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
February 26, 1999
Date of Report .........................................................
(Date of earliest event reported)
CARCO Auto Loan Master Trust
........................................................................
(Exact name of registrant as specified in its charter)
State of Delaware 333-38873 and 33-55795 None
........................................................................
(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. 333-38873 and 33-55795.
<PAGE>
Item 5. Other Events.
-------------
In connection with the proposed offering of CARCO Auto Loan Master
Trust Fixed Rate Auto Loan Asset Backed Certificates, Series 1999-1, Class
A-1 and Class A-2, attached as Exhibit 99 are certain materials prepared by
Chrysler Financial Company L.L.C. 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
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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: February 26, 1999 By: /s/ B.C. Babbish
---------------------------------
B.C. Babbish
Assistant Secretary
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EXHIBIT INDEX
-------------
Exhibit
No. Description of Exhibit
- ------- ----------------------
99 Material prepared by Chrysler Financial Corporation in
connection with CARCO Auto Loan Master Trust Fixed Rate
Auto Loan Asset Backed Certificates, Series 1999-1 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
CARCO Auto Loan Master Trust Fixed Rate Auto Loan Asset Backed Certificates,
Series 1999-1 Structural and Collateral Materials
<PAGE>
Exhibit 99
CARCO Auto Loan Master Trust
U.S. AUTO RECEIVABLES COMPANY, Seller
CHRYSLER FINANCIAL COMPANY L.L.C., Servicer
Subject to Revision
Term Sheet dated February 26, 1999.
Issuer ................. CARCO Auto Loan Master Trust (the "Trust").
Seller ................. U.S. Auto Receivables Company ("USA" or the
"Seller").
Servicer ............... Chrysler Financial Company L.L.C. ("CFC" or the
"Servicer").
Trustee ............... The Bank of New York (the "Trustee").
Title of Securities ... $800,000,000 Fixed Rate Auto Loan Asset Backed
Certificates, Series 1999-1 (the "Series 1999-1
Certificates"). The Series 1999-1 Certificates will
be issued in two classes (each a "Class"):
$400,000,000 aggregate initial principal amount of
Class A-1 Certificates, Series 1999-1 (the "Class A-1
Certificates"); and $400,000,000 aggregate initial
principal amount of Class A-2 Certificates, Series
1999-1 (the "Class A-2 Certificates").
The Series 1999-1
Invested Amount ..... The aggregate Series 1999-1 Invested Amount is
expected to be $800,000,000 on the Series Issuance
Date (based on information as of the Series Cut-Off
Date) and represents the principal amount of the
Series 1999-1 Certificates invested in Receivables as
of the Series Issuance Date. The Series 1999-1
Invested Amount will be allocated pro rata between
the Class A-1 Certificates (the "Class A-1 Invested
Amount") and the Class A-2 Certificates (the "Class
A-2 Invested Amount"). The Invested Amount is subject
to decrease to the extent funds are deposited in the
Excess Funding Account and, subsequently, to increase
to the extent amounts are withdrawn from the Excess
Funding Account and paid to the Seller. The Invested
Amount is also subject to reduction during the Class
A-1 Accumulation Period, the Class A-2 Accumulation
Period and any Early Amortization Period and at such
other times as deposits are made to the Excess
Funding Account in connection with the payment of
Receivables. Any such increases or decreases in the
aggregate Invested Amount will be allocated to the
Class A-1 Certificates and the Class A-2 Certificates
pro rata based on their respective outstanding
principal amounts.
The Trust's assets that are allocated to Series
1999-1 will be allocated in part to the Class A-1
Certificateholders (the "Class A-1
Certificateholders' Interest") and the Class A-2
Certificateholders (the "Class A-2
Certificateholders' Interest"). The Class A-1
Certificateholders' Interest and the Class A-2
Certificateholders' Interest are collectively
referred to herein as the "Series 1999-1
Certificateholders' Interest".
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Interest .............. Interest on the principal balance of the Class A-1
Certificates and the Class A-2 Certificates will
accrue at [ ]% per annum (the "Class A-1 Certificate
Rate") and [ ]% per annum (the "Class A-2 Certificate
Rate"), respectively, and will be payable to Series
1999-1 Certificateholders on the fifteenth day of
each month (or, if such day is not a business day, on
the next succeeding business day) (each, a
"Distribution Date"), commencing April 15, 1999.
Interest will accrue for the period from and
including the most recent Distribution Date to but
excluding the next succeeding Distribution Date (each
an "Interest Period"), except that the first Interest
Period will be 35 days on a 30/360 day basis.
Interest for any Distribution Date due but not paid
on such Distribution Date will be due on the next
Distribution Date, together with, to the extent
permitted by applicable law, interest on such
amount at the applicable Certificate Rate. Interest
will be calculated on the basis of a 360-day year
of twelve 30-day months.
Reserve Fund .......... The "Reserve Fund" will be a trust account
established and maintained in the name of the Trustee
for the benefit of the Series 1999-1
Certificateholders. On the Series Issuance Date, the
Seller will deposit $2,800,000 (0.35% of the
principal balance of the Series 1999-1 Certificates)
into the Reserve Fund. The "Reserve Fund Required
Amount" for any Distribution Date will equal 0.35% of
the outstanding principal balance of the Series
1999-1 Certificates for such Distribution Date (after
giving effect to any change therein on such
Distribution Date). The "Reserve Fund Deposit Amount"
is the amount, if any, by which the Reserve Fund
Required Amount exceeds the amount on deposit in the
Reserve Fund. Funds in the Reserve Fund will be
invested in investments that will mature on or prior
to the next Distribution Date. Amounts on deposit in
the Reserve Fund will be available to pay Monthly
Interest, the Monthly Servicing Fee and Investor
Default Amounts.
