UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


               Quarterly Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934
                      For the quarter ended March 31, 2003

                        Commission file number: 000-23745


                             BNP U.S. Funding L.L.C.
                             -----------------------
             (Exact name of registrant as specified in its charter)
             ------------------------------------------------------



                Delaware                                        13-3972207
                --------                                        ----------
    (State or other jurisdiction of                          (I.R.S. Employer
     incorporation or organization)                         Identification No.)

   787 Seventh Avenue, New York, N.Y.                              10019
   ----------------------------------                              -----
(Address of principal executive offices)                        (Zip Code)


              Registrant's telephone number, including area code:
                                 (212) 841-2000
                                 --------------




     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 3 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 [X] No [_]



     Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [_] No [X]




     All outstanding shares of Common Stock were held by BNP PARIBAS, the
Registrant's parent Company, at March 31, 2003


     Number of Shares of Common Stock outstanding on March 31, 2003: 53,011

<PAGE>
                            Form 10-Q Index

Part I                                                                     Page
Item 1.   Financial Statements
          Balance Sheets at March 31, 2003 and December 31, 2002             3
          Statements of Income for the Three-month periods ended
                March 31, 2003 and March 31, 2002                            4

          Statements of Comprehensive Income for the
                Three-month periods ended March 31, 2003 and March 31, 2002  5

          Statements of Changes in Redeemable Common Securities,
                Preferred Securities and Securityholders' Equity for the
                Three-month periods ended March 31, 2003 and March 31, 2002  6

          Statements of Cash Flows for the Three-month periods ended
                March 31, 2003 and March 31, 2002                            7

          Notes to Financial Statements                                      8
Item 2.   Management's Discussion and Analysis of Financial Condition
                and Results of Operation                                    16

Item 3.   Quantitative and Qualitative Disclosures about Market Risk        19
Item 4.   Controls and Procedures                                           23

Part II
Item 1.   Legal Proceedings                                                 23
Item 2.   Changes in Securities and Use of the Proceeds                     23
Item 3.   Defaults Upon Senior Securities                                   24
Item 4.   Submission of Matters to a Vote of Securityholders                24
Item 5.   Other Information                                                 24
Item 6.   Exhibits and Current Reports on Form 8-K                          24

<PAGE>
                       BNP U.S. FUNDING L.L.C.

                            BALANCE SHEETS

                (in thousands, except per share data)


<TABLE>
<CAPTION>

                                                                         March 31, 2003    December 31, 2002
                                                                           (unaudited)        (audited)
                                                                         --------------    -----------------
<S>                                                                      <C>               <C>
ASSETS

Cash and cash equivalents                                                  $    26,485        $    40,180

Investment securities (Notes 3 and 4)
Available-for-sale, at fair value                                            1,054,867          1,013,910

Receivable arising from payment for securities, pursuant
     to the application of SFAS 125, as replaced by
     SFAS 140 (Note 3)                                                          66,977             85,660

Accounts receivable                                                                827              1,052

Accrued interest receivable                                                      7,723              8,400

Other assets                                                                     1,379              1,683
                                                                       ----------------   ----------------

TOTAL ASSETS                                                               $ 1,158,258        $ 1,150,885
                                                                       ================   ================

LIABILITIES

Accrued interest payable                                                         1,037              2,634
Accrued expenses                                                                   146                204
Other liabilities                                                               88,314             86,023
                                                                       ----------------   ----------------

TOTAL LIABILITIES                                                               89,497             88,861
                                                                       ----------------   ----------------

Redeemable common securities, par value and redeemable
     value $10,000 per security; 150,000 securities authorized,
     53,011 securities issued and outstanding (Note 5)                         530,110            530,110
Preferred securities, liquidation preference $10,000 per
     security; 150,000 securities authorized, 50,000 securities
     issued and outstanding                                                    500,000            500,000
Additional paid in capital                                                       1,044              1,044
Accumulated other comprehensive income                                          27,034             26,548
Retained earnings                                                               10,573              4,322
                                                                       ----------------   ----------------

TOTAL REDEEMABLE COMMON SECURITIES,
     PREFERRED SECURITIES AND
     SECURITYHOLDERS' EQUITY                                                 1,068,761          1,062,024
                                                                       ----------------   ----------------

TOTAL LIABILITIES AND TOTAL REDEEMABLE
     COMMON SECURITIES, PREFERRED
     SECURITIES AND SECURITYHOLDERS' EQUITY                                $ 1,158,258        $ 1,150,885
                                                                       ================   ================
</TABLE>


The accompanying Notes to Financial Statements are an integral part of these
statements.

<PAGE>
                     BNP U.S. FUNDING L.L.C.

                      STATEMENTS OF INCOME

              (in thousands, except per share data)


<TABLE>
<CAPTION>

                                                     Three-month           Three-month
                                                    period ended           period ended
                                                   March 31, 2003         March 31, 2002
                                                    (unaudited)             (unaudited)
                                                ------------------     -------------------
INTEREST INCOME
<S>                                             <C>                    <C>
Collateralized Mortgage Obligations:
     Floating-Rate REMICs                                $    130                $    332
     Fixed-Rate REMICs                                        473                     775
Mortgage Backed Securities:
     Agency ARMs                                              240                     711
     Agency Hybrid ARMs                                       419                     841
     Agency DUSs                                            1,312                   1,452
Agency Debentures                                           4,211                   4,025
Interest on deposits                                          102                     153
                                                ------------------     -------------------

Total                                                       6,887                   8,289
                                                ------------------     -------------------

NONINTEREST EXPENSE

Other financial instrument                                    304                       -
Fees and expenses                                             332                     294
                                                ------------------     -------------------

Total                                                         636                     294
                                                ------------------     -------------------

NET INCOME APPLICABLE TO PREFERRED AND
     REDEEMABLE COMMON SECURITIES                        $  6,251                $  7,995
                                                ==================     ===================

NET INCOME PER REDEEMABLE
     COMMON SECURITY                                     $ 117.92                $ 150.82
                                                ==================     ===================
</TABLE>


The accompanying Notes to Financial Statements are an integral part of these
statements.

<PAGE>
                  BNP U.S. FUNDING L.L.C.

             STATEMENTS OF COMPREHENSIVE INCOME

                       (in thousands)

<TABLE>
<CAPTION>

                                                              Three-month              Three-month
                                                              period ended             period ended
                                                             March 31, 2003           March 31, 2002
                                                              (unaudited)              (unaudited)
                                                          -------------------      -------------------
<S>                                                       <C>                      <C>
NET INCOME                                                     $       6,251          $        7,995


OTHER COMPREHENSIVE INCOME

Net change in unrealized gain (loss) in fair value of
      available-for-sale securities that are not
      treated as collateral (Note 3) and that are
      not hedged by derivative instruments                               486                  (4,810)
                                                          -------------------     -------------------


TOTAL OTHER COMPREHENSIVE INCOME                                         486                  (4,810)
                                                          -------------------     -------------------


COMPREHENSIVE INCOME                                           $       6,737          $        3,185
                                                          ===================     ===================

</TABLE>






The accompanying Notes to Financial Statements are an integral part of these
statements.

<PAGE>
                             BNP U.S. FUNDING L.L.C.

             STATEMENTS OF CHANGES IN REDEEMABLE COMMON SECURITIES,
                PREFERRED SECURITIES AND SECURITYHOLDERS' EQUITY

                                 (in thousands)



<TABLE>
<CAPTION>
                                                                                                                       Total
                                                                                                                    Redeemable
                                                                              Accumulated                       Common Securities,
                               Redeemable                      Additional        Other                          Preferred Securities
                                 Common        Preferred        Paid in      Comprehensive        Retained      and Securityholders'
                               Securities      Securities       Capital          Income           Earnings            Equity
                              (unaudited)     (unaudited)     (unaudited)     (unaudited)       (unaudited)        (unaudited)
                             --------------  ---------------  -------------  -----------------  --------------  -------------------
<S>                          <C>             <C>              <C>            <C>                <C>             <C>
Balance at December 31, 2001     $ 530,110        $ 500,000        $     6           $ 13,430        $  8,156          $ 1,051,702
                             --------------  ---------------  -------------  -----------------  --------------  -------------------

Net income                                                                                              7,995                7,995
Other comprehensive income                                                             (4,810)                              (4,810)
                             --------------  ---------------  -------------  -----------------  --------------  -------------------

Balance at March 31, 2002        $ 530,110        $ 500,000        $     6           $  8,620        $ 16,151          $ 1,054,887
                             ==============  ===============  =============  =================  ==============  ===================





Balance at December 31, 2002     $ 530,110        $ 500,000        $ 1,044           $ 26,548         $ 4,322          $ 1,062,024
                             --------------  ---------------  -------------  -----------------  --------------  -------------------

Net income                                                                                              6,251                6,251
Other comprehensive income                                                                486                                  486
                             --------------  ---------------  -------------  -----------------  --------------  -------------------

Balance at March 31, 2003        $ 530,110        $ 500,000        $ 1,044           $ 27,034        $ 10,573          $ 1,068,761
                             ==============  ===============  =============  =================  ==============  ===================
</TABLE>

The accompanying Notes to Financial Statements are an integral part of these
statements.



