SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report: March 18, 1998
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(Date of earliest event reported)
Nomura Asset Securities Corporation
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(Exact name of registrant as specified in its charter)
Delaware 33-48481 13-3672336
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(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
Two World Financial Center, Building B, New York, New York 10281
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Address of Principal Executive Office
Registrant's telephone number, including area code: (212) 667-9300
<PAGE>
Item 5. Other Events.
Attached as Exhibit 99.1 to this Current Report are certain pages that were
inadventently omitted from the electronic filing of Pre-effective Amendment No.
4 to the Registrant's Registration Statement No. 333-22133 on February 18, 1998
(the "Registration Statement"), which pages are alternate pages to the base
prospectus and are intended to be used in the base prospectus in the event of
certain property type concentrations. The Registrant hereby incorporates the
Alternate Pages by reference in the Registration Statement.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibit 99.1 Alternate Pages.
<PAGE>
Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on behalf of the Registrant by the
undersigned thereunto duly authorized.
NOMURA ASSET SECURITIES CORPORATION
By: /s/ Perry Gershon
------------------
Name: Perry Gershon
Title: Managing Director
Date: March 18, 1998
<PAGE>
Exhibit Index
Item 601(a) of
Regulation S-K
Exhibit No. Description Page
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99.1 Alternate Pages 4
RETAIL PROPERTIES VERSION
The following are alternate pages to the base prospectus for a form of base
prospectus for a series of commercial mortgage pass-through certificates backed
by loans secured by retail properties. Disclosure made on the following
alternate pages will be included in the base prospectus for each series of
Certificates backed by loans containing a material concentration of Mortgage
Loans secured by retail properties.
<PAGE>
[RETAIL PROPERTIES VERSION]
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS TO WHICH IT RELATES
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS DATED NOVEMBER 12, 1997
(SUBJECT TO COMPLETION)
MORTGAGE PASS-THROUGH CERTIFICATES
(ISSUABLE IN SERIES)
NOMURA ASSET SECURITIES CORPORATION
DEPOSITOR
The Certificates offered hereby and by Supplements to this Prospectus (the
'Offered Certificates') will be offered from time to time in series. Each series
of Certificates will represent in the aggregate the entire beneficial ownership
interest in a trust fund (with respect to any series, the 'Trust Fund')
consisting of a segregated pool of mortgage loans secured liens on, or security
interests in, retail properties (the 'Mortgage Loans', or sometimes referred to
herein as the 'Mortgage Assets'). The Trust Fund for a series of Certificates
may also include letters of credit, insurance policies, guarantees, reserve
funds or other types of credit support, or any combination thereof (with respect
to any series, collectively, 'Credit Support'), and currency or interest rate
exchange agreements and other financial assets, or any combination thereof (with
respect to any series, collectively, 'Cash Flow Agreements'). See 'Description
of the Trust Funds', 'Description of the Certificates' and 'Description of
Credit Support'.
Each series of Certificates will consist of one or more classes of
Certificates that may (i) provide for the accrual of interest thereon based on
fixed, variable or adjustable rates; (ii) be senior or subordinate to one or
more other classes of Certificates in respect of certain distributions on the
Certificates; (iii) be entitled to principal distributions, with
disproportionately low, nominal or no interest distributions; (iv) be entitled
to interest distributions, with disproportionately low, nominal or no principal
distributions; (v) provide for distributions of accrued interest thereon only
following the occurrence of certain events, such as the retirement of one or
more other classes of Certificates of such series; or (vi) provide for
distributions of principal sequentially, or based on specified payment
schedules, to the extent of available funds, in each case as described in the
related Prospectus Supplement. Any such classes may include classes of Offered
Certificates. See 'Description of the Certificates'.
Principal and interest with respect to Certificates will be distributable
monthly, quarterly, semi-annually or at such other intervals and on the dates
specified in the related Prospectus Supplement. Distributions on the
Certificates of any series will be made only from the assets of the related
Trust Fund.
The Certificates of each series will not represent an obligation of or
interest in the Depositor, any Master Servicer, any Special Servicer or any of
their respective affiliates, except to the limited extent described herein and
in the related Prospectus Supplement. Only those Certificates and assets in the
related Trust Fund as are disclosed in the related Prospectus Supplement will be
guaranteed or insured by any governmental agency or instrumentality or by any
other person. The assets in each Trust Fund will be held in trust for the
benefit of the holders of the related series of Certificates pursuant to a
Pooling and Servicing Agreement or a Trust Agreement, as more fully described
herein.
The yield on each class of Certificates of a series will be affected by,
among other things, the rate of payment of principal (including voluntary and
involuntary prepayments) on the Mortgage Assets in the related Trust Fund and
the timing of receipt of such payments as described under the caption 'Yield
Considerations' herein and in the related Prospectus Supplement. A Trust Fund
may be subject to early termination under the circumstances described herein and
in the related Prospectus Supplement.
Prospective investors should review the information appearing under the
caption 'Risk Factors' herein and such information as may be set forth under the
caption 'Risk Factors' in the related Prospectus Supplement before purchasing
any Offered Certificate.
If so provided in the related Prospectus Supplement, one or more elections
may be made to treat the related Trust Fund or a designated portion thereof as
one or more 'real estate mortgage investment conduits' for federal income tax
purposes. See also 'Federal Income Tax Consequences' herein.
PROSPECTIVE INVESTORS SHOULD REVIEW THE DISCUSSION OF MATERIAL RISKS
APPEARING UNDER THE CAPTION 'RISK FACTORS' HEREIN COMMENCING ON PAGE 11.
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.
Prior to issuance there will have been no market for the Certificates of any
series and there can be no assurance that a secondary market for any Offered
Certificates will develop or that, if it does develop, it will continue. This
Prospectus may not be used to consummate sales of a series of Offered
Certificates unless accompanied by a Prospectus Supplement.
Offers of the Offered Certificates may be made through one or more different
methods, including offerings through underwriters, as more fully described under
'Method of Distribution' herein and in the related Prospectus Supplement. All
Offered Certificates will be distributed by, or sold by underwriters managed by:
NOMURA SECURITIES INTERNATIONAL, INC.
THE DATE OF THIS PROSPECTUS IS , 199
<PAGE>
[RETAIL PROPERTIES VERSION]
SUMMARY OF PROSPECTUS
The following summary of material information does not contain all the
material information regarding the Certificates and is qualified in its entirety
by reference to the more detailed information appearing elsewhere in this
Prospectus and by reference to the information with respect to each series of
Certificates contained in the Prospectus Supplement to be prepared and delivered
in connection with the offering of such series. An Index of Principal
Definitions is included at the end of this Prospectus.
TITLE OF CERTIFICATES
Mortgage Pass-Through Certificates, issuable in series (the
'Certificates').
DEPOSITOR
Nomura Asset Securities Corporation, a wholly-owned subsidiary of Nomura
Asset Capital Corporation. See 'The Depositor'.
MASTER SERVICER
The master servicer (the 'Master Servicer'), if any, for each series of
Certificates will be named in the related Prospectus Supplement. See
'Description of the Agreements--Collection and Other Servicing Procedures'.
SPECIAL SERVICER
The special servicer (the 'Special Servicer'), if any, for each series of
Certificates will be named, or the circumstances in accordance with which a
Special Servicer will be appointed will be described, in the related Prospectus
Supplement. See 'Description of the Agreements--Special Servicer'.
TRUSTEE
The trustee (the 'Trustee') for each series of Certificates will be named
in the related Prospectus Supplement. See 'Description of the Agreements--The
Trustee'.
THE TRUST ASSETS
Each series of Certificates will represent in the aggregate the entire
beneficial ownership interest in a Trust Fund consisting primarily of:
(A) MORTGAGE ASSETS
The Mortgage Assets with respect to each series of Certificates will
consist of a pool of commercial mortgage loans (the 'Mortgage Loans').
Except to the extent described in the related Prospectus Supplement, the
Mortgage Loans will not be guaranteed or insured by the Depositor or any of
its affiliates or by any governmental agency or instrumentality or other
person. As more specifically described herein, the Mortgage Loans will be
secured by liens on, or security interests in, properties consisting of
shopping centers (the 'Commercial Properties', or sometimes referred to
herein as the 'Mortgaged Properties'). The Mortgaged Properties may be
located in any one of the fifty states or the District of Columbia or such
other locations as are disclosed in the related Prospectus Supplement. All
Mortgage Loans will have individual principal balances at origination of
not less than $25,000 and original terms to maturity of not more than 40
years. All Mortgage Loans will have been originated by persons other than
the Depositor, and all Mortgage Assets will have been purchased, either
directly or indirectly, by the Depositor on or before the date of initial
issuance of the related series of Certificates. As described herein and in
the Prospectus Supplement, each Mortgage Loan may (i) provide for no
accrual of interest or for accrual of interest thereon at an interest rate
(a 'Mortgage Rate') that is fixed over its term or that adjusts from time
to time, or that may be converted from an adjustable to a fixed Mortgage
Rate, or from a fixed to an adjustable Mortgage Rate, from time to time at
the mortgagor's election; (ii) provide for scheduled payments to maturity,
payments that adjust from time to time in accommodate changes in the
Mortgage Rate or to reflect the occurrence of certain events, and may
provide negative amortization or accelerated amortization; (iii) be fully
amortizing or require a balloon payment due on its stated maturity date;
(iv) contain prohibitions on prepayment or require payment of a premium or
a yield maintenance penalty in connection with a prepayment; and (v)
provide for payments of principal, interest or both, on due dates that
occur monthly, quarterly, semi-annually or other interval. See 'Description
of the Trust Funds--Mortgage Assets'.
7
<PAGE>
[RETAIL PROPERTIES VERSION]
Mortgage Loan. With respect to those Mortgage Loans that provide for recourse
against the mortgagor and its assets generally, there can be no assurance that
such recourse will ensure a recovery in respect of a defaulted Mortgage Loan
greater than the liquidation value of the related Mortgaged Property.
Further, the concentration of default, foreclosure and loss risks in
individual mortgagors or Mortgage Loans in a particular Trust Fund or the
related Mortgaged Properties will generally be greater than for pools of
single-family loans both because the Mortgage Assets in a Trust Fund will
generally consist of a smaller number of loans than would a single-family pool
of comparable aggregate unpaid principal balance and because of the higher
principal balance of individual Mortgage Loans.
RETAIL PROPERTIES
Significant factors determining the value of retail properties are the
quality of the tenants as well as fundamental aspects of real estate such as
location and market demographics. The correlation between the success of tenant
businesses and property value is more direct with respect to retail properties
than other types of commercial property because a significant component of the
total rent paid by retail tenants is often tied to a percentage of gross sales.
Whether a retail property is 'anchored' or 'unanchored' is also an important
distinction. Retail properties that are anchored have traditionally been
percived to be less risky. While there is no strict definition of an anchor, it
is generally understood that a retail anchor tenant is proportionately large in
size and is vital in attracting customers to the property. Furthermore, the
correlation between the success of tenant businesses and property value is
increased when the property is a single tenant property.
Unlike office or hotel properties, retail properties also face competition
from sources outside a given real estate market. Catalogue retailers, home
shopping networks, telemarketing and outlet centers all compete with more
traditional retail properties for consumer dollars. Continued growth of these
alternative retail outlets (which are often characterized by lower operating
costs) could adversely affect the rent collectible at the retail properties
included in the Mortgaged Properties.
BALLOON PAYMENTS
Certain of the Mortgage Loans as of the Cut-off Date may not be fully
amortizing over their terms to maturity and, thus, will require substantial
principal payments (i.e., balloon payments) at their stated maturity. Mortgage
Loans with balloon payments involve a greater degree of risk because the ability
of a mortgagor to make a balloon payment typically will depend upon its ability
either to timely refinance the loan or to timely sell the related Mortgaged
Property. The ability of a mortgagor to accomplish either of these goals will be
affected by a number of factors, including the level of available mortgage rates
at the time of sale or refinancing, the mortgagor's equity in the related
Mortgaged Property, the financial condition and operating history of the
mortgagor and the related Mortgaged Property, tax laws, rent control laws (with
respect to certain Multifamily Properties and mobile home parks), reimbursement
rates (with respect to certain hospitals, nursing homes and convalescent homes),
renewability of operating licenses, prevailing general economic conditions and
the availability of credit for commercial or multifamily, as the case may be,
real properties generally.
OBLIGOR DEFAULT
In order to maximize recoveries on defaulted Mortgage Loans, a Master
Servicer typically will have considerable flexibility to extend and modify
Mortgage Loans that are in default or as to which a payment default is
reasonably foreseeable, including in particular with respect to balloon
payments. In addition, a Master Servicer or a Special Servicer may receive a
workout fee based on receipts from or proceeds of such Mortgage Loans. While a
Master Servicer generally will be required to determine that any such extension
or modification is likely to produce a greater recovery on a present value basis
than liquidation, there can be no assurance that such flexibility with respect
to extensions or modifications or payment of a workout fee will increase the
present value of receipts from or proceeds of Mortgage Loans that are in default
or as to which a default is reasonably foreseeable. The recent foreclosure and
delinquency experience with respect to loans serviced by a Master Servicer or,
if applicable, any Special Servicer or significant Sub-Servicer will be provided
in the related Prospectus Supplement.
MORTGAGOR TYPE
Mortgage Loans made to partnerships, corporations or other entities may
entail risks of loss from delinquency and foreclosure that are greater than
those of Mortgage Loans made to individuals. Partnerships, corporations and
certain other types of organizations generally limit the liability of the
beneficial owners of such organizations for the obligations of such
organizations,
13
<PAGE>
[RETAIL PROPERTIES VERSION]
DESCRIPTION OF THE TRUST FUNDS
MORTGAGE ASSETS
The primary assets of each Trust Fund (the 'Mortgage Assets') will include
mortgage loans secured by liens on, or security interests in, retail properties
(the 'Mortgage Loans'). The Mortgage Assets will not be guaranteed or insured by
the Depositor or any of its affiliates. The Prospectus Supplement will describe
any guarantee or insurance relating to the Mortgage Assets by any governmental
agency or instrumentality or by any other person. Each Mortgage Asset will be
selected by the Depositor for inclusion in a Trust Fund from among those
purchased, either directly or indirectly, from a prior holder thereof (a
'Mortgage Asset Seller'), which prior holder may or may not be the originator of
such Mortgage Loan and may be an affiliate of the Depositor.
MORTGAGE LOANS
The Mortgage Loans will be secured by liens on, or security interests in,
Mortgaged Properties consisting of retail properties located in any one of the
fifty states or the District of Columbia or such other locations as are
disclosed in the related Prospectus Supplement. The Mortgage Loans will be
secured by mortgages or deeds of trust or other similar security instruments
creating a first or more junior lien on Mortgaged Properties. The Mortgaged
Properties may include leasehold interest in properties, the title to which is
held by third party lessors. The term of any such leasehold will exceed the term
of the mortgage note by at least ten years. Each Mortgage Loan will have been
originated by a person (the 'Originator') other than the Depositor. The Mortgage
Loans will be evidenced by promissory notes (the 'Mortgage Notes') secured by
mortgages or deeds of trust (the 'Mortgages') creating a lien on the Mortgaged
Properties. Mortgage Loans will generally also be secured by an assignment of
leases and rents and/or operating or other cash flow guarantees relating to the
Mortgage Loan.
DEFAULT AND LOSS CONSIDERATIONS WITH RESPECT TO THE MORTGAGE LOANS
Mortgage Loans secured by commercial and multifamily properties are
markedly different from owner-occupied single-family home mortgage loans. The
repayment of loans secured by commercial or multifamily properties is typically
dependent upon the successful operation of such property rather than upon the
liquidation value of the real estate. The Mortgage Loans will be non-recourse
loans, which means that, absent special facts, the mortgagee may look only to
the Net Operating Income from the property for repayment of the mortgage debt,
and not to any other of the mortgagor's assets, in the event of the mortgagor's
default. Lenders typically look to the Debt Service Coverage Ratio of a loan
secured by income-producing property as an important measure of the risk of
default on such a loan. The 'Debt Service Coverage Ratio' of a Mortgage Loan at
any given time is the ratio of the Net Operating Income for a twelve-month
period to the annualized scheduled payments on the Mortgage Loan. 'Net Operating
Income' is typically defined as total operating revenues (including primarily
rental income and any expense reimbursement, ancillary income, late charges and
deposit forfeitures) minus total operating expenses (including primarily
expenses for advertising, general administration, management fees and
disbursements, utilities, repairs and maintenance, insurance, real estate taxes
and replacement reserves based solely on the mortgagor's estimates of the useful
lives of various assets). Net Operating Income does not reflect capital
expenditures or partnership expenses. The Net Operating Income of a Mortgaged
Property will fluctuate over time and may be sufficient or insufficient to cover
debt service on the related Mortgage Loan at any given time.
As the primary component of Net Operating Income, rental income (and
maintenance payments from tenant-stockholders of a Cooperative) is subject to
the vagaries of the applicable real estate market and/or business climate.
