UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____ to _____
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Commission file number 0-19564
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FGIC Securities Purchase, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 13-3633082
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
115 Broadway, New York, New York 10006 (212) 312-3000
(Address of principal executive offices) (Zip Code) (Registrant's telephone number,
including area code)
</TABLE>
------------------
SECURITIES REGISTERED PURSUANT
TO SECTION 12(b) OF THE ACT:
None.
SECURITIES REGISTERED PURSUANT
TO SECTION 12(g) OF THE ACT:
Title of each class
-------------------
Common Stock, par value $10.00 per share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ____
Aggregate market value of the voting stock held by nonaffiliates of the
registrant at _________, 1999. None.
At March 23, 2000, 10 shares of common stock with a par value of $10.00
per share were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION J(1)(a) AND
(b) OF FORM 10-K AND IS THEREFORE FILING THIS FORM 10-K WITH THE REDUCED
DISCLOSURE FORMAT.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I
Item 1. Business 1
Item 2 Properties 1
Item 3. Legal Proceedings 1
Item 4. Submission of Matters to a Vote of Security Holders 1
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters 2
Item 6. Selected Financial Data 2
Item 7. Management's Discussion and Analysis of Results of Operations 2
Item 8. Financial Statements and Supplementary Data 5
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 14
PART III
Item 10. Directors and Executive Officers of the Registrant 14
Item 11. Executive Compensation 14
Item 12. Security Ownership of Certain Beneficial Owners and Management 14
Item 13. Certain Relationships and Related Transactions 14
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 14
Signatures 15
</TABLE>
<PAGE>
PART I
Item 1. Business.
FGIC Securities Purchase, Inc. ("FGIC-SPI") was incorporated in 1990
in the State of Delaware. As of December 31, 1999, all outstanding
capital stock of FGIC-SPI was owned by FGIC Holdings, Inc., a
Delaware corporation, a wholly-owned subsidiary of General Electric
Capital Corporation ("GE Capital"), a New York corporation, the
ultimate parent of which is General Electric Company.
The business of FGIC-SPI consists of providing liquidity for certain
floating rate municipal securities through a "liquidity facility".
These floating rate municipal 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. In the event that such securities
cannot be remarketed, FGIC-SPI, pursuant to a standby purchase
agreement with the issuer of the securities, will be obligated to
purchase unremarketed securities, at par, from the holders thereof
who desire to remarket their securities. In order to obtain funds to
purchase the securities, FGIC-SPI has entered into standby loan
agreements, with GE Capital, under which GE Capital will be
irrevocably obligated to lend funds as needed for FGIC-SPI to
purchase the securities.
Item 2. Properties.
FGIC-SPI conducts its business from the facilities of Financial
Guaranty Insurance Company, a wholly-owned subsidiary of FGIC
Corporation.
Item 3. Legal Proceedings.
FGIC-SPI is not involved in any pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
Omitted.
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.
As of December 31, 1992, all of FGIC-SPI's common stock, its sole
class of common equity, was owned by FGIC Corporation. In January
1993, the common stock of FGIC-SPI was dividended to GE Capital. GE
Capital, in turn, made a capital contribution of the common stock of
FGIC-SPI to FGIC Holdings, Inc., which now owns 100% of the common
stock of FGIC-SPI. Accordingly, there is no public trading market
for FGIC-SPI's common stock.
Item 6. Selected Financial Data.
Omitted.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
FGIC-SPI commenced operations in March 1992. Fees are paid up-front
and in installments. Up-front fees are earned on a straight-line
basis over the life of the liquidity commitment, and installment
fees are earned straight-line over the installment period.
For the years ended December 31, 1999 and 1998, fees earned totaled
$6,343,961 and $7,165,522 respectively. The decrease in earnings is
primarily due to a reduction in the liquidity facility utilized
during 1999 and due to the renewal of existing deals at lower basis
points. FGIC-SPI also incurred $715,656 and $602,052 in expenses for
the years ended December 31, 1999 and 1998, respectively. Expenses
increased $113,604 or 19% from 1998 to 1999 primarily as a result of
an increased effort to write more deals.
