FILE NO: 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
FORM S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact name of Trust: VOYAGEUR UNIT INVESTMENT TRUST,
Series 10
B. Name of Depositor: VOYAGEUR FUND MANAGERS, INC.
C. Complete address of Depositor's principal executive offices:
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
D. Name and complete address of agents for service:
VOYAGEUR FUND MANAGERS, INC. CHAPMAN AND CUTLER
Attention: Thomas J. Abood Attention: Mark J. Kneedy
90 South Seventh Street, Suite 4400 111 West Monroe Street
Minneapolis, Minnesota 55402 Chicago, Illinois 60603
E. Title and amount of securities being registered: An indefinite number of
Units of proportionate interest pursuant to Rule 24f-2 under the
Investment Company Act of 1940
F. Proposed maximum offering price to the public of the securities being
registered: Indefinite
G. Amount of registration fee: $0.00
H. Approximate date of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT
/ / Check box if it is proposed that this filing will become effective
pursuant to Rule 487
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The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
VOYAGEUR UNIT INVESTMENT TRUST
SERIES 10
CROSS REFERENCE SHEET
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction
1 as to Prospectus on Form S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust )
(b) Title of securities issued ) Prospectus Front Cover Page
2. Name and address of Depositor ) Introduction
) Summary of Essential Financial
) Information
) Trust Administration
3. Name and address of Trustee ) Introduction
) Summary of Essential Financial
) Information
) Trust Administration
4. Name and address of principal ) Underwriting
underwriter )
5. Organization of trust ) Introduction
6. Execution and termination of ) Introduction
Trust Indenture and Agreement ) Trust Administration
7. Changes of Name ) *
8. Fiscal year ) *
9. Material Litigation ) *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. General information regarding ) Introduction
trust's securities and rights ) Rights of Unitholders
of security holders ) The Fund
) Trust Administration
11. Type of securities comprising ) Introduction
units ) The Fund
) The Trusts
12. Certain information regarding ) *
periodic payment certificates )
13. (a) Load, fees, charges and ) Introduction
expenses ) Summary of Essential Financial
) Information
) Public Offering
) Trust Information
) Trust Administration
(b) Certain information regard- ) *
ing periodic payment plan )
certificates )
(c) Certain percentages ) Introduction
) Summary of Essential Financial
) Information
) Public Offering
(d) Certain other fees, ) Public Offering
expenses or charges ) Trust Administration
payable by holders ) Trust Operating Expenses
(e) Certain profits to be ) Public Offering
received by depositor, ) Underwriting
principal underwriter, ) The Trusts
trustee or affiliated persons) Trust Operating Expenses
(f) Ratio of annual charges ) *
to income )
14. Issuance of trust's securities ) The Fund
15. Receipt and handling of payments ) *
from purchasers )
16. Acquisition and disposition of ) Introduction
underlying securities ) Rights of Unitholders
) Trust Administration
17. Withdrawal or redemption ) Rights of Unitholders
) Trust Administration
18. (a) Receipt and disposition ) Introduction
of income ) Rights of Unitholders
(b) Reinvestment of distribu- ) Rights of Unitholders
tions )
(c) Reserves or special funds )
) Trust Administration
(d) Schedule of distributions ) Summary of Essential Financial
Information
19. Records, accounts and reports ) Rights of Unitholders
) Trust Administration
20. Certain miscellaneous provisions ) Trust Administration
of trust agreement )
21. Loans to security holders ) *
22. Limitations on liability )
) Trust Administration
23. Bonding arrangements ) *
24. Other material provisions of ) *
trust indenture or agreement )
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of Depositor ) Trust Administration
26. Fees received by Depositor ) Trust Administration
27. Business of Depositor ) Trust Administration
28. Certain information as to )
officials and affiliated ) *
persons of Depositor )
29. Companies owning securities of ) *
Depositor )
30. Controlling persons of Depositor ) *
31. Compensation of Directors ) *
32. Compensation of Directors ) *
33. Compensation of Employees ) *
34. Compensation to other persons ) Public Offering
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
35. Distribution of trust's ) Rights of Unitholders
securities )
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to ) *
distribute )
38. (a) Method of distribution )
(b) Underwriting agreements ) Underwriting
(c) Selling agreements )
39. (a) Organization of principal )
underwriter )
) Trust Administration
(b) N.A.S.D. membership by )
principal underwriter )
40. Certain fees received by ) *
principal underwriter )
41. (a) Business of principal ) Trust Administration
underwriter )
(b) Branch offices of principal ) *
underwriter )
(c) Salesmen of principal ) *
underwriter )
42. Ownership of securities of the ) *
trust )
43. Certain brokerage commissions )
received by principal ) *
underwriter )
44. (a) Method of valuation ) Introduction
) Summary of Essential Financial
) Information
) Public Offering
) Trust Administration
) Rights of Unitholders
(b) Schedule as to offering ) *
price )
(c) Variation in offering price ) Public Offering
to certain persons )
45. Suspension of redemption rights ) Rights of Unitholders
46. (a) Redemption valuation ) Rights of Unitholders
) Trust Administration
(b) Schedule as to redemption ) *
price )
47. Purchase and sale of interests )
in underlying securities ) Trust Administration
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of ) Trust Administration
trustee )
49. Fees and expenses of trustee ) Summary of Essential Financial
) Information
) Trust Administration
50. Trustee's lien ) Trust Administration
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Insurance of holders of trust's )
securities ) *
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust agree- )
ment with respect to )
replacement or elimi- ) The Fund
nation of portfolio )
securities )
(b) Transactions involving )
elimination of underlying ) *
securities )
(c) Policy regarding substitu- ) Trust Administration
tion or elimination of )
underlying securities )
(d) Fundamental policy not ) *
otherwise covered )
53. Tax status of trust ) Tax Status
) The Trusts
VIII. Financial and Statistical Information
54. Trust's securities during ) *
last ten years )
55. )
)
56. Certain information regarding ) *
)
57. Periodic payment certificates )
58. )
59. Financial statements (Instruc- ) Other Matters
tions 1(c) to Form S-6) )
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* Inapplicable, omitted, answer negative or not required
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS DATED
APRIL 30, 1997, SUBJECT TO COMPLETION
CORPORATE HIGH YIELD SERIES 1
THE FUND. Voyageur Unit Investment Trust, Series 10 (the "Fund")
consists of the underlying separate unit investment trust set forth above (the
"Trust). The Trust consists of a portfolio of interest-bearing corporate debt
obligations of domestic companies (the "Corporate Bonds," or "Bonds"), including
delivery statements relating to contracts for the purchase of certain such
obligations and an irrevocable letter of credit.
INVESTMENT OBJECTIVE OF THE TRUST. The investment objective of the
Trust is to provide a high level of current income through investment in a fixed
portfolio consisting of domestic high-yield, high-risk corporate debt
obligations issued after July 18, 1984. The objective of the Trust is dependent
upon the continuing ability of the issuers and/or obligors of the Bonds to meet
their respective obligations. There is, of course, no guarantee that the
objective of the Trust will be achieved. See "The Trust--Corporate High Yield
Series 1." A SIGNIFICANT PORTION OF THE AGGREGATE PRINCIPAL AMOUNT OF THE BONDS
IN THE TRUST ARE LOWER RATED BONDS, COMMONLY KNOWN AS "JUNK BONDS," THAT ENTAIL
GREATER RISKS, INCLUDING DEFAULT RISKS, THAN THOSE FOUND IN HIGHER RATED
SECURITIES. INVESTORS SHOULD CAREFULLY CONSIDER THESE RISKS BEFORE INVESTING.
SEE "INVESTMENT OBJECTIVES AND PORTFOLIO SELECTION" AND "RISK FACTORS."
For foreign investors who are not United States citizens or residents,
interest income from the Trust may not be subject to federal withholding taxes
if certain conditions are met. See "Tax Status."
UNITS OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK AND ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY AND INVOLVE INVESTMENT RISK, INCLUDING LOSS OF PRINCIPAL.
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COHIG & ASSOCIATES, INC.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The investor is advised to read and retain this Prospectus for future
reference.
THE DATE OF THIS PROSPECTUS IS ____________, 1997
PUBLIC OFFERING PRICE. The Public Offering Price of the Units of the
Trust during the initial offering period is equal to the aggregate offering
price of the Bonds in the Trust's portfolio and cash, if any, in the Principal
Account held or owned by such Trust divided by the number of Units outstanding,
plus the applicable sales charge and accrued interest, if any. For sales charges
in the secondary market, see "Public Offering--General." If the Bonds in the
Trust were available for direct purchase by investors, the purchase price of the
Bonds would not include the sales charge included in the Public Offering Price
of the Units. During the initial offering period, the sales charge is reduced on
a graduated scale for sales involving $100,000 or more. If Units were available
for purchase at the opening of business on the Initial Date of Deposit, the
Public Offering Price per Unit would have been that amount set forth in the
"Summary of Essential Financial Information." See "Public Offering."
ESTIMATED CURRENT RETURN AND ESTIMATED LONG-TERM RETURN. The Estimated
Current Return and Estimated Long-Term Return to Unitholders are as set forth
under "Summary of Essential Financial Information." The methods of calculating
Estimated Current Return and Estimated Long-Term Return are set forth in the
footnotes to the "Summary of Essential Financial Information" and under
"Estimated Current Return and Estimated Long-Term Return."
DISTRIBUTIONS. Unitholders will receive distributions on a monthly
basis. See "Rights of Unitholders-- Distributions of Interest and Principal."
Record dates will be the first day of each month. Distributions will be made on
the fifteenth day of the month subsequent to the respective record dates.
MARKET FOR UNITS. Although not obligated to do so, an affiliate of the
Sponsor, Voyageur Fund Distributors, Inc., intends to, and the Underwriter may,
maintain a secondary market for the Units at prices based upon the aggregate bid
price of the Bonds in the portfolio of a Trust; however, during the initial
offering period such prices will be based upon the aggregate offering prices of
the Bonds. If such a market is not maintained and no other over-the-counter
market is available, a Unitholder will be able to dispose of his Units through
redemption at prices based upon the bid prices of the underlying Bonds (see
"Rights of Unitholders--Redemption of Units").
REINVESTMENT OPTION. Unitholders have the opportunity to have their
distributions reinvested into an open-end management investment company as
described herein. See "Rights of Unitholders--Reinvestment Option."
RISK FACTORS. An investment in the Trust should be made with an
understanding of the risks associated therewith, including, among other factors,
the loss of principal and/or interest due to changes in economic conditions,
volatile interest rates, early call provisions, lack of liquidity and changing
perceptions regarding junk bonds. See "Risk Factors."
VOYAGEUR UNIT INVESTMENT TRUST, SERIES 10
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
AS OF THE OPENING OF BUSINESS ON THE INITIAL DATE OF DEPOSIT: ___________, 1997
UNDERWRITER: COHIG & ASSOCIATES, INC.
SPONSOR: VOYAGEUR FUND MANAGERS, INC.
DISTRIBUTOR: VOYAGEUR FUND DISTRIBUTORS, INC.
EVALUATOR: MULLER DATA CORPORATION
TRUSTEE: THE CHASE MANHATTAN BANK
<TABLE>
<CAPTION>
Corporate
High-Yield
Series 1
--------
<S> <C>
Principal Amount (Par Value) of Bonds...........................................
Number of Units.................................................................
Fractional Undivided Interest in the Trust per Unit.............................
Principal Amount (Par Value) of Bonds per Unit (1)..............................
Public Offering Price: Aggregate Offering Price of
Bonds in Portfolio..........................................................
Aggregate Offering Price of Bonds per Unit......................................
Sales Charge 4.9% (5.152% of the Aggregate Offering
Price of the Bonds) per Unit(2)..............................................
Public Offering Price per Unit(2)(3)............................................
Redemption Price per Unit(3)(4).................................................
Sponsor's Initial Repurchase Price per Unit.....................................
Excess of Public Offering Price per Unit Over
Redemption Price per Unit....................................................
Excess of Sponsor's Initial Repurchase Price per Unit
Over Redemption Price per Unit...............................................
Minimum Value of the Trust under which Trust
Agreement may be terminated..................................................
Minimum Principal Distribution....................................$0.10 per Unit
First Settlement Date..........................................__________ , 1997
Mandatory Termination Date.....................................December 31, 2045
Calculation of Estimated Net Annual Unit Income(5):
Estimated Annual Interest Income per Unit....................................
Less: Estimated Annual Expense per Unit......................................
Estimated Net Annual Interest Income per Unit................................
Estimated Normal Monthly Distribution per Unit(6)...............................
Estimated Daily Rate of Net Interest Accrual per Unit...........................
Estimated Current Return Based on Public Offering
Price(2)(6)(7)(9)............................................................
Estimated Long-Term Return(2)(6)(7)(9)..........................................
Initial Distribution (___________, 1997)........................................
Trustee's Initial Annual Fee per $1,000 Principal
Amount of Bonds(5)...........................................................
Evaluator's Annual Fee per Unit(9)..............................................
Sponsor's Annual Fee per Unit(9)................................................
Estimated Organizational and Offering Expenses per Unit (8).....................
Record Dates.............................................First day of each month
Distribution Dates...................................Fifteenth day of each month
</TABLE>
Evaluations for purpose of sale, purchase or redemption of Units are made as of
4:00 P.M. Eastern time on days of trading on the New York Stock Exchange next
following receipt of an order for a sale or purchase of Units or receipt by the
Trustee of Units tendered for redemption.
(1) Because certain of the Securities in the Trust may from time to time
under certain circumstances be sold or redeemed or will be called or
mature in accordance with their terms, there is no guarantee that the
value of each Unit at the Trust's termination will be equal to the
Principal Amount (Par Value) of Securities per Unit stated above.
(2) The sales charge is decreased and the Estimated Current Return and
Estimated Long-Term Return are increased for transactions entitled to a
reduced sales charge. See "Public Offering--General."
(3) Anyone ordering Units for settlement after the First Settlement Date
will pay accrued interest from such date to the date of settlement
(normally three business days after order) less distributions from the
Interest Account subsequent to the First Settlement Date. For purchases
settling on the First Settlement Date, no accrued interest will be
added to the Public Offering Price. After the initial offering period,
the Sponsor's Repurchase Price per Unit will be determined as described
under the caption "Public Offering--Public Market."
(4) See "Rights of Unitholders--Redemption of Units."
