<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) September 22, 1998
--------------
UCFC Acceptance Corporation
---------------------------
(Exact name of registrant as specified in its charter)
Louisiana 333-37499 72-123-5336
- ------------------------------- ---------- -------------
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) ID Number)
4041 Essen Lane, Baton Rouge, Louisiana 70809
- ---------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
including area code: (504) 987-6007
-------------
N/A
- ---------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
------------
Filing of Computational Materials and Consent of Independent Accountants.*
- -------------------------------------------------------------------------
Pursuant to Rule 424(b) under the Securities Act of 1933, as amended,
UCFC Acceptance Corporation (the "Depositor") is filing a prospectus and
prospectus supplement with the Securities and Exchange Commission relating to
the issuance by Home Equity Loan Owner Trust 1998-BA of its Asset-Backed
Notes, Series 1998-BA (the "Notes").
In connection with the issuance by UCFC Home Equity Loan Owner Trust
1998-BA of the Notes, Morgan Stanley & Co. Incorporated prepared certain
materials (the "Computational Materials") which were distributed by J.P. Morgan
Securities Inc., NationsBanc Montgomery Securities LLC and Prudential Securities
Incorporated (the "Underwriters") to their potential investors. Although the
Depositor provided the Underwriters with certain information regarding the
characteristics of the Home Equity Loans in the related portfolio, it did not
participate in the preparation of the Computational Materials. The Computational
Materials are attached hereto as Exhibit 99.1. The legends which the
Underwriters, other than Morgan Stanley & Co. Incorporated, placed on the
Computational Materials are attached hereto as Exhibit 99.2.
Also included for filing as Exhibit 23.1 attached hereto is the Consent
of KPMG Peat Marwick LLP, independent auditors for Financial Guaranty Insurance
Company ("FGIC"), insurer of the Notes. The Financial Statements of FGIC as of
December 31, 1997 and 1996 and for each of the years in the three-year period
ended December 31, 1997 are attached hereto as Exhibit 99.3. The Unaudited
Interim Financial Statements of FGIC for the six months ended June 30, 1998 are
attached hereto as Exhibit 99.4.
- --------------------------------
* Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Prospectus dated September 22, 1998, and
Prospectus Supplement dated September 22, 1998, of UCFC Acceptance
Corporation, relating to the issuance by UCFC Home Equity Loan Owner Trust
1998-BA of Asset-Backed Notes, Series 1998-BA.
-2-
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
------------------------------------------------------------------
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
23.1. Consent of KPMG Peat Marwick LLP.
99.1. Computational Materials.
99.2. Underwriters' Legends for Computational Materials.
99.3. Audited Financial Statements of Financial Guaranty Insurance
Company.
99.4. Unaudited Interim Financial Statements of Financial Guaranty
Insurance Company.
-3-
<PAGE>
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.
UCFC ACCEPTANCE CORPORATION
By: /s/ H. C. McCall, III
-----------------------------------
Name: H.C. McCall, III
Title: President
Dated: September 22, 1998
-4-
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Page
- ------- ----
23.1. Consent of KPMG Peat Marwick LLP.
99.1. Computational Materials.
99.2. Underwriters' Legends for Computational Materials.
99.3. Audited Financial Statements of Financial Guaranty
Insurance Company.
99.4. Unaudited Interim Financial Statements of Financial
Guaranty Insurance Company.
-5-
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors
Financial Guaranty Insurance Company:
We consent to the use of our report dated January 23, 1998 on the financial
statements of Financial Guaranty Insurance Company as of December 31, 1997 and
December 31, 1996, and for each of the years in the three-year period ended
December 31, 1997 included in the Form 8-K of UCFC Acceptance Corporation (the
"Registrant") which is incorporated by reference in the registration statement
(No. 333-37499), and to the reference to our firm under the heading "Report of
Experts" in the Prospectus Supplement of the Registrant.
New York, New York
September 22, 1998
/s/ KPMG Peat Marwick LLP
-------------------------
-6-
<PAGE>
MORGAN STANLEY DEAN WITTER September 15, 1998
Asset Finance Group [GRAPHIC]
ABS/MBS Capital Markets
ABS New Transaction
Computational Materials
$900,000,000 (Approximate)
UCFC
Home Equity Loan Owner Trust
Series 1998-BA
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
MORGAN STANLEY DEAN WITTER September 15, 1998
Asset Finance Group [GRAPHIC]
ABS/MBS Capital Markets
$900,000,000 UCFC Home Equity Loan Owner Trust, Series 1998-BA
United Companies Lending Corporation -- Master Servicer
Transaction Highlights
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Expected Payment
Ratings Avg Life Window
(S&P/ To Call / To Call / Day Count Price
Class(1) Description of Notes Moody's/Fitch) Balance Mty(1)(2) Mty(1)(2) Benchmark Talk
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A ARM Floater AAA/Aaa/AAA $900,000,000 3.43 / 3.75 96 / 357 Actual/360 1-mo. LIBOR + [ ]
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes: (1) The notes are priced to the 10% optional termination date.
(2) Based on the pricing prepayment speed. See details below.
Depositor: UCFC Acceptance Corporation
Master Servicer: United Companies Lending Corporation
Indenture Trustee: Bankers Trust Company of California, N.A.
Managers: MORGAN STANLEY DEAN WITTER (lead manager),
Prudential Securities, JP Morgan Securities,
Nationsbanc Montgomery Securities
(co-managers)
Expected Pricing Date: September 16-17, 1998.
Expected Settlement Date: September 24, 1998 through DTC, Euroclear, and
CEDEL. Settles flat.
Distribution Dates: The 15th of each month, beginning October 15,
1998.
Mortgage Loans: The Trust will consist of two types of home
equity mortgage loans:
o conventional, adjustable-rate home
equity mortgage loans (expected to be
approximately 92% of the aggregate pool.)
o conventional, fixed-rate home equity
mortgage loans (expected to be
approximately 8% of the aggregate pool.)
Note: The combination of the ARM and FRM
collateral will pay interest and principal on
the Class A Notes.
Pricing Prepayment Speed: o Fixed Rate Loans: The fixed rate loans
assume 25% HEP which equates to a ramped
CPR starting at 2.5% CPR in the first
month increasing linearly to 25.0% CPR
over 10 months, and remaining at 25.0%
CPR thereafter.
o Adjustable Rate Loans: For the 2/28 and
3/27 loans, 100% PPC. 100% PPC assumes
4.0% CPR in the first month increasing
linearly to 30.0% CPR in month 30,
remaining constant at 30.0% CPR from
months 30 to 40, and reducing to 25% CPR
for months 41 and therafter. For all other
ARM products, 28% CPR.
Credit Enhancement: The Notes are credit enhanced by a 100% FGIC
guaranty, a reserve account, and
cross-collateralization with the UCFC 1998-C
fixed-rate transaction which is currently
being offered.
Optional Termination: 10% of original pool balance. The Notes are
priced to the 10% optional termination date.
The margin on the Class A Notes will double
after the optional termination date.
Note Rate: On or before the optimal termination date, the
lesser of:
1) 1-month LIBOR + [ ] bps, or
2) the available funds cap
After the optional termination date, the
lesser of: 1) 1-month LIBOR + [ ] bps, or 2)
the available funds cap.
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Available Funds Cap: Available funds cap is equal to the loan rate
on the mortgage loans less the servicing,
trustee, and surety fees.
Trust Tax Status: Owner Trust.
ERISA Eligibility: Subject to the discussion in the prospectus,
the Notes are ERISA eligible.
SMMEA Eligibility: The Notes are not SMMEA eligible.
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
UCFC 1998-BA Collateral Description
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
Fixed Rate Home Equity Loans ARM Home Equity Loans All Home Equity Loans
---------------------------- --------------------- ---------------------
<S> <C> <C> <C>
Aggregate Pool Balance: $71,667,861.35 $696,192,548.60 $767,860,409.95
Number of Loans: 1,518 8,415 9,933
Average Outstanding $47,212 (min: $5,455 / max: $82,732 (min: $8,800 / max: $77,304 (min: $5,455 / max:
Balance: $345,744) $945,000) $945,000)
Total Original Balance: $71,935,665 $697,641,684 $769,577,349
Average Original Balance: $47,388 (min: $5,600 / max: $82,905 (min: $8,800 / max: $77,477 (min: $5,600 / max:
$346,600) $945,000) $945,000)
Lien Position: 93.94% firsts; 6.06% seconds 99.99% firsts; 0.01% seconds 99.43% firsts; 0.57% seconds
WA Original Combined
Loan to Value Ratio: 79.99% (52.33% great than 80%, 81.94% (56.47% greater than 81.76% (56.09% greater
min: 8.00% / max: 100.00%) 80%, min: / 9.40% max: 100.00%) than 80%, min: 8.00% /
max: 100.00%)
Loan Type: a) 97.70% Fixed Rate a) 81.10% 3-year fixed/ a) 73.53% 3-year fixed/
b) 2.30% Balloon 6-month ARM 6-month ARM
b) 15.65% 6-month ARM b) 14.19% 6-month ARM
c) 2.05% 6-month/1-year c) 9.12% Fixed Rate Non-
d) 0.76% 3-year fixed/1-year ARM Balloon
e) 0.45% 2-year fixed/6-month ARM d) 1.86% 6-month/1-year
e) 0.69% 3-year fixed/1-
year ARM
f) 0.41% 2-year fixed/
6-month ARM
g) 0.22% Fixed Rate Balloon
WA Original Term: 260 months (9.72% less than 342 months (0.12% less than 335 months (1.02% less than
180-mo., 42.71% = 360-mo.; 180-mo., 88.45% = 360-mo.; min: 60 / 180-mo.,
min: 60 / max: 360) max: 360) 84.18% = 360-mo.; min:
60 /max: 360)
WA Remaining Term: 257 months (min: 51 / max: 360) 340 months (min: 57 / max: 360) 332 months (min: 51 /
max: 360)
WA Seasoning: 2.8 months 2.7 months 2.7 months
Interest Rate Index: NA a) 97.30% 6-month LIBOR NA
b) 2.70% 1-year CMT
Latest Scheduled September 1, 2028 October 1, 2028 October 1, 2028
Maturity:
Property Type: a) 81.04% single family a) 90.57% single family a) 89.68% single family
b) 11.08% manufactured housing b) 3.78% 2-4 family b) 3.89% 2-4 family
c) 4.89% 2-4 family c) 2.76% condominium c) 2.69% condominium
d) 2.00% condominium d) 1.89% PUD d) 1.73% PUD
Owner Occupancy: a) 92.88% owner occupied a) 97.73% owner occupied a) 97.28% owner occupied
b) 7.06% investor property b) 1.92% investor property b) 2.40% investor property
Geographic Distribution
(greater than 5%): LA (12.07%), FL (7.51%), NC CA (14.14%), OH (7.67%), CA (13.32%), OH (7.37%),
(7.06%), MI (5.44%), NC (5.32%) NC (5.48%), MI (5.33%), FL
CA (5.36%), TN (5.14%), MS (5.11%) (5.02%)
WA Gross Coupon: 11.052% (min: 8.500%/max: 15.240%) 9.885% (current, min: 5.750%/ 9.994% (current, min: 5.750%/
max: 16.990%) max: 16.990%)
WA Gross Margin: NA 5.277% (current, min: 1.750%/ NA
max: 9.250%)
WA Months to Roll: NA 29.8 NA
WA Floor: NA 8.69% NA
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
<TABLE>
<CAPTION>
Decrement Table
---------------
Priced to Call* Priced To Maturity*
--------------- -------------------
---- ----
Date 0% 75% 100% 150% 200% 0% 75% 100% 150% 200%
---- -- --- ---- ---- ---- -- --- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/15/1998 100 100 100 100 100 100 100 100 100 100
9/15/1999 99 89 85 78 71 99 89 85 78 71
9/15/2000 98 73 66 51 39 98 73 66 51 39
9/15/2001 98 57 46 29 16 98 57 46 29 16
9/15/2002 97 45 34 17 0 97 45 34 17 8
9/15/2003 96 36 25 11 0 96 36 25 11 4
9/15/2004 94 29 18 0 0 94 29 18 7 2
9/15/2005 93 23 14 0 0 93 23 14 4 1
9/15/2006 92 18 0 0 0 92 18 10 2 0
9/15/2007 90 15 0 0 0 90 15 7 1 0
9/15/2008 88 12 0 0 0 88 12 5 1 0
9/15/2009 86 0 0 0 0 86 9 4 1 0
9/15/2010 84 0 0 0 0 84 7 3 0 0
9/15/2011 82 0 0 0 0 82 6 2 0 0
9/15/2012 79 0 0 0 0 79 4 1 0 0
9/15/2013 76 0 0 0 0 76 4 1 0 0
9/15/2014 74 0 0 0 0 74 3 1 0 0
9/15/2015 70 0 0 0 0 70 2 1 0 0
9/15/2016 67 0 0 0 0 67 2 0 0 0
9/15/2017 63 0 0 0 0 63 1 0 0 0
9/15/2018 59 0 0 0 0 59 1 0 0 0
9/15/2019 54 0 0 0 0 54 1 0 0 0
9/15/2020 49 0 0 0 0 49 1 0 0 0
9/15/2021 43 0 0 0 0 43 0 0 0 0
9/15/2022 37 0 0 0 0 37 0 0 0 0
9/15/2023 30 0 0 0 0 30 0 0 0 0
9/15/2024 22 0 0 0 0 22 0 0 0 0
9/15/2025 13 0 0 0 0 13 0 0 0 0
9/15/2026 0 0 0 0 0 4 0 0 0 0
9/15/2027 0 0 0 0 0 1 0 0 0 0
9/15/2028 0 0 0 0 0 0 0 0 0 0
Average Life 19.81 4.49 3.43 2.33 1.77 19.87 4.89 3.75 2.54 1.91
First Prin 10/15/1998 10/15/1998 10/15/1998 10/15/1998 10/15/1998 10/15/1998 10/15/1998 10/15/1998 10/15/1998 10/15/1998
Last Prin 02/15/2026 5/15/2009 9/15/2006 11/15/2003 5/15/2002 6/15/2028 6/15/2028 6/15/2028 6/15/2028 7/15/2027
Payment Window 329 128 96 62 44 357 357 357 357 346
----------- -----------
</TABLE>
*Note: Scenarios delineated based on percentage of prepayment speed
assumption.
