Attached files
UNITED STATES
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, 2012 | 001-16727 |
MERRILL LYNCH DEPOSITOR, INC.
(ON BEHALF OF PREFERREDPLUS TRUST SERIES QWS-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) |
Registrant’s telephone number, including area code: (646) 855-6745
Securities registered pursuant to Section 12(b) of the Act:
PreferredPLUS Trust Certificates Series QWS-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 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 registrant’s most recently completed second
fiscal quarter.
Not Applicable.
Indicate the number of shares outstanding for each of the registrant’s classes
of common stock, as of the latest practicable date.
Not Applicable.
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
PART I
ITEM 1. BUSINESS
For information with respect to the underlying securities held by
PreferredPLUS Trust Series QWS-1, please refer to Qwest
Communications International Inc.’s (Commission file number
001-15577) 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 SEC’s 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 SEC’s website on
the Internet at http://www.sec.gov, which contains reports, proxy
and information statements and other information that the
underlying securities guarantor and the underlying securities
issuer has filed electronically with the SEC.
Although we have no reason to believe the information
concerning the guarantee and underlying securities or the
underlying securities guarantor and the underlying securities
issuer contained in the underlying securities guarantor’s
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 guarantor and underlying securities
issuer (including, without limitation, no investigation as to
their respective financial condition or creditworthiness) or of
the underlying securities and guarantee has been made. You
should obtain and evaluate the same information concerning the
underlying securities issuer and the underlying securities
guarantor 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 or the
underlying securities guarantor. There can be no assurance that
events affecting the underlying securities and guarantee or the
underlying securities issuer and underlying securities
guarantor 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 guarantor 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 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.
3
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 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 guarantor 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 trustee’s 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 AND THE UNDERLYING SECURITIES
GUARANTOR
The trust certificates represent interests in obligations of
the underlying securities issuer and the underlying securities
guarantor. In particular, the trust certificates will be
subject to all the risks associated with directly investing in
both the underlying securities issuer’s and the underlying
securities guarantor’s 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 or the underlying
securities guarantor.
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 equally with all other unsecured and
unsubordinated 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.
4
THE RIGHTS OF THE TRUST CERTIFICATEHOLDERS THROUGH THE
GUARANTEE TO PARTICIPATE IN ANY DISTRIBUTION OF ASSETS OF A
SUBSIDIARY OF THE UNDERLYING SECURITIES GUARANTOR COULD BE
FOUND TO BE SUBORDINATE TO THE PRIOR CLAIMS OF THE CREDITORS OF
SUCH SUBSIDIARY
The underlying guarantee is an unsecured obligation of the
underlying securities guarantor and ranks equally with all
other unsecured and unsubordinated indebtedness of the
underlying securities guarantor. However, because the
underlying securities guarantor is a holding company that
conducts substantially all of its operations through
subsidiaries, the right of the underlying securities guarantor,
and hence the right of creditors of the underlying securities
guarantor (including holders of the underlying securities
through the guarantee), to participate in any distribution of
assets of any subsidiary upon its liquidation or reorganization
or otherwise is necessarily subject to the prior claims of
creditors of such subsidiary, except to the extent that claims
of the underlying securities guarantor itself as a creditor of
the subsidiary may be recognized.
THE RATINGS OF THE TRUST CERTIFICATES MAY CHANGE
At the time of issuance, Moody’s 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 initial 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.
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ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The Trust Certificates issued by PreferredPLUS Trust Series
QWS-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.
ITEM 7. MANAGEMENT’S 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.
6
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. |
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
7
The following exhibits are filed as part of, and incorporated
by reference into, this Annual Report on Form 10-K:
31.1. | Certification the of Vice President of Registrant dated March 25, 2013, 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 Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012. | ||
99.1. | Trustee’s Annual Compliance Certificate dated February 25, 2013. | ||
99.2. | Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, dated March 22, 2013, Registrant’s Assertion on Compliance with PPLUS Minimum Servicing Standards dated March 22, 2013 and PPLUS Minimum Servicing Standards. | ||
99.3. | Report of KPMG LLP, Independent Registered Public Accounting Firm, dated February 13, 2013, The Bank of New York Mellon’s Assertion on Compliance with PPLUS Minimum Servicing Standards dated February 13, 2013 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 26, 2013 | By: | /s/ John Marciano | ||
Name: | John Marciano | |||
Title: | Vice President |