PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus dated February 12, 1998)
$49,900,000
PRINCIPAL AMOUNT PLUS INTEREST
LIQUIDITY FACILITY
OF
FGIC SECURITIES PURCHASE, INC.
IN SUPPORT OF
DALLASTOWN AREA SCHOOL DISTRICT
YORK COUNTY, PENNSYLVANIA
GENERAL OBLIGATION BONDS, SERIES OF 1998
Date of 1998 Bonds: Date of delivery Due: February 1, 2018
The 1998 Bonds will continue to bear interest at a Weekly Rate unless a
change in the interest rate mode occurs as described herein. The 1998 Bonds are
subject to mandatory and optional redemption prior to maturity and to mandatory
tender for purchase, as described herein. Payment of the purchase price equal to
100% of the principal amount plus accrued interest on the 1998 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 if 1998 Bonds
are purchased on a Scheduled Interest Payment Date, the purchase price will not
include accrued and unpaid interest, and such interest will be paid to the
beneficial owners as of the Regular Record Date as described herein.
FGIC SECURITIES PURCHASE, INC.
The FGIC-SPI Liquidity Facility will expire on March 19, 2003 unless extended
by FGIC Securities Purchase, Inc.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMIS-
SION 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
1998 Bonds, which are being offered pursuant to a separate Official Statement.
The Obligations are not severable from the 1998 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 1998 Bonds purchased by FGIC Securities Purchase, Inc.
----------------
HOPPER SOLIDAY & CO., INC.
----------------
The date of this Prospectus Supplement is February 12, 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE OBLIGATIONS. SUCH
TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF OBLIGATIONS TO COVER
SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION."
DOCUMENTS INCORPORATED BY REFERENCE
There are hereby incorporated herein by reference the Annual Report on Form
10-K for the year ended December 31, 1996 and the Quarterly Reports on Form 10-Q
for the fiscal quarters ended March 29, 1997, June 28, 1997 and September 27,
1997 of General Electric Capital Corporation ("GE Capital"), both 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" or the "Liquidity
Facility Issuer") under the liquidity facility in support of $49,900,000
aggregate principal amount of General Obligation Bonds, Series of 1998 to be
issued by the Dallastown Area School District, York County, Pennsylvania (the
"School District"), on or about March 19, 1998 (the "1998 Bonds" or the
"Bonds"). The proceeds from the sale of the 1998 Bonds will be used for and
toward the construction, renovation and improvement of various public school
facilities of the School District. FGIC-SPI will enter into a Standby Bond
Purchase Agreement (the "FGIC-SPI Liquidity Facility") with Dauphin Deposit Bank
and Trust Company (the "Paying Agent" and the "Tender Agent"), pursuant to which
FGIC-SPI will be obligated under certain circumstances to purchase unremarketed
Bonds from the Owners 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 February 15, 2003 unless extended
by FGIC-SPI or sooner terminated in accordance with its terms.
Capitalized terms used and not otherwise defined herein have the meanings
assigned to them in Appendix B hereof.
1998 BONDS
GENERAL DESCRIPTION
The following is a summary of certain provisions of the 1998 Bonds, which
are summarized in the material below, entitled "SUMMARY OF INTEREST RATE MODES."
Reference is made to the 1998 Bonds and to the Resolution for the detailed
provisions of the 1998 Bonds.
The 1998 Bonds are being issued in the principal amount and are stated to
mature on the date shown on the front cover of this Prospectus Supplement. Until
converted to another Interest Mode as described herein, the 1998 Bonds are to
bear interest from the date of their initial delivery at the Weekly Rate
determined by the Remarketing Agent as described herein. The Interest Mode for
the 1998 Bonds may be converted to a Term Mode, as described below. The interest
rate on the 1998 Bonds while in the Weekly Mode is sometimes referred to herein
as "Variable Rates." The interest rate on the 1998 Bonds in the Term Mode is
referred to as the "Fixed Rate." 1998 Bonds purchased by FGIC-SPI (the "Provider
Bonds") in accordance with the Standby Bond Purchase Agreement (the "Agreement")
will bear interest at FGIC-SPI Rate (as defined in the Standby Bond Purchase
Agreement) until such Provider Bonds are remarketed or are purchased by the
School District. Only FGIC-SPI has any right to receive interest at FGIC-SPI
Rate.
The 1998 Bonds will be issuable in book-entry form, without coupons, in the
authorized denomination of $100,000 or in any whole $5,000 multiples in excess
of $100,000. See "SUMMARY OF INTEREST RATE MODES."
The Scheduled Interest Payment Dates for interest accrued on the 1998 Bonds
(other than Provider Bonds) during the Weekly Mode is the first Business Day of
each month, and the Regular Record Date therefor is the Business Day preceding
such Scheduled Interest Payment Date. For Provider Bonds, accrued interest will
be paid on the Scheduled Interest Payment Dates and on the dates such Provider
Bonds are remarketed or are purchased by the School District. The Scheduled
Interest Payment Dates for interest accrued on 1998 Bonds during the Term Mode
is the first day of each February and August of such 1998 Bonds, as described
below, and the Regular Record Date therefor is that day (whether or not a
Business Day) which is fifteen days prior to each Scheduled Interest Payment
Date.
Interest due on the 1998 Bonds on each Scheduled Interest Payment Date is
to be paid, except as described below, by check mailed to the persons appearing
on the Regular Record Date as registered owners on the registration books kept
by the Paying Agent; provided, however, that if funds on any Scheduled Interest
Payment Date are insufficient to pay the interest then due, such defaulted
interest will cease to be payable to the registered owner as of the Regular
Record Date but will instead be payable on a Special Interest Payment Date
established by the Paying Agent for payment of such defaulted interest when
sufficient funds are available, to the registered owner as of a Special Record
Date to be established in accordance with the provisions of the Resolution. Upon
written request to the Paying Agent, on file at least fifteen (15) days prior to
the Scheduled Interest Payment Date, beneficial owners of $1,000,000 or more in
aggregate principal amount of the 1998 Bonds may elect to receive payments of
interest by wire transfer to a designated account commencing on the first
Scheduled Interest Payment Date following such Regular Record Date.
Under certain circumstances as described herein, the beneficial owner of a
1998 Bond will have the right to tender to the Tender Agent a 1998 Bond (or any
portion thereof in an authorized denomination) for purchase from and to the
extent of the sources of funds described herein at a price (the "Purchase
Price") equal to 100% of the principal amount thereof, plus accrued interest;
provided, however, that if such 1998 Bond is purchased on a Scheduled Interest
Payment Date, such Purchase Price is not to include accrued and unpaid interest,
and such interest is to be paid to the registered owner of such 1998 Bond as of
the Regular Record Date. Payment for 1998 Bonds so tendered is required to be
made in immediately available funds by 3:00 p.m., New York City time, on the
Purchase Date specified by the owner if the notice and tender requirements
described herein and as set forth in the Resolution have been strictly complied
with. Subject to the provisions described below under "BOOK-ENTRY ONLY SYSTEM,"
notices of tender are to be delivered to the Tender Agent by the beneficial
owner. See "1998 BONDS - Purchase of Tendered Bonds - Optional Tender" and
"BOOK-ENTRY ONLY SYSTEM."