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
<TABLE>
<CAPTION>
Available Funds Cap Schedule
Class A-1 Class A-1 Class A-1 Class A-1
Date Cap Date Cap Date Cap Date Cap
<S> <C> <C> <C> <C> <C> <C> <C>
10/15/1998 13.35 1/15/2003 12.86 4/15/2007 14.50 7/15/2011 15.06
11/15/1998 9.05 2/15/2003 12.86 5/15/2007 14.98 8/15/2011 14.58
12/15/1998 9.35 3/15/2003 14.57 6/15/2007 14.50 9/15/2011 14.58
1/15/1999 9.08 4/15/2003 13.33 7/15/2007 14.98 10/15/2011 15.07
2/15/1999 9.13 5/15/2003 13.92 8/15/2007 14.50 11/15/2011 14.59
3/15/1999 10.13 6/15/2003 13.47 9/15/2007 14.50 12/15/2011 15.08
4/15/1999 9.15 7/15/2003 14.09 10/15/2007 14.99 1/15/2012 14.59
5/15/1999 9.46 8/15/2003 13.63 11/15/2007 14.50 2/15/2012 14.59
6/15/1999 9.15 9/15/2003 13.95 12/15/2007 14.99 3/15/2012 15.60
7/15/1999 9.49 10/15/2003 14.59 1/15/2008 14.51 4/15/2012 14.60
8/15/1999 9.23 11/15/2003 14.26 2/15/2008 14.51 5/15/2012 15.09
9/15/1999 9.25 12/15/2003 14.74 3/15/2008 15.51 6/15/2012 14.60
10/15/1999 9.58 1/15/2004 14.28 4/15/2008 14.51 7/15/2012 15.09
11/15/1999 9.27 2/15/2004 14.28 5/15/2008 15.00 8/15/2012 14.61
12/15/1999 9.58 3/15/2004 15.32 6/15/2008 14.51 9/15/2012 14.61
1/15/2000 9.30 4/15/2004 14.36 7/15/2008 15.00 10/15/2012 15.09
2/15/2000 9.34 5/15/2004 14.94 8/15/2008 14.52 11/15/2012 14.61
3/15/2000 10.00 6/15/2004 14.46 9/15/2008 14.52 12/15/2012 15.09
4/15/2000 9.38 7/15/2004 14.94 10/15/2008 15.00 1/15/2013 14.61
5/15/2000 9.69 8/15/2004 14.46 11/15/2008 14.52 2/15/2013 14.61
6/15/2000 9.38 9/15/2004 14.46 12/15/2008 15.01 3/15/2013 16.17
7/15/2000 9.72 10/15/2004 14.95 1/15/2009 14.52 4/15/2013 14.61
8/15/2000 9.45 11/15/2004 14.47 2/15/2009 14.53 5/15/2013 15.11
9/15/2000 9.47 12/15/2004 14.95 3/15/2009 16.08 6/15/2013 14.62
10/15/2000 9.81 1/15/2005 14.47 4/15/2009 14.53 7/15/2013 15.11
11/15/2000 9.50 2/15/2005 14.47 5/15/2009 15.02 8/15/2013 14.62
12/15/2000 9.82 3/15/2005 16.02 6/15/2009 14.53 9/15/2013 14.62
1/15/2001 9.53 4/15/2005 14.47 7/15/2009 15.02 10/15/2013 15.11
2/15/2001 9.57 5/15/2005 14.95 8/15/2009 14.54 11/15/2013 14.62
3/15/2001 10.61 6/15/2005 14.47 9/15/2009 14.54 12/15/2013 15.11
4/15/2001 9.63 7/15/2005 14.96 10/15/2009 15.02 1/15/2014 14.62
5/15/2001 9.95 8/15/2005 14.47 11/15/2009 14.54 2/15/2014 14.62
6/15/2001 9.63 9/15/2005 14.47 12/15/2009 15.03 3/15/2014 16.19
7/15/2001 10.30 10/15/2005 14.96 1/15/2010 14.54 4/15/2014 14.62
8/15/2001 10.01 11/15/2005 14.48 2/15/2010 14.55 5/15/2014 15.11
9/15/2001 10.59 12/15/2005 14.96 3/15/2010 16.11 6/15/2014 14.62
10/15/2001 11.30 1/15/2006 14.48 4/15/2010 14.55 7/15/2014 15.11
11/15/2001 11.11 2/15/2006 14.48 5/15/2010 15.04 8/15/2014 14.62
12/15/2001 11.48 3/15/2006 16.03 6/15/2010 14.55 9/15/2014 14.62
1/15/2002 11.28 4/15/2006 14.48 7/15/2010 15.04 10/15/2014 15.11
2/15/2002 11.28 5/15/2006 14.97 8/15/2010 14.56 11/15/2014 14.63
3/15/2002 12.82 6/15/2006 14.48 9/15/2010 14.56 12/15/2014 15.11
4/15/2002 11.77 7/15/2006 14.97 10/15/2010 15.05 1/15/2015 14.63
5/15/2002 12.30 8/15/2006 14.49 11/15/2010 14.56 2/15/2015 14.63
6/15/2002 11.90 9/15/2006 14.49 12/15/2010 15.05 3/15/2015 16.19
7/15/2002 12.46 10/15/2006 14.97 1/15/2011 14.57 4/15/2015 14.63
8/15/2002 12.06 11/15/2006 14.49 2/15/2011 14.57 5/15/2015 15.12
9/15/2002 12.38 12/15/2006 14.97 3/15/2011 16.13 6/15/2015 14.63
10/15/2002 12.98 1/15/2007 14.49 4/15/2011 14.57 7/15/2015 15.12
11/15/2002 12.70 2/15/2007 14.49 5/15/2011 15.06 8/15/2015 14.63
12/15/2002 13.12 3/15/2007 16.05 6/15/2011 14.58 9/15/2015 14.63
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Available Funds Cap Schedule
(continued)
<TABLE>
<CAPTION>
Class A-1 Class A-1 Class A-1 Class A-1
Date Cap Date Cap Date Cap Date Cap
<S> <C> <C> <C> <C> <C> <C> <C> <C>
10/15/2015 15.12 7/15/2019 15.14 4/15/2023 14.64 1/15/2027 13.25
11/15/2015 14.63 8/15/2019 14.65 5/15/2023 15.13 2/15/2027 13.00
12/15/2015 15.12 9/15/2019 14.65 6/15/2023 14.64 3/15/2027 13.96
1/15/2016 14.63 10/15/2019 15.14 7/15/2023 15.13 4/15/2027 11.86
2/15/2016 14.63 11/15/2019 14.65 8/15/2023 14.64 5/15/2027 12.24
3/15/2016 15.64 12/15/2019 15.14 9/15/2023 14.64 6/15/2027 11.83
4/15/2016 14.63 1/15/2020 14.65 10/15/2023 15.13 7/15/2027 12.20
5/15/2016 15.12 2/15/2020 14.65 11/15/2023 14.64 8/15/2027 11.78
6/15/2016 14.63 3/15/2020 15.66 12/15/2023 15.12 9/15/2027 11.74
7/15/2016 15.12 4/15/2020 14.65 1/15/2024 14.64 10/15/2027 12.07
8/15/2016 14.64 5/15/2020 15.14 2/15/2024 14.63 11/15/2027 11.64
9/15/2016 14.64 6/15/2020 14.65 3/15/2024 15.64 12/15/2027 12.10
10/15/2016 15.13 7/15/2020 15.14 4/15/2024 14.63 1/15/2028 11.82
11/15/2016 14.64 8/15/2020 14.65 5/15/2024 15.12 2/15/2028 12.01
12/15/2016 15.13 9/15/2020 14.65 6/15/2024 14.63 3/15/2028 13.26
1/15/2017 14.64 10/15/2020 15.14 7/15/2024 15.11 4/15/2028 13.70
2/15/2017 14.64 11/15/2020 14.65 8/15/2024 14.62 5/15/2028 14.17
3/15/2017 16.21 12/15/2020 15.14 9/15/2024 14.62 6/15/2028 13.76
4/15/2017 14.64 1/15/2021 14.65 10/15/2024 15.11
5/15/2017 15.13 2/15/2021 14.65 11/15/2024 14.62
6/15/2017 14.64 3/15/2021 16.22 12/15/2024 15.10
7/15/2017 15.13 4/15/2021 14.65 1/15/2025 14.61
8/15/2017 14.64 5/15/2021 15.14 2/15/2025 14.61
9/15/2017 14.64 6/15/2021 14.65 3/15/2025 16.17
10/15/2017 15.13 7/15/2021 15.14 4/15/2025 14.60
11/15/2017 14.64 8/15/2021 14.65 5/15/2025 15.08
12/15/2017 15.13 9/15/2021 14.65 6/15/2025 14.59
1/15/2018 14.65 10/15/2021 15.14 7/15/2025 15.07
2/15/2018 14.65 11/15/2021 14.65 8/15/2025 14.58
3/15/2018 16.22 12/15/2021 15.14 9/15/2025 14.57
4/15/2018 14.65 1/15/2022 14.65 10/15/2025 15.05
5/15/2018 15.14 2/15/2022 14.65 11/15/2025 14.55
6/15/2018 14.65 3/15/2022 16.22 12/15/2025 15.03
7/15/2018 15.14 4/15/2022 14.65 1/15/2026 14.53
8/15/2018 14.65 5/15/2022 15.14 2/15/2026 14.52
9/15/2018 14.65 6/15/2022 14.65 3/15/2026 16.06
10/15/2018 15.14 7/15/2022 15.14 4/15/2026 14.48
11/15/2018 14.65 8/15/2022 14.65 5/15/2026 14.94
12/15/2018 15.14 9/15/2022 14.65 6/15/2026 14.43
1/15/2019 14.65 10/15/2022 15.14 7/15/2026 14.88
2/15/2019 14.65 11/15/2022 14.65 8/15/2026 14.35
3/15/2019 16.22 12/15/2022 15.13 9/15/2026 14.28
4/15/2019 14.65 1/15/2023 14.65 10/15/2026 14.65
5/15/2019 15.14 2/15/2023 14.64 11/15/2026 14.01
6/15/2019 14.65 3/15/2023 16.21 12/15/2026 14.13
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
UCFC 1998-BA COLLATERAL DETAIL
------------------------------
Adjustable Rate Loans
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Adjustment Type Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ARM 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Product Type (1) Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ARM - 3 Year/6 Month 6,982 564,586,415.23 81.10
-------------------------------------------------------------------------------
ARM - 6 Month 1,180 108,923,842.36 15.65
-------------------------------------------------------------------------------
ARM - 6 Month/1 Year 159 14,262,063.49 2.05
-------------------------------------------------------------------------------
ARM - 3 Year/1 Year 66 5,297,578.05 0.76
-------------------------------------------------------------------------------
ARM - 2 Year/6 Month 28 3,122,649.47 0.45
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
</TABLE>
(1) Calculated based on Monthly Terms.
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Mortgage Rates (%) Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5.51 - 5.75 1 96,918.70 0.01
-------------------------------------------------------------------------------
5.76 - 6.00 1 239,509.40 0.03
-------------------------------------------------------------------------------
6.01 - 6.25 5 883,746.92 0.13
-------------------------------------------------------------------------------
6.26 - 6.50 3 296,745.88 0.04
-------------------------------------------------------------------------------
6.51 - 6.75 6 929,422.93 0.13
-------------------------------------------------------------------------------
6.76 - 7.00 6 974,306.94 0.14
-------------------------------------------------------------------------------
7.01 - 7.25 20 2,998,080.30 0.43
-------------------------------------------------------------------------------
7.26 - 7.50 34 5,497,605.96 0.79
-------------------------------------------------------------------------------
7.51 - 7.75 29 4,645,987.13 0.67
-------------------------------------------------------------------------------
7.76 - 8.00 102 14,131,860.38 2.03
-------------------------------------------------------------------------------
8.01 - 8.25 95 12,464,134.92 1.79
-------------------------------------------------------------------------------
8.26 - 8.50 250 32,600,196.55 4.68
-------------------------------------------------------------------------------
8.51 - 8.75 216 27,147,007.38 3.90
-------------------------------------------------------------------------------
8.76 - 9.00 454 51,497,819.19 7.40
-------------------------------------------------------------------------------
9.01 - 9.25 407 43,414,842.40 6.24
-------------------------------------------------------------------------------
9.26 - 9.50 746 64,834,844.34 9.31
-------------------------------------------------------------------------------
9.51 - 9.75 551 52,336,294.21 7.52
-------------------------------------------------------------------------------
9.76 - 10.00 1,130 91,584,022.69 13.15
-------------------------------------------------------------------------------
10.01 - 10.25 703 57,242,361.79 8.22
-------------------------------------------------------------------------------
10.26 - 10.50 463 38,292,341.48 5.50
-------------------------------------------------------------------------------
10.51 - 10.75 1,391 87,351,398.39 12.55
-------------------------------------------------------------------------------
10.76 - 11.00 704 47,412,921.24 6.81
-------------------------------------------------------------------------------
11.01 - 11.25 129 8,555,614.56 1.23
-------------------------------------------------------------------------------
11.26 - 11.50 85 4,790,471.10 0.69
-------------------------------------------------------------------------------
11.51 - 11.75 667 33,529,387.47 4.82
-------------------------------------------------------------------------------
11.76 - 12.00 164 8,878,874.63 1.28
-------------------------------------------------------------------------------
12.01 - 12.25 21 1,545,763.73 0.22
-------------------------------------------------------------------------------
12.26 - 12.50 13 793,155.03 0.11
-------------------------------------------------------------------------------
12.51 - 12.75 11 713,488.17 0.10
-------------------------------------------------------------------------------
13.01 greater than or = 8 513,424.79 0.07
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
% of
# Total Total
Original Mortgage Loan of Current Current
Principal Balance ($) Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 - 25,000 323 6,545,137.11 0.94
-------------------------------------------------------------------------------
25,001 - 50,000 2,180 83,646,412.24 12.01
-------------------------------------------------------------------------------
50,001 - 75,000 2,466 151,927,200.78 21.82
-------------------------------------------------------------------------------
75,001 - 100,000 1,347 115,315,418.66 16.56
-------------------------------------------------------------------------------
100,001 - 125,000 771 86,107,777.88 12.37
-------------------------------------------------------------------------------
125,001 - 150,000 472 64,432,807.94 9.26
-------------------------------------------------------------------------------
150,001 - 175,000 290 46,655,029.75 6.70
-------------------------------------------------------------------------------
175,001 - 200,000 187 35,024,783.69 5.03
-------------------------------------------------------------------------------
200,001 - 225,000 104 22,044,079.63 3.17
-------------------------------------------------------------------------------
225,001 - 250,000 72 17,121,005.42 2.46
-------------------------------------------------------------------------------
250,001 - 275,000 61 15,872,961.36 2.28
-------------------------------------------------------------------------------
275,001 - 300,000 46 13,362,087.62 1.92
-------------------------------------------------------------------------------
300,001 greater than or = 96 38,137,846.52 5.48
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
% of
# Total Total
Current Mortgage Loan of Current Current
Principal Balance ($) Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0.01 - 25,000.00 330 6,714,866.53 0.96
-------------------------------------------------------------------------------
25,000.01 - 50,000.00 2,184 83,991,469.35 12.06
-------------------------------------------------------------------------------
50,000.01 - 75,000.00 2,466 152,167,384.68 21.86
-------------------------------------------------------------------------------
75,000.01 - 100,000.00 1,342 115,134,265.43 16.54
-------------------------------------------------------------------------------
100,000.01 - 125,000.00 769 86,033,123.59 12.36
-------------------------------------------------------------------------------
125,000.01 - 150,000.00 471 64,372,254.81 9.25
-------------------------------------------------------------------------------
150,000.01 - 175,000.00 288 46,391,374.16 6.66
-------------------------------------------------------------------------------
175,000.01 - 200,000.00 188 35,248,419.70 5.06
-------------------------------------------------------------------------------
200,000.01 - 225,000.00 103 21,869,853.30 3.14
-------------------------------------------------------------------------------
225,000.01 - 250,000.00 72 17,146,616.88 2.46
-------------------------------------------------------------------------------
250,000.01 - 275,000.00 60 15,622,986.03 2.24
-------------------------------------------------------------------------------
275,000.01 - 300,000.00 47 13,661,971.43 1.96
-------------------------------------------------------------------------------
300,000.01 greater than or = 95 37,837,962.71 5.43
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
% of
Original # Total Total
Combined of Current Current
Loan-to-Value Ratio Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
5.01 - 10.00 1 14,861.50 0.00
-------------------------------------------------------------------------------
10.01 - 15.00 5 115,036.05 0.02
-------------------------------------------------------------------------------
15.01 - 20.00 11 361,659.37 0.05
-------------------------------------------------------------------------------
20.01 - 25.00 19 599,491.03 0.09
-------------------------------------------------------------------------------
25.01 - 30.00 19 1,007,625.38 0.14
-------------------------------------------------------------------------------
30.01 - 35.00 36 1,200,816.64 0.17
-------------------------------------------------------------------------------
35.01 - 40.00 48 1,911,310.28 0.27
-------------------------------------------------------------------------------
40.01 - 45.00 70 3,618,175.93 0.52
-------------------------------------------------------------------------------
45.01 - 50.00 105 7,091,394.62 1.02
-------------------------------------------------------------------------------
50.01 - 55.00 110 6,662,488.41 0.96
-------------------------------------------------------------------------------
55.01 - 60.00 163 9,301,133.36 1.34
-------------------------------------------------------------------------------
60.01 - 65.00 280 20,988,871.48 3.01
-------------------------------------------------------------------------------
65.01 - 70.00 377 30,656,308.10 4.40
-------------------------------------------------------------------------------
70.01 - 75.00 611 57,378,456.36 8.24
-------------------------------------------------------------------------------
75.01 - 80.00 1,659 162,127,761.87 23.29
-------------------------------------------------------------------------------
80.01 - 85.00 1,102 96,600,780.80 13.88
-------------------------------------------------------------------------------
85.01 - 90.00 1,936 165,593,342.64 23.79
-------------------------------------------------------------------------------
90.01 - 95.00 1,187 87,731,038.23 12.60
-------------------------------------------------------------------------------
95.01 - 100.00 676 43,231,996.55 6.21
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Margin (%) Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0.01 - 4.00 1,043 86,535,413.40 12.43
-------------------------------------------------------------------------------
4.01 - 4.25 248 18,220,974.54 2.62
-------------------------------------------------------------------------------
4.26 - 4.50 1,134 84,178,968.59 12.09
-------------------------------------------------------------------------------
4.51 - 4.75 159 15,510,877.38 2.23
-------------------------------------------------------------------------------
4.76 - 5.00 687 77,163,762.49 11.08
-------------------------------------------------------------------------------
5.01 - 5.25 2,070 150,409,497.70 21.60
-------------------------------------------------------------------------------
5.26 - 5.50 239 21,774,965.26 3.13
-------------------------------------------------------------------------------
5.51 - 5.75 480 47,299,513.67 6.79
-------------------------------------------------------------------------------
5.76 - 6.00 1,314 83,064,825.23 11.93
-------------------------------------------------------------------------------
6.01 - 6.25 221 21,029,703.62 3.02
-------------------------------------------------------------------------------
6.26 - 6.50 197 21,504,119.21 3.09
-------------------------------------------------------------------------------
6.51 - 6.75 165 16,729,784.49 2.40
-------------------------------------------------------------------------------
6.76 - 7.00 170 19,391,709.94 2.79
-------------------------------------------------------------------------------
7.01 greater than or = 288 33,378,433.08 4.79
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Maximum Mortgage Rates (%) Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0.01 - 14.00 241 32,959,485.39 4.73
-------------------------------------------------------------------------------
14.01 - 14.25 89 12,055,994.07 1.73
-------------------------------------------------------------------------------
14.26 - 14.50 229 29,919,053.83 4.30
-------------------------------------------------------------------------------
14.51 - 14.75 189 24,661,671.12 3.54
-------------------------------------------------------------------------------
14.76 - 15.00 451 51,062,502.76 7.33
-------------------------------------------------------------------------------
15.01 - 15.25 380 40,381,561.33 5.80
-------------------------------------------------------------------------------
15.26 - 15.50 742 65,486,567.02 9.41
-------------------------------------------------------------------------------
15.51 - 15.75 549 52,186,757.56 7.50
-------------------------------------------------------------------------------
15.76 - 16.00 1,122 91,076,781.55 13.08
-------------------------------------------------------------------------------
16.01 - 16.25 715 58,429,823.27 8.39
-------------------------------------------------------------------------------
16.26 - 16.50 472 39,455,674.75 5.67
-------------------------------------------------------------------------------
16.51 - 16.75 1,401 88,486,168.82 12.71
-------------------------------------------------------------------------------
16.76 - 17.00 705 47,126,766.02 6.77
-------------------------------------------------------------------------------
17.01 - 17.25 136 9,339,988.18 1.34
-------------------------------------------------------------------------------
17.26 - 17.50 87 4,977,429.24 0.71
-------------------------------------------------------------------------------
17.51 - 17.75 666 33,532,947.31 4.82
-------------------------------------------------------------------------------
17.76 - 18.00 177 10,458,156.37 1.50
-------------------------------------------------------------------------------
18.01 greater than or = 64 4,595,220.01 0.66
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Minimum Mortgage Rates (%) Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0.01 - 6.00 118 16,422,711.45 2.36
