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LCD-79-320 1 (1979-07-11)

handle is hein.gao/gaobaazzp0001 and id is 1 raw text is: 



REPORT BY THE                                               It1 OG


Comptroller General


OF THE UNITED STATES


General Services Administration's

Debt Management Problems

With Its Participation Certificates



The General Services Administration obtained
$697 1 million through the sale of its 30 year
participation certificates, issued under four
trust indentures It has experienced problems
complying with the terms of the indentures
relating to (1) the use of market purchases as
a credit against mandatory annual redemp
tions and (2) the incorrect computation of
installments for an nual redemptions


In 1979 the trustee issued event of default
notices for two indentures because about $7
million of certificates were not redeemed to
meet mandatory sinking fund installments in
1976, 1977, and 1978 General Services de
posited funds with the trustee to cover the
shortages disclosed to date in an effort to cure
the claimed defaults

In the event of default, the trustee or holders
of 25 percent of the outstanding certificates
may declare the entire amount of certificates
due and payable immediately As of June21,
1979, this had not been done


1


111006


   LCD 79 320
JULY 11, 1979


6'31(14,

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