SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-28340
AMERICAN TAX-EXEMPT BOND TRUST
------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-7033312
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
- - -------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)421-5333
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
<PAGE>
AMERICAN TAX-EXEMPT BOND TRUST
Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------- -----------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Investment in First Mortgage
Bonds - at fair value (Note 2) $24,756,886 $24,674,787
Cash and cash equivalents 569,544 1,081,939
Marketable securities 500,000 200,000
Organization costs (net of
accumulated amortization of
$30,000 and $27,500, respectively) 20,000 22,500
Accrued interest receivable 182,531 181,696
----------- -----------
Total assets $26,028,961 $26,160,922
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Due to affiliates $ 465,245 $ 436,197
Accounts payable 19,786 33,150
----------- -----------
Total liabilities 485,031 469,347
----------- -----------
Shareholders' equity:
Beneficial owner's equity-manager (15,598) (14,098)
Beneficial owners' equity-
shareholders (1,479,414
and 1,476,222 shares
issued and outstanding,
respectively) 25,643,389 25,731,175
Treasury shares of beneficial
interest (15,892 and 8,485 shares,
respectively) (301,940) (161,207)
Accumulated other comprehensive
income:
Net unrealized gain on First
Mortgage Bonds 218,079 135,705
----------- -----------
Total shareholders' equity 25,543,930 25,691,575
----------- -----------
Total liabilities and shareholders'
equity $26,028,961 $26,160,922
=========== ===========
</TABLE>
See Accompanying Notes to Financial Statements
2
<PAGE>
AMERICAN TAX-EXEMPT BOND TRUST
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1998 1997
---- ----
<S> <C> <C>
Revenues
Interest income:
First Mortgage Bonds (Note 2) $506,531 $338,002
Tax-Exempt Securities 0 1,274
Marketable Securities 9,287 72,742
-------- --------
Total revenues 515,818 412,018
-------- --------
Expenses:
General and administrative 12,457 29,744
General and administrative-
related parties (Note 3) 13,816 24,060
Loan servicing fees 14,656 9,632
Amortization of organization
costs 2,500 2,500
-------- --------
Total expenses 43,429 65,936
-------- --------
Net income $472,389 $346,082
======== ========
Allocation of net income
Shareholders $438,243 $322,790
Manager 4,427 3,261
Special distributions to Manager
(Note 3) 29,719 20,031
-------- --------
Net income $472,389 $346,082
======== =======
Net income per weighted
average share-shareholders $ .30 $ .22
======== ========
</TABLE>
See Accompanying Notes to Finacial Statements
3
<PAGE>
AMERICAN TAX-EXEMPT BOND TRUST
Statement of Changes in Shareholders' Equity
(Unaudited)
<TABLE>
<CAPTION>
Net
Unrealized
Beneficial Beneficial Treasury Gain on
Owners' Owner's Shares of First
Equity- Equity- Beneficial Mortgage
Total Shareholders Manager Interest Bonds
----- ------------ ------- -------- -----
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1998 $25,691,575 $25,731,175 $(14,098) $(161,207) $135,705
Issuance of shares of beneficial interest 60,646 60,646 0 0 0
Net income 472,389 438,243 34,146 0 0
Distributions (622,321) (586,675) (35,646) 0 0
Net unrealized gain on First Mortgage Bonds 82,374 0 0 0 82,374
Purchase of treasury shares of beneficial (140,733) 0 0 (140,733) 0
interest ----------- ----------- -------- --------- --------
Balance at March 31, 1998 $25,543,930 $25,643,389 $(15,598) $(301,940) $218,079
=========== =========== ======== ========= ========
</TABLE>
See Accompanying Notes to Financial Statements
4
<PAGE>
AMERICAN TAX-EXEMPT BOND TRUST
Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31,
------------------
1998 1997
---- ----
Cash flows from operating activities:
Net income $ 472,389 $ 346,082
--------- ---------
Adjustments to reconcile net
income to net cash
provided by operating activities
Amortization expense-
organization costs 2,500 2,500
Amortization expense-loan
origination costs 26,889 12,042
Amortization of REMIC premium 0 476
Changes in operating assets and
liabilities:
Increase in other assets 0 (80,100)
