<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) March 25, 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) 924-6007
--------------
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
its Home Equity Loan Asset-Backed Certificates, Series 1998-A.
In connection with the offering of the Home Equity Loan Asset-Backed
Certificates, Series 1998-A, Prudential Securities Incorporated prepared certain
materials (the "Computational Materials") some or all of which were distributed
by each of Prudential Securities Incorporated, Bear, Stearns & Co. Inc. and
First Union Capital Markets, a division of Wheat First Securities Corp. (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.
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, insurer of the Offered Certificates. The Financial Statements of
Financial Guaranty Insurance Company 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 99.2.
- --------
* Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Prospectus dated March 25, 1998, and
Prospectus Supplement dated March 25, 1998, of UCFC Acceptance
Corporation, relating to its Home Equity Loan Asset-Backed
Certificates, Series 1998-A.
-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. 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: March 25, 1998
-4-
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Page
- ------- ----
23.1. Consent of KPMG Peat Marwick LLP.
99.1. Computational Materials.
99.2. 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.
/s/ KPMG Peat Marwick LLP
----------------------------
New York, New York
March 25, 1998
<PAGE>
PRELIMINARY
BACKGROUND INFORMATION
UCFC LOAN TRUST 1998-A (fixed-rate collateral only)
---------------------------------------------------
$[131,000,000] Class A-1 FLOATING-RATE CERTIFICATES
(non-SMMEA-eligible)
$[46,000,000] Class A-2 FIXED-RATE CERTIFICATES
(non-SMMEA-eligible)
$[46,000,000] Class A-3 FIXED-RATE CERTIFICATES
(non-SMMEA-eligible)
$[14,000,000] Class A-4 FIXED-RATE CERTIFICATES
(non-SMMEA-eligible)
$[24,000,000] Class A-5 FIXED-RATE CERTIFICATES
(non-SMMEA-eligible)
$[16,000,000] Class A-6 FIXED-RATE CERTIFICATES
(non-SMMEA-eligible)
$[15,500,000] Class A-7 FIXED-RATE CERTIFICATES
(non-SMMEA-eligible)
$[32,500,000] Class A-8 FIXED-RATE CERTIFICATES
Non-Accelerated Senior Bond
(non-SMMEA-eligible)
The information included herein is provided solely by Prudential Securities
Incorporated ("PSI") as underwriter for the UCFC Loan Trust 1998-A transaction,
and not by or as agent for UCFC Acceptance Corp. or any of its affiliates
(collectively, the "Depositor"). The Depositor has not prepared, reviewed or
participated in the preparation hereof, is not responsible for the accuracy
hereof and has not authorized the dissemination hereof. The analysis in this
report is accurate to the best of PSI's knowledge and is based on information
provided by the Depositor. PSI makes no representations as to the accuracy of
such information provided by the Depositor. All opinions and conclusions in this
report reflect PSI's judgment 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 opinions
expressed shall be construed to be, or constitute, an offer to sell or buy or a
solicitation of an offer to sell or buy any securities, commodities or
derivative instruments mentioned herein. 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>
UCFC Loan Trust 1998-A -- Home Equity Loan Asset-Backed Certificates
UCFC LOAN TRUST 1998-A PRICING INFORMATION
--------------------------------------------------------
(FIXED-RATE COLLATERAL ONLY)
UCFC Loan Trust 1998-A Lead Manager: Prudential Securities Incorporated
Co-Manager: First Union Capital Markets Group
Co-Manager: Bear, Stearns & Co. Inc.
<TABLE>
<CAPTION>
Class: A-1 A-2 A-3 A-4 A-5
<S> <C> <C> <C> <C> <C>
Approximate
Face Amount: [131,000,000] [46,000,000] [46,000,000] [14,000,000] [24,000,000]
Coupon: 1M LIBOR + TBD bps TBD TBD TBD TBD
Price: TBD TBD TBD TBD TBD
Yield: TBD TBD TBD TBD TBD
Spread: TBD TBD TBD TBD TBD
Exp Avg Life
to Maturity: [0.899 2.126 3.110 4.107 5.046]
Exp Avg Life
to 10% Call: [0.899 2.126 3.110 4.107 5.046]
Exp 1st Prin Pmt: [4/15/98 12/15/99 10/15/00 01/15/02 08/15/02]
Exp Mat: [12/15/99 10/15/00 01/15/02 08/15/02 02/15/04]
Exp Mat to 10% Call: [12/15/99 10/15/00 01/15/02 08/15/02 02/15/04]
Stated Mat: [07/15/11 03/15/14 01/15/18 09/15/19 04/15/24]
Expected
Rating: AAA/Aaa/AAA AAA/Aaa/AAA AAA/Aaa/AAA AAA/Aaa/AAA AAA/Aaa/AAA
Pricing Speed: [25]% HEP [25]% HEP [25]% HEP [25]% HEP [25]% HEP
Pricing Date: TBD TBD TBD TBD TBD
Investor
Settle Date: 03/30/98 03/30/98 03/30/98 03/30/98 03/30/98
Pmt Delay: 0 days 14 days 14 days 14 days 14 days
Cut-off Date: 03/01/98 03/01/98 03/01/98 03/01/98 03/01/98
Dated Date: 03/27/98 03/01/98 03/01/98 03/01/98 03/01/98
Int Pmt: actual/360 30/360 30/360 30/360 30/360
Pmt Terms: Monthly Monthly Monthly Monthly Monthly
1st Int. Pmt Date: 04/15/98 04/15/98 04/15/98 04/15/98 04/15/98
Collateral Type: Fixed-Rate Fixed-Rate Fixed-Rate Fixed-Rate Fixed-Rate
SMMEA
Eligibility: non-SMMEA non-SMMEA non-SMMEA non-SMMEA non-SMMEA
</TABLE>
- --------------------------------------------------------------------------------
* The Pass-Through Rate on the Class A-1 Certificates will equal to the lesser
of:
1) One Month LIBOR + TBD bps
2) Net Funds Cap
Net Funds Cap: A rate equal to the weighted of the Mortgage Rates on the
Home Equity Loans less [0.646]% per annum for servicing fee,
trustee fee and certificate insurer premium.
THIS COLLATERAL TERMSHEET SUPERSEDES ANY PREVIOUS COLLATERAL
TERMSHEETS, AND WILL BE SUPERSEDED BY THE COLLATERAL INFORMATION IN THE
PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
<PAGE>
UCFC Loan Trust 1998-A -- Home Equity Loan Asset-Backed Certificates
UCFC LOAN TRUST 1998-A PRICING INFORMATION (continued)
--------------------------------------------------------
(FIXED-RATE COLLATERAL ONLY)
<TABLE>
<CAPTION>
Class: A-6 A-7 A-8
(NAS BOND)
<S> <C> <C> <C>
Approximate
Face Amount: [16,000,000] [15,500,000] [32,500,000]
Coupon: TBD TBD * TBD
Price: TBD TBD TBD
Yield: TBD TBD TBD
Spread: TBD TBD TBD
Exp Avg Life to Maturity: [7.159 11.375 6.326]
Exp Avg Life to 10% call: [6.832 7.542 6.100]
Exp 1st Prin Pmt: [02/15/04 5/15/07 04/15/01]
(To Maturity)
Exp 1st Prin Pmt: [02/15/04 10/15/05 04/15/01]
(To Call)
Exp Mat: [05/15/07 08/15/13 06/15/13]
Exp Mat to 10% call: [10/15/05 10/15/05 10/15/05]
Stated Mat: [05/15/26 7/15/29 7/15/29]
Expected Rating: AAA/Aaa/AAA AAA/Aaa/AAA AAA/Aaa/AAA
Pricing Speed: [25]% HEP [25]% HEP [25]% HEP
Pricing Date: TBD TBD TBD
Investor Settle Date: 03/30/98 03/30/98 03/30/98
Pmt Delay: 14 days 14 days 14 days
Cut-off Date: 03/01/98 03/01/98 03/01/98
Dated Date: 03/01/98 03/01/98 03/01/98
Int Pmt: 30/360 30/360 30/360
Pmt Terms: Monthly Monthly Monthly
1st Int. Pmt Date: 04/15/98 04/15/98 04/15/98
Collateral Type: Fixed-Rate Fixed-Rate fixed-rate
SMMEA Eligibility: non-SMMEA non-SMMEA non-SMMEA
</TABLE>
* Coupon steps up by 50 bps if optional clean-up call is not exercised.
- --------------------------------------------------------------------------------
Principal Paydown: 1) To the Class A-8 Certificateholders -- the Class
A-8 Principal Distribution Amount
2) To the Class A-1 through A-7 Certificates, in
sequential order
Class A-8 Principal
Disbribution Amount: The applicable Class A-8 Principal Percentage multiplied
by the Class A-8 Principal Pro Rata Distribution Amount
for such Payment Date.
THE CLASS A-8 PRINCIPAL PERCENTAGE
--------------------------------
April 1998 to March 2001 ==} 0%
April 2001 to March 2003 ==} 45%
April 2003 to March 2004 ==} 80%
April 2004 to March 2005 ==} 100%
April 2005 and after ==} 300%
THIS COLLATERAL TERMSHEET SUPERSEDES ANY PREVIOUS COLLATERAL
TERMSHEETS, AND WILL BE SUPERSEDED BY THE COLLATERAL INFORMATION IN THE
PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
<PAGE>
UCFC Loan Trust 1998-A -- Home Equity Loan Asset-Backed Certificates
SUMMARY OF TERMS
--------------------------
Title of Securities: UCFC Loan Trust 1998-A, Home Equity Loan Asset-Backed
Certificates Class A-1, A-2, A-3, A-4, A-5, A-6, A-7,
and A-8 Certificates.
Depositor: UCFC Acceptance Corporation.
Servicer: United Companies Lending Corporation.
