<PAGE>
40 Act File No. 811-08103
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact Name of Trust: NUVEEN UNIT TRUST, SERIES 1
B. Name of Depositor: JOHN NUVEEN & CO. INCORPORATED
C. Complete address of Depositor's principal executive offices:
333 West Wacker Drive
Chicago, Illinois 60606
D. Name and complete address of agents for service:
JOHN NUVEEN & CO. INCORPORATED
Attention: Gifford R. Zimmerman
333 West Wacker Drive
Chicago, Illinois 60606
CHAPMAN AND CUTLER
Attention: Eric F. Fess
111 West Monroe Street
Chicago, Illinois 60603
It is proposed that this filing will become effective (check appropriate box)
( ) immediately upon filing pursuant to paragraph (b)
( ) on (date) pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)
( ) on (date) pursuant to paragraph (a) of Rule (485 or 486)
E. Title and amount of securities being registered: An indefinite number of
Units pursuant to Rule 24f-2 promulgated under the Investment Company Act
of 1940, as amended.
F. Proposed maximum offering price to the public of the securities being
registered: Indefinite
G. Amount of filing fee: $0.00
H. Approximate date of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE
DATE OF THE REGISTRATION STATEMENT
( ) Check box if it is proposed that this filing will become effective on
(date) at (time) pursuant to Rule 487.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
NUVEEN UNIT TRUST, SERIES 1
CROSS-REFERENCE SHEET
PURSUANT TO RULE 404(C) OF REGULATION C
UNDER THE SECURITIES ACT OF 1933
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTION 1 AS
TO PROSPECTUS ON FORM S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust ) Prospectus Cover Page
(b) Title of securities issued )
2. Name and address of Depositor ) Information About The Sponsor
3. Name and address of Trustee ) Information About The Sponsor
4. Name and address of principal ) Information About The Sponsor
Underwriter )
5. Organization of trust ) Nuveen Unit Trusts
6. Execution and termination of ) Nuveen Unit Trusts
Trust Agreement ) Information About The Trustee
) Other Information
7. Changes of Name )
8. Fiscal Year )
9. Litigation )
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. General information regarding ) Summary of Portfolios.
trust's securities ) Composition of Trusts
) Distributions To Unitholders
) Redemption
) Removal of Securities From
) The Trusts
) Information About The Trustee
) Information About The Sponsor
) Other Information
) Tax Status
<PAGE>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
11. Type of securities comprising ) Nuveen Unit Trusts
units ) Summary Of Portfolios
) Composition Of Trusts
) Objectives Of The Trusts
)
12. Certain information regarding ) *
periodic payment certificates )
13. (a) Loan, fees, expenses, etc. ) Essential Information
) Public Offering Price
) Market For Units
) Accrued Interest
) Estimated Long Term Returnand
) Estimated Current Return
) Evaluation of Securities at the
) Initial Date Of Deposit
) Trust Operating Expenses
) Distributions To Unitholders
) Summary Of Portfolios
) Reports To Unitholders
)
(b) Certain information regarding ) *
periodic payment certificates )
(c) Certain percentages ) Public Offering Price
) Market For Units
) Estimated Long Term Return
) and Estimated Current Return
) Evaluation of Securities at the
) Initial Date Of Deposit
) Accrued Interest
)
(d) Certain other fees, etc. ) Evaluation of Securities at the
payable by holders ) Initial Date Of Deposit
) Normal Trust Operating Expenses
) Ownership and Transfer of Units
)
(e) Certain profits received by )
depositor, principal )
underwriter, trustee or )
affiliated persons ) Composition Of Trusts
) Purchase of Units by the Sponsor
)
(f) Ratio of annual charges to ) *
income )
-2-
<PAGE>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
14. Issuance of trust's securities ) Summary Of Portfolios
) Distributions To Unitholders
) How Certificates Are Issued
) Redemption
)
15. Receipt and handling of payments ) *
from purchasers )
16. Acquisition and Disposition of ) Nuveen Unit Trusts
Underlying Securities ) Summary Of Portfolios
) Composition Of Trusts
) Redemption
) Removal of Securities from the
) Trusts
) Other Information
)
17. Withdrawal or redemption ) Market For Units
) Redemption
) Purchase of Units by the Sponsor
)
18. (a) Receipt and disposition of ) Summary Of Portfolios
income ) Distributions to Unitholders
) Reports to Unitholders
)
(b) Reinvestment of distributions ) Accumulation Plan
(c) Reserves or special funds ) Summary Of Portfolios
) Distributions to Unitholders
)
(d) Schedule of distributions ) *
19. Records, accounts and reports ) Distributions to Unitholders
) Reports to Unitholders
)
20. Certain miscellaneous provisions ) Information About the Trustee
of Trust Agreement ) Information About the Sponsor
) Other Information
21. Loans to security holders ) *
22. Limitations on liability ) Summary of Portfolios
) Composition of Trusts
) Information About the Trustee
23. Bond arrangements ) *
-3-
<PAGE>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
24. Other material provisions of ) *
Trust Agreement )
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of Depositor ) Information About the Sponsor
26. Fees received by Depositor ) *
27. Business of Depositor ) Information About the Sponsor
28. Certain information as to ) *
officials and affiliated )
persons of Depositor )
29. Voting Securities of Depositor ) Information About the Sponsor
30. Persons controlling Depositor )
31. Payments by Depositor for )
certain services rendered to )
trust )
32. Payments by Depositor for certain ) *
other services rendered to trust )
33. Remuneration of employees of )
Depositor for certain services )
rendered to trust )
34. Remuneration of other persons for )
certain services rendered to )
trust )
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
35. Distribution of trust's securities ) *
by states )
36. Suspension of sales of trust's )
securities )
37. Revocation of authority to )
distribute )
38. (a) Method of distribution )
(b) Underwriting agreements ) Distribution of Units to the Public
(c) Selling agreement )
)
39. (a) Organization of principal ) Information About the Sponsor
underwriter )
(b) NASD membership of principal )
underwriter )
40. Certain fees received by principal ) *
underwriter )
41. (a) Business of principal )
underwriter )
-4-
<PAGE>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
(b) Branch offices of principal ) *
underwriter )
(c) Salesmen of principal )
underwriter )
42. Ownership of trust's securities ) *
by certain persons )
43. Certain brokerage commissions ) *
received by principal )
underwriter )
44. (a) Method of valuation ) Essential Information
) Public Offering Price
) Evaluation of Securities at the Date
) Of Deposit
) Trust Operating Expenses
(b) Schedule as to offering price ) *
(c) Variation in offering price ) Public Offering Price
to certain persons ) Accrued Interest
) Evaluation of Securities at the Date
) Of Deposit
)
45. Suspension of redemption rights ) *
46. (a)Redemption valuation ) Unit Value And Evaluation
) Redemption Without Charge
) Purchase of Units by the Sponsor
)
(b) Schedule as to redemption ) *
price )
47. Maintenance of position in ) Public Offering Price
underlying securities ) Purchase of Units by the Sponsor
)
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of )
Trustee ) Information About the Trustee
49. Fees and expenses of Trustee ) Essential Information
) Trust Operating Expenses
-5-
<PAGE>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
50. Trustee's lien ) Trust Operating Expenses
) Distributions to Unitholders
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Insurance of holders of trust's ) *
securities )
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust agreement ) Trust Operating Expenses
with respect to selection or ) Redemption
elimination of underlying ) Removal of Securities from
securities ) the Trusts
)
(b) Transactions involving ) *
elimination of underlying )
securities )
(c) Policy regarding substitution ) Summary Of Portfolios
elimination of underlying or ) Composition Of Trusts
securities ) Removal of Securities
)
(d) Fundamental policy not ) *
otherwise covered )
53. Tax status of trust ) Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during last ) *
ten years )
55. )
56. Certain information regarding ) *
periodic payment certificate )
57. )
58. )
_______________________
*Inapplicable, omitted, answer negative or not required.
-6-
<PAGE>
Nuveen Unit Trusts NUVEEN
- -----------------------------------------------------------------
PROSPECTUS
Nuveen U.S. Treasury Trust, Series 1 (Short-Term)
CUSIP:
A Nuveen unit trust with an average dollar-weighted maturity of years for
individual investors seeking current interest income consistent with
preservation of capital and investment flexibility provided by a laddered
portfolio of U.S. Treasury Obligations.
- ----------------------------------------------
OVERVIEW
The trust listed above (the "Trust") is a unit investment trust designed to
provide current interest income consistent with preservation of capital which is
exempt from state and local income taxes. The Trust consists of a portfolio of
U.S. Treasury Obligations that are backed by the full faith and credit of the
United States Government. The Trust also passes through to Unitholders in all
states the exemption from state and local personal income taxes afforded to
direct owners of U.S. Treasury Obligations. In addition, the Trust is also
available to non-resident aliens, and the income from the Trust, provided
certain conditions are met, will be exempt from withholding for U.S. federal
income tax for such foreign investors.
THIS PART A PROSPECTUS MAY NOT BE DISTRIBUTED UNLESS ACCOMPANIED BY THE FIXED
INCOME TRUST PART B PROSPECTUS WHICH IS DATED _______, 1997.
UNITS OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK AND ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED BY THE FDIC OR
ANY OTHER FEDERAL AGENCY AND INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- ----------------------------------------------
CONTENTS
OVERVIEW 1
TRUST SUMMARY AND FINANCIAL HIGHLIGHTS
Essential Information 2
Expense Information 2
TRUST STRATEGIES 4
Investment Objective 4
How the Trusts Selects Investments 4
RISK FACTORS 4
DISTRIBUTIONS AND TAXES 4
Interest and Principal Distributions 4
Tax Status 5
INVESTING IN THE TRUST 5
Sales Charges 5
Dealer Concessions 5
GENERAL INFORMATION 6
Optional Features 6
The Sponsor 6
SCHEDULES OF INVESTMENTS 6
STATEMENT OF CONDITION 7
REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS 8
PROSPECTUS PART A DATED , 1997
<PAGE>
Nuveen U.S. Treasury Trust, Series 1 (Short-Term)
- ------------------------------------------------------
ESSENTIAL INFORMATION
TRUST SUMMARY AND FINANCIAL HIGHLIGHTS as of , 1997
Initial Date of Deposit: May , 1997
Principal Amount of Securities: $
Number of Units:
Fractional Undivided Interest per Unit: 1/
- --------------------------------------------------------------------------------
ESTIMATED RETURNS (1)
- ----------------------------------------------
<TABLE>
<CAPTION>
CURRENT LONG-TERM
RETURN RETURN
<S> <C> <C>
- ----------------------------------------------------------
Monthly % %
Quarterly % %
Semi-Annual % %
</TABLE>
- ----------------------------------------------
PUBLIC OFFERING PRICE (2)
Aggregate Offering Price of Securities: $
Aggregate Offering Price of Securities per Unit: $
Plus Maximum Sales Charge per Unit: $
Public Offering Price per Unit: $
- ----------------------------------------------
ESTIMATED INTEREST DISTRIBUTIONS (3)
- ----------------------------------------------
<TABLE>
<CAPTION>
SEMI-
MONTHLY QUARTERLY ANNUAL
<S> <C> <C> <C>
- ----------------------------------------------------------
Gross Annual Income per Unit: $ $ $
Less Annual Expense per Unit: $ $ $
Net Annual Income per Unit: $ $ $
First Distribution per Unit
( , 1997): $ $ $
Partial Distribution per Unit: $ $ $
(commencing): N/A / /97 / /97
Normal Distributions per Unit: $ $ $
(commencing): / /97 / /97 / /97
</TABLE>
- ----------------------------------------------
- ----------------------------------------------
MATURITY (4)
Mandatory Termination Date:
Average Dollar-Weighted Maturity: years
The Trust is composed of a laddered portfolio of U.S. Treasury Obligations that
mature from through .
- ----------------------------------------------
CREDIT QUALITY
The U.S. Treasury Obligations underlying the Trust are direct obligations of the
United States and are backed by its full faith and credit, although the Units of
the Trust are not so backed. U.S. Treasury Obligations are not rated, but in the
opinion of the Sponsor have credit characteristics comparable to those of
securities rated "AAA" by nationally recognized rating agencies.
- ----------------------------------------------
ESTIMATED CASH FLOWS
The tables below set forth the estimated distributions per 100 Units of interest
and principal to Unitholders under each plan of distribution. The tables assume
no changes in Trust expenses, no redemptions or sales of the underlying U.S.
