SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form l0-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the fiscal year ended June 30, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee
Required] For the transition period from to
Commission file number 33-93574
Bear Stearns Asset Backed Securities, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3836437
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
245 Park Avenue New York, New York 10167
(Address of principal executive offices) (Zip Code)
(212) 272-2000
(Registrant's telephone number, including area code)
Securities registered pursuant to
Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None -
urities registered pursuant to Section
12(g) of the Act:
None
(Title of class)
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 twelve months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No Indicate by check
mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of
Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K. X Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of September 1, 1997.
1000 shares of Common Stock, par value $1.00 per share
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION J(1)(a)
AND (b) OF FORM 10-K AND THEREFORE IS FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT CONTEMPLATED THEREBY.
<PAGE>
ITEM 1 - BUSINESS
Bear Stearns Asset Backed Securities, Inc. (the "Company") was
organized by, and is a direct wholly-owned limited purpose finance
subsidiary of The Bear Stearns Companies Inc. (the "Parent"). The
Company was incorporated in the State of Delaware on June 2, 1995.
The Company was formed solely for the purpose of issuing directly or
through trusts established by it, in series, debt securities that are
secured or collateralized by one or more pools of Compound Interest
Securities, Planned Amortization Class ("PAC") Securities, Variable
Interest Securities, Zero Coupon Securities, Principal Only
Securities, Interest Only Securities, Participants Securities, Senior
Securities or Subordinate Securities.
ITEM 2 - PROPERTIES
The Company owns no physical properties.
ITEM 3 - LEGAL PROCEEDINGS
No legal proceedings are pending.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Pursuant to General Instruction J of Form 10-K, the information
required by Item 4 is omitted.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is no established public trading market for the common
equity of the Company. All of the issued and outstanding shares
of such common equity are owned by the Parent.
ITEM 6 - SELECTED FINANCIAL DATA
Pursuant to General Instruction J of Form 10-K, the information
required by Item 6 is omitted.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company's principal business activity is the issuing,
directly or through trust established by it, in series, debt
securities that are secured or collateralized by one or more
pools of Compound Interest Securities, Planned Amortization Class
("PAC") Securities, Variable Interest Securities, Principal Only
Securities, Interest Only Securities, Participants Securities,
Senior Securities or Subordinate Securities.
<PAGE>
PART II (continued)
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
The Company incurred net income for the fiscal year ended June
30, 1998 in the amount of $59,522. The Company incurred net loss
for the fiscal years ended June 30, 1997 and 1996 in the amount
of $5,330 and $16,868, respectively.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by this Item and included in
this Report are listed in the index appearing on page F-1.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction J of Form 10-K, the
information required by Item 10 is omitted.
ITEM 11 - EXECUTIVE COMPENSATION
Pursuant to General Instruction J of Form 10-K, the
information required by Item 11 is omitted.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Pursuant to General Instruction J of Form 10-K, the
information required by Item 12 is omitted.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to General Instruction J of Form 10-K, the
information required by Item 13 is omitted.
<PAGE>
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. and 2. Financial Statements and Schedules
The financial statements and schedules required by this Item and
included in this report are listed in the index appearing on page
F-1.
PART IV
(b) Reports on Form 8-K
No reports or Form 8-K have been filed during the fiscal
year ended June 30, 1998.
<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, on the 11th day of September, 1998.
Bear Stearns Asset Backed Securities, Inc.
(Registrant)
By: /s/ William J. Montgoris
William J. Montgoris
Executive Vice President and Treasurer
(Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities indicated on the
11th day of September, 1998.
Signatures Title
/s/ Patricia Jehle President and Chief Operating
Patricia Jehle Officer; Director
/s/ Warren Spector
Warren J. Spector Director
<PAGE>
BEAR STEARNS ASSET BACKED SECURITIES, INC.
INDEX TO FINANCIAL STATEMENTS
Page
Independent Auditors' Report F-2
Statements of Financial Condition as of June 30, 1998 and 1997 F-3
Statements of Operations for the fiscal years ended
June 30, 1998, 1997 and 1996 F-4
Statements of Changes in Stockholder's Equity for the fiscal
years ended June 30, 1998, 1997 and 1996 F-5
Statements of Cash Flows for the fiscal years ended
June 30, 1998, 1997 and 1996 F-6
Notes to Financial Statements F-7
Financial Statement Schedules are omitted because they are inapplicable
or the information is included in the financial statements or notes
thereto.
Page F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholder,
Bear Stearns Asset Backed Securities Inc.:
We have audited the accompanying statements of financial condition of
Bear Stearns Asset Backed Securities Inc. (the "Company") (a wholly-owned
subsidiary of The Bear Stearns Companies Inc.) as of June 30, 1998 and
1997, and the related statements of operations, stockholder's equity and
cash flows for each of the three years in the period ended June 30, 1998.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of Bear Stearns Asset Backed
Securities Inc. at June 30, 1998 and 1997, and the results of their operations
and their cash flows for each of the three years in the period ended June 30,
1998 in conformity with generally accepted accounting principles.
September 9, 1998
Page F-2
<PAGE>
BEAR STEARNS ASSET BACKED SECURITIES, INC.