Hopper Soliday & Co., Inc. has been appointed Remarketing Agent for the
1998 Bonds. The Remarketing Agent is to remarket 1998 Bonds tendered for
purchase and is to perform certain rate-setting functions in connection with the
1998 Bonds as described herein under "THE 1998 BONDS - Interest" pursuant to a
Remarketing Agreement to be dated as of the date of the initial sale of the 1998
Bonds (the "Remarketing Agreement"), between the School District and the
Remarketing Agent. See "1998 BONDS - Remarketing of the 1998 Bonds."
So long as DTC, or its partnership nominee, Cede & Co., is the registered
owner of the 1998 Bonds, payments of the principal of and interest on the 1998
Bonds, and payments of the Purchase Price of any 1998 Bonds subject to optional
or mandatory tender, are to be made by the Tender Agent directly to Cede & Co.
Disbursements of such payments to the DTC Participants (as hereinafter defined)
is the responsibility of DTC. Disbursements of such payments to the owners of
beneficial interests in the 1998 Bonds is the responsibility of the DTC
Participants and the Indirect Participants (as hereinafter defined). See
"BOOK-ENTRY ONLY SYSTEM" below.
INTEREST
GENERAL. The 1998 Bonds are being issued in the Weekly Mode. Until the
Interest Mode of the 1998 Bonds is converted to another Interest Mode as
described below, the 1998 Bonds will bear interest at the Weekly Rate which is
the Market Rate (as hereinafter defined) determined by the Remarketing Agent by
4:30 p.m., New York City time, on the Business Day preceding the initial Weekly
Rate Period, and each Wednesday thereafter, or, if any such Wednesday is not a
Business Day, on the next preceding Business Day. Each Weekly Rate Period is to
commence on a Wednesday and end on the Tuesday of the following week. The
Interest Mode of the 1998 Bonds may be converted to a Term Mode, as elected by
the School District, following which the 1998 Bonds will bear interest at such
Variable Rate or Term Rate as determined by the Remarketing Agent. Such
conversion will result in the mandatory tender for purchase of the 1998 Bonds as
described below under "Purchase of Tendered 1998 Bonds - Mandatory Tender." When
1998 Bonds bear interest at a Weekly Rate, interest will be computed on the
basis of a year of 365 days or 366 days, as appropriate, for the actual number
of days elapsed. When 1998 Bonds bear interest at a Term Rate, interest will be
computed on the basis of a year of 360 days, based upon twelve 30-day months.
THE SCHOOL DISTRICT ANTICIPATES THAT A REMARKETING MEMORANDUM OR OTHER
DISCLOSURE DOCUMENT WILL BE PREPARED IN THE EVENT THE 1998 BONDS ARE CONVERTED
TO A TERM RATE MODE AND IN THE EVENT THE 1998 BONDS ARE NOT SUPPORTED BY A
LIQUIDITY FACILITY OR ARE SUPPORTED BY AN ALTERNATE LIQUIDITY FACILITY.
Weekly Mode. In the Weekly Mode, 1998 Bonds will bear interest at the
Weekly Rate, which is the Market Rate (as hereinafter defined) determined by the
Remarketing Agent by 4:30 p.m., New York City time, on the Business day
immediately preceding the commencement of the initial Weekly Rate Period and on
each subsequent Wednesday thereafter (or, if such Wednesday is not a Business
Day, on the next succeeding Business Day). Each Weekly Rate Period is to
commence on a Thursday and end on the Wednesday of the following week. In the
case of a conversion from a Weekly Mode to a Term Mode, the last Weekly Rate
Period prior to conversion will end on the last day immediately preceding the
Conversion Date.
Term Mode. In the Term Mode, 1998 Bonds will bear interest at the Term Rate
which is the Market Rate for such Term Rate Period determined by the Remarketing
Agent, with the consent of the School District, not more than 15 days preceding
nor less than one day prior to the commencement of such Rate Period. The Term
Rate Period will be to the final maturity date of the 1998 Bonds.
WEEKLY RATE DETERMINATION. The Remarketing Agent is required to make each
determination of the "Weekly Rate" on the respective date described above for
each Weekly Mode (each a "Rate Determination Date"), such rate being the lowest
interest rate not in excess of the Maximum Interest Rate (as hereinafter
defined) that, in the judgment of the Remarketing Agent, would cause such 1998
Bonds to have a market value equal to 100 percent of the principal amount
thereof, plus accrued interest, if any, under prevailing market conditions as of
the Rate Determination Date. "Maximum Interest Rate" for the 1998 Bonds (other
than Provider Bonds) means fifteen percent (15%) per annum while the 1998 Bonds
are in the Weekly Mode, or such higher rate as may be set forth in the Liquidity
Facility for the 1998 Bonds.
If for any reason the Remarketing Agent fails to determine or to notify the
Tender Agent of the Market Rate for any 1998 Bonds on a Rate Determination Date,
or if the Market Rate for any 1998 Bonds so determined by the Remarketing Agent
on such Rate Determination Date is determined by a court of competent
jurisdiction to be invalid or unenforceable, the Market Rate for such 1998 Bonds
to be determined on such Rate Determination Date is to be determined as follows:
the Market Rate for such Rate Period will be the lesser of (i) the Maximum
Interest Rate and (ii) 65 percent of the "11 Bond Municipal Bond Index" most
recently published by The Bond Buyer or any successor publication.
Owners of 1998 Bonds may call the Remarketing Agent to obtain the interest
rates in effect for such 1998 Bonds for the Weekly Rate Period after 4:30 p.m.
on the Wednesday preceding the new Weekly Rate Period. The Tender Agent is to
inform the owners of 1998 Bonds that bear interest at a Term Rate of the rates
determined with respect to such 1998 Bonds promptly upon the determination
thereof by first class mail, postage prepaid, at least 30 days prior to the
commencement of the Term Mode.
Conversion to Term Mode. The School District is permitted to effect a
conversion of 1998 Bonds from the Weekly Mode to the Term Mode, by delivering
notice as provided in the Resolution, not fewer than 45 days prior to any
Conversion Date. The first day of any such new Term Rate Period (the "Conversion
Date"), as designated by the School District, is required to be the last
Scheduled Interest Payment Date relating to the Weekly Rate Period from which
the 1998 bonds are to be converted.
