SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________________
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _________________
Commission file number 333-32937
MMCA Auto Owner Trust 1997-1
MMCA Auto Receivables, Inc.
(Originator of the MMCA Auto Owner Trust 1997-1)
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
33-0570905
(IRS Employer Identification No.)
6363 Katella Avenue
Cypress, California 90630-5205
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 236-1592
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act: None.
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. X
State the aggregate market value of the voting stock held
by non-affiliates of the registrant: None.
Indicate the number of share outstanding of the registrant's
classes of common stock, as of the latest practicable date: None.
Documents incorporated by reference: None.
PART I
Item 1. Business
Not applicable.
Item 2. Properties
MMCA Auto Owner Trust 1997-1 (the "Trust") was formed on September
24, 1997 pursuant to a Trust Agreement (the "Trust Agreement"),
dated as of September 24, 1997, between MMCA Auto Receivables,
Inc., as depositor ("MARI"), and Wilmington Trust Company, as
owner trustee. Pursuant to the Trust Agreement, the Trust issued
certificates evidencing an interest in the trust property (the
"Certificates"). The Certificates are held by MMCA Auto Receivables
Inc. and Mitsubishi Motors Credit of America, Inc.
Pursuant to an Indenture, dated as of October 1, 1997, between the
Trust, as issuer, and Bank of Tokyo - Mitsubishi Trust Company, as
indenture trustee (the "Indenture Trustee"), the Trust issued asset
- -backed notes (the "Notes"). The Notes consist of four classes (the
"5.63% Class A-1 Asset Backed Notes," "5.79% Class A-2 Asset Backed
Notes," "6.08% Class A-3 Asset Backed Notes" and "6.17 Class A-4
Asset Backed Notes"). The 5.63% Class A-1 Asset Backed Notes, 5.79%
Class A-2 Asset Backed Notes, 6.08% Class A-3 Asset Backed Notes and
6.17% Class A-4 Asset Backed Notes were registered and publicly
offered and sold.
The assets of the Trust primarily include a pool of motor vehicle
retail installment sale contracts originated by Mitsubishi Motors
Credit of America, Inc. ("MMCA") and secured by new and used motor
vehicles and light- and medium-duty trucks. The Trust's business
activities include acquiring and holding the assets of the Trust,
issuing the Notes, the Certificates and the Final Payment Certificate
and distributing payments on the Notes, the Certificates and the
Final Payment Certificate.
Rider A:
Pursuant to a Sale and Servicing Agreement, dated as of October 1, 1997,
among the Trust, as issuer, MARI, as seller, and MMCA, as servicer,
MMCA administers and services the Trust's pool of motor vehicle retail
installment contracts.
Rider B:
The payment of principal and interest on the Notes could be delayed if
MMCA, in its capacity as servicer, or the Indenture Trustee experience
problems in their computer programs relating to the year 2000. Many
existing computer programs use only two digits to identify a year.
These programs could fail or produce erroneous results during the
transition from the year 1999 to the year 2000 and afterwards. MMCA
has evaluated the impact of preparing its systems for the year 2000.
It has identified areas of potential impact and is implementing
conversion efforts. It believes its mission-critical applications,
including its systems for collections on motor vehicle retail
installment sale contracts and servicing motor vehicle retail
installment sale contracts, are already year 2000 compliant. MMCA's
target is to have all other systems ready for the year 2000 in
advance of December 31, 1999.
If MMCA, in its capacity as the servicer of the Trust's pool of motor
vehicle retail installment sale contracts, does not have a computer
system that is year 2000 compliant by the year 2000, MMCA's ability
to service the receivables may be materially and adversely affected.
If the Indenture Trustee does not have a computer system that is year
2000 compliant by the year 2000, the Indenture Trustee's ability to
make distributions on the Notes may be materially and adversely affected.
Item 2. Properties (continued)
The following tables set forth the delinquency experience with respect
to the level payments due each month on the Trust's motor vehicle
retail installment sale contracts but does not include the delinquency
experience with respect to balloon payments due at the end of the
term of the Trust's contracts which provide for such payments. The
period of delinquency is based on the number of days for which more
than 10% of a level payment is contractually past due, and the
delinquency rate as a percentage of the balance outstanding represents
delinquent dollars as a percentage of dollars outstanding.
December 31, 1998
Contracts Balances
of Receivables
Delinquent Contracts:
(i) 30-59 Days 1,192 $9,434,180.77
(ii) 60-89 Days 379 $3,252,120.02
(iii) 90 Days or More 185 $1,714,823.07
December 31, 1998
% of Contracts % of Balance
Outstanding Outstanding
Delinquency Rates:
(i) 30-59 Days Delinquent 3.81% 3.77%
(ii) 60-89 Days Delinquent 1.21% 1.30%
(iii) 90 Days or More Delinquent 0.59% 0.69%
The following table sets forth the net loss experience with respect
to the payments due each month on the Trust's motor vehicle retail
installment sale contracts, including contracts that provide for
balloon payments at the end of the terms of such contracts.
