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
May 8, 1996
Date of Report ..............................................................
(Date of earliest event reported)
CHRYSLER FINANCIAL CORPORATION
.............................................................................
(Exact name of registrant as specified in its charter)
State of Michigan 1-5966 38-0961430
.............................................................................
(State or other jurisdiction (Commission) (IRS Employer
of incorporation) File No.) Identification No.)
27777 Franklin Rd., Southfield, Michigan 48034
..............................................
(Address of principal executive offices)
(810) 948-3058
Registrant's telephone number, including area code............................
This filing relates to Registration Statement No. 33-55789.
<PAGE>
Item 5. Other Events.
In connection with the proposed offering of Premier Auto Trust 1996-2
Asset Backed Notes and Asset Backed Certificates, attached as Exhibit 99
are certain materials prepared by Chrysler Financial Corporation that are
required to be filed pursuant to the no-action letter dated May 20, 1994
issued by the staff of the Securities and Exchange Commission (the
"Commission") to Kidder, Peabody Acceptance Corporation-1, Kidder, Peabody
& Co. Incorporated and Kidder Structured Asset Corporation and the
no-action letter dated February 15, 1995 issued by the staff of the
Commission to the Public Securities Association.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
Listed below are the financial statements, pro forma financial
information and exhibits, if any, filed as a part of this Report:
(a) Financial statements of businesses acquired;
None
(b) Pro forma financial information:
None
(c) Exhibits:
Exhibit 99
- 2 -
<PAGE>
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 hereunto duly authorized.
CHRYSLER FINANCIAL CORPORATION
Date: May 8, 1996 By:/s/ B.C. Babbish
------------------------
Assistant Secretary
- 3 -
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description of Exhibit
- ------- ----------------------
99 Material prepared by Chrysler Financial Corporation in
connection with Premier Auto Trust 1996-2 pursuant to the no-
action letter dated May 20, 1994 issued by the staff of the
Securities and Exchange Commission (the "Commission") to
Kidder, Peabody Acceptance Corporation-1, Kidder, Peabody & Co.
Incorporated and Kidder Structured Asset Corporation and the
no-action letter dated February 15, 1995 issued by the staff of
the Commission to the Public Securities Association.
- 4 -
EXHIBIT 99
Premier 1996-2 Structural and Collateral Materials
<PAGE>
Premier Auto Trust 1996-2
Chrysler Financial Corporation, Seller and Servicer
Subject to Revision
Term Sheet dated May 8, 1996
Issuer............................ Premier Auto Trust 1996-2 (the "Trust" or
the "Issuer").
The Notes......................... (i) Class A-1 ______% Asset Backed Notes
(the "Class A-1 Notes") in the aggregate
initial principal amount of $250,000,000.
The Class A-1 Notes are not being offered;
(ii) Class A-2 Floating Rate Asset Backed
Notes (the "Class A-2 Notes") in the
aggregate initial principal amount of
$735,000,000;
(iii) Class A-3 _____% Asset Backed Notes
(the "Class A-3 Notes") in the aggregate
initial principal amount of $435,000,000;
and
(iv) Class A-4 _____% Asset Backed Notes
(the "Class A-4 Notes") in the aggregate
initial principal amount of $264,375,000;
The Certificates.................. ____% Asset Backed Certificates (the
"Certificates" and, together with the
Notes, the "Securities") with an aggregate
initial Certificate Balance of
$65,616,772.30.
Terms of the Notes:
A. Distribution Dates.......... Payments of interest and principal on the
Notes will be made on the sixth day of
each month or, if any such day is not a
Business Day, on the next succeeding
Business Day (each, a Distribution Date"),
commencing June 6, 1996.
B. Interest Rates.............. The Class A-1, Class A-3 and Class A-4
Notes will have fixed interest rates. The
Class A-2 Rate will be LIBOR (as defined
in the Prospectus Supplement) plus ___%,
subject to a maximum rate of 12%.
