-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GEdz5gTcXQOX+q94xWqirvEb76kkeMd/OGmpSKeRW00n/PVThjAKDR3XRe9bB9+F UXRtjK1yjRmEm9fDkfKY7g== 0000893220-99-000406.txt : 19990402 0000893220-99-000406.hdr.sgml : 19990402 ACCESSION NUMBER: 0000893220-99-000406 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19990331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVANTA AUTOMOBILE RECEIVABLES TRUST 1997-2 CENTRAL INDEX KEY: 0001051596 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 333-19733-02 FILM NUMBER: 99582443 BUSINESS ADDRESS: STREET 1: C/O ADVANTA AUTO FINANCE CORP STREET 2: 800 RIDGEVIEW DRIVE CITY: HORSHAM STATE: PA ZIP: 19044 BUSINESS PHONE: 2154444663 MAIL ADDRESS: STREET 1: C/O ADVANTA AUTO FINANCE CORP STREET 2: 800 RIDGEVIEW DRIVE CITY: HORSHAM STATE: PA ZIP: 19044 10-K405 1 ADVANTA AUTO FINANCE CORP. 1 FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 1998. OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from _____________ to ___________________. Commission file number 333-19733-02 ADVANTA AUTO FINANCE CORPORATION (Exact Name of Registrant as specified in its charter) 23-2826077 NEVADA ------------------ (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification No.) Welsh & McKean Roads, Spring House, PA 19027 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (215) 323-4200 2 Securities Registered Pursuant to Section 12(b) of the Act. Name of each exchange on Title of each class which registered: None None Securities registered pursuant to Section 12(g) of the Act: None (Title of class) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] State the aggregate market value of the voting stock and non-voting common equity held by non-affiliates of Registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of specified date within 60 days prior to the date of filing: $ 71,258,880.99, as of February 28, 1999. Documents Incorporated by Reference: Part IV 2 3 PART I ITEM 1. BUSINESS The Advanta Automobile Receivables Trust 1997-2, (the "Trust" or "Issuer") is a business trust established as of December 1, 1997, pursuant to a Trust Agreement (the "Trust Agreement") between Advanta Auto Receivables Corp. I (the "Seller") and Wilmington Trust Company, acting thereunder not in its individual capacity but solely as trustee under the Trust Agreement (the "Owner Trustee"). The Issuer's only purpose is the issuance of $20,000,000 5.85625% Class A-1 Asset Backed Notes, $31,000,000 6.19% Class A-2 Asset Backed Notes, $29,000,000 6.22% Class A-3 Asset Backed Notes and $16,192,000 6.26% Class A-4 Asset Backed Notes (collectively, the "Notes") issued pursuant to an Indenture dated as December 1, 1997 (the "Indenture") between the Trust and Norwest Bank Minnesota, National Association, as indenture trustee and as trust collateral agent (the "Indenture Trust" and the "Trust Collateral Agent"). The Trust also issued $36,486,749 aggregate principal amount of 6.26% Asset Backed Certificates which were not offered but retained by the Seller (the "Certificates"). The assets of the Trust consist primarily of a pool of sub-prime motor vehicle retail installment sale contracts (the "Receivables") purchased by the Seller from Advanta Auto Finance Corporation (the "Registrant" and the "Master Servicer"). Scheduled payments on the Notes are unconditionally and irrevocably guaranteed pursuant to a financial guaranty insurance policy (the "Policy") issued by Financial Security Assurance (the "Certificate Insurer"). The Receivables are serviced by the Master Servicer pursuant to a Sale and Servicing Agreement (the "Sale and Servicing Agreement") dated as of December 1, 1997 among the Issuer, the Seller, the Master Servicer and the Trust Collateral Agent and subserviced by Nuvell Financial Services Corp. (the "Subservicer"). On December 17, 1997, the Seller sold $96,192,000 aggregate principal amount of Receivables to the Issuer and the Issuer pledged such Receivables to the Trust in exchange for the Notes and the Issuer sold the Notes pursuant to a public offering, the underwriting of which was managed by Prudential Securities Incorporated. The Receivables and the distributions thereon, along with certain insurance proceeds and certain proceeds from liquidation of the Receivables, are the only significant assets of the Issuer. The Notes represent obligations solely of the Issuer. The Notes were registered under a Registration Statement (file no. 