Exhibit 99.1

MBIA INSURANCE CORPORATION
AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2002 AND DECEMBER 31, 2001

AND FOR THE PERIODS ENDED SEPTEMBER 30, 2002 AND 2001

MBIA INSURANCE CORPORATION
AND SUBSIDIARIES

INDEX

	PAGE
Consolidated Balance Sheets – September 30, 2002 and December 31, 2001 (Unaudited)	3
Consolidated Statements of Income – Nine months ended September 30, 2002 and 2001 (Unaudited)	4
Consolidated Statement of Changes in Shareholder’s Equity – Nine months ended September 30, 2002 (Unaudited)	5
Consolidated Statements of Cash Flows – Nine months ended September 30, 2002 and 2001 (Unaudited)	6
Notes to Consolidated Financial Statements (Unaudited)	7-10

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(dollars in thousands except per share amounts)

						September 30, 2002		December 31, 2001
Assets
Investments:
			Fixed-maturity securities held as available-for-sale at fair value (amortized cost $7,014,270 and $6,707,183)			$	7,597,874	$	6,839,389
			Fixed-maturity securities pledged as collateral at fair value (amortized cost $415,730 and $465,670)				442,343		479,938
			Short-term investments, at amortized cost (which approximates fair value)				514,582		284,321
			Other investments				43,739		28,756
					Total investments		8,598,538		7,632,404
Cash and cash equivalents							11,994		24,404
Securities purchased under agreements to resell							517,308		559,751
Accrued investment income							116,963		110,264
Deferred acquisition costs							287,407		277,699
Prepaid reinsurance premiums							518,813		507,079
Reinsurance recoverable on unpaid losses							44,335		35,090
Goodwill							76,938		76,538
Property and equipment, at cost (less accumulated depreciation of $61,687 and $53,618)							110,586		113,176
Receivable for investments sold							5,830		23,599
Other assets							145,001		100,284
					Total assets	$	10,433,713	$	9,460,288
Liabilities and Shareholder’s Equity
Liabilities:
		Deferred premium revenue				$	2,635,925	$	2,565,096
		Loss and loss adjustment expense reserves					568,174		518,389
		Securities sold under agreements to repurchase					517,308		559,761
		Deferred income taxes					433,074		249,169
		Current income taxes					—		4,508
	Deferred fee revenue						21,022		23,987
	Payable for investments purchased						124,064		50,239
	Other liabilities						256,675		263,260
					Total liabilities		4,556,242		4,234,399
Shareholder’s Equity:
			Common stock, par value $150 per share; authorized, issued and outstanding – 100,000 shares				15,000		15,000
			Additional paid-in capital				1,590,359		1,567,478
			Retained earnings				3,889,736		3,572,397
		Accumulated other comprehensive income, net of deferred income tax provision of $213,611 and $51,300					382,376		71,014
				Total shareholder’s equity			5,877,471		5,225,889
				Total liabilities and shareholder’s equity		$	10,433,713	$	9,460,288

The accompanying notes are an integral part of the consolidated financial  statements.

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands)

										Three months ended September 30						Nine months ended September 30
										2002			2001			2002			2001
Revenues:
					Gross premiums written					$	237,753		$	218,722		$	630,337		$	610,186
				Ceded premiums							(57,661	)		(75,264	)		(146,131	)		(173,409	)
									Net premiums written		180,092			143,458			484,206			436,777
			Increase in deferred premium revenue								(25,492	)		(9,008	)		(52,799	)		(53,953	)
								Premiums earned (net of ceded premiums of $49,117, $43,512, $137,819 and $123,765)			154,600			134,450			431,407			382,824
			Net investment income								108,726			105,310			322,347			309,460
		Net realized gains									6,157			858			7,540			5,903
		Change in fair value of derivative instruments									(3,825	)		6,349			811			(757	)
		Advisory fees									18,273			5,507			36,085			23,693
		Other									50			205			383			592
						Total revenues					283,981			252,679			798,573			721,715
Expenses:
	Losses and loss adjustment										15,528			10,325			45,416			41,366
	Amortization of deferred acquisition costs										12,799			11,139			34,944			31,009
	Operating										20,141			19,362			58,650			57,092
							Total expenses				48,468			40,826			139,010			129,467
Income before income taxes											235,513			211,853			659,563			592,248
Provision for income taxes											60,079			55,788			169,624			153,492
Income before cumulative effect of accounting change											175,434			156,065			489,939			438,756
	Cumulative effect of accounting change										—			—			—			(11,082	)
Net income										$	175,434		$	156,065		$	489,939		$	427,674

The accompanying notes are an integral part of the consolidated financial  statements.

