SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1998
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OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number -
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PREMIER AUTO TRUST 1998-1
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
State of Delaware 52-2098434
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
27777 Franklin Road, Southfield, Michigan 48034
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (248) 948-3058
-----------------------
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
<PAGE>
PART I. FINANCIAL INFORMATION
-----------------------------
ITEM 1. FINANCIAL STATEMENTS
- ------- --------------------
The interim financial data presented herein are unaudited, but in the opinion
of management reflect all adjustments necessary for a fair presentation of
such information (see Note 1). Results for interim periods should not be
considered indicative of results for a full year.
2
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
- ------- ----------------------------------
<TABLE>
<CAPTION>
PREMIER AUTO TRUST 1998-1
STATEMENT OF ASSETS, LIABILITIES AND EQUITY
JUNE 30, 1998
(in millions of dollars)
<S> <C>
ASSETS
Cash and Cash Equivalents (Note 1) $ 12.6
Receivables (Note 3) 1,145.1
----------
TOTAL ASSETS $ 1,157.7
==========
LIABILITIES AND EQUITY
Amounts Held for Future Distribution (Note 1) $ 47.4
Asset Backed Notes (Notes 3 and 4) 1,110.3
----------
TOTAL LIABILITIES AND EQUITY $ 1,157.7
==========
<FN>
See Notes to Financial Statements.
</TABLE>
3
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
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PREMIER AUTO TRUST 1998-1
STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
FOR THE PERIOD FEBRUARY 1, 1998 (INCEPTION) THROUGH JUNE 30, 1998
(in millions of dollars)
<TABLE>
<CAPTION>
<S> <C>
CASH RECEIPTS
Proceeds from Sale of Notes $ 1,250.0
Collections of Principal & Interest, and Other 174.8
----------
TOTAL CASH RECEIPTS 1,424.8
----------
CASH DISBURSEMENTS
Purchase of Receivables 1,250.0
Distribution of Principal 139.7
Distribution of Interest 18.7
Distributions of Service Fees 3.8
----------
TOTAL CASH DISBURSEMENTS 1,412.2
----------
CASH RECEIPTS IN EXCESS OF CASH DISBURSEMENTS $ 12.6
==========
<FN>
See Notes to Financial Statements.
</TABLE>
4
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
- ------------------------------------------
PREMIER AUTO TRUST 1998-1
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Basis of Accounting
The financial statements of Premier Auto Trust 1998-1 (the "Trust") are
prepared on the basis of cash receipts and disbursements, which is a
comprehensive basis of accounting other than generally accepted accounting
principles. The primary difference from the accrual basis to this basis is
that the financial statements do not record accrued interest receivable on
the Receivables or accrued interest payable on the Notes from the most recent
Distribution Date to the balance sheet date.
Cash and Cash Equivalents
Short-term instruments with a maturity of less than three months when
purchased are considered to be cash equivalents. The Trust received certain
cash deposits from Chrysler Financial Corporation ("CFC") which are held as
liquidity and credit enhancement reserves and invested in short-term
instruments. Under the Sale and Servicing Agreement, the servicer is required
to convey principal and interest collections to the Trust within two business
days after their receipt. The Trust invests these collections in short-term
instruments pending distribution. If CFC maintains a short-term rating of at
least A-1 by Standard & Poor's and P-1 by Moody's the servicer may convey the
principal and interest collections to the Trust on a monthly basis. In May
1998, CFC met the rating requirements and the servicer began to convey
collections to the Trust on a monthly basis.
Amounts Held for Future Distribution
Amounts held for future distribution represent certain short-term investments
held for future distributions to Noteholders, and for liquidity and credit
enhancement reserves. Amounts held for liquidity and credit enhancement
reserves which are not utilized for future distributions to Noteholders will
be distributed to Premier Receivables L.L.C. ("Premier L.L.C.").
