<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): August 28, 1998
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
----------- -----------
99.1 Term Sheet dated August 28, 1998,
distributed in connection with $800,000,000
Recreational, Equipment and Consumer Trust
1998-C, 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.
Date: September 1, 1998 GREEN TREE FINANCIAL CORPORATION
By: /s/ Scott T. Young
_____________________________
Scott T. Young
Senior Vice President and Controller
3
<PAGE>
INDEX TO EXHIBITS
Exhibit
-------
Number Page
------ ----
99.1 Term Sheet dated August 28, 1998,
distributed in connection with $800,000,000
Recreational, Equipment and Consumer Trust 1998-C,
issued by Green Tree Financial Corporation, as
Seller and Servicer.
4
<PAGE>
TERM SHEET DATED AUGUST 28, 1998
$800,000,000 (Approximate)
GREEN TREE RECREATIONAL, EQUIPMENT & CONSUMER TRUST 1998-C (ISSUER)
GREEN TREE FINANCIAL CORPORATION (SELLER AND SERVICER)
To 10% Call:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
AVG. LIFE EXP. RATINGS
CLASS CLASS SIZE TO CALL TYPE DAY COUNT EXPECTED FINAL (S&P/FITCH)
- --------- ----------- --------- ------- --------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Class A-1 122,000,000 0.24 Fixed Actual/360 04/99 A-1+/F-1+
Class A-2 193,000,000 1.00 Floating Actual/360 04/00 AAA/AAA
Class A-3 150,000,000 2.01 Fixed 30/360 04/01 AAA/AAA
Class A-4 111,000,000 3.00 Fixed 30/360 04/02 AAA/AAA
Class A-5 104,000,000 4.19 Fixed 30/360 11/03 AAA/AAA
Class A-6 36,000,000 5.63 Fixed 30/360 12/04 AA/AA
Class A-7 32,000,000 6.37 Fixed 30/360 02/05 A/A
Class B-1 16,000,000 6.38 Fixed 30/360 02/05 BBB/BBB
Class B-2 36,000,000 6.38 Fixed 30/360 02/05 BBB-/BBB
- ------------------------------------------------------------------------------------------
</TABLE>
TO MATURITY:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
AVG. LIFE EXP. RATINGS
CLASS CLASS SIZE TO MATURITY TYPE DAY COUNT EXPECTED FINAL (S&P/FITCH)
- --------- ----------- --------- ------- --------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Class A-7 32,000,000 6.90 Fixed 30/360 05/06 A/A
Class B-1 16,000,000 8.11 Fixed 30/360 05/07 BBB/BBB
Class B-2 36,000,000 10.19 Fixed 30/360 08/11 BBB-/BBB
- ------------------------------------------------------------------------------------------
</TABLE>
SELLER/SERVICER: Green Tree Financial Corporation
TRANSACTION: Green Tree Recreational, Equipment & Consumer Trust 1998-C
INDENTURE TRUSTEE: U.S. Bank Trust National Association
OWNER TRUSTEE: Wilmington Trust Company
UNDERWRITERS: Merrill Lynch & Co. (Lead Manager), J.P. Morgan & Co.
(Co-Mgr.), Lehman Brothers (Co-Mgr.), and NationsBanc
Montgomery Securities LLC (Co-Mgr.)
CUT-OFF DATE: August 1, 1998 (or the date of origination, if later) for
all Initial and Additional Contracts and the date when
purchased by the Trust for all Subsequent Contracts.
EXP. PRICING: On or about September 2, 1998
EXP. SETTLEMENT: September 28, 1998
DISTRIBUTION DATE: The 15th day of each month (or if such 15th day is not
a business day, the next succeeding business day),
commencing on October 15, 1998
ERISA: Class A-1 through A-7 are ERISA eligible.
Class B-1 and Class B-2 are NOT ERISA eligible.
OPTIONAL REDEMPTION: 10% Clean-up Call
ASSET TYPE BASE CASE PREPAYMENT RATE
- ----------- -------------------------
Horse Trailers, Sport Vehicles,
Keyboard Instruments, Recreational Vehicles 18% CPR
Marine Products 100% (1)
Motorcycle and Aircraft 30% CPR
Trucks 1.4% ABS
(1) The 100% Prepayment Assumption assumes a conditional prepayment rate of 0%
per annum of the then outstanding principal balance and an additional 1.27%
(precisely, 14/11%) per annum in each month thereafter until the twelfth
month. Beginning in the twelfth month and in each month thereafter, the
conditional prepayment rate is 14%.
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>
DESCRIPTION OF THE SECURITIES:
- -----------------------------
CREDIT ENHANCEMENT: Class A-1
through A-5: 15% subordination (Class A-6, A-7, B-1,
and B-2)
Class A-6: 10.50% subordination (Class A-7, B-1
and B-2)
Class A-7: 6.50% subordination (Class B-1 and B-2)
Class B-1: 4.50% subordination (Class B-2)
Class B-2: Limited Guaranty
PRE-FUNDING FEATURE: On the Closing Date, a portion of the proceeds from the
sale of the Notes and Certificates (the "Pre-Funded
Amount") will be deposited in a segregated account (the
"Pre-Funding Account") and used by the Trust to purchase
Subsequent Contracts during the Pre-Funding Period. The
Pre-Funded Amount will be reduced during the Pre-Funding
Period by the amounts thereof used to fund such
purchases. Any amounts remaining in the Pre-Funding
Account following the Pre-Funding Period which had been
allocated to the purchase of Subsequent Contracts will be
paid to the Class A-1 Noteholders.
