<PAGE>
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report: July 29, 1999
- ---------------------------------
(Date of earliest event reported)
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 333-61783 3411414
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
245 Park Avenue, New York, NY 10167
-------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (212) 272-2000
ITEM 5. OTHER EVENTS
Attached as Exhibit 99.1 to this Current Report are certain amended
materials (Collateral and Structural Term Sheets and Computational Materials)
furnished to the Registrant by Bear, Stearns & Co. Inc., Banc of America
Securities LLC and Prudential Securities (collectively, the "Underwriters") in
connection with the Registrant's proposed offering of certain classes of its
Commercial Mortgage Pass-Through Certificates, Series 1999-CLF1 (the
"Certificates"). The Certificates will be offered pursuant to a Prospectus and
related Prospectus Supplement (together, the "Prospectus") which will be filed
with the Commission pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "Act"). The offering of the Certificates will be registered
pursuant to the Act under the Registrant's Registration Statement on Form S-3
(No. 333-61783) (the "Registration Statement"). These amended Collateral and
Structural Term Sheets and Computational Materials will be incorporated by
reference in the Registration Statement and amend and supercede in their
entirety the Collateral and Structural Term Sheets and Computational Materials
filed on Form 8-K and dated January 28, 1999.
The amended Collateral and Structural Term Sheets and Computational
Materials were prepared solely by the Underwriters, and the Registrant did not
prepare or participate in the preparation thereof.
Any statement or information contained in the amended Collateral and
Structural Term Sheets or Computational Materials may be modified or superseded
by subsequent similar materials or, for purposes of the Prospectus and the
Registration Statement by statements or information contained in the Prospectus.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
<PAGE>
Exhibit 99.1 Amended Collateral and Structural Term Sheets and Computational
Materials.
2
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on behalf of the
Registrant by the undersigned thereunto duly authorized.
BEAR STEARNS COMMERCIAL MORTGAGE
SECURITIES INC.
By: /s/ James G. Reichek
---------------------
Name: James G. Reichek
Title: Executive Vice President
Date: July 29, 1999
3
<PAGE>
EXHIBIT INDEX
Item 601(a) of Regulation S-K
Exhibit No. Description Page
- ----------- ----------- ----
99.1 Amended Collateral and Structural Term Sheets and
Computational Materials
<PAGE>
STATEMENT REGARDING ASSUMPTIONS AS TO
-------------------------------------
SECURITIES, PRICING ESTIMATES AND OTHER INFORMATION
---------------------------------------------------
The information contained in the attached materials (the "Information") may
include various forms of performance analysis, security characteristics and
securities pricing estimates for the securities addressed. Please read and
understand this entire statement before utilizing the Information. The
Information is provided solely by Bear, Stearns & Co. Inc., Banc of America
Securities LLC and Prudential Securities Incorporated (each, an "Underwriter"),
not as agents for any issuer, and although it may be based on data supplied to
it by an issuer, the issuer has not participated in its preparation and makes no
representations regarding its accuracy or completeness.
The Information is illustrative and is not intended to predict actual results,
which may differ substantially from those reflected in the Information.
Performance analysis is based on certain assumptions with respect to significant
factors that may prove not to be as assumed. You should understand the
assumptions and evaluate whether they are appropriate for your purposes.
Performance results are based on mathematical models that use inputs to
calculate results. As with all models, results will vary, and may vary
significantly, depending upon the value of the inputs given. Inputs to these
models include but are not limited to: prepayment expectations (econometric
prepayment models, single expected lifetime prepayments or a vector of periodic
prepayments), interest rate assumptions (parallel and nonparallel changes for
different maturity instruments), collateral assumptions (actual pool level data,
aggregated pool level data, reported factors or imputed factors), volatility
assumptions (historically observed or implied current) and reported information
(paydown factors, rate resets and trustee statements). Models used in any
analysis may be proprietary, making the results difficult for any third party to
reproduce. Contact your registered representative for detailed explanations of
any modeling techniques employed in the Information.
The Information addresses only certain aspects of the applicable security's
characteristics and thus does not provide a complete assessment. As such, the
Information may not reflect the impact of all structural characteristics of the
security, including call events and cash flow priorities at all prepayment
speeds and/or interest rates. You should consider whether the behavior of these
securities should be tested at assumptions different from those included in the
Information. The assumptions underlying the Information, including structure and
collateral, may be modified from time to time to reflect changed circumstances.
Any investment decision should be based only on the data in the prospectus and
the prospectus supplement (the "Offering Documents"), including the risk factors
described therein, and the then current version of the Information. Offering
Documents contain data that is current as of their publication dates and after
publication may no longer be complete or current. Contact your registered
representative for Offering Documents, current Information or additional
materials, including other models for performance analysis, which are likely to
produce different results, and any further explanation regarding the
information.
Any pricing estimates an Underwriter has supplied at your request (a) represents
its view, at the time determined, of the investment value of the securities
between the estimated bid and offer levels, the spread between which may be
significant due to market volatility or illiquidity, (b) do not constitute a bid
by any person for any security, (c) may not constitute prices at which the
securities could have been purchased or sold in any market, (d) have not been
confirmed by actual trades, may vary from the value the Underwriter assigns any
such security while in its inventory, and may not take into account the size of
a position you have in the security, and (e) may have been derived from matrix
pricing that uses data relating to other securities whose prices are more
readily ascertainable to produce a hypothetical price based on the estimated
yield spread relationship between the securities.
General Information: The data underlying the Information has been obtained from
sources that the Underwriters believe are reliable, but the Underwriters do not
guarantee the accuracy of the underlying data or computations based thereon. The
Underwriters and/or individuals thereof may have positions in these securities
(and/or in the collateral underlying these securities) while the Information is
circulating or during such period may engage in transactions with the issuer or
its affiliates. Each Underwriter acts as principal in transactions with you, and
accordingly, you must determine the appropriateness for you of such transactions
and address any legal, tax or accounting considerations applicable to you. An
Underwriter shall not be a fiduciary or advisor unless it has agreed in writing
to receive compensation specifically to act in such capacities. If you are
subject to ERISA, the Information is being furnished on the condition that it
will not form a primary basis for any investment decision. The Information is
not a solicitation of any transaction in securities which may be made only by
prospectus when required by law, in which event you may obtain such prospectus
from an Underwriter.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the issuer, which
will contain material information not contained herein and to which prospective
purchasers are referred. In the event of any such offering, this information
shall be deemed superseded in its entirety by such Prospectus and Prospectus
Supplement. Any decision to invest in such securities should be made only after
reviewing such Prospectus and Prospectus Supplement. Bear, Stearns & Co. Inc.,
Banc of America Securities LLC and Prudential Securities Incorporated each
disclaim any and all liability relating to this information, including without
limitation, any express or implied representations or warranties for, statements
contained in, and omissions from, this information. This information should only
be considered after reading the Statement Regarding Assumptions as to
Securities, Pricing Estimates, and Other Information (the "Statement") which is
attached. Do not use or rely on this information if you have not received the
Statement. You may obtain a copy of the Statement from your sales
representative.
<PAGE>
New Issue Term Sheet
CAPITAL
LeaseFunding
$328,089,000
Guaranteed Lease-Backed Certificates
BSCMS 1999-CLF1
Rated Aaa (Moody's) / AAA (S&P)
MBIA Guaranteed
----
<TABLE>
<CAPTION>
Class Approx. Size (face) Coupon Anticipated Base Expected Final Principal Credit Guaranty
Ratings Case Maturity Payment Window Support
S&P/ WAL
Moody's (years)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A-1 $ 29,702,000 [6.53%] AAA/Aaa 2.0 May 2003 1 - 46 16.50% MBIA
- ---------------------------------------------------------------------------------------------------------------------------
A-2 25,489,000 [6.81%] AAA/Aaa 5.0 Sep 2005 46 - 74 16.50% MBIA
- ---------------------------------------------------------------------------------------------------------------------------
A-3 112,213,000 [7.14%] AAA/Aaa 10.0 Sep 2012 74 - 158 16.50% MBIA
- ---------------------------------------------------------------------------------------------------------------------------
A-4 160,685,000 [WAC] AAA/Aaa 16.3 Aug 2018 158 - 229 16.50% MBIA
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
All dollar amounts are approximate; all collateral information is preliminary
and subject to change.
Bear Stearns Banc of America Securities LLC Prudential Securities
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the issuer, which
will contain material information not contained herein and to which prospective
purchasers are referred. In the event of any such offering, this information
shall be deemed superseded in its entirety by such Prospectus and Prospectus
Supplement. Any decision to invest in such securities should be made only after
reviewing such Prospectus and Prospectus Supplement. Bear, Stearns & Co. Inc.,
Banc of America Securities LLC and Prudential Securities Incorporated each
disclaim any and all liability relating to this information, including without
limitation, any express or implied representations or warranties for, statements
contained in, and omissions from, this information. This information should only
be considered after reading the Statement Regarding Assumptions as to
Securities, Pricing Estimates, and Other Information (the "Statement") which is
attached. Do not use or rely on this information if you have not received the
Statement. You may obtain a copy of the Statement from your sales
representative.
<PAGE>
Collateral Pool
BSCMS 1999-CLF1 is a securitization of approximately $393 million of loans
backed by corporate or U.S. Postal Service lease obligations and by liens on
related property.
These loans will be sold into BSCMS 1999-CLF1 by two firms:
. Capital Lease Funding (CLF) will contribute ~$342mm loans secured by
corporate lease obligations. Lease obligors are 95% investment-grade credits.
. Bedford Capital Funding will contribute ~$51mm loans secured by leases to the
United States Postal Service ("USPS").
Transaction Structure & MBIA Guaranty
These loans collateralize sequential-pay certificates issued by BSMCS 1999-
CLF1. Classes A-1, A-2, A-3 and A-4, are guaranteed by MBIA:
. Subordination provides credit enhancement to Classes A-1 through A-4.
