DEFINED ASSET FUNDS--REGISTERED TRADEMARK--
------------------------------
----------------------
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--319
(A UNIT INVESTMENT TRUST)
- CALIFORNIA, NEW JERSEY AND NEW YORK PORTFOLIOS
- PORTFOLIOS OF INTERMEDIATE AND LONG-TERM MUNICIPAL
BONDS
- DESIGNED TO BE FREE OF REGULAR FEDERAL INCOME TAX
- EXEMPT FROM SOME STATE TAXES
- MONTHLY DISTRIBUTIONS
SPONSORS:
MERRILL LYNCH,
PIERCE, FENNER & SMITH
INCORPORATED -----------------------------------------------------
SALOMON SMITH BARNEY INC. The Securities and Exchange Commission has not
PRUDENTIAL SECURITIES approved or disapproved these Securities or passed
INC. upon the adequacy of this prospectus. Any
PAINEWEBBER INCORPORATED representation to the contrary is a criminal offense.
DEAN WITTER REYNOLDS INC. Prospectus dated February 25, 2000.
<PAGE>
- --------------------------------------------------------------------------------
Defined Asset Funds--Registered Trademark--
Defined Asset Funds-Registered Trademark- is America's oldest and largest family
of unit investment trusts, with over $160 billion sponsored over the last 28
years. Defined Asset Funds has been a leader in unit investment trust research
and product innovation. Our family of Funds helps investors work toward their
financial goals with a full range of quality investments, including municipal,
corporate and government bond portfolios, as well as domestic and international
equity portfolios.
Defined Asset Funds offer a number of advantages:
- A Disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
- Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
- Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
- Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
- Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.
THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF NOVEMBER 30, 1999, THE
EVALUATION DATE.
<TABLE>
<S> <C>
CONTENTS
PAGE
---
California Intermediate Insured
Portfolio--
Risk/Return Summary................ 3
California Insured
Portfolio--Risk/Return Summary..... 6
New Jersey Insured
Portfolio--Risk/Return Summary..... 9
New York Portfolio--
Risk/Return Summary................ 12
What You Can Expect From Your
Investment......................... 16
Monthly Income..................... 16
Return Figures..................... 16
Records and Reports................ 16
The Risks You Face................... 17
Interest Rate Risk................. 17
Call Risk.......................... 17
Reduced Diversification Risk....... 17
Liquidity Risk..................... 17
Concentration Risk................. 17
State Concentration Risk........... 18
Bond Quality Risk.................. 20
Insurance Related Risk............. 20
Litigation and Legislation Risks... 20
Selling or Exchanging Units.......... 21
Sponsors' Secondary Market......... 21
Selling Units to the Trustee....... 21
Exchange Option.................... 22
How The Fund Works................... 22
Pricing............................ 22
Evaluations........................ 22
Income............................. 23
Expenses........................... 23
Portfolio Changes.................. 23
Fund Termination................... 24
Certificates....................... 24
Trust Indenture.................... 24
Legal Opinion...................... 25
Auditors........................... 25
Sponsors........................... 25
Trustee............................ 26
Underwriters' and Sponsors'
Profits.......................... 26
Public Distribution................ 26
Code of Ethics..................... 26
Taxes................................ 27
Supplemental Information............. 29
Financial Statements................. D-1
</TABLE>
2
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA INTERMEDIATE INSURED PORTFOLIO--RISK/RETURN SUMMARY
<TABLE>
<C> <S>
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is
exempt from regular federal income taxes
and some state and local taxes by
investing in a fixed portfolio
consisting primarily of insured,
intermediate term municipal revenue
bonds with an estimated average life of
about 10 years.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued
by states, municipalities and public
authorities to finance the cost of
buying, building or improving various
projects intended to generate revenue,
such as airports, health care
facilities, housing and municipal
electric, water and sewer utilities.
Generally, payments on these bonds
depend solely on the revenues generated
by the projects, excise taxes or state
appropriations, and are not backed by
the government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 7
intermediate-term tax-exempt municipal
bonds, and some short-term bonds
reserved to pay the deferred sales fee,
with an aggregate face amount of
$2,820,000.
- The Fund is a unit investment trust
which means that, unlike a mutual fund,
the Portfolio is not managed.
- The bonds are rated AAA or Aaa by
Standard & Poor's, Moody's or Fitch.
- Many of the bonds can be called at a
premium declining over time to par
value. Some bonds may be called earlier
at par for extraordinary reasons.
- 100% of the bonds are insured by
insurance companies that guarantee
timely payments of principal and
interest on the bonds (but not Fund
units or the market value of the bonds
before they mature).
The Portfolio consists of municipal
bonds of the following types:
</TABLE>
<TABLE>
/ / General Obligation 8%
<S> <C>
/ / Hospitals/Health Care 18%
/ / Lease Rental Appropriation 18%
/ / Municipal Water/Sewer
Utilities 26%
/ / Tax Allocation 30%
</TABLE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
municipal water/sewer utility and tax
allocation bonds, adverse developments in
these sectors may affect the value of
your units.
- Assuming no changes in interest rates,
when you sell your units, they will
generally be worth less than your cost
because your cost included a sales fee.
- The Fund will receive early returns of
principal if bonds are called or sold
before they mature. If this happens your
income will decline and you may not be
able to reinvest the money you receive at
as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN
BONDS OF CALIFORNIA SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO CALIFORNIA
WHICH ARE BRIEFLY DESCRIBED UNDER STATE
CONCENTRATION RISKS LATER IN THIS
PROSPECTUS.
</TABLE>
3
<PAGE>
<TABLE>
<C> <S>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free
income. You will benefit from a
professionally selected and supervised
portfolio whose risk is reduced by
investing in insured bonds of several
different issuers.
The Fund is NOT appropriate for you if
you want a speculative investment that
changes to take advantage of market
movements, if you do not want a
tax-advantaged investment or if you
cannot tolerate any risk.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
WHAT YOU MAY EXPECT (Payable on the 25th day
of the month to holders of record on the
10th day of the month):
Regular Monthly Income per unit $ 3.75
Annual Income per unit: $45.07
THESE FIGURES ARE ESTIMATES DETERMINED ON THE
EVALUATION DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.75%
You will pay an up-front sales fee of 1.005%, as well
as a total deferred sales fee of $16.75 per unit (paid
in quarterly installments November, February, May and
August through February, 2001). Employees of some of
the Sponsors and their affiliates may pay a reduced
sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at
least $100,000, as follows:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
Less than $100,000 2.75%
$100,000 to $249,999 2.50%
$250,000 to $499,999 2.25%
$500,000 to $999,999 2.00%
$1,000,000 and over 1.75%
Maximum Exchange Fee 1.75%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$0.71
Trustee's Fee
$0.56
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$0.47
Evaluator's Fee
$0.20
Organization Costs
$0.55
Other Operating Expenses
-----
$2.49
TOTAL
</TABLE>
<TABLE>
<C> <S>
The Sponsors historically paid organization
costs and updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
IN THE FOLLOWING CHART WE SHOW PAST PERFORMANCE
OF PRIOR CALIFORNIA PORTFOLIOS, WHICH HAD
INVESTMENT OBJECTIVES, STRATEGIES AND TYPES OF
BONDS SUBSTANTIALLY SIMILAR TO THIS FUND. THESE
PRIOR SERIES DIFFERED IN THAT THEY CHARGED A
HIGHER SALES FEE. These prior California Series
were offered between June 22, 1988 and
September 27, 1996 and were outstanding on
December 31, 1999. OF COURSE, PAST PERFORMANCE
OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
REFLECTING ALL EXPENSES. FOR PERIODS ENDED
12/31/99.
</TABLE>
-------------------------------------------------------------------
<TABLE>
High 3.14% 6.73% 5.38% 3.54% 7.92% 5.97%
<S> <C> <C> <C> <C> <C> <C>
Average -3.57 5.28 5.21 -1.71 6.34 5.80
Low -8.58 2.79 5.04 -6.00 3.55 5.63
</TABLE>
-----------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Average
Sales fee 1.96% 5.20% 5.82%
</TABLE>
-----------------------------------------------------------
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
<TABLE>
<C> <S>
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed
and bonds are not sold because of market
changes. Rather, experienced Defined Asset Funds
financial analysts regularly review the bonds in
the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
</TABLE>
4
<PAGE>
<TABLE>
<C> <S>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the
Sponsors and other broker-dealers. The
Sponsors are listed later in this
prospectus. Some banks may offer units
for sale through special arrangements
with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,006.68
(as of November 30, 1999)
Unit price is based on the net asset
value of the Fund plus the sales fee.
An amount equal to any principal cash,
as well as net accrued but
undistributed interest on the unit, is
added to the unit price. An independent
evaluator prices the bonds at 3:30 p.m.
Eastern time every business day. Unit
price changes every day with changes in
the prices of the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to
any Sponsor or the Trustee for the net
asset value determined at the close of
business on the date of sale, less any
remaining deferred sales fee. You will
not pay any other fee when you sell
your units.
</TABLE>
<TABLE>
<C> <S>
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each
bond was issued, interest on the bonds
in this Fund is generally 100% exempt
from regular federal income tax. Your
income may also be exempt from some
California state and local personal
income taxes if you live in California.
You will also receive principal payments
if bonds are sold or called or mature,
when the cash available is more than
$5.00 per unit. You will be subject to
tax on any gain realized by the Fund on
the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash
unless you choose to compound your
income by reinvesting at no sales fee in
the Municipal Fund Investment
Accumulation Program, Inc. This program
is an open-end mutual fund with a
comparable investment objective, but the
bonds will generally not be insured.
Income from this program will generally
be subject to state and local income
taxes. FOR MORE COMPLETE INFORMATION
ABOUT THE PROGRAM, INCLUDING CHARGES AND
FEES, ASK THE TRUSTEE FOR THE PROGRAM'S
PROSPECTUS. READ IT CAREFULLY BEFORE YOU
INVEST. THE TRUSTEE MUST RECEIVE YOUR
WRITTEN ELECTION TO REINVEST AT LEAST 10
DAYS BEFORE THE RECORD DAY OF AN INCOME
PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for
units of certain other Defined Asset
Funds. You may also exchange into this
Fund from certain other funds. We charge
a reduced sales fee on exchanges.
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA INSURED PORTFOLIO--RISK/RETURN SUMMARY
<TABLE>
<C> <S>
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is
exempt from regular federal income taxes
and some state and local taxes by
investing in a fixed portfolio
consisting primarily of insured, long
term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued
by states, municipalities and public
authorities to finance the cost of
buying, building or improving various
projects intended to generate revenue,
such as airports, health care
facilities, housing and municipal
electric, water and sewer utilities.
Generally, payments on these bonds
depend solely on the revenues generated
by the projects, excise taxes or state
appropriations, and are not backed by
the government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 8
long-term tax-exempt municipal bonds,
and some short-term bonds reserved to
pay the deferred sales fee, with an
aggregate face amount of $3,775,000.
- The Fund is a unit investment trust
which means that, unlike a mutual fund,
the Portfolio is not managed.
- The bonds are rated AAA or Aaa by
Standard & Poor's, Moody's or Fitch.
- Many of the bonds can be called at a
premium declining over time to par
value. Some bonds may be called earlier
at par for extraordinary reasons.
- 100% of the bonds are insured by
insurance companies that guarantee
timely payments of principal and
interest on the bonds (but not Fund
units or the market value of the bonds
before they mature).
