Item 2. PROPERTIES. -----------
The following table sets forth the aggregate information of the Trust for the period from December 1, 1998 through March 31, 1999:
Item 3.
Item 3. LEGAL PROCEEDINGS. ------------------
Not applicable.
Item 4.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. ----------------------------------------------------
Not applicable.
PART II
Item 5.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. --------------------
All Class A Certificates issued by the Trust are registered in the name of Cede & Co. Within the meaning of the No-Action Letter, the number of "holders of record" of the Class A Certificates as of March 31, 1999, was 26.
There is no established public trading market for the Class A Certificates.
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. --------------------------------------------
The audited financial statements of the Trust and the related notes are included herein on pages to.
Item 9.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. -------------------------
Not applicable.
PART IV
Item 14.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. ---------
(a) List of documents filed as part of the Annual Report:
1. Index to Financial Statements: Page ------------------------------ Number ------ Cover Page .........................................F-1 Independent Auditors' Report .......................F-2 Balance Sheet as of March 31, 1999 .................F-3 Statement of Income for the period December 1, 1998 (date of formation) through March 31, 1999......F-4 Statement of Changes in Net Assets Held in Trust for the period December 1, 1998 (date of formation) through March 31, 1999...............F-5 Statement of Cash Flows for the period December 1, 1998 (date of formation) through March 31, 1999..................................F-6 Notes to Financial Statements.......................F-7
2. Financial Statement Schedules: ------------------------------
Not applicable.
3. Exhibits: --------- Officer's Certificate dated as of March 31, 1999
The Registrant has also included herein the annualized financial information set forth in Item 2.
(b) Reports on Form 8-K: --------------------
The Trust filed Current Reports on Form 8-K regarding monthly distributions of principal and interest to certificateholders on January 21, 1999 for the period November 1, 1998 through December 31, 1998, on February 3, 1999 to amend the Form 8-K previously filed on January 21, 1999, on February 19, 1999 for the month ended January 31, 1999, on March 18, 1999 for the month ended February 28, 1999 and on April 19, 1999 for the month ended March 31, 1999. Included in each such Form 8-K report as Exhibit 99.1 is the monthly servicing report for each respective month end as provided by the Servicer to the Trustee.
SIGNATURES
Pursuant to the requirements of Section 13 of 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.
Date: June 28, 1999
Nissan Auto Receivables 1998-A Grantor Trust (Registrant)
By: Nissan Motor Acceptance Corporation, as Servicer
By: /s/ Tomoaki Shimazu ------------------- Name: Tomoaki Shimazu Title: Vice President, Finance and Corporate Planning
EXHIBIT INDEX
Sequentially Numbered Exhibit No. Description Page ----------- ----------- ----
99.1 Officer's Certificate dated as of March 31, 1999 7
NISSAN MOTOR ACCEPTANCE CORPORATION
OFFICER'S CERTIFICATE ---------------------
The undersigned, Tomoaki Shimazu, Vice President, Finance and Corporate Planning of NISSAN MOTOR ACCEPTANCE CORPORATION, a California corporation (the "Company"), does hereby certify, in his capacity as such corporate officer, as follows:
(1) The undersigned has caused a review of the activities of the Company, in its capacity as Servicer, during the period December 15, 1998 through March 31, 1999, and of its performance pursuant to that certain Pooling and Servicing Agreement dated as of December 1, 1998 (the "Agreement") by and among the Company, Nissan Auto Receivables Corporation, as Seller, and Norwest Bank Minnesota, National Association, as Trustee, to be conducted under his supervision; and
(2) To the best of the undersigned's knowledge, based upon such review, the Company has fulfilled all of its obligations under the Agreement for the period December 15, 1998 through March 31, 1999.
This Officer's Certificate is being furnished to Norwest Bank Minnesota, National Association, as Trustee, Standard & Poor's Ratings Services and Moody's Investors Service, Inc., as required by Section 4.10(a) of the Agreement.
IN WITNESS WHEREOF, I have set my hand effective as of the 31st day of March, 1999.
