UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549
                                FORM 10-K


[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

For the year ended                              December 25, 1998
                                                -----------------

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to _________

Commission File Number   0-16312

                       ML ASSET BACKED CORPORATION
- ------------------------------------------------------------------
     (Exact name of registrant as specified in its charter)

          Delaware                                 13-3433607
- -------------------------------                -------------------
(State  or other jurisdiction                    (IRS  Employer
of incorporation or organization               Identification No.)

World Financial Center
North Tower
250 Vesey Street - 12rd Flr
New York, New York                                10281-1312
(Address of principal executive offices)          (Zip Code)


Registrant's telephone number, including area code:(212) 449-0336

Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:

                                     Number of Shares Outstanding
     Title of Each Class             as of December 25, 1998
  --------------------------         ----------------------------
  Common Stock, Par Value                         100
  $10 per Share


<PAGE>

      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:  [x] Yes   [ ] No.

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 registrant's knowledge,
in  definite  proxy  or  information statements  incorporated  by
reference in Part III of this Form 10-K or any amendment to  this
Form 10-K.
                        [Not Applicable]

      The  Registrant had 100 shares of common stock  outstanding
(all  owned by Merrill Lynch Mortgage Capital Inc.) as of
March 25, 1999.

      The  Registrant meets the conditions set forth  in  General
Instruction J(1)(a) and (b) of Form 10-K and is therefore  filing
this form with the reduced disclosure format.


<PAGE>


                        TABLE OF CONTENTS


PART I

   Item 1.  Business

   Item 2.  Properties

   Item 3.  Legal Proceedings

   Item 4.  Submission of Matters to a Vote of Security Holders

PART II

   Item 5.  Market for Registrant's Common Stock
            and Related Stockholder Matters

   Item 6.  Selected Financial Data

   Item 7.  Management's Discussion and Analysis
            of Financial Condition and Results of Operations

   Item 8.  Financial Statements and Supplementary Data

   Item 9.  Changes in and Disagreements with Accountants
            on Accounting and Financial Disclosure

PART III

   Item 10. Directors and Executive Officers of the Registrant

   Item 11. Executive Compensation

   Item 12. Security Ownership of Certain Beneficial
            Owners and Management

   Item 13. Certain Relationships and Related Transactions

PART IV

   Item 14. Exhibits, Financial Statement Schedules,
            and Reports on Form 8-K

Signatures





                                     Page 1
<PAGE>

PART I

ITEM 1. BUSINESS

     ML Asset Backed Corporation (the "Company"), incorporated in
the State of Delaware on September 22, 1987, is a wholly-owned,
limited purpose subsidiary of Merrill Lynch Mortgage Capital Inc.,
which is an indirect, wholly-owned subsidiary of Merrill Lynch &
Co., Inc.

     The Company was established for the sole purpose of engaging
in the following activities: (a) issuing, selling, authorizing and
delivering bonds, notes and other evidences of indebtedness (the
"Notes"), (b) acting as settlor or depositor of trusts formed to
issue Notes or to issue participation certificates (the
"Certificates") that are secured or collateralized by (1)
receivables (the "Receivables") including, without limitation,
automobile installment sale contracts, automobile leases,
equipment leases, revolving credit card accounts, truck
receivables, recreational vehicle loans, manufactured housing
loans, student loans and other receivables, (2) pass-through
certificates (the "Pass-Through Certificates") evidencing a
fractional undivided ownership interest in the assets of one or
more trusts or in one or more pools of Receivables, (3) bonds,
notes and other evidences of indebtedness (the "Bonds") secured or
collateralized by one or more pools of Receivables, or (4) any
combination of Receivables, Bonds and Pass-Through Certificates,
(c) acquiring, owning, holding, selling, assigning, pledging and
otherwise dealing with the Receivables and related insurance
policies and agreements, including agreements with automobile
dealers and other originators or servicers of Receivables, (d)
authorizing, issuing, selling and delivering subordinated
indebtedness, and (e) engaging in any activity and exercising any
powers permitted to corporations under the laws of the State of
Delaware that are incidental to the foregoing and necessary or
convenient to accomplish the foregoing.

