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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
August 24, 1999
Advanta Conduit Receivables, Inc.
(Exact name of registrant as specified in its charter)
Nevada 333-75295 88-0360305
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
Attention: General Counsel
10790 Rancho Bernardo Drive
San Diego, California 92127
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number,
including area code (858) 676-3099
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Advanta Conduit Receivables, Inc., as Sponsor
on behalf of Advanta Mortgage Loan Trust 1999-3
(Exact name of registrant as specified in its charter)
Nevada 333-75295-01 88-0360305
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
Description of the Certificates and the Mortgage Loans
Advanta Conduit Receivables, Inc. (the "Registrant" or the
"Sponsor") registered an issuance of $1,699,051,007.20 in principal amount of
Mortgage Loan Asset-Backed Certificates on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Act"),
by the Registration Statement on Form S-3 (File No. 333-75295) (the
"Registration Statement").
Pursuant to the Registration Statement, the Sponsor formed
Advanta Mortgage Loan Trust 1999-3 (the "Trust") which issued approximately
$525,000,000 in aggregate principal amount of its Mortgage Loan Asset-Backed
Certificates (the "Certificates"), on August 24, 1999 (the "Closing Date").
This Current Report on Form 8-K is being filed to satisfy an
undertaking to file copies of certain opinions issued in connection with the
issuance of the Certificates, the forms of which were filed as Exhibits to the
Registration Statement.
The primary assets of the Trust are pool of closed-end
mortgage loans ("Mortgage Loans"), used predominantly to refinance an existing
mortgage loan on more favorable terms, to consolidate debt or to obtain cash
proceeds by borrowing against the related borrower's equity in the real property
and improvements pledged to secure the related Mortgage Loan, secured primarily
by mortgages on single-family residences (which may be detached, part of a
two-to four-family dwelling, a condominium unit or a unit in a planned unit
development) which were conveyed to the Trust on the Closing Date. As of the
Closing Date, the Mortgage Loans had the characteristics described in the
Prospectus dated August 10, 1999, the Preliminary Prospectus Supplement dated
August 13, 1999 filed pursuant to Rule 424(b)(3) of the Act with the Commission
and the Prospectus Supplement dated August 17, 1999 filed pursuant to Rule
424(b)(2) of the Act with the Commission.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Not applicable
(b) Not applicable
(c) Exhibits:
5.1 Opinion of Dewey Ballantine LLP regarding legality of the
registered securities, dated August 24, 1999.
8.1 Opinion of Dewey Ballantine LLP regarding tax matters,
dated August 24, 1999.
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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.
ADVANTA CONDUIT RECEIVABLES, INC.
By: /s/ Michael Coco
-----------------------------------------
Name: Michael Coco
Title: Vice President
ADVANTA CONDUIT RECEIVABLES, INC., as
Sponsor on behalf of Advanta Mortgage Loan
Trust 1999-3.
By: /s/ Michael Coco
-----------------------------------------
Name: Michael Coco
Title: Vice President
Dated: August 24, 1999
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EXHIBIT INDEX
Exhibit No. Description
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5.1 Opinion of Dewey Ballantine LLP regarding legality of the
registered securities, dated as of August 24, 1999.
8.1 Opinion of Dewey Ballantine LLP regarding tax matters, dated
as of August 24, 1999.
