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
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For the fiscal year ended:
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Commission file number:
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December 31, 2008
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001-32364
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MERRILL LYNCH DEPOSITOR, INC.
(ON BEHALF OF PPLUS TRUST SERIES GSC-3)
(Exact name of registrant as specified in its charter)
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DELAWARE
(State or other jurisdiction
of incorporation)
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13-3891329
(I. R. S. Employer
Identification No.)
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WORLD FINANCIAL CENTER,
NEW YORK, NEW YORK
(Address of principal
executive offices)
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10080
(Zip Code)
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Registrants telephone number, including area code: (212) 449-1000
Securities registered pursuant to Section 12(b) of the Act:
PPLUS Trust Certificates Series GSC-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 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.
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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. (Check one):
Large
accelerated filer
o
Accelerated filer
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Non-accelerated filer
þ
Smaller reporting filer
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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 GSC-3, please refer to The Goldman Sachs
Group, Inc.s (Commission file number 001-14965) 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 guarantor and the underlying securities
issuer have filed electronically with the SEC.
Although we have no reason to believe the information
concerning the underlying securities and the junior
subordinated debentures or the underlying securities guarantor
and the underlying securities issuer contained in the
underlying securities guarantors 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 the junior subordinated debentures 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 the junior
subordinated debentures 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 THE MATURITY
DATE OF THE UNDERLYING SECURITIES OR IF ANY CALL WARRANTS ARE
EXERCISED PRIOR TO THE STATED MATURITY DATE, 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:
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the purchase price of trust certificates,
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when you acquire your trust certificates,
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whether the underlying securities issuer exercises its
option to redeem the underlying securities, and
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whether the call warrant holders exercise their optional
rights to purchase outstanding trust certificates.
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The underlying securities issuer has the right to redeem the
underlying securities in whole or in part at its option or in
part if it becomes obligated to pay additional amounts. 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 the
maturity date of the underlying securities.
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.
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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 and the underlying securities guarantee.
If the underlying securities and the underlying securities
guarantee 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, those
subsidiary companies conduct substantially all of the
underlying securities issuers business and results in three
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 or
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 guarantor may have as a creditor of the
subsidiary are recognized, and
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the underlying securities guarantors 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.
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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 GUARANTOR CEASES FILING EXCHANGE ACT REPORTS
If the underlying securities issuer defaults on its obligations
under the underlying securities or the underlying securities
guarantor ceases to file Exchange Act reports or ceases to
satisfy the requirements of Rule 3-10 of Regulation S-X under
the Securities Act, 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:
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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 present
value or stated amount (if applicable) of the trust
certificates; and
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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.
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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 or the
underlying securities guarantor. 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,
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there is another type of default that accelerates the
maturity of the underlying securities, or
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the underlying securities guarantor ceases to file Exchange
Act reports or ceases to satisfy the requirements of Rule
3-10 of Regulation S-X under the Securities Act.
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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 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 underlying securities issuers and the underlying
securities guarantors unsecured subordinated debt obligations.
None of the underlying indenture, the underlying securities or
the underlying securities guarantee places a limitation on the
amount of indebtedness that may be incurred by the underlying
securities issuer or underlying securities guarantor.
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THE TRUSTS RIGHT TO DIRECT ACTION AGAINST THE UNDERLYING
SECURITIES GUARANTOR TO ENFORCE THE RIGHTS OF THE UNDERLYING
SECURITIESHOLDERS IS LIMITED
If a debenture event of default occurs and is continuing, then
the holders of the underlying securities would rely on, and in
certain circumstances could cause, the trustee of the
underlying securities issuer to enforce its rights as a holder
of the underlying securities and the underlying securities
guarantee on behalf of the underlying securities issuer against
the underlying securities guarantor. In addition, any
registered holder of underlying securities may institute a
legal proceeding directly against the underlying securities
guarantor to enforce its rights against the underlying
securities guarantor without first instituting any legal
proceeding against the underlying securities trustee or any
other person or entity.
