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 June 30, 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 August 14, 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 For The Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Liquidity fee Income $2,940,090 $3,446,315 $6,009,933 $6,437,503
Investment Income - 72,894 1,414 142,167
__________ __________ ___________ __________
Total Revenues 2,940,090 3,519,209 6,011,347 6,579,670
Gen. & Admin. expenses 83,100 257,679 154,649 458,677
__________ __________ ___________ __________
Income before provision 2,856,990 3,261,530 5,856,698 6,120,993
for income taxes __________ __________ ___________ __________
Provisions for
income taxes
Federal 925,408 1,055,920 1,896,106 1,981,672
State and Local 214,380 244,615 439,252 459,074
__________ __________ ___________ __________
Total provisions for 1,139,788 1,300,535 2,335,358 2,440,746
income taxes __________ __________ ___________ __________
Net income $1,717,202 $1,960,995 $3,521,340 $3,680,247
__________ __________ ___________ __________
<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 June 30, December 31,
1996 1995
___________ ____________
(Unaudited)
<S> <C> <C>
Short-term investments $ 109,277 $ 107,863
Liquidity fees receivable 2,906,189 2,928,617
Due from affiliates 18,768,733 12,556,461
Deferred tax asset 1,499,346 1,314,773
Other assets 323,679 323,679
____________ ____________
Total assets $23,607,224 $17,231,393
____________ ____________
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDER'S EQUITY
<S> <C> <C>
Liabilities:
Deferred liquidity fee income $ 533,510 $ 353,348
Due to Financial Guaranty Insurance Co. 72,440 31,069
Commitment fees payable to GE Capital 552,829 464,729
Accounts payable and accrued expenses 256,522 231,596
Taxes payable 15,979,773 13,459,841
__________ __________
Total liabilities 17,395,074 14,540,583
__________ __________
Stockholder's Equity:
Common stock, par value $10.00 per share;
10 shares authorized,issued and outstanding 100 100
Retained earnings 6,212,050 2,690,710
__________ __________
Total stockholder's equity 6,212,050 2,690,810
__________ __________
Total liabilities and stockholder's equity $23,607,224 $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 Six Months Ended
June 30,
1996 1995
_________ _________
<S> <C> <C>
Operating activities:
Net income $3,521,340 $3,680,247
Adjustments to reconcile net
income to net cash provided by
operating activities:
Deferred income tax expense (184,573) (210,236)
Change in taxes payable 2,519,932 2,650,983
Change in due from affiliates (6,212,272) (365,536)
Change in due to affiliates 41,371 294,591
Change in liquidity fees receivable 22,428 (1,337,535)
Change in deferred liquidity fee income 180,162 162,367
Change in Other Assets (70,000)
Change in accounts payable
and accrued expenses 24,926 (83,248)
Change in commitment fees
payable to GE Capital 88,100 141,601
__________ __________
Cash provided by operating activities 1,414 4,863,234
__________ _________
Financing activities:
Dividend paid - (2,500,000)
__________ ____________
Cash used by financing activities - (2,500,000)
__________ ____________
Net change in cash and cash equivalents 1,414 2,363,234
__________ ____________
Cash and cash equivalents
at beginning of period 107,863 11,001,794
________ ____________
Cash and cash equivalents
at end of period $109,277 $13,365,028
_________ ____________
<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
June 30, 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 June 30, 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 June 30, 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
six months ended June 30, 1996 and 1995, (b) the financial
position at June 30, 1996 and December 31, 1995, and (c) cash flows
for the six months ended June 30, 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
June 30, 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. For the six months ended June 30, 1996, FGIC-SPI
earned liquidity fees of $6,009,933 compared to $6,437,503 for the
six months ended 1995. FGIC-SPI incurred $154,649 and $458,677 of
general and administrative expenses for the six months ended June 30,
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 1996. The expenses incurred primarily
include fees associated with establishing the liquidity facilities.
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. For the second quarter of 1996, FGIC-SPI earned
liquidity fees of $2,940,090 compared to $3,446,315 for the three
months ended June 30, 1995. FGIC-SPI incurred $83,100 and $257,679 of
general and administrative expenses for the three months ended June
30, 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 second 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 14, 1996 ____________________
Ann C. Stern
President (principal
executive officer)
August 14, 1996 ____________________
Christopher Jacobs
Treasurer (principal
financial and
accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Jun-30-1996
<CASH> 0
<SECURITIES> 109277
<RECEIVABLES> 21674922
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 21784199
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 23607224
<CURRENT-LIABILITIES> 881791
<BONDS> 0
<COMMON> 100
0
0
<OTHER-SE> 6212050
<TOTAL-LIABILITY-AND-EQUITY> 23607224
<SALES> 6009933
<TOTAL-REVENUES> 6011347
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 154649
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5856698
<INCOME-TAX> 2335358
<INCOME-CONTINUING> 3521340
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3521340
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
