Supplement to
Prospectus Supplement dated May 19, 2000
(To Prospectus dated May 19, 2000)
$20,015,411
Vanderbilt Mortgage and Finance, Inc.
Seller and Servicer
Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 2000B
Class I B-2 Certificates
Carefully consider the risk factors in the Prospectus Supplement and the
Prospectus.
The offered certificates represent obligations of the trust only and do not
represent an interest in or obligation of Vanderbilt Mortgage and Finance,
Inc., The Chase Manhattan Bank or any of their affiliates (except to the
extent of the limited guarantee of the Class I B-2 and Class II B-4
Certificates by Clayton Homes, Inc.).
This Supplement to the Prospectus Supplement may be used to offer and sell the
certificates only if accompanied by the Prospectus Supplement and the
Prospectus.
The Certificates:
o This Supplement relates to the offering of the Class I B-2 Certificates
of the Series referenced above. This Supplement does not contain complete
information about the offering of the Class I B-2 Certificates.
Additional information is contained in the accompanying Prospectus
Supplement dated May 19, 2000 prepared in connection with the offering of
Series 2000B Certificates and in the related Prospectus dated May 19,
2000. You are urged to read this Supplement, the Prospectus Supplement
and the Prospectus in full.
o On the issuance date the Original Class Principal Balance of the Class I
B-2 Certificates was $20,015,411. As of September 25, 2000, the Class
Principal Balance of the Class I B-2 Certificates was $20,015,411.
o Credit Suisse First Boston Corporation has agreed to purchase the Class I
B-2 Certificates and the Class I B-2 Certificates will be offered by
Credit Suisse First Boston Corporation from time to time as provided
herein in negotiated transactions or otherwise at varying prices to be
determined at the time of sale. The aggregate proceeds to the Seller from
the sale of the Class I B-2 Certificates are expected to be
$19,427,338.57.
o It is expected that delivery of the Class I B-2 Certificates will be made
in book-entry form through the facilities of The Depository Trust
Company.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus supplement or the prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
Credit Suisse First Boston
September 26, 2000
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION IN THE
PROSPECTUS, THE ACCOMPANYING PROSPECTUS SUPPLEMENT
AND THIS SUPPLEMENT THERETO
We tell you about the certificates in separate documents that
progressively provide more detail: (a) the prospectus, which provides general
information, some of which may not apply to a particular series of
certificates, including your series; (b) the prospectus supplement related to
the particular terms of your series of certificates and (c) this supplement to
the prospectus supplement providing additional information with respect to
your certificates.
If the terms of your series of certificates described in the prospectus
supplement and this supplement vary from the prospectus, you should rely on
the information in the prospectus supplement and this supplement. If the terms
of your certificates described in this supplement vary from the prospectus
supplement and prospectus, you should rely on the information in this
supplement.
You should rely only on the information contained in this document or
information to which we have referred you. We have not authorized anyone to
provide you with information that is different. This document may only be used
where it is legal to sell these securities. The information in this document
may only be accurate on the date of this document.
REPORTS TO HOLDERS OF THE CERTIFICATES
We will provide to the holders of certificates of each series certain
monthly and annual reports concerning the certificates and the related trust
fund. For a more complete description of the reports you will receive, please
read the section entitled "Description of the Certificates -- Reports to
Certificateholders" in the prospectus supplement relating to your series.
WHERE YOU CAN FIND MORE INFORMATION
Federal securities law requires the filing of certain information with
the Securities and Exchange Commission, including annual, quarterly and
special reports, proxy statements and other information. Vanderbilt Mortgage
and Finance, Inc. and Clayton Homes, Inc. have filed a registration statement
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended. You can read and copy the registration statement, as well as other
filed documents, at the Securities and Exchange Commission's public reference
facilities located at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549. You may obtain information on the operation of the public
reference facilities by calling the Securities and Exchange Commission at
1-800-SEC-0330. You may also visit the Securities and Exchange Commission's
web site at http://www.sec.gov to access available filings.
Clayton Homes, Inc. has securities other than the certificates listed on
the New York Stock Exchange. You may inspect reports and other information
concerning those securities at the New York Stock Exchange.
