To State Street Bank and Trust Company, Owner Trustee of
College and University Facility Loan Trust Two:
In planning and performing our audit of the financial statements of College and
University Facility Loan Trust Two (a Massachusetts business trust) for the year
ended November 30, 1995, we considered its internal control structure, including
procedures for safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the financial statements
and to comply with the requirements of Form N-SAR, not to provide assurance on
the internal control structure.
The management of College and University Facility Loan Trust Two is responsible
for establishing and maintaining an internal control structure. In fulfilling
this responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of internal control structure
policies and procedures. Two of the objectives of an internal control structure
are to provide management with reasonable, but not absolute, assurance that
assets are safeguarded against loss from unauthorized use or disposition and
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and may not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it may
become inadequate because of changes in conditions or that the effectiveness of
the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
November 30, 1995.
This report is intended solely for the information and use of the Owner Trustee
and the Securities and Exchange Commission.
Boston, Massachusetts
December 29, 1995
<PAGE>
COLLEGE AND UNIVERSITY
FACILITY LOAN TRUST TWO
FINANCIAL STATEMENTS
AS OF NOVEMBER 30, 1995
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To State Street Bank and Trust Company (Owner Trustee):
We have audited the accompanying balance sheet of College and University
Facility Loan Trust Two (a Massachusetts business trust), including the schedule
of investments, as of November 30, 1995, 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, 1995 by correspondence with General Electric
Capital Corporation and Morgan Guaranty Trust Company, 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 Two as of November 30,
1995, and the results of its operations and its cash flows for the year then
ended, and the changes in its net assets for each of the two years in the period
then ended, and the selected financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
Boston, Massachusetts
December 29, 1995
<PAGE>
College and University
Facility Loan Trust Two
Balance Sheet
================================================================================
<TABLE>
<CAPTION>
November 30, 1995
============================================================================================
<S> <C>
Assets
Investments, at amortized cost, net of allowance for possible loan
losses of $632,376 (Notes 1, 2, 6, 7 and 8 and Schedule of Investments) $228 364 172
Cash 135 720
Interest receivable 2 185 337
Deferred bond issuance costs (Note 2) 1 144 240
- --------------------------------------------------------------------------------------------
Total assets $231 829 469
============================================================================================
Liabilities
Bonds payable, net of unamortized discount (Notes 3 and 8) $202 673 928
Interest payable (Note 3) 5 380 114
Dividends payable (Note 5) 760 849
Payable for redemption of Class A Preferred Certificates (Note 5) 613 791
Accrued expenses and other liabilities 541 904
- --------------------------------------------------------------------------------------------
Total liabilities 209 970 586
- --------------------------------------------------------------------------------------------
Net Assets
Class A Preferred Certificates, par value $1 - authorized and outstanding -
10,534,185 certificates (preference as to annual dividends of 13.65%,
mandatory redemption and liquidation at par value) (Note 5) 10 534 185
- --------------------------------------------------------------------------------------------
Class B Certificates, par value $1 - authorized, issued
and outstanding - 1,763,800 certificates (Note 5) 1 763 800
Accumulated deficit (632 376)
Paid-in capital (Note 2) 10 193 274
- --------------------------------------------------------------------------------------------
Total net assets applicable to Class B certificateholders 11 324 698
- --------------------------------------------------------------------------------------------
Total net assets $ 21 858 883
============================================================================================
Net asset value per Class B certificate
(based on 1,763,800 certificates outstanding) $6.42
============================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
College and University
Facility Loan Trust Two
Statement of Operations
================================================================================
Year Ended November 30, 1995
================================================================================
Investment income:
Interest income (Note 2) $23 254 159
- --------------------------------------------------------------------------------
Expenses:
Interest expense (Note 3) 19 270 352
Amortization of deferred bond issuance costs (Note 2) 196 213
Servicer fees (Note 4) 263 348
Trustee fees (Note 4) 71 348
Other trust and bond administration expenses 167 486
================================================================================
Total expenses 19 968 747
Net investment income 3 285 412
Provision for possible loan losses (Notes 2 and 6) (430 000)
- --------------------------------------------------------------------------------
Net increase in net assets resulting from operations 2 855 412
Dividends to Class A Preferred Certificateholders 1 570 140
- --------------------------------------------------------------------------------
Net increase in net assets applicable to Class B
certificateholders resulting from operations $ 1 285 272
================================================================================
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
College and University
Facility Loan Trust Two
Statement of Cash Flows
================================================================================
Year Ended November 30, 1995
================================================================================
Cash flows from operating activities:
Interest received $ 11 352 057
Interest paid (11 538 508)
Operating expenses paid (113 432)
- --------------------------------------------------------------------------------
Net cash used for operating activities (299 883)
- --------------------------------------------------------------------------------
Cash flows from investing activities:
Net decrease in funds held under investment agreements 3 733 359
Principal payments on Loans 28 580 687
- --------------------------------------------------------------------------------
Net cash provided by investing activities 32 314 046
- --------------------------------------------------------------------------------
Cash flows from financing activities:
Principal repayments on Bonds (27 929 806)
Dividends on Class A Preferred certificates (1 728 724)
Redemptions of Class A Preferred certificates (2 323 573)
- --------------------------------------------------------------------------------
Net cash used for financing activities (31 982 103)
- --------------------------------------------------------------------------------
Net increase in cash 32 060
Cash, beginning of year 103 660
- --------------------------------------------------------------------------------
Cash, end of year $ 135 720
================================================================================
Reconciliation of net increase in net assets resulting from
operations to net cash used for operating activities:
Net increase in net assets resulting from operations $ 2 855 412
Provision for possible loan losses 430 000
Decrease in interest receivable 190 062
Increase in accrued expenses and other liabilities 388 749
Decrease in interest payable (558 596)
Amortization of original issue discount on Bonds 8 290 441
Amortization of purchase discount on Loans (12 092 164)
Amortization of deferred Bond issuance costs 196 213
- --------------------------------------------------------------------------------
Net cash used for operating activities $ (299 883)
================================================================================
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
College and University
Facility Loan Trust Two
Statements of Changes in Net Assets
(Note 2 (f))
================================================================================
<TABLE>
<CAPTION>
Years Ended November 30, 1995 1994
======================================================================================================
<S> <C> <C>
From operations:
Net investment income $ 3 285 412 $ 3 703 625
Provision for possible loan losses (430 000) (200 000)
Dividends to certificateholders:
Class A Preferred Certificateholders
($.1365 per certificate annually)
From net investment income (760 849) (451 416)
As tax return of capital (809 291) (1 419 557)
- ------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Class B
certificateholders resulting from operations 1 285 272 1 632 652
- ------------------------------------------------------------------------------------------------------
Capital certificate transactions (Note 5):
Redemptions of Class A Preferred certificates (1,323,566 and
2,084,217 certificates in 1995 and 1994, respectively) (1 323 566) (2 084 217)
- ------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from
capital certificate transactions (1 323 566) (2 084 217)
- ------------------------------------------------------------------------------------------------------
Net decrease in net assets (38 294) (451 565)
Net assets:
Beginning of year 21 897 177 22 348 742
- ------------------------------------------------------------------------------------------------------
End of year $21 858 883 $21 897 177
======================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
College and University
Facility Loan Trust Two
Selected Financial Highlights for Each
Class B Certificate Outstanding
Throughout the Periods Indicated
(Notes 1 and 5)
================================================================================
<TABLE>
<CAPTION>
Years Ended November 30, 1995 1994 1993 1992 1991
=====================================================================================================================
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 5.69 $ 4.77 $ 3.79 $ 2.90 $ 1.99
- ---------------------------------------------------------------------------------------------------------------------
Net investment income 1.86 2.09 2.15 2.12 2.24
Provision for possible loan losses (.24) (.11) - - (.10)
Dividends to Class A Preferred
Certificateholders:
From net investment income (.43) (.26) (1.17) (1.23) (1.23)
As tax return of capital (.46) (.80) - - -
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 6.42 $ 5.69 $ 4.77 $ 3.79 $2.90
=====================================================================================================================
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 $10 534 185 $11 857 751 $13 941 968 $15 435 727 $15 879 192
Net assets applicable to Class
B Certificates, end of year $11 324 698 $10 039 426 $ 8 406 774 $ 6 677 348 $ 5 109 590
=====================================================================================================================
Ratios and Supplemental Data:
Ratio of expenses to average
net assets applicable to
Class B Certificates 186.94%(b) 237.22%(b) 311.15%(b) 419.67%(b) 608.00%(b)
Ratio of net investment income
to average net assets applicable
to Class B Certificates 30.76% 40.16% 50.29% 63.33% 91.35%
Number of Class B Certificates
outstanding, end of year 1 763 800 1 763 800 1 763 800 1 763 800 1 763 800
</TABLE>
(a) The Trust's investments are recorded at amortized cost as discussed in
Note 2. Accordingly, the financial statements do not reflect the market
value of such investments. For this reason, management believes that no
meaningful information can be provided regarding "Total Investment Return"
and has not included information under that heading.
