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
June 10, 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 and 33-55789 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.
- 1 -
<PAGE>
Item 5. Other Events.
In connection with the proposed offering of Premier Auto Trust 1996-3,
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: June 10, 1996 By: /s/ B.C. Babbish
-----------------
Assistant Secretary
- 3 -
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
No. Description of Exhibit
- ------- ----------------------
99 Material prepared by ChryslerFinancial Corporation in
connection with Premier Auto Trust 1996-3 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 1996-3 Structural and Collateral Materials
The Information contained in the attached materials is referred to as
the "Information".
The attached Term Sheet has been prepared by Chrysler Financial
Corporation ("CFC"). Neither _____________________ ("______") nor any of
its affiliates makes any representation as to the accuracy or completeness
of the Information herein. The Information contained herein is preliminary
and will be superseded by the applicable prospectus supplement and by other
information subsequently filed with the Securities and Exchange Commission.
The Information contained herein will be superseded by the description
of the collateral pool contained in the prospectus supplement relating to
the securities.
The Information addresses only certain aspects of the applicable
security's characteristics and thus does not provide a complete assessment.
As such, the Information my not reflect the impact of all structural
characteristics of the security. The assumptions underlying the
Information, including structure and collateral, may be modified from time
to time to reflect changed circumstances.
Although a registration statement (including the prospectus) relating
to the securities discussed in this communication has been filed with the
Securities and Exchange Commission and is effective, the final prospectus
supplement relating to the securities discussed in this communication has
not been filed with the Securities and Exchange Commission. This
communication shall not constitute an offer to sell or the solicitation of
an offer to buy nor shall there be any sale of the securities discussed in
this communication in any state in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities
laws of any such state. Prospective purchasers are referred to the final
prospectus and prospectus supplement relating to the securities discussed in
this communication for definitive Information on any matter discussed in this
communication. Any investment decision should be based only on the data in
the prospectus and the prospectus supplement ("Offering Documents") and the
then current version of the Information. Offering Documents contain data
this is current as of their publication dates and after publication may no
longer be complete or current. A final prospectus and prospectus
supplement may be obtained by contacting the _______________ Trading Desk
at ______________.
[General Information: The data underlying the Information has been
obtained from sources that we believe are reliable, but we do not guarantee
the accuracy of the underlying data or computations based thereon. Bear
Stearns and/or individuals thereof may have positions in these securities
while the Information is circulating or during such period may engage in
transactions with the issuer or it affiliates. We act as principal in
transactions with you, and accordingly, you must determine the
appropriateness for you of such transactions and address any legal, tax or
accounting considerations applicable to you. Bear Stearns shall not be a
fiduciary or advisor unless we have agreed in writing to receive
compensation specifically to act in such capacities. If you are subject to
ERISA, the Information is being furnished on the condition that will not form
a primary basis for any investment decision. The Information is not a
solicitation of any transaction in securities which may be made only by
prospectus when required by law, in which event you may obtain such
prospectus from Bear Stearns by calling the telephone number listed above.]
<PAGE>
Premier Auto Trust 1996-3
Chrysler Financial Corporation, Seller and Servicer
Subject to Revision
Term Sheet dated June 10, 1996
Issuer.......................... Premier Auto Trust 1996-3 (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
$250,000,000.00. 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
$600,000,000.00;
(iii) Class A-3 _____% Asset Backed Notes
(the "Class A-3 Notes") in the aggregate
initial principal amount of $370,000,000.00;
and
(iv) Class A-4 _____% Asset Backed Notes (the
"Class A-4 Notes") in the aggregate initial
principal amount of $223,736,000.00;
The Certificates................ ____% Asset Backed Certificates (the
"Certificates" and, together with the Notes,
the "Securities") with an aggregate initial
Certificate Balance of $56,249,563.80.
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
July 8, 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
<PAGE>
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.
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 April 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 February 1999
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 March 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 November 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 July 8, 1996.