Notwithstanding the School District's delivery of notice of its exercise of
the option to effect a conversion to the Term Mode, such conversion or change in
Rate Period shall not take effect (1) if the School District withdraws such
notice not later than the Business Day preceding the date on which such Term
Rate is to be determined or if any condition to or requirement for such
conversion is not satisfied; or (2) if the School District fails to deliver to
the Tender Agent, the Paying Agent, the Bond Insurer and the Remarketing Agent
an opinion of Bond Counsel stating that the conversion is authorized under the
Resolution and will not adversely affect exclusion from gross income of interest
on the 1998 Bonds for purposes of federal income taxation or otherwise to the
effect that interest on the 1998 Bonds is excluded from gross income for
purposes of federal income taxation. In addition, such conversion shall not take
effect if the Remarketing Agent fails to determine the interest rate for the new
Term Rate Mode or, in the case of a conversion to the Term Mode, if the School
District and the Remarketing Agent do not receive from Standard & Poor's, if
such rating agency is then rating the 1998 Bonds, a letter to the effect that
such conversion will not result in a reduction or withdrawal of the then-current
rating on the 1998 Bonds. See "Purchased of Tendered 1998 Bonds - Mandatory
Tender" below.
Notice to Bondowners. The Tender Agent is required to give to Bondowners of
the 1998 Bonds written notice at least 30 days prior to the proposed Conversion
Date.
Effect of Rate Determination. Each determination of a Weekly Rate and the
determination of the Term Rate or Fixed Rate by the Remarketing Agent, shall be
conclusive and binding upon the Holders of the 1998 Bonds, the Paying Agent, the
School District, the Tender Agent and all other persons, and none of the School
District, the Paying Agent, the Tender Agent or the Remarketing Agent will have
any liability to any Holders of the 1998 Bonds for any such determination,
whether due to any error in judgment, failure to consider any information,
opinion or resource or otherwise or for failure to give any required notice or
for failure of any Holders of the 1998 Bonds to receive any such notice.
PURCHASE OF TENDERED 1998 BONDS
OPTIONAL TENDER. A Bondholder will have the right to tender 1998 Bonds (or
portions thereof in authorized denominations) for purchase on the purchase dates
and with prior notice and delivery as described below, at the Purchase Price,
but payable solely from and to the extent of proceeds of the remarketing of such
1998 Bonds, amounts drawn under the applicable Liquidity Facility and payments
made by the School District for such purpose under the Resolution. See
"Mandatory Tender" below.
Payment for 1998 Bonds so tendered is required to be made in immediately
available funds by 4:00 p.m., New York City time, on the date specified by the
Bondowner for purchase if the notice and, subject to the provisions described
under "BOOK-ENTRY ONLY SYSTEM," the tender requirements described below and as
set forth in the Resolution have been strictly complied with. Subject to the
provisions of the book-entry system, each such 1998 Bond must be endorsed in
blank or accompanied by an instrument of transfer satisfactory to the Tender
Agent executed in blank by the Bondowner.
SO LONG AS DTC IS THE REGISTERED OWNER OF THE 1998 BONDS, A BENEFICIAL
OWNER (AS HEREINAFTER DEFINED) OF 1998 BONDS IS REQUIRED TO GIVE NOTICE TO ELECT
TO HAVE ITS 1998 BONDS PURCHASED OR TENDERED, THROUGH ITS PARTICIPANT (AS
HEREINAFTER DEFINED), TO THE REMARKETING AGENT AND SHALL EFFECT DELIVERY OF SUCH
1998 BONDS BY CAUSING THE DIRECT PARTICIPANT TO TRANSFER THE PARTICIPANT'S
INTEREST IN THE 1998 BONDS, ON DTC'S RECORDS, TO THE TENDER AGENT.
WEEKLY MODE. During a Weekly Mode, 1998 Bonds may be tendered to the Tender
Agent for purchase as described above on any Business Day by delivering:
(1) a written notice (which shall be irrevocable and effective upon
receipt) to the Tender Agent and the Remarketing Agent by 5:00 p.m.,
New York City time, on a Business Day not less than five Business Days
prior to the designated Purchase Date, stating the principal amount of
such 1998 Bonds (or portion thereof in an authorized denomination)
that the Bondholder irrevocably demands be purchased, the designated
purchase date, the series designation and CUSIP number of such 1998
Bonds and the payment instructions with respect to Purchase Price, and
(2) deliver such 1998 Bonds to the Tender Agent by 1:30 p.m., New York
City time on the designated Purchase Date.
Notice of tender is to be delivered to the Tender Agent and the Remarketing
Agent by the beneficial owners of the 1998 Bonds. The determination of the
Tender Agent as to compliance with the notice and bond delivery requirements is
in the sole discretion of the Tender Agent and binding upon the Bondowner. The
Tender Agent and the Remarketing Agent may waive any irregularity or
nonconformity in any tender.
As provided in the Resolution, all notices of optional tender shall be
irrevocable. 1998 Bonds (or portions thereof), for which a notice is received
but that are not delivered in accordance with the Resolution will be deemed to
have been tendered and, upon deposit of the Purchase Price with the Tender
Agent, the owners of such undelivered 1998 Bonds will have no further rights
with respect to such 1998 Bonds (or portions thereof), other than payment of the
Purchase Price therefor. See "Undelivered Bonds. "
In accepting a notice of tender pursuant to the Resolution, the Tender
Agent and the Remarketing Agent may conclusively assume that the person
providing the notice of tender is the Beneficial Owner of the 1998 Bonds and
therefore entitled to tender them. The Tender Agent and the Remarketing Agent
assume no liability to anyone in accepting a notice of tender from a person whom
it reasonably believes to be a Beneficial Owner of the 1998 Bonds.
MANDATORY TENDER. The owners of 1998 Bonds will be required to tender, and
in any event will be deemed to have tendered, their 1998 Bonds to the Tender
Agent for purchase at the Purchase Price, but payable solely from and to the
extent of proceeds of the remarketing of such 1998 Bonds and amounts drawn under
the Liquidity Facility and payments made by the School District for such purpose
under the Resolution, on each of the following mandatory tender dates:
(1) LIQUIDITY FACILITY EXPIRATION
(a) the Scheduled Interest Payment Date (but in any case not less than 5
days) next preceding the expiration date of the Liquidity Facility for
1998 Bonds, unless on or prior to such Scheduled Interest Payment Date
the Paying Agent has received an extension of the Liquidity Facility
or an Alternate Liquidity Facility has been provided to the Paying
Agent in accordance with the terms of the Resolution; or
(b) the date of the replacement of the Liquidity Facility with an
Alternate Liquidity Facility that does not meet the requirements of an
"Alternate Liquidity Facility" described under "STANDBY BOND PURCHASE
AGREEMENT," if such replacement will result in a reduction or
withdrawal of the then-current short-term rating on the 1998 Bonds;
and
(2) UNSCHEDULED LIQUIDITY FACILITY TERMINATION: The fifteenth Business Day
after the Tender Agent receives notice that FGIC-SPI's commitment
under the Liquidity Facility will be terminated because an event of
default or a termination event has occurred under the Liquidity
Facility, if FGIC-SPI is required to give prior notice of termination
as described under "STANDBY BOND PURCHASE AGREEMENT-Effect of
Occurrence of an Event of Default".
