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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 8, 1998
ARCADIA RECEIVABLES FINANCE CORP.
as originator of
ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1998-C
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(Exact name of registrant as specified in its charter)
Delaware 333-48141 41-1743653
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(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification No.)
7825 Washington Avenue South, Suite 410, Minneapolis, Minnesota 55439-2435
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(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 942-9880
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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 ACCOUNTANTS.
Not applicable.
Item 5. OTHER EVENTS.
On September 8, 1998, the Registrant made available to prospective
investors a term sheet (the "Term Sheet") setting forth a
description of the initial collateral pool and the proposed
structure for the issuance of $600,000,000 aggregate principal
amount of asset-backed notes by Arcadia Automobile Receivables
Trust, 1998-C. The Term Sheet is attached hereto as Exhibit 99.
Item 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not applicable.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
The following are filed herewith. The exhibit numbers correspond
with Item 601(b) of Regulation S-K.
Exhibit No. Description
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99 Term Sheet dated September 8, 1998 of Arcadia
Automobile Receivables Trust, 1998-C
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: September 10, 1998 ARCADIA RECEIVABLES FINANCE CORP.,
as originator of Arcadia Automobile
Receivables Trust, 1998-C
By: /s/ Brian S. Anderson
------------------------------------
Brian S. Anderson
Senior Vice President
<PAGE>
SUBJECT TO REVISION
TERM SHEET DATED SEPTEMBER 8, 1998
$600,000,000 AUTOMOBILE RECEIVABLES-BACKED NOTES
ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1998-C
ISSUER
ARCADIA RECEIVABLES FINANCE CORPORATION
SELLER
ARCADIA FINANCIAL LTD.
SERVICER
Attached is a preliminary term sheet (the "TERM SHEET") describing the
structure, collateral pool and certain aspects of the Arcadia Automobile
Receivables Trust, 1998-C (the "TRUST"). The Term Sheet has been prepared by the
Seller for informational purposes only and is subject to modification or change.
The information and assumptions contained in the Term Sheet are preliminary and
will be superseded in their entirety by a prospectus supplement (the "PROSPECTUS
SUPPLEMENT") and by any other additional information subsequently filed with the
Securities and Exchange Commission (the "COMMISSION") or incorporated by
reference in the relevant registration statement (the "REGISTRATION STATEMENT").
In addition, the attached Term Sheet supersedes any prior or similar term sheet.
None of the Underwriters named below and none of their respective affiliates
makes any representation as to the accuracy or completeness of any of the
information set forth in the attached Term Sheet. This cover sheet is not a part
of the Term Sheet.
THE REGISTRATION STATEMENT (INCLUDING A BASE PROSPECTUS (THE "PROSPECTUS"))
RELATING TO THE TRUST HAS BEEN FILED WITH THE COMMISSION AND HAS BEEN DECLARED
EFFECTIVE. THE PROSPECTUS SUPPLEMENT RELATING TO THE SECURITIES OFFERED BY THE
TRUST WILL BE FILED AFTER THE SECURITIES HAVE BEEN PRICED AND ALL OF THE TERMS
AND INFORMATION ARE FINALIZED. THIS COMMUNICATION IS NOT AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THE SECURITIES OF
THE TRUST IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL BEFORE THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE. INTERESTED PERSONS ARE REFERRED TO THE PROSPECTUS AND PROSPECTUS
SUPPLEMENT. ANY INVESTMENT DECISION SHOULD BE BASED UPON THE INFORMATION IN THE
PROSPECTUS AND PROSPECTUS SUPPLEMENT AS OF THEIR PUBLICATION DATE. SALES OF THE
SECURITIES TO BE OFFERED BY THE TRUST MAY NOT BE CONSUMMATED UNLESS THE
PURCHASER HAS RECEIVED BOTH THE PROSPECTUS AND THE PROSPECTUS SUPPLEMENT. THE
SECURITIES TO BE OFFERED BY THE TRUST UNDER THE PROSPECTUS SUPPLEMENT HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES
COMMISSION; ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
UNDERWRITERS OF THE NOTES
J.P. Morgan & Co.
BancAmerica Securities, Inc.
Chase Securities Inc.
Credit Suisse First Boston
<PAGE>
$600,000,000 AUTOMOBILE RECEIVABLES-BACKED NOTES
ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1998-C
SUBJECT TO REVISION
TERM SHEET
<TABLE>
<CAPTION>
<S> <C>
Issuer ............ Arcadia Automobile Receivables Trust, 1998-C (the "Trust" or
the "Issuer"), a Delaware business trust.
Seller ............ Arcadia Receivables Finance Corp. (the "Seller"), a wholly
owned subsidiary of Arcadia Financial.
Servicer .......... Arcadia Financial Ltd. ("Arcadia Financial" or the
"Servicer" or, in its capacity as custodian, the
"Custodian").
Indenture Trustee . Norwest Bank Minnesota, National Association, as Indenture
Trustee and Indenture Collateral Agent (the "Indenture
Trustee") under the Indenture, dated as of September 1, 1998
(the "Indenture"), between the Trust and Norwest Bank
Minnesota, National Association.
Owner Trustee ..... Wilmington Trust Company, as Owner Trustee (the "Owner
Trustee") under the Trust Agreement, dated as of September
1, 1998 (the "Trust Agreement"), among the Seller, Financial
Security Assurance Inc. ("Financial Security") and
Wilmington Trust Company.
Backup Servicer ... Norwest Bank Minnesota, National Association (the "Backup
Servicer").
Administrator ..... Wilmington Trust Company (the "Administrator").
The Notes ......... $66,000,000 Class A-1 Automobile Receivables-Backed Notes
(the "Class A-1 Notes") $194,000,000 Class A-2 Automobile
Receivables-Backed Notes (the "Class A-2 Notes")
$340,000,000 Class A-3 Automobile Receivables-Backed Notes
(the "Class A-3 Notes" and, together with the Class A-1
Notes and the Class A-2 Notes, the "Notes")
The Receivables ... The Receivables will consist of retail installment sales
contracts and promissory notes purchased from motor vehicle
dealers ("Dealers") by Arcadia Financial in the ordinary
course of business and secured by new and used automobiles
and light trucks (the "Financed Vehicles").
On the Closing Date, the Trust will purchase Receivables
(the "Initial Receivables") that are expected to have an
aggregate principal balance of approximately $420,000,000 on
or about September 9, 1998 (the "Initial Cutoff Date"), from
the Seller pursuant to a Sale and Servicing Agreement, dated
as of September 1, 1998 (the "Sale and Servicing
Agreement"), among the Trust, the Seller, Arcadia Financial,
in its individual capacity and as Servicer, and the Backup
Servicer. Following the Closing Date, pursuant to the Sale
and Servicing Agreement, the Seller will be obligated,
subject only to the availability thereof, to sell, and the
Trust will be obligated to purchase, subject to the
satisfaction of certain conditions set forth therein,
additional Receivables (the "Subsequent Receivables") from
time to time during the Funding Period (as defined below)
having an aggregate principal balance equal to approximately
$180,000,000 (such amount, as reduced from time to time by
the aggregate principal balance of all Subsequent
Receivables purchased by the Trust, being hereafter referred
to as the "Pre-Funded Amount"). With respect to each sale of
Subsequent Receivables to the Trust, the Seller will
designate as a cutoff date (each, a "Subsequent Cutoff
Date"), the date as of which such Subsequent Receivables are
sold to the Trust. Subsequent Receivables will be conveyed
to the Trust on approximately a monthly basis on
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dates specified by the Seller (each date on which Subsequent
Receivables are conveyed being referred to as a "Subsequent
Transfer Date") occurring during the Funding Period.