Class A-1 Expected
Payment Date ........ March 15, 2001.
Class A-2 Expected
Payment Date ........ March 15, 2002.
Excess Funding Account.. Except as provided below, the Excess Funded Amount
(the amount, if any, of the Series 1999-1
Certificates not invested in Receivables) will be
maintained in a trust account established with the
Trustee (the "Excess Funding Account").
Upon (a) the commencement of any Early Amortization
Period, (b) the September 2000 Distribution Date
and (c) the September 2001 Distribution Date, some
or all of funds on deposit in the Excess Funding
Account will be distributed to the Series 1999-1
Certificateholders or deposited in the Principal
Funding Account.
Class A-1 Accumulation
Period .............. Unless an Early Amortization Event that is not cured
or waived shall have occurred, the Class A-1
Certificates will have a Class A-1 Accumulation
Period of one, two, three, four or five month(s) long
as described in the following paragraph. During the
Class A-1 Accumulation Period, Principal Collections
and certain other amounts
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allocable to the Class A-1 Certificateholders'
Interest will be deposited on each Distribution Date
in a trust account established for the benefit of
the Series 1999-1 Certificateholders (the "Principal
Funding Account") and used to make principal
distributions to the Class A-1 Certificateholders
when due.
On the September 2000 Distribution Date and each
Distribution Date thereafter that occurs prior to
the Class A-1 Accumulation Period Commencement Date,
the Servicer shall calculate the Class A-1
Accumulation Period Length. The "Class A-1
Accumulation Period Length" will be calculated on
each such date as the lesser of (i) the number of
full Collection Periods between such Distribution
Date and the Class A-1 Expected Payment Date and
(ii) the product, rounded upwards to the nearest
integer not greater than five, of (a) one divided by
the lowest Monthly Payment Rate on the Receivables
during the last 12 months and (b) a fraction, the
numerator of which is the sum of (i) the Class A-1
Invested Amount as of such Distribution Date (after
giving effect to all changes therein on such date)
and (ii) the invested amounts of all other Series
(excluding certain Series) currently in their
amortization or accumulation periods or expected to
be in their amortization or accumulation periods by
the Class A-1 Expected Payment Date and the
denominator of which is the sum of the Series 1999-1
Invested Amount and the invested amounts as of such
Distribution Date (after giving effect to all
changes therein on such date) of all other
outstanding Series (excluding certain Series) which
are expected to be outstanding on the Class A-1
Expected Payment Date. The Class A-1 Accumulation
Period Commencement Date (which will be the first
day of a Collection Period) will occur when the
number of full Collection Periods remaining until
the Class A-1 Expected Payment Date first equals the
Class A-1 Accumulation Period Length as calculated
above. If the Class A-1 Accumulation Period Length
is one month, two months, three months, four months
or five months in length, the "Class A-1
Accumulation Period Commencement Date" shall be the
first day of the February 2001 Collection Period,
the January 2001 Collection Period, the December
2000 Collection Period, the November 2000 Collection
Period or the October 2000 Collection Period,
respectively. In addition, if at any time after the
September 2000 Distribution Date, any other
outstanding Series (excluding certain Series) shall
have entered into a reinvestment period or an early
amortization period, the Class A-1 Accumulation
Period Commencement Date shall be the earlier of
(i) the date that such outstanding Series shall
have entered into its reinvestment period or early
amortization period and (ii) the Class A-1
Accumulation Period Commencement Date as previously
determined.
The effect of the calculation described above is to
permit the reduction of the length of the Class A-1
Accumulation Period based on the invested amounts
of certain other Series which are scheduled to be
in their revolving periods during the Class A-1
Accumulation Period and on increases in the
principal payment rate, which, if continued, would
result in a shorter Class A-1 Accumulation Period.
3
<PAGE>
Class A-2 Accumulation
Period .............. Unless an Early Amortization Event that is not cured
or waived shall have occurred, the Class A-2
Certificates will have a Class A-2 Accumulation
Period of one, two, three, four or five month(s) long
as described in the following paragraph. During the
Class A-2 Accumulation Period, Principal Collections
and certain other amounts allocable to the Class A-2
Certificateholders' Interest will be deposited each
month in the Principal Funding Account and used to
make distributions to the Class A-2
Certificateholders when due.
