SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1998
Commission File Number 33-42666
COLLATERALIZED MORTGAGE SECURITIES CORPORATION
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(Exact name of registrant as specified in its charter)
Maryland 13-3251782
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(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
11 Madison Avenue, New York, New York 10010
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 212-325-1811
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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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
10,000 shares of common stock
outstanding as of November 9, 1998
<PAGE>
COLLATERALZED MORTGAGE SECURITIES CORPORATION AND SUBSIDIARY
INDEX
Page
Number
------
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition as of
September 30, 1998 and December 31, 1997 3
Consolidated Statements of Operations for the Nine Months
Ended September 30, 1998 and 1997 4
Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission of Matters to a Vote of Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8, 9
SIGNATURE 10
INDEX TO EXHIBITS 11
Page 2
<PAGE>
COLLATERALIZED MORTGAGE SECURITIES CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------- ------------
(unaudited)
(in thousands, except par value
and share data)
<S> <C> <C>
Assets:
Cash $ 12 $ 12
Receivable from Credit Suisse First Boston
Management Corporation 1 1
--------- ----------
Total Assets $ 13 $ 13
========= ==========
Liabilities and Stockholder's Equity:
Accrued expenses $ - $ -
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Total Liabilities - -
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Stockholder's Equity:
Common stock and paid in capital, $0.1 par value
(authorized 15,000,000 shares; issued 10,000
shares at September 30, 1998 and December 31,1997) 13 13
--------- ----------
Total Liabilities and Stockholder's Equity $ 13 $ 13
========= ==========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
Page 3
<PAGE>
COLLATERALIZED MORTGAGE SECURITIES CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, 1998 September 30, 1997
------------------------ -------------------------
(in thousands)
<S> <C> <C>
Revenues:
Commitment fee and miscellaneous income $ - $ -
------------------------ -------------------------
- -
------------------------ -------------------------
Expenses:
General and administrative expenses - -
------------------------ -------------------------
- -
------------------------ -------------------------
Income from operations before income tax
expense - -
------------------------ -------------------------
Income tax expense - -
------------------------ -------------------------
Net income $ - $ -
======================== =========================
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
Page 4
<PAGE>
COLLATERALIZED MORTGAGE SECURITIES CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, 1998 September 30, 1997
------------------------ -------------------------
(in thousands)
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ - $ -
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities: - -
---------------------- ------------------------
Net Cash Provided by Operating Activities - -
---------------------- ------------------------
Net increase in cash - -
Cash at beginning of period 12 12
---------------------- ------------------------
Cash at end of period $ 12 $ 12
====================== ========================
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
Page 5
<PAGE>
COLLATERALIZED MORTGAGE SECURITIES CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Description of Business
Collateralized Mortgage Securities Corporation (the "Company") and its wholly
owned subsidiary Asset Backed Securities Corporation ("ABSC") are wholly
owned subsidiaries of Credit Suisse First Boston Management Corporation
("FBSC"), which is a wholly owned subsidiary of Credit Suisse First Boston,
Inc., a privately owned holding company.
The foregoing financial statements are unaudited; however, in the opinion of
management, all adjustments (comprising only normal recurring accruals)
necessary for a fair presentation of the financial statements have been
included. A summary of the significant accounting policies is set forth in
Note 3 to the Company's December 31, 1997 Financial Statements contained in
the Company's 1997 Form 10-K.
Page 6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The principal activities of the Company and ABSC include (i) issuing and
selling collateralized mortgage obligations and asset backed obligations
(the "Bonds") and acquiring, owning, holding and pledging
mortgage-backed securities and receivables, (ii) conveying or
transferring all or any portion of the Companies' rights, title or
interest in the Bonds to various entities including trusts and (iii)
creating, acquiring, owning and selling residual interests in such
entities.
Results of Operations
The Company and ABSC recorded no gains or (losses) on the sale of Bonds
or beneficial interests in trusts for the nine months ended September
30, 1998 and September 30, 1997.
