<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): September 4, 1997
GREEN TREE FINANCIAL CORPORATION
as originator of Green Tree Recreational,
Equipment & Consumer Trust 1997-C
------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 1-8916 41-1807858
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(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
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(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 293-3400
----------------------
Not Applicable
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(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 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.
<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 Green Tree Recreational,
Equipment & Consumer Trust 1997-C, issued by
a trust formed 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.
Dated: September 4, 1997 GREEN TREE FINANCIAL CORPORATION
as originator of Green Tree Recreational,
Equipment & Consumer Trust 1997-C
By: /s/ Joel H. Gottesman
--------------------------------------
Joel H. Gottesman
Senior Vice President, General Counsel
and Secretary
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Page
- -------------- ----
<S> <C> <C>
99 External Computational and Descriptive Information 5
distributed in connection with Certificates for Green
Tree Recreational, Equipment & Consumer Trust 1997-C,
issued by a trust formed by Green Tree Financial
Corporation, as Seller and Servicer.
</TABLE>
<PAGE>
TERM SHEET DATED SEPTEMBER 3, 1997
GREEN TREE FINANCIAL CORPORATION
Green Tree Recreational, Equipment and Consumer Trust 1997-C
$500,000,000 (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 (Co.),
Morgan Stanley Dean Witter (Co.).
<TABLE>
<CAPTION>
CLASS A-1 A-2 A-3
Fixed Rate Certificates Fixed Rate Certificates Fixed Rate Certificates
------------------------------ ----------------------------- ---------------------------
<S> <C> <C> <C>
AMOUNT: $422,500,000 $26,250,000 $17,500,000
RATING (S&P/Fitch): AAA/AAA AA/AA+ A/A+
WAL (to call): 2.68 yrs. 2.68 yrs. 2.68 yrs.
PAYMENT WINDOW (to call): 1-79 1-79 1-79
CREDIT ENHANCEMENT: 15.50% + 1.50% RF 10.25% + 1.50% RF 6.75% + 1.50% RF
CLASS A-4 B
Fixed Rate Certificates Fixed Rate Certificates
------------------------------ -----------------------------
AMOUNT: $16,250,000 $17,500,000
RATING (S&P/Fitch): BBB/BBB+ A-/A
WAL (to call): 2.68 yrs. 2.68 yrs.
PAYMENT WINDOW (to call): 1-79 1-79
CREDIT ENHANCEMENT: 3.50% + 1.50% RF Limited Guaranty
</TABLE>
POOL CUTOFF DATE: August 31, 1997 (or the date of origination, if
later)
EXPECTED PRICING DATE: September 5, 1977
EXPECTED SETTLEMENT: September 25, 1997
LEGAL FINAL: February 25, 2018
INTEREST/PRINCIPAL The 15th day of each month (or the next business
DISTRIBUTIONS: day if the 15th is not a business day) beginning
October 15, 1997.
ERISA: Class A-1 Certificates are expected to be ERISA
eligible, subject to the conditions set forth in
the prospectus, including that interest in the
Class A-1 Certificates be held by at least 100
independent investors upon completion of the
public offering being made hereby. The
underwriters expect that interests in the Class
A-1 Certificates will be held by at least 100
independent investors, although no assurance can
be given and no monitoring or other measures will
be taken to ensure that such conditions will be
met with respect to the Class A-1 Certificates.
Class A-2, A-3, A-4 and B Certificates are not
expected to be ERISA eligible.
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<PAGE>
TAX STATUS: The trust will be classified as a grantor trust for
federal and Minnesota tax purposes.
OPTIONAL PREPAYMENT: Permitted if the Pool Scheduled Principal Balance
is 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 all payments due
thereon on or after September 1, 1997. The Consumer
Loan Contracts and Home Improvement Contracts are
collectively referred to as the "Contracts".
SUBSEQUENT COLLATERAL: Approximately $130 million of additional contracts
will be added to the collateral pool; subsequent
collateral will not include any home equity loans.
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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 August 31, 1997 (the "Initial Contracts") as of the Cutoff
Date for each such Initial Contract. Additional Contracts (other than 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 $500,000,000. All of
the Contracts will be retail installment sales contracts and promissory notes
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.
