COLLEGE AND UNIVERSITY
FACILITY LOAN TRUST ONE
FINANCIAL STATEMENTS
AS OF NOVEMBER 30, 1996
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To State Street Bank and Trust Company (Owner Trustee):
We have audited the accompanying balance sheet of College and University
Facility Loan Trust One (a Massachusetts business trust), including the schedule
of investments, as of November 30, 1996, and the related statements of
operations and cash flows for the year then ended, and the statements of changes
in net assets for each of the two years in the period then ended, and the
selected financial highlights for each of the periods presented. These financial
statements and the selected financial highlights are the responsibility of the
Owner Trustee. Our responsibility is to express an opinion on these financial
statements and the selected financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the selected
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of the Loans and
Investments as of November 30, 1996 by correspondence with General Electric
Capital Corporation and Federal National Mortgage Association, respectively. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and the selected financial highlights
referred to above present fairly, in all material respects, the financial
position of College and University Facility Loan Trust One as of November 30,
1996, and the results of its operations and its cash flows for the year then
ended, and the changes in its net assets for each of the two years in the period
then ended, and the selected financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
Boston, Massachusetts
December 27, 1996
<PAGE>
College and University
Facility Loan Trust One
================================================================================
Financial Statements
November 30, 1996
<PAGE>
College and University
Facility Loan Trust One
Balance Sheet
================================================================================
November 30, 1996
================================================================================
Assets
Investments, at amortized cost, net of allowance for
possible loan losses of $725,000 (Notes 1, 2, 6, 7
and 8 and Schedule of Investments) $91 161 191
Cash 98 067
Interest receivable 1 578 524
Deferred bond issuance costs (Note 2) 1 090 424
- --------------------------------------------------------------------------------
Total assets $93 928 206
================================================================================
Liabilities
Bonds payable (Notes 3 and 8) $75 484 762
Interest payable (Note 3) 3 915 483
Class A redemption payable (Note 5) 604 854
Dividend payable (Note 5) 322 773
Accrued expenses and other liabilities 233 650
- --------------------------------------------------------------------------------
Total liabilities 80 561 522
- --------------------------------------------------------------------------------
Net Assets
Class A Preferred Certificates, par value $1 - authorized
and outstanding - 4,267,199 certificates (preference as
to annual dividends of 13.25%, mandatory redemption and
liquidation at par value) (Note 5) 4 267 199
- --------------------------------------------------------------------------------
Class B Certificates, par value $1 - authorized, issued
and outstanding - 1,001,643 certificates (Note 5) 1 001 643
Accumulated deficit (Note 2) (1 047 773)
Paid-in capital (Note 2) 9 145 615
- --------------------------------------------------------------------------------
Total net assets applicable to Class B certificateholders 9 099 485
- --------------------------------------------------------------------------------
Total net assets $13 366 684
================================================================================
Net asset value per Class B certificate
(based on 1,001,643 certificates outstanding) $ 9.08
================================================================================
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
College and University
Facility Loan Trust One
Statement of Operations
================================================================================
Year Ended November 30, 1996
================================================================================
Investment income:
Interest income (Note 2) $11 210 253
- --------------------------------------------------------------------------------
Expenses:
Interest expense (Notes 2 and 3) 8 145 980
Servicer fees (Note 4) 90 909
Trustee fees (Note 4) 46 248
Other trust and bond administration expenses 229 827
- --------------------------------------------------------------------------------
Total expenses 8 512 964
- --------------------------------------------------------------------------------
Net investment income 2 697 289
Provision for possible loan losses (Notes 2 and 6) 200 000
- --------------------------------------------------------------------------------
Net increase in net assets resulting from operations 2 497 289
Dividends to Class A Preferred Certificateholders 678 957
- --------------------------------------------------------------------------------
Net increase in net assets applicable to Class B
certificateholders resulting from operations $ 1 818 332
================================================================================
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
College and University
Facility Loan Trust One
Statement of Cash Flows
================================================================================
Year Ended November 30, 1996
================================================================================
Cash flows from operating activities:
Interest received $ 4 354 795
Interest paid (8 352 039)
Operating expenses paid (252 642)
- --------------------------------------------------------------------------------
Net cash used for operating activities (4 249 886)
- --------------------------------------------------------------------------------
Cash flows from investing activities:
Net increase in funds held under investment agreements (1 213 572)
Principal payments on Loans 14 098 913
- --------------------------------------------------------------------------------
Net cash provided by investing activities 12 885 341
- --------------------------------------------------------------------------------
Cash flows from financing activities:
Principal repayments on Bonds (7 240 892)
Dividends to Class A Preferred certificateholders (725 902)
Redemption of Class A Preferred certificateholders (708 590)
- --------------------------------------------------------------------------------
Net cash used for financing activities (8 675 384)
- --------------------------------------------------------------------------------
Net decrease in cash (39 929)
Cash, beginning of year 137 996
- --------------------------------------------------------------------------------
Cash, end of year $ 98 067
================================================================================
Reconciliation of net increase in net assets
resulting from operations to net cash used
for operating activities:
Net increase in net assets resulting from operations $ 2 497 289
Provision for possible loan losses 200 000
Decrease in interest receivable (314 424)
Increase in accrued expenses and other liabilities 114 341
Decrease in bond interest payable (369 286)
Amortization of deferred Bond issuance costs 163 230
Amortization of purchase discount on Loans (6 541 036)
- --------------------------------------------------------------------------------
Net cash used for operating activities $(4 249 886)
================================================================================