(5) During the first year the Trustee will reduce its fee in the Trust by
approximately ____ per Unit (which amount is the estimated interest to
be earned per Unit prior to the expected delivery date for the "when,
as and if issued" Bonds included in such Trust). Should such estimated
interest exceed such amount, the Trustee will reduce its fee up to its
annual fee. After the first year, the Trustee's fee will be that amount
indicated above; Estimated Annual Interest Income per Unit will be
increased to $______, Estimated Annual Expense per Unit will be
increased to ______; and Estimated Net Annual Interest Income per Unit
will remain the same as shown. However, in no event will the Trustee's
Annual Fee be less than $2,000. See "Estimated Current Return and
Estimated Long-Term Return."
(6) These figures are based on estimated per Unit cash flows. Estimated
cash flows will vary with changes in fees and expenses, with changes in
current interest rates and with the principal prepayment, redemption,
maturity, call, exchange or sale of the underlying Bonds. The estimated
cash flows for each Trust are available upon request at no charge from
the Sponsor.
(7) The Estimated Current Return is calculated by dividing the estimated
net annual interest income per Unit by the Public Offering Price. The
estimated net annual interest income per Unit will vary with changes in
fees and expenses of the Trustee, the Sponsor and the Evaluator and
with the principal prepayment, redemption, maturity, exchange or sale
of Bonds while the Public Offering Price will vary with changes in the
offering price of the underlying Bonds; therefore, there is no
assurance that the present Estimated Current Return indicated above
will be realized in the future. The Estimated Long-Term Return is
calculated using a formula which (1) takes into consideration, and
determines and factors in the relative weightings of, the market
values, yields (which takes into account the amortization of premiums
and the accretion of discounts) and estimated retirements of all of the
Bonds in the Trust and (2) takes into account a compounding factor and
the expenses and sales charge associated with each Trust Unit. Since
the market values and estimated retirements of the Bonds and the
expenses of the Trust will change, there is no assurance that the
present Estimated Long-Term Return as indicated above will be realized
in the future. The Estimated Current Return and Estimated Long-Term
Return are expected to differ because the calculation of the Estimated
Long-Term Return reflects the estimated date and amount of principal
returned while the Estimated Current Return calculation includes only
net annual interest income and Public Offering Price.
(8) The Trust (and therefore the Unitholders) will bear all or a portion of
its organizational and offering costs (including costs of preparing the
registration statement, the trust indenture and other closing
documents, registering Units with the Securities and Exchange
Commission and states, the initial audit of the Trust portfolios and
the initial fees and expenses of the Trustee but not including the
expenses incurred in the preparation and printing of brochures and
other advertising materials and any other selling expenses) as is
common for mutual funds. Total organizational and offering expenses
will be charged off against principal at the end of the initial
offering period which is currently expected to be approximately 2-3
months from the Initial Date of Deposit. In so doing, the Sponsor may
have to sell Securities from the Trust. The sale of Securities will
serve to reduce the Principal Amount (Par Value) of Securities per Unit
stated above. See "Trust Operating Expenses" and "Statements of Net
Assets." Historically, the sponsors of unit investment trusts have paid
all of the costs of establishing such trusts.
(9) The Sponsor has agreed to waive the Sponsor's Annual Fee per Unit
during the first year of the Trust's life. Thereafter, the Sponsor's
Annual Fee per Unit will be assessed in the amounts set forth above. As
a result of the inclusion of these fees after the first year, the
Estimated Current Return and in parenthesis, the Estimated Long-Term
Return, for the Trust, are expected to be _____% (_____%) in subsequent
years.
THE FUND
GENERAL. The Fund consists of one unit investment trust (the "Trust")
which was created under the laws of the State of New York pursuant to a Trust
Agreement (the "Trust Agreement"), dated the Initial Date of Deposit, as defined
in "Summary of Essential Financial Information," with Voyageur Fund Managers,
Inc., as Sponsor, Muller Data Corporation, as Evaluator, and The Chase Manhattan
Bank, as Trustee.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee
interest-bearing corporate debt obligations of domestic companies (the
"Corporate Bonds" or "Bonds") as indicated under "Schedule of Investments"
herein, including delivery statements relating to contracts for the purchase of
certain such obligations and an irrevocable letter of credit issued by a
financial institution in the amount required for such purchases. Thereafter, the
Trustee, in exchange for the Bonds so deposited, delivered to the Sponsor
evidences of ownership of the number of Units of the Trust as indicated under
"Summary of Essential Financial Information."
With the deposit of the Bonds on the Initial Date of Deposit, the
Sponsor established a percentage relationship between the amounts of Bonds in
the Trust's portfolio. From time to time following the Initial Date of Deposit,
the Sponsor, pursuant to the Trust Agreement, may deposit additional Bonds in
the Trust and Units may be continuously offered for sale to the public by means
of this Prospectus, resulting in a potential increase in the outstanding number
of Units of the Trust. Any additional Bonds deposited in the Trust will
maintain, as nearly as is practicable, the original proportionate relationship
of the Bonds in the Trust's portfolio. Since the prices of the underlying Bonds
will fluctuate daily, the ratio, on a market value basis, will also change
daily. The portion of Bonds represented by each Unit will not change as a result
of the deposit of additional Bonds in the Trust.
Certain of the Bonds in the Trust may have been purchased on a "when,
as and if issued" or "delayed delivery" basis. See footnote (1) in "The
Trust--Notes to Schedules of Investments." The delivery of any such Bonds may be
delayed or may not occur. Interest on these Bonds begins accruing to the benefit
of Unitholders on their respective dates of delivery. To the extent any Bonds
are actually delivered to the Fund after their respective expected dates of
delivery, Unitholders who purchase their Units prior to the date such Bonds are
actually delivered to the Trustee would be required to adjust their tax basis in
their Units for a portion of the interest accruing on such Bonds during the
interval between their purchase of Units and the actual delivery of such Bonds.
As a result of any such adjustment, the Estimated Current Returns during the
first year would be slightly lower than those stated herein which would be the
returns after the first year, assuming the portfolio of the Trust and estimated
annual expenses other than those of the Trustee (which may be reduced in the
first year only) do not vary from that set forth under "Summary of Essential
Financial Information". Unitholders will be "at risk" with respect to all Bonds
in the portfolios including "when, as and if issued" and "delayed delivery"
Bonds (i.e., may derive either gain or loss from fluctuations in the evaluation
of such Bonds) from the date they commit for Units. For a discussion of the
Sponsor's obligations in the event of the failure of any contract for the
purchase of any of the Bonds and limited right to substitute other tax-exempt
bonds to replace any failed contract, see "Replacement Bonds" below.
Each Unit initially offered represents the fractional undivided
interest in the Trust as indicated under "Summary of Essential Financial
Information." To the extent that any Units are redeemed by the Trustee, the
fractional undivided interest in the Trust represented by each unredeemed Unit
will increase, although the actual interest in such Trust represented by such
fraction will remain unchanged. Units will remain outstanding until redeemed
upon tender to the Trustee by Unitholders, which may include the Sponsor or the
Underwriter, or until the termination of the Trust Agreement.
REPLACEMENT BONDS. Because certain of the Bonds in the Trust may from
time to time under certain circumstances be sold or redeemed or will mature in
accordance with their terms and because the proceeds from such events will be
distributed to Unitholders and will not be reinvested, no assurance can be given
that the Trust will retain for any length of time its present size and
composition. Neither the Sponsor nor the Trustee shall be liable in any way for
any default, failure or defect in any Bond. In the event of a failure to deliver
any Bond that has been purchased for the Trust under a contract, including those
securities purchased on a "when, as and if issued" basis ("Failed Bonds"), the
Sponsor is authorized under the Trust Agreement to direct the Trustee to acquire
other securities ("Replacement Bonds") to make up the original corpus of the
Trust.
The Replacement Bonds must be purchased within 20 days after delivery
of the notice of the failed contract and the purchase price (exclusive of
accrued interest) may not exceed the amount of funds reserved for the purchase
of the Failed Bonds. The Replacement Bonds (i) must satisfy the criteria
described below for Bonds originally included in the Trust, (ii) must have a
fixed maturity date of at least seven years, but not exceeding the maturity date
of the Failed Bonds, (iii) must be purchased at a price that results in a yield
to maturity and in a current return, in each case as of the Initial Date of
Deposit, at least equal to that of the Failed Bonds, and (iv) shall not be
"when, as and if issued" bonds. Whenever a Replacement Bond has been acquired
for the Trust, the Trustee shall, within five days thereafter, notify all
Unitholders of the Trust of the acquisition of the Replacement Bond and shall,
on the next monthly distribution date which is more than 30 days thereafter,
make a pro rata distribution of the amount, if any, by which the cost to the
Trust of the Failed Bond exceeded the cost of the Replacement Bond plus accrued
interest. Once the original corpus of the Trust is acquired, the Trustee will
have no power to vary the investment of the Trust; i.e., the Trustee will have
no managerial power to take advantage of market variations to improve a
Unitholder's investment.
If the right of limited substitution described in the preceding
paragraph shall not be utilized to acquire Replacement Bonds in the event of a
failed contract, the Sponsor will refund the sales charge attributable to such
Failed Bonds to all Unitholders of the Trust and distribute the principal and
accrued interest (at the coupon rate of such Failed Bonds to the date the Failed
Bonds are removed from the Trust) attributable to such Failed Bonds not later
than the next Distribution Date following such removal or such earlier time as
the Trustee in its sole discretion deems to be in the interest of the
Unitholders. In the event a Replacement Bond could not be acquired by the Trust,
the estimated net annual interest income per Unit for the Trust would be reduced
and the Estimated Current Return and the Estimated Long-Term Return thereon
might be lowered. In addition, Unitholders should be aware that they may not be
able at the time of receipt of such principal to reinvest such proceeds in other
securities at a yield equal to or in excess of the yield which such proceeds
were earning to Unitholders in the Trust.
INVESTMENT OBJECTIVES AND PORTFOLIO SELECTION
The objective of the Trust is to provide a high level of current income
through an investment in a fixed portfolio consisting of high-yield, high-risk
corporate debt obligations issued after July 18, 1984. The securities included
in the Trust are commonly known as "junk bonds" and are subject to greater
market fluctuations and potential risk of loss of income and principal than are
investments in lower-yielding, higher-rated fixed-income securities.
Historically, high-yield bonds have provided greater returns than conventional
debt securities, but have also been subject to greater volatility. The
securities included in this Trust should be viewed as speculative and an
investor should review his or her ability to assume the risks associated with
speculative corporate bonds. The payment of income is dependent upon the
continuing ability of the issuers and/or obligors of the Bonds to meet their
respective obligations. There is, of course, no guarantee that the Trust's
objective will be achieved.
The Sponsor of the Trust selected the Bonds for the portfolio after
considering the Trust's investment objective as well as the credit quality of
the individual Bonds selected for the Trust. The following facts, among others,
were also considered: (a) the price of the Bonds relative to other issues of
similar quality and maturity; (b) the present rating and credit quality of the
issuers of the Bonds and the potential improvement in the credit quality of such
issuers; (c) the diversification of the Bonds as to location of issuer; (d) the
income to the Unitholders of the Trust; (e) whether the Bonds were issued after
July 18, 1984; and (f) the stated maturity of the Bonds.
As of the Initial Date of Deposit, all of the Bonds in the Trust were
rated "B-" or better by Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.
("Standard & Poor's") or Fitch Investors Service, L.P. ("Fitch"). See
"Description of Bond Ratings" and "Corporate High Yield Series 1--Schedule of
Investments." Subsequent to the Initial Date of Deposit, a Bond may cease to be
so rated. If this should occur, the Trust would not be required to eliminate the
Bond from the Trust, but such an event may be considered in the Sponsor's
determination to direct the Trustee to dispose of such Bond. See "Trust
Administration--Portfolio Administration."
To the best knowledge of the Sponsor, there is no litigation pending as
of the Initial Date of Deposit in respect of any Bonds which might reasonably be
expected to have a material adverse effect upon the Trust. At any time after the
Initial Date of Deposit, litigation may be initiated on a variety of grounds
with respect to Bonds in the Trust. While the outcome of litigation of such
nature can never be entirely predicted, the Trust has received or will receive
opinions of bond counsel to the issuing authorities of each Bond on the date of
issuance to the effect that such Bonds have been validly issued. In addition,
other factors may arise from time to time which potentially may impair the
ability of issuers to meet obligations undertaken with respect to the Bonds.
THE TRUST
CORPORATE HIGH YIELD SERIES 1
GENERAL. Corporate High Yield Series 1 consists of domestic Corporate
Bonds. _________ percent of the principal amount of the Bonds in the Trust were
purchased at a premium over par value. _______ percent of the Bonds are subject
to optional call or redemption provisions within _______ years from the Initial
Date of Deposit. See "Notes to Schedule of Investments" for additional
information on redemption provisions. All the Bonds included in the Trust will
mature in _______. The Bonds are divided by type (and percentage of principal
amount of the Trust) as set forth in the following table:
Type Portfolio Percentage
---- --------------------
CORPORATE HIGH YIELD SERIES 1
SCHEDULE OF INVESTMENTS
AS OF THE OPENING OF BUSINESS ON THE INITIAL
DATE OF DEPOSIT: ____________, 1997
<TABLE>
<CAPTION>
Name of Issuer, Title, Interest Rate and Offering Price
Aggregate Maturity Date of either Bonds Deposited Redemption to Corporate
Principal (1) or Bonds Contracted for (1)(7) Rating Feature (5) High Yield (6)
- ------------- ---------------------------------------- ------ ----------- --------------
<S> <C> <C> <C> <C>
- ------------- -------------
============= =============
</TABLE>
For an explanation of the footnotes used on this page, see "Notes to Schedules
of Investments" on page ___.
Notes to Schedules of Investments
As of the Opening of Business on the
Initial Date of Deposit:__________, 1997
1. All Bonds are represented by "regular way" or "when issued"
contracts for the performance of which an irrevocable letter of credit, obtained
from an unaffiliated financial institution, has been deposited with the Trustee.
The Sponsor has assigned to the Trustee all of its right, title and interest in
and to such Bonds. Contracts to acquire Bonds were entered into during the
period from _______, 1997 to _______, 1997. These Bonds have expected settlement
dates from ______, 1997 to ________, 1997 (see "The Fund").
2. Rating by Standard & Poor's. Such ratings were obtained from a
corporate bond reporting service.
3. Rating by Moody's. Such ratings were obtained from a corporate bond
reporting service.
4. Rating by Fitch. Such ratings were obtained from a corporate bond
reporting service.
5. There is shown under this heading the year in which each issue of
the Bonds is initially or currently callable and the call price for that year.
