ITEM 1. BUSINESS
The Trust was formed under the laws of Delaware pursuant to an Amended and Restated Trust Agreement (the "Trust Agreement") dated as of May 1, 1996, among Premier Auto Receivables Company ("PARCO"), Chrysler Financial Corporation ("CFC"), and Chemical Bank Delaware, acting thereunder not in its individual capacity but solely as trustee of the Trust.
Chemical Bank Delaware is now known as Chase Manhattan Bank Delaware. Pursuant to an Assignment and Assumption Agreement, PARCO assigned all of its rights and delegated all of its duties in regard to the Trust Agreement and the Purchase Agreement dated as of May 1, 1996, between CFC and PARCO, effective as of June 30, 1996, to Premier Receivables L.L.C., a Michigan limited liability company.
On May 16, 1996, the Trust issued $250,000,000 aggregate principal amount of 5.4375% Asset Backed Notes, Class A-1, (which were retained by CFC), $735,000,000 aggregate principal amount of Floating Rate Asset Backed Notes, Class A-2, $435,000,000 aggregate principal amount of 6.35% Asset Backed Notes, Class A-3 and $264,375,000 aggregate principal amount of 6.575% Asset Backed Notes, Class A-4 (collectively, the "Notes"). The Notes were issued pursuant to an Indenture dated as of May 1, 1996, between the Trust and The Bank of New York, as Indenture Trustee. The Trust also issued $65,616,772.30 aggregate principal amount of 6.85% Asset Backed Certificates (the "Certificates"). The Certificates represent fractional undivided interests in the Trust. The assets of the Trust include a pool of motor vehicle retail installment sale contracts, secured by security interests in the motor vehicles financed thereby and including certain monies due or received thereunder on or after May 2, 1996, transferred to the Trust by CFC on May 16, 1996. The Notes are secured by the assets of the Trust pursuant to the Indenture.
During October 1996, the Indenture Trustee used certain monies on deposit in the trust reserve account (the "Reserve Fund") to purchase from CFC approximately $70,000,000 of Receivables secured by security interests in the motor vehicles financed thereby. Cash proceeds from the liquidation of these Receivables are returned to the Reserve Fund. The aggregate principal balance of these Receivables was approximately $64,500,000 as of December 31, 1996.
The Trust has no employees.
ITEM 2.
ITEM 2. PROPERTIES
There is nothing to report with regard to this item.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
There is nothing to report with regard to this item.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There is nothing to report with regard to this item.
PART II.
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is nothing to report with regard to this item.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data has been omitted since the required information is included in the financial statements or the notes thereto.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The Trust was formed under the laws of Delaware pursuant to an Amended and Restated Trust Agreement (the "Trust Agreement") dated as of May 1, 1996, among Premier Auto Receivables Company ("PARCO"), Chrysler Financial Corporation ("CFC"), and Chemical Bank Delaware, acting thereunder not in its individual capacity but solely as trustee of the Trust.
Chemical Bank Delaware is now known as Chase Manhattan Bank Delaware. Pursuant to an Assignment and Assumption Agreement, PARCO assigned all of its rights and delegated all of its duties in regard to the Trust Agreement and the Purchase Agreement dated as of May 1, 1996, between CFC and PARCO, effective as of June 30, 1996, to Premier Receivables L.L.C., a Michigan limited liability company.
On May 16, 1996, the Trust issued $250,000,000 aggregate principal amount of 5.4375% Asset Backed Notes, Class A-1, (which were retained by CFC), $735,000,000 aggregate principal amount of Floating Rate Asset Backed Notes, Class A-2, $435,000,000 aggregate principal amount of 6.35% Asset Backed Notes, Class A-3 and $264,375,000 aggregate principal amount of 6.575% Asset Backed Notes, Class A-4 (collectively, the "Notes"). The Notes were issued pursuant to an Indenture dated as of May 1, 1996, between the Trust and The Bank of New York, as Indenture Trustee. The Trust also issued $65,616,772.30 aggregate principal amount of 6.85% Asset Backed Certificates (the "Certificates"). The Certificates represent fractional undivided interests in the Trust. The assets of the Trust include a pool of motor vehicle retail installment sale contracts, secured by security interests in the motor vehicles financed thereby and including certain monies due or received thereunder on or after May 2, 1996, transferred to the Trust by CFC on May 16, 1996. The Notes are secured by the assets of the Trust pursuant to the Indenture.