The Initial Receivables and the Subsequent Receivables will
be selected from retail installment sales contracts and
promissory notes in Arcadia Financial's portfolio based on
the criteria specified in the Sale and Servicing Agreement
and described in the Prospectus Supplement and in the
accompanying Prospectus. As of August 26, 1998 (the
"Preliminary Cutoff Date"), the weighted average annual
percentage rate (the "APR") of the portion of the Initial
Receivables originated by Arcadia Financial on or before the
Preliminary Cutoff Date (the "Preliminary Initial
Receivables") was approximately 16.73%, the weighted average
remaining maturity of the Preliminary Initial Receivables
was approximately 65.9 months and the weighted average
original maturity of the Preliminary Initial Receivables was
approximately 66.3 months. No Receivable will have a
scheduled maturity later than November 30, 2005 (the "Final
Scheduled Maturity Date"). The Receivables generally are or
will be prepayable at any time without penalty to the
purchaser or co-purchasers of the Financed Vehicle or any
other person who is or persons who are obligated to make
payments thereunder (each, an "Obligor").
Subsequent Receivables may be originated using credit
criteria different from the criteria applied with respect to
the Initial Receivables and may be of a different credit
quality and seasoning. In addition, following the transfer
of Subsequent Receivables to the Trust, the characteristics
of the entire pool of Receivables included in the Trust may
vary from those of the Preliminary Initial Receivables.
The "Aggregate Principal Balance" of the Receivables as of
any Determination Date (I.E., the sixth Business Day prior
to the corresponding Distribution Date) means the aggregate
principal balance of the Receivables at the end of the
preceding calendar month (a "Monthly Period") (other than
(i) any Receivable that became a Liquidated Receivable
during such Monthly Period and (ii) any Receivable that the
Seller, Arcadia Financial or the Servicer has repurchased
with respect to the next Distribution Date), after giving
effect to all payments received from Obligors for such
Monthly Period as of the end of such Monthly Period.
TrustProperty ..... Each Note will represent an obligation of the Trust. The
Trust's assets (the "Trust Property") will include, among
other things, a pool of Receivables (the "Receivables Pool")
consisting of the Initial Receivables and the Subsequent
Receivables, certain monies paid or payable under the
Initial Receivables after the Initial Cutoff Date, certain
monies paid or payable under the Subsequent Receivables
after the respective Subsequent Cutoff Dates, an assignment
of Arcadia Financial's security interests in the Financed
Vehicles and of the right to receive proceeds from claims on
certain insurance policies covering the Financed Vehicles or
the Obligors, an assignment of certain rights of Arcadia
Financial against the Dealers originating such Receivables,
the Collection Account, the Pre-Funding Account and certain
other accounts (including all investments therein, all
income from the investment of funds therein and all proceeds
thereof), and certain other rights under the Trust Documents
(as defined herein). The Initial Receivables will be
purchased by the Seller from Arcadia Financial (or a wholly
owned subsidiary of Arcadia Financial) pursuant to one or
more purchase agreements (the "Purchase Agreements") between
the Seller and Arcadia Financial (or such subsidiary) on or
prior to the date of issuance of the Notes, and the
Subsequent Receivables will be purchased by the Seller from
Arcadia Financial (or such subsidiary) pursuant to one or
more purchase agreements (each, a "Subsequent Purchase
Agreement") on or prior to the applicable Subsequent
Transfer Date. The Trust Property will also include an
assignment of the Seller's rights under the Purchase
Agreements and the Subsequent Purchase Agreements, including
rights against Arcadia Financial upon the occurrence of
certain breaches of representations and warranties
thereunder (a "Repurchase Event").
Terms of the Notes. The principal terms of the Notes will be as described below:
A. Distribution
Dates......... Payments of interest and principal on the Notes will be made
on the fifteenth day of each month or, if the fifteenth day
is not a Business Day, on the next following Business Day
(each, a "Distribution Date"), commencing October 15, 1998.
Payments will be made to
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holders of record of the Notes (the "Noteholders") as of the
Business Day immediately preceding such Distribution Date (a
"Record Date").
B. Interest ..... Interest on the outstanding principal amount of the Notes of
each class will accrue at the applicable interest rate from
and including the Closing Date (in the case of the first
Distribution Date) or from and including the most recent
Distribution Date on which interest has been paid to but
excluding the following Distribution Date (each, an
"Interest Period"). Interest on the Notes for any
Distribution Date due but not paid on such Distribution
Date will be due on the next Distribution Date together
with interest on such amount at the applicable interest
rate. Interest on the Class A-1 Notes and the Class A-2
Notes will be calculated on the basis of the actual number
of days elapsed during the applicable Interest Period
divided by 360. Interest on the Class A-3 Notes for each
Interest Period will be calculated on the basis of a
360-day year consisting of twelve 30-day months.
C. Principal ... Principal of the Notes will be payable on each Distribution
Date in an amount equal to the Noteholders' Principal
Distributable Amount for the Monthly Period preceding such
Distribution Date. The Noteholders' Principal Distributable
Amount will equal the sum of the following amounts with
respect to the related Monthly Period: (i) that portion of
all collections on Receivables (other than Liquidated
Receivables and Purchased Receivables) allocable to
principal, including full and partial principal prepayments,
received during such Monthly Period, (ii) the principal
balance of each Receivable that became a Liquidated
Receivable during such Monthly Period, (iii) the principal
balance of each Receivable that was repurchased by Arcadia
Financial or the Servicer as of the last day of such Monthly
Period, and, at the option of Financial Security, the
principal balance of each Receivable that was required to
be, but was not, so repurchased, (iv) the aggregate amount
of any reduction of the principal balance of a Receivable as
a result of a court order in an insolvency proceeding and
(v) any unpaid portion of the amounts included in clauses
(i), (ii), (iii) and (iv) above with respect to a prior
Distribution Date.
Payments of principal on the Notes will be paid to the
holders of Class A-1 Notes until the principal balance of
the Class A-1 Notes has been reduced to zero, then to the
holders of Class A-2 Notes until the principal balance of
the Class A-2 Notes has been reduced to zero and then to the
holders of Class A-3 Notes until the principal balance of
the Class A-3 Notes has been reduced to zero.
D. Optional
Redemption .. The Class A-3 Notes, to the extent still outstanding, may be
redeemed in whole, but not in part, on any Distribution Date
on which the Seller or the Servicer exercises its option to
purchase the Receivables, which, subject to certain
provisions in the Sale and Servicing Agreement, can occur
after the Aggregate Principal Balance declines to 10% or
less of the Original Pool Balance, at a redemption price
equal to the unpaid principal amount of the Notes of each
such class plus accrued and unpaid interest thereon. The
"Original Pool Balance" will equal the sum of (i) the
Aggregate Principal Balance as of the Initial Cutoff Date
plus (ii) the aggregate principal balances of all Subsequent
Receivables added to the Trust as of their respective
Subsequent Cutoff Dates.