Each issue of the Bonds continues to be callable at declining prices thereafter
(but not below par value) except for original issue discount bonds which are
redeemable at prices based on the issue price plus the amount of original issue
discount accreted to redemption date plus, if applicable, some premium, the
amount of which will decline in subsequent years. "S.F." indicates a sinking
fund is established with respect to an issue of the Bonds. Redemption pursuant
to call provisions generally will, and redemption pursuant to sinking fund
provisions may, occur at times when the redeemed obligations have an offering
side valuation which represents a premium over par. Certain Bonds may be subject
to redemption without premium prior to the date shown pursuant to extraordinary
optional or mandatory redemptions if certain events occur. Notwithstanding any
provisions to the contrary, certain bond issuers have in the past, and others
may in the future, attempt to redeem bonds prior to their initially scheduled
call dates and at prices which do not include any premiums. For a general
discussion of certain of these events, see "Risk Factors--Redemptions of Bonds."
To the extent that the Bonds were deposited in the Trust at a price higher than
the price at which they are redeemed, this will represent a loss of capital when
compared with the original Public Offering Price of the Units. Conversely, to
the extent that the Bonds were acquired at a price lower than the redemption
price, this will represent an increase in capital when compared with the
original Public Offering Price of the Units. Distributions will generally be
reduced by the amount of the income which would otherwise have been paid with
respect to redeemed Bonds and there will be distributed to Unitholders the
principal amount and any premium received on such redemption. The Estimated
Current Return and Estimated Long-Term Return in this event may be affected by
such redemptions. For the Federal tax effect on Unitholders of such redemptions
and resultant distributions, see "Tax Status" and "Estimated Current Return and
Estimated Long-Term Return."
6. Evaluation of Bonds is made on the basis of current offering prices
for the Bonds. The offering prices are greater than the current bid prices of
the Bonds which is the basis on which Unit value is determined for purposes of
redemption of Units (see "Public Offering--Offering Price").
7. Other information regarding the Bonds in the Trust, as of the
opening of business on the Initial Date of Deposit, is as follows:
<TABLE>
<CAPTION>
Annual Bid Side
Cost to Profit (Loss) Interest Income Evaluation
Trust Sponsor to Sponsor to Trust of Bonds
----- ------- ---------- -------- --------
<S> <C> <C> <C> <C>
Corporate High Yield
Series 1
</TABLE>
The Sponsor may have entered into contracts which hedge interest rate
fluctuations on certain Bonds in the portfolio. On the opening of business on
the Initial Date of Deposit, the offering side evaluation of the Bonds in the
Trust was higher than the bid side evaluation of such Bonds by _____% . Two
Bonds in the Trust, representing ____% of the principal amount of the Bonds,
(marked by a double asterisk (**)) were purchased on a "when, as and if issued"
basis. Interest on these Bonds begins accruing to the benefit of Unitholders on
their respective dates of delivery. Delivery is expected to take place nine and
twenty one days, respectively, after the First Settlement Date.
"#" indicates that such Bond was issued at either an original issue discount or
purchased at a market discount. The tax effect of Bonds issued at an original
issue discount or purchased at a market discount is described in "Tax Status."
8. This Bond has been purchased at a deep discount from the par value
because there is little or no stated interest income thereon. Bonds which pay no
interest are normally described as "zero coupon" bonds. Over the life of bonds
purchased at a deep discount the value of such bonds will increase such that
upon maturity the holders of such bonds will receive 100% of the principal
amount thereof. To the extent that zero coupon bonds are sold or called prior to
maturity, there is no guarantee that the value of the proceeds received
therefrom by the Trust will equal or exceed the par value that would have been
obtained at maturity of such zero coupon bonds.
INDEPENDENT AUDITORS' REPORT
TO THE SPONSOR, TRUSTEE AND THE UNITHOLDERS OF VOYAGEUR UNIT INVESTMENT
TRUST, SERIES 10:
We have audited the accompanying statements of net assets, including
the schedules of investments, of Voyageur Unit Investment Trust, Series 10
(Corporate High Yield Series 1), as of ___________, 1997. The statements of net
assets are the responsibility of the Sponsor. Our responsibility is to express
an opinion on such financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of an irrevocable letter of credit deposited to purchase securities
by correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Sponsor, as
well as evaluating the overall financial statement presentation. We believe our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Voyageur Unit
Investment Trust, Series 10 (Corporate High Yield Series 1), as of ___________,
1997, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
___________, 1997
VOYAGEUR UNIT INVESTMENT TRUST, SERIES 10
STATEMENTS OF NET ASSETS
AS OF THE OPENING OF BUSINESS ON THE INITIAL
DATE OF DEPOSIT: ___________, 1997
Corporate
High Yield
Series 1
--------
Contracts to purchase securities(1) $
Accrued interest on underlying securities(1)(2)
Organizational and offering Costs (3) $
Total Assets
Less: distributions payable(2)
Less: accrued organizational and offering costs (3) $
=============
Net Assets
Net Assets Represented By:
Interest of Unitholders--
Units of fractional undivided interest
outstanding: ( ____________ Units, respectively)
Cost to investors(4) $
Less: Gross underwriting commission(4)
Net Assets(4) $
=============
- ----------------------
(1) The aggregate value of the Bonds listed under "Schedule of Investments"
for the Trust herein and their cost to such Trust are the same. The
value of the Bonds is determined by Muller Data Corporation on the
bases set forth under "Public Offering--Offering Price." The contracts
to purchase Bonds are collateralized by an irrevocable letter of credit
which has been deposited with the Trustee in and for the following
amounts:
<TABLE>
<CAPTION>
Principal Offering
Amount of Price of Accrued Interest
Amount of Bonds Under Bonds Under to Expected
Letter of Credit Contracts Contracts Delivery Dates
---------------- --------- --------- --------------
<S> <C> <C> <C> <C>
Corporate High Yield
Series 1
(2) The Trustee will advance the amount of accrued interest as of
_________, 1997 (the "First Settlement Date"), and all accrued interest
to the First Settlement Date will be distributed to the Sponsor as the
Unitholder of record as of the First Settlement Date.
(3) The Trust (and therefore Unitholders) will bear all or a portion of
their organizational and offering costs, which will be deferred and
charged off against principal at the end of the initial offering
period.
(4) The aggregate public offering price (exclusive of interest) and the
aggregate sales charge are computed on the bases set forth under
"Public Offering--Offering Price" and "Public Offering--Sponsor and
Underwriter Compensation" and assume all single transactions involve
less than $100,000. For single transactions involving $100,000 or more,
the sales charge is reduced (see "Public Offering--General") resulting
in an equal reduction in both the Cost to investors and the Gross
underwriting commission while the Net Assets remains unchanged.
RISK FACTORS
GENERAL. An investment in Units of the Trust should be made with an
understanding of the risks that an investment in "high-yield, high-risk," fixed
rate, domestic corporate debt obligations or "junk bonds" may entail, including
increased credit risks and the risk that the value of the Units will decline,
and may decline precipitously, with increases in interest rates. In recent years
there have been wide fluctuations in interest rates and thus in the value of
fixed-rate, debt obligations generally. Bonds such as those included in the
Trust are, under most circumstances, subject to greater market fluctuations and
risk of loss of income and principal than are investments in lower-yielding,
higher-rated securities, and their value may decline precipitously because of
increases in interest rates, not only because the increases in rates generally
decreases values, but also because increased rates may indicate a slowdown in
the economy and a decrease in the value of assets generally that may adversely
affect the credit of issuers of high-yield, high-risk securities resulting in a
higher incidence of defaults among high-yield, high-risk securities. A slowdown
in the economy, or a development adversely affecting an issuer's
creditworthiness, may result in the issuer being unable to maintain earnings or
sell assets at the rate and at the prices, respectively, that are required to
produce sufficient cash flow to meet its interest and principal requirements.
For an issuer that has outstanding both senior commercial bank debt and
subordinated high-yield, high-risk securities, an increase in interest rates
will increase that issuer's interest expense insofar as the interest rate on the
bank debt is fluctuating. However, many leveraged issuers enter into interest
rate protection agreements to fix or cap the interest rate on a large portion of
their bank debt. The Sponsor cannot predict future economic policies or their
consequences or, therefore, the course or extent of any similar market
fluctuations in the future.
"High-yield" or "junk" bonds, the generic names for corporate bonds
rated below "BBB" by Standard & Poor's or Fitch, or below "Baa" by Moody's, are
frequently issued by corporations in the growth stage of their development, by
established companies whose operations or industries are depressed, or by highly
leveraged companies purchased in leveraged buyout transactions. The market for
high-yield bonds is very specialized and investors in it have been predominantly
financial institutions. High-yield, high-risk bonds are generally not listed on
a national securities exchange. Trading of high-yield, high-risk bonds,
therefore, takes place primarily in over-the-counter markets which consist of
groups of dealer firms that are typically major securities firms. Because the
high-yield bond market is a dealer market, rather than an auction market, no
single obtainable price for a given bond prevails at any given time. Prices are
determined by negotiation between traders. The existence of a liquid trading
market for the Bonds may depend on whether dealers will make a market in the
Bonds. There can be no assurance that a market will be made for any of the
Bonds, that any market for the Bonds will be maintained or of the liquidity of
the Bonds in any markets made. Not all dealers maintain markets in all
high-yield, high-risk bonds. Therefore, since there are fewer traders in these
bonds than there are in "investment grade" bonds, the bid-offer spread is
usually greater for high-yield, high-risk bonds than it is for investment grade
bonds. The price at which the Bonds may be sold to meet redemptions and the
value of the Trust will be adversely affected if trading markets for the Bonds
are limited or absent. If the rate of redemptions is great, the value of the
Trust may decline to a level that requires liquidation. See "Trust
Administration--Amendment or Termination."
Lower-rated securities tend to offer higher yields than higher-rated
securities with the same maturities because the creditworthiness of the issuers
of lower-rated securities may not be as strong as that of other issuers.
Moreover, if a Bond is recharacterized as equity by the Internal Revenue Service
for federal income tax purposes, the issuer's interest deduction with respect to
the Bond will be disallowed and this disallowance may adversely affect the
issuer's credit rating. Because investors generally perceive that there are
greater risks associated with the lower-rated securities in the Trust, the
yields and prices of these securities tend to fluctuate more than higher-rated
securities with changes in the perceived quality of the credit of their issuers.
In addition, the market value of high-yield, high-risk, fixed-income securities
may fluctuate more than the market value of higher-rated securities since
high-yield, high-risk, fixed-income securities tend to reflect short-term credit
developments to a greater extent than higher-rated securities. Lower-rated
securities generally involve greater risks of loss of income and principal than
higher-rated securities. Issuers of lower-rated securities may possess fewer
creditworthiness characteristics than issuers of higher-rated securities and,
especially in the case of issuers whose obligations or credit standing have
recently been downgraded, may be subject to claims by debtholders, owners of
property leased to the issuer or others which, if sustained, would make it more
difficult for the issuers to meet their payment obligations. High-yield,
high-risk bonds are also affected by variables such as interest rates, inflation
rates and the real growth in the economy. Therefore, investors should consider
carefully the relative risks associated with investment in securities which
carry lower ratings.
The value of the Units reflects the value of the portfolio securities,
including the value (if any) of securities in default. Should the issuer of any
Bond default in the payment of principal or interest, the Trust may incur
additional expenses seeking payment on the defaulted Bond. Because amounts (if
any) recovered by the Trust in payment under the defaulted Bond may not be
reflected in the value of the Units until actually received by the Trust, and
depending upon when a Unitholder purchases or sells his or her Units, it is
possible that a Unitholder would bear a portion of the cost of recovery without
receiving any portion of the payment recovered.
High-yield, high-risk bonds are generally subordinated obligations. The
payment of principal (and premium, if any), interest and sinking fund
requirements with respect to subordinated obligations of an issuer is
subordinated in right of payment to the payment of senior obligations of the
issuer. Senior obligations generally include most, if not all, significant debt
obligations of an issuer, whether existing at the time of issuance of
subordinated debt or created thereafter. Upon any distribution of the assets of
an issuer with subordinated obligations upon dissolution, total or partial
liquidation or reorganization of or similar proceeding relating to the issuer,
the holders of senior indebtedness will be entitled to receive payment in full
before holders of subordinated indebtedness will be entitled to receive any
payment. Moreover, generally no payment with respect to subordinated
indebtedness may be made while there exists a default with respect to any senior
indebtedness. Thus, in the event of insolvency, holders of senior indebtedness
of an issuer generally will recover more, ratably, than holders of subordinated
indebtedness of that issuer.
Obligations that are rated lower than BBB by Standard & Poor's or
Fitch, or Baa by Moody's, respectively, should be considered speculative as such
ratings indicate a quality of less than investment grade. Investors should
carefully review the objective of the Trust and consider their ability to assume
the risks involved before making an investment in the Trust. See "Description of
Bond Ratings" for a description of speculative ratings issued by Standard &
Poor's, Moody's and Fitch.
Certain of the Bonds in the Trust may have been acquired at a market
discount from par value. The coupon interest rates on the discount bonds at the
time they were purchased and deposited in the Trust were lower than the current
market interest rates for newly issued bonds of comparable rating and type. If
such interest rates for newly issued comparable bonds increase, the market
discount of previously issued bonds will become greater, and if such interest
rates for newly issued comparable bonds decline, the market discount of
previously issued bonds will be reduced, other things being equal. Investors
should also note that the value of bonds purchased at a market discount will
increase in value faster than Bonds purchased at a market premium if interest
rates decrease. Conversely, if interest rates increase, the value of bonds
purchased at a market discount will decrease faster than Bonds purchased at a
market premium. In addition, if interest rates rise, the prepayment risk of
higher yielding, premium bonds and the prepayment benefit for lower yielding,
discount bonds will be reduced. A discount bond held to maturity will have a
larger portion of its total return in the form of taxable income and capital
gain and less in the form of tax-exempt interest income than a comparable bond
newly issued at current market rates. See "Tax Status." Market discount
attributable to interest changes does not indicate a lack of market confidence
in the issue. Neither the Sponsor, the Distributor nor the Trustee shall be
liable in any way for any default, failure or defect in any of the Bonds.
Certain of the Bonds in the Trust may be original issue discount bonds.
Under current law, the original issue discount, which is the difference between
the stated redemption price at maturity and the issue price of the Bonds, is
deemed to accrue on a daily basis and the accrued portion is treated as interest
income for Federal income tax purposes. On sale or redemption, any gain realized
that is in excess of the earned portion of original issue discount will be
taxable as capital gain unless the gain is attributable to market discount in
which case the accretion of market discount is taxable as ordinary income. See
"Tax Status." The current value of an original issue discount bond reflects the
present value of its stated redemption price at maturity. The market value tends
to increase in greater increments as the Bonds approach maturity.
