Attached files
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EX-99.3 - REPORT OF KPMG LLP - PPLUS Trust Series LMG-3 | e38124ex99_3.htm |
EX-99.1 - TRUSTEE'S ANNUAL COMPLIANCE CERTIFICATE - PPLUS Trust Series LMG-3 | e38124ex99_1.htm |
EX-31.1 - CERTIFICATION - PPLUS Trust Series LMG-3 | e38124ex31_1.htm |
EX-99.2 - REPORT OF PRICEWATERHOUSECOOPERS LLP - PPLUS Trust Series LMG-3 | e38124ex99_2.htm |
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
The Securities Exchange Act of 1934
For the fiscal year ended: | Commission file number: | |
December 31, 2009 | 001-32285 |
MERRILL LYNCH DEPOSITOR, INC.
(ON BEHALF OF PPLUS TRUST SERIES LMG-3)
(Exact name of registrant as specified in its charter)
DELAWARE (State or other jurisdiction of incorporation) |
13-3891329 (I. R. S. Employer Identification No.) |
ONE BRYANT PARK NEW YORK, NEW YORK (Address of principal executive offices) |
10036 (Zip Code) |
Registrants telephone number, including area code: (212) 449-1000
Securities registered pursuant to Section 12(b) of the Act:
PPLUS Trust Certificates Series LMG-3 listed on The New York Stock Exchange.
Securities registered pursuant to Section 12(g) of the Act:
Not Applicable.
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
Yes o No þ
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes o No þ
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 90 days.
Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes o No o
Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer or a smaller reporting company. See definitions
of large accelerated filer, accelerated filer and
smaller reporting company in Rule 12b-2 of the Exchange
Act.
Large
accelerated filer o Accelerated filer o Non-accelerated filer þ Smaller reporting filer o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No þ
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was last sold, or the average bid and asked price of such common equity,
as of the last business day of the registrants most recently completed second
fiscal quarter.
Not Applicable.
Indicate the number of shares outstanding for each of the registrants classes
of common stock, as of the latest practicable date.
Not Applicable.
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
DOCUMENTS INCORPORATED BY REFERENCE
None.
PART I
ITEM 1. BUSINESS
For information with respect to the underlying securities held
by PPLUS Trust Series LMG-3, please refer to Liberty Media
LLCs (Commission file number 001-16615) periodic reports,
including annual reports on Form 10-K, quarterly reports on
Form 10-Q and current reports on Form 8-K, and other
information on file with the Securities and Exchange Commission
(the SEC). You can read and copy these reports and other
information at the public reference facilities maintained by
the SEC at Room 1580, 100 F Street, N.E., Washington, D.C.
20549. You may obtain copies of this material for a fee by
writing to the SECs Public Reference Section of the SEC at 100
F Street, N.E., Washington, D.C. 20549. You may obtain
information about the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. You can also access some of
this information electronically by means of the SECs website
on the Internet at http://www.sec.gov, which contains reports,
proxy and information statements and other information that the
underlying securities issuer has filed electronically with the
SEC.
Although we have no reason to believe the information
concerning the underlying securities or the underlying
securities issuer contained in the underlying securities
issuers Exchange Act reports is not reliable, neither the
depositor nor the trustee participated in the preparation of
such documents or made any due diligence inquiry with respect
to the information provided therein. No investigation with
respect to the underlying securities issuer (including, without
limitation, no investigation as to its financial condition or
creditworthiness) or of the underlying securities has been
made. You should obtain and evaluate the same information
concerning the underlying securities issuer as you would obtain
and evaluate if your investment were directly in the underlying
securities or in other securities issued by the underlying
securities issuer. There can be no assurance that events
affecting the underlying securities or the underlying
securities issuer have not occurred or have not yet been
publicly disclosed which would affect the accuracy or
completeness of the publicly available documents described
above.
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ITEM 1A. RISK FACTORS
Your investment in the trust certificates will involve certain
risks. You should carefully consider the following discussion
of risks, and the other information included or incorporated by
reference in the applicable prospectus supplement and the
accompanying prospectus.
