SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
_ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
Commission file number 33-79186-01
SEARS CREDIT ACCOUNT MASTER TRUST II
(Exact name of registrant as specified in its charter)
Illinois Not Applicable
(State of Organization) (I.R.S. Employer Identification No.)
c/o SRFG, Inc.
3711 Kennett Pike
Greenville, Delaware 19807
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (302)888-3176
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which each class
to be so registered is to be registered
None Not Applicable
<PAGE>
Securities registered pursuant to Section 12(g) of the Act:
7.00% Class A Series 1994-1 Master Trust Certificates
7.25% Class B Series 1994-1 Master Trust Certificates
7.25% Class A Series 1994-2 Master Trust Certificates
7.60% Class B Series 1994-2 Master Trust Certificates
8.10% Class A Series 1995-2 Master Trust Certificates
8.30% Class B Series 1995-2 Master Trust Certificates
7.00% Class A Series 1995-3 Master Trust Certificates
7.25% Class B Series 1995-3 Master Trust Certificates
6.25% Class A Series 1995-4 Master Trust Certificates
6.35% Class B Series 1995-4 Master Trust Certificates
6.05% Class A Series 1995-5 Master Trust Certificates
6.20% Class B Series 1995-5 Master Trust Certificates
6.20% Class A Series 1996-1 Master Trust Certificates
6.35% Class B Series 1996-1 Master Trust Certificates
6.50% Class A Series 1996-2 Master Trust Certificates
6.65% Class B Series 1996-2 Master Trust Certificates
7.00% Class A Series 1996-3 Master Trust Certificates
7.10% Class B Series 1996-3 Master Trust Certificates
6.45% Class A Series 1996-4 Master Trust Certificates
6.65% Class B Series 1996-4 Master Trust Certificates
6.20% Class A Series 1997-1 Master Trust Certificates
6.40% Class B Series 1997-1 Master Trust Certificates
(Title of Class)
Registrant (1) 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 (2) has been subject to such filing requirements for the past
90 days.
Yes x No
<PAGE>
PART I
Item 1. Business
The Sears Credit Account Master Trust II (the "Trust") was formed
pursuant to the Pooling and Servicing Agreement dated as of July 31,
1994 (the "Pooling and Servicing Agreement") among Sears, Roebuck and
Co. ("Sears") as Servicer, its wholly-owned subsidiary, SRFG, Inc.
("SRFG") as Seller, and The First National Bank of Chicago as trustee
(the "Trustee"). The Trust's only business is to act as a passive
conduit to permit investment in a pool of retail consumer receivables.
Item 2. Properties
The property of the Trust includes a portfolio of receivables (the
"Receivables") arising in selected accounts under open-end credit plans
of Sears (the "Accounts") and all monies received in payment of the
Receivables. At the time of the Trust's formation, and on certain
Addition Dates thereafter, Sears sold and contributed to SRFG, which in
turn conveyed to the Trust, all Receivables existing under the Accounts
as of the end of certain of Sears regular billing cycles ending in
September and November 1989, June 1990, January, February, October and
November 1991, December 1992, February 1993, February 1994 and February
and June 1995 and all Receivables arising under the Accounts from time
to time thereafter until the termination of the Trust. Information
related to the performance of the Receivables during 1997 is set forth
in the ANNUAL STATEMENTS filed as Exhibits 21(a) to 21(k) to this Annual
Report on Form 10-K.
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
None
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
Investor Certificates are held and delivered in book-entry form
through the facilities of The Depository Trust Company ("DTC"), a
"clearing agency" registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934, as amended. The sole definitive
Investor Certificate is held by Cede & Co., the nominee of DTC.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None
PART III
Item 12. Security Ownership of Certain Beneficial Owners and
Management
As of March 15, 1998, 100% of the Investor Certificates were held
in the nominee name of Cede & Co. for beneficial owners.
SRFG, as of March 15, 1998, owned 100% of the Seller Certificate,
which represented beneficial ownership of a residual interest in the
assets of the Trust as provided in the Pooling and Servicing Agreement.
Item 13. Certain Relationships and Related Transactions
None
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K
(a) Exhibits:
21. 1997 ANNUAL STATEMENTS prepared by the
Servicer.