On the September 2001 Distribution Date and each
Distribution Date thereafter that occurs prior to
the Class A-2 Accumulation Period Commencement Date,
the Servicer shall calculate the Class A-2
Accumulation Period Length. The "Class A-2
Accumulation Period Length" will be calculated on
each such date as the lesser of (i) the number of
full Collection Periods between such Distribution
Date and the Class A-2 Expected Payment Date and
(ii) the product, rounded upwards to the nearest
integer not greater than five, of (a) one divided by
the lowest Monthly Payment Rate on the Receivables
during the last 12 months and (b) a fraction, the
numerator of which is the sum of (i) the Class A-2
Invested Amount as of such Distribution Date (after
giving effect to all changes therein on such date)
and (ii) the invested amounts of all other Series
(excluding certain Series) currently in their
amortization or accumulation periods or expected to
be in their amortization or accumulation periods by
the Class A-2 Expected Payment Date and the
denominator of which is the sum of such Invested
Amount and the invested amounts as of such
Distribution Date (after giving effect to all
changes therein on such date) of all other
outstanding Series (excluding certain Series) which
are expected to be outstanding on the Class A-2
Expected Payment Date. The Class A-2 Accumulation
Period Commencement Date (which will be the first
day of a Collection Period) will occur when the
number of full Collection Periods remaining until
the Class A-2 Expected Payment Date first equals the
Class A-2 Accumulation Period Length as calculated
above. If the Class A-2 Accumulation Period Length
is one month, two months, three months, four months
or five months in length, the "Class A-2
Accumulation Period Commencement Date" shall be the
first day of the February 2002 Collection Period,
the January 2002 Collection Period, the December
2001 Collection Period, the November 2001 Collection
Period or the October 2001 Collection Period,
respectively. In addition, if at any time after the
September 2001 Distribution Date, any other
outstanding Series (excluding certain Series) shall
have entered into a reinvestment period or an early
amortization period, the Class A-2 Accumulation
Period Commencement Date shall be the earlier of (i)
the date that such outstanding Series shall have
entered into its reinvestment period or early
amortization period and (ii) the Class A-2
Accumulation Period Commencement Date as previously
determined.
The effect of the calculation described above is to
permit the reduction of the length of the Class A-2
Accumulation Period based on the invested amounts of
certain other Series which are scheduled to be in
their revolving periods during the Class A-2
Accumulation Period and on increases in the
principal payment rate, which, if continued, would
result in a shorter Class A-2 Accumulation Period.
4
<PAGE>
Early Amortization
Period ............. The Series 1999-1 Certificates will have an Early
Amortization Period if an Early Amortization Event
occurs. During an Early Amortization Period with
respect to Series 1999-1, Principal Collections and
certain other amounts allocable to the Series 1999-1
Certificateholders' Interest will be distributed to
the Series 1999-1 Certificateholders monthly on each
Distribution Date beginning with the Distribution
Date following the Collection Period in which such
Early Amortization Period commences.
The Seller is required to add Receivables to the
Trust to maintain the principal balance of
Receivables in the Trust at a specified level. The
failure of the Seller to add Receivables when
required will result in the occurrence of an Early
Amortization Event. However, if no other Early
Amortization Event has occurred, the Early
Amortization Period resulting from such failure
will terminate and the Class A-1 Revolving Period
or the Class A-2 Revolving Period, as applicable,
will recommence when the Seller would no longer be
required to add Receivables to the Trust, so long
as the scheduled termination date of such Revolving
Period has not occurred.
Notwithstanding the foregoing, in the event of the
occurrence of certain Early Amortization Events,
provided that the scheduled termination date of the
Class A-1 Revolving Period or the Class A-2
Revolving Period, as applicable, has not occurred,
such Revolving Period may recommence following
receipt of (i) written confirmation from each
rating agency rating the Series 1999-1 Certificates
(each, a "Rating Agency") (other than Moody's) that
such Rating Agency's rating of the Series 1999-1
Certificates will not be withdrawn or lowered as a
result of such recommencement and (ii) the consent
of Series 1999-1 Certificateholders holding Series
1999-1 Certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series
1999-1 Certificates to such recommencement.
Early Amortization
Events .............. The Early Amortization Events with respect to the
Series 1999-1 Certificates will include each of the
following events:
1. failure on the part of USA, the Servicer or CFC
(i) to make any payment required by the Pooling
and Servicing Agreement or the Receivables
Purchase Agreement, (ii) to deliver a
Distribution Date Statement required by the
Pooling and Servicing Agreement, (iii) to
comply with its covenant not to create any lien
on a Receivable or (iv) to observe or perform
in any material respect any other covenant or
agreement set forth in the Pooling and
Servicing Agreement or the Receivables Purchase
Agreement beyond any applicable grace period;
2. any representation or warranty made by the RPA
Seller in the Receivables Purchase Agreement or
by USA in the Pooling and Servicing Agreement
or any information required to be given by USA
to the Trustee to identify the Accounts proves
to have been incorrect in any material respect
when made and continues to be incorrect in any
material respect for a period of 60 days after
written notice and as a result the interests of
the Certificateholders are materially and
adversely affected; provided, however, that an
<PAGE>
Early Amortization Event shall not be deemed to
occur thereunder if USA has repurchased the
related Receivables or all such Receivables, if
applicable, during such period in accordance
with the provisions of the Pooling and Servicing
Agreement;
3. the occurrence of certain events of bankruptcy,
insolvency or receivership relating to CFC,
DaimlerChrysler, the Trust or the Seller;
4. a failure by USA to convey Receivables in
Additional Accounts to the Trust when required;
5. on any Determination Date, the Available
Subordinated Amount for the next Distribution
Date will be reduced to an amount less than the
Required Subordinated Amount on such
Determination Date after giving effect to the
distributions to be made on the next
Distribution Date;
6. any Service Default with respect to the Series
1999-1 Certificates occurs;
7. on any Distribution Date, as of the last day of
the preceding Collection Period, the aggregate
amount of Principal Receivables relating to
Used Vehicles exceeds 20% of the Pool Balance
on such last day;
8. on any Determination Date, the average of the
Monthly Payment Rates for the three preceding
Collection Periods is less than 20%;
9. on any Distribution Date the amount of funds in
the Reserve Fund after giving effect to any
withdrawals therefrom or deposits thereto on
such Distribution Date shall be less than 0.10%
of the outstanding principal balance of the
Series 1999-1 Certificates on such Distribution
Date (after giving effect to any changes
therein on such Distribution Date); and
10. the Trust or USA becomes in investment company
within the meaning of the Investment Company
Act of 1940, as amended.