B. Pass Through Rate......... _____% per annum (the "Pass Through Rate").
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
<PAGE>
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 October 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 $89,999,133.84.
Certain amounts in the Reserve Account on any
Distribution Date (after giving effect to all
distributions made on such 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 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.
<PAGE>
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 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 1996-3
Composition of the Receivables Pool
Weighted
Average Weighted Average
Weighted Average Aggregate Principal Number of Remaining Average Principal
APR of Receivables Balance Receivables Term Original Term Balance
- ------------------- -------------------- ----------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
10.79% $1,499,985,563.80 109,453 53.93 months 57.69 months $13,704.38
<CAPTION>
Premier Auto Trust 1996-3
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%....................... 675 $ 9,125,645.60 0.6%
5.01% - 6.00%....................... 196 2,785,811.40 0.2
6.01% - 7.00%....................... 2,386 36,503,541.76 2.4
7.01% - 8.00%....................... 8,661 133,851,935.05 8.9
8.01% - 9.00%....................... 17,443 263,195,358.86 17.5
9.01% - 10.00%...................... 20,597 285,825,267.58 19.1
10.01% - 11.00%..................... 15,709 212,683,789.26 14.2
11.01% - 12.00%..................... 14,250 196,050,335.76 13.1
12.01% - 13.00%..................... 9,221 117,257,479.80 7.8
13.01% - 14.00%..................... 5,352 62,694,649.46 4.2
14.01% - 15.00%..................... 4,207 50,011,221.92 3.3
15.01% - 16.00%..................... 2,466 29,987,658.25 2.0
16.01% - 17.00%..................... 2,848 36,462,939.58 2.4
17.01% - 18.00%..................... 3,223 42,142,996.56 2.8
Greater than 18.00%................. 2,219 21,406,932.96 1.4
------- ----------------- ------
109,453 $1,499,985,563.80 100.0%
======= ================= ======
<FN>
- ------------------
(1) Percentages may not add to 100.0% because of rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Premier Auto Trust 1996-3
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........................ 1.1% Montana...................... 0.1%
Alaska......................... 0.2 Nebraska..................... 0.4
Arizona........................ 1.2 Nevada....................... 0.5
Arkansas....................... 2.6 New Hampshire................ 2.9
California..................... 5.5 New Jersey................... 5.2
Colorado....................... 1.0 New Mexico................... 0.4
Connecticut.................... 1.1 New York..................... 7.4
Delaware....................... 0.1 North Carolina............... 3.7
District of Columbia........... 0.0 North Dakota................. 0.1
Florida........................ 4.6 Ohio......................... 0.5
Georgia........................ 2.8 Oklahoma..................... 1.7
Hawaii......................... 0.4 Oregon....................... 0.7
Idaho.......................... 0.2 Pennsylvania................. 6.2
Illinois....................... 3.6 Rhode Island................. 0.3
Indiana........................ 1.8 South Carolina............... 1.7
Iowa........................... 0.8 South Dakota................. 0.1
Kansas......................... 0.8 Tennessee.................... 2.9
Kentucky....................... 0.4 Texas........................ 8.3
Louisiana...................... 2.6 Utah......................... 0.4
Maine.......................... 0.7 Vermont...................... 0.4
Maryland....................... 5.6 Virginia..................... 3.9
Massachusetts.................. 3.6 Washington................... 0.7
Michigan....................... 3.8 West Virginia................ 0.3
Minnesota...................... 1.2 Wisconsin.................... 1.4
Mississippi.................... 0.5 Wyoming...................... 0.1
Missouri....................... 3.4 ----
99.9%
====
<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 30.60% of the aggregate principal balance of the
Receivables, constituting 33.06% of the number of the Receivables, represent
previously titled vehicles. Approximately 72.96% 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 Portolio....... 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 Portfolio.. 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 of
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 3.55% of the Receivables represent
contracts with recourse to Dealers.
