UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the year ended December 29, 1995
-----------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to _________
Commission File Number 0-16312
ML ASSET BACKED CORPORATION
- ---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3433607
- ------------------------------ -------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization Identification No.)
World Financial Center
North Tower
250 Vesey Street - 10 th Flr
New York, New York 10281-1310
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(212) 449-0336
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Number of Shares Outstanding
Title of Each Class as of December 29, 1995
-------------------------- ----------------------------
Common Stock, Par Value 100
$10 per Share
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days: [x] Yes [ ] No.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definite proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
[Not Applicable]
The Registrant had 100 shares of common stock outstanding
(all owned by Merrill Lynch Mortgage Capital Inc.) as of
March 27, 1996.
The Registrant meets the conditions set forth in General
Instruction J(1)(a) and (b) of Form 10-K and is therefore filing
this form with the reduced disclosure format.
<PAGE>
TABLE OF CONTENTS
PART I
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
PART II
Item 5. Market for Registrant's Common Stock
and Related Stockholder Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
PART III
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial
Owners and Management
Item 13. Certain Relationships and Related Transactions
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K
Signatures
<PAGE>
PART I
ITEM 1. BUSINESS
ML Asset Backed Corporation (the "Company"), incorporated
in the State of Delaware on September 22, 1987, is a wholly-
owned, limited purpose subsidiary of Merrill Lynch Mortgage
Capital Inc., which is an indirect, wholly-owned subsidiary of
Merrill Lynch & Co., Inc.
The Company was established for the sole purpose of
engaging in the following activities: (a) issuing, selling,
authorizing and delivering bonds, notes and other evidences of
indebtedness (the "Notes"), (b) acting as settlor or depositor of
trusts formed to issue Notes or to issue participation
certificates (the "Certificates") that are secured or
collateralized by (1) receivables (the "Receivables") including,
without limitation, automobile or marine installment sale
contracts, automobile leases, equipment leases, revolving credit
card accounts, truck receivables, recreational vehicle loans,
manufactured housing loans, student loans and other receivables,
(2) pass-through certificates (the "Pass-Through Certificates")
evidencing a fractional undivided ownership interest in the assets
of one or more trusts or in one or more pools of Receivables, (3)
bonds, notes and other evidences of indebtedness (the "Bonds")
secured or collateralized by one or more pools of Receivables, or
(4) any combination of Receivables, Bonds and Pass-Through
Certificates, (c) acquiring, owning, holding, selling, assigning,
pledging and otherwise dealing with the Receivables and related
insurance policies and agreements, including agreements with
automobile and boat dealers and other originators or servicers of
Receivables, (d) authorizing, issuing, selling and delivering
subordinated indebtedness, and (e) engaging in any activity and
exercising any powers permitted to corporations under the laws of
the State of Delaware that are incidental to the foregoing and
necessary or convenient to accomplish the foregoing.
Each series of the Company's Notes or Certificates will be
secured by, or represent ownership of, a separate and identifiable
pool of Receivables purchased in connection with the issuance of
such Notes or Certificates. Additional security for each series
will be provided by collections and/or distributions on the
Receivables which will be remitted to an account or accounts to be
established with the trustee (the "Trustee") under the indenture,
sale and servicing agreement or other similar agreement pursuant
to which such Notes or Certificates will be issued, and may also
include cash and other investments deposited with the Trustee at
the time of issuance of such Notes or Certificates, as well as
other credit enhancements that may be used to secure or support
the Notes or Certificates. The Receivables for each series of
Notes or Certificates will be pledged with or sold to the Trustee
on behalf of the holders of the Notes or Certificates of that
series, and will not be available for the Notes or Certificates of
any other series. The Company will use the net proceeds from the
sale of the Notes or Certificates to purchase the Receivables to
be pledged as security for, or sold in connection with, the
issuance of such Notes or Certificates, simultaneously with the
issuance of such Notes or Certificates.
At December 29, 1995, $694 million of 5.5% Total Rate of
Return Asset Backed Notes, due May 15, 1998, and $925 million of
5.125% Total Rate of Return Asset Backed Notes, due July 15, 1998,
were outstanding.
