<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): October 9, 1997
GREEN TREE FINANCIAL CORPORATION
--------------------------------
(Exact name of registrant as specified in its charter)
Delaware 01-08916 41-1807858
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) 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)
1
<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 Accountant.
----------------------------------------------
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 Certificates for
Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificates, Series 1997-7, issued by
Green Tree Financial Corporation, as Seller and
Servicer.
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.
GREEN TREE FINANCIAL CORPORATION
By: /s/ Joel H. Gottesman
-----------------------------------
Joel H. Gottesman
Senior Vice President, General Counsel and
Secretary
3
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Page
- -------------- ----
99 External Computational and Descriptive Information
distributed in connection with Certificates for
Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificates, Series 1997-7, issued
by Green Tree Financial Corporation, as Seller and
Servicer.
4
<PAGE>
Exhibit 99
TERM SHEET DATED OCTOBER 8, 1997
Green Tree Financial Corporation
Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificates, Series 1997-7
$550,000,000 (Approximate)
Subject to Revision
SELLER/SERVICER: Green Tree Financial Corporation ("Green Tree").
TRUSTEE: First Trust National Association, St. Paul, Minnesota
UNDERWRITERS: Merrill Lynch & Co. (Lead), Lehman Brothers, Salomon Brothers
INC.
<TABLE>
<CAPTION>
Ratings WAL Exp Final
To Call Amount (Moody's/S&P) @ 150% MHP Maturity
------- ------------- ---------- --------
<S> <C> <C> <C> <C>
A-1 $23,000,000 P-1/A-1+ 0.37 06/98
A-2 $32,000,000 Aaa/AAA 1.01 03/99
A-3 $66,000,000 Aaa/AAA 2.01 07/00
A-4 $40,000,000 Aaa/AAA 3.10 05/01
A-5 $89,000,000 Aaa/AAA 4.99 08/04
A-6 $18,000,000 Aaa/AAA 7.48 02/06
A-7 $55,000,000 Aaa/AAA 10.52 08/10
A-8 $67,000,000 Aaa/AAA 10.60 10/12
A-9 $22,500,000 Aaa/AAA 17.38 11/15
A-10 $55,000,000 Aaa/AAA 8.28 11/15
M-1 $41,250,000 Aa3/AA- 10.61 11/15
B-1 $22,000,000 Baa1/BBB+ 6.81 02/08
B-2 $19,250,000 Baa1/A- 15.51 11/15
To Maturity
A-9 $22,500,000 Aaa/AAA 19.29 09/23
A-10 $55,000,000 Aaa/AAA 8.29 07/23
M-1 $41,250,000 Aa3/AA- 11.06 09/23
B-2 $19,250,000 Baa1/A- 21.09 01/28
</TABLE>
CUT-OFF DATE: September 30, 1997 (or the date of origination, if later)
EXP. PRICING: October 10, 1997
EXP. SETTLEMENT: October 30, 1997
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 November 17, 1997.
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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>
MONEY MARKET
ELIGIBILITY The Class A-1 Certificates are expected to be eligible
securities for purchase by money market funds under Rule
2a-7 under the Investment Company Act of 1940, as amended.
ERISA: Subject to the conditions set forth in the Prospectus
Supplement, Class A Certificates are ERISA eligible. No
transfer of a Class M-1 Certificate or a Class B
Certificate will be permitted to be made to any employee
benefit plan subject to ERISA or to the Internal Revenue
Code of 1986, as amended, unless an opinion of counsel is
delivered to the Trustee.
SMMEA: Class A and M-1 Certificates are SMMEA eligible. Class B
Certificates are not SMMEA eligible.
TAX STATUS: For federal income tax purposes, the Trust will be treated
as a real estate mortgage investment conduit ("REMIC").
The Class A Certificates, the Class M-1 Certificates and
the Class B Certificates will constitute "regular
interests" in the REMIC and generally will be treated as
debt instruments of the Trust for federal income tax
purposes with payment terms equivalent to the terms of
such Certificates. The Class C Certificates will
constitute "residual interests" in the REMIC.
OPTIONAL REDEMPTION: Less than 10% of the original pool balance outstanding.
