SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
SEPTEMBER 30,1998 OR
|_| 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 1-14103
NB CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 52-2063921
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
125 West 55th Street, New York, New York 10019
(Address of principal executive offices) (Zip Code)
212-632-8532
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
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 __
Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by the court. Yes __ No __
Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at October 29, 1998
Common Stock
par value $0.01 per Share 100
<PAGE>
NB CAPITAL CORPORATION
Index
-----
Page
----
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet - September 30, 1998 and December 31, 1997 1
Statement of Income - Three-month period ended September 30,
1998 and Nine-month period ended September 30, 1998 2
Statement of Stockholders' Equity -
Nine-month period ended September 30, 1998 3
Statement of Cash Flows -
Nine-month period ended September 30, 1998 4
Notes to the financial statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
- --------------------------------------------------------------------------------
This report contains certain forward-looking statements and information relating
to NB Capital Corporation (the "Company" or "NB Capital") that are based on the
beliefs of the Company's management as well as assumptions made by and
information currently available to the Company's management. When used in this
report, the words "anticipate", "believe", "estimate", "expect" and similar
expressions, as they relate to the Company or the Company's management, are
intended to identify forward-looking statements. Such statements reflect the
current view of the Company's management with respect to future events and the
Company's future performance and are subject to certain risks, uncertainties and
assumptions. Should management's current view of the future or underlying
assumptions prove incorrect, actual results may vary materially from those
described herein as anticipated, believed, estimated or expected. The Company
does not intend to update these forward-looking statements.
References to $ are to United States dollars; references to C$ are to Canadian
dollars. As of September 30, 1998, the Canadian dollar exchange rate was
C$1.5312 = $1.00 and certain amounts stated herein reflect such exchange rate.
<PAGE>
NB CAPITAL CORPORATION
BALANCE SHEET
as of September 30, 1998 and December 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
(in US dollars) September 30, 1998 December 31, 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash $ 36,978,817 $ 20,003,943
Securities 20,215,243 --
Due from an affiliated company 8,963,621 4,504,564
Promissory notes 413,660,059 456,513,825
Accrued interest on securities 39,693 --
-------------------- --------------------
$ 479,857,433 $ 481,022,332
=================== ===================
Liabilities
Due to parent company $ 322,565 $ 548,297
Accounts payable 24,929 257,560
Income taxes payable -- 80,000
-------------------- --------------------
347,494 885,857
-------------------- --------------------
Stockholders' equity
Preferred stock, $0.01 par value per share;
10,000,000 shares authorized,
110 Senior preferred shares issued and paid 1 --
300,000 Series A shares issued and paid 3,000 3,000
Common stock, $0.01 par value per share;
1,000 shares authorized,
100 shares issued and paid 1 1
Additional paid-in capital 476,533,784 476,431,381
Retained earnings 2,973,153 3,702,093
-------------------- --------------------
479,509,939 480,136,475
-------------------- --------------------
$ 479,857,433 $ 481,022,332
=================== ===================
- ---------------------------------------------------------------------------------------------------------------
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
1
<PAGE>
NB CAPITAL CORPORATION
STATEMENT OF INCOME
For the three-month and nine-month period ended September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Three-month Nine-month
period ended period ended
(in US dollars) September 30, 1998 September 30, 1998
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenue
Interest income
Securities $ 260,529 $ 419,007
Promissory notes 8,803,757 27,469,414
Bank interest 499,723 1,351,171
-------------------- --------------------
9,564,009 29,239,592
-------------------- --------------------
Expenses
Servicing and advisory fees 178,589 989,756
Legal and other professional fees 161,863 464,302
-------------------- --------------------
340,452 1,454,058
-------------------- --------------------
Income before income taxes 9,223,557 27,785,534
Income taxes (recovery) -- (2,000)
-------------------- ---------------------
NET INCOME 9,223,557 27,787,534
Preferred stock dividends 6,270,330 18,814,381
-------------------- --------------------
Income available to common stockholders $ 2,953,227 $ 8,973,153
------------------- -------------------