Properties typically leased, occupied or used on a short-term basis, such as
health care-related facilities, hotels and motels, and mini-warehouse and self-
storage facilities, tend to be affected more rapidly by changes in market or
business conditions than do properties leased, occupied or used for longer
periods, such as (typically) warehouses, retail stores, office buildings and
industrial plants. Commercial Loans may be secured by owner-occupied Mortgaged
Properties or Mortgaged Properties leased to a single tenant. Accordingly, a
decline in the financial condition of the mortgagor or single tenant, as
applicable, may have a disproportionately greater effect on the Net Operating
Income from such Mortgaged Properties than would be the case with respect to
Mortgaged Properties with multiple tenants.
Changes in the expense components of Net Operating Income due to the
general economic climate or economic conditions in a locality or industry
segment, such as increases in interest rates, real estate and personal property
tax rates and other operating
17
<PAGE>
OFFICE PROPERTIES VERSION
The following are alternate pages to the base prospectus for a form of base
prospectus for a series of commercial mortgage pass-through certificates backed
by loans secured by office properties. Disclosure made on the following
alternate pages will be included in the base prospectus for each series of
Certificates backed by loans containing a material concentration of Mortgage
Loans secured by office properties.
<PAGE>
[OFFICE PROPERTIES VERSION]
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS TO WHICH IT RELATES
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS DATED NOVEMBER 12, 1997
(SUBJECT TO COMPLETION)
MORTGAGE PASS-THROUGH CERTIFICATES
(ISSUABLE IN SERIES)
NOMURA ASSET SECURITIES CORPORATION
DEPOSITOR
The Certificates offered hereby and by Supplements to this Prospectus (the
'Offered Certificates') will be offered from time to time in series. Each series
of Certificates will represent in the aggregate the entire beneficial ownership
interest in a trust fund (with respect to any series, the 'Trust Fund')
consisting of a segregated pool of various types of mortgage loans secured by
liens on, or security interests in, office properties (the 'Mortgage Loans', or
sometimes referred to herein as the 'Mortgage Assets'). The Trust Fund for a
series of Certificates may also include letters of credit, insurance policies,
guarantees, reserve funds or other types of credit support, or any combination
thereof (with respect to any series, collectively, 'Credit Support'), and
currency or interest rate exchange agreements and other financial assets, or any
combination thereof (with respect to any series, collectively, 'Cash Flow
Agreements'). See 'Description of the Trust Funds', 'Description of the
Certificates' and 'Description of Credit Support'.
Each series of Certificates will consist of one or more classes of
Certificates that may (i) provide for the accrual of interest thereon based on
fixed, variable or adjustable rates; (ii) be senior or subordinate to one or
more other classes of Certificates in respect of certain distributions on the
Certificates; (iii) be entitled to principal distributions, with
disproportionately low, nominal or no interest distributions; (iv) be entitled
to interest distributions, with disproportionately low, nominal or no principal
distributions; (v) provide for distributions of accrued interest thereon only
following the occurrence of certain events, such as the retirement of one or
more other classes of Certificates of such series; or (vi) provide for
distributions of principal sequentially, or based on specified payment
schedules, to the extent of available funds, in each case as described in the
related Prospectus Supplement. Any such classes may include classes of Offered
Certificates. See 'Description of the Certificates'.
Principal and interest with respect to Certificates will be distributable
monthly, quarterly, semi-annually or at such other intervals and on the dates
specified in the related Prospectus Supplement. Distributions on the
Certificates of any series will be made only from the assets of the related
Trust Fund.
The Certificates of each series will not represent an obligation of or
interest in the Depositor, any Master Servicer, any Special Servicer or any of
their respective affiliates, except to the limited extent described herein and
in the related Prospectus Supplement. Only those Certificates and assets in the
related Trust Fund as are disclosed in the related Prospectus Supplement will be
guaranteed or insured by any governmental agency or instrumentality or by any
other person. The assets in each Trust Fund will be held in trust for the
benefit of the holders of the related series of Certificates pursuant to a
Pooling and Servicing Agreement or a Trust Agreement, as more fully described
herein.
The yield on each class of Certificates of a series will be affected by,
among other things, the rate of payment of principal (including voluntary and
involuntary prepayments) on the Mortgage Assets in the related Trust Fund and
the timing of receipt of such payments as described under the caption 'Yield
Considerations' herein and in the related Prospectus Supplement. A Trust Fund
may be subject to early termination under the circumstances described herein and
in the related Prospectus Supplement.
Prospective investors should review the information appearing under the
caption 'Risk Factors' herein and such information as may be set forth under the
caption 'Risk Factors' in the related Prospectus Supplement before purchasing
any Offered Certificate.
If so provided in the related Prospectus Supplement, one or more elections
may be made to treat the related Trust Fund or a designated portion thereof as
one or more 'real estate mortgage investment conduits' for federal income tax
purposes. See also 'Federal Income Tax Consequences' herein.
PROSPECTIVE INVESTORS SHOULD REVIEW THE DISCUSSION OF MATERIAL RISKS
APPEARING UNDER THE CAPTION 'RISK FACTORS' HEREIN COMMENCING ON PAGE 11.
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.
Prior to issuance there will have been no market for the Certificates of any
series and there can be no assurance that a secondary market for any Offered
Certificates will develop or that, if it does develop, it will continue. This
Prospectus may not be used to consummate sales of a series of Offered
Certificates unless accompanied by a Prospectus Supplement.
Offers of the Offered Certificates may be made through one or more different
methods, including offerings through underwriters, as more fully described under
'Method of Distribution' herein and in the related Prospectus Supplement. All
Offered Certificates will be distributed by, or sold by underwriters managed by:
NOMURA SECURITIES INTERNATIONAL, INC.
THE DATE OF THIS PROSPECTUS IS , 199
<PAGE>
[OFFICE PROPERTIES VERSION]
SUMMARY OF PROSPECTUS
The following summary of material information does not contain all the
material information regarding the Certificates and is qualified in its entirety
by reference to the more detailed information appearing elsewhere in this
Prospectus and by reference to the information with respect to each series of
Certificates contained in the Prospectus Supplement to be prepared and delivered
in connection with the offering of such series. An Index of Principal
Definitions is included at the end of this Prospectus.
TITLE OF CERTIFICATES
Mortgage Pass-Through Certificates, issuable in series (the
'Certificates').
DEPOSITOR
Nomura Asset Securities Corporation, a wholly-owned subsidiary of Nomura
Asset Capital Corporation. See 'The Depositor'.
MASTER SERVICER
The master servicer (the 'Master Servicer'), if any, for each series of
Certificates will be named in the related Prospectus Supplement. See
'Description of the Agreements--Collection and Other Servicing Procedures'.
SPECIAL SERVICER
The special servicer (the 'Special Servicer'), if any, for each series of
Certificates will be named, or the circumstances in accordance with which a
Special Servicer will be appointed will be described, in the related Prospectus
Supplement. See 'Description of the Agreements--Special Servicer'.
TRUSTEE
The trustee (the 'Trustee') for each series of Certificates will be named
in the related Prospectus Supplement. See 'Description of the Agreements--The
Trustee'.
THE TRUST ASSETS
Each series of Certificates will represent in the aggregate the entire
beneficial ownership interest in a Trust Fund consisting primarily of:
(A) MORTGAGE ASSETS
The Mortgage Assets with respect to each series of Certificates will
consist of a pool of commercial mortgage loans (the 'Mortgage Loans').
Except to the extent described in the related Prospectus Supplement, the
Mortgage Loans will not be guaranteed or insured by the Depositor or any of
its affiliates or by any governmental agency or instrumentality or other
person. As more specifically described herein, the Mortgage Loans will be
secured by liens on, or security interest in, office properties (the
'Commercial Properties,' or sometimes referred to herein as the 'Mortgaged
Properties'). The Mortgaged Properties may be located in any one of the
fifty states or the District of Columbia or such other locations as are
disclosed in the related Prospectus Supplement. All Mortgage Loans will
have individual principal balances at origination of not less than $25,000
and original terms to maturity of not more than 40 years. All Mortgage
Loans will have been originated by persons other than the Depositor, and
all Mortgage Assets will have been purchased, either directly or
indirectly, by the Depositor on or before the date of initial issuance of
the related series of Certificates. As described herein and in the
Prospectus Supplement, each Mortgage Loan may (i) provide for no accrual of
interest or for accrual of interest thereon at an interest rate (a
'Mortgage Rate') that is fixed over its term or that adjusts from time to
time, or that may be converted from an adjustable to a fixed Mortgage Rate,
or from a fixed to an adjustable Mortgage Rate, from time to time at the
mortgagor's election; (ii) provide for scheduled payments to maturity,
payments that adjust from time to time in accommodate changes in the
Mortgage Rate or to reflect the occurrence of certain events, and may
provide negative amortization or accelerated amortization; (iii) be fully
amortizing or require a balloon payment due on its stated maturity date;
(iv) contain prohibitions on prepayment or require payment of a premium or
a yield maintenance penalty in connection with a prepayment; and (v)
provide for payments of principal, interest or both, on due dates that
occur monthly, quarterly, semi-annually or other interval. See 'Description
of the Trust Funds--Mortgage Assets'.
7
<PAGE>
[OFFICE PROPERTIES VERSION]
Mortgage Loan. With respect to those Mortgage Loans that provide for recourse
against the mortgagor and its assets generally, there can be no assurance that
such recourse will ensure a recovery in respect of a defaulted Mortgage Loan
greater than the liquidation value of the related Mortgaged Property.
Further, the concentration of default, foreclosure and loss risks in
individual mortgagors or Mortgage Loans in a particular Trust Fund or the
related Mortgaged Properties will generally be greater than for pools of
single-family loans both because the Mortgage Assets in a Trust Fund will
generally consist of a smaller number of loans than would a single-family pool
of comparable aggregate unpaid principal balance and because of the higher
principal balance of individual Mortgage Loans.
OFFICE PROPERTIES
Significant factors determining the value of office properties are the
quality of the tenants in the building, the physical attributes of the building
in relation to competing buildings and the strength and stability of the market
area as a desirable business location. Office properties may be adversely
affected if there is an economic decline in the business operated by the
tenants. The risk of such an adverse effect is increased if revenue is dependent
on a single tenant or if there is a significant concentration of tenants in a
particular business or industry.
Office properties are also subject to competition with other office
properties in the same market. Competition is affected by a property's age,
condition, design (e.g. floor sizes and layout), access to transportation and
ability or inability to offer certain amenities to its tenants, including
sophisticated building systems (such as fiberoptic cables, satellite
communications or other base building technological features).
The success of an office property also depends on the local economy. A
company's decision to locate office headquarters in a given area, for example,
may be affected by such factors as labor cost and quality, tax environment and
quality of life issues such as schools and cultural amenities. A central
business district may have an economy which is markedly different from that of a
suburb. The local economy will impact on an office property's ability to attract
stable tenants on a consistent basis. In addition, the cost of refitting office
space of a new tenant is often more costly than for other property types.
BALLOON PAYMENTS
Certain of the Mortgage Loans as of the Cut-off Date may not be fully
amortizing over their terms to maturity and, thus, will require substantial
principal payments (i.e., balloon payments) at their stated maturity. Mortgage
Loans with balloon payments involve a greater degree of risk because the ability
of a mortgagor to make a balloon payment typically will depend upon its ability
either to timely refinance the loan or to timely sell the related Mortgaged
Property. The ability of a mortgagor to accomplish either of these goals will be
affected by a number of factors, including the level of available mortgage rates
at the time of sale or refinancing, the mortgagor's equity in the related
Mortgaged Property, the financial condition and operating history of the
mortgagor and the related Mortgaged Property, tax laws, rent control laws (with
respect to certain Multifamily Properties and mobile home parks), reimbursement
rates (with respect to certain hospitals, nursing homes and convalescent homes),
renewability of operating licenses, prevailing general economic conditions and
the availability of credit for commercial or multifamily, as the case may be,
real properties generally.
OBLIGOR DEFAULT
In order to maximize recoveries on defaulted Mortgage Loans, a Master
Servicer typically will have considerable flexibility to extend and modify
Mortgage Loans that are in default or as to which a payment default is
reasonably foreseeable, including in particular with respect to balloon
payments. In addition, a Master Servicer or a Special Servicer may receive a
workout fee based on receipts from or proceeds of such Mortgage Loans. While a
Master Servicer generally will be required to determine that any such extension
or modification is likely to produce a greater recovery on a present value basis
than liquidation, there can be no assurance that such flexibility with respect
to extensions or modifications or payment of a workout fee will increase the
present value of receipts from or proceeds of Mortgage Loans that are in default
or as to which a default is reasonably foreseeable. The recent foreclosure and
delinquency experience with respect to loans serviced by a Master Servicer or,
if applicable, any Special Servicer or significant Sub-Servicer will be provided
in the related Prospectus Supplement.
13
<PAGE>
[OFFICE PROPERTIES VERSION]
DESCRIPTION OF THE TRUST FUNDS
MORTGAGE ASSETS
The primary assets of each Trust Fund (the 'Mortgage Assets') will include
mortgage loans secured by liens on, or security interests in, office properties
(the 'Mortgage Loans'). The Mortgage Assets will not be guaranteed or insured by
the Depositor or any of its affiliates. The Prospectus Supplement will describe
any guarantee or insurance relating to the Mortgage Assets by any governmental
agency or instrumentality or by any other person. Each Mortgage Asset will be
selected by the Depositor for inclusion in a Trust Fund from among those
purchased, either directly or indirectly, from a prior holder thereof (a
'Mortgage Asset Seller'), which prior holder may or may not be the originator of
such Mortgage Loan and may be an affiliate of the Depositor.
MORTGAGE LOANS
The Mortgage Loans will be secured by liens on, or security interests in,
Mortgaged Properties consisting of office buildings (sometimes referred to
herein as 'Commercial Properties' and the related loans, 'Commercial Loans')
located in any one of the fifty states or the District of Columbia or such other
locations as are disclosed in the related Prospectus Supplement. The Mortgage
Loans will be secured by mortgages or deeds of trust or other similar security
instruments creating a first or more junior lien on Mortgaged Properties. The
Mortgaged Properties may include leasehold interest in properties, the title to
which is held by third party lessors. The term of any such leasehold will exceed
the term of the mortgage note by at least ten years. Each Mortgage Loan will
have been originated by a person (the 'Originator') other than the Depositor.
The Mortgage Loans will be evidenced by promissory notes (the 'Mortgage Notes')
secured by mortgages or deeds of trust (the 'Mortgages') creating a lien on the
Mortgaged Properties. Mortgage Loans will generally also be secured by an
assignment of leases and rents and/or operating or other cash flow guarantees
relating to the Mortgage Loan.
DEFAULT AND LOSS CONSIDERATIONS WITH RESPECT TO THE MORTGAGE LOANS
Mortgage Loans secured by commercial and multifamily properties are
markedly different from owner-occupied single-family home mortgage loans. The
repayment of loans secured by commercial or multifamily properties is typically
dependent upon the successful operation of such property rather than upon the
liquidation value of the real estate. The Mortgage Loans will be non-recourse
loans, which means that, absent special facts, the mortgagee may look only to
the Net Operating Income from the property for repayment of the mortgage debt,
and not to any other of the mortgagor's assets, in the event of the mortgagor's
default. Lenders typically look to the Debt Service Coverage Ratio of a loan
secured by income-producing property as an important measure of the risk of
default on such a loan. The 'Debt Service Coverage Ratio' of a Mortgage Loan at
any given time is the ratio of the Net Operating Income for a twelve-month
period to the annualized scheduled payments on the Mortgage Loan. 'Net Operating
Income' is typically defined as total operating revenues (including primarily
rental income and any expense reimbursement, ancillary income, late charges and
deposit forfeitures) minus total operating expenses (including primarily
expenses for advertising, general administration, management fees and
disbursements, utilities, repairs and maintenance, insurance, real estate taxes
and replacement reserves based solely on the mortgagor's estimates of the useful
lives of various assets). Net Operating Income does not reflect capital
expenditures or partnership expenses. The Net Operating Income of a Mortgaged
Property will fluctuate over time and may be sufficient or insufficient to cover
debt service on the related Mortgage Loan at any given time.
As the primary component of Net Operating Income, rental income (and
maintenance payments from tenant-stockholders of a Cooperative) is subject to
the vagaries of the applicable real estate market and/or business climate.
Properties typically leased, occupied or used on a short-term basis, such as
health care-related facilities, hotels and motels, and mini-warehouse and self-
storage facilities, tend to be affected more rapidly by changes in market or
business conditions than do properties leased, occupied or used for longer
periods, such as (typically) warehouses, retail stores, office buildings and
industrial plants. Commercial Loans may be secured by owner-occupied Mortgaged
Properties or Mortgaged Properties leased to a single tenant. Accordingly, a
decline in the financial condition of the mortgagor or single tenant, as
applicable, may have a disproportionately greater effect on the Net Operating
Income from such Mortgaged Properties than would be the case with respect to
Mortgaged Properties with multiple tenants.
