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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 2002
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 33-83524
MERIT SECURITIES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
VIRGINIA 54-1736551
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4551 COX ROAD, SUITE 300, GLEN ALLEN, VIRGINIA 23060
(Address of principal executive offices) (Zip Code)
(804) 217-5800
(Registrant's telephone number, including area code)
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 NINETY DAYS. |X| YES |_| NO
As of May 10, 2002, the latest practicable date, there were 1,000 shares of
Merit Securities Corporation common stock outstanding.
The registrant meets the conditions set forth in General Instructions H (1)(a)
and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced
disclosure format.
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MERIT SECURITIES CORPORATION
FORM 10-Q/A
INDEX
THIS FILING OF FORM 10-Q/A REFLECTS RESTATEMENT OF THE FINANCIAL STATEMENTS AS
DISCUSSED IN NOTE 4 TO THE FINANCIAL STATEMENTS.
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets at March 31, 2002
and December 31, 2001 (unaudited)...................................................1
Condensed Statements of Operations for the three months ended
March 31, 2002 and 2001 (unaudited).................................................2
Condensed Statements of Cash Flows for the three months ended
March 31, 2002 and 2001 (unaudited).................................................3
Notes to Unaudited Condensed Financial Statements.......................................4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations...........................................6
Item 3. Quantitative and Qualitative Disclosures about Market Risk..............................8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.......................................................................9
Item 5. Other Information.......................................................................9
Item 6. Exhibits and Reports on Form 8-K........................................................9
SIGNATURES ...................................................................................12
i
12
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MERIT SECURITIES CORPORATION
CONDENSED BALANCE SHEETS, UNAUDITED
(amounts in thousands except share data)
March 31, December 31,
2002 2001
------------- -------------
(As restated,
see Note 4)
ASSETS:
Collateral for collateralized bonds $ 1,478,539 $ 1,634,460
Loans 3,801 4,435
------------- -------------
$ 1,482,340 $ 1,638,895
============= =============
LIABILITIES AND SHAREHOLDER'S EQUITY
LIABILITIES:
Non-recourse debt - collateralized bonds $ 1,395,545 $ 1,542,924
SHAREHOLDER'S EQUITY:
Common stock, no par value, 10,000 shares authorized,
1,000 shares issued and outstanding 10 10
Additional paid-in capital 82,034 92,774
Accumulated other comprehensive income 3,079 3,187
Retained earnings 1,672 -
-------------- -------------
86,795 95,971
-------------- -------------
$ 1,482,340 $ 1,638,895
============== =============
See notes to unaudited condensed financial statements.
1
MERIT SECURITIES CORPORATION
CONDENSED STATEMENTS OF OPERATIONS, UNAUDITED
(amounts in thousands)
Three Months Ended
March 31,
----------------------------
2002 2001
(As (As
restated, restated,
see Note 4) see Note 4)
------------- ------------
Interest income:
Collateral for collateralized bonds $ 26,815 $ 44,754
------------- --------------
Interest and related expense:
Interest expense on collateralized bonds 16,869 35,877
Other collateralized bond expense 435 412
------------- --------------
17,304 36,289
------------- --------------
Net interest margin before provision for losses 9,511 8,465
Provision for losses (5,877) (4,555)
------------- --------------
Net margin 3,634 3,910
Impairment charges (1,961) (1,783)
------------- --------------
Net income $ 1,673 $ 2,127
============= ==============
See notes to unaudited condensed financial statements.