(3) On the Conversion Date, or if such Conversion Date is not a Business
Day, the first Business Day succeeding such Conversion Date; and,
(4) On the fifteenth (15th) Business Day following the first day during
the term of the Bonds on which the "20-Bond Municipal Bond Index" (or
equivalent index) published by the Bond Buyer reaches or exceeds ten
percent (10%).
The Tender Agent is required to give notice of mandatory tender, as
provided in the Resolution, to each owner of the 1998 Bonds of the applicable
series by first-class mail at least 10 days prior to a mandatory tender date.
The Bondowners shall have no right to elect to retain Bonds that are subject to
mandatory tender.
UNDELIVERED BONDS. ANY 1998 BOND (OR PORTION THEREOF) FOR WHICH NOTICE OF
OPTIONAL OR MANDATORY TENDER HAS BEEN GIVEN IN ACCORDANCE WITH THE PROVISIONS OF
THE RESOLUTION, BUT THAT IS NOT TENDERED FOR PURCHASE BY THE REQUIRED TIME, WILL
BE DEEMED TO HAVE BEEN TENDERED AND SOLD ON THE DESIGNATED PURCHASE DATE AND,
UPON DEPOSIT IN THE PURCHASE FUND ESTABLISHED BY THE TENDER AGENT OF AN AMOUNT
SUFFICIENT TO PAY THE PURCHASE PRICE OF SUCH 1998 BOND ON SUCH PURCHASE DATE,
THE OWNER OF SUCH 1998 BOND WILL NOT BE ENTITLED TO ANY PAYMENT (INCLUDING ANY
INTEREST ACCRUED SUBSEQUENT TO SUCH DATE) IN RESPECT THEREOF OTHER THAN THE
PURCHASE PRICE FOR SUCH 1998 BOND AND ACCRUED INTEREST AS OF THE PURCHASE DATE,
UNLESS THE PURCHASE DATE IS A SCHEDULED INTEREST PAYMENT DATE IN WHICH CASE THE
OWNER OF SUCH 1998 BOND AS OF THE REGULAR RECORD DATE IS ENTITLED TO SUCH
ACCRUED INTEREST AS OF THE PURCHASE DATE. SUCH 1998 BOND WILL NO LONGER BE
ENTITLED TO THE BENEFIT OF THE INDENTURE, EXCEPT FOR THE PURPOSE OF PAYMENT OF
SUCH PURCHASE PRICE AND, EXCEPT AS DESCRIBED ABOVE, ACCRUED INTEREST AS OF THE
PURCHASE DATE.
REMARKETING
The School District and the Remarketing Agent are entering into the
Remarketing Agreement pursuant to which the School District will agree to pay to
the Remarketing Agent a fee for its services as Remarketing Agent and the
Remarketing Agent will agree, among other things, to perform the duties of the
Remarketing Agent set forth in the Resolution. The Remarketing Agreement may be
amended by the School District and the Remarketing Agent without the consents of
the Paying Agent, the Tender Agent and the 1998 Bondowners.
The Remarketing Agreement provides that the Remarketing Agent may be
removed by the School District or may resign, upon 30 days' prior notice, as
provided therein and in the Resolution. In addition, under certain circumstances
the Remarketing Agent may cease reoffering and selling the 1998 Bonds with
immediate effect. The School District has agreed in the Remarketing Agreement to
indemnify the Remarketing Agent against certain liabilities, including certain
liabilities under federal securities laws.
REDEMPTION
OPTIONAL REDEMPTION. While in the Weekly Mode, the 1998 Bonds are subject
to redemption prior to their scheduled maturity at the option of the School
District in whole, or in part by lot from time to time, on any date, at a
redemption price equal to 100% of the principal amount thereof plus interest
accrued to the date fixed for redemption.
Subject to certain conditions, including provision of an opinion of Bond
Counsel that a change in the redemption provisions of the 1998 Bonds will not
adversely affect the exclusion from gross income of interest on the 1998 Bonds
for federal income tax purposes, the foregoing redemption periods and redemption
prices may be revised effective as the date of such change. Any such revisions
of the redemption period and redemption price will not be considered an
amendment of or a supplement to the Resolution and will not require the consent
of a Bondholder or any other person or entity.
MANDATORY SINKING FUND REDEMPTION. While in the Weekly Mode, the 1998 Bonds
are subject to mandatory sinking fund redemption prior to stated maturity, on
the first Business Day in February of the years and in the principal amounts set
forth in the following schedule, as drawn by lot by the Paying Agent on behalf
of the School District.
Years Amount Years Amount
2000 1,650,000 2010 2,635,000
2001 1,725,000 2011 2,770,000
2002 1,800,000 2012 2,920,000
2003 1,885,000 2013 3,075,000
2004 1,975,000 2014 3,235,000
2005 2,070,000 2015 3,410,000
2006 2,170,000 2016 3,600,000
2007 2,275,000 2017 3,795,000
2008 2,390,000 2018* 4,010,000
2009 2,510,000
*Maturity
Any such redemption shall be upon application of the moneys available for
such purpose under the Resolution, upon payment of the redemption price equal to
100% of the principal amount thereof, together with accrued interest, if any,
from the most recent Scheduled Interest Payment Date to the date fixed for
redemption.
SELECTION OF BONDS TO BE REDEEMED. If fewer than all the 1998 Bonds are to
be redeemed, Provider Bonds will be selected for redemption prior to any other
1998 Bonds. After all Provider Bonds have been redeemed, the Paying Agent shall
select 1998 Bonds for redemption by lot or other means deemed fair and
appropriate, provided that no Bond outstanding after such redemption shall be of
a denomination less than the minimum authorized denomination of $100,000. If a
Bond is of a denomination larger than $100,000, a portion of such Bond may be
redeemed. For this purpose, the Paying Agent will consider each Bond in a
denomination larger than the minimum Authorized Denomination to be separate
Bonds each in the denomination of $5,000. In all cases, Purchased Bonds shall be
redeemed before any other 1998 Bonds are redeemed.
Upon surrender of a 1998 Bond redeemed in part, the Paying Agent will
authenticate and deliver to the surrendering holder a new 1998 Bond or 1998
Bonds in Authorized Denominations equal in aggregate principal amount to the
unredeemed portion of the 1998 Bond surrendered.
Notwithstanding anything to the contrary herein and in the Resolution,
there shall be no redemption of less than all of the 1998 Bonds if there shall
have occurred and be continuing an Event of Default.
Notice of Redemption. At least 10 days (if the 1998 Bonds are in the Weekly
Mode) and 30 days (if the 1998 Bonds are in the Term Mode) before the redemption
date of any 1998 Bonds, the Paying Agent is required to send notice by first
class mail to all registered owners of 1998 Bonds to be redeemed as a whole or
in part. Such redemption notice is to set forth certain details with respect to
the redemption in accordance with the provisions of the Resolution and state
that from the date fixed for redemption that interest will cease to accrue on
the 1998 Bonds so called for redemption. Failure to give such notice by mail to
any owner of 1998 Bonds to be redeemed, or any defect therein, will not affect
the validity of any proceedings for the redemption of any other 1998 Bonds. If
at the time of mailing of any notice of redemption (other than a mandatory
sinking fund redemption), the School District shall not have deposited with the
Paying Agent moneys sufficient to redeem all the 1998 Bonds called for
redemption, such notice shall state that it is subject to the deposit of
sufficient moneys with the Paying Agent not later than the opening of business
on the redemption date and shall be of no effect unless such moneys are so
deposited.
