-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D10EF1oz5uzfAI2WxnCRzwvqkITcNKjjkQo2alfP6eM+2fQf93fneymAN2vt4P5t FJi7tLzk2HXPIMCCxhMIRA== 0000785818-98-000002.txt : 19980330 0000785818-98-000002.hdr.sgml : 19980330 ACCESSION NUMBER: 0000785818-98-000002 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971228 FILED AS OF DATE: 19980327 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORTGAGE SECURITIES III TRUSTS A CENTRAL INDEX KEY: 0000785818 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 911314537 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 033-02253 FILM NUMBER: 98575677 BUSINESS ADDRESS: STREET 1: 33650 SIXTH AVENUE S. STREET 2: WRE 2-1 CITY: FEDERAL WAY STATE: WA ZIP: 98003 BUSINESS PHONE: 253-924-25 MAIL ADDRESS: STREET 1: 33650 SIXTH AVENUE S. STREET 2: WRE 2-1 CITY: FEDERAL WAY STATE: WA ZIP: 98003 FORMER COMPANY: FORMER CONFORMED NAME: MORTGAGE SECURITIES III TRUST 1986 A DATE OF NAME CHANGE: 19860409 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORTGAGE SECURITIES III TRUSTS B CENTRAL INDEX KEY: 0000799630 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 911314537 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 033-02253-01 FILM NUMBER: 98575678 BUSINESS ADDRESS: STREET 1: C/O WEYERHAEUSER MORTGAGE COMPANY TR-55 STREET 2: 6320 CANOGA AVE CITY: WOODLAND HILLS STATE: CA ZIP: 91367 BUSINESS PHONE: 8185922562 MAIL ADDRESS: STREET 1: C/O WEYERHAEUSER MORTGAGE CO TR-55 STREET 2: 6320 CANOGA AVE CITY: WOODLAND HILLS STATE: CA ZIP: 91367 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORTGAGE SECURITIES III TRUSTS D CENTRAL INDEX KEY: 0000808264 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 911314537 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 033-10942 FILM NUMBER: 98575679 BUSINESS ADDRESS: STREET 1: C/O WEYERHAEUSER MORTGAGE COMPANY TR-55 STREET 2: 6320 CANOGA AVE CITY: WOODLAND HILLS STATE: CA ZIP: 91367 BUSINESS PHONE: 8185922562 MAIL ADDRESS: STREET 1: C/O WEYERHAEUSER MORTGAGE CO TR-55 STREET 2: 6320 CANOGA AVE CITY: WOODLAND HILLS STATE: CA ZIP: 91367 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORTGAGE SECURITIES III TRUSTS C CENTRAL INDEX KEY: 0000814144 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 911314537 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 033-02253-02 FILM NUMBER: 98575680 BUSINESS ADDRESS: STREET 1: C/O WEYERHAEUSER MORTGAGE COMPANY STREET 2: 6320 CANOGA AVE CITY: WOODLAND HILLS STATE: CA ZIP: 91367 BUSINESS PHONE: 8185922562 MAIL ADDRESS: STREET 1: C/O WEYERHAEUSER MORTGAGE COMPANY TR-55 STREET 2: 6320 CANOGA AVE CITY: WOODLAND HILLS STATE: CA ZIP: 91367 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORTGAGE SECURITIES III TRUSTS E CENTRAL INDEX KEY: 0000826488 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 911314537 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 033-02253-03 FILM NUMBER: 98575681 BUSINESS ADDRESS: STREET 1: C/O WEYERHAEUSER MORTGAGE CO TR-55 STREET 2: 6320 CANOGA AVE CITY: WOODLAND HILLS STATE: CA ZIP: 91367 BUSINESS PHONE: 8185922562 MAIL ADDRESS: STREET 1: C/O WEYERHAEUSER MORTGAGE CO TR-55 STREET 2: 6320 CANOGA AVE CITY: WOODLAND HILLS STATE: CA ZIP: 91367 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORTGAGE SECURITIES III TRUSTS F CENTRAL INDEX KEY: 0000830431 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 911314537 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 033-02253-04 FILM NUMBER: 98575682 BUSINESS ADDRESS: STREET 1: C/O WEYERHAEUSER MORTGAGE CO TR-55 STREET 2: 6320 CANOGA AVE CITY: WOODLAND HILLS STATE: CA ZIP: 91367 BUSINESS PHONE: 8185922562 MAIL ADDRESS: STREET 1: C/O WEYERHAEUSER MORTGAGE CO TR-55 STREET 2: 6320 CANOGA AVE CITY: WOODLAND HILLS STATE: CA ZIP: 91367 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [x] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 28, 1997 Commission File Number 33-2253 MORTGAGE SECURITIES III TRUSTS A, B, C, D, E AND F Delaware Trusts (IRS Employer Identification No. 91-1314537) Wilmington, DE 19890 Telephone (302) 651-1730 Securities Registered Pursuant to Section 12(b) of the Act: None Securities Registered Pursuant to Section 12(g) of the Act: None Indicate by a 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 . The Registrant meets the conditions set forth in General Instruction J(1)(a) and (b) of Form 10-K and is therefore, filing this form with the reduced disclosure format. Mortgage Securities III Trusts A, B, C, D, E and F Table of Contents Page No. PART I --------- Item 1. Business..................................................1 Item 2. Properties................................................1 Item 3. Legal Proceedings.........................................1 Item 4. Submission of Matters to a Vote of Security Holders.1 PART II Item 5. Market for the Registrant's Beneficial Interest and Related Security Holder Matters.....................2 Item 6. Selected Financial Data...................................2 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations...........2 Item 8. Financial Statements and Supplementary Data...............3 Item 9. Disagreements on Accounting and Financial Disclosures.....3 PART III Item 10. Directors and Executive Officers of the Registrant.......4 Item 11. Executive Compensation...................................4 Item 12. Security Ownership of Certain Beneficial Owners and Management.........................................4 Item 13. Certain Relationships and Related Transactions...........4 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8- K..................................5 SIGNATURE..........................................................7 Report of Independent Public Accountants...........................8 Statements of Operations for the Three Years Ended December 28, 1997 Trust A ............................................... 10 Trust B ............................................... 11 Trust C ............................................... 12 Trust D ............................................... 13 Trust E ............................................... 14 Trust F ............................................... 15 Balance Sheets as of December 28, 1997 and December 29, 1996 Trust A ............................................... 16 Trust B ............................................... 17 Trust C ............................................... 18 Trust D ............................................... 19 Trust E ............................................... 20 Trust F ............................................... 21 Mortgage Securities III Trusts A, B, C, D, E and F Table of Contents Page No. -------- Statements of Changes in Owner's Beneficial Interest for the Three Years Ended December 28, 1997 Trust A ............................................... 22 Trust B ............................................... 23 Trust C ............................................... 