SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
for the fiscal year ended December 31, 1996
Commission File Number 33-48481
NOMURA ASSET SECURITIES CORPORATION
(Exact Name of registrant as specified in its charter)
Delaware 13-3672336
(State or Other Juris- (I.R.S. Employer
diction of Incorporation) Identification No.)
Two World Financial Center, Building B, New York, New York 10281
(Address of Principal Executive Office)
Registrant's telephone number, including area code: 212-667-9300
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: 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 __
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 definitive 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.
Aggregate market value of voting stock held by non-affiliates of the
Registrant as of December 31, 1996. Not applicable.
Number of shares of common stock outstanding as of December 31, 1996.
Not applicable.
<PAGE>
Table of Contents
PART I
Item 1. Business..................................................3
Item 2. Properties................................................3
Item 3. LegalProceedings..........................................3
Item 4. Submission Of Matters To A Vote Of Security Holders.......3
PART II
Item 5. Market For Registrant's Common Equity And Related Shareholder
Matters.................................................3
Item 6. Selected Financial Data...................................3
Item 7. Management's Discussion And Analysis Of Financial Condition
And Results Of Operations...............................4
Item 8. Financial Statements And Supplementary Data...............4
Item 9. Changes In And Disagreements With Accountants On
Accounting And Financial Disclosure.....................4
PART III
Item 10. Directors And Executive Officers Of The Registrant.......4
Item 11. Executive Compensation...................................4
Item 12. Security Ownership Of Certain Beneficial Owners And
Management..............................................4
Item 13. Certain Relationships And Related Transactions...........4
PART IV
Item 14. Exhibits, Financial Statement Schedules And Reports On
Form 8-K................................................4
Signatures........................................................4
Exhibit Index.....................................................4
<PAGE>
PART I
ITEM 1. BUSINESS
This Annual Report on Form 10-K relates to the Trust Fund
formed, and the Commercial Mortgage Pass-Through Certificates, Series
1996-MD-V issued, pursuant to a Pooling and Servicing Agreement, dated
as of April 1, 1996 (the "Pooling and Servicing Agreement"), by and
among Nomura Asset Securities Corporation (the "Company"), as
depositor, AMRESCO Management, Inc., as servicer, LaSalle National Bank,
as trustee, and ABN AMRO Bank, N.V., as fiscal agent. The Certificates
have been registered pursuant to the Act under a Registration Statement
on Form S-3 (No. 33-48481) (the "Registration Statement").
Capitalized terms used herein and not defined have the same
meanings ascribed to such terms in the Pooling and Servicing Agreement.
This Annual Report is being filed by the Servicer, in its
capacity as such under the Pooling and Servicing Agreement, on behalf of
Registrant. The information contained herein has been supplied to
the Servicer by one or more of the Borrowers or other third parties
without independent review or investigation by the Servicer. Pursuant
to the Pooling and Servicing Agreement, the Servicer is not responsible
for the accuracy or completeness of such information.
ITEM 2. PROPERTIES
Not applicable
ITEM 3. LEGAL PROCEEDINGS
Except for claims arising in the ordinary course of business and
which are covered by liability insurance, there are no material pending
legal proceedings involving the Trust Fund, the Mortgages comprising the
Trust Fund or the Trustee, the Special Servicer or the Servicer with
respect to or affecting their respective duties under the Pooling and
Servicing Agreement.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of Certificateholders during
the fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
There was one registered holder of the Certificate representing an
equity interest in the Trust as of December 31, 1996. To the
Registrant's knowledge, as of that date, there was no principal market
in which the Certificates representing an equity interest in the Trust
were traded.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF A FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not applicable.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
The information required by Items 10, 11, 12 and 13 is not
applicable as the trust fund does not have directors or officers and
Certificateholders have no right to vote (except with respect to
required consents to certain amendments to the Pooling and Servicing
Agreement and upon certain events of default) or control the Trust
Fund.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K
(a) 1. Servicer's Annual Statement of Compliance for the period
ended 12/31/96.