-------------
. Stand-alone AAA risk. Absent the MBIA guaranty, Classes A-1 through A-4
--------------------
would still receive ratings of Aaa (Moody's) and AAA (S&P).
. MBIA guaranty. Financial guaranty from MBIA provides: (i) an unconditional
-------------
guaranty for timely payments of interest, (ii) a limited guaranty for the
timely payment of principal and (iii) an unconditional guaranty for the
ultimate payment of principal to Classes A-1 through A-4.
Underlying U.S. Postal Service and Corporate Credits/1/
Rating of lessee, guarantor, or Group
parent corporation [4] % of pool % of pool
- ------------------------------------------------------------------------
U.S. Postal Service [2] 12.95% 12.95%
Corporate AA 15.00%
AA 8.40%
AA- 6.60%
Corporate A 48.17%
A+ 13.59%
A 32.33%
CP A-2 2.25%
Corporate BBB 19.25%
BBB+ 6.45%
BBB 10.05%
BBB- 2.75%
Below investment grade 4.63%
(estimated) [3]
- ------------------------------------------------------------------------
Total 100.00% 100.00%
- --------------------------------------------------------------------------------
Lessee/Guarantor % of pool Rating
- --------------------------------------------------------------------------------
United States Postal Service 12.95% [2]
Royal Ahold (Stop & Shop, etc.) 10.14% A
CVS Corporation 9.43% A
Rite Aid Corporation 8.12% BBB
Walgreen Co. 6.98% A+
Eckerd Corporation [4] 6.45% BBB+
Home Depot U.S.A. Inc. [4] 5.93% AA-
Chase Manhattan Mortgage Corp. [4] 5.80% A+
Middlesex Mutual Assurance Company [5] 5.11% AA
American Stores Company 4.41% A
J. Sainsbury PLC 4.24% A
Lowe's Companies. Inc. 4.12% A
Wal-Mart Stores, Inc. 3.05% AA
Winn-Dixie Stores, Inc.[6] 2.25% CP A-2
Hoyts Cinemas Limited 2.19% [3]
Accor S.A. 1.93% BBB
Bed Bath & Beyond, Inc. 1.92% BBB-
Circuit City Stores, Inc. 1.92% [3]
Nash Finch Company 0.83% BBB-
International Business Machines Corp. 0.81% A+
LaSalle Bank National Association 0.67% AA-
Sterling Jewelers, Inc. 0.52% BB+
McDonald's Corporation 0.25% AA
[1] Ratings based upon S&P publicly available long-term unsecured ratings as of
July 1999 except [2] United States Postal Service has no public rating, loan
seller estimates it is investment grade, [3] Hoyts Cinemas and Circuit City have
no public rating, loan seller estimates that these credits are below investment
grade, [4] rating of lessee's parent company (not a guarantor), [5] financial
strength rating (addresses ability to pay insurance claims, not general
corporate obligations) and [6] commercial paper rating.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the issuer, which
will contain material information not contained herein and to which prospective
purchasers are referred. In the event of any such offering, this information
shall be deemed superseded in its entirety by such Prospectus and Prospectus
Supplement. Any decision to invest in such securities should be made only after
reviewing such Prospectus and Prospectus Supplement. Bear, Stearns & Co. Inc.,
Banc of America Securities LLC and Prudential Securities Incorporated each
disclaim any and all liability relating to this information, including without
limitation, any express or implied representations or warranties for, statements
contained in, and omissions from, this information. This information should only
be considered after reading the Statement Regarding Assumptions as to
Securities, Pricing Estimates, and Other Information (the "Statement") which is
attached. Do not use or rely on this information if you have not received the
Statement. You may obtain a copy of the Statement from your sales
representative.
<PAGE>
Transaction Structure
<TABLE>
<CAPTION>
Sequential Pay Approx. Size Credit Support Anticipated Coupon Base Expected Final Princ.
Certificates (face) Ratings Case WAL Maturity Paym't Window
S&P/
Moody's
- ------------------------------------------------------------------------------------------------------------------------------------
Subordination Guaranty
- -----------------------------------------------------------------------------------------------------------------------------------
Class A Certificates - publicly offered, guaranteed
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A-1 $ 29,702,000 16.50% MBIA AAA / Aaa [6.53%] 2.0 May 2003 1-46
A-2 25,489,000 16.50% MBIA AAA / Aaa [6.81%] 5.0 Sep 2005 46-74
A-3 112,213,000 16.50% MBIA AAA / Aaa [7.14%] 10.0 Sep 2012 74-158
A-4 160,685,000 16.50% MBIA AAA / Aaa [WAC] 16.3 Aug 2018 158-229
Subordinate and Interest-Only Certificates - privately offered, not guaranteed
B 16,699,000 12.25% none AA / Aa2 [WAC / %] 19.3 Apr 2019 229-237
C 15,717,000 8.25% none A / A2 [WAC / %] 20.7 Jan 2021 237-260
D 25,540,000 1.75% none BBB / NR [WAC / %] 22.6 Apr 2023 260-287
E 3,929,000 0.75% none BB / NR [WAC / %] 24.1 Nov 2023 287-293
F 2,947,438 -0- none B / NR [WAC / %] 25.0 Apr 2024 293-346
X (IO) 392,921,438 16.50% none AAAr / Aaa [WAC based] 13.5 Apr 2024 n/a
(notional)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the issuer, which
will contain material information not contained herein and to which prospective
purchasers are referred. In the event of any such offering, this information
shall be deemed superseded in its entirety by such Prospectus and Prospectus
Supplement. Any decision to invest in such securities should be made only after
reviewing such Prospectus and Prospectus Supplement. Bear, Stearns & Co. Inc.,
Banc of America Securities LLC and Prudential Securities Incorporated each
disclaim any and all liability relating to this information, including without
limitation, any express or implied representations or warranties for, statements
contained in, and omissions from, this information. This information should only
be considered after reading the Statement Regarding Assumptions as to
Securities, Pricing Estimates, and Other Information (the "Statement") which is
attached. Do not use or rely on this information if you have not received the
Statement. You may obtain a copy of the Statement from your sales
representative.
<PAGE>
Transaction Terms
Issuer BSCMS Series 1999-CLF1 (the "Trust").
Underwriters Bear, Stearns & Co. Inc. (lead & sole book-running
manager)
Banc of America Securities LLC (co-lead manager)
Prudential Securities Incorporated (co-manager)
Loan Sellers Capital Lease Funding, L.P. and Bedford Capital
Funding Corporation
Trustee LaSalle Bank N.A.
Fiscal Agent ABN AMRO Bank N.V.
Master & Special Servicer Midland Loan Services, Inc. will service the loans as
Master and Special Servicer.
Certificates The Trust will issue five classes of Series 1999-CLF1
senior certificates (namely, the Class A-1, Class A-
2, Class A-3, Class A-4 and Class X Certificates (the
"Senior Certificates")). The Trust will also issue
five classes of subordinate certificates (namely, the
Class B, Class C, Class D, Class E and Class F
Certificates (the "Subordinate Certificates") and two
classes of tax residual certificates ("Residual
Certificates" and, with the Senior Certificates and
Subordinate Certificates, the "Certificates").
Form of Registration The Class A Certificates will be in book-entry form,
same day funds through DTC.
Class A Denominations $10,000 minimum denomination and any whole dollar
denomination in excess thereof.
Cutoff Date July 15, 1999.
Settlement August __, 1999.
Payment Date The Payment Date is anticipated to be the 19th of
each month (or next succeeding business day),
commencing August 19, 1999.
Interest Interest will accrue on the Certificates at fixed
rates on a 30/360 basis during the month prior to the
month of the related Payment Date.
Principal The Class A Certificates will receive principal in
sequential numerical order (if the balance of all
Subordinate Certificates has been reduced to zero,
principal will be distributed pro rata).
No principal will be payable on the Subordinate
Certificates until the Class A Certificates have been
reduced to zero. Voluntary principal prepayments will
be distributed among the Class A Certificates, pro
rata.
Prepayment Premiums Prepayment premiums on the loans will be distributed
to each class of certificates receiving a voluntary
prepayment using a "base interest fraction
methodology" as described in the Prospectus
Supplement. Remaining prepayment premiums will be
distributed to Class X.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the issuer, which
will contain material information not contained herein and to which prospective
purchasers are referred. In the event of any such offering, this information
shall be deemed superseded in its entirety by such Prospectus and Prospectus
Supplement. Any decision to invest in such securities should be made only after
reviewing such Prospectus and Prospectus Supplement. Bear, Stearns & Co. Inc.,
Banc of America Securities LLC and Prudential Securities Incorporated each
disclaim any and all liability relating to this information, including without
limitation, any express or implied representations or warranties for, statements
contained in, and omissions from, this information. This information should only
be considered after reading the Statement Regarding Assumptions as to
Securities, Pricing Estimates, and Other Information (the "Statement") which is
attached. Do not use or rely on this information if you have not received the
Statement. You may obtain a copy of the Statement from your sales
representative.
<PAGE>
Advances The Master Servicer will be required to advance
delinquent loan payments, subject to a recovery
determination. The Trustee and Fiscal Agent will make
such required advances if the Master Servicer fails to
do so, subject to a recovery determination. The Master
Servicer also has comprehensive advancing obligations
intended to prevent a lease termination or abatement.
MBIA Guaranty:
Timely interest
(unconditional) MBIA will unconditionally guaranty timely payment of
interest to each of the Class A Certificates.
Timely principal
(limited) MBIA will provide a limited guaranty for the timely
------
payment of principal to the Class A Certificates (and
an unconditional guaranty for the ultimate payment of
principal, below). --------
In the event of a default, MBIA will guaranty timely
payment of principal as follows:
. The "date of resolution" refers to the
------------------------
distribution date immediately following final
resolution of a loan that has gone into default.