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MBIA INSURANCE CORPORATION AND  SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY (Unaudited)
For the nine months ended September 30, 2002

(Dollars in thousands except per share amounts)

			Common Stock					Additional Paid-in Capital		Retained  Earnings			Accumulated Other Comprehensive Income		Total Shareholder’s Equity
			Shares			Amount
Balance, January 1, 2002				100,000		$	15,000	$	1,567,478	$	3,572,397		$	71,014	$	5,225,889
Comprehensive income:
	Net income			—			—		—		489,939			—		489,939
	Other comprehensive income:
		Change in unrealized appreciation of investments net of change in deferred income taxes of $162,312		—			—		—		—			302,098		302,098
		Change in foreign currency translation		—			—		—		—			9,264		9,264
	Other comprehensive income															311,362
Comprehensive income																801,301
Dividends declared (per common share $1,726.00)				—			—		—		(172,600	)		—		(172,600	)
Fair value of stock options – FAS 123				—			—		3,067		—			—		3,067
Tax reduction related to tax sharing agreement with MBIA Inc.				—			—		19,814		—			—		19,814
Balance, September 30, 2002				100,000		$	15,000	$	1,590,359	$	3,889,736		$	382,376	$	5,877,471
Disclosure of reclassification amount:
	Unrealized appreciation of investments arising during the period, net of taxes		$	307,318
	Reclassification adjustment, net of taxes			(5,220	)
	Net unrealized appreciation, net of taxes		$	302,098

The accompanying notes are an integral part of the consolidated financial statements.

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)

												Nine months ended September 30
												2002			2001
Cash flows from operating activities:
								Net income				$	489,939		$	427,674
								Adjustments to reconcile net income to net cash provided by operating activities:
											Increase in accrued investment income		(6,699	)		(3,624	)
											Increase in deferred acquisition costs		(9,708	)		(2,373	)
											Increase in prepaid reinsurance premiums		(11,734	)		(47,742	)
											Increase in deferred premium revenue		64,533			101,695
											Increase in loss and loss adjustment expense reserves, net		40,540			23,188
											Depreciation		8,069			7,801
											Goodwill		—			3,493
											Amortization of bond discount, net		(1,760	)		(6,445	)
											Net realized gains on sale of investments		(7,540	)		(5,903	)
											Deferred income tax provision (benefit)		21,466			(662	)
											Fair value of derivative instruments		(811	)		757
											Cumulative effect of acounting change, net		—			11,082
											Other, net		(19,937	)		56,309
											Total adjustments to net income		76,419			137,576
											Net cash provided by operating activities		566,358			565,250
Cash flows from investing activities:
							Purchase of fixed-maturity securities, net of payable for investments purchased						(2,206,012	)		(2,531,250	)
						Sale of fixed-maturity securities, net of receivable for investments sold							1,665,537			1,804,283
					Redemption of fixed-maturity securities, net of receivable for investments redeemed								384,935			312,704
					Purchase of short-term investments, net								(230,261	)		(33,778	)
				Purchase of other investments, net									(14,686	)		(18,639	)
			Capital expenditures, net of disposals										(5,681	)		(5,139	)
									Net cash used by investing activities				(406,168	)		(471,819	)
Cash flows from financing activities:
		Dividends paid											(172,600	)		(99,400	)
										Net cash used by financing activities			(172,600	)		(99,400	)
Net decrease in cash and cash equivalents													(12,410	)		(5,969	)
Cash and cash equivalents – beginning of period													24,404			12,541
Cash and cash equivalents – end of period												$	11,994		$	6,572
Supplemental cash flow disclosures:
	Income taxes paid											$	166,291		$	117,470

The accompanying notes are an integral part of the consolidated financial statements.

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     1.  Basis of Presentation

     The accompanying consolidated financial statements are unaudited and include the accounts of MBIA Insurance Corporation and its Subsidiaries (the “Company”).  The statements do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America.  These statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2001.  The accompanying consolidated financial statements have not been audited by independent accountants in accordance with auditing standards generally accepted in the United States of America, but in the opinion of management such financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to summarize fairly the Company’s financial position and results of operations.  The results of operations for the nine months ended September 30, 2002 may not be indicative of the results that may be expected for the year ending December 31, 2002.  The December 31, 2001 balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

     2.  Dividends Declared

     Dividends declared and paid by the Company during the nine months ended September 30, 2002 were $172.6 million.

     3.  Recent Accounting Pronouncements

     Effective January 1, 2002 the Company adopted Statement of Financial Accounting Standards No. (“SFAS”) 141, “Business Combinations” and SFAS 142, “Goodwill and Other Intangible Assets.”  SFAS 141, which supercedes Accounting Principles Board Opinion No. (“APB”) 16, “Business Combinations,” requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 and provides specific criteria for initial recognition of intangible assets apart from goodwill.  SFAS 142 supercedes APB 17, “Intangible Assets,” and requires that goodwill and intangible assets with indefinite lives no longer be amortized but be subject to annual impairment tests in accordance with the Statement.  The Statement includes a two-step process aimed at determining the amount, if any, by which the carrying value of a reporting unit exceeds its fair value.  Other intangible assets are to be amortized over their useful lives.

