<PAGE>
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
Date of Report (Date of earliest event reported): December 16, 1996
GREEN TREE FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 01-08916 41-1807858
- ---------------------------- ------------------------ -------------------
(State or other Jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
1100 Landmark Towers, 345 St. Peter Street, Saint Paul, Minnesota 55102-1639
- -------------------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 293-3400
--------------
Not Applicable
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 1. Changes in Control of Registrant.
- ------- --------------------------------
Not applicable.
ITEM 2. Acquisition or Disposition of Assets.
- ------- ------------------------------------
Not applicable
ITEM 3. Bankruptcy or Receivership.
- ------- --------------------------
Not applicable
ITEM 4. Changes in Registrant's Certifying Accounting.
- ------- ---------------------------------------------
Not applicable
ITEM 5. Other Events.
- ------- ------------
Not applicable.
ITEM 6. Resignations of Registrant's Directors.
- ------- --------------------------------------
Not applicable
ITEM 7. Financial Statements and Exhibits.
- ------- ---------------------------------
(a) Financial statements of businesses acquired.
Not applicable
(b) Pro forma financial information.
Not applicable
2
<PAGE>
(c) Exhibits.
The following is filed herewith. The exhibit numbers correspond
with Item 601(b) of Regulation S-K.
Exhibit No. Description
----------- -----------
99 External Computational and Descriptive
Information distributed in connection with
$380,000,000 Recreational, Equipment and
Consumer Trust 1996-D.
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.
Date: December 18, 1996 GREEN TREE FINANCIAL CORPORATION
By: /s/ Phyllis A. Knight
_____________________________
Phyllis A. Knight
Vice President and Treasurer
3
<PAGE>
INDEX TO EXHIBITS
Exhibit
-------
Number Page
------ ----
99 External Computational and Descriptive 5
Information distributed in connection
with $380,000,000 Recreational, Equipment
and Consumer Trust 1996-D.
4
<PAGE>
TERM SHEET DATED DECEMBER 16, 1996
GREEN TREE FINANCIAL CORPORATION
GREEN TREE RECREATIONAL, EQUIPMENT AND CONSUMER TRUST 1996-D
$380,000,000 (APPROXIMATE)
Subject to Revision
SELLER/SERVICER: Green Tree Financial Corporation ("Green Tree").
INDENTURE TRUSTEE: First Trust National Association, St. Paul, Minnesota.
OWNER TRUSTEE: Wilmington Trust Company
UNDERWRITERS: Merrill Lynch & Co. (Lead), Lehman Brothers, Morgan Stanley
& Co. Incorporated
<TABLE>
<CAPTION>
A-1/HE A-1 A-2
Fixed Rate Notes Floating Rate Notes Floating Rate Notes
------------------------- ------------------------- ---------------------
<S> <C> <C> <C>
Amount $30,820,569 $280,779,431 $15,200,000
Rating (S&P/Fitch) AAA/AAA AAA/AAA AA/AA
WAL (to call) 4.12 2.26 2.26
Windows (to call) 1 - 81 1 - 81 1 - 81
Credit Enhancement 18% (Cl. A-2,A-3,A-4,B) + 18% (Cl. A-2,A-3,A-4,B) + 14% (Cl. A-3,A-4,B) +
Reserve Fund, if any Reserve Fund, if any Reserve Fund, if any
A-3 A-4 Fixed Rate
Floating Rate Notes Floating Rate Notes Certificates
------------------------- ------------------------- ---------------------
Amount $15,200,000 $12,350,000 $25,650,000
Rating (S&P/Fitch) A/A BBB/BBB A-/A
WAL (to call) 2.26 2.26 6.72
Windows (to call) 1 - 81 1 - 81 81 - 81
Credit Enhancement 10% (Cl. A-4,B) + 6.75% (Cl. B) + Green Tree
Reserve Fund, if any Reserve Fund, if any Limited Guaranty
</TABLE>
CUTOFF DATE: December 1, 1996 (or the date of origination, if later)
EXP. PRICING: December 18, 1996
EXP. SETTLEMENT: December 27, 1996
INTEREST/PRINCIPAL: The 15th day of each month (or if such 15th day is not a
business day, the next succeeding business day), commencing
on January 15, 1997.
ERISA: The Notes are expected to be ERISA eligible, subject to the
conditions set forth in the Prospectus Supplement. The
Certificates will not be ERISA eligible.