THE UNDERLYING SECURITIES GUARANTOR HAS THE ABILITY TO DEFER
INTEREST PAYMENTS ON THE UNDERLYING SECURITIES
The underlying securities guarantor can, on one or more
occasions, defer interest payments on the underlying securities
for up to 10 consecutive semiannual interest periods, but not
beyond the maturity date of the underlying securities. If the
underlying securities guarantor defers interest payments on the
underlying securities, the underlying securities issuer will
defer distributions on the underlying securities. If the
underlying securities issuer defers distributions on the
underlying securities, the trust will defer distributions on
the trust certificates during any deferral period. No
additional amounts will accrue on the trust certificates or be
owed to trust certificateholders as a result of any delay, but
any additional amounts owed and paid by the underlying
securities issuer as a result of the delay will be paid to the
trust certificateholders. Prior to the termination of any
deferral period, the underlying securities guarantor may
further extend the deferment, but the total of all deferral
periods must not exceed 10 consecutive semiannual interest
periods or extend beyond the maturity date. Upon the
termination of any deferral period and the payment of all
amounts then due, the underlying securities guarantor may
commence a new deferral period, subject to the above
requirements.
Because the underlying securities guarantor has the right to
defer interest payments, the market price of the underlying
securities (which represent an undivided beneficial interest in
the underlying securities) may be more volatile than other
similar securities where the issuer does not have the right to
defer interest payments.
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IF THE UNDERLYING SECURITIES GUARANTOR EXERCISES ITS OPTION TO
DEFER INTEREST PAYMENTS ON THE UNDERLYING SECURITIES, THE TRUST
CERTIFICATEHOLDERS MAY FACE ADVERSE TAX CONSEQUENCES
Should the underlying securities guarantor exercise its right
to defer any payment of interest on the underlying securities,
each underlying securities holder will be required to accrue
interest income (as original issue discount) in respect of the
deferred stated interest allocable to its share of the
underlying securities for United States federal income tax
purposes. As a result, a trust certificateholder, as a
beneficial owner of the underlying securities, would have to
include this amount in gross income for United States federal
income tax purposes prior to the receipt of any cash
distributions. In addition, the trust certificateholder would
not receive cash from the underlying security issuer related to
this income if the trust certificateholder disposes of the
trust certificates prior to the record date on which
distributions of these amounts are made. To the extent the
selling price is less than the trust certificateholders
adjusted tax basis (which will include, in the form of original
issue discount, all accrued but unpaid interest), the trust
certificateholder will recognize a capital loss. Subject to
limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes.
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 rank equally with all other unsecured and
unsubordinated indebtedness of the underlying securities
issuer.
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.
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.
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Item 1B. UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 2. PROPERTIES
None.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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 GSC-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.
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.
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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
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(a)
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Securities Authorized For Issuance Under Equity
Compensation Plans: None.
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(b)
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Security Ownership Of Certain Beneficial Owners: None.
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(c)
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Security Ownership Of Management: Not Applicable.
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(d)
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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.
9
The following exhibits are filed as part of, and incorporated
by reference into, this Annual Report on Form 10-K:
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31.1.
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Certification of Vice President of Registrant
dated March 27, 2009, 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, 2008.
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99.1.
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Trustees Annual Compliance Certificate
dated March 6, 2009.
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99.2.
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Report of Deloitte & Touche LLP,
Independent Registered Public Accounting
Firm, dated March 23, 2009, Registrants
Assertion on Compliance with PPLUS
Minimum Servicing Standards dated March 23, 2009 and PPLUS Minimum Servicing
Standards.
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99.3.
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Report of Ernst & Young LLP, Independent
Registered Public Accounting Firm, dated
March 6, 2009, The Bank of New
York Mellons Assertion on Compliance with
PPLUS Minimum Servicing Standards
dated March 6, 2009 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.
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MERRILL LYNCH DEPOSITOR, INC.
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Date: March 27, 2009
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By:
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/s/ Steven ONeill
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Name:
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Steven ONeill
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Title:
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Vice President
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