PROSPECTUS SUPPLEMENT
(To Prospectus dated December 6, 1996)
$80,000,000
PRINCIPAL AMOUNT PLUS INTEREST
LIQUIDITY FACILITY
OF
FGIC SECURITIES PURCHASE, INC.
IN SUPPORT OF
DADE COUNTY EXPRESSWAY AUTHORITY (FLORIDA)
TOLL SYSTEM REVENUE BONDS, SERIES 1996 (TAXABLE)
Date of Series 1996 Bonds: Date of Issuance Due: July 1, 2019
The Series 1996 Bonds will initially bear interest at an initial Weekly
Interest Rate from and including the date of issuance to but excluding the
next succeeding Thursday (the "First Interest Period"); thereafter, until
adjustment to a different type of rate period as the Authority shall
determine, all Series 1996 Bonds shall continue to bear interest at a Weekly
Rate. The Series 1996 Bonds are subject to mandatory and optional tender and
to redemption prior to maturity, as described herein. Payment of the
purchase price equal to the principal of and up to 35 days' accrued interest
at a maximum rate of 15% per annum on the Series 1996 Bonds tendered for
purchase as described herein will be made pursuant and subject to the terms
of the FGIC-SPI Liquidity Facility described herein; provided, that the
number of days accrued interest will be increased as necessary in the event
that the Bonds are remarketed in the Quarterly Rate Mode or longer, subject
to confirmation of the applicable rating by Moody's Investors Services, Inc.
In the event that such confirmation is not obtained, the FGIC-SPI Liquidity
Facility will not be available to Bonds remarketed in excess of the Monthly
Mode.
FGIC SECURITIES PURCHASE, INC.
The FGIC-SPI Liquidity Facility will expire on December 10, 2001 unless
extended by FGIC Securities Purchase, Inc. for an additional five years upon
notice to the Authority two years prior to the scheduled expiration date, or
sooner terminated in accordance with the terms thereof.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------
The obligations of FGIC Securities Purchase, Inc. under the FGIC-SPI
Liquidity Facility (the "Obligations") are not being sold separately from the
Series 1996 Bonds, which are being offered pursuant to a separate Official
Statement. The Obligations are not severable from the Series 1996 Bonds and
may not be separately traded. This Prospectus Supplement and the
accompanying Prospectus, appropriately supplemented, may also be delivered
in connection with any remarketing of Bonds purchased by FGIC Securities
Purchase, Inc.
----------------------------------------
PAINEWEBBER INCORPORATED
DOUGLAS JAMES SECURITIES, INC. RAYMOND JAMES & ASSOCIATES,INC.
FIRST SOUTHWEST COMPANY
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
WILLIAM R. HOUGH & CO.
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The date of this Prospectus Supplement is December 6, 1996.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
DOCUMENTS INCORPORATED BY REFERENCE
There is hereby incorporated herein by reference the Annual Report on
Form 10-K for the year ended December 31, 1995 and the Quarterly Reports on
Form 10-Q for the fiscal quarters ended March 30, 1996, June 29, 1996 and
September 28, 1996 and the current report on Form 8-K dated June 28, 1996 of
General Electric Capital Corporation ("GE Capital"), all heretofore filed
with the Securities and Exchange Commission (the "Commission") pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act"), to which
reference is hereby made.
INTRODUCTION
This Prospectus Supplement is provided to furnish information on the
obligations of FGIC Securities Purchase, Inc. ("FGIC-SPI") under the
liquidity facility in support of $80,000,000 aggregate principal amount of
Dade County Expressway Authority (Florida) Toll System Revenue Bonds, Series
1996 (Taxable) to be issued by the Dade County Expressway Authority (the
"Authority"), on or about December 10, 1996 (the "Series 1996 Bonds" or the
"Bonds"). FGIC-SPI will enter into a Standby Bond Purchase Agreement (the
"FGIC-SPI Liquidity Facility") with The Bank of New York, New York, New York
(the "Trustee" and the "Tender Agent"), pursuant to which FGIC-SPI will be
obligated under certain circumstances to purchase unremarketed Bonds from the
Holders thereof optionally or mandatorily tendering their Bonds for purchase.
In order to obtain funds to purchase the Bonds, FGIC-SPI will enter into a
Standby Loan Agreement with General Electric Capital Corporation ("GE
Capital") under which GE Capital will be irrevocably obligated to lend funds
as needed by FGIC-SPI to purchase Bonds. The obligations of FGIC-SPI under
the FGIC-SPI Liquidity Facility will expire on December 10, 2001 unless
extended by FGIC-SPI for an additional five years upon notice to the
Authority two years prior to the scheduled expiration date, or sooner
terminated in accordance with its terms.
Capitalized terms used and not otherwise defined herein have the
meanings assigned to them in Appendix C hereof.
DESCRIPTION OF THE SERIES 1996 BONDS
GENERAL
The Series 1996 Bonds will be issued in fully registered form, will be
dated the date of issuance thereof, will have a stated maturity of July 1,
2019, and initially will be Variable Rate Bonds bearing interest at a Weekly
Rate from the date of initial delivery and authentication until
converted to bear interest in another interest rate mode as described herein.
The Series 1996 Bonds will be issuable in Authorized Denominations of (i)
$100,000 and integral multiples of $5,000 over $100,000 while they bear
interest at a Daily, Weekly or Monthly Rate and (ii) $5,000 and integral
multiples thereof while they bear interest at a Quarterly, Semiannual,
Extended or Fixed Rate.
The Interest Payment Dates for the Series 1996 Bonds will be (i) the
first Business Day of each calendar month while they bear interest at a
Daily, Weekly or Monthly Rate, (ii) the first Business Day of the third
calendar month following the Conversion Date to the Quarterly Rate and the
first Business Day of each third calendar month thereafter while they bear
interest at a Quarterly Rate, (iii) the first Business Day of the sixth month
following the Conversion Date to the Semiannual or Extended Rate and the
first Business Day of each sixth calendar month thereafter while they bear
interest at a Semiannual or Extended Rate and (iv) each January 1 and July
1 following the Conversion Date to the Fixed Rate.
Interest on Series 1996 Bonds bearing interest at the Daily Rate, Weekly
Rate, Monthly Rate and Quarterly Rate will be calculated based on the actual
days elapsed and a year of 365 or 366 days, as applicable, and interest on
the Series 1996 Bonds bearing interest at the Semiannual Rate, Extended Rate
or Fixed Rate will be calculated based on a year of 360 days consisting of
twelve 30-day months.
BOOK-ENTRY ONLY SYSTEM
The Depository Trust Company ("DTC"), New York, New York, will act as
securities depository for the Series 1996 Bonds. The Series 1996 Bonds will
be issued as fully-registered bonds registered in the name of Cede & Co.
(DTC's partnership nominee). One fully registered bond will be issued for
the Series 1996 Bonds, in the aggregate principal amount of such issue, and
will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its participants
(the "Participants") deposit with DTC. DTC also facilitates the settlement
among Participants of securities transactions, such as transfers and pledges,
in deposited securities through electronic computerized book-entry changes
in Participants' accounts, thereby eliminating the need for physical movement
of securities certificates. Direct Participants (the "Direct Participants")
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of
its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either
directly or indirectly (the "Indirect Participants").
The rules applicable to DTC and its Participants are on file with the
Securities and Exchange Commission.
Purchases of the Series 1996 Bonds under the DTC system must be made by
or through Direct Participants, which will receive a credit for the Series
1996 Bonds on DTC's records. The ownership interest of each actual purchaser
of each Series 1996 Bond (the "Beneficial Owner") is in turn to be recorded
on the Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected
to receive written confirmations providing details of the transaction, as
well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Series 1996 Bonds are to be
accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in the Series 1996 Bonds, except in
the event that use of the book-entry system for the Series 1996 Bonds is
discontinued.
To facilitate subsequent transfers, all Series 1996 Bonds deposited by
Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of Series 1996 Bonds with DTC and their
registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the
Series 1996 Bonds; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Series 1996 Bonds are credited, which may
or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their
customers.
For every transfer and exchange of the Series 1996 Bonds, the Beneficial
Owner may be charged a sum sufficient to cover any tax, fee or other
governmental charge that may be imposed in relation thereto.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. Neither DTC nor Cede &
Co. will consent or vote with respect to Series 1996 Bonds. Under its usual
procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the Series 1996
Bonds are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Principal, Purchase Price and interest payments on the Series 1996 Bonds
will be made to DTC. DTC's practice is to credit Direct Participants'
accounts on each payment date in accordance with their respective holdings
shown on DTC's records unless DTC has reason to believe that it will not
receive payment on such payment date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as
is the case with securities held for the accounts of customers in bearer form
or registered in "street name," and will be the responsibility of
such Participant and not of DTC, the Paying Agent or the Authority,
subject to any statutory or regulatory requirements as may be
in effect from time to time. Payment of principal, Purchase Price
and interest to DTC is the responsibility of the Authority or
the Paying Agent, disbursement of such payments to Direct Participants shall
be the responsibility of DTC and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities depository with
respect to the Series 1996 Bonds at any time by giving reasonable notice to
the Authority or the Paying Agent. Under such circumstances, in the event
that a successor securities depository is not obtained, the Series 1996 Bonds
are required to be prepared in definitive form and delivered to the
Beneficial Owners. The Authority may decide to discontinue use of the system
of book-entry transfers through DTC (or a successor securities depository).
In that event, the Series 1996 Bonds will also be prepared in definitive form
and delivered to the Beneficial Owners.
VARIABLE INTEREST RATES
The Tender Agent will inform the Owners of Series 1996 Bonds and the
Trustee (if not the Tender Agent) of the Daily and Weekly Rates upon request.
Notice of each preliminary Monthly, Quarterly, Semiannual and Extended Rate,
and of each Monthly, Quarterly, Semiannual and Extended Rate, will be given
by the Bond Registrar by sending notice in writing to the Owners of the
Series 1996 Bonds bearing interest at such rates and the Trustee not later
than 5:00 p.m. (Eastern time) on the third Business Day following the date
of determination.