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
College and University
Facility Loan Trust One
Statements of Changes in Net Assets
(Note 2 (f))
================================================================================
Years Ended November 30, 1996 1995
================================================================================
From operations:
Net investment income $ 2 697 289 $ 1 777 232
Provision for possible loan losses (200 000) (400 000)
Dividends to certificateholders (Notes 2 and 5):
Class A Preferred certificateholders
($.1325 per certificate annually):
From net investment income (171 187) (639 242)
As tax return of capital (507 770) (77 222)
- --------------------------------------------------------------------------------
Net increase in net assets applicable to Class B
certificateholders resulting from operations 1 818 332 660 768
- --------------------------------------------------------------------------------
Capital certificate transactions (Note 5):
Redemptions of Class A Preferred certificates,
(1,109,166 and 204,277 certificates in 1996 and
1995, respectively) (1 109 166) (204 277)
Issuance of additional 13.25% Class A Preferred
certificates as paid-in-kind dividend (346,746
certificates in 1995) - 346 746
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from capital certificate transactions (1 109 166) 142 469
- --------------------------------------------------------------------------------
Net increase in net assets 709 166 803 237
Net assets:
Beginning of year 12 657 518 11 854 281
- --------------------------------------------------------------------------------
End of year $13 366 684 $12 657 518
================================================================================
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
College and University
Facility Loan Trust One
Selected Financial Highlights for Each
Class B Certificate Outstanding
Throughout the Periods Indicated
(Notes 1 and 5)
================================================================================
<TABLE>
<CAPTION>
Years Ended November 30, 1996 1995 1994 1993 1992
======================================================================================================
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 7.27 $ 6.61 $ 4.41 $ 3.84 $ 2.71
- ------------------------------------------------------------------------------------------------------
Net investment income 2.69 1.77 3.04 1.44 2.13
Provision for possible loan losses (.20) (.40) (.12) -- --
Dividends to Class A Preferred
Certificateholders:
From net investment income (.17) (.64) (.42) (.87) (1.00)
As tax return of capital (.51) (.07) (.30) -- --
- ------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 9.08 $ 7.27 $ 6.61 $ 4.41 $ 3.84
======================================================================================================
Total investment return (a) N/A N/A N/A N/A N/A
Net assets applicable to
Class A Preferred Certificates,
end of year $4 267 199 $5 376 365 $5 233 897 $5 997 151 $6 781 396
Net assets applicable to Class B
Certificates, end of year $9 099 485 $7 281 153 $6 620 384 $4 418 852 $3 843 329
======================================================================================================
Ratios and Supplemental Data:
Ratio of expenses to average
net assets applicable to
Class B Certificates 103.94%(b) 133.48%(b) 180.25%(b) 274.18%(b) 344.39%(b)
Ratio of net investment income
to average net assets applicable
to Class B Certificates 32.93% 25.57% 55.24% 35.10% 64.89%
Number of Class B Certificates
outstanding, end of year 1 001 643 1 001 643 1 001 643 1 001 643 1 001 643
</TABLE>
(a) The Trust's investments are recorded at amortized cost as discussed in Note
2. Accordingly, the financial statements do not reflect the market value of
such investments. For this reason, management believes that no meaningful
information can be provided regarding "Total Investment Return" and has not
included information under that heading.
(b) Excluding interest expense, the ratio of expenses to average net assets
applicable to Class B Certificates was 6.47%, 7.96%, 11.64%, 13.68%, and
16.23% in 1996, 1995, 1994, 1993, and 1992, respectively.
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
1. Organization College and University Facility Loan Trust One (the
and Business Trust) was formed on September 17, 1987 as a
business trust under the laws of the Commonwealth of
Massachusetts by a declaration of trust by State
Street Bank and Trust Company, formerly the Bank of
Boston, (the Owner Trustee), not in its individual
capacity but solely as Owner Trustee. The Trust is
registered under the Investment Company Act of 1940
(as amended) as a diversified, closed-end,
management investment company.
The Trust was formed for the sole purpose of raising
funds through the issuance and sale of bonds (the
Bonds). The Trust commenced operations on September
29, 1987 (the Closing Date) and issued Bonds in five
tranches in the aggregate principal amount of
$126,995,000. The Bonds constitute full recourse
obligations of the Trust. The collateral securing
the Bonds consists primarily of a pool of college
and university facility loans (the Loans) to various
postsecondary educational institutions and funds
held under the indenture (the Indenture) and the
investment agreements. The Loans were originated by
or previously assigned to the United States
Department of Education (ED) under the College
Housing Loan Program or the Academic Facilities Loan
Program. The Loans, which have been assigned to The
First National Bank of Chicago (the Bond Trustee),
are secured by various types of collateral,
including mortgages on real estate, general recourse
obligations of the borrowers, pledges of securities
and pledges of revenues. As of the Closing Date, the
Loans had a weighted average stated interest rate of
approximately 3.16% and a weighted average remaining
term to maturity of approximately 19.4 years.
Payments on the Loans are managed by the Bond
Trustee in various fund accounts and are invested
under investment agreements (see Note 2) as
specified in the Indenture.
8
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
1. Organization and All payments on the Loans and earnings under the
Business (Continued) investment agreements and any required transfers
from the Expense, Reserve and Liquidity Funds are
deposited to the credit of the Revenue Fund held by
the Bond Trustee as defined within, and in
accordance with, the Indenture. On each bond payment
date, amounts on deposit to the credit of the
Revenue Fund are applied in the following order of
priority: to pay amounts due on the Bonds, to pay
administrative expenses not previously paid from the
Expense Fund, to fund the Expense Fund to the
Expense Fund Requirement, to fund the Reserve Fund
to the Maximum Reserve Requirement, and to fund the
Liquidity Fund to the Liquidity Fund Requirement.
Any funds remaining in the Revenue Fund on such
payment date are paid to the certificateholders in
the order of priority discussed in Note 5.
On the Closing Date, certificates were issued by the
Trust to ED as partial payments for the Loans. In
December 1989, ED sold, through a private placement,
all of its ownership interest in the Trust.
2. Summary of (a) College and University Facility Loans
Significant
Accounting The Loans were purchased and recorded at a discount
Policies below par. Pursuant to a "no-action letter" that the
Trust received from the Securities and Exchange
Commission, the Loans (included in investments in
the accompanying balance sheet) are being accounted
for under the amortized cost method of accounting.
