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
July 13, 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.
Item 5. Other Events.
In connection with the proposed offering of CARCO Auto Loan Master
Trust Floating Rate Auto Loan Asset Backed Certificates, Series 1999-3, 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
- 2-
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 COMPANY L.L.C.
Date: July 14, 1999 By: /s/ B.C. Babbish
------------------------------
B.C. Babbish
Assistant Secretary
- 3-
EXHIBIT INDEX
Exhibit
No. Description of Exhibit
- ------- ----------------------
99 Material prepared by Chrysler Financial Company L.L.C.
in connection with CARCO Auto Loan Master Trust Floating
Rate Auto Loan Asset Backed Certificates, Series 1999-3
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 Floating Rate Auto Loan Asset Backed
Certificates, Series 1999-3 Structural and Collateral Materials
The information contained in the attached materials is referred to
as the "Information".
The attached Term Sheet has been prepared by Chrysler Financial
Company L.L.C. ("CFC"). Neither Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") nor any of its affiliates makes any
representation as to the accuracy or completeness of the Information herein.
The Information contained herein is preliminary and will be superseded by the
applicable prospectus supplement and by any other information subsequently
filed with the Securities and Exchange Commission.
The Information contained herein will be superseded by the
description of the collateral pool contained in the prospectus supplement
relating to the securities.
The Information addresses only certain aspects of the applicable
security's characteristics and thus does not provide a complete assessment.
As such, the Information may not reflect the impact of all structural
characteristics of the security. The assumptions underlying the Information,
including structure and collateral, may be modified from time to time to
reflect changed circumstances.
Although a registration statement (including the prospectus)
relating to the securities discussed in this communication has been filed
with the Securities and Exchange Commission and is effective, the final
prospectus supplement relating to the securities discussed in this
communication has not been filed with the Securities and Exchange Commission.
This communication shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any offer or sale of the securities
discussed in this communication in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state. Prospective purchasers are
referred to the final prospectus and prospectus supplement relating to the
securities discussed in this communication for definitive Information on any
matter discussed in this communication. Any investment decision should be
based only on the data in the prospectus and the prospectus supplement
("Offering Documents") and the then current version of the Information.
Offering Documents contain data that is current as of their publication dates
and after publication may no longer be complete or current. A final
prospectus and prospectus supplement may be obtained by contacting the
Merrill Lynch Trading Desk at 212-449-3659.
DAIMLERCHRYSLER
CARCO Auto Loan Master Trust
U.S. AUTO RECEIVABLES COMPANY, Seller
CHRYSLER FINANCIAL COMPANY L.L.C., Servicer
Subject to Revision
Term Sheet dated July 13, 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"), a wholly owned
subsidiary of DaimlerChrysler Corporation
("DaimlerChrysler").
Trustee.......................... The Bank of New York (the "Trustee").
Title of Securities.............. $1,000,000,000 Floating Rate Auto Loan
Asset Backed Certificates, Series 1999-3
(the "Series 1999-3 Certificates").
The Series 1999-3 Invested
Amount........................ The aggregate Series 1999-3 Invested
Amount is expected to be $1,000,000,000 on
the Series Issuance Date (based on
information as of the Series Cut-Off Date)
and represents the principal amount of the
Series 1999-3 Certificates invested in
Receivables as of the Series Issuance
Date. 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 Series 1999-3
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
1
The Trust's assets that are allocated to
Series 1999-3 are referred to herein as
the "Series 1999-3 Certificateholders'
Interest".
Interest......................... Interest on the principal balance of the
Series 1999-3 Certificates will accrue at
the Series 1999-3 Certificate Rate and
will be payable to Series 1999-3
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 August 16, 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 the period from and
including the Series Issuance Date to but
excluding the August 1999 Distribution
Date. 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 Series 1999-3 Certificate
Rate calculated on the basis of the Index.
