Superior Bank FSB Afc Mortgage LN Asset BK Notes Ser 1999-3 – ‘8-K’ for 9/28/99

On:  Wednesday, 11/17/99   ·   For:  9/28/99   ·   Accession #:  950110-99-1485   ·   File #:  333-61691-05

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                        12     36K 

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
 Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) September 28, 1999             

SUPERIOR  BANK  FSB (as  seller  and  servicer  under  the  Sale  and  Servicing
Agreement,  dated as of  September  1, 1999,  providing  for the issuance of AFC
Mortgage Loan Asset Backed Notes, Series 1999-3)                                

 Superior Bank FSB
(Exact name of registrant as specified in its charter)

United States                  333-83597             36-1414142 
----------------------------           ---------        ----------------------  
(State or Other Jurisdiction          (Commission        (I.R.S. Employer       
of Incorporation)                     File Number)      Identification Number)  

One Lincoln Centre                                                              
Oakbrook Terrace, Illinois                                      60181           
--------------------------                                    ---------         
(Address of Principal                                         (Zip Code)        
Executive Offices)                                                              

Registrant's telephone number, including area code (630) 916-4000               
                                    --------------

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Item 2. Acquisition or Disposition of Assets                                    

Description of the Notes, Group 1 and Group 2                                   

    On September 28, 1999 a single series of notes, entitled AFC Mortgage Loan
Asset Backed Notes, Series 1999-3 (the "Notes") were issued pursuant to an      
indenture (the "Indenture"), dated as of September 1, 1999, between AFC Trust   
Series 1999-3, as issuer (the "Issuer") and LaSalle Bank National Association,  
as indenture trustee (the "Indenture Trustee"). The Issuer was formed pursuant  
to a trust agreement (the "Trust Agreement"), dated as of September 1, 1999,    
between Superior Bank FSB, as depositor, and Wilmington Trust Company, as owner 
trustee. The Notes consist of two classes identified as Class 1A and Class 2A.  
The Notes are secured by the trust estate comprised of Group 1 and Group 2 (the 
"Trust Estate"), consisting primarily of first and second liens on single-family
properties, multifamily properties, commercial properties and mixed residential 
and commercial properties (the "Mortgage Loans") with an aggregate principal    
balance of $331,262,502.03 as of September 1, 1999 (the "Cut-off Date") and an  
aggregate amount of $124,483,356.98 deposited on the Closing Date in the Group 1
Pre-Funding Account and an aggregate amount of $78,031,772.75 deposited on the  
Closing Date in the Group 2 Pre-Funding Account. The Mortgage Loans were        
acquired by the Issuer pursuant to a sale and servicing agreement ( the "Sale   
and Servicing Agreement"), dated as of September 1, 1999, among Superior Bank   
FSB, as seller and servicer, the Issuer and the Indenture Trustee. The Notes    
were sold to Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill") and 
J.P. Morgan Securities Inc. ("J.P. Morgan"), pursuant to an underwriting        
agreement dated September 20, 1999 among Superior Bank FSB, Merrill and J.P.    
Morgan.                                                                         

   The Notes evidence, in the aggregate, $515,000,000 principal amount as of
the Cut-off Date. The Class 1A Notes will be entitled to payments of interest   
accrued on the outstanding Class 1A Note Principal Balance at a variable        
pass-through rate. The Class 2A Notes will be entitled to payments of interest  
accrued on the outstanding Class 2A Note Principal Balance at a variable        
pass-through rate. In addition, on each Payment Date, each class of Notes will  
be entitled to distributions allocable to principal which will, as more fully   
described in the Indenture, include the principal portion of all scheduled and  
unscheduled payments received on the Mortgage Loans during an Accrual Period.   

    Credit support in respect of certain losses realized on the Mortgage Loans
will be covered by a note insurance policy (the "Note Insurance Policy"),       
attached hereto as Exhibit 4.1, issued by Financial Guaranty Insurance Company  
(the "Note Insurer") and, if the related Payment Date is prior to the Cross-over
Date, Excess Spread received by the Servicer. The Note Insurance Policy will    
irrevocably and unconditionally guaranty payment on each Payment Date to the    
Holders of the Notes of the related Class A Remittance Amount. If the related   
Payment Date is prior to the Cross-Over Date with respect to a particular Group,
Holders of the Notes will have a right to 100% of the related Excess Spread to  
fund the amount by which the related Class A Remittance Amount with respect to  
each Class of Notes exceeds the related Available Remittance Amount for such    
Payment Date. To the extent available, the Net Excess Spread and Excess         
Principal with respect to a Group will                                          

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then be applied to cover any Available Funds Shortfall with respect to the other
Group. Capitalized terms used herein and not otherwise defined shall have the   
meanings assigned to them in the Sale and Servicing Agreement.                  

