SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form l0-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 24, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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
(212) 272-2000
(Address, including Zip Code, and Telephone Number,
including Area Code, of Registrant's Principal Executive Offices)
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
--- ---
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND
(b) OF FORM 10-Q AND THEREFORE IS FILING THIS FORM WITH THE REDUCED DISCLOSURE
FORMAT CONTEMPLATED THEREBY.
<PAGE>
BEAR STEARNS ASSET BACKED SECURITIES, INC.
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Financial Condition at September 24, 1999
(Unaudited) and June 30, 1999
Statements of Income (Unaudited) for the three months ended
September 24,1999 and September 25, 1998
Statements of Cash Flows (Unaudited) for the three months
ended September 24, 1999 and September 25, 1998
Notes to Statements of Financial Condition (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K
Signature
<PAGE>
BEAR STEARNS ASSET BACKED SECURITIES, INC.
STATEMENTS OF FINANCIAL CONDITION
September 24 June 30,
1999 1999
----------- --------
(Unaudited)
Assets
Receivable from affiliates $ 31,678 $ 31,678
Deferred costs 951,095 526,715
------- -------
Total Assets $982,773 $558,393
======= =======
Liabilities
Payable to Parent $948,267 $523,586
------- -------
Total Liabilities 948,267 523,586
Stockholder's Equity
Common stock, $1,000 par value;
100 shares authorized, 1 share issued and
outstanding; 1,000 1,000
Retained earnings 33,506 33,807
------ ------
Total Stockholder's Equity 34,506 34,807
------ ------
Total Liabilities and Stockholder's Equity $982,773 $558,393
======= =======
See Notes to Financial Statements.
<PAGE>
BEAR STEARNS ASSET BACKED SECURITIES, INC.
STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
September 24, September 25,
1999 1998
------------ ------------
Revenues
Principal Transactions $ 2,070 $ -
----- -----
Total revenues 2,070 -
Expenses
Other expenses 2,602 2,409
----- -----
Total expenses 2,602 2,409
Loss before income tax benefit (532) (2,409)
Income tax benefit (231) (1,048)
----- -----
Net loss $ (301) $(1,361)
===== =====
See Notes to Financial Statements.
<PAGE>
BEAR STEARNS ASSET BACKED SECURITIES, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
September 24, September 25,
1999 1998
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (301) $ (1,361)
(Increase) decrease in:
Deferred costs (424,380) -
Receivable from affiliates - 16
-------- -----
Cash used in operating activities (424,681) (1,345)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in payable to Parent 424,681 1,345
------- -----
Cash provided by financing activities 424,681 1,345
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 0 0
------- -------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 0 $ 0
======= =======
See Notes to Financial Statements.
<PAGE>
BEAR STEARNS ASSET BACKED SECURITIES, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
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.
The financial statements are prepared in conformity with generally accepted
accounting principles which require management to make estimates and assumptions
that affect the amounts reported in the consolidated financial statements and
accompanying notes. Actual results could differ from those estimates.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Company's principal business activity is the 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 Securities, Variable Interest Securities, Principal Only
Securities, Interest Only Securities, Participants Securities, Senior Securities
or Subordinate Securities.
The Company incurred a net loss for the three months ended September 24, 1999
and September 25, 1998 of $301 and $1,361, respectively.
Year 2000 Issue
The Year 2000 issue is the result of legacy computer programs having been
written using two digits rather than four digits to define the applicable year
and therefore without consideration of the impact of the upcoming change in the
century. Such programs, unless corrected, may not be able to accurately process
dates ending in the Year 2000 and thereafter.
Over four years ago, the Parent established a task force to review and develop
an action plan to address the Year 2000 issue. The Parent's action plan
addresses both information technology and non-information technology system
compliance issues. Since then, the ongoing assessment and monitoring phase has
continued and includes assessment of the degree of compliance of its significant
vendors, facility operators, custodial banks and fiduciary agents to determine
the extent to which the Parent is vulnerable to those third parties' failure to
remediate their own Year 2000 issues. The Parent has contacted all significant
external vendors in an effort to confirm their readiness for the Year 2000 and
tested compatibility with such systems. The Parent also participates actively in
various industry-wide tests.
