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. Computer software
systems in use today may not be able to 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 continue to evaluate the reports received periodically from its
key service providers to monitor any compliance issues. 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 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 continue to evaluate the reports received periodically from
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, 1999
<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, 1999, the related statements of operations
and cash flows for the year then ended, 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 and selected financial highlights. Our procedures
included confirmation of the Loans and Investments as of November 30, 1999 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,
1999, the results of its operations and its cash flows for the year then ended,
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 5, 2000
<PAGE>
College and University
Facility Loan Trust One
Balance Sheet
================================================================================
<TABLE>
<CAPTION>
November 30, 1999
==================================================================================================
<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) $ 68,330,763
Cash 70,320
Interest receivable 935,682
Deferred bond issuance costs (Note 2) 687,046
- --------------------------------------------------------------------------------------------------
Total assets 70,023,811
==================================================================================================
Liabilities
Bonds payable (Notes 3 and 8) 54,511,505
Interest payable (Note 3) 2,845,847
Accrued expenses and other liabilities 151,205
Payable for redemption of Class A Preferred certificates (Note 5) 916,811
Class A dividends payable (Note 5) 82,449
- --------------------------------------------------------------------------------------------------
Total liabilities 58,507,817
- --------------------------------------------------------------------------------------------------
Net Assets
Class A Preferred certificates, par value $1 - authorized and outstanding -
327,709 certificates (preference as to annual dividends of 13.25%,
mandatory redemption and liquidation at par value) (Note 5) 327,709
- --------------------------------------------------------------------------------------------------
Class B certificates, par value $1 - authorized, issued
and outstanding - 1,001,643 certificates (Note 5) 1,001,643
Distributions in excess of tax earnings (Note 2) (1,207,449)
Paid-in capital (Note 2) 11,394,091
- --------------------------------------------------------------------------------------------------
Total net assets applicable to Class B certificateholders 11,188,285
- --------------------------------------------------------------------------------------------------
Total net assets $ 11,515,994
==================================================================================================
Net asset value per Class B certificate
(based on 1,001,643 certificates outstanding) $ 11.17
==================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
College and University
Facility Loan Trust One
Statement of Operations
================================================================================
<TABLE>
<CAPTION>
Year ended November 30, 1999
==================================================================================================
<S> <C>
Investment income:
Interest income (Note 2) $ 7,574,726
- --------------------------------------------------------------------------------------------------
Expenses:
Interest expense (Notes 2 and 3) 5,971,745
Servicer fees (Note 4) 63,827
Trustee fees (Note 4) 43,880
Other trust and bond administration expenses 276,673
- --------------------------------------------------------------------------------------------------
Total expenses 6,356,125
- --------------------------------------------------------------------------------------------------
Net investment income 1,218,601
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,218,601
Dividends to Class A Preferred certificateholders (196,840)
- --------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Class B
certificateholders resulting from operations $ 1,021,761
==================================================================================================
</TABLE>
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, 1999
==================================================================================================
<S> <C>
Cash flows from operating activities:
Interest received $ 3,642,253
Interest paid (6,200,913)
Operating expenses paid (390,577)
- --------------------------------------------------------------------------------------------------
Net cash used for operating activities (2,949,237)
- --------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Net decrease in funds held under investment agreements 591,538
Principal payments on Loans 10,725,150
- --------------------------------------------------------------------------------------------------
Net cash provided by investing activities 11,316,688
- --------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Principal repayments on Bonds (6,829,349)
Redemption of Class A Preferred certificates (1,267,001)
Dividends to Class A Preferred certificates (280,779)
- --------------------------------------------------------------------------------------------------
Net cash used for financing activities (8,377,129)
- --------------------------------------------------------------------------------------------------