IF ANY CALL WARRANTS ARE EXERCISED PRIOR TO THE STATED MATURITY
DATE, YOU MAY NOT BE ABLE TO REINVEST YOUR CALL PROCEEDS AT A
YIELD COMPARABLE TO THE YIELD YOU WOULD HAVE RECEIVED ON YOUR
TRUST CERTIFICATES
The yield you will realize on your trust certificates depends
upon several factors, including
| the purchase price of the trust certificates, | ||
| when you acquire your trust certificates, and | ||
| whether the call warrant holders exercise their optional rights to purchase outstanding trust certificates. |
Although the call warrant holders are not obligated to exercise
the call warrants, the yield you will realize on your trust
certificates depends on whether the call warrant holders
exercise their call warrants to purchase the trust
certificates.
Prevailing interest rates at the time of a call exercise may be
lower than the yield on your trust certificates. Therefore, you
may be unable to realize a comparable yield upon reinvesting
the funds you receive from the exercise of any call warrants.
In addition, if the prevailing market value of the trust
certificates exceeds the call exercise price paid to you upon
the exercise of a call, you will not be able to realize such
excess.
YOU MAY NOT BE PAID IF THE ASSETS OF THE TRUST ARE INSUFFICIENT
Currently, the trust has no significant assets other than the
underlying securities. If the underlying securities are
insufficient to make payments or distributions on the trust
certificates, no other assets will be available for payment of
the deficiency. The underlying securities issuer is organized
as a holding company that owns subsidiary companies. According
to the underlying securities prospectus, the underlying
securities issuer derives its operating income and cash flow
primarily from its subsidiaries and investments which poses two
principal risks:
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| The underlying securities issuers right to participate as an equity holder in any distribution of assets of any of its subsidiaries upon the subsidiarys liquidation of otherwise, and thus the ability of its security holders, including the trust, to benefit from the distribution, will be subject to prior claims of the subsidiarys creditors, except to the extent that any claims the underlying securities issuer may have as a creditor of the subsidiary are recognized, and | ||
| The underlying securities issuers ability to service its indebtedness and other obligations is dependent primarily upon the earnings and cash flow of its subsidiaries and the distribution or other payment to it of such earnings and cash flow. |
YOU MAY NOT RECOVER THE WHOLE OF THE PRESENT VALUE OR STATED
AMOUNT (IF APPLICABLE) OF YOUR TRUST CERTIFICATES IF THE TRUST
DISPOSES OF THE UNDERLYING SECURITIES ON A DEFAULT BY THE
UNDERLYING SECURITIES ISSUER OR IN THE EVENT THE UNDERLYING
SECURITIES ISSUER CEASES FILING EXCHANGE ACT REPORTS
If the underlying securities issuer defaults on its obligations
under the underlying securities or the underlying securities
issuer ceases to file Exchange Act reports, then the trust will
either distribute the underlying securities to the trust
certificateholders or dispose of them and distribute the
proceeds to the trust certificateholders. Your recovery in
either of those events may be limited by two factors:
| if a default occurs, the market value of the underlying securities may be adversely affected and the proceeds of their disposition may be lower than the aggregate or present value or stated amount (if applicable) of the trust certificates; and | ||
| in either event, any distribution of funds or underlying securities by the trust to the trust certificateholders will be done in accordance with the allocation ratio as described in the applicable prospectus supplement relating to the trust certificates. The funds or aggregate principal amount of underlying securities you receive on that distribution may be less than the present value or stated amount (if applicable) of your trust certificates. |
THE TRUSTEE WILL NOT MANAGE THE UNDERLYING SECURITIES
Except as described below, the trust will not dispose of any
underlying securities, even if an event occurs that adversely
affects the value of the underlying securities or that
adversely affects the underlying securities issuer. As provided
in the applicable trust agreement, the trust will dispose of
the underlying securities only if
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| there is a payment default on any underlying securities, | ||
| there is another type of default that accelerates the maturity of the underlying securities, or | ||
| the underlying securities issuer ceases to file Exchange Act reports. |
Under the first circumstance listed above, the trustee must
sell the underlying securities on behalf of the trust, even if
adverse market conditions exist. The trustee has no discretion
to do otherwise. If adverse market conditions do exist at the
time of the trustees sale of the underlying securities, you
may incur greater losses than if the trust continued to hold
the underlying securities.
THE TRUST CERTIFICATES ARE SUBJECT TO THE CREDITWORTHINESS OF
THE UNDERLYING SECURITIES ISSUER
The trust certificates represent interests in obligations of
the underlying securities issuer. In particular, the trust
certificates will be subject to all the risks associated with
directly investing in the underlying securities issuers
unsecured unsubordinated debt obligations. Neither the
underlying indenture nor the underlying securities place a
limitation on the amount of indebtedness that may be incurred
by the underlying securities issuer.