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>
DISTRIBUTIONS: The Amount Available will generally consist of payments
- -------------- on or in respect of the Contracts, and will include
amounts otherwise payable as the Monthly Servicing and
Guaranty Fee to Green Tree.
On each Distribution Date, the Servicer shall instruct
the Indenture Trustee to distribute from the Collection
Account the Amount Available in the following order of
priority.
1. If Green Tree or an affiliate is no longer the
Servicer, then to the Servicer, the Monthly
Servicing Fee for the related Monthly Period.
2. To the Servicer, reimbursement for advances made
with respect to delinquent payments that were
recovered during the prior Monthly Period.
3. To the Note Distribution Account, all accrued
interest on the Senior Notes (Class A-1,
Class A-2, Class A-3, Class A-4 and Class A-5
Notes).
4. To the Note Distribution Account, the First
Priority Principal Distribution Amount, if any.
5. To the Note Distribution Account, all accrued
interest on the Class A-6 Notes.
6. To the Note Distribution Account, the Second
Priority Principal Distribution Amount, if any.
7. To the Note Distribution Account, all accrued
interest on the Class A-7 Notes.
8. To the Note Distribution Account, the Third
Priority Principal Distribution Amount, if any.
9. To the Certificate Distribution Account, all
accrued interest on the Class B-1 Certificates.
10. To the Note Distribution Account (or, if all the
Notes have been paid in full, to the Certificate
Distribution Account), the Fourth Priority
Principal Distribution Amount, if any.
11. To the Note Distribution Account (or, if all the
Notes have been paid in full, to the Certificate
Distribution Account), the remaining Total
Principal Distribution Amount.
12. To the Certificate Distribution Account, all
accrued interest on the Class B-2 Certificates.
13. To the Certificate Distribution Account, the
remaining Total Principal Distribution Amount
(for payment to the Class B-2 Certificates, if
the Notes and the Class B-1 Certificates have been
paid in full).
14. To Green Tree, any remaining amount as the Monthly
Servicing and Guaranty Fee.
MERRILL LYNCH
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>
DESCRIPTION OF THE
NOTES:
- ------------------
INTEREST: Interest on the Principal Balance of each Class of Notes
will accrue from the Settlement Date, or from the most
recent Distribution Date on which interest has been paid,
to but excluding the following Distribution Date, at the
interest Rate for such Class. The "Principal Balance" of
any Class of Notes as of any Distribution Date will be
the Original Principal Balance of such Class minus all
amounts previously distributed to the Noteholders of such
Class in respect of principal.
Interest on the Class A-1 and Class A-2 Notes will be
calculated on the basis of actual days elapsed in a 360-
day year. Interest on all other Classes of Notes will be
calculated on the basis of 360-day year of twelve 30-day
months. In the event the remaining funds available are
not sufficient to make a full distribution of Interest on
a Class of Notes, the remaining funds available will be
applied to the payment of interest on the Class of Notes
and the amount of the shortfall will be added to the
amount of interest payable on the Class of Notes on the
next Distribution Date. Any amount so carried forward
will bear interest at the applicable interest rate, to
the extent legally permissible.
The interest rate for the Class A-2 Notes will be
floating and will equal the lesser of:
i. one-month LIBOR plus the margin and
ii. 9.00%.
Interest will be paid on the Senior Notes on each
Distribution Date to the extent of funds
available on such Distribution Date. In the event
the funds available are not sufficient to make a
full distribution of interest on the Senior
Notes, the funds available will be applied pro
rata to each Class of Senior Notes based on the
amount payable to each such Class.
Interest will be paid on the Class A-6 Notes on
each Distribution Date, to the extent of the
remaining funds available on such Distribution
Date after payment of (i) all interest accrued on
the Senior Notes and (ii) the First Priority
Principal Distribution Amount, if any.
Interest will be paid on the Class A-7 Notes on
each Distribution Date, to the extent of the
remaining funds available on such Distribution
Date after payment of (i) all interest accrued on
the Senior Notes, (ii) the First Priority
Principal Distribution Amount (if any), (iii) all
interest accrued on the Class A-6 Notes and (iv)
the Second Priority Principal Distribution
Amount, if any.
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>
PRINCIPAL: Noteholders will be entitled to receive on each
Distribution Date as payment of principal, in the
manner and order of priority set forth below, an
amount equal to the Total Principal Distribution
Amount for such Distribution Date. Such amount
will be paid as principal on the Class A-1 Notes
until the Class A-1 Notes have been paid in full,
then on the Class A-2 Notes until the Class A-2
Notes have been paid in full and so on until the
Class A-7 Notes have been paid in full.