COMPOSITION OF INITIAL CONTRACT POOL
<TABLE>
<CAPTION>
# of % of Scheduled % of Cutoff Date
Asset Type Contracts Contract Pool Principal Balance Principal Balance
- ---------- --------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Aircraft 361 1.56% $ 46,927,472.01 12.69%
Trucks 1,081 4.67% $ 79,745,756.54 21.57%
Recreational Vehicles 3,641 15.74% $ 73,454,691.70 19.86%
Motorcycles 6,476 28.01% $ 55,266,293.76 14.94%
Keyboards 351 1.52% $ 3,551,191.92 0.96%
Marine Products 4,697 20.31% $ 70,523,937.29 19.07%
Horse Trailers 1,305 5.64% $ 12,735,533.50 3.44%
Sport Vehicles 3,051 13.19% $ 16,317,669.53 4.41%
Home Improvement 2,164 9.36% $ 11,325,659.89 3.06%
Total 23,127 100% $369,848,206.14 100%
===== ====== ====== =============== =====
</TABLE>
<TABLE>
<CAPTION>
Wtd. Average Wtd. Average Wtd. Average Wtd. Average
Asset Type Contract Rate Scheduled Term Remaining Term LTV Ratio
- ---------- ------------- -------------- -------------- ---------
<S> <C> <C> <C> <C>
Aircraft 9.53873% 164 163 88.73%
Trucks 10.74530% 53 52 93.12%
Recreational Vehicles 9.96870% 153 151 79.12%
Motorcycles 13.12384% 65 64 83.76%
Keyboards 11.24766% 74 73 85.18%
Marine Products 10.66682% 135 133 84.25%
Horse Trailers 11.52100% 119 117 83.47%
Sport Vehicles 15.56310% 54 53 83.51%
Home Improvement 14.77466% 96 94 n/a
Total 11.14591% 108 107 85.63%
===== ========= === === ======
</TABLE>
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<PAGE>
GEOGRAPHIC DISTRIBUTION OF INITIAL CONTRACTS/(1)/
<TABLE>
<CAPTION>
Number % of Principal % of Principal
State of Contracts Contracts Balance Balance
- ----- ------------ --------- ------- -------
<S> <C> <C> <C> <C>
California 3,996 17.28% $ 58,026,561.28 15.69%
Texas 2,596 11.22% $ 40,920,532.69 11.06%
Florida 1,664 7.20% $ 29,765,568.09 8.05%
Other States/(2)/ 14,871 64.30% $241,135,544.08 65.20%
TOTAL 23,127 100% $369,848,206.14 100%
===== ====== ==== =============== ====
</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.
YEAR OF ORIGINATION OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
Number of Aggregate Principal % of Contract Pool by Outstanding
Year of Origination Contracts BALANCE OUTSTANDING PRINCIPAL BALANCE
- -------------------- --------- ------------------- -----------------
<S> <C> <C> <C>
1985 6 $ 127,784.26 0.03%
1986 3 $ 36,161.34 0.01%
1987 47 $ 732,949.67 0.20%
1988 16 $ 197,577.53 0.05%
1989 5 $ 58,946.69 0.02%
1990 10 $ 312,654.58 0.08%
1991 7 $ 103,405.99 0.03%
1992 10 $ 165,952.19 0.04%
1993 19 $ 399,148.05 0.11%
1994 16 $ 227,439.06 0.06%
1995 23 $ 226,585.88 0.06%
1996 113 $ 668,328.86 0.18%
1997 22,852 $366,591,262.04 99.13%
Total 23,127 $369,848,206.14 100%
===== ====== =============== ====
</TABLE>
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<PAGE>
DISTRIBUTION OF ORIGINAL LOAN-TO-VALUE RATIOS OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
Number Aggregate Principal % of Contract Pool by
Loan-to-Value Ratio /(3)/ of Contracts Balance Outstanding Outstanding Principal Balance
- ----------------------- ------------ ------------------- ------------------------------
<S> <C> <C> <C>
Less-than 61% 1,668 $ 16,519,525.14 4.61%
61 - 65% 617 $ 8,610,340.38 2.40%
66 - 70% 912 $ 11,077,085.23 3.09%
71 - 75% 1,420 $ 18,967,273.39 5.29%
76 - 80% 2,118 $ 33,491,094.96 9.34%
81 - 85% 3,150 $ 49,754,020.36 13.88%
86 - 90% 7,317 $104,622,481.56 29.18%
91 - 95% 2,028 $ 48,791,819.06 13.61%
Over 95% 1,733 $ 66,688,906.17 18.60%
TOTAL 20,963 $358,522,546.25 100%
===== ====== =============== ====
</TABLE>
/(3)/ Does not include information with respect to Home Improvement Contracts,
which represent 3.06% by aggregate principal balance of the Initial
Contracts as of Cutoff Date.