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

     The following table contains a reconciliation of reported net income to net income adjusted for the effect of goodwill amortization for the nine months ended September 30, 2001:

		3rd Quarter				September 30
		2002		2001		2002		2001
Net income (in millions):
	As reported	$	175	$	156	$	490	$	428
	Amortization of goodwill	$	—	$	1	$	—	$	3
	Adjusted net income	$	175	$	157	$	490	$	431

     The Company completed its transitional impairment testing on its existing goodwill as of January 1, 2002 in accordance with the Statement.

     As of January 1, 2002, goodwill in the insurance segment totaled $76.9 million.  SFAS 142 requires a two step approach in determining any impairment in goodwill.  Step one entails evaluating whether the fair value of a reporting segment exceeds its carrying value.  In performing this evaluation the Company determined that the best measure of the fair value of the insurance reporting segment is its book value adjusted for deferred premium revenue, prepaid reinsurance premiums, deferred acquisition costs and the present value of installments to arrive at adjusted book value.  As of January 1, 2002, the insurance reporting segment’s adjusted book value exceeded its carrying value, and thus there was no impairment of its existing goodwill.

     4.   Employee Stock Option Plans

     In the second quarter of 2002, the Company adopted the expense recognition provisions of SFAS 123, “Accounting for Stock-based Compensation,” retroactive to January 1, 2002.  In accordance with SFAS 123 the Company valued all stock options granted in 2002 using an option pricing model.  The value is recognized as an expense over the period in which the options vest.  The Company believes that recognizing the expense associated with stock option grants is preferable to the prior method of accounting for stock options under Accounting Principles Board Opinion 25, “Accounting for Stock Issued to Employees” because it produces a complete picture of compensation expenses within the Company’s statement of income.  The following table shows the effect on income and earnings per share of recognizing employee stock option expense:

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

	3rd Quarter					Year-to-Date
	2002			2001		2002			2001
Net income (in thousands):
Net income before stock option expense	$	175,679		$	156,065	$	490,677		$	427,674
After-tax stock option expense		(245	)		—		(738	)		—
As reported	$	175,434		$	156,065	$	489,939		$	427,674

		1st Quarter 2002
(in thousands)		As Reported		Stock Option Expense		Restated
	Insurance operating expense	$	18,363	$	375	$	18,738
	Net income	$	162,218	$	244	$	161,974

     5.   Recent Litigation

     On July 15, 2002 MBIA Insurance Corporation and Subsidiaries (“MBIA Corp.”) and Wells Fargo Bank Minnesota, N.A. (“Wells Fargo”), in its capacity as trustee, jointly filed suit in Delaware federal district court against Royal Indemnity Company (“Royal”) to enforce insurance policies that Royal issued (the “Royal Policies”) to guarantee vocational loans originated by Student Finance Corporation (“SFC”).  MBIA Corp. insured eight securitizations, which had a total gross par outstanding of approximately $365 million as September 30, 2002, that were collateralized by the vocational student loans originated by SFC and guaranteed by Royal. The Royal Policies guarantee the payment of all the principal plus 90 days interest on all of the vocational loans in the securitizations insured by MBIA Corp. and state that “notwithstanding any other provision of (the) policy to the contrary, the right of the beneficiary to receive payment for loss under (the) policy after payment of the initial premium by the insured shall be absolute, irrevocable and unconditional.”

     In their complaints, MBIA Corp. and Wells Fargo allege that Royal has committed anticipatory breaches of the Royal Policies. Previously, in June 2002, Royal brought suit against Well Fargo and other parties, not including MBIA

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Corp., seeking a declaration that it is not obligated to pay on the Royal Policies, and seeking rescission of the Royal Policies, on the grounds that SFC, its subsidiaries, and other related parties engaged in fraudulent behavior and/or made negligent misrepresentations regarding the collateralized loans.

          To date, claims in the amount of approximately $311 million have been made under the Royal Policies with respect to student loans that have defaulted. MBIA Corp. expects that there will be additional claims made under the Royal Policies with respect to student loans that may default in the future. In the event that Royal does not honor claims under the Royal Policies during the pendency of the litigation, MBIA Corp. will be required to make payments under its policies in respect of scheduled interest and principal on the notes insured under the MBIA Corp. policies. MBIA Corp. expects ultimately to recover from Royal any payments it makes under its policies.

          MBIA Corp. believes that it will prevail in the litigation and will have no ultimate loss on these policies, although there can be no assurance that MBIA Corp. will prevail in the litigation. If MBIA Corp. does not prevail in the litigation and Royal does not make payments under the Royal Policies, MBIA Corp. expects to incur losses under its policies. MBIA Corp. does not believe, however, that any such losses will have a material adverse effect on its financial condition.

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