24 Trust D ............................................... 25 Trust E ............................................... 26 Trust F ............................................... 27 Statements of Cash Flows for the Three Years Ended December 28, 1997 Trust A ............................................... 28 Trust B ............................................... 29 Trust C ............................................... 30 Trust D ............................................... 31 Trust E ............................................... 32 Trust F ............................................... 33 Notes to Financial Statements for the Three Years Ended December 28, 1997.............................................. 34 Schedule IV-Indebtedness to Related Parties - Not Current Trust E ............................................... 41 Trust F ............................................... 42 Schedule XIII-Other Security Investments Trust A ............................................... 43 Trust B ............................................... 44 Trust C ............................................... 45 Trust D ............................................... 46 Trust E ............................................... 47 Trust F ............................................... 48 INDEX TO EXHIBITS................................................49 PART I Item 1. Business Mortgage Securities III Trusts A, B, C, D, E and F (the "Trusts") were established under the laws of Delaware by a trust agreement. Prior to December 27, 1987, the trust agreement was among Mortgage Securities III Corporation, Weyerhaeuser Real Estate Company and Wilmington Trust Company. On December 27, 1987, Weyerhaeuser Real Estate Company dividended its beneficial interests in Mortgage Securities III Trusts A, B, C, D, E and F to Weyerhaeuser Company which in turn contributed its beneficial interests in the Trusts to Weyerhaeuser Financial Services, Inc., a wholly-owned subsidiary of Weyerhaeuser Company. The Trusts were organized to, and are engaged to raise funds through the issuance and sale of Collateralized Mortgage Obligation bonds collateralized by Government National Mortgage Association (GNMA) and Federal National Mortgage Association (FNMA) certificates. The Trusts A, B, C, D, E and F were established on April 8, 1986 and commenced business on June 30, 1986, September 30, 1986, December 30, 1986, February 27, 1987, December 22, 1987 and March 30, 1988, respectively. Each Trust has issued a series of Collateralized Mortgage Obligations (the "Bonds"). Trust A, B, C, D and F's Bonds are collateralized by GNMA and FNMA certificates and Trust E's Bonds are collateralized by GNMA certificates.
Trust Date Issued Bonds Issued A June 30, 1986 $100,000,000 B September 30, 1986 $100,000,000 C December 30, 1986 $100,000,000 D February 27, 1987 $ 75,600,000 E December 22, 1987 $131,600,000 F March 30, 1988 $129,250,000
Item 2. Properties The Trusts A, B, C, D, E and F have no physical properties. Item 3. Legal Proceedings The Trusts A, B, C, D, E and F are not a party to any material pending proceedings. Item 4. Submission of Matters to a Vote of Security Holders Omitted pursuant to General Instruction J(2)(c) of Form 10-K. - 1 - PART II Item 5. Market for the Registrant's Beneficial Interest and Related Security Holder Matters As of March 14, 1997, the Trusts' beneficial interest is owned by Mortgage Securities III Corporation and is not traded on any stock exchange or on the over-the-counter market. Item 6. Selected Financial Data Omitted pursuant to General Instruction J(2)(a) of Form 10-K. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Business activity during 1997, 1996 and 1995 consisted of the collection of principal and interest by the trustee on the GNMA and FNMA certificates and the disbursement of the required payment of interest and principal to the bondholders. The following table outlines principal payments made by the Trusts during 1997 to the Class 2, 3 and 4 bondholders (in thousands). Accrued interest was added to the principal balance of Class 4 bonds for Collateralized Mortgage Obligation Bonds Trusts B, E and F.
Class 2 Class 3 Class 4 Total ------- ------- -------- -------- Trust A $ - $ - $ 10,068 $ 10,068 Trust B - 1,014 1,751 2,765 Trust C - - 2,079 2,079 Trust D 302 2,106 N/A 2,408 Trust E - 2,681 3,902 6,583 Trust F - 1,152 9,319 10,471
This rate of payment is sufficient to retire the Bonds prior to their stated maturity. Item 8. Financial Statements and Supplementary Data The financial statements of the Trusts, together with the related Notes to Financial Statements and Report of Independent Public Accountants, for the three years ended December 28, 1997, are included herein. - 2 - Item 9. Disagreements on Accounting and Financial Disclosures There was no change in accountants, nor any material disagreement with accountants on any matter of accounting principles, practices or financial statement disclosures, during the year ended December 28, 1997. - 3 - PART III Item 10.Directors and Executive Officers of the Registrant Omitted pursuant to General Instruction J(2)(c) of Form 10-K. Item 11.Executive Compensation Omitted pursuant to General Instruction J(2)(c) of Form 10-K. Item 12.Security Ownership of Certain Beneficial Owners and Management Omitted pursuant to General Instruction J(2)(c) of Form 10-K. Item 13.Certain Relationships and Related Transactions Omitted pursuant to General Instruction J(2)(c) of Form 10-K. - 4 - PART IV Item 14.Exhibits, Financial Statement Schedules and Reports on Form 8-K (1) The following documents are filed as part of this report: (a) Report of Independent Public Accountants. (b) Financial Statements: Statements of Operations Trust A. for the Three Years Ended December 28,1997 Trust B. for the Three Years Ended December 28,1997 Trust C. for the Three Years Ended December 28,1997 Trust D. for the Three Years Ended December 28,1997 Trust E. for the Three Years Ended December 28,1997 Trust F. for the Three Years Ended December 28,1997 Balance Sheets Trust A. as of December 28, 1997 and December 29,1996 Trust B. as of December 28, 1997 and December 29,1996 Trust C. as of December 28, 1997 and December 29,1996 Trust D. as of December 28, 1997 and December 29,1996 Trust E. as of December 28, 1997 and December 29,1996 Trust F. as of December 28, 1997 and December 29,1996 Statements of Changes in Owner's Beneficial Interest Trust A. for the Three Years Ended December 28,1997 Trust B. for the Three Years Ended December 28,1997 Trust C. for the Three Years Ended December 28,1997 Trust D. for the Three Years Ended December 28,1997 Trust E. for the Three Years Ended December 28,1997 Trust F. for the Three Years Ended December 28,1997 Statements of Cash Flows Trust A. for the Three Years Ended December 28,1997 Trust B. for the Three Years Ended December 28,1997 Trust C. for the Three Years Ended December 28,1997 