating its insolvency, reorganization pursuant to bankruptcy proceedings
or inability to pay its obligations.
RIGHTS UPON SERVICER DEFAULT
Unless otherwise provided in the related Prospectus Supplement, as long
as a Servicer Default under the related Pooling and Servicing Agreement
remains unremedied, the related Trustee or holders of Certificates of the
related series evidencing not less than 25% of the principal amount of such
Certificates then outstanding may terminate all the rights and obligations
of the Servicer under such Pooling and Servicing Agreement, whereupon such
Trustee or a successor servicer appointed by such Trustee will succeed to
all the responsibilities, duties and liabilities of the Servicer under such
Pooling and Servicing Agreement and will be entitled to similar compensation
arrangements. If, however, a bankruptcy trustee or similar official has
been appointed for the Servicer, and no Servicer Default other than such
appointment has occurred, such trustee or official may have the power to
prevent such Trustee or such Certificateholders from effecting a transfer of
servicing. In the event that such Trustee is unwilling or unable to so act,
it may appoint, or petition a court of competent jurisdiction for the
appointment of, a successor with a net worth of at least $100,000,000 and
whose regular business includes the servicing of motor vehicle receivables.
Such Trustee may make such arrangements for compensation to be paid, which
in no event may be greater than the servicing compensation to the Servicer
under such Pooling and Servicing Agreement.
WAIVER OF PAST DEFAULTS
Holders of Certificates of a series evidencing not less than a majority
of the principal amount of such Certificates then outstanding may, on behalf
of all such Certificateholders, waive any default by the Servicer in the
performance of its obligations under the related Pooling and Servicing
Agreement, except a Servicer Default in making any required deposits to or
payments from the Certificate Distribution Account or the related Trust
Accounts in accordance with such Pooling and Servicing Agreement. No such
waiver will impair such Certificateholders' rights with respect to subsequent
defaults.
AMENDMENT
Unless otherwise provided in the related Prospectus Supplement, a
Pooling and Servicing Agreement may be amended by the parties thereto,
without the consent of the related Certificateholders, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of such Pooling and Servicing Agreement or of modifying in any
manner the rights of such Certificateholders; provided that such action will
not, in the opinion of counsel satisfactory to the related Trustee materially
and adversely affect the interest of any such Certificateholder. Unless
otherwise specified in the related Prospectus Supplement, the Pooling and
Servicing Agreement may also be amended by the Seller, the Servicer and the
related Trustee with the consent of the holders of the Certificates of such
series evidencing at least a majority of the principal amount of such
Certificates then outstanding, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of such Pooling
and Servicing Agreement or of modifying in any manner the rights of such
Certificateholders; provided, however, that no such amendment may (i)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on the related Receivables or
distributions that are required to be made for the benefit of such
Certificateholders or (ii) reduce the aforesaid percentage of the
Certificates of such series which are required to consent to any such
amendment, without the consent of the holders of all the outstanding
Certificates of such series.
TERMINATION
With respect to each Trust, the obligations of the Servicer, the Seller
and the related Trustee pursuant to the Pooling and Servicing Agreement will
terminate upon the earlier of (i) the maturity or other liquidation of the
last related Receivable and the disposition of any amounts received upon
liquidation of any such remaining Receivables, (ii) the payment to
Certificateholders of the related series of all amounts required to be paid
to them pursuant to the Pooling and Servicing Agreement and (iii) the
occurrence of either event described below.
Unless otherwise provided in the related Prospectus Supplement, in order
to avoid excessive administrative expense, the Servicer will be permitted at
its option to purchase from each Trust, as of the end of any applicable
Collection Period, if the then outstanding Pool Balance with respect to the
Receivables held by such Trust is 10% (or such other percentage as is
specified in the related Prospectus Supplement) or less of the Initial Pool
Balance (as defined in the related Prospectus Supplement, the "Initial Pool
Balance"), all remaining related Receivables at a price equal to the
aggregate of the Purchase Amounts thereof as of the end of such Collection
Period.
If and to the extent provided in the related Prospectus Supplement with
respect to a Trust, the Trustee will, within ten days following a
Distribution Date as of which the Pool Balance is equal to or
less than the percentage of the Initial Pool Balance specified in the related
Prospectus Supplement, solicit bids for the purchase of the Receivables
remaining in such Trust, in the manner and subject to the terms and
conditions set forth in such Prospectus Supplement. If the Trustee receives
satisfactory bids as described in such Prospectus Supplement, then the
Receivables remaining in such Trust will be sold to the highest bidder.
As more fully described in the related Prospectus Supplement, the
subsequent distribution to the related Certificateholders of all amounts
required to be distributed to them pursuant to the applicable Pooling and
Servicing Agreement will effect early retirement of the Certificates of such
series.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
SECURITY INTEREST IN VEHICLES
In states in which retail installment sale contracts such as the
Receivables evidence the credit sale of automobiles and light duty trucks by
dealers to obligors, the contracts also constitute personal property security
agreements and include grants of security interests in the vehicles under the
applicable UCC. Perfection of security interests in the automobiles and
light duty trucks financed by the Seller is generally governed by the motor
vehicle registration laws of the state in which the vehicle is located. In
all states in which the Receivables have been originated, a security interest
in automobiles and light duty trucks is perfected by obtaining the
certificate of title to the Financed Vehicle or notation of the secured
party's lien on the Financed Vehicle's certificate of title.
Each Originator takes all actions necessary under the laws of the state
in which the Financed Vehicle is located to perfect its security interest in
the Financed Vehicle securing a retail installment sales contract purchased
by it from a Dealer, including, where applicable, having a notation of its
lien recorded on such vehicle's certificate of title. Because the Servicer
continues to service the contracts and loans, the Obligors on the contracts
and loans will not be notified of the sales from an Originator to the Seller
or from the Seller to the Trust, and no action will be taken to record the
transfer of the security interest from an Originator to the Seller or from
the Seller to the Trust by amendment of the certificates of title for the
Financed Vehicles or otherwise.
Pursuant to the related Receivables Purchase Agreement, each Originator
will assign to the Seller its interests in the Financed Vehicles securing the
Receivables assigned by that Originator to the Seller and, with respect to
each Trust, pursuant to the related Pooling and Servicing Agreement, the
Seller will assign its interests in the Financed Vehicles securing the
related Receivables to such Trust. However, because of the administrative
burden and expense, none of the Originators, the Seller, the Servicer or the
related Trustee will amend any certificate of title to identify either the
Seller or such Trust as the new secured party on such certificate of title
relating to a Financed Vehicle. U.S. Bank will continue to hold any
certificates of title relating to the Financed Vehicles in its possession as
custodian for such Trust pursuant to the related Pooling and Servicing
Agreement. See "Description of the Pooling and Servicing Agreement--Sale and
Assignment of Receivables".
In most states, an assignment such as that under each Pooling and
Servicing Agreement is an effective conveyance of a security interest without
amendment of any lien noted on a vehicle's certificate of title, and the
assignee succeeds thereby to the assignor's rights as secured party.
However, by not identifying a Trust as the secured party on the certificate
of title, the security interest of such Trust in the vehicle could be
defeated through fraud or negligence. In such states, in the absence of
fraud or forgery by the vehicle owner or the Originator or administrative
error by state or local agencies, the notation of the Originator's lien on
the certificates of title will be sufficient to protect a Trust against the
rights of subsequent purchasers of a Financed Vehicle or subsequent lenders
who take a security interest in a Financed Vehicle. If there are any
Financed Vehicles as to which the Seller failed to obtain from the applicable
Originator or assign to the Trust a perfected security interest, the security
interest of the Trust would be subordinate to, among others, the interests of
subsequent purchasers of the Financed Vehicles and holders of perfected
security interests therein. Such a failure, however, would constitute a
breach of the warranties of the Seller under the related Pooling and
Servicing Agreement and of the related Originator under the related
Receivables Purchase Agreement and would create an obligation of the Seller
and such Originator to repurchase the related Receivable unless the breach
were cured. See "Description of the Pooling and Servicing Agreement -- Sale
and Assignment of Receivables" and "Special Considerations -- Certain Legal
Aspects -- Security Interests in Financed Vehicles".