TAX STATUS: For federal income tax purposes, the Notes will be
characterized as debt, and the Trust will not be
characterized as an association (or a publicly traded
partnership) taxable as a corporation The Certificateholders
will agree to treat the Trust as partnership in which they
are partners for federal income tax purposes.
OPTIONAL REDEMPTION/
PREPAYMENT: Less than or equal to 10% of the Cutoff Date Pool Principal
Balance.
TRUST PROPERTY: The Trust's assets will generally include a pool of retail
installment sales contracts and promissory notes for the
purchase of a variety of consumer products and equipment
("Consumer Loan Contracts"), retail installment sales
contracts and promissory notes financing home improvements
("Home Improvement Contracts"), and closed-end home equity
loans ("Home Equity Contracts") and all payments due thereon
on or after December 1, 1996. The Consumer Loan Contracts,
Home Improvement Contracts and Home Equity Contracts are
referred to as the "Contracts".
[LOGO OF MERRILL LYNCH] 1
================================================================================
Recipients must read the information contained in the attached statement. Do not
use or rely on this information if you have not received and reviewed the
statement. If you have not received the statement, call your Merrill Lynch
account executive for another copy.
<PAGE>
CONTRACTS
The Contracts were originated or purchased by Green Tree in the ordinary
course of business. The information presented below pertains only to Contracts
originated through November 30, 1996 (the "Initial Contracts") as of the Cutoff
Date for each such Initial Contract. Additional Contracts (other than Home
Equity and Home Improvement Contracts), will be purchased by the Trust on the
Closing Date ("Subsequent Contracts"). Although the Subsequent Contracts sold to
the Trust will have characteristics that differ somewhat from the
characteristics of the Initial Contracts described herein, Green Tree does not
expect that the characteristics of the Subsequent Contracts will vary materially
from those of the Initial Contracts. Additionally, the Subsequent Contracts will
conform to certain criteria specified in the Sale and Servicing Agreement
between Green Tree and the Trust.
Green Tree expects that, on the Closing Date, the Contract Pool, which will
consist of Initial Contracts and Subsequent Contracts, will have an aggregate
principal balance as of the Cutoff Date of approximately $380,000,000. All of
the Contracts will be retail installment sales contracts, promissory notes and
closed-end home equity loans purchased by Green Tree from dealers, home
improvement contractors and correspondent lenders who regularly originate and
sell such contracts to Green Tree, or originated by Green Tree directly. The
Contracts are generally prepayable at any time without penalty.
INITIAL CONTRACT POOL
<TABLE>
<CAPTION>
% of Scheduled % of Cutoff Date Average
# of Contract Principal Pool Principal Principal
Asset Type Contracts Pool Balance Balance Balance
- ---------- --------- ---- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Horse Trailers 1,256 6.27% $ 13,036,260.45 3.89% $ 10,379.19
Marine 2,869 14.33% 42,838,842.94 12.80% 14,931.63
Motorcycle 5,004 25.00% 46,031,139.06 13.75% 9,198.87
Trucks 1,058 5.28% 80,007,465.28 23.91% 75,621.42
Aircraft 456 2.28% 46,698,589.67 13.95% 102,409.19
Sport Vehicles 3,502 17.50% 16,534,311.87 4.94% 4,721.39
Keyboard Instruments 805 4.02% 7,711,572.83 2.30% 9,579.59
Recreational Vehicles 2,177 10.87% 41,013,060.63 12.25% 18,839.26
Home Improvement 1,957 9.77% 10,045,522.17 3.00% 5,133.12
Home Equity 938 4.68% 30,820,569.47 9.21% 32,857.75
------ ------ --------------- ------ -----------
Total 20,022 100.00% $334,737,334.37 100.00% $ 16,718.48
====== ====== =============== ====== ===========
</TABLE>
<TABLE>
<CAPTION>
Wtd. Avg. Wtd. Avg. Original Wtd. Avg. Wtd. Avg.
Asset Type Contract Rate Scheduled Term Remaining Term(1) LTV Ratio
- ---------- ------------- -------------- ----------------- ---------
<S> <C> <C> <C> <C>
Horse Trailers 11.33% 123 122 83%
Marine 10.86% 143 141 83%
Motorcycle 13.81% 66 64 84%
Trucks 10.81% 49 49 92%
Aircraft 9.99% 157 157 88%
Sport Vehicles 15.90% 53 52 85%
Keyboard Instruments 11.84% 73 72 86%
Recreational Vehicles 10.41% 146 145 80%
Home Improvement 14.58% 87 86 NA
Home Equity 14.69% 200 197 NA/(2)/
------ --- --- --
Total 11.83% 109 108 86%
====== === === ==
</TABLE>
- -----------
(1) Based on scheduled payments due after the Cutoff Date and assuming no
prepayments on the Initial Contracts.
