<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 22, 2000
(Date of earliest event reported)
ONYX ACCEPTANCE FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 333-92245 33-0639768
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
27051 Towne Centre Dr., Suite 200
Foothill Ranch, California 92610
(Address of Principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (949) 465-3500
<PAGE> 2
Item 5. Other Events.
Reference is hereby made to the Registrant's Registration Statement on
Form S-3 (File No. 333-92245) filed with the Securities and Exchange Commission
(the "Commission") on December 7, 1999, Amendment No. 1 thereto filed with the
Commission on January 18, 2000, and Amendment No. 2 thereto filed with the
Commission on February 10, 2000 (as amended, the "Registration Statement"),
pursuant to which the Registrant registered $2,000,000,000 aggregate principal
amount of its auto loan backed notes and auto loan backed certificates, issuable
in various series, for sale in accordance with the provisions of the Securities
Act of 1933, as amended. Reference is also hereby made to the Prospectus and the
related Prospectus Supplement (collectively, the "Prospectus"), which will be
filed with the Commission pursuant to Rule 424(b)(5), with respect to the
Registrant's Auto Loan Backed Notes and Auto Loan Backed Certificates, Series
2000-A (the "Offered Securities").
The Registrant is filing this Current Report on Form 8-K to provide
prospective investors with certain materials which constitute "ABS Term Sheets"
as described in the no-action letter dated February 27, 1995 issued by the
Division of Corporation Finance of the Commission to the Public Securities
Association, the filing of which materials is a condition of the relief granted
in such letters (such materials being the "ABS Term Sheets"). The ABS Term
Sheets are set forth in Exhibit 99.1 hereto.
The assumptions used in preparing the ABS Term Sheets were based upon a
preliminary compilation of the underlying collateral and the estimated principal
amount and other features of the Offered Securities. The actual features of the
Offered Securities and a detailed description of the final constituency of the
underlying collateral will be set forth in the Prospectus and in a Current
Report on Form 8-K to be filed with the Commission.
Due to the preliminary nature of the information regarding the
collateral and the structure of the Offered Securities used in preparing the ABS
Term Sheets, no assurance can be given as to either the ABS Term Sheets' or the
underlying assumptions' accuracy, appropriateness or completeness in any
particular context; nor can assurance be given as to whether the ABS Term Sheets
and/or the assumptions upon which they are based reflect present market
conditions or future market performance. These ABS Term Sheets should not be
construed as either projections or predictions or as legal, tax, financial or
accounting advice.
The specific characteristics of the Offered Securities may differ from
those shown in the ABS Term Sheets due to differences between the actual
collateral and the preliminary collateral used in preparing the ABS Term Sheets.
As noted above, the principal amount and designation of any security described
in the ABS Term Sheets are subject to change prior to issuance.
Please be advised that auto loan backed securities may not be
appropriate for all investors. Potential investors must be willing to assume,
among other things, market price volatility, prepayments, yield curve and
interest rate risks. Investors should make every effort to consider the risks of
these securities.
-2-
<PAGE> 3
Any statement or information contained in the ABS Term Sheets shall be
deemed to be modified or superseded for purposes of the Prospectus and the
Registration Statement by statements or information contained in the Prospectus.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
----------- -----------
99.1 ABS Term Sheet
-3-
<PAGE> 4
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
ONYX ACCEPTANCE FINANCIAL CORPORATION
February 23, 2000 By: /s/ DON P. DUFFY
-----------------------------------
Don P. Duffy
Executive Vice President and Chief
Financial Officer
-4-
<PAGE> 5
Exhibit Index
Exhibit
No. Description
- -------- -----------
Exhibit 99.1 ABS Term Sheet
-5-
<PAGE> 1
EXHIBIT 99.1
Onyx Acceptance Owner Trust 2000-A
RETAIL AUTO ABS
$430,000,000 ASSET-BACKED SECURITIES
ONYX ACCEPTANCE FINANCIAL CORPORATION
SELLER
ONYX ACCEPTANCE CORPORATION
SERVICER
$72,000,000 Class A-1 [ ]% Asset-Backed Notes
$132,000,000 Class A-2 [ ]% Asset-Backed Notes
$107,000,000 Class A-3 [ ]% Asset-Backed Notes
$93,200,000 Class A-4 [ ]% Asset-Backed Notes
$25,800,000 [ ]% Asset-Backed Certificates
Term Sheet
The information herein is preliminary, and will be superseded by the applicable
prospectus supplement and by any other information subsequently filed with the
Securities and Exchange Commission. The information addresses only certain
aspects of the applicable security's characteristics and thus does not provide a
complete assessment. As such, the information may not reflect the impact of all
structural characteristics of the security. The assumptions underlying the
information, including structure and collateral, may be modified from time to
time to reflect changed circumstances. The attached term sheet is not intended
to be a prospectus and any investment decision with respect to the Notes or
Certificates should be made by you based solely upon all of the information
contained in the final prospectus and final prospectus supplement. Under no
circumstances shall the information presented constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the securities in
any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of such
jurisdiction. The securities may not be sold nor may an offer to buy be accepted
prior to the delivery of a final prospectus and final prospectus supplement
relating to the securities. All information described herein is preliminary,
limited in nature and subject to completion or amendment. No representation is
made that the above referenced securities will actually perform as described in
any scenario presented. A final prospectus and final prospectus supplement may
be obtained by contacting the Salomon Smith Barney Syndicate Desk at (212)
723-6171.
