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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, 1999.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from to .
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Commission file numbers 333-79773
333-79773-01
333-79773-02
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ADVANTA BUSINESS SERVICES CORP.
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(Exact Name of Registrant as specified in its charter)
DELAWARE 23-2333786
- --------------------------------- -------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
1020 Laurel Oak Road, Voorhees, New Jersey 08043
- ------------------------------------------ ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone numbers, including area code:
(856) 782-7300
ADVANTA LEASING RECEIVABLES CORP. VIII
ADVANTA LEASING RECEIVABLES CORP. IX
(Exact Name of Registrants as specified in their charter)
52-2170910
NEVADA -------------------
52-2170234
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(State or Other Jurisdiction (I.R.S. Employer
of Incorporation) Identification Nos.)
639 Isbell Road, Suite 390, Reno, Nevada 89509
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(Address of Principal Executive Offices) (Zip Code)
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Registrants' telephone number, including area code: (800) 851-5215
Securities Registered Pursuant to Section 12(b) of the Securities Exchange Act
of 1934: None.
Securities Registered Pursuant to Section 12(g) of the Securities Exchange Act
of 1934: None
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
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Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K 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 the Registrants. None. With respect to
the Notes referred to herein, as of February 28, 2000, $72,134,478.00. As of
May 13, 1999 there were 1,000 shares of each of the Registrants' Common Stock
outstanding.
Documents Incorporated By Reference: Part IV
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PART I
ITEM 1. BUSINESS
Advanta Business Services Corp. ("ABS") is a wholly-owned subsidiary of Advanta
Leasing Holding Corp., a Delaware corporation ("ALHC"). ALHC is a wholly-owned
subsidiary of Advanta Corp., a Delaware corporation, ("Advanta Corp.") which is
a publicly-traded company based in Spring House, PA. ABS is in the business of
originating, acquiring and serving certain leases (the "Leases") and interests
in the equipment underlying the leases (the "Equipment"). Advanta Leasing
Receivables Corp. IX ("ALRC IX") and Advanta Leasing Receivables Corp. VIII
("ALRC VIII," together with ALRC IX, the "Issuers") are wholly-owned
subsidiaries of ABS and were formed for the purpose of securitizing the Leases
and the Equipment through the issuance of debt securities (the "Notes"). The
Issuers acquired their rights to the Leases and Equipment either from ABS
directly, pursuant to the Master Contribution Agreement, dated as of August 26,
1999 or pursuant to one or more sale agreements in each case between the Issuers
and one or more affiliates of ABS. On August 26, 1999, the Issuers issued notes
entitled Equipment Receivables Asset-Backed Notes, Series 1999-1 totalling
$98,876,115 principal amount of notes consisting of: the Class A-1 Notes, the
Class A-2 Notes, and Class A-3 Notes, (collectively, the "Offered Notes"). The
assets of the Issuers consist primarily of Leases, Equipment and a reserve
account. The Notes were issued pursuant to the Master Business Receivables Asset
Backed Financing Facility Agreement (the "Indenture"), dated as of August 26,
1999, by and among ABS, as servicer, Bankers Trust Company as trustee. The
Offered Notes were sold pursuant to a public offering, the underwriting of which
was sole managed by Fort Union Capital Market Corp., (the "Underwriters"). The
Notes represent asset-backed debt obligations of the Issuers, as joint and
several obligors. The Notes were registered under a Registration Statement
(file no.333-79773) on Form S-1 declared effective on or about August 12, 1999.
As bankruptcy-remote entities, the Issuers' operations are restricted so that
(a) they do not engage in business with, or incur liabilities to, any other
entity (other than the Trustee on behalf of the holders of the Notes) which may
bring bankruptcy proceedings against the Issuers and (b) the risk is diminished
that they will be consolidated into the bankruptcy proceedings of any other
entity. The Issuers have no other assets except the Leases and the Equipment,
and proceeds thereof.
ITEM 2. PROPERTIES
None.
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ITEM 3. LEGAL PROCEEDINGS
The Issuers are not aware of any material pending legal proceedings
involving the Issuers, the Trustee or the Servicer with respect to the Notes or
the Issuers' property. However, ABS and the Issuers are indirect subsidiaries of
Advanta Corp.
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 ABS's or the Issuers'
obligations to repurchase mortgage loans which are inconsistent with
representations and warranties set forth in certain agreements relating to Notes
issued by the Trust sponsored by ABS as well as the obligations of the ABS as
servicer pursuant to certain agreements relating to Notes issued by the Trust.
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 of the Issuers or the Notes through the solicitation of proxies or
otherwise.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
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The sole holder of ABS's Common Stock is ALHC. The sole holder of the
Issuers' Common Stock is ABS. There is currently no market for such Common Stock
nor is it anticipated that such a market will develop.