Upon this date:
- servicer advances with respect to the
defaulted loan are repaid,
- net principal recovery is available to the
Trust in cash, and
- losses are allocated to the junior-most
outstanding bond class (in an amount equal to
remaining scheduled balance less net principal
recovery).
. Up to and including the date of resolution,
------------------------------------------
payments of principal and interest will be
advanced by the servicer (subject to the
servicer's determination of recoverability - for
limitations on advancing, see "Advances" above
and the offering documents).
. Upon resolution, the Trustee will hold the net
---------------
principal recovery. MBIA will guarantee that the
net principal recovery will ultimately be
delivered to the Trust.
. Following the date of resolution, the Trustee
--------------------------------
will apply the net principal recovery to pay to
the Class A Certificates scheduled principal that
would have been due under the loan had the loan
not defaulted (along with interest at the Class A
Certificates' coupon rates).
The Trustee will continue to deliver these
payments until either (i) it has exhausted the net
principal recovery (or is required to accelerate
repayment to the Trust of the net principal
recovery, see below) or (ii) the Class A
Certificates are fully repaid.
. Upon retirement of the Class A Certificates, the
-------------------------------------------
Trustee will release any
remaining net principal recovery for payment of
principal to the Subordinate Classes.
. Under no circumstances will the Trustee accept
----------------------
or continue to hold net principal recoveries
(secured by MBIA's guarantee) if holding such
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the issuer, which
will contain material information not contained herein and to which prospective
purchasers are referred. In the event of any such offering, this information
shall be deemed superseded in its entirety by such Prospectus and Prospectus
Supplement. Any decision to invest in such securities should be made only after
reviewing such Prospectus and Prospectus Supplement. Bear, Stearns & Co. Inc.,
Banc of America Securities LLC and Prudential Securities Incorporated each
disclaim any and all liability relating to this information, including without
limitation, any express or implied representations or warranties for, statements
contained in, and omissions from, this information. This information should only
be considered after reading the Statement Regarding Assumptions as to
Securities, Pricing Estimates, and Other Information (the "Statement") which is
attached. Do not use or rely on this information if you have not received the
Statement. You may obtain a copy of the Statement from your sales
representative.
<PAGE>
recoveries would cause the Class A Certificates
to be downgraded. In this event, the Trustee (i)
will not receive the net principal recovery and
(ii) will immediately accelerate payment to the
Trust of all unamortized net principal
recoveries. Any such amounts will be distributed
as principal.
Ultimate principal
(unconditional) MBIA will unconditionally guaranty ultimate payment of
principal to each of the Class A Certificates. To the
extent that the loan collateral proves insufficient to
repay any principal balance of the Class A
Certificates, MBIA will pay the difference (on or
before the rated final distribution date).
Subordination Losses will be applied first to the Subordinate
Certificates, in reverse alphabetical order, until the
principal balance of each class of Subordinate
Certificates has been reduced to zero. Remaining
losses will ultimately be covered by the MBIA
guaranty.
ERISA The Class A Certificates will be ERISA eligible.
SMMEA The Class A Certificates will not be SMMEA eligible.
---
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the issuer, which
will contain material information not contained herein and to which prospective
purchasers are referred. In the event of any such offering, this information
shall be deemed superseded in its entirety by such Prospectus and Prospectus
Supplement. Any decision to invest in such securities should be made only after
reviewing such Prospectus and Prospectus Supplement. Bear, Stearns & Co. Inc.,
Banc of America Securities LLC and Prudential Securities Incorporated each
disclaim any and all liability relating to this information, including without
limitation, any express or implied representations or warranties for, statements
contained in, and omissions from, this information. This information should only
be considered after reading the Statement Regarding Assumptions as to
Securities, Pricing Estimates, and Other Information (the "Statement") which is
attached. Do not use or rely on this information if you have not received the
Statement. You may obtain a copy of the Statement from your sales
representative.
<PAGE>
STATEMENT REGARDING ASSUMPTIONS AS TO
-------------------------------------
SECURITIES, PRICING ESTIMATES AND OTHER INFORMATION
---------------------------------------------------
The information contained in the attached materials (the "Information") may
include various forms of performance analysis, security characteristics and
securities pricing estimates for the securities addressed. Please read and
understand this entire statement before utilizing the Information. The
Information is provided solely by Bear, Stearns & Co. Inc., Banc of America
Securities LLC and Prudential Securities Incorporated, not as agents for any
issuer, and although it may be based on data supplied to it by an issuer, the
issuer has not participated in its preparation and makes no representations
regarding its accuracy or completeness.
The Information is illustrative and is not intended to predict actual results,
which may differ substantially from those reflected in the Information.
Performance analysis is based on certain assumptions with respect to significant
factors that may prove not to be as assumed. You should understand the
assumptions and evaluate whether they are appropriate for your purposes.
Performance results are based on mathematical models that use inputs to
calculate results. As with all models, results will vary, and may vary
significantly, depending upon the value of the inputs given. Inputs to these
models include but are not limited to: prepayment expectations (econometric
prepayment models, single expected lifetime prepayments or a vector of periodic
prepayments), interest rate assumptions (parallel and nonparallel changes for
different maturity instruments), collateral assumptions (actual pool level data,
aggregated pool level data, reported factors or imputed factors), volatility
assumptions (historically observed or implied current) and reported information
(paydown factors, rate resets and trustee statements). Models used in any
analysis may be proprietary, making the results difficult for any third party to
reproduce. Contact your registered representative for detailed explanations of
any modeling techniques employed in the Information.
The Information addresses only certain aspects of the applicable security's
characteristics and thus does not provide a complete assessment. As such, the
Information may not reflect the impact of all structural characteristics of the
security, including call events and cash flow priorities at all prepayment
speeds and/or interest rates. You should consider whether the behavior of these
securities should be tested at assumptions different from those included in the
Information. The assumptions underlying the Information, including structure and
collateral, may be modified from time to time to reflect changed circumstances.
Any investment decision should be based only on the data in the offering
documents, including the risk factors described therein, and the then current
version of the Information. Offering documents contain data that is current as
of their publication dates and after publication may no longer be complete or
current. Contact your registered representative for offering documents, current
Information or additional materials, including other models for performance
analysis, which are likely to produce different results, and any further
explanation regarding the information.
Any pricing estimates Bear, Stearns & Co. Inc., Banc of America Securities LLC
or Prudential Securities Incorporated has supplied at your request (a)
represents its view, at the time determined, of the investment value of the
securities between the estimated bid and offer levels, the spread between which
may be significant due to market volatility or illiquidity, (b) do not
constitute a bid by any person for any security, (c) may not constitute prices
at which the securities could have been purchased or sold in any market, (d)
have not been confirmed by actual trades, may vary from the value it assigns any
such security while in its inventory, and may not take into account the size of
a position you have in the security and (e) may have been derived from matrix
pricing that uses data relating to other securities whose prices are more
readily ascertainable to produce a hypothetical price based on the estimated
yield spread relationship between the securities.
General Information: The data underlying the Information has been obtained from
sources that Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated believe are reliable, but the they do not
guarantee the accuracy of the underlying data or computations based thereon.
Bear, Stearns & Co. Inc., Banc of America Securities LLC and Prudential
Securities Incorporated and/or individuals thereof may have positions in these
securities (and/or in the collateral underlying these securities) while the
Information is circulating or during such period may engage in transactions with
the issuer or its affiliates. Bear, Stearns & Co. Inc., Banc of America
Securities LLC and Prudential Securities Incorporated each act as principal in
transactions with you, and accordingly, you must determine the appropriateness
for you of such transactions and address any legal, tax or accounting
considerations applicable to you. Neither Bear, Stearns & Co. Inc., Banc of
America Securities LLC nor Prudential Securities Incorporated shall be a
fiduciary or advisor unless it has agreed in writing to receive compensation
specifically to act in such capacities. If you are subject to ERISA, the
Information is being furnished on the condition that it will not form a primary
basis for any investment decision. The Information is not a solicitation of any
transaction in securities which may be made only by offering documents when
required by law, in which event you may obtain such offering documents from
Bear, Stearns & Co. Inc., Banc of America Securities LLC or Prudential
Securities Incorporated.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
New Issue Term Sheet
CAPITAL
LeaseFunding
$392,921,438
Corporate Lease-Backed Certificates
BSCMS 1999-CLF1
<TABLE>
<CAPTION>
Class Approx. Size (face) Coupon Anticipated Base Expected Final
Ratings Case Maturity
S&P/ WAL
Moody's (years)
- -------------------------------------------------------------------------------
Class A Certificates - offered publicly
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A-1 $ 29,702,000 [6.53%] AAA / Aaa 2.0 May 2003
- -------------------------------------------------------------------------------
A-2 25,489,000 [6.81%] AAA / Aaa 5.0 Sep 2005
- -------------------------------------------------------------------------------
A-3 112,213,000 [7.14%] AAA / Aaa 10.0 Sep 2012
- -------------------------------------------------------------------------------
A-4 160,685,000 [WAC] AAA / Aaa 16.3 Aug 2018
- -------------------------------------------------------------------------------
Subordinate and Interest-Only Certificates - offered privately
- -------------------------------------------------------------------------------
B 16,699,000 [WAC / %] AA / Aa2 19.3 Apr 2019
- -------------------------------------------------------------------------------
C 15,717,000 [WAC / %] A / A2 20.7 Jan 2021
- -------------------------------------------------------------------------------
D 25,540,000 [WAC / %] BBB / NR 22.6 Apr 2023
- -------------------------------------------------------------------------------
E 3,929,000 [6.00%] BB / NR 24.1 Nov 2023
- -------------------------------------------------------------------------------
F 2,947,438 [6.00%] B / NR 25.0 Apr 2024
- -------------------------------------------------------------------------------
X 392,921,438 WAC AAAr / Aaa 13.5 Apr 2024
(notional)
- -------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Princ. Credit Guaranty
Class Pay Support
Window
- --------------------------------------------------------------
Class A Certificates - offered pubicly
- --------------------------------------------------------------
<S> <C> <C> <C>
A-1 1-46 16.50% MBIA
- --------------------------------------------------------------
A-2 46-74 16.50% MBIA
- --------------------------------------------------------------
A-3 74-158 16.50% MBIA
- --------------------------------------------------------------
A-4 158-229 16.50% MBIA
- --------------------------------------------------------------
Subordinate and Interest-Only Certificates - offered privately
- --------------------------------------------------------------
B 229-237 12.25% none
- --------------------------------------------------------------
C 237-260 8.25% none
- --------------------------------------------------------------
D 260-287 1.75% none
- --------------------------------------------------------------
E 287-293 0.75% none
- --------------------------------------------------------------
F 293-346 -0- none
- --------------------------------------------------------------
X n/a 16.50% none
- --------------------------------------------------------------
</TABLE>
All dollar amounts are approximate; all collateral information is preliminary
and subject to change.
