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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): April 21, 1998
GREEN TREE FINANCIAL CORPORATION
--------------------------------
(Exact name of registrant as specified in its charter)
01-08916
Delaware [333-36969] 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)
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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.
(c) Exhibits.
The following is filed herewith. The exhibit numbers correspond
with Item 601(b) of Regulation S-K.
2
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Exhibit No. Description
----------- -----------
99 External Computational and Descriptive
Information distributed in connection with
Certificates for Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates,
Series 1998-3, 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
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INDEX TO EXHIBITS
Exhibit Number Filed Electroncially
- -------------- --------------------
99 External Computational and Descriptive Information
distributed in connection with Certificates for
Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificates, Series 1998-3, issued
by Green Tree Financial Corporation, as Seller and
Servicer.
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TERM SHEET DATED APRIL 21, 1998
GREEN TREE FINANCIAL CORPORATION
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 1998-3
$500,000,000 (APPROXIMATE)
SUBJECT TO REVISION
SELLER/SERVICER: GREEN TREE FINANCIAL CORPORATION ("GREEN TREE").
TRUSTEE: U.S. BANK NATIONAL ASSOCIATION, ST. PAUL, MINNESOTA.
UNDERWRITERS: MERRILL LYNCH & CO. (LEAD), LEHMAN BROTHERS INC. (CO), SALOMON
SMITH BARNEY(CO).
RATINGS WAL @ EXP. FINAL
TO CALL AMOUNT S&P/FITCH 150% MHP MATURITY
- ------- ------ ---------- -------- ----------
A-1 $20,900,000 A-1+/F-1+ 0.39 1/99
A-2 $28,000,000 AAA/AAA 1.01 9/99
A-3 $60,000,000 AAA/AAA 2.00 1/01
A-4 $30,000,000 AAA/AAA 3.01 9/01
A-5 $105,000,000 AAA/AAA 5.00 5/05
A-6 $178,600,000 AAA/AAA 12.75 4/16
M-1 $35,000,000 AA/AA- 10.63 4/16
B-1 $22,500,000 BBB+/BBB+ 6.86 7/08
B-2 $20,000,000 BBB-/BBB 15.17 4/16
TO
MATURITY
A-6 $178,600,000 AAA/AAA 13.38 1/24
M-1 $35,000,000 AA/AA- 11.07 1/24
B-2 $20,000,000 BBB-/BBB 20.08 8/28
FOR INFORMATION CONCERNING CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS, SEE "RISK FACTORS" IN THE PROSPECTUS SUPPLEMENT,
PROSPECTUS HEREIN. CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE DEFINED HAVE
THE MEANINGS SET FORTH IN THE PROSPECTUS AND PROSPECTUS SUPPLEMENT.
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CUT-OFF DATE: APRIL 15, 1998 (OR THE DATE OF ORIGINATION, IF LATER) FOR
EACH CONTRACT OTHER THAN THE SUBSEQUENT CONTRACTS, AND FOR
EACH SUBSEQUENT CONTRACT, THE DATE ON WHICH SUCH CONTRACT IS
PURCHASED BY THE TRUST.
LEGAL FINAL: CLASS A-1 - MAY 1, 1999
ALL OTHER CLASSES - MARCH 1, 2030
EXP. PRICING: WEEK OF APRIL 20, 1998.
EXP. SETTLEMENT: WEEK OF APRIL 27, 1998.
INTEREST/PRINCIPAL: THE 1ST DAY OF EACH MONTH (OR IF SUCH 1ST DAY IS NOT
A BUSINESS DAY, THE NEXT SUCCEEDING BUSINESS DAY),
COMMENCING ON JUNE 1, 1998.
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: THE CLASS A AND THE CLASS M-1 CERTIFICATES WILL BE
"LEGAL INVESTMENTS" FOR CERTAIN TYPES OF
INSTITUTIONAL INVESTORS TO THE EXTENT PROVIDED IN
THAT ACT.
BECAUSE THE CLASS B CERTIFICATES WILL NOT BE RATED IN ONE OF
ITS TWO HIGHEST RATING CATEGORIES BY S&P OR FITCH, THE CLASS
B CERTIFICATES WILL NOT CONSTITUTE "MORTGAGE RELATED
SECURITIES" FOR PURPOSES OF SMMEA. ACCORDINGLY, MANY
INSTITUTIONS WITH LEGAL AUTHORITY TO INVEST IN MORE HIGHLY
RATED SECURITIES BASED ON FIRST MORTGAGE LOANS MAY NOT BE
LEGALLY AUTHORIZED TO INVEST IN THE CLASS B CERTIFICATES.
