Year 2000
The services provided to the Trust by the Owner Trustee, the Bond Trustee
and the Servicer, as well as the ability of the colleges and universities to
repay their loans owned by the Trust, depend on the smooth functioning of their
computer systems and those of their outside service providers. Many computer
software systems in use today cannot distinguish the Year 2000 from the Year
1900 because of the way dates are encoded and calculated.
The failure of any computer system used by key service providers to the
Trust to properly distinguish the Year 2000 could impact the ability of the
Trust to receive and process loan payments, receive or remit funds or invest its
funds, among other services which it obtains from its service providers. The
failure of any computer system used by significant borrowers could impact their
ability to make loans payments in accordance with the terms of their loan
documents. The Trust cannot control the Year 2000 compliance programs of its key
service providers or significant borrowers.
The Trust will evaluate the reports received periodically from its key
service providers to monitor their progress toward Year 2000 compliance. In the
event the Trust receives information that indicates there is a material
potential for not receiving compliant services from these providers, the Trust
intends to develop appropriate contingency plans. At this time there can be no
assurance that there will be no adverse impact on the Trust. The obligation to
make any necessary adaptations to their computer systems to prepare for the Year
2000 is the responsibility of the service provider that maintains the system.
The Trust does not expect to incur any material expense in that regard.
The Trust will evaluate the reports received periodically from the various
significant borrowers. The Trust has received no information from any
significant borrowers of any prospective inability to make the loan payments due
the Trust on account of Year 2000 compliance issues. The Trust can give no
assurances that the ability of the colleges and universities to repay the loans
owned by the Trust will not be affected by Year 2000 issues. In the event loan
payments are not received in a timely manner, payment to certificateholders
and/or bondholders may be impaired.
<PAGE>
College and University
Facility Loan Trust One
================================================================================
Financial Statements
November 30, 1998
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To State Street Bank and Trust Company, Owner Trustee of
College and University Facility Loan Trust One:
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, 1998, 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, 1998 by correspondence with GMAC Commercial
Mortgage 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,
1998, 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.
/s/ ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 29, 1999
<PAGE>
College and University
Facility Loan Trust One
Balance Sheet
================================================================================
<TABLE>
<CAPTION>
November 30, 1998
- --------------------------------------------------------------------------------------------
<S> <C>
Assets
Investments, at amortized cost, net of allowance for loan losses
of $1,125,000 (Notes 1, 2, 6, 7 and 8 and Schedule of Investments) $ 75,638,378
Cash 79,998
Interest receivable 1,012,283
Deferred bond issuance costs (Note 2) 806,175
- --------------------------------------------------------------------------------------------
Total assets $ 77,536,834
============================================================================================
Liabilities
Bonds payable (Notes 3 and 8) $ 61,340,854
Interest payable (Note 3) 3,194,143
Accrued expenses and other liabilities 157,404
Payable for Redemption of Class A Preferred Certificates (Note 5) 784,859
Dividends payable (Note 5) 166,388
- --------------------------------------------------------------------------------------------
Total liabilities 65,643,648
- --------------------------------------------------------------------------------------------
Net Assets
Class A Preferred Certificates, par value $1 - authorized and outstanding --
1,726,662 certificates (preference as to annual dividends of 13.25%,
mandatory redemption and liquidation at par value) (Note 5) 1,726,662
- --------------------------------------------------------------------------------------------
Class B Certificates, par value $1 - authorized, issued
and outstanding - 1,001,643 certificates (Note 5) 1,001,643
Accumulated deficit (Note 2) (571,860)
Paid-in capital (Note 2) 9,736,741
- --------------------------------------------------------------------------------------------
Total net assets applicable to Class B certificateholders 10,166,524
- --------------------------------------------------------------------------------------------
Total net assets $ 11,893,186
============================================================================================
Net asset value per Class B certificate
(based on 1,001,643 certificates outstanding) $ 10.15
============================================================================================
</TABLE>
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, 1998
================================================================================
Investment income:
Interest income (Note 2) $8,246,506
- --------------------------------------------------------------------------------
Expenses:
Interest expense (Notes 2 and 3) 6,690,024
Servicer fees (Note 4) 71,071
Trustee fees (Note 4) 43,943
Other trust and bond administration expenses 289,336
- --------------------------------------------------------------------------------
Total expenses 7,094,374
- --------------------------------------------------------------------------------
Net investment income 1,152,132
Provision for loan losses (Notes 2 and 6) 200,000
- --------------------------------------------------------------------------------
Net increase in net assets resulting from operations 952,132
Dividends to Class A Preferred Certificateholders 338,705
- --------------------------------------------------------------------------------
Net increase in net assets applicable to Class B
certificateholders resulting from operations $ 613,427
================================================================================