NOTE 2 - RELATED PARTIES
- ------------------------
Premier L.L.C. is a limited liability company controlled by CFC. On May 7,
1998, CFC's parent, Chrysler Corporation ("Chrysler"), Daimler-Benz
Aktiengesellschaft ("Daimler") and DaimlerChrysler Aktiengesellschaft
("DaimlerChrysler") entered into a Business Combination Agreement providing
for (i) the merger of a newly created Delaware corporation with and into
Chrysler ("the Chrysler Merger"); (ii) an offer by DaimlerChrysler to
exchange DaimlerChrysler ordinary shares for Daimler ordinary shares; and
(iii) the merger of Daimler with and into DaimlerChrysler. In the Chrysler
Merger, each share of outstanding Chrysler common stock will be converted
into the right to receive DaimlerChrysler shares. As a result of these
transactions, DaimlerChrysler will be owned by the former shareholders of
Chrysler and Daimler, and Chrysler will be a wholly owned subsidiary of
DaimlerChrysler. Consummation of the transactions contemplated by the
Business Combination Agreement is subject to the approval of Chrysler's and
Daimler's shareholders, regulatory approvals and the satisfaction or waiver
of various other conditions as more fully described in the Agreement.
5
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
- ------------------------------------------
PREMIER AUTO TRUST 1998-1
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - SALE OF ASSET BACKED NOTES
- -----------------------------------
The Trust was formed under the laws of Delaware pursuant to an Amended and
Restated Trust Agreement dated as of February 1, 1998, among Premier L.L.C.,
CFC, and Chase Manhattan Bank Delaware, acting thereunder not in its
individual capacity but solely as trustee of the Trust.
On February 26, 1998, the Trust issued $225,000,000 aggregate principal
amount of 5.545% Asset Backed Notes, Class A-1 (the "Class A-1 Notes"),
$400,000,000 aggregate principal amount of 5.61% Asset Backed Notes, Class
A-2 (the "Class A-2 Notes"), $270,000,000 aggregate principal amount of 5.63%
Asset Backed Notes, Class A-3 (the "Class A-3 Notes"), and $308,125,000
aggregate principal amount of 5.70% Asset Backed Notes, Class A-4 (the "Class
A-4 Notes" and, together with the Class A-1 Notes, the Class A-2 Notes and
the Class A-3 Notes, the "Class A Notes"). The Trust also issued $46,875,000
aggregate principal amount of 5.92% Asset Backed Notes, Class B (the "Class B
Notes" and, together with the Class A Notes, the "Notes"). The Notes were
issued pursuant to an Indenture dated as of February 1, 1998, between the
Trust and The Bank of New York, as Indenture Trustee.
The assets of the Trust include a pool of motor vehicle retail installment
sale contracts ("Receivables"), secured by security interests in the motor
vehicles financed thereby and including certain monies due or received
thereunder on or after February 11, 1998, transferred to the Trust by CFC on
February 26, 1998. The Notes are secured by the assets of the Trust pursuant
to the Indenture.
NOTE 4 - PRINCIPAL AND INTEREST PAYMENTS
- ----------------------------------------
Interest on the Notes will accrue at the respective fixed per annum interest
rates specified above. Interest on the Notes will generally be payable on the
sixth 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 March
6, 1998. Principal of the Notes will be payable on each Distribution Date to
the extent described in the Prospectus Supplement dated February 18, 1998,
and the Prospectus dated September 10, 1997 (collectively, the "Prospectus");
however, no principal payments will be made (i) on the Class A-2 Notes until
the Class A-1 Notes have been paid in full, (ii) on the Class A-3 Notes until
the Class A-2 Notes have been paid in full, (iii) on the Class A-4 Notes
until the Class A-3 Notes have been paid in full or (iv) on the Class B Notes
until the Class A-4 Notes have been paid in full. Each class of the Notes
will be payable in full on the applicable final scheduled Distribution Date
as set forth in the Prospectus. However, payment in full of a class of Notes
could occur earlier than such dates as described in the Prospectus. In
addition, the Class A-4 Notes and Class B Notes will be subject to redemption
in whole, but not in part, on any Distribution Date on which the Servicer
exercises its option to purchase the Receivables. 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.
NOTE 5 - FEDERAL INCOME TAXES
- -----------------------------
In the opinion of outside legal counsel, for federal income tax purposes, the
Notes will be characterized as debt, and the Trust will not be characterized
as an association (or a publicly traded partnership) taxable as a
corporation.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
The Trust was formed under the laws of Delaware pursuant to an Amended and
Restated Trust Agreement (the "Trust Agreement") dated as of February 1,
1998, among Premier L.L.C., CFC, and Chase Manhattan Bank Delaware, acting
thereunder not in its individual capacity but solely as trustee of the Trust.