Treasury Obligations prior to maturity and the receipt of all principal due upon
maturity. To the extent the foregoing assumptions change, actual distributions
will vary.
- ----------------------------------------------
<TABLE>
<S> <C> <C> <C>
MONTHLY
INTEREST PRINCIPAL TOTAL
DISTRIBU- DISTRIBU- DISTRIBU-
DATES TION TION TION
- ----------------------------------------------------
$ $ $
QUARTERLY
INTEREST PRINCIPAL TOTAL
DISTRIBU- DISTRIBU- DISTRIBU-
DATES TION TION TION
- ----------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
EXPENSE INFORMATION
SALES CHARGES (MAXIMUM) (5)
As a % of Public Offering Price: %
Amount per $1,000 invested $
ESTIMATED ANNUAL OPERATING EXPENSES (6)
- ----------------------------------------------
<TABLE>
<CAPTION>
SEMI-
MONTHLY QUARTERLY ANNUAL
- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Trustee's Fee: $ $ $
Sponsor's Evaluation Fee: $ $ $
Organizational Expenses (per
Unit)(7): $ $ $
Total Annual Expenses (per Unit): $ $ $
</TABLE>
- --------------------------------------------------------------------------------
Notes to Essential Information and Expense Information:
All information provided is as of the day prior to the Initial Date of Deposit
and has been calculated for Unitholders receiving monthly, quarterly or
semi-annual distribution options.
(1) The actual returns an investor will receive will vary due to the maturity,
exchange or sales of Securities, changes in fees and expenses, changes in
interest income, the market value of the Securities on the date an investor
purchases Units and how long Units are held. See "ESTIMATED LONG TERM RETURN
AND ESTIMATED CURRENT RETURN" in Part B of this Prospectus for information
concerning how Estimated Returns are calculated.
(2) The Public Offering Price will vary from that shown above due to changes in
the prices of the underlying Securities subsequent to the Initial Date of
Deposit. In addition to the Public Offering Price, investors must also pay
accrued interest from the preceding Record Date to, but not including, the
date of settlement (normally three business days after purchase). For Units
purchased on the Initial Date of Deposit, $ of accrued interest will
be added to the Public Offering Price. See "PUBLIC OFFERING PRICE" and
"ACCRUED INTEREST" both in Part B of this Prospectus for further
information.
(3) The Estimated Income figures reflected above are estimates determined as of
the business day prior to the Initial Date of Deposit and actual payments
may vary. It is anticipated that the amount of interest to be distributed
per Unit in each year will initially be substantially equal to the Estimated
Net Annual Interest Income per Unit provided. The amount of interest to be
distributed annually per Unit, will generally change as Securities are
redeemed, mature or are sold or as fees and expenses increase or decrease.
See "DISTRIBUTIONS TO UNITHOLDERS" in Part B of this Prospectus.
(4) The Mandatory Termination Date coincides with the maturity date of the
Security in the Trust's portfolio with the longest stated maturity. The
Trust may be terminated prior to the Mandatory Termination Date if such
Security is redeemed or sold prior to its maturity date or if the principal
value of the Trust is reduced below 20% of the aggregate principal amount of
Securities deposited in the Trust during the primary offering period. See
"OTHER INFORMATION -- TERMINATION OF INDENTURE" in Part B of this
Prospectus. The Average Dollar-Weighted Maturity of the Securities in the
Trust is calculated based upon the stated maturities of the Securities in
the Trust (or, with respect to Securities for which funds or securities have
been placed in escrow to redeem such Securities on a stated call date, based
upon such call date). The Average Dollar-Weighted Maturity may increase or
decrease from time to time as Securities mature or are called or sold.
(5) The sales charge is reduced for certain purchasers and for single
transactions of at least 5,000 Units or $50,000 (whichever is more favorable
to the investor). See "Sales Charges" in Part A of this Prospectus and
"PUBLIC OFFERING PRICE" in Part B of this Prospectus.
(6) The Trustees Fee and the Sponsor's Evaluation Fee are per $1,000 principal
amount of the underlying Securities in the Trust.
(7) The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (but not the expenses incurred in the printing of
preliminary and final prospectuses, nor the expenses incurred in the
preparation and printing of brochures and other advertising materials or any
other selling expenses), as is common for mutual funds. See "TRUST OPERATING
EXPENSES" in Part B of this Prospectus and "Statement of Condition."
3
<PAGE>
- ----------------------------------------------------
TRUST STRATEGIES
- -------------------------------
INVESTMENT OBJECTIVE
The Trust is designed to provide current interest income consistent with
preservation of capital which is exempt from state and local income taxes, and
offer a flexible investment. There is no assurance that the Trust will achieve
its investment objective.
INVESTMENT PHILOSOPHY
The Trust is a non-managed investment vehicle and employs a buy and hold
investment strategy. The Trust plans to hold to maturity a laddered portfolio of
U.S. Treasury Obligations with varying yields and maturities. The Trust
is designed to help protect investors against changing interest rates by
returning approximately 20% of the principal amount of the Trust semi-annually,
commencing in .
INVESTOR SUITABILITY
The Trust is a suitable investment for safety-conscious investors seeking to:
- - Earn income exempt from state and local taxes;
- - Preserve investment capital over time through owning government-guaranteed
U.S. Treasuries;
- - Reduce interest rate risk through owning a laddered portfolio.
The Trust is also available to foreign (non-resident) investors who seek income
that is exempt from U.S. withholding, PROVIDED certain conditions are met.
The Trust is not a suitable investment for individuals seeking to:
- - Pursue an aggressive high-growth investment strategy;
- - Invest in a long-term investment product.
- ----------------------------------------------
HOW THE TRUST SELECTS INVESTMENTS
The Trust consists of a portfolio of U.S. Treasury Obligations with differing
maturities which have a dollar-weighted average maturity of years.
In selecting U.S. Treasury Obligations (the "Securities") for deposit in the
Trust, the following factors, among others, were considered by the Sponsor: (a)
the types of such obligations available; (b) the prices and yields of such
obligations relative to other comparable obligations, including the extent to
which such obligations are traded at a premium or discount from par; and (c) the
maturities of such obligations. A description of the U.S. Treasury Obligations
included in the Trust are set forth in the "Schedule of Investments," below.
- ----------------------------------------------
RISK FACTORS
An investment in Units of the Trust should be made with an understanding of the
risks which an investment in fixed rate debt obligations may entail. These
include the risk that the value of the U.S. Treasury Obligations and the Units
will decline with increases in interest rates. Although in recent years interest
rates have been relatively stable, the high inflation of prior years, together
with the fiscal measures adopted to attempt to deal with it, have resulted in
wide fluctuations in interest rates and, thus, in the value of fixed rate debt
obligations generally. The Sponsor cannot predict whether such fluctuations will
continue in the future. As such, there is no guarantee that the Trust will
achieve its objectives.
Certain of the Securities included in the Trust may be original issue discount
securities or "zero coupon" securities, as noted in the "Schedule of
Investments." These Securities are subject to greater price fluctuations with
changing interest rates and contain additional risks set forth in "Risk Factors"
in Part B of this Prospectus.
- ----------------------------------------------
DISTRIBUTIONS AND TAXES
- -------------------------------
INTEREST AND PRINCIPAL DISTRIBUTIONS
The Trustee of the Trust (The Chase Manhattan Bank) will collect principal and
interest on the Securities as it comes due and hold such amounts for
distribution to Unitholders. The amount of the Net Annual Income per Unit under
each plan of distribution, as set forth under "Essential Information --
Estimated Interest Distributions" assumes that all of the Securities are
delivered to the Trust. See "COMPOSITION OF TRUSTS" appearing in Part B of this
Prospectus. The amount of each Interest Distribution on a per Unit basis under
each plan of distribution will decrease as the underlying Securities mature or
are sold. Interest income does not include accretion of original issue discount
on "zero coupon" Securities. See "RISK FACTORS" in Part B of this Prospectus.
Distributions of income will be paid by the Trustee under each plan of
distribution to Unitholders on the respective Distribution Dates to Unitholders
of record on the applicable Record Dates as set forth under "DISTRIBUTIONS TO
UNITHOLDERS" in Part B of this Prospectus. Distributions of principal will be
4
<PAGE>
paid within five business days after a Security matures to Unitholders of record
on such maturity date, provided the amount available for distribution equals at
least $0.10 per Unit.
The amount of interest you will receive on an annual basis will be reduced by
the expenses of the Trust and will generally change as Securities mature or are
sold or as fees and expenses increase or decrease.
- ----------------------------------------------
TAX STATUS
The Trust passes through to Unitholders in all states the exemption from state
and local personal income taxes afforded to direct owners of U.S. Treasury
Obligations. In addition, for non-resident aliens, income from the Trust will be
exempt from withholding for U.S. federal income tax, PROVIDED certain conditions
are met. See "TAX STATUS" in Part B of this Prospectus for further tax
information.
- ----------------------------------------------
INVESTING IN THE TRUST
- -------------------------------
SALES CHARGES
The maximum sales charge of 1.75% applies only to purchases of less than 5,000
Units. Sales charges for larger single transactions during the primary offering
period are as follows:
- ----------------------------------------------
PRIMARY MARKET SALES CHARGE
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
OFFERING NET AMOUNT
NUMBER OF UNITS* PRICE INVESTED
- -------------------------------------- ------------- -----------
<S> <C> <C>
Less than 5,000....................... 1.75% 1.781%
5,000 but less than 10,000............ 1.50 1.523
10,000 or more........................ 1.25 1.266
Wrap Accounts......................... 0.75 0.756
</TABLE>
*Breakpoint sales charges are computed both on a dollar basis and on the basis
of the number of Units purchased, using the equivalent of 5,000 Units to
$50,000, 10,000 Units to $100,000 etc., and will be applied on that basis which
is more favorable to the purchaser.
The sales charge assessed on Units sold in secondary market transactions is
determined in accordance with the table set forth below based upon the dollar
amount purchased and the Weighted Average Maturity of the Trust:
- ----------------------------------------------
SECONDARY MARKET SALES CHARGE
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
MATURITY
------------------------
LESS THAN TWO OR MORE
PURCHASE PRICE* TWO YEARS YEARS
- -------------------------------------------- ----------- -----------
<S> <C> <C>
Less than $50,000........................... % %
$50,000 but less than $100,000..............
$100,000 but less than $250,000.............
$250,000 but less than $500,000.............
$500,000 but less than $1,000,000...........
$1,000,000 but less than $2,500,000.........
$2,500,000 but less than $5,000,000.........
$5,000,000 or more..........................
</TABLE>
- ----------------------------------------------------
DEALER CONCESSIONS
The Sponsor plans to allow a discount to brokers and dealers in connection with
the primary distribution of Units and also in secondary market transactions. The
primary market discounts, based on number of Units sold, are as follows:
- ----------------------------------------------
PRIMARY MARKET DEALER CONCESSIONS
<TABLE>
<CAPTION>
DISCOUNT PER
NUMBER OF UNITS* UNIT
- ------------------------------------------------ -------------
<S> <C>
Less than 5,000................................. $ 1.00
5,000 but less than 10,000...................... 0.90
10,000 or more.................................. 0.75
Wrap Accounts................................... 0.00
</TABLE>
Dealer concessions on secondary market purchases of Trust Units through the
Sponsor, based on the weighted average maturity of the Trust are as follows:
- ----------------------------------------------
SECONDARY MARKET DEALER CONCESSIONS
<TABLE>
<CAPTION>
DISCOUNT PER UNIT
------------------------
WEIGHTED
AVERAGE
MATURITY
------------------------
LESS THAN TWO OR MORE
PURCHASE PRICE* TWO YEARS YEARS
- ---------------------------------------- ----------- -----------
<S> <C> <C>
Less than $50,000 $ $
$50,000 but less than $100,000
$100,000 but less than $250,000
$250,000 but less than $500,000
$500,000 but less than $1,000,000
$1,000,000 but less than $2,500,000
$2,500,000 but less than $5,000,000
$5,000,000 or more
</TABLE>
5
<PAGE>
- ----------------------------------------------
GENERAL INFORMATION
- -------------------------------
OPTIONAL FEATURES
REDEMPTIONS
Units may be redeemed on any business day at no charge. Units are redeemed at
their current market value. See "REDEMPTION" in Part B of this Prospectus.