STRUCTURE
CREDIT ENHANCEMENT: Class A: 15.0% subordination (Class M-1, B-1, and B-2) &
Residual (Class C)
Class M-1: 7.5% subordination (Class B-1 and B-2) &
Residual (Class C)
Class B-1: 3.5% subordination (Class B-2) & Residual
(Class C)
Class B-2: Limited Guarantee plus Residual (Class C)
DISTRIBUTIONS: Certificateholders will be entitled to receive on each
Remittance Date commencing in November 1997, to the extent
that the Amount Available in the Certificate Account
(together with, in the case of the Class B-2 Certificates,
the Guarantee Payment, as described below) is sufficient
therefor, distributions allocable to interest and
principal, as described herein. The Amount Available on
each Remittance Date generally includes (i) payments on
the Contracts due and received during the preceding month,
(ii) prepayments and other unscheduled collections
received during the preceding month, and (iii) all
collections of principal on the Contracts received during
the current month up to and including the third business
day prior to such Remittance Date (but in no event later
than the 10th day of the month in which the Remittance
Date occurs), minus (iv) with respect to all Remittance
Dates other than the Remittance Date in November 1997, all
collections in respect of principal on the Contracts
received during the preceding month up to and including
the third business day prior to the preceding Remittance
Date (but in no event later than the 10th day of the prior
month).
The Amount Available in the Certificate Account with
respect to any Distribution Date will be applied first to
the distribution of interest on the Certificates, and then
to the distribution of principal on the Certificates, in
the manner and order of priority described below.
2
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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 Merril Lynch
account executive for another copy.
<PAGE>
INTEREST ON THE
CLASS A, CLASS M-1
AND CLASS B-1
CERTIFICATES Interest will be distributable first to each Class of Class
A Certificates concurrently, except for the Class A-9
certificates, which will receive no interest payments until
the earlier of (i) the Remittance Date on which the
Principal Balance of the Class A-8 Certificates has been
reduced to zero or (ii) the Remittance Date on which the
Class M-1 Adjusted Principal Balance and the Class B-1
Adjusted Principal Balance have each been reduced to zero
(the "Accrual Termination Date"), then to the Class M-1
Certificates and then to the Class B-1 Certificates.
Interest on the outstanding Class A Principal Balance, Class
M-1 Adjusted Principal Balance, and Class B-1 Adjusted
Principal Balance, as applicable, will accrue from October
30, 1997, or from the most recent Remittance Date on which
interest has been paid to but excluding the following
Remittance Date. Interest accrued and unpaid on the Class
A-9 Certificates will be added as principal to the Class A-9
Principal Balance on each Remittance Date. The "Principal
Balance" of a Class of Class A Certificates as of any
Remittance Date is the Original Principal Balance of such
Class less all amounts previously distributed on account of
principal of such Class plus, in the case of the Class A-9
Certificates, all accrued and unpaid interest until the
Accrual Termination Date.
The "Class M-1 Principal Balance" as of any Remittance Date
is the Original Class M-1 Principal Balance less all amounts
previously distributed on account of principal of the Class
M-1 Certificates. The "Class M-1 Adjusted Principal Balance"
as of any Remittance Date is the Class M-1 Principal Balance
less any Class M-1 Liquidation Loss Amount.
The "Class B-1 Principal Balance" as of any Remittance Date
is the Original Class B-1 Principal Balance less all amounts
previously distributed on account of principal of the Class
B-1 Certificates. The "Class B-1 Adjusted Principal Balance"
as of any Remittance date is the Class B-1 Principal Balance
less any Class B-1 Liquidation Loss Amount.
In the event that, on a particular Remittance Date, the
Amount Available in the Certificate Account, after payment
of interest on each Class of Certificates that is senior to
such Class of Certificates, is not sufficient to make a full
distribution of interest to the holders of such Class of
Certificates (the Class A Certificates being treated as a
single Class for this purpose), the amount of interest to be
distributed in respect of such Class will be allocated among
the outstanding Certificates of such Class pro rata in
accordance with their respective entitlements to interest,
and the amount of the shortfall will be carried forward and
added to the amount such holders will be entitled to receive
on the next Remittance Date.