Certain of the original issue discount bonds may be zero coupon bonds
(including bonds known as multiplier bonds, money multiplier bonds, capital
appreciation bonds, capital accumulator bonds, compound interest bonds and money
discount maturity payment bonds). Zero coupon bonds do not provide for the
payment of any current interest and generally provide for payment at maturity at
face value unless sooner sold or redeemed. Zero coupon bonds may be subject to
more price volatility than conventional bonds. While some types of zero coupon
bonds, such as multipliers and capital appreciation bonds, define par as the
initial offering price rather than the maturity value, they share the basic zero
coupon bond features of (i) not paying interest on a semi-annual basis and (ii)
providing for the reinvestment of the bond's semi-annual earnings at the bond's
stated yield to maturity. While zero coupon bonds are frequently marketed on the
basis that their fixed rate of return minimizes reinvestment risk, this benefit
can be negated in large part by weak call protection, i.e., a bond's provision
for redemption at only a modest premium over the accreted value of the bond. See
footnote (8) in "The Trust--Notes to Schedules of Investments."
Certain of the Bonds in the Trust may have been acquired at a market
premium from par value at maturity. The coupon interest rates on the premium
bonds at the time they were purchased and deposited in the Trust were higher
than the current market interest rates for newly issued bonds of comparable
rating and type. If such interest rates for newly issued and otherwise
comparable bonds decrease, the market premium of previously issued bonds will be
increased, and if such interest rates for newly issued comparable bonds
increase, the market premium of previously issued bonds will be reduced, other
things being equal. The current returns of bonds trading at a market premium are
initially higher than the current returns of comparable bonds of a similar type
issued at currently prevailing interest rates because premium bonds tend to
decrease in market value as they approach maturity when the face amount becomes
payable. Because part of the purchase price is thus returned not at maturity but
through current income payments, early redemption of a premium bond at par or
early prepayments of principal will result in a reduction in yield. Redemption
pursuant to call provisions generally will, and redemption pursuant to sinking
fund provisions may, occur at times when the redeemed Bonds have an offering
side valuation which represents a premium over par or for original issue
discount Bonds a premium over the accreted value. To the extent that the Bonds
were deposited in the Fund at a price higher than the price at which they are
redeemed, this will represent a loss of capital when compared to the original
Public Offering Price of the Units. Because premium bonds generally pay a higher
rate of interest than Bonds priced at or below par, the effect of the redemption
of premium bonds would be to reduce estimated net annual unit income by a
greater percentage than the par amount of such bonds bears to the total par
amount of Bonds in the Trust. Although the actual impact of any such redemptions
that may occur will depend upon the specific Bonds that are redeemed, it can be
anticipated that the estimated net annual unit income will be significantly
reduced after the dates on which such Bonds are eligible for redemption. The
Trust may be required to sell zero coupon bonds prior to maturity (at their
current market price which is likely to be less than their par value) in the
event that all the Bonds in the portfolio other than the zero coupon bonds are
called or redeemed in order to pay expenses of the Trust or in case the Trust is
terminated. See "Trust Administration--Portfolio Administration" and "Trust
Administration--Amendment or Termination." See "The Trust--Schedule of
Investments" for the Trust for the earliest scheduled call date and the initial
redemption price for each Bond.
An investment in Units of the Trusts should be made with an
understanding of the interest rate risk associated with such an investment.
Generally, bond prices (and therefore Unit prices) will move inversely with
interest rates, and bonds (Trusts) with longer maturities are likely to exhibit
greater fluctuations in market value, all other things being equal, than bonds
(Trusts) with shorter maturities.
REDEMPTIONS OF BONDS. Certain of the Bonds in the Trust are subject to
redemption prior to their stated maturity date pursuant to sinking fund
provisions, call provisions or extraordinary optional or mandatory redemption
provisions or otherwise. A sinking fund is a reserve fund accumulated over a
period of time for retirement of debt. A callable debt obligation is one which
is subject to redemption or refunding prior to maturity at the option of the
issuer. A refunding is a method by which a debt obligation is redeemed, at or
before maturity, by the proceeds of a new debt obligation. In general, call
provisions are more likely to be exercised when the offering side valuation is
at a premium over par than when it is at a discount from par. The exercise of
redemption or call provisions will (except to the extent the proceeds of the
called Bonds are used to pay for Unit redemptions) result in the distribution of
principal and may result in a reduction in the amount of subsequent interest
distributions and it may also affect the current return on Units of the Trust
involved. The Trust portfolio contains a listing of the sinking fund and call
provisions, if any, with respect to each of the Bonds. Extraordinary optional
redemptions and mandatory redemptions result from the happening of certain
events. The Sponsor is unable to predict all of the circumstances which may
result in such redemption of an issue of Bonds. See "The Trust--Schedule of
Investments."
ESTIMATED CURRENT RETURN AND ESTIMATED LONG-TERM RETURN
As of the opening of business on the Initial Date of Deposit, the
Estimated Current Returns and the Estimated Long-Term Returns were those
indicated in the "Summary of Essential Financial Information." The Estimated
Current Returns are calculated by dividing the estimated net annual interest
income per Unit by the Public Offering Price. The estimated net annual interest
income per Unit will vary with changes in fees and expenses of the Trustee,
Sponsor and Evaluator and with the principal prepayment, redemption, maturity,
exchange or sale of Bonds while the Public Offering Price will vary with changes
in the offering price of the underlying Bonds; therefore, there is no assurance
that the present Estimated Current Returns will be realized in the future.
Estimated Long-Term Returns are calculated using a formula which (i) takes into
consideration, and determines and factors in the relative weightings of, the
market values, yields (which takes into account the amortization of premiums and
the accretion of discounts) and estimated retirements of all the Bonds in the
Trust and (ii) takes into account a compounding factor and the expenses and
sales charge associated with each Trust Unit. Since the market values and
estimated retirements of the Bonds and the expenses of the Trust will change,
there is no assurance that the present Estimated Long-Term Returns will be
realized in the future. Estimated Current Returns and Estimated Long-Term
Returns are expected to differ because the calculation of Estimated Long-Term
Returns reflects the estimated date and amount of principal returned while
Estimated Current Returns calculations include only net annual interest income
and Public Offering Price.
In order to acquire certain of the Bonds contracted for by the Sponsor
for deposit in the Trust, it may be necessary for the Sponsor or Trustee to pay
on the settlement dates for delivery of such Bonds amounts covering accrued
interest on such Bonds which exceed (i) the amounts paid by Unitholders and (ii)
the amounts which will be made available through cash furnished by the Sponsor
on the Initial Date of Deposit, which amount of cash may exceed the interest
which would accrue to the First Settlement Date. The Trustee has agreed to pay
for any amounts necessary to cover any such excess and will be reimbursed
therefor, without interest, when funds become available from interest payments
on the particular Bonds with respect to which such payments may have been made.
Also, since interest on any "when, as and if issued" Bonds does not begin
accruing as interest income to the benefit of Unitholders until their respective
dates of delivery, the Trustee may, in order to maintain (or in some cases
approach) for the Unitholders the same estimated net annual interest incomes
during the first year of the Trust's operations as is indicated under "Summary
of Essential Financial Information," reduce its fee (and to the extent necessary
pay Trust expenses) in an amount equal to that indicated under "Summary of
Essential Financial Information."
TRUST OPERATING EXPENSES
COMPENSATION OF SPONSOR. Voyageur Fund Managers, Inc., which acts as
Sponsor, will receive fees for providing portfolio surveillance in amounts as
set forth under "Summary of Essential Financial Information" per 100 Units on an
annual basis. Any such charges would be payable in monthly installments and
would be based on the number of Units outstanding on the first day of each month
of each year. Any such fees may exceed the actual costs of providing such
supervisory services for this Fund, but at no time will the total amount paid to
the Sponsor for portfolio supervisory services rendered to all unit investment
trusts sponsored by Voyageur Fund Managers, Inc. in any calendar year exceed the
aggregate cost to the Sponsor of supplying such services in such year. The
foregoing fees may be increased without approval of the Unitholders by amounts
not exceeding proportionate increases under the category "All Services Less Rent
of Shelter" in the Consumer Price Index published by the United States
Department of Labor or, if such category is no longer published, in a comparable
category. An affiliate of the Sponsor will receive sales commissions and may
realize other profits (or losses) in connection with the sale of Units and the
Sponsor may realize profits (or losses) in connection with the deposit of the
Bonds as described under "Public Offering--Sponsor and Underwriter
Compensation."
EVALUATOR'S FEE. For its services, the Evaluator will receive an annual
fee as set forth under "Summary of Essential Financial Information." The
Evaluator's fees are payable in monthly installments and would be based on the
number of Units outstanding on the first day of each month of each year. The
Evaluator's fees may be increased without approval of the Unitholders by amounts
not exceeding proportionate increases under the category "All Services Less Rent
of Shelter" in the Consumer Price Index published by the United States
Department of Labor or, if such category is no longer published, in a comparable
category.
TRUSTEE'S FEE. For its services, the Trustee will receive an annual fee
as set forth under "Summary of Essential Financial Information." The Trustee's
fees are payable in monthly installments (based on the outstanding principal
amount of Bonds in the Trust as of the first day of each month of each year) on
or before the fifteenth day of each month from the Interest Account to the
extent funds are available and then from the Principal Account. The Trustee's
fee may be periodically adjusted in response to fluctuations in short-term
interest rates (reflecting the cost to the Trustee of advancing funds to the
Trust to meet scheduled distributions) and may be further increased without
approval of the Unitholders by amounts not exceeding proportionate increases
under the category "All Services Less Rent of Shelter" in the Consumer Price
Index published by the United States Department of Labor or, if such category is
no longer published, in a comparable category. Since the Trustee has the use of
the funds being held in the Principal and Interest Accounts for future
distributions, payment of expenses and redemptions and since such Accounts are
non-interest bearing to Unitholders, the Trustee benefits thereby. Part of the
Trustee's compensation for its services to the Fund is expected to result from
the use of these funds. For a discussion of the services rendered by the Trustee
pursuant to its obligations under the Trust Agreement, see "Rights of
Unitholders--Reports Provided" and "Trust Administration."
MISCELLANEOUS EXPENSES. Expenses incurred in establishing the Trust,
including the cost of the initial preparation of documents relating to the Trust
(including the Prospectus, Trust Agreement and certificates), federal and state
registration fees, the initial fees and expenses of the Trustee, legal and
accounting expenses, payment of closing fees and any other out-of-pocket
expenses, will be paid by each Trust and charged off against principal at the
end of the initial offering period. The following additional charges are or may
be incurred by the Trusts: (i) fees of the Trustee for extraordinary services,
(ii) expenses of the Trustee (including legal and auditing expenses) and of
counsel designated by the Sponsor, (iii) various governmental charges, (iv)
expenses and costs of any action taken by the Trustee to protect the Trust and
the rights and interests of Unitholders, (v) indemnification of the Trustee for
any loss, liability or expenses incurred by it in the administration of the
Trust without gross negligence, bad faith or willful misconduct on its part,
(vi) any special custodial fees payable in connection with the sale of any of
the Bonds in the Trust and (vii) expenditures incurred in contacting Unitholders
upon termination of the Trust.
The fees and expenses set forth herein are payable out of the Trust.
When such fees and expenses are paid by or owing to the Trustee, they are
secured by a lien on the portfolio or portfolios of the Trust. If the balances
in the Interest and Principal Accounts are insufficient to provide for amounts
payable by the Fund, the Trustee has the power to sell Bonds to pay such
amounts.
TAX STATUS
For purposes of the following discussion and opinion, it is assumed
that interest on the Bonds is included in gross income for Federal income tax
purposes and that the Bonds are debt for Federal income tax purposes.
In the opinion of Chapman and Cutler, Counsel for the Sponsor, under
existing law:
(1) The Trust is not an association taxable as a corporation
for Federal income tax purposes.
(2) Each Unit holder of the Trust is considered to be the
owner of a pro rata portion of each of the Trust assets under subpart
E, subchapter J of chapter 1 of the Internal Revenue Code of 1986
(hereinafter the "CODE"). Each Unitholder will be considered to have
received his pro rata share of income derived from each Trust asset
when such income is considered to be received by the Trust. Each
Unitholder will also be required to include in taxable income for
Federal income tax purposes, original issue discount with respect to
his interest in any Bonds held by the Trust at the same time and in the
same manner as though the Unitholder were the direct owner of such
interest.
(3) Each Unitholder will have a taxable event when a Bond of
the Trust is disposed of whether by sale, liquidation, redemption, or
payment at maturity or otherwise, or when the Unitholder redeems or
sells his Units. The Unitholder's tax basis in his Units will equal his
tax basis in his pro rata portion of all of the assets of the Trust.
Such basis is determined (before the adjustments described below) by
apportioning the tax basis for the Units among each of the Trust's
assets according to value as of the valuation date nearest the date of
acquisition of the Units. Unitholders must reduce the tax basis of
their Units for their share of accrued interest received, if any, on
Bonds delivered after the date the Unitholders pay for their Units to
the extent that such interest accrued on such Bonds before the date the
Trust acquired ownership of the Bonds (and the amount of this reduction
may exceed the amount of accrued interest paid to the sellers) and,
consequently, such Unitholders may have an increase in taxable gain or
reduction in capital loss upon the disposition of such Units. Gain or
loss upon the sale or redemption of Units is measured by comparing the
proceeds of such sale or redemption with the adjusted basis of the
Units. If the Trustee disposes of Bonds (whether by sale, exchange,
payment on maturity, redemption or otherwise), gain or loss is
recognized to the Unitholder (subject to various nonrecognition
provisions of the Code). The amount of any such gain or loss is
measured by comparing the Unitholder's pro rata share of the total
proceeds from such disposition with his basis for his fractional
interest in the asset disposed of. The basis of each Unit and of each
Bond which was issued with original issue discount (or which has market
discount) must be increased by the amount of accrued original issue
discount (and market discount, if the Unitholder elects to include
market discount in income as it accrues) and the basis of each Unit and
of each Bond which was purchased by the Trust at a premium must be
reduced by the annual amortization of bond premium which the Unit
holder has properly elected to amortize under Section 171 of the Code.
The tax basis reduction requirements of the Code relating to
amortization of bond premium may, under some circumstances, result in
the Unitholder realizing a taxable gain when his Units are sold or
redeemed for an amount equal to or less than his original cost.
