Exhibit 99(b)
Form 10-K for 1998
File No. 333-34793
AT&T Capital Corporation
Management Assertion
In accordance with the terms of the Transfer and Servicing Agreement dated
as of December 1, 1998 ('Servicing Agreement') among AT&T Capital Corporation
(the 'Company') as Servicer, and in its individual capacity, Antigua Funding
Corporation as the Depositor and The Bank of New York as the Indenture Trustee
for the Newcourt Equipment Trust Securities 1998, the Company is responsible for
servicing the leases and loans that are the subject of the Servicing Agreement.
The Company is responsible for establishing and maintaining effective
controls over the servicing of leases and loans. The controls are designed to
provide reasonable assurance to the Company's management and board of directors
that leases and loans are serviced in accordance with the Company's policies and
procedures as well as its responsibilities under the Servicing Agreement.
There are inherent limitations in any control, including the possibility of
human error and the circumvention or overriding of the controls. Accordingly,
even effective controls can provide only reasonable assurance with respect to
the achievement of any objectives of controls. Further, because of changes in
conditions, the effectiveness of controls may vary over time.
The Company has determined the objectives of control with respect to its
servicing responsibilities. These stated control criteria are set forth in
Exhibit I. The Company has assessed its controls in relation to these criteria
for the year ended December 31, 1998. Based upon this assessment, the Company
believes that its controls over servicing loans and leases are effective in
providing reasonable assurance that the Company compiled with its policies and
procedures and responsibilities under the Servicing Agreement.
AT&T Capital Corporation, as Servicer
By:
Xxxxx X Xxxxx
Executive Vice President and
Treasurer
EXHIBIT I
AT&T Capital Corporation
Stated Lease/Loan Servicing Control Criteria
I. SEGREGATION OF SERVICED PORTFOLIO
The Company's systems segregate leases and loans between those owned by the
Company and those managed by the Company for each relevant owner by each managed
pool.
II. LEASE/LOAN PAYMENTS
Lease and loan payments, including scheduled interest and principal,
prepayments, liquidation proceeds, late fees, etc. (collectively, remittances)
are applied to the respective customer account on a daily basis, based on an
established payment hierarchy.
III. ACCOUNTING
The Company maintains financial records for the serviced portfolios which are
periodically reconciled to the Company's subsidiary records.
IV. DELINQUENCIES
The Company maintains and implements policies and procedures which govern the
collection efforts, monitoring and reporting for delinquent accounts.
V. TRUSTEE DISBURSEMENTS
Remittances received by the Company are transferred to the Trustee by the
Company's Treasury Group on a daily and monthly basis in accordance with the
time frame established within the Servicing Agreement.
VI. TRUSTEE ACCOUNTING AND REPORTING
The Company's Treasury Group generates a monthly servicing report to the Trustee
and investors which provides the cash activity, delinquency, and defaults
relating to the serviced portfolio. Information on this report which is compiled
by the Corporate Systems Group and the Treasury Group is reconciled to the
records of the Company's various servicing entities.
AT&T Capital Corporation
Stated Lease/Loan Servicing Control Procedures
I. SEGREGATION OF SERVICED PORTFOLIO
The Company's systems segregate leases and loans between those owned by the
Company and those managed by the Company for each relevant owner by each managed
pool. Selected control procedures include:
a. Transactions which have been securitized are identified with a special code
(flagged) within the servicing entity's lease accounting system to
segregate the cash activity and reporting relating to these transactions.
b. System security policies and procedures have been established and
implemented to restrict modifications to securitization codes by users.
c. A formal or, at a minimum, an informal monthly lease and loan count
reconciliation of the securitized contracts is performed by the Portfolio
Accounting Group to ensure that all non-active securitized transactions are
accounted for.
d. For one accounting system, serviced portfolio transactional reports are
reviewed and reconciled to control totals generated from the data
transmission to the Treasury Group. Monthly journal entries recorded for
the month are compared to the net investment components of the system
lease/loan master file for both the owned and managed portfolios.
e. The Company generates daily cash reports which segregate cash among owned
and managed portfolios based upon the systems codes that flag the
contracts.
f. The Company's system automatically modifies the status indicator on a
managed transaction from active to its new status (default, prepaid,
rebook, maturity, or ineligible) upon the appropriate change to the lease
record.
g. Modifications of contracts are processed in accordance with the company's
schedule of authorization which is applicable to both owned and managed
contracts.