(b) Excluding interest expense, the ratio of expenses to average net assets
applicable to Class B Certificates was 6.54%, 7.28%, 11.11%, 15.74% and
24.54% in 1995, 1994, 1993, 1992 and 1991, respectively.
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
================================================================================
1. Organization
and Business College and University Facility Loan Trust Two (the Trust)
was formed on March 11, 1988 as a business trust under the
laws of the Commonwealth of Massachusetts by a declaration of
trust by The First National Bank of Boston (the Owner
Trustee), not in its individual capacity but solely as Owner
Trustee. During 1995, State Street Bank and Trust Company
replaced The First National Bank of Boston as the 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 May 12, 1988 (the Closing Date) and
issued Bonds in four tranches in the aggregate principal
amount (at maturity) of $450,922,000. 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 3.18% and a weighted average remaining term to
maturity of approximately 18.77 years. Payments on the Loans,
pending semiannual bond payment dates, are managed by the
Bond Trustee in various fund accounts and are invested under
investment contracts (Note 2) as specified in the Indenture.
8
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
================================================================================
1. Organization
and Business
(Concluded) All payments on the Loans and earnings under the investment
agreements and any required transfers from the Expense 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 and to fund the
Liquidity Fund to the Liquidity Fund Requirement. Any funds
remaining in the Revenue Fund on such payment date will be
used to further pay down the Bonds to the extent of the
maximum principal distribution amount, after which any
residual amounts 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. This transaction was accounted for
using the purchase method of accounting, resulting in a new
measurement of the Trust's net assets.
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, 1995 was approximately
$101,639,000. As a result of prepayments of Loans in the year
ended November 30, 1995, additional interest income of
approximately $313,000 was recognized.
9
<PAGE>
College and University
Facility Loan Trust Two
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 such other Loans as considered
necessary by management if collection of interest and
principal is doubtful. When a Loan is placed on nonaccrual
status, all previously accrued but uncollected interest is
reversed against the current period's interest income.
Subsequently, interest income is recorded when received.
Payments are applied to interest first with the balance, if
any, applied to principal. At November 30, 1995, one loan has
been placed on nonaccrual status, as discussed in Note 6.
(b) Other Investments
Other investments, which are included in Investments on the
accompanying balance sheet, consist of two investment
agreements issued by Morgan Guaranty Trust Company, bearing
fixed rates of interest of 7.05% and 7.75%. These investments
may take the form of repurchase agreements (the underlying
collateral of which shall be as to form and substance
acceptable to each nationally recognized statistical rating
agency that rates the Bonds), time deposits or other lawful
investments at the bank's option. These investments are
carried at cost.
(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 Two
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 over the estimated lives of
the Bonds, which are based on the scheduled payments of the
Loans. When Loan prepayments occur, a portion of the deferred
issuance costs is expensed in the year of the prepayment, so
that the future effective interest rate remains unchanged.
(e) Accounting for Impairment of a Loan and Allowance for
Possible Loan Losses
The Financial Accounting Standards Board issued 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.
The Trust adopted this statement as of December 1, 1994. The
adoption of this statement did not have a material effect on
the financial position or results of operations of the Trust.
Management is responsible for establishing an allowance for
possible loan losses based on its best estimate of losses
that might occur. Ultimate losses may vary from the current
estimate. This estimate is reviewed periodically, and as a
provision to the allowance for possible loan losses becomes
necessary, it is reported in the period in which it becomes
known. Allowances are established for those loans that, in
the opinion of management, are deemed to be impaired and
potentially uncollectible.
11
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
================================================================================
2. Summary of
Significant
Accounting
Policies
(Concluded) (e) Accounting for Impairment of a Loan and Allowance for
Possible Loan Losses (Continued)
The allowance for possible loan losses is based on
management's evaluation of the level of the allowance
required in relation to the estimated loss exposure in the
loan portfolio. Factors considered in evaluating the adequacy
of the allowance include previous loss 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.
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
On December 1, 1993, the Trust prospectively adopted the
provisions of American Institute of Certified Public
Accountants Statement of Position 93-2, "Determination,
Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by
Investment Companies" (SOP 93-2). SOP 93-2 requires the Trust
to report distributions that are in excess of tax basis
earnings and profits as a tax return of capital and to
present the capital accounts on a basis that approximates the
amounts that are available for future distributions on a tax
basis.
As all tax earnings and profits have been distributed,
accumulated undistributed net investment income has been
reclassified as paid-in capital. 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. This reclassification had no
impact on the net investment income or net assets of the
Trust.
12
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
================================================================================
3. Bonds The Bonds outstanding at November 30, 1995 consist of the following:
<TABLE>
<CAPTION>
Outstanding Unamortized
Interest Principal Discount Carrying Value
Type Rate Stated Maturity (000s) (000s) (000s)
=======================================================================================
<S> <C> <C> <C> <C> <C>
Sequential 4.00 % June 1, 1999 $ 43 675 $ 1 274 $ 42 401
Sequential 4.00 June 1, 2002 75 961 11 048 64 913
Sequential 4.00 June 1, 2018 149 370 54 010 95 360
- ---------------------------------------------------------------------------------------
$269 006 $66 332 $202 674
=======================================================================================
</TABLE>
Interest on the Bonds is payable semiannually. On December 1,
1995, the Trust made a principal payment of $14,592,000 on
the sequential 4%, June 1, 1999 bonds.
Principal payments on the Bonds will be made prior to the
respective stated maturities on each bond payment date in an
amount equal to the lesser of either (1) amounts available in
the Revenue Fund after certain required payments of interest
and principal (at the stated maturity of the Bonds) and,
administrative expenses after required transfers to the
Expense Fund and the Liquidity Fund (such that the amounts on
deposit are equal to the Expense Fund Requirement and the
Liquidity Fund Requirement, respectively), or (2) the Maximum
Principal Distribution Amount, as defined within the
Indenture. These principal payments will be applied to each
class of Bonds in the order of their stated maturities, so
that no payment of principal will be made on the Bonds of any
class until all Bonds having an earlier stated maturity have
been paid in full.
13
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
================================================================================
3. Bonds
(Concluded) The estimated aggregate principal payments on the Bonds at
November 30, 1995, after taking into consideration actual
Loan prepayments, Defaulted Loans and the Maximum Principal
Distribution Amount, as defined in the Indenture, are as
follows:
Fiscal Year Amount
(000s)
=============================================================
1996 $ 24 920
1997 23 593
1998 22 715
1999 21 318
2000 20 101
Thereafter 156 359
-------------------------------------------------------------
Total $269 006
=============================================================
Actual Bond principal payments may differ from estimated
payments because borrowers may prepay or default on their
obligations. The Bonds are not subject to optional redemption
by either the Trust or the bondholders.
In the event of negative cash flows, a Liquidity Fund has
been established and maintained such that, on or before such
payment date, the Liquidity Fund may be used by the Bond
Trustee to make any required payments on the Bonds and to pay
operating expenses of the Trust.
The original issue discount is being amortized using the
effective interest rate method over the estimated lives of
the Bonds, which are based on the scheduled payments of the
Loans. Accordingly, loan prepayments have the effect of
accelerating bond payments. When Bond payments occur sooner
than estimated payments, a portion of the original issue
discount is expensed in the year of prepayment, so that the
future effective interest rate remains unchanged.
14
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
================================================================================
4. Administrative
Agreements (a) Servicer
As compensation for the services provided under the servicing
agreement, General Electric Capital Corporation (GECC)
receives a collection fee. The fee is paid semiannually with
respect to each Loan on each date payments are received on
each Loan. The fee is equal to .075 of 1% of the outstanding
principal balance of each Loan divided by the number of
payments of principal and interest for each Loan in a
calendar year. For the year ended November 30, 1995, this fee
totaled $232,763. GECC was also reimbursed for other related
expenses of $30,585.
(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 $15,000 and
$12,500, respectively, for the year ended November 30, 1995.