The Portfolio consists of municipal
bonds of the following types:
</TABLE>
<TABLE>
/ / Hospitals/Health Care 27%
<S> <C>
/ / Housing 19%
/ / Lease Rental Appropriation 11%
/ / Municipal Water/Sewer
Utilities 23%
/ / Special Tax 20%
</TABLE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
hospital/health care and bonds, adverse
developments in this sector may affect
the value of your units.
- Assuming no changes in interest rates,
when you sell your units, they will
generally be worth less than your cost
because your cost included a sales fee.
- The Fund will receive early returns of
principal if bonds are called or sold
before they mature. If this happens your
income will decline and you may not be
able to reinvest the money you receive
at as high a yield or as long a
maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN
BONDS OF CALIFORNIA SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO
CALIFORNIA WHICH ARE BRIEFLY DESCRIBED
UNDER STATE CONCENTRATION RISKS LATER IN
THIS PROSPECTUS.
</TABLE>
6
<PAGE>
<TABLE>
<C> <S>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free
income. You will benefit from a
professionally selected and supervised
portfolio whose risk is reduced by
investing in insured bonds of several
different issuers.
The Fund is NOT appropriate for you if
you want a speculative investment that
changes to take advantage of market
movements, if you do not want a
tax-advantaged investment or if you
cannot tolerate any risk.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
WHAT YOU MAY EXPECT (Payable on the 25th day
of the month to holders of record on the
10th day of the month):
Regular Monthly Income per unit $ 4.00
Annual Income per unit: $48.11
THESE FIGURES ARE ESTIMATES DETERMINED ON THE
EVALUATION DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
You will pay an up-front sales fee of 1.125%, as well
as a total deferred sales fee of $18.75 per unit (paid
in quarterly installments November, February, May and
August through February, 2001). Employees of some of
the Sponsors and their affiliates may pay a reduced
sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at
least $100,000, as follows:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$0.71
Trustee's Fee
$0.56
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$0.33
Evaluator's Fee
$0.20
Organization Costs
$0.52
Other Operating Expenses
-----
$2.32
TOTAL
</TABLE>
<TABLE>
<C> <S>
The Sponsors historically paid organization
costs and updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
IN THE FOLLOWING CHART WE SHOW PAST PERFORMANCE
OF PRIOR CALIFORNIA PORTFOLIOS, WHICH HAD
INVESTMENT OBJECTIVES, STRATEGIES AND TYPES OF
BONDS SUBSTANTIALLY SIMILAR TO THIS FUND. THESE
PRIOR SERIES DIFFERED IN THAT THEY CHARGED A
HIGHER SALES FEE. These prior California Series
were offered between June 22, 1988 and
September 27, 1996 and were outstanding on
December 31, 1999. OF COURSE, PAST PERFORMANCE
OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
REFLECTING ALL EXPENSES. FOR PERIODS ENDED
12/31/99.
</TABLE>
-------------------------------------------------------------------
<TABLE>
High 3.14% 6.73% 5.38% 3.54% 7.92% 5.97%
<S> <C> <C> <C> <C> <C> <C>
Average -3.57 5.28 5.21 -1.71 6.34 5.80
Low -8.58 2.79 5.04 -6.00 3.55 5.63
</TABLE>
-----------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Average
Sales fee 1.96% 5.20% 5.82%
</TABLE>
-----------------------------------------------------------
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
<TABLE>
<C> <S>
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed
and bonds are not sold because of market
changes. Rather, experienced Defined Asset Funds
financial analysts regularly review the bonds in
the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
</TABLE>
7
<PAGE>
<TABLE>
<C> <S>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the
Sponsors and other broker-dealers. The
Sponsors are listed later in this
prospectus. Some banks may offer units
for sale through special arrangements
with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $917.14
(as of November 30, 1999)
Unit price is based on the net asset
value of the Fund plus the sales fee. An
amount equal to any principal cash, as
well as net accrued but undistributed
interest on the unit, is added to the
unit price. An independent evaluator
prices the bonds at 3:30 p.m. Eastern
time every business day. Unit price
changes every day with changes in the
prices of the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to
any Sponsor or the Trustee for the net
asset value determined at the close of
business on the date of sale, less any
remaining deferred sales fee. You will
not pay any other fee when you sell your
units.
</TABLE>
<TABLE>
<C> <S>
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each
bond was issued, interest on the bonds
in this Fund is generally 100% exempt
from regular federal income tax. Your
income may also be exempt from some
California state and local personal
income taxes if you live in California.
You will also receive principal payments
if bonds are sold or called or mature,
when the cash available is more than
$5.00 per unit. You will be subject to
tax on any gain realized by the Fund on
the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash
unless you choose to compound your
income by reinvesting at no sales fee in
the Municipal Fund Investment
Accumulation Program, Inc. This program
is an open-end mutual fund with a
comparable investment objective, but the
bonds generally will not be insured.
Income from this program will generally
be subject to state and local income
taxes. FOR MORE COMPLETE INFORMATION
ABOUT THE PROGRAM, INCLUDING CHARGES AND
FEES, ASK THE TRUSTEE FOR THE PROGRAM'S
PROSPECTUS. READ IT CAREFULLY BEFORE YOU
INVEST. THE TRUSTEE MUST RECEIVE YOUR
WRITTEN ELECTION TO REINVEST AT LEAST 10
DAYS BEFORE THE RECORD DAY OF AN INCOME
PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for
units of certain other Defined Asset
Funds. You may also exchange into this
Fund from certain other funds. We charge
a reduced sales fee on exchanges.
</TABLE>
8
<PAGE>
- --------------------------------------------------------------------------------
NEW JERSEY INSURED PORTFOLIO--RISK/RETURN SUMMARY
<TABLE>
<C> <S>
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is
exempt from regular federal income taxes
and some state and local taxes by
investing in a fixed portfolio
consisting primarily of insured, long
term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued
by states, municipalities and public
authorities to finance the cost of
buying, building or improving various
projects intended to generate revenue,
such as airports, health care
facilities, housing and municipal
electric, water and sewer utilities.
Generally, payments on these bonds
depend solely on the revenues generated
by the projects, excise taxes or state
appropriations, and are not backed by
the government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 7
long-term tax-exempt municipal bonds,
and some short-term bonds reserved to
pay the deferred sales fee, with an
aggregate face amount of $3,305,000.
- The Fund is a unit investment trust
which means that, unlike a mutual fund,
the Portfolio is not managed.
- The bonds are rated AAA or Aaa by
Standard & Poor's, Moody's or Fitch.
- Many of the bonds can be called at a
premium declining over time to par
value. Some bonds may be called earlier
at par for extraordinary reasons.
- 100% of the bonds are insured by
insurance companies that guarantee
timely payments of principal and
interest on the bonds (but not Fund
units or the market value of the bonds
before they mature).
The Portfolio consists of municipal
bonds of the following types:
</TABLE>
<TABLE>
/ / Airports/Ports/Highways 33%
<S> <C>
/ / General Obligation 2%
/ / Hospitals/Health Care 24%
/ / Housing 14%
/ / Lease Rental Appropriation 10%
/ / Municipal Water/Sewer
Utilities 17%
</TABLE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
airport/port/highway bonds, adverse
developments in this sector may affect
the value of your units.
- Assuming no changes in interest rates,
when you sell your units, they will
generally be worth less than your cost
because your cost included a sales fee.
- The Fund will receive early returns of
principal if bonds are called or sold
before they mature. If this happens your
income will decline and you may not be
able to reinvest the money you receive
at as high a yield or as long a
maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN
BONDS OF NEW JERSEY SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO NEW
JERSEY WHICH ARE BRIEFLY DESCRIBED UNDER
STATE CONCENTRATION RISKS LATER IN THIS
PROSPECTUS.
</TABLE>
9
<PAGE>
<TABLE>
<C> <S>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free
income. You will benefit from a
professionally selected and supervised
portfolio whose risk is reduced by
investing in insured bonds of several
different issuers.
The Fund is NOT appropriate for you if
you want a speculative investment that
changes to take advantage of market
movements, if you do not want a
tax-advantaged investment or if you
cannot tolerate any risk.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
WHAT YOU MAY EXPECT (Payable on the 25th day
of the month to holders of record on the
10th day of the month):
Regular Monthly Income per unit $ 4.01
Annual Income per unit: $48.21
THESE FIGURES ARE ESTIMATES DETERMINED ON THE
EVALUATION DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
You will pay an up-front sales fee of 1.125%, as well
as a total deferred sales fee of $18.75 per unit (paid
in quarterly installments November, February, May and
August through February, 2001). Employees of some of
the Sponsors and their affiliates may pay a reduced
sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at
least $100,000, as follows:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$0.72
Trustee's Fee
$0.56
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$0.40
Evaluator's Fee
$0.20
Organization Costs
$0.44
Other Operating Expenses
-----
$2.32
TOTAL
</TABLE>
<TABLE>
<C> <S>
The Sponsors historically paid organization
costs and updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
IN THE FOLLOWING CHART WE SHOW PAST PERFORMANCE
OF PRIOR NEW JERSEY PORTFOLIOS, WHICH HAD
INVESTMENT OBJECTIVES, STRATEGIES AND TYPES OF
BONDS SUBSTANTIALLY SIMILAR TO THIS FUND. THESE
PRIOR SERIES DIFFERED IN THAT THEY CHARGED A
HIGHER SALES FEE. These prior New Jersey Series
were offered between June 22, 1988 and
September 19, 1996 and were outstanding on
December 31, 1999. OF COURSE, PAST PERFORMANCE
OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
REFLECTING ALL EXPENSES. FOR PERIODS ENDED
12/31/99.
</TABLE>
-------------------------------------------------------------------
<TABLE>
High 3.61% 6.45% 5.47% 3.71% 7.64% 6.06%
<S> <C> <C> <C> <C> <C> <C>
Average -3.01 5.09 5.32 -1.25 6.16 5.88
Low -8.81 3.02 4.98 -6.13 3.73 5.57
</TABLE>
-----------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Average
Sales fee 1.86% 5.30% 5.54%
</TABLE>
-----------------------------------------------------------
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
<TABLE>
<C> <S>
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and
bonds are not sold because of market changes.
Rather, experienced Defined Asset Funds financial
analysts regularly review the bonds in the Fund.
The Fund may sell a bond if certain adverse
credit or other conditions exist.
</TABLE>
10
<PAGE>
<TABLE>
<C> <S>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the
Sponsors and other broker-dealers. The
Sponsors are listed later in this
prospectus. Some banks may offer units
for sale through special arrangements
with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $934.52
(as of November 30, 1999)
Unit price is based on the net asset
value of the Fund plus the sales fee. An
amount equal to any principal cash, as
well as net accrued but undistributed
interest on the unit, is added to the
unit price. An independent evaluator
prices the bonds at 3:30 p.m. Eastern
time every business day. Unit price
changes every day with changes in the
prices of the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to
any Sponsor or the Trustee for the net
asset value determined at the close of
business on the date of sale, less any
remaining deferred sales fee. You will
not pay any other fee when you sell your
units.
</TABLE>
<TABLE>
<C> <S>
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each
bond was issued, interest on the bonds in
this Fund is generally 100% exempt from
regular federal income tax. Your income
may also be exempt from some New Jersey
state and local personal income taxes if
you live in New Jersey.