Bear Stearns Banc of America Securities LLC Prudential Securities
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
Collateral Pool: Over 95% U.S. Postal Service or Investment-Grade Corporate
BSCMS 1999-CLF1 will be a securitization of approximately $393 million of loans
backed by corporate or U.S. Postal Service lease obligations and by first
mortgage liens on related property.
These loans will be sold into BSCMS 1999-CLF1 by two firms:
. Capital Lease Funding (CLF) will contribute ~$342mm loans secured by
corporate lease obligations. Lease obligors are 95% investment-grade credits.
. Bedford Capital Funding will contribute ~$51mm loans secured by leases to the
United States Postal Service ("USPS").
Sequential Transaction Structure
These loans will collateralize certificates issued by BSMCS 1999-CLF1.
. Sequential structure. Principal, other than voluntary prepayments, will be
paid sequentially, starting with Class A-1 and ending with Class F. Voluntary
prepayments will be paid pro rata to Class A and sequentially thereafter.
Losses will be applied in reverse alphabetical order.
. Credit wrap. Classes A-1 through A-4 will be guaranteed by MBIA. Absent the
MBIA guaranty, Classes A-1 through A-4 would still receive AAA/Aaa ratings.
. Single pool-level IO. Class X will be a WAC-based interest-only bond stripped
off of the entire collateral pool.
Underlying U.S. Postal Service and Corporate Credits/1/
Rating of lessee, guarantor, or Group
parent corporation [4] % of pool % of pool
- ------------------------------------------------------------------------
U.S. Postal Service [2] 12.95% 12.95%
Corporate AA 15.00%
AA 8.40%
AA- 6.60%
Corporate A 48.17%
A+ 13.59%
A 32.33%
CP A-2 2.25%
Corporate BBB 19.25%
BBB+ 6.45%
BBB 10.05%
BBB- 2.75%
Below investment grade 4.63%
(estimated) [3]
- ------------------------------------------------------------------------
Total 100.00% 100.00%
- --------------------------------------------------------------------------------
Lessee/Guarantor % of pool Rating
- --------------------------------------------------------------------------------
United States Postal Service 12.95% [2]
Royal Ahold (Stop & Shop, etc.) 10.14% A
CVS Corporation 9.43% A
Rite Aid Corporation 8.12% BBB
Walgreen Co. 6.98% A+
Eckerd Corporation [4] 6.45% BBB+
Home Depot U.S.A. Inc. [4] 5.93% AA-
Chase Manhattan Mortgage Corp. [4] 5.80% A+
Middlesex Mutual Assurance Company [5] 5.11% AA
American Stores Company 4.41% A
J. Sainsbury PLC 4.24% A
Lowe's Companies. Inc. 4.12% A
Wal-Mart Stores, Inc. 3.05% AA
Winn-Dixie Stores, Inc.[6] 2.25% CP A-2
Hoyts Cinemas Limited 2.19% [3]
Accor S.A. 1.93% BBB
Bed Bath & Beyond, Inc. 1.92% BBB-
Circuit City Stores, Inc. 1.92% [3]
Nash Finch Company 0.83% BBB-
International Business Machines Corp. 0.81% A+
LaSalle Bank National Association 0.67% AA-
Sterling Jewelers, Inc. 0.52% BB+
McDonald's Corporation 0.25% AA
[1] Ratings based upon S&P publicly available long-term unsecured ratings as of
July 1999 except [2] United States Postal Service has no public rating, loan
seller estimates it is investment grade, [3] Hoyts Cinemas and Circuit City have
no public rating, loan seller estimates that these credits are below investment
grade, [4] rating of lessee's parent company (not a guarantor), [5] financial
strength rating (addresses ability to pay insurance claims, not general
corporate obligations) and [6] commercial paper rating.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
Transaction Terms
Issuer BSCMS Series 1999-CLF1 (the "Trust").
Managers Bear, Stearns & Co. Inc. (lead & sole book-running
manager).
Banc of America Securities LLC (co-lead manager).
Prudential Securities Incorporated (co-manager).
Loan Sellers Loan Sellers Capital Lease Funding, L.P. and
Bedford Capital Funding Corporation
Trustee LaSalle Bank N.A.
Fiscal Agent ABN AMRO Bank N.V.
Master & Special Servicer Midland Loan Services, Inc. will service the loans as
Master and Special Servicer.
Certificates The Trust will issue five classes of Series
1999-CLF1 senior certificates (namely, the Class
A-1, Class A-2, Class A-3, Class A-4 and Class X
Certificates (the "Senior Certificates")). The Trust
will also issue five classes of subordinate
certificates (namely, the Class B, Class C, Class D,
Class E and Class F Certificates (the "Subordinate
Certificates") and two classes of tax residual
certificates ("Residual Certificates" and, with the
Senior Certificates and Subordinate Certificates, the
"Certificates").
Form of Registration Book-entry form, same day funds through DTC.
Denominations $100,000 minimum denomination for the Subordinate
Certificates and any whole dollar denomination in
excess thereof. $1,000,000 notional amount minimum
denomination for the Class X Certificates and any
whole dollar denomination in excess thereof.
Cutoff Date July 15, 1999.
Settlement August __, 1999.
Payment Date The Payment Date is anticipated to be the 19th of
each month (or next succeeding business day),
commencing August 19, 1999.
Interest Interest will accrue on the Certificates at fixed
rates (or a WAC-based rate in the case of the Class X
Certificates) on a 30/360 basis during the month
prior to the month of the related Payment Date.
Interest will be paid on the Certificates in
sequential alphabetical order, except for the Class X
Certificates which will receive their interest pro
rata with the Class A Certificates.
Principal The Certificates will receive principal in
sequential alphabetical order. No principal will be
payable on the Subordinate Certificates until the
Senior Certificates have been reduced to zero. The
Class X Certificates do not have a principal balance
and will not be entitled to payments of principal.
Voluntary principal prepayments on the loans will be
distributed on the Class A Certificates, pro rata,
and on the Subordinate Certificates sequentially.
Subordination Losses will be applied first to the Subordinate
Certificates, in reverse alphabetical order, until
the principal balance of each class of Subordinate
Certificates has been reduced to zero. Losses will
then be applied to the Senior Certificates, pro rata.
Prepayment Premiums Prepayment premiums on the loans will be distributed
to each Class of Certificates receiving a voluntary
prepayment, other than Classes E and F, using a "base
interest fraction methodology" as described in the
offering documents.
Advances The Master Servicer will be required to advance
delinquent loan payments, subject to a recovery
determination. The Trustee and Fiscal Agent will make
such required
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
advances if the Master Servicer fails to do so,
subject to a recovery determination. The Master
Servicer also has comprehensive advancing obligations
intended to prevent a lease termination or abatement,
as more fully described on page 8 herein.
Appraisal Reductions If a loan becomes more than 60 days delinquent or
becomes REO or the Special Servicer materially
modifies a loan, the Special Servicer will obtain an
appraisal on the property. Advances of delinquent
interest to the most subordinate class will be
reduced to the extent of the interest on the
"Appraisal Reduction Amount." The "Appraisal
Reduction Amount" will generally be equal to the
difference between (a) the scheduled balance of the
loan plus any unpaid advances outstanding and other
amounts payable with respect thereto and (b) an
amount equal to 90% of the appraisal value of the
property.
MBIA Guaranty:
MBIA guarantees payments of interest and principal to
the Class A Certificates. The Subordinate and Class X
---------------------------
Certificates are not guaranteed by MBIA. As described
---------------------------------------
below, in certain circumstances following a default
and recovery of principal, the Trustee may hold cash
for the benefit of the Trust pursuant to the MBIA
guaranty.
See the offering documents for a more detailed
description of the MBIA guaranty.
Timely interest
(unconditional) MBIA will unconditionally guaranty timely payment
of interest to each of the Class A Certificates.
Timely principal
(limited) MBIA will provide a limited guaranty for the timely
------
payment of principal to the Class A Certificates (and
an unconditional guaranty for the ultimate payment of
--------
principal, below).
In the event of a default, MBIA will guarantee
timely payment of principal as follows:
. The "date of resolution" refers to the
------------------------
distribution date immediately following final
resolution of a loan that has gone into default.
Upon this date:
- servicer advances with respect to the defaulted
loan are repaid,
- net principal recovery is available to the Trust
in cash, and
- losses are allocated to the junior-most
outstanding bond class (in an amount equal to
remaining scheduled balance less net principal
recovery).
. Up to and including the date of resolution,
------------------------------------------
payments of principal and interest will be
advanced by the servicer (subject to the
servicer's determination of recoverability - for
limitations on advancing, see "Advances" above and
the offering documents).
. Upon resolution, the Trustee will hold the net
---------------
principal recovery. MBIA will guarantee that the
net principal recovery will ultimately be
delivered to the Trust.