As of February 17, 2000, there were approximately 2 holders of the
Class A-1 Notes, 9 holders of the Class A-2 Notes, and 2 holders of the Class
A-3 Notes. The number of holders includes individual participants in security
position listings. As of December 15, 1999, 4 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
On August 26, 1999, the Issuers issued $50,929,490 aggregate principal
amount of Class A-1 Notes having a fixed rate per annum of 5.76664%, $38,500,927
aggregate principal amount of Class A-2 Notes having a fixed rate per annum of
6.64%, and $9,445,708 aggregate principal amount of Class A-3 Notes having a
fixed rate per annum of 6.90%, which were collateralized by the Leases,
Equipment and the reserve account. The sale of the Leases and Equipment to the
Issuers, the issuance of the Notes and the simultaneous delivery of the Notes to
the Underwriters, has been accounted for as a sale. The value of the Notes
issued by the Issuers equaled the value of the assets pledged as collateral for
the Notes. Accordingly, there was no income to the Issuers resulting from the
aforementioned transaction.
CAPITAL RESOURCES AND LIQUIDITY
The Issuers' primary sources of funds with respect to the Notes will be
the receipt of interest on and principal with respect to the Leases and
Equipment. The management of ABS believes that the Issuers will have sufficient
liquidity and capital resources to pay all amounts on the Notes as they become
due and all other anticipated expenses of the Issuers. The Issuers do not have,
nor will they have in the future, any significant sources of capital for payment
of the Notes and its operating expenses other than the receipt of
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interest on and principal on the Leases and Equipment. The Notes represent
asset-backed debt obligations solely of the Issuers.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
Not Applicable.
ITEM 9. CHANGE IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There were no changes of accountants or disagreements on according or
financial disclosures between the Issuers and its accountants.
PART III
ITEM 10. DIRECTORS AND OFFICERS OF THE REGISTRANT
The following individuals comprise the board of directors and the
officers of the Advanta Business Services Corp.:
Name Position
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Dennis Alter Director
Phillip Broure Director
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The following individuals comprise the board of directors and the
officers of Advanta Leasing Receivables Corp. VIII:
Name Position
- ---- --------
George Deehan Director
Francis B. Jacobs, II Director
John Paris President and Director
Michael Coco Vice President, Chief Financial Officer and Director
Mark Shapiro Treasurer
Janice C. George Vice President, Assistant Secretary and Director
Cole B. Silver Secretary
The following individuals comprise the board of directors and the
officers of Advanta Leasing Receivables Corp. IX:
Name Position
- ---- --------
George Deehan Director
Francis B. Jacobs, II Director
John Paris President and Director
Michael Coco Vice President, Chief Financial Officer and Director
Mark Shapiro Treasurer
Janice C. George Vice President, Assistant Secretary and Director
Cole B. Silver Secretary
All directors and officers hold office for the term of one year and
until their successors are elected and qualified, subject to earlier termination
by removal or resignation.
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ITEM 11. EXECUTIVE COMPENSATION
Not Applicable. The Trust 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 Equipment
Receivables Asset-Backed Notes, Series 1999-1, Class A-1 Notes, Class A-2 Notes,
and Class A-3 Notes, (ii) the principal amount of each class of Offered Notes
and (iii) the percent that the principal amount of each Class of Offered Notes
owned represents of the outstanding principal amount of each Class of the
Offered Notes, respectively. The information set forth in the table is based
upon information obtained by the Issuers from the Depository Trust Company.
ABS and the Issuers are not aware of any Schedules 13D or 13G filed
with the Securities and Exchange Commission in respect of the Notes.
Amounts
Owed
(All Dollar
Amounts are
in Thousands)
Name and Address Principal Percent
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Class A-1 Notes
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Bankers Trust Company $5,000 9.82%
C/o BT Services Tennessee Inc.
Nashville, TN 37211
Merrill Lynch, Pierce & Smith Safekeeping $45,929 90.18%
4 Corporate Place
Corporate Park 287
Piscataway, NJ 08855
Class A-2 Notes
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Bankers Trust Company $ 2,800 7.27%
C/o BT Services Tennessee Inc.
Nashville, TN 37211
Boston Safekeeping $ 8,600 22.34%
Boston, MA 02105
Citibank, N.A. $ 2,600 6.75%
P.O. Box 30576
Tampa, FL 33630
State Street Bank and Trust Company $ 5,501 14.29%
Global Corp. Action Dept JAB5W
P.O. Box 1631
Boston, MA 02105
Class A-3 Notes
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Bankers Trust Company $7,946 84.12%
C/o BT Services Tennessee Inc.
Nashville, TN 37211
Chase Manhattan Bank $ 1,500 15.88%
4 New York Plaza
13th Floor
New York, NY 10004
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not Applicable.
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:
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Exhibit No. Description
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*3.1.1 Certificate of Incorporation of Advanta Business Services Corp.
*3.1.2 Certificate of Incorporation of Advanta Leasing Receivables Corp. VIII
*3.1.3 Certificate of Incorporation of Advanta Leasing Receivables Corp. IX
*3.2.1 By-laws of Advanta Business Services Corp.
*3.2.2 By-laws of Advanta Leasing Receivables Corp. VIII
*3.2.3 By-laws of Advanta Leasing Receivables Corp. IX
*4.1 Master Business Receivables Asset-Backed Financing Facility Agreement
*99.1 Servicer's Certificates for the payment periods ending in April, May, June,
September, October, November and December.