(2) Information not available with respect to Home Equity Contracts, which
represented 9.21% by aggregate principal balance of the Initial Contracts
as of the Cutoff Date.
[LOGO OF MERRILL LYNCH] 2
================================================================================
Recipients must read the information contained in the attached statement. Do not
use or rely on this information if you have not received and reviewed the
statement. If you have not received the statement, call your Merrill Lynch
account executive for another copy.
<PAGE>
GEOGRAPHIC DISTRIBUTION OF INITIAL CONTRACTS/(1)/
<TABLE>
<CAPTION>
Number % of Number Percent of
State of Contracts of Contracts Principal Balance Principal Balance
- -------------------------- ------------ ------------- ----------------- ------------------
<S> <C> <C> <C> <C>
California 3,832 19.15% $ 58,875,391.17 17.58%
Texas 2,201 11.00% 34,188,396.40 10.21%
Florida 1,978 9.89% 31,764,581.06 9.49%
Arizona 1,398 6.99% 22,318,682.16 6.67%
Other States/(2)/ 10,613 52.97% 187,590,283.58 56.05%
------ ------ --------------- ------
Total 20,022 100.00% $334,737,334.37 100.00%
====== ====== =============== ======
</TABLE>
- -------------------
(1) Based on the address of the Obligor set forth in Green Tree's records.
(2) Other States category consists of States each of which represented less
than 5.00% by aggregate principal balance of the Initial Contracts as of
the Cutoff Date.
YEARS OF ORIGINATION OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
% of Contract Pool
Number of Aggregate Principal by Outstanding
Year of Origination Contracts Balance Outstanding Principal Balance
- -------------------------------- ------------------- ------------------- ------------------
<S> <C> <C> <C>
1992 1 $ 2,886.95 0.00%
1993 3 14,699.56 0.00%
1994 13 103,380.77 0.03%
1995 48 809,736.18 0.24%
1996 19,957 333,806,630.91 99.73%
------ --------------- ------
Total 20,022 $334,737,334.37 100.00%
====== =============== ======
</TABLE>
DISTRIBUTION OF ORIGINAL LOAN-TO-VALUE RATIOS OF INITIAL CONTRACTS/(3)/
<TABLE>
<CAPTION>
% of Contract Pool
Number of Aggregate Principal by Outstanding
Loan-to-Value Ratio Contracts Balance Outstanding Principal Balance
- -------------------------------- ------------------- ------------------- ------------------
<S> <C> <C> <C>
Less than 61% 1,381 $ 11,654,080.14 3.97%
61 - 65% 512 5,567,731.04 1.89%
66 - 70% 736 8,556,269.06 2.91%
71 - 75% 1,218 13,598,975.62 4.63%
76 - 80% 1,860 27,179,962.68 9.25%
81 - 85% 2,587 43,679,623.68 14.86%
86 - 90% 5,939 92,354,293.77 31.43%
91 - 95% 1,525 36,331,193.12 12.36%
Over 95% 1,369 54,949,113.62 18.70%
------ --------------- ------
Total 17,127 $293,871,242.73 100.00%
====== =============== ======
</TABLE>
(3) Does not include information with respect to Home Equity Contracts, which
represent 9.21% by aggregate principal balance of the Initial Contracts as
of Cutoff Date, or Home Improvement Contracts, which represent 3.00% by
aggregate principal balance of the Initial Contracts as of Cutoff Date.
[LOGO] 3
- --------------------------------------------------------------------------------
Recipients must read the information contained in the attached statement. Do not
use or rely on this information if you have not received and reviewed the
statement. If you have not received the statement, call your Merrill Lynch
account executive for another copy.