The Securities and Exchange Commission allows us to "incorporate by
reference" some of the information we file with it, which means that we can
disclose important information to you by referring you to those documents. The
information that we incorporate by reference is considered to be part of the
prospectus, and later information that we file with the Securities and
Exchange Commission will automatically update and supersede this information.
With respect to any class of certificates that is supported by a guarantee of
Clayton Homes, Inc., we are incorporating by reference the following documents
into the prospectus, the related prospectus supplement and this supplement
thereto:
o Clayton Homes, Inc.'s Annual Report on Form 10-K for the year ended
June 30, 2000.
We are also incorporating by reference into the prospectus, the related
prospectus supplement and this supplement thereto:
o any document filed by Vanderbilt Mortgage and Finance, Inc. pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Securities and Exchange
Act of 1934, as amended, after the date of the prospectus and prior
to the termination of the offering of the certificates issued by the
trust; and
o any document: (i) that relates to a class of certificates supported
by a guarantee of Clayton Homes, Inc. and (ii) that is filed by
Clayton Homes, Inc. pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Securities and Exchange Act of 1934, as amended, after the date
of the prospectus and prior to the termination of the offering of
the certificates issued by the trust.
We will provide to you, upon your written or oral request, without
charge, a copy of any or all of the documents incorporated by reference in the
prospectus (other than certain exhibits to such documents). Please direct your
requests for copies of documents filed by Vanderbilt Mortgage and Finance,
Inc. to its principal executive office at 500 Alcoa Trail, Maryville,
Tennessee 37804, Attention: David Jordan, Secretary, telephone number: (865)
380-3515. Please direct your requests for copies of documents filed by Clayton
Homes, Inc. to its principal executive office at 5000 Clayton Road, Maryville,
Tennessee 37804, Attention: Kevin T. Clayton, President and Chief Executive
Officer, telephone number: (865) 380-3000.
<PAGE>
This Supplement is qualified in its entirety by reference to the detailed
information appearing in the accompanying Prospectus Supplement and
Prospectus. Certain capitalized terms used in this Supplement are defined in
the Prospectus Supplement or the Prospectus.
THE CONTRACT POOL
As of September 25, 2000 (the "Reference Date"), the Contract Pool
included approximately 9,461 Contracts having an aggregate outstanding
principal balance of approximately $329,553,524.29. The Group I Contracts
included approximately 7,727 Contracts having an aggregate outstanding
principal balance of approximately $273,042,235.26.
The following table summarizes the delinquency and foreclosure experience
of the Contracts as of the Reference Date.
<TABLE>
<CAPTION>
As of
September 25, 2000
------------------
<S> <C>
Total Number of Contracts Outstanding................................................. 9,461
Total Delinquencies as a Percent of Contracts Outstanding at Period End (1)...........
31-59 days................................................................... 4.54%
60-89 days................................................................... 0.92%
90 days or more (excluding pending foreclosures)............................. 0.76%
------------------
Total Delinquencies................................................................... 6.23%
==================
(1) As a percentage of the total number of Contracts as of the Reference Date.
</TABLE>
DESCRIPTION OF THE CLASS I B-2 CERTIFICATES
The Class I B-2 Certificates are Subordinate Certificates. See
"Description of the Certificates--Group I Certificates and the
Senior/Subordinate Structure" in the Prospectus Supplement. To the extent
funds are available therefor, the Class I B-2 Certificates will be entitled to
receive interest and principal in the amount of the Group I Available
Distribution Amount for such Class as described in the Prospectus Supplement
under "Description of the Certificates--Distributions". It is unlikely that
the holders of the Class I B-2 Certificates will receive distributions of
principal on any Remittance Date prior to the Remittance Date on which the
Class I M-1 and Class I B Principal Distribution Test is met. Additional
information relating to distributions of certain payments in respect of
principal with respect to the Class I B-2 Certificates are set forth in the
Prospectus Supplement under "Description of the Certificates--Distributions".
Losses on Liquidated Contracts in Group I will be allocated to the Class
I B-2 Certificates as described in the Prospectus Supplement under
"Description of the Certificates--Losses on Liquidated Contracts". However,
the Class I B-2 Certificates will have the benefit of the Limited Guarantee
from Clayton Homes, Inc. ("Clayton") or the Alternate Credit Enhancement. See
"Description of the Certificates--Limited Guarantee of Clayton" in the
Prospectus Supplement.