Net decrease in cash (9,678)
Cash, beginning of year 79,998
- --------------------------------------------------------------------------------------------------
Cash, end of year $ 70,320
==================================================================================================
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 $ 1,218,601
Decrease in interest receivable 76,600
Decrease in accrued expenses and other liabilities (6,198)
Decrease in Bond interest payable (348,296)
Amortization of deferred Bond issuance costs 119,129
Amortization of purchase discount on Loans (4,009,073)
- --------------------------------------------------------------------------------------------------
Net cash used for operating activities $ (2,949,237)
==================================================================================================
</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, 1999 1998
=============================================================================================================
<S> <C> <C>
From operations:
Net investment income $ 1,218,601 $ 1,152,132
Provision for loan losses -- (200,000)
Dividends to certificateholders (Notes 2 and 5):
Class A Preferred certificateholders ($.1325 per certificate annually):
From net investment income (51,574) (42,568)
As tax return of capital (145,266) (296,137)
- -------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Class B
certificateholders resulting from operations 1,021,761 613,427
- -------------------------------------------------------------------------------------------------------------
Capital certificate transactions (Note 5):
Redemptions of Class A Preferred certificates, 1,398,953
and 1,236,516 certificates in 1999 and 1998, respectively (1,398,953) (1,236,516)
- -------------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from capital
certificate transactions (1,398,953) (1,236,516)
- -------------------------------------------------------------------------------------------------------------
Net decrease in net assets (377,192) (623,089)
Net assets:
Beginning of year 11,893,186 12,516,275
- -------------------------------------------------------------------------------------------------------------
End of year $ 11,515,994 $ 11,893,186
=============================================================================================================
</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, 1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.15 $ 9.54 $9.08 $7.27 $6.61
- -------------------------------------------------------------------------------------------------------------------------
Net investment income 1.21 1.15 1.20 2.69 1.77
Provision for loan losses -- (.20) (.20) (.20) (.40)
Dividends to Class A Preferred
certificateholders:
From net investment income (.05) (.04) (.15) (.17) (.64)
As tax return of capital (.14) (.30) (.39) (.51) (.07)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $11.17 $10.15 $9.54 $9.08 $7.27
=========================================================================================================================
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 $ 327,709 $ 1,726,662 $2,963,176 $4,267,199 $5,376,365
Net assets applicable to Class B
certificates, end of year 11,188,285 10,166,524 9,553,099 9,099,485 7,281,153
=========================================================================================================================
Ratios and Supplemental Data:
Ratio of operating expenses to average
net assets applicable to
Class B certificates 59.53%(b) 71.95%(b) 83.43%(b) 103.94%(b) 133.48%(b)
Ratio of net investment income
to average net assets applicable
to Class B certificates 11.41% 11.69% 12.83% 32.93% 25.57%
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 3.60%, 2.73%, 2.40%, 4.48%
and 5.42% in 1999, 1998, 1997, 1996 and 1995, 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 Bank One Trust Company, NA, formerly
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 All payments on the Loans and earnings under the
and Business investment agreements and any required transfers from
(Continued) 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,
1999 was approximately $31,265,000. As a result of
prepayments of Loans in the year ended November 30,
1999, additional interest income of approximately
$182,000 was recognized.
9
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
2. Summary of (a) College and University Facility Loans (Continued)
Significant
Accounting The Trust's policy is to discontinue the accrual of
Policies interest on Loans for which payment of principal or
(Continued) 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, 1999, one Loan 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 (d) Deferred Bond Issuance Costs
Significant
Accounting Deferred Bond issuance costs are being amortized using
Policies the effective interest-rate method, assuming that all
(Continued) 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 (e) Accounting for Impairment of a Loan and Allowance
Significant for Loan Losses (Continued)
Accounting
Policies The factors discussed above are inherently difficult to
(Continued) 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.
In accordance with SOP 93-2, the Trust reclassifies
certain amounts from undistributed net investment
income to paid in capital. The cumulative effect of
such reclassifications was $1,207,449 as of November
30, 1999 and is reported in net assets as a
Distribution in Excess of Tax Earnings in the
accompanying balance sheet. This reclassification has
no impact on the net investment income or net assets of
the Trust.