The preliminary Variable Rate and the Variable Rate are each required to
be the lowest rate of interest which, in the judgment of PaineWebber
Incorporated, as the initial Remarketing Agent (the "Remarketing Agent"),
would cause the Series 1996 Bonds to have a market value equal to the
principal amount thereof, plus accrued interest, under prevailing market
conditions as of the date of determination of the preliminary Variable Rate
or Variable Rate. The preliminary Variable Rate is intended to serve only as
an indication of the lowest interest rate that would cause the Series 1996
Bonds to have a market value equal to par under market conditions on the date
on which such preliminary Variable Rate is determined. The Variable Rate
determined after the preliminary Variable Rate is determined may be higher,
lower or the same as such preliminary Variable Rate. In no event may the
preliminary Variable Rate or the Variable Rate for any Variable Rate Period
15%.
All determinations of Variable Rates pursuant to the Indenture are
conclusive and binding upon the Authority, the Trustee, the Bond Registrar,
the Tender Agent, any credit provider under a credit facility, if any, FGIC-
SPI or other provider of liquidity and the Owners of the Series 1996 Bonds.
The Authority, the Trustee, the Bond Registrar, the Tender Agent and the
Remarketing Agent are not liable to any Owner for failure to give any notice
required above or for failure of any Owner to receive any such notice.
The Indenture provides that the Tender Agent and the Remarketing Agent
may resign or be removed by the Authority from time to time. In such events,
a successor Tender Agent or Remarketing Agent, as applicable,
must be appointed in accordance with the provisions of the
Indenture. No resignation or removal of the Tender Agent or
Remarketing Agent shall take effect until a successor has been appointed
pursuant to the Indenture.
Daily Rates. The Daily Rate for each Daily Rate Period is required to
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be determined by the Remarketing Agent between 8:30 a.m. and 10:00 a.m.
(Eastern time) on the commencement date of each such Daily Rate
Period to which it relates. Daily Rate Periods extend from each
Business Day to but excluding the following Business Day.
Weekly Rates. The Weekly Rate for each Weekly Rate Period is required
------------
to be determined by the Remarketing Agent not later than 4:00 p.m.
(Eastern time) on each Wednesday or, if such Wednesday is not a
Business Day, the last Business Day immediately prior to the
commencement date of the Weekly Rate Period to which it relates.
The first Weekly Rate Period will commence on the date of original
issuance and delivery of the Series 1996 Bonds and shall run to but
excluding the next succeeding Thursday. Weekly Rate Periods thereafter
extend from Thursday of each week to but excluding Thursday of the following
week; except that (A) in the case of a conversion to a Weekly Rate Period
from a different Variable Rate Period, the initial Weekly Rate Period for the
Series 1996 Bonds will extend from and including the Weekly Rate Conversion
Date to but excluding Thursday of the following week; and (B) in the case of
a conversion of Series 1996 Bonds from a Weekly Rate Period to a different
Rate Period, the last Weekly Rate Period will end on and exclude the
Conversion Date.
Monthly Rates. A preliminary Monthly Rate for each Monthly Rate Period,
-------------
which will extend from the first Business Day of each calendar month
to but excluding the first Business Day of the following month,
is required to be determined by the Remarketing Agent not
later than 4:00 p.m. (Eastern time) on the last Business
Day that is at least eight days immediately preceding the
commencement date of such period, and the actual Monthly Rate for each
Monthly Rate Period is required to be determined not later than 4:00 p.m.
(Eastern time) on the Business Day immediately preceding the commencement
date of such period.
Quarterly Rates. A preliminary Quarterly Rate for each Quarterly Rate
---------------
Period is required to be determined not later than 4:00 p.m.
(Eastern time) on the last Business Day that is at least
15 days preceding the commencement date of such period,
and the actual Quarterly Rate for each Quarterly Rate Period is required to
be determined by the Remarketing Agent not later than 4:00 p.m. (Eastern
time) on the Business Day immediately preceding the commencement date of such
period. Quarterly Rate Periods extend from and including the Quarterly Rate
Conversion Date, and from and including the first Business Day of each third
calendar month thereafter, to but excluding the first Business Day of the
third calendar month thereafter.
Semiannual Rates. A preliminary Semiannual Rate for each Semiannual
----------------
Rate Period is required to be determined not later than 4:00 p.m.
(Eastern time) on the last Business Day that is at least 30
days immediately preceding the commencement date of such
period. The actual Semiannual Rate for each Semiannual Rate
Period is required to be determined by the Remarketing Agent not
later than 4:00 p.m. (Eastern time) on the Business Day immediately
preceding the commencement date of such period. Semiannual Rate Periods
extend from and including the Semiannual Rate Conversion Date, and from and
including the first Business Day of each sixth calendar month thereafter, to
but excluding the first Business Day of the sixth calendar month thereafter.
Extended Rates. A preliminary Extended Rate for each Extended Rate
--------------
Period is required to be determined not later than 4:00 p.m.
(Eastern time) on the last Business Day that is at least
30 days immediately preceding the commencement date of such
period, and the actual Extended Rate for each Extended Rate Period is
required to be determined not later than 4:00 p.m. (Eastern time) on the
Business Day immediately preceding the commencement date of such period.
Extended Rate Periods will commence initially on the Extended Rate Conversion
Date, and subsequently on the first Business Day of the calendar month
following the last day of the prior Rate Period and extend for a period of
one year or integral multiples of six months in excess of one year set by the
Remarketing Agent, and end on a day that is the last day preceding the first
Business Day of a calendar month.
Limitation on Rate Period. None of the Variable Rate Periods may extend
-------------------------
beyond the termination date of the Credit Facility or Liquidity Facility.
Provider Bonds. Notwithstanding anything to the contrary in the
--------------
Indenture, Provider Bonds shall bear interest at the Corporation
Rate or the Default Rate.
CONVERSION BETWEEN VARIABLE RATE PERIODS
At the option of the Authority, subject to certain conditions, the Series
1996 Bonds may be converted from one Variable Rate Period to another Variable
Rate Period in accordance with the provisions of the Indenture. The
Conversion Date is required to be an Interest Payment Date for the Variable
Rate Period from which the conversion is to be made; provided, however, that
in the case of a conversion from an Extended Rate Period, the Conversion Date
is required to be limited to an Interest Payment Date on which a new Extended
Rate Period for the Series 1996 Bonds would otherwise have commenced pursuant
to the Indenture. Not less than 30 days prior to the Conversion Date, the
Tender Agent is required to mail or cause the Bond Registrar to mail a
written notice of the conversion to the Authority, the Trustee, any credit
provider, FGIC-SPI or other liquidity provider and all of the Owners of the
Series 1996 Bonds.
Notwithstanding the delivery of notice of conversion pursuant to the
Indenture, conversion to a new Rate Period will not take effect if:
(1) The Remarketing Agent fails to determine a Variable Rate for the
Rate Period to which the conversion is to be made;
(2) Any notice of conversion required by the Indenture is not given
when required;
(3) There is not delivered to the Authority and the Trustee an Opinion
of Bond Counsel dated as of the Conversion Date;
(4) Such notice of conversion is rescinded by the Authority by written
notice to the Trustee and the Remarketing Agent delivered prior to the
applicable Conversion Date. If the Trustee receives notice of such
rescission prior to the time the Trustee has given notice to the Owners of
the Series 1996 Bonds, then such notice of conversion will be of no force
and effect. If the Trustee receives notice of such rescission after the
Trustee has given notice to the Owners of the Series 1996 Bonds, then the
Series 1996 Bonds will automatically adjust to the Weekly Rate Period. Any
purchases of Series 1996 Bonds scheduled or required to take place on the
proposed effective date of any Rate Period will take place on such date.
No Opinion of Bond Counsel is required in connection with any automatic
adjustment to a Weekly Rate Period pursuant to such provision in the
Indenture; or
(5) There is not delivered to the Trustee written evidence from the
Rating Agency that any such conversion to a Quarterly Rate, Semiannual Rate
or Extended Rate will not, of itself, cause a reduction or withdrawal of any
rating then assigned to the Series 1996 Bonds.
Except as provided in (4) above, in any such event, the Series 1996 Bonds
which were to be converted will automatically be converted to a Weekly Rate
Period on the date such conversion was to be made, provided that any
mandatory or optional tender for purchase on the
Conversion Date will nevertheless be carried out. No cancellation of a
conversion will constitute an Event of Default under the Indenture. Upon the
occurrence of any event described in (1) above, the Weekly Rate will be the
per annum rate of interest determined on each Thursday (or if such day is not
a Business Day, the immediately preceding Business Day) by the Trustee which
is equal to the lesser of the Maximum Rate and, so long as the Series 1996
Bonds shall remain Taxable Bonds, the bond equivalent yield on 91-day United
States Treasury Bills, plus 50 basis points, which yield shall be calculated
in accordance with standard practices in the banking industry on the basis
of the discount rates at which such bills were sold but not to exceed the
Maximum Rate.
Upon conversion of the Series 1996 Bonds to a Quarterly, Semiannual or
Extended Rate Period, the FGIC-SPI has agreed to increase the number of days
of accrued interest coverage under the FGIC-SPI Liquidity Facility as
necessary, subject to confirmation of the applicable rating by Moody's.
CONVERSION TO FIXED RATES
The Series 1996 Bonds will be converted to bear interest at Fixed Rates
upon the Authority's request. Upon a conversion of Series 1996 Bonds to bear
interest at Fixed Rates, such Series 1996 Bonds will be subject to mandatory
tender for purchase. As a condition of any Fixed Rate conversion, the
Trustee, any credit provider, FGIC-SPI or other provider of liquidity and the
Remarketing Agent must receive an Opinion of Bond Counsel. The Fixed Rate
Conversion Date will be (1) in the case of a conversion from a Variable Rate
Period other than an Extended Rate Period, an Interest Payment Date for the
Series 1996 Bonds for the Variable Rate Period from which the conversion is
to be made; and (2) in the case of a conversion from an Extended Rate Period,
an Interest Payment Date for the Series 1996 Bonds on which a new Extended
Rate Period would otherwise have commenced pursuant to the Indenture.
The Fixed Rate or Fixed Rates are required to be the lowest rate or rates
of interest per annum (not in excess of the maximum rate of interest allowed
by law) which, in the judgment of the Remarketing Agent, as of the date of
determination and under prevailing market conditions, would cause the Series
1996 Bonds of such maturities to have a market value equal to the principal
amount thereof, plus accrued interest.
If necessary or desirable to achieve the lowest Fixed Rate or Fixed Rates
on the Series 1996 Bonds, the Remarketing Agent may determine that some or
all of the Series 1996 Bonds shall be converted to Serial Bonds maturing in
years for which Amortization Requirements have been established for the
Series 1996 Bonds and maturing in aggregate principal amounts that correspond
to such Amortization Requirements.