In addition, the Owner Trustee, in its capacity as manager,
was reimbursed $1,375 for out-of-pocket expenses.
o The Bond Trustee is entitled to an annual fee equal to .015
of 1% of the aggregate outstanding principal of the Bonds on
the bond payment date immediately preceding the date of
payment of such fee. The fee is payable semiannually in
arrears on each bond payment date. The Bond Trustee is also
reimbursed for out-of-pocket expenses in an amount not to
exceed 4% of the applicable annual fee. For the year ended
November 30, 1995, Bond Trustee fees were $40,826. In
addition, the Bond Trustee was reimbursed $1,647 for
out-of-pocket expenses.
15
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
================================================================================
5. Certificates The certificates comprise two classes, namely 13.65% 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 13.65% 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 fully
redeemed. Following the redemption in full of the Class A
Preferred certificates, on each Distribution Date, the
holders of the Class B certificates will receive amounts paid
to the Owner Trustee pursuant to the Declaration of Trust,
pro-rata, in the same proportion that the par value of the
certificates evidenced by each Class B certificate bears to
the sum of the par value of the certificates evidenced by all
of the Class B certificates.
Dividends and other payments are distributed to the
certificateholders, while the Bonds are outstanding, on the
second business day in each June and December (the
Distribution Date) and, after the Bonds are paid in full, on
the first business day of each calendar month.
On December 4, 1995, the Trust paid $1,374,640 to the holders
of the Class A Preferred certificates, of which $760,849 was
for payment of dividends and $613,791 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 Two
Notes to Financial Statements
================================================================================
6. Possible
Loan
Losses An analysis of the allowance for possible loan losses for the
year ended November 30, 1995 is summarized as follows:
Balance, beginning of year $202 376
Provision 430 000
Charge-off -
-------------------------------------------------------------
Balance, end of year $632 376
=============================================================
At November 30, 1995, the recorded investment in loans that
are considered to be impaired under SFAS 114 was
approximately $17,000 with a related allowance for possible
loan losses of $3,000.
The average recorded investment in impaired loans during the
year ended November 30, 1995 was approximately $27,000. For
the year ended November 30, 1995, interest income recognized
on impaired loans was approximately $5,000.
The amortized cost of the Loan placed on nonaccrual status is
approximately $17,000 at November 30, 1995. See " Accounting
for a Possible Loan Loss and Accounting for Impairment of a
Loan" for a discussion of the Trust's impaired loan.
17
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
================================================================================
7. Loans Scheduled principal and interest payments on the Loans as of
November 30, 1995, excluding payments for Loans in Default,
as defined in the Indenture, are as follows:
Principal Interest
Payments Payments Total
Fiscal Year (000s) (000s) (000s)
=============================================================
1996 $ 27 026 $ 9 457 $ 36 483
1997 26 185 8 604 34 789
1998 25 007 7 773 32 780
1999 23 609 6 978 30 587
2000 22 123 6 223 28 346
Thereafter 178 718 38 961 217 679
-------------------------------------------------------------
Total $302 668 $77 996 $380 664
=============================================================
Expected payments may differ from contractual payments
because borrowers may prepay or default on their obligations.
Accordingly, actual principal and interest on the loans may
vary significantly from the scheduled payments.
The following analyses summarize the stratification of the
loan portfolio by type of collateral and institution as of
November 30, 1995:
Amortized
Number Cost
Type of Collateral of Loans (000s) %
=============================================================
Loans secured by a
first mortgage 349 $105 444 52.4%
Loans not secured by
a first mortgage 225 95 655 47.6
-------------------------------------------------------------
Total Loans 574 $201 099 100.0%
=============================================================
18
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
================================================================================
7. Loans (Continued) Amortized
Number Cost
Type of Institution of Loans (000s) %
=============================================================
Private 358 $104 285 51.9%
Public 216 96 814 48.1
-------------------------------------------------------------
Total Loans 574 $201 099 100.0%
=============================================================
The ability of a borrower to meet future debt service
payments on a Loan will depend on a number of factors
relevant to the financial condition of such borrower,
including, among others, the size and diversity of the
borrower's sources of revenues; enrollment trends;
reputation; management expertise; the availability and
restrictions on the use of endowments and other funds; the
quality and maintenance costs of the borrower's facilities;
and, in the case of some Loans to public institutions, which
are obligations of a state, the financial condition of the
relevant state or other governmental entity and its policies
with respect to education. The ability of a borrower to
maintain enrollment levels will depend on such factors as
tuition costs, geographical location, geographic diversity,
quality of the student body, quality of the faculty and the
diversity of program offerings.
The collateral for Loans that are secured by a mortgage on
real estate generally consists of special purpose facilities,
such as dormitories, dining halls and gymnasiums, which are
integral components of the overall educational setting. As a
result, in the event of borrower default on a Loan, where a
restructuring of debt service payments is not achieved, 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 Two
Notes to Financial Statements
================================================================================
7. Loans (Concluded) A number of borrowers are currently experiencing
financial difficulties due to declining enrollment,
increasing costs and a decline in endowments, grants,
private gifts, and State and Federal funding. Many of
these 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 troubled borrowers to repay
their loans may ultimately be dependent upon 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
independent markets 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 Two
Notes to Financial Statements
================================================================================
8. Fair Value
of Financial
Instruments
(Concluded) Current market prices are not available for most of the
Trust's financial instruments since an active market
generally does not exist for such instruments. In accordance
with the terms of the Indenture, the Trust is required to
hold all of the Loans to maturity and to use the cash flows
therefrom to retire the Bonds. Accordingly, the Trust has
estimated the fair values of its financial instruments using
a discounted cash flow methodology. This methodology is
similar to the approach used at the formation of the Trust to
determine the carrying amounts of these items 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 its related book value presented in
the accompanying balance sheet as of November 30, 1995 is as
follows:
Book Value Fair Value
(000s)
(000s)
=============================================================
Loans $200 467* $253 546
Investment Agreements:
Revenue Fund 22 113 21 039
Liquidity Fund 5 784 4 915
-------------------------------------------------------------
$228 364 $279 500
=============================================================
Bonds $202 674 $237 773
=============================================================
* Net of Allowance for Possible Loan Losses of $632,000.
