Year 2000
The services provided to the Trust by the Owner Trustee, the Bond
Trustee and the Servicer, as well as the ability of the colleges and
universities to repay their loans owned by the Trust, depend on the smooth
functioning of their computer systems and those of their outside service
providers. Many computer software systems in use today cannot distinguish the
Year 2000 from the Year 1900 because of the way dates are encoded and
calculated.
The failure of any computer system used by key service providers to the
Trust to properly distinguish the Year 2000 could impact the ability of the
Trust to receive and process loan payments, receive or remit funds or invest its
funds, among other services which it obtains from its service providers. The
failure of any computer system used by significant borrowers could impact their
ability to make loans payments in accordance with the terms of their loan
documents. The Trust cannot control the Year 2000 compliance programs of its key
service providers or significant borrowers.
The Trust will evaluate the reports received periodically from its key
service providers to monitor their progress toward Year 2000 compliance. In the
event the Trust receives information that indicates there is a material
potential for not receiving compliant services from these providers, the Trust
intends to develop appropriate contingency plans. At this time there can be no
assurance that there will be no adverse impact on the Trust. The obligation to
make any necessary adaptations to their computer systems to prepare for the Year
2000 is the responsibility of the service provider that maintains the system.
The Trust does not expect to incur any material expense in that regard.
The Trust will evaluate the reports received periodically from the
various significant borrowers. The Trust has received no information from any
significant borrowers of any prospective inability to make the loan payments due
the Trust on account of Year 2000 compliance issues. The Trust can give no
assurances that the ability of the colleges and universities to repay the loans
owned by the Trust will not be affected by Year 2000 issues. In the event loan
payments are not received in a timely manner, payment to certificateholders
and/or bondholders may be impaired.
<PAGE>
College and University
Facility Loan Trust Two
----------------------------------
Compiled Financial Statements
Six Months Ended May 31, 1999
<PAGE>
Accountants' Compilation Report
To the Owner Trustee of
College and University Facility
Loan Trust Two:
We have compiled the accompanying balance sheet of College and University
Facility Loan Trust Two (the "Trust"), including the schedule of investments, as
of May 31, 1999, and the related statements of operations, cash flows, changes
in net assets and financial highlights for the six months then ended, in
accordance with standards established by the American Institute of Certified
Public Accountants. The financial information for the years ended November 30,
1998, 1997, 1996, 1995 and 1994, presented herein for comparative purposes, was
audited by other auditors whose report thereon dated January 29, 1999 expressed
an unqualified opinion.
A compilation is limited to presenting in the form of financial statements
information that has been obtained from the books and records of the Trust. We
have not audited or reviewed the accompanying financial statements or
supplemental material and, accordingly, do not express an opinion or any other
form of assurance on them.
We are not independent with respect to College and University Facility Loan
Trust Two.
/s/ BDO Seidman, LLP
July 26, 1999
<PAGE>
College and University
Facility Loan Trust Two
Balance Sheet
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
May 31, 1999
- -------------------------------------------------------------------------------------------------------------------------
<S> <C>
Assets
Investments, at amortized cost, net of allowance for possible loan
losses of $1,132,376 (Notes 1, 2, 6, 7 and 8 and Schedule of Investments) $163,231,542
Cash 60,102
Prepaid expenses 13,750
Interest receivable 1,500,562
Deferred bond issuance costs (Note 2) 650,130
- -------------------------------------------------------------------------------------------------------------------------
Total assets 165,456,086
- -------------------------------------------------------------------------------------------------------------------------
Liabilities
Bonds payable, net of unamortized discount (Notes 3 and 8) 140,717,539
Interest payable (Note 3) 3,648,403
Due to bank (Note 9) 312,498
Accrued expenses and other liabilities 261,651
Dividends payable (Note 5) 176,484
Payable for redemption of Class A Preferred Certificates (Note 5) 2,192,513
- -------------------------------------------------------------------------------------------------------------------------
Total liabilities 147,309,088
- -------------------------------------------------------------------------------------------------------------------------
Net Assets
Class A Preferred Certificates, par value $1 - authorized and outstanding -
393,335 certificates (preference as to annual dividends of 13.65%,
mandatory redemption and liquidation at par value) (Note 5) 393,335
- -------------------------------------------------------------------------------------------------------------------------
Class B Certificates, par value $1 - authorized, issued and
outstanding - 1,763,800 certificates (Note 5) 1,763,800
Accumulated undistributed net investment income (Note 2) 911,057
Paid-in capital (Note 2) 15,078,806
- -------------------------------------------------------------------------------------------------------------------------
Total net assets applicable to Class B certificateholders 17,753,663
- -------------------------------------------------------------------------------------------------------------------------
Total net assets $ 18,146,998
=========================================================================================================================
Net asset value per Class B certificate
(based on 1,763,800 certificates outstanding) $ 10.07
=========================================================================================================================
</TABLE>
See accompanying accountants' compilation report and notes to
financial statements.
3
<PAGE>
College and University
Facility Loan Trust Two
Statement of Operations
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Six months ended May 31, 1999
- -------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Interest income (Note 2) $8,173,580
- -------------------------------------------------------------------------------------------------------------------------
Expenses:
Interest expense (Notes 2 and 3) 6,701,416
Servicer fees (Note 4) 83,035
Trustee fees (Note 4) 27,683
Other trust and bond administration expenses 104,897
- -------------------------------------------------------------------------------------------------------------------------
Total expenses 6,917,031
- -------------------------------------------------------------------------------------------------------------------------
Net investment income 1,256,549
Provision for loan losses (Notes 2 and 6) -
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,256,549
Dividends to Class A Preferred Certificateholders (176,484)
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Class B
certificateholders resulting from operations $1,080,065
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying accountants' compilation report and notes to
financial statements.
4
<PAGE>
College and University
Facility Loan Trust Two
Statement of Cash Flows
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Six months ended May 31, 1999
- -------------------------------------------------------------------------------------------------------------------------
<S> <C>
Cash flows from operating activities:
Interest received $ 3,956,763
Interest paid (3,932,674)
Increase in due to bank 312,498
Operating expenses paid (211,701)
- -------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 124,886
- -------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Net decrease in funds held under investment agreements 4,613,643
Principal payments on Loans 11,053,815
- -------------------------------------------------------------------------------------------------------------------------
Net cash provided by investing activities 15,667,458
- -------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Principal repayments on Bonds (14,213,563)
Dividends on Class A Preferred certificates (266,968)
Redemptions of Class A Preferred certificates (1,325,772)
- -------------------------------------------------------------------------------------------------------------------------
Net cash used for financing activities (15,806,303)
- -------------------------------------------------------------------------------------------------------------------------
Net decrease in cash (13,959)
Cash, beginning of period 74,061
- -------------------------------------------------------------------------------------------------------------------------
Cash, end of period $ 60,102
=========================================================================================================================
Reconciliation of net increase in net assets resulting from operations to net
cash provided by operating activities:
Net increase in net assets resulting from operations $ 1,256,549
Decrease in interest receivable 111,909
Increase in prepaid expenses (13,750)
Increase in due to bank 312,498
Increase in accrued expenses and other liabilities 17,662
Decrease in Bond interest payable (284,271)
Amortization of original issue discount on Bonds 2,998,683
Amortization of purchase discount on Loans (4,328,725)
Amortization of deferred Bond issuance costs 54,331
- -------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities $ 124,886
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying accountants' compilation report and notes to
financial statements.