Subordination of the
Seller's Interest ... If the Interest Collections, Investment Proceeds,
Certificateholders for any Collection Period are
not sufficient to cover the interest payable with
respect to the Series 1999-1 Certificates on the
next Distribution Date (plus any overdue interest
and interest thereon), the Monthly Servicing Fee
for such Distribution Date, any Investor Default
Amount for such Distribution Date and certain other
amounts, the Available Subordinated Amount will be
applied to make up such deficiency.
The "Available Subordinated Amount" for a
Determination Date is equal to (a) the lesser of
(i) the Available Subordinated Amount for the
preceding Determination Date, minus, with certain
limitations, the Draw Amount for such preceding
Determination Date, minus
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funds from the Reserve Fund applied to cover any
portion of the Investor Default Amount, plus the
excess, if any, of the Required Subordinated Amount
for such Determination Date over the Required
Subordinated Amount for the immediately preceding
Determination Date due to an increase in the
Subordination Factor, plus the amount of Excess
Servicing available to be paid to the Seller and
(ii) the product of the fractional equivalent of the
Subordinated Percentage and the Invested Amount or,
after the Class A-1 Certificates have been paid in
full, the Class A-2 Invested Amount minus (b) in the
case of clause (a)(i), the Incremental Subordinated
Amount for such preceding Determination Date, plus
(c) the Incremental Subordinated Amount for the
current Determination Date, plus (d) the
Subordinated Percentage of funds to be withdrawn
from the Excess Funding Account on the succeeding
Distribution Date and paid to the Seller or
allocated to one or more Series; provided, however,
(x) that, from and after the commencement of the
Class A-1 Accumulation Period until the Class A-1
Certificates are paid in full, (y) from and after
the commencement of the Class A-2 Accumulation
Period until the Class A-2 Certificates are paid in
full and (z) from and after the commencement of any
Early Amortization Period that is not terminated as
described herein until the payment in full of the
Series 1999-1 Certificates, the Available
Subordinated Amount shall be calculated based on the
Invested Amount or the Class A-2 Invested Amount, as
applicable, as of the close of business on the day
preceding such Class A-1 Accumulation Period, Class
A-2 Accumulation Period or Early Amortization
Period, as applicable. The Available Subordinated
Amount for the first Determination Date is equal to
the Required Subordinated Amount. The "Required
Subordinated Amount" shall mean, as of any date of
determination, the sum of (a) the product of the
initial Subordinated Percentage, as adjusted from
time to time other than as a result of an increase
therein at the option of the Seller, and the
Invested Amount and (b) the Incremental Subordinated
Amount.
The "Incremental Subordinated Amount" on any
Determination Date will equal the result obtained
by multiplying (a) a fraction, the numerator of
which is the sum of the Invested Amount on the last
day of the immediately preceding Collection Period
and the Available Subordinated Amount for such
Determination Date (calculated without adding the
Incremental Subordinated Amount for such
Determination Date as described in clause (c)
above), and the denominator of which is the Pool
Balance on such last day by (b) the excess, if any,
of (x) the sum of the Overconcentration Amount, the
Installment Balance Amount and the aggregate amount
of Ineligible Receivables on such Determination
Date over (y) the aggregate amount of Ineligible
Receivables, Receivables in Accounts containing
Dealer Overconcentrations and Receivables in
Installment Balances, in each case that became
Defaulted Receivables during the preceding
Collection Period and are not subject to
reassignment from the Trust, unless certain
insolvency events relating to the Seller or CFC have
occurred.
The "Subordinated Percentage" will initially equal
the percentage equivalent of a fraction, the
numerator of which is the Subordination Factor and
the denominator of which will be the excess of 100%
over
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the Subordination Factor. The Subordination Factor
will initially be 10.5%, but will be subject to
increase to 11.5% in the event that the rating of
CFC's long-term unsecured debt is lowered below BBB-
by Standard & Poor's or withdrawn by Standard &
Poor's, unless the Seller receives written
confirmation from Standard & Poor's that the failure
to so increase the Subordination Factor would not
result in such Rating Agency lowering or withdrawing
its rating of the Series 1999-1 Certificates. The
Seller may, in its sole discretion, increase at any
time the Available Subordinated Amount for so long
as the cumulative amount of such discretionary
increases does not exceed the lesser of (i)
$8,938,548 or (ii) 1.12% of the Invested Amount. The
Seller is not under any obligation to increase the
Available Subordinated Amount at any time, except as
described herein. If the Available Subordinated
Amount were reduced to less than the Required
Subordinated Amount, an Early Amortization Event
would occur. The Seller could elect to increase the
Available Subordinated Amount at the time such an
Early Amortization Event would otherwise occur, thus
preventing or delaying the occurrence of the Early
Amortization Event.
Required Participation
Percentage .......... "Required Participation Percentage" shall mean, with
respect to Series 1999-1, 103%; provided, however,
that if the aggregate amount of Principal Receivables
due from any Dealer or group of affiliated Dealers at
the close of business on the last day of any
Collection Period with respect to which such
determination is being made is greater than 1.5% of
the Pool Balance on such last day, the Required
Participation Percentage shall mean, as of such last
day and with respect to such Collection Period and
the immediately following Collection Period only,
104%; provided, further, that the Seller may, upon
ten days' prior notice to the Trustee and the Rating
Agencies reduce the Required Participation Percentage
to not less than 100%, so long as the Rating Agencies
shall not have notified the Seller or the Servicer
that any such reduction will result in a reduction or
withdrawal of the rating of the Series 1999-1
Certificates or any other outstanding Series or Class
of Certificates.