21
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
SCHEDULE OF INVESTMENTS
November 30, 1995
(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)
----------- ----------- -------- -------- --------- -----------
COLLEGE AND UNIVERSITY LOANS (87.8%)
-------------- A --------------
<C> <S> <C> <C> <C> <C>
$685 Alabama Agricultural and Mechanical University 3.000-3.750 07/01/2005 10.25 $489
2,165 Alabama Agricultural and Mechanical University 3.000 05/01/2018 10.27 1,171
182 Albion College 3.000 10/01/2009 10.56 114
623 Albright College 3.000 11/01/2015 10.23 352
59 Alcorn State University 2.875 11/01/1999 10.11 50
51 Alcorn State University 3.500 11/01/2002 10.15 41
50 Allegheny College 3.000 07/01/2015 10.38 19
38 Allentown College of St. Francis De Sales 3.000 11/01/1998 10.98 33
450 Alma College 3.750 04/01/2002 11.52 355
115 American International College 3.375 10/01/2002 10.84 89
172 Anderson University 3.500 03/01/2003 11.42 129
345 Anderson University 3.000 03/01/2006 11.19 234
4 Appalachian State University 2.750 07/01/1996 10.24 4
97 Appalachian State University 3.500 07/01/2001 10.28 77
64 Appalachian State University 3.000 06/01/1997 10.11 57
615 Arizona State University 3.125 09/01/2001 10.17 489
425 Arizona State University 3.375 10/01/2002 10.16 332
1,625 Arizona State University 3.000 04/01/2006 10.60 1,134
332 Arkansas State University 3.500 04/01/2001 10.97 274
272 Arkansas State University 3.375 10/01/2000 10.25 229
913 Arkansas State University 3.750 04/01/2005 10.75 674
55 Arkansas Technical University 2.875 10/01/1999 10.21 47
2,475 Auburn University 3.000 12/01/2018 9.16 1,402
246 Azusa Pacific University 3.750 04/01/2015 10.88 143
-------------- B --------------
438 Ball State University 3.000 07/01/1999 9.98 368
1,210 Baptist College at Charleston 3.000 03/01/2019 10.73 612
849 Baptist College at Charleston 3.000 03/01/2011 10.98 509
61 Bard College 2.750 10/01/1998 11.40 53
214 Barnard College 3.000 10/01/1997 11.06 190
297 Becker Junior College 3.000 04/01/2005 11.21 208
169 Bellarmine College 3.625 05/01/2004 11.34 127
62 Belmont Abbey College 3.000 11/01/1998 10.96 55
37 Benedict College 2.875 02/01/1999 11.83 31
181 Benedict College 3.750 11/01/2004 10.75 134
1,190 Benedict College 3.000 11/01/2006 10.61 812
2,026 Benedict College 3.000 11/01/2020 10.36 1,016
2,223 Bentley College 3.000 11/01/2007 10.57 1,464
31 Bethany College 2.875 05/01/1998 11.89 27
361 Bethany College 3.375 11/01/2012 10.54 219
315 Bethany College 3.000 11/01/2017 10.40 165
640 Bethany College 3.000 11/01/2012 10.40 381
26 Bethune-Cookman College 3.000 11/01/2002 10.74 20
261 Boston Architectural Center 3.750 11/01/2004 10.77 195
255 Bradford College 3.375 10/01/2001 10.85 201
93 Brandeis University 2.875 10/01/1996 11.17 85
356 Brandeis University 3.000 11/01/2011 10.64 214
195 Brevard College 3.000 11/01/2004 10.71 141
104 Brevard College 3.000 05/01/2006 11.12 71
10 Brevard College 3.000 11/01/1996 11.14 9
195 Bryan College 3.500 04/01/2003 11.39 148
</TABLE>
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
SCHEDULE OF INVESTMENTS
November 30, 1995
(Dollar Amounts in Thousands)
(Continued)
<TABLE>
<CAPTION>
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ----------- -------- -------- --------- -----------
<C> <S> <C> <C> <C> <C>
$134 Bucks County Community College 3.000 06/01/1997 10.11 $112
63 Buena Vista College 3.500 02/01/2000 11.85 53
162 Buena Vista College 3.000 02/01/2006 11.23 110
-------------- C --------------
1,320 California Polytechnic State University 3.000 11/01/2006 10.05 895
455 California State University 3.000 11/01/2006 8.75 336
1,465 California State University 3.000 11/01/2013 8.93 930
2,933 California State University 3.000 11/01/2019 8.99 1,666
236 Calvin College 3.000 11/01/2000 10.83 190
3,000 Cameron University 3.000 04/01/2007 10.16 2,037
395 Canisius College 3.375 05/01/2002 11.48 314
1,790 Canisius College 3.000 11/01/2017 10.40 945
226 Canisius College 3.000 11/01/1999 10.89 188
48 Carnegie-Mellon University 2.750 05/01/1997 11.62 44
115 Carnegie-Mellon University 3.000 05/01/1999 11.37 98
360 Carnegie-Mellon University 3.500 11/01/2001 10.52 288
350 Carnegie-Mellon University 3.000 05/01/2009 10.73 222
1,160 Carnegie-Mellon University 3.000 11/01/2017 10.51 618
267 Carroll College 3.125 06/01/2000 10.75 214
408 Carroll College 3.750 06/01/2014 10.46 242
190 Carroll College 3.000 06/01/2018 10.15 101
506 Carroll College 3.750 03/01/2015 10.93 293
179 Carthage College 3.000 04/01/2006 11.16 122
380 Case Western Reserve University 3.500 04/01/2003 11.39 286
328 Catawba College 3.000 12/01/2009 10.27 208
184 Central Missouri State University 3.125 07/01/2000 10.24 149
394 Central Missouri State University 3.375 07/01/2001 10.27 315
834 Central Missouri State University 3.625 07/01/2004 10.29 618
1,270 Central Missouri State University 3.000 07/01/2007 10.18 847
73 Central Texas College 3.000 11/01/1997 10.15 66
35 Central Texas College 3.000 11/01/1998 10.14 31
187 Champlain College 3.000 12/01/2013 10.19 106
675 Chapman College 3.000 10/01/2013 10.65 385
477 Chapman College 3.000 11/01/2005 10.63 331
300 Chapman College 3.000 11/01/2007 10.57 198
1,875 Chateau Community Housing Association 3.000 10/01/2012 10.51 1,092
94 Cisco Junior College 3.000 11/01/2005 10.04 67
110 Cisco Junior College 3.000 07/01/2005 10.15 69
58 Claflin College 3.125 04/01/2001 11.59 47
23 Claflin College 3.000 11/01/1997 11.05 21
550 Clemson University 3.000 07/01/2005 9.51 402
188 Coker College 3.000 12/01/2009 10.04 120
90 College of Notre Dame of Maryland 2.875 11/01/1997 10.61 80
145 College of Notre Dame of Maryland 3.375 11/01/2002 10.48 112
376 College of Our Lady of the Elms 3.375 10/01/2001 10.86 297
90 College of Saint Rose 2.875 04/01/1998 11.95 80
1,016 College of Saint Rose 3.000 05/01/2022 10.43 499
677 College of Saint Thomas 3.000 11/01/2009 10.53 425
97 College of Santa Fe 3.500 10/01/2001 10.86 76
299 College of Santa Fe 3.000 10/01/2005 10.66 207
9 College of Santa Fe 3.000 09/01/1996 11.24 8
683 College of Santa Fe 3.000 10/01/2018 10.43 356
255 College of the Holy Cross 3.500 10/01/1999 11.03 220
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
SCHEDULE OF INVESTMENTS
November 30, 1995
(Dollar Amounts in Thousands)
(Continued)
<TABLE>
<CAPTION>
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ----------- -------- -------- --------- -----------
<C> <S> <C> <C> <C> <C>
$1,220 College of the Holy Cross 3.625 10/01/2013 10.60 $738
1,065 College of the Holy Cross 3.000 10/01/2006 10.63 718
60 College of the Virgin Islands 3.000 11/01/2002 10.15 46
132 College of the Virgin Islands 3.000 10/01/2003 10.16 99
36 Colorado State University 3.500 10/01/1996 9.22 34
54 Colorado State University 2.750 04/01/1996 9.75 52
54 Colorado State University 2.750 04/01/1996 9.75 52
34 Columbia College 2.750 07/01/1997 11.16 30
351 Columbia College 3.625 07/01/2004 10.90 254
110 Columbia College 3.000 07/01/2006 10.80 74
187 Concordia College 3.000 04/01/2009 11.05 120
830 Concordia College 3.000 05/01/2019 10.65 424
208 Connecticut College 3.000 11/01/1999 10.89 173
88 Cornell College 3.000 10/01/2005 10.66 61
373 Cumberland University 3.000 08/01/2017 10.52 196
-------------- D --------------
203 Daemen College 3.125 04/01/2000 11.68 168
730 Daemen College 3.000 04/01/2016 10.77 393
217 Dakota Wesleyan University 3.000 10/01/2015 10.46 119
390 Dana College 3.000 04/01/2005 11.22 272
99 Dana College 3.500 04/01/2003 11.39 75
19 David Lipscomb College 3.000 06/01/1996 11.17 17
4 Dean Academy & Jr. College 3.125 10/01/1996 11.25 4
215 Dean Academy & Jr. College 3.500 10/01/1999 10.97 180
18 Dickinson College 3.000 02/01/1996 12.49 17
158 Dickinson College 3.000 05/01/2018 10.30 86
346 Dillard University 3.000 04/01/2008 11.09 228