As of the Reference Date, the Class Principal Balance of the Class I B-2
Certificates was approximately $20,015,411, evidencing an undivided interest
of approximately 7.33% in the then current principal balance of the Group I
Contracts. As of the Reference Date, the Group I Senior Certificates had an
aggregate principal balance of approximately $230,029,980.38 and evidenced in
the aggregate a beneficial ownership interest of approximately 84.25% in the
then current principal balance of the Group I Contracts.
Reports to Certificateholders
The most recent monthly statement that has been furnished to
Certificateholders of record on the most recent Remittance Date is included
herein as Exhibit 1.
YIELD AND PREPAYMENT CONSIDERATIONS
See "Yield and Prepayment Considerations" in the Prospectus Supplement
for information related to the Class I B-2 Certificates. The information set
forth in the table in the Prospectus Supplement entitled "Percent of the
Original Principal Balance of the Class I B-2 Certificates at the Respective
Percentages of the Prepayment Model Set Forth Below" is subject to the
assumptions set forth in "Yield and Prepayment Considerations--Group I
Assumptions" in the Prospectus Supplement.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Prospective purchasers of the Class I B-2 Certificates should consider
carefully the income tax consequences of an investment in the Class I B-2
Certificates discussed under "Certain Federal Income Tax Consequences" in the
Prospectus Supplement and in the Prospectus. Such purchasers should also
consult their own tax advisors with respect to those consequences.
ERISA CONSIDERATIONS
Prospective purchasers of the Class I B-2 Certificates should consider
carefully the ERISA consequences of an investment in the Class I B-2
Certificates discussed under "ERISA Considerations" in the Prospectus, the
Prospectus Supplement and herein, and should consult their own advisors with
respect to those consequences. As described in the Prospectus Supplement, the
Class I B-2 Certificates originally did not qualify for any exemption under
ERISA.
RATINGS
The Class I B-2 Certificates are currently rated "Baa2" by Moody's
Investors Service, Inc. and "BBB" by Standard and Poor's Ratings Services. See
"Certificate Rating" in the Prospectus Supplement.
USE OF PROCEEDS
Substantially all of the net proceeds to be received from the sale of the
Class I B-2 Certificates will be added to the general funds of the Company.
LEGAL INVESTMENT CONSIDERATIONS
The Class I B-2 Certificates will not constitute "mortgage related
securities" under the Secondary Mortgage Market Enhancement Act of 1984. "See
Legal Investment Considerations" in the Prospectus Supplement.
UNDERWRITING
Subject to the terms and conditions set forth in an agreement (the
"Underwriting Agreement") between the Company and the Credit Suisse First
Boston Corporation (the "Underwriter"), the Company has agreed to sell to the
Underwriter, and the Underwriter has agreed to purchase from the Company the
Class I B-2 Certificates. In the Underwriting Agreement, the Underwriter has
agreed, subject to the terms and conditions set forth therein, to purchase all
of the Class I B-2 Certificates offered hereby if any Class I B-2 Certificates
are purchased.
The distribution of the Class I B-2 Certificates by the Underwriters may
be effected from time to time in one or more negotiated transactions, or
otherwise, at varying prices to be determined at the time of sale. The
Underwriters may effect such transactions by selling the Class I B-2
Certificates to or through dealers, and such dealers may receive compensation
in the form of underwriting discounts, concessions or commissions from the
Underwriter for whom they act as agent. In connection with the sale of the
Class I B-2 Certificates, the Underwriters may be deemed to have received
compensation from the Seller in the form of underwriting compensation. The
Underwriters and any dealers that participate with the Underwriters in the
distribution of any Class I B-2 Certificates may be deemed to be underwriters
and any profit on the resale of the Class I B-2 Certificates positioned by
them may be deemed to be underwriting discounts and commissions under the
Securities Act of 1933, as amended.
Pursuant to the Underwriting Agreement, the Company has agreed to
indemnify the Underwriter against certain liabilities including civil
liabilities under the Securities Act of 1933, as amended, or contribute to
payments which the Underwriter may be required to make in respect thereof.
