Preliminary Prospectus Supplement, Dated November 29, 1996
PROSPECTUS SUPPLEMENT
(To Prospectus dated November 29, 1996)
$85,000,000
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 to no more than days 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 , 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.
----------------
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
<TABLE>
<CAPTION>
<S> <C> <C>
DOUGLAS JAMES SECURITIES, INC. FIRST SOUTHWEST COMPANY PRUDENTIAL SECURITIES INCORPORATED
</TABLE>
SMITH BARNEY INC. WILLIAM R. HOUGH & CO.
----------------------------------------
The date of this Prospectus Supplement is December , 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 $85,000,000 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 , 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 , 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 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 to no
more than days, 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 102% declining by 1% on each
Date succeeding anniversary of the tenth
anniversary of the Conversion Date
until reaching 100% and thereafter at
100%
More than seven but not more Seventh anniversary of 102% declining by 1% on each
than fifteen Conversion Date succeeding anniversary of the seventh
anniversary of the Conversion Date
until reaching 100% and thereafter at
100%
More than seven but not more Seventh anniversary of 102% declining by 1% on each
than ten Conversion Date succeeding anniversary of the seventh
anniversary of the Conversion Date
until reaching 100% and thereafter at
100%
More than five but not more than Fourth anniversary of 101% declining by 1% on the next
seven Conversion Date 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.
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
---- ------
1998 $
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019*
- --------------------
* 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
$ 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 to no more than days 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 , 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>
MODE INTEREST RATE DATE ON WHICH NOTICE NOTICE
PAYMENT DATE DETERMINATION RATE BECOMES OF RATE PERIOD FOR
AND DATE EFFECTIVE TENDER
RECORD DATE
<S> <C> <C> <C> <C> <C>
DAILY RATE Interest: 1st Business Daily Rate determined Each Business Day Daily Rate Telephone notice
MODE Day of each calendar between 8:30 a.m. and 10:00 available from not later than 10:30
month a.m. on the commencement Tender Agent a.m. on Purchase
Record: The Business date upon request Date
Day immediately prior to
Interest Payment Date
WEEKLY RATE Interest: 1st Business Weekly Rate determined not Each Thursday, Weekly Rate Written notice not
MODE Day of each calendar less than 4:00 p.m. on except that in available from later than 5:00 p.m.
month Wednesday, or if such the case of a Tender Agent on a Business Day
Record: The Business Wednesday not a Business conversion from upon request not less than 7 days
Day immediately prior to Day, the last Business Day a different before the Purchase
Interest Payment Date preceding the Variable Rate Date
commencement date on the Weekly
Rate Conversion
Date
MONTHLY RATE Interest: 1st Business (A) Preliminary Monthly 1st Business Day Written notice Written notice not
MODE Day of each calendar Rate determined not later of each calendar from Bond later than 5:00 p.m.
month than 4:00 p.m. on the last month Registrar to on a Business Day
Record: Last Business Business day which is at registered not less than 7 days
Day at least 5 days prior least 8 days preceding the owner not later before Interest
to Interest Payment Date commencement date and (B) than 5:00 p.m. Payment Date
actual monthly Rate on the 3rd
determined not later than Business Day
4:00 p.m. on the Business following date
Day immediately preceding of determination
the commencement date
QUARTERLY Interest: 1st Business (A) Preliminary Quarterly Initially, the Written notice Written notice not
RATE MODE Day of the calendar Rate determined not later Quarterly Rate from Bond later than 5:00 p.m.