<PAGE>
                         BNP U.S. FUNDING L.L.C.

                        STATEMENTS OF CASH FLOWS

                             (in thousands)

<TABLE>
<CAPTION>

                                                                           Three-month          Three-month
                                                                          period ended         period ended
                                                                         March 31, 2003       March 31, 2002
                                                                           (unaudited)          (unaudited)
                                                                         ----------------    -----------------
OPERATING ACTIVITIES

<S>                                                                      <C>                  <C>
Net income                                                                       $ 6,251             $ 7,995
Adjustments to reconcile net income to net cash
  provided (used) by operating activities:
     Premium amortization                                                            312                 522
     Net change in interest receivable                                               677                (362)
     Net change in accounts receivable                                               225                 845
     Net change in accrued expenses                                                  (58)                 63
     Net change in accrued interest payable                                       (1,597)               (294)
     Net change in payable for securities purchased                                    -              (9,802)
     Loss on hedge activity                                                           29                 280
     Loss on other financial instrument                                              304                   -
                                                                         ----------------     ---------------
Net cash provided (used) by operating activities                                   6,143                (753)
                                                                         ----------------     ---------------

INVESTING ACTIVITIES

Purchase of investment securities:
     Agency DUSs                                                                 (27,090)                  -
     Agency Debentures                                                           (20,038)                  -
Proceeds from principal payments of securities
  available-for-sale, not treated as collateral                                    8,710              15,732
Proceeds from principal payments of securities
  available-for-sale, treated as collateral                                       18,580              13,523
                                                                         ----------------     ---------------
Net cash provided (used) by investing activities                                 (19,838)             29,255
                                                                         ----------------     ---------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             (13,695)             28,502

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                    40,180              31,084
                                                                         ----------------     ---------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                        $ 26,485            $ 59,586
                                                                         ================     ===============

NONCASH FINANCING AND INVESTING ACTIVITIES

Decrease in receivable arising from payment for securities, pursuant
  to the application of SFAS #125, as replaced by SFAS #140, (Note 3)             18,683              13,807
</TABLE>


The accompanying Notes to Financial Statements are an integral part of these
statements.

<PAGE>

FORWARD LOOKING DISCLOSURE STATEMENT

From time to time, the company may publish, verbally or in written form,
forward-looking statements relating to such matters as anticipated financial
performance, economic conditions, interest rate levels, investment prospects and
similar matters. In fact, this Form 10-Q (or any other periodic reporting
documents required by the Securities Exchange Act of 1934 Act, as amended) may
contain forward-looking statements reflecting the current views of the Company
concerning potential future events or developments. The Private Securities
Litigation Reform Act of 1995 (the "Act") provides a "safe harbor" for
forward-looking statements. In order to comply with the terms of the "safe
harbor," the Company cautions investors that any forward-looking statements made
by the Company are not guarantees of future performance and that a variety of
factors could cause the Company's actual results and experience to differ
materially from the anticipated results or other expectations expressed in the
Company's forward-looking statements. The risks and uncertainties which may
affect the operations, performance, development and results of the Company's
business include, but are not limited to, the following: uncertainties relating
to economic conditions and interest rate levels, and uncertainties relating to
government and regulatory policies. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
the statements were made.

NOTE 1--ORGANIZATION AND BASIS OF PRESENTATION

BNP U.S. Funding L.L.C. (the "Company" or the "Registrant") is a Delaware
limited liability company formed on October 14, 1997, for the purpose of
acquiring and holding certain types of eligible securities that generate net
income for distribution to the holders of its Series A Preferred Securities (as
defined below) and its redeemable Common Securities (as defined below). The
Company has no subsidiaries and is a wholly owned subsidiary of the New York
Branch (the "Branch") of BNP PARIBAS (formerly, Banque Nationale de Paris), a
societe anonyme or limited liability corporation organized under the laws of the
Republic of France (the "Bank", "BNP PARIBAS" or "BNPP"). The Company was
continued pursuant to the Amended and Restated Limited Liability Company
Agreement of the Company (the "Company's Charter" or the "Charter") entered into
on December 5, 1997, by the Branch.

The Company was initially capitalized on October 14, 1997, with the issuance to
the Branch of one share of the Company's redeemable common securities, $10,000
par value (the "Common Securities"). On December 5, 1997 (inception), the
Company commenced operations concurrent with the issuance of 50,000
noncumulative preferred securities, Series A, liquidation preference $10,000 per
security, (the "Series A Preferred Securities"), to qualified institutional
buyers, and the issuance of an additional 53,010 Common Securities to the
Branch. These issuances raised in the aggregate $1,030,115,873 of net capital
(including $5,873 of additional paid in capital). This entire amount was used to
acquire a portfolio of debt securities (the "Initial Portfolio") at their fair
values from the Branch. On December 3, 2002, the Branch contributed $3,000,000
of additional paid in capital.

The Company entered into a services agreement (the "Services Agreement") with
the Branch on December 5, 1997, pursuant to which the Branch maintains the
securities portfolio of the Company (the "Portfolio") and performs other
administrative functions. All of the Company's officers and employees are
officers or employees of the Branch or the Bank. The securities in the Portfolio
are held by Citibank N.A., acting as trustee (the "Trustee") under the trust
agreement between the Company and Citibank N.A. dated December 1, 1997 (the
"Trust Agreement").

The accounting and financial reporting policies of the Company conform to U.S.
generally accepted accounting principles and current industry practices. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the reported amounts and disclosures and may vary from
actual results.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INVESTMENT SECURITIES

Investments in debt securities are classified as available-for-sale and are
carried at fair value. The debt securities can be categorized as hedged or
non-hedged securities. For the hedged securities, changes in the fair market
value of both the securities and the derivatives used as hedging instruments
(cross currency and interest rate swaps) are reported in current earnings in the
Statements of Income, pursuant to application of SFAS 133 (see below,
"Accounting for Derivatives and Hedging Activities"). Unrealized gains and
losses on the non-hedged securities are reported as a component of "Other
Comprehensive Income".

Interest on securities is included in interest income and is recognized using
the interest method. Premiums and discounts are amortized in a manner that
approximates the constant yield method.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash and short-term deposits with original
maturities of three months or less.

DIVIDENDS

Dividends on the Series A Preferred Securities, when, as and if declared by the
Company's Board of Directors, are payable semi-annually in arrears on a
non-cumulative basis on the fifth day of June and December of each year,
commencing June 5, 1998, at a rate per annum of 7.738% of the liquidation
preference through and including December 5, 2007. Thereafter, dividends, when,
as and if declared by the Company's Board of Directors, will be payable
quarterly in arrears on the third Wednesday of March, June, September, and
December of each year and will be calculated on a weekly basis in each quarter
at a rate per annum of the liquidation preference equal to 2.8% per annum above
one-week LIBOR for the week concerned as determined on the related LIBOR
Determination Date. Holders of Common Securities are entitled to receive
dividends when, as and if declared by the Company's Board of Directors out of
the Company's net income not required to be applied to fund dividends with
respect to the Series A Preferred Securities.

To date, the Company has declared and paid dividends as follows:

Security                                  Amount                 Date Paid
-----------------------------          ------------           ------------------
Series A Preferred Securities          $ 19,345,000           June 5, 1998
Common Securities                      $  5,347,365           June 22, 1998
Series A Preferred Securities          $ 19,345,000           December 5, 1998
Common Securities                      $  8,787,127           December 15, 1998
Series A Preferred Securities          $ 19,345,000           June 5, 1999
Common Securities                      $  8,454,284           June 15, 1999
Series A Preferred Securities          $ 19,345,000           December 5, 1999
Common Securities                      $ 10,352,672           December 15, 1999
Series A Preferred Securities          $ 19,345,000           June 5, 2000
Common Securities                      $ 12,508,486           June 19, 2000
Series A Preferred Securities          $ 19,345,000           December 5, 2000
Common Securities                      $ 14,792,297           December 19, 2000
Series A Preferred Securities          $ 19,345,000           June 5, 2001
Common Securities                      $ 10,718,708           June 19, 2001
Series A Preferred Securities          $ 19,345,000           December 5, 2001
Series A Preferred Securities          $ 19,345,000           June 5, 2002
Series A Preferred Securities          $ 19,345,000           December 5, 2002


If the Bank's financial condition were to deteriorate with the consequence that
a Shift Event (as defined below) were to occur, substantially all of the Common
Securities would be redeemed automatically without prior redemption of the
Series A Preferred Securities and dividends payable on each Series A Preferred
Security could be substantially reduced or completely eliminated. In addition,
if the Bank's Tier 1 risk-based capital ratio were to decline below the minimum
percentage required by French banking regulations (currently 4%), the Company
would pay a special dividend consisting of all of the Company's net assets
(other than assets having a total market value of approximately $40,000,000) to
the Bank as holder of the Common Securities.