Following the issuance of these Notes, the Company
transferred all of its rights in the Collateral for the Notes
(including the Receivables) to trusts, subject to the liens of the
indentures and the rights of the Noteholders thereunder. Upon
such transfers, which were made in accordance with the terms of
the indentures, the trusts assumed the obligations of the Company
under the indentures and the Notes and agreed to hold the Company
harmless from any liability related to such obligations. The
Company will not be discharged under the terms of the indentures
from its liabilities with respect to the Notes until the Notes are
retired.
At December 29, 1995, the Company had two registration
statements on Form S-3 with the Securities and Exchange
Commission for the issuance of approximately $191 million
principal amount of securities.
<PAGE>
ITEM 2. PROPERTIES
The Company does not own any buildings or real estate
and has no physical properties.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any pending legal
proceedings, nor is the Company aware of any
proceedings contemplated by governmental authorities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Pursuant to General Instruction J of Form 10-K, the
information required by item 4 is omitted.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS.
(a) There is no established public trading market for the
Company's common stock.
(b) The number of holders of record as of
December 29, 1995 was as follows:
Number of Record
Holders
Common Stock 1
ML Asset Backed Corporation Total
Rate of Return Asset Backed Notes,
due May 15, 1998 41
ML Asset Backed Corporation Total
Rate of Return Asset Backed Notes,
due July 15, 1998 54
(c) No dividend has been declared during
the fiscal years 1993, 1994, and 1995.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
Pursuant to General Instruction J of Form 10-K, the
information required by item 6 is omitted.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Pursuant to General Instruction J of Form 10-K, there
were no material changes in the financial condition or
in the results of operations.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index Page
Independent Auditors' Report 6
Balance Sheets as of December 29, 1995
and December 30, 1994 7
Statements of Operations and Retained Earnings
for the Years Ended December 29, 1995,
December 30, 1994, and December 31, 1993 8
Statements of Cash Flows for the Years Ended
December 29, 1995, December 30, 1994, and
December 31, 1993 9
Notes to Financial Statements 10-11
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of ML Asset Backed Corporation:
We have audited the accompanying balance sheets of ML Asset
Backed Corporation as of December 29, 1995 and December 30, 1994
and the related statements of operations and retained earnings
and cash flows for each of the three years in the period ended
December 29, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of ML Asset Backed
Corporation at December 29, 1995 and December 30, 1994 and the
results of its operations and its cash flows for each of the
three years in the period ended December 29, 1995 in conformity
with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
New York, New York
March 27, 1996
<PAGE>
<TABLE>
<CAPTION>
ML ASSET BACKED CORPORATION
BALANCE SHEETS
DECEMBER 29, 1995 AND DECEMBER 30, 1994
1995 1994
______ ______
<S> <C> <C>
ASSET
Cash $1,000 $1,000
------ ------
STOCKHOLDER'S EQUITY
Common Stock, $10 par value;
1,000 shares authorized
100 shares issued and outstanding $1,000 $1,000
------ ------
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ML ASSET BACKED CORPORATION
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE YEARS ENDED
DECEMBER 29, 1995, DECEMBER 30, 1994, AND DECEMBER 31, 1993
1995 1994 1993
_____ _____ ____
<S> <C> <C> <C>
Revenues - Interest Income $ - $ - $ -
Expenses - Interest Expense - - -
Earnings Before Taxes - - -
Provision For Income Taxes - - -
Net Earnings - - -
Retained earnings, beginning of year - - -
Retained earnings, end of year $ - $ - $ -
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ML ASSET BACKED CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED
DECEMBER 29, 1995, DECEMBER 30, 1994, AND DECEMBER 31, 1993
1995 1994 1993
_______ ______ _____________
<S> <C> <C> <C>
CASH FLOW FROM OPERATING
ACTIVITIES:
Net earnings $ - $ - $ -
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net proceeds from issuance
of notes - - 1,195,910,000
------ ------ ---------------
CASH PROVIDED BY FINANCING
ACTIVITIES - - 1,195,910,000
------ ------ ---------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net payments for purchases
of receivables - - (1,195,910,000)
------ ------ ---------------
CASH USED IN INVESTING
ACTIVITIES - - (1,195,910,000)
------ ------ ---------------
CHANGE IN CASH - - -
CASH, BEGINNING OF YEAR 1,000 1,000 1,000
------ ------ ---------------
CASH, END OF YEAR $1,000 $1,000 $ 1,000
------ ------ ---------------
SUPPLEMENTAL INFORMATION:
Cash payments for interest $ - $ - $ -
------ ------ ---------------
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<PAGE>
ML ASSET BACKED CORPORATION
NOTES TO FINANCIAL STATEMENTS
Note 1. Description of Business
ML Asset Backed Corporation (the "Company"), incorporated
in the State of Delaware on September 22, 1987, is a wholly-
owned, limited purpose subsidiary of Merrill Lynch Mortgage
Capital Inc., which is an indirect, wholly-owned subsidiary of
Merrill Lynch & Co., Inc. ("ML&Co.").