180 Doane College 3.000 11/01/2000 10.83 145
26 Dordt College 3.000 10/01/1997 11.08 23
930 Dormitory Authority State of NY (New York University) 3.000 07/01/2000 8.95 779
794 Dowling College 3.000 10/01/2010 10.75 494
14 Drake University 2.750 10/01/1996 11.22 13
227 Drexel University 2.875 05/01/2001 11.57 185
1,220 Drexel University 3.500 05/01/2014 10.53 664
40 Drury College 3.125 10/01/1999 11.32 34
333 Drury College 3.000 04/01/2015 10.63 185
625 Drury College 3.000 10/01/2010 10.75 383
1,320 D'Youville College 3.000 04/01/2018 10.90 707
-------------- E --------------
247 East Texas State University 2.875 09/01/1999 8.94 213
1,526 East Texas State University 3.500 03/01/2002 9.48 1,137
1,809 East Texas State University 3.000 03/01/2002 9.60 1,288
200 East Texas State University 3.000 11/01/2000 9.26 168
187 Eastern Oklahoma State College 3.125 05/15/1999 9.96 169
465 Elizabeth City State University 3.000 10/01/2017 10.02 259
635 Embry-Riddle Aeronautical University 3.000 09/01/2007 10.64 414
191 Emmanuel College 3.000 11/01/2013 10.45 109
44 Emory & Henry College 2.750 05/01/1997 11.61 40
493 Emory University 2.875 09/01/1998 11.00 420
-------------- F --------------
126 Fairleigh Dickinson University 3.125 11/01/1999 10.93 106
1,900 Fairleigh Dickinson University 3.000 11/01/2017 10.39 1,008
51 Fairmont State College 3.000 05/01/1997 11.14 47
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
SCHEDULE OF INVESTMENTS
November 30, 1995
(Dollar Amounts in Thousands)
(Continued)
<TABLE>
<CAPTION>
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ----------- -------- -------- --------- -----------
<C> <S> <C> <C> <C> <C>
$24 Findlay College 3.000 11/01/1996 11.13 $22
19 Findlay College 2.750 07/01/1998 11.04 16
20 Findlay College 3.000 07/01/1997 11.21 18
304 Florida Agricultural and Mechanical University 3.625 07/01/2004 10.29 225
328 Florida Atlantic University 3.500 07/01/2004 10.27 245
465 Florida Atlantic University 3.000 07/01/2006 10.18 317
240 Florida Institute of Technology 3.000 11/01/2009 10.53 150
122 Florida Southern College 3.000 11/01/1999 10.89 101
291 Florida State University 3.000 01/01/1999 9.20 258
364 Florida State University 3.500 06/01/2001 8.44 307
955 Florida State University 3.000 01/01/2009 9.40 658
88 Fort Hays State University 3.500 10/01/2001 10.19 72
183 Fort Hays State University 3.625 10/01/2002 10.18 144
215 Fort Hays State University 3.000 10/01/2007 10.08 144
765 Fort Lewis College 3.000 10/01/2006 10.09 530
-------------- G --------------
23 Gannon University 2.750 11/01/1996 10.67 21
880 Gannon University 3.000 11/01/2011 10.49 527
225 Gannon University 3.000 12/01/2022 10.13 109
114 Gavilan College 3.000 04/01/2006 10.59 79
147 George Fox College 3.500 04/01/2001 11.25 119
896 George Fox College 3.000 07/01/2018 10.64 462
19 George Washington University 2.875 11/01/1996 10.72 18
311 George Washington University 3.500 05/01/2000 11.30 260
1,298 George Washington University 3.500 11/01/2002 10.50 1,023
111 George Washington University 3.000 11/01/1998 10.58 96
130 Georgetown College 3.000 12/01/1999 10.02 109
666 Georgetown College 3.000 12/01/2008 10.04 436
1,140 Georgetown College 3.000 12/01/2009 10.05 727
3,173 Georgetown University 3.000 11/01/2020 10.36 1,592
7,990 Georgetown University 4.000 11/01/2020 10.52 4,428
1,757 Georgetown University 3.000 05/01/2005 10.86 1,246
1,093 Georgia Education Authority Board of Regents
of the University System of Georgia 3.375 01/01/2003 10.60 844
84 Goucher College 3.500 05/01/1998 11.88 74
28 Goucher College 3.500 11/01/1999 10.95 24
249 Grambling State University 3.000 10/01/1997 10.17 224
25 Grambling State University 3.000 11/01/1999 10.12 21
205 Grambling State University 3.000 11/01/2000 10.11 168
153 Greenville College 3.500 04/01/2001 11.56 123
-------------- H --------------
468 Hampshire College 3.000 07/01/2013 10.75 265
1,668 Hampshire College 3.000 02/01/2014 10.70 937
325 Harcum Junior College 3.375 11/01/2002 10.77 249
1,025 Harper Grace Hospital 3.625 04/01/2005 11.26 735
190 Henderson State University 3.125 04/01/1999 11.06 163
28 Hendrick Medical Center 3.000 10/01/1997 11.08 25
217 Hesston College 3.000 04/01/2006 11.14 147
426 High Point College 3.000 12/01/2010 10.26 265
2,419 Hinds Junior College 3.000 04/01/2013 10.42 1,449
175 Hiwassee College 3.375 01/01/2003 11.58 133
228 Hiwassee College 3.000 09/15/2018 10.58 118
2,458 Hofstra University 3.000 11/01/2012 10.61 1,445
</TABLE>
The accompanying notes are an integral part of these financial statements.
25
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
SCHEDULE OF INVESTMENTS
November 30, 1995
(Dollar Amounts in Thousands)
(Continued)
<TABLE>
<CAPTION>
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ----------- -------- -------- --------- -----------
<C> <S> <C> <C> <C> <C>
$68 Holy Family College 3.000 12/01/1997 10.00 $61
341 Hood College 3.625 11/01/2014 10.54 203
485 Houston Tillotson College 3.500 04/01/2014 10.90 286
105 Huntingdon College 3.500 03/01/2002 11.54 82
335 Huntingdon College 3.000 10/01/2008 10.60 214
-------------- I --------------
99 Illinois Benedictine College 3.000 10/01/1998 10.98 85
316 Illinois Institute of Technology 3.000 03/01/2003 11.10 235
105 Indiana State University 3.000 07/01/1996 8.72 98
108 Indiana University 2.750 12/01/1996 8.06 101
741 Indiana University 2.875 04/01/1998 10.10 670
247 Indiana University 2.875 04/01/1999 10.08 217
802 Indiana University 3.375 04/01/2001 10.06 668
1,680 Indiana University 3.500 04/01/2001 10.06 1,397
2,168 Indiana University 3.750 12/01/2003 8.84 1,762
745 Indiana University 3.000 07/01/1999 9.31 636
164 Inter American University of Puerto Rico 3.000 09/01/2007 10.66 109
2,877 Inter American University of Puerto Rico 3.000 01/01/2017 10.94 1,503
-------------- J --------------
35 Jackson State University 2.875 04/01/1998 11.10 31
2,175 James Madison University 3.000 06/01/2009 10.49 1,354
72 John Brown University 2.875 04/01/2000 11.64 59
473 Johnson & Wales College 3.000 11/01/2013 10.59 272
325 Johnson C. Smith University 3.000 05/01/2005 11.18 229
44 Judson College 3.750 07/01/2004 10.92 32
-------------- K --------------
331 Kansas State University 3.375 10/01/2002 9.12 270
775 Kansas State University 3.625 04/01/2004 9.77 547
154 Kendall College 3.375 10/01/2002 10.82 118
306 Kendall College 3.000 10/01/2008 10.59 196
856 Kent State University 3.500 12/01/2000 8.90 730
490 Knox College 3.000 04/01/2006 11.15 334
-------------- L --------------
410 LaGrange College 3.000 03/01/2009 11.06 257
37 Lamar University 2.875 04/01/1997 11.17 34
359 Lamar University 3.500 04/01/2003 10.76 276
494 Langston University 3.375 10/01/2003 10.15 377
1,420 Langston University 3.000 04/01/2007 10.56 963
529 Lassen Junior College District 3.000 04/01/2020 10.27 274
2,155 Leland Stanford Junior College 3.375 05/01/2003 11.33 1,623
264 Lenoir Rhyne College 3.000 12/01/2006 10.04 183
13 Lincoln University 2.750 05/01/1996 11.36 12
94 Linfield College 3.000 10/01/2017 10.44 49
301 Long Island University 3.000 10/01/1998 11.00 259
1,088 Long Island University 3.750 05/01/2005 11.22 788
277 Long Island University 3.000 11/01/2009 10.69 174
968 Long Island University 3.000 11/01/2009 10.69 610
640 Long Island University 3.750 04/01/2003 11.41 488
645 Long Island University 3.625 06/01/2014 10.49 377
61 Long Island University 3.750 05/01/1998 11.90 54
161 Long Island University 3.750 10/01/2004 10.79 118
643 Louisiana State University 3.500 07/01/2001 8.65 543
1,386 Louisiana State University 3.625 07/01/2004 9.04 1,079
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
SCHEDULE OF INVESTMENTS
November 30, 1995
(Dollar Amounts in Thousands)
(Continued)
<TABLE>
<CAPTION>
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ----------- -------- -------- --------- -----------
