<PAGE> 1
WFS FINANCIAL 2000-C OWNER TRUST
WFS FINANCIAL INC
SERVICER
TERM SHEET DATED AUGUST 2, 2000
SUBJECT TO REVISION
THE PARTIES:
The Issuer................. WFS Financial 2000-C Owner Trust, or the trust
Seller..................... WFS Receivables Corporation 2, or WFSRC2
Master Servicer............ WFS Financial Inc, or WFS
The Insurer................ Financial Security Assurance, Inc., or Financial
Security
Indenture Trustee.......... Bankers Trust Company
Owner Trustee.............. Chase Manhattan Bank USA, N.A.
IMPORTANT DATES:
Statistical Calculation
Date....................... July 31, 2000, the date used in preparing the
statistical information in this term sheet.
Cut-Off Date............... August 1, 2000
Closing Date............... Expected to be August 16, 2000
Distribution Dates......... Payments of interest and principal will be made on
the notes on each February 20, May 20, August 20
and November 20, commencing on November 20, 2000.
If any of those days is not a business day, payment
will be made on the next succeeding business day.
Principal will be paid in order to the earliest
maturing class until that class is paid in full.
Final Scheduled
Distribution Dates......... If not paid earlier, the outstanding principal
balance of the Class A-1 Notes will be paid on
August 20, 2001, of the Class A-2 Notes will be
paid on August 20, 2003, of the Class A-3 Notes
will be paid on February 20, 2005, and of the Class
A-4 Notes will be paid on February 20, 2008. If any
of those days is not a business day, payment will
be made on the next succeeding business day.
THE SECURITIES:
The Notes.................. The WFS Financial 2000-C Owner Trust Auto
Receivable Backed Notes will represent obligations
of the trust secured by the assets of the trust.
The notes will be issued in four classes and will
bear fixed interest at the rates and calculated in
the manner described below under the caption "The
Terms of the Notes".
The Certificates........... The trust will issue to the seller WFS Financial
2000-C Owner Trust Auto Receivable Backed
Certificates, which are not being offered by this
term sheet. All payments in respect of the
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<PAGE> 2
certificates issued by the trust will be
subordinated to payments on the notes.
THE TERMS OF THE NOTES
<TABLE>
<CAPTION>
INTEREST INTEREST
NOTE PRINCIPAL RATE PER ACCRUAL FINAL SCHEDULED
CLASS AMOUNT ANNUM METHOD DISTRIBUTION DATE
----- ------------ -------- ---------- -----------------
<S> <C> <C> <C> <C>
A-1 $247,000,000 % actual/360 August 20, 2001
A-2 $332,000,000 % 30/360 August 20, 2003
A-3 $481,000,000 % 30/360 February 20, 2005
A-4 $330,000,000 % 30/360 February 20, 2008
</TABLE>
It is a condition to the offering of the notes that the Class A-1 Notes be
rated P-1/A-1+ and that the Class A-2, A-3 and A-4 Notes be rated Aaa/AAA.
These ratings are being applied for from Moody's Investors Services, Inc. and
Standard & Poor's Rating Services, a division of The McGraw-Hill Companies,
Inc. Moody's and Standard & Poor's are the rating agencies. However, a rating
agency in its discretion may lower or withdraw its rating in the future.
INTEREST CALCULATION
Interest on each class of the notes will accrue at the interest rate
applicable to that class from each distribution date to the day preceding the
next distribution date, or from the closing date with respect to the first
distribution date.
Interest on the Class A-1 Notes will be calculated on a daily basis, based
upon the actual number of days elapsed and a 360-day year.
Interest on the Class A-2, Class A-3 and Class A-4 Notes will be calculated
on the basis of a 360-day year consisting of twelve 30-day months.
PRIORITY OF PRINCIPAL PAYMENTS
Principal of the notes will be paid on each distribution date in the
following order:
- to the Class A-1 Notes until the Class A-1 Notes are paid in
full;
- to the Class A-2 Notes until the Class A-2 Notes are paid in
full;
- to the Class A-3 Notes until the Class A-3 Notes are paid in
full; and
- to the Class A-4 Notes until the Class A-4 Notes are paid in
full.
