UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF
- ----- 1934 FOR THE YEAR ENDED DECEMBER 31, 2001, OR
TRANSITION REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT
- ----- OF 1934 FOR THE TRANSACTION PERIOD FROM ________ TO ________.
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST VII 333-57494
- ------------------------------------------------ ---------------
(Exact name of registrant as Commission
specified in its charter) file number
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST VII
A Delaware Business Trust 38-3082709
- ------------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Chase Manhattan Bank USA, National Association
500 Stanton Christiana Rd., 0PS4 / 3rd Floor
Newark, Delaware 19713
- --------------------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code (302) 552-6279
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Securities registered pursuant to Section 12 (b) of the Act: (None).
Section 12 (g) of the Act: (None).
Indicate by check mark whether each of the registrants (1) has filed all reports
required to be filed by Section 13 of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No .
--- ---
PART I
ITEM 1. BUSINESS
Superior Wholesale Inventory Financing Trust VII (the "Trust" or the "Issuer")
was formed pursuant to a trust agreement, dated as of March 15, 2001, between
Wholesale Auto Receivables Corporation (the "Seller") and Chase Manhattan Bank
USA, National Association, as Owner Trustee. On March 15, 2001, the Trust issued
Asset Backed Certificates, with an aggregate initial certificate balance of
$125,000,000. On March 15, 2001, the Trust also issued Floating Rate Asset
Backed Term Notes, Series 2001-A in the aggregate principal amount of
$2,000,000,000 and Floating Rate Asset Backed Term Notes, Series 2001-B in the
aggregate principal amount of $750,000,000. On August 24, 2001, the Trust issued
Floating Rate Asset Backed Revolving Note, Series 2001-RN1 with a specified
maximum revolver balance of $1,000,000,000. On August 29, 2001, the Trust issued
Floating Rate Asset Backed Term Notes, Series 2001-C in the aggregate principal
amount of $1,000,000,000. For further information, refer to the Prospectus
Supplements dated March 7, 2001 and August 22, 2001.
PART II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Trust was formed pursuant to a trust agreement between Wholesale Auto
Receivables Corporation (the "Seller") and Chase Manhattan Bank USA, National
Association, as Owner Trustee for the Trust. The Trust acquired certain eligible
wholesale finance receivables from the Seller in the aggregate amount as shown
below in exchange for Floating Rate Asset Backed Notes and Floating Rate Asset
Backed Certificates representing undivided interests in the Trust. The Trust's
property includes a pool of wholesale receivables generated in a portfolio of
revolving financing arrangements with dealers to finance inventories of new and
used automobiles and light trucks and collections thereon, basis swaps and
certain other property.
Date of Initial
Trust Wholesale
Sale and Finance
Servicing Sale Asset-Backed Asset-Backed
Trust Agreement Amount Notes Certificates
------------ ------------------ ----------------- -------------------------- ---------------
(millions) (millions) (millions)
Superior March 15, 2001 $ 2,875.0 Term Notes $ 2,000.0 $ 125.0
Wholesale 2001-A
Inventory
Financing Term Notes $ 750.0
Trust VII 2001-B
August 24, 2001 $ 1,000.0 Revolving $ 1,000.0
Note 1
August 29, 2001 $ 1,000.0 Term Notes $ 1,000.0
2001-C
General Motors Acceptance Corporation ("GMAC"), the originator of the wholesale
receivables, continues to service the receivables for the Trust and receives
compensation and fees for such services. Investors receive monthly payments of
interest for each type of note and certificate based on a floating interest
rate.
II-1
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
CROSS REFERENCE SHEET
Exhibit No. Caption Page
- ----------- -------------------------------------------------------------- ------
-- Superior Wholesale Inventory Financing Trust VII,
Independent Auditors' Report, Financial Statements and II-3
Selected Quarterly Data for the period March 15, 2001
(inception) through December 31, 2001.