Original issue discount is effectively treated as interest for Federal
income tax purposes and the amount of original issue discount in this
case is generally the difference between the Bond's purchase price and
its stated redemption price at maturity. A Unitholder will be required
to include in gross income for each taxable year the sum of his daily
portions of original issue discount as such original issue discount
accrues and will in general be subject to Federal income tax with
respect to the total amount of such original issue discount that
accrues for such year even though the income is not distributed to the
Unitholders during such year, unless the original issue discount on a
Bond is less than a "de minimis" amount as determined under Treasury
Regulations. To the extent the amount of such discount is less than the
respective "de minimis" amount, such discount shall be treated as zero.
In general, original issue discount accrues daily under a constant
interest rate method which takes into account the semi-annual
compounding of accrued interest. Unitholders should consult their tax
advisers regarding the Federal income tax consequences and accretion of
original issue discount.
Each Unitholder's pro rata share of each expense paid by the Trust is
deductible by the Unitholder to the same extent as though the expense had been
paid directly by him. It should be noted that as a result of the Tax Reform Act
of 1986, certain miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees and employee business expenses will be deductible by
an individual only to the extent they exceed 2% of such individual's adjusted
gross income (similar limitations also apply to estates and trusts). Unitholders
may be required to treat some or all of the expenses paid by the Trust as
miscellaneous itemized deductions subject to this limitation.
If a Unitholder's tax basis of his pro rata portion in any Bonds held
by the Trust exceeds the amount payable by the issuer of the Bonds with respect
to such pro rata interest upon maturity of the Bond, such excess would be
considered premium which may be amortized by the Unitholder at the Unit holder's
election as provided in Section 171 of the Code. Unitholders should consult
their tax advisers regarding whether such election should be made and the manner
of amortizing premium.
Certain of the Bonds in the Trust may have been acquired with "original
issue discount." In the case of any Bonds in the Trust acquired with "original
issue discount" that exceeds a "de minimis" amount as specified in the Code,
such discount is includable in taxable income of the Unitholders on an accrual
basis computed daily, without regard to when payments of interest on such Bonds
are received. The Code provides a complex set of rules regarding the accrual of
original issue discount. These rules provide that original issue discount
generally accrues on the basis of a constant compound interest rate over the
term of the Bonds. Unitholders should consult their tax advisers as to the
amount of original issue discount which accrues.
Special original issue discount rules apply if the purchase price of
the Bond by the Trust exceeds its original issue price plus the amount of
original issue discount which would have previously accrued based upon its issue
price (its "ADJUSTED ISSUE PRICE"). Similarly, these special rules would apply
to a Unit holder if the tax basis of his pro rata portion of a Bond issued with
original issue discount exceeds his pro rata portion of its adjusted issue
price. Unit holders should also consult their tax advisers regarding these
special rules.
It is possible that a Bond that has been issued at an original issue
discount may be characterized as a "high-yield discount obligation" within the
meaning of Section 163(e)(5) of the Code. To the extent that such an obligation
is issued at a yield in excess of six percentage points over the applicable
Federal rate, a portion of the original issue discount on such obligation will
be characterized as a distribution on stock (E.G., dividends) for purposes of
the dividends-received deduction which is available to certain corporations with
respect to certain dividends received by such corporation.
If a Unitholder's tax basis in his pro rata portion of Bonds is less
than the allocable portion of such Bond's stated redemption price at maturity
(or, if issued with original issue discount, the allocable portion of its
"revised issue price"), such difference will constitute market discount unless
the amount of market discount is "de minimis" as specified in the Code. Market
discount accrues daily computed on a straight-line basis, unless the Unitholder
elects to calculate accrued market discount under a constant yield method.
Unitholders should consult their tax advisers as to the amount of market
discount which accrues.
Accrued market discount is generally includable in taxable income to
the Unitholders as ordinary income for Federal tax purposes upon the receipt of
serial principal payments on the Bonds, on the sale, maturity or disposition of
such Bonds by the Trust, and on the sale by a Unitholder of Units, unless a
Unitholder elects to include the accrued market discount in taxable income as
such discount accrues. If a Unitholder does not elect to annually include
accrued market discount in taxable income as it accrues, deductions for any
interest expenses incurred by the Unitholder which is incurred to purchase or
carry his Units will be reduced by such accrued market discount. In general, the
portion of any interest expense which was not currently deductible would
ultimately be deductible when the accrued market discount is included in income.
Unitholders should consult their tax advisers regarding whether an election
should be made to include market discount in income as it accrues and as to the
amount of interest expense which may not be currently deductible.
The tax basis of a Unitholder with respect to his interest in a Bond is
increased by the amount of original issue discount (and market discount, if the
Unit holder elects to include market discount, if any, on the Bonds held by the
Trust in income as it accrues) thereon properly included in the Unit holder's
gross income as determined for Federal income tax purposes and reduced by the
amount of any amortized premium which the Unit holder has properly elected to
amortize under Section 171 of the Code. A Unitholder's tax basis in his Units
will equal his tax basis in his pro rata portion of all of the assets of the
Trust.
A Unitholder will recognize taxable capital gain (or loss) when all or
part of his pro rata interest in a Bond is disposed of in a taxable transaction
for an amount greater (or less) than his tax basis therefor. As previously
discussed, gain realized on the disposition of the interest of a Unitholder in
any Bond deemed to have been acquired with market discount will be treated as
ordinary income to the extent the gain does not exceed the amount of accrued
market discount not previously taken into income. Any capital gain or loss
arising from the disposition of a Bond by the Trust or the disposition of Units
by a Unitholder will be short-term capital gain or loss unless the Unitholder
has held his Units for more than one year in which case such capital gain or
loss will be long-term. For taxpayers other than corporations, net capital gains
(which is defined as net long-term capital gain over net short-term capital loss
for a taxable year) are presently subject to a maximum stated marginal tax rate
of 28%. However, it should be noted that legislative proposals are introduced
from time to time that affect tax rates and could affect relative differences at
which ordinary income and capital gains are taxed. The tax basis reduction
requirements of the Code relating to amortization of bond premium may, under
some circumstances, result in the Unitholder realizing taxable gain when his
Units are redeemed for an amount equal to or less than his original cost.
The Revenue Reconciliation Act of 1993 (the "TAX ACT") raised tax rates
on ordinary income while capital gains remain subject to a 28% maximum stated
rate for taxpayers other than corporations. Because some or all capital gains
are taxed at a comparatively lower rate under the Tax Act, the Tax Act includes
a provision that characterizes capital gains as ordinary income in the case of
certain financial transactions that are "conversion transactions" effective for
transactions entered into after April 30, 1993. Unitholders and prospective
investors should consult with their tax advisers regarding the potential effect
of this provision on their investment in Units.
If the Unitholder disposes of a Unit, he is deemed thereby to have
disposed of his entire pro rata interest in all Trust assets, including his pro
rata portion of all of the Bonds represented by the Unit. This may result in a
portion of the gain, if any, on such sale being taxable as ordinary income under
the market discount rules (assuming no election was made by the Unitholder to
include market discount in income as it accrues) as previously discussed.
A Unitholder who is a foreign investor (i.e., an investor other than a
U.S. citizen or resident or a U.S. corporation, partnership, estate or trust)
will not be subject to United States Federal income taxes, including withholding
taxes, on interest income (including any original issue discount) on, or any
gain from the sale or other disposition of, his pro rata interest in any Bond or
the sale of his Units PROVIDED that all of the following conditions are met: (i)
the interest income or gain is not effectively connected with the conduct by the
foreign investor of a trade or business within the United States, (ii) if the
interest is United States source income (which is the case for most securities
issued by United States issuers), and the Bond is issued after July 18, 1984,
then the foreign investor does not own, directly or indirectly, 10% or more of
the total combined voting power of all classes of voting stock of the issuer of
the Bond and the foreign investor is not a controlled foreign corporation
related (within the meaning of Section 864(d)(4) of the Code) to the issuer of
the Bond, (iii) with respect to any gain, the foreign investor (if an
individual) is not present in the United States for 183 days or more during his
or her taxable year and (iv) the foreign investor provides all certification
which may be required of his status (foreign investors may contact the Sponsor
to obtain a Form W-8 which must be filed with the Trustee and refiled every
three calendar years thereafter). Foreign investors should consult their tax
advisers with respect to United States tax consequences of ownership of Units.
It should be noted that the Tax Act included a provision which
eliminates the exemption from United States taxation, including withholding
taxes, for certain "contingent interest." The provision applies to interest
received after December 31, 1993. No opinion is expressed herein regarding the
potential applicability of this provision and whether United States taxation or
withholding taxes could be imposed with respect to income derived from the Units
as a result thereof. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
Each Unitholder (other than a foreign investor who has properly
provided the certifications described above) will be requested to provide the
Unitholder's taxpayer identification number to the trustee and to certify that
the Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by the
Trust to such Unitholder, including amounts received upon the redemption of the
Units will be subject to back-up withholding.
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the
Trust for New York tax matters, the Trust is not an association taxable as a
corporation and the income of the Trust will be treated as the income of the
Unit holders under the existing income tax laws of the State and City of New
York.
The foregoing discussion relates only to United States Federal and New
York State and City income taxes; Unitholders may be subject to foreign, state
and local taxation in other jurisdictions (including a foreign investor's
country of residence). Unitholders should consult their tax advisers regarding
potential state, local, or foreign taxation with respect to the Units.
PUBLIC OFFERING
GENERAL. Units are offered at the Public Offering Price. During the
initial offering period the Public Offering Price is based on the offering
prices of the Bonds in the Trust and includes a sales charge of 4.9% of the
Public Offering Price (5.152% of the aggregate offering price of the Bonds) plus
any accrued interest. In the secondary market the Public Offering Price is based
on the bid prices of the Bonds in the Trust and includes a sales charge of 5.5%
of the Public Offering Price (5.820% of the aggregate bid price of the Bonds)
plus any accrued interest. However, the sales charge applicable to quantity
purchases is, during the initial offering period, reduced by a discount on a
graduated basis to any person acquiring $100,000 or more as follows (except for
sales made pursuant to a "wrap fee account" or similar arrangements as set forth
below):
Aggregate Dollar Value Reduction as a
of Units Purchased Percent of Offering Price
------------------ -------------------------
$100,000 - 249,999 .......................... 0.30%
$250,000 - 499,999 .......................... 0.50%
$500,000 - 999,999 .......................... 0.90%
$1,000,000 or more .......................... 1.40%
Any such reduced sales charge shall be the responsibility of the
selling Underwriter, broker, dealer or agent. The reduced sales charge structure
will apply on all purchases of Units in a Trust by the same person on any one
day from any one Underwriter or dealer. In addition, Unitholders who, during the
offering period, cumulatively purchase a sufficient number of Units of a Trust
to qualify for a reduced sales charge will receive such reduction retroactively
upon reaching the appropriate level. Units purchased in the name of the spouse
of a purchaser or in the name of a child of such purchaser under 21 years of age
will be deemed for the purposes of calculating the applicable sales charge to be
additional purchases by the purchaser. Investors may use the redemption or
termination proceeds they have received from other unit investment trusts
sponsored by the Sponsor to purchase Units of a Trust without a sales charge.
The reduced sales charges will also be applicable to a trustee or other
fiduciary purchasing securities for one or more trust estate or fiduciary
accounts. Employees, officers and directors (including their immediate family
members, defined as spouses, children, grandchildren, parents, grandparents,
mothers-in-law, fathers-in-law, sons-in-law and daughters-in-law, and trustees,
custodians or fiduciaries for the benefit of such persons) of the Sponsor and
its subsidiaries may purchase Units of the Trust without a sales charge in both
the initial and secondary offering periods.
Investors who purchase Units through registered broker/dealers who
charge periodic fees for financial planning, investment advisory or asset
management services, or provide such services in connection with the
establishment of an investment account for which a comprehensive "wrap fee"
charge is imposed may purchase Units in the initial and secondary offering
periods at the Public Offering Price less the concession the Sponsor typically
would allow such broker/dealer. See "Public Offering--Unit Distribution."
ACCRUED INTEREST. Accrued interest is the accumulation of unpaid
interest on a bond from the last day on which interest thereon was paid.
Interest on Bonds generally is paid semi-annually, although the Trust accrues
such interest daily. Because of this, the Trust always has an amount of interest
earned but not yet collected by the Trustee. For this reason, with respect to
sales settling subsequent to the First Settlement Date, the Public Offering
Price of Units will have added to it the proportionate share of accrued interest
to the date of settlement. Unitholders will receive on the next distribution
date of the Trust the amount, if any, of accrued interest paid on their Units.
In an effort to reduce the amount of accrued interest which would
otherwise have to be paid in addition to the Public Offering Price in the sale
of Units to the public, the Trustee will advance the amount of accrued interest
as of the First Settlement Date and the same will be distributed to the Sponsor
as the Unitholder of record as of the First Settlement Date. Consequently, the
amount of accrued interest to be added to the Public Offering Price of Units
will include only accrued interest from the First Settlement Date to the date of
settlement, less any distributions from the Interest Account subsequent to the
First Settlement Date. See "Rights of Unitholders--Distributions of Interest and
Principal."
Because of the varying interest payment dates of the Bonds, accrued
interest at any point in time will be greater than the amount of interest
actually received by the Trust and distributed to Unitholders. Therefore, there
will always remain an item of accrued interest that is added to the value of the
Units. If a Unitholder sells or redeems all or a portion of his Units, he will
be entitled to receive his proportionate share of the accrued interest from the
purchaser of his Units. Since the Trustee has the use of the funds held in the
Interest Account for distributions to Unitholders and since such Account is
noninterest-bearing to Unitholders, the Trustee benefits thereby.
OFFERING PRICE. The Public Offering Price of the Units will vary from
the amounts stated under "Summary of Essential Financial Information" in
accordance with fluctuations in the prices of the underlying Bonds in the Trust.
As indicated above, the price of the Units as of the opening of
business on the Initial Date of Deposit was determined by adding to the
determination of the aggregate offering price of the Bonds an amount equal to
5.152% of such value and dividing the sum so obtained by the number of Units
outstanding. This computation produced a gross underwriting profit equal to 4.9%
of the Public Offering Price. Such price determination as of the opening of
business on the Initial Date of Deposit was made on the basis of an evaluation
of the Bonds in each Trust prepared by Muller Data Corporation, a firm regularly
engaged in the business of evaluating, quoting or appraising comparable
securities. Except on the Initial Date of Deposit, during the initial offering
period, the Evaluator will appraise or cause to be appraised daily the value of
the underlying Bonds as of 4:00 P.M. Eastern time on days the New York Stock
Exchange is open and will adjust the Public Offering Price of the Units
commensurate with such appraisal. Such Public Offering Price will be effective
for all orders received at or prior to 4:00 P.M. Eastern time on each such day.