(a) Series 1994-1
(b) Series 1994-2
(c) Series 1995-2
(d) Series 1995-3
(e) Series 1995-4
(f) Series 1995-5
(g) Series 1996-1
(h) Series 1996-2
(i) Series 1996-3
(j) Series 1996-4
(k) Series 1997-1
28. ANNUAL INDEPENDENT ACCOUNTANTS' REPORT
pursuant to Section 3.06 of the Pooling
and Servicing Agreement.
(a) Independent Auditors' Report
(b) Independent Accountants' Report
(b) Reports on Form 8-K:
Current reports on Form 8-K are filed on or before the
Distribution Date each month (on, or the first
business day after, the 15th of the month). The
reports include as an exhibit, the MONTHLY INVESTOR
CERTIFICATEHOLDERS' STATEMENT. Current Reports on
Form 8-K were filed on October 15, 1997, November 17,
1997, and December 15, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 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: SRFG, Inc.
(Originator of the Trust)
By: /S/George F. Slook
George F. Slook
President
Dated: March 26, 1998
<PAGE>
EXHIBIT INDEX
Exhibit No.
21. 1997 ANNUAL STATEMENTS prepared by the
Servicer.
(a) Series 1994-1
(b) Series 1994-2
(c) Series 1995-2
(d) Series 1995-3
(e) Series 1995-4
(f) Series 1995-5
(g) Series 1996-1
(h) Series 1996-2
(i) Series 1996-3
(j) Series 1996-4
(k) Series 1997-1
28. ANNUAL INDEPENDENT AUDITORS' REPORT
pursuant to Section 3.06 of the Pooling
and Servicing Agreement.
(a) Independent Auditors' Report
(b) Independent Accountants' Report
Exhibit 21(a)
SEARS CREDIT ACCOUNT MASTER TRUST II
SERIES 1994-1
1997 ANNUAL STATEMENT
Pursuant to the terms of the letter issued by the Securities and
Exchange Commission dated June 30, 1995 (granting relief
to the Trust from certain reporting requirements of the Securities
Exchange Act of 1934, as amended), aggregated information
regarding the performance of Accounts and payments to Investor
Certificateholders in respect of the Due Periods related to the
twelve Distribution Dates which occurred in 1997 is set forth below.
1) The total amount of the distribution to Investor
Certificateholders during 1997, per $1,000 interest.....
Class A $70.00
Class B $72.50
Class C $0.00
2) The amount of the distribution set forth in paragraph
1 above in respect of interest on the Investor
Certificates, per $1,000 interest.....................
Class A $70.00
Class B $72.50
Class C $0.00
3) The amount of the distribution set forth in paragraph
1 above in respect of principal on the Investor
Certificates, per $1,000 interest.....................
Class A $0.00
Class B $0.00
Class C $0.00
4) The aggregate amount of Collections of Principal
Receivables processed during the related Due
Periods............................................$5,294,545,300.27
5) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods................................$1,764,065,292.16
6) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Investor Certificates.... $4,136,462,969.48
7) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Investor Certificates...............$1,376,652,766.59
8) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Seller Certificate...............$1,158,082,330.79
9) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Seller Certificate.................. $387,412,525.67
10)The excess of the Investor Charged-Off Amount
over the sum of (i) payments in respect of the
Available Subordinated Amount and (ii) Excess
Servicing, if any (an "Investor Loss"), per
$1,000 interest................................... $0.00
11)The aggregate amount of Investor Losses in
the Trust as of the end of the day on December
15,1997, per $1,000 interest....................... $0.00
12)The total reimbursed to the Trust from
the sum of the Available subordinated
Amount and Excess Servicing, if any, in
respect of Investor Losses, per $1,000
interest........................................... $0.00
13)The amount of the Investor Monthly Servicing
Fee payable by the Trust to the Servicer......... $137,848,372.83
14)The Controlled Amortization Amount Shortfall, as
of the end of the reportable year................. $0.00
Exhibit 21(b)
SEARS CREDIT ACCOUNT MASTER TRUST II
SERIES 1994-2
1997 ANNUAL STATEMENT
Pursuant to the terms of the letter issued by the Securities and
Exchange Commission dated June 30, 1995 (granting relief
to the Trust from certain reporting requirements of the Securities
Exchange Act of 1934, as amended), aggregated information
regarding the performance of Accounts and payments to Investor
Certificateholders in respect of the Due Periods related to the
twelve Distribution Dates which occurred in 1997 is set forth below.
1) The total amount of the distribution to Investor
Certificateholders during 1997, per $1,000 interest.....