-------------------------------------------------------------------------------
6.01 - 6.25 42 6,515,588.60 0.94
-------------------------------------------------------------------------------
6.26 - 6.50 84 13,723,745.33 1.97
-------------------------------------------------------------------------------
6.51 - 6.75 111 14,928,267.54 2.14
-------------------------------------------------------------------------------
6.76 - 7.00 178 23,369,549.79 3.36
-------------------------------------------------------------------------------
7.01 - 7.25 169 20,229,461.00 2.91
-------------------------------------------------------------------------------
7.26 - 7.50 337 37,347,833.51 5.36
-------------------------------------------------------------------------------
7.51 - 7.75 236 27,920,744.40 4.01
-------------------------------------------------------------------------------
7.76 - 8.00 570 57,518,452.00 8.26
-------------------------------------------------------------------------------
8.01 - 8.25 356 36,197,193.72 5.20
-------------------------------------------------------------------------------
8.26 - 8.50 746 63,314,956.87 9.09
-------------------------------------------------------------------------------
8.51 - 8.75 502 45,651,876.58 6.56
-------------------------------------------------------------------------------
8.76 - 9.00 963 75,564,784.80 10.85
-------------------------------------------------------------------------------
9.01 - 9.25 556 44,908,527.55 6.45
-------------------------------------------------------------------------------
9.26 - 9.50 292 22,978,121.27 3.30
-------------------------------------------------------------------------------
9.51 - 9.75 1,211 73,763,794.04 10.60
-------------------------------------------------------------------------------
9.76 - 10.00 409 27,767,475.30 3.99
-------------------------------------------------------------------------------
10.01 greater than or = 1,535 88,069,464.85 12.65
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
<CAPTION>
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Next Rate Adjustment Date Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 354 32,071,877.06 4.61
-------------------------------------------------------------------------------
1999 912 81,894,856.42 11.76
-------------------------------------------------------------------------------
2000 69 7,836,773.23 1.13
-------------------------------------------------------------------------------
2001 7,080 574,389,041.89 82.50
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Months to Next Rate Adjustment Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 9 1,397,866.10 0.20
-------------------------------------------------------------------------------
2 10 1,005,833.95 0.14
-------------------------------------------------------------------------------
3 335 29,668,177.01 4.26
-------------------------------------------------------------------------------
4 411 43,475,583.45 6.24
-------------------------------------------------------------------------------
5 170 11,715,495.83 1.68
-------------------------------------------------------------------------------
6 - 11 302 24,764,600.01 3.56
-------------------------------------------------------------------------------
12 - 23 86 8,403,819.22 1.21
-------------------------------------------------------------------------------
24 - 35 4,252 354,822,503.89 50.97
-------------------------------------------------------------------------------
36 - 47 2,840 220,938,669.14 31.74
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Index Type Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Libor - 6 Month 8,198 677,398,440.22 97.30
-------------------------------------------------------------------------------
Treasury - 1 Year 217 18,794,108.38 2.70
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Balloon Loans Balance Balance
-------------------------------------------------------------------------------
Non-Balloon 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Original Term Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
60 - 119 6 170,558.97 0.02
-------------------------------------------------------------------------------
120 - 179 26 665,947.48 0.10
-------------------------------------------------------------------------------
180 - 239 903 41,581,430.78 5.97
-------------------------------------------------------------------------------
240 - 299 691 37,277,449.74 5.35
-------------------------------------------------------------------------------
300 - 359 13 725,529.18 0.10
-------------------------------------------------------------------------------
360 greater than or = 6,776 615,771,632.45 88.45
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Seasoning Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
= or less than 0 1,569 120,888,229.63 17.36
-------------------------------------------------------------------------------
1 - 12 6,750 565,411,451.92 81.21
-------------------------------------------------------------------------------
13 - 24 27 3,301,075.09 0.47
-------------------------------------------------------------------------------
25 - 36 44 4,872,377.12 0.70
-------------------------------------------------------------------------------
37 - 48 11 972,195.83 0.14
-------------------------------------------------------------------------------
49 - 60 2 101,523.53 0.01
-------------------------------------------------------------------------------
61 - 72 3 146,330.54 0.02
-------------------------------------------------------------------------------
85 - 96 1 63,489.72 0.01
-------------------------------------------------------------------------------
97 - 108 1 73,468.25 0.01
-------------------------------------------------------------------------------
133 - 144 1 62,201.98 0.01
-------------------------------------------------------------------------------
145 - 156 2 111,260.82 0.02
-------------------------------------------------------------------------------
157 - 168 2 46,510.72 0.01
-------------------------------------------------------------------------------
181 - 192 1 29,589.33 0.00
-------------------------------------------------------------------------------
253 - 264 1 112,844.12 0.02
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
% of
# Total Total
Remaining Term of Current Current
to Maturity Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
49 - 60 4 100,278.56 0.01
-------------------------------------------------------------------------------
61 - 72 1 34,334.65 0.00
-------------------------------------------------------------------------------
85 - 96 1 35,945.76 0.01
-------------------------------------------------------------------------------
97 - 108 1 112,844.12 0.02
-------------------------------------------------------------------------------
109 - 120 25 636,347.48 0.09
-------------------------------------------------------------------------------
133 - 144 2 114,765.22 0.02
-------------------------------------------------------------------------------
145 - 156 2 56,097.57 0.01
-------------------------------------------------------------------------------
169 - 180 899 41,394,848.65 5.95
-------------------------------------------------------------------------------
193 - 204 3 74,302.84 0.01
-------------------------------------------------------------------------------
205 - 216 3 158,377.37 0.02
-------------------------------------------------------------------------------
217 - 228 1 62,201.98 0.01
-------------------------------------------------------------------------------
229 - 240 691 37,277,449.74 5.35
-------------------------------------------------------------------------------
253 - 264 2 136,957.97 0.02
-------------------------------------------------------------------------------
289 - 300 15 808,370.00 0.12
-------------------------------------------------------------------------------
301 - 312 3 129,436.43 0.02
-------------------------------------------------------------------------------
313 - 324 11 1,237,930.87 0.18
-------------------------------------------------------------------------------
325 - 336 41 4,511,372.39 0.65
-------------------------------------------------------------------------------
337 - 348 29 3,662,412.92 0.53
-------------------------------------------------------------------------------
349 - 360 6,681 605,648,274.08 86.99
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Year of Origination Loans Balance Balance
-------------------------------------------------------------------------------
1984 1 24,177.42 0.00
-------------------------------------------------------------------------------
1985 2 50,125.42 0.01
-------------------------------------------------------------------------------
1986 2 145,670.68 0.02
-------------------------------------------------------------------------------
1991 1 63,489.72 0.01
-------------------------------------------------------------------------------
1992 1 71,759.42 0.01
-------------------------------------------------------------------------------
1993 4 139,884.83 0.02
-------------------------------------------------------------------------------
1994 5 347,680.33 0.05
-------------------------------------------------------------------------------
1995 22 2,708,022.36 0.39
-------------------------------------------------------------------------------
1996 50 5,659,528.79 0.81
-------------------------------------------------------------------------------
1997 41 3,751,545.97 0.54
-------------------------------------------------------------------------------
1998 8,286 683,230,663.66 98.14
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
% of
# Total Total
Maturity of Current Current
Date Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2003 4 100,278.56 0.01
-------------------------------------------------------------------------------
2004 1 34,334.65 0.00
-------------------------------------------------------------------------------
2006 2 148,789.88 0.02
-------------------------------------------------------------------------------
2008 25 636,347.48 0.09
-------------------------------------------------------------------------------
2010 2 114,765.22 0.02
-------------------------------------------------------------------------------
2011 2 56,097.57 0.01
-------------------------------------------------------------------------------
2013 899 41,394,848.65 5.95
-------------------------------------------------------------------------------
2014 1 24,177.42 0.00
-------------------------------------------------------------------------------
2015 2 50,125.42 0.01
-------------------------------------------------------------------------------
2016 4 220,579.35 0.03
-------------------------------------------------------------------------------
2017 1 32,128.42 0.00
-------------------------------------------------------------------------------
2018 690 37,245,321.32 5.35
-------------------------------------------------------------------------------
2020 2 136,957.97 0.02
-------------------------------------------------------------------------------
2022 1 71,759.42 0.01
-------------------------------------------------------------------------------
2023 14 736,610.58 0.11
-------------------------------------------------------------------------------
2024 4 177,097.83 0.03
-------------------------------------------------------------------------------
2025 21 2,572,016.47 0.37
-------------------------------------------------------------------------------
2026 37 4,192,754.82 0.60
-------------------------------------------------------------------------------
2027 38 3,804,133.18 0.55
-------------------------------------------------------------------------------
2028 6,665 604,443,424.39 86.82
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
% of
Geographic # Total Total
Distribution of Current Current
by Balance Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C>
California 614 98,466,393.35 14.14
-------------------------------------------------------------------------------
Ohio 824 53,384,223.51 7.67
-------------------------------------------------------------------------------
Michigan 595 37,876,915.24 5.44
-------------------------------------------------------------------------------
North Carolina 451 37,012,157.96 5.32
-------------------------------------------------------------------------------
Tennessee 432 33,133,578.26 4.76
-------------------------------------------------------------------------------
Florida 354 33,131,347.28 4.76
-------------------------------------------------------------------------------
Indiana 492 27,221,768.01 3.91
-------------------------------------------------------------------------------
New York 284 26,720,539.89 3.84
-------------------------------------------------------------------------------
Georgia 223 24,028,386.29 3.45
-------------------------------------------------------------------------------
Louisiana 325 21,957,759.45 3.15
-------------------------------------------------------------------------------
Pennsylvania 277 21,225,845.12 3.05
-------------------------------------------------------------------------------
Mississippi 314 20,849,127.82 2.99
-------------------------------------------------------------------------------
New Jersey 123 17,257,825.16 2.48
-------------------------------------------------------------------------------
Virginia 152 13,472,125.26 1.94
-------------------------------------------------------------------------------
Illinois 227 13,087,111.20 1.88
-------------------------------------------------------------------------------
Colorado 123 13,064,647.04 1.88
-------------------------------------------------------------------------------
Kentucky 211 12,853,760.81 1.85
-------------------------------------------------------------------------------
Washington 107 12,402,595.79 1.78
-------------------------------------------------------------------------------
South Carolina 159 12,253,308.64 1.76
-------------------------------------------------------------------------------
New Hampshire 131 11,116,893.50 1.60
-------------------------------------------------------------------------------
Maine 142 11,007,403.01 1.58
-------------------------------------------------------------------------------
Texas 147 10,510,005.15 1.51
-------------------------------------------------------------------------------
Massachusetts 94 10,504,779.96 1.51
-------------------------------------------------------------------------------
Utah 90 9,334,470.63 1.34
-------------------------------------------------------------------------------
Connecticut 84 9,331,681.46 1.34
-------------------------------------------------------------------------------
Oklahoma 172 9,209,419.55 1.32
-------------------------------------------------------------------------------
Wisconsin 134 8,826,492.67 1.27
-------------------------------------------------------------------------------
Iowa 151 8,711,549.00 1.25
-------------------------------------------------------------------------------
Maryland 73 8,517,075.26 1.22
-------------------------------------------------------------------------------
Oregon 71 8,159,760.94 1.17
-------------------------------------------------------------------------------
Missouri 119 7,936,496.08 1.14
-------------------------------------------------------------------------------
Arkansas 117 6,764,862.60 0.97
-------------------------------------------------------------------------------
Kansas 119 6,470,193.13 0.93
-------------------------------------------------------------------------------
Arizona 59 6,456,166.59 0.93
-------------------------------------------------------------------------------
New Mexico 74 6,433,858.22 0.92
-------------------------------------------------------------------------------
Alabama 60 5,454,273.03 0.78
-------------------------------------------------------------------------------
Minnesota 76 5,227,840.75 0.75
-------------------------------------------------------------------------------
West Virginia 69 4,119,272.28 0.59
-------------------------------------------------------------------------------
Nebraska 56 2,915,635.10 0.42
-------------------------------------------------------------------------------
District of Columbia 18 2,269,293.08 0.33
-------------------------------------------------------------------------------
Nevada 17 1,815,600.43 0.26
-------------------------------------------------------------------------------
Idaho 21 1,660,634.46 0.24
-------------------------------------------------------------------------------
Rhode Island 12 1,614,612.43 0.23
-------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Vermont 6 657,582.99 0.09
-------------------------------------------------------------------------------
Delaware 5 593,197.51 0.09
-------------------------------------------------------------------------------
Wyoming 6 430,595.12 0.06
-------------------------------------------------------------------------------
North Dakota 2 310,930.71 0.04
-------------------------------------------------------------------------------
Montana 2 232,834.79 0.03
-------------------------------------------------------------------------------
Hawaii 1 199,722.09 0.03
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Property Type Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Single Family Residence 7,734 630,521,913.38 90.57
-------------------------------------------------------------------------------
2 Family 233 22,476,308.73 3.23
-------------------------------------------------------------------------------
Condo 225 19,232,921.24 2.76
-------------------------------------------------------------------------------
PUD 90 13,136,793.25 1.89
-------------------------------------------------------------------------------
Townhouse 29 2,807,357.07 0.40
-------------------------------------------------------------------------------
Rowhouse 30 2,271,045.20 0.33
-------------------------------------------------------------------------------
4 Family 25 2,092,958.13 0.30
-------------------------------------------------------------------------------
3 Family 20 1,780,968.97 0.26
-------------------------------------------------------------------------------
Manufactured Housing 19 1,151,015.92 0.17
-------------------------------------------------------------------------------
Modular Housing 10 721,266.71 0.10
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
% of
# Total Total
of Current Current
Occupancy Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Primary 8,196 680,384,206.13 97.73
-------------------------------------------------------------------------------
Investment 190 13,351,629.50 1.92
-------------------------------------------------------------------------------
Second Home 29 2,456,712.97 0.35
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
% of
# Total Total
Lien of Current Current
Position Loans Balance Balance
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1st Lien 8,413 696,137,004.42 99.99
-------------------------------------------------------------------------------
2nd Lien 2 55,544.18 0.01
-------------------------------------------------------------------------------
Total: 8,415 696,192,548.60 100.00
-------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
UCFC 1998-BA COLLATERAL DETAIL
Fixed Rate Loans
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
-------------------------------------------------------------------
% of
# Total Total
of Current Current
Adjustment Type Loans Balance Balance
-------------------------------------------------------------------
Fixed Rate 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- -------------------------------------------------------------------------------
-------------------------------------------------------------------
% of
# Total Total
of Current Current
Product Type (1) Loans Balance Balance
-------------------------------------------------------------------
Fixed Rate 1,499 70,015,927.39 97.70
-------------------------------------------------------------------
Balloon - 15/30 18 1,610,345.21 2.25
-------------------------------------------------------------------
Balloon - 10/30 1 41,588.75 0.06
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
(1) Calculated based on Monthly Terms.