So long as DTC or its nominee is the registered owner of the 1998 Bonds,
any failure on the part of DTC or failure on the part of a nominee of a
Beneficial Owner (having received notice from a Participant or otherwise) to
notify the Beneficial Owner affected by any redemption of such redemption, shall
not affect the validity of the redemption. So long as DTC or its nominee is the
registered owner of the 1998 Bonds, if less than all of the 1998 Bonds are
called for redemption, the particular 1998 Bonds or portions of 1998 Bonds to be
redeemed are to be selected by lot by DTC, the Participants and Indirect
Participants in such manner as they may determine. See "BOOK-ENTRY ONLY SYSTEM"
below.
TRANSFER AND EXCHANGE
Subject to the provisions described below under "BOOK-ENTRY ONLY SYSTEM," a
1998 Bond may be transferred or exchanged only upon presentation thereof to the
Paying Agent. Such 1998 Bond must be accompanied by an endorsement duly executed
by the registered owner. No charge will be imposed in connection with any
transfer or exchange, except for taxes or governmental charges related thereto.
SUMMARY OF INTEREST RATE MODES
WEEKLY MODE
Interest Payment and Calculation First Business Day of month; on actual
days over 365/366 day year Method
Record Date Business Day preceding the Scheduled
Interest Payment Date
Authorized Denominations $100,000 and $5,000 multiples in excess
of $100,000
Rate Determination Date Business Day immediately preceding the
commencement of the Weekly Mode, and each
subsequent Wednesday thereafter of, if
not a Business Day, on the next
succeeding Business Day (by 4:30 p.m.,
New York City time)
Rate Period Period beginning Thursday of one
week and ending Wednesday of the following
week, or on the Conversion Date in the
case of a conversion to the Term Mode
Rate Adjustment Date Each Thursday
Notice of Interest Rate Owners may call the Remarketing Agent to
obtain interest rates for the week after
4:30 p.m. on the Wednesday preceding the
new Weekly Rate Period
Optional Tender Dates Any Business Day at least five Business
Days after delivery of notice
Notice of Optional Tender Irrevocable written notice of tender to
Tender Agent and Remarketing Agent not
later than 5:00 p.m., New York City
time, on any Business Day not less than
five Business Days prior to the Purchase
Date, and delivery of the 1998 Bonds
to the Tender Agent by 1:30 p.m., New
York City time on the Purchase Date
Notice of Conversion to Term Mode Tender Agent to mail notice to Bondowner
by 45th day preceding Conversion Date
TERM MODE
Interest Payment and Calculation Semiannually on the first day of each
February and August on 360-day year of
twelve 30-day months
Record Date That day (whether or not a Business
Day) which is 15 days prior to each
Scheduled Interest Payment Date
Authorized Denominations $5,000 and multiples thereof
Term Rate Determination Date A day not more than 15 days preceding
nor less than one day prior to the
Conversion Date
Term Period Final maturity date of the Bond
Rate Adjustment Date Conversion Date
Notice of Interest Rate Tender Agent to mail notice to
Bondowner promptly after Term
Rate Determination Date.
Purchase Date for Mandatory Tender Conversion Date
Notice of Conversion to Term Mode Tender Agent to mail notice to
Bondowner by 30th day preceding
Conversion Date (or shorter
period under the terms of the Resolution)
BOOK-ENTRY ONLY SYSTEM
The information set forth herein concerning The Depository Trust Company,
New York, New York ("DTC") and the book-entry system described below has been
extracted from materials provided by DTC for such purpose, is not guaranteed as
to accuracy or completeness and is not to be construed as a representation by
the School District, the Bond Counsel, the Paying Agent or the Underwriter.
DTC will serve as securities depository under a book-entry system for the
1998 Bonds. Unless such system is discontinued, the provisions described below
(including provisions regarding payments to and transfers by the owners of
beneficial interests in the 1998 Bonds) will be applicable to all the 1998
Bonds. If such system is discontinued, the provisions described under
"Discontinuation of Book-Entry Only System" will be applicable.
The ownership of one fully registered 1998 Bond will be registered in the
name of Cede & Co., as nominee for DTC. SO LONG AS CEDE & CO. IS THE REGISTERED
OWNER OF THE 1998 BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE
BONDHOLDERS, BONDOWNERS OR REGISTERED OWNERS OF THE 1998 BONDS SHALL MEAN CEDE &
CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE 1998 BONDS.
DTC is a limited-purpose trust company organized under the laws of the
State of New York, 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, as amended. DTC was created to hold securities
of its participants (the "DTC Participants") and to facilitate the clearance and
settlement of securities transactions among DTC Participants in such securities
through electronic book-entry changes in accounts of the DTC Participants,
thereby eliminating the need for physical movement of securities certificates.
DTC Participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. DTC is owned by several
DTC 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 banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a DTC Participant, either directly or indirectly (the "Indirect Participants").
Beneficial ownership interests in the 1998 Bonds may be purchased by or
through DTC Participants. Such DTC Participants and the persons for whom they
acquire interests in the 1998 Bonds as nominees (the "Beneficial Owners") will
not receive a Bond certificate, but each DTC Participant will receive a credit
balance in the records of DTC in the amount of such DTC Participant's interest
in the 1998 Bonds, which will be confirmed in accordance with DTC's standard
procedures. Beneficial Owners will not receive certificates representing their
beneficial ownership interests in the 1998 Bonds, unless use of the book- entry
only system is discontinued as described below.
Transfers of beneficial ownership interests in the 1998 Bonds which are
registered in the name of Cede & Co., as nominee of DTC, will be accomplished by
book entries made by DTC and in turn by the DTC Participants and Indirect
Participants who act on behalf of the Beneficial Owners. For every transfer and
exchange of beneficial ownership in the 1998 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.
For so long as the 1998 Bonds are registered in the name of DTC or its
nominee, Cede & Co., the School District and the Paying Agent will recognize DTC
or its nominee, Cede & Co., as the owner of the 1998 Bonds for all purposes,
including notices and voting. Conveyance of notices and other communications by
DTC to DTC Participants, by DTC Participants to Indirect Participants and by DTC
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among DTC, DTC Participants, Indirect Participants and Beneficial
Owners, subject to any statutory and regulatory requirements as may be in effect
from time to time.
Under the Resolution, payments made by the Paying Agent to DTC or its
nominee shall satisfy the payment obligations of the School District under the
Resolution.
