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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) of the SECURITIES EXCHANGE
ACT OF 1934
Commission File Number 333-23405
METLIFE CAPITAL FUNDING CORPORATION III
(originator of the MetLife Capital Equipment Loan Trust Series 1997-A)
on behalf of MetLife Capital Equipment Loan Trust Series 1997-A
(Exact name of Registrant as specified in its charter)
Delaware 91-1788640
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
10900 NE 4th Street, Suite 550
Bellevue, Washington 98004
(Address of principal executive offices and ZIP code)
Registrant's telephone number, including area code: (425) 450-3590
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
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PART I
ITEM 1. BUSINESS
MetLife Capital Equipment Loan Trust 1997-A (the "Trust") is a statutory
business trust created under the laws of Delaware among MetLife Capital
Corporation ("MCC") the Seller, MetLife Capital Funding Corporation III
("MCFCIII") the Transferor and Wilmington Trust Company ("Wilmington") the Owner
Trustee. The trust is engaged in activities limited by the terms of the Trust
Agreement to acquiring, owning and managing the Receivables, issuing and making
payments on the Notes and other activities related thereto.
ITEM 2. PROPERTIES
The property of the Trust includes a portfolio of receivables ("the
Receivables") which consist of fixed rate commercial loan contracts ("Loan
Contracts") secured by commercial or industrial equipment, including the rights
to receive certain payments made with respect to such Loan Contracts. At the
time of the Trust's formation, and on certain Addition Dates thereafter, MCC
sold and contributed to MCFCIII, which in turn conveyed to the Trust all
Receivables listed on the Schedule of Receivables or the Subsequent Schedule of
Receivables.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Investor Certificates are held and delivered in book-entry form through the
facilities of The Depository Trust Company ("DTC") (in the United States) a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities and Exchange Act of 1934, as amended or Cedel or Euroclear (in
Europe).
To the best knowledge of the Registrant, there is no established public trading
market for the Certificates.
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not applicable.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL STATEMENT DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Not applicable.
ITEM 11. EXECUTIVE COMPENSATION
Not applicable.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The $304,203,000 class A Noteholders Investor Certificates are 100% held in
book-entry form by DTC in the name of Cede & Company, as nominee of DTC for
beneficial owners. Following is a list of the persons known to the Registrant to
be the beneficial owner of more than five percent of the Class A Notes:
<TABLE>
<CAPTION>
AMOUNT OF
BENEFICIAL
TYPE OF OWNER NAME OF CLASS A NOTEHOLDER OWNERSHIP PERCENTAGE
------------- -------------------------- ---------- ----------
<S> <C> <C> <C>
Beneficial Fidelity $70,000,000 23.011%
Beneficial Travellers 35,000,000 11.505%
Beneficial Blackrock 32,000,000 10.875%
Beneficial NML 30,000,000 9.862%
Beneficial National Asset 20,000,000 6.575%
Beneficial Brinson 20,000,000 6.575%
Beneficial Mass Mutual 19,000,000 6.246%
Beneficial Meridian 18,000,000 5.917%
Beneficial Hartford 17,500,000 5.753%
Beneficial Delaware 15,703,000 5.162%
</TABLE>
The $26,453,783 Class B Notes are 100% owned by MetLife Capital Funding
Corporation III, as a form of credit enhancement for the securitization.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(3) Exhibits:
99.1 Management's Assertions on Internal Controls.
99.2 Annual Independent Accountants' Report pursuant to Section 4.11 of the
Transfer And Servicing Agreement.
99.3 1997 Annual Statement prepared by the Servicer.
(b) Reports on Form 8-K:
Current reports on Form 8-K are filed after the Distribution Date of
each month (on, or the first business day after, the 20th of the
month). Three reports were filed in fourth quarter of 1997 on October
1, 1997, October 29, 1997, and December 3, 1997. The reports included
the exhibits listed under Item 5 and Item 7.
(c) See (a)(3) above.
(d) Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
March 27, 1998 MetLife Capital Funding Corporation III
on behalf of MetLife Capital Equipment
Loan Trust 1997-A
By: /s/ Linda Foley
-----------------------------
Linda Foley
Vice President and Chief Accounting Officer
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EXHIBIT INDEX
99.1 Management's Assertions on Internal Controls.
99.2 Annual Independent Accountants' Report pursuant to Section 4.11 of the
Transfer And Servicing Agreement.
99.3 1997 Annual Statement prepared by the Servicer.