For the years ended December 31, 1998 and 1997, fees earned totaled
$7,165,522 and $9,283,899 respectively. The decrease in earnings is
primarily due to a reduction in the liquidity facility utilized
during 1998 and due to the renewal of existing deals at lower basis
points. FGIC-SPI also incurred $602,052 and $678,169 in expenses for
the years ended December 31, 1998 and 1997 respectively. Expenses
decreased $76,117 or 11% from 1997 to 1998 primarily as a result of
a decrease in the number and value of the transactions for which
FGIC SPI provided a liquidity facility. During 1999, one deal closed
totaling $38.6 million of liquidity facility. During 1998, three
deals closed totaling $298.6 million of liquidity facility. During
1997, two deals closed totaling $96.4 million of liquidity facility.
Restatements
On December 28, 1998, FGIC-SPI determined that certain adjustments
should be made to FGIC-SPI's previously issued financial statements
for the quarters ended June 30, 1998 and September 30, 1998, to
reflect a change in the accounting treatment with respect to
stand-by loan commitment fees waived by GE Capital.
<PAGE>
FGIC-SPI initially recorded such fees as general and administrative
expenses in years 1994 through 1997. In May of 1998, GE Capital
waived all such fees previously accrued through December 31, 1997.
FGIC-SPI initially recorded the waiving of such fees as a reduction
of general and administrative expenses.
Upon subsequent review, FGIC-SPI determined that the waiving of such
fees should have been recorded as additional paid-in-capital.
The effect of this accounting change resulted in FGIC-SPI increasing
expenses by $250,000 and $500,000, respectively, and reducing
reported earnings by $150,312 and $300,624, respectively, for the
three and nine month periods ended September 30, 1998. Additionally,
as a result of this accounting change, at September 30, 1998,
deferred tax asset, commitment fees payable to GE Capital, taxes
payable, and retained earnings were reduced by $13,125, $322,145,
$212,500, and $300,624, respectively, and additional paid-in-capital
was increased by $822,145.
<PAGE>
Independent Auditors' Report
The Board of Directors and Stockholder
FGIC Securities Purchase, Inc.
We have audited the accompanying balance sheets of FGIC Securities Purchase,
Inc. as of December 31, 1999 and 1998, and the related statements of income,
changes in stockholder's equity, and cash flows for each of the years in the
three-year period ended December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly in
all material respects, the financial position of FGIC Securities Purchase,
Inc. as of December 31, 1999 and 1998, and the results of its operations and
its cash flows for each of the years in the three-year period ended December
31, 1999, in conformity with generally accepted accounting principles.
KPMG LLP
/s/ [KPMG LLP]
- ---------------
[KPMG LLP]
January 21, 2000
New York, New York
<PAGE>
Item 8. Financial Statements and Supplementary Data.
FGIC Securities Purchase, Inc.
Balance Sheets
<TABLE>
<CAPTION>
ASSETS December 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
Short-term investments $132,383 $ 126,285
Liquidity fees receivable 728,904 1,117,220
Due from GE Capital 25,253,791 20,595,753
Deferred tax asset - 209,621
Other assets 339,990 353,109
------------- ------------
Total assets $26,455,068 $22,401,988
=========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Deferred liquidity fee income $251,324 $ 306,300
Due to affiliates 40,000 -
Commitment fees payable to GE Capital 320,831 161,342
Accounts payable and accrued expenses 326,759 346,760
Deferred tax liability 1,111 -
Taxes payable 4,655,157 4,133,697
----------- ----------
Total liabilities 5,595,182 4,948,099
----------- ----------
Stockholder's Equity:
Common stock, par value $10.00 per share;
10 shares authorized, issued and outstanding 100 100
Additional paid in capital 822,145 822,145
Retained earnings 20,037,641 16,631,644
------------ ----------
Total stockholder's equity 20,859,886 17,453,889
------------ -----------
Total liabilities and stockholder's equity $26,455,068 $22,401,958
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FGIC Securities Purchase, Inc.