E. Mandatory
Redemption ... Each class of Notes will be redeemed in part on the
Distribution Date on or immediately following the last day
of the Funding Period in the event that any portion of the
Pre-Funded Amount remains on deposit in the Pre-Funding
Account after giving effect to the purchase of all
Subsequent Receivables, including any such purchase on such
date (a "Mandatory Redemption"). The aggregate principal
amount of each class of Notes to be redeemed will be an
amount equal to such class's pro rata share (based on the
respective current principal balance of each class of Notes)
of the Pre-Funded Amount on such date (such class's "Note
Prepayment Amount"). A limited recourse mandatory prepayment
premium (the "Note Prepayment Premium") will be payable by
the Trust to the Noteholders if the Pre-Funded Amount at the
end of the Funding Period exceeds $100,000.
The Notes may be accelerated and subject to immediate
payment at par upon the occurrence of an event of default
under the Indenture. So long as Financial Security shall not
be in continuing default on its obligations under the Note
Policy and certain bankruptcy events
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shall not have occurred with respect to Financial Security,
an event of default under the Indenture will occur only upon
delivery by Financial Security to the Indenture Trustee of
notice of the occurrence of certain events of default. In
the case of such an event of default, the Notes will
automatically be accelerated and subject to immediate
payment at par. The Note Policy does not guarantee payment
of any amounts that become due on an accelerated basis,
unless Financial Security elects, in its sole discretion, to
pay such amounts in whole or in part.
Pre-Funding
Account ........... During the period (the "Funding Period") from and including
the Closing Date until the earliest of (i) the Determination
Date on which (a) the Pre-Funded Amount is less than
$100,000, (b) an event of default has occurred under the
Indenture or a Servicer termination event has occurred under
the Sale and Servicing Agreement, or (c) certain events of
insolvency have occurred with respect to the Seller or the
Servicer, or (ii) the close of business on the November 1998
Distribution Date, the Pre-Funded Amount will be maintained
as an account in the name of the Indenture Trustee (the
"Pre-Funding Account"). The Pre-Funded Amount is initially
expected to equal approximately $180,000,000 and, during the
Funding Period, will be reduced by the principal balance of
Subsequent Receivables purchased by the Trust from time to
time in accordance with the Sale and Servicing Agreement.
The Seller expects that the Pre-Funded Amount will be
reduced to less than $100,000 by the November 1998
Distribution Date. Any Pre-Funded Amount remaining at the
end of the Funding Period will be distributed with respect
to each class of Notes pro rata in proportion to the
respective principal balances of each class of Notes.
Reserve Account ... During the Funding Period, funds will be held in a reserve
account (the "Reserve Account") to cover any shortfalls due
to investment earnings on funds in the Pre-Funding Account
being less than the interest due on a comparable principal
amount of Notes.
The Note Policy ... On the Closing Date, Financial Security will issue a
financial guaranty insurance policy (the "Note Policy") to
the Indenture Trustee. Pursuant to the Note Policy,
Financial Security will unconditionally and irrevocably
guarantee to the Noteholders payment of the Noteholders'
Distributable Amount for each Distribution Date.
Collection
Account ........... Except under certain conditions described herein, the
Servicer will establish one or more accounts in the name of
the Indenture Trustee (the "Collection Account") for the
benefit of Noteholders. All payments from Obligors that are
received by the Lockbox Bank on behalf of the Trust will be
deposited in the Collection Account no later than two
Business Days after receipt thereof.
Priority of
Distributions ..... Pursuant to the Sale and Servicing Agreement, the Indenture
Trustee will, based upon the information contained in a
certificate provided by the Servicer, on each Distribution
Date, withdraw the Available Funds with respect to such
Distribution Date from the Collection Account and apply such
funds to the following (in the priority indicated):
(i) to the Servicer, the amount the Servicer is
entitled to be reimbursed for prior Monthly Advances,
(ii) to the Owner Trustee and the Indenture Trustee,
any accrued and unpaid trustee fees and any accrued and
unpaid fees of the separate Lockbox Bank, Custodian, Backup
Servicer, Collateral Agent, Indenture Collateral Agent or
Administrator (in each case, to the extent such fees have
not been previously paid by the Servicer or Arcadia
Financial),
(iii) to the Servicer, the servicing fee for the
related Monthly Period and any overdue servicing fees,
(iv) into the Note Distribution Account, the
Noteholders' Interest Distributable Amount,
(v) into the Note Distribution Account, the
Noteholders' Principal Distributable Amount,
(vi) to Financial Security, amounts owing and not paid
to Financial Security, and
(vii) the remaining balance, if any, to a financial
institution acting as collateral agent (the "Collateral
Agent") on behalf of Financial Security, the Indenture
Trustee (on behalf of
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the Noteholders) and the trustees for other trusts and
warehousing facilities established and to be established by
the Seller.
Tax Status ........ It is contemplated that the Notes, for federal income tax
purposes, will be characterized as debt, and the Trust will
not be characterized as an association (or a publicly traded
partnership) taxable as a corporation.
ERISA
Considerations .... Subject to certain considerations, it is contemplated that
the Notes will be eligible for purchase by employee benefit
plans.
Legal Investment... The Class A-1 Notes will be eligible securities
for purchase by money market funds under Rule 2a-7 under the
Investment Company Act of 1940, as amended.
Ratings ........... It is a condition of issuance that the Class A-1 Notes be
rated A-1+ by Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc. ("S&P"), and P-1 by
Moody's Investors Service, Inc. ("Moody's" and, together
with S&P, the "Rating Agencies"), and the Class A-2 Notes
and the Class A-3 Notes each be rated AAA by S&P and Aaa by
Moody's. There is no assurance that the ratings initially
assigned to the Notes will not subsequently be lowered or
withdrawn by the Rating Agencies.
Risk Factors....... Before making an investment decision, prospective
investors should consider the factors that will be set forth
under the caption "Risk Factors" in the Prospectus
Supplement and the Prospectus.
</TABLE>
THE RECEIVABLES POOL
GENERAL
The Receivables Pool will include the Initial Receivables and all amounts
due thereunder after the Initial Cutoff Date, and any Subsequent Receivables and
all amounts due thereunder after the applicable Subsequent Cutoff Date (the
Initial Cutoff Date or any Subsequent Cutoff Date being individually referred to
herein as a "Cutoff Date").
All of the Receivables are or will be retail installment sales contracts or
promissory notes purchased in the ordinary course of business by Arcadia
Financial from Dealers who regularly originate and sell such contracts or notes
to Arcadia Financial. Retail installment sales contracts and promissory notes
are hereinafter referred to individually as a "Loan" or collectively as "Loans."
The Initial Receivables and the Subsequent Receivables were or will be selected
from Arcadia Financial's portfolio for inclusion in the Receivables Pool in
compliance with several criteria, some of which are set forth below under
"-Selection Criteria." No selection procedures believed by Arcadia Financial or
by the Seller to be adverse to Noteholders were used or will be used in
selecting the Receivables.