<PAGE> 2
Onyx Acceptance Owner Trust 2000-A
RETAIL AUTO ABS
$430,000,000 ASSET-BACKED SECURITIES
ONYX ACCEPTANCE FINANCIAL CORPORATION
SELLER
ONYX ACCEPTANCE CORPORATION
SERVICER
$72,000,000 Class A-1 [ ]% Asset-Backed Notes
$132,000,000 Class A-2 [ ]% Asset-Backed Notes
$107,000,000 Class A-3 [ ]% Asset-Backed Notes
$93,200,000 Class A-4 [ ]% Asset-Backed Notes
$25,800,000 [ ]% Asset-Backed Certificates
Term Sheet
The attached information (the "Term Sheet") is privileged and confidential and
is intended for use by the addressee only. The Term Sheet is furnished to you
solely by Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch")
and not by the issuer of the securities or any of its affiliates. The issuer of
these securities has not prepared or taken part in the preparation of these
materials. Neither Merrill Lynch, the issuer of the securities nor any of its
affiliates makes any representation as to the accuracy or completeness of the
information herein. The information herein is preliminary, and will be
superseded by the applicable prospectus supplement and by any other information
subsequently filed with the Securities and Exchange Commission. The information
herein may not be provided by the addressee to any third party other than the
addressee's legal, tax, financial and/or accounting advisors for the purposes of
evaluating said material.
Although a registration statement (including the prospectus) relating to the
securities discussed in this communication has been filed with the Securities
and Exchange Commission and is effective, the final prospectus supplement
relating to the securities discussed in this communication has not been filed
with the Securities and Exchange Commission. This communication shall not
constitute an offer to sell or the solicitation of any offer to buy nor shall
there be any sale of the securities discussed in this communication 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.
Prospective purchasers are referred to the final prospectus and prospectus
supplement relating to the securities discussed in this communication for
definitive information on any matter discussed in this communication. A final
prospectus and prospectus supplement may be obtained by contacting the Merrill
Lynch Trading Desk at (212) 449-3659.
Please be advised that asset-backed securities may not be appropriate for all
investors. Potential investors must be willing to assume, among other things,
market price volatility, prepayments, yield curve and interest rate risk.
Investors should fully consider the risk of an investment in these securities.
If you have received this communication in error, please notify the sending
party immediately by telephone and return the original to such party by mail.
<PAGE> 3
Onyx Acceptance Owner Trust 2000-A
RETAIL AUTO ABS
$430,000,000 ASSET-BACKED SECURITIES
ONYX ACCEPTANCE FINANCIAL CORPORATION
SELLER
ONYX ACCEPTANCE CORPORATION
SERVICER
$72,000,000 Class A-1 [ ]% Asset-Backed Notes
$132,000,000 Class A-2 [ ]% Asset-Backed Notes
$107,000,000 Class A-3 [ ]% Asset-Backed Notes
$93,200,000 Class A-4 [ ]% Asset-Backed Notes
$25,800,000 [ ]% Asset-Backed Certificates
Term Sheet
The information herein is preliminary, and will be superseded by the applicable
prospectus supplement and by any other information subsequently filed with the
Securities and Exchange Commission. The information addresses only certain
aspects of the applicable security's characteristics and thus does not provide a
complete assessment. As such, the information may not reflect the impact of all
structural characteristics of the security. The assumptions underlying the
information, including structure and collateral, may be modified from time to
time to reflect changed circumstances. The attached term sheet is not intended
to be a prospectus and any investment decision with respect to the Notes or
Certificates should be made by you based solely upon all of the information
contained in the final prospectus and final prospectus supplement. Under no
circumstances shall the information presented constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the securities in
any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of such
jurisdiction. The securities may not be sold nor may an offer to buy be accepted
prior to the delivery of a final prospectus and final prospectus supplement
relating to the securities. All information described herein is preliminary,
limited in nature and subject to completion or amendment. No representation is
made that the above referenced securities will actually perform as described in
any scenario presented. A final prospectus and final prospectus supplement may
be obtained by contacting the Chase Securities Trading Desk at (212) 834-3720.
<PAGE> 4
ONYX ACCEPTANCE OWNER TRUST 2000-A
Subject to Revision
TERM SHEET DATED FEBRUARY 22, 2000
THE TRUST ............................. Onyx Acceptance Owner Trust 2000-A, a
Delaware business trust, will issue and
sell the securities. The trust will be
established by a trust agreement among
the seller, the owner trustee and the
trust agent.
THE SELLER ............................ Onyx Acceptance Financial Corporation, a
Delaware corporation and a wholly-owned,
limited purpose subsidiary of Onyx
Acceptance Corporation. The seller's
principal executive offices are located
at 27051 Towne Centre Drive, Suite 200,
Foothill Ranch, California 92610, and
its telephone number is (949) 465-3500.