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EXHIBIT 99.1
MANAGEMENT'S ASSERTIONS ON INTERNAL CONTROLS
Management assessed that MetLife Capital Corporation's internal control
structure over the servicing of the Receivables held by MetLife Capital
Equipment Loan Trust 1997-A (the Receivables) is in accordance with the Transfer
and Servicing Agreement, as of December 31, 1997 and for the period from May 1,
1997 (inception) to December 31, 1997. This assessment was based on criteria for
effective internal control over financial reporting described in Internal
Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and the Transfer and Servicing
Agreement. Based on this assessment, management believes the Company maintained
an effective internal control structure over servicing of the Receivables as of
December 31, 1997 and for the period from May 1, 1997 (inception) to December
31, 1997.
March 19, 1998
MetLife Capital Corporation
<PAGE>
EXHIBIT 99.2
INDEPENDENT ACCOUNTANTS' REPORT ON INTERNAL CONTROL
We have examined management's assertion (Exhibit 99.1) that MetLife Capital
Corporation maintained an effective internal control structure over servicing of
the Receivable held by MetLife Capital Equipment Loan Trust 1997-A, as of
December 31, 1997, and for the period from May 1, 1997 (inception) to December
31, 1997, for the servicing of the Receivables under the terms of the Transfer
and Servicing Agreement dated May 1, 1997, based on criteria for effective
internal control over financial reporting described in "Internal Control -
Integrated Framework" issued by the Committee of Sponsoring Organizations of the
Treadway Commission.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
obtaining an understanding of the internal control structure as it related to
the servicing of the Receivables performed by MetLife Capital Corporation,
testing and evaluating the design and operating effectiveness of the internal
control structure, and such other procedures as we considered necessary in the
circumstances. We believe that our examination provides a reasonable basis for
our opinion.
Because of the inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projections of any
evaluation of internal control structure to future periods are subject to the
risk that the internal control structure may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
In our opinion, management's assertion that MetLife Capital Corporation
maintained an effective internal control structure over servicing of the
Receivables held by MetLife Capital Equipment Loan Trust 1997-A, as of December
31, 1997, and for the period from May 1, 1997 (inception) to December 31, 1997,
insofar as such structure relates to the servicing of the MetLife Capital
Equipment Loan Trust 1997-A Receivables performed by MetLife Capital Corporation
under the terms of the Transfer and Servicing Agreement is fairly stated, in all
material respects, based upon criteria established in "Internal Control -
Integrated Framework" issued by the Committee of Sponsoring Organizations of the
Treadway Commission.
March 19, 1998
/S/ Deloitte & Touche LLP
Seattle, Washington
<PAGE>
EXHIBIT 99.3
<TABLE>
<CAPTION>
METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A SERVICER CERTIFICATE FOR 1997
<S> <C> <C>
$304,203,000 Class A 6.85% Asset Backed Notes
$26,452,783 Class B Fixed Rate Asset Backed Notes
<S>
Transfer (Payment) Date n/a
Collection Period Begin Date 01-May-97
Collection Period End Date 31-Dec-97
Days in accrual period (30/360) 230
Month(s) in Revolving Period 8
PART I -- MONTHLY DATA INPUT
Deposits to Collection Account $75,549,212.65
Collections Allocable to Principal Funding Account $57,645,281.78
Collections Allocable to Interest Payment Account $17,903,930.87
Miscellaneous Data
Initial Pool Balance $330,655,783.00
Current Pool Balance (including addition of Subsequent Receivables) $330,655,783.00
Subsequent Receivables Purchased $57,577,307.83
Current APR of Pool 8.17%
Remaining Residual Amount $1,435,488.18
Obligor Over-Concentration Amount $0.00
Cumulative Net Losses $0.00
Deliquencies - 60 to 90 Days $166,713.00
Deliquencies - Over 90 Days $122,958.00
Realized Losses (Current Period) $0.00
Recoveries $0.00
Acquired Receivables - Transferor (Current Period) $0.00
Acquired Receivables - Servicer (Current Period) $0.00
Investment Earnings
Collection Account $272,795.37
Principal Funding Account $836.57
Reserve Account $144,891.46
Total Investment Earnings $418,523.40
- ----------------------------------------------------------------------------------------------------------------
PART II -- SUMMARY
Total Principal Balance of Notes (Beginning of Period) $330,655,783.00
Class A Note Beginning Principal Balance $304,203,000.00