Changes in the expense components of Net Operating Income due to the
general economic climate or economic conditions in a locality or industry
segment, such as increases in interest rates, real estate and personal property
tax rates and other operating expenses including energy costs; changes in
governmental rules, regulations and fiscal policies, including environmental
legislation; and acts of God may also affect the risk of default on the related
Mortgage Loan. As may be further described in the related Prospectus Supplement,
in some cases leases of Mortgaged Properties may provide that the lessee, rather
than
17
<PAGE>
HOTEL PROPERTIES VERSION
The following are alternate pages to the base prospectus for a form of base
prospectus for a series of commercial mortgage pass-through certificates backed
by loans secured by hotel properties. Disclosure made on the
following alternate pages will be included in the base prospectus for each
series of Certificates backed by loans containing a material concentration of
Mortgage Loans secured by hotel properties.
<PAGE>
[HOTEL PROPERTIES VERSION]
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS TO WHICH IT RELATES
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS DATED NOVEMBER 12, 1997
(SUBJECT TO COMPLETION)
MORTGAGE PASS-THROUGH CERTIFICATES
(ISSUABLE IN SERIES)
NOMURA ASSET SECURITIES CORPORATION
DEPOSITOR
The Certificates offered hereby and by Supplements to this Prospectus (the
'Offered Certificates') will be offered from time to time in series. Each series
of Certificates will represent in the aggregate the entire beneficial ownership
interest in a trust fund (with respect to any series, the 'Trust Fund')
consisting of a segregated pool of mortgage loans secured by liens on, or
security interests in, hotel properties (the 'Mortgage Loans,' or sometimes
referred to herein as the 'Mortgage Assets'). The Trust Fund for a series of
Certificates may also include letters of credit, insurance policies, guarantees,
reserve funds or other types of credit support, or any combination thereof (with
respect to any series, collectively, 'Credit Support'), and currency or interest
rate exchange agreements and other financial assets, or any combination thereof
(with respect to any series, collectively, 'Cash Flow Agreements'). See
'Description of the Trust Funds', 'Description of the Certificates' and
'Description of Credit Support'.
Each series of Certificates will consist of one or more classes of
Certificates that may (i) provide for the accrual of interest thereon based on
fixed, variable or adjustable rates; (ii) be senior or subordinate to one or
more other classes of Certificates in respect of certain distributions on the
Certificates; (iii) be entitled to principal distributions, with
disproportionately low, nominal or no interest distributions; (iv) be entitled
to interest distributions, with disproportionately low, nominal or no principal
distributions; (v) provide for distributions of accrued interest thereon only
following the occurrence of certain events, such as the retirement of one or
more other classes of Certificates of such series; or (vi) provide for
distributions of principal sequentially, or based on specified payment
schedules, to the extent of available funds, in each case as described in the
related Prospectus Supplement. Any such classes may include classes of Offered
Certificates. See 'Description of the Certificates'.
Principal and interest with respect to Certificates will be distributable
monthly, quarterly, semi-annually or at such other intervals and on the dates
specified in the related Prospectus Supplement. Distributions on the
Certificates of any series will be made only from the assets of the related
Trust Fund.
The Certificates of each series will not represent an obligation of or
interest in the Depositor, any Master Servicer, any Special Servicer or any of
their respective affiliates, except to the limited extent described herein and
in the related Prospectus Supplement. Only those Certificates and assets in the
related Trust Fund as are disclosed in the related Prospectus Supplement will be
guaranteed or insured by any governmental agency or instrumentality or by any
other person. The assets in each Trust Fund will be held in trust for the
benefit of the holders of the related series of Certificates pursuant to a
Pooling and Servicing Agreement or a Trust Agreement, as more fully described
herein.
The yield on each class of Certificates of a series will be affected by,
among other things, the rate of payment of principal (including voluntary and
involuntary prepayments) on the Mortgage Assets in the related Trust Fund and
the timing of receipt of such payments as described under the caption 'Yield
Considerations' herein and in the related Prospectus Supplement. A Trust Fund
may be subject to early termination under the circumstances described herein and
in the related Prospectus Supplement.
Prospective investors should review the information appearing under the
caption 'Risk Factors' herein and such information as may be set forth under the
caption 'Risk Factors' in the related Prospectus Supplement before purchasing
any Offered Certificate.
If so provided in the related Prospectus Supplement, one or more elections
may be made to treat the related Trust Fund or a designated portion thereof as
one or more 'real estate mortgage investment conduits' for federal income tax
purposes. See also 'Federal Income Tax Consequences' herein.
PROSPECTIVE INVESTORS SHOULD REVIEW THE DISCUSSION OF MATERIAL RISKS
APPEARING UNDER THE CAPTION 'RISK FACTORS' HEREIN COMMENCING ON PAGE 11.
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.
Prior to issuance there will have been no market for the Certificates of any
series and there can be no assurance that a secondary market for any Offered
Certificates will develop or that, if it does develop, it will continue. This
Prospectus may not be used to consummate sales of a series of Offered
Certificates unless accompanied by a Prospectus Supplement.
Offers of the Offered Certificates may be made through one or more different
methods, including offerings through underwriters, as more fully described under
'Method of Distribution' herein and in the related Prospectus Supplement. All
Offered Certificates will be distributed by, or sold by underwriters managed by:
NOMURA SECURITIES INTERNATIONAL, INC.
THE DATE OF THIS PROSPECTUS IS , 199
<PAGE>
[HOTEL PROPERTIES VERSION]
SUMMARY OF PROSPECTUS
The following summary of material information does not contain all the
material information regarding the Certificates and is qualified in its entirety
by reference to the more detailed information appearing elsewhere in this
Prospectus and by reference to the information with respect to each series of
Certificates contained in the Prospectus Supplement to be prepared and delivered
in connection with the offering of such series. An Index of Principal
Definitions is included at the end of this Prospectus.
TITLE OF CERTIFICATES
Mortgage Pass-Through Certificates, issuable in series (the
'Certificates').
DEPOSITOR
Nomura Asset Securities Corporation, a wholly-owned subsidiary of Nomura
Asset Capital Corporation. See 'The Depositor'.
MASTER SERVICER
The master servicer (the 'Master Servicer'), if any, for each series of
Certificates will be named in the related Prospectus Supplement. See
'Description of the Agreements--Collection and Other Servicing Procedures'.
SPECIAL SERVICER
The special servicer (the 'Special Servicer'), if any, for each series of
Certificates will be named, or the circumstances in accordance with which a
Special Servicer will be appointed will be described, in the related Prospectus
Supplement. See 'Description of the Agreements--Special Servicer'.
TRUSTEE
The trustee (the 'Trustee') for each series of Certificates will be named
in the related Prospectus Supplement. See 'Description of the Agreements--The
Trustee'.
THE TRUST ASSETS
Each series of Certificates will represent in the aggregate the entire
beneficial ownership interest in a Trust Fund consisting primarily of:
(A) MORTGAGE ASSETS
The Mortgage Assets with respect to each series of Certificates will
consist of a pool of commercial mortgage loans (the 'Mortgage Loans').
Except to the extent described in the related Prospectus Supplement, the
Mortgage Loans will not be guaranteed or insured by the Depositor or any of
its affiliates or by any governmental agency or instrumentality or other
person. As more specifically described herein, the Mortgage Loans will be
secured by liens on, or security interests in, properties consisting of
hotels and motels (the 'Commercial Properties', or sometimes referred to
herein as the 'Mortgaged Properties'). The Mortgaged Properties may be
located in any one of the fifty states or the District of Columbia or such
other locations as are disclosed in the related Prospectus Supplement. All
Mortgage Loans will have individual principal balances at origination of
not less than $25,000 and original terms to maturity of not more than 40
years. All Mortgage Loans will have been originated by persons other than
the Depositor, and all Mortgage Assets will have been purchased, either
directly or indirectly, by the Depositor on or before the date of initial
issuance of the related series of Certificates. As described herein and in
the Prospectus Supplement, each Mortgage Loan may (i) provide for no
accrual of interest or for accrual of interest thereon at an interest rate
(a 'Mortgage Rate') that is fixed over its term or that adjusts from time
to time, or that may be converted from an adjustable to a fixed Mortgage
Rate, or from a fixed to an adjustable Mortgage Rate, from time to time at
the mortgagor's election; (ii) provide for scheduled payments to maturity,
payments that adjust from time to time in accommodate changes in the
Mortgage Rate or to reflect the occurrence of certain events, and may
provide negative amortization or accelerated amortization; (iii) be fully
amortizing or require a balloon payment due on its stated maturity date;
(iv) contain prohibitions on prepayment or require payment of a premium or
a yield maintenance penalty in connection with a prepayment; and (v)
provide for payments of principal, interest or both, on due dates that
occur monthly, quarterly, semi-annually or other interval. See 'Description
of the Trust Funds--Mortgage Assets'.
7
<PAGE>
[HOTEL PROPERTIES VERSION]
Mortgage Loan. With respect to those Mortgage Loans that provide for recourse
against the mortgagor and its assets generally, there can be no assurance that
such recourse will ensure a recovery in respect of a defaulted Mortgage Loan
greater than the liquidation value of the related Mortgaged Property.
Further, the concentration of default, foreclosure and loss risks in
individual mortgagors or Mortgage Loans in a particular Trust Fund or the
related Mortgaged Properties will generally be greater than for pools of
single-family loans both because the Mortgage Assets in a Trust Fund will
generally consist of a smaller number of loans than would a single-family pool
of comparable aggregate unpaid principal balance and because of the higher
principal balance of individual Mortgage Loans.
HOTEL PROPERTIES
Various factors, including location, quality and franchise affiliation
affect the economic performance of a hotel. Adverse economic conditions, either
local, regional or national, may limit the amount that can be charged for a room
and may result in a reduction in occupancy levels. The construction of competing
hotels can have similar effects. To meet competition in the industry and to
maintain economic values, continuing expenditures must be made for modernizing,
refurbishing, and maintaining existing facilities prior to the expiration of
their anticipated useful lives. Because hotel rooms are generally rented for
short periods of time, hotels tend to respond more quickly to adverse economic
conditions and competition than do other commercial properties. Furthermore, the
financial strength and capabilities of the owner and operator of a hotel may
have a substantial impact on such hotel's quality of service and economic
performance. Additionally, the hotel and lodging industry is generally seasonal
in nature and this seasonality can be expected to cause periodic fluctuations in
room and other revenues, occupancy levels, room rates and operating expenses.
The demand for particular accommodations may also be affected by changes in
travel patterns caused by changes in energy prices, strikes, relocation of
highways, the construction of additional highways and other factors.
Hotel properties may be franchises of national or regional hotel chains.
The viability of any such hotel property depends in part on the continued
existence and financial strength of the franchisor, the public perception of the
franchise service mark and the duration of the franchise licensing agreements.
The transferability of franchise license agreements may be restricted and, in
the event of a foreclosure on any such hotel property, the mortgage may not have
the right to use the franchise license without the franchisor's consent.
Conversely, a lender may be unable to remove a franchisor that it desires to
replace following a foreclosure. Further, in the event of a foreclosure on a
hotel property, it is unlikely that the Trustee (or Master Servicer or Special
Servicer) or purchaser of such hotel property would be entitled to the rights
under any liquor license for such hotel property and such party would be
required to apply in its own right for such license or licenses. There can be no
assurance that a new license could be obtained or that it could be obtained
promptly.
BALLOON PAYMENTS
Certain of the Mortgage Loans as of the Cut-off Date may not be fully
amortizing over their terms to maturity and, thus, will require substantial
principal payments (i.e., balloon payments) at their stated maturity. Mortgage
Loans with balloon payments involve a greater degree of risk because the ability
of a mortgagor to make a balloon payment typically will depend upon its ability
either to timely refinance the loan or to timely sell the related Mortgaged
Property. The ability of a mortgagor to accomplish either of these goals will be
affected by a number of factors, including the level of available mortgage rates
at the time of sale or refinancing, the mortgagor's equity in the related
Mortgaged Property, the financial condition and operating history of the
mortgagor and the related Mortgaged Property, tax laws, rent control laws (with
respect to certain Multifamily Properties and mobile home parks), reimbursement
rates (with respect to certain hospitals, nursing homes and convalescent homes),
renewability of operating licenses, prevailing general economic conditions and
the availability of credit for commercial or multifamily, as the case may be,
real properties generally.
OBLIGOR DEFAULT
In order to maximize recoveries on defaulted Mortgage Loans, a Master
Servicer typically will have considerable flexibility to extend and modify
Mortgage Loans that are in default or as to which a payment default is
reasonably foreseeable, including in particular with respect to balloon
payments. In addition, a Master Servicer or a Special Servicer may receive a
workout fee based on receipts from or proceeds of such Mortgage Loans. While a
Master Servicer generally will be required to determine that any such extension
or modification is likely to produce a greater recovery on a present value basis
than liquidation, there can be no assurance that such flexibility with respect
to extensions or modifications or payment of a workout fee will increase the
present value of receipts from or proceeds of Mortgage Loans that are in default
or as to which a default is reasonably foreseeable. The
13
<PAGE>
[HOTEL PROPERTIES VERSION]
DESCRIPTION OF THE TRUST FUNDS
MORTGAGE ASSETS
The primary assets of each Trust Fund (the 'Mortgage Assets') will include
mortgage loans secured by liens on, or security interests in, hotel properties
(the 'Mortgage Loans'). The Mortgage Assets will not be guaranteed or insured by
the Depositor or any of its affiliates. The Prospectus Supplement will describe
any guarantee or insurance relating to the Mortgage Assets by any governmental
agency or instrumentality or by any other person. Each Mortgage Asset will be
selected by the Depositor for inclusion in a Trust Fund from among those
purchased, either directly or indirectly, from a prior holder thereof (a
'Mortgage Asset Seller'), which prior holder may or may not be the originator of
such Mortgage Loan and may be an affiliate of the Depositor.
MORTGAGE LOANS
The Mortgage Loans will be secured by liens on, or security interests in,
Mortgaged Properties consisting of properties consisting of hotels and motels
located in any one of the fifty states or the District of Columbia or such other
locations as are disclosed in the related Prospectus Supplement. The Mortgage
Loans will be secured by mortgages or deeds of trust or other similar security
instruments creating a first or more junior lien on Mortgaged Properties. The
Mortgaged Properties may include leasehold interest in properties, the title to
which is held by third party lessors. The term of any such leasehold will exceed
the term of the mortgage note by at least ten years. Each Mortgage Loan will
have been originated by a person (the 'Originator') other than the Depositor.
The Mortgage Loans will be evidenced by promissory notes (the 'Mortgage Notes')
secured by mortgages or deeds of trust (the 'Mortgages') creating a lien on the
Mortgaged Properties. Mortgage Loans will generally also be secured by an
assignment of leases and rents and/or operating or other cash flow guarantees
relating to the Mortgage Loan.
DEFAULT AND LOSS CONSIDERATIONS WITH RESPECT TO THE MORTGAGE LOANS
Mortgage Loans secured by commercial and multifamily properties are
markedly different from owner-occupied single-family home mortgage loans. The
repayment of loans secured by commercial or multifamily properties is typically
dependent upon the successful operation of such property rather than upon the
liquidation value of the real estate. The Mortgage Loans will be non-recourse
loans, which means that, absent special facts, the mortgagee may look only to
the Net Operating Income from the property for repayment of the mortgage debt,
and not to any other of the mortgagor's assets, in the event of the mortgagor's
default. Lenders typically look to the Debt Service Coverage Ratio of a loan
secured by income-producing property as an important measure of the risk of
default on such a loan. The 'Debt Service Coverage Ratio' of a Mortgage Loan at
any given time is the ratio of the Net Operating Income for a twelve-month
period to the annualized scheduled payments on the Mortgage Loan. 'Net Operating
Income' is typically defined as total operating revenues (including primarily
rental income and any expense reimbursement, ancillary income, late charges and
deposit forfeitures) minus total operating expenses (including primarily
expenses for advertising, general administration, management fees and
disbursements, utilities, repairs and maintenance, insurance, real estate taxes
and replacement reserves based solely on the mortgagor's estimates of the useful
lives of various assets). Net Operating Income does not reflect capital
expenditures or partnership expenses. The Net Operating Income of a Mortgaged
Property will fluctuate over time and may be sufficient or insufficient to cover
debt service on the related Mortgage Loan at any given time.
As the primary component of Net Operating Income, rental income (and
maintenance payments from tenant-stockholders of a Cooperative) is subject to
the vagaries of the applicable real estate market and/or business climate.
Properties typically leased, occupied or used on a short-term basis, such as
health care-related facilities, hotels and motels, and mini-warehouse and self-
storage facilities, tend to be affected more rapidly by changes in market or
business conditions than do properties leased, occupied or used for longer
periods, such as (typically) warehouses, retail stores, office buildings and
industrial plants. Commercial Loans may be secured by owner-occupied Mortgaged
Properties or Mortgaged Properties leased to a single tenant. Accordingly, a
decline in the financial condition of the mortgagor or single tenant, as
applicable, may have a disproportionately greater effect on the Net Operating
Income from such Mortgaged Properties than would be the case with respect to
Mortgaged Properties with multiple tenants.