The obligation of the Trust to purchase the Subsequent Receivables on a
Subsequent Transfer Date will be subject to the Receivables in the Trust,
together with the Subsequent Receivables to be conveyed to the Trust on such
Subsequent Transfer Date, meeting the following criteria (computed based on the
characteristics of the Initial Receivables on the Initial Cutoff Date and any
Subsequent Receivables as of the related Subsequent Cutoff Date): (i) the
weighted average APR of such Receivables will not be lower than one percentage
point below the weighted average APR of the Preliminary Initial Receivables on
the Preliminary Cutoff Date; (ii) the weighted average remaining term of such
Receivables will not be greater than 67 months nor less than 63 months; (iii)
not more than 90% of the Aggregate Principal Balance of such Receivables will be
attributable to Loans for the purchase of used Financed Vehicles; (iv) not more
than 70% of the Aggregate Principal Balance of such Receivables will represent
Receivables originated under Arcadia Financial's "Classic" program (excluding
loans for the purchase of repossessed automobiles that would otherwise be deemed
originated under the "Classic" program); and (v) not more than 3% of the
Aggregate Principal Balance of such Receivables will be attributable to
Receivables with an APR in excess of 21%.
The Aggregate Principal Balance of the Initial Receivables is expected to
be equal to approximately 70% of the aggregate initial principal balance of the
Notes. However, except for the criteria described in the preceding paragraphs,
there will be no required characteristics of the Subsequent Receivables and the
Receivables included in the Initial Receivables originated after the Preliminary
Cutoff Date. Therefore, following the transfer of Subsequent Receivables to the
Trust, the aggregate characteristics of the entire Receivables Pool, including
the composition of the Receivables, the distribution by APR and the geographic
distribution described in the following tables, may vary from those of the
Preliminary Initial Receivables.
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DELINQUENCY, CREDIT LOSS AND REPOSSESSION INFORMATION
The following tables set forth information relating to Arcadia Financial's
delinquency, credit loss and repossession experience for each period indicated
with respect to all Loans it has purchased and continues to service. This
information includes the experience with respect to all Loans in Arcadia
Financial's portfolio of Loans serviced during each such period, including Loans
which do not meet the criteria for selection as a Receivable. At the Preliminary
Cutoff Date, the Preliminary Initial Receivables represented approximately
6.92%, by principal balance, of Arcadia Financial's portfolio of Loans serviced.
DELINQUENCY EXPERIENCE(1)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
At December 31,
----------------------------------------------------------------
1995 1996 1997 At June 30, 1998
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Number Number Number Number
of of of of
Loans Balances Loans Balances Loans Balances Loans Balances
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Servicing Portfolio at
End of Period 185,241 $2,267,107 302,450 $3,791,857 411,429 $4,956,090 438,063 $5,085,605
Delinquencies:
31-60 days 1,536 $ 17,667 3,884 $ 47,225 8,297 $ 100,161 8,172 $ 96,169
61-90 days 520 5,694 1,255 15,877 3,635 45,485 3,740 44,733
91 days or more 614 6,881 2,911 37,019 3,019 34,047 4,685 51,810
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Total Automobile Loans
Delinquent 31 or More Days 2,670 $ 30,242 8,050 $ 100,121 14,951 $ 179,693 16,597 $ 192,712
Delinquencies as a Percentage
of Number of Loans and Amount
Outstanding at End of Period (2) 1.44% 1.33% 2.66% 2.64% 3.63% 3.63% 3.79% 3.79%
Amount in Repossession (3) 1,489 $ 17,676 4,651 $ 64,929 6,083 $ 55,300 4,184 $ 28,861
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Total Delinquencies and Amount in
Repossession (2) 4,159 $ 47,918 12,701 $ 165,050 21,034 $ 234,993 20,781 $ 221,573
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</TABLE>
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(1) All amounts and percentages are based on the principal amount scheduled to
be paid on each Loan. The information in the table includes previously sold
Loans which Arcadia Financial continues to service.
(2) Amounts shown do not include Loans which are less than 31 days delinquent.
(3) Amount in Repossession represents Financed Vehicles which have been
repossessed but not yet liquidated.
CREDIT LOSS AND REPOSSESSION EXPERIENCE(1)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Six
Year Ended December 31, Months Ended
1995 1996 1997 June 30, 1998(4)
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<S> <C> <C> <C> <C>
Average Servicing Portfolio Outstanding During the Period....... $1,534,720 $3,015,411 $4,458,677 $5,025,684
Average Number of Loans Outstanding During the Period........... 128,783 242,419 362,626 425,408
Number of Charge-Offs........................................... 5,020 14,403 24,616 16,274
Gross Charge-Offs (2)........................................... $ 11,247 $ 35,642 $ 165,233 $ 131,426
Recoveries (3).................................................. 911 5,653 9,855 7,748
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Net Losses...................................................... $ 10,3366 $ 29,989 155,378 $ 123,678
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---------- ---------- ---------- ----------
Gross Charge-Offs as a Percentage of Average Servicing
Portfolio.................................................... 0.73% 1.18% 3.71% 5.23%
Net Losses as a Percentage of Average Servicing Portfolio....... 0.67% 0.99% 3.48% 4.92%
</TABLE>
- - -------------------
(1) All amounts and percentages are based on the principal amount scheduled to
be paid on each Loan. The information in the table includes previously sold
Loans which Arcadia Financial continues to service.
(2) Gross charge-offs represent principal amounts which management estimated to
be uncollectible after the consideration of anticipated proceeds from the
disposition of repossessed assets and selling expenses.
(3) Includes post-disposition amounts received on previously charged off Loans.
(4) Percentage calculations for the six months ended June 30, 1998 are
annualized.
The increase in the rate of delinquencies, gross charge-offs, net losses
and repossessions during 1996, experienced by both the Premier and Classic
programs, was primarily due to (i) increased demands on Arcadia Financial's
servicing and collection resources as the result of rapid growth in its
servicing portfolio and as a result of continued expansion of the Classic loan
program (which generally requires greater collection efforts than the Premier
program), (ii) the performance of Arcadia Financial's discontinued
- 7 -
<PAGE>
Classic product for first time automobile buyers and Arcadia Financial's
financed repossession program, which experienced significantly higher
delinquencies, repossessions and losses than Arcadia Financial's other products
and programs and (iii) the continued seasoning of Arcadia Financial's servicing
portfolio. The significant rise in repossession inventory levels during 1996 was
the result of the growth in Arcadia Financial's servicing portfolio and
increased utilization of retail distribution channels to liquidate repossessed
automobiles.