Statements of Income
<TABLE>
<CAPTION>
For the Year Ended
December 31,
----------------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C
Liquidity fee income $6,343,961 $7,165,522 $9,283,899
Investment income 6,098 8,895 8,113
----------- -------------- -------------
Total revenues 6,350,059 7,174,417 9,292,012
General and administrative expenses 556,167 440,710 499,765
GE Capital commitment fees 159,489 161,342 178,404
---------- ------------ --------------
Total expenses 715,656 602,052 678,169
---------- ------------ --------------
Income before provision for
income taxes 5,634,403 6,572,365 8,613,843
Income tax expense (benefit):
Federal
Current 1,623,266 2,127,803 3,149,625
Deferred 210,732 - (360,893)
State and local 394,408 492,927 646,038
----------- ----------- -------------
Total income tax expense 2,228,406 2,620,730 3,434,770
---------- ---------- ------------
Net income $3,405,997 $3,951,635 $5,179,073
========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FGIC Securities Purchase, Inc.
Statements of Changes in Stockholder's Equity
For the Years Ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
Common Additional Paid Retained
Stock In Capital Earnings Total
<S> <C> <C> <C> <C>
Balance, January 1, 1997 $100 - $7,500,936 $ 7,501,036
Net Income - - 5,179,073 5,179,073
----- ---------- ----------- -----------
Balance, December 31, 1997 100 - 12,680,009 12,680,109
Net Income - - 3,951,635 3,951,635
Capital contribution - 822,145 - 822,145
------ -------- ------------- -------------
Balance December 31, 1998 100 822,145 16,631,644 17,453,889
Net Income - - 3,405,997 3,405,997
------ ------------ ------------ ------------
Balance, December 31, 1999 $100 $822,145 $20,037,641 $20,859,886
==== ======== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FGIC Securities Purchase, Inc.
Statements of Cash Flows
<TABLE>
<CAPTION>
For the Year Ended
December 31,
------------------------------------------------
1999 1998 1997
---- ---- ----
Operating activities:
<S> <C> <C> <C>
Net income $3,405,997 $3,951,635 $ 5,179,073
Adjustments to reconcile net
income to net cash
provided by operating activities:
Change in taxes payable 521,460 (2,026,506) (6,869)
Change in due from affiliates (4,658,038) (2,186,824) (5,124,620)
Change in due to affiliates 40,000 (140,980) 140,980
Change in liquidity fees
receivable 388,316 161,166 627,552
Change in deferred tax asset 210,732 (172,524) (587,007)
Change in deferred liquidity
fee income (54,976) 95,122 (136,045)
Change in other assets 13,119 102,965 (133,995)
Change in accounts payable and
accrued expenses (20,001) 63,501 (129,360)
Change in commitment fees
payable to GE Capital 159,489 161,340 178,404
-------- ------------- -------------
Cash provided by operating
activities 6,098 8,895 8,113
--------- ------------- ---------
Net change in cash and cash
equivalents 6,098 8,895 8,113
Cash and cash equivalents at
beginning of period 126,285 117,390 109,277
-------- ---------- -------
Cash and cash equivalents at
end of period $132,383 $126,285 $117,390
======== ========= ========
Supplemental schedule of non-cash investing
and financing activities:
Waived commitment fees payable to
GE Capital - $822,145 $ -
========== ======== ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FGIC Securities Purchase, Inc.
Notes to Financial Statements
December 31, 1999
(1) Business
FGIC Securities Purchase, Inc. ("FGIC-SPI") is a wholly-owned subsidiary
of FGIC Holdings, Inc. (the "Parent") which, in turn, is wholly-owned by
General Electric Capital Corporation ("GE Capital"). FGIC-SPI was
capitalized on September 24, 1991. FGIC-SPI was formed to provide
liquidity for certain floating rate municipal securities whereby FGIC-SPI
will, under certain circumstances, purchase such securities in the event
they are tendered by the holders thereof as permitted under the terms of
the respective bond indentures. As of December 31, 1999, FGIC-SPI had
approximately $2.5 billion par and interest of potential obligations
under such arrangements. In order to obtain funds, in the event such
purchases are necessary, FGIC-SPI has entered into standby loan
agreements, with GE Capital, under which GE Capital will be irrevocably
obligated to lend funds as needed for FGIC-SPI to purchase the
securities.