By: /s/ Tomoaki Shimazu ------------------- Tomoaki Shimazu Vice President, Finance and Corporate Planning
NISSAN AUTO RECEIVABLES 1998-A GRANTOR TRUST
Financial Statements as of March 31, 1999, and for the Period December 1, 1998 (date of formation) through March 31, 1999
INDEPENDENT AUDITORS' REPORT
Nissan Auto Receivables 1998-A Grantor Trust:
We have audited the accompanying balance sheet of Nissan Auto Receivables 1998-A Grantor Trust (the "Trust") as of March 31, 1999, and the related statements of income, changes in net assets held in trust, and cash flows for the period December 1, 1998 (date of formation) through March 31, 1999. 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 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.
In our opinion, such financial statements present fairly, in all material respects, the financial position of the Trust as of March 31, 1999, and results of its operations and cash flows for the period December 1, 1998 (date of formation) through March 31, 1999 in conformity with generally accepted accounting principles.
May 5, 1999
NISSAN AUTO RECEIVABLES 1998-A GRANTOR TRUST BALANCE SHEET (Dollars in Thousands) - --------------------------------------------------------------------------------
March 31, 1999 -------------- ASSETS: - ------- Cash and cash equivalents in collection account (Notes 2 and 4) $ 45,324 Finance receivables (Notes 2, 4, 6 and 8) ..................... 808,333 Collections receivable from Servicer (Note 2) ................. 2,286 Receivable from yield supplement account (Note 5) ............. 197 -------- TOTAL ASSETS .................................................. $856,140 ========
LIABILITIES: - ------------ Servicing fee payable (Notes 1 and 2) ......................... $ 709 Distributions payable - Class A (Note 4) ...................... 41,420 Distributions payable - Class B (Note 4) ...................... 5,118 Payable to Seller ............................................. 560 -------- Total liabilities ...................................... 47,807 ======
NET ASSETS HELD IN TRUST: - ------------------------- Asset backed certificates, Class A (Notes 1, 3, 4 and 6) ...... 719,416 Asset backed certificates, Class B (Notes 1, 3, 4 and 6) ...... 88,917 -------- Total net assets held in trust ................................ 808,333 ------- TOTAL LIABILITIES AND NET ASSETS HELD IN TRUST ................ $856,140 ========
See accompanying notes to financial statements.
STATEMENT OF INCOME (Dollars in Thousands) - -------------------------------------------------------------------------------- Period December 1, 1998 (Date of Formation) through March 31, 1999 --------------
INCOME: - ------- Interest income on finance receivables (Note 4) ...... $25,598 Interest income from yield supplement account (Note 5) 862 --- Total income ................................... 26,460 ======
EXPENSE: - -------- Servicing fee (Notes 1, 2, 3, and 4) ................. 3,052 Principal losses (Notes 3 and 4) ..................... 2,723 Excess amounts paid to Seller (Notes 3 and 4) ........ 4,049 ----- Total expense .................................. 9,824 -----
NET INCOME ........................................... $16,636 =======
See accompanying notes to financial statements.
STATEMENT OF CHANGES IN NET ASSETS HELD IN TRUST Period December 1, 1998 (Date of Formation) through March 31, 1999 (Dollars in Thousands) - --------------------------------------------------------------------------------
Class A Class B Total ------- ------- -----
Issuance of asset backed securities (Note 1) $ 889,551 $ 109,944 $ 999,495
Net income 14,806 1,830 16,636
Interest distributions (Notes 3 and 4) (14,806) (1,830) (16,636)
Principal distributions (Notes 3 and 4) (170,135) (21,027) (191,162) -------- ------- --------
Net assets held in Trust at March 31, 1999 $ 719,416 $ 88,917 $ 808,333 ========= ========= =========
See accompanying notes to financial statements.