EXPERTS
The consolidated financial statements of Clayton for each of the three
years in the period ended June 30, 2000, incorporated by reference herein, have
been incorporated herein in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of that firm as experts in
accounting and auditing.
<PAGE>
$20,015,411
Vanderbilt Mortgage and Finance, Inc.
Seller and Servicer
Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 2000B
Class I B-2 Certificates
-----------
SUPPLEMENT TO PROSPECTUS SUPPLEMENT
-----------
Credit Suisse First Boston
You should rely only on the information contained or incorporated by
reference in this supplement to the prospectus supplement, the prospectus
supplement and the accompanying prospectus. We have not authorized anyone to
provide you with different information.
We are not offering the Series 2000B Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Class I B-2 Certificates in any
state where the offer is not permitted.
We do not claim that the information in this supplement to the prospectus
supplement, the prospectus supplement and prospectus is accurate as of any
date other than the dates stated on the respective covers.
Dealers will deliver a supplement to the prospectus supplement,
prospectus supplement and prospectus when acting as underwriters of the Series
2000B Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Class I B-2 Certificates and with respect to their unsold
allotments or subscriptions. In addition, all dealers selling the Series 2000B
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificates,
Class I B-2 Certificates will be required to deliver a supplement to the
prospectus supplement, prospectus supplement and prospectus for ninety days
following the date of this supplement to the prospectus supplement.
September 26, 2000
<PAGE>
Exhibit 1
Chase Bank, Trustee Determination Date: 04-Oct-00
Manufactured Housing Contracts Remittance Date: 10-Oct-00
Senior/Subordinated Pass-Through For the Period Ended: 25-Sep-00
Certificates Series 2000 B
Lock-Out Date: Jun-05
Information for Clauses (a) through (s), Section 7.01 -
GROUP I
<TABLE>
<CAPTION>
Class I A-1 Class I A-2 Class I A-3 Class I A-4
<S> <C> <C> <C> <C>
(a) Class I A and Class I B Distribution 2,991,926.71 335,208.33 343,958.33 339,025.04
Amounts
(b) Formula Principal
Distribution Amount
(a) Scheduled 503,617.52
Principal Due
(b) Partial Prepayments 326,678.92
Received
(c) Principal Payments in Full 1,726,274.94
(Scheduled Balance)
(d) Liquidated Contract 0.00
Scheduled Balance
(e) Section 3.05 Purchase Scheduled 0.00
Balance
(f) Previously Undistributed Shortfalls 0.00
in (a) through (e) ------------- ------------- ------------- ---------------
Total Principal 2,556,571.38 0.00 0.00 0.00
Distribution ------------- ------------- ------------- ----------------
(c) Interest Distribution 435,355.33 335,208.33 343,958.33 339,025.04
Unpaid Interest Shortfall 0.00 0.00 0.00 0.00
Total Interest Distribution 435,355.33 335,208.33 343,958.33 339,025.04
(d) Beginning Class I A and Class I B 70,569,551.76 50,000,000.00 50,000,000.00 47,722,000.00
Principal Balance
Less: Principal Distribution 2,556,571.38 0.00 0.00 0.00
------------- ------------- ------------- --------------
Remaining Class A and Class B Principal 68,012,980.38 50,000,000.00 50,000,000.00 47,722,000.00
Balance
(e) Fees Due Servicer
Monthly Servicing Fee 286,954.13
Section 8.06 Reimbursement Amount 0.00
Section 6.02 Reimbursement Amount 17,583.00
Reimburseable Fees 0.00
-------------
Total Fees Due Servicer 304,537.13
(table continued)
Class I A-5 Class I M-1 Class I B-1 Class I B-2
<C> <C> <C> <C>
103,817.44 84,967.38 88,160.21 154,285.46