Trust D. for the Three Years Ended December 28,1997 Trust E. for the Three Years Ended December 28,1997 Trust F. for the Three Years Ended December 28,1997 Notes to Financial Statements for the Three Years Ended December 28,1997. - 5 - (c) Financial Statement Schedules: Schedule IV-Indebtedness to Related Parties - Not Current Trust E Schedule IV-Indebtedness to Related Parties - Not Current Trust F Schedule XIII - Other Security Investments Trust A Schedule XIII - Other Security Investments Trust B Schedule XIII - Other Security Investments Trust C Schedule XIII - Other Security Investments Trust D Schedule XIII - Other Security Investments Trust E Schedule XIII - Other Security Investments Trust F (d) Exhibits: Certificate of Incorporation of Mortgage Securities III Corporation (incorporated by reference to 3(a) to Registration Statement on Form S-11 dated December 18, 1985). Bylaws of Mortgage Securities III Corporation (incorporated by reference to Exhibit 3(b) to Registration Statement on Form S-11 dated December 18, 1985). Form of Indenture dated June 1, 1986 between the Trust and Texas Commerce Bank National Association, as Trustee, relating to GNMA and FNMA Collateralized Mortgage Obligations (incorporated by reference to Exhibit 4(a) to Registration Statement on Form S-11 dated December 18, 1985). Form of Supplemental Indenture dated as of June 1, 1986 (incorporated by reference to Exhibit 4(a) to Registration Statement on Form S-11 dated July 11, 1986). (2) Exhibits are included in Item (1)(d) above. (3) Financial Statement Schedules required by Regulation S-X are included in Item (1)(c) above. - 6 - 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 this 11th day of February 1998. MORTGAGE SECURITIES III TRUSTS A, B, C, D, E AND F Trusts acting through Wilmington Trust Company, not in its individual capacity, but solely as Owner Trustee By: /s/ Denise M. Geran Financial Services Officer - 7 - Report of Independent Public Accountants To the Beneficial Owner of Mortgage Securities III Trusts A, B, C, D, E and F We have audited the accompanying balance sheets of Mortgage Securities III Trusts A, B, C, D, E and F (trusts established under the laws of the State of Delaware) as of December 28, 1997 and December 29, 1996, and the related statements of operations, changes in owner's beneficial interest, and cash flows for each of the three years in the period ended December 29, 1997. These financial statements and the schedules referred to below are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and schedules 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, the financial statements referred to above present fairly, in all material respects, the financial position of Mortgage Securities III Trusts A, B, C, D, E and F, as of December 28, 1997 and December 29, 1996, and the results of their operations and their cash flows for each of the three years in the period ended December 28, 1997 in conformity with generally accepted accounting principles. - 8 - Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in the index to financial statements are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP Seattle, WA February 11, 1998 - 9 -
Mortgage Securities III Trust A Statements of Operations For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) 1997 1996 1995 --------- --------- --------- Interest income $ 676 $ 1,035 $ 1,203 Interest expense 594 970 1,144 Other income 425 - - --------- --------- --------- Net income $ 507 $ 65 $ 59 ========= ========= =========
The accompanying notes are an integral part of these statements. - 10 -
Mortgage Securities III Trust B Statements of Operations For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) 1997 1996 1995 -------- --------- --------- Interest income $ 1,573 $ 1,634 $ 1,927 Interest expense 1,481 1,573 1,870 --------- --------- --------- Net income $ 92 $ 61 $ 57 ========= ========= =========
The accompanying notes are an integral part of these statements. - 11 -
Mortgage Securities III Trust C Statements of Operations For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) 1997 1996 1995 -------- --------- --------- Interest income $ 1,312 $ 1,441 $ 1,725 Interest expense 1,426 1,490 1,761 --------- --------- --------- Net loss $ (114) $ (49) $ (36) ========= ========= =========
The accompanying notes are an integral part of these statements. - 12 -
Mortgage Securities III Trust D Statements of Operations For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) 1997 1996 1995 -------- --------- --------- Interest income $ 1,145 $1,363 $ 1,554 Interest expense 1,198 1,357 1,538 --------- --------- --------- Net income (loss) $ (53) $ 6 $ 16 ========= ========= =========
The accompanying notes are an integral part of these statements. - 13 -
Mortgage Securities III Trust E Statements of Operations For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) 1997 1996 1995 -------- --------- --------- Interest income $ 3,994 $ 4,305 $ 4,854 Interest expense 4,716 5,195 5,387 Interest expense to affiliate 696 2,892 2,753 (Note 5) --------- --------- --------- Net loss $(1,418) $(3,782) $(3,286) ========= ========= =========
The accompanying notes are an integral part of these statements. - 14 -
Mortgage Securities III Trust F Statements of Operations For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) 1997 1996 1995 -------- --------- --------- Interest income $ 822 $ 1,211 $ 1,398 Interest expense 917 1,246 1,400 Interest expense to affiliate 180 1,068 1,338 (Note 5) Other income 450 - - --------- --------- --------- Net income (loss) $ 175 $(1,103) $(1,340) ========= ========= =========
The accompanying notes are an integral part of these statements. - 15 -
Mortgage Securities III Trust A Balance Sheets December 28, 1997 and December 29, 1996 (Dollar amounts in thousands) 1997 1996 -------- -------- Cash and equivalents: Trust account $ - $ 1 Collection account (Notes 3 and 4) 2 769 2 770 Receivable from Beneficial Owner 1,263 - Interest receivable - 85 Government National and Federal National Mortgage Association Certificates, net of unamortized premium of $0 and $35 (Notes 2, 4 and 5) - 10,227 -------- -------- TOTAL ASSETS - TRUST A $ 1,265 $ 11,082 ======== ======== Liabilities and Owner's Beneficial Interest Interest payable $ - $ 305 Collateralized Mortgage Obligation bonds, net (Notes 1, 2, 3, 4 and 5) - 10,019 Owner's Beneficial Interest: Owner's beneficial interest 1 1 Retained earnings 1,264 757 -------- -------- Total Owner's Beneficial Interest 1,265 758 -------- -------- TOTAL LIABILITIES AND OWNER'S BENEFICIAL INTEREST - TRUST A $1,265 $ 11,082 ======== ========
The accompanying notes are an integral part of these statements. - 16 -