333-19733) on Form S-3 declared effective on March 21, 1997. ITEM 2. PROPERTIES The Issuer neither owns nor leases any physical properties. ITEM 3. LEGAL PROCEEDINGS The Master Servicer is not aware of any material pending legal proceedings involving either the Issuer, the Trustee, the Seller or the Master Servicer with respect to the Notes 3 4 or the Issuer's property. However, the Seller is a direct subsidiary of the Master Servicer and the Master Servicer is an indirect subsidiary of Advanta Corp., a Delaware corporation ("Advanta Corp."), a publicly-traded company with its principal executive offices located in Spring House, Pennsylvania. The Master Servicer services Receivables securitized by the Seller. On January 25, 1999 Advanta Corp. reported that on Friday, January 22, 1999, Fleet Financial Group, Inc. and certain of its affiliates ("Fleet") filed a complaint (the "Complaint") against Advanta Corp. and certain of its affiliates relating to the transaction with Fleet which closed on February 20, 1998 in which Advanta Corp. contributed most of its consumer credit card business to a limited liability company owned by Fleet (the "Fleet Transaction"). The Complaint centers around post-closing adjustments to the transaction and other matters relating to the Fleet Transaction. Advanta Corp. believes that the lawsuit is inappropriate and without merit and, on February 16, 1999 it filed its answer and counterclaims in which it denies all of the substantive allegations in the Complaint and seeks damages from Fleet. Advanta Corp. does not expect this suit to have any material adverse financial impact on its business. The ability of Advanta Corp.'s subsidiaries to honor their financial and other obligations is to some extent influenced by the financial condition of Advanta Corp. Such obligations primarily consist of the Seller's obligation to repurchase Receivables which are inconsistent with representations and warranties set forth in certain agreements relating to Notes issued by the Trust sponsored by the Registrant as well as the obligations of the Master Servicer pursuant to certain agreements relating to the Notes issued by the Trust. In addition, on or about March 3, 1999 Advanta Corp. announced that it intends to exit the automobile financing business. This Report on Form 10-K contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The most significant among these risks and uncertainties is the uncertainty of the legal process. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter has been submitted to a vote of the holders of beneficial interests in the Issuer through the solicitation of proxies or otherwise. 4 5 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Trust is not an issuer of common stock in a corporation, although the Notes have voting rights. The equity of the Trust consists of the beneficial or ownership interest therein for which, to the best knowledge of the Master Servicer, there is no established public trading market. As of March 29, 1999, there were approximately 0 holders of the Class A-1 Notes, 2 holders of the Class A-2 Notes, 4 holders of the Class A-3 Notes and 1 holder of the Class A-4 Notes. The number of holders includes individual participants in security position listings. As of December 15, 1998, 12 monthly distributions had been made to the holders of the Notes. ITEM 6. SELECTED FINANCIAL DATA Not Applicable. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATION On December 17, 1997, the Issuer issued $20,000,000.00 aggregate principal amount of Class A-1 Notes having a fixed rate of 5.85625% per annum, $31,000,000.00 aggregate principal amount of Class A-2 Notes having a fixed rate of 6.19% per annum, $29,000,000 aggregate principal amount of Class A-3 Notes having a fixed rate of 6.22% per annum and $16,192,000 aggregate principal amount of Class A-4 Notes having a fixed rate of 6.26% per annum which are collateralized by Receivables. The sale of the Receivables to the Issuer, the issuance of the Notes and the simultaneous delivery of the Notes to the Issuer for sale pursuant to a public offering, the underwriting of which was co-managed by Prudential Securities Incorporated has been accounted for as a sale of the Notes. The value of the Notes issued by the Issuer equaled the value of the Receivables conveyed to the Issuer by the Seller. Accordingly, there was no income to the Issuer resulting from the aforementioned