The increase in delinquencies, gross charge-offs and net losses during 1997
was primarily due to the continued seasoning of Arcadia Financial's existing
servicing portfolio to include a greater proportion of loans in the period of
highest probability for delinquencies and defaults (generally 6 to 14 months
from the date of origination), especially with respect to Arcadia Financial's
Premier loan portfolio. Much of the increase in performance statistics was due
to performance of loans originated in 1995 and the first half of 1996. As
expected, performance statistics also increased during 1997 as a result of a
rise in the proportion of Classic loans in Arcadia Financial's portfolio. At
December 31, 1997, the portfolio consisted of approximately 43% Classic loans
compared to 29% at December 31, 1996. Net losses during the year were further
affected by selling an increased proportion of repossessed vehicles through
wholesale auctions. During 1997, Arcadia Financial liquidated approximately 54%
of all repossessed vehicles sold through wholesale auctions compared to 30%
during 1996. Because recovery rates are generally lower on vehicles sold at
auction compared to those liquidated through retail channels, the increased
utilization of auctions has increased net losses experienced by Arcadia
Financial. Included in the 1997 gross charge-off and net loss statistics is a
special charge of approximately $25 million resulting from a revision to Arcadia
Financial's inventory valuation policy, which requires Arcadia Financial to
record all repossessed vehicles at recovery rates that reflect expected values
to be achieved through wholesale auctions, regardless of the specific asset
disposition strategy to be employed.
The increase in the rate of delinquencies at June 30, 1998, compared with
December 31, 1997, reflects the continued rise in the proportion of Classic
loans in Arcadia Financial's servicing portfolio, which approximated 50% of
loans serviced at June 30, 1998, compared with 43% at December 31, 1997.
Repossessed inventory has decreased since December 31, 1997, primarily due to
Arcadia Financial's decision to increase its use of wholesale disposition
channels to liquidate repossessed vehicles. During the first six months of 1998,
Arcadia Financial sold approximately 74% of its repossessed inventory through
wholesale channels compared with 45% in the same period in 1997.
Annualized gross charge-offs and net losses during the three and six month
periods ended June 30, 1998, include a charge of 1.72% and 0.86%, respectively,
representing the impact of a write-down of current inventory resulting from a
revision to the estimate of net realizable value and the write-off of all
remaining problem loans from one of Arcadia Financial's original consignment
dealers which has since ceased doing business. The remaining increase in gross
charge-offs and net losses during the three and six months ended June 30, 1998,
compared to the same periods a year ago primarily reflects the continued rise in
the proportion of Classic loans in Arcadia Financial's servicing portfolio and
the increase in the utilization of wholesale disposition channels. Arcadia
Financial announced that it is planning to discontinue the sale of repossessed
vehicles through retail disposition channels and anticipates that it will be
completely out of these operations by the end of 1998. Arcadia Financial
believes that its decision to discontinue its retail remarketing operations will
enable it to better manage its level of repossessed inventory and improve the
timing of excess cash flows released to it from securitization trusts as a
result of an increase in the speed at which repossessed vehicles can be
liquidated.
The Loans in Arcadia Financial's servicing portfolio include Loans other
than the Receivables, including Loans which do not meet the criteria for
selection as a Receivable. There can be no assurance that the delinquency, loan
loss or repossession experience of the Trust with respect to the Receivables
will be better than, worse than or comparable to the experience set forth above.
SELECTION CRITERIA
The Preliminary Initial Receivables represent substantially all Loans in
Arcadia Financial's portfolio, owned and not serviced for others, that (i) were
not more than 30 days past due as of the Preliminary Cutoff Date, (ii) did not
have a remaining principal balance as of the Preliminary Cutoff Date less than
$500.00, (iii) did not have a final scheduled payment date prior to December 1,
1998, and (iv) were otherwise eligible under criteria established by Arcadia
Financial and Financial Security.
CERTAIN OTHER CHARACTERISTICS
The Preliminary Initial Receivables (i) had a remaining maturity, as of the
Preliminary Cutoff Date, of at least 3 months, but not more than 84 months, (ii)
had an original maturity of at least 6 months, but not more than 84 months,
(iii) had an original principal balance of at least $1,700.00 and not more than
$46,089.55, (iv) had a remaining principal balance, as of the Preliminary Cutoff
Date, of at least $525.60 and not more than $45,706.14, and (v) had an APR of at
least 8.90% and not more than 23.95%. Approximately 15.73% of the Aggregate
Principal Balance of the Preliminary Initial Receivables, as of the Preliminary
Cutoff Date, was attributable to Loans for the purchase of new Financed
Vehicles, and approximately 84.27% of the Aggregate Principal Balance was
attributable to Loans for the purchase of used Financed Vehicles. The
Preliminary Initial Receivables were purchased from more than 4,000
- 8 -
<PAGE>
Dealers. Not more than 0.43% of the Aggregate Principal Balance of the
Preliminary Initial Receivables as of the Preliminary Cutoff Date was originated
by any single Dealer. The ten most significant Dealers, each of whom
individually accounted for at least 0.30% of the Aggregate Principal Balance as
of the Preliminary Cutoff Date, in the aggregate, originated approximately 3.59%
of the Aggregate Principal Balance as of the Preliminary Cutoff Date.
Approximately 97.78% of the Preliminary Initial Receivables, by principal
balance, are simple interest obligations, and interest on the remaining 2.22% of
the Preliminary Initial Receivables is computed on an actuarial basis, with
prepayment rebates computed according to the Rule of 78's. Neither the Seller,
Arcadia Financial nor the Servicer may substitute other Loans for the
Receivables at any time during the term of the Sale and Servicing Agreement.
The composition and distribution by APR and geographic concentration of the
Receivables Pool as of the Preliminary Cutoff
Date are set forth in the following tables:
COMPOSITION OF THE PRELIMINARY INITIAL RECEIVABLES
AS OF THE PRELIMINARY CUTOFF DATE
<TABLE>
<CAPTION>
Weighted
Average Aggregate Number of Average Weighted Weighted Average
APR of Principal Receivables in Principal Average Original Scheduled
Receivables Balance Pool Balance Remaining Term (1) Term (1)
----------- ------- ---- ------- ------------------ --------
<S> <C> <C> <C> <C> <C>
16.725% $357,145,228.26 25,681 $13,906.98 65.9 months 66.3 months
</TABLE>
- - -------------------
(1) Based on scheduled payments due after the Preliminary Cutoff Date (in the
case of the Weighted Average Remaining Term) and assuming no prepayments on
the Preliminary Initial Receivables.
DISTRIBUTION BY APR OF THE PRELIMINARY INITIAL RECEIVABLES
AS OF THE PRELIMINARY CUTOFF DATE
<TABLE>
<CAPTION>
NUMBER OF AGGREGATE PERCENT OF AGGREGATE
APR RANGE (%) RECEIVABLES PRINCIPAL BALANCE PRINCIPAL BALANCE(1)
<S> <C> <C> <C>
8.00 to 8.99 ................................. 2 $ 32,157.64 0.01%
9.00 to 9.99.................................. 52 778,808.03 0.22
10.00 to 10.99 ............................... 331 5,610,986.30 1.57
11.00 to 11.99................................ 817 13,988,022.15 3.92
12.00 to 12.99................................ 1,418 23,503,605.00 6.58
13.00 to 13.99 ............................... 1,623 26,408,028.74 7.39
14.00 to 14.99 ............................... 2,016 31,729,227.30 8.88
15.00 to 15.99 ............................... 2,028 29,914,184.77 8.38
16.00 to 16.99 ............................... 3,063 46,070,472.20 12.90
17.00 to 17.99 ............................... 4,141 57,535,062.61 16.11
18.00 to 18.99 ............................... 3,662 48,908,912.22 13.69
19.00 to 19.99 ............................... 3,551 43,614,974.61 12.21
20.00 to 20.99 ............................... 1,978 20,400,781.06 5.71
21.00 to 21.99 ............................... 777 6,824,400.75 1.91
22.00 to 23.99 ............................... 222 1,825,604.88 0.51
------ --------------- ------
25,681 $357,145,228.26 100.00%
------ --------------- ------
------ --------------- ------
</TABLE>
- - --------------------
(1) The sum of the individual Aggregate Principal Balance percentages may not
total 100.00% due to rounding.