(Increase) decrease in accrued
interest receivable (835) 9,741
Increase in due to affiliates 29,048 38,862
Decrease in accounts
payable (13,364) (3,506)
--------- ---------
Total adjustments 44,238 (19,985)
--------- ---------
Net cash provided by operating
activities 516,627 326,097
--------- ---------
Cash flows from investing activities:
Sale (purchase) of marketable
securities (300,000) 250,000
Maturity of Tax-Exempt Securities 0 400,000
Purchase of Tax-Exempt Securities 0 (400,476)
Increase in deferred costs (26,614) (20,657)
--------- ---------
Net cash (used in) provided by
investing activities (326,614) 228,867
--------- ---------
See Accompanying Notes to Financial Statements
5
<PAGE>
AMERICAN TAX-EXEMPT BOND TRUST
Statements of Cash Flows
(continued)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1998 1997
---- ----
<S> <C> <C>
Cash flows from financing activities:
Proceeds from issuance of shares
of beneficial interest 60,646 61,622
Distributions to shareholders (622,321) (610,977)
Purchase of treasury shares of
beneficial interest (140,733) 0
---------- ----------
Net cash used in
financing activities (702,408) (549,355)
---------- ----------
Net (decrease) increase in cash and
cash equivalents (512,395) 5,609
Cash and cash equivalents at
beginning of period 1,081,939 836,779
---------- ----------
Cash and cash equivalents at
end of period $ 569,544 $ 842,388
========== ==========
</TABLE>
See Accompanying Notes to Financial Statements
6
<PAGE>
AMERICAN TAX-EXEMPT BOND TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
Note 1 - General
American Tax-Exempt Bond Trust (the "Trust") was formed on December 23, 1993 as
a Delaware business trust for the primary purpose of investing in tax-exempt
first mortgage bonds ("First Mortgage Bonds") issued by various state or local
governments or their agencies or authorities and secured by first mortgage loans
on multifamily residential apartment and retirement community projects.
On December 23, 1993, the Trust received $1,000 from Related AMI Associates,
Inc., as grantor for the benefit of Related AMI Associates, Inc. as the manager
(the "Manager") of the Trust.
On November 1, 1994, the Trust commenced a public offering (the "Offering")
through Related Equities Corporation (the "Dealer Manager"), an affiliate of the
Manager, and other broker-dealers on a "best efforts" basis, for up to
10,000,000 of its shares of beneficial interest at an initial offering price of
$20 per share. The Offering terminated as of October 15, 1996. As of March 31,
1998 and December 31, 1997, a total of 1,479,414 and 1,476,222 shares have been
sold to the public through the Offering and the Trust's dividend reinvestment
plan (the "Reinvestment Plan") representing Gross Proceeds (the "Gross
Proceeds") of $29,569,831 and $29,509,185 (before volume discounts of $4,244).
Pursuant to the Redemption Plan which became effective October 15, 1996, the
Trust is required to redeem eligible shares presented for redemption for cash to
the extent it has sufficient net proceeds from the sale of shares under the
Reinvestment Plan. After October 15, 1996, 18,434 shares were sold through the
Reinvestment Plan, the proceeds of which are restricted for use in connection
with the Redemption Plan and are not included in gross proceeds. Pursuant to the
Redemption Plan as of March 31, 1998, 15,892 shares were redeemed for an
aggregate price of $301,940.
The Trust has invested the Net Proceeds primarily in First Mortgage Bonds issued
by various state or local governments or their agencies or authorities which are
secured by first mortgages and related first mortgage loans financed by such
bonds (collectively, "Mortgage Loans") on multifamily residential apartment
projects
7
<PAGE>
AMERICAN TAX-EXEMPT BOND TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
owned or to be developed by third-party developers and, to a lesser extent, by
Affiliates of the Manager. The Trust also invests in Tax-Exempt Securities. As
of March 31, 1998, of the total net proceeds available for investment, 9.33% had
been invested in Tax-Exempt Securities and 90.67% had been invested in First
Mortgage Bonds.