<C> <S> <C> <C> <C> <C>
$333 Louisiana State University 3.000 07/01/2005 8.84 $252
553 Louisiana State University 3.000 07/01/2005 8.84 417
475 Louisiana State University 3.000 07/01/2006 8.87 352
311 Louisiana State University 3.000 05/01/1999 9.17 279
490 Louisiana State University 3.000 07/01/2001 8.62 404
76 Loyola University 3.000 12/01/1996 9.97 72
136 Loyola University 3.000 11/01/1998 10.96 117
169 Loyola University - Mundelein Branch 3.750 11/01/1997 11.11 152
342 Lycoming College 3.500 05/01/2001 11.22 279
288 Lycoming College 3.625 05/01/2014 10.64 173
385 Lycoming College 3.750 05/01/2015 10.62 230
82 Lycoming College 3.000 10/01/1996 11.16 75
593 Lynchburg College 3.750 05/01/2015 10.64 355
750 Lynchburg College 3.000 05/01/2018 10.68 393
-------------- M --------------
830 Macalester College 3.375 05/01/2002 11.41 644
505 Macalester College 3.000 05/01/2020 10.46 258
50 Madison General Hospital 3.000 12/01/1999 9.67 42
630 Marian College 3.000 10/01/2016 10.45 339
73 Marian College 3.000 11/01/1999 10.89 61
102 Marist College 3.500 04/01/2000 11.73 86
102 Marquette University 3.000 07/31/2024 10.59 47
62 Mary Baldwin College 2.875 11/01/1999 10.94 53
518 Mary Baldwin College 3.375 05/01/2012 10.68 319
735 Marymount University 3.000 05/01/2016 10.52 402
30 McCook Community College 3.000 01/01/1998 11.16 26
1,160 McLennan Community College 3.000 04/01/2006 10.49 816
128 McNeese State University 3.500 10/01/2001 10.18 103
1,249 Memorial Hospital for Cancer and Allied Diseases 3.375 04/01/2012 10.68 767
165 Menlo College 3.125 04/01/2001 11.53 131
573 Mercer University 3.000 05/01/2014 10.58 326
1,730 Mercy College of Detroit 3.625 10/01/2013 10.59 1,032
41 Mercy Hospital (A) (B) 3.000 10/01/1998 10.98 17
52 Merrimack College 3.000 04/15/2019 10.53 34
138 Merrimack College 3.000 04/15/2008 10.79 71
83 Middlebury College 3.000 10/01/1996 11.16 76
21 Middlebury College 2.750 10/01/1996 11.67 20
129 Middlebury College 3.375 10/01/2002 11.12 99
144 Midland Lutheran College 3.000 04/01/2005 11.20 101
59 Midland Lutheran College 3.000 10/01/1998 10.98 51
644 Millsaps College 3.000 11/01/2021 10.34 317
142 Mississippi State University 2.875 01/01/2000 10.99 117
1,775 Mississippi State University 3.000 12/01/2020 9.64 943
152 Mississippi Valley State University 3.500 07/01/2001 10.28 121
158 Molloy College 3.375 10/01/2002 10.81 121
27 Montreat-Anderson College 3.000 11/01/1998 10.96 23
270 Moravian College 3.375 11/01/2012 10.52 162
795 Morehouse College 3.000 07/01/2010 10.50 429
2,672 Morgan State University 3.000 11/01/2014 10.56 1,505
272 Morris Brown College 3.750 05/01/2007 11.12 187
2,378 Morris Brown College 2.750-3.750 05/01/2018 10.89 1,390
768 Morris College 3.000 11/01/2009 10.53 482
160 Muhlenberg College 3.000 11/01/2000 10.50 130
</TABLE>
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
SCHEDULE OF INVESTMENTS
November 30, 1995
(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)
----------- ----------- -------- -------- --------- -----------
-------------- N --------------
<C> <S> <C> <C> <C> <C>
$184 New England College 3.000 04/01/2016 10.77 $99
785 Newark Beth Israel Hospital 3.625 01/01/2014 11.06 454
84 NIACC Dormitories, Inc. 3.000 10/01/2012 10.27 50
142 Nicholls State University 3.000 09/01/1999 8.88 123
3,172 Norfolk State University 3.000 12/01/2021 9.77 1,628
757 North Carolina Agricultural and
Technical State University 3.000 05/01/2014 10.34 438
820 North Carolina State University 3.625 09/01/2004 7.97 671
434 North Carolina State University 3.125 09/01/2001 7.58 374
508 North Carolina State University 3.500 09/01/2001 7.63 441
229 North Greenville College 3.000 11/01/2003 10.72 172
396 Northeast Louisiana University 3.500 04/01/2001 10.28 330
48 Northeast Missouri State University 2.875 05/01/1997 11.14 44
658 Northeast Missouri State University 3.375-3.500 05/01/2002 10.75 524
220 Northeastern Oklahoma State University 3.000 06/01/1998 9.73 191
3,490 Northeastern University 3.000 05/01/2018 10.53 1,830
199 Northeastern University 3.000 05/01/2004 10.97 145
141 Northwest Nazarene College 3.750 04/01/2003 11.44 109
123 Northwestern State University 3.125 10/01/2000 10.15 101
530 Nova University 3.000 12/01/2007 10.04 357
-------------- O -------------
67 Occidental College 3.000 10/01/1997 11.09 60
312 Occidental College 3.000 10/01/2019 10.41 158
54 Oklahoma City University 2.750 04/01/1996 12.27 51
1,012 Oklahoma City University 3.000 04/01/2005 11.22 710
280 Olympic Community College 3.000 10/01/2008 10.07 184
107 Ouachita Baptist University 3.125 12/01/1999 10.03 86
40 Ouachita Baptist University 3.000 12/01/2006 10.04 27
-------------- P -------------
28 Pacific University 3.000 11/01/1999 10.89 23
1,078 Paine College 3.000 10/01/2016 10.45 579
34 Pan American University 3.000 10/01/1999 9.23 30
2,689 Philadelphia College of Art 3.000 01/01/2022 10.62 1,293
910 Pine Manor College 3.625 10/01/2003 10.80 682
17 Pittsburg State University 2.750 10/01/1996 10.16 16
82 Point Loma Nazarene College 2.875 04/01/1999 11.85 71
30 Point Loma Nazarene College 2.875 04/01/1998 11.89 26
205 Polytechnic University 3.375 10/01/2011 10.59 125
1,742 Portland Student Services Inc. 3.000 01/01/2011 10.36 1,069
253 Post College 3.000 04/01/2010 10.76 157
1,610 Purdue University 3.625 07/01/2004 9.33 1,237
463 Purdue University 3.000 07/01/2005 9.26 344
-------------- Q -------------
72 Queens College 3.000 07/01/1998 11.07 61
85 Queens College 3.500 11/01/2001 10.88 69
221 Queens College 3.625 07/01/2004 10.90 160
-------------- R -------------
385 Randolph-Macon College 3.000 05/01/2010 10.72 240
461 Randolph-Macon College 3.000 11/01/2000 10.50 374
16 Regis College (Denver) 2.750 11/01/1996 11.17 15
630 Regis College (Denver) 3.000 11/01/2012 10.47 368
223 Regis College (Weston) 3.375 10/01/2002 10.85 175
</TABLE>
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
SCHEDULE OF INVESTMENTS
November 30, 1995
(Dollar Amounts in Thousands)
(Continued)
<TABLE>
<CAPTION>
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ----------- -------- -------- --------- -----------
<C> <S> <C> <C> <C> <C>
$320 Rhode Island College 3.000 10/01/2005 10.09 $228
225 Rider College 3.500 05/01/2001 11.57 184
423 Rider College 3.375 05/01/2002 11.44 330
172 Rider College 3.125 11/01/2000 10.86 140
1,950 Rider College 3.625 11/01/2013 10.42 1,125
512 Rider College 3.000 05/01/2017 10.70 271
137 Rio Grande College 3.000 03/30/2009 10.93 89
86 Roberts Wesleyan College 3.000 11/01/2000 10.83 69
333 Roger Williams College 3.000 11/01/1999 10.89 277
120 Russell Sage College 3.000 10/01/1998 10.98 103
390 Rutgers, The State University 2.750 05/01/1999 8.84 347
780 Rutgers, The State University 3.750 05/01/2016 9.19 501
100 Rutgers, The State University 2.875 05/01/1999 8.80 91
1,280 Rutgers, The State University 3.125 05/01/2001 8.89 1,123
-------------- S -------------
213 Saint Ambrose University 3.000 11/01/2001 10.78 166
225 Saint Anselm College 3.375 10/01/2001 10.88 180
73 Saint Edward's University 3.125 04/01/2000 11.69 61
3 Saint Edward's University 3.000 04/01/1996 12.50 3
22 Saint Francis College 3.000 05/01/1996 11.80 21
159 Saint John's University 3.000 10/01/2002 10.76 120
255 Saint Joseph Hospital 3.500 10/01/2001 10.87 201
252 Saint Louis College of Pharmacy 3.375 10/01/2004 10.74 182
146 Saint Louis University 3.125 10/01/2000 10.90 118
674 Saint Louis University 3.500 11/01/2002 10.80 522
156 Saint Mary's College 3.000 03/01/2005 11.25 109
480 Saint Mary's College 3.000 06/01/2020 10.14 248
67 Saint Mary's University of San Antonio 3.000 10/01/1998 10.98 57
2,351 Saint Michael's College 3.000 05/01/2013 10.60 1,368
471 Saint Norbert College 3.375 04/01/2002 11.52 373
326 Saint Norbert College 3.625 04/01/2004 11.33 240