Class B Note Beginning Principal Balance $26,452,783.00
Total Principal Balance of Notes (End of Period) $330,655,783.00
Class A Note Principal Balance (End of Period) $304,203,000.00
Class A Note Pool Factor (End of Period) 1.0000000
Class B Note Principal Balance (End of Period) $26,452,783.00
Class B Note Pool Factor (End of Period) 1.0000000
Collection Account Deposit
Total Collections and Investment Income for the Period $75,967,736.05
Administration Fee Accrued during this Period $4,000.00
Principal Funding Account (PFA) $57,645,281.78
Class A Noteholders' Principal Distributable Amount $0.00
Class B Noteholders' Principal Distributable Amount $0.00
Interest Payment Account (IPA) $14,471,475.37
Noteholders' Class A Interest Distributable Amount $13,313,106.33
Noteholders' Class B Interest Distributable Amount $1,158,369.04
Servicing Fees Accrued during this Period $1,102,185.92
Reserve Account
Beginning Reserve Account Balance $5,088,828.00
Distribution from Reserve Account for Shortfalls $0.00
Deposits to Reserve Account from PFA/IPA $0.00
Ending Reserve Account Balance $4,742,046.01
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</TABLE>
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<TABLE>
<CAPTION>
METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A SERVICER CERTIFICATE FOR 1997
<S> <C> <C>
PART III -- SERVICING CALCULATIONS
Initial Pool Balance $330,655,783.00
Pool Balance (Beginning of Collection Period) $330,655,783.00
Pool Balance (End of Collection Period) $330,655,783.00
Total Collections $75,967,736.05
Collections Allocable to Principal Funding Account $57,645,281.78
Collections Allocable to Interest Payment Account $17,903,930.87
Prior Principal Funding Account Balance $0.00
Recoveries $0.00
Investment Income for the Period $418,523.40
Principal Funding Account (PFA) $57,645,281.78
Interest Payment Account (IPA) $18,322,454.27
Principal Distributable Amount $57,645,281.78
1. Trigger Tests
(a) Are cumulative net losses >=3.00% of the Original Pool Balance? NO
(b) Has the Reserve Account been below the Specified Reserve Account Balance for 3 consecutive months? NO
(c) Has the avg of the Trust Yields been less than the avg of the Base Rates for 3 consecutive months? NO
(d) Has the Pool Balance been less than the Note Balance for 3 consecutive months? NO
Has an Early Amortization Event Occurred? NO
2. Calculation of Distributable Amounts
Class A Note Beginning Principal Balance $304,203,000.00
Class A Noteholders' Principal Carryover Shortfall (Previous Period) $0.00
Class A Noteholders' Share of the Principal Distribution Amount 0.00%
Class A Noteholders' Principal Distributable Amount $0.00
Class B Note Beginning Principal Balance $26,452,783.00
Class B Noteholders' Principal Carryover Shortfall (Previous Period) $0.00
Class B Noteholders' Share of the Principal Distribution Amount 0.00%
Class B Noteholders' Principal Distributable Amount $0.00
Interest Accrued on Class A Notes this period 6.85% $13,313,106.33
Noteholders' Class A Interest Carryover Shortfall (Previous Period) $0.00
Interest Due (in Arrears) on above Shortfall $0.00
Noteholders' Class A Interest Distributable Amount $13,313,106.33
Interest Accrued on Class B Notes this period 6.85% $1,157,676.64
Noteholders' Class B Interest Carryover Shortfall (Previous Period) $0.00
Interest Due (in Arrears) on above Shortfall $692.40
Noteholders' Class B Interest Distributable Amount $1,158,369.04
3. Allocations from Collection Account
Interest Payment Account (IPA) $18,322,454.27
Servicing Fee Shortfall (Previous Period) $0.00
Servicing Fees Accrued during this Period 0.50% $1,102,185.92
Servicing Fees Paid this Period from IPA $1,102,185.92
Preliminary Servicing Fee Shortfall (Current Period) $0.00
Withdrawal from Reserve Account to Cover Shortfall $0.00
Servicing Fee Shortfall (Current Period) $0.00
Remaining Interest Payment Account (IPA) $17,220,268.35
Administration Fee Shortfall (Previous Period) $0.00
Administration Fee Accrued during this Period $500/mon $4,000.00
Administration Fee Paid this Period from IPA $4,000.00
Preliminary Administration Fee Shortfall (Current Period) $0.00
Withdrawal from Reserve Account to Cover Shortfall $0.00
Administration Fee Shortfall (Current Period) $0.00
Remaining Interest Payment Account (IPA) $17,216,268.35
</TABLE>
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<TABLE>
<CAPTION>
METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A SERVICER CERTIFICATE FOR 1997
<S> <C>
Noteholders' Class A Interest Carryover Shortfall (Previous Period) $0.00
Interest Due (in Arrears) on above Shortfall $0.00
Interest Accrued on Class A Notes this period $13,313,106.33
Noteholders' Class A Interest Distributable Amount from IPA $13,313,106.33