Weighted average number of common shares outstanding 100 100
-------------------- --------------------
Earnings per common share - basic $ 29,532 $ 89,732
------------------- -------------------
- ----------------------------------------------------------------------------------------------------------------
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
2
<PAGE>
NB CAPITAL CORPORATION
STATEMENT OF STOCKHOLDERS' EQUITY
For the nine-month period ended September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
(in US dollars)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Senior Series A Additional
Preferred Preferred Common Paid-in Retained
Stock Stock Stock Capital Earnings Total
Stockholders' equity as
of December 31, 1997 $ -- $ 3,000 $ 1 $ 476,431,381 $ 3,702,093 $ 480,136,475
Issuance of
senior preferred stock 1 -- -- 329,999 -- 330,000
Net income -- -- -- -- 27,787,534 27,787,534
Dividends on
senior preferred stock and
series A preferred stock -- -- -- -- (18,814,381) (18,814,381)
Dividends on
common stock -- -- -- -- (9,702,093) (9,702,093)
Other issuance costs -- -- -- (227,596) -- (227,596)
------------ ------------ ------------ ------------ ------------ ------------
Stockholders' equity as 1 3,000 1 476,533,784 2,973,153 479,509,939
of September 30, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
3
<PAGE>
NB CAPITAL CORPORATION
STATEMENT OF CASH FLOWS
For the nine-month period ended September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
(in US dollars)
- -------------------------------------------------------------------------------------------------------
<S> <C>
OPERATING ACTIVITIES
Net income $ 27,787,534
Items not affecting cash resources
Due from an affiliated company (4,459,057)
Due to parent company (225,732)
Accounts payable (232,631)
Income taxes payable (80,000)
Accrued interest receivable on securities (39,693)
---------------------
22,750,421
---------------------
FINANCING ACTIVITIES
Issue of senior preferred stock 330,000
Other issuance costs (227,596)
Dividends (28,516,474)
---------------------
(28,414,070)
---------------------
INVESTING ACTIVITIES
Repayments of promissory notes 42,853,766
---------------------
Securities (20,215,243)
---------------------
22,638,523
INCREASE IN CASH 16,974,874
Cash position, at beginning of the year 20,003,943
---------------------
Cash position, at end of the nine month period ended September 30, 1998 $ 36,978,817
=====================
- -------------------------------------------------------------------------------------------------------
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
4
<PAGE>
NB CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(unaudited)
(in U.S. dollars)
1) Incorporation and nature of operations
NB Capital Corporation (the "Company") was incorporated in the State of
Maryland on August 20, 1997. The Company's principal business is to
acquire, hold, finance and manage mortgage assets. The Company issued,
through an Offering Circular dated August 22, 1997, $300 million of
preferred stock and simultaneously, National Bank of Canada, the parent
company, made a capital contribution in the amount of $183 million. The
Company used the aggregate net of proceeds of $477 million to acquire
promissory notes of NB Finance, Ltd., a wholly-owned subsidiary of
National Bank of Canada.
2) Significant accounting policies
Financial statements
The financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America and are
expressed in U.S. dollars.
Income taxes
The Company has elected to be taxed as a real estate investment trust
("REIT") under the Internal Revenue Code of 1986, as amended, and
accordingly is generally not liable for United States federal income
tax to the extent that it distributes at least 95% of its taxable
income to its stockholders, maintains its qualification as a REIT and
complies with certain other requirements.
Per share data
Basic earnings per share with respect to the Company for the nine-month
period ended September 30, 1998 are computed based upon the weighted
average number of common shares outstanding during the period. In
February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 128 "Earnings Per
Share". This pronouncement specifies the computation, presentation and
disclosure requirements for earnings per share. The Company has no
outstanding securities which are dilutive under this pronouncement.
5
<PAGE>
NB CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(unaudited)
(in U.S. dollars)
Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3) Promissory Notes
On September 3, 1997, the Company entered into loan agreements
evidenced by promissory notes with NB Finance, Ltd., an affiliated
company. The promissory notes are collateralized only by mortgage loans
which are secured by residential first mortgages and insured by the
Canada Mortgage and Housing Corporation.
The promissory notes consist of 16 notes with maturities ranging from
August 1999 to July 2001, at rates ranging from 6.90% to 9.77%, with an
average rate of approximately 8.40% per annum.
