<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus 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.
File Pursuant to Rule 424(a)
Registration No. 333-08701
SUBJECT TO COMPLETION OCTOBER ___, 1996
PRELIMINARY
PROSPECTUS
_____% TRADE TRUST CERTIFICATES, SERIES 1996-A
EVIDENCING INTERESTS IN LOAN NOTES GUARANTEED BY THE
EXPORT-IMPORT BANK OF THE UNITED STATES
Each of the Certificates offered hereby will evidence an undivided
fractional interest in U.S. Trade Trust Series 1996-A (the "Trust") to be formed
pursuant to a Supplemental Trust Agreement dated as of October 1, 1996,
incorporating therein the Standard Terms and Conditions of Trust Agreement dated
as of January 1, 1995 (together, as the same may be amended from time to time,
the "Trust Agreement") between U.S. Trade Funding Corp., a Delaware corporation
(the "Company"), LaSalle National Bank, as trustee (the "Trustee") and ABN AMRO
Bank N.V., as servicer (in such capacity, the "Servicer") pursuant to which the
Company is entitled to cause the issuance of certain securities. The assets of
the Trust will consist of two Loan Notes (the "Loan Notes"), payable in U.S.
Dollars, of the foreign borrower referred to herein (the "Borrower"), which will
be conveyed to the Trust by the Company. The Borrower was formed for the purpose
of leasing aircraft to China Yunnan Airlines (the "Lessee"). The aggregate
amount of Certificates sold pursuant to this offering, which will be determined
by the aggregate principal amount of the Loan Notes issued, is expected to be
$101,672,199.30. The Loan Notes were originated by ABN AMRO Bank N.V. (in such
capacity, the "Seller") who loaned amounts to the Borrower pursuant to a Loan
Agreement (defined herein). The Loan Notes will be sold by the Seller to the
Company on the date of issuance of the Certificates pursuant to a Purchase
Agreement dated as of January 1, 1995 by and between the Seller and the Company
(the "Purchase Agreement") and will be conveyed by, or at the direction of, the
Company to the Trust on the date the Certificates are issued. The Servicer will
service the Loans represented by the Loan Notes held by the Trust pursuant to a
Servicing Agreement among the Servicer, the Trustee and the Company.
PAYMENT OF 100% OF ALL SCHEDULED AMOUNTS OF PRINCIPAL OF AND INTEREST ON
THE LOAN NOTES WILL BE GUARANTEED BY THE EXPORT-IMPORT BANK OF THE UNITED STATES
("EXIMBANK"), WHICH GUARANTEE IS BACKED BY THE FULL FAITH AND CREDIT OF THE
UNITED STATES OF AMERICA. THE ATTORNEY GENERAL OF THE UNITED STATES OF AMERICA
HAS STATED IN AN OPINION DATED SEPTEMBER 30, 1966 THAT EXIMBANK'S CONTRACTUAL
LIABILITIES CONSTITUTE GENERAL OBLIGATIONS OF THE UNITED STATES OF AMERICA
BACKED BY ITS FULL FAITH AND CREDIT AND THAT PERSONS IN WHOSE FAVOR EXIMBANK HAS
INCURRED CONTRACTUAL LIABILITIES IN ACCORDANCE WITH LAW "HAVE ACQUIRED VALID
GENERAL OBLIGATIONS OF THE UNITED STATES, AND ARE THEREFORE IN A POSITION TO
REACH BEYOND EXIMBANK AND ITS ASSETS TO THE UNITED STATES FOR A SOURCE OF
PAYMENT, IF NECESSARY." THE CERTIFICATES WILL NOT BE DIRECTLY GUARANTEED BY
EXIMBANK AND THERE WILL BE NO DIRECT CONTRACTUAL LIABILITY OF EXIMBANK TO ANY
HOLDER OF A CERTIFICATE.
Eximbank will not be required to make payment pursuant to the Eximbank
Guarantee with respect to a default in payment by the Borrower on a Loan Note
unless the Trustee makes written demand on Eximbank within 150 calendar days of
the date on which the payment in default was due and on such other parties at
such times described herein. If the Trustee fails to make demand for payment on
Eximbank within such 150-day period, the Trustee will be unconditionally
obligated to pay such amount in default to the Trust.
The Trust will benefit from an irrevocable revolving liquidity facility
(the "Liquidity Facility") arranged by the Company with ABN AMRO Bank N.V. in
order to provide for the timely payment of principal and interest on the
Certificates on any Payment Date on which the Borrower defaults in the payment
of amounts due under a Loan Note.
Interest on the Certificates will accrue from and including October 25,
1996 and will be payable semi-annually on each February 15, and August 15
(unless such day is not a Business Day as defined herein), commencing on
February 15, 1997 and ending on August 15, 2008. Principal will be payable in
24 semi-annual installments on such payment dates. The Certificates will be
represented by a single global Certificate registered in the name of a nominee
of The Depository Trust Company ("DTC").
The Certificates will not be subject to prepayment or acceleration under
any circumstances.
The Underwriter intends but is not obligated to make a market in the
Certificates. There can be no assurance that a secondary market will develop
or, if a secondary market does develop, that it will continue.
_________________________________
THE CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE ASSETS OF THE TRUST
ONLY. THE CERTIFICATES ARE NOT OBLIGATIONS OF OR GUARANTEED BY EXIMBANK, THE
UNITED STATES OF AMERICA OR ANY OTHER GOVERNMENTAL AGENCY NOR ARE THEY
OBLIGATIONS OF OR GUARANTEED BY THE BORROWER, THE LESSEE, THE SERVICER, THE
LIQUIDITY PROVIDER, THE COMPANY, THE TRUSTEE OR ANY AFFILIATE OF THE FOREGOING.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
_________________________________
<TABLE>
<CAPTION>
===============================================================================
Initial
Public Proceeds
Principal Offering Underwriting to the
Amount Price Commission Trust(1)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
___% Trade Trust
Certificates, Series
1996-A..................$101,672,199.30 100% .___% $101,672,199.30
===============================================================================
</TABLE>
(1) The underwriting commissions and certain other expenses estimated to be
$________ have been or will be paid by or on behalf of the Borrower. The
proceeds from the sale of the Certificates will be used to purchase the
Loan Notes from the Seller.
___________________________________
The Certificates offered by this Prospectus are offered subject to
receipt and acceptance by the Underwriter, to prior sale and to the
Underwriter's right to reject any order in whole or in part and to withdraw,
cancel or modify the offer without notice. It is expected that delivery of the
Certificates will be made in book-entry form through the facilities of DTC on or
about October 25, 1996.
_________________________________
___________, 1996
ABN AMRO SECURITIES (USA) INC.
-2-
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CERTIFICATES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
_________________________________
REPORTS TO CERTIFICATEHOLDERS
On half of the Trust, the Trustee will prepare and send semi-annual reports
to all registered holders of Certificates (the "Certificateholders"). See
"Description of the Certificates--Reports to Certificateholders." If the Trust
is required to file documents and reports with the Securities and Exchange
Commission (the "Commission") pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Trustee will deliver, without charge, to
any registered Certificateholder copies of all documents and reports furnished
to the Commission upon written request delivered to the Trustee at LaSalle
National Bank, 135 South LaSalle Street, Chicago, Illinois 60674, Attention:
Asset Backed Securities Trust Services. The Trustee's obligation to file
periodic reports on behalf of the Trust with the Commission will be suspended if
the Certificates issued by the Trust are held of record by fewer than 300
holders at the beginning of any fiscal year of the Trust other than the fiscal
year in which the registration statement becomes effective with respect to the
Trust. Accordingly, if there are fewer than 300 holders of the Certificates
issued by the Trust as of the beginning of any such fiscal year, the Trustee may
cease to file reports on behalf of the Trust with the Commission in respect of
such fiscal year. If the Trustee ceases to file periodic reports on behalf of
the Trust with the Commission, the Trustee will distribute to the holders of the
Certificates issued by the Trust, semiannual reports as noted above.
_________________________________
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-1 under the
Securities Act of 1933, as amended, with the Commission with respect to the
Certificates offered pursuant to this Prospectus. For further information,
reference is made to the Registration Statement and amendments thereof and
exhibits thereto, which are available for inspection without charge at the
public reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549; Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511; and Seven World Trade Center,
13th Floor, New York, New York 10048. Copies of such material may be obtained
from the Public Reference Section of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates.
_________________________________
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus. Certain capitalized
terms used in the summary are defined elsewhere in this Prospectus.
Title of Certificates................. Trade Trust Certificates, Series
1996-A (the "Certificates").
The Trust............................. Trade Trust Series 1996-A (the
"Trust"). The Trust will be formed
pursuant to the Trust Agreement for the
purpose of acquiring and holding the
Loan Notes and issuing the
Certificates.
The Company........................... U.S. Trade Funding Corp. (the
"Company").
The Trustee........................... LaSalle National Bank (the "Trustee").
The Seller and Servicer............... AMRO Bank N.V.
The Certificates...................... Certificates will be issued in an
aggregate amount of approximately
$101,672,199.30, will entitle the
holder to interest at a rate of _____%
per annum, and will have a final
distribution date of August 15, 2008.
-2-
<PAGE>
Principal on the Certificates will be
payable in 24 semi-annual
installments, on each February 15 and
August 15 (or, if not a Business Day
(as defined below) on the immediately
succeeding Business Day except with
respect to the final payment at
maturity, in which case such payment
shall be made on the immediately
preceding Business Day) in each year,
commencing on February 15, 1997 in the
amounts set forth under "Description of
the Certificates--Payment on the
Certificates." The payment dates
specified in the preceding sentence are
referred to herein as "Payment Dates."
Interest on the Certificates will
accrue from and include the date set
forth on the cover of this Prospectus
and will be payable on each semi-annual
Payment Date. A schedule of
distributions on the Certificates is
attached as Annex A.
Each Certificate will represent the
right to receive a pro rata portion of
each semi-annual payment on the Loan
Notes held by the Trust or, in the
event of a default in the payment
thereon, the right to receive a pro
rata portion of any payment received
under the Liquidity Facility and/or the
Eximbank Guarantee, which guarantee is
backed by the full faith and credit of
the United States of America. Following
an initial payment by Eximbank under
the Eximbank Guarantee, Eximbank will
issue Eximbank Payment Certificates (as
defined below) to the Trustee which
will require Eximbank, on each
subsequent Due Date (as defined below),
to directly and timely pay to the Trust
an amount equal to the amounts that
were originally scheduled to be due on
such Due Date with respect to the Loan
Notes and the Trust shall distribute
such amounts pro rata among the holders
of the Certificates.
-3-
<PAGE>
The Certificates will be available for
purchase in minimum denominations of
$500,000. The Certificates will be
available only in book-entry form and
will be represented by a single global
Certificate registered in the name of
Cede & Co., the nominee of DTC.
Beneficial interests in the global
Certificate will be shown on, and
transfers thereof will be effected only
through, records maintained by DTC and
its participants.
The Certificates represent beneficial
interests in the Trust only and do not
represent interests in or obligations
of the Seller, the Borrower, the Lessee
(defined below), the Company or the
Trustee nor are they obligations of or
guaranteed by Eximbank, the United
States of America or any other
governmental agency.
No Prepayment or Acceleration.......... The Certificates will not be
subject to prepayment or
acceleration under any
circumstances.
Rating................................. It is a condition to the issuance
of the Certificates that they
receive a rating of "AAA" by
Standard & Poor's Ratings Group,
a division of the McGraw-Hill
Companies ("S&P" or the "Rating
Agency"). A security rating is
not a recommendation to buy, sell
or hold securities, and may be
subject to revision or withdrawal
at any time.
Investor Eligibility................... There are no restrictions set forth
in the Eximbank Guarantee on the
eligibility of holders of the
Certificates, including any
restrictions based upon residency or
citizenship. However, certain pension,
profit sharing and other benefit plans
and other investors subject to ERISA
may be subject to certain restrictions.