<PAGE>
DISTRIBUTION OF ORIGINAL AMOUNTS OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
% of Contract Pool
Original Contract Number of Aggregate Principal by Outstanding
Amount (in Dollars) Contracts Balance Outstanding Principal Balance
- -------------------- --------- ------------------- ------------------
<S> <C> <C> <C>
Less than $10,000 11,720 $ 60,792,516.09 18.17%
$10,000 - $19,999 4,531 64,217,813.42 19.19%
$20,000 - $29,999 1,456 34,894,410.56 10.43%
$30,000 - $39,999 756 25,839,317.12 7.73%
$40,000 - $49,999 606 25,816,033.32 7.71%
$50,000 - $59,999 173 9,425,353.58 2.82%
$60,000 - $69,999 123 7,794,025.61 2.33%
$70,000 - $79,999 114 8,446,763.04 2.52%
$80,000 - $89,999 148 12,396,850.80 3.70%
$90,000 - $99,999 117 10,870,601.81 3.25%
$100,000 - $109,999 60 6,215,093.34 1.86%
$110,000 - $119,999 26 2,942,494.18 0.88%
$120,000 - $129,999 18 2,202,220.61 0.66%
$130,000 - $139,999 17 2,191,118.29 0.65%
$140,000 - $149,999 20 2,891,807.52 0.86%
$150,000 - $159,999 10 1,515,887.48 0.45%
$160,000 - $169,999 12 1,970,331.79 0.59%
$170,000 - $179,999 5 865,819.89 0.26%
$180,000 - $189,999 7 1,283,820.20 0.38%
$190,000 - $199,999 4 772,365.75 0.23%
$200,000 - $249,999 20 4,403,984.24 1.32%
$250,000 - $299,999 12 3,262,490.87 0.97%
$300,000 - $349,999 17 5,425,350.51 1.62%
$350,000 - $399,999 5 1,818,623.09 0.54%
$400,000 - $449,999 8 3,443,872.37 1.03%
$450,000 - $499,999 10 4,874,695.63 1.46%
$500,000 - $549,999 8 4,099,377.84 1.22%
$550,000 - $599,999 2 1,110,138.86 0.33%
$600,000 - $649,999 2 1,252,486.40 0.37%
$650,000 - $699,999 0 0.00 0.00%
$700,000 - $749,999 4 2,849,443.66 0.85%
$750,000 - $799,999 2 1,521,909.42 0.45%
$800,000 - $849,999 0 0.00 0.00%
$850,000 - $899,999 0 0.00 0.00%
$900,000 - $949,999 1 879,164.58 0.26%
$950,000 - $999,999 0 0.00 0.00%
Over $1,000,000 8 16,451,152.50 4.91%
------ --------------- ------
Total 20,022 $334,737,334.37 100.00%
====== =============== ======
</TABLE>
[LOGO OF MERRILL LYNCH] 4
- -------------------------------------------------------------------------------
Recipients must read the information contained in the attached statement. Do not
use or rely on this information if you have not received and reviewed the
statement. If you have not received the statement, call your Merrill Lynch
account executive for another copy.
<PAGE>
CONTRACT RATES OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
% of Contract Pool
Number of Aggregate Principal by Outstanding
Contract Rate Contracts Balance Outstanding Principal Balance
- -------------- ---------- ------------------- ------------------
<S> <C> <C> <C>
0.00% - 9.00% 146 $ 27,456,749.61 8.20%
9.01% - 10.00% 1,495 73,851,810.99 22.06%
10.01% - 11.00% 3,001 68,744,343.63 20.54%
11.01% - 12.00% 2,284 39,908,918.56 11.92%
12.01% - 13.00% 1,560 22,958,507.31 6.86%
13.01% - 14.00% 2,670 32,123,695.36 9.60%
14.01% - 15.00% 3,289 38,155,763.21 11.40%
15.01% - 16.00% 2,122 14,002,051.56 4.18%
16.01% - 17.00% 1,416 7,392,166.52 2.21%
Over 17.00% 2,039 10,143,327.62 3.03%
Total 20,022 $334,737,334.37 100.00%
====== =============== ======
</TABLE>
REMAINING MONTHS TO MATURITY OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
% of Contract Pool
Number of Aggregate Principal by Outstanding
Months Remaining Contracts Balance Outstanding Principal Balance
- ----------------- --------- ------------------- ------------------
<S> <C> <C> <C>
less than 31 1,133 $ 7,694,651.73 2.30%
31 - 60 10,271 127,246,476.17 38.01%
61 - 90 2,798 39,514,539.66 11.80%
91 - 120 2,680 41,639,019.51 12.44%
121 - 150 1,112 20,800,109.86 6.21%
151 - 180 1,601 76,003,265.31 22.71%
181 - 210 8 2,193,436.25 0.66%
211 - 240 417 19,606,073.16 5.86%
241 - 270 0 0.00 0.00%
271 - 300 2 39,762.72 0.01%
------ --------------- ------
Total 20,022 $334,737,334.37 100.00%
====== =============== ======
</TABLE>
[LOGO OF MERRILL LYNCH] 5
- -------------------------------------------------------------------------------
Recipients must read the information contained in the attached statement. Do not
use or rely on this information if you have not received and reviewed the
statement. If you have not received the statement, call your Merrill Lynch
account executive for another copy.