A "Shift Event" would be deemed to have occurred if (i) the Bank's total
risk-based capital ratio or Tier 1 risk-based capital ratio were to decline
below the minimum percentages required by French banking regulations, (ii) the
Bank were to become subject to certain specified receivership proceedings or
(iii) the French Banking Commission (Commission bancaire), in its sole
discretion, were to notify the Bank and the Company that it has determined that
the Bank's financial condition was deteriorating such that either of the
foregoing clauses (i) or (ii) would apply in the near term. French banking
regulations currently require French banks to maintain a minimum total
risk-based capital ratio of at least 8.0% and a minimum Tier 1 risk-based
capital ratio of at least 4.0%.

The Company may not pay dividends or make other distributions on the Common
Securities or the Series A Preferred Securities if, after giving effect to the
distributions, the Company's liabilities would exceed the fair value of its
assets. Additionally, as long as any Series A Preferred Securities are
outstanding, except during a Shift Period (i.e., following the occurrence of a
Shift Event causing a shift in dividend preference and before the termination
thereof), the amount of dividends on the Common Securities in any fiscal year
may not exceed the amount by which the net income of the Company for such fiscal
year exceeds the stated dividends on the Series A Preferred Securities scheduled
to be paid during such fiscal year irrespective of whether dividends on the
Series A Preferred Securities are in fact declared and paid. Additionally, other
than during a Shift Period, no dividends may be declared, paid or set apart for
payment on the Common Securities (a) with respect to any period of time included
in any Dividend Period unless full dividends have been or contemporaneously are
declared and paid, or declared and a sum sufficient for the payment thereof is
set apart for such payment on the Series A Preferred Securities for the
then-current Dividend Period and (b) the Company may not declare, pay or set
apart funds for any dividends or other distributions with respect to any Common
Securities unless and until (x) full dividends on the Series A Preferred
Securities for the two most recent preceding Dividend Periods are declared and
paid, or declared and a sum sufficient for payment has been paid over to the
dividend disbursing agent for payment of such dividends and (y) the Company has
declared a cash dividend on the Series A Preferred Securities at the annual
dividend rate for the then-current Dividend Period, and sufficient funds have
been paid over to the dividend disbursing agent for payment of such cash
dividends for such then-current Dividend Period.

NET INCOME PER REDEEMABLE COMMON SECURITY

Net income per redeemable common security is calculated by dividing net income
after preferred dividends by the weighted average number of Common Securities
outstanding.

INCOME TAXES

The Company expects to be treated as a partnership for U.S. Federal income tax
purposes. As a partnership is not a taxable entity, the Company will not be
subject to U.S. federal, state and local income tax on its income. Instead, each
securityholder is required to take into account its allocable share of items of
income, gain, loss and deduction of the partnership in computing its U.S.
Federal tax liability. Accordingly, the Company has made no provision for income
taxes in the accompanying statements of income.

ACCOUNTING FOR DERIVATIVES AND HEDGING ACTIVITIES

SFAS 133 requires that an entity measure all derivatives at fair value and
recognize those derivatives as either assets or liabilities on the balance
sheet. The change in the derivative's fair value is generally to be recognized
in current period earnings. However, if certain conditions are met, a derivative
may be specifically designated as a hedge of an exposure to changes in fair
value, variability of cash flows or certain foreign currency exposures.

The Company has made an assessment of all their financial instruments and
concluded that it holds freestanding derivative instruments but no embedded
derivative instruments at March 31, 2003. As part of its asset management
activities the Company uses foreign exchange and interest rate swaps to modify
the interest rate and foreign exchange characteristics of existing assets. The
interest rate swaps have a high correlation between the instrument and the asset
being hedged, both at inception and throughout the hedge period.

FOREIGN CURRENCY TRANSLATION

Assets denominated in foreign currencies are translated to US dollars using
applicable rates of exchange.

All of the Company's assets denominated in a foreign currency are included in
its available-for-sale securities portfolio and their foreign currency exchange
risk is hedged by means of cross currency swaps. In accordance with the
requirements of SFAS 133, the change in fair value, due to the change in the
foreign currency exchange rate, of both the hedged securities and the hedging
instruments is recorded in current period earnings.

Revenues and expenses are translated monthly at amounts which approximate
weighted average exchange rates.

RECLASSIFICATION

Certain amounts have been reclassified to conform with current year
presentation.

NOTE 3--RECEIVABLE ARISING FROM PAYMENT FOR SECURITIES, PURSUANT TO THE
APPLICATION OF SFAS 125, AS REPLACED BY SFAS 140

Statement of Financial Accounting Standards No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities" ("SFAS
140") governs the accounting for the transfer of financial assets. Under SFAS
140 transfers of financial assets that do not meet certain sale accounting
requirements must be accounted for as a secured borrowing transaction with a
pledge of collateral.

Due to the potential consequences of a Shift Event (as described above), the
Company's purchase of the Initial Portfolio from the Branch did not meet certain
SFAS 125, as replaced by SFAS 140, sale accounting requirements. Therefore, the
purchase of the Initial Portfolio has been accounted for as a secured borrowing
transaction with a pledge of collateral. In accounting for this transaction as a
secured borrowing transaction in accordance with SFAS 125, as replaced by SFAS
140, the Company has recorded a receivable in an amount equal to the remaining
amount paid to the Branch to acquire the Initial Portfolio. In this case,
however, having delivered the securities in the Initial Portfolio to the
Company, neither the Branch nor BNPP has any further obligation to the Company
to repay any part of the purchase price for the Initial Portfolio or otherwise
to repurchase or redeem any securities in the Initial Portfolio.

The Company has not sold or repledged the collateral; the securities within the
Initial Portfolio mature or prepay over time. As they do, the Company recognizes
the cash proceeds as a reduction in the receivable arising from payment for
securities. The collateral at March 31, 2003, and December 31, 2002, is reported
in Note 4 below.

NOTE 4--INVESTMENT SECURITIES

The amortized cost and estimated fair value of available-for-sale securities
were as follows ($ in 000's) based on management's prepayment assumptions:


<TABLE>

                                                                  Gross              Gross
                                           Amortized         Unrealized         Unrealized
March 31, 2003 Non-Collateral                   Cost              Gains             Losses         Fair Value
-----------------------------             ----------         ----------         ----------         ----------
<S>                                       <C>                <C>                <C>                <C>
Collateralized Mortgage Obligations:
   Floating-Rate REMICs                   $    4,807         $       54         $      ---         $    4,861
   Fixed-Rate REMICs                          10,316              1,610                  1             11,925

Mortgage Backed Securities:
   Agency ARMs                                10,826                 38                  1             10,863

   Agency Hybrid ARMs                         15,724                205                 --             15,929

   Agency DUSs                               391,544             55,951                 --            447,495

Agency Debentures                            506,658             57,136                 --            563,794
                                          ----------         ----------         ----------         ----------
     Total                                $  939,875         $  114,994         $        2         $1,054,867
                                          ==========         ==========         ==========         ==========

                                                                  Gross              Gross
                                           Amortized         Unrealized         Unrealized
March 31, 2003 Collateral                       Cost              Gains             Losses         Fair Value
-----------------------------             ----------         ----------         ----------         ----------
Collateralized Mortgage Obligations:
   Floating-Rate REMICs                   $   17,162         $       21         $      196         $   16,987

   Fixed-Rate REMICs                          22,421                414                 --             22,835

Mortgage Backed Securities:
   Agency ARMs                                10,065                220                  9             10,276

   Agency Hybrid ARMs                         17,329                167                  3             17,493

   Agency DUSs                                    --                 --                 --                 --

Agency Debentures                                 --                 --                 --                 --
                                          ----------         ----------         ----------         ----------
     Total                                $   66,977         $      822         $      208         $   67,591
                                          ==========         ==========         ==========         ==========
March 31, 2003 Total Portfolio            $1,006,852         $  115,816         $      210         $1,122,458
------------------------------            ==========         ==========         ==========         ==========

                                                                  Gross              Gross
                                           Amortized         Unrealized         Unrealized
December 31, 2002 Non Collateral                Cost              Gains             Losses         Fair Value
--------------------------------           ---------         ----------         ----------         ----------
Collateralized Mortgage Obligations:
   Floating-Rate REMICs                   $    6,286         $       73         $        2         $    6,357
   Fixed-Rate REMICs                          10,654              1,652                 --             12,306

Mortgage Backed Securities:
   Agency ARMs                                14,182                116                 --             14,298

   Agency Hybrid ARMs                         18,275                216                  7             18,484

   Agency DUSs                               365,509             53,065                 --            418,574

Agency Debentures                            486,760             57,131                 --            543,891
                                          ----------         ----------         ----------         ----------

