CONFORMED COPY
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
October 16, 1998
Date of Report ..............................................................
(Date of earliest event reported)
CHRYSLER FINANCIAL CORPORATION
.............................................................................
(Exact name of registrant as specified in its charter)
State of Michigan 333-31093 38-2997412
.............................................................................
(State or other jurisdiction (Commission) (IRS Employer
of incorporation) File No.) Identification No.)
27777 Franklin Rd., Southfield, Michigan 48034
..............................................
(Address of principal executive offices)
(248) 948-3067
Registrant's telephone number, including area code...........................
This filing relates to Registration Statement No. 333-31093.
<PAGE>
Item 5. Other Events.
-------------
In connection with the proposed offering of Premier Auto Trust
1998-5, Asset Backed Notes, Class A-2, Class A-3, Class A-4 and Class B,
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: October 19, 1998 By: /s/ B.C. Babbish
------------------
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 1998-5 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 Auto Trust 1998-5 Structural and Collateral Materials
<PAGE>
Premier Auto Trust 1998-5
Chrysler Financial Corporation, Seller and Servicer
Subject to Revision
Term Sheet dated October 16, 1998
Issuer .......................Premier Auto Trust 1998-5 (the "Trust" or the
"Issuer").
Seller .......................Chrysler Financial Corporation (the "Seller" or
"CFC").
Servicer .....................CFC (in such capacity, the "Servicer").
Indenture Trustee ............The First National Bank of Chicago, as trustee
under the Indenture (the "Indenture Trustee").
Owner Trustee ................Chase Manhattan Bank Delaware, as trustee
under the Trust Agreement (the "Owner
Trustee").
The Notes ....................(i) Class A-1 _____% Asset Backed Notes (the
"Class A-1 Notes") in the aggregate initial
principal amount of $380,000,000.00. The Class
A-1 Notes are not being offered hereby;
(ii) Class A-2 ____% Asset Backed Notes (the
"Class A-2 Notes") in the aggregate initial
principal amount of $640,000,000.00;
(iii) Class A-3 _____% Asset Backed Notes (the
"Class A-3 Notes") in the aggregate initial
principal amount of $450,000,000.00; and
(iv) Class A-4 _____% Asset Backed Notes (the
"Class A-4 Notes" and, together with the Class
A-1 Notes, Class A-2 Notes and Class A-3 Notes,
the "Notes") in the aggregate initial principal
amount of $214,375,000.00.
The Certificates..............The Trust will also issue Asset Backed
Certificates (the "Certificates" and, together
with the Notes, the "Securities") with an
aggregate initial Certificate Balance of
$65,625,000.00. The Certificates will represent
fractional undivided interests in the Trust and
will be issued pursuant to the Trust Agreement.
The Certificates are not being offered hereby.
The Certificates will not bear interest. No
principal will be paid on the Certificates
until the Notes have been paid in full.
The Receivables...............On the Closing date, the Trust will purchase a
pool of motor vehicle retail installment sale
contracts (the "Receivables")
<PAGE>
having an aggregate principal balance of
approximately $1,802,523,447.71 (the "Initial
Pool Balance") as of October 14, 1998 (the
"Cutoff Date"). The "Pool Balance" will
represent the aggregate principal balance of
the Receivables at the end of a Collection
Period, after giving effect to all payments
received from Obligors, 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.
Terms of the Notes:
A. Distribution Dates.......Payments of interest and principal on the Notes
will be made on the eighth 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 November 9,
1998.
B. Interest Rates ..........The Notes will have fixed interest rates.
C. Interest ................Interest on the outstanding principal amount of
any Class of Notes, other than the Class A-1
Notes, will accrue at the applicable Interest
Rate from the Closing Date (in the case of the
first Distribution Date) or from the eighth day
of the month preceding the month of a
Distribution Date to and including the seventh
day of the month of such Distribution Date
(each, an "Interest Accrual Period"). Interest
on the outstanding principal amount of the
Class A-1 Notes will accrue at the applicable
Interest 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 "Class A-1
Interest Accrual Period"). Interest on each
class of Notes, other than the Class A-1 Notes,
will be calculated on the basis of a 360-day
year consisting of twelve 30-day months.