Principal, redemption price and interest payments on the 1998 Bonds will be
made by the Paying Agent to DTC or to its nominee, Cede & Co., as registered
owner of the 1998 Bonds. Disbursement of such payments to the Beneficial Owners
is the responsibility of DTC, the DTC Participants and, where appropriate, the
Indirect Participants. Upon receipt of moneys, DTC's current practice is to
credit immediately the accounts of the DTC Participants in accordance with their
respective holdings shown on the records of DTC. Payments by DTC Participants
and Indirect Participants to Beneficial Owners will be governed by standing
instructions of the Beneficial Owners and customary practices, as is now the
case with municipal securities held for the accounts of customers in bearer form
or registered in "street name." Such payments will be the responsibility of such
DTC Participants or Indirect Participants and not of DTC, the School District or
the Paying Agent and will be subject to any statutory and regulatory
requirements as may be in effect from time to time.
A BENEFICIAL OWNER SHALL GIVE NOTICE TO ELECT TO HAVE ITS 1998 BONDS
PURCHASED OR TENDERED, TO THE TENDER AGENT AND SHALL EFFECT DELIVERY OF SUCH
1998 BONDS BY CAUSING THE DTC PARTICIPANT OR THE INDIRECT PARTICIPANT TO
TRANSFER THE DTC PARTICIPANT'S INTEREST IN THE 1998 BONDS, ON DTC'S RECORDS, TO
THE TENDER AGENT. THE REQUIREMENT FOR PHYSICAL DELIVERY OF 1998 BONDS IN
CONNECTION WITH A DEMAND FOR PURCHASE OR MANDATORY PURCHASE WILL BE DEEMED
SATISFIED WHEN THE OWNERSHIP RIGHTS IN THE 1998 BONDS ARE TRANSFERRED BY DTC
PARTICIPANTS ON DTC'S RECORDS.
THE SCHOOL DISTRICT AND THE PAYING AGENT CANNOT AND DO NOT GIVE ANY
ASSURANCES THAT DTC, THE DTC PARTICIPANTS OR THE INDIRECT PARTICIPANTS WILL
DISTRIBUTE TO THE BENEFICIAL OWNERS (1) PAYMENTS OF PRINCIPAL OR REDEMPTION
PRICE OF OR INTEREST ON THE 1998 BONDS, (2) CERTIFICATES REPRESENTING AN
OWNERSHIP INTEREST OR OTHER CONFIRMATION OF BENEFICIAL OWNERSHIP INTERESTS IN
1998 BONDS, OR (3) REDEMPTION OR OTHER NOTICES SENT TO DTC OR CEDE & CO., ITS
NOMINEE, AS THE REGISTERED OWNER OF THE 1998 BONDS, OR THAT THEY WILL DO SO ON A
TIMELY BASIS OR THAT DTC, DTC PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE
AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE CURRENT "RULES"
APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION, AND
THE CURRENT "PROCEDURES" OF DTC TO BE FOLLOWED IN DEALING WITH DTC PARTICIPANTS
ARE ON FILE WITH DTC.
THE SCHOOL DISTRICT AND THE PAYING AGENT WILL HAVE NO RESPONSIBILITY OR
OBLIGATION TO ANY DTC PARTICIPANT, INDIRECT PARTICIPANT OR BENEFICIAL OWNER OR
ANY OTHER PERSON WITH RESPECT TO: (1) THE 1998 BONDS; (2) THE ACCURACY OF ANY
RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT; (3)
THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT
DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF
OR INTEREST ON THE 1998 BONDS; (4) THE DELIVERY BY DTC OR ANY DTC PARTICIPANT OR
INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR
PERMITTED UNDER THE TERMS OF THE INDENTURE TO BE GIVEN TO BONDHOLDERS; (5) THE
SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY
PARTIAL REDEMPTION OF THE 1998 BONDS; OR (6) ANY CONSENT GIVEN OR OTHER ACTION
TAKEN BY DTC AS BONDHOLDER.
DISCONTINUATION OF BOOK-ENTRY ONLY SYSTEM
DTC may determine to discontinue providing its service with respect to the
1998 Bonds at any time by giving notice to the School District and the Paying
Agent and discharging its responsibilities with respect thereto under applicable
law. In addition, under certain circumstances set forth in the Resolution, the
School District may determine to discontinue the book-entry only system.
In the event that the book-entry only system for the 1998 Bonds is
discontinued, the provisions set forth in the Resolution would apply.
SECURITY AND SOURCES OF PAYMENT FOR THE 1998 BONDS
SECURITY FOR THE BONDS
The 1998 Bonds are general obligations of the School District and are
payable from taxes and other revenues of the School District. The taxing powers
of the School District are described more fully herein. The School District has
covenanted in the Resolution that it will provide in its budget for each fiscal
year, and will appropriate in each such year, the amount of the debt service on
the 1998 Bonds for such year and will duly and punctually pay, or cause to be
paid, the principal of every Bond and the interest thereon on the dates, at the
place and in the manner stated in the 1998 Bonds, and for such budgeting,
appropriation and payment, the School District has irrevocably pledged its full
faith, credit and taxing power.
STANDBY BOND PURCHASE AGREEMENT
The obligation, if any, of the Tender Agent to purchase all or any portion
of the Unremarketed Bonds is to be funded under the Standby Agreement between
the School District and FGIC-SPI (and GE Capital, as explained below). The
Standby Agreement does not secure scheduled principal and interest payments of
the 1998 Bonds and the obligations of FGIC-SPI thereunder are subject to several
conditions.
The commitment of FGIC-SPI will expire on March 19, 2003 (the "Stated
Expiration Date") unless earlier terminated or extended as described below. See
"Termination of the Standby Agreement" below. Under the Standby Agreement,
FGIC-SPI is liable for the purchase price of the Unremarketed Bonds to be
purchased, and the total liability of FGIC-SPI is limited to the amount of the
Available Principal Commitment plus the Available Interest Commitment. The
"Available Principal Commitment" initially is $49,900,000 and will be adjusted
from time to time as follows: (i) downward by the principal amount of any
redemption, purchase, cancellation, or other retirement of all or any portion of
1998 Bonds, or (ii) downward by the principal amount of any Unremarketed Bonds
purchased by FGIC-SPI pursuant to the Standby Agreement, such decrease to be
effective as of any Purchase Date; and (iii) upward by the principal amount of
any Unremarketed Bonds theretofore purchased by FGIC-SPI which are remarketed by
the Remarketing Agent or purchased by the School District, such increase to be
effective as of the date FGIC-SPI is reimbursed in full with respect to such
Unremarketed Bonds pursuant to the terms of the Standby Agreement. The
"Available Interest Commitment" is initially $779,260, which represents 38 days
of accrued interest on the 1998 Bonds, calculated at a rate of 15% per annum on
the basis of a 365-day year, and will be reduced and reinstated in proportion to
fluctuations in the Available Principal Commitment.
TERMINATION OF THE STANDBY AGREEMENT
The Standby Agreement will terminate upon the earliest to occur of (i) the
Stated Expiration Date, as it may be extended from time to time, (ii) the date
on which the Available Principal Commitment and Available Interest Commitment
are permanently reduced to zero, (iii) the date on which a replacement Liquidity
Facility is issued pursuant to the terms of the Resolution and (iv) the date on
which the Available Principal Commitment and Available Interest Commitment are
terminated as described under the heading "Effect of the Occurrence of an Event
of Default" as described below.