Orders received by the Trustee, Sponsor, Distributor or any Underwriter or
dealer for purchases, sales or redemptions after that time, or on a day when the
New York Stock Exchange is closed, will be held until the next determination of
price. For secondary market sales the Public Offering Price per Unit will be
equal to the aggregate bid price of the Bonds in a Trust plus the secondary
market sales charge. For secondary market purposes such appraisal and adjustment
will be made by the Evaluator as of 4:00 P.M. Eastern time on days on which the
New York Stock Exchange is open for each day on which any Unit of a Trust is
tendered for redemption, and it shall determine the aggregate value of such
Trust as of 4:00 P.M. Eastern time on such other days as may be necessary.
The aggregate price of the Bonds in the Trust has been and will be
determined on the basis of bid prices or offering prices, as appropriate, (i) on
the basis of current market prices for the Bonds obtained from dealers or
brokers who customarily deal in bonds comparable to those held by the Trust;
(ii) if such prices are not available for any particular Bonds, on the basis of
current market prices for comparable bonds; (iii) by causing the value of the
Bonds to be determined by others engaged in the practice of evaluation, quoting
or appraising comparable bonds; or (iv) by any combination of the above.
The initial or primary Public Offering Price of the Units and the
Sponsor's initial repurchase price per Unit are based on the offering price per
Unit of the underlying Bonds plus the applicable sales charge plus interest
accrued but unpaid from the First Settlement Date to the date of settlement. The
secondary market Public Offering Price and the Redemption Price per Unit are
based on the bid price per Unit of the Bonds in the Trust plus the applicable
sales charge plus accrued interest. The offering price of Bonds in the Trust may
be expected to range from 1-3% more than the bid price of such Bonds. On the
Initial Date of Deposit, the offering side evaluation of the Bonds in each Trust
were higher than the bid side evaluation of such Bonds by the amount indicated
under footnote (5) in "The Trust--Notes to Schedules of Investments."
Although payment is normally made three business days following the
order for purchase, payment may be made prior thereto. However, delivery of
certificates, if any are requested in writing, representing Units so ordered
will be made as soon as possible following such order or shortly thereafter. A
person will become the owner of Units on the date of settlement provided payment
has been received. Cash, if any, made available to the Sponsor prior to the date
of settlement for the purchase of Units may be used in the Sponsor's business
and may be deemed to be a benefit to the Sponsor, subject to the limitations of
the Securities Exchange Act of 1934.
UNIT DISTRIBUTION. During the initial offering period, Units will be
distributed to the public by the Underwriter, broker-dealers and others (see
"Underwriting") at the Public Offering Price, plus accrued interest computed as
described above. Upon the completion of the initial offering, Units repurchased
in the secondary market, if any, may be offered by this prospectus at the
secondary Public Offering Price in the manner described.
The Sponsor intends to qualify the Units for sale in a number of
states. Broker-dealers or others will be allowed a concession or agency
commission in connection with the distribution of Units during the initial
offering period equal to $.33 per Unit ($.34 per Unit for the portion of
aggregate sales which exceed $250,000 by broker-dealers or others in the primary
offering who did not act as Underwriter and who purchase such Units from the
Sponsor) and in the secondary market equal to 4.0% of the Public Offering Price
per Unit. In addition, broker-dealers or others who sell, within five business
days of the Trust's Initial Date of Deposit, that amount necessary to qualify
for the Underwriter Concession set forth under "Sponsor and Underwriter
Compensation" below will be allowed the concession set forth in such section on
all sales during such period. Certain commercial banks are making Units of the
Fund available to their customers on an agency basis. A portion of the sales
charge (equal to the agency commission referred to above) is retained by or
remitted to the banks. Under the Glass-Steagall Act, banks are prohibited from
underwriting Units of the Fund; however, the Glass-Steagall Act does permit
certain agency transactions and the banking regulators have not indicated that
these particular agency transactions are not permitted under such Act. In
addition, state securities laws on this issue may differ from the
interpretations of Federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.
Notwithstanding the concessions referred to above, in connection with any
quantity purchases, a broker/dealer or bank will receive the following
concessions for purchases made from the Sponsor, pursuant to the sales charge
reduction schedule for quantity purchases set forth above, resulting in total
concessions as contained in the following table:
Aggregate Dollar Value Total Concession
of Units Purchased per Unit
---------------------- ----------------
$100,000 - $249,999 ........................... $.32
$250,000 - $499,999 ........................... .31
$500,000 - $999,999 ........................... .29
$1,000,000 or more ........................... .25
The Sponsor and the Distributor each reserves the right to reject, in
whole or in part, any order for the purchase of Units and to change the amount
of the concession or agency commission to dealers and others from time to time.
See "Underwriting." To facilitate the handling of transactions, sales of Units
shall normally be limited to transactions involving a minimum of $1,000.
SPONSOR AND UNDERWRITER COMPENSATION. The gross sales commission
through the initial or primary distribution of Units will equal 4.9% of the
Public Offering Price of the Units (5.152% of the net amount invested), less any
reduced sales charge for quantity purchases as described under "General" above.
The Underwriter will acquire Units from the Sponsor based on the amount of Units
underwritten. The concessions from the Public Offering Price will be as set
forth in the following table:
Aggregate Dollar Value Total Underwriter
of Units Underwritten Concession per Unit
---------------------- ----------------
$100,000 - $249,999 ............................... $.35
$250,000 - $499,999 ............................... .36
$500,000 - $999,999 ............................... .37
$1,000,000 or more................................. .40
Broker-dealers and other financial institutions purchasing Units from
the Distributor during the first week after the Initial Date of Deposit may also
receive the concession described above according to the schedule above
describing Underwriter compensation. In addition, the Sponsor will realize a
profit or will sustain a loss, as the case may be, as a result of the difference
between the price paid for the Bonds by the Sponsor and the cost of such Bonds
to the Trust (which is based on the determination of the aggregate offering
price of the Bonds in such Trust on the Initial Date of Deposit as prepared by
Muller Data Corporation. See "Underwriting" and "The Trust--Schedule of
Investments." Affiliates of the Sponsor and the Underwriter may also realize
profits or sustain losses with respect to Bonds deposited in the Trust which
were acquired by the Sponsor from underwriting syndicates of which such parties
were members. An affiliate of the Sponsor participated as sole underwriter or as
a manager or as a member of an underwriting syndicate from which ___% of the
Bonds in the portfolios of the Trust was acquired. The Underwriter may further
realize additional profit or loss during the initial offering period as a result
of the possible fluctuations in the market value of the Bonds in the Trust after
the Initial Date of Deposit, since all proceeds received from purchasers of
Units (excluding dealer concessions or agency commissions allowed, if any) will
be retained by the Underwriter.
As stated under "Public Market" below, an affiliate of the Sponsor,
Voyageur Fund Distributors, Inc. (the "Distributor"), intends to, and the
Underwriter may, maintain a secondary market for the Units of the Fund. In so
maintaining a market, the Distributor or the Underwriter will also realize
profits or sustain losses in the amount of any difference between the price at
which Units are purchased and the price at which Units are resold (which price
is based on the bid prices of the Bonds in the Trust and includes a sales
charge). In addition, the Sponsor, the Distributor or the Underwriter will also
realize profits or sustain losses resulting from a redemption of such
repurchased Units at a price above or below the purchase price for such Units,
respectively.
PUBLIC MARKET. During the initial public offering period, the
Distributor and/or the Underwriter intends to offer to purchase Units at a price
based on the aggregate offering price per Unit of the Bonds in the Trust plus
accrued interest to the date of settlement. Afterward, although they are not
obligated to do so, the Distributor intends to, and the Underwriter may,
maintain a market for the Units offered hereby and to offer continuously to
purchase such Units at the bid price of the Bonds in the portfolio plus interest
accrued to the date of settlement plus any principal cash on hand, less any
amounts representing taxes or other governmental charges payable out of the
Trust and less any accrued Trust expenses. If the supply of Units exceeds demand
or if some other business reason warrants it, the Distributor and/or the
Underwriter may either discontinue all purchases of Units or discontinue
purchases of Units at such prices. In the event that a market is not maintained
for the Units and the Unitholder cannot find another purchaser, a Unitholder
desiring to dispose of his Units may dispose of such Units by tendering them to
the Trustee for redemption at the Redemption Price, which is based upon the
aggregate bid price of the Bonds in the portfolio and any accrued interest. The
aggregate bid prices of the underlying Bonds in the Trust are expected to be
less than the related aggregate offering prices. See "Rights of
Unitholders--Redemption of Units." A UNITHOLDER WHO WISHES TO DISPOSE OF HIS
UNITS SHOULD INQUIRE OF HIS BROKER AS TO CURRENT MARKET PRICES IN ORDER TO
DETERMINE WHETHER THERE IS IN EXISTENCE ANY PRICE IN EXCESS OF THE REDEMPTION
PRICE AND, IF SO, THE AMOUNT THEREOF.
RIGHTS OF UNITHOLDERS
OWNERSHIP OF UNITS. Ownership of Units of the Trust will not be
evidenced by certificates unless a Unitholder, the Unitholder's registered
broker/dealer or the clearing agent for such broker/dealer makes a written
request to the Trustee. Certificates, if issued, will be so noted on the
confirmation statement sent to the Underwriter and broker. Non-receipt of such
certificate(s) must be reported to the Trustee within one year; otherwise, a 2%
surety bond fee will be required for replacement.
Units are transferable by making a written request to the Trustee and,
in the case of Units evidenced by a certificate, by presenting and surrendering
such certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent registered or
certified mail for the protection of the Unitholder. Unitholders must sign such
written request, and such certificate or transfer instrument, exactly as their
names appear on the records of the Trustee and on any certificate representing
the Units to be transferred. Such signatures must be guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guarantee program in addition to, or in substitution for, STAMP, as
may be accepted by the Trustee.
Although no such charge is now made or contemplated, the Trustee may
require a Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in connection
with each such transfer or interchange. Destroyed, stolen, mutilated or lost
certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity, evidence of ownership and payment of expenses incurred. Mutilated
certificates must be surrendered to the Trustee for replacement.
DISTRIBUTIONS OF INTEREST AND PRINCIPAL. Interest received by the
Trust, including that part of the proceeds of any disposition of Bonds which
represents accrued interest and including any insurance proceeds representing
interest due on defaulted Bonds, is credited by the Trustee to the Interest
Account of the Trust. Other receipts are credited to the Principal Account of
the Trust. Interest received by the Trust after deduction of amounts sufficient
to reimburse the Trustee for any amounts advanced and paid to the Sponsor as the
Unitholder of record as of the First Settlement Date (see "Public
Offering--Offering Price") will be distributed on or shortly after the fifteenth
day of each month on a pro rata basis to Unitholders of record as of the
preceding record date (which will be the first day of the month). All
distributions will be net of applicable expenses. The pro rata share of cash in
the Principal Account will be computed as of the applicable record date, and
distributions to the Unitholders as of such record date will be made on or
shortly after the fifteenth day of such month. Proceeds received from the
disposition of any of the Bonds after such record date and prior to the
following distribution date will be held in the Principal Account and not
distributed until the next distribution date. The Trustee is not required to pay
interest on funds held in the Principal or Interest Accounts (but may itself
earn interest thereon and therefore benefits from the use of such funds) nor to
make a distribution from the Principal Account unless the amount available for
distribution shall equal at least $0.10 per Unit.
The distribution to the Unitholders as of each record date after the
First Settlement Date will be made on the following distribution date or shortly
thereafter and shall consist of an amount substantially equal to such portion of
the Unitholders' pro rata share of the estimated net annual unit income in the
Interest Account after deducting estimated expenses. Because interest payments
are not received by the Trust at a constant rate throughout the year, such
interest distribution may be more or less that the amount credited to the
Interest Account as of the record date. For the purpose of minimizing
fluctuation in the distributions from the Interest Account, the Trustee is
authorized to advance such amounts as may be necessary to provide interest
distributions of approximately equal amounts. The Trustee shall be reimbursed
for any such advances from funds in the Interest Account on the ensuing record
date. Persons who purchase Units will commence receiving distributions only
after such person becomes a record owner. Notification to the Trustee of the
transfer of Units is the responsibility of the purchaser, but in the normal
course of business such notice is provided by the selling broker-dealer.
As of the first day of each month, the Trustee will deduct from the
Interest Account and, to the extent funds are not sufficient therein, from the
Principal Account, amounts necessary to pay the expenses of Trust (as determined
on the basis set forth under "Trust Operating Expenses"). The Trustee also may
withdraw from said accounts such amounts, if any, as it deems necessary to
establish a reserve for any governmental charges or extraordinary charges
payable out of the Trust. Amounts so withdrawn shall not be considered a part of
the Trust's assets until such time as the Trustee shall return all for any part
of such amounts to the appropriate accounts. In addition, the Trustee may
withdraw from the Interest and Principal Accounts such amounts as may be
necessary to cover purchases of Replacement Bonds and redemption of Units by the
Trustee.
REINVESTMENT OPTION. Unitholders of the Trust may elect to have each
distribution of interest income, capital gains and/or principal on their Units
automatically reinvested in shares of any mutual fund advised by the Sponsor or
its affiliates, Delaware Management Company or Delaware International Advisors,
Ltd., which are registered in the Unitholder's state of residence. Such mutual
funds are hereinafter collectively referred to as the "Reinvestment Funds."
Each Reinvestment Fund has investment objectives which differ in
certain respects from those of the Trust. The prospectus relating to each
Reinvestment Fund describes the investment policies of such fund and sets forth
the procedures to follow to commence reinvestment. A Unitholder may obtain a
prospectus for the respective Reinvestment Fund from Voyageur Fund Distributors,
Inc. at 1818 Market Street, Philadelphia, Pennsylvania 19103.
After becoming a participant in a reinvestment plan, each distribution
of interest income, capital gains and/or principal on the participant's Units
will, on the applicable distribution date, automatically be applied, as directed
by such person, as of such distribution date by the Trustee to purchase shares
(or fractions thereof) of the applicable Reinvestment Fund at a net asset value
as computed as of the closing of trading on the New York Stock Exchange on such
date.
Confirmations of all reinvestments by a Unitholder into a Reinvestment
Fund will be mailed to the Unitholder by such Reinvestment Fund.
A participant may at any time prior to five days preceding the next
succeeding distribution date, by so notifying the Trustee in writing, elect to
terminate his or her reinvestment plan and receive future distributions on his
or her Units in cash. There will be no charge or other penalty for such
termination. Each Reinvestment Fund, its sponsor and its investment adviser
shall have the right to terminate at any time the reinvestment plan relating to
such fund.