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statement. If you have not received the statement, call your Merrill Lynch
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<PAGE>
DISTRIBUTION OF ORIGINAL AMOUNTS OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
Original Contract Number of Aggregate Principal % of Contract Pool by
Amount (in Dollars) Contracts Balance Outstanding Outstanding Principal Balance
- ------------------- --------- ------------------- ------------------------------
<S> <C> <C> <C>
Less than $10,000 13,310 $ 75,023,599.55 20.29%
$10,000 - $19,999 6,314 $ 87,698,781.47 23.72%
$20,000 - $29,999 1,457 $ 34,336,208.52 9.29%
$30,000 - $39,999 555 $ 18,588,786.41 5.03%
$40,000 - $49,000 359 $ 15,542,784.35 4.20%
$50,000 - $59,000 226 $ 12,202,352.46 3.30%
$60,000 - $69,000 161 $ 10,243,024.44 2.77%
$70,000 - $79,000 145 $ 10,740,238.77 2.90%
$80,000 - $89,999 168 $ 14,108,200.82 3.81%
$90,000 - $99,999 99 $ 9,207,841.43 2.49%
$100,000 - $109,999 68 $ 7,025,326.63 1.90%
$110,000 - $119,999 26 $ 2,923,249.77 0.79%
$120,000 - $129,999 33 $ 4,069,065.29 1.10%
$130,000 - $139,999 20 $ 2,659,255.08 0.72%
$140,000 - $149,999 18 $ 2,565,915.02 0.69%
$150,000 - $159,999 19 $ 2,924,339.01 0.79%
$160,000 - $169,999 15 $ 2,451,131.61 0.66%
$170,000 - $179,999 7 $ 1,210,239.60 0.33%
$180,000 - $189,999 10 $ 1,841,992.15 0.50%
$190,000 - $199,999 7 $ 1,359,279.84 0.37%
$200,000 - $249,999 30 $ 6,486,064.26 1.75%
$250,000 - $299,999 15 $ 3,984,601.94 1.08%
$300,000 - $349,999 17 $ 5,434,851.33 1.47%
$350,000 - $399,999 6 $ 2,255,598.17 0.61%
$400,000 - $449,999 5 $ 2,057,061.84 0.56%
$450,000 - $499,999 10 $ 4,713,539.94 1.27%
$500,000 - $549,999 2 $ 1,034,313.47 0.28%
$550,000 - $599,999 3 $ 1,704,925.40 0.46%
$600,000 - $649,999 3 $ 1,860,956.33 0.50%
$650,000 - $699,999 1 $ 693,932.59 0.19%
$700,000 - $749,999 3 $ 2,146,085.65 0.58%
$750,000 - $799,999 0 $ 0.00 0.00%
$800,000 - $849,999 3 $ 2,458,483.95 0.66%
$850,000 - $899,999 1 $ 886,931.19 0.24%
$900,000 - $949,998 1 $ 941,447.50 0.25%
$949,999+ 10 $ 16,467,800.36 4.45%
Total 23,127 $369,848,206.14 100%
===== ====== =============== ====
</TABLE>
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<PAGE>
CONTRACT RATES OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
Number Aggregate Principal % of Contract Pool by
Contract Rate of Contracts Balance Outstanding Outstanding Principal Balance
- ------------- ------------ ------------------- -----------------------------
<S> <C> <C> <C>
0.00% - 8.00% 16 $3,954,775.49 1.07%
8.01% - 9.00% 424 $48,815,046.59 13.20%
9.01% - 10.00% 2,572 $90,576,174.91 24.50%
10.01% - 11.00% 5,070 $87,810,091.43 23.74%
11.01% - 12.00% 3,434 $49,389,596.31 13.35%
12.01% - 13.00% 2,329 $27,171,994.12 7.35%
13.01% - 14.00% 3,065 $24,933,933.00 6.74%
14.01% - 15.00% 2,086 $14,531,338.42 3.93%
15.01% - 16.00% 1,510 $8,694,135.82 2.35%
16.01% - 17.00% 1,322 $6,933,487.09 1.87%
Greater than 17.00% 1,299 $7,037,632.96 1.90%
Total 23,127 $369,848,206.14 100%
===== ====== =============== =====
</TABLE>
REMAINING MONTHS TO MATURITY OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
Number Aggregate Principal % of Contract Pool by
Months Remaining of Contracts Balance Outstanding Outstanding Principal Balance
- ---------------- ------------ ------------------- -----------------------------
<S> <C> <C> <C>
Less than 31 1,070 $7,146,300.74 1.93%