THE PAYMENTS OWED TO THE TRUST CERTIFICATEHOLDERS ARE UNSECURED
OBLIGATIONS
In a liquidation, holders of the underlying securities,
including the trust, will be paid only after holders of secured
obligations of the underlying securities issuer. According to
the underlying securities prospectus, the underlying securities
are general unsecured obligations of the underlying securities
issuer, which rank on a parity with all other unsecured senior
indebtedness of the underlying securities issuer. However, if
the underlying securities issuer subjects any of its property
to a lien then the underlying securities, and any other
obligations which are then outstanding and subject to a similar
covenant, will be secured ratably with the indebtedness or
obligation secured by that lien and for the same length of
time, subject to certain exceptions.
THE RATINGS OF THE TRUST CERTIFICATES MAY CHANGE
At the time of issuance, Moodys and S&P assigned ratings to
the trust certificates equivalent to the ratings of the
underlying securities, as of the date of the applicable
prospectus supplement.
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Any rating issued with respect to the trust certificates is not
a recommendation to purchase, sell or hold a security. Ratings
do not comment on the market price of the trust certificates or
their suitability for a particular investor. We cannot assure
you that these ratings will remain for any given period of time
or that a ratings agency would not revise or withdraw entirely
the ratings if, in its judgment, circumstances (including,
without limitation, the rating of the underlying securities)
merit. A revision or withdrawal of a rating may adversely
affect the market price of the trust certificates.
If the underlying securities issuers credit rating is
downgraded, your trust certificates may become less liquid and
subject to increased price volatility. If the underlying
securities were downgraded, the trust certificates would be
similarly downgraded. The market value of the underlying
securities would be expected to decrease in the event of a
downgrade. As a result, a downgrade could result in the market
price of the trust certificates becoming increasingly volatile
as the value of the underlying security changes. Also, if the
trust certificates are downgraded to below investment grade
status, and enter what is commonly called junk status, the
trust certificates could become less liquid.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 2. PROPERTIES
None.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. (REMOVED
AND RESERVED)
PART II
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The Trust Certificates issued by PPLUS Trust Series LMG-3 are
represented by one or more physical certificates registered in
the name of Cede & Co., the nominee of the Depository Trust
Company. The Trust Certificates are listed on the New York
Stock
Exchange.
ITEM 6. SELECTED FINANCIAL DATA
Not Applicable.
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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Not Applicable.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not Applicable.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
The Registrant has procedures so as to provide reasonable
assurance that its future Exchange Act filings will be filed
within the applicable time periods.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Not Applicable.
ITEM 11. EXECUTIVE COMPENSATION
Not Applicable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
(a) | Securities Authorized For Issuance Under Equity Compensation Plans: None. | ||
(b) | Security Ownership Of Certain Beneficial Owners: None. | ||
(c) | Security Ownership Of Management: Not Applicable. | ||
(d) | Changes In Control: None. |
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
None.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Not Applicable.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements: Not Applicable.
(a)(2) Financial Statement Schedules: Not Applicable.
(a)(3) List of Exhibits
The following exhibits are filed as part of, and incorporated
by reference into, this Annual Report on Form 10-K:
31.1. | Certification of the Vice President of Registrant dated March 22, 2010, pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the Registrants Annual Report on Form 10-K for the year ended December 31, 2009. | ||
99.1. | Trustees Annual Compliance Certificate dated March 9, 2010. | ||
99.2. | Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, dated March 22, 2010, Registrants Assertion on Compliance with PPLUS Minimum Servicing Standards dated March 22, 2010 and PPLUS Minimum Servicing Standards. | ||
99.3. | Report of KPMG LLP, Independent Registered Public Accounting Firm, dated March 9, 2010, The Bank of New York Mellons Assertion on Compliance with PPLUS Minimum Servicing Standards dated March 9, 2010 and PPLUS Minimum Servicing Standards. |
(b) Exhibits
The Registrant hereby files as part of this Annual Report
on Form 10-K the exhibits listed in Item 15(a)(3) set forth
above.
(c) Financial Statement Schedules
Not Applicable.
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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, hereunto duly authorized.
MERRILL LYNCH DEPOSITOR, INC. |
||||
Date: March 22, 2010 | By: | /s/ John Marciano | ||
Name: | John Marciano | |||
Title: |
Vice President |
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