The Tender Agent is required to mail or cause the Bond Registrar to mail
a notice of the proposed conversion to the Owners of all Series 1996 Bonds
to be converted not less than 30 days prior to the proposed Fixed Rate
Conversion Date and state that (1) the Series 1996 Bonds are subject to
mandatory tender for purchase (with no right to retain) on the Fixed Rate
Conversion Date at a Purchase Price of par plus accrued interest; and (2) on
and after the Fixed Rate Conversion Date the Series 1996 Bonds shall be deemed
purchased, and thereafter the Owner will have no further rights under the
Indenture except to receive the Purchase Price.
Notwithstanding the delivery of notice of a Fixed Rate conversion
pursuant to the Indenture, conversion of the Series 1996 Bonds to a Fixed
Rate Period will not take effect if (1) the Authority withdraws such notice
of conversion not later than the Business Day preceding the date on which the
Fixed Rate is to be determined; (2) the Remarketing Agent fails to determine
a Fixed Rate; (3) any notice required by the Indenture is not given when
required; or (4) upon conversion any Fixed Rate Series 1996 Bonds would be
Provider Bonds unless FGIC-SPI or other provider of liquidity consents. In
any of such events, the Series 1996 Bonds will automatically be converted to
a Weekly Rate for a Weekly Rate Period which will commence on the date the
Fixed Rate conversion was to be made, but the mandatory tender for purchase
will still be carried out if notice of the Fixed Rate conversion had been
given to the Owners. Withdrawal of a conversion notice must be given by the
Company to the Trustee, the Tender Agent, the Bond Registrar, the Remarketing
Agent, any credit provider and FGIC-SPI or other provider of liquidity, by
telephone, promptly confirmed in writing. No cancellation of a Fixed Rate
conversion pursuant to this paragraph constitutes an Event of Default under
the Indenture. If the Series 1996 Bonds are converted to bear interest at
a Weekly Rate rather than a Fixed Rate, and the Remarketing Agent fails to
set a Weekly Rate, the Weekly Rate shall be the per annum rate of interest
determined on each Thursday (or if such day is not a Business Day, the
immediately preceding Business Day) by the Trustee which is equal to the
lesser of the Maximum Rate and, so long as the Series 1996 Bonds remain
Taxable Bonds, the bond equivalent yield on 91-day United States Treasury
Bills, plus 50 basis points, which yield shall be calculated in accordance
with standard practices in the banking industry on the basis of the discount
rates at which such bills were sold but will not exceed the Maximum Rate.
Following the Fixed Rate Conversion Date, the Series 1996 Bonds will no
longer have the benefit of the FGIC-SPI Liquidity Facility or any other
liquidity facility and will no longer be subject to tender for purchase, but
the payment of principal and interest on the Series 1996 Bonds will continue
to be insured by the policy of the credit providers.
TENDER AND PURCHASE OF VARIABLE RATE BONDS
The Purchase Price payable upon any tender for purchase of Series 1996
Bonds (whether optional or mandatory) shall be an amount equal to the
principal amount of such Series 1996 Bond plus, if the Purchase Date is other
than an Interest Payment Date, accrued interest thereon, at the applicable
rate from the most recent Interest Payment Date to but excluding the Purchase
Date.
Optional Tenders During Variable Rate Periods. During any Variable Rate
---------------------------------------------
Period, the Beneficial Owners of Series 1996 Bonds (other than Provider Bonds)
may elect to have their Series 1996 Bonds (or portions thereof in Authorized
Denominations) purchased at the Purchase Price as set forth below:
(1) Series 1996 Bonds bearing interest at Daily Rates may be tendered
for purchase on any Business Day upon delivery of telephonic notice of
tender given to the Trustee not later than 10:30 a.m. on the Purchase
Date.
(2) Series 1996 Bonds bearing interest at Weekly Rates may be
tendered for purchase on any Business Day upon delivery of a written notice
of tender to the Trustee not later than 5:00 p.m. on a Business Day not less
than seven days prior to the Purchase Date.
(3) Series 1996 Bonds bearing interest at Monthly, Quarterly or
Semiannual rates may be tendered for purchase on any Interest Payment Date
upon delivery of a written notice of tender to the Trustee not later than
5:00 p.m. on a Business Day that is not less than seven days prior to the
Interest Payment Date in the case of Series 1996 Bonds bearing interest at
Monthly Rates and Quarterly Rates, or 15 days prior to the Interest Payment
Date in the case of Series 1996 Bonds bearing interest at Semiannual Rates.
(4) Series 1996 Bonds bearing interest at Extended Rates may be tendered
for purchase on the commencement date of any Extended Rate Period (other
than the Extended Rate Conversion Date) upon delivery of a written
notice of tender to the Trustee not later than 5:00 p.m. on a Business Day
that is not less than 15 days prior to the Purchase Date.
Each notice of tender must, in the case of a written notice, be given by
the Direct Participant through whom such Beneficial Owner owns such Series
1996 Bonds and must be delivered to the Trustee at The Bank of New York, 101
Barclay Street, New York, New York 10286, Attention: Corporate Trust
Department and must be satisfactory to the Trustee. Such notice of tender
must also state, whether delivered in writing or by telephone, the principal
amount of the Series 1996 Bond or portion thereof, that the Owner irrevocably
demands purchase of such Series 1996 Bond or portion thereof, the date on
which such Series 1996 Bond or portion thereof is to be purchased, payment
instructions and the DTC number of such Direct Participant. Such notice of
tender will automatically constitute, whether delivered in writing or by
telephone, (A) an irrevocable offer to sell the Series 1996 Bonds (or portion
thereof) to which the notice relates on the Purchase Date to any purchaser
selected by the Remarketing Agent at the Purchase Price, (B) an irrevocable
authorization and instruction to the Bond Registrar to effect transfer of
such Series 1996 Bonds (or portion thereof) upon payment of such price to the
Trustee on the Purchase Date, (C) an irrevocable authorization and
instruction to the Tender Agent to effect the exchange of the Series 1996
Bonds to be purchased in whole or in part for other Series 1996 Bonds in an
equal aggregate principal amount so as to facilitate the sale of such Series
1996 Bonds (or portion thereof), and (D) an acknowledgment that such Owner
will have no further rights with respect to such Series 1996 Bonds (or
portion thereof) upon payment of the Purchase Price thereof by the Trustee
on the Purchase Date to the Direct Participant from whom the notice of tender
is received, except for the right of such Owner to receive, such Purchase
Price upon surrender of such Series 1996 Bonds to the Tender Agent.
The determination of the Trustee as to whether a notice of tender has
been properly delivered pursuant to the foregoing will be conclusive and
binding upon the Owner. The Trustee, if other than the Tender Agent, must
promptly notify the Tender Agent of its receipt of each notice of tender
described above.
Mandatory Tenders Upon Variable or Fixed Rate Conversion. In the case
--------------------------------------------------------
of any conversion from one Variable Rate Period to another Variable
Rate Period, except a conversion between a Daily Rate Period
and a Weekly Rate Period, the Series 1996 Bonds to be converted
are subject to mandatory tender for purchase on the Conversion
Date at the Purchase Price. In the case of any conversion to
the Fixed Rate, the Series 1996 Bonds to be converted are subject to
mandatory tender for purchase on the Conversion Date at the Purchase Price.
Mandatory Tenders Upon Expiration, Substitution or Termination
--------------------------------------------------------------
of Credit Facility or Liquidity Facility. Prior to the Fixed
- ----------------------------------------
Rate Conversion Date of the Series 1996 Bonds, the Series 1996 Bonds are
subject to mandatory tender for purchase at the Purchase Price on a
Business Day that is at least five days prior to the date on which the credit
facility or liquidity facility is to be canceled in connection with
replacement by a substitute facility pursuant to the Indenture. The Series
1996 Bonds are also subject to mandatory tender for purchase at the Purchase
Price on a Business Day which is at least five days prior to a termination
or expiration of the credit facility or liquidity facility, including a
termination event described in a termination notice delivered pursuant to the
FGIC-SPI Liquidity Facility.
Notice of mandatory tender is required to be given by mail by the Tender
Agent or the Bond Registrar to the Owners of such Series 1996 Bonds by first
class mail not less than 30 days prior to the mandatory tender date.
Purchase of Tendered Series 1996 Bonds. Before 4:00 p.m. on the
--------------------------------------
Purchase Date and upon receipt by the Trustee of 100% of the
aggregate Purchase Price of the tendered Series 1996 Bonds,
the Trustee is required to pay the Purchase Price of such
Series 1996 Bonds to the Owners thereof at its principal office or
by bank wire transfer. Payments are required to be made in immediately
available funds from the following sources in the order of priority
indicated:
(1) The proceeds of the sale of the Series 1996 Bonds which have
been remarketed by the Remarketing Agent (other than proceeds of a sale of
the Series 1996 Bonds to the Authority);
(2) The proceeds of the sale of the Series 1996 Bonds which have
been purchased by FGIC-SPI pursuant to the FGIC-SPI Liquidity Facility (or
from the proceeds received from any substitute liquidity provider if not
then FGIC-SPI);
(3) Moneys paid by the Authority for such purpose that are Eligible
Funds; and
(4) Other moneys paid by the Authority for such purpose.
All Series 1996 Bonds to be purchased on any date are required to be
delivered to the designated corporate trust office of the Tender Agent at or
before 11:30 a.m., Eastern time, on the Purchase Date, except that such
Series 1996 Bonds bearing interest at Semiannual or Extended Rates being
tendered for purchase at the election of the Owner pursuant to the Indenture
must be delivered to the designated corporate trust office of the Tender
Agent along with the notice of tender.
If the Owner of any Series 1996 Bonds (or portion thereof) that is
subject to purchase pursuant to the Indenture fails to surrender such Series
1996 Bonds to the Tender Agent for purchase on the Purchase Date, and if the
Tender Agent is in receipt of the Purchase Price therefor, such Series 1996
Bonds (or portion thereof) will nevertheless be deemed purchased on the
Purchase Date and ownership of such Series 1996 Bonds (or portion thereof)
will be transferred to the purchaser thereof as provided in the Indenture.
Any Owner who fails to deliver a Series 1996 Bond for purchase as required
above will have no further rights thereunder except the right to receive the
Purchase Price thereof upon presentation and surrender of said Series 1996
Bond to the Tender Agent.
