<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
[ ] 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 333-74671-01
MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-2555119
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o BEC Funding LLC, 800 Boylston Street, 17th Floor, Boston MA 02199
- --------------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 617-369-6000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) 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 and 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 the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Firm
10-K or any amendment to this Form 10-K. [X]
The aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant as of March 15, 2000 was $0.
Information required to be filed pursuant to the requirements of Section 13
or 15(d) of the Securities and Exchange Act of 1934 was previously filed,
on a timely basis, in a combined report with BEC Funding LLC (Commission
File Number 333-74671). In response to a recent request from the SEC staff,
the information of the registrant is now being refiled under a separate and
distinct Commission file number.
<PAGE> 2
PART I
ITEM 1.
BUSINESS.
The Massachusetts RRB Special Purpose Trust BEC-1 ("the Trust") was established
on July 27, 1999 as a Delaware business trust. The Massachusetts Development
Finance Agency and the Massachusetts Health and Educational Facilities Authority
formed the Trust to issue bonds pursuant to certain provisions of Chapter 164 of
the Acts of the Massachusetts General Court of 1997 (the "Electric Industry
Restructuring Act"). The Trust issued $725,000,000 of Rate Reduction
Certificates ("certificates") on July 29, 1999 for the purpose of acquiring
related notes from BEC Funding LLC (the "Note Issuer"). The Massachusetts
Development Finance Agency, the Massachusetts Health and Educational Facilities
Authority and The Bank of New York (Delaware), a Delaware banking corporation,
acting as the Delaware Trustee, entered into a Declaration of Trust to form the
Trust. The Trust is not an agency nor instrumentality of The Commonwealth of
Massachusetts. The Trust has minimal assets other than the notes. The
Declaration of Trust does not permit the Trust to engage in any activities other
than holding the notes, issuing the certificates, and engaging in other related
activities.
Each class of certificates represents a fractional undivided beneficial interest
in a related class of notes issued by BEC Funding LLC, including all amounts due
and to become due under the related class of notes, and represents the right to
receive the payments on the related class of notes.
The Note Issuer, the Massachusetts Development Finance Agency, the Massachusetts
Health and Educational Facilities Authority, the Trust, the Delaware Trustee and
the certificate trustee have entered into a fee and indemnity agreement under
which the Note Issuer pays the Delaware trustee's and the certificate trustee's
reasonable compensation and reasonable fees and expenses. The fee and indemnity
agreement further provides that the Note Issuer will indemnify the Trust, the
Delaware trustee, the certificate trustee, the Massachusetts Development Finance
Agency, the Massachusetts Health and Educational Facilities Authority and the
Executive Office for Administration and Finance of The Commonwealth of
Massachusetts for, and hold them harmless against, among other things, any loss,
liability or expense incurred by them arising from the failure of any party to
perform its obligations under various transaction documents. Neither the
certificates, the notes or the property securing the notes is an obligation of
The Commonwealth of Massachusetts or any governmental agency, authority or
instrumentality of The Commonwealth of Massachusetts or of Boston Edison Company
or any of its affiliates, except for BEC Funding LLC, which is an affiliate of
Boston Edison Company.
The fiscal year of the Trust is the calendar year. Substantially all expenses of
the Trust are paid by the Note Issuer, BEC Funding LLC.
ITEM 2.
PROPERTIES
The Trust has no physical property. Its primary assets are the notes issued by
BEC Funding LLC.
ITEM 3.
LEGAL PROCEEDINGS.
None.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
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PART II
ITEM 5.
MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Trust does not have equity securities.
ITEM 6.
SELECTED FINANCIAL DATA.
The Trust was established on July 27, 1999 and commenced operations on July 29,
1999.
Total assets at December 31, 1999 amounted to $745,133,819.
Total Certificate obligations outstanding at December 31, 1999 amounted to
$725,000,000, of which $78,441,458 of Certificates are due within one year; of
this latter amount, $40,000,000 of Class A-1 certificates were redeemed in full
on their scheduled maturity date together with all accrued interest.
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION FOR THE PERIOD JULY 29, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 1999.