Under the laws of most states, the perfected security interest in a
vehicle would continue for four months after the vehicle is moved to a state
other than the state in which it is initially registered and thereafter until
the owner thereof re-registers the vehicle in the new state. A majority of
states generally require surrender of a certificate of title to re-register a
vehicle. Accordingly, a secured party must surrender possession if it holds
the certificate of title to the vehicle or, in the case of a vehicle
registered in a state providing for the notation of a lien on the certificate
of title but not possession by the secured party, the secured party would
receive notice of surrender if the security interest is noted on the
certificate of title. Thus, the secured party would have the opportunity to
re-perfect its security interest in the vehicle in the state of relocation.
In states that do not require a certificate of title for registration of a
motor vehicle, re-registration could defeat perfection. In the ordinary
course of servicing motor vehicle receivables, the Servicer takes steps to
effect re-perfection upon receipt of notice of re-registration or information
from the obligor as to relocation. Similarly, when an obligor sells a
vehicle, the Servicer must surrender possession of the certificate of title
or will receive notice as a result of its lien noted thereon and accordingly
will have an opportunity to require satisfaction of the related Receivable
before release of the lien. Under each Pooling and Servicing Agreement, the
Servicer is obligated to take appropriate steps, at the Servicer's expense,
to maintain perfection of security interests in the Financed Vehicles and is
obligated to purchase the related Receivable if it fails to do so.
Under the laws of most states, liens for repairs performed on a motor
vehicle and liens for unpaid taxes take priority over even a perfected
security interest in a financed vehicle. The Code also grants priority to
certain federal tax liens over the lien of a secured party. The laws of
certain states and federal law permit the confiscation of vehicles by
governmental authorities under certain circumstances if used in unlawful
activities, which may result in the loss of a secured party's perfected
security interest in the confiscated vehicle. Under each Pooling and
Servicing Agreement, the Seller will represent to the related Trust that, as
of the date the related Receivable is sold to such Trust, each security
interest in a Financed Vehicle is or will be prior to all other present liens
(other than tax liens and other liens that arise by operation of law) upon
and security interests in such Financed Vehicle. However, liens for repairs
or taxes could arise, or the confiscation of a Financed Vehicle could occur,
at any time during the term of a Receivable. No notice will be given to the
Trustee or the Certificateholders in respect of a Trust if such a lien arises
or confiscation occurs.
REPOSSESSION
In the event of default by vehicle purchasers, the holder of the motor
vehicle retail installment sale contract has all the remedies of a secured
party under the UCC, except where specifically limited by other state laws.
Among the UCC remedies, the secured party has the right to perform self-help
repossession unless such act would constitute a breach of the peace.
Self-help is the method employed by the Servicer in most cases and is
accomplished simply by retaking possession of the financed vehicle. In the
event of default by the obligor, some jurisdictions require that the obligor
be notified of the default and be given a time period within which he may
cure the default prior to repossession. Generally, the right of reinstatement
may be exercised on a limited number of occasions in any one-year period. In
cases where the obligor objects or raises a defense to repossession, or if
otherwise required by applicable state law, a court order must be obtained
from the appropriate state court, and the vehicle must then be repossessed in
accordance with that order.
NOTICE OF SALE; REDEMPTION RIGHTS
The UCC and other state laws require the secured party to provide the
obligor with reasonable notice of the date, time and place of any public
sale and/or the date after which any private sale of the collateral may be
held. The obligor has the right to redeem the collateral prior to actual
sale by paying the secured party the unpaid principal balance of the
obligation plus reasonable expenses for repossessing, holding and preparing
the collateral for disposition and arranging for its sale, plus, in some
jurisdictions, reasonable attorneys' fees, or, in some states, by payment of
delinquent installments or the unpaid balance.
DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS
The proceeds of resale of the vehicles generally will be applied first
to the expenses of resale and repossession and then to the satisfaction of
the indebtedness. While some states impose prohibitions or limitations on
deficiency judgments if the net proceeds from resale do not cover the full
amount of the indebtedness, a deficiency judgment can be sought in those
states that do not prohibit or limit such judgments. However, the deficiency
judgment would be a personal judgment against the obligor for the shortfall,
and a defaulting obligor can be expected to have very little capital or
sources of income available following repossession. Therefore, in many
cases, it may not be useful to seek a deficiency judgment or, if one is
obtained, it may be settled at a significant discount.
Occasionally, after resale of a vehicle and payment of all expenses and
all indebtedness, there is a surplus of funds. In that case, the UCC
requires the creditor to remit the surplus to any holder of a lien with
respect to the vehicle or if no such lienholder exists or there are remaining
funds, the UCC requires the creditor to remit the surplus to the former owner
of the vehicle.
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws and related
regulations impose substantial requirements upon lenders and servicers
involved in consumer finance. These laws include the Truth-in-Lending Act,
the Equal Credit Opportunity Act, the Federal Trade Commission Act, the Fair
Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Procedures Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations B and Z, the Soldiers' and Sailors' Civil Relief Act of 1940, the
Texas Consumer Credit Code, state adoptions of the National Consumer Act and
of the Uniform Consumer Credit Code and state motor vehicle retail
installment sales acts, retail installment sales acts and other similar laws.
Also, state laws impose finance charge ceilings and other restrictions on
consumer transactions and require contract disclosures in addition to those
required under federal law. These requirements impose specific statutory
liabilities upon creditors who fail to comply with their provisions. In some
cases, this liability could affect an assignee's ability to enforce consumer
finance contracts such as the Receivables.
The so-called "Holder-in-Due-Course" Rule of the Federal Trade
Commission (the "FTC Rule"), the provisions of which are generally duplicated
by the Uniform Consumer Credit Code, other statutes or the common law, has
the effect of subjecting a seller in a consumer credit transaction (and
certain related creditors and their assignees) to all claims and defenses
which the obligor in the transaction could assert against the seller of the
goods. Liability under the FTC Rule is limited to the amounts paid by the
obligor under the contract and the holder of the contract may also be unable
to collect any balance remaining due thereunder from the obligor.
Most of the Receivables will be subject to the requirements of the FTC
Rule. Accordingly, each Trust, as holder of the related Receivables, will be
subject to any claims or defenses that the purchaser of the applicable
Financed Vehicle may assert against the seller of the Financed Vehicle. Such
claims are limited to a maximum liability equal to the amounts paid by the
Obligor on the Receivable. If an Obligor were successful in asserting any
such claim or defense, such claim or defense would constitute a breach of the
Seller's warranties under the related Pooling and Servicing Agreement and
would create an obligation of the Seller to repurchase the Receivable unless
the breach is cured. See "Description of the Pooling and Servicing Agreement
- -- Sale and Assignment of Receivables".
Courts have applied general equitable principles to secured parties
pursuing repossession and litigation involving deficiency balances. These
equitable principles may have the effect of relieving an obligor from some or
all of the legal consequences of a default.