CONDITIONS PRECEDENT TO PURCHASES UNDER THE STANDBY AGREEMENT
The obligations of FGIC-SPI under the Standby Agreement to purchase
Unremarketed Bonds are subject to satisfaction on each purchase date of each of
the following conditions precedent in a manner satisfactory to FGIC-SPI and its
counsel.
(a) The Tender Agent does not receive by 11:00 a.m., New York City
time, remarketing proceeds from the Remarketing Agent in a total
amount sufficient to purchase all Unremarketed Bonds designated
for purchase by FGIC-SPI in the notice delivered to FGIC-SPI;
(b) FGIC-SPI shall have received (by facsimile transmission not later
than 11:30 a.m., New York City time, on the Purchase Date) a
notice from the Tender Agent substantially in the form attached
to the Standby Agreement specifying the Purchase Price to be paid
by FGIC-SPI on such Purchase Date; provided that if any
Unremarketed Bonds specified for purchase in such notice shall be
remarketed subsequent to the delivery of such notice to FGIC-SPI,
the Tender Agent shall have the right to reduce the amount of the
Purchase Price specified in such notice by telephonic notice to
FGIC-SPI, promptly confirmed in writing, at any time prior to the
time FGIC-SPI initiates payment of such Purchase Price; and
(c) FGIC-SPI's commitment shall not have been terminated upon the
occurrence of an Event of Default as described below.
EVENTS OF DEFAULT
Each of the following constitutes an Event of Default under the Standby
Agreement (terms used in this section which are not defined herein are as
defined in the Standby Agreement):
(a) (i) any portion of the commitment fee for this agreement shall
not be paid when due on the quarterly payment date therefor as
set forth in the Payment Agreement, or (ii) any other amount
payable thereunder shallnot be paid when due and any such
failure shall continue for three (3) Business Days after notice
thereof to the Issuer;
(b) the State shall take any action which would impair the power of
the Issuer to comply with the covenants and obligations of the
Issuer under the Authorizing Document or any right or remedy of
the Corporation or any owners of the Variable Rate Bonds from
time to time to enforce such covenants and obligations;
(c) (i) the Issuer shall fail to observe or perform any covenant or
agreement contained in the Authorizing Document and, if such
failure is the result of a covenant breach which is capable of
being remedied, such failure continues for ninety (90) days
following written notice thereof to the Issuer from the
Corporation, provided that if any such failure (other than a
payment default) shall be such that it cannot be cured or
corrected within such ninety (90) day period, it shall not
constitute an Event of Default hereunder if curative or
corrective action is instituted within such period and diligently
pursued until the failure of performance is cured or corrected,
or (ii) there shall not be, at all times a Remarketing Agent
performing the duties thereof contemplated by the Authorizing
Document;
(d) an event of default has occurred and is continuing under the
Authorizing Document;
(e) any representation, warranty, certification or statement made by
the Issuer (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;
(f) any default by the Issuer 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 of the
Issuer which under the Authorizing Document or under any Related
Document is senior to, or on parity with, the Variable Rate
Bonds;
(g) the Issuer 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;
(h) a court of competent jurisdiction shall enter an order,
judgement or decree declaring the Issuer insolvent, or adjudging
it bankrupt, or appointing a Trustee or receiver of the Issuer,
or approving a petition filed against the Issuer seeking
reorganization of the Issuer under any applicable law or statute
of the United States of America or any state thereof, and such
order, judgement or decree shall not be vacated or set aside or
stayed within sixty (60) days from the date of the entry
thereof;
(i) under the provision of any other law for the relief of aid of
debtors, any court of competent jurisdiction shall assume
custody or control of the Issuer and such custody or control
shall not be terminated within sixty (60) days from the date of
assumption of such custody or control;
(j) any material provision of this Agreement, the Authorizing
Document, the Remarketing Agreement, any other Related Document,
the Variable Rate Bonds or Provider Bonds shall cease for any
reason whatsoever to be a valid and binding agreement or the
Issuer shall content the validity or enforceability thereof; or
(k) failure to pay when due any amount payable under the Variable
Rate bonds or Provider Bonds (regardless of any waiver thereof
by the holders of the Bonds).
EFFECT OF OCCURRENCE OF AN EVENT OF DEFAULT
Upon the occurrence of any Event of Default, FGIC-SPI may, in its sole and
absolute discretion, (i) terminate its obligation under the Standby Agreement
and its Available Commitment, Available Principal Commitment and Available
Interest Commitment and permanently reduce each such Commitment to zero by
written notice to the Tender Agent (such termination and reduction to be
effective thirty (30) days after such notice is received by the Tender Agent),
and (ii) declare all accrued fees and other obligations outstanding hereunder to
be immediately due and payable without further demand, presentment, protest or
other notice whatsoever, all of which are expressly waived by the School
District in the Standby Agreement.
ALTERNATE LIQUIDITY FACILITY
Pursuant to the Resolution the School District may provide an Alternate
Liquidity Facility for the 1998 Bonds to provide funds to the Tender Agent to
purchase such 1998 Bonds delivered to the Tender Agent for purchase and not
remarketed. The School District is required to use its best efforts to obtain an
Alternate Liquidity Facility (which may be a standby purchase agreement, a line
of credit, a letter of credit or a similar liquidity facility) (i) at least 20
days prior to the scheduled expiration date of the Liquidity Facility, or (ii)
if FGIC-SPI has terminated the Standby Agreement, if an event has occurred that
with notice, or passage or time, or both, will allow FGIC-SPI to rescind,
suspend or terminate the Standby Agreement or if FGIC-SPI is in default under
the Standby Agreement. To qualify under the Resolution as an "Alternate
Liquidity Facility," the substitute facility must be issued or guaranteed by a
commercial bank, insurance company or financial institution and contain terms
that are in all material respects the same as or more beneficial in all material
respects to the owners of the 1998 Bonds (except the expiration date and certain
other items as set forth in the Resolution) than the terms of the Standby
Agreement. The Paying Agent must also receive (i) an opinion of nationally
recognized bond counsel to the effect that the delivery to the Paying Agent of
such Alternate Liquidity Facility is authorized under the Resolution and
complies with the terms thereof and (ii) written evidence from Standard &
Poor's, if the 1998 Bonds are then rated by Standard & Poor's, to the effect
that such rating service has reviewed the proposed Alternate Liquidity Facility
and that the substitution of the proposed Alternate Liquidity Facility for the
Standby Agreement will not, by itself, result in a withdrawal or reduction of
its ratings on the Bonds in effect immediately prior to the obtaining of the
Alternate Liquidity Facility.
The Paying Agent shall give notice to the registered owners of
the 1998 Bonds, of the proposed replacement of the current Standby Agreement or
an Alternate Liquidity Facility, by first-class mail, postage prepaid, not less
than fifteen (15) days prior to the Scheduled Interest Payment Date next
preceding the proposed replacement date.