(2) Restatements
On December 28, 1998, FGIC-SPI determined that certain adjustments should
be made to FGIC-SPI's previously issued financial statements for the
quarters ended June 30, 1998 and September 30, 1998, to reflect a change
in the accounting treatment with respect to stand-by loan commitment fees
waived by GE Capital.
FGIC-SPI initially recorded such fees as general and administrative
expenses in years 1994 through 1997. In May of 1998, GE Capital waived
all such fees previously accrued through December 31, 1997. FGIC-SPI
initially recorded the waiving of such fees as a reduction of general and
administrative expenses.
Upon subsequent review, FGIC-SPI determined that the waiving of such fees
should have been recorded as additional paid-in-capital.
The effect of this accounting change resulted in FGIC-SPI increasing
expenses by $250,000 and $500,000, respectively, and reducing reported
earnings by $150,312 and $300,624, respectively, for the three and nine
month periods ended September 30, 1998. Additionally, as a result of this
accounting change, at September 30, 1998, deferred tax asset, commitment
fees payable to GE Capital, taxes payable, and retained earnings were
reduced by $13,125, $322,145, $212,500, and $300,624, respectively, and
additional paid-in-capital was increased by $822,145.
The effect of this accounting change resulted in FGIC-SPI increasing
expenses by $250,000 and reducing reported earnings by $150,312 for both
the three and six month periods ended June 30, 1998. Additionally, as a
result of this accounting change, at June 30, 1998, deferred tax asset,
commitment fees payable to GE Capital, taxes payable, and retained
earnings were reduced by $6,563, $572,145, $106,251, and $150,312,
respectively, and additional paid-in-capital was increased by $822,145.
(3) Significant Accounting Policies
The accompanying financial statements have been prepared on the basis of
generally accepted accounting principles. The preparation of financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Significant accounting policies are as follows:
<PAGE>
Revenue Recognition
Fees are paid up-front and in installments. Up-front fees are earned on a
straight-line basis over the life of the liquidity commitment, usually
five years, and installment fees are earned straight-line over the
installment period.
Cash and Cash Equivalents
Cash equivalents are carried at cost, which approximates fair value. For
purposes of the statement of cash flows, FGIC-SPI considers all highly
liquid investments with original maturities of three months or less to be
cash equivalents.
Fair Values of Financial Instruments
The carrying amounts of FGIC-SPI's financial instruments, relating
primarily to short-term investments and liquidity fees, approximate their
fair values.
SEC Registration Fees
SEC registrations fees are reimbursable to FGIC-SPI, as a separate item
at the closing, by issuers as transactions are consummated. Such fees are
deferred when paid and netted against the related reimbursement as
transactions are consummated. Management evaluates the recoverability of
such deferred fees at each reporting date.
Expenses
Direct expenses incurred by the Parent are fully allocated to FGIC-SPI on
a specific identification basis. Employee related expenses are allocated
by affiliates to FGIC-SPI based on the percentage of time such employees
devote to the activities of FGIC-SPI. Management believes that such
allocation method is reasonable. Management believes that such expenses,
as reported in the statement of income, would not differ materially from
what expenses would have been on a stand-alone basis.
Reserve for Losses
It is management's policy to establish a reserve for losses based upon
its estimate of the ultimate aggregate losses relative to its obligations
under the liquidity facility arrangements written. At December 31, 1999,
management does not anticipate any losses relative to such arrangements.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases, on a stand alone basis, as provided in SFAs No. 109,
"Accounting for Income Taxes". Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that
includes the enactment date.
New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." The
requirements for SFAS No. 133 were delayed by SFAS No. 137, "Deferral of
the Effective Date of FASB Statement No. 133," and are now effective for
financial statements for periods beginning after June 15, 2000. SFAS No.
