PROSPECTUS SUPPLEMENT
(To Prospectus dated March 19, 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.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------------
The obligations of FGIC Securities Purchase, Inc. under the FGIC-SPI
Liquidity Facility (the "Obligations")
are not being sold separately from the 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 March 19, 1998.
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.
THE 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.
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. 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
4:45 p.m. on the Wednesday preceding the new Weekly Rate Period.
CONVERSION OF 1998 BONDS TO TERM MODE - OPTIONAL/MANDATORY. The School
------------------------------------------------------------ District is
permitted to convert the interest rate on the 1998 Bonds from a Weekly Rate
to the Term Rate at any time and is required to commence such conversion at
least 90 days prior to the scheduled expiration of the Liquidity Facility and
at least five (5) days following the mandatory tender of 1998 Bonds for
purchase of the "20-Bond Municipal Bond Index" (or equivalent index)
published by the Bond Buyer reaches or exceeds 10%.
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NOTICE TO BONDHOLDERS. In the case of a conversion from the Weekly Rate
---------------------- to the Term Rate, the Paying Agent
shall give notice by first class mail (postage prepaid) to the Holders not
less than 30 days prior to the proposed Conversion Date stating (i) that, in
the case of a conversion to the Term Rate, the interest rate on the 1998
Bonds is scheduled to be converted to a Term Rate, (ii) the proposed
Conversion Date, (iii) that the School District, on or before the tenth day
prior to the proposed Conversion Date, may determine not to convert the 1998
Bonds, in which case the Paying Agent shall notify the Holders in writing to
such effect, and (iv) that all outstanding 1998 Bonds will be subject to
tender for purchase on the Conversion Date, or if such Conversion Date is not
a Business Day, the first Business Day following such Conversion Date, at a
price of par plus accrued interest, if any. Upon such conversion, the 1998
Bonds shall be subject to mandatory tender for purchase on the Conversion
Date, or if such Conversion Date is not a Business Day, the first Business
Day immediately following such Conversion Date. Notwithstanding such notice
in no event shall a conversion be effected unless there is delivered to the
Paying Agent (1) an opinion of Bond Counsel be obtained with respect to the
tax-exempt status of the interest on the 1998 Bonds and (2) written consent
of the Bond Insurer.
EFFECT OF DETERMINATION. The Conversion of the 1998 Bonds from the
Weekly Mode to the Term Mode and the determination of the Term 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
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".
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 (15/th/) 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 45/th/ 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 30/th/ 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 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
1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C>
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, 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.
"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 Date" 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 March 19, 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. Therecanbe noassurances,however, thatsuchratings willbemaintained.
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 $49,900,000
this Prospectus, and, if given or
made, such information or
representations must not be relied principal amount
upon as having been authorized by plus interest and premium,
FGIC-SPI. This Prospectus does not if any
constitute an offer or solicitation
by anyone in any jurisdiction in
which an offer or solicitation is
not authorized or in which the LIQUIDITY FACILITY OBLIGATIONS
person making such offer or
solicitation is not qualified to do
so or to anyone to whom it is
unlawful to make such offer or
solicitation. issued by
-------
FGIC Securities
TABLE OF CONTENTS Purchase, Inc.
Page
---- in support of
PROSPECTUS SUPPLEMENT Dallastown Area School District
Documents Incorporated By Reference. .S-2 York County, Pennsylvania
Introduction . . . . . . . . . . . . .S-2 General Obligation Bonds,
The 1998 Bonds . . . . . . . . . . . .S-2 Series of 1998
Summary of Interest Rate Modes . . . .S-9
Book-Entry Only System . . . . . . . S-10 --------
Security and Sources of Payment
for the 1998 Bonds . . . . . . . . S-12 PROSPECTUS SUPPLEMENT
Standby Bond Purchase Agreement . . .S-12
The Standby Loan Agreement; GE --------
Capital . . . . . . . . . . . . . . .S-15
Experts . . . . . . . . . . . . . . .S-16 March 19, 1998
Appendix A . . . . . . . . . . . . . .A-1
Appendix B . . . . . . . . . . . . . .B-1
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
