CNH Capital Australia Receivables Trust Series 3
November 2004CNH Capital AustraliaReceivables Trust Series 3A [346.3] millionAgricultural & Construction EquipmentReceivables Backed Securities Class A Notes A [295,000,000] (AAA / Aaa) Class B Notes A [28,400,000] (BBB / A3)Prepared by:Citigroup Global Markets Australia Pty LimitedLead Manager
Investor GuideCNH Capital Australia Receivables Trust Series 3DisclaimerBy receiving this Investor Guide, you represent and warrant that you are a “wholesaleclient” as defined in section 761G or “sophisticated investor” or “professional investor” asdefined in section 708 of the Corporations Act 2001 or you are otherwise qualified toreceive this information in your jurisdiction.This Investor Guide has been prepared for your information purposes only on aconfidential basis, is considered proprietary information and may not in any way becopied, shown or distributed to any other person. In particular, it must not be distributedto the US or any US Person outside the US.This Investor Guide has been prepared based on information contained in thepreliminary information memorandum prepared by CNH Capital Australia Pty Limited(the “Trust Manager”) in relation to the CNH Capital Australia Receivables Trust Series3 (the “Trust”), dated 26 October, 2004 (the “Information Memorandum”), as well asother information provided by the Trust Manager.The Class A and Class B Notes (together, the “Notes”) proposed to be issued by theTrust are debt securities secured by the assets of the Trust and do not representobligations of or interests in, and are not guaranteed by any other person, including CNHCapital Australia Limited.This Investor Guide does not constitute an offer to buy or sell or a solicitation of an offerto buy or sell the Notes or any other securities and nothing in this Investor Guide shallform the basis of any contract or commitment whatsoever. Any such offer of the Notes iscontained would only be made pursuant to the Information Memorandum.This Investor Guide may contain structural and collateral information with respect to theTrust. The information contained in this Investor Guide addresses only certain limitedaspects of the Notes and the Trust, and does not purport to provide a completeassessment thereof. The information contained herein therefore may not reflect theimpact of all structural characteristics of the Notes or any changes made to the Notesafter the date hereof.Although the information contained in this Investor Guide has been obtained fromsources believed to be reliable, we make no representation or warranty as to andaccept no responsibility for the accuracy or completeness of the information. Weare not acting as your agent or advisor.Prospective investors should not rely on any information other than thatcontained in the Information Memorandum, and the transaction documentsreferred to in it, and should obtain independent advice from appropriatelyqualified advisors before making any investment decision.Page ii
Investor GuideCNH Capital Australia Receivables Trust Series 3ContentsExecutive Summary . 1CNH Capital Australia Receivables Trust Series 3 – Issue Summary. 2Parties. 2important dates . 2Tranching DEtails . 3Summary of the Notes . 3Credit Support. 4Liquidity Support . 4Other Structural Features . 5Structural Diagram . 6Repayment Analysis . 7Expected Repayment Profile (17% Terminal cpr). 7Anticipated Note Paydown Profile. 8CNHC’s Equipment Finance Business. 9Background to CNH Capital Australia pty limited. 9Origination of equipment receivables . 9Underwriting of Equipment receivables . 9Servicing of the equipment receivable portfolio . 10ARrears Management. 11CNHCART3 - arrears history by Balance Outstanding . 11Repossession Procecedures . 12Treatment of Charge-offs. 12CNHCART3 - Loss ANALYsis . 14The Equipment Receivables . 15General . 15Key Eligibility criteria . 15Seller’s Representations and Warranties . 17Interest Rate Hedging . 18Collateral Summary . 19Pool Summary (as at 30 September 2004). 19Lead Manager Contact Details. 23Page iii
Investor GuideCNH Capital Australia Receivables Trust Series 3Executive Summary The CNH Capital Australia Receivables Trust No.3 (“CNHCART3”) is the thirdsecuritisation of agricultural and construction equipment finance receivables by CNHCapital Australia Pty Limited (“CNHC”). The indicative collateral pool for CNHCART3 consists of hire purchase agreements,finance leases and goods mortgages secured by agricultural and constructionequipment originated by CNHC in the ordinary course of business. The characteristics of the indicative collateral pool securing CNHCART3 (summarisedin this Guide) are broadly similar to those of the collateral pool securing CNHCART2,although the level of hardship refinances has decreased from 