Originators: The Home Equity Loans were, and any Subsequent Loans
will be, originated, either directly or through
correspondents or mortgage brokers, or purchased and
re-underwritten, by United Companies and certain
subsidiaries and affiliates thereof.
Trustee: Bankers Trust Company of California, N.A.
Aggregate
Certificate Balance: $[325,000,000]
Securities Offered: 100% FGIC-guaranteed, pass-through certificates.
Offering: Public shelf offering -- a prospectus and prospectus
supplement will be distributed after pricing.
Pricing Date: TBD
Investor
Settlement Date: March 30, 1998
Form of Certificates: Book-Entry form, same-day funds through DTC, Euroclear
and CEDEL
Pass-Through Rate: 1-Month LIBOR + TBD bps on Class A-1 Certificates *
TBD % on Class A-2 Certificates
TBD % on Class A-3 Certificates
TBD % on Class A-4 Certificates
TBD % on Class A-5 Certificates
TBD % on Class A-6 Certificates
TBD % on Class A-7 Certificates **
TBD % on Class A-8 Certificates (NAS Bond)
* Subject to the Net Funds Cap.
** Coupon steps up by 50 bps if optional clean-up call
is not exercised.
Prepayment
Assumption: 25% HEP (2.5% CPR in month 1 with monthly incremental
increases of 2.5% CPR until the speed reaches 25% CPR
in month 10 based on loan seasoning.) This means that
seasoned loans will start further up on the prepayment
curve.
Distribution Date: The 15th day of each month (or, if any such date
is not a business day, the first business day
thereafter) commencing in April 1998. The payment delay
will be zero days for the Class A-1 and 14 days for the
Class A-2, A-3, A-4, A-5, A-6, A-7 and A-8
Certificates.
Interest Accrual
Period: The initial interest accrual period on the Class A-1
Certificates will be from March 27th until April 14th.
In future periods, interest will accrue on the Class
A-1 Certificates at the applicable Pass-Through Rate
from the preceeding Distribution Date to and including
the day prior to the current Distribution Date.
Interest on the Class A-2 through A-8 Certificates will
accrue from the first day of the preceeding month until
the 30th day of the preceeding month.
Optional
Cleanup Call: The Servicer will have the right to purchase the
Home Equity Loans on any Remittance Date when the
aggregate Loan Balance of the Home Equity Loans has
declined to 10% or less of an amount equal to the
aggregate balances of the Home Equity Loans as of the
Cut-Off Date including the Subsequent Loans.
THIS COLLATERAL TERMSHEET SUPERSEDES ANY PREVIOUS COLLATERAL
TERMSHEETS, AND WILL BE SUPERSEDED BY THE COLLATERAL INFORMATION IN THE
PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
<PAGE>
UCFC Loan Trust 1998-A -- Home Equity Loan Asset-Backed Certificates
Pre-Funding Account: On the closing date, approximately $[68.3 MM] will be
deposited in a pre-funding account for the purchase of
additional fixed-rate mortgage loans. From the closing
date until [June] 15, 1998, the Trust intends to
purchase mortgage loans up to the entire pre-funding
amount. Funds remaining the pre-funding account that
total less than $100,000 after this period will be
distributed to investors in the Class A-1 Certificates
as a prepayment on [June] 15, 1998. If the funds
remaining in the pre-funding account total greater than
$100,000 after this period, the funds will be
distributed on a pro-rata basis to the investors in the
Class A-1 through A-8 Certificates as a prepayment on
[June] 15, 1998. The additional mortgage loans will be
subject to certain aggregate group characteristics that
will be more fully described in the Prospectus
Supplement.
Certificate Insurer: Financial Guaranty Insurance Company ("FGIC"). FGIC's
claims-paying ability is rated "AAA" by Standard &
Poor's, "Aaa" by Moody's Investors Service and "AAA" by
Fitch Investors Service, Inc.
Certificate Insurance
Policy: The Certificate Insurance Policy will provide 100%
coverage of timely interest and ultimate principal
payments due on the Certificates.
Credit Enhancement: A combination of:
(i) the use of Net Excess Cashflow to create
overcollateralization; and
(ii) the Certificate Insurance Policy from FGIC.
Note: The required maintenance levels of
overcollateralization will be sized by the surety
provider.
Servicing Fee: 50 basis points per annum.
ERISA Considerations: Subject to the considerations and conditions
described in the Prospectus Supplement, it is
expected that the Certificates may be purchased by
employee benefit plans that are subject to ERISA.
Taxation: REMIC
Legal Investment: None of the Certificates will be SMMEA-eligible.
Certificates Ratings: "AAA" by S&P, "Aaa" by Moody's, and "AAA" by Fitch for
the Class A-1, A-2, A-3, A-4, A-5, A-6, A-7 and A-8
Certificates.
THIS COLLATERAL TERMSHEET SUPERSEDES ANY PREVIOUS COLLATERAL
TERMSHEETS, AND WILL BE SUPERSEDED BY THE COLLATERAL INFORMATION IN THE
PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
<PAGE>
<TABLE>
<S> <C> <C>
CURRENT BALANCE: $131,000,000.00 DATED DATE: 03/27/98
CURRENT COUPON: 5.798% ucfc98af FIRST PAYMENT: 04/15/98
FACTOR: 1.0000000000 TOTAL CLASSES: 8
ORIGINAL BALANCE: $131,000,000.00 BOND A1 DISCOUNT MARGIN ACT/360 TABLE YIELD TABLE DATE: 03/30/98
</TABLE>
ASSUMED CONSTANT LIBOR-1M 5.6875
**** To Maturity ****
<TABLE>
<CAPTION>
PRICING SPEED
25.HEP 15.0HEP 18.0HEP 22.0HEP 28.0HEP 32.0HEP 35.0HEP
PRICE
<S> <C> <C> <C> <C> <C> <C> <C>
99-24 39.339 31.093 33.728 37.015 41.539 44.292 46.226
99-24+ 37.564 29.834 32.304 35.386 39.626 42.207 44.020
99-25 35.790 28.576 30.881 33.757 37.714 40.123 41.814
99-25+ 34.015 27.318 29.458 32.128 35.802 38.038 39.609
99-26 32.242 26.060 28.036 30.500 33.891 35.955 37.404
99-26+ 30.468 24.803 26.613 28.872 31.980 33.871 35.199
99-27 28.695 23.546 25.191 27.244 30.069 31.788 32.996
99-27+ 26.923 22.289 23.770 25.617 28.159 29.706 30.792
99-28 25.150 21.032 22.348 23.990 26.249 27.624 28.589
99-28+ 23.378 19.776 20.927 22.363 24.339 25.542 26.387
99-29 21.607 18.520 19.507 20.737 22.430 23.461 24.185
99-29+ 19.836 17.264 18.086 19.111 20.522 21.380 21.983
99-30 18.065 16.009 16.666 17.486 18.614 19.300 19.782
99-30+ 16.295 14.754 15.246 15.861 16.706 17.220 17.582
99-31 14.525 13.499 13.827 14.236 14.798 15.141 15.381
99-31+ 12.755 12.244 12.408 12.611 12.891 13.062 13.182
100-00 10.986 10.990 10.989 10.987 10.985 10.983 10.983
100-00+ 9.217 9.736 9.570 9.363 9.079 8.905 8.784
100-01 7.449 8.482 8.152 7.740 7.173 6.828 6.585
100-01+ 5.681 7.229 6.734 6.117 5.268 4.751 4.388
100-02 3.913 5.976 5.316 4.494 3.363 2.674 2.190
First Payment 0.042 0.042 0.042 0.042 0.042 0.042 0.042
Average Life 0.899 1.290 1.133 0.983 0.832 0.761 0.717
Last Payment 1.708 2.708 2.292 1.958 1.542 1.375 1.292
Mod.Dur. @ 100-00 0.846 1.194 1.056 0.922 0.785 0.720 0.680
</TABLE>
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
THIS STRUCTURAL TERMSHEET SUPERSEDES ANY PREVIOUS STRUCTURAL
TERMSHEETS, MAY BE SUPERSEDED BY FUTURE STRUCTURAL INFORMATION AND WILL
BE SUPERSEDED BY THE STRUCTURAL INFORMATION IN THE PROSPECTUS
SUPPLEMENT.