     Each series of the Company's Notes or Certificates will be
secured by, or represent ownership of, a separate and identifiable
pool of Receivables purchased in connection with the issuance of
such Notes or Certificates. Additional security for each series
will be provided by collections and/or distributions on the
Receivables which will be remitted to an account or accounts to be
established with the trustee (the "Trustee") under the indenture,
sale and servicing agreement or other similar agreement pursuant to
which such Notes or Certificates will be issued, and may also
include cash and other investments deposited with the Trustee at
the time of issuance of such Notes or Certificates, as well as
other credit enhancements that may be used to secure or support the


                                       Page 2
<PAGE>

Notes or Certificates. The Receivables for each series of Notes or
Certificates will be pledged with or sold to the Trustee on behalf
of the holders of the Notes or Certificates of that series, and
will not be available for the Notes or Certificates of any other
series. The Company will use the net proceeds from the sale of the
Notes or Certificates to simultaneously purchase the Receivables to
be pledged as security for, or sold in connection with, the issuance
of such Notes or Certificates. As of December 25, 1998, there were
no notes outstanding.

     At December 25, 1998, the Company had two registration
statements on Form S-3 with the Securities and Exchange Commission
for the issuance of approximately $191 million of securities.


ITEM 2. PROPERTIES

     The Company does not own any buildings or real estate
     and has no physical properties.

ITEM 3. LEGAL PROCEEDINGS

     The Company is not a party to any pending legal
     proceedings, nor is the Company aware of any
     proceedings contemplated by governmental authorities.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Pursuant to General Instruction J of Form 10-K, the
     information required by item 4 is omitted.


PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
        STOCKHOLDER MATTERS.

     (a) There is no established public trading market for the
         Company's common stock.








                                     Page 3

<PAGE>

     (b) The number of holders of record as of
         December 25, 1998 was as follows:

                          Number of Record
                              Holders
                          ----------------
      Common Stock               1


     (c) No dividend has been declared during
         the fiscal years 1996, 1997, and 1998.


ITEM 6. SELECTED FINANCIAL DATA

     Pursuant to General Instruction J of Form 10-K, the
     information required by item 6 is omitted.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS.

     Pursuant to General Instruction J of Form 10-K, there
     were no material changes in the financial condition or
     in the results of operations.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Index                                            Page
     -----                                            ----

     Independent Auditors' Report                       5

     Balance Sheets as of December 25, 1998
     and December 26, 1997                              6

     Statements of Operations and Retained Earnings
     for the Years Ended December 25, 1998,
     December 26, 1997, and December 27, 1996           7

     Statements of Cash Flows for the Years Ended
     December 25, 1998, December 26, 1997, and
     December 27, 1996                                  8

     Notes to Financial Statements                    9-10





                                     Page 4
<PAGE>

             INDEPENDENT AUDITORS' REPORT



To the Board of Directors of ML Asset Backed Corporation:

We have audited the accompanying balance sheets of ML Asset
Backed Corporation as of December 25, 1998 and December 26, 1997
and the related statements of operations and retained earnings
and cash flows for each of the three years in the period ended
December 25, 1998.  These financial statements  are  the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted
auditing standards. 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 audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all
material respects, the financial position of ML Asset Backed
Corporation at December 25, 1998 and December 26, 1997 and the
results of its operations and its cash flows for each of the
three years in the period ended December 25, 1998 in conformity
with generally accepted accounting principles.



/s/ Deloitte & Touche LLP
New York, New York
March 19, 1999












                                     Page 5
<PAGE>

<TABLE>

<CAPTION>

                    ML ASSET BACKED CORPORATION
                           BALANCE SHEETS
            AS OF DECEMBER 25, 1998 AND DECEMBER 26, 1997


                                        1998          1997
                                       ______        ______
<S>                                   <C>           <C>
ASSET

Cash                                   $1,000        $1,000
                                       ------        ------

STOCKHOLDER'S EQUITY

 Common Stock, $10 par value;
 1,000 shares authorized
 100 shares issued and outstanding     $1,000        $1,000
                                       ------        ------




The accompanying notes are an integral part of these financial
statements.