See "ERISA Considerations."
-4-
<PAGE>
Underwriting........................... ABN AMRO Securities (USA) Inc. will
serve as Underwriter. The Underwriter
proposes initially to offer the
Certificates to the public at the
offering price set forth on the cover
page of this Prospectus. After the
initial public offering, such public
offering price may be changed. See
"Underwriting."
The Trust Assets...................... The property of the Trust will consist
of the Loan Notes and the rights under
the Eximbank Guarantee together with
the right to draw amounts under the
Liquidity Facility (as defined herein).
On and after an Eximbank Payment Event
(as defined below) and in certain other
circumstances described below, the
property of the Trust will consist of
Eximbank Payment Certificates (as
defined below).
The Loan Notes will evidence the
obligations of the Borrower to pay to
the Trust, in U.S. Dollars, semi-
annually on each February 15 and August
15 (or, if not a Business Day, on the
immediately succeeding Business Day
except that if the final maturity date
of August 15, 2008 is not a Business
Day, such payment shall be made on the
immediately preceding Business Day) in
each year, commencing on February 15,
1997 interest at a fixed rate and
principal in 24 semi-annual
installments as set forth under "The
-5-
<PAGE>
LOAN NOTES." Such payment dates are
referred to herein as "Due Dates" and
each Due Date shall coincide with a
"Payment Date" on the Certificates (as
such term is defined below). All
scheduled payments of principal and
interest on the Loan Notes made by or
on behalf of the Borrower on a Due Date
will be distributed to the
Certificateholders on the related
Payment Date.
The scheduled principal and interest
payments due on the Loan Notes on each
Due Date will be sufficient to enable
the Trustee to distribute the scheduled
amounts to the Certificateholders on
the corresponding Payment Date. See
"The LOAN NOTES."
Upon the occurrence of a payment
default on a Loan Note held by the
Trust (an "Event of Default"), Eximbank
may accelerate the payment of principal
of and interest on all such Loan Notes.
Whether or not Eximbank accelerates the
Loan Notes, if a timely demand shall
have been made on Eximbank by the
Trustee or the Servicer on behalf and
in the name of the Trustee in
compliance with the Eximbank Guarantee,
Eximbank will issue Eximbank Payment
Certificates to the Trust in exchange
for the Trustee's assignment to
Eximbank of the Loan Notes in default.
The Eximbank Payment Certificates will
provide that Eximbank will make
payments directly to the Trust on each
subsequent Due Date of the amounts that
were originally scheduled to be due on
such Due Date with respect to such Loan
Notes. Any such acceleration of the
Loan Notes will not result in an
acceleration of the Certificates. See
"THE EXIMBANK GUARANTEE--The Eximbank
Guarantee."
-6-
<PAGE>
The Loan Notes evidence loans made to
the Borrower by the Seller to enable
the Borrower to finance the acquisition
of two Boeing 767-300 Aircraft (the
"Aircraft") and certain fees and
expenses related thereto. The Borrower
has leased the Aircraft to the Lessee
and has granted a mortgage thereon. See
"THE LOAN NOTES" and "THE BORROWER AND
THE LESSEE."
If a total loss occurs with respect to
any Aircraft and such Aircraft is not
replaced in accordance with the terms
of the respective Aircraft lease,
insurance proceeds and any other
required amounts with respect to such
Aircraft will be paid to Eximbank. The
Loan Note with respect to such Aircraft
will then be assigned to Eximbank and
Eximbank will then issue an Eximbank
Payment Certificate to the Trust
requiring Eximbank to thereafter make
payments directly to the Trust on each
subsequent Due Date of the amounts that
were originally scheduled to be due on
such Due Date with respect to such Loan
Note. Failure to maintain adequate
insurance will not, however, relieve
Eximbank of its obligation to make
payment under the Eximbank Guarantee
with respect to Borrower payment
defaults, provided the notices and
demands described below are timely
made. Similarly, if the Lessee
exercises its right to terminate the
lease relating to an Aircraft following
a determination by the Lessee that such
Aircraft is surplus to its requirements
or economically obsolete, the Loan Note
relating to such Aircraft and affected
by such early lease termination shall
be assigned by the Trustee to Eximbank,
and Eximbank will then issue an
Eximbank Payment Certificate to the
Trust requiring Eximbank to thereafter
make payments directly to the Trust on
each subsequent Due Date of the amounts
that were originally scheduled to be
due on such Due Date with respect to
such Loan Note.
-7-
<PAGE>
Trustee's Fees and Expenses of The Trustee's fees and expenses will be
the Trust......................... prepaid by or on behalf of the Borrower
on the date of issuance of the
Certificates. Such fees and expenses
will not be payable from the scheduled
payments on the Loan Notes. See
"DESCRIPTION OF THE CERTIFICATES--
DUTIES AND IMMUNITIES OF THE TRUSTEE."
The Eximbank Guarantee............... Eximbank has endorsed each Loan Note
with its guarantee of the payment of
100% of all scheduled amounts of
principal of and interest on such Loan
Note (the "Eximbank Guarantee"). The
Eximbank Guarantee provides that if any
scheduled amount of principal or
interest due on a Loan Note on a Due
Date is not paid when due, such amount
will be payable by Eximbank, subject to
compliance with the applicable terms
and conditions set forth in the
Eximbank Guarantee.
According to an opinion of the Attorney
General of the United States of America
dated September 30, 1966, the Eximbank
Guarantee represents an obligation of
Eximbank backed by the full faith and
credit of the United States of America,
enforceable against Eximbank even if
the obligations of the Borrower under a
Loan Note are unenforceable.
Under the terms of the Eximbank
Guarantee, Eximbank will not be
required to make a payment under the
Eximbank Guarantee of amounts due but
not paid on a Due Date which were not
paid by or on behalf of the Borrower on
such Due Date if the Trustee or the
Servicer, on behalf and in the name of
the Trustee, fails to make a written
demand for payment upon Eximbank within
150 calendar days following such Due
Date (but at least 30 calendar days
after such Due Date) and upon the
Borrower and the Lessee with respect to
such Loan Note at least 15 calendar
days prior to such demand upon
Eximbank. In addition, it is a
condition of the Eximbank Guarantee
-8-
<PAGE>
that a demand for payment must be made
on the Industrial and Commercial Bank
of China, on behalf of Eximbank, at
least 15 calendar days prior to the
date demand is made on Eximbank for
payment under the Eximbank Guarantee.
Accordingly, the Servicing Agreement
requires the Servicer, on behalf of the
Trustee, to make such a timely demand
upon Eximbank, the Borrower, the Lessee
and the Industrial and Commercial Bank
of China. If the Servicer or Trustee
fails to timely make such demand, the
Servicer and Trustee forfeit the right
to collect amounts on the Eximbank
Guarantee with respect to such Due
Date, but this failure does not affect
the right to collect amounts on the
Eximbank Guarantee with respect to any
future Due Date.
The Trustee is obligated pursuant to
the Trust Agreement to make timely
demands on Eximbank, the Borrower, the
Lessee and the Industrial and
Commercial Bank of China in the event
the Servicer fails to make such
demands.
Liquidity Facility..................... The Certificates will benefit from an
irrevocable liquidity facility arranged
by the Company with ABN AMRO Bank N.V.
in order to provide for the timely
payment of principal and interest on
the Certificates on any Payment Date on
which the Borrower defaults in the
payment of amounts due under a Loan
Note. See "THE LIQUIDITY FACILITY."
Initial Certificate Principal Balance.. $101,672,199.30 representing the
aggregate principal balance on the Loan
Notes as of October 25, 1996 (the
"Cutoff Date").
-9-
<PAGE>
Tax Status............................. Chapman and Cutler, as special United
States tax counsel to the Trust, will
render an opinion to the effect that
the Trust will be classified as a
grantor trust for United States Federal
income tax purposes, and the
Certificateholders will be treated as
beneficial owners of undivided
fractional interests in the assets of
the Trust. See "CERTAIN FEDERAL INCOME
TAX CONSEQUENCES."
ERISA Considerations................... Certain prospective investors in the
Certificates will be subject to the
requirements of the Employee Retirement
Income Security Act of 1974, as amended
("ERISA") or Section 4975(e)(1) of the
Internal Revenue Code of 1986, as
amended (the "Code") if they are
pension, profit sharing, or other
employee benefit plans, individual
retirement accounts or annuities or
employee annuity plans (a "Plan" or
"Plans"). The purchase of Certificates
by Plans may cause the assets of the
Trust to be treated as "plan assets,"
subjecting the Trustee to the fiduciary
responsibility rules of ERISA, with
which the Trustee may not be in a
position to comply. Regardless of
whether the Trust's assets are regarded
as "plan assets," if the Certificates
are purchased with assets of Plans and
the Underwriter, the Trustee, the
Lessee (as defined below), the
Liquidity Provider or the Borrower, or
any of their respective affiliates, is
a party in interest or disqualified
person with respect to any such Plan,
possible violations of the prohibited
transaction or fiduciary responsibility
rules of ERISA could occur, unless such
purchase is subject to a statutory or
administrative exemption. Any fiduciary
of a Plan considering the purchase of
Certificates should consult its legal
advisors regarding the consequences of
such purchase under ERISA. See "ERISA
CONSIDERATIONS."
-10-
<PAGE>
OVERVIEW OF THE TRANSACTION
On the date of issuance of the Certificates, the Seller will sell,
transfer, assign, set over and otherwise convey the Loan Notes to, or at the
direction of, the Company, and the Company will simultaneously establish the
Trust and sell, transfer, assign, set over and otherwise convey or cause the
conveyance to the Trust all right, title and interest in the Loan Notes. On
behalf of the Trust, as the issuer of the Certificates offered hereby, the
Trustee will, concurrently with such conveyance, execute and deliver the
Certificates to or upon the order of the Company. The Servicer will service the
Loan Notes pursuant to the Servicing Agreement, and will be compensated as
Servicer.
The Trust will be formed for the purpose of acquiring and holding the Loan
Notes and issuing the Certificates. Each Certificate offered hereby will
represent an undivided fractional interest in payments on each Loan Note held by
the Trust. Each Loan Note will have endorsed thereon an Eximbank Guarantee,
which, according to the opinion of the Attorney General of the United States of
America, dated September 30, 1966, is backed by the full faith and credit of the
United States of America, of the payment of 100% of all scheduled amounts of
principal of and interest on such Loan Note. The Certificates are not
obligations of or guaranteed by Eximbank, the United States of America or any
other governmental agency.
The Borrower will be required to make payments to the Trust in respect of
the Loan Notes held by the Trust on each Due Date, and the aggregate amount of
the scheduled payments of principal of and interest on the Loan Notes on each
Due Date will be sufficient to satisfy the scheduled payments of principal of
and interest on the Certificates on the corresponding Payment Date (which will
be the same day as the Due Date). The basic fees of the Trustee and the Servicer
will be prepaid by or on behalf of the Borrower at the time of issuance of the
Certificates and will not be payable from the scheduled payments on the Loan
Notes.
If the Borrower has failed to make the payment required under a Loan Note
within 30 calendar days after a Due Date, Eximbank will be obligated, upon its
receipt of a written demand for payment by the Trustee or the Servicer on behalf
and in the name of the Trustee on any Business Day subsequent to such 30-day
period (but only within 150 calendar days of such Due Date), and provided that
the other provisions of the Eximbank Guarantee have been satisfied (see "THE
EXIMBANK GUARANTEE--Certain Restrictions Applicable to the Eximbank Guarantee"),
to pay to the Trust within five Business Days of such demand (unless Eximbank
determines that additional time is required due to the large number of claims
then pending at Eximbank, in which case fifteen (15) Business Days thereafter)
100% of all scheduled amounts of principal of and interest on such Loan Note due
and unpaid on such Due Date, together with interest payable on such overdue
amounts of principal and interest at the rate stated in the Eximbank Guarantee
from such Due Date to the actual date of payment by Eximbank. On each subsequent
Due Date, without a requirement of a demand on or notice by the Trustee or
Servicer upon the Borrower or Eximbank, Eximbank will directly and timely pay to
the Trust on such Due Date an amount equal to the amounts that were originally
scheduled to be due on such Due Date with respect to the Loan Notes held by the
Trust at the time of the initial demand for payment upon Eximbank.