transaction. CAPITAL RESOURCES AND LIQUIDITY The Issuer's primary sources of funds with respect to the Notes will be receipts of interest on and principal of the Receivables, along with certain insurance proceeds and certain proceeds from the liquidation of the Receivables. The respective managements of the Seller and the Master Servicer believe that the Issuer will have sufficient liquidity and capital resources to pay all amounts on the Notes as they become due and all other 5 6 anticipated expenses of the Issuer. The Issuer does not have, nor will it have in the future, any significant source of capital for payment of the Notes and its operating expenses other than the receipt of interest on and principal of the Receivables, certain insurance proceeds and certain proceeds obtained from the liquidation of the Receivables and any payments made by the Certificate Insurer. The Issuer is a limited purpose trust. The Notes represent obligations solely of the Issuer. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA Not Applicable. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There were no changes of accountants or disagreements on accounting or financial disclosures between the Issuer and its accountants. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The Issuer does not have any directors or officers. The following individuals comprise the board of directors and officers of the Registrant: Name Position - ---- -------- David E. Plante President and Director Susan McVeigh Vice President and Treasurer Michael Coco Vice President James Shreero Vice President John Calamari Assistant Treasurer Mark Dunsheath Vice President Scott Heidemann Assistant Secretary and Assistant Treasurer Robert Cardwell Assistant Secretary ITEM 11. EXECUTIVE COMPENSATION Not Applicable. The Issuer does not have employees. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth (i) the name and address of each entity owning more than 5% of the outstanding principal amount of the Advanta Automobile Receivables Trust 1997-2, Class A-1 Notes ("Class A-1 Notes"), Class A-2 Notes ("Class A-2 Notes"), Class A-3 Notes (the "Class A-3 Notes") and Class A-4 Notes (the "Class A-4 Notes") (ii) the principal amount of each Class of Notes and (iii) the percent that the principal 6 7 amount of each Class of Notes owned represents of the outstanding principal amount of such Class of Notes. The information set forth in the table is based upon information obtained by the Issuer from Depository Trust Company. The Registrant is not aware of any Schedules 13D or 13G filed with the Securities and Exchange Commission in respect of the Notes.
AMOUNT OWNED ------------------------------------- (All Dollar Amounts are in Thousands) ------------------------------------- NAME AND ADDRESS PRINCIPAL PERCENT - ---------------- --------- ------- Class A-1 Notes 0 0.00% Class A-2 Notes - --------------- Chase Manhattan Bank 4 New York Plaza 13th Floor New York, NY 10004 15,000 48.39% Northern Trust Company-Safekeeping 50 South Lasalle Street, Level A Chicago, IL 60675 15,000 48.39% Class A-3 Notes - --------------- Chase Manhattan Bank 4 New York Plaza 13th Floor New York, NY 10004 7,000 24.14% Manufactures and Traders Trust Company P.O. Box 1377 Buffalo, NY 14240 2,000 6.90% Northern Trust Company-Safekeeping 50 South Lasalle Street, Level A Chicago, IL 60675 13,000 44.83% State Street Bank and Trust Company 1776 Heritage Drive Global Corporate Action Unit JAB 5NW No. Quincy, MA 02171 5,500 18.97% Class A-4 Notes - --------------- Bank of New York 925 Patterson Plank Rd. Secaucus, NJ 07094 16,192 100.00%
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. 7 8 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) The following documents are filed as part of this report: 1. Financial Statements: Not applicable. 2. Financial Statement Schedules: Not applicable. 3. Exhibits: As the Issuer was established as of December 17, 1997, the Master Servicer is obligated to prepare an Annual Statement as to Compliance for the year ended December 31, 1998, and mail such statement to the Noteholders on or before the last day of March, 1999 and Independent Certified Public Accounts are required to prepare an annual report pertaining to the compliance of the Master Servicer with its servicing obligations pursuant to the Sale and Servicing Agreement on or before the last day of March, 1999. The Annual Statement as to Compliance is included herewith as Exhibit 28.1 and the Annual Independent Certified Public Accounts' Report is included herewith as Exhibit 28.2. Exhibit No. Description - ----------- ----------- *3.1 Certificate of Incorporation of the Advanta Auto Finance Corporation. *3.2 By-laws of the Advanta Auto Finance Corporation. *4 Sale and Servicing Agreement. 