December 31, 1998
Contracts Amount
Aggregate Net Losses 1,221 $9,991,812.28
Item 3. Legal Proceedings
There is nothing to report with regard to this item.
Item 4. Submission of Matters to a Vote of Security Holders
There is nothing to report with regard to this item.
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters
The holder of record of all the Notes as of December 31, 1998 was
Cede & Co., the nominee of The Depository Trust Company ("DTC") in
the United States. An investor holding Notes is not entitled to
receive a certificate representing such Notes except in limited
circumstances. Accordingly, Cede & Co. is the sole holder of record
of the Notes, which it holds on behalf of brokers, dealers, banks
and other participants in the DTC system. Such participants may
hold Notes for their own accounts or for the accounts of their
customers. The address of Cede & Co. is:
Cede & Co.
c/o The Depository Trust Company
Seven Hanover Square
New York, New York 10004
The holders of record of all of the Certificates as of December 31,
1998 were MMCA Auto Receivables Inc. and Mitsubishi Motors Credit
of America, Inc.
Item 6. Selected Financial Data
Not applicable.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Not applicable.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 8. Financial Statements and Supplementary Data
Not applicable.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
There is nothing to report with regard to this item.
PART III
Item 10. Directors and Executive Officers of the Registrant
Not applicable.
Item 11 Executive Compensation
Not applicable.
Item 12. Security Ownership of Certain Beneficial Owners and Management
There is nothing to report with regard to this item.
Item 13. Certain Relationships and Related Transactions
There is nothing to report with regard to this item.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. Not applicable.
2. Not applicable.
3. Exhibits:
99.1 Annual Statement as to Compliance.
99.2 Annual Independent Public Accountant's
Servicing Report.
(b) Reports on Form 8-K.
The Registrant has filed Current Reports on Form 8-K with the
Securities and Exchange Commission dated February 9, 1998, March 9, 1998,
April 9, 1998, May 8, 1998, June 9, 1998, July 9, 1998, August 7, 1998,
September 9, 1998, October 9, 1998, November 9, 1998, December 7, 1998
and January 7, 1999.
(c) See (a) 3 above.
(d) Not applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
MMCA AUTO OWNER TRUST 1997-1
BY: MMCA AUTO RECEIVABLES, INC.
Date: March 31, 1999
By: /s/ Hideyuki Kitamura
Hideyuki Kitamura
Secretary and Treasurer
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT
REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
No annual report, proxy statement, form of proxy or other
soliciting material has been sent to holders of the Notes during the
period covered by this report and the registrant does not intend to
furnish such materials to holders of the Notes subsequent to the
filing of this report.
Exhibit 99.1
March 31, 1999
The Bank of Tokyo-Mitsubishi, Ltd.,
New York Branch, formerly known as
Mitsubishi Bank Trust Company of New York
1251 Avenue of the Americas
New York, New York 10020
Attention: Mr. Kenichi Tanaka
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Mr. W. Chris Sponenberg
Re: Annual Statement as to Compliance
Gentlemen:
Pursuant to Section 3.10 of that certain Sale and Servicing
Agreement (the "Agreement") by and among MMCA Auto Owner Trust
1997-1, as Issuer, MMCA Auto Receivables, Inc., as Seller, and
Mitsubishi Motors Credit of America, Inc., as Servicer, I
hereby certify the following, as of March 26, 1999: (1) a review
of the activities of the Servicer during the period January 1,
1998 through December 31, 1998 and of its performance of its
obligations under the Agreement has been made under my supervision
and (2) to the best of my knowledge, based on such review, the
Servicer has fulfilled all its obligations under the Agreement
throughout such period.
Sincerely,
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
/s/ Hideyuki Kitamura
- ---------------------------------------
Hideyuki Kitamura
Vice President, Secretary and Treasurer
Exhibit 99.2
Report on Management's Assertion on Compliance with
Minimum Servicing Standards Set Forth in the
Uniform Single Attestation Program for Mortgage Bankers
Independent Accountants' Report
To the Board of Directors and Shareholder
Mitsubishi Motors Credit of America, Inc.
We have examined management's assertion that Mitsubishi Motors
Credit of America, Inc. (MMCA) complied with the minimum servicing
standards set forth in the Mortgage Bankers Association of America's
Uniform Single Attestation Program for Mortgage Bankers (USAP)
except for minimum servicing standards I.4, III.3, III.4, V.2, V.3,
and V.4, which are inapplicable to servicing automobile loans,
during the year ended December 31, 1998, included in the accompanying
report titled Report of Management. Management is responsible for
MMCA's compliance with those requirements. Our responsibility is to
express an opinion on management's assertion about MMCA's compliance
based on our examination.
Our examination was made in accordance with standards established by
the American Institute of Certified Public Accountants and,
accordingly, included examining, on a test basis, evidence about
MMCA's compliance with those requirements and performing such other
procedures as we considered necessary in the circumstances. We believe
that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal determination on MMCA's
compliance with specified requirements.
In our opinion, management's assertion that MMCA complied with the
aforementioned requirements during the year ended December 31, 1998,
is fairly stated, in all material respects.
/s/ Ernst & Young LLP
March 22, 1999