</TABLE>







                                     Page 6
<PAGE>

<TABLE>

<CAPTION>


                    ML ASSET BACKED CORPORATION
          STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
                        FOR THE YEARS ENDED
      DECEMBER 25, 1998, DECEMBER 26, 1997, AND DECEMBER 27, 1996


                                     1998      1997      1996
                                     _____     _____     _____
<S>                                 <C>       <C>       <C>

Revenues - Interest Income           $ -       $ -       $ -

Expenses - Interest Expense            -         -         -

Earnings Before Taxes                  -         -         -

Provision For Income Taxes             -         -         -

Net Earnings                           -         -         -


Retained earnings, beginning of year   -         -         -

Retained earnings, end of year       $ -       $ -       $ -






The accompanying notes are an integral part of these financial
statements.

</TABLE>





                                     Page 7
<PAGE>

<TABLE>

<CAPTION>

                    ML ASSET BACKED CORPORATION
                      STATEMENTS OF CASH FLOWS
                        FOR THE YEARS ENDED
    DECEMBER 25, 1998, DECEMBER 26, 1997, AND DECEMBER 27, 1996


                                             1998      1997      1996
                                            ______    ______    ______
<S>                                        <C>       <C>       <C>

CASH FLOW FROM OPERATING ACTIVITIES:

Net earnings                                $  -      $  -      $  -

CASH FLOWS FROM FINANCING ACTIVITIES           -         -         -

CASH FLOWS FROM INVESTING ACTIVITIES           -         -         -
                                            ------    ------    ------
CHANGE IN CASH                                 -         -         -

CASH, BEGINNING OF YEAR                      1,000     1,000     1,000
                                            ------    ------    ------

CASH, END OF YEAR                           $1,000    $1,000    $1,000
                                            ------    ------    ------

SUPPLEMENTAL INFORMATION:
Cash payments for interest and taxes        $  -      $  -      $  -
                                            ------    ------    ------


The accompanying notes are an integral part of these financial
statements.

</TABLE>




                                     Page 8
<PAGE>

                     ML ASSET BACKED CORPORATION
                    NOTES TO FINANCIAL STATEMENTS


Note 1.  Description of Business


     ML Asset Backed Corporation (the "Company"), incorporated in
the State of Delaware on September 22, 1987, is a wholly-owned,
limited purpose subsidiary of Merrill Lynch Mortgage Capital Inc.,
which is an indirect, wholly-owned subsidiary of Merrill Lynch &
Co., Inc. ("ML&Co").

     The Company was established for the sole purpose of engaging
in the following activities: (a) issuing, selling, authorizing and
delivering bonds, notes and other evidences of indebtedness (the
"Notes"), (b) acting as settlor or depositor of trusts formed to
issue Notes or to issue participation certificates (the
"Certificates") that are secured or collateralized by (1)
receivables (the "Receivables") including, without limitation,
automobile installment sale contracts, automobile leases,
equipment leases, revolving credit card accounts, truck
receivables, recreational vehicle loans, manufactured housing
loans, student loans and other receivables, (2) pass-through
certificates (the "Pass-Through Certificates") evidencing a
fractional undivided ownership interest in the assets of one or
more trusts or in one or more pools of Receivables, (3) bonds,
notes and other evidences of indebtedness (the "Bonds") secured or
collateralized by one or more pools of Receivables, or (4) any
combination of Receivables, Bonds and Pass-Through Certificates,
(c) acquiring, owning, holding, selling, assigning, pledging and
otherwise dealing with the Receivables and related insurance
policies and agreements, including agreements with automobile
dealers and other originators or servicers of Receivables, (d)
authorizing, issuing, selling and delivering subordinated
indebtedness, and (e) engaging in any activity and exercising any
powers permitted to corporations under the laws of the State of
Delaware that are incidental to the foregoing and necessary or
convenient to accomplish the foregoing.