THE TRUST PROPERTY:
General.................... The trust property will include:
- a pool of retail installment sales contracts and
a limited number of installment loans originated
by WFS, all of which are secured by new or used
automobiles or light duty trucks;
- the funds in the spread account; and
- an insurance policy written by Financial Security
guaranteeing all payments of principal and
interest to be made to holders of the notes.
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<PAGE> 3
THE CONTRACTS
On or before the closing date, WFS will sell and assign the contracts, each
of which is an installment sales contract or installment loan secured by a
financed vehicle which is a new or used automobile or light duty truck, to
WFSRC2. On the closing date, WFSRC2 will transfer and assign the contracts to
the trust. The trust will be established by the transfer and assignment of
contracts by WFSRC2 to the trust on the closing date.
- The trust receives the right to payments due under the contracts on and
after the cut-off date of August 1, 2000.
- The contracts are secured by first liens on the vehicles purchased under
each contract.
- The contracts will have an expected weighted average annual percentage
rate of approximately 15.04% and an expected weighted average remaining
maturity of approximately 60.8 months.
- Approximately 6.76% of the aggregate principal amount of the contracts
will be Rule of 78's contracts and approximately 93.24% will be simple
interest contracts.
THE SPREAD ACCOUNT
The spread account is a segregated trust account in the name of the
indenture trustee that will afford you some limited protection against losses on
the contracts. The spread account will be part of the trust. It will be created
with either an initial cash deposit in the amount of $41,700,000.00, or the
delivery of a letter of credit in favor of the trust acceptable to Financial
Security. On any distribution date, the funds that are available from the spread
account will be distributed to you to cover any shortfalls in interest and
principal required to be paid on the notes. The funds in the spread account will
be supplemented on each distribution date by any funds in the collection account
remaining after making all of the payments necessary on that distribution date.
The funds in the spread account will be supplemented until they are at least
equal to 6.0% or 9.0% of the sum of the remaining principal balance of the
simple interest contracts and the present value of the remaining scheduled
payments of the monthly principal and interest due on the Rule of 78's
contracts. The rate to be applied will depend upon loss and delinquency
triggers.
If on the last day of any month or on any distribution date the amount on
deposit in the spread account is greater than the amount required to be in that
account on that date, the excess cash will be distributed in the following
order:
- to Financial Security, to the extent of any unreimbursed amounts due to
it,
- to the party making the initial deposit until it has received an amount
equal to the spread account initial deposit,
- to the master servicer until the additional servicing fee due the master
servicer, has been paid in full, and then
- to the Seller or any other holder of the certificates.
You will have no further rights to any excess cash paid to any of these
entities.
THE NOTE POLICY
On the closing date, Financial Security will issue a financial guaranty
insurance policy, known as the note policy, for the indirect benefit of the
holders of the notes. Under the note policy, Financial Security will
unconditionally and irrevocably guarantee to the indenture trustee the payments
of interest and principal due on the notes during the term of the note policy.
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<PAGE> 4
If, based upon a report due to the indenture trustee five days prior to a
distribution date, it appears that insufficient funds will be available to pay
to the holders of the notes on that distribution date the full amount of the
payment which will then be due to them, that shortfall will be paid first by
drawing upon funds in the spread account and then by a claim upon the note
policy. To the extent any claim is made upon the note policy, it is anticipated
that the amount of that claim will be distributed on that distribution date.
THE CONTRACTS POOL:
Each contract is a retail installment sales contract secured by a financed
vehicle originated by a new or used car dealer located in California or one of
the other states listed in the table on page 6 or an installment loan secured by
a financed vehicle. Most of the contracts were purchased by WFS from dealers;
however, contracts representing no more than 4% of the cut-off date aggregate
scheduled balance are installment loans originated by WFS directly to consumers
or by other independent auto finance companies which loans were then sold to
WFS. Except as otherwise noted, all references in this prospectus supplement to
contracts include installment loans.
WFS will select the contracts from its portfolio of fixed-interest rate
contracts. The contracts transferred to the trust were underwritten and
purchased or originated by WFS in the ordinary course of its business
operations. The information concerning the contracts presented in this term
sheet is as of July 31, 2000. While the characteristics of the contracts
transferred to the trust at the closing date may differ somewhat from the
information disclosed in this table, we anticipate that the variations will not
be significant.