In several cases, consumers have asserted that the self-help remedies of
secured parties under the UCC and related laws violate the due process
protections provided under the 14th Amendment to the Constitution of the
United States. Courts have generally upheld the notice provisions of the UCC
and related laws as reasonable or have found that the repossession and resale
by the creditor do not involve sufficient state action to afford
constitutional protection to borrowers.
Under each Pooling and Servicing Agreement, the Seller will warrant to
the related Trust that each Receivable complies with all requirements of law
in all material respects. Accordingly, if an Obligor has a claim against
such Trust for violation of any law and such claim materially and adversely
affects such Trust's interest in a Receivable, such violation would
constitute a breach of the warranties of the Seller under such Pooling and
Servicing Agreement and would create an obligation of the Seller to
repurchase the Receivable unless the breach is cured. See "Description of
the Pooling and Servicing Agreement -- Sale and Assignment of Receivables".
OTHER LIMITATIONS
In addition to the laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including federal bankruptcy laws and
related state laws, may interfere with or affect the ability of a secured
party to realize upon collateral or to enforce a deficiency judgment. For
example, in a Chapter 13 proceeding under the federal bankruptcy law, a court
may prevent a creditor from repossessing a vehicle, and, as part of the
rehabilitation plan, reduce the amount of the secured indebtedness to the
market value of the vehicle at the time of bankruptcy (as determined by the
court), leaving the creditor as a general unsecured creditor for the
remainder of the indebtedness. A bankruptcy court may also reduce the
monthly payments due under a contract or change the rate of interest and time
of repayment of the indebtedness.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of certain federal income tax
consequences of the purchase, ownership and disposition of the Certificates.
The summary does not purport to deal with federal income tax consequences
applicable to all categories of holders, some of which may be subject to
special rules. For example, it does not discuss the tax treatment of
Certificateholders that are insurance companies, regulated investment
companies or dealers in securities. The IRS may disagree with all or a part
of the discussion below. Prospective investors are urged to consult their
own tax advisors in determining the federal, state, local, foreign and any
other tax consequences to them of the purchase, ownership and disposition of
the Certificates.
The following summary is based upon current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), the Treasury regulations
promulgated thereunder and judicial or ruling authority, all of which are
subject to change, which change may be retroactive. Each Trust will be
provided with an opinion of special Federal tax counsel to each Trust
specified in the related Prospectus Supplement ("Tax Counsel"), regarding
certain federal income tax matters discussed below. An opinion of Tax
Counsel, however, is not binding on the IRS or the courts. No ruling on any
of the issues discussed below will be sought from the IRS. For purposes of
the following summary, references to the Trust, the Certificates and related
terms, parties and documents shall be deemed to refer, unless otherwise
specified herein, to each Trust and the Certificates and related terms,
parties and documents applicable to such Trust.
TAX CHARACTERIZATION OF THE TRUST AS A GRANTOR TRUST
Tax Counsel will deliver its opinion that the Trust will not be
classified as an association taxable as a corporation and that such Trust
will be classified as a grantor trust under subpart E, Part I of subchapter J
of the Code. Owners of Certificates will be treated for federal income tax
purposes as owners of a portion of the Trust's assets as described below.
CHARACTERIZATION. Each Certificateholder will be treated as the owner
of a pro rata undivided interest in the interest and principal portions of
the Trust represented by the Certificates and will be considered the
equitable owner of a pro rata undivided interest in each of the Receivables
in the Trust. Any amounts received by a Certificateholder in lieu of amounts
due with respect to any Receivable because of a default or delinquency in
payment will be treated for federal income tax purposes as having the same
character as the payments they replace.
Each Certificateholder will be required to report on its federal income
tax return in accordance with such Certificateholder's method
of accounting its pro rata share of the entire income from the Receivables in
the Trust represented by Certificates, including interest,
original issue discount ("OID"), if any, prepayment fees, assumption fees,
any gain recognized upon an assumption and late payment charges received by
the Servicer. Under Sections 162 or 212 of the Code, each Certificateholder
will be entitled to deduct its pro rata share of servicing fees, prepayment
fees, assumption fees, any loss recognized upon an assumption and late
payment charges retained by the Servicer, provided that such amounts are
reasonable compensation for services rendered to the Trust.
Certificateholders that are individuals, estates or trusts will be entitled
to deduct their share of expenses only to the extent such expenses plus all
other Section 212 expenses exceed two percent of its adjusted gross income.
A Certificateholder using the cash method of accounting must take into
account its pro rata share of income and deductions as and when collected by
or paid to the Servicer. A Certificateholder using an accrual method of
accounting must take into account its pro rata share of income and deductions
as they become due or are paid to the Servicer, whichever is earlier. If the
servicing fees paid to the Servicer are deemed to exceed reasonable servicing
compensation, the amount of such excess could be considered as an ownership
interest retained by the Servicer (or any person to whom the Servicer
assigned for value all or a portion of the servicing fees) in a portion of
the interest payments on the Receivables. The Receivables would then be
subject to the "coupon stripping" rules of the Code discussed below.
PREMIUM. The price paid for a Certificate by a holder will be allocated
to such holder's undivided interest in each Receivable based on each
Receivable's relative fair market value, so that such holder's undivided
interest in each Receivable will have its own tax basis. A Certificateholder
that acquires an interest in Receivables at a premium may elect to amortize
such premium under a constant interest method. Amortizable bond premium will
be treated as an offset to interest income on such Certificate. The basis
for such Certificate will be reduced to the extent that amortizable premium
is applied to offset interest payments. It is not clear whether a reasonable
prepayment assumption should be used in computing amortization of premium
allowable under Section 171. A Certificateholder that makes this election
for a Certificate that is acquired at a premium will be deemed to have made
an election to amortize bond premium with respect to all debt instruments
having amortizable bond premium that such Certificateholder acquires during
the year of the election or thereafter.
If a premium is not subject to amortization using a reasonable
prepayment assumption, the holder of a Certificate acquired at a premium
should recognize a loss if a Receivable prepays in full, equal to the
difference between the portion of the prepaid principal amount of such
Receivable that is allocable to the Certificate and the portion of the
adjusted basis of the Certificate that is allocable to such Receivable. If a
reasonable prepayment assumption is used to amortize such premium, it appears
that such a loss would be available, if at all, only if prepayments have
occurred at a rate faster than the reasonable assumed prepayment rate. It is
not clear whether any other adjustments would be required to reflect
differences between an assumed prepayment rate and the actual rate of
prepayments.
STRIPPED BONDS AND STRIPPED COUPONS
Although the tax treatment of stripped bonds is not entirely clear,
based on guidance by the IRS, each purchaser of a Certificate will be treated
as the purchaser of a stripped bond which generally should be treated as a
single debt instrument issued on the day it is purchased for purposes of
calculating any original issue discount. Generally, under recently issued
Treasury regulations (the "Section 1286 Treasury Regulations"), if the
discount on a stripped bond is larger than a de minimis amount (as calculated
for purposes of the OID rules of the Code) such stripped bond will be
considered to have been issued with OID. See "Original Issue Discount."
Based on the preamble to the Section 1286 Treasury Regulations, Tax Counsel
is of the opinion that, although the matter is not entirely clear, the
interest income on the Certificates at the sum of the Pass Through Rate and
the portion of the Servicing Fee Rate that does not constitute excess
servicing will be treated as "qualified stated interest" within the meaning
of the Section 1286 Treasury Regulations, and such income will be so treated
in the Trustee's tax information reporting.
ORIGINAL ISSUE DISCOUNT. The IRS has stated in published rulings that,
in circumstances similar to those described herein, the special rules of the
Code relating to "original issue discount" (currently Sections 1271 through
1273 and 1275) will be applicable to a Certificateholder's interest in those
Receivables meeting the conditions necessary for these sections to apply.