THE SERVICER .......................... Onyx Acceptance Corporation, a Delaware
corporation. The servicer's principal
executive offices are located at 27051
Towne Centre Drive, Suite 100, Foothill
Ranch, California 92610, and its
telephone number is (949) 465-3900.
THE INDENTURE TRUSTEE ................. The Chase Manhattan Bank, as indenture
trustee under the indenture.
THE OWNER TRUSTEE ..................... Bankers Trust (Delaware), as owner
trustee under the trust agreement.
THE TRUST AGENT ....................... The Chase Manhattan Bank, as agent of
the trust and the owner trustee under
the trust agreement.
INSURER ............................... MBIA Insurance Corporation will
unconditionally and irrevocably
guarantee the timely payment of interest
and the ultimate payment of principal on
the securities.
CLOSING DATE .......................... The trust expects to issue the
securities on or about February 29,
2000.
THE NOTES ............................. The trust will issue the Class A-1
Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class A-4 Notes, as
described on the cover page, under an
indenture between the trust and the
indenture trustee. The notes will be
non- recourse obligations of the trust
and will be secured by the trust
property described herein.
THE CERTIFICATES ...................... The trust will issue the certificates,
as described on the cover page, under
the trust
2
<PAGE> 5
agreement. The certificates will
represent undivided beneficial ownership
interests in the trust.
THE RESIDUAL INTERESTS ................ The trust will issue certificates
representing the residual interests in
the trust. The residual interests are
not offered for sale.
TRUST PROPERTY ........................ The trust's assets will include:
o a pool of fixed rate motor vehicle
retail installment sales contracts
and installment loan agreements, each
of which was purchased from the
seller and each of which is secured
by a new or used automobile,
light-duty truck or van;
o documents relating to the contracts;
o monies received with respect to the
contracts on or after the cut-off
date applicable to such contracts;
o security interests in the financed
vehicles and the rights to receive
proceeds from claims under insurance
policies covering the financed
vehicles or the individual obligors
under each related contract;
o all amounts on deposit in specified
accounts, excluding any investment
income credited to the collection
account which will be paid to the
servicer;
o the right of the seller to cause Onyx
to repurchase contracts under
specified circumstances; and
o all proceeds of the foregoing.
Under the indenture, the trust will
grant a security interest in the trust
property, excluding the certificate
distribution account, in favor of the
indenture trustee, on behalf of the
noteholders, and for the benefit of MBIA
Insurance Corporation in support of the
obligations owing to MBIA under the
insurance agreement.
THE CONTRACTS ......................... The trust's main source of funds for
making payments on the securities will
be collections on a pool of fixed rate
motor vehicle retail installment sales
contracts and installment loan
agreements. The trust will acquire
initial contracts with a total principal
balance of $338,222,112.16 as of
February 1, 2000, the cut-off date for
these initial contracts.
The trust will acquire additional
contracts that have been or will be
originated or purchased after the
cut-off date for the initial contracts
but before February 22, 2000, the
cut-off date for these additional
contracts. The total principal balance
of the initial contracts as of February
1, 2000 and the additional contracts as
of February 22, 2000 will be
approximately $ 430,000,000.
The trust will acquire the contracts
from the seller under a sale and
servicing agreement dated as of February
1, 2000.
3
<PAGE> 6
CHARACTERISTICS OF THE CONTRACTS ...... The initial contracts had the following
characteristics as of February 1, 2000:
WEIGHTED AVERAGE ANNUAL PERCENTAGE RATE:
14.89%
WEIGHTED AVERAGE REMAINING TERM:
56.39 months
CONTRACTS THAT ALLOCATE INTEREST AND
PRINCIPAL BY THE RULE OF 78'S METHOD OR
THE ACTUARIAL METHOD:
7.62% of the aggregate principal
balance of the initial contracts
CONTRACTS THAT ALLOCATE INTEREST AND
PRINCIPAL BY THE SIMPLE INTEREST METHOD:
92.38% of the aggregate principal
balance of the initial contracts
CONTRACTS SECURED BY NEW VEHICLES:
16.35% of the aggregate principal
balance of the initial contracts
CONTRACTS SECURED BY USED VEHICLES:
83.65% of the aggregate principal
balance of the initial contracts
CONTRACTS ORIGINATED IN CALIFORNIA:
26.42% of the aggregate principal
balance of the initial contracts
As of February 1, 2000, the
aggregate principal balance of the
initial contracts originated in any
single state other than California
did not exceed 8.87% of the
aggregate principal balance of the
initial contracts as of that date.
None of the contracts has or will have a
scheduled maturity date later than March
15, 2006.
Although the financial and other data
for the additional contracts that the
trust will acquire after February 1,
2000 will differ somewhat from the
descriptions of the initial contracts
set forth above, the characteristics of
the contracts as a whole will not vary
materially from the characteristics of
the initial contracts.