Other Series Issuances.. As of the date hereof, seven other Series issued by
the Trust are outstanding.
Allocations ........... Interest Collections, Principal Collections and
Defaulted Receivables allocated to Series 1999-1 will
be further allocated between the Series 1999-1
Certificateholders' Interest and the Seller's
Interest as described below.
Interest Collections and Defaulted Receivables
allocated to Series 1999-1 will be allocated at all
times to the Series 1999-1 Certificateholders'
Interest based on the Floating Allocation
Percentage applicable during the related Collection
Period. The Floating Allocation Percentage for any
Collection Period is the percentage obtained by
dividing the Invested Amount on the last day of the
immediately preceding Collection Period by the
product of (x) the Pool Balance on the last day of
the immediately preceding Collection Period and (y)
the Series Allocation Percentage for the
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Collection Period in respect of which the Floating
Allocation Percentage is being calculated. Principal
Collections allocated to Series 1999-1 will be
allocated to the Series 1999-1 Certificateholders'
Interest based on the Floating Allocation Percentage
during any period (a "Nonprincipal Period") that is
not the Class A-1 Accumulation Period, the Class A-2
Accumulation Period or an Early Amortization Period
and based on the Principal Allocation Percentage
during the Class A-1 Accumulation Period, the Class
A-2 Accumulation Period and any Early Amortization
Period. "Principal Allocation Percentage" for any
Collection Period generally means the percentage
equivalent (which shall never exceed 100%) of a
fraction, the numerator of which is the sum of (x)
the Class A-1 Invested Amount as of the last day of
the Class A-1 Revolving Period, if such last day has
occurred or, if such last day has not occurred, as
of the last day of the immediately preceding
Collection Period or, after the Class A-1
Certificates have been paid in full, zero and (y)
the Class A-2 Invested Amount as of the last day of
the Class A-2 Revolving Period, if such last day has
occurred or, if such last day has not occurred, as
of the last day of the immediately preceding
Collection Period and the denominator of which is
the product of (x) the Pool Balance as of such last
day and (y) the Series Allocation Percentage for the
Collection Period in respect of which the Principal
Allocation Percentage is being calculated.
Excess Principal
Collections ......... Principal Collections otherwise allocable to other
Series, to the extent such collections are not needed
to make payments to or deposits for the benefit of
the Certificateholders of such other Series, will be
applied to cover principal payments due to or for the
benefit of the holders of the Series 1999-1
Certificates and of other Series of Certificates
entitled thereto.
Excess Servicing ...... All interest collections otherwise allocable to any
Series with respect to any Distribution Date, to the
extent such collections are not needed to make
payments to or deposits for the benefit of
Certificateholders of such Series on such
Distribution Date, other than any such collections
that, if not distributed to the Seller, would result
in the available subordinated amount for such Series
being less than the required subordinated amount for
such Series, will be applied to cover shortfalls with
respect to interest payments and certain other
amounts due to or for the benefit of the holders of
the Series 1999-1 Certificates and each Series of
Certificates issued after the Series 1999-1
Certificates, with such excess interest collections
allocated among such Series pro rata based on the
amounts of their respective shortfalls with respect
to such Distribution Date.
Registration of Series
1999-1 Certificates .. The Series 1999-1 Certificates will initially be
represented by one or more Certificates registered in
the name of Cede & Co., as the nominee of The
Depository Trust Company ("DTC"). No person acquiring
an interest in the Series 1999-1 Certificates will be
entitled to receive a definitive certificate
representing such person's interest except under
certain limited circumstances. Series 1999-1
Certificateholders may only hold their Series 1999-1
Certificates
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through DTC. Series 1999-1 Certificates may not be
held through Cedelbank, societe anonyme or the
Euroclear System.
Servicing Fee Rate .... 1.0% or, if the Monthly Servicing Fee has been
waived, 0.0% for the Distribution Date in respect of
which the Monthly Servicing Fee has been waived.
Optional Repurchase ... The Class A-1 Certificateholders' Interest will be
subject to optional repurchase by CFC on any
Distribution Date after the Class A-1 Invested Amount
is reduced to an amount less than or equal to
$40,000,000 (10% of the initial outstanding principal
amount of the Class A-1 Certificates); and the Class
A-2 Certificateholders' Interest will be subject to
optional repurchase by CFC on any Distribution Date
after the Class A-2 Invested Amount is reduced to
an amount less than or equal to $40,000,000 (10% of
the initial outstanding principal amount of the
Class A-2 Certificates). The purchase price will
equal the sum of (i) the Invested Amount of the
Class of Certificates to be repurchased on the
Determination Date preceding the Distribution Date
on which the purchase is scheduled to be made and
(ii) accrued and unpaid interest on that Class of
Series 1999-1 Certificates at the applicable
Certificate Rate (together with interest on overdue
interest).
Class A-1 Termination
Date ............... March 17, 2003.
Class A-2 Termination
Date ................ March 15, 2004.
ERISA Considerations ... Series 1999-1 Certificates may be eligible for
purchase by employee benefit plans.