Changes in the expense components of Net Operating Income due to the
general economic climate or economic conditions in a locality or industry
segment, such as increases in interest rates, real estate and personal property
tax rates and other operating expenses including energy costs; changes in
governmental rules, regulations and fiscal policies, including environmental
legislation; and acts of God may also affect the risk of default on the related
Mortgage Loan. As may be further described in the related Prospectus Supplement,
in some cases leases of Mortgaged Properties may provide that the lessee, rather
than the mortgagor, is responsible for payment of certain of these expenses
('Net Leases'); however, because leases are subject to default
17
<PAGE>
SENIOR HOUSING/HEALTHCARE PROPERTIES VERSION
The following are alternate pages to the base prospectus for a form of base
prospectus for a series of commercial mortgage pass-through certificates backed
by loans secured by senior housing/healthcare properties. Disclosure made on the
following alternate pages will be included in the base prospectus for each
series of Certificates backed by loans containing a material concentration of
Mortgage Loans secured by senior housing/healthcare properties.
<PAGE>
[SENIOR HOUSING/HEALTHCARE PROPERTIES VERSION]
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS TO WHICH IT RELATES
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS DATED NOVEMBER 12, 1997
(SUBJECT TO COMPLETION)
MORTGAGE PASS-THROUGH CERTIFICATES
(ISSUABLE IN SERIES)
NOMURA ASSET SECURITIES CORPORATION
DEPOSITOR
The Certificates offered hereby and by Supplements to this Prospectus (the
'Offered Certificates') will be offered from time to time in series. Each series
of Certificates will represent in the aggregate the entire beneficial ownership
interest in a trust fund (with respect to any series, the 'Trust Fund')
consisting of a segregated pool of mortgage loans secured by liens on, or
security interests in, senior housing and healthcare properties (the 'Mortgage
Loans,' or sometimes referred to herein as the 'Mortgage Assets'). The Trust
Fund for a series of Certificates may also include letters of credit, insurance
policies, guarantees, reserve funds or other types of credit support, or any
combination thereof (with respect to any series, collectively, 'Credit
Support'), and currency or interest rate exchange agreements and other financial
assets, or any combination thereof (with respect to any series, collectively,
'Cash Flow Agreements'). See 'Description of the Trust Funds', 'Description of
the Certificates' and 'Description of Credit Support'.
Each series of Certificates will consist of one or more classes of
Certificates that may (i) provide for the accrual of interest thereon based on
fixed, variable or adjustable rates; (ii) be senior or subordinate to one or
more other classes of Certificates in respect of certain distributions on the
Certificates; (iii) be entitled to principal distributions, with
disproportionately low, nominal or no interest distributions; (iv) be entitled
to interest distributions, with disproportionately low, nominal or no principal
distributions; (v) provide for distributions of accrued interest thereon only
following the occurrence of certain events, such as the retirement of one or
more other classes of Certificates of such series; or (vi) provide for
distributions of principal sequentially, or based on specified payment
schedules, to the extent of available funds, in each case as described in the
related Prospectus Supplement. Any such classes may include classes of Offered
Certificates. See 'Description of the Certificates'.
Principal and interest with respect to Certificates will be distributable
monthly, quarterly, semi-annually or at such other intervals and on the dates
specified in the related Prospectus Supplement. Distributions on the
Certificates of any series will be made only from the assets of the related
Trust Fund.
The Certificates of each series will not represent an obligation of or
interest in the Depositor, any Master Servicer, any Special Servicer or any of
their respective affiliates, except to the limited extent described herein and
in the related Prospectus Supplement. Only those Certificates and assets in the
related Trust Fund as are disclosed in the related Prospectus Supplement will be
guaranteed or insured by any governmental agency or instrumentality or by any
other person. The assets in each Trust Fund will be held in trust for the
benefit of the holders of the related series of Certificates pursuant to a
Pooling and Servicing Agreement or a Trust Agreement, as more fully described
herein.
The yield on each class of Certificates of a series will be affected by,
among other things, the rate of payment of principal (including voluntary and
involuntary prepayments) on the Mortgage Assets in the related Trust Fund and
the timing of receipt of such payments as described under the caption 'Yield
Considerations' herein and in the related Prospectus Supplement. A Trust Fund
may be subject to early termination under the circumstances described herein and
in the related Prospectus Supplement.
Prospective investors should review the information appearing under the
caption 'Risk Factors' herein and such information as may be set forth under the
caption 'Risk Factors' in the related Prospectus Supplement before purchasing
any Offered Certificate.
If so provided in the related Prospectus Supplement, one or more elections
may be made to treat the related Trust Fund or a designated portion thereof as
one or more 'real estate mortgage investment conduits' for federal income tax
purposes. See also 'Federal Income Tax Consequences' herein.
PROSPECTIVE INVESTORS SHOULD REVIEW THE DISCUSSION OF MATERIAL RISKS
APPEARING UNDER THE CAPTION 'RISK FACTORS' HEREIN COMMENCING ON PAGE 11.
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.
Prior to issuance there will have been no market for the Certificates of any
series and there can be no assurance that a secondary market for any Offered
Certificates will develop or that, if it does develop, it will continue. This
Prospectus may not be used to consummate sales of a series of Offered
Certificates unless accompanied by a Prospectus Supplement.
Offers of the Offered Certificates may be made through one or more different
methods, including offerings through underwriters, as more fully described under
'Method of Distribution' herein and in the related Prospectus Supplement. All
Offered Certificates will be distributed by, or sold by underwriters managed by:
NOMURA SECURITIES INTERNATIONAL, INC.
THE DATE OF THIS PROSPECTUS IS , 199
<PAGE>
[SENIOR HOUSING/HEALTHCARE PROPERTIES VERSION]
SUMMARY OF PROSPECTUS
The following summary of material information does not contain all the
material information regarding the Certificates and is qualified in its entirety
by reference to the more detailed information appearing elsewhere in this
Prospectus and by reference to the information with respect to each series of
Certificates contained in the Prospectus Supplement to be prepared and delivered
in connection with the offering of such series. An Index of Principal
Definitions is included at the end of this Prospectus.
TITLE OF CERTIFICATES
Mortgage Pass-Through Certificates, issuable in series (the
'Certificates').
DEPOSITOR
Nomura Asset Securities Corporation, a wholly-owned subsidiary of Nomura
Asset Capital Corporation. See 'The Depositor'.
MASTER SERVICER
The master servicer (the 'Master Servicer'), if any, for each series of
Certificates will be named in the related Prospectus Supplement. See
'Description of the Agreements--Collection and Other Servicing Procedures'.
SPECIAL SERVICER
The special servicer (the 'Special Servicer'), if any, for each series of
Certificates will be named, or the circumstances in accordance with which a
Special Servicer will be appointed will be described, in the related Prospectus
Supplement. See 'Description of the Agreements--Special Servicer'.
TRUSTEE
The trustee (the 'Trustee') for each series of Certificates will be named
in the related Prospectus Supplement. See 'Description of the Agreements--The
Trustee'.
THE TRUST ASSETS
Each series of Certificates will represent in the aggregate the entire
beneficial ownership interest in a Trust Fund consisting primarily of:
(A) MORTGAGE ASSETS
The Mortgage Assets with respect to each series of Certificates will
consist of a pool of commercial mortgage loans (the 'Mortgage Loans').
Except to the extent described in the related Prospectus Supplement, the
Mortgage Loans will not be guaranteed or insured by the Depositor or any of
its affiliates or by any governmental agency or instrumentality or other
person. As more specifically described herein, the Mortgage Loans will be
secured by liens on, or security interests in, properties consisting of
nursing homes, hospitals or other healthcare related facilities (the
'Commercial Properties,' or sometimes referred to herein as the 'Mortgaged
Properties'). The Mortgaged Properties may be located in any one of the
fifty states or the District of Columbia or such other locations as are
disclosed in the related Prospectus Supplement. All Mortgage Loans will
have individual principal balances at origination of not less than $25,000
and original terms to maturity of not more than 40 years. All Mortgage
Loans will have been originated by persons other than the Depositor, and
all Mortgage Assets will have been purchased, either directly or
indirectly, by the Depositor on or before the date of initial issuance of
the related series of Certificates. As described herein and in the
Prospectus Supplement, each Mortgage Loan may (i) provide for no accrual of
interest or for accrual of interest thereon at an interest rate (a
'Mortgage Rate') that is fixed over its term or that adjusts from time to
time, or that may be converted from an adjustable to a fixed Mortgage Rate,
or from a fixed to an adjustable Mortgage Rate, from time to time at the
mortgagor's election; (ii) provide for scheduled payments to maturity,
payments that adjust from time to time in accommodate changes in the
Mortgage Rate or to reflect the occurrence of certain events, and may
provide negative amortization or accelerated amortization; (iii) be fully
amortizing or require a balloon payment due on its stated maturity date;
(iv) contain prohibitions on prepayment or require payment of a premium or
a yield maintenance penalty in connection with a prepayment; and (v)
provide for payments of principal, interest or both, on due dates that
occur monthly, quarterly, semi-annually or other interval. See 'Description
of the Trust Funds--Mortgage Assets'.
7
<PAGE>
[SENIOR HOUSING/HEALTHCARE PROPERTIES VERSION]
Mortgage Loan. With respect to those Mortgage Loans that provide for recourse
against the mortgagor and its assets generally, there can be no assurance that
such recourse will ensure a recovery in respect of a defaulted Mortgage Loan
greater than the liquidation value of the related Mortgaged Property.
Further, the concentration of default, foreclosure and loss risks in
individual mortgagors or Mortgage Loans in a particular Trust Fund or the
related Mortgaged Properties will generally be greater than for pools of
single-family loans both because the Mortgage Assets in a Trust Fund will
generally consist of a smaller number of loans than would a single-family pool
of comparable aggregate unpaid principal balance and because of the higher
principal balance of individual Mortgage Loans.
SENIOR HOUSING/HEALTHCARE PROPERTIES
Significant factors determining the value of senior housing and healthcare
properties include federal and state laws, competition with similar properties
on a local and regional basis and the continued availability of revenue from
government reimbursement programs, primarily Medicaid and Medicare. Providers of
long-term nursing care and other medical services are subject to federal and
state laws that relate to the adequacy of medical care, distribution of
pharmaceuticals, rate setting, equipment, personnel, operating policies and
additions to facilities and services and, to the extent dependent on patients
whose fees are reimbursed by private insurers, to the reimbursement policies of
such insurers. In addition, facilities where such care or other medical services
are provided are subject to periodic inspection by governmental authorities to
determine compliance with various standards necessary for continued licensing
under state law and continued participation in the Medicaid and Medicare
reimbursement programs. The failure of any such borrowers to maintain or renew
any required license or regulatory approval could prevent it from continuing
operations at a Mortgaged Property (in which case no revenues would be received
from such property or portion thereof requiring licensing) or, if applicable,
bar it from participation in government reimbursement programs. Furthermore, in
the event of foreclosure, there can be no assurance that the Trustee (or Master
Servicer or Special Servicer) or purchaser in a foreclosure sale would be
entitled to the rights under such licenses and such party may have to apply in
its own right for such a license. There can be no assurance that a new license
could be obtained.
Under applicable federal and state laws and regulations, Medicare and
Medicaid, only the provider who actually furnished the related medical goods and
services generally may sue for or enforce its rights to reimbursement.
Accordingly, in the event of foreclosure, none of the Trustee, the Master
Servicer, the Special Servicer or a subsequent lessee or operator of the
property would generally be entitled to obtain from federal or state governments
any outstanding reimbursement payments relating to services furnished at the
respective properties prior to such foreclosure.
The operators of such nursing homes are likely to compete on a local and
regional basis with others that operate similar facilities, some of which
competitors may be better capitalized, may offer services not offered by such
operators or may be owned by non-profit organizations or government agencies
supported by endowments, charitable contributions, tax revenues and other
sources not available to such operators. The successful operation of a Mortgaged
Property that is a nursing home will generally depend upon the number of
competing facilities in the local market, as well as upon other factors such as
its age, appearance, reputation and management, the types of services it
provides and the quality of care and the cost of that care.
Nursing home facilities may receive a substantial portion of their revenues
from government reimbursement programs, primarily Medicaid and Medicare.
Medicaid and Medicare are subject to statutory and regulatory changes,
retroactive rate adjustments, administrative rulings, policy interpretations,
delays by fiscal intermediaries and government funding restrictions. Moreover,
government payors have employed cost-containment measures that limit payments to
health care providers, and there are currently under construction various
proposals for national health care reform that could further limit those
payments. Accordingly, there can be no assurance that payments under government
reimbursement programs will, in the future, be sufficient to fully reimburse the
cost of caring for program beneficiaries. If not, net operating income of the
Mortgaged Properties that receive revenues from those sources, and consequently
the ability of the related borrowers to meet their Mortgage Loan obligations,
could be adversely affected.
BALLOON PAYMENTS
Certain of the Mortgage Loans as of the Cut-off Date may not be fully
amortizing over their terms to maturity and, thus, will require substantial
principal payments (i.e., balloon payments) at their stated maturity. Mortgage
Loans with balloon payments involve a greater degree of risk because the ability
of a mortgagor to make a balloon payment typically will depend upon its ability
either to timely refinance the loan or to timely sell the related Mortgaged
Property. The ability of a mortgagor to accomplish either of these goals will be
affected by a number of factors, including the level of available mortgage rates
at the time of sale or refinancing, the mortgagor's equity in the related
Mortgaged Property, the financial condition and operating history of the
13
<PAGE>
DESCRIPTION OF THE TRUST FUNDS
MORTGAGE ASSETS
The primary assets of each Trust Fund (the 'Mortgage Assets') will include
mortgage loans secured by liens on, or security interests in, senior housing and
healthcare properties (the 'Mortgage Loans'). The Mortgage Assets will not be
guaranteed or insured by the Depositor or any of its affiliates. The Prospectus
Supplement will describe any guarantee or insurance relating to the Mortgage
Assets by any governmental agency or instrumentality or by any other person.
Each Mortgage Asset will be selected by the Depositor for inclusion in a Trust
Fund from among those purchased, either directly or indirectly, from a prior
holder thereof (a 'Mortgage Asset Seller'), which prior holder may or may not be
the originator of such Mortgage Loan and may be an affiliate of the Depositor.
MORTGAGE LOANS
The Mortgage Loans will be secured by liens on, or security interests in,
Mortgaged Properties consisting of nursing homes, hospitals or other health
care-related facilities (sometimes referred to herein as 'Commercial Properties'
and the related loans, 'Commercial Loans') located in any one of the fifty
states or the District of Columbia or such other locations as are disclosed in
the related Prospectus Supplement. The Mortgage Loans will be secured by
mortgages or deeds of trust or other similar security instruments creating a
first or more junior lien on Mortgaged Properties. The Mortgaged Properties may
include leasehold interest in properties, the title to which is held by third
party lessors. The term of any such leasehold will exceed the term of the
mortgage note by at least ten years. Each Mortgage Loan will have been
originated by a person (the 'Originator') other than the Depositor. The Mortgage
Loans will be evidenced by promissory notes (the 'Mortgage Notes') secured by
mortgages or deeds of trust (the 'Mortgages') creating a lien on the Mortgaged
Properties. Mortgage Loans will generally also be secured by an assignment of
leases and rents and/or operating or other cash flow guarantees relating to the
Mortgage Loan.
DEFAULT AND LOSS CONSIDERATIONS WITH RESPECT TO THE MORTGAGE LOANS
Mortgage Loans secured by commercial and multifamily properties are
markedly different from owner-occupied single-family home mortgage loans. The
repayment of loans secured by commercial or multifamily properties is typically
dependent upon the successful operation of such property rather than upon the
liquidation value of the real estate. The Mortgage Loans will be non-recourse
loans, which means that, absent special facts, the mortgagee may look only to
the Net Operating Income from the property for repayment of the mortgage debt,
and not to any other of the mortgagor's assets, in the event of the mortgagor's
default. Lenders typically look to the Debt Service Coverage Ratio of a loan
secured by income-producing property as an important measure of the risk of
default on such a loan. The 'Debt Service Coverage Ratio' of a Mortgage Loan at
any given time is the ratio of the Net Operating Income for a twelve-month
period to the annualized scheduled payments on the Mortgage Loan. 'Net Operating
Income' is typically defined as total operating revenues (including primarily
rental income and any expense reimbursement, ancillary income, late charges and
deposit forfeitures) minus total operating expenses (including primarily
expenses for advertising, general administration, management fees and
disbursements, utilities, repairs and maintenance, insurance, real estate taxes
and replacement reserves based solely on the mortgagor's estimates of the useful
lives of various assets). Net Operating Income does not reflect capital
expenditures or partnership expenses. The Net Operating Income of a Mortgaged
Property will fluctuate over time and may be sufficient or insufficient to cover
debt service on the related Mortgage Loan at any given time.
As the primary component of Net Operating Income, rental income (and
maintenance payments from tenant-stockholders of a Cooperative) is subject to
the vagaries of the applicable real estate market and/or business climate.
Properties typically leased, occupied or used on a short-term basis, such as
health care-related facilities, hotels and motels, and mini-warehouse and self-
storage facilities, tend to be affected more rapidly by changes in market or
business conditions than do properties leased, occupied or used for longer
periods, such as (typically) warehouses, retail stores, office buildings and
industrial plants. Commercial Loans may be secured by owner-occupied Mortgaged
Properties or Mortgaged Properties leased to a single tenant. Accordingly, a
decline in the financial condition of the mortgagor or single tenant, as
applicable, may have a disproportionately greater effect on the Net Operating
Income from such Mortgaged Properties than would be the case with respect to
Mortgaged Properties with multiple tenants.