The "Total Principal Distribution Amount" for any
Distribution Date will equal:
(i) the Formula Principal Distribution Amount for
such Distribution Date, plus
(ii) the aggregate of all Formula Principal Shortfalls,
if any, for prior Distribution Dates, plus
(iii) the First Priority Principal Distribution Amount,
if any, the Second Principal Distribution Amount,
if any, the Third Priority Principal Amount, if
any, and the Fourth Priority Principal
Distribution, if any for such Distribution Date,
minus
(iv) all amounts actually paid on the Notes and
Certificates on prior Distribution Dates in
respect of a First Priority Principal Distribution
Amount, Second Priority Principal Distribution
Amount, Third Priority Principal Distribution
Amount, or Fourth Priority Principal Distribution
Amount.
The "Formula Principal Distribution Amount" with respect
to any Distribution Date will be an amount equal to the
sum of the following amounts with respect to the related
Monthly Period. In each case computed in accordance with
the method specified in each Contract.
(i) all scheduled payments of principal due on each
outstanding Contract during the related Monthly
Period (after adjustments for previous Partial
Principal Prepayments and after any adjustments to
a contract's amortization schedule as a result of
a bankruptcy or similar proceeding involving the
related Obligor),
(ii) the Scheduled Principal Balance of each Contract
which, during the related Monthly Period, was
purchased by Green Tree pursuant to the Sale and
Servicing Agreement on account of a breach of a
representation or warranty,
(iii) all Partial Principal Prepayments applied and all
Principal Prepayments in Full received on
Contracts during the related Monthly Period
(iv) the Scheduled Principal Balance of each Contract
that became a Liquidated Contract during the
related Monthly Period plus the amount of any
reduction in the outstanding principal balance of
a Contract during such Monthly Period ordered as a
result of a bankruptcy or similar proceeding
involving the related Obligor,
(v) all collections in respect of principal on the
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 such Distribution
Date occurs), minus
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>
(vi) with respect to all Distribution Dates other than
the Distribution Date in September 1998, all
collections of principal on the Contracts received
during the related Monthly Period up to and
including the third business day prior to the
proceeding Distribution Date (but in no event
later than the 10th day of the prior month)
In the event the remaining funds available for such
Distribution Date are not sufficient to make a full
distribution of the Formula Principal Distribution
Amount, the amount of such deficiency (the "Formula
Principal Shortfall" for such Distribution Date) will be
added to the Total Principal Distribution Amount for the
next Distribution Date.
In the unlikely event that on any Distribution Date, (i)
the aggregate Principal Balance of the Senior Notes is
greater than (ii) the Pool Scheduled Principal Balance as
of the immediately preceding Distribution Date, minus the
aggregate Scheduled Principal Balance of all Defaulted
Contracts, minus $175,000, the amount of such deficiency
(the "First Priority Principal Distribution Amount") will
be payable as an additional payment of principal on the
Class of Notes then entitled to receive the Total
Principal Distribution Amount, from funds available for
distribution on such Distribution Date after the payment
of all interest then payable on the Senior Notes but
prior to the payment of interest then payable on the
Class A-6 Notes.
Similarly, in the event that on any Distribution Date,
(i) the aggregate Principal Balance of the Senior Notes,
plus the Principal Balance of the Class A-6 Notes, minus
the amount of any First Priority Principal Distribution
Amount paid on such Distribution Date, is greater than
(ii) the Pool Scheduled Principal Balance as of the
immediately preceding Distribution Date, minus the
aggregate Scheduled Principal Balance of all Defaulted
Contracts, minus $175,000, the amount of such deficiency
(the "Second Priority Principal Distribution Amount")
will be payable as an additional payment of principal on
the Class of Notes then entitled to receive the Total
Principal Distribution Amount, from funds available for
distribution on such Distribution Date after the payment
of all interest then payable on the Senior Notes, the
First Priority Principal Distribution Amount and all
interest then payable on the Class A-6 Notes, but prior
to the payment of interest then payable on the Class A-7
Notes.
Similarly, in the event that on any Distribution Date,
(i) the aggregate Principal Balance of the Notes, minus
the amount of any First Priority Principal Distribution
Amount paid on such Distribution Date, and minus the
amount of any Second Priority Principal Distribution
Amount paid on such Distribution Date, is greater than
(ii) the Pool Scheduled Principal Balance as of the
immediately preceding Distribution Date, minus the
aggregate Scheduled Principal Balance of all Defaulted
Contracts, minus $175,000, the amount of such deficiency
(the "Third Priority Principal Distribution Amount") will
be payable as an additional payment of principal on the
Class of Notes then entitled to receive the Total
Principal Distribution Amount, from funds available for
distribution on such Distribution Date after the payment
of all interest then payable on the Senior Notes, the
First Priority Principal Distribution Amount, all
interest then payable on the Class A-6 Notes, the Second
Priority Principal Distribution Amount and all interest
then payable on the Class A-7 Notes, but prior to the
payment of interest then payable on the Class B-1
Certificates.
