5
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 1998
Commission file number 0-21118
PRIME RECEIVABLES CORPORATION
(Originator of Prime Credit Card Master Trust)
(Exact name of registrant as specified in its charter)
Delaware 31-1359594
(State of Incorporation) (I.R.S. Employer Identification No.)
9111 Duke Blvd., Mason, Ohio 45040
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 513-573-2037
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
7.05% Class A-1 Asset Backed Certificates, Series 1992-1
7.45% Class A-2 Asset Backed Certificates, Series 1992-2
7.55% Class B-1 Asset Backed Certificates, Series 1992-1
7.95% Class B-2 Asset Backed Certificates, Series 1992-2
6.75% Class A Asset Backed Certificates, Series 1995-1
6.90% Class B Asset Backed Certificates, Series 1995-1
6.70% Class A Asset Backed Certificates, Series 1996-1
6.85% Class B Asset Backed Certificates, Series 1996-1
The registrant has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and has been subject to such filing
requirements for the past 90 days.
Disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not required.
PART I
Item 2. Properties
Exhibit 99.1 to this Report sets forth certain
information relating to the fiscal year ended January 31, 1998
("Fiscal Year 1997") of Prime Credit Card Master Trust (the
"Trust"). Such information, which was derived from monthly
settlement statements relating to such period which were
delivered to The Chase Manhattan Bank, successor in interest to
Chemical Bank ("Chase Bank"), as Trustee, pursuant to the Amended
and Restated Pooling and Servicing Agreement, dated as of
December 15, 1992, among Prime Receivables Corporation (the
"Company"), Federated Department Stores, Inc. ("Federated"), as
Servicer (which has been succeeded in such capacity by FDS
National Bank ("FDS")), and Chase Bank, as Trustee, as
supplemented and amended (the "Pooling and Servicing Agreement"),
is incorporated herein by this reference.
Item 3. Legal Proceedings
Federated and its subsidiaries, including FDS, are
involved in various proceedings that are incidental to the normal
course of their businesses. The Company does not expect that any
of such proceedings will have a material adverse effect on the
credit card receivables held by the Trust.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
As of March 31, 1998, the following certificates
representing undivided interests in the Trust had been issued and
are outstanding: (i) $450.0 million aggregate principal amount
of 7.45% Class A-2 Asset Backed Certificates, Series 1992-2 (the
"Class A-2 Certificates"), (ii) $40.5 million aggregate principal
amount of 7.95% Class B-2 Asset Backed Certificates, Series 1992-
2 (the "Class B-2 Certificates"), (iii) $55.0 million aggregate
principal amount of 8.45% Class C-2 Asset Backed Certificates,
Series 1992-2 (the "Class C-2 Certificates"), (iv) Class A
Variable Funding Certificates, Series 1992-3 (the "Class A
Variable Funding Certificates"), (v) Class B Variable Funding
Certificates, Series 1992-3 (the "Class B Variable Funding
Certificates"), (vi) $546.0 million aggregate principal amount of
6.75% Class A Asset Backed Certificates, Series 1995-1 (the
"Class A-1995 Certificates"), (vii) $52.0 million aggregate
principal amount of 6.90% Class B Asset Backed Certificates,
Series 1995-1 (the "Class B-1995 Certificates"), (viii) $52.0
million aggregate principal amount of 9.00% Class C Asset Backed
Certificates, Series 1995-1 (the "Class C-1995 Certificates"),
(ix) $218.0 million aggregate principal amount of 6.70% Class A
Asset Backed Certificates, Series 1996-1 (the "Class A-1996
Certificates"), (x) $20.8 million aggregate principal amount of
6.85% Class B Asset Backed Certificates, Series 1996-1 (the
"Class B-1996 Certificates"), (xi) $20.8 million aggregate
principal amount of 9.0% Class C Asset Backed Certificates,
Series 1996-1 (the "Class C-1996 Certificates"), and (xii) an
exchangeable certificate representing the remaining undivided
interests in the Trust (the "Transferor Certificate"). The
information regarding the record ownership of the foregoing
certificates set forth in Item 12 of this Report is incorporated
herein by this reference.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
As of March 31, 1998, the Class A-2 Certificates, the
Class B-2 Certificates, the Class A-1995 Certificates, the Class
B-1995 Certificates, the Class A-1996 Certificates and the Class
B-1996 Certificates (collectively, the "Registered Certificates")
were held of record by Cede & Co., as nominee of The Depository
Trust Company. To the Company's knowledge, based solely on the
fact that the Company has not received notice of any filings
having been made with the Securities and Exchange Commission
reporting the acquisition of more than 5% of any class or series
of the Registered Certificates, no person beneficially owned more
than 5% of any class or series of the Registered Certificates.