DISTRIBUTION DATES .................... Interest and principal on the securities
will be payable on the 15th day of each
month. If the 15th day of a month is not
a business day, then the payment for
that month will be made on the next
succeeding business day. The first
payment will be due on March 15, 2000.
A business day is a day other than a
Saturday, Sunday or any other day on
which commercial banks located in
California or New York are authorized or
required to be closed.
TERMS OF THE NOTES .................... INTEREST RATES:
The trust will pay interest on each
class of notes at its respective per
annum interest rate.
Interest on the notes will accrue during
the period from and including the prior
distribution date (or, in the case of
the first distribution date, from and
including the closing date) to but
excluding the applicable distribution
date). Interest on the notes will be
calculated on the basis of a 360-day
year of twelve 30-day months, with the
exception of
4
<PAGE> 7
the Class A-1 Notes, with respect to
which interest will be calculated on the
basis of a 360-day year and the actual
number of days in the related accrual
period.
PRINCIPAL:
The trust will make payments of
principal on the notes monthly, on each
distribution date, in an amount
generally equal to the Note Principal
Distributable Amount for that
distribution date. No principal payments
will be made on the Class A-2 Notes
until the Class A-1 Notes have been paid
in full; no principal payments will be
made on the Class A-3 Notes until the
Class A-2 Notes have been paid in full;
and no principal payments will be made
on the Class A-4 Notes until the Class
A-3 Notes have been paid in full.
The trust must pay the outstanding
principal amount of each class of notes,
to the extent not previously paid, by
the final scheduled distribution date
for that class of notes, which occurs in
the following months:
Class A-1 Notes - March, 2001
Class A-2 Notes - October, 2002
Class A-3 Notes - December, 2003
Class A-4 Notes - December, 2004
We expect that the outstanding principal
balance of each class of notes will be
paid in full earlier, and could be paid
significantly earlier, than the final
scheduled distribution date for that
class, depending on a variety of
factors.
"ACCELERATED PRINCIPAL COMMENCEMENT
DATE" means the first distribution date
on which:
o the aggregate outstanding principal
balance of the contracts on that
distribution date is equal to or less
than 15% of the Original Pool
Balance; and
o the Spread Account Maximum, after
giving effect to any deposit to and
any distribution from the spread
account on that distribution date,
has been reached.
"ACCELERATED PRINCIPAL DISTRIBUTABLE
AMOUNT" means, with respect to any
distribution date occurring on or after
the Accelerated Principal Commencement
Date, the amount which would remain on
deposit in the payment account for that
distribution date after giving effect to
distributions of principal and interest
on the securities, fees to various
parties and reimbursement to the insurer
of any amounts owing the insurer,
without regard to the inclusion of that
amount as part of the Note Principal
Distributable Amount. The Accelerated
Principal Distributable Amount shall be
included in the Note Principal
Distributable Amount until all of the
notes have been paid in full, and shall
not be included in the Certificate
Principal Distributable Amount at any
time.
"COLLECTION PERIOD" with respect to a
distribution date will be the calendar
month preceding the month in which that
distribution date occurs; provided, that
with respect to Liquidated Contracts,
the Collection Period will be the period
from, but excluding, the sixth business
day preceding the immediately preceding
distribution date to and including the
sixth business day preceding that
distribution date. With respect to the
first distribution date, the Collection
Period for Liquidated Contracts will be
the period from and including the
related cut-off date to and including
the sixth business day preceding the
first distribution date.
5
<PAGE> 8
"CRAM DOWN LOSS" means, with respect to
a contract, if a court of appropriate
jurisdiction in an insolvency proceeding
shall have issued an order reducing the
amount owed on the contract or otherwise
modifying or restructuring the scheduled
payments to be made on the contract, an
amount equal to:
o the excess of the Principal Balance
of the contract immediately prior to
the order over the Principal Balance
of the contract as so reduced; and/or
o if the court shall have issued an
order reducing the effective rate of
interest on the contract, the excess
of the Principal Balance of the
contract immediately prior to the
order over the net present value,
using as the discount rate the higher
of the annual percentage rate on the
contract or the rate of interest, if
any, specified by the court in the
order, of the scheduled payments as
so modified or restructured.
A Cram Down Loss shall be deemed to have
occurred on the date of issuance of the
order.
"DEFAULTED CONTRACT" with respect to any
Collection Period is a contract:
o which is, at the end of that
Collection Period, delinquent in the
amount of at least two monthly
installments of principal and
interest; or
o with respect to which the related
financed vehicle has been repossessed
or repossession efforts with respect
to the related financed vehicle have
been commenced.
"LIQUIDATED CONTRACT" means a contract
that:
o is the subject of a full prepayment;
o is a Defaulted Contract with respect
to which liquidation proceeds
constituting, in the servicer's
reasonable judgment, the final
amounts recoverable have been
received and deposited in the
collection account;
o is paid in full on or after its
maturity date; or
o has been a Defaulted Contract for
four or more Collection Periods and
as to which liquidation proceeds have
not been deposited in the Collection
Account;
provided, however, that in any event a
contract that is delinquent in the
amount of five monthly installments of
principal and interest at the end of a
Collection Period shall be deemed to be
a Liquidated Contract and shall be
deemed to have a balance of zero.