<TABLE>
<CAPTION>
CONTRACTS
IN THE TRUST
-----------------
<S> <C> <C>
Outstanding Principal Balance............................... $1,390,000,391.52
Minimum................................................... $ 506.51
Maximum................................................... $ 82,954.24
Average................................................... $ 14,277.65
Number of Contracts......................................... 97,355
Financed Vehicles
Percentage of New Vehicles................................ 24.50%
Percentage of Used Vehicles............................... 75.50%
Percentage of Automobiles................................. 48.03%
Percentage of Light Duty Trucks........................... 51.97%
Percentage of Rule of 78's Contracts........................ 6.76%
Percentage of Simple Interest Contracts..................... 93.24%
Annual Percentage Rate
Minimum................................................... 5.90%
Maximum................................................... 30.00%
Weighted Average.......................................... 15.04%
Remaining Maturities
Minimum................................................... 3 Month
Maximum................................................... 84 Month
Weighted Average.......................................... 60.8 Month
Original Maturities
Minimum................................................... 12 Month
Maximum................................................... 84 Month
Weighted Average.......................................... 63.4 Month
Percent over 60 Months.................................... 46.49%
</TABLE>
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<PAGE> 5
Each of the contracts is fully amortizing and provides for level payments
over its term, with the portions of principal and interest of each such level
payment being determined on the basis of the Rule of 78's or the simple interest
method. The amortization of the Rule of 78's contracts will result in the
outstanding principal balance on each of those contracts being in excess of the
scheduled balance of that contract. For purposes of the trust, all Rule of 78's
contracts are amortized on an actuarial basis to prevent shortfalls of principal
payments on the notes. As amortization on an actuarial basis produces a faster
amortization than does application of the Rule of 78's, there will not be a
shortfall of principal in any event, including as a result of prepayments or
timely payment to maturity of a Rule of 78's contract.
The following table provides information about the contracts relating to
their annual percentage rate. While the characteristics of the contracts
transferred to the trust at the closing date may differ somewhat from the
information disclosed in this table, we anticipate that the variations will not
be significant. The percentages may not add to 100.00% due to rounding.
DISTRIBUTION OF CONTRACTS BY APR
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
CONTRACT APR CONTRACTS BALANCE BALANCE
------------ --------- ---------------- -------------
<S> <C> <C> <C>
5.000% - 5.999%.................................... 1 21,332.40 0.00%
6.000% - 6.999%.................................... 21 313,384.30 0.02%
7.000% - 7.999%.................................... 268 4,365,355.81 0.31%
8.000% - 8.999%.................................... 2,159 35,223,517.10 2.53%
9.000% - 9.999%.................................... 4,871 78,226,767.52 5.63%
10.000% - 10.999%.................................. 6,150 97,574,438.13 7.02%
11.000% - 11.999%.................................. 6,511 107,405,536.99 7.73%
12.000% - 12.999%.................................. 8,821 143,308,521.96 10.31%
13.000% - 13.999%.................................. 8,013 128,940,130.53 9.28%
14.000% - 14.999%.................................. 8,778 135,624,528.97 9.76%
15.000% - 15.999%.................................. 8,802 131,076,629.24 9.43%
16.000% - 16.999%.................................. 8,063 117,821,574.43 8.48%
17.000% - 17.999%.................................. 7,368 101,044,384.80 7.27%
18.000% - 18.999%.................................. 7,339 96,186,511.26 6.92%
19.000% - 19.999%.................................. 5,040 62,754,664.98 4.51%
20.000% - 20.999%.................................. 7,134 76,687,027.90 5.52%
21.000% - 21.999%.................................. 4,248 39,520,224.87 2.84%
22.000% - 22.999%.................................. 1,082 11,421,579.91 0.82%
23.000% - 23.999%.................................. 698 7,042,981.40 0.51%
24.000% - 24.999%.................................. 1,001 8,653,583.72 0.62%
25.000% - 25.999%.................................. 407 3,177,671.86 0.23%
26.000% - 26.999%.................................. 128 988,919.73 0.07%
27.000% - 27.999%.................................. 60 465,148.38 0.03%
28.000% - 28.999%.................................. 28 183,684.82 0.01%
29.000% - 29.999%.................................. 359 1,940,346.52 0.14%
30.000% - 30.999%.................................. 5 31,943.99 0.00%
--------- ---------------- ------
Total:................................... 97,355 1,390,000,391.52 100.00%
</TABLE>
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<PAGE> 6
The following table provides information based upon the state in which the
new or used car dealer which originated a contract is located, or in the case of
an installment loan, the state in which the office of the lender which
originated the loan is located. While the characteristics of the contracts
transferred to the trust at the closing date may differ somewhat from the
information disclosed in this table, we anticipate that the variations will not
be significant. The percentages may not add to 100.00% due to rounding.