Certificate Ratings ... It is a condition to the issuance of the Series
1999-1 Certificates that they be rated in the highest
long-term rating category by at least one nationally
recognized rating agency. A security rating is not a
recommendation to buy, sell or hold securities and is
subject to revision or withdrawal in the future by
the assigning rating agency.
Series Issuance Date .. March 10, 1999.
Series Cut-Off Date ... February 28, 1999.
10
<PAGE>
THE DEALER FLOORPLAN FINANCING BUSINESS
The Receivables sold to the Trust by the Seller pursuant to a Pooling
and Servicing Agreement among USA, CFC and the Trustee (the "Pooling and
Servicing Agreement") were or will be selected from extensions of credit and
advances made by DaimlerChrysler Corporation ("DaimlerChrysler"), directly or
as successor to Chrysler Corporation ("Chrysler"), and CFC, directly or as
successor to Chrysler Financial Corporation or Chrysler Credit Corporation
("CCC"), to approximately 3,200 domestic motor vehicle dealers to finance
their automobile and light duty truck inventory. CFC, directly or as
successor to Chrysler Financial Corporation or CCC, financed 56.5% of the
total number of all DaimlerChrysler franchised dealers as of December 31,
1998. Furthermore, CFC, directly or as successor to Chrysler Financial
Corporation or CCC, has extended credit lines to 1,183
DaimlerChrysler-franchised dealers that also operate non-DaimlerChrysler
franchises (representing approximately 41% of the aggregate credit lines of
dealers in the U.S. Wholesale Portfolio as of December 31, 1998) and 419
non-DaimlerChrysler dealers (representing approximately 15% of such aggregate
credit lines). As of December 31, 1998, the balance of Principal Receivables
in the accounts of dealers serviced by CFC (the "U.S. Wholesale Portfolio")
was approximately $9.6 billion. CFC currently services the U.S. Wholesale
Portfolio through its Southfield Support office and through a network of 25
zone offices located throughout the United States.
As of December 31, 1998, the average credit lines per dealer in the
U.S. Wholesale Portfolio for new and used vehicles (which includes Auction
Vehicles) were $3.32 million and $0.47 million, respectively, and the average
balance of principal receivables per dealer was $2.99 million. As of December
31, 1998, the aggregate total receivables balance as a percentage of the
aggregate total credit line was approximately 78.9%.
The following table sets forth the percentages of dealer account balances
by year of credit line origination for the U.S. Wholesale Portfolio.
<TABLE>
<CAPTION>
Portfolio Percentages by Year
of Credit Line Origination
As of December 31, 1998
Prior to
1998 1997 1996 1995 1994 1993 1992 1992
- ---- ---- ---- ---- ---- ---- ---- ----
<C> <C> <C> <C> <C> <C> <C> <C>
8.72% 7.21% 5.79% 7.16% 3.54% 6.51% 6.03% 55.05%
</TABLE>
As of December 31, 1998, the weighted average spread over the Prime
Rate charged to dealers in the U.S. Wholesale Portfolio was approximately
0.92%.
Used Vehicles (which excludes Auction Vehicles) represented
approximately 3.82% of the aggregate principal amount of receivables in the
U.S. Wholesale Portfolio as of December 31, 1998. As of December 31, 1998,
Used Vehicles represented approximately 3.99% of the aggregate principal
amount of Receivables in the Trust (including Excluded Receivables).
The following table provides the percentage of dealers in the U.S.
Wholesale Portfolio that were subject to finance hold.
<TABLE>
<CAPTION>
Finance Hold Experience
As of December 31,
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of Dealers .... 0.9% 2.1% 1.1% 1.8% 1.6% 3.2% 6.8% 9.4% 6.8% 4.6%
</TABLE>
11
<PAGE>
The following table provides the number and percentage of dealers in
Dealer Trouble Status in the U.S. Wholesale Portfolio as of the dates
indicated.
<TABLE>
<CAPTION>
Dealer Trouble Experience
As of December 31,
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Number of Dealers ........ 21 24 20 6 12 21 56 100 129 106
Percentage of Dealers .... 0.7% 0.7% 0.6% 0.2% 0.3% 0.6% 1.8% 3.1% 4.2% 3.5%
</TABLE>
THE ACCOUNTS
As of December 31, 1998, with respect to the Accounts in the Trust: (a)
there were 2,972 Accounts and the Principal Receivables balance was
approximately $8.8 billion; (b) the average credit lines per Dealer for new
and used vehicles (which include Auction Vehicles) were approximately $3.24
million and $0.48 million, respectively, and the average balance of Principal
Receivables per Dealer was approximately $2.95 million; and (c) the aggregate
total Receivables balance as a percentage of the aggregate total credit line
was approximately 79.2%. Unless otherwise indicated, the statistics included
in this paragraph, in the table below and under " -- Geographic Distribution"
with respect to the Accounts and the Receivables in the Trust give effect to
approximately $11.2 million of principal receivables balances with respect to
certain Dealers (the "Excluded Receivables" and the "Excluded Dealers",
respectively) that are in voluntary or involuntary bankruptcy proceedings or
voluntary or involuntary liquidation or that, subject to certain limitations,
are being voluntarily removed by the Seller (or the Servicer on its behalf)
from the Trust. A portion of such principal receivables was created after
such Dealers entered into such status or were designated by the Seller (or
the Servicer on its behalf) for removal from the Trust and, as a result
thereof, are owned by CFC and not the Trust. Principal receivables balances
created prior to such Dealers entering into such status or being designated
for removal from the Trust are included in the Principal Receivables balance.