Mortgage Securities III Trust B Balance Sheets December 28, 1997 and December 29, 1996 (Dollar amounts in thousands) 1997 1996 -------- -------- Assets Cash and equivalents: Trust account $ 1 $ 1 Collection account (Notes 3 and 4) 699 897 -------- -------- 700 898 Interest receivable 105 136 Government National and Federal National Mortgage Association Certificates, net of unamortized discount of $0 and $197 (Notes 2, 4 and 5) 14,671 16,652 -------- -------- TOTAL ASSETS - TRUST B $ 15,476 $ 17,686 ======== ======== Liabilities and Owner's Beneficial Interest Interest payable $ 302 $ 472 Collateralized Mortgage Obligation bonds, net (Notes 1, 2, 3, 4 and 5) 13,438 15,570 Owner's Beneficial Interest: Owner's beneficial interest 1 1 Retained earnings 1,735 1,643 -------- -------- Total Owner's Beneficial Interest 1,736 1,644 -------- -------- TOTAL LIABILITIES AND OWNER'S BENEFICIAL INTEREST - TRUST B $ 15,476 $ 17,686 ======== ========
The accompanying notes are an integral part of these statements. - 17 -
Mortgage Securities III Trust C Balance Sheets December 28, 1997 and December 29, 1996 (Dollar amounts in thousands) 1997 1996 ------- ------- Assets Cash and equivalents: Trust account $ 1 $ 1 Collection account (Notes 3 and 4) 889 900 ------- -------- 890 901 Interest receivable 87 108 Government National and Federal National Mortgage Association Certificates, net of unamortized discount of $0 and $154 (Notes 2, 4 and 5) 12,238 14,182 ------- -------- TOTAL ASSETS - TRUST C $ 13,215 $ 15,191 ======== ========= Liabilities and Owner's Beneficial Interest Interest payable $ 274 $ 426 Collateralized Mortgage Obligation bonds, net (Notes 1, 2, 3, 4 and 5) 12,241 13,951 Owner's Beneficial Interest: Owner's beneficial interest 1 1 Retained earnings 699 813 ------- --------- Total Owner's Beneficial Interest 700 814 ------- --------- TOTAL LIABILITIES AND OWNER'S BENEFICIAL INTEREST - TRUST C $ 13,215 $ 15,191 ======== =========
The accompanying notes are an integral part of these statements. - 18 -
Mortgage Securities III Trust D Balance Sheets December 28, 1997 and December 29, 1996 (Dollar amounts in thousands) 1997 1996 -------- --------- Assets Cash and equivalents: Trust account $ 1 $ 1 Collection account (Notes 3 and 4) 120 239 -------- --------- 121 240 Receivable from beneficial owner 28 45 Interest receivable 88 107 Government National and Federal National Mortgage Association Certificates, net of unamortized premium of $0 and $60 (Notes 2, 4 and 5) 12,697 15,095 -------- -------- TOTAL ASSETS - TRUST D $ 12,934 $ 15,487 ======== ======== Liabilities and Owner's Beneficial Interest Interest payable $ 90 $ 213 Collateralized Mortgage Obligation bonds, net (Notes 1, 2, 3, 4 and 5) 12,494 14,801 Owner's Beneficial Interest: Owner's beneficial interest 1 1 Retained earnings 349 472 -------- -------- Total Owner's Beneficial Interest 350 473 -------- -------- TOTAL LIABILITIES AND OWNER'S BENEFICIAL INTEREST - TRUST D $12,934 $ 15,487 ======== ========
The accompanying notes are an integral part of these statements. - 19 -
Mortgage Securities III Trust E Balance Sheets December 28, 1997 and December 29, 1996 (Dollar amounts in thousands) 1997 1996 -------- -------- Assets Cash and equivalents: Trust account $ 1 $ 1 Collection account (Notes 3 and 4) 2,312 2,120 -------- -------- 2,313 $ 2,121 Interest receivable 281 336 Government National Mortgage Association Certificates net of unamortized discount of $0 and $339 (Notes 2, 4 and 5) 42,071 47,636 Deferred hedging costs (Note 2) - 320 ---------- --------- TOTAL ASSETS - TRUST E $44,665 $50,413 ========== ========= Liabilities and Owner's Beneficial Interest Interest payable $ 858 $ 986 Collateralized Mortgage Obligation bonds, net (Notes 1, 2, 3, 4 and 5) 35,819 40,717 Payable to Weyerhaeuser Mortgage Company - 35,597 (Note 5) Owner's Beneficial Interest: Owner's beneficial interest 36,294 1 Accumulated deficit (28,306) (26,888) ---------- --------- Total Owner's Beneficial Interest 7,988 (26,887) ---------- --------- TOTAL LIABILITIES AND OWNER'S BENEFICIAL INTEREST - TRUST E $44,665 $50,413 ========= ========
The accompanying notes are an integral part of these statements. - 20 -
Mortgage Securities III Trust F Balance Sheets December 28, 1997 and December 29, 1996 (Dollar amounts in thousands) 1997 1996 ------- ------- Assets Cash and equivalents: Trust account $ - $ 1 Collection account (Notes 3 and 4) 2 648 ------- ------- 2 649 Receivable from beneficial owner 2,832 - Interest receivable - 90 Government National and Federal National Mortgage Association Certificates, net of unamortized discount of $0 and $25 (Notes 2, 4 and 5) - 11,949 Deferred hedging costs (Note 2) - 85 ------- ------- TOTAL ASSETS - TRUST F $ 2,834 $ 12,773 ======= ======= Liabilities and Owner's Beneficial Interest Interest payable $ - $ 304 Collateralized Mortgage Obligation bonds, net (Notes 1, 2, 3, 4 and 5) - 9,990 Payable to Weyerhaeuser Mortgage Company (Note 5) - 9,194 Owner's Beneficial Interest: Owner's beneficial interest 9,375 1 Accumulated deficit (6,541) (6,716) ------- ------- Total Owner's Beneficial Interest 2,834 (6,715) ------- ------- TOTAL LIABILITIES AND OWNER'S BENEFICIAL INTEREST - TRUST F $ 2,834 $ 12,773 ======= =======
The accompanying notes are an integral part of these statements. - 21 -
Mortgage Securities III Trust A Statements of Changes in Owner's Beneficial Interest For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) Owners Beneficial Retained Interest Earnings Total --------- --------- -------- Balance at December 25, 1994 $ 1 $ 2,379 $2,380 Net income - 59 59 --------- --------- -------- Balance at December 31, 1995 1 2,438 2,439 Dividends paid - (1,746) (1,746) Net income - 65 65 --------- --------- -------- Balance at December 29, 1996 1 757 758 Net income - 507 507 --------- --------- -------- Balance at December 28, 1997 $ 1 $ 1,264 $1,265
The accompanying notes are an integral part of these statements. - 22 -
Mortgage Securities III Trust B Statements of Changes in Owner's Beneficial Interest For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) Owners Beneficial Retained Interest Earnings Total --------- --------- -------- Balance at December 25, 1994 $ 1 $ 1,895 $1,896 Net income - 57 57 --------- --------- -------- Balance at December 31, 1995 1 1,952 1,953 Dividends paid - (370) (370) Net income - 61 61 --------- --------- -------- Balance at December 29, 1996 1 1,643 1,644 Net income - 92 92 --------- --------- -------- Balance at December 28, 1997 $ 1 $ 1,735 $1,736
The accompanying notes are an integral part of these statements. - 23 -
Mortgage Securities III Trust C Statements of Changes in Owner's Beneficial Interest For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) Owners Beneficial Retained Interest Earnings Total --------- --------- -------- Balance at December 25, 1994 $ 1 $ 1,134 $1,135 Net loss - (36) (36) --------- --------- -------- Balance at December 31, 1995 1 1,098 1,099 Dividends paid - (236) (236) Net loss - (49) (49)65 --------- --------- -------- Balance at December 29, 1996 1 813 814 Net loss - (114) (114) --------- --------- -------- Balance at December 28, 1997 $ 1 $ 699 $ 700