As described above under "THE 1998 BONDS - Purchase of
Tendered 1998 Bonds - Mandatory Tender," the 1998 Bonds will be subject to
mandatory tender for purchase in the event the conditions described above are
not satisfied.
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 2:30 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 Northwestern
Atrium Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661-2511,
and 7 World Trade Center, 13th Floor, 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. In addition, the
Commission maintains a Website that contains reports, proxy and other
information regarding registrants that file electronically, such as GE Capital.
The address of the Commission's Website is http:/www.sec.gov. 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>
- -----------------------------------------
Year Ended December 31 Nine Months
Ended
------------------
September 27, 1997
<S> <C> <C> <C> <C> <C>
- ----- ------ ----- ----- -----
1992 1993 1994 1995 1996
1.44 1.62 1.63 1.51 1.53 1.49
</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, 1996 and 1995, and
for each of the years in the three year period ended December 31, 1996,
appearing in GE Capital's Annual Report on Form 10-K for the year ended December
31, 1996, 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.
Appendix B
ADDITIONAL DEFINITIONS
"Alternate Liquidity Facility" shall mean a standby bond purchase
agreement, a line of credit, a letter of credit or a similar liquidity facility
issued or guaranteed by a commercial bank, insurance company or other financial
institution pursuant to the terms of which money shall be made available by the
issuer or guarantor thereof to the Paying Agent to pay the purchase price of
Bonds tendered for purchase, or deemed tendered for purchase, pursuant to the
Resolution. Such Alternate Liquidity Facility shall provide for an Agent if
there is more than issuer thereof, shall have terms that are the same or more
beneficial in all material respects to the Bondholders (except expiration date)
as the Liquidity Facility then in effect, shall have an expiration date that is
not earlier than 180 days from the Expiration Date of the Liquidity Facility
then in effect and shall satisfy the requirements of the Resolution. If the
Alternate Liquidity Facility is not provided by FGIC-SPI, then the provider of
such Alternate Liquidity Facility shall be approved by the Bond Insurer and
shall meet all the requirements as set forth in the Resolution, unless a
Termination Event has occurred and is continuing with respect to the Standby
Bond Purchase Agreement or any extension thereof.
"Bondowner" or "Bondholder" or "Holder" or "Owner" shall mean the
registered owner of any Bond.
"Bond Insurer" shall mean Financial Guaranty Insurance Company, a New
York stock insurance company, or any successor thereto.
"Business Day" shall mean any day other than a Saturday or a Sunday on
which banks in New York, New York and in the other city or cities in which the
Designated Offices of the Paying Agent, Tender Agent, Bond Registrar, Liquidity
Provider and Remarketing Agent are located are open for commercial banking
purposes (or with respect to any such party that is not a bank, for general
business purposes) and on which the New York Stock Exchange is not closed.
"Purchase Date" shall mean (a) with respect to any optional tender of
Bonds in the Weekly Mode for purchase in accordance with the Resolution, the
Business Day specified by the Holder thereof in accordance with the Resolution
as the day on which such Bonds are to be purchased; and (b) with respect to any
mandatory tender of Bonds for purchase pursuant to the Resolution, the date
specified in such as the date upon such Bonds are to be purchased.
"FGIC-SPI Rate" shall mean the rate of interest which Bonds bear while
the same are Provider Bonds, as determined in accordance with the Standby Bond
Purchase Agreement.
"Resolution" shall mean this Resolution as amended or supplemented from
time to time by all resolutions supplemental hereto. The term "this Resolution"
shall mean this instrument.
"S&P" shall mean Standard & Poor's, a division of The McGraw-Hill
Companies, or its successor.
"Scheduled Interest Payment Date" shall mean (i) with respect to Bonds
in the Weekly Mode, the first Business Day of each calendar month, except that
the first Scheduled Interest Payment Date shall be April 1, 1998, and (ii) with
respect to Bonds in the Term mode, each Semiannual Date.
"Special Interest Payment" shall mean, with respect to any Bonds, the
date established by the Paying Agent in connection with the payment of overdue
interest on such Bonds in accordance with the terms hereof and of the Bonds.
"Term Mode" shall mean with respect to the Bonds, the mode of accruing
interest at the Term Rate.
"Term Rate" shall mean the rate of interest borne by the Bonds for a
Term Rate Period determined pursuant to the Resolution.
"Term Rate Period" shall mean the period beginning on the Conversion
Date and ending on the final maturity date of the Bonds.
"Unremarketed Bonds" shall mean Bonds which have been tendered for
purchase or which are deemed to have been tendered for purchase, pursuant to the
Resolution, but which have not been remarketed.
"Weekly Mode" shall mean, with respect to the Bonds, the mode of
accruing interest at a Weekly Rate.
Bonds "Weekly Rate" shall mean an interest rate that is determined for
the Bonds on a weekly basis pursuant to the Resolution.
"Weekly Rate Period" shall mean each period during which interest on
the Bonds is payable or is accrued at a Weekly Rate pursuant to the Resolution.
$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 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 February 12, 1998
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
Northwestern Atrium Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and 7 World Trade Center, 13th Floor, 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. In addition, the Commission maintains a Website that contains reports,
proxy and other information regarding registrants that file electronically, such
as FGIC-SPI. The address of the Commission's Website is http:/www.sec.gov.
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, 1996 and
the Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997, June
30, 1997 and September 30, 1997, 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, such
owner may elect to purchase from VRDN holders an amount of VRDNs equal to the
principal amount of INFLOs for which such INFLO owner 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, the owner may
"de-link" his or her 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 or
her 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.
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, 1996 and 1995, and for each of the years in the three-year period
ended December 31, 1996 appearing in FGIC Securities Purchase, Inc.'s 1996
Annual Report (Form 10-K) have been audited by KPMG Peat Marwick LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference in reliance upon such report given upon the
authority of said firm as experts in accounting and auditing.
No dealer, salesman or any other individual has been
authorized to give any information or to make any representations other than
those contained in this Prospectus in connection with the offer made by this
Prospectus, and, if given 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 jurisdiction in which an
offer or solicitation is not authorized or in which the person making such offer
or solicitation is not qualified to do so or to anyone to whom it is unlawful to
make such offer or solicitation.
TABLE OF CONTENTS
Page
PROSPECTUS SUPPLEMENT
Documents Incorporated By Reference..............S-2
Introduction.....................................S-2
Description of the 1998 Bonds....................S-2
The FGIC-SPI Liquidity Facility..................S-15
The Standby Loan Agreement; GE Capital...........S-16
Experts..........................................S-17
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
$49,900,000
principal amount
plus interest and premium,
if any
LIQUIDITY FACILITY OBLIGATIONS
issued by
FGIC Securities
Purchase, Inc.
in support of
Dallastown Area School District
York County, Pennsylvania
General Obligation Bonds,
Series of 1998
---------
PROSPECTUS SUPPLEMENT
---------
February 12, 1998
