-----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, R4Mps5F+G9+5Ahxahs65v+goDIiMWDoO5VPV6DA+iSOu2ScxG7ln3+qxxW6AYxV4 LXJ6j5Q0rgnMJMaJ7eh+yw== 0000893220-99-000884.txt : 19990809 0000893220-99-000884.hdr.sgml : 19990809 ACCESSION NUMBER: 0000893220-99-000884 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19990806 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: 99679200 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, 1997. 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: $ 90,853,767.87, as of February 28, 1998. 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"). The Subservicer has agreed pursuant to a subservicing agreement to perform the obligations of the Master Servicer under the Sale and Servicing Agreement. 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 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 substantially 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. has filed an answer to the Complaint denying the material allegations of the Complaint. Advanta Corp. also has filed a countersuit against Fleet seeking damages from Fleet. Advanta Corp. does not expect this suit to have any material adverse effect on the financial position or future operating results. 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 13, 1998, there were approximately 4 holders of the Class A-1 Notes, 3 holders of the Class A-2 Notes, 8 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, 1997, no 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 and 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 - --------------- Bank of New York 925 Patterson Plank Rd. Secaucus, NJ 07094 6,000 30.00% Chase Manhattan Bank 4 New York Plaza 13th Floor New York, NY 10004 5,000 25.00% Chase Manhattan Bank/Chemical 4 New York Plaza Proxy Department 13th Floor New York, NY 10004 2,000 10.00% State Street Bank and Trust Company 1776 Heritage Drive Global Corporate Action Unit JAB 5NW No. Quincy, MA 02171 7,000 35.00% 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% Manufacturers 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% Mercantile Bancorporation Inc. 721 Locust Street, 19th Floor St. Louis, MO 63101 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 17.24% 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, 1997, and mail such statement to the Noteholders on or before the last day of March, 1998 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, 1998. The Subservicer has agreed, pursuant to the subservicing agreement, to perform the obligations of the Master Servicer under the Sale and Servicing Agreement, including the obligation to deliver the Annual Statement as to Compliance which 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, 1997. 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. (b) Reports on Form 8-K. No reports on Form 8-K have been filed by the Issuer during the period which relate to the period covered by this report. 8 9 Notes and Class A-4 Asset-Backed Notes (c) See "Item 14(a)(3)-Exhibits". (d) Not applicable. 9 10 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 August 6, 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: August 6, 1999 By: /s/ Michael Coco ------------------------------------------ Name: Michael Coco Title: Vice President Date: August 6, 1999 By: /s/ Susan McVeigh ------------------------------------------ Name: Susan McVeigh Title: Vice President and Treasurer Date: August 6, 1999 By: /s/ James Shreero ------------------------------------------ Name: James Shreero Title: Vice President and Assistant Treasurer Date: August 6, 1999 10 11 By: /s/ Mark Dunsheath ------------------------------------------ Name: Mark Dunsheath Title: Vice President Date: August 6, 1999 11 12 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. 12 EX-28.1 2 ANNUAL STATEMENT AS TO COMPLIANCE FOR 1998 1 EXHIBIT 28.1 [LETTERHEAD] NuVell Financial Services Corp. March 16, 1998 Dave Plante Advanta Auto Finance 500 Office Center Drive Suite 400 Fort Washington, PA 19034 RE: Servicing Agreement dated March 28, 1996, between Advanta Auto Receivables Trust 1997-2 ("Trustee"), and LSI Financial Group ("Servicer") Mr. Plante: A review of the activities of the Servicer during the preceding calendar year and of performance under this Agreement has been made under such officer's supervision and pursuant to Section 7.04(b) of the Servicing Agreement. To the best of my knowledge, based on such review, the Servicer has fulfilled all its obligations under this Agreement and has been in compliance with all federal, state and local laws relating to the servicing and collection of the Auto Loans and its performance of the Agreement throughout such year. Sincerely, Timothy S. Sambrano President, CEO c: NuVell FAC General Counsel 13 EX-28.2 3 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCTS.REPORT 1 Exhibit 28.2 [Deloitte & Touche LLP Letterhead] INDEPENDENT ACCOUNTANT'S REPORT To Nuvell Financial Services Corp.: We have examined management's assertion about Nuvell Financial Services Corp.'s (a wholly owned subsidiary of Basic Credit Holding Company, LLC) compliance with the minimum servicing standards identified in the Mortgage Bankers Association of America's Uniform Single Attestation Program for Mortgage Bankers ("USAP") as of December 31, 1997, and for the period from November 1, 1997 through December 31, 1997, included in the accompanying management assertion. Management is responsible for Nuvell Financial Services Corp.'s compliance with those minimum servicing standards. Our responsibility is to express an opinion on management's assertion about the entity'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 Nuvell Financial Services Corp.'s compliance with the minimum servicing standards and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on Nuvell Financial Services Corp.'s compliance with the minimum servicing standards. In our opinion, management's assertion that Nuvell Financial Services Corp. complied with the aforementioned minimum servicing standards as of December 31, 1997, and for the period from November 1, 1997 through December 31, 1997, is fairly stated, in all material respects. Deloitte & Touche LLP March 13, 1998 14 -----END PRIVACY-ENHANCED MESSAGE-----