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>
Similarly, in the event that on any Distribution Date,
(i) the aggregate Principal Balance of the Notes, plus
the Principal Balance of the Class B-1 Certificates,
minus the amount of any First Priority Principal
Distribution Amount paid on such Distribution Date, minus
the amount of any Second Priority Principal Distribution
Amount paid on such Distribution Date, and minus the
amount of any Third Priority Principal Distribution
Amount paid on such Distribution Date, is greater than
(ii) the Pool Scheduled Principal Balance as of the
immediately preceding Distribution Date, minus the
aggregate Scheduled Principal Balance of all Defaulted
Contracts, minus $175,000, the amount of such deficiency
(the "Fourth Priority Principal Distribution Amount")
will be payable as an additional payment of principal on
the Class of Notes or Certificates then entitled to
receive the Total Principal Distribution Amount from
funds available for distribution on such Distribution
Date after the payment of all interest then payable on
the Senior Notes, the First Priority Principal
Distribution Amount, all interest then payable on the
Class A-6 Notes, the Second Priority Principal
Distribution Amount, all interest then payable on the
Class A-7 Notes, the Third Priority Principal
Distribution Amount and all interest then payable on the
Class B-1 Certificates, but prior to the payment of the
Formula Principal Distribution Amount.
A "Liquidated Contract" means any Defaulted Contract as
to which the Servicer has determined that all amounts
which it expects to recover from or on account of such
Contract through the date of disposition of the related
Product have been recovered or any Defaulted Contract in
respect of which the related Product has been realized
upon and disposed of and the proceeds of such disposition
have been received. A "Defaulted Contract" is any
Contract as to which the Servicer has commenced
repossession procedures or assigned such Contract to a
third party for repossession or other enforcement, but
which has not become a Liquidated Contract.
DESCRIPTION OF THE CONSUMER CERTIFICATES:
- ----------------------------------------
DISTRIBUTIONS: Certificateholders will be entitled to receive on each
Distribution Date commencing in September 1998, to the
extent that funds available (together with the Guaranty
Payment for the Class B-2 Certificates) described below
are sufficient therefor, distributions of interest and
principal in the manner and order of priority set forth
below.
CLASS B-1 INTEREST: Interest on the Principal Balance of the Class B-1
Certificates will accrue from the Settlement Date or from
the most recent Distribution Date, to but excluding the
following Distribution Date, at the Class B-1 Pass-
Through Rate. The "Class B-1 Principal Balance" as of any
Distribution Date will be the Original Principal Balance
of such Class minus all amounts previously distributed to
the Class B-1 Certificateholders in respect of principal.
Interest will be calculated for Class B-1 Certificates on
the basis of a 360-day year of twelve 30-day months.
Interest will be paid on the Class B-1 Certificates on
each Distribution Date to the extent of funds available
on such Distribution Date, after payment of (i) interest
on the Notes, (ii) the First Priority Principal
Distribution Amount (if any), (iii) the Second Priority
Principal Distribution
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
account executive for another copy
<PAGE>
Amount (if any) and (iv) the Third Priority Principal
Distribution Amount (if any).
In the event the remaining funds available are not
sufficient to make a full distribution of interest on the
Class B-1 Certificates, the remaining funds available
will be applied to the payment of interest on such Class
and the amount of the shortfall will be carried forward
and added to the amount of interest payable on the next
Distribution Date. Any amount so carried forward will
bear interest at the Class B-1 Pass-Through Rate to the
extent legally permissible.
CLASS B-1 PRINCIPAL: No distributions of principal on the Class B-1
Certificates will be payable until all of the Notes have
been paid in full. On each Distribution Date commencing
on the Distribution Date on which the Notes are paid in
full, principal will be paid on the Class B-1
Certificates in an amount equal to the Total Principal
Distribution Amount for such Distribution Date, to the
extent of funds available on such Distribution Date after
payment of interest on the Class B-1 Certificates.
CLASS B-2 INTEREST: Interest on the Principal Balance of the Class B-2
Certificates will accrue from the Settlement Date, or
from the most recent Distribution Date, to but excluding
the following Distribution Date, at the Class B-2 Pass-
Through Rate. The "Class B-2 Principal Balance" as of any
Distribution Date will be the Original Principal Balance
of such Class minus all amounts previously distributed to
the Class B-2 Certificateholders in respect of principal.
Interest will be calculated for Class B-2 Certificates on
the basis of a 360-day year of twelve 30-day months.
Interest will be paid on the Class B-2 Certificates on
each Distribution Date to the extent of funds available
on such Distribution Date, after payment of all interest
and principal then payable on the Notes and the Class B-1
Certificates.
In the event the remaining funds available are not
sufficient to make a full distribution of interest on the
Class B-2 Certificates, the remaining funds available
will be applied to the payment of interest on such Class
and the amount of the shortfall will be carried forward
and added to the amount of interest payable on the next
Distribution Date. Any amount so carried forward will
bear interest at the Class B-2 Pass-Through Rate, to the
extent legally permissible.
CLASS B-2 PRINCIPAL: No distributions of principal on the Class B-2
Certificates will be payable until all of the Class B-1
Certificates have been paid in full (other than a Class
B-2 Principal Liquidation Loss paid by Green Tree
pursuant to the Limited Guaranty). On each Distribution
Date commencing on the Distribution Date on which the
Class B-1 Certificates are paid in full, principal will
be paid on the Class B-2 Certificates in an amount equal
to the Total Principal Distribution Amount for such
Distribution Date, to the extent of funds available on
such Distribution Date after payment of interest on the
Class B-2 Certificates.