The Series 1999-3 Certificate Rate for
each Interest Period will be determined on
the second day that is both a business day
and a day on which banking institutions in
the City of London, England are not
required or authorized by law to be closed
preceding the first day of such Interest
Period. The Series 1999-3 Certificate Rate
will equal one-month LIBOR (the "Index")
for the applicable Interest Period, plus [
]%; provided that, if the Series 1999-3
Certificate Rate for any Distribution Date
calculated on the basis of the Index is
greater than a rate based primarily on
Interest Collections on the Receivables
and earnings on certain Trust accounts
(the "Assets Receivables Rate"), then the
Series 1999-3 Certificate Rate for such
Distribution Date will be the Assets
Receivables Rate. If the Series 1999-3
Certificate Rate for any Distribution Date
is based on the Assets Receivables Rate,
the excess of (a) the amount of interest
on the Series 1999-3 Certificates that
would have accrued in respect of the
related Interest Period had interest
2
been calculated based on the Index, over
(b) the amount of interest on the Series
1999-3 Certificates actually accrued in
respect of such Interest Period based on
the Assets Receivables Rate (such excess,
together with the unpaid portion of any
such excess from prior Distribution Dates
(and interest accrued thereon calculated
on the basis of the Index), is referred to
as a "Carry-over Amount") will be paid on
such Distribution Date from amounts on
deposit in the Yield Supplement Account
and, if such amounts are depleted, to the
extent funds are allocated and available
therefor after making all required
distributions and deposits with respect to
the Series 1999-3 Certificates, including
payments with respect to principal
(including payments to the Excess Funding
Account), interest on the Series 1999-3
Certificates ("Monthly Interest"), the
monthly servicing fee (the "Monthly
Servicing Fee"), the Reserve Fund Deposit
Amount and the investor default amount
(the "Investor Default Amount"). In
addition, any Carry-over Amount
outstanding on the final payment date with
respect to the Series 1999-3 Certificates
(the "Series 1999-3 Final Payment Date"),
after making the distributions described
in the preceding sentence, will be paid on
such date from (i) certain amounts on
deposit in the Reserve Fund and (ii)
certain collections allocable to the
Seller on deposit in the Collection
Account on such date. Interest will be
calculated on the basis of the actual
number of days in each Interest Period
divided by 360.
Yield Supplement Account......... On the Series Issuance Date, the Seller
will deposit $4,000,000 (0.40% of the
principal balance of the Series 1999-3
Certificates) in a trust account which
will be established by the Seller with the
Trustee (the "Yield Supplement Account").
The Yield Supplement Account for any
Distribution Date will equal 0.40% of the
outstanding principal balance of the
Series 1999-3 Certificates for such
Distribution Date (after giving effect to
any change therein on such Distribution
Date). The Yield Supplement Account will
be funded, from time to time, by
3
the deposit thereto of certain amounts
otherwise distributable to the Seller.
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
1999-3 Certificateholders. On the Series
Issuance Date, the Seller will deposit
$3,500,000 (0.35% of the principal balance
of the Series 1999-3 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 1999-3
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.
Series 1999-3 Expected Payment
Date.......................... July 15, 2002.
Excess Funding Account........... Except as provided below, the Excess
Funded Amount (the amount, if any, of the
Series 1999-3 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 and (b) the January
2002 Distribution Date, some or all of
funds on deposit in the Excess Funding
Account will be distributed to the Series
1999-3 Certificateholders or deposited in
the Principal Funding Account.
Series 1999-3 Accumulation Period Unless an Early Amortization Event that is
not cured or waived shall have occurred,
the Series 1999-3 Certificates will have a
Series 1999-3 Accumulation Period of one,
two, three, four or
4
five month(s) long as described in the
following paragraph. During the Series
1999-3 Accumulation Period, Principal
Collections and certain other amounts
allocable to the Series 1999-3
Certificateholders' Interest will be
deposited on each Distribution Date in a
trust account established for the benefit
of the Series 1999-3 Certificateholders
(the "Principal Funding Account") and used
to make principal distributions to the
Series 1999-3 Certificateholders when due.
