SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______ to __________
Commission file number: 000-25495
CIT MARINE TRUST 1999-A
(Exact name of registrant as specified in its charter)
Delaware 22-3636314
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o The CIT Group Securitization Corporation II
650 CIT Drive
Livingston, New Jersey 07039
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (973) 740-5000
Securities registered pursuant to Section 12(b) of the Act:
None
(Title of Class)
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
<PAGE>
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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<PAGE>
PART I
Item 1. Business.
On February 23, 1999 The CIT Group Securitization Corporation II (the
"Company") sold $325,000,000 aggregate principal amount of Class A-1 5.45%
Asset-Backed Notes, $179,000,000 aggregate principal amount of Class A-2 5.80%
Asset-Backed Notes, $117,000,000 aggregate principal amount of Class A-3 5.85%
Asset-Backed Notes, $103,134,000 aggregate principal amount of Class A-4 6.25%
Asset-Backed Notes (the "Notes") and $11,028,156 aggregate principal amount of
6.20% Asset-Backed Certificates (the "Certificates"). The Notes and the
Certificates have the benefit of certain financial guaranty insurance policies
issued by MBIA Insurance Corporation and funds deposited in a reserve account
established pursuant to a Sale and Servicing Agreement between The CIT Group
Securitization Corporation II, The CIT Group/Sales Financing, Inc., CIT Marine
Trust 1996-A and the CIT Marine Trust 1999-A, dated as of February 1, 1999 (the
"Sale and Servicing Agreement"). The Notes and Certificates were offered for
sale to the public pursuant to a prospectus supplement dated February 12, 1999
to the prospectus dated September 29, 1998 (the "Prospectus").
The Certificates represent an ownership interest in the CIT Marine Trust
1999-A (the "Trust") and the Notes represent obligations of the Trust. The Trust
was created, and the Certificates were issued, pursuant to a Trust Agreement
between The CIT Group Securitization Corporation II and Chase Manhattan Bank
Delaware, as Owner trustee, dated as of February 1, 1999 (the "Trust
Agreement"). The Notes were issued pursuant to an Indenture between the Trust
and Harris Trust and Savings Bank, as Indenture Trustee, dated as of February 1,
1999 (the "Indenture").
The Trust's only business is to act as a passive conduit to permit
investment in a pool of retail consumer receivables.
Year 2000 Compliance. The CIT Group/Sales Financing, Inc. ("Servicer")
successfully completed its Year 2000 transition and to date has not experienced
any Year 2000 operational problems in its Information Technology (IT) systems
and its non-IT systems. The Servicer has not received indications from any
material third party that they have experienced any Year 2000 problems. Although
the Servicer does not anticipate that Year 2000 problems will arise in its
operations, the Servicer may continue to be exposed to Year 2000 risks from
third parties.
Item 2. Properties.
The property of the Trust primarily consists of a pool of marine
installment sale contracts and direct loans secured by the new and used boats
financed thereby (the "Contracts") and certain other property described in the
Prospectus, including, without limitation, $27,568,581 which was deposited in
the reserve account from the proceeds of loan made by the Servicer pursuant to a
Loan Agreement among CIT Marine trust 1999-A, Harris trust and Savings Bank, as
Indenture Trustee and The CIT Group/Sales Financing, Inc., as Servicer and
Lender.
<PAGE>
Certain Contracts were acquired by the Company from The CIT Group/Sales
Financing, Inc. pursuant to the terms of a Purchase Agreement between The CIT
Group/Sales Financing, Inc. and The CIT Group Securitization Corporation II,
dated as of February 1, 1999, and sold by the Company to the Trust pursuant to
the Sale and Servicing Agreement. The remainder of the Contracts were acquired
by the Trust from CIT Marine Trust 1996-A pursuant to the Sale and Servicing
Agreement.
Information related to the payment on the Contracts by the obligors under
the Contracts is set forth in the 1999 Annual Statement of Trust filed as
Exhibit 99.3 to this Annual Report on Form 10-K.
Item 3. Legal Proceedings.
The Registrant knows of no material legal proceeding with respect to or
involving the Owner Trustee, the Company or CITSF.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of Certificateholders during the fiscal
year covered by this report.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The Notes are held and delivered in book-entry form through the facilities
of The Depository Trust Company ("DTC"), a "clearing agency" registered pursuant
to the provisions of Section 17A of the Securities Exchange Act of 1934, as
amended.
