UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT
Under Section 13 or 15(d) of the Securities Exchange Act of 1934
FOR THE QUARTER ENDED March 31, 1996
Commission File No. 0-19564
FGIC SECURITIES PURCHASE, INC.
A Delaware Corporation
IRS Employer Identification No. 13-3633082
115 Broadway, New York, New York 10006
Telephone - (212) 312-3000
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No _____
Shares Outstanding
Title of Class at May 7, 1996
______________ __________________
Common Stock (voting), $10.00 par value 10
Registrant meets the conditions set forth in general instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced
disclosure format.
<PAGE>
<TABLE>
FGIC Securities Purchase, Inc.
(a wholly-owned subsidiary of FGIC Holdings, Inc.)
Statements of Operations
(Unaudited)
<CAPTION>
For the Three Months Ended
March 31,
1996 1995
---------- ----------
<S> <C> <C>
Liquidity fee income $3,069,843 $2,991,188
Investment income 1,414 69,273
__________ __________
Total revenues 3,071,257 3,060,461
General and administrative
expenses 71,549 200,998
__________ __________
Income before provision for income taxes 2,999,708 2,859,463
__________ __________
Provision for income taxes:
Federal 970,698 925,751
State and local 224,872 214,460
__________ __________
Total provision for income taxes 1,195,570 1,140,211
__________ __________
Net income $1,804,138 $1,719,252
__________ __________
<FN>
See accompanying notes to interim financial statements.
</TABLE>
<PAGE>
<TABLE>
FGIC Securities Purchase, Inc.
(a wholly-owned subsidiary of FGIC Holdings, Inc.)
Balance Sheets
<CAPTION>
ASSETS March 31, December 31,
1996 1995
___________ ____________
(Unaudited)
<S> <C> <C>
Short-term investments $ 109,277 $ 107,863
Liquidity fees receivable 2,979,276 2,928,617
Due from affiliates 15,749,052 12,556,461
Deferred tax asset 1,409,655 1,314,773
Other assets 323,679 323,679
____________ ____________
Total assets $20,570,939 $17,231,393
____________ ____________
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDER'S EQUITY
<S> <C> <C>
Liabilities:
Deferred liquidity fee income $ 526,754 $ 353,348
Due to Financial Guaranty Insurance Co. 39,470 31,069
Commitment fees payable to GE Capital 510,949 464,729
Accounts payable and accrued expenses 248,524 231,596
Taxes payable 14,750,294 13,459,841
__________ __________
Total liabilities 16,075,991 14,540,583
__________ __________
Stockholder's Equity:
Common stock, par value $10.00 per share;
10 shares authorized,issued and outstanding 100 100
Retained earnings 4,494,848 2,690,710
__________ __________
Total stockholder's equity 4,494,948 2,690,810
__________ __________
Total liabilities and stockholder's equity $20,570,939 $17,231,393
___________ ___________
<FN>
See accompanying notes to interim financial statements.
</TABLE>
<PAGE>
<TABLE>
FGIC Securities Purchase, Inc.
(a wholly-owned subsidiary of FGIC Holdings, Inc.)
Statements of Cash Flows
(Unaudited)
<CAPTION>
For the Three Months Ended
March 31,
1996 1995
_________ _________
<S> <C> <C>
Operating activities:
Net income $1,804,138 $1,719,252
Adjustments to reconcile net
income to net cash provided by
operating activities:
Deferred income tax expense (94,882) (91,379)
Change in taxes payable 1,290,453 1,231,590
Change in due from affiliates (3,192,591) 134,464
Change in due to affiliates 8,401 1,747,712
Change in liquidity fees receivable (50,659) (912,517)
Change in deferred liquidity fee income 173,406 56,778
Change in accounts payable
and accrued expenses 16,928 (91,439)
Change in commitment fees
payable to GE Capital 46,220 46,622
__________ __________
Cash provided by operating activities 1,414 3,841,083
__________ _________
Financing activities:
Dividend paid - (1,500,000)
__________ ____________
Cash used by financing activities - (1,500,000)
__________ ____________
Net change in cash and cash equivalents 1,414 2,341,083
__________ ____________
Cash and cash equivalents
at beginning of period 107,863 11,001,794
________ ____________
Cash and cash equivalents
at end of period $109,277 $13,342,877
_________ ____________
<FN>
See accompanying notes to interim financial statements.
</TABLE>
<PAGE>
FGIC Securities Purchase, Inc.
(a wholly-owned subsidiary of FGIC Holdings, Inc.)