5
<PAGE>
College and University
Facility Loan Trust Two
Statement of Changes in Net Assets
(Note 2 (f))
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended
May 31, November 30,
1999 1998
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
From operations:
Net investment income $ 1,256,549 $ 2,886,100
Provision for loan losses - (22,320)
Dividends to certificateholders (Notes 2 and 5):
Class A Preferred Certificateholders
($.1365 per certificate annually)
From net investment income (176,484) -
As tax return of capital - (591,798)
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Class B
certificateholders resulting from operations 1,080,065 2,271,982
- -------------------------------------------------------------------------------------------------------------------------
Capital certificate transactions (Note 5):
Redemptions of Class A Preferred certificates (2,192,513 and
2,836,268 certificates in 1999 and 1998, respectively) (2,192,513) (2,836,268)
- -------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from
capital certificate transactions (2,192,513) (2,836,268)
- -------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets (1,112,448) (564,286)
Net assets:
Beginning of period 19,259,446 19,823,732
- -------------------------------------------------------------------------------------------------------------------------
End of period $18,146,998 $19,259,446
=========================================================================================================================
</TABLE>
See accompanying accountants' compilation report and notes to
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>
- ------------------------------------------------------------------------------------------------------------------------------------
For the Six
Months Ended
May 31, Years Ended November 30,
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.45 $8.17 $7.27 $6.42 $5.69 $4.77
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .72 1.63 1.64 1.75 1.86 2.09
Provision for loan losses - (.01) (.11) (.11) (.24) (.11)
Dividends to Class A Preferred
Certificateholders:
From net investment income (.10) - - - (.43) (.26)
As tax return of capital - (.34) (.63) (.79) (.46) (.80)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.07 $9.45 $8.17 $7.27 $6.42 $5.69
====================================================================================================================================
Total investment return (a) N/A N/A N/A N/A N/A N/A
Net assets applicable to
Class A Preferred Certificates,
end of period $ 393,335 $ 2,585,848 $ 5,422,117 $ 8,629,880 $10,534,185 $11,857,751
Net assets applicable to Class B
Certificates, end of period $17,753,663 $16,673,598 $14,401,615 $12,816,146 $11,324,698 $10,039,426
====================================================================================================================================
Ratios and Supplemental Data:
Ratio of operating expenses to average
net assets applicable to
Class B Certificates 80.37%(b)(c) 99.83%(b) 123.64%(b) 150.97%(b) 186.94%(b) 237.22%(b)
Ratio of net investment income
to average net assets applicable
to Class B Certificates 14.60%(c) 18.57% 21.29% 25.54% 30.76% 40.16%
Number of Class B Certificates
outstanding, end of period 1,763,800 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 operating expenses to average net
assets applicable to Class B Certificates was 2.51%(c), 2.32%, 2.56%,
2.67%, 4.70% and 4.66% in 1999, 1998, 1997, 1996, 1995 and 1994,
respectively.
(c) Annualized.
See accompanying accountants' compilation report and notes to
financial statements.
7
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Organization College and University Facility Loan Trust Two (the
and Business 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 State
Street Bank and Trust Company, formerly the Bank of
Boston, (the Owner Trustee), not in its individual
capacity but solely as Owner Trustee. The Trust is
registered under the Investment Company Act of 1940
(as amended) as a diversified, closed-end, management
investment company.
The Trust was formed for the sole purpose of raising
funds through the issuance and sale of bonds (the
Bonds). The Trust commenced operations on 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 are managed by the Bond
Trustee in various fund accounts and are invested
under investment contracts (Note 2) as specified in
the Indenture.
See accompanying accountants' compilation report.
8
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Organization All payments on the Loans and earnings under the
and Business investment agreements and any required transfers from
(Continued) the Expense 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.
2. Summary of (a) College and University Facility Loans
Significant
Accounting The Loans were purchased and recorded at a discount
Policies below par. Pursuant to a "no-action letter" that the
Trust received from the Securities and Exchange
Commission, the Loans, included in Investments in the
accompanying balance sheet, are being accounted for
under the amortized cost method of accounting. Under
this method, the difference between the cost of each
Loan to the Trust and the scheduled principal and
interest payments is amortized, assuming no
prepayments of principal, and included in the Trust's
income by applying the Loan's effective interest rate
to the amortized cost of that Loan. The remaining
balance of the purchase discount on the Loans as of
May 31, 1999 was approximately $65,790,000. As a
result of prepayments of Loans in the six months
ended May 31, 1999, additional interest income of
approximately $331,000 was recognized.
See accompanying accountants' compilation report.
9
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
- --------------------------------------------------------------------------------
2. Summary of (a) College and University Facility Loans
Significant (Continued)
Accounting
Policies The Trust's policy is to discontinue the accrual of
(Continued) interest on Loans for which payment of principal or
interest is 180 days or more past due or for other
such Loans that management believes the collection of
interest and principal is doubtful. When a Loan is
placed on nonaccrual status, all previously accrued
but uncollected interest is reversed against the
current period's interest income. Subsequently,
interest income is recorded when received. Payments
are applied to interest first, with the balance, if
any, applied to principal. At May 31, 1999, no loans
have been placed on nonaccrual status.
(b) Other Investments
Other investments, which are included in Investments
in 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. These investment agreements
terminate on the earlier of June 1, 2018 or the date
on which the Bonds are paid-in-full.
(c) Federal Income Taxes
It is the Trust's policy to comply with the
requirements applicable to a regulated investment
company under Subchapter M of the Internal Revenue
Code of 1986, as amended, and to distribute
substantially all of its investment company taxable
income to its certificateholders each year.
Accordingly, no federal or state income tax provision
is required.
For tax purposes, the Loans were transferred to the
Trust at their face values. Accordingly, the
accretion of the purchase discount creates a
permanent book-tax difference.
See accompanying accountants' compilation report.
10
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
- --------------------------------------------------------------------------------
2. Summary of (d) Deferred Bond Issuance Costs
Significant
Accounting Deferred Bond issuance costs are being amortized
Policies using the effective interest rate method over the
(Continued) estimated lives of the Bonds, which are based on the
scheduled payments of the Loans. When Loan
prepayments occur, an additional portion of the
deferred issuance costs is expensed in the year the
prepayment occurred, so that the future effective
interest rate remains unchanged.
(e) Accounting for Impairment of a Loan and
Allowance for Loan Losses
The Trust accounts for credit losses in accordance
with Statement of Financial Accounting Standards
(SFAS) No. 114, "Accounting by Creditors for
Impairment of a Loan," as amended by SFAS No. 118
(hereafter collectively referred to as SFAS 114).
SFAS 114 requires that impaired loans, as defined,
be measured based on the present value of the
expected future cash flows discounted at the loan's
effective interest rate or the fair value of the
collateral if the loan is collateral dependent.
Management is responsible for establishing an
allowance for loan losses based on its best estimate
of losses that might occur. Ultimate losses may vary
from the current estimate. This estimate is reviewed
periodically, and as a provision to the allowance for
loan losses becomes necessary, it is reported in the
period in which it becomes known. Allowances are
established for those loans that, in the opinion of
management, are deemed to be impaired and potentially
uncollectible.
The allowance for loan losses is based on
management's evaluation of the level of the allowance
required in relation to the estimated loss exposure
in the loan portfolio. Factors considered in
evaluating the adequacy of the allowance include
previous loss experience, current economic conditions
and their effect on borrowers, the performance of
individual Loans in relation to contract terms,
adverse situations that may affect the borrower's
ability to pay and the estimated fair values of
collateral.
See accompanying accountants' compilation report.