The unaudited financial statements have been prepared on the same basis as the
audited financial statements included in the Trust's Form 10-K/A-1 for the year
ended December 31, 1997. In the opinion of the Manager, the accompanying
unaudited financial statements contain all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the financial position
of the Trust as of March 31, 1998 and the results of operations and cash flows
for the three months ended March 31, 1998 and 1997. However, the operating
results for the three months ended March 31, 1998 may not be indicative of the
results for the year.
Certain information and note disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. It is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto included in the
Trust's Annual Report on Form 10-K/A-1 for the year ended December 31, 1997.
The Trust adopted SFAS No. 130, Reporting Comprehensive Income on January 1,
1998. SFAS No. 130 establishes standards for reporting and displaying
comprehensive income and its components in a financial statement that is
displayed with the same prominence as other financial statements.
Reclassification of financial statements for earlier periods, provided for
comparative purposes, is required. The statement also requires the accumulated
balance of other comprehensive income to be displayed separately from retained
earnings and additional paid-in capital in the equity section of the balance
sheet. Total comprehensive income for the quarters ended March 31, 1998 and 1997
was $554,763 and $346,082, respectively.
The Trust adopted SFAS No. 131, Disclosures about Segments of an Enterprise and
Related Information. SFAS No. 131 establishes
8
<PAGE>
AMERICAN TAX-EXEMPT BOND TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
standards for reporting information about operating segments in annual and
interim financial statements. Operating segments are defined as components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. Categories required to be
reported as well as reconciled to the financial statements are segment profit or
loss, certain specific revenue and expense items, and segment assets.
Note 2 - Investment in First Mortgage Bonds
Highpointe Apartments
On September 2, 1997, the Trust purchased Redevelopment Authority of the County
of Dauphin, Multifamily Housing Revenue Bonds (Highpointe Club Apartments
Project) Series 1989 (as hereinafter referred to as the "Highpointe Bonds") in
an aggregate principal amount of $3,250,000. The Highpointe Bonds are secured by
a first Mortgage and mortgage loan on Highpointe Apartments (the "Project" or
"Highpointe ") a development consisting of 240 apartment units in Harrisburg,
Pennsylvania, with first claim of cash flow for payment of interest and pari
passu after a $750,000 priority at sale, refinance or maturity with $8,900,000
Redevelopment Authority of the County of Dauphin, Multifamily Housing Revenue
Bonds (Green Hill Project), Series 1986 (the "1986 Bonds"). The 1986 Bonds are
owned by Charter Municipal Mortgage Acceptance Company ("Charter") whose manager
is an affiliate of the Manager. Highpointe is owned and operated by RHA INV.,
Inc. (the "Borrower") an affiliate of the Manager. The borrower (an affiliate of
Related Capital Corporation) is in default under the terms of the $8,900,000
loan agreement due to certain amounts of unpaid base interest as of March 31,
1998. However, Charter has indicated it will not exercise its rights to call the
mortgage note as defined under the terms of the agreement.
The Highpointe Bonds bear a fixed current interest of 9.0%, payable monthly in
arrears. The Highpointe Bonds enjoy payment priority over the 1986 Bonds. The
Trust has been informed that, as of the date hereof, the Borrower is current
with respect to all payments of principal and interest on the Highpointe Bonds.
9
<PAGE>
AMERICAN TAX-EXEMPT BOND TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
The Highpointe Bonds mature on June 1, 2006. The principal of the Highpointe
Bonds will be payable upon maturity, sale or refinancing of the Project. The
Highpointe Bonds will receive a $750,000 priority payment of principal prior to
any payment of principal on the 1986 Bonds. Remaining principal on the
Highpointe Bonds and principal and accrued interest on the 1986 Bonds will be
paid pari passu, that is by an equal progression of payments after the payment
of interest, other than interest accrued and unpaid on the 1986 Bonds on June 6,
1989, and the $750,000 priority amount.
The cost basis of the First Mortgage Bonds was $24,538,807 and $24,539,082 at
March 31, 1998 and December 31, 1997. The net unrealized gain of $218,079 on
First Mortgage Bonds consists of gross unrealized gains and losses of $567,831
and $349,752, respectively, at March 31, 1998 and $478,634 and $342,929,
respectively, as of December 31, 1997.