C. Interest.................... Interest on the Notes other than the Class
A-2 Notes will accrue at the applicable
Interest Rate from the Closing Date (in
the case of the first Distribution Date)
or from the sixth day of the month
preceding the month of a Distribution Date
to and including the fifth day of the
month of such Distribution Date. Interest
on the outstanding principal amount of the
Class A-2 Notes will accrue at the Class
A-2 Rate from the Closing Date (in the
case of the first Distribution Date) or
from the most recent Distribution Date on
which interest has been paid to but
excluding the following Distribution Date
(each, a "Floating Rate Interest Accrual
Period"). Interest on each class of Notes
other than the Class A-2 Notes will be
calculated on the basis of a 360-day year
consisting of twelve 30-day months.
Interest on the Class A-2 Notes will be
calculated on the basis of the actual
number of days in each Floating Rate
Interest Accrual Period divided by 360.
<PAGE>
D. Principal................... Principal of the Notes will be payable on
each Distribution Date in an amount equal
to the Noteholders' Principal
Distributable Amount for the calendar
month (the "Collection Period") preceding
such Distribution Date to the extent of
funds available therefor. The
"Noteholders' Principal Distributable
Amount" will equal (i) the Regular
Principal Distribution Amount plus (ii)
the Accelerated Principal Distribution
Amount. The "Regular Principal
Distribution Amount" with respect to any
Distribution Date will generally equal the
amount of principal paid or, in certain
circumstances, scheduled to be paid with
respect to the Receivables plus, in
certain circumstances, the principal
balance of defaulted Receivables. The
"Accelerated Principal Distribution
Amount" with respect to a Distribution
Date will equal the portion, if any, of
the Total Distribution Amount for the
related Collection Period that remains
after payment of (a) the Servicing Fee
(together with any portion of the
Servicing Fee that remains unpaid from
prior Distribution Dates), (b) the
interest due on the Notes, (c) the Regular
Principal Distribution Amount, (d) the
interest due on the Certificates, and (e)
the amount, if any, required to be
deposited in the Reserve Account on such
Distribution Date.
No principal payments will be made (i) on
the Class A-2 Notes until the Class A-1
Notes have been paid in full; (ii) on the
Class A-3 Notes until the Class A-2 Notes
have been paid in full; or (iii) on the
Class A-4 Notes until the Class A-3 Notes
have been paid in full.
The outstanding principal amount of the
Class A-1 Notes, to the extent not
previously paid, will be payable on the
January 1997 Distribution Date (the "Class
A-1 Final Scheduled Distribution Date");
the outstanding principal amount of the
Class A-2 Notes, to the extent not
previously paid, will be payable on the
December 1998 Distribution Date (the
"Class A-2 Final Scheduled Distribution
Date"); the outstanding principal amount
of the Class A-3 Notes, to the extent not
previously paid, will be payable on the
January 2000 Distribution Date (the "Class
A-3 Final Scheduled Distribution Date");
and the outstanding principal amount of
the Class A-4 Notes, to the extent not
previously paid, will be payable on the
October 2000 Distribution Date (the "Class
A-4 Final Scheduled Distribution Date").
E. Optional Redemption......... The Class A-4 Notes will be redeemable in
whole, but not in part, after the Pool
Balance declines to 10% or less of the
Initial Pool Balance.
Terms of the Certificates:
A. Distribution Dates.......... Distributions with respect to the
Certificates will be made on each
Distribution Date, commencing June 6,
1996.
B. Pass Through Rate........... _____% per annum (the "Pass Through
Rate").
<PAGE>
C. Interest.................... On each Distribution Date, accrued
interest at the Pass Through Rate on the
outstanding Certificate Balance will be
paid generally to the extent of funds
available following payment of the
Servicing Fee and distributions in respect
of the Notes from the Total Distribution
Amount and the Reserve Account. Interest
will be calculated on the basis of a
360-day year consisting of twelve 30-day
months. Interest in respect of a
Distribution Date will accrue from the
Closing Date (in the case of the first
Distribution Date) or from the sixth day
of the month preceding the month of the
Distribution Date to and including the
fifth day of the month of such
Distribution Date.