GEOGRAPHIC CONCENTRATION OF THE CONTRACTS
<TABLE>
<CAPTION>
AGGREGATE PERCENTAGE OF
NUMBER OF PRINCIPAL AGGREGATE PRINCIPAL
STATE CONTRACTS BALANCE BALANCES
----- --------- ---------------- -------------------
<S> <C> <C> <C>
California................... 40,130 545,837,434.21 39.27%
Arizona...................... 6,154 87,371,063.30 6.29%
Washington................... 4,906 62,559,857.81 4.50%
Florida...................... 3,619 60,111,139.71 4.32%
Ohio......................... 3,967 54,994,518.63 3.96%
Texas........................ 3,521 52,014,195.98 3.74%
Oregon....................... 3,943 49,178,424.71 3.54%
Colorado..................... 3,202 47,096,941.04 3.39%
Nevada....................... 2,254 35,640,741.81 2.56%
North Carolina............... 2,140 35,359,326.13 2.54%
Virginia..................... 1,864 32,270,166.95 2.32%
South Carolina............... 2,047 31,641,818.54 2.28%
Tennessee.................... 1,436 24,631,887.15 1.77%
Illinois..................... 1,614 24,239,202.45 1.74%
Georgia...................... 1,303 23,148,132.20 1.67%
Missouri..................... 1,479 23,124,758.66 1.66%
Utah......................... 1,506 21,013,933.35 1.51%
Alabama...................... 1,076 17,719,001.90 1.27%
Idaho........................ 1,191 15,443,755.81 1.11%
Michigan..................... 1,065 15,253,399.58 1.10%
Pennsylvania................. 1,002 13,158,587.33 0.95%
Wisconsin.................... 950 12,914,736.49 0.93%
Kentucky..................... 837 12,024,474.71 0.87%
Maryland..................... 655 11,492,208.75 0.83%
New Jersey................... 677 9,834,092.04 0.71%
Indiana...................... 585 8,980,576.75 0.65%
Delaware..................... 502 7,725,089.63 0.56%
Kansas....................... 464 7,623,864.43 0.55%
Massachusetts................ 526 7,266,169.24 0.52%
West Virginia................ 328 5,596,132.98 0.40%
Mississippi.................. 335 5,579,488.47 0.40%
Oklahoma..................... 364 5,381,016.51 0.39%
Iowa......................... 286 4,583,582.03 0.33%
Connecticut.................. 337 4,566,786.45 0.33%
New Mexico................... 326 3,903,276.61 0.28%
Minnesota.................... 194 2,842,436.08 0.20%
New Hampshire................ 195 2,622,735.01 0.19%
Nebraska..................... 116 1,687,341.38 0.12%
Wyoming...................... 93 1,304,745.79 0.09%
Rhode Island................. 96 1,253,572.89 0.09%
Maine........................ 30 485,731.87 0.03%
New York..................... 36 481,729.22 0.03%
Hawaii....................... 4 42,316.94 0.00%
------ ---------------- ------
Total........................ 97,355 1,390,000,391.52 100.00%
====== ================ ======
</TABLE>
WEIGHTED AVERAGE LIVES OF THE NOTES:
Prepayments on contracts can be measured relative to a payment standard or
model. The model used in this term sheet, the Absolute Prepayment Model, or ABS,
represents an assumed rate of prepayment each month relative to the original
number of contracts in a pool of contracts. ABS
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<PAGE> 7
further assumes that all the contracts in question are the same size and
amortize at the same rate and that each contract in each month of its life will
either be paid as scheduled or be paid in full. For example, in a pool of
contracts originally containing 10,000 contracts, a 1% ABS rate means that 100
contracts prepay each month. ABS does not purport to be an historical
description of prepayment experience or a prediction of the anticipated rate of
prepayment of any pool of contracts, including the contracts transferred to the
trust.
As the rate of payment of principal of each class of notes will depend on
the rate of payment (including prepayments) of the principal balance of the
contracts, final payment of any class of notes could occur significantly earlier
than its final scheduled distribution date. Reinvestment risk associated with
early payment of the notes of any class will be borne exclusively by the holders
of those notes.