18.57% to 1.97%. The Notes will comprise a single A [295.0] million senior Class A tranche, expectedto be rated ‘AAA’ by Standard & Poor’s (“S&P”) and ‘Aaa’ by Moody’s InvestorsService (“Moody’s”), supported by a A [28.4] million subordinate Class B tranche,expected to be rated ‘BBB’ by S&P and ‘A3’ by Moody’s, which is in turn supported bya A [22.9] million unrated Seller Note. It is intended that the transaction may be upsized to approximately A 400.0 million.TrancheExpected RatingsSizeExpected WALClass AClass BSeller NoteCPR Sensitivity*AAA / AaaBBB / A3Unrated9%A [295.0] millionA [28.4] millionA [22.9] million17%1.49 yrs3.70 yrs3.75 yrs23%1.72 yrs4.00 yrs1.49 yrs3.70 yrs1.34 yrs3.64 yrsClass AClass B*See discussion regarding prepayment assumptions in the section on Repayment Analysis. The primary form of credit enhancement for the Senior and Subordinate classes ofNotes is the 6.61% over collateralisation provided by way of a Seller Note retained byCNHC. Note holders will also have the benefit of excess spread, which will be applied to meetany current period or unreimbursed principal charge-offs. The Class A Note holders will also have the benefit of a further 8.20% subordinationprovided by the Class B Notes. Liquidity enhancement will primarily be provided by a A 12.85 million externallyfunded Cash Reserve Account, in addition to which Principal Draws will be availableto meet any remaining Payment Shortfall after the balance of the Cash ReserveAccount have been applied. Any such drawings on principal or the Cash ReserveAccount will be repaid from future Excess Spread.EXPECTED KEY DATES Announcement: Pricing:26 October 200410 November 2004 Settlement: 1st Distribution:15 November 200415 February 2005Page 1
Investor GuideCNH Capital Australia Receivables Trust Series 3CNH Capital Australia Receivables TrustSeries 3 – Issue SummaryPARTIESIssuerPerpetual Trustee Company Limited as Trustee of the CNHCapital Australia Receivables Trust Series 3TrusteePerpetual Trustee Company Limited (ABN 42 000 001 007)Trust ManagerCNH Capital Australia Pty Limited (ABN 71 069 132 396)Security TrusteePT Limited (ABN 67 004 454 666)SellerCNH Capital Australia Pty Limited (ABN 71 069 132 396)ServicerCNH Capital Australia Pty Limited (ABN 71 069 132 396)Swap ProviderCNH Capital Australia Pty Limited (ABN 71 069 132 396)Back Up Swap ProviderCitibank N.A., Sydney Branch (ABN 34 072 815 058)IMPORTANT DATESStatistical Pool Cut-offDateThursday, 30 September 2004Final Pool Cut-off DateMonday, 1 November 2004Expected AnnouncementDateTuesday, 26 October 2004Expected Pricing DateWednesday, 10 November 2004Expected Closing DateMonday, 15 November 2004First Distribution DateTuesday, 15 February 2005Subsequent DistributionDates15th day of each May, August, November and February, or ifthat day is not a Business Day, then the following BusinessDay (subject to the Modified Following Business DayConvention as defined in the 2000 ISDA Definitions).Business DayA weekday on which banks are open for business inSydney.Page 2
Investor GuideCNH Capital Australia Receivables Trust Series 3TRANCHING DETAILSTrancheExpected Ratings(S&P / Moody’s)2SizeWeighted AverageLife3Class AAAA / AaaA [295.0] million1.49 yrsBBB / A3A [28.4] million3.70 yrsUnratedA [22.9] million3.75 yrsClass BSeller Note42The assignment of the expected ratings by the respective rating agencies is a condition precedentto the issue of the Notes.3Please see discussion of prepayment assumptions in the section of this Guide headedRepayment Analysis.4The Seller Note will not be offered for sale.SUMMARY OF THE NOTESExpected Issue DateMonday, 15 November 2004Expected Maturity Date5Class A Notes – 15 May 2008Class B Notes – 15 August 2008Legal Final Maturity Date15 May 2012Issue PriceParClean up CallOn any distribution date on which the aggregate outstandingprincipal balance of the underlying portfolio of equipmentreceivables is less than 10% of the original balance on thecut-off date.Coupon TypeFloating RateCoupon Benchmark3 month BBSWCoupon FrequencyQuarterly, on the 15th day of each February, May, Augustand November, or if that days is not a Business Day, thenthe following business day.5Please see the discussion of prepayment assumptions in the section of this Guide headedRepayment Analysis.Page 3