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
College and University
Facility Loan Trust One
Statement of Cash Flows
================================================================================
<TABLE>
<CAPTION>
Year ended November 30, 1998
============================================================================================
<S> <C>
Cash flows from operating activities:
Interest received $ 4,034,141
Interest paid (6,907,586)
Operating expenses paid (398,220)
- --------------------------------------------------------------------------------------------
Net cash used for operating activities (3,271,665)
- --------------------------------------------------------------------------------------------
Cash flows from investing activities:
Net decrease in funds held under investment agreements 598,637
Principal payments on Loans 11,076,752
- --------------------------------------------------------------------------------------------
Net cash provided by investing activities 11,675,389
- --------------------------------------------------------------------------------------------
Cash flows from financing activities:
Principal repayments on Bonds (6,911,539)
Redemption of Class A Preferred Certificates (1,025,536)
Dividends to Class A Preferred Certificates (432,582)
- --------------------------------------------------------------------------------------------
Net cash used for financing activities (8,369,657)
- --------------------------------------------------------------------------------------------
Net increase in cash 34,067
Cash, beginning of year 45,931
- --------------------------------------------------------------------------------------------
Cash, end of year $ 79,998
============================================================================================
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 $ 952,132
Provision for loan losses 200,000
Decrease in interest receivable 92,879
Increase in accrued expenses and other liabilities 6,131
Decrease in Bond interest payable (352,489)
Amortization of deferred Bond issuance costs 134,926
Amortization of purchase discount on Loans (4,305,244)
- --------------------------------------------------------------------------------------------
Net cash used for operating activities $ (3,271,665)
============================================================================================
</TABLE>
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))
================================================================================
<TABLE>
<CAPTION>
Years ended November 30, 1998 1997
====================================================================================
<S> <C> <C>
From operations:
Net investment income $ 1,152,132 $ 1,196,581
Provision for loan losses (200,000) (200,000)
Dividends to certificateholders (Notes 2 and 5):
Class A Preferred certificateholders
($.1325 per certificate annually):
From net investment income (42,568) (145,716)
As tax return of capital (296,137) (397,251)
- ------------------------------------------------------------------------------------
Net increase in net assets applicable to Class B
certificateholders resulting from operations 613,427 453,614
- ------------------------------------------------------------------------------------
Capital certificate transactions (Note 5):
Redemptions of Class A Preferred certificates,
1,236,516 and 1,304,023 certificates in
1998 and 1997, respectively (1,236,516) (1,304,023)
- ------------------------------------------------------------------------------------
Net decrease in net assets resulting from
capital certificate transactions (1,236,516) (1,304,023)
- ------------------------------------------------------------------------------------
Net decrease in net assets (623,089) (850,409)
Net assets:
Beginning of year 12,516,275 13,366,684
- ------------------------------------------------------------------------------------
End of year $ 11,893,186 $ 12,516,275
====================================================================================
</TABLE>
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 Years Indicated
(Notes 1 and 5)
================================================================================
<TABLE>
<CAPTION>
Years ended November 30, 1998 1997 1996 1995 1994
=================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.54 $ 9.08 $ 7.27 $ 6.61 $ 4.41
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income 1.15 1.20 2.69 1.77 3.04
Provision for loan losses (.20) (.20) (.20) (.40) (.12)
Dividends to Class A Preferred
Certificateholders:
From net investment income (.04) (.15) (.17) (.64) (.42)
As tax return of capital (.30) (.39) (.51) (.07) (.30)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 10.15 $ 9.54 $ 9.08 $ 7.27 $ 6.61
============================================================================================================================
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 $ 1,726,662 $2,963,176 $4,267,199 $ 5,376,365 $5,233,897
Net assets applicable to Class B
Certificates, end of year 10,166,524 9,553,099 9,099,485 7,281,153 6,620,384
============================================================================================================================
Ratios and Supplemental Data:
Ratio of operating expenses to average
net assets applicable to
Class B Certificates 71.95%(b) 83.43%(b) 103.94%(b) 133.48%(b) 180.25%(b)
Ratio of net investment income
to average net assets applicable
to Class B Certificates 11.69% 12.83% 32.93% 25.57% 55.24%
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 operating expenses to average net
assets applicable to Class B Certificates was 5.47%, 5.61%, 6.47%, 7.96%,
and 11.64% in 1998, 1997, 1996, 1995, and 1994, 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 and Business
College and University Facility Loan Trust One (the 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 Business (Continued)
All payments on the Loans and earnings under the 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 Significant Accounting Policies
(a) College and University Facility Loans
The Loans were purchased and recorded at a discount 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, 1998, was approximately $35,274,000. As a
result of prepayments of Loans in the year ended November 30, 1998,
additional interest income of approximately $95,000 was recognized.