The table captioned "Percentage of Initial Note Balance at Various ABS
Percentages" is referred to as the ABS Table and has been prepared on the basis
of the characteristics of the contracts described under "The Contracts Pool".
The ABS Table assumes that:
- the contracts prepay in full at the specified constant percentage of ABS
monthly, with no defaults, losses or repurchases,
- the monthly principal and interest payment on each contract is scheduled
to be made and is made on the last day of each month and each month has
30 days,
- payments are made on the notes on each distribution date (and each such
date is assumed to be the twentieth day of each applicable month),
- WFSRC2 does not exercise its option to repurchase the contracts, and
- WFSRC2 exercises its optional purchase right on the earliest distribution
date on which that option may be exercised.
The ABS Table indicates the projected weighted average life of each class
of notes and sets forth the percentage of the initial principal amount of each
class of notes that is projected to be outstanding after each of the
distribution dates shown at various constant ABS percentages.
The ABS Table also assumes that the contracts have been aggregated into
hypothetical pools with all of the contracts within each such pool having the
following characteristics and that the level scheduled payment for each of the
pools, which is based on the Aggregate Scheduled Balance, annual
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<PAGE> 8
percentage rate, original term to maturity and remaining term to maturity as of
the assumed cut-off date will be such that each pool will be fully amortized by
the end of its remaining term to maturity.
<TABLE>
<CAPTION>
REMAINING ORIGINAL
AGGREGATE TERM TERM
PRINCIPAL TO MATURITY TO MATURITY
SUBPOOLS BALANCE APR (IN MONTHS) (IN MONTHS)
-------- ----------------- ------ ----------- -----------
<S> <C> <C> <C> <C>
1..................................... $ 9,298,902.48 18.418% 34 34
2..................................... $ 23,787,541.50 18.082% 32 34
3..................................... $ 7,417,456.99 18.053% 26 34
4..................................... $ 29,904,940.48 17.780% 47 47
5..................................... $ 71,911,288.18 17.181% 45 47
6..................................... $ 23,489,471.59 17.262% 39 47
7..................................... $ 141,610,717.39 16.084% 60 60
8..................................... $ 336,748,120.68 15.678% 58 60
9..................................... $ 99,648,110.03 15.535% 52 60
10..................................... $ 154,750,920.52 14.265% 71 71
11..................................... $ 346,667,991.45 13.845% 69 71
12..................................... $ 101,530,988.12 13.419% 61 71
13..................................... $ 9,104,888.29 12.616% 83 83
14..................................... $ 24,293,379.07 12.121% 81 83
15..................................... $ 9,835,674.75 11.726% 74 83
Total $1,390,000,391.52
-----------------
</TABLE>
The actual characteristics and performance of the contracts will differ
from the assumptions used in preparing the ABS Table. The assumptions used are
hypothetical and have been provided only to give a general sense of how the
principal cash flows might behave under varying prepayment scenarios. For
example, it is very unlikely that the contracts will prepay at a constant ABS
rate until maturity or that all of the contracts will prepay at the same ABS
rate. Moreover, the diverse terms of contracts within each of the hypothetical
pools could produce slower or faster principal distributions than indicated in
the ABS Table at the various constant percentages of ABS specified, even if the
original and remaining terms to maturity of the contracts are as assumed. Any
difference between those assumptions and the actual characteristics and
performance of the contracts, or actual prepayment experience, will affect the
percentages of initial amounts outstanding over time and the weighted average
lives of each class of notes.