On the January 2002 Distribution Date and
each Distribution Date thereafter that
occurs prior to the Series 1999-3
Accumulation Period Commencement Date, the
Servicer shall calculate the Series 1999-3
Accumulation Period Length. The "Series
1999-3 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 Series 1999-3 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
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 Series 1999-3
Expected Payment Date and the denominator
of which is the sum of the Series 1999-3
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 Series
1999-3 Expected Payment Date. The Series
1999-3 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 Series 1999-3 Expected
Payment Date first
5
equals the Series 1999-3 Accumulation
Period Length as calculated above. If the
Series 1999-3 Accumulation Period Length
is one month, two months, three months,
four months or five months in length, the
"Series 1999-3 Accumulation Period
Commencement Date" shall be the first day
of the June 2002 Collection Period, the
May 2002 Collection Period, the April 2002
Collection Period, the March 2002
Collection Period or the February 2002
Collection Period, respectively. In
addition, if at any time after the January
2002 Distribution Date, any other
outstanding Series (excluding certain
Series) shall have entered into a
reinvestment period or an early
amortization period, the Series 1999-3
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 Series
1999-3 Accumulation Period Commencement
Date as previously determined.
The effect of the calculation described
above is to permit the reduction of the
length of the Series 1999-3 Accumulation
Period based on the invested amounts of
certain other Series which are scheduled
to be in their revolving periods during
the Series 1999-3 Accumulation Period and
on increases in the principal payment
rate, which, if continued, would result in
a shorter Series 1999-3 Accumulation
Period.
Early Amortization Period........ The Series 1999-3 Certificates will have
an Early Amortization Period if an Early
Amortization Event occurs. During an Early
Amortization Period with respect to Series
1999-3, Principal Collections and certain
other amounts allocable to the Series
1999-3 Certificateholders' Interest will
be distributed to the Series 1999-3
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
6
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 Series
1999-3 Revolving Period 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 Series
1999-3 Revolving Period has not occurred,
such Revolving Period may recommence
following receipt of (i) written
confirmation from each rating agency
rating the Series 1999-3 Certificates
(each, a "Rating Agency") (other than
Moody's) that such Rating Agency's rating
of the Series 1999-3 Certificates will not
be withdrawn or lowered as a result of
such recommencement and (ii) the consent
of Series 1999-3 Certificateholders
holding Series 1999-3 Certificates
evidencing more than 50% of the aggregate
unpaid principal amount of the Series
1999-3 Certificates to such
recommencement.
Early Amortization Events........ The Early Amortization Events with respect
to the Series 1999-3 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;
7
2. any representation or warranty made by
CFC, as seller of the Receivables to
USA, 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 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 1999-3 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%;
8
9. any Carry-over Amount is outstanding
on six consecutive Distribution Dates;
and
10. the Trust or USA becomes an 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, certain amounts in the Reserve
Fund, certain amounts on deposit in the
Yield Supplement Account and certain other
amounts allocable to the Series 1999-3
Certificateholders for any Collection
Period are not sufficient to cover the
interest payable with respect to the
Series 1999-3 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 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 minus
(b) in the case of clause (a)(i), the
Incremental Subordinated Amount for such
preceding Determination Date, plus (c) the
Incremental Subordinated Amount
9
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 Series 1999-3 Accumulation Period
until the Series 1999-3 Certificates are
paid in full and (y) 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 1999-3 Certificates, the Available
Subordinated Amount shall be calculated
based on the Invested Amount as of the
close of business on the day preceding
such Series 1999-3 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
10
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 the Subordination Factor. The
Subordination Factor will initially be
10%, but will be subject to increase to
11% 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
1999-3 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) $11,111,111 or (ii)
1.11% 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 1999-3, 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
11
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
1999-3 Certificates or any other
outstanding Series or Class of
Certificates.
Other Series Issuances........... As of the date hereof, nine other Series
issued by the Trust are outstanding.