. Following the date of resolution, the Trustee
--------------------------------
will apply the net principal recovery to pay the
Class A Certificates scheduled principal that
would have been due under the loan had the loan
not defaulted (along with interest at the Class A
Certificates' coupon rates).
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
The Trustee will continue to deliver these payments until
either (i) it has exhausted the net principal recovery (or
is required to accelerate repayment to the Trust of the net
principal recovery, see below) or (ii) the Class A
Certificates are fully repaid.
. Upon retirement of the Class A Certificates, the
-------------------------------------------
Trustee will release any remaining net principal recovery
for payment of principal to the Subordinate Classes.
. Under no circumstances will the Trustee accept or
----------------------
continue to hold net principal recoveries (secured by
MBIA's guaranty) if holding such recoveries would cause
the Class A Certificates to be downgraded. In this event,
the Trustee (i) will not receive the net principal
recovery and (ii) will immediately accelerate payment to
the Trust of all unamortized net principal recoveries.
Any such amounts will be distributed as principal.
Ultimate principal
(unconditional) MBIA will unconditionally guaranty ultimate payment of
principal to each of the Class A Certificates. To the extent
that the loan collateral proves insufficient to repay any
principal balance of the Class A Certificates, MBIA will pay
the difference (on or before the rated final distribution
date).
ERISA The Class A Certificates will, and the Subordinate and
Class X Certificates will not, be ERISA eligible.
----
SMMEA The Certificates will not be SMMEA eligible.
---
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
Corporate lease structures: Bond-type, triple-net and double-net
Lease Type
. Bond-type In general, tenant is responsible for: 17.87% of pool
. rent payments
. property taxes & insurance
. property maintenance
. risk of casualty or condemnation
. landlord has no monetary obligations.
In general:
. tenant cannot terminate lease
. in condemnation, tenant is obligated
to make an irrevocable, rejectable
purchase offer for the condemned
property in an amount at least equal
to the loan balance.
- -------------------------------------------------------------------------------
. Triple net In general, tenant is responsible for: 41.24% of pool
. rent payments
. property taxes & insurance
. property maintenance.
In general, tenant can terminate or abate
rent:
. in the event of a casualty or condemnation. Termination and
abatement risks are insured against or otherwise mitigated.
See "Plugging `holes' in corporate leases", below.
- -------------------------------------------------------------------------------
. Double net In general, tenant is responsible for: 40.88% of pool
. rent payments are Double Net
Leases
. property taxes & insurance
. property maintenance. 12.95% of pool
are Double Net
Leases to
the USPS
In general, tenant can terminate or abate rent:
. in the event of a casualty or condemnation
. if the landlord fails to perform certain lease
obligations (generally capital items (e.g., roof,
structure, parking or compliance)).
Termination and abatement risks are insured or
otherwise mitigated. Estimated capital items are
pre-funded. See "Plugging `holes' in corporate
leases", below.
- -------------------------------------------------------------------------------
Term Structure
. Fully
amortizing Primary term lease payments and fixed 69.49% of pool
contractual rent steps are sufficient to fully
amortize loan balance.
- -------------------------------------------------------------------------------
. Extended Primary term lease payments and contractual 4.35% of pool
rent steps are insufficient to fully amortize
loan balance; repayment depends, in part, on one
or more optional lease extensions. The loan
balance is substantially reduced by amortization
during the fixed lease term; lease extension risk
is insured by a third party insurer.
See "Plugging `holes' in corporate leases", below.
- -------------------------------------------------------------------------------
. Balloon Loan balance is substantially reduced by 26.16% of pool
amortization over lease term; remaining
balloon balance is secured by third-party
residual value insurance and by residual value of
---
property.
See "Plugging `holes' in corporate leases", below.
- -------------------------------------------------------------------------------
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
Lease enhancements: plugging "holes" in leases
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Applies to Lease risk Enhancement offset % of pool
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Triple or Double Casualty or Condemnation Insurance Policy - A lease enhancement insurance policy 82.13% of pool
Net Corporate Risk pays substantially all amounts due under the lease for
Leases the remaining loan term or in a lump sum
(covering the then outstanding loan balance).
The policy is issued by a AAA-rated insurer (an
affiliate of AIG or Chubb).
- ----------------------------------------------------------------------------------------------------------------------------------
Double Net Landlord Lease Default Risk Servicing Obligations - The servicer has comprehensive 40.88% of pool are
Corporate Leases servicing, monitoring and advancing obligations intended Double Net Leases
Landlord fails to perform to prevent a termination or abatement.
under lease terms. 12.95% of pool are
Servicer is obligated to use its best efforts to Double Net Leases
maintain the lease in place, including paying and to the USPS
For example, capital items performing landlord obligations as necessary./1/
are not completed on time. The servicer is not permitted to foreclose on a
property until advances exceed 60% of property value.
---------------------
Servicer's activities are funded as follows:
. Loan Level Reserves - A reserve fund established
by the borrower and administered by the servicer
is available to cover maintenance, repair and
replacement expenses. Based on an engineer's
estimate, the reserve fund is generally structured
to provide at least 125% (150% average for the
USPS loans) of the landlord's expected maintenance,
repair and replacement costs. The reserve is funded
by a portion of the monthly lease payments not
needed for debt service; the loan may also require
an initial deposit into the reserve.
. Property Cash Flow - If landlord fails to perform
lease obligations, servicer can sweep excess property
cash flow from lockbox. Double net leases are
typically structured to provide excess cash flow
(i.e., the debt service coverage ratio exceeds 1.0x).
. Expense Reserve Fund - Servicer deposits 0.3% of
each lease payment on approximately 66% of the loans.
The fund is expected to grow to approximately
$3.4 million over the life of the transaction,
assuming no draws, no defaults, no prepayments and
a 5% reinvestment rate. The cumulative balance in
the fund is available across all loans to cover
landlord's obligations. This fund also represents
additional credit support for all sequential-pay
bond classes.
. Servicer advances - The servicer must advance funds,
to the extent recoverable, to cover scheduled loan
payments and landlord's obligations.
- ----------------------------------------------------------------------------------------------------------------------------------
Extended Lease Renewal Risk Insurance Policy - An extended amortization insurance 4.35% of pool
Amortization Loans policy pays substantially all amounts due under the
Tenant fails to renew the loan over the loan term or in a lump sum. The policy
lease upon expiration of is issued by a AAA-rated subsidiary of Berkshire
initial term. Hathaway.
At expiration of lease term, initial loan balance
is substantially reduced by amortization.
- ----------------------------------------------------------------------------------------------------------------------------------
Balloon Balances Balloon Default Risk Insurance Policy - A residual value insurance 26.16% of pool
policy guarantees that property's residual value
Lease payments do not will at least equal loan balance. Policies are
fully amortize loan issued by Royal Indemnity (rated AA-) or RVI (rated A).
balance.
At balloon, initial loan balance is substantially
reduced by amortization.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ On the USPS loans, the servicer only advances unpaid expenses for which the
landlord was otherwise required to reserve.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be give with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or
implied representations or warranties for, statements contained in, and
omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
<PAGE>
How do corporate lease loans compare to typical conduit CMBS collateral?
<TABLE>
<CAPTION>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Typical Conduit CMBS Collateral Corporate Lease Loans
- ----------------------------------------------------------------------------------------------------------------------------------
Balloon Risk Balloon Risk
Loan has a substantial balloon payment (generally exceeding 90% of Loan is fully amortizing (or has a relatively small
initial balance). balloon payment that is insured by a company rated
at least "A").
Typical amortization schedule is 30 years. Typical amortization schedule is 20 years.
- ----------------------------------------------------------------------------------------------------------------------------------
Collateral Assignment of Leases Collateral Assignment of Leases
Collateral includes assignment of leases that are recourse to tenants. Collateral includes assignment of a single recourse
Leases typically expire before balloon is due. Mortgage lender is lease to a corporate tenant (in BSMCS 1999-CLF1, over
exposed to substantial leasing risk. 95% are investment grade).
Lease extends through or beyond loan's maturity (or, in a
few cases, final few cases, final lease term is
contingent - this exposure is insured by a company rated
AAA).
- ----------------------------------------------------------------------------------------------------------------------------------
Recourse to Borrower Recourse to Borrower
Loan is not recourse to borrower. Loan is not recourse to borrower.
In an adverse real estate market, borrower may have little incentive to In any real estate market, borrower cannot manipulate
invest in re-leasing property (or, if borrower controls several performance of property (single lease remains in place
properties, may face a conflict of interest). regardless of market conditions).
- ----------------------------------------------------------------------------------------------------------------------------------
Quality of Tenant Quality of Tenant
Varies. Commercial properties may include U.S. Government, public or Typically a U.S. Government-sponsored enterprise or
private corporations, or individuals. investment-grade publicly traded company.
Multifamily properties are generally leased to individuals. Some tenants may be private companies with rated debt.
Hospitality and entertainment properties do not have leases. A small number of tenants are below investment grade (in
BSCMS 1999-CLF1, 4.6% of the loans are secured by leases
to below-investment-grade tenants).
The combination of investment grade tenants and long lease
terms provide relatively strong protection against
economic downturns.
- ----------------------------------------------------------------------------------------------------------------------------------
Ongoing Information / Disclosure Ongoing Information / Disclosure
Disclosure at issuance is very good. Loan-level underwriting is usually Information on lessees' credit is publicly available.
current. Most have public credit ratings. Investors are
less reliant on rating agencies for surveillance.
Information gets stale over time - ongoing reporting is not nearly as
complete or accurate as initial information.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
What are typical steps to default, bankruptcy and foreclosure?
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Typical Conduit CMBS Collateral Corporate Lease Loans
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Borrower defaults on payment or balloon Tenant declares bankruptcy
Since loan is non-recourse, a default could be caused by an adverse real Tenants are substantial companies. Operating leases (or
estate market, the bankruptcy of a tenant, or (at balloon) high lease guarantees) are among their senior-most
interest rates or a tight credit market. obligations.