II. LEASE/LOAN PAYMENTS
Lease and loan payments, including scheduled interest and principal,
prepayments, liquidation proceeds, late fees, etc. (collectively, remittances)
are applied to the respective customer accounts on a daily basis, based on an
established payment hierarchy. Selected control procedures include:
a. Billing statements are prepared on a basis consistent with the terms of the
lease or loan and sent to customers based upon the records in the servicing
system.
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b. Customers are directed to forward their remittances to the Company's
lockboxes as indicated on their respective invoices.
c. Payments received at the lockbox electronically feed to the Company's lease
and loan accounting system on a daily basis and are posted to customer
records by the morning of the subsequent day in accordance with the
Company's established payment hierarchy.
d. A formal or, at a minimum, an informal daily cash reconciliation is
performed by the servicing entities of the cash received at the lockboxes
to ensure a complete accounting of all cash (owned and managed.)
e. System security policies and procedures have been established and
implemented to restrict modifications to the system controlled payment
hierarchy.
f. Segregation of duties have been established between the personnel
responsible for the posting of payments (Application Systems for electronic
transmissions and the Operations Group for manual adjustments) and
reconciling the cash activity to the general ledger (Portfolio Accounting
Group).
g. Suspense cash systems modules are utilized to monitor cash not
systematically applied to customer accounts.
h. Operations personnel review the clearing of suspense cash activity to
ensure timely application of such activity.
i. A monthly cash reconciliation between the summary of daily cash transferred
for the securitized contracts and the monthly servicing data file received
by Corporate Systems Group is prepared by Treasury and reviewed by the
Portfolio Accountanting Group.
j. Xxxxx and loan remittances received by the Company are separately
identified and transferred to the securitization Trust on a daily and
monthly basis.
k. The Company generates daily cash reports which segregate cash among owned
and managed portfolios based upon the systems codes that flag the
contracts.
l. The Company flags lease and loan contracts where all the contract principal
balance sold has been remitted to the Trust.
III. ACCOUNTING
The Company maintains financial records for the managed portfolios which are
periodically reconciled to the Company's systems. Selected control procedures
include:
a. Segregation of duties have been established between the personnel
responsible for record maintenance on the lease and loan accounting systems
(the Operations Group) and reconciling lease and loan activity to the
general ledger (Portfolio Accounting Group).
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b. The Company maintains an automated or manual interface between the lease
and loan accounting systems and the general ledger.
c. Monthly reconciliations between the lease and loan accounting systems and
the general ledger for the owned portfolio are performed.
d. A system reconciliation at the lease and loan level is performed between
the contract principal balance and the required payoff amount calculated by
the Corporate Systems Group to the corresponding figures provided by the
respective servicing entity.
e. A monthly reconciliation is performed by the Company from its general
ledger cash activity to the Treasury Group cash records.
f. For one accounting system, serviced portfolio transactional reports are
reviewed and reconciled to control totals generated from the data
transmission to the Treasury Group. Monthly journal entries recorded for
the month are compared to the net investment components of the system
lease/loan master file for both the owned and managed portfolios.
g. For portfolios residing on the CCLAS II lease accounting system, special
reports are run for the securitized portfolio to capture the rents due for
leases terminated prior to the billing cycle date. These special reports
are required as a result of a system constraint which does not capture the
rent amount due in the current month when a lease terminates prior to the
billing cycle date. This is included as an adjustment on the Servicer
Report.