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
-------------------------------------------------------------------
% of
# Total Total
of Current Current
Mortgage Rates (%) Loans Balance Balance
-------------------------------------------------------------------
8.26 - 8.50 4 624,440.23 0.87
-------------------------------------------------------------------
8.51 - 8.75 5 768,282.39 1.07
-------------------------------------------------------------------
8.76 - 9.00 29 1,540,891.85 2.15
-------------------------------------------------------------------
9.01 - 9.25 14 1,268,111.78 1.77
-------------------------------------------------------------------
9.26 - 9.50 39 2,479,043.17 3.46
-------------------------------------------------------------------
9.51 - 9.75 44 3,149,746.59 4.39
-------------------------------------------------------------------
9.76 - 10.00 84 5,359,267.49 7.48
-------------------------------------------------------------------
10.01 - 10.25 83 4,796,588.68 6.69
-------------------------------------------------------------------
10.26 - 10.50 108 5,408,255.02 7.55
-------------------------------------------------------------------
10.51 - 10.75 111 5,611,818.60 7.83
-------------------------------------------------------------------
10.76 - 11.00 121 6,693,859.12 9.34
-------------------------------------------------------------------
11.01 - 11.25 179 7,585,067.86 10.58
-------------------------------------------------------------------
11.26 - 11.50 139 5,092,269.97 7.11
-------------------------------------------------------------------
11.51 - 11.75 100 4,560,018.97 6.36
-------------------------------------------------------------------
11.76 - 12.00 54 2,414,676.47 3.37
-------------------------------------------------------------------
12.01 - 12.25 132 4,286,950.43 5.98
-------------------------------------------------------------------
12.26 - 12.50 113 4,212,965.95 5.88
-------------------------------------------------------------------
12.51 - 12.75 26 944,129.47 1.32
-------------------------------------------------------------------
12.76 - 13.00 56 2,658,755.13 3.71
-------------------------------------------------------------------
13.01 greater than or = 77 2,212,722.18 3.09
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- -------------------------------------------------------------------------------
-------------------------------------------------------------------
% of
# Total Total
Original Mortgage Loan of Current Current
Principal Balance ($) Loans Balance Balance
-------------------------------------------------------------------
1 - 25,000 364 6,581,485.42 9.18
-------------------------------------------------------------------
25,001 - 50,000 653 23,732,069.98 33.11
-------------------------------------------------------------------
50,001 - 75,000 305 18,492,963.03 25.80
-------------------------------------------------------------------
75,001 - 100,000 92 7,943,824.72 11.08
-------------------------------------------------------------------
100,001 - 125,000 56 6,233,658.33 8.70
-------------------------------------------------------------------
125,001 - 150,000 20 2,770,538.71 3.87
-------------------------------------------------------------------
150,001 - 175,000 10 1,646,031.97 2.30
-------------------------------------------------------------------
175,001 - 200,000 7 1,318,711.83 1.84
-------------------------------------------------------------------
200,001 - 225,000 1 211,731.24 0.30
-------------------------------------------------------------------
225,001 - 250,000 4 955,599.92 1.33
-------------------------------------------------------------------
250,001 - 275,000 2 544,149.21 0.76
-------------------------------------------------------------------
275,001 - 300,000 2 571,506.52 0.80
-------------------------------------------------------------------
300,001 greater than or = 2 665,590.47 0.93
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
-------------------------------------------------------------------
% of
# Total Total
Current Mortgage Loan of Current Current
Principal Balance ($) Loans Balance Balance
-------------------------------------------------------------------
0.01 - 25,000.00 367 6,644,987.77 9.27
-------------------------------------------------------------------
25,000.01 - 50,000.00 653 23,798,209.50 33.21
-------------------------------------------------------------------
50,000.01 - 75,000.00 302 18,363,321.16 25.62
-------------------------------------------------------------------
75,000.01 - 100,000.00 92 7,943,824.72 11.08
-------------------------------------------------------------------
100,000.01 - 125,000.00 56 6,233,658.33 8.70
-------------------------------------------------------------------
125,000.01 - 150,000.00 20 2,770,538.71 3.87
-------------------------------------------------------------------
150,000.01 - 175,000.00 10 1,646,031.97 2.30
-------------------------------------------------------------------
175,000.01 - 200,000.00 7 1,318,711.83 1.84
-------------------------------------------------------------------
200,000.01 - 225,000.00 1 211,731.24 0.30
-------------------------------------------------------------------
225,000.01 - 250,000.00 4 955,599.92 1.33
-------------------------------------------------------------------
250,000.01 - 275,000.00 2 544,149.21 0.76
-------------------------------------------------------------------
275,000.01 - 300,000.00 2 571,506.52 0.80
-------------------------------------------------------------------
300,000.01 greater than or = 2 665,590.47 0.93
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
-------------------------------------------------------------------
% of
Original # Total Total
Combined of Current Current
Loan-to-Value Ratio Loans Balance Balance
-------------------------------------------------------------------
5.01 - 10.00 1 8,975.07 0.01
-------------------------------------------------------------------
10.01 - 15.00 4 52,622.75 0.07
-------------------------------------------------------------------
15.01 - 20.00 4 82,926.72 0.12
-------------------------------------------------------------------
20.01 - 25.00 10 271,256.64 0.38
-------------------------------------------------------------------
25.01 - 30.00 6 221,245.67 0.31
-------------------------------------------------------------------
30.01 - 35.00 10 283,073.59 0.39
-------------------------------------------------------------------
35.01 - 40.00 18 375,233.79 0.52
-------------------------------------------------------------------
40.01 - 45.00 36 1,253,937.59 1.75
-------------------------------------------------------------------
45.01 - 50.00 27 778,322.05 1.09
-------------------------------------------------------------------
50.01 - 55.00 44 1,411,988.87 1.97
-------------------------------------------------------------------
55.01 - 60.00 42 1,298,165.68 1.81
-------------------------------------------------------------------
60.01 - 65.00 69 2,403,468.32 3.35
-------------------------------------------------------------------
65.01 - 70.00 108 4,327,986.71 6.04
-------------------------------------------------------------------
70.01 - 75.00 161 6,710,127.20 9.36
-------------------------------------------------------------------
75.01 - 80.00 267 14,686,576.93 20.49
-------------------------------------------------------------------
80.01 - 85.00 234 11,109,449.13 15.50
-------------------------------------------------------------------
85.01 - 90.00 201 11,014,029.15 15.37
-------------------------------------------------------------------
90.01 - 95.00 136 7,729,273.01 10.78
-------------------------------------------------------------------
95.01 - 100.00 140 7,649,202.48 10.67
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
-------------------------------------------------------------------
% of
# Total Total
of Current Current
Balloon Loans Balance Balance
-------------------------------------------------------------------
Non-Balloon 1,499 70,015,927.39 97.70
-------------------------------------------------------------------
Balloon 19 1,651,933.96 2.30
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- -------------------------------------------------------------------------------
-------------------------------------------------------------------
% of
# Total Total
of Current Current
Original Term Loans Balance Balance
-------------------------------------------------------------------
60 - 119 50 919,563.45 1.28
-------------------------------------------------------------------
120 - 179 238 6,045,234.38 8.44
-------------------------------------------------------------------
180 - 239 616 25,417,144.92 35.47
-------------------------------------------------------------------
240 - 299 165 7,546,683.60 10.53
-------------------------------------------------------------------
300 - 359 21 1,127,566.50 1.57
-------------------------------------------------------------------
360 greater than or = 428 30,611,668.50 42.71
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- -------------------------------------------------------------------------------
-------------------------------------------------------------------
% of
# Total Total
of Current Current
Seasoning Loans Balance Balance
-------------------------------------------------------------------
= or less than 0 1 34,400.00 0.05
-------------------------------------------------------------------
1 - 12 1,496 70,587,200.28 98.49
-------------------------------------------------------------------
13 - 24 12 580,594.01 0.81
-------------------------------------------------------------------
25 - 36 1 52,797.03 0.07
-------------------------------------------------------------------
37 - 48 2 242,265.08 0.34
-------------------------------------------------------------------
85 - 96 2 40,517.95 0.06
-------------------------------------------------------------------
97 - 108 1 32,111.83 0.04
-------------------------------------------------------------------
121 - 132 2 41,726.07 0.06
-------------------------------------------------------------------
241 - 252 1 56,249.10 0.08
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
-------------------------------------------------------------------
% of
# Total Total
Remaining Term of Current Current
to Maturity Loans Balance Balance
-------------------------------------------------------------------
49 - 60 32 479,987.11 0.67
-------------------------------------------------------------------
61 - 72 3 53,273.83 0.07
-------------------------------------------------------------------
73 - 84 10 236,038.38 0.33
-------------------------------------------------------------------
85 - 96 8 214,376.33 0.30
-------------------------------------------------------------------
97 - 108 2 75,650.61 0.11
-------------------------------------------------------------------
109 - 120 167 3,938,492.32 5.50
-------------------------------------------------------------------
121 - 132 1 28,419.99 0.04
-------------------------------------------------------------------
133 - 144 64 1,857,848.00 2.59
-------------------------------------------------------------------
145 - 156 3 120,390.88 0.17
-------------------------------------------------------------------
157 - 168 7 274,256.17 0.38
-------------------------------------------------------------------
169 - 180 604 24,906,947.76 34.75
-------------------------------------------------------------------
193 - 204 4 140,839.16 0.20
-------------------------------------------------------------------
205 - 216 1 160,608.31 0.22
-------------------------------------------------------------------
229 - 240 164 7,493,932.87 10.46
-------------------------------------------------------------------
265 - 276 1 34,655.87 0.05
-------------------------------------------------------------------
289 - 300 20 1,071,317.40 1.49
-------------------------------------------------------------------
313 - 324 1 193,328.08 0.27
-------------------------------------------------------------------
325 - 336 1 52,797.03 0.07
-------------------------------------------------------------------
337 - 348 9 600,965.98 0.84
-------------------------------------------------------------------
349 - 360 416 29,733,735.27 41.49
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- -------------------------------------------------------------------------------
-------------------------------------------------------------------
% of
# Total Total
of Current Current
Year of Origination Loans Balance Balance
-------------------------------------------------------------------
1987 1 10,883.93 0.02
-------------------------------------------------------------------
1988 1 30,842.14 0.04
-------------------------------------------------------------------
1990 3 72,629.78 0.10
-------------------------------------------------------------------
1994 1 193,328.08 0.27
-------------------------------------------------------------------
1995 2 101,734.03 0.14
-------------------------------------------------------------------
1996 4 222,939.55 0.31
-------------------------------------------------------------------
1997 22 1,452,561.58 2.03
-------------------------------------------------------------------
1998 1,484 69,582,942.26 97.09
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
-------------------------------------------------------------------
% of
# Total Total
Maturity of Current Current
Date Loans Balance Balance
-------------------------------------------------------------------
2002 1 10,723.18 0.01
-------------------------------------------------------------------
2003 31 469,263.93 0.65
-------------------------------------------------------------------
2004 3 53,273.83 0.07
-------------------------------------------------------------------
2005 11 256,145.66 0.36
-------------------------------------------------------------------
2006 7 194,269.05 0.27
-------------------------------------------------------------------
2007 2 75,650.61 0.11
-------------------------------------------------------------------
2008 167 3,938,492.32 5.50
-------------------------------------------------------------------
2009 1 28,419.99 0.04
-------------------------------------------------------------------
2010 64 1,857,848.00 2.59
-------------------------------------------------------------------
2011 3 120,390.88 0.17
-------------------------------------------------------------------
2012 9 414,525.24 0.58
-------------------------------------------------------------------
2013 602 24,766,678.69 34.56
-------------------------------------------------------------------
2015 4 140,839.16 0.20
-------------------------------------------------------------------
2016 1 160,608.31 0.22
-------------------------------------------------------------------
2018 164 7,493,932.87 10.46
-------------------------------------------------------------------
2021 1 34,655.87 0.05
-------------------------------------------------------------------
2022 1 38,706.58 0.05
-------------------------------------------------------------------
2023 19 1,032,610.82 1.44
-------------------------------------------------------------------
2025 1 193,328.08 0.27
-------------------------------------------------------------------
2026 2 108,471.25 0.15
-------------------------------------------------------------------
2027 12 852,795.10 1.19
-------------------------------------------------------------------
2028 412 29,426,231.93 41.06
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
-------------------------------------------------------------------
% of
Geographic # Total Total
Distribution of Current Current
by Balance Loans Balance Balance
-------------------------------------------------------------------
Louisiana 209 8,652,456.07 12.07
-------------------------------------------------------------------
Florida 109 5,385,434.24 7.51
-------------------------------------------------------------------
North Carolina 95 5,057,510.24 7.06
-------------------------------------------------------------------
California 53 3,843,801.26 5.36
-------------------------------------------------------------------
Tennessee 71 3,681,054.41 5.14
-------------------------------------------------------------------
Mississippi 93 3,662,251.92 5.11
-------------------------------------------------------------------
New York 63 3,395,015.09 4.74
-------------------------------------------------------------------
Georgia 64 3,362,167.21 4.69
-------------------------------------------------------------------
Ohio 78 3,220,431.92 4.49
-------------------------------------------------------------------
Michigan 68 3,039,968.33 4.24
-------------------------------------------------------------------
Oklahoma 71 2,659,195.15 3.71
-------------------------------------------------------------------
Pennsylvania 51 2,363,857.90 3.30
-------------------------------------------------------------------
Texas 61 2,290,387.65 3.20
-------------------------------------------------------------------
Wisconsin 43 2,099,377.42 2.93
-------------------------------------------------------------------
South Carolina 50 1,991,694.38 2.78
-------------------------------------------------------------------
New Jersey 19 1,721,479.20 2.40
-------------------------------------------------------------------
Arkansas 37 1,536,111.53 2.14
-------------------------------------------------------------------
Kentucky 30 1,379,277.86 1.92
-------------------------------------------------------------------
Illinois 28 1,157,068.18 1.61
-------------------------------------------------------------------
Indiana 30 1,144,078.44 1.60
-------------------------------------------------------------------
Alabama 15 865,299.71 1.21
-------------------------------------------------------------------
Virginia 14 765,515.61 1.07
-------------------------------------------------------------------
Missouri 19 721,820.13 1.01
-------------------------------------------------------------------
Maine 16 700,152.18 0.98
-------------------------------------------------------------------
Iowa 16 631,918.67 0.88
-------------------------------------------------------------------
Minnesota 11 597,823.16 0.83
-------------------------------------------------------------------
Maryland 10 558,966.30 0.78
-------------------------------------------------------------------
West Virginia 14 548,363.73 0.77
-------------------------------------------------------------------
Arizona 9 540,540.08 0.75
-------------------------------------------------------------------
Colorado 8 506,042.09 0.71
-------------------------------------------------------------------
Massachusetts 9 471,600.47 0.66
-------------------------------------------------------------------
Connecticut 8 434,524.97 0.61
-------------------------------------------------------------------
Oregon 5 408,960.20 0.57
-------------------------------------------------------------------
Washington 6 352,153.02 0.49
-------------------------------------------------------------------
Delaware 4 345,518.93 0.48
-------------------------------------------------------------------
New Mexico 6 326,312.02 0.46
-------------------------------------------------------------------
Vermont 3 278,382.38 0.39
-------------------------------------------------------------------
Nebraska 8 248,457.77 0.35
-------------------------------------------------------------------
Utah 6 234,249.09 0.33
-------------------------------------------------------------------
New Hampshire 3 230,317.09 0.32
-------------------------------------------------------------------
Kansas 2 137,339.07 0.19
-------------------------------------------------------------------
Nevada 3 120,986.28 0.17
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
-------------------------------------------------------------------
% of
# Total Total
of Current Current
Property Type Loans Balance Balance
-------------------------------------------------------------------
Single Family Residence 1,195 58,080,715.84 81.04
-------------------------------------------------------------------
Manufactured Housing 220 7,944,192.97 11.08
-------------------------------------------------------------------
2 Family 51 2,728,263.05 3.81
-------------------------------------------------------------------
Condo 26 1,429,851.74 2.00
-------------------------------------------------------------------
4 Family 6 496,051.62 0.69
-------------------------------------------------------------------
Rowhouse 12 415,188.52 0.58
-------------------------------------------------------------------
3 Family 4 279,284.34 0.39
-------------------------------------------------------------------
PUD 1 145,448.44 0.20
-------------------------------------------------------------------
Modular Housing 2 91,920.44 0.13
-------------------------------------------------------------------
Townhouse 1 56,944.39 0.08
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- -------------------------------------------------------------------------------
-------------------------------------------------------------------
% of
# Total Total
of Current Current
Occupancy Loans Balance Balance
-------------------------------------------------------------------
Primary 1,406 66,565,775.73 92.88
-------------------------------------------------------------------
Investment 111 5,056,624.37 7.06
-------------------------------------------------------------------
Second Home 1 45,461.25 0.06
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- -------------------------------------------------------------------------------
-------------------------------------------------------------------
% of
# Total Total
Lien of Current Current
Position Loans Balance Balance
-------------------------------------------------------------------
1st Lien 1,334 67,326,827.92 93.94
-------------------------------------------------------------------
2nd Lien 184 4,341,033.43 6.06
-------------------------------------------------------------------
Total: 1,518 71,667,861.35 100.00
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
UCFC 1998-BA COLLATERAL DETAIL
All Loans
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
---------------------------------------------------------------------
% of
# Total Total
of Current Current
Adjustment Type Loans Balance Balance
---------------------------------------------------------------------
ARM 8,415 696,192,548.60 90.67
---------------------------------------------------------------------
Fixed Rate 1,518 71,667,861.35 9.33
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- -------------------------------------------------------------------------------
---------------------------------------------------------------------
% of
# Total Total
of Current Current
Product Type (1) Loans Balance Balance
---------------------------------------------------------------------
ARM - 3 Year/6 Month 6,982 564,586,415.23 73.53
---------------------------------------------------------------------
ARM - 6 Month 1,180 108,923,842.36 14.19
---------------------------------------------------------------------
Fixed Rate 1,499 70,015,927.39 9.12
---------------------------------------------------------------------
ARM - 6 Month/1 Year 159 14,262,063.49 1.86
---------------------------------------------------------------------
ARM - 3 Year/1 Year 66 5,297,578.05 0.69
---------------------------------------------------------------------
ARM - 2 Year/6 Month 28 3,122,649.47 0.41
---------------------------------------------------------------------
Balloon - 15/30 18 1,610,345.21 0.21
---------------------------------------------------------------------
Balloon - 10/30 1 41,588.75 0.01
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
(1) Calculated based on Monthly Terms.