For the nine months ended September 30, 1998 and 1997, the Company had
no transactions.
Liquidity and Capital Resources
The Company and ABSC utilize FBSC to facilitate the settlement of all
transactions and maintain all excess cash with FBSC. Such cash is
available from FBSC on demand and does not earn interest. All gains and
losses are recognized by FBSC on each transaction.
Page 7
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
Not applicable
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) Exhibits:
Indentures (incorporated by reference to Exhibit 1 of Company's
Form 8-K dated February 14, 1992 for Series 1992-1) dated as of
January 1, 1987 as amended by Amendment No. 1 dated as of April
30, 1987 and Amendment No. 2 dated as of October 15, 1987, as
amended and restated as of August 1, 1988, between the Company
and State Street Bank and Trust Company, as Trustee.
Articles of Incorporation of the Company as amended as of January
7, 1986 (incorporated by reference to Exhibit 3.1 of the
Company's Form S-3 Registration Statement dated January 31,
1985).
By-laws of the Company as amended and restated as of January 7,
1986 (incorporated by reference to Exhibit 3.2 of the Company's
Form S-3 Registration Statement dated January 31, 1985).
Restated Certificate of Incorporation of Asset Backed Securities
Corporation (incorporated by reference to Exhibit 3.1 of the
Company's Form S-3 Registration Statement (No. 0-14811).
Page 8
<PAGE>
Item 6. Exhibits and Reports on Form 8-K (continued)
By-laws of Asset Backed Securities Corporation (incorporated by
reference to Exhibit 3.2 of the Company's Form S-3 Registration
Statement (No. 33-7382)).
Indenture, dated as of October 30, 1986, between Asset Backed
Securities Corporation and State Street Bank and Trust Company, the
Trustee (incorporated by reference to Exhibit 1 of the Current
Report on Form 8-K dated October 30, 1986).
(b) Reports on Form 8-K
None.
Page 9
<PAGE>
SIGNATURE
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.
Collateralized Mortgage
Securities Corporation
By: THOMAS M. ZINGALLI
-----------------------------
Thomas M. Zingalli
Controller and Principal
Accounting Officer
(Duly Authorized Officer and
Principal Accounting Officer)
Dated: November 9, 1998
Page 10
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit Page
- ------ ---------------------- ----
1 Indenture dated as of January 1, 1987 as amended by Amendment No. 1
dated as of April 30, 1987 and Amendment No. 2 dated as of October
15, 1987, as amended and restated as of August 1, 1988, between the
Company and State Street Bank and Trust Company, as Trustee. ****
1 Indenture, dated as of October 30, 1986, between Asset Backed
Securities Corporation and State Street Bank and Trust Company,
as Trustee. **
3.1 Articles of incorporation of the Company as amended as of
January 7, 1986. *
3.1 Restated Certificate of Incorporation of Asset Backed Securities
Corporation. ***
3.2 By-Laws of the Company as amended and restated as of
January 7, 1986. *
3.2 By-Laws of Asset Backed Securities Corporation. ****
* Incorporated by reference to the same Exhibits in Registration Statement
No. 0-13156 on Form 10 filed with the Securities and Exchange Commission
on January 31, 1985.
** Incorporated by reference to the same Exhibit in the Current Report
on Form 8-K filed with the Securities and Exchange Commission on
November 14, 1986.
*** Incorporated by reference to the same Exhibit in the Registration
Statement No. 0-014811 of the Company's Form S-3 filed with the
Securities and Exchange Commission on July 21, 1986.
**** Incorporated by reference to the same Exhibit in the Registration
Statement No. 33-7382 of the Company's Form S-3 filed with the
Securities and Exchange Commission on November 12, 1986.
Page 11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 12
<SECURITIES> 0
<RECEIVABLES> 1
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 13
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 13
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 13
<TOTAL-LIABILITY-AND-EQUITY> 13
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