LIMITED GUARANTY: If the Pool Scheduled Principal Balance for any
Distribution Date is less than the sum of the aggregate
outstanding Principal Balance of the Notes and the
Certificates after giving effect to all distributions on
such Distribution Date, then Green Tree will be obligated
to pay the amount of such deficiency (a "Class B-2
MERRILL LYNCH
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
account executive for another copy
<PAGE>
Principal Liquidation Loss") under the Limited Guaranty.
If Green Tree should fail to pay such amount, however,
the Class B-2 Principal Balance would not be reduced and
interest would continue to accrue on the full Class B-2
Principal Balance. Securityholders would, however, be
entitled to receive such unpaid amount as part of the
Total Principal Distribution Amount prior to any payment
of the Monthly Servicing and Guaranty Fee to Green Tree
on any subsequent Distribution Date.
In order to mitigate the effect of the subordination of
the Class B-2 Certificates and the effect of liquidation
losses and delinquencies on the Contracts, the Class B-2
Certificateholders are entitled to receive on each
Distribution Date the amount equal to the Guaranty
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-2 Distributable
Amount and the remaining funds available in the
Collection Account after payment of all interest and
principal on the Notes and Class B-1 Certificates. The
"Class B-2 Distribution Amount" equals the unpaid and
accrued interest on the Class B-2 Certificates, plus on
each Distribution Date commencing on the Distribution
Date on which the Notes and Class B-1 Certificates are
paid in full, principal in an amount equal to the Total
Principal Distribution Amount for such Distribution Date
(less, on the Distribution Date on which the Class B-1
Certificates are paid in full, the portion thereof
payable on the Class B-1 Certificates), plus any Class
B-2 Principal Liquidation Loss for such Distribution
Date.
OPTIONAL REDEMPTION: The Consumer Securities will be redeemed in whole, but
not in part, on any Distribution Date on which Green Tree
exercises its option to purchase the Contracts. Green
Tree may purchase the Contracts when the Pool Scheduled
Principal Balance has declined to 10% or less of the
Cutoff Date Pool Principal Balance. Such redemption would
effect early retirement of the Class A-6 Notes, Class A-7
Notes, the Class B-1 Certificates and Class B-2
Certificates.
MERRILL LYNCH
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>
AVERAGE LIFE SENSITIVITIES
AVERAGE LIFE SENSITIVITY (TO CALL)
<TABLE>
<CAPTION>
Prepayment Scenarios
I II III IV V
----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Avg. life (yrs.)/
Exp. final (mos.)
CLASS
- -----
Class A-1 0.28 / 8 0.26 / 7 0.24 / 7 0.22 / 6 0.20 / 6
Class A-2 1.16 / 22 1.08 / 20 1.00 / 19 0.93 / 17 0.87 / 16
Class A-3 2.30 / 35 2.15 / 33 2.01 / 31 1.88 / 29 1.76 / 27
Class A-4 3.40 / 48 3.20 / 45 3.00 / 43 2.82 / 40 2.66 / 38
Class A-5 4.72 / 71 4.44 / 66 4.19 / 62 3.95 / 58 3.74 / 54
Class A-6 6.45 / 86 6.01 / 80 5.63 / 75 5.27 / 71 4.96 / 66
Class A-7 7.21 / 87 6.79 / 82 6.37 / 77 5.96 / 72 5.62 / 68
Class B-1 7.21 / 87 6.80 / 82 6.38 / 77 5.96 / 72 5.63 / 68
Class B-2 7.21 / 87 6.80 / 82 6.38 / 77 5.96 / 72 5.63 / 68
</TABLE>
AVERAGE LIFE SENSITIVITY (TO MATURITY)
<TABLE>
<CAPTION>
Prepayment Scenarios
I II III IV V
----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Avg. life (yrs.)/
Exp. final (mos.)
CLASS
- -----
Class A-7 7.77 / 103 7.33 / 97 6.90 / 92 6.50 / 87 6.12 / 83
Class B-1 8.95 / 113 8.53 / 109 8.11 / 104 7.70 / 99 7.31 / 94
Class B-2 10.76 / 155 10.49 / 155 10.19 / 155 9.89 / 155 9.57 / 155
</TABLE>
<TABLE>
<CAPTION>
Prepayment Scenarios
I II III IV V
----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Securities (1) 80% 90% 100% 110% 120%
</TABLE>
(1) The 100% Base Case assumes 18% CPR with respect to Horse Trailers, Sport
Vehicles, Keyboard Instruments and Recreational Vehicles; 30% CPR with
respect to Motorcycles and Aircraft; 1.40% ABS with respect to Trucks; and
with respect to Marine Products, 100% Prepayment Assumption, which assumes
a conditional prepayment rate of 0% per annum of the then outstanding
principal balance and an additional 1.27% (precisely, 14/11%) per annum in
each month thereafter until the twelfth month.
MERRILL LYNCH
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>
THE CONTRACT POOL
GENERAL
These computational materials contain information regarding the Initial
Contracts, which were originated through July 30, 1998 and will be transferred
to the Trust on the Closing Date. The information for each Initial Contract is
as of the Cutoff Date for such Initial Contract. The Initial Contracts had an
aggregate principal balance as of the Cutoff Date of $498,904,486.00. The Sale
and Servicing Agreement provides that the Additional Contracts will be
purchased by the Trust on the Settlement Date and that Subsequent Contracts will
be purchased by the Trust after the Settlement Date.
