<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-K
Annual report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the Fiscal year ended December 31, 1998
GOVERNMENT TRUST M-1
(Exact name of Registrant as specified
in its governing instrument)
State or other jurisdiction of incorporation:
New York
Commission File Number:
33-31279
IRS Employer Identification No.:
13-6938177
c/o The Chase Manhattan Bank
Corporate Trustee Administration
450 West 33rd Street
New York, New York 10001
(212) 946-8608
_________________________
(Address, including zip code, and telephone number of principal
executive offices )
Securities Registered Pursuant to Section 12(g) of the Act :
Zero Coupon Certificates, Class M-1
( Title of Class )
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports ) , and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
<PAGE>
DOCUMENTS INCLUDED AS EXHIBITS
Semiannual Report as of May 15, 1998 Exhibit B
Semiannual Report as of November 16, 1998 Exhibit C
Annual Report as of December 31, 1998 Exhibit D
<PAGE>
Part I
Item 1. Business
Not Applicable .
Item 2. Properties .
See list of assets set forth in Exhibit A.
Item 3. Legal Proceedings.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters .
(a) Market Information .
Certificates are not traded on any market or exchange.
(b) Holders .
The number of registered holders for Zero Coupon
Certificates, Class M-1 on December 31, 1998 was 8.
(c) Dividends .
$2,489,000.00 distributed to holders for Zero Coupon
Certificates, Class M-1 on May 15, 1998.
$2,396,000.00 distributed to holders for Zero Coupon
Certificates, Class M-1 on November 16, 1998.
Item 6. Selected Financial Data
Not Applicable.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations .
Not Applicable.
Item 8. Financial Statements and Supplementary Data.
Not Applicable .
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
Not Applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Not Applicable.
Item 11. Executive Compensation.
Not Applicable.
Item 12 . Security Ownership of Certain Beneficial Owners and
Management
(a) Security ownership of certain beneficial owners.
_____________________________________________________________________________
(1) Title of (2) Name and (3) Amount and (4) Percent
Class address nature of of class
of benefi- Beneficial
cial owner ownership
______________________________________________________________________________
Zero Coupon Cede & Co. $ 4,476,000 99.18%
Certificates, P.O. Box 20
Class M-1 Bowling Green Station
New York, NY 10004
_______________________________________________________________________________
(b) Security ownership of management
Not Applicable.
(c) Changes in control.
Not Applicable.
<PAGE>
Item 13. Certain Relationships and Related Transactions.
(a) Transactions with management and others.
Not Applicable.
(b) Certain business relationships.
Not Applicable .
(c) Indebtedness of management .
Not Applicable .
(d) Transactions with promoters.
Not Applicable .
PART IV
Item 14. Exhibits, Financial Schedules, Reports on Form 8-K.
(a) The following is a list of documents filed as part
of this report :
Exhibit Document
A List of Assets held
by Trust on
December 31, 1998
B Semiannual Report
as of May 15, 1998
C Semiannual Report as
of November 16, 1998
D Annual Report as of
December 31, 1998
(b) Not applicable
(c) Not applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Government Trust M-1
(Registrant)
By : ______Dennis Kildea________
Assistant Vice President
Date : March 31, 1999
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By : ______ Andrew Taylor__________________
Vice President
Date : March 31, 1999
By : ______Dennis Kildea________
Assistant Vice President
Date : March 31, 1999
<PAGE>
Exhibit A
GOVERNMENT TRUST M-1
U. S. Government Securities
Maturity Par Amount Coupon
May 15, 1999 230,000 0.0000
November 15, 1999 221,000 0.0000
The Kingdom of Morocco M-1 Notes
Principal Amount Rate of
Outstanding Interest Due Date
$ 4,234,218.49 8.79730% November 15, 1999
<PAGE>
Exhibit B
THE CHASE MANHATTAN BANK
450 West 33rd Street
New York , New York 10001
Trustee's Semiannual Report
To the Holders of
Government Trust M-1 Zero Coupon Certificates
( Moroccan FMS Refinancing )
and
Defense Security Assistance Agency
The Pentagon
Washington , DC 20301-2800
Attention of the Comptroller, DSAA
i. On May 15, 1998, the Certificate Payment Date, the aggregate amount
distributed to the Holders was $2,489,000.00. The portion thereof allocable
to the principal and interest payments on the Related Note was $2,240,000.00
and to payments from the Securities Trust was $249,000.00.
ii. The aggregate Initial Amount of the Certificates issued by such Trust and
remaining outstanding after such distribution is $6,909,000.00.
iii. The unpaid principal amount of the Related Note(s) following such
distribution is $ 6,351,327.75.
iv. The sum of the amount referred to in (i) above, plus the amount paid to
the Trustee in respect of the Trustee's fees and expenses was not less than
the sum of ninety percent (90%) of the amount required to have been paid by
the Borrower on the Related Note(s) on the immediately preceding Note Payment
Date plus the payment received by the Trustee from the related Securities
Trust on the Certificate Payment Date.