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Exhibit 5.1
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August 24, 1999
To the Addressees Listed
on Schedule Hereto:
Re: Advanta Mortgage Loan Trust 1999-3 (the "Trust")
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Ladies and Gentlemen:
We have acted as special counsel to Advanta National Bank, a
national banking association (the "Bank"), Advanta Mortgage Corp. Midwest, a
Pennsylvania corporation, Advanta Bank Corp. ("ABC"), a Utah industrial loan
corporation, Advanta Mortgage Corp. Northeast, a New York corporation, Advanta
Finance Corp., a Nevada corporation, Advanta Mortgage Conduit Services, Inc., a
Delaware corporation, Advanta Mortgage Corp. USA, a Delaware corporation
("AMCUSA") (collectively, the "Affiliated Originators"), Advanta Conduit
Receivables, Inc., a Nevada corporation ("ACRI"), and Advanta Mortgage Holding
Company, a Delaware corporation ("AMHC") in connection with the execution and
delivery of the following documents:
(i) Pooling and Servicing Agreement, dated as of August 1,
1999 (the "Pooling and Servicing Agreement"), among ACRI, as sponsor
(the "Sponsor"), AMCUSA, as master servicer, and Bankers Trust Company
of California, N.A., a national banking association, as trustee (the
"Trustee");
(ii) Underwriting Agreement, dated August 17, 1999 (the
"Underwriting Agreement"), between ACRI and Bear, Stearns & Co., Inc.
as the Representative of the Underwriters, (the "Representative");
(iii) Mortgage Loan Transfer Agreement, dated as of August 1,
1999, among the Sponsor, the Affiliated Originators and the Trustee,
and the related Conveyance Agreement, dated as of August 24, 1999 among
such parties (together, the "Transfer Agreement");
(iv) Two letter agreements executed and delivered by AMHC, one
of which is dated August 1, 1999 and is addressed to the Representative
and Ambac Assurance Corporation ("Ambac"), and one of which is dated
August 1, 1999 and is addressed to the Trust and Ambac, pursuant to
which AMHC acknowledges its joint-and-several liability with respect to
certain of ACRI's, the Affiliated Originators' and AMCUSA's obligations
to the Underwriters, Ambac and the Trust (collectively, the "AMHC
Guaranties");
(v) Insurance and Indemnity Agreement, dated as of August 24,
1999 (the "Insurance Agreement"), among Ambac, the Sponsor, the Master
Servicer and the Trustee;
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(vi) Indemnification Agreement, dated as of August 17, 1999
(the "Indemnity Agreement"), among Ambac and the Underwriters; and
(vii) forms of the Certificates.
Capitalized terms used herein, but not defined, shall have the
meanings assigned to them in the Pooling and Servicing Agreement.
We have examined executed copies of the Pooling and Servicing
Agreement, the Underwriting Agreement, the Transfer Agreement, the Insurance
Agreement, the Indemnity Agreement and the AMHC Guaranties (collectively, the
"Documents"). We have also examined a copy of each of the executed Certificates.
We have also examined the Registration Statement (No. 333-75295) filed with the
Securities and Exchange Commission (the "Commission") on Form S-3 (the
"Registration Statement), in the form in which such Registration Statement was
declared effective, the Prospectus dated August 10, 1999 (the "Prospectus"), the
Preliminary Prospectus Supplement dated August 13, 1999 (the "Preliminary
Prospectus Supplement") and the Prospectus Supplement dated August 17, 1999 (the
"Prospectus Supplement") relating to the Class A Certificates.