The reclassification primarily 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 are classified as an accumulated deficit.
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 conformity
Policies with generally accepted accounting principles requires
(Continued) 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, 1999 consist of
the following:
Principal
Interest Stated Amount
Type Rate Maturity (000s)
=======================================================
Term 10.20% June 1, 2002 $16,935
Term 10.55 December 1, 2014 37,577
-------------------------------------------------------
$54,512
=======================================================
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, 1999, the Trust made the mandatory
redemption of $3,527,788 on the Bonds maturing on June
1, 2002.
13
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
3. Bonds The aggregate scheduled maturities of the Bonds,
(Continued) including the scheduled mandatory redemptions at
November 30, 1999, are as follows:
Amount
Fiscal Year (000's)
=======================================================
2000 $ 6,168
2001 5,570
2002 5,197
2003 4,447
2004 4,397
Thereafter 28,733
-------------------------------------------------------
Total $54,512
=======================================================
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 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, 1999 Bond Payment were sufficient
to satisfy the maximum reserve fund requirement of
$7,486,005.
14
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
4. Administrative (a) Servicer
Agreements
As compensation for the services provided under the
servicing agreement, GMAC Commercial Mortgage
Corporation (GMAC) receives a collection fee. This fee
is earned 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, 1999, this fee totaled $63,827,
which includes other related expenses of $10,863.
(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, earned fees of
$11,950 and $10,755, respectively, for the year
ended November 30, 1999. In addition, the Owner
Trustee incurred $2,448 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, 1999, the fees amounted to
$14,734. In addition, the Bond Trustee incurred
$3,993 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.
On December 2, 1999, the Trust paid $999,260 to the
holders of Class A Preferred certificates, of which
$82,449 was for payment of dividends and $916,811 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 loan losses for the
Loan Losses twelve months ended November 30, 1999 is summarized as
follows:
Balance, beginning of period $1,125,000
Provision --
Charge-offs --
-------------------------------------------------------
Balance, end of period $1,125,000
=======================================================
At November 30, 1999, the recorded investment in loans
that are considered to be impaired under SFAS 114 was
approximately $804,000 with a related allowance for
loan losses of $563,000.
The average recorded investment in impaired loans
during the year ended November 30, 1999 was
approximately $900,000. For the year ended November 30,
1999, no interest income was recognized on impaired
loans.
The amortized cost of the loans placed on nonaccrual
status is approximately $804,000 at November 30, 1999.
See Note 2 (e), "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, 1999, excluding payments for Loans
in Default, as defined in the Indenture, are as
follows:
Principal Interest
Payments Payments Total
Fiscal year (000s) (000s) (000s)
=======================================================
2000 $ 8,573 $ 2,466 $11,039
2001 8,030 2,180 10,210
2002 7,230 1,924 9,154
2003 6,431 1,700 8,131
2004 6,060 1,497 7,557
Thereafter 43,896 7,962 51,858
-------------------------------------------------------
Total $80,220 $17,729 $97,949
=======================================================
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, 1999, there was one Loan in Default,
with an unpaid principal balance of approximately
$2,871,000.
18
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
7. Loans The following analysis summarizes the stratification of
(Continued) the loan portfolio by type of collateral and
institution as of November 30, 1999:
Amortized
Number Cost
Type of Collateral of Loans (000s) %
=======================================================
Loans secured by a
first mortgage 112 $25,114 48.5%
Loans not secured by
a first mortgage 67 26,712 51.5
-------------------------------------------------------
Total Loans 179 $51,826 100.0%
=======================================================
Amortized
Number Cost
Type of Institution of Loans (000s) %
=======================================================
Private 114 $24,616 47.5%
Public 65 27,210 52.5
-------------------------------------------------------
Total Loans 179 $51,826 100.0%
=======================================================
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.
19
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
7. Loans The collateral for Loans that are secured by a mortgage
(Continued) 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.
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 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.