D. Principal................... No distributions of principal on the
Certificates will be made until all of the
Notes have been paid in full. On each
Distribution Date commencing on the
Distribution Date on which the Notes are
paid in full, principal of the
Certificates will be payable in an amount
generally equal to the Certificateholders'
Principal Distributable Amount for the
Collection Period preceding such
Distribution Date, to the extent of funds
available therefor following payment of
the Servicing Fee, payments of interest
and principal, if any, due in respect of
the Notes and the distribution of interest
in respect of the Certificates. The
Certificateholders' Principal
Distributable Amount will be the Regular
Principal Distribution Amount (less, on
the Distribution Date on which the Notes
are paid in full, the portion thereof
payable on the Notes). No Receivable has a
scheduled maturity date later than May 31,
2001.
E. Optional Prepayment......... The Certificates may be prepaid after the
Pool Balance declines to 10% or less of
the Initial Pool Balance.
Reserve Account................... The "Reserve Account" will be created with
an initial deposit by CFC on the Closing
Date of cash or Eligible Investments
having a value at least equal to
$104,999,506.34.
Certain amounts in the Reserve Account on
any Distribution Date (after giving effect
to all distributions made on such
<PAGE>
Distribution Date) in excess of the
Specified Reserve Account Balance for such
Distribution Date will generally be
released to any affiliate of CFC. Subject
to reduction as described below, the
"Specified Reserve Account Balance" with
respect to any Distribution Date generally
will be equal to the sum of (i) 2.00% of
the Initial Pool Balance and (ii) 4.00% of
the Initial Pool Balance. However, with
respect to the portion of the Specified
Reserve Account Balance set forth in
clause (i) above, so long as on any
Distribution Date (except the first
Distribution Date) the sum of (x) the
outstanding principal balance of the
Securities (after giving effect to
payments made on the prior Distribution
Date) and (y) the aggregate amount of
Payaheads that have been collected but not
yet applied as payments under the related
Receivables as of the first day of the
related Collection Period is less than or
equal to 96.2% of the Pool Balance on the
first day of the related Collection
Period, then such portion of the Specified
Reserve Account Balance set forth in
clause (i) above will be reduced to 1.45%
of the Initial Pool Balance. In addition,
so long as on any Distribution Date
(except the first Distribution Date) the
sum of (x) the outstanding principal
balance of the Securities (after giving
effect to payments made on the prior
Distribution Date) and (y) the aggregate
amount of Payaheads that have been
collected but not yet applied as payments
under the related Receivables as of the
first day of the related Collection Period
is less than or equal to 94.5% of the Pool
Balance on the first day of the related
Collection Period, then such portion of
the Specified Reserve Account Balance set
forth in clause (i) above will be reduced
to 1.00% of the Initial Pool Balance. With
respect to the portion of the Specified
Reserve Account Balance set forth in
clause (ii) above, so long as on any
Distribution Date (except the first
Distribution Date) the sum of (x) the
outstanding principal balance of
the Securities (after giving
effect to payments made on the prior
Distribution Date) and (y) the aggregate
amount of Payaheads that have been
collected but not yet applied as payments
under the related Receivables as of the
first day of the related Collection Period
is less than or equal to 98.5% of the Pool
Balance on the first day of the related
Collection Period, then the portion of the
Specified Reserve Account Balance set
forth in clause (ii) above will be reduced
to an amount equal to the product of (I)
the Pool Balance on the first day of the
related Collection Period and (II) the
percentage (which shall not be greater
than 4.00% or less than zero) equal to (X)
the percentage derived from the fraction,
the numerator of which is the sum of (x)
the outstanding principal balance of the
Securities (after giving effect to
payments made on the prior Distribution
Date) and (y) the aggregate amount of
Payaheads that have been collected but not
yet applied as payments under the related
Receivables as of the first day of the
related Collection Period, and the
denominator of which is such Pool Balance
less (Y) 94.5%. The Specified Reserve
<PAGE>
Account Balance is further subject to
adjustment in certain circumstances
described in the Prospectus Supplement.