The Massachusetts RRB Special Purpose Trust BEC-1 was formed on July 27, 1999,
and issued certificates in the amount of $725,000,000 on July 29, 1999. The net
proceeds from the issuance of certificates were remitted to BEC Funding LLC in
exchange for $725,000,000 of Notes. BEC Funding LLC then remitted net proceeds
of approximately $719,837,000 to BECo in exchange for certain transition
property.
As of February 29, 2000, BECo has remitted to BEC Funding LLC approximately
$72,940,000 of non-bypassable reimbursable transition cost ("RTC") charges
collected. Such funds are held by the Note Trustee and are restricted in their
ultimate use for the debt service of BEC Funding LLC. Collections of RTC charges
billed by BECo and remitted to BEC Funding LLC are in accordance with original
estimates and are in an amount sufficient to meet debt service requirements due
on March 15, 2000. BEC Funding LLC redeemed $40,000,000 of its outstanding Class
A-1 certificates on their scheduled maturity date and simultaneously, the Trust
redeemed $40,000,000 of its outstanding Class A-1 Notes on their scheduled
maturity date. The Trust relies on timely remittances of adequate RTC
collections from BEC Funding LLC (which in turn relies on timely remittances of
RTC collections from BECo) in order to meet its debt service obligations; the
Trust believes it will continue to receive timely and adequate remittances of
RTC funds in order to meet all debt service obligations.
BEC Funding LLC is a special purpose, single member limited liability company
whose sole member is BECo, a provider of electric distribution services. BEC
Funding LLC is a wholly-owned subsidiary of BECo, which is a wholly-owned
subsidiary of BEC Energy, which is a wholly-owned subsidiary of NSTAR. NSTAR is
a holding company that was created through a merger between BEC Energy,
headquartered in Boston, Massachusetts, and Commonwealth Energy System,
headquartered in Cambridge, Massachusetts, effective August 25, 1999. BEC
Funding LLC had no significant activities in the period January 29, 1999 to July
29, 1999.
BEC Funding LLC was organized on January 29, 1999 under the laws of the State of
Delaware for the sole purpose of acquiring and holding transition property and
issuing notes secured by the transition property. The transition property is a
property right created under Massachusetts law that includes the right to access
and collect a non-bypassable charge, called an RTC charge, from customers of
BECo. The acquisition of such transition property was accomplished by BEC
Funding LLC issuing $725,000,000 of Notes to the Trust on July 29, 1999. The
notes were issued under an indenture between
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BEC Funding LLC and The Bank of New York, as note trustee (the "Note Trustee").
The separate financial statements of BEC Funding LLC present results of
operations and its financial condition as it operated as a subsidiary of BECo.
Those financial statements may not be indicative of the results that would have
been achieved had BEC Funding LLC operated as an unaffiliated entity.
BEC Funding LLC's is limited by its organizational documents from engaging in
any activities other than owning the transition property, issuing the notes
secured by the transition property and other limited collateral, and related
activities thereto. Accordingly, income statement effects were limited primarily
to income generated from the transition property, interest expense on the notes
and incidental interest income. The Trust is limited by its organizational
documents from engaging in any activities other than owning the notes, issuing
Rate Reduction Certificates secured by the notes, and activities related
thereto. Accordingly, income statement effects were limited primarily to income
generated from the notes and interest expense on the certificates.
The organizational documents and note indenture covenants also require that BEC
Funding LLC be operated in a manner intended to reduce the likelihood that it
would be consolidated in BECo's bankruptcy estate if BECo became a debtor in a
bankruptcy case.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Trust has exposure to credit risk for its notes receivable from the Note
Issuer, BEC Funding LLC, which is a wholly-owned subsidiary of BECo, which is a
wholly-owned subsidiary of BEC Energy, which is a wholly-owned subsidiary of
NSTAR. Neither the notes nor the property securing the notes is an obligation of
The Commonwealth of Massachusetts, or any governmental agency, authority or
instrumentality of The Commonwealth of Massachusetts or of BECo or any of its
affiliates, except for BEC Funding LLC. BEC Funding LLC is legally separate from
BECo. The assets and revenues of BEC Funding LLC, including, without limitation,
the transition property, are not available to creditors of BECo, BEC Energy or
NSTAR.