<PAGE>
<TABLE>
<S> <C> <C>
CURRENT BALANCE: $46,000,000.00 DATED DATE: 03/01/98
COUPON: 6.170% ucfc98af FIRST PAYMENT: 04/15/98
FACTOR: 1.0000000000 TOTAL CLASSES: 8
ORIGINAL BALANCE: $46,000,000.00 BOND A2 BE-YIELD TABLE YIELD TABLE DATE: 03/30/98
</TABLE>
PREPAYMENT SPEED
**** To Maturity ****
<TABLE>
<CAPTION>
PRICING SPEED
25.HEP 15.0HEP 18.0HEP 22.0HEP 28.0HEP 32.0HEP 35.0HEP
PRICE
<S> <C> <C> <C> <C> <C> <C> <C>
99-24 6.255 6.253 6.254 6.254 6.255 6.256 6.257
99-24+ 6.247 6.248 6.248 6.247 6.247 6.246 6.246
99-25 6.239 6.243 6.241 6.240 6.238 6.236 6.235
99-25+ 6.231 6.237 6.235 6.233 6.229 6.226 6.224
99-26 6.223 6.232 6.229 6.225 6.220 6.216 6.213
99-26+ 6.215 6.227 6.223 6.218 6.211 6.206 6.203
99-27 6.206 6.221 6.217 6.211 6.202 6.196 6.192
99-27+ 6.198 6.216 6.211 6.204 6.193 6.186 6.181
99-28 6.190 6.211 6.204 6.196 6.184 6.176 6.170
99-28+ 6.182 6.205 6.198 6.189 6.175 6.166 6.160
99-29 6.174 6.200 6.192 6.182 6.167 6.157 6.149
99-29+ 6.166 6.195 6.186 6.175 6.158 6.147 6.138
99-30 6.158 6.189 6.180 6.167 6.149 6.137 6.127
99-30+ 6.150 6.184 6.174 6.160 6.140 6.127 6.117
99-31 6.142 6.179 6.168 6.153 6.131 6.117 6.106
99-31+ 6.134 6.174 6.161 6.146 6.122 6.107 6.095
100-00 6.126 6.168 6.155 6.138 6.113 6.097 6.084
100-00+ 6.118 6.163 6.149 6.131 6.105 6.087 6.074
100-01 6.110 6.158 6.143 6.124 6.096 6.077 6.063
100-01+ 6.102 6.152 6.137 6.117 6.087 6.067 6.052
100-02 6.094 6.147 6.131 6.109 6.078 6.057 6.041
100-02+ 6.086 6.142 6.125 6.102 6.069 6.047 6.031
100-03 6.078 6.137 6.118 6.095 6.060 6.037 6.020
100-03+ 6.070 6.131 6.112 6.088 6.052 6.027 6.009
100-04 6.062 6.126 6.106 6.081 6.043 6.017 5.999
100-04+ 6.054 6.121 6.100 6.073 6.034 6.008 5.988
100-05 6.046 6.115 6.094 6.066 6.025 5.998 5.977
100-05+ 6.038 6.110 6.088 6.059 6.016 5.988 5.966
100-06 6.029 6.105 6.082 6.052 6.007 5.978 5.956
100-06+ 6.021 6.100 6.076 6.044 5.999 5.968 5.945
100-07 6.013 6.094 6.069 6.037 5.990 5.958 5.934
100-07+ 6.005 6.089 6.063 6.030 5.981 5.948 5.924
First Payment 1.708 2.708 2.292 1.958 1.542 1.375 1.292
Average Life 2.126 3.354 2.848 2.382 1.919 1.699 1.565
Last Payment 2.542 4.125 3.458 2.875 2.292 2.042 1.875
Mod.Dur. @ 100-00 1.932 2.936 2.532 2.148 1.756 1.565 1.448
</TABLE>
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
THIS STRUCTURAL TERMSHEET SUPERSEDES ANY PREVIOUS STRUCTURAL
TERMSHEETS, MAY BE SUPERSEDED BY FUTURE STRUCTURAL INFORMATION AND WILL
BE SUPERSEDED BY THE STRUCTURAL INFORMATION IN THE PROSPECTUS
SUPPLEMENT.
<PAGE>
<TABLE>
<S> <C> <C>
CURRENT BALANCE: $46,000,000.00 DATED DATE: 03/01/98
COUPON: 6.305% ucfc98af FIRST PAYMENT: 04/15/98
FACTOR: 1.0000000000 TOTAL CLASSES: 8
ORIGINAL BALANCE: $46,000,000.00 BOND A3 BE-YIELD TABLE YIELD TABLE DATE: 03/30/98
</TABLE>
PREPAYMENT SPEED
**** To Maturity ****
<TABLE>
<CAPTION>
PRICING SPEED
25.HEP 15.0HEP 18.0HEP 22.0HEP 28.0HEP 32.0HEP 35.0HEP
PRICE
<S> <C> <C> <C> <C> <C> <C> <C>
99-24 6.390 6.389 6.390 6.390 6.390 6.390 6.391
99-24+ 6.384 6.386 6.385 6.385 6.384 6.383 6.383
99-25 6.379 6.382 6.381 6.380 6.377 6.376 6.375
99-25+ 6.373 6.378 6.377 6.375 6.371 6.369 6.367
99-26 6.367 6.375 6.373 6.370 6.365 6.362 6.359
99-26+ 6.362 6.371 6.368 6.365 6.358 6.354 6.351
99-27 6.356 6.368 6.364 6.360 6.352 6.347 6.344
99-27+ 6.350 6.364 6.360 6.354 6.346 6.340 6.336
99-28 6.344 6.360 6.356 6.349 6.339 6.333 6.328
99-28+ 6.339 6.357 6.351 6.344 6.333 6.325 6.320
99-29 6.333 6.353 6.347 6.339 6.327 6.318 6.312
99-29+ 6.327 6.349 6.343 6.334 6.320 6.311 6.304
99-30 6.322 6.346 6.339 6.329 6.314 6.304 6.297
99-30+ 6.316 6.342 6.335 6.324 6.308 6.297 6.289
99-31 6.310 6.338 6.330 6.319 6.301 6.289 6.281
99-31+ 6.305 6.335 6.326 6.314 6.295 6.282 6.273
100-00 6.299 6.331 6.322 6.309 6.289 6.275 6.265
100-00+ 6.293 6.327 6.318 6.304 6.282 6.268 6.257
100-01 6.288 6.324 6.313 6.299 6.276 6.261 6.250
100-01+ 6.282 6.320 6.309 6.294 6.269 6.253 6.242
100-02 6.276 6.317 6.305 6.289 6.263 6.246 6.234
100-02+ 6.271 6.313 6.301 6.284 6.257 6.239 6.226
100-03 6.265 6.309 6.297 6.279 6.250 6.232 6.218
100-03+ 6.259 6.306 6.292 6.274 6.244 6.225 6.211
100-04 6.254 6.302 6.288 6.269 6.238 6.217 6.203
100-04+ 6.248 6.298 6.284 6.264 6.231 6.210 6.195
100-05 6.242 6.295 6.280 6.259 6.225 6.203 6.187
100-05+ 6.237 6.291 6.275 6.254 6.219 6.196 6.179
100-06 6.231 6.287 6.271 6.249 6.212 6.189 6.172
100-06+ 6.225 6.284 6.267 6.244 6.206 6.181 6.164
100-07 6.219 6.280 6.263 6.239 6.200 6.174 6.156
100-07+ 6.214 6.277 6.259 6.234 6.193 6.167 6.148
First Payment 2.542 4.125 3.458 2.875 2.292 2.042 1.875
Average Life 3.110 5.173 4.342 3.555 2.754 2.398 2.196
Last Payment 3.792 6.458 5.375 4.375 3.375 2.792 2.542
Mod.Dur. @ 100-00 2.735 4.271 3.677 3.084 2.450 2.158 1.988
</TABLE>
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
THIS STRUCTURAL TERMSHEET SUPERSEDES ANY PREVIOUS STRUCTURAL
TERMSHEETS, MAY BE SUPERSEDED BY FUTURE STRUCTURAL INFORMATION AND WILL
BE SUPERSEDED BY THE STRUCTURAL INFORMATION IN THE PROSPECTUS
SUPPLEMENT.
<PAGE>
<TABLE>
<S> <C> <C>
CURRENT BALANCE: $14,000,000.00 DATED DATE: 03/01/98
COUPON: 6.400% ucfc98af FIRST PAYMENT: 04/15/98
FACTOR: 1.0000000000 TOTAL CLASSES: 8
ORIGINAL BALANCE: $14,000,000.00 BOND A4 BE-YIELD TABLE YIELD TABLE DATE: 03/30/98
</TABLE>
PREPAYMENT SPEED
**** To Maturity ****
<TABLE>
<CAPTION>
PRICING SPEED
25.HEP 15.0HEP 18.0HEP 22.0HEP 28.0HEP 32.0HEP 35.0HEP
PRICE
<S> <C> <C> <C> <C> <C> <C> <C>
99-24 6.486 6.486 6.486 6.486 6.486 6.486 6.486
99-24+ 6.482 6.483 6.483 6.482 6.481 6.480 6.480
99-25 6.477 6.480 6.479 6.478 6.476 6.475 6.473
99-25+ 6.473 6.478 6.476 6.474 6.471 6.469 6.467
99-26 6.468 6.475 6.473 6.470 6.466 6.463 6.460
99-26+ 6.464 6.472 6.470 6.466 6.461 6.457 6.454
99-27 6.459 6.469 6.466 6.462 6.456 6.451 6.448
99-27+ 6.455 6.466 6.463 6.458 6.451 6.445 6.441
99-28 6.451 6.464 6.460 6.454 6.446 6.440 6.435
99-28+ 6.446 6.461 6.456 6.450 6.441 6.434 6.428
99-29 6.442 6.458 6.453 6.447 6.436 6.428 6.422
99-29+ 6.437 6.455 6.450 6.443 6.431 6.422 6.415
99-30 6.433 6.452 6.446 6.439 6.427 6.416 6.409
99-30+ 6.428 6.450 6.443 6.435 6.422 6.411 6.403
99-31 6.424 6.447 6.440 6.431 6.417 6.405 6.396
99-31+ 6.419 6.444 6.436 6.427 6.412 6.399 6.390
100-00 6.415 6.441 6.433 6.423 6.407 6.393 6.383
100-00+ 6.411 6.438 6.430 6.419 6.402 6.387 6.377
100-01 6.406 6.436 6.427 6.415 6.397 6.382 6.370
100-01+ 6.402 6.433 6.423 6.411 6.392 6.376 6.364
100-02 6.397 6.430 6.420 6.407 6.387 6.370 6.358
100-02+ 6.393 6.427 6.417 6.403 6.382 6.364 6.351
100-03 6.388 6.424 6.413 6.399 6.377 6.358 6.345
100-03+ 6.384 6.422 6.410 6.395 6.372 6.352 6.338
100-04 6.380 6.419 6.407 6.391 6.367 6.347 6.332
100-04+ 6.375 6.416 6.404 6.387 6.362 6.341 6.326
100-05 6.371 6.413 6.400 6.383 6.357 6.335 6.319
100-05+ 6.366 6.410 6.397 6.379 6.352 6.329 6.313
100-06 6.362 6.408 6.394 6.375 6.347 6.324 6.306
100-06+ 6.357 6.405 6.390 6.372 6.342 6.318 6.300
100-07 6.353 6.402 6.387 6.368 6.337 6.312 6.293
100-07+ 6.348 6.399 6.384 6.364 6.332 6.306 6.287
First Payment 3.792 6.458 5.375 4.375 3.375 2.792 2.542
Average Life 4.107 7.138 5.817 4.699 3.621 3.038 2.720
Last Payment 4.375 8.042 6.292 5.042 3.875 3.292 2.875
Mod.Dur. @ 100-00 3.501 5.552 4.708 3.934 3.133 2.676 2.420
</TABLE>
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
THIS STRUCTURAL TERMSHEET SUPERSEDES ANY PREVIOUS STRUCTURAL
TERMSHEETS, MAY BE SUPERSEDED BY FUTURE STRUCTURAL INFORMATION AND WILL
BE SUPERSEDED BY THE STRUCTURAL INFORMATION IN THE PROSPECTUS
SUPPLEMENT.