REPORTS PROVIDED. The Trustee shall furnish Unitholders of the Trust in
connection with each distribution a statement of the amount of interest and, if
any, the amount of other receipts (received since the preceding distribution)
being distributed expressed in each case as a dollar amount representing the pro
rata share of each Unit of the Trust outstanding. For as long as the Sponsor
deems it to be in the best interests of the Unitholders, the accounts of the
Trust shall be audited, not less frequently than annually, by independent
certified public accountants and the report of such accountants shall be
furnished by the Trustee to Unitholders of the Trust upon request. Within a
reasonable period of time after the end of each calendar year, the Trustee shall
furnish to each person who at any time during the calendar year was a registered
Unitholder of the Trust a statement (i) as to the Interest Account: interest
received (including amounts representing interest received upon any disposition
of the Bonds), deductions for applicable taxes and for fees and expenses of such
Trust, for purchases of Replacement Bonds and for redemptions of Units, if any,
reservations made by the Trustee, if any, and the balance remaining after such
distributions and deductions, express in each case both as a total dollar amount
and as a dollar amount representing the pro rata share of each Unit outstanding
on the last business day of such calendar year; (ii) as to the Principal
Account: the dates of disposition of any Bonds and the net proceeds received
therefrom (excluding any portion representing accrued interest), the amount paid
for purchases of Replacement Bonds and for redemptions of Units, if any,
reservations made by the Trustee, if any, deductions for payment of applicable
taxes, fees and expenses of such Trust and the balance remaining after such
distributions and deductions expressed both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (iii) a list of the Bonds held and the
number of Units outstanding on the last business day of such calendar year; (iv)
the Redemption Price per Unit based upon the last computation thereof made
during such calendar year; and (v) amounts actually distributed during such
calendar year from the Interest and Principal Accounts, separately stated,
expressed both as total dollar amounts and as dollar amounts representing the
pro rata share of each Unit outstanding.
In order to comply with Federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Bonds in the Trust furnished to it by the Evaluator.
REDEMPTION OF UNITS. A Unitholder who does not dispose of Units in the
secondary market described above may cause Units to be redeemed by the Trustee
by making a written request to the Trustee, at its unit investment trust office,
The Chase Manhattan Bank, 4 New York Plaza, New York, New York 10004-2413 and,
in the case of Units evidenced by a certificate, by tendering such certificate
to the Trustee, properly endorsed or accompanied by a written instrument or
instruments of transfer in form satisfactory to the Trustee. Unitholders must
sign the request, and such certificate or transfer instrument, exactly as their
names appear on the records of the Trustee and on any certificate representing
the Units to be redeemed. If the amount of the redemption is $25,000 or less and
the proceeds are payable to the Unitholder(s) of record at the address of
record, no signature guarantee is necessary for redemptions by individual
account owners (including joint owners). Additional documentation may be
requested, and a signature guarantee is always required, from corporations,
executors, administrators, trustees, guardians or associations. The signatures
must be guaranteed by a participant in the STAMP or such other guarantee program
in addition to, or in substitution for, STAMP, as may be accepted by the
Trustee. A certificate should only be sent by registered or certified mail for
the protection of the Unitholder. Since tender of the certificate is required
for redemption when one has been issued, Units represented by a certificate
cannot be redeemed until the certificate representing such Units has been
received by the purchasers.
Redemption shall be made by the Trustee on the third business day
following the day on which a tender for redemption is received (the "Redemption
Date"). Such redemption shall be made by payment of cash, equivalent to the
Redemption Price for such Trust, determined as set forth below as of the
evaluation time stated under "Summary of Essential Financial Information," next
following such tender, multiplied by the number of Units being redeemed. Any
Units redeemed shall be cancelled and any undivided fractional interest in the
Fund extinguished. The price received upon redemption might be more or less than
the amount paid by the Unitholder depending on the value of the Bonds in the
Trust at the time of redemption.
Under regulations issued by the Internal Revenue Service, the Trustee
will be required to withhold a specified percentage of the principal amount of a
Unit redemption if the Trustee has not been furnished the redeeming Unitholder's
tax identification number in the manner required by such regulations. Any amount
so withheld is transmitted to the Internal Revenue Service and may be recovered
by the Unitholder only when filing a return. Under normal circumstances the
Trustee obtains the Unitholder's tax identification number from the selling
broker. However, at any time a Unitholder elects to tender Units for redemption,
such Unitholder should provide a tax identification number to the Trustee in
order to avoid this possible "back-up withholding" in the event the Trustee has
not been previously provided such number.
Accrued interest paid on redemption shall be withdrawn from the
Interest Account or, if the balance therein is insufficient, from the Principal
Account. All other amounts will be withdrawn from the Principal Account. The
Trustee is empowered to sell underlying Bonds in order to make funds available
for redemption. Units so redeemed shall be cancelled.
The Redemption Price per Unit (as well as the secondary market Public
Offering Price) will be determined on the basis of the bid price of the Bonds in
the Trust, while the initial and primary Public Offering Price of Units will be
determined on the basis of the offering price of the Bonds, as of 4:00 P.M.
Eastern time on days of trading on the New York Stock Exchange on the date any
such determination is made. On the Initial Date of Deposit, the Public Offering
Price per Unit (which is based on the offering prices of the Bonds and includes
the sales charge) exceeded the value at which Units could have been redeemed
(based upon the current bid prices of the Bonds in the Trust) by the amount
shown under "Summary of Essential Financial Information." While the Trustee has
the power to determine the Redemption Price per Unit when Units are tendered for
redemption, such authority has been delegated to the Evaluator which determines
the price per Unit on a daily basis. The Redemption Price per Unit is the pro
rata share of each Unit in the Trust determined on the basis of (i) the cash on
hand in such Trust or monies in the process of being collected, (ii) the value
of the Bonds in such Trust based on the bid prices of the Bonds (including "when
issued" contracts, if any) and (iii) interest accrued thereon, less (a) amounts
representing taxes or other governmental charges payable out of such Trust and
(b) the accrued expenses of such Trust. The Evaluator may determine the value of
the Bonds in the Trust by employing any of the methods set forth in "Public
Offering-Offering Price."
The price at which Units may be redeemed could be less than the price
paid by the Unitholder and may be less than the par value of the Bonds
represented by the Units so redeemed. As stated above, the Trustee may sell
Bonds to cover redemptions. When Bonds are sold, the size of the Trust will be,
and the diversity may be, reduced. Such sales may be required at a time when
Bonds would not otherwise be sold and might result in lower prices than might
otherwise be realized.
The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than for
customary weekend and holiday closings, or during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or an
emergency exists, as a result of which disposal or evaluation of the Bonds in
the Trust is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit. The Trustee is not
liable to any person in any way for any loss or damage which may result from any
such suspension or postponement.
TRUST ADMINISTRATION
DISTRIBUTOR PURCHASES OF UNITS. The Trustee shall notify the
Distributor of any tender of Units for redemption. If the Distributor's bid in
the secondary market at that time equals or exceeds the Redemption Price per
Unit, it may purchase such Units by notifying the Trustee before the close of
business on the date of such notification and by making payment therefor to the
Unitholder not later than the day on which the Units would otherwise have been
redeemed by the Trustee. Units held by the Sponsor or Distributor may be
tendered to the Trustee for redemption as any other Units.
The offering price of any Units acquired by the Distributor will be in
accord with the Public Offering Price described in the then currently effective
prospectus describing such Units. Any profit resulting from the resale of such
Units will belong to the Distributor which likewise will bear any loss resulting
from a lower offering or redemption price subsequent to its acquisition of such
Units.
PORTFOLIO ADMINISTRATION. The Trustee is empowered to sell, for the
purpose of redeeming Units tendered by any Unitholder, and for the payment of
expenses for which funds may not be available, such of the Bonds designated by
the Sponsor as the Trustee in its sole discretion may deem necessary. The
Sponsor, in designating such Bonds, will consider a variety of factors,
including (i) interest rates, (ii) market value and (iii) marketability. The
Sponsor may direct the Trustee to dispose of Bonds in the event there is a
decline in price or the occurrence of other market or credit factors, including
advance refunding (i.e., the issuance of refunding securities and the deposit of
the proceeds thereof in trust or escrow to retire the refunded securities on
their respective redemption dates), so that in the opinion of the Sponsor the
retention of such Securities would be detrimental to the interest of the
Unitholders.
The Sponsor is required to instruct the Trustee to reject any offer
made by an issuer of any of the Bonds to issue new obligations in exchange or
substitution for any Bond pursuant to a refunding or refinancing plan, except
that the Sponsor may instruct the Trustee to accept or reject such an offer or
to take any other action with respect thereto as the Sponsor may deem proper if
(i) the issuer is in default with respect to such Bond or (ii) in the written
opinion of the Sponsor the issuer will probably default with respect to such
Bond in the reasonably foreseeable future. Any obligation so received in
exchange or substitution will be held by the Trustee subject to the terms and
conditions of the Trust Agreement to the same extent as Bonds originally
deposited thereunder. Within five days after the deposit of obligations in
exchange or substitution for underlying Bonds, the Trustee is required to give
notice thereof to each Unitholder, identifying the Bonds eliminated and the
Bonds substituted therefor. Except as stated herein and under "The
Fund--Replacement Bonds" regarding the substitution of Replacement Bonds for
Failed Bonds, the acquisition by the Trust of any obligations other than the
Bonds initially deposited is not permitted.
If any default in the payment of principal or interest on any Bond
occurs and no provision for payment is made therefor within 30 days, the Trustee
is required to notify the Sponsor thereof. If the Sponsor fails to instruct the
Trustee to sell or to hold such Bond within 30 days after notification by the
Trustee to the Sponsor of such default, the Trustee may in its discretion sell
the defaulted Bond and not be liable for any depreciation or loss thereby
incurred.
AMENDMENT OR TERMINATION. The Sponsor and the Trustee have the power to
amend the Trust Agreement without the consent of any of the Unitholders when
such an amendment is (i) to cure an ambiguity or to correct or supplement any
provision of the Trust Agreement which may be defective or inconsistent with any
other provision contained therein or (ii) to make such other provisions as shall
not adversely affect the interest of the Unitholders (as determined in good
faith by the Sponsor and the Trustee), provided that the Trust Agreement may not
be amended to increase the number of Units issuable thereunder or to permit the
deposit or acquisition of obligations either in addition to or in substitution
for any of the Bonds initially deposited in the Trust, except for the
substitution of certain refunding obligations for such Bonds, for Replacement
Bonds and for subsequent deposits (see "The Fund"). In the event of any
amendment, the Trustee is obligated to notify promptly all Unitholders of the
substance of such amendment.
The Trust may be terminated at any time by consent of Unitholders
representing 66-2/3% of the Units of such Trust then outstanding or by the
Trustee when the value of such Trust, as shown by any semi-annual evaluation, is
less than the minimum value indicated under "Summary of Essential Financial
Information." The Trust will be liquidated by the Trustee in the event that a
sufficient number of Units not yet sold are tendered for redemption by the
underwriters, including the Sponsor, so that the net worth of such Trust would
be reduced to less than 40% of the initial principal amount of such Trust. If
the Trust is liquidated because of the redemption of unsold Units by the
Underwriter, the Sponsor will refund to each purchaser of Units the entire sales
charge paid by such purchaser.
The Trust Agreement provides that the Trust shall terminate upon the
redemption, sale or other disposition of the last Bond held in such Trust, but
in no event shall it continue beyond the end of the year preceding the fiftieth
anniversary of the Trust Agreement. In the event of termination of the Trust,
written notice thereof will be sent by the Trustee to each Unitholder of such
Trust at his address appearing on the registration books of the Trust maintained
by the Trustee, such notice specifying the time or times at which the Unitholder
may surrender his certificate or certificates, if any were issued, for
cancellation. Within a reasonable time thereafter the Trustee shall liquidate
any Bonds then held in such Trust and shall deduct from the funds of such Trust
any accrued costs, expenses or indemnities provided by the Trust Agreement,
including estimated compensation of the Trustee and costs of liquidation and any
amounts required as a reserve to provide for payment of any applicable taxes or
other governmental charges. The sale of Bonds in the Trust upon termination may
result in a lower amount than might otherwise be realized if such sale were not
required at such time. For this reason, among others, the amount realized by a
Unitholder upon termination may be less than the principal amount or par amount
of Bonds represented by the Units held by such Unitholder. The Trustee shall
then distribute to each Unitholder his or her share of the balance of the
Interest and Principal Accounts. With such distribution the Unitholders shall be
furnished a final distribution statement of the amount distributable. At such
time as the Trustee in its sole discretion shall determine that any amounts held
in reserve are no longer necessary, it shall make distribution thereof to
Unitholders in the same manner.
LIMITATION ON LIABILITIES. The Sponsor, the Evaluator, the Distributor
and the Trustee shall be under no liability to Unitholders for taking any action
or for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence in the performance of their
duties or by reason of their reckless disregard of their obligations and duties
thereunder. The Trustee shall not be liable for depreciation or loss incurred by
reason of the sale by the Trustee of any of the Bonds. In the event of the
failure of the Sponsor to act under the Trust Agreement, the Trustee may act
thereunder and shall not be liable for any action taken by it in good faith
under the Trust Agreement.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Bonds or upon the interest thereon or
upon it as Trustee under the Trust Agreement or upon or in respect of the Fund
which the Trustee may be required to pay under any present or future law of the
United States of America or of any other taxing authority having jurisdiction.
In addition, the Trust Agreement contains other customary provisions limiting
the liability of the Trustee.
The Trustee, Sponsor, Distributor and Unitholders may rely on any
evaluation furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Trust Agreement
shall be made in good faith upon the basis of the best information available to
it, provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor, Distributor or Unitholders for errors in judgment. This
provision shall not protect the Evaluator in any case of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and duties.
SPONSOR. Voyageur Fund Managers, Inc. is the Sponsor of the Fund and
Voyageur Fund Distributors, Inc. is the primary distributor of Fund Units.
Voyageur Fund Managers, Inc. and Voyageur Fund Distributors, Inc. are each
indirect wholly-owned subsidiaries of Dougherty Financial Group, Inc. "DFG"
which is owned approximately 49% by Michael E. Dougherty, 49% equally by James
Pohlad, Robert Pohlad and William Pohlad and less than 1% by certain benefit
plans for the employees of Dougherty Financial Group, Inc. and its subsidiaries.
The address of each of the Sponsor and Distributor is 90 South Seventh Street,
Suite 4400, Minneapolis, Minnesota 55402. On January 15, 1997, DFG entered into
an agreement and Plan of Merger with Lincoln National Corporation. If the merger
is consummated, Lincoln National Corporation will control the sponsor and
Distributor of the Fund.
