UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   -----------

                                    FORM 10-Q
                                   -----------

[X] QUARTERLY REPORT PURSUANT TO SECTION 12 OR 15(D) OF THE SECURITIES EXCHANGE
                ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 2004

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934

            FOR THE TRANSITION PERIOD FROM ___________ TO ___________

                                   -----------

                         COMMISSION FILE NUMBER 0-19564
                                   -----------

                       MUNICIPAL SECURITIES PURCHASE, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                   DELAWARE                                13-3633082
---------------------------------------------    -------------------------------
(State or other jurisdiction incorporation or    (I.R.S. Employer Identification
                organization)                                No.),

201 HIGH RIDGE ROAD, STAMFORD, CONNECTICUT     06927        (203) 357-4000
--------------------------------------------- ---------- -----------------------
(Address of principal executive offices)      (Zip Code) (Registrant's telephone
                                                           number,including area
                                                                  code)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

                                      NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                               TITLE OF EACH CLASS
                               -------------------

                    COMMON STOCK, PAR VALUE $10.00 PER SHARE

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  12 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 12b2). Yes     No  X .
                                        ---    ---

Aggregate market value of the outstanding common equity held by nonaffiliates of
the  registrant  as of the last business day of the  registrant's  most recently
completed second fiscal quarter: None.

At July 29, 2004, 10 shares of common stock with a par value of $10.00 per share
were outstanding.

registrant meets the conditions set forth in general instruction H(1)(a) and (b)
of Form 10-Q and is therefore filing this Form 10-Q with the reduced  disclosure
format.


<PAGE>


                       MUNICIPAL SECURITIES PURCHASE, INC.

                                                                            PAGE


PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements:
                Statements of Financial Position                               1
                Statements of Income                                           2
                Statements of Changes in Shareowner's Equity                   3
                Statements of Cash Flows                                       4
                Notes to Unaudited Interim Financial Statements                5


Item 2.    Management's Discussion and Analysis of Results of Operations and
           Financial Condition                                                 6

Item 4.    Controls and Procedures                                             8


PART II.      OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K                                    9
Signatures                                                                    10



<PAGE>

                          PART I. FINANCIAL INFORMATION




<TABLE>
<CAPTION>
ITEM 1. FINANCIAL STATEMENTS



                                         MUNICIPAL SECURITIES PURCHASE, INC.

                                          Statements of Financial Position

                                                                                   JUNE 30,         DECEMBER 31,
                                                                                     2004               2003
                                                                               -----------------  -----------------
                                           ASSETS                                (Unaudited)

<S>                                                                                 <C>                <C>
Liquidity fees receivable                                                           $ 1,655,240        $ 1,572,969
Due from GE Capital                                                                   5,981,354         39,284,435
                                                                               -----------------  -----------------
             Total assets                                                           $ 7,636,594        $40,857,404
                                                                               =================  =================

               LIABILITIES AND SHAREOWNER'S EQUITY

    Deferred liquidity fee income                                                    $  690,749         $  701,593
    Accounts payable and accrued expenses                                                69,150             69,148
    Taxes payable                                                                     2,262,071          2,262,071
                                                                               -----------------  -----------------
             Total liabilities                                                        3,021,970          3,032,812
                                                                               -----------------  -----------------

    Common stock, par value $10.00 per share. Authorized,
      issued, and outstanding 10 shares                                                     100                100
    Additional paid-in capital                                                          822,145            822,145
    Retained earnings                                                                 3,792,379         37,002,347
                                                                               -----------------  -----------------
             Total shareowner's equity                                                4,614,624         37,824,592
                                                                               -----------------  -----------------
             Total liabilities and shareowner's equity                              $ 7,636,594        $40,857,404
                                                                               =================  =================

</TABLE>

See accompanying notes to unaudited interim financial statements.


                                      - 1 -
<PAGE>

<TABLE>
<CAPTION>
                                         MUNICIPAL SECURITIES PURCHASE, INC.

