SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form l0-Q
[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended _________________
or
[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from July 1, 1999 to November 26, 1999
------------ -----------------
Commission file number 33-26824
Bear Stearns Secured Investors Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3402173
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1601 Elm Street, Dallas, Texas 75201
(2l4) 754-8300
(Address, Including Zip Code, and Telephone Number,
Including Area Code of Registrant's Executive Offices)
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 twelve 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
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND
(b) OF FORM 10-Q AND THEREFORE IS FILING THIS FORM WITH THE REDUCED DISCLOSURE
FORMAT CONTEMPLATED THEREBY.
<PAGE>
BEAR STEARNS SECURED INVESTORS INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Financial Condition at November 26, 1999
(Unaudited) and June 30, 1999.
Statements of Operations (Unaudited) for the five-months ended
November 26, 1999 and November 27, 1998.
Statements of Cash Flows (Unaudited) for the five-months
ended November 26, 1999 and November 27, 1998.
Notes to Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K
Signature
<PAGE>
<TABLE>
BEAR STEARNS SECURED INVESTORS INC.
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
November 26, June 30,
1999 1999
----------------- -----------------
<S> <C> <C>
(Unaudited)
Assets
Cash and cash equivalents $ 1,000 $ 1,000
Receivable from affiliates 128,254 16,176,822
Other assets 686 686
----------------- -----------------
Total Assets $ 129,940 $ 16,178,508
================= =================
Liabilities
Payable to Parent $ - $ 16,358,688
Other liabilities - 165,000
----------------- -----------------
Total Liabilities - 16,523,688
Stockholder's Equity (Deficit)
Common Stock, $.01 par value;
1,000 shares authorized; 100 shares issued and outstanding 1 1
Paid-in capital 500,999 999
Accumulated deficit (371,060) (346,180)
----------------- -----------------
Total Stockholder's Equity (deficit) 129,940 (345,180)
----------------- -----------------
Total Liabilities and Stockholder's Equity $ 129,940 $ 16,178,508
================= =================
See Notes to Financial Statements.
</TABLE>
<PAGE>
BEAR STEARNS SECURED INVESTORS INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Five-Months Ended
---------------------------------------
November 26, November 27,
1999 1998
---------------- ----------------
Expenses
Interest $ 43,718 $ -
Other 140 651
---------------- ----------------
Total expenses 43,858 651
---------------- ----------------
Loss before income tax benefit (43,858) (651)
Income tax benefit (18,978) (284)
---------------- ----------------
Net loss $ (24,880) $ (367)
================ ================
See Notes to Financial Statements.
<PAGE>
BEAR STEARNS SECURED INVESTORS INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Five-Months Ended
------------------------------------
November 26, November 27,
1999 1998
---------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (24,880) $ (367)
Decrease in other liabilities (165,000) -
---------------- ---------------
Cash used in operating activities (189,880) (367)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease (increase) in receivable
from affiliate 16,048,568 (3)
(Decrease) increase in payable to Parent (16,358,688) 370
Capital contribution 500,000 -
---------------- --------------
Cash provided by financing activities 189,880 367
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 1,000 1,000
---------------- --------------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 1,000 $ 1,000
================ ==============
See Notes to Financial Statements.
<PAGE>
BEAR STEARNS SECURED INVESTORS INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1. Organization
Bear Stearns Secured Investors Inc. (the "Company"), a direct wholly owned
limited purpose finance subsidiary of The Bear Stearns Companies Inc. (the
"Parent"), was organized on November 26, 1986 as a Delaware corporation. The
Company's sole purpose is to issue and sell one or more series of collateralized
mortgage obligations ("CMO's") directly or through one or more trusts
established by it. In connection therewith, the Company provides management and
administrative services after the issuance of each CMO issued.
The Company's activities are limited to issuing CMO's that will be
collateralized by mortgage-backed certificates, whole residential or commercial
mortgage loans or participations therein, and, in connection therewith,
acquiring, owning, holding and pledging mortgage-backed certificates, whole
loans or commercial mortgage loans.
