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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 | 001-16569 |
MERRILL LYNCH DEPOSITOR, INC.
(ON BEHALF OF PREFERREDPLUS TRUST SERIES FRD-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 FRD-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 FRD-1,
please refer to Ford Motor Companys (Commission file
number 001-03950) 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 ANY CALL WARRANT HOLDER EXERCISES ITS OPTIONAL
CALL RIGHT, 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 also 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 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
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.
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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 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.
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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 FRD-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.
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 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 LLP, 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. | ||
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. |
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(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 | |||
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