2. Servicer's Independent Accountant's Report on Servicer's
servicing activities.
(b) Current Reports on Form 8-K for the Trust were filed on May 24,
June 24, July 24, August 23, September 23, October 24, November
22 and December 19, 1996.
(c) No consent of auditors with respect to the audit reports filed
herewith are required.
<PAGE>
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 behalf of the Registrant by the undersigned
thereunto duly authorized.
AMRESCO MANAGEMENT, INC., IN
ITS CAPACITY AS SERVICER UNDER
THE POOLING AND SERVICING
AGREEMENT ON BEHALF OF NOMURA ASSET
SECURITIES CORPORATION
REGISTRANT
By: /s/ William J. Sweeney, Jr.
Name: William J. Sweeney, Jr.
Title: Vice President
By: /s/ John W. Benson
Name: John W. Benson
Title: Assistant Secretary and Counsel
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
99.1 Servicer's Annual Statement of Compliance
99.2 Servicer's Independent Accountants' Report on Servicer's servicing
activities
EXHIBIT 99.1
SERVICER'S ANNUAL STATEMENT
OF COMPLIANCE
March 13, 1997
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED
LaSalle National Bank
135 South LaSalle Street
Suite 1740
Chicago, Illinois 60603
Attention: Asset Backed Securities Trust Services -- Nomura Mega 5
Ladies & Gentlemen:
Reference is made to the Pooling and Servicing Agreement dated as of
April 1, 1996, among Nomura Asset Securities Corporation, as Depositor,
AMRESCO Management, Inc., ("AMRESCO") as Servicer, LaSalle National
Bank, as Trustee, and ABN AMRO Bank, N.V., as Fiscal Agent, entered into
in connection with Nomura Asset Securities Corporation Commercial
Mortgage Pass-Through Certificates, Series 1996-MDV (the "PSA").
As Senior Vice President of AMRESCO, I have delegated to specified
officers ("Officers") the responsibility for reviewing and monitoring
the activities of AMRESCO, and of our performance under the PSA.
Accordingly, pursuant to the terms of Section 3.14 of the PSA and in
accordance with certifications made to me by each of the Officers,
AMRESCO certifies the following:
(1) A review of the activities of AMRESCO for the period from April 1,
1996 to December 31, 1996, and of its performance under this PSA has
been made under the supervision of the Officers, who have in turn
been under my supervision;
(2) To the best of my knowledge and the Officers' knowledge, based on
such review, AMRESCO has fulfilled its obligations as Servicer in all
material respects under the PSA throughout the period from April 1,
1996 to December 31, 1996;
(3) No Subservicers were used by AMRESCO with respect to its duties under
this PSA during the period from April 1, 1996 to December 31, 1996;
and
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LaSalle National Bank
March 13, 1997
Page 2
(4) To the best of my knowledge and the Officers' knowledge, AMRESCO has
not received any notice regarding the qualification, or challenging
the status, of the Series 1996-MDV Upper-Tier REMIC or Lower-Tier
REMIC as a REMIC from the Internal Revenue Service or any other
governmental agency or body.
Please refer to the enclosed independent accountants' report dated
February 7, 1997, delivered pursuant to Section 3.15 of the PSA, which
discusses the results of their review of our activities under this PSA
and which is incorporated herein by reference.
Very truly yours,
/s/ Daniel B. Kirby
Daniel B. Kirby
Senior Vice President
AMRESCO Management, Inc.
Enclosures
cc: Nomura Asset Securities Corporation
2 World Financial Center
Building B, 21st Floor
New York, New York 10281-1198
Attention: Perry Gershon
Sheryl McAfee
Duff & Phelps Credit Rating Co.
55 East Monroe Street, 35th Floor
Chicago, Illinois 60603
Attention: Structured Finance-
Commercial Real Estate Monitoring
Fitch Investors Service, L.P.