Changes in the expense components of Net Operating Income due to the
general economic climate or economic conditions in a locality or industry
segment, such as increases in interest rates, real estate and personal property
tax rates and other operating expenses including energy costs; changes in
governmental rules, regulations and fiscal policies, including environmental
legislation; and acts of God may also affect the risk of default on the related
Mortgage Loan. As may be further described in the related Prospectus Supplement,
in some cases leases of Mortgaged Properties may provide that the lessee, rather
than the
18
<PAGE>
MULTIFAMILY PROPERTIES VERSION
The following are alternate pages to the base prospectus for a form of base
prospectus for a series of commerical mortgage pass-through certificates backed
by loans secured by multifamily properties. Disclosure made on the following
alternate pages will be included in the base prospectus for each series of
Certificates backed by loans containing a material concentration of Mortgage
Loans secured by multifamily properties.
<PAGE>
[MULTIFAMILY PROPERTIES VERSION]
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS TO WHICH IT RELATES
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS DATED NOVEMBER 12, 1997
(SUBJECT TO COMPLETION)
MORTGAGE PASS-THROUGH CERTIFICATES
(ISSUABLE IN SERIES)
NOMURA ASSET SECURITIES CORPORATION
DEPOSITOR
The Certificates offered hereby and by Supplements to this Prospectus (the
'Offered Certificates') will be offered from time to time in series. Each series
of Certificates will represent in the aggregate the entire beneficial ownership
interest in a trust fund (with respect to any series, the 'Trust Fund')
consisting of a segregated pool of multifamily mortgage loans (the 'Mortgage
Loans,' or sometimes referred to herein as the 'Mortgage Assets'). The Trust
Fund for a series of Certificates may also include letters of credit, insurance
policies, guarantees, reserve funds or other types of credit support, or any
combination thereof (with respect to any series, collectively, 'Credit
Support'), and currency or interest rate exchange agreements and other financial
assets, or any combination thereof (with respect to any series, collectively,
'Cash Flow Agreements'). See 'Description of the Trust Funds', 'Description of
the Certificates' and 'Description of Credit Support'.
Each series of Certificates will consist of one or more classes of
Certificates that may (i) provide for the accrual of interest thereon based on
fixed, variable or adjustable rates; (ii) be senior or subordinate to one or
more other classes of Certificates in respect of certain distributions on the
Certificates; (iii) be entitled to principal distributions, with
disproportionately low, nominal or no interest distributions; (iv) be entitled
to interest distributions, with disproportionately low, nominal or no principal
distributions; (v) provide for distributions of accrued interest thereon only
following the occurrence of certain events, such as the retirement of one or
more other classes of Certificates of such series; or (vi) provide for
distributions of principal sequentially, or based on specified payment
schedules, to the extent of available funds, in each case as described in the
related Prospectus Supplement. Any such classes may include classes of Offered
Certificates. See 'Description of the Certificates'.
Principal and interest with respect to Certificates will be distributable
monthly, quarterly, semi-annually or at such other intervals and on the dates
specified in the related Prospectus Supplement. Distributions on the
Certificates of any series will be made only from the assets of the related
Trust Fund.
The Certificates of each series will not represent an obligation of or
interest in the Depositor, any Master Servicer, any Special Servicer or any of
their respective affiliates, except to the limited extent described herein and
in the related Prospectus Supplement. Only those Certificates and assets in the
related Trust Fund as are disclosed in the related Prospectus Supplement will be
guaranteed or insured by any governmental agency or instrumentality or by any
other person. The assets in each Trust Fund will be held in trust for the
benefit of the holders of the related series of Certificates pursuant to a
Pooling and Servicing Agreement or a Trust Agreement, as more fully described
herein.
The yield on each class of Certificates of a series will be affected by,
among other things, the rate of payment of principal (including voluntary and
involuntary prepayments) on the Mortgage Assets in the related Trust Fund and
the timing of receipt of such payments as described under the caption 'Yield
Considerations' herein and in the related Prospectus Supplement. A Trust Fund
may be subject to early termination under the circumstances described herein and
in the related Prospectus Supplement.
Prospective investors should review the information appearing under the
caption 'Risk Factors' herein and such information as may be set forth under the
caption 'Risk Factors' in the related Prospectus Supplement before purchasing
any Offered Certificate.
If so provided in the related Prospectus Supplement, one or more elections
may be made to treat the related Trust Fund or a designated portion thereof as
one or more 'real estate mortgage investment conduits' for federal income tax
purposes. See also 'Federal Income Tax Consequences' herein.
PROSPECTIVE INVESTORS SHOULD REVIEW THE DISCUSSION OF MATERIAL RISKS
APPEARING UNDER THE CAPTION 'RISK FACTORS' HEREIN COMMENCING ON PAGE 11.
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.
Prior to issuance there will have been no market for the Certificates of any
series and there can be no assurance that a secondary market for any Offered
Certificates will develop or that, if it does develop, it will continue. This
Prospectus may not be used to consummate sales of a series of Offered
Certificates unless accompanied by a Prospectus Supplement.
Offers of the Offered Certificates may be made through one or more different
methods, including offerings through underwriters, as more fully described under
'Method of Distribution' herein and in the related Prospectus Supplement. All
Offered Certificates will be distributed by, or sold by underwriters managed by:
NOMURA SECURITIES INTERNATIONAL, INC.
THE DATE OF THIS PROSPECTUS IS , 199
<PAGE>
[MULTIFAMILY PROPERTIES VERSION]
SUMMARY OF PROSPECTUS
The following summary of material information does not contain all the
material information regarding the Certificates and is qualified in its entirety
by reference to the more detailed information appearing elsewhere in this
Prospectus and by reference to the information with respect to each series of
Certificates contained in the Prospectus Supplement to be prepared and delivered
in connection with the offering of such series. An Index of Principal
Definitions is included at the end of this Prospectus.
TITLE OF CERTIFICATES
Mortgage Pass-Through Certificates, issuable in series (the
'Certificates').
DEPOSITOR
Nomura Asset Securities Corporation, a wholly-owned subsidiary of Nomura
Asset Capital Corporation. See 'The Depositor'.
MASTER SERVICER
The master servicer (the 'Master Servicer'), if any, for each series of
Certificates will be named in the related Prospectus Supplement. See
'Description of the Agreements--Collection and Other Servicing Procedures'.
SPECIAL SERVICER
The special servicer (the 'Special Servicer'), if any, for each series of
Certificates will be named, or the circumstances in accordance with which a
Special Servicer will be appointed will be described, in the related Prospectus
Supplement. See 'Description of the Agreements--Special Servicer'.
TRUSTEE
The trustee (the 'Trustee') for each series of Certificates will be named
in the related Prospectus Supplement. See 'Description of the Agreements--The
Trustee'.
THE TRUST ASSETS
Each series of Certificates will represent in the aggregate the entire
beneficial ownership interest in a Trust Fund consisting primarily of:
(A) MORTGAGE ASSETS
The Mortgage Assets with respect to each series of Certificates will
consist of a pool of multifamily mortgage loans (the 'Mortgage Loans').
Except to the extent described in the related Prospectus Supplement, the
Mortgage Loans will not be guaranteed or insured by the Depositor or any of
its affiliates or by any governmental agency or instrumentality or other
person. As more specifically described herein, the Mortgage Loans will be
secured by liens on, or security interests in, properties consisting of
residential properties consisting of five or more rental or
cooperatively-owned dwelling units (the 'Multifamily Properties, ' or
sometimes referred herein to as the 'Mortgaged Properties'). The Mortgaged
Properties may be located in any one of the fifty states or the District of
Columbia or such other locations as are disclosed in the related Prospectus
Supplement. All Mortgage Loans will have individual principal balances at
origination of not less than $25,000 and original terms to maturity of not
more than 40 years. All Mortgage Loans will have been originated by persons
other than the Depositor, and all Mortgage Assets will have been purchased,
either directly or indirectly, by the Depositor on or before the date of
initial issuance of the related series of Certificates. As described herein
and in the Prospectus Supplement, each Mortgage Loan may (i) provide for no
accrual of interest or for accrual of interest thereon at an interest rate
(a 'Mortgage Rate') that is fixed over its term or that adjusts from time
to time, or that may be converted from an adjustable to a fixed Mortgage
Rate, or from a fixed to an adjustable Mortgage Rate, from time to time at
the mortgagor's election; (ii) provide for scheduled payments to maturity,
payments that adjust from time to time in accommodate changes in the
Mortgage Rate or to reflect the occurrence of certain events, and may
provide negative amortization or accelerated amortization; (iii) be fully
amortizing or require a balloon payment due on its stated maturity date;
(iv) contain prohibitions on prepayment or require payment of a premium or
a yield maintenance penalty in connection with a prepayment; and (v)
provide for payments of
7
<PAGE>
[MULTIFAMILY PROPERTIES VERSION]
Mortgage Loan. With respect to those Mortgage Loans that provide for recourse
against the mortgagor and its assets generally, there can be no assurance that
such recourse will ensure a recovery in respect of a defaulted Mortgage Loan
greater than the liquidation value of the related Mortgaged Property.
Further, the concentration of default, foreclosure and loss risks in
individual mortgagors or Mortgage Loans in a particular Trust Fund or the
related Mortgaged Properties will generally be greater than for pools of
single-family loans both because the Mortgage Assets in a Trust Fund will
generally consist of a smaller number of loans than would a single-family pool
of comparable aggregate unpaid principal balance and because of the higher
principal balance of individual Mortgage Loans.
MULTIFAMILY PROPERTIES
Significant factors determining the value and successful operation of a
multifamily property are the location of the property, the number of competing
residential developments in the local market (such as apartment buildings,
manufactured housing communities and site-built single family homes), the
physical attributes of the multifamily apartment building (such as its age and
appearance) and state and local regulations affecting such property. In
addition, the successful operation of an apartment building will depend upon
other factors, such as its reputation, the ability of management to provide
adequate maintenance and insurance, and the types of services it provides.
Certain states regulate the relationship of an owner and its tenants.
Commonly, these laws require a written lease, good cause for eviction,
disclosure of fees, and notification to residents of changed land use, while
prohibiting unreasonable rules, retaliatory evictions, and restrictions on a
resident's choice of unit vendors. Apartment building owners have been the
subject of suits under state 'Unfair and Deceptive Practices Acts' and other
general consumer protection statutes for coercive, abusive or unconscionable
leasing and sales practices. A few states offer more significant protection. For
example, there are provisions that limit the basis on which a landlord may
terminate a tenancy or increase its rent or prohibit a landlord from terminating
a tenancy solely by reason of the sale of the owner's building.
In addition to state regulation of the landlord-tenant relationship,
numerous counties and municipalities impose rent control on apartment buildings.
These ordinances may limit rent increases to fixed percentages, to percentages
of increases in the consumer price index, to increases set or approved by a
governmental agency, or to increases determined through mediation or binding
arbitration. In many cases, the rent control laws do not permit vacancy
decontrol. Local authority to impose rent control is pre-empted by state law in
certain states, and rent control is not imposed at the state level in those
states. In some states, however, local rent control ordinances are not
pre-empted for tenants having short-term or month-to-month leases, and
properties there may be subject to various forms of rent control with respect to
those tenants. Any limitations on a borrower's ability to raise property rents
may impair such borrower's ability to repay its Mortgage Loan from its net
operating income or the proceeds of a sale or refinancing of the related
Mortgaged Property.
Adverse economic conditions, either local or national, may limit the amount
of rent that can be charged and may result in a reduction in timely rent
payments or a reduction in occupancy levels. Occupancy and rent levels may also
be affected by construction of additional housing units, local military base or
factory closings and national and local politics, including current or future
rent stabilization and rent control laws and agreements. In addition, the level
of mortgage interest rates may encourage tenants to purchase single-family
housing. The housing and construction quality of a particular building may
affect the occupancy level as well as the rents that may be charged for
individual units. The characteristics of a neighborhood may change over time or
in relation to newer developments.
BALLOON PAYMENTS
Certain of the Mortgage Loans as of the Cut-off Date may not be fully
amortizing over their terms to maturity and, thus, will require substantial
principal payments (i.e., balloon payments) at their stated maturity. Mortgage
Loans with balloon payments involve a greater degree of risk because the ability
of a mortgagor to make a balloon payment typically will depend upon its ability
either to timely refinance the loan or to timely sell the related Mortgaged
Property. The ability of a mortgagor to accomplish either of these goals will be
affected by a number of factors, including the level of available mortgage rates
at the time of sale or refinancing, the mortgagor's equity in the related
Mortgaged Property, the financial condition and operating history of the
mortgagor and the related Mortgaged Property, tax laws, rent control laws (with
respect to certain Multifamily Properties and mobile home parks), reimbursement
rates (with respect to certain hospitals, nursing homes and convalescent homes),
renewability of operating licenses, prevailing general economic conditions and
the availability of credit for commercial or multifamily, as the case may be,
real properties generally.
13
<PAGE>
[MULTIFAMILY PROPERTIES VERSION]
DESCRIPTION OF THE TRUST FUNDS
MORTGAGE ASSETS
The primary assets of each Trust Fund (the 'Mortgage Assets') will include
mortgage loans secured by liens on, or security interests in, multifamily
residential properties. The Mortgage Assets will not be guaranteed or insured by
the Depositor or any of its affiliates. The Prospectus Supplement will describe
any guarantee or insurance relating to the Mortgage Assets by any governmental
agency or instrumentality or by any other person. Each Mortgage Asset will be
selected by the Depositor for inclusion in a Trust Fund from among those
purchased, either directly or indirectly, from a prior holder thereof (a
'Mortgage Asset Seller'), which prior holder may or may not be the originator of
such Mortgage Loan and may be an affiliate of the Depositor.
MORTGAGE LOANS
The Mortgage Loans will be secured by liens on, or security interests in,
Mortgaged Properties consisting of residential properties consisting of five or
more rental or cooperatively-owned dwelling units in high-rise, mid-rise or
garden apartment buildings ('Multifamily Properties' and the related loans,
'Multifamily Loans') located in any one of the fifty states or the District of
Columbia or such other locations as are disclosed in the related Prospectus
Supplement. The Mortgage Loans will be secured by mortgages or deeds of trust or
other similar security instruments creating a first or more junior lien on
Mortgaged Properties. Multifamily Properties may include mixed commercial and
residential structures and may include apartment buildings owned by private
cooperative housing corporations ('Cooperatives'). The Mortgaged Properties may
include leasehold interest in properties, the title to which is held by third
party lessors. The term of any such leasehold will exceed the term of the
mortgage note by at least ten years. Each Mortgage Loan will have been
originated by a person (the 'Originator') other than the Depositor. The Mortgage
Loans will be evidenced by promissory notes (the 'Mortgage Notes') secured by
mortgages or deeds of trust (the 'Mortgages') creating a lien on the Mortgaged
Properties. Mortgage Loans will generally also be secured by an assignment of
leases and rents and/or operating or other cash flow guarantees relating to the
Mortgage Loan.
DEFAULT AND LOSS CONSIDERATIONS WITH RESPECT TO THE MORTGAGE LOANS
Mortgage Loans secured by commercial and multifamily properties are
markedly different from owner-occupied single-family home mortgage loans. The
repayment of loans secured by commercial or multifamily properties is typically
dependent upon the successful operation of such property rather than upon the
liquidation value of the real estate. The Mortgage Loans will be non-recourse
loans, which means that, absent special facts, the mortgagee may look only to
the Net Operating Income from the property for repayment of the mortgage debt,
and not to any other of the mortgagor's assets, in the event of the mortgagor's
default. Lenders typically look to the Debt Service Coverage Ratio of a loan
secured by income-producing property as an important measure of the risk of
default on such a loan. The 'Debt Service Coverage Ratio' of a Mortgage Loan at
any given time is the ratio of the Net Operating Income for a twelve-month
period to the annualized scheduled payments on the Mortgage Loan. 'Net Operating
Income' is typically defined as total operating revenues (including primarily
rental income and any expense reimbursement, ancillary income, late charges and
deposit forfeitures) minus total operating expenses (including primarily
expenses for advertising, general administration, management fees and
disbursements, utilities, repairs and maintenance, insurance, real estate taxes
and replacement reserves based solely on the mortgagor's estimates of the useful
lives of various assets). Net Operating Income does not reflect capital
expenditures or partnership expenses. The Net Operating Income of a Mortgaged
Property will fluctuate over time and may be sufficient or insufficient to cover
debt service on the related Mortgage Loan at any given time.
As the primary component of Net Operating Income, rental income (and
maintenance payments from tenant-stockholders of a Cooperative) is subject to
the vagaries of the applicable real estate market and/or business climate.
