Item 1. Business
Not Applicable .
Item 2.
Item 2. Properties .
See list of assets set forth in Exhibit A.
Item 3.
Item 3. Legal Proceedings.
None
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
None
PART II
Item 5.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters .
(a) Market Information .
Certificates are not traded on any market or exchange.
(b) Holders .
The number of registered holders for Zero Coupon Certificates, Class M-1 on December 31, 1997 was 10.
(c) Dividends .
$2,674,000.00 distributed to holders for Zero Coupon Certificates, Class M-1on May 15, 1997.
$2,582,000.00 distributed to holders for Zero Coupon Certificates, Class M-1 on November 17, 1997.
Item 6.
Item 6. Selected Financial Data
Not Applicable.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations .
Not Applicable.
Item 8.
Item 8. Financial Statements and Supplementary Data.
Not Applicable .
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not Applicable.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant.
Not Applicable.
Item 11.
Item 11. Executive Compensation .
Not Applicable.
Item 12
Item 12 . Security Ownership of Certain Beneficial Owners and Management
(a) Security ownership of certain beneficial owners. _____________________________________________________________________________
(1) Title of (2) Name and (3) Amount and (4) Percent Class address nature of of class of benefi- Beneficial cial owner ownership ______________________________________________________________________________
Zero Coupon Cede & Co. $ 9,355,000 99.54% Certificates, P.O. Box 20 Class M-1 Bowling Green Station New York, NY 10004 _______________________________________________________________________________
(b) Security ownership of management
Not Applicable.
(c) Changes in control.
Not Applicable.
Item 13.
Item 13. Certain Relationships and Related Transactions.
(a) Transactions with management and others.
Not Applicable.
(b) Certain business relationships.
Not Applicable .
(c) Indebtedness of management .
Not Applicable .
(d) Transactions with promoters.
Not Applicable .
PART IV
Item 14.
Item 14. Exhibits, Financial Schedules, Reports on Form 8-K.
(a) The following is a list of documents filed as part of this report :
Exhibit Document A List of Assets held by Trust on December 31, 1997
B Semiannual Report as of May 15, 1997
C Semiannual Report as of November 17, 1997
D Annual Report as of December 31, 1997
(b) Not applicable
(c) Not applicable
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Government Trust M-1 (Registrant)
By : ______Dennis Kildea________ Assistant Vice President
Date : March 31, 1998 .
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By : ______Marcus Gustafson__________________ Vice President
Date : March 31, 1998
By : ______Dennis Kildea________ Assistant Vice President
Date : March 31, 1998 .
Exhibit A
GOVERNMENT TRUST M-1
U. S. Government Securities
Maturity Par Amount Coupon
May 15, 1998 249,000 0.0000 November 15, 1998 240,000 0.0000 May 15, 1999 230,000 0.0000 November 15, 1999 221,000 0.0000
The Kingdom of Morocco M-1 Notes
Principal Amount Rate of Outstanding Interest Due Date
$ 8,468,437.01 8.79730% November 15, 1999
Exhibit B
THE CHASE MANHATTAN BANK 450 West 33rd Street New York , New York 10001
Trustee's Semiannual Report
To the Holders of
Government Trust M-1 Zero Coupon Certificates ( Moroccan FMS Refinancing )
and
Defense Security Assistance Agency The Pentagon Washington , DC 20301-2800 Attention of the Comptroller, DSAA
i. On May 15, 1997, the Certificate Payment Date, the aggregate amount distributed to the Holders was $2,674,000.00. The portion thereof allocable to the principal and interest payments on the Related Note was $2,406,000.00 and to payments from the Securities Trust was $268,000.00.
ii. The aggregate Initial Amount of the Certificates issued by such Trust and
remaining outstanding after such distribution is $11,980,000.00.
iii. The unpaid principal amount of the Related Note(s) following such distribution is $ 10,585,546.27.
iv. The sum of the amount referred to in (i) above, plus the amount paid to the Trustee in respect of the Trustee's fees and expenses was not less than the sum of ninety percent (90%) of the amount required to have been paid by
the Borrower on the Related Note(s) on the immediately preceding Note Payment Date plus the payment received by the Trustee from the related Securities Trust on the Certificate Payment Date.
No Payment Default has occurred and is continuing since our previous report.
To the best of my knowledge and belief, this Semiannual Report is complete and accurate.