LETTER OF INTENT (LOI)
Investors may use a Letter of Intent to get reduced sales charges on purchases
made over a 13-month period (and to take advantage of dollar cost averaging).
The minimum LOI investment is $50,000. See "PUBLIC OFFERING PRICE" in Part B of
this Prospectus.
REINVESTMENT
Interest income and returned principal can be reinvested with no sales charge
into Nuveen mutual or money market funds. See "ACCUMULATION PLAN" in Part B of
this Prospectus. For more information obtain a prospectus from your financial
advisor.
- ----------------------------------------------
THE SPONSOR
Since our founding in 1898, John Nuveen & Co. Incorporated has been synonymous
with investments that withstand the test of time. Today, we offer a range of
equity and fixed-income unit trusts designed to suit the unique circumstances
and financial planning needs of mature investors. More than 1.3 million
investors have entrusted Nuveen to help them maintain the life-style they
currently enjoy.
The prospectus describes in detail the investment objectives, policies and risks
of this unit trust. We invite you to discuss the contents with your financial
adviser, or you may call us at 800-621-7227 for additional information.
- --------------------------------------------------------------------------------
NUVEEN U.S. TREASURY TRUST, SERIES 1 (SHORT-TERM)
(Nuveen Unit Trust, Series 1)
Schedule of Investments at the Initial Date of Deposit, , 1997
<TABLE>
<CAPTION>
FACE AMOUNT DESCRIPTION COUPON MATURITY
<C> <C> <S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
$
- --------------
$
- --------------
- --------------
<CAPTION>
TRUSTEE'S
<C> <C>
- -----------------------------------------------
$ $
- -------------- ---------------
$ $
- -------------- ---------------
- -------------- ---------------
</TABLE>
- ---------------
(1) The Sponsor's contracts to purchase U.S. Treasury Obligations were entered
into on , 1997. Other information regarding the U.S. Treasury
Obligations in the Trust on the Date of Deposit is as follows:
<TABLE>
<CAPTION>
ANNUAL
PROFIT INTEREST BID PRICE
COST TO (OR LOSS) INCOME TO OF
TRUST SPONSOR TO SPONSOR TRUST SECURITIES
- ---------------------------------------------------------------------- ----------- ------------- ------------- -----------
<S> <C> <C> <C> <C>
Nuveen U.S. Treasury Trust, Series 1 (Short-Term).....................
</TABLE>
In addition, the difference between the Trustee's determination of Offering
Price and Bid Price (as a percentage of principal amount) is %.
(2) This Security has been purchased at a deep discount from the par value
because there is no stated interest income thereon. Securities which pay no
interest are normally described as "zero coupon" securities. Over the life
of Securities purchased at a deep discount the value of such Securities
will increase such that upon maturity the holders of such securities will
receive 100% of the principal amount thereof.
6
<PAGE>
- --------------------------------------------------------------------------------
NUVEEN U.S. TREASURY TRUST, SERIES 1 (SHORT-TERM)
(Nuveen Unit Trust, Series 1)
Statement of Condition at the Initial Date of Deposit, , 1997
<TABLE>
<S> <C>
TRUST PROPERTY
Sponsor's contracts to purchase Securities, backed by an irrevocable letter of
credit(1)(2).................................................................
Accrued interest to , 1997 on underlying Securities(1)..................
Organizational costs(3)........................................................
----------
Total.............................................................
----------
----------
LIABILITIES AND INTEREST OF UNITHOLDERS
LIABILITIES:
Accrued interest to , 1997 on underlying Securities(4)..............
Accrued organizational costs(3)............................................
----------
Total.............................................................
----------
----------
INTEREST OF UNITHOLDERS:
Units of fractional undivided interest outstanding.........................
Cost to investors(5).......................................................
Less: Gross underwriting commission(6).................................
----------
Net amount applicable to investors.........................................
----------
Total.............................................................
----------
----------
</TABLE>
- ------------
(1) Represented by contracts to purchase Securities which include "when issued"
or "regular way" or "delayed delivery" contracts for which an irrevocable
letter of credit issued by a major commercial bank has been deposited with
the Trustee on the Initial Date of Deposit. The amount of such letter of
credit and any cash deposited exceeds the amount necessary for the purchase
of the Securities plus accrued interest to the Initial Date of Deposit. At
the Initial Date of Deposit, Securities may have been delivered to the
Sponsor pursuant to certain of these contracts; the Sponsor has assigned to
the Trustee all of its rights, title and interest in and to such Securities.
(2) Aggregate value (at offering prices) as of the Initial Date of Deposit of
the Securities listed under "SCHEDULE OF INVESTMENTS" herein, and their
aggregate cost to the Trusts are the same. Such offering prices were
determined by Kenny S&P Evaluation Services, a division of J.J. Kenny Co.,
Inc., as of the close of business on the business day prior to the Initial
Date of Deposit. (See "EVALUATION OF SECURITIES AT THE INITIAL DATE OF
DEPOSIT?" in Part B of this Prospectus.)
(3) The Trust (and therefore Unitholders) will bear all or a portion of its
estimated organizational costs which will be deferred and amortized over the
life of the Trust.
(4) Representing, as set forth in "ACCRUED INTEREST" in Part B of this
Prospectus, advancement by the Trustee of an amount equal to the accrued
Securities' interest as of the Initial Date of Deposit.
(5) Aggregate Public Offering Price (exclusive of accrued interest) computed as
set forth under "PUBLIC OFFERING PRICE" in Part B of this Prospectus.
(6) The gross underwriting commission of 1.75% of the Public Offering Price has
been calculated on the assumption that the Units sold are not subject to a
reduction of sales charge for quantity purchases. In single transactions
involving 5,000 Units or more, the sales charge is reduced. (See "PUBLIC
OFFERING PRICE" in Part B of this Prospectus.)
7
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS OF JOHN NUVEEN & CO. INCORPORATED AND UNITHOLDERS OF
NUVEEN UNIT TRUST, SERIES 1:
We have audited the accompanying statement of condition and the schedule of
investments at date of deposit (included in Part A of this Prospectus) of Nuveen
Unit Trust, Series 1 (Nuveen U.S. Treasury Trust, Series 1 (Short-Term)), as of
, 1997. These financial statements are the responsibility of the Sponsor.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of the irrevocable letter of credit arrangement for the purchase of
securities, described in Note (1) to the statement of condition, by
correspondence with the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Sponsor, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the statement of condition and the schedule of investments at
date of deposit referred to above present fairly, in all material respects, the
financial position of Nuveen Unit Trust, Series 1 (Nuveen U.S. Treasury Trust,
Series 1 (Short-Term)) as of , 1997, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
, 1997.
8
<PAGE>
Nuveen Unit Trusts NUVEEN
- -------------------------------------------------------------
PROSPECTUS
Nuveen U.S. Treasury Trust, Series 2 (Short-Intermediate)
CUSIP:
A Nuveen unit trust with an average dollar-weighted maturity of years for
individual investors seeking current interest income consistent with
preservation of capital and investment flexibility provided by a laddered
portfolio of U.S. Treasury Obligations.
- ----------------------------------------------
OVERVIEW
The trust listed above (the "Trust") is a unit investment trust designed to
provide current interest income consistent with preservation of capital which is
exempt from state and local income taxes. The Trust consists of a portfolio of
U.S. Treasury Obligations that are backed by the full faith and credit of the
United States Government. The Trust also passes through to Unitholders in all
states the exemption from state and local personal income taxes afforded to
direct owners of U.S. Treasury Obligations. In addition, the Trust is also
available to non-resident aliens, and the income from the Trust, provided
certain conditions are met, will be exempt from withholding for U.S. federal
income tax for such foreign investors.
THIS PART A PROSPECTUS MAY NOT BE DISTRIBUTED UNLESS ACCOMPANIED BY THE FIXED
INCOME TRUST PART B PROSPECTUS WHICH IS DATED _______, 1997.
UNITS OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK AND ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED BY THE FDIC OR
ANY OTHER FEDERAL AGENCY AND INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- ----------------------------------------------
CONTENTS
OVERVIEW 1
TRUST SUMMARY AND FINANCIAL HIGHLIGHTS
Essential Information 2
Expense Information 2
TRUST STRATEGIES 4
Investment Objective 4
How the Trusts Selects Investments 4
RISK FACTORS 4
DISTRIBUTIONS AND TAXES 4
Interest and Principal Distributions 4
Tax Status 5
INVESTING IN THE TRUST 5
Sales Charges 5
Dealer Concessions 5
GENERAL INFORMATION 6
Optional Features 6
The Sponsor 6
SCHEDULES OF INVESTMENTS 6
STATEMENT OF CONDITION 7
REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS 8
PROSPECTUS PART A DATED , 1997
<PAGE>
Nuveen U.S. Treasury Trust, Series 2
(Short-Intermediate)
- --------------------------------------------
ESSENTIAL INFORMATION
TRUST SUMMARY AND FINANCIAL HIGHLIGHTS as of , 1997
Initial Date of Deposit: May , 1997
Principal Amount of Securities: $
Number of Units:
Fractional Undivided Interest per Unit: 1/
- --------------------------------------------------------------------------------
ESTIMATED RETURNS (1)
- ----------------------------------------------
<TABLE>
<CAPTION>
CURRENT LONG-TERM
RETURN RETURN
<S> <C> <C>
- ----------------------------------------------------
Monthly % %
Quarterly % %
Semi-Annual % %
</TABLE>
- ----------------------------------------------
- ----------------------------------------------
PUBLIC OFFERING PRICE (2)
Aggregate Offering Price of Securities: $
Aggregate Offering Price of Securities per Unit: $
Plus Maximum Sales Charge per Unit: $
Public Offering Price per Unit: $
- ----------------------------------------------
ESTIMATED INTEREST DISTRIBUTIONS (3)
- ----------------------------------------------
<TABLE>
<CAPTION>
SEMI-
MONTHLY QUARTERLY ANNUAL
<S> <C> <C> <C>
- ----------------------------------------------------
Gross Annual Income per
Unit: $ $ $
Less Annual Expense per
Unit: $ $ $
Net Annual Income per
Unit: $ $ $
First Distribution per
Unit ( , 1997): $ $ $
Partial Distribution per
Unit: $ $ $
(commencing): N/A / /97 / /97
Normal Distributions per
Unit: $ $ $
(commencing): / /97 / /97 / /97
</TABLE>
- ----------------------------------------------
- ----------------------------------------------
MATURITY (4)
Mandatory Termination Date:
Average Dollar-Weighted Maturity: years
The Trust is composed of a laddered portfolio of U.S. Treasury Obligations that
mature from through .
CREDIT QUALITY
The U.S. Treasury Obligations underlying the Trust are direct obligations of the
United States and are backed by its full faith and credit, although the Units of
the Trust are not so backed. U.S. Treasury Obligations are not rated, but in the
opinion of the Sponsor have credit characteristics comparable to those of
securities rated "AAA" by nationally recognized rating agencies.
- ----------------------------------------------
ESTIMATED CASH FLOWS
The tables below set forth the estimated distributions per 100 Units of interest
and principal to Unitholders under each plan of distribution. The tables assume
no changes in Trust expenses, no redemptions or sales of the underlying U.S.
Treasury Obligations prior to maturity and the receipt of all principal due upon
maturity. To the extent the foregoing assumptions change, actual distributions
will vary.
- ----------------------------------------------
<TABLE>
<S> <C> <C> <C>
MONTHLY
INTEREST PRINCIPAL TOTAL
DISTRIBU- DISTRIBU- DISTRIBU-
DATES TION TION TION
- ----------------------------------------------------
$ $ $
QUARTERLY
INTEREST PRINCIPAL TOTAL
DISTRIBU- DISTRIBU- DISTRIBU-
DATES TION TION TION
- ----------------------------------------------------
$ $ $
SEMI-ANNUAL
INTEREST PRINCIPAL TOTAL
DISTRIBU- DISTRIBU- DISTRIBU-
DATES TION TION TION
- ----------------------------------------------------
$ $ $
</TABLE>
- ----------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
EXPENSE INFORMATION
SALES CHARGES (MAXIMUM) (5)
As a % of Public Offering Price: %
Amount per $1,000 invested $
ESTIMATED ANNUAL OPERATING EXPENSES (6)
- ----------------------------------------------
<TABLE>
<CAPTION>
SEMI-
MONTHLY QUARTERLY ANNUAL
<S> <C> <C> <C>
- ----------------------------------------------------
Trustee's Fee: $ $ $
Sponsor's Evaluation Fee: $ $ $
Organizational Expenses
(per Unit)(7): $ $ $
Total Annual Expenses (per
Unit): $ $ $
</TABLE>
- --------------------------------------------------------------------------------
Notes to Essential Information and Expense Information:
All information provided is as of the day prior to the Initial Date of Deposit
and has been calculated for Unitholders receiving monthly, quarterly or
semi-annual distribution options.