Of the remaining certificates representing undivided interests in
the Trust that were outstanding as of such date, (i) Seven Hills
Funding Corporation ("Seven Hills"), an indirect wholly owned
subsidiary of Federated, owned beneficially and of record 100% of
the Class A Variable Funding Certificates, and (ii) the Company
owned beneficially and of record 100% of the Class C-2
Certificates, the Class B Variable Funding Certificates, the
Class C-1995 Certificates, the Class C-1996 Certificates and the
Transferor Certificate. The Class A Variable Funding
Certificates have been pledged by Seven Hills to Chase Bank, as
collateral agent, to secure certain commercial paper notes to be
issued by Seven Hills from time to time and certain related
obligations of Seven Hills. The principal business address of
each of the Company and Seven Hills is 9111 Duke Boulevard.,
Mason, Ohio 45040.
Item 13. Certain Relationships and Related Transactions
Except for the transactions contemplated by the Pooling
and Servicing Agreement, the Company is not aware of any
transactions or series of similar transactions during Fiscal Year
1997, or any currently proposed transaction or series of similar
transactions, in which the amount involved exceeded or is
proposed to exceed $60,000, to which the Trust was a party or is
proposed to be a party, and in which any person known to the
Company to own more than 5% of any class of certificates
representing undivided interests in the Trust had or has a direct
or indirect material interest.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K
a. Exhibits
99.1 Annual Settlement Statement for the Trust for
the period from February 2, 1997 through January 31, 1998.
99.2 Annual Report of Independent Public
Accountants (Part A) regarding internal controls.
99.3 Annual Report of Independent Public
Accountants (Part B) regarding Monthly Settlement Statements for
the period from February 2, 1997 through January 31, 1998.
b. Reports on Form 8-K.
Each month the Company files a Current Report on
Form 8-K which includes, as an exhibit, a copy of the settlement
statement relating to the preceding monthly period required under
the Pooling and Servicing Agreement to be delivered to the
Trustee.
SIGNATURES
Pursuant to the requirements of Section 13 of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be executed on its behalf by the undersigned,
thereunto duly authorized.
PRIME RECEIVABLES CORPORATION
(Originator of Prime Credit Card Master Trust)
By: /s/ Susan P. Storer
Susan P. Storer, President
Dated: May 1, 1998
Pursuant to the requirements of Section 13 of the
Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the Registrant and in
the capacities indicated on May 1, 1998.
Signature Title
/s/ Karen M. Hoguet Chairman of the Board
Karen M. Hoguet and Director
(principal executive officer)
/s/ Susan P. Storer President and Director
Susan P. Storer (principal financial and
accounting officer)
/s/ John R. Sims Director
John R. Sims
Prime Credit Card Master Trust 28-Apr-98
02:21 PM
Settlement Statement
- --------------
Fiscal Period: Annual 1997
02-Feb-97
31-Jan-98
(i) Collections 4,987,865,721
Finance Charge 554,535,032
Principal 4,433,330,689
(ii) Investor Percentage - Principal Collection 31-Jan-98
Series 1992-1 0.00%
A 0.00%
B 0.00%
C 0.00%
Series 1992-2 24.37%
A 20.10%
B 1.81%