9
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
2. Summary of Significant Accounting Policies (Continued)
(a) College and University Facility Loans (Continued)
The Trust's policy is to discontinue the accrual of interest on Loans for
which payment of principal or interest is 180 days or more past due or for
other such Loans if management believes the 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, 1998, two loans had been placed on
nonaccrual status, as discussed in Note 6.
(b) Other Investments
Other investments, which are included in Investments in 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 Significant Accounting Policies (Continued)
(d) Deferred Bond Issuance Costs
Deferred Bond issuance costs are being amortized using the effective
interest-rate method, assuming 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 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 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 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 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 experience, current economic conditions and
their effect on borrowers, the performance of individual Loans in relation
to contract terms, adverse situations that may affect the borrower's
ability to pay and the estimated fair values of collateral.
11
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
2. Summary of Significant Accounting Policies (Continued)
(e) Accounting for Impairment of a Loan and Allowance for Loan Losses
(Continued)
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.
All tax earnings and profits have been distributed, therefore all
accumulated undistributed net investment income of has been reclassified to
as paid-in capital as of November 30, 1998. This reclassification results
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.
12
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
2. Summary of Significant Accounting Policies (Continued)
(g) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities 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, 1998 consist of the following:
Principal
Interest Stated Amount
Type Rate Maturity (000s)
===========================================================================
Term 10.20% June 1, 2002 $ 23,764
Term 10.55 December 1, 2014 37,577
---------------------------------------------------------------------------
$ 61,341
===========================================================================
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 1, 1998, the
Trust made the mandatory redemption of $3,673,996 on the Bonds maturing on
June 1, 2002.
13
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
3. Bonds (Continued)
The aggregate scheduled maturities of the Bonds, including the scheduled
mandatory redemptions at November 30, 1998, are as follows:
Fiscal Year Amount
==============================================================
1999 $ 6,829
2000 6,169
2001 5,570
2002 5,196
2003 4,447
Thereafter 33,130
--------------------------------------------------------------
Total $ 61,341
==============================================================
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,
1998 Bond Payment were sufficient to satisfy the maximum funding
requirement of $7,677,413.
14
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
4. Administrative Agreements
(a) Servicer
As compensation for the services provided under the servicing agreement,
the GMAC Commercial Mortgage Corporation (GMAC) receives a collection fee.
This fee is paid on each date of payment for each Loan and is equal to .055
of 1% of the outstanding principal balance of such Loan divided by the
number of payments of principal and interest in a calendar year. For the
year ended November 30, 1998, this fee totaled $51,047. GMAC was also
reimbursed for other related expenses of $20,024.
(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, 1998. In addition, the Owner Trustee was
reimbursed $712 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 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, 1998, the fees amounted to $17,964. In addition, the Bond Trustee
was reimbursed $2,562 for out-of-pocket expenses.
15
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
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 redeemed by the Trust, in whole
or in part, on any 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 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.
16
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
5. Certificates (Continued)
On December 1, 1998, the Trust paid $951,247 to the holders of Class A
Preferred certificates, of which $166,388 was for payment of dividends and
$784,859 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.