We have also examined originals or photostatic or certified
copies of all such corporate records of ACRI, AMCUSA, the Affiliated Originators
and AMHC and such certificates of public officials, certificates of corporate
officers, and other documents, and such questions of law, as we have deemed
relevant and necessary as a basis for the opinions hereinafter expressed. As to
certain issues of fact material to the opinions expressed herein, we have, with
your consent, relied to the extent we deemed appropriate upon certificates and
representations of officers of ACRI, AMCUSA, the Affiliated Originators and
AMHC. In making our examinations and rendering the opinions herein expressed, we
have made the following assumptions:
(1) each party to each of the Documents (other than ACRI,
AMCUSA, the Affiliated Originators (other than ABC) and AMHC, as
applicable) has the corporate power to enter into and perform all of
its obligations thereunder;
(2) the due authorization, execution and delivery of the
Documents by all parties thereto (other than ACRI, AMCUSA, the
Affiliated Originators (other than ABC) and AMHC, as applicable) and
the validity and binding effect on all parties (other than ACRI,
AMCUSA, the Affiliated Originators (other than ABC) and AMHC of each of
the Documents, as applicable);
(3) the genuineness of all signatures;
(4) the authenticity of all documents submitted to us as
originals and the conformity to originals of all documents submitted to
us as copies;
(5) the Advanta Mortgage Loan Trust 1999-3 created under the
Pooling and Servicing Agreement (the "Trust") will qualify as a real
estate mortgage investment
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conduit ("REMIC") as defined in Section 860D of the Internal Revenue
Code of 1986, as amended (the "Code");
(6) the Class A Certificates and the Class B Certificates will
each constitute "regular interests" and the Class R-I Certificates and
Class R-II Certificates will each constitute the "residual interest" in
a REMIC, as such terms are defined in Section 860G(a) of the Code;
(7) as to paragraph 21 below, we assume that the parties to
the Documents have and will perform their respective obligations
thereunder, including the delivery to the Trustee of Notes relating to
the Mortgage Loans following payment of legal and sufficient
consideration therefor, without any such Note having been discharged,
or the related Mortgage satisfied or released and without the Trustee
having actual or constructive notice of the existence of any claim,
lien, charge, mortgage, security interest, encumbrance or right of
ACRI, any Affiliated Originator or creditors of ACRI or others. Further
we have assumed the absence of any defense against enforcement of, or
right of offset against, each such Note and the related Mortgage. We
have undertaken no independent review of the Mortgage Loans, including
the Notes and the Mortgages and have relied solely upon the
representations of ACRI and of the Affiliated Originators in the
Transfer Agreement and the Pooling and Servicing Agreement that they
have title to the Mortgage Loans; and
(8) in the case of each purchaser of a Class A Certificate
investing assets of an employee benefit plan covered by ERISA, such
plan is a plan to which Prohibited Transaction Exemption 91-14 is fully
available.
We have assumed that the Mortgages and rights to receive
payment under the Mortgage Loans are not subject to any right, lien or interest
of any government or any agency or instrumentality thereof (including without
limitation any federal or state tax lien, or lien arising under Title IV of
ERISA) and that they are not subject to any lien arising by operation of law or
any judicial lien.
The opinions expressed in paragraphs 4, 6 and 9 with respect
to the enforceability of certain agreements are subject to the following
additional qualifications:
(b) The effect of bankruptcy, insolvency, reorganization,
moratorium, receivership, or other similar laws of general
applicability relating to or affecting creditors' rights generally or
the rights of creditors of national banking associations in the event
of bankruptcy, insolvency, reorganization, moratorium or receivership.
(c) The application of general principles of equity,
including, but not limited to, the right of specific performance
(regardless of whether enforceability is considered in a proceeding in
equity or at law).
In addition, we wish to advise you that the enforceability of
certain provisions set forth in the Underwriting Agreement, the Insurance
Agreement and the Indemnity Agreement
<PAGE> 5
which purport to provide for indemnification for losses due to securities laws
violations may be limited by public policy considerations.
We are admitted to the Bars of the States of New York and
California, and we express no opinion as to the laws of any other jurisdiction
except as to matters that are governed by federal law, corporate and other
applicable laws of the States of Delaware, Nevada and Pennsylvania. With respect
to the corporate laws of the States of Delaware, Nevada and Pennsylvania, the
opinions expressed below are based solely on our review of statutes as in effect
in those States and judicial decisions with respect thereto. All opinions
expressed herein are based on laws, regulations and policy guidelines currently
in force and may be affected by future regulations. Furthermore, no opinion is
expressed herein regarding the applicable state Blue Sky, legal investment or
real estate syndication laws.
Based upon the foregoing and subject to the last paragraph
hereof, we are of the opinion that:
1. ACRI has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Nevada, and
is qualified to do business in each state necessary to enable it to
perform its obligations under the Documents. ACRI has the requisite
power and authority to execute and deliver, engage in the transactions
contemplated by, and perform and observe the conditions of the
Documents.