Insufficient Funds for Purchases. If the moneys available for purchase
--------------------------------
of Series 1996 Bonds pursuant to the Indenture are inadequate for
the purchase of all Series 1996 Bonds that are tendered on any
Purchase Date, all Series 1996 Bonds will continue to bear
interest at the same rate as in effect on the day prior to
the Purchase Date to the date on which the earliest of the following occurs:
(i) the Fixed Rate Conversion Date for the Series 1996 Bonds; (ii) the date
on which any default by FGIC-SPI or other liquidity provider under the terms
of the FGIC-SPI Liquidity Facility has been cured; or (iii) the fifth day
after the date on which a substitute liquidity facility meeting the
requirements of the Indenture has been obtained. If there are insufficient
funds for purchase, (i) the Tender Agent is required immediately (but no
later than the end of the next succeeding Business Day) to return all
tendered Series 1996 Bonds to the Owners thereof and notify all Owners of the
Series 1996 Bonds in writing of the interest rate to be effective and (ii)
the Trustee is required to return all moneys received for the purchase of
such Series 1996 Bonds to the persons who provided such moneys.
REDEMPTION OF SERIES 1996 BONDS
Optional Redemption. (A) The Series 1996 Bonds bearing interest at
-------------------
Daily, Weekly, Monthly, Quarterly, Semiannual or Extended Rates
(but only if the Extended Rate Period is one year) are subject
to optional redemption prior to their stated maturity upon
request of the Authority in whole or in part any time at a
price equal to the principal amount thereof, together with accrued
interest to the redemption date, without premium.
(B) The Series 1996 Bonds bearing interest at Extended Rates (but only
if the Extended Rate Period is more than one year in duration) or Fixed Rates
are subject to optional redemption prior to their stated maturity
upon request of the Authority in whole or in part at the times
and at the prices set forth below, and in such amounts and
of such maturities as the Authority shall direct, plus accrued interest
thereon to the redemption date:
<TABLE>
<CAPTION>
Years Remaining from Conversion Date until
end of Extended Rate Period or Final
Maturity of Bonds in First Day of
the Fixed Rate Period Redemption Period Redemption Price
------------------------------- ----------------- ----------------
<S> <C> <C>
More than fifteen Tenth anniversary of Conversion Date 102% declining by 1% on each succeeding
anniversary of the tenth anniversary of the
Conversion Date until reaching 100% and
thereafter at 100%
More than seven but not more than fifteen Seventh anniversary of Conversion Date 102% declining by 1% on each succeeding
anniversary of the seventh anniversary of the
Conversion Date until reaching 100% and
thereafter at 100%
More than seven but not more than ten Seventh anniversary of Conversion Date 102% declining by 1% on each succeeding
anniversary of the seventh anniversary of the
Conversion Date until reaching 100% and
thereafter at 100%
More than five but not more than seven Fourth anniversary of Conversion Date 101% declining by 1% on the next anniversary
after the fourth anniversary of the Conversion
Date and thereafter at 100%
Five or fewer Not callable
</TABLE>
Notwithstanding any provision in the Indenture or the Series 1996 Bonds
to the contrary, the Indenture and the Series 1996 Bonds may be amended as
of the Conversion Date upon the request of the Authority, without the consent
of any of the Bondholders, to change the redemption provisions applicable
during an Extended Rate Period or the Fixed Rate Period to such redemption
provisions as are acceptable to the Authority.
Prior to notice being given to the Owners of the affected Series 1996
Bonds of any optional redemption of Series 1996 Bonds, either (A) there shall
be deposited with the Trustee an amount sufficient to pay the principal
amount of the Series 1996 Bonds subject to redemption, plus accrued interest
to the redemption date, plus any premium applicable to such redemption, or
(B) such notice shall state that the redemption is conditioned on the receipt
of moneys for such redemption by the Trustee on or prior to the redemption
date. In the event that a conditional notice of redemption is given and
such moneys are not timely received, the redemption for which such notice
was given shall not be undertaken.
Sinking Fund Redemption. The Series 1996 Bonds are also subject to
-----------------------
redemption prior to maturity at a redemption price equal to the principal
amount thereof, plus accrued interest, by application by the Trustee of
funds on deposit to the credit of the sinking fund on July 1 in the years
and in the principal amounts as follows:
Year Amount
---- ------
1999 $ 1,000,000
2000 1,800,000
2001 2,000,000
2002 2,200,000
2003 2,300,000
2004 2,500,000
2005 2,600,000
2006 2,800,000
2007 3,000,000
2008 3,200,000
2009 3,400,000
2010 3,600,000
2011 3,900,000
2012 4,100,000
2013 4,400,000
2014 4,700,000
2015 4,900,000
2016 5,400,000
2017 5,600,000
2018 6,100,000
2019* 10,500,000
- --------------------
* Final maturity.
Redemption Upon the Occurrence of Certain Events. The Series 1996 Bonds
------------------------------------------------
will be redeemed in whole or in part in such amounts and of such
maturities as the Authority shall direct at any time at a
redemption price equal to 100% of the principal amount thereof
plus accrued interest, if any, to the redemption date upon receipt
by the Trustee of a written notice from the Authority stating that
either of the following events has occurred: (1) all or substantially all
of the expressway system specified in the Indenture has been damaged or
destroyed and the Authority shall determine that it is not practicable or
desirable to rebuild, repair and restore the same; or (2) all or
substantially all of the expressway system has been condemned or such use
or control thereof has been taken by eminent domain as to render the same
unsatisfactory to the Authority for continued operation. Any such redemption
prior to the Fixed Rate Conversion Date may be made only from Eligible Funds.
Provider Bonds Redemption. (A) Provider Bonds shall be redeemed before
-------------------------
any other Series 1996 Bonds are redeemed.
(B) Provider Bonds are subject to redemption prior to maturity at the
option of the Authority as a whole or in part in such amounts and of such
maturities as the Authority shall direct on any date at the principal amount
thereof, without premium, plus interest accrued thereon to the redemption
date.
Partial Redemptions. If less than all of the Series 1996 Bonds are to
-------------------
be redeemed, the particular Series 1996 Bonds to be redeemed shall be selected
by the Trustee in such manner as the Trustee in its discretion deems fair and
appropriate.
Notice of Redemption. At least 30 days but not more than 45 days before
--------------------
the redemption date of any Series 1996 Bonds, the Trustee will cause a notice
of any such redemption to be given by mail, postage prepaid, to
all Owners owning Series 1996 Bonds to be redeemed in whole or
in part. Failure to mail any such notice to any Owner or any
defect in any notice so mailed will not affect the validity of
the proceedings for the redemption of the Series 1996 Bonds of
any other Owners. Each such notice will set forth (i) the date fixed for
redemption, (ii) the redemption price to be paid, (iii) the CUSIP numbers and
the certificate numbers of the Series 1996 Bonds to be redeemed, (iv) the
name and address of the Paying Agent, (v) the dated date, interest rate and
maturity date of the Series 1996 Bonds, (vi) if less than all of the Series
1996 Bonds then Outstanding are called for redemption, the amounts of each
of the Series 1996 Bonds to be redeemed and (vii) the name, address and
telephone number of a contact for such redemption.
If a portion of an Outstanding Series 1996 Bond is selected for
redemption, the Owner or his attorney or legal representative must present
and surrender such Series 1996 Bond to the Bond Registrar for payment of the
redemption price of the portion thereof called for redemption, and the
Authority will execute and the Bond Registrar will authenticate and deliver
to or upon the order of such Owner, without charge, other than any applicable
tax or other governmental charge, for the unredeemed portion of the principal
amount of the Series 1996 Bond so surrendered, a Series 1996 Bond of any
Authorized Denomination.
WHILE THE SERIES 1996 BONDS ARE HELD UNDER THE BOOK-ENTRY ONLY SYSTEM
DESCRIBED ABOVE, NOTICES OF REDEMPTION WILL BE MAILED SOLELY TO CEDE & CO.,
AS THE OWNER OF THE SERIES 1996 BONDS.
Effect of Calling for Redemption. If money or Escrow Securities, or a
--------------------------------
combination of both, sufficient to pay the redemption price of the
Series 1996 Bonds to be redeemed are held by the Trustee in
trust for the Owners of Series 1996 Bonds to be redeemed, then
interest on the Series 1996 Bonds called for redemption will
cease to accrue; such Series 1996 Bonds will cease to be
entitled to any benefits or security under the Indenture or to
be deemed Outstanding, and the Owners of such Series 1996 Bonds will have no
rights in respect thereof except to receive payment of the redemption price.
Series 1996 Bonds and portions of Series 1996 Bonds for which irrevocable
instructions to pay on one or more specified dates or to call for redemption
at the redemption date have been given to the Trustee in form satisfactory
to it will not thereafter be deemed to be Outstanding under the Indenture and
will cease to be entitled to the security of or any rights under the
Indenture, other than rights to receive payment of the redemption price
thereof, to be given notice of redemption in the manner provided in the
Indenture, and, to the extent provided in the Indenture, to receive Series
1996 Bonds for any unredeemed portions of Series 1996 Bonds, if money or
Escrow Securities, or a combination of both, sufficient to pay the redemption
price of such Series 1996 Bonds or portions thereof, are held in separate
accounts by the Trustee in trust for the Owners of such Series 1996 Bonds.
THE FGIC-SPI LIQUIDITY FACILITY
The Obligations will rank equally with all other general unsecured and
unsubordinated obligations of FGIC-SPI. The Obligations are not issued
pursuant to an indenture. As of the date hereof FGIC-SPI has approximately
$2.942 billion obligations currently outstanding after giving effect to the
Obligations.
Owners of the Bonds to which the Obligations relate will be entitled to
the benefits and subject to the terms of the FGIC-SPI Liquidity Facility.
Pursuant to the FGIC-SPI Liquidity Facility, FGIC-SPI agrees to make
available to a specified intermediary, upon receipt of an appropriate demand
for payment, the Purchase Price for such Bonds. The obligation of FGIC-SPI
under the FGIC-SPI Liquidity Facility will be sufficient to pay a Purchase
Price equal to the principal of and up to 35 days' interest on the Bonds at
an assumed rate of 15% per annum; provided, that the number of days accrued
interest will be increased as necessary in the event that the Bonds are
remarketed at a Quarterly Rate, the Semiannual Rate and the Extended Rate,
subject to confirmation of the applicable rating by Moody's.
TERMINATION EVENTS
The scheduled expiration date of the FGIC-SPI Liquidity Facility is
December 10, 2001, unless extended by FGIC-SPI for additional five years upon
notice to the Authority two years prior to the scheduled expiration date.
