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 27, 1996
-----------------
[ ] 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 - 23rd Flr
New York, New York 10281-1323
(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 27, 1996
-------------------------- ----------------------------
Common Stock, Par Value 100
$10 per Share
<PAGE>
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 25, 1997.
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 1
<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 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
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
Page 2
<PAGE>
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 simultaneously purchase the Receivables to
be pledged as security for, or sold in connection with, the issuance
of such Notes or Certificates.
During 1996, $694 million of 5.5% Total Rate of Return Asset
Backed Notes, due May 15, 1998, and $925 million of 5.125% Total
Rate Asset Backed Notes, due July 15, 1998, were retired. As of
December 27, 1996, there were no notes outstanding.
At December 27, 1996, the Company had two registration
statements on Form S-3 with the Securities and Exchange Commission
for the issuance of approximately $191 million of securities.
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.
Page 3
<PAGE>
(b) The number of holders of record as of
December 27, 1996 was as follows:
Number of Record
Holders
----------------
Common Stock 1
(c) No dividend has been declared during
the fiscal years 1994, 1995, and 1996.
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 5
Balance Sheets as of December 27, 1996
and December 29, 1995 6
Statements of Operations and Retained Earnings
for the Years Ended December 27, 1996,
December 29, 1995, and December 30, 1994 7
Statements of Cash Flows for the Years Ended
December 27, 1996, December 29, 1995, and
December 30, 1994 8
Notes to Financial Statements 9-10
Page 4
<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 27, 1996 and December 29, 1995
and the related statements of operations and retained earnings
and cash flows for each of the three years in the period ended
December 27, 1996. 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 27, 1996 and December 29, 1995 and the
results of its operations and its cash flows for each of the
three years in the period ended December 27, 1996 in conformity
with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
New York, New York
March 25, 1997
Page 5
<PAGE>
<TABLE>
<CAPTION>
ML ASSET BACKED CORPORATION
BALANCE SHEETS
AS OF DECEMBER 27, 1996 AND DECEMBER 29, 1995
1996 1995
______ ______
<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 6
<PAGE>
<TABLE>
<CAPTION>
ML ASSET BACKED CORPORATION
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE YEARS ENDED
DECEMBER 27, 1996, DECEMBER 29, 1995, AND DECEMBER 30, 1994
1996 1995 1994
_____ _____ _____
<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 7
<PAGE>
<TABLE>
<CAPTION>
ML ASSET BACKED CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED
DECEMBER 27, 1996, DECEMBER 29, 1995, AND DECEMBER 30, 1994
1996 1995 1994
______ ______ ______
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net earnings $ - $ - $ -
CASH FLOWS FROM FINANCING ACTIVITIES - - -
CASH FLOWS FROM INVESTING ACTIVITIES - - -
------ ------ ------
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 and taxes $ - $ - $ -
------ ------ ------
The accompanying notes are an integral part of these financial
statements.
</TABLE>
Page 8
<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 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
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
Page 9
<PAGE>
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 simultaneously purchase the Receivables to be pledged
as security for, or sold in connection with, the issuance of such
Notes or Certificates.
During 1996, $694 million of 5.5% Total Rate of Return Asset
Backed Notes, due May 15, 1998, and $925 million of 5.125% Total
Rate Asset Backed Notes, due July 15, 1998, were retired. As of
December 27, 1996, there were no notes outstanding.
At December 27, 1996, the Company had two registration
statements on Form S-3 with the Securities and Exchange Commission
for the issuance of approximately $191 million 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 income 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 effects 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 10
<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
There were no notes outstanding at December 27, 1996.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to General Instruction J of Form 10-K, the
information required by item 13 is omitted.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 15
(a) 1. See index in Item 8 appearing on page 4.
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) Not applicable.
(c) Not applicable.
(d) Not applicable.
Page 11
<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 25, 1997
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 25, 1997
By: /s/ Michael M. McGovern
Name: Michael M. McGovern
Title: Secretary
Date: March 25, 1997
Page 12
<PAGE>
EXHIBITS INDEX PAGE NO.
(23) Independent Auditors' Consent 14
(27) Financial Data Schedule 15
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
To the Board of Directors of ML Asset Backed Corporation:
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 25, 1997 appearing in this Annual Report on Form 10-K
of ML Asset Backed Corporation for the year ended December 27, 1996.
/s/ Deloitte & Touche LLP
New York, New York
March 25, 1997
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE DECEMBER 27, 1996 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-27-1996
<PERIOD-END> DEC-27-1996
<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>