The Initial Contracts (i) had a remaining maturity, as of the Cutoff Date, of
at least 5 months, but not more than 240 months, (ii) had an original maturity
of at least 5 months, but not more than 240 months, (iii) had an original
principal balance of at least $1,540.11 and not more than $5,525,000.00, (iv)
had a remaining principal balance as of the Cutoff Date of at least $1,003.65
and not more than $5,525,000.00 and (v) had a contractual rate of interest
("Initial Contract Rate") of at least 6.99% and not more than 21.00%. Neither
Green Tree nor the Servicer may substitute other contracts for the Initial
Contracts at any time during the term of the Sale and Servicing Agreement.
<TABLE>
<CAPTION>
Wtd. Avg.
Wtd. Avg. WTD.
% OF SCHED. WTD. ORIG. AVG. WTD.
# OF % OF SCHEDULED Prin. AVG. PRIN. Avg. Sched. Rem. Avg.
ASSET TYPE CONTRACTS CONTRACTS PRIN. BALANCE BALANCE BALANCE RATE TERM TERM (1) LTV
- ----------- --------- --------- -------------- ----------- ---------- ----- --------- -------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AIRCRAFT 251 1.02 64,505,448.71 12.93 256,993.82 8.85 133 133 90
HORSETRAILER 1,920 7.77 20,580,877.01 4.13 10,719.21 10.75 124 124 84
KEYBOARD 453 1.83 5,039,785.21 1.01 11,125.35 11.02 97 97 85
MARINE PRODUCTS 5,398 21.86 91,835,221.15 18.41 17,012.82 10.29 147 146 86
MOTORCYCLE 6,017 24.36 55,580,747.81 11.14 9,237.29 12.69 68 67 85
RECREATIONAL VEH 6,121 24.78 122,121,239.47 24.48 19,951.19 9.78 155 154 84
SPORT VEH 3,076 12.45 15,918,380.32 3.19 5,175.03 14.99 54 53 86
TRUCKS 1,462 5.92 123,322,786.41 24.72 84,352.11 10.00 57 56 94
Totals 24,698 100.00 498,904,486.00 100.0 0 20,200.20 10.35 111 111 88
</TABLE>
(1) Based on scheduled payments due after the Cutoff Date and assuming no
prepayments on the Contracts.
The following are the assumed characteristics of Additional and Subsequent
Contracts as of the Cut-off Date:
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL WEIGHTED AVERAGE WEIGHTED AVERAGE WEIGHTED AVERAGE
ASSET TYPE BALANCE OUTSTANDING ORIGINAL TERM REMAINING TERM RATE
- ----------- ------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
AIRCRAFT 25,494,551 133 133 8.85
HORSETRAILER 9,419,123 124 124 10.75
KEYBOARD 4,960,215 97 97 11.02
MARINE PRODUCTS 48,164,779 147 147 10.29
MOTORCYCLE 39,419,252 68 68 12.69
RECREATIONAL VEH 67,878,761 155 155 9.78
SPORT VEH 14,081,620 54 54 14.99
TRUCKS 91,677,214 57 57 10.00
----------- --- --- -----
Totals 301,095,515 111 111 10.35
</TABLE>
MERRILL LYNCH
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>
GEOGRAPHIC CONCENTRATION OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF PERCENT OF INITIAL
CONTRACTS AS OF NUMBER OF PRINCIPAL BALANCE AS OF CUTOFF DATE POOL
STATE CUTOFF DATE CONTRACTS CUTOFF DATE PRINCIPAL BALANCE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AK 63 0.26% 5,690,900.00 1.14%
AL 525 2.13 12,334,853.00 2.47
AR 353 1.43 7,996,918.00 1.60
AZ 1,173 4.75 21,392,134.00 4.29
CA 3,700 14.98 75,085,329.00 15.05
CO 711 2.88 13,656,699.00 2.74
CT 294 1.19 2,474,614.00 0.50
DC 5 0.02 155,909.00 0.03
DE 40 0.16 628,940.00 0.13
FL 1,904 7.71 42,013,502.00 8.42
GA 844 3.42 14,302,128.00 2.87
HI 44 0.18 686,571.00 0.14
IA 131 0.53 2,924,350.00 0.59
ID 66 0.27 1,584,589.00 0.32
IL 416 1.68 6,659,768.00 1.33
IN 296 1.20 4,749,341.00 0.95
KS 130 0.53 5,946,781.00 1.19
KY 279 1.13 3,308,355.00 0.66
LA 276 1.12 6,123,084.00 1.23
MA 368 1.49 3,974,548.00 0.80
MD 303 1.23 7,648,419.00 1.53
ME 63 0.26 765,541.00 0.15
MI 239 0.97 10,010,507.00 2.01
MN 518 2.10 12,853,884.00 2.58
MO 514 2.08 10,798,168.00 2.16
MS 228 0.92 6,241,378.00 1.25
MT 24 0.10 639,311.00 0.13
NC 1,193 4.83 14,435,755.00 2.89
ND 24 0.10 448,877.00 0.09
NE 111 0.45 1,742,433.00 0.35
NH 65 0.26 3,011,309.00 0.60
NJ 635 2.57 9,349,122.00 1.87
NM 375 1.52 5,060,391.00 1.01
NV 540 2.19 11,192,155.00 2.24
NY 706 2.86 13,154,219.00 2.64
OH 355 1.44 11,129,174.00 2.23
OK 452 1.83 10,375,055.00 2.08
OR 611 2.47 10,757,635.00 2.16
PA 413 1.67 5,285,265.00 1.06
RI 71 0.29 641,270.00 0.13
SC 436 1.77 10,685,354.00 2.14
SD 67 0.27 4,287,931.00 0.86
TN 505 2.04 9,570,579.00 1.92
TX 2,670 10.81 57,221,562.00 11.47
