<PAGE> 1
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period Commission file number:
ended MARCH 31, 1996 814-97
-------------- ----------------------
ALLIED CAPITAL CORPORATION
------------------------------------------------------
(exact name of Registrant as specified in its charter)
MARYLAND 53-0245085
- ----------------------- ----------------------
(State or jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
C/O ALLIED CAPITAL ADVISERS, INC.
1666 K STREET, N.W.
9TH FLOOR
WASHINGTON, DC 20006
----------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (202) 331-1112
--------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 12 of 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods as 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
--- ----- -- -----
On May 3, 1996 there were 6,907,741 shares outstanding of the Registrant's
common stock, $1 par value.
<PAGE> 2
ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
FORM 10-Q INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<S> <C>
Consolidated Balance Sheet as of March 31, 1996
and December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Consolidated Statement of Operations - For the Three Months Ended
March 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Statement of Changes in Net Assets - For the Three Months
Ended March 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statement of Cash Flows - For the Three Months Ended
March 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . 9
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
<PAGE> 3
PART I - Financial Information
Item 1. Financial Statements
ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands, except number of shares)
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
-------------- -----------------
(unaudited)
<S> <C> <C>
Assets
Investments at Value:
Loans and debt securities (cost: 1996 - $95,893; 1995 - $ 89,688 $ 90,377
$98,119) . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities (cost: 1996 - $16,616; 1995 - $15,039) . . . 31,923 31,600
Other investment assets (cost: 1996 - $2,398; 1995 - $2,457). . 1,149 1,207
------- -------
Total investments . . . . . . . . . . . . . . . . . . . 122,760 123,184
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . 34,009 22,743
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . 3,484 2,341
------- ------
Total assets . . . . . . . . . . . . . . . . . . . . . . $160,253 $148,268
======= =======
Liabilities
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $86,300 $ 82,800
Dividends and distributions payable . . . . . . . . . . . . . . . 55 3,808
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . 4,109 3,479
------- -------
90,464 90,087
Redeemable preferred stock . . . . . . . . . . . . . . . . . . . 1,000 1,000
Commitments and Contingencies
Shareholders' Equity
Preferred Stock of wholly owned subsidiary, $100 par
value; 60,000 shares authorized, issued and
outstanding at 3/31/96 and 12/31/95 . . . . . . . . . . . . . 6,000 6,000
Common stock, $1 par value; 10,000,000 shares
authorized; 6,907,741 and 6,198,138 shares
issued and outstanding at 3/31/96 and 12/31/95 . . . . . . . 6,908 6,198
Additional paid-in capital . . . . . . . . . . . . . . . . . . 49,767 41,491
Notes receivable from sale of common stock . . . . . . . . . . (373) (401)
Net unrealized appreciation on investments . . . . . . . . . . 7,853 7,569
Distributions in excess of accumulated earnings . . . . . . . . (1,366) (3,676)
-------- --------
Total shareholders' equity . . . . . . . . . . . . . . 68,789 57,181
------- -------
Total liabilities and shareholders' equity . . . . . . $160,253 $148,268
======= =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
1
<PAGE> 4
ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
-----------------------------
1996 1995
---------- ----------
<S> <C> <C>
Investment income:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,334 $ 3,142
Dividends and other income . . . . . . . . . . . . . . . . . . . . 418 407
------- ------
Total investment income . . . . . . . . . . . . . . . . . . . . . 3,752 3,549
------- ------
Expenses:
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . 1,831 1,697
Investment advisory fee . . . . . . . . . . . . . . . . . . . . . . 734 637
Other operating expenses . . . . . . . . . . . . . . . . . . . . . 205 334
------- ------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . 2,770 2,668
------- ------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . 982 881
Net realized gains on investments . . . . . . . . . . . . . . . . . . 3,176 78
------- ------
Net investment income before net unrealized
appreciation on investments . . . . . . . . . . . . . . . . . . . . 4,158 959
Net unrealized appreciation on investments . . . . . . . . . . . . . 284 1,175
------- ------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,442 $ 2,134
======= ======
Earnings per common share . . . . . . . . . . . . . . . . . . . . . . $ 0.69 $ 0.34
======= ======
Weighted average number of common shares and
common share equivalents outstanding . . . . . . . . . . . . . . 6,343 6,154
======= ======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
2
<PAGE> 5
ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
--------------------------------------
1996 1995
--------- --------
<S> <C> <C>
Increase in net assets resulting from operations:
Net investment income . . . . . . . . . . . . . . . . . . . $ 982 $ 881
Net realized gains on investments . . . . . . . . . . . . . 3,176 78
Net change in unrealized appreciation on investments . . . 284 1,175
------- -------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . . . . . 4,442 2,134
Distributions to shareholders:
Common stock dividend . . . . . . . . . . . . . . . . . . . (1,793) (1,230)
Preferred stock dividend . . . . . . . . . . . . . . . . . (55) (55)
Capital Share Transactions . . . . . . . . . . . . . . . . . 9,014 122
------- -------
Net increase in net assets . . . . . . . . . . . . . . . . . 11,608 971
Net assets at beginning of the period . . . . . . . . . . . . 57,181 49,987
------- -------
Net assets at end of Period . . . . . . . . . . . . . . . . . 68,789 50,958
Preferred stock of wholly owned subsidiary . . . . . . . . . (6,000) (6,000)
------- -------
Net asset value available to common shareholders . . . . . . $ 62,789 $ 44,958
======= =======
Net asset value per common share . . . . . . . . . . . . . . $ 9.09 $ 7.29
======= =======
Common shares outstanding at end of period . . . . . . . . . 6,908 6,163
======= =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
3
<PAGE> 6
ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
------------------------------------
1996 1995
---------- ----------
<S> <C> <C>
Cash Flows From Operating Activities:
Net increase in net assets resulting from operations . . . . . . . . . $ 4,442 $ 2,134
Adjustments to reconcile net increase in net assets resulting from
operations to net cash provided by operating activities:
Net unrealized appreciation on investments . . . . . . . . . . . . . (284) (1,175)
Net realized gains on investments . . . . . . . . . . . . . . . . . (3,176) (78)
Changes in assets and liabilities . . . . . . . . . . . . . . . . . . . (513) 1,328
------- ------
Net cash provided by operating activities . . . . . . . . . . . . 469 2,209
------- ------
Cash Flows From Investing Activities:
Net decrease in investments . . . . . . . . . . . . . . . . . . . . 4,038 351
Net purchase of U.S. government securities . . . . . . . . . . . . . - (961)
Payments on notes receivable . . . . . . . . . . . . . . . . . . . . 28 -
------- ------
Net cash provided by (used in) investing activities . . . . . . . 4,066 (610)
------- ------
Cash Flows From Financing Activities:
Issuance of common shares . . . . . . . . . . . . . . . . . . . . . 8,200 -
Common distributions paid . . . . . . . . . . . . . . . . . . . . . (4,749) (1,108)
Preferred distributions paid . . . . . . . . . . . . . . . . . . . . (220) (220)
Proceeds from the issuance of OPIC debentures . . . . . . . . . . . 5,000 -
Payments on revolving line of credit . . . . . . . . . . . . . . . . (1,500) (880)
------- ------
Net cash provided by (used in) financing activities . . . . . . . 6,731 (2,208)
------- ------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . 11,266 (609)
Cash and cash equivalents, beginning of period . . . . . . . . . . . . . 22,743 6,609
------- ------
Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . $ 34,009 $ 6,000
======= ======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
4
<PAGE> 7
ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
NOTE 1. GENERAL
In the opinion of management, the accompanying unaudited consolidated
financial statements of Allied Capital Corporation and its
subsidiaries (the Company) contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial
position of the company as of March 31, 1996 and the results of
operations, changes in net assets, and cash flows for the periods
indicated. Certain information and footnote disclosures normally
included in the consolidated financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted. It is suggested that these consolidated
financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31,
1995 Annual Report. The results of operations for the three months
ended March 31, 1996 are not necessarily indicative of the operating
results to be expected for the full year. Certain reclassifications
have been made to the 1995 financial statements in order to conform to
the 1996 presentation.
NOTE 2. DIVIDENDS AND DISTRIBUTIONS
The Company's board of directors declared a $0.26 per share first
quarter dividend that was paid on March 29, 1996 to shareholders of
record as of March 15, 1996.
NOTE 3. DEBT
The Company had no borrowings outstanding under its revolving line of
credit agreement as of March 31, 1996.
The Company borrowed $5,000,000 under its loan agreement with the
Overseas Private Investment Corporation (OPIC) in order to finance its
first OPIC qualified investment. The OPIC loan bears interest at
6.48% as of March 31, 1996 and all principal is due at the maturity
date, which is February, 2006. In addition, OPIC is entitled to
receive from the Company a contingent fee at maturity of the loan
equal to five percent of the return generated by the OPIC-related
investments in excess of seven percent.
NOTE 4. SHAREHOLDERS' EQUITY
The Company issued to the common stockholders at the close of business
on January 22, 1996, the record date, non-transferable subscription
rights that entitled record date stockholders to subscribe for and
purchase from the Company up to one authorized, but unissued share of
the Company's common stock for each seven subscription rights held.