PRINCIPAL ON THE
CLASS A, CLASS M-1
AND CLASS B-1
CERTIFICATES
The Class A, Class M-1 and Class B-1 Certificates will be
entitled to receive on each Remittance Date as distributions
of principal, in the order of priority set forth below: The
Class A Percentage of the Formula Principal Distribution
Amount will be distributed, to the extent of the Amount
Available after payment of interest on the Class A, Class
M-1 and Class B-1 Certificates, as follows: (i) that
portion, if any, of the Class A Percentage of the Formula
3
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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>
Principal Distribution Amount equal to the Class A-10 Lockout
Pro Rata Distribution Amount will be distributed to the Class
A-10 Certificateholders; and (ii) the remainder of the Class
A Percentage of the Formula Principal Distribution Amount
will be distributed sequentially to the Class A-1, A-2, A-3,
A-4, A-5, A-6, A-7, A-8, A-9 and A-10 Certificateholders.
Additionally, until the Accrual Termination Date, the Class
A-8 Certificateholders will be entitled to receive as
principal on each Remittance Date the amount of accrued
interest on the Class A-9 Certificates added to the Class
A-9 Principal Balance on such Remittance Date.
The "Class A-10 Lockout Pro Rata Distribution Amount," as to
any remittance Date, is an amount equal to the lesser of:
(a) the product of (1) the Class A-10 Lockout Percentage,
and (2) the product of (A) a fraction, the numerator of
which is the Class A-10 Principal Balance immediately
preceding such Remittance Date and the denominator of
which is the Class A Principal Balance immediately
preceding such Remittance Date, and (B) the Class A
Percentage of the Formula Principal Distribution Amount
for such Remittance Date,
(b) the Class A-10 Principal Balance immediately
preceding such Remittance Date, and
(c) the Class A Percentage of the Formula Principal
Distribution Amount.
The "Class A-10 Lockout Percentage" as to any Remittance Date is set forth in
the following table:
<TABLE>
<CAPTION>
Class A-10
Remittance Date Period Lockout Percentage
- ---------------------- ------------------
<S> <C>
November 1997 though October 2000 0%
November 2000 through October 2002 45%
November 2002 through October 2003 80%
November 2003 through October 2004 100%
November 2004 and thereafter 300%
</TABLE>
The Class M-1 Certificateholders will be entitled to receive
principal on each Remittance Date on which (i) the Class A
Principal Balance has been reduced to zero or (ii) the Class
M-1 Distribution Test is satisfied.
The Class M-1 Percentage for any Remittance Date will equal
(a) zero, if the Class A Principal Balance has not yet been
reduced to zero and the Class M-1 Distribution Test is not
satisfied or (b) a fraction, expressed as a percentage, the
numerator of which is the Class M-1 Principal Balance as of
such Remittance Date, and the denominator of which is the sum
of: (i) the Class A Principal Balance, if any, (ii) the Class
M-1 Principal Balance and (iii) if the Class B Distribution
Test is satisfied on such Remittance Date, the Class B
Principal Balance, otherwise zero, all as such Remittance
Date.
The Class M-1 Distribution Test will be satisfied if each of
the following tests is satisfied: (i) the Remittance Date
occurs in or after November 2001; (ii) the
4
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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>
Average Sixty-Day Delinquency Ratio Test (as defined in the
Agreement) as of such Remittance Date must not exceed 3.5%;
(iii) the Average Thirty-Day Delinquency Ratio Test (as
defined in the Agreement) as of such Remittance Date must not
exceed 5.5%; (iv) Cumulative Realized Losses (as defined in
the Agreement) as of such Remittance Date must not exceed a
certain specified percentage of the Cut-off Date Pool
Principal Balance, depending on the year in which such
Remittance Date occurs; (v) the Current Realized Loss Ratio
(as defined in the Agreement) as of such Remittance Date must
not exceed 2.25%;(vi) the sum of the Class M-1 Principal
Balance and the Class B Principal Balance divided by the Pool
Scheduled Principal Balance as of the immediately preceding
Remittance Date must be equal to or greater than 22.5%.
The Class B-1 Certificateholders will be entitled to receive
principal on each Remittance Date on which (i) the Class A
Principal Balance and the Class M-1 Principal Balance have
been reduced to zero or (ii) the Class B Distribution Test is
satisfied.