11
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
- --------------------------------------------------------------------------------
2. Summary of (e) Accounting for Impairment of a Loan and
Significant Allowance for Loan Losses (Continued)
Accounting
Policies The factors discussed above are inherently difficult
(Continued) to predict. Accordingly, the final outcome of these
estimates and the ultimate realization of amounts on
certain Loans may vary significantly from the amounts
reflected in the accompanying financial statements.
(f) Presentation of Capital Distributions
Capital distributions are accounted for in accordance
with the American Institute of Certified Public
Accountants Statement of Position 93-2,
"Determination, Disclosure and Financial Statement
Presentation of Income, Capital Gain and Return of
Capital Distributions by Investment Companies"
(SOP 93-2). SOP 93-2 requires the Trust to report
distributions that are in excess of tax-basis
earnings and profits as a tax return of capital and
to present the capital accounts on a basis that
approximates the amounts that are available for
future distributions on a tax-basis.
All tax earnings and profits have been distributed,
therefore all accumulated undistributed net
investment income has been reclassified to paid-in
capital as of November 30, 1998. This
reclassification results from permanent book and tax
differences such as the receipt of tax-exempt
interest income on certain Loans, the related
interest expense on the Bonds, and the accretion of
purchase discount on the Loans. Amounts deducted
for the loan loss reserve and dividends payable are
not currently deductible for tax purposes and have
been reclassified as an accumulated deficit. These
reclassifications had no impact on the net
investment income or net assets of the Trust.
The Trust expects to have a tax return of capital for
the fiscal year ending November 30, 1999; however,
the amount cannot be reasonably estimated at May 31,
1999. Therefore, the current period net increase in
net assets of $1,080,065 has been offset against the
accumulated deficit.
See accompanying accountants' compilation report.
12
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
- --------------------------------------------------------------------------------
2. Summary of (g) Use of Estimates
Significant
Accounting The preparation of financial statements in conformity
Policies with generally accepted accounting principles
(Continued) requires management to make estimates and assumptions
that affect the reported amounts of assets and
liabilities at the date of the financial statements
and the reported amounts of revenues and expenses
during the reporting period. Actual results could
differ from those estimates.
3. Bonds The Bonds outstanding at May 31, 1999 consist of the
following:
<TABLE>
<CAPTION>
Outstanding Unamortized
Interest Stated Principal Discount Carrying Value
Type Rate Maturity (000s) (000s) (000s)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sequential 4.00% June 1, 2002 $ 33,050 $ 1,009 $ 32,041
Sequential 4.00 June 1, 2018 149,370 40,693 108,677
- ----------------------------------------------------------------------------------------------------------------------------
$182,420 $41,702 $140,718
============================================================================================================================
</TABLE>
Interest on the Bonds is payable semiannually. On
June 1, 1999, the Trust made a principal payment of
$9,382,091 on the 4%, June 1, 2002 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.
See accompanying accountants' compilation report.
13
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
- --------------------------------------------------------------------------------
3. Bonds The estimated aggregate principal payments on the
(Continued) Bonds at May 31, 1999 after taking into consideration
actual Loan prepayments, Defaulted Loans and the
Maximum Principal Distribution Amount, as defined in
the Indenture, are as follows:
<TABLE>
<CAPTION>
Amount
Fiscal Year (000s)
-------------------------------------------------------------
<S> <C>
1999 $ 9,382
2000 19,494
2001 18,313
2002 18,344
2003 13,931
Thereafter 102,956
-------------------------------------------------------------
Total $182,420
-------------------------------------------------------------
</TABLE>
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 on the Bonds remains unchanged.
See accompanying accountants' compilation report.
14
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
- --------------------------------------------------------------------------------
4. Administrative (a) Servicer
Agreements
As compensation for the services provided under the
servicing agreement, GMAC Commercial Mortgage
Corporation (GMAC) receives a collection fee. The fee
is earned each date payments are received on each
Loan and is equal to .075 of 1% of the outstanding
principal balance of each Loan divided by the number
of payments of principal and interest in a calendar
year. For the period ended May 31, 1999, GMAC's fees
totaled $83,035.
(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 $7,500 and $6,250, respectively, for the
period ended May 31, 1999.
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 Bond Trustee is also reimbursed
for out-of-pocket expenses in an amount not to
exceed 4% of the applicable annual fee. For
the six months ended May 31, 1999, Bond Trustee
fees were $13,386. In addition, the Bond Trustee
was reimbursed $547 for out-of-pocket expenses.
See accompanying accountants' compilation report.
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 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
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.
See accompanying accountants' compilation report.
16
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
- --------------------------------------------------------------------------------
5. Certificates On June 1, 1999, the Trust paid $2,368,997 to the
(Continued) holders of Class A Preferred certificates, of which
$176,484 was for payment of dividends and $2,192,513
was a redemption of Class A Preferred certificates.
These payments are reflected as liabilities in the
accompanying balance sheet.
The certificateholders shall each be entitled to one
vote per certificate.
6. Allowance For An analysis of the allowance for loan losses for the
Loan Losses period ended May 31, 1999 is summarized as follows:
<TABLE>
<S> <C>
Balance, beginning of period $1,132,376
Provision -
Charge-off -
---------------------------------------------------------------------------
Balance, end of period $1,132,376
========================================================================
</TABLE>
At May 31, 1999, there were no recorded investments
in loans that are considered to be impaired under
SFAS 114.
See Note 2 (e), "Accounting for Impairment of a Loan
and Allowance for Loan Losses," for a discussion of
the Trust's impaired loan accounting policy.
See accompanying accountants' compilation report.
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 May 31, 1999, excluding payments for
Loans in Default, as defined in the Indenture, are as
follows:
<TABLE>
<CAPTION>
Principal Interest
Payments Payments Total
Fiscal year (000s) (000s) (000s)
------------------------------------------------------------------------------
<S> <C> <C> <C>
1999 $ 13,063 $ 3,321 $ 16,384
2000 21,417 6,113 27,530
2001 20,054 5,420 25,474
2002 19,602 4,749 24,351
2003 15,787 4,170 19,957
Thereafter 120,287 24,239 144,526
------------------------------------------------------------------------------
Total $210,210 $48,012 $258,222
==============================================================================
</TABLE>
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. As of May 31, 1999, there
were no Loans in Default.
The following analyses summarize the stratification
of the loan portfolio by type of collateral and
institution as of May 31, 1999:
<TABLE>
<CAPTION>
Amortized
Number Cost
Type of Collateral of Loans (000s) %
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Loans secured by a
first mortgage 266 $ 78,181 54.1%
-------------------------------------------------------------------------------
Loans not secured by
a first mortgage 167 66,239 45.9
Total Loans 433 $144,420 100.0%
===============================================================================
</TABLE>
See accompanying accountants' compilation report.
18
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. Loans
(Continued)
<TABLE>
<CAPTION>
Amortized
Number Cost
Type of Institution of Loans (000s) %
-----------------------------------------------------------------------------------
<S> <C> <C> <C>
Private 274 $ 78,437 54.3%
Public 159 65,983 45.7
-----------------------------------------------------------------------------------
Total Loans 433 $144,420 100.0%
===================================================================================
</TABLE>
The ability of a borrower to meet future debt service
payments on a Loan will depend on a number of factors
relevant to the financial condition of such borrower,
including, among others, the size and diversity of
the borrower's sources of revenues; enrollment
trends; reputation; management expertise; the
availability and restrictions on the use of
endowments and other funds; the quality and
maintenance costs of the borrower's facilities; and,
in the case of some Loans to public institutions,
which are obligations of a state, the financial
condition of the relevant state or other governmental
entity and its policies with respect to education.
The ability of a borrower to maintain enrollment
levels will depend on such factors as tuition costs,
geographical location, geographic diversity, quality
of the student body, quality of the faculty and the
diversity of program offerings.