Interest on the Class A-1 Notes will be
calculated on the basis of the actual number of
days in the Class A-1 Interest Accrual Period
divided by 360.
D. Principal................Except during the Release Period described
below under "Overcollateralization and Release
of Initial Over-collateralization Amount",
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 for that purpose. 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 plus the unpaid
principal
2
<PAGE>
balance of liquidated defaulted Receivables
(i.e., the reduction in the aggregate principal
balance of the Receivables during the
Collection Period). 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, and (d) the
amount, if any, required to be deposited in the
Reserve Account on such Distribution Date.
During the Release Period, the principal of the
Notes payable on each Distribution Date will
equal the Release Period Noteholders' Principal
Distributable Amount described below under
"Overcollateralization and Release of Initial
Overcollateralization Amount".
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 July 1999 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
April 2001 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 July 2002 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 April
2003 Distribution Date (the "Class A-4 Final
Scheduled Distribution Date").
E. Optional Redemption .....The outstanding Class A-4 Notes will be subject
to redemption in whole, but not in part, on any
Distribution Date by the Servicer when the Pool
Balance shall have declined to 10% or less of
the Initial Pool Balance.
Overcollateralization
and Release of Initial
Overcollateralization
Amount......................The Initial Pool Balance, $1,802,523,447.71,
will exceed the $1,750,000,000.00 initial
aggregate principal amount of the Securities
(the "Initial Securities Principal Balance"),
by an amount equal to $52,523,447.71 (the
"Initial
3
<PAGE>
Overcollateralization Amount"), which amount is
approximately 3.00% of the Initial Securities
Principal Balance. Unless offset by losses on
the Receivables or the release of cash during
the Release Period as described below, the
distribution of the Accelerated Principal
Distribution Amount, if any, on a Distribution
Date is expected to cause the aggregate
principal amount of the Notes to decrease
faster than the Pool Balance decreases, thereby
increasing the Overcollateralization Amount.
The "Overcollateralization Amount" in respect
of a Distribution Date is equal to (a) the Pool
Balance as of the end of the related Collection
Period (the "Related Pool Balance") minus (b)
the aggregate outstanding amount of Securities
after giving effect to payments made on the
Securities on such Distribution Date (the
"Securities Amount").
Subject to the conditions set forth below, on
each Distribution Date during the Release
Period (as defined below), the amount of
principal distributable on the Notes will be
the Release Period Noteholders' Principal
Distributable Amount rather than the
Noteholders' Principal Distributable Amount.
The "Release Period Noteholders' Principal
Distributable Amount" shall equal, on any
Distribution Date during the Release Period,
the excess of (a) the Securities Amount on such
Distribution Date (prior to giving effect to
any distributions on such Distribution Date)
over (b) the product of (1) 95.00% and (2) the
Related Pool Balance. The effect of such
requirement is to maintain the
Overcollateralization Percentage at 5.00%
during the Release Period. On each Distribution
Date during the Release Period, any portion of
the Total Distribution Amount which remains
after payment of (a) the Servicing Fee, (b) the
Noteholders' Interest Distributable Amount, (c)
the Release Period Noteholders' Principal
Distributable Amount and (d) any amount
required to increase the amount in the Reserve
Account to the Specified Reserve Amount will be
released to Premier Receivables L.L.C. (the
"Company") (such released amount being the
"Cash Release Amount" or "Cash Release"). The
cumulative amount of all Cash Releases during
the Release Period shall not exceed the Initial
Overcollateralization Amount.