6. Allowance for Loan Losses
An analysis of the allowance for loan losses for the year ended November
30, 1998 is summarized as follows:
Balance, beginning of period $ 925,000
Provision 200,000
Charge-offs --
--------------------------------------------------------
Balance, end of period $ 1,125,000
========================================================
At November 30, 1998, the recorded investment in loans that are considered
to be impaired under SFAS 114 was approximately $1,045,000 with a related
allowance for loan losses of $727,000.
The average recorded investment in impaired loans during the year ended
November 30, 1998 was approximately $1,092,000. For the year ended November
30, 1998, no interest income was recognized on impaired loans.
The amortized cost of the loans placed on nonaccrual status is
approximately $1,045,000 at November 30, 1998. See "Accounting for
Impairment of a Loan and Allowance for 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,
1998, excluding payments for Loans in Default, as defined in the Indenture,
are as follows:
Principal Interest
Payments Payments Total
Fiscal year (000s) (000s) (000s)
=====================================================================
1999 $ 9,854 $ 2,783 $ 12,637
2000 8,671 2,479 11,150
2001 8,131 2,200 10,331
2002 7,333 1,940 9,273
2003 6,539 1,713 8,252
Thereafter 50,247 9,481 59,728
---------------------------------------------------------------------
Total $ 90,775 $ 20,596 $ 111,371
=====================================================================
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.
As of November 30, 1998, there were two Loans in Default, with a combined
unpaid principal balance of approximately $3,041,000.
The following analysis summarizes the stratification of the loan portfolio
by type of collateral and institution as of November 30, 1998:
Amortized
Number Cost
Type of Collateral of Loans (000s) %
==========================================================================
Loans secured by a
first mortgage 128 $ 28,061 47.9%
Loans not secured by
a first mortgage 79 30,481 52.1
--------------------------------------------------------------------------
Total Loans 207 $ 58,542 100.0%
==========================================================================
18
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
7. Loans (Continued)
Amortized
Number Cost
Type of Institution of Loans (000s) %
==========================================================================
Private 133 $ 27,859 47.6%
Public 74 30,683 52.4
--------------------------------------------------------------------------
Total Loans 207 $ 58,542 100.0%
==========================================================================
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 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 (Continued)
A number of borrowers are currently experiencing 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 of Financial Instruments
SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
allows for the use of a wide 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.
20
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
8. Fair Value of Financial Instruments (continued)
Current market prices are not available for most of the Trust's financial
instruments of Financial since an active market generally does not exist
for such instruments. In accordance Instruments with the terms of the
Indenture, the Trust is required to hold all of the Loans to (Continued)
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 instruments for financial reporting purposes. In
applying the methodology, the calculations have been adjusted for the
change in the relevant market rates 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, 1998 are as follows:
Book Value Fair Value
(000s) (000s)
====================================================================
Loans $ 57,417* $ 78,015
Investment Agreements:
Revenue Fund 15,725 17,044
Liquidity Fund 2,496 3,735
--------------------------------------------------------------------
$ 75,638 $ 98,794
====================================================================
Bonds $ 61,341 $ 76,606
====================================================================
*Net of Allowance for Loan Losses of $1,125,000.
