on the Regular Securities (as described in "Yield, Maturity and Prepayment Considerations" in
this Supplement) is as follows:
Security Group
PSA
1
225%
2
175%
3
150%
4
150%
5
225%
6
251%
7
150%
8
150%
9
150%
10
150%
11
150%
12
150%
13
150%
In the case of the Floating Rate Classes, the constant value of LIBOR to be used for these
determinations is 1.10%. No representation is made, however, about the rate at which
prepayments on the Mortgage Loans underlying any Group of Trust Assets actually will occur or
the level of LIBOR at any time after the date of this Supplement. See "Certain Federal Income
Tax Consequences" in the Base Offering Circular.
The Regular Securities generally will be treated as "regular interests" in a REMIC for
domestic building and loan associations, "permitted assets" for financial asset securitization
investment trusts ("FASITs"), and "real estate assets" for real estate investment trusts
("REITs") as described in "Certain Federal Income Tax Consequences" in the Base Offering
Circular. Similarly, interest on the Regular Securities will be considered "interest on obliga-
tions secured by mortgages on real property" for REITs.
Residual Securities
The Class RR Securities will represent the beneficial ownership of the Residual Interest in
the Pooling REMIC and the beneficial ownership of the Residual Interest in the Issuing REMIC.
The Residual Securities, i.e., the Class RR Securities, generally will be treated as "residual
interests" in a REMIC for domestic building and loan associations and as "real estate assets" for
REITs, as described in "Certain Federal Income Tax Consequences" in the Base Offering
Circular, but will not be treated as debt for federal income tax purposes. Instead, the Holders of
the Residual Securities will be required to report, and will be taxed on, their pro rata shares of
the taxable income or loss of the Trust REMICs, and these requirements will continue until
there are no outstanding regular interests in the respective Trust REMICs. Thus, Residual
Holders will have taxable income attributable to the Residual Securities even though they will
not receive principal or interest distributions with respect to the Residual Securities, which
could result in a negative after-tax return for the Residual Holders. It is not expected that the
Pooling REMIC will have a substantial amount of taxable income or loss in any period.
However, even though the Holders of the Class RR Securities are not entitled to any stated
principal or interest payments on the Class RR Securities, the Issuing REMIC may have
substantial taxable income in certain periods, and offsetting tax losses may not occur until much
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