During October 1996, the Indenture Trustee used certain monies on deposit in the trust reserve account (the "Reserve Fund") to purchase from CFC approximately $70,000,000 of Receivables secured by security interests in the motor vehicles financed thereby. Cash proceeds from the liquidation of these Receivables are returned to the Reserve Fund. The aggregate principal balance of these Receivables was approximately $64,500,000 as of December 31, 1996.
The Trust has no employees.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (CONTINUED)
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (CONTINUED)
PREMIER AUTO TRUST 1996-2 NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of Premier Auto Trust 1996-2 (the "Trust") are prepared on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than generally accepted accounting principles.
Cash and Cash Equivalents
Short-term instruments with a maturity of less than three months when purchased are considered to be cash equivalents. The Trust received certain cash deposits from Chrysler Financial Corporation ("CFC") which are held as liquidity and credit enhancement reserves and invested in short-term instruments. Under the Sale and Servicing Agreement, the servicer is required to convey principal and interest collections to the Trust within two business days after their receipt. The Trust invests these collections in short-term instruments pending distribution.
Amounts Held for Future Distribution
Amounts held for future distribution represent certain short-term investments and receivables held for future distributions to Noteholders and Certificateholders, and for liquidity and credit enhancement reserves. Amounts held for liquidity and credit enhancement reserves which are not utilized for future distributions to Noteholders and Certificateholders will be distributed to Premier Receivables L.L.C. ("Premier L.L.C.").
NOTE 2 - RELATED PARTIES
Premier L.L.C. is a limited liability company controlled by CFC. Premier Auto Receivables Company ("PARCO") is a wholly-owned subsidiary of CFC. The Class A-1 Notes issued by the Trust, as described in Note 3, were retained by CFC.
NOTE 3 - SALE OF ASSET BACKED NOTES AND CERTIFICATES
The Trust was formed under the laws of Delaware pursuant to an Amended and Restated Trust Agreement dated as of May 1, 1996, among PARCO, CFC, and Chemical Bank Delaware, acting thereunder not in its individual capacity but solely as trustee of the Trust.
Chemical Bank Delaware is now known as Chase Manhattan Bank Delaware. Pursuant to an Assignment and Assumption Agreement, PARCO assigned all of its rights and delegated all of its duties in regard to the Trust Agreement and the Purchase Agreement dated as of May 1, 1996, between CFC and PARCO, effective as of June 30, 1996, to Premier L.L.C.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (CONTINUED)
PREMIER AUTO TRUST 1996-2 NOTES TO FINANCIAL STATEMENTS
NOTE 3 - SALE OF ASSET BACKED NOTES AND CERTIFICATES - continued
On May 16, 1996, the Trust issued $250,000,000 aggregate principal amount of 5.4375% Asset Backed Notes, Class A-1 (the "Class A-1 Notes"), $735,000,000 aggregate principal amount of Floating Rate Asset Backed Notes, Class A-2 (the "Class A-2 Notes"), $435,000,000 aggregate principal amount of 6.35% Asset Backed Notes, Class A-3 (the "Class A-3 Notes"), and $264,375,000 aggregate principal amount of 6.575% Asset Backed Notes, Class A-4 (the "Class A-4 Notes" and, together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, the "Notes"). The Notes were issued pursuant to an Indenture dated as of May 1, 1996, between the Trust and The Bank of New York, as Indenture Trustee. The Trust also issued $65,616,772.30 aggregate principal amount of 6.85% Asset Backed Certificates (the "Certificates"). The Certificates represent fractional undivided interests in the Trust.
The assets of the Trust include a pool of motor vehicle retail installment sale contracts ("Receivables"), secured by security interests in the motor vehicles financed thereby and including certain monies due or received thereunder on or after May 2, 1996, transferred to the Trust by CFC on May 16, 1996. The Notes are secured by the assets of the Trust pursuant to the Indenture.
During October 1996, the Indenture Trustee used certain monies on deposit in the trust reserve account (the "Reserve Fund") to purchase from CFC approximately $70,000,000 of Receivables secured by security interests in the motor vehicles financed thereby. Cash proceeds from the liquidation of these Receivables are returned to the Reserve Fund. The aggregate principal balance of these Receivables was approximately $64,500,000 as of December 31, 1996.