     Total                                $  901,666         $  112,253         $        9         $1,013,910
                                          ==========         ==========         ==========         ==========

                                                                  Gross              Gross
                                           Amortized         Unrealized         Unrealized
December 31, 2002 Collateral                    Cost              Gains             Losses         Fair Value
--------------------------------          ----------         ----------         ----------         ----------
Collateralized Mortgage Obligations:
   Floating-Rate REMICs                   $   19,081         $       11         $      186         $   18,906

   Fixed-Rate REMICs                          35,655                771                 --             36,426

Mortgage Backed Securities:
   Agency ARMs                                11,525                213                 26             11,712

   Agency Hybrid ARMs                         19,399                234                 35             19,598

   Agency DUSs                                    --                 --                 --                 --

Agency Debentures                                 --                 --                 --                 --
                                          ----------         ----------         ----------         ----------
     Total                                $   85,660         $    1,229         $      247         $   86,642
                                          ==========         ==========         ==========         ==========
December 31, 2002 Total Portfolio         $  987,326         $  113,482         $      256         $1,100,552
------------------------------------      ==========         ==========         ==========         ==========
</TABLE>


The breakdown of the Company's available-for-sale securities by category and
weighted average life distribution (stated in terms of amortized cost) is
summarized below ($ in 000's) based on management's prepayment assumptions:

<TABLE>

                                                            Due after 1    Due after 5
                                           Due in 1 year     through 5      through 10     Due after 10
March 31, 2002 Non -Collateral                or less          years          years           years           Total
------------------------------             -------------    -----------    -----------     ------------       -----
<S>                                          <C>             <C>             <C>             <C>             <C>
Collateralized Mortgage Obligations:
   Floating-Rate REMICs                      $  3,547        $  1,260         $    --            $ --        $  4,807

   Fixed-Rate REMICs                               --          10,316              --              --          10,316

Mortgage Backed Securities:
   Agency ARMs                                  6,275           3,602             893              56          10,826

   Agency Hybrid ARMs                             918          14,806              --              --          15,724

   Agency DUSs                                     --         212,685         178,859              --         391,544

Agency Debentures                                  --         506,658              --              --         506,658
                                             --------        --------        --------        --------        --------

     Total                                   $ 10,740        $749,327        $179,752        $     56        $939,875
                                             ========        ========        ========        ========        ========

                                                            Due after 1    Due after 5
                                           Due in 1 year     through 5      through 10     Due after 10
March 31, 2003 Collateral                     or less          years          years           years           Total
-------------------------                  -------------    -----------    -----------     ------------       -----

Collateralized Mortgage Obligations:
   Floating-Rate REMICs                    $      239      $   16,923         $    --            $ --      $   17,162

   Fixed-Rate REMICs                           22,421              --              --              --          22,421

Mortgage Backed Securities:
   Agency ARMs                                    465           4,425           3,685           1,490          10,065

   Agency Hybrid ARMs                              --          17,329              --              --          17,329

   Agency DUSs                                     --             --               --              --              --

Agency Debentures                                  --             --               --              --              --
                                           ----------      ----------      ----------      ----------      ----------

     Total                                 $   23,125      $   38,677      $    3,685      $    1,490      $   66,977
                                           ==========      ==========      ==========      ==========      ==========
March 31, 2003 Total Portfolio             $   33,865      $  788,004      $  183,437      $    1,546      $1,006,852
----------------------------------------   ==========      ==========      ==========      ==========      ==========

                                                            Due after 1    Due after 5
                                           Due in 1 year     through 5      through 10     Due after 10
December 31, 2002 Non-Collateral              or less          years          years           years           Total
--------------------------------           -------------    -----------    -----------     ------------       -----
Collateralized Mortgage Obligations:
   Floating-Rate REMICs                      $  4,854        $  1,432         $    --            $ --        $  6,286

   Fixed-Rate REMICs                              654          10,000              --              --          10,654

Mortgage Backed Securities:
   Agency ARMs                                  5,373           8,752              --              57          14,182

   Agency Hybrid ARMs                           1,074          17,201              --              --          18,275

   Agency DUSs                                     --         170,495         195,014              --         365,509

Agency Debentures                                  --         486,760              --              --         486,760
                                             --------        --------        --------        --------        --------
     Total                                   $ 11,955        $694,640        $195,014        $     57        $901,666
                                             ========        ========        ========        ========        ========

                                                            Due after 1    Due after 5
                                           Due in 1 year     through 5      through 10     Due after 10
December 31, 2002 Collateral                 or less           years          years           years           Total
--------------------------------           -------------    -----------    -----------     ------------       -----
Collateralized Mortgage Obligations:
   Floating-Rate REMICs                      $    546        $ 18,535         $    --            $ --       $ 19,081


   Fixed-Rate REMICs                           35,655              --              --              --         35,655

Mortgage Backed Securities:
   Agency ARMs                                    198           7,831           2,872             624         11,525

   Agency Hybrid ARMs                              --          19,399              --              --         19,399

   Agency DUSs                                     --              --              --              --             --

Agency Debentures                                  --              --              --              --             --
                                             --------        --------        --------        --------       --------
     Total                                   $ 36,399        $ 45,765        $  2,872        $    624       $ 85,660
                                             ========        ========        ========        ========       ========
December 31, 2002 Total Portfolio            $ 48,354        $740,405        $197,886        $    681       $987,326
---------------------------------            ========        ========        ========        ========       ========
</TABLE>

Actual maturities may differ from maturities shown above due to prepayments.

The breakdown of the Company's available-for-sale securities by category and
yield, before the result of hedges, is summarized below:

<TABLE>
                                                     Due after 1    Due after 5
                                    Due in 1 year     through 5      through 10     Due after 10               Yield after
March 31, 2003                         or less          years          years           years         Total       Hedging
--------------                      -------------    ----------     -----------     ------------     -----     -----------
<S>                                 <C>              <C>            <C>             <C>              <C>       <C>
Collateralized Mortgage
Obligations:
   Floating-Rate REMICs                  3.81%         1.96%            --%               --%         2.30%        2.30%

   Fixed-Rate REMICs                     6.51          6.71             --                --          6.57         5.12
Mortgage Backed Securities:
   Agency ARMs                           4.03          4.48           5.06              5.14          4.48         4.48

   Agency Hybrid ARMs                    5.86          4.92             --                --          4.95         4.95

   Agency DUSs                             --          6.61           5.84                --          6.28         1.40

Agency Debentures                          --          5.95             --                --          5.95         3.33
                                        ------        ------         ------            ------        ------       ------
     Total                               5.73%         6.00%          5.82%             5.14%         5.95%        2.73%
                                        ======        ======         ======            ======        ======       ======

                                                     Due after 1    Due after 5
                                    Due in 1 year     through 5      through 10     Due after 10               Yield after
March 31, 2002                         or less          years          years           years         Total       Hedging
--------------                      -------------    ----------     -----------     ------------     -----     -----------
Collateralized Mortgage
Obligations:
   Floating-Rate REMICs                  3.13%         2.63%            --%               --%         2.81%        2.81%
   Fixed-Rate REMICs
                                           --          6.50             --                --          6.50         6.50
Mortgage Backed Securities:
   Agency ARMs                           0.92          6.81             --              6.36          6.58         6.58

   Agency Hybrid ARMs                      --          5.06             --                --          5.06         5.06

   Agency DUSs                             --          7.29           6.20                --          6.50         1.88

Agency Debentures                          --          6.26           6.44                --          6.27         3.41
                                        ------        ------         ------            ------        ------       ------
     Total                               2.94%         6.13%          6.22%             6.36%         6.09%        3.30%
                                        ======        ======         ======            ======        ======       ======

</TABLE>

NOTE 5--REDEEMABLE COMMON SECURITIES

General

The Company is authorized to issue up to 150,000 Common Securities; as of March
31, 2003, and December 31, 2002, the Company had outstanding 53,011 Common
Securities, all of which were held by the Branch. The Bank has agreed with the
Company in the Contingent Support Agreement that, so long as any Series A
Preferred Securities are outstanding, it will maintain direct or indirect
ownership of 100% of the outstanding Common Securities.

Dividends

Holders of Common Securities are entitled to receive dividends when, as and if
declared by the Company's Board of Directors out of the Company's net income not
required to be applied to fund dividends with respect to the Series A Preferred
Securities; provided that so long as any Series A Preferred Securities are
outstanding, no dividends or other distributions (including redemptions and
purchases) may be made with respect to the Common Securities unless full
dividends on all Series A Preferred Securities have been paid for the current
and the two immediately preceding Dividend Periods (except during a Shift Period
if the Bank does not distribute dividends on its common stock).

Redemption Requirements

If the Bank's financial condition were to deteriorate with the consequence that
a Shift Event were to occur, substantially all the Common Securities would be
redeemed automatically without prior redemption of any Series A Preferred
Securities.