You will also receive principal payments
if bonds are sold or called or mature,
when the cash available is more than
$5.00 per unit. You will be subject to
tax on any gain realized by the Fund on
the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash
unless you choose to compound your income
by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation
Program, Inc. This program is an open-end
mutual fund with a comparable investment
objective, but the bonds generally will
not be insured. Income from this program
will generally be subject to state and
local income taxes. FOR MORE COMPLETE
INFORMATION ABOUT THE PROGRAM, INCLUDING
CHARGES AND FEES, ASK THE TRUSTEE FOR THE
PROGRAM'S PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST. THE TRUSTEE MUST
RECEIVE YOUR WRITTEN ELECTION TO REINVEST
AT LEAST 10 DAYS BEFORE THE RECORD DAY OF
AN INCOME PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for
units of certain other Defined Asset
Funds. You may also exchange into this
Fund from certain other funds. We charge
a reduced sales fee on exchanges.
</TABLE>
11
<PAGE>
- --------------------------------------------------------------------------------
NEW YORK PORTFOLIO--RISK/RETURN SUMMARY
<TABLE>
<C> <S>
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is
exempt from regular federal income taxes
and some state and local taxes by
investing in a fixed portfolio
consisting primarily of long term
municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued
by states, municipalities and public
authorities to finance the cost of
buying, building or improving various
projects intended to generate revenue,
such as airports, health care
facilities, housing and municipal
electric, water and sewer utilities.
Generally, payments on these bonds
depend solely on the revenues generated
by the projects, excise taxes or state
appropriations, and are not backed by
the government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 7
long-term tax-exempt municipal bonds,
any some short-term bonds reserved to
pay the deferred sales fee, with an
aggregate face amount of $4,735,000.
- The Fund is a unit investment trust
which means that, unlike a mutual fund,
the Portfolio is not managed.
- When the bonds were initially deposited
they were rated A or better by Standard
& Poor's, Moody's or Fitch. THE QUALITY
OF THE BONDS MAY CURRENTLY BE LOWER.
- Many of the bonds can be called at a
premium declining over time to par
value. Some bonds may be called earlier
at par for extraordinary reasons.
- 28% of the bonds are insured by
insurance companies.
- 16% of the bonds are backed by bank
letters of credit.
- Letters of credit and insurance
guarantee timely payments of principal
and interest on the bonds (but not Fund
units on the market value of the bonds
before they mature).
The Portfolio consists of municipal
bonds of the following types:
</TABLE>
<TABLE>
/ / Airports/Ports/Highways 11%
<S> <C>
/ / General Obligation 18%
/ / Hospitals/Health Care 29%
/ / Lease Rental Appropriation 12%
/ / Refunded Bonds 16%
/ / Universities/Colleges 14%
</TABLE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
hospital/health care bonds, adverse
developments in this sector may affect
the value of your units.
- Assuming no changes in interest rates,
when you sell your units, they will
generally be worth less than your cost
because your cost included a sales fee.
- The Fund will receive early returns of
principal if bonds are called or sold
before they mature. If this happens your
income will decline and you may not be
able to reinvest the money you receive
at as high a yield or as long a
maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN
BONDS OF NEW YORK SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO NEW YORK
WHICH ARE BRIEFLY DESCRIBED UNDER STATE
CONCENTRATION RISKS LATER IN THIS
PROSPECTUS.
</TABLE>
12
<PAGE>
<TABLE>
<C> <S>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free
income. You will benefit from a
professionally selected and supervised
portfolio whose risk is reduced by
investing in bonds of several different
issuers.
The Fund is NOT appropriate for you if
you want a speculative investment that
changes to take advantage of market
movements, if you do not want a
tax-advantaged investment or if you
cannot tolerate any risk.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
WHAT YOU MAY EXPECT (Payable on the 25th day
of the month to holders of record on the
10th day of the month):
Regular Monthly Income per unit $ 4.24
Annual Income per unit: $50.93
THESE FIGURES ARE ESTIMATES DETERMINED ON THE
EVALUATION DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
You will pay an up-front sales fee of 1.125%, as well
as a total deferred sales fee of $18.75 per unit (paid
in quarterly installments November, February, May and
August, through February, 2001). Employees of some of
the Sponsors and their affiliates may pay a reduced
sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at
least $100,000, as follows:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$0.74
Trustee's Fee
$0.57
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$0.28
Evaluator's Fee
$0.20
Organization Costs
$0.33
Other Operating Expenses
-----
$2.12
TOTAL
</TABLE>
<TABLE>
<C> <S>
The Sponsors historically paid organization
costs and updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
IN THE FOLLOWING CHART WE SHOW PAST PERFORMANCE
OF PRIOR NEW YORK PORTFOLIOS, WHICH HAD
INVESTMENT OBJECTIVES, STRATEGIES AND TYPES OF
BONDS SUBSTANTIALLY SIMILAR TO THIS FUND. THESE
PRIOR SERIES DIFFERED IN THAT THEY CHARGED A
HIGHER SALES FEE. These prior New York Series
were offered between January 14, 1988 and
October 16, 1996 and were outstanding on
December 31, 1999. OF COURSE, PAST PERFORMANCE
OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
REFLECTING ALL EXPENSES. FOR PERIODS ENDED
12/31/99.
</TABLE>
-------------------------------------------------------------------
<TABLE>
High 3.92% 6.86% 5.82% 4.47% 8.06% 6.35%
<S> <C> <C> <C> <C> <C> <C>
Average -3.75 4.82 5.44 -1.84 5.84 6.03
Low -12.35 3.05 5.21 -9.84 3.83 5.79
</TABLE>
-----------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Average
Sales fee 2.01% 5.02% 5.77%
</TABLE>
-----------------------------------------------------------
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
<TABLE>
<C> <S>
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and
bonds are not sold because of market changes.
Rather, experienced Defined Asset Funds financial
analysts regularly review the bonds in the Fund.
The Fund may sell a bond if certain adverse
credit or other conditions exist.
</TABLE>
13
<PAGE>
<TABLE>
<C> <S>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the
Sponsors and other broker-dealers. The
Sponsors are listed later in this
prospectus. Some banks may offer units
for sale through special arrangements
with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $989.25
(as of November 30, 1999)
Unit price is based on the net asset
value of the Fund plus the sales fee. An
amount equal to any principal cash, as
well as net accrued but undistributed
interest on the unit, is added to the
unit price. An independent evaluator
prices the bonds at 3:30 p.m. Eastern
time every business day. Unit price
changes every day with changes in the
prices of the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to
any Sponsor or the Trustee for the net
asset value determined at the close of
business on the date of sale, less any
remaining deferred sales fee. You will
not pay any other fee when you sell your
units.
</TABLE>
<TABLE>
<C> <S>
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each
bond was issued, interest on the bonds in
this Fund is generally 100% exempt from
regular federal income tax. Your income
may also be exempt from some New York
state and local personal income taxes if
you live in New York.
You will also receive principal payments
if bonds are sold or called or mature,
when the cash available is more than
$5.00 per unit. You will be subject to
tax on any gain realized by the Fund on
the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash
unless you choose to compound your income
by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation
Program, Inc. This program is an open-end
mutual fund with a comparable investment
objective. Income from this program will
generally be subject to state and local
income taxes. FOR MORE COMPLETE
INFORMATION ABOUT THE PROGRAM, INCLUDING
CHARGES AND FEES, ASK THE TRUSTEE FOR THE
PROGRAM'S PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST. THE TRUSTEE MUST
RECEIVE YOUR WRITTEN ELECTION TO REINVEST
AT LEAST 10 DAYS BEFORE THE RECORD DAY OF
AN INCOME PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for
units of certain other Defined Asset
Funds. You may also exchange into this
Fund from certain other funds. We charge
a reduced sales fee on exchanges.
</TABLE>
14
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR CALIFORNIA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 2000* TAX-FREE YIELD OF
SINGLE RETURN 7% 7.5% 8%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 26,250 $ $0- 43,050 20.10 3.75 4.38 5.01 5.63 6.26 6.88 7.51
$ 26,251- 63,550 $ 43,851-105,950 34.70 4.59 5.36 6.13 6.89 7.66 8.42 9.19
$ 63,551-132,600 $105,951-161,450 37.42 4.79 5.59 6.39 7.19 7.99 8.79 9.59
$132,601-288,350 $161,451-288,350 41.95 5.17 6.03 6.89 7.75 8.61 9.47 10.34
OVER $288,350 OVER $288,350 45.22 5.48 6.39 7.30 8.21 9.13 10.04 10.95
<S> <C> <C> <C> <C>
$ 0- 26,250 8.14 8.76 9.39 10.01
$ 26,251- 63,550 9.95 10.72 11.48 12.25
$ 63,551-132,600 10.39 11.19 11.98 12.78
$132,601-288,350 11.20 12.06 12.92 13.78
OVER $288,350 11.87 12.78 13.69 14.60
</TABLE>
FOR NEW JERSEY RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 2000* TAX-FREE YIELD OF
SINGLE RETURN 7.% 7.5% 8.%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 26,250 $ $0- 43,850 16.49 4.79 5.39 5.99 6.59 7.18 7.78 8.38
$ 26,251- 63,550 $ 43,851-105,950 31.98 5.88 6.62 7.35 8.09 8.82 9.56 10.29
$ 63,551-132,600 $105,951-161,450 35.40 6.19 6.97 7.74 8.51 9.29 10.06 10.84
$132,601-288,350 $161,451-288,350 40.08 6.68 7.51 8.34 9.18 10.01 10.85 11.68
OVER $288,350 OVER $288,350 43.45 7.07 7.96 8.84 9.73 10.61 11.49 12.38
<S> <C> <C>
$ 0- 26,250 8.98 9.58
$ 26,251- 63,550 11.03 11.76
$ 63,551-132,600 11.61 12.38
$132,601-288,350 12.52 13.35
OVER $288,350 13.26 14.15
</TABLE>
FOR NEW YORK CITY RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 2000* TAX-FREE YIELD OF
SINGLE RETURN 7% 8%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 43,850 23.94 5.26 5.92 6.57 7.23 7.89 8.55 9.20
$ 0- 26,250 23.99 5.26 5.92 6.58 7.24 7.89 8.55 9.21
$ 26,251- 63,550 $ 43,851-105,950 35.65 6.22 6.99 7.77 8.55 9.32 10.10 10.88
$ 63,551-132,600 $105,951-161,450 38.33 6.49 7.30 8.11 8.92 9.73 10.54 11.35
$132,601-288,350 $161,451-288,350 42.80 6.99 7.87 8.74 9.62 10.49 11.36 12.24
OVER $288,350 OVER $288,350 46.02 7.41 8.34 9.26 10.19 11.12 12.04 12.97
<S> <C> <C>
9.86 10.52
$ 0- 26,250 9.87 10.52
$ 26,251- 63,550 11.66 12.43
$ 63,551-132,600 12.16 12.97
$132,601-288,350 13.11 13.99
OVER $288,350 13.89 14.82
</TABLE>
FOR NEW YORK STATE RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 2000* TAX-FREE YIELD OF
SINGLE RETURN 7% 8%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 26,250 $ $0- 43,850 20.82 5.05 5.68 6.31 6.95 7.58 8.21 8.84
$ 26,251- 63,550 $ 43,851-105,950 32.93 5.96 6.71 7.46 8.20 8.95 9.69 10.44
$ 63,551-132,600 $105,951-161,450 35.73 6.22 7.00 7.78 8.56 9.34 10.11 10.89
$132,601-288,350 $161,451-288,350 40.38 6.71 7.55 8.39 9.23 10.06 10.90 11.74
OVER $288,350 OVER $288,350 43.74 7.11 8.00 8.89 9.78 10.66 11.55 12.44
<S> <C> <C>
$ 0- 26,250 9.47 10.10
$ 26,251- 63,550 11.18 11.93
$ 63,551-132,600 11.67 12.45
$132,601-288,350 12.58 13.42
OVER $288,350 13.33 14.22
</TABLE>
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates 2000
federal and applicable State (and City) income tax rates and assumes that all
income would otherwise be taxed at the investor's highest tax rate. Yield
figures are for example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions or the possible partial disallowance of
deductions. Consequently, investors are urged to consult their own tax advisers
in this regard.