The Company was established for the sole purpose of
engaging in the following activities: (a) issuing, selling,
authorizing and delivering bonds, notes and other evidences of
indebtedness (the "Notes"), (b) acting as settlor or depositor of
trusts formed to issue Notes or to issue participation
certificates (the "Certificates") that are secured or
collateralized by (1) receivables (the "Receivables") including,
without limitation, automobile or marine installment sale
contracts, automobile leases, equipment leases, revolving credit
card accounts, truck receivables, recreational vehicle loans,
manufactured housing loans, student loans and other receivables,
(2) pass-through certificates (the "Pass-Through Certificates")
evidencing a fractional undivided ownership interest in the assets
of one or more trusts or in one or more pools of Receivables, (3)
bonds, notes and other evidences of indebtedness (the "Bonds")
secured or collateralized by one or more pools of Receivables, or
(4) any combination of Receivables, Bonds and Pass-Through
Certificates, (c) acquiring, owning, holding, selling, assigning,
pledging and otherwise dealing with the Receivables and related
insurance policies and agreements, including agreements with
automobile and boat dealers and other originators or servicers of
Receivables, (d) authorizing, issuing, selling and delivering
subordinated indebtedness, and (e) engaging in any activity and
exercising any powers permitted to corporations under the laws of
the State of Delaware that are incidental to the foregoing and
necessary or convenient to accomplish the foregoing.
Each series of the Company's Notes or Certificates will be
secured by, or represent ownership of, a separate and identifiable
pool of Receivables purchased in connection with the issuance of
such Notes or Certificates. Additional security for each series
will be provided by collections and/or distributions on the
Receivables which will be remitted to an account or accounts to be
established with the trustee (the "Trustee") under the indenture,
sale and servicing agreement or other similar agreement pursuant
to which such Notes or Certificates will be issued, and may also
include cash and other investments deposited with the Trustee at
the time of issuance of such Notes or Certificates, as well as
other credit enhancements that may be used to secure or support
the Notes or Certificates. The Receivables for each series of
Notes or Certificates will be pledged with or sold to the Trustee
on behalf of the holders of the Notes or Certificates of that
series, and will not be available for the Notes or Certificates of
any other series. The Company will use the net proceeds from the
sale of the Notes or Certificates to purchase the Receivables to
be pledged as security for, or sold in connection with, the
issuance of such Notes or Certificates, simultaneously with the
issuance of such Notes or Certificates.
At December 29, 1995, $694 million of 5.5% Total Rate of
Return Asset Backed Notes, due May 15, 1998, and $925 million of
5.125% Total Rate of Return Asset Backed Notes, due July 15, 1998,
were outstanding.
<PAGE>
Following the issuance of these Notes, the Company
transferred all of its rights in the Collateral for the Notes
(including the Receivables) to trusts, subject to the liens of the
indentures and the rights of the Noteholders thereunder. Upon
such transfers, which were made in accordance with the terms of
the indentures, the trusts assumed the obligations of the Company
under the indentures and the Notes and agreed to hold the Company
harmless from any liability related to such obligations. The
Company will not be discharged under the terms of the indentures
from its liabilities with respect to the Notes until the Notes are
retired.
At December 29, 1995, the Company had two registration
statements on Form S-3 with the Securities and Exchange
Commission for the issuance of approximately $191 million
principal amount of securities.
Note 2. Accounting Policies
The Company borrows funds from an affiliate, as required.
Interest expense is allocated to the Company based on the rate of
the asset financed. All other operating expenses are charged
directly to the Parent.
Note 3. Income Taxes
The results of operations of the Company are included in
the consolidated Federal tax return of ML&Co. ML&Co. allocates
the income taxes to its subsidiaries in a manner that approximates
the separate company method.
The Company uses the asset and liability method in
providing income taxes on all transactions that have been
recognized in the financial statements. The asset and liability
method requires that deferred taxes be adjusted to reflect the
tax rates at which future taxable amounts will be settled or
realized. The effect of tax rate changes on future deferred tax
liabilities and deferred tax assets, as well as other changes in
income tax laws, are recognized in net earnings in the period
such changes are enacted.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction J of Form 10-K, the
information required by item 10 is omitted.