Class A $883.18
Class B $76.00
Class C $402.73
2) The amount of the distribution set forth in paragraph
1 above in respect of interest on the Investor
Certificates, per $1,000 interest.....................
Class A $49.84
Class B $76.00
Class C $0.00
3) The amount of the distribution set forth in paragraph
1 above in respect of principal on the Investor
Certificates, per $1,000 interest.....................
Class A $833.33
Class B $0.00
Class C $402.73
4) The aggregate amount of Collections of Principal
Receivables processed during the related Due
Periods............................................$5,294,545,300.27
5) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods................................$1,764,065,292.16
6) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Investor Certificates.... $4,136,462,969.48
7) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Investor Certificates...............$1,376,652,766.59
8) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Seller Certificate...............$1,158,082,330.79
9) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Seller Certificate.................. $387,412,525.67
10)The excess of the Investor Charged-Off Amount
over the sum of (i) payments in respect of the
Available Subordinated Amount and (ii) Excess
Servicing, if any (an "Investor Loss"), per
$1,000 interest................................... $0.00
11)The aggregate amount of Investor Losses in
the Trust as of the end of the day on December
15,1997, per $1,000 interest....................... $0.00
12)The total reimbursed to the Trust from
the sum of the Available subordinated
Amount and Excess Servicing, if any, in
respect of Investor Losses, per $1,000
interest........................................... $0.00
13)The amount of the Investor Monthly Servicing
Fee payable by the Trust to the Servicer......... $137,848,372.83
14)The Controlled Amortization Amount Shortfall, as
of the end of the reportable year................. $0.00
Exhibit 21(c)
SEARS CREDIT ACCOUNT MASTER TRUST II
SERIES 1995-2
1997 ANNUAL STATEMENT
Pursuant to the terms of the letter issued by the Securities and
Exchange Commission dated June 30, 1995 (granting relief
to the Trust from certain reporting requirements of the Securities
Exchange Act of 1934, as amended), aggregated information
regarding the performance of Accounts and payments to Investor
Certificateholders in respect of the Due Periods related to the
twelve Distribution Dates which occurred in 1997 is set forth below.
1) The total amount of the distribution to Investor
Certificateholders during 1997, per $1,000 interest.....
Class A $81.00
Class B $83.00
Class C $0.00
2) The amount of the distribution set forth in paragraph
1 above in respect of interest on the Investor
Certificates, per $1,000 interest.....................
Class A $81.00
Class B $83.00
Class C $0.00
3) The amount of the distribution set forth in paragraph
1 above in respect of principal on the Investor
Certificates, per $1,000 interest.....................
Class A $0.00
Class B $0.00
Class C $0.00
4) The aggregate amount of Collections of Principal
Receivables processed during the related Due
Periods............................................$5,294,545,300.27
5) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods................................$1,764,065,292.16
6) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Investor Certificates.... $4,136,462,969.48
7) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Investor Certificates...............$1,376,652,766.59
8) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Seller Certificate...............$1,158,082,330.79
9) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Seller Certificate.................. $387,412,525.67
10)The excess of the Investor Charged-Off Amount
over the sum of (i) payments in respect of the
Available Subordinated Amount and (ii) Excess
Servicing, if any (an "Investor Loss"), per
$1,000 interest................................... $0.00
11)The aggregate amount of Investor Losses in
the Trust as of the end of the day on December
15,1997, per $1,000 interest....................... $0.00
12)The total reimbursed to the Trust from
the sum of the Available subordinated
Amount and Excess Servicing, if any, in
respect of Investor Losses, per $1,000
interest........................................... $0.00
13)The amount of the Investor Monthly Servicing
Fee payable by the Trust to the Servicer......... $137,848,372.83
14)The Controlled Amortization Amount Shortfall, as
of the end of the reportable year................. $0.00
Exhibit 21(d)
SEARS CREDIT ACCOUNT MASTER TRUST II
SERIES 1995-3
1997 ANNUAL STATEMENT
Pursuant to the terms of the letter issued by the Securities and
Exchange Commission dated June 30, 1995 (granting relief
to the Trust from certain reporting requirements of the Securities
Exchange Act of 1934, as amended), aggregated information
regarding the performance of Accounts and payments to Investor
Certificateholders in respect of the Due Periods related to the
twelve Distribution Dates which occurred in 1997 is set forth below.
1) The total amount of the distribution to Investor
Certificateholders during 1997, per $1,000 interest.....