On February 26, 1998, the Trust issued $225,000,000 aggregate principal
amount of 5.545% Asset Backed Notes, Class A-1 (the "Class A-1 Notes"),
$400,000,000 aggregate principal amount of 5.61% Asset Backed Notes, Class
A-2 (the "Class A-2 Notes"), $270,000,000 aggregate principal amount of 5.63%
Asset Backed Notes, Class A-3 (the "Class A-3 Notes"), and $308,125,000
aggregate principal amount of 5.70% Asset Backed Notes, Class A-4 (the "Class
A-4 Notes" and, together with the Class A-1 Notes, the Class A-2 Notes and
the Class A-3 Notes, the "Class A Notes"). The Trust also issued $46,875,000
aggregate principal amount of 5.92% Asset Backed Notes, Class B (the "Class B
Notes" and, together with the Class A Notes, the "Notes"). The Notes were
issued pursuant to an Indenture dated as of February 1, 1998, between the
Trust and The Bank of New York, as Indenture Trustee. The assets of the Trust
include a pool of motor vehicle retail installment sale contracts (the
"Receivables"), secured by security interests in the motor vehicles financed
thereby and including certain monies due or received thereunder on or after
February 11, 1998, transferred to the Trust by CFC on February 26, 1998. The
Notes are secured by the assets of the Trust pursuant to the Indenture.
The Trust has no employees.
7
<PAGE>
PART II. OTHER INFORMATION
--------------------------
ITEM 1
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There is nothing to report with regard to this item.
ITEM 2
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(1) The effective date of the Securities Act registration statement:
August 1, 1997. The date of the Prospectus Supplement is February 18,
1998.
(2) The offering date: February 18, 1998
(4) The offering did not terminate before any securities were sold.
(i) The offering has terminated and all securities registered were sold
before termination.
(ii) The name(s) of the managing underwriter(s):
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Bear, Stearns & Co. Inc.
Salomon Brothers Inc
(iii) The title of each class of securities registered:
5.61% Asset Backed Notes, Class A-2
5.63% Asset Backed Notes, Class A-3
5.70% Asset Backed Notes, Class A-4
5.92% Asset Backed Notes, Class B
(iv) For each class of securities (other than a class of securities into
which a class of convertible securities registered may be converted
without additional payment to the issuer):
8
<PAGE>
<TABLE>
<CAPTION>
Aggregate Aggregate
price of offering
Title offering price of
of Amount amount Amount amount
Security registered registered sold sold
-------- ---------- ---------- ---- --------
<S> <C> <C> <C> <C>
5.61% Asset
Backed Notes,
Class A-2 $ 400,000,000 $ 399,970,597 $ 400,000,000 $ 399,970,597
5.63% Asset
Backed Notes,
Class A-3 $ 270,000,000 $ 269,968,689 $ 270,000,000 $ 269,968,689
5.70% Asset
Backed Notes,
Class A-4 $ 308,125,000 $ 308,093,630 $ 308,125,000 $ 308,093,630
5.92% Asset
Backed Notes
Class B $ 46,875,000 $ 46,872,894 $ 46,875,000 $ 46,872,894
-------------- -------------- -------------- --------------
TOTAL $1,025,000,000 $1,024,905,810 $1,025,000,000 $1,024,905,810
</TABLE>
(v) The amount of expenses incurred for the issuer's account in
connection with the issuance and distribution of the securities
registered for the following:
(A) Direct or indirect payments to directors, officers, general partners
of the issuer or their associates; to person owning ten (10) percent
or more of any class of equity securities of the issuer; and to
affiliates of the issuer: None
(B) Direct or indirect payments to others:
<TABLE>
<S> <C> <C>
(1) Underwriting discounts and commissions: $2,090,625
(2) Finders' Fees: $0
(3) Expenses paid to or for underwriters: $0
(4) Other expenses: $0
(5) Total expenses: $2,090,625
</TABLE>
(vi) The net offering proceeds to the issuer after deducting the total
expenses: $1,022,815,185
(vii) The amount of net offering proceeds to the issuer used for
construction of plant, building and facilities; purchase and
installation of machinery and equipment; purchase of real estate;
acquisition of other business(es); repayment of indebtedness; working
capital; temporary investments (which should be specified): None
Any other purposes for which at least five (5) percent of the
issuer's total offering
9<PAGE>
proceeds or $100,000 has been used:
(A) Direct or indirect payments to directors, officers, general partners
of the issuer or their associates; to persons owning ten (10) percent
or more of any class of equity securities of the issuer; and to
affiliates of the issuer: None
(B) Direct or indirect payments to others:
The net proceeds from the sale of the securities were applied by the
issuer (i) to the purchase of receivables from Chrysler Financial
Corporation and (ii) to make the initial deposit into the Reserve
Account: $1,022,815,185
(viii) This Item does not represent a material change in the use of proceeds
described in the prospectus.