Funds will be withdrawn from the Reserve
Account up to the Available Amount, first,
to cover any shortfalls in the amounts due
to the Noteholders and, second, to cover
shortfalls in the amounts due to the
Certificateholders. On each Distribution
Date, the Reserve Account will be
reinstated up to the Specified Reserve
Account Balance to the extent of the
portion, if any, of the Total Distribution
Amount remaining after payment of the
Servicing Fee and the amounts due to the
Noteholders and Certificateholders.
The "Pool Balance" at any time will
represent the aggregate principal balance
of the Receivables at the end of the
preceding Collection Period, after giving
effect to all payments (other than
Payaheads) received from Obligors,
Advances and Purchase Amounts to be
remitted by the Servicer or the Seller, as
the case may be, all for such Collection
Period, and all losses realized on
Receivables liquidated during such
Collection Period.
Priority of Payments.............. Collections in respect of the Receivables
for each Collection Period will be applied
in the following order of priority: (i)
the Servicing Fee, together with any
previously unpaid Servicing Fees, (ii)
amounts payable to the Noteholders; (iii)
amounts distributable to the
Certificateholders and (iv) the remaining
balance, if any, to the Reserve Account.
Rating of the Notes............... In the highest investment rating category
by at least two nationally recognized
rating agencies.
Rating of the Certificates........ At least in the "A" category or its
equivalent by a least two nationally
recognized rating agencies.
The Receivables Pool
As of the Cutoff Date, each Receivable (i) had an outstanding gross
balance of at least $1,000 and (ii) was not more than 30 days past due (an
account is not considered past due if the amount past due is less than 10% of
the scheduled monthly payment). As of the Cutoff Date, no Obligor on any
Receivable was noted in the related
<PAGE>
records of the Seller as being the subject of a bankruptcy proceeding, and no
Obligor on any Receivable financed a Financed Vehicle under the Seller's
"New-Finance Buyer Plan" program. No selection procedures believed by the
Seller to be adverse to Securityholders were used in selecting the
Receivables.
Set forth in the following tables is information concerning the
composition, distribution by annual percentage rate ("APR") and the geographic
distribution of the Receivables Pool as of the Cutoff Date.
<TABLE>
<CAPTION>
Premier Auto Trust 1996-2
Composition of the Receivables Pool
Weighted
Average Weighted Average
Weighted Average Aggregate Principal Number of Remaining Average Principal
APR of Receivable Balance Receivables Term Original Term Balance
- ----------------- ------------------- ----------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C>
10.87% $1,749,991,772.30 129,121 51.55 months 56.12 months $13,553.12
<CAPTION>
Premier Auto Trust 1996-2
Distribution by APR of the Receivables Pool
Number of Aggregate Percent of Aggregate
APR Range Receivables Principal Balance Principal Balance(1)
- ------------------------------------ ------------ ---------------- -------------------
<S> <C> <C> <C>
0.00% - 5.00%....................... 1,907 $22,068,020.89 1.3%
5.01% - 6.00%....................... 584 7,763,937.44 0.4
6.01% - 7.00%....................... 4,080 59,987,686.90 3.4
7.01% - 8.00%....................... 7,896 113,671,600.07 6.5
8.01% - 9.00%....................... 20,245 302,023,330.79 17.3
9.01% - 10.00%...................... 22,384 319,961,877.23 18.3
