UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE NOT REQUIRED)
For the period December 1, 1998 (date of formation) through March 31, 1999
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from __________________ to _________________________
Commission file number 333-64565
NISSAN AUTO RECEIVABLES 1998-A GRANTOR TRUST
--------------------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK
(governing law of pooling
and servicing agreement) NOT APPLICABLE
- ---------------------------- ---------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
c/o Nissan Motor Acceptance Corporation, Servicer
990 West 190th Street, Torrance, California 90502
-------------------------------------------------
(Address of principal executive offices)
(310) 719-8013
--------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
----
Securities registered pursuant to Section 12(g) of the Act: None
----
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. X Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. X
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filing. (See
definition of affiliate in $ 0 Rule 405, 17 CFR 230.405.) $0
<PAGE>
This Annual Report on Form 10-K is being filed by Nissan Motor
Acceptance Corporation ("NMAC"), as Servicer, on behalf of Nissan Auto
Receivables 1998-A Grantor Trust (the "Trust"), established pursuant to a
Pooling and Servicing Agreement, dated as of December 1, 1998, among Nissan Auto
Receivables Corporation, as Seller (the "Seller"), NMAC, as servicer and in its
individual capacity, and Norwest Bank Minnesota, National Association, as
trustee (the "Trustee"), pursuant to which the 5.45% Asset Backed Certificates,
Class A (the "Class A Certificates") registered under the Securities Act of 1933
were issued by the Trust. Certain information that may otherwise have been
required to be included herein pursuant to Form 10-K has been omitted herefrom,
or in certain cases certain information has been included herein in lieu of such
otherwise required information, in accordance with the letter, dated June 28,
1996 (the "No-Action Letter"), of the staff of the Office of Chief Counsel of
the Division of Corporation Finance of the Securities and Exchange Commission
issued with respect to series of pass-through securities issued by trusts formed
by the Seller or an affiliate thereof, as originator, including the
Certificates.
PART I
Item 2. PROPERTIES.
-----------
The following table sets forth the aggregate information of the Trust for
the period from December 1, 1998 through March 31, 1999:
<TABLE>
<S> <C>
Distributions Allocable to Principal.......................$188,439,000.00
Distributions Allocable to Income...........................$16,636,000.00
Amounts Received from the Yield Supplement
Account Distributed as Income.............................$862,000.00
Servicing Fees Paid to Servicer (NMAC).......................$3,052,000.00
Class A Percentage of Servicing Fees...................................89%
Class B Percentage of Servicing Fees...................................11%
Additional Servicing Compensation
Paid to Servicer (NMAC)..........................................0.00
Net Losses...................................................$2,723,000.00
Net Liquidation Proceeds Received............................$1,424,000.00
Average Rate and Percentages for the period from December 1, 1998 through March
31, 1999
Average Net Loss Ratio (including repossessions)......................0.94%
</TABLE>
<TABLE>
<CAPTION>
Number of Dollar Amount
Delinquency Ratios Contracts
------------------ ---------
<S> <C> <C>
31-60 Days Delinquent 0.83% 0.92%
61-90 Days Delinquent 0.09% 0.10%
91 Days or More Delinquent 0.01% 0.01%
</TABLE>
Item 3. LEGAL PROCEEDINGS.
------------------
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
----------------------------------------------------
Not applicable.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
--------------------
All Class A Certificates issued by the Trust are registered
in the name of Cede & Co. Within the meaning of the
No-Action Letter, the number of "holders of record" of the
Class A Certificates as of March 31, 1999, was 26.
There is no established public trading market for the Class
A Certificates.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
--------------------------------------------
The audited financial statements of the Trust and the
related notes are included herein on pages F-1 to F-10.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
-------------------------
Not applicable.
<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K.