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ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1
(A SPECIAL PURPOSE ENTITY)
STATEMENT OF NET ASSETS AVAILABLE FOR TRUST ACTIVITIES
December 31, 1999
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current Assets:
Due from BEC Funding LLC:
Interest receivable $ 20,359,814
Notes receivable - current portion due in one year 78,441,458
------------
Total current assets 98,801,272
Due from BEC Funding LLC:
Long Term Notes receivable 646,332,547
------------
Total Assets $745,133,819
============
LIABILITIES
Current Liabilities:
Current Portion of Certificates outstanding $ 78,441,458
Interest Payable on Certificates outstanding 20,359,814
------------
Total current liabilities 98,801,272
Long Term Certificates outstanding, net
of unamortized debt discount 646,332,547
------------
Total Liabilities $745,133,819
------------
Net Assets Available for Trust Activities $ 0
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
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MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1
(A SPECIAL PURPOSE ENTITY)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR TRUST ACTIVITIES
for the period from July 27, 1999 (date of inception) to December 31, 1999
<TABLE>
<CAPTION>
<S> <C>
Additions:
Due from BEC Funding LLC $ 724,774,005
Interest Income 20,359,814
Deductions:
Certificates Outstanding $(724,774,005)
Interest Expense (20,359,814)
-------------
Net Assets Available for Trust Activities at December 31, 1999 $ -0-
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1
(A SPECIAL PURPOSE ENTITY)
NOTES TO FINANCIAL STATEMENTS
A. OVERVIEW
The Massachusetts RRB Special Purpose Trust BEC-1 ("the Trust") was
established on July 27, 1999 as a Delaware business trust. The
Massachusetts Development Finance Agency and the Massachusetts Health and
Educational Facilities Authority formed the Trust to issue bonds pursuant
to certain provisions of Chapter 164 of the Acts of the Massachusetts
General Court of 1997 (the "Electric Industry Restructuring Act"). The
Trust issued $725,000,000 of Rate Reduction Certificates ("certificates")
on July 29, 1999 for the purpose of acquiring related notes from BEC
Funding LLC (the "Note Issuer"). The Massachusetts Development Finance
Agency, the Massachusetts Health and Educational Facilities Authority and
The Bank of New York (Delaware), a Delaware banking corporation, acting as
the Delaware Trustee, entered into a Declaration of Trust to form the
Trust. The Trust is not an agency nor instrumentality of The Commonwealth
of Massachusetts. The Trust has minimal assets other than the notes. The
Declaration of Trust does not permit the Trust to engage in any activities
other than holding the notes, issuing the certificates, and engaging in
other related activities.
Each class of certificates represents a fractional undivided beneficial
interest in a related class of notes issued by BEC Funding LLC, including
all amounts due and to become due under the related class of notes, and
represents the right to receive the payments on the related class of notes.
The Note Issuer, the Massachusetts Development Finance Agency, the
Massachusetts Health and Educational Facilities Authority, the Trust, the
Delaware Trustee and the certificate trustee have entered into a fee and
indemnity agreement under which the Note Issuer pays the Delaware trustee's
and the certificate trustee's reasonable compensation and reasonable fees
and expenses. The fee and indemnity agreement further provides that the
Note Issuer will indemnify the Trust, the Delaware trustee, the certificate
trustee, the Massachusetts Development Finance Agency, the Massachusetts
Health and Educational Facilities Authority and the Executive Office for
Administration and Finance of The Commonwealth of Massachusetts for, and
hold them harmless against, among other things, any loss, liability or
expense incurred by them arising from the failure of any party to perform
its obligations under various transaction documents. Neither the
certificates, the notes or the property securing the notes is an obligation
of The Commonwealth of Massachusetts or any governmental agency, authority
or instrumentality of The Commonwealth of Massachusetts or of BEco or any
of its affiliates, except for BEC Funding LLC, which is an affiliate of
BECo.
The fiscal year of the Trust is the calendar year.