The collateral for Loans that are secured by a
mortgage on real estate generally consists of special
purpose facilities, such as dormitories, dining halls
and gymnasiums, which are integral components of the
overall educational setting. As a result, in the
` event of borrower default on a Loan, the Trust's
ability to realize the outstanding balance of the
Loan through the sale of the underlying collateral
may be negatively impacted by the special purpose
nature and location of such collateral.
See accompanying accountants' compilation report.
19
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. Loans A number of borrowers are currently experiencing
(Continued) 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 SFAS No. 107, "Disclosures about Fair Value of
of Financial Financial Instruments," allows for the use of a wide
Instruments range of valuation techniques; therefore, it may be
difficult to compare the Trust's fair value
information to 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.
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.
See accompanying accountants' compilation report.
20
<PAGE>
College and University
Facility Loan Trust Two
Notes to Financial Statements
- --------------------------------------------------------------------------------
8. Fair Value The estimated fair value of each category of the
of Financial Trust's financial instruments and the related book
Instruments value presented in the accompanying balance sheet as
(Continued) of May 31, 1999 is as follows:
<TABLE>
<CAPTION>
Book Value Fair Value
(000s) (000s)
-----------------------------------------------------------------------------------
<S> <C> <C>
Loans $143,288 * $173,189
Investment Agreements:
Revenue Fund 15,881 16,888
Liquidity Fund 4,063 4,718
-----------------------------------------------------------------------------------
$163,232 $194,795
===================================================================================
Bonds $140,718 $160,816
===================================================================================
</TABLE>
* Net of Allowance for Loan Losses of $1,132,376.
9. Due to Bank On May 5, 1999, approximately $457,000 of funds were
inadvertently deposited into the Trust's bank
account. These funds were subsequently transferred to
the Trust's investment account. On May 24, 1999, the
Trust reimbursed this amount from its bank account,
creating an overdraft position. As of May 31, 1999,
the outstanding overdraft balance was $312,498 and is
reflected as due to bank in the accompanying balance
sheet.
See accompanying accountants' compilation report.
21
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
----------------------------------------------
SCHEDULE OF INVESTMENTS
-----------------------
May 31, 1999
------------
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ------------------------------------------------ ----------- ---------- -------- ------------
COLLEGE AND UNIVERSITY LOANS (87.8%)
-------------- A --------------
<S> <C> <C> <C> <C> <C>
$490 Alabama Agricultural and Mechanical University 3.000-3.750 07/01/2005 10.25 $387
1,875 Alabama Agricultural and Mechanical University 3.000 05/01/2018 10.27 1,074
149 Albion College 3.000 10/01/2009 10.56 104
548 Albright College 3.000 11/01/2015 10.23 339
15 Alcorn State University 2.875 11/01/1999 10.11 14
28 Alcorn State University 3.500 11/01/2002 10.15 25
50 Allegheny College 3.000 07/01/2015 10.38 21
190 Alma College 3.750 04/01/2002 11.52 165
65 American International College 3.375 10/01/2002 10.84 57
92 Anderson University 3.500 03/01/2003 11.42 76
230 Anderson University 3.000 03/01/2006 11.19 170
51 Appalachian State University 3.500 07/01/2001 10.28 46
320 Arizona State University 3.125 09/01/2001 10.17 288
250 Arizona State University 3.375 10/01/2002 10.16 219
1,090 Arizona State University 3.000 04/01/2006 10.60 830
92 Arkansas State University 3.500 04/01/2001 10.97 83
82 Arkansas State University 3.375 10/01/2000 10.25 78
583 Arkansas State University 3.750 04/01/2005 10.75 466
10 Arkansas Technical University 2.875 10/01/1999 10.21 10
2,175 Auburn University 3.000 12/01/2018 9.16 1,297
211 Azusa Pacific University 3.750 04/01/2015 10.88 130
-------------- B --------------
114 Ball State University 3.000 07/01/1999 9.98 109
1,065 Baptist College at Charleston 3.000 03/01/2019 10.73 571
669 Baptist College at Charleston 3.000 03/01/2011 10.98 433
187 Becker Junior College 3.000 04/01/2005 11.21 144
93 Bellarmine College 3.625 05/01/2004 11.34 77
126 Benedict College 3.750 11/01/2004 10.75 104
892 Benedict College 3.000 11/01/2006 10.61 686
1,854 Benedict College 3.000 11/01/2020 10.36 1,007
1,739 Bentley College 3.000 11/01/2007 10.57 1,286
311 Bethany College 3.375 11/01/2012 10.54 209
285 Bethany College 3.000 11/01/2017 10.40 163
535 Bethany College 3.000 11/01/2012 10.40 347
16 Bethune-Cookman College 3.000 11/01/2002 10.74 14
178 Boston Architectural Center 3.750 11/01/2004 10.77 149
135 Bradford College 3.375 10/01/2001 10.85 121
292 Brandeis University 3.000 11/01/2011 10.64 192
135 Brevard College 3.000 11/01/2004 10.71 112
70 Brevard College 3.000 05/01/2006 11.12 52
See accompanying accountants' compilation report and notes to financial
statements.
22
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
----------------------------------------------
SCHEDULE OF INVESTMENTS
-----------------------
May 31, 1999
------------
(Dollar Amounts in Thousands)
(continued)
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ------------------------------------------------ ----------- ---------- -------- ------------
$102 Bryan College 3.500 04/01/2003 11.39 $85
2 Buena Vista College 3.500 02/01/2000 11.85 2
108 Buena Vista College 3.000 02/01/2006 11.23 80
-------------- C --------------
1,030 California Polytechnic State University 3.000 11/01/2006 10.05 778
345 California State University 3.000 11/01/2006 8.75 279
1,270 California State University 3.000 11/01/2013 8.93 874
2,673 California State University 3.000 11/01/2019 8.99 1,630
99 Calvin College 3.000 11/01/2000 10.83 92
2,200 Cameron University 3.000 04/01/2007 10.16 1,643
150 Canisius College 3.375 05/01/2002 11.48 132
1,610 Canisius College 3.000 11/01/2017 10.40 927
59 Canisius College 3.000 11/01/1999 10.89 57
190 Carnegie-Mellon University 3.500 11/01/2001 10.52 172
270 Carnegie-Mellon University 3.000 05/01/2009 10.73 187
1,020 Carnegie-Mellon University 3.000 11/01/2017 10.51 585
112 Carroll College 3.125 06/01/2000 10.75 103
360 Carroll College 3.750 06/01/2014 10.46 231
169 Carroll College 3.000 06/01/2018 10.15 96
432 Carroll College 3.750 03/01/2015 10.93 265
205 Case Western Reserve University 3.500 04/01/2003 11.39 170
249 Catawba College 3.000 12/01/2009 10.27 170
78 Central Missouri State University 3.125 07/01/2000 10.24 72
198 Central Missouri State University 3.375 07/01/2001 10.27 178
579 Central Missouri State University 3.625 07/01/2004 10.29 478
995 Central Missouri State University 3.000 07/01/2007 10.18 740
158 Champlain College 3.000 12/01/2013 10.19 97
570 Chapman College 3.000 10/01/2013 10.65 353
348 Chapman College 3.000 11/01/2005 10.63 273
235 Chapman College 3.000 11/01/2007 10.57 174
1,610 Chateau Community Housing Association 3.000 10/01/2012 10.51 1,037
70 Cisco Junior College 3.000 11/01/2005 10.04 56
110 Cisco Junior College 3.000 07/01/2005 10.15 84
16 Claflin College 3.125 04/01/2001 11.59 14
395 Clemson University 3.000 07/01/2005 9.51 321
146 Coker College 3.000 12/01/2009 10.04 100
87 College of Notre Dame of Maryland 3.375 11/01/2002 10.48 76
191 College of Our Lady of the Elms 3.375 10/01/2001 10.86 171
923 College of Saint Rose 3.000 05/01/2022 10.43 483
554 College of Saint Thomas 3.000 11/01/2009 10.53 388
51 College of Santa Fe 3.500 10/01/2001 10.86 46
219 College of Santa Fe 3.000 10/01/2005 10.66 172
See accompanying accountants' compilation report and notes to financial
statements.