10.01% - 11.00%..................... 17,525 245,427,984.44 14.0
11.01% - 12.00%..................... 15,287 206,617,940.37 11.8
12.01% - 13.00%..................... 11,787 152,453,009.04 8.7
13.01% - 14.00%..................... 7,710 91,584,569.23 5.2
14.01% - 15.00%..................... 6,031 70,671,423.02 4.0
15.01% - 16.00%..................... 3,160 37,887,551.37 2.2
16.01% - 17.00%..................... 3,398 42,913,876.22 2.5
17.01% - 18.00%..................... 3,874 49,377,564.58 2.8
Greater than 18.00%................. 3,253 27,581,400.71 1.6
------- ----------------- -----
129,121 $1,749,991,772.30 100.0%
======= ================= =====
<FN>
- ------------------
(1) Percentages may not add to 100.0% because of rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Premier Auto Trust 1996-2
Geographic Distribution of the Receivables Pool
Percent of Percent of
Aggregate Aggregate
Principal Principal
State(1) Balance(2) State(1) Balance(2)
-------- ---------- -------- ----------
<S> <C> <S> <C>
Alabama.................. 1.6% Montana............... 0.1%
Alaska................... 0.2 Nebraska.............. 0.3
Arizona.................. 1.2 Nevada................ 0.5
Arkansas................. 3.0 New Hampshire......... 2.6
California............... 6.7 New Jersey............ 5.3
Colorado................. 1.0 New Mexico............ 0.5
Connecticut.............. 1.2 New York.............. 7.3
Delaware................. 0.2 North Carolina........ 2.9
District of Columbia..... 0.0 North Dakota.......... 0.1
Florida.................. 5.3 Ohio.................. 0.5
Georgia.................. 2.9 Oklahoma.............. 1.1
Hawaii................... 0.4 Oregon................ 0.5
Idaho.................... 0.2 Pennsylvania.......... 5.5
Illinois................. 4.5 Rhode Island.......... 0.2
Indiana.................. 1.7 South Carolina........ 1.5
Iowa..................... 0.8 South Dakota.......... 0.1
Kansas................... 0.8 Tennessee............. 3.2
Kentucky................. 0.4 Texas................. 7.7
Louisiana................ 2.9 Utah.................. 0.3
Maine.................... 0.5 Vermont............... 0.4
Maryland................. 5.9 Virginia.............. 4.0
Massachusetts............ 3.2 Washington............ 0.5
Michigan................. 3.6 West Virginia......... 0.4
Minnesota................ 0.8 Wisconsin............. 1.2
Mississippi.............. 0.7 Wyoming............... 0.0
Missouri................. 3.7 -----
100.1%
<FN>
- -------------------------------
(1) Based on physical addresses of the dealers originating the receivables.
(2) Percentages may not add to 100.0% because of rounding.
</TABLE>
Approximately 27.25% of the aggregate principal balance of the
Receivables, constituting 31.66% of the number of the Receivables, represent
previously titled vehicles. Approximately 72.26% of the aggregate principal
balance of the Receivables represent financing of vehicles manufactured or
distributed by Chrysler.
Delinquencies, Repossessions and Net Losses
Set forth below is certain information concerning the experience of
CFC and its United States subsidiaries pertaining to retail new and used
automobile and light duty truck receivables, including those previously sold
which CFC continues to service. Chrysler Credit Corporation, which was merged
into the Seller on December 31, 1995, began originating Fixed Value
Receivables in July 1991. There can be no assurance that the delinquency,
repossession and net loss experience on the Receivables will be comparable to
that set forth below.