<PAGE>
STRUCTURE
DISTRIBUTIONS: Distributions of principal and interest on the Notes and
the Certificates are made to the extent of the Amount
Available (as defined below) on each Distribution Date.
The Amount Available on each Distribution Date generally
includes: (a) payments on the Contracts due and received
during the preceding month, plus (b) prepayments and
other unscheduled collections received during the
preceding month, plus (c) all collections in respect of
principal on the Consumer Loan and Home Improvement
Contracts received during the current month up to and
including the third business day prior to such
Distribution Date (but in no event later than the 10th
day of the month in which the Distribution Date occurs),
plus (d) any amounts deposited in respect of Contracts
repurchased by Green Tree pursuant to the Sale and
Servicing Agreement, plus (e) all earnings from the
investment of funds in the Collection Account, plus (f)
payments under the Limited Guaranty, minus (g) with
respect to Distribution Dates other than January 15,
1997, all collections of principal on the Consumer Loan
and Home Improvement Contracts received during the
preceding month up to and including the third business
day prior to the preceding Distribution Date (but in no
event later than the 10th day of the prior month).
The rights of the Class A-1/HE and Class A-1 Notes to
receive distributions on each Distribution Date will be
pari passu, and the rights of each other Class of Notes
will be subordinated to the rights of each Class of
Notes with a lower numeric designation. The Certificates
will not receive any distributions of interest until the
full amount of interest and principal payable on the
Notes on each Distribution Date has been paid. The
Certificates will not be entitled to receive any
distributions of principal until all of the Notes have
been paid in full.
CLASS A-1/HE AND A-1
INTEREST: Interest on the outstanding Class A-1/HE and Class A-1
Principal Balances will accrue from December 27, 1996,
or from the most recent Distribution Date, to but
excluding the following Distribution Date at the
applicable Class Rate (fixed for Class A-1/HE, and
floating based on 1 month LIBOR subject to 10.75% cap
for Class A-1) for such monthly period.
Any interest shortfalls will be carried forward, and
will bear interest at the applicable Class Rate, to the
extent legally permissible.
Interest on Class A-1/HE Notes will be calculated on
30/360 basis. Interest on Class A-1 will be calculated
on actual/360 basis.
CLASS A-1/HE AND A-1
PRINCIPAL: After the payment of all interest payable on Class A-
1/HE and Class A-1 Notes, to the extent of funds
available, Class A-1/HE Noteholders are entitled to
receive an amount equal to Class A-1/HE Formula
Principal Distribution Amount (as defined below) for
such Distribution Date plus the Unpaid Class A-1/HE
Principal Shortfall, if any, from prior Distribution
Dates, and Class A-1 Noteholders are entitled to receive
an amount equal to the sum of 86.73% (approximately) of
the Formula Principal Distribution Amount for such
Distribution Date plus the Unpaid Class A-1 Principal
Shortfall, if any, from Prior Distribution Dates.
The "Class A-1/HE Formula Principal Distribution Amount"
for each Distribution Date will generally be equal to
the sum of the following: (i) all scheduled payments of
principal due on each outstanding Home Equity Contract
during the preceding month; (ii) the scheduled principal
balance of each Home Equity Contract purchased by Green
Tree during the preceding month pursuant to the Sale and
Servicing Agreement; (iii) all partial principal
prepayments and principal prepayments in full received
during the preceding month; (iv) the scheduled principal
balance of each Home Equity Contract that became
liquidated during the preceding month; and (v) on any
[LOGO OF MERRILL LYNCH] 6
- -------------------------------------------------------------------------------
Recipients must read the information contained in the attached statement. Do not
use or rely on this information if you have not received and reviewed the
statement. If you have not received the statement, call your Merrill Lynch
account executive for another copy.