As of January 5, 2000, 100% of the Class A-1 Notes were held in the
nominee name of Cede & Co. for 15 beneficial owners, 100% of the Class A-2 Notes
were held in the nominee name of Cede & Co. for 15 beneficial owners, 100% of
the Class A-3 Notes were held in the nominee name of Cede & Co. for 3 beneficial
owners, and 100% of the Class A-4 Notes were held in the nominee name of Cede &
Co. for 18 beneficial owners. As of February 23, 1999, 2 definitive Certificates
in the aggregate principal amount of $10,900,000 were held in the name of
Goldman, Sachs & Co., and one definitive Certificate was held in the name of an
affiliate of the Company as registered owner.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
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<PAGE>
PART III
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Not Applicable.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) Exhibits:
Exhibit Number Description
19 Annual Accountants' Report with respect to the
servicing of the contracts by the Servicer,
pursuant to the Sale and Servicing Agreement.
99.1 Annual Officer's Certificate.
99.2 Management's Assertion.
99.3 1999 Annual Statement of Trust.
(b) Reports on Form 8-K:
Current Reports on Form 8-K are filed each month. The reports
include as an exhibit, the Monthly Reports to
Certificateholders. Current Reports on Form 8-K dated March 4,
1999, March 30, 1999, April 27, 1999, May 26, 1999, June 30,
1999, July 30, 1999, August 31, 1999, September 29, 1999,
October 27, 1999, November 30, 1999, December 30, 1999 and
January 31, 2000 were filed with the Securities and Exchange
Commission.
(c),(d) Omitted.
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<PAGE>
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.
CIT Marine Trust 1999-A
(Registrant)
By: The CIT Group/Sales Financing,
Inc.,
as Servicer
Dated: March 31, 2000 By: /s/ Frank Garcia
--------------------------------------
Name: Frank Garcia
Title: Vice President
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Exhibit 19
Annual report of Accountants with respect to the servicing of the contracts by
the Servicer, pursuant to the Sale and Servicing Agreement
Independent Auditors' Report
The Board of Directors
The CIT Group, Inc.:
We have examined management's assertion about The CIT Group/Sales
Financing, Inc. and The CIT Group/Consumer Finance, Inc.'s (the Companies), both
wholly-owned subsidiaries of The CIT Group, Inc., compliance with the minimum
servicing standards identified in the Mortgage Bankers Association of America's
Uniform Single Attestation Program for Mortgage Bankers as of and for the year
ended December 31, 1999 included in the accompanying management assertion.
Management is responsible for the Companies' compliance with those minimum
servicing standards. Our responsibility is to express an opinion on management's
assertion about the Companies' 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 the Companies' compliance with the
minimum servicing standards 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 the Companies' compliance with the minimum servicing
standards.
In our opinion, management's assertion that the Companies have complied in
all material respects with the aforementioned minimum servicing standards as of
and for the year ended December 31, 1999 is fairly stated, in all material
respects.
/s/ KPMG LLP
March 31, 2000
Exhibit 99.1
CIT MARINE TRUST 1999-A
ANNUAL OFFICER'S CERTIFICATE
COMPLIANCE WITH AGREEMENT
The undersigned certifies that he is a Vice President of The CIT
Group/Sales Financing, Inc., a corporation organized under the laws of the state
of Delaware ("CITSF"), and that as such he is duly authorized to execute and
deliver this certificate on behalf of CITSF in connection with Section 4.10 (a)
of the Sale and Servicing Agreement, dated as of February 1, 1999 (the
"Agreement"), among CITSF, The CIT Group Securitization Corporation II, as
Seller, and CIT Marine Trust 1999-A, for which Chase Manhattan Bank Delaware
acts as Owner Trustee and Harris Trust and Savings Bank acts as Indenture
Trustee (all capitalized terms used herein without definition having the
respective meanings specified in the Agreement). The undersigned further
certifies to the Owner Trustee and to the Indenture Trustee that a review of the
activities of CITSF during the preceding calendar year and of its performance
under the Agreement has been made under his supervision and to the best of his
knowledge, based on such review, CITSF has fulfilled its obligations under the
Agreement during the preceding calendar year.