* Incorporated by reference to the Exhibit of the same designation filed on
the Form S-1 registration statement declared effective on or about August
12, 1999 and also Incorporated by reference from previously filed Current
Reports on Form 8-K listed below
(b) Reports on Form 8-K.
Four reports on Form 8-K have been filed by the Issuers during the
period covered by this report.
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Date of Reports on Form 8-K Item Report/Financial Statements Filed
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September 15, 1999 Servicer's Certificate for the August Monthly Period relating to
the Equipment Receivables Asset-Backed Notes, Series 1999-1,
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes
October 15, 1999 Servicer's Certificate for the September Monthly Period relating
to the Equipment Receivables Asset-Backed Notes, Series 1999-1,
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes
November 15, 1999 Servicer's Certificate for the October Monthly Period relating
to the Equipment Receivables Asset-Backed Notes, Series 1999-1,
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes
December 15, 1999 Servicer's Certificate for the November Monthly Period relating
to the Equipment Receivables Asset-Backed Notes, Series 1999-1,
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes
January 18, 2000 Servicer's Certificate for the December Monthly Period relating
to the Equipment Receivables Asset-Backed Notes, Series 1999-1,
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes
(c) See "Item 14(a)(3) - Exhibits."
(d) Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrants have duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
ADVANTA BUSINESS SERVICES CORP.
as Registrant and Servicer
By: /s/ George Deehan
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Name: George Deehan
Title: President, Chief Executive Officer
and Director
Dated: March 31, 2000
ADVANTA LEASING RECEIVABLES CORP. VIII
as Registrant
By: /s/ Michael Coco
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Name: Michael Coco
Title: Vice President and Chief Executive
Officer
ADVANTA LEASING RECEIVABLES CORP. IX
as Registrant
By: /s/ Michael Coco
---------------------------------------------
Name: Michael Coco
Title: Vice President and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf on the
Registrants and in the capacities and on the dates indicated.
ADVANTA BUSINESS SERVICES CORP.
By: /s/ Dennis Alter
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Name: Dennis Alter
Title: Director
Date: March 31, 2000
By: /s/ George Deehan
-------------------------------------------
Name: George Deehan
Title: President, Chief Executive Officer
and Director
Date: March 31, 2000
By: /s/ John Paris
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Name: John Paris
Title: Senior Vice President and
Chief Financial Officer
Date: March 31, 2000
By: /s/ Cole B. Silver
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Name: Cole B. Silver
Title: Senior Vice President, Secretary
Date: March 31, 1999
ADVANTA LEASING RECEIVABLES CORP. VIII
By: /s/ John Paris
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Name: John Paris
Title: President and Director
Date: March 31, 2000
By: /s/ Michael Coco
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Name: Michael Coco
Title: Vice President, Chief Executive
Officer and Director
Date: March 31, 2000
By: /s/ Mark Shapiro
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Name: Mark Shapiro
Title: Treasurer
Date: March 31, 2000
By: /s/ Janis C. George
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Name: Janis C. George
Title: Vice President, Assistant Secretary
and Director
Date: March 31, 2000
By: /s/ Cole B. Silver
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Name: Cole B. Silver
Title: Secretary
Date: March 31, 2000
By: /s/ George Deehan
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Name: George Deehan
Title: Director
Date: March 31, 2000
ADVANTA LEASING RECEIVABLES CORP. IX
By: /s/ John Paris
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Name: John Paris
Title: President and Director
Date: March 31, 2000
By: /s/ Michael Coco
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Name: Michael Coco
Title: Vice President, Chief Executive
Officer and Director
Date: March 31, 2000
By: /s/ Mark Shapiro
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Name: Mark Shapiro
Title: Treasurer
Date: March 31, 2000
By: /s/ Janis C. George
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Name: Janis C. George
Title: Vice President, Assistant Secretary
and Director
Date: March 31, 2000
By: /s/ Cole B. Silver
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Name: Cole B. Silver
Title: Secretary
Date: March 31, 2000
By: /s/ George Deehan
-------------------------------------------
Name: George Deehan
Title: Director
Date: March 31, 2000
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EXHIBIT INDEX
Exhibit No. Description
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*3.1.1 Certificate of Incorporation of Advanta Business Services Corp.
*3.1.2 Certificate of Incorporation of Advanta Leasing Receivables Corp. VIII
*3.1.3 Certificate of Incorporation of Advanta Leasing Receivables Corp. IX
*3.2.1 By-laws of Advanta Business Services Corp.
*3.2.2 By-laws of Advanta Leasing Receivables Corp. VIII
*3.2.3 By-laws of Advanta Leasing Receivables Corp. IX
*4.1 Master Business Receivables Asset-Backed Financing Facility Agreement
*99.1 Servicer's Certificates for the payment periods ending in September,
October, November and December 1999
* Incorporated by reference to the Exhibit of the same designation filed
with ABS's and the Issuers' Form S-1 registration statement declared
effective on or about August 12, 1999 and also Incorporated by reference from
previously filed Current Reports on Form 8-K listed herein.
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