<PAGE>
<TABLE>
<S> <C> <C>
CURRENT BALANCE: $24,000,000.00 DATED DATE: 03/01/98
COUPON: 6.495% ucfc98af FIRST PAYMENT: 04/15/98
FACTOR: 1.0000000000 TOTAL CLASSES: 8
ORIGINAL BALANCE: $24,000,000.00 BOND A5 BE-YIELD TABLE YIELD TABLE DATE: 03/30/98
</TABLE>
PREPAYMENT SPEED
**** To Maturity ****
<TABLE>
<CAPTION>
PRICING SPEED
25.HEP 15.0HEP 18.0HEP 22.0HEP 28.0HEP 32.0HEP 35.0HEP
PRICE
<S> <C> <C> <C> <C> <C> <C> <C>
99-24 6.583 6.583 6.583 6.583 6.583 6.583 6.583
99-24+ 6.579 6.581 6.580 6.580 6.579 6.578 6.577
99-25 6.575 6.579 6.578 6.576 6.574 6.573 6.572
99-25+ 6.572 6.576 6.575 6.573 6.570 6.568 6.566
99-26 6.568 6.574 6.572 6.570 6.566 6.563 6.561
99-26+ 6.564 6.572 6.570 6.566 6.562 6.559 6.556
99-27 6.560 6.569 6.567 6.563 6.558 6.554 6.550
99-27+ 6.557 6.567 6.564 6.560 6.553 6.549 6.545
99-28 6.553 6.565 6.562 6.557 6.549 6.544 6.540
99-28+ 6.549 6.563 6.559 6.553 6.545 6.539 6.534
99-29 6.545 6.560 6.557 6.550 6.541 6.535 6.529
99-29+ 6.542 6.558 6.554 6.547 6.537 6.530 6.523
99-30 6.538 6.556 6.551 6.543 6.532 6.525 6.518
99-30+ 6.534 6.554 6.549 6.540 6.528 6.520 6.513
99-31 6.530 6.551 6.546 6.537 6.524 6.515 6.507
99-31+ 6.527 6.549 6.543 6.533 6.520 6.511 6.502
100-00 6.523 6.547 6.541 6.530 6.516 6.506 6.497
100-00+ 6.519 6.545 6.538 6.527 6.512 6.501 6.491
100-01 6.516 6.542 6.535 6.524 6.507 6.496 6.486
100-01+ 6.512 6.540 6.533 6.520 6.503 6.491 6.481
100-02 6.508 6.538 6.530 6.517 6.499 6.487 6.475
100-02+ 6.504 6.536 6.527 6.514 6.495 6.482 6.470
100-03 6.501 6.533 6.525 6.510 6.491 6.477 6.464
100-03+ 6.497 6.531 6.522 6.507 6.487 6.472 6.459
100-04 6.493 6.529 6.519 6.504 6.482 6.467 6.454
100-04+ 6.489 6.527 6.517 6.501 6.478 6.463 6.448
100-05 6.486 6.524 6.514 6.497 6.474 6.458 6.443
100-05+ 6.482 6.522 6.512 6.494 6.470 6.453 6.438
100-06 6.478 6.520 6.509 6.491 6.466 6.448 6.432
100-06+ 6.475 6.517 6.506 6.487 6.461 6.443 6.427
100-07 6.471 6.515 6.504 6.484 6.457 6.439 6.422
100-07+ 6.467 6.513 6.501 6.481 6.453 6.434 6.416
First Payment 4.375 8.042 6.292 5.042 3.875 3.292 2.875
Average Life 5.046 9.523 7.732 5.872 4.418 3.771 3.331
Last Payment 5.875 11.125 9.458 6.875 5.042 4.292 3.875
Mod.Dur. @ 100-00 4.165 6.873 5.874 4.725 3.719 3.239 2.900
</TABLE>
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
THIS STRUCTURAL TERMSHEET SUPERSEDES ANY PREVIOUS STRUCTURAL
TERMSHEETS, MAY BE SUPERSEDED BY FUTURE STRUCTURAL INFORMATION AND WILL
BE SUPERSEDED BY THE STRUCTURAL INFORMATION IN THE PROSPECTUS
SUPPLEMENT.
<PAGE>
<TABLE>
<S> <C> <C>
CURRENT BALANCE: $16,000,000.00 DATED DATE: 03/01/98
COUPON: 6.740% ucfc98af FIRST PAYMENT: 04/15/98
FACTOR: 1.0000000000 TOTAL CLASSES: 8
ORIGINAL BALANCE: $16,000,000.00 BOND A6 BE-YIELD TABLE YIELD TABLE DATE: 03/30/98
</TABLE>
PREPAYMENT SPEED
**** To Maturity ****
<TABLE>
<CAPTION>
PRICING SPEED
25.HEP 15.0HEP 18.0HEP 22.0HEP 28.0HEP 32.0HEP 35.0HEP
PRICE
<S> <C> <C> <C> <C> <C> <C> <C>
99-24 6.833 6.834 6.834 6.833 6.833 6.832 6.832
99-24+ 6.830 6.832 6.832 6.831 6.829 6.828 6.828
99-25 6.827 6.830 6.829 6.829 6.826 6.824 6.823
99-25+ 6.825 6.828 6.827 6.826 6.823 6.820 6.819
99-26 6.822 6.826 6.825 6.824 6.819 6.817 6.815
99-26+ 6.819 6.824 6.823 6.821 6.816 6.813 6.810
99-27 6.816 6.822 6.821 6.819 6.813 6.809 6.806
99-27+ 6.813 6.820 6.819 6.816 6.809 6.805 6.801
99-28 6.810 6.818 6.817 6.814 6.806 6.801 6.797
99-28+ 6.807 6.817 6.815 6.812 6.803 6.797 6.793
99-29 6.805 6.815 6.813 6.809 6.799 6.793 6.788
99-29+ 6.802 6.813 6.811 6.807 6.796 6.789 6.784
99-30 6.799 6.811 6.808 6.804 6.792 6.785 6.780
99-30+ 6.796 6.809 6.806 6.802 6.789 6.781 6.775
99-31 6.793 6.807 6.804 6.799 6.786 6.777 6.771
99-31+ 6.790 6.805 6.802 6.797 6.782 6.773 6.767
100-00 6.788 6.803 6.800 6.795 6.779 6.770 6.762
100-00+ 6.785 6.801 6.798 6.792 6.776 6.766 6.758
100-01 6.782 6.799 6.796 6.790 6.772 6.762 6.754
100-01+ 6.779 6.797 6.794 6.787 6.769 6.758 6.749
100-02 6.776 6.796 6.792 6.785 6.766 6.754 6.745
100-02+ 6.773 6.794 6.790 6.782 6.762 6.750 6.741
100-03 6.771 6.792 6.788 6.780 6.759 6.746 6.736
100-03+ 6.768 6.790 6.785 6.778 6.756 6.742 6.732
100-04 6.765 6.788 6.783 6.775 6.752 6.738 6.728
100-04+ 6.762 6.786 6.781 6.773 6.749 6.734 6.724
100-05 6.759 6.784 6.779 6.770 6.746 6.730 6.719
100-05+ 6.756 6.782 6.777 6.768 6.742 6.727 6.715
100-06 6.754 6.780 6.775 6.766 6.739 6.723 6.711
100-06+ 6.751 6.778 6.773 6.763 6.736 6.719 6.706
100-07 6.748 6.777 6.771 6.761 6.732 6.715 6.702
100-07+ 6.745 6.775 6.769 6.758 6.729 6.711 6.698
First Payment 5.875 11.125 9.458 6.875 5.042 4.292 3.875
Average Life 7.159 12.406 10.798 8.805 5.813 4.806 4.267
Last Payment 9.125 13.708 12.292 10.375 6.792 5.458 4.792
Mod.Dur. @ 100-00 5.477 8.136 7.420 6.415 4.651 3.972 3.587
**To CAll**
Average Life 6.832 11.501 9.976 8.210 5.813 4.806 4.267
</TABLE>
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
THIS STRUCTURAL TERMSHEET SUPERSEDES ANY PREVIOUS STRUCTURAL
TERMSHEETS, MAY BE SUPERSEDED BY FUTURE STRUCTURAL INFORMATION AND WILL
BE SUPERSEDED BY THE STRUCTURAL INFORMATION IN THE PROSPECTUS
SUPPLEMENT.