SEE "LEGAL INVESTMENT CONSIDERATIONS" IN THE PROSPECTUS
SUPPLEMENT AND IN THE PROSPECTUS. NO REPRESENTATIONS ARE
MADE AS TO ANY REGULATORY REQUIREMENTS OR CONSIDERATIONS
(INCLUDING WITHOUT LIMITATION REGULATORY CAPITAL
REQUIREMENTS) APPLICABLE TO THE PURCHASE OF CLASS B
CERTIFICATES BY BANKS, SAVINGS AND LOAN ASSOCIATIONS OR
OTHER FINANCIAL INSTITUTIONS, WHICH INSTITUTIONS SHOULD
CONSULT THEIR OWN COUNSEL AS TO SUCH MATTERS.
TAX STATUS: FOR FEDERAL INCOME TAX PURPOSES, THE TRUST WILL BE
TREATED AS TWO SEPARATE ASSET POOLS (THE "MASTER
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REMIC" AND THE "SUBSIDIARY REMIC"), EACH OF WHICH
WILL BE TREATED AS A REAL ESTATE MORTGAGE INVESTMENT
CONDUIT ("REMIC"). THE CLASS A CERTIFICATES, THE
CLASS M-1 CERTIFICATES, THE CLASS B CERTIFICATES AND
THE CLASS B-3I CERTIFICATES WILL CONSTITUTE "REGULAR
INTERESTS" IN THE MASTER 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 MASTER
CERTIFICATES AND CLASS C SUBSIDIARY CERTIFICATES WILL
CONSTITUTE "RESIDUAL INTERESTS" IN THE MASTER REMIC
AND THE SUBSIDIARY REMIC, RESPECTIVELY. THE HOLDERS
OF THE OFFERED CERTIFICATES WILL BE REQUIRED TO
INCLUDE AN INCOME INTEREST ON SUCH CERTIFICATES
(INCLUDING ANY ORIGINAL ISSUE DISCOUNT) IN ACCORDANCE
WITH THE ACCRUAL METHOD OF ACCOUNTING. SEE "CERTAIN
FEDERAL
OPTIONAL
REPURCHASE: AT ITS OPTION EITHER THE SERVICER OR THE COMPANY MAY
REPURCHASE FROM THE TRUST ALL REMAINING CONTRACTS, AND
THEREBY EFFECT EARLY RETIREMENT OF THE OFFERED CERTIFICATES,
ON ANY REMITTANCE DATE WHEN THE POOL SCHEDULED PRINCIPAL
BALANCE IS LESS THAN 10% OF THE CUT-OFF DATE POOL PRINCIPAL
BALANCE.
CREDIT
ENHANCEMENT: CLASS A: 15.5% SUBORDINATION (CLASS M-1, B-1 AND
B-2) PLUS EXCESS SPREAD (CLASS B-3I).
CLASS M-1: 8.5% (CLASS B-1 AND B-2) PLUS EXCESS
SPREAD (CLASS B-3I).
CLASS B-1: 4.0% (CLASS B-2) PLUS EXCESS SPREAD
(CLASS B-3I).
CLASS B-2: LIMITED GUARANTEE PLUS EXCESS SPREAD.
THE CONTRACT POOL: ON THE CLOSING DATE, THE TRUST EXPECTS TO PURCHASE
(I) MANUFACTURED HOUSING CONTRACTS HAVING AN
AGGREGATE PRINCIPAL BALANCE OF APPROXIMATELY
$388,162,170 - AS OF THE CUT-OFF DATE (THE "INITIAL
CONTRACTS")AND (II) ADDITIONAL MANUFACTURED HOUSING
CONTRACTS (THE "ADDITIONAL CONTRACTS").