Mandatory purchase of Bonds by FGIC-SPI shall occur under the circumstances
specified in the Indenture. Under certain circumstances, the obligation of
FGIC-SPI to purchase Bonds tendered for purchase pursuant to an optional or
mandatory tender, which have not been remarketed, may be terminated. The
following events constitute "Termination Events" under the FGIC-SPI Liquidity
Facility:
(a) (i) any portion of the commitment fee shall not be paid when due on
the quarterly payment date as set forth in the Standby Bond Purchase
Agreement and related payment agreement (the Payment Agreement"), or (ii) any
other amount payable thereunder shall not be paid when due and any such
failure shall continue for three (3) Business Days after notice
thereof to the Authority; (b) (i) the Authority shall fail to observe or
perform any covenant or agreement contained in the Indenture and, if such
failure is a result of a covenant breach which is capable of being remedied,
such failure continues for ninety (90) days following written notice thereof
to the Authority from FGIC-SPI, or (ii) there shall not be at all times a
Remarketing Agent performing the duties thereof contemplated by the
Indenture; (c) any representation, warranty, certification or statement made
by the Authority (or incorporated by reference) in any related document or
in any certificate, financial statement or other document delivered pursuant
thereto or any related document shall prove to have been incorrect in any
material respect when made; (d) any default by the Authority shall have
occurred and be continuing in the payment of principal of or premium, if any,
or interest on any bond, note or other evidence of indebtedness issued,
assumed or guaranteed by the Authority the obligation and security for which
under the Indenture or under any related document is senior to, or on parity
with, the Bonds; (e) the Authority files a petition in voluntary bankruptcy,
for the composition of its affairs or for its corporate reorganization under
any state or federal bankruptcy or insolvency law, or makes an assignment for
the benefit of creditors, or admits in writing to its insolvency or inability
to pay debts as they mature, or consents in writing to the appointment of a
trustee or receiver for itself; (f) a court of competent jurisdiction shall
enter an order, judgment or decree declaring the Authority insolvent, or
adjudging it bankrupt, or appointing a trustee or receiver of the Authority,
or approving a petition filed against the Authority seeking a reorganization
of the Authority under any applicable law or statute of the United States of
America or any state thereof, and such order, judgment or decree shall not
be vacated or set aside or stayed within sixty (60) days from the date of the
entry thereof; (g) under the provisions of any other law for the relief or
aid of debtors, any court of competent jurisdiction shall assume custody or
control of the Authority, and such custody or control shall not be terminated
within sixty (60) days from the date of assumption of such custody or
control; (h) any material provision of the Standby Bond Purchase Agreement,
the Indenture, any related document, the Bonds or the Bonds purchased by
FGIC-SPI shall cease for any reason whatsoever to be a valid and binding
agreement of the Authority or the Authority shall contest the validity or
enforceability thereof; or (i) failure to pay when due any amount payable
under the Bonds or the Provider Bonds (regardless of any waiver thereof by
the Holders of the Bonds).
Upon the occurrence of a Termination Event, FGIC-SPI may deliver notice
to the Trustee, the Authority, the Remarketing Agent and the Tender Agent
regarding its intention to terminate the Liquidity Facility. The FGIC-SPI
Liquidity Facility would terminate, effective at the close of business on the
35th day following the date of such notice, or if such date is not a Business
Day, the next Business Day. Prior to the effectiveness of such termination,
all Bonds that are Variable Rate Bonds are subject to mandatory tender for
purchase from the proceeds of a drawing under the FGIC-SPI Liquidity
Facility. The termination of the FGIC-SPI Liquidity Facility, however, does
not result in an automatic acceleration of the Bonds.
The obligations of the Authority with respect to the Bonds are as
described in the Official Statement relating to the Series 1996 Bonds.
THE STANDBY LOAN AGREEMENT; GE CAPITAL
In order to obtain funds to fulfill its obligations under the FGIC-SPI
Liquidity Facility, FGIC-SPI will enter into a standby loan agreement with
GE Capital (the "Standby Loan Agreement") under which GE Capital will be
irrevocably obligated to lend funds to FGIC-SPI as needed to purchase such
Bonds. Each loan under the Standby Loan Agreement will be in an amount not
exceeding the purchase price for tendered Bonds which represents the
outstanding principal amount of such tendered Bonds together with accrued
interest thereon to but excluding the date a borrowing is made and will
mature on the date which is five years from the effective date of the Standby
Loan Agreement. The proceeds of each loan shall be used only for the purpose
of paying the purchase price for tendered Bonds. When FGIC-SPI desires to
make a borrowing under the Standby Loan Agreement, it must give GE Capital
prior written notice of such borrowing by at least 11:45 a.m., New York City
time, on the proposed borrowing date. No later than 2:15 p.m., New York City
time, on each borrowing date (if the related notice of borrowing has been
received by 11:45 a.m. on such date), GE Capital will make available the
amount of the borrowing requested.
The Standby Loan Agreement will expressly provide that it is not a
guarantee by GE Capital of the Bonds or of FGIC-SPI's obligations under the
FGIC-SPI Liquidity Facility. GE Capital will not have any responsibility
for, or incur any liability in respect of, any act, or any failure to act,
by FGIC-SPI which results in the failure of FGIC-SPI to effect the purchase
for the account of FGIC-SPI of tendered Bonds with the funds provided
pursuant to the Standby Loan Agreement.
GE Capital is subject to the informational requirements of the 1934 Act
and in accordance therewith files reports and other information with the
Commission. Such reports and other information can be inspected and copied
at Room 1024 at the Office of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as at the Regional Offices of the Commission
at 500 W. Madison, 14th Floor, Chicago, Illinois 60661-2511, and 7 World
Trade Center, New York, New York 10048 and copies can be obtained by mail
from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates. Reports and other
information concerning GE Capital can also be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005 on which
certain of GE Capital's securities are listed.
The following table sets forth the consolidated ratio of earnings to
fixed charges of GE Capital for the periods indicated:
<TABLE>
<CAPTION>
Nine Months
Ended
Year Ended December 31, September 28, 1996
---------------------- --------------------
<S> <C> <C> <C> <C> <C>
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
1.34 1.44 1.62 1.63 1.51 1.56
</TABLE>
For purposes of computing the consolidated ratio of earnings to fixed
charges, earnings consist of net earnings adjusted for the provision for
income taxes, minority interest and fixed charges. Fixed charges consist of
interest and discount on all indebtedness and one-third of rentals, which the
Company believes is a reasonable approximation of the interest factor of such
rentals.
EXPERTS
The financial statements and schedule of General Electric Capital
Corporation and consolidated affiliates as of December 31, 1995 and 1994, and
for each of the years in the three year period ended December 31, 1995,
appearing in GE Capital's Annual Report on Form 10-K for the year ended
December 31, 1995, incorporated by reference herein, have been incorporated
herein by reference in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
APPENDIX A
TENDER TIMELINE
TENDERS FOR BONDS
PURCHASE DATE
(New York City time)
--------- --------- --------- --------
11:30 a.m. 11:45 a.m. 2:15 p.m. 2:30 p.m.
(1) (2) (3) (4)
1. Trustee shall give immediate telephonic notice, in any event not later
than 11:30 a.m. on the Purchase Date, to FGIC-SPI specifying the aggregate
principal amount of Bonds to be purchased by FGIC-SPI on such Purchase
Date.
2. FGIC-SPI must give GE Capital prior written notice of a borrowing under
the Standby Loan Agreement by 11:45 a.m. on the date of the proposed
borrowing.
3. No later than 2:15 p.m. on each Purchase Date, GE Capital will make
available the amount of borrowing requested.
4. FGIC-SPI purchases Bonds, for which remarketing proceeds are
unavailable, by 2:30 p.m. on the Purchase Date.