Generally, a Certificateholder that acquires an undivided interest in a
Receivable issued or acquired with OID must include in gross income the sum
of the "daily portions," as defined below, of the OID on such Receivable for
each day on which it owns a Certificate, including the date of purchase but
excluding the date of disposition. In the case of an original
Certificateholder, the daily portions of OID with respect to a Receivable
generally would be determined as follows. A calculation will be made of the
portion of OID that accrues on the Receivable during each successive monthly
accrual period (or shorter period in respect of the date of original issue or
the final Distribution Date). This will be done, in the case of each full
monthly accrual period, by adding (i) the present value of all remaining
payments to be received on the Receivable under the prepayment assumption
used in respect of the Receivables and (ii) any payments received during such
accrual period, and subtracting from that total the "adjusted issue price" of
the Receivable at the beginning of such accrual period. No representation is
made that the Receivables will prepay at any prepayment assumption. The
"adjusted issue price" of a Receivable at the beginning of the first accrual
period is its issue price (as determined for purposes of the OID rules of the
Code) and the "adjusted issue price" of a Receivable at the beginning of a
subsequent accrual period is the "adjusted issue price" at the beginning of
the immediately preceding accrual period plus the amount of OID allocable to
that accrual period and reduced by the amount of any payment (other than
"qualified stated interest") made at the end of or during that accrual
period. The OID accruing during such accrual period will then be divided by
the number of days in the period to determine the daily portion of OID for
each day in the period. With respect to an initial accrual period shorter
than a full monthly accrual period, the daily portions of OID must be
determined according to an appropriate allocation under either an exact or
approximate method set forth in the OID Regulations, or some other reasonable
method, provided that such method is consistent with the method used to
determine the yield to maturity of the Receivables.
With respect to the Receivables, the method of calculating OID as
described above will cause the accrual of OID to either increase or decrease
(but never below zero) in any given accrual period to reflect the fact that
prepayments are occurring at a faster or slower rate than the prepayment
assumption used in respect of the Receivables. Subsequent purchasers that
purchase Receivables at more than a de minimis discount should consult their
tax advisors with respect to the proper method to accrue such OID.
MARKET DISCOUNT. A Certificateholder that acquires an undivided
interest in Receivables may be subject to the market discount rules of
Sections 1276 through 1278 to the extent an undivided interest in a
Receivable is considered to have been purchased at a "market discount."
Generally, the amount of market discount is equal to the excess of the
portion of the principal amount of such Receivable allocable to such holder's
undivided interest over such holder's tax basis in such interest. Market
discount with respect to a Certificate will be considered to be zero if the
amount allocable to the Certificate is less than 0.25% of the
Certificate's stated redemption price at maturity multiplied by the weighted
average maturity remaining after the date of purchase. Treasury regulations
implementing the market discount rules have not yet been issued; therefore,
investors should consult their own tax advisors regarding the application of
these rules and the advisability of making any of the elections allowed under
Code Sections 1276 through 1278.
The Code provides that any principal payment (whether a scheduled
payment or a prepayment) or any gain on disposition of a market discount bond
shall be treated as ordinary income to the extent that it does not exceed the
accrued market discount at the time of such payment. The amount of accrued
market discount for purposes of determining the tax treatment of subsequent
principal payments or dispositions of the market discount bond is to be
reduced by the amount so treated as ordinary income.
The Code also grants the Treasury Department authority to issue
regulations providing for the computation of accrued market discount on debt
instruments, the principal of which is payable in more than one installment.
While the Treasury Department has not yet issued regulations, rules described
in the relevant legislative history will apply. Under those rules, the
holder of a market discount bond may elect to accrue market discount either
on the basis of a constant interest rate or according to one of the following
methods. If a Certificate is issued with OID, the amount of market discount
that accrues during any accrual period would be equal to the product of (i)
the total remaining market discount and (ii) a fraction, the numerator of
which is the OID accruing during the period and the denominator of which is
the total remaining OID at the beginning of the accrual period. For
Certificates issued without OID, the amount of market discount that accrues
during a period is equal to the product of (i) the total remaining market
discount and (ii) a fraction, the numerator of which is the amount of stated
interest paid during the accrual period and the denominator of which is the
total amount of stated interest remaining to be paid at the beginning of the
accrual period. For purposes of calculating market discount under any of the
above methods in the case of instruments (such as the Certificates) that
provide for payments that may be accelerated by reason of prepayments of
other obligations securing such instruments, the same prepayment assumption
applicable to calculating the accrual of OID will apply. Because the
regulations described above have not been issued, it is impossible to predict
what effect those regulations might have on the tax treatment of a
Certificate purchased at a discount or premium in the secondary market.
A holder who acquired a Certificate at a market discount also may be
required to defer a portion of its interest deductions for the taxable year
attributable to any indebtedness incurred or continued to purchase or carry
such Certificate purchased with market discount. For these purposes, the de
minimis rule referred to above applies. Any such deferred interest expense
would not exceed the market discount that accrues during such taxable year
and is, in general, allowed as a deduction not later than the year in which
such market discount is includible in income. If such holder elects to
include market discount in income currently as it accrues on all market
discount instruments acquired by such holder in that taxable year or
thereafter, the interest deferral rule described above will not apply.
PREMIUM. To the extent a Certificateholder is considered to have
purchased an undivided interest in a Receivable for an amount that is greater
than its stated redemption price at maturity of such Receivable, such
Certificateholder will be considered to have purchased the Receivable with
"amortizable bond premium" equal in amount to such excess. A
Certificateholder (who does not hold the Certificate for sale to customers or
in inventory) may elect under Section 171 of the Code to amortize such
premium. Under the Code, premium is allocated among the interest payments on
the Receivables to which it relates and is considered as an offset against
(and thus a reduction of) such interest payments. With certain exceptions,
such an election would apply to all debt instruments held or subsequently
acquired by the electing holder. Absent such an election, the premium will
be deductible as an ordinary loss only upon disposition of the Certificate or
pro rata as principal is paid on the Receivables.
ELECTION TO TREAT ALL INTEREST AS OID. The OID regulations permit a
Certificateholder to elect to accrue all interest, discount (including de
minimis market or original issue discount) and premium in income as
interest, based on a constant yield method. If such an election were to be
made with respect to a Certificate with market discount, the
Certificateholder would be deemed to have made an election to include in
income currently market discount with respect to all other debt instruments
having market discount that such Certificateholder acquires during the year
of the election or thereafter. Similarly, a Certificateholder that makes
this election for a Certificate that is acquired at a premium will be deemed
to have made an election to amortize bond premium with respect to all debt
instruments having amortizable bond premium that such Certificateholder owns
or acquires. See "-- Premium" herein. The election to accrue interest,
discount and premium on a constant yield method with respect to a
Certificate is irrevocable.
SALE OR EXCHANGE OF A CERTIFICATE. Sale or exchange of a Certificate
prior to its maturity will result in gain or loss equal to the difference, if
any, between the amount received and the owner's adjusted basis in the
Certificate. Such adjusted basis generally will equal the seller's purchase
price for the Certificate, increased by the OID included in the seller's
gross income with respect to the Certificate, and reduced by principal
payments on the Certificate previously received by the seller. Such gain or
loss will be capital gain or loss to an owner for which a Certificate is a
"capital asset" within the meaning of Section 1221, and will be long-term or
short-term depending on whether the Certificate has been owned for the
long-term capital gain holding period (currently more than one year).
Certificates will be "evidences of indebtedness" within the meaning of
Section 582(c)(1), so that gain or loss recognized from the sale of a
Certificate by a bank or a thrift institution to which such section applies
will be treated as ordinary income or loss.