Voting Rights

Subject to the rights, if any, of the holders of Series A Preferred Securities
(in particular the right to remove and replace any Independent Director and to
elect an additional director, in certain circumstances), all voting rights are
vested in the Common Securities. The holders of Common Securities are entitled
to one vote per security.

Rights Upon Liquidation

In the event of the dissolution, liquidation or winding up of the Company,
whether voluntary or involuntary, after there shall have been paid or set aside
for the holders of all Series A Preferred Securities the full preferential
amounts to which such holders are entitled, the holders of Common Securities
will be entitled to share equally and ratably in any assets remaining after the
payment of all debts and liabilities. Upon a liquidation of the Company during a
Shift Period, the Common Securities will have a preference over the Series A
Preferred Securities to the extent, if any, that the liabilities of the Bank
(including any debt instruments, such as titres participatifs and prets
participatifs) have not been paid in full.

NOTE 6--RELATED PARTY TRANSACTIONS

The Company entered into a Services Agreement with the Branch on December 5,
1997, pursuant to which the Branch manages the securities portfolio of the
Company and performs other administrative functions. Expenses incurred under
such Agreement were $241,941 and $231,250 for the periods ended March 31, 2003,
and March 31, 2002, respectively. Under a specific allocation methodology, the
costs of personnel servicing the Company has increased. This allocation is based
on actual man-hours devoted to the activities of the Company and remains at arms
length.

The counterparty to all cross currency and interest rate swaps is BNP PARIBAS.
The fair value of these swap transactions is disclosed in Note 7.

The Branch also serves as the dividend paying agent, registrar, and transfer
agent with respect to the Series A Preferred Securities. The fee is $4,000 per
annum for these services.

The Company maintains a credit balance account with the Branch for clearing
certain transactions.

All of the Company's officers and employees and all but one of the members of
the Company's Board of Directors are officers and employees of the Branch or BNP
PARIBAS.

NOTE 7--FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair values of securities at March 31, 2003, and December 31, 2002, were
obtained from independent market sources and are summarized in Note 4. The
carrying values of securities, as shown in Note 4, approximates their fair
value. The fair value of the receivable arising from payment for securities,
pursuant to the application of SFAS 125, as replaced by SFAS 140, was
$67,590,683 and $86,641,699 at March 31, 2003, and December 31, 2002,
respectively.

The carrying value of cash and cash equivalents, accounts receivable, accrued
interest receivable, accrued expenses, and accounts payable approximates fair
value.

The fair value of the cross currency and interest rate swaps at March 31, 2003,
was $(86,934,857) and $(84,340,226) at December 31, 2002, and is reflected in
Other assets and Other liabilities.

NOTE 8--DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company maintains an overall risk management strategy that incorporates the
use of derivative instruments to hedge the interest rate risk and foreign
currency risk of fixed-income securities. As a result of interest rate or
exchange rate fluctuations, hedged fixed rate assets will appreciate or
depreciate in market value. The effect of this unrealized appreciation or
depreciation is expected to substantially offset the Company's gains or losses
on the derivative instruments that are linked to these hedged assets and
liabilities. The Company considers its use of derivatives to be a prudent method
of managing interest rate and foreign currency rate sensitivity, as it prevents
earnings from being exposed to undue risk posed by changes in interest and
exchange rates in compliance with the Company's policies.

Derivative instruments that are used as part of the Company's interest rate risk
management strategy include interest rate and cross currency swap contracts that
have indices related to the pricing of specific balance sheet assets and
liabilities. As a matter of policy, the Company does not use highly leveraged
derivative instruments for interest rate risk management. Interest rate swaps
generally involve the exchange of fixed and variable rate interest payments
between two parties, based on a common notional principal amount and maturity
date.

By using derivative instruments, the Company exposes itself to credit and market
risk. If a counterparty fails to fulfill its performance obligations under a
derivative contract, the Company's credit risk will equal the fair value gain in
a derivative. Generally, when the fair value of a derivative contract is
positive, this indicates that the counterparty owes the Company, thus creating a
repayment risk for the Company. When the fair value of a derivative contract is
negative, the Company owes the counterparty and, therefore, assumes no repayment
risk. The Company minimizes the credit (or repayment) risk in derivative
instruments by entering into transactions with BNP PARIBAS S.A. Consequently,
the Company does not require that collateral be provided by the counterparty.

Market risk is the adverse effect that a change in interest rates, currency or
implied volatility rates might have on the value of a financial instrument. The
Company does not expose itself to market risk by using derivatives but rather
reduces market risk since it uses derivatives only for fair value hedges that
effectively offset fluctuations in the fair value of the hedged items.

The Company formally documents all relationships between derivatives and hedged
items, as well as its risk management objectives and strategies for undertaking
various hedge transactions. This process includes linking all derivatives that
are designated as fair value or cash flow hedges to (1) assets and liabilities
on the balance sheet, (2) firm commitments or (3) forecasted transactions.


Fair Value Hedges

The Company mainly enters into interest rate swaps and cross currency interest
rate swaps to convert fixed rate Agency Debentures, Agency DUSs and Fixed Rate
REMICs into variable rate securities.

For the period ended March 31, 2003, the Company recognized a loss of $(29,345)
in current year earnings related to the ineffective portion of fair value
hedges. The Company also recognized $(304,062) in losses in relation to a cross
currency swap that no longer qualified as a fair value hedging instrument. The
fair value of the hedging instruments was $(88,313,899) at March 31, 2003, and
$(86,023,329) at December 31, 2002, and has been recorded in "Other
liabilities". It has been offset, except for the ineffective portion of the
hedge, by the revaluation of the respective hedged investment securities. The
fair value of the hedging instruments does not include accrued interest
receivable and payable, which are shown separately on the balance sheet.

Cash Flow Hedges

For the periods ended March 31, 2003, and March 31, 2002, the Company did not
enter into cash flow hedge transactions and it is not the intention of the
Company to use interest rate swaps to convert floating rate financial
instruments to fixed rate financial instruments as part of a cash flow hedge
strategy.

At March 31, 2003, and December 31, 2002, the Company had outstanding interest
rate and cross currency swap agreements with a notional principal amount of
$690,943,800 and $664,908,744, respectively.

Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

General

The Company was formed on October 14, 1997, and commenced operations on December
5, 1997, by the sale to qualified institutional buyers of 50,000 Series A
Preferred Securities and the sale to the Branch of 53,011 Common Securities.
Together, such sales raised net capital of $1,030,115,873, which the Company
used to purchase the Initial Portfolio from the Branch. On December 3, 2002, the
Branch contributed $3,000,000 of additional paid in capital.

The Company's sole business is to acquire, hold and manage debt instruments,
largely consisting of mortgage obligations, in the Portfolio, which generate net
income for distribution to securityholders. The Company's major source of income
is interest generated by the securities in the Portfolio.

Results of Operations

THREE-MONTH PERIOD

The following discussion pertains to the Three-month period ended March 31, 2003
(the "2003 Period") and the Three-month period ended March 31, 2002 (the "2002
Period").

For the 2003 Period and 2002 Period, the Company had revenues of $6,886,906 and
$8,288,571, respectively. These amounts consisted of interest income on the
investment securities, the unrealized gain/loss on hedged securities and the
derivatives used as hedging instruments and interest on deposits.

Interest income on the investment securities includes interest income on the
remaining securities in the Initial Portfolio, which are considered to be
collateral held by the Company and which are no longer recognized on the balance
sheet pursuant to new guidance in Statement of Financial Accounting Standards
No. 140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities, a replacement of SFAS 125" ("SFAS 140"), which
modified SFAS 125 in this respect, as explained in Note 3 to the financial
statements. The receivable for the consideration paid to the Branch for the
Initial Portfolio is recognized on the balance sheet and is an asset of similar
size as the remaining securities in the Initial Portfolio. The balance sheet
presentation results from compliance with SFAS 140 but does not reflect the
economic substance of the transaction, as further explained in the section on
the application of SFAS 125, as replaced by SFAS 140, below. For all economic
intents and purposes, the securities in the Initial Portfolio are owned by the
Company and managed as any other investment security, with related revenues
belonging to the Company and recorded as such in the income statement.

For the 2003 Period and 2002 Period, interest on the securities in the Portfolio
amounted to $11,970,537 and $12,182,562, respectively, representing an aggregate
yield of 5.95% and 6.09%, respectively. Interest earned and average yield with
respect to each category of security in the Portfolio was as follows (yield
based on average amortized cost):

                                          2003                        2002
                                 ---------------------     ---------------------
Floating-Rate REMICs............ $    129,580    2.30%     $    331,912    2.81%
Fixed-Rate REMICs............... $    606,983    6.57%     $    774,769    6.50%
Agency ARMs..................... $    239,752    4.48%     $    771,092    6.58%
Agency Hybrid ARMs.............. $    419,037    4.95%     $    841,268    5.06%
Agency DUS...................... $  5,868,197    6.28%     $  5,020,207    6.50%
Agency Debentures............... $  4,706,988    5.95%     $  4,503,314    6.27%


The yield on Agency Debentures is based on U.S. dollar denominated securities
which excludes the Japanese Yen denominated securities.