-11-
<PAGE>
Additionally, if the Trustee or Servicer fails to timely make such demand, there
is forfeited the right to collect amounts on the Eximbank Guarantee with respect
to such Due Date, but such failure does not affect the right to collect amounts
on the Eximbank Guarantee with respect to any future Due Date. Also, as a result
of the delay imposed in eventually realizing the initial amounts on the Eximbank
Guarantee as described above, the Trust has secured the benefit of the Liquidity
Facility to provide an interim source of funds for such initial payment default
by the Borrower. See "THE LIQUIDITY FACILITY" below. If amounts are drawn on the
Liquidity Facility to satisfy the initial payment default of the Borrower, then
amounts subsequently realized in respect of the initial demand on the Eximbank
Guarantee will be used, first, to reimburse the Liquidity Provider for its
payment of such amounts. See "DESCRIPTION OF THE CERTIFICATES--Distributions on
the Certificates" and "--TRUST ACCOUNTS AND INVESTMENT OF FUNDS."
USE OF PROCEEDS
The proceeds from the sale by the Trust of the Certificates offered hereby
will be used by the Trustee to purchase the Loan Notes from the Company at a
purchase price equal to the principal amount thereof. The Company will use such
proceeds to pay the Seller the purchase price of the Loan Notes pursuant to a
Purchase Agreement between the Company and the Seller. See "THE LOAN NOTES--The
Purchase Agreement." As described under "The LOAN NOTES," the Loan Notes
evidence loans made to the Borrower pursuant to the Guaranteed Loan Agreement
dated as of August 27, 1996 among the Borrower, ABN AMRO Bank N.V., as lender
(the "Lender") and Facility Agent, Wilmington Trust Company (as Security
Trustee) and Eximbank (the "Loan Agreement"). The amounts loaned to the Borrower
under the Loan Agreement were applied by the Borrower to finance the acquisition
of two Boeing 767-300 Aircraft and related engines (collectively, the
"Aircraft") and to pay the exposure fee to Eximbank for the Eximbank Guarantee
and to pay certain other fees related to the financing of the Aircraft.
THE EXIMBANK GUARANTEE
THE EXIMBANK GUARANTEE
Eximbank, pursuant to the Eximbank Guarantee, will, with respect to each
Loan Note, guarantee payment of 100% of all scheduled amounts of principal of
and interest on each such Loan Note. The Eximbank Guarantee provides that after
Eximbank's endorsement of a guarantee legend on a Loan Note, the guarantee of
Eximbank will be a binding obligation of Eximbank, except as provided under
"Certain Restrictions Applicable to the Eximbank Guarantee" below, even if the
Borrower's obligations under a Loan Note are unenforceable. If any scheduled
amount of principal or interest due on a Loan Note on a Due Date is not paid
when due, subject to the terms of the Eximbank Guarantee, such amount will be
payable by Eximbank as provided below.
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The Attorney General of the United States of America has stated in an
opinion dated September 30, 1966 that Eximbank's contractual liabilities
constitute general obligations of the United States of America backed by its
full faith and credit.
Under the terms of the Eximbank Guarantee, if the Borrower fails to make a
scheduled payment of principal of or interest on a Loan Note within 30 calendar
days after a Due Date, Eximbank will be obligated, upon its receipt of a written
demand for payment by the Trustee (or the Servicer in its name and on its
behalf) on any Business Day subsequent to such 30-day period (but only within
150 calendar days of such Due Date), and provided that all other provisions of
the Eximbank Guarantee have been satisfied (see "Certain Restrictions Applicable
to the Eximbank Guarantee") (the satisfaction of such conditions, an "Eximbank
Payment Event"), to pay to the Trust within five Business Days of such demand
(unless Eximbank determines that additional time is required due to the large
number of claims then pending at Eximbank, in which case fifteen (15) Business
Days thereafter) 100% of all scheduled amounts of principal of and interest on
such Loan Note due and unpaid on such Due Date, together with interest payable
on such unpaid installment of principal and interest at the rate stated in the
Eximbank Guarantee from such Due Date to the actual date of payment by Eximbank.
On each subsequent Due Date following an Eximbank Payment Event, without a
requirement of a demand on or notice by the Trustee or the Servicer upon the
Borrower or Eximbank, Eximbank will directly and timely pay to the Trust on such
Due Date an amount equal to the amounts that were originally scheduled to be due
on such Due Date with respect to the Loan Notes held by the Trust at the time of
the initial demand for payment upon Eximbank. Any payments received under the
Eximbank Guarantee would include interest from and including the relevant Due
Date to but excluding the actual date of payment by Eximbank. For purposes of
the foregoing, "Business Day" means any day other than a Saturday or Sunday on
which banks are open for business in New York, New York and Chicago, Illinois.
If timely demands are not made upon Eximbank, the Borrower, the Lessee and the
Industrial and Commercial Bank of China by the Servicer on behalf and in the
name of the Trustee (or by the Trustee directly), with respect to any default in
payment of an amount of principal or interest due under a Loan Note, and such
failure renders the Eximbank Guarantee unenforceable with respect to such
payment, the Trust Agreement provides that the Trustee will be irrevocably
obligated to pay the amount of that defaulted payment to the Trust. The Servicer
has indemnified the Trustee for the consequences of its failure to perform under
the Servicing Agreement. Notwithstanding any such failure by the Trustee or
Servicer to make timely demand, such failure does not affect the right to make
demand for payment under the Eximbank Guarantee with respect to any future Due
Date.
Within five Business Days of an Eximbank Payment Event (unless Eximbank
determines that additional time is required due to the large number of claims
then pending at Eximbank, in which case fifteen (15) Business Days thereafter),
Eximbank will execute and deliver certificates to the Trust (the "Eximbank
Payment Certificates") corresponding to the then outstanding principal amount of
the Loan Notes held by the Trust at the time of the initial demand for payment
upon Eximbank (after giving effect to any initial Eximbank payments referred to
above), providing for the timely payment to the Trust by Eximbank on each
subsequent Due Date regardless of any acceleration of the Loan Notes, of an
amount equal to the amounts that were originally scheduled to be due on the Loan
Notes on such Due Date. On and after such date, the property of the Trust will
consist of the Eximbank Payment Certificates held by the Trust, which, according
to the opinion of the Attorney General of the United States of America, dated
September 30, 1966, will be direct obligations of Eximbank, backed by the full
faith and credit of the United States of America.
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If Eximbank accelerates the Loan Notes pursuant to the Loan Agreement due to a
non-payment default thereunder and the Borrower makes payment of the accelerated
amounts to Eximbank and any other amounts then due, the Loan Notes will be
assigned to Eximbank and Eximbank will deliver an Eximbank Payment Certificate
corresponding to the outstanding principal amount of the Loan Notes (after
giving effect to any principal payments made by the Borrower prior to the
issuance of such Eximbank Payment Certificate) to the Trust providing for the
timely payment to the Trust of the amounts that were originally scheduled to be
due on each Due Date. The occurrence of these events will not, however, result
in acceleration of the Certificates.
If a total loss occurs with respect to any Aircraft (an "Event of Loss")
and such Aircraft is not replaced, insurance and certain other moneys with
respect to such Aircraft will be paid to Eximbank in accordance with the terms
of the related Aircraft lease. The Loan Note with respect to such Aircraft will
then be assigned to Eximbank and Eximbank will deliver an Eximbank Payment
Certificate corresponding to the outstanding principal amount of such Loan Note
(after giving effect to any principal payments made by the Borrower prior to the
issuance of such Eximbank Payment Certificates) to the Trust, providing for the
timely payment to the Trust of the amounts that were originally scheduled to be
due on each Due Date. Similarly, if the Lessee properly exercises its right to
terminate the lease relating to an Aircraft following a determination by the
Lessee that such Aircraft is surplus to its requirements or economically
obsolete, the Loan Note relating to such Aircraft and affected by such early
lease termination shall be assigned by the Trustee to Eximbank, and Eximbank
will deliver to the Trust an Eximbank Payment Certificate in respect of such
Loan Note requiring Eximbank to thereafter make payments directly to the Trust
on each subsequent Due Date of the amounts that were originally scheduled to be
due on such Due Date with respect to such Loan Note.
CERTAIN RESTRICTIONS APPLICABLE TO THE EXIMBANK GUARANTEE
Under the terms of the Eximbank Guarantee, Eximbank will not be required to
make a payment of amounts due on a Due Date which were not paid by or on behalf
of the Borrower on such Due Date if the Trustee (or the Servicer in its name and
on its behalf) fails to make a written demand for payment upon Eximbank within
150 calendar days following such Due Date (but at least 30 calendar days after
such date) and a written demand for payment upon the Borrower and the Lessee
with respect to the applicable Loan Note at least 15 calendar days prior to such
demand upon Eximbank. In addition, it is a condition of the Eximbank Guarantee
that a demand for payment must be made on the Industrial and Commercial Bank of
China, on behalf of Eximbank, at least 15 calendar days prior to the date on
which demand is made on Eximbank for payment under the Eximbank Guarantee.
Eximbank requires this prior demand on the Industrial and Commercial Bank of
China because the Industrial and Commercial Bank of China has guaranteed certain
obligations of the Lessee to Eximbank. Accordingly, the Servicing Agreement
requires the Servicer, on behalf and in the name of the Trustee, in the case of
a failure by the Borrower to make payment when due of the full amount payable on
a Loan Note, to make a timely demand upon Eximbank, the Borrower, the Lessee and
the Industrial and Commercial Bank of China.
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The Trustee is obligated pursuant to the Trust Agreement to make timely
demands on Eximbank, the Borrower, the Lessee and the Industrial and Commercial
Bank of China in the event the Servicer fails to make such demands.
Under the terms of the Eximbank Guarantee, Eximbank will not be required to
make any payment with respect to a Loan Note held by the Trust unless and until
the Trustee has assigned to Eximbank all of the Trust's rights and interests in
and to the affected Loan Note held by the Trust and the Loan Agreement, and
delivered to Eximbank such Loan Note. Accordingly, both the Eximbank Guarantee
and the Trust Agreement provide that the Trustee is obligated to assign the
Trust's rights and interests in the affected Loan Note to Eximbank in the event
a payment under the Loan Note is not timely received. Simultaneously with the
fulfillment of these requirements by the Trust, Eximbank will, if all other
provisions of the Eximbank Guarantee have been met, issue to the Trustee the
corresponding Eximbank Payment Certificates whereupon the Certificates will
evidence fractional undivided interests in these Eximbank Payment Certificates
rather than the Loan Notes for which such Eximbank Payment Certificates were
exchanged.
In addition, the Eximbank Guarantee provides that it will cease to be
effective if the Trustee or any holder of an interest in the Loan Notes agrees
to any amendment of or any deviation from any Loan Note, any Lease Agreement
relating to the Aircraft or the Loan Agreement without Eximbank's prior written
consent. The Trust Agreement therefore prohibits the Trustee from agreeing to
any such amendment or deviation without Eximbank's prior written consent. See
"Description of the Certificates--Events of Default, Enforcement of Loan Notes
and Eximbank Guarantee" and "--Amendments".