<PAGE>
<TABLE>
<S> <C> <C>
CURRENT BALANCE: $15,500,000.00 DATED DATE: 03/01/98
COUPON: 6.875% ucfc98af FIRST PAYMENT: 04/15/98
FACTOR: 1.0000000000 TOTAL CLASSES: 8
ORIGINAL BALANCE: $15,500,000.00 BOND A7 BE-YIELD TABLE YIELD TABLE DATE: 03/30/98
</TABLE>
PREPAYMENT SPEED
**** To Maturity ****
**** With 50 bps Step Up ****
<TABLE>
<CAPTION>
PRICING SPEED
25.HEP 15.0HEP 18.0HEP 22.0HEP 28.0HEP 32.0HEP 35.0HEP
PRICE
<S> <C> <C> <C> <C> <C> <C> <C>
99-24 7.100 7.067 7.080 7.094 7.100 7.080 7.055
99-24+ 7.098 7.066 7.079 7.092 7.097 7.078 7.052
99-25 7.096 7.064 7.077 7.090 7.095 7.075 7.049
99-25+ 7.094 7.063 7.075 7.088 7.093 7.072 7.045
99-26 7.092 7.061 7.073 7.086 7.091 7.070 7.042
99-26+ 7.090 7.059 7.072 7.085 7.088 7.067 7.039
99-27 7.088 7.058 7.070 7.083 7.086 7.064 7.036
99-27+ 7.086 7.056 7.068 7.081 7.084 7.062 7.033
99-28 7.084 7.054 7.066 7.079 7.082 7.059 7.030
99-28+ 7.082 7.053 7.065 7.077 7.079 7.057 7.027
99-29 7.080 7.051 7.063 7.075 7.077 7.054 7.024
99-29+ 7.078 7.049 7.061 7.073 7.075 7.051 7.021
99-30 7.076 7.048 7.059 7.071 7.073 7.049 7.018
99-30+ 7.074 7.046 7.058 7.069 7.071 7.046 7.015
99-31 7.071 7.044 7.056 7.067 7.068 7.043 7.012
99-31+ 7.069 7.043 7.054 7.065 7.066 7.041 7.009
100-00 7.067 7.041 7.052 7.064 7.064 7.038 7.006
100-00+ 7.065 7.040 7.051 7.062 7.062 7.036 7.003
100-01 7.063 7.038 7.049 7.060 7.059 7.033 7.000
100-01+ 7.061 7.036 7.047 7.058 7.057 7.030 6.997
100-02 7.059 7.035 7.045 7.056 7.055 7.028 6.994
100-02+ 7.057 7.033 7.044 7.054 7.053 7.025 6.991
100-03 7.055 7.031 7.042 7.052 7.051 7.022 6.988
100-03+ 7.053 7.030 7.040 7.050 7.048 7.020 6.984
100-04 7.051 7.028 7.038 7.048 7.046 7.017 6.981
100-04+ 7.049 7.026 7.037 7.046 7.044 7.015 6.978
100-05 7.047 7.025 7.035 7.044 7.042 7.012 6.975
100-05+ 7.045 7.023 7.033 7.043 7.039 7.009 6.972
100-06 7.043 7.022 7.031 7.041 7.037 7.007 6.969
100-06+ 7.041 7.020 7.030 7.039 7.035 7.004 6.966
100-07 7.039 7.018 7.028 7.037 7.033 7.001 6.963
100-07+ 7.037 7.017 7.026 7.035 7.031 6.999 6.960
First Payment 9.125 13.708 12.292 10.375 6.792 5.458 4.792
Average Life 11.375 16.392 14.659 12.673 10.101 8.078 6.676
Last Payment 15.375 21.792 19.542 17.125 14.042 12.625 11.542
Mod.Dur. @ 100-00 7.593 9.481 8.902 8.147 6.993 5.911 5.099
</TABLE>
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
THIS STRUCTURAL TERMSHEET SUPERSEDES ANY PREVIOUS STRUCTURAL
TERMSHEETS, MAY BE SUPERSEDED BY FUTURE STRUCTURAL INFORMATION AND WILL
BE SUPERSEDED BY THE STRUCTURAL INFORMATION IN THE PROSPECTUS
SUPPLEMENT.
<PAGE>
<TABLE>
<S> <C> <C>
CURRENT BALANCE: $15,500,000.00 DATED DATE: 03/01/98
COUPON: 6.875% ucfc98af FIRST PAYMENT: 04/15/98
FACTOR: 1.0000000000 TOTAL CLASSES: 8
ORIGINAL BALANCE: $15,500,000.00 BOND A7 BE-YIELD TABLE YIELD TABLE DATE: 03/30/98
</TABLE>
PREPAYMENT SPEED
**** TO CALL ****
<TABLE>
<CAPTION>
PRICING SPEED
25.HEP 15.0HEP 18.0HEP 22.0HEP 28.0HEP 32.0HEP 35.0HEP
PRICE
<S> <C> <C> <C> <C> <C> <C> <C>
99-24 6.971 6.972 6.972 6.971 6.971 6.970 6.970
99-24+ 6.968 6.970 6.969 6.969 6.968 6.967 6.966
99-25 6.966 6.968 6.967 6.966 6.965 6.964 6.963
99-25+ 6.963 6.966 6.965 6.964 6.962 6.960 6.959
99-26 6.960 6.964 6.963 6.961 6.959 6.957 6.955
99-26+ 6.957 6.962 6.961 6.959 6.956 6.954 6.952
99-27 6.955 6.960 6.958 6.956 6.953 6.950 6.948
99-27+ 6.952 6.958 6.956 6.954 6.950 6.947 6.944
99-28 6.949 6.956 6.954 6.951 6.947 6.944 6.941
99-28+ 6.946 6.954 6.952 6.949 6.944 6.940 6.937
99-29 6.944 6.952 6.950 6.946 6.941 6.937 6.934
99-29+ 6.941 6.950 6.947 6.944 6.938 6.934 6.930
99-30 6.938 6.948 6.945 6.941 6.935 6.930 6.926
99-30+ 6.936 6.946 6.943 6.939 6.932 6.927 6.923
99-31 6.933 6.944 6.941 6.936 6.929 6.924 6.919
99-31+ 6.930 6.942 6.938 6.934 6.926 6.920 6.915
100-00 6.927 6.940 6.936 6.931 6.923 6.917 6.912
100-00+ 6.925 6.938 6.934 6.929 6.920 6.914 6.908
100-01 6.922 6.936 6.932 6.926 6.918 6.910 6.904
100-01+ 6.919 6.934 6.930 6.924 6.915 6.907 6.901
100-02 6.916 6.932 6.927 6.921 6.912 6.904 6.897
100-02+ 6.914 6.930 6.925 6.919 6.909 6.900 6.893
100-03 6.911 6.928 6.923 6.916 6.906 6.897 6.890
100-03+ 6.908 6.926 6.921 6.914 6.903 6.894 6.886
100-04 6.906 6.924 6.919 6.911 6.900 6.890 6.883
100-04+ 6.903 6.922 6.916 6.909 6.897 6.887 6.879
100-05 6.900 6.920 6.914 6.906 6.894 6.884 6.875
100-05+ 6.897 6.918 6.912 6.904 6.891 6.880 6.872
100-06 6.895 6.915 6.910 6.901 6.888 6.877 6.868
100-06+ 6.892 6.913 6.907 6.899 6.885 6.874 6.864
100-07 6.889 6.911 6.905 6.896 6.882 6.870 6.861
100-07+ 6.887 6.909 6.903 6.894 6.879 6.867 6.857
First Payment 7.542 11.542 10.042 8.458 6.792 5.458 4.792
Average Life 7.542 11.542 10.042 8.458 6.792 5.840 5.251
Last Payment 7.542 11.542 10.042 8.458 6.792 5.875 5.375
Mod.Dur. @ 100-00 5.694 7.713 7.020 6.207 5.250 4.653 4.263
</TABLE>
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
THIS STRUCTURAL TERMSHEET SUPERSEDES ANY PREVIOUS STRUCTURAL
TERMSHEETS, MAY BE SUPERSEDED BY FUTURE STRUCTURAL INFORMATION AND WILL
BE SUPERSEDED BY THE STRUCTURAL INFORMATION IN THE PROSPECTUS
SUPPLEMENT.
<PAGE>
<TABLE>
<S> <C> <C>
CURRENT BALANCE: $32,500,000.00 DATED DATE: 03/01/98
COUPON: 6.430% ucfc98af FIRST PAYMENT: 04/15/98
FACTOR: 1.0000000000 TOTAL CLASSES: 8
ORIGINAL BALANCE: $32,500,000.00 BOND A8 BE-YIELD TABLE YIELD TABLE DATE: 03/30/98
</TABLE>
PREPAYMENT SPEED
**** To Maturity ****
<TABLE>
<CAPTION>
PRICING SPEED
25.HEP 15.0HEP 18.0HEP 22.0HEP 28.0HEP 32.0HEP 35.0HEP
PRICE
<S> <C> <C> <C> <C> <C> <C> <C>
99-24 6.517 6.517 6.517 6.517 6.517 6.517 6.517
99-24+ 6.514 6.514 6.514 6.514 6.513 6.513 6.513
99-25 6.510 6.511 6.511 6.511 6.510 6.510 6.510
99-25+ 6.507 6.508 6.508 6.507 6.507 6.507 6.507
99-26 6.504 6.505 6.505 6.504 6.504 6.504 6.503
99-26+ 6.501 6.502 6.502 6.501 6.501 6.500 6.500
99-27 6.498 6.500 6.499 6.498 6.498 6.497 6.497
99-27+ 6.495 6.497 6.496 6.495 6.494 6.494 6.493
99-28 6.492 6.494 6.493 6.492 6.491 6.491 6.490
99-28+ 6.488 6.491 6.490 6.489 6.488 6.487 6.487
99-29 6.485 6.488 6.487 6.486 6.485 6.484 6.484
99-29+ 6.482 6.485 6.484 6.483 6.482 6.481 6.480
99-30 6.479 6.482 6.481 6.480 6.478 6.478 6.477
99-30+ 6.476 6.480 6.478 6.477 6.475 6.474 6.474
99-31 6.473 6.477 6.475 6.474 6.472 6.471 6.470
99-31+ 6.470 6.474 6.472 6.471 6.469 6.468 6.467
100-00 6.467 6.471 6.469 6.468 6.466 6.465 6.464
100-00+ 6.463 6.468 6.467 6.465 6.462 6.461 6.460
100-01 6.460 6.465 6.464 6.462 6.459 6.458 6.457
100-01+ 6.457 6.462 6.461 6.459 6.456 6.455 6.454
100-02 6.454 6.460 6.458 6.456 6.453 6.451 6.451
100-02+ 6.451 6.457 6.455 6.452 6.450 6.448 6.447
100-03 6.448 6.454 6.452 6.449 6.447 6.445 6.444
100-03+ 6.445 6.451 6.449 6.446 6.443 6.442 6.441
100-04 6.442 6.448 6.446 6.443 6.440 6.438 6.437
100-04+ 6.439 6.445 6.443 6.440 6.437 6.435 6.434
100-05 6.435 6.442 6.440 6.437 6.434 6.432 6.431
100-05+ 6.432 6.440 6.437 6.434 6.431 6.429 6.427
100-06 6.429 6.437 6.434 6.431 6.428 6.425 6.424
100-06+ 6.426 6.434 6.431 6.428 6.424 6.422 6.421
100-07 6.423 6.431 6.428 6.425 6.421 6.419 6.418
100-07+ 6.420 6.428 6.425 6.422 6.418 6.416 6.414
First Payment 3.042 3.042 3.042 3.042 3.042 3.125 3.125
Average Life 6.326 7.106 6.818 6.510 6.177 6.008 5.899
Last Payment 15.208 21.542 19.292 16.958 13.625 12.458 11.375
Mod.Dur. @ 100-00 4.977 5.447 5.277 5.090 4.884 4.776 4.705
**To CAll**
Average Life 6.100 7.075 6.762 6.387 5.751 5.246 4.933
</TABLE>
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
THIS STRUCTURAL TERMSHEET SUPERSEDES ANY PREVIOUS STRUCTURAL
TERMSHEETS, MAY BE SUPERSEDED BY FUTURE STRUCTURAL INFORMATION AND WILL
BE SUPERSEDED BY THE STRUCTURAL INFORMATION IN THE PROSPECTUS
SUPPLEMENT.