NON-U.S. PERSONS. Generally, to the extent that a Certificate evidences
ownership in underlying Receivables that were issued on or before July 18,
1984, interest or OID paid by the person required to withhold tax under
Section 1441 or 1442 to (i) an owner that is not a U.S. Person (as defined
below) or (ii) a Certificateholder holding on behalf of an owner that is not
a U.S. Person will be subject to federal income tax, collected by
withholding, at a rate of 30% or such lower rate as may be provided for
interest by an applicable tax treaty. Accrued OID recognized by the owner on
the sale or exchange of such a Certificate also will be subject to federal
income tax at the same rate. Generally, such payments would not be subject
to withholding to the extent that a Certificate evidences ownership in
Receivables issued after July 18, 1984, by natural persons if such
Certificateholder complies with certain identification requirements
(including delivery of a statement, signed by the Certificateholder under
penalties of perjury, certifying that such Certificateholder is not a U.S.
Person and providing the name and address of such Certificateholder).
Additional restrictions apply to Receivables where the obligor is not a
natural person in order to qualify for the exemption from withholding.
As used herein, a "U.S. Person" means a citizen or resident of the
United States, a corporation or a partnership organized in or under the laws
of the United States or any political subdivision thereof or an estate, the
income of which from sources outside the United States is includible in gross
income for federal income tax purposes regardless of its source or a trust if
a court within the United States is able to exercise primary supervision of
the administration of the trust and one or more United States fiduciaries
have the authority to control all substantial decisions of the trust.
INFORMATION REPORTING AND BACKUP WITHHOLDING. The Servicer will furnish
or make available, within a reasonable time after the end of each calendar
year, to each person who was a Certificateholder at any time during such
year, such information as may be deemed necessary or desirable to assist
Certificateholders in preparing their federal income tax returns, or to
enable holders to make such information available to beneficial owners or
financial intermediaries that hold Certificates as nominees on behalf of
beneficial owners. If a holder, beneficial owner, financial intermediary or
other recipient of a payment on behalf of a beneficial owner fails to supply
a certified taxpayer identification number or if the Secretary of the
Treasury determines that such person has not reported all interest and
dividend income required to be shown on its federal income tax return, 31%
backup withholding may be required with respect to any payments. Any amounts
deducted and withheld from a distribution to a recipient would be allowed as
a credit against such recipient's federal income tax liability.
FASIT LEGISLATION During 1996, President Clinton signed into law the
"Small Business Job Protection Act of 1996" (the "Act"). The Act creates a
new type of entity for federal income tax purposes called a "financial asset
securitization investment trust" or "FASIT." Beginning in September of 1997,
the Act generally enables certain arrangements similar to a trust that is
treated as a partnership to elect to be treated as a FASIT. Under the Act, a
FASIT generally would avoid federal income taxation and could issue
securities substantially similar to the Certificates and those securities
would be treated as debt for federal income tax purposes. If so provided in
the related Prospectus Supplement, the Pooling and Servicing Agreement will
set forth certain conditions which, if satisfied, will permit the Seller to
amend such Pooling and Servicing Agreement in order to enable all or a
portion of the Trust to qualify as a FASIT and to permit a FASIT election to
be made with respect thereto, and to make such modifications to such Pooling
and Servicing Agreement as may be permitted by reason of the making of such
an election. However, there can be no assurance that the Seller will or will
not cause any permissible FASIT election to be made with respect to a Trust
or amend the related Pooling and Servicing Agreement in connection with any
election.
* * *
THE FEDERAL TAX DISCUSSIONS SET FORTH ABOVE ARE INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A CERTIFICATE-
HOLDER'S PARTICULAR TAX SITUATION. PROSPECTIVE PURCHASERS SHOULD CONSULT
THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF CERTIFICATES, INCLUDING THE TAX
CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
Section 406 of ERISA and Section 4975 of the Code prohibit a pension,
profit-sharing or other employee benefit plan, as well as individual
retirement accounts and certain types of Keogh Plans (each a "Benefit Plan"),
from engaging in certain transactions with persons that are "parties in
interest" under ERISA or "disqualified persons" under the Code with respect
to such Benefit Plan. A violation of these "prohibited transaction" rules
may result in an excise tax or other penalties and liabilities under ERISA
and the Code for such persons.
Certain transactions involving a Trust might be deemed to constitute
prohibited transactions under ERISA and the Code with respect to a Benefit
Plan that purchased Certificates if assets of the Trust were deemed to be
assets of the Benefit Plan. Under a regulation issued by the United States
Department of Labor (the "Plan Assets Regulation"), the assets of a Trust
would be treated as plan assets of a Benefit Plan for the purposes of ERISA
and the Code only if the Benefit Plan acquired an "equity interest" in the
Trust and none of the exceptions contained in the Plan Assets Regulation was
applicable. An equity interest is defined under the Plan Assets Regulation as
an interest other than an instrument which is treated as indebtedness under
applicable local law and which has no substantial equity features.
Employee benefit plans that are governmental plans (as defined in
Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33)
of ERISA) are not subject to ERISA requirements.
A plan fiduciary considering the purchase of Certificates of a given
series should consult its tax and/or legal advisors regarding whether the
assets of the related Trust would be considered plan assets, the possibility
of exemptive relief from the prohibited transaction rules and other issues
and their potential consequences.
SENIOR CERTIFICATES ISSUED BY TRUSTS
Unless otherwise specified in the related Prospectus Supplement, the
following discussion applies only to nonsubordinated Certificates (referred
to herein as "Senior Certificates") issued by a Trust.
The U.S. Department of Labor has granted to the lead Underwriter named
in the Prospectus Supplement an exemption (the "Exemption") from certain of
the prohibited transaction rules of ERISA with respect to the initial
purchase, the holding and the subsequent resale by Benefit Plans of
certificates representing interests in asset-backed pass-through trusts that
consist of certain receivables, loans and other obligations that meet the
conditions and requirements of the Exemption. The receivables covered by the
Exemption include motor vehicle installment sales contracts such as the
Receivables. The Exemption will apply to the acquisition, holding and resale
of the Senior Certificates by a Benefit Plan, provided that certain
conditions (certain of which are described below) are met.
Among the conditions which must be satisfied for the Exemption to apply
to the Senior Certificates are the following:
(1) The acquisition of the Senior Certificates by a Benefit Plan is
on terms (including the price for the Senior Certificates) that are at
least as favorable to the Benefit Plan as they would be in an arm's
length transaction with an unrelated party;
(2) The rights and interests evidenced by the Senior Certificates
acquired by the Benefit Plan are not subordinated to the rights and
interests evidenced by other certificates of the Trust;
(3) The Senior Certificates acquired by the Benefit Plan have
received a rating at the time of such acquisition that is in one of the
three highest generic rating categories from either Standard & Poor's
Corporation, Moody's Investors Service, Inc., Duff & Phelps Inc. or
Fitch Investors Service, Inc.;
(4) The Trustee is not an affiliate of any other member of the
Restricted Group (as defined below);
(5) The sum of all payments made to the Underwriters in connection
with the distribution of the Senior Certificates represents not more
than reasonable compensation for underwriting the Senior Certificates;
the sum of all payments made to and retained by the Seller pursuant to
the sale of the Receivables to the Trust represents not more than the
fair market value of such Receivables; and the sum of all payments made
to and retained by the Servicer represents not more than reasonable
compensation for the Servicer's services under the Pooling and Servicing
Agreement and reimbursement of the Servicer's reasonable expenses in
connection therewith; and
(6) The Benefit Plan investing in the Senior Certificates is an
"accredited investor" as defined in Rule 501 (a)(1) of Regulation D of
the Securities and Exchange Commission under the Securities Act of 1933.
