UNITED STATES
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): October 16, 1996
Sears Credit Account Master Trust II
(Exact name of registrant as specified in charter)
Illinois 33-79186-01 Not Applicable
(State of (Commission File (IRS Employer
Organization) Number) Identification No.)
c/o Sears Receivables Financing Group, Inc.
3711 Kennett Pike 19807
Greenville, Delaware (Zip Code)
(Address of principal executive offices)
Registrant's Telephone Number, including area code:
(302) 888-3176
Former name, former address and former fiscal year, if changed
since last report: Not Applicable
Item 5. Other Events
On October 16, 1996, the registrant made available to
prospective investors a series term sheet setting forth a
description of the collateral pool and the proposed structure of
$500,000,000.00 aggregate principal amount of Series 1996-4 Fixed
Rate Class A Credit Card Pass-Through Certificates and
$22,500,000.00 aggregate principal amount of Series 1996-4 Fixed
Rate Class B Credit Card Pass-Through Certificates of Sears
Credit Account Master Trust II. The Series Term Sheet is
attached hereto as Exhibit 99.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
Exhibit 99 Series Term Sheet dated October 16, 1996 of
Sears Credit Account Master Trust II, Series 1996-4.
SIGNATURES
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 thereunto duly authorized.
Sears Credit Account Master Trust II
(Registrant)
By: Sears Receivables Financing Group, Inc.
Date: October 17, 1996 By:/S/Gary D. Farrar
Gary D. Farrar
Vice President, Administration
<PAGE>
EXHIBIT INDEX
Exhibit 99 Series Term Sheet dated October 16, 1996 of
Sears Credit Account Master Trust II, Series 1996-4.
Exhibit 99
SUBJECT TO REVISION
SERIES TERM SHEET DATED OCTOBER 16, 1996
SEARS CREDIT ACCOUNT MASTER TRUST II
$500,000,000 ____% Class A Master Trust Certificates, Series 1996-4
$22,500,000 ____% Class B Master Trust Certificates, Series 1996-4
Sears, Roebuck and Co. Servicer
Sears Receivables Financing Group, Inc. Seller
THE INVESTOR CERTIFICATES WILL REPRESENT FRACTIONAL UNDIVIDED
INTERESTS IN THE SEARS CREDIT ACCOUNT MASTER TRUST II (THE "TRUST") AND DO NOT
REPRESENT INTERESTS IN OR OBLIGATIONS OF SEARS, ROEBUCK AND CO. ("SEARS"),
SEARS NATIONAL BANK, SEARS RECEIVABLES FINANCING GROUP, INC. ("SRFG") OR ANY
AFFILIATE THEREOF. NEITHER THE INVESTOR CERTIFICATES NOR THE UNDERLYING
ACCOUNTS OR RECEIVABLES ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
THIS SERIES TERM SHEET CONTAINS STRUCTURAL AND COLLATERAL INFORMATION
WITH RESPECT TO THE INVESTOR CERTIFICATES; HOWEVER, THIS SERIES TERM SHEET
DOES NOT CONTAIN COMPLETE INFORMATION WITH RESPECT TO THE OFFERING OF THE
INVESTOR CERTIFICATES. THE INFORMATION HEREIN IS PRELIMINARY AND WILL BE
SUPERSEDED BY THE INFORMATION CONTAINED IN THE PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS. ADDITIONAL INFORMATION WILL BE CONTAINED IN THE PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS. PURCHASERS ARE URGED TO READ BOTH THE
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
THIS SERIES TERM SHEET SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES 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. SALES OF THE INVESTOR CERTIFICATES MAY NOT BE
CONSUMMATED UNLESS THE PURCHASER HAS RECEIVED BOTH THE PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS.
Underwriters of the Class A Certificates
CS First Boston
Bear, Stearns & Co. Inc.
Goldman, Sachs & Co.
Merrill Lynch & Co.
Salomon Brothers Inc
This Series Term Sheet will be superseded in its entirety by the information
appearing in the Prospectus Supplement and the Prospectus.