---------
(a) List of documents filed as part of the Annual Report:
1. Index to Financial Statements: Page
------------------------------ Number
------
Cover Page .........................................F-1
Independent Auditors' Report .......................F-2
Balance Sheet as of March 31, 1999 .................F-3
Statement of Income for the period December 1, 1998
(date of formation) through March 31, 1999......F-4
Statement of Changes in Net Assets Held in Trust
for the period December 1, 1998 (date of
formation) through March 31, 1999...............F-5
Statement of Cash Flows for the period December 1,
1998 (date of formation) through
March 31, 1999..................................F-6
Notes to Financial Statements.......................F-7
2. Financial Statement Schedules:
------------------------------
Not applicable.
3. Exhibits:
---------
Officer's Certificate dated as of March 31, 1999
The Registrant has also included herein the
annualized financial information set forth in Item 2.
(b) Reports on Form 8-K:
--------------------
The Trust filed Current Reports on Form 8-K regarding monthly
distributions of principal and interest to certificateholders
on January 21, 1999 for the period November 1, 1998 through
December 31, 1998, on February 3, 1999 to amend the Form 8-K
previously filed on January 21, 1999, on February 19, 1999 for
the month ended January 31, 1999, on March 18, 1999 for the
month ended February 28, 1999 and on April 19, 1999 for the
month ended March 31, 1999. Included in each such Form 8-K
report as Exhibit 99.1 is the monthly servicing report for
each respective month end as provided by the Servicer to the
Trustee.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 of 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: June 28, 1999
Nissan Auto Receivables 1998-A
Grantor Trust (Registrant)
By: Nissan Motor Acceptance Corporation,
as Servicer
By: /s/ Tomoaki Shimazu
-------------------
Name: Tomoaki Shimazu
Title: Vice President, Finance
and Corporate Planning
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Exhibit No. Description Page
----------- ----------- ----
99.1 Officer's Certificate dated as of March 31, 1999 7
<PAGE>
NISSAN MOTOR ACCEPTANCE CORPORATION
OFFICER'S CERTIFICATE
---------------------
The undersigned, Tomoaki Shimazu, Vice President, Finance and
Corporate Planning of NISSAN MOTOR ACCEPTANCE CORPORATION, a California
corporation (the "Company"), does hereby certify, in his capacity as such
corporate officer, as follows:
(1) The undersigned has caused a review of the activities of
the Company, in its capacity as Servicer, during the period December 15, 1998
through March 31, 1999, and of its performance pursuant to that certain Pooling
and Servicing Agreement dated as of December 1, 1998 (the "Agreement") by and
among the Company, Nissan Auto Receivables Corporation, as Seller, and Norwest
Bank Minnesota, National Association, as Trustee, to be conducted under his
supervision; and
(2) To the best of the undersigned's knowledge, based upon
such review, the Company has fulfilled all of its obligations under the
Agreement for the period December 15, 1998 through March 31, 1999.
This Officer's Certificate is being furnished to Norwest Bank
Minnesota, National Association, as Trustee, Standard & Poor's Ratings Services
and Moody's Investors Service, Inc., as required by Section 4.10(a) of the
Agreement.
IN WITNESS WHEREOF, I have set my hand effective as of the
31st day of March, 1999.
By: /s/ Tomoaki Shimazu
-------------------
Tomoaki Shimazu
Vice President, Finance and Corporate Planning
<PAGE>
NISSAN AUTO RECEIVABLES
1998-A GRANTOR TRUST
Financial Statements as of March 31, 1999, and
for the Period December 1, 1998 (date of
formation) through March 31, 1999
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
Nissan Auto Receivables 1998-A Grantor Trust:
We have audited the accompanying balance sheet of Nissan Auto Receivables 1998-A
Grantor Trust (the "Trust") as of March 31, 1999, and the related statements of
income, changes in net assets held in trust, and cash flows for the period
December 1, 1998 (date of formation) through March 31, 1999. These financial
statements are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Trust as of March 31, 1999, and results
of its operations and cash flows for the period December 1, 1998 (date of
formation) through March 31, 1999 in conformity with generally accepted
accounting principles.