Moreover, the Exemption would provide relief from certain
self-dealing/conflict of interest or prohibited transactions only if, among
other requirements, (i) in the case of the acquisition of Senior Certificates
in connection with the initial issuance, at least fifty (50) percent of the
Senior Certificates are acquired by persons independent of the Restricted
Group (as defined below), (ii) the Benefit Plan's investment in Senior
Certificates does not exceed twenty-five (25) percent of all of the Senior
Certificates outstanding at the time of the acquisition, and (iii)
immediately after the acquisition, no more than twenty-five (25) percent of
the assets of the Benefit Plan are invested in certificates representing an
interest in one or more trusts containing assets sold or serviced by the same
entity. The Exemption does not apply to Plans sponsored by the Seller, any
Underwriter, the Trustee, the Servicer, any obligor with respect to
Receivables included in the Trust constituting more than five percent of the
aggregate unamortized principal balance of the assets in the Trust, or any
affiliate of such parties (the "Restricted Group").
The Seller believes that the Exemption will apply to the acquisition and
holding by Benefit Plans of Senior Certificates sold by the Underwriter or
Underwriters named in the Prospectus Supplement and that all conditions of
the Exemption other than those within the control of the investors have been
met. In addition, as of the date hereof, no obligor with respect to
Receivables included in the Trust constitutes more than five percent of the
aggregate unamortized principal balance of the assets of the Trust.
PLAN OF DISTRIBUTION
On the terms and conditions set forth in an underwriting agreement with
respect to the Certificates of a series (the "Underwriting Agreement"), the
Seller will agree to cause the related Trust to sell to the underwriters (the
"Underwriters") named therein and in the related Prospectus Supplement, and
each of such Underwriters will severally agree to purchase, the principal
amount of each class of Certificates of such series set forth therein and in
the related Prospectus Supplement.
In each of the Underwriting Agreements with respect to any series of
Certificates, the several Underwriters will agree, subject to the terms and
conditions set forth therein, to purchase all the Certificates described
therein which are offered hereby and by the related Prospectus Supplement if
any of such Certificates are purchased.
Each Prospectus Supplement will either (i) set forth the price at which
each class of Certificates being offered thereby will be offered to the
public and any concessions that may be offered to certain dealers
participating in the offering of such Certificates or (ii) specify that the
related Certificates, as the case may be, are to be resold by the
Underwriters in negotiated transactions at varying prices to be determined at
the time of such sale. After the initial public offering of any such
Certificates, such public offering prices and such concessions may be
changed.
Each Underwriting Agreement will provide that the Seller will indemnify
the Underwriters against certain civil liabilities, including liabilities
under the Securities Act, or contribute to payments the several
Underwriters may be required to make in respect thereof.
Each Trust may, from time to time, invest the funds in its Trust
Accounts in Eligible Investments acquired from such Underwriters or from an
affiliate of the Seller.
Pursuant to each Underwriting Agreement with respect to a given series
of Certificates, the closing of the sale of any class of Certificates subject
to such Underwriting Agreement will be conditioned on the closing of the sale
of all other such classes of Certificates of that series.
The place and time of delivery for the Certificates in respect of which
this Prospectus is delivered will be set forth in the related Prospectus
Supplement.
LEGAL OPINIONS
Certain legal matters relating to the Certificates of any series will be
passed upon for the related Trust, the Servicer and the Seller by Miller,
Nash, Wiener, Hager & Carlsen LLP, Portland, Oregon, and for the Underwriter
for such series by Brown & Wood LLP, New York, New York. Certain federal
income tax, Oregon tax and other matters will be passed upon for each Trust
by Miller, Nash, Wiener, Hager & Carlsen LLP.
INDEX OF TERMS
Acturial Receivable. . . . . . . . . . . . . . . . . . . . . . . . . . .
Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefit Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cede . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cedel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cedel Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificate Balance . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificate Distribution Account . . . . . . . . . . . . . . . . . . . .
Certificate Pool Factor . . . . . . . . . . . . . . . . . . . . . . . . .
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collection Account . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collection Period . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cutoff Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dealer Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Definitive Certificates . . . . . . . . . . . . . . . . . . . . . . . . .
Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DTC's Nominee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eligible Deposit Account . . . . . . . . . . . . . . . . . . . . . . . .
Eligible Institution . . . . . . . . . . . . . . . . . . . . . . . . . .
Eligible Investments . . . . . . . . . . . . . . . . . . . . . . . . . .
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Euroclear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Euroclear Operator . . . . . . . . . . . . . . . . . . . . . . . . . . .
Euroclear Participant . . . . . . . . . . . . . . . . . . . . . . . . . .
Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Final Scheduled Maturity Date . . . . . . . . . . . . . . . . . . . . .
Financed Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FTC Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funding Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indirect Participants . . . . . . . . . . . . . . . . . . . . . . . . . .
Initial Cutoff Date . . . . . . . . . . . . . . . . . . . . . . . . . . .
Initial Pool Balance . . . . . . . . . . . . . . . . . . . . . . . . . .
Initial Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . .
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OID Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Originator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pass-Through Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payahead Account . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payaheads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan Assets Regulation . . . . . . . . . . . . . . . . . . . . . . . . .
Pool Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pooling and Servicing Agreement . . . . . . . . . . . . . . . . . . . . .
Pre-Funded Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pre-Funding Account . . . . . . . . . . . . . . . . . . . . . . . . . . .
Precomputed Advance . . . . . . . . . . . . . . . . . . . . . . . . . . .
Precomputed Receivables . . . . . . . . . . . . . . . . . . . . . . . . .
Prospectus Supplement . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rating Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables Purchase Agreement . . . . . . . . . . . . . . . . . . . . .
Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . .
Related Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule of Receivables . . . . . . . . . . . . . . . . . . . . . . . . .
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Senior Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . .
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Servicer Default . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Servicing Fee Rate . . . . . . . . . . . . . . . . . . . . . . . . . . .
Simple Interest Advance . . . . . . . . . . . . . . . . . . . . . . . . .
Simple Interest Receivables . . . . . . . . . . . . . . . . . . . . . . .
Strip Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subsequent Receivables . . . . . . . . . . . . . . . . . . . . . . . . .
Subsequent Transfer Date . . . . . . . . . . . . . . . . . . . . . . . .
Tax Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trust Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . . . . .
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE SELLER OR BY THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, THE CERTIFICATES OFFERED HEREBY TO ANYONE IN ANY
JURISDICTION IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE ANY SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION
THAT INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS.
------------------------
TABLE OF CONTENTS
PAGE
---
PROSPECTUS SUPPLEMENT
Reports to Certificateholders . . . . . . . . . . . . . . . . . . . . . .
Summary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Considerations . . . . . . . . . . . . . . . . . . . . . . . . .
The Receivables Pool . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted Average Life of the Certificates . . . . . . . . . . . . . . . .
Description of the Certificates . . . . . . . . . . . . . . . . . . . . .
Description of the Pooling and Servicing
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . .
ERISA Considerations . . . . . . . . . . . . . . . . . . . . . . . . . .
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROSPECTUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . .
Incorporation of Certain Documents by
Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Summary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Considerations . . . . . . . . . . . . . . . . . . . . . . . . .
The Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Receivables Pools . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted Average Life of the Certificates . . . . . . . . . . . . . . . .
Pool Factors and Trading Information . . . . . . . . . . . . . . . . . .
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of the Certificates . . . . . . . . . . . . . . . . . . . . .