- ----------------------------------------------------------------------------------------------------------------------------------
Borrowing entity declares bankruptcy Lease is affirmed or rejected in court
Entity is typically single purpose - borrower does not jeopardize other Upon bankruptcy, tenant must reject or affirm lease.
assets by declaring bankruptcy. Retailers may be highly dependent on leased properties
to generate cash flow - these tenants typically affirm
leases for profitable locations. In other cases, leases
may be affirmed as part of an asset sale (if a parent
company divests itself of a business line in a given
region, for example).
- ----------------------------------------------------------------------------------------------------------------------------------
Lender forecloses on property If lease is affirmed, loan stays current
Although the tenant's credit quality has fallen
dramatically, the lease and therefore the loan payments
continue.
- ----------------------------------------------------------------------------------------------------------------------------------
If lease is rejected, tenant is removed
A rejected lease does not necessarily cause a loan
---------------------------------------------------
default. The borrower, usually an independent real estate
--------
investor, may judge that his equity position in the
property is valuable. Relatively rapid loan amortization
allows borrowers to build equity quickly.
Also, in addition to the mortgage lien and a claim for
any unpaid rent already due, the lender would have a
bankruptcy claim against the tenant limited to the
greater of rent for 1 year or for 15% of the remaining
term (capped at 3 years).
- ----------------------------------------------------------------------------------------------------------------------------------
If the property leases well, loan stays current
The loan payments are funded by lease income from a new
tenant.
- ----------------------------------------------------------------------------------------------------------------------------------
If property leases poorly, the loan may default
If a new tenant pays a substantially lower rent, income
may be insufficient to fund loan payments.
- ----------------------------------------------------------------------------------------------------------------------------------
Borrowing entity declares bankruptcy
Entity is typically single purpose - borrower does not
jeopardize other assets by declaring bankruptcy.
- ----------------------------------------------------------------------------------------------------------------------------------
Lender forecloses on property
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
Stratification Tables
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Lease Type
- -----------------------------------------------------------------------------------------------------
Number of Aggregate Cut-Off Date % of Collateral Gross
Loans Balance Pool Coupon Rate
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Triple Net 24 162,059,957.42 41.24% 7.12%
- -----------------------------------------------------------------------------------------------------
Double Net 136 160,628,681.64 40.88% 7.25%
- -----------------------------------------------------------------------------------------------------
Bond 11 70,232,799.01 17.87% 7.89%
- -----------------------------------------------------------------------------------------------------
Total 171 392,921,438.07 100.00% 7.31%
- -----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Primary Industry of Lease Obligor/Guarantor
- -----------------------------------------------------------------------------------------------------
Number of Aggregate Cut-Off Date % of Collateral Gross
Loans Balance Pool Coupon Rate
<S> <C> <C> <C> <C>
Retail Drug 49 121,686,373.05 30.97% 7.22%
- -----------------------------------------------------------------------------------------------------
Grocery 10 85,939,230.58 21.87% 7.27%
- -----------------------------------------------------------------------------------------------------
U.S. Post Office 96 50,869,538.54 12.95% 7.41%
- -----------------------------------------------------------------------------------------------------
Building Materials 2 28,329,862.13 7.21% 6.75%
- -----------------------------------------------------------------------------------------------------
Banking 2 25,432,213.04 6.47% 6.87%
- -----------------------------------------------------------------------------------------------------
Insurance 1 20,060,746.87 5.11% 8.38%
- -----------------------------------------------------------------------------------------------------
Retail Discount 1 11,979,937.94 3.05% 7.17%
- -----------------------------------------------------------------------------------------------------
Building Material Retailer 1 11,142,513.82 2.84% 6.71%
- -----------------------------------------------------------------------------------------------------
Theater 1 8,605,959.15 2.19% 7.67%
- -----------------------------------------------------------------------------------------------------
Hotel 1 7,576,861.78 1.93% 8.50%
- -----------------------------------------------------------------------------------------------------
Retail 1 7,558,551.64 1.92% 8.00%
- -----------------------------------------------------------------------------------------------------
Retail Electronics 3 7,533,266.37 1.92% 8.00%
- -----------------------------------------------------------------------------------------------------
Computers 1 3,180,141.93 0.81% 6.98%
- -----------------------------------------------------------------------------------------------------
Retail Jewelry 1 2,042,215.01 0.52% 7.89%
- -----------------------------------------------------------------------------------------------------
Food Service 1 984,026.22 0.25% 7.15%
- -----------------------------------------------------------------------------------------------------
Total 171 392,921,438.07 100.00% 7.31%
- -----------------------------------------------------------------------------------------------------
</TABLE>
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
Stratification Tables (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Geographic Distribution
- --------------------------------------------------------------------------------------------------
Location of Leased Number of Aggregate Cut-Off Date % of Collateral Gross
Property Loans Balance Pool Coupon Rate
<S> <C> <C> <C> <C>
AL 3 7,306,809.84 1.86% 7.29%
- --------------------------------------------------------------------------------------------------
AR 1 3,270,830.26 0.83% 8.00%
- --------------------------------------------------------------------------------------------------
CA 3 9,035,456.26 2.30% 7.86%
- --------------------------------------------------------------------------------------------------
CO 1 1,259,329.81 0.32% 6.54%
- --------------------------------------------------------------------------------------------------
CT 3 30,250,239.16 7.70% 8.12%
- --------------------------------------------------------------------------------------------------
DC 1 984,026.22 0.25% 7.15%
- --------------------------------------------------------------------------------------------------
FL 3 7,787,781.57 1.98% 7.28%
- --------------------------------------------------------------------------------------------------
GA 6 21,533,317.31 5.48% 7.13%
- --------------------------------------------------------------------------------------------------
IA 7 2,387,691.32 0.61% 7.47%
- --------------------------------------------------------------------------------------------------
IL 1 2,647,702.59 0.67% 7.60%
- --------------------------------------------------------------------------------------------------
IN 8 17,590,967.57 4.48% 6.85%
- --------------------------------------------------------------------------------------------------
KS 2 2,749,431.15 0.70% 6.84%
- --------------------------------------------------------------------------------------------------
KY 4 2,043,843.49 0.52% 7.66%
- --------------------------------------------------------------------------------------------------
LA 2 2,927,734.11 0.75% 8.03%
- --------------------------------------------------------------------------------------------------
MA 4 19,454,004.60 4.95% 7.49%
- --------------------------------------------------------------------------------------------------
ME 4 1,399,399.85 0.36% 7.87%
- --------------------------------------------------------------------------------------------------
MI 7 15,323,779.10 3.90% 7.38%
- --------------------------------------------------------------------------------------------------
MN 4 3,892,399.70 0.99% 7.16%
- --------------------------------------------------------------------------------------------------
MS 4 6,177,360.35 1.57% 7.49%
- --------------------------------------------------------------------------------------------------
MT 2 1,584,233.66 0.40% 7.58%
- --------------------------------------------------------------------------------------------------
NC 4 7,142,145.65 1.82% 7.32%
- --------------------------------------------------------------------------------------------------
NH 8 10,906,049.55 2.78% 7.39%
- --------------------------------------------------------------------------------------------------
NJ 3 44,754,833.83 11.39% 7.03%
- --------------------------------------------------------------------------------------------------
NM 6 5,282,765.00 1.34% 6.89%
- --------------------------------------------------------------------------------------------------
NV 4 25,212,132.45 6.42% 7.20%
- --------------------------------------------------------------------------------------------------
NY 21 33,890,175.46 8.63% 7.34%
- --------------------------------------------------------------------------------------------------
OH 4 26,557,980.98 6.76% 6.87%
- --------------------------------------------------------------------------------------------------
OK 4 1,296,309.33 0.33% 7.79%
- --------------------------------------------------------------------------------------------------
OR 1 585,038.18 0.15% 7.70%
- --------------------------------------------------------------------------------------------------
PA 6 16,195,957.09 4.12% 7.12%
- --------------------------------------------------------------------------------------------------
RI 1 546,254.70 0.14% 7.96%
- --------------------------------------------------------------------------------------------------
SC 2 8,068,406.89 2.05% 7.08%
- --------------------------------------------------------------------------------------------------
TN 1 637,262.76 0.16% 8.21%
- --------------------------------------------------------------------------------------------------
TX 16 17,132,360.36 4.36% 7.12%
- --------------------------------------------------------------------------------------------------
UT 1 165,149.01 0.04% 7.22%
- --------------------------------------------------------------------------------------------------
VA 6 13,237,113.83 3.37% 7.24%
- --------------------------------------------------------------------------------------------------
WA 11 17,215,762.97 4.38% 7.79%
- --------------------------------------------------------------------------------------------------
WI 1 3,262,897.68 0.83% 6.90%
- --------------------------------------------------------------------------------------------------
WV 1 352,791.96 0.09% 8.01%
- --------------------------------------------------------------------------------------------------
WY 1 873,712.49 0.22% 7.40%
- --------------------------------------------------------------------------------------------------
Total 172* 392,921,438.08 100.00% 7.31%
- --------------------------------------------------------------------------------------------------
</TABLE>
* Number of properties exceeds number of loans because one loan is secured by
two properties.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
Stratification Tables (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Balance at Cut-Off Date
- ------------------------------------------------------------------------------------------------------
Number of Loans Aggregate Cut-Off % of Gross Coupon
Date Balance Collateral Rate
Pool
<S> <C> <C> <C> <C>