EXIMBANK
Eximbank, an independent agency of the government of the United States of
America, corporate in form, all of the capital stock of which is held by the
Secretary of the Treasury, was founded in 1934 and operates under authority
contained in the Export-Import Bank Act of 1945, as amended (12 U.S.C. Section
635 et seq.) (the "EXIM Act"). Eximbank's purpose is to aid in financing exports
and imports of goods and services between the United States of America and
foreign countries and, in furtherance thereof, the EXIM Act vests broad banking
powers in Eximbank, including the power to borrow and lend, to guarantee and
insure loans, and to purchase or guarantee negotiable instruments, evidences of
indebtedness and other securities. Eximbank's authority to exercise its
functions has been limited to specified periods, which have been extended by
Congressional action from time to time. The EXIM Act presently provides that the
authority empowering Eximbank to continue to exercise its functions expires on
September 30, 1997. Although the current authority under the EXIM Act to provide
loans and guarantees in support of import and export activities expires on
September 30, 1997, Eximbank is permitted to incur prior thereto liability as a
guarantor of obligations maturing subsequent to that date without limitation as
to the length of maturity of such obligations or the amount guaranteed.
The Attorney General of the United States of America has stated in an
opinion dated September 30, 1966 that Eximbank's contractual liabilities
constitute general obligations of
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the United States of America backed by its full faith and credit and that
persons in whose favor Eximbank has incurred contractual liabilities in
accordance with law "have acquired valid general obligations of the United
States, and are therefore in a position to reach beyond Eximbank and its assets
to the United States for a source of payment, if necessary." The Eximbank
Guarantee is a guarantee of payment of amounts due on the Loan Notes, and is not
in favor of the Certificateholders nor a guarantee of payment of amounts due on
the Certificates.
THE LOAN NOTES
On the date of initial issuance of the Certificates, the Company will,
pursuant to a Purchase Agreement (the "Purchase Agreement"), acquire from the
Seller two Loan Notes in the aggregate principal amount of $101,672,199.30. Each
Loan Note is a direct obligation of the Borrower and such Loan Note evidences a
loan made to the Borrower by the Seller under the Loan Agreement to finance up
to 85% of the purchase by the Borrower of the respective Aircraft, to finance
the exposure fee payable to Eximbank and to finance certain other fees relating
to the financing of the Aircraft. The Loan Notes will be secured by a mortgage
on the Aircraft.
The Loan Notes held by the Trust will amortize in 24 installments of
principal, payable on each Due Date. The Loan Notes held by the Trust will bear
interest at a rate equal to the interest rate on the Certificates. The aggregate
scheduled amounts of principal and interest payable on the Loan Notes held by
the Trust on each Due Date will be sufficient to provide for the scheduled
payments on the Certificates on the corresponding Payment Date. Each Due Date is
the same day as the corresponding Payment Date.
Payments of principal of and interest on the Loan Notes held by the Trust
are due from the Borrower to the Trust semi-annually on each February 15 and
August 15, commencing February 15, 1997, and ending on August 15, 2008; provided
that if any such date is not a Business Day, payment will be made on the next
succeeding Business Day unless such non-Business Day is August 15, 2008
whereupon such payment will be made on the immediately preceding Business Day.
Under the Loan Agreement, a "Business Day" is any day other than a Saturday or
Sunday on which banks are open for business in New York, New York. Interest on
the Loan Notes is computed on the basis of actual days elapsed in a year of 360
days consisting of twelve 30-day months.
All scheduled payments of principal and interest with respect to each Loan
Note will be payable in lawful money of the United States of America without
deduction or withholding for or on account of any present or future taxes levied
or imposed on such payments, unless the Borrower is required to make such a
payment subject to the deduction or withholding of tax. If any taxes are so
required to be deducted or withheld, the amounts so payable by the Borrower to
the Trust will be increased in accordance with the Loan Agreement to the extent
necessary to yield to the Trust (after payment of all such taxes), amounts equal
to the full amounts that would have been received pursuant to the Loan Notes in
the absence of such taxes.
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PURCHASE AGREEMENT
Pursuant to the Purchase Agreement, the Seller will sell and assign the
Loan Notes (and the related rights under the Loan Agreement and Eximbank
Guarantee) to, or at the direction of, or upon the order of the Company, without
recourse, representation or warranty, except the representation that the
Purchase Agreement has been duly authorized, executed and delivered and
constitutes an enforceable obligation of the Seller and that the Seller owns the
Loan Notes free and clear of all liens.
THE LIQUIDITY FACILITY
The Trust will benefit from an Irrevocable Revolving Credit Agreement,
dated as of January 1, 1995 among ABN AMRO Bank N.V. (the "Liquidity
Provider"), the Company, the Trustee and the Servicer (the "Liquidity
Facility"). The Liquidity Facility will be in an amount not less than one
payment of principal and the maximum amount of interest due on the Loan Notes on
any Due Date. The Liquidity Facility may be drawn on by the Servicer in the
event that the Borrower defaults in its obligation to make any required payment
of principal and interest on any Due Date. Under the Servicing Agreement, the
Servicer has agreed to make such drawing on or before 2:00 p.m., New York City
time on any Due Date on which the payment due from the Borrower has not been
received. Pursuant to the Liquidity Facility, the Liquidity Provider is
obligated to pay to the Servicer the amount demanded at or prior to 3:00 p.m.,
New York City time on the date the demand is made by the Servicer. The Liquidity
Provider will be entitled to receive reimbursement (with interest thereon) for
any payment made under the Liquidity Facility from the amount eventually paid by
Eximbank under the Eximbank Guarantee in respect of such Borrower default. The
Liquidity Provider will receive a facility fee, which shall be prepaid on the
date of issuance of the Certificates.
The Liquidity Facility expires on _____________, 1997 (the "Expiration
Date"). In the event that (i) on or prior to the fifth Business Day prior to the
Expiration Date or (ii) within 15 days of any downgrade or withdrawal of the
short-term unsecured debt rating of the Liquidity Provider, the Liquidity
Provider does not provide to the Trust a replacement irrevocable liquidity
facility (a "Replacement Liquidity Facility") substantially identical to the
Liquidity Facility (and consented to by Eximbank) and issued by an institution
with a short-term unsecured debt rating of A-1+ by Standard & Poor's, a division
of the McGraw-Hill Companies, the Servicer shall make a demand under the
Liquidity Facility for the full amount available thereunder. The proceeds of any
such demand shall be held in a separate trust account and shall be invested by
the Trustee at the direction of the Company only in certain highly-rated
permitted investments. Such funds will be available to be withdrawn from such
account under the same circumstances as the Servicer was permitted to make
demands on the Liquidity Facility. In such a case, the Liquidity Provider would
be entitled to reimbursement in respect of withdrawals made from such account in
the same manner as with respect to amounts paid under the Liquidity Facility
(other than amounts paid thereunder in connection with the expiration thereof as
described above). In the event that the Liquidity Provider subsequently delivers
a Replacement Liquidity Facility,
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the Trustee is to release any proceeds of the demand on the original Liquidity
Facility to the Liquidity Provider.
The Liquidity Provider is an affiliate of the Underwriter and the Trustee.
THE TRUST
U.S. Trade Trust Series 1996-A (the "Trust") will be formed for the purpose
of acquiring and holding the Loan Notes and issuing the Certificates. The Trust
will be formed pursuant to a Supplemental Trust Agreement dated as of October 1,
1996 incorporating therein the Standard Terms and Conditions of Trust Agreement
dated as of January 1, 1995 (as the same may be amended from time to time, the
"Trust Agreement") pursuant to which the Company is entitled to cause the
issuance of the Certificates. LaSalle National Bank (the "Trustee"), serves as
Trustee under the Trust Agreement on behalf of the Certificateholders. The Trust
will have no material assets other than the Loan Notes, payments in respect
thereof pending distribution and the rights under the Eximbank Guarantee, the
rights under the Liquidity Facility and, if an Eximbank Payment Event occurs or
certain other specified events occur, the related Eximbank Payment Certificates.
THE TRUSTEE
LaSalle National Bank will serve as Trustee. Its corporate trust office is
located at 135 S. LaSalle Street, Chicago, Illinois 60603 and its telephone
number is 312/904-7326. The Trustee is an affiliate of the Underwriter, the
Seller, the Liquidity Provider and the Servicer.
THE BORROWER AND THE LESSEE
YA96A Limited (the "Borrower") is a company incorporated under the laws of
the Cayman Islands. The Borrower has leased the Aircraft to China Yunnan
Airlines (the "Lessee"), a state-owned legal entity organized and existing under
applicable laws and decrees of the People's Republic of China and engaged in the
commercial air transportation of passengers and cargo. The Loan Notes are not
direct obligations of, and are not guaranteed by, the Lessee. The Borrower does
not have any material assets other than the Aircraft, which will constitute
collateral for the Loan Notes, and its rights under its lease agreements with
the Lessee and related documentation. The Certificates represent undivided
fractional interests in the Loan Notes held by the Trust, but the Certificates
are not direct obligations of, and are not guaranteed by, the Borrower, the
Lessee, Eximbank, the United States of America, the Industrial and Commercial
Bank of China or the government of the People's Republic of China.
THE SELLER AND THE SERVICER
ABN AMRO Bank N.V., a bank organized under the laws of The Netherlands, is
the originator and Seller of the Loan Notes. ABN AMRO Bank N.V. will also serve
as the
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Servicer of the Loan Notes held in the Trust. The Seller and the Servicer are
affiliates of the Underwriter and the Trustee.
THE COMPANY
The Company, U.S. Trade Funding Corp., is a corporation organized under the
laws of the State of Delaware. The Company will convey or cause the conveyance
of the Loan Notes purchased from the Seller to the Trust. The Company is a
wholly-owned subsidiary of Securitization Holding Company, L.L.C., a limited
liability company organized under the laws of the State of Delaware. The
Certificateholders of the Certificates will have no recourse against the
Company's directors, officers, stockholders, affiliates or employees, provided
that nothing shall limit or otherwise affect a Certificateholder's rights, if
any, against any of the foregoing under federal securities laws. See
"Underwriting."
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued under the Trust Agreement pursuant to which
the Trust is entitled to issue or cause the issuance of the Certificates. The
following summary of the Certificates does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all provisions of
the Loan Notes, the Purchase Agreement, the Eximbank Guarantee, the Servicing
Agreement and the Trust Agreement.
PAYMENT ON THE CERTIFICATES
Interest on the Certificates will accrue from and including the date set
forth on the cover page of this Prospectus and will be payable semi-annually on
each February 15 and August 15 (or the next succeeding Business Day if such date
is not a Business Day unless such non-Business Day is August 15, 2008 whereupon
such payment shall be made on the immediately preceding Business Day),
commencing on February 15, 1997 and ending on August 15, 2008, to the persons in
whose name the Certificates are registered on the fifteenth day preceding the
next Payment Date (each, a "Record Date"). Interest on the Certificates will be
computed on the basis of a year of 360 days consisting of twelve 30-day months.
Payments of principal on the Certificates will be made in 24 semi-annual
installments, on each Payment Date, commencing February 15, 1997 to the persons
in whose names the Certificates are registered on the preceding Record Date,
each such installment being in the aggregate amount of $____________ (except
that the last payment of principal is scheduled to be $___________).
A schedule of distributions on the Certificates is attached as Annex A.
The Certificates will not be subject to prepayment or acceleration under
any circumstances.
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DISTRIBUTIONS ON THE CERTIFICATES
On each Payment Date, the Trustee is obligated to apply all amounts in the
Distribution Account (as defined below), after making any required reimbursement
to the Liquidity Provider for prior drawings to pay Certificateholders, so as to
make the distribution of any amounts due to the Certificateholders on such date,
with no priority of payments due on any one Certificate over those due on any
other Certificate.
Such amounts in the Distribution Account on any Payment Date will be
distributed to the Certificateholders on a pro rata basis. If payments in
respect of any Certificates are not made when due for any reason,
Certificateholders are entitled to be paid interest on overdue amounts of
principal and interest at the rate set forth on the cover page of this
Prospectus."
"Distribution Account" means the special purpose non-interest bearing trust
account established by the Trustee for the benefit of the Certificateholders,
for receipt of amounts transferred from the Revenue Account to be distributed on
the current Payment Date. See "Trust Accounts and Investment of Funds."