Under this method, the difference between the cost
of each Loan to the Trust and the scheduled
principal and interest payments is amortized,
assuming no prepayments of principal, and included
in the Trust's income by applying the Loan's
effective interest rate to the amortized cost of
that Loan. The remaining balance of the purchase
discount on the Loans as of November 30, 1996 was
approximately $44,253,000. As a result of
prepayments of Loans in the year ended November 30,
1996, additional interest income of approximately
$1,430,000 was recognized.
9
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
2. Summary of (a) College and University Facility Loans
Significant (Continued)
Accounting
Policies The Trust's policy is to discontinue the accrual of
(Continued) interest on Loans for which payment of principal or
interest is 180 days or more past due or for such
other Loans as considered necessary by management if
collection of interest and principal is doubtful.
When a Loan is placed on nonaccrual status, all
previously accrued but uncollected interest is
reversed against the current period's interest
income. Subsequently, interest income is recorded
when received. Payments are applied to interest
first with the balance, if any, applied to
principal. At November 30, 1996, two loans had been
placed on nonaccrual status, as discussed in Note 6.
(b) Other Investments
Other investments, which are included in Investments
on the accompanying balance sheet, consist of two
unsecured investment agreements issued by the
Federal National Mortgage Association bearing fixed
rates of interest of 5% and 8%. These investments
are carried at cost. These investment agreements
terminate on the earlier of December 1, 2014 or the
date on which the bonds are paid-in-full.
(c) Federal Income Taxes
It is the Trust's policy to comply with the
requirements applicable to a regulated investment
company under Subchapter M of the Internal Revenue
Code of 1986, as amended, and to distribute
substantially all of its investment company taxable
income to its certificateholders each year.
Accordingly, no federal or state income tax
provision is required.
For tax purposes, the Loans were transferred to the
Trust at their face values. Accordingly, the
accretion of the purchase discount creates a
permanent book-tax difference.
10
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
2. Summary of (d) Deferred Bond Issuance Costs
Significant
Accounting Deferred Bond issuance costs are being amortized
Policies using the effective interest-rate method, assuming
(Continued) that all mandatory semiannual payments will be made
on the term bonds as discussed in Note 3.
(e) Accounting for Impairment of a Loan and
Allowance for Possible Loan Losses
The Trust accounts for credit losses in accordance
with Statement of Financial Accounting Standards
(SFAS) No. 114, Accounting by Creditors for
Impairment of a Loan, as amended by SFAS No. 118
(hereafter collectively referred to as SFAS 114).
SFAS 114 requires that impaired loans, as defined,
be measured based on the present value of the
expected future cash flows discounted at the loan's
effective interest rate or the fair value of the
collateral if the loan is collateral dependent.
Management is responsible for establishing an
allowance for possible loan losses based on its best
estimate of losses that might occur. Ultimate losses
may vary from the current estimate. This estimate is
reviewed periodically, and as a provision to the
allowance for possible loan losses becomes
necessary, it is reported in the period in which it
becomes known. Allowances are established for those
loans that, in the opinion of management, are deemed
to be impaired and potentially uncollectible.
The allowance for possible loan losses is based on
management's evaluation of the level of the
allowance required in relation to the estimated loss
exposure in the loan portfolio. Factors considered
in evaluating the adequacy of the allowance include
previous loss
11
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
2. Summary of experience, current economic conditions and their
Significant effect on borrowers, the performance of individual
Accounting Loans in relation to contract terms, adverse
Policies situations that may affect the borrower's ability to
(Continued) pay, and the estimated fair values of collateral.
The factors discussed above are inherently difficult
to predict. Accordingly, the final outcome of these
estimates and the ultimate realization of amounts on
certain Loans may vary significantly from the
amounts reflected in the accompanying financial
statements.
(f) Presentation of Capital Distributions
Capital distributions are accounted for in
accordance with the American Institute of Certified
Public Accountants Statement of Position 93-2,
"Determination, Disclosure and Financial Statement
Presentation of Income, Capital Gain and Return of
Capital Distributions by Investment Companies" (SOP
93-2). SOP 93-2 requires the Trust to report
distributions that are in excess of tax basis
earnings and profits as a tax return of capital and
to present the capital accounts on a basis that
approximates the amounts that are available for
future distributions on a tax basis.
As all tax earnings and profits have been
distributed, accumulated undistributed net
investment income has been reclassified as paid-in
capital. These reclassifications result from
permanent book and tax differences such as the
receipt of tax-exempt interest income on certain
Loans, the related interest expense on the Bonds,
and the accretion of purchase discount on the Loans.
Amounts deducted for the loan loss reserve and
dividends payable are not currently deductible for
tax purposes and have been reclassified as an
accumulated deficit. These reclassifications had no
impact on the net investment income or net assets of
the Trust.
The Trust made $507,770 of distributions which were
considered a tax return of capital for the fiscal
year ending November 30, 1996.
12
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
2. Summary of (g) Use of Estimates
Significant
Accounting The preparation of financial statements in
Policies conformity with generally accepted accounting
(Continued) principles requires management to make estimates and
assumptions that affect the reported amounts of
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.
3. Bonds The Bonds outstanding at November 30, 1996 consist
of the following:
Principal
Interest Amount
Type Rate Stated Maturity (000s)
====================================================
Term 10.20% June 1, 2002 $37 908
Term 10.55 December 1, 2014 37 577
----------------------------------------------------
$75 485
====================================================
The Bonds maturing on June 1, 2002 are being
redeemed, in part, on a pro rata basis by
application of mandatory semiannual payments and
commencing December 1, 2002, the Bonds maturing on
December 1, 2014 will also be redeemed on a pro rata
basis. The redemption price is equal to 100% of the
principal amount to be redeemed plus interest
accrued to the redemption date.
Interest on the Bonds is payable semiannually. On
December 2, 1996, the Trust made the mandatory
redemption of $3,996,747 on the Bonds maturing on
June 1, 2002.