2. AMCUSA has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware,
and is qualified to do business in each state necessary to enable it to
perform its obligations under the Transfer Agreement, the Insurance
Agreement and the Pooling and Servicing Agreement. AMCUSA has the
requisite power and authority to execute and deliver, engage in the
transactions contemplated by, and perform and observe the conditions of
the Transfer Agreement, the Insurance Agreement and the Pooling and
Servicing Agreement.
3. Each Affiliated Originator (other than ABC) has been duly
organized and is validly existing and in good standing under the laws
of its jurisdiction of incorporation and is qualified to do business in
each state necessary to enable it to perform its obligations under the
Transfer Agreement. Each Affiliated Originator (other than ABC) has the
requisite power and authority to execute and deliver, engage in the
transactions contemplated by, and perform and observe the conditions of
the Transfer Agreement.
4. Each of the Documents has been duly and validly authorized,
executed and delivered by ACRI, all requisite corporate action having
been taken with respect thereto. Each of the Documents constitutes the
valid, legal and binding agreement of ACRI, and is enforceable against
ACRI in accordance with its terms.
5. Each of the Pooling and Servicing Agreement, the Insurance
Agreement and the Transfer Agreement has been duly and validly
authorized, executed and delivered by AMCUSA, and in the case of the
Transfer Agreement, by the Affiliated Originators (other than ABC), all
requisite corporate action having been taken with respect thereto.
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6. Each of the Pooling and Servicing Agreement, the Insurance
Agreement and the Transfer Agreement constitutes the valid, legal and
binding agreement of AMCUSA, and in the case of the Transfer Agreement,
of the Affiliated Originators (other than ABC), and each is enforceable
against AMCUSA and in the case of the Transfer Agreement, of the
Affiliated Originators (other than ABC), in accordance with its terms.
7. AMHC has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware,
and is qualified to do business in each state necessary to enable it to
perform its obligations under the AMHC Guaranties. AMHC has the
requisite power and authority to execute and deliver, engage in the
transactions contemplated by, and perform and observe the conditions
of, the AMHC Guaranties.
8. The AMHC Guaranties have been duly and validly authorized,
executed and delivered by AMHC, all requisite corporate action having
been taken with respect thereto.
9. Each of the AMHC Guaranties each constitutes the valid,
legal and binding agreement of AMHC, and each is enforceable against
AMHC in accordance with its terms.
10. The Pooling and Servicing Agreement, assuming the due
execution and delivery thereof by the Trustee, creates a valid, express
trust under the laws of the State of New York. Each Certificate,
assuming the due execution by the Trustee and due authentication by the
Trustee and payment therefor, is validly issued and outstanding and is
entitled to the benefits of the Pooling and Servicing Agreement.
11. No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority
or court is required under federal laws or the laws of the States of
New York, Nevada, Delaware, Pennsylvania and California for the
execution, delivery and performance of any of the Pooling and Servicing
Agreement, the Insurance Agreement or the Transfer Agreement or the
consummation of any other transaction contemplated thereby by AMCUSA
or, in the case of the Transfer Agreement, the Affiliated Originators
(other than ABC), except such which have been obtained.
12. No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority
or court is required under federal laws or the laws of the States of
New York, Nevada, Delaware and California for the execution, delivery
and performance of the Documents or the offer, issuance, sale or
delivery of the Class A Certificates or the consummation of any other
transaction contemplated thereby by ACRI, except such which have been
obtained.
13. No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority
or court is required under federal laws or the laws of the States of
New York, Delaware and California, for the execution, delivery and
performance of the AMHC Guaranties, except such which have been
obtained.