Allocations...................... Interest Collections, Principal
Collections and Defaulted Receivables
allocated to Series 1999-3 will be further
allocated between the Series 1999-3
Certificateholders' Interest and the
Seller's Interest as described below.
Interest Collections and Defaulted
Receivables allocated to Series 1999-3
will be allocated at all times to the
Series 1999-3 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 Collection
Period in respect of which the Floating
Allocation Percentage is being calculated.
Principal Collections allocated to Series
1999-3 will be allocated to the Series
1999-3 Certificateholders' Interest based
on the Floating Allocation Percentage
during any period (a "Nonprincipal
Period") that is not the Series 1999-3
Accumulation Period or an Early
Amortization Period and based on the
Principal
12
Allocation Percentage during the Series
1999-3 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
Invested Amount as of the last day of the
Series 1999-3 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 Series 1999-3
Certificates have been paid in full, zero
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 1999-3 Certificates
and of other Series of Certificates
entitled thereto.
Registration of Series 1999-3
Certificates ................ The Series 1999-3 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
1999-3 Certificates will be entitled to
receive a definitive certificate
representing such person's interest except
under certain limited circumstances.
Series 1999-3 Certificateholders may only
hold their Series 1999-3 Certificates
through DTC. Series 1999-3 Certificates
may not be held through Cedelbank 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
13
of which the Monthly Servicing Fee has
been waived.
Optional Repurchase ............. The Series 1999-3 Certificateholders'
Interest will be subject to optional
repurchase by the Servicer on any
Distribution Date after the Invested
Amount is reduced to an amount less than
or equal to $100,000,000 (10% of the
initial outstanding principal amount of
the Series 1999-3 Certificates). The
purchase price will equal the sum of (i)
the Invested Amount on the Determination
Date preceding the Distribution Date on
which the purchase is scheduled to be
made, (ii) accrued and unpaid interest on
the Series 1999-3 Certificates at the
applicable Series 1999-3 Certificate Rate
(together with interest on overdue
interest) and (iii) any outstanding
Carry-over Amount.
Series 1999-3 Termination Date... July 15, 2004.
ERISA Considerations ............ Series 1999-3 Certificates may be eligible
for purchase by employee benefit plans.
Certificate Ratings ............. It is a condition to the issuance of the
Series 1999-3 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 ............ July 22, 1999.
Series Cut-Off Date ............. June 30, 1999.
14
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, 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 March 31, 1999. Furthermore,
CFC, directly or as successor to Chrysler Financial Corporation or CCC, has
extended credit lines to 1,176 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 March
31, 1999) and 422 non-DaimlerChrysler dealers (representing approximately 15%
of such aggregate credit lines). As of March 31, 1999, the balance of
Principal Receivables in the accounts of dealers serviced by CFC (the "U.S.
Wholesale Portfolio") was approximately $10.2 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 March 31, 1999, the average credit lines per dealer in the
U.S. Wholesale Portfolio for new and used vehicles (which includes Auction
Vehicles) were $3.45 million and $0.47 million, respectively, and the average
balance of principal receivables per dealer was $3.20 million. As of March
31, 1999, the aggregate total receivables balance as a percentage of the
aggregate total credit line was approximately 81.5%.
The following table sets forth the percentages of dealer account
balances by year of credit line origination for the U.S. Wholesale Portfolio.
Portfolio Percentages by Year
of Credit Line Origination
As of March 31, 1999
Prior to
1999 1998 1997 1996 1995 1994 1993 1993
- ---- ---- ---- ---- ---- ---- ---- -----
1.74% 8.60% 6.89% 5.58% 6.90% 3.55% 6.56% 60.18%
As of March 31, 1999, the weighted average spread over the Prime
Rate charged to dealers in the U.S. Wholesale Portfolio was approximately
0.79%.
Used Vehicles (which excludes Auction Vehicles) represented
approximately 3.47% of the aggregate principal amount of receivables in the
U.S. Wholesale Portfolio as of March 31, 1999. As of March 31, 1999, Used
Vehicles represented approximately 3.64% 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.