31 - 60 10,610 $134,557,842.75 36.38%
61 - 90 3,833 $46,515,079.14 12.58%
91 - 120 3,875 $51,835,287.07 14.02%
121 - 150 1,993 $39,473,241.66 10.67%
151 - 180 1,622 $72,740,605.74 19.67%
181 - 210 6 $338,958.51 0.09%
211 - 240 118 $17,240,890.53 4.66%
Total 23,127 $369,848,206.14 100%
===== ====== =============== ======
</TABLE>
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<PAGE>
STRUCTURE
DISTRIBUTIONS: Distributions of principal and interest on 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 October
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 each Class of Certificates will be
subordinated to the rights of each Class of
Certificates with a lower numeric designation. The
Class B Certificates will not receive any distributions
of interest until the full amount of interest and
principal payable on the Class A Certificates on each
Distribution Date has been paid. The Class B
Certificates will not be entitled to receive any
distributions of principal until all of the Class A
Certificates have been paid in full.
CLASS A-1 INTEREST: Interest on the outstanding Class A-1 Principal Balance
will accrue at the Class A-1 Pass-Through Rate from
September 25, 1997 or from the most recent Distribution
Date on which interest has been paid but excluding the
following Distribution Date.
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 Certificates will be calculated on
a 30/360 basis.
CLASS A-1 PRINCIPAL: On each distribution date, Class A-1 Certificateholders
are entitled to receive an amount equal to the sum of
84.50% (approximate) of the Formula Principal
Distribution Amount (as defined below) for such
Distribution Date plus the unpaid Class A-1 Principal
Shortfall, if any, for such Distribution Date.
The "Formula Principal Distribution Amount" for each
Distribution Date will be equal to the sum of the
following amounts with respect to the following monthly
period: (i) all scheduled payments of principal due on
each outstanding Contract during the related Monthly
Period (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 a Liquidated Contract
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 October 15, 1997, all
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<PAGE>
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 month in which the
dissolution date occurs.
CLASS A-2 INTEREST: Interest on the outstanding Class A-2 Principal Balance
will accrue at the Class A-2 Pass-Through Rate from
September 25, 1997 or from the most recent Distribution
Date on which interest has been paid to but excluding
the following Distribution Date.
Interest will be paid on the Class A-2 Certificates to
the extent of the Amount Available in the Collection
Account on such Distribution Date, after payment of all
interest and principal then payable on the Class A-1
Certificates. Any interest shortfalls will be carried
forward and will bear interest at the Class A-2 Pass-
Through Rate, to the extent legally permissible.
CLASS A-2 PRINCIPAL: To the extent of funds available after payment of all
interest and principal on Class A-1 Certificates and
interest on Class A-2 Certificates, Class A-2
Certificateholders will be entitled to receive the sum
of 5.25% (approximate) of the Formula Principal
Distribution Amount for such Distribution Date plus the
Unpaid Class A-2 Principal Shortfall, if any, from
prior Distribution Dates.