133 establishes standards for accounting and reporting for derivative
instruments and for hedging activities. It requires that an entity
recognizes all derivatives as either assets or liabilities in the balance
sheet and measure those instruments at fair value. The Company is
currently evaluating the impact of SFAS No. 133 but does not expect it to
have a material impact on the Company.
<PAGE>
(4) Income Taxes
Under an intercompany tax-sharing agreement with its parent, FGIC-SPI is
included in the consolidated Federal income tax returns filed by GE
Capital. FGIC-SPI provides for taxes as if it filed a separate tax
return.
FGIC-SPI's effective Federal tax rate differs from the corporate tax rate
on ordinary income of 35 percent in 1999, 1998 and 1997. The differences
between the statutory Federal tax rate and expense computed by applying
the statutory tax rate to earnings before income taxes are as follows:
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1999 1998 1997
Computed Statutory
tax provision $1,972,041 $2,300,328 $3,014,845
State and local
income taxes, net
of Federal income
tax benefit 256,365 320,402 419,925
----------- ----------- -----------
Income tax expense $2,228,406 $2,620,730 $3,434,770
========== ========== ==========
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities at December
31, 1999 and 1998 are as follows:
1999 1998
---- ----
Commitment fees - 209,621
---------- -----------
Total gross deferred tax assets - 209,621
Deferred tax liabilities - other 1,111 -
-------- -------------
Net deferred tax (liability)/asset $(1,111) $209,621
======== ========
FGIC-SPI believes it is more likely than not that it will realize the
benefits of these deductible differences and has not established a
valuation allowance at December 31, 1998.
For the years ended December 31, 1999, 1998, and 1997, federal income
taxes paid totaled $1,496,215, $4,819,761 and $4,028,646, respectively.
(5) Related Party Transactions
All municipal securities for which FGIC-SPI provides liquidity are
insured by Financial Guaranty Insurance Company, a subsidiary of the
Parent.
As part of a standby loan agreement with GE Capital (see Note 7),
FGIC-SPI has incurred commitment fees for the years ended December 31,
1999, 1998 and 1997 of $159,489, $161,342, and $178,404, respectively.
<PAGE>
At December 31, 1999 and 1998, $25,253,791 and $20,595,753, respectively,
of the amount classified as due from GE Capital relates to cash balances
held by GE Capital. FGIC-SPI has access to these funds on an as needed
basis.
All amounts due from affiliates and due to affiliates are non-interest
bearing.
(6) Off-Balance-Sheet Risk
FGIC-SPI provides liquidity for certain floating rate municipal
securities whereby FGIC-SPI will, under certain circumstances, purchase
such securities at par in the event they are tendered by the holders
thereof as permitted under the terms of the respective bond indentures.
The geographical distribution of the underlying par value supported by
the thirty five liquidity facilities outstanding at December 31, 1999 was
as follows (dollars in millions):
New York $1,236.2
Pennsylvania 288.4
California 262.9
Connecticut 215.0
Massachusetts 201.3
Florida 134.0
Ohio 114.3
Texas 24.2
Oklahoma 16.4
Michigan 8.0
-----------
Total $2,500.7
========
The maturity distribution of the underlying par value supported by the
thirty five liquidity facilities outstanding at December 31, 1999 was as
follows (dollars in millions):
Less than one year $ -
One to two years 349.1
Two to three years 1,227.3
Three to four years 697.2
Four to five years 227.1
Over five years -
------------
Total $2,500.7
========
The liquidity agreements are for a term of approximately five years
(subject to renewal) or earlier if the bonds are no longer outstanding.
As of December 31, 1999, the fair value of the uncollected balances on
outstanding facilities was $16.1 million. The fair value was calculated
based upon current expected cash inflows, assuming current outstanding
facilities at current fee rates, discounted at the risk free rate of
6.6%.
FGIC-SPI is exposed to credit risk that the issuer defaults on the
underlying municipal security at a time that FGIC-SPI is holding
securities purchased pursuant to a liquidity facility and the financial
guarantor fails to perform on its insurance contract. It is the
accounting policy of FGIC-SPI to evaluate the likelihood of any credit
loss at each reporting period and to establish reserves for credit losses
when deemed appropriate. Management believes that no such reserves were
required at December 31, 1999 and 1998.