Class A $70.00
Class B $72.50
Class C $0.00
2) The amount of the distribution set forth in paragraph
1 above in respect of interest on the Investor
Certificates, per $1,000 interest.....................
Class A $70.00
Class B $72.50
Class C $0.00
3) The amount of the distribution set forth in paragraph
1 above in respect of principal on the Investor
Certificates, per $1,000 interest.....................
Class A $0.00
Class B $0.00
Class C $0.00
4) The aggregate amount of Collections of Principal
Receivables processed during the related Due
Periods............................................$5,294,545,300.27
5) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods................................$1,764,065,292.16
6) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Investor Certificates.... $4,136,462,969.48
7) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Investor Certificates...............$1,376,652,766.59
8) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Seller Certificate...............$1,158,082,330.79
9) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Seller Certificate.................. $387,412,525.67
10)The excess of the Investor Charged-Off Amount
over the sum of (i) payments in respect of the
Available Subordinated Amount and (ii) Excess
Servicing, if any (an "Investor Loss"), per
$1,000 interest................................... $0.00
11)The aggregate amount of Investor Losses in
the Trust as of the end of the day on December
15,1997, per $1,000 interest....................... $0.00
12)The total reimbursed to the Trust from
the sum of the Available subordinated
Amount and Excess Servicing, if any, in
respect of Investor Losses, per $1,000
interest........................................... $0.00
13)The amount of the Investor Monthly Servicing
Fee payable by the Trust to the Servicer......... $137,848,372.83
14)The Controlled Amortization Amount Shortfall, as
of the end of the reportable year................. $0.00
Exhibit 21(e)
SEARS CREDIT ACCOUNT MASTER TRUST II
SERIES 1995-4
1997 ANNUAL STATEMENT
Pursuant to the terms of the letter issued by the Securities and
Exchange Commission dated June 30, 1995 (granting relief
to the Trust from certain reporting requirements of the Securities
Exchange Act of 1934, as amended), aggregated information
regarding the performance of Accounts and payments to Investor
Certificateholders in respect of the Due Periods related to the
twelve Distribution Dates which occurred in 1997 is set forth below.
1) The total amount of the distribution to Investor
Certificateholders during 1997, per $1,000 interest.....
Class A $62.50
Class B $63.50
Class C $0.00
2) The amount of the distribution set forth in paragraph
1 above in respect of interest on the Investor
Certificates, per $1,000 interest.....................
Class A $62.50
Class B $63.50
Class C $0.00
3) The amount of the distribution set forth in paragraph
1 above in respect of principal on the Investor
Certificates, per $1,000 interest.....................
Class A $0.00
Class B $0.00
Class C $0.00
4) The aggregate amount of Collections of Principal
Receivables processed during the related Due
Periods............................................$5,294,545,300.27
5) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods................................$1,764,065,292.16
6) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Investor Certificates.... $4,136,462,969.48
7) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Investor Certificates...............$1,376,652,766.59
8) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Seller Certificate...............$1,158,082,330.79
9) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Seller Certificate.................. $387,412,525.67
10)The excess of the Investor Charged-Off Amount
over the sum of (i) payments in respect of the
Available Subordinated Amount and (ii) Excess
Servicing, if any (an "Investor Loss"), per
$1,000 interest................................... $0.00
11)The aggregate amount of Investor Losses in
the Trust as of the end of the day on December
15,1997, per $1,000 interest....................... $0.00
12)The total reimbursed to the Trust from
the sum of the Available subordinated
Amount and Excess Servicing, if any, in
respect of Investor Losses, per $1,000
interest........................................... $0.00
13)The amount of the Investor Monthly Servicing
Fee payable by the Trust to the Servicer......... $137,848,372.83
14)The Controlled Amortization Amount Shortfall, as
of the end of the reportable year................. $0.00
Exhibit 21(f)
SEARS CREDIT ACCOUNT MASTER TRUST II
SERIES 1995-5
1997 ANNUAL STATEMENT
Pursuant to the terms of the letter issued by the Securities and
Exchange Commission dated June 30, 1995 (granting relief
to the Trust from certain reporting requirements of the Securities
Exchange Act of 1934, as amended), aggregated information
regarding the performance of Accounts and payments to Investor
Certificateholders in respect of the Due Periods related to the
twelve Distribution Dates which occurred in 1997 is set forth below.