20
<PAGE>
College and University
Facility Loan Trust One
Notes to Financial Statements
================================================================================
8. Fair Value Current market prices are not available for most of the
of Financial Trust's financial instruments since an active market
Instruments generally does not exist for such instruments. In
(Continued) 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 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, 1999 are as follows:
Book Value Fair Value
(000s) (000s)
=======================================================
Loans $50,701* $64,590
Investment Agreements:
Revenue Fund 15,030 16,821
Liquidity Fund 2,600 3,355
-------------------------------------------------------
$68,331 $84,766
=======================================================
Bonds $54,512 $64,173
=======================================================
*Net of Allowance for Loan Losses of $1,125,000.
21
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
November 30, 1999
(Dollar Amounts in Thousands)
<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 (74.2%)
---------- A ---------
$1,290 Albion College 3.00 10/01/2015 12.51 $685
65 Albright College 3.50 05/01/2001 11.70 61
332 Alfred University 3.00 11/01/2007 12.41 229
39 Allegheny College 3.50 07/01/2001 12.83 34
495 Alma College 3.00 04/01/2010 11.87 327
210 Alverno College 3.375 10/01/2003 12.52 169
250 Anderson College 3.00 03/01/2010 13.02 157
769 Appalachian State University 3.00-3.625 07/01/2004 11.80 603
282 Arizona State University 3.50 10/01/2003 11.72 235
204 Atlantic Union College 3.00 05/01/2023 12.68 89
1,350 Augsburg College 3.00 04/01/2016 12.95 702
778 Azusa Pacific University 3.00 04/01/2017 12.96 394
---------- B ---------
630 Baptist College at Charleston 3.00 03/01/2014 12.96 348
74 Benedict College 3.00 11/01/2006 12.42 53
8 Bethune-Cookman College 3.00 10/01/2000 12.71 7
238 Birmingham-Southern College 3.00 10/01/2006 12.48 175
408 Birmingham-Southern College 3.00 10/01/2010 12.47 254
112 Black Hills State College 3.00 10/01/2005 11.76 86
90 Black Hills State College 3.00 10/01/2007 11.77 64
877 Boston University 3.00 12/31/2022 11.87 408
182 Bryan College 3.00 02/01/2010 12.68 115
26 Buena Vista College 3.625 02/01/2001 13.45 24
179 Buena Vista College 3.00 11/01/2009 12.41 116
---------- C ---------
1,990 California State University 3.00 11/01/2012 10.57 1,276
587 Carnegie - Mellon University 3.00 11/01/2017 10.45 340
1,905 Case Western Reserve University 3.00 04/01/2016 10.54 1,139
42 Central Missouri State 3.125 07/01/2000 11.83 38
136 Central Missouri State 3.50 07/01/2001 11.80 119
514 Central Washington University 3.75 10/01/2004 11.03 424
27 Chaminade College of Honolulu 3.50 10/01/2002 12.55 23
260 Chaminade College of Honolulu 3.00 10/01/2011 12.47 157
82 Champlain College 3.00 10/01/2010 12.66 52
161 Claflin College 3.00 11/01/2002 12.57 136
985 College of Charleston 3.00 07/01/2016 12.02 534
575 College of St. Thomas 3.00 04/01/2017 12.95 291
457 College of the Virgin Islands 3.00 10/01/2004 11.83 357
172 Colorado State University 3.50 04/01/2001 12.17 157