28.1 Annual Statement as to Compliance for the year ended December 31, 1998. 28.2 Annual Independent Certified Public Accountants' Report. *99.1 Monthly Reports for the payment periods ending January, February, March, April, May, June, July, August, September, October, November and December 1998. *Incorporated by reference to the Exhibit of the same designation filed with the Issuer's Form S-3 registration statement declared effective March 21, 1997 and also Incorporated by reference from previously filed current Reports on Form 8-K listed below. (b) Reports on Form 8-K. 13 reports on Form 8-K have been filed by the Issuer during the period, 12 of which relate to the period covered by this report. 8 9 Date of Reports on Form 8-K ITEMS REPORTED/ FINANCIAL STATEMENTS FILED June 12, 1998 Monthly Report for the December 1997 Monthly Period relating to Advanta Automobile Receivables Trust 1997-2, Class A-1 Asset-Backed Notes, Class A-2 Asset-Backed Notes, Class A-3 Asset-Backed Notes and Class A-4 Asset-Backed Notes June 12, 1998 Monthly Report for the January 1998 Monthly Period relating to Advanta Automobile Receivables Trust 1997-2, Class A-1 Asset-Backed Notes, Class A-2 Asset-Backed Notes, Class A-3 Asset-Backed Notes and Class A-4 Asset-Backed Notes June 12, 1998 Monthly Report for the February 1998 Monthly Period relating to Advanta Automobile Receivables Trust 1997-2, Class A-1 Asset-Backed Notes, Class A-2 Asset-Backed Notes, Class A-3 Asset-Backed Notes and Class A-4 Asset-Backed Notes June 12, 1998 Monthly Report for the March 1998 Monthly Period relating to Advanta Automobile Receivables Trust 1997-2, Class A-1 Asset-Backed Notes, Class A-2 Asset-Backed Notes, Class A-3 Asset-Backed Notes and Class A-4 Asset-Backed Notes June 12, 1998 Monthly Report for the April 1998 Monthly Period relating to Advanta Automobile Receivables Trust 1997-2, Class A-1 Asset-Backed Notes, Class A-2 Asset-Backed Notes, Class A-3 Asset-Backed Notes and Class A-4 Asset-Backed Notes June 25, 1998 Monthly report of the May 1998 Monthly Period relating to Advanta Automobile Receivables Trust 1997-2, Class A-1 Asset-Backed Notes, Class A-2 Asset-Backed 9 10 Notes, Class A-3 Asset-Backed Notes and Class A-4 Asset-Backed Notes August 17, 1998 Monthly Report for July 1998 Monthly Period relating to Advanta Automobile Receivables Trust 1997-2 Class A-1 Asset-Backed Notes and Class A-2 Asset-Backed Notes October 21, 1998 Monthly Report for the September 1998 Monthly Period relating to Advanta Automobile Receivables Trust 1997-2, Class A-1 Asset-Backed Notes, Class A-2 Asset-Backed Notes, Class A-3 Asset-Backed Notes and Class A-4 Asset-Backed Notes October 22, 1998 Monthly Report for the August 1998 Monthly Period relating to Advanta Automobile Receivables Trust 1997-2, Class A-1 Asset-Backed Notes, Class A-2 Asset-Backed Notes, Class A-3 Asset-Backed Notes and Class A-4 Asset-Backed Notes November 18, 1998 Monthly Report for the October 1998 Monthly Period relating to Advanta Automobile Receivables Trust 1997-2, Class A-1 Asset-Backed Notes, Class A-2 Asset-Backed Notes, Class A-3 Asset-Backed Notes and Class A-4 Asset-Backed Notes December 21, 1998 Monthly Report for the November 1998 Monthly Period relating to Advanta Automobile Receivables Trust 1997-2, Class A-1 Asset-Backed Notes, Class A-2 Asset-Backed Notes, Class A-3 Asset-Backed Notes and Class A-4 Asset-Backed Notes December 30, 1998 Monthly Report for the June 1998 Monthly Period relating to Advanta Automobile Receivables Trust 1997-2, Class A-1 Asset-Backed Notes, Class A-2 Asset-Backed Notes, Class A-3 Asset-Backed 10 11 Notes and Class A-4 Asset-Backed Notes January 20, 1999 Monthly Report for the December 1998 Monthly Period relating to Advanta Automobile Receivables Trust 1997-2, Class A-1 Asset-Backed Notes and Class A-2 Asset-Backed Notes (c) See "Item 14(a)(3)-Exhibits". (d) Not applicable. 