C 2.46%
Series 1992-3 20.30%
A 16.75%
B 3.55%
Series 1995-1 29.04%
A 24.39%
B 2.32%
C 2.32%
Series 1996-1 11.60%
A 9.74%
B 0.93%
C 0.93%
(iii) Investor Percentage - Finance Charge Collections, Receivables
in Defaulted Accounts 31-Jan-98
Series 1992-1 0.00%
A 0.00%
B 0.00%
C 0.00%
Series 1992-2 24.37%
A 20.10%
B 1.81%
C 2.46%
Series 1992-3 20.30%
A 16.75%
B 3.55%
Series 1995-1 29.04%
A 24.39%
B 2.32%
C 2.32%
Series 1996-1 11.60%
A 9.74%
B 0.93%
C 0.93%
(iv) Distribution Amount per $1,000 FY 1997
Series 1992-1 1,060.972
A 1,064.625
B 1,075.500
C 1,035.985
Series 1992-2 72.080
A 74.500
B 79.500
C 35.985
Series 1992-3 825.43
A 1,000.52
B 0.000
Series 1995-1 67.630
A 67.500
B 69.000
C 0.000
Series 1996-1 67.131
A 67.000
B 68.500
C 0.000
Total $'s Distributed
Series 1992-1 576,125,860.09
Series 1992-2 38,130,172.59
Series 1992-3 6,918,969,882.22
Series 1995-1 40,443,000.00
Series 1996-1 16,030,800.00
(v) Allocation to Principal per $1,000FY 1997
Series 1992-1 1,000.000
A 1,000.000
B 1,000.000
C 1,000.000
Series 1992-2 0.000
A 0.000
B 0.000
C 0.000
Series 1992-3 825.00
A 1,000.00
B 0.000
Series 1995-1 0.000
A 0.000
B 0.000
C 0.000
Series 1996-1 0.000
A 0.000
B 0.000
C 0.000
Total $'s Distributed 7,460,852,560.22
Series 1992-1 545,500,000.00
Series 1992-2 0.00
Series 1992-3 6,915,352,560.22
Series 1995-1 0.00
Series 1996-1 0.00
(vi) Allocation to Interest per $1,000 FY 1997
Series 1992-1 60.972
A 64.625
B 75.500
C 35.985
Series 1992-2 72.080
A 74.500
B 79.500
C 35.985
Series 1992-3 0.432
A 0.523
B 0.000
Series 1995-1 67.630
A 67.500
B 69.000
C 0.000
Series 1996-1 67.131
A 67.000
B 68.500
C 0.000
Total $'s Distributed
Series 1992-1 30,625,860.09
Series 1992-2 38,130,172.59
Series 1992-3 3,617,322.00
Series 1995-1 40,443,000.00
Series 1996-1 16,030,800.00
(vii) Investor Default Amount
Series 1992-1 41,348,390.04
A 31,430,225.23
B 4,103,384.64
C 5,814,780.17
Series 1992-2 57,672,046.93
A 47,575,474.09
B 4,281,792.67
C 5,814,780.17
Series 1992-3 7,664,192.11
A 6,322,958.49
B 1,341,233.62
Series 1995-1 68,720,122.59
A 57,724,902.98
B 5,497,609.81
C 5,497,609.81
Series 1996-1 26,172,014.77
A 21,978,040.14
B 2,096,987.32
C 2,096,987.32
(viii) Investor Charge Offs
Charge Offs Reimbursements
Series 1992-1 0.00 0.00
A 0.00 0.00
B 0.00 0.00
C 0.00 0.00
Series 1992-2 0.00 0.00
A 0.00 0.00
B 0.00 0.00
C 0.00 0.00
Series 1992-3 0.00 0.00
A 0.00 0.00
B 0.00 0.00
Series 1995-1 0.00 0.00
A 0.00 0.00
B 0.00 0.00
C 0.00 0.00
Series 1996-1 0.00 0.00
A 0.00 0.00
B 0.00 0.00
C 0.00 0.00
(ix) Servicing Fee
Series 1992-1 8,660,000.02
A 7,143,904.69
B 642,951.42
C 873,143.91
Series 1992-2 10,910,000.04
A 9,000,000.03
B 810,000.00
C 1,100,000.00
Series 1992-3 1,331,171.30
A 1,098,216.32
B 232,954.98
Series 1995-1 12,999,999.96
A 10,919,999.97
B 1,040,000.00
C 1,040,000.00
Series 1996-1 5,192,000.04
A 4,360,000.03
B 416,000.00
C 416,000.00
(x) Deficit Controlled Amortization Amount
Series 1992-1 0.00
A 0.00
B 0.00
C 0.00
Series 1992-2 0.00
A 0.00
B 0.00
C 0.00
Series 1992-3 0.00
A 0.00
B 0.00
Series 1995-1 0.00
A 0.00
B 0.00
C 0.00
Series 1996-1 0.00
A 0.00
B 0.00
C 0.00
(xi) Receivables in Trust 31-Jan-98 2,314,090,569
Principal Receivables in Trust 2,232,171,762
(xii) Invested Amount 31-Jan-98
Series 1992-1 0.00
A 0.00
B 0.00
C 0.00
Series 1992-2 545,500,000.00
A 450,000,000.00
B 40,500,000.00
C 55,000,000.00