UT 125 0.51 4,558,686.00 0.91
VA 589 2.38 9,565,601.00 1.92
VT 21 0.09 261,602.00 0.05
WA 957 3.87 19,820,393.00 3.97
WI 178 0.72 3,579,321.00 0.72
WV 52 0.21 921,967.00 0.18
WY 40 0.16 1,202,308.00 0.24
------ ------ -------------- ------
Total 24,698 100.00% 498,904,486.00 100.00%
====== ====== ============== ======
</TABLE>
MERRILL LYNCH
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>
DISTRIBUTION OF ORIGINAL INITIAL CONTRACT AMOUNTS
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF PERCENT OF INITIAL
CONTRACTS AS OF NUMBER OF PRINCIPAL BALANCE AS OF CUTOFF DATE POOL
ORIGINAL CONTRACT AMOUNT CUTOFF DATE CONTRACTS CUTOFF DATE PRINCIPAL BALANCE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Less than 10000 11,427 46.27% 65,827,328.00 13.19%
10000- 19999 8,188 33.15 115,984,045.00 23.25
20000- 29999 2,155 8.73 51,458,008.00 10.31
30000- 39999 825 3.34 28,168,082.00 5.65
40000- 49999 505 2.04 22,447,293.00 4.50
50000- 59999 347 1.40 18,735,541.00 3.76
60000- 69999 206 0.83 13,186,585.00 2.64
70000- 79999 209 0.85 15,625,702.00 3.13
80000- 89999 209 0.85 17,727,475.00 3.55
90000- 99999 166 0.67 15,698,300.00 3.15
100000- 109999 93 0.38 9,620,625.00 1.93
110000- 119999 56 0.23 6,407,667.00 1.28
120000- 129999 41 0.17 5,052,829.00 1.01
130000- 139999 22 0.09 2,947,839.00 0.59
140000- 149999 22 0.09 3,186,651.00 0.64
150000- 159999 18 0.07 2,779,406.00 0.56
160000- 169999 11 0.04 1,827,754.00 0.37
170000- 179999 17 0.07 2,964,299.00 0.59
180000- 189999 11 0.04 2,026,616.00 0.41
190000- 199999 13 0.05 2,517,721.00 0.50
200000- 249999 25 0.10 5,552,714.00 1.11
250000- 299999 25 0.10 6,702,650.00 1.34
300000- 349999 12 0.05 3,875,167.00 0.78
350000- 399999 22 0.09 7,975,736.00 1.60
400000- 449999 14 0.06 5,908,474.00 1.18
450000- 499999 9 0.04 4,350,171.00 0.87
500000- 549999 6 0.02 3,105,463.00 0.62
550000- 599999 1 0.00 569,741.00 0.11
600000- 649999 2 0.01 1,254,829.00 0.25
650000- 699999 1 0.00 671,805.00 0.13
700000- 749999 6 0.02 4,265,054.00 0.85
750000- 799999 4 0.02 3,101,201.00 0.62
800000- 849999 5 0.02 4,122,427.00 0.83
850000- 899999 1 0.00 860,061.00 0.17
900000- 949999 3 0.01 2,699,047.00 0.54
950000- 999999 2 0.01 1,959,672.00 0.39
1000000+ 19 0.08 37,740,507.00 7.56
------ ------ -------------- ------
Total 24,698 100.00% 498,904,486.00 100.00%
====== ====== ============== ======
</TABLE>
MERRILL LYNCH
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>
YEAR OF ORIGINATION OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF PERCENT OF INITIAL
CONTRACTS AS OF NUMBER OF PRINCIPAL BALANCE AS OF CUTOFF DATE POOL
YEAR OF ORIGINATION CUTOFF DATE CONTRACTS CUTOFF DATE PRINCIPAL BALANCE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1986 1 0.00% 21,605.00 0.00%
1995 12 0.05 352,684.00 0.07
1996 50 0.20 1,309,908.00 0.26
1997 82 0.33 2,056,179.00 0.41
1998 24,553 99.41 495,164,110.00 99.25
------ ------ -------------- ------
Total 24,698 100.00% 498,904,486.00 100.00%
====== ====== ============== ======
</TABLE>
DISTRIBUTION OF ORIGINAL LOAN-TO-VALUE RATIOS OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF PERCENT OF INITIAL
CONTRACTS AS OF NUMBER OF PRINCIPAL BALANCE AS OF CUTOFF DATE POOL
LOAN-TO-VALUE RATIO CUTOFF DATE CONTRACTS CUTOFF DATE PRINCIPAL BALANCE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
10.001- 15.000 5 0.02% 18,347.00 0.00%
15.001- 20.000 13 0.05 77,124.00 0.02
20.001- 25.000 32 0.13 152,173.00 0.03
25.001- 30.000 52 0.21 282,042.00 0.06
30.001- 35.000 88 0.36 520,243.00 0.10
35.001- 40.000 122 0.49 1,002,819.00 0.20
40.001- 45.000 181 0.73 1,405,159.00 0.28
45.001- 50.000 307 1.24 2,879,418.00 0.58
50.001- 55.000 415 1.68 4,411,578.00 0.88
55.001- 60.000 515 2.09 5,200,384.00 1.04
60.001- 65.000 661 2.68 7,557,771.00 1.51
65.001- 70.000 1,007 4.08 13,056,577.00 2.62
70.001- 75.000 1,565 6.34 21,988,465.00 4.41
75.001- 80.000 2,362 9.56 40,718,679.00 8.16
80.001- 85.000 3,405 13.79 63,903,797.00 12.81
85.001- 90.000 6,915 28.00 114,488,817.00 22.95
90.001- 95.000 3,415 13.83 87,361,279.00 17.51
95.001-100.000 3,638 14.73 133,879,814.00 26.83
------ ------ -------------- ------
Total 24,698 100.00% 498,904,486.00 100.00%
