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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended March 31, 1997
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Commission File Number 33-19863
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Mountain States Guaranty Mortgage Company
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(Exact name of registrant as specified in its charter)
Colorado 84-1075984
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(State of Incorporation) (IRS Employer Identification No.)
621 17th Street, Suite 1900, Denver, CO 80202
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(Address and Zip Code of Principal Executive Offices)
Registrant's telephone number, including area code: (303) 295-3000
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past ninety days.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
CLASS SHARES OUTSTANDING AT MARCH 31, 1997
- ----- ------------------------------------
<S> <C>
Common 1,000
</TABLE>
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
PART I
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Item 1. Financial Statement
Balance Sheets as of December 31, 1996 and
March 31, 1997 3
Statement of Cash Flows for the Periods
January 1, 1996 through March 31, 1996
and January 1, 1997 through March 31, 1997 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
PART II
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Item 1. Legal Proceedings 7
Item 2. Changes in Securities 7
Item 3. Defaults Upon Senior Securities 7
Item 4. Submission of Matters to a Vote of Security Holders 7
Item 5. Other Information 7
Item 6. Exhibits and Reports on Form 8-K 7
Signatures 8
Index to Exhibits 9
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MOUNTAIN STATES GUARANTY MORTGAGE COMPANY
Balance Sheets
December 31, 1996 and March 31, 1997
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
1997 1996
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<S> <C> <C>
Cash $1,000 $1,000
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Total Assets $1,000 $1,000
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STOCKHOLDERS' EQUITY
Common Stock, par value $1.00 per share,
authorized 1,000,000 shares, issued and
outstanding 1,000 shares $1,000 $1,000
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Total stockholders' equity $1,000 $1,000
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</TABLE>
See accompanying notes to financial statements.
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MOUNTAIN STATES GUARANTY MORTGAGE COMPANY
Statement of Cash Flows for the
Periods January 1, 1996 to
March 31, 1996 and January 1, 1997 to
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
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<S> <C> <C>
Net Proceeds from issuance of collateralized
mortgage obligations (including accrued
interest) and sale of residual interest in bonds $ 0 $ 0
Purchase price of Certificates (including
accrued interest) 0 0
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Net Increase in Cash 0 0
Cash balance at beginning of the Period 1,000 1,000
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Cash balance at end of the Period $1,000 $1,000
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</TABLE>
See accompanying notes to financial statements.
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MOUNTAIN STATES GUARANTY MORTGAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND OPERATIONS
Mountain States Guaranty Mortgage Company (the "Company") is a limited purpose
corporation established under the laws of Colorado on January 22, 1988. The
Company was organized for the purpose of issuing collateralized mortgage
obligations (the "Bonds") secured by mortgage-backed certificates (the
"Certificates"). Bonds issued are obligations solely of the Company.
NOTE 2 - COLLATERALIZED MORTGAGE OBLIGATIONS
On July 28, 1988, the Company issued Bonds in the aggregate principal amount of
$20,000,000. The principal amounts outstanding at March 31, 1997, the interest
rates and the stated maturities of the Bonds are as follows:
<TABLE>
<CAPTION>
CLASS PRINCIPAL AMOUNT INTEREST RATE STATED MATURITY
----- ---------------- ------------- ---------------
<S> <C> <C> <C>
I-D $713,000 9.40 04/01/2016
I-F 1,982,000 9.40 08/01/2018
I-G 1,378,000 9.40 08/01/2018
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$4,073,000
==========
</TABLE>
The Series One Bonds are collateralized by Certificates having annual pass-
through rates of 9.5%. The par value of the Certificates outstanding at March
31, 1997, is $3,971,000.