     Each series of the Company's Notes or Certificates will be
secured by, or represent ownership of, a separate and identifiable
pool of Receivables purchased in connection with the issuance of
such Notes or Certificates. Additional security for each series
will be provided by collections and/or distributions on the
Receivables which will be remitted to an account or accounts to be
established with the trustee (the "Trustee") under the indenture,
sale and servicing agreement or other similar agreement pursuant to
which such Notes or Certificates will be issued, and may also


                                     Page 9
<PAGE>

include cash and other investments deposited with the Trustee at
the time of issuance of such Notes or Certificates, as well as
other credit enhancements that may be used to secure or support the
Notes or Certificates. The Receivables for each series of Notes or
Certificates will be pledged with or sold to the Trustee on behalf
of the holders of the Notes or Certificates of that series, and will
not be available for the Notes or Certificates of any other series.
The Company will use the net proceeds from the sale of the Notes or
Certificates to simultaneously purchase the Receivables to be pledged
as security for, or sold in connection with, the issuance of such
Notes or Certificates. As of December 25, 1998, there were no notes 
outstanding.

     At December 25, 1998, the Company had two registration
statements on Form S-3 with the Securities and Exchange Commission
for the issuance of approximately $191 million of securities.

Note 2.  Accounting Policies

     The Company borrows funds from an affiliate, as required.
Interest expense is allocated to the Company based on the rate of
the asset financed.  All other operating expenses are charged
directly to the Parent.

 Note 3.  Income Taxes

     The results of operations of the Company are included in the
consolidated Federal income tax return of ML&Co.  ML&Co. allocates
the income taxes to its subsidiaries in a manner that approximates
the separate company method.

     The Company uses the asset and liability method in providing
income taxes on all transactions that have been recognized in the
financial statements.  The asset and liability method requires that
deferred taxes be adjusted to reflect the tax rates at which future
taxable amounts will be settled or realized. The effects of tax rate
changes on future deferred tax liabilities and deferred tax assets,
as well as other changes in income tax laws, are recognized in net
earnings in the period such changes are enacted.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
        ACCOUNTING AND FINANCIAL DISCLOSURE

     None.


                                     Page 10
<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Pursuant to General Instruction J of Form 10-K, the
     information required by item 10 is omitted.

ITEM 11. EXECUTIVE COMPENSATION

     Pursuant to General Instruction J of Form 10-K, the
     information required by item 11 is omitted.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT

     There were no notes outstanding at December 25, 1998.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Pursuant to General Instruction J of Form 10-K, the
     information required by item 13 is omitted.


PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
         ON FORM 15

     (a) 1. See index in Item 8 appearing on page 4.
         2. Not applicable.
         3. Exhibits:

            (3)(I)   Certificate of Incorporation of
                     the Company (Incorporated by reference to
                     Form 10, dated October 16, 1987).

            (3)(ii)  Amendment to the Certificate of
                     Incorporation of the Company (Incorporated
                     by reference to Form 10, dated October 16, 1987).

            (3)(iii) By-Laws of the Company (Incorporated
                     by reference to Form 10, dated October 16, 1987).

            (23)     Independent Auditors' Consent.

     (b) Not applicable.
     (c) Not applicable.
     (d) Not applicable.



                                     Page 11
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.


               ML ASSET BACKED CORPORATION

               By:     /s/ Robert J. Little
               Name:   Robert J. Little
               Title:  President and Chairman of the Board
               Dated:  March 25, 1999


Pursuant to the requirement of the Securities Exchange Act of 1934,
this report has been executed below by the following persons on
behalf of the Registrant and in the capacities and on the date
indicated.


               By:     /s/ Thomas Layton
               Name:   Thomas Layton
               Title:  Treasurer
               Date:   March 25, 1999



               By:     /s/ Michael M. McGovern
               Name:   Michael M. McGovern
               Title:  Secretary
               Date:   March 25, 1999













                                     Page 12

<PAGE>

EXHIBITS INDEX                                  PAGE NO.

(23) Independent Auditors' Consent                 14
(27) Financial Data Schedule                       15