The Company offered a total of 885,448 shares of common stock pursuant
to this offer. Stockholders who fully exercised their subscription
rights were entitled to the additional privilege of subscribing for
shares from the offering not acquired by exercise of subscription
rights.
The subscription price per common share was $13.11, which equaled 95
percent of the average of the last reported sale price of a share of
common stock on the Nasdaq National Market on February 27, 1996 (the
expiration date of the offer) and each of the four preceding business
days. Stockholders participating in the offering subscribed for
411,961 shares through the primary subscription and 251,749 shares
through the oversubscription privilege for a total of 663,710 shares.
The Company received net proceeds of $8,200,000 from the rights
offering after estimated expenses of $458,000, including a 2.5 percent
commission paid to eligible broker/dealers on each share sold as a
result of their soliciting efforts.
NOTE 5. COMMITMENTS AND CONTINGENCIES
Commitments. The Company had commitments to invest in various
existing and prospective portfolio companies, stand by letters of
credit and third party guarantees outstanding of $1,600,000
at March 31, 1996.
5
<PAGE> 8
ALLIED CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
Litigation. The Company is party to certain lawsuits in connection
with investments it has made to small businesses. While the outcome
of these legal proceedings cannot at this time be predicted with
certainty, management does not expect that these actions will have a
material effect upon the consolidated financial position of the
Company.
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
For the First Quarter Ended March 31, 1996 and 1995.
The net increase in net assets resulting from operations for the
quarter ended March 31, 1996 was $4.4 million, an increase of
108% over the net increase in net assets resulting from operations for
the quarter ended March 31, 1995. Earnings per common share was
$0.69 for the current quarter as compared to $0.34 per common share
for the comparable quarter of the prior year.
For the quarter ended March 31, 1996, net investment income increased
11% to $982,000 as compared to $881,000 for the comparable quarter of
1995. Total investment income increased 5.7% in the first quarter of
1996 as compared to the first quarter of 1995. This increase is
primarily attributable to the Company increasing its investments in
loans and debt securities, that earn a current return.
Total expenses increased 3.8% to $2.8 million for the quarter ended
March 31, 1996 from $2.7 million last year. Interest expense
increased 7.9% for the first quarter of 1996 as compared to the
comparable quarter of the previous year as a result of the Company's
outstanding borrowings increasing to $86.3 million from $76.1 million
at March 31,1995. The Company's investment advisory fee increased
approximately 15% to $734,000 for the quarter ended March 31, 1996
from $637,000 in the first quarter of 1995. This increase is the
result of the Company's growth in invested assets and total assets
from March 31, 1995. Other operating expenses decreased approximately
39% for the first quarter of 1996 as compared to 1995. Other
operating expenses were higher in the first quarter of 1995 due to
non-recurring legal fees related to litigation that was settled in
1995.
Net realized gains on investments were $3.2 million for the quarter
ended March 31, 1996. During the quarter the Company successfully
liquidated two equity investments in its portfolio that generated
significant gains.
LIQUIDITY AND CAPITAL RESOURCES
Total assets increased approximately $12 million to $160.3 million as
of March 31, 1996 from $148.3 million as of December 31, 1995. This
growth in total assets resulted primarily from the Company's
one-for-seven non-transferable rights offering, which netted
approximately $8.2 million in proceeds, and the completion of its
first qualified investment funded by its agreement with the Overseas
Private Investment Corporation.
Total investments as of March 31, 1996 decreased $0.4 million from
December 31, 1995 as total repayments and changes in investment
valuations during the first quarter of 1996 offset first quarter new
investments of $5 million. Cash and cash equivalents increased to $34
million as of March 31, 1996 from $22.7 million at December 31, 1995
due to the proceeds received from the rights offering and investment
liquidations.
The Company believes that it has adequate capital to continue to
satisfy its operating needs, commitments and other future investment
opportunities that may arise over the year.
7
<PAGE> 10
PORTFOLIO CHANGES
For the three months ended March 31, 1996, the Company's portfolio had
net unrealized appreciation of $284,000 due primarily to changes in
market prices for public equity investments and sales of certain other
portfolio investments.