                                                Statements of Income

                                                     (Unaudited)

                                                        -----------------------------  -----------------------------
                                                             THREE-MONTHS ENDED              SIX-MONTHS ENDED
                                                                    JUNE 30                        JUNE 30
                                                        -----------------------------  -----------------------------
                                                            2004            2003           2004            2003
                                                        -------------   -------------  -------------   -------------

<S>                                                       <C>             <C>            <C>             <C>
Liquidity fee income                                      $1,616,357      $2,362,602     $3,195,199      $4,624,816
                                                        -------------   -------------  -------------   -------------
             Total revenues                                1,616,357       2,362,602      3,195,199       4,624,816
                                                        -------------   -------------  -------------   -------------

General and administrative expenses                           60,000         203,073        120,000         387,420
GE capital commitment fees                                    57,223          70,635        114,019         140,373
                                                        -------------   -------------  -------------   -------------
             Total operating expenses                        117,223         273,708        234,019         527,793
                                                        -------------   -------------  -------------   -------------

             Income before provision for income taxes      1,499,134       2,088,894      2,961,180       4,097,023
                                                        -------------   -------------  -------------   -------------

Income tax expense:
    Federal                                                  487,968         679,935        963,865       1,333,581
    State and local                                          104,940         146,223        207,283         286,792
                                                        -------------   -------------  -------------   -------------

             Total income tax expense                        592,908         826,158      1,171,148       1,620,373
                                                        -------------   -------------  -------------   -------------

             Net income                                    $ 906,226      $1,262,736     $1,790,032      $2,476,650
                                                        =============   =============  =============   =============

</TABLE>


See accompanying notes to unaudited interim financial statements.



                                      - 2 -
<PAGE>

<TABLE>
<CAPTION>
                                         MUNICIPAL SECURITIES PURCHASE, INC.

                                     Statement of Changes in Shareowner's Equity

                                           Six-months ended June 30, 2004


                                                                     ADDITIONAL
                                                     COMMON            PAID-IN        RETAINED
                                                      STOCK            CAPITAL        EARNINGS             TOTAL

<S>                                                    <C>            <C>            <C>               <C>
Balance, December 31, 2002                             $  100         $ 822,145      $32,265,191       $33,087,436
Net income                                                  -                 -        4,737,156         4,737,156
                                                 -------------   ---------------  ---------------   ---------------
Balance, December 31, 2003                                100           822,145       37,002,347        37,824,592
             Dividends paid (unaudited)                     -                 -      (35,000,000)      (35,000,000)
             Net income (unaudited)                         -                 -        1,790,032         1,790,032
                                                 -------------   ---------------  ---------------   ---------------
Balance, June 30, 2004 (unaudited)                     $  100         $ 822,145       $3,792,379        $4,614,624
                                                 =============   ===============  ===============   ===============
</TABLE>





See accompanying notes to unaudited interim financial statements.



                                      - 3 -
<PAGE>

<TABLE>
<CAPTION>
                                         MUNICIPAL SECURITIES PURCHASE, INC.

                                               Statement of Cash Flows

                                                     (Unaudited)


                                                                               ------------------------------------
                                                                                        SIX-MONTHS ENDED
                                                                                             JUNE 30
                                                                               ------------------------------------
                                                                                     2004               2003
                                                                               -----------------  -----------------

Operating activities:
<S>                                                                                 <C>                <C>
      Net income                                                                    $ 1,790,032        $ 2,476,650
    Adjustments to reconcile net income to net cash
      provided by operating activities:
        Change in taxes payable                                                               -           (238,678)
        Change in due from GE Capital                                                33,303,081         (2,558,636)
        Change in due to affiliates                                                           -            858,112
        Change in liquidity fees receivable                                             (82,271)          (561,881)
        Change in deferred liquidity fee income                                         (10,844)          (127,659)
        Change in accounts payable and accrued expenses                                       2            152,092
                                                                               -----------------  -----------------
           Cash from operating activities                                            35,000,000                  -

Financing activities:
    Dividends paid                                                                  (35,000,000)                 -
                                                                               -----------------  -----------------
           Cash used for financing activities                                       (35,000,000)                 -

Net change  in cash and cash equivalents                                                      -                  -
Cash and cash equivalents at beginning of period                                              -                  -
                                                                               -----------------  -----------------
Cash and cash equivalents at the end of period                                          $     -            $     -
                                                                               =================  =================
</TABLE>


See accompanying notes to unaudited interim financial statements.


                                      - 4 -
<PAGE>

                       MUNICIPAL SECURITIES PURCHASE, INC.