The Class B Percentage for any Remittance Date will equal (a)
zero, if the Class A Principal Balance and the Class M-1
Principal Balance have not yet been reduced to zero and the
Class M-1 Distribution Test and the Class B Distribution Test
are not satisfied or (b) a fraction, expressed as a
percentage, the numerator of which is the Class B Principal
Balance as of such Remittance Date, and the denominator of
which is the sum of: (i) the Class A Principal Balance, if
any, (ii) the Class M-1 Principal Balance, if any, and (iii)
the Class B Principal Balance, all as of such Remittance
Date.
The Class B Distribution Test will be satisfied if each of
the following tests is satisfied: (i) the Remittance Date
occurs in or after November 2001; (ii) the Average Sixty-Day
Delinquency Ratio Test (as defined in the Agreement) as of
such Remittance Date must not exceed 3.5%; (iii) the Average
Thirty-Day Delinquency Ratio Test (as defined in the
Agreement) as of such Remittance Date must not exceed 5.5%;
(iv) the Cumulative Realized Losses (as defined in the
Agreement) as of such Remittance Date must not exceed a
certain specified percentage of the Cut-off Date Pool
Principal Balance, depending on the year in which such
Remittance Date occurs; (v) the Current Realized Loss Ratio
(as defined in the Agreement) as of such Remittance Date must
not exceed 2.25%; (vi) the Class B Principal Balance divided
by the Pool Scheduled Principal Balance as of the immediately
preceding Remittance Date must be equal to or greater than
11.25%; and (vii) the Class B Principal Balance must not be
less than 2% of the total pool ($11,000,000).
CLASS B-2 INTEREST Interest on the outstanding Class B-2 Principal Balance will
accrue from October 30, 1997, or from the most recent
Remittance Date on which interest has been paid to but
excluding the following Remittance Date.
To the extent of (i) the remaining Amount Available, if any,
for a Remittance Date after payment of all interest and
principal then payable on the Class A, Class M-1, and Class
B-1 Certificates, and (ii) the Guarantee Payment, if any, for
such date, interest will be paid to the Class B-2
Certificateholders on such Remittance Date at the Class B-2
Remittance Rate on the then outstanding Class B-2 Principal
Balance. The Class B-2 Principal Balance is the Original
Class B-2 Principal Balance less all amounts previously
distributed to the Class B-2 Certificateholders (including
any Guarantee Payments) on account of principal.
In the event that, on a particular Remittance Date, the
remaining Amount
5
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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>
Available in the Certificate Account plus any amounts
actually paid under the Limited Guarantee are not
sufficient to make a full distribution of interest to the
Class B-2 Certificateholders, the amount of the deficiency
will be carried forward as an amount that the Class B-2
Certificateholders are entitled to receive on the next
Remittance Date. Any amount so carried forward will, to
the extent legally permissible, bear interest at the Class
B-2 Remittance Rate.
CLASS B-2 PRINCIPAL Except for payments of the Class B-2 Liquidation Loss
Amount (as described below), the Class B-2
Certificateholders will be entitled to receive principal
on each Remittance Date on which (i) the Class B-1
Principal Balance has been reduced to zero (the "Class B-
1 Cross-over Date") and (ii) the Class B Distribution
Test is satisfied; provided, however, that if the Class A
Principal Balance, the Class M-1 Principal Balance and
the Class B-1 Principal Balance have been reduced to
zero, the Class B-2 Certificateholders will nevertheless
be entitled to receive principal. See "Description of the
Certificates--Class B-2 Principal."
The Class B Percentage for any Remittance Date will equal
(a) zero, if the Class A Principal Balance and the Class
M-1 Principal Balance have not yet been reduced to zero
and the Class B Distribution Test is not satisfied or (b)
a fraction, expressed as a percentage, the numerator of
which is the Class B Principal Balance as of such
Remittance Date, and the denominator of which is the sum
of: (i) the Class A Principal Balance, if any, (ii) the
Class M-1 Principal Balance, if any, and (iii) the Class
B Principal Balance, all as of such Remittance Date.