BASIS OF PRESENTATION
Substantially all expenses of the Trust are paid by the Note Issuer, BEC
Funding LLC. Revenues and expense are recorded on the accrual basis.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
REVENUE AND EXPENSE RECOGNITION
The Trust recognizes revenues, interest income and interest expense on the
notes, which are the only assets and liabilities of the Trust, on the
accrual basis.
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MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1
(A SPECIAL PURPOSE ENTITY)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
INCOME TAXES
The Trust is considered to be a grantor trust for income tax purposes and
accordingly there is no provision for income taxes.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles 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.
CONCENTRATION OF CREDIT RISK
The Trust has exposure to credit risk for its notes receivable from the
Note Issuer. BEC Funding LLC is a wholly-owned subsidiary of BECo, which is
a wholly-owned subsidiary of BEC Energy, which is a wholly-owned subsidiary
of NSTAR. Neither the notes nor the property securing the notes is an
obligation of The Commonwealth of Massachusetts, or any governmental
agency, authority or instrumentality of The Commonwealth of Massachusetts
or of BECo or any of its affiliates, except for BEC Funding LLC.
C. CERTIFICATES
The Trust issued $725,000,000 of Rate Reduction Certificates on July 29,
1999 pursuant to the certificate indenture among the Trust, the Delaware
trustee, and the certificate trustee. The certificates were issued in
minimum denominations of $1,000 and in integral multiples of that amount.
The certificates consist of five classes as summarized in the table below:
<TABLE>
<CAPTION>
Scheduled
Initial Certificate Final Final
Principal Interest Distribution Termination
Class Amount Rate Date Date
----- --------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
A-1 $108,500,000 5.99% 3/15/01 3/15/03
A-2 170,609,837 6.45% 9/15/03 9/15/05
A-3 103,390,163 6.62% 3/15/05 3/15/07
A-4 170,875,702 6.91% 9/15/07 9/15/09
A-5 171,624,298 7.03% 3/15/10 3/15/12
------------
Total $725,000,000
============
</TABLE>
The scheduled final distribution date for a class of certificates is the
date by which the Trust expects to distribute in full all interest on and
principal of that class of certificates. The final termination date for a
class of certificates is the legal maturity date of that class. The failure
to distribute principal of any class of certificates in full by the final
termination date for that class is an event of default, and the certificate
trustee may, and with the written direction of the holders of at least a
majority in principal amount of all outstanding certificates shall, declare
the unpaid principal amount of all outstanding notes and accrued interest
to be due and payable.
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MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1
(A SPECIAL PURPOSE ENTITY)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Interest on each class of certificates will accrue from its issuance date
at the interest rate set forth in the table above. Beginning March 15,
2000, the trust is required to distribute interest semiannually on March 15
and September 15 (or, if any distribution date is not a business day, the
following business day) of each year. On each distribution date, the
certificate trustee will distribute interest to the extent paid on the
related class of notes to the holders of each class of certificates as of
the close of business on the record date. The record date for any
distribution of interest on and principal of the certificates will be the
business day immediately before the distribution date. Each distribution
date will also be a payment date for interest on and principal of the
notes.
On each distribution date, the certificate trustee will distribute
principal as paid on the related class of notes to the holders of each
class of certificates as of the close of business on the record date.
Long-term Rate Reduction Certificate redemptions due in the years ended
December 31 in each of the next five years ended December 31, 2000, 2001,
2002, 2003, and 2004, are scheduled to be $78,441,458 (of which a scheduled
$40,000,000 payment was made on the scheduled maturity date), $62,428,264,
$70,225,942, $68,014,173, and $68,740,411, respectively. The estimated fair
market values at December 31, 1999 of the Class A-1, Class A-2, Class A-3,
Class A-4 and Class A-5 Rate Reduction Certificates was $108,022,600,
$168,613,702, $101,436,089, $168,022,077 and $167,659,776, respectively,
based upon quoted market prices for similar issues.