The aggregate scheduled maturities of the Bonds,
including the scheduled mandatory redemptions at
November 30, 1996, are as follows:
13
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
3. Bonds Amount
(Continued) Fiscal Year (000s)
====================================================
1997 7 232
1998 6 912
1999 6 829
2000 6 169
2001 5 570
Thereafter 42 773
----------------------------------------------------
Total $75 485
====================================================
The Bonds are not subject to optional redemption by
either the Trust or the bondholders.
In the event the Trust realizes negative cash flows,
various reserve funds have been established and
maintained such that, on or before such bond payment
date, such funds may be used by the Bond Trustee to
make any required payments on the Bonds and to pay
operating expenses of the Trust.
As required by the Indenture, the scheduled future
cash flows for Loans that are in default are
excluded from the calculation of the reserve fund
requirement. The impact of excluding Loans in
default from the calculation increases the reserve
fund requirement. The cash flows from the December
1, 1995 and June 3, 1996 Bond Payments were
sufficient to satisfy the maximum funding
requirement of $7,249,868 and $7,403,319,
respectively.
4. Administrative (a) Servicer
Agreements
As compensation for the services provided under the
servicing agreement, General Electric Capital
Corporation (GECC) receives a collection fee. This
fee is paid semiannually with respect to
14
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
4. Administrative each Loan on each date of payment for such Loan. The
Agreements fee is equal to .055 of 1% of the outstanding
(Continued) principal balance of such Loan divided by the number
of payments of principal and interest for such Loan
in a calendar year. For the period ended November
30, 1996, this fee totaled $69,110. GECC was also
reimbursed for other related expenses of $21,799.
(b) Trustees
As compensation for services provided, the Owner and
Bond Trustees are entitled under the Declaration of
Trust and the Indenture to receive the following
fees:
o The Owner Trustee, in its capacities as manager of
the Trust and as Owner Trustee, received fees of
$11,950 and $10,755, respectively, for the year
ended November 30, 1996. In addition, the Owner
Trustee was reimbursed $2,777 for out-of-pocket
expenses.
o The Bond Trustee is entitled to an annual fee
equal to .025 of 1% of the aggregate outstanding
principal of the Bonds on the bond payment date
immediately preceding the date of payment of such
fee. The fee is payable semiannually, in advance,
on each bond payment date. The Bond Trustee is
also reimbursed for out-of-pocket expenses in an
amount not to exceed 4% of the applicable annual
fee. For the year ended November 30, 1996, the
fees amounted to $19,997. In addition, the Bond
Trustee was reimbursed $769 for out-of-pocket
expenses.
5. Certificates The certificates comprise two classes, namely 13.25%
Class A Preferred and Class B. The Class A Preferred
certificates have preference over the Class B
certificates with respect to the payment of
dividends, rights of redemption and liquidation
payments. Dividends on the Class A Preferred
certificates are payable in cash on each
Distribution Date (defined below) at the rate of
13.25% per annum from amounts received by the Owner
Trustee pursuant to the Declaration of Trust. To the
extent that such amounts are not sufficient to pay
accrued dividends on any Class A Preferred
certificates on any Distribution Date, such
dividends will be paid in additional certificates of
the Class A Preferred certificates. The Class A
Preferred certificates are required to be
15
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
5. Certificates redeemed by the Trust, in whole or in part, on any
(Continued) Distribution Date to the extent of the amount on
deposit to the credit of the Revenue Fund, as
discussed in Note 1, and after all accrued but
unpaid dividends thereon have been paid in full. No
distributions on the Class B certificates may be
made until all Class A Preferred certificates have
been fully redeemed. Following the redemption in
full of the Class A Preferred certificates, on each
Distribution Date, the holders of the Class B
certificates will receive amounts paid to the Owner
Trustee pursuant to the Declaration of Trust, pro
rata, in the same proportion that the par value of
the certificates evidenced by each Class B
certificate bears to the sum of the par value of the
certificates evidenced by all of the Class B
certificates.
Dividends and other payments are distributed to the
certificateholders, while the Bonds are outstanding,
on the second business day in each June and December
(the Distribution Date) and, after the Bonds are
paid in full, on the first business day of each
month.
As a result of the shortfall in the reserve fund at
June 1, 1995, there was no cash available for
distribution to the certificateholders and the trust
issued additional Class A Preferred certificates to
pay the accrued dividends of $346,746.
On December 2, 1996, the Trust paid $927,627 to the
holders of the Class A Preferred certificates, of
which $322,773 was for payment of dividends and
$604,854 was a redemption of Class A Preferred
certificates. These payments are reflected as
liabilities in the accompanying balance sheet.
The certificateholders shall each be entitled to one
vote per certificate.
16
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
6. Allowance for An analysis of the allowance for possible loan
Possible Loan losses for the year ended November 30, 1996 is
Losses summarized as follows:
Balance, beginning of year $525 000
Provision 200 000
Charge-offs -
----------------------------------------------------
Balance, end of year $725 000
====================================================
At November 30, 1996, the recorded investment in
loans that are considered to be impaired under SFAS
114 was approximately $1,753,000 with a related
allowance for possible loan losses of $517,000.
The average recorded investment in impaired loans
during the year ended November 30, 1996 was
approximately $1,803,000. For the year ended
November 30, 1996, interest income recognized on
impaired loans was approximately $69,000.
The amortized cost of the loans placed on nonaccrual
status is approximately $1,225,000 at November 30,
1996. See "Accounting for Impairment of a Loan and
Allowance for Possible Loan Losses" for a discussion
of the Trust's impaired loan accounting policy.
17
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
7. Loans Scheduled principal and interest payments on the
Loans as of November 30, 1996, excluding payments
for Loans in Default, as defined in the Indenture,
are as follows:
Principal Interest
Payments Payments Total
Fiscal Year (000s) (000s) (000s)
====================================================
1997 $ 10 773 $ 3 547 $ 14 320
1998 10 615 3 148 13 763
1999 9 984 2 810 12 794
2000 8 777 2 497 11 274
2001 8 238 2 214 10 452
Thereafter 64 441 13 159 77 600
----------------------------------------------------
Total $112 828 $27 375 $140 203
====================================================
Expected payments may differ from contractual
payments because borrowers may prepay or default on
their obligations. Accordingly, actual principal and
interest payments on the Loans may vary
significantly from the scheduled payments.