11-2
INDEPENDENT AUDITORS' REPORT
The Superior Wholesale Inventory Financing Trust VII, its Certificateholders,
Wholesale Auto Receivables Corporation, and Chase Manhattan Bank USA, National
Association, Owner Trustee:
We have audited the accompanying Statement of Assets, Liabilities and Equity of
the Superior Wholesale Inventory Financing Trust VII as of December 31, 2001,
and the related Statement of Distributable Income for the period March 15, 2001
(date of inception) to December 31, 2001. 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 auditing standards generally accepted
in the United States of America. 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 to the financial statements, these financial statements
were prepared on the basis of cash receipts and disbursements, which is a
comprehensive basis of accounting other than accounting principles generally
accepted in the United States of America.
In our opinion, such financial statements present fairly, in all material
respects, the assets, liabilities and equity arising from cash transactions of
the Superior Wholesale Inventory Financing Trust VII at December 31, 2001, and
its distributable income and distributions for the period March 15, 2001 (date
of inception) to December 31, 2001, on the basis of accounting described in Note
1.
s\ DELOITTE & TOUCHE LLP
- ------------------------
DELOITTE & TOUCHE LLP
Detroit, Michigan
Date: March 11, 2002
II-3
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST VII
STATEMENT OF ASSETS, LIABILITIES AND EQUITY
December 31, 2001
------------------------
(in millions of dollars)
ASSETS
Receivables (Note 2).................................. $ 3,869.4
-----------
TOTAL ASSETS.......................................... $ 3,869.4
===========
LIABILITIES AND EQUITY (NOTES 2 AND 3)
Asset-Backed Term Notes............................... $ 3,000.0
Asset-Backed Revolving Note........................... 744.4
Asset-Backed Certificates (Equity).................... $ 125.0
-----------
TOTAL LIABILITIES AND EQUITY.......................... $ 3,869.4
===========
Reference should be made to the Notes to Financial Statements.
II-4
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST VII
STATEMENT OF DISTRIBUTABLE INCOME
Year Ended
December 31, 2001*
-----------------------
(in millions of dollars)
Distributable Income
Allocable to Principal................. $ 864.6
Allocable to Interest.................. 86.3
-----------
Distributable Income...................... $ 950.9
===========
Income Distributed $ 950.9
===========
* Represents the period March 15, 2001(inception) through December 31, 2001.
Reference should be made to the Notes to Financial Statements.
II-5
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST VII
NOTES TO FINANCIAL STATEMENTS
NOTE 1. BASIS OF ACCOUNTING
The financial statements of Superior Wholesale Inventory Financing Trust VII
(the "Trust") are prepared on the basis of cash receipts and cash disbursements.
Such financial statements differ from financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America in that interest income and the related assets are recognized when
received rather than when earned and distributions to Noteholders and
Certificateholders are recognized when paid rather than when the respective
obligation is incurred. Certain expenses of the Trust are paid by Wholesale Auto
Receivables Corporation (the "Seller").
The Trust uses basis swaps to alter its interest rate exposure. The swaps are
executed as an integral element of a specific investment transaction. As the
Trust's financial statements are prepared on the basis of cash receipts and cash
disbursements, the impact of the basis swaps are reflected in the cash flows
shown in the Statement of Distributable Income.
NOTE 2. SALE OF NOTES AND CERTIFICATES
On March 15, 2001, the Trust acquired the Seller's right, title and interest in
wholesale finance receivables totaling $2,875.0 million in exchange for Asset
Backed Notes representing indebtedness of the Trust and Asset Backed
Certificates representing equity interests in the Trust. The Asset Backed Notes
include $2,000.0 million Floating Rate Asset Backed Term Notes, Series 2001-A,
and $750.0 million Floating Rate Asset Backed Term Notes, Series 2001-B. The
Floating Rate Asset Backed Certificates totaled $125.0 million. On August 24,
2001, the Trust acquired the Seller's right, title and interest in wholesale
finance receivables in exchange for an Asset Backed Revolving Note, Series
2001-RN1, with a specified maximum revolver balance of $1,000.0 million,
representing indebtedness of the Trust. On August 29, 2001, the Trust acquired
the Seller's right, title and interest in wholesale finance receivables totaling
$1,000.0 million in exchange for Floating Rate Asset Backed Term Notes, Series
2001-C, representing indebtedness of the Trust. The Trust property includes
certain eligible receivables in accounts included in a pool of accounts, certain
receivables generated under each such accounts from time to time secured by new
and used automobiles and light trucks, certain monies due or received
thereunder, basis swaps and certain other property.