<PAGE> 7
14. To our knowledge, following due inquiry made of the
appropriate officers of ACRI, AMCUSA and the Affiliated Originators
(other than ABC), there are no actions, proceedings or investigations
pending or, to our knowledge, threatened against ACRI, AMCUSA or the
Affiliated Originators (other than ABC) before any court, governmental
agency or body or other tribunal (a) asserting the invalidity of the
Documents or the Certificates, (b) seeking to prevent the issuance of
the Certificates or the consummation of any of the transactions
contemplated by the Documents, (c) which would materially and adversely
affect the performance by ACRI, AMCUSA or the Affiliated Originators
(other than ABC), as applicable, of obligations under, or the validity
or enforceability of, the Documents or the Certificates, or (d) that
would adversely affect the status of the Trust as a "real estate
mortgage investment conduit" ("REMIC"), as such term is defined in the
Internal Revenue Code of 1986, as amended.
15. None of the transfer of the Mortgage Loans to the Trust,
the issuance or sale of the Certificates, or the execution, delivery or
performance by the Affiliated Originators (other than ABC) of the
Transfer Agreement, or AMCUSA of the Pooling and Servicing Agreement,
the Insurance Agreement and the Transfer Agreement (a) conflicts or
will conflict with or results or will result in a breach of, or
constitutes or will constitute a default under (i) any term or
provision of the certificate of incorporation or bylaws of AMCUSA or
the Affiliated Originators (other than ABC), as applicable; (ii) any
term or provision of any material agreement, contract, instrument or
indenture, to which AMCUSA or the Affiliated Originators (other than
ABC), as applicable, is a party or is bound which has been identified
to us by the appropriate officers of AMCUSA; (iii) any order, judgment,
writ, injunction or decree of any court or governmental agency or body
or other tribunal having jurisdiction over AMCUSA or the Affiliated
Originators (other than ABC), as applicable, which has been identified
to us by the appropriate officers of AMCUSA; or (iv) any law, rule or
regulation of the States of New York, Nevada, Pennsylvania, Delaware or
the federal government (including, without limitation, any bulk sales
law), or (b) results in, or will result in, the creation or imposition
of any lien, charge or encumbrance upon the Trust Estate created under
the Pooling and Servicing Agreement or upon the Certificates, except as
otherwise contemplated by the Pooling and Servicing Agreement.
16. None of the transfer of the Mortgage Loans to the Trust,
the issuance or sale of the Certificates, or the execution, delivery or
performance by ACRI of the Documents (a) conflicts or will conflict
with or results or will result in a breach of, or constitutes or will
constitute a default under (i) any term or provision of the certificate
of incorporation or bylaws of ACRI; (ii) any term or provision of any
material agreement, contract, instrument or indenture, to which ACRI is
a party or is bound, which has been identified to us by an officer or
representative of ACRI; (iii) any order, judgment, writ, injunction or
decree of any court or governmental agency or body or other tribunal
having jurisdiction over ACRI, which has been identified to us by an
officer or representative of ACRI; or (iv) any law, rule or regulation
of the States of New York or Nevada or the federal government, or (b)
results or will result in the creation or imposition of any lien,
charge or encumbrance upon the Trust Estate or upon the Certificates,
except as otherwise contemplated by the Pooling and Servicing
Agreement.
<PAGE> 8
17. The execution, delivery or performance by AMHC of the AMHC
Guaranties does not conflict with or will not conflict with and does
not result or will not result in a breach of, and does not constitute
or will not constitute a default under, (i) any term or provision of
the certificate of incorporation or bylaws of AMHC; (ii) any term or
provision of any material agreement, contract, instrument or indenture,
to which AMHC is a party or is bound, which have been identified to us
by appropriate officers of AMHC; (iii) any order, judgment, writ,
injunction or decree of any court or governmental authority having
jurisdiction over AMHC, which have been identified to us by appropriate
officers of AMHC; or (iv) any law, rule or regulation of the States of
New York, Delaware and California or the federal government.
18. To the best of our knowledge, following due inquiry made
of the appropriate officers of AMHC, there are no actions, proceedings
or investigation pending or to our knowledge threatened against AMHC
before any court, administrative agency or other tribunal (a) asserting
the invalidity of the AMHC Guaranties, (b) seeking to prevent the
consummation of any of the transactions contemplated by the AMHC
Guaranties, or (c) which would materially and adversely affect the
performance by AMHC of obligations of the AMHC Guaranties.
