Item 1. Business. Onyx Acceptance Financial Corporation ("Finco") established the Onyx Acceptance Grantor Trust 1997-1 (the "Trust") as of March 25, 1997 pursuant to a Pooling and Servicing Agreement (the "Agreement") among the Finco, Onyx Acceptance Corporation, as Servicer (the"Servicer") and Bankers Trust Company of New York as Trustee (the"Trustee"). Pursuant to the Agreement, the Trust issued Auto Loan Pass-Through Certificates in the initial principal amount of $90,000,000. The property of the Trust includes, among other things, a pool of motor vehicle retail installment sales contracts (the "Contracts"), secured by new and used automobiles financed thereby, certain monies due thereunder from and after December 31, 1996 (the"Cut-Off Date") in the vehicles financed thereby (the "Financed Vehicles") and certain other property in exchange for certificates representing fractional undivided interests in the Trust (the "Certificates") which were sold to the public in an underwritten offering. Simultaneously with the issuance of the Certificates, Finco sold and assigned to the Trustee for the Trust without recourse, all of Finco's interest in Contracts with an Aggregate Scheduled Balance as of the Cutoff Date of $90,000,000 (hereinafter referred to as the "Contracts"), the proceeds thereof and certain other assets of the Trust. The Servicer services the Contracts pursuant to the Agreement and is compensated for acting as the Servicer. In order to facilitate its servicing functions and minimize administrative burden and expenses, Onyx, as servicer, retains title to the Financed Vehicles but the Contracts and certain documents related thereto are delivered to the Trustee.
Item 2.
Item 2. Properties. The property of the Trust includes the Contracts purchased by Onyx pursuant to the dealer agreements, from California automobile dealerships with which Onyx has relationships and , in general, all payments due under the Contracts on or after January 1, 1997. Immediately upon acquisition, the Contracts were sold by Onyx to Finco pursuant to a Sale and Servicing Agreement dated September 8, 1994 (the "Purchase Agreement"). The Contracts were then sold by Finco to the Trust pursuant to the Agreement. The property of the Trust also includes (i) certain documents relating to the Contracts, (ii) certain monies due under the Contracts on and after the Cut-Off Date (iii) security interests in the Financed Vehicles and the right to receive proceeds from claims on certain insurance policies covering the Financed Vehicles or the obligors under each related Contract and the right to proceeds under a certain blanket insurance policy maintained by Onyx, (iv) all amounts on deposit in the collection account including all eligible investments credited thereto, (v) the benefits of an irrevocable principle/interest surety bond issued by Capital Markets Assurance Corporation, (vi) the rights of Finco to cause Onyx to repurchase certain contracts under certain circumstances, (vii) all proceeds of the foregoing.
The Contracts were purchased by Onyx in the normal course of business in accordance with Onyx's underwriting standards, which emphasize the obligor's ability to pay and creditworthiness, as well as the asset value of the Financed Vehicle.
As of December 31, 1997, the pool consisted of the following number of Contracts with the following delinquency characteristics:
Additional information concerning the pool balance, payment of principal and interest, prepayments, the servicing fee, the weighted average maturity and seasoning, the pool factor, and other information relating to the pool of Contracts may be obtained in the monthly reports provided to the Trustee by Onyx as Servicer. (See Exhibit 19.1 attached hereto)
Item 3.
Item 3. Legal Proceedings None
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders None
PART II
Item 5.
Item 5. Market for Registrant's Common Equity and Related Securityholders Matters. There are 7 securityholders of record (DTC) as of March 14, 1998. There is no established public trading market for the securities.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. .
Part IV
Item 14.
Item 14. Exhibits , Financial Statement Schedules, and Reports on Form 8-K
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.