- 9 -
<PAGE>
GEOGRAPHIC CONCENTRATION OF THE PRELIMINARY INITIAL RECEIVABLES
AS OF THE PRELIMINARY CUTOFF DATE
<TABLE>
<CAPTION>
NUMBER OF AGGREGATE PERCENT OF AGGREGATE
STATE RECEIVABLES PRINCIPAL BALANCE PRINCIPAL BALANCE(1)
- - ----- ----------- ----------------- -----------------
<S> <C> <C> <C>
Texas..................................................... 4,286 65,100,219.16 18.23%
Florida................................................... 1,789 25,837,808.92 7.23
California................................................ 1,690 24,283,251.96 6.80
Tennessee................................................. 1,656 22,853,631.36 6.40
Georgia................................................... 1,145 16,739,602.06 4.69
North Carolina............................................ 1,047 15,041,272.03 4.21
South Carolina............................................ 1,046 14,801,900.91 4.14
Oklahoma.................................................. 1,017 14,012,938.26 3.92
Arizona................................................... 834 12,399,405.62 3.47
Oregon.................................................... 932 12,335,000.01 3.45
Colorado.................................................. 901 11,801,915.04 3.30
Missouri.................................................. 840 11,191,868.00 3.13
Washington................................................ 665 8,873,422.59 2.48
New York.................................................. 684 8,046,770.51 2.25
Massachusetts............................................. 643 7,826,181.78 2.19
Minnesota................................................. 583 7,324,229.61 2.05
Nevada.................................................... 441 6,803,380.76 1.90
Connecticut............................................... 441 5,571,204.61 1.56
Utah...................................................... 359 5,044,698.97 1.41
Michigan.................................................. 350 4,479,464.22 1.25
Virginia.................................................. 292 4,231,542.22 1.18
New Mexico................................................ 283 4,152,725.76 1.16
Kentucky.................................................. 308 4,120,162.46 1.15
Illinois ................................................. 297 3,827,212.54 1.07
Nebraska.................................................. 307 3,807,682.06 1.07
Maryland.................................................. 248 3,525,652.68 0.99
Iowa...................................................... 272 3,507,156.38 0.98
Wisconsin................................................. 285 3,412,173.54 0.96
All other states.......................................... 2,040 26,192,754.24 7.33
------ --------------- ------
25,681 $357,145,228.26 100.00
------ --------------- ------
------ --------------- ------
</TABLE>
- - ------------------------
(1) The sum of the individual Aggregate Principal Balance percentages may not
total 100.00% due to rounding.
- 10 -
<PAGE>
WEIGHTED AVERAGE LIFE OF THE SECURITIES
Prepayment on automotive receivables can be measured relative to a
prepayment standard or model. The model used in this Term Sheet, the Absolute
Prepayment Model ("ABS"), represents an assumed rate of prepayment each month
relative to the original number of receivables in a pool of receivables. ABS
further assumes that all the receivables are the same size and amortize at the
same rate and that each receivable in each month of its life will either be paid
as scheduled or be prepaid in full. For example, in a pool of receivables
originally containing 10,000 receivables, a 1% ABS rate means that 100
receivables prepay each month. ABS does not purport to be an historical
description of prepayment experience or a prediction of the anticipated rate of
prepayment of any pool of receivables, including the Receivables.
As the rate of payment of principal of each class of Notes will depend on
the rate of payment (including prepayments) of the principal balance of the
Receivables, final payment of any class of Notes could occur significantly
earlier than the respective Final Scheduled Distribution Dates. Reinvestment
risk associated with early payment of the Notes will be borne exclusively by the
Noteholders.
The table captioned "Percent of Initial Note Principal Amount at Various
ABS Percentages" (the "ABS Table") has been prepared on the basis of the
characteristics of the Receivables. The ABS Table assumes that (i) the
Receivables prepay in full at the specified constant percentage of ABS monthly,
with no defaults, losses or repurchases, (ii) each scheduled monthly payment on
the Receivables is made on the last day of each month and each month has 30
days, (iii) payments on the Notes are made on each Distribution Date (and each
such date is assumed to be the fifteenth day of each applicable month) and (iv)
the Servicer does not exercise its option to purchase the Receivables. Pool 1
has been modeled with a Cutoff Date of August 26, 1998, and Pool 2 is assumed to
be delivered one month later. The ABS Table indicates the projected weighted
average life of each class of Notes and sets forth the percent of the initial
principal amount of each class of Notes that is projected to be outstanding
after each of the Distribution Dates shown at various constant ABS percentages.
The ABS Table also indicates the month in which the Servicer can exercise its
optional clean-up call and the associated weighted average life.
The ABS Table also assumes that the Receivables have been aggregated into
hypothetical pools with all of the Receivables within each such pool having the
following characteristics and that the level scheduled monthly payment for each
of the pools (which is based on its aggregate principal balance, APR, original
term to maturity and remaining term to maturity as of the Cutoff Date) will be
such that each pool will be fully amortized by the end of its remaining term to
maturity.
<TABLE>
<CAPTION>
ORIGINAL TERM REMAINING TERM
AGGREGATE TO MATURITY TO MATURITY
POOL PRINCIPAL BALANCE APR (IN MONTHS) (IN MONTHS)
---- ----------------- --- ----------- -----------
<S> <C> <C> <C> <C>
1............................... $ 357,145,228.26 16.725% 66 66
2............................... $ 242,854,771.74 16.725% 66 66
</TABLE>
The actual characteristics and performance of the Receivables will differ
from the assumptions used in constructing the ABS Table. The assumptions used
are hypothetical and have been provided only to give a general sense of how the
principal cash flows might behave under varying prepayment scenarios. For
example, it is unlikely that the Receivables will prepay at a constant level of
ABS until maturity or that all of the Receivables will prepay at the same level
of ABS. Moreover, the diverse terms of Receivables within each of the
hypothetical pools could produce slower or faster principal distributions than
indicated in the ABS Table at the various constant percentages of ABS specified,
even if the original and remaining terms to maturity of the Receivables are as
assumed. Any difference between such assumptions and the actual characteristics
and performance of the Receivables, or actual prepayment experience, will affect
the percentages of initial amounts outstanding over time and the weighted
average lives of each class of Notes.