On each Remittance Date on which the Class B-2
Certificateholders are entitled to receive principal,
the Class B Percentage of the Formula Principal
Distribution Amount will be distributed, to the extent
of the remaining Amount Available after payment of
interest on the Class B-2 Certificates, to the extent of
the remaining Amount Available after payment of interest
on the Class B-2 Certificates, to the Class B-2
Certificateholders until the Class B-2 Principal Balance
has been reduced to zero. The Company will be obligated
under the Limited Guarantee to pay the amount, if any,
by which the Class B Percentage of the Formula Principal
Distribution Amount for such Remittance Date exceeds the
remaining Amount Available after payment of interest on
the Class B-2 Certificates.
LOSSES ON LIQUIDATED
CONTRACTS As described above, the distribution of principal to the
Class A, the Class M-1, and the Class B-1
Certificateholders is intended to include the Class A
Percentage, the Class M-1 Percentage and the Class B
Percentage, respectively, of the Scheduled Principal
Balance of each Contract that became a Liquidated
Contract during the month preceding the month of such
distribution. If the Net Liquidation Proceeds from such
Liquidated Contract are less than the Scheduled
Principal Balance of such Liquidated Contract, the
deficiency will, in effect, be absorbed by the Class C
Certificateholders, then the Guarantee Fee otherwise
payable to the Company, then the Monthly Servicing Fee
(so long as Green Tree is the Servicer), then the Class
B-2 Certificateholders, then the Class B-1
Certificateholders and then the Class M-1
Certificateholders, since a portion of the Amount
Available equal to such deficiency and otherwise
distributable to them will be paid to the Class A
Certificateholders.
6
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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 information concerning the Initial Contracts presented
below is based on a pool originated through September 30,
1997. Green Tree intends to acquire and sell additional
Contracts, which are sufficient to support the balance of
Certificates sold, to the Trust by the Closing Date. Although
the characteristics of the final pool of Contracts will
differ from the characteristics of the Initial Contracts
shown below, Green Tree does not expect that the
characteristics of the additional Contracts sold to the Trust
will vary materially from the information concerning the
Initial Contracts herein.
THE INITIAL CONTRACT POOL
<TABLE>
<S> <C>
Number of MHCs in pool: 6,799
Wgt. Avg. Contract Rate: 9.50%
Range of Rates: 4.75% - 17.00%
Wgt. Avg. Orig. Maturity: 307.82
Range of Orig. Maturity: 18 - 360
Wgt. Avg. Rem. Maturity: 307.79
Range of Rem. Maturity: 18 - 360
Avg. Rem Princ. Balance: $40,417.18
Wgt. Avg. LTV: 86.432%
New/Used: 81%/19%
Park/Private: 23%/77%
Single/Double: 28%/72%
Land/Home: 44.82%
Land in Lieu: 0.56%
Step Rate: 4.85%
Conventional: 51.77%
</TABLE>
GEOGRAPHIC DISTRIBUTION OF INITIAL CONTRACT OBLIGORS
<TABLE>
<CAPTION>
% of Contract % of Contract Pool
Number Pool by Number Aggregate Principal by Outstanding
State of Contracts of Contracts Balance Outstanding Principal Balance
- ------- ------------ -------------- ------------------- ------------------
<S> <C> <C> <C> <C>
NC 931 13.70% $ 35,730,555.02 12.99%
TX 498 7.33% $ 17,237,553.97 6.27%
MI 411 6.06% $ 21,039,395.96 7.66%
FL 450 6.63% $ 19,143,868.98 6.97%
Other States(1) 4509 66.28% $181,645,003.27 66.11%
----- ------ --------------- ------
Total 6,799 100.00% $274,796,377.20 100.00%
===== ====== =============== ======
</TABLE>
(1) Other States category includes those States which constitute less than 5.00%
of the outstanding balance of the initial Pool of Contracts.
7
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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 Merril Lynch
account executive for another copy.