21
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
November 30, 1998
(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)
------- ----------- ------ ---- -------- --------
<S> <C> <C> <C> <C> <C>
COLLEGE AND UNIVERSITY LOANS (75.9%)
---------- A ---------
$1,350 Albion College 3.00 10/01/2015 12.51 $696
52 Albion College 3.00 11/01/1999 12.74 47
105 Albright College 3.50 05/01/2001 11.70 94
368 Alfred University 3.00 11/01/2007 12.41 245
20 Allegheny College 3.00 07/01/1999 12.73 18
61 Allegheny College 3.50 07/01/2001 12.83 51
535 Alma College 3.00 04/01/2010 11.87 343
260 Alverno College 3.375 10/01/2003 12.52 202
166 American Graduate School of
International Management 3.00 11/01/2010 12.59 101
270 Anderson College 3.00 03/01/2010 13.02 164
914 Appalachian State University 3.00-3.625 07/01/2004 11.80 693
352 Arizona State University 3.50 10/01/2003 11.72 283
210 Atlantic Union College 3.00 05/01/2023 12.68 90
1,410 Augsburg College 3.00 04/01/2016 12.95 713
808 Azusa Pacific University 3.00 04/01/2017 12.96 397
---------- B ---------
665 Baptist College at Charleston 3.00 03/01/2014 12.96 357
22 Barnard College 3.125 04/01/1999 12.82 21
83 Benedict College 3.00 11/01/2006 12.42 57
16 Bethune-Cookman College 3.00 10/01/2000 12.71 14
273 Birmingham-Southern College 3.00 10/01/2006 12.48 193
440 Birmingham-Southern College 3.00 10/01/2010 12.47 265
130 Black Hills State College 3.00 10/01/2005 11.76 96
100 Black Hills State College 3.00 10/01/2007 11.77 69
892 Boston University 3.00 12/31/2022 11.87 411
196 Bryan College 3.00 02/01/2010 12.68 120
40 Buena Vista College 3.625 02/01/2001 13.45 35
194 Buena Vista College 3.00 11/01/2009 12.41 121
---------- C ---------
2,110 California State University 3.00 11/01/2012 10.57 1,317
612 Carnegie - Mellon University 3.00 11/01/2017 10.45 347
1,995 Case Western Reserve University 3.00 04/01/2016 10.54 1,167
15 Centenary College of Louisiana 2.875 10/01/1999 12.82 14
92 Central Missouri State 3.125 07/01/2000 11.83 81
200 Central Missouri State 3.50 07/01/2001 11.80 169
59 Central Washington University 3.50 10/01/1999 10.99 55
614 Central Washington University 3.75 10/01/2004 11.03 492
</TABLE>
22
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
November 30, 1998
(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)
------- ----------- ------ ---- -------- --------
<S> <C> <C> <C> <C> <C>
$36 Chaminade College of Honolulu 3.50 10/01/2002 12.55 $29
278 Chaminade College of Honolulu 3.00 10/01/2011 12.47 163
89 Champlain College 3.00 10/01/2010 12.66 54
219 Claflin College 3.00 11/01/2002 12.57 178
46 Clark Atlanta University 3.00 11/01/1999 12.75 42
1,025 College of Charleston 3.00 07/01/2016 12.02 538
600 College of St. Thomas 3.00 04/01/2017 12.95 296
541 College of the Virgin Islands 3.00 10/01/2004 11.83 408
252 Colorado State University 3.50 04/01/2001 12.17 222
1,060 Colorado State University 3.625 04/01/2005 11.98 817
394 Community College of Rhode Island 3.00 04/01/2018 12.10 199
725 Concordia College 3.00 05/01/2011 12.64 434
89 Contra Costa College 3.00 04/01/2009 12.34 58
29 Cornell University 3.00 11/01/1999 10.84 27
358 Curry College 3.00 04/01/2010 12.74 220
---------- D ---------
27 Dana College 3.50 04/01/2001 13.39 23
335 Daniel Webster College 3.00 04/01/2019 12.99 155
384 Dean Junior College 3.00 04/01/2016 12.96 200
41 Dillard University 3.375 04/01/2002 13.41 35
51 Dillard University 3.00 11/01/2000 12.68 45
1,180 Drake University 3.00 10/01/2012 12.71 671
80 Drexel University 3.75 05/01/2000 11.72 75
---------- E ---------
377 Eckerd College 3.50 07/01/2003 12.53 292
53 Eckerd College 3.75 03/01/2005 13.04 40
104 Emory University 3.375 07/01/2002 12.59 86
265 Emory University 3.375 03/01/2003 13.25 210
435 Emporia State University 3.00 04/01/2009 12.33 283