- 11 -
<PAGE>
PERCENT OF INITIAL NOTE PRINCIPAL AMOUNT
AT VARIOUS ABS PERCENTAGES
<TABLE>
<CAPTION>
DISTRIBUTION DATE CLASS A-1 NOTES CLASS A-2 NOTES CLASS A-3 NOTES
- - ----------------- ------------------------------ --------------------------------- --------------------------------
0.00% 1.20% 1.60% 2.00% 0.00% 1.20% 1.60% 2.00% 0.00% 1.20% 1.60% 2.00%
-------------- ------- ------- ------- ------- ------- ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Closing Date...... 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
10/15/98.......... 94.95 88.52 86.37 84.23 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
11/15/98.......... 86.39 69.28 63.57 57.86 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
12/15/98.......... 77.72 50.12 40.93 31.73 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
01/15/99.......... 68.92 31.07 18.45 5.83 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
02/15/99.......... 60.00 12.10 0.00 0.00 100.00 100.00 98.69 93.25 100.00 100.00 100.00 100.00
03/15/99.......... 50.96 0.00 0.00 0.00 100.00 97.70 91.15 84.61 100.00 100.00 100.00 100.00
04/15/99.......... 41.79 0.00 0.00 0.00 100.00 91.32 83.68 76.05 100.00 100.00 100.00 100.00
05/15/99.......... 32.49 0.00 0.00 0.00 100.00 84.97 76.27 67.58 100.00 100.00 100.00 100.00
06/15/99.......... 23.06 0.00 0.00 0.00 100.00 78.66 68.93 59.19 100.00 100.00 100.00 100.00
07/15/99.......... 13.50 0.00 0.00 0.00 100.00 72.38 61.64 50.91 100.00 100.00 100.00 100.00
08/15/99.......... 3.81 0.00 0.00 0.00 100.00 66.14 54.43 42.71 100.00 100.00 100.00 100.00
09/15/99.......... 0.00 0.00 0.00 0.00 97.95 59.95 47.28 34.61 100.00 100.00 100.00 100.00
10/15/99.......... 0.00 0.00 0.00 0.00 94.56 53.79 40.20 26.61 100.00 100.00 100.00 100.00
11/15/99.......... 0.00 0.00 0.00 0.00 91.13 47.68 33.20 18.71 100.00 100.00 100.00 100.00
12/15/99.......... 0.00 0.00 0.00 0.00 87.64 41.61 26.26 10.92 100.00 100.00 100.00 100.00
01/15/00.......... 0.00 0.00 0.00 0.00 84.11 35.58 19.40 3.23 100.00 100.00 100.00 100.00
02/15/00.......... 0.00 0.00 0.00 0.00 80.53 29.60 12.62 0.00 100.00 100.00 100.00 97.52
03/15/00.......... 0.00 0.00 0.00 0.00 76.89 23.66 5.92 0.00 100.00 100.00 100.00 93.25
04/15/00.......... 0.00 0.00 0.00 0.00 73.21 17.78 0.00 0.00 100.00 100.00 99.60 89.06
05/15/00.......... 0.00 0.00 0.00 0.00 69.48 11.94 0.00 0.00 100.00 100.00 95.87 84.93
06/15/00.......... 0.00 0.00 0.00 0.00 65.69 6.15 0.00 0.00 100.00 100.00 92.19 80.86
07/15/00.......... 0.00 0.00 0.00 0.00 61.85 0.42 0.00 0.00 100.00 100.00 88.55 76.87
08/15/00.......... 0.00 0.00 0.00 0.00 57.96 0.00 0.00 0.00 100.00 97.00 84.97 72.95
09/15/00.......... 0.00 0.00 0.00 0.00 54.01 0.00 0.00 0.00 100.00 93.78 81.44 69.10
10/15/00.......... 0.00 0.00 0.00 0.00 50.01 0.00 0.00 0.00 100.00 90.60 77.96 65.32
11/15/00.......... 0.00 0.00 0.00 0.00 45.95 0.00 0.00 0.00 100.00 87.46 74.54 61.62
12/15/00.......... 0.00 0.00 0.00 0.00 41.84 0.00 0.00 0.00 100.00 84.35 71.17 57.99
01/15/01.......... 0.00 0.00 0.00 0.00 37.66 0.00 0.00 0.00 100.00 81.27 67.86 54.45
02/15/01.......... 0.00 0.00 0.00 0.00 33.43 0.00 0.00 0.00 100.00 78.22 64.61 50.99
03/15/01.......... 0.00 0.00 0.00 0.00 29.15 0.00 0.00 0.00 100.00 75.22 61.41 47.61
04/15/01.......... 0.00 0.00 0.00 0.00 24.80 0.00 0.00 0.00 100.00 72.25 58.28 44.31
05/15/01.......... 0.00 0.00 0.00 0.00 20.39 0.00 0.00 0.00 100.00 69.32 55.21 41.10
06/15/01.......... 0.00 0.00 0.00 0.00 15.92 0.00 0.00 0.00 100.00 66.42 52.20 37.98
07/15/01.......... 0.00 0.00 0.00 0.00 11.38 0.00 0.00 0.00 100.00 63.57 49.26 34.95
08/15/01.......... 0.00 0.00 0.00 0.00 6.79 0.00 0.00 0.00 100.00 60.76 46.39 32.02
09/15/01.......... 0.00 0.00 0.00 0.00 2.13 0.00 0.00 0.00 100.00 57.99 43.58 29.17
10/15/01.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 98.52 55.26 40.84 26.43
11/15/01.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 95.78 52.58 38.18 23.78
12/15/01.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 93.01 49.94 35.59 21.23
01/15/02.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 90.20 47.35 33.07 18.78
02/15/02.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 87.35 44.81 30.63 16.44*
03/15/02.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 84.46 42.31 28.26 14.21
04/15/02.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 81.53 39.87 25.98 12.09
05/15/02.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 78.56 37.47 23.77 10.08
06/15/02.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 75.55 35.13 21.65 8.18
07/15/02.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 72.50 32.84 19.62 6.40
08/15/02.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 69.40 30.60 17.67 4.74
09/15/02.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 66.26 28.43 15.81* 3.20
10/15/02.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 63.08 26.30 14.05 1.79
11/15/02.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 59.85 24.24 12.37 0.50
12/15/02.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 56.58 22.24 10.79 0.00
01/15/03.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 53.26 20.29 9.31 0.00
02/15/03.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 49.89 18.41 7.92 0.00
03/15/03.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 46.48 16.60* 6.64 0.00
04/15/03.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 43.02 14.85 5.45 0.00
05/15/03.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 39.52 13.16 4.38 0.00
06/15/03.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 35.96 11.55 3.41 0.00
07/15/03.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 32.35 10.00 2.55 0.00
08/15/03.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 28.70 8.53 1.81 0.00
09/15/03.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 24.99 7.13 1.18 0.00
10/15/03.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 21.23 5.80 0.66 0.00
11/15/03.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 17.42* 4.56 0.27 0.00
12/15/03.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 13.56 3.39 0.05 0.00
01/15/04.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 9.64 2.29 0.00 0.00
02/15/04.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.67 1.29 0.00 0.00
03/15/04.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.64 0.36 0.00 0.00
04/15/04.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Weighted Average
Life (years)(1) 0.53 0.27 0.24 0.21 2.08 1.16 1.00 0.87 4.39 3.39 2.96 2.56
*Weighted Average Life to
Optional Clean Up Call (years)(1) 4.35 3.30 2.88 2.49
*Optional Clean Up Call Date 11/15/03 3/15/03 9/15/02 2/15/02
</TABLE>
- - ---------------------------
(1) The weighted average life of a Note is determined by (i) multiplying
the amount of each principal payment on a Note by the number of years from the
date of the issuance of the Note to the related Distribution Date, (ii) adding
the results and (iii) dividing the sum by the related initial principal amount
of the Note.