By: __________________
Dennis Kildea Trust Officer
Report dated as of May 15, 1997 (Tax ID No. 13-6938177)
Exhibit C
THE CHASE MANHATTAN BANK 450 West 33rd Street New York , New York 10001
Trustee's Semiannual Report
To the Holders of: Government Trust M-1 Zero Coupon Certificates ( Moroccan FMS Refinancing )
and
Defense Security Assistance Agency The Pentagon Washington , DC 20301-2800 Attention of the Comptroller, DSAA
i. On November 17, 1997, the Certificate Payment Date, the aggregate amount distributed to the Holders was $2,582,000.00. The portions thereof allocable to the principal and interest payments on the Related Note was $2,324,000.00 and to payments from the Securities Trust was $258,000.00.
ii. The aggregate Initial Amount of the Certificates issued by such Trust
and remaining outstanding after such distribution is $9,398,000.00.
iii. The unpaid principal amount of the Related Note following such distribution is $8,468,437.01.
iv. The sum of the amount referred to in (i) above, plus the amount paid to the Trustee in respect of the Trustee's fees and expenses was not less than the sum of ninety percent (90%) of the amount required to have been paid by
the Borrower on the Related Note(s) on the immediately preceding Note Payment Date plus the payment received by the Trustee from the related Securities Trust in respect of such Certificate Payment Date.
No Payment Default has occurred and is continuing since our previous report.
To the best of my knowledge and belief, this Semiannual Report is complete and accurate.
All capitalized terms used herein have the meanings assigned to them in the Declaration of Trust dated as of October 15, 1989.
By: __________________ Dennis Kildea Trust Officer
Report dated as of November 17, 1997 (Tax ID No. 13-6938177)
Exhibit D
THE CHASE MANHATTAN BANK 450 West 33rd Street New York, New York 10001 Trustee's Annual Report
To the holders of: - - Government Trust M-1 Zero Coupon Certificates, Class M-1 (Kingdom of Morocco FMS Refinancing) - - Defense Security Assistance Agency The Pentagon Washington, D.C. 20301-2800 Attention of the Comptroller , DSAA
i. During the year ending December 31, 1997, $5,256,000.00 was distributed to the holders of the Zero Coupon Certificates and this amount is allocable as follows:
a. 90% from interest and principal payments made on the Kingdom of Morocco Promissory Note on May 1, 1997 and November 3, 1997. b. 10% from the proceeds of maturities of United States Treasury Strips due May 15, 1997 and November 17, 1997.
ii. The aggregate Initial Amount of the Certificates issued by such Trust and remaining outstanding after such distributions is $9,398,000.00.
iii. The unpaid principal amount of the Kingdom of Morocco Promissory Note following the May 15, 1997 and November 17, 1997 distributions
is $8,468,437.01.
iv. The sum of the amount referred to in (i), above, plus the amount paid to the Trustee in respect of the Trustee's fees and expenses was not less than the sum of ninety percent (90%) of the amount required to have been paid by the Borrower on the Related Note(s) on the immediately preceding Note Payment Dates plus the payment received by the Trustee from the Related Securities Trust in respect of such Certificate Payment Dates.
Please be advised that no Payment Default has occurred and is continuing with respect to the May 15, 1997 and November 17, 1997 Certificate Payment Dates.
There have been no payments under the Guaranty with respect to the May 1, 1997 and November 3, 1997 Note Payment Dates next preceding the May 15, 1997 and November 17, 1997 Certificate Payment Dates. To the best of my knowledge and belief, this Annual Report is complete and accurate. All capitalized terms used herein have the meanings assigned to them in the Declaration of Trust dated as of October 15, 1989.
By ___________________________ Dennis Kildea Assistant Vice President Report dated as of December 31, 1997 Tax I.D. No. 13-6938177
REPORT OF INDEPENDENT AUDITORS
The Chase Manhattan Bank, Trustee Government Trust M-1
We have audited the accompanying Distribution Report of Government Trust M-1 as of December 31, 1997 and for the year then ended. This schedule is the responsibility of the Trustee. Our responsibility is to express an opinion on this schedule based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Distribution Report is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Distribution Report. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall schedule presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the Distribution Report referred to above presents fairly, in all material respects, amounts distributed to certificate holders, the aggregate initial amount of certificates outstanding, the unpaid principal amount of the promissory note and funds compared with amounts distributed from Government Trust M-1 at December 31, 1997 and for the year then ended, in conformity with generally accepted accounting principles.