May 5, 1999
F-2
<PAGE>
NISSAN AUTO RECEIVABLES 1998-A GRANTOR TRUST
BALANCE SHEET
(Dollars in Thousands)
- --------------------------------------------------------------------------------
March 31, 1999
--------------
ASSETS:
- -------
Cash and cash equivalents in collection account (Notes 2 and 4) $ 45,324
Finance receivables (Notes 2, 4, 6 and 8) ..................... 808,333
Collections receivable from Servicer (Note 2) ................. 2,286
Receivable from yield supplement account (Note 5) ............. 197
--------
TOTAL ASSETS .................................................. $856,140
========
LIABILITIES:
- ------------
Servicing fee payable (Notes 1 and 2) ......................... $ 709
Distributions payable - Class A (Note 4) ...................... 41,420
Distributions payable - Class B (Note 4) ...................... 5,118
Payable to Seller ............................................. 560
--------
Total liabilities ...................................... 47,807
======
NET ASSETS HELD IN TRUST:
- -------------------------
Asset backed certificates, Class A (Notes 1, 3, 4 and 6) ...... 719,416
Asset backed certificates, Class B (Notes 1, 3, 4 and 6) ...... 88,917
--------
Total net assets held in trust ................................ 808,333
-------
TOTAL LIABILITIES AND NET ASSETS HELD IN TRUST ................ $856,140
========
See accompanying notes to financial statements.
F-3
<PAGE>
STATEMENT OF INCOME
(Dollars in Thousands)
- --------------------------------------------------------------------------------
Period
December 1, 1998
(Date of Formation)
through
March 31, 1999
--------------
INCOME:
- -------
Interest income on finance receivables (Note 4) ...... $25,598
Interest income from yield supplement account (Note 5) 862
---
Total income ................................... 26,460
======
EXPENSE:
- --------
Servicing fee (Notes 1, 2, 3, and 4) ................. 3,052
Principal losses (Notes 3 and 4) ..................... 2,723
Excess amounts paid to Seller (Notes 3 and 4) ........ 4,049
-----
Total expense .................................. 9,824
-----
NET INCOME ........................................... $16,636
=======
See accompanying notes to financial statements.
F-4
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS HELD IN TRUST
Period December 1, 1998 (Date of Formation) through March 31, 1999
(Dollars in Thousands)
- --------------------------------------------------------------------------------
Class A Class B Total
------- ------- -----
Issuance of asset backed securities (Note 1) $ 889,551 $ 109,944 $ 999,495
Net income 14,806 1,830 16,636
Interest distributions (Notes 3 and 4) (14,806) (1,830) (16,636)
Principal distributions (Notes 3 and 4) (170,135) (21,027) (191,162)
-------- ------- --------
Net assets held in Trust at March 31, 1999 $ 719,416 $ 88,917 $ 808,333
========= ========= =========
See accompanying notes to financial statements.
F-5
<PAGE>
STATEMENT OF CASH FLOWS
(Dollars in Thousands)
- --------------------------------------------------------------------------------
Period
December 1, 1998
(Date of Formation)
through
March 31, 1999
--------------
Cash flows from operating activities:
Net income .......................................................... $ 16,636
Adjustments to reconcile net income to net cash
provided by operating activities:
Excess amounts received and allocated to principal losses ........... 2,723
Changes in operating assets and liabilities:
Increase in collections receivable from Servicer .................... (2,286)
Increase in receivable from yield supplement account ................ (197)
Increase in servicing fee payable ................................... 709
Increase in payable to Seller ....................................... 560
---------
Net cash provided by operating activities ........................... 18,145
Net cash provided by investing activities - principal payments
received from finance receivables ................................... 188,439
---------
Cash flows from financing activities:
Trust principal distributions
Class A certificateholders ....................................... (132,155)
Class B certificateholder ........................................ (16,334)
Trust interest distributions
Class A certificateholders ....................................... (11,366)
Class B certificateholder ........................................ (1,405)
---------
Net cash used in financing activities ............................... (161,260)
---------
Cash and cash equivalents at March 31, 1999 ......................... $ 45,324
=========
Supplemental disclosure of cash flow information --
Non-cash investing activities:
Purchase of finance receivables in exchange for asset
backed certificates ................................................ $ 999,495
=========
See accompanying notes to financial statements.