DISTRIBUTIONS: CERTIFICATEHOLDERS WILL BE ENTITLED TO RECEIVE ON
EACH REMITTANCE DATE COMMENCING IN JUNE 1998, 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 IN
THE PROSPECTUS SUPPLEMENT. THE AMOUNT AVAILABLE ON
EACH REMITTANCE DATE GENERALLY
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INCLUDES THE SUM OF (I) PAYMENTS ON THE CONTRACTS DUE AND
RECEIVED DURING THE RELATED DUE PERIOD, (II) PREPAYMENTS AND
OTHER UNSCHEDULED COLLECTIONS RECEIVED DURING THE RELATED
DUE PERIOD, AND (III) ALL COLLECTIONS OF PRINCIPAL ON THE
CONTRACTS RECEIVED DURING THE DUE PERIOD IN WHICH SUCH
REMITTANCE DATE OCCURS UP TO AND INCLUDING THE THIRD
BUSINESS DAY PRIOR TO SUCH REMITTANCE DATE (BUT IN NO EVENT
LATER THAN THE 25TH DAY OF THE MONTH PRIOR TO SUCH
REMITTANCE DATE), MINUS (IV) WITH RESPECT TO ALL REMITTANCE
DATES OTHER THAN THE REMITTANCE DATE IN JUNE 1998, ALL
COLLECTIONS IN RESPECT OF PRINCIPAL ON THE CONTRACTS
RECEIVED DURING THE RELATED DUE PERIOD UP TO AND INCLUDING
THE THIRD BUSINESS DAY PRIOR TO SUCH REMITTANCE DATE (BUT IN
NO EVENT LATER THAN THE 25TH 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.
THE "DUE PERIOD" WITH RESPECT TO ANY REMITTANCE DATE IS THE
PERIOD FROM AND INCLUDING THE 15TH DAY OF THE SECOND MONTH
PRECEDING SUCH REMITTANCE DATE, TO AND INCLUDING THE 14TH
DAY OF THE MONTH IMMEDIATELY PRECEDING SUCH REMITTANCE DATE.
INTEREST ON THE
CLASS A, CLASS M-1
AND CLASS B-1
CERTIFICATES: Interest will be distributable first to each Class
A Certificates concurrently, 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 the Settlement Date or from the most
recent Remittance Date on which interest has been
paid, to but excluding the following Remittance Date.
The Class A-1 Certificates will bear interest at a fixed
Pass-Through Rate calculated on an actual/360 basis. Each
other Class of Certificates will bear
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interest at a fixed Pass-Through Rate calculated on a 30/360
basis.
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 M-1 Principal
Balance 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 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. The Class B-1 Principal
Balance is the original Class B-1 Principal Balance less all
amounts previously distributed on account of principal of
the Class B-1 Certificates.
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. Any such amount so carried
forward will bear interest at the applicable Remittance
Rate, to the extent legally permissible.
PRINCIPAL ON THE
CLASS A, CLASS M-1
AND CLASS B-1
CERTIFICATES : The Class A Percentage will be distributed sequentially to
the Class A-1, A-2, A-3, A-4 A-5 and A-6 Certificateholders.
The Class A Percentage for any Remittance Date will equal a
fraction, expressed as a percentage, the numerator of which
is the Class A Principal Balance as of such Remittance Date,
and the denominator of which is the sum of: (i) the Class A
Principal Balance and (ii) if the Class M-1 Distribution
Test is satisfied on such Remittance Date, the Class M-1
Principal Balance, otherwise zero, and (iii) if the
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Class B Distribution Test is satisfied on such Remittance
Date, the Class B Principal Balance, otherwise zero, all as
of such Remittance Date.
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 of 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 June 2002; (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) 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%; and (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 23.25%.
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.
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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 June 2002; (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 12.75%; and (vii) the Class B Principal Balance
must not be less than $10,000,000.
CLASS B-2
INTEREST: Interest on the outstanding Class B-2 Principal Balance will
accrue from the Settlement Date, 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
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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 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
under the Limited Guarantee, 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" in the Prospectus Supplement.
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,
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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: 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 related Due Period. 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 B-3I
Certificateholders, 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.