BOOK-ENTRY REGISTRATION
The Certificates will be issued in the form of a single global Certificate
in the aggregate amount of this issue that will be deposited with The Depository
Trust Company ("DTC"), New York, New York, and registered in the name of a
nominee of DTC. The Certificates will be available only in book entry form.
Cede & Co., as nominee for DTC, will be the registered holder of the global
Certificate. Except under the limited circumstances described below, no
Certificateholder will be entitled to receive a physical certificate
representing such Certificateholder's interest in the Certificates, which may
impair the ability of Certificateholders to transfer beneficial interests in the
related global Certificate.
The global Certificate will be exchangeable for definitive Certificates
registered in the name of, and a transfer of the global Certificate may be
registered to, any person other than DTC or its nominee, only if:
(a) DTC notifies the Trustee that it is unwilling or unable to
continue as Depository for such global Certificate or if at any time DTC
ceases to be a clearing agency registered under the Securities Exchange Act
of 1934, as amended, and no successor securities depository is designated
as provided in the Trust Agreement; or
(b) the Trustee (with the concurrence of the Company (or its designee)
and Eximbank), and upon notice to DTC, remove DTC as securities depository
for the Certificate and no successor securities depository is designated as
provided in the Trust Agreement.
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Owners of beneficial interests in the global Certificate will not be
considered to be the holders thereof for any purpose under the Trust Agreement.
All references herein to actions by Certificateholders refer to actions taken
by DTC upon instructions from its participants (the "DTC Participants"), and all
references herein to distributions, notices, reports and statements to
Certificateholders refer to distributions, notices, reports and statements to
Cede & Co., as the registered holder of the global Certificate for distribution
to Certificateholders in accordance with DTC procedures. Accordingly, each
Certificateholder must rely on the procedures of DTC and, if such person is not
a DTC Participant, on the procedures of the DTC Participant through which such
person owns its interest, to exercise any rights of a holder under the Trust
Agreement. None of the Underwriter, the Seller, the Servicer, the Trust, the
Trustee, Eximbank, the Company, the Lessee, the Borrower, nor any agent of such
parties will have any responsibility or liability for any aspect of DTC's
records or any DTC Participant's records relating to or payments made on account
of beneficial interests in the global Certificate or for maintaining,
supervising or reviewing any of DTC's records or any DTC Participant's records
relating to such beneficial interests.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking corporation" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. DTC was created to hold securities for DTC Participants
and to facilitate the clearance and settlement of securities transactions, such
as transfers and pledges, between DTC Participants through electronic
computerized book-entry changes in accounts of DTC Participants, thereby
eliminating the need for physical movement of certificates. DTC Participants
include the Underwriter, securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. Indirect access to the
DTC system also is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a DTC
Participant, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and DTC Participants are on file with the Commission.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among DTC
Participants on whose behalf it acts with respect to the Certificates and is
required to receive and transmit distributions of principal of and interest on
the Certificates. DTC Participants and Indirect Participants with which
Certificateholders have accounts with respect to the Certificates similarly are
required to make book-entry transfers and receive and transmit such payments on
behalf of their respective Certificateholders.
Purchases of Certificates under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Certificates on DTC's
records. The ownership interest of each actual purchaser of each Certificate
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which
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the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Certificates are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners
will not receive certificates representing their ownership interests in
Certificates, except in the event that use of the book-entry system for the
Certificates is discontinued.
To facilitate subsequent transfers, all Certificates deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Certificates with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Certificates; DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Certificates are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Principal and interest payments on the Certificates will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, the Company or the Trustee,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal and interest to DTC is the responsibility of
the Trust, disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
Because DTC can act only on behalf of DTC Participants, which in turn act
on behalf of Indirect Participants and certain banks, the ability of a
Certificateholder to pledge Certificates to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
Certificates, may be limited due to the lack of physical certificates for such
Certificates.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Certificates. Under its usual procedures, DTC mails an Omnibus Proxy with
respect to a series of Certificates to the Trustee as soon as possible after a
record date for a consent or vote. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Certificates are credited on the record date (identified in a listing attached
to the Omnibus Proxy).
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None of the Underwriter, the Trust, the Trustee, Eximbank, the Company, the
Lessee, the Borrower, nor their respective affiliates, can give any assurances
that DTC will perform or continue to perform the procedures discussed above, and
such procedures may be discontinued at any time.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company and the Trustee believe to be
reliable, but neither the Company nor the Trustee takes responsibility for the
accuracy thereof.
Events of Default, Enforcement of Loan Notes and Eximbank Guarantee
If the Borrower fails to pay on a Due Date all amounts due from the
Borrower in respect of the Loan Notes on such Due Date, the Servicing Agreement
provides that the Servicer, on behalf and in the name of the Trustee (and in
addition to making required drawings on the Liquidity Facility), shall send a
payment demand to the Borrower, the Lessee and, on behalf of Eximbank, to the
Industrial and Commercial Bank of China (with copies thereof to Eximbank) on or
prior to the time specified in the Servicing Agreement, setting forth the
amounts due on the Loan Notes on such Due Date and the amounts then due and
unpaid by the Borrower. If any amounts due in respect of the Loan Notes remain
unpaid on the 30th calendar day after such Due Date, the Servicing Agreement
requires the Servicer, on behalf and in the name of the Trustee, to file with
and deliver to Eximbank on such 30th calendar day (or the first following
Business Day) a payment demand setting forth such amounts due and unpaid by the
Borrower and demanding payment from Eximbank under the Eximbank Guarantee. If
timely demands are not made upon Eximbank, the Borrower, the Lessee and the
Industrial and Commercial Bank of China by the Servicer on behalf and in the
name of the Trustee (or by the Trustee directly), with respect to any default in
payment of an amount of principal or interest due under a Loan Note, and such
failure renders the Eximbank Guarantee unenforceable with respect to such
payment, the Trust Agreement provides that the Trustee will be irrevocably
obligated to pay the amount of that defaulted payment to the Trust. The Servicer
has indemnified the Trustee for the consequences of its failure to perform under
the Servicing Agreement. Under the Eximbank Guarantee, Eximbank, upon receipt of
a written demand for payment and satisfaction of all other provisions of the
Eximbank Guarantee (see "The Eximbank Guarantee--Certain Restrictions Applicable
to the Eximbank Guarantee"), will within five Business Days of such demand
(unless Eximbank determines that additional time is required due to the large
number of claims then pending at Eximbank, in which case fifteen (15) Business
Days thereafter) make payment of all scheduled amounts of principal of and
interest on the Loan Notes due and unpaid on the Due Date, together with
interest payable on such overdue amounts of principal and interest at the rate
stated in the Eximbank Guarantee from the Due Date to the actual date of payment
by Eximbank. In such event, the Trust Agreement provides that the Trustee is
obligated to assign all of the right, title and interest of the Trust in and to
the defaulted Loan Notes to Eximbank. See "The Eximbank Guarantee" and "The Loan
Notes."
Following an Eximbank Payment Event, the Eximbank Guarantee provides that
Eximbank on each subsequent Due Date will directly and timely pay to the Trust
on such Due Date an amount equal to the amounts that were originally scheduled
to be due on such Due Date with respect to the Loan Notes held by the Trust at
the time of the initial demand
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for payment upon Eximbank, without a requirement of a demand on or notice to the
Borrower, the Lessee or Eximbank for such payment. Within five Business Days of
an Eximbank Payment Event (unless Eximbank determines that additional time is
required due to the large number of claims then pending at Eximbank, in which
case fifteen (15) Business Days thereafter), Eximbank will execute and deliver
Eximbank Payment Certificates to the Trust corresponding to the then outstanding
principal amount of the Loan Notes held by the Trust at the time of the initial
demand for payment upon Eximbank providing for timely payment to the Trust by
Eximbank on each subsequent Due Date of an amount equal to the amounts that were
originally scheduled to be due on such Due Date with respect to the Loan Notes.
Under the terms of the Eximbank Guarantee, Eximbank will not be required to make
any payment with respect to a Loan Note held by the Trust unless and until the
Trustee has assigned to Eximbank all of such Trust's rights and interests in and
to the affected Loan Note held by the Trust and the Loan Agreement, and
delivered to Eximbank such Loan Note. Simultaneously with the fulfillment of
these requirements by the Trust, Eximbank will, if all other provisions of the
Eximbank Guarantee have been met, issue to the Trustee the corresponding
Eximbank Payment Certificates whereupon the Certificates will evidence
fractional undivided interests in the Eximbank Payment Certificates rather than
the Loan Notes for which such Eximbank Payment Certificates were exchanged. On
and after such date, the property of the Trust will consist of the Eximbank
Payment Certificates held by the Trustee for the Trust. The Eximbank Payment
Certificates will be direct obligations of Eximbank, backed by the full faith
and credit of the United States of America.
Upon the occurrence of a payment default prior to an Eximbank Payment
Event, the Trustee is not entitled to exercise any remedies against the
Borrower, the Aircraft, the Lessee or the Industrial and Commercial Bank of
China with respect to a defaulted Loan Note on behalf of the Trust and is not
authorized or entitled to accelerate the Loan Notes. Subsequent to the
occurrence of the Eximbank Payment Event, the Trustee will have the right,
subject to the terms of the Eximbank Guarantee, to proceed against Eximbank for
payments due under the related Eximbank Payment Certificates held by the Trust.
The Trustee is required to take all necessary action, as permitted or
required by the Trust Agreement, the Eximbank Guarantee and applicable law, or
to cause the Servicer to take such action, (i) to enforce payments due from
Eximbank under the Eximbank Guarantee, (ii) to enforce the Liquidity Facility
against the Liquidity Provider, and (iii) to apply amounts received in
accordance with the Trust Agreement for the benefit of the Certificateholders.
Trust Accounts and Investment of Funds
Contemporaneously with the execution of the Trust Agreement, the Trustee
shall establish a special purpose demand deposit account at its corporate office
in the name of the Trustee for its sole and exclusive benefit (the "Revenue
Account"). Pursuant to the Servicing Agreement, the Servicer shall, on or before
the Servicer Remittance Date for each period between Payment Dates (each, a
"Collection Period"), remit to the Revenue Account all collections received by
the Servicer during such Collection Period with respect to the Loans and shall,
concurrently therewith, deliver to the Trustee the Servicer Remittance Report.
"Servicer Remittance Report" means the report prepared by the Servicer before
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each Payment Date sent to the Trustee directing the Trustee to deposit funds
collected by the Servicer on the Loan Notes (or under the Liquidity Facility or
Eximbank Guarantee) into certain Trust Accounts, and specifying the amount of
such funds. "Servicer Remittance Date" means the date on which such Servicer
Remittance Report, and all corresponding funds collected during such Collection
Period are required to be sent to the Trustee. The Servicer shall also deposit
to the Revenue Account the proceeds, if any, received from a draw upon the
Liquidity Facility under the Servicing Agreement. The Company shall have no
legal, equitable or beneficial interest in the Revenue Account.
Contemporaneously with the execution of the Trust Agreement, the Trustee
shall establish a special purpose trust account at its corporate trust office in
the name of the Trustee for the benefit of the Certificateholders for receipt of
amounts transferred from the Revenue Account (the "Distribution Account"). Funds
in the Distribution Account shall not be commingled with any other monies. All
funds deposited from time to time in the Distribution Account pursuant to the
Trust Agreement shall be held by the Trustee as part of the Trust Estate.
After remitting required payments to the Revenue Account, the Trustee shall
then transfer to the Distribution Account amounts remaining in the Revenue
Account (other than amounts representing payments of Loans due after the Due
Date coinciding with such Payment Date).