During the 2003 Period, the yields on the Agency DUSs, Agency Debentures and
Fixed Rate REMICs were approximately 1.40%, 3.33% and 5.12%, respectively, when
taking into account the income from the derivative products used to hedge these
securities. During the 2002 Period, the yields on the Agency DUSs and Agency
Debentures were approximately 1.88% and 3.64%, respectively, when taking into
account the income from the derivative products used to hedge these securities.
There were no derivative products used to hedge Fixed Rate REMICs in the first
quarter of 2002.

The average amortized cost of the Portfolio during the 2003 Period and the 2002
Period was $995,300,406 and $990,147,932, respectively. This reflects the
following prepayments and reinvestments:

PREPAYMENTS                                     2003                    2002
                                            -----------           --------------
Floating- Rate REMICs.................      $ 3,387,183           $ 8,987,641
Fixed-Rate REMICs.....................      $13,572,384           $    77,313
Agency ARMs...........................      $ 4,741,166           $ 7,984,508
Agency Hybrid ARMs....................      $ 4,534,619           $11,344,609
Agency DUS............................      $ 1,054,488           $   861,534
Agency Debentures.....................      $        --           $        --


REINVESTMENTS                                   2003                    2002
                                            -----------           --------------
Floating- Rate REMICs.................      $        --           $       --
Fixed-Rate REMICs.....................      $        --           $       --
Agency ARMs...........................      $        --           $       --
Agency Hybrid ARMs....................      $        --           $       --
Agency DUS                                  $27,089,545           $       --
Agency Debentures.....................      $20,038,400           $       --

The Company also recorded interest income from short-term investments for the
2003 Period and 2002 Period of $102,368 and $153,025, respectively. These
amounts are attributable to the interest earned on (i) interest payments on
securities in the Portfolio, (ii) prepayments of principal pending their
reinvestment and (iii) short-term investments classified as cash equivalents.

As of March 31, 2003, and December 31, 2002, as calculated by aggregate
amortized cost, approximately 49.68% and 50.70%, respectively, of the Portfolio
consisted of collateralized mortgage obligations (Floating-Rate REMICs and
Fixed-Rate REMICs) and mortgage backed securities (Agency ARMs, Agency Hybrid
ARMs and Agency DUSs), and approximately 50.32% and 49.30%, respectively,
consisted of Agency Debentures. As of March 31, 2003, and December 31, 2002,
floating rate securities accounted for approximately 7.54% and 8.99%,
respectively, of the Portfolio's collateralized mortgage obligations and
mortgage backed securities. In addition, a significant portion of the Agency
Debentures and the Agency DUSs are hedged so that in all but one case, the fixed
rate interest received on the bonds are converted into prevailing floating
rates.

The aggregate market value of the securities in the Portfolio as of March 31,
2003 and December 31, 2002, was higher than the amortized cost by approximately
11.48% and 11.47%, respectively, due to a net decrease in interest rates from
the time of their original purchase. For the hedged securities, changes in the
fair market value of both the securities and the derivatives used as hedging
instruments (cross currency and interest rate swaps) are reported in current
earnings in the Statements of Income, pursuant to application of SFAS 133 (Note
2). Unrealized gains and losses on the non-hedged securities are reported as a
component of "Other Comprehensive Income" (Note 2).

Operating expenses for the 2003 Period and the 2002 Period totaled $332,042 and
$293,964, respectively. Operating expenses consisted largely of fees paid to the
Branch under the Services Agreement, fees of Citibank as Trustee, consulting
fees and audit fees. Under a specific allocation methodology, the costs of
Branch personnel servicing the Company have increased. This allocation is based
on actual man-hours devoted to the activities of the Company and remains at arms
length.

The Company's net income in the 2003 Period was $6,250,803 and for the 2002
Period it was $7,994,607. As of March 31, 2003, the Company has neither declared
nor paid dividends during 2003 on either Series A Preferred Securities or Common
Securities.

Receivable Arising from Payment for Securities Pursuant to the Application of
SFAS 125 as Replaced by SFAS 140

Due to the potential consequences of a Shift Event (defined herein Item 1, Note
2), the Company's purchase of the Initial Portfolio (as defined in Item 1
herein) from the Branch did not meet certain SFAS 125, as replaced by SFAS 140,
sale accounting requirements. Accordingly, the Company recorded at December 5,
1997 a receivable for the consideration paid to the Branch for the Initial
Portfolio treated as collateral. As a legal and economic matter, however, there
is no such receivable since (a) neither the Bank nor the Branch has any
obligation to repay any part of the purchase price for the Initial Portfolio or
to repurchase or redeem any of the securities included therein, and (b) the
Company has no obligation to return any of such securities to the Bank or the
Branch (except in the limited circumstances and to the extent that the
occurrence of a Shift Event under the Charter would require the transfer of any
assets held by the Company at the time). As the securities in the Initial
Portfolio are paid, the receivable will be deemed to be realized by an amount
corresponding to the amount of the payments received. At March 31, 2003, and
December 31, 2002, the receivable arising from payment for securities amounted
to $66,977,034 and $85,660,254, respectively. The decrease in the amount of such
receivable between the two dates reflects the prepayment of securities in the
Initial Portfolio. The Company recognized the cash proceeds of such prepayments
as a reduction in the receivable. Such decreases in the receivable did not
affect the Company's results of operations or cash flow. Disclosures required
under SFAS 125, as replaced by SFAS 140, are included in Note 3.

Liquidity and Capital Resources

The objective of liquidity management is to ensure the availability of
sufficient cash flows to meet all of the Company's financial commitments. The
Company's sole liquidity needs are to acquire reinvestment securities as
original securities repay or prepay and to pay dividends on the Series A
Preferred Securities. The acquisition of reinvestment securities is funded with
the proceeds of principal repayments or prepayments on original securities, and
the payments of dividends on the Series A Preferred Securities are funded
through interest income from the securities in the Portfolio.

The low interest rate environment has adversely affected the Company's income.
The Company has not declared dividends on the Common Securities since June 2001
in order to retain earnings available for the payment of dividends to the
holders of the Series A Preferred Securities. Dividends to the Preferred
Securityholders may be paid out of (i) net income, determined without regard to
capital gains or losses, or (ii) amounts contributed by the Bank or the Branch
to the Company's capital. In the continued low interest rate environment in
2002, the Branch contributed $3,000,000 of additional paid in capital, which was
used to facilitate the semi-annual payment of dividends to the holders of the
Series A Preferred Securities.

Based on 2003 projected earnings, the Company may require an additional cash
contribution from the Branch to ensure payment of preferred dividends. The
Company cannot make any assurances that further decreases in interest rates or a
sustained low interest rate environment will not have a further adverse effect
on the Company's income.

BNP PARIBAS Group's total and Tier 1 risk-based capital ratios at March 31,
2003, were 11.6% and 8.7%, and at December 31, 2002, were 10.9% and 8.1%,
which are well above the minimum standards required by French banking
regulations, currently 8% for total risk-based capital and 4% for Tier 1
risk-based capital. A "shift event" would occur if BNP PARIBAS' risk-based
capital fell below these minimum standards of 8% and 4%, respectively. See Note
2 of the attached financial statements for a detailed explanation of "shift
events".

Critical Accounting Policies

Management believes its critical accounting policies relate to recognition and
valuation of financial instruments, as further defined in Item 1, Note 2.

Accounting and Reporting Developments

SFAS 133 requires that an entity measure all derivatives at fair value and
recognize those derivatives as either assets or liabilities on the balance
sheet. The change in the derivative's fair value is generally to be recognized
in current period earnings. However, if certain conditions are met, a derivative
may be specifically designated as a hedge of an exposure to changes in fair
value, variability of cash flows, or certain foreign currency exposures.

The Company has made an assessment of all their financial instruments and
concluded that it holds freestanding derivative instruments but no embedded
derivative instruments at March 31, 2003. As part of its asset management
activities the Company uses foreign exchange and interest rate swaps to modify
the interest rate and foreign exchange characteristics of existing assets. The
interest rate swaps have a high correlation between the instrument and the asset
being hedged, both at inception and throughout the hedge period.

All of the Company's outstanding hedging transactions are fair value hedges. For
the periods ended March 31, 2003, and March 31, 2002, the Company recognized
losses of $(29,345) and $(280,406), respectively, in current year earnings
related to the ineffective portion of fair value hedges. The fair value of these
hedging instruments was $(88,313,899) at March 31, 2003, and $(86,023,329) at
December 31, 2002, and has been recorded in "Other liabilities". It has been
offset, except for the ineffective portion of the hedge, by the revaluation of
the respective hedged investment securities. The fair value of the hedging
instruments does not include accrued interest receivable and payable, which are
shown separately on the balance sheet.

