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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 14, 2000
FBR ASSET INVESTMENT CORPORATION
(Exact name of registrant as specified in its charter)
VIRGINIA 1-15049 54-1873198
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(State or other jurisdiction of (Commission File Number) (I.R.S.Employer
incorporation) Identification No.)
Potomac Tower, 1001 Nineteenth Street North, Arlington, Virginia 22209
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (703) 469-1000
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ITEM 5. OTHER EVENTS
In November, 1999, FBR Asset Investment Corporation ("FBR Asset") made a
$20 million loan to Prime Retail, Inc. and Prime Retail, L.P. (together, "Prime
Retail") secured by equity interests in limited partnerships and limited
liability companies that own commercial real estate. The loan's original
maturity date, as previously extended, was June 30, 2000 and the loan bore
interest at 15% per annum. The maturity date was subsequently extended to
August 14, 2000, with an increased interest rate of 16% per annum for accrual
periods after June 30, 2000. As of the close of business on August 14, 2000,
Prime Retail was in default with respect to the loan as a result of its failure
to pay off the outstanding principal and accrued interest under the $20 million
loan. The Prime Retail loan is secured by 49.9% equity interests in four
subsidiaries of Prime Retail, L.P., each of which subsidiaries owns commercial
real estate subject to mortgage debt, and by a 100% equity interest in another
subsidiary of Prime Retail, L.P. which owns a retail factory outlet center
located in Puerto Rico that is unencumbered by mortgage debt. Prime Retail has
requested an additional short-term extension on the $20 million loan. FBR Asset
is considering the request and is also in the process of evaluating its other
alternatives, including possible foreclosure action. FBR Asset believes that
the value of its collateral currently is adequate to cover the entire amount of
Prime Retail's debt to FBR Asset, but there can be no assurance that the value
of the collateral will not decrease or that FBR Asset will be successful in
selling the collateral in a foreclosure sale for an amount equal to the amount
of Prime Retail's debt, particularly if local real estate market conditions in
Puerto Rico change.
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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 hereunto duly authorized.
FBR ASSET INVESTMENT CORPORATION
Date: August 15, 2000 By: /s/ William R. Swanson
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William R. Swanson
Executive Vice President