STATEMENTS OF FINANCIAL CONDITION
June 30, June 30,
1998 1997
ASSETS
Assets
Receivable from affiliates $ 31,697 $ 31,705
Deferred costs 771,784 349,522
Total Assets $ 803,481 $ 381,227
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Liabilities
Payable to Parent $ 765,157 $ 324,614
Other liabilities 0 77,811
Total Liabilities $ 765,157 $ 402,425
Stockholder's Equity
Common stock, $1.00 par value;
1,000 shares authorized;
1,000 shares outstanding 1,000 1,000
Accumulated earnings (deficit) 37,324 (22,198)
Total Stockholder's Equity (Deficit) 38,324 (21,198)
Total Liabilities and Stockholder's Equity 803,481 $ 381,227
See notes to financial statements.
Page F-3
<PAGE>
BEAR STEARNS ASSET BACKED SECURITIES, INC.
STATEMENTS OF OPERATIONS
June 30, June 30, June 30,
1998 1997 1996
Revenues
Principal transactions $115,311 $ - $(30,000)
Total revenues 115,311 - (30,000)
Expenses
Other expenses 9,923 9,505 678
Total expenses 9,923 9,505 678
Income (loss) before income taxes 105,388 (9,505) (30,678)
Income tax expense (benefit) 45,866 (4,175) (13,810)
Net income (loss) $ 59,522 $ (5,330) $ (16,868)
See notes to financial statements.
Page F-4
<PAGE>
BEAR STEARNS ASSET BACKED SECURITIES, INC.
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
Accumulated
Common Stock Earnings
$1 Par Value (Deficit)
Balance, June 30, 1995 $ 1,000 $ -
Net loss $ (16,868)
Balance, June 30, 1996 1,000 (16,868)
Net loss - (5,330)
Balance, June 30, 1997 1,000 (22,198)
Net income - 59,522
Balance, June 30, 1998 $ 1,000 $ 37,324
See notes to financial statements.
Page F-5
<PAGE>
BEAR STEARNS ASSET BACKED SECURITIES, INC.
STATEMENTS OF CASH FLOWS
June 30, June 30, June 30,
1998 1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 59,522 $ (5,330) $ (16,868)
(Increases) Decreases in:
Deferred costs (422,262) (211,821) (137,701)
Receivable from affiliates 8 - (31,705)
Increase (Decreases):
Other liabilities (77,810) 14,056 63,755
Cash used in operating activities (440,542) (203,095) (122,519)
CASH FLOWS FROM FINANCING ACTIVITIES
Payable to Parent 440,542 203,095 121,519
Capital Contributions from Parent - - 1,000
Cash provided by financing activities 440,542 203,095 122,519
CASH AND CASH EQUIVALENTS,
END OF YEAR $ - $ - $ -
See notes to financial statements.
Page F-6
<PAGE>
BEAR STEARNS ASSET BACKED SECURITIES, INC.
NOTES TO FINANCIAL STATEMENTS
Note 1. Organization
Bear Stearns Asset Backed Securities, Inc. (the "Company") was organized
by, and is a direct wholly-owned limited purpose finance subsidiary of The Bear
Stearns Companies Inc. (the "Parent"). The Company was incorporated in the State
of Delaware on June 2, 1995. The Company was formed solely for the purpose of
issuing directly or through trusts established by it, in series, debt securities
that are secured or collateralized by one or more pools of Compound Interest
Securities, Planned Amortization Class ("PAC") Securities, Variable Interest
Securities, Zero Coupon Securities, Principal Only Securities, Interest Only
Securities, Participants Securities, Senior Securities or Subordinate
Securities.
Note 2. Summary of Significant Accounting Policies
The Company's policy is to record the securitization and issuance
of collateralized debt and the related sale of all of its
remaining beneficial ownership interest in the residual cash flow
attributable to each series of collateralized debt as a sale of
assets. The resultant gain or loss reflects the net proceeds from
the collateralized debt issuance and the sale of the beneficial
ownership interest less the cost of the underlying collateral and
is reflected as principal transaction revenues Deferred
organization costs associated with the issuance of the
collateralized debt are prepaid issue expenses which are included
as a component of the gain or loss upon the sale of the
collateralized debt.
The Company's policy is to sell all of its beneficial ownership
interest in each collateralized debt series issued directly or
through one or more trusts established by it. Accordingly, as the
Company no longer retains an economic interest in the underlying
collateral, the assets and liabilities related to each
collateralized debt series are not reflected on the Company's
Statement of Financial Condition.
The financial statements are prepared in conformity with
generally accepted accounting principles which require management
to make estimates and assumptions that affect the amounts in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
The Company is included in the consolidated federal income tax
return of the Parent. Income tax expense is computed on a
separate company basis.
For purposes of reporting cash flows, the Company has defined
cash equivalents as liquid investments not held for sale in the
ordinary course of business.
Page F-7
<PAGE>
BEAR STEARNS ASSET BACKED SECURITIES, INC.
NOTES TO FINANCIAL STATEMENTS
Note 3. Income Taxes
The difference between the Company's effective tax rate and the
statutory federal income tax rate is the effect of state and
local income taxes.
Note 4. Related Party Transactions
Substantially all of the Company's operating expenses, such as
office space and general and administrative expenses, are borne
by an affiliate.
Page F-8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
financial statements contained in the body of the accompanying Form 10-K and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-END> Jun-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 31,697
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 803,481
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> 37,324
<TOTAL-LIABILITY-AND-EQUITY> 803,481
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,923
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 105,388
<INCOME-TAX> 45,866
<INCOME-CONTINUING> 59,522
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 59,522
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