"NOTE PERCENTAGE" means:
o for each distribution date prior to
the distribution date on which the
principal amount of the Class A-4
Notes is reduced to zero, 100%;
o on the distribution date on which the
principal amount of the Class A-4
Notes is reduced to zero -
o 100% until the principal amount of
the Class A-4 Notes has been
reduced to zero; and
6
<PAGE> 9
o with respect to any remaining
portion of the Regular Principal
Distributable Amount, 0%; and
o for each distribution date after the
principal amount of the Class A-4
Notes has been reduced to zero, 0%.
"NOTE PRINCIPAL CARRYOVER SHORTFALL"
means, as of the close of any
distribution date, the excess of the
Note Principal Distributable Amount for
that distribution date over the amount
in respect of principal that is actually
deposited in the note distribution
account on that distribution date.
"NOTE PRINCIPAL DISTRIBUTABLE AMOUNT"
means, with respect to any distribution
date, the sum of:
o the Note Percentage of the Regular
Principal Distributable Amount for
that Distribution Date;
o the Accelerated Principal
Distributable Amount, if any, for
that distribution date; and
o any outstanding Note Principal
Carryover Shortfall for the
immediately preceding distribution
date;
provided, however, that the Note
Principal Distributable Amount shall not
exceed the aggregate outstanding
principal amount of the notes.
Notwithstanding the foregoing, the Note
Principal Distributable Amount on the
final scheduled distribution date for
each class of notes shall not be less
than the amount that is necessary to
reduce the outstanding principal amount
of the related class of notes to zero.
"PRINCIPAL BALANCE" means, with respect
to a contract, as of any date, the
Amount Financed under the terms of the
contract minus:
o that portion of monthly installments
of principal and interest in respect
of that contract received on or prior
to the end of the most recently ended
Collection Period and allocable to
principal as determined by the
servicer; and
o any Cram Down Loss incurred in
respect of the contract on or prior
to the end of the most recently ended
Collection Period.
"PURCHASED CONTRACT" means a contract
that:
o has been purchased by Onyx or the
seller because of certain material
defects in documents related to the
contract or certain breaches of
representations and warranties
regarding the contract made by the
seller in the sale and servicing
agreement that materially and
adversely affect the interests of the
securityholders or the insurer;
o has been purchased by the servicer
because of certain breaches of
servicing covenants; or
o has been purchased by the servicer at
its option after the aggregate
outstanding principal balance of the
contracts has declined to less than
10% of the Original Pool Balance.
"REGULAR PRINCIPAL DISTRIBUTABLE AMOUNT"
means, with respect to any distribution
date, the amount equal to the sum of the
following
7
<PAGE> 10
amounts with respect to the related
Collection Period:
o collections received on contracts,
other than Liquidated Contracts and
Purchased Contracts, allocable to
principal as determined by the
servicer, including full and partial
principal prepayments, other than
partial prepayments on rule of 78's
and actuarial contracts, representing
amounts not due in that Collection
Period, which will be deposited into
the payahead account;
o the Principal Balance of all
contracts, other than Purchased
Contracts, that became Liquidated
Contracts during the related
Collection Period;
o the Principal Balance as of the date
of purchase of all contracts that
became Purchased Contracts as of the
immediately preceding record date;
and
o the aggregate amount of Cram Down
Losses incurred during the related
Collection Period.
MANDATORY PARTIAL REDEMPTION
We will partially redeem the Class A-1
Notes on the first distribution date to
the extent, if any, that the proceeds
from the sale of the securities exceeds
the aggregate Principal Balance of all
of the contracts as of their applicable
cut-off date.
TERMS OF THE CERTIFICATES ............. INTEREST RATE:
The trust will pay interest on the
certificates at its per annum interest
rate. Interest on the certificates will
be calculated on the basis of a 360-day
year of twelve 30-day months.
Interest on the certificates will accrue
monthly and will be payable to
certificateholders on each distribution
date. Distributions of interest on the
certificates will be subordinated to
payments of interest on the notes on
each distribution date. On the final
scheduled distribution date for a class
of notes, interest on the certificates
will be subordinated to payments of
principal then due on that class of
notes.
PRINCIPAL:
We will not pay principal on the
certificates until all of the notes have
been paid in full. On the distribution
date that the notes are paid in full,
and on each succeeding distribution
date, the trust will make payments of
principal on the certificates in an
amount equal to the Certificate
Principal Distributable Amount for that
distribution date.
"CERTIFICATE PRINCIPAL DISTRIBUTABLE
AMOUNT" means, with respect to any
distribution date, the sum of:
o the Certificate Percentage of the
Regular Principal Distributable
Amount for that distribution date;
and
o any outstanding Certificate Principal
Carryover Shortfall for the
immediately preceding distribution
date;
provided, however, that the Certificate
Principal Distributable Amount shall not
exceed the outstanding principal balance
of the certificates. Notwithstanding the
foregoing, the Certificate Principal
Distributable Amount on the final
scheduled
8
<PAGE> 11
distribution date for the certificates
shall not be less than the amount that
is necessary to reduce the outstanding
principal amount of the certificates to
zero.