The following analysis summarizes the stratification
of the loan portfolio by type of collateral and
institution as of November 30, 1996:
Amortized
Number Cost
Type of Collateral of Loans (000s) %
====================================================
Loans secured by a
first mortgage 145 $33 892 47.3%
Loans not secured by
a first mortgage 92 37 729 52.7%
----------------------------------------------------
Total Loans 237 $71 621 100.0%
====================================================
18
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
7. Loans Amortized
(Continued) Number Cost
Type of Institution of Loans (000s) %
====================================================
Private 152 $33 855 47.3%
Public 85 37 766 52.7
----------------------------------------------------
Total Loans 237 $71 621 100.0%
====================================================
The ability of a borrower to meet future debt
service payments on a Loan will depend on a number
of factors relevant to the financial condition of
such borrower, including, among others, the size and
diversity of the borrower's sources of revenues;
enrollment trends; reputation; management expertise;
the availability and restrictions on the use of
endowments and other funds; the quality and
maintenance costs of the borrower's facilities; and,
in the case of some Loans to public institutions
which are obligations of a state, the financial
condition of the relevant state or other
governmental entity and its policies with respect to
education. The ability of a borrower to maintain
enrollment levels will depend on such factors as
tuition costs, geographical location, geographic
diversity, quality of the student body, quality of
the faculty and the diversity of program offerings.
The collateral for Loans that are secured by a
mortgage on real estate generally consists of
special purpose facilities, such as dormitories,
dining halls and gymnasiums, which are integral
components of the overall educational setting. As a
result, in the event of borrower default on a Loan,
the Trust's ability to realize the outstanding
balance of the Loan through the sale of the
underlying collateral may be negatively impacted by
the special purpose nature and location of such
collateral.
19
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
7. Loans A number of borrowers are currently experiencing
(Continued) adverse changes in their financial condition due to
declining enrollment, increasing costs and a decline
in endowments, grants, private gifts, and State and
Federal funding. Many of these potentially troubled
borrowers are developing and implementing strategic
plans to improve their financial position; the plans
generally include taking actions to control costs
and increase revenues through tuition increases,
fundraising campaigns, higher enrollment and a
reduction of faculty.
Due to the special purpose nature of the borrowers'
properties, the ability of such troubled borrowers
to repay their loans may ultimately be dependent on
the future success of the institutions' programs.
8. Fair Value SFAS No. 107, "Disclosures about Fair Value of
of Financial Financial Instruments," allows for the use of a wide
Instruments range of valuation techniques; therefore, it may be
difficult to compare the Trust's fair value
information to public market information or to other
fair value information. Accordingly, the fair value
information presented below does not purport to
represent, and should not be construed to represent,
the underlying "market" value of the Trust's net
assets or the amounts that would result from the
sale or settlement of the related financial
instruments. Further, as the assumptions inherent in
fair value estimates change, the fair value
estimates will change.
Current market prices are not available for most of
the Trust's financial instruments since an active
market generally does not exist for such
instruments. In accordance with the terms of the
Indenture, the Trust is required to hold all of the
Loans to maturity and to use the cash flows
therefrom to retire the Bonds. Accordingly, the
Trust has estimated the fair values of its financial
instruments using a discounted cash flow
methodology. This methodology is similar to the
approach used at the formation of the Trust to
determine the carrying amounts of these
20
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
8. Fair Value instruments for financial reporting purposes. In
of Financial applying the methodology, the calculations have been
Instruments adjusted for the change in the relevant market rates
(Continued) of interest, the estimated duration of the
instruments and an internally developed credit risk
rating of the instruments. All calculations are
based on the scheduled principal and interest
payments on the Loans because the prepayment rate on
these loans is not subject to estimate.
The estimated fair value of each category of the
Trust's financial instruments and the related book
value presented in the accompanying balance sheet as
of November 30, 1996 are as follows:
Book Value Fair Value
(000s) (000s)
====================================================
Loans $70 896* $ 96 319
Investment Agreements:
Revenue Fund 17 561 15 288
Liquidity Fund 2 704 1 870
----------------------------------------------------
$91 161 $113 477
====================================================
Bonds $75 485 $ 92 208
====================================================
* Net of Allowance for Possible Loan Losses of
$725,000.