15
Finance Hold Experience
As of December 31,
<TABLE>
<CAPTION>
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>
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.
Dealer Trouble Experience
<TABLE>
<CAPTION>
As of
March 31, As of December 31,
--------- ------------------------------------------------------------
1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Number of Dealers ...... 29 21 24 20 6 12 21 56 100 129
Percentage of Dealers ... 0.9% 0.7% 0.7% 0.6% 0.2% 0.3% 0.6% 1.8% 3.1% 4.2%
</TABLE>
THE ACCOUNTS
As of March 31, 1999, with respect to the Accounts in the Trust:
(a) there were approximately 2,900 Accounts and the Principal Receivables
balance was approximately $9.2 billion; (b) the average credit lines per
Dealer for new and used vehicles (which include Auction Vehicles) were
approximately $3.31 million and $0.49 million, respectively, and the average
balance of Principal Receivables per Dealer was approximately $3.18 million;
and (c) the aggregate total Receivables balance as a percentage of the
aggregate total credit line was approximately 83.5%. 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 $11.9 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.
16
Portfolio Percentages by Year
of Credit Line Origination
As of March 31, 1999
Prior to
1999 1998 1997 1996 1995 1994 1993 1993
- ---- ---- ---- ---- ---- ---- ---- -----
0.00% 5.00% 7.07% 5.89% 6.00% 3.84% 7.17% 65.03%
As of March 31, 1999, the weighted average spread over the Prime
Rate charged to Dealers was approximately 0.78%.
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.
Loss Experience for the U.S. Wholesale Portfolio
<TABLE>
<CAPTION>
Three Month
Ended March 31, Year Ended December 31,
--------------- ------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Principal Receivables Balance(1) ............ $9,791 $9,530 $9,236 $8,877 $8,825 $8,256 $6,754
Net Losses/(Net Recoveries)(2) ...................... $ (0) $ (0) $ 11 $ 4 $ (0) $ (1) $ (1)
Net Losses/(Net Recoveries) as a Percent of
Liquidations ...................................... (0.001)% (0.000)% 0.020% 0.007% (0.000)% (0.002)% (0.003)%
Net Losses/(Net Recoveries) as a Percent of Average
Principal Receivables Balance ..................... (0.00)% (0.00)% 0.12% 0.04% (0.00)% (0.01)% (0.01)%
17
Loss Experience for the U.S. Wholesale Portfolio (Continued)
<CAPTION>
Year Ended December 31,
------------------------------------------------------------
1993 1992 1991 1990 1989 1988 1987
---- ---- ---- ---- ---- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Principal
Receivables Balance(1) ............................ $6,271 $5,344 $4,826 $4,726 $4,933 $4,129 $3,787
Net Losses/(Net Recoveries)(2) ...................... $ 12 $ 26 $ 36 $ 23 $ 13 $ 3 $ 2
Net Losses/(Net Recoveries) as a Percent of
Liquidations ...................................... 0.035% 0.098% 0.163% 0.117% 0.060% 0.015% 0.015%
Net Losses/(Net Recoveries) as a Percent of Average
Principal Receivables Balance ..................... 0.19% 0.49% 0.75% 0.49% 0.26% 0.07% 0.06%
<CAPTION>
Year Ended December 31,
----------------------------------------------------
1986 1985 1984 1983 1982 1981
---- ---- ---- ---- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C>
Average Principal Receivables Balance(1) ............ $2,991 $2,532 $ 2,098 $1,461 $1,451 $1,390
Net Losses/(Net Recoveries)(2) ...................... $ 3 $ 1 $ (2) $ 2 $ 14 $ 12
Net Losses/(Net Recoveries) as a Percent of
Liquidations ...................................... 0.023% 0.004% (0.019)% 0.023% 0.239% 0.225%
Net Losses/(Net Recoveries) as a Percent of Average
Principal Receivables Balance ..................... 0.10% 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, except for the three months ended March 31, 1999 and 1998 which
are based on a four-month average.