STATEMENT OF CASH FLOWS (Dollars in Thousands) - -------------------------------------------------------------------------------- Period December 1, 1998 (Date of Formation) through March 31, 1999 -------------- Cash flows from operating activities: Net income .......................................................... $ 16,636 Adjustments to reconcile net income to net cash provided by operating activities: Excess amounts received and allocated to principal losses ........... 2,723 Changes in operating assets and liabilities: Increase in collections receivable from Servicer .................... (2,286) Increase in receivable from yield supplement account ................ (197) Increase in servicing fee payable ................................... 709 Increase in payable to Seller ....................................... 560 --------- Net cash provided by operating activities ........................... 18,145 Net cash provided by investing activities - principal payments received from finance receivables ................................... 188,439 --------- Cash flows from financing activities: Trust principal distributions Class A certificateholders ....................................... (132,155) Class B certificateholder ........................................ (16,334) Trust interest distributions Class A certificateholders ....................................... (11,366) Class B certificateholder ........................................ (1,405) --------- Net cash used in financing activities ............................... (161,260) --------- Cash and cash equivalents at March 31, 1999 ......................... $ 45,324 ========= Supplemental disclosure of cash flow information -- Non-cash investing activities: Purchase of finance receivables in exchange for asset backed certificates ................................................ $ 999,495 =========
See accompanying notes to financial statements.
NISSAN AUTO RECEIVABLES 1998-A GRANTOR TRUST NOTES TO FINANCIAL STATEMENTS PERIOD DECEMBER 1, 1998 (DATE OF FORMATION) THROUGH MARCH 31, 1999 - -------------------------------------------------------------------------------- 1. GENERAL INFORMATION
The Nissan Auto Receivables 1998-A Grantor Trust (the "Trust") was formed by Nissan Auto Receivable Corporation (the "Seller") by selling and assigning $999,495,000 of retail automotive vehicle finance receivables and the related security interests in the vehicles financed thereby to Norwest Bank Minnesota, National Association, as Trustee, in exchange for Class A certificates representing an undivided ownership interest of 89% in the Trust and for the Class B certificate representing an undivided ownership interest of 11% in the Trust. The Class A certificates were remarketed to the public and the Class B certificate was retained by the Seller. The rights of the Class B certificateholder to receive distributions are subordinated to the rights of the Class A certificateholders. The Seller has the option to repurchase the remaining receivables on or after the date on which the principal balance declines below 10% of the aggregate amount financed.
The parent of the Seller, Nissan Motor Acceptance Corporation (the "Company" or the "Servicer") services the receivables pursuant to a Pooling and Servicing Agreement (the "Agreement") dated as of December 1, 1998 and is compensated for acting as the Servicer. In order to facilitate its servicing functions and minimize administrative burdens and expenses, the Company retains physical possession of the documents relating to the receivables as custodian for the Trustee. The Trust has no employees.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - The financial statements have been prepared on an accrual basis of accounting. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS - The Company considers investments purchased with a maturity of three months or less to be cash equivalents.
Cash and cash equivalents in the collection account as of March 31, 1999 amounted to $45,324,000, which represents payments received by the Servicer during March 1999.
COLLECTIONS RECEIVABLE FROM SERVICER - Collections receivable from the Servicer amounted to $2,286,000 and are substantially comprised of collections received by the Servicer on March 31, 1999 and deposited in the collection account on April 1, 1999.
NISSAN AUTO RECEIVABLES 1998-A GRANTOR TRUST
FINANCE RECEIVABLE - Interest income on these receivables is calculated using the simple interest method and is recorded as earned. The finance receivables have a weighted average coupon rate of 8.52% and a weighted average maturity of 39 months at March 31, 1999.
SERVICING FEE - The servicing fee is calculated as 1% of the beginning balance of finance receivables and is recorded on a monthly basis. The amount of servicing fee for the period ended March 31, 1999 amounted to $3,052,000, of which $709,000 is included in servicing fee payable at March 31, 1999.
3. PRIORITIES OF DISTRIBUTIONS
The total collections received by the Trust are distributed in the following priority:
Servicing fee to Seller Unpaid Trustee fees and expenses Class A interest at pass-through rate Class A principal (including losses) Deposit to Class A Subordination Spread Account Class B interest at pass-through rate Class B principal (including losses) Yield Supplement Account Release to Seller Excess amounts to Seller
If losses are greater than the excess amounts, the Class B certificateholder will not receive its allocated principal. The principal shortfall is carried over to future periods and is reduced by excess collections, if any.