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<PAGE> 9
PERCENTAGE OF INITIAL NOTE BALANCE AT VARIOUS ABS PERCENTAGES
<TABLE>
<CAPTION>
CLASS A-1 NOTES CLASS A-2 NOTES CLASS A-3 NOTES
------------------------- ------------------------- -------------------------
DISTRIBUTION DATE 0.5% 1.0% 1.8% 2.5% 0.5% 1.0% 1.8% 2.5% 0.5% 1.0% 1.8% 2.5%
----------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial...................... 100 100 100 100 100 100 100 100 100 100 100 100
11/20/00..................... 72 63 49 36 100 100 100 100 100 100 100 100
2/20/01...................... 44 27 0 0 100 100 100 81 100 100 100 100
5/20/01...................... 15 0 0 0 100 94 65 38 100 100 100 100
8/20/01...................... 0 0 0 0 90 68 31 0 100 100 100 98
11/20/01..................... 0 0 0 0 69 42 0 0 100 100 99 71
2/20/02...................... 0 0 0 0 47 17 0 0 100 100 77 45
5/20/02...................... 0 0 0 0 26 0 0 0 100 95 57 22
8/20/02...................... 0 0 0 0 4 0 0 0 100 79 38 1
11/20/02..................... 0 0 0 0 0 0 0 0 88 63 20 0
2/20/03...................... 0 0 0 0 0 0 0 0 73 47 4 0
5/20/03...................... 0 0 0 0 0 0 0 0 59 33 0 0
8/20/03...................... 0 0 0 0 0 0 0 0 45 19 0 0
11/20/03..................... 0 0 0 0 0 0 0 0 30 5 0 0
2/20/04...................... 0 0 0 0 0 0 0 0 17 0 0 0
5/20/04...................... 0 0 0 0 0 0 0 0 3 0 0 0
8/20/04...................... 0 0 0 0 0 0 0 0 0 0 0 0
11/20/04..................... 0 0 0 0 0 0 0 0 0 0 0 0
2/20/05...................... 0 0 0 0 0 0 0 0 0 0 0 0
5/20/05...................... 0 0 0 0 0 0 0 0 0 0 0 0
8/20/05...................... 0 0 0 0 0 0 0 0 0 0 0 0
11/20/05..................... 0 0 0 0 0 0 0 0 0 0 0 0
2/20/06...................... 0 0 0 0 0 0 0 0 0 0 0 0
5/20/06...................... 0 0 0 0 0 0 0 0 0 0 0 0
8/20/06...................... 0 0 0 0 0 0 0 0 0 0 0 0
11/20/06..................... 0 0 0 0 0 0 0 0 0 0 0 0
2/20/07...................... 0 0 0 0 0 0 0 0 0 0 0 0
WEIGHTED AVERAGE LIFE
(YEARS)..................... 0.59 0.49 0.38 0.35 1.60 1.31 1.00 0.81 3.05 2.61 2.00 1.60
<CAPTION>
CLASS A-4 NOTES
-------------------------
DISTRIBUTION DATE 0.5% 1.0% 1.8% 2.5%
----------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Initial...................... 100 100 100 100
11/20/00..................... 100 100 100 100
2/20/01...................... 100 100 100 100
5/20/01...................... 100 100 100 100
8/20/01...................... 100 100 100 100
11/20/01..................... 100 100 100 100
2/20/02...................... 100 100 100 100
5/20/02...................... 100 100 100 100
8/20/02...................... 100 100 100 100
11/20/02..................... 100 100 100 72
2/20/03...................... 100 100 100 47
5/20/03...................... 100 100 84 28
8/20/03...................... 100 100 64 12
11/20/03..................... 100 100 47 1
2/20/04...................... 100 90 33 0
5/20/04...................... 100 73 21 0
8/20/04...................... 86 58 12 0
11/20/04..................... 68 44 5 0
2/20/05...................... 52 32 1 0
5/20/05...................... 36 21 0 0
8/20/05...................... 24 13 0 0
11/20/05..................... 16 9 0 0
2/20/06...................... 10 5 0 0
5/20/06...................... 3 1 0 0
8/20/06...................... 1 0 0 0
11/20/06..................... 1 0 0 0
2/20/07...................... 0 0 0 0
WEIGHTED AVERAGE LIFE
(YEARS)..................... 4.75 4.38 3.43 2.66
</TABLE>
The weighted average life of a note is determined for the above table by
(x) multiplying the amount of each principal payment on a note by the number of
periods (months) from the date of issuance of the note to the related
distribution date, (y) adding the results and (z) dividing the sum by the
original principal amount of the note. This calculation assumes that WFSRC2 does
not exercise its option to repurchase the contracts but that it will exercise
its optional purchase right.
This table has been prepared based on the assumptions described on Pages 7
and 8 including the assumptions regarding the characteristics and performance of
the contracts, which will differ from their actual characteristics and
performance, and should be read in conjunction with those assumptions.