23
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
----------------------------------------------
SCHEDULE OF INVESTMENTS
-----------------------
May 31, 1999
------------
(Dollar Amounts in Thousands)
(continued)
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ------------------------------------------------ ----------- ---------- -------- ------------
$615 College of Santa Fe 3.000 10/01/2018 10.43 $349
5 College of the Holy Cross 3.500 10/01/1999 11.03 5
1,060 College of the Holy Cross 3.625 10/01/2013 10.60 701
805 College of the Holy Cross 3.000 10/01/2006 10.63 611
36 College of the Virgin Islands 3.000 11/01/2002 10.15 32
86 College of the Virgin Islands 3.000 10/01/2003 10.16 73
244 Columbia College 3.625 07/01/2004 10.90 198
80 Columbia College 3.000 07/01/2006 10.80 61
137 Concordia College 3.000 04/01/2009 11.05 96
730 Concordia College 3.000 05/01/2019 10.65 395
54 Connecticut College 3.000 11/01/1999 10.89 52
64 Cornell College 3.000 10/01/2005 10.66 50
333 Cumberland University 3.000 08/01/2017 10.52 190
-------------- D --------------
28 Daemen College 3.125 04/01/2000 11.68 26
625 Daemen College 3.000 04/01/2016 10.77 360
192 Dakota Wesleyan University 3.000 10/01/2015 10.46 115
250 Dana College 3.000 04/01/2005 11.22 192
53 Dana College 3.500 04/01/2003 11.39 44
55 Dean Academy & Jr. College 3.500 10/01/1999 10.97 53
137 Dickinson College 3.000 05/01/2018 10.30 79
246 Dillard University 3.000 04/01/2008 11.09 177
75 Doane College 3.000 11/01/2000 10.83 69
390 Dormitory Authority State of NY
(New York University) 3.000 07/01/2000 8.95 364
622 Dowling College 3.000 10/01/2010 10.75 418
52 Drexel University 2.875 05/01/2001 11.57 47
1,220 Drexel University 3.500 05/01/2014 10.53 776
5 Drury College 3.125 10/01/1999 11.32 5
288 Drury College 3.000 04/01/2015 10.63 175
502 Drury College 3.000 10/01/2010 10.75 337
1,085 D'Youville College 3.000 04/01/2018 10.90 592
-------------- E --------------
64 East Texas State University 2.875 09/01/1999 8.94 62
1,296 East Texas State University 3.500 03/01/2002 9.48 1,107
1,614 East Texas State University 3.000 03/01/2002 9.60 1,351
83 East Texas State University 3.000 11/01/2000 9.26 78
0 Eastern Oklahoma State College 3.125 05/15/1999 9.96 0
410 Elizabeth City State University 3.000 10/01/2017 10.02 247
500 Embry-Riddle Aeronautical University 3.000 09/01/2007 10.64 367
167 Emmanuel College 3.000 11/01/2013 10.45 105
See accompanying accountants' compilation report and notes to financial
statements.
24
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
----------------------------------------------
SCHEDULE OF INVESTMENTS
-----------------------
May 31, 1999
------------
(Dollar Amounts in Thousands)
(continued)
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ------------------------------------------------ ----------- ---------- -------- ------------
-------------- F --------------
$21 Fairleigh Dickinson University 3.125 11/01/1999 10.93 $20
1,710 Fairleigh Dickinson University 3.000 11/01/2017 10.39 986
213 Florida Agricultural and Mechanical University 3.625 07/01/2004 10.29 175
223 Florida Atlantic University 3.500 07/01/2004 10.27 186
355 Florida Atlantic University 3.000 07/01/2006 10.18 271
197 Florida Institute of Technology 3.000 11/01/2009 10.53 138
32 Florida Southern College 3.000 11/01/1999 10.89 31
187 Florida State University 3.500 06/01/2001 8.44 171
710 Florida State University 3.000 01/01/2009 9.40 525
43 Fort Hays State University 3.500 10/01/2001 10.19 39
108 Fort Hays State University 3.625 10/01/2002 10.18 95
170 Fort Hays State University 3.000 10/01/2007 10.08 128
575 Fort Lewis College 3.000 10/01/2006 10.09 444
-------------- G --------------
745 Gannon University 3.000 11/01/2011 10.49 495
205 Gannon University 3.000 12/01/2022 10.13 105
77 Gavilan College 3.000 04/01/2006 10.59 58
49 George Fox College 3.500 04/01/2001 11.25 44
794 George Fox College 3.000 07/01/2018 10.64 441
28 Georgetown College 3.000 12/01/1999 10.02 26
503 Georgetown College 3.000 12/01/2008 10.04 355
890 Georgetown College 3.000 12/01/2009 10.05 612
2,904 Georgetown University 3.000 11/01/2020 10.36 1,577
7,384 Georgetown University 4.000 11/01/2020 10.52 4,363
1,167 Georgetown University 3.000 05/01/2005 10.86 923
556 Georgia Education Authority Board of Regents
of the University System of Georgia 3.375 01/01/2003 10.60 469
6 Grambling State University 3.000 11/01/1999 10.12 6
85 Grambling State University 3.000 11/01/2000 10.11 79
-------------- H --------------
395 Hampshire College 3.000 07/01/2013 10.75 243
1,419 Hampshire College 3.000 02/01/2014 10.70 866
195 Harcum Junior College 3.375 11/01/2002 10.77 169
660 Harper Grace Hospital 3.625 04/01/2005 11.26 517
147 Hesston College 3.000 04/01/2006 11.14 109
330 High Point College 3.000 12/01/2010 10.26 219
1,959 Hinds Junior College 3.000 04/01/2013 10.42 1,258
81 Hiwassee College 3.375 01/01/2003 11.58 68
203 Hiwassee College 3.000 09/15/2018 10.58 113
2,048 Hofstra University 3.000 11/01/2012 10.61 1,314
300 Hood College 3.625 11/01/2014 10.54 194
See accompanying accountants' compilation report and notes to financial
statements.