<PAGE>
YEARS OF ORIGINATION OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
% of Contract Pool
Number of Aggregate Principal by Outstanding
Year of Origination (1) Contracts Balance Outstanding Principal Balance
- ----------------------- --------- --------------------- -----------------
<S> <C> <C> <C>
1984 2 $ 12,261.11 0.00%*
1985 2 $ 10,298.23 0.00%*
1986 2 $ 43,586.23 0.02%
1987 3 $ 49,600.07 0.02%
1988 6 $ 68,620.66 0.02%
1989 6 $ 78,107.20 0.03%
1990 8 $ 135,669.07 0.05%
1991 4 $ 79,494.91 0.03%
1992 10 $ 183,926.19 0.07%
1993 19 $ 531,799.28 0.19%
1994 63 $ 1,622,118.78 0.59%
1995 62 $ 1,909,629.58 0.69%
1996 92 $ 5,145,886.47 1.87%
1997 6,520 $264,925,379.42 96.42%
----- --------------- -------
Total 6,799 $274,796,377.20 100.00%
===== =============== =======
</TABLE>
* Indicates an amount greater than zero but less than 0.005% of the aggregate
principal balance.
(1) The Contracts shown in the above table with earlier years of origination
primarily represent Contracts originated by the Company and subsequently
refinanced through the Company. The Company retains the first origination
dates on its records with respect to such refinanced Contracts.
8
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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
by Outstanding
Original Contract Number of Aggregate Principal Principal
Amount (in Dollars) (1) Contracts Balance Outstanding Balance
- ----------------------- --------- ------------------- ------------------
<S> <C> <C> <C>
Less than $10,000 433 $ 3,358,442.41 1.22%
$10,000 - $19,999 1,204 $ 17,967,227.54 6.54%
$20,000 - $29,999 1,322 $ 33,166,612.38 12.07%
$30,000 - $39,999 1,074 $ 37,195,043.57 13.53%
$40,000 - $49,999 724 $ 32,524,711.25 11.84%
$50,000 - $59,999 620 $ 33,841,605.26 12.31%
$60,000 - $69,999 477 $ 30,927,591.26 11.25%
$70,000 - $79,999 331 $ 24,788,932.12 9.02%
$80,000 - $89,999 244 $ 20,729,418.68 7.54%
$90,000 - $99,999 159 $ 14,965,673.55 5.45%
$100,000 - $109,999 89 $ 9,308,408.14 3.39%
$110,000 - $119,999 48 $ 5,472,816.53 1.99%
$120,000 - $129,999 27 $ 3,373,050.97 1.23%
$130,000 - $139,999 16 $ 2,157,881.39 0.79%
$140,000 - $149,999 11 $ 1,590,104.91 0.58%
$150,000 - $159,999 8 $ 1,235,642.67 0.45%
$160,000 - $169,999 4 $ 664,996.67 0.24%
$170,000 - $179,999 4 $ 699,305.01 0.25%
$180,000 - $189,999 1 $ 181,013.80 0.07%
$190,000 - $199,999 2 $ 385,352.43 0.14%
$200,000 - $249,999 0 $ 0.00 0.00%
$250,000 - $299,999 1 $ 262,546.66 0.10%
----- --------------- ------
Total 6,799 $274,796,377.20 100.00%
===== =============== ======
</TABLE>
- ---------------
(1) The Contracts shown in the above table with earlier years of origination
primarily represent Contracts originated by the Company and subsequently
refinanced through the Company. The Company retains the first origination
dates on its records with respect to such refinanced Contracts.
(2) The largest original Contract amount is $262,546.66, which represents 0.10%
of the Initial Pool Principal Balance.
9
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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 LOAN-TO-VALUE RATIOS
<TABLE>
<CAPTION>
% of Contract Pool
Number of Aggregate Principal by Outstanding
Loan-to-Value Ratio(1) Contracts Balance Outstanding Principal Balance
- ---------------------- --------- -------------------- ------------------
<S> <C> <C> <C>
61% 319 $ 9,063,539.59 3.30%
61 - 65% 109 $ 4,094,252.76 1.49%
66 - 70% 188 $ 7,829,875.73 2.85%
71 - 75% 225 $ 10,180,350.96 3.70%
76 - 80% 592 $ 22,431,527.46 8.16%
81 - 85% 860 $ 38,419,880.76 13.98%
86 - 90% 2,225 $ 93,581,493.42 34.06%
91 - 95% 2,121 $ 83,151,615.14 30.26%
Over 95% 160 $ 6,043,841.38 2.20%
----- --------------- ------
Total 6,799 $274,796,377.20 100.00%
===== =============== ======
</TABLE>
(1) Rounded to the nearest full percent. The method of calculating loan-to-
value ratios is described in the Prospectus.