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
---------------------------------------------------------------------
% of
# Total Total
of Current Current
Mortgage Rates (%) Loans Balance Balance
---------------------------------------------------------------------
5.51 - 5.75 1 96,918.70 0.01
---------------------------------------------------------------------
5.76 - 6.00 1 239,509.40 0.03
---------------------------------------------------------------------
6.01 - 6.25 5 883,746.92 0.12
---------------------------------------------------------------------
6.26 - 6.50 3 296,745.88 0.04
---------------------------------------------------------------------
6.51 - 6.75 6 929,422.93 0.12
---------------------------------------------------------------------
6.76 - 7.00 6 974,306.94 0.13
---------------------------------------------------------------------
7.01 - 7.25 20 2,998,080.30 0.39
---------------------------------------------------------------------
7.26 - 7.50 34 5,497,605.96 0.72
---------------------------------------------------------------------
7.51 - 7.75 29 4,645,987.13 0.61
---------------------------------------------------------------------
7.76 - 8.00 102 14,131,860.38 1.84
---------------------------------------------------------------------
8.01 - 8.25 95 12,464,134.92 1.62
---------------------------------------------------------------------
8.26 - 8.50 254 33,224,636.78 4.33
---------------------------------------------------------------------
8.51 - 8.75 221 27,915,289.77 3.64
---------------------------------------------------------------------
8.76 - 9.00 483 53,038,711.04 6.91
---------------------------------------------------------------------
9.01 - 9.25 421 44,682,954.18 5.82
---------------------------------------------------------------------
9.26 - 9.50 785 67,313,887.51 8.77
---------------------------------------------------------------------
9.51 - 9.75 595 55,486,040.80 7.23
---------------------------------------------------------------------
9.76 - 10.00 1,214 96,943,290.18 12.63
---------------------------------------------------------------------
10.01 - 10.25 786 62,038,950.47 8.08
---------------------------------------------------------------------
10.26 - 10.50 571 43,700,596.50 5.69
---------------------------------------------------------------------
10.51 - 10.75 1,502 92,963,216.99 12.11
---------------------------------------------------------------------
10.76 - 11.00 825 54,106,780.36 7.05
---------------------------------------------------------------------
11.01 - 11.25 308 16,140,682.42 2.10
---------------------------------------------------------------------
11.26 - 11.50 224 9,882,741.07 1.29
---------------------------------------------------------------------
11.51 - 11.75 767 38,089,406.44 4.96
---------------------------------------------------------------------
11.76 - 12.00 218 11,293,551.10 1.47
---------------------------------------------------------------------
12.01 - 12.25 153 5,832,714.16 0.76
---------------------------------------------------------------------
12.26 - 12.50 126 5,006,120.98 0.65
---------------------------------------------------------------------
12.51 - 12.75 37 1,657,617.64 0.22
---------------------------------------------------------------------
12.76 - 13.00 56 2,658,755.13 0.35
---------------------------------------------------------------------
13.01 greater than or = 85 2,726,146.97 0.36
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
---------------------------------------------------------------------
% of
# Total Total
Original Mortgage Loan of Current Current
Principal Balance ($) Loans Balance Balance
---------------------------------------------------------------------
1 - 25,000 687 13,126,622.53 1.71
---------------------------------------------------------------------
25,001 - 50,000 2,833 107,378,482.22 13.98
---------------------------------------------------------------------
50,001 - 75,000 2,771 170,420,163.81 22.19
---------------------------------------------------------------------
75,001 - 100,000 1,439 123,259,243.38 16.05
---------------------------------------------------------------------
100,001 - 125,000 827 92,341,436.21 12.03
---------------------------------------------------------------------
125,001 - 150,000 492 67,203,346.65 8.75
---------------------------------------------------------------------
150,001 - 175,000 300 48,301,061.72 6.29
---------------------------------------------------------------------
175,001 - 200,000 194 36,343,495.52 4.73
---------------------------------------------------------------------
200,001 - 225,000 105 22,255,810.87 2.90
---------------------------------------------------------------------
225,001 - 250,000 76 18,076,605.34 2.35
---------------------------------------------------------------------
250,001 - 275,000 63 16,417,110.57 2.14
---------------------------------------------------------------------
275,001 - 300,000 48 13,933,594.14 1.81
---------------------------------------------------------------------
300,001 greater than or = 98 38,803,436.99 5.05
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- -------------------------------------------------------------------------------
---------------------------------------------------------------------
% of
# Total Total
Current Mortgage Loan of Current Current
Principal Balance ($) Loans Balance Balance
---------------------------------------------------------------------
0.01 - 25,000.00 697 13,359,854.30 1.74
---------------------------------------------------------------------
25,000.01 - 50,000.00 2,837 107,789,678.85 14.04
---------------------------------------------------------------------
50,000.01 - 75,000.00 2,768 170,530,705.84 22.21
---------------------------------------------------------------------
75,000.01 - 100,000.00 1,434 123,078,090.15 16.03
---------------------------------------------------------------------
100,000.01 - 125,000.00 825 92,266,781.92 12.02
---------------------------------------------------------------------
125,000.01 - 150,000.00 491 67,142,793.52 8.74
---------------------------------------------------------------------
150,000.01 - 175,000.00 298 48,037,406.13 6.26
---------------------------------------------------------------------
175,000.01 - 200,000.00 195 36,567,131.53 4.76
---------------------------------------------------------------------
200,000.01 - 225,000.00 104 22,081,584.54 2.88
---------------------------------------------------------------------
225,000.01 - 250,000.00 76 18,102,216.80 2.36
---------------------------------------------------------------------
250,000.01 - 275,000.00 62 16,167,135.24 2.11
---------------------------------------------------------------------
275,000.01 - 300,000.00 49 14,233,477.95 1.85
---------------------------------------------------------------------
300,000.01 greater than or = 97 38,503,553.18 5.01
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
---------------------------------------------------------------------
% of
Original # Total Total
Combined of Current Current
Loan-to-Value Ratio Loans Balance Balance
---------------------------------------------------------------------
5.01 - 10.00 2 23,836.57 0.00
---------------------------------------------------------------------
10.01 - 15.00 9 167,658.80 0.02
---------------------------------------------------------------------
15.01 - 20.00 15 444,586.09 0.06
---------------------------------------------------------------------
20.01 - 25.00 29 870,747.67 0.11
---------------------------------------------------------------------
25.01 - 30.00 25 1,228,871.05 0.16
---------------------------------------------------------------------
30.01 - 35.00 46 1,483,890.23 0.19
---------------------------------------------------------------------
35.01 - 40.00 66 2,286,544.07 0.30
---------------------------------------------------------------------
40.01 - 45.00 106 4,872,113.52 0.63
---------------------------------------------------------------------
45.01 - 50.00 132 7,869,716.67 1.02
---------------------------------------------------------------------
50.01 - 55.00 154 8,074,477.28 1.05
---------------------------------------------------------------------
55.01 - 60.00 205 10,599,299.04 1.38
---------------------------------------------------------------------
60.01 - 65.00 349 23,392,339.80 3.05
---------------------------------------------------------------------
65.01 - 70.00 485 34,984,294.81 4.56
---------------------------------------------------------------------
70.01 - 75.00 772 64,088,583.56 8.35
---------------------------------------------------------------------
75.01 - 80.00 1,926 176,814,338.80 23.03
---------------------------------------------------------------------
80.01 - 85.00 1,336 107,710,229.93 14.03
---------------------------------------------------------------------
85.01 - 90.00 2,137 176,607,371.79 23.00
---------------------------------------------------------------------
90.01 - 95.00 1,323 95,460,311.24 12.43
---------------------------------------------------------------------
95.01 - 100.00 816 50,881,199.03 6.63
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- -------------------------------------------------------------------------------
---------------------------------------------------------------------
% of
# Total Total
of Current Current
Balloon Loans Balance Balance
---------------------------------------------------------------------
Non-Balloon 9,914 766,208,475.99 99.78
---------------------------------------------------------------------
Balloon 19 1,651,933.96 0.22
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
---------------------------------------------------------------------
% of
# Total Total
of Current Current
Original Term Loans Balance Balance
---------------------------------------------------------------------
60 - 119 56 1,090,122.42 0.14
---------------------------------------------------------------------
120 - 179 264 6,711,181.86 0.87
---------------------------------------------------------------------
180 - 239 1,519 66,998,575.70 8.73
---------------------------------------------------------------------
240 - 299 856 44,824,133.34 5.84
---------------------------------------------------------------------
300 - 359 34 1,853,095.68 0.24
---------------------------------------------------------------------
360 greater than or = 7,204 646,383,300.95 84.18
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- -------------------------------------------------------------------------------
---------------------------------------------------------------------
% of
# Total Total
of Current Current
Seasoning Loans Balance Balance
---------------------------------------------------------------------
= or less than 0 1,570 120,922,629.63 15.75
---------------------------------------------------------------------
1 - 12 8,246 635,998,652.20 82.83
---------------------------------------------------------------------
13 - 24 39 3,881,669.10 0.51
---------------------------------------------------------------------
25 - 36 45 4,925,174.15 0.64
---------------------------------------------------------------------
37 - 48 13 1,214,460.91 0.16
---------------------------------------------------------------------
49 - 60 2 101,523.53 0.01
---------------------------------------------------------------------
61 - 72 3 146,330.54 0.02
---------------------------------------------------------------------
85 - 96 3 104,007.67 0.01
---------------------------------------------------------------------
97 - 108 2 105,580.08 0.01
---------------------------------------------------------------------
121 - 132 2 41,726.07 0.01
---------------------------------------------------------------------
133 - 144 1 62,201.98 0.01
---------------------------------------------------------------------
145 - 156 2 111,260.82 0.01
---------------------------------------------------------------------
157 - 168 2 46,510.72 0.01
---------------------------------------------------------------------
181 - 192 1 29,589.33 0.00
---------------------------------------------------------------------
241 - 252 1 56,249.10 0.01
---------------------------------------------------------------------
253 - 264 1 112,844.12 0.01
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
---------------------------------------------------------------------
% of
# Total Total
Remaining Term of Current Current
to Maturity Loans Balance Balance
---------------------------------------------------------------------
49 - 60 36 580,265.67 0.08
---------------------------------------------------------------------
61 - 72 4 87,608.48 0.01
---------------------------------------------------------------------
73 - 84 10 236,038.38 0.03
---------------------------------------------------------------------
85 - 96 9 250,322.09 0.03
---------------------------------------------------------------------
97 - 108 3 188,494.73 0.02
---------------------------------------------------------------------
109 - 120 192 4,574,839.80 0.60
---------------------------------------------------------------------
121 - 132 1 28,419.99 0.00
---------------------------------------------------------------------
133 - 144 66 1,972,613.22 0.26
---------------------------------------------------------------------
145 - 156 5 176,488.45 0.02
---------------------------------------------------------------------
157 - 168 7 274,256.17 0.04
---------------------------------------------------------------------
169 - 180 1,503 66,301,796.41 8.63
---------------------------------------------------------------------
193 - 204 7 215,142.00 0.03
---------------------------------------------------------------------
205 - 216 4 318,985.68 0.04
---------------------------------------------------------------------
217 - 228 1 62,201.98 0.01
---------------------------------------------------------------------
229 - 240 855 44,771,382.61 5.83
---------------------------------------------------------------------
253 - 264 2 136,957.97 0.02
---------------------------------------------------------------------
265 - 276 1 34,655.87 0.00
---------------------------------------------------------------------
289 - 300 35 1,879,687.40 0.24
---------------------------------------------------------------------
301 - 312 3 129,436.43 0.02
---------------------------------------------------------------------
313 - 324 12 1,431,258.95 0.19
---------------------------------------------------------------------
325 - 336 42 4,564,169.42 0.59
---------------------------------------------------------------------
337 - 348 38 4,263,378.90 0.56
---------------------------------------------------------------------
349 - 360 7,097 635,382,009.35 82.75
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
---------------------------------------------------------------------
% of
# Total Total
of Current Current
Year of Origination Loans Balance Balance
---------------------------------------------------------------------
1984 1 24,177.42 0.00
---------------------------------------------------------------------
1985 2 50,125.42 0.01
---------------------------------------------------------------------
1986 2 145,670.68 0.02
---------------------------------------------------------------------
1987 1 10,883.93 0.00
---------------------------------------------------------------------
1988 1 30,842.14 0.00
---------------------------------------------------------------------
1990 3 72,629.78 0.01
---------------------------------------------------------------------
1991 1 63,489.72 0.01
---------------------------------------------------------------------
1992 1 71,759.42 0.01
---------------------------------------------------------------------
1993 4 139,884.83 0.02
---------------------------------------------------------------------
1994 6 541,008.41 0.07
---------------------------------------------------------------------
1995 24 2,809,756.39 0.37
---------------------------------------------------------------------
1996 54 5,882,468.34 0.77
---------------------------------------------------------------------
1997 63 5,204,107.55 0.68
---------------------------------------------------------------------
1998 9,770 752,813,605.92 98.04
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
---------------------------------------------------------------------
% of
# Total Total
Maturity of Current Current
Date Loans Balance Balance
---------------------------------------------------------------------
2002 1 10,723.18 0.00
---------------------------------------------------------------------
2003 35 569,542.49 0.07
---------------------------------------------------------------------
2004 4 87,608.48 0.01
---------------------------------------------------------------------
2005 11 256,145.66 0.03
---------------------------------------------------------------------
2006 9 343,058.93 0.04
---------------------------------------------------------------------
2007 2 75,650.61 0.01
---------------------------------------------------------------------
2008 192 4,574,839.80 0.60
---------------------------------------------------------------------
2009 1 28,419.99 0.00
---------------------------------------------------------------------
2010 66 1,972,613.22 0.26
---------------------------------------------------------------------
2011 5 176,488.45 0.02
---------------------------------------------------------------------
2012 9 414,525.24 0.05
---------------------------------------------------------------------
2013 1,501 66,161,527.34 8.62
---------------------------------------------------------------------
2014 1 24,177.42 0.00
---------------------------------------------------------------------
2015 6 190,964.58 0.02
---------------------------------------------------------------------
2016 5 381,187.66 0.05
---------------------------------------------------------------------
2017 1 32,128.42 0.00
---------------------------------------------------------------------
2018 854 44,739,254.19 5.83
---------------------------------------------------------------------
2020 2 136,957.97 0.02
---------------------------------------------------------------------
2021 1 34,655.87 0.00
---------------------------------------------------------------------
2022 2 110,466.00 0.01
---------------------------------------------------------------------
2023 33 1,769,221.40 0.23
---------------------------------------------------------------------
2024 4 177,097.83 0.02
---------------------------------------------------------------------
2025 22 2,765,344.55 0.36
---------------------------------------------------------------------
2026 39 4,301,226.07 0.56
---------------------------------------------------------------------
2027 50 4,656,928.28 0.61
---------------------------------------------------------------------
2028 7,077 633,869,656.32 82.55
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
---------------------------------------------------------------------
% of
Geographic # Total Total
Distribution of Current Current
by Balance Loans Balance Balance
---------------------------------------------------------------------
California 667 102,310,194.61 13.32
---------------------------------------------------------------------
Ohio 902 56,604,655.43 7.37
---------------------------------------------------------------------
North Carolina 546 42,069,668.20 5.48
---------------------------------------------------------------------
Michigan 663 40,916,883.57 5.33
---------------------------------------------------------------------
Florida 463 38,516,781.52 5.02
---------------------------------------------------------------------
Tennessee 503 36,814,632.67 4.79
---------------------------------------------------------------------
Louisiana 534 30,610,215.52 3.99
---------------------------------------------------------------------
New York 347 30,115,554.98 3.92
---------------------------------------------------------------------
Indiana 522 28,365,846.45 3.69
---------------------------------------------------------------------
Georgia 287 27,390,553.50 3.57
---------------------------------------------------------------------
Mississippi 407 24,511,379.74 3.19
---------------------------------------------------------------------
Pennsylvania 328 23,589,703.02 3.07
---------------------------------------------------------------------
New Jersey 142 18,979,304.36 2.47
---------------------------------------------------------------------
South Carolina 209 14,245,003.02 1.86
---------------------------------------------------------------------
Illinois 255 14,244,179.38 1.86
---------------------------------------------------------------------
Virginia 166 14,237,640.87 1.85
---------------------------------------------------------------------
Kentucky 241 14,233,038.67 1.85
---------------------------------------------------------------------
Colorado 131 13,570,689.13 1.77
---------------------------------------------------------------------
Texas 208 12,800,392.80 1.67
---------------------------------------------------------------------
Washington 113 12,754,748.81 1.66
---------------------------------------------------------------------
Oklahoma 243 11,868,614.70 1.55
---------------------------------------------------------------------
Maine 158 11,707,555.19 1.52
---------------------------------------------------------------------
New Hampshire 134 11,347,210.59 1.48
---------------------------------------------------------------------
Massachusetts 103 10,976,380.43 1.43
---------------------------------------------------------------------
Wisconsin 177 10,925,870.09 1.42
---------------------------------------------------------------------
Connecticut 92 9,766,206.43 1.27
---------------------------------------------------------------------
Utah 96 9,568,719.72 1.25
---------------------------------------------------------------------
Iowa 167 9,343,467.67 1.22
---------------------------------------------------------------------
Maryland 83 9,076,041.56 1.18
---------------------------------------------------------------------
Missouri 138 8,658,316.21 1.13
---------------------------------------------------------------------
Oregon 76 8,568,721.14 1.12
---------------------------------------------------------------------
Arkansas 154 8,300,974.13 1.08
---------------------------------------------------------------------
Arizona 68 6,996,706.67 0.91
---------------------------------------------------------------------
New Mexico 80 6,760,170.24 0.88
---------------------------------------------------------------------
Kansas 121 6,607,532.20 0.86
---------------------------------------------------------------------
Alabama 75 6,319,572.74 0.82
---------------------------------------------------------------------
Minnesota 87 5,825,663.91 0.76
---------------------------------------------------------------------
West Virginia 83 4,667,636.01 0.61
---------------------------------------------------------------------
Nebraska 64 3,164,092.87 0.41
---------------------------------------------------------------------
District of Columbia 18 2,269,293.08 0.30
---------------------------------------------------------------------
Nevada 20 1,936,586.71 0.25
---------------------------------------------------------------------
Idaho 21 1,660,634.46 0.22
---------------------------------------------------------------------
Rhode Island 12 1,614,612.43 0.21
---------------------------------------------------------------------
Delaware 9 938,716.44 0.12
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
Note: The description of the collateral herein will be superseded by the
description of the collateral in the prospectus.