SUMMARY OF RATE PERIODS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MODE INTEREST RATE DATE ON WHICH NOTICE NOTICE CONVERSION CONVERSION PAYMENT
PAYMENT DATE DETERMINATION RATE BECOMES OF RATE PERIOD FOR DATE DATE FOR BONDS
AND DATE EFFECTIVE TENDER (when converting NOTICE TO TENDERED
RECORD DATE from the Stated BONDHOLDERS
---------- -------------- ------------- ------------- ------- ---------- ---------------- ----------- -----------
DAILY RATE Interest: 1st Daily Rate Each Business Daily Telephone Interest Payment Not less than Before 4:00
MODE Business Day of determined Day Rate notice not Date 30 days before p.m. on
each calendar between 8:30 available later than Conversion Purchase Date
month a.m. and 10:00 from 10:30 a.m. Date in
Record: The a.m. on the Tender on Purchase immediately
Business Day commencement Agent Date available
immediately date upon funds
prior to request
Interest
Payment Date
WEEKLY RATE Interest: 1st Weekly Rate Each Thursday, Weekly Written Interest Payment Not less than Before 4:00
MODE Business Day of determined not except that in Rate notice not Date 30 days before p.m. on
each calendar later than 4:00 the case of a available later than Conversion Purchase Date
month p.m. on conversion from from 5:00 p.m. Date in
Record: The Wednesday, or if a different Tender on a immediately
Business Day such Wednesday Variable Rate Agent Business available
immediately not a Business on the Weekly upon Day not funds
prior to Day, the last Rate Conversion request less than 7
Interest Business Day Date days before
Payment Date which is the
immediately Purchase
preceding the Date
commencement
date
MONTHLY Interest: 1st (A) Preliminary 1st Business Written Written Interest Payment Not less than Before 4:00
RATE MODE Business Day of Monthly Rate Day of each notice notice not Date 30 days before p.m. on
each calendar determined not calendar month from Bond later than Conversion Purchase Date
month later than 4:00 Registrar 5:00 p.m. Date in
Record: Last p.m. on the last to on a immediately
Business Day at Business Day registere Business available
least 5 days which is at d owner Day not funds
prior to least 8 days not later less than 7
Interest preceding the than 5:00 days before
Payment Date commencement p.m. on Interest
date and (B) the 3rd Payment
actual monthly Business Date
Rate determined Day
not later than following
4:00 p.m. on the date of
Business Day determina
immediately tion
preceding the
commencement
date
QUARTERLY Interest: 1st (A) Preliminary Initially, the Written Written Interest Payment Not less than Before 4:00
RATE MODE Business Day of Quarterly Rate Quarterly Rate notice notice not Date 30 days before p.m. on
the calendar determined not Conversation from Bond later than Conversation Purchase Date
month following later than 4:00 Date and Registrar 5:00 p.m. Date in
the Quarterly p.m. on the last subsequently on to on a immediately
Rate Conversion Business Day the 1st registere Business available
Date and which is at Business Day of d owner Day not funds
subsequently on least 15 days 3rd calendar not later less than 7
the 1st preceding the month than 5:00 days before
Business Day of commencement thereafter p.m. on Interest
each 3rd date and (B) the 3rd Payment
calendar month actual Quarterly Business Date
thereafter Rate determined Day
Record: 15th not later than following
day of calendar 4:00 p.m. on the date of
month Business Day determina
immediately immediately tion
preceding preceding the
Interest commencement
Payment Date date
SEMIANNUAL Interest: 1st (A) Preliminary Initially, the Written Written Interest Payment Not less than Before 4:00
RATE MODE Business Day of Semiannual Rate Semiannual Rate notice notice not Date 30 days before p.m. on
the 6th month determined not Conversion Date from Bond later than Conversion Purchase Date
following the later than 4:00 and Registrar 5:00 p.m. Date in
Semi-annual p.m. on the last subsequently on to on a immediately
Rate Conversion Business Day the 1st registere Business available
Date and which is at Business Day of d owner Day not funds
subsequently on least 30 days each 6th not later less than
the 1st immediately calendar month than 5:00 15 days
Business Day of preceding the thereafter p.m. on before
each 6th commencement the 3rd Interest
calendar month date and (B) Business Payment
thereafter actual Day Date
Record: 15th Semiannual Rate following
day of calendar determined not date of
month later than 4:00 determina
immediately p.m. on the tion
preceding Business Day
Interest immediately
Payment Date preceding the
commencement
date
EXTENDED Interest: 1st (A) Preliminary Initially, the Written Written Interest Payment Not less than Before 4:00
RATE MODE Business Day of Extended Rate Extended Rate notice notice not Date on which 30 days before p.m. on
the 6th month determined by Conversion Date from Bond later than new Extended Conversion Purchase Date
following the 4:00 p.m. on the and Registrar 5:00 p.m. Rate Period Date in
Extended Rate last Business subsequently on to on a would otherwise immediately
Conversion Date Day which is at the 1st registere Business have commenced available
and least 30 days Business Day of d owner Day not funds
subsequently on immediately the calendar not later less than
the first preceding the month following than 5:00 15 days
Business Day of commencement the last day of p.m. on before
each 6th date and (B) the prior Rate the 3rd Purchase
calendar month actual Extended Period and Business Date
thereafter Rate determined extend for 1 Day
Record: 15th not later than year or following
day of calendar 4:00 p.m. on the integral date of
month Business Day multiples of 6 determina
immediately immediately months in tion
preceding preceding the excess of 1
Interest commencement year set by the
Payment Date date Remarketing
Agent
FIXED RATE Interest: 1st (A) Preliminary (A) If NA NA NA NA NA
MODE day of each Fixed Rate conversion from
January and determined on a Variable Rate
July Business Day at Mode other than
least 35 days Extended Rate
Record: 15th prior to the Mode the
day of calendar Fixed Rate Interest
month Conversion Date Payment Date
immediately and (B) Fixed for the Bonds
preceding Rate determined and (B) if
Interest by 3:30 p.m. not conversion from
Payment Date later than the Extended Rate
last Business Mode an
Day which is at Interest
least 5 days Payment Date on
prior to Fixed which a new
Rate Conversion Extended Rate
Date Period would
otherwise have
commenced for
the Bonds
</TABLE>
Appendix C
DEFINITIONS
-----------
"Amortization Requirements" shall mean the money required to be deposited
in the sinking fund for the purpose of the mandatory redemption or payment
at maturity of any Term Bonds issued pursuant to this Indenture and in
accordance with the terms thereof.
"Authorized Denomination" means (a) in the case of the Series 1996 Bonds,
(i) while the Series 1996 Bonds bear interest at a Daily, Weekly or Monthly
Rates, $100,000 and integral multiples of $5,000 over $100,000, and (ii)
while the Series 1996 Bonds bear interest at a Quarterly, Semiannual,
Extended or Fixed Rate, $5,000, and integral multiples thereof, and (b) in
the case of other Series of Bonds, such denominations as shall be authorized
in a supplemental Indenture authorizing the issuance of such Bonds.
"Authorized Officer" shall mean, when used with respect to the Authority,
the Chairman, the Vice Chairman, the Executive Director, and any other
officer or employee of the Authority designated from time to time by
resolution of the Authority as an Authorized Officer under this Indenture.
"Bond Counsel" shall mean any firm of nationally recognized municipal
bond attorneys selected by the Authority, including co-counsel to such firm,
each of which shall be experienced in the issuance of municipal bonds and
matters relating to the exclusion of the interest thereon from gross income
for purposes of federal income taxation.
"Bond Registrar" shall mean a bank or trust company, either within or
without the State of Florida, designated as such by resolution of the
Authority, which shall perform such functions as Bond Registrar as are
required by this Indenture with respect to one or more Series of Bonds.
Notwithstanding the preceding sentence, the Trustee shall be the initial Bond
Registrar.
"Bondholder" (or "Owner") shall mean the registered owners of the Bonds
as shown on the registration books of the Bond Registrar.
"Business Day" means any date other than (i) Saturday or Sunday, (ii) a
day on which the Trustee, any credit provider or liquidity provider whose
facilities are then in effect are lawfully closed, (iii) a day on which the
federal reserve bank for the federal reserve district in which the Trustee
or Tender Agent is located is closed; or (iv) a day on which the New York
Stock Exchange is closed.
"Conversion Date" means:
(a) When used with respect to a Fixed Rate, the date on which a Fixed
Rate becomes effective pursuant to the Indenture; and
(b) When used with respect to any particular Variable Rate Period, the
date on which such Rate Period first becomes effective pursuant to the
Indenture.
"Corporation Rate" shall mean the rate of interest per annum borne by the
Provider Bonds, which shall equal the Prime Rate plus 1% or, if applicable,
the Default Rate; provided however that the Corporation Rate shall not exceed
the lesser of 12% per annum or the maximum rate permitted by applicable law.
"Daily Rate" shall mean the interest rate determined for the Bonds for
a Daily Interest Period pursuant to the Indenture.
"Daily Rate Period" shall mean, while the Series 1996 Bonds bear interest
at the Daily Rate, the period commencing on each Business Day to but
excluding the following Business Day.
"Default Rate" shall mean, with respect to Provider Bonds, a rate of
interest per annum equal to the Prime Rate plus 3%.
"Eligible Funds" means:
(a) Bonds proceeds deposited with the Trustee contemporaneously with the
issuance and sale of Bonds (other than proceeds of sale of Bonds to the
Authority) and which were continuously thereafter subject to the lien of
this Indenture in a separate and segregated fund, account or subaccount
established hereunder in which no moneys which were not Eligible Funds were
at any time held while such Bond proceeds were held therein, together with
the investment earnings thereon;
(b) Moneys (i) held in any Fund, Account or Subaccount in which no other
moneys which are not Eligible Funds are held, and (ii) which have been on
deposit with the Trustee for at least three hundred sixty-six (366)
consecutive days during which period no Event of Bankruptcy shall have
occurred, together with the investment earnings thereon;
(c) Proceeds of a drawing under a credit or liquidity facility; and
(d) Proceeds from the issuance and sale of Refunding Bonds and any other
moneys deposited with the Trustee if there is delivered to the Trustee at
the time of the issuance and sale of such Refunding Bonds or the deposit of
such other moneys with the Trustee a written opinion of nationally
recognized bankruptcy counsel to the effect that payments with such
proceeds or other moneys, as the case may be, of principal of, premium, if
any, or interest on the Bonds would not be avoidable transfers under the
United States Bankruptcy Code should an Event of Bankruptcy hereafter occur.
"Escrow Securities" shall mean cash, direct non-callable obligations of
the United States of America and securities fully and unconditionally
guaranteed as to the timely payment of principal and interest by the United
States of America, to which direct obligations or guarantee the full faith
and credit of the United States of America has been pledged, Refcorp interest
strips, CATS, TIGRS, STRPS, or defeased municipal bonds rated "AAA" by S&P
or "Aaa" by Moody's (or any combination thereof).
"Event of Bankruptcy" means the filing of a petition in bankruptcy or the
commencement of a proceeding under the United States Bankruptcy Code pursuant
to Sections 301 or 303 thereof by or against the Authority.
"Extended Rate" shall mean the interest rate determined for the Series
1996 Bonds for an Extended Rate Period pursuant to the Indenture.
"Extended Rate Period" shall mean, while the Series 1996 Bonds bear
interest at the Extended Rate, the period commencing on the Extended Rate
Conversion Date and on the first Business Day of the calendar month following
the last day of the prior Rate Period, extending for a period of one year or
integral multiples of six months in excess of one year as established by the
Remarketing Agent and ending on a day which is the last day preceding the
first Business Day of a calendar month.
"Fixed Rate" means an interest rate to be determined for the Series 1996
Bonds pursuant to the Indenture.
"Fixed Rate Period" means the period of time during which the Series
1996 Bonds bear interest at a Fixed Rate.
"Fund" shall mean any fund created and maintained pursuant to this
Indenture.
"Indenture" shall have the meaning ascribed to it in the introductory
paragraph hereof.
"Interest Payment Date" shall mean, with respect to the Series 1996
Bonds:
(a) When the Series 1996 Bonds bear interest at the Daily, Weekly or
Monthly Rate, the first Business Day of each calendar month commencing with
the first Business Day of each calendar month commencing with the first
Business Day of the calendar month following the initial issuance and
delivery of the Series 1996 Bonds;
(b) When the Series 1996 Bonds bear interest at the Quarterly Rate, the
first Business Day of the third calendar month following the Quarterly Rate
Conversion Date and subsequently the first Business Day of each third
calendar month thereafter;
(c) When the Series 1996 Bonds bear interest at the Semiannual or
Extended Rate, the first Business Day of the sixth month following the
Semiannual or Extended Rate Conversion Date and subsequently the first
Business Day of each sixth calendar month thereafter; and
(d) When the Series 1996 Bonds bear interest at the Fixed Rate, each
January 1 and July 1 after the Fixed Rate Conversion Date.
"Interest Payment Date" means with respect to other Series of Bonds, the
dates on which interest on such Bonds is payable as specified in the
Supplemental Indenture authorizing the issuance of such Bonds.