D. NOTES RECEIVABLE
BEC Funding LLC, the Note Issuer, has issued to the Trust notes in the
principal amount of $725,000,000, in exchange for the net proceeds from the
sale of the certificates by the Trust. Each class of notes secures the
payment of the related class of certificates and has the same principal
balance, interest rate, amortization schedule and legal maturity date as
its related class of certificates. The notes consist of five classes, in
the initial principal amounts and bearing the interest rates and having the
scheduled maturity and final maturity dates set forth in the table below:
<TABLE>
<CAPTION>
Initial Note Scheduled Final
Principal Interest Maturity Maturity
Class Amount Rate Date Date
----- --------- -------- --------- --------
<S> <C> <C> <C> <C>
A-1 $108,500,000 5.99% 3/15/01 3/15/03
A-2 170,609,837 6.45% 9/15/03 9/15/05
A-3 103,390,163 6.62% 3/15/05 3/15/07
A-4 170,875,702 6.91% 9/15/07 9/15/09
A-5 171,624,298 7.03% 3/15/10 3/15/12
------------
Total $725,000,000
============
</TABLE>
The scheduled maturity date for a class of notes is the date by which the
note issuer expects to distribute in full all interest on and principal of
that class of notes. The final maturity date for a class of notes is the
legal maturity date of that class.
INTEREST
Interest on each class of notes accrues from its issuance date at the
interest rate set forth in the table above. Beginning March 15, 2000, the
Note Issuer is required to pay interest semiannually on March 15
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MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1
(A SPECIAL PURPOSE ENTITY)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
and September 15 (or, if any payment date is not a business day, the
following business day) of each year, to the Trust. The Note Issuer will
pay interest on the notes prior to paying principal of the notes.
On each payment date, the Note Issuer will pay interest as follows:
- if there has been a payment default, any unpaid interest payable on
any prior payment dates, together with interest at the applicable note
interest rate on any of this unpaid interest; and
- accrued interest on the principal balance of each class of notes as of
the close of business on the preceding payment date, or the date of
the original issuance of the class of notes if applicable, after
giving effect to all payments made on the preceding payment date, or
the date of the original issuance of the class of notes if applicable.
If there is a shortfall in the amounts necessary to make these interest
payments, the note trustee will distribute interest pro rata to each class
of notes based on the outstanding principal amount of that class and the
applicable interest rate. The Note Issuer will calculate interest on the
basis of a 360-day year of twelve 30-day months.
PRINCIPAL
The Note Issuer will pay principal on each payment date to the holders of
the notes in accordance with the expected amortization schedule as set
forth in the prospectus.
The Note Issuer will not, however, pay principal on a payment date on any
class of notes if making the payment would reduce the principal balance of
a class to an amount lower than that specified in the expected amortization
schedule for that class on that payment date. If an event of default under
the note indenture has occurred and is continuing, the note trustee may
declare the unpaid principal amount of all outstanding notes and accrued
interest to be due and payable.
The expected amortization schedule for the principal of each class of notes
gives effect to the payments expected to be made on each payment date and
is based upon the issuance date of the notes on July 29, 1999 and also the
following:
- payments on the certificates are made on each distribution date,
commencing March 15, 2000;
- the servicing fee equals 0.05 percent annually of the initial
principal amount of the notes, or $362,500;
- there are no net earnings on amounts on deposit in the collection
account;
- the administration fee (which is $75,000 per year, payable
semiannually) and other ongoing operating expenses are estimated to be
approximately $220,000 per annum, and these amounts are payable in
arrears, and;
- payments arising from the property securing the notes are deposited in
the collection account as expected.
There can be no assurance that the principal balances of the classes of
notes receivable and the related classes of certificates outstanding will
be reduced at the rates expected. The actual rates of reduction in class
principal balances may be slower (but cannot be faster) than the expected
amortization schedule.
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MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1
(A SPECIAL PURPOSE ENTITY)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
UNAMORTIZED DEBT DISCOUNT
Unamortized debt discount in the amount of $225,995 is included (net) in
both Notes receivable and Certificates outstanding on the accompanying
Statement of Net Assets Available for Trust Activities.
The note trustee has established a collection account to hold amounts
remitted by the servicer of the property securing the notes. The notes are
secured primarily by transition property of the note issuer, which is the
right to assess and collect all revenues arising from a portion of the
transition charge included in the bills of all classes of retail users of
BECo's electric distribution system within its geographic service territory
as in effect on July 1, 1997. This portion of the transition charge, which
is a usage-based charge, is referred to as the reimbursable transition
costs ("RTC") charge. As of December 31, 1999, the RTC charge is
approximately 1.10 cents per kilowatt-hour.