---------------------------------------------------------------------
Vermont 9 935,965.37 0.12
---------------------------------------------------------------------
Wyoming 6 430,595.12 0.06
---------------------------------------------------------------------
North Dakota 2 310,930.71 0.04
---------------------------------------------------------------------
Montana 2 232,834.79 0.03
---------------------------------------------------------------------
Hawaii 1 199,722.09 0.03
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- -------------------------------------------------------------------------------
---------------------------------------------------------------------
% of
# Total Total
of Current Current
Property Type Loans Balance Balance
---------------------------------------------------------------------
Single Family Residence 8,929 688,602,629.22 89.68
---------------------------------------------------------------------
2 Family 284 25,204,571.78 3.28
---------------------------------------------------------------------
Condo 251 20,662,772.98 2.69
---------------------------------------------------------------------
PUD 91 13,282,241.69 1.73
---------------------------------------------------------------------
Manufactured Housing 239 9,095,208.89 1.18
---------------------------------------------------------------------
Townhouse 30 2,864,301.46 0.37
---------------------------------------------------------------------
Rowhouse 42 2,686,233.72 0.35
---------------------------------------------------------------------
4 Family 31 2,589,009.75 0.34
---------------------------------------------------------------------
3 Family 24 2,060,253.31 0.27
---------------------------------------------------------------------
Modular Housing 12 813,187.15 0.11
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- -------------------------------------------------------------------------------
---------------------------------------------------------------------
% of
# Total Total
of Current Current
Occupancy Loans Balance Balance
---------------------------------------------------------------------
Primary 9,602 746,949,981.86 97.28
---------------------------------------------------------------------
Investment 301 18,408,253.87 2.40
---------------------------------------------------------------------
Second Home 30 2,502,174.22 0.33
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
---------------------------------------------------------------------
% of
# Total Total
Lien of Current Current
Position Loans Balance Balance
---------------------------------------------------------------------
1st Lien 9,747 763,463,832.34 99.43
---------------------------------------------------------------------
2nd Lien 186 4,396,577.61 0.57
---------------------------------------------------------------------
Total: 9,933 767,860,409.95 100.00
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
This information has been prepared in connection with the issuance of securities
representing debt of the above trust, and is based in part on information
provided by UCFC with respect to the expected characteristics of the pool of
home equity loans in which these securities will represent debt obligations. The
actual characteristics and performance of the home equity loans will differ from
the assumptions used in preparing these materials, which are hypothetical in
nature. Changes in the assumptions may have a material impact on the information
set forth in these materials. No representation is made that any performance or
return indicated herein will be achieved. For example, it is very unlikely that
the loans will prepay at a constant rate or follow a predictable pattern. This
information may not be used or otherwise disseminated in connection with the
offer or sale of these or any other securities, except in connection with the
initial offer or sale of these securities to you to the extent set forth below.
With respect to yield and prepayment information enclosed, the depositor has not
prepared, reviewed, or participated in the preparation of such materials; is not
responsible for the accuracy of such materials; and has not authorized the
dissemination of such materials. NO REPRESENTATION IS MADE AS TO THE
APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE MATERIALS OR THE
ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is available upon
request. These materials do no constitute an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. ANY SUCH OFFER TO BUY OR SELL
ANY SECURITY WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS
SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT WILL
CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY OFFERED THEREBY
AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE SOLELY IN RELIANCE
UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION WITH SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT. In the event of any such offering, these materials,
including any description of the loans contained herein, shall be deemed
superseded, amended and supplemented in their entirety by such Prospectus and
Prospectus Supplement. To Our Readers Worldwide: In addition, please note that
this information has been provided by Morgan Stanley & Co. Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We recommend
that investors obtain the advice of their Morgan Stanley & Co. International
Limited or Morgan Stanley Japan Ltd. representative about the investment
concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED BY THE U.K.
SECURITIES AND FUTURES AUTHORITY.
<PAGE>
NationsBanc Montgomery Securities LLC
- --------------------------------------------------------------------------------
This Structural Term Sheet, Collateral Term Sheet, or Computational Materials,
as appropriate (the "material"), is for your private information and NationsBanc
Montgomery Securities LLC (the "Underwriter") is not soliciting any action based
upon it. This material is not to be construed as an offer to sell or the
solicitation of any offer to buy any security in any jurisdiction where such an
offer to buy any security in any jurisdiction where such an offer or
solicitation would be illegal. This material is based on information that the
Underwriter considers reliable, but the Underwriter does not represent that it
is accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
pertain to securities that ultimately are not sold. The information contained in
this material may be based on assumptions regarding market conditions and other
matters as reflected herein. The Underwriter makes no representation regarding
the reasonableness of such assumptions or the likelihood that any of such
assumptions will coincide with actual market conditions or events, and this
material should not be relied upon for such purposes. The Underwriter and its
affiliates, officers, directors, partners and employees, including persons
involved in the preparation or issuance of this material may, from time to time,
have long or short positions in, and buy and sell, the securities mentioned
therein or derivatives thereof (including options). This material may be filed
with the Securities and Exchange Commission (the "SEC") and incorporated by
reference into an effective registration statement previously filed with the SEC
under Rule 415 of the Securities Act of 1933, including all cases where the
material does not pertain to securities that are ultimately offered for sale
pursuant to such registration statement. Information contained in this material
is current as of the date appearing on this material only. Information in this
material regarding any assets backing any securities discussed herein supersedes
all prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you. This material is furnished
solely by the Underwriter and not by the issuer of the securities. The issuer of
the securities has not prepared, reviewed or participated in the preparation of
this material, is not responsible for the accuracy of this material and has not
authorized the dissemination of this material. The Underwriter is acting as
underwriter and not acting as agent for the issuer in connection with the
proposed transaction.
<PAGE>
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan does not warrant its completeness or accuracy.
These materials are subject to change from time to time without notice. Past
performance is not indicative of future results. Any description of the
collateral contained herein supersedes any previous collateral information and
will be superseded by the final prospectus relating to the securities. These
materials are not intended as an offer or solicitation with respect to the
purchase or sale of any security, and have been provided to you for
informational purposes only and may not be relied upon by you in evaluating the
merits of investing in the securities. Any investment decision with respect to
the securities should be made by you based solely upon the information contained
in the final prospectus relating to the securities. No assurance or
representation can be made as to the actual rate or timing of principal payments
or prepayments on any of the collateral or the performance characteristics of
the securities. This information was prepared in reliance on information
regarding the collateral furnished by the seller of the collateral. J.P. Morgan
may hold a position or act as market maker in the financial instruments of any
issuer discussed herein or act as advisor or lender to such issuer. J.P. Morgan
Securities Inc. is a member of SIPC and SFA. Copyright 1997 J.P. Morgan & Co.
Incorporated.
<PAGE>
The information provided herein has been provided to Prudential Securities
Incorporated ("PSI") by Morgan Stanley Dean Witter as an underwriter for the
UCFC Home Equity Loan Owner Trust, Series 1998-BA transaction. The analysis in
this report is accurate to the best of PSI's knowledge and is based on
information provided by United Companies Financial Corporation and Morgan
Stanley Dean Witter. PSI makes no representations as to the accuracy of such
information provided to it, and PSI has not independently verified such
information. All assumptions and information in this report are as of this date
and are subject to change. All analyses are based on certain assumptions noted
herein and different assumptions could yield substantially different results.
You are cautioned that there is no universally accepted method for analyzing
financial instruments. You should review the assumptions; there may be
differences between these assumptions and your actual business practices.
Further, PSI does not guarantee any results and there is no guarantee as to the
liquidity of the instruments involved in this analysis. The decision to adopt
any strategy remains your responsibility. PSI (or any of its affiliates) or
their officers, directors, analysts or employees may have positions in
securities, commodities or derivative instruments thereon referred to herein,
and may, as principal or agent, buy or sell such securities, commodities or
derivative instruments. In addition, PSI may make a market in the securities
referred to herein. Neither the information nor the assumptions reflected herein
shall be construed to be, or constitute, an offer to sell or buy or a
solicitation of any offer to sell or buy any securities, commodities or
derivative instruments mentioned herein. No sale of any securities, commodities
or derivative instruments should be consummated without the purchaser first
having received prospectus and a prospectus supplement. Finally, PSI has not
addressed the legal, accounting and tax implications of the analysis with
respect to you, and PSI strongly urges you to seek advice from your counsel,
accountant and tax advisor.
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
Financial Statements
December 31, 1997
(With Independent Auditors' Report Thereon)
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
AUDITED FINANCIAL STATEMENTS
DECEMBER 31, 1997
<TABLE>
<S> <C>
Report of Independent Auditors............................................................................. A-1
Balance Sheets............................................................................................. A-2
Statements of Income....................................................................................... A-3
Statements of Stockholder's Equity......................................................................... A-4
Statements of Cash Flows................................................................................... A-5
Notes to Financial Statements.............................................................................. A-6
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholder
Financial Guaranty Insurance Company:
We have audited the accompanying balance sheets of Financial Guaranty Insurance
Company as of December 31, 1997 and 1996, and the related statements of income,
stockholder's equity, and cash flows for each of the years in the three year
period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Financial Guaranty Insurance
Company as of December 31, 1997 and 1996 and the results of its operations and
its cash flows for each of the years in the three year period then ended in
conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
January 23, 1998
A-1
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
Fixed maturity securities available-for-sale (amortized cost of $2,313,458 in 1997
and $2,190,303 in 1996)............................................................ $2,443,746 $2,250,549
Short-term investments, at cost, which approximates market........................... 76,039 73,839
Cash................................................................................. 802 860
Accrued investment income............................................................ 38,927 37,655
Reinsurance recoverable.............................................................. 8,220 7,015
Prepaid reinsurance premiums......................................................... 154,208 167,683
Deferred policy acquisition costs.................................................... 86,286 91,945
Property and equipment, net of accumulated depreciation ($17,346 in 1997 and $15,333
in 1996)........................................................................... 3,142 4,696
Receivable for securities sold....................................................... -- 379
Prepaid expenses and other assets.................................................... 21,002 19,520
------------ ------------
Total assets.................................................................... $2,832,372 $2,654,141
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Unearned premiums.................................................................. $ 628,553 $ 681,816
Loss and loss adjustment expenses.................................................. 76,926 72,616
Ceded reinsurance balances payable................................................. 3,932 10,561
Accounts payable and accrued expenses.............................................. 26,352 54,165
Payable to Parent.................................................................. -- 1,791
Current federal income taxes payable............................................... 19,335 52,016
Deferred federal income taxes...................................................... 118,522 91,805
Payable for securities purchased................................................... 5,811 4,937
------------ ------------
Total liabilities............................................................... 879,431 969,707
------------ ------------
------------ ------------
Stockholder's Equity:
Common stock, par value $1,500 per share; 10,000 shares authorized, issued and
outstanding..................................................................... 15,000 15,000
Additional paid-in capital......................................................... 383,511 334,011
Net unrealized gains on fixed maturity securities available-for-sale, net of tax... 84,687 39,160
Foreign currency translation adjustment, net of tax................................ (752) (429)
Retained earnings.................................................................. 1,470,495 1,296,692
------------ ------------
Total stockholder's equity...................................................... 1,952,941 1,684,434
------------ ------------
Total liabilities and stockholder's equity...................................... $2,832,372 $2,654,141
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements.
A-2
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
REVENUES:
Gross premiums written....................................................... $ 95,995 $ 97,027 $ 97,288
Ceded premiums............................................................... (19,780) (29,376) (19,319)
-------- -------- --------
Net premiums written....................................................... 76,215 67,651 77,969
Decrease in net unearned premiums............................................ 39,788 51,314 27,309
-------- -------- --------
Net premiums earned........................................................ 116,003 118,965 105,278
Net investment income........................................................ 127,773 124,635 120,398
Net realized gains........................................................... 16,700 15,022 30,762
-------- -------- --------
Total revenues............................................................. 260,476 258,622 256,438
EXPENSES:
Loss and loss adjustment expenses............................................ 12,539 2,389 (8,426)
Policy acquisition costs..................................................... 12,936 16,327 13,072
Decrease (Increase) in deferred policy acquisition costs..................... 5,659 2,923 (3,940)
Other underwriting expenses.................................................. 14,691 12,508 19,100
-------- -------- --------
Total expenses............................................................. 45,825 34,147 19,806
-------- -------- --------
Income before provision for Federal income taxes............................. 214,651 224,475 236,632
-------- -------- --------
Federal income tax expense:
Current.................................................................... 39,133 41,548 28,913
Deferred................................................................... 1,715 5,318 19,841
-------- -------- --------
Total Federal income tax expense........................................... 40,848 46,866 48,754
-------- -------- --------
Net income................................................................. $173,803 $177,609 $187,878
-------- -------- --------
-------- -------- --------
</TABLE>
See accompanying notes to financial statements.
A-3
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
STATEMENTS OF STOCKHOLDER'S EQUITY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NET UNREALIZED
GAINS (LOSSES) FOREIGN
ON FIXED MATURITY CURRENCY
ADDITIONAL SECURITIES TRANSLATION
COMMON PAID-IN AVAILABLE- ADJUSTMENT, RETAINED
STOCK CAPITAL FOR-SALE, NET OF TAX NET OF TAX EARNINGS
------- ---------- -------------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1995........................... $15,000 $334,011 $(41,773) $(1,221) $ 973,706
Net income......................................... -- -- -- -- 187,878
Dividend paid...................................... -- -- -- -- (25,000)
Change in fixed maturity securities available for
sale, net of tax of $56,839...................... -- -- 105,558 -- --
Foreign currency translation adjustment............ -- -- -- (278) --
------- ---------- ---------- ----------- ----------
Balance, December 31, 1995......................... 15,000 334,011 63,785 (1,499) 1,136,584
------- ---------- ---------- ----------- ----------
Net Income......................................... -- -- -- -- 177,609
Dividend paid...................................... -- -- -- -- (17,500)
Change in fixed maturity securities available for
sale, net of tax of ($13,260).................... -- -- (24,625) -- --
Foreign currency translation adjustment............ -- -- -- 1,070 --
------- ---------- ---------- ----------- ----------
Balance at December 31, 1996....................... 15,000 334,011 39,160 (429) 1,296,692
------- ---------- ---------- ----------- ----------
Net Income......................................... -- -- -- -- 173,803
Capital contribution............................... -- 49,500 -- -- --
Change in fixed maturity securities available for
sale, net of tax of $24,516...................... -- -- 45,527 -- --
Foreign currency translation adjustment............ -- -- -- (323) --
------- ---------- ---------- ----------- ----------
Balance at December 31, 1997....................... $15,000 $383,511 $ 84,687 ($ 752) $1,470,495
------- ---------- ---------- ----------- ----------
------- ---------- ---------- ----------- ----------
</TABLE>
See accompanying notes to financial statements.
A-4
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------
1997 1996 1995
---------- ---------- ---------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income................................................................ $ 173,803 $ 177,609 $ 187,878
Adjustments to reconcile net income to net cash provided by operating
activities:
Change in unearned premiums............................................. (53,263) (45,719) (29,890)
Change in loss and loss adjustment expense reserves..................... 4,310 (5,192) (20,938)
Depreciation of property and equipment.................................. 2,013 2,472 2,348
Change in reinsurance receivable........................................ (1,205) 657 6,800
Change in prepaid reinsurance premiums.................................. 13,475 (5,596) 2,581
Change in foreign currency translation adjustment....................... (497) 1,646 (427)
Policy acquisition costs deferred....................................... (12,936) (16,327) (16,219)
Amortization of deferred policy acquisition costs....................... 18,595 19,250 12,279
Change in accrued investment income, and prepaid expenses and other
assets............................................................... (2,754) (7,201) 2,906
Change in other liabilities............................................. (36,233) 30,117 (12,946)
Change in deferred income taxes......................................... 1,715 5,318 19,841
Amortization of fixed maturity securities............................... 2,698 792 1,922
Change in current income taxes payable.................................. (32,681) 720 (30,827)
Net realized gains on investments....................................... (16,700) (15,022) (30,762)
---------- ---------- ---------
Net cash provided by operating activities............................... 60,340 143,524 94,546
---------- ---------- ---------
INVESTING ACTIVITIES:
Sales and maturities of fixed maturity securities......................... 741,604 891,643 836,103
Purchases of fixed maturity securities.................................... (848,843) (1,033,345) (891,108)
Purchases, sales and maturities of short-term investments, net............ (2,200) 17,193 (15,358)
Purchases of property and equipment, net.................................. (459) (854) (750)
---------- ---------- ---------
Net cash used in investing activities..................................... (109,898) (125,363) (71,113)
---------- ---------- ---------
FINANCING ACTIVITIES:
Capital Contributions..................................................... 49,500 -- --
Dividends paid............................................................ -- (17,500) (25,000)
---------- ---------- ---------
Net cash provided by financing activities................................. 49,500 (17,500) (25,000)
---------- ---------- ---------
(Decrease) Increase in cash............................................... (58) 661 (1,567)
Cash at beginning of year................................................. 860 199 1,766
---------- ---------- ---------
Cash at end of year....................................................... $ 802 $ 860 $ 199
---------- ---------- ---------
---------- ---------- ---------
</TABLE>
See accompanying notes to financial statements.
A-5
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. BUSINESS
Financial Guaranty Insurance Company (the 'Company') is a wholly-owned
insurance subsidiary of FGIC Corporation (the 'Parent'). The Parent is owned
approximately ninety-nine percent by General Electric Capital Corporation ('GE
Capital') and approximately one percent by Sumitomo Marine and Fire Insurance
Company, Ltd. The Company provides financial guaranty insurance on newly issued
municipal bonds and municipal bonds trading in the secondary market, the latter
including bonds held by unit investment trusts and mutual funds. The Company
also insures structured debt issues outside the municipal market. Approximately
86% of the business written since inception by the Company has been municipal
bond insurance.
The Company insures only those securities that, in its judgment, are of
investment grade quality. Municipal bond insurance written by the Company
insures the full and timely payment of principal and interest when due on
scheduled maturity, sinking fund or other mandatory redemption and interest
payment dates to the holders of municipal securities. The Company's insurance
policies do not provide for accelerated payment of the principal of, or interest
on, the bond insured in the case of a payment default. If the issuer of a
Company-insured bond defaults on its obligation to pay debt service, the Company
will make scheduled interest and principal payments as due and is subrogated to
the rights of bondholders to the extent of payments made by it.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2. SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared on the basis of
generally accepted accounting principles ('GAAP') which differ in certain
respects from the accounting practices prescribed or permitted by regulatory
authorities (see Note 3). The prior years financial statements have been
reclassified to conform to the 1997 presentation. Significant accounting
policies are as follows:
Investments
The Company accounts for its investments in accordance with Statement of
Financial Accounting Standards No. 115 ('SFAS 115'), 'Accounting for Certain
Investments in Debt and Equity Securities.' The Statement defines three
categories for classification of debt securities and the related accounting
treatment for each respective category. The Company has determined that its
fixed maturity securities portfolio should be classified as available-for-sale.
Under SFAS 115, securities held as available-for-sale are recorded at fair value
and unrealized holding gains/losses are recorded as a separate component of
stockholder's equity, net of applicable income taxes.