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

(1)           BUSINESS

              Municipal Securities Purchase, Inc. (Municipal-SPI or the Company)
              is a  wholly-owned  subsidiary  of GE Funding  Holdings  Inc. (the
              Parent), which is a wholly-owned subsidiary of GEI, Inc., which in
              turn is wholly-owned by General Electric  Capital  Corporation (GE
              Capital), the ultimate parent of which is General Electric Company
              (GE).  Until the fourth quarter of 2003, the name of Municipal-SPI
              was  FGIC  Securities  Purchase,   Inc.   Municipal-SPI   provides
              liquidity for certain floating rate municipal  securities  whereby
              Municipal-SPI  will,  under certain  circumstances,  purchase such
              securities  in the event they are tendered by the holders  thereof
              as permitted under the terms of the respective bond indentures. As
              of June 30, 2004 Municipal-SPI had approximately $3.7 billion (par
              amount  and   interest)  of  potential   obligations   under  such
              arrangements.   The   liquidity   facilities   have  a   term   of
              approximately five years (subject to renewal) or less if the bonds
              are no longer  outstanding.  In order to obtain  funds to purchase
              the  securities,  in  the  event  such  purchases  are  necessary,
              Municipal-SPI  has entered into standby  loan  agreements  with GE
              Capital  totaling  $3.7 billion as of June 30, 2004 under which GE
              Capital  is  irrevocably  obligated  to lend  funds as needed  for
              Municipal-SPI   to   purchase   the   securities.    Since   2002,
              Municipal-SPI  has not provided any new liquidity  facilities  and
              management  of the Company will  continue to reassess the decision
              in the future.

(2)           SIGNIFICANT ACCOUNTING POLICIES

              The  preparation  of  financial   statements  in  conformity  with
              generally accepted  accounting  principles  requires management to
              make estimates and assumptions  that affect  reported  amounts and
              related  disclosures.  Actual  results  could  differ  from  those
              estimates.

              The  unaudited  interim  financial   statements  of  Municipal-SPI
              contained in this report reflect all normal recurring  adjustments
              necessary,  in the opinion of management,  for a fair statement of
              the results of operations, financial position and cash flows.

              These unaudited  interim  financial  statements  should be read in
              conjunction  with  the  financial  statements  and  related  notes
              included in the 2003 Form 10-K.

(3)           INCOME TAXES

              Under an  intercompany  tax-sharing  agreement  with  its  parent,
              Municipal-SPI is included in the  consolidated  federal income tax
              return that GE company files.  Municipal-SPI provides for taxes as
              if it filed a separate tax return.


                                      - 5 -
<PAGE>




1.            ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  RESULTS  OF
              OPERATIONS AND FINANCIAL CONDITION

2.            RESULTS OF OPERATIONS

              During 2003 and the  six-months  ended June 30, 2004,  the Company
              did not commit to any new liquidity facilities.

              The total  capacity  of  Municipal-SPI's  liquidity  facility  has
              amounted to $7 billion  since  inception.  At June 30,  2004,  the
              Company had remaining capacity of $0.1 billion.

              Municipal-SPI  earned  liquidity  fees of $3.2  million  and  $4.6
              million  during  the  six-months  ended  June 30,  2004 and  2003,
              respectively  and $1.6  million  and $2.4  million  for the  three
              months ended June 30, 2004 and 2003, respectively. The decrease in
              liquidity fees from 2003 to 2004 was primarily due to the maturity
              of 12  contracts  during  the  last two  quarters  of 2003 and the
              maturity  of 5  contracts  during the first  quarter of 2004.  The
              total liquidity facility in force as of June 30, 2004 and December
              31, 2003 was $3.7 and $3.8 billion, respectively.

              OPERATING EXPENSES

              Municipal-SPI  incurred  $0.2  million  and $0.5  million of total
              operating  expenses during the six-months  ended June 30, 2004 and
              2003,  respectively  and $0.1  million  and $0.3  million of total
              operating expenses during the three-months ended June 30, 2004 and
              2003,  respectively.  Included in total  operating  expenses  were
              commitment  fees  owed  to GE  Capital,  which  are  based  on the
              outstanding par in force on each of the liquidity  facilities at a
              rate of 0.625 basis  points.  Commitment  fees were  $114,019  and
              $140,373  for  the  six-months  ended  June  30,  2004  and  2003,
              respectively  and $57,223 and $70,635 for the  three-months  ended
              June 30, 2004 and 2003,  respectively.  The decrease in commitment
              fees from 2003 to 2004 corresponds with the respective fluctuation
              in  liquidity  fees  earned  which are also  based upon the par in
              force outstanding.  Total operating expenses also includes general
              and administrative  expenses,  which are principally  comprised of
              intercompany   overhead  expense  allocations.   Such  allocations
              decreased from $372,701 to $120,000  during the  six-months  ended
              June 30, 2003 and 2004,  respectively due to a continued  decrease
              in  allocated  expenses  resulting  from the  decline in number of
              liquidity facilities written.