(1) The actual returns an investor will receive will vary due to the maturity,
exchange or sales of Securities, changes in fees and expenses, changes in
interest income, the market value of the Securities on the date an investor
purchases Units and how long Units are held. See "ESTIMATED LONG TERM RETURN
AND ESTIMATED CURRENT RETURN" in Part B of this Prospectus for information
concerning how Estimated Returns are calculated.
(2) The Public Offering Price will vary from that shown above due to changes in
the prices of the underlying Securities subsequent to the Initial Date of
Deposit. In addition to the Public Offering Price, investors must also pay
accrued interest from the preceding Record Date to, but not including, the
date of settlement (normally three business days after purchase). For Units
purchased on the Initial Date of Deposit, $ of accrued interest will
be added to the Public Offering Price. See "PUBLIC OFFERING PRICE" and
"ACCRUED INTEREST" both in Part B of this Prospectus for further
information.
(3) The Estimated Income figures reflected above are estimates determined as of
the business day prior to the Initial Date of Deposit and actual payments
may vary. It is anticipated that the amount of interest to be distributed
per Unit in each year will initially be substantially equal to the Estimated
Net Annual Interest Income per Unit provided. The amount of interest to be
distributed annually per Unit, will generally change as Securities are
redeemed, mature or are sold or as fees and expenses increase or decrease.
See "DISTRIBUTIONS TO UNITHOLDERS" in Part B of this Prospectus.
(4) The Mandatory Termination Date coincides with the maturity date of the
Security in the Trust's portfolio with the longest stated maturity. The
Trust may be terminated prior to the Mandatory Termination Date if such
Security is redeemed or sold prior to its maturity date or if the principal
value of the Trust is reduced below 20% of the aggregate principal amount of
Securities deposited in the Trust during the primary offering period. See
"OTHER INFORMATION -- TERMINATION OF INDENTURE" in Part B of this
Prospectus. The Average Dollar-Weighted Maturity of the Securities in the
Trust is calculated based upon the stated maturities of the Securities in
the Trust (or, with respect to Securities for which funds or securities have
been placed in escrow to redeem such Securities on a stated call date, based
upon such call date). The Average Dollar-Weighted Maturity may increase or
decrease from time to time as Securities mature or are called or sold.
(5) The sales charge is reduced for certain purchasers and for single
transactions of at least 5,000 Units or $50,000 (whichever is more favorable
to the investor). See "Sales Charges" in Part A of this Prospectus and
"PUBLIC OFFERING PRICE" in Part B of this Prospectus.
(6) The Trustees Fee and the Sponsor's Evaluation Fee are per $1,000 principal
amount of the underlying Securities in the Trust.
(7) The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (but not the expenses incurred in the printing of
preliminary and final prospectuses, nor the expenses incurred in the
preparation and printing of brochures and other advertising materials or any
other selling expenses), as is common for mutual funds. See "TRUST OPERATING
EXPENSES" in Part B of this Prospectus and "Statement of Condition."
3
<PAGE>
- ----------------------------------------------------
TRUST STRATEGIES
- -------------------------------
INVESTMENT OBJECTIVE
The Trust is designed to provide current interest income consistent with
preservation of capital which is exempt from state and local income taxes, and
offer a flexible investment. There is no assurance that the Trust will achieve
its investment objective.
INVESTMENT PHILOSOPHY
The Trust is a non-managed investment vehicle and employs a buy and hold
investment strategy. The Trust plans to hold to maturity a laddered portfolio of
U.S. Treasury Obligations with varying yields and maturities. The Trust
is designed to help protect investors against changing interest rates by
returning approximately 20% of the principal amount of the Trust annually,
commencing in .
INVESTOR SUITABILITY
The Trust is a suitable investment for safety-conscious investors seeking to:
- - Earn income exempt from state and local taxes;
- - Preserve investment capital over time through owning government-guaranteed
U.S. Treasuries;
- - Reduce interest rate risk through owning a laddered portfolio.
The Trust is also available to foreign (non-resident) investors who seek income
that is exempt from U.S. withholding, PROVIDED certain conditions are met.
The Trust is not a suitable investment for individuals seeking to:
- - Pursue an aggressive high-growth investment strategy;
- - Invest in a long-term investment product.
- ----------------------------------------------
HOW THE TRUST SELECTS INVESTMENTS
The Trust consists of a portfolio of U.S. Treasury Obligations with differing
maturities which have a dollar-weighted average maturity of years.
In selecting U.S. Treasury Obligations (the "Securities") for deposit in the
Trust, the following factors, among others, were considered by the Sponsor: (a)
the types of such obligations available; (b) the prices and yields of such
obligations relative to other comparable obligations, including the extent to
which such obligations are traded at a premium or discount from par; and (c) the
maturities of such obligations. A description of the U.S. Treasury Obligations
included in the Trust are set forth in the "Schedule of Investments," below.
- ----------------------------------------------
RISK FACTORS
An investment in Units of the Trust should be made with an understanding of the
risks which an investment in fixed rate debt obligations may entail. These
include the risk that the value of the U.S. Treasury Obligations and the Units
will decline with increases in interest rates. Although in recent years interest
rates have been relatively stable, the high inflation of prior years, together
with the fiscal measures adopted to attempt to deal with it, have resulted in
wide fluctuations in interest rates and, thus, in the value of fixed rate debt
obligations generally. The Sponsor cannot predict whether such fluctuations will
continue in the future. As such, there is no guarantee that the Trust will
achieve its objectives.
Certain of the Securities included in the Trust may be original issue discount
Securities or "zero coupon" Securities, as noted in the "Schedule of
Investments." These Securities are subject to greater price fluctuations with
changing interest rates and contain additional risks set forth in "RISK FACTORS"
in Part B of this Prospectus.
- ----------------------------------------------
DISTRIBUTIONS AND TAXES
- -------------------------------
INTEREST AND PRINCIPAL DISTRIBUTIONS
The Trustee of the Trust (The Chase Manhattan Bank) will collect principal and
interest on the Securities as it comes due and hold such amounts for
distribution to Unitholders. The amount of the Net Annual Income per Unit under
each plan of distribution, as set forth under "Essential Information --
Estimated Interest Distributions" assumes that all of the Securities are
delivered to the Trust. See "COMPOSITION OF TRUSTS" appearing in Part B of this
Prospectus. The amount of each Interest Distribution on a per Unit basis under
each plan of distribution will decrease as the underlying Securities mature or
are sold. Interest income does not include accretion of original issue discount
on "zero coupon" Securities. See "RISK FACTORS" in Part B of this Prospectus.
Distributions of income will be paid by the Trustee under each plan of
distribution to Unitholders on the respective Distribution Dates to Unitholders
of record on the applicable Record Dates as set forth under "DISTRIBUTIONS TO
UNITHOLDERS" in Part B of this Prospectus. Distributions of principal will be
4
<PAGE>
paid within five business days after a Security matures to Unitholders of record
on such maturity date, provided the amount available for distribution equals at
least $0.10 per Unit.
The amount of interest you will receive on an annual basis will be reduced by
the expenses of the Trust and will generally change as Securities mature or are
sold or as fees and expenses increase or decrease.
- ----------------------------------------------
TAX STATUS
The Trust passes through to Unitholders in all states the exemption from state
and local personal income taxes afforded to direct owners of U.S. Treasury
Obligations. In addition, for non-resident aliens, income from the Trust will be
exempt from withholding for U.S. federal income tax, PROVIDED certain conditions
are met. See "TAX STATUS" in Part B of this Prospectus for further tax
information.
- ----------------------------------------------
INVESTING IN THE TRUST
- -------------------------------
SALES CHARGES
The maximum sales charge of 1.75% applies only to purchases of less than 5,000
Units. Sales charges for larger single transactions during the primary offering
period are as follows:
- ----------------------------------------------
PRIMARY MARKET SALES CHARGE
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
OFFERING NET AMOUNT
NUMBER OF UNITS* PRICE INVESTED
- ------------------------------------- ------------- -----------
<S> <C> <C>
Less than 5,000...................... 1.75% 1.781%
5,000 but less than 10,000........... 1.50 1.523
10,000 or more....................... 1.25 1.266
Wrap Accounts........................ 0.75 0.756
</TABLE>
*Breakpoint sales charges are computed both on a dollar basis and on the basis
of the number of Units purchased, using the equivalent of 5,000 Units to
$50,000, 10,000 Units to $100,000 etc., and will be applied on that basis which
is more favorable to the purchaser.
The sales charge assessed on Units sold in secondary market transactions is
determined in accordance with the table set forth below based upon the dollar
amount purchased and the Weighted Average Maturity of the Trust:
- ----------------------------------------------
SECONDARY MARKET SALES CHARGE
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
MATURITY
------------------------
LESS THAN TWO OR MORE
PURCHASE PRICE* TWO YEARS YEARS
- ------------------------------------------- ----------- -----------
<S> <C> <C>
Less than $50,000.......................... % %
$50,000 but less than $100,000.............
$100,000 but less than $250,000............
$250,000 but less than $500,000............
$500,000 but less than $1,000,000..........
$1,000,000 but less than $2,500,000........
$2,500,000 but less than $5,000,000........
$5,000,000 or more.........................
</TABLE>
- ----------------------------------------------------
DEALER CONCESSIONS
The Sponsor plans to allow a discount to brokers and dealers in connection with
the primary distribution of Units and also in secondary market transactions. The
primary market discounts, based on number of Units sold, are as follows:
- ----------------------------------------------
PRIMARY MARKET DEALER CONCESSIONS
<TABLE>
<CAPTION>
DISCOUNT PER
NUMBER OF UNITS* UNIT
- ------------------------------------------------ -------------
<S> <C>
Less than 5,000................................. $ 1.00
5,000 but less than 10,000...................... 0.90
10,000 or more.................................. 0.75
Wrap Accounts................................... 0.00
</TABLE>
Dealer concessions on secondary market purchases of Trust Units through the
Sponsor, based on the weighted average maturity of the Trust are as follows:
- ----------------------------------------------
SECONDARY MARKET DEALER CONCESSIONS
<TABLE>
<CAPTION>
DISCOUNT PER UNIT
------------------------
WEIGHTED
AVERAGE
MATURITY
------------------------
LESS THAN TWO OR MORE
PURCHASE PRICE* TWO YEARS YEARS
- --------------------------------------- ----------- -----------
<S> <C> <C>
Less than $50,000...................... $ $
$50,000 but less than $100,000.........
$100,000 but less than $250,000........
$250,000 but less than $500,000........
$500,000 but less than $1,000,000......
$1,000,000 but less than $2,500,000....
$2,500,000 but less than $5,000,000....
$5,000,000 or more.....................
</TABLE>
5
<PAGE>
- ----------------------------------------------------
GENERAL INFORMATION
- -------------------------------
OPTIONAL FEATURES
REDEMPTIONS
Units may be redeemed on any business day at no charge. Units are redeemed at
their current market value. See "REDEMPTION" in Part B of this Prospectus.
LETTER OF INTENT (LOI)
Investors may use a Letter of Intent to get reduced sales charges on purchases
made over a 13-month period (and to take advantage of dollar cost averaging).
The minimum LOI investment is $50,000. See "PUBLIC OFFERING PRICE" in Part B of
this Prospectus.
REINVESTMENT
Interest income and returned principal can be reinvested with no sales charge
into Nuveen mutual or money market funds. See "ACCUMULATION PLAN" in Part B of
this Prospectus. For more information obtain a prospectus from your financial
advisor.
- ----------------------------------------------
THE SPONSOR
Since our founding in 1898, John Nuveen & Co. Incorporated has been synonymous
with investments that withstand the test of time. Today, we offer a range of
equity and fixed-income unit trusts designed to suit the unique circumstances
and financial planning needs of mature investors. More than 1.3 million
investors have entrusted Nuveen to help them maintain the life-style they
currently enjoy.