The accompanying notes are an integral part of these statements. - 24 -
Mortgage Securities III Trust D Statements of Changes in Owner's Beneficial Interest For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) Owners Beneficial Retained Interest Earnings Total --------- --------- -------- Balance at December 25, 1994 $ 1 $ 2,115 $2,116 Net income - 16 16 --------- --------- -------- Balance at December 31, 1995 1 2,131 2,132 Dividends paid - (1,665) (1,665) Net income - 6 6 --------- --------- -------- Balance at December 29, 1996 1 472 473 Dividends paid - (70) (70) Net loss - (53) (53) --------- --------- -------- Balance at December 28, 1997 $ 1 $ 349 $ 350
The accompanying notes are an integral part of these statements. - 25 -
Mortgage Securities III Trust E Statements of Changes in Owner's Beneficial Interest For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) Owners Beneficial Accumulated Interest Deficit Total ---------- ----------- -------- Balance at December 25, 1994 $ 1 $(18,158) $(18,157) Net loss - (3,286) (3,286) ---------- ----------- -------- Balance at December 31, 1995 1 (21,444) (21,443) Dividends paid - (1,662) (1,662) Net loss - (3,782) (3,782) ---------- ----------- -------- Balance at December 29, 1996 1 (26,888) (26,887) Contribution 36,293 - 36,293 Net loss - (1,418) (1,418) ---------- ----------- -------- Balance at December 28, 1997 $ 36,294 $(28,306) $ 7,988
The accompanying notes are an integral part of these statements. - 26 -
Mortgage Securities III Trust F Statements of Changes in Owner's Beneficial Interest For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) Owners Beneficial Accumulated Interest Deficit Total ---------- ----------- -------- Balance at December 25, 1994 $ 1 $(10,110) $(10,109) Net loss - (1,340) (1,340) ---------- ----------- -------- Balance at December 31, 1995 1 (11,450) (11,449) Contribution - 5,837 5,837 Net loss - (1,103) (1,103) ---------- ----------- -------- Balance at December 29, 1996 1 (6,716) (6,715) Contribution 9,374 - 9,374 Net income - 175 175 ---------- ----------- -------- Balance at December 28, 1997 $ 9,375 $ (6,541) $ 2,834
The accompanying notes are an integral part of these statements. - 27 -
Mortgage Securities III Trust A Statements of Cash Flows For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) 1997 1996 1995 -------- -------- -------- Cash flows from operations: Net income $ 507 $ 65 $ 59 Non-cash charges to income: Amortizations 3 13 19 Write-offs 81 - - Changes in: Interest receivable 85 13 16 Receivable from beneficial owner (1,263) 1,746 - Interest payable (305) (50) (69) -------- -------- -------- Net cash flows from operations (892) 1,787 25 -------- -------- -------- Cash flows from investing activities: Sale of/collections on mortgage backed certificates 10,192 1,539 2,059 Cash flows from financing activities: Dividends paid - (1,746) - Payments on collateralized mortgage obligation bonds. (10,068) (1,655) (2,260) -------- -------- -------- Cash flows from financing activities (10,068) (3,401) (2,260) -------- -------- -------- Net increase (decrease) in cash and equivalents (768) (75) (176) Cash and equivalents at beginning of year 770 845 1,021 -------- -------- -------- Cash and equivalents at end of year $ 2 $ 770 $ 845 ======== ======== ======== Supplemental disclosure: Cash paid during the year for interest $ 850 $1,012 $ 1,201
The accompanying notes are an integral part of these statements. - 28 -
Mortgage Securities III Trust B Statements of Cash Flows For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) 1997 1996 1995 -------- -------- --------- Cash flows from operations: Net income $ 92 $ 61 $ 57 Non-cash charges to income: Amortizations 3 30 23 Write-offs 99 - - Accretion of interest 334 1,265 1,157 Changes in: Interest receivable 31 25 21 Receivable from beneficial owner - 370 - Interest payable (170) (98) (86) -------- -------- --------- Net cash flows from operations 389 1,653 1,172 -------- -------- --------- Cash flows from investing activities: Collections on mortgage backed certificates 2,178 3,135 2,807 Cash flows from financing activities: Dividends paid - (370) - Payments on collateralized mortgage obligation bonds (2,765) (4,524) (4,068) -------- -------- --------- Cash flows from financing activities (2,765) (4,894) (4,068) -------- -------- --------- Net decrease in cash and equivalents (198) (106) (89) Cash and equivalents at beginning of year 898 1,004 1,093 -------- -------- --------- Cash and equivalents at end of year $ 700 $ 898 $ 1,004 -------- -------- --------- Supplemental disclosure: Cash paid during the year for interest $ 1,353 $ 340 $ 741
The accompanying notes are an integral part of these statements. - 29 -
Mortgage Securities III Trust C Statements of Cash Flows For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) 1997 1996 1995 ------- -------- -------- Cash flows from operations: Net loss $ (114) $ (49) $ (36) Non cash charges: Amortizations 13 55 41 Write-offs 202 - - Changes in: Interest receivable 21 30 16 Receivable from beneficial owner - 236 - Interest payable (152) (109) (75) ------- -------- -------- Net cash flows from operations (30) 163 (54) ------- -------- -------- Cash flows from investing activities Collections on mortgage backed certificates 2,098 3,579 2,592 Cash flows from financing activities: Dividends paid - (236) - Payments on collateralized mortgage obligation bonds (2,079) (3,673) (2,485) ------- -------- -------- Cash flows from financing activities (2,079) (3,909) (2,485) ------- -------- -------- Net increase (decrease) in cash and equivalents (11) (167) 53 Cash and equivalents at beginning of year 901 1,068 1,015 ------- -------- -------- Cash and equivalents at end of year $ 890 $ 901 $ 1,068 ======= ======== ======== Supplemental disclosure: Cash paid during the year for interest $ 1,207 $1,504 $ 1,767
The accompanying notes are an integral part of these statements. - 30 -
Mortgage Securities III Trust D Statements of Cash Flows For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) 1997 1996 1995 -------- --------- -------- Cash flows from operations: Net income(loss) $ (53) $ 6 $ 16 Non-cash charges: Amortizations 7 19 20 Write-offs 154 - - Changes in: Interest receivable 19 17 12 Receivable from beneficial owner 17 1,608 (81) Interest payable (123) (28) (25) -------- --------- -------- Net cash flows from operations 21 1,622 (58) -------- --------- -------- Cash flows from investing activities: Collections on mortgage backed certificates 2,338 1,994 1,784 Cash flows from financing activities: Dividends paid (70) (1,665) - Payments on collateralized mortgage obligation bonds (2,408) (1,935) (1,781) -------- --------- -------- Cash flows from financing activities (2,478) (3,600) (1,781) -------- --------- -------- Net increase (decrease) in cash and equivalents (119) 16 (55) Cash and equivalents at beginning of year 240 224 279 -------- --------- -------- Cash and equivalents at end of year $ 121 $ 240 $ 224 ======== ========= ======== Supplemental disclosure: Cash paid during the year for interest $ 1,220 $ 1,372 $ 1,551