4. PRINCIPAL AND INTEREST PAYMENTS
Principal (including prepayments) is passed through on each distribution date commencing January 15, 1999, as defined in the Agreement. Principal consists of payments on the receivables that are allocable to the repayment of the amount financed. Interest is passed through to certificateholders on each distribution date, as defined in the Agreement, commencing January 15, 1999, at a pass-through rate of 5.45% per annum, calculated using the simple interest method. Excess amounts, if any, which are the difference between the yield of the finance receivables, the servicing fee, the pass-through rate and losses, are distributed to the Seller in accordance with the terms of the Agreement.
NISSAN AUTO RECEIVABLES 1998-A GRANTOR TRUST
The "as-of" date of the finance receivables was October 31, 1998. Principal payments that passed through on January 15, 1999 included principal payments for the period November 1, 1998 to November 30, 1998. Interest collected for the period prior to the date of formation of the Trust was distributed to the Seller.
The cash flows for the period ended March 31, 1999 are summarized as follows (dollars in thousands):
Excess amnts Intrst allctd at pass- Prncpl to Excess Srvcng thru pymnts prncpl amounts fee rate rcvd losses dstrbtd --- ---- ---- ------ ------- Servicer Distributed .................. $ 2,343 $ -- $ -- $ -- $ -- Distributions to be paid ..... 709
Class A certificateholders Distributed .................. 11,366 132,155 Distributions to be paid ..... 3,440 37,980
Class B certificateholder Distributed .................. 1,405 14,669 1,664 Distributions to be paid ..... 425 3,635 1,059
Seller Excess amounts paid to Seller 3,489 Excess amounts to be paid to 560 Seller ------- -------- -------- ------ ------ Total amount distributed and to be paid ............... $ 3,052 $ 16,636 $188,439 $2,723 $4,049 ======= ======== ======== ====== ======
5. YIELD SUPPLEMENT ACCOUNT
The Agreement requires the Seller to set up a Yield Supplement Account ("YSA Account"), which is a separate trust account for the benefit of the Class A certificateholders. The initial deposit required and made by the Seller amounted to $4,107,000. This account is used to compensate the Class A certificateholders for all receivables purchased by the Trust with a yield less than the pass-through rate of 5.45%. Amounts in the YSA Account, which are released to the Class A certificateholders on a monthly basis, are calculated as one-twelfth times the difference between the yield of these receivables and the pass-through rate. The amount in the YSA Account at March 31, 1999 was $3,066,000, which included $197,000 which is payable to the Trust. The total amount of interest received from the YSA Account amounted to $862,000 for the period ended March 31, 1999.
NISSAN AUTO RECEIVABLES 1998-A GRANTOR TRUST
6. CREDIT ENHANCEMENT
To protect the Class A certificateholders, the Agreement requires the Seller to set up a Subordination Spread Account ("SSA Account"), which is a separate trust account for the benefit of the Class A certificateholders. The initial deposit required was $9,995,000. Additionally, if certain loss and/or delinquency ratios rise above set limits, the Seller is required to deposit in the SSA Account all amounts otherwise distributable to the Class B certificateholder and all excess servicing amounts otherwise distributable to the Seller, until the SSA Account reaches the level specified in the Agreement. The specified amount on March 31, 1999 was $14,992,000. The SSA Account amounted to $14,992,000 on March 31, 1999.
Neither the Class B certificateholder nor the Seller will receive any distributions while the loss and/or delinquency ratios continue to be above the set limits for three consecutive months and until the SSA Account reaches the level specified.
As of March 31, 1999, the anticipated credit losses on finance receivables based on historical loss experience are estimated to be $18,297,000. Management believes that future receipts of excess servicing amounts will be adequate to repay all amounts due to Class A and Class B certificateholders, as such no allowance for bad debts has been established.
7. FEDERAL INCOME TAXES
The Trust is classified as a grantor trust, and therefore is not taxable as a corporation for federal income tax purposes. Each certificateholder is treated as the owner of a pro rata undivided interest in each of the receivables in the Trust.
8. ESTIMATED FAIR VALUES OF FINANCE RECEIVABLES
The fair value of the finance receivables was estimated by discounting the future cash flows using current market discount rates and historical prepayment and credit loss history. As of March 31, 1999, the estimated fair value of the finance receivables was $805,522,000. Cash and cash equivalents in collection account, other receivables, and payables approximate fair values due to the short-term maturities of these instruments.
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