<PAGE>
- --------------------------------------------------------------------------------
- UCFC Loan Trust 1998-A
- FIXED RATE COLLATERAL
- $256,643,949.71
- Home Equity Loans Summary Report
- --------------------------------------------------------------------------------
Number of Mortgage Loans: 6,024
Aggregate Unpaid Principal Balance: $256,643,949.71
Aggregate Original Principal Balance: $257,165,543.00
Weighted Average Gross Coupon: 11.404%
Gross Coupon Range: 8.350% - 15.750%
- --------------------------------------------------------------------------------
Average Unpaid Principal Balance: $42,603.58
Average Original Principal Balance: $42,690.16
Maximum Unpaid Principal Balance: $418,414.43
Minimum Unpaid Principal Balance: $5,156.85
Maximum Original Principal Balance: $418,600.00
Minimum Original Principal Balance: $5,200.00
Weighted Avg. Stated Rem. Term (LPD to Mat/Bln Date):
242.995
Stated Rem Term Range: 48.000 - 360.000
Weighted Avg. Amortized Rem. Term: 250.974
Amortized Rem Term Range: 47.999 - 360.106
Weighted Average Age (Original Term - Rem Term): 1.372
Age Range: 0.000 - 122.000
Weighted Average Original Term: 244.367
Original Term Range: 48.000 - 360.000
Weighted Average Note LTV: 78.298
Note LTV Range: 5.000% - 100.000%
- --------------------------------------------------------------------------------
THIS COLLATERAL TERMSHEET SUPERSEDES ANY PREVIOUS COLLATERAL
TERMSHEETS, AND WILL BE SUPERSEDED BY THE COLLATERAL INFORMATION IN THE
PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
<PAGE>
GEOGRAPHICAL DISTRIBUTION OF MORTGAGED PROPERTIES
Percentage of
Aggregate Cut-Off Date
Number of Unpaid Aggregate
Mortgage Principal Principal
State Loans Balance Balance
Alaska 1 27,000.00 0.01
Alabama 30 1,741,002.98 0.68
Arkansas 192 7,251,886.91 2.83
Arizona 32 1,319,997.93 0.51
California 131 8,508,182.06 3.32
Colorado 38 1,973,502.62 0.77
Connecticut 38 2,230,783.12 0.87
Dist of Col 8 417,800.53 0.16
Delaware 19 1,147,353.12 0.45
Florida 476 21,062,655.21 8.21
Georgia 219 10,001,332.53 3.90
Hawaii 2 404,245.86 0.16
Iowa 45 1,843,860.95 0.72
Idaho 6 315,482.32 0.12
Illinois 96 3,602,793.76 1.40
Indiana 236 8,490,345.93 3.31
Kansas 2 64,786.78 0.03
Kentucky 128 5,125,266.98 2.00
Louisiana 792 32,004,781.39 12.47
Massachusetts 17 869,849.06 0.34
Maryland 50 2,646,428.34 1.03
Maine 60 2,274,679.34 0.89
Michigan 363 12,678,829.81 4.94
Minnesota 23 813,553.90 0.32
Missouri 122 4,127,602.60 1.61
Mississippi 362 12,977,627.01 5.06
Montana 5 262,705.96 0.10
North Carolina 397 17,529,380.79 6.83
North Dakota 3 122,461.71 0.05
Nebraska 22 682,919.76 0.27
New Hampshire 28 1,349,173.55 0.53
New Jersey 44 2,943,950.35 1.15
New Mexico 26 1,139,507.04 0.44
Nevada 3 151,497.80 0.06
New York 303 14,253,251.06 5.55
Ohio 293 12,621,644.37 4.92
Oklahoma 186 6,985,625.14 2.72
Oregon 7 442,369.41 0.17
Pennsylvania 321 12,014,715.80 4.68
Rhode Island 2 140,361.09 0.05
South Carolina 232 10,652,731.37 4.15
Tennessee 305 14,645,741.84 5.71
Texas 105 5,352,221.89 2.09
Utah 13 616,124.61 0.24
Virginia 63 2,656,370.77 1.04
Vermont 7 472,203.29 0.18
Washington 24 1,588,902.89 0.62
Wisconsin 92 3,770,554.12 1.47
West Virgina 54 2,302,022.15 0.90
Wyoming 1 25,881.91 0.01
- --------------------------------------------------------------------------
Total............... 6,024 $256,643,949.71 100.00%
==========================================================================
THIS COLLATERAL TERMSHEET SUPERSEDES ANY PREVIOUS COLLATERAL
TERMSHEETS, AND WILL BE SUPERSEDED BY THE COLLATERAL INFORMATION IN THE
PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
<PAGE>
ORIGINAL LOAN-TO-VALUE RATIOS
<TABLE>
<CAPTION>
Percentage of
Aggregate Cut-Off Date
Original Number of Unpaid Aggregate
Loan-To-Value Mortgage Principal Principal
Ratio Loans Balance Balance
<S> <C> <C> <C>
0.00 (less than) LTV (less than or equal to) 5.00 1 10,000.00 0.00
5.00 (less than) LTV (less than or equal to) 10.00 2 23,400.00 0.01
10.00 (less than) LTV (less than or equal to) 15.00 9 142,272.88 0.06
15.00 (less than) LTV (less than or equal to) 20.00 21 322,551.81 0.13
20.00 (less than) LTV (less than or equal to) 25.00 31 678,361.85 0.26
25.00 (less than) LTV (less than or equal to) 30.00 59 1,275,815.27 0.50
30.00 (less than) LTV (less than or equal to) 35.00 71 1,946,328.90 0.76
35.00 (less than) LTV (less than or equal to) 40.00 83 2,430,551.47 0.95
40.00 (less than) LTV (less than or equal to) 45.00 104 2,691,951.05 1.05
45.00 (less than) LTV (less than or equal to) 50.00 136 4,344,843.72 1.69
50.00 (less than) LTV (less than or equal to) 55.00 183 6,051,939.96 2.36
55.00 (less than) LTV (less than or equal to) 60.00 226 7,034,334.32 2.74
60.00 (less than) LTV (less than or equal to) 65.00 287 9,635,051.81 3.75
65.00 (less than) LTV (less than or equal to) 70.00 446 16,281,332.17 6.34
70.00 (less than) LTV (less than or equal to) 75.00 716 29,008,725.42 11.30
75.00 (less than) LTV (less than or equal to) 80.00 1,220 60,576,601.95 23.60
80.00 (less than) LTV (less than or equal to) 85.00 790 34,707,194.92 13.52
85.00 (less than) LTV (less than or equal to) 90.00 766 36,670,054.15 14.29
90.00 (less than) LTV (less than or equal to) 95.00 362 18,018,410.25 7.02
95.00 (less than) LTV (less than or equal to)100.00 511 24,794,227.81 9.66
- ---------------------------------------------------------------------------------------------------
Total.................... 6,024 $256,643,949.71 100.00%
===================================================================================================
</TABLE>
GROSS MORTGAGE INTEREST RATE RANGE
<TABLE>
<CAPTION>
Percentage of
Aggregate Cut-Off Date
Gross Mortgage Number of Unpaid Aggregate
Interest Rate Mortgage Principal Principal
Range Loans Balance Balance
<S> <C> <C> <C>
8.25% (less than) Gross Coupon (less than or equal to) 8.50% 3 197,852.20 0.08
8.50% (less than) Gross Coupon (less than or equal to) 8.75% 10 895,070.82 0.35
8.75% (less than) Gross Coupon (less than or equal to) 9.00% 38 2,762,675.80 1.08
9.00% (less than) Gross Coupon (less than or equal to) 9.25% 28 1,853,909.75 0.72
9.25% (less than) Gross Coupon (less than or equal to) 9.50% 94 5,189,969.30 2.02
9.50% (less than) Gross Coupon (less than or equal to) 9.75% 149 6,110,226.38 2.38
9.75% (less than) Gross Coupon (less than or equal to) 10.00% 362 17,545,514.20 6.84
10.00% (less than) Gross Coupon (less than or equal to) 10.25% 108 5,377,283.09 2.10
10.25% (less than) Gross Coupon (less than or equal to) 10.50% 460 23,445,926.48 9.14
10.50% (less than) Gross Coupon (less than or equal to) 10.75% 235 11,848,851.46 4.62
10.75% (less than) Gross Coupon (less than or equal to) 11.00% 537 26,789,824.85 10.44
11.00% (less than) Gross Coupon (less than or equal to) 11.25% 497 21,062,824.46 8.21
11.25% (less than) Gross Coupon (less than or equal to) 11.50% 719 32,079,773.24 12.50
11.50% (less than) Gross Coupon (less than or equal to) 11.75% 320 13,533,360.62 5.27
11.75% (less than) Gross Coupon (less than or equal to) 12.00% 509 21,393,632.84 8.34
12.00% (less than) Gross Coupon (less than or equal to) 12.25% 542 16,223,115.37 6.32
12.25% (less than) Gross Coupon (less than or equal to) 12.50% 474 18,938,556.08 7.38
12.50% (less than) Gross Coupon (less than or equal to) 12.75% 238 8,071,355.23 3.14
12.75% (less than) Gross Coupon (less than or equal to) 13.00% 145 5,258,159.07 2.05
13.00% (less than) Gross Coupon (less than or equal to) 13.25% 158 5,513,695.16 2.15
13.25% (less than) Gross Coupon (less than or equal to) 13.50% 129 4,454,925.80 1.74
13.50% (less than) Gross Coupon (less than or equal to) 13.75% 54 1,671,493.79 0.65
13.75% (less than) Gross Coupon (less than or equal to) 14.00% 55 2,000,760.63 0.78
14.00% (less than) Gross Coupon (less than or equal to) 14.25% 53 1,611,791.90 0.63
