At year-end 2006 all ICA loans were current. During 2006 there was never a delinquent loan in any of the ICA trusts. ICA trusts had three more loans prepay in 2006. Yield maintenance penalties provided Trust 2003-1 with an additional 151 basis points of total return in 2006, Trust 2003-2 with an additional 78 basis points of total return in 2006 and trust 2004-1 with an additional 86 basis points of total return in 2006. There have now been 8 loans prepay in ICA Trusts. All of these loans paid penalties which enhanced the total return of their trust. We did not anticipate this trend when we began ICA, but welcome the additional performance and hope the trend continues.

ICA trusts have had 22 insurance companies as participants and now have a 4 year EAF (Experience Adjustment Factor) of 0. For participants who had no Schedule B assets and were in a 2003 ICA Trust, you will have a 5-year EAF at the end of 2007.

ICA purchased and implemented a new accounting system in 2006. This system is already enhancing our ability to serve ICA Trust participants. Schedule B reports for individual participants are now available in an Excel format in the client access/individual client section of our web site. You will no longer need to calculate, cut or paste your various trust holdings in order to complete your Schedule B.

Year-end 2006 data, including bank statements, Schedule B’s (per trust) and cash flow projections are currently accessible and downloadable on the client access/trust level of our web site. We will e-mail out the AM Best #68031 spreadsheet updated for 2006 in the next couple of weeks.

We are currently taking subscriptions for ICA Loan Trust 2007-1. Interest has been strong and we expect this to be our largest trust to date. We hope to begin committing on loans by the 15th of the month. The 180 basis point spread we hope to achieve is not quite as hard to produce as in early 2006, so we hope to fill 2007-1 in a timelier manner than was possible on 2006-1. This would enable us to have 4 trusts in 2007.

As always, The ICA team is very appreciative of your business and hope to continue to provide you with strong performance and service in your small balance commercial mortgage investing.

1. Beginning last month, UMB statements have been posted in XL rather than PDF format. You can now copy and paste any P and I payments you need to record.
2. We developed a spread sheet for the “Investment Section – Mortgage Loan Distribution and Performance” #68031 for AM Best reports. It will be on the web site next week. This spreadsheet will be updated each December 31st for the calculations.