Series 1992-3 454,329,261.36
A 374,821,640.62
B 79,507,620.74
Series 1995-1 650,000,000.00
A 546,000,000.00
B 52,000,000.00
C 52,000,000.00
Series 1996-1 259,600,000.00
A 218,000,000.00
B 20,800,000.00
C 20,800,000.00
(xiii) Enhancement NA
(xiv) Pool Factor
Series 1992-1 0.0000000
A 0.0000000
B 0.0000000
C 0.0000000
Series 1992-2 1.0000000
A 1.0000000
B 1.0000000
C 1.0000000
Series 1995-1 1.0000000
A 1.0000000
B 1.0000000
C 1.0000000
Series 1996-1 1.0000000
A 1.0000000
B 1.0000000
C 1.0000000
(xv) Yield Factor 10.05%
Finance Charge Receivables Factor 3.54%
(xvi) Payout Event
Series 1992-1 NO
Series 1992-2 NO
Series 1992-3 NO
Series 1995-1 NO
Series 1996-1 NO
(xvii) Other
Delinquency
Current 79.7% $1,872,804,083
30 days 12.5% 293,178,579
60 days 2.8% 66,312,920
90 days 1.5% 34,124,281
120 days 1.2% 27,114,055
150 days 1.1% 24,964,230
180 days+ 1.4% 32,395,034
Total 100.000% $2,350,893,181
Balance in Pre-Funding Account 0.00
EXHIBIT 99.2
Independent Auditor's Report
The Board of Directors
Federated Department Stores, Inc.
The Board of Directors
Prime Receivables Corporation:
We have examined management's assertion, included in the
accompanying Management Report on the Effectiveness of the
Internal Accounting Control Structure over the Servicing of
Accounts Receivable, that as of August 2, 1997, Federated
Department Stores, Inc. and subsidiaries ("Federated"), as
Servicer under the Amended and Restated Pooling and
Servicing Agreement dated December 15, 1992, between Prime
Receivables Corporation ("Prime"), as Transferor, Federated,
as Servicer, and The Chase Manhattan Bank, as Trustee, (the
"Pooling and Servicing Agreement") maintained an effective
internal accounting control structure over the servicing of
accounts receivable of Prime.
Our examination was made in accordance with standards
established by the American Institute of Certified Public
Accountants and, accordingly, included obtaining an
understanding of the internal accounting control structure
over the servicing of accounts receivable, testing and
evaluating the design and operating effectiveness of the
internal control structure, and such other procedures as we
considered necessary in the circumstances. We believe that
our examination provides a reasonable basis for our opinion.
Because of inherent limitations in any internal accounting
control structure, errors or irregularities may occur and
may not be detected. Also, projections of any evaluation of
the internal accounting control structure over the servicing
of accounts receivable to future periods are subject to the
risk that the internal accounting control structure may
become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may
deteriorate.
In our opinion, management's assertion that Federated
maintained an effective internal accounting control
structure over the servicing of accounts receivable of Prime
as of August 2, 1997, is fairly stated, in all material
respects, based upon criteria stated in the Pooling and
Servicing Agreement.
This report is intended solely for the information and use
of the boards of directors and managements of Federated and
Prime, Investor Certificateholders, The Chase Manhattan
Bank, as Trustee, Moody's Investor Services, Inc. and
Standard and Poor's Corporation, as the Rating Agencies, and
should not be used for any other purpose.