Investor GuideCNH Capital Australia Receivables Trust Series 3SUMMARY OF THE NOTES (CONTINUED)Principal Repayments(pre event of default)Principal collections will be allocated first to meet anyIncome Shortfall, then to the note holders in the followingorder of priority: To the Class A Notes, until the Invested Amount ofthe Class A Notes is reduced to zero. To the Class B Notes until the Invested Amount ofthe Class B Notes is reduced to zero. To the Seller Note, until the Invested amount of theSeller Note is reduced to zero.CREDIT SUPPORTExcess Cash FlowAny losses on the underlying Equipment Receivables willresult in a Charge-off. Excess cash flow is available to meetthese Charge-offs in the period in which they arise, and toreimburse any Unreimbursed Principal Charge-offs insubsequent periods.Over collateralisationThe rated Notes issued by CNHCART3 will receive creditsupport from the 6.61% over collateralisation provided byway of a Seller Note retained by CNHC. The Seller Note willrank behind all classes of rated Notes with respect to priorityof principal repayments, both before and after an event ofdefault, and all charge-offs will be allocated to the SellerNote until the Stated Amount of the Seller Note is reducedto zero. Any amounts charged off to the Seller Note will onlybe reinstated once all amounts charged off to the ratedNotes have also been reinstated.SubordinationIn respect of the Class A Notes only, the subordination ofthe Class B Notes will provide an additional level of creditsupport. The initial level of additional subordination will be8.20%, resulting in total subordination of 14.81% includingthe Seller Note. It is, however, anticipated that this level willincrease rapidly over the life of the transaction as principalcollections are allocated towards the Class A Notes inpreference to the Class B Notes and the Seller Note.LIQUIDITY SUPPORTCash Reserve AccountAt the start of the transaction, the Manager will depositA 12.85 million from the proceeds of issuing the notes toPage 4
Investor GuideCNH Capital Australia Receivables Trust Series 3the credit of the Cash Reserve Account.In the event that the aggregate of the Required Paymentsfor a Collection Period exceeds the Available Income forthat period (an “Income Shortfall”), the balance standing tothe credit of the Cash Reserve Account will available tomeet that Income Shortfall.Any drawings from the Cash Reserve Account will be repaidin subsequent periods from future Available Income.The required balance of the Cash Reserve Account may bedecreased from time to time, subject to confirmation fromboth S&P and Moody’s that this decrease will not lead to adowngrade in the ratings assigned to the Notes.Principal Liquidity DrawsIn the event that the amount of an Income Shortfall for anyperiod exceeds the balance standing to the credit of theCash Reserve Account at that time (a “Payment Shortfall”)Principal Collections for that period will be available to meetthe Payment Shortfall.Any Principal Draws will be reimbursed in subsequentperiods out of Available Income.OTHER STRUCTURAL FEATURESTitle Perfection ReserveCNHCART3 will also include a A 8.2 million Title PerfectionReserve Account, the balance of which will be available topay all costs and expenses in relation to the perfection ofthe Trustee’s legal title to the Purchased Receivables andrelated Receivable Rights following the occurrence of a TitlePerfection Event. The balance of this account will reduce asthe portfolio of receivables amortises.Interest Rate Swap /Back-up SwapCNHC will provide an interest rate swap to the trust,swapping the fixed rate interest payments received on theunderlying equipment receivables for 3m BBSW. CitibankN.A., Sydney Branch will enter into a back up swaparrangement, under which the interest rate swaps willnovate to Citibank in the event that CNH defaults on itsobligations under the interest rate swap.Page 5
Investor GuideCNH Capital Australia Receivables Trust Series 3Structural DiagramA ABS InvestorsClass A NotesAAA / AaaA 295.0 millionClass B NotesBBB / A3A 28.4 millionCNHCManager andCustodianCNHCInterest RateSwap ProviderCNHCPerpetual TrusteeCompany Limitedas trustee for theFixedFloatingCNH CapitalAustraliaReceivables TrustSeries 3Seller NotesUnratedA 22.9 millionPT LimitedSecurityTrusteeAAR CorporateAdvisoryResidual CapitalUnit HolderCNHCResidual IncomeUnit HolderCitibank N.A.Back Up SwapProviderCNHCSeller andServicerPerpetual TrusteeCompany LimtiedBack Up ServicerDiverse Pool ofObligorsPage 6
Investor GuideCNH Capital Australia Receivables Trust Series 3Repayment AnalysisThe repayment analysis contained in this section is based on information provided bythe Manager, and modelling undertaken by Citigroup. The repayment model forCNHCART3 is based on an assumed CPR of 17% over the life of the underlyingreceivables.The repayment analysis below is based on the exercise of the 15% cleanup call. Themodelling undertaken by Citigroup does not take into account the impact of futurehardship refinances, which may impact the actual CPR, as they would be treated as fullprepayments from the perspective of CNHCART3.EXPECTED REPAYMENT PROFILE (17% TERMINAL CPR) 400.00Principal Outstanding (A MM) 350.00 300.00 250.00Class AClass B 200.00Seller 150.00 100.00 50.00Nov-04Feb- 05May -05Aug- 05Nov-05Feb- 06May -06Aug- 06Nov-06Feb- 07May -07Aug- 07Nov-07Feb- 08May -08Aug- 08 -DateCPR SENSITIVITY ANALYSISAssumed CPRClass AClass BAssumed CPRClass AClass B9%11%13%15%1.72 yrs1.66 yrs1.60 yrs1.55 yrs4.00 yrs3.97 yrs3.75 yrs3.72 yrs17%19%21%23%1.49 yrs1.44 yrs1.39 yrs1.34 yrs3.70 yrs3.68 yrs3.66 yrs3.64 yrsPage 7