IV. DELINQUENCIES
The Company maintains and implements policies and procedures which govern the
collection efforts, monitoring and reporting for delinquent accounts. Selected
control procedures include:
a. Policies and procedures exist for the periodic reviews of delinquent
transactions, generation of delinquency reports and collection efforts.
b. Account delinquency status is system calculated and generated.
c. The Arrears Management Group performs periodic reviews of the delinquency
reporting and collection activity at the servicing entities. Periodic
reviews are conducted to test the accuracy and timeliness of collection
efforts and delinquency reporting.
d. Collection effort information such as phone calls, correspondence, and
follow-up activity is maintained on-line by customer service
representatives and monitored by supervisors.
e. Delinquency reporting is reviewed by the servicing entities' Credit Head,
the Portfolio Quality Leader and the Operations Manager.
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f. Customer account monitoring is system driven based on delinquency and
follow up action required. Management reviews performance levels of the
Collectors.
g. Delinquency status for the monthly servicing report is calculated by the
system from delinquency status codes provided by the respective servicing
entities.
h. The Corporate Systems Group executes a system edit to verify the
delinquency status codes. The Treasury Group reviews month over month
changes for unusual trends.
i. Write-offsgenerated from the servicing entity's system are reconciled
monthly to the write-offs reported in the servicer report by the Treasury
Group.
V. TRUSTEE DISBURSEMENTS
Remittances received by the Company are transferred to the Trustee by the
Company's Treasury Group on a daily and monthly basis in accordance with the
time frame established within the Servicing Agreement. Selected control
procedures include:
a. The Company has written policies and procedures for the transfer of funds
to the Trustee on a daily and monthly basis.
b. Appropriate approvals in writing are required to initiate a wire transfer
of funds to the Trustee account.
c. The wire transfer of funds to the Trustee is restricted to the Treasury
Group.
d. Wire transfer activity is recorded on a timely basis by the Treasury Group
to the on-line cash system.
e. A monthly reconciliation of cash activity is performed by the servicing
entity from its general ledger to the Treasury Group's cash system. The
servicing entities periodically review the cash transfers recorded by the
Treasury Group in the cash management system.
g. Informal bank reconciliations are performed periodically at the servicing
entities.
h. A monthly cash reconciliation is performed between the Treasury Group's
cash records and the monthly servicing report produced by the Treasury
Securitization Group.
VI. TRUSTEE ACCOUNTING AND REPORTING
The Company's Treasury Group generates a monthly servicing report to the
Trustee and investors which provides the cash activity, delinquency, and
defaults relating to the serviced portfolio. Information on this report which
is compiled by the Corporate Systems Group and the Treasury Group is reconciled
to the records of the Company's various servicing entities. Selected control
procedures include:
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a. Monthly data extract files at a lease and the level are transmitted
electronically from the servicing entity to the Corporate Systems Group
where edits are performed to ensure a complete accountability of the
securitized portfolio as well as to check for errors in various data
elements by performing recalculations of amounts provided by the
servicing entities.
b. Through the system edit process, reports and files are generated for the
exception reporting which is provided to the respective servicing entity
for investigation and subsequent corrections.
c. A system reconciliation at the lease and loan level is performed between
the contract principal balance and the required payoff amount calculated by
the Corporate Systems Group to the corresponding figures provided by the
respective servicing entity.
d. System programs are utilized for compiling and calculating data relating to
the securitized portfolio.
e. A monthly cash reconciliation is performed between the Corporate Treasury
Group cash records and the monthly servicing report produced by the
Treasury Group.
f. Adequate system security and back up is maintained over the Corporate
System applications used for securitization.
g. The Treasury Group's management performs an informal analytical review on
the monthly servicing report.
h. The servicing entities are provided with workpapers supporting the servicer
report for their review and approval before submission by the Treasury
Group to the Trustee.
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