For a further discussion on derivative instruments and hedging activities, see
Note 8 to the financial statements.

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Interest Rate Sensitivity

The Company's principal market risk exposure is to changes in interest rates.
This exposure arises from its investments in collateralized mortgage
obligations, mortgage-backed securities, agency debentures, agency DUSs and
certain derivative instruments used by the Company to modify interest rate
exposure.

The outstanding principal amount and estimated fair value as of March 31, 2003,
by each category of investment, is depicted in Item 1.

Interest Rate Risk

The Company's income consists primarily of interest payments on collateralized
mortgage obligations, mortgage-backed securities, agency debentures and agency
DUSs. Currently, the Company uses derivative products to manage a portion of its
interest rate risk.

During the first quarter of 2003, the interest rate environment remained at a
low but stable level. Therefore, the interest income generated by the Portfolio
was stabilized at the level of income at the end of 2002. This situation has
affected the Company's income through the floating rate component of the
portfolio (floating-rate securities and fixed-rate securities converted to
floating-rate instruments through interest rate swaps). It is anticipated that
this situation may continue for the remainder of 2003, and the income will
remain linked to the evolution of the yield curve.

The Company regularly reviews its hedging requirements. In the future, the
Company expects to enter into additional swaps and unwind part or all of the
initial and any future swaps. This strategy is implemented in order to rebalance
the fixed and floating mix of interest obligations (including those arising as a
result of previous interest rate swaps entered into) and the fixed and floating
mix of interest payments.

The Company's interest rate management strategy will continue to be rebalanced
with any purchases of new investments. There can be no assurance, however, that
the Company's interest rate risk management strategies will be effective in this
regard.

The Company is a party to twenty-six interest rate swaps and six cross currency
swaps with BNP PARIBAS, as set out in the table below. In all but one of these
swaps, the Company pays a fixed coupon and receives floating rate payments on
the notional balances.

<TABLE>
<CAPTION>
   Fair Value at       Notional
  March 31, 2003       Balance
    (in 000's)         (in 000's)        Value Date         Maturity Date         Fixed Rate    Receive Rate
------------------    ------------   -----------------     ---------------       ------------  -------------------------------
<S>                      <C>         <C>                    <C>                  <C>           <C>
  $   (3,439)            42,000      November 25, 1998      March 26, 2008        JPY 1.75     US Three Month Libor Plus Six
                                                                                               Basis Points

      (6,418)            58,000      November 25, 1998      October 9, 2007       JPY 2.125    US Three Month Libor Plus Six
                                                                                               Basis Points

      (2,641)            18,897      November 25, 1998      August 25, 2008       US 6.15      US One Month Libor Plus Five
                                                                                               Basis Points

      (3,625)            23,246      May 25, 1999           May 25, 2009          US 6.23      US One Month Libor Plus One and
                                                                                               Half Basis Points

      (7,617)            50,000      February 12, 1999      March 5, 2007         US 6.68      US Three Month Libor Minus Two
                                                                                               Basis Points

      (7,816)            50,000      February 11, 1999      March 14, 2007        US 6.80      US Three Month Libor Minus Two
                                                                                               Basis Points

      (2,461)            30,000      March 29, 1999         October 9, 2007       JPY 2.125    US Three Month Libor Minus Two
                                                                                               and Half Basis Points

      (2,984)            26,400      April 6, 1999          October 9, 2007       JPY 2.125    US Three Month Libor Minus One
                                                                                               Basis Point

      (3,674)            25,778      June 25, 1999          June 25, 2009         US 6.06      US One Month Libor plus Three
                                                                                               and Half Basis Points

      (2,746)            20,542      February 25, 1999      February 25, 2009     US 5.95      US One Month Libor Plus Three
                                                                                               Basis Points

      (2,506)            15,525      July 1, 1999           June 25, 2009         US 6.39      US One Month Libor Plus Three
                                                                                               and Half Basis Points

      (6,093)            42,633      September 27, 1999     March  25, 2008       US 6.29      US One Month Libor Plus Five
                                                                                               Basis Points

      (2,151)            15,293      November 26, 1999      April 25, 2009        US 6.04      US One Month Libor Plus Four
                                                                                               Basis Points

      (3,625)            27,960      September 27, 1999     March 25, 2009        US 5.858     US One Month Libor Plus Four
                                                                                               Basis Points

      (1,068)             7,000      August 1, 2000         December 1, 2007      US 6.42      US One Month Libor

      (4,614)            29,002      August 1, 2000         October 1, 2006       US 7.20      US One Month Libor Minus Two
                                                                                               Basis Points

      (1,280)             8,220      June  26, 2000         October 1, 2007       US 6.68      US One Month Libor Plus One and
                                                                                               Half Basis Points

      (1,308)             9,230      June  26, 2000         October 1, 2008       US 6.26      US One Month Libor

         (19)            15,000      November 2, 2000       October 9, 2007       JPY 2.125    US Three Month Libor Minus Two
                                                                                               Basis Points

      (1,227)             7,426      October 2, 2000        June 1, 2007          US 7.007     US One Month Libor Minus Two
                                                                                               Basis Points

      (1,395)             7,538      October 2, 2000        July 1, 2007          US 7.405     US One Month Libor Minus Two
                                                                                               Basis Points

       1,379             18,000      January  17, 2001      March 26, 2008        JPY 1.750    U.S. 5.80

      (1,511)             9,709      March 25, 2001         October 25, 2007      US 6.94      US One Month Libor Plus Two
                                                                                               Basis Points

      (3,051)            19,335      September 4, 2001      October 1, 2006       US 7.20      US One Month Libor Plus Two
                                                                                               Basis Points

      (1,509)             9,667      October 2, 2001        October 1, 2006       US 7.20      US One Month Libor Plus Seven
                                                                                               Basis Points

      (1,499)             9,667      January 2, 2002        October 16, 2006      US 7.20      US One Month Libor Plus Ten
                                                                                               Basis Points

      (1,422)             9,201      May 1, 2002            October 25, 2007      US 6.63      US One Month Libor Plus One
                                                                                               Basis Point

      (1,610)            10,000      May 3, 2002            August 25, 2007       US 6.74      US One Month Libor Plus One
                                                                                               Basis Point

      (2,172)            26,500      August 25, 2002        August 25, 2007       US 4.90      US One Month Libor Plus Five
                                                                                               Basis Points

      (2,076)            12,841      September 25, 2002     June 25, 2007         US 7.007     US One Month Libor Plus Seven
                                                                                               Basis Points

      (1,204)             9,244      October 25, 2002       May 25, 2006          US 6.83      US One Month Libor Plus Seven
                                                                                               Basis Points

      (3,553)            27,090      March 21, 2003         February 25, 2009     US 5.945     US One Month Libor Plus Nine
  -----------         ---------                                                                Basis Points

  $  (86,935)         $ 690,944
  ===========         =========
</TABLE>


The fair value of the swap portfolio was $(86,934,857) and $(84,340,226) at
March 31, 2003, and December 31, 2002, respectively. The change in fair value
was primarily due to changes in prevailing market interest rates.

The main feature of the mortgage securities is their sensitivity to the
prepayment of mortgage loans, creating a contraction risk when interest rates
decline and an extension risk when interest rates increase. The estimate of the
prepayment rate is given either by the CPR (Conditional Prepayment Rate) or the
PSA (Public Securities Association) prepayment model. Because of this risk, the
securities are valued based on their average life rather than on their stated
maturity date. The prepayment risk is evaluated and analyzed as this impacts the
structure of the portfolio and the re-investment policy.