In the event the Amount Available in the Collection
Account is not sufficient to make a full distribution
of principal on the Class A-2 Certificates on a
Distribution Date, such shortfall will be paid out of
the Reserve Account to the extent of funds therein, and
any remaining amount will be carried forward as Unpaid
Class A-2 Principal Shortfall.
CLASS A-3 INTEREST: Interest on the outstanding Class A-3 Principal Balance
will accrue at the Class A-3 Pass-Through Rate from
September 25, 1997 or from the most recent Distribution
Date on which interest has been paid to but excluding
the following Distribution Date.
Interest will be paid on the Class A-3 Certificates to
the extent of the Amount Available in the Collection
Account on such Distribution Date, after payment of all
interest and principal then payable on the Class A-2
Certificates. Any interest shortfalls will be carried
forward and will bear interest at the Class A-3 Pass-
Through Rate, to the extent legally permissible.
CLASS A-3 PRINCIPAL: To the extent of funds available after payment of all
interest and principal on Class A-1 Certificates and
Class A-2 Certificates and interest on Class A-3
Certificates, Class A-3 Certificateholders will be
entitled to receive the sum of 3.50% (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.
In the event the Amount Available in the Collection
Account is not sufficient to make a full distribution
of principal on the Class A-3 Certificates on a
Distribution Date, such shortfall will be paid out of
the Reserve Account to the extent of funds therein, and
any remaining amount will be carried forward as Unpaid
Class A-3 Principal Shortfall.
CLASS A-4 INTEREST: Interest on the outstanding Class A-4 Principal Balance
will accrue at the Class A-4 Pass-Through Rate from
September 25, 1997 or from the most recent Distribution
Date on which interest has been paid to but excluding
the following Distribution
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<PAGE>
Date.
Interest will be paid on the Class A-4 Certificates to
the extent of the Amount Available in the Collection
Account on such Distribution Date, after payment of all
interest and principal then payable on the Class A-3
Certificates. Any interest shortfalls will be carried
forward and will bear interest at the Class A-4 Pass-
Through Rate, to the extent legally permissible.
CLASS A-4 PRINCIPAL: To the extent of funds available after payment of all
interest and principal on Class A-1 Certificates Class
A-2 Certificates and Class A-3 Certificates and
interest on Class A-4 Certificates, Class A-4
Certificateholders will be entitled to receive the sum
of 3.25% (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.
In the event the Amount Available in the Collection
Account is not sufficient to make a full distribution
of principal on the Class A-4 Certificates on a
Distribution Date, such shortfall will be paid out of
the Reserve Account to the extent of funds therein, and
any remaining amount will be carried forward as Unpaid
Class A-4 Principal Shortfall.
CLASS B INTEREST: Interest on the outstanding Class B Principal Balance
will accrue at the Class B Pass-Through Rate from
September 25, 1997 or from the most recent Distribution
Date on which interest has been paid to but excluding
the following Distribution Date.
Interest will be paid on the Class B Certificates to
the extent of the Amount Available in the Collection
Account on such Distribution Date, after payment of all
interest and principal then payable on the Class A-4
Certificates. Any interest shortfalls will be carried
forward and will bear interest at the Class B Pass-
Through Rate, to the extent legally permissible.
CLASS B PRINCIPAL: Class B Certificateholders will be entitled to receive
on each distribution date as payment of principal, to
the extent of the Amount Available in the Collection
Account after payment of all interest and principal
payable on the Class A-4 Certificates and after payment
of all interest payable on the Class B Certificates the
sum of 3.50% of the Formula Principal Distribution
Amount for such Distribution Date plus the Unpaid Class
B Principal Shortfall, if any, for such Distribution
Date.
SPREAD ACCOUNT: The Class A-2, Class A-3 and Class A-4
Certificateholders will have the benefit of a separate
sub-account for each Class contained in an account (the
"Spread Account") to be held by the Trustee. On any
Distribution Date, if the Amount Available in the
Collection Account (after making all distributions on
each Class of Certificates with a prior numeric
designation) is insufficient to distribute all interest
then payable on any such Class of Certificates, the
Trustee will withdraw the amount of the deficiency from
the applicable sub-account (or the amount on deposit in
the applicable sub-account, if less) and deposit such
amount in the collection account for distribution to
the applicable Class of Certificates.