14.25% (less than) Gross Coupon (less than or equal to) 14.50% 12 254,174.55 0.10
14.50% (less than) Gross Coupon (less than or equal to) 14.75% 71 1,833,126.06 0.71
14.75% (less than) Gross Coupon (less than or equal to) 15.00% 9 265,343.71 0.10
15.00% (less than) Gross Coupon (less than or equal to) 15.25% 13 407,933.63 0.16
15.25% (less than) Gross Coupon (less than or equal to) 15.50% 1 32,221.99 0.01
15.50% (less than) Gross Coupon (less than or equal to) 15.75% 1 20,601.25 0.01
- -----------------------------------------------------------------------------------------------------------
Total.......... 6,024 $256,643,949.71 100.00%
===========================================================================================================
</TABLE>
THIS COLLATERAL TERMSHEET SUPERSEDES ANY PREVIOUS COLLATERAL
TERMSHEETS, AND WILL BE SUPERSEDED BY THE COLLATERAL INFORMATION IN THE
PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
<PAGE>
CURRENT MORTGAGE LOAN AMOUNTS
<TABLE>
<CAPTION>
Percentage of
Aggregate Cut-Off Date
Current Number of Unpaid Aggregate
Mortgage Loan Mortgage Principal Principal
Principal Balance Loans Balance Balance
<S> <C> <C> <C>
Balance (less than or equal to) 25,000 1,706 30,932,503.76 12.05
25,000 (less than) Balance (less than or equal to) 50,000 2,642 95,461,994.14 37.20
50,000 (less than) Balance (less than or equal to) 100,000 1,410 92,127,734.63 35.90
100,000 (less than) Balance (less than or equal to) 150,000 196 23,523,184.86 9.17
150,000 (less than) Balance (less than or equal to) 200,000 40 6,839,864.29 2.67
200,000 (less than) Balance (less than or equal to) 250,000 18 4,058,458.52 1.58
250,000 (less than) Balance (less than or equal to) 300,000 8 2,248,261.72 0.88
300,000 (less than) Balance (less than or equal to) 350,000 2 674,000.00 0.26
350,000 (less than) Balance (less than or equal to) 400,000 1 359,533.36 0.14
400,000 (less than) Balance (less than or equal to) 450,000 1 418,414.43 0.16
- -------------------------------------------------------------------------------------------------------------
Total.................... 6,024 $256,643,949.71 100.00%
=============================================================================================================
</TABLE>
OWNER OCCUPANCY
Percentage of
Aggregate Cut-Off Date
Number of Unpaid Aggregate
Mortgage Principal Principal
Loans Balance Balance
Owner Occupied, 1st Mtg 4,677 216,248,559.46 84.26
Non-Owner Occupied, 1st Mtg 535 20,264,581.59 7.90
Second Home, 1st Mtg 2 222,663.16 0.09
Owner Occupied, 2nd Mtg 799 19,131,810.37 7.45
Non-Owner Occupied, 2nd Mtg 2 34,600.00 0.01
Multiple Properties, 1st Mtgs 9 741,735.13 0.29
- --------------------------------------------------------------------------
Total.................. 6,024 $256,643,949.71 100.00%
==========================================================================
AGE OF LOAN
<TABLE>
<CAPTION>
PercentAge of
Aggregate Cut-Off Date
Number of Unpaid Aggregate
Mortgage Principal Principal
Age Loans Balance Balance
<S> <C> <C> <C>
Age = 0 2,837 119,666,192.60 46.63%
0 (less than) Age (less than or equal to) 12 3,117 133,233,960.12 51.91%
12 (less than) Age (less than or equal to) 24 37 1,970,407.04 0.77%
24 (less than) Age (less than or equal to) 36 11 853,155.00 0.33%
36 (less than) Age (less than or equal to) 48 5 246,696.17 0.10%
48 (less than) Age (less than or equal to) 60 9 284,068.63 0.11%
72 (less than) Age (less than or equal to) 84 1 43,063.30 0.02%
84 (less than) Age (less than or equal to) 96 2 131,536.50 0.05%
96 (less than) Age (less than or equal to) 108 1 58,441.85 0.02%
108 (less than) Age (less than or equal to) 120 2 71,113.55 0.03%
120 (less than) Age (less than or equal to) 132 2 85,314.95 0.03%
- -----------------------------------------------------------------------------------------------------
Total............ 6,024 $256,643,949.71 100.00%
=====================================================================================================
</TABLE>
THIS COLLATERAL TERMSHEET SUPERSEDES ANY PREVIOUS COLLATERAL
TERMSHEETS, AND WILL BE SUPERSEDED BY THE COLLATERAL INFORMATION IN THE
PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
<PAGE>
MORTGAGED PROPERTIES
Percentage of
Aggregate Cut-Off Date
Number of Unpaid Aggregate
Mortgage Principal Principal
Loans Balance Balance
Deminimus PUD 2 242,567.16 0.09
Duplex 186 7,656,025.60 2.98
Triplex 11 542,247.57 0.21
Fourplex or Quadplex 19 1,288,720.53 0.50
RowHouse 112 3,351,020.42 1.31
Modular Housing 9 482,001.35 0.19
Manufactured Housing 5 248,224.90 0.10
Man.House/Perm 859 31,546,762.92 12.29
Semi-Detached 4 190,438.67 0.07
PUD 5 406,203.09 0.16
Townhouses 17 956,126.72 0.37
Condominiums 81 3,801,824.07 1.48
Single Family Detached 4,714 205,931,786.71 80.24
- --------------------------------------------------------------------------
Total............... 6,024 $256,643,949.71 100.00%
==========================================================================
REMAINING MONTHS TO STATED MATURITY
<TABLE>
<CAPTION>
Percentage of
Aggregate Cut-Off Date
Number of Unpaid Aggregate
Mortgage Principal Principal
Remaining Term Loans Balance Balance
<S> <C> <C> <C>
36 (less than) Rem Term (less than or equal to) 48 4 66,800.00 0.03%
48 (less than) Rem Term (less than or equal to) 60 103 1,975,254.48 0.77%
60 (less than) Rem Term (less than or equal to) 72 14 254,180.51 0.10%
72 (less than) Rem Term (less than or equal to) 84 46 1,155,966.55 0.45%
84 (less than) Rem Term (less than or equal to) 96 21 465,840.96 0.18%
96 (less than) Rem Term (less than or equal to) 108 13 373,454.38 0.15%
108 (less than) Rem Term (less than or equal to) 120 763 18,591,961.98 7.24%
120 (less than) Rem Term (less than or equal to) 132 7 217,061.57 0.08%
132 (less than) Rem Term (less than or equal to) 144 276 7,880,633.40 3.07%
144 (less than) Rem Term (less than or equal to) 156 8 338,695.05 0.13%
156 (less than) Rem Term (less than or equal to) 168 11 405,912.23 0.16%
168 (less than) Rem Term (less than or equal to) 180 2,593 99,601,954.75 38.81%
180 (less than) Rem Term (less than or equal to) 192 2 57,597.73 0.02%
192 (less than) Rem Term (less than or equal to) 204 6 238,269.79 0.09%
204 (less than) Rem Term (less than or equal to) 216 4 154,507.22 0.06%
216 (less than) Rem Term (less than or equal to) 228 1 58,196.98 0.02%
228 (less than) Rem Term (less than or equal to) 240 723 33,303,651.64 12.98%
240 (less than) Rem Term (less than or equal to) 252 1 62,374.24 0.02%
252 (less than) Rem Term (less than or equal to) 264 2 132,247.36 0.05%
288 (less than) Rem Term (less than or equal to) 300 56 2,353,134.42 0.92%
300 (less than) Rem Term (less than or equal to) 312 1 57,223.19 0.02%
324 (less than) Rem Term (less than or equal to) 336 9 827,730.52 0.32%
336 (less than) Rem Term (less than or equal to) 348 19 1,431,070.99 0.56%
348 (less than) Rem Term (less than or equal to) 360 1,341 86,640,229.77 33.76%
- --------------------------------------------------------------------------------------------------
Total............ 6,024 256,643,949.71 100.00%
==================================================================================================
</TABLE>
THIS COLLATERAL TERMSHEET SUPERSEDES ANY PREVIOUS COLLATERAL
TERMSHEETS, AND WILL BE SUPERSEDED BY THE COLLATERAL INFORMATION IN THE
PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
<PAGE>
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
UCFC Loan Trust 1998-A -- Home Equity Loan Asset-Backed Certificates
UCFC LOAN TRUST 1998-A PRICING INFORMATION
--------------------------------------------------------
(FIXED-RATE COLLATERAL ONLY)
UCFC Loan Trust 1998-A Lead Manager: Prudential Securities Incorporated
Co-Manager: First Union Capital Markets Group
Co-Manager: Bear, Stearns & Co. Inc.