On January 18, 2000, the Parent's Board of Directors elected to change its
fiscal year-end to November 30 from June 30, effective with the year beginning
November 27, 1999, as announced in its Form 8-K filed on January 21, 2000. The
five-month period ended November 26, 1999 is the Company's "Transition Period."
This Transition Report on Form 10-Q presents results of the Company's operations
for the five-month periods ended November 26, 1999 and November 27, 1998.
The financial statements are prepared in conformity with generally accepted
accounting principles which require management to make estimates and assumptions
that affect the amounts reported in the consolidated financial statements and
accompanying notes. Actual results could differ from those estimates.
Note 2. Collateralized Mortgage Obligations
During the five-months ended November 26, 1999 and November 27, 1998 the Company
did not issue any CMO's.
The Company clears all of its securities transactions relating to the purchase
of the underlying collateral and issuance of CMO's through an affiliate. An
affiliate also acts as the principal underwriter for the Company's CMO
issuances.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Company's principal business activity is the issuing of collateralized
mortgage obligations ("CMO's") that are secured by mortgage-backed certificates,
whole residential or commercial mortgage loans or participations therein, and in
connection therewith, acquiring, owning, holding, and pledging mortgage-backed
certificates, whole residential or commercial mortgage loans. The Company also
derives revenues in its capacity as administrator during the life of the CMO
transactions where it originates and retains such servicing obligation.
The Company's level of activity and results of operations reflect the impact of
many factors in the issuance of CMO's, including securities market conditions,
the level of volatility of interest rates, competitive conditions and the size
and timing of transactions. In addition, results of operations for any
particular interim period may not be indicative of results to be expected for a
full year.
The Company had a net loss for the five-months ended November 26, 1999 and
November 27, 1998 of $24,880 and $367, respectively. Net losses are the result
of the Company incurring operating expenses with no earned revenue. The Company
did not issue any CMO's in each of the five-months ended November 26, 1999 and
November 27, 1998.
Year 2000 Issue
The Year 2000 issue was the result of legacy computer programs having been
written using two digits rather than four digits to define the applicable year
and therefore without consideration of the impact of the upcoming change in the
century. Such programs, unless corrected, may not have been able to accurately
process dates ending in the Year 2000 and thereafter.
Through November 26, 1999, the amounts incurred by the Parent related to the
assessment of, and efforts in connection with, the Year 2000 and the development
and execution of a remediation plan have approximated $74.0 million of which
approximately $11.0 million in hardware and software has been capitalized. The
Parent's total remaining Year 2000 project cost as of November 26, 1999 is
estimated at approximately $4.0 million.
Nothing has come to the Parent's attention, which would cause it to believe that
its Year 2000 compliance effort was not successful. While the Parent will
continue to monitor for Year 2000 related problems, to date no significant Year
2000 issues have been encountered.
<PAGE>
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
No legal proceedings are pending.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the
period covered by this report.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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, on
the 3rd day of March, 2000.
Bear Stearns Secured Investors Inc.
(Registrant)
By: /s/ Samuel L. Molinaro Jr.
Samuel L. Molinaro Jr.
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
unaudited Statement of Financial Condition at November 26, 1999 and unaudited
Statement of Operations for the five-months ended November 26, 1999, which are
contained in the body of the accompanying Form 10-Q and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 5-Mos
<FISCAL-YEAR-END> Nov-30-2000
<PERIOD-END> Nov-26-1999
<CASH> 1,000
<SECURITIES> 0
<RECEIVABLES> 128,255
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 129,940
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 129,939
<TOTAL-LIABILITY-AND-EQUITY> 129,940
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 140
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 43,718
<INCOME-PRETAX> (43,858)
<INCOME-TAX> (18,978)
<INCOME-CONTINUING> (24,880)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (24,880)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