<PAGE>
Distribution Date which is on or after the Distribution
Date on which Class A-1, A-2, A-3 and A-4 Notes have
been paid in full, the Formula Principal Distribution
Amount less the amount, if any, distributed to the
Noteholders in payment of principal on the Class A-1,
A-2, A-3 and A-4 Notes on such Distribution Date.
The "Formula Principal Distribution Amount" for each
Distribution Date will generally be equal to the sum of
the following: (i) all scheduled payments of principal
due on each outstanding Contract during the preceding
month; (ii) the scheduled principal balance of each
Contract purchased by Green Tree during the preceding
month pursuant to the Sale and Servicing Agreement;
(iii) all partial principal prepayments applied and all
principal prepayments in full received during the
preceding month; (iv) the scheduled principal balance of
each Contract that became liquidated during the
preceding month; (v) all collections in respect of
principal on the Consumer Loan and Home Improvement
Contracts received during the current month up to and
including the third business day prior to such
Distribution Date (but in no event later than the 10th
day of the month in which Distribution Date occurs),
minus (vi) with respect to all Distribution Dates except
January 15, 1997, all collections of principal on the
Consumer Loan and Home Improvement Contracts received
during the preceding month up to and including the third
business day prior to the preceding Distribution Date
(but in no event later than the 10th day of the prior
month), minus (vii) the Class A-1/HE Formula Principal
Distribution Amount.
CLASS A-2 INTEREST: Interest on the outstanding Class A-2 Principal Balance
will accrue from December 27, 1996, or from the most
recent Distribution Date, to but excluding the following
Distribution Date at the Class A-2 Rate (floating, based
on 1 month LIBOR, subject to 10.75% cap) for such
monthly period. Interest will be paid to the extent of
funds available after payment of all interest and
principal on Class A-1/HE and Class A-1 Notes.
Any interest shortfalls will be carried forward, and
will bear interest at the Class A-2 Rate, to the extent
legally permissible. Interest on Class A-2 will be
calculated on actual/360 basis.
CLASS A-2 PRINCIPAL: To the extent of funds available after payment of all
interest and principal on Class A-1/HE and Class A-1
Notes and interest on Class A-2 Notes, Class A-2
Noteholders will be entitled to receive the sum of 4.70%
(approximately) of the Formula Principal Distribution
Amount for such Distribution Date plus the Unpaid Class
A-2 Principal Shortfall, if any, from prior Distribution
Dates.
CLASS A-3 INTEREST: Interest on the outstanding Class A-3 Principal Balance
will accrue from December 27, 1996, or from the most
recent Distribution Date, to but excluding the following
Distribution Date at the Class A-3 Rate (floating, based
on 1 month LIBOR, subject to 10.75% cap) for such
monthly period. Interest will be paid to the extent of
funds available after payment of all interest and
principal on Class A-1/HE, Class A-1, and Class A-2
Notes.
Any interest shortfalls will be carried forward, and
will bear interest at the Class A-3 Rate, to the extent
legally permissible. Interest on Class A-3 will be
calculated on actual/360 basis.
CLASS A-3 PRINCIPAL: To the extent of funds available after payment of all
interest and principal on Class A-1/HE, Class A-1 Notes
and Class A-2 Notes and interest on Class A-3 Notes,
Class A-3 Noteholders will be entitled to receive the
sum of 4.70% (approximately) of the Formula Principal
Distribution Amount for such Distribution Date plus the
Unpaid Class A-3 Principal Shortfall, if any, from prior
Distribution Dates.
CLASS A-4 INTEREST: Interest on the outstanding Class A-4 Principal Balance
will accrue from December 27, 1996, or from the most
recent Distribution Date, to but excluding the following
[LOGO OF MERRILL LYNCH] 7
================================================================================
Recipients must read the information contained in the attached statement. Do not
use or rely on this information if you have not received and reviewed the
statement. If you have not received the statement, call your Merrill Lynch
executive for another copy.
<PAGE>
Distribution Date at the Class A-4 Rate (floating, based
on 1 month LIBOR, subject to 10.75% cap) for such
monthly period. Interest will be paid to the extent of
funds available after payment of all interest and
principal on Class A-1/HE, Class A-1, Class A-2 and
Class A-3 Notes.
Any interest shortfalls will be carried forward, and
will bear interest at the Class A-4 Rate, to the extent
legally permissible. Interest on Class A-4 will be
calculated on actual/360 basis.