IN WITNESS WHEREOF, I have affixed hereto my signature this 31st day of
March, 2000.
/s/ Frank Garcia
-----------------------------
Name: Frank Garcia
Title: Vice President
Exhibit 99.2
March 31, 2000
MANAGEMENT'S ASSERTION
As of and for the year ended December 31, 1999, The CIT Group/Sales
Financing, Inc. and The CIT Group/Consumer Finance, Inc. (the Companies), both
wholly owned subsidiaries of The CIT Group, Inc., have complied in all material
respects with the minimum servicing standards as set forth in the Mortgage
Bankers Association of America's Uniform Single Attestation Program for Mortgage
Bankers. As of and for this same period, the Companies had in effect a fidelity
bond and errors and omissions policy in the amount of $50 million and $5
million, respectively.
THE CIT GROUP/SALES FINANCING, INC.
/s/ Thomas B. Hallman
-------------------------------------------
Thomas B. Hallman
President and Chief Executive Officer
THE CIT GROUP/CONSUMER FINANCE, INC.
/s/ Thomas B. Hallman
-------------------------------------------
Thomas B. Hallman
President and Chief Executive Officer
<PAGE>
MINIMUM SERVICING STANDARDS
I. CUSTODIAL BANK ACCOUNTS
1. Reconciliations shall be prepared on a monthly basis for all custodial
bank accounts and related bank clearing accounts. These reconciliations shall:
o be mathematically accurate;
o be prepared within forty-five (45) calendar days after the cutoff
date;
o be reviewed and approved by someone other than the person who
prepared the reconciliation; and
o document explanations for reconciling items. These reconciling
items shall be resolved within ninety (90) calendar days of their
original identification.
2. Funds of the servicing entity shall be advanced in cases where there is
an overdraft in an investor's or a mortgagor's account.
3. Each custodial account shall be maintained at a federally insured
depository institution in trust for the applicable investor.
4. Escrow funds held in trust for a mortgagor shall be returned to the
mortgagor within thirty (30) calendar days of payoff of the mortgage loan.
II. MORTGAGE PAYMENTS
1. Mortgage payments shall be deposited into the custodial bank accounts
and related bank clearing accounts within two business days of receipt (with the
exception of securitization servicing contracts for which custodial accounts are
not applicable).
2. Mortgage payments made in accordance with the mortgagor's loan
documents shall be posted to the applicable mortgagor records within two
business days of receipt.
3. Mortgage payments shall be allocated to principal, interest, insurance,
taxes or other escrow items in accordance with the mortgagor's loan documents.
4. Mortgage payments identified as loan payoffs shall be allocated in
accordance with the mortgagor's loan documents.
III. DISBURSEMENTS
1. Disbursements made via wire transfer on behalf of a mortgagor or
investor shall be made only by authorized personnel.
2. Disbursements made on behalf of a mortgagor or investor shall be posted
within two business days to the mortgagor's or investor's records maintained by
the servicing entity.
<PAGE>
3. Tax and insurance payments shall be made on or before the penalty or
insurance policy expiration dates, as indicated on tax bills and insurance
premium notices, respectively, provided that such support has been received by
the servicing entity at least thirty (30) calendar days prior to these dates.
4. Any late payment penalties paid in conjunction with the payment of any
tax bill or insurance premium notice shall be paid from the servicing entity's
funds and not charged to the mortgagor, unless the late payment was due to the
mortgagor's error or omission.
5. Amounts remitted to investors per the servicer's investor reports shall
agree with the canceled checks, or other form of payment, or custodial bank
statements.
6. Unissued checks shall be safeguarded so as to prevent unauthorized
access.
IV. INVESTOR ACCOUNTING AND REPORTING
1. The servicing entity's investor reports shall agree with, or reconcile
to, investors' records on a monthly basis as to the total unpaid principal
balance and number of loans serviced by the servicing entity.
V. MORTGAGOR LOAN ACCOUNTING
1. The servicing entity's mortgage loan records shall agree with, or
reconcile to, the records of mortgagors with respect to the unpaid principal
balance on a monthly basis.
2. Adjustments on ARM loans shall be computed based on the related
mortgage note and any ARM rider.
3. Escrow accounts shall be analyzed, in accordance with the mortgagor's
loan documents, on at least an annual basis.