No Payment Default has occurred and is continuing since our previous report.
To the best of my knowledge and belief, this Semiannual Report is complete
and accurate.
By: __________________
Dennis Kildea
Assistant Vice President
Report dated as of May 15, 1998
(Tax ID No. 13-6938177)
<PAGE>
Exhibit C
THE CHASE MANHATTAN BANK
450 West 33rd Street
New York , New York 10001
Trustee's Semiannual Report
To the Holders of:
Government Trust M-1 Zero Coupon Certificates
( Moroccan FMS Refinancing )
and
Defense Security Assistance Agency
The Pentagon
Washington , DC 20301-2800
Attention of the Comptroller, DSAA
i. On November 16, 1998, the Certificate Payment Date, the aggregate amount
distributed to the Holders was $2,396,000.00. The portions thereof allocable
to the principal and interest payments on the Related Note was $2,156,000.00
and to payments from the Securities Trust was $240,000.00.
ii. The aggregate Initial Amount of the Certificates issued by such Trust
and remaining outstanding after such distribution is $4,513,000.00.
iii. The unpaid principal amount of the Related Note following such
distribution is $4,234,218.49.
iv. The sum of the amount referred to in (i) above, plus the amount paid to
the Trustee in respect of the Trustee's fees and expenses was not less than
the sum of ninety percent (90%) of the amount required to have been paid by
the Borrower on the Related Note(s) on the immediately preceding Note Payment
Date plus the payment received by the Trustee from the related Securities
Trust in respect of such Certificate Payment Date.
No Payment Default has occurred and is continuing since our previous report.
To the best of my knowledge and belief, this Semiannual Report is complete
and accurate.
All capitalized terms used herein have the meanings assigned to them in the
Declaration of Trust dated as of October 15, 1989.
By: __________________
Dennis Kildea
Assistant Vice President
Report dated as of November 16, 1998
(Tax ID No. 13-6938177)
<PAGE>
Exhibit D
THE CHASE MANHATTAN BANK
450 West 33rd Street
New York, New York 10001
Trustee's Annual Report
To the holders of:
- - Government Trust M-1 Zero Coupon Certificates, Class M-1
(Kingdom of Morocco FMS Refinancing)
- - Defense Security Assistance Agency
The Pentagon
Washington, D.C. 20301-2800
Attention of the Comptroller , DSAA
i. During the year ending December 31, 1998, $4,885,000.00
was distributed to the holders of the Zero Coupon Certificates
and this amount is allocable as follows:
a. 90% from interest and principal payments made on the Kingdom of Morocco
Promissory Note on May 1, 1998 and November 2, 1998.
b. 10% from the proceeds of maturities of United States Treasury Strips
due May 15, 1998 and November 16, 1998.
ii. The aggregate Initial Amount of the Certificates issued by such Trust
and remaining outstanding after such distributions is $4,513,000.00.
iii. The unpaid principal amount of the Kingdom of Morocco Promissory
Note following the May 15, 1998 and November 16, 1998 distributions
is $4,234,218.49.
iv. The sum of the amount referred to in (i), above, plus the amount paid
to the Trustee in respect of the Trustee's fees and expenses was not less
than the sum of ninety percent (90%) of the amount required to have been
paid by the Borrower on the Related Note(s) on the immediately preceding
Note Payment Dates plus the payment received by the Trustee from the Related
Securities Trust in respect of such Certificate Payment Dates.
Please be advised that no Payment Default has occurred and is continuing with
respect to the May 15, 1998 and November 16, 1998 Certificate Payment Dates.
There have been no payments under the Guaranty with respect to the May 1,
1998 and November 2, 1998 Note Payment Dates next preceding the May 15,
1998 and November 16, 1998 Certificate Payment Dates.
To the best of my knowledge and belief, this Annual Report is complete
and accurate. All capitalized terms used herein have the meanings assigned
to them in the Declaration of Trust dated as of October 15, 1989.
By ___________________________
Dennis Kildea
Assistant Vice President
Report dated as of December 31, 1998
Tax I.D. No. 13-6938177
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Chase Manhattan Bank, Trustee
Government Trust M-1
We have audited the accompanying Distribution Report of Government Trust M-1
as of December 31, 1998 and for the year then ended. This schedule is the
responsibility of the Trustee. Our responsibility is to express an opinion
on this schedule based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Distribution Report is free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Distribution Report.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
schedule presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the Distribution Report referred to above presents fairly,
in all material respects, amounts distributed to certificate holders, the
aggregate initial amount of certificates outstanding, the unpaid principal
amount of the promissory note and funds compared with amounts distributed
from Government Trust M-1 at December 31, 1998 and for the year then ended,
in conformity with generally accepted accounting principles.