Properties typically leased, occupied or used on a short-term basis, such as
health care-related facilities, hotels and motels, and mini-warehouse and self-
storage facilities, tend to be affected more rapidly by changes in market or
business conditions than do properties leased, occupied or used for longer
periods, such as (typically) warehouses, retail stores, office buildings and
industrial plants. Commercial Loans may be secured by owner-occupied Mortgaged
Properties or Mortgaged Properties leased to a single tenant. Accordingly, a
decline in the financial condition of the mortgagor or single tenant, as
applicable, may have a disproportionately greater effect on the Net Operating
Income from such Mortgaged Properties than would be the case with respect to
Mortgaged Properties with multiple tenants.
Changes in the expense components of Net Operating Income due to the
general economic climate or economic conditions in a locality or industry
segment, such as increases in interest rates, real estate and personal property
tax rates and other operating expenses including energy costs; changes in
governmental rules, regulations and fiscal policies, including environmental
legislation; and acts of God may also affect the risk of default on the related
Mortgage Loan. As may be further described in the
17
<PAGE>
MOBILE HOME PARK PROPERTIES VERSION
The following are alternate pages to the base prospectus for a form of base
prospectus for a series of commercial pass-through certificates backed by loans
secured by mobile home park properties. Disclosure made on the following
alternate pages will be included in the base prospectus for each series of
Certificates backed by loans containing a material concentration of Mortgage
Loans secured by mobile home park properties.
<PAGE>
[MOBILE HOME PARKS VERSION]
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS TO WHICH IT RELATES
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS DATED NOVEMBER 12, 1997
(SUBJECT TO COMPLETION)
MORTGAGE PASS-THROUGH CERTIFICATES
(ISSUABLE IN SERIES)
NOMURA ASSET SECURITIES CORPORATION
DEPOSITOR
The Certificates offered hereby and by Supplements to this Prospectus (the
'Offered Certificates') will be offered from time to time in series. Each series
of Certificates will represent in the aggregate the entire beneficial ownership
interest in a trust fund (with respect to any series, the 'Trust Fund')
consisting of a segregated pool of mortgage loans secured by liens on, or
security interests in, mobile home park properties (the 'Mortgage Loans,' or
sometimes referred to herein as the 'Mortgage Assets'). The Trust Fund for a
series of Certificates may also include letters of credit, insurance policies,
guarantees, reserve funds or other types of credit support, or any combination
thereof (with respect to any series, collectively, 'Credit Support'), and
currency or interest rate exchange agreements and other financial assets, or any
combination thereof (with respect to any series, collectively, 'Cash Flow
Agreements'). See 'Description of the Trust Funds', 'Description of the
Certificates' and 'Description of Credit Support'.
Each series of Certificates will consist of one or more classes of
Certificates that may (i) provide for the accrual of interest thereon based on
fixed, variable or adjustable rates; (ii) be senior or subordinate to one or
more other classes of Certificates in respect of certain distributions on the
Certificates; (iii) be entitled to principal distributions, with
disproportionately low, nominal or no interest distributions; (iv) be entitled
to interest distributions, with disproportionately low, nominal or no principal
distributions; (v) provide for distributions of accrued interest thereon only
following the occurrence of certain events, such as the retirement of one or
more other classes of Certificates of such series; or (vi) provide for
distributions of principal sequentially, or based on specified payment
schedules, to the extent of available funds, in each case as described in the
related Prospectus Supplement. Any such classes may include classes of Offered
Certificates. See 'Description of the Certificates'.
Principal and interest with respect to Certificates will be distributable
monthly, quarterly, semi-annually or at such other intervals and on the dates
specified in the related Prospectus Supplement. Distributions on the
Certificates of any series will be made only from the assets of the related
Trust Fund.
The Certificates of each series will not represent an obligation of or
interest in the Depositor, any Master Servicer, any Special Servicer or any of
their respective affiliates, except to the limited extent described herein and
in the related Prospectus Supplement. Only those Certificates and assets in the
related Trust Fund as are disclosed in the related Prospectus Supplement will be
guaranteed or insured by any governmental agency or instrumentality or by any
other person. The assets in each Trust Fund will be held in trust for the
benefit of the holders of the related series of Certificates pursuant to a
Pooling and Servicing Agreement or a Trust Agreement, as more fully described
herein.
The yield on each class of Certificates of a series will be affected by,
among other things, the rate of payment of principal (including voluntary and
involuntary prepayments) on the Mortgage Assets in the related Trust Fund and
the timing of receipt of such payments as described under the caption 'Yield
Considerations' herein and in the related Prospectus Supplement. A Trust Fund
may be subject to early termination under the circumstances described herein and
in the related Prospectus Supplement.
Prospective investors should review the information appearing under the
caption 'Risk Factors' herein and such information as may be set forth under the
caption 'Risk Factors' in the related Prospectus Supplement before purchasing
any Offered Certificate.
If so provided in the related Prospectus Supplement, one or more elections
may be made to treat the related Trust Fund or a designated portion thereof as
one or more 'real estate mortgage investment conduits' for federal income tax
purposes. See also 'Federal Income Tax Consequences' herein.
PROSPECTIVE INVESTORS SHOULD REVIEW THE DISCUSSION OF MATERIAL RISKS
APPEARING UNDER THE CAPTION 'RISK FACTORS' HEREIN COMMENCING ON PAGE 11.
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.
Prior to issuance there will have been no market for the Certificates of any
series and there can be no assurance that a secondary market for any Offered
Certificates will develop or that, if it does develop, it will continue. This
Prospectus may not be used to consummate sales of a series of Offered
Certificates unless accompanied by a Prospectus Supplement.
Offers of the Offered Certificates may be made through one or more different
methods, including offerings through underwriters, as more fully described under
'Method of Distribution' herein and in the related Prospectus Supplement. All
Offered Certificates will be distributed by, or sold by underwriters managed by:
NOMURA SECURITIES INTERNATIONAL, INC.
THE DATE OF THIS PROSPECTUS IS , 199
<PAGE>
[MOBILE HOME PARKS VERSION]
SUMMARY OF PROSPECTUS
The following summary of material information does not contain all the
material information regarding the Certificates and is qualified in its entirety
by reference to the more detailed information appearing elsewhere in this
Prospectus and by reference to the information with respect to each series of
Certificates contained in the Prospectus Supplement to be prepared and delivered
in connection with the offering of such series. An Index of Principal
Definitions is included at the end of this Prospectus.
TITLE OF CERTIFICATES
Mortgage Pass-Through Certificates, issuable in series (the
'Certificates').
DEPOSITOR
Nomura Asset Securities Corporation, a wholly-owned subsidiary of Nomura
Asset Capital Corporation. See 'The Depositor'.
MASTER SERVICER
The master servicer (the 'Master Servicer'), if any, for each series of
Certificates will be named in the related Prospectus Supplement. See
'Description of the Agreements--Collection and Other Servicing Procedures'.
SPECIAL SERVICER
The special servicer (the 'Special Servicer'), if any, for each series of
Certificates will be named, or the circumstances in accordance with which a
Special Servicer will be appointed will be described, in the related Prospectus
Supplement. See 'Description of the Agreements--Special Servicer'.
TRUSTEE
The trustee (the 'Trustee') for each series of Certificates will be named
in the related Prospectus Supplement. See 'Description of the Agreements--The
Trustee'.
THE TRUST ASSETS
Each series of Certificates will represent in the aggregate the entire
beneficial ownership interest in a Trust Fund consisting primarily of:
(A) MORTGAGE ASSETS
The Mortgage Assets with respect to each series of Certificates will
consist of a pool of commercial mortgage loans (the 'Mortgage Loans').
Except to the extent described in the related Prospectus Supplement, the
Mortgage Loans will not be guaranteed or insured by the Depositor or any of
its affiliates or by any governmental agency or instrumentality or other
person. As more specifically described herein, the Mortgage Loans will be
secured by liens on, or security interests in, properties consisting of
mobile home parks (the 'Commercial Properties', or sometimes referred to
herein as the 'Mortgaged Properties'). The Mortgaged Properties may be
located in any one of the fifty states or the District of Columbia or such
other locations as are disclosed in the related Prospectus Supplement. All
Mortgage Loans will have individual principal balances at origination of
not less than $25,000 and original terms to maturity of not more than 40
years. All Mortgage Loans will have been originated by persons other than
the Depositor, and all Mortgage Assets will have been purchased, either
directly or indirectly, by the Depositor on or before the date of initial
issuance of the related series of Certificates. As described herein and in
the Prospectus Supplement, each Mortgage Loan may (i) provide for no
accrual of interest or for accrual of interest thereon at an interest rate
(a 'Mortgage Rate') that is fixed over its term or that adjusts from time
to time, or that may be converted from an adjustable to a fixed Mortgage
Rate, or from a fixed to an adjustable Mortgage Rate, from time to time at
the mortgagor's election; (ii) provide for scheduled payments to maturity,
payments that adjust from time to time in accommodate changes in the
Mortgage Rate or to reflect the occurrence of certain events, and may
provide negative amortization or accelerated amortization; (iii) be fully
amortizing or require a balloon payment due on its stated maturity date;
(iv) contain prohibitions on prepayment or require payment of a premium or
a yield maintenance penalty in connection with a prepayment; and (v)
provide for payments of principal, interest or both, on due dates that
occur monthly, quarterly, semi-annually or other interval. See 'Description
of the Trust Funds--Mortgage Assets'.
7
<PAGE>
[MOBILE HOME PARKS VERSION]
Mortgage Loan. With respect to those Mortgage Loans that provide for recourse
against the mortgagor and its assets generally, there can be no assurance that
such recourse will ensure a recovery in respect of a defaulted Mortgage Loan
greater than the liquidation value of the related Mortgaged Property.
Further, the concentration of default, foreclosure and loss risks in
individual mortgagors or Mortgage Loans in a particular Trust Fund or the
related Mortgaged Properties will generally be greater than for pools of
single-family loans both because the Mortgage Assets in a Trust Fund will
generally consist of a smaller number of loans than would a single-family pool
of comparable aggregate unpaid principal balance and because of the higher
principal balance of individual Mortgage Loans.
MOBILE HOME PARK PROPERTIES
Loans secured by liens on mobile home park properties pose risks not
associated with loans secured by liens on other types of income-producing real
estate.
The successful operation of a mobile home park property will generally
depend upon the number of competing mobile home park communities and other
residential developments in the local market, such as apartment buildings, other
mobile home park communities, and site-built single family homes, as well as
upon other factors such as its location, age, appearance, reputation, the
ability of management to provide adequate maintenance and insurance, and the
types of services it provides.
Mobile home park properties are 'special purpose' properties that could not
be readily converted to general residential, retail or office use. Thus, if the
operation of any of the mobile home park properties becomes unprofitable due to
competition, age of the improvements or other factors such that the borrower
becomes unable to meet its obligations on the related Mortgage Loan, the
liquidation value of that mobile home park property may be substantially less,
relative to the amount owing on the related Mortgage Loan, than would be the
case if the mobile home park property were readily adaptable to other uses.
Certain states regulate the relationship of a mobile home park community
owner and its tenants. Commonly, these laws require a written lease, good cause
for eviction, disclosure of fees, and notification to residents of changed land
use, while prohibiting unreasonable rules, retaliatory evictions, and
restrictions on a resident's choice of unit vendors. For example, there are
provisions that limit the basis on which a landlord may terminate a mobile home
owner's tenancy or increase its rent and generally prohibit a landlord from
terminating a tenancy solely by reason of the sale of the owner's mobile home.
In addition to state regulation of the landlord tenant relationship,
numerous counties and municipalities impose rent control on mobile home park
communities. These ordinances may limit rent increases to fixed percentages, to
percentages of increases in the consumer price index, to increases set or
approved by a governmental agency, or to increases deteremined through mediation
or binding arbitration. In many cases, the rent control laws do not permit
vacancy decontrol, or permit vacancy decontrol only in the relatively rare event
that the mobile home is removed from the mobile home park. Local authority to
impose rent control on mobile home park communities is preempted by state law in
certain states and rent control is not imposed at the state level in those
states. In some states, however, local rent control ordinances are not preempted
for tenants having short-term or month-to-month leases, and the Mortgaged
Properties in such states may be subject to various forms of rent control with
respect to those tenants. Any limitations on the Mortgaged Borrowers' ability to
raise property rents may impair their ability to repay the related Mortgage Loan
from their net operating income or the proceeds of a sale or refinancing of the
related Mortgaged Properties.
The location and construction quality of common area improvements to a
mobile home park housing community may affect the occupancy level as well as the
rents that may be charged for the individual mobile home parks. The
characteristics of a mobile home park community may change over time or in
relation to other developments. The effects of poor construction quality on
common area improvements will increase over time in the form of increased
maintenance and capital improvements. Even good construction will deteriorate
over time if the property manager does not schedule and perform adequate
maintenance in a timely fashion.
BALLOON PAYMENTS
Certain of the Mortgage Loans as of the Cut-off Date may not be fully
amortizing over their terms to maturity and, thus, will require substantial
principal payments (i.e., balloon payments) at their stated maturity. Mortgage
Loans with balloon payments involve a greater degree of risk because the ability
of a mortgagor to make a balloon payment typically will depend upon its ability
either to timely refinance the loan or to timely sell the related Mortgaged
Property. The ability of a mortgagor to accomplish either of these goals will be
affected by a number of factors, including the level of available mortgage rates
at the time of sale or refinancing, the mortgagor's equity in the related
Mortgaged Property, the financial condition and operating history of the
mortgagor and the related Mortgaged Property, tax laws, rent control laws (with
respect to certain Multifamily Properties and
13
<PAGE>
[MOBILE HOME PARKS VERSION]
DESCRIPTION OF THE TRUST FUNDS
MORTGAGE ASSETS
The primary assets of each Trust Fund (the 'Mortgage Assets') will include
mortgage loans secured by liens on, or security interests in, mobile home park
properties (the 'Mortgage Loans'). The Mortgage Assets will not be guaranteed or
insured by the Depositor or any of its affiliates. The Prospectus Supplement
will describe any guarantee or insurance relating to the Mortgage Assets by any
governmental agency or instrumentality or by any other person. Each Mortgage
Asset will be selected by the Depositor for inclusion in a Trust Fund from among
those purchased, either directly or indirectly, from a prior holder thereof (a
'Mortgage Asset Seller'), which prior holder may or may not be the originator of
such Mortgage Loan or the issuer of such MBS and may be an affiliate of the
Depositor.
MORTGAGE LOANS
The Mortgage Loans will be secured by liens on, or security interests in,
Mortgaged Properties consisting of mobile home parks located in any one of the
fifty states or the District of Columbia or such other locations as are
disclosed in the related Prospectus Supplement. The Mortgage Loans will be
secured by mortgages or deeds of trust or other similar security instruments
creating a first or more junior lien on Mortgaged Properties. The Mortgaged
Properties may include leasehold interest in properties, the title to which is
held by third party lessors. The term of any such leasehold will exceed the term
of the mortgage note by at least ten years. Each Mortgage Loan will have been
originated by a person (the 'Originator') other than the Depositor. The Mortgage
Loans will be evidenced by promissory notes (the 'Mortgage Notes') secured by
mortgages or deeds of trust (the 'Mortgages') creating a lien on the Mortgaged
Properties. Mortgage Loans will generally also be secured by an assignment of
leases and rents and/or operating or other cash flow guarantees relating to the
Mortgage Loan.
DEFAULT AND LOSS CONSIDERATIONS WITH RESPECT TO THE MORTGAGE LOANS
Mortgage Loans secured by commercial and multifamily properties are
markedly different from owner-occupied single-family home mortgage loans. The
repayment of loans secured by commercial or multifamily properties is typically
dependent upon the successful operation of such property rather than upon the
liquidation value of the real estate. The Mortgage Loans will be non-recourse
loans, which means that, absent special facts, the mortgagee may look only to
the Net Operating Income from the property for repayment of the mortgage debt,
and not to any other of the mortgagor's assets, in the event of the mortgagor's
default. Lenders typically look to the Debt Service Coverage Ratio of a loan
secured by income-producing property as an important measure of the risk of
default on such a loan. The 'Debt Service Coverage Ratio' of a Mortgage Loan at
any given time is the ratio of the Net Operating Income for a twelve-month
period to the annualized scheduled payments on the Mortgage Loan. 'Net Operating
Income' is typically defined as total operating revenues (including primarily
rental income and any expense reimbursement, ancillary income, late charges and
deposit forfeitures) minus total operating expenses (including primarily
expenses for advertising, general administration, management fees and
disbursements, utilities, repairs and maintenance, insurance, real estate taxes
and replacement reserves based solely on the mortgagor's estimates of the useful
lives of various assets). Net Operating Income does not reflect capital
expenditures or partnership expenses. The Net Operating Income of a Mortgaged
Property will fluctuate over time and may be sufficient or insufficient to cover
debt service on the related Mortgage Loan at any given time.
As the primary component of Net Operating Income, rental income (and
maintenance payments from tenant-stockholders of a Cooperative) is subject to
the vagaries of the applicable real estate market and/or business climate.
Properties typically leased, occupied or used on a short-term basis, such as
health care-related facilities, hotels and motels, and mini-warehouse and self-
storage facilities, tend to be affected more rapidly by changes in market or
business conditions than do properties leased, occupied or used for longer
periods, such as (typically) warehouses, retail stores, office buildings and
industrial plants. Commercial Loans may be secured by owner-occupied Mortgaged
Properties or Mortgaged Properties leased to a single tenant. Accordingly, a
decline in the financial condition of the mortgagor or single tenant, as
applicable, may have a disproportionately greater effect on the Net Operating
Income from such Mortgaged Properties than would be the case with respect to
Mortgaged Properties with multiple tenants.