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CONTRACT CHARACTERISTICS
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The information presented below relates to the Initial Contracts, which will
represent approximately 78% of the Contract Pool. 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
- -------------------------
Number of MHCs in pool: 10,085
Wgt. Avg. Contract Rate: 9.47%
Range of Rates: 4.51% - 18.00%
Wgt. Avg. Orig. Maturity: 305.6
Wgt. Avg. Rem. Maturity: 305.3
Avg. Rem Princ. Balance: $38,509
Wgt. Avg. LTV: 87.9%
New/Used: 78.25%/21.75%
Park/Private: 31.29%/68.71%
Single/Double: 32.05%/67.94%
Land/Home: 27.24%
Land in Lieu: 0.45%
Step Rate: 5.00%
Conventional: 95.00%
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GEOGRAPHIC DISTRIBUTION OF INITIAL CONTRACT OBLIGORS
AGGREGATE
PRINCIPAL
NUMBER OF BALANCE % OF INITIAL
CONTRACTS AS OUTSTANDING AS CUTOFF DATE POOL
STATE OF CUTOFF DATE OF CUTOFF DATE PRINCIPAL BALANCE
- ----- -------------- -------------- -----------------
AL 648 21,795,418 5.61
AR 223 6,720,237 1.73
AZ 210 8,741,413 2.25
BB 1 15,167 0.00
CA 186 7,460,496 1.92
CO 213 11,693,290 3.01
CT 7 231,552 0.06
DE 46 1,868,317 0.48
FL 660 27,606,526 7.12
GA 711 26,429,454 6.81
HI 1 59,776 0.02
IA 102 2,897,823 0.75
ID 48 2,373,650 0.61
IL 136 4,093,989 1.05
IN 229 9,029,099 2.32
KS 151 5,523,848 1.42
KY 270 8,428,026 2.17
LA 220 6,502,578 1.67
MA 5 195,422 0.05
MD 33 1,253,229 0.32
ME 47 1,867,453 0.48
MI 492 21,131,432 5.44
MN 175 5,130,097 1.32
MO 307 8,828,341 2.27
MS 271 8,670,414 2.23
MT 67 2,714,173 0.70
NC 1,024 43,735,410 11.27
ND 24 726,187 0.19
NE 36 1,188,329 0.31
NH 28 855,790 0.22
NJ 5 148,390 0.04
NM 252 11,219,601 2.89
NV 82 4,280,802 1.10
NY 97 2,813,338 0.72
OH 256 10,670,112 2.75
OK 299 11,087,498 2.85
OR 112 7,132,046 1.84
PA 117 4,665,649 1.20
SC 433 17,511,883 4.51
SD 46 1,543,567 0.40
TN 273 9,209,453 2.37
TX 863 31,678,988 8.17
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UT 39 2,116,349 0.54
VA 200 6,775,239 1.74
VT 13 531,479 0.14
WA 141 10,189,055 2.62
WI 149 4,445,876 1.14
WV 100 2,984,832 0.77
WY 37 1,591,081 0.41
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TOTAL 10,085 388,362,170 100.00
YEAR OF ORIGINATION OF INITIAL CONTRACTS
AGGREGATE
NUMBER OF PRINCIPAL
CONTRACTS BALANCE % OF INITIAL
YEAR OF AS OF OUTSTANDING AS CUTOFF DATE POOL
ORIGINATION(1) CUTOFF DATE OF CUTOFF DATE PRINCIPAL BALANCE
- -------------- ----------- -------------- -----------------
1984 1 18,016 *
1985 7 37,328 0.01
1986 4 30,776 0.01
1987 7 83,335 0.02
1988 3 31,363 0.01
1989 6 108,176 0.03
1990 7 144,920 0.04
1991 9 146,997 0.04
1992 5 100,124 0.03
1993 11 309,834 0.08
1994 48 1,456,234 0.37
1995 45 1,342,766 0.35
1996 73 2,558,462 0.66
1997 263 12,895,365 3.32
1998 9,596 369,098,472 95.03
------ ----------- ------
TOTAL 10,085 388,362,170 100.00
* INDICATES AN AMOUNT GREATER THAN ZERO BUT LESS THAN 0.005% OF THE AGGREGATE
PRINCIPAL BALANCE OF THE INITIAL CONTRACTS AS OF THE CUT-OFF DATE.
(1) THE INITIAL 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.