15
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
- elimination of one or more bonds from the Fund's portfolio because of calls,
redemptions or sales;
- a change in the Fund's expenses; or
- the failure by a bond's issuer to pay interest.
Changes in interest rates generally will not affect your income because the
portfolio is fixed.
Along with your income, you will receive your share of any available bond
principal.
RETURN FIGURES
We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.
ESTIMATED CURRENT RETURN equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):
<TABLE>
<S> <C> <C>
Estimated Annual Estimated
Interest Income - Annual Expenses
- -------------------------------------
Unit Price
</TABLE>
ESTIMATED LONG TERM RETURN is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.
Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.
These return quotations are designed to be comparative rather than predictive.
RECORDS AND REPORTS
You will receive:
- - a monthly statement of income payments and any principal payments;
- - a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
- - an annual report on Fund activity; and
- - annual tax information. THIS WILL ALSO BE SENT TO THE IRS. YOU MUST REPORT THE
AMOUNT OF TAX-EXEMPT INTEREST RECEIVED DURING THE YEAR.
You may request:
- - copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
- - audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
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THE RISKS YOU FACE
INTEREST RATE RISK
Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, bonds with longer maturities will
change in value more than bonds with shorter maturities. Bonds in the Fund are
more likely to be called when interest rates decline. This would result in early
returns of principal to you and may result in early termination of the Fund. Of
course, we cannot predict how interest rates may change.
CALL RISK
Many bonds can be prepaid or "called" by the issuer before their stated
maturity.
For example, some bonds may be required to be called pursuant to mandatory
sinking fund provisions.
Also, an issuer might call its bonds during periods of falling interest rates,
if the issuer's bonds have a coupon higher than current market rates.
An issuer might call its bonds in extraordinary cases, including if:
- it no longer needs the money for the original purpose;
- the project is condemned or sold;
- the project is destroyed and insurance proceeds are used to redeem the
bonds;
- any related credit support expires and is not replaced; or
- interest on the bonds become taxable.
If the bonds are called, your income will decline and you may not be able to
reinvest the money you receive at as high a yield or as long a maturity. An
early call at par of a premium bond will reduce your return.
REDUCED DIVERSIFICATION RISK
If many investors sell their units, the Fund will have to sell bonds. This could
reduce the diversification of your investment and increase your share of Fund
expenses.
LIQUIDITY RISK
You can always sell back your units, but we cannot assure you that a liquid
trading market will always exist for the bonds in the portfolio, especially
since current law may restrict the Fund from selling bonds to any Sponsor. The
bonds will generally trade in the over-the-counter market. The value of the
bonds, and of your investment, may be reduced if trading in bonds is limited or
absent.
CONCENTRATION RISK
When a certain type of bond makes up 25% or more of the portfolio, it is said to
be "concentrated" in that bond type, which makes the Portfolio less diversified.
Here is what you should know about the California and New York Portfolios'
concentrations in hospital and health care bonds.
- payment for these bonds depends on revenues from private third-party payors
and government programs, including Medicare and Medicaid, which have
generally undertaken cost containment measures to limit payments to health
care providers;
- hospitals face increasing competition resulting from hospital mergers and
affiliations;
- hospitals need to reduce costs as HMOs increase market penetration and
hospital supply and drug companies raise prices;
- hospitals and health care providers are subject to various legal claims by
patients
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and others and are adversely affected by increasing costs of insurance; and
- many hospitals are aggressively buying physician practices and assuming risk
contracts to gain market share. If revenues do not increase accordingly,
this practice could reduce profits;
- Medicare is changing its reimbursement system for nursing homes. Many
nursing home providers are not sure how they will be treated. In many cases,
the providers may receive lower reimbursements and these would have to cut
expenses to maintain profitability; and
- most retirement/nursing home providers rely on entrance fees for operating
revenues. If people live longer than expected and turnover is lower than
budgeted, operating revenues would be adversely affected by less than
expected entrance fees.
Here is what you should know about the California Portfolio's concentration in
municipal water and sewer revenue bonds. The payment of interest and principal
of these bonds depends on the rates the utilities may charge, the demand for
their services and the cost of operating their business which includes the
expense of complying with environmental and other energy and licensing laws and
regulations. The operating results of utilities are particularly influenced by:
- increases in operating and construction costs; and
- unpredicability of future usage requirements.
Here is what you should know about the California Portfolio's concentration in
tax allocation bonds.
- these bonds are secured by ad valorem taxes imposed on the incremental
increase of taxable assessed valuation of property within a jurisdiction
above an established base of assessed values.
- the issuers of these bonds do not have general taxing authority and the tax
assessments on which the taxes used to service the bonds are based may be
subject to devaluation due to market price declines or governmental action.
Here is what you should know about the New Jersey Portfolio's concentration in
airport/port/highway bonds. These bonds are dependent for payment on revenues
from financial projects including:
- user fees from ports and airports;
- tolls on turnpikes and bridges;
- rents from buildings; and
- additional financial resources including
--federal and state subsidies,
-- lease rentals paid by state or local governments, or
-- the pledge of a special tax such as a sales tax or a property tax.
Airport income is largely affected by:
- increased competition;
- excess capacity; and
- increased fuel costs.
Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentrations over time.
STATE CONCENTRATION RISK
CALIFORNIA RISKS
GENERALLY
From the late 1980s through the early 1990s, an economic recession eroded
California's revenue base. At the same time rapid population growth caused State
expenditures to exceed budget appropriations.
- As a result California experienced a period of sustained budget imbalance.
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- Since that time the California economy has improved markedly and the extreme
budgetary pressures have begun to lessen. However, the Asian economic crisis
is expected to continue to have some negative effectt on the State's
economy.
STATE GOVERNMENT
The 1997-98 Budget Act allocated a State budget of approximately $66.9 Billion
and contains no tax increases or reductions. Despite this somewhat improved
state, California's budget is still subject to certain unforeseeable events. For
example:
- In December, 1994, Orange County and its investment pool filed for
bankruptcy. While a settlement has been reached, the full impact on the
State and Orange County is still unknown.
- California faces constant fluctuations in other expenses (including health
and welfare caseloads, property tax receipts, federal funding and natural
disaster relief) that will undoubtedly create new budgetary pressure and
reduce issuers' ability to pay their debts.
- California's general obligation bonds are currently rated A1 by Moody's and
A+ by Standard & Poor's.
OTHER RISKS
Issuers' ability to make payments on bonds (and the remedies available to
bondholders) could also be adversely affected by the following constraints:
- Certain provisions of California's Constitution, laws and regulatory system
contain tax, spending and appropriations limits and prohibit certain new
taxes.
- Certain other California laws subject the users of bond proceeds to strict
rules and limits regarding revenue repayment.
- Bonds of healthcare institutions which are subject to the strict rules and
limits regarding reimbursement payments of California's Medi-Cal program for
health care services to welfare recipients and bonds secured by liens on
real property are two of the types of bonds affected by these provisions.
NEW JERSEY RISKS
STATE AND LOCAL GOVERNMENT
Certain features of New Jersey law could affect the repayment of debt:
- the State of New Jersey and its agencies and public authorities issue
general obligation bonds, which are secured by the full faith and credit of
the state, backed by its taxing authority, without recourse to specific
sources of revenue, therefore, any liability to increase taxes could impair
the state's ability to repay debt; and
- the state is required by law to maintain a balanced budget, and state
spending for any given municipality or county cannot increase by more than
5% per year. This limit could make it harder for any particular county or
municipality to repay its debts.
In recent years the state budget's main expenditures have been
- elementary and secondary education, and
- state agencies and programs, including police and corrections facilities,
higher education, and environmental protection.
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The state's general obligations are rated Aa1 by Moody's and AA+ by Standard &
Poor's.
NEW YORK RISKS
GENERALLY
For decades, New York's economy has trailed the rest of the nation. Both the
state and New York City have experienced long-term structural imbalances between
revenues and expenses, and have repeatedly relied substantially on non-recurring
measures to achieve budget balance. The pressures that contribute to budgetary
problems at both the state and local level include:
- the high combined state and local tax burden;
- a decline in manufacturing jobs, leading to above-average unemployment;
- sensitivity to the financial services industry; and
- dependence on federal aid.
STATE GOVERNMENT
The State government frequently has difficulty approving budgets on time. Budget
gaps of $1 billion and $4 billion are projected for the next two years. The
State's general obligation bonds are rated A by Standard & Poor's and A2 by
Moody's. There is $37 billion of state-related debt outstanding.
NEW YORK CITY GOVERNMENT
Even though the City had budget surpluses each year from 1981, budget gaps of $2
billion are projected for each of the next three years. New York City faces
fiscal pressures from:
- aging public facilities that need repair or replacement;
- welfare and medical costs;
- expiring labor contracts; and
- a high and increasing debt burden.
The City requires substantial state aid, and its fiscal strength depends heavily
on the securities industry. Its general obligation bonds are rated A- by
Standard & Poor's and A3 by Moody's.
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.
INSURANCE RELATED RISK
Some bonds are backed by insurance companies (as shown under Portfolios).
Insurance policies generally make payments only according to a bond's original
payment schedule and do not make early payments when a bond defaults or becomes
taxable. Although the federal government does not regulate the insurance
business, various state laws and federal initiatives and tax law changes could
significantly affect the insurance business. The claims-paying ability of the
insurance companies is generally rated A or better by Standard & Poor's or
another nationally recognized rating organization. The insurance company ratings
are subject to change at any time at the discretion of the rating agencies.
LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
Future tax legislation could affect the value of the portfolio by:
- limiting real property taxes,
- reducing tax rates,
- imposing a flat or other form of tax, or
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- exempting investment income from tax.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:
- ADDING the value of the bonds, net accrued interest, cash and any other Fund
assets;
- SUBTRACTING accrued but unpaid Fund expenses, unreimbursed Trustee advances,
cash held to buy back units or for distribution to investors and any other
Fund liabilities; and
- DIVIDING the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.
If you sell your units before the final deferred sales fee installment, the
amount of any remaining installments will be deducted from your proceeds.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge other than any remaining deferred sales charge.
We may resell the units to other buyers or to the Trustee. You should consult
your financial professional for current market prices to determine if other
broker-dealers or banks are offering higher prices.
We have maintained the secondary market continuously for over 25 years, but we
could discontinue it without prior notice for any business reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold Unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional documents are
needed such as a trust document, certificate of corporate authority, certificate
of death or appointment as executor, administrator or guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.