21
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
(Dollar Amounts in Thousands)
(Continued)
<TABLE>
<CAPTION>
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
- - - - - - -
<C> <S> <C> <C> <C> <C>
COLLEGE AND UNIVERSITY LOANS (77.8%)
---------- A ---------
$1470 Albion College 3.00 10/01/2015 12.51 $720
151 Albion College 3.00 11/01/1999 12.74 126
180 Albright College 3.50 05/01/2001 11.70 151
437 Alfred University 3.00 11/01/2007 12.41 272
101 Allegheny College 3.00 07/01/1999 12.73 85
102 Allegheny College 3.50 07/01/2001 12.83 79
605 Alma College 3.00 04/01/2010 11.87 364
350 Alverno College 3.375 10/01/2003 12.52 252
188 American Graduate School of
International Management 3.00 11/01/2010 12.59 108
310 Anderson College 3.00 03/01/2010 13.02 177
1189 Appalachian State University 3.00-3.625 07/01/2004 11.80 845
36 Arizona State University 2.875 10/01/1997 11.94 33
487 Arizona State University 3.50 10/01/2003 11.72 366
221 Atlantic Union College 3.00 05/01/2023 12.68 91
1530 Augsburg College 3.00 04/01/2016 12.95 736
868 Azusa Pacific University 3.00 04/01/2017 12.96 405
---------- B ---------
725 Baptist College at Charleston 3.00 03/01/2014 12.96 366
91 Barnard College 3.125 04/01/1999 12.82 80
101 Benedict College 3.00 11/01/2006 12.42 65
31 Bethune-Cookman College 3.00 10/01/2000 12.71 25
343 Birmingham-Southern College 3.00 10/01/2006 12.48 227
500 Birmingham-Southern College 3.00 10/01/2010 12.47 283
166 Black Hills State College 3.00 10/01/2005 11.76 115
120 Black Hills State College 3.00 10/01/2007 11.77 78
951 Boston University 3.00 12/31/2022 11.87 416
224 Bryan College 3.00 02/01/2010 12.68 129
66 Buena Vista College 3.625 02/01/2001 13.45 53
223 Buena Vista College 3.00 11/01/2009 12.41 130
---------- C ---------
2350 California State University 3.00 11/01/2012 10.57 1398
662 Carnegie - Mellon University 3.00 11/01/2017 10.45 361
2155 Case Western Reserve University 3.00 04/01/2016 10.54 1204
50 Centenary College of Louisiana 2.875 10/01/1999 12.82 42
26 Central Missouri State 2.875 07/01/1997 11.89 24
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C> <C> <C> <C>
$ 192 Central Missouri State 3.125 07/01/2000 11.83 $156
324 Central Missouri State 3.50 07/01/2001 11.80 255
20 Central State College 2.75 12/01/1996 10.66 19
284 Central Washington University 3.50 10/01/1999 10.99 249
809 Central Washington University 3.75 10/01/2004 11.03 612
52 Chaminade College of Honolulu 3.50 10/01/2002 12.55 39
313 Chaminade College of Honolulu 3.00 10/01/2011 12.47 173
101 Champlain College 3.00 10/01/2010 12.66 57
332 Claflin College 3.00 11/01/2002 12.57 249
148 Clark College 3.00 11/01/1999 12.75 125
1080 College of Charleston 3.00 07/01/2016 12.02 527
645 College of St. Thomas 3.00 04/01/2017 12.95 302
702 College of the Virgin Islands 3.00 10/01/2004 11.83 494
56 Colorado State University 2.75 04/01/1997 12.63 53
404 Colorado State University 3.50 04/01/2001 12.17 330
1325 Colorado State University 3.625 04/01/2005 11.98 957
424 Community College of Rhode Island 3.00 04/01/2018 12.10 204
815 Concordia College 3.00 05/01/2011 12.64 457
103 Contra Costa College 3.00 04/01/2009 12.34 63
84 Cornell University 3.00 11/01/1999 10.84 73
408 Curry College 3.00 04/01/2010 12.74 235
---------- D ---------
43 Dana College 3.50 04/01/2001 13.39 34
355 Daniel Webster College 3.00 04/01/2019 12.99 156
414 Dean Junior College 3.00 04/01/2016 12.96 202
67 Dillard University 3.375 04/01/2002 13.41 53
108 Dillard University 3.00 11/01/2000 12.68 87
30 Dormitory Authority of New York 3.00 07/01/1998 12.77 23
1310 Drake University 3.00 10/01/2012 12.71 701
200 Drexel University 3.75 05/01/2000 11.72 176
---------- E ---------
512 Eckerd College 3.50 07/01/2003 12.53 369
65 Eckerd College 3.75 03/01/2005 13.04 45
163 Emory University 3.375 07/01/2002 12.59 124
365 Emory University 3.375 03/01/2003 13.25 269
505 Emporia State University 3.00 04/01/2009 12.33 309
---------- F ---------
349 Fairleigh Dickinson University 3.50 11/01/2003 11.66 261
123 Fairleigh Dickinson University 3.00 11/01/2020 12.09 56
38 Findlay College 3.375 07/01/2002 12.56 28
30 Findlay College 3.00 11/01/1997 12.96 27
410 Florida Atlantic University 3.00 07/01/2006 11.85 268
82 Florida Institute of Technology 3.00 02/01/2006 13.17 53
190 Foothill College 3.00 10/01/2006 11.76 125
58 Fort Hays State University 3.00 10/01/1998 11.88 51
314 Fort Hays State University 3.375 10/01/2002 11.74 241
61 Fort Lewis College 3.125 10/01/1999 11.84 52
---------- G ---------
859 Gordon College 3.50 04/01/2013 12.84 469
1430 Grambling State University 3.00-3.75 10/01/2005 11.70 999
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C> <C> <C> <C>
---------- H ---------
$ 156 Hampshire College 3.00 11/01/2006 12.43 $101
770 Harcum Junior College 3.00 11/01/2015 12.44 379
470 Haverford College 3.625 11/01/2013 12.29 259
51 High Point College 3.375 12/01/2002 11.63 37
185 High Point College 3.00 12/01/2007 11.72 112
---------- I ---------
1135 Indiana University 3.50 04/01/2000 11.56 974
284 Inter American University of San Juan 2.75-3.00 12/01/2001 11.63 230
1225 Iowa State University of Ames 3.00 07/01/2007 10.63 820
---------- J ---------
500 Jackson State University 3.00 01/01/2007 12.50 320
100 Jarvis Christian College 3.50 04/01/2001 13.41 79
602 Jarvis Christian College 3.00 04/01/2019 12.96 269
37 John Carroll University 2.75 01/01/1997 14.22 35
---------- K ---------