"Maximum Rate" shall mean, with respect to the Series 1996 Bonds prior
to the conversion of the Series 1996 Bonds to the Fixed Rate, 15% so long as
the Series 1996 Bonds are Taxable Bonds or 12% so long as the Series 1996
Bonds are not Taxable Bonds, and, thereafter, the highest rate of interest
allowed by law.
"Monthly Rate" means the interest rate determined for a Monthly Rate
Period pursuant to the Indenture.
"Monthly Rate Period" shall mean, while the Series 1996 Bonds bear
interest at the Monthly Rate, the period commencing on the first Business Day
of each month to but excluding the first Business Day of the following month.
"Moody's" shall mean Moody's Investors Service, Inc. and its successors
and assigns, and, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency,
"Moody's" shall be deemed to refer to any other nationally recognized
securities rating agency designated by the Authority by written notice of an
Authorized Officer to the Trustee.
"Opinion of Bond Counsel" means a written opinion of Bond Counsel, in
form and substance satisfactory to the Trustee, and except as may be
otherwise specifically set forth in this Indenture, to the effect that the
action proposed to be taken is authorized or permitted by the laws of the
State and this Indenture and will not adversely affect the validity of the
Bonds under the laws of the State or, except to the extent that any of the
Bonds shall be Taxable Bonds, the exclusion from gross income for federal
income tax purposes of interest on any Bonds.
"Outstanding" shall mean, when used with reference to the Bonds of any
of them, all Bonds theretofore delivered except: (a) Bonds deemed to have
been paid in accordance with the Indenture; (b) Bonds in lieu of which other
Bonds have been issued pursuant to the provisions hereof relating to Bonds
destroyed, mutilated, stolen or lost; (c) Bonds paid, redeemed to delivered
to or acquired by the Authority for cancellation; and (d) for purposes of any
consent or other action to be taken hereunder by the Owners of a specified
percentage of principal amount of Bonds, the Bonds held by or for the account
of the Authority.
"Owner" (or "Bondholder") shall mean the registered owners of the Bonds
as shown on the registration books of the Bond Registrar.
"Paying Agent" shall mean a bank or trust company, either within or
without the State of Florida, designated as such by resolution of the
Authority, which shall perform such functions as Paying Agent as are required
by this Indenture with respect to one or more Series of Bonds.
Notwithstanding the preceding sentence, the Trustee shall be the initial
Paying Agent for the Series 1996 Bonds.
"Prime Rate" shall mean, with respect to Provider Bonds, the rate of
interest publicly announced by Morgan Guaranty Trust Company of New York from
time to time as its "Prime Rate".
"Purchase Date" means the date upon which the Tender Agent is obligated
to purchase a Series 1996 Bond or Series 1996 Bonds pursuant to the
Indenture.
"Purchase Price" of any Series 1996 Bond required to be purchased by the
Tender Agent pursuant to the Indenture means an amount equal to the principal
amount of such Series 1996 Bond plus, if the Purchase Date is other than an
Interest Payment Date, accrued interest thereon, at the rate applicable to
the Series 1996 Bond from the most recent Interest Payment Date and up to but
excluding the Purchase Date.
"Quarterly Rate" shall mean the interest rate determined for the Series
1996 Bonds for any Quarterly Rate Period pursuant to the Indenture.
"Quarterly Rate Period" shall mean, while the Series 1996 Bonds bear
interest at the Quarterly Rate, the period commencing on the Quarterly Rate
Conversion Date for the Series 1996 Bonds, and on the first Business Day of
each third calendar month thereafter, to but excluding the first Business Day
of the third calendar month thereafter.
"Rate Period" or "Period" shall mean, when used with respect to any
particular rate of interest applicable to the Series 1996 Bonds (whether a
Daily, Weekly, Monthly, Quarterly, Semiannual, Extended or Fixed Rate), the
period during which such rate of interest will remain in effect pursuant to
the Indenture.
"Refunding Bonds" shall mean the Bonds issued pursuant to the Indenture
on a parity with any Outstanding Bonds.
"S&P" shall mean Standard & Poor's Rating Group, a division of The
McGraw-Hill Companies, Inc. and its successors and assigns, and, if such
entity shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, "S&P" shall be deemed to refer to
any other nationally recognized securities rating agency designated by the
Authority by written notice of an Authorized Officer to the Trustee.
"Semiannual Rate" shall mean the interest rate determined for a
Semiannual Interest Period pursuant to the Indenture.
"Semiannual Rate Period" shall mean, while the Series 1996 Bonds bear
interest at the Semiannual Rate, the period commencing on the Semiannual Rate
Conversion Date and from and including the first Business Day of each sixth
calendar month thereafter to but excluding the first Business Day of the
sixth calendar month thereafter.
"Serial Bonds" shall mean the Bonds of a Series which are stated to
mature in annual installments.
"Series" shall mean the Bonds delivered at any one time under the
provisions of the Indenture.
"State" shall mean the State of Florida.
"Subaccount" shall mean any subaccount created and maintained pursuant
to the Indenture.
"Supplemental Indenture" shall mean an indenture supplemental to the
Indenture or amendatory thereto entered into by the Authority and the Trustee
pursuant to the terms thereof.
"Taxable Bond" shall mean any Series 1996 Bond issued under the
Indenture, if in connection with such issuance there was not delivered to the
Authority an opinion of Bond Counsel to the effect that the interest on such
Bond is not included in the gross income of the Owners thereof for purposes
of federal income taxation.
"Term Bonds" shall mean Bonds which shall be stated to mature on one date
and for the amortization of which payment of Amortization Requirements are
required to be made into the sinking fund.
"Variable Rate" means, as the context requires, the Daily, Weekly,
Monthly, Quarterly, Semiannual or Extended Rate applicable to the Series 1996
Bonds.
"Variable Rate Bonds" shall mean Bonds issued with a variable,
adjustable, convertible or other similar interest rate which is not fixed in
percentage for the entire term thereof at the date of issue, and which may
be convertible to a fixed interest rate.
"Weekly Rate" shall mean the interest rate determined for a Weekly Rate
Period pursuant to the Indenture.
"Weekly Rate Period" shall mean, while the Series 1996 Bonds bear
interest at the Weekly Rate, the period commencing on Thursday of each week
(or in the case of the first Weekly Rate Period, on the date of original
issuance and delivery of the Series 1996 Bonds) to but excluding Thursday of
the following week (or in the case of the first Weekly Rate Period, the
Thursday immediately following the date of original issuance and delivery of
the Series 1996 Bonds), except that (a) in the case of a conversion to a
Weekly Rate Period from a different Variable Rate Period, the initial Weekly
Rate Period shall be from and including Thursday of the following
week, and (b) in the case of a conversion of the Series 1996
Bonds from a Weekly Rate Period to a different Rate Period, the last Weekly
Rate Period shall end on and exclude the Conversion Date.
$1,000,000,000
PRINCIPAL AMOUNT PLUS INTEREST
LIQUIDITY FACILITY OBLIGATIONS
OF
FGIC SECURITIES PURCHASE, INC.
FGIC Securities Purchase, Inc. ("FGIC-SPI" or the "Company") intends to
offer from time to time, in connection with the issuance by municipal
authorities or other issuers of adjustable or floating rate debt securities
(the "Securities"), its obligations (the "Obligations") under one or more
liquidity facilities (the "Liquidity Facilities"). The Obligations will not
be sold separately from the Securities, which will be offered pursuant to a
separate prospectus or offering statement. The Obligations will not be
severable from the Securities and may not be separately traded. This
Prospectus, appropriately supplemented, may also be delivered in connection
with any remarketing of Securities purchased by FGIC Securities Purchase,
Inc. or its affiliates.
Unless otherwise specified in a prospectus supplement to the Prospectus
(a "Prospectus Supplement"), the Obligations will be issued from time to
time to provide liquidity for certain adjustable or floating rate Securities
issued by municipal authorities or other issuers. The specific terms of the
Obligations and the Securities to which they relate will be set forth in a
Prospectus Supplement. Each issue of Obligations may vary, where applicable,
depending upon the terms of the Securities to which the issuance of
Obligations relates.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURI-
TIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------
The date of this Prospectus is December 6, 1996.
The information contained in this Prospectus has been obtained from FGIC
Securities Purchase, Inc. This Prospectus is submitted in connection with
the future sale of securities as referred to herein, and may not be
reproduced or used, in whole or in part, for any other purposes.
No dealer, salesman or any other person has been authorized by FGIC-SPI
to give any information or to make any representation, other than as
contained in this Prospectus or a Prospectus Supplement, in connection with
the offering described herein, and if given or made, such other information
or representation must not be relied upon as having been authorized by any
of the foregoing. This Prospectus does not constitute an offer of any
securities other than those described herein or a solicitation of an offer
to buy in any jurisdiction in which it is unlawful for such person to make
such offer, solicitation or sale.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and in accordance therewith
files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information can be
inspected and copied at Room 1024 at the Office of the Commission, 450 Fifth
Street N.W., Washington, D.C. 20549, as well as at the Regional Offices of
the Commission at 500 W. Madison, 14th Floor, Chicago, Illinois 60661-2511,
and 7 World Trade Center, New York, New York 10048 and copies can be obtained
by mail from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. FGIC-SPI does not
intend to deliver to holders of its obligations offered hereby an annual
report or other report containing financial information.
This Prospectus and the applicable Prospectus Supplement constitute a
prospectus with respect to the Obligations of FGIC-SPI under the Liquidity
Facilities to be issued from time to time by FGIC-SPI in support of the
Securities. It is not anticipated that registration statements with respect
to the Securities issued by municipal authorities or other issuers will be
filed under the Securities Act of 1933, as amended, in reliance on an
exemption therefrom.
---------------
DOCUMENTS INCORPORATED BY REFERENCE
There are hereby incorporated in this Prospectus by reference the
Company's Annual Report on Form 10-K for the year ended December 31, 1995 and
the Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996 all heretofore filed with the Commission
pursuant to Section 13 of the 1934 Act, to which reference is hereby made.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the 1934 Act after the date of this Prospectus and prior to the
termination of the offering of the Obligations and the Securities shall be
deemed to be incorporated in this Prospectus by reference and to be a part
hereof from the date of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, on the written or oral
request of such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents. Requests for such copies
should be directed to Corporate Communications Department, FGIC Corporation,
115 Broadway, New York, New York 10006, Telephone No. (212) 312-3000.
SUMMARY
The proposed structure will be utilized to provide liquidity through a
"put" mechanism for floating or adjustable rate securities and other
derivative debt securities issued by municipal authorities or other issuers.