These rates approximate market interest rates for loans of similar
credit and maturity provisions and, accordingly, management believes
that the carrying value of the promissory notes receivable approximates
their fair value.
Promissory notes as of June 30, 1998 $431,488,358
Principal repayments 17,828,299
-----------------------------------------------------------------------
Promissory notes as of September 30, 1998 413,660,059
-----------------------------------------------------------------------
The scheduled remaining principal repayments are as follows:
1998 $ 4,278,339
1999 69,214,147
2000 181,310,948
2001 158,856,625
6
<PAGE>
NB CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(unaudited)
(in U.S. dollars)
4) Transactions with an affiliated company
During the three-month and nine-month period ended September 30, 1998,
the Company earned interest from NB Finance, Ltd. in the amount of
$8,803,757 and $27,469,414, respectively (see Note 3).
The amount of $8,963,621 due from an affiliated company as of September
30, 1998 represents interest and principal repayments due on the
promissory notes.
5) Transactions with the parent company
In September 1997, the Company entered into agreements with National
Bank of Canada in connection with the administration of the Company's
operations. The agreements are as follows:
Advisory agreement
In exchange for a fee equal to $25,000 per year, payable in equal
quarterly installments, National Bank of Canada will furnish advice and
recommendations with respect to all aspects of the business and affairs
of the Company. During the three-month and nine-month period ended
September 30, 1998, fees of $6,250 and $18,750, respectively, were
charged to the Company.
Servicing agreement
National Bank of Canada will service and administer the promissory
notes and the collateralized mortgage loans and will perform all
necessary operations in connection with such servicing and
administration.
National Bank of Canada will receive a monthly fee equal to one-twelfth
(1/12) of 0.25% per annum of the aggregate outstanding balance of the
collateralized mortgage loans as of the last day of each calendar
month. For the three-month and nine-month period ended September 30,
1998, the average outstanding balance of the collateralized mortgage
loans were $524,297,801 and $545,081,935, respectively. During the
three-month and nine-month period ended September 30, 1998, fees of
$172,339 and $971,006, respectively, were charged to the Company.
7
<PAGE>
NB CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(unaudited)
(in U.S. dollars)
Custodian agreement
National Bank of Canada will hold all documents relating to the
collateralized mortgage loans. During the nine-month period ended
September 30, 1998, no fee was charged to the Company.
6) Stockholders' equity
Common stock
The Company is authorized to issue up to 1,000 shares of $0.01 par
value common stock.
Preferred stock
The Company is authorized to issue up to 10,000,000 shares of $0.01 par
value preferred stock as follows:
300,000 shares classified as 8.35% Noncumulative Exchangeable Preferred
Stock, Series A, non-voting, ranked senior to the common stock and
junior to the Adjustable Rate Cumulative Senior Preferred Shares, with
a liquidation value of $1,000 per share, redeemable at the Company's
option on or after September 3, 2007, except upon the occurrence of
certain changes in tax laws in the United States of America and in
Canada, on or after September 3, 2002.
1,000 shares classified as Adjustable Rate Cumulative Senior Preferred
Shares, non-voting, ranked senior to the common stock and to the 8.35%
Noncumulative Exchangeable Preferred Stock, Series A, with a
liquidation value of $3,000 per share, redeemable at the Company's
option at any time and retractable at the holder's option on December
30, 2007 and every ten-year anniversary thereof.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
The Company's principal business objective is to acquire, hold, finance and
manage assets consisting of obligations secured by real property as well as
other qualifying REIT assets ("Mortgage Assets"). The Company has elected to be
taxed as a REIT under the Internal Revenue Code of 1986, as amended, and,
accordingly, is generally not liable for United States federal income tax to the
extent that it distributes at least 95% of its taxable income, subject to
certain adjustments, to its stockholders.
Results of operations:
The Company commenced its operations on August 20, 1997 and, accordingly, only
certain comparative information is available.
For the three-month and nine-month period ended September 30, 1998, the Company
reported net income of $9,223,557 and $27,787,534, respectively. Revenues, which
were comprised entirely of interest income, were $9,564,009 and $29,239,592,
respectively, and expenses were $340,452 and $1,452,058, respectively. Since the
Company has elected to be taxed as a REIT, no income tax was recorded during the
period. In connection with the reversal of a provision for income taxes
previously reserved by the Company, a $2,000 recovery was recognized during the
nine-month period ended September 30, 1998.