2
MERIT SECURITIES CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS, UNAUDITED
(amounts in thousands)
--------------------------
Three Months Ended
March 31,
--------------------------
2002 2001
------------- ----------
(As restated, (As restated,
see Note 4) see Note 4)
Operating activities:
Net income ................................... $ 1,673 $ 2,127
Adjustments to reconcile net income to
net cash provided by operating activities:
Impairment charges ........................... 1,961 1,783
Provision for losses ......................... 5,877 4,555
Net decrease in accrued interest receivable
and funds held by trustee ................... (1,260) (462)
Decrease in accrued interest payable ........ (130) (217)
Amortization, net ........................... 2,903 2,341
Other ....................................... 2,463 924
--------- ---------
Net cash provided by operating activities . 13,487 11,051
--------- ---------
Investing activities:
Collateral for collateralized bonds:
Principal payments on collateral ............ 145,578 138,495
--------- ---------
Net cash provided by investing activities . 145,578 138,495
--------- ---------
Financing activities:
Principal payments on collateralized bonds .. (148,325) (144,305)
Increase in due to affiliates ............... 582 --
Dividends and capital distributions ......... (11,322) (5,251)
--------- ---------
Net cash used for financing activities .... (159,065) (149,556)
--------- ---------
Net decrease in cash ............................ -- (10)
Cash, beginning of period ....................... -- 10
--------- ---------
Cash, end of period ............................. $ -- $ --
--------- ---------
Supplemental disclosure of cash flow information:
Cash paid for interest ........................ $ 16,256 $ 35,168
--------- ---------
See notes to unaudited condensed financial statements.
3
MERIT SECURITIES CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
March 31, 2002
(amounts in thousands except share data)
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying condensed financial statements have been prepared in accordance
with the instructions to Form 10-Q and do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. The condensed financial statements include the accounts of
Merit Securities Corporation (the "Company"). The Company is a wholly owned,
limited-purpose finance subsidiary of Issuer Holding Corporation ("IHC"). IHC
was formed on September 4, 1996 to acquire all of the outstanding stock of the
Company and certain other affiliates of Dynex Capital, Inc. ("Dynex"). IHC is a
wholly owned subsidiary of Dynex. The Company was organized to facilitate the
securitization of loans through the issuance and sale of collateralized bonds
(the "Bonds").
In the opinion of management, all material adjustments, consisting of normal
recurring adjustments, considered necessary for a fair presentation of the
financial statements have been included. The Condensed Balance Sheet at March
31, 2002, the Condensed Statements of Operations for the three months ended
March 31, 2002 and 2001, the Condensed Statements of Cash Flows for the three
months ended March 31, 2002 and 2001, and the related notes to condensed
financial statements are unaudited. Operating results for the three months ended
March 31, 2002 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2002. For further information, refer
to the audited financial statements and footnotes included in the Company's Form
10-K/A for the year ended December 31, 2001.
On March 31, 2002, the Company purchased from Dynex Capital, Inc., its parent,
10,000 shares of common stock of Financial Asset Securitization, Inc.
Certain amounts for 2001 have been reclassified to conform to the presentation
for 2002.
NOTE 2--COLLATERAL FOR COLLATERALIZED BONDS
Collateral for collateralized bonds consists of loans and debt securities backed
primarily by adjustable-rate and fixed-rate mortgage loans secured by first
liens on single family residential housing and manufactured housing installment
loans secured by a UCC filing. All collateral for collateralized bonds is
pledged to secure repayment of the related collateralized bonds. All principal
and interest (less servicing-related fees) on the collateral is remitted to a
trustee and is available for payment on the collateralized bonds. The Company's
exposure to loss on collateral for collateralized bonds is generally limited to
the amount of collateral pledged in excess of the related collateralized bonds
issued, as the collateralized bonds issued are non-recourse to the Company. The
collateral for collateralized bonds can be sold by the Company, but only subject
to the lien of the collateralized bond indenture.
Pursuant to the requirements of Statement of Financial Accounting Standards No.
115, Accounting for Certain Investments in Debt and Equity Securities, the
Company has classified all of its debt securities included in collateral for
collateralized bonds as available-for-sale. As such, debt securities included in
collateral for collateralized bonds are reported at fair value, with unrealized
gains and losses excluded from earnings and reported as accumulated other
comprehensive income. The following table summarizes the components of
collateral for collateralized bonds as of March 31, 2002 and December 31, 2001.