10
<PAGE>
AMERICAN TAX-EXEMPT BOND TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
Note 2 - Investment in First Mortgage Bonds
Information relating to investments in First Mortgage Bonds as of March 31, 1998
and December 31, 1997 are as follows:
<TABLE>
<CAPTION>
Accumu- Debt
Date of Outstand- lated Unrealized Service
Invest- ing Loan Loan Amorti- Gain (Loss) Received Net
ment/Final Balance at Origina- zation at at Balance at Balance at by the Less 1998 Interest
Descrip- Maturity March tion Mar. 31, March 31, March December Trust Amorti- Earned
Property tion Date 31, 1998 Costs 1998 1998 31, 1998 31, 1997 for 1998 zation for 1998
- - -------- ---- --------- -------- ------- -------- ---------- --------- -------- ----------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Reflections
Apartments 336
Casselbury, Apt. 12/95-
Florida (A) Units 12/25 $10,700,000 $293,914 $(66,131) $567,831 $11,495,614 $11,400,660 $240,750 $(7,348) $233,402
Rolling Ridge
Apartments 110
Chino Hills, Apt. 8/96-
California(B) Units 8/26 4,925,000 241,725 (40,288) (15,165) 5,111,272 5,124,127 109,295 (9,585) 99,710
Lexington
Trails
Apartments 200
Houston, Apt. 5/97-
Texas (C) Units 5/22 4,900,000 123,886 (11,356) (112,530) 4,900,000 4,900,000 110,250 (3,097) 107,153
Highpointe
Apartments
Harrisburg, 240
Pennsylvania Apt. 9/97-
(D) Units 6/06 3,250,000 237,918 (15,861) (222,057) 3,250,000 3,250,000 73,125 (6,859) 66,266
----------- -------- --------- -------- ----------- ----------- -------- -------- --------
$23,775,000 $897,443 $(133,636) $218,079 $24,756,886 $24,674,787 $533,420 $(26,889) $506,531
=========== ======== ========= ======== =========== =========== ======== ======== ========
</TABLE>
(A) The interest rate for the Reflections is 9.00%. In addition to the
interest rate the Trust will be entitled to 25% of the cash flow, as
defined.
(B) The interest rate for the Rolling Ridge is 9.00%. In addition to the
interest rate the Trust will be entitled to 30% of the cash flow, as
defined.
(C) The interest rate for the Lexington Trails is 9.00%.
(D) The interest rate for the Highpointe is 9.00%.
11
<PAGE>
AMERICAN TAX-EXEMPT BOND TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
Note 3 - Related Party Transactions
The Trust Agreement provides for the Manager, an affiliate of Related Capital
Company, to act as the Manager of the Trust. In accordance with the Trust
Agreement, the Manager received or is entitled to receive (i) compensation in
connection with the organization and start-up of the Trust and the Trust's
investment in the tax-exempt First Mortgage Bonds; (ii) special distributions
calculated as a percentage of total assets invested by the Trust which totaled
$29,719 and $20,031 for the three months ended March 31, 1998 and 1997,
respectively; the total amount accrued and unpaid as of March 31, 1998 and
December 31, 1997 amounted to $106,766 and $91,906, respectively; (iii) a
subordinated incentive fee based on the gain on the sale of the tax-exempt First
Mortgage Bonds; (iv) reimbursement of certain administrative costs incurred by
the Manager or an affiliate on behalf of the Trust which totaled $13,816 and
$24,060 for the three months ended March 31, 1998 and 1997, respectively; the
total amount accrued and unpaid as of March 31, 1998 and December 31, 1997
amounted to $309,549 and $295,733, respectively; (v) bond selection fees
calculated on a percentage of the Gross Proceeds applicable to the First
Mortgage Bonds; as of March 31, 1998 and December 31, 1997 $584,392 and $584,392
respectively of such costs have been incurred of which $584,392 and $584,392
have been capitalized and included in Investment in First Mortgage Bonds; and
(vi) certain other fees.
Note 4 - Subsequent Event
In May 1998, it is anticipated that distributions of approximately $585,000 and
$6,000 will be paid to the Shareholders and the Manager, respectively,
representing the 1998 first quarter distribution. The distribution will be
funded from cash collections of interest income through approximately the
distribution date, May 15, 1998.