NOTE 3. PRINCIPAL AND INTEREST PAYMENTS
In the ordinary course of business, no principal payments will be made on the
Floating Rate Asset Backed Term Notes, Series 2001-A, the Floating Rate Asset
Backed Term Notes, Series 2001-B, the Floating Rate Asset Backed Term Notes,
Series 2001-C, and the Floating Rate Asset Backed Certificates, Class 2001-A
until the Targeted Final Distribution Date for each series. During the Revolving
Period, the Trust will make payments of principal on, or additional borrowings
(up to the specified maximum revolver balance) under, the Floating Rate Asset
Backed Revolving Note, Series 2001-RN1, on a daily basis.
II-6
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST VII
NOTES TO FINANCIAL STATEMENTS
NOTE 3. PRINCIPAL AND INTEREST PAYMENTS (continued)
The Targeted Final Distribution Date for the Floating Rate Asset Backed Term
Notes, Series 2001-A, the Floating Rate Asset Backed Term Notes, Series 2001-B,
the Floating Rate Asset Backed Term Notes, Series 2001-C, the Floating Rate
Asset Backed Revolving Note, Series 2001-RN1, and the Floating Rate Asset Backed
Certificates, Class 2001-A are as follows, respectively: March 2004, June 2001,
June 2004, July 2002, and June 2004.
Payments of interest on the Floating Rate Asset Backed Term Notes, Series
2001-A, the Floating Rate Asset Backed Term Notes, Series 2001-B, the Floating
Rate Asset Backed Term Notes, Series 2001-C, the Floating Rate Asset Backed
Revolving Note, Series 2001-RN1, and the Floating Rate Asset Backed
Certificates, Class 2001-A, are made on the fifteenth day of each month or, if
any such day is not a Business Day, on the next succeeding Business Day, (each,
a "Monthly Distribution Date"), commencing April 16, 2001 (the "Initial
Distribution Date").
The Floating Rate Asset Backed Term Notes, Series 2001-A interest rate equals
the USD One-Month London Interbank Offer Rate ("LIBOR") plus 9 basis points per
annum for each Monthly Distribution Date. Interest on the Term Notes will accrue
from, and including, the most recent Monthly Distribution Date to, but
excluding, the current Monthly Distribution Date. The Series 2001-A Term
Noteholders received interest at a weighted average rate of 3.84% per annum from
March 15, 2001 through December 16, 2001.
The Floating Rate Asset Backed Term Notes, Series 2001-B interest rate equals
the USD One-Month LIBOR plus 5 basis points per annum for each Monthly
Distribution Date. Interest on the Term Notes will accrue from, and including,
the most recent Monthly Distribution Date to, but excluding, the current Monthly
Distribution Date. The Series 2001-B Term Noteholders received interest at a
weighted average rate of 4.82% per annum from March 15, 2001 through June 14,
2001. On June 15, 2001, the Trust repaid the principal on the Floating Rate
Asset Backed Term Notes, Series 2001-B, through the accumulation of principal
collections from May 1, 2001 through June 15,2001.
The Floating Rate Asset Backed Term Notes, Series 2001-C interest rate equals
the USD One-Month LIBOR plus 8 basis points per annum for each Monthly
Distribution Date. Interest on the Term Notes will accrue from, and including,
the most recent Monthly Distribution Date to, but excluding, the current Monthly
Distribution Date. The Series 2001-C Term Noteholders received interest at a
weighted average rate of 2.90% per annum from August 29, 2001 through December
16, 2001.
The Floating Rate Asset Backed Revolving Note, Series 2001-RN1 interest rate
equals the USD One-Month LIBOR plus 20 basis points per annum for each Monthly
Distribution Date. Interest on the Revolving Note will accrue for the Collection
Period (calendar month) immediately preceding each Monthly Distribution Date.
The Series 2001-RN1 Revolving Noteholder received interest at a weighted average
rate of 3.28% per annum from August 24, 2001 through November 30, 2001.