4
- -------------------------------------------- --------------- -- ----------------
March 31, December 31,
2002 2001
- -------------------------------------------- --------------- -- ----------------
Loans, at amortized cost $ 1,077,575 $ 1,186,400
Debt securities, at fair value 417,323 463,424
- -------------------------------------------- --------------- -- ----------------
1,494,898 1,649,824
Reserve for loan losses (16,359) (15,364)
- -------------------------------------------- --------------- -- ----------------
$ 1,478,539 $ 1,634,460
- -------------------------------------------- --------------- -- ----------------
The following table summarizes the amortized cost basis, gross unrealized gains
and losses, and estimated fair value of debt securities pledged as collateral
for collateralized bonds as of March 31, 2002:
- ------------------------------------ ---------- ---------- ---------- ----------
Gross Gross
Amortized unrealized unrealized Estimated
cost gains losses fair value
- ------------------------------------ ---------- ---------- ---------- ----------
Debt securities as of March 31, 2002 $ 414,244 $ 3,079 $ - $ 417,323
- ------------------------------------ ---------- ---------- ---------- ----------
NOTE 3 - USE OF ESTIMATES
Fair Value. The Company uses estimates in establishing fair value for its
financial instruments. Estimates of fair value for collateral for collateralized
bonds are determined by calculating the present value of the projected net cash
flows of the instruments using appropriate discount rates, prepayment rates and
credit loss assumptions. Discount rates used are those management believes would
be used by willing buyers of these financial instruments at prevailing market
rates. The discount rate used in the determination of fair value of the
collateral for collateralized bonds at both March 31, 2002 and December 31, 2001
was 16%. Variations in market discount rates, prepayment rates and credit loss
assumptions may materially impact the resulting fair values of the Company's
financial instruments. Since the fair value of the Company's financial
instruments is based on estimates, actual gains and losses recognized may differ
from those estimates recorded in the financial statements.
NOTE 4 - RESTATEMENT OF FINANCIAL STATEMENTS
Subsequent to the issuance of its financial statements for the three months
ended March 31, 2002, the Company determined that certain of the assets
previously reported as debt securities subject to the requirements of SFAS
No.115, "Accounting for Certain Investments in Debt and Equity Securities"
were, in fact, collateralized borrowings, where the collateral being pledged as
securities were loans that should have been accounted for under the requirements
of SFAS No. 5, "Accounting for Contingencies" or SFAS No. 114, "Accounting by
Creditors for Impairment of a Loan." As a result, the accompanying condensed
financial statements as of March 31, 2002 and for the three month periods ended
March 31, 2002 and 2001 have been restated from the amounts previously
reported to correct the accounting for these assets.
A summary of the significant effects of the restatement is as follows:
- --------------------------------------------- ---------------- -- --------------
As of March 31, 2002
- --------------------------------------------- ---------------- -- --------------
(As Previously
(amounts in thousands) Reported) (As Restated)
---------------- -- --------------
Collateral for collateralized bonds $1,445,256 $ 1,478,539
Total assets 1,449,057 1,482,340
Accumulated other comprehensive income (loss) (30,205) 3,079
Total shareholder's equity 52,930 86,795
5
- --------------------------------------------------------------------------------
For Three Months Ended
March 31 2002 2001
------------- ------------- --------------- ---------------
(As Previously (As Previously
Reported) (As Restated) Reported) (As Restated)
------------- ------------- --------------- ---------------
Provision for losses $ (7,838) $ (5,877) $ (6,338) $ (4,555)
Net interest margin 1,673 3,634 2,127 3,910
Impairment charges - (1,961) - (1,783)
- -------------------- ------------- ------------- --------------- ---------------
The restatement did not have any effect on income before extraordinary item or
net income.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
As discussed in Note 4 to the condensed financial statements included in Item 1,
the Company has restated its financial statements as of March 31, 2002 and for
the three month periods ended March 31, 2002 and 2001. The following Management
Discussion and Analysis takes into account the effects of the restatement.
The Company was organized to facilitate the securitization of loans through the
issuance and sale of collateralized bonds (the "Bonds"). The Bonds will be
secured primarily by: (i) mortgage loans secured by first or second liens on
residential property, (ii) Federal National Mortgage Association Mortgage-Backed
Certificates, (iii) Federal Home Loan Mortgage Corporation Mortgage-Backed
Certificates, (iv) Government National Mortgage Association Mortgage-Backed
Certificates, (v) other mortgage pass-through certificates or
mortgage-collateralized obligations and (vi) consumer installment loans
(collectively, the "Collateral"). In the future, the Company may also securitize
other types of loans.
After payment of the expenses of an offering and certain administrative
expenses, the net proceeds from an offering of Bonds will be used to purchase
Collateral from IHC or various third parties. IHC can be expected to use the
proceeds to reduce indebtedness incurred to obtain such loans or to acquire
additional Collateral. After the issuance of a series of Bonds, the Company may
sell the Collateral securing that series of Bonds, subject to the lien of the
Bonds.