Description of the Pooling and Servicing
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Legal Aspects of the Receivables . . . . . . . . . . . . . . . .
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . .
ERISA Considerations . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UNTIL 90 DAYS AFTER THE DATE OF THIS PROSPECTUS SUPPLEMENT, ALL DEALERS
EFFECTING TRANSACTIONS IN THE CERTIFICATES OFFERED BY THIS PROSPECTUS
SUPPLEMENT, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. THIS IS
IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
$----------------------------------------
U.S. BANCORP AUTO TRUST
199__-__
$______________
ASSET BACKED CERTIFICATES, CLASS A
$______________
____% ASSET BACKED CERTIFICATES, CLASS B
U.S. BANCORP AUTO RECEIVABLES CORPORATION
SELLER
---------------------------
UNITED STATES NATIONAL BANK OF OREGON
SERVICER
---------------------------
PROSPECTUS SUPPLEMENT
---------------------------
(UNDERWRITER)
------------------------
DATED _________, 199__
---------------------------------
---------------------------------
ANNEX I
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered
Certificates (the "Global Certificates") will be available only in book-entry
form. Investors in the Global Certificates may hold such Global Certificates
through any of DTC, CEDEL or Euroclear. The Global Certificates will be
tradeable as home market instruments in both the European and U.S. domestic
markets. Initial settlement and all secondary trades will settle in same-day
funds.
Secondary market trading between investors holding Global Certificates
through CEDEL and Euroclear will be conducted in the ordinary way in
accordance with their normal rules and operating procedures and in accordance
with conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Certificates
through DTC will be conducted according to the rules and procedures
applicable to U.S. corporate debt obligations.
Secondary cross-market trading between CEDEL or Euroclear and DTC
Participants holding Certificates will be effected on a
delivery-against-payment basis through the respective Depositaries of CEDEL
and Euroclear (in such capacity) and DTC Participants.
Non-U.S. holders (as described below) of Global Certificates will be
subject to U.S. withholding taxes unless such holders meet certain
requirements and deliver appropriate U.S. tax documents to the securities
clearing organizations or their participants.
INITIAL SETTLEMENT
All Global Certificates will be held in book-entry form by DTC in the
name of Cede & Co. as nominee of DTC. Investors' interests in the Global
Certificates will be represented through financial institutions acting on
their behalf as direct and indirect Participants in DTC. As a result, CEDEL
and Euroclear will hold positions on behalf of their participants through
their respective Depositaries, which in turn will hold such positions in
accounts as DTC Participants.
Investors electing to hold their Global Certificates through DTC will
follow the settlement practices applicable to prior debt issues. Investors'
securities custody accounts will be credited with their holdings against
payment in same-day funds on the settlement date.
Investors electing to hold their Global Certificates through CEDEL or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global
security and no "lock-up" or restricted period. Global Certificates will be
credited to the securities custody accounts on the settlement date against
payments in same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired
value date.
TRADING BETWEEN DTC PARTICIPANTS. Secondary market trading between DTC
Participants will be settled using the procedures applicable to book-entry
securities in same-day funds.
TRADING BETWEEN CEDEL AND/OR EUROCLEAR PARTICIPANTS. Secondary market
trading between CEDEL Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
TRADING BETWEEN DTC SELLER AND CEDEL OR EUROCLEAR PURCHASER. When
Global Certificates are to be transferred from the account of a DTC
Participant to the account of a CEDEL Participant or a Euroclear Participant,
the purchaser will send instructions to CEDEL or Euroclear through a CEDEL
Participant or Euroclear Participant at least one business day prior to
settlement. CEDEL or Euroclear, as applicable, will instruct its Depositary
to receive the Global Certificates against payment. Payment will include
interest accrued on the Global Certificates from and including the last
coupon payment date to and excluding the settlement date. Payment will then
be made by such Depositary to the DTC Participant's account against delivery
of the Global Certificates. After settlement has been completed, the Global
Certificates will be credited to the applicable clearing system and by the
clearing system, in accordance with its usual procedures, to the CEDEL
Participant's or Euroclear Participant's account. The Global Certificates
credit will appear the next day (European time) and the cash debit will be
back-valued to, and the interest on the Global Certificates will accrue from,
the value date (which would be the preceding day when settlement occurred in
New York). If settlement is not completed on the intended value date (i.e.,
the trade fails), the CEDEL or Euroclear cash debit will be valued instead as
of the actual settlement date.
CEDEL Participants and Euroclear Participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to
pre-position funds for settlement, either from cash on hand or existing lines
of credit, as they would for any settlement occurring within CEDEL or
Euroclear. Under this approach, they may take on credit exposure to CEDEL or
Euroclear until the Global Certificates are credited to their accounts one
day later.
As an alternative, if CEDEL or Euroclear has extended a line of credit
to them, CEDEL Participants or Euroclear Participants can elect not to
pre-position funds and allow that credit line to be drawn upon to finance
settlement. Under this procedure, CEDEL Participants or Euroclear
Participants purchasing Global Certificates would incur overdraft charges for
one day, assuming they cleared the overdraft when the Global Certificates
were credited to their accounts. However, interest on the Global
Certificates would accrue from the value date. Therefore, in many cases the
investment income on the Global Certificates earned during that one-day
period may substantially reduce or offset the amount of such overdraft
charges, although this result will depend on each CEDEL Participant's or
Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global
Certificates to the respective Depositary for the benefit of CEDEL
Participants or Euroclear Participants. The sale proceeds will be available
to the DTC seller on the settlement date. Thus, to the DTC Participant a
cross-market transaction will settle no differently than a trade between two
DTC Participants.
TRADING BETWEEN CEDEL OR EUROCLEAR SELLER AND DTC PURCHASER. Due to
time zone differences in their favor, CEDEL Participants and Euroclear
Participants may employ their customary procedures for transactions in which
Global Certificates are to be transferred by the respective clearing systems,
through their respective Depositaries, to a DTC Participant. The seller will
send instructions to CEDEL or Euroclear through a CEDEL Participant or
Euroclear Participant at least one business day prior to settlement. In
these cases, CEDEL or Euroclear will instruct their respective Depositaries,
as appropriate, to deliver the bonds to the DTC Participant's account against
payment. Payment will include interest accrued on the Global Certificates
from and including the last coupon payment date to and excluding the
settlement date. The payment will then be reflected in the account of the
CEDEL Participant or Euroclear Participant the following day, and receipt of
the cash proceeds in the CEDEL Participant's or Euroclear Participant's
account would be back-valued to the value date (which would be the preceding
day, when settlement occurred in New York). Should the CEDEL
Participant or Euroclear Participant have a line of credit with its clearing
system and elect to be in debit in anticipation of receipt of the sale
proceeds in its account, the back-valuation will extinguish any overdraft
charges incurred over that one-day period. If settlement is not completed on
the intended value date (i.e., the trade fails), receipt of the cash proceeds
in the CEDEL Participant's or Euroclear Participant's account would instead
be valued as of the actual settlement date. Finally, day traders that use
CEDEL or Euroclear and that purchase Global Certificates from DTC
Participants for delivery to CEDEL Participants or Euroclear Participants
should note that these trades would automatically fail on the sale side
unless affirmative action were taken. At least three techniques should be
readily available to eliminate this potential problem:
(a) borrowing through CEDEL or Euroclear for one day (until the
purchase side of the day trade is reflected in their CEDEL or Euroclear
accounts) in accordance with the clearing system's customary procedures;
(b) borrowing the Global Certificates in the U.S. from a DTC
Participant no later than one day prior to settlement, which would give
the Global Certificates sufficient time to be reflected in their CEDEL
or Euroclear account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the
trade so that the value date for the purchase from the DTC Participant
is at least one day prior to the value date for the sale to the CEDEL
Participant or Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Certificates holding securities through
CEDEL or Euroclear (or through DTC if the holder has an address outside the
U.S.) will be subject to the 30% U.S. withholding tax that generally applies
to payments of interest (including original issue discount) on registered
debt issued by U.S. Persons, unless (i) each clearing system, bank or other
financial institution that holds customers' securities in the ordinary course
of its trade or business in the chain of intermediaries between such
beneficial owner and the U.S. entity required to withhold tax complies with
applicable certification requirements and (ii) such beneficial owner takes
one of the following steps to obtain an exemption or reduced tax rate:
EXEMPTION OF NON-U.S. PERSONS (FORM W-8). Beneficial owners of
Certificates that are non-U.S. Persons generally can obtain a complete
exemption from the withholding tax by filing a signed Form W-8
(Certificate of Foreign Status). If the information shown on Form W-8
changes, a new Form W-8 must be filed within 30 days of such change.