One State Street Plaza
New York, New York 10004
Attention: Commercial Mortgage Surveillance
<PAGE>
LaSalle National Bank
March 13, 1997
Page 3
Enclosures
cc: Standard & Poor's Ratings Services
25 Broadway
New York, New York 10004
Attention: Commercial Mortgage Surveillance
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, NY 10038
Attention: Anna H. Glick, Esq.
EXHIBIT 99.2
SERVICER'S INDEPENDENT ACCOUNTANT'S REPORT
ON SERVICER'S SERVICING ACTIVITIES
Deloitte & Touche LLP
Suite 1600
Texas Commerce Tower
2200 Ross Avenue
Dallas, Texas 75201-6778
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors of AMRESCO Management, Inc.:
We have examined management's assertion about AMRESCO
Management, Inc.'s, including its division AMRESCO Services
("AMRESCO"), compliance with AMRESCO's servicing standards
identified in the Appendix as of and for the year ended
December 31, 1996, included in the accompanying management
assertion. Such standards were established by AMRESCO's
management based on the Mortgage Bankers Association of
America's Uniform Single Attestation Program for Mortgage
------------------------------------------------
Bankers (USAP). Management is responsible for AMRESCO's
- -------
compliance with these servicing standards. Our
responsibility is to express an opinion on management's
assertion about the entity's compliance based on our
examination.
Our examination was made in accordance with standards
established by the American Institute of Certified Public
Accountants and, accordingly, included examining, on a test
basis, evidence about AMRESCO's compliance with the servicing
standards and performing such other procedures as we
considered necessary in the circumstances. We believe that
our examination provides a reasonable basis for our opinion.
Our examination does not provide a legal determination on
AMRESCO's compliance with the servicing standards or its
servicing agreements.
In our opinion, management's assertion that AMRESCO complied
with its established servicing standards identified in the
Appendix as of and for the year ended December 31, 1996, is
fairly stated, in all material respects.
February 7, 1997
- 1 -
<PAGE>
February 7, 1997
As of and for the year ended December 31, 1996 AMRESCO
Management, Inc., has complied in all material respects with
the servicing standards set forth in the Appendix. Such
standards were established by AMRESCO Management, Inc. based on
the Mortgage Bankers Association of America's Uniform Single
--------------
Attestation Program for Mortgage Bankers. As of and for this
- ----------------------------------------
same period, AMRESCO Management, Inc had in effect a fidelity
bond in the amount of $10,000,000, errors and omissions
liability coverage in the amount of $5,000,000 and mortgage
impairment protection in the amount of $10,000,000 increased to
$20,000,000 as of September 30, 1996.
/s/ Daniel B. Kirby
Daniel B. Kirby, Senior Vice President
AMRESCO Services Group
/s/ Donnie M. Skidmore
Donnie M. Skidmore
Senior Vice President
AMRESCO, INC.
/s/ Ronald B. Kirkland
Ronald B. Kirkland, Vice President and
Chief Accounting Officer
AMRESCO, INC.
<PAGE>
APPENDIX
AMRESCO MANAGEMENT, INC. SERVICING STANDARDS
I. CUSTODIAL BANK ACCOUNTS
1. Reconciliations shall be prepared on a monthly basis for
all custodial bank accounts and related bank clearing
accounts. These reconciliations shall:
-be mathematically accurate;
-be prepared within forty-five (45) calendar days
after the cutoff date;
-be reviewed and approved by someone other than the
person who prepared the reconciliation; and
-document explanations for reconciling items. These
reconciling items shall be resolved within ninety (90)
calendar days of their original identification.
2. Funds of the servicing entity shall be advanced in cases
where there is an overdraft in an investor's or a
mortgagor's account.
3. Each custodial account shall be maintained at a federally
insured depository institution in trust for the
applicable investor.
4. Escrow funds held in trust for a mortgagor shall be
returned to the mortgagor within thirty (30) calendar
days of payoff of the mortgage loan.
II. MORTGAGE PAYMENTS
1. Scheduled mortgage payments shall be deposited into the
custodial bank accounts and related bank clearing
accounts within two business days of receipt.