<PAGE>
FGIC-SPI is exposed to market risk in the event that FGIC-SPI is required
to purchase municipal securities at their par amount at a time when such
par value is in excess of the securities' fair value. It is the
accounting policy of FGIC-SPI to evaluate the likelihood of it being
called upon to purchase securities under its liquidity arrangements at
amounts greater than their fair value at each reporting period and to
establish valuation reserves when deemed appropriate. Management believes
that no such valuation reserves were required at December 31, 1999 and
1998.
(7) Standby Loan Agreements
FGIC-SPI secured the right to obtain funds for the purchase of tendered
bonds by entering into standby loan agreements with GE Capital who will
lend funds to FGIC-SPI in amounts not exceeding the purchase price of the
tendered bonds. Such agreements totaled $5.0 billion at December 31,
1999.
In consideration of the commitment of GE Capital to make loans to
FGIC-SPI, FGIC-SPI agrees to pay GE Capital a fee equal to 0.625 basis
points on the outstanding facility. The fee is payable on dates mutually
agreed to by FGIC-SPI and GE Capital.
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
NONE
Part III
Item 10. Directors and Executive Officers of the Registrant.
Omitted.
Item 11. Executive Compensation.
Omitted.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Omitted.
Item 13. Certain Relationships and Related Transactions.
Omitted.
PART IV
Item 14. Exhibits and Financial Statement Schedules.
(a) Financial Statements
Included in Part II of this report:
Report of Independent Auditors
Balance Sheets as of December 31, 1999 and 1998
Statements of Income for the years ended
December 31, 1999, 1998 and 1997.
Statements of Changes in Stockholder's Equity for the years
ended December 31, 1999, 1998 and 1997
Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997.
Notes to Financial Statements
All Schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange
Commission are not required under the related instructions or
are inapplicable and, therefore, have been omitted.
(b) Exhibit Index
Exhibit
- -------
1.1 --Certificate of Incorporation of FGIC-SPI
(Incorporated by reference to Exhibit 1.1 of
FGIC-SPI's December 31, 1991 Form 10K)
1.2 -- By-Laws of FGIC-SPI
(Incorporated by reference to Exhibit 1.2 of
FGIC-SPI's December 31, 1991 Form 10K)
1.3 -- Consents of Independent Auditors
<PAGE>
Pursuant to the requirements of the Securities Act of 1934, this report has
been signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Ann C. Stern President (principal March 23, 2000
- --------------------------------------- executive officer), --------------
Ann C. Stern Director
/s/Rick J. Filippelli Treasurer, Director March 23, 2000
- --------------------------------------- --------------
Rick J. Filippelli
/s/Amedeo Edward Turi, III Director March 23, 2000
- --------------------------------------- --------------
Amedeo Edward Turi, III
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Act of 1934, this report has
been signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
President (principal
- ------------------------------------------ executive officer), -------------
Ann C. Stern Director
- ------------------------------------------ Treasurer, Director -------------
Rick J. Filippelli
- ------------------------------------------ Director -------------
Amedeo Edward Turi, III
</TABLE>
<PAGE>
Consent of Independent Auditors
The Board of Directors and Stockholder
FGIC Securities Purchase, Inc.
We consent to incorporation by reference in the registration statement (No.
33-43066) on Form S-3 of FGIC Securities Purchase, Inc. of our report dated
January 21, 2000, relating to the balance sheets of FGIC Securities Purchase,
Inc. as of December 31, 1999 and 1998, and the related statements of income,
changes in stockholder's equity, and cash flows for each of the years in the
three-year period ended December 31, 1999, which report appears in the
December 31, 1999 annual report on Form 10-K of FGIC Securities Purchase, Inc.
KPMG LLP
/s/ [KPMG LLP]
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[KPMG LLP]
New York, New York
March 27, 2000
Exhibit 1.3