Mr. Dougherty co-founded the predecessor of Dougherty Financial Group,
Inc. in 1977 and has served as Dougherty Financial Group's Chairman of the Board
and Chief Executive Officer since inception. As of August 31, 1996, Voyageur
Fund Managers, Inc. served as the manager to six closed-end and ten open-end
investment companies (comprising 33 separate investment portfolios),
administered numerous private accounts and, together with its affiliates,
managed approximately $11.5 billion in assets. The principal business address
for both Voyageur Fund Managers, Inc. and Voyageur Fund Distributors, Inc. is 90
South Seventh Street, Suite 4400, Minneapolis, Minnesota 55402. As of December
31, 1995, the total stockholders' equity of Voyageur Fund Mangers, Inc. was
$5,264,562 (unaudited). (This paragraph relates only to the Sponsor and not to
the Fund or to any Series thereof or to any of the Underwriters. The information
is included herein only for the purpose of informing investors as to the
financial responsibility of the Sponsor and its ability to carry out its
contractual obligations. More detailed financial information will be made
available by the Sponsor upon request.)
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or become bankrupt or its affairs are
taken over by public authorities, then the Trustee may (i) appoint a successor
Sponsor at rates of compensation deemed by the Trustee to be reasonable and not
exceeding amounts prescribed by the Securities and Exchange Commission, (ii)
terminate the Trust Agreement and liquidate the Fund as provided therein or
(iii) continue to act as Trustee without terminating the Trust Agreement.
EVALUATOR. Muller Data Corporation serves as Evaluator. The Evaluator
may resign or be removed by the Sponsor in which event the Sponsor is to use its
best efforts to appoint a satisfactory successor. Such resignation or removal
shall become effective upon acceptance of appointment by the successor
evaluation. If upon resignation of the Evaluator no successor has accepted
appointment within 30 days after notice of resignation, the Evaluator may apply
to a court of competent jurisdiction for the appointment of a successor. Notice
of such resignation or removal and appointment shall be mailed by the Trustee to
each Unitholder.
TRUSTEE. The Trustee, The Chase Manhattan Bank, is a trust company
specializing in investment related services, organized and existing under the
laws of New York, having its unit investment trust office at 4 New York Plaza,
New York, New York 10004-2413. The Trustee is subject to supervision by the
Superintendent of Banks of the State of New York, the Federal Deposit Insurance
Corporation and the Board of Governors of the Federal Reserve System.
The duties of the Trustee are primarily ministerial in nature. It did
not participate in the selection of Bonds for the portfolio of the Trust.
In accordance with the Trust Agreement, the Trustee shall keep proper
books of record and account of all transactions at its office for the Fund. Such
records shall include the name and address of, and the certificates issued by
the Trust to, every Unitholder. Such books and records shall be open to
inspection by any Unitholder at all reasonable times during usual business
hours. The Trustee shall make such annual or other reports as may from time to
time be required under any applicable state or Federal statute, rule or
regulation (see "Rights of Unitholders--Reports Provided"). The Trustee is
required to keep a certified copy or duplicate original of the Trust Agreement
on file in its office available for inspection at all reasonable times during
the usual business hours by any Unitholder, together with a current list of the
Bonds held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may
resign and be discharged of the Trust created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date specified
in such notice when such resignation is to take effect. The Sponsor upon
receiving notice of such resignation is obligated to appoint a successor trustee
promptly. If, upon such resignation, no successor trustee has been appointed and
has accepted the appointment within 30 days after notification, the retiring
Trustee may apply to a court of competent jurisdiction for the appointment of a
successor. The Sponsor may remove the Trustee and appoint a successor trustee as
provided in the Trust Agreement. Notice of such removal and appointment shall be
mailed to each Unitholder by the Sponsor. Upon execution of a written acceptance
of such appointment by such successor trustee, all the rights, powers, duties
and obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a corporation organized under the laws of the United States or any
State, be authorized to exercise trust powers and have at all times an aggregate
capital, surplus and undivided profits of not less than $5,000,000.
UNDERWRITING
The Underwriter named below has severally purchased Units in the
following respective amounts from the Sponsor.
Corporate
High Yield
Name Address Series 1
---- ------- --------
Units may also be sold to broker-dealers and others at prices
representing the per Unit concession or agency commission stated under "Public
Offering--Unit Distribution." However, resales of Units by such broker-dealers
and others to the public will be made at the Public Offering Price described in
the Prospectus. The Sponsor and the Distributor each reserves the right to
reject, in whole or in part, any order for the purchase of Units and the right
to change the amount of the concession or agency commission from time to time.
At various times the Sponsor may implement programs under which the
sales forces of the Underwriter, brokers, dealers, banks and/or others may be
eligible to win nominal awards for certain sales efforts, or under which the
Sponsor will reallow to any such Underwriter, brokers, dealers, banks and/or
others that sponsor sales contests or recognition programs conforming to
criteria established by the Sponsor, or participate in sales programs sponsored
by the Sponsor, an amount not exceeding the total applicable sales charges on
the sales generated by such person at the public offering price during such
programs. Also, the Sponsor in its discretion may from time to time pursuant to
objective criteria established by the Sponsor pay fees to the Underwriter,
brokers, dealers, banks or others for certain services or activities which are
primarily intended to result in sales of Units of the Trust. Such payments are
made by the Sponsor out of its own assets, and not out of the assets of the
Trust. These programs will not change the price Unitholders pay for their Units
or the amount that the Trust will receive from the Units sold.
OTHER MATTERS
LEGAL OPINIONS. The legality of the Units offered hereby and certain
matters relating to Federal and state tax law have been passed upon by Chapman
and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as counsel for the
Sponsor.
INDEPENDENT AUDITORS. The statements of net assets and the related
schedules of investments as of the opening of business on the Initial Date of
Deposit included in this Prospectus have been included herein in reliance upon
the report of KPMG Peat Marwick LLP, independent auditors, appearing elsewhere
herein and upon the authority of said firm as experts in accounting and
auditing.
DESCRIPTION OF BOND RATINGS*
STANDARD & POOR'S. A brief description of the applicable Standard &
Poor's rating symbols and their meanings follows:
A Standard & Poor's corporate or municipal bond rating is a current
assessment of the creditworthiness of an obligor with respect to a specific debt
obligation. This assessment may take into consideration obligors such as
guarantors, insurers, or lessees.
The bond rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.
The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. Standard
& Poor's does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in, or unavailability of, such
information, or for other circumstances.
- --------
* As published by the ratings companies.
The ratings are based, in varying degrees, on the following
considerations:
I. Likelihood of default--capacity and willingness of the
obligor as to the timely payment of interest and repayment of principal
in accordance with the terms of the obligation;
II. Nature of and provisions of the obligation;
III. Protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization or other
arrangements under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA - Bonds rated AAA have the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in small degree.
A - Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB - Bonds rated BBB are regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for bonds in this category than for bonds in higher rated categories.
BB, B, CCC, CC - Debt rated BB, B, CCC and CC is regarded, on balance,
as predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposure to adverse
conditions.
Plus (+) or Minus (-): The ratings from "AA" to "BBB" may be modified
by the addition of a plus or minus sign to show relative standing within the
major rating categories.
Provisional Ratings: The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of the
project being financed by the bonds being rated and indicates that payment of
debt service requirements is largely or entirely dependent upon the successful
and timely completion of the project. This rating, however, while addressing
credit quality subsequent to completion of the project, makes no comment on the
likelihood of, or the risk of default upon failure of, such completion. The
investor should exercise his/her own judgment with respect to such likelihood
and risk.
Credit Watch: Credit Watch highlights potential changes in ratings of
bonds and other fixed income securities. It focuses on events and trends which
place companies and government units under special surveillance by S&P's
180-member analytical staff. These may include mergers, voter referendums,
actions by regulatory authorities, or developments gleaned from analytical
reviews. Unless otherwise noted, a rating decision will be made within 90 days.
Issues appear on Credit Watch where an event, situation, or deviation from
trends occurred and needs to be evaluated as to its impact on credit ratings. A
listing, however, does not mean a rating change is inevitable. Since S&P
continuously monitors all of its ratings, Credit Watch is not intended to
include all issues under review. Thus, rating changes will occur without issues
appearing on Credit Watch.
MOODY'S. A brief description of the applicable Moody's rating symbols
and their meanings follows:
Aaa - Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues. Their
safety is so absolute that with the occasional exception of oversupply in a few
specific instances, characteristically, their market value is affected solely by
money market fluctuations.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risks appear somewhat larger than in Aaa securities.
Their market value is virtually immune to all but money market influences, with
the occasional exception of oversupply in a few specific instances.
A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future. The market value of A-rated bonds may be influenced to some degree by
economic performance during a sustained period of depressed business conditions,
but, during periods of normalcy, A-rated bonds frequently move in parallel with
Aaa and Aa obligations, with the occasional exception of oversupply in a few
specific instances.
A 1 and Baa 1 - Bonds which are rated A 1 and Baa 1 offer the maximum
in security within their quality group, can be bought for possible upgrading in
quality, and additionally, afford the investor an opportunity to gauge more
precisely the relative attractiveness of offerings in the market place.
Baa - Bonds which are rated Baa are considered as medium grade
obligations; I.E., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well. The market
value of Baa-rated bonds is more sensitive to changes in economic circumstances,
and aside from occasional speculative factors applying to some bonds of this
class, Baa market valuations will move in parallel with Aaa, Aa, and A
obligations during periods of economic normalcy, except in instances of
oversupply.
Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Moody's bond rating symbols may contain numerical modifiers of a
generic rating classification. The modifier 1 indicates that the bond ranks at
the high end of its category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its generic
rating category.
Con.(- - -) - Bonds for which the security depends upon the completion
of some act or the fulfillment of some condition are rated conditionally. These
are bonds secured by (a) earnings of projects under construction, (b) earnings
of projects unseasoned in operation experience, (c) rentals which begin when
facilities are completed, or (d) payments to which some other limiting condition
attaches. Parenthetical rating denotes probable credit stature upon completion
of construction or elimination of basis of condition.
FITCH INVESTORS SERVICE, L.P. A brief description of the applicable
Fitch rating symbols and their meanings follows:
AAA - These bonds are considered to be investment grade and of the
highest quality. The obligor has an extraordinary ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA - These bonds are considered to be' investment grade and of high
quality. The obligor's ability to pay interest and repay principal, which is
very strong, is somewhat less than for AAA-rated securities or more subject to
possible change over the term of the issue.
A - These bonds are considered to be investment grade and of good
quality. The obligor's ability to pay interest and repay principal is considered
to be strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.
BBB - These bonds are considered to be investment grade and of
satisfactory quality. The obligor's ability to pay interest and repay principal
is considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to weaken this ability than bonds with
higher ratings.
BB - These bonds are considered speculative and of low investment
grade. The obligor's ability to pay interest and repay principal is not strong
and is considered likely to be affected over time by adverse economic changes.
B - These bonds are considered highly speculative. Bonds in this class
are lightly protected as to the obligors ability to pay interest over the life
of the issue and repay principal when due.
A "+" or a "-" sign after a rating symbol indicates relative standing in its
rating.
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the Fund,
the Sponsor or the Underwriter. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, securities in any state to any
person to whom it is not lawful to make such offer in such state.
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TABLE OF CONTENTS
TITLE PAGE
SUMMARY OF ESSENTIAL
FINANCIAL INFORMATION.................. 3
THE FUND.................................... 5
INVESTMENT OBJECTIVES AND
PORTFOLIO SELECTION.................... 7
THE TRUST................................... 8
INDEPENDENT AUDITORS' REPORT................ 12
STATEMENT OF NET ASSETS..................... 13
RISK FACTORS................................ 14
ESTIMATED CURRENT RETURN AND
ESTIMATED LONG-TERM RETURN............. 18
TRUST OPERATING EXPENSES.................... 19
TAX STATUS.................................. 20
PUBLIC OFFERING............................. 25
RIGHTS OF UNITHOLDERS....................... 30
TRUST ADMINISTRATION........................ 35
UNDERWRITING................................ 39
OTHER MATTERS............................... 40
DESCRIPTION OF BOND RATINGS................. 44
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This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration statements
and exhibits relating thereto, which the Fund has filed with the Securities and
Exchange Commission, Washington, D.C., under the Securities Act of 1933 and the
Investment Company Act of 1940, and to which reference is hereby made.
P R O S P E C T U S
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___________, 1997
VOYAGEUR UNIT INVESTMENT TRUST,
SERIES 10
CORPORATE HIGH YIELD
SERIES 1
COHIG & ASSOCIATES, INC.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The consents of independent public accountants, rating services and
legal counsel
The following exhibits:
1.1 Standard Terms and Conditions of Trust - Voyageur Unit Investment Trust
Series 10 and Certain Subsequent Series (to be filed by Amendment).
1.2 Form of Trust Indenture and Agreement for Voyageur Unit Investment
Trust, Series 10 (to be filed by Amendment).
2. Opinion of counsel to the Sponsor as to legality of the Securities
being registered including a consent to the use of its name under the
headings "Tax Status" and "Legal Opinions" in the Prospectus and
opinion of counsel as to Federal income tax status of the securities
being registered and certain state tax matters (to be filed by
Amendment).
3. None.
4. Not Applicable.
5. Financial Data Schedules filed electronically as Exhibit(s) 27 pursuant
to Rule 401 of Regulation S-T (to be filed by Amendment).
6. Written Consents
(a) Consent of George K. Baum & Company (to be filed by Amendment)
(b) Consent of KPMG Peat Marwick LLP (to be filed by Amendment)
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Voyageur Unit Investment Trust, Series 10, has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Minneapolis and State of Minnesota on the 30th
day of April, 1997.
VOYAGEUR UNIT INVESTMENT TRUST, SERIES 10
(Registrant)
By: Voyageur Fund Managers, Inc.
(Depositor)
By Thomas J. Abood
---------------------------------
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on April 30, 1997.
SIGNATURE TITLE
Michael E. Dougherty
- --------------------------------
Michael E. Dougherty Chairman of the Board
and Director
John G. Taft
- --------------------------------
John G. Taft Chief Executive Officer
and Director
Edward J. Kohler
- --------------------------------
Edward J. Kohler Director
Frank C. Tonnemaker
- --------------------------------
Frank C. Tonnemaker Director
Jane M. Wyatt
- --------------------------------
Jane M. Wyatt Director
Thomas J. Abood
------------------------------
Thomas J. Abood
Thomas J. Abood signs this document pursuant to a Power of Attorney
filed with the Securities and Exchange Commission with the Registration
Statement on Form S-6 for Voyageur Tax-Exempt Trust, Series 5 (Registration No.
33-62682).
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