2. Scheduled mortgage payments made in accordance with the
mortgagor's loan documents shall be posted to the
applicable mortgagor records within two business days of
receipt.
3. Scheduled mortgage payments shall be allocated to
principal, interest, insurance, taxes or other escrow
items in accordance with the mortgagor's loan documents.
4. Mortgage payments identified as loan payoffs or other
nonscheduled payments shall be allocated in accordance
with the mortgagor's loan documents.
III. DISBURSEMENTS
1. Disbursements made via wire transfer on behalf of a
mortgagor or investor shall be made only by authorized
personnel.
2. Disbursements made on behalf of a mortgagor or investor
shall be posted within two business days to the
mortgagor's or investor's records maintained by the servicing
entity.
<PAGE>
3. Tax and insurance payments shall be made on or before the
penalty or insurance policy expiration dates, as
indicated on tax bills and insurance premium notices,
respectively, provided that such support has been
received by the servicing entity at least thirty (30)
calendar days prior to these dates.
4. Any late payment penalties paid in conjunction with the
payment of any tax bill or insurance premium notice
shall be paid from the servicing entity's funds and not
charged to the mortgagor, unless the late payment was
due to the mortgagor's error or omission.
5. Amounts remitted to investors per the servicer's investor
reports shall agree with canceled checks, or other form
of payment, or custodial bank statements.
6. Unused checks shall be safeguarded so as to prevent
unauthorized access.
IV. INVESTOR ACCOUNTING AND REPORTING
1. The servicing entity's investor reports shall agree with,
or reconcile to, investors' records on a monthly basis
as to the total unpaid principal balance and number of
loans serviced by the servicing entity.
V. MORTGAGOR LOAN ACCOUNTING
1. The servicing entity's mortgage loan records shall agree
with, or reconcile to, the records of mortgagors with
respect to the unpaid principal balance on a monthly
basis.
2. Adjustments on ARM loans shall be computed based on the
related mortgage note and any ARM rider.
3. Escrow accounts shall be analyzed, in accordance with the
mortgagor's loan documents, on an annual basis or as
required by the servicing agreement.
4. Interest on escrow accounts shall be paid, or credited,
to mortgagors in accordance with the servicing
agreements.
VI. DELINQUENCIES
1. Records documenting collection efforts shall be
maintained during the period a loan is in default and
shall be updated at least monthly. Such records shall
describe the entity's activities in monitoring
delinquent loans including, for example, phone calls,
letters and mortgage payment rescheduling plans.
VII. INSURANCE POLICIES
1. A fidelity bond and errors and omissions policy shall be
in effect on the servicing entity throughout the
reporting period in the amount of coverage represented to
investors in management's assertion.
<PAGE>
ATTACHMENT
Following is a list of the securitized servicing contracts
which are covered by the attached letters.
Contract Date Reference Name Seller, Depositor or Other
Primary Party
August 1, 1991 RTC 1991 M-1 Resolution Trust Corporation
November 1, 1991 RTC 1991 M-5 Resolution Trust Corporation
March 1, 1992 RTC 1992 C-2 Resolution Trust Corporation
April 1, 1992 RTC 1992 C-3 Resolution Trust Corporation
September 1, RTC 1992 C-6 Resolution Trust Corporation
1992
November 1, 1992 RTC 1992 C-8 Resolution Trust Corporation
January 1, 1993 RTC 1993 C-1 Resolution Trust Corporation
March 15, 1993 Investors Savings Nationsbank of Virginia, N.A.
June 3, 1993 Trinet Nomura Asset Capital
Corporation
August 12, 1993 Ross Park Mall Penn Ross Joint Venture
September 10, Salomon/Aetna Salomon Brothers Mortgage
1993 Securities VII
October 26, 1993 Crown American Kidder Peabody Acceptance
Corp. I
November 12, DLJ DLJ Mortgage Acceptance Corp.
1993
December 1, 1993 New England New England Mutual Life
Insurance Company
February 1, 1994 Pierrepont Nomura Asset Securities Corp.