<TABLE>
<CAPTION>
CONTRACT RATES
% of Contract Pool
Number of Aggregate Principal by Outstanding
Contract Rate Contracts Balance Outstanding Principal Balance
- ------------- --------- ------------------- -------------------
<S> <C> <C> <C>
Less than 5.00001% 2 $ 194,586.76 0.07%
5.00001% to 6.00000% 16 $ 886,020.11 0.32%
6.00001% to 7.00000% 338 $ 26,413,038.55 9.61%
7.00001% to 8.00000% 558 $ 37,485,026.20 13.64%
8.00001% to 9.00000% 1,021 $ 58,005,703.20 21.12%
9.00001% to 10.00000% 1,136 $ 51,560,313.85 18.77%
10.00001% to 11.00000% 1,187 $ 44,496,453.56 16.19%
11.00001% to 12.00000% 1,179 $ 32,492,859.47 11.82%
12.00001% to 13.00000% 688 $ 13,689,564.71 4.98%
13.00001% to 14.00000% 529 $ 8,200,028.57 2.98%
14.00001% to 15.00000% 24 $ 342,092.23 0.12%
15.00001% to 16.00000% 99 $ 838,309.42 0.31%
16.00001% to 17.00000% 22 $ 192,380.57 0.07%
----- --------------- ------
Total 6,799 $274,796,377.20 100.00%
===== =============== ======
</TABLE>
10
- --------------------------------------------------------------------------------
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>
<TABLE>
<CAPTION>
REMAINING MONTHS TO MATURITY
% of Contract Pool
Number of Aggregate Principal by Outstanding
Months Remaining Contracts Balance Outstanding Principal Balance
- ---------------- --------- ------------------- ------------------
<S> <C> <C> <C>
31 6 $ 49,725.54 0.02%
31 - 60 152 $ 1,292,588.05 0.47%
61 - 90 606 $ 8,402,477.21 3.06%
91 - 120 413 $ 6,440,098.41 2.34%
121 - 150 148 $ 2,772,869.44 1.01%
151 - 180 915 $ 21,578,140.95 7.85%
181 - 210 61 $ 2,133,054.02 0.78%
211 - 240 1034 $ 33,280,273.62 12.11%
241 - 270 5 $ 195,948.31 0.07%
271 - 300 496 $ 18,578,163.95 6.76%
301 - 330 2 $ 83,425.56 0.03%
331 - 360 2961 $179,989,612.14 65.50%
----- --------------- ------
Total 6,799 $274,796,377.20 100.00%
===== =============== ======
</TABLE>
11
- --------------------------------------------------------------------------------
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>
MHP PREPAYMENT SENSITIVITIES(1)
<TABLE>
<CAPTION>
75% MHP 100% MHP 125% MHP 150% MHP
WAL/Maturity WAL/Maturity WAL/Maturity WAL/Maturity
<S> <C> <C> <C> <C>
To Call
A-1 0.55 10/98 0.47 09/98 0.42 07/98 0.37 06/98
A-2 1.55 11/99 1.31 08/99 1.13 05/99 1.01 03/99
A-3 3.16 02/02 2.63 05/01 2.27 11/00 2.01 07/00
A-4 5.05 09/03 4.18 08/02 3.56 12/01 3.10 05/01
A-5 8.89 05/10 7.08 02/08 5.82 04/06 4.99 08/04
A-6 13.23 10/11 11.06 08/09 9.19 09/07 7.48 02/06
A-7 16.29 08/16 14.02 04/14 12.14 04/12 10.52 08/10
A-8 11.78 10/16 11.57 05/15 11.13 01/14 10.60 10/12
A-9 22.64 12/21 20.80 11/19 18.98 09/17 17.38 11/15
A-10 9.75 12/21 9.15 11/19 8.67 09/17 8.28 11/15
M-1 15.35 12/21 13.50 11/19 11.92 09/17 10.61 11/15
B-1 10.57 03/13 9.00 02/11 7.77 06/09 6.81 02/08
B-2 21.36 12/21 19.24 11/19 17.21 09/17 15.51 11/15
To Maturity
A-9 23.64 09/26 22.18 01/26 20.71 01/25 19.29 09/23
A-10 9.75 07/26 9.15 11/25 8.68 11/24 8.29 07/23
M-1 15.66 09/26 13.88 01/26 12.36 01/25 11.06 09/23