FINANCIAL CONDITION
- --------------------------------------- ------------------ ---- ----------------
March 31, December 31,
(amounts in thousands) 2002 2001
- --------------------------------------- ------------------ ---- ----------------
Collateral for collateralized bonds $ 1,478,539 $ 1,634,460
Non-recourse debt collateralized bonds 1,395,545 1,542,924
Shareholder's equity 86,795 95,971
Collateralized bond series outstanding 4 4
- --------------------------------------- ------------------ ---- ----------------
Collateral for collateralized bonds
As of both March 31, 2002 and December 31, 2001, the Company had 4 series of
collateralized bonds outstanding. The collateral for collateralized bonds
decreased to $1.48 billion at March 31, 2002 compared to $1.63 billion at
December 31, 2001. This decrease of $155.9 million is primarily the result of
$146 million in paydowns on the collateral.
Non-recourse debt - collateralized bonds
Collateralized bonds decreased to $1.40 billion at March 31, 2002 from $1.54
billion at December 31, 2001 primarily as a result of $148.3 million in paydowns
during the three months ended March 31, 2002.
Shareholder's Equity
Shareholder's equity decreased to $86.8 million at March 31, 2002 from $96.0
million at December 31, 2001. This decrease was primarily the result of a $10.8
million capital distribution to IHC during the period, partially offset by net
income of $1.7 million during the three months ended March 31, 2002.
6
RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
Three Months Ended
March 31,
---------------------------------
(amounts in thousands) 2002 2001
- --------------------------------------------------------------------------------
Interest income $ 26,815 $ 44,754
Interest expense 17,304 36,289
Provision for losses 5,877 4,555
Net interest margin 3,634 3,910
Net income 1,673 2,127
- --------------------------------------------------------------------------------
Interest income on the collateral for collateralized bonds decreased to $26.8
million for the three months ended March 31, 2002 from $44.8 million for the
same period in 2001. This decrease was primarily a result of a decline in
collateral for collateralized bonds between the respective periods.
Interest and other expense on collateralized bonds decreased to $17.3 million
for the three months ended March 31, 2002 from $36.3 million for the three
months ended March 31, 2001. This decrease resulted from the decline in
collateralized bonds due to prepayments on the related collateral for
collateralized bonds, coupled with an overall decline in the cost of funds on
the collateralized bonds.
Provision for losses increased to $5.9 million for the three months ended March
31, 2002 from $4.6 million for the same period in 2001. The increase for the
three months ended March 31, 2002 was primarily a result of increasing the
reserve for probable losses on various loan pools pledged as collateral for
collateralized bonds where the Company has retained credit risk, specifically
the Company's investment in manufactured housing loan pools.
Net interest margin for the three months ended March 31, 2002 was $3.6 million
compared to $3.9 million for the same period in 2001. This decline in the three
months ended March 31, 2002 was the result of an increase in provision for
losses. The decline in interest earning assets was offset by reduced borrowing
costs on collateralized bonds outstanding.
Credit Exposures
With collateralized bond structures, the Company retains credit risk relative to
the amount of overcollateralization required in conjunction with the bond
issuance. Losses are generally first applied to the overcollateralized amount,
or in some instances surplus cash and then the overcollaterialized amount, with
any losses in excess of that amount borne by the bond insurer or the holders of
the collateralized bonds. The Company only incurs credit losses to the extent
that losses are incurred in the repossession, foreclosure and sale of the
underlying collateral. Such losses generally equal the excess of the principal
amount outstanding, less any proceeds from mortgage or hazard insurance, over
the liquidation value of the collateral. To compensate the Company for retaining
this loss exposure, the Company generally receives an excess yield on the
collateralized loans relative to the yield on the collateralized bonds. At March
31, 2002, the Company retained $142.3 million in aggregate principal amount of
overcollateralization. The Company had reserves, or otherwise had provided
coverage on $46.7 million at March 31, 2002. At March 31, 2002, $30.3 million of
these reserve amounts are in the form of a loss reimbursement guarantee. During
the first three months of 2002, the Company provided for additional reserves of
$5.9 million and incurred credit losses of $4.5 million.