The initial balance of the Spread Account will be zero.
On each Distribution Date, the Trustee will deposit all
funds remaining in the Collection Account, after
distribution of all interest and principal then payable
on the Certificates, first to the Class A-2 sub-
account, then to the Class A-3 sub-account and then to
the Class A-4 sub-account, until the amounts on deposit
in such sub-accounts equal .20%, .15% and .15%
respectively.
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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>
RESERVE ACCOUNT: The Class A-1, A-2, A-3 and A-4
Certificateholders will have the benefit of a
Reserve Account to be held by the Trustee. On
any Distribution Date, if the Amount Available
in the Collection Account (after making all
distributions on each Class of Certificates
with a prior numeric designation) is
insufficient to distribute all interest or
principal payable on any such Class of
Certificates, the Trustee will withdraw the
amount of the deficiency from the Reserve
account and deposit such amount in the
Collection account for distribution to
applicable Class of Certificates. The initial
balance of the Reserve Account will be zero. On
each Distribution Date, the Trustee will
deposit all funds remaining in the Collection
account after the distribution of all interest
and principal then payable on the Certificates
until the amount on deposit in the reserve
account equals 1.50% of the aggregate original
Principal Balance of the Certificates.
LIMITED GUARANTY - Class B Certificateholders are entitled to
CLASS B CERTIFICATES: receive on each Distribution Date the amount
equal to the Guarantee payment, if any, under
Green Tree's Limited Guaranty. The Guaranty
Payment for any Distribution Date will equal
the difference, if any, between the Class B
Formula Principal Distribution Amount and the
remaining Amount available in the Collection
Account after distribution of interest and
principal payable on the Class A-4
certificates.
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
Class B Certificateholders, and then by each
Class of Class A Certificates in inverse
numeric order.
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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>
PRICING SPEED/(1.)/
This transaction will be priced using the following "Base Case" prepayment
rates:
<TABLE>
<CAPTION>
<S> <C>
Home Improvement 20% CPR
Horse Trailers, Sport Vehicles, Keyboard Instruments, RVs 18% CPR
Marine Equipment 225% SPA
Motorcycles and Aircraft 28% CPR
Trucks 1.3% ABS
</TABLE>
(1.) 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 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.
<TABLE>
<CAPTION>
Average Life Sensitivities
at the Respective Percentages of the Base Case Prepayment Model/(2)/
<S> <C> <C> <C> <C> <C>
To Call 80% 90% 100% 110% 120%
--- --- ---- ---- ----
A-1 thru B
Certificates
Avg. Life 3.01 2.83 2.68 2.53 2.40
Window 1-88 1-83 1-79 1-74 1-71
To Maturity 80% 90% 100% 110% 120%
--- --- ---- ---- ----
A-1 thru B
Certificates
Avg. Life 3.20 3.03 2.88 2.74 2.61
Window 1-164 1-164 1-164 1-164 1-164
</TABLE>
(2) The following are the assumed characteristics of Subsequent Contracts as of
the Cutoff Date:
<TABLE>
<CAPTION>
Aggregate Principal Wtd Avg. Wtd Avg. Wtd. Avg.
Asset Type Balance Outstanding Contract Rate Original Term Remaining Term
---------- ------------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Aircraft $ 16,514,057.83 9.54% 163 163
Home Improvement $ 3,985,567.39 14.77% 94 94
Horsetrailer $ 4,481,710.34 11.52% 117 117
Keyboard $ 1,249,685.66 11.25% 73 73
Marine Products $ 24,817,794.97 10.67% 133 133
Motorcycle $ 19,448,539.03 13.12% 64 64
Recreational Vehicle $ 25,849,144.96 9.97% 151 151
Sports Vehicle $ 5,742,285.42 15.56% 53 53
Trucks $ 28,063,008.27 10.75% 52 52
-------------------------------------------------------------------------
$130,151,793.86 11.15% 107 107
</TABLE>
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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>
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 OF MERRILL LYNCH]
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