Items 3 through 6 and Item 8 are not included because they are not    
applicable.                                                                     

Item 7. Financial Statements and Exhibits                             

(a) Not applicable                                    

(b) Not applicable                                    

(c) Exhibits                                          

  4.1 Note Insurance Policy, dated September 28, 1999, issued by Financial
Guaranty Insurance Company.                                                     

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SIGNATURES

  Pursuant to the requirements 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.                                          

                             SUPERIOR BANK FSB

                                       By:  /s/ William C. Bracken
                                                --------------------------
                                     Name:  William C. Bracken
                                        Title: Senior Vice President
                                                     and Chief Financial Officer

Dated: September 28, 1999                                                       

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 EXHIBIT TABLE

  4.1 Note Insurance Policy, dated September 28, 1999, issued by Financial
Guaranty Insurance Company.                                                     

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 EXHIBIT 4.1

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Financial Guaranty Insurance Company                                            
115 Broadway                                                                    
New York, New York 10006                                                        
(212) 312-3000                                                                  
(800) 352-0001                                                                  

SURETY BOND                                                                     

Issuer:  AFC Trust Series 1999-3                      Policy Number:  99010727  
                                                    Control Number:  0010001

Insured Obligations:                                                            
$515,000,000 in principal amount                                                
of AFC Mortgage Loan Asset Backed                                               
Notes, Series 1999-3, Class 1A and                                              
2A Notes (the "Notes")                                                          

Trustee:  LaSalle Bank National Association, as Indenture Trustee               

Financial Guaranty Insurance Company ("Financial Guaranty"), a New York stock   
insurance company, in consideration of its receipt of the Deposit Premium and   
subject to the terms of this Surety Bond, hereby unconditionally and irrevocably
agrees to pay each Insured Payment to the Indenture Trustee named above or its  
successor, as indenture trustee for the Holders of the Notes, to the extent set 
forth in the Indenture and the Sale and Servicing Agreement.                    

Financial Guaranty will make an Insured Payment (other than that portion of an  
Insured Payment constituting a Preference Amount) out of its own funds by 2:00  
p.m. (New York City Time) in immediately available funds to the Indenture       
Trustee on the later of (i) the Business Day next following the day on which    
Financial Guaranty shall have received Notice that an Insured Payment is due and
(ii) the Payment Date on which the Insured Payment is payable to Noteholders    
pursuant to the Indenture and the Sale and Servicing Agreement, for disbursement
to such Noteholders in the same manner as other payments with respect to the    
Notes are required to be made. Any Notice received by Financial Guaranty after  
2:00 p.m. New York City time on a given Business Day or on any day that is not a
Business Day shall be deemed to have been received by Financial Guaranty on the 
next succeeding Business Day.                                                   

Upon such payment, Financial Guaranty shall be fully subrogated to the rights of
the Noteholders to receive the amount so paid. Financial Guaranty's obligations 
hereunder with respect to each Payment Date shall be discharged to the extent   
funds consisting of the Insured Payment are received by the Indenture Trustee on
behalf of the Noteholders for payment to such Noteholders, as provided in the   
Indenture and the Sale and Servicing Agreement and herein, whether or not such  
funds are properly applied by the Indenture Trustee.                            

Form 9109                                                                       
Page 1 of 4                                                                     

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If the payment of any portion or all of any amount that is insured hereunder is 
voided pursuant to a final order of a court exercising proper jurisdiction in an
insolvency proceeding to the effect that the Indenture Trustee or a Noteholder, 
as the case may be, is required to return any such payment or portion thereof   
prior to the expiration date of this Surety Bond because such payment was voided
under the U. S. Bankruptcy Code, with respect to which order the appeal period  
has expired without an appeal having been filed (a "Final Order"), and, as a    
result, the Indenture Trustee or any Noteholder is required to return such      
voided payment, or any portion of such voided payment made in respect of the    
Notes (a "Preference Amount"), Financial Guaranty will pay on the guarantee     
described in the first paragraph hereof, an amount equal to each such Preference
Amount, on the second Business Day following receipt by Financial Guaranty of   
(x) a certified copy of the Final Order, (y) an assignment, in form reasonably  
satisfactory to Financial Guaranty, irrevocably assigning to Financial Guaranty 
all rights and claims of the Indenture Trustee and/or such Noteholder relating  
to or arising under such Preference Amount and appointing Financial Guaranty as 
the agent of the Indenture Trustee and/or such Noteholder in respect of such    
Preference Amount, and (z) a Notice appropriately completed and executed by the 
Indenture Trustee or such Noteholder, as the case may be. Such payment shall be 
made to the receiver, conservator, debtor-in-possession or trustee in bankruptcy
named in the Final Order and not to the Indenture Trustee or Noteholder directly
(unless a Noteholder has previously paid such amount to such receiver,          
conservator, debtor-in-possession or trustee named in such Final Order in which 
case payment shall be made to the Indenture Trustee for distribution to the     
Noteholder upon proof of such payment reasonably satisfactory to Financial      
Guaranty). Notwithstanding the foregoing, in no event shall Financial Guaranty  
be (i) required to make any payment under this Surety Bond in respect of any    
Preference Amount to the extent such Preference Amount is comprised of amounts  
previously paid by Financial Guaranty hereunder, or (ii) obligated to make any  
payment in respect of any Preference Amount, which payment represents a payment 
of the principal amount of the Notes, prior to the time Financial Guaranty      
otherwise would have been required to make a payment in respect of such         
principal.                                                                      