March 1, 1994 Excel Excel Credit Corporation
April 5, 1994 Freehold Raceway Fremall Finance, Inc.
Mall
June 1, 1995 Nationsbanc/FNMA Nationsbanc Mortgage Capital
Corp.
August 1, 1995 Lehman/SASCO 1995 Structured Asset Securities
C-3 Corp.
August 15, 1995 Lakewood Mall Lakewood Mall Finance Company
September 1, OPERF - Securitized Oregon Commercial Mortgage,
1995 Inc. 1995-1
October 1, 1995 Nomura Megadeal IV Asset Securitization
Corporation
<PAGE>
Contract Date Reference Name Seller, Depositor or Other
Primary Party
October 24, 1994 BT/SAP Pool C Assoc. Bankers Trust/Sterling
November 1, 1994 RTC 1994-C2 RTC
June 17, 1994 Argo Loan/REO O'Connor Group
June 1, 1994 BCS/Centerbank Cargill
October 30, 1992 RTC 1992-CHF RTC
March 31, 1994 Northstar Cargill
Acquisition
December 17, Commercial Asset Cargill/Nomura
1992 Trust I
December 22, Manulife Cargill
1994
February 7, 1995 MBLAC NY REO Assoc. Bankers Trust/Sterling & RTC
December 18, RTC Mortgage Trust Bankers Trust/Sterling & RTC
1992 1992-N1
January 31, 1994 RTC Mortgage Trust Bankers Trust/Sterling & RTC
1994-N1
December 15, RTC Mortgage Trust Bankers Trust/Sterling & RTC
1994 1994-N2
October 5, 1993 RTC Mortgage Trust Bankers Trust/Sterling & RTC
1993-N3
July 1, 1994 Provident Life & Provident
Accident
July 22, 1993 S.J. Partners Cargill
June 9, 1995 CS First Boston First Boston
June 9, 1995 Praedium Pacific First Boston/Praedium Pacific
April 16, 1993 S. Western Comm. Cargill/Nomura
Asset Tr.
July 1, 1995 Bedrock Nomura
November 29, ACP Mortgage O'Connor Group
1994
November 1, 1994 J.P. Morgan Comm. J.P. Morgan/Morgan Guaranty
Mortgage
February 7, 1995 MBL-Bankers Trust Bankers Trust
Co.
February 25, Meritor Bankers Trust
1994
<PAGE>
Contract Date Reference Name Seller, Depositor or Other
Primary Party
July 1, 1995 JP Morgan 1995 C-1 J.P. Morgan Commercial
Mortgage Finance Corporation
Series 1995-C1
January 1, 1996 JP Morgan 1996 C-2 J.P. Morgan Commercial
Mortgage Finance Corporation
Series 1996-C2
June 1, 1996 JP Morgan 1996 C-3 J.P. Morgan Commercial
Mortgage Finance Corporation
Series 1996-C3
April 2, 1996 Nomura Megadeal V Nomura Asset Securities
Corporation
May 1, 1996 NationsLink 1996-1 NationsLink Funding
Corporation
May 29, 1996 Equitable S/A 174 Equitable Life Assurance
Society of the U.S.
June 28, 1996 Colonial Realty LP Colonial Realty Limited
Partnership
July 1, 1996 Security Capital Security Capital Atlantic
Multifamily, Inc.
August 1, 1996 Crystal Mortgage Crystal Mortgage
1996-1 Certificates, Series 1996-1
October 1, 1996 SASCO 1996 C-1 Structured Asset Securities
Corporation, Series 1996-C1
October 23, 1996 Nomura 1996 D-3 Asset Securitization
Corporation
November 25, DLJ Hospitality Hospitality Properties
1996 1996 C-1 Mortgage Acceptance
Corporation Series 1996-C1
December 17, Nomura Megadeal VI Asset Securitization
1996 Corporation
December 17, Mills Corporation Potomac Gurnee Finance
1996 Corporation