19. The Registration Statement, the Prospectus, the
Preliminary Prospectus Supplement and the Prospectus Supplement (other
than the financial and statistical data included therein, as to which
we are not called upon to express any opinion), at the time the
Registration Statement became effective and as of the date hereof
comply as to form in all material respects with the requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and the rules and
regulations thereunder, and the Exchange Act and the rules and
regulations thereunder, and we do not know of any amendment to the
Registration Statement required to be filed, or of any contracts,
indentures or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be described in
the Registration Statement, the Prospectus, the Preliminary Prospectus
Supplement or the Prospectus Supplement, which has not been filed or
described as required.
20. Neither the qualification of the Pooling and Servicing
Agreement under the Trust Indenture Act of 1939, as amended, nor the
registration of the Trust created by the Pooling and Servicing
Agreement under the Investment Company Act of 1940, as amended, is
required.
21. Immediately upon the receipt by the Trust, and the receipt
by ACRI and, as applicable, by each Affiliated Originator of legal and
sufficient consideration therefor, the Trust shall, pursuant to the
laws of the State of New York, be vested with good and indefeasible
title to, and shall be the sole owner of, and shall obtain all right,
title and interest of ACRI and of the Affiliated Originators in and to,
the Mortgage Loans, free and clear of any claim, lien, charge,
mortgage, security interest, encumbrance or rights of ACRI or of the
Affiliated Originators or creditors of ACRI or of the Affiliated
Originators, see Federal Deposit Ins. Corp. v. Forte, 463 N.Y.S.2d 844,
849 (A.D.2d Dep't 1983), except that until such time as assignments of
mortgage are recorded in the
<PAGE> 9
name of the Trustee in the appropriate jurisdictions (x) the Trustee
may not, in certain jurisdictions, be independently able to enforce the
Mortgage against the related Mortgaged Property or the related
Mortgagor, (y) the related Affiliated Originators could record an
assignment of a Mortgage in the name of a third party or record a
discharge and satisfaction of a Mortgage and (z) any notices which may
be given to the record holder of a Mortgage would be given to the
related Affiliated Originators.
22. The statements in the Preliminary Prospectus Supplement
and the Prospectus Supplement set forth under the captions "Description
of the Certificates" and "The Pooling and Servicing Agreement", to the
extent such statements purport to summarize certain provisions of the
Certificates or of the Pooling and Servicing Agreement, are fair and
accurate in all material respects.
23. The statements in the Prospectus set forth under the
captions "ERISA Considerations", "Material Federal Income Tax
Consequences" and "Legal Aspects of Mortgage Loans" and the statements
in the Preliminary Prospectus Supplement and the Prospectus Supplement
set forth under the captions "ERISA Considerations", "State Taxes" and
"Material Federal Income Tax Consequences", to the extent that they
constitute matters of federal, New York or California law, or federal,
New York or California legal conclusions, provide a fair and accurate
summary of such law or conclusions.
24. To the best of our knowledge, the Registration Statement
has become effective and the Commission has not issued any stop order
suspending the effectiveness of the Registration Statement or any order
directed to any prospectus or prospectus supplement relating to the
Class A Certificates (including the Prospectus, the Preliminary
Prospectus Supplement and the Prospectus Supplement), and has not
initiated or threatened any proceeding for that purpose.
25. The provision in the Pooling and Servicing Agreement which
provides for the laws of New York to be the governing law would be
upheld by a court applying New York or California law, or, if not
upheld, then such court applying New York or California law would hold
that California law is the governing law for the Pooling and Servicing
Agreement.
Assuming that the Trust's acquisition of any Subsequent
Mortgage Loan is effected in accordance with the provisions of the Pooling and
Servicing Agreement, our opinions set forth above refer to such Subsequent
Mortgage Loans as well as the Initial Mortgage Loans held by the Trust.