11 12 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. ADVANTA AUTO FINANCE CORPORATION as Registrant and Master Servicer and on behalf of Advanta Automobile Receivables Trust 1997-2 By: /s/ David E. Plante ---------------------- Name: David E. Plante Title: President March 31, 1999 Pursuant to the requirements of the Securities and Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. By: /s/ David E. Plante ------------------------------------------ Name: David E. Plante Title: President and Director Date: March 31, 1999 By: /s/ Michael Coco ------------------------------------------ Name: Michael Coco Title: Vice President Date: March 31, 1999 By: /s/ Susan McVeigh ------------------------------------------ Name: Susan McVeigh Title: Vice President and Treasurer Date: March 31, 1999 By: /s/ James Shreero ------------------------------------------ Name: James Shreero Title: Vice President and Assistant Treasurer Date: March 31, 1999 By: /s/ John Calamari ------------------------------------------ Name: John Calamari Title: Assistant Treasurer 12 13 Date: March 31, 1999 By: /s/ Mark Dunsheath ------------------------------------------ Name: Mark Dunsheath Title: Vice President Date: March 31, 1999 13 14 INDEX TO EXHIBITS (ITEM 14(c)) Exhibit No. Description - ----------- ----------- *3.1 Certificate of Incorporation of the Advanta Auto Finance Corporation *3.2 By-laws of the Advanta Auto Finance Corporation *4 Sale and Servicing Agreement 28.1 Annual Statement as to Compliance for the year ended December 31, 1998 28.2 Annual Independent Certified Public Accountants' Report. * Incorporated by reference to the Exhibit of the same designation filed with the Issuer's Form S-3 registration statement declared effective March 21, 1997 and also Incorporated by reference from previously filed Current Reports on Form 8-K listed herein. 14 EX-28.1 2 ANNUAL STATEMENT COMPLIANCE DEC. 31 , 1998 1 EXHIBIT 28.1 [LETTERHEAD] NuVell Financial Services Corp. March 30, 1999 Dave Plante Advanta Auto Finance Corporation 800 Ridgeview Drive Horsham, PA 19044 RE: Sale and Servicing Agreement dated December 1, 1997, between Advanta Automobile Receivables Trust 1997-2 ("Issuer"), and other parties. Dear Mr. Plante, A review of the activities of Nuvell Financial Services Corp. (the "Sub-Servicer") during the preceding calendar year and of its performance under this Agreement has been made under such officer's supervision and pursuant to Section 4.10(a) of the Agreement. To the best of my knowledge, based on such review, the Sub-Servicer has fulfilled all of its obligations under this Agreement during the preceding calendar year. We understand that Advanta may provide a copy of this letter to the Trustee, the Owner Trustee, the Trust Collateral Agent and the Insurer pursuant to Section 4.10(a) of the Agreement. Sincerely, J. Robert Hardesty Executive Vice President cc: General Counsel 15 EX-28.2 3 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCTS.REPORT 1 Exhibit 28.2 [LETTERHEAD] DELOITTE & TOUCHE LLP ______________________________________________________ Deloitte & Touche LLP Telephone: (501) 370-3600 Suite 1800 Facsimile: (501) 374-4809 111 Center Street Facsimile: (501) 375-7817 Little Rock, Arkansas 72201 INDEPENDENT ACCOUNTANTS' REPORT To the Board of Directors of Nuvell Financial Services Corp. Little Rock, Arkansas: We have examined management's assertion about Nuvell Financial Services Corp.'s (the "Company's") compliance with its established minimum Servicing Standards (herein "Servicing Standards") identified and included in the accompanying management assertion as of and for the year ended December 31, 1998, dated March 26, 1999. Management is responsible for the Company's compliance with the Servicing Standards. Our responsibility is to express an opinion on management's assertion about the Company's compliance based on our examination. Our examination was made in accordance with standards established by the American Institute of Certified Public Accountants and accordingly, included examining, on a test basis, evidence about the Company's compliance with the Servicing Standards and performing such other prodcedures as we considered necessary in circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination of the Company's compliance with the Servicing Standards. In our opinion management's assertion that the Company complied with the aforementioned Servicing Standards as of and for the year ended December 31, 1998, is fairly stated, in all material respects. Deloitte & Touche LLP March 26, 1999 16 -----END PRIVACY-ENHANCED MESSAGE-----