---------- F ---------
259 Fairleigh Dickinson University 3.50 11/01/2003 11.66 207
116 Fairleigh Dickinson University 3.00 11/01/2020 12.09 55
26 Findlay College 3.375 07/01/2002 12.56 21
340 Florida Atlantic University 3.00 07/01/2006 11.85 238
68 Florida Institute of Technology 3.00 02/01/2006 13.17 48
160 Foothill College 3.00 10/01/2006 11.76 114
214 Fort Hays State University 3.375 10/01/2002 11.74 176
18 Fort Lewis College 3.125 10/01/1999 11.84 16
---------- G ---------
779 Gordon College 3.50 04/01/2013 12.84 448
</TABLE>
23
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
November 30, 1998
(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)
------- ----------- ------ ---- -------- --------
<S> <C> <C> <C> <C> <C>
$1,140 Grambling State University 3.00-3.75 10/01/2005 11.70 $844
---------- H ---------
128 Hampshire College 3.00 11/01/2006 12.43 89
710 Harcum Junior College 3.00 11/01/2015 12.44 369
430 Haverford College 3.625 11/01/2013 12.29 249
35 High Point College 3.375 12/01/2002 11.63 27
155 High Point College 3.00 12/01/2007 11.72 100
---------- I ---------
585 Indiana University 3.50 04/01/2000 11.56 540
150 Inter American University of San Juan 2.75-3.00 12/01/2001 11.63 126
1,025 Iowa State University of Ames 3.00 07/01/2007 10.63 724
---------- J ---------
420 Jackson State University 3.00 01/01/2007 12.50 288
62 Jarvis Christian College 3.50 04/01/2001 13.41 54
564 Jarvis Christian College 3.00 04/01/2019 12.96 264
---------- K ---------
25 Kansas Newman College 3.125 04/01/2000 13.71 23
151 Kansas Newman College 3.00 04/01/2006 13.10 105
265 Kansas State University 3.375 04/01/2002 11.79 226
70 Kansas State University 3.50 04/01/2000 11.52 64
138 Kent State University 2.875 12/01/1999 10.01 130
1,370 Kent State University 3.00 12/01/2008 10.55 953
52 Kenyon College 3.00 11/01/1999 10.69 48
65 Kirksville College of Kirksville, Missouri 3.125 12/01/2000 11.63 57
173 Knox College 3.00 05/01/2007 12.72 118
---------- L ---------
248 Laredo Junior College 3.00 08/01/2009 11.82 157
116 Lawrence University 3.375 04/01/2002 13.34 96
11 Lincoln College 3.00 12/01/1998 11.63 10
36 Linfield College 3.125 10/01/1999 12.80 33
610 Long Island University 3.00 06/01/2016 12.34 306
651 Long Island University 3.75 10/01/2005 12.42 478
141 Louisiana State University 3.50 07/01/2002 10.50 121
520 Louisiana State University 3.50 04/01/2002 11.10 449
97 Louisiana Tech University 3.50 04/01/2000 12.72 91
90 Loyola University - Mundelein Branch 3.125 10/01/2000 12.70 78
---------- M ---------
440 McKendree College 3.00 04/01/2007 13.07 297
58 Medical College of Wisconsin 3.00 10/01/1999 12.79 53
21 Merrimack College 2.875 04/01/1999 13.83 20
</TABLE>
24
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
November 30, 1998
(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)
------- ----------- ------ ---- -------- --------
<S> <C> <C> <C> <C> <C>
$742 Michigan State University 3.00 05/01/2020 10.96 $385
1,410 Middlebury College 3.00 04/01/2018 12.87 727
40 Midland Lutheran College 3.50 04/01/2001 13.41 35
19 Midland Lutheran College 2.875 04/01/1999 13.77 18
312 Mississippi State University 3.50 12/01/2001 10.82 274
100 Mississippi Valley State 3.00 07/01/2008 11.89 66
553 Missouri Southern State College 3.00 12/01/2008 10.56 383
309 Missouri Western State College 3.00 10/01/2008 11.77 205
413 Montclair State College 3.00 07/01/2008 11.32 276
295 Monterey Peninsula College 3.00 10/01/2018 11.95 144
113 Montreat-Anderson College 3.00 12/01/2019 12.19 54
174 Moravian College 3.00 11/01/2000 12.67 151
13 Morehouse College 2.875 07/01/1999 10.48 12
83 Morehouse College 3.375 07/01/2001 10.57 72
955 Morris College 3.00 11/01/2013 12.42 525
---------- N ---------
398 New England College 3.625 10/01/2013 12.37 232