66 Kansas Newman College 3.125 04/01/2000 13.71 56
183 Kansas Newman College 3.00 04/01/2006 13.10 118
385 Kansas State University 3.375 04/01/2002 11.79 305
134 Kansas State University 3.50 04/01/2000 11.52 115
363 Kent State University 2.875 12/01/1999 10.01 321
1570 Kent State University 3.00 12/01/2008 10.55 1031
152 Kenyon College 3.00 11/01/1999 10.69 131
113 Kirksville College of Kirksville, Missouri 3.125 12/01/2000 11.63 93
208 Knox College 3.00 05/01/2007 12.72 132
---------- L ---------
49 Lambuth College 3.00 05/01/1998 14.06 46
285 Laredo Junior College 3.00 08/01/2009 11.82 170
168 Lawrence University 3.375 04/01/2002 13.34 128
31 Lincoln College 3.00 12/01/1998 11.63 27
105 Linfield College 3.125 10/01/1999 12.80 87
660 Long Island University 3.00 06/01/2016 12.34 315
808 Long Island University 3.75 10/01/2005 12.42 556
225 Louisiana State University 3.50 07/01/2002 10.50 183
760 Louisiana State University 3.50 04/01/2002 11.10 616
257 Louisiana Tech University 3.50 04/01/2000 12.72 223
170 Loyola University - Mundelein Branch 3.125 10/01/2000 12.70 136
49 Lynchburg College 3.00 11/01/1998 12.83 43
---------- M ---------
520 McKendree College 3.00 04/01/2007 13.07 326
18 Medical College of Wisconsin 3.00 10/01/1997 13.01 16
170 Medical College of Wisconsin 3.00 10/01/1999 12.79 141
11 Menlo College 2.875 04/01/1997 14.28 10
80 Merrimack College 2.875 04/01/1999 13.83 69
801 Michigan State University 3.00 05/01/2020 10.96 417
1608 Middlebury College 3.00 04/01/2018 12.87 815
65 Midland Lutheran College 3.50 04/01/2001 13.41 52
56 Midland Lutheran College 2.875 04/01/1999 13.77 48
260 Mississippi State University 2.75 12/01/1997 10.70 238
495 Mississippi State University 3.50 12/01/2001 10.82 409
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C> <C> <C> <C>
$ 120 Mississippi Valley State 3.00 07/01/2008 11.89 $ 75
633 Missouri Southern State College 3.00 12/01/2008 10.56 414
361 Missouri Western State College 3.00 10/01/2008 11.77 224
482 Montclair State College 3.00 07/01/2008 11.32 304
315 Monterey Peninsula College 3.00 10/01/2018 11.95 147
123 Montreat-Anderson College 3.00 12/01/2019 12.19 57
337 Moravian College 3.00 11/01/2000 12.67 269
42 Morehouse College 2.875 07/01/1999 10.48 36
136 Morehouse College 3.375 07/01/2001 10.57 110
1053 Morris College 3.00 11/01/2013 12.42 547
---------- N ---------
439 New England College 3.625 10/01/2013 12.37 243
1095 New England College 3.00 04/01/2019 12.96 490
1 North Carolina Agriculture
and Technical State University 3.00 07/01/1997 9.35 1
140 North Carolina Agriculture
and Technical State University 3.75 07/01/2004 10.02 108
35 North Carolina Central University 3.00 11/01/1998 11.83 31
1220 North Carolina State University 3.00 09/01/2006 8.02 948
168 North Carolina State University 3.00 09/01/1998 6.63 159
134 Northeastern University 3.00 05/01/1999 13.10 113
155 Northwest Nazarene College 3.00 11/01/2001 12.60 119
---------- O ---------
135 Occidental College 3.50 10/01/2001 12.62 105
244 Ohio Valley Hospital 3.75 10/01/2005 12.43 174
2350 Old Dominion University 3.00 06/01/2013 11.70 1263
154 Ouachita Baptist University 3.375 12/01/2002 11.63 113
---------- P ---------
89 Pacific University 3.50 10/01/2001 12.66 71
108 Pacific University 3.00 11/01/1999 12.75 90
59 Pan American University 3.50 10/01/2000 11.00 50
5 Paul Quinn College 3.00 09/01/1998 8.06 5
444 Pittsburg State University 3.75 04/01/2005 12.30 321
550 Point Loma Nazarene College 3.75 04/01/2005 13.05 386
57 Post College 3.00 10/01/1998 12.90 49
125 Providence Hospital 3.375 01/01/2002 11.33 99
710 Purdue University 3.50 07/01/2001 10.26 582
---------- R ---------
13 Reed College 2.875 10/01/1997 13.03 12
293 Riverside Hospital 3.00 04/01/2007 13.09 186
743 Rivier College 3.625 04/01/2014 12.78 402
---------- S ---------
425 San Diego State University 3.00 11/01/2021 11.93 189
885 San Francisco State University 3.00 11/01/2021 11.93 395
1218 Sarah Lawrence College 3.00 11/01/2021 12.64 530
348 Scripps College 3.00 10/01/2005 12.51 233
150 Simpson College 3.375 07/01/2001 12.18 114
211 South Dakota State University 3.125 04/01/2000 12.76 183
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C> <C> <C> <C>
$1625 South Dakota State University 3.00 04/01/2016 12.31 $ 818
52 South Plains Junior College District 3.125 10/01/1999 11.85 44
1495 Southeast Missouri State 3.50 04/01/2005 12.32 1059
306 Southern Arkansas University 3.75 10/01/2004 11.76 225
245 Southern Methodist University 3.00 10/01/1998 12.87 212
65 Southern Nazarene University 3.125 04/01/2000 13.60 54
91 Spring Arbor College 3.00 11/01/2000 12.67 73
194 Springfield College 3.00 05/01/2011 12.59 109
106 St. Augustine's College 3.00 11/01/2001 12.61 82
227 St. Edward's University 3.625 04/01/2013 12.80 125
385 St. Francis College 3.50 05/01/2001 12.88 310
47 St. Mary's University of San Antonio 3.00 10/01/1997 13.01 43
489 St. Mary's University of San Antonio 3.75 11/01/2002 12.47 373
22 St. Michael's College 2.875 04/01/1997 14.19 21
250 St. Michael's College 3.00 04/01/2008 13.06 156
491 Stanford University 3.125 04/01/2002 9.82 419
305 Stanford University 3.00 05/01/1999 9.61 280
996 Stanford University 3.00 05/01/2024 10.40 484
106 Stetson University 3.50 09/01/2001 12.48 84
42 Stillman College 3.00 02/01/2007 13.24 27
2876 Suomi College (A) 3.00 08/01/2014 12.70 1070
190 Susquehanna University 3.00 11/01/2006 12.44 122