4. Interest on escrow accounts shall be paid, or credited, to mortgagors
in accordance with the applicable state laws.
VI. DELINQUENCIES
1. Records documenting collection efforts shall be maintained during the
period a loan is in default and shall be updated at least monthly. Such records
shall describe the entity's activities in monitoring delinquent loans including,
for example, phone calls, letters and mortgage payment rescheduling plans in
cases where the delinquency is deemed temporary (e.g., illness or unemployment).
VII. INSURANCE POLICIES
1. A fidelity bond and errors and omissions policy shall be in effect on
the servicing entity throughout the reporting period in the amount of coverage
represented to investors in management assertion.
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Exhibit 99.3
CIT MARINE TRUST 1999-A
Exhibit 10K
For The Year Ending 12/31/99
<TABLE>
<CAPTION>
<S> <C>
I. All payments on the Contract 206,611,294.17
II. All liquidation Proceeds on the Contract with respect to Principal 1,303,633.56
III. Repurchased Contracts 728,019.59
IV. Investment Earnings on Collection Account 45,580.43
V. Servicer Monthly Advances 7,182,963.58
VI. Reimbursement of prior Monthly Advances (4,814,774.90)
VII. Insurer Deposits 0.00
VIII. Release of the Additional Enhancement Requirement Sub-Account 184,637.51
IX. Incorrect Deposits 0.00
Total available amount in Collection Account 211,241,353.94
Draws from the Reserve Account 0.00
Draws on the Note Insurance Policy 0.00
Draws on the Certificate Insurance Policy 0.00
1. Aggregate Distribution made in respect of Interest
(a) Class A-1 Notes @5.450% 11,575,014.53
(b) Class A-2 Notes @5.800% 9,286,401.04
(c) Class A-3 Notes @5.850% 6,122,210.37
(d) Class A-4 Notes @6.250% 5,765,663.59
--------------
TOTAL 32,749,289.53
566,733.25
(e) Certificate Interest Distribution
2. Aggregate Distribution made in respect of Primary Principal 151,952,618.17
(a) Class A-1 Notes 0.00
(b) Class A-2 Notes 0.00
(c) Class A-3 Notes 0.00
---------------
(d) Class A-4 Notes TOTAL 151,952,618.17
1,534,874.93
(e) Certificate Primary Principal Distribution
3. Additional Principal Distribution 10,080,812.76
(a) Class A-1 Notes 0.00
(b) Class A-2 Notes 0.00
(c) Class A-3 Notes 0.00
--------------
(d) Class A-4 Notes TOTAL 10,080,812.76
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(e) Certificate Additional Principal Distribution 0.00
4. Insurance Fee, including accrued and unpaid amounts 803,058.38
5. Reimbursement of Insurance Policy Draws
(a) Note Insurance Policy 0.00
(b) Certificate Insurance Policy 0.00
----------
TOTAL 0.00
6. Lender Fees 235,825.52
7. Servicing Fee 3,052,354.64
8. Deposits to the Additional Enhancement Sub-Account 967,682.38
9. Deposits to the Reserve Account 9,298,104.42
</TABLE>
<TABLE>
<CAPTION>
Loan Excess Additional Enhance
2. Distributions from the Reserve Account Sub-Account Sub-Account Sub-Account
------------ ------------ ------------------
<S> <C> <C> <C>
(a) Draws to the Note Distribution Account
(b) Draws to the Certificate Distribution Account 0.00 0.00 0.00
(c) Release to the Collection Account 0.00 0.00 0.00
(d) Distribution to Lender 0.00 0.00 184,637.51
(e) Distribution to Affiliated Owner 5,758,216.44 0.00 0.00
0.00 9,298,104.42 0.00
Total Distributions from the Reserve Account
15,240,958.37
</TABLE>
<TABLE>
<CAPTION>
Amount #
<S> <C> <C>
(a) Liquidated Contracts 2,194,918.97 60
Delinquency Information as of 12/31/99
31-59 Dys 8,363,524.51 345
60-89 days 1,760,518.74 96
90-119 days 2,389,690.30 73
120-180 days 2,970,027.84 101
181 days+ 1,574,036.66 54
Repossessed Inventory 803,400.28 42
</TABLE>
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