Changes in the expense components of Net Operating Income due to the
general economic climate or economic conditions in a locality or industry
segment, such as increases in interest rates, real estate and personal property
tax rates and other operating expenses including energy costs; changes in
governmental rules, regulations and fiscal policies, including environmental
legislation; and acts of God may also affect the risk of default on the related
Mortgage Loan. As may be further described in the related Prospectus Supplement,
in some cases leases of Mortgaged Properties may provide that the lessee, rather
than the mortgagor, is responsible for payment of certain of these expenses
('Net Leases'); however, because leases are subject to default
17
<PAGE>
[MOBILE HOME PARKS VERSION]
INDUSTRIAL PROPERTIES VERSION
The following are alternate pages to the base prospectus for a form of base
prospectus for a series of commercial mortgage pass-through certificates backed
by loans secured by industrial properties. Disclosure made on the following
alternate pages will be included in the base prospectus for each series of
Certificates backed by loans containing a material concentration of Mortgage
Loans secured by industrial properties.
<PAGE>
[INDUSTRIAL PROPERTIES VERSION]
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS TO WHICH IT RELATES
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS DATED NOVEMBER 12, 1997
(SUBJECT TO COMPLETION)
MORTGAGE PASS-THROUGH CERTIFICATES
(ISSUABLE IN SERIES)
NOMURA ASSET SECURITIES CORPORATION
DEPOSITOR
The Certificates offered hereby and by Supplements to this Prospectus (the
'Offered Certificates') will be offered from time to time in series. Each series
of Certificates will represent in the aggregate the entire beneficial ownership
interest in a trust fund (with respect to any series, the 'Trust Fund')
consisting of a segregated pool of mortgage loans secured by liens on, or
security interests in, industrial properties (the 'Mortgage Loans', or sometimes
referred to herein as the 'Mortgage Assets'). The Trust Fund for a series of
Certificates may also include letters of credit, insurance policies, guarantees,
reserve funds or other types of credit support, or any combination thereof (with
respect to any series, collectively, 'Credit Support'), and currency or interest
rate exchange agreements and other financial assets, or any combination thereof
(with respect to any series, collectively, 'Cash Flow Agreements'). See
'Description of the Trust Funds', 'Description of the Certificates' and
'Description of Credit Support'.
Each series of Certificates will consist of one or more classes of
Certificates that may (i) provide for the accrual of interest thereon based on
fixed, variable or adjustable rates; (ii) be senior or subordinate to one or
more other classes of Certificates in respect of certain distributions on the
Certificates; (iii) be entitled to principal distributions, with
disproportionately low, nominal or no interest distributions; (iv) be entitled
to interest distributions, with disproportionately low, nominal or no principal
distributions; (v) provide for distributions of accrued interest thereon only
following the occurrence of certain events, such as the retirement of one or
more other classes of Certificates of such series; or (vi) provide for
distributions of principal sequentially, or based on specified payment
schedules, to the extent of available funds, in each case as described in the
related Prospectus Supplement. Any such classes may include classes of Offered
Certificates. See 'Description of the Certificates'.
Principal and interest with respect to Certificates will be distributable
monthly, quarterly, semi-annually or at such other intervals and on the dates
specified in the related Prospectus Supplement. Distributions on the
Certificates of any series will be made only from the assets of the related
Trust Fund.
The Certificates of each series will not represent an obligation of or
interest in the Depositor, any Master Servicer, any Special Servicer or any of
their respective affiliates, except to the limited extent described herein and
in the related Prospectus Supplement. Only those Certificates and assets in the
related Trust Fund as are disclosed in the related Prospectus Supplement will be
guaranteed or insured by any governmental agency or instrumentality or by any
other person. The assets in each Trust Fund will be held in trust for the
benefit of the holders of the related series of Certificates pursuant to a
Pooling and Servicing Agreement or a Trust Agreement, as more fully described
herein.
The yield on each class of Certificates of a series will be affected by,
among other things, the rate of payment of principal (including voluntary and
involuntary prepayments) on the Mortgage Assets in the related Trust Fund and
the timing of receipt of such payments as described under the caption 'Yield
Considerations' herein and in the related Prospectus Supplement. A Trust Fund
may be subject to early termination under the circumstances described herein and
in the related Prospectus Supplement.
Prospective investors should review the information appearing under the
caption 'Risk Factors' herein and such information as may be set forth under the
caption 'Risk Factors' in the related Prospectus Supplement before purchasing
any Offered Certificate.
If so provided in the related Prospectus Supplement, one or more elections
may be made to treat the related Trust Fund or a designated portion thereof as
one or more 'real estate mortgage investment conduits' for federal income tax
purposes. See also 'Federal Income Tax Consequences' herein.
PROSPECTIVE INVESTORS SHOULD REVIEW THE DISCUSSION OF MATERIAL RISKS
APPEARING UNDER THE CAPTION 'RISK FACTORS' HEREIN COMMENCING ON PAGE 11.
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.
Prior to issuance there will have been no market for the Certificates of any
series and there can be no assurance that a secondary market for any Offered
Certificates will develop or that, if it does develop, it will continue. This
Prospectus may not be used to consummate sales of a series of Offered
Certificates unless accompanied by a Prospectus Supplement.
Offers of the Offered Certificates may be made through one or more different
methods, including offerings through underwriters, as more fully described under
'Method of Distribution' herein and in the related Prospectus Supplement. All
Offered Certificates will be distributed by, or sold by underwriters managed by:
NOMURA SECURITIES INTERNATIONAL, INC.
THE DATE OF THIS PROSPECTUS IS , 199
<PAGE>
[INDUSTRIAL PROPERTIES VERSION]
SUMMARY OF PROSPECTUS
The following summary of material information does not contain all the
material information regarding the Certificates and is qualified in its entirety
by reference to the more detailed information appearing elsewhere in this
Prospectus and by reference to the information with respect to each series of
Certificates contained in the Prospectus Supplement to be prepared and delivered
in connection with the offering of such series. An Index of Principal
Definitions is included at the end of this Prospectus.
TITLE OF CERTIFICATES
Mortgage Pass-Through Certificates, issuable in series (the
'Certificates').
DEPOSITOR
Nomura Asset Securities Corporation, a wholly-owned subsidiary of Nomura
Asset Capital Corporation. See 'The Depositor'.
MASTER SERVICER
The master servicer (the 'Master Servicer'), if any, for each series of
Certificates will be named in the related Prospectus Supplement. See
'Description of the Agreements--Collection and Other Servicing Procedures'.
SPECIAL SERVICER
The special servicer (the 'Special Servicer'), if any, for each series of
Certificates will be named, or the circumstances in accordance with which a
Special Servicer will be appointed will be described, in the related Prospectus
Supplement. See 'Description of the Agreements--Special Servicer'.
TRUSTEE
The trustee (the 'Trustee') for each series of Certificates will be named
in the related Prospectus Supplement. See 'Description of the Agreements--The
Trustee'.
THE TRUST ASSETS
Each series of Certificates will represent in the aggregate the entire
beneficial ownership interest in a Trust Fund consisting primarily of:
(A) MORTGAGE ASSETS
The Mortgage Assets with respect to each series of Certificates will
consist of a pool of commercial mortgage loans (the 'Mortgage Loans').
Except to the extent described in the related Prospectus Supplement, the
Mortgage Loans will not be guaranteed or insured by the Depositor or any of
its affiliates or by any governmental agency or instrumentality or other
person. As more specifically described herein, the Mortgage Loans will be
secured by liens on, or security interest in, properties consisting of
industrial plants (the 'Commercial Properties', or sometimes referred to
herein as the 'Mortgaged Properties'). The Mortgaged Properties may be
located in any one of the fifty states or the District of Columbia or such
other locations as are disclosed in the related Prospectus Supplement. All
Mortgage Loans will have individual principal balances at origination of
not less than $25,000 and original terms to maturity of not more than 40
years. All Mortgage Loans will have been originated by persons other than
the Depositor, and all Mortgage Assets will have been purchased, either
directly or indirectly, by the Depositor on or before the date of initial
issuance of the related series of Certificates. As described herein and in
the Prospectus Supplement, each Mortgage Loan may (i) provide for no
accrual of interest or for accrual of interest thereon at an interest rate
(a 'Mortgage Rate') that is fixed over its term or that adjusts from time
to time, or that may be converted from an adjustable to a fixed Mortgage
Rate, or from a fixed to an adjustable Mortgage Rate, from time to time at
the mortgagor's election; (ii) provide for scheduled payments to maturity,
payments that adjust from time to time in accommodate changes in the
Mortgage Rate or to reflect the occurrence of certain events, and may
provide negative amortization or accelerated amortization; (iii) be fully
amortizing or require a balloon payment due on its stated maturity date;
(iv) contain prohibitions on prepayment or require payment of a premium or
a yield maintenance penalty in connection with a prepayment; and (v)
provide for payments of principal, interest or both, on due dates that
occur monthly, quarterly, semi-annually or other interval. See 'Description
of the Trust Funds--Mortgage Assets'.
7
<PAGE>
[INDUSTRIAL PROPERTIES VERSION]
Further, the concentration of default, foreclosure and loss risks in
individual mortgagors or Mortgage Loans in a particular Trust Fund or the
related Mortgaged Properties will generally be greater than for pools of
single-family loans both because the Mortgage Assets in a Trust Fund will
generally consist of a smaller number of loans than would a single-family pool
of comparable aggregate unpaid principal balance and because of the higher
principal balance of individual Mortgage Loans.
INDUSTRIAL PROPERTIES
Significant factors determining the value of industrial properties are the
quality of tenants, building design and adaptability and the location of the
properties. Industrial properties may be adversely affected if there is an
economic decline in the business operated by the tenants. The risk of such an
adverse effect is increased if revenue is dependent on a single tenant or if
there is a significant concentration of tenants in a particular business or
industry (as is frequently the case with industrial properties).
Aspects of building site design and adaptability affect the value of an
industrial property. Site characteristics which are valuable to an industrial
property include clear heights, column spacing, number of bays and bay depths,
divisibility, truck turning radius and overall functionality and accessibility.
Location is also important because an industrial property requires the
availability of labor sources, proximity to supply sources and customers and
accessibility to rail lines, major roadways and other distribution channels.
BALLOON PAYMENTS
Certain of the Mortgage Loans as of the Cut-off Date may not be fully
amortizing over their terms to maturity and, thus, will require substantial
principal payments (i.e., balloon payments) at their stated maturity. Mortgage
Loans with balloon payments involve a greater degree of risk because the ability
of a mortgagor to make a balloon payment typically will depend upon its ability
either to timely refinance the loan or to timely sell the related Mortgaged
Property. The ability of a mortgagor to accomplish either of these goals will be
affected by a number of factors, including the level of available mortgage rates
at the time of sale or refinancing, the mortgagor's equity in the related
Mortgaged Property, the financial condition and operating history of the
mortgagor and the related Mortgaged Property, tax laws, rent control laws (with
respect to certain Multifamily Properties and mobile home parks), reimbursement
rates (with respect to certain hospitals, nursing homes and convalescent homes),
renewability of operating licenses, prevailing general economic conditions and
the availability of credit for commercial or multifamily, as the case may be,
real properties generally.
OBLIGOR DEFAULT
In order to maximize recoveries on defaulted Mortgage Loans, a Master
Servicer typically will have considerable flexibility to extend and modify
Mortgage Loans that are in default or as to which a payment default is
reasonably foreseeable, including in particular with respect to balloon
payments. In addition, a Master Servicer or a Special Servicer may receive a
workout fee based on receipts from or proceeds of such Mortgage Loans. While a
Master Servicer generally will be required to determine that any such extension
or modification is likely to produce a greater recovery on a present value basis
than liquidation, there can be no assurance that such flexibility with respect
to extensions or modifications or payment of a workout fee will increase the
present value of receipts from or proceeds of Mortgage Loans that are in default
or as to which a default is reasonably foreseeable. The recent foreclosure and
delinquency experience with respect to loans serviced by a Master Servicer or,
if applicable, any Special Servicer or significant Sub-Servicer will be provided
in the related Prospectus Supplement.
MORTGAGOR TYPE
Mortgage Loans made to partnerships, corporations or other entities may
entail risks of loss from delinquency and foreclosure that are greater than
those of Mortgage Loans made to individuals. Partnerships, corporations and
certain other types of organizations generally limit the liability of the
beneficial owners of such organizations for the obligations of such
organizations, and therefore limit the recourse of a lender to the assets of
such beneficial owners. The mortgagor's sophistication and form of organization
may increase the likelihood of protracted litigation or bankruptcy in default
situations.
11
<PAGE>
[INDUSTRIAL PROPERTIES VERSION]
DESCRIPTION OF THE TRUST FUNDS
MORTGAGE ASSETS
The primary assets of each Trust Fund (the 'Mortgage Assets') will include
mortgage loans secured by liens on, or security interests in, industrial
properties (the 'Mortgage Loans'). The Mortgage Assets will not be guaranteed or
insured by the Depositor or any of its affiliates. The Prospectus Supplement
will describe any guarantee or insurance relating to the Mortgage Assets by any
governmental agency or instrumentality or by any other person. Each Mortgage
Asset will be selected by the Depositor for inclusion in a Trust Fund from among
those purchased, either directly or indirectly, from a prior holder thereof (a
'Mortgage Asset Seller'), which prior holder may or may not be the originator of
such Mortgage Loan or the issuer of such MBS and may be an affiliate of the
Depositor.
MORTGAGE LOANS
The Mortgage Loans will be secured by liens on, or security interests in,
Mortgaged Properties consisting of industrial plants located in any one of the
fifty states or the District of Columbia or such other locations as are
disclosed in the related Prospectus Supplement. The Mortgage Loans will be
secured by mortgages or deeds of trust or other similar security instruments
creating a first or more junior lien on Mortgaged Properties. The Mortgaged
Properties may include leasehold interest in properties, the title to which is
held by third party lessors. The term of any such leasehold will exceed the term
of the mortgage note by at least ten years. Each Mortgage Loan will have been
originated by a person (the 'Originator') other than the Depositor. The Mortgage
Loans will be evidenced by promissory notes (the 'Mortgage Notes') secured by
mortgages or deeds of trust (the 'Mortgages') creating a lien on the Mortgaged
Properties. Mortgage Loans will generally also be secured by an assignment of
leases and rents and/or operating or other cash flow guarantees relating to the
Mortgage Loan.
DEFAULT AND LOSS CONSIDERATIONS WITH RESPECT TO THE MORTGAGE LOANS
Mortgage Loans secured by commercial and multifamily properties are
markedly different from owner-occupied single-family home mortgage loans. The
repayment of loans secured by commercial or multifamily properties is typically
dependent upon the successful operation of such property rather than upon the
liquidation value of the real estate. The Mortgage Loans will be non-recourse
loans, which means that, absent special facts, the mortgagee may look only to
the Net Operating Income from the property for repayment of the mortgage debt,
and not to any other of the mortgagor's assets, in the event of the mortgagor's
default. Lenders typically look to the Debt Service Coverage Ratio of a loan
secured by income-producing property as an important measure of the risk of
default on such a loan. The 'Debt Service Coverage Ratio' of a Mortgage Loan at
any given time is the ratio of the Net Operating Income for a twelve-month
period to the annualized scheduled payments on the Mortgage Loan. 'Net Operating
Income' is typically defined as total operating revenues (including primarily
rental income and any expense reimbursement, ancillary income, late charges and
deposit forfeitures) minus total operating expenses (including primarily
expenses for advertising, general administration, management fees and
disbursements, utilities, repairs and maintenance, insurance, real estate taxes
and replacement reserves based solely on the mortgagor's estimates of the useful
lives of various assets). Net Operating Income does not reflect capital
expenditures or partnership expenses. The Net Operating Income of a Mortgaged
Property will fluctuate over time and may be sufficient or insufficient to cover
debt service on the related Mortgage Loan at any given time.
As the primary component of Net Operating Income, rental income (and
maintenance payments from tenant-stockholders of a Cooperative) is subject to
the vagaries of the applicable real estate market and/or business climate.
Properties typically leased, occupied or used on a short-term basis, such as
health care-related facilities, hotels and motels, and mini-warehouse and self-
storage facilities, tend to be affected more rapidly by changes in market or
business conditions than do properties leased, occupied or used for longer
periods, such as (typically) warehouses, retail stores, office buildings and
industrial plants. Commercial Loans may be secured by owner-occupied Mortgaged
Properties or Mortgaged Properties leased to a single tenant. Accordingly, a
decline in the financial condition of the mortgagor or single tenant, as
applicable, may have a disproportionately greater effect on the Net Operating
Income from such Mortgaged Properties than would be the case with respect to
Mortgaged Properties with multiple tenants.