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DISTRIBUTION OF ORIGINAL INITIAL CONTRACTS AMOUNTS
AGGREGATE
NUMBER OF PRINCIPAL
CONTRACTS BALANCE % OF INITIAL
ORIGINAL AS OF OUTSTANDING AS CUTOFF DATE POOL
CONTRACT AMOUNT($) CUTOFF DATE OF CUTOFF DATE PRINCIPAL BALANCE
- --------------- ----------- -------------- -----------------
Less than 10,000 404 3,135,741 0.81
10,000 - 19,999 1,618 24,712,894 6.36
20,000 - 29,999 2,320 58,356,819 15.03
30,000 - 39,999 2,011 69,487,297 17.89
40,000 - 49,999 1,298 58,063,631 14.95
50,000 - 59,999 916 50,062,681 12.89
60,000 - 69,999 531 34,396,798 8.86
70,000 - 79,999 344 25,735,705 6.63
80,000 - 89,999 234 19,856,032 5.11
90,000 - 99,999 177 16,782,193 4.32
100,000 - 109,999 100 10,452,124 2.69
110,000 - 119,999 58 6,660,220 1.71
120,000 - 129,999 27 3,361,083 0.87
130,000 - 139,999 19 2,545,409 0.66
140,000 - 149,999 10 1,431,255 0.37
150,000 - 159,999 8 1,233,402 0.32
160,000 - 169,999 2 328,399 0.08
170,000 - 179,999 2 354,544 0.09
180,000+ 6 1,405,941 0.36
------ ----------- ------
Total 10,085 388,362,170 100.00
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<PAGE>
DISTRIBUTION OF ORIGINAL LOAN-TO-VALUE RATIOS OF INITIAL CONTRACTS
AGGREGATE
NUMBER OF PRINCIPAL
CONTRACTS BALANCE % OF INITIAL
LOAN-TO-VALUE AS OF OUTSTANDING AS CUTOFF DATE POOL
RATIO CUTOFF DATE OF CUTOFF DATE PRINCIPAL BALANCE
- ------------- ----------- -------------- -----------------
Less than 61.00 319 9,781,821 2.52
61.00 - 65.99 129 4,407,053 1.13
66.00 - 70.99 190 8,036,537 2.07
71.00 - 75.99 240 10,121,000 2.61
76.00 - 80.99 748 27,555,718 7.10
81.00 - 85.99 1,071 43,641,863 11.24
86.00 - 90.99 3,536 139,607,094 35.94
91.00 - 95.99 3,345 125,751,301 32.38
Greater than 96.00 507 19,459,783 5.01
------ ----------- ------
Total 10,085 388,362,170 100.00
INITIAL CONTRACT RATES
AGGREGATE
NUMBER OF PRINCIPAL
CONTRACTS BALANCE % OF INITIAL
AS OF OUTSTANDING AS CUTOFF DATE POOL
CONTRACT RATE CUTOFF DATE OF CUTOFF DATE PRINCIPAL BALANCE
- ------------- ----------- -------------- -----------------
Less than 5.01 5 283,634 0.07
5.01 - 6.00 27 1,759,659 0.45
6.01 - 7.00 605 47,023,688 12.11
7.01 - 8.00 1,172 66,828,289 17.21
8.01 - 9.00 1,384 69,788,803 17.96
9.01 - 10.00 1,707 68,372,219 17.61
10.01 - 11.00 1,790 58,926,916 15.17
11.01 - 12.00 1,849 46,320,488 11.93
12.01 - 13.00 974 20,622,831 5.31
13.01 - 14.00 407 6,818,591 1.76
14.01 - 15.00 17 184,083 0.05
15.01 - 16.00 121 1,160,792 0.30
16.01 - 17.00 26 267,008 0.07
Greater than 17.00 1 5,168 0.00
------ ----------- ------
Total 10,085 388,362,170 100.00
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<PAGE>
REMAINING MONTHS TO MATURITY OF INITIAL CONTRACTS
AGGREGATE
NUMBER OF PRINCIPAL
CONTRACTS BALANCE % OF INITIAL
REMAINING MOS. AS OF OUTSTANDING AS CUTOFF DATE POOL
TO MATURITY CUTOFF DATE OF CUTOFF DATE PRINCIPAL BALANCE
- -------------- ----------- -------------- -----------------
LESS THAN 31
31 - 60 13 131,019 0.03
226 2,046,708 0.53
61 - 90 306 4,134,720 1.06
91 - 120 692 11,151,354 2.87
121 - 150 281 5,813,363 1.50
151 - 180 1,475 34,614,380 8.91
181 - 210 71 2,532,094 0.65
211 - 240 1,802 55,867,286 14.39