"CERTIFICATE PERCENTAGE" means:
o for each distribution date prior to
the distribution date on which the
principal amount of the Class A-4
Notes is reduced to zero, 0%;
o on the distribution date on which the
principal amount of the Class A-4
Notes is reduced to zero -
o 0% until the principal amount of
the Class A-4 Notes has been
reduced to zero; and
o with respect to any remaining
portion of the Regular Principal
Distributable Amount, 100%; and
o for each distribution date after
the distribution date on which the
principal amount of the Class A-4
Notes is reduced to zero, 100%.
"CERTIFICATE PRINCIPAL CARRYOVER
SHORTFALL" means, as of the close of any
distribution date, the excess of the
Certificate Principal Distributable
Amount for that distribution date over
the amount in respect of principal that
is actually deposited in the certificate
distribution account on that
distribution date.
The trust must pay the outstanding
principal amount of the certificates, to
the extent not previously paid, by the
final scheduled distribution date for
the certificates, occurring in September
2006. We expect that the outstanding
principal balance of the certificates
will be paid in full earlier, and could
be paid significantly earlier, than the
final scheduled distribution date for
the certificates, depending on a variety
of factors.
OPTIONAL PURCHASE ..................... The servicer may, but is not obligated
to, purchase the contracts on any
distribution date on which the principal
balance of the contracts has declined to
10% or less of the aggregate original
principal balance of the contracts as of
their applicable cut-off dates. If the
servicer exercises this purchase option,
all of the notes then outstanding will
be redeemed, and all of the certificates
then outstanding will be prepaid.
THE SPREAD ACCOUNT .................... The indenture trustee will establish a
segregated trust account, entitled
"Spread Account - OT 2000-A, The Chase
Manhattan Bank, Indenture Trustee", for
the benefit of the securityholders and
the insurer. The spread account will be
an asset of the trust. The
securityholders will be afforded limited
protection against losses on the
contracts by the establishment of the
spread account.
On each distribution date, the indenture
trustee will deposit funds in the spread
account up to a maximum amount
calculated as the parties to the
insurance agreement and the rating
agencies may agree. On each distribution
date, funds will be withdrawn from the
spread account to cover any shortfalls
in amounts available to pay:
o the servicing fee and applicable fees
of the indenture trustee, the owner
trustee and the trust agent; and
9
<PAGE> 12
o interest and principal on the
securities.
If the amount on deposit in the spread
account on any distribution date, after
giving effect to all deposits thereto
and withdrawals therefrom on that
distribution date, is greater than the
agreed upon maximum amount, the
indenture trustee will distribute any
excess first, to the insurer, to the
extent of any amounts owing to the
insurer under the insurance agreement,
and then to the holders of the residual
interests in the trust. Upon such
distributions to the insurer or the
holders of the residual interests, the
securityholders will have no further
rights in, or claims to, such amounts.
THE INSURANCE POLICY .................. On the closing date, MBIA will issue an
insurance policy, under the terms of an
insurance agreement, in favor of the
indenture trustee, for the benefit of
the securityholders.
Under the policy, MBIA will irrevocably
and unconditionally guarantee timely
payment of interest and ultimate payment
of principal due on the notes and the
certificates. MBIA's obligations under
the policy will be discharged to the
extent that amounts due under the policy
are received by the indenture trustee,
whether or not the amounts are properly
applied by the indenture trustee.
SERVICING FEE ......................... The servicer will be responsible for
managing, administering, servicing, and
collecting on the contracts. As
compensation for its services, the
servicer will receive a monthly fee
equal to the product of one-twelfth of
1% per annum multiplied by the pool
balance as of the end of the immediately
preceding Collection Period. As
additional compensation, the servicer
will be entitled to any late fees and
other administrative fees and expenses
or similar charges collected with
respect to the contracts. The servicer
will also receive as servicing
compensation:
o net investment earnings on funds
credited to the collection account
and the payahead account; and
o with respect to each rule of 78's
contract that is prepaid in full
prior to its maturity date, the
amount, if any, by which the
outstanding principal balance of such
rule of 78's contract exceeds the
principal balance of such contract at
the time of such prepayment (provided
that each amount payable to the
servicer under this clause will be
deposited in the spread account and
applied in accordance with the
insurance agreement).
FEDERAL INCOME TAX STATUS ............. In the opinion of Andrews & Kurth
L.L.P., for federal income tax purposes,
the notes will be characterized as debt,
and the trust will not be characterized
as an association or a publicly traded
partnership taxable as a corporation.
ERISA CONSIDERATIONS .................. Subject to certain considerations, the
notes are eligible for purchase by
employee benefit plans that are subject
to ERISA. However, neither an employee
benefit plan subject to ERISA or Section
4975 of the tax code nor an
10
<PAGE> 13
individual retirement account is
eligible to purchase the certificates.
LEGAL INVESTMENT ...................... The Class A-1 Notes will be eligible
securities for purchase by money market
funds under Rule 2a-7 under the
Investment Company Act of 1940, as
amended.