Ernst & Young LLP
March 3, 1999
<PAGE>
DISTRIBUTION REPORT
GOVERNMENT TRUST M-1
As of and for the Year Ended December 31, 1998
I. During the year ended December 31, 1998, $4,885,000 was distributed
to the Holders of the Zero Coupon Certificates and this amount is
allocable as follows:
1. 90% from principal and interest payments made on Kingdom of
Morocco Promissory Notes on May 1, 1998 and November 2, 1998.
2. 10% from the proceeds of maturities of United States Treasury
Strips due May 15, 1998 and November 15, 1998.
II. The aggregate Initial Amount of Certificates issued by the Trust
outstanding after the May 15, 1998 and November 16, 1998
distributions is $4,513,000.00.
III. The unpaid principal amount of the Kingdom of Morocco Promissory
Notes following the May 15, 1998 and November 16, 1998 distributions
is $4,234,218.49.
IV. The amount in (I) above, together with the Trustee's fees and expenses
equals the sum of 90% of the amounts paid by Morocco on the Notes on
May 1, 1998 and November 2, 1998 and the payments received by the
Trustee from the Securities Trust on May 15, 1998 and November 16,
1998.
See notes to distribution report.
<PAGE>
NOTES TO DISTRIBUTION REPORT
GOVERNMENT TRUST M-1
December 31, 1998
NOTE A--ORGANIZATION AND OPERATION
Government Trust M-1 (the Trust) was formed in November 1989 by The Chase
Manhattan Bank (Successor to Chemical Bank), as Trustee, to issue Certificates
(see Note B), the proceeds of which were used to loan funds evidenced by the
Notes (see Note C) from the Kingdom of Morocco (Borrower) and to purchase
a beneficial interest in a government securities trust (Securities Trust),
for which The Chase Manhattan Bank also acts as Trustee. The Trust was
created for the limited purpose of conducting transactions relating to the
Certificates, the Note and the Securities Trust. All capitalized terms used
in the Distribution Report are as defined in the Declaration of Trust dated
as of October 15, 1989.
NOTE B--ZERO COUPON CERTIFICATES
The Trust issued Zero Coupon Certificates (the Certificates) with an aggregate
principal amount of $208,003,000. Each Certificate represents an interest
in specific payments of principal and/or interest on the assets of the Trust.
The Holder of each of the Certificates is entitled to receive a single payment
on the date indicated in such Certificate. The Trust is required to
distribute to the Certificate holders all funds held by the Trust, which
would consist of an amount equal to 90% of the principal and interest
required to be paid by the Borrower on the Related Note (see Note C), any
payments received with respect to the Guaranty (see Note C), and payments
from the related Securities Trust, less amounts paid to the Trustee for
periodic fees and expenses. The government securities held for the benefit
of the Trust consist of U.S. Treasury Strips and are calculated to provide
the Trust on or before each Certificate Payment Date with funds equal to at
least 10% of the principal and/or interest payment due on the related Note
on the next preceding Note Payment Date. The payments to the Holders of
the Certificates in the next year are as follows:
Maturity Date Aggregate Maturity
of Series Amount of Series
May 15, 1999 2,303,000
November 15, 1999 2,210,000
__________
Total $4,513,000
<PAGE>
NOTES TO DISTRIBUTION REPORT--Continued
GOVERNMENT TRUST M-1
NOTE C--PROMISSORY NOTES
One note, in the original principal amount of $116,365,281.46, with an
interest rate of 8.79730% was paid in full as of November 15, 1995.
On the second note, in the original principal amount of $42,342,185.17, with
an interest rate of 8.79730%, is payable by the Borrower semi-annually on
each Note Payment Date, which is the tenth business day before a Certificate
Payment Date (see Note B). Principal on this note is payable in installments
in the next year as follows:
Payment Date Amount
May 1999 2,117,109
November 1999 2,117,109
__________
Total $4,234,218
The Borrower is required to remit to the Trust 100% of the amounts of
principal and interest due on the Note. However, to the extent that these
payments from the Borrower and payments from the related Securities Trust,
less the amounts paid to the Trustee for periodic fees and expenses, exceed
the required Certificate Payment, the excess funds will be returned to the
Borrower semi-annually. Should a draw be made on the Guaranty, any
excess funds would be remitted to the Defense Security Assistance Agency
of the Department of Defense.
The United States of America, acting through the Defense Security Assistance
Agency of the Department of Defense, has guaranteed the punctual payment
of 90% of all principal and interest due on the Notes.