The Company and Dynex have settled a dispute with the counter-party to the $30.3
million in reimbursement guarantees. Such guarantees are payable when cumulative
loss trigger levels are reached on certain of the Company's single-family
mortgage loan securitizations. The Company was paid $0.75 million in settlement
of $2.4 million in claims which had been carried on the Company's books at $1.1
million. As part of the settlement certain trigger levels were reset and the
reasons that a loss in the future would be a "non-qualifying" loss were
significantly narrowed. As of March 31, 2002, $122 million of loans were subject
to such reimbursement guarantees.
7
Other Matters
At March 31, 2002, the Company had securities of approximately $308.6 million
remaining for issuance under a registration statement filed with the Securities
and Exchange Commission. The Company anticipates issuing additional Bonds in the
future.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk generally represents the risk of loss that may result from the
potential change in the value of a financial instrument due to fluctuations in
interest and foreign exchange rates and in equity and commodity prices. Market
risk is inherent to both derivative and non-derivative financial instruments,
and accordingly, the scope of the Company's market risk management extends
beyond derivatives to include all market risk sensitive financial instruments.
Net interest income comprises the primary component of the Company's earnings.
As a result, the Company is subject to risk resulting from interest rate
fluctuations to the extent that there is a gap between the amount of the
Company's interest-earning assets and the amount of interest-bearing liabilities
that are prepaid, mature or reprice within specified periods.
The Company and IHC monitor the aggregate cash flow, projected net yield and
market value of the collateral for collateralized bonds under various interest
rate and prepayment assumptions.
Approximately $574.3 million of the Company's collateral for collateralized
bonds as of March 31, 2002, is comprised of loans or securities that have coupon
rates which adjust over time (subject to certain periodic and lifetime
limitations) in conjunction with changes in short-term interest rates.
Approximately 70% and 17% of the ARM loans underlying the Company's collateral
for collateralized bonds are indexed to and reset based upon the level of
six-month LIBOR and one-year Constant Maturity Treasury ("CMT"), respectively.
Generally, during a period of rising short-term interest rates, the Company's
net interest spread earned on its collateralized bonds will decrease. The
decrease of the net interest spread results from (i) the lag in resets of the
ARM loans underlying the collateral for collateralized bonds relative to the
rate resets on the collateralized bonds and (ii) rate resets on the ARM loans
which are generally limited to 1% every six months or 2% every twelve months and
subject to lifetime caps, while the associated borrowings have no such
limitation. As short-term interest rates stabilize and the ARM loans reset, the
net interest margin may be restored to its former level as the yields on the ARM
loans adjust to market conditions. Conversely, net interest margin may increase
following a fall in short-term interest rates. This increase may be temporary as
the yields on the ARM loans adjust to the new market conditions after a lag
period. In each case, however, the Company expects that the increase or decrease
in the net interest spread due to changes in the short-term interest rates to be
temporary. The net interest spread may also be increased or decreased by the
proceeds or costs of interest rate swap and cap agreements, to the extent the
Company has entered into such agreements.
The remaining portion of the Company's collateral for collateralized bonds, as
of March 31, 2002, approximately $919 million, is comprised of loans that have
coupon rates that are fixed. The Company has limited its interest rate risk on
such collateral primarily through the issuance of fixed-rate collateralized
bonds. Overall, the Company's interest rate risk is primarily related to the
rate of change in short-term interest rates and to the level of short-term
interest rates.
The Company focuses on the sensitivity of its cash flow, and measures such
sensitivity to changes in interest rates. Changes in interest rates are defined
as instantaneous, parallel, and sustained interest rate movements in 100 basis
point increments. The Company estimates its net interest margin cash flow for
the next twelve months assuming no changes in interest rates from those at
period end. Once the base case has been estimated, cash flows are projected for
each of the defined interest rate scenarios. Those scenario results are then
compared against the base case to determine the estimated change to net interest
income.