EXEMPTION FOR NON-U.S. PERSON WITH EFFECTIVELY CONNECTED INCOME
(FORM 4224). A non-U.S. Person, including a non-U.S. corporation or
bank with a U.S. branch, for which the interest income is effectively
connected with its conduct of a trade or business in the United States
can obtain an exemption from the withholding tax by filing Form 4224
(Exemption from Withholding of Tax on Income Effectively Connected with
the Conduct of a Trade or Business in the United States).
EXEMPTION OR REDUCED RATE FOR NON-U.S. PERSONS RESIDENT IN TREATY
COUNTRIES (FORM 1001). Non-U.S. Persons that are beneficial owners of
Certificates residing in a country that has a tax treaty with the United
States can obtain an exemption or reduced tax rate (depending on the
treaty terms) by filing Form 1001 (Ownership, Exemption or Reduced Rate
Certificate). If the treaty provides only for a reduced rate,
withholding tax will be imposed at that rate unless the filer
alternatively files Form W-8. Form 1001 may be filed by the beneficial
owner of Certificates or such owner's agent.
EXEMPTION FOR U.S. PERSONS (FORM W-9). U.S. Persons can obtain a
complete exemption from the withholding tax by filing Form W-9 (Payer's
Request for Taxpayer Identification Number and Certification).
U.S. FEDERAL INCOME TAX REPORTING PROCEDURE. The beneficial owner
of a Global Certificate or, in the case of a Form 1001 or a Form 4224
filer, such owner's agent, files by submitting the appropriate form to
the person through whom it holds the security (the clearing agency, in
the case of persons holding directly on the books of the clearing
agency). Form W-8 and Form 1001 are effective for three calendar years
and Form 4224 is effective for one calendar year.
The term "U.S. Person" means a citizen or resident of the United
States, a corporation or a partnership organized in or under the
laws of the United States or any political subdivision thereof or an
estate, the income of which from sources outside the United States
is includible in gross income for federal income tax purposes
regardless of its source or a trust if a court within the United
States is able to exercise primary supervision of the administration
of the trust and one or more United States fiduciaries have the
authority to control all substantial decisions of the trust.
This summary does not deal with all aspects of U.S. federal
income tax withholding that may be relevant to foreign holders of
the Global Certificates. Investors are advised to consult their own
tax advisors for specific tax advice concerning their holding and
disposing of the Global Certificates.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
Expenses in connection with the offering of the Securities being
registered herein are estimated as follows:
SEC registration fee . . . . . . . . . . . . . . . . . . . . . . $ 304
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . $
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . $
Blue sky fees and expenses . . . . . . . . . . . . . . . . . . . . $
Rating agency fees . . . . . . . . . . . . . . . . . . . . . . . . . $
Trustee's fees and expenses . . . . . . . . . . . . . . . . . . . . $
Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . $
Total . . . . . . . . . . . . . . . . . . . . . . . . $
___________________
* All amounts except the SEC Registration Fee are estimates of expenses
incurred or to be incurred in connection with the issuance and
distribution of a Series of Securities in an aggregate principal amount
assumed for these purposes to be equal to $1,000,000 of Certificates
registered hereby.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
U.S. Bancorp Auto Receivables Corporation (the "Registrant") has
undertaken in its articles of incorporation and bylaws to indemnify, to the
maximum extent permitted by the Oregon Business Corporation Act as from time
to time amended, any currently acting or former director or officer of the
Registrant against any and all liabilities incurred in connection with their
services in such capacities.
ITEM 16. EXHIBITS.
* 1.1 Form of Underwriting Agreement
* 3.1 Articles of Incorporation of the Registrant
* 3.2 Bylaws of the Registrant
* 4.1 Form of Pooling and Servicing Agreement (including form of
Certificates)
* 5.1 Opinion of Miller, Nash, Wiener, Hager & Carlsen LLP with respect to
legality
* 8.1 Opinion of Miller, Nash, Wiener, Hager & Carlsen LLP with respect to
tax matters
*10.1 Form of Receivables Purchase Agreement
*23.1 Consent of Miller, Nash, Wiener, Hager & Carlsen LLP (included in
Exhibit 5.1)
*23.2 Consent of Miller, Nash, Wiener, Hager & Carlsen LLP (included in
Exhibit 8.1)
*24.1 Power of Attorney (included on Page II-3)
___________________
* To be filed.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Form S-3 Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Portland, the State of
Oregon, on March 17, 1997.
U.S. BANCORP AUTO RECEIVABLES CORPORATION
By: /s/ Thomas P. Ducharme
-----------------------------
Name: Thomas P. Ducharme
Title: President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Dwight V. Board, Sheryl W. Dawson and
Deborah B. Goldberg, or any of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and
his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or
their or his substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Form S-3 Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
Signature Title Date
- --------- ----- -----
/s/ Thomas P. Ducharme President and Director March 17, 1997
- ---------------------- (Principal Executive Officer)
Thomas P. Ducharme
/s/ Steven P. Erwin Chief Financial Officer March 17, 1997
- ----------------------- (Principal Financial Officer
Steven P. Erwin and Principal Accounting Officer)
/s/ Dwayne Barney Executive Vice President March 17, 1997
- ----------------------- and Director
L. Dwayne Barney Ph.D.
/s/ Harry L. White Executive Vice President March 17, 1997
- ----------------------- and Director
Harry L. White, Ph.D.
/s/ P.K. Chatterjee Director March 17, 1997
- -----------------------
P.K. Chatterjee
Registration No.( )
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
U.S. BANCORP AUTO TRUSTS
(Issuer with respect to the Securities)
U.S. BANCORP AUTO RECEIVABLES CORPORATION
(Sponsor of the Trusts described herein)
(Exact name of Registrant as specified in its charter)
_____________________
EXHIBIT VOLUME
=============================================================================
EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
* 1.1 Form of Underwriting Agreement
* 3.1 Articles of Incorporation of the Registrant
* 3.2 Bylaws of the Registrant
* 4.1 Form of Pooling and Servicing Agreement
(including form of Certificates)
* 5.1 Opinion of Miller, Nash, Wiener, Hager &
Carlsen LLP with respect to legality
* 8.1 Opinion of Miller, Nash, Wiener, Hager &
Carlsen LLP with respect to tax matters
*10.1 Form of Receivables Purchase Agreement
*23.1 Consent of Miller, Nash, Wiener, Hager &
Carlsen LLP (included in Exhibit 5.1)
*23.2 Consent of Miller, Nash, Wiener, Hager &
Carlsen LLP (included in Exhibit 8.1)
*24.1 Power of Attorney (included on Page II-3)
* To be filed.