On March 28, 1989, the Company issued Bonds in the aggregate principal amount
of $20,000,000. The principal amounts outstanding at March 31, 1997, the
interest rates and the stated maturities of the Bonds are as follows:
<TABLE>
<CAPTION>
CLASS PRINCIPAL AMOUNT INTEREST RATE STATED MATURITY
----- ---------------- ------------- ---------------
<S> <C> <C> <C>
II-D $1,155,000 10.45 03/01/2017
II-E 2,025,000 10.40 04/01/2019
II-F 14,000 10.45 04/01/2019
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$3,194,000
==========
</TABLE>
The Series Two Bonds are collateralized by Certificates having annual pass-
through rates of 10.5%. The par value of the Certificates outstanding at March
31, 1997, is $3,146,000.
The issuance of Series One and Two Bonds and related residual interests, and
the respective simultaneous delivery of the Certificates to State Street Bank
and Trust Company (the "Trustee) for the benefit of the Bondholders has been
accounted for as a sale of the Certificates, and the transaction resulted in no
gain or loss to the Company. Accordingly, no statement of operations is
presented and the Bonds and the related Certificates do not appear in the
accompanying balance sheets.
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Coughlin & Company, Inc., an entity which has common ownership with the
Company, served as Underwriter for these issuances. Another entity having the
same owners purchased the residual interest in the collateral securing the
Bonds.
NOTE 3 - CERTIFICATES HELD BY TRUSTEE
As required by the Indenture relating to the Bonds, the Certificates securing
the Bonds are held as collateral by the Trustee. The Trustee collects
principal and interest payments on the Certificates and makes principal and
interest payments on the Bonds using a collection account, including
reinvestment earnings thereon, established for the Bonds.
NOTE 4 - INCOME TAXES
The Company has elected to treat each issuance as a real estate mortgage
investment conduit for federal income tax purposes. Accordingly, the Company
does not report any income or loss. Therefore, no provision for income taxes
has been made in the accompanying financial statements
ITEM 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
General
Mountain States Guaranty Mortgage Company is a corporation established under
the laws of Colorado on January 12, 1988. The Company was created for the sole
purpose of the issuance and sale of collateralized mortgage obligations (the
"Bonds") secured by mortgage-backed certificates (the "Certificates"). The
Bonds represent obligations solely of the Company.
Capital Resources and Liquidity
The Company's sources of funds with respect to the payment of Bonds are
receipts of principal and interest payments on the related Certificates. It is
anticipated that payments of principal and interest on the Certificates
collateralizing the Bonds will provide sufficient funds for the payment of all
fees and expenses, including amounts necessary to make principal and interest
payments on the Bonds, and to retire the Bonds not later than their respective
stated maturities.
Results of Operations
For the period ended March 31, 1997, the Company did not recognize any gains on
issuance of Bonds. Any excess of either receipts of principal and interest on
the related Certificates or debt service payments and other fees and expenses
will revert to the residual class of bondholders in each of the Series One,
Series Two, Series Three and Series Four Bonds and not to the Company.
6
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PART II
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
a) The exhibits required by this item and incorporated
herein by reference are listed in the accompanying
index (page 1 ) to exhibits.
b) There were no reports on Form 8-K filed by the
Company during the period covered by this report.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Registrant: MOUNTAIN STATES GUARANTY MORTGAGE COMPANY
Mountain States Guaranty Mortgage Company
Dated:
April 15, 1997 By: /s/Dennis F. Coughlin
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Name: Dennis F. Coughlin
Title: President & Chief Executive Officer
Dated:
April 15, 1997 By: /s/Harold C. Jones
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Name: Harold C. Jones
Title: Treasurer & Chief Financial Officer
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INDEX TO EXHIBITS
Pursuant to the General Rules and Regulations under the Securities Exchange Act
of 1934, as amended, the following Exhibits previously filed with the
Securities and Exchange Commission are incorporated by reference as Exhibits to
the Form 10-Q:
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
1 Indenture dated as of July 1, 1988, between the Company, and
the Trustee (incorporated by reference to Exhibit 4(a) of
Registrant's Form 10-Q filed with the SEC on November 11,
1988).
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 1,000
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,000
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 1,000
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,000
<SHARES-COMMON-PRIOR> 1,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
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<NET-ASSETS> 1,000
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
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<REALIZED-GAINS-CURRENT> 0
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<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