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If you acquire 25% or more of the outstanding units of the Fund and you sell
units with a value exceeding $250,000, the Trustee may choose to pay you "in
kind" by distributing bonds and cash with a total value equal to the price of
those units. The Trustee will try to distribute bonds in the portfolio pro rata,
but it reserves the right to distribute only one or a few bonds. The Trustee
will act as your agent in an in kind distribution and will either hold the bonds
for your account or sell them as you instruct. You must pay any transaction
costs as well as transfer and ongoing custodial fees on sales of bonds
distributed in kind.
There could be a delay in paying you for your units:
- if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
- if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
bonds not reasonably practicable; and
- for any other period permitted by SEC order.
EXCHANGE OPTION
You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 1.90%. You may exchange units of this Fund for units
of certain other Defined Asset Funds at a reduced sales fee if your investment
goals change. To exchange units, you should talk to your financial professional
about what funds are exchangeable, suitable and currently available.
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.
We may amend or terminate this exchange option at any time without notice.
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the bonds, less expenses, from
the initial most recent Record Day up to, but not including, the settlement
date, which is usually three business days after the purchase date of the unit.
A portion of the price of a unit consists of cash so that the Trustee can
provide you with regular monthly income. When you sell your units you will
receive your share of this cash.
In addition, as with mutual funds, the Fund (and therefore the investors) pay
all or some of the costs of organizing the Fund including:
- cost of initial preparation of legal documents;
- federal and state registration fees;
- initial fees and expenses of the Trustee;
- initial audit; and
- legal expenses and other out-of-pocket expenses.
EVALUATIONS
An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as
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observed by the New York Stock Exchange: New Year's Day, Presidents' Day, Martin
Luther King, Jr. Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas). Bond values are based on current bid or offer
prices for the bonds or comparable bonds. In the past, the difference between
bid and offer prices of publicly offered tax-exempt bonds has ranged from 0.5%
of face amount on actively traded issues to 3.5% on inactively traded issues;
the difference has averaged between 1 and 2%.
INCOME
The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.
EXPENSES
The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:
- to reimburse the Trustee for the Fund's operating expenses;
- for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
- costs of actions taken to protect the Fund and other legal fees and
expenses;
- expenses for keeping the Fund's registration statement current; and
- Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 55 CENTS per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. Legal,
typesetting, electronic filing and regulatory filing fees and expenses
associated with updating the Portfolio's registration statement yearly are also
now chargeable to the Portfolio. While this fee may exceed the amount of these
costs and expenses attributable to this Fund, the total of these fees for all
Series of Defined Asset Funds will not exceed the aggregate amount attributable
to all of these Series for any calendar year. The Fund also pays the Evaluator's
fees.
The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.
Any quarterly deferred sales fees you owe are paid with interest and principal
from certain bonds. If these amounts are not enough, the rest will be paid out
of distributitons to you from the Fund's Capital and Income Accounts.
The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the Fund will owe the excess. The
Trustee has a lien on Fund assets to secure reimbursement of Fund expenses and
may sell bonds if cash is not available.
PORTFOLIO CHANGES
The Sponsors and Trustee are not liable for any default or defect in a bond; if
a contract to buy any bond.
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Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
bonds in the portfolio even if their credit quality declines or other adverse
financial circumstances occur. However, we may sell a bond in certain cases if
we believe that certain adverse credit conditions exist or if a bond becomes
taxable.
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which may affect the
composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
- diversity of the portfolio;
- size of the Fund relative to its original size;
- ratio of Fund expenses to income;
- current and long-term returns;
- degree to which units may be selling at a premium over par; and
- cost of maintaining a current prospectus.
FUND TERMINATION
The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of bonds deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.
When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final sale.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.
CERTIFICATES
Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.
TRUST INDENTURE
The Fund is a "unit investment trust" governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
- to cure ambiguities;
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- to correct or supplement any defective or inconsistent provision;
- to make any amendment required by any governmental agency; or
- to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Fund without your written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
- it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
- it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsors and the Trustee without the consent of
investors. The resignation or removal of either becomes effective when a
successor accepts appointment. The Sponsors will try to appoint a successor
promptly; however, if no successor has accepted within 30 days after notice of
resignation, the resigning Trustee or Evaluator may petition a court to appoint
a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
- remove it and appoint a replacement Sponsor;
- liquidate the Fund; or
- continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
counsel for the Sponsors, has given an opinion that the units are validly
issued. Special counsel located in the relevant states have given state and
local tax opinions.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statements of Condition included in this
prospectus.
SPONSORS
The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
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SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PRUDENTIAL SECURITIES INCORPORATED (an
indirect wholly-owned subsidiary of the
Prudential Insurance Company of America)
One New York Plaza
New York, NY 10292
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
TRUSTEE
The Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th Floor, New York, New York 10004, is the Trustee. It is supervised by
the Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and New York State banking authorities.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. The Sponsors also
realized a profit or loss on the initial date of deposit of the bonds. Any cash
made available by you to the Sponsors before the settlement date for those units
may be used in the Sponsors' businesses to the extent permitted by federal law
and may benefit the Sponsors.
A Sponsor or Underwriter may realize profits or sustain losses on bonds in the
Fund which were acquired from underwriting syndicates of which it was a member.
In maintaining a secondary market, the Sponsors will also realize profits or
sustain losses in the amount of any difference between the prices at which they
buy units and the prices at which they resell or redeem them.
PUBLIC DISTRIBUTION
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
CODE OF ETHICS
Merrill Lynch, as agent for the Sponsors, has adopted a code of ethics requiring
preclearance and reporting of personal securities transactions by its employees
with access to information on portfolio transactions. The goal of the code is to
prevent fraud, deception or misconduct against the Fund and to provide
reasonable standards of conduct.
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TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances or subject to
special rules. You should consult your own tax adviser about your particular
circumstances.
At the date of issue of each bond, counsel for the issuer delivered an opinion
to the effect that interest on the bond is exempt from regular federal income
tax. However, interest may be subject to state and local taxes and may be taken
into account in determining your preference items for alternative minimum tax
purposes. Neither we nor our counsel have reviewed the issuance of the bonds,
related proceedings or the basis for the opinions of counsel for the issuers. We
cannot assure you that the issuer (or other users) have complied or will comply
with any requirements necessary for a bond to be tax-exempt. If any of the bonds
were determined not to be tax-exempt, you could be required to pay income tax
for current and prior years, and if the Fund were to sell the bond, it might
have to sell it at a substantial discount.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each bond in the Fund.
GAIN OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued "market
discount". Generally you will have market discount to the extent that your basis
in a bond when you purchase a unit is less than its stated redemption price at
maturity (or, if it is an original issue discount bond, the issue price
increased by original issue discount that has accrued on the bond before your
purchase). You should consult your tax adviser in this regard.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will be long-term if you are considered to have held
your investment on each bond for more than one year and short-term otherwise. If
you are an individual and sell your units after holding them for more than one
year, you may be entitled to a 20% maximum federal tax rate on any resulting
gains. Consult your tax adviser in this regard. Because the deductibility of
capital losses is subject to limitations, you may not be able to deduct all of
your capital losses.
YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges and the organizational expenses you pay, adjusted to
reflect any accruals of "original issue discount,"
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"acquisition premium" and "bond premium". You should consult your tax adviser in
this regard.
EXPENSES
If you are not a corporate investor, you will not be entitled to a deduction for
your share of fees and expenses of the Fund. Also, if you borrowed money in
order to purchase or carry your units, you will not be able to deduct the
interest on this borrowing for federal income tax purposes. The IRS may treat
your purchase of units as made with borrowed money even if the money is not
directly traceable to the purchase of units.
STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation. If you are a New York taxpayer, your income from the
Fund will not be tax-exempt in New York except to the extent that the income is
earned on bonds that are tax-exempt for New York purposes. Depending on where
you live, your income from the Fund may be subject to state and local taxation.
You should consult your tax adviser in this regard.
CALIFORNIA TAXES
In the opinion of O'Melveny & Myers LLP, Los Angeles, California, special
counsel on California tax matters:
Under the income tax laws of the State of California, the Trust will not be
taxed as a corporation and you will be considered to own directly your share of
each bond of the Trust. If you are a California taxpayer, your share of the
income from the bonds of the Trust will not be tax-exempt in California except
for California personal income tax purposes and only to the extent that the
income is earned on bonds that are exempt for such purposes. If you are a
California taxpayer and all or part of your share of a bond is disposed of (for
example, when a bond is sold, exchanged or redeemed at maturity or you sell or
exchange your units), you will recognize gain or loss for California tax
purposes. Depending on where you live, your income from the Trust may be subject
to state and local taxation. You should consult your tax advisor in this regard.
NEW JERSEY TAXES
In the opinion of Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania,
special counsel on New Jersey tax matters:
The Fund will not be taxed as a corporation under the current income tax laws of
the State of New Jersey. Your income from the Fund may be subject to taxation
depending on where you live. If you are a New Jersey taxpayer your income from
the Fund (including gains on sales of bonds by the Fund) and gains on sales of
units by you will be tax-exempt to the extent that income and gains are earned
on bonds that are tax-exempt for New Jersey purposes. You should consult your
tax adviser as to the consequences to you with respect to any investment you
make in the Fund.
28
<PAGE>
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolios, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.
29
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INSURED, CALIFORNIA
INTERMEDIATE INSURED, NEW JERSEY INSURED AND NEW YORK TRUSTS),
DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Municipal Investment Trust Fund, Multistate Series -
319 (California Insured, California Intermediate Insured, New
Jersey Insured and New York Trusts),
Defined Asset Funds:
We have audited the accompanying statements of condition of Municipal Investment
Trust Fund, Multistate Series - 319, (California Insured, California
Intermediate Insured, New Jersey Insured and New York Trusts), Defined Asset
Funds, including the portfolios, as of November 30, 1999 and the related
statements of operations and of changes in their net assets for the year ended
November 30, 1999 and the period December 12,1997 to November 30, 1998. These
financial statements are the responsibility of the Trustee. Our responsibility
is to express an opinion on these 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. Securities owned at
November 30, 1999, as shown in such portfolios, were confirmed to us by The
Chase Manhattan Bank, the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Trustee, as
well as evaluating the overall financial statement presentation. We believe that
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 Municipal Investment Trust
Fund, Multistate Series - 319 (California Insured, California Intermediate
Insured, New Jersey Insured and New York Trusts), Defined Asset Funds at
November 30, 1999 and the results of their operations and changes in their net
assets for the above-stated periods in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
January 26, 2000
D - 1.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INSURED TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of November 30, 1999
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 3,699,773) (Note 1) ........ $ 3,371,571
Accrued interest ............................... 57,257
Accrued interest on Segregated Bonds (Note 5) .. 2,050
Income payments receivable ..................... 4,250
Cash - principal ............................... 51,181
Cash - income on Segregated Bonds .............. 411
Deferred organization costs (Note 6) ........... 3,054
-----------
Total trust property ......................... 3,489,774
LESS LIABILITIES:
Income advance from Trustee .................... $ 48,972
Deferred sales charge (Note 5) ................. 18,022
Principal payments payable (Segregated Bonds) .. 510
Principal payments payable ..................... 4,250
Accrued Sponsors' fees ......................... 2,010
Other liabilities (Note 6) ..................... 3,054 76,818
----------- -----------
NET ASSETS, REPRESENTED BY:
3,718 units of fractional undivided
interest outstanding (Note 3)................ 3,402,431
Undistributed net investment income ............ 10,525 $ 3,412,956
----------- ===========
UNIT VALUE ($ 3,412,956 / 3,718 units )........... $ 917.95
===========
</TABLE>
See Notes to Financial Statements.
D - 2.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INSURED TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
December 12, 1997
Year Ended to
November 30, November 30,
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 207,370 $ 238,927
Interest income on Segregated
Bonds (Note 5) ....................... 6,703 8,261
Trustee's fees and expenses ............ (5,763) (8,188)
Sponsors' fees ......................... (2,199) (2,242)
------------------------------
Net investment income .................. 206,111 236,758
------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) on
securities sold or redeemed .......... (14,267) 5,144
Unrealized appreciation (depreciation)
of investments ....................... (450,088) 121,886
------------------------------
Net realized and unrealized
gain (loss) on investments .......... (464,355) 127,030
------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (258,244) $ 363,788
==============================
</TABLE>
See Notes to Financial Statements.
D - 3.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INSURED TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
December 12, 1997
Year Ended to
November 30, November 30,
1999 1998
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income .................. $ 206,111 $ 236,758
Realized gain (loss) on
securities sold or redeemed .......... (14,267) 5,144
Unrealized appreciation (depreciation)
of investments ....................... (450,088) 121,886
------------------------------
Net increase (decrease)in net assets
resulting from operations ............ (258,244) 363,788
------------------------------
INCOME DISTRIBUTIONS TO
HOLDERS (Note 2): ..................... (200,433) (215,064)
------------------------------
SHARE TRANSACTIONS:
Deferred sales charge (Note 5):
Income ............................... (12,503)
Principal ............................ (72,562) (72,203)
Redemption amounts:
Income ............................... (1,512) (371)
Principal ............................ (847,199) (452,009)
------------------------------
Net share transactions ................. (933,776) (524,583)
------------------------------
NET DECREASE IN NET ASSETS ............... (1,392,453) (375,859)
NET ASSETS AT BEGINNING OF PERIOD ........ 4,805,409 5,181,268
------------------------------
NET ASSETS AT END OF PERIOD .............. $ 3,412,956 $ 4,805,409
==============================
PER UNIT:
Income distributions during
period ............................... $ 48.62 $ 44.47
==============================
Net asset value at end of
period ............................... $ 917.95 $ 1,047.84
==============================
TRUST UNITS:
Redeemed during period ................. 868 458
Outstanding at end of period ........... 3,718 4,586
==============================
</TABLE>
See Notes to Financial Statements.
D - 4.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INSURED TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(A) Securities are stated at value as determined by the Evaluator based
on bid side evaluations for the securities, except that value on
December 12, 1997 was based upon offering side evaluations at
December 10, 1997, the day prior to the Date of Deposit. Cost of
securities at December 12, 1997 was also based on such offering side
evaluations.
(B) The Fund is not subject to income taxes. Accordingly, no provision
for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 3,718 units at Date of Deposit ..................... $ 3,819,182
Transfer to capital of interest on Segregated Bonds (Note 5) 14,964
Redemptions of units - net cost of 1,326 units redeemed
less redemption amounts (principal)....................... 62,878
Deferred sales charge (Note 5) ............................. (157,268)
Realized loss on securities sold or redeemed ............... (9,123)
Net unrealized depreciation of investments.................. (328,202)
-----------
Net capital applicable to Holders .......................... $ 3,402,431
===========
</TABLE>
4. INCOME TAXES
As of November 30, 1999, net unrealized depreciation of investments, based
on cost for Federal income tax purposes, aggregated $328,202, of which
$328,280 related to depreciated securities and $78 related to appreciated
securities. The cost of investment securities for Federal income tax
purposes was $3,699,773 at November 30, 1999.
D - 5.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INSURED TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
5. DEFERRED SALES CHARGE
$100,000 face of Alameda Cnty., CA, Cert. of Part., Ser. 1997, have been
segregated to fund the deferred sales charges. The sales charges are being
paid for with the interest received and by periodic sales or maturity of
these bonds, as well as principal proceeds received in conjuction with the
disposition on the unsegregated bonds in the portfolio. A deferred sales
charge of $3.35 per Unit is charged on a quarterly basis, and paid to the
Sponsors periodically by the Trustee on behalf of the Holders, up to an
aggregate of $40.20 per Unit over the first three years of the life of the
Fund. Should a Holder redeem Units prior to the third anniversary of the
Fund, the remaining balance of the deferred sales charge will be charged.
6. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over five years. Included
in "Other liabilities" on the Statement of Condition is $3,054 payable to
the Trustee for reimbursement of costs related to the organization of the
Trust.
D - 6.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INSURED TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of November 30, 1999
<TABLE>
<CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 California Hlth. Fac. Fin. Auth., Ins. AAA $ 500,000 5.125 % 2027 08/01/07 $ 490,620 $ 441,245
Rev. Bonds (Cedars-Sinai Med. Ctr.), @ 102.000
Ser. 1997B (MBIA Ins.)
2 California Hsg. Fin. Agy., Home Mtge. AAA 720,000 5.400 2024 02/01/08 723,132 675,230
Rev. Bonds, Ser. 1997L (MBIA Ins.) @ 101.500
3 California Statewide Cmnty. Dev. Auth., AAA 165,000 5.400 2027 12/01/07 165,719 152,069
Certs. of Part., Huntington East Valley @ 102.000
Hosp. (AMBAC Ins.)
4 County of Alameda, CA, Certs. of Part. AAA 40,000 4.100 2000 None 40,093 40,091
(Rfdg. and Cap. Proj.), Ser. 1997
(AMBAC Ins.) (6) 60,000 4.100 2001 None 60,000 60,078
5 Antelope Valley Hlth. Care Dist., CA, AAA 360,000 5.200 2017 01/01/08 360,000 335,063
Ins. Rfdg. Rev. Bonds, Ser. 1997A (FSA @ 102.000
Ins.)
6 East Bay Mun. Util. Dist., CA, AAA 130,000 5.000 2026 06/01/06 126,156 113,632
Wastewater Sys. Sub. Rev./Rfdg. Bonds, @ 102.000
Ser. 1996 (Financial Guaranty Ins.)
7 Hayward Pub. Fin. Auth., CA, Certs. of AAA 300,000 5.250 2026 08/01/06 300,000 272,442
Part. (Civic Ctr. Proj.), Ser. 1996 @ 101.000
(MBIA Ins.)
8 Arcade Wtr. Dist., Sacramento Cnty., AAA 750,000 5.000 2027 11/01/07 727,328 651,683
CA, Wtr. Rev. Certs. of Part. (Arcade @ 102.000
Wtr. Dist. Fin. Corp.), Ser. 1997
(Financial Guaranty Ins.)
9 Redev. Agy. of the City of San Jose, AAA 750,000 4.750 2024 02/01/04 706,725 630,038
CA, Tax Alloc. Bonds (Merged Area Redev. @ 102.000
Proj.), Ser. 1993 (MBIA Ins.)
--------- --------- ---------
TOTAL $ 3,775,000 $ 3,699,773 $ 3,371,571
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 26.
D - 7.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INTERMEDIATE
INSURED TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of November 30, 1999
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 2,818,511) (Note 1) ........ $ 2,766,459
Accrued interest ............................... 54,542
Accrued interest on Segregated Bonds (Note 5) .. 1,435
Income payments receivable ..................... 2,435
Cash - principal ............................... 24,467
Cash - income on Segregated Bonds .............. 9
Deferred organization costs (Note 6) ........... 1,984
-----------
Total trust property ......................... 2,851,331
LESS LIABILITIES:
Income advance from Trustee..................... $ 48,207
Deferred sales charge (Note 5) ................. 21,729
Principal payments payable ..................... 2,435
Accrued Sponsors' fees ......................... 1,462
Other liabilities (Note 6) ..................... 1,984 75,817
----------- -----------
NET ASSETS, REPRESENTED BY:
2,776 units of fractional undivided
interest outstanding (Note 3)................ 2,768,206
Undistributed net investment income ............ 7,308 $ 2,775,514
----------- ===========
UNIT VALUE ($ 2,775,514 / 2,776 units )........... $ 999.82
===========
</TABLE>
See Notes to Financial Statements.
D - 8.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INTERMEDIATE
INSURED TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
December 12, 1997
Year Ended to
November 30, November 30,
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 141,702 $ 151,439
Interest income on Segregated
Bonds (Note 5) ....................... 3,872 4,732
Trustee's fees and expenses ............ (4,600) (5,610)
Sponsors' fees ......................... (1,588) (1,465)
------------------------------
Net investment income .................. 139,386 149,096
------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 17,838
Unrealized appreciation (depreciation)
of investments ....................... (178,324) 126,272
------------------------------
Net realized and unrealized
gain (loss) on investments .......... (160,486) 126,272
------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (21,100) $ 275,368
==============================
</TABLE>
See Notes to Financial Statements.
D - 9.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INTERMEDIATE
INSURED TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
December 12, 1997
Year Ended to
November 30, November 30,
1999 1998
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income .................. $ 139,386 $ 149,096
Realized gain on
securities sold or redeemed .......... 17,838
Unrealized appreciation (depreciation)
of investments ....................... (178,324) 126,272
------------------------------
Net increase (decrease)in net assets
resulting from operations ............ (21,100) 275,368
------------------------------
INCOME DISTRIBUTIONS TO
HOLDERS (Note 2): ..................... (136,228) (135,692)
------------------------------
SHARE TRANSACTIONS:
Deferred sales charge (Note 5):
Income ............................... (7,160)
Principal ............................ (45,113) (32,924)
Redemption amounts:
Income ............................... (650)
Principal ............................ (515,570)
------------------------------
Net share transactions ................. (568,493) (32,924)
------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .... (725,821) 106,752
NET ASSETS AT BEGINNING OF PERIOD ........ 3,501,335 3,394,583
------------------------------
NET ASSETS AT END OF PERIOD .............. $ 2,775,514 $ 3,501,335
==============================
PER UNIT:
Income distributions during
period ............................... $ 45.61 $ 41.42
==============================
Net asset value at end of
period ............................... $ 999.82 $ 1,068.78
==============================
TRUST UNITS:
Redeemed during period ................. 500
Outstanding at end of period ........... 2,776 3,276
==============================
</TABLE>
See Notes to Financial Statements.
D - 10.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INTERMEDIATE
INSURED TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a
Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities,
except that value on December 12, 1997 was based upon
offering side evaluations at December 10, 1997, the day
prior to the Date of Deposit. Cost of securities at
December 12, 1997 was also based on such offering side
evaluations.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 2,776 units at Date of Deposit ..................... $ 2,876,484
Transfer to capital of interest on Segregated Bonds (Note 5) 8,604
Redemptions of units - net cost of 500 units redeemed
less redemption amounts (principal)....................... 2,529
Deferred sales charge (Note 5) ............................. (85,197)
Realized gain on securities sold or redeemed ............... 17,838
Net unrealized depreciation of investments.................. (52,052)
-----------
Net capital applicable to Holders .......................... $ 2,768,206
===========
</TABLE>
4. INCOME TAXES
As of November 30, 1999, net unrealized depreciation of investments, based
on cost for Federal income tax purposes, aggregated $52,052, of which
$52,091 related to depreciated securities and $39 related to appreciated
securities. The cost of investment securities for Federal income tax
purposes was $2,818,511 at November 30, 1999.
D - 11.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INTERMEDIATE
INSURED TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
5. DEFERRED SALES CHARGE
$70,000 face of Alameda Cnty., CA, Cert. of Part., Ser. 1997, have been
segregated to fund the deferred sales charges. The sales charges are being
paid for with the interest received and by periodic sales or maturity of
these bonds, as well as principal proceeds received in conjunction with
the disposition on the unsegregated bonds in the portfolio. A deferred
sales charge of $3.35 per Unit is charged on a quarterly basis, and paid
to the Sponsors periodically by the Trustee on behalf of the Holders, up
to an aggregate of $40.20 per Unit over the first three years of the life
of the Fund. Should a Holder redeem Units prior to the third anniversary
of the Fund, the remaining balance of the deferred sales charge will be
charged.
6. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over five years. Included
in "Other liabilities" on the Statement of Condition is $1,984 payable to
the Trustee for reimbursement of costs related to the organization of the
Trust.
D - 12.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INTERMEDIATE
INSURED TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of November 30, 1999
<TABLE>
<CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 California Statewide Cmnty. Dev. Auth., AAA $ 500,000 5.050 % 2010 07/01/07 $ 504,465 $ 498,330
Certs. of Part. (Huntington East Valley @ 102.000
Hosp.) (AMBAC Ins.)
2 County of Alameda, CA, Certs. of Part. AAA 40,000 4.100 2000 None 40,093 40,091
(Rfdg. and Cap. Proj.), Ser. 1997
(AMBAC Ins.) (6) 30,000 4.100 2001 None 30,000 30,039
3 Arcade Wtr. Dist., Sacramento Cnty., AAA 315,000 4.750 2011 11/01/07 308,709 302,510
CA, 1997 Wtr. Rev. Certs. of Part. @ 102.000
(Financial Guaranty Ins.)
4 San Jose Unified Sch. Dist., Santa AAA 230,000 4.900 2011 06/01/04 230,000 224,860
Clara Cnty., CA, Certs. of Part. (FSA @ 101.000
Ins.)
6 Community Dev. Comm. of the City of AAA 500,000 4.700 2008 08/01/07 500,000 493,670
Commerce, CA, Redev. Proj. No. 1, Tax @ 102.000
Alloc. Rfdg. Bonds, Ser. 1997A (MBIA
Ins.)
7 El Cerrito Redev. Agy., CA, Tax Alloc. AAA 340,000 4.700 2009 07/01/08 338,490 327,478
Rfdg. Bonds (El Cerrito Redev. Proj. @ 102.000
Area), Ser. 1997A (MBIA Ins.)
8 City of Encinitas, CA, Rfdg. Certs. of AAA 435,000 4.750 2010 None 435,000 423,368
Part. (Civic Ctr. Proj.), Ser. 1997A
(MBIA Ins.)
9 Olivehain Mun. Wtr. Dist., CA, Wtr. AAA 430,000 4.750 2009 01/01/06 431,754 426,113
Rev. Certs. of Part. (1997 Cap. Proj. @ 101.000
and Rfdg.) (Financial Guaranty Ins.)
--------- --------- ---------
TOTAL $ 2,820,000 $ 2,818,511 $ 2,766,459
========= ========= =========
See Notes to Portfolios on page D - 26.
</TABLE>
D - 13.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (NEW JERSEY INSURED TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of November 30, 1999
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 3,241,546)(Note 1) ......... $ 2,969,745
Securities called for redemption -
at value (cost $ 25,000)(Note 5) ............ 25,000
Accrued interest ............................... 52,721
Accrued interest on Segregated Bonds (Note 6) .. 1,696
Cash - income on Segregated Bonds .............. 7,222
Cash - principal ............................... 30,420
Trustee's fees and expenses receivable ......... 83
Deferred organization costs (Note 7) ........... 2,138
-----------
Total trust property ......................... 3,089,025
LESS LIABILITIES:
Income advance from Trustee..................... $ 41,972
Deferred sales charge (Note 6) ................. 1,069
Principal payments payable (Segregated Bonds) .. 26,764
Redemptions payable ............................ 51,512
Accrued Sponsors' fees ......................... 1,602
Other liabilities (Note 7) ..................... 2,138 125,057
----------- -----------
NET ASSETS, REPRESENTED BY:
3,214 units of fractional undivided
interest outstanding (Note 3)................ 2,954,914
Undistributed net investment income ............ 9,054 $ 2,963,968
----------- ===========
UNIT VALUE ($ 2,963,968 / 3,214 units )........... $ 922.21
===========
</TABLE>
See Notes to Financial Statements.
D - 14.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (NEW JERSEY INSURED TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
December 12, 1997
Year Ended to
November 30, November 30,
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 171,856 $ 174,300
Interest income on Segregated
Bonds (Note 6) ....................... 4,602 6,148
Trustee's fees and expenses ............ (5,019) (6,955)
Sponsors' fees ......................... (1,738) (1,584)
------------------------------
Net investment income .................. 169,701 171,909
------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized loss on
securities sold or redeemed .......... (2,666)
Unrealized appreciation (depreciation)
of investments ....................... (358,080) 86,279
------------------------------
Net realized and unrealized
gain (loss) on investments .......... (360,746) 86,279
------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (191,045) $ 258,188
==============================
</TABLE>
See Notes to Financial Statements.
D - 15.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (NEW JERSEY INSURED TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
December 12, 1997
Year Ended to
November 30, November 30,
1999 1998
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income .................. $ 169,701 $ 171,909
Realized loss on
securities sold or redeemed .......... (2,666)
Unrealized appreciation (depreciation)
of investments ....................... (358,080) 86,279
------------------------------
Net increase (decrease)in net assets
resulting from operations ............ (191,045) 258,188
------------------------------
INCOME DISTRIBUTIONS TO
HOLDERS (Note 2): ..................... (164,963) (155,779)
------------------------------
SHARE TRANSACTIONS:
Deferred sales charge (Note 6):
Income ............................... (1,832)
Principal ............................ (57,043) (39,713)
Redemption amounts:
Income ............................... (888)
Principal ............................ (303,170)
------------------------------
Net share transactions ................. (362,933) (39,713)
------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .... (718,941) 62,696
NET ASSETS AT BEGINNING OF PERIOD ........ 3,682,909 3,620,213
------------------------------
NET ASSETS AT END OF PERIOD .............. $ 2,963,968 $ 3,682,909
==============================
PER UNIT:
Income distributions during
period ............................... $ 48.68 $ 44.13
==============================
Net asset value at end of
period ............................... $ 922.21 $ 1,043.32
==============================
TRUST UNITS:
Redeemed during period ................. 316
Outstanding at end of period ........... 3,214 3,530
==============================
</TABLE>
See Notes to Financial Statements.
D - 16.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (NEW JERSEY INSURED TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities,
except that value on December 12, 1997 was based upon
offering side evaluations at December 10, 1997, the day
prior to the Date of Deposit. Cost of securities at
December 12, 1997 was also based on such offering side
evaluations.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 3,214 units at Date of Deposit ..................... $ 3,296,137
Transfer to capital of interest on Segregated Bonds (Note 6) 10,750
Redemptions of units - net cost of 316 units redeemed
less redemption amounts (principal)....................... 21,082
Deferred sales charge (Note 6) ............................. (98,588)
Realized loss on securities sold or redeemed ............... (2,666)
Net unrealized depreciation of investments ................. (271,801)
-----------
Net capital applicable to Holders .......................... $ 2,954,914
===========
</TABLE>
4. INCOME TAXES
As of November 30, 1999, net unrealized depreciation of investments
(including securities called for redemption), based on cost for Federal
income tax purposes, aggregated $271,801, of which $271,889 related to
depreciated securities and $88 related to appreciated securities. The cost
of investment securities for Federal income tax purposes was $3,266,546 at
November 30, 1999.
5. SECURITIES CALLED FOR REDEMPTION
$ 25,000 face amount of Monmouth Cnty., NJ, Imp. Auth., Govt. Loan Rev.
Bonds, Ser. 1997 were redeemed on December 1, 1999. Such securities are
valued at the amount of proceeds sebsequently received.
D - 17.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (NEW JERSEY INSURED TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
6. DEFERRED SALES CHARGE
$15,000 face amount of Middlesex Cnty., NJ, Util. Auth., Swr. Rev. Bonds,
Ser. 1991 A and $50,000 face amount of Monmouth Cnty., NJ, Imp. Auth.,
Govt. Loan Rev. Bonds, Ser. 1997 have been segregated to fund the deferred
sales charges. The sales charges are being paid for with the interest
received and by periodic sales or maturity of these bonds, as well as
principal proceeds received in conjunction with the disposition on the
unsegregated bonds in the portfolio. A deferred sales charge of $3.75 per
Unit is charged on a quarterly basis, and paid to the Sponsors
periodically by the Trustee on behalf of the Holders, up to an aggregate
of $45.00 per Unit over the first three years of the life of the Fund.
Should a Holder redeem Units prior to the third anniversary of the Fund,
the remaining balance of deferred sales charge will be charged.
7. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over five years. Included
in "Other liabilities" on the Statement of Condition is $2,138 payable to
the Trustee for reimbursement of costs related to the organization of the
Trust.
D - 18.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (NEW JERSEY INSURED TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of November 30, 1999
<TABLE>
<CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 The Delaware River and Bay Auth., NJ, AAA $ 550,000 4.750 % 2024 01/01/04 $ 514,877 $ 467,940
Rev. Bonds, Ser. 1993 (MBIA Ins.) @ 102.000
2 New Jersey Econ. Dev. Auth. Rev. AAA 250,000 5.000 2025 07/01/06 242,713 221,668
Bonds (Clara Maass Hlth. Sys. Obligated @ 102.000
Group Proj.), Ser. 1996 (FSA Ins.)
3 New Jersey Hlth. Care Facs. Fin. Auth. AAA 550,000 5.375 2019 07/01/07 555,880 519,134
Rev. and Rfdg. Bonds, AHS Hosp. Corp. @ 102.000
Issue, Ser. 1997A (AMBAC Ins.)
4 New Jersey Hsg. and Mtge. Fin. Agy., AAA 465,000 5.400 2028 11/01/07 465,000 425,108
Multifamily Hsg. Rev. Bonds, Ser. @ 101.500
1997B (AMBAC Ins.)
5 The Port Auth. of New York and New AAA 550,000 4.750 2026 01/15/06 517,490 459,838
Jersey, Consol. Bonds, One Hundred @ 101.000
Fourth Ser. (AMBAC Ins.)
6 Essex Cnty., NJ, Imp. Auth. G.O. Gtd. AAA 325,000 5.450 2027 10/01/07 331,627 307,213
Lease Rev. Bonds (Sportsplex Proj.), @ 101.000
Ser. 1997A (AMBAC Ins.)
7 Middlesex Cnty., NJ, Util. Auth., Swr. AAA 15,000 6.200 2001 None 15,976 15,367
Rev. Bonds, Ser. 1991A (Financial
Guaranty Ins.) (6)
8 Monmouth Cnty., NJ, Improvement Auth., AAA 50,000 4.000 2000 None 49,930 50,018
Govt. Loan Rev. Bonds, Ser. 1997 (AMBAC
Ins.) (6)
9 The North Hudson Sewerage Auth., NJ, AAA 550,000 5.125 2022 08/01/06 548,053 503,459
Swr. Rev. Bonds, Ser. 1996 (Financial @ 101.000
Guaranty Ins.)
--------- --------- ---------
TOTAL $ 3,305,000 $ 3,241,546 $ 2,969,745
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 26.
D - 19.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of November 30, 1999
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 4,688,796) (Note 1)......... $ 4,367,308
Accrued interest ............................... 76,697
Accrued interest on Segregated Bonds (Note 5) .. 2,651
Income payments receivable ..................... 4,715
Income payments receivable (Segregated Bonds) .. 90
Cash - principal ............................... 49,888
Cash - income on Segregated Bonds .............. 501
Deferred organization costs (Note 6) ........... 3,055
-----------
Total trust property ......................... 4,504,905
LESS LIABILITIES:
Income advance from Trustee..................... $ 65,187
Deferred sales charge (Note 5) ................. 39,289
Principal payments payable ..................... 4,715
Principal payments payable (Segregated Bonds) .. 787
Redemptions payable ............................ 185,750
Accrued Sponsors' fees ......................... 2,278
Other liabilities (Note 6) ..................... 3,055 301,061
----------- -----------
NET ASSETS, REPRESENTED BY:
4,465 units of fractional undivided
interest outstanding (Note 3)................ 4,190,524
Undistributed net investment income ............ 13,320 $ 4,203,844
----------- ===========
UNIT VALUE ($ 4,203,844 / 4,465 units )........... $ 941.51
===========
</TABLE>
See Notes to Financial Statements.
D - 20.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
December 12, 1997
Year Ended to
November 30, November 30,
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 254,830 $ 260,729
Interest income on Segregated
Bonds (Note 6) ....................... 7,735 9,166
Trustee's fees and expenses ............ (6,395) (8,532)
Sponsors' fees ......................... (2,471) (2,258)
------------------------------
Net investment income .................. 253,699 259,105
------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) on
securities sold or redeemed .......... (1,673) 1,274
Unrealized appreciation (depreciation)
of investments ....................... (476,618) 155,130
------------------------------
Net realized and unrealized
gain (loss) on investments .......... (478,291) 156,404
------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (224,592) $ 415,509
==============================
</TABLE>
See Notes to Financial Statements.
D - 21.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
December 12, 1997
Year Ended to
November 30, November 30,
1999 1998
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income .................. $ 253,699 $ 259,105
Realized gain (loss) on
securities sold or redeemed .......... (1,673) 1,274
Unrealized appreciation (depreciation)
of investments ....................... (476,618) 155,130
------------------------------
Net increase (decrease) in net assets
resulting from operations ............ (224,592) 415,509
------------------------------
INCOME DISTRIBUTIONS TO
HOLDERS (Note 2): ..................... (246,422) (234,865)
------------------------------
SHARE TRANSACTIONS:
Deferred sales charge (Note 6):
Income ............................... (13,659)
Principal ............................ (71,170) (58,478)
Redemption amounts:
Income ............................... (1,166) (130)
Principal ............................ (510,797) (52,128)
------------------------------
Net share transactions ................. (596,792) (110,736)
------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .... (1,067,806) 69,908
NET ASSETS AT BEGINNING OF PERIOD ........ 5,271,650 5,201,742
------------------------------
NET ASSETS AT END OF PERIOD .............. $ 4,203,844 $ 5,271,650
==============================
PER UNIT:
Income distributions during
period ............................... $ 51.27 $ 46.64
==============================
Net asset value at end of
period ............................... $ 941.51 $ 1,055.60
==============================
TRUST UNITS:
Redeemed during period ................. 529 51
Outstanding at end of period ........... 4,465 4,994
==============================
</TABLE>
See Notes to Financial Statements.
D - 22.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (NEW YORK TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities,
except that value on December 12, 1997 was based upon
offering side evaluations at December 10, 1997, the day
prior to the Date of Deposit. Cost of securities at
December 12, 1997 was also based on such offering side
evaluations.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 4,465 units at Date of Deposit ..................... $ 4,603,722
Transfer to capital of interest on Segregated Bonds (Note 5) 16,901
Redemptions of units - net cost of 580 units redeemed
less redemption amounts (principal)....................... 35,095
Deferred sales charge (Note 5) ............................. (143,307)
Realized loss on securities sold or redeemed ............... (399)
Net unrealized depreciation of investments.................. (321,488)
-----------
Net capital applicable to Holders .......................... $ 4,190,524
===========
</TABLE>
4. INCOME TAXES
As of November 30, 1999, net unrealized depreciation of investments, based
on cost for Federal income tax purposes, aggregated $321,488, of which
$348,977 related to depreciated securities and $27,489 related to
appreciated securities. The cost of investment securities for Federal
income tax purposes was $4,688,796 at November 30, 1999.
D - 23.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (NEW YORK TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
5. DEFERRED SALES CHARGE
$125,000 face amount of Niagra Wheatfield Central School Dist., Niagra
Cnty., NY, Sch. Dist. Serial Bonds - 1997, have been segregated to fund
the deferred sales charges. The sales charges are being paid for with the
interest received and by periodic sales or maturity of these bonds, as
well as principal proceeds received conjunction with the disposition on
the unsegregated bonds in the portfolio. A deferred sales charge of $3.75
per Unit is charged on a quarterly basis, and paid to the Sponsors
periodically by the Trustee on behalf of the Holders, up to an aggregate
of $45.00 per Unit over the first three years of the life of the Fund.
Should a Holder redeem Units prior to the third anniversary of the Fund,
the remaining balance of the deferred sales charge will be charged.
6. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over five years. Included
in "Other liabilities" on the Statement of Condition is $3,055 payable to
the Trustee for reimbursement of costs related to the organization of the
Trust.
D - 24.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (NEW YORK TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of November 30, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 New York State Urban Dev. Corp., Corr. A(f) $ 550,000 5.375 % 2023 01/01/04 $ 540,689 $ 495,281
Cap. Fac. Rev. Bonds, Ser. 4 @ 102.000
2 Dormitory Auth. of the State of New A(f) 680,000 5.500 2025 07/01/06 682,672 619,283
York, Dept. of Hlth., Rev. Bonds, Ser. @ 102.000
1996
3 Dormitory Auth. of the State of New A- 660,000 5.375 2024 01/01/08 653,070 588,667
York, City Univ. Sys. Consol. Third @ 102.000
Gen. Resolution Rev. Bonds, 1997 Ser. 1
4 Dormitory Auth. of the State of New AA 700,000 5.500 2027 07/01/07 702,940 633,031
York, Frances Schervier Home and Hosp. @ 102.000
Ins. Rev. Bonds (Franciscan Hlth.
Partnership Oblig. Grp.), Ser. 1997
(Asset Guaranty Ins.) (5)
5 The City of New York, NY, G.O. Bonds, A(f) 750,000 5.250 2021 11/15/07 725,183 673,403
Fiscal Ser. 1998C @ 101.000
6 Niagara Wheatfield Central Sch. Dist., Aaa(m) 75,000 4.600 2000 None 76,245 75,265
Niagara Cnty., NY, Sch. Dist. Serial
Bonds - 1997 (FSA Ins.)(5)(6) 50,000 4.600 2001 None 50,974 50,276
7 Town of Amherst, NY, Indl. Dev. Agy., A 770,000 5.650 2022(8) 10/01/07 786,578 814,067
Lease Rev. Bonds (Amherst Multi-Surface @ 102.000
Rink Complex Proj.), Ser. 1997A (KeyBank
National Assoc., Cleveland, OH - Letter
of Credit) (7)
8 The Port Auth. of New York and New AAA 500,000 4.750 2026 01/15/06 470,445 418,035
Jersey, Consol. Bonds, One Hundred @ 101.000
Fourth Ser. (AMBAC Ins.) (5)
--------- --------- ---------
TOTAL $ 4,735,000 $ 4,688,796 $ 4,367,308
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 26.
D - 25.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 319 (CALIFORNIA INSURED, CALIFORNIA
INTERMEDIATE INSURED, NEW JERSEY INSURED AND NEW YORK TRUSTS),
DEFINED ASSET FUNDS
NOTES TO PORTFOLIOS
As of November 30, 1999
(1) The ratings of the bonds are by Standard & Poor's Ratings Group, or by
Moody's Investors Service, Inc if followed by "(m)", or by Fitch Investors
Service, Inc. if followed by "(f)"; "NR" indicates that this bond is not
currently rated by any of the above mentioned rating services. These
ratings have been furnished by the Evaluator but not confirmed with the
rating agencies.
(2) See Notes to Financial Statements.
(3) Optional redemption provisions, which may be exercised in whole or in
part, are initially at prices of par plus a premium, then subsequently at
prices declining to par. Certain securities may provide for redemption at
par prior or in addition to any optional or mandatory redemption dates or
maturity, for example, through the operation of a maintenance and
replacement fund, if proceeds are not able to be used as contemplated, the
project is condemned or sold or the project is destroyed and insurance
proceeds are used to redeem the securities. Many of the securities are
also subject to mandatory sinking fund redemption commencing on dates
which may be prior to the date on which securities may be optionally
redeemed. Sinking fund redemptions are at par and redeem only part of the
issue. Some of the securities have mandatory sinking funds which contain
optional provisions permitting the issuer to increase the principal amount
of securities called on a mandatory redemption date. The sinking fund
redemptions with optional provisions may, and optional refunding
redemptions generally will, occur at times when the redeemed securities
have an offering side evaluation which represents a premium over par. To
the extent that the securities were acquired at a price higher than the
redemption price, this will represent a loss of capital when compared with
the Public Offering Price of the Units when acquired. Distributions will
generally be reduced by the amount of the income which would otherwise
have been paid with respect to redeemed securities and there will be
distributed to Holders any principal amount and premium received on such
redemption after satisfying any redemption requests for Units received by
the Fund. The estimated current return may be affected by redemptions.
(4) All securities are insured, either on an individual basis or by portfolio
insurance, by a municipal bond insurance company which has been assigned
"AAA" claims paying ability by Standard & Poor's. Accordingly, Standard &
Poor's has assigned a "AAA" rating to the securities. Securities covered
by portfolio insurance are rated "AAA" only as long as they remain in the
Trust.
(5) Insured by the indicated municipal bond insurance company.
(6) These bonds have been segregated to fund the deferred sales charges.
(7) Certain bonds are covered by letters of credit which may expire prior to
the maturity dates of the bonds. Upon expiration of a letter of credit,
the issuer of the bond is obligated to obtain a replacement letter of
credit or call the bond.
(8) Bonds with an aggregate face amount of $770,000 of the New York Trust have
been pre-refunded and are expected to be called for redemption on the
optional redemption provision date shown.
D - 26.
<PAGE>
DEFINED ASSET FUNDS--REGISTERED TRADEMARK--
<TABLE>
<S> <C>
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most MULTISTATE SERIES--319
recent free Information (A Unit Investment Trust)
Supplement that gives more ---------------------------------------
details about the Fund, This Prospectus does not contain
by calling: complete information about the
The Chase Manhattan Bank investment company filed with the
1-800-323-1508 Securities and Exchange Commission in
Washington, D.C. under the:
- Securities Act of 1933 (file no.
333-35121) and
- Investment Company Act of 1940 (file
no. 811-1777).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
UNITS OF ANY FUTURE SERIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED
UNTIL THAT SERIES HAS BECOME EFFECTIVE
WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO UNITS CAN BE SOLD IN ANY
STATE WHERE A SALE WOULD BE ILLEGAL.
11349--2/00
</TABLE>