REPURCHASE OF CONTRACTS AND REDEMPTION OF SECURITIES:
OPTIONAL REPURCHASE OF CONTRACTS BY WFSRC2
WFSRC2 will have the option to repurchase all of the contracts it has
transferred to the trust on any distribution date as of which the aggregate
principal balance of the simple interest contracts plus the aggregate of the
present value of the remaining monthly principal and interest due on the Rule of
78's contracts it has transferred to the trust is equal to or less than
$278,000,000.00. If WFSRC2 exercises its option to repurchase the contracts,
WFSRC2 will pay the trust a price equal to the unpaid principal amount of all
classes of notes outstanding plus the accrued interest on each of those
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<PAGE> 10
classes of notes, which sum is the base price. WFSRC2 will also pay a repurchase
premium in an amount equal to a fraction of the base price calculated in the
manner shown in the following table:
<TABLE>
<CAPTION>
IF THE BASE PRICE IS: THE REPURCHASE PREMIUM IS:
----------------------------------------------------------- -------------------------------------
<S> <C>
$278,000,000.00 or less, but more than $208,500,000.00, 2% of the Base Price
equal to or less than $208,500,000.00, but more than
$139,000,000.00, 1% of the Base Price
equal to or less than $139,000,000.00 zero
</TABLE>
OPTIONAL PURCHASE
At any distribution date at which the aggregate principal balance of the
simple interest contracts plus the aggregate of the present value of the
remaining monthly principal and interest payments due on the Rule of 78's
contracts transferred to the trust is equal to or less than $139,000,000.00,
WFSRC2 may purchase all of the contracts then outstanding that it has
transferred to the Trust without payment of a repurchase premium.
PREPAYMENT AND REDEMPTION FOLLOWING OPTIONAL REPURCHASE OR OPTIONAL PURCHASE
If WFSRC2 exercises its option to repurchase or purchase the contracts,
- the amount received upon repurchase equal to the unpaid principal amount
of all classes of notes outstanding plus the accrued interest on each of
those classes of notes will be treated as collections and distributed to
the holders of the notes in addition to the distributions to which the
holders would then otherwise be entitled to receive,
- the amount received by the trust as the repurchase premium will be
distributed on the related distribution date, pro rata, to the holders of
the notes following all other payments made on the distribution date on
which the distribution occurs other than the amount paid equal to the
scheduled balances of the repurchased contracts, and
- the repurchased contracts will be transferred back to WFSRC2 on that
distribution date and the trust will be terminated.
MANDATORY REDEMPTION
The notes may be accelerated if an event of default has occurred and is
continuing under the indenture. If an insurer default has occurred and is
continuing and an event of default has occurred and is continuing, the indenture
trustee may be permitted to accelerate the notes. If an event of default has
occurred and is continuing but no insurer default has occurred and is
continuing, Financial Security will have the right, in addition to its
obligation to make scheduled payments on the notes in accordance with the terms
of the note policy, but not the obligation, to elect to accelerate the notes. If
the notes are accelerated, the master servicer or the indenture trustee will
sell or otherwise liquidate the property of the trust and deliver the proceeds
to the indenture trustee for distribution in accordance with the terms of the
indenture.
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TAX STATUS:
In the opinion of Mitchell, Silberberg & Knupp LLP, special counsel for
federal income and California income tax purposes, as discussed in further
detail in the prospectus:
- 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.
If you purchase a note, you agree to treat it as debt for tax purposes.
ELIGIBILITY FOR PURCHASE BY MONEY MARKET FUNDS:
The Class A-1 Notes will be structured to be eligible securities for
purchase by money market funds under Rule 2a-7 under the Investment Company Act
of 1940, as amended. A money market fund should consult its legal advisers
regarding the eligibility of the Class A-1 Notes under Rule 2a-7 and whether an
investment in such notes satisfies the fund's investment policies and
objectives.
ERISA CONSIDERATIONS:
The notes are generally eligible for purchase by employee benefit plans
that are subject to the Employee Retirement Income Security Act of 1974, as
amended, or Section 4975 of the Internal Revenue Code of 1986, as amended.
However, administrators of employee benefit plans should review the matters
discussed under "ERISA Considerations" in the prospectus and also should consult
with their legal advisors before purchasing notes.