$0 - $99,999 1 98,951.07 0.03% 7.90%
- ------------------------------------------------------------------------------------------------------
$100,000 - $199,999 7 1,199,052.25 0.31% 7.73%
- ------------------------------------------------------------------------------------------------------
$200,000 - $299,999 13 3,378,827.49 0.86% 7.72%
- ------------------------------------------------------------------------------------------------------
$300,000 - $399,999 20 6,853,022.84 1.74% 7.62%
- ------------------------------------------------------------------------------------------------------
$400,000 - $499,999 15 6,853,779.71 1.74% 7.66%
- ------------------------------------------------------------------------------------------------------
$500,000 - $599,999 12 6,552,676.58 1.67% 7.58%
- ------------------------------------------------------------------------------------------------------
$600,000 - $699,999 7 4,577,601.09 1.17% 7.44%
- ------------------------------------------------------------------------------------------------------
$700,000 - $799,999 6 4,606,766.42 1.17% 7.34%
- ------------------------------------------------------------------------------------------------------
$800,000 - $899,999 2 1,715,802.64 0.44% 6.80%
- ------------------------------------------------------------------------------------------------------
$900,000 - $999,999 4 3,819,522.35 0.97% 7.11%
- ------------------------------------------------------------------------------------------------------
$1,000,000 - $1,999,999 27 38,194,773.77 9.72% 7.33%
- ------------------------------------------------------------------------------------------------------
$2,000,000 - $2,999,999 24 58,603,828.09 14.91% 7.31%
- ------------------------------------------------------------------------------------------------------
$3,000,000 - $3,999,999 13 44,446,886.65 11.31% 7.14%
- ------------------------------------------------------------------------------------------------------
$4,000,000 - $4,999,999 4 18,258,495.36 4.65% 7.20%
- ------------------------------------------------------------------------------------------------------
$5,000,000 - $5,999,999 1 5,041,298.70 1.28% 6.76%
- ------------------------------------------------------------------------------------------------------
$6,000,000 - $6,999,999 2 13,361,481.10 3.40% 7.24%
- ------------------------------------------------------------------------------------------------------
$7,000,000 - $7,999,999 3 22,820,231.02 5.81% 7.91%
- ------------------------------------------------------------------------------------------------------
$8,000,000 - $8,999,999 2 17,586,153.29 4.48% 7.57%
- ------------------------------------------------------------------------------------------------------
$9,000,000 - $9,999,999 1 9,758,533.24 2.48% 7.35%
- ------------------------------------------------------------------------------------------------------
$11,000,000 - $11,999,999 2 23,122,451.76 5.88% 6.95%
- ------------------------------------------------------------------------------------------------------
$17,000,000 - $17,999,999 1 17,342,020.96 4.41% 7.20%
- ------------------------------------------------------------------------------------------------------
$18,000,000 - $18,999,999 1 18,595,460.93 4.73% 7.32%
- ------------------------------------------------------------------------------------------------------
$20,000,000 - $20,999,999 1 20,060,746.87 5.11% 8.38%
- ------------------------------------------------------------------------------------------------------
$22,000,000 - $22,999,999 1 22,784,510.45 5.80% 6.79%
- ------------------------------------------------------------------------------------------------------
$23,000,000 - $23,999,999 1 23,288,563.43 5.93% 6.75%
- ------------------------------------------------------------------------------------------------------
Total 171 392,921,438.07 100.00% 7.31%
- ------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Year of Loan Origination
- ------------------------------------------------------------------------------------------------------
Number of Loans Aggregate Cut-Off % of Gross Coupon
Date Balance Collateral Rate
Pool
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 1 20,060,746.87 5.11% 8.38%
- ------------------------------------------------------------------------------------------------------
1997 20 11,517,206.44 2.93% 7.98%
- ------------------------------------------------------------------------------------------------------
1998 95 190,971,862.31 48.60% 7.09%
- ------------------------------------------------------------------------------------------------------
1999 55 170,371,622.45 43.36% 7.39%
- ------------------------------------------------------------------------------------------------------
Total 171 392,921,438.07 100.00% 7.31%
- ------------------------------------------------------------------------------------------------------
</TABLE>
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
Stratification Tables (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Gross Coupon Rate
- ------------------------------------------------------------------------------------------------------
Number of Loans Aggregate Cut-Off % of Gross Coupon
Date Balance Collateral Rate
Pool
<S> <C> <C> <C> <C>
6.00% - 6.24% 2 2,087,241.37 0.53% 6.22%
- ------------------------------------------------------------------------------------------------------
6.25% - 6.49% 2 702,784.11 0.18% 6.33%
- ------------------------------------------------------------------------------------------------------
6.50% - 6.74% 4 14,325,586.07 3.65% 6.68%
- ------------------------------------------------------------------------------------------------------
6.75% - 6.99% 24 86,042,497.49 21.90% 6.81%
- ------------------------------------------------------------------------------------------------------
7.00% - 7.24% 24 87,479,177.22 22.26% 7.15%
- ------------------------------------------------------------------------------------------------------
7.25% - 7.49% 33 96,549,126.53 24.57% 7.32%
- ------------------------------------------------------------------------------------------------------
7.50% - 7.74% 36 39,145,826.40 9.96% 7.63%
- ------------------------------------------------------------------------------------------------------
7.75% - 7.99% 27 16,883,021.95 4.30% 7.85%
- ------------------------------------------------------------------------------------------------------
8.00% - 8.24% 14 21,339,903.24 5.43% 8.02%
- ------------------------------------------------------------------------------------------------------
8.25% - 8.49% 4 20,789,411.91 5.29% 8.37%
- ------------------------------------------------------------------------------------------------------
8.50% - 8.74% 1 7,576,861.78 1.93% 8.50%
- ------------------------------------------------------------------------------------------------------
Total 171 392,921,438.07 100.00% 7.31%
- ------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year of Loan Maturity
- --------------------------------------------------------------------------------------
Number of Aggregate Cut-Off % of Gross Coupon Rate
Loans Date Balance Collateral
Pool
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2003 1 138,522.91 0.04% 7.68%
- --------------------------------------------------------------------------------------
2006 1 376,821.32 0.10% 7.75%
- --------------------------------------------------------------------------------------
2007 1 20,060,746.87 5.11% 8.38%
- --------------------------------------------------------------------------------------
2012 2 679,403.58 0.17% 7.77%
- --------------------------------------------------------------------------------------
2013 7 25,159,948.59 6.40% 6.86%
- --------------------------------------------------------------------------------------
2014 6 5,331,539.07 1.36% 7.24%
- --------------------------------------------------------------------------------------
2015 1 459,477.64 0.12% 7.86%
- --------------------------------------------------------------------------------------
2016 10 2,702,504.40 0.69% 7.79%
- --------------------------------------------------------------------------------------
2017 17 13,526,773.25 3.44% 7.61%
- --------------------------------------------------------------------------------------
2018 79 156,008,320.09 39.70% 7.13%
- --------------------------------------------------------------------------------------
2019 25 46,542,416.17 11.85% 7.17%
- --------------------------------------------------------------------------------------
2021 4 15,110,128.15 3.85% 8.25%
- --------------------------------------------------------------------------------------
2022 1 7,558,551.64 1.92% 8.00%
- --------------------------------------------------------------------------------------
2023 7 18,439,958.10 4.69% 7.17%
- --------------------------------------------------------------------------------------
2024 8 79,395,380.35 20.21% 7.32%
- --------------------------------------------------------------------------------------
2028 1 1,430,945.94 0.36% 7.76%
- --------------------------------------------------------------------------------------
Total 171 392,921,438.07 100.00% 7.31%
- --------------------------------------------------------------------------------------
</TABLE>
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
Stratification Tables (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Remaining Term to Maturity
- --------------------------------------------------------------------------------------
Number of Aggregate Cut-Off % of Gross Coupon Rate
Loans Date Balance Collateral
Pool
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
40 - 59 1 138,522.91 0.04% 7.68%
- --------------------------------------------------------------------------------------
80 - 99 2 20,437,568.19 5.20% 8.36%
- --------------------------------------------------------------------------------------
140 - 159 1 371,942.77 0.09% 7.84%
- --------------------------------------------------------------------------------------
160 - 179 14 30,798,948.48 7.84% 6.93%
- --------------------------------------------------------------------------------------
180 - 199 2 680,368.15 0.17% 7.88%
- --------------------------------------------------------------------------------------
200 - 219 20 11,567,458.62 2.94% 7.61%
- --------------------------------------------------------------------------------------
220 - 239 109 200,430,010.38 51.01% 7.15%
- --------------------------------------------------------------------------------------
240 - 259 1 6,561,654.39 1.67% 7.25%
- --------------------------------------------------------------------------------------
260 - 279 5 22,668,679.79 5.77% 8.17%
- --------------------------------------------------------------------------------------
280 - 299 14 88,076,805.21 22.42% 7.29%
- --------------------------------------------------------------------------------------
300 - 319 1 9,758,533.24 2.48% 7.35%
- --------------------------------------------------------------------------------------
340 - 359 1 1,430,945.94 0.36% 7.76%
- --------------------------------------------------------------------------------------
Total 171 392,921,438.07 100.00% 7.31%
- --------------------------------------------------------------------------------------
</TABLE>
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
Top 7 Lease Obligors/Guarantors (Representing 60% of Pool)
United States Postal Service
Ninety-six leases are to the United States Postal Service ("USPS"), representing
12.95% of the pool. The USPS is an independent establishment of the executive
branch of the federal government which provides mail service for the United
States. The USPS delivers more than 650 million pieces of mail each day,
handling 41% of the world's mail volume. Since 1982, the USPS has been self-
supporting, receiving no government appropriations to fund its operations.
Postal rates are set by an independent body, the Postal Rate Commission. By law,
the USPS can borrow money only after notifying and offering the debt to the
Secretary of the Treasury. Treasury has exercised its right of first refusal for
USPS debt in recent years. The USPS web site is at http://www.usps.gov. The
following information was obtained from the 1998 USPS annual report.