(2) Net losses in any period are gross losses less recoveries for such
period.
(3) Percentages for the three months ended March 31, 1999 and 1998 are
expressed on an annualized basis.
</TABLE>
18
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 As of
March 31, December 31,
----------- -----------------------------------------------------
Days 1999 1998 1998 1997 1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1-120 ........... 77.5% 76.0% 81.7% 80.1% 80.4% 82.2% 82.5% 82.4% 77.2% 75.9%
121-180 ......... 11.5 12.1 11.0 10.8 10.0 9.3 10.1 9.6 13.8 12.9
181-270 ......... 8.6 8.4 4.1 4.2 5.0 3.8 4.0 4.6 4.8 4.8
over 270 ........ 2.4 3.5 3.2 4.9 4.6 4.7 3.4 3.4 4.2 6.4
</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.
Geographic Distribution of Accounts in the Trust
As of March 31, 1999
<TABLE>
<CAPTION>
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>
California ...... $ 760,753,484.34 8.27% 187 6.46%
Texas ........... 713,712,898.95 7.76 182 6.29
New York ........ 608,293,420.41 6.62 186 6.43
Illinois ........ 562,401,684.93 6.12 159 5.49
New Jersey ...... 516,055,330.99 5.61 133 4.60
Florida ......... 507,894,691.03 5.52 110 3.80
Michigan ........ 496,898,658.11 5.40 134 4.63
Other(1) ........ 5,029,548,335.12 54.70 1,803 62.30
----------------- ------ ----- ------
Total ........... $9,195,558,503.88 100.00% 2,894 100.00%
================= ====== ===== ======
<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 100.00% due to rounding.
</TABLE>
19
MATURITY AND PRINCIPAL PAYMENT CONSIDERATIONS
Principal with respect to the Series 1999-3 Certificates will be
payable if an Early Amortization Period that is not terminated has commenced.
Full amortization of the Series 1999-3 Certificates by the July 2002
Distribution Date (the "Series 1999-3 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 Series
1999-3 Accumulation Period Length the greater the likelihood that payment of
the Series 1999-3 Certificates in full by the Series 1999-3 Expected Payment
Date 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 Series 1999-3 Certificates enters into an
early amortization period or reinvestment period after the January 2002
Distribution Date, Principal Collections allocated to such Series generally
will not be available to be reallocated to make payments of principal of the
Series 1999-3 Certificates and the final payment of principal of the Series
1999-3 Certificates may be later than the Series 1999-3 Expected Payment
Date.
Because an Early Amortization Event with respect to the Series
1999-3 Certificates may occur which would initiate an Early Amortization
Period, the final distribution of principal on the Series 1999-3 Certificates
may be made prior to the scheduled termination of the Series 1999-3 Revolving
Period or prior to the Series 1999-3 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 March of 1999
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 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.
20
Monthly Payment Rates for the U.S. Wholesale Portfolio
<TABLE>
<CAPTION>
Three Months
Ended March 31, Year Ended December 31,
--------------- -----------------------------------------------------
1999 1998 1998 1997 1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Highest Month ............ 57.3% 47.0% 60.8% 57.7% 58.3% 59.1% 59.7% 54.7% 50.6% 49.0%
Lowest Month ............. 45.4 42.5 42.5 41.1 43.2 36.5 34.2 35.9 34.4 30.2
Average of the Months in
the Period ............. 50.7 44.2 50.0 48.2 49.0 45.6 50.3 46.6 41.3 38.4
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------
1990 1989 1988 1987 1986 1985 1984 1983 1982 1981
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Highest Month ................. 42.1% 41.5% 48.7% 40.3% 56.7% 45.9% 43.7% 45.9% 35.5% 34.3%
Lowest Month .................. 25.3 29.5 29.5 26.8 27.7 35.8 35.7 37.7 29.0 27.4
Average of the Months in the
Period ...................... 35.7 35.6 41.2 34.2 37.7 40.1 39.9 42.2 32.9 32.2
</TABLE>
21