F-6
<PAGE>
NISSAN AUTO RECEIVABLES 1998-A GRANTOR TRUST
NOTES TO FINANCIAL STATEMENTS
PERIOD DECEMBER 1, 1998 (DATE OF FORMATION) THROUGH MARCH 31, 1999
- --------------------------------------------------------------------------------
1. GENERAL INFORMATION
The Nissan Auto Receivables 1998-A Grantor Trust (the "Trust") was
formed by Nissan Auto Receivable Corporation (the "Seller") by selling
and assigning $999,495,000 of retail automotive vehicle finance
receivables and the related security interests in the vehicles
financed thereby to Norwest Bank Minnesota, National Association, as
Trustee, in exchange for Class A certificates representing an
undivided ownership interest of 89% in the Trust and for the Class B
certificate representing an undivided ownership interest of 11% in the
Trust. The Class A certificates were remarketed to the public and the
Class B certificate was retained by the Seller. The rights of the
Class B certificateholder to receive distributions are subordinated to
the rights of the Class A certificateholders. The Seller has the
option to repurchase the remaining receivables on or after the date on
which the principal balance declines below 10% of the aggregate amount
financed.
The parent of the Seller, Nissan Motor Acceptance Corporation (the
"Company" or the "Servicer") services the receivables pursuant to a
Pooling and Servicing Agreement (the "Agreement") dated as of December
1, 1998 and is compensated for acting as the Servicer. In order to
facilitate its servicing functions and minimize administrative burdens
and expenses, the Company retains physical possession of the documents
relating to the receivables as custodian for the Trustee. The Trust
has no employees.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - The financial statements have been prepared on
an accrual basis of accounting. The preparation of these financial
statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from
those estimates.
CASH AND CASH EQUIVALENTS - The Company considers investments
purchased with a maturity of three months or less to be cash
equivalents.
Cash and cash equivalents in the collection account as of March 31,
1999 amounted to $45,324,000, which represents payments received by
the Servicer during March 1999.
COLLECTIONS RECEIVABLE FROM SERVICER - Collections receivable from the
Servicer amounted to $2,286,000 and are substantially comprised of
collections received by the Servicer on March 31, 1999 and deposited
in the collection account on April 1, 1999.
F-7
<PAGE>
NISSAN AUTO RECEIVABLES 1998-A GRANTOR TRUST
FINANCE RECEIVABLE - Interest income on these receivables is
calculated using the simple interest method and is recorded as earned.
The finance receivables have a weighted average coupon rate of 8.52%
and a weighted average maturity of 39 months at March 31, 1999.
SERVICING FEE - The servicing fee is calculated as 1% of the beginning
balance of finance receivables and is recorded on a monthly basis. The
amount of servicing fee for the period ended March 31, 1999 amounted
to $3,052,000, of which $709,000 is included in servicing fee payable
at March 31, 1999.
3. PRIORITIES OF DISTRIBUTIONS
The total collections received by the Trust are distributed in the
following priority:
Servicing fee to Seller
Unpaid Trustee fees and expenses
Class A interest at pass-through rate
Class A principal (including losses)
Deposit to Class A Subordination Spread Account
Class B interest at pass-through rate
Class B principal (including losses)
Yield Supplement Account Release to Seller
Excess amounts to Seller
If losses are greater than the excess amounts, the Class B
certificateholder will not receive its allocated principal. The
principal shortfall is carried over to future periods and is reduced
by excess collections, if any.
4. PRINCIPAL AND INTEREST PAYMENTS
Principal (including prepayments) is passed through on each
distribution date commencing January 15, 1999, as defined in the
Agreement. Principal consists of payments on the receivables that are
allocable to the repayment of the amount financed. Interest is passed
through to certificateholders on each distribution date, as defined in
the Agreement, commencing January 15, 1999, at a pass-through rate of
5.45% per annum, calculated using the simple interest method. Excess
amounts, if any, which are the difference between the yield of the
finance receivables, the servicing fee, the pass-through rate and
losses, are distributed to the Seller in accordance with the terms of
the Agreement.