Financial Guaranty shall make payments due in respect of Preference Amounts     
prior to 2:00 p.m. New York city time on the second Business Day following      
Financial Guaranty's receipt of the documents required under clauses (x) through
(z) of the preceding paragraph. Any such documents received by Financial        
Guaranty after 2:00 p.m. New York City time on a given Business Day or on any   
day that is not a Business Day shall be deemed to have been received by         
Financial Guaranty on the next succeeding Business Day. All payments made by    
Financial Guaranty hereunder in respect of Preference Amounts will be made with 
Financial Guaranty's own funds.                                                 

This Surety Bond is non-cancelable for any reason, including nonpayment of any  
premium. The premium on this Surety Bond is not refundable for any reason,      
including the payment of the Notes prior to their respective maturities. This   
Surety Bond shall expire and terminate without any action on the part of        
Financial Guaranty or any other Person on the date that is one year and one day 
following the date on which the Notes shall have been paid in full.             

The Deposit Premium shall be due and payable on the date hereof, and a monthly  
premium shall be due and payable as provided in the Sale and Servicing          
Agreement.                                                                      

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Financial Guaranty Insurance Company                                            
115 Broadway                                                                    
New York, New York 10006                                                        
(212) 312-3000                                                                  
(800) 352-0001                                                                  

SURETY BOND                                                                     

This Surety Bond is subject to and shall be governed by the laws of the State of
New York. The proper venue for any action or proceeding on this Surety Bond     
shall be the County of New York, State of New York. The insurance provided by   
this Surety Bond is not covered by the New York Property/Casualty Insurance     
Security Fund (New York Insurance Code, Article 76).                            

Capitalized terms used and not defined herein shall have the respective meanings
set forth in the Sale and Servicing Agreement. "Notice" means a written notice  
in the form of Exhibit A to this Surety Bond by registered or certified mail or 
telephonic or telegraphic notice, subsequently confirmed by written notice      
delivered via telecopy, telex or hand delivery from the Indenture Trustee to    
Financial Guaranty specifying the information set forth therein. "Noteholder"   
means, as to a particular Note, the person, other than the Issuer, the Servicer,
any Subservicer or the Seller who, on the applicable Payment Date is entitled   
under the terms of such Note to payment thereof. "Sale and Servicing Agreement" 
means the Sale and Servicing Agreement by and between AFC Trust Series 1999-3,  
as Issuer, Superior Bank FSB, as Seller and Servicer, and LaSalle Bank National 
Association, as Indenture Trustee, dated as of September 1, 1999. "Indenture"   
means the Indenture by and between the Issuer and LaSalle Bank National         
Association, as Indenture Trustee, dated as of September 1, 1999.               

In the event that payments under any Note are accelerated, nothing herein       
contained shall obligate Financial Guaranty to make any payment of principal or 
interest on such Notes on an accelerated basis, unless such acceleration of     
payment by Financial Guaranty is at the sole option of Financial Guaranty; it   
being understood that a payment shortfall in respect of the redemption of the   
Notes by reason of the purchase by the Servicer pursuant to Section 11.01 of the
Sale and Servicing Agreement does not constitute acceleration for the purposes  
hereof.                                                                         

IN WITNESS WHEREOF, Financial Guaranty has caused this Surety Bond to be affixed
with its corporate seal and to be signed by its duly authorized officer in      
facsimile to become effective and binding upon Financial Guaranty by virtue of  
the countersignature of its duly authorized representative.                     