1,025 New England College 3.00 04/01/2019 12.96 480
109 North Carolina Agriculture
and Technical State University 3.75 07/01/2004 10.02 88
1,005 North Carolina State University 3.00 09/01/2006 8.02 813
46 Northeastern University 3.00 05/01/1999 13.10 43
---------- O ---------
84 Occidental College 3.50 10/01/2001 12.62 71
2,135 Old Dominion University 3.00 06/01/2013 11.70 1,210
129 Ouachita Baptist University 3.375 12/01/2002 11.63 106
---------- P ---------
50 Pacific University 3.50 10/01/2001 12.66 43
37 Pacific University 3.00 11/01/1999 12.75 34
27 Pan American University 3.50 10/01/2000 11.00 24
440 Point Loma Nazarene College 3.75 04/01/2005 13.05 331
86 Providence Hospital 3.375 01/01/2002 11.33 73
440 Purdue University 3.50 07/01/2001 10.26 382
---------- R ---------
245 Riverside Hospital 3.00 04/01/2007 13.09 168
683 Rivier College 3.625 04/01/2014 12.78 390
---------- S ---------
405 San Diego State University 3.00 11/01/2021 11.93 189
835 San Francisco State University 3.00 11/01/2021 11.93 387
1,148 Sarah Lawrence College 3.00 11/01/2021 12.64 522
</TABLE>
25
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
November 30, 1998
(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)
------- ----------- ------ ---- -------- --------
<S> <C> <C> <C> <C> <C>
$278 Scripps College 3.00 10/01/2005 12.51 $201
106 Simpson College 3.375 07/01/2001 12.18 89
76 South Dakota State University 3.125 04/01/2000 12.76 72
1,505 South Dakota State University 3.00 04/01/2016 12.31 801
17 South Plains Junior College District 3.125 10/01/1999 11.85 16
1,195 Southeast Missouri State 3.50 04/01/2005 12.32 905
236 Southern Arkansas University 3.75 10/01/2004 11.76 185
33 Southern Nazarene University 3.125 04/01/2000 13.60 30
47 Spring Arbor College 3.00 11/01/2000 12.67 41
172 Springfield College 3.00 05/01/2011 12.59 103
63 St. Augustine's College 3.00 11/01/2001 12.61 53
207 St. Edward's University 3.625 04/01/2013 12.80 121
240 St. Francis College 3.50 05/01/2001 12.88 210
336 St. Mary's University of San Antonio 3.75 11/01/2002 12.47 275
210 St. Michael's College 3.00 04/01/2008 13.06 140
326 Stanford University 3.125 04/01/2002 9.82 290
70 Stanford University 3.00 05/01/1999 9.61 68
946 Stanford University 3.00 05/01/2024 10.40 475
59 Stetson University 3.50 09/01/2001 12.48 51
34 Stillman College 3.00 02/01/2007 13.24 23
2,871 Suomi College (A) 3.00 08/01/2014 12.70 891
160 Susquehanna University 3.00 11/01/2006 12.44 112
410 Susquehanna University 3.625 11/01/2014 12.32 231
142 Swarthmore College 3.00 11/01/2013 12.30 79
---------- T ---------
630 Taylor University 3.00 10/01/2010 12.45 379
493 Temple University 3.375 11/01/2014 11.99 283
120 Temple University 2.875 05/01/1999 13.18 114
300 Texas College 3.00 04/01/2007 13.09 203
708 Texas Tech University 3.625 03/01/2013 10.80 454
5,020 Texas Tech University 3.375-3.50 03/01/2012 10.83 3,260
128 Tougaloo College 3.00 06/01/2021 12.44 57
661 Tufts University 3.625 10/01/2004 12.47 504
---------- U ---------
1,866 University of Alabama 3.00 05/01/2021 12.27 878
82 University of Alaska 3.125 04/01/2001 12.63 72
196 University of Arkansas at Monticello 3.625 04/01/2004 12.40 155
13 University of Arkansas at Little Rock 2.875 04/01/1999 12.01 12
35 University of Chicago 3.50 12/01/2001 11.63 30
235 University of Florida 3.00 01/01/1999 12.70 222
</TABLE>
26
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
November 30, 1998
(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)
------- ----------- ------ ---- -------- --------
<S> <C> <C> <C> <C> <C>
$1,073 University of Florida 3.00 01/01/2005 12.51 $798
1,010 University of Hawaii at Manoa 3.00 10/01/2006 11.76 713
1,282 University of Missouri at Columbia 3.625 05/01/2004 11.63 1,037
82 University of Missouri at Rolla 3.50 05/01/2003 11.68 69