17
<PAGE>
MINI-WAREHOUSE/SELF-STORAGE PROPERTIES VERSION
The following are alternate pages to the base prospectus for a form of base
prospectus for a series of commercial mortgage pass-through certificates backed
by loans secured by mini-warehouse/self-storage properties. Disclosure made on
the following alternate pages will be included in the base prospectus for each
series of Certificates backed by loans containing a material concentration of
Mortgage Loans secured by mini-warehouse/self-storage properties.
<PAGE>
[MINI-WAREHOUSE/SELF-STORAGE FACILITIES VERSION]
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS TO WHICH IT RELATES
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS DATED NOVEMBER 12, 1997
(SUBJECT TO COMPLETION)
MORTGAGE PASS-THROUGH CERTIFICATES
(ISSUABLE IN SERIES)
NOMURA ASSET SECURITIES CORPORATION
DEPOSITOR
The Certificates offered hereby and by Supplements to this Prospectus (the
'Offered Certificates') will be offered from time to time in series. Each series
of Certificates will represent in the aggregate the entire beneficial ownership
interest in a trust fund (with respect to any series, the 'Trust Fund')
consisting of a segregated pool of mortgage loans secured by liens on or
security interests in mini-warehouse facilities or self-storage facilities (the
'Mortgage Loans,' or sometimes referred to herein as the 'Mortgage Assets'). The
Trust Fund for a series of Certificates may also include letters of credit,
insurance policies, guarantees, reserve funds or other types of credit support,
or any combination thereof (with respect to any series, collectively, 'Credit
Support'), and currency or interest rate exchange agreements and other financial
assets, or any combination thereof (with respect to any series, collectively,
'Cash Flow Agreements'). See 'Description of the Trust Funds', 'Description of
the Certificates' and 'Description of Credit Support'.
Each series of Certificates will consist of one or more classes of
Certificates that may (i) provide for the accrual of interest thereon based on
fixed, variable or adjustable rates; (ii) be senior or subordinate to one or
more other classes of Certificates in respect of certain distributions on the
Certificates; (iii) be entitled to principal distributions, with
disproportionately low, nominal or no interest distributions; (iv) be entitled
to interest distributions, with disproportionately low, nominal or no principal
distributions; (v) provide for distributions of accrued interest thereon only
following the occurrence of certain events, such as the retirement of one or
more other classes of Certificates of such series; or (vi) provide for
distributions of principal sequentially, or based on specified payment
schedules, to the extent of available funds, in each case as described in the
related Prospectus Supplement. Any such classes may include classes of Offered
Certificates. See 'Description of the Certificates'.
Principal and interest with respect to Certificates will be distributable
monthly, quarterly, semi-annually or at such other intervals and on the dates
specified in the related Prospectus Supplement. Distributions on the
Certificates of any series will be made only from the assets of the related
Trust Fund.
The Certificates of each series will not represent an obligation of or
interest in the Depositor, any Master Servicer, any Special Servicer or any of
their respective affiliates, except to the limited extent described herein and
in the related Prospectus Supplement. Only those Certificates and assets in the
related Trust Fund as are disclosed in the related Prospectus Supplement will be
guaranteed or insured by any governmental agency or instrumentality or by any
other person. The assets in each Trust Fund will be held in trust for the
benefit of the holders of the related series of Certificates pursuant to a
Pooling and Servicing Agreement or a Trust Agreement, as more fully described
herein.
The yield on each class of Certificates of a series will be affected by,
among other things, the rate of payment of principal (including voluntary and
involuntary prepayments) on the Mortgage Assets in the related Trust Fund and
the timing of receipt of such payments as described under the caption 'Yield
Considerations' herein and in the related Prospectus Supplement. A Trust Fund
may be subject to early termination under the circumstances described herein and
in the related Prospectus Supplement.
Prospective investors should review the information appearing under the
caption 'Risk Factors' herein and such information as may be set forth under the
caption 'Risk Factors' in the related Prospectus Supplement before purchasing
any Offered Certificate.
If so provided in the related Prospectus Supplement, one or more elections
may be made to treat the related Trust Fund or a designated portion thereof as
one or more 'real estate mortgage investment conduits' for federal income tax
purposes. See also 'Federal Income Tax Consequences' herein.
PROSPECTIVE INVESTORS SHOULD REVIEW THE DISCUSSION OF MATERIAL RISKS
APPEARING UNDER THE CAPTION 'RISK FACTORS' HEREIN COMMENCING ON PAGE 11.
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.
Prior to issuance there will have been no market for the Certificates of any
series and there can be no assurance that a secondary market for any Offered
Certificates will develop or that, if it does develop, it will continue. This
Prospectus may not be used to consummate sales of a series of Offered
Certificates unless accompanied by a Prospectus Supplement.
Offers of the Offered Certificates may be made through one or more different
methods, including offerings through underwriters, as more fully described under
'Method of Distribution' herein and in the related Prospectus Supplement. All
Offered Certificates will be distributed by, or sold by underwriters managed by:
NOMURA SECURITIES INTERNATIONAL, INC.
THE DATE OF THIS PROSPECTUS IS , 199
<PAGE>
[MINI-WAREHOUSE/SELF-STORAGE FACILITIES VERSION]
SUMMARY OF PROSPECTUS
The following summary of material information does not contain all the
material information regarding the Certificates and is qualified in its entirety
by reference to the more detailed information appearing elsewhere in this
Prospectus and by reference to the information with respect to each series of
Certificates contained in the Prospectus Supplement to be prepared and delivered
in connection with the offering of such series. An Index of Principal
Definitions is included at the end of this Prospectus.
TITLE OF CERTIFICATES
Mortgage Pass-Through Certificates, issuable in series (the
'Certificates').
DEPOSITOR
Nomura Asset Securities Corporation, a wholly-owned subsidiary of Nomura
Asset Capital Corporation. See 'The Depositor'.
MASTER SERVICER
The master servicer (the 'Master Servicer'), if any, for each series of
Certificates will be named in the related Prospectus Supplement. See
'Description of the Agreements--Collection and Other Servicing Procedures'.
SPECIAL SERVICER
The special servicer (the 'Special Servicer'), if any, for each series of
Certificates will be named, or the circumstances in accordance with which a
Special Servicer will be appointed will be described, in the related Prospectus
Supplement. See 'Description of the Agreements--Special Servicer'.
TRUSTEE
The trustee (the 'Trustee') for each series of Certificates will be named
in the related Prospectus Supplement. See 'Description of the Agreements--The
Trustee'.
THE TRUST ASSETS
Each series of Certificates will represent in the aggregate the entire
beneficial ownership interest in a Trust Fund consisting primarily of:
(A) MORTGAGE ASSETS
The Mortgage Assets with respect to each series of Certificates will
consist of a pool of commercial mortgage loans (the 'Mortgage Loans').
Except to the extent described in the related Prospectus Supplement, the
Mortgage Loans will not be guaranteed or insured by the Depositor or any of
its affiliates or by any governmental agency or instrumentality or other
person. As more specifically described herein, the Mortgage Loans will be
secured by liens on, or security interest in, properties consisting of
mini-warehouse facilities or self-storage facilities (the 'Mortgaged
Properties'). The Mortgaged Properties may be located in any one of the
fifty states or the District of Columbia or such other locations as are
disclosed in the related Prospectus Supplement. All Mortgage Loans will
have individual principal balances at origination of not less than $25,000
and original terms to maturity of not more than 40 years. All Mortgage
Loans will have been originated by persons other than the Depositor, and
all Mortgage Assets will have been purchased, either directly or
indirectly, by the Depositor on or before the date of initial issuance of
the related series of Certificates. As described herein and in the
Prospectus Supplement, each Mortgage Loan may (i) provide for no accrual of
interest or for accrual of interest thereon at an interest rate (a
'Mortgage Rate') that is fixed over its term or that adjusts from time to
time, or that may be converted from an adjustable to a fixed Mortgage Rate,
or from a fixed to an adjustable Mortgage Rate, from time to time at the
mortgagor's election; (ii) provide for scheduled payments to maturity,
payments that adjust from time to time in accommodate changes in the
Mortgage Rate or to reflect the occurrence of certain events, and may
provide negative amortization or accelerated amortization; (iii) be fully
amortizing or require a balloon payment due on its stated maturity date;
(iv) contain prohibitions on prepayment or require payment of a premium or
a yield maintenance penalty in connection with a prepayment; and (v)
provide for payments of principal, interest or both, on due dates that
occur monthly, quarterly, semi-annually or other interval. See 'Description
of the Trust Funds--Mortgage Assets'.
7
<PAGE>
[MINI-WAREHOUSE/SELF-STORAGE FACILITIES VERSION]
Mortgage Loan. With respect to those Mortgage Loans that provide for recourse
against the mortgagor and its assets generally, there can be no assurance that
such recourse will ensure a recovery in respect of a defaulted Mortgage Loan
greater than the liquidation value of the related Mortgaged Property.
Further, the concentration of default, foreclosure and loss risks in
individual mortgagors or Mortgage Loans in a particular Trust Fund or the
related Mortgaged Properties will generally be greater than for pools of
single-family loans both because the Mortgage Assets in a Trust Fund will
generally consist of a smaller number of loans than would a single-family pool
of comparable aggregate unpaid principal balance and because of the higher
principal balance of individual Mortgage Loans.
MINI-WAREHOUSE FACILITIES OR SELF-STORAGE FACILITIES
Mini-warehouse or self-storage properties are considered vulnerable to
competition, because both acquisition costs and break-even occupancy are
relatively low. The conversion of mini-warehouse or self-storage facilities to
alternative uses would generally require substantial capital expenditures. Thus,
if the operation of any of the mini-warehouse or self-storage Mortgaged
Properties becomes unprofitable due to decreased demand, competition, age of
improvements or other factors such that the borrower becomes unable to meet its
obligations on the related Mortgage Loan, the liquidation value of that
self-storage Mortgaged Property may be substantially less, relative to the
amount owing on the Mortgage Loan, than would be the case if the self-storage
Mortgaged Property were readily adaptable to other uses. Tenant privacy,
anonymity and efficient access may heighten environmental risks. No
environmental assessment of a Mortgaged Property included an inspection of the
contents of the self-storage units included in the self-storage Mortgaged
Properties and there is no assurance that all of the units included in the
self-storage Mortgaged Properties are free from hazardous substances or other
pollutants or contaminants or will remain so in the future.
BALLOON PAYMENTS
Certain of the Mortgage Loans as of the Cut-off Date may not be fully
amortizing over their terms to maturity and, thus, will require substantial
principal payments (i.e., balloon payments) at their stated maturity. Mortgage
Loans with balloon payments involve a greater degree of risk because the ability
of a mortgagor to make a balloon payment typically will depend upon its ability
either to timely refinance the loan or to timely sell the related Mortgaged
Property. The ability of a mortgagor to accomplish either of these goals will be
affected by a number of factors, including the level of available mortgage rates
at the time of sale or refinancing, the mortgagor's equity in the related
Mortgaged Property, the financial condition and operating history of the
mortgagor and the related Mortgaged Property, tax laws, rent control laws (with
respect to certain Multifamily Properties and mobile home parks), reimbursement
rates (with respect to certain hospitals, nursing homes and convalescent homes),
renewability of operating licenses, prevailing general economic conditions and
the availability of credit for commercial or multifamily, as the case may be,
real properties generally.
OBLIGOR DEFAULT
In order to maximize recoveries on defaulted Mortgage Loans, a Master
Servicer typically will have considerable flexibility to extend and modify
Mortgage Loans that are in default or as to which a payment default is
reasonably foreseeable, including in particular with respect to balloon
payments. In addition, a Master Servicer or a Special Servicer may receive a
workout fee based on receipts from or proceeds of such Mortgage Loans. While a
Master Servicer generally will be required to determine that any such extension
or modification is likely to produce a greater recovery on a present value basis
than liquidation, there can be no assurance that such flexibility with respect
to extensions or modifications or payment of a workout fee will increase the
present value of receipts from or proceeds of Mortgage Loans that are in default
or as to which a default is reasonably foreseeable. The recent foreclosure and
delinquency experience with respect to loans serviced by a Master Servicer or,
if applicable, any Special Servicer or significant Sub-Servicer will be provided
in the related Prospectus Supplement.
MORTGAGOR TYPE
Mortgage Loans made to partnerships, corporations or other entities may
entail risks of loss from delinquency and foreclosure that are greater than
those of Mortgage Loans made to individuals. Partnerships, corporations and
certain other types of organizations generally limit the liability of the
beneficial owners of such organizations for the obligations of such
organizations, and therefore limit the recourse of a lender to the assets of
such beneficial owners. The mortgagor's sophistication and form of organization
may increase the likelihood of protracted litigation or bankruptcy in default
situations.
13
<PAGE>
[MINI-WAREHOUSE/SELF-STORAGE PROPERTIES VERSION]
DESCRIPTION OF THE TRUST FUNDS
MORTGAGE ASSETS
The primary assets of each Trust Fund (the 'Mortgage Assets') will include
mortgage loans secured by liens on, or security interests in, mini-warehouse
facility or self-storage facility properties. The Mortgage Assets will not be
guaranteed or insured by the Depositor or any of its affiliates. The Prospectus
Supplement will describe any guarantee or insurance relating to the Mortgage
Assets by any governmental agency or instrumentality or by any other person.
Each Mortgage Asset will be selected by the Depositor for inclusion in a Trust
Fund from among those purchased, either directly or indirectly, from a prior
holder thereof (a 'Mortgage Asset Seller'), which prior holder may or may not be
the originator of such Mortgage Loan and may be an affiliate of the Depositor.
MORTGAGE LOANS
The Mortgage Loans will be secured by liens on, or security interests in,
Mortgaged Properties consisting of mini-warehouse facilities or self-storage
facilities located in any one of the fifty states or the District of Columbia or
such other locations as are disclosed in the related Prospectus Supplement. The
Mortgage Loans will be secured by mortgages or deeds of trust or other similar
security instruments creating a first or more junior lien on Mortgaged
Properties. The Mortgaged Properties may include leasehold interest in
properties, the title to which is held by third party lessors. The term of any
such leasehold will exceed the term of the mortgage note by at least ten years.
Each Mortgage Loan will have been originated by a person (the 'Originator')
other than the Depositor. The Mortgage Loans will be evidenced by promissory
notes (the 'Mortgage Notes') secured by mortgages or deeds of trust (the
'Mortgages') creating a lien on the Mortgaged Properties. Mortgage Loans will
generally also be secured by an assignment of leases and rents and/or operating
or other cash flow guarantees relating to the Mortgage Loan.
DEFAULT AND LOSS CONSIDERATIONS WITH RESPECT TO THE MORTGAGE LOANS
Mortgage Loans secured by commercial and multifamily properties are
markedly different from owner-occupied single-family home mortgage loans. The
repayment of loans secured by commercial or multifamily properties is typically
dependent upon the successful operation of such property rather than upon the
liquidation value of the real estate. The Mortgage Loans will be non-recourse
loans, which means that, absent special facts, the mortgagee may look only to
the Net Operating Income from the property for repayment of the mortgage debt,
and not to any other of the mortgagor's assets, in the event of the mortgagor's
default. Lenders typically look to the Debt Service Coverage Ratio of a loan
secured by income-producing property as an important measure of the risk of
default on such a loan. The 'Debt Service Coverage Ratio' of a Mortgage Loan at
any given time is the ratio of the Net Operating Income for a twelve-month
period to the annualized scheduled payments on the Mortgage Loan. 'Net Operating
Income' is typically defined as total operating revenues (including primarily
rental income and any expense reimbursement, ancillary income, late charges and
deposit forfeitures) minus total operating expenses (including primarily
expenses for advertising, general administration, management fees and
disbursements, utilities, repairs and maintenance, insurance, real estate taxes
and replacement reserves based solely on the mortgagor's estimates of the useful
lives of various assets). Net Operating Income does not reflect capital
expenditures or partnership expenses. The Net Operating Income of a Mortgaged
Property will fluctuate over time and may be sufficient or insufficient to cover
debt service on the related Mortgage Loan at any given time.
As the primary component of Net Operating Income, rental income (and
maintenance payments from tenant-stockholders of a Cooperative) is subject to
the vagaries of the applicable real estate market and/or business climate.
Properties typically leased, occupied or used on a short-term basis, such as
health care-related facilities, hotels and motels, and mini-warehouse and self-
storage facilities, tend to be affected more rapidly by changes in market or
business conditions than do properties leased, occupied or used for longer
periods, such as (typically) warehouses, retail stores, office buildings and
industrial plants. Commercial Loans may be secured by owner-occupied Mortgaged
Properties or Mortgaged Properties leased to a single tenant. Accordingly, a
decline in the financial condition of the mortgagor or single tenant, as
applicable, may have a disproportionately greater effect on the Net Operating
Income from such Mortgaged Properties than would be the case with respect to
Mortgaged Properties with multiple tenants.
Changes in the expense components of Net Operating Income due to the
general economic climate or economic conditions in a locality or industry
segment, such as increases in interest rates, real estate and personal property
tax rates and other operating expenses including energy costs; changes in
governmental rules, regulations and fiscal policies, including environmental
legislation; and acts of God may also affect the risk of default on the related
Mortgage Loan. As may be further described in the related Prospectus Supplement,
in some cases leases of Mortgaged Properties may provide that the lessee, rather
than the
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