<TABLE>
<CAPTION>
Year Ended Year Ended
USPS ($ in millions) Sept. 30,1998 Sept. 30,1997
- ------------------- ------------- -------------
<S> <C> <C>
Operating Revenue $60,072 $58,216
Operating Expenses 57,778 54,873
Operating Income 2,294 3,343
Operating Margin 3.8% 5.7%
</TABLE>
Royal Ahold (Edwards, Stop & Shop and BI-LO)
Royal Ahold (Koninklijke Ahold NV) is guarantor on four leases representing, in
total, 10.14% of the pool. Two leases are to Mayfair Supermarkets (to be
operated or operating as a Stop & Shop supermarket and an Edwards,
respectively), one lease is to Stop & Shop Supermarket, and one lease is to BI-
LO supermarket. Royal Ahold, a Netherlands corporation, is a leading
international food retailer with major operations in the U.S., the Netherlands
and elsewhere in Europe and Asia. Royal Ahold owns the U.S. supermarket chains
BI-LO, Giant Food Stores, Edwards, Finast, Tops and Stop & Shop and has
announced that it is expected to acquire Pathmark this fall. Royal Ahold's long-
term debt is rated "A" by S&P, with a negative outlook. Royal Ahold's stock
trades as ADRs on the NYSE under the symbol "AHO." Royal Ahold's web site is at
http://www.ahold.nl. The following information was obtained from Royal Ahold's
1998 annual report and its first quarter 1999 earnings release.
<TABLE>
<CAPTION>
Sixteen Weeks Ended Year Ended Year Ended
Royal Ahold ($ in millions)* Apr. 25, 1999 Jan. 3, 1999 Dec. 28, 1997
- ---------------------------- -------------------- ------------------- --------------------
<S> <C> <C> <C>
Net Sales --- $30,946 $25,272
Total Sales 9,873 --- ---
Net Earnings 186 639 467
Total Assets 12,877 13,351 9,415
Total Shareholders' Equity 2,160 1,814 1,544
</TABLE>
*1.886 and 2.001 NLG/$US exchange rates were used to derive year end Jan. 3,
1999, and Dec. 28, 1997, balance sheet items, respectively. A 0.94 Euro/$US
exchange rate was used to derive sixteen weeks ended Apr. 25, 1999, balance
sheet items.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
CVS Corporation
Seventeen leases are guaranteed by CVS Corporation ("CVS"), representing 9.43%
of the pool. CVS, one of the largest drugstore chains in America, is the leading
drugstore chain in the Northeast, Mid-Atlantic, Southeast and Midwest regions.
As of the end of 1998, CVS operated 4,122 stores in 24 states and the District
of Columbia. CVS' long-term debt is rated "A" by S&P. CVS stock trades on the
NYSE under the symbol "CVS," and its web site is at http://www.cvs.com. The
following information was obtained from CVS' 1998 annual report on Form 10-K for
the fiscal year ended December 31, 1997, and Form 10-Q for the three months
ended March 27, 1999.
<TABLE>
<CAPTION>
Three Months Ended Year Ended Year Ended
CVS Corporation ($ in millions) Mar. 27, 1999 Dec. 31, 1998 Dec. 31, 1997
- ------------------------------ ------------- ------------- -------------
<S> <C> <C> <C>
Net Sales $4,241 $15,274 $13,750
Net Earnings 165 396 77
Total Assets 6,842 6,736 5,979
Total Shareholders' Equity 3,264 3,111 2,615
</TABLE>
Rite Aid Corporation
Rite Aid Corporation ("Rite Aid") is tenant or guarantor on fourteen leases
representing 8.12% of the pool. Rite Aid operates in two business segments; 1) a
retail drug segment, and 2) a pharmacy benefit management ("PBM") segment, that
includes other managed health care services and mail-order pharmacy services.
The company's business segments are organized according to the products and
services offered to its customers. The company's dominant business segment is
the operation of one of the largest retail drugstore chains in America. In
addition, through its acquisition of PCS Health Systems, Inc. from Eli Lilly and
Company in the fourth quarter of fiscal 1999, the company operates a PBM segment
which offers pharmacy benefit management, mail-order pharmacy services,
marketing prescription plans and selling other managed health care services to
employers, health plans and their members and government-sponsored employee
benefit programs. In June 1999, the company announced that it had signed a ten-
year agreement with General Nutrition Centers, Inc. and drugstore.com that will
result in a 25.3% ownership in drugstore.com, for a cash investment of
$7,600,000 as well as other marketing commitments and obligations.
Rite Aid Corporation's long-term senior unsecured debt is rated "BBB" by S&P.
Rite Aid Corporation's stock trades on the NYSE under the symbol "RAD," and its
web site is at http://www.riteaid.com. The following information was obtained
from Rite Aid's 1998 annual report on Form 10-K for the fiscal year ended
February 27, 1999, and Form 10-Q for the three months ended May 29, 1999.
<TABLE>
<CAPTION>
Three Months Ended Year Ended Year Ended
Rite Aid Corporation ($ in millions) May 29, 1999 Feb. 27, 1999 Feb. 28, 1998
- ----------------------------------- ------------ ------------- -------------
<S> <C> <C> <C>
Sales $ 3,625 $12,732 $11,375
Net Income 81 144 306
Total Assets 10,678 10,422 7,612
Total Shareholders' Equity 3,005 2,954 2,907
</TABLE>
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
Walgreen Co.
Walgreen Co. ("Walgreens") is tenant or guarantor on nine leases representing
6.98% of the pool. Walgreens is America's largest drugstore retailer. Walgreens
serves customers in 35 states and Puerto Rico through 2,547 retail drugstores
and 2 mail service facilities. The company filled 226 million prescriptions in
fiscal 1998 - approximately 9 percent of the U.S. retail market. Walgreen
announced in June 1999 that it intends to launch a "full service" internet
pharmacy in September 1999, expanding beyond its online prescription refill
service by allowing new prescription orders over the Net. Walgreens' long-term
debt is rated "A+" by S&P. Walgreens' common stock is traded on the NYSE under
the symbol "WAG," and its web page is located at http://www.walgreens.com. The
following information was obtained from Walgreens' 1997 annual report on Form
10-K for the fiscal year ended August 31, 1998, and Form 10-Q for the nine
months ended May 31, 1999.
<TABLE>
<CAPTION>
Nine Months Ended Year Ended Year Ended
Walgreen Co. ($ in millions) May 31, 1999 Aug. 31, 1998 Aug. 31, 1997
- --------------------------- ------------ ------------- -------------
<S> <C> <C> <C>
Net Sales $13,279 $15,307 $13,363
Net Earnings 464 511 436
Total Assets 5,592 4,902 4,207
Total Shareholders' Equity 3,338 2,849 2,373
</TABLE>
Eckerd Corporation
Eckerd Corporation ("Eckerd") is tenant or guarantor on ten leases representing
6.45% of the pool. Eckerd operates the Eckerd drugstore chain, which is one
of the largest drugstore chains in the United States. Eckerd operates
approximately 2,900 drugstores located throughout the northeast, southeast, and
sunbelt regions of the United States, including the Eckerd's March 1999
acquisition of the New York-based Genovese drugstore chain. Eckerd is a wholly-
owned subsidiary of J.C. Penney Company, Inc. ("J.C. Penney"). J.C. Penney's
long-term senior unsecured obligations are rated "BBB+" by S&P.
J.C. Penney's common stock trades on the NYSE under the symbol "JCP." Eckerd's
web site is located at http://www.eckerd.com. The following information was
obtained from J.C. Penney's 1998 annual report on Form 10-K for the fiscal year
ended January 31, 1999, and Form 10-Q for the thirteen weeks ended May 1, 1999.
<TABLE>
<CAPTION>
13 Weeks Ended Year Ended Year Ended
Eckerd Corporation ($ in millions) May 1, 1999 Jan. 30, 1999 Jan. 31, 1998
- --------------------------------- ----------- ------------- -------------
<S> <C> <C> <C>
Net Retail Sales $3,047 -- --
Operating Profit 129 -- --
Revenue -- 10,325 9,663
Operating Earnings -- 254 347
Total Assets -- 6,361 6,064
</TABLE>
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
<PAGE>
Home Depot U.S.A., Inc.
One lease, representing 5.93% of the pool, is to Home Depot U.S.A., Inc. ("Home
Depot"). Home Depot is the nation's leading retailer in the home improvement
industry. Home Depot operates over 800 stores in 44 states, five Canadian
provinces and in Puerto Rico and Chile. Home Depot is the primary operating
subsidiary of Home Depot, Inc. The long-term obligations of Home Depot, Inc. are
rated "AA-" by S&P. Home Depot, Inc.'s stock trades on the NYSE under the symbol
"HD." Home Depot's web page is located at http://www.homedepot.com. The
following information was obtained from Home Depot, Inc.'s 1998 annual report on
Form 10-K for the fiscal year ended January 31, 1999, and Form 10-Q for the
three months ended May 2, 1999.
<TABLE>
<CAPTION>
Three Months Ended Year Ended Year Ended
Home Depot, Inc. ($ in millions) May 2, 1999 Jan. 31, 1999 Feb. 1, 1998
- -------------------------------- ----------- ------------- ------------
<S> <C> <C> <C>
Net Sales $ 8,952 $30,219 $24,156
Net Earnings 489 1,614 1,160
Total Assets 15,199 13,465 11,229
Total Shareholders' Equity 9,329 8,740 7,098
</TABLE>
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to
definitive offering documents, prepared by the issuer, which will contain
material information not contained herein and to which prospective purchasers
are referred. In the event of any such offering, this information shall be
deemed superseded in its entirety by such offering documents. Any decision to
invest in such securities should be made only after reviewing such offering
documents. Bear, Stearns & Co. Inc., Banc of America Securities LLC and
Prudential Securities Incorporated disclaim any and all liability relating to
this information, including without limitation, any express or implied
representations or warranties for, statements contained in, and omissions from,
this information. This information should only be considered after reading the
Statement Regarding Assumptions as to Securities, Pricing Estimates, and Other
Information (the "Statement") which is attached. Do not use or rely on this
information if you have not received the Statement. You may obtain a copy of the
Statement from your sales representative.