<TABLE>
<CAPTION>
Class: A-1 A-2 A-3 A-4 A-5
<S> <C> <C> <C> <C> <C>
Approximate
Face Amount: [131,000,000] [46,000,000] [46,000,000] [14,000,000] [24,000,000]
Coupon: 1M LIBOR + 8 bps 6.135 6.255 6.395 6.490
Price: 100-0 100-0 100-0 100-0 100-0
Yield: 5.9430 6.0908 6.2484 6.4099 6.5179
Spread: 8 58 70 83 98
Exp Avg Life
to Maturity: [0.899 2.126 3.110 4.107 5.046]
Exp Avg Life
to 10% Call: [0.899 2.126 3.110 4.107 5.046]
Exp 1st Prin Pmt: [4/15/98 12/15/99 10/15/00 01/15/02 08/15/02]
Exp Mat: [12/15/99 10/15/00 01/15/02 08/15/02 02/15/04]
Exp Mat to 10% Call: [12/15/99 10/15/00 01/15/02 08/15/02 02/15/04]
Stated Mat: [07/15/11 03/15/14 01/15/18 09/15/19 04/15/24]
Expected
Rating: AAA/Aaa/AAA AAA/Aaa/AAA AAA/Aaa/AAA AAA/Aaa/AAA AAA/Aaa/AAA
Pricing Speed: [25]% HEP [25]% HEP [25]% HEP [25]% HEP [25]% HEP
Pricing Date: 03/20/98 03/20/98 03/20/98 03/20/98 03/20/98
Investor
Settle Date: 03/30/98 03/30/98 03/30/98 03/30/98 03/30/98
Pmt Delay: 0 days 14 days 14 days 14 days 14 days
Cut-off Date: 03/01/98 03/01/98 03/01/98 03/01/98 03/01/98
Dated Date: 03/27/98 03/01/98 03/01/98 03/01/98 03/01/98
Int Pmt: actual/360 30/360 30/360 30/360 30/360
Pmt Terms: Monthly Monthly Monthly Monthly Monthly
1st Int. Pmt Date: 04/15/98 04/15/98 04/15/98 04/15/98 04/15/98
Collateral Type: Fixed-Rate Fixed-Rate Fixed-Rate Fixed-Rate Fixed-Rate
SMMEA
Eligibility: non-SMMEA non-SMMEA non-SMMEA non-SMMEA non-SMMEA
</TABLE>
- --------------------------------------------------------------------------------
* The Pass-Through Rate on the Class A-1 Certificates will equal to the lesser
of:
1) One Month LIBOR + 8 bps
2) Net Funds Cap
Net Funds Cap: A rate equal to the weighted of the Mortgage Rates on
the Home Equity Loans less [0.646]% per annum for servicing fee,
trustee fee and certificate insurer premium.
<PAGE>
THIS COLLATERAL TERMSHEET SUPERSEDES ANY PREVIOUS COLLATERAL
TERMSHEETS, AND WILL BE SUPERSEDED BY THE COLLATERAL INFORMATION IN THE
PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
<PAGE>
UCFC Loan Trust 1998-A -- Home Equity Loan Asset-Backed Certificates
UCFC LOAN TRUST 1998-A PRICING INFORMATION (continued)
--------------------------------------------------------
(FIXED-RATE COLLATERAL ONLY)
<TABLE>
<CAPTION>
Class: A-6 A-7 A-8
(NAS BOND)
<S> <C> <C> <C>
Approximate
Face Amount: [16,000,000] [15,500,000] [32,500,000]
Coupon: 6.725 6.870 6.415
Price: 100-0 100-0 100-0
Yield: 6.7723 6.922 6.4514
Spread: 113 127 83
Exp Avg Life to Maturity: [7.159 11.375 6.326]
Exp Avg Life to 10% call: [6.832 7.542 6.100]
Exp 1st Prin Pmt: [02/15/04 5/15/07 04/15/01]
(To Maturity)
Exp 1st Prin Pmt: [02/15/04 10/15/05 04/15/01]
(To Call)
Exp Mat: [05/15/07 08/15/13 06/15/13]
Exp Mat to 10% call: [10/15/05 10/15/05 10/15/05]
Stated Mat: [05/15/26 7/15/29 7/15/29]
Expected Rating: AAA/Aaa/AAA AAA/Aaa/AAA AAA/Aaa/AAA
Pricing Speed: [25]% HEP [25]% HEP [25]% HEP
Pricing Date: 03/20/98 03/20/98 03/20/98
Investor Settle Date: 03/30/98 03/30/98 03/30/98
Pmt Delay: 14 days 14 days 14 days
Cut-off Date: 03/01/98 03/01/98 03/01/98
Dated Date: 03/01/98 03/01/98 03/01/98
Int Pmt: 30/360 30/360 30/360
Pmt Terms: Monthly Monthly Monthly
1st Int. Pmt Date: 04/15/98 04/15/98 04/15/98
Collateral Type: Fixed-Rate Fixed-Rate Fixed-rate
SMMEA Eligibility: non-SMMEA non-SMMEA non-SMMEA
</TABLE>
* Coupon steps up by 50 bps if optional clean-up call is not exercised.
- --------------------------------------------------------------------------------
Principal Paydown: 1) To the Class A-8 Certificateholders -- the Class
A-8 Principal Distribution Amount
2) To the Class A-1 through A-7 Certificates, in
sequential order
Class A-8 Principal
Disbribution Amount: The applicable Class A-8 Principal Percentage
multiplied by the Class A-8 Principal Pro Rata
Distribution Amount for such Payment Date.
THE CLASS A-8 PRINCIPAL PERCENTAGE
--------------------------------
April 1998 to March 2001 ==} 0%
April 2001 to March 2003 ==} 45%
April 2003 to March 2004 ==} 80%
April 2004 to March 2005 ==} 100%
April 2005 and after ==} 300%
THIS COLLATERAL TERMSHEET SUPERSEDES ANY PREVIOUS COLLATERAL
TERMSHEETS, AND WILL BE SUPERSEDED BY THE COLLATERAL INFORMATION IN THE
PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
<PAGE>
UCFC Loan Trust 1998-A -- Home Equity Loan Asset-Backed Certificates
SUMMARY OF TERMS
--------------------------
Title of Securities: UCFC Loan Trust 1998-A, Home Equity Loan Asset-
Backed Certificates Class A-1, A-2, A-3, A-4,
A-5, A-6, A-7, and A-8 Certificates.
Depositor: UCFC Acceptance Corporation.
Servicer: United Companies Lending Corporation.
Originators: The Home Equity Loans were, and any Subsequent Loans
will be, originated, either directly or through
correspondents or mortgage brokers, or purchased and
re-underwritten, by United Companies and certain
subsidiaries and affiliates thereof.
Trustee: Bankers Trust Company of California, N.A.
Aggregate
Certificate Balance: $[325,000,000]
Securities Offered: 100% FGIC-guaranteed, pass-through certificates.
Offering: Public shelf offering -- a prospectus and prospectus
supplement will be distributed after pricing.
Pricing Date: 3/20/98
Investor
Settlement Date: March 30, 1998
Form of Certificates: Book-Entry form, same-day funds through DTC, Euroclear
and CEDEL
Pass-Through Rate: 1-Month LIBOR + 8 bps on Class A-1 Certificates *
6.135 % on Class A-2 Certificates
6.255 % on Class A-3 Certificates
6.395 % on Class A-4 Certificates
6.490 % on Class A-5 Certificates
6.725 % on Class A-6 Certificates
6.870 % on Class A-7 Certificates **
6.415 % on Class A-8 Certificates (NAS Bond)
* Subject to the Net Funds Cap.
** Coupon steps up by 50 bps if optional clean-up call
is not exercised.
Prepayment
Assumption: 25% HEP (2.5% CPR in month 1 with monthly incremental
increases of 2.5% CPR until the speed reaches 25% CPR
in month 10 based on loan seasoning.) This means that
seasoned loans will start further up on the prepayment
curve.
Distribution Date: The 15th day of each month (or, if any such date is
not a business day, the first business day thereafter)
commencing in April 1998. The payment delay will be
zero days for the Class A-1 and 14 days for the Class
A-2, A-3, A-4, A-5, A-6, A-7 and A-8 Certificates.
Interest Accrual
Period: The initial interest accrual period on the Class A-1
Certificates will be from March 27th until April 14th.
In future periods, interest will accrue on the Class
A-1 Certificates at the applicable Pass-Through Rate
from the preceeding Distribution Date to and including
the day prior to the current Distribution Date.
Interest on the Class A-2 through A-8 Certificates will
accrue from the first day of the preceeding month until
the 30th day of the preceeding month.
Optional
Cleanup Call: The Servicer will have the right to purchase the
Home Equity Loans on any Remittance Date when the
aggregate Loan Balance of the Home Equity Loans has
declined to 10% or less of an amount equal to the
aggregate balances of the Home Equity Loans as of the
Cut-Off Date including the Subsequent Loans.
THIS COLLATERAL TERMSHEET SUPERSEDES ANY PREVIOUS COLLATERAL
TERMSHEETS, AND WILL BE SUPERSEDED BY THE COLLATERAL INFORMATION IN THE
PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE
SUCH A DISCLAIMER, PLEASE CONTACT YOUR PRUDENTIAL SECURITIES
INCORPORATED FINANCIAL ADVISOR IMMEDIATELY.
<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)
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
