Merrill Lynch Depositor Inc Indexplus Trust Series 2003-1 10-K, filed Mar 28, 2022
Merrill Lynch Depositor Inc Indexplus Trust Series 2003-1 (IPB)
About this 10-K
Merrill Lynch Depositor Inc Indexplus Trust Series 2003-1 filed this 10-K on March 28, 2022, covering the fiscal year ended December 31, 2021.
SECURITIES AND EXCHANGE COMMISSION
| ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
| ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
| For the fiscal year ended: | Commission file number: | |
| December 31, 2021 | 001-31941 |
| DELAWARE (State or other jurisdiction of incorporation) |
13-3891329 (I. R. S. Employer Identification No.) |
| ONE BRYANT PARK, 4th FL NEW YORK, NEW YORK (Address of principal executive offices) |
10036 (Zip Code) |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 4. MINE SAFETY DISCLOSURES
ITEM 6. SELECTED FINANCIAL DATA
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11. EXECUTIVE COMPENSATION
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
EX-99.1: TRUSTEE'S ANNUAL COMPLIANCE CERTIFICATE
EX-99.2: REPORT OF PRICEWATERHOUSECOOPERS LLP
2
| • | the purchase price of the trust certificates, | ||
| • | when you acquire your trust certificates, | ||
| • | whether an underlying securities issuer exercises an option to redeem underlying securities, and | ||
| • | whether the trust redeems the trust certificates prior to the final scheduled distribution date. |
3
| • | there is a credit event on an underlying security or an underlying securities issuer, | ||
| • | there is a non-payment-related default that accelerates the maturity of an underlying security, or | ||
| • | in the case of an underlying securities issuer that is obliged to file Exchange Act reports, the relevant underlying securities issuer ceases to file Exchange Act reports and the related underlying securities comprise 10% or more of the assets of the trust. |
4
5
6
7
| (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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| MERRILL LYNCH DEPOSITOR, INC. |
||||
| Date: March 28, 2022 | By: | /s/ Matthew J. Nelson | ||
| Name: | Matthew J. Nelson | |||
| Title: | President | |||
| Date: March 28, 2022 | /s/ Matthew J. Nelson | |||
| Matthew J. Nelson | ||||
| President | ||||
EXHIBIT 99.1
THE BANK OF NEW YORK MELLON
February 22, 2022
MERRILL LYNCH DEPOSITOR, INC.
One Bryant Park
4th Floor – Structured Credit Trading
New York, New York 10036
PREFERREDPLUS, PPLUS TRUST AND INDEXPLUS CERTIFICATE
The undersigned, Terrence White, Vice President of The Bank of New York Mellon (formerly The Bank of New York), a New York corporation (the “Trustee”), hereby certifies in such capacity that, based on his knowledge, the Trustee has complied, in all material respects, with all conditions and covenants applicable to the Trustee under the Standard Terms for Trust Agreements dated February 20, 1998 between MERRILL LYNCH DEPOSITOR, INC., as depositor (the “Depositor”) and the Trustee, as successor to United States Trust Company of New York, as trustee and securities intermediary (the “Securities Intermediary”), in each case amended as by a series supplement between the Depositor, the Trustee and the Securities Intermediary for each trust series listed in the attached schedule.
| Very truly yours, The Bank of New York Mellon (formerly The Bank of New York), as Trustee |
||||
| By: | /s/ | Terrence White | ||
| Name: | Terrence White | |||
| Title: | Vice President | |||
SCHEDULE
PPLUS Trust Series GSC-2
PreferredPLUS Trust Series CZN-1
INDEXPLUS Trust Series 2003-1
EXHIBIT 99.2
[PricewaterhouseCoopers Letterhead]
Report of Independent Accountants
To the Board of Directors and Management of Merrill Lynch Depositor, Inc.:
We have examined the accompanying management assertion of Merrill Lynch Depositor, Inc. (the “Company”), that the Company complied with the PPLUS Minimum Servicing Standards with respect to the INDEXPLUS Trust Series 2003-1 as set forth in Appendix I as of and for the year ended December 31, 2021. The Company’s management is responsible for its assertion. Our responsibility is to express an opinion on management's assertion about the Company’s compliance with the specified requirements based on our examination.
Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether management's assertion about compliance with the specified requirements is fairly stated, in all material respects. An examination involves performing procedures to obtain evidence about whether management’s assertion is fairly stated, in all material respects. The nature, timing and extent of the procedures selected depend on our judgment, including an assessment of the risks of material misstatement of management’s assertion, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion.
Our examination does not provide a legal determination on the Company’s compliance with the specified requirements.
In our opinion, management’s assertion that the Company complied with the PPLUS Minimum Servicing Standards with respect to the INDEXPLUS Trust Series 2003-1 as set forth in Appendix I as of and for the year ended December 31, 2021 is fairly stated, in all material respects.
/s/ PricewaterhouseCoopers LLP
New York, NY
March 8, 2022
Servicing Standards
| By: | /s/ Matthew J. Nelson | |||
| Matthew J. Nelson | ||||
| President Merrill Lynch Depositor, Inc. |
||||
PPLUS Trust Series GSC-2
INDEXPLUS Trust Series 2003-1
Appendix I
PPLUS Minimum Servicing Standards intended for use
in connection with the Annual Accountants Report ("AAR")
Below is Merrill Lynch Depositor, Inc.'s ("the Depositor"), Merrill Lynch Structured Credit Derivatives ("SCD") and the Merrill Lynch Credit Derivatives Operations Group ("OG") (collectively, “Merrill Lynch”) minimum servicing standards for the PreferredPlus Program ("PPlus").
The Bank of New York Mellon ("the Bank" or “the Trustee”) acting as Trustee, Custodian, Paying Agent, and Transfer Agent on behalf of the PPlus Program has agreed to comply with all of the following minimum servicing standards. Merrill Lynch has obtained a certification from the Bank that it has complied with these criteria for the period January 1, 2021 to December 31, 2021.
| MINIMUM Servicing STANDARD | Applicable Servicing STANDARD | ||
| Reference | Criteria | Performed by the Depositor | Performed by Bank/Trustee |
| CUSTODIAL BANK ACCOUNT RECONCILIATIONS | |||
| 1 | The Bank must reconcile all related custodial bank accounts. |
X | |
| The Bank will include the Distribution report as Exhibit 99.1 in the Form 8-Ks filed with the SEC. | X | ||
| VERIFICATION OF INCOMING TRUST COLLATERAL INTEREST PAYMENTS | |||
| 2 | The Bank must have a tickler system in place so that they will be expecting and monitoring the custodial bank account for receipt of the collateral coupon interest. Each of the tickler systems shall be updated on an on-going basis as each new trust series is created. | X | |
| The Bank will ensure all interest payments are deposited into the custodial bank accounts and related bank clearing accounts on the day the Bank is in receipt of the funds. | X | ||
| The Bank must prove the arithmetic accuracy of the amount of interest received by the Trust from the underlying securities and ensure that the face amount, description, coupon rate, and maturity date of the securities held in the Trust agree to the PPM Supplement dated Date XX, 20XX. | X | ||
| 1 |
| MINIMUM Servicing STANDARD | Applicable Servicing STANDARD | ||
| Reference | Criteria | Performed by the Depositor | Performed by Bank/Trustee |
TRUST DISBURSEMENTS | |||
| 3 | The Bank must prove the arithmetic accuracy of the amount of interest to be paid by the Trust to the Debt Unit holders by referring to the PPM Supplement dated Date XX, 20XX. | X | |
| The Bank will make all disbursements via wire transfer to The Depository Trust Company ("DTC") on the scheduled trust distribution date as soon as the amount of interest received from the underlying collateral into the custodial bank account has been received and verified for accuracy. | X | ||
| PARTIAL REDEMPTIONS | |||
| 4 | If there is a partial redemption of the trust certificates the Bank and the Depositor must ensure that the redemption proceeds received by the Trust and distributed by the Bank are in accordance with the series supplement. | X | X |
| DEFAULTS | |||
| 5 | If the Bank has actual knowledge of an event of default on the underlying securities that did not cause the Trust to liquidate, the Bank must distribute a formal notice of default to the Depositor, the certificateholders, the rating agencies and SCD/OG. | X | |
| If the Bank has actual knowledge of an event of default on the underlying securities that did not cause the Trust to liquidate, the procedures for a vote or consent of the certificateholders as set forth in the Standard Terms and series Supplement must be complied with. | X | ||
| CALL WARRANT EXERCISES AND OPTIONAL EXCHANGES | |||