ITEM 11. EXECUTIVE COMPENSATION
Pursuant to General Instruction J of Form 10-K, the
information required by item 11 is omitted.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
<TABLE>
<CAPTION>
(a) The following information is furnished as of
December 29, 1995 with regard to each holder of record
of more than 5%.
Original Face
Amount of % of
Certificates Certificates
(in $000's)
------------- ------------
Name and Address of Holder
ML Asset Backed Corporation Total Rate of Return
Asset Backed Notes, due July 15, 1998
- ------------------------------------------------
<S> <C> <C>
Bank of New York 63,750 6.89
c/o DTC
SSB-BK PFL 89,455 9.67
c/o DTC
Citibank 66,605 7.20
c/o DTC
Chemical Bank 122,250 13.22
c/o DTC
FTB/Teach 68,125 7.36
c/o DTC
Bankers Trust 51,250 5.54
c/o DTC
Chase Manhattan 170,000 18.38
c/o DTC
<PAGE>
<CAPTION>
ML Asset Backed Corporation Total Rate of Return
Asset Backed Notes, due May 15, 1998
- ------------------------------------------------
<S> <C> <C>
Bankers Trust 45,760 6.60
c/o DTC
Chemical Bank 84,470 12.18
c/o DTC
Chase Manhattan 137,140 19.78
c/o DTC
FTB/Teach 101,000 14.56
c/o DTC
SSB-BK PFL 87,685 12.64
c/o DTC
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to General Instruction J of Form 10-K, the
information required by item 13 is omitted.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
(a) 1. See index in Item 8 appearing on page 5.
2. Not applicable.
3. Exhibits:
(3) (i) Certificate of Incorporation of
the Company (Incorporated by reference to
Form 10, dated October 16, 1987).
(3) (ii) Amendment to the Certificate of
Incorporation of the Company (Incorporated
by reference to Form 10, dated October 16, 1987).
(3) (iii) By-Laws of the Company (Incorporated
by reference to Form 10, dated October 16, 1987).
(23) Independent Auditors' Consent.
(b) Reports on Form 8-K relating to the trust have been
filed during the last quarter of the period covered
by this report as follows: December 1, 1995.
(c) Not applicable.
(d) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ML ASSET BACKED CORPORATION
By: /s/ Richard M. Fuscone
Name: Richard M. Fuscone
Title: President and Chairman of the Board
Dated: March 27, 1996
Pursuant to the requirement of the Securities Exchange Act of
1934, this report has been executed below by the following
persons on behalf of the Registrant and in the capacities and on
the date indicated.
By: /s/ Daniel Pace
Name: Daniel Pace
Title: Treasurer
Date: March 27, 1996
By: /s/ Michael M. McGovern
Name: Michael M. McGovern
Title: Secretary
Date: March 27, 1996
<PAGE>
EXHIBITS INDEX PAGE NO.
(23) Independent Auditors' Consent 17
(27) Financial Data Schedule 18
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statements No. 33-53394 and No. 33-55648 on Form S-3 of our
report dated March 27, 1996 appearing in this Annual Report on
Form 10-K of ML Asset Backed Corporation for the year ended
December 29, 1995.
/s/ Deloitte & Touche LLP
New York, New York
March 27, 1996
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
DECEMBER 29, 1995 FORM 10K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000822760
<NAME> ML ASSET BACKED CORPORATION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-29-1995
<PERIOD-END> DEC-29-1995
<CASH> 1000
<RECEIVABLES> 0
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 0
<INSTRUMENTS-OWNED> 0
<PP&E> 0
<TOTAL-ASSETS> 1000
<SHORT-TERM> 0
<PAYABLES> 0
<REPOS-SOLD> 0
<SECURITIES-LOANED> 0
<INSTRUMENTS-SOLD> 0
<LONG-TERM> 0
0
0
<COMMON> 1000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1000
<TRADING-REVENUE> 0
<INTEREST-DIVIDENDS> 0
<COMMISSIONS> 0
<INVESTMENT-BANKING-REVENUES> 0
<FEE-REVENUE> 0
<INTEREST-EXPENSE> 0
<COMPENSATION> 0
<INCOME-PRETAX> 0
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