<PAGE>
<TABLE>
<CAPTION>
Delinquency Experience(1)
At March 31, At December 31,
----------------------------------------- ----------------------------------------
1996 1995 1995 1994
------------------ -------------------- ------------------- -------------------
Number of Number of Number of Number of
Contracts Amount Contracts Amount Contracts Amount Contracts Amount
--------- ------ --------- ------ --------- ------ --------- ------
(Dollars in Millions) (Dollars in Millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio.... 1,658,381 $20,788 1,516,344 $18,378 1,653,533 $20,913 1,444,736 $16,977
Period of
Delinquency
31-60 Days.. 36,740 $ 487 23,072 $ 276 55,507 $ 720 25,888 $ 293
61 Days or
More 3,784 58 1,987 28 6,792 100 2,085 27
--------- ------- --------- ------- --------- ------- --------- -------
Total
Delinquencies. 40,524 $ 545 25,059 $ 304 62,299 $ 820 27,973 $ 320
Total
Delinquencies
as a Percent
of the
Portfolio... 2.44% 2.62% 1.65% 1.65% 3.77% 3.92% 1.94% 1.88%
<CAPTION>
At December 31,
-------------------------------------------------------------------
1993 1992 1991
--------------------- --------------------- --------------------
Number of Number of Number of
Contracts Amount Contracts Amount Contracts Amount
--------- ------ --------- ------ --------- ------
(Dollars in Millions)
<S> <C> <C> <C> <C> <C> <C>
Portfolio............ 1,352,218 $14,116 1,344,799 $12,082 1,437,451 $11,994
Period of Delinquency
31-60 Days......... 16,350 $ 153 15,964 $ 134 21,025 $ 180
61 Days or More.... 1,383 15 1,376 13 2,048 20
--------- ------- --------- ------- --------- -------
Total Delinquencies.. 17,733 $ 168 17,340 $ 147 23,073 $ 200
Total Delinquencies
as a Percent of
the Portfo1io...... 1.31% 1.19% 1.29% 1.22% 1.61% 1.67%
<FN>
- --------------------------
(1) All amounts and percentages are based on the gross amount scheduled to
be paid on each contract, including unearned finance and other
charges. The information in the table includes an immaterial amount of
retail installment sale contracts on vehicles other than automobiles
and light duty trucks and includes previously sold contracts which CFC
continues to service.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Credit Loss/Repossession Experience(1)
Three Months
Ended
March 31, Year Ended December 31,
------------------- -------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------- -------- --------- ------- ------- ------- --------
(Dollars in Millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Amount Outstanding
During the Period........ $20,845 $17,563 $19,486 $15,517 $12,882 $11,818 $12,709
Average Number of Contracts
Outstanding During
the Period............... 1,655,990 1,474,910 1,572,963 1,396,497 1,341,084 1,382,898 1,517,178
Percent of Contracts
Acquired During the Period
with Recourse
to the Dealer............ 9.7% 14.5% 14.8% 17.0% 16.2% 15.8% 21.7%
Repossessions as a Percent
Average Number of Contracts
Outstanding(2)........... 4.12% 2.73% 3.05% 2.36% 2.15% 2.31% 2.63%
Net Losses as a Percent of
Liquidations(3)(4)....... 3.62% 1.92% 2.25% 1.38% 1.34% 1.71% 2.28%
Net Losses as a Percent of
Average Amount
Outstanding(2)(3)........ 1.94% 1.00% 1.16% 0.73% 0.75% 0.97% 1.21%
<FN>
- --------------------
(1) Except as indicated, all amounts and percentages are based on the
gross amount scheduled to be paid on each contract, including unearned
finance and other charges. The information in the table includes an
immaterial amount of retail installment sales contracts on vehicles
other than automobiles and light duty trucks and includes previously
sold contracts that CFC continues to service.
(2) Percentages have been annualized for the three months ended March 31,
1996 and 1995 and are not necessarily indicative of the experience
for the year.
(3) Net losses are equal to the aggregate of the balances of all contracts
which are determined to be uncollectible in the period, less any
recoveries on contracts charged off in the period or any prior
periods, including any losses resulting from disposition expenses and
any losses resulting from the failure to recover commissions to
dealers with respect to contracts that are prepaid or charged off.
(4) Liquidations represent a reduction in the outstanding balances of the
contracts as a result of monthly cash payments and charge-offs.
</TABLE>
During 1995, CFC experienced higher credit losses on automobile and
light duty truck retail receivables, as did other consumer finance companies
in the United States. The increased losses became more pronounced in early
1996. CFC attributes the higher loss experience to the combined effect of
current economic conditions, a change in the credit mix of CFC's retail
receivable originations during the first part of 1995 that resulted in an
increase in the frequency of repossessions, and organizational realignments
internal to CFC that affected retail collections. While higher credit losses
on outstanding receivables are expected to continue in the near term, CFC has
taken actions that it believes will improve the credit mix and servicing of
its automotive retail receivables. However, no assurance as to future results
can be given.
The net loss figures above reflect the fact that the Seller had
recourse to Dealers on a portion of its retail installment sale contracts. By
aggregate principal balance, approximately 4.20% of the Receivables represent
contracts with recourse to Dealers.