------------ ------------ ------------ --------------
0.00 0.00 0.00 0.00
103,817.44 84,967.38 88,160.21 154,285.46
0.00 0.00 0.00 0.00
------------ ----------- ------------ -------------
103,817.44 84,967.38 88,160.21 154,285.46
------------- ------------- ------------- --------------
14,295,000.00 11,437,000.00 11,437,000.00 20,015,411.00
0.00 0.00 0.00 0.00
14,295,000.00 11,437,000.00 11,437,000.00 20,015,411.00
(h) Pool Factor Original Balance Rate
Class I A-1 0.83966642 81,000,000.00 6.7300% Libor 6.6200%
Class I A-2 1.00000000 50,000,000.00 8.0450% Spread 0.11%
Class I A-3 1.00000000 50,000,000.00 8.2550%
Class I A-4 1.00000000 47,722,000.00 8.5250%
Class I A-5 1.00000000 14,295,000.00 8.7150%
Class I M-1 1.00000000 11,437,000.00 8.9150%
Class I B-1 1.00000000 11,437,000.00 9.2500%
Class I B-2 1.00000000 20,015,411.00 9.2500%
(f) Delinquency as of the Due Period No. of Unpaid Principal
Contracts Balance
31-59 Days Delinquent 397 12,469,581
60-89 Days Delinquent 80 2,640,993
90+ Days Delinquent 67 2,064,221
3-Month Avg Thirty-Day Delinquency Ratio 4.32%
3-Month Avg Sixty-Day Delinquency Ratio 1.41%
(g) Section 3.05 Repurchases 0.00
(i) Class R Distribution Amount 0.00
Reposession Profits 0.00
(j) Principal Balance of Contracts in Repossession 1,194,629.51
(k) Aggregate Net Liquidation Losses 0.00
(l) (x) Class B-2 Formula Distribution Amount 154,285.46
(y) Remaining Amount Available 485,198.73
--------------
Amount of (x) over (y) 0.00
(m) Class B-2 Liquidation Loss Amount 0.00
(n) Guarantee Payment 0.00
(o) Unadvanced Shortfalls 0.00
No. 28 $
(p) Units repossessed 864,547.35
(q) Principal Prepayments paid 2,052,953.86
(r) Scheduled Principal Payments 503,617.52
(s) Weighted Average Interest Rate 11.38%
Computation of Available Distribution Amount
(i) Certificate Account Balance at Monthly Cutoff-Vanderbilt 4,929,412.07
Certificate Account Balance at Monthly Cutoff-SubServicer-21st 318,467.82
(ii) Monthly Advance made 0.00
(iii) Section 5.05 Certificate Fund Income-Vanderbilt 18,276.85
(iii) Section 5.05 Certificate Fund Income-SubServicer-21st 1,231.24
(v) Principal due Holders 0.00
Less:
(i) Scheduled Payments of principal and interest due subsequent to
the Due Period-Vanderbilt 170,758.70
(i) Scheduled Payments of principal and interest due subsequent to
the Due Period-SubServicer-21st 19,829.98
(ii) Due to the Servicer Pursuant to Section 6.02:
(i) Section 3.05 Purchases (Due Seller) 0.00
(ii) Reimbursement for taxes from Liquidation Proceeds 0.00
(iii) Monthly Servicing Fee 286,954.13
(iv) Reimburseable Liquidation Expenses 17,583.00
(v) Section 6.04 (c) reimbursement 0.00
(vi) Section 8.06 reimbursement 0.00
(vii) Amounts not required to be deposited-SubServicer-21st 0.00
Total Due Servicer 304,537.13
Available Distrubution Amount-Vanderbilt 4,472,393.09
Available Distrubution Amount-SubServicer-21st 299,869.08
To Class A and B 4,441,348.90
Monthly Excess Cashflow 330,913.27
Weighted Average Remaining Term (months) 228.00
Scheduled Balance Computation
Prior Month Balance 275,475,962.76
Current Balance 273,042,235.26
Adv Principal 42,613.14
Del Principal 165,457.02
Pool Scheduled Balance 272,919,391.38
Principal Payments in Full 1,726,274.94
Partial Prepayments 326,678.92
Scheduled Principal 503,617.52
Collateral Balance 273,042,235.26
No. of Unpaid Principal
Delinquency as of Calendar Month End Contracts Balance
31-59 Days Delinquent 260 8,202,219
60-89 Days Delinquent 57 2,070,835
90+ Days Delinquent 62 1,937,860
3-Month Avg Thirty-Day Delinquency Ratio 3.26%
3-Month Avg Sixty-Day Delinquency Ratio 1.26%
Acquistion Loss Amount
Current Month Acquisition Loss Amount 9,826
Cumulative Acquisition Loss Amount 9,826
</TABLE>