Short-term investments are carried at cost, which approximates fair value.
Bond discounts and premiums are amortized over the remaining terms of the
securities. Realized gains or losses on the sale of investments are determined
on the basis of specific identification.
Premium Revenue Recognition
Premiums for policies where premiums are collected in a single payment at
policy inception are earned over the period at risk, based on the total exposure
outstanding at any point in time. Financial guaranty insurance policies exposure
generally declines according to predetermined schedules. For policies with
premiums that are collected periodically, premiums are reflected in income pro
rata over the period covered by the premium payment.
A-6
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
2. SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Policy Acquisition Costs
Policy acquisition costs include only those expenses that relate directly
to premium production. Such costs include compensation of employees involved in
underwriting, marketing and policy issuance functions, rating agency fees, state
premium taxes and certain other underwriting expenses, offset by ceding
commission income on premiums ceded to reinsurers (see Note 6). Net acquisition
costs are deferred and amortized over the period in which the related premiums
are earned. Anticipated loss and loss adjustment expenses are considered in
determining the recoverability of acquisition costs.
Loss and Loss Adjustment Expenses
Provision for loss and loss adjustment expenses is made in an amount equal
to the present value of unpaid principal and interest and other payments due
under insured risks at the balance sheet date for which, in management's
judgment, the likelihood of default is probable. Such reserves amounted to $76.9
million and $72.6 million at December 31, 1997 and 1996, respectively. As of
December 31, 1997 and 1996, such reserves included $35.1 million and $28.9
million, respectively, established based on an evaluation of the insured
portfolio in light of current economic conditions and other relevant factors. As
of December 31, 1997 and 1996, case-basis loss and loss adjustment expense
reserves were $41.8 million and $43.7 million, respectively. Loss and loss
adjustment expenses include amounts discounted at an interest rate between 5.9%
and 6.0% in 1997 and between 6.5% and 6.6% in 1996. The discount rate used is
based upon the risk free rate for the average maturity of the applicable bond
sector. The reserve for loss and loss adjustment expenses is necessarily based
upon estimates, however, in management's opinion the reserves for loss and loss
adjustment expenses is adequate. However, actual results will likely differ from
those estimates.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. These temporary differences relate principally to unrealized gains
(losses) on fixed maturity securities available-for-sale, premium revenue
recognition, deferred acquisition costs and deferred compensation. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
Financial guaranty insurance companies are permitted to deduct from taxable
income, subject to certain limitations, amounts added to statutory contingency
reserves (see Note 3). The amounts deducted must be included in taxable income
upon their release from the reserves or upon earlier release of such amounts
from such reserves to cover excess losses as permitted by insurance regulators.
The amounts deducted are allowed as deductions from taxable income only to the
extent that U.S. government non-interest bearing tax and loss bonds are
purchased and held in an amount equal to the tax benefit attributable to such
deductions.
Property and Equipment
Property and equipment consists of furniture, fixtures, equipment and
leasehold improvements which are recorded at cost and are charged to income over
their estimated service lives. Office furniture and equipment are depreciated
straight-line over five years. Leasehold improvements are amortized over their
estimated service life or over the life of the lease, whichever is shorter.
Computer equipment and software are depreciated over three years. Maintenance
and repairs are charged to expense as incurred.
A-7
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
2. SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Foreign Currency Translation
The Company has established foreign branches in France and the United
Kingdom and determined that the functional currencies of these branches are
local currencies. Accordingly, the assets and liabilities of these foreign
branches are translated into U.S. dollars at the rates of exchange existing at
December 31, 1997 and 1996 and revenues and expenses are translated at average
monthly exchange rates. The cumulative translation loss at December 31, 1997 and
1996 was $0.7 million and $0.4 million, respectively, net of tax, and is
reported as a separate component of stockholder's equity.
3. STATUTORY ACCOUNTING PRACTICES
The financial statements are prepared on the basis of GAAP, which differs
in certain respects from accounting practices prescribed or permitted by state
insurance regulatory authorities. The following are the significant ways in
which statutory-basis accounting practices differ from GAAP:
(a) premiums are earned directly in proportion to the scheduled
principal and interest payments rather than in proportion to the total
exposure outstanding at any point in time.
(b) policy acquisition costs are charged to current operations as
incurred rather than as related premiums are earned;
(c) a contingency reserve is computed on the basis of statutory
requirements for the security of all policyholders, regardless of whether
loss contingencies actually exist, whereas under GAAP, a reserve is
established based on an ultimate estimate of exposure;
(d) certain assets designated as non-admitted assets are charged
directly against surplus but are reflected as assets under GAAP, if
recoverable;
(e) federal income taxes are only provided with respect to taxable
income for which income taxes are currently payable, while under GAAP taxes
are also provided for differences between the financial reporting and the
tax bases of assets and liabilities;
(f) purchases of tax and loss bonds are reflected as admitted assets,
while under GAAP they are recorded as federal income tax payments; and
(g) all fixed income investments are carried at amortized cost rather
than at fair value for securities classified as available-for-sale under
GAAP.
A-8
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
3. STATUTORY ACCOUNTING PRACTICES--(CONTINUED)
The following is a reconciliation of net income and stockholder's equity
presented on a GAAP basis to the corresponding amounts reported on a
statutory-basis for the periods indicated below (in thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------
1997 1996 1995
------------------------- ------------------------- -------------------------
NET STOCKHOLDER'S NET STOCKHOLDER'S NET STOCKHOLDER'S
INCOME EQUITY INCOME EQUITY INCOME EQUITY
-------- ------------- -------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
GAAP basis amount........................ $173,803 $ 1,952,941 $177,609 $ 1,684,434 $187,878 $ 1,547,881
Premium revenue recognition.............. (4,924) (181,209) (9,358) (176,285) (22,555) (166,927)
Deferral of acquisition costs............ 5,659 (86,286) 2,923 (91,945) (3,940) (94,868)
Contingency reserve...................... -- (540,677) -- (460,973) -- (386,564)
Contingency reserve tax deduction (see
Note 2)................................ -- 95,185 -- 85,176 -- 78,196
Non-admitted assets...................... -- (2,593) -- (3,879) -- (5,731)
Case basis loss reserves................. 1,377 (1,872) (3,197) (3,249) 4,048 (52)
Portfolio loss reserves.................. 5,000 29,000 -- 24,000 (22,100) 24,000
Deferral of income taxes................. 1,715 72,260 5,317 70,719 19,842 64,825
Unrealized (gains) on fixed maturity
securities held at fair value, net of
tax.................................... -- (84,687) -- (39,160) -- (63,785)
Recognition of profit commission......... (1,203) (7,388) (441) (6,185) 3,096 (5,744)
Allocation of tax benefits due to
Parent's net operating loss to the
Company (see Note 5)................... 313 10,916 313 10,603 (637) 10,290
-------- ------------- -------- ------------- -------- -------------
Statutory-basis amount.............. $181,740 $ 1,255,590 $173,166 $ 1,093,256 $166,906 $ 1,001,521
-------- ------------- -------- ------------- -------- -------------
-------- ------------- -------- ------------- -------- -------------
</TABLE>
A-9
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
4. INVESTMENTS
Investments in fixed maturity securities carried at fair value of $3.1
million and $3.1 million as of December 31, 1997 and 1996, respectively, were on
deposit with various regulatory authorities as required by law.
The amortized cost and fair values of short-term investments and of
investments in fixed maturity securities classified as available-for-sale are as
follows (in thousands):
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED
AMORTIZED HOLDING HOLDING FAIR
1997 COST GAINS LOSSES VALUE
- ---- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations of U.S. government
corporations and agencies.................................. $ 11,539 $ 185 $ -- $ 11,724
Obligations of states and political subdivisions............. 2,272,225 130,183 655 2,401,753
Debt securities issued by foreign governments................ 29,694 603 28 30,269
---------- ---------- ---------- ----------
Investments available-for-sale............................... 2,313,458 130,971 683 2,443,746
Short-term investments....................................... 76,039 -- -- 76,039
---------- ---------- ---------- ----------
Total........................................................ $2,389,497 $ 130,971 $683 $2,519,785
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
The amortized cost and fair values of short-term investments and of
investments in fixed maturity securities available-for-sale at December 31,
1997, by contractual maturity date, are shown below. Expected maturities may
differ from contractual maturities because borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
AMORTIZED FAIR
1997 COST VALUE
- ---- ---------- ----------
<S> <C> <C>
Due in one year or less........................................... $ 85,199 $ 85,395
Due after one year through five years............................. 61,168 62,955
Due after five years through ten years............................ 589,772 619,972
Due after ten years through twenty years.......................... 1,604,167 1,700,193
Due after twenty years............................................ 49,191 51,270
---------- ----------
Total............................................................. $2,389,497 $2,519,785
---------- ----------
---------- ----------
</TABLE>
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED
AMORTIZED HOLDING HOLDING FAIR
1996 COST GAINS LOSSES VALUE
- ---- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations of U.S. government
corporations and agencies.................................. $ 57,987 $ 373 $ 1 $ 58,359
Obligations of states and political subdivisions............. 2,098,486 65,254 4,854 2,158,886
Debt securities issued by foreign governments................ 33,830 -- 526 33,304
---------- ---------- ---------- ----------
Investments available-for-sale............................... 2,190,303 65,627 5,381 2,250,549
Short-term investments....................................... 73,839 -- -- 73,839
---------- ---------- ---------- ----------
Total........................................................ $2,264,142 $ 65,627 $5,381 $2,324,388
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
In 1997, 1996 and 1995, proceeds from sales and maturities of investments
in fixed maturity securities available-for-sale carried at fair value were
$741.6 million, $891.6 million, and $836.1 million, respectively. For 1997, 1996
and 1995 gross gains of $19.1 million, $19.8 million and $36.3 million
respectively, and gross losses of $2.4 million, $4.8 million and $5.5 million
respectively, were realized on such sales.
A-10
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
4. INVESTMENTS--(CONTINUED)
Net investment income of the Company is derived from the following sources
(in thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Income from fixed maturity securities $122,372 $119,290 $112,684
Income from short-term investments........................................... 6,366 6,423 8,450
-------- -------- --------
Total investment income...................................................... 128,738 125,713 121,134
Investment expenses.......................................................... 965 1,078 736
-------- -------- --------
Net investment income........................................................ $127,773 $124,635 $120,398
-------- -------- --------
-------- -------- --------
</TABLE>
As of December 31, 1997, the Company did not have more than 10% of its
investment portfolio concentrated in a single issuer or industry.
5. INCOME TAXES
The Company files a federal tax return as part of the consolidated return
of General Electric Capital Corporation ('GE Capital'). Under a tax sharing
agreement with GE Capital, taxes are allocated to the Company and the Parent
based upon their respective contributions to consolidated net income. The
Company also has a separate tax sharing agreement with its Parent. Under this
agreement the Company can utilize its Parent's net operating loss to offset
taxable income on a stand-alone basis. The Company's effective federal corporate
tax rate (19.0 percent in 1997, 20.8 percent in 1996 and 20.6 percent in 1995)
is less than the corporate tax rate on ordinary income of 35 percent in 1997,
1996 and 1995.
Federal income tax expense relating to operations of the Company for 1997,
1996 and 1995 is comprised of the following (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Current tax expense.......................................................... $ 39,133 $ 41,548 $ 28,913
Deferred tax expense......................................................... 1,715 5,318 19,841
-------- -------- --------
Federal income tax expense................................................... $ 40,848 $ 46,866 $ 48,754
-------- -------- --------
-------- -------- --------
</TABLE>
The following is a reconciliation of federal income taxes computed at the
statutory rate and the provision for federal income taxes (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Income taxes computed on income before provision for federal income taxes, at
the statutory rate......................................................... $ 75,128 $ 78,566 $ 82,821
Tax effect of:
Tax-exempt interest........................................................ (34,508) (32,609) (30,630)
Other, net................................................................. 228 909 (3,437)
-------- -------- --------
Provision for income taxes................................................... $ 40,848 $ 46,866 $ 48,754
-------- -------- --------
-------- -------- --------
</TABLE>
A-11
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
5. INCOME TAXES--(CONTINUED)
The tax effects of temporary differences that give rise to significant
portions of the net deferred tax liability or asset at December 31, 1997 and
1996 are presented below (in thousands):
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Deferred tax assets:
Loss reserves................................................................. $ 10,999 $ 9,249
Deferred compensation......................................................... 2,242 2,531
Tax over book capital gains................................................... 2,996 2,144
Other......................................................................... 2,260 2,601
-------- --------
Total gross deferred tax assets................................................. 18,497 16,525
-------- --------
Deferred tax liabilities:
Unrealized gains on fixed maturity securities, available-for-sale............. 45,601 21,086
Deferred acquisition costs.................................................... 30,200 32,181
Premium revenue recognition................................................... 40,103 37,159
Rate differential on tax and loss bonds....................................... 9,454 9,454
Other......................................................................... 11,661 8,450
-------- --------
Total gross deferred tax liabilities............................................ 137,019 108,330
-------- --------
Net deferred tax liability...................................................... $118,522 $ 91,805
-------- --------
-------- --------
</TABLE>
Based upon the level of historical taxable income, projections of future
taxable income over the periods in which the deferred tax assets are deductible
and the estimated reversal of future taxable temporary differences, the Company
believes it is more likely than not that it will realize the benefits of these
deductible differences and has not established a valuation allowance at December
31, 1997 and 1996. The Company anticipates that the related deferred tax asset
will be realized based on future profitable business.
Total federal income tax payments during 1997, 1996 and 1995 were $71.8
million, $33.9 million, and $59.8 million, respectively.
6. REINSURANCE
The Company reinsures portions of its risk with other insurance companies
through quota share reinsurance treaties and, where warranted, on a facultative
basis. This process serves to limit the Company's exposure on risks
underwritten. In the event that any or all of the reinsuring companies were
unable to meet their obligations, the Company would be liable for such defaulted
amounts. The Company evaluates the financial condition of its reinsurers and
monitors concentrations of credit risk arising from activities or economic
characteristics of the reinsurers to minimize its exposure to significant losses
from reinsurer insolvencies. The Company holds collateral under reinsurance
agreements in the form of letters of credit and trust agreements in various
amounts with various reinsurers totaling $37.0 million that can be drawn on in
the event of default.
Net premiums earned are presented net of ceded earned premiums of $33.3
million, $23.7 million and $21.9 million for the years ended December 31, 1997,
1996 and 1995, respectively. Loss and loss adjustment expenses incurred are
presented net of ceded losses of $0.2 million, $(0.8) million and $1.1 million
for the years ended December 31, 1997, 1996 and 1995, respectively.
A-12
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
7. LOSS AND LOSS ADJUSTMENT EXPENSES
Activity in the reserve for loss and loss adjustment expenses is summarized
as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Balance at January 1,........................................................ $ 72,616 $ 77,808 $ 98,746
Less reinsurance recoverable............................................... 7,015 (7,672) 14,472
-------- -------- --------
Net balance at January 1,.................................................. 65,601 70,136 84,274
Incurred related to:
Current year................................................................. 1,047 -- 26,681
Prior years.................................................................. 6,492 2,389 (1,207)
Portfolio reserves........................................................... 5,000 -- (33,900)
-------- -------- --------
Total Incurred............................................................... 12,539 2,389 (8,426)
-------- -------- --------
Paid related to:
Current year................................................................. (1,047) -- (197)
Prior years.................................................................. (8,387) (6,924) (5,515)
-------- -------- --------
Total Paid................................................................... (9,434) (6,924) (5,712)
-------- -------- --------
Net balance at December 31,.................................................. 68,706 65,601 70,136
Plus reinsurance recoverable................................................. 8,220 7,015 7,672
-------- -------- --------
Balance at December 31,...................................................... $ 76,926 $ 72,616 $ 77,808
-------- -------- --------
-------- -------- --------
</TABLE>
The changes in incurred portfolio and case reserves principally relates to
business written in prior years. The changes are based upon an evaluation of the
insured portfolio in light of current economic conditions and other relevant
factors.
8. RELATED PARTY TRANSACTIONS
The Company has various agreements with subsidiaries of General Electric
Company ('GE') and GE Capital. These business transactions include appraisal
fees and due diligence costs associated with underwriting structured finance
mortgage-backed security business; payroll and office expenses incurred by the
Company's international branch offices but processed by a GE subsidiary;
investment fees pertaining to the management of the Company's investment
portfolio; and telecommunication service charges. Approximately $4.9 million,
$8.1 million and $3.2 million in expenses were incurred in 1997, 1996 and 1995,
respectively, related to such transactions.
The Company also insured certain non-municipal issues with GE Capital
involvement as sponsor of the insured securitization and/or servicer of the
underlying assets. For some of these issues, GE Capital also provides first loss
protection in the event of default. Gross premiums written on these issues
amounted to $0.5 million in 1997, $0.6 million in 1996, and $1.3 million in
1995. As of December 31, 1997, par outstanding on these deals before reinsurance
was $112.9 million.
The Company insures bond issues and securities in trusts that were
sponsored by affiliates of GE (approximately 1 percent of gross premiums
written) in 1997, 1996 and 1995.
9. COMPENSATION PLANS
Officers and other key employees of the Company participate in the Parent's
incentive compensation, deferred compensation and profit sharing plans. Expenses
incurred by the Company under compensation plans and bonuses amounted to $5.0
million, $4.5 million and $7.5 million in 1997, 1996 and 1995, respectively,
before deduction for related tax benefits.