The following table summarizes the Company's net interest margin cash flow
sensitivity analysis as of March 31, 2002. This analysis represents management's
estimate of the percentage change in net interest margin cash flow given a
parallel shift in interest rates. The "Base" case represents the interest rate
environment as it existed as of March 31, 2002. The analysis is heavily
dependent upon the assumptions used in the model. The effect of changes in
future interest rates, the shape of the yield curve or the mix of assets and
liabilities may cause actual results to differ from the modeled results. In
8
addition, certain financial instruments provide a degree of "optionality." The
most significant option affecting the Company's portfolio is the borrower's
option to prepay the loans. The model applies prepayment rate assumptions
representing management's estimate of prepayment activity on a projected basis
for each collateral pool in the investment portfolio. The model applies the same
prepayment rate assumptions for all five cases indicated below. The extent to
which borrowers actually exercise their option may cause actual results to
significantly differ from the analysis.
------------------------ ---------------------
BASIS POINT % CHANGE IN NET
INCREASE (DECREASE) IN INTEREST MARGIN
INTEREST RATES FROM BASE CASE
------------------------ ---------------------
+200 (5.1)%
+100 (2.6)%
Base -
-100 2.6%
-200 5.1%
------------------------ --------------------
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS:
None
ITEM 5. OTHER INFORMATION:
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits
3.1 Articles of Incorporation of the Registrant (Incorporated herein
by reference to the Exhibits to Registrant's Registration Statement
No. 33-83524 on Form S-3 filed August 31, 1994).
3.2 Bylaws of the Registrant (Incorporated herein by reference to the
Exhibits to Registrant's Registration Statement No. 33-83524 on Form
S-3 filed August 31, 1994).
3.3 Amended and Restated Articles of Incorporation of the Registrant,
effective April 19, 1995 (Incorporated herein by reference to Exhibit
to the Registrant's Current Report on Form 8-K, filed April 21, 1995).
4.1 Indenture between Registrant and Trustee, dated as of August 1, 1994
(Incorporated herein by reference to the Exhibits to Registrant's
Registration Statement No. 33-83524 on Form S-3 filed August 31, 1994).
4.2 Form of Supplement Indenture between Registrant and Trustee
(Incorporated herein by reference to the Exhibits to Registrant's
Registration Statement No. 33-83524 on Form S-3 filed August 31, 1994).
4.3 Copy of the Indenture, dated as of November 1, 1994, by and between the
Registrant and Texas Commerce Bank National Association, as Trustee
(Incorporated herein by reference to Exhibit to the Registrant's
Current Report on Form 8-K, filed December 19, 1994).
9
4.4 Copy of the Series 4 Indenture Supplement, dated as of June 1, 1995, by
and between the Registrant and Texas Commerce Bank National
Association, as Trustee (including schedules and exhibits)
(Incorporated herein by reference to Exhibit to the Registrant's
Current Report on Form 8-K, filed July 10, 1995).
4.5 Copy of the Series 10 Indenture Supplement, dated as of December 1,
1997, by and between the Registrant and Texas Commerce Bank National
Association, as Trustee (related schedules and exhibits available upon
request of the Trustee). (Incorporated herein by reference to Exhibit
of Registrant's Current Report on Form 8-K, filed January 6, 1998).
4.6 Copy of the Series 11 Indenture Supplement, dated as of March 1, 1998,
by and between the Registrant and Texas Commerce Bank National
Association, as Trustee (related schedules and exhibits available upon
request of the Trustee). (Incorporated herein by reference to Exhibit
of Registrant's Current Report on Form 8-K, filed June 12, 1998).
4.7 Copy of the Series 12 Indenture Supplement, dated as of March 1, 1999,
by and between the Registrant and Texas Commerce Bank National
Association, as Trustee (related schedules and exhibits available upon
request of the Trustee). (Incorporated herein by reference to Exhibit
of Registrant's Current Report on Form 8-K, filed April 12, 1999).
4.8 Copy of the Series 13 Indenture Supplement, dated as of August 1, 1999,
by and between the Registrant and Texas Commerce Bank National
Association, as Trustee (related schedules and exhibits available upon
request of the Trustee). (Incorporated herein by reference to Exhibit
of Registrant's Current Report on Form 8-K, filed September 13, 1999).
4.9 Copy of the Series 14 Indenture Supplement, dated as of November 1,
1999, by and between the Registrant and Texas Commerce Bank National
Association, as Trustee (related schedules and exhibits available upon
request of the Trustee). (Incorporated herein by reference to Exhibit
of Registrant's Current Report on Form 8-K, filed November 12, 1999).