Such securities typically include a tender feature that permits broker-
dealers to establish interest rates on a periodic basis which would enable
the securities to be remarketed at par and that provides a secondary market
liquidity mechanism for holders desiring to sell their securities. Such
securities will be remarketed pursuant to an agreement under which the
broker-dealers will be obligated to use "best efforts" to remarket the
securities. In the event that they cannot be remarketed, FGIC-SPI will be
obligated, pursuant to a standby purchase agreement or similar contractual
arrangement with the issuer, remarketing agent, tender agent or trustee of
the securities, to purchase unremarketed securities, from the holders
desiring to tender their securities (the "put option") or upon certain other
events. This facility will assure the holders of liquidity for their
securities even when market conditions preclude successful remarketing.
The proposed structure may also be used in connection with concurrent
offerings of variable rate demand securities ("VRDNs") and convertible
inverse floating rate securities ("INFLOs"). VRDNs and INFLOs are municipal
derivative securities pursuant to which (i) the interest rate on the VRDNs
is a variable interest rate which is re-set by the remarketing agent from
time to time (not to exceed a stated maximum rate) (the "VRDN Rate") and (ii)
the interest rate on the INFLOs is concurrently re-set at a rate equal to
twice a specified Linked Rate minus the fee charged by FGIC-SPI for the
Liquidity Facility. The owners of VRDNs have the optional right to tender
their VRDNs to the issuer for purchase and, in the event the remarketing
agent does not successfully remarket the tendered VRDNs, FGIC-SPI is
obligated to pay the purchase price therefor pursuant to the terms of its
liquidity facility.
If an owner of INFLOs desires a fixed rate of interest not subject to
fluctuation based on the inverse floating rate equation described above, he
may elect to purchase from VRDN holders an amount of VRDNs equal to the
principal amount of INFLOs for which such holder desires a fixed rate of
interest. The net effect of such purchase is to "link" an equal principal
amount of VRDNs and INFLOs and thereby set a fixed interest rate on the
combined securities. If the owner of such combined securities so elects, he
may "de-link" his VRDNs and INFLOs. The remarketing agent will then remarket
the VRDNs at a re-set interest rate and the INFLOs retained by the de-linking
owner will again continue to vary and to be re-set whenever the interest rate
of the VRDNs are re-set. An INFLOs owner may also elect to permanently link
his INFLOs with an equal principal amount of VRDNs and thereby permanently
fix the interest rate on the combined securities to their stated maturity;
once permanent linkage is effected, no subsequent de-linkage is permitted.
Until such time as VRDNs are permanently linked to INFLOs, the VRDNs will
remain subject to remarketing in the manner noted above and FGIC-SPI will
remain obligated to purchase unremarketed VRDNs in connection with the
optional right of holders to tender their VRDNs for purchase.
The fees for providing the liquidity mechanism will be paid by the issuer
or other entity specified in the applicable Prospectus Supplement, typically
over the life of the liquidity agreement or, in the case of VRDNs, until such
time as a VRDN is permanently linked with an INFLO. Except as otherwise
provided in a Prospectus Supplement, in order to obtain funds to purchase
unremarketed securities, FGIC-SPI will enter into standby loan agreements
with one or more financial institutions (the "Standby Lenders") under which
the Standby Lenders will be irrevocably obligated to lend funds to FGIC-SPI
as needed to purchase Securities for which the put option has been exercised.
Except as otherwise provided in a Prospectus Supplement, the standby purchase
agreement or similar contractual agreement between FGIC-SPI and the trustee,
issuer or other specified entity will provide that, without the consent of
the issuer and the trustee for the security holders, FGIC-SPI will not agree
or consent to any amendment, supplement or modification of the related
standby loan agreement, nor waive any provision thereof, if such amendment,
supplement, modification or waiver would materially adversely affect the
issuer or other specified entity, or the security holders. Except as
otherwise provided in a Prospectus Supplement, the obligations of FGIC-SPI
under the standby purchase agreement or similar contractual agreement may
only be terminated upon the occurrence of certain events of non-payment,
default or insolvency on the part of the issuer or other specified entity.
In the event of a termination of the obligations of FGIC-SPI under the
standby purchase agreement or similar contractual agreement, the securities
will be subject to a mandatory tender. Prior to such time, security holders
will have the option to tender their securities, all as set forth in the
applicable Prospectus Supplement.
The above structure is intended to receive the highest ratings from the
rating agencies and to provide public issuers with the lowest cost of
financing. There can be no assurances, however, that such ratings will be
maintained.
THE COMPANY
FGIC-SPI was incorporated in 1990 in the State of Delaware. All
outstanding capital stock of FGIC-SPI is owned by FGIC Holdings, Inc., a
Delaware corporation.
Unless otherwise specified in a Prospectus Supplement, the business of
FGIC-SPI consists and will consist of providing liquidity for certain
adjustable and floating rate Securities issued by municipal authorities or
other issuers through "liquidity facilities". The securities are typically
remarketed by registered broker-dealers at par on a periodic basis to
establish the applicable interest rate for the next interest period and to
provide a secondary market liquidity mechanism for security holders desiring
to sell their securities. Pursuant to standby purchase agreements or similar
contractual agreements with issuers of the securities, FGIC-SPI will be
obligated to purchase unremarketed securities from the holders thereof who
voluntarily or mandatorily tender their Securities for purchase. In order
to obtain funds to purchase the Securities, FGIC-SPI will enter into one or
more standby loan agreements with Standby Lenders under which the Standby
Lenders will be irrevocably obligated to lend funds as needed to FGIC-SPI to
purchase Securities as required.
FGIC-SPI's principal executive offices are located at 115 Broadway, New
York, New York 10006, Telephone No. (212) 312-3000.
THE LIQUIDITY FACILITIES
The Obligations will rank equally with all other general unsecured and
unsubordinated obligations of FGIC-SPI. The Obligations are not issued
pursuant to an indenture.
Registered owners of the Securities will be entitled to the benefits and
subject to the terms of the applicable Liquidity Facility as specified in the
Prospectus Supplement. Pursuant to the Liquidity Facilities, FGIC-SPI will
agree to make available to a specified intermediary, upon receipt of an
appropriate demand for payment, the purchase price for the Securities to
which such Liquidity Facility relates. The obligation of FGIC-SPI under each
Liquidity Facility will be sufficient to pay a purchase price equal to the
principal of the Security to which such facility relates and up to a
specified amount of interest at a specified rate set forth in the applicable
Prospectus Supplement.
THE STANDBY LOAN AGREEMENT
In order to obtain funds to fulfill its obligations under the Liquidity
Facilities, FGIC-SPI will enter into one or more Standby Loan Agreements with
one or more Standby Lenders under which the Standby Lenders will be
irrevocably obligated to lend funds to FGIC-SPI as needed to purchase the
Securities to which the applicable Liquidity Facility relates. Each Standby
Loan Agreement will have the terms set forth in the applicable Prospectus
Supplement. It is anticipated that each loan under a Standby Loan Agreement
will be in an amount not exceeding the purchase price for the Securities
tendered by the holders which will represent the outstanding principal amount
of such securities, premium, if any, and accrued interest thereon for a
specified period. The proceeds of each loan shall be used only for the
purpose of paying the purchase price for tendered Securities. It is not
anticipated that a Standby Lender will guarantee the Securities to which its
Standby Loan Agreement relates or FGIC-SPI's obligation under any Standby
Purchase Agreement. Standby Lenders will be identified in the appropriate
Prospectus Supplement.
PLAN OF DISTRIBUTION
The Obligations will not be sold separately from the Securities, which
will be offered pursuant to a separate prospectus, official statement or
offering circular. In the event that Kidder, Peabody & Co., Incorporated,
an affiliate to FGIC-SPI and FGIC Corporation, participates in the
distribution of the Obligations and related Securities, such distribution
will conform to the requirements set forth in the applicable sections of
Schedule E to the By-Laws of the National Association of Securities Dealers,
Inc.
LEGAL MATTERS
The legality of the Obligations has been passed upon for FGIC-SPI by
Brown & Wood LLP, One World Trade Center, New York, New York 10048.
EXPERTS
The financial statements of FGIC Securities Purchase, Inc. at December
31, 1995 and 1994, and for each of the years in the three-year period ended
December 31, 1995 appearing in FGIC Securities Purchase, Inc.'s Annual Report
(Form 10-K) for the year ended December 31, 1995 incorporated by reference
herein, have been incorporated by reference herein in reliance upon the
report of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
------------------------------------ -----------------------------------
No dealer, salesman or any other
individual has been authorized to
give any information or to make any
representations other than those $80,000,000
contained in this Prospectus in
connection with the offer made by principal amount
this Prospectus, and, if given or plus interest and premium,
made, such information or if any
representations must not be relied
upon as having been authorized by LIQUIDITY FACILITY OBLIGATIONS
FGIC-SPI. This Prospectus does not
constitute an offer or solicitation
by anyone in any jurisdiction in
which an offer or solicitation is not
authorized or in which the person
making such offer or solicitation is
not qualified to do so or to anyone
to whom it is unlawful to make such
offer or solicitation.
---------
issued by
TABLE OF CONTENTS
FGIC Securities
Purchase, Inc.
Page
----
PROSPECTUS SUPPLEMENT in support of
Documents Incorporated By
Reference . . . . . . . . . S-2 Dade County Expressway Authority
Introduction . . . . . . . . S-2 (Florida)
Description of the Series 1996 Toll System Revenue Bonds,
Bonds . . . . . . . . . . . S-2 Series 1996 (Taxable)
The FGIC-SPI Liquidity Facility S-13
The Standby Loan Agreement; GE
Capital . . . . . . . . . . . S-14 ---------------
Experts . . . . . . . . . . . S-15
PROSPECTUS PROSPECTUS SUPPLEMENT
Available Information . . . . . 2
Documents Incorporated By
Reference . . . . . . . . . . 3 ---------------
Summary . . . . . . . . . . . . 4
The Company . . . . . . . . . . 5
The Liquidity Facilities . . . 5 December 6, 1996
The Standby Loan Agreement . . 5
Plan of Distribution . . . . . 6
Legal Matters . . . . . . . . . 6
Experts . . . . . . . . . . . . 6
------------------------------------ -----------------------------------