The release of cash to the Company, as
described above is subject to the satisfaction
of all of the following conditions:
(1) no Cash Release will be permitted until the
date (the "First Release Distribution Date")
that is the later of:
(i) the Distribution Date following the
Distribution Date on which the
Overcollateralization Amount is at least
equal to the
4
<PAGE>
[Initial Overcollateralization Amount]
plus
[2% x (Related Pool Balance
for such preceding Distribution Date
minus Initial Overcollateralization
Amount)]; and
(ii) the Distribution Date following the
Distribution Date on which the Class A-1
Notes have been repaid in full;
(2) the amount in the Reserve Account shall be
equal to the Specified Reserve Amount; and
(3) the cumulative amount of the Cash Releases
will not exceed the Initial
Overcollateralization Amount.
On the Distribution Date (the "Last Release
Distribution Date") on which the cumulative
amount of the Cash Releases equals the Initial
Overcollateralization Amount, the amount of
principal distributable to the Noteholders
will be the Noteholders' Principal
Distributable Amount less the Cash Release
Amount released on such Distribution Date. On
each Distribution Date thereafter, the full
Noteholders' Monthly Principal Distributable
Amount will be distributable as principal to
the Noteholders. The "Release Period" is the
period from the First Release Distribution
Date to the Last Release Distribution Date.
Any Cash Release released to the Company will
not be available to make payments on the
Notes.
Reserve Account ...............The "Reserve Account" will be part of the
Collection Account. On the Closing Date cash
or Eligible Investments having a value at
least equal to $4,375,000.00 (the "Specified
Reserve Amount"), which is 0.25% of the
Initial Securities Principal Balance, will be
allocated to the Reserve Account.
Funds will be applied from the Reserve Account
to cover any shortfalls in the amounts due to
the Noteholders. On each Distribution Date,
the Reserve Account will be reinstated up to
the Specified Reserve Amount 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.
Priority of Payments...........Collections in respect of the Receivables for
each Collection Period will generally be
applied in the following order of priority:
(i) the Servicing Fee, together with any
previously unpaid Servicing Fees, to the
Servicer, (ii) interest on the Notes, to the
holders of the Notes, (iii) the Regular
Principal Distribution Amount (or, during the
Release Period, the Release Period
Noteholders' Principal Distributable Amount),
in the priority set forth herein, to the
applicable Noteholders, (iv)
5
<PAGE>
amounts, if any, to the Reserve Account until
it contains the Specified Reserve Amount, (v)
except during the Release Period, the
Accelerated Principal Distribution Amount, to
the applicable Noteholders, (vi) during the
Release Period, the Cash Release Amount, to
the Company, (vii) after the Notes have been
paid in full, to the Certificateholders until
the Certificate Balance has been reduced to
zero and (viii) the remaining balance, if any,
to the Company.
Rating of the Notes ...........The Notes will be rated in the highest
investment rating category by at least two
nationally recognized rating agencies.
6
<PAGE>
The Receivables Pool
As of the Cutoff Date, each Receivable (i) had a principal balance of
at least $300.00 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 10.00% 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 Noteholders 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 1998-5
Composition of the Receivables Pool
Weighted Weighted
Weighted Average Average Average
Average APR of Aggregate Number of Remaining Original Principal
Receivables Principal Balance Receivables Term Term Balance
- -------------- ----------------- ----------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
9.09% $1,802,523,447.71 152,211 49.77 months 54.03 months $11,842.27
</TABLE>
Approximately 80.54% of the aggregate principal balance of the
Receivables, constituting 77.18% of the number of the Receivables, represent
new vehicles, and approximately 19.46% of the aggregate principal balance of
the Receivables, constituting 22.82% of the number of the Receivables,
represent used vehicles. Approximately 86.07% of the aggregate principal
balance of the Receivables represent vehicles manufactured or distributed by
Chrysler and approximately 13.93% of the Initial Pool Balance represents
financing of vehicles manufactured or distributed by vehicle manufacturers
other than Chrysler. All of the Receivables are Simple Interest Receivables.
Approximately 21.24% of the aggregate principal balance of the Receivables
are Fixed Value Receivables.
7
<PAGE>
<TABLE>
<CAPTION>
Premier Auto Trust 1998-5
Distribution by APR of the Receivables Pool
Percent of
Aggregate
Number of Aggregate Principal Principal
APR Range Receivables Balance Balance(1)
--------- ----------- ------------------- ----------
<S> <C> <C> <C>
0.00% to 5.00% .... 15,048 $ 210,882,511.84 11.7%
5.01% to 6.00% .... 9,081 144,648,601.98 8.0
6.01% to 7.00% .... 6,032 52,320,294.71 2.9
7.01% to 8.00% .... 16,429 207,213,981.65 11.5
8.01% to 9.00% .... 23,472 279,842,504.59 15.5
9.01% to 10.00% ... 28,532 304,375,421.01 16.9
10.01% to 11.00% .. 16,373 188,863,023.76 10.5
11.01% to 12.00% .. 11,582 133,974,521.40 7.4
12.01% to 13.00% .. 8,114 92,407,018.50 5.1
13.01% to 14.00% .. 5,561 62,550,145.03 3.5
14.01% to 15.00% .. 3,516 37,373,000.86 2.1
15.01% to 16.00% .. 2,164 23,180,101.52 1.3
16.01% to 17.00% .. 1,781 19,401,637.83 1.1
17.01% to 18.00% .. 2,363 26,069,123.43 1.4
18.01% to 19.00% .. 514 4,461,675.04 0.2
19.01% to 20.00% .. 1,581 14,302,648.86 0.8
Greater than 20.00% 68 657,235.70 0.0
------- ------------------ -----
Totals ............ 152,211 $ 1,802,523,447.71 100.0%
======= ================== =====
<FN>
- ---------------
(1) Percentages may not add to 100.0% because of rounding.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Premier Auto Trust 1998-5
Geographic Distribution of the Receivables Pool(1)(2)
Percent of Percent of
Aggregate Aggregate
Principal Principal
State Balance State Balance
- ----- --------- ----- ----------
<S> <C> <S> <C>
Alabama ............ 0.9% Montana ............ 0.1%
Alaska ............. 0.3 Nebraska ........... 0.7
Arizona ............ 1.2 Nevada ............. 0.5
Arkansas ........... 2.7 New Hampshire ...... 1.1
California ......... 4.8 New Jersey ......... 5.2
Colorado ........... 1.3 New Mexico ......... 0.6
Connecticut ........ 1.2 New York ........... 7.5
Delaware ........... 0.6 North Carolina ..... 2.5
District of Columbia 0.0 North Dakota ....... 0.2
Florida ............ 5.8 Ohio ............... 1.3
Georgia ............ 2.0 Oklahoma ........... 1.4
Hawaii ............. 0.4 Oregon ............. 1.0
Idaho .............. 0.2 Pennsylvania ....... 4.8
Illinois ........... 4.9 Rhode Island ....... 0.3
Indiana ............ 1.9 South Carolina ..... 1.4
Iowa ............... 1.3 South Dakota ....... 0.3
Kansas ............. 1.3 Tennessee .......... 1.2
Kentucky ........... 0.8 Texas .............. 11.6
Louisiana .......... 1.3 Utah ............... 0.2
Maine .............. 0.5 Vermont ............ 0.3
Maryland ........... 7.2 Virginia ........... 4.0
Massachusetts ...... 1.9 Washington ......... 1.2
Michigan ........... 3.0 West Virginia ...... 0.6
Minnesota .......... 1.9 Wisconsin .......... 1.5
Mississippi ........ 0.4 Wyoming ............ 0.1
Missouri ........... 2.7 -----
Total .............. 100.0%
=====
<FN>
- -------------------------------
(1) Based on physical addresses of the dealers originating the receivables.
(2) Percentages may not add to 100.0% because of rounding.
</TABLE>
9
<PAGE>
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. Fixed Value Receivables were first originated
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.
<TABLE>
<CAPTION>
Delinquency Experience(1)
(Dollars in Millions)
At September 30, At December 31,
-------------------------------------------- ---------------------------------------------
1998 1997 1997 1996
-------------------- -------------------- -------------------- ---------------------
Number of Number of Number of Number of
Contracts Amount Contracts Amount Contracts Amount Contracts Amount
--------- ------ --------- ------ --------- ------ --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio ............ 1,786,809 $24,700 1,700,645 $21,749 1,697,755 $21,879 1,679,880 $21,197
Period of Delinquency
31-60 Days ......... 41,473 $ 484 52,839 $ 656 58,421 $ 708 65,297 $ 843
61 Days or More .... 3,935 51 8,202 119 7,360 102 8,175 118
--------- ------- --------- ------- --------- ------- --------- -------
Total Delinquencies .. 45,408 $ 535 61,041 $ 775 65,781 $ 810 73,472 $ 961
========= ======= ========= ======= ========= ======= ========= =======
Total Delinquencies as
a Percent of the
Portfolio .......... 2.54% 2.17% 3.59% 3.56% 3.87% 3.70% 4.37% 4.53%
<CAPTION>
At December 31,
--------------------------------------------------------------------
1995 1994 1993
-------------------- -------------------- --------------------
Number of Number of Number of
Contracts Amount Contracts Amount Contracts Amount
--------- ------ --------- ------ --------- ------
<S> <C> <C> <C> <C> <C> <C>
Portfolio ............ 1,653,533 $20,913 1,444,736 $16,977 1,352,218 $14,116
Period of Delinquency
31-60 Days ......... 55,507 $ 720 25,888 $ 293 16,350 $ 153
61 Days or More .... 6,792 100 2,085 27 1,383 15
--------- ------- --------- ------- --------- -------
Total Delinquencies .. 62,299 $ 820 27,973 $ 320 17,733 $ 168
========= ======= ========= ======= ========= =======
Total Delinquencies as
a Percent of the
Portfolio .......... 3.77% 3.92% 1.94% 1.88% 1.31% 1.19%
<FN>
- --------------------------
(1) All amounts and percentages are based on the gross amount scheduled to
be paid on each contract, including estimated 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>
10
<PAGE>
<TABLE>
<CAPTION>
Credit Loss/Repossession Experience(1)
(Dollars in Millions)
Nine Months
Ended September 30 Year Ended December 31
----------------------- --------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Average Amount Outstanding
During the Period ........... $ 23,214 $ 21,394 $ 21,485 $ 21,062 $ 19,486 $ 15,517 $ 12,882
Average Number of Contracts
Outstanding During
the Period .................. 1,736,375 1,686,274 1,688,525 1,671,405 1,572,963 1,396,497 1,341,084
Percent of Contracts Acquired
During the Period
with Recourse
to the Dealer ............... 8.98% 10.14% 10.91% 9.05% 14.80% 17.00% 16.20%
Repossessions as a Percent of
Average Number of Contracts
Outstanding(2) .............. 2.82% 3.32% 3.40% 3.82% 3.05% 2.36% 2.15%
Net Losses as a Percent of
Liquidations(3)(4) .......... 2.80% 2.98% 3.36% 3.17% 2.25% 1.38% 1.34%
Net Losses as a Percent of
Average Amount
Outstanding(2)(3) ........... 1.41% 1.64% 1.80% 1.68% 1.16% 0.73% 0.75%
<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 nine months ended September
30, 1998 and 1997 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>
Notwithstanding the improvement in credit losses for the nine months
ended September 30, 1998, higher credit losses could be experienced in the
near term. No assurance can be given as to future results.
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 1.64% of the Receivables represent
contracts with recourse to Dealers.
11