/s/ Ann Stern                                        /s/ A. Edward Turi III     
President                                            Authorized Representative  

Effective Date:  September 28, 1999                                             

Form 9109                                                                       
Page 3 of 4                                                                     

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 EXHIBIT A

NOTICE

To:  Financial Guaranty Insurance Company                                       
115 Broadway                                                          
New York, New York 10006                                              
(212) 312-3000                                                        
Attention:        General Counsel                                     

Telephone: (212) 312-3000                                             
Telecopier:  (212) 312-3220                                           

Re:  AFC Trust Series 1999-3,                                                   
AFC Mortgage Loan Asset Backed                                        
Notes, Series 1999-3                                                  
Policy No. 99010727                                                   

Determination Date: ___________________________                                 

Payment Date: __________________________                                        

We refer to that certain Sale and Servicing Agreement dated as of September 1,  
1999, by and between AFC Trust Series 1999-3, as Issuer, Superior Bank FSB, as  
Seller and Servicer, and LaSalle Bank National Association, as Indenture Trustee
(the "Sale and Servicing Agreement"), relating to the above referenced Notes.   
All capitalized terms not otherwise defined herein or in the Surety Bond shall  
have the same respective meanings assigned to such terms in the Sale and        
Servicing Agreement.                                                            

(a) As of the Determination Date and based upon the Servicer's Certificate for  
such Determination Date, the Indenture Trustee has determined under the Sale and
Servicing Agreement that in respect of the Payment Date set forth above:        

(i) The Class A Interest Remittance Amount with respect to the related
Class of Class A Certificates with respect to Group [1][2] due and owing is     
$____________;                                                                  

  (ii) The Class A Principal Remittance Amount with respect to the related
Class of Class A Certificates with respect to Group [1][2], due and owing is    
$______________;                                                                

   (iii) The Available Remittance Amount (minus the amount withdrawable from
the Group [1][2] Note Distribution Account to pay the Note Insurer pursuant to  
Section 6.02(i) of the Agreement and as reduced by any portion thereof that has 
been deposited in the Group [1][2] Note Distribution Account but may not be     
withdrawn therefrom pursuant to an order of a United States bankruptcy court of 
competent jurisdiction imposing a stay pursuant to Section 362 of the United    
States Bankruptcy Code) is $_______________;                                    

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 (iv) The lesser of (1) the sum of the (a) Excess Spread to be deposited
into the Group [1][2] Note Distribution Account pursuant to Section 5.04(i) of  
the Agreement, (b) the Net Excess Spread from the other Group and (c) the Excess
Principal from the other Group and (2) the Subordinated Amount with respect to  
the related Group, is $_______________;                                         

  (v) The aggregate amount of unreimbursed Insured Payments (including any
portion constituting Preference Amounts), together with the aggregate portion of
the items described in clauses (i) and (ii) above that represents interest      
accrued in respect of Insured Payments in accordance with the definition of     
Class A Carry-Forward Amount in the Agreement, is $_______________;             

 (vi) The additional portion of the Amount Available constituting Excess
Spread available to pay the Class A Interest Remittance Amount with respect to  
all related Classes of Class A Notes pursuant to Sections 6.06(c)(A)(Y)(i) with 
respect to Group 1 and Section 6.06(c)(B)(Y)(i) with respect to Group 2 is      
$_______________; and                                                           

  (vii) The aggregate amount to be withdrawn from the Group [1][2] Reserve
Account and deposited into the Group [1][2] Note Distribution Account pursuant  
to Section 6.14 of the Agreement is $_______________.                           

(i) On the maturity date for the Class A Notes, to the extent not otherwise     
covered in clauses (i) through (vi) above, any remaining unpaid principal or    
interest on the Class A Notes.                                                  

Please be advised that the amounts described in clauses (i), (ii) and 
(viii) above collectively exceed the amounts described in clauses [prior to the 
Cross-Over Date, (iii), (iv) (v)] [on or after the Cross-Over Date, clauses     
(iii), (v), (vi)] and (vii) above by $_______________.                          

Accordingly, pursuant to the Sale and Servicing Agreement, this statement       
constitutes a notice for payment of an Insured Payment in the amount of         
$_______________ under the Surety Bond.                                         

[Attached hereto is a copy of the Final Order in connection with a Preference   
Amount in the amount set forth therein, together with an assignment of rights   
and appointment of agent.]                                                      

(b) No payment claimed hereunder is in excess of the amount payable under the   
Surety Bond. The amount requested in this Notice should be paid to: [Payment    
Instructions]                                                                   

Any person who knowingly and with intent to defraud any insurance company or    
other person files an application for insurance or statement of claim containing
any materially false information or conceals for the purpose of misleading,     
information concerning any fact material thereto, commits a fraudulent insurance
act, which is a crime, and shall also be subject to a civil penalty not to      
exceed Five Thousand Dollars ($5,000.00) and the stated value of the claim for  
each such violation.                                                            

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   IN WITNESS WHEREOF, the Indenture Trustee has executed and delivered this
Notice this _____ day of ______________________.                                

                                                           ,
                 -----------------------------------------
as Indenture Trustee    

By:                     
              --------------------------------

Title:                  
                    --------------------------------

Dates Referenced Herein   and   Documents Incorporated by Reference

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