The Trustee shall, concurrently with the establishment of the Distribution
Account establish, as subaccounts of the Distribution Account, the Payment
Accounts. The Trustee shall withdraw from time to time from the Distribution
Account funds equal to the amount required to be distributed to the Liquidity
Provider to reimburse the Liquidity Provider for any Advance. On each Payment
Date, the Trustee shall withdraw from the Distribution Account funds equal to
the Interest Amount as reflected on the Servicer Remittance Report and shall
deposit such funds into the identified Payment Accounts in accordance with the
instructions contained in the Servicer Remittance Report. In addition, on each
Payment Date, the Trustee shall withdraw from the Distribution Account funds
equal to the Principal Amount as reflected on the Servicer Remittance Report and
shall deposit such funds into the identified Payment Accounts in accordance with
the instructions contained in the Servicer Remittance Report.
Reports to Certificateholders
At least two Business Days prior to each Payment Date, the Servicer shall
deliver to the Trustee, the Company and S&P, and on each Payment Date the
Trustee shall furnish to each Holder (provided that the Trustee has received
such reports from the Servicer), the Monthly Servicer Report in the form
provided in Exhibit A to the Servicing Agreement with respect to activity in the
completed Collection Period immediately preceding the date on which such report
is to be provided.
On or before 120 days after the end of each fiscal year of the Servicer,
the Servicer shall deliver to the Company, the Trustee, each Holder and S&P an
Officer's Certificate to
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the effect that such Servicer has examined certain documents and records
relating to the servicing of the Loans under the Trust Agreement and the related
Servicing Agreement and that, on the basis of such examination, nothing came to
its attention which caused it to believe that the Servicer has accounted for
matters regarding the Loans, otherwise than in accordance with the Trust
Agreement and the related Servicing Agreement, except for such insignificant
exceptions or errors on records that, in the opinion of such Servicer, it is not
required to report.
The Servicer shall cause to be maintained books and records showing, and
shall report to the Trustee at least two Business Days prior to each Payment
Date, the information needed for the following calculations: (1) the amount of
principal and interest required to be distributed to Certificateholders on each
Payment Date, (2) the aggregate amount of interest accrued on the Loan Notes for
the period from the preceding Payment Date until the day preceding the related
Payment Date, (3) the unpaid principal amount of the Loan Notes after giving
effect to the payments to be made on such Payment Date, and (4) such other
information which the Trustee or any Holder of the Certificates may reasonably
request. Such books and records will be available for inspection by the Trustee,
the Company and any Holder upon reasonable notice at any time during normal
business hours.
Copies of all statements and reports furnished by the Trustee may be
obtained by Certificateholders by delivering a written request to the Trustee at
LaSalle National Bank, 135 LaSalle Street, Chicago, Illinois 60603, Attention:
Asset Backed Securities Trust Services or by telephoning the Trustee at
312/904-7326.
Additional Trusts
It is anticipated that the Company will establish additional Trusts from
time to time by means of a Supplemental Trust Agreement incorporating the
Standard Terms and Conditions of Trust Agreement for each such additional Trust.
Any Trust created by means of a Supplemental Trust Agreement incorporating the
Standard Terms and Conditions of Trust Agreement would issue a separate series
of certificates, which would represent undivided beneficial interests only in
the separate Trust created by the Supplemental Trust Agreement. A Trust so
created would acquire from the Company notes issued by a borrower and guaranteed
by Eximbank; however, the assets of such Trust would be held separate from the
assets of each other Trust and under no circumstances would holders of
Certificates of a particular series be entitled to payments from or attributable
to the assets of a Trust other than the Trust which issued such series of
Certificates.
Amendments
The Trust Agreement may be amended from time to time by the Trustee and the
Company, without the consent of any of the Cerfificateholders; provided that
such action will not cause a downgrading of the rating on the Certificates: (1)
to correct or amplify the description of any property at any time subject to the
lien of the Trust Agreement, or better to assure, convey and confirm unto the
Trustee any property subject or required to be subjected to the
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lien of the Trust Agreement, or to subject to the lien of the Trust Agreement
additional property; or (2) to evidence the succession of another Person to the
Company, and the assumption by such successor of the covenants of the Company in
the Trust Agreement and contained in the Certificates; or (3) to add to the
covenants of the Company, for the benefit of the Certificateholders, or to
surrender any right or power in the Trust Agreement conferred upon the Company;
or (4) to convey, transfer, assign, mortgage or pledge any property to or with
the Trustee; or (5) to cure any ambiguity, to correct or supplement any
provision in the Trust Agreement which may be defective or inconsistent with any
other provisions with respect to matters or questions arising under the Trust
Agreement, provided that such action shall not adversely affect the interests of
the Certificateholders; or (6) to evidence the succession of the Trustee; or (7)
to add to any events of default or events of termination (to the extent
applicable).
The Trust Agreement may also be amended from time to time by the Trustee and
the Company, with the consent of the Certificateholders of not less than 66-2/3%
in principal amount of the outstanding Certificates for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Trust Agreement or of modifying in any manner the rights of such
Certificateholders, provided, however, that no such amendment shall, without the
consent of the holders of all outstanding Certificates:
(1) change the stated maturity of the Certificates or the due date of
any scheduled Distribution, any installment of principal of, or any
installment of interest on, any Certificates, or reduce the scheduled
amount of any Distribution, or the principal amount thereof or the interest
rate or change any place of payment where, or the coin or currency in
which, any Certificates or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment; or
(2) reduce the percentage interest or principal amount of the
outstanding Certificates, the consent of the Certificateholders of which is
required for any such supplemental trust agreement, or the consent of the
Certificateholders of which is required for any waiver of compliance with
certain provisions of the Trust Agreement or their consequences; or
(3) impair or adversely affect the Trust Estate except as otherwise
permitted by the Trust Agreement; or
(4) modify or alter certain definitions or liability provisions
related to the Trustee; or
(5) modify any of the provisions of the Trust Agreement Section
governing supplemental trust agreements, except to increase the percentage
of Certificateholders required for any modification or wavier or to provide
that certain other provisions of the Trust Agreement cannot be modified or
waived without the consent of the Holder of all outstanding Certificates
affected thereby; or
(6) permit the creation of any lien ranking prior to or on a parity
with the lien of the Trust Agreement with respect to any part of the Trust
Estate or terminate the lien of the Trust Agreement on any property at any
time subject hereto or deprive
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the Holder of any Certificates of the security afforded by the lien of the
Trust Agreement; or
(7) modify certain provisions relating to events of default or events
of termination and the sale of the Trust Estate.
Promptly after the execution by the Company and the Trustee of any
supplemental trust agreement, the Company shall mail to the Certificateholders,
the Borrower, Eximbank and S&P a copy of such supplemental trust agreement.
No amendment, modification, supplement or rescission to or of, or waiver of
rights under, the Trust Agreement which materially adversely affects the
Borrower or Eximbank will be effective as against such person unless approved in
writing by such person.
The Trustee
LaSalle National Bank, the Trustee under the Trust Agreement, currently has
its Corporate Trust Office at 135 S. LaSalle Street, Chicago, Illinois 60603,
Attention: Asset Backed Securities Trust Services. The Trustee is obligated to
provide each Certificateholder with prompt written notice of any change in the
address of such office.
The Trustee may resign at any time by giving 30 days' written notice
thereof to the Company, the Borrower, Eximbank and to each Certificateholder.
The Trustee may be removed at any time by written action of Certificateholders
holding at least 66-2/3% in principal amount of the outstanding Certificates
upon 30 days' notice to the Trustee.
If at any time (i) the Trustee shall cease to be eligible to perform its
duties and shall fail to resign after written request therefor by any
Certificateholder, or (ii) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, any Certificateholder who
has been a registered Certificateholder for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee. If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of the Trustee for any cause with
respect to the Certificates, the Company by a Board Resolution shall promptly
appoint a successor Trustee or a Trustee with respect to the Certificates. If no
successor Trustee shall have been so appointed by the Company within 30 days of
notice of removal or resignation and shall have accepted appointment in the
manner provided, the Company, Trustee or any Certificateholder who has been a
registered Certificateholder for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the Certificates. The
Company shall give notice in the manner provided in the Trust Agreement of each
resignation and each removal of the Trustee and each appointment of a successor
Trustee with respect to the Certificates. Each notice shall include the name of
the
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successor Trustee and the address of its Corporate Trust Office. Any resignation
or removal of a Trustee and appointment of a successor Trustee does not become
effective until acceptance of the appointment by the successor Trustee and
transfer of the property of the Trust to such successor Trustee. See "Duties and
Immunities of the Trustee."
Duties and Immunities of the Trustee
The Trustee assumes no responsibility or liability for, and makes no
representations as to, the validity or sufficiency of, or as to the accuracy of
the recitals, if any, set forth in the Certificates (other than the
authentication thereof), the Loan Notes, the Eximbank Guarantee, the Purchase
Agreement, the Underwriting Agreement or the accuracy of the recitals in the
Trust Agreement.
The Trustee undertakes to perform such duties and only such duties as are
specifically set forth in the Trust Agreement and no implied covenants or
obligations shall be read into the Trust Agreement against the Trustee; and in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the trust of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of the Trust Agreement; but in the case of any such
certificates or opinions which by any provision of the Trust Agreement are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same and to determine whether or not they conform to the
requirements of the Trust Agreement. Subject to the foregoing sentence, the
Trustee will be liable for its own gross negligent action, its own gross
negligent failure to act or its own willful misconduct except for (i) good faith
errors in judgment (provided the Trustee was not negligent in ascertaining the
pertinent facts), (ii) actions taken or omitted in good faith pursuant to the
direction of Certificateholders as described below and (iii) no provision of the
Trust Agreement shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. If timely demands are
not made upon Eximbank, the Borrower, the Lessee and the Industrial and
Commercial Bank of China by the Servicer on behalf and in the name of the
Trustee (or by the Trustee directly), with respect to any default in payment of
an amount of principal or interest due under a Loan Note, and such failure
renders the Eximbank Guarantee unenforceable with respect to such payment, the
Trust Agreement provides that the Trustee will be irrevocably obligated to pay
the amount of that defaulted payment to the Trust. The Servicer has indemnified
the Trustee for the consequences of its failure to perform under the Servicing
Agreement in this regard.
Subject to the foregoing paragraph and the next sentence below, if no
payment default has occurred, the Trustee will have no responsibility or
liability for or with respect to the enforcement of the Loan Notes, of the
Liquidity Facility or of the Eximbank Guarantee, and, if no default under an
Eximbank Payment Certificate has occurred, the Trustee will have no
responsibility or liability for or with respect to the enforcement of the
Eximbank Payment Certificates. Except as described in the preceding paragraph
and except for such
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liability as is finally determined to have resulted from the Trustee's gross
negligence, willful misconduct or bad faith, no recourse may be had for any
claim based on any provision of the Trust Agreement, the Certificates, the
Underwriting Agreement, the Loan Notes, the Liquidity Facility, the Eximbank
Guarantee or the Purchase Agreement against the Trustee in its individual
capacity, and any such claim may be asserted solely against the Trust.
Upon the occurrence of a payment default prior to an Eximbank Payment Event
with respect to the Loan Notes, the Trustee will not be authorized or entitled
to accelerate the Loan Notes or exercise remedies against the Aircraft. If any
payment default under the Loan Notes occurs and is continuing, the Trustee is
(in addition to taking other steps described herein relating to the Liquidity
Facility and the Eximbank Guarantee) required to promptly mail notice thereof to
the relevant Certificateholders and to Eximbank. Subsequent to the occurrence of
an Eximbank Payment Event with respect to the Trust, the Trustee's recourse with
respect to the amounts of principal of and interest on the related Loan Notes
will be against Eximbank for payments due under the Eximbank Guarantee and
related Eximbank Payment Certificates issued by Eximbank at the time of such
Eximbank Payment Event.