We have rendered legal advice and assistance to ACRI and
AMCUSA in the course of their investigation pertaining to, and their
participation in the preparation of, the Registration Statement, the Prospectus
the Preliminary Prospectus Supplement, the Prospectus Supplement, and other
matters relating to the sale of the Certificates. Rendering such assistance
involved, among other things, discussions and inquiries concerning various legal
and related subjects and reviews of certain records, documents, opinions and
certificates in accordance with instructions of ACRI and AMCUSA. We also
participated with the ACRI and AMCUSA in
<PAGE> 10
conferences with representatives of the Underwriters and its counsel during
which the contents of the Registration Statement, the Prospectus, the
Preliminary Prospectus Supplement, the Prospectus Supplement and related matters
were discussed. Although we are not passing upon, and do not assume
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Prospectus, the Preliminary
Prospectus Supplement and the Prospectus Supplement, in the course of our
examination of the Registration Statement, the Prospectus, the Preliminary
Prospectus Supplement, the Prospectus Supplement and certain other documents and
our participation in the discussions hereinabove mentioned, no facts have come
to our attention which lead us to believe that the Registration Statement, the
Prospectus, the Preliminary Prospectus Supplement and the Prospectus Supplement
(other than the financial statements and other financial and statistical data
contained therein, as to which we are not called upon to express any belief), at
the time the Registration Statement became effective, contained any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein not misleading, or that the Prospectus, the
Preliminary Prospectus Supplement and the Prospectus Supplement (other than the
financial statements and other financial and statistical data contained therein,
as to which we are not called upon to express any belief) as of its date and on
the date hereof contain any untrue statement of a material fact, or omits to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Very truly yours,
<PAGE> 11
SCHEDULE I
Advanta Conduit Receivables, Inc. Ambac Assurance Corporation
10790 Rancho Bernardo Road One State Street Plaza
San Diego, California 92127 New York, New York 10004
Advanta Mortgage Corp. USA Bankers Trust Company of
10790 Rancho Bernardo Road California, N.A., as Trustee
San Diego, California 92127 Three Park Plaza
16th Floor
Bear, Stearns & Co. Inc. Irvine, California 92614
as Representative of the Underwriters
245 Park Avenue Moody's Investors Service, Inc.
New York, New York 10167 99 Church Street
New York, New York 10007
Arthur Andersen LLP
1601 Market Street Standard & Poor's Ratings Services
Philadelphia, Pennsylvania 19103 55 Water Street
New York, New York 10041
<PAGE> 1
Exhibit 8.1
<PAGE> 2
August 24, 1999
To the Addressees Listed
on Schedule I Hereto
Re: Advanta Mortgage Loan Trust 1999-3
Mortgage Loan Asset-Backed Certificates,
Series 1999-3
--------------------------------------------
Ladies and Gentlemen:
We have acted as special tax counsel in connection with the issuance
and delivery of certain mortgage loan asset-backed certificates denominated
Advanta Mortgage Loan Trust 1999-3, Mortgage Loan Asset-Backed Certificates,
Series 1999-3 (collectively, the "Certificates"), pursuant to a Pooling and
Servicing Agreement dated as of August 1, 1999 (the "Pooling and Servicing
Agreement") among Advanta Conduit Receivables, Inc., as sponsor ("ACRI"),
Advanta Mortgage Corp. USA, as master servicer (the "Master Servicer") and
Bankers Trust Company of California, N.A., as trustee (the "Trustee").
As special tax counsel, we have examined such documents as we deemed
appropriate for the purposes of rendering the opinions set forth below,
including the following: (a) Prospectus dated August 10, 1999 (the
"Prospectus"), a Preliminary Prospectus Supplement dated August 13, 1999 (the
"Preliminary Prospectus Supplement") and a Prospectus Supplement dated August
17, 1999 (the "Prospectus Supplement") with respect to the Class A Certificates,
and (b) an executed copy of the Pooling and Servicing Agreement and the exhibits
attached thereto.
Terms capitalized herein and not otherwise defined herein shall have
their respective meanings as set forth in the Pooling and Servicing Agreement.