====== ====== ============== ======
</TABLE>
MERRILL LYNCH
14
- --------------------------------------------------------------------------------
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>
INITIAL CONTRACT RATES
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF PERCENT OF INITIAL
CONTRACTS AS OF NUMBER OF PRINCIPAL BALANCE AS OF CUTOFF DATE POOL
CONTRACT RATE CUTOFF DATE CONTRACTS CUTOFF DATE PRINCIPAL BALANCE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LESS THAN 7.00001 12 0.05% 310,672.00 0.06%
7.00001- 8.00000 166 0.67 31,668,794.00 6.35
8.00001- 9.00000 1,275 5.16 119,890,300.00 24.03
9.00001- 10.00000 4,749 19.23 125,627,225.00 25.18
10.00001-11.00000 5,794 23.46 97,401,113.00 19.52
11.00001-12.00000 3,933 15.92 48,156,778.00 9.65
12.00001-13.00000 2,607 10.56 28,158,533.00 5.64
13.00001-14.00000 2,008 8.13 19,102,457.00 3.83
14.00001-15.00000 1,591 6.44 12,680,836.00 2.54
15.00001-16.00000 1,075 4.35 6,807,808.00 1.36
16.00001-17.00000 764 3.09 4,927,801.00 0.99
17.00001+ 724 2.93 4,172,167.00 0.84
------ ------ -------------- ------
Total 24,698 100.00% 498,904,486.00 100.00%
</TABLE>
REMAINING MONTHS TO MATURITY OF INITIAL CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF PERCENT OF INITIAL
REMAINING MONTHS TO CONTRACTS AS OF NUMBER OF PRINCIPAL BALANCE AS OF CUTOFF DATE POOL
MATURITY CUTOFF DATE CONTRACTS CUTOFF DATE PRINCIPAL BALANCE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LESS THAN 31 810 3.28% 10,621,958.00 2.13%
31- 60 9,726 39.38 156,984,297.00 31.47
61- 90 4,659 18.86 79,210,159.00 15.88
91- 120 2,827 11.45 52,421,562.00 10.51
121- 150 4,492 18.19 78,076,637.00 15.65
151- 180 1,912 7.74 93,566,368.00 18.75
181- 210 35 0.14 2,046,738.00 0.41
211- 240 237 0.96 25,976,768.00 5.21
------ ------ -------------- ------
Total 24,698 100.00% 498,904,486.00 100.00%
====== ====== ============== ======
</TABLE>
MERRILL LYNCH
15
- --------------------------------------------------------------------------------
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 "Computational
Material") are privileged and confidential and are intended for use by the
addressee only. These Computational Materials are 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 superseded by the
applicable prospectus supplement and by any other information 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 Computational Material which may
or may not be stated therein. As such, no assurance can be given as to the
accuracy, appropriateness or completeness of the Computational Materials in any
particular context; or as to whether the Computational Materials and/or the
assumptions upon which they are based reflect present market conditions or
future market performance. These Computational Materials 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 Computational Materials 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 Computational Materials.
Furthermore, unless otherwise provided, the Computational Materials assume no
losses on the underlying assets and no interest shortfall. The specific
characteristics of the securities may differ from those shown in the
Computational Materials due to differences between the actual underlying assets
and the hypothetical assets used in preparing the Computational Materials. The
principal amount and designation of any security described in the Computational
Materials 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, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state.
Prospective purchasers are referred to the final prospectus and prospectus
supplement relating to the securities discussed in this communication for
definitive Computational Materials on any matter discussed in this
communication. A final prospectus and prospectus supplement may be obtained by
contacting the Merrill Lynch Trading Desk at (212) 449-3659.
Please be advised that mortgage-backed and/or 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 risks. 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.
MERRILL LYNCH
16
- --------------------------------------------------------------------------------
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