              INCOME TAX EXPENSE

              The effective  Federal tax rate during the  six-months  ended June
              30, 2004 and 2003 was equal to the Federal  corporate  tax rate of
              35% giving consideration to the benefit for the deduction of state
              taxes of 7%.

              CAPITAL RESOURCES AND LIQUIDITY

              Liquidity is a measure of the ability to generate  sufficient cash
              to meet cash  obligations  as they come due.  The  largest  use of
              potential  liquidity  would be if the  Company  were  required  to
              purchase all  securities  under the liquidity  facilities  issued.
              Since inception, the Company has not been required to purchase any
              securities.   If  the  Company  were  required  to  purchase  such
              securities, Municipal-SPI would draw on the standby loan agreement
              with GE Capital.  Since the standby loan agreement with GE Capital
              is  irrevocable  during the period the  liquidity  agreements  are
              outstanding  the Company  believes it has sufficient  liquidity in
              the event that it is required to fund any draw under the liquidity
              facilities issued.


                                      - 6 -
<PAGE>


              Municipal-SPI's other primary source of cash is from liquidity fee
              income.  The Company  believes  that such income and access to the
              intercompany  receivable from GE Capital ($6.0 million at June 30,
              2004)  is  sufficient  to  fund  the  general  and  administration
              expenses of the Company.

              Net cash provided by operating  activities was $35 million for the
              six-months ended June 30, 2004 as the Company  collected a portion
              of the intercompany  receivable from GE Capital.  The Company used
              the cash to pay a $35 million  dividend to the Parent resulting in
              a $35 million  financing cash outflow during the six-months  ended
              June 30,  2004.  There  were no cash flows  related  to  investing
              activities for the period ended June 30, 2004.


                                      - 7 -
<PAGE>

3.            ITEM 4. CONTROLS AND PROCEDURES

              Under the  direction of our Chairman of the Board  (serving as the
              principal  executive  officer)  and Chief  Financial  Officer,  we
              evaluated  our  disclosure  controls and  procedures  and internal
              control  over  financial  reporting  and  concluded  that  (i) our
              disclosure  controls and procedures  were effective as of June 30,
              2004,  and (ii) no  change  in  internal  control  over  financial
              reporting  occurred  during the quarter ended June 30, 2004,  that
              has  materially  affected,  or is reasonably  likely to materially
              affect, such internal control over financial reporting.


                                      - 8 -
<PAGE>

                           PART II - OTHER INFORMATION

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

         a) Exhibits

              Exhibit  31(a) -  Certifications  of Principal  Executive  Officer
              Pursuant to Rule 13a-14(a) under the Exchange Act

              Exhibit  31(b) -  Certifications  of Principal  Financial  Officer
              Pursuant to Rule 13a-14(a) under the Exchange Act

              Exhibit 32 - Certifications Pursuant to 18 U.S.C. Section 1350


         b) Reports on Form 8-K during the quarter ended June 30, 2004

              None


                                      - 9 -
<PAGE>

                                   SIGNATURES


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

                       Municipal Securities Purchase, Inc.
                                  (Registrant)


July 30, 2004                                           /s/ Brian Wenzel
-------------                                           ----------------
Date                                               Brian Wenzel
                                                   Chairman
                                                   (principal executive officer)


July 30, 2004                                           /s/ Kathleen Gan
-------------                                           ----------------
Date                                               Kathleen Gan
                                                   Vice President and Treasurer
                                                   (principal financial and
                                                   accounting officer)



                                     - 10 -
<PAGE>


                                                                   EXHIBIT 31(A)
                                 CERTIFICATIONS
I, Brian Wenzel, certified that:

(1)      I have  reviewed  this  report  on Form  10-Q of  Municipal  Securities
         Purchase, Inc. (the Company);

(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 quarterly 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  officer and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for  the
         registrant and have:

         (a)  Designated such disclosure controls and procedures, or caused such
              disclosure  controls  and  procedures  to be  designed  under  our
              supervision,  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   and  presented  in  this  report  our
              conclusions about the effectiveness of the disclosure controls and
              procedures,  as of the end of the period  covered  by this  report
              based on such evaluation; and

         (c)  Disclosed in this report and change in the  registrant's  internal
              control  over  financial   reporting  that  occurred   during  the
              registrant's  most  recent  fiscal  quarter  that  has  materially
              affected,  or is  reasonably  likely  to  materially  affect,  the
              registrant's internal control over financial reporting; and

(5)      The registrant's other certifying  officer and I have disclosed,  based
         on our most  recent  evaluation  of  internal  control  over  financial
         reporting,  to the registrant's auditors and the audit committee of the
         registrant's board of directors;

         (a)  All significant deficiencies and material weaknesses in the design
              or operation of internal  control over financial  reporting  which
              are reasonably likely to adversely affect the registrant's ability
              to record,  process,  summarize and report financial  information;
              and

         (b)  Any fraud,  whether or not material,  that involves  management or
              other  employees who have a significant  role in the  registrant's
              internal control over financial reporting.

Date:  July 30, 2004

/s/ Brian Wenzel
----------------
Brian Wenzel
Chairman
(principal executive officer)


<PAGE>

                                                                   EXHIBIT 31(B)
                                 CERTIFICATIONS
I, Kathleen Gan, certified that:

(1)      I have  reviewed  this  report  on Form  10-Q of  Municipal  Securities
         Purchase, Inc. (the Company);

(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 quarterly 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  officer and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for  the
         registrant and have:

         (a)  Designated such disclosure controls and procedures, or caused such
              disclosure  controls  and  procedures  to be  designed  under  our
              supervision,  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   and  presented  in  this  report  our
              conclusions about the effectiveness of the disclosure controls and
              procedures,  as of the end of the period  covered  by this  report
              based on such evaluation; and

         (c)  Disclosed in this report and change in the  registrant's  internal
              control  over  financial   reporting  that  occurred   during  the
              registrant's  most  recent  fiscal  quarter  that  has  materially
              affected,  or is  reasonably  likely  to  materially  affect,  the
              registrant's internal control over financial reporting; and

(5)      The registrant's other certifying  officer and I have disclosed,  based
         on our most  recent  evaluation  of  internal  control  over  financial
         reporting,  to the registrant's auditors and the audit committee of the
         registrant's board of directors;

         (a)  All significant deficiencies and material weaknesses in the design
              or operation of internal  control over financial  reporting  which
              are reasonably likely to adversely affect the registrant's ability
              to record,  process,  summarize and report financial  information;
              and

         (b)  Any fraud,  whether or not material,  that involves  management or
              other  employees who have a significant  role in the  registrant's
              internal control over financial reporting.

Date:  July 30, 2004

/s/ Kathleen Gan
----------------
Kathleen Gan
Vice President and Treasurer
(principal financial and accounting officer)


<PAGE>
                                                                      EXHIBIT 32

                CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350


In connection with the Quarterly Report of Municipal Securities  Purchase,  Inc.
(the  registrant) on Form 10-Q for the period ended June 30, 2004, as filed with
the  Securities  and Exchange  Commission on the date hereof (the  report),  we,
Brian  Wenzel and  Kathleen  Gan,  Chairman and Vice  President  and  Treasurer,
respectively,  of the registrant,  herby certify  pursuant to 18 U.S.C.  Section
1350, that to our knowledge:

(1)      The report fully complies with the requirements of Section 13(a) or 15
         (d) of the Securities Exchange Act of 1934, as amended; and

(2)      The  information  contained  in  the  report  fairly  presents,  in all
         material respects, the financial condition and results of operations of
         the registrant.




Date:  July 30, 2004

/s/ Brian Wenzel
----------------

Brian Wenzel
Chairman
(principal executive officer)



Date:  July 30, 2004

/s/ Kathleen Gan
----------------

Kathleen Gan
Vice President and Treasurer
(principal financial and accounting officer)


<PAGE>