The prospectus describes in detail the investment objectives, policies and risks
of this unit trust. We invite you to discuss the contents with your financial
adviser, or you may call us at 800-621-7227 for additional information.
- --------------------------------------------------------------------------------
NUVEEN U.S. TREASURY TRUST, SERIES 2 (SHORT-INTERMEDIATE)
(Nuveen Unit Trust, Series 1)
Schedule of Investments at the Initial Date of Deposit, , 1997
<TABLE>
<CAPTION>
TRUSTEE'S
DETERMINATION
OF OFFERING
FACE AMOUNT DESCRIPTION COUPON MATURITY PRICE(1)
<C> <S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
$ $
- --------------- ---------------
$ $
- --------------- ---------------
- --------------- ---------------
</TABLE>
- ---------------
(1) The Sponsor's contracts to purchase U.S. Treasury Obligations were entered
into on , 1997. Other information regarding the U.S. Treasury
Obligations in the Trust on the Date of Deposit is as follows:
<TABLE>
<CAPTION>
ANNUAL
PROFIT INTEREST BID PRICE
COST TO (OR LOSS) INCOME TO OF
TRUST SPONSOR TO SPONSOR TRUST SECURITIES
- ------------------------------------------------------------------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Nuveen U.S. Treasury Trust, Series 2 (Short-Intermediate)..........
</TABLE>
In addition, the difference between the Trustee's determination of Offering
Price and Bid Price (as a percentage of principal amount) is %.
(2) This Security has been purchased at a deep discount from the par value
because there is no stated interest income thereon. Securities which pay no
interest are normally described as "zero coupon" securities. Over the life
of Securities purchased at a deep discount the value of such Securities
will increase such that upon maturity the holders of such securities will
receive 100% of the principal amount thereof.
6
<PAGE>
- --------------------------------------------------------------------------------
NUVEEN U.S. TREASURY TRUST, SERIES 2 (SHORT-INTERMEDIATE)
(Nuveen Unit Trust, Series 1)
Statement of Condition at the Initial Date of Deposit, , 1997
<TABLE>
<S> <C>
TRUST PROPERTY
Sponsor's contracts to purchase Securities, backed by an irrevocable letter of
credit(1)(2).................................................................
Accrued interest to , 1997 on underlying Securities(1)..................
Organizational costs(3)........................................................
---------
Total..............................................................
---------
---------
LIABILITIES AND INTEREST OF UNITHOLDERS
LIABILITIES:
Accrued interest to , 1997 on underlying Securities(4)..............
Accrued organizational costs(3)............................................
---------
Total..............................................................
---------
---------
INTEREST OF UNITHOLDERS:
Units of fractional undivided interest outstanding.........................
Cost to investors(5).......................................................
Less: Gross underwriting commission(6).................................
---------
Net amount applicable to investors.........................................
---------
Total..............................................................
---------
---------
</TABLE>
- ------------
(1) Represented by contracts to purchase Securities which include "when issued"
or "regular way" or "delayed delivery" contracts for which an irrevocable
letter of credit issued by a major commercial bank has been deposited with
the Trustee on the Initial Date of Deposit. The amount of such letter of
credit and any cash deposited exceeds the amount necessary for the purchase
of the Securities plus accrued interest to the Initial Date of Deposit. At
the Initial Date of Deposit, Securities may have been delivered to the
Sponsor pursuant to certain of these contracts; the Sponsor has assigned to
the Trustee all of its rights, title and interest in and to such Securities.
(2) Aggregate value (at offering prices) as of the Initial Date of Deposit of
the Securities listed under "SCHEDULE OF INVESTMENTS" herein, and their
aggregate cost to the Trusts are the same. Such offering prices were
determined by Kenny S&P Evaluation Services, a division of J.J. Kenny Co.,
Inc., as of the close of business on the business day prior to the Initial
Date of Deposit. (See "EVALUATION OF SECURITIES AT THE INITIAL DATE OF
DEPOSIT?" in Part B of this Prospectus.)
(3) The Trust (and therefore Unitholders) will bear all or a portion of its
estimated organizational costs which will be deferred and amortized over the
life of the Trust.
(4) Representing, as set forth in "ACCRUED INTEREST" in Part B of this
Prospectus, advancement by the Trustee of an amount equal to the accrued
Securities' interest as of the Initial Date of Deposit.
(5) Aggregate Public Offering Price (exclusive of accrued interest) computed as
set forth under "PUBLIC OFFERING PRICE" in Part B of this Prospectus.
(6) The gross underwriting commission of 1.75% of the Public Offering Price has
been calculated on the assumption that the Units sold are not subject to a
reduction of sales charge for quantity purchases. In single transactions
involving 5,000 Units or more, the sales charge is reduced. (See "PUBLIC
OFFERING PRICE" in Part B of this Prospectus.)
7
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS OF JOHN NUVEEN & CO. INCORPORATED AND UNITHOLDERS OF
NUVEEN UNIT TRUST, SERIES 1:
We have audited the accompanying statement of condition and the schedule of
investments at date of deposit (included in Part A of this Prospectus) of Nuveen
Unit Trust, Series 1 (Nuveen U.S. Treasury Trust, Series 2
(Short-Intermediate)), as of , 1997. These financial statements are the
responsibility of the Sponsor. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of the irrevocable letter of credit arrangement for the purchase of
securities, described in Note (1) to the statement of condition, by
correspondence with the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Sponsor, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the statement of condition and the schedule of investments at
date of deposit referred to above present fairly, in all material respects, the
financial position of Nuveen Unit Trust, Series 1 (Nuveen U.S. Treasury Trust,
Series 2 (Short-Intermediate)) as of , 1997, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
, 1997.
8
<PAGE>
Nuveen Unit Trusts NUVEEN
- -------------------------------------------------------------
PROSPECTUS
Nuveen Insured Corporate Trust, Series 1 (Long-Term)
CUSIP:
A Nuveen unit trust with an average dollar-weighted maturity of years for
individual investors seeking a high level of current interest income consistent
with preservation of capital provided by an insured portfolio of corporate debt
obligations issued by utility companies. The Trust may also contain zero coupon
U.S. Treasury Obligations.
- ----------------------------------------------
OVERVIEW
The trust listed above (the "Trust") is a unit investment trust designed to
provide a high level of current income consistent with preservation of capital,
through investment in a portfolio consisting primarily of corporate debt
obligations (the "Bonds") issued by utility companies after July 18, 1984. The
Trust may also contain zero coupon U.S. Treasury Obligations which will
represent less than 20% of the principal amount of securities deposited in the
Trust. Insurance guaranteeing the scheduled payment of principal and interest on
all of the Bonds in the Trust has been obtained directly by the issuer of such
Bonds or by the Sponsor from MBIA Insurance Corporation or other Insurers. THE
INSURANCE DOES NOT RELATE TO THE UNITS OFFERED HEREBY OR TO THEIR MARKET VALUE.
As a result of such insurance, the Units of the Trust are rated "AAA" by
Standard & Poor's. In addition, the Trust is also available to non-resident
aliens, and the income from the Trust, provided certain conditions are met, will
be exempt from withholding for U.S. federal income tax for such foreign
investors.
THIS PART A PROSPECTUS MAY NOT BE DISTRIBUTED UNLESS ACCOMPANIED BY THE FIXED
INCOME TRUST PART B PROSPECTUS WHICH IS DATED _______, 1997.
UNITS OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK AND ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED BY THE FDIC OR
ANY OTHER FEDERAL AGENCY AND INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- ----------------------------------------------
CONTENTS
OVERVIEW 1
TRUST SUMMARY AND FINANCIAL HIGHLIGHTS
Essential Information 2
Expense Information 2
TRUST STRATEGIES 4
Investment Objective 4
How the Trusts Selects Investments 4
RISK FACTORS 4
DISTRIBUTIONS AND TAXES 4
Interest and Principal Distributions 4
Tax Status 5
INVESTING IN THE TRUST 5
Sales Charges 5
Dealer Concessions 5
GENERAL INFORMATION 6
Optional Features 6
The Sponsor 6
SCHEDULES OF INVESTMENTS 6
STATEMENT OF CONDITION 7
REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS 8
PROSPECTUS PART A DATED , 1997
<PAGE>
Nuveen Insured Corporate Trust, Series 1
- --------------------------------------------
ESSENTIAL INFORMATION
TRUST SUMMARY AND FINANCIAL HIGHLIGHTS as of , 1997
Initial Date of Deposit: May , 1997
Principal Amount of Securities: $
Number of Units:
Fractional Undivided Interest per Unit: 1/
- --------------------------------------------------------------------------------
ESTIMATED RETURNS (1)
- ----------------------------------------------
<TABLE>
<CAPTION>
CURRENT LONG-TERM
RETURN RETURN
<S> <C> <C>
- ----------------------------------------------------
Monthly % %
Quarterly % %
Semi-Annual % %
</TABLE>
- ----------------------------------------------
PUBLIC OFFERING PRICE (2)
Aggregate Offering Price of Securities: $
Aggregate Offering Price of Securities per Unit: $
Plus Maximum Sales Charge per Unit: $
Public Offering Price per Unit: $
- ----------------------------------------------
ESTIMATED INTEREST DISTRIBUTIONS (3)
- ----------------------------------------------
<TABLE>
<CAPTION>
SEMI-
MONTHLY QUARTERLY ANNUAL
<S> <C> <C> <C>
- ----------------------------------------------------
Gross Annual Income per
Unit: $ $ $
Less Annual Expense per
Unit: $ $ $
Net Annual Income per
Unit: $ $ $
First Distribution per
Unit ( , 1997): $ $ $
Partial Distribution per
Unit: $ $ $
(commencing): N/A / /97 / /97
Normal Distributions per
Unit: $ $ $
(commencing): / /97 / /97 / /97
</TABLE>
MATURITY (4)
Mandatory Termination Date:
Average Dollar-Weighted Maturity: years
- ----------------------------------------------
INSURANCE
All of the Bonds in the Trust are insured either by the issuer of the Bonds or
by the Sponsor under a financial guaranty insurance policy obtained from MBIA
Insurance Corporation ("MBIA"). The insurance guarantees the scheduled payment
of principal and interest on all of the Bonds in the Trust. It does not
guarantee the market value of the Bonds or the value of the Units of the Trust.
See "INSURANCE ON THE BONDS" in Part B of this Prospectus for further
information.
- ----------------------------------------------
RATINGS
Bonds in the Trust for which insurance has been obtained by the issuer or the
Sponsor have been rated "AAA" by Standard & Poor's and/or "Aaa" by Moody's. In
addition, the Units of the Trusts have received a rating of "AAA" by Standard &
Poor's. See "RATING OF UNITS" in Part B of this Prospectus for further
information.
- --------------------------------------------------------------------------------
EXPENSE INFORMATION
SALES CHARGES (MAXIMUM) (5)
As a % of Public Offering Price: %
Amount per $1,000 invested $
<PAGE>
- ----------------------------------------------
ESTIMATED ANNUAL OPERATING EXPENSES (6)
- ----------------------------------------------
<TABLE>
<CAPTION>
SEMI-
MONTHLY QUARTERLY ANNUAL
<S> <C> <C> <C>
- ----------------------------------------------------
Trustee's Fee: $ $ $
Sponsor's Evaluation Fee: $ $ $
Organizational Expenses
(per Unit)(7): $ $ $
Total Annual Expenses (per
Unit): $ $ $
</TABLE>
- ----------------------------------------------
ESTIMATED COSTS OVER TIME
The following are the estimated cumulative costs on a $1,000 investment,
assuming monthly distributions, and (as mandated by the Securities and Exchange
Commission) a 5% annual return, and reinvestment of all distributions (which is
not an available reinvestment option in the Trust):
Over 1 Year $
Over 3 Years $
Over 5 Years $
Over 10 Years $
The example reflects both the estimated operating expenses and maximum sales
charge on an increasing investment (had the net annual return been reinvested in
the Trust). The example should not be considered a representation of future
expenses or annual rates of return; the actual expenses and annual rates of
return may be more or less than those used in the example.
- ------------
Notes to Essential Information and Expense Information:
All information provided is as of the day prior to the Initial Date of Deposit
and has been calculated for Unitholders receiving monthly, quarterly or
semi-annual distribution options.
