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
Date of Report: October 28, 1998
(Date of earliest event reported)
Commission File No. 333-51375
PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV (as depositor under the Sale and
Servicing Agreement, dated as of November 1, 1998, relating to the Empire
Funding Home Loan Owner Trust 1998-3, Home Loan Asset Backed Notes, Series
1998-3)
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PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV
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Delaware 06-1204982
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(State of Incorporation) (I.R.S. Employer Identification No.)
1285 Avenue of the Americas
New York, New York 10019
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Address of principal executive offices (Zip Code)
(212) 713-2000
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Registrant's Telephone Number, including area code
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(Former name, former address and former fiscal year,
if changed since last report)
<PAGE>
ITEM 5. Other Events
Attached as an exhibit are certain Structural Term Sheets, Collateral Term
Sheets and Computational Materials (as such terms are defined in the no-action
letter dated May 20, 1994 issued by the Securities and Exchange Commission to
Kidder, Peabody Acceptance Corporation-I, Kidder, Peabody & Co. Incorporated and
Kidder Structured Asset Corporation (the "Kidder Letter") as modified by a
no-action letter (the "First PSA No-Action Letter") issued by the staff of the
Commission on May 27, 1994 to the Public Securities Association (the "PSA") and
as further modified by a no-action letter (the "Second PSA No-Action Letter")
issued by the staff of the Commission on March 9, 1995 to the PSA) prepared by
PaineWebber Incorporated, which are hereby filed pursuant to such letter.
<PAGE>
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
Item 601(a)
of Regulation S-K
Exhibit No. Description
- ----------- -----------
(99) Structural Term Sheets, Collateral
Term Sheets and Computational
Materials prepared by PaineWebber
Incorporated in connection with
Empire Funding Home Loan Owner
Trust 1998-3, Home Loan Asset
Backed Notes, Series 1998-3
<PAGE>
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.
PAINEWEBBER MORTGAGE ACCEPTANCE
CORPORATION IV
October 30, 1998
By: /s/ Barbara Dawson
-------------------------------
Name: Barbara Dawson
Title: Senior Vice President
<PAGE>
INDEX TO EXHIBITS
-----------------
Paper (P) or
Exhibit No. Description Electronic (E)
- ----------- ----------- --------------
(99) Structural Term Sheets, Collateral E
Term Sheets and Computational
Materials prepared by PaineWebber
Incorporated in connection with
Empire Funding Home Loan Owner
Trust 1998-3, Home Loan Asset
Backed Notes, Series 1998-3
PAINEWEBBER INCORPORATED
PRELIMINARY BACKGROUND INFORMATION
EMPIRE FUNDING HOME LOAN OWNER TRUST 1998-3
DISCLAIMER
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The information included herein is produced and provided exclusively by
PaineWebber Incorporated ('PW') as underwriter for the Empire Funding Home Loan
Owner Trust 1998-3, and not by or as agent for Empire Funding Corp. or any of
its affiliates (collectively, the 'Transferor'). The Transferor has not
prepared, reviewed or participated in the preparation hereof, is not responsible
for the accuracy hereof and has not authorized the dissemination hereof. The
analysis in this report is accurate to the best of PW's knowledge and is based
on information provided by the Transferor. PW makes no representations as to the
accuracy of such information provided by the Transferor. The information herein
is preliminary, and will be superseded by the applicable prospectus supplement
and prospectus and by any other information subsequently filed with the
Securities and Exchange Commission.
All opinions and conclusions in this report reflect PW's judgment as of this
date and are subject to change. All analyses are based on certain assumptions
noted herein and different assumptions could yield substantially different
results. You are cautioned that there is no universally accepted method for
analyzing financial instruments. You should review the assumptions; there may be
differences between these assumptions and your actual business practices.
Further, PW does not guarantee any results and there is no guarantee as to the
liquidity of the instruments involved in this analysis. The decision to adopt
any strategy remains your responsibility. PW (or any of its affiliates) or their
officers, directors, analysts or employees may have positions in securities,
commodities or derivative instruments thereon referred to herein, and may, as
principal or agent, buy or sell such securities, commodities or derivative
instruments. In addition, PW may make a market in the securities referred to
herein. Neither the information nor the opinions expressed shall be construed to
be, or constitute, an offer to sell or buy or a solicitation of an offer to sell
or buy any securities, commodities or derivative instruments mentioned herein.
Finally, PW has not addressed the legal, accounting and tax implications of the
analysis with respect to you and PW strongly urges you to seek advice from your
counsel, accountant and tax advisor.
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<PAGE>
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EMPIRE FUNDING HOME LOAN OWNER TRUST 1998-3
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Page 2
DESCRIPTION OF INITIAL LOANS AS OF THE STATISTICAL CALCULATION DATE:
Approximate characteristics of the pool of Initial Loans identified as of
September 30, 1998. Loans equal to approximately $300.0 Million will be
delivered on the Closing Date.
Total Number of Initial Loans: 6,396
Current Principal Balance: $203,728,616
Average Loan Balance: $31,853
WA Loan Rate: 13.57%
WA Original Term (months): 234
WA Remaining Term (months): 231
WA Seasoning (months): 3
WA FICO Score: 684
WA Debt-to-Income 33.58%
WA Original Combined LTV
(Mortgage Loans Only): 116.74%
As of the Statistical Calculation Date, none of the Initial Loans were more than
30 days late.
Note: Additional information regarding the Initial Loans as of the Statistical
Calculation Date can be found starting on page 8.
<PAGE>
Page 3
PRICING INFORMATION (TO 10% CALL) (a)
<TABLE>
<CAPTION>
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First Final
Approximate WAL Principal Principal Principal Stated Expected
Class Size (b) Coupon (c) (Years) Payment Payment Window Maturity Ratings
(Mos) (Mos) (Mos) (S&P/Moodys)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A 283,580,654 6.75% 4.21 1 134 134 11/25/24 AAA/Aaa
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes: (a) 100% Prepayment Assumption: 0% CPR in month 1, ramping up to
16% in month 15. On and after month 15, 16% CPR.
(b) Subject to a permitted variance of 5%.
(c) Coupon will be increased by [0.50%] for each payment after the
Initial Call Date.
Pricing Speed: 0% CPR, increasing to 16% over 15 months.
Payment Date: The 25th of each month or, if such day is not a
Business Day, the next succeeding Business Day,
commencing in December 1998.
Settlement Date: On or about [November 5, 1998]
Cut-off Date: The close of business on October 31, 1998.
Because the bonds will be settling flat, only
approximately 86.66% of the collateral interest
payments collected during October will be
deposited into the Trust, the remaining 13.33%
will be retained by Empire.
Payment Delay: 24 Days
Payment Terms: Monthly
Interest Accrual Interest will accrue on the Notes at a fixed rate
Period: during the month prior to the month of the related
Payment Date (from and including the Closing Date
until the end of the month prior to the month of
the related distribution in the case of the first
Payment Date) based on a 30/360 day year.
<PAGE>
DESCRIPTION OF SECURITIES
Title of Securities: Empire Funding Home Loan Owner Trust 1998-3
Underlying Collateral: The Notes will be secured, in part, by
debt consolidation, home improvement, and other
primarily second lien home equity loans, with
combined loan to value ratios generally in excess
of 100%, as well as unsecured loans, representing
approximately 1.63% of the Original Pool Principal
Balance. Statistical Calculation Date: The
statistical information presented herein and in
the Prospectus Supplement concerning the Initial
Loans is based on the characteristics of a portion
of the Initial Loans identified as of September
30, 1998 (the "Statistical Calculation Date").
Empire expects that the actual aggregate balance
of the Initial Loans as of the Cut-off Date (to be
identified prior to the Closing Date) will equal
approximately $[300.0] Million.
Transferor/Servicer: Empire Funding Corp.
Master Servicer: Norwest Bank Minnesota, National Association,
which will be responsible for monitoring the
servicing functions of Empire Funding Corp.
Sole Underwriter: PaineWebber Incorporated
Depositor: PaineWebber Mortgage Acceptance Corporation IV
Indenture Trustee U.S. Bank National Association, d/b/a
and Grantor Trustee: First Bank National Association
Owner Trustee: Wilmington Trust Company
Offering: Public shelf offering - a prospectus and
prospectus supplement will be distributed after
pricing.
Offered Notes: Only the Notes are being offered hereby. The
Residual Interest Certificates are NOT being
offered publicly.
Form of Offering: Book-Entry form, same-day funds through DTC for
all of the Notes.
Denominations: The Notes are issueable in minimum denominations
of an original amount of $25,000 and multiples of
$1,000 thereafter.
<PAGE>
DESCRIPTION OF SECURITIES (Continued)
Credit Enhancement: Credit enhancement with respect to the Offered
Notes will be provided by (1) the MBIA Insurance
Policy, (2) Excess Interest, (3)
Overcollateralization, and (4) the subordination
of the rights of holders of the Residual Interest
Certificate.
MBIA Guaranty: MBIA (the "Note Insurer") will unconditionally and
irrevocably guarantee the timely payment of
interest and ultimate payment of principal on the
Notes (i.e. after any losses reduce the
overcollateralization to zero, MBIA will cover the
excess, if any, of the Note principal balance over
the aggregate collateral balance). The Insured
Payments do not cover Realized Losses except to
the extent that an Overcollateralization Deficit
exists. The Insurance Policy is not cancelable for
any reason.
Excess Interest: The weighted average coupon rate on the
loans is generally expected to be higher than the
sum of the master servicing fee, the servicing
fee, the trustee fee, and the pass through rate on
the Notes, thus generating excess interest
collections which will be available to fund
payments on the Notes on each Payment Date.
Overcollateralization: Excess Interest will be applied, to the extent
available, to make accelerated payments of
principal to the Notes then entitled to receive
payments of principal; such application will cause
the aggregate principal balance of the Notes to
amortize more rapidly than the loans. Subject to
certain floors, caps and triggers, the required
level of overcollateralization may increase or
decrease over time.
Subordination: The rights of the Residual Interest
Certificateholders to receive distributions on
each Payment Date will be subordinate to those of
the Noteholders.
<PAGE>
DESCRIPTION OF SECURITIES (Continued)
Optional Termination: The holders of an aggregate percentage interest in
the Residual Interest Certificates in excess of
50% may, at their option, effect an early
termination of the Grantor Trust on or after any
Payment Date on which the Pool Principal Balance
declines to 10% or less of the Original Pool
Principal Balance, by purchasing all of the Loans
at a price equal to or greater than the
Termination Price. Additionally, the Insurer
and/or Master Servicer will have a call of [either
10% or 5%].
Servicing/Other Fees: The collateral is subject to certain fees,
including a master servicing fee of [0.045]% per
annum payable monthly, a servicing fee equal to
[0.75]% per annum payable monthly and trustee's
fees equal to [0.0067]% per annum.
Advancing by Servicer: There is no required advancing of delinquent
principal or interest by the Master Servicer, the
Servicer or Indenture Trustee.
Tax Considerations: The issuer will be an Owner Trust. The Offered
Notes will be characterized as debt for federal
income tax purposes.
ERISA Considerations: In general, the Offered Notes will be ERISA
eligible. However, investors should consult with
their counsel with respect to the consequences
under ERISA and the Internal Revenue Code of the
Plan's acquisition and ownership of such
certificates.
SMMEA Eligibility: NONE of the Notes will be SMMEA-eligible.
Prospectus: The Offered Notes are being offered pursuant to a
Prospectus which includes a Prospectus Supplement
(together, the 'Prospectus'). Complete information
with respect to the Offered Notes and the
collateral is contained in the Prospectus. The
material presented herein is qualified in its
entirety by the information appearing in the
Prospectus. To the extent that the foregoing is
inconsistent with the Prospectus, the Prospectus
shall govern in all respects. Sales of the Offered
Notes may not be consummated unless the purchaser
has received the Prospectus.
<PAGE>
DESCRIPTION OF INITIAL LOANS AS OF STATISTICAL CALCULATION DATE
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AGGREGATE FIELD DESCRIPTION COUNT BALANCE ($) `POOL (%)
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State California 672 24,459,456 12.01
Indiana 370 12,093,797 5.94
Illinois 357 11,888,141 5.84
Florida 339 10,530,797 5.17
Missouri 317 9,346,562 4.59
Ohio 298 9,058,436 4.45
Pennsylvania 257 8,415,644 4.13
Michigan 238 8,068,470 3.96
Arizona 243 7,871,624 3.86
Maryland 194 7,561,206 3.71
North Carolina 225 7,051,048 3.46
Virginia 197 6,947,010 3.41
Georgia 203 6,806,913 3.34
Colorado 154 5,108,787 2.51
Washington 158 4,908,895 2.41
Kentucky 162 4,839,103 2.38
Minnesota 135 4,739,539 2.33
Kansas 147 4,735,244 2.32
Wisconsin 130 4,254,112 2.09
Oklahoma 165 4,181,705 2.05
Nevada 116 3,950,101 1.94
New Jersey 99 3,561,786 1.75
Iowa 105 3,552,557 1.74
Louisiana 99 2,913,641 1.43
South Carolina 78 2,324,486 1.14
Nebraska 81 2,303,074 1.13
Idaho 72 2,194,016 1.08
Massachusetts 50 1,979,670 0.97
Utah 59 1,978,276 0.97
Texas 217 1,788,086 0.88
Connecticut 49 1,781,933 0.87
Tennessee 74 1,605,697 0.79
New Mexico 44 1,532,743 0.75
Oregon 48 1,407,458 0.69
New York 40 1,379,945 0.68
Mississippi 44 1,096,826 0.54
New Hampshire 24 928,793 0.46
Hawaii 18 724,315 0.36
Maine 20 660,865 0.32
Alaska 13 556,705 0.27
Delaware 13 454,023 0.22
Wyoming 13 406,936 0.20
Montana 12 376,421 0.18
Arkansas 14 365,938 0.18
Rhode Island 8 284,052 0.14
North Dakota 7 227,548 0.11
West Virginia 9 211,149 0.10
South Dakota 4 166,425 0.08
Vermont 3 112,935 0.06
District of Columbia 2 35,730 0.02
------ ----------- ------
6,396 $203,728,616 100.00%
<PAGE>
DESCRIPTION OF INITIAL LOANS AS OF STATISTICAL CALCULATION DATE
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AGGREGATE FIELD DESCRIPTION COUNT BALANCE ($) POOL (%)
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Current Balance $10,000 or less 455 2,614,050 1.28
$10,000.01 - $20,000 845 14,122,356 6.93
$20,000.01 - $30,000 2,022 52,274,527 25.66
$30,000.01 - $40,000 1,629 56,950,039 27.95
$40,000.01 - $50,000 808 36,815,092 18.07
$50,000.01 - $60,000 283 15,774,455 7.74
$60,000.01 - $70,000 213 13,713,681 6.73
$70,000.01 - $80,000 92 6,855,124 3.36
$80,000.01 or greater 49 4,609,294 2.26
------ ----------- ------
6,396 $203,728,616 100.00%
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AGGREGATE FIELD DESCRIPTION COUNT BALANCE ($) POOL (%)
- --------------------------------------------------------------------------------
Current Rate 9.001% - 9.500% 1 3,316 0.00
9.501% - 10.000% 6 71,365 0.04
10.001% - 10.500% 11 308,853 0.15
10.501% - 11.000% 70 2,761,234 1.36
11.001% - 11.500% 527 20,112,314 9.87
11.501% - 12.000% 533 20,803,988 10.21
12.001% - 12.500% 360 11,390,974 5.59
12.501% - 13.000% 1,146 33,090,036 16.24
13.001% - 13.500% 464 15,975,382 7.84
13.501% - 14.000% 1,348 42,340,731 20.78
14.001% - 14.500% 388 12,041,050 5.91
14.501% - 15.000% 505 15,343,898 7.53
15.001% - 15.500% 177 5,716,208 2.81
15.501% - 16.000% 317 9,255,273 4.54
16.001% - 16.500% 249 6,908,603 3.39
16.501% - 17.000% 154 4,063,439 1.99
17.001% - 17.500% 52 1,266,845 0.62
17.501% - 18.000% 66 1,712,821 0.84
18.001% - 18.500% 20 529,803 0.26
18.501% - 19.000% 1 29,819 0.01
19.001% - 19.500% 1 2,664 0.00
------ ----------- ------
6,396 $203,728,616 100.00%
<PAGE>
DESCRIPTION OF INITIAL LOANS AS OF STATISTICAL CALCULATION DATE
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AGGREGATE FIELD DESCRIPTION COUNT BALANCE ($) POOL (%)
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Lien Type First Lien 23 798,234 0.39
Second Lien 5,874 199,608,139 97.98
Third Lien 1 2,664 0.00
Unsecured 498 3,319,579 1.63
------ ----------- ------
6,396 $203,728,616 100.00%
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AGGREGATE FIELD DESCRIPTION COUNT BALANCE ($) POOL (%)
- --------------------------------------------------------------------------------
Combined LTV Unsecured 498 3,319,579 1.63
5.01% to 10.00% 1 9,636 0.00
10.01% to 15.00% 1 4,938 0.00
15.01% to 20.00% 3 58,836 0.03
20.01% to 25.00% 1 10,675 0.01
25.01% to 30.00% 4 50,050 0.02
30.01% to 35.00% 4 119,257 0.06
35.01% to 40.00% 7 148,552 0.07
40.01% to 45.00% 6 173,645 0.09
45.01% to 50.00% 6 132,313 0.06
50.01% to 55.00% 2 67,792 0.03
55.01% to 60.00% 1 25,965 0.01
60.01% to 65.00% 3 57,850 0.03
75.01% to 80.00% 1 10,901 0.01
85.01% to 90.00% 4 123,818 0.06
90.01% to 95.00% 6 184,311 0.09
95.01% to 100.00% 11 326,007 0.16
100.01% to 105.00% 464 14,048,209 6.90
105.01% to 110.00% 774 23,973,887 11.77
110.01% to 115.00% 1,152 36,821,232 18.07
115.01% to 120.00% 1,314 45,381,599 22.28
120.01% to 125.00% 2,117 78,063,431 38.32
125.01% or greater 16 616,133 0.30
------ ----------- ------
6,396 $203,728,616 100.00%
<PAGE>
DESCRIPTION OF INITIAL LOANS AS OF STATISTICAL CALCULATION DATE
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AGGREGATE FIELD DESCRIPTION COUNT BALANCE ($) POOL (%)
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Seasoning Less than one 876 30,476,038 14.96
1 - 3 4,353 145,662,503 71.50
4 - 6 590 16,352,537 8.03
7 - 9 386 6,128,952 3.01
10 or greater 191 5,108,587 2.51
------ ----------- ------
6,396 $203,728,616 100.00%
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AGGREGATE FIELD DESCRIPTION COUNT BALANCE ($) POOL (%)
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Remaining Term 0 - 30 36 118,671 0.06
31 - 60 178 1,030,920 0.51
61 - 90 78 690,863 0.34
91 - 120 786 16,522,738 8.11
121 - 150 40 1,205,481 0.59
151 - 180 2,074 65,872,833 32.33
181 - 210 4 178,580 0.09
211 - 240 986 33,525,084 16.46
271 - 300 2,214 84,583,448 41.52
------ ----------- ------
6,396 $203,728,616 100.00%
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AGGREGATE FIELD DESCRIPTION COUNT BALANCE ($) POOL (%)
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Original Term 0 - 30 7 15,910 0.01
31 - 60 206 1,108,963 0.54
61 - 90 66 619,549 0.30
91 - 120 799 16,618,768 8.16
121 - 150 40 1,205,481 0.59
151 - 180 2,074 65,872,833 32.33
181 - 210 4 178,580 0.09
211 - 240 986 33,525,084 16.46
271 - 300 2,214 84,583,448 41.52
------ ----------- ------
6,396 $203,728,616 100.00%
<PAGE>
DESCRIPTION OF INITIAL LOANS AS OF STATISTICAL CALCULATION DATE
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AGGREGATE FIELD DESCRIPTION COUNT BALANCE ($) POOL (%)
- --------------------------------------------------------------------------------
Credit Risk 620 to 639 351 9,267,250 4.55
640 to 659 1,474 43,233,486 21.22
660 to 679 1,369 44,322,281 21.76
680 to 699 1,230 41,927,333 20.58
700 to 719 1,004 37,151,679 18.24
720 to 739 522 16,804,270 8.25
740 to 759 261 7,715,798 3.79
760 to 779 120 2,517,169 1.24
780 to 799 47 586,894 0.29
800 to 819 17 195,299 0.10
820 to 839 1 7,158 0.00
------ ----------- ------
6,396 $203,728,616 100.00%
- --------------------------------------------------------------------------------
AGGREGATE FIELD DESCRIPTION COUNT BALANCE ($) POOL (%)
- --------------------------------------------------------------------------------
Debt-to-Income Ratio 20.00 or less 308 7,067,979 3.47
20.01 to 25.00 682 20,486,681 10.06
25.01 to 30.00 1,467 47,059,169 23.10
30.01 to 35.00 1,289 41,299,955 20.27
35.01 to 40.00 1,473 47,170,063 23.15
40.01 to 45.00 1,058 36,646,603 17.99
45.01 to 50.00 114 3,845,300 1.89
Greater than 50.00 5 152,866 0.08
------ ----------- ------
6,396 $203,728,616 100.00%
<PAGE>
THE FOLLOWING TABLE RUNS TO CALL:
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0% 50% 75% 100% 125% 150%
- --------------------------------------------------------------------------------
AVG LIFE 12.03 6.50 5.12 4.21 3.54 3.05
YIELD @ 100 6.78% 6.75% 6.73% 6.71% 6.69% 6.67%
DURATION 7.34 4.65 3.88 3.32 2.89 2.55
FIRST PAY 12/98 12/98 12/98 12/98 12/98 12/98
LAST PAY 11/21 02/15 12/11 01/10 04/08 12/06
WINDOW 23.00 16.25 13.08 11.17 9.42 8.08
(YEARS)
THE FOLLOWING TABLE RUNS TO MATURITY:
- --------------------------------------------------------------------------------
0% 50% 75% 100% 125% 150%
- --------------------------------------------------------------------------------
AVG LIFE 12.10 6.77 5.39 4.43 3.74 3.23
YIELD @ 100 6.79% 6.76% 6.74% 6.73% 6.71% 6.69%
DURATION 7.36 4.73 3.97 3.41 2.98 2.64
FIRST PAY 12/98 12/98 12/98 12/98 12/98 12/98
LAST PAY 07/23 06/22 08/20 12/17 06/15 02/13
WINDOW 24.67 23.58 21.75 19.08 16.58 14.25
(YEARS)