NOTE 4 - PRINCIPAL AND INTEREST PAYMENTS
Interest on the Class A-1 Notes, the Class A-3 Notes and the Class A-4 Notes will accrue at the respective fixed per annum interest rates specified above. The per annum rate of interest on the Class A-2 Notes for each monthly interest period will equal one-month LIBOR plus 0.05%, subject to a maximum rate of 12% per annum. Interest on the Notes will generally be payable on the sixth day of each month or, if any such day is not a Business Day, on the next succeeding Business Day (each, a "Distribution Date"), commencing June 6, 1996. Principal of the Notes will be payable on each Distribution Date to the extent described in the Prospectus Supplement dated May 9, 1996, and the Prospectus dated March 21, 1996 (collectively, the "Prospectus"); however, no principal payments will be made (i) on the Class A-2 Notes until the Class A-1 Notes have been paid in full, (ii) on the Class A-3 Notes until the Class A-2 Notes have been paid in full, or (iii) on the Class A-4 Notes until the Class A-3 Notes have been paid in full.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (CONTINUED)
PREMIER AUTO TRUST 1996-2 NOTES TO FINANCIAL STATEMENTS
NOTE 4 - PRINCIPAL AND INTEREST PAYMENTS - continued
Interest on the Certificates will accrue at the fixed per annum interest rate specified above and will be distributed to the Certificateholders on each Distribution Date. No distributions of principal on the Certificates will be made until all the Notes have been paid in full.
Each class of the Notes and the Certificates will be payable in full on the applicable final scheduled Distribution Date as set forth in the Prospectus. However, payment in full of a class of Notes or of the Certificates could occur earlier than such dates as described in the Prospectus. In addition, the Class A-4 Notes will be subject to redemption in whole, but not in part, and the Certificates will be subject to prepayment in whole, but not in part, on any Distribution Date on which CFC exercises its option to purchase the Receivables. CFC may purchase the Receivables when the aggregate principal balance of the Receivables shall have declined to 10% or less of the initial aggregate principal balance of the Receivables purchased by the Trust.
NOTE 5 - FEDERAL INCOME TAXES
In the opinion of outside legal counsel, for federal income tax purposes, the Class A-2 Notes, Class A-3 Notes, and Class A-4 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.
NOTE 6 - FINANCIAL INSTRUMENTS
The estimated fair value of financial instruments have been determined using available market information and valuation methodologies as described below. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (CONTINUED)
PREMIER AUTO TRUST 1996-2 NOTES TO FINANCIAL STATEMENTS
NOTE 6 - FINANCIAL INSTRUMENTS - continued
The carrying amounts and estimated fair values of the Trust's financial instruments at December 31, 1996 were as follows:
Assumptions and Methodologies
The carrying value of cash and cash equivalents approximates market value due to the short maturity of these instruments.
The fair value of receivables was estimated by discounting expected cash flows using rates of loans with similar maturities at December 31, 1996.
The fair value of Asset Backed Notes and Certificates was estimated using quoted market prices.
The fair value of Amounts Held for Future Distribution was estimated at carrying value for amounts with short-term maturities and at net realizable value for remaining amounts due Premier L.L.C.
Deloitte & Touche LLP - ---------- ------------------------------------------ Suite 900 Telephone (313) 396-3000 600 Renaissance Center Detroit, Michigan 48243-1704
INDEPENDENT AUDITORS' REPORT
Shareholder and Board of Directors Chrysler Financial Corporation Southfield, Michigan
We have audited the accompanying statement of assets, liabilities and equity arising from cash transactions of the Premier Auto Trust 1996-2 as of December 31, 1996, and the related statement of cash receipts and disbursements for the period May 1, 1996 (inception) through December 31, 1996. These financial statements are the responsibility of the management of Chrysler Financial Corporation. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. 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 audit provides 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, such financial statements present fairly, in all material respects, the assets, liabilities and equity arising from cash transactions of the Premier Auto Trust 1996-2 as of December 31, 1996, and its cash receipts and disbursements for the period May 1, 1996 (inception) through December 31, 1996 on the basis of accounting described in Note 1.
/s/ Deloitte & Touche LLP
January 21, 1997
- -------------------- Deloitte Touche Tohmatsu International - --------------------
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There is nothing to report with regard to this item.
PART III.
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
There is nothing to report with regard to this item.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
There is nothing to report with regard to this item.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There is nothing to report with regard to this item.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is nothing to report with regard to this item.
PART IV.