</TABLE>
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
November 30, 1999
(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>
$920 Colorado State University 3.625 04/01/2005 11.98 $733
379 Community College of Rhode Island 3.00 04/01/2018 12.10 196
675 Concordia College 3.00 05/01/2011 12.64 417
333 Curry College 3.00 04/01/2010 12.74 212
---------- D ---------
18 Dana College 3.50 04/01/2001 13.39 16
325 Daniel Webster College 3.00 04/01/2019 12.99 155
369 Dean Junior College 3.00 04/01/2016 12.96 199
28 Dillard University 3.375 04/01/2002 13.41 25
21 Dillard University 3.00 11/01/2000 12.68 19
1,110 Drake University 3.00 10/01/2012 12.71 651
20 Drexel University 3.75 05/01/2000 11.72 19
---------- E ---------
306 Eckerd College 3.50 07/01/2003 12.53 246
46 Eckerd College 3.75 03/01/2005 13.04 36
73 Emory University 3.375 07/01/2002 12.59 62
215 Emory University 3.375 03/01/2003 13.25 178
400 Emporia State University 3.00 04/01/2009 12.33 269
---------- F ---------
209 Fairleigh Dickinson University 3.50 11/01/2003 11.66 173
112 Fairleigh Dickinson University 3.00 11/01/2020 12.09 55
20 Findlay College 3.375 07/01/2002 12.56 17
300 Florida Atlantic University 3.00 07/01/2006 11.85 217
60 Florida Institute of Technology 3.00 02/01/2006 13.17 44
140 Foothill College 3.00 10/01/2006 11.76 103
164 Fort Hays State University 3.375 10/01/2002 11.74 140
---------- G ---------
739 Gordon College 3.50 04/01/2013 12.84 437
995 Grambling State University 3.00-3.75 10/01/2005 11.70 762
---------- H ---------
113 Hampshire College 3.00 11/01/2006 12.43 81
680 Harcum Junior College 3.00 11/01/2015 12.44 364
410 Haverford College 3.625 11/01/2013 12.29 245
27 High Point College 3.375 12/01/2002 11.63 22
140 High Point College 3.00 12/01/2007 11.72 93
---------- I ---------
285 Indiana University 3.50 04/01/2000 11.56 273
114 Inter American University of San Juan 2.75-3.00 12/01/2001 11.63 99
925 Iowa State University of Ames 3.00 07/01/2007 10.63 673
---------- J ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
November 30, 1999
(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>
$380 Jackson State University 3.00 01/01/2007 12.50 $271
42 Jarvis Christian College 3.50 04/01/2001 13.41 38
545 Jarvis Christian College 3.00 04/01/2019 12.96 262
---------- K ---------
3 Kansas Newman College 3.125 04/01/2000 13.71 3
134 Kansas Newman College 3.00 04/01/2006 13.10 97
200 Kansas State University 3.375 04/01/2002 11.79 177
36 Kansas State University 3.50 04/01/2000 11.52 34
18 Kent State University 2.875 12/01/1999 10.01 17
1,260 Kent State University 3.00 12/01/2008 10.55 902
41 Kirksville College of Kirksville, Missouri 3.125 12/01/2000 11.63 38
155 Knox College 3.00 05/01/2007 12.72 110
---------- L ---------
229 Laredo Junior College 3.00 08/01/2009 11.82 150
88 Lawrence University 3.375 04/01/2002 13.34 76
585 Long Island University 3.00 06/01/2016 12.34 301
567 Long Island University 3.75 10/01/2005 12.42 431
97 Louisiana State University 3.50 07/01/2002 10.50 86
400 Louisiana State University 3.50 04/01/2002 11.10 357
12 Louisiana Tech University 3.50 04/01/2000 12.72 11