1) The total amount of the distribution to Investor
Certificateholders during 1997, per $1,000 interest.....
Class A $60.50
Class B $62.00
Class C $0.00
2) The amount of the distribution set forth in paragraph
1 above in respect of interest on the Investor
Certificates, per $1,000 interest.....................
Class A $60.50
Class B $62.00
Class C $0.00
3) The amount of the distribution set forth in paragraph
1 above in respect of principal on the Investor
Certificates, per $1,000 interest.....................
Class A $0.00
Class B $0.00
Class C $0.00
4) The aggregate amount of Collections of Principal
Receivables processed during the related Due
Periods............................................$5,294,545,300.27
5) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods................................$1,764,065,292.16
6) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Investor Certificates.... $4,136,462,969.48
7) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Investor Certificates...............$1,376,652,766.59
8) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Seller Certificate...............$1,158,082,330.79
9) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Seller Certificate.................. $387,412,525.67
10)The excess of the Investor Charged-Off Amount
over the sum of (i) payments in respect of the
Available Subordinated Amount and (ii) Excess
Servicing, if any (an "Investor Loss"), per
$1,000 interest................................... $0.00
11)The aggregate amount of Investor Losses in
the Trust as of the end of the day on December
15,1997, per $1,000 interest....................... $0.00
12)The total reimbursed to the Trust from
the sum of the Available subordinated
Amount and Excess Servicing, if any, in
respect of Investor Losses, per $1,000
interest........................................... $0.00
13)The amount of the Investor Monthly Servicing
Fee payable by the Trust to the Servicer......... $137,848,372.83
14)The Controlled Amortization Amount Shortfall, as
of the end of the reportable year................. $0.00
Exhibit 21(g)
SEARS CREDIT ACCOUNT MASTER TRUST II
SERIES 1996-1
1997 ANNUAL STATEMENT
Pursuant to the terms of the letter issued by the Securities and
Exchange Commission dated June 30, 1995 (granting relief
to the Trust from certain reporting requirements of the Securities
Exchange Act of 1934, as amended), aggregated information
regarding the performance of Accounts and payments to Investor
Certificateholders in respect of the Due Periods related to the
twelve Distribution Dates which occurred in 1997 is set forth below.
1) The total amount of the distribution to Investor
Certificateholders during 1997, per $1,000 interest.....
Class A $62.00
Class B $63.50
Class C $0.00
2) The amount of the distribution set forth in paragraph
1 above in respect of interest on the Investor
Certificates, per $1,000 interest.....................
Class A $62.00
Class B $63.50
Class C $0.00
3) The amount of the distribution set forth in paragraph
1 above in respect of principal on the Investor
Certificates, per $1,000 interest.....................
Class A $0.00
Class B $0.00
Class C $0.00
4) The aggregate amount of Collections of Principal
Receivables processed during the related Due
Periods............................................$5,294,545,300.27
5) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods................................$1,764,065,292.16
6) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Investor Certificates.... $4,136,462,969.48
7) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Investor Certificates...............$1,376,652,766.59
8) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Seller Certificate...............$1,158,082,330.79
9) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Seller Certificate.................. $387,412,525.67
10)The excess of the Investor Charged-Off Amount
over the sum of (i) payments in respect of the
Available Subordinated Amount and (ii) Excess
Servicing, if any (an "Investor Loss"), per
$1,000 interest................................... $0.00
11)The aggregate amount of Investor Losses in
the Trust as of the end of the day on December
15,1997, per $1,000 interest....................... $0.00
12)The total reimbursed to the Trust from
the sum of the Available subordinated
Amount and Excess Servicing, if any, in
respect of Investor Losses, per $1,000
interest........................................... $0.00
13)The amount of the Investor Monthly Servicing
Fee payable by the Trust to the Servicer......... $137,848,372.83
14)The Controlled Amortization Amount Shortfall, as
of the end of the reportable year................. $0.00
Exhibit 21(h)
SEARS CREDIT ACCOUNT MASTER TRUST II
SERIES 1996-2
1997 ANNUAL STATEMENT
Pursuant to the terms of the letter issued by the Securities and
Exchange Commission dated June 30, 1995 (granting relief
to the Trust from certain reporting requirements of the Securities
Exchange Act of 1934, as amended), aggregated information
regarding the performance of Accounts and payments to Investor
Certificateholders in respect of the Due Periods related to the
twelve Distribution Dates which occurred in 1997 is set forth below.