| 6 | If there is an exercise of call warrants or an optional exchange of trust certificates for underlying securities that did not cause the Trust to liquidate, the Bank must give the Depositor and the affected certificateholders notice of any exercise of call warrants or optional exchange. Such notice must contain the amount of certificates to be purchased, the call price, and any other relevant information. | X | |
| 2 |
| MINIMUM Servicing STANDARD | Applicable Servicing STANDARD | ||
| Reference | Criteria | Performed by the Depositor | Performed by Bank/Trustee |
| If there is an exercise of call warrants or an optional exchange of trust certificates for underlying securities that did not cause the trust to liquidate, the Bank must notify the rating agencies of the call exercise or optional exchange. | X | ||
| If there is an exercise of call warrants or an optional exchange of trust certificates for underlying securities that did not cause the trust to liquidate, the Bank must give notice of exercise or optional exchange to the Depositor and certificate registrar of any certificates that were called. | X | ||
| COMMUNICATIONS WITH CERTIFICATEHOLDERS | |||
| 7 |
If there was any occasion for the exercise of voting rights or giving consents by the certificateholders, the Bank must provide notice to the certificateholders within 5 business days of the Trust's receipt of notice of the occasion and the Bank must vote or give consents as directed by certificateholders. |
X | |
| 3 |
EXHIBIT 99.3
[KPMG LLP Letterhead]
KPMG LLP
Aon Center
Suite 5500
200 E. Randolph Street
Chicago, IL 60601-6436
Independent Accountants’ Report
The Board of Directors
The Bank of
New York Mellon:
We have examined the accompanying Management Assertion from The Bank of New York Mellon (the “Bank”) that the Bank complied with the PPLUS Minimum Servicing Standards (“Servicing Standards”) for the INDEXPLUS Trust Series 2003-1 transaction as of and for the year ended December 31, 2021. With respect to Servicing Standards 4, 5 and 6, the Management Assertion indicates that there were no activities performed as of and for the year ended December 31, 2021 with respect to the INDEXPLUS Trust Series 2003-1 transaction, because there were no occurrences of events that would require the Bank to perform such activities. The Bank’s management is responsible for its assertion. Our responsibility is to express an opinion on the Management Assertion about the Bank’s compliance with the specified requirements based on our examination.
Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the Management Assertion about compliance with the specified requirements is fairly stated, in all material respects. An examination involves performing procedures to obtain evidence about whether the Management Assertion is fairly stated, in all material respects. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material misstatement of the Management Assertion, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion.
Our examination does not provide a legal determination on the Bank’s compliance with specified requirements.
In our opinion, the Management Assertion that the Bank complied with the aforementioned PPLUS Minimum Servicing Standards for the INDEXPLUS Trust Series 2003-1 transaction as of and for the year ended December 31, 2021 is fairly stated, in all material respects.
/s/ KPMG LLP
Chicago, Illinois
February 23, 2022
MANAGEMENT ASSERTION
The Bank of New York Mellon (formerly The Bank of New York) (the
“Bank”) is responsible for complying with the requirements of the PPLUS Minimum Servicing Standards
(“Servicing Standards”) as they relate to the INDEXPLUS Trust Series 2003-1 transaction. With respect to
Servicing Standards 4, 5 and 6, there were no activities performed as of and for the year ended December 31, 2021 with respect
to the INDEXPLUS Trust Series 2003-1 transaction, because there were no occurrences of events that would require the Bank to
perform such activities. The Bank is responsible for establishing and maintaining effective internal control over compliance
with the Servicing Standards. The Bank has performed an evaluation of its compliance with the requirements of the Servicing
Standards as it relates to INDEXPLUS Trust Series 2003-1 as of and for the year ended December 31, 2021. Based on this
evaluation, the Bank asserts that as of and for the year ended December 31, 2021, it has complied with the requirements of
the PPLUS Minimum Servicing Standards (attached).
|
/s/ Linda Derrick
The Bank of New York Mellon Linda Derrick Global Head of Client Service, Issuer Services February 23, 2022 |
|
Appendix I
PPLUS Minimum Servicing Standards intended for use
in connection with the Annual Accountants Report ("AAR")
Below is Merrill Lynch Depositor, Inc.'s ("the Depositor"), Merrill Lynch Structured Credit Derivatives ("SCD") and the Merrill Lynch Credit Derivatives Operations Group ("OG") (collectively Merrill Lynch) minimum servicing standards for the PreferredPlus Program ("PPlus").