(1) The actual returns an investor will receive will vary due to the maturity,
redemption, exchange or sales of Bonds, changes in fees and expenses,
changes in interest income, the market value of the Bonds on the date an
investor purchases Units and how long Units are held. See "ESTIMATED LONG
TERM RETURN AND ESTIMATED CURRENT RETURN" in Part B of this Prospectus for
information concerning how Estimated Returns are calculated.
(2) The Public Offering Price will vary from that shown above due to changes in
the prices of the underlying Bonds subsequent to the Initial Date of
Deposit. In addition to the Public Offering Price, investors must also pay
accrued interest from the preceding Record Date to, but not including, the
date of settlement (normally three business days after purchase). For Units
purchased on the Initial Date of Deposit, $ of accrued interest will
be added to the Public Offering Price. See "PUBLIC OFFERING PRICE" and
"ACCRUED INTEREST" both in Part B of this Prospectus for further
information.
(3) The Estimated Income figures reflected above are estimates determined as of
the business day prior to the Initial Date of Deposit and actual payments
may vary. It is anticipated that the amount of interest to be distributed
per Unit in each year will initially be substantially equal to the Estimated
Net Annual Interest Income per Unit provided. The amount of interest to be
distributed annually per Unit, will generally change as Bonds are redeemed,
mature or are sold or as fees and expenses increase or decrease. See
"DISTRIBUTIONS TO UNITHOLDERS" in Part B of this Prospectus.
(4) The Mandatory Termination Date coincides with the maturity date of the Bond
in the Trust's portfolio with the longest stated maturity. The Trust may be
terminated prior to the Mandatory Termination Date if such Bond is redeemed
or sold prior to its maturity date or if the principal value of the Trust is
reduced below 20% of the aggregate principal amount of Securities deposited
in the Trust during the primary offering period. See "OTHER INFORMATION --
TERMINATION OF INDENTURE" in Part B of this Prospectus. The Average
Dollar-Weighted Maturity of the Bonds in the Trust is calculated based upon
the stated maturities of the Bonds in the Trust (or, with respect to Bonds
for which funds or securities have been placed in escrow to redeem such
Bonds on a stated call date, based upon such call date). The Average
Dollar-Weighted Maturity may increase or decrease from time to time as Bonds
mature or are called or sold.
(5) The sales charge is reduced for certain purchasers and for single
transactions of at least 500 Units or $50,000 (whichever is more favorable
to the investor). See "Sales Charges" in Part A of this Prospectus and
"PUBLIC OFFERING PRICE" in Part B of this Prospectus.
(6) The Trustees Fee and the Sponsor's Evaluation Fee are per $1,000 principal
amount of the underlying Bonds in the Trust.
(7) The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (but not the expenses incurred in the printing of
preliminary and final prospectuses, nor the expenses incurred in the
preparation and printing of brochures and other advertising materials or any
other selling expenses), as is common for mutual funds. See "TRUST OPERATING
EXPENSES" in Part B of this Prospectus and "Statement of Condition."
3
<PAGE>
- ----------------------------------------------------
TRUST STRATEGIES
- -------------------------------
INVESTMENT OBJECTIVE
The Trust is designed to provide a high level of current income consistent with
preservation of capital provided by an insured portfolio of corporate debt
obligations issued primarily by utility companies. The Trust may also contain
U.S. Treasury Obligations. There is no assurance that the Trust will achieve its
investment objective.
INVESTMENT PHILOSOPHY
The Trust is a non-managed investment vehicle and employs a buy and hold
investment strategy. The Trust plans to hold to maturity a portfolio of
corporate debt obligations.
INVESTOR SUITABILITY
The Trust is a suitable investment for investors seeking to:
- - Earn regular monthly, quarterly or semi-annual income;
- - Obtain greater portfolio diversification than may be possible individually;
- - The Trust is also available to foreign (non-resident) investors who seek
income that is exempt from U.S. withholding, PROVIDED certain conditions are
met.
The Trust is not a suitable investment for individuals seeking to:
- - Pursue an aggressive high-growth investment strategy.
- ----------------------------------------------
HOW THE TRUST SELECTS INVESTMENTS
The Trust consists of a portfolio of insured corporate debt obligations issued
by utility companies which have a dollar-weighted average maturity of years.
In selecting corporate debt obligations (the "Bonds") for deposit in the Trust,
the following factors, among others, were considered by the Sponsor: (a) the
prices and yields of such Bonds relative to other Bonds of similar quality and
maturity, including the extent to which such Bonds are traded at a premium or
discount from par; (b) the present rating and credit quality of the issuers of
the Bonds and the potential improvement in the credit quality of such issuers;
(c) the diversification of the Bonds as to location of issuer; (d) the income to
the Unitholders of the Trust; (e) whether the Bonds were issued after July 18,
1984; and (f) the stated maturities of the Bonds. A description of the Bonds
included in the Trust are set forth in the "Schedule of Investments," below.
- ----------------------------------------------
RISK FACTORS
An investment in Units of the Trusts should be made with an understanding of the
risks which an investment in fixed rate corporate debt obligations may entail.
These include credit risks and the risk that the Bonds and therefore the Units
will decline, and may decline precipitously, with increases in interest rates.
Although in recent years interest rates have been relatively stable, the high
inflation of prior years, together with the fiscal measures adopted to attempt
to deal with it, have resulted in wide fluctuations in interest rates and, thus,
in the value of fixed rate debt obligations generally. The Sponsor cannot
predict future economic policies or their consequences or, therefore, the course
or extent of any similar market fluctuations in the future. General problems of
utility company issuers include the imposition of additional federal, state and
municipal governmental regulations, increasesd costs attributable to
environmental considerations, the difficulty of the capital market in absorbing
utility debt, the difficulty in obtaining fuel at reasonable prices and the
effect of energy conservation. As such, there is no guarantee that the Trust
will achieve its objectives. See "Risk Factors" in Part B of this Prospectus.
Certain of the Bonds included in the Trust may be original issue discount bonds
or "zero coupon" bonds, as noted in the "Schedule of Investments." These Bonds
are subject to greater price fluctuations with changing interest rates and
contain additional risks set forth in "Risk Factors" in Part B of this
Prospectus.
- ----------------------------------------------
DISTRIBUTIONS AND TAXES
- -------------------------------
INTEREST AND PRINCIPAL DISTRIBUTIONS
The Trustee of the Trust (The Chase Manhattan Bank) will collect principal and
interest on the Securities as it comes due and hold such amounts for
distribution to Unitholders. The amount of the Net Annual Income per Unit under
each plan of distribution, as set forth under "Essential Information --
Estimated Interest Distributions" assumes that all of the Securities are
delivered to the Trust. See "COMPOSITION OF TRUSTS" appearing in Part B of this
Prospectus. The amount of each Interest Distribution on a per Unit basis under
each plan of distribution will decrease as the underlying Securities mature or
are sold. Interest income does not include accretion of original issue discount
on "zero coupon" Bonds. See "RISK FACTORS" in Part B of this Prospectus.
Distributions of income will be paid by the Trustee under each plan of
distribution to Unitholders on the respective Distribution Dates to Unitholders
of record
4
<PAGE>
on the applicable Record Dates as set forth under "DISTRIBUTIONS TO UNITHOLDERS"
in Part B of this Prospectus. Distributions of principal will be paid on the
semi-annual Distribution Date to Unitholders of record on the semi-annual Record
Date, provided the amount available for distributions equals at least $0.10 per
Unit.
The amount of interest you will receive on an annual basis will be reduced by
the expenses of the Trust and will generally change as Securities mature or are
sold or as fees and expenses increase or decrease.
- ----------------------------------------------
TAX STATUS
For non-resident aliens, income from the Trust will will be exempt from
withholding for U.S. federal income tax, PROVIDED certain conditions are met.
See "TAX STATUS" in Part B of this Prospectus for further tax information.
- ----------------------------------------------
INVESTING IN THE TRUST
- -------------------------------
SALES CHARGES
The maximum sales charge of 4.90% applies only to purchases of less than 500
Units. Sales charges for larger single transactions during the primary offering
period are as follows:
- ----------------------------------------------
PRIMARY MARKET SALES CHARGE
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
OFFERING NET AMOUNT
NUMBER OF UNITS* PRICE INVESTED
- ------------------------------------- ------------- -----------
<S> <C> <C>
Less than 500........................ 4.90% 5.152%
500 but less than 1,000.............. 4.75 4.884
1,000 but less than 2,500............ 4.50 4.712
2,500 but less than 5,000............ 4.25 4.439
5,000 but less than 10,000........... 3.50 3.627
10,000 but less than 25,000.......... 3.00 3.092
25,000 but less than 50,000.......... 2.50 2.564
50,000 or more....................... 2.00 2.041
Wrap Accounts........................ 1.70 1.729
</TABLE>
*Breakpoint sales charges are computed both on a dollar basis and on the basis
of the number of Units purchased, using the equivalent of 500 Units to $50,000,
2,500 Units to $250,000 etc., and will be applied on that basis which is more
favorable to the purchaser.
The sales charge assessed on Units sold in secondary market transactions is
determined in accordance with the table set forth below based upon the dollar
amount purchased and the Weighted Average Maturity of the Trust:
- ----------------------------------------------
SECONDARY MARKET SALES CHARGE
<TABLE>
<CAPTION>
WEIGHTED AVERAGE MATURITY
--------------------------------------------------
LESS THAN 4 15 OR MORE
PURCHASE PRICE* YEARS 4-8 YEARS 8-15 YEARS YEARS
- --------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Less than $50,000..........
$50,000 but less than
$100,000...................
$100,000 but less than
$250,000...................
$250,000 but less than
$500,000...................
$500,000 but less than
$1,000,000.................
$1,000,000 but less than
$2,500,000.................
$2,500,000 but less than
$5,000,000.................
$5,000,000 or more.........
</TABLE>
- ----------------------------------------------------
DEALER CONCESSIONS
The Sponsor plans to allow a discount to brokers and dealers in connection with
the primary distribution of Units and also in secondary market transactions. The
primary market discounts, based on number of Units sold, are as follows:
- ----------------------------------------------
PRIMARY MARKET DEALER CONCESSIONS
<TABLE>
<CAPTION>
DISCOUNT PER
NUMBER OF UNITS* UNIT
- ------------------------------------------------ -------------
<S> <C>
Less than 500................................... $
500 but less than 1,000.........................
1,000 but less than 2,500.......................
2,500 but less than 5,000.......................
5,000 but less than 10,000......................
10,000 but less than 25,000.....................
25,000 but less than 50,000.....................
50,000 or more..................................
</TABLE>
Dealer concessions on secondary market purchases of Trust Units through the
Sponsor, based on the weighted average maturity of the Trust are as follows:
- ----------------------------------------------
SECONDARY MARKET DEALER CONCESSIONS
<TABLE>
<CAPTION>
DISCOUNT PER UNIT
--------------------------------------------------
WEIGHTED AVERAGE MATURITY
--------------------------------------------------
LESS THAN 4 15 OR MORE
PURCHASE PRICE* YEARS 4-8 YEARS 8-15 YEARS YEARS
- ----------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Less than $50,000...... $ $
$50,000 but less than
$100,000...............
$100,000 but less than
$250,000...............
$250,000 but less than
$500,000...............
$500,000 but less than
$1,000,000.............
$1,000,000 but less
than $2,500,000........
$2,500,000 but less
than $5,000,000........
$5,000,000 or more.....
</TABLE>
5
<PAGE>
- ----------------------------------------------------
GENERAL INFORMATION
- -------------------------------
OPTIONAL FEATURES
REDEMPTIONS
Units may be redeemed on any business day at no charge. Units are redeemed at
their current market value. See "REDEMPTION" in Part B of this Prospectus.
LETTER OF INTENT (LOI)
Investors may use a Letter of Intent to get reduced sales charges on purchases
made over a 13-month period (and to take advantage of dollar cost averaging).
The minimum LOI investment is $50,000. See "PUBLIC OFFERING PRICE" in Part B of
this Prospectus.
REINVESTMENT
Interest income and returned principal can be reinvested with no sales charge
into Nuveen tax-free mutual or money market funds. See "ACCUMULATION PLAN" in
Part B of this Prospectus. For more information obtain a prospectus from your
financial advisor.