Under the terms of the Eximbank Guarantee, Eximbank will not be required to
make a payment under the Eximbank Guarantee of amounts due on a Due Date which
were not paid by or on behalf of the Borrower on such Due Date if the Trustee
fails to make a written demand for payment on Eximbank within 150 calendar days
following such Due Date (but at least 30 days after such Due Date) and upon the
Borrower and the Lessee with respect to such Loan Note at least 15 calendar days
prior to such demand upon Eximbank. In addition, it is a condition of the
Eximbank Guarantee that a demand for payment must be made on the Industrial and
Commercial Bank of China, on behalf of Eximbank, at least 15 calendar days prior
to the date demand is made on Eximbank for payment under the Eximbank Guarantee.
Accordingly, the Servicing Agreement requires the Servicer, on behalf and in the
name of the Trustee, to make such timely demands upon Eximbank, the Borrower,
the Lessee and the Industrial and Commercial Bank of China. The Trustee in any
event is required to make such demands should the Servicer fail to do so.
The Trustee's fees and certain expenses are to be prepaid by the Borrower
in respect of U.S. Trade Trust Series 1996-A and will cover (a) compensation for
all services to be rendered by the Trustee under or as contemplated by the Trust
Agreement; and (b) certain expenses, disbursements and advances to be incurred
or made by the Trustee in its capacity as Trustee under or as contemplated by
the Trust Agreement (including the fees and expenses of the Trustee's agents and
counsel and auditors). No expenses of the Trustee incurred after the initial
issuance of Certificates will be payable from the scheduled payments on the Loan
Notes. If the Trustee were to be replaced by a successor trustee, any unearned
portion of the Trustee's prepaid fees and expenses would be made available to
such successor trustee.
Potential investors should be aware that the Trustee and the Underwriter
are both affiliates of ABN AMRO Bank N.V., which is the Seller, Servicer and
Liquidity Provider. Although not anticipated by any of such parties, it is
theoretically possible that conflicts of
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interest may arise between the Trustee and the Servicer. Any such conflict would
not, however, relieve the Trustee or the Servicer from their respective legal
obligations owing to the Certificateholders under the Trust Agreement and
Servicing Agreement.
Certain Federal Income Tax Consequences
The following is a general discussion of certain anticipated Federal income
tax consequences of the purchase, ownership and disposition of the Certificates.
The summary is based upon laws, regulations, rulings and decisions now in effect
and regulations which have been proposed, all of which are subject to change,
and focuses primarily on investors who will hold the Certificates as "capital
assets" (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986 (the "Code"). This summary does not
address the tax consequences to all categories of investors, some of which (for
example, non-United States persons, insurance companies, and pension funds or
other tax-exempt organizations) may be subject to special rules. Investors
should consult their own tax advisers in determining the Federal, state, local
and any other tax consequences to them of the purchase, ownership and
disposition of the Certificates.
Tax Status of the Trust
In the opinion of Chapman and Cutler (special United States tax counsel to
the Trust), under existing Federal income tax law the Trust will not be taxable
as an association or a corporation and should be taxed as a grantor trust; each
Certificateholder will be considered as owning a pro rata share of each asset of
the Trust in the proportion that the Principal Amount of the Certificates held
by it bears to the aggregate Imputed Principal Amount then outstanding; each
Certificateholder will recognize taxable income derived from the assets held by
the Trust as if such Certificateholder directly held its pro rata portion of the
assets of the Trust, as more fully described under "Income and Deductions--
Income of the Certificateholders" below; and each Certificateholder will have a
taxable event when an asset of the Trust (including any Loan Note) is disposed
of (whether by sale, taxable exchange, redemption, payment at maturity or
otherwise) or when the Certificateholder's Certificate is redeemed or sold. A
Certificateholder must allocate the cost of its Certificates among all of the
assets of the Trust, including the Loan Notes (in accordance with the proportion
of the relative fair market values of such assets as of the valuation date
nearest the date such Certificateholder acquired its Certificate) in order to
determine its initial tax basis for its pro rata portion in each asset held by
the Trust, including the Loan Notes. Such tax basis is adjusted upward by the
amount of original issue discount, if applicable, and market discount, if any,
which the Certificateholder elects to include in income as it accrues, and
downward by the amount of amortized acquisition premium, if any, which the
Certificateholder has properly elected to amortize under the Code, on the Loan
Notes held by the Trust.
Income and Deductions
Income of the Certificateholders. Each Certificateholder will generally be
required to include in taxable income, based upon such Certificateholder's
method of tax accounting, its
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pro rata share of the income of the Trust, including interest earned on the Loan
Notes, and any gain or loss upon collection or disposition of the Loan Notes,
increased by the amount of market discount, if any, included in income as it
accrues, if the Certificateholder so elects and reduced by the amount of
acquisition premium, if any, as it is amortized, if the Certificateholder has
elected to amortize acquisition premium under Section 171 of the Code.
Limitations on Deductibility of Trust Expenses by Certificateholders. Each
Certificateholder's pro rata share of each expense paid by the Trust is
deductible by the Certificateholder to the same extent as though the expense had
been paid directly by such Certificateholder. It should be noted that as a
result of the Tax Reform Act of 1986, certain miscellaneous itemized deductions,
such as investment expenses, tax return preparation fees and employee business
expenses will be deductible by an individual, estate or trust only to the extent
that they exceed 2% of such taxpayer's adjusted gross income. Certificateholders
may be required to treat certain expenses of the Trust as miscellaneous itemized
deductions subject to this limitation. To the extent that a Certificateholder is
not permitted to deduct certain expenses of the Trust, the taxable income of the
Certificateholder attributable to its Certificates will exceed the net cash
distributions related to such income.
Discount and Premium
The Loan Notes, when originally issued by the Borrower, are believed to
have had adequate stated interest and it is believed that the original issue
discount rules of the Code should not severally apply to the Loan Notes.
As a result of the changes in the terms of the obligations of the Borrower
on the date the Loan Notes are acquired by the Trust, special United States tax
counsel believes that, for U.S. Federal income tax purposes, the Trust should be
treated as holding debt obligations of the Borrower newly issued on such
acquisition date. The Trust will adopt such view for purposes of tax reporting,
and the following discussion assumes the correctness of such view. If a contrary
view proved to be correct, the timing of interest income may vary from that
described below although the amount of such variation should not in most cases
be material. Certificateholders should consult their tax advisors regarding the
possible applicability of any contrary view and the consequences of any such
view as to timing of income and possibly other matters.
Each Certificateholder's pro rata share of income with respect to the debt
obligations of the Borrower held by the Trust will be treated as income from
sources without the United States for U.S. Federal income tax purposes. Such
income will be taken into account in determining the maximum amount of foreign
tax credit that a Certificateholder entitled to claim foreign tax credits may
claim for federal tax purposes. If as a result of an Eximbank Payment Event
(which for this purpose includes any acceleration of the Loan Notes or an Event
of Loss), an Eximbank Payment Certificate is substituted for the Loan Notes,
however, it is possible that the Internal Revenue Service could contend that
such substitution should be treated as an exchange for Federal income tax
purposes, with the result that each Certificateholder could be required to
recognize gain or loss as if such Certificateholder had
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actually exchanged his interest in the Loan Notes for an interest in the
Eximbank Payment Certificate. If such substitution were treated as an exchange,
each Certificateholder's pro rata share of income with respect to the Eximbank
Payment Certificate would be treated thereafter as income from sources within
the United States for Federal income tax purposes and would affect the
calculation of the maximum amount of foreign tax credit that a Certificateholder
entitled to claim foreign tax credits may claim.
In general, the Borrower is required to pay additional amounts if necessary
so that each scheduled payment of principal or interest on its Loan Notes, after
any required deduction or withholding of taxes, will equal the amount then due
and payable. Any such additional amounts will generally be treated as additional
income to the Certificateholders. Subject to certain limitations and exceptions,
each Certificateholder will be entitled to credit against its U.S. Federal
income tax liability its pro rata share of tax deducted or withheld with respect
to interest paid by the Borrower on its Loan Notes held by the Trust.
Acquisition Premium. If, as of the date a Certificateholder acquires its
Certificate, the Certificateholder's tax basis of its pro rata portion in any
Loan Notes held by the Trust exceeds the then outstanding principal amount of
such Loan Notes, such excess would be considered "acquisition premium" which may
be amortized by the Certificateholder at the Certificateholder's election as
provided in Section 171 of the Code. Certificateholders should consult their tax
advisers regarding whether such election should be made and the manner of
amortizing acquisition premium.
Market Discount. If, as of the date a Certificateholder acquires its
Certificate, the Certificateholder's tax basis of its pro rata portion in any
Loan Notes held by the Trust is less than the then outstanding principal amount
of such Loan Notes, such difference would be considered "market discount" unless
it is less than a "de minimis" amount specified in the Code. Market discount
accrues daily computed on a straight line basis, unless the Certificateholder
elects to calculate accrued market discount under a constant yield method.
Certificateholders should consult their tax advisers as to the amount of market
discount which accrues and the manner in which market discount is recognized.
Accrued market discount is generally includible in taxable income to the
Certificateholders for Federal income tax purposes upon the receipt by the Trust
of principal payments on the Loan Notes, on the sale, maturity or disposition of
such Loan Notes by the Trust, and on the sale by a Certificateholder of all or a
portion of its Certificate, unless the Certificateholder elects to include the
accrued market discount in taxable income as such discount accrues. If a
Certificateholder does not elect to include market discount in taxable income
annually as it accrues, deductions for any interest expense incurred by the
Certificateholder which is incurred to purchase or carry its Certificates will
be reduced by such accrued market discount. In general, the portion of any
interest expense which is not currently deductible would ultimately be
deductible when the accrued market discount is included in income.
Certificateholders should consult their tax advisors as to the method in which
market discount is included in income, the advisability of entering any
elections relating thereto and the potential impact on interest expense
deductions.
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<PAGE>
Computation of the Certificateholder's Tax Basis. The tax basis of a
Certificateholder with respect to its interest in the Loan Notes is increased by
the amount of accrued market discount, if any, previously included in taxable
income by such Certificateholder and reduced by the amount of amortized
acquisition premium, if any, provided that the Certificateholder had properly
elected to amortize acquisition premium under Section 171 of the Code. A
Certificateholder's tax basis in its Certificate will equal its tax basis in its
pro rata portion of all of the assets of the Trust.
Recognition of Taxable Gain or Loss upon Disposition of Assets by the Trust
or Disposition of Certificates. A Certificateholder will recognize taxable gain
(or loss) when all or part of its pro rata portion in an asset of the Trust is
disposed of in a taxable transaction for an amount greater (or less) than its
tax basis therefor. Any gain recognized on a sale or exchange not constituting a
realization of accrued market discount and any loss will, under current law,
generally be capital gain or loss. As previously discussed, gain realized on the
disposition of the interest of a Certificateholder in any Loan Note deemed to
have been acquired with market discount will be treated as ordinary income to
the extent the gain does not exceed the amount of accrued market discount not
previously taken into income. In general, any capital gain or loss arising from
the disposition of a Loan Note by the Trust or the disposition of Certificates
by a Certificateholder will be short-term capital gain or loss unless the
Certificateholder has held its Certificates for more than one year, in which
case such capital gain or loss will be long-term. For taxpayers other than
corporations, net capital gains are currently subject to a maximum stated
marginal tax rate of 28 percent. However, it should be noted that legislative
proposals are introduced from time to time that affect tax rates and could
affect relative differences at which ordinary income and capital gains are
taxed. The Revenue Reconciliation Act of 1993 includes a provision that would
recharacterize capital gains as ordinary income in the case of certain financial
transactions that are "conversion transactions." Certificateholders should
consult their tax advisers regarding the potential effect of this provision on
any gain recognized in connection with their Certificates.
If a Certificateholder disposes of its Certificate (or a portion thereof),
the Certificateholder is deemed thereby to have disposed of its entire (or a
related portion) interest in all Trust assets including its pro rata portion (or
related portion) of all of the Loan Notes represented by the Certificate. This
may result in a portion of the gain, if any, on such sale being taxable as
ordinary income under the market discount rules (assuming no election was made
by the Certificateholder to include market discount in income as it accrues) as
previously discussed.