The following table sets forth the percentages of dealer account
balances by year of credit line origination for the accounts in the Trust.
<TABLE>
<CAPTION>
Portfolio Percentages by Year
of Credit Line Origination
As of December 31, 1998
Prior to
1998 1997 1996 1995 1994 1993 1992 1992
- ---- ---- ---- ---- ---- ---- ---- ----
<C> <C> <C> <C> <C> <C> <C> <C>
5.04% 7.22% 6.03% 5.95% 3.79% 7.06% 6.50% 58.40%
</TABLE>
As of December 31, 1998, the weighted average spread over the Prime
Rate charged to Dealers was approximately 0.91%.
Loss Experience
The following tables set forth the average Principal Receivables
balance and loss experience for each of the periods shown on the U.S.
Wholesale Portfolio. Because the eligible Accounts in the Trust (the
"Eligible Accounts") will be only a portion of the entire U.S. Wholesale
Portfolio, actual loss experience with respect to the Eligible Accounts may
be different. There can be no assurance that the loss experience for the
Receivables in the future will be similar to the historical experience set
forth below with respect to the U.S. Wholesale Portfolio. In addition, the
historical experience set forth below reflects financial assistance provided
by DaimlerChrysler or Chrysler to DaimlerChrysler-franchised dealers. If
DaimlerChrysler is not able to or elects not to provide such assistance, the
loss experience in respect of the U.S. Wholesale Portfolio may be adversely
affected.
12
<PAGE>
<TABLE>
<CAPTION>
Loss Experience for the U.S. Wholesale Portfolio
Year Ended December 31,
----------------------------------------------------
1998 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C>
Average Principal Receivables
Balance(1) ..................... $9,236 $8,877 $ 8,825 $ 8,256 $ 6,754 $6,271
Net Losses/(Net Recoveries)(2) ... $ 11 $ 4 $ (0) $ (1) $ (1) $ 12
Net Losses/(Net Recoveries)
as a Percent of Liquidations ... 0.020% 0.007% (0.000)% (0.002)% (0.003)% 0.035%
Net Losses/(Net Recoveries)
as a Percent of Average
Principal Receivables Balance... 0.12% 0.04% (0.00)% (0.01)% (0.01)% 0.19%
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------
1992 1991 1990 1989 1988 1987 1986
---- ---- ---- ---- ---- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Principal
Receivables Balance(1) ......... $5,344 $4,826 $4,726 $4,933 $4,129 $3,787 $2,991
Net Losses/(Net Recoveries)(2).... $ 26 $ 36 $ 23 $ 13 $ 3 $ 2 $ 3
Net Losses/(Net Recoveries) as
a Percent of Liquidations ...... 0.098% 0.163% 0.117% 0.060% 0.015% 0.015% 0.023%
Net Losses/(Net Recoveries)
as a Percent of Average
Principal Receivables Balance... 0.49% 0.75% 0.49% 0.26% 0.07% 0.06% 0.10%
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------
1985 1984 1983 1982 1981
---- ---- ---- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C>
Average Principal Receivables
Balance(1) ..................... $2,532 $ 2,098 $1,461 $1,451 $1,390
Net Losses/(Net Recoveries)(2) ... $ 1 $ (2) $ 2 $ 14 $ 12
Net Losses/(Net Recoveries)
as a Percent of Liquidations ... 0.004% (0.019)% 0.023% 0.239% 0.225%
Net Losses/(Net Recoveries)
as a Percent of Average
Principal Receivables Balance... 0.02% (0.09)% 0.12% 0.95% 0.85%
<FN>
- ----------------
(1) Average Principal Receivables Balance is the average of the month-end
principal balances for the thirteen months ending on the last day of the
period.
(2) Net losses in any period are gross losses less recoveries for such
period.
</TABLE>
13
<PAGE>
Aging Experience
The following table provides the age distribution of vehicle inventory
for all dealers in the U.S. Wholesale Portfolio, as a percentage of total
principal outstanding at the date indicated. Because the Eligible Accounts
will only be a portion of the entire U.S. Wholesale Portfolio, actual age
distribution with respect to the Eligible Accounts may be different.
Age Distribution for the U.S. Wholesale Portfolio
<TABLE>
<CAPTION>
As of
December 31,
----------------------------------------------------------------------------------------
Days 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1-120 ............ 81.7% 80.1% 80.4% 82.2% 82.5% 82.4% 77.2% 75.9% 72.2% 71.3% 78.8% 73.0% 81.5%
121-180 .......... 11.0 10.8 10.0 9.3 10.1 9.6 13.8 12.9 13.7 14.5 11.0 13.9 9.2
181-270 .......... 4.1 4.2 5.0 3.8 4.0 4.6 4.8 4.8 7.1 6.4 4.7 6.8 4.4
over 270 ......... 3.2 4.9 4.6 4.7 3.4 3.4 4.2 6.4 7.0 7.8 5.5 6.3 4.9
</TABLE>
Geographic Distribution
The following table provides the geographic distribution of the vehicle
inventory for all dealers in the Trust on the basis of receivables
outstanding and the number of dealers generating such portfolio.