Offered Certificates......$500,000,000 ___% Class A Master Trust Certificates,
Series 1996-4 (the "Class A Certificates") and
$22,500,000 ___% Class B Master Trust Certificates,
Series 1996-4 (the "Class B Certificates," and
together with the Class A Certificates, the "Offered
Certificates").
Seller Retained
Certificates...........$39,330,000 Class C Master Trust
Certificates, Series 1996-4
(the "Class C Certificates," and together with
the Offered Certificates, the "Investor Certificates")
Interest on Offered
Certificates...........Class A Certificates: ____% per annum.
Class B Certificates: ____% per annum.
Interest on the Offered Certificates will be
calculated on the basis of a 360-day year of
twelve 30-day months.
Principal Payment Dates.....Principal is expected to be paid to the Class A
Certificateholders in 24 equal monthly payments
and to the Class B Certificateholders in a single
payment. Certain payments of principal
with respect to the Class C Certificates may be
made prior to payment in full of the Class A
Certificates, such that the Class C Certificate-
holders' interest in the Trust will decline
proportionately to the decline in the Class A
Certificateholders' interest in the Trust, but
the remaining amount of principal payments with
respect to the Class C Certificates will not be
made to the Class C Certificateholders until the
final payment of principal has been made with
respect to the Class B Certificates.
Interest Payment Dates......The 15th day of each month (or, if any such day
is not a business day, the next succeeding
business day), commencing
on November 15, 1996 (each a "Distribution Date").
Class A Controlled
Amortization Amount.........For each Distribution Date with respect to the
period commencing on the November
2000 Distribution Date and ending
on the October 2002 Distribution
Date, the Class A Controlled
Amortization Amount is expected
to be $20,833,333.34.
Class B Controlled
Amortization Amount.........For the November 2002 Distribution Date,
the Class B Controlled Amortization Amount is
expected to be $22,500,000.00.
Class A Expected Final
Payment Date................The October 2002 Distribution Date.
Class B Expected Final
Payment Date................The November 2002 Distribution Date.
Receivables.................The aggregate amount of receivables in the
Accounts (as defined below) as of the last
day of the Due Period ending in
September 1996 was $7,141,537,376.78 consisting
of $7,027,629,788.95 of principal
receivables and $113,907,587.83
of finance charge receivables.
"Due Period" for any Account is the period
included in the monthly billing
cycle applicable to such Account.
Subordination; Additional
Amopunts Available to Class
A and Class B
Certificateholders..........The Class B Certificates and the
Class C Certificates will be subordinated
to the extent available to fund certain payments
with respect to the Class A Certificates.
In addition, the Class C Certificates
will be subordinated to the extent available to
fund certain payments with respect to the Class B
Certificates.
Series Termination Date.....The day following the October 2006 Distribution
Date.
ERISA Considerations........Under the regulations issued by the Department of
Labor, the Trust's assets would not be deemed
"plan assets" of any employee benefit plan holding
interests in the Class A Certificates if certain
conditions are met, such that the
Class A Certificates would constitute "publicly-
offered securities," including that interests in the
Class A Certificates be held by at least 100
persons independent of SRFG and each other upon
completion of the public offering of the Offered
Certificates. The Class A Underwriters expect,
although no assurance can be given, that interests
in the Class A Certificates will be held by at
least 100 such persons, and it is anticipated that
the other conditions of the "publicly-
offered security" exception contained in the
regulations will be met. The Class B Underwriter
does not expect that the Class B Certificates will
be held by 100 or more independent persons. If
the Trust's assets were deemed to
be "plan assets" of such a plan,
there is uncertainty as to
whether existing exemptions from
the "prohibited transaction"
rules of the Employee Retirement
Income Security Act of 1974, as
amended ("ERISA"), would apply to
all transactions involving the
Trust's assets. Accordingly,
employee benefit plans
contemplating purchasing
interests in Investor
Certificates should consult their
counsel before making a purchase.
Class A Certificate Rating..It is a condition to the issuance of the Class A
Certificates that they be rated
in the highest rating category by
at least two nationally
recognized rating agencies. The
rating of the Class A
Certificates is based primarily
on the value of the receivables
in the Trust and the
subordination of the Class B
Certificates and the Class C
Certificates.