1) The total amount of the distribution to Investor
Certificateholders during 1997, per $1,000 interest.....
Class A $65.00
Class B $66.50
Class C $0.00
2) The amount of the distribution set forth in paragraph
1 above in respect of interest on the Investor
Certificates, per $1,000 interest.....................
Class A $65.00
Class B $66.50
Class C $0.00
3) The amount of the distribution set forth in paragraph
1 above in respect of principal on the Investor
Certificates, per $1,000 interest.....................
Class A $0.00
Class B $0.00
Class C $0.00
4) The aggregate amount of Collections of Principal
Receivables processed during the related Due
Periods............................................$5,294,545,300.27
5) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods................................$1,764,065,292.16
6) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Investor Certificates.... $4,136,462,969.48
7) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Investor Certificates...............$1,376,652,766.59
8) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Seller Certificate...............$1,158,082,330.79
9) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Seller Certificate.................. $387,412,525.67
10)The excess of the Investor Charged-Off Amount
over the sum of (i) payments in respect of the
Available Subordinated Amount and (ii) Excess
Servicing, if any (an "Investor Loss"), per
$1,000 interest................................... $0.00
11)The aggregate amount of Investor Losses in
the Trust as of the end of the day on December
15,1997, per $1,000 interest....................... $0.00
12)The total reimbursed to the Trust from
the sum of the Available subordinated
Amount and Excess Servicing, if any, in
respect of Investor Losses, per $1,000
interest........................................... $0.00
13)The amount of the Investor Monthly Servicing
Fee payable by the Trust to the Servicer......... $137,848,372.83
14)The Controlled Amortization Amount Shortfall, as
of the end of the reportable year................. $0.00
Exhibit 21(i)
SEARS CREDIT ACCOUNT MASTER TRUST II
SERIES 1996-3
1997 ANNUAL STATEMENT
Pursuant to the terms of the letter issued by the Securities and
Exchange Commission dated June 30, 1995 (granting relief
to the Trust from certain reporting requirements of the Securities
Exchange Act of 1934, as amended), aggregated information
regarding the performance of Accounts and payments to Investor
Certificateholders in respect of the Due Periods related to the
twelve Distribution Dates which occurred in 1997 is set forth below.
1) The total amount of the distribution to Investor
Certificateholders during 1997, per $1,000 interest.....
Class A $70.00
Class B $71.00
Class C $0.00
2) The amount of the distribution set forth in paragraph
1 above in respect of interest on the Investor
Certificates, per $1,000 interest.....................
Class A $70.00
Class B $71.00
Class C $0.00
3) The amount of the distribution set forth in paragraph
1 above in respect of principal on the Investor
Certificates, per $1,000 interest.....................
Class A $0.00
Class B $0.00
Class C $0.00
4) The aggregate amount of Collections of Principal
Receivables processed during the related Due
Periods............................................$5,294,545,300.27
5) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods................................$1,764,065,292.16
6) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Investor Certificates.... $4,136,462,969.48
7) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Investor Certificates...............$1,376,652,766.59
8) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Seller Certificate...............$1,158,082,330.79
9) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Seller Certificate.................. $387,412,525.67
10)The excess of the Investor Charged-Off Amount
over the sum of (i) payments in respect of the
Available Subordinated Amount and (ii) Excess
Servicing, if any (an "Investor Loss"), per
$1,000 interest................................... $0.00
11)The aggregate amount of Investor Losses in
the Trust as of the end of the day on December
15,1997, per $1,000 interest....................... $0.00
12)The total reimbursed to the Trust from
the sum of the Available subordinated
Amount and Excess Servicing, if any, in
respect of Investor Losses, per $1,000
interest........................................... $0.00
13)The amount of the Investor Monthly Servicing
Fee payable by the Trust to the Servicer......... $137,848,372.83
14)The Controlled Amortization Amount Shortfall, as
of the end of the reportable year................. $0.00
Exhibit 21(j)
SEARS CREDIT ACCOUNT MASTER TRUST II
SERIES 1996-4
1997 ANNUAL STATEMENT
Pursuant to the terms of the letter issued by the Securities and
Exchange Commission dated June 30, 1995 (granting relief
to the Trust from certain reporting requirements of the Securities
Exchange Act of 1934, as amended), aggregated information
regarding the performance of Accounts and payments to Investor
Certificateholders in respect of the Due Periods related to the
twelve Distribution Dates which occurred in 1997 is set forth below.