II-7
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST VII
NOTES TO FINANCIAL STATEMENTS
NOTE 3. PRINCIPAL AND INTEREST PAYMENTS (concluded)
The Floating Rate Asset Backed Certificates, Class 2001-A interest rate equals
the USD One-Month LIBOR plus 40 basis points per annum for each Monthly
Distribution Date. Interest on the Certificates will accrue from, and including,
the most recent Monthly Distribution Date to, but excluding, the current Monthly
Distribution Date. The Certificateholders received interest at a weighed average
rate of 4.15% per annum from March 15, 2001 through December 16, 2001.
NOTE 4. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Trust is a party to interest rate basis swap contracts. The interest rate
basis swaps, which relate to the Floating Rate Asset Backed Term Notes, Series
2001-A; Floating Rate Asset Backed Term Notes, Series 2001-B; Floating Rate
Asset Backed Term Notes, Series 2001-C; Floating Rate Asset Backed Certificates,
Class 2001-A; and Floating Rate Asset Backed Revolving Note, Series 2001-RN1,
are contractual agreements between the Trust and GMAC to exchange floating
interest rate payments (i.e. the Trust pays Prime and receives LIBOR plus 277.0
basis points, 300.0 basis points, 277.5 basis points, 277.0 basis points, and
277.5 basis points, respectively).
In addition, the interest rate basis swaps will terminate at the time the
respective outstanding principal balance of the Floating Rate Asset Backed Term
Notes, the Floating Rate Asset Backed Revolving Note or the Asset Backed
Certificates has been paid in full. In the event that General Motors Acceptance
Corporation ("GMAC") gives notice that it has elected not to extend the
revolving period of the sale transaction, the notional amount of the interest
rate basis swaps would amortize at the same rate as the outstanding balance of
the related debt and equity obligations.
Market risk is mitigated because the derivatives are used to hedge a portfolio
of underlying debt and equity obligations. Credit risk of the instruments is
limited to payments due from GMAC. The interest rate basis swaps had a positive
fair value of $1.3 million at December 31, 2001.
The notional amount of the interest rate basis swaps approximates the
outstanding balance in the Floating Rate Asset Backed Notes and Asset Backed
Certificates.
NOTE 5. FEDERAL INCOME TAX
The Trust is classified as a partnership, and therefore is not taxable as a
corporation for U.S. federal income tax purposes. Each Noteholder, by acceptance
of a Note agrees to treat the Note as indebtedness in the Trust for federal,
state and local income and franchise tax purposes. Each certificateholder by
acceptance of a certificate agrees to treat the certificates as equity interests
in the Trust for federal, state and local income and franchise tax purposes. A
portion of the certificates was issued to the Seller on the Closing Date.
II-8
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST VII
SUPPLEMENTARY FINANCIAL DATA (unaudited)
SUMMARY OF QUARTERLY DISTRIBUTABLE INCOME
2001 Quarters* Interest
------------------------------------------ -----------------------
(in millions of dollars)
First quarter............................. $ 0.0
Second quarter............................ 35.7
Third quarter............................. 24.2
Fourth quarter............................ 26.4
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Total............................ $ 86.3
========
* Represents the period March 15, 2001 (inception) through December 31, 2001.
II-9
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) (1) FINANCIAL STATEMENTS.
Included in Part II, Item 8, of Form 10-K.
(a) (2) FINANCIAL STATEMENT SCHEDULES.
All schedules have been omitted because they are not
applicable or because the information called for is shown in
the financial statements or notes thereto.
(a) (3) EXHIBITS (Included in Part II of this report).
-- Superior Wholesale Inventory Financing Trust VII Financial
Statements for the period March 15, 2001 (inception) through
December 31, 2001.
(b) REPORTS ON FORM 8-K.
No current reports on Form 8-K have been filed by the
abovementioned Trust during the quarter ended December 31,
2001.
ITEMS 2, 3, 4, 5, 6, 9, 10, 11, 12 and 13 are not applicable and have been
omitted.
IV-1
SIGNATURE
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Owner Trustee has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
SUPERIOR WHOLESALE INVENTORY FINANCING TRUST VII
by: Chase Manhattan Bank USA, National Association
----------------------------------------------
(Owner Trustee, not in its individual
capacity but solely as Owner Trustee
on behalf of the Issuer.)
s\ DENIS KELLY
--------------------------
Denis Kelly
Assistant Vice President
Date: March 27, 2002
--------------