Attached files
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, 2011 | 001-31488 |
MERRILL LYNCH DEPOSITOR, INC.
(ON BEHALF OF PREFERREDPLUS TRUST SERIES FAR-1)
(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, 4th FL STRUCTURED CREDIT TRADING NEW YORK, NEW YORK (Address of principal executive offices) |
10036 (Zip Code) |
Registrants telephone number, including area code: (646) 855-6745
Securities registered pursuant to Section 12(b) of the Act:
PreferredPLUS Trust Certificates Series FAR-1, 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 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 PreferredPLUS Trust Series FAR-1,
please refer to The First American Corporations
(Commission file number 001-13585) 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, NE, 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, NE, 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. You should also carefully
consider any risk factors and other information that
the underlying securities issuer may file in its
Exchange Act reports as referenced in Item 1 above.
IF THE UNDERLYING SECURITIES ARE REDEEMED PRIOR TO
THEIR MATURITY DATE OR IF ANY CALL WARRANTS ARE
EXERCISED, YOU MAY NOT BE ABLE TO REINVEST YOUR
REDEMPTION OR 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, | ||
| whether the underlying securities issuer exercises its option to redeem the underlying securities, and | ||
| whether the call warrant holders exercise their optional rights to purchase outstanding trust certificates. |
The underlying securities issuer has the right to
redeem the underlying securities at its option.
Because the underlying securities issuer has the
right to redeem the underlying securities early, we
cannot assure you that the trust will be able to hold
the underlying securities until their maturity date.
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 an early
redemption or 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 an early
redemption or exercise of any call warrants. In
addition, if the prevailing market value of the trust
certificates exceeds the redemption price or call
exercise price paid to you upon a redemption of the
underlying securities or the exercise of a call, you
will not be able to realize such excess. As well,
though holders of trust certificates are entitled to
receive a distribution of a proportionate amount of
the principal amount of the underlying securities on
December 15, 2028, if that amount exceeds the call
exercise price, then the call warrant holders are
likely to exercise their optional purchase rights. If
they do exercise those rights, you will receive the
call exercise price, not a proportional amount of the
principal amount on the underlying securities.
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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. As a holding company, the underlying
securities issuers assets consist primarily of
equity in its subsidiaries. As a result, the ability
of the underlying securities issuer to make payments
on the underlying securities depends upon its receipt
of dividends, loan payments and other funds from its
subsidiaries. In addition, if any of the underlying
securities issuers subsidiaries becomes insolvent,
the direct creditors of that subsidiary will have a
prior claim on its assets, and the rights of the
underlying securities issuer and the rights of the
underlying securities issuers creditors, including
the trusts rights as a holder of the underlying
securities, will be subject to that prior claim,
unless the underlying securities issuer is also a
direct creditor of that subsidiary. In addition,
various statutes and regulations restrict some of the
underlying securities issuers subsidiaries from
paying dividends or making loans or advances to the
underlying securities issuer. These restrictions
could prevent those subsidiaries from paying the cash
to the underlying securities issuer that the
underlying securities issuer may need in order to pay
the trust.
YOU MAY NOT RECOVER THE WHOLE OF THE STATED AMOUNT 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 stated amount of the trust certificates; and |
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| The funds or aggregate principal amount of underlying securities you receive on that distribution may be less than the stated amount 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:
| 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
subordinated 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 unsecured and will rank pari passu
with all other unsecured and unsubordinated debt of
the underlying securities issuer. However, the
underlying indenture provides that, subject to
certain exceptions, the underlying securities issuer
will not create, assume, incur or suffer to exist any
lien (with certain exceptions), on the capital stock
of any restricted subsidiary now owned by or acquired
by it, unless the underlying securities issuer shall
cause the underlying securities to be secured equally
and ratably with (or, at the underlying securities
issuers option, prior to) any indebtedness secured
thereby.
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THE RATINGS OF THE TRUST CERTIFICATES MAY CHANGE
At the time of issuance, Moodys and/or 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.
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.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 2. PROPERTIES
None.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
PART II
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
The Trust Certificates issued by PreferredPLUS Trust
Series FAR-1 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.
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ITEM 6. SELECTED FINANCIAL DATA
Not Applicable.
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.
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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. |
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 9, 2012, 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, 2011. | ||
99.1. | Trustees Annual Compliance Certificate dated March 5, 2012. | ||
99.2. | Report of PricewaterhouseCoopers LLPP, Independent Registered Public Accounting Firm, dated March 6, 2012, Registrants Assertion on Compliance with PPLUS Minimum Servicing Standards dated March 6, 2012 and PPLUS Minimum Servicing Standards. |
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99.3. | Report of KPMG LLP, Independent Registered Public Accounting Firm, dated February 24, 2012, The Bank of New York Mellons Assertion on Compliance with PPLUS Minimum Servicing Standards dated February 24, 2012 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 9, 2012 | By: | /s/ John Marciano | ||
Name: | John Marciano | |||
Title: | Vice President |