Report of Independent Accountants
To the Certificateholder of the Caterpillar Financial Asset Trust
1998-A and Caterpillar Financial Services Corporation, as servicer:
We have audited the accompanying statements of financial position
arising from cash transactions of Caterpillar Financial Asset Trust
1998-A as of December 31, 1999 and 1998, and the related
statements of revenues collected and expenses paid for the year
ended December 31, 1999 and for the period from July 1, 1998 (date
of formation) to December 31, 1998. These financial statements are
the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We conducted our audit in accordance with auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
As described in Note 1, these financial statements were prepared on
the basis of cash receipts and disbursements, which is a
comprehensive basis of accounting other than generally accepted
accounting principles.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the assets and liabilities
arising from cash transactions of Caterpillar Financial Asset Trust
1998-A as of December 31, 1999 and 1998, and its revenues collected
and expenses paid for the year ended December 31, 1999 and for the
period from July 1, 1998 (date of formation) to December 31, 1998,
on the basis of accounting described in Note 1.
s\ PricewaterhouseCoopers LLP
March 28, 2000
Nashville, Tennessee
Caterpillar Financial Asset Trust 1998-A
Statement Of Financial Position
(Thousands of Dollars)
December 31, December 31,
Assets: 1999 1998
Restricted cash $ 8,416 $ 9,390
Investment in finance receivables 290,567 513,738
Total assets $ 298,983 $ 523,128
Liabilities and undivided interests:
Notes payable $ 274,092 $ 497,241
Total liabilities 274,092 497,241
Undivided interests 24,891 25,887
Total liabilities and
undivided interests $ 298,983 $ 523,128
Statement of Revenues Collected and Expenses Paid
(Thousands of Dollars)
Jan. 1, 1999 to July 1, 1998 to
Dec. 31, 1999 Dec. 31, 1998
Revenues collected:
Retail finance income $ 29,210 $ 17,280
Other income 562 209
Total revenues collected 29,772 17,489
Expenses paid:
Interest 22,727 12,825
Servicing fees 3,936 2,373
Other 1,685 9
Total expenses paid 28,348 15,207
Revenues collected in excess of
expenses paid $ 1,424 $ 2,282
See accompanying Notes to Financial Statements
Caterpillar Financial Asset Trust 1998-A
Notes to Financial Statements
(Dollar amounts in thousands)
Note 1- Summary of Business and Accounting Policies
A. Business
Caterpillar Financial Asset Trust 1998-A (the "Trust") is a
Delaware business trust formed by Caterpillar Financial Funding
Corporation (the "Seller") and Chase Manhattan Bank pursuant to the
Trust Agreement dated July 1, 1998. On July 31, 1998, the Trust
purchased a $605,679 pool of fixed rate retail installment sales
contracts and finance leases (the "Receivables") from the Seller
(Note 3). Concurrently, the Trust issued $589,290 in notes (the
"Notes") which are secured by the Receivables and other assets of
the Trust pursuant to an Indenture dated July 1, 1998, between the
Issuer and The First National Bank of Chicago (the "Indenture
Trustee"). The Trust also issued $16,389 in asset backed
certificates (the "Certificates") which were not offered and are
retained by the Seller. The Notes represent indebtedness of the
Trust, and the Certificates represent fractional undivided
interests in the Trust.
The activities of the Trust are limited by the terms of the
Trust Agreement to acquiring, holding and managing the Receivables,
issuing and making payment on the Notes and the Certificates (Note
4) and other activities related thereto.
B. Basis of Accounting
The financial statements of the Trust are prepared on the
basis of cash receipts and cash disbursements. Such financial
statements differ from financial statements prepared in accordance
with generally accepted accounting principles in that interest
income and the related assets are recognized when received rather
than when earned, and distributions to
noteholders/certificateholders are recognized when paid rather than
when the obligation is incurred. Certain expenses of the Trust are
paid by the Seller.
Note 2- Restricted cash
Restricted cash includes all monies held in one or more
accounts (the "Trust Accounts") established and maintained by the
servicer, Caterpillar Financial Services Corporation, and the
Seller in accordance with the Sale and Servicing Agreement dated
July 1, 1998. The Trust Accounts are under the control of the
Indenture Trustee solely for the benefit of the noteholders and the
certificateholders, as applicable.
Note 3- The Receivables
The Receivables consist of fixed rate retail installment sales
contracts and finance leases secured by new and used machinery
manufactured primarily by Caterpillar Inc., including rights to
receive certain payments made with respect to such Receivables.
Note 4- Notes and Certificates
The original aggregate principal amounts of the Notes by class were
as follows:
Class A-1 (5.6375%) Asset Backed Notes $164,000
Class A-2 (5.75%) Asset Backed Notes $218,000
Class A-3 (5.85%) Asset Backed Notes $183,114
Class B (5.85%) Asset Backed Notes $24,176
Principal and interest on the Notes is payable monthly on each
distribution date commencing August 25, 1998 provided that no
principal payments in respect of (i) the Class A-2 Notes will be
made until the Class A-1 notes have been paid in full, (ii) the
Class A-3 Notes will be made until the Class A-2 Notes have been
paid in full and (iii) the Class B Notes will be made until the
Class A-3 Notes have been paid in full.
Distributions with respect to the Certificates are
subordinated to the right of the noteholders to receive payments of
interest on and principal of the Notes.
Note 5- Income Taxes
The Trust is not classified as an association taxable as a
corporation for United States federal income tax purposes. The
Trust qualifies as a "financial asset securitization investment
trust" within the meaning of Sections 860H through 860L of the
Code. Based upon consultation with outside counsel, the Trust is
of the opinion that it is not subject to taxation.