1) The total amount of the distribution to Investor
Certificateholders during 1997, per $1,000 interest.....
Class A $64.50
Class B $66.50
Class C $0.00
2) The amount of the distribution set forth in paragraph
1 above in respect of interest on the Investor
Certificates, per $1,000 interest.....................
Class A $64.50
Class B $66.50
Class C $0.00
3) The amount of the distribution set forth in paragraph
1 above in respect of principal on the Investor
Certificates, per $1,000 interest.....................
Class A $0.00
Class B $0.00
Class C $0.00
4) The aggregate amount of Collections of Principal
Receivables processed during the related Due
Periods............................................$5,294,545,300.27
5) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods................................$1,764,065,292.16
6) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Investor Certificates.... $4,136,462,969.48
7) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Investor Certificates...............$1,376,652,766.59
8) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Seller Certificate...............$1,158,082,330.79
9) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Seller Certificate.................. $387,412,525.67
10)The excess of the Investor Charged-Off Amount
over the sum of (i) payments in respect of the
Available Subordinated Amount and (ii) Excess
Servicing, if any (an "Investor Loss"), per
$1,000 interest................................... $0.00
11)The aggregate amount of Investor Losses in
the Trust as of the end of the day on December
15,1997, per $1,000 interest....................... $0.00
12)The total reimbursed to the Trust from
the sum of the Available subordinated
Amount and Excess Servicing, if any, in
respect of Investor Losses, per $1,000
interest........................................... $0.00
13)The amount of the Investor Monthly Servicing
Fee payable by the Trust to the Servicer......... $137,848,372.83
14)The Controlled Amortization Amount Shortfall, as
of the end of the reportable year................. $0.00
Exhibit 21(k)
SEARS CREDIT ACCOUNT MASTER TRUST II
SERIES 1997-1
1997 ANNUAL STATEMENT
Pursuant to the terms of the letter issued by the Securities and
Exchange Commission dated June 30, 1995 (granting relief
to the Trust from certain reporting requirements of the Securities
Exchange Act of 1934, as amended), aggregated information
regarding the performance of Accounts and payments to Investor
Certificateholders in respect of the Due Periods related to the
five Distribution Dates which occurred in 1997 is set forth below.
1) The total amount of the distribution to Investor
Certificateholders during 1997, per $1,000 interest.....
Class A $23.25
Class B $24.00
Class C $0.00
2) The amount of the distribution set forth in paragraph
1 above in respect of interest on the Investor
Certificates, per $1,000 interest.....................
Class A $23.25
Class B $24.00
Class C $0.00
3) The amount of the distribution set forth in paragraph
1 above in respect of principal on the Investor
Certificates, per $1,000 interest.....................
Class A $0.00
Class B $0.00
Class C $0.00
4) The aggregate amount of Collections of Principal
Receivables processed during the related Due
Periods............................................$5,294,545,300.27
5) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods................................$1,764,065,292.16
6) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Investor Certificates.... $4,136,462,969.48
7) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Investor Certificates...............$1,376,652,766.59
8) The aggregate amount of Collections of
Principal Receivables processed during the
related Due Periods which were allocated
in respect of the Seller Certificate...............$1,158,082,330.79
9) The aggregate amount of Collections of Finance
Charge Receivables processed during the
related Due Periods which were allocated in
respect of the Seller Certificate.................. $387,412,525.67
10)The excess of the Investor Charged-Off Amount
over the sum of (i) payments in respect of the
Available Subordinated Amount and (ii) Excess
Servicing, if any (an "Investor Loss"), per
$1,000 interest................................... $0.00
11)The aggregate amount of Investor Losses in
the Trust as of the end of the day on December
15,1997, per $1,000 interest....................... $0.00
12)The total reimbursed to the Trust from
the sum of the Available subordinated
Amount and Excess Servicing, if any, in
respect of Investor Losses, per $1,000
interest........................................... $0.00
13)The amount of the Investor Monthly Servicing
Fee payable by the Trust to the Servicer......... $137,848,372.83
14)The Controlled Amortization Amount Shortfall, as
of the end of the reportable year................. $0.00
Exhibit 28 a
INDEPENDENT AUDITORS' REPORT
Sears, Roebuck and Co.