The Bank of New York Mellon ("the Bank" or “the Trustee”) acting as Trustee, Custodian, Paying Agent, and Transfer Agent on behalf of the PPlus Program has agreed to comply with all of the following minimum servicing standards. Merrill Lynch has obtained a certification from the Bank that it has complied with these criteria for the period January 1, 2021 to December 31, 2021.
| MINIMUM Servicing STANDARD | Applicable Servicing STANDARD | ||
| Reference | Criteria | Performed by the Depositor | Performed by Bank/Trustee |
| CUSTODIAL BANK ACCOUNT RECONCILIATIONS | |||
| 1 | The Bank must reconcile all related custodial bank accounts. |
X | |
| The Bank will include the Distribution report as Exhibit 99.1 in the Form 8-Ks filed with the SEC. | X | ||
| VERIFICATION OF INCOMING TRUST COLLATERAL INTEREST PAYMENTS | |||
| 2 | The Bank must have a tickler system in place so that they will be expecting and monitoring the custodial bank account for receipt of the collateral coupon interest. Each of the tickler systems shall be updated on an on-going basis as each new trust series is created. | X | |
| The Bank will ensure all interest payments are deposited into the custodial bank accounts and related bank clearing accounts on the day the Bank is in receipt of the funds. | X | ||
| The Bank must prove the arithmetic accuracy of the amount of interest received by the Trust from the underlying securities and ensure that the face amount, description, coupon rate, and maturity date of the securities held in the Trust agree to the PPM Supplement dated Date XX, 20XX. | X | ||
| 1 |
| MINIMUM Servicing STANDARD | Applicable Servicing STANDARD | ||
| Reference | Criteria | Performed by the Depositor | Performed by Bank/Trustee |
TRUST DISBURSEMENTS | |||
| 3 | The Bank must prove the arithmetic accuracy of the amount of interest to be paid by the Trust to the Debt Unit holders by referring to the PPM Supplement dated Date XX, 20XX. | X | |
| The Bank will make all disbursements via wire transfer to The Depository Trust Company ("DTC") on the scheduled trust distribution date as soon as the amount of interest received from the underlying collateral into the custodial bank account has been received and verified for accuracy. | X | ||
| PARTIAL REDEMPTIONS | |||
| 4 | If there is a partial redemption of the trust certificates the Bank and the Depositor must ensure that the redemption proceeds received by the Trust and distributed by the Bank are in accordance with the series supplement. | X | X |
| DEFAULTS | |||
| 5 | If the Bank has actual knowledge of an event of default on the underlying securities that did not cause the Trust to liquidate, the Bank must distribute a formal notice of default to the Depositor, the certificateholders, the rating agencies and SCD/OG. | X | |
| If the Bank has actual knowledge of an event of default on the underlying securities that did not cause the Trust to liquidate, the procedures for a vote or consent of the certificateholders as set forth in the Standard Terms and series Supplement must be complied with. | X | ||
| CALL WARRANT EXERCISES AND OPTIONAL EXCHANGES | |||
| 6 | If there is an exercise of call warrants or an optional exchange of trust certificates for underlying securities that did not cause the Trust to liquidate, the Bank must give the Depositor and the affected certificateholders notice of any exercise of call warrants or optional exchange. Such notice must contain the amount of certificates to be purchased, the call price, and any other relevant information. | X | |
| 2 |
| MINIMUM Servicing STANDARD | Applicable Servicing STANDARD | ||
| Reference | Criteria | Performed by the Depositor | Performed by Bank/Trustee |
| If there is an exercise of call warrants or an optional exchange of trust certificates for underlying securities that did not cause the trust to liquidate, the Bank must notify the rating agencies of the call exercise or optional exchange. | X | ||
| If there is an exercise of call warrants or an optional exchange of trust certificates for underlying securities that did not cause the trust to liquidate, the Bank must give notice of exercise or optional exchange to the Depositor and certificate registrar of any certificates that were called. | X | ||
| COMMUNICATIONS WITH CERTIFICATEHOLDERS | |||
| 7 |
If there was any occasion for the exercise of voting rights or giving consents by the certificateholders, the Bank must provide notice to the certificateholders within 5 business days of the Trust's receipt of notice of the occasion and the Bank must vote or give consents as directed by certificateholders. |
X | |
| 3 |