B-2 24.41 01/28 23.28 01/28 22.17 01/28 21.09 01/28
</TABLE>
(1) The following are the assumed characteristics of Subsequent Contracts as of
the Cut-off Date:
<TABLE>
<CAPTION>
Aggregate Principal Wtd Avg Wtd Avg Wtd Avg
Months Remaining Balance Outstanding Original Term Remaining Term Contract Rate
- ------------------ ------------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
0 to 120 $ 16,208,875.06 95 95 11.66%
121 to 180 $ 24,387,098.35 175 175 11.15%
181 to 240 $ 35,465,809.85 237 237 10.51%
241 to 300 $ 18,801,935.31 299 299 10.28%
301 to 360 $180,339,904.22 360 360 8.80%
Total $275,203,622.80 308 308 9.50%
</TABLE>
12
- --------------------------------------------------------------------------------
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>
MHP PREPAYMENT SENSITIVITIES(1)
<TABLE>
<CAPTION>
175% MHP 250% MHP 300% MHP 350% MHP
WAL/Maturity WAL/Maturity WAL/Maturity WAL/Maturity
<S> <C> <C> <C> <C>
To Call
A-1 0.34 06/98 0.27 04/98 0.24 03/98 0.22 03/98
A-2 0.91 01/99 0.70 10/98 0.61 08/98 0.55 07/98
A-3 1.81 03/00 1.40 09/99 1.22 06/99 1.08 04/99
A-4 2.76 12/00 2.12 03/00 1.85 12/99 1.65 09/99
A-5 4.31 08/03 3.10 09/01 2.67 02/01 2.35 09/00
A-6 6.23 06/04 4.15 04/02 3.48 06/01 3.01 12/00
A-7 8.89 01/09 5.46 08/04 4.33 02/03 3.62 01/02
A-8 9.99 09/11 7.88 12/08 6.37 05/07 5.08 06/05
A-9 15.88 03/14 12.34 05/10 10.58 07/08 9.22 03/07
A-10 7.94 03/14 7.16 05/10 6.76 07/08 6.43 03/07
M-1 9.81 03/14 8.20 05/10 7.45 07/08 6.88 03/07
B-1 6.41 04/07 5.76 10/05 5.49 03/05 5.28 09/04
B-2 14.14 03/14 11.15 05/10 9.75 07/08 8.72 03/07
To Maturity
A-9 17.90 04/22 14.38 08/17 12.54 02/15 11.04 01/13
A-10 7.95 02/22 7.18 06/17 6.80 12/14 6.49 10/12
M-1 10.28 04/22 8.70 08/17 7.96 02/15 7.40 01/13
B-2 20.10 01/28 17.19 01/28 15.40 01/28 13.77 01/28
</TABLE>
(1) The following are the assumed characteristics of Subsequent Contracts as of
the Cut-off Date:
<TABLE>
<CAPTION>
Aggregate Principal Wtd Avg Wtd Avg Wtd Avg
Months Remaining Balance Outstanding Original Term Remaining Term Contract Rate
- ------------------ ------------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
0 to 120 $ 16,208,875.06 95 95 11.66%
121 to 180 $ 24,387,098.35 175 175 11.15%
181 to 240 $ 35,465,809.85 237 237 10.51%
241 to 300 $ 18,801,935.31 299 299 10.28%
301 to 360 $180,339,904.22 360 360 8.80%
Total $275,203,622.80 308 308 9.50%
</TABLE>
13
- --------------------------------------------------------------------------------
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 final
information on any matter discussed in this communication. All information in
this Term Sheet will be superseded by the information in the final prospectus
and prospectus supplement. A final prospectus and prospectus supplement may be
obtained by contacting the Merrill Lynch Trading Desk at (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.
14
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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.
