UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
Commission File Nos.: 33-67202
FUND AMERICA INVESTORS CORPORATION II
(Exact name of registrant as specified in its
charter)
Delaware 84-1218906
(State or other jurisdiction (I.R.S. Employer
of incorporation or oganization) identification number)
6400 S. Fiddler's Green Circle, Suite 1200B,
Englewood, Colorado 80111
(Address of principal executive offices)
Registrant's telephone number including area
code: (303) 290-6025
Indicate by check mark whether the registrant
(1) has filed all reports required to be
filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter
period that the registrant was required to
file such reports), and (2) has been subject
to such filing requirements for the past 90
days. YES [X] NO [ ]
Indicate the number of shares outstanding of
each of the issuer's classes of common stock
as of May 14, 1996 -- 349,000 shares
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FUND AMERICA INVESTORS CORPORATION II
FORM 10-Q FOR THE
THREE MONTHS ENDED MARCH 31, 1996
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements 3
Item 2. Management's Discussion
and Analysis of Financial
Condition and Results
of Operations 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 7
Item 2. Changes in Securities 7
Item 3. Defaults Upon Senior
Securities 7
Item 4. Submission of Matters
to a Vote of Security
Holders 7
Item 5. Other Information 7
Item 6. Exhibits and Reports 7
SIGNATURES 9
Page 2
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<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FUND AMERICA INVESTORS CORPORATION II
BALANCE SHEETS
(Unaudited)
<CAPTION>
March 31, December 31,
1996 1995
_________ _________
<S> <C> <C>
Assets
Cash $ 33,944 $ 40,450
Deferred offering
costs 398,704 398,704
Organizational costs,
net 1,060 1,219
_________ _________
Total assets $ 433,708 $ 440,373
========= =========
Liabilities
Accounts payable $ 6,246 $ 94
_________ _________
Shareholder's equity
Common stock, par value
$.01 per share;
1,000,000 shares
authorized; 349,000
shares issued and
outstanding 3,490 3,490
Retained earnings 423,972 436,789
_________ _________
Total shareholder's
equity 427,462 440,279
_________ _________
Total liabilities
and shareholder's
equity $ 433,708 $ 440,373
========= =========
<FN>
See notes to financial statements
Page 3
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<TABLE>
FUND AMERICA INVESTORS CORPORATION II
Statements of Operations
(Unaudited)
<CAPTION>
Three months ended
March 31,
1996 1995
_________ _________
<S> <C> <C>
Revenue
Interest income 308 $ 12,631
_________ _________
Total revenue 308 12,631
_________ _________
Expenses
General and
administrative 6,966 10,555
Amortization of
organization costs 159 159
Management fees 6,000 6,000
_________ _________
Total expenses 13,125 16,714
_________ _________
Net loss $(12,817) $(4,083)
========= =========
<FN>
See notes to financial statements
Page 4
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<TABLE>
FUND AMERICA INVESTORS CORPORATION
Statements of Cash Flows
(Unaudited)
<CAPTION>
Three months ended
March 31,
1996 1995
_________ __________
<S> <C> <C>
Net cash flow from
operating activities:
Net loss $(12,817) $(4,083)
Adjustments to
reconcile net loss
to net cash flow
from operating
activities:
Amortization of
organizational costs 159 159
Changes in operating
assets and liabilities:
Accounts receivable - 285
Accounts payable 6,152 7,150
_________ __________
Net cash flow used
in operating
activities (6,506) 3,511
Net cash used in
financing activities
Shareholder
distributions - (700,000)
_________ __________
Net decrease in cash (6,506) (696,489)
Cash at beginning
of period 40,450 1,392,900
_________ _________
Cash at end of
period $ 33,944 $ 696,411
========= =========
<FN>
See notes to financial statements
Page 5
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FUND AMERICA INVESTORS CORPORATION II
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Three months ended March 31, 1996 and 1995
1. Basis of Presentation
Organization
Fund America Investors Corporation II (the
"Company") was incorporated in the State of
Delaware on December 14, 1992 as a limited
purpose finance corporation. The Company was
established for the purpose of (A) issuing
and administering (i) one or more series of
mortgage pass-through certificates
representing the beneficial ownership in
trust funds consisting of mortgage loans and
other mortgage-related assets and created by
the Company from time to time, and (ii) one
or more series of bonds collateralized by
mortgage loans or mortgage pass-through
certificates directly or through one or more
trusts beneficially owned by it and (B)
purchasing, owning and selling mortgage loans
and other mortgage-related assets.
The Company will not engage in any business
or investment activities other than the purchase,
ownership and sale of mortgage loans and other
mortgage collateral, the issuance and sale of
bonds or pass-through certificates backed by
mortgage collateral and activities related thereto
as set forth in the Company's Certificate of
Incorporation, directly through one or more
trusts beneficially owned by it.
On January 3, 1994, the Company filed a shelf
registration statement on Form S-11 (File No.
33-73748) (the "Registration Statement") with
the Securities and Exchange Commission
("SEC"). The Registration Statement was
subsequently amended to (i) increase the
aggregate amount of securities offered
thereunder to $501,000,000, (ii) convert the
Registration Statement to a registration
statement on Form S-3, and (iii) respond to
various comments received by the Company from
the SEC. The Registration Statement, as so
amended, was declared effective by the SEC on
March 28, 1996. Pursuant to Rule 429 of the
General Rules and Regulations under the
Securities Act of 1933, as amended, the
prospectus which is part of the Registration
Statement is a combined prospectus relating
also to $328,086,945 of securities registered
under the Company's Registration Statement
No. 33-67202 and remaining unissued. Under
the Registration Statement, the Company may
issue either collateralized mortgage
obligations or mortgage pass-through
certificates. To date, the Company has
issued no securities off of the Registration
Statement. However, the company is scheduled
to issue approximately $296,300,000 of
collateralized mortgage obligations off of
the Registration Statement in April 1996.
2. Unaudited Financial Statements
In the opinion of management, the
accompanying unaudited financial statements
contain all adjustments necessary to present
fairly the financial position of the Company
at March 31, 1996, and the results of its
operations and cash flows for the periods
ended March 31, 1996 and 1995.
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operation
Liquidity and Capital Resources
The Company will fund its ongoing operating
expenses from its cash balances, revenues
derived from the issuance of mortgage
securities, and, if necessary, with borrowing
from its sole shareholder. As of March 31,
1996, $1,000,000 was available to be borrowed
from the Company's Shareholders under a Line
of Credit dated April 3, 1995. Any
borrowings will be subordinate and junior to
any issued mortgage securities.
Results of Operations
The Company reported a net loss for the three
months ended March 31, 1996 of $12,817 as
compared to net loss of $4,083 for the three
months ended March 31,1995. A decrease of
interest earned on cash balances accounts for
the primary difference in the results of
operation between the two reporting periods.
Page 6
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of
Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None.
Page 7
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SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the
registrant has duly caused this report to be
signed on its behalf by the undersigned
thereunto duly authorized.
FUND AMERICA INVESTORS CORPORATION II
(Registrant)
Date: May 14, 1996
By: /s/ Helen M. Dickens
Helen M. Dickens
Vice President and Secretary
(Duly authorized and
Principal Financial Officer)
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