The breakdown of the Company's available-for-sale securities by category and
weighted average life distribution (stated in terms of amortized cost) is
summarized below ($ in 000's) based on management's prepayment assumptions (see
Note 4 under Item 1 for yield information):

<TABLE>
                                             Due        Due        Due       Due         Due        Due       Due
                                             In        after     after       after     after      after      after
At March 31, 2003 Non-Collateral            2003       2003       2004       2005       2006       2007       2008      Total
--------------------------------         --------   --------   --------   --------   --------   --------   --------   --------
<S>                                        <C>      <C>        <C>        <C>        <C>        <C>        <C>        <C>
Fixed Rate Instruments:
Fixed-Rate REMICs ......................  $    --    $    --    $    --   $    316   $ 10,000   $     --    $    --   $ 10,316
Agency DUS .............................       --         --         --    103,415     66,636    129,999     91,494    391,544
Agency Debentures ......................       --         --         --    122,167    323,895     60,596         --    506,658
                                          -------    -------    -------   --------   --------   --------    -------   --------
Total Fixed Rate Instruments ...........       --         --         --    225,898    400,531    190,595     91,494    908,518
                                          -------    -------    -------   --------   --------   --------    -------   --------

Floating-Rate Instruments:
Floating-Rate REMICs ...................    3,547         --      1,260         --         --         --         --      4,807
Agency ARMs ............................    2,406      3,869      3,602         --         --         --        949     10,826
Agency Hybrid ARMs .....................       --     10,477      1,318      3,302        627         --         --     15,724
                                          -------   --------   --------   --------   --------   --------    -------   --------
Total Floating Rate Instruments ........    5,953     14,346      6,180      3,302        627         --        949     31,357
                                          -------   --------   --------   --------   --------   --------    -------   --------

Total ..................................  $ 5,953   $ 14,346   $  6,180   $229,200   $401,158   $190,595    $92,443   $939,875
                                          =======   ========   ========   ========   ========   ========    =======   ========

                                             Due        Due        Due       Due         Due        Due       Due
                                             In        after     after       after     after      after      after
At March 31, 2003  Collateral               2003       2003       2004       2005       2006       2007       2008      Total
-----------------------------            --------   --------   --------   --------   --------   --------   --------   --------
Fixed Rate Instruments:
Fixed-Rate REMICs.......................  $22,421    $    --    $    --    $    --    $    --    $    --    $    -- $   22,421
Agency DUS..............................       --         --         --         --         --         --         --         --
Agency Debentures ......................       --         --         --         --         --         --         --         --
                                          -------    -------    -------   --------   --------   --------    ------- ----------
Total Fixed Rate Instruments............   22,421         --         --         --         --         --         --     22,421
                                          -------    -------    -------   --------   --------   --------    ------- ----------

Floating-Rate Instruments:
Floating-Rate REMICs....................      239      7,588      9,335         --         --         --         --     17,162
Agency ARMs.............................      249      4,359        282         --         --         --      5,175     10,065
Agency Hybrid ARMs......................       --        543     14,416         --      2,370         --         --     17,329
                                          -------    -------    -------   --------   --------   --------    ------- ----------
Total Floating Rate Instruments.........      488     12,490     24,033         --      2,370         --      5,175     44,556
                                          -------    -------    -------   --------   --------   --------    ------- ----------

Total...................................  $22,909    $12,490    $24,033   $     --    $2,370    $     --    $ 5,175 $   66,977
                                         ========   ========   ========   ========   ========   ========    ======= ==========
At March 31, 2003 Total Portfolio         $28,862    $26,836    $30,213   $229,200   $403,528   $190,595    $97,618 $1,006,852
                                         ========   ========   ========   ========   ========   ========    ======= ==========

                                             Due        Due        Due       Due         Due        Due       Due
                                             In        after     after       after     after      after      after
At December 31, 2002 Non-Collateral         2003       2003       2004       2005       2006       2007       2008      Total
-----------------------------------      --------   --------   --------   --------   --------   --------   --------   --------
Fixed Rate Instruments:
Fixed-Rate REMICs.......................     $654    $    --    $    --   $     --   $ 10,000   $     --    $    --   $ 10,654
Agency DUS..............................       --         --         --    123,994     46,501    114,986     80,028    365,509
Agency Debentures ......................       --         --         --    172,637    314,123         --         --    486,760
                                          -------    -------    -------   --------   --------   --------    -------   --------
Total Fixed Rate Instruments............      654         --         --    296,631    370,624   114,986      80,028    862,923
                                          -------    -------    -------   --------   --------   --------    -------   --------

Floating-Rate Instruments:
Floating-Rate REMICs....................    4,854         --      1,432         --         --         --         --      6,286
Agency ARMs.............................    5,373      3,791         --      4,961         --         --         57     14,182
Agency Hybrid ARMs......................    1,074     15,830      1,371         --         --         --         --     18,275
                                          -------    -------    -------   --------   --------   --------    -------   --------
Total Floating Rate Instruments.........   11,301     19,621      2,803      4,961         --         --         57     38,743
                                          -------    -------    -------   --------   --------   --------    -------   --------

Total...................................  $11,955    $19,621    $ 2,803   $301,592   $370,624   $114,986    $80,085   $901,666
                                          =======    =======    =======   ========   ========   ========    =======   ========

                                             Due        Due        Due       Due         Due        Due       Due
                                             In        after     after       after     after      after      after
At December 31, 2002 Collateral             2003       2003       2004       2005       2006       2007       2008      Total
-------------------------------          --------   --------   --------   --------   --------   --------   --------   --------
Fixed Rate Instruments:
Fixed-Rate REMICs.......................  $35,655    $    --    $    --   $     --   $     --   $     --    $    --   $ 35,655
Agency DUS..............................       --         --         --         --         --         --         --         --
Agency Debentures ......................       --         --         --         --         --         --         --         --
                                               --         --         --         --         --         --         --         --
                                          -------    -------    -------   --------   --------   --------    -------   --------
Total Fixed Rate Instruments............   35,655         --         --         --         --         --         --     35,655
                                          -------    -------    -------   --------   --------   --------    -------   --------

Floating-Rate Instruments:
Floating-Rate REMICs....................      546      8,331     10,204         --         --         --         --     19,081
Agency ARMs.............................      198      5,805      1,322        331        373      1,384      2,112     11,525
Agency Hybrid ARMs......................       --     13,622         --      5,777         --         --         --     19,399
                                          -------    -------    -------   --------   --------   --------    -------   --------
Total Floating Rate Instruments.........      744     27,758     11,526      6,108        373      1,384      2,112     50,005
                                          -------    -------    -------   --------   --------   --------    -------   --------

Total...................................  $36,399    $27,758    $11,526   $ 6,108    $    373   $  1,384    $ 2,112   $ 85,660
                                          =======    =======    =======   ========   ========   ========    =======   ========
At December 31, 2002 Total Portfolio      $48,354    $47,379    $14,329   $307,700   $370,997   $116,370    $82,197   $987,326
                                          =======    =======    =======   ========   ========   ========    =======   ========
</TABLE>

Actual maturities may differ from maturities shown above due to prepayments.

Item 4.

CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this quarterly report for the period
ended March 31, 2003, the Company carried out an evaluation under the
supervision and with the participation of the Company's management, including
the President and Chief Financial Officer, of the effectiveness of the design
and operation of the Company's disclosure controls and procedures. There are
inherent limitations to the effectiveness of any system of disclosure controls
and procedures, including the possibility of human error and the circumvention
or overriding of the controls and procedures. Accordingly, even effective
disclosure controls and procedures can only provide reasonable assurance of
achieving their control objectives. Based upon and as of the date of each of the
Company's evaluations, the President and Chief Financial Officer concluded that
the disclosure controls and procedures are effective in all material respects to
ensure that information required to be disclosed in the reports the Company
files and submits under the Exchange Act is recorded, processed, summarized and
reported as and when required. Such officers also confirm that there have been
no changes in the Company's internal controls or in other factors that could
significantly affect internal controls subsequent to the date of each of the
evaluations referred to above.

Part II

Item 1.

LEGAL PROCEEDINGS

None.

Item 2.

CHANGES IN SECURITIES AND USE OF THE PROCEEDS

None.

Item 3.

DEFAULTS UPON SENIOR SECURITIES

None.

Item 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

None.

Item 5.

OTHER INFORMATION

None.

Item 6.

EXHIBITS AND CURRENT REPORTS ON FORM 8-K

         A) Exhibits:

                  11) Computation of net income per common security

                  12) (a) Computation of ratio of earnings to fixed charges

                      (b) Computation of ratio of earnings to fixed charges and
                          preferred security dividends

                99.1) Certification, Olivier Meisel

                99.2) Certification, Thomas Clyne

         B) Reports on Form 8-K: NONE


<PAGE>
                                    Signature


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.

                                         BNP U.S. FUNDING L.L.C.
                                         -----------------------
                                                           Registrant



Date:  May 15, 2003                      By  /s/ Olivier Meisel
                                             ----------------------------------
                                                  Olivier Meisel
                                                  President and Director

Date: May 15, 2003                       By  /s/ Thomas Clyne
                                             ----------------------------------
                                                  Thomas Clyne
                                                  Chief Financial Officer
<PAGE>


                                  Certification
                Pursuant to Section 302 of the Sarbanes-Oxley Act
                of 2002 (A separate certification is required for
                                  each officer)


I, Thomas Clyne, certify that:

1. I have reviewed this report on Form 10-Q of BNP U.S. Funding L.L.C.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this report
(the "Evaluation Date"); and

c) presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation
Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: May 15, 2003
                                                  /s/ Thomas Clyne
                                                  ------------------------------
                                                  Title: Chief Financial Officer




<PAGE>


                                  Certification
                Pursuant to Section 302 of the Sarbanes-Oxley Act
                of 2002 (A separate certification is required for
                                  each officer)


I, Olivier Meisel, certify that:

1. I have reviewed this report on Form 10-Q of BNP U.S. Funding L.L.C.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this report
(the "Evaluation Date"); and

c) presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation
Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: May 15, 2003
                                                   /s/ Olivier Meisel
                                                   -----------------------------
                                                   Title: President and Director