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
1. Financial Statements
Financial statements for Premier Auto Trust 1996-2 as follows:
Statement of Assets, Liabilities and Equity - December 31, 1996 (page 4 of this report)
Statement of Cash Receipts and Disbursements for the period May 1, 1996 (inception) through December 31, 1996 (page 5 of this report)
Notes to financial statements (pages 6, 7, 8 and 9 of this report)
Independent Auditors' Report (page 10 of this report)
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (CONTINUED)
2. Financial Statement Schedules
All financial statement schedules have been omitted because the information to be provided therein is included in the financial statements or the notes thereto.
3. Exhibits
(a) The following exhibits are filed as a part of this report:
Exhibit No.
3 Certificate of Trust of Premier Auto Trust 1996-2. Filed as Exhibit 3 to the Trust's Quarterly Report on Form 10-Q for the period ended June 30, 1996, and incorporated herein by reference.
4.1 Amended and Restated Trust Agreement, dated as of May 1, 1996, among Premier Auto Receivables Company, Chrysler Financial Corporation and Chemical Bank Delaware, as Owner Trustee. Filed as Exhibit 4.1 to the Trust's Quarterly Report on Form 10-Q for the period ended June 30, 1996, and incorporated herein by reference.
4.2 Indenture, dated as of May 1, 1996, between Premier Auto Trust 1996-2 and The Bank of New York, as Indenture Trustee (excluding Schedule A). Filed as Exhibit 4.2 to the Trust's Quarterly Report on Form 10-Q for the period ended June 30, 1996, and incorporated herein by reference.
4.3 Sale and Servicing Agreement, dated as of May 1, 1996, among Premier Auto Trust 1996-2, and Chrysler Financial Corporation (excluding Schedules A and C). Filed as Exhibit 4.3 to the Trust's Quarterly Report on Form 10-Q for the period ended June 30, 1996, and incorporated herein by reference.
4.4 Assignment and Assumption Agreement, dated as of June 30, 1996, among Premier Auto Receivables Company, Premier Receivables L.L.C. and each of the Premier Auto Trusts parties thereto. Filed as Exhibit 4.4 to Premier Auto Trust 1996-1's Quarterly Report on Form 10-Q for the period ended June 30, 1996 and incorporated herein by reference.
27 Financial Data Schedule
(b) No reports on Form 8-K were filed by the Trust during the last quarter of the period covered by this report.
PREMIER AUTO TRUST 1996-2
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Premier Auto Trust 1996-2 (Registrant) By: Chrysler Financial Corporation, as Servicer -------------------------------------------
Date: March 13, 1997 By: /s/ T. F. Gilman ------------------------------------------- T. F. Gilman, Vice President and Controller Principal Accounting Officer
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
No annual report or proxy material has been sent to security holders.
PREMIER AUTO TRUST 1996-2
EXHIBIT INDEX
Exhibit Number Description of Exhibit - ------ ----------------------
3 Certificate of Trust of Premier Auto Trust 1996-2. Filed as Exhibit 3 to the Trust's Quarterly Report on Form 10-Q for the period ended June 30, 1996, and incorporated herein by reference.
4.1 Amended and Restated Trust Agreement, dated as of May 1, 1996, among Premier Auto Receivables Company, Chrysler Financial Corporation and Chemical Bank Delaware, as Owner Trustee. Filed as Exhibit 4.1 to the Trust's Quarterly Report on Form 10-Q for the period ended June 30, 1996, and incorporated herein by reference.
4.2 Indenture, dated as of May 1, 1996, between Premier Auto Trust 1996-2 and The Bank of New York, as Indenture Trustee (excluding Schedule A). Filed as Exhibit 4.2 to the Trust's Quarterly Report on Form 10-Q for the period ended June 30, 1996, and incorporated herein by reference.
4.3 Sale and Servicing Agreement, dated as of May 1, 1996, among Premier Auto Trust 1996-2, and Chrysler Financial Corporation (excluding Schedules A and C). Filed as Exhibit 4.3 to the Trust's Quarterly Report on Form 10-Q for the period ended June 30, 1996, and incorporated herein by reference.
4.4 Assignment and Assumption Agreement, dated as of June 30, 1996 among Premier Auto Receivables Company, Premier Receivables L.L.C. and each of the Premier Auto Trusts parties thereto. Filed as Exhibit 4.4 to Premier Auto Trust 1996-1's Quarterly Report on Form 10-Q for the period ended June 30, 1996, and incorporated herein by reference.
27 Financial Data Schedule
E-1