RATING ................................ At the closing date, Standard & Poor's
Ratings Services, a division of The
McGraw- Hill Companies, Inc., and
Moody's Investors Service, Inc. will
rate the notes and the certificates in
the highest rating category available
for the securities. The ratings of the
notes and the certificates will be based
substantially on the issuance of the
policy by MBIA.
REGISTRATION OF THE SECURITIES ........ Initially, the securities will be in the
form of one or more certificates
registered in the name of Cede & Co., as
the nominee of The Depository Trust
Company. If you acquire an interest in
the notes or the certificates through
DTC, you will not be entitled to receive
a definitive security, except in the
event that definitive securities are
issued in limited circumstances.
11
<PAGE> 14
THE CONTRACTS
Set forth below is data concerning the initial contracts as of February
1, 2000 which had an aggregate principal balance as of February 1, 2000 of
$338,222,112.16. Data concerning all of the contracts (including the initial
contracts and the additional contracts) will be available to purchasers of the
securities at or before the initial delivery of the securities and will be filed
with the SEC on Form 8-K within 15 days after the initial delivery of the
securities. While the financial and other data for the additional contracts will
differ somewhat from the data below for the initial contracts, the
characteristics of the contracts as a whole will not vary materially from the
characteristics of the initial contracts described below.
COMPOSITION OF THE INITIAL CONTRACTS
Aggregate principal balance...................................$338,222,112.16
Number of contracts....................................................27,439
Average principal balance outstanding..............................$12,326.33
Average original amount financed...................................$12,444.81
Original amount financed (range)........................1,205.45 to 74,998.95
Weighted average APR...................................................14.89%
APR (range)...................................................2.90% to 25.53%
Weighted average original term.....................................57.25 mos.
Original term (range)............................................7 to 72 mos.
Weighted average remaining term....................................56.39 mos.
Remaining term (range)...........................................5 to 72 mos.
12
<PAGE> 15
DISTRIBUTION BY APRS OF THE INITIAL CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF % OF % OF INITIAL
INITIAL INITIAL PRINCIPAL CUT-OFF
APR RANGE CONTRACTS CONTRACTS BALANCE POOL BALANCE
--------- --------- --------- --------------- ------------
<S> <C> <C> <C> <C>
0.000% to 7.000%...................... 11 0.04% $ 203,529.19 0.06%
7.001% to 8.000%...................... 928 3.38 15,995,595.18 4.73
8.001% to 9.000%...................... 1,195 4.36 18,433,194.73 5.45
9.001% to 10.000%..................... 1,394 5.08 20,405,205.03 6.03
10.001% to 11.000%..................... 1,221 4.45 16,909,053.14 5.00
11.001% to 12.000%..................... 1,260 4.59 16,531,874.55 4.89
12.001% to 13.000%..................... 1,465 5.34 19,144,798.89 5.66
13.001% to 14.000%..................... 1,992 7.26 25,498,255.15 7.54
14.001% to 15.000%..................... 2,587 9.43 33,573,054.27 9.93
15.001% to 16.000%..................... 3,007 10.96 37,724,898.75 11.15
16.001% to 17.000%..................... 3,145 11.46 37,844,284.90 11.19
17.001% to 18.000%..................... 2,938 10.71 33,174,318.47 9.81
18.001% to 19.000%..................... 1,904 6.94 20,843,044.15 6.16
19.001% to 20.000%..................... 1,545 5.63 15,981,411.01 4.73
20.001% to 21.000%..................... 1,706 6.22 17,036,298.37 5.04
21.001% and over....................... 1,141 4.16 8,923,296.38 2.64
Totals....................... 27,439 100.00%* $338,222,112.16 100.00%*
</TABLE>
- ----------------
* Percentages may not add to 100% because of rounding.
13
<PAGE> 16
GEOGRAPHIC CONCENTRATION OF THE INITIAL CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF % OF % OF
INITIAL INITIAL PRINCIPAL INITIAL CUT-OFF
CONTRACTS CONTRACTS BALANCE POOL BALANCE
--------- --------- --------- ---------------
<S> <C> <C> <C> <C>
Alabama........................ 909 3.31% $ 11,440,388.55 3.38%
Arizona........................ 1,036 3.78 12,370,574.78 3.66
California..................... 6,898 25.14 89,367,748.05 26.42
Colorado....................... 583 2.12 7,009,422.10 2.07
Delaware....................... 210 0.77 2,460,692.99 0.73
Florida........................ 2,470 9.00 30,011,397.58 8.87
Georgia........................ 1,751 6.38 21,983,143.27 6.50
Idaho.......................... 286 1.04 3,228,859.39 0.95
Illinois....................... 1,532 5.58 18,669,824.13 5.52
Indiana........................ 576 2.10 6,637,757.02 1.96
Iowa........................... 135 0.49 1,557,678.09 0.46
Kentucky....................... 296 1.08 3,392,159.22 1.00
Maryland....................... 1,296 4.72 16,630,418.57 4.92
Michigan....................... 1,467 5.35 17,339,861.05 5.13
Minnesota...................... 80 0.29 905,063.28 0.27
Mississippi.................... 38 0.14 553,282.05 0.16
Missouri....................... 140 0.51 1,556,035.75 0.46
Montana........................ 10 0.04 111,379.79 0.03
Nevada......................... 763 2.78 9,248,869.72 2.73
New Jersey..................... 1,607 5.86 19,660,785.59 5.81
North Carolina................. 989 3.60 12,754,840.19 3.77
Ohio........................... 1 0.00 7,205.49 0.00
Oklahoma....................... 185 0.67 2,169,553.00 0.64
Oregon......................... 737 2.69 7,929,134.18 2.34
South Carolina................. 531 1.94 6,282,564.53 1.86
Tennessee...................... 506 1.84 6,471,028.61 1.91
Texas.......................... 595 2.17 7,633,708.59 2.26
Utah........................... 45 0.16 575,449.39 0.17
Virginia....................... 795 2.90 9,928,850.73 2.94
Washington..................... 972 3.54 10,334,436.48 3.06
Totals............... 27,439 100.00%* $338,222,112.16 100.00%*
</TABLE>
- ----------------
* Percentages may not add to 100% because of rounding.