KPMG Peat Marwick LLP
November 14, 1997
Management Report on Effectiveness of Internal
Accounting Control Structure
Over the Servicing of Accounts Receivable
Management of Federated Department Stores, Inc., and
subsidiaries ("Federated") is responsible for establishing
and maintaining an effective internal accounting control
structure over the servicing of accounts receivable of Prime
Receivables Corporation ("Prime"), a wholly-owned subsidiary
of Federated. The structure contains monitoring mechanisms,
and actions are taken to correct deficiencies identified.
There are inherent limitations in the effectiveness of any
internal accounting control structure, including the
possibility of human error and the circumvention or
overriding of controls. Accordingly, even an effective
internal accounting control structure can provide only
reasonable assurance with respect to the servicing of
accounts receivable and the preparation of reports relating
to the servicing of accounts receivable as required by the
Amended and Restated Pooling and Servicing Agreement dated
December 15, 1992 between Prime, as Transferor, Federated,
as Servicer, and The Chase Manhanttan Bank, as Trustee (the
"Pooling and Servicing Agreement"). Further, because of
changes in conditions, the effectiveness of an internal
accounting control structure may vary over time.
Management assessed Federated's internal accounting control
structure over the servicing of accounts receivable of Prime
as of August 2, 1997. This assessment was based on criteria
for effective internal accounting control over the servicing
of accounts receivable of Prime described in the Pooling and
Servicing Agreement. Based on this assessment, management
believes that, as of August 2, 1997, Federated maintained an
effective internal accounting control structure over the
servicing of accounts receivable of Prime.
November 14, 1997
/s/ James J. Amann
James J. Amann, Chairman & CEO
/s/ Jack Brown
Jack Brown, Senior Vice President
EXHIBIT 99.3
The Board of Directors
Prime Receivables Corporation:
We have applied certain agreed-upon procedures, as discussed
below, to the accounting records of Prime Receivables Corporation
("Prime"), a wholly-owned special-purpose finance subsidiary of
Federated Department Stores, Inc. ("Federated"), relating to the
servicing procedures performed by FDS National Bank, as Servicer,
under the Amended and Restated Pooling and Servicing Agreement
(the "Agreement") dated December 15, 1992 between Prime, as
Transferor, Federated and The Chase Manhattan Bank, successor to
Chemical Bank, as Trustee, on behalf of the Certificateholders of
Prime Credit Card Master Trust and under the Assumption Agreement
dated September 15, 1993 between Prime, Federated, FDS National
Bank and The Chase Manhattan Bank, successor to Chemical Bank.
This agreed-upon procedures engagement was performed in
accordance with standards established by the American Institute
of Certified Public Accountants. The sufficiency of these
procedures is solely the responsibility of the specified users of
the report. Consequently, we make no representations regarding
the sufficiency of the procedures described below either for the
purpose for which this report has been requested or for any other
purpose. Our procedures and findings are as follows:
In accordance with section 3.06(b) of the
Agreement, we recalculated each amount set forth in
items (i) through (xvi) of each monthly certificate
prepared by the Servicer, pursuant to section
3.04(c) of the Agreement, during the period from
February 1, 1997 to January 31, 1998, (the
"Certificates") from information in the
Transferor's computer generated Daily Cash
Allocation Reports, the Agreement, the Series 1992-
1 Supplement to the Agreement dated December 15,
1992, the Series 1992-2 Supplement to the Agreement
dated December 15, 1992, the Series 1992-3
Supplement to the Agreement dated December 31,
1992, the Series 1995-1 Supplement to the Agreement
dated July 27, 1995, or the Series 1996-1
Supplement to the Agreement dated May 14, 1996, as
appropriate. We found such recalculated amounts to
be in agreement with the amounts set forth in items
(i) through (xvi) of the Certificates, as amended.
We were not engaged to, and did not, perform an examination, the
objective of which would be the expression of an opinion on
management's assertion. Accordingly, we do not express such an
opinion. Had we performed additional procedures, other matters
might have come to our attention that would have been reported to
you.
This report is intended solely for your information and is not to
be referred to or distributed for any purpose to anyone other
than The Chase Manhattan Bank, as Trustee, Moody's Investor
Services, Inc. and Standard & Poor's Corporation, as the Rating
Agencies, Investor Certificateholders or the management of Prime.
KPMG Peat Marwick LLP
April 27, 1998