CLASS A-4 PRINCIPAL: To the extent of funds available after payment of all
interest and principal on Class A-1/HE, Class A-1 Notes,
Class A-2 Notes and Class A-3 Notes and interest on
Class A-4 Notes, Class A-4 Noteholders will be entitled
to receive the sum of 3.87% (approximately) of the
Formula Principal Distribution Amount for such
Distribution Date plus the Unpaid Class A-4 Principal
Shortfall, if any, from prior Distribution Dates.
CERTIFICATE INTEREST: Interest on the outstanding Certificate Principal
Balance will accrue from December 27, 1996, or from the
most recent Distribution Date, to but excluding the
following Distribution Date at the Pass-Through Rate.
Interest will be paid to the extent of funds available
after payment of all interest and principal on the
Notes.
Any interest shortfalls will be carried forward, and
will bear interest at the Pass-Through Rate, to the
extent legally permissible. Interest on Certificates
will be calculated on 30/360 basis.
CERTIFICATE PRINCIPAL: Commencing on the Distribution Date on which the Notes
have been paid in full, principal will be payable to the
Certificates in the amount of 100% of the Class A-1/HE
Formula Principal Distribution Amount and the Formula
Principal Distribution Amount for such Distribution Date
plus the Unpaid Certificate Principal Shortfall, if any,
from prior Distribution Dates.
[RESERVE ACCOUNT
(NOTES)](OPTIONAL): For the benefit of the Notes, Reserve Account may be
created with an initial deposit of $[ ] on the Closing
Date.
SPREAD ACCOUNT
(NOTES): Class A-2, A-3 and A-4 Noteholders will have the benefit
of a separate sub-account for each Class within the
Spread Account, to cover any interest deficiencies for
each Class. The Class A-2 sub-account will be funded on
the Closing Date. The Class A-3 and Class A-4 sub-
accounts will be funded with excess spread. If the sub-
accounts are drawn upon, they will be replenished to the
required levels as specified in the Sale and Servicing
Agreement.
LIMITED GUARANTY
(CERTIFICATES): Green Tree will be obligated under the Limited Guaranty
to pay for any Distribution Date the amount, equal to
the difference, if any, between the Certificate Formula
Distribution Amount (accrued and unpaid interest on the
Certificates, plus 100% of the Class A-1/HE Formula
Principal Distribution Amount and the Formula Principal
Distribution Amount, if Certificates are entitled to
principal payments, plus any Unpaid Certificate
Principal Shortfall, and plus any Certificate Principal
Liquidation Loss not previously paid) and the remaining
Amount Available in the Collection Account after
distribution of all interest and principal payable on
the Notes on such Distribution Date.
LOSSES ON LIQUIDATED
CONTRACTS: If net liquidation proceeds from a liquidated contract
are less than the scheduled principal balance of such
liquidated contract, the deficiency will generally be
absorbed by the monthly servicing and guaranty fee, then
by the fee payable to the general partner of the Trust,
then by the Certificateholders, and then by each Class
of Notes in inverse numeric order.
[LOGO] 8
================================================================================
Recipients must read the information contained in the attached statement. Do not
use or rely on this information if you have not received and reviewed the
statement. If you have not received the statement, call your Merrill Lynch
executive for another copy.
<PAGE>
PRICING SPEED
This transaction will be priced using the following "Base Case" prepayment
rates:
Home Equity 13% CPR
Home Improvement 20% CPR
Horse Trailers, Aircraft, Sport Vehicles,
Keyboard Instruments, RV's 18% CPR
Marine 325% SPA
Motorcycles 28% CPR
Trucks 1% ABS
CPR (Constant Prepayment Rate) represents an assumed constant rate of
prepayment each month, expressed as a per annum percentage of the outstanding
principal balance of the Home Equity Contracts, the Home Improvement Contracts
and the Contracts related to all Products other than marine products and trucks;
SPA (Standard Prepayment Assumption) represents an assumed rate of prepayment
each month of the outstanding principal balance of the Contracts related to
marine products; ABS (Absolute Prepayment Model) represents an assumed rate of
prepayment each month relative to the original number of Contracts related to
trucks.