252 University of Montevallo 3.00 05/01/2023 12.30 112
141 University of Nebraska 3.00 07/01/2013 10.59 87
309 University of North Carolina 3.50 07/01/2002 10.60 259
1,430 University of North Carolina 3.00 01/01/2018 11.49 753
1,780 University of Notre Dame 3.00 04/01/2018 12.95 856
50 University of Pittsburgh 3.00 11/01/1999 9.95 47
296 University of Portland 3.00 04/01/2013 12.95 163
439 University of Rochester 3.375 10/01/2002 10.77 375
1,090 University of Rochester 3.00 10/01/2006 10.92 793
903 University of South Dakota 3.625 10/01/2013 11.74 539
2,224 University of South Florida 3.00 07/01/2013 11.97 1,245
297 University of Steubenville 3.375 04/01/2012 12.88 174
337 University of Steubenville 3.00 04/01/2017 12.96 166
2,854 University of Vermont 3.00 10/01/2019 12.19 1,380
100 University of Washington 3.50 08/01/2000 11.06 89
170 Upsala College (A) 2.75 10/01/1996 12.65 155
625 Utah State University 3.50 04/01/2002 11.76 534
---------- V ---------
1,024 Vanderbilt University 3.00 08/01/2005 10.69 771
744 Vanderbilt University 3.00 06/30/2009 10.39 512
---------- W ---------
110 West Virginia Institute of Technology 3.00 06/01/1999 11.66 100
393 West Virginia Wesleyan College 3.50 05/01/2002 13.43 322
135 Western Carolina University 3.75 11/01/2001 11.67 116
1,360 Western Maryland College 3.00 11/01/2016 12.44 689
175 Western Washington University 3.00 10/01/2007 11.16 123
53 Whittier College 3.50 04/01/2001 13.53 48
---------- X ---------
560 Xavier University 3.00 10/01/2017 12.54 271
- --------- --------
93,816 Total College and University Loans 58,542
- ---------
Allowance for Loan Losses 1,125
--------
Net College and University Loans 57,417
--------
</TABLE>
27
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
November 30, 1998
(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)
------- ----------- ------ ---- -------- --------
<S> <C> <C> <C> <C> <C>
INVESTMENT AGREEMENTS (24.1%)
$2,496 FNMA #787 Liquidity Fund 8.00 12/01/2014 8.00 $2,496
15,725 FNMA #786 Revenue Fund 5.00 12/01/2014 5.00 15,725
- --------- ---------
18,221 Total Investment Agreements 18,221
- --------- ---------
$112,037 Total Investments (100.0%) $75,638
========= =========
</TABLE>
(A) These institutions have been placed on nonaccrual status as more fully
described in Note 6.
28
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the College
and University Facility Loan Trust One November 31, 1998 financial statements
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 75638
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 1012
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 985
<TOTAL-ASSETS> 77537
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 61341
<OTHER-ITEMS-LIABILITIES> 4303
<TOTAL-LIABILITIES> 65644
<SENIOR-EQUITY> 1727
<PAID-IN-CAPITAL-COMMON> 9736
<SHARES-COMMON-STOCK> 1001643
<SHARES-COMMON-PRIOR> 1001643
<ACCUMULATED-NII-CURRENT> (572)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 11893
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8246
<OTHER-INCOME> 0
<EXPENSES-NET> 7094
<NET-INVESTMENT-INCOME> 1152
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 952
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 43
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 296
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (623)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 9737
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 6690
<GROSS-EXPENSE> 7094
<AVERAGE-NET-ASSETS> 12280
<PER-SHARE-NAV-BEGIN> 9.54
<PER-SHARE-NII> 1.15
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.04)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> (.30)
<PER-SHARE-NAV-END> 10.15
<EXPENSE-RATIO> .58
<AVG-DEBT-OUTSTANDING> 64735
<AVG-DEBT-PER-SHARE> 64.63
</TABLE>