12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
The Trust has invested the Net Proceeds primarily in First Mortgage Bonds issued
by various state or local governments or their agencies or authorities which are
secured by first mortgages and related first mortgage loans financed by such
bonds (collectively, "Mortgage Loans") on multifamily residential apartment
projects owned or to be developed by third-party developers and, to a lesser
extent, by Affiliates of the Manager. The First Mortgage Bonds have maturities
ranging from June 2006 to August 2026, although the Trust anticipates holding
the First Mortgage Bonds for approximately 10 to 12 years and having the right
to cause repayment of the bonds at that time. The Trust also invests in
Tax-Exempt Securities. As of March 31, 1998, of the total net proceeds available
for investment, 9.33% had been invested in Tax-Exempt Securities and 90.67% had
been invested in First Mortgage Bonds. At March 31, 1998, the Trust has no
investments in Tax-Exempt Securities.
For a description of the Trust's investments in First Mortgage Bonds see Note 2
of Notes to the Financial Statements.
During the three months ended March 31, 1998, cash and cash equivalents
decreased approximately $512,000 due to the purchase of marketable securities
($300,000), an increase in deferred costs ($27,000), distributions to
shareholders ($622,000) and purchase of treasury shares of beneficial interest
in excess of proceeds from the issuance of shares of beneficial interest
($80,000) which exceeded cash provided by operating activities ($517,000).
Included in the adjustments to reconcile the net income to cash provided by
operating activities is amortization in the amount of approximately $29,000.
Pursuant to the Redemption Plan which became effective October 15, 1996, the
Trust is required to redeem eligible shares presented for redemption for cash to
the extent it has sufficient net proceeds from the sale of shares under the
Reinvestment Plan. After October 15, 1996, 18,434 shares were sold through the
Reinvestment Plan, the proceeds of which are restricted for use in connection
with the Redemption Plan and are not included in gross proceeds. Pursuant to the
Redemption Plan as of March 31, 1998, 15,892 shares have been redeemed since
inception of the Redemption Plan for an aggregate price of $301,940.
13
<PAGE>
The Trust originally established a reserve for working capital and contingencies
in an amount equal to 1% of the Gross Proceeds of the Offering and may add to
such reserves from Cash Flow and Sale or Repayment Proceeds. As of March 31,
1998, all of this reserve has been used to pay general and administrative,
general and administrative-related parties and loan servicing fees. Liquidity
will be adversely affected by unanticipated costs, including operating costs in
excess of cash flows. The Trust may borrow funds from third parties or from the
Manager or its affiliates to meet working capital requirements of the Trust or
to take over the operation of a Property on a short-term basis (up to 24 months)
but not for the purpose of making Distributions.
The Trust expects that cash generated from its investments will be sufficient to
pay all of the Trust's expenses in the foreseeable future. However, certain
expense reimbursements totaling $310,000 and $296,000 at March 31, 1998 and
December 31, 1997, respectively, and the payment of a portion of the special
distribution totaling $107,000 and $92,000 at March 31, 1998 and December 31,
1997, respectively, to the Manager have been accrued but are unpaid.
The Trust anticipates that cash generated from the operations of the properties
underlying its investment in First Mortgage Bonds (taking into account its
preferred position relative to other creditors) will be sufficient to meet the
required debt service payments to the Trust with respect to the First Mortgage
Bonds for the foreseeable future.
Distribution Policy
The Trust has adopted a policy of attempting to maintain stable distributions
during the offering period and acquisition stage. In order to accomplish this
result, a portion of the Net Proceeds were invested in Tax-Exempt Securities
which matured during this period. A portion of the proceeds from such repayments
were distributed to the shareholders. The effect of this policy has been the
following: (a) a portion of the distributions have constituted a return of
capital; (b) earlier investors' returns from an investment in the Trust will be
greater than later investors' returns; and (c) there was a decrease in funds
available to be invested in Mortgage Investments.
Of the total distributions of $622,321 and $610,877 made for the three months
ended March 31, 1998 and 1997, $149,932 ($.10 per
14
<PAGE>
share or 24%) and $264,895 ($.18 per share or 43%) represents a return of
capital determined in accordance with generally accepted accounting principles.