THE NOTE ISSUER
BEC Funding LLC is a special purpose, single member limited liability
company whose sole member is BECo. BEC Funding LLC is a wholly-owned
subsidiary of BECo, which is a wholly-owned subsidiary of BEC Energy, which
is a wholly-owned subsidiary of NSTAR.
BEC Funding LLC was organized on January 29, 1999 under the laws of the
State of Delaware for the sole purpose of acquiring and holding transition
property which BEC Funding LLC acquired on July 29, 1999 from BECo. The
purchase price of such transition property was paid from net proceeds of
the notes issued to the Trust. The assets of BEC Funding LLC consist
primarily of transition property acquired from BECo.
Both BEC Funding LLC's organizational documents and covenants in the note
indenture restrict its business activities to financing, purchasing, owning
and managing transition property. The organizational documents and note
indenture covenants also require that BEC Funding LLC be operated in a
manner intended to reduce the likelihood that it would be consolidated in
BECo's bankruptcy estate if BECo became a debtor in a bankruptcy case.
BEC Funding LLC is legally separate from BECo. The assets and revenues of
BEC Funding LLC, including, without limitation, the transition property,
are not available to creditors of BECo nor BEC Energy nor NSTAR.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE
None.
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PART III
ITEM 10.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Bank of New York (Delaware), a Delaware banking corporation, acts as the
Delaware Trustee, pursuant to the Declaration of Trust that formed the Trust in
July 1999. The Trust has no executive officers or directors.
ITEM 11.
EXECUTIVE COMPENSATION
Not applicable.
ITEM 12.
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
Not applicable.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
PART IV
12
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ITEM 14.
EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K.
a) The following designated documents and exhibits are filed herewith
and/or incorporated by reference:
Statement of Net Assets Available for Trust Activities as of December
31, 1999; and Statement of Changes in Net Assets Available for Trust
Activities for the period July 27, 1999 (date of inception) to
December 31, 1999.
Exhibit 3.1 - Declaration of Trust (A)
Exhibit 4.1 - Note Indenture of BEC Funding LLC (A)
Exhibit 4.2 - Certificate Indenture (A)
Exhibit 4.3 - Rate Reduction Certificates (A)
Exhibit 10.1 - Transition Property Purchase and Sale Agreement (A)
Exhibit 10.2 - Transition Property Servicing Agreement (A)
Exhibit 10.3 - Note Purchase Agreement (A)
Exhibit 10.4 - Administration Agreement (A)
Exhibit 10.5 - Fee and Indemnity Agreement (A)
Exhibit 27.1 - Financial Data Schedule for the period July 27, 1999
(date of inception) to December 31, 1999.
Exhibit 99.1 - Issuance Advice Letter (A)
Exhibit 99.2 - Report of Independent Accountants
------------
(A) Incorporated by reference to the similarly titled exhibit to the
current report on Form 8-K filed by BEC Funding LLC on August 13,
1999.
b) Reports on Form 8-K
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There were no reports on Form 8-K filed in the fourth quarter of 1999.
14
<PAGE> 15
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1
---------------------------------------------
(Registrant)
By: The Bank of New York (Delaware),
as Delaware Trustee
Date: March 28, 2000 /s/ Thomas J. Provenzano
---------------------------------
Name: Thomas J. Provenzano
Title: Vice President
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Exhibit 99.2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
of Massachusetts RRB Special Purpose Trust BEC-1:
In our opinion, the accompanying statement of net assets available for trust
activities and statement of changes in net assets available for trust activities
present fairly, in all material respects, the net assets available for trust
activities of Massachusetts RRB Special Purpose Trust BEC-1 at December 31, 1999
and the changes in net assets available for trust activities for the period from
July 27, 1999 (date of inception) to December 31, 1999 in conformity with
accounting principles generally accepted in the United States. 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 audit. We conducted our audit of these statements in accordance with
auditing standards generally accepted in the United States, which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 26, 2000
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