450 Susquehanna University 3.625 11/01/2014 12.32 243
156 Swarthmore College 3.00 11/01/2013 12.30 82
---------- T ---------
715 Taylor University 3.00 10/01/2010 12.45 404
543 Temple University 3.375 11/01/2014 11.99 297
345 Temple University 2.875 05/01/1999 13.18 298
140 Texas Christian University 3.00 04/01/1998 13.97 126
358 Texas College 3.00 04/01/2007 13.09 226
778 Texas Tech University 3.625 03/01/2013 10.80 477
5570 Texas Tech University 3.375-3.50 03/01/2012 10.83 3450
136 Tougaloo College 3.00 06/01/2021 12.44 58
866 Tufts University 3.625 10/01/2004 12.47 617
---------- U ---------
22 Union College 3.00 10/01/1997 10.23 20
1976 University of Alabama 3.00 05/01/2021 12.27 889
141 University of Alaska 3.125 04/01/2001 12.63 115
251 University of Arkansas at Monticello 3.625 04/01/2004 12.40 184
39 University of Arkansas at Little Rock 2.875 04/01/1999 12.01 34
35 University of Chicago 2.75 01/01/1997 14.22 33
110 University of Chicago 3.00 06/01/1998 12.59 95
51 University of Chicago 3.50 12/01/2001 11.63 40
951 University of Florida 3.00 01/01/1999 12.70 827
1348 University of Florida 3.00 01/01/2005 12.51 929
1230 University of Hawaii at Manoa 3.00 10/01/2006 11.76 814
1662 University of Missouri at Columbia 3.625 05/01/2004 11.63 1289
44 University of Missouri at Rolla 2.875 05/01/1998 12.01 40
114 University of Missouri at Rolla 3.50 05/01/2003 11.68 89
266 University of Montevallo 3.00 05/01/2023 12.30 114
155 University of Nebraska 3.00 07/01/2013 10.59 90
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C> <C> <C> <C>
$ 453 University of North Carolina 3.50 07/01/2002 10.60 $ 358
1535 University of North Carolina 3.00 01/01/2018 11.49 773
1900 University of Notre Dame 3.00 04/01/2018 12.95 866
145 University of Pittsburgh 3.00 11/01/1999 9.95 127
326 University of Portland 3.00 04/01/2013 12.95 169
784 University of Rochester 3.375 10/01/2002 10.77 664
1325 University of Rochester 3.00 10/01/2006 10.92 908
993 University of South Dakota 3.625 10/01/2013 11.74 566
2454 University of South Florida 3.00 07/01/2013 11.97 1304
329 University of Steubenville 3.375 04/01/2012 12.88 182
363 University of Steubenville 3.00 04/01/2017 12.96 170
3045 University of Vermont 3.00 10/01/2019 12.19 1409
200 University of Washington 3.50 08/01/2000 11.06 167
170 Upsala College (A) 2.75 10/01/1996 12.65 155
910 Utah State University 3.50 04/01/2002 11.76 725
---------- V ---------
1274 Vanderbilt University 3.00 08/01/2005 10.69 902
855 Vanderbilt University 3.00 06/30/2009 10.39 557
---------- W ---------
325 West Virginia Institute of Technology 3.00 06/01/1999 11.66 273
484 West Virginia Wesleyan College 3.50 05/01/2002 13.43 354
215 Western Carolina University 3.75 11/01/2001 11.67 173
1470 Western Maryland College 3.00 11/01/2016 12.44 707
205 Western Washington University 3.00 10/01/2007 11.16 135
101 Whittier College 3.50 04/01/2001 13.53 83
---------- X ---------
600 Xavier University 3.00 10/01/2017 12.54 276
------ ------
$115874 Total College and University Loans $71621
Allowance for Possible Loan Losses 725
Net College and University Loans 70896
INVESTMENT AGREEMENTS (22.2%)
$ 2704 FNMA #787 Liquidity Fund 8.00 12/01/2014 8 $ 2704
17561 FNMA #786 Revenue Fund 5.00 12/01/2014 5 17561
------- ------
$ 20265 Total Investment Agreements $20265
------- ------
$136139 Total Investments (100.0%) $91161
</TABLE>
(A) This institution has been placed on nonaccrual status as more fully
described in Note 6.
<PAGE>
(Signature Page, to follow Item 79 at Screen Number 40, Page Number 33)
This report is signed on behalf of the registrant in the City of Boston and
the Commonwealth of Massachusetts on the 29th day of January, 1997.
COLLEGE AND UNIVERSITY FACILITY
LOAN TRUST ONE
By: State Street Bank and Trust Company,
not in its individual capacity, but
solely as Owner Trustee under a
Declaration of Trust dated September 17,
1987 as Amended and restated on
September 29, 1987, and December 4,
1989.
By: James E. Schultz
Assistant Secretary
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the College
and University Facility Loan Trust One financial statement and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> NOV-30-1996
<INVESTMENTS-AT-COST> 91161
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 1579
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1188
<TOTAL-ASSETS> 93928
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 75485
<OTHER-ITEMS-LIABILITIES> 5076
<TOTAL-LIABILITIES> 80561
<SENIOR-EQUITY> 4267
<PAID-IN-CAPITAL-COMMON> 9145
<SHARES-COMMON-STOCK> 1001643
<SHARES-COMMON-PRIOR> 1001643
<ACCUMULATED-NII-CURRENT> (1048)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 13367
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 11210
<OTHER-INCOME> 0
<EXPENSES-NET> 8513
<NET-INVESTMENT-INCOME> 2697
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 2497
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 679
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 709
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 9145
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 8146
<GROSS-EXPENSE> 8513
<AVERAGE-NET-ASSETS> 12850
<PER-SHARE-NAV-BEGIN> 7.27
<PER-SHARE-NII> 2.69
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .17
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> .51
<PER-SHARE-NAV-END> 9.08
<EXPENSE-RATIO> .66
<AVG-DEBT-OUTSTANDING> 78890
<AVG-DEBT-PER-SHARE> 78.76
</TABLE>