The Company's public equity investments which appreciated
(depreciated) in value during the three months ended March 31, 1996
were:
<TABLE>
<CAPTION>
Unrealized
appreciation
(depreciation)
--------------
<S> <C>
Allied Capital Lending Corporation $1,681,000
DMI Furniture 127,000
Esquire Communications 90,000
Garden Ridge Corporation 444,000
Labor Ready 521,000
Nobel Education Dynamics 825,000
Quality Software Products (306,000)
</TABLE>
The sale of three portfolio investments resulted in unrealized
appreciation (depreciation) and the recognition of realized gains
(losses) during the three months ended March 31, 1996 as follows:
<TABLE>
<CAPTION>
Unrealized Realized
Appreciation Gain
(Depreciation) (Loss)
-------------- ------
<S> <C> <C>
Garden Ridge Corporation $(1,518,000) $ 1,692,000
June Broadcasting (1,948,000) 2,182,000
Providential 789,000 (789,000)
</TABLE>
In addition, the Company's investment in Williams Brothers depreciated
in value by $807,000. The remaining net increase in net unrealized
appreciation during the three months ended March 31, 1996 was
$386,000.
8
<PAGE> 11
Part II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company is not a defendant in any material pending legal
proceeding and no such material proceedings are known to be
contemplated.
Item 2. CHANGES IN SECURITIES
No material changes have occurred in the securities of the Registrant.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) List of Exhibits
11 Statement of Computation of Earnings Per Share
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
quarter ended March 31, 1996.
9
<PAGE> 12
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 thereunder duly authorized.
ALLIED CAPITAL CORPORATION
--------------------------
(Registrant)
/s/ Jon A. DeLuca
-----------------------------
Date: May 13, 1996 Jon A. DeLuca
------------ Executive Vice President and
Chief Financial Officer
10
<PAGE> 1
Allied Capital Corporation and Subsidiaries
Exhibit 11 Computation of Earnings Per Common Share
Form 10-Q
March 31, 1996
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
----------------------------
1995 1994
----------------------------
<S> <C> <C>
Primary Earnings Per Common Share:
Net Increase in Net Assets Resulting
from Operations $4,442,000 $2,134,000
Less: Dividends for Preferred Stock (55,000) (55,000)
---------------------------
Net Increase in Net Assets Resulting
from Operations Available to
Common Shareholders $4,387,000 $2,079,000
===========================
Weighted average number of common
shares outstanding 6,301,619 6,152,817
Weighted average number of common
shares issuable on exercise
of outstanding stock options 41,135 876
---------------------------
Weighted average number of common
shares and common share equivalents
outstanding 6,342,754 6,153,693
===========================
Earnings per Common Share $0.69 $0.34
===========================
Fully Diluted Earnings Per Common Share:
Net Increase in Net Assets Resulting
from Operations $4,442,000 $2,134,000
Less: Dividends for Preferred Stock (55,000) (55,000)
---------------------------
Net Increase in Net Assets Resulting
from Operations Available to
Common Shareholders $4,387,000 $2,079,000
===========================
Weighted average number of common
shares and common share
equivalents outstanding as computed for
primary earnings per share 6,342,754 6,153,693
Weighted average of additional
shares issuable on exercise
of outstanding stock options - -
---------------------------
Weighted average number of common
shares and common share equivalents
outstanding, as adjusted 6,342,754 6,153,693
===========================
Earnings per Common Share $0.69 $0.34
===========================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Allied
Capital Corporation and subsidiaries' consolidated balance sheet and
consolidated statements of operations, changes in net assets and cash flows and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<INVESTMENTS-AT-COST> 114,907
<INVESTMENTS-AT-VALUE> 122,760
<RECEIVABLES> 0
<ASSETS-OTHER> 37,493
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 160,253
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 86,300
<OTHER-ITEMS-LIABILITIES> 5,164
<TOTAL-LIABILITIES> 91,464
<SENIOR-EQUITY> 6,908
<PAID-IN-CAPITAL-COMMON> 49,767
<SHARES-COMMON-STOCK> 6,908
<SHARES-COMMON-PRIOR> 6,198
<ACCUMULATED-NII-CURRENT> (1,366)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,853
<NET-ASSETS> 68,789
<DIVIDEND-INCOME> 418
<INTEREST-INCOME> 3,334
<OTHER-INCOME> 0
<EXPENSES-NET> 2,770
<NET-INVESTMENT-INCOME> 982
<REALIZED-GAINS-CURRENT> 3,176
<APPREC-INCREASE-CURRENT> 284
<NET-CHANGE-FROM-OPS> 4,442
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,848
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 664
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 46
<NET-CHANGE-IN-ASSETS> 11,608
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (3,676)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 734
<INTEREST-EXPENSE> 1,831
<GROSS-EXPENSE> 2,770
<AVERAGE-NET-ASSETS> 62,985
<PER-SHARE-NAV-BEGIN> 8.26
<PER-SHARE-NII> .14
<PER-SHARE-GAIN-APPREC> .50
<PER-SHARE-DIVIDEND> .26
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.09
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 83,800
<AVG-DEBT-PER-SHARE> 12.13
</TABLE>