45 Loyola University - Mundelein Branch 3.125 10/01/2000 12.70 41
---------- M ---------
395 McKendree College 3.00 04/01/2007 13.07 277
717 Michigan State University 3.00 05/01/2020 10.96 381
1,338 Middlebury College 3.00 04/01/2018 12.87 707
27 Midland Lutheran College 3.50 04/01/2001 13.41 24
217 Mississippi State University 3.50 12/01/2001 10.82 197
90 Mississippi Valley State 3.00 07/01/2008 11.89 62
508 Missouri Southern State College 3.00 12/01/2008 10.56 361
282 Missouri Western State College 3.00 10/01/2008 11.77 193
377 Montclair State College 3.00 07/01/2008 11.32 260
285 Monterey Peninsula College 3.00 10/01/2018 11.95 143
109 Montreat-Anderson College 3.00 12/01/2019 12.19 53
89 Moravian College 3.00 11/01/2000 12.67 81
56 Morehouse College 3.375 07/01/2001 10.57 50
904 Morris College 3.00 11/01/2013 12.42 512
---------- N ---------
377 New England College 3.625 10/01/2013 12.37 226
990 New England College 3.00 04/01/2019 12.96 476
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
November 30, 1999
(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>
$895 North Carolina State University 3.00 09/01/2006 8.02 $740
23 Northeastern University 3.00 11/01/1999 13.10 23
---------- O ---------
57 Occidental College 3.50 10/01/2001 12.62 50
2,019 Old Dominion University 3.00 06/01/2013 11.70 1,177
102 Ouachita Baptist University 3.375 12/01/2002 11.63 87
---------- P ---------
29 Pacific University 3.50 10/01/2001 12.66 26
11 Pan American University 3.50 10/01/2000 11.00 10
66 Providence Hospital 3.375 01/01/2002 11.33 58
300 Purdue University 3.50 07/01/2001 10.26 269
---------- R ---------
219 Riverside Hospital 3.00 04/01/2007 13.09 155
648 Rivier College 3.625 04/01/2014 12.78 380
---------- S ---------
395 San Diego State University 3.00 11/01/2021 11.93 190
810 San Francisco State University 3.00 11/01/2021 11.93 384
1,112 Sarah Lawrence College 3.00 11/01/2021 12.64 517
238 Scripps College 3.00 10/01/2005 12.51 178
72 Simpson College 3.375 07/01/2001 12.18 63
6 South Dakota State University 3.125 04/01/2000 12.76 6
1,435 South Dakota State University 3.00 04/01/2016 12.31 783
1,045 Southeast Missouri State 3.50 04/01/2005 12.32 821
196 Southern Arkansas University 3.75 10/01/2004 11.76 158
16 Southern Nazarene University 3.125 04/01/2000 13.60 15
24 Spring Arbor College 3.00 11/01/2000 12.67 22
161 Springfield College 3.00 05/01/2011 12.59 99
41 St. Augustine's College 3.00 11/01/2001 12.61 36
196 St. Edward's University 3.625 04/01/2013 12.80 118
165 St. Francis College 3.50 05/01/2001 12.88 150
255 St. Mary's University of San Antonio 3.75 11/01/2002 12.47 217
190 St. Michael's College 3.00 04/01/2008 13.06 132
236 Stanford University 3.125 04/01/2002 9.82 216
921 Stanford University 3.00 05/01/2024 10.40 470
34 Stetson University 3.50 09/01/2001 12.48 31
30 Stillman College 3.00 02/01/2007 13.24 21
2,871 Suomi College (A) 3.00 08/01/2014 12.70 804
140 Susquehanna University 3.00 11/01/2006 12.44 101
390 Susquehanna University 3.625 11/01/2014 12.32 225
135 Swarthmore College 3.00 11/01/2013 12.30 77
</TABLE>
The accompanying notes are an integral part of these financial statements.