DELINQUENCY AND CONTRACT LOSS INFORMATION
The following tables set forth (i) the delinquency experience in regard to
contracts originated and serviced by WFS and its affiliates, including contracts
subsequently securitized at December 31, 1995 through 1999 and at June 30, 2000
and (ii) the loss experience for such contracts originated and serviced by WFS
and its affiliates, including contracts subsequently securitized for the years
ended December 31, 1995 through 1999 and for the six month period ending June
30, 2000. There is no assurance that the future delinquency and loss experience
of the contracts will be similar to that set forth below. WFS defines
delinquency as being past due based on the contractual due date of the
underlying contract. The dollar amounts shown in these tables are net of
interest not yet earned on Rule of 78's contracts. With respect to the Contract
Loss Experience table, it is the policy of WFS to charge-off all contracts when
they become 120 days delinquent, whether that contract is owned by
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WFS or serviced by WFS for others. WFS believes that its charge-off policy is
consistent with that customarily used in the automobile finance industry.
CONTRACT DELINQUENCY EXPERIENCE
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31,
---------------------- ------------------------------------------------------------------------
2000 1999 1998 1997
---------------------- ---------------------- ---------------------- ----------------------
NUMBER NUMBER NUMBER NUMBER
OF OF OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
--------- ---------- --------- ---------- --------- ---------- --------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Contracts serviced....... 568,900 $6,071,044 524,709 $5,354,385 464,257 $4,367,099 408,958 $3,680,817
======= ========== ======= ========== ======= ========== ======= ==========
Period of delinquency
31 - 59 days............ 10,366 $ 93,234 12,868 $ 107,416 13,885 $ 112,208 6,605 $ 54,450
60 - 89 days............ 2,898 26,094 3,511 29,738 3,966 32,100 2,161 18,652
90 days or more......... 1,230 11,411 1,711 14,872 1,768 14,441 918 7,762
------- ---------- ------- ---------- ------- ---------- ------- ----------
Total contracts and
amount
delinquent........ 14,494 $ 130,739 18,090 $ 152,026 19,619 $ 158,749 9,684 $ 80,864
======= ========== ======= ========== ======= ========== ======= ==========
Delinquencies as a
percentage of number and
amount of contracts
outstanding............. 2.55% 2.15% 3.45% 2.84% 4.23% 3.64% 2.37% 2.20%
======= ========== ======= ========== ======= ========== ======= ==========
<CAPTION>
DECEMBER 31,
-----------------------------------------------
1996 1995
---------------------- ----------------------
NUMBER NUMBER
OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT
--------- ---------- --------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Contracts serviced....... 341,486 $3,046,585 258,665 $2,209,594
======= ========== ======= ==========
Period of delinquency
31 - 59 days............ 4,511 $ 38,173 2,180 $ 18,557
60 - 89 days............ 1,305 11,470 690 6,143
90 days or more......... 567 5,144 308 2,701
------- ---------- ------- ----------
Total contracts and
amount
delinquent........ 6,383 $ 54,787 3,178 $ 27,401
======= ========== ======= ==========
Delinquencies as a
percentage of number and
amount of contracts
outstanding............. 1.87% 1.80% 1.23% 1.24%
======= ========== ======= ==========
</TABLE>
CONTRACT LOSS EXPERIENCE
<TABLE>
<CAPTION>
FOR THE
SIX
MONTHS
ENDED
JUNE 30, FOR THE YEAR ENDED DECEMBER 31,
2000 1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Contracts serviced
At end of period................................... $6,071,044 $5,354,385 $4,367,099 $3,680,817 $3,046,585 $2,209,594
========== ========== ========== ========== ========== ==========
Average during period.............................. $5,658,044 $4,839,514 $4,006,185 $3,383,570 $2,627,622 $1,886,359
========== ========== ========== ========== ========== ==========
Gross charge offs of contracts during period....... $ 72,699 $ 150,518 $ 173,422 $ 136,773 $ 86,464 $ 48,999
Recoveries of contracts charged off in current and
prior periods.................................... 25,475 47,581 36,230 34,634 25,946 18,715
---------- ---------- ---------- ---------- ---------- ----------
Net charge offs.................................... $ 47,224 $ 102,937 $ 137,192 $ 102,139 $ 60,518 $ 30,284
========== ========== ========== ========== ========== ==========
Net charge offs as a percentage of contracts
outstanding during period (annualized)........... 1.67% 2.13% 3.42% 3.02% 2.30% 1.61%
</TABLE>
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