<PAGE>
Through September 24, 1999, the amounts incurred related to the assessment of,
and efforts in connection with, the Year 2000 and the development and execution
of a remediation plan have approximated $70.5 million of which approximately
$10.6 million in hardware and software has been capitalized. The Parent's total
projected Year 2000 project cost, including the estimated costs and time
associated with the impact of third-party Year 2000 issues, are based on
currently available information. The total remaining Year 2000 project cost is
estimated at approximately $4.5 million, which will be funded through operating
cash flows and primarily expensed as incurred.
The Parent presently believes that the activities it is undertaking in the Year
2000 project should satisfactorily resolve Year 2000 compliance exposures within
its own systems worldwide. The Parent has completed the reprogramming and
replacement phase of the project. Additional testing will continue through the
end of the calendar year as deemed appropriate. There can be no assurance that
the systems of other companies on which the Parent's systems rely will be timely
converted, or that a failure to convert by another company, or a conversion that
is incompatible with the Parent's systems, would not have a material adverse
effect on the Parent. The Parent has developed an action plan and a formal
contingency plan designed to safeguard the interests of the Parent and its
customers. The Parent believes that these plans significantly reduce the risk of
a Year 2000 issue serious enough to cause a business disruption. With regard to
Year 2000 compliance of other external entities, the Parent is monitoring
developments closely. Should it appear that a major utility, such as a stock
exchange, would not be ready, the Parent will work with other firms in the
industry to plan an appropriate course of action.
<PAGE>
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
During the quarter, the Company filed the following current
reports on form 8-K:
(i) A Current Report on Form 8-K dated July 21, 1999 and filed
on July 26, 1999, pertaining to the filing of computational
materials in connection with the proposed offering of Home
Equity Loan Trust Certificates, Series 1999-1.
(ii) A Current Report on Form 8-K dated July 30, 1999 and filed
on July 30, 1999, pertaining to the filing of an opinion with
counsel in connection with the proposed offering of Bear Stearns
Asset Backed Securities, Inc., Asset-Backed Certificates, Series
1999-1.
(iii) A Current Report on Form 8-K dated July 30, 1999 and filed
on August 16, 1999, pertaining to filing of Pooling and
Servicing Agreement among the Company, Countrywide Home
Loans, Inc. and the Bank of New York.
(iv) A Current Report on Form 8-K dated September 23, 1999 and
filed on September 23, 1999, pertaining to the filing of
computational materials in connection with the proposed offering
of GMACM Loan Trust 1999-HLTV1 Loan-Backed Term Notes, Series
1999-HLTV1.
(v) A Current Report on Form 8-K dated September 23, 1999 and
filed on September 24, 1999 pertaining to filing a prospectus
and prospectus supplement with the Securities and Exchange
Commission relating to its Mortgage Loan Trust, Series RASC
1999-RS3, Mortgage Asset-Backed Pass-Through Certificates,
Series 1999-RS3.
(vi) A Current Report on Form 8-K dated September 23, 1999 and
filed on September 24, 1999 pertaining to filing a prospectus
and prospectus supplement with the Securities and Exchange
Commission relating to its GMACM Loan Trust, 1999-HLTV1, GMACM
Loan-Backed Term Notes, Series 1999-HLTV1.
(vii) A Current Report on Form 8-K dated September 23, 1999, and
filed on September 24, 1999, pertaining to the Form T-1
Statement of Eligibility under the Trust Indenture Act of 1939,
as amended.
<PAGE>
SIGNATURE
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 8th day of November, 1999.
Bear Stearns Asset Backed Securities, Inc.
(Registrant)
By: /s/Samuel L. Molinaro Jr.
Samuel L. Molinaro Jr.
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
unaudited Statement of Financial Condition at September 24, 1999 and unaudited
Statement of Income for the three months ended September 24, 1999, which are
contained in the body of the accompanying Form 10-Q and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> Jun-30-2000
<PERIOD-END> Sep-24-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 31,678
<ALLOWANCES> 0
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<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 982,773
<CURRENT-LIABILITIES> 0
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0
0
<COMMON> 1,000
<OTHER-SE> 33,506
<TOTAL-LIABILITY-AND-EQUITY> 982,773
<SALES> 0
<TOTAL-REVENUES> 2,070
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,602
<LOSS-PROVISION> 0
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<INCOME-PRETAX> (532)
<INCOME-TAX> (231)
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<NET-INCOME> (301)
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</TABLE>
