EXHIBIT 99.2
                              
                Independent Auditor's Report
                              
                              
The Board of Directors
Federated Department Stores, Inc.

The Board of Directors
Prime Receivables Corporation:

We have examined management's assertion, included in the
accompanying Management Report on the Effectiveness of the
Internal Accounting Control Structure over the Servicing of
Accounts Receivable, that as of August 2, 1997, Federated
Department Stores, Inc. and subsidiaries ("Federated"), as
Servicer under the Amended and Restated Pooling and
Servicing Agreement dated December 15, 1992, between Prime
Receivables Corporation ("Prime"), as Transferor, Federated,
as Servicer, and The Chase Manhattan Bank, as Trustee, (the
"Pooling and Servicing Agreement") maintained an effective
internal accounting control structure over the servicing of
accounts receivable of Prime.

Our examination was made in accordance with standards
established by the American Institute of Certified Public
Accountants and, accordingly, included obtaining an
understanding of the internal accounting control structure
over the servicing of accounts receivable, testing and
evaluating the design and operating effectiveness of the
internal control structure, and such other procedures as we
considered necessary in the circumstances.  We believe that
our examination provides a reasonable basis for our opinion.

Because of inherent limitations in any internal accounting
control structure, errors or irregularities may occur and
may not be detected.  Also, projections of any evaluation of
the internal accounting control structure over the servicing
of accounts receivable to future periods are subject to the
risk that the internal accounting control structure may
become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may
deteriorate.

In our opinion, management's assertion that Federated
maintained an effective internal accounting control
structure over the servicing of accounts receivable of Prime
as of August 2, 1997, is fairly stated, in all material
respects, based upon criteria stated in the Pooling and
Servicing Agreement.

This report is intended solely for the information and use
of the boards of directors and managements of Federated and
Prime, Investor Certificateholders, The Chase Manhattan
Bank, as Trustee, Moody's Investor Services, Inc. and
Standard and Poor's Corporation, as the Rating Agencies, and
should not be used for any other purpose.


                              KPMG Peat Marwick LLP
November 14, 1997



Management Report on Effectiveness of Internal
Accounting Control Structure
Over the Servicing of Accounts Receivable

Management of Federated Department Stores, Inc., and
subsidiaries ("Federated") is responsible for establishing
and maintaining an effective internal accounting control
structure over the servicing of accounts receivable of Prime
Receivables Corporation ("Prime"), a wholly-owned subsidiary
of Federated.  The structure contains monitoring mechanisms,
and actions are taken to correct deficiencies identified.

There are inherent limitations in the effectiveness of any
internal accounting control structure, including the
possibility of human error and the circumvention or
overriding of controls. Accordingly, even an effective
internal accounting control structure can provide only
reasonable assurance with respect to the servicing of
accounts receivable and the preparation of reports relating
to the servicing of accounts receivable as required by the
Amended and Restated Pooling and Servicing Agreement dated
December 15, 1992 between Prime, as Transferor, Federated,
as Servicer, and The Chase Manhanttan Bank, as Trustee (the
"Pooling and Servicing Agreement").  Further, because of
changes in conditions, the effectiveness of an internal
accounting control structure may vary over time.

Management assessed Federated's internal accounting control
structure over the servicing of accounts receivable of Prime
as of August 2, 1997.  This assessment was based on criteria
for effective internal accounting control over the servicing
of accounts receivable of Prime described in the Pooling and
Servicing Agreement.  Based on this assessment, management
believes that, as of August 2, 1997, Federated maintained an
effective internal accounting control structure over the
servicing of accounts receivable of Prime.

November 14, 1997


/s/ James J. Amann
James J. Amann, Chairman & CEO



/s/ Jack Brown
Jack Brown, Senior Vice President