99.1 Standard Provisions to Servicing Agreement (Incorporated herein
by reference to the Exhibits to Registrant's Registration Statement
No. 33-83524 on Form S-3 filed August 31, 1994).
99.2 Form of Servicing Agreement (Incorporated herein by reference to the
Exhibits to Registrant's Registration Statement No. 33-83524 on Form
S-3 filed August 31, 1994).
99.3 Standard Terms to Master Servicing Agreement (Incorporated herein by
reference to the Exhibits to Registrant's Registration Statement
No. 33-83524 on Form S-3 filed August 31, 1994).
99.4 Form of Master Servicing Agreement (Incorporated herein by reference
to the Exhibits to Registrant's Registration Statement No. 33-83524 on
Form S-3 filed August 31, 1994).
99.5 Form of Prospectus Supplement of Bonds secured by adjustable-rate
mortgage loans (Incorporated herein by reference to Exhibits to
Registrant's Pre-Effective Amendment No. 4 to Registration Statement
No.33-83524 on Form S-3 filed December 5, 1994).
99.6 Form of Financial Guaranty Assurance Policy (Incorporated herein
by reference to the Exhibits to Registrant's Registration Statement
No. 33-83524 on Form S-3 filed August 31, 1994).
99.7 Form of GEMICO Mortgage Pool Insurance Policy (Incorporated herein
by reference to the Exhibits to Registrant's Registration Statement
No. 33-83524 on Form S-3 filed August 31, 1994).
99.8 Form of PMI Mortgage Insurance Co. Pool Insurance Policy (Incorporated
herein by reference to the Exhibits to Registrant's Registration
Statement No. 33-83524 on Form S-3 filed August 31, 1994).
10
99.9 Form of Prospectus Supplement of Bonds secured by fixed-rate mortgage
loans (Incorporated herein by reference to Exhibits to Registrant's
Pre-Effective Amendment No. 4 to Registration Statement No. 33-83524 on
Form S-3 filed December 5, 1994).
99.10 Copy of the Saxon Mortgage Funding Corporation Servicing Guide for
Credit Sensitive Loans, February 1, 1995 Edition (Incorporated herein
by reference to Exhibit to the Registrant's Current Report on Form 8-K,
filed March 8, 1995).
99.11 Copy of Financial Guaranty Insurance Policy No. 50364-N issued by
Financial Guaranty Assurance Inc.,dated April 7, 1995, with respect
to the Series 3 Bonds (Incorporated herein by reference to Exhibit to
the Registrant's Current Report on Form 8-K, filed April 21, 1995).
99.12 Copy of Financial Guaranty Insurance Policy No. 50382-N issued by
Financial Guaranty Assurance Inc., dated June 29, 1995, with respect
to the Series 4 Bonds (Incorporated herein by reference to Exhibit to
the Registrant's Current Report on Form 8-K, filed July 10, 1995).
99.13 Copy of the Standard Terms to Master Servicing Agreement, June 1, 1995
Edition (Incorporated herein by reference to Exhibit to the
Registrant's Current Report on Form 8-K, filed July 10, 1995).
99.14 Copy of Financial Guaranty Insurance Policy No. 19804 issued by MBIA
Insurance Corporation (Incorporated herein by reference to Exhibit to
the Registrant's Current Report on Form 8-K, filed November 15, 1995).
99.15 Copy of Financial Guaranty Insurance Policy No. 20596 issued by MBIA
Insurance Corporation (Incorporated herein by reference to Exhibit to
the Registrant's Current Report on Form 8-K, filed March 21, 1996).
99.16 Copy of Financial Guaranty Insurance Policy No. 21296 issued by MBIA
Insurance Corporation (Incorporated herein by reference to Exhibit to
the Registrant's Current Report on Form 8-K, filed June 19, 1996).
(b) Reports on Form 8-K
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MERIT SECURITIES CORPORATION
By: /s/ Stephen J. Benedetti
-------------------------------------
Stephen J. Benedetti
(Principal Executive Officer)
By: /s/ Stephen J. Benedetti
-------------------------------------
Stephen J. Benedetti
Treasurer
(Principal Financial & Accounting
Officer)
Dated: October 4, 2002
12