Investor GuideCNH Capital Australia Receivables Trust Series 3Repayment Analysis(continued)ANTICIPATED NOTE PAYDOWN PROFILEThe following table sets out the possible Note paydown profile based the prepaymentassumptions discussed on the previous page, calculated using the outer limits for theCPR sensitivities described on the previous -0815-Nov-08CPR 9%Class AClass BCPR 17%Class A Class BCPR 23%Class A Class 50.0000000.000000Page 8
Investor GuideCNH Capital Australia Receivables Trust Series 3CNHC’s Equipment Finance BusinessBACKGROUND TO CNH CAPITAL AUSTRALIA PTY LIMITEDCNH Capital Pty Limited (“CNHC”) is a wholly owned subsidiary of CNH Australia PtyLimited (“CNHA”), which is in turn a wholly owned subsidiary of CNH Global N.V. (“CNHGlobal”). CNH Global is a corporation organised under the laws of the Kingdom of theNetherlands, formed on 12 November 1999 in connection with New Holland N.V.’sacquisition of Case Corporation Pty Ltd.CNH Global believes that it is one of the largest manufacturers of agricultural equipmentin the world based on units sold, one of the largest manufacturers of constructionequipment in the world based on units sold and has one of the industry’s largestequipment finance operations. CNH Global organises its operations into three businesssegments: agricultural equipment, construction equipment and financial services. CNHCis the financial services arm of CNH Global’s operations in Australia.CNHC principally finances both agricultural and construction equipment manufacturedby CNH Global and sold throughout the dealer network, under the Case IH, New Hollandor Case brands. CNHC’s operations in Australia run under two brand names being CaseCredit and New Holland Credit.CNHC was incorporated in May 1995 as Case Credit Australia Pty Limited when it tookover control of an existing retail loan portfolio from Case Corporation. The activities of aret
CNH Capital Australia Receivables Trust Series 3 A [346.3] million . Investor Guide CNH Capital Australia Receivables Trust Series 3 Page 2 CNH Capital Australia Receivables Trust Series 3 – Issue Summary . Back Up Swap Provider Citibank N.A., Sydney Branch (ABN 34 072 815 058) IMPORTANT DATES Statistical Pool Cut-off
Canada mail original to CNH Industrial Capital America LLC, Attn: WLL Agreement, 4475 North Service Rd, Suite 301, Burlington, ON L7L4X7 Canada Case is a registered are trademark in the United States and many other countries, owned by or licensed to CNH Industrial N.V., its subsidiaries or affiliates
receivables, while not the first asset class to be securitised, date back approximately 30 years. Trade receivables securitisations allow companies to raise capital by selling, on a revolving basis, a selection of receivables to a legally separate, bankruptcy-remote special purpose entity (SPE).
Sale of Receivables to a Factor A factor is a finance company or bank. o Buys receivables from businesses and then collects the payments directly from the customers. o Typically charges a commission to the company that is selling the receivables. o Fee ranges from 1% to 3% of the receivables purchased.
regularly selling receivables (via selling receivables into the factoring agreement on a regular basis, even if the exact extent and the specific receivables impacted cannot be identified at inception). Therefore, the whole portfolio of trade receivables should be classified as 'hold to collect and sell'. 2. FVPL.
CNH Industrial Capital is a trademark in the United States and many other countries, owned by or licensed to CNH Industrial N.V., its subsidiaries or affiliates. www.caseih.com *For commercial use only. Customer participation subject to credit qualification and approval by CNH Industrial Capital Canada Ltd.
10.00% TD Capital Trust IV Notes-Series 2 Due June 30, 2108 (TD CaTS IV - Series 2) _ TD Capital Trust IVTM (the "Trust") is a trust established under the laws of Ontario pursuant to a declaration of trust dated as of January 7, 2009, as amended and restated from time to time (the "Declaration of Trust"). .
Charitable Gi t Annuity LEAD TRUST PAYOUTS A lead trust makes payments to charity in one of two ways: Lead Annuity Trust With a lead annuity trust, the trust pays a fixed amount each year regardless of the current value of the trust. There is a potential for growth in the trust because the annuity is fixed and the trust principal can compound.
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