Onyx Acceptance Grantor Trust 1997-1 (Issuer with respect to Certificates)
Onyx Acceptance Financial Corporation (Originator of the Trust and Registrant)
REGAN E. KELLY March 30, 1998 - --------------------------------------------- ------------------------ By: Regan E. Kelly Date Director and Executive Vice President Onyx Acceptance Financial Corporation
Exhibit 19.1
Selected Information Related to the Contracts
Exhibit 20.1
Report of Accountant Relative to Servicing
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors Onyx Acceptance Corporation
We have examined management's assertion that, as of December 31, 1997, Onyx Acceptance Corporation maintained effective internal control over the servicing of motor vehicle installment sale contracts for the Onyx Acceptance Grantor Trust 1994-1, Onyx Acceptance Grantor Trust 1995-1, Onyx Acceptance Grantor Trust 1996-1, Onyx Acceptance Grantor Trust 1996-2, Onyx Acceptance Grantor Trust 1996-3, Onyx Acceptance Grantor Trust 1996-4, Onyx Acceptance Grantor Trust 1997-1, Onyx Acceptance Grantor Trust 1997-2, Onyx Acceptance Grantor Trust 1997-3 and Onyx Acceptance Grantor Trust 1997-4.
Our examination was made in accordance with standards established by the American Institute of Certified Public Accountants and, accordingly, included obtaining an understanding of the internal control over the loan servicing process, testing and evaluating the design and operating effectiveness of the internal control, and such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion.
Because of inherent limitations in any internal control, errors or irregularities may occur and not be detected. Also, projections of any evaluation of the internal control over the loan servicing process to future periods are subject to the risk that the internal control may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
In our opinion, management's assertion that Onyx Acceptance Corporation maintained effective internal control over the servicing of motor vehicle installment sale contracts for Onyx Acceptance Grantor Trust 1994-1, Onyx Acceptance Grantor Trust 1995-1, Onyx Acceptance Grantor Trust 1996-1, Onyx Acceptance Grantor Trust 1996-2, Onyx Acceptance Grantor Trust 1996-3, Onyx Acceptance Grantor Trust 1996-4, Onyx Acceptance Grantor Trust 1997-1, Onyx Acceptance Grantor Trust 1997-2, Onyx Acceptance Grantor Trust 1997-3 and Onyx Acceptance Grantor Trust 1997-4 as of December 31, 1997, is fairly stated, in all material respects, based upon criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as described in Internal Control--Integrated Framework.
COOPERS & LYBRAND L.L.P.
Newport Beach, California March 20, 1998
March 20, 1998
Coopers & Lybrand L.L.P. 4675 MacArthur Court, Suite 1600 Newport Beach, California 92660
Ladies and Gentlemen:
Assertion by Onyx Acceptance Corporation
Onyx Acceptance Corporation services the motor vehicle installment sale contracts for the Onyx Acceptance Grantor Trust 1994-1, Onyx Acceptance Grantor Trust 1995-1, Onyx Acceptance Grantor Trust 1996-1, Onyx Acceptance Grantor Trust 1996-2, Onyx Acceptance Grantor Trust 1996-3, Onyx Acceptance Grantor Trust 1996-4, Onyx Acceptance Grantor Trust 1997-1, Onyx Acceptance Grantor Trust 1997-2, Onyx Acceptance Grantor Trust 1997-3, and Onyx Acceptance Grantor Trust 1997-4. Onyx Acceptance Corporation maintained effective internal control over the loan servicing for the Onyx Acceptance Grantor Trust 1994-1, Onyx Acceptance Grantor Trust 1995-1, Onyx Acceptance Grantor Trust 1996-1, Onyx Acceptance Grantor Trust 1996-2, Onyx Acceptance Grantor Trust 1996-3, Onyx Acceptance Grantor Trust 1996-4, Onyx Acceptance Grantor Trust 1997-1, Onyx Acceptance Grantor Trust 1997-2, Onyx Acceptance Grantor Trust 1997-3, and Onyx Acceptance Grantor Trust 1997-4 as of December 31, 1997, based upon criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as described in Internal Control -- Integrated Framework.
JOHN W. HALL - ----------------------- John W. Hall Chief Executive Officer
DON P. DUFFY - ----------------------- DonP. Duffy Chief Financial Officer
CHARLIE ADAMS - ----------------------- Charlie Adams Director of Technology