Class B Certificate Rating..It is a condition to the issuance of the
Class B Certificates that they be rated
in one of the three highest
rating categories by at least two
nationally recognized rating
agencies. The rating of the
Class B Certificates is based
primarily on the value of the
Receivables in the Trust and the
subordination of the Class C
Certificates.
<PAGE>
COMPOSITION AND HISTORICAL PERFORMANCE OF THE SEARS PORTFOLIO
All of the information describing the composition and historical
performance of the open-end charge plan accounts set forth below reflects the
composition and historical performance of the Sears Portfolio, and not that of
the accounts from which receivables are included in the Trust (the "Accounts").
Composition of the Sears Portfolio
Composition of Accounts by Credit Limit
The credit accounts in the Sears Portfolio have the following
distributions of credit limits(1):
Percentage of Sears
Portfolio as of
Billing Cycles ended
Credit Limit in December 1995
-------------------- ---------------------
$ 0 - $ 99(2) . . . . . . . . . . . .10.3%
100 - 499. . . . . . . . . . . . . . 0.7%
500 - 999. . . . . . . . . . . . . . 6.0%
1,000 - 1,499. . . . . . . . . . . . . . 9.0%
1,500 - 1,999. . . . . . . . . . . . . . 9.9%
2,000 - 2,999. . . . . . . . . . . . . .21.2%
3,000 - 3,999. . . . . . . . . . . . . .16.8%
4,000 and over . . . . . . . . . . . . 26.1%
100.0%
_______________
(1) Information based on accounts with balances at any time in the twenty-
four months ended with the billing cycles ended in December 1995. Includes
accounts from Puerto Rico, which are not included in the Accounts.
(2) Zero credit limits may be imposed due to delinquency, upon customer
request, temporarily in the case of lost or stolen credit cards or under
other circumstances where obligor's credit may be in question. Specific
approval (which, in general, is automatic for accounts delinquent for up to
one billing cycle and automatically denied for accounts delinquent more
than two billing cycles) is required for purchases on an account with a
zero credit limit.
Largest States
The Sears Portfolio has not been concentrated geographically. As of
the billing cycles ended in December 1995, the five states with the largest
receivables balances and number of accounts were as follows(1):
<TABLE>
<CAPTION>
Sears Portfolio California Florida New York Pennsylvania Texas
- ------------------ ---------- -------- -------- ------------- -----
<S> <C> <C> <C> <C> <C>
% of active accounts 9.9% 6.8% 6.3% 6.3% 6.8%
% of balances 9.9% 7.5% 5.7% 5.7% 8.1%
<FN>
______________
(1) Excludes accounts from Puerto Rico, which were not included in the
Accounts.
</TABLE>
No other state accounted for more than 5% of the number of active
accounts in the Sears Portfolio or 5% of the balances as of the billing cycles
ended in December 1995.
Seasoning
More than 57% of the accounts in the Sears Portfolio were at least
five years old as of the billing cycles ended in December 1995. The
distribution of the age of accounts in the Sears Portfolio is as follows(1):
Percentage of Sears
Portfolio as of
Billing Cycles ended
Age of Accounts in December 1995
---------------- --------------------
Up to 1 year . . . . . . . . . . . . . . .12.9%
1-2 years. . . . . . . . . . . . . . . . .11.4%
2-3 years. . . . . . . . . . . . . . . . .10.5%
3-4 years. . . . . . . . . . . . . . . . . 4.9%
4-5 years. . . . . . . . . . . . . . . . . 3.0%
5-10 years . . . . . . . . . . . . . . . .16.6%
10 years and older . . . . . . . . . . . 40.7%
100.0%
_______________
(1) Information based on accounts with balances at any time in the twenty-
four months ended with the billing cycles ended in December 1995. Excludes
accounts from Puerto Rico, which were not included in the Accounts.