Ninety-four percent of revenues were derived from promissory notes (the "Initial
Mortgage Assets") issued by NB Finance, Ltd., an affiliated company ("NB
Finance"). The Initial Mortgage Assets issued by NB Finance are collateralized
by "Initial Mortgage Loans" that consist of pools of "Mortgage Loans" that
consist of residential first mortgages insured by Canada Mortgage and Housing
Corporation and which are secured by real property located in Canada. The
balance of the revenues result from interest on bank deposits and securities
investment (i.e., commercial paper of National Bank of Canada).
Expenses for the three-month period totaled $340,452 of which $178,589 represent
servicing and advisory fees paid to National Bank of Canada, the Company's
direct parent (the "Bank") pursuant to the Servicing Agreement, dated September
3, 1997, between the Bank and the Company (the "Servicing Agreement") and the
Advisory Agreement, dated September 3, 1997, between the Bank and the Company
(the "Advisory Agreement"), whereby the Bank performs all necessary operations
in connection with administering the Initial Mortgage Assets issued by NB
Finance and the Initial Mortgage Loans. Other fees include payment to the
transfer agent and external accounting fees.
On August 25, 1998, the Board of Directors of the Company declared dividends of,
in the aggregate, $6,270,330 on Preferred Stock (i.e., Adjustable Rate
Cumulative Senior Preferred Shares (the "Senior Preferred Shares") and 8.35%
Noncumulative Exchangeable Preferred
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
Stock, Series A (the "Series A Preferred Shares")) and a dividend of $2,000,000
on Common Stock. Such dividends were paid on September 30, 1998.
Capital Resources and Liquidity:
The Company's revenues are derived from its Mortgage Assets. As of September 30,
1998, US$414 million of Initial Mortgage Assets issued by NB Finance were
over-collateralized by the C$719 million ($469 million) of Initial Mortgage
Loans. The Company believes that the amounts generated from the payment of
interest and principal on such Initial Mortgage Loans will provide more than
sufficient funds to make full payments with respect to the Initial Mortgage
Assets issued by NB Finance and that such payments will provide the Company with
sufficient funds to meet its operating expenses and to pay quarterly dividends
on the Senior Preferred Shares and the Series A Preferred Shares. To the extent
that the cash flow from its Mortgage Assets exceeds those amounts, the Company
will use the excess to fund the acquisition of additional Mortgage Assets and
make distributions on the Common Stock.
The Company does not require any capital resources for its operations and,
therefore, it is not expected to acquire any capital assets in the foreseeable
future.
As at September 30, 1998, the Company had combined cash resources and securities
of $57,194,060 which represent 11.9% of total assets compared to $20,003,943 or
4.2% of total assets as at December 31, 1997. The increase in liquidity is
attributable to cash received in repayment of promissory notes. It is expected
that the Company will invest in additional Mortgage Assets during the fourth
quarter of 1998 or thereafter. The liquidity level is sufficient for the Company
to pay fees and expenses pursuant to the Servicing Agreement and the Advisory
Agreement.
The Company's principal short-term and long-term liquidity needs are to pay
quarterly dividends on the Senior Preferred Shares and the Series A Preferred
Shares, to pay fees and expenses of the Bank pursuant to the Servicing Agreement
and the Advisory Agreement, and to pay franchise fees and expenses of advisors,
if any, to the Company.
The Company does not have any indebtedness (current or long-term), other
material capital expenditures, balloon payment or other payments due on other
long-term obligations. No negative covenants have been imposed on the Company.
Year 2000
The Company does not believe that it has a material problem resulting from the
inability of computer programs to properly recognize a year that begins with
"20" instead of "19." Pursuant to the Advisory Agreement, the Bank administers
the day-to-day activities of the Company.
10
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
Pursuant to the Servicing Agreement, the Bank services the Mortgage Assets and
performs all necessary operations in connection with such servicing. The Company
does not independently maintain either information technology or non-information
technology systems. Accordingly, the Company does not believe that it has or
will have a material Year 2000 issue.