ITEMS 3,4,5
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There is nothing to report with regard to these items.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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(a) The following exhibits are filed as a part of this report:
Exhibit No.
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3 Certificate of Trust of Premier Auto Trust 1998-1. Filed as
Exhibit 3 to the Trust's Quarterly Report on Form 10Q for the
period ended March 31, 1998, and incorporated herein by
reference.
4.1 Amended and Restated Trust Agreement, dated as of February 1,
1998, among Premier Receivables L.L.C., Chrysler Financial
Corporation and Chase Manhattan Bank Delaware, as Owner Trustee.
Filed as Exhibit 4.1 to the Trust's Quarterly Report on Form 10Q
for the period ended March 31, 1998, and incorporated herein by
reference.
4.2 Indenture, dated as of February 1, 1998, between Premier Auto
Trust 1998-1 and The Bank of New York, as Indenture Trustee
(excluding Schedule A). Filed as Exhibit 4.2 to the Trust's
Quarterly Report on Form 10Q for the period ended March 31, 1998,
and incorporated herein by reference.
4.3 Sale and Servicing Agreement, dated as of February 1, 1998,
between Premier Auto Trust 1998-1 and Chrysler Financial
Corporation (excluding Schedules A and C). Filed as Exhibit 4.3
to the Trust's Quarterly Report on Form 10Q for the period ended
March 31, 1998, and incorporated herein by reference.
27 Financial Data Schedule
(b) No reports on Form 8-K were filed by the Trust during the quarter for
which this report is filed.
10
<PAGE>
PREMIER AUTO TRUST 1998-1
-------------------------
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Premier Auto Trust 1998-1 (Registrant)
By: Chrysler Financial Corporation, as Servicer
-------------------------------------------
Date: July 31, 1998 By: /s/ T.F. Gilman
---------------------------------------------
T. F. Gilman, Vice President and Controller
Principal Accounting Officer
11
<PAGE>
PREMIER AUTO TRUST 1998-1
-------------------------
EXHIBIT INDEX
-------------
Exhibit
Number Description of Exhibit
-------- ----------------------
3 Certificate of Trust of Premier Auto Trust 1998-1. Filed as
Exhibit 3 to the Trust's Quarterly Report on Form 10Q for the
period ended March 31, 1998, and incorporated herein by
reference.
4.1 Amended and Restated Trust Agreement, dated as of February 1,
1998, among Premier Receivables L.L.C., Chrysler Financial
Corporation and Chase Manhattan Bank Delaware, as Owner Trustee.
Filed as Exhibit 4.1 to the Trust's Quarterly Report on Form 10Q
for the period ended March 31, 1998, and incorporated herein by
reference.
4.2 Indenture, dated as of February 1, 1998, between Premier Auto
Trust 1998-1 and The Bank of New York, as Indenture Trustee
(excluding Schedule A). Filed as Exhibit 4.2 to the Trust's
Quarterly Report on Form 10Q for the period ended March 31, 1998,
and incorporated herein by reference.
4.3 Sale and Servicing Agreement, dated as of February 1, 1998,
between Premier Auto Trust 1998-1 and Chrysler Financial
Corporation (excluding Schedules A and C). Filed as Exhibit 4.3
to the Trust's Quarterly Report on Form 10Q for the period ended
March 31, 1998, and incorporated herein by reference.
27 Financial Data Schedule
E-1
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUN-30-1998
<CASH> $ 13
<SECURITIES> 0
<RECEIVABLES> 1,145
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,158
<CURRENT-LIABILITIES> 48
<BONDS> 1,110
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,158
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