Foreign Certificateholders
A Certificateholder who is a foreign investor (i.e., an investor other than
a U.S. citizen or resident or a U.S. corporation, partnership, estate or trust)
will not be subject to United States Federal income taxes, including withholding
taxes, on interest income (including original issue discount, if any) on, or any
gain from the sale or other disposition of, his pro rata interest in the Loan
Notes held by the Trust or the sale of his Certificates provided that all of the
following conditions are met: (i) the interest income or gain is not
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<PAGE>
effectively connected with the conduct by the foreign investor of a trade or
business within the United States; (ii) the interest income is not from sources
within the United States (which is believed to be the case with respect to all
of the Loan Notes of the Borrower held by the Trust); (iii) with respect to any
gain, the foreign investor (if an individual) is not present in the United
States for 183 days or more during his or her taxable year; and (iv) the foreign
investor provides all certification which may be required of his status
(generally, certification on an IRS Form W-8 which must be filed with the
Trustee and refiled every three calendar years thereafter). Foreign investors
should consult their tax advisers with respect to the United States tax
consequences of ownership of Certificates. On December 7, 1995, the U.S.
Treasury Department released proposed legislation that, if adopted could affect
the United States federal income taxation of non-United States
Certificateholders and the portion of the Trust's income allocable to such non-
United States Certificateholders. Similar language which would be effective on
the date of enactment was included in the Health Insurance Reform Bill proposed
by the U.S. Senate on April 23, 1996.
In the event that an Eximbank Payment Event results in the income received
by a Certificateholder being treated as income from sources within the United
States, a foreign investor should be exempt from U.S. withholding tax of 30%
under the portfolio interest rules. In order to claim the portfolio interest
exemption, an affected Certificateholder must certify (on an IRS Form W-8) that
it is not a United States person and that its income is not effectively
connected with a U.S. trade or business. For this purpose, a "United States
person" means a citizen or resident of the U.S., a corporation, partnership, (or
other entity created or organized under the laws of the U.S. or any political
subdivision thereof,) or an estate or trust the income of which is includible in
gross income for U.S. federal income tax purposes, regardless of its source.
Backup Withholding
Each Certificateholder (other than a foreign investor who has properly
provided the certifications described above) will be requested to provide the
Certificateholder's taxpayer identification number to the Trustee and to certify
that the Certificateholder has not been notified that payments to the
Certificateholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Certificateholder will be subject
to back-up withholding.
State and Local Tax Considerations
Certificateholders should consult their own tax advisers regarding the
potential state, local and foreign tax consequences relating to the Trust and
the Certificates.
ERISA Considerations
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Code prohibit certain pension, profit
sharing, and other
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<PAGE>
employee benefit plans, individual retirement accounts and annuities and
employee annuity plans (a "Plan" or "Plans") from engaging in certain
transactions involving "plan assets" with persons who, with respect to such
Plan, are "parties in interest" under ERISA or "disqualified persons" under the
Code. A violation of these "prohibited transaction" rules may generate excise
taxes under the Code and other liabilities under ERISA for such persons. In
addition, fiduciaries of Plans subject to ERISA are subject to the fiduciary
responsibility rules of Part 4 of Title I of ERISA, including the requirements
of investment prudence and diversification and the requirement that a Plan's
investments be made in accordance with the documents governing the Plan.
Under regulations issued by the Department of Labor, the underlying assets
of certain entities in which Plans make equity investments could be regarded as
"plan assets." Under certain circumstances, the purchase of Certificates by
Plans could be viewed as equity investments that cause the assets of the Trust
to be treated as "plan assets." If the Trust's assets are "plan assets," the
Trustee would be subject to the fiduciary responsibility rules of Part 4 of
Title I of ERISA, including the prohibited transaction rules discussed above.
However, in light of the limited discretionary investment authority of the
Trustee and the otherwise essentially passive nature of the assets of the Trust,
and the custodial and ministerial nature of the responsibilities and functions
to be performed by the Trustee (other than with respect to its limited
investment authority), a non-exempt prohibited transaction or other fiduciary
violation should generally not occur merely because the assets of the Trust are
regarded as "plan assets."
Regardless of whether the Trust is deemed to hold plan assets of Plans that
are Certificateholders, possible violations of the prohibited transaction rules
of the Code and the prohibited transaction and fiduciary responsibility rules of
ERISA could occur if Certificates are purchased with assets of any Plan if the
Underwriter, the Seller, the Servicer, the Trustee, the Lessee or the Borrower,
or any of their affiliates, is a party in interest or disqualified person with
respect to any such Plan, unless such acquisition is subject to a statutory or
administrative exemption, such as Prohibited Transaction Class Exemption ("PTE")
75-1, which exempts certain transactions involving employee benefit plans and
certain broker-dealers, reporting dealers and banks; PTE 91-38 (formerly PTE 80-
51) which exempts certain transactions between bank collective investment funds
and parties in interest; PTE 90-1 (formerly PTE 78-19), which exempts certain
transactions with insurance-company pooled separate accounts; PTE 84-14, which
exempts certain transactions effected on behalf of a plan by a "qualified
professional asset manager"; or pursuant to any other available exemption.
None of the Underwriter, the Seller, the Servicer, the Trust, the Trustee,
Eximbank, the Company, the Lessee nor the Borrower, nor any of their affiliates,
express any opinion or are giving any assurance regarding the applicability of
any of the foregoing Prohibited Transaction Exemptions (or any other exemption).
Each Certificateholder should determine for itself whether and to what extent
such exemption (as well as any other possibly applicable exemption) is
applicable to the acquisition, holding or disposition of Certificates in general
as well as to the acquisition, holding or disposition of Certificates by any
particular Plan.
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<PAGE>
The foregoing discussion is general in nature and is not intended to be all
inclusive. Any fiduciary of a Plan considering the purchase of Certificates
should consult its legal advisors regarding the appropriateness of such purchase
under ERISA (and, particularly in the case of non-ERISA plans, concerning any
state law or Code considerations).
Underwriting
Subject to the terms and conditions of an Underwriting Agreement (the
"Underwriting Agreement") between the Company and the Underwriter, the
Underwriter has agreed to purchase from the Company, and the Company has agreed
to sell to the Underwriter, Certificates in an aggregate principal amount equal
to $101,672,199.30
The Underwriting Agreement provides that the obligations of the Underwriter
thereunder are subject to certain conditions precedent. The Company has agreed
in the Underwriting Agreement to indemnify the Underwriter and its controlling
persons against certain liabilities, including liabilities under the Securities
Act, and to contribute to payments that the Underwriter may be required to make
in respect thereof. The nature of the Underwriter's obligations under the
Underwriting Agreement is such that they are obligated to purchase all of the
Certificates, if any are purchased.
The Underwriter proposes initially to offer the Certificates to the public
at the offering price set forth on the cover page of this Prospectus. After the
initial public offering, such public offering price may be changed.
The Underwriter is an affiliate of the Seller. The Seller is also the agent
of a lending group, which includes the Seller, in connection with a bank loan
incurred by the Borrower to finance the portion of the purchase price of the
Aircraft that is not eligible for a guarantee from Eximbank. The Underwriter is
also an affiliate of the Servicer, the Trustee and the Liquidity Provider.
The Certificates are a new issue of securities with no established trading
market. The Company has been advised by the Underwriter that the Underwriter
intends, but is not obligated, to make a market in the Certificates.
Accordingly, there can be no assurance that a secondary market will develop or,
if a secondary market does develop, that it will continue.
The provisions of Rule 2710(c)(8) of the National Association of Securities
Dealers, Inc. apply to this offering.
Legal Matters
Certain legal matters will be passed upon (a) for the Trustee by Chapman
and Cutler, Chicago, Illinois, (b) for the Underwriter by Chapman and Cutler,
Chicago, Illinois, (c) for the Company Chapman and Cutler, Chicago, Illinois and
(d) for the Company and the Trust by Chapman and Cutler, Chicago, Illinois.
Chapman and Cutler, as special United
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<PAGE>
States tax counsel to the Trust, will render an opinion regarding certain United
States Federal tax consequences. Chapman and Cutler will also render an opinion
with respect to certain matters for ABN AMRO Bank N.V. in its capacities as
Seller, Servicer and Liquidity Provider. Clifford Chance will also render an
opinion with respect to certain matters for ABN AMRO Bank N.V. in its capacity
as Liquidity Provider.
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<PAGE>
Annex A
-------
SCHEDULE OF DISTRIBUTIONS
ON THE
____% TRADE TRUST CERTIFICATES, SERIES 1996-A
AGGREGATE AGGREGATE AGGREGATE
PRINCIPAL INTEREST PRINCIPAL AND
PAYMENT DATE PAYMENT PAYMENT INTEREST PAYMENT
<PAGE>
Annex B
-------
<TABLE>
<CAPTION>
INDEX OF DEFINED TERMS
<S> <C>
Aircraft 7 and 12
Beneficial Owner 21
Borrower 1 and 18
Business Day 13 and 16
Certificateholders 1
Certificates 2
Code 10 and 31
Collection Period 24
Commission 1
Company 1 and 2
Cutoff Date 9
Distribution Account 20 and 25
DTC 1 and 20
DTC Participants 21
Due Dates 6
ERISA 10 and 35
Event of Default 6
Event of Loss 4
EXIM Act 15
Eximbank 1
Eximbank Guarantee 8
Eximbank Payment Certificates 13
Eximbank Payment Event 13
Expiration Date 17
Indirect Participants 21
Lender 12
Lessee 1 and 18
Liquidity Facility 1 and 17
Liquidity Provider 17
Loan Agreement 12
Loan Notes 1
Payment Dates 3
Plan 10 and 35
Plans 10 and 35
PTE 36
Purchase Agreement 1 and 16
Rating Agency 4
Record Date 19
Replacement Liquidity Facility 17
Revenue Account 24
S&P 4
Seller 1
Servicer 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Servicer Remittance Date 25
Servicer Remittance Report 24
Trust 1 and 2 and 18
Trust Agreement 1 and 18
Trustee 1 and 2 and 18
Underwriting Agreement 37
</TABLE>
<PAGE>
===============================================================================
No person has been authorized to give any information or to make any
representation not contained in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Seller, the Borrower, the Lessee, the Industrial and Commercial Bank of
China, the Company, the Trust, the Trustee, Eximbank, or the Underwriter.
Neither the delivery of this Prospectus nor any sale made hereunder shall under
any circumstances create an implication that there has been no change in the
affairs of the Seller, the Borrower, the Lessee, the Industrial and Commercial
Bank of China, the Company, the Trust, the Trustee, Eximbank or the Underwriter
since the date hereof. This Prospectus 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.
---------------------------------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
Reports to Certificateholders.................................................1
Available Information.........................................................1
Prospectus Summary............................................................2
Overview of the Transaction..................................................11
Use of Proceeds..............................................................12
The Eximbank Guarantee.......................................................12
The Loan Notes...............................................................16
The Liquidity Facility.......................................................17
The Trust....................................................................18
The Trustee..................................................................18
The Borrower and the Lessee..................................................18
The Seller and the Servicer..................................................18
The Company..................................................................19
Description of the Certificates..............................................19
Certain Federal Income Tax Consequences......................................31
ERISA Considerations.........................................................35
Underwriting.................................................................37
Legal Matters................................................................37
</TABLE>
------------------------------------
Until _______, 1996 (90 days after the date of this Prospectus), all
dealers effecting transactions in the Certificates, whether or not participating
in this distribution, may be required to deliver this Prospectus. This is in
addition to the obligations of dealers to deliver a Prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
$101,672,199.30
U.S. TRADE TRUST, SERIES 1996-A
____% TRADE TRUST CERTIFICATES
SERIES 1996-A
_________________________________
PROSPECTUS
OCTOBER , 1996
ABN AMRO SECURITIES (USA) INC.
================================================================================