As of March 31, 1998, the aggregate amount of the distributions made since the
commencement of the Offering representing a return of capital, in accordance
with generally accepted accounting principles, totaled $1,659,656. The portion
of the distributions which constitute a return of capital was significant during
the acquisition stage in order to maintain level distributions to shareholders.
The level of future distributions will depend upon results of operations.
Beginning in 1998 the Trust's distribution policy calls for quarterly
distributions which more closely reflect collections.
Management expects that cash flow from operations, combined with the maturity of
investments described above and continued deferral of payment of the Manager's
expense reimbursement, special distribution and loan servicing fees, will be
sufficient to fund distributions at the current level in the near future.
Results of Operations
The results of operations for the three months ended March 31, 1998 and 1997
consisted primarily of interest income earned on First Mortgage Bonds and
marketable securities, net of general and administrative, general and
administrative-related parties and loan servicing fees.
Interest income from First Mortgage Bonds increased approximately $169,000 for
the three months ended March 31, 1998 as compared to the corresponding period in
1997 primarily due to the investment in the Lexington Trails First Mortgage Bond
in May 1997 and the Highpointe First Mortgage Bond in September 1997.
Interest income from marketable securities decreased approximately $63,000 for
the three months ended March 31, 1998 as compared to the corresponding period in
1997 primarily due to the sale of such securities to purchase the Lexington
Trails First Mortgage Bond in May 1997 and the Highpointe First Mortgage Bond in
September 1997.
General and administrative expenses decreased approximately $17,000 for the
three months ended March 31, 1998 as compared to the corresponding period in
1997 primarily due to a decrease in costs associated with SEC filings in 1998.
15
<PAGE>
General and administrative-related parties decreased approximately $10,000 for
the three months ended March 31, 1998 as compared to the corresponding period in
1997 primarily due to a decrease in expense reimbursements to affiliates of the
Manager in 1998.
Loan servicing fees increased approximately $5,000 for three months ended March
31, 1998 as compared to the corresponding period in 1997 primarily due to the
investment in the Lexington Trails First Mortgage Bond in May 1997 and the
Highpointe First Mortgage Bond in September 1997.
Year 2000 Compliance
As the year 2000 approaches, an issue has emerged regarding how existing
application software programs and operating systems can accommodate this date
value. Failure to adequately address this issue could have potentially serious
repercussions. The Advisor is in the process of working with the Trust's service
providers to prepare for the year 2000. Based on information currently
available, the Trust does not expect that it will incur significant operating
expenses or be required to incur material costs to be year 2000 compliant.
16
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) 3. Exhibits
3(a) Certificate of Trust and Certificate of Amendment of Certificate of
Trust (incorporated by reference to Exhibit 3(a) to the Registration Statement
on Form S-11, File No. 33-73688).
3(b),4 Second Amended and Restated Business Trust (incorporated by
reference to Exhibit 3(b), 4 to the Registration Statement on Form S-11, File
No. 33-73688)
10(a) Escrow Agreement (incorporated by reference to Exhibit 10(a) to
the Registration Statement on Form S-11, File No. 33-73688).
10(b) Fee Agreement (incorporated by reference to Exhibit 10 (b) to the
Registration Statement on Form S-11, File No. 33-73688).
27 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter ended March
31, 1998.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AMERICAN TAX-EXEMPT BOND TRUST
(Registrant)
By: RELATED AMI ASSOCIATES, INC.,
as Manager
Date: May 13, 1998
By: /s/ Alan P. Hirmes
-----------------------
Alan P. Hirmes
Senior Vice President and
Principal Financial Officer
Date: May 13, 1998
By: /s/ Glenn F. Hopps
-----------------------
Glenn F. Hopps
Treasurer and
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted
from the financial statement for American Tax-Exempt Bond
Trust and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000916824
<NAME> American Tax-Exempt Bond Trust
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,069,544
<SECURITIES> 24,756,886
<RECEIVABLES> 182,531
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 26,028,961
<CURRENT-LIABILITIES> 485,031
<BONDS> 0
0
0
<COMMON> 0
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<NET-INCOME> 472,389
<EPS-PRIMARY> .30
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</TABLE>