25
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
----------------------------------------------
SCHEDULE OF INVESTMENTS
-----------------------
May 31, 1999
------------
(Dollar Amounts in Thousands)
(continued)
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ------------------------------------------------ ----------- ---------- -------- ------------
$405 Houston Tillotson College 3.500 04/01/2014 10.90 $255
45 Huntingdon College 3.500 03/01/2002 11.54 38
270 Huntingdon College 3.000 10/01/2008 10.60 194
-------------- I --------------
177 Illinois Institute of Technology 3.000 03/01/2003 11.10 149
262 Indiana University 3.375 04/01/2001 10.06 238
600 Indiana University 3.500 04/01/2001 10.06 544
1,208 Indiana University 3.750 12/01/2003 8.84 1,045
190 Indiana University 3.000 07/01/1999 9.31 182
126 Inter American University of Puerto Rico 3.000 09/01/2007 10.66 94
2,513 Inter American University of Puerto Rico 3.000 01/01/2017 10.94 1,421
-------------- J --------------
1,780 James Madison University 3.000 06/01/2009 10.49 1,234
14 John Brown University 2.875 04/01/2000 11.64 13
400 Johnson & Wales College 3.000 11/01/2013 10.59 250
205 Johnson C. Smith University 3.000 05/01/2005 11.18 158
30 Judson College 3.750 07/01/2004 10.92 25
-------------- K --------------
191 Kansas State University 3.375 10/01/2002 9.12 172
775 Kansas State University 3.625 04/01/2004 9.77 650
92 Kendall College 3.375 10/01/2002 10.82 80
246 Kendall College 3.000 10/01/2008 10.59 176
276 Kent State University 3.500 12/01/2000 8.90 252
330 Knox College 3.000 04/01/2006 11.15 246
-------------- L --------------
310 LaGrange College 3.000 03/01/2009 11.06 210
319 Langston University 3.375 10/01/2003 10.15 272
995 Langston University 3.000 04/01/2007 10.56 732
469 Lassen Junior College District 3.000 04/01/2020 10.27 257
1,150 Leland Stanford Junior College 3.375 05/01/2003 11.33 955
184 Lenoir Rhyne College 3.000 12/01/2006 10.04 138
85 Linfield College 3.000 10/01/2017 10.44 49
699 Long Island University 3.750 05/01/2005 11.22 551
218 Long Island University 3.000 11/01/2009 10.69 151
762 Long Island University 3.000 11/01/2009 10.69 529
339 Long Island University 3.750 04/01/2003 11.41 283
570 Long Island University 3.625 06/01/2014 10.49 362
113 Long Island University 3.750 10/01/2004 10.79 93
313 Louisiana State University 3.500 07/01/2001 8.65 289
976 Louisiana State University 3.625 07/01/2004 9.04 831
393 Louisiana State University 3.000 07/01/2005 8.84 326
350 Louisiana State University 3.000 07/01/2006 8.87 285
See accompanying accountants' compilation report and notes to financial
statements.
26
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
----------------------------------------------
SCHEDULE OF INVESTMENTS
-----------------------
May 31, 1999
------------
(Dollar Amounts in Thousands)
(continued)
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ------------------------------------------------ ----------- ---------- -------- ------------
$256 Louisiana State University 3.000 07/01/2001 8.62 $233
112 Lycoming College 3.500 05/01/2001 11.22 101
242 Lycoming College 3.625 05/01/2014 10.64 154
325 Lycoming College 3.750 05/01/2015 10.62 204
503 Lynchburg College 3.750 05/01/2015 10.64 320
650 Lynchburg College 3.000 05/01/2018 10.68 361
-------------- M --------------
380 MacAlester College 3.375 05/01/2002 11.41 326
453 MacAlester College 3.000 05/01/2020 10.46 247
10 Madison General Hospital 3.000 12/01/1999 9.67 9
560 Marian College 3.000 10/01/2016 10.45 329
20 Marian College 3.000 11/01/1999 10.89 19
9 Marist College 3.500 04/01/2000 11.73 8
94 Marquette University 3.000 07/31/2024 10.59 46
2 Mary Baldwin College 2.875 11/01/1999 10.94 2
418 Mary Baldwin College 3.375 05/01/2012 10.68 276
630 Marymount University 3.000 05/01/2016 10.52 368
770 McLennan Community College 3.000 04/01/2006 10.49 589
68 McNeese State University 3.500 10/01/2001 10.18 61
1,009 Memorial Hospital for Cancer and Allied Diseases 3.375 04/01/2012 10.68 665
58 Menlo College 3.125 04/01/2001 11.53 51
487 Mercer University 3.000 05/01/2014 10.58 301
1,520 Mercy College of Detroit 3.625 10/01/2013 10.59 991
39 Merrimack College 3.000 04/15/2019 10.53 28
123 Merrimack College 3.000 04/15/2008 10.79 68
68 Middlebury College 3.375 10/01/2002 11.12 59
91 Midland Lutheran College 3.000 04/01/2005 11.20 70
596 Millsaps College 3.000 11/01/2021 10.34 319
26 Mississippi State University 2.875 01/01/2000 10.99 24
1,575 Mississippi State University 3.000 12/01/2020 9.64 878
80 Mississippi Valley State University 3.500 07/01/2001 10.28 72
95 Molloy College 3.375 10/01/2002 10.81 82
233 Moravian College 3.375 11/01/2012 10.52 154
760 Morehouse College 3.000 07/01/2010 10.50 477
2,286 Morgan State University 3.000 11/01/2014 10.56 1,397
196 Morris Brown College 3.750 05/01/2007 11.12 146
1,868 Morris Brown College 2.750-3.750 05/01/2018 10.89 1,136
629 Morris College 3.000 11/01/2009 10.53 440
67 Muhlenberg College 3.000 11/01/2000 10.50 62
-------------- N --------------
157 New England College 3.000 04/01/2016 10.77 90
660 Newark Beth Israel Hospital 3.625 01/01/2014 11.06 407
See accompanying accountants' compilation report and notes to financial
statements.
27
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
----------------------------------------------
SCHEDULE OF INVESTMENTS
-----------------------
May 31, 1999
------------
(Dollar Amounts in Thousands)
(continued)
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ------------------------------------------------ ----------- ---------- -------- ------------
$70 NIACC Dormitories, Inc. 3.000 10/01/2012 10.27 $46
37 Nicholls State University 3.000 09/01/1999 8.88 36
2,882 Norfolk State University 3.000 12/01/2021 9.77 1,571
632 North Carolina Agricultural and
Technical State University 3.000 05/01/2014 10.34 391
575 North Carolina State University 3.625 09/01/2004 7.97 506
222 North Carolina State University 3.125 09/01/2001 7.58 207
267 North Carolina State University 3.500 09/01/2001 7.63 250
141 North Greenville College 3.000 11/01/2003 10.72 120
126 Northeast Louisiana University 3.500 04/01/2001 10.28 114
288 Northeast Missouri State University 3.375-3.500 05/01/2002 10.75 251
3,088 Northeastern University 3.000 05/01/2018 10.53 1,743
123 Northeastern University 3.000 05/01/2004 10.97 100
50 Northwestern State University 3.125 10/01/2000 10.15 47
385 Nova University 3.000 12/01/2007 10.04 280
-------------- O -------------
284 Occidental College 3.000 10/01/2019 10.41 156
225 Olympic Community College 3.000 10/01/2008 10.07 164
28 Ouachita Baptist University 3.125 12/01/1999 10.03 26
31 Ouachita Baptist University 3.000 12/01/2006 10.04 23
-------------- P -------------
7 Pacific University 3.000 11/01/1999 10.89 7
961 Paine College 3.000 10/01/2016 10.45 564
6 Pan American University 3.000 10/01/1999 9.23 6
2,443 Philadelphia College of Art 3.000 01/01/2022 10.62 1,253
600 Pine Manor College 3.625 10/01/2003 10.80 506
174 Polytechnic University 3.375 10/01/2011 10.59 117
200 Post College 3.000 04/01/2010 10.76 135
1,130 Purdue University 3.625 07/01/2004 9.33 951
328 Purdue University 3.000 07/01/2005 9.26 269
-------------- Q -------------
36 Queens College 3.500 11/01/2001 10.88 34
154 Queens College 3.625 07/01/2004 10.90 125
-------------- R -------------
305 Randolph-Macon College 3.000 05/01/2010 10.72 209
193 Randolph-Macon College 3.000 11/01/2000 10.50 179
540 Regis College (Denver) 3.000 11/01/2012 10.47 348
118 Regis College (Weston) 3.375 10/01/2002 10.85 105
230 Rhode Island College 3.000 10/01/2005 10.09 183
60 Rider College 3.500 05/01/2001 11.57 54
183 Rider College 3.375 05/01/2002 11.44 158
67 Rider College 3.125 11/01/2000 10.86 63
See accompanying accountants' compilation report and notes to financial
statements.