Notes to Interim Financial Statements
March 31, 1996
(Unaudited)
(1) Business
--------
FGIC Securities Purchase, Inc. ("FGIC-SPI") is a wholly-owned
subsidiary of FGIC Holdings, Inc. (the "Parent") which, in turn,
is wholly-owned by General Electric Capital Corporation
("GE Capital"). FGIC-SPI provides liquidity for certain floating
rate municipal securities whereby FGIC-SPI will, under certain
circumstances, purchase such securities in the event they are tendered
by the holders thereof as permitted under the terms of the respective
bond indentures. As of March 31, 1996, FGIC-SPI had approximately
$2.8 billion (par and interest) of potential obligations under such
arrangements. In order to obtain funds to purchase the securities,
FGIC-SPI has entered into standby loan agreements with GE Capital
totaling $4.0 billion at March 31, 1996, under which GE Capital will
be irrevocably obligated to lend funds as needed for FGIC-SPI to
purchase the securities.
(2) Significant Accounting Policies
-------------------------------
The interim financial statements of FGIC-SPI in this report reflect
all normal recurring adjustments necessary, in the opinion of
management, for a fair statement of (a) results of operations for the
three months ended March 31, 1996 and 1995, (b) the financial
position at March 31, 1996 and December 31, 1995, and (c) cash flows
for the three months ended March 31, 1996 and 1995.
These interim financial statements should be read in conjunction with
the financial statements and related notes included in the 1995
audited financial statements.
Significant accounting policies are as follows:
Short Term Investments
----------------------
Short-term investments are carried at cost which approximates market
value. For purposes of the statements of cash flows, FGIC-SPI
considers all highly liquid investments with original maturities of
three months or less to be cash equivalents.
Revenue Recognition
-------------------
Fees are paid up-front and in installments. Up-front fees are earned
on a straight-line basis over the life of the liquidity commitment,
and installment fees are earned straight-line over the installment
period.
<PAGE>
Notes to Financial Statements (Continued)
Fair Values of Financial Instruments
------------------------------------
The carrying amounts of FGIC-SPI's financial instruments, relating
primarily to short term investments and liquidity fees, approximate
their fair values.
SEC Registration Fees
---------------------
SEC Registration fees are recognized as prepaid assets and are
expensed as FGIC-SPI is reimbursed for such fees by issuers as
transactions are consummated.
Reserve for Losses
------------------
It is management's policy to establish a reserve for losses based
upon its estimate of the ultimate aggregate losses relative to its
obligations under the liquidity facility arrangements written. At
March 31, 1996, management does not anticipate any losses relative
to such arrangements.
Reclassifications
-----------------
Certain prior period balances have been reclassified to conform with
the current year presentation.
(3) Income Taxes
-----------------
Under an intercompany tax-sharing agreement with its parent, FGIC-SPI
is included in the consolidated Federal income tax returns filed by
GE Capital. FGIC-SPI provides for taxes as if it filed a separate
tax return in accordance with SFAS No. 109.
<PAGE>
FGIC Securities Purchase, Inc.
(a wholly-owned subsidiary of FGIC Holdings, Inc.)
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 1996
Liquidity fees are received up-front at the inception of the contract
and in installments over the life of the contract. Up-front fees are
earned on a straight-line basis over the life of the liquidity
commitment, and installment fees are earned straight-line over the
installment period. In the first quarter of 1996, FGIC-SPI earned
liquidity fees of $3,069,843 compared to $2,911,188 in the first
quarter of 1995. FGIC-SPI incurred $71,549 and $200,998 of general and
administrative expenses for the month ended March 31, 1996 and 1995,
respectively. The reduction in general and administrative expenses is
primarily due to a decrease in the number of new facilities closed
during the first quarter of 1996. The expenses incurred primarily
include fees associated with establishing the liquidity facilities.
<PAGE>
PART II - Other Information
Item 1. Legal Proceedings
FGIC-SPI is not involved in any pending legal proceedings.
Item 2. Changes in Securities
Omitted.
Item 3. Defaults on Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
Omitted.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit 27. Financial Data Schedule
b) Reports on Form 8-K
None.
<PAGE>
FGIC Securities Purchase, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
FGIC SECURITIES PURCHASE, INC.
______________________________
(Registrant)
August 13, 1996 ____________________
Ann C. Stern
President (principal
executive officer)
August 13, 1996 ____________________
Christopher Jacobs
Treasurer (principal
financial and
accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Mar-31-1996
<CASH> 0
<SECURITIES> 109277
<RECEIVABLES> 18728328
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 18837605
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 20570939
<CURRENT-LIABILITIES> 798943
<BONDS> 0
<COMMON> 100
0
0
<OTHER-SE> 4494848
<TOTAL-LIABILITY-AND-EQUITY> 20570939
<SALES> 3069843
<TOTAL-REVENUES> 1414
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 71549
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2999708
<INCOME-TAX> 1195570
<INCOME-CONTINUING> 1804138
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1804138
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