25
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
November 30, 1999
(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>
---------- T ---------
$585 Taylor University 3.00 10/01/2010 12.45 $364
468 Temple University 3.375 11/01/2014 11.99 276
271 Texas College 3.00 04/01/2007 13.09 191
673 Texas Tech University 3.625 03/01/2013 10.80 442
4,744 Texas Tech University 3.375-3.50 03/01/2012 10.83 3,163
124 Tougaloo College 3.00 06/01/2021 12.44 56
556 Tufts University 3.625 10/01/2004 12.47 440
---------- U ---------
1,806 University of Alabama 3.00 05/01/2021 12.27 868
51 University of Alaska 3.125 04/01/2001 12.63 47
166 University of Arkansas at Monticello 3.625 04/01/2004 12.40 136
27 University of Chicago 3.50 12/01/2001 11.63 24
928 University of Florida 3.00 01/01/2005 12.51 717
895 University of Hawaii at Manoa 3.00 10/01/2006 11.76 654
1,082 University of Missouri at Columbia 3.625 05/01/2004 11.63 905
66 University of Missouri at Rolla 3.50 05/01/2003 11.68 57
245 University of Montevallo 3.00 05/01/2023 12.30 112
133 University of Nebraska 3.00 07/01/2013 10.59 84
234 University of North Carolina 3.50 07/01/2002 10.60 202
1,375 University of North Carolina 3.00 01/01/2018 11.49 741
1,710 University of Notre Dame 3.00 04/01/2018 12.95 843
280 University of Portland 3.00 04/01/2013 12.95 159
314 University of Rochester 3.375 10/01/2002 10.77 277
965 University of Rochester 3.00 10/01/2006 10.92 724
858 University of South Dakota 3.625 10/01/2013 11.74 526
2,105 University of South Florida 3.00 07/01/2013 11.97 1,212
280 University of Steubenville 3.375 04/01/2012 12.88 169
323 University of Steubenville 3.00 04/01/2017 12.96 163
2,756 University of Vermont 3.00 10/01/2019 12.19 1,365
50 University of Washington 3.50 08/01/2000 11.06 46
475 Utah State University 3.50 04/01/2002 11.76 421
---------- V ---------
889 Vanderbilt University 3.00 08/01/2005 10.69 691
687 Vanderbilt University 3.00 06/30/2009 10.39 485
---------- W ---------
320 West Virginia Wesleyan College 3.50 05/01/2002 13.43 276
90 Western Carolina University 3.75 11/01/2001 11.67 80
1,300 Western Maryland College 3.00 11/01/2016 12.44 676
160 Western Washington University 3.00 10/01/2007 11.16 117
27 Whittier College 3.50 04/01/2001 13.53 26
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST ONE
SCHEDULE OF INVESTMENTS
November 30, 1999
(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>
---------- X ---------
$540 Xavier University 3.00 10/01/2017 12.54 $268
-------
- --------
83,091 Total College and University Loans 51,826
- --------
Allowance for Loan Losses 1,125
-------
Net Loans of the Trust 50,701
-------
INVESTMENT AGREEMENTS (25.8%)
2,600 FNMA #787 Liquidity Fund 8.00 12/01/2014 8.00 2,600
15,030 FNMA #786 Revenue Fund 5.00 12/01/2014 5.00 15,030
- -------- -------
17,630 Total Investment Agreements 17,630
- -------- -------
$100,721 Total Investments (100.0%) $68,331
======== =======
</TABLE>
(A) This institution has been placed on nonaccrual status as more fully
described in Note 6.
The accompanying notes are an integral part of these financial statements.
27
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains financial information extracted from the November 30,
1999 College and University Facility Loan Trust One 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-30-1999
<PERIOD-END> NOV-30-1999
<INVESTMENTS-AT-COST> 68,331
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 936
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 757
<TOTAL-ASSETS> 70,024
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 54,512
<OTHER-ITEMS-LIABILITIES> 3,996
<TOTAL-LIABILITIES> 58,508
<SENIOR-EQUITY> 328
<PAID-IN-CAPITAL-COMMON> 11,394
<SHARES-COMMON-STOCK> 1,001,643
<SHARES-COMMON-PRIOR> 1,001,643
<ACCUMULATED-NII-CURRENT> (1,207)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 11,516
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,575
<OTHER-INCOME> 0
<EXPENSES-NET> 6,356
<NET-INVESTMENT-INCOME> 1,219
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1,219
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 197
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (377)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 11,394
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 5,971
<GROSS-EXPENSE> 6,356
<AVERAGE-NET-ASSETS> 11,755
<PER-SHARE-NAV-BEGIN> 10.15
<PER-SHARE-NII> 1.21
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.19)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.17
<EXPENSE-RATIO> .54
[AVG-DEBT-OUTSTANDING] 57,840
[AVG-DEBT-PER-SHARE] 57.74
</TABLE>