28
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
----------------------------------------------
SCHEDULE OF INVESTMENTS
-----------------------
May 31, 1999
------------
(Dollar Amounts in Thousands)
(continued)
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ------------------------------------------------ ----------- ---------- -------- ------------
$1,850 Rider College 3.625 11/01/2013 10.42 $1,208
442 Rider College 3.000 05/01/2017 10.70 250
102 Rio Grande College 3.000 03/30/2009 10.93 72
87 Roger Williams College 3.000 11/01/1999 10.89 84
100 Rutgers, The State University 2.750 05/01/1999 8.84 100
675 Rutgers, The State University 3.750 05/01/2016 9.19 456
190 Rutgers, The State University 3.125 05/01/2001 8.89 176
-------------- S -------------
111 Saint Ambrose University 3.000 11/01/2001 10.78 99
105 Saint Anselm College 3.375 10/01/2001 10.88 95
7 Saint Edward's University 3.125 04/01/2000 11.69 6
95 Saint John's University 3.000 10/01/2002 10.76 82
135 Saint Joseph Hospital 3.500 10/01/2001 10.87 121
176 Saint Louis College of Pharmacy 3.375 10/01/2004 10.74 143
56 Saint Louis University 3.125 10/01/2000 10.90 52
394 Saint Louis University 3.500 11/01/2002 10.80 345
99 Saint Mary's College 3.000 03/01/2005 11.25 76
424 Saint Mary's College 3.000 06/01/2020 10.14 230
1,974 Saint Michael's College 3.000 05/01/2013 10.60 1,250
181 Saint Norbert College 3.375 04/01/2002 11.52 159
194 Saint Norbert College 3.625 04/01/2004 11.33 156
367 Saint Norbert College 3.000 04/01/2007 11.10 266
499 Saint Paul's College 3.000 11/01/2014 10.56 305
635 Saint Vincent College 3.500 05/01/2013 10.86 404
265 Sam Houston State University 3.500 10/01/2001 9.10 239
915 San Diego State University 3.000 11/01/2007 10.04 710
1,245 Sangamon State University 3.000 11/01/2018 10.12 731
300 Seattle University 3.500 11/01/2001 10.84 272
526 Seattle University 3.000 11/01/2008 10.55 378
220 Seton Hall University 3.000 11/01/2000 10.83 204
344 Seton Hill College 3.625 11/01/2014 10.53 220
17 Sierra College 3.375 04/01/2002 10.87 15
328 Simpson College 3.000 07/01/2016 10.58 190
396 South Dakota School of Mines and Technology 3.000 04/01/2018 10.30 224
207 South Dakota School of Mines and Technology 3.625 04/01/2002 10.85 182
31 South Plains College 3.500 10/01/2002 10.18 27
84 South Plains College 3.625 10/01/2004 10.17 70
59 South Plains College 3.000 10/01/2005 10.10 48
330 Southeast Missouri State University 3.500 04/01/2002 10.82 286
1,111 Southeast Missouri State University 3.000 04/01/2007 10.58 831
730 Southeastern Oklahoma State University 3.000 04/01/2009 10.51 511
See accompanying accountants' compilation report and notes to financial
statements.
29
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
----------------------------------------------
SCHEDULE OF INVESTMENTS
-----------------------
May 31, 1999
------------
(Dollar Amounts in Thousands)
(continued)
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ------------------------------------------------ ----------- ---------- -------- ------------
$140 Southern Arkansas University 3.500 10/01/2002 10.23 $123
560 Southern Methodist University 3.000 10/01/2007 10.61 413
224 Southern Nazarene University 3.750 04/01/2005 11.27 176
625 Southwest Missouri State College 3.375 10/01/2002 10.17 556
2,415 Southwest Texas State University 3.000 10/01/2015 9.51 1,533
14 Southwestern Christian College 3.000 11/01/2000 10.83 13
25 Spalding University 3.125 09/01/2000 10.95 24
371 Spalding University 3.000 09/01/2007 10.66 278
14 Springfield College 3.500 11/01/1999 10.60 13
14 Springfield College 3.125 05/01/2000 11.29 13
473 Springfield College 3.500 05/01/2013 10.67 311
81 Springfield College 3.000 05/15/2005 10.11 64
185 State Center Community College 3.000 10/01/2004 10.10 152
26 Stephen F. Austin State University 2.875 10/01/1999 9.23 25
2,022 Stephen F. Austin State University 3.375-3.500 10/01/2012 9.57 1,408
183 Stetson University 3.000 01/01/2006 11.25 135
130 Stillman College 3.750 02/01/2004 11.42 104
353 Stonehill College 3.000 10/01/2006 10.64 269
175 SUNY, Mohawk Valley Community College 3.000 04/01/2005 10.26 123
35 Susquehanna University 3.125 05/01/2000 11.27 32
681 Syracuse University 3.000 05/01/2008 10.74 493
-------------- T -------------
44 Talladega College 3.375 12/01/2001 10.08 38
424 Talladega College 3.000 12/01/2012 10.24 271
283 Taylor University 3.000 10/01/2012 10.50 182
861 Taylor University 3.000 10/01/2013 10.49 543
701 Texas A & I University 3.000 07/01/2009 9.57 507
91 Texas Southern University 3.500 04/01/2001 10.89 82
500 Texas Southern University 3.500 04/01/2013 10.45 325
482 Transylvania University 3.000 11/01/2010 10.51 328
810 Trinity University 3.625 09/01/2004 10.82 660
297 Tufts University 3.375 10/01/2001 10.87 268
2,373 Tufts University 3.000 10/01/2021 10.39 1,258
575 Tulane University of Louisiana 3.500 10/01/2001 9.06 528
-------------- U -------------
44 Union College 3.000 11/01/2002 10.74 38
1,945 University of Alabama in Birmingham 3.000 11/01/2008 7.97 1,553
39 University of Alaska 3.500 04/01/2000 10.94 36
133 University of Alaska 3.375 04/01/2002 10.82 115
336 University of Alaska 3.500 04/01/2003 10.80 291
100 University of Alaska 3.000 10/01/1999 10.22 96
83 University of Arkansas at Little Rock 3.500 04/01/2001 10.04 75
See accompanying accountants' compilation report and notes to financial
statements.