<TABLE>
<CAPTION>
Geographic Distribution of Accounts in the Trust
As of December 31, 1998
Percentage of Percentage of
Receivables Receivables Total Number of Number of
Outstanding (2) Outstanding (2)(4) Dealers (3) Dealers (3)(4)
--------------- ------------------ ----------- --------------
<S> <C> <C> <C> <C>
Texas ................ $ 661,103,073.23 7.53% 186 6.26%
California ........... $ 657,786,184.18 7.49% 189 6.36%
New York ............. $ 574,974,035.47 6.55% 195 6.56%
Illinois ............. $ 534,741,888.33 6.09% 162 5.45%
Michigan ............. $ 486,185,608.86 5.54% 138 4.64%
Florida .............. $ 469,737,534.77 5.35% 113 3.80%
New Jersey ........... $ 452,926,907.62 5.16% 133 4.48%
Other(1) ............. $ 4,940,719,770.86 56.28% 1,856 62.45%
----------------- ------- ----- ------
Total ................ $ 8,778,175,003.32 100.00% 2,972 100.00%
================= ======= ===== ======
<FN>
- ----------------
(1) No other state includes more than 5% of the outstanding Receivables.
(2) Includes Excluded Receivables.
(3) Includes Excluded Dealers.
(4) May not add to 100.0% due to rounding.
</TABLE>
14
<PAGE>
MATURITY AND PRINCIPAL PAYMENT CONSIDERATIONS
Principal with respect to the Series 1999-1 Certificates will be
payable if an Early Amortization Period that is not terminated has commenced.
Full amortization of the Class A-1 Certificates by the March 2001
Distribution Date (the "Class A-1 Expected Payment Date") and of the Class
A-2 Certificates by the March 2002 Distribution Date (the "Class A-2 Expected
Payment Date") depends on, among other things, repayment by Dealers of the
Receivables and may not occur if Dealer payments are insufficient therefor.
Because the Receivables generally are paid upon retail sale of the underlying
Vehicle, the timing of such payments is uncertain. In addition, there is no
assurance that CFC will generate additional Receivables under the Accounts or
that any particular pattern of Dealer payments will occur. In addition, the
shorter the Class A-1 Accumulation Period Length or the Class A-2
Accumulation Period Length the greater the likelihood that payment of the
Class A-1 Certificates in full by the Class A-1 Expected Payment Date or the
Class A-2 Certificates in full by the Class A-2 Expected Payment Date, as
applicable, will be dependent on the reallocation of Principal Collections
which are initially allocated to other outstanding Series. If one or more
other Series from which Principal Collections are expected to be available to
be reallocated to the payment of the Class A-1 Certificates enters into an
early amortization period or reinvestment period after the September 2000
Distribution Date, Principal Collections allocated to such Series generally
will not be available to be reallocated to make payments of principal of the
Class A-1 Certificates and the final payment of principal of the Class A-1
Certificates may be later than the Class A-1 Expected Payment Date. If one or
more other Series from which Principal Collections are expected to be
available to be reallocated to the payment of the Class A-2 Certificates
enters into an early amortization period or reinvestment period after the
September 2001 Distribution Date, Principal Collections allocated to such
Series generally will not be available to be reallocated to make payments of
principal of the Class A-2 Certificates and the final payment of principal of
the Class A-2 Certificates may be later than the Class A-2 Expected Payment
Date.
Because an Early Amortization Event with respect to the Series 1999-1
Certificates may occur which would initiate an Early Amortization Period, the
final distribution of principal on the Class A-1 Certificates may be made
prior to the scheduled termination of the Class A-1 Revolving Period or prior
to the Class A-1 Expected Payment Date and the final distribution of
principal on the Class A-2 Certificates may be made prior to the scheduled
termination of the Class A-2 Revolving Period or prior to the Class A-2
Expected Payment Date.
The amount of new Receivables generated in any month and monthly
payment rates on the Receivables may vary because of seasonal variations in
Vehicle sales and inventory levels, retail incentive programs provided by
Vehicle manufacturers and various economic factors affecting Vehicle sales
generally. The following table sets forth the highest and lowest monthly
payment rates for the U.S. Wholesale Portfolio during any month in the
periods shown and the average of the monthly payment rates for all months
during the periods shown, in each case calculated as the percentage
equivalent of a fraction, the numerator of which is the aggregate of all
collections of principal during the period and the denominator of which is
the average aggregate principal balance for such period. Monthly payment
rates reflected in the table include principal credit adjustments. The
monthly payment rates presented for 1981 through 1985 are calculated using
quarterly data while monthly payment rates for 1986 through December of 1998
reflect actual monthly data. There can be no assurance that the rate of
Principal Collections will be similar to the historical experience set forth
below. Because the Eligible Accounts will
15
<PAGE>
be only a portion of the entire U.S. Wholesale Portfolio, historical monthly
payment rates with respect to the Eligible Accounts may be different than
those shown below.
Monthly Payment Rates for the U.S. Wholesale Portfolio
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Highest Month ............................. 60.8% 57.7% 58.3% 59.1% 59.7% 54.7% 50.6% 49.0% 42.1% 41.5%
Lowest Month .............................. 42.5 41.1 43.2 36.5 34.2 35.9 34.4 30.2 25.3 29.5
Average of the Months in the Period ....... 50.0 48.2 49.0 45.6 50.3 46.6 41.3 38.4 35.7 35.6
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------
1988 1987 1986 1985 1984 1983 1982 1981
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Highest Month ............................. 48.7% 40.3% 56.7% 45.9% 43.7% 45.9% 35.5% 34.3%
Lowest Month .............................. 29.5 26.8 27.7 35.8 35.7 37.7 29.0 27.4
Average of the Months in the Period ....... 41.2 34.2 37.7 40.1 39.9 42.2 32.9 32.2
</TABLE>