524 Saint Norbert College 3.000 04/01/2007 11.10 348
584 Saint Paul's College 3.000 11/01/2014 10.56 329
225 Saint Peter's College 3.000 05/01/1999 11.70 191
770 Saint Vincent College 3.500 05/01/2013 10.86 460
98 Sam Houston State University 2.750 10/01/1996 8.63 92
121 Sam Houston State University 2.875 10/01/1997 8.74 111
505 Sam Houston State University 3.500 10/01/2001 9.10 420
1,205 San Diego State University 3.000 11/01/2007 10.04 836
1,420 Sangamon State University 3.000 11/01/2018 10.12 778
605 Seattle University 3.500 11/01/2001 10.84 483
655 Seattle University 3.000 11/01/2008 10.55 421
520 Seton Hall University 3.000 11/01/2000 10.83 418
21 Seton Hill College 2.750 11/01/1996 11.11 19
390 Seton Hill College 3.625 11/01/2014 10.53 230
93 Siena College 2.875 10/01/1997 11.08 83
45 Sierra College 3.375 04/01/2002 10.87 36
368 Simpson College 3.000 07/01/2016 10.58 195
37 South Dakota School of Mines and Technology 2.750 04/01/1997 11.17 34
454 South Dakota School of Mines and Technology 3.000 04/01/2018 10.30 242
507 South Dakota School of Mines and Technology 3.625 04/01/2002 10.85 408
52 South Plains College 3.500 10/01/2002 10.18 41
118 South Plains College 3.625 10/01/2004 10.17 88
</TABLE>
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
SCHEDULE OF INVESTMENTS
November 30, 1995
(Dollar Amounts in Thousands)
(Continued)
<TABLE>
<CAPTION>
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ----------- -------- -------- --------- -----------
<C> <S> <C> <C> <C> <C>
$83 South Plains College 3.000 10/01/2005 10.10 $60
730 Southeast Missouri State University 3.500 04/01/2002 10.82 579
1,606 Southeast Missouri State University 3.000 04/01/2007 10.58 1,102
134 Southeastern Louisiana University 2.750 04/01/1997 11.16 123
975 Southeastern Oklahoma State University 3.000 04/01/2009 10.51 632
234 Southern Arkansas University 3.500 10/01/2002 10.23 183
80 Southern Methodist University 2.750 04/01/1996 12.25 76
717 Southern Methodist University 3.000 10/01/2007 10.61 471
348 Southern Nazarene University 3.750 04/01/2005 11.27 251
175 Southern University and
Agricultural and Mechanical College 2.875 04/01/1998 11.13 159
80 Southwest Missouri State College 2.875 10/01/1997 10.16 72
1,135 Southwest Missouri State College 3.375 10/01/2002 10.17 901
2,725 Southwest Texas State University 3.000 10/01/2015 9.51 1,592
32 Southwestern Christian College 3.000 11/01/2000 10.83 26
85 Spalding University 3.125 09/01/2000 10.95 70
491 Spalding University 3.000 09/01/2007 10.66 328
77 Springfield College 3.500 11/01/1999 10.60 66
83 Springfield College 3.125 05/01/2000 11.29 69
578 Springfield College 3.500 05/01/2013 10.67 355
122 Springfield College 3.000 05/15/2005 10.11 90
265 State Center Community College 3.000 10/01/2004 10.10 193
104 Stephen F. Austin State University 2.875 10/01/1999 9.23 89
2,337 Stephen F. Austin State University 3.375-3.500 10/01/2012 9.57 1,496
20 Stetson University 3.000 07/01/1996 11.24 18
263 Stetson University 3.000 01/01/2006 11.25 176
217 Stillman College 3.750 02/01/2004 11.42 159
468 Stonehill College 3.000 10/01/2006 10.64 316
83 Stonehill College 3.000 11/01/1998 10.96 71
175 SUNY, Mohawk Valley Community College 3.000 04/01/2005 10.26 102
165 Susquehanna University 3.125 05/01/2000 11.27 137
901 Syracuse University 3.000 05/01/2008 10.74 589
-------------- T -------------
106 Talladega College 3.375 12/01/2001 10.08 85
502 Talladega College 3.000 12/01/2012 10.24 296
25 Taylor University 2.750 10/01/1996 11.14 23
329 Taylor University 3.000 10/01/2012 10.50 191
996 Taylor University 3.000 10/01/2013 10.49 571
286 Temple University 3.125 03/01/1999 10.70 250
504 Tennessee State University 3.375 01/01/1999 11.10 431
856 Texas A & I University 3.000 07/01/2009 9.57 562
140 Texas A & I University 3.000 06/01/1998 9.10 124
284 Texas Southern University 3.500 04/01/2001 10.89 233
600 Texas Southern University 3.500 04/01/2013 10.45 366
75 Texas Tech University 2.750 03/01/1996 8.99 72
578 Transylvania University 3.000 11/01/2010 10.51 354
1,160 Trinity University 3.625 09/01/2004 10.82 844
20 Tufts University 2.750 10/01/1996 11.18 18
597 Tufts University 3.375 10/01/2001 10.87 473
2,580 Tufts University 3.000 10/01/2021 10.39 1,266
198 Tulane University of Louisiana 2.875 10/01/1997 8.62 181
270 Tulane University of Louisiana 3.000 10/01/1998 8.74 241
1,090 Tulane University of Louisiana 3.375-3.500 10/01/2001 9.06 904
</TABLE>
The accompanying notes are an integral part of these financial statements.
30
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
SCHEDULE OF INVESTMENTS
November 30, 1995
(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)
----------- ----------- -------- -------- --------- -----------
-------------- U -------------
<C> <S> <C> <C> <C> <C>
$74 Union College 3.000 11/01/2002 10.74 $56
2,410 University of Alabama in Birmingham 3.000 11/01/2008 7.97 1,779
247 University of Alabama in Huntsville 3.000 05/01/1999 10.05 216
204 University of Alaska 3.500 04/01/2000 10.94 172
308 University of Alaska 3.375 04/01/2002 10.82 244
721 University of Alaska 3.500 04/01/2003 10.80 569
380 University of Alaska 3.000 10/01/1999 10.22 320
423 University of Arizona 3.500 04/01/2003 10.82 334
70 University of Arkansas 3.000 07/01/1996 9.11 65
240 University of Arkansas at Little Rock 3.500 04/01/2001 10.04 200
229 University of Arkansas at Little Rock 3.000 11/01/2009 9.42 155
29 University of Central Arkansas 2.750 04/01/1997 11.24 27
703 University of Central Arkansas 3.000 04/01/2005 10.69 503
685 University of Central Florida 3.000 10/01/2007 10.08 462
480 University of Chicago 3.500 12/01/2001 10.10 384
153 University of Chicago 3.375 12/01/2001 10.08 122
54 University of Chicago 3.500 12/01/2002 10.11 42
150 University of Delaware 2.750 11/01/1997 8.54 138
245 University of Delaware 3.125 11/01/2000 8.84 209
408 University of Delaware 3.375 11/01/2000 8.81 356
1,640 University of Delaware 3.000 11/01/2006 9.08 1,193
769 University of Delaware 3.000 12/01/2018 8.81 445
122 University of Florida 2.750 01/01/1996 11.39 116
2,670 University of Florida 3.000 07/01/2014 10.15 1,518
55 University of Hartford 3.000 05/01/1997 12.02 50
251 University of Hartford 3.000 11/01/2001 10.78 196
105 University of Hawaii at Manoa 2.875 10/01/1999 10.13 88
1 University of Hawaii at Manoa 3.000 10/01/1996 10.20 1
113 University of Hawaii at Manoa 3.500 10/01/2001 10.18 91
115 University of Lowell 3.000 11/01/2000 7.62 102
3,250 University of Michigan 3.750 10/01/2005 9.51 2,457
370 University of Michigan 3.000 04/01/1999 10.08 323
33 University of Missouri 2.750 05/01/1996 10.14 32
320 University of Missouri 2.875 05/01/1997 10.10 298
205 University of Missouri 3.000 05/01/1998 10.07 185
1,568 University of Missouri 3.375 05/01/2002 10.03 1,302
187 University of Missouri 2.875 11/01/2000 9.25 156
312 University of Missouri 3.000 05/01/1998 10.07 281
52 University of Missouri 3.000 05/01/1998 10.08 47
202 University of Montevallo 3.125 11/01/2000 9.27 175
341 University of Nevada at Reno 3.000 11/01/1999 10.12 288
1,082 University of North Carolina 3.000 11/01/2005 8.81 822
795 University of North Carolina 3.000 01/01/2008 9.50 550
73 University of North Carolina 3.000 01/01/2007 9.50 52
1,153 University of Notre Dame 3.000 02/15/2019 10.62 590
9 University of Portland 2.750 04/01/1996 12.38 9
152 University of Portland 2.875 04/01/1998 11.96 135
970 University of Portland 3.375 04/01/2013 10.88 580
138 University of Portland 3.000 11/01/1998 10.98 119
68 University of Puerto Rico, Rio Piedras Campus 3.125 06/01/2000 9.17 58
2,159 University of Puerto Rico, Rio Piedras Campus 3.000 06/01/2011 9.39 1,370
78 University of Rhode Island 3.000 10/01/2001 9.68 64
</TABLE>
The accompanying notes are an integral part of these financial statements.