30
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
----------------------------------------------
SCHEDULE OF INVESTMENTS
-----------------------
May 31, 1999
------------
(Dollar Amounts in Thousands)
(continued)
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ------------------------------------------------ ----------- ---------- -------- ------------
$185 University of Arkansas at Little Rock 3.000 11/01/2009 9.42 $138
443 University of Central Arkansas 3.000 04/01/2005 10.69 346
535 University of Central Florida 3.000 10/01/2007 10.08 402
220 University of Chicago 3.500 12/01/2001 10.10 191
71 University of Chicago 3.375 12/01/2001 10.08 62
29 University of Chicago 3.500 12/01/2002 10.11 24
100 University of Delaware 3.125 11/01/2000 8.84 94
123 University of Delaware 3.375 11/01/2000 8.81 118
1,240 University of Delaware 3.000 11/01/2006 9.08 993
699 University of Delaware 3.000 12/01/2018 8.81 435
2,340 University of Florida 3.000 07/01/2014 10.15 1,457
131 University of Hartford 3.000 11/01/2001 10.78 117
27 University of Hawaii at Manoa 2.875 10/01/1999 10.13 26
59 University of Hawaii at Manoa 3.500 10/01/2001 10.18 53
36 University of Lowell 3.000 11/01/2000 7.62 34
2,400 University of Michigan 3.750 10/01/2005 9.51 1,988
568 University of Missouri 3.375 05/01/2002 10.03 514
77 University of Missouri 2.875 11/01/2000 9.25 72
70 University of Montevallo 3.125 11/01/2000 9.27 66
91 University of Nevada at Reno 3.000 11/01/1999 10.12 88
777 University of North Carolina 3.000 11/01/2005 8.81 650
580 University of North Carolina 3.000 01/01/2008 9.50 430
49 University of North Carolina 3.000 01/01/2007 9.50 38
1,026 University of Notre Dame 3.000 02/15/2019 10.62 564
795 University of Portland 3.375 04/01/2013 10.88 510
20 University of Puerto Rico, Rio Piedras Campus 3.125 06/01/2000 9.17 19
1,829 University of Puerto Rico, Rio Piedras Campus 3.000 06/01/2011 9.39 1,269
35 University of Rhode Island 3.000 10/01/2001 9.68 32
670 University of Saint Thomas 3.000 10/01/2019 10.41 369
320 University of Santa Clara 3.125 04/01/2002 11.44 273
145 University of Santa Clara 3.375 04/01/2002 11.45 124
850 University of Santa Clara 3.625 04/01/2004 11.33 686
33 University of Scranton 3.125 11/01/2000 10.84 31
157 University of South Dakota 3.500 10/01/2001 9.59 143
905 University of South Florida 3.750 07/01/2005 10.30 727
332 University of Steubenville 3.125 04/01/2010 10.98 222
1,316 University of Vermont 3.000 07/01/2016 8.95 848
165 University of Vermont 3.375 07/01/2001 8.33 153
1,220 University of Vermont 3.000 07/01/2019 9.06 737
90 University of Washington 3.000 08/01/1999 8.82 87
260 University of Washington 3.500 08/01/2002 9.07 231
313 University of Washington 3.000 08/01/2003 9.06 269
See accompanying accountants' compilation report and notes to financial
statements.
31
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
----------------------------------------------
SCHEDULE OF INVESTMENTS
-----------------------
May 31, 1999
------------
(Dollar Amounts in Thousands)
(continued)
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ------------------------------------------------ ----------- ---------- -------- ------------
$1,570 University Student Co-Operative Association 3.000 04/01/2019 10.70 $847
96 Ursinus College 3.000 10/01/2000 10.86 89
528 Utica College 3.000 11/01/2009 10.53 369
-------------- V -------------
490 Vermont State College 3.000 06/01/2008 9.02 372
266 Vermont State College 3.000 07/01/2014 9.30 174
1,170 Villanova University 3.000 04/01/2019 10.70 631
3,880 Vincennes University 3.000 06/01/2023 9.02 2,187
2,677 Virginia Commonwealth University 3.000 06/01/2011 10.01 1,798
1,050 Virginia Commonwealth University 3.000 06/01/2004 10.08 853
350 Virginia Wesleyan College 3.000 11/01/2009 10.54 249
204 Virginia Wesleyan College 3.000 11/01/2010 10.51 139
-------------- W -------------
20 Waldorf College 3.125 07/01/2000 10.97 18
241 Waldorf College 3.000 07/01/2005 10.77 187
43 Wartburg College 3.500 10/01/2001 10.87 39
157 Wartburg College 3.750 04/01/2011 11.00 106
650 Washington State University 3.625 04/01/2004 10.02 542
420 Washington State University 3.750 04/01/2004 10.03 352
680 Washington State University 3.375 04/01/2003 10.02 580
267 Washington University 3.500 10/01/2001 10.91 246
224 Wesley College 3.375 05/01/2013 10.88 144
61 West Kern Junior College District 3.625 04/01/2004 10.73 50
470 West Valley College 3.000 04/01/2009 10.50 329
43 West Virginia Wesleyan College 2.875 05/01/2000 11.56 39
457 West Virginia Wesleyan College 3.000 05/01/2015 10.75 271
334 Western Carolina University 3.625 05/01/2003 10.75 286
200 Western Washington University 3.500 10/01/2001 10.18 181
615 Western Washington University 3.625 10/01/2004 10.18 512
445 Western Washington University 3.750 10/01/2005 10.19 361
40 Westmoreland Hospital Association 3.500 07/01/2001 10.98 35
830 Wheaton College 3.500 04/01/2013 10.70 532
180 Wheeling College 3.500 05/01/2001 11.23 161
85 Wheeling College 3.000 11/01/2007 10.59 63
27 Wheelock College 3.000 05/01/2011 10.23 18
33 Wichita State University 3.000 10/01/2000 9.29 31
775 Wittenberg University 3.000 05/01/2015 10.76 457
245 Wittenberg University 3.000 11/01/2017 10.39 141
48 Wooster Business College 3.000 03/30/2009 10.88 34
79 Worcester Polytechnic Institute 3.375 04/01/2001 11.57 70
639 Wright State University 3.000 05/01/2009 9.89 466
See accompanying accountants' compilation report and notes to financial
statements.
32
<PAGE>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
----------------------------------------------
SCHEDULE OF INVESTMENTS
-----------------------
May 31, 1999
------------
(Dollar Amounts in Thousands)
(continued)
Outstanding Stated Internal Amortized
Principal Interest Maturity Rate of Cost (Notes
Balance Description Rate % Date Return % 1 and 2)
----------- ------------------------------------------------ ----------- ---------- -------- ------------
-------------- Y -------------
$361 York Hospital 3.000 05/01/2020 10.64 $193
-----------
- -----------------
210,210 Total College and University Loans 144,420
- -----------------
Allowance for Loan Losses 1,132
-----------
Net College and University Loans 143,288
-----------
INVESTMENT AGREEMENTS (12.2%)
Morgan Guaranty Trust Company -
4,063 Liquidity Fund 7.750 06/01/2018 7.750 4,063
Morgan Guaranty Trust Company -
15,881 Revenue Fund 7.050 06/01/2018 7.050 15,881
-----------
- -----------------
19,944 Total Investment Agreements 19,944
- ----------------- -----------
================= ===========
$230,154 Total Investments (100.0%) $163,232
================= ===========
See accompanying accountants' compilation report and notes to financial
statements.
33
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains financial information extracted from the May 31, 1999
College and University Facility Loan Trust Two financial statements and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-END> MAY-31-1999
<INVESTMENTS-AT-COST> 163232
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 1500
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 724
<TOTAL-ASSETS> 165456
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 140718
<OTHER-ITEMS-LIABILITIES> 6591
<TOTAL-LIABILITIES> 147309
<SENIOR-EQUITY> 393
<PAID-IN-CAPITAL-COMMON> 17754
<SHARES-COMMON-STOCK> 1763800
<SHARES-COMMON-PRIOR> 1763800
<ACCUMULATED-NII-CURRENT> 911
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
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<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8174
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<EXPENSES-NET> 6917
<NET-INVESTMENT-INCOME> 1257
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<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1257
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 176
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (1112)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 15079
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 6701
<GROSS-EXPENSE> 6917
<AVERAGE-NET-ASSETS> 18703
<PER-SHARE-NAV-BEGIN> 9.45
<PER-SHARE-NII> .72
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.10)
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<PER-SHARE-NAV-END> 10.07
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[AVG-DEBT-OUTSTANDING] 146325
[AVG-DEBT-PER-SHARE] 82.96
</TABLE>