A-13
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
10. DIVIDENDS
Under New York insurance law, the Company may pay a dividend only from
earned surplus subject to the following limitations: (a) statutory surplus after
such dividend may not be less than the minimum required paid-in capital, which
was $66.4 million in 1997 and 1996, and (b) dividends may not exceed the lesser
of 10 percent of its surplus or 100 percent of adjusted net investment income,
as defined by New York insurance law, for the 12 month period ending on the
preceding December 31, without the prior approval of the Superintendent of the
New York State Insurance Department. At December 31, 1997 and 1996, the amount
of the Company's surplus available for dividends was approximately $124.6
million and $91.8 million, respectively.
During 1997, 1996 and 1995, the Company paid dividends of $0.0, $17.5
million and $25.0 million, respectively.
11. CAPITAL CONTRIBUTION
During 1997, the Parent made a capital contribution of $49.5 million to the
Company.
12. FINANCIAL INSTRUMENTS
Fair Value of Financial Instruments
The following methods and assumptions were used by the Company in
estimating fair values of financial instruments:
Fixed Maturity Securities: Fair values for fixed maturity securities
are based on quoted market prices, if available. If a quoted market price
is not available, fair values is estimated using quoted market prices for
similar securities. Fair value disclosure for fixed maturity securities is
included in the balance sheets and in Note 4.
Short-Term Investments: Short-term investments are carried at cost,
which approximates fair value.
Cash, Receivable for Securities Sold, and Payable for Securities
Purchased: The carrying amounts of these items approximate their fair
values.
The estimated fair values of the Company's financial instruments at
December 31, 1997 and 1996 are as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996
------------------------ ------------------------
CARRYING CARRYING
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Financial Assets
Cash
On hand and in demand accounts............ $ 802 $ 802 $ 860 $ 860
Short-term investments....................... $ 76,039 $ 76,039 $ 73,839 $ 73,839
Fixed maturity securities.................... $2,443,746 $2,443,746 $2,250,549 $2,250,549
</TABLE>
Financial Guaranties: The carrying value of the Company's financial
guaranties is represented by the unearned premium reserve, net of deferred
acquisition costs, and loss and loss adjustment expense reserves. Estimated fair
values of these guaranties are based on amounts currently charged to enter into
similar agreements (net of applicable ceding commissions), discounted cash flows
considering contractual revenues to be received adjusted for expected
prepayments, the present value of future obligations and estimated losses, and
current interest rates. The estimated fair values of such financial guaranties
range between $355.7 million and $382.6 million compared to a carrying value of
$456.8 million as of December 31, 1997 and between $358.7 million and $387.4
million compared to a carrying value of $487.8 million as of December 31, 1996.
A-14
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
12. FINANCIAL INSTRUMENTS--(CONTINUED)
Concentrations of Credit Risk
The Company considers its role in providing insurance to be credit
enhancement rather than credit substitution. The Company insures only those
securities that, in its judgment, are of investment grade quality. The Company
has established and maintains its own underwriting standards that are based on
those aspects of credit that the Company deems important for the particular
category of obligations considered for insurance. Credit criteria include
economic and social trends, debt management, financial management and legal and
administrative factors, the adequacy of anticipated cash flows, including the
historical and expected performance of assets pledged for payment of securities
under varying economic scenarios and underlying levels of protection such as
insurance or overcollateralization.
In connection with underwriting new issues, the Company sometimes requires,
as a condition to insuring an issue, that collateral be pledged or, in some
instances, that a third-party guarantee be provided for a term of the obligation
insured by a party of acceptable credit quality obligated to make payment prior
to any payment by the Company. The types and extent of collateral pledged
varies, but may include residential and commercial mortgages, corporate debt,
government debt and consumer receivables.
As of December 31, 1997, the Company's total insured principal exposure to
credit loss in the event of default by bond issuers was $108.4 billion, net of
reinsurance of $31.6 billion. The Company's insured portfolio as of December 31,
1997 was broadly diversified by geography and bond market sector with no single
debt issuer representing more than 1% of the Company's principal exposure
outstanding, net of reinsurance.
As of December 31, 1997, the composition of principal exposure by type of
issue, net of reinsurance, was as follows (in millions):
<TABLE>
<CAPTION>
NET
PRINCIPAL
OUTSTANDING
-----------
<S> <C>
Municipal:
General obligation...................................................................... $ 57,244.4
Special revenue......................................................................... 35,526.8
Industrial revenue...................................................................... 405.7
Non-municipal........................................................................... 15,268.7
-----------
Total..................................................................................... $ 108,445.6
-----------
-----------
</TABLE>
The Company's gross and net exposure outstanding was $254,441.1 million and
$193,612.9 million, respectively, as of December 31, 1997.
As of December 31, 1997, the composition of principal exposure ceded to
reinsurers was as follows (in millions):
<TABLE>
<CAPTION>
CEDED
PRINCIPAL
OUTSTANDING
-----------
<S> <C>
Reinsurer:
Capital Re............................................................................... $14,909.1
Enhance Re............................................................................... 8,431.7
Other.................................................................................... 8,290.7
-----------
Total................................................................................. $31,631.5
-----------
-----------
</TABLE>
A-15
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
12. FINANCIAL INSTRUMENTS--(CONTINUED)
The Company is authorized to do business in 50 states, the District of
Columbia, and in the United Kingdom and France. Principal exposure outstanding
at December 31, 1997 by state, net of reinsurance, was as follows (in millions):
<TABLE>
<CAPTION>
NET
PRINCIPAL
OUTSTANDING
-----------
<S> <C>
California................................................................................ $ 12,308.1
Pennsylvania.............................................................................. 10,277.8
Florida................................................................................... 10,181.7
New York.................................................................................. 8,945.5
Illinois.................................................................................. 7,203.8
Texas..................................................................................... 6,072.4
Michigan.................................................................................. 4,526.3
New Jersey................................................................................ 4,476.2
Arizona................................................................................... 3,109.2
Ohio...................................................................................... 2,616.1
-----------
Sub-total................................................................................. 69,717.1
Other states.............................................................................. 38,421.7
International............................................................................. 306.8
-----------
Total..................................................................................... $ 108,445.6
-----------
-----------
</TABLE>
13. COMMITMENTS
Total rent expense was $2.4 million, $2.8 million and $2.2 million in 1997,
1996 and 1995, respectively. For each of the next five years and in the
aggregate as of December 31, 1997, the minimum future rental payments under
noncancellable operating leases having remaining terms in excess of one year
approximate (in thousands):
<TABLE>
<CAPTION>
YEAR AMOUNT
- ---- -------
<S> <C>
1998......................................................................................... $ 2,909
1999......................................................................................... 2,909
2000......................................................................................... 2,909
2001......................................................................................... 2,911
2002......................................................................................... --
-------
Total minimum future rental payments......................................................... $11,638
-------
-------
</TABLE>
A-16
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
UNAUDITED INTERIM FINANCIAL STATEMENTS
JUNE 30, 1998
<TABLE>
<S> <C>
Balance Sheets.............................................................................................. B-1
Statements of Income........................................................................................ B-2
Statements of Cash Flows.................................................................................... B-3
Notes to Unaudited Interim Financial Statements............................................................. B-4
</TABLE>
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
BALANCE SHEETS
($ IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Fixed maturity securities, available for sale, at fair value (amortized cost of
$2,439,765 in 1998 and $2,313,458 in 1997)......................................... $ 2,538,259 $2,443,746
Short-term investments, at cost, which approximates market........................... 74,599 76,039
Cash................................................................................. 1,068 802
Accrued investment income............................................................ 38,593 38,927
Reinsurance receivable............................................................... 7,581 8,220
Deferred policy acquisition costs.................................................... 84,225 86,286
Property, plant and equipment net of accumulated depreciation of $6,904 in 1998 and
$17,346 in 1997.................................................................... 2,469 3,142
Prepaid reinsurance premiums......................................................... 146,578 154,208
Prepaid expenses and other assets.................................................... 7,617 21,002
----------- ----------
Total assets.................................................................... $ 2,900,989 $2,832,372
----------- ----------
----------- ----------
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Unearned premiums.................................................................. $ 604,325 $ 628,553
Losses and loss adjustment expenses................................................ 61,170 76,926
Ceded reinsurance payable.......................................................... 1,178 3,932
Accounts payable and accrued expenses.............................................. 42,395 26,352
Current federal income taxes payable............................................... 49,114 19,335
Deferred federal income taxes payable.............................................. 108,190 118,522
Payable for securities purchased................................................... 29,213 5,811
----------- ----------
Total liabilities............................................................... 895,585 879,431
----------- ----------
Stockholder's Equity:
Common stock, par value $1,500 per share at June 30, 1998 and at December 31, 1997:
10,000 shares authorized, issued and outstanding................................ 15,000 15,000
Additional paid-in capital......................................................... 383,511 383,511
Accumulated other comprehensive income, net of tax................................. 63,517 83,935
Retained earnings.................................................................. 1,543,376 1,470,495
----------- ----------
Total stockholder's equity...................................................... 2,005,404 1,952,941
----------- ----------
Total liabilities and stockholder's equity...................................... $ 2,900,989 $2,832,372
----------- ----------
----------- ----------
</TABLE>
See accompanying notes to unaudited interim financial statements
B-1
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
STATEMENTS OF INCOME
($ IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE
30,
------------------------
1998 1997
------------------------
(UNAUDITED)
<S> <C> <C>
REVENUES
Gross premiums written............................................................... $ 46,221 $ 46,339
Ceded premiums....................................................................... (4,818) (11,668)
-------- --------
Net premiums written............................................................... 41,403 34,671
Decrease in net unearned premiums.................................................... 16,654 23,982
-------- --------
Net premiums earned................................................................ 58,057 58,653
Net investment income................................................................ 66,023 63,518
Net realized gains................................................................... 25,773 9,127
-------- --------
Total revenues..................................................................... 149,853 131,298
-------- --------
EXPENSES
Losses and loss adjustment expenses.................................................. 3,381 1,063
Policy acquisition costs............................................................. 10,576 7,525
Other underwriting expenses.......................................................... 9,426 7,949
-------- --------
Total expenses..................................................................... 23,383 16,537
-------- --------
Income before provision for federal income taxes..................................... 126,470 114,761
Provision for federal income taxes................................................... 28,589 24,733
-------- --------
Net income......................................................................... $ 97,881 $ 90,028
-------- --------
-------- --------
</TABLE>
See accompanying notes to unaudited interim financial statements
B-2
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
($ IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE
30,
--------------------------
1998 1997
--------------------------
(UNAUDITED)
<S> <C>
Operating activities:
Net income........................................................................... $ 97,881 $ 90,028
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for deferred income taxes............................................. 663 1,586
Amortization of fixed maturity securities....................................... 1,886 671
Policy acquisition costs deferred............................................... (8,515) (6,979)
Amortization of deferred policy acquisition costs............................... 10,576 7,525
Depreciation of fixed assets.................................................... 732 1,267
Change in reinsurance receivable................................................ 639 (62)
Change in prepaid reinsurance premiums.......................................... 7,630 1,977
Foreign currency translation adjustment......................................... 382 (380)
Change in accrued investment income, prepaid expenses and other assets.......... 13,719 4,090
Change in unearned premiums..................................................... (24,228) (25,959)
Change in losses and loss adjustment expense reserves........................... (15,756) (2,500)
Change in other liabilities..................................................... 13,289 (25,679)
Change in current income taxes payable.......................................... 29,779 (27,908)
Net realized gains on investments............................................... (25,773) (9,127)
---------- ---------
Net cash provided by operating activities.......................................... 102,904 9,250
---------- ---------
Investing activities:
Sales or maturities of fixed maturity securities................................... 431,647 425,102
Purchases of fixed maturity securities............................................. (535,726) (419,674)
Sales or maturities (purchases) of short-term investments, net..................... 1,441 (12,863)
Purchases of property and equipment, net........................................... -- (484)
---------- ---------
Net cash used for investing activities............................................... (102,638) (7,919)
Increase in cash..................................................................... 266 1,331
Cash at beginning of period.......................................................... 802 860
---------- ---------
Cash at end of period................................................................ $ 1,068 $ 2,191
---------- ---------
---------- ---------
</TABLE>
See accompanying notes to unaudited interim financial statements
B-3
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
(UNAUDITED)
1. BASIS OF PRESENTATION
The interim financial statements of Financial Guaranty Insurance Company
(the Company) in this report reflect all adjustments necessary, in the opinion
of management, for a fair statement of (a) results of operations for the six
months ended June 30, 1998 and 1997, (b) the financial position at June 30, 1998
and December 31, 1997, and (c) cash flows for the six months ended June 30, 1998
and 1997.
These interim financial statements should be read in conjunction with the
financial statements and related notes included in the 1997 audited financial
statements.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2. STATUTORY ACCOUNTING PRACTICES
The financial statements are prepared on the basis of GAAP, which differs
in certain respects from accounting practices prescribed or permitted by state
insurance regulatory authorities. The following are the significant ways in
which statutory basis accounting practices differ from GAAP:
(a) premiums are earned directly in proportion to the scheduled
principal and interest payments rather than in proportion to the total
exposure outstanding at any point in time;
(b) policy acquisition costs are charged to current operations as
incurred rather than as related premiums are earned;
(c) a contingency reserve is computed on the basis of statutory
requirements for the security of all policyholders, regardless of whether
loss contingencies actually exist, whereas under GAAP, a reserve is
established based on an ultimate estimate of exposure;
(d) certain assets designated as "non-admitted assets" are charged
directly against surplus but are reflected as assets under GAAP, if
recoverable;
(e) federal income taxes are only provided with respect to taxable
income for which income taxes are currently payable, while under GAAP taxes
are also provided for differences between the financial reporting and tax
bases of assets and liabilities;
(f) purchases of tax and loss bonds are reflected as admitted assets,
while under GAAP they are recorded as federal income tax payments; and
(g) all fixed income investments are carried at amortized cost, rather
than at fair value for securities classified as "Available for Sale" under
GAAP.
B-4
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1998 AND 1997
(UNAUDITED)
2. STATUTORY ACCOUNTING PRACTICES--(CONTINUED)
The following is a reconciliation of the net income and stockholder's
equity of Financial Guaranty prepared on a GAAP basis to the corresponding
amounts reported on a statutory basis for the periods indicated below:
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
----------------------------------------------------
1998 1997
------------------------ ------------------------
NET STOCKHOLDER'S NET STOCKHOLDER'S
INCOME EQUITY INCOME EQUITY
------- ------------- ------- -------------
<S> <C> <C> <C> <C>
GAAP basis amount.................................... $97,881 $ 2,005,404 $90,028 $ 1,783,238
Premium revenue recognition.......................... (6,709) (187,918) (2,158) (178,443)
Deferral of acquisition costs........................ 2,061 (84,225) 545 (91,399)
Contingency reserve.................................. -- (567,350) -- (489,210)
Non-admitted assets.................................. -- (2,090) -- (3,369)
Case-basis losses incurred........................... 1,286 (586) (355) (3,604)
Portfolio loss reserves.............................. 1,400 30,400 -- 24,000
Deferral of income tax............................... 663 73,633 1,586 72,173
Unrealized gains on fixed maturity securities held at
fair value, net of taxes........................... -- (64,021) -- (48,183)
Profit commission.................................... 1,754 (5,635) (266) (6,452)
Contingency reserve tax deduction.................... -- 74,059 -- 95,185
Allocation of tax benefits due to Parent's net
operating loss to the Company...................... 106 11,022 156 10,759
------- ----------- ------- -----------
Statutory basis amount............................... $98,442 $ 1,282,693 $89,536 $ 1,164,695
------- ----------- ------- -----------
------- ----------- ------- -----------
</TABLE>
3. DIVIDENDS
Under New York Insurance Law, the Company may pay a dividend only from
earned surplus subject to the following limitations:
o Statutory surplus after dividends may not be less than the minimum
required paid-in capital, which was $66.4 million in 1997.
o Dividends may not exceed the lesser of 10 percent of its surplus or
100 percent of adjusted net investment income, as defined therein,
for the twelve month period ending on the preceding December 31,
without the prior approval of the Superintendent of the New York
State Insurance Department.
The amount of the Company's surplus available for dividends during 1998 is
approximately $128.3 million.
During 1998, the Company declared dividends of $25.0 million.
4. INCOME TAXES
The Company's effective Federal corporate tax rate (22.6 percent and 21.6
percent for the six months ended June 30, 1998 and 1997, respectively) is less
than the statutory corporate tax rate (35 percent in 1998 and 1997) on ordinary
income due to permanent differences between financial and taxable income,
principally tax-exempt interest.
B-5
<PAGE>
FINANCIAL GUARANTY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1998 AND 1997
(UNAUDITED)
5. REINSURANCE
In accordance with Statement of Financial Accounting Standards No. 113
("SFAS 113"), "Accounting and Reporting for Reinsurance of Short-Duration and
Long-Duration Contracts", the Company reports assets and liabilities relating to
reinsured contracts gross of the effects of reinsurance. Net premiums earned are
shown net of premiums ceded of $12.4 million and $13.6 million, respectively,
for the six months ended June 30, 1998 and 1997.
6. COMPREHENSIVE INCOME
In June 1997, the Financial Accounting Standard Board issued statement
No. 130, "Reporting Comprehensive Income", which requires enterprises to
disclose comprehensive income and its components. Comprehensive income
encompasses all changes in shareholders' equity (except those arising from
transactions with shareholders) and includes net income, net unrealized capital
gains or losses on available-for-sale securities and foreign currency
translation adjustments, net of taxes. This new standard only changes the
presentation of certain information in the financial statements and does not
affect the Company's financial position or results of operations. The following
is a reconciliation of comprehensive income:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30,
----------------------------------------
1998 1997
------------------ ------------------
<S> <C> <C>
Net income............................................................. $ 97,881 $ 90,028
Other comprehensive income:
Change in unrealized investment gains, net of taxes.................. (20,666) 9,023
Change in foreign exchange gains, net of taxes....................... 248 (247)
-------- --------
Comprehensive income................................................... $ 77,463 $ 98,804
-------- --------
-------- --------
</TABLE>
B-6