Hoffman Estates, Illinois
We have audited, in accordance with generally accepted auditing standards,
the consolidated balance sheet of Sears, Roebuck and Co. (the "Company") as
of January 3, 1998, and the related consolidated statements of income,
stockholders' equity, and cash flows for the fiscal year then ended, and
have issued our report thereon dated February 20, 1998, which expresses an
unqualified opinion and includes an explanatory paragraph related to the
Company changing its method of accounting for sales of securitized accounts
receivable as required by Statement of Financial Accounting Standards No.
125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities."
In connection with our audit, nothing came to our attention that caused us
to believe that the Company failed to comply with the terms, covenants,
provisions or conditions of Sections 3.02, 4.03, 4.04, 4.05, 4.06 and 8.07
of the Pooling and Servicing Agreement dated July 31, 1994 (as amended), by
and among the Company (as Servicer), SRFG, Inc. ("SRFG," as Seller) and The
First National Bank of Chicago (as Trustee) related to Sears Credit Account
Master Trust II, insofar as they relate to financial and accounting matters.
However, our audit was not directed primarily toward obtaining knowledge of
noncompliance with such Sections.
This report is intended solely for the information and use of the board of
directors and management of the Company, SRFG and the Trustee and should not
be used for any other purpose.
February 20, 1998
Exhibit 28 b
INDEPENDENT ACCOUNTANTS' REPORT
Sears, Roebuck and Co.
Hoffman Estates, Illinois
We have examined management's assertion, included in the
accompanying MANAGEMENT'S REPORT ON INTERNAL CONTROL RELATED TO
SERVICING PROCEDURES, that as of December 31, 1997 Sears,
Roebuck and Co. (the "Company") maintained an effective
internal control structure over the servicing and financial
reporting procedures provided to Sears Credit Account Master
Trust II (the "Trust") under the terms of the Pooling and
Servicing Agreement dated July 31, 1994, as amended, by and
among the Company (as Servicer), SRFG, Inc. (as Seller) and
the First National Bank of Chicago (as Trustee), insofar as
such structure relates to the prevention and detection of
errors or irregularities in amounts that would be material
to the assets of the Trust. This assertion is the
responsibility of the Company's management. Our
responsibility is to express an opinion on the assertion
based on our examination.
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 control structure as it
relates to the servicing and financial reporting procedures
performed by the Company, as Servicer, under the applicable
sections of the Agreement, 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 the inherent limitations in any internal control
structure, errors or irregularities may occur and not be
detected. Also, projections of any evaluation of the
internal control structure to future periods are subject to
the risk that the internal 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 the Company
maintained an effective internal control structure over the
servicing and financial reporting procedures provided to the
<PAGE>
Trust as of December 31, 1997, insofar as such structure
relates to the prevention and detection of errors or
irregularities in amounts that would be material to the
assets of the Trust, is fairly stated, in all material
respects, based upon criteria established by "Internal
Control - Integrated Framework" issued by the Committee of
Sponsoring Organizations of the Treadway Commission.
February 23, 1998
<PAGE>
MANAGEMENT'S REPORT ON INTERNAL CONTROL RELATED TO SERVICING
PROCEDURES
The management of Sears, Roebuck and Co. (the "Company") is
responsible for establishing and maintaining an effective
internal control structure over the servicing and financial
reporting procedures provided by the Company, as Servicer,
to Sears Credit Account Master Trust II (the "Trust"), under
the terms of the Pooling and Servicing Agreement (the
"Agreement") dated July 31, 1994, as amended and
supplemented, by and among the Company, SRFG, Inc., as
Seller, and The First National Bank of Chicago, as Trustee.
There are inherent limitations in the effectiveness of any
structure of internal control, including the possibility of
human error and the circumvention or overriding of controls.
Accordingly, even an effective internal control structure
can provide only reasonable assurance with respect to the
servicing and financial reporting procedures provided by the
Company.
The Company's assessment of its internal control structure
is based on criteria for effective internal control
described in Internal Control-Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway
Commission. Management believes that the Company maintained
an effective internal control structure over the servicing
and financial reporting procedures provided to the Trust
under the terms of the Agreement as of December 31, 1997,
insofar as such structure relates to the prevention and
detection of errors or irregularities in amounts that would
be material to the assets of the Trust.
February 23, 1998
/s/Gary L. Crittenden
Gary L. Crittenden
Executive Vice President and Chief Financial Officer
/s/ Alan J. Lacy
Alan J. Lacy
President, Credit