F-8
<PAGE>
NISSAN AUTO RECEIVABLES 1998-A GRANTOR TRUST
The "as-of" date of the finance receivables was October 31, 1998.
Principal payments that passed through on January 15, 1999 included
principal payments for the period November 1, 1998 to November 30,
1998. Interest collected for the period prior to the date of formation
of the Trust was distributed to the Seller.
The cash flows for the period ended March 31, 1999 are summarized as
follows (dollars in thousands):
Excess
amnts
Intrst allctd
at pass- Prncpl to Excess
Srvcng thru pymnts prncpl amounts
fee rate rcvd losses dstrbtd
--- ---- ---- ------ -------
Servicer
Distributed .................. $ 2,343 $ -- $ -- $ -- $ --
Distributions to be paid ..... 709
Class A certificateholders
Distributed .................. 11,366 132,155
Distributions to be paid ..... 3,440 37,980
Class B certificateholder
Distributed .................. 1,405 14,669 1,664
Distributions to be paid ..... 425 3,635 1,059
Seller
Excess amounts paid to Seller 3,489
Excess amounts to be paid to 560
Seller
------- -------- -------- ------ ------
Total amount distributed
and to be paid ............... $ 3,052 $ 16,636 $188,439 $2,723 $4,049
======= ======== ======== ====== ======
5. YIELD SUPPLEMENT ACCOUNT
The Agreement requires the Seller to set up a Yield Supplement Account
("YSA Account"), which is a separate trust account for the benefit of
the Class A certificateholders. The initial deposit required and made
by the Seller amounted to $4,107,000. This account is used to
compensate the Class A certificateholders for all receivables
purchased by the Trust with a yield less than the pass-through rate of
5.45%. Amounts in the YSA Account, which are released to the Class A
certificateholders on a monthly basis, are calculated as one-twelfth
times the difference between the yield of these receivables and the
pass-through rate. The amount in the YSA Account at March 31, 1999 was
$3,066,000, which included $197,000 which is payable to the Trust. The
total amount of interest received from the YSA Account amounted to
$862,000 for the period ended March 31, 1999.
F-9
<PAGE>
NISSAN AUTO RECEIVABLES 1998-A GRANTOR TRUST
6. CREDIT ENHANCEMENT
To protect the Class A certificateholders, the Agreement requires the
Seller to set up a Subordination Spread Account ("SSA Account"), which
is a separate trust account for the benefit of the Class A
certificateholders. The initial deposit required was $9,995,000.
Additionally, if certain loss and/or delinquency ratios rise above set
limits, the Seller is required to deposit in the SSA Account all
amounts otherwise distributable to the Class B certificateholder and
all excess servicing amounts otherwise distributable to the Seller,
until the SSA Account reaches the level specified in the Agreement.
The specified amount on March 31, 1999 was $14,992,000. The SSA
Account amounted to $14,992,000 on March 31, 1999.
Neither the Class B certificateholder nor the Seller will receive any
distributions while the loss and/or delinquency ratios continue to be
above the set limits for three consecutive months and until the SSA
Account reaches the level specified.
As of March 31, 1999, the anticipated credit losses on finance
receivables based on historical loss experience are estimated to be
$18,297,000. Management believes that future receipts of excess
servicing amounts will be adequate to repay all amounts due to Class A
and Class B certificateholders, as such no allowance for bad debts has
been established.
7. FEDERAL INCOME TAXES
The Trust is classified as a grantor trust, and therefore is not
taxable as a corporation for federal income tax purposes. Each
certificateholder is treated as the owner of a pro rata undivided
interest in each of the receivables in the Trust.
8. ESTIMATED FAIR VALUES OF FINANCE RECEIVABLES
The fair value of the finance receivables was estimated by discounting
the future cash flows using current market discount rates and
historical prepayment and credit loss history. As of March 31, 1999,
the estimated fair value of the finance receivables was $805,522,000.
Cash and cash equivalents in collection account, other receivables,
and payables approximate fair values due to the short-term maturities
of these instruments.
************
F-10