The accompanying notes are an integral part of these statements. - 31 -
Mortgage Securities III Trust E Statements of Cash Flows For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) 1997 1996 1995 -------- --------- --------- Cash flows from operations: Net loss $(1,418) $(3,782) $(3,286) Non-cash charges: Amortizations 758 858 474 Write-offs (17) - - Accretion of interest 925 3,501 3,203 Changes in: Interest receivable 55 53 38 Receivable from beneficial owner - 1,662 - Interest payable (128) (157) (133) Interest payable to Weyerhaeuser Mortgage Company (18,656) 2,892 2,753 (Note 5) -------- --------- --------- Net cash flows from operations (18,481) 5,027 3,049 -------- --------- --------- Cash flows from investing activities: Collections on mortgage backed certificates 5,904 6,544 6,038 Cash flows from financing activities: Contribution 36,293 - - Dividends paid - (1,662) - Payments on collateralized mortgage obligation bonds (6,583) (10,505) (9,082) Payments to Weyerhaeuser Mortgage Company - (16,941) - -------- --------- --------- Cash flows from financing activities: 12,769 (12,167) (9,082) -------- --------- --------- Net (decrease) increase in cash and equivalents 192 (596) 5 Cash and equivalents at beginning of year 2,121 2,717 2,712 -------- --------- --------- Cash and equivalents at end of year $ 2,313 $ 2,121 $ 2,717 ======== ========= ========= Supplemental disclosure: Cash paid during the year for interest $23,118 $ 845 $ 1,716
The accompanying notes are an integral part of these statements. - 32 -
Mortgage Securities III Trust F Statements of Cash Flows For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) 1997 1996 1995 -------- -------- -------- Cash flows from operations: Net income (loss) $ 175 $(1,103) $(1,340) Non-cash charges to income: Amortizations 71 187 144 Write-offs 260 - - Accretion of interest 415 776 710 Changes in: Interest receivable 90 21 17 Interest payable (304) (85) (75) Receivable from beneficial owner (2,832) 1,937 - Interest payable to Weyerhaeuser Mortgage Company (Note 5) (8,570) 1,068 1,338 -------- -------- -------- Net cash flows from operations (10,695) 2,801 794 -------- -------- -------- Cash flows from investing activities: Sale of/collections on mortgage backed certificates 11,974 2,684 1,971 Cash flows from financing activities: Contribution 9,374 5,837 - Payments on Weyerhaeuser Mortgage Company note (624) (7,773) - Payments on collateralized mortgage obligation bonds (10,676) (3,585) (3,317) -------- -------- -------- Cash flows from financing activities (1,926) (5,521) (3,317) -------- -------- -------- Net increase (decrease) in cash and equivalents (647) (36) (552) Cash and equivalents at beginning of year 649 685 1,237 -------- -------- -------- Cash and equivalents at end of year $ 2 $ 649 $ 685 -------- -------- -------- Supplemental disclosure: Cash paid during the year for interest $ 9,616 $ 339 $ 606
The accompanying notes are an integral part of these statements. - 33 - Mortgage Securities III Trusts A, B, C, D, E and F Notes to Financial Statements For the Three Years Ended December 28, 1997 (Dollar amounts in thousands) Note 1.Description of business: Mortgage Securities III Trusts A, B, C, D, E and F (the "Trusts") were established under the laws of Delaware by a trust agreement. Prior to December 27, 1987, the trust agreement was among Mortgage Securities III Corporation, Weyerhaeuser Real Estate Company and Wilmington Trust Company. On December 27, 1987, Weyerhaeuser Real Estate Company dividended its beneficial interests in Mortgage Securities III Trusts A, B, C, D, E and F to Weyerhaeuser Company which in turn contributed its beneficial interests in the Trusts to Weyerhaeuser Financial Services, Inc., a wholly-owned subsidiary of Weyerhaeuser Company. The Trusts were organized to, and are engaged to raise funds through the issuance and sale of Collateralized Mortgage Obligation bonds collateralized by Government National Mortgage Association (GNMA) and Federal National Mortgage Association (FNMA) certificates. The Trusts A, B, C, D, E and F were established on April 8, 1986 and commenced business on June 30, 1986, September 30, 1986, December 30, 1986, February 27, 1987, December 22, 1987 and March 30, 1988, respectively. Each Trust has issued a series of Collateralized Mortgage Obligations (the "Bonds"). Trust A, B, C, D and F's Bonds are collateralized by GNMA and FNMA certificates and Trust E's Bonds are collateralized by GNMA certificates. - 34 -
Trust Date Issued Bonds Issued A June 30, 1986 $100,000 B September 30, 1986 $100,000 C December 30, 1986 $100,000 D February 27, 1987 $ 75,600 E December 22, 1987 $131,600 F March 30, 1988 $129,250
Activity during 1997, 1996 and 1995, primarily consisted of the collection of principal and interest on the GNMA and FNMA certificates and disbursement of the required payment of principal and interest to the bondholders. Note 2.Accounting policies: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In 1997, the bonds in Trusts A and F were called and any remaining discounts were written off. The bond discounts on Trusts B, C, and D were written off as management intends to prepay the bonds at the earliest allowable prepayment date and the amounts are no longer material. The bond discount for Trust E is amortized on a straight line basis over the remaining life of the instruments. Cash and equivalents include cash held in the collection accounts and invested in short term investments with original maturities of less than three months. The amortized cost and estimated market values of investments in debt securities are as follows: - 35 -
Gross Gross Estimated Unrealized Unrealized Market Held to Maturity: Cost Gains Losses Value -------- -------- -------- --------- Mortgage-backed Securities Trust A $ N/A $ N/A $ N/A $ N/A Trust B 14,671 800 - 15,471 Trust C 12,238 654 - 12,892 Trust D 12,697 632 - 13,329 Trust E 42,071 1,517 - 43,588 Trust F N/A N/A N/A N/A
Per the terms of the prospectus, the Trusts are legally precluded from selling the investments in debt securities, except in the case of a call of the Collateralized Mortgage Obligation bonds as discussed in Note 3. Note 3.Collateralized Mortgage Obligation Bonds:
Collateralized Mortgage Obligation Bonds at December 28, 1997 and December 29, 1996 consist of the following: 1997 1996 Trust A: -------- ------- -------- Class 4 - 9.20%, stated maturity July 1, 2016 (repaid October 1,1997) $ - $10,068 Unamortized discount - (49) -------- ------- - $10,019 Trust B: -------- Class 3 - 9.00%, stated maturity April 1, 2010 (repaid April 1, 1997) $ - $ 1,014 Class 4 - 9.00%, stated maturity October 1, 2016 13,438 14,855 Unamortized discount (299) -------- ------- $13,438 $15,570 Trust C: -------- Class 4 - 9.00%, stated maturity January 1, 2017 $12,241 $14,320 Unamortized discount (369) -------- ------- $12,241 $13,951 Trust D: -------- Class 2 - 8.55%, stated maturity December 1, 2014 (repaid March 3,1997) $ - $ 302 Class 3 - 8.60%, stated maturity March 1, 2017 12,494 14,600 Unamortized discount (101) -------- ------- $12,494 $14,801 - 36 - Trust E: -------- Class 3 - 9.00%, stated maturity January 1, 2006 (repaid April 1,1997) $ - $ 2,681 Class 4 - 9.00%, stated maturity January 1, 2018 38,140 41,117 Unamortized discount (2,321) (3,081) -------- ------- $35,819 $40,717
Trust F: -------- Class 3 - 9.00%, stated maturity January 1, 2014 (repaid July 1,1997) $ $1,152 Class 4 - 9.00%, stated maturity April 1, 2018 (repaid October 1,1997) 9,109 Unamortized discount (271) -------- ------- $ - $9,990
The stated maturity is the date such class will be fully paid, assuming that scheduled interest and principal payments (with no prepayments) on the certificates are timely received. All collections on the certificates pledged as security for the Bonds will be remitted directly to a collection account (the "Collection Account") established with the Trustee and together with the reinvestment earnings thereon, will be available for application to the payment of principal and interest on the bonds on the following payment date. Each Trust's Bonds are subject to a special redemption, in whole or in part, if, as a result of substantial payments of principal on the underlying mortgage loans and/or low reinvestment yields, the Trusts determine that the amount of cash anticipated to be on deposit in the Collection Accounts on the next payment date might be insufficient to make required payments on the Bonds. Any such redemption would not exceed the principal amount of Bonds that would otherwise be required to be paid on the next payment date. As a result, a special redemption of Bonds will not result in a payment to bondholders more than two months earlier than the payment date on which such payment would otherwise have been received. The Bonds are not otherwise subject to call at the option of the Trusts except that (a) Trust B, C, and E's Class 4 Bonds may be redeemed in whole, but not in part, at the Trusts' option on any payment date on or - 37 - after October 1, 2001, January 1, 2002 and January 1, 2003, respectively, (or on any earlier payment date if the current principal amount of Trust B, C and E's Class 4 Bonds are less than $6,100, $10,500 and $13,160, respectively) and (b) Trust D's Class 3 Bonds may be redeemed in whole, but not in part, at the Trust's option on any payment date on or after March 1, 2002, or on any earlier payment date if the aggregate outstanding principal amount of the Bonds of the class to be redeemed is less than 10 percent of its aggregate initial principal amount. Any such redemptions at the option of the Trusts shall be at a price equal to 100 percent of the unpaid principal amount of such Bonds plus accrued interest. The maturities of the Collateralized Mortgage Obligation Bonds are based on the prepayment speed (liquidation's) on the GNMA and FNMA certificates collateralizing the Bonds and the reinvestment of scheduled distributions at the assumed reinvestment rates. Maturities for the succeeding five years which estimates liquidations based on current market interest rates are as follows:
Trust Trust Trust Trust Trust Trust A B C D E F 1998 N/A 2,598 2,825 2,482 5,339 N/A 1999 N/A 2,223 2,213 1,253 4,827 N/A 2000 N/A 1,907 1,733 1,437 4,374 N/A 2001 N/A 1,632 1,358 1,203 3,976 N/A 2002 N/A 1,400 1,043 988 3,605 N/A
- 38 - Note 4. Assets pledged: Trust B, C and D's Bonds are collateralized by the Trusts' GNMA and FNMA certificates and the Collection Accounts (see Note 3). Trust E's Bonds are collateralized by Trust E's GNMA certificates. Collections on the certificates are used to meet the quarterly Bond interest payments and to reduce the outstanding principal balance on the Bonds. As of December 28, 1997, certificates are guaranteed by the Government National Mortgage Association and the Federal National Mortgage Association as follows:
Government National Federal National Mortgage Association Mortgage Association Trust A $ N/A $ N/A Trust B 12,648 2,023 Trust C 8,712 3,526 Trust D 11,126 1,571 Trust E 42,071 N/A Trust F N/A N/A
Note 5. Related parties: Trusts A, B, C and D purchased from an affiliate, Weyerhaeuser Mortgage Company, GNMA and FNMA certificates which were used to collateralize the Bonds. The purchases were at par value, plus Trust A and D's purchase premiums and less Trust B and C's purchase discounts. The purchases were financed with market-rate short-term debt from this affiliate until proceeds from the bond issuance were obtained. Trust E purchased from an affiliate, Weyerhaeuser Mortgage Company, GNMA certificates which were used to collateralize the Bonds. Trust F purchased from an affiliate, Weyerhaeuser Mortgage Company, GNMA and FNMA certificates which were used to collateralize the Bonds. The purchases were at par value, less the purchase discounts. The purchases were financed with the proceeds received from the Bond issuances and notes due to Weyerhaeuser Mortgage Company. The notes accrued interest at Bank of America's prime rate and compounded interest annually. Both the principal and interest related to the Weyerhaeuser Mortgage Company payables were paid off by Weyerhaeuser Financial Services, Inc. (Beneficial Owner) in March 1997, in anticipation of the sale of Weyerhaeuser Mortgage Company to an unrelated third party by Weyerhaeuser Financial Services, Inc. and the Weyerhaeuser Company. In August 1997, Weyerhaeuser Financial Services, Inc. contributed capital to Trusts E & F, increasing beneficial owner's interest. The Beneficial Owner advanced funds to Trusts A and F during the third quarter. The funds were repaid during the fourth quarter. No interest was charged as the advances were treated as a current payable. - 39 - Certain ongoing administrative and accounting functions are provided by the Beneficial Owner at no cost to each Trust. Note 6. Results of operations: All results of operations will be transferred to the Beneficial Owner of the Trusts. Mortgage Securities III Corporation will be responsible for all tax liabilities incurred relating to the Trusts' operations. - 40 -
Mortgage Securities III Trust E Schedule IV - Indebtedness to Related Parties - Not Current December 28, 1997 (Dollar amounts in thousands) Name of December 29, Indebtedness to December 28, Related Party 1996 Additions Deductions 1997 ------------- ------------ ----------- ---------- ------------ Weyerhaeuser Mortgage Company $35,597 $ 696 $36,293 $ 0 Weyerhaeuser Financial Services, $ 0 $36,293 $36,293 $ 0 Inc.