THE ABS TABLE HAS BEEN PREPARED BASED ON THE ASSUMPTIONS DESCRIBED ABOVE
(INCLUDING THE ASSUMPTIONS REGARDING THE CHARACTERISTICS AND PERFORMANCE OF THE
RECEIVABLES WHICH WILL DIFFER FROM THE ACTUAL CHARACTERISTICS AND PERFORMANCE
THEREOF) AND SHOULD BE READ IN CONJUNCTION THEREWITH.
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DEFINITIONS
As used herein the following terms have the following meanings:
"AVAILABLE FUNDS" means, with respect to any Distribution Date, the sum of
the Collected Funds, any Purchase Amounts, all Monthly Advances and all earnings
from the investment of funds in the Collection Account, the Pre-Funding Account
and the Reserve Account during the Monthly Period.
"BUSINESS DAY" means any day other than a Saturday, Sunday, legal holiday
or other day on which commercial banks located in the City of New York or
Minneapolis, Minnesota or any other location of any successor Servicer,
successor Owner Trustee or successor Collateral Agent are authorized or
obligated by law, executive order or governmental decree to be closed.
"COLLECTED FUNDS" means the amount of funds in the Collection Account
allocable to collections on the Receivables in the preceding Monthly Period
(excluding any Monthly Advances and any Purchase Amounts).
"LIQUIDATED RECEIVABLE" means a Receivable as to which (i) 91 days have
elapsed since the Servicer repossessed the related Financed Vehicle, (ii) the
Servicer has determined in good faith that all amounts it expects to recover
have been received or (iii) all or some portion of a scheduled payment thereon
has become more than 180 days past due.
"LOCKBOX BANK" means a bank acting as agent for the Owner Trustee and for
other owners of automobile receivables serviced by Arcadia Financial that shall
receive all payments by Obligors on the Receivables held by the Trust.
"MONTHLY ADVANCE" shall mean the amount advanced to the Trust by the
Servicer that is equal to any shortfall between the amount paid on a
receivable held by the Trust in any Monthly Period and the full amount of the
interest accrued on such Receivable for the number of calendar days in such
Monthly Period.
"NOTE DISTRIBUTION ACCOUNT" means the account established and maintained
by the Servicer, in the name of the Indenture Trustee on behalf of the
Noteholders, in which amounts released from the Collection Account for
distribution to Noteholders will be deposited and from which all
distributions to Noteholders will be made.
"NOTEHOLDERS' DISTRIBUTABLE AMOUNT" means, with respect to any Distribution
Date, the sum of the Noteholders' Principal Distributable Amount and the
Noteholders' Interest Distributable Amount.
"NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date and a class of Notes, the excess of the Noteholders' Interest
Distributable Amount for such class for the preceding Distribution Date, over
the amount in respect of interest that was actually deposited in the Note
Distribution Account with respect to such class on such preceding Distribution
Date, plus interest on the amount of interest due but not paid to Noteholders of
such class on the preceding Distribution Date, to the extent permitted by law,
at the interest rate borne by such class of Notes from such preceding
Distribution Date to but excluding the current Distribution Date.
"NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Noteholders' Monthly Interest Distributable
Amount for each class of Notes for such Distribution Date and the Noteholders'
Interest Carryover Shortfall for each class of Notes for such Distribution Date.
"NOTEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT" means, with respect to
any Distribution Date, the sum of the interest amounts payable on each class of
Notes. The interest amounts payable with respect to the Class A-1 Notes and the
Class A-2 Notes shall equal the product of the outstanding principal balance of
such class and the interest rate on such class multiplied by a fraction whose
numerator is the actual number of days in the Interest Period and whose
denominator is 360. The interest amounts payable with respect to the Class A-3
Notes shall equal the product of the outstanding principal balance of such class
and the interest rate on such class multiplied by a fraction whose numerator is
the number of days in the Interest Period (assuming each month is composed of 30
days) and whose denominator is 360. The outstanding principal balance for each
Interest Period is measured as of the preceding Distribution Date (after giving
effect to all payments of principal to the Noteholders on or prior to such
Distribution Date) or, in the case of the initial Interest Period, as of the
Closing Date.
"NOTEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect
to any Distribution Date, 100% of the Principal Distribution Amount.
"NOTEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL" means, as of the close of any
Distribution Date, the excess of the Noteholders' Principal Distributable Amount
for the preceding Distribution Date over the amount in respect of principal that
was actually deposited in the Note Distribution Account on such Distribution
Date.
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<PAGE>
"NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date (other than the Final Scheduled Distribution Date for any
class of Notes), the sum of the Noteholders' Monthly Principal Distributable
Amount for such Distribution Date and the Noteholders' Principal Carryover
Shortfall as of the close of the preceding Distribution Date. The Noteholders'
Principal Distributable Amount on the Final Scheduled Distribution Date for any
class of Notes will equal the sum of (i) the Noteholders' Monthly Principal
Distributable Amount for such Distribution Date, (ii) the Noteholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date, and
(iii) the excess of the outstanding principal balance of such class of Notes, if
any, over the amounts described in clauses (i) and (ii).
"PRINCIPAL DISTRIBUTION AMOUNT" means, with respect to any Distribution
Date, the amount equal to the sum of the following amounts with respect to the
related Monthly Period: (i) that portion of all collections on Receivables
(other than Liquidated Receivables and Purchased Receivables) allocable to
principal, including all full and partial prepayments received during such
Monthly Period, (ii) the aggregate unpaid principal balance of all Receivables
(other than the Purchased Receivables) that became Liquidated Receivables during
the Monthly Period, (iii) the aggregate principal balances of all Receivables
that became Purchased Receivables as of the last day of the prior Monthly
Period, and, at the option of Financial Security, the principal balance of each
Receivable that was required to be, but was not, so repurchased and (iv) the
aggregate amount of any reductions in the principal balance of Receivables as a
result of a court order in an insolvency proceeding.
"PURCHASE AMOUNT" of any Receivable means, with respect to the last
calendar day of a month, the outstanding principal balance of such Receivable as
of such date, plus accrued and unpaid interest thereon.
"PURCHASED RECEIVABLE" means a Receivable (i)(A) that Arcadia Financial or
the Seller has become obligated to repurchase (or, under certain circumstances,
has elected to repurchase) as a result of an uncured breach by Arcadia Financial
or the Seller of a representation or warranty made by Arcadia Financial or the
Seller with respect to such Receivable or (B) that the Servicer has become
obligated to repurchase (or, under certain circumstances, has elected to
repurchase) as a result of an uncured breach of the covenants made by it with
respect to such Receivable and (ii) as to which the related Purchase Amount has
been deposited in the Collection Account by Arcadia Financial, the Seller or the
Servicer, as the case may be, on or before the business day immediately
preceding the related Determination Date.
"TRUST DOCUMENTS" shall include the Sale and Servicing Agreement, the Trust
Agreement and the Purchase Agreements.
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