<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 21, 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 21, 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: August 25, 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 21, 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 21, 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 0.29 Fixed Actual/360 04/99 A-1+/F-1+
Class A-2 175,000,000 1.00 Floating Actual/360 02/00 AAA/AAA
Class A-3 170,000,000 2.01 Fixed 30/360 04/01 AAA/AAA
Class A-4 96,000,000 3.00 Fixed 30/360 02/02 AAA/AAA
Class A-5 117,000,000 4.16 Fixed 30/360 11/03 AAA/AAA
Class A-6 36,000,000 5.68 Fixed 30/360 12/04 AA/AA
Class A-7 32,000,000 6.42 Fixed 30/360 02/05 A/A
Class B-1 16,000,000 6.43 Fixed 30/360 02/05 BBB/BBB
Class B-2 36,000,000 6.43 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 6.95 Fixed 30/360 05/06 A/A
Class B-1 16,000,000 8.16 Fixed 30/360 05/07 BBB/BBB
Class B-2 36,000,000 10.24 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.), and Lehman Brothers
(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 August 24, 1998
EXP. SETTLEMENT: September 10, 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, 18% CPR
Recreational Vehicles
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 (ClassA-6, A-7, B-1,
and B-2)
Class A-6: 10.50% subordination (ClassA-7, B-1 and B-2)
Class A-7: 6.50% subordination (Class B-1 and B-2)
Class B-1: 4.50% subordination (ClassB-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
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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>
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
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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>
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
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Recipients must read the information contained in the attached statement. Do not
use or rely on this information if you have not received and reviewed the
statement. If you have not received the statement, call your Merrill Lynch
account executive for another copy
<PAGE>
PRINCIPAL: 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 Priority Principal Distribution Amount, if any,
the Third Priority Principal Distribution Amount, if any,
and the Fourth Priority Principal Distribution Amount, 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
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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>
(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
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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>
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
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Recipients must read the information contained in the attached statement. Do not
use or rely on this information if you have not received and reviewed the
statement. If you have not received the statement, call your Merrill Lynch
account executive for another copy
<PAGE>
AVERAGE 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 0.31 / 8 0.31 / 7 0.29 / 7 0.27 / 6 0.25 / 6
Class A-2 1.16 / 20 1.08 / 19 1.00 / 17 0.94 / 16 0.88 / 15
Class A-3 2.30 / 35 2.14 / 33 2.01 / 31 1.88 / 29 1.76 / 27
Class A-4 3.40 / 46 3.19 / 44 3.00 / 41 2.82 / 39 2.66 / 37
Class A-5 4.68 / 71 4.41 / 66 4.16 / 62 3.93 / 58 3.71 / 54
Class A-6 6.50 / 86 6.06 / 80 5.68 / 75 5.32 / 71 5.01 / 66
Class A-7 7.26 / 87 6.84 / 82 6.42 / 77 6.01 / 72 5.67 / 68
Class B-1 7.26 / 87 6.85 / 82 6.43 / 77 6.01 / 72 5.68 / 68
Class B-2 7.26 / 87 6.85 / 82 6.43 / 77 6.01 / 72 5.68 / 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 7.82 / 103 7.38 / 97 6.95 / 92 6.55 / 87 6.17 / 83
Class B-1 9.00 / 113 8.58 / 109 8.16 / 104 7.75 / 99 7.36 / 94
Class B-2 10.81 / 155 10.54 / 155 10.24 / 155 9.94 / 155 9.62 / 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.
% 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 24,698 100.00 498,904,486.00 100.00 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 CONTRACTS AS OF NUMBER OF PRINCIPAL BALANCE AS OF CUTOFF DATE POOL
to 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
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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