31
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
SCHEDULE OF INVESTMENTS
November 30, 1995
(Dollar Amounts in Thousands)
(Continued)
<TABLE>
<CAPTION>
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ----------- -------- -------- --------- -----------
<C> <S> <C> <C> <C> <C>
$123 University of Rochester 2.875 10/01/1998 11.04 $108
736 University of Saint Thomas 3.000 10/01/2019 10.41 373
700 University of Santa Clara 3.125 04/01/2002 11.44 537
315 University of Santa Clara 3.375 04/01/2002 11.45 243
1,450 University of Santa Clara 3.625 04/01/2004 11.33 1,071
79 University of Scranton 3.125 11/01/2000 10.84 64
302 University of South Dakota 3.500 10/01/2001 9.59 248
1,220 University of South Florida 3.750 07/01/2005 10.30 884
428 University of Steubenville 3.125 04/01/2010 10.98 265
53 University of Tampa 2.875 11/01/1998 10.95 45
185 University of Texas at Arlington 3.000 07/01/1998 9.87 161
1,476 University of Vermont 3.000 07/01/2016 8.95 882
350 University of Vermont 3.375 07/01/2001 8.33 298
1,340 University of Vermont 3.000 07/01/2019 9.06 754
340 University of Washington 3.000 08/01/1999 8.82 294
435 University of Washington 3.500 08/01/2002 9.07 352
478 University of Washington 3.000 08/01/2003 9.06 371
1,785 University Student Co-Operative Association 3.000 04/01/2019 10.70 908
229 Ursinus College 3.000 10/01/2000 10.86 184
645 Utica College 3.000 11/01/2009 10.53 405
-------------- V -------------
610 Vermont State College 3.000 06/01/2008 9.02 422
303 Vermont State College 3.000 07/01/2014 9.30 182
1,335 Villanova University 3.000 04/01/2019 10.70 681
4,180 Vincennes University 3.000 06/01/2023 9.02 2,213
3,157 Virginia Commonwealth University 3.000 06/01/2011 10.01 1,924
1,510 Virginia Commonwealth University 3.000 06/01/2004 10.08 1,093
433 Virginia Wesleyan College 3.000 11/01/2009 10.54 276
245 Virginia Wesleyan College 3.000 11/01/2010 10.51 150
-------------- W -------------
48 Waldorf College 3.125 07/01/2000 10.97 38
329 Waldorf College 3.000 07/01/2005 10.77 225
81 Wartburg College 3.500 10/01/2001 10.87 64
195 Wartburg College 3.750 04/01/2011 11.00 122
27 Wartburg College 3.000 11/01/1996 11.13 25
80 Washington State University 2.750 04/01/1996 10.15 77
1,090 Washington State University 3.625 04/01/2004 10.02 842
710 Washington State University 3.750 04/01/2004 10.03 552
1,270 Washington State University 3.375 04/01/2003 10.02 997
100 Washington State University 3.000 04/01/1999 10.08 87
304 Washington University 3.000 10/01/1998 11.05 268
607 Washington University 3.500 10/01/2001 10.91 490
238 Wayne State University 3.000 04/01/2000 11.69 208
276 Wesley College 3.375 05/01/2013 10.88 166
102 West Kern Junior College District 3.625 04/01/2004 10.73 77
107 West Liberty State College 3.000 05/01/1996 11.30 103
625 West Valley College 3.000 04/01/2009 10.50 404
595 West Virginia State College 3.000 05/01/1998 11.05 530
324 West Virginia Wesleyan College 2.875 05/01/2000 11.56 272
537 West Virginia Wesleyan College 3.000 05/01/2015 10.75 296
659 Western Carolina University 3.625 05/01/2003 10.75 516
210 Western Washington University 3.125 10/01/1998 10.18 185
385 Western Washington University 3.500 10/01/2001 10.18 310
</TABLE>
The accompanying notes are an integral part of these financial statements.
32
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
SCHEDULE OF INVESTMENTS
November 30, 1995
(Dollar Amounts in Thousands)
(Continued)
<TABLE>
<CAPTION>
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ----------- -------- -------- --------- -----------
<C> <S> <C> <C> <C> <C>
$875 Western Washington University 3.625 10/01/2004 10.18 $654
605 Western Washington University 3.750 10/01/2005 10.19 444
295 Westminster College of Salt Lake 3.000 11/01/2017 10.39 157
77 Westmoreland Hospital Association 3.500 07/01/2001 10.98 60
67 Wheaton College 2.875 04/01/1999 11.50 59
1,000 Wheaton College 3.500 04/01/2013 10.70 600
308 Wheeling College 3.500 05/01/2001 11.23 236
111 Wheeling College 3.000 11/01/2007 10.59 74
33 Wheelock College 3.000 05/01/2011 10.23 21
$79 Wichita State University 3.000 10/01/2000 9.29 $66
3 Wilson College 2.750 10/01/1996 10.76 3
915 Wittenberg University 3.000 05/01/2015 10.76 504
272 Wittenberg University 3.000 11/01/2017 10.39 144
65 Wooster Business College 3.000 03/30/2009 10.88 42
97 Worcester Polytechnic Institute 2.750 10/01/1997 11.04 86
249 Worcester Polytechnic Institute 3.375 04/01/2001 11.57 200
864 Wright State University 3.000 05/01/2009 9.89 585
-------------- Y -------------
409 York Hospital 3.000 05/01/2020 10.64 207
- --------- --------
$302,738 Total College and University Loans $201,099
- ---------
Allowance for Possible Loan Losses 632
--------
Net College and University Loans $200,467
--------
INVESTMENT AGREEMENTS (12.2%)
$5,784 Morgan Guaranty Trust Company -
Liquidity Fund 7.750 06/01/2018 7.750 $5,784
22,113 Morgan Guaranty Trust Company -
Revenue Fund 7.050 06/01/2018 7.050 22,113
- --------- --------
$27,897 Total Investment Agreements $27,897
- --------- --------
$330,635 Total Investments (100.0%) $228,364
========= ========
</TABLE>
(A) This institution has filed for bankruptcy under Chapter 11 of the Federal
Bankruptcy Code. (B) This institution has been placed on nonaccrual status as
more fully discribed in Note 6.
The accompanying notes are an integral part of these financial statements.
33
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains financial information extracted from the College and
University Facility Loan Trust Two November 30, 1995 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-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 228364
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 2185
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1280
<TOTAL-ASSETS> 231829
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 202674
<OTHER-ITEMS-LIABILITIES> 7296
<TOTAL-LIABILITIES> 209970
<SENIOR-EQUITY> 10534
<PAID-IN-CAPITAL-COMMON> 10193
<SHARES-COMMON-STOCK> 1763800
<SHARES-COMMON-PRIOR> 1763800
<ACCUMULATED-NII-CURRENT> (632)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 21859
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 23254
<OTHER-INCOME> 0
<EXPENSES-NET> 19969
<NET-INVESTMENT-INCOME> 3285
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 2855
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1570
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (38)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 10193
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 19270
<GROSS-EXPENSE> 19969
<AVERAGE-NET-ASSETS> 21901
<PER-SHARE-NAV-BEGIN> 5.69
<PER-SHARE-NII> 1.86
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .43
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> .46
<PER-SHARE-NAV-END> 6.42
<EXPENSE-RATIO> .91
<AVG-DEBT-OUTSTANDING> 211516
<AVG-DEBT-PER-SHARE> 119.92
</TABLE>