The Bank has formulated a detailed plan to address the Year 2000 issue. The Bank
expects to invest C$35 million prior to December 31, 1999 to modify its computer
software and hardware in relation to the Year 2000 issue. According to such
plan, "phase one" of the conversion, defined as conversion and the certification
as accurate of approximately 30% of the Bank's computer software and 20% of its
computer hardware, was completed by December 31, 1997. The Bank expects that
"phase two" of the conversion, defined as conversion and the certification as
accurate of approximately 95% of its computer software and 50% of its computer
hardware, should be completed by December 31, 1998. By March 31, 1999, the Bank
expects that "phase three" of the conversion, defined as conversion and
certification as accurate of all of its computer software and hardware, should
be complete. The plan and budget also include a "phase four" which entails
monitoring the conversion through the year 2000. All conversion, certification
and monitoring costs have been and will continue to be borne by the Bank.
Pursuant to an order of The Office of the Superintendent of Financial
Institutions Canada, NB Finance is prohibited from engaging in any business
activities other than the ownership of the Mortgage Loans and activities
incidental thereto. On September 3, 1997, the Company, the Bank and NB Finance
entered into the Mortgage Loan Assignment Agreement pursuant to which NB Finance
assigned its entire right, title and interest in, to and under the Mortgage
Loans to the Company and permits the Company to administer, perform and enforce
the Mortgage Loans. Pursuant to the Servicing Agreement, the Mortgage Loans are
serviced by the Bank. NB Finance does not independently maintain either
information technology or non-information technology systems. Accordingly, the
Company does not believe that NB Finance has or will have a material Year 2000
issue.
The Company maintains relationships with other third party service providers;
however, the Company does not consider the services received therefrom to be
material to its operations.
At this time, the Company believes that its most reasonably likely worst case
Year 2000 scenario would be a delay by NB Finance in making payments of
principal and interest to the Company when due, causing the Company to be unable
to meet its short-term liquidity needs. Although the Company believes that it is
unlikely that such scenario would occur, it has developed a contingency plan
pursuant to which it would obtain a cash advance from NB Finance, in an amount
approximating previous payments of principal and interest, in time to meet its
short-term liquidity requirements. Accordingly, at this time, the Company does
not believe that it would experience a material adverse effect as a result of
the occurrence of the most reasonably likely worst case Year 2000 scenario.
11
<PAGE>
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit No. Description
11 Computation of Earnings Per Share
27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter for which this
report is filed.
12
<PAGE>
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.
NB CAPITAL CORPORATION
Date November 13, 1998 /s/ Tom Doss
------------------ -------------------------------
Tom Doss
Chief Financial Officer and Treasurer
13
EXHIBIT 11
NB CAPITAL CORPORATION
COMPUTATION OF EARNINGS PER SHARE
Three-month Nine-month
period ended period ended
September 30, September 30,
1998 1998
Net income $ 9,223,557 $ 27,787,534
Deduct: Senior preferred
stock and series A preferred
stock dividends 6,270,330 18,814,381
----------- ------------
(A) $ 2,953,227 $ 8,973,153
Common share outstanding (B) 100 100
Earning per share (A/B) $ 29,532.27 $ 89,731.53
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27
NB CAPITAL CORPORATION
FINANCIAL DATA SCHEDULE
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NB CAPITAL
CORPORATION'S UNAUDITED BALANCE SHEET AS OF SEPTEMBER 30, 1998 AND UNAUDITED
STATEMENT OF INCOME FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1998 INCLUDED
IN NB CAPITAL CORPORATION'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED
SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001049551
<NAME> NB CAPITAL CORPORATION
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 36,978,817
<SECURITIES> 20,215,243
<RECEIVABLES> 422,663,373
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 479,857,433
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 479,857,433
<CURRENT-LIABILITIES> 347,494
<BONDS> 0
0
3,001
<COMMON> 1
<OTHER-SE> 479,506,937
<TOTAL-LIABILITY-AND-EQUITY> 479,857,433
<SALES> 0
<TOTAL-REVENUES> 9,564,009
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 340,452
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 9,223,557
<INCOME-TAX> 0
<INCOME-CONTINUING> 9,223,557
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,223,557
<EPS-PRIMARY> 29,532
<EPS-DILUTED> 29,532
</TABLE>