Based upon the foregoing and upon the assumptions set forth below, we
are of the opinion, under the laws of the United States, New York State, New
York City and California in effect as of the date hereof, that:
1. Assuming that (a) each of the Lower-Tier REMIC and the
Upper-Tier REMIC created under the Pooling and Servicing Agreement
elects, as it has covenanted to do in the Pooling and Servicing
Agreement, to be treated as a "real estate mortgage investment conduit"
("REMIC"), as such term is defined in the Internal Revenue Code of
1986, as amended (the "Code") and (b) the parties to the Pooling and
Servicing Agreement comply with the terms thereof, each of the
Lower-Tier REMIC and the Upper-Tier REMIC will be treated as REMICs.
Subject to the above, (i) the Lower-Tier REMIC Regular Interests, each
Class of Class A Certificates and the Class B Certificates issued
pursuant to the Pooling and Servicing Agreement will be treated as one
or more "regular interests" in the related REMIC and (ii) the Class R-I
Certificates and Class R-II Certificates will be treated as the sole
"residual interest" in the related REMIC.
2. The statements under the caption "Material Federal Income
Tax Consequences" in the Prospectus, and "Material Federal Income Tax
Consequences" and
<PAGE> 3
"State Taxes" in the Preliminary Prospectus Supplement and the
Prospectus Supplement are accurate and complete in all material
respects.
3. As a consequence of the qualification of the Lower-Tier
REMIC and the Upper-Tier REMIC each as a REMIC, the Class A
Certificates and the Class B Certificates will be treated as "regular .
. . interest(s) in a REMIC" under Section 7701(a)(19)(C) of the Code
and "real estate assets" under Section 856(c) of the Code in the same
proportion that the assets in the Trust consist of qualifying assets
under such Sections. In addition, as a consequence of the qualification
of the Lower-Tier REMIC and the Upper-Tier REMIC each as a REMIC,
interest on the Class A Certificates and the Class B Certificates will
be treated as "interest on obligations secured by mortgages on real
property" under Section 856(c) of the Code to the extent that such
Class A Certificates and the Class B Certificates are treated as "real
estate assets" under Section 856(c) of the Code.
4. The Trust will not be subject to tax upon its income or
assets by the taxing authority of New York State or New York City.
5. The Trust will not be subject to the California state
income tax. While REMICS are subject to the California state minimum
franchise tax imposed under Article 2, Section 23153 of the California
Revenue and Taxation Code, no opinion is expressed as to whether the
Trust is subject to such tax.
6. Neither the Trust nor any portion thereof, including,
without limitation, the Supplemental Interest Account, will be treated
as an association taxable as a corporation for federal income tax
purposes.
7. The acquisition, in the manner contemplated by the Pooling
and Servicing Agreement, by the Trust from time to time during the
Pre-Funding Period of the Subsequent Mortgage Loans will not cause
either the Lower-Tier REMIC or the Upper-Tier REMIC to fail to qualify
as a REMIC, nor will any such acquisition result in either the
Lower-Tier REMIC or the Upper-Tier REMIC engaging in a "prohibited
transaction" under Section 860F(a) of the code.
Very truly yours,
<PAGE> 4
SCHEDULE I
Advanta Mortgage Corp. USA Ambac Assurance Corporation
10790 Rancho Bernardo Road One State Street Plaza
San Diego, California 92127 New York, New York 10004
Bear, Stearns & Co. Inc. Bankers Trust Company of
as Representative of the Underwriters California, N.A., as Trustee
245 Park Avenue Three Park Plaza
New York, New York 10167 16th Floor
Irvine, California 92714
Advanta Mortgage Loan Trust 1999-3
c/o Bankers Trust Company Moody's Investors Service, Inc.
of California, N.A. 99 Church Street
Three Park Plaza, 16th Floor New York, New York 10007
Irvine, California 92614
Standard & Poor's Rating Services
55 Water Street
New York, New York 10041