Ernst & Young LLP
March 5, 1998
DISTRIBUTION REPORT
GOVERNMENT TRUST M-1
As of and for the Year Ended December 31, 1997
I. During the year ended December 31, 1997, $5,256,000 was distributed to the Holders of the Zero Coupon Certificates and this amount is allocable as follows:
1. 90% from principal and interest payments made on the Kingdom Morocco Promissory Notes on May 1, 1997 and November 3, 1997.
2. 10% from the proceeds of maturities of United States Treasury Strips due May 15, 1997 and November 15, 1997.
II. The aggregate Initial Amount of Certificates issued by the Trust outstanding after the May 15, 1997 and November 17, 1997 distributions is $9,398,000.00.
III. The unpaid principal amount of the Kingdom of Morocco Promissory Notes following the May 15, 1997 and November 17, 1997 distributions is $8,468,437.01.
IV. The amount in (I) above, together with the Trustee's fees and expenses equals the sum of 90% of the amounts paid by Morocco on the Notes on May 1, 1997 and November 3, 1997 and the payments received by the Trustee from the Securities Trust on May 15, 1997 and November 17, 1997.
See notes to distribution report.
NOTES TO DISTRIBUTION REPORT
GOVERNMENT TRUST M-1
December 31, 1997
NOTE A--ORGANIZATION AND OPERATION
Government Trust M-1 (the Trust) was formed in November 1989 by The Chase Manhattan Bank (Successor to Chemical Bank), as Trustee, to issue Certificates (see Note B), the proceeds of which were used to loan funds evidenced by the Notes (see Note C) from the Kingdom of Morocco (Borrower) and to purchase a beneficial interest in a government securities trust (Securities Trust), for which The Chase Manhattan Bank also acts as Trustee. The Trust was created for the limited purpose of conducting transactions relating to the Certificates, the Note and the Securities Trust. All capitalized terms used in the Distribution Report are as defined in the Declaration of Trust dated as of October 15, 1989.
NOTE B--ZERO COUPON CERTIFICATES
The Trust issued Zero Coupon Certificates (the Certificates) with an aggregate principal amount of $208,003,000. Each Certificate represents an interest in specific payments of principal and/or interest on the assets of the Trust. The Holder of each of the Certificates is entitled to receive a single payment on the date indicated in such Certificate. The Trust is required to distribute to the Certificate holders all funds held by the Trust, which would consist of an amount equal to 90% of the principal and interest required to be paid by the Borrower on the Related Note (see Note C), any payments received with respect to the Guaranty (see Note C), and payments from the related Securities Trust, less amounts paid to the Trustee for periodic fees and expenses. The government securities held for the benefit of the Trust consist of U.S. Treasury Strips and are calculated to provide the Trust on or before each Certificate Payment Date with funds equal to at least 10% of the principal and/or interest payment due on the related Note on the next preceding Note Payment Date. The payments to the Holders of the Certificates in the next two years are as follows:
Maturity Date Aggregate Maturity of Series Amount of Series
May 15, 1998 2,489,000 November 15, 1998 2,396,000 May 15, 1999 2,303,000 November 15, 1999 2,210,000 __________ Total $9,398,000
NOTES TO DISTRIBUTION REPORT--Continued
GOVERNMENT TRUST M-1
NOTE C--PROMISSORY NOTES
One note, in the original principal amount of $116,365,281.46, with an interest rate of 8.79730% was paid in full as of November 15, 1995.
On the second note, in the original principal amount of $42,342,185.17, with an interest rate of 8.79730%, is payable by the Borrower semi-annually on each Note Payment Date, which is the tenth business day before a Certificate Payment Date (see Note B). Principal on this note is payable in installments for each of the next two years as follows:
Payment Date Amount
May 1998 2,117,109 November 1998 2,117,109 May 1999 2,117,109 November 1999 2,117,110 __________ Total $8,468,437
The Borrower is required to remit to the Trust 100% of the amounts of principal and interest due on the Note. However, to the extent that these payments from the Borrower and payments from the related Securities Trust, less the amounts paid to the Trustee for periodic fees and expenses, exceed the required Certificate Payment, the excess funds will be returned to the Borrower semi-annually. Should a draw be made on the Guaranty, any excess funds would be remitted to the Defense Security Assistance Agency of the Department of Defense.
The United States of America, acting through the Defense Security Assistance Agency of the Department of Defense, has guaranteed the punctual payment of 90% of all principal and interest due on the Notes.