AVERAGE LIFE SENSITIVITIES
AT THE RESPECTIVE PERCENTAGES OF THE BASE CASE PREPAYMENT MODEL
<TABLE>
<S> <C> <C> <C> <C> <C>
TO CALL 80% 90% 100% 110% 120%
--- --- ---- ---- ----
A-1/HE Notes
Window 1 - 92 1 - 86 1 - 81 1 - 76 1 - 71
Avg. Life 4.81 4.44 4.12 3.82 3.55
A-1 thru A-4 Notes
Window 1 - 92 1 - 86 1 - 81 1 - 76 1 - 71
Avg. Life 2.53 2.39 2.26 2.15 2.04
Certificates
Window 92 - 92 86 - 86 81 - 81 76 - 76 71 - 71
Avg. Life 7.63 7.13 6.72 6.30 5.88
TO MATURITY 80% 90% 100% 110% 120%
--- --- ---- ---- ----
A-1/HE Notes
Window 1 - 107 1 - 101 1 - 95 1 - 90 1 - 85
Avg. Life 5.04 4.66 4.33 4.03 3.76
A-1 thru A-4 Notes
Window 1 - 94 1 - 88 1 - 83 1 - 79 1 - 74
Avg. Life 2.53 2.39 2.26 2.15 2.05
Certificates
Window 107 - 197 101 - 197 95 - 197 90 - 197 85 - 197
Avg. Life 11.00 10.60 10.19 9.78 9.37
</TABLE>
(1) The following are the assumed characteristics of Subsequent Contracts as
of the Cutoff Date:
<TABLE>
<CAPTION>
Aggregate Principal Wtd Avg. Wtd Avg. Wtd Avg.
Balance Outstanding Contract Rate Original Term Remaining Term
------------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Horse Trailers $ 2,007,872.20 11.33 123 123
Marine 6,598,128.51 10.86 143 143
Motorcycle 7,089,812.66 13.81 66 66
Trucks 12,322,917.73 10.81 49 49
Aircraft 7,192,614.80 9.99 157 157
Sport Vehicles 2,546,649.42 15.90 53 53
Keyboard Instruments 1,187,752.63 11.84 73 73
RV's 6,316,917.68 10.41 146 146
--------------
Total $45,262,665.63
==============
</TABLE>
[LOGO] 9
- -------------------------------------------------------------------------------
Recipients must read the information contained in the attached statement. Do not
use or rely on this information if you have not received and reviewed the
statement. If you have not received the statement, call your Merrill Lynch
account executive for another copy.
<PAGE>
The attached tables and other statistical analyses (the "Term Sheet") are
privileged and confidential and are intended for use by the addressee only.
This Term Sheet is furnished to you solely by Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") and not by the issuer of the securities
or any of its affiliates. The issuer of these securities has not prepared or
taken part in the preparation of these materials. Neither Merrill Lynch, the
issuer of the securities nor any of its affiliates makes any representation as
to the accuracy or completeness of the information herein. The information
herein is preliminary, and will be subsequently filed with the Securities and
Exchange Commission. They may not be provided to any third party other than
the addressee's legal, tax, financial and/or accounting advisors for the
purposes of evaluating said material.
Numerous assumptions were used in preparing the Term Sheet which may or may
not be stated therein. As such, no assurance can be given as to the accuracy,
appropriateness or completeness of the Term Sheet in any particular context;
or as to whether the Term Sheet and/or the assumptions upon which it is based
reflect present market conditions or future market performance. This Term
Sheet should not be construed as either projections or predictions or as
legal, tax, financial or accounting advice.
Any yields or weighted average lives shown in the Term Sheet are based on
prepayment assumptions and actual prepayment experience may dramatically
affect such yields or weighted average lives. In addition, it is possible
that prepayments on the underlying assets will occur at rates slower or faster
than the rates assumed in the attached Term Sheet. Furthermore, unless
otherwise provided, the Term Sheet assumes no losses on the underlying assets
and no interest shortfall. The specific characteristics of the securities may
differ from those shown in the Term Sheet due to differences between the
actual underlying assets and the hypothetical assets used in preparing the
Term Sheet. The principal amount and designation of any security described in
the Term Sheet are subject to change prior to issuance.
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 sale of the securities discussed in this communication
in any state in which such offer, solicitations 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 Term Sheet on any matter discussed in this
communication. A final prospectus and prospectus supplement may be obtained
by contacting the Merrill Lynch Trading Desk and (212) 449-3659.
Please be advised that asset-backed securities may not be appropriate for
all investors. Potential investors must be willing to assume, among other
things, market price volatility, prepayments, yield curve and interest rate
risk. Investors should fully consider the risk of an investment in these
securities.
If you have received this communication in error, please notify the sending
party immediately by telephone and return the original to such party by mail.
[LOGO] 10
- -------------------------------------------------------------------------------