On December 22, 1987, Trust E purchased from an affiliate, Weyerhaeuser Mortgage Company, GNMA certificates which were used to collateralize the Bonds. The purchases were at par value, less the purchase discounts. The purchases were financed with the proceeds received from the Bond issuances and a note due to Weyerhaeuser Mortgage Company. The note accrued interest at Bank of America's prime rate and compounded interest annually. Both the principal and interest related to the Weyerhaeuser Mortgage Company payable were paid off in March 1997, in anticipation of the sale of Weyerhaeuser Mortgage Company to an unrelated third party by Weyerhaeuser Financial Services, Inc. and Weyerhaeuser Company. In August 1997, Weyerhaeuser Financial Services, Inc. (Beneficial Owner) contributed capital to Trusts E, increasing Beneficial Owner's interest. - 41 -
Mortgage Securities III Trust F Schedule IV - Indebtedness to Related Parties - Not Current December 28, 1997 (Dollar amounts in thousands) Name of December 29, Indebtedness to December 28, Related Party 1996 Additions Deductions 1997 ------------- ------------ ----------- ---------- ------------ Weyerhaeuser Mortgage Company $ 9,194 $ 180 $ 9,374 $ 0 Weyerhaeuser Financial Services, $ 0 $9,374 $ 9,374 $ 0 Inc.
On March 30, 1988, Trust F purchased from an affiliate, Weyerhaeuser Mortgage Company, GNMA and FNMA certificates which were used to collateralize the Bonds. The purchases were at par value, less the purchase discounts. The purchases were financed with the proceeds received from the Bond issuances and notes due to Weyerhaeuser Mortgage Company. The notes accrued interest at Bank of America's prime rate and compounded interest annually. Both the principal and interest related to the Weyerhaeuser Mortgage Company payables were paid off in March 1997, in anticipation of the sale of Weyerhaeuser Mortgage Company to an unrelated third party by Weyerhaeuser Financial Services, Inc. and Weyerhaeuser Company. In August 1997, Weyerhaeuser Financial Services, Inc. (Beneficial Owner) contributed capital to Trusts F, increasing Beneficial Owner's interest. - 42 -
Mortgage Securities III Trust A Schedule XIII - Other Security Investments December 28, 1997 (Dollar amounts in thousands) Number of Certificates Market Type of Security Held Cost Value ------------ ----------- ---------- Government National Mortgage Association Certificates - - - Federal National Mortgage Association Certificates - - - The GNMA and FNMA certificates held in the trust were sold to a third party in October 1997. The proceeds were used to pay off the related bond obligation.
- 43 -
Mortgage Securities III Trust B Schedule XIII - Other Security Investments December 28, 1997 (Dollar amounts in thousands) Number of Certificates Market Type of Security Held Cost Value ------------ ----------- ---------- Government National Mortgage Association Certificates 33 $12,648 $13,325 Federal National Mortgage Association Certificates 25 2,023 2,146 ------------ ----------- ---------- 58 $14,671 $15,471 1. Cost represents the uncollected principal balance of the mortgage loans underlying the certificates. Investments are grouped and are carried at cost. 2. Market value is an estimate based on the most current information available.
- 44 -
Mortgage Securities III Trust C Schedule XIII - Other Security Investments December 28, 1997 (Dollar amounts in thousands) Number of Certificates Market Type of Security Held Cost Value ------------ ----------- ---------- Government National Mortgage Association Certificates 25 $ 8,712 $ 9,147 Federal National Mortgage Association Certificates 25 3,526 3,745 ------------ ----------- ---------- 50 $12,238 $12,892 1. Cost represents the uncollected principal balance of the mortgage loans underlying the certificates. Investments are grouped and are carried at cost. 2. Market value is an estimate based on the most current information available.
- 45 -
Mortgage Securities III Trust D Schedule XIII - Other Security Investments December 28, 1997 (Dollar amounts in thousands) Number of Certificates Market Type of Security Held Cost Value ------------ ----------- ---------- Government National Mortgage Association Certificates 23 $11,126 $11,667 Federal National Mortgage Association Certificates 14 1,571 1,662 ------------ ----------- ---------- 37 $12,697 $13,329 1. Cost represents the uncollected principal balance of the mortgage loans underlying the certificates. Investments are grouped and are carried at cost. 2. Market value is an estimate based on the most current information available.
- 46 -
Mortgage Securities III Trust E Schedule XIII - Other Security Investments December 28, 1997 (Dollar amounts in thousands) Number of Certificates Market Type of Security Held Cost Value ------------ ----------- ---------- Government National Mortgage Association Certificates 75 $42,071 $43,588 1. Cost represents the uncollected principal balance of the mortgage loans underlying the certificates. Investments are grouped and are carried at cost. 2. Market value is an estimate based on the most current information available.
- 47 -
Mortgage Securities III Trust F Schedule XIII - Other Security Investments December 28, 1997 (Dollar amounts in thousands) Number of Certificates Market Type of Security Held Cost Value ------------ ----------- ---------- Government National Mortgage Association Certificates - - - Federal National Mortgage Association Certificates - - - The GNMA and FNMA certificates held in the trust were sold to a third party in October 1997. The proceeds were used to pay off the related bond obligation.
- 48 - INDEX TO EXHIBITS Exhibit Number Description of Exhibits Page 3(a) Certificate of Incorporation of the Mortgage Securities III Corporation (incorporated by reference to Exhibit 3(a) to Registration Statement on Form S-11 dated December 18, 1985). * 3(b) Bylaws of Mortgage Securities III Corporation (incorporated by reference to Exhibit 3(b) to Registration Statement on Form S-11 dated December 18, 1985). * 4(a) Form of Indenture dated June 1, 1986 between the Trust and Texas Commerce Bank National Association, as trustee, relating to GNMA and FNMA Collateralized Mortgage Obligations (incorporated by reference to Exhibit 4(a) to Registration Statement on Form S-11 dated December 18, 1985). * 4(a) Form of Supplemental Indenture dated as of June 1, 1986 (incorporated by reference to Exhibit 4(a) to Registration Statement on Form S-11 dated July 11, 1986). * *Incorporated by reference. EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
CT 1,000 12-MOS DEC-28-1997 DEC-28-1997 90,389 0 0 0 12,552 90,389 10,397 0 0 0 0 0 (3,132) 0 0
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