month following the than 4:00 p.m. on the last Conversion Date Registrar to on a Business Day
Quarterly Rate Business Day which is at and subsequently registered not less than 7 days
Conversion Date and least 15 days preceding the on the 1st owner not later before Interest
subsequently on the 1st commencement date and (B) Business Day of than 5:00 p.m. Payment Date
Business Day of each 3rd actual Quarterly Rate 3rd calendar on the 3rd
calendar month thereafter determined not later than month thereafter Business Day
Record: 15th day of 4:00 p.m. on the Business following date
calendar month Day immediately preceding of determination
immediately preceding the commencement date
Interest Payment Date
SEMIANNUAL Interest: 1st Business (A) Preliminary Semiannual Initially, the Written notice Written notice
RATE MODE Day of the 6th month Rate determined not later Semiannual Rate from Bond not later than
following the Semi-annual than 4:00 p.m. on the last Conversion Date Registrar to 5:00 p.m. on a
Rate Conversion Date and Business Day which is at and subsequently registered Business Day
subsequently on the 1st least 30 days immediately on the 1st owner not later not less than
Business Day of each 6th preceding the Business Day of than 5:00 p.m. 15 days before
calendar month thereafter commenced date and (B) each 6th calendar on the 3rd Interest
Record: 15th day of actual Semiannual Rate month thereafter Business Day Payment Date
calendar month determined not later than following date
immediately preceding 4:00 p.m. on the Business of determination
Interest Payment Date Day immediately preceding
the commencement date
EXTENDED Interest: 1st Business (A) Preliminary Extended Initially, the Written notice Written notice
RATE MODE Day of the 6th month Rate determined by 4:00 Extended Rate from Bond not later than
following the Extended p.m. on the last Business Conversion Date Registrar to 5:00 p.m. on a
Rate Conversion Date and Day which is at least and subsequently registered Business Day
subsequently on the first 30 days immediately on the 1st owner not later not less than
Business Day of each 6th preceding the commencement Business Day than 5:00 p.m. 15 days before
calendar month thereafter date and (B) actual of the calendar on the 3rd Purchase Date
Record: 15th day of Extended Rate determined month following Business Day
calendar month not later than 4:00 p.m. the last day of following date
immediately preceding on the Business Day the prior Rate of
Interest Payment Date immediately preceding Period and determination
the commencement date extend for 1 year
or integral
multiples of 6
months in excess
of 1 year set by
the Remarketing
Agent
FIXED RATE Interest: 1st day of each (A) Preliminary Fixed Rate (A) If conversion N/A N/A
MODE January and July determined on a Business from Variable Rate
Day at least 35 days prior Mode other than
Record: 15th day of to the Fixed Rate Conversion Extended Rate Mode
calendar month Date and (B) Fixed Rate the Interest
immediately preceding determined by 3:30 p.m. not Payment Date for
Interest Payment Date later than the last Business the Bonds and (B)
Day which is at least 5 days if conversion from
prior to Fixed Rate Extended Rate Mode
Conversion Date an Interest
Payment Date on
which a new
Extended Rate
Period would
otherwise have
commenced for the
Bonds
(table continued)
<CAPTION>
MODE CONVERSION CONVERSION PAYMENT
DATE DATE FOR BONDS
(when converting NOTICE TO TENDERED
from the Stated BONDHOLDERS
Rate Period)
<S> <C> <C> <C>
DAILY RATE Interest Payment Date Not less than 30 days Before 4:00 p.m. on
MODE before Conversion Date Purchase Date in
immediately available
funds
WEEKLY RATE Interest Payment Date Not less than 30 days Before 4:00 p.m. on
MODE before Conversion Date Purchase Date in
immediately available
funds
MONTHLY RATE Interest Payment Date Not less than 30 days Before 4:00 p.m. on
MODE before Conversion Date Purchase Date in
immediately available
funds
QUARTERLY Interest Payment Date Not less than 30 days Before 4:00 p.m. on
RATE MODE before Conversion Purchase Date in
Date immediately available
funds
SEMIANNUAL Interest Payment Date Not less than 30 days Before 4:00 p.m. on
RATE MODE before Conversion Date Purchase Date in
immediately available
funds
EXTENDED Interest Payment on Not less than 30 days Before 4:00 p.m. on
RATE MODE which new Extended Rate before Conversion Date Purchase Date in
Period would otherwise immediately available
have commenced funds
FIXED RATE N/A N/A N/A
MODE
</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.
"Monthly Rate" means the interest rate determined for a Monthly Rate
Period pursuant to the Indenture.
"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.
"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 November , 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 $85,000,000
individual has been authorized to
give any information or to make principal amount
any representations other than plus interest and premium,
those contained in this Prospectus if any
in connection with the offer made
by this Prospectus, and, if given LIQUIDITY FACILITY OBLIGATIONS
or made, such information or
representations must not be relied
upon as having been authorized by
FGIC-SPI. This Prospectus does
not constitute an offer or
solicitation by anyone in any issued by
jurisdiction in which an offer or
solicitation is not authorized or
in which the person making such
offer or solicitation is not FGIC Securities
qualified to do so or to anyone to Purchase, Inc.
whom it is unlawful to make such
offer or solicitation.
in support of
Dade County Expressway Authority
---------------- (Florida)
Toll System Revenue Bonds,
Series 1996 (Taxable)
TABLE OF CONTENTS
Page
---- ------------------
PROSPECTUS SUPPLEMENT PROSPECTUS SUPPLEMENT
Documents Incorporated
By Reference . . . . . . . . S-2 ------------------
Introduction . . . . . . . . S-2
Description of the Series
1996 Bonds . . . . . . . . . S-2 December , 1996
The FGIC-SPI Liquidity
Facility . . . . . . . . . . S-12
The Standby Loan Agreement;
GE Capital . . . . . . . . . S-14
Experts . . . . . . . . . . . S-15
PROSPECTUS
Available Information . . . . . 2
Documents Incorporated
By Reference . . . . . . . . . 3
Summary . . . . . . . . . . . . 4
The Company . . . . . . . . . . 5
The Liquidity Facilities . . . 5
The Standby Loan Agreement . . 5
Plan of Distribution . . . . . 6
Legal Matters . . . . . . . . . 6
Experts . . . . . . . . . . . . 6