14
<PAGE> 17
DELINQUENCY AND LOAN LOSS INFORMATION
DELINQUENCY AND LOAN LOSS INFORMATION
The following tables set forth information with respect to the
experience of Onyx relating to delinquencies, loan losses and recoveries for the
portfolio of motor vehicle contracts owned and serviced by Onyx on an annual
basis commencing December 31, 1996. The tables include delinquency information
relating to those motor vehicle contracts that were purchased, originated, sold
and serviced by Onyx. All of the motor vehicle contracts were originally
purchased by Onyx from dealers, or originated by Onyx, a subsidiary of Onyx, or
others, in accordance with credit underwriting criteria established by Onyx. In
February 1994, Onyx commenced its operations as a purchaser and servicer of
motor vehicle retail installment sales contracts. Thus, Onyx has historical
performance for only a limited time period with respect to the motor vehicle
contracts it purchases and originates and thus delinquencies and loan losses may
increase from existing levels in the portfolio with the passage of time.
Delinquency and loan loss experience may be influenced by a variety of economic,
social and other factors.
DELINQUENCY EXPERIENCE OF ONYX MOTOR VEHICLE CONTRACT PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AT DECEMBER 31, AT DECEMBER 31, AT DECEMBER 31, AT SEPTEMBER 30, AT SEPTEMBER 30,
1996 1997 1998 1998 1999
---------------- ---------------- ----------------- ------------------ -------------------
AMOUNT NO AMOUNT NO AMOUNT NO AMOUNT NO AMOUNT NO
-------- ---- -------- ---- -------- ---- -------- ---- -------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Servicing portfolio .... $400,665 38,275 $757,277 73,502 $1,345,961 131,862 $1,176,153 115,151 $1,924,881 189,062
Delinquencies
30-59 days(1)(2) ..... $ 5,022 478 $ 11,902 1,211 $ 26,410 2,766 $ 15,565 1,643 $ 29,324 3,067
60-89 days(1)(2) ..... $ 1,816 162 $ 3,370 346 $ 6,876 691 $ 4,114 413 $ 11,219 1,141
90+ days(1)(2) ....... $ 1,279 111 $ 3,743 316 $ 4,790 455 $ 4,103 383 $ 10,992 1,068
Total delinquencies
as a percent of
servicing portfolio... 2.03% 1.96% 2.51% 2.55% 2.83% 2.97% 2.02% 2.12% 2.68% 2.79%
</TABLE>
- ----------
(1) Delinquencies include principal amounts only, net of repossessed
inventory. Repossessed inventory as a percent of the servicing
portfolio was 0.48%, 1.17% and 0.62% at December 31, 1996, 1997 and
1998, respectively, and 0.65% and 0.68% at September 30, 1998 and 1999,
respectively.
(2) The period of delinquency is based on the number of days payments are
contractually past due.
15
<PAGE> 18
LOAN LOSS EXPERIENCE OF ONYX MOTOR VEHICLE CONTRACT PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------ -----------------------
1996 1997 1998 1998 1999
-------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Number of Motor Vehicle Contracts
outstanding.......................... 38,275 73,502 131,862 115,151 189,062
Period end outstanding................ $400,665 $757,277 $1,345,961 $1,176,153 $1,924,881
Average outstanding................... $311,340 $563,343 $1,023,237 $ 945,077 $1,629,779
Number of gross charge-offs........... 987 2,161 3,761 2,740 4,508
Gross charge-offs..................... $ 5,789.2 $ 13,076.1 $ 20,639.9 $ 14,827 $ 24,528
Net charge-offs(1).................... $ 5,066.1 $ 11,433.9 $ 17,618.4 $ 12,576 $ 21,373
Net charge-offs as a percent of
average outstanding................. 1.63% 2.03% 1.72% 1.77% 1.75%
</TABLE>
- ----------
(1) Net charge-offs are gross charge-offs minus recoveries on motor vehicle
contracts previously charged off.
16