Summary Yield Information
The annualized aggregate monthly yield for the Sears Portfolio is
summarized as follows(1):
Twelve months
ended
September 30, 1996 1995 1994 1993
------------------- ------ ------ ------
Aggregate Monthly Yield........ 17.72% 17.36% 17.67% 17.65%
_______________
(1) The average aggregate monthly yield for the three-month period ended
September 30, 1996 was 17.89%. Aggregate monthly yield is the average of
monthly yields annualized for each period shown. Monthly yield is
calculated by dividing (x) monthly finance charges minus the amount of
finance charges billed to accounts that were charged-off as uncollectible
in such month ("Uncollected Finance Charges") by (y) the balance
outstanding as of the beginning of the month. If Uncollected Finance
Charges were not excluded from the calculation of monthly yield, the
annualized aggregate monthly yield for the three-month period ended
September 30, 1996, and for each of the twelve-month periods ended
September 30, 1996 and December 31, 1995, 1994 and 1993 would have been
18.43%, 18.18%, 17.75%, 18.03% and 18.02%, respectively. See footnote (1)
to the Summary Charge-Off and Delinquency Information table. Excludes
accounts from Puerto Rico, which were not included in the Accounts.
Summary Charge-Off and Delinquency Information
Charge-off and delinquency information with regard to the Sears
Portfolio is summarized as follows:
Twelve months
ended
September 30, 1996 1995 1994 1993
------------------ ----- ----- ------
Gross Charge-Offs as
a % of balances(1)....... 4.78% 3.88% 3.66% 3.72%
Recoveries as a
% of balances(1)(2)...... 0.78% 0.72% 0.67% 0.62%
Delinquencies as
a % of balances(3)....... 4.65% 3.87% 3.64% 3.65%
_______________
(1) The average gross charge-offs as a percentage of balances for the
three-month period ended September 30, 1996 was 5.47%. All rates shown are
unweighted averages of annualized monthly rates for the indicated periods.
The monthly rate is calculated by dividing the amount of charge-offs of
principal receivables or recoveries for each month by the balance
outstanding as of the beginning of the month and does not reflect
Uncollected Finance Charges. If gross charge-offs included Uncollected
Finance Charges, gross charge-offs as a percentage of balances for the
three-month period ended September 30, 1996, and for each of the twelve-
month periods ended September 30, 1996 and December 31, 1995, 1994 and 1993
would have been 6.01%, 5.24%, 4.27%, 4.02% and 4.09%, respectively. See
footnote (1) to the Summary Yield Information table. Excludes accounts
from Puerto Rico, which were not included in the Accounts.
(2) All recoveries with respect to charged-off receivables will be the
property of Sears, unless an election is made to include such amounts in
the Trust.
(3) The average delinquencies as a percentage of balances for the three-
month period ended September 30, 1996 was 5.07%. In general, an account is
considered delinquent when it is past due a total of three or more
scheduled monthly payments. Delinquencies as of the end of each month are
divided by balances at the beginning of each such month.
Summary Delinquency Aging Information
The aging of delinquent receivables with respect to the Sears
Portfolio is summarized as follows(1):
Twelve months
ended
September 30, 1996 1995 1994 1993
------------------ ----- ------ -----
Delinquencies as a % of
balances 60-89 days past due..... 1.58% 1.34% 1.31% 1.36%
90-119 days past due............. 1.08% 0.89% 0.83% 0.82%
120 days or more past due........ 1.99% 1.64% 1.50% 1.47%
------ ----- ----- -----
Total Delinquencies............... 4.65% 3.87% 3.64% 3.65%
_______________
(1) In general, an account is considered delinquent when it is past due a
total of three or more scheduled monthly payments. Delinquencies as of the
end of each month are divided by balances at the beginning of each such month.
Excludes accounts from Puerto Rico, which were not included in the
Accounts.
Summary Payment Rate Information
The rate of payments in the Sears Portfolio is summarized below as
follows(1):
Twelve months
ended
Payment Rates September 30, 1996 1995 1994 1993
- ------------- ------------------ ----- ----- -----
Average Monthly Rate........... 6.26% 6.48% 6.87% 7.20%
High Monthly Rate.............. 6.77% 7.09% 7.69% 7.85%
Low Monthly Rate............... 5.79% 6.07% 6.54% 6.70%
_______________
(1) Payment rate is the cash received during each group of billing cycles
divided by the balance outstanding as of the beginning of those cycles.
Excludes accounts from Puerto Rico, which were not included in the
Accounts.