Preliminary Noteholders' Class A Interest Carryover Shortfall (Current Period) $0.00
Withdrawal from Reserve Account to Cover Shortfall $0.00
Noteholders' Class A Interest Carryover Shortfall (Current Period) $0.00
Remaining Interest Payment Account (IPA) $3,903,162.02
Deposit to Reserve Account (from IPA) $0.00
Remaining Interest Payment Account (IPA) $3,903,162.02
Deposit to Principal Funding Account (from IPA) $0.00
Receipt from Reserve Account for shortfall $0.00
Remaining Interest Payment Account (IPA) $3,903,162.02
Noteholders' Class B Interest Carryover Shortfall (Previous Period) $0.00
Interest Due (in Arrears) on above Shortfall $692.40
Interest Accrued on Class B Notes this period $1,157,676.64
Noteholders' Class B Interest Distributable Amount from IPA $1,158,369.04
Noteholders' Class B Interest Carryover Shortfall (Current Period) $0.00
Remaining Interest Payment Account (IPA)(to the Transferor) $2,744,792.98
Principal Funding Account (PFA)(including addition, if any, from IPA) $57,645,281.78
Class A Noteholders' Principal Carryover Shortfall (Previous Period) $0.00
Class A Noteholders' Monthly Principal Distributable Amount $0.00
Class A Noteholders' Principal Distributable Amount Paid from PFA $0.00
Preliminary Class A Noteholders' Principal Carryover Shortfall (Current Period) $0.00
Withdrawal from Reserve Account to Cover Shortfall $0.00
Class A Noteholders' Principal Carryover Shortfall (Current Period) $0.00
Remaining Principal Funding Account (PFA) $57,645,281.78
Deposit to Reserve Account (from PFA) $0.00
Remaining Principal Funding Account (PFA) $57,645,281.78
Class B Noteholders' Principal Carryover Shortfall (Previous Period) $0.00
Class B Noteholders' Monthly Principal Distributable Amount $0.00
Class B Noteholders' Principal Distributable Amount Paid from PFA $0.00
Class B Noteholders' Principal Carryover Shortfall (Current Period) $0.00
Remaining Principal Funding Account $57,645,281.78
Amount to Transferor to purchase Subsequent Receivables $57,577,307.83
--------------
Ending Principal Funding Account Balance $67,973.95
4. Distributions from Reserve Account
Beginning Reserve Account Balance $5,088,828.00
Distribution from Reserve Account $0.00
Withdrawal from Reserve Account to Cover Servicing Fee Shortfall $0.00
Withdrawal from Reserve Account to Cover Administration Fee Shortfall $0.00
Preliminary Noteholders' Class A Interest Carryover Shortfall (Current Period) $0.00
Preliminary Reserve Account Balance $5,088,828.00
Deposit to Reserve Account (from IPA) $0.00
Preliminary Reserve Account Balance $5,088,828.00
Distribution from Reserve Account $0.00
Class A Noteholders' Principal Carryover Shortfall (Current Period) $0.00
Transfer to PFA for Realized Losses $0.00
Preliminary Reserve Account Balance $5,088,828.00
</TABLE>
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<TABLE>
<CAPTION>
METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A SERVICER CERTIFICATE FOR 1997
<S> <C> <C> <C>
Deposit to Reserve Account (from PFA) $0.00
Preliminary Reserve Account Balance $5,088,828.00
Specified Reserve Account Balance $4,742,046.01
Lessor of:
(a) 1.00% of Original Pool Balance at end of Collection Period plus additions; and 1.00% $4,742,046.01
(b) Class A Principal Balance (End of Period) $304,203,000.00
Is the Reserve Account greater than or equal to the Specified Reserve Account Balance? YES
Excess Amount in Reserve Account released to Transferor $346,781.99
Ending Reserve Account Balance $4,742,046.01
5. Trigger Calculations
How many months has the Reserve Account been less than the Specified Reserve Account, if any? 0
Has the avg of the Trust Yields been less than the avg of the Base Rates over 3 consecutive months? NO
How many months has the Pool Balance been less than the Note Balance, if any? 0
6. Ending Balances
Noteholders' Class A Interest Carryover Shortfall (Current Period) $0.00
Noteholders' Class B Interest Carryover Shortfall (Current Period) $0.00
Class A Noteholders' Principal Carryover Shortfall (Current Period) $0.00
Class B Noteholders' Principal Carryover Shortfall (Current Period) $0.00
Class A Note Principal Balance (End of Period) $304,203,000.00
Class B Note Principal Balance (End of Period) $26,452,783.00
Total Principal Balance of Notes (End of Period) $330,655,783.00
Class A Note Pool Factor (End of Period) $304,203,000.00 1.0000000
Class B Note Pool Factor (End of Period) $26,452,783.00 1.0000000
Total Notes (End of Period) 1.0000000
Class A Notes Principal Balance at close of Revolving Period 0.00
Principal Pool Balance at close of Revolving Period 0.00
Class A Noteholders Percentage at the close of the Revolving Period 0.00%
Servicer's Yield $140,643.20
</TABLE>
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