241 - 270 10 414,076 0.11
271 - 300 856 29,870,529 7.69
301 - 330 6 270,621 0.07
331 - 360 4,347 241,516,020 62.19
------ ----------- ------
TOTAL 10,085 388,362,170 100.00
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<PAGE>
MHP PREPAYMENT SENSITIVITIES(1)
75% MHP 100% MHP 125% MHP 150% MHP
------------ ------------ ------------ ------------
WAL/Maturity WAL/Maturity WAL/Maturity WAL/Maturity
To Call
A-1 0.57/05/99 0.49/03/99 0.43/02/99 0.39/01/99
A-2 1.55/06/00 1.31/02/00 1.14/11/99 1.01/09/99
A-3 3.13/08/02 2.62/11/01 2.26/05/01 2.00/01/01
A-4 4.80/09/03 4.00/11/02 3.43/03/02 3.01/09/01
A-5 7.92/04/09 6.65/08/07 5.71/05/06 5.00/05/05
A-6 18.04/03/22 16.01/02/20 14.23/01/18 12.75/04/16
M-1 15.26/03/22 13.42/02/20 11.90/01/18 10.63/04/16
B-1 10.56/06/13 8.99/07/11 7.80/12/09 6.86/07/08
B-2 20.84/03/22 18.73/02/20 16.79/01/18 15.17/04/16
To Maturity
A-1 0.57/05/99 0.49/03/99 0.43/02/99 0.39/01/99
A-2 1.55/06/00 1.31/02/00 1.14/11/99 1.01/09/99
A-3 3.13/08/02 2.62/11/01 2.26/05/01 2.00/01/01
A-4 4.80/09/03 4.00/11/02 3.43/03/02 3.01/09/01
A-5 7.92/04/09 6.65/08/07 5.71/05/06 5.00/05/05
A-6 18.51/02/27 16.58/06/26 14.87/06/25 13.38/01/24
M-1 15.59/02/27 13.82/06/26 12.34/06/25 11.07/01/24
B-2 23.62/08/28 22.36/08/28 21.18/08/28 20.08/08/28
175% MHP 200% MHP 250% MHP 300% MHP
------------ ------------ ------------ ------------
WAL/Maturity WAL/Maturity WAL/Maturity WAL/Maturity
To Call
A-1 0.35/12/98 0.32/11/98 0.28/11/98 0.26/10/98
A-2 0.91/07/99 0.83/06/99 0.71/04/99 0.62/03/99
A-3 1.80/10/00 1.64/07/00 1.40/03/00 1.22/12/99
A-4 2.69/05/01 2.44/02/01 2.07/08/00 1.81/05/00
A-5 4.38/07/04 3.88/10/03 3.19/08/02 2.75/12/01
A-6 11.40/08/14 10.25/03/13 8.39/11/10 7.00/02/09
M-1 9.84/08/14 9.23/03/13 8.25/11/10 7.51/02/09
B-1 6.46/10/07 6.20/04/07 5.81/05/06 5.53/10/05
B-2 13.86/08/14 12.78/03/13 11.04/11/10 9.74/02/09
To Maturity
A-1 0.35/12/98 0.32/11/98 0.28/11/98 0.26/10/98
A-2 0.91/07/99 0.83/06/99 0.71/04/99 0.62/03/99
A-3 1.80/10/00 1.64/07/00 1.40/03/00 1.22/12/99
A-4 2.69/05/01 2.44/02/01 2.07/08/00 1.81/05/00
A-5 4.38/07/04 3.88/10/03 3.19/08/02 2.75/12/01
A-6 12.03/08/22 10.84/01/21 8.91/01/18 7.45/08/15
M-1 10.30/08/22 9.71/01/21 8.75/01/18 8.03/08/15
B-2 19.07/08/28 18.13/08/28 16.27/08/28 14.56/08/28
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(1) The following are the assumed characteristics of Subsequent Contracts as of
the Cut-off Date:
AGGREGATE WGT. AVG. WGT. AVG.
REMAINING PRINCIPAL ORIGINAL REMAINING WGT. AVG.
MONTHS TO BALANCE TERM TERM CONTRACT
MATURITY OUTSTANDING (MONTHS) (MONTHS) RATE
- -------- ----------- -------- -------- ---------
0-120 $ 5,020,110.17 102 102 11.59%
121-180 $ 11,621,279.92 174 174 11.02%
181-240 $ 16,787,371.59 237 237 10.36%
241-300 $ 8,705,553.28 299 299 10.36%
301-360 $ 69,593,515.21 360 360 8.71%
--------------- --- --- -----
TOTAL $111,727,830.17 306 306 9.46%
===============
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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
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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.
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