- ----------------------------------------------
THE SPONSOR
Since our founding in 1898, John Nuveen & Co. Incorporated has been synonymous
with investments that withstand the test of time. Today, we offer a range of
equity and fixed-income unit trusts designed to suit the unique circumstances
and financial planning needs of mature investors. More than 1.3 million
investors have entrusted Nuveen to help them maintain the life-style they
currently enjoy.
The prospectus describes in detail the investment objectives, policies and risks
of this unit trust. We invite you to discuss the contents with your financial
adviser, or you may call us at 800-621-7227 for additional information.
- --------------------------------------------------------------------------------
NUVEEN INSURED CORPORATE TRUST, SERIES 1 (LONG-TERM)
(Nuveen Unit Trust, Series 1)
Schedule of Investments at the Date of Deposit, , 1997
<TABLE>
<CAPTION>
RATING(2)
---------------------
AGGREGATE STANDARD & REDEMPTION
PRINCIPAL NAME OF ISSUER (1)(6) COUPON MATURITY POOR'S MOODY'S PROVISIONS(3)
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
$
- ----------
$
- ----------
- ----------
<CAPTION>
AGGREGATE COST OF BONDS
PRINCIPAL TO TRUST(4)
<S> <C>
- -------------------------------------------
$ $
- ---------- ---------------
$ $
- ---------- ---------------
- ---------- ---------------
</TABLE>
- ---------------
(1) The Sponsor's contracts to purchase the Bonds were entered into on
, 1997. All Bonds are represented by regular way contracts,
unless otherwise indicated, for the performance of which an irrevocable
letter of credit has been deposited with the Trustee.
(2) A brief description of the applicable Standard & Poor's and Moody's rating
symbols and their meanings is set forth under "DESCRIPTION OF RATINGS" in
Part B of this Prospectus. "N.R." indicates that the issue has not been
rated by that rating agency.
(3) Under this heading, the year in which each issue of Bonds is initially or
currently redeemable and the redemption price for that year is shown.
Unless otherwise indicated, each issue continues to be redeemable at
declining prices thereafter, but not at a price below par value. The prices
at which the Bonds may be redeemed or called prior to maturity may or may
not include a premium and, in certain cases, may be less than the cost of
the Bonds to the Trust. In addition, certain Bonds in the portfolio may be
redeemed in whole or in part other than by operation of the stated
redemption provisions under certain unusual or extraordinary circumstances
specified in the instruments setting forth the terms and provisions of such
Bonds.
(4) During the Initial Offering Period, evaluations of Bonds are made on the
basis of current offering side evaluations of the Bonds.
(5) This Bond has been purchased at a deep discount from the par value because
there is no stated interest income thereon. Bonds which pay no interest are
normally described as "zero coupon" bonds. Over the life of Bonds purchased
at a deep discount the value of such Bonds will increase such that upon
maturity the holders of such securities will receive 100% of the principal
amount thereof.
(6) Other information regarding the Bonds in the Trust on the Initial Date of
Deposit is as follows:
<TABLE>
<CAPTION>
ANNUAL
PROFIT INTEREST BID PRICE
COST TO (OR LOSS) INCOME TO OF
TRUST SPONSOR TO SPONSOR TRUST BONDS
- ------------------------------------------------------------------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Nuveen Insured Corporate Trust, Series 1 (Long-Term)...............
</TABLE>
In addition, the difference between the Trustee's determination of Offering
Price and Bid Price (as a percentage of principal amount) is % for
the Trust.
6
<PAGE>
- --------------------------------------------------------------------------------
NUVEEN INSURED CORPORATE TRUST, SERIES 1 (LONG-TERM)
(Nuveen Unit Trust, Series 1)
Statement of Condition at the Date of Deposit, , 1997
<TABLE>
<S> <C>
TRUST PROPERTY
Sponsor's contracts to purchase Bonds, backed by an irrevocable letter of
credit(1)(2)................................................................
Accrued interest to , 1997 on underlying Bonds(1).......................
Organizational costs(3).......................................................
----------
Total............................................................
----------
----------
LIABILITIES AND INTEREST OF UNITHOLDERS
LIABILITIES:
Accrued interest to , 1997 on underlying Bonds(4)...................
Accrued organizational costs(3)...........................................
----------
Total............................................................
----------
----------
INTEREST OF UNITHOLDERS:
Units of fractional undivided interest outstanding........................
Cost to investors(5)......................................................
Less: Gross underwriting commission(6)................................
----------
Net amount applicable to investors........................................
----------
Total............................................................
----------
----------
</TABLE>
- ----------
(1) Represented by contracts to purchase Bonds which include "when issued" or
"regular way" or "delayed delivery" contracts for which an irrevocable
letter of credit issued by a major commercial bank has been deposited with
the Trustee on the Initial Date of Deposit. The amount of such letter of
credit and any cash deposited exceeds the amount necessary for the purchase
of the Bonds plus accrued interest to the Initial Date of Deposit. At the
Initial Date of Deposit, Securities may have been delivered to the Sponsor
pursuant to certain of these contracts; the Sponsor has assigned to the
Trustee all of its rights, title and interest in and to such Bonds.
(2) Aggregate value (at offering prices) as of the Initial Date of Deposit of
the Bonds listed under "SCHEDULE OF INVESTMENTS" herein, and their aggregate
cost to the Trust is the same. Such offering prices were determined by Kenny
S&P Evaluation Services, a division of J.J. Kenny Co., Inc., as of the close
of business on the business day prior to the Initial Date of Deposit. (See
"EVALUATION OF SECURITIES AT THE INITIAL DATE OF DEPOSIT" in Part B of this
Prospectus.)
(3) Each Trust (and therefore Unitholders) will bear all or a portion of its
estimated organizational costs which will be deferred and amortized over the
life of the respective Trust.
(4) Representing, as set forth in "ACCRUED INTEREST" in Part B of this
Prospectus, advancement by the Trustee of an amount equal to the accrued
Bonds' interest as of the Initial Date of Deposit.
(5) Aggregate Public Offering Price (exclusive of accrued interest) computed as
set forth under "PUBLIC OFFERING PRICE" in Part B of this Prospectus.
(6) The gross underwriting commission of 4.9% of the Public Offering Price has
been calculated on the assumption that the Units sold are not subject to a
reduction of sales charge for quantity purchases. In single transactions
involving 500 Units or more, the sales charge is reduced. (See "PUBLIC
OFFERING PRICE" in Part B of this Prospectus.)
7
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS OF JOHN NUVEEN & CO. INCORPORATED AND UNITHOLDERS OF
NUVEEN UNIT TRUST, SERIES 1:
We have audited the accompanying statement of condition and the schedule of
investments at date of deposit (included in Part A of this Prospectus) of Nuveen
Unit Trust, Series 1 (Nuveen Insured Corporate Trust, Series 1 (Long-Term)), as
of , 1997. These financial statements are the responsibility of the
Sponsor. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of the irrevocable letter of credit arrangement for the purchase of
securities, described in Note (1) to the statement of condition, by
correspondence with the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Sponsor, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the statement of condition and the schedule of investments at
date of deposit referred to above present fairly, in all material respects, the
financial position of Nuveen Unit Trust, Series 1 (Nuveen Insured Corporate
Trust, Series 1 (Long-Term)) as of , 1997, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
, 1997.
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NUVEEN UNIT TRUSTS
FIXED INCOME TRUST PROSPECTUS--PART B
, 1997
This Part B of the Prospectus may not be distributed unless accompanied by
Part A. Both Parts of this Prospectus should be retained for future reference.
FURTHER DETAIL REGARDING CERTAIN OF THE INFORMATION PROVIDED IN THE
PROSPECTUS MAY BE OBTAINED WITHIN FIVE BUSINESS DAYS OF WRITTEN OR TELEPHONIC
REQUEST TO THE TRUSTEE AT 4 NEW YORK PLAZA, NEW YORK, NY 10004-2413 OR (800)
257-8787.
CURRENTLY OFFERED AT PUBLIC OFFERING PRICE PLUS INTEREST ACCRUED TO THE DATE
OF SETTLEMENT. MINIMUM PURCHASE -- EITHER $5,000 OR 50 UNITS, WHICHEVER IS LESS.
THIS NUVEEN UNIT TRUST SERIES consists of the underlying separate unit
investment trusts set forth in Part A of this Prospectus. Each trust initially
consists of delivery statements relating to contracts to purchase securities
and, thereafter, will consist of a portfolio of securities (see "SCHEDULE OF
INVESTMENTS" appearing in Part A of this Prospectus). Except in specific
instances as noted in Part A of this Prospectus, the information contained in
this Part B shall apply to the Trust in its entirety.
Trusts consisting of a portfolio of U.S Treasury obligations ("U.S. TREASURY
OBLIGATIONS") shall be referred to herein as "U.S. Treasury Trusts." Trusts
consisting of a portfolio of investment grade, corporate debt obligations issued
after July 18, 1984 ("CORPORATE BONDS") shall be referred to herein as
"Corporate Trusts." Collectively, the U.S. Treasury Trusts and the Corporate
Trusts shall be referred to herein as the "TRUSTS" and the U.S. Treasury
Obligations and the Corporate Bonds shall be referred to herein as the
"SECURITIES."
THE OBJECTIVES of the U.S. Treasury Trusts are to provide current interest
income consistent with preservation of capital which is exempt from state and
local income taxes and provide a flexible investment. The objectives of the
Corporate Trusts are to provide a high level of current income consistent with
preservation of capital through an investment in a portfolio of investment
grade, corporate debt obligations issued after July 18, 1984.
DISTRIBUTIONS of interest received by a Trust will be made monthly,
quarterly or semi-annually, depending upon the Unitholder's selection. (See
"DISTRIBUTIONS TO UNITHOLDERS.") Distribution of funds in the Principal Account,
if any, will ordinarily be made as set forth under "DISTRIBUTIONS TO
UNITHOLDERS."
FOR ESTIMATED LONG TERM RETURNS AND ESTIMATED CURRENT RETURNS to Unitholders
on the business day prior to the Initial Date of Deposit, see Part A of this
Prospectus and "ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN."
THE PUBLIC OFFERING PRICE per Unit of each Trust during the initial offering
period is equal to a pro rata share of the OFFERING prices of the Securities in
such Trust's portfolio plus a sales charge as set forth in Part A of this
Prospectus. The Secondary Market Public Offering Price per Unit for each Trust
will be equal to a pro rata share of the sum of BID prices of the Securities in
such Trust plus the sales charges as set forth in Part A of this Prospectus.
Accrued interest from the preceding Record Date to, but not including, the
settlement date (normally three business days after purchase) is added to the
Public Offering Price. The sales charge is reduced on a graduated scale for
sales involving at least the number of Units set forth in Part A of this
Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
A UNITHOLDER MAY REDEEM UNITS at the office of the Trustee at prices based
upon the BID prices of the Securities. The price received upon redemption may be
more or less than the amount paid by Unitholders, depending upon the value of
the Securities on the date of tender for redemption. (See "REDEMPTION.") The
Sponsor, although not required to do so, intends to make a secondary market for
the Units of the Trusts at prices based upon the BID prices of the Securities in
the respective Trusts. (See "MARKET FOR UNITS.")
RISK FACTORS. An investment in a Trust should be made with an understanding
of the risks associated therewith, including, among other factors, the inability
of the issuer or an insurer (in the case of insured Corporate Bonds) to pay the
principal of or interest on a security when due, the general condition of the
relevant market, economic recession, volatile interest rates, early call
provisions and changes to the tax status of the Bonds. The value of the
underlying Securities will fluctuate inversely with changes in interest rates.
Although in recent years interest rates have been relatively stable, the
uncertain economic conditions of prior years, together with the monetary
policies and fiscal measures adopted to attempt to deal with them, resulted in
wide fluctuations of interest rates and, thus, in the value of fixed rate debt
obligations. The Sponsor cannot predict the degree to which such fluctuations
will continue in the future. See Part A of this Prospectus and "RISK FACTORS."
2
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TABLE OF CONTENTS
<TABLE>
<S> <C>
NUVEEN UNIT TRUSTS..................................................................... 4
OBJECTIVE OF THE TRUSTS................................................................ 5
SUMMARY OF PORTFOLIOS.................................................................. 5
RISK FACTORS........................................................................... 5
COMPOSITION OF TRUSTS.................................................................. 8
INSURANCE ON THE CORPORATE BONDS....................................................... 10
PUBLIC OFFERING PRICE.................................................................. 11
MARKET FOR UNITS....................................................................... 13
ACCRUED INTEREST....................................................................... 13
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN................................ 14
EVALUATION OF SECURITIES AT THE INITIAL DATE OF DEPOSIT................................ 15
TAX STATUS............................................................................. 15
TRUST OPERATING EXPENSES............................................................... 19
DISTRIBUTIONS TO UNITHOLDERS........................................................... 19
ACCUMULATION PLAN...................................................................... 21
REPORTS TO UNITHOLDERS................................................................. 21
UNIT VALUE AND EVALUATION.............................................................. 22
DISTRIBUTIONS OF UNITS TO THE PUBLIC................................................... 22
OWNERSHIP AND TRANSFER OF UNITS........................................................ 23
REDEMPTION............................................................................. 24
PURCHASE OF UNITS BY THE SPONSOR....................................................... 25
REMOVAL OF SECURITIES FROM THE TRUSTS.................................................. 25
INFORMATION ABOUT THE TRUSTEE.......................................................... 26
INFORMATION ABOUT THE SPONSOR.......................................................... 27
OTHER INFORMATION...................................................................... 27
</TABLE>
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NUVEEN UNIT TRUSTS
This Nuveen Unit Trust is one of a series of separate but similar investment
companies created by the Sponsor, each of which is designated by a different
Series number. The underlying unit investment trusts contained in this Series
are combined under one Trust Indenture and Agreement. Specific information
regarding each Trust is set forth in Part A of this Prospectus. The various
Nuveen Unit Trusts are collectively referred to herein as the "TRUSTS." This
Series was created under the laws of the State of New York pursuant to a Trust
Indenture and Agreement dated the Initial Date of Deposit (the "INDENTURE")
between John Nuveen & Co. Incorporated ("NUVEEN" or the "SPONSOR") and The Chase
Manhattan Bank (the "TRUSTEE").
The Sponsor has deposited with the Trustee delivery statements relating to
contracts for the purchase of the Securities together with funds represented by
an irrevocable letter of credit issued by a major commercial bank in the amount,
including accrued interest, required for their purchase (or the obligations
themselves). See "SCHEDULE OF INVESTMENTS" in Part A of this Prospectus, for a
description of the Securities deposited in a Trust. See "SUMMARY OF PORTFOLIO"
and "RISK FACTORS" for a discussion of zero coupon bonds and stripped
obligations included in the Trusts, if any. Some of the delivery statements may
relate to contracts for the purchase of "when issued" or other Securities with
delivery dates after the date of settlement for a purchase made on the Initial
Date of Deposit. See the "SCHEDULE OF INVESTMENTS" in Part A of this Prospectus
and "COMPOSITION OF TRUSTS." For a discussion of the Sponsor's obligations in
the event of a failure of any contract for the purchase of any of the Bonds and
its limited right to substitute other bonds to replace any failed contract, see
"COMPOSITION OF TRUSTS."
The Trustee has delivered to the Sponsor registered Units which represent
ownership of the entire Trust, and which are offered for sale by this
Prospectus. Each Unit of a Trust represents a fractional undivided interest in
the principal and net income of such Trust in the ratio set forth in "ESSENTIAL
INFORMATION" in Part A of this Prospectus. Units may only be sold in states in
which they are registered. To the extent that any Units of any Trust are
redeemed by the Trustee, the aggregate value of the Trust's assets will decrease
by the amount paid to the redeeming Unitholder, but the fractional undivided
interest of each unredeemed Unit in such Trust will increase proportionately.
The Sponsor will initially, and from time to time thereafter, hold Units in
connection with their offering.
Additional Units of each Trust may be issued from time to time following the
Initial Date of Deposit by depositing in such Trust additional Securities or
contracts for the purchase thereof together with irrevocable letters of credit
or cash. As additional Units are issued by a Trust as a result of the deposit of
additional Securities by the Sponsor, the aggregate value of the Securities in a
Trust will be increased and the fractional undivided interest in such Trust
represented by each Unit will be decreased. The Sponsor may continue to make
additional deposits of Securities into such Trust following the Initial Date of
Deposit, provided that such additional deposits will be in principal amounts
which will maintain the same original percentage relationship among the
principal amounts of the Securities in such Trust established on the Initial
Date of Deposit. Thus, although additional Units will be issued, each Unit will
continue to represent the same principal amount of each Security, and the
percentage relationship among the principal amount of each Security in the
respective Trust will remain the same. To the extent that any Units are redeemed
by the Trustee or additional Units are issued as a result of additional
Securities being deposited by the Sponsor, the fractional undivided interest in
a Trust represented by each unredeemed Unit will increase or decrease
accordingly, although the actual interest in such Trust represented by such
fraction will remain unchanged. Units will remain outstanding until redeemed
upon tender to the Trustee by Unitholders, which may include the Sponsor, or
until termination of the Trust Agreement.
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<PAGE>
OBJECTIVE OF THE TRUSTS
U.S. TREASURY TRUSTS. The objectives of the U.S. Treasury Trusts are to
provide current income consistent with preservation of capital which is exempt
from state and local income taxes and provide a flexible investment. The U.S.
Treasury Trusts seek to achieve this objective through investment in a portfolio
of U.S. Treasury Obligations with differing maturities which are backed by the
full faith and credit of the United States Government. Interest income
distributed by each U.S. Treasury Trust is exempt from state and local personal
income taxes in all states.
CORPORATE TRUSTS. The objectives of the Corporate Trusts are to provide a
high level of current income consistent with preservation of capital through an
investment in a portfolio of investment grade, corporate debt obligations issued
after July 18, 1984. The Corporate Trusts may be an appropriate investment
vehicle for investors who wish to participate in a portfolio of taxable fixed
income obligations issued by corporate obligors with greater diversification
than investors might be able to acquire individually. Corporate Bonds of the
type deposited in the Corporate Trusts often are not available in small amounts.
Diversification of the Corporate Trusts' assets will not eliminate the risk of
loss always inherent in the ownership of corporate debt obligations.
Units of both the U.S. Treasury Trusts and the Corporate Trusts are
available to non-resident aliens and the income from the Trusts, provided
certain conditions are met, will be exempt from withholding for such foreign
investors. There is, of course, no guarantee that the Trusts' objectives will be
achieved.
SUMMARY OF PORTFOLIOS
In selecting U.S. Treasury Obligations for deposit in the U.S. Treasury
Trusts the following factors, among others, were considered by the Sponsor: (a)
the types of such obligations available; (b) the prices and yields of such
obligations relative to other comparable obligations, including the extent to
which such obligations are traded at a premium or at a discount from par; and
(c) the maturities of such obligations.
In selecting Corporate Bonds for deposit in the Corporate Trusts, the
following factors, among others, were considered by the Sponsor: (a) the prices
and yields of such Corporate Bonds relative to other Corporate Bonds of similar
quality and maturity, including the extent to which such Corporate Bonds are
traded at a premium or discount from par; (b) the present rating and credit
quality of the issuers of the Corporate Bonds and the potential improvement in
the credit quality of such issuers; (c) the diversification of the Corporate
Bonds as to location of issuer; (d) the income to the Unitholders of the
Corporate Trusts; (e) whether the Corporate Bonds were issued after July 18,
1984; and (f) the stated maturities of the Corporate Bonds.
RISK FACTORS
U.S. TREASURY OBLIGATIONS. U.S. Treasury are direct obligations of the
United States and are backed by its full faith and credit although the Units are
not so backed. The U.S. Treasury Obligations are not rated but in the opinion of
the Sponsor have credit characteristics comparable to those of securities rated
"AAA" by nationally recognized rating agencies.
An investment in Units of a Trust which contains U.S. Treasury Obligations
should be made with an understanding of the risks which an investment in fixed
rate debt obligations may entail, including the risk that the value of the U.S.
Treasury Obligations and hence the Units will decline with increases in interest
rates. The high inflation of prior years, together with the fiscal measures
adopted to attempt to deal with it, have resulted in wide fluctuations in
interest rates and, thus, in the value of fixed rate debt obligations generally.
The Sponsor cannot predict whether such fluctuations will continue in the
future.
CORPORATE DEBT OBLIGATIONS. An investment in Units of a Corporate Trust
should be made with an understanding of the risks that an investment in fixed
rate, investment grade corporate debt obligations
5
<PAGE>
may entail, including the risk that the value of the Units will decline with
increases in interest rates. In recent years there have been wide fluctuations
in interest rates and thus in the value of fixed rate, debt obligations
generally. Generally, bonds with longer maturities will fluctuate in value more
than bonds with shorter maturities. A slowdown in the economy, or a development
adversely affecting an issuer's creditworthiness, may result in the issuer being
unable to maintain earnings or sell assets at the rate and at the prices,
respectively, that are required to produce sufficient cash flow to meet its
interest and principal requirements. The Corporate Trusts consist of Corporate
Bonds that, in many cases, do not have the benefit of covenants that would
prevent the issuer from engaging in capital restructurings or borrowing
transactions in connection with corporate acquisitions, leveraged buyouts or
restructurings that could have the effect of reducing the ability of the issuer
to meet its obligations and might result in the ratings of the Corporate Bonds
and the value of the underlying portfolio being reduced.
Should the issuer of any Corporate Bond default in the payment of principal
or interest, the Corporate Trust may incur additional expenses seeking payment
on the defaulted Bond. Because amounts (if any) recovered by a Corporate Trust
in payment under the defaulted Corporate Bond may not be reflected in the value
of the Units until actually received by such Corporate Trust, and depending upon
when a Unitholder purchases or sell his or her Units, it is possible that a
Unitholder would bear a portion of the cost of recovery without receiving any
portion of the payment recovered.
PUBLIC UTILITY ISSUES. Certain of the Corporate Bonds in a Corporate Trust
may be obligations of public utility issuers. In general, public utilities are
regulated monopolies engaged in the business of supplying light, water, power,
heat, transportation or means of communication. Historically, the utilities
industry has provided investors in securities issued by companies in this
industry with high levels of reliability, stability and relative total return on
their investments. However, an investment in a Corporate Trust which contains
obligations of public utility issuers should be made with an understanding of
the characteristics of such issuers and the risks which such an investment may
entail. General problems of such issuers would include the difficulty in
financing large construction programs in an inflationary period, the limitations
on operations and increased costs and delays attributable to environmental
considerations, the difficulty of the capital market in absorbing utility debt,
the difficulty in obtaining fuel at reasonable prices and the effect of energy
conservation. All of such issuers have been experiencing certain of these
problems in varying degrees. In addition, federal, state and municipal
governmental authorities may from time to time review existing, and impose
additional, regulations governing the licensing, construction and operation of
nuclear power plants, which may adversely affect the ability of the issuers of
certain of such Corporate Bonds in certain Corporate Trusts to make payments of
principal and/or interest on such Corporate Bonds.
Utilities are generally subject to extensive regulation by state utility
commissions which, for example, establish the rates which may be charged and the
appropriate rate of return on an approved asset base, which must be approved by
the state commissions. Certain utilities have had difficulty from time to time
in persuading regulators, who are subject to political pressures, to grant rate
increases necessary to maintain an adequate return on investment and voters in
many states have the ability to impose limits on rate adjustments (for example,
by initiative or referendum). Any unexpected limitations could negatively affect
the profitability of utilities whose budgets are planned far in advance. Also,
changes in certain accounting standards currently under consideration by the
Financial Accounting Standards Board could cause significant write-downs of
assets and reductions in earnings for many investor-owned utilities. In
addition, gas pipeline and distribution companies have had difficulties in
adjusting to short and surplus energy supplies, enforcing or being required to
comply with long-term contracts and avoiding litigation from their customers, on
the one hand, or suppliers, on the other.
Certain of the issuers of the Corporate Bonds in a Corporate Trust may own
or operate nuclear generating facilities. Governmental authorities may from time
to time review existing, and impose additional, requirements governing the
licensing, construction and operation of nuclear power plants. Nuclear
generating projects in the electric utility industry have experienced
substantial cost increases,
6
<PAGE>
construction delays and licensing difficulties. These have been caused by
various factors, including inflation, high financing costs, required design
changes and rework, allegedly faulty construction, objections by groups and
governmental officials, limits on the ability to finance, reduced forecasts of
energy requirements and economic conditions. This experience indicates that the
risk of significant cost increases, delays and licensing difficulties remains
present through completion and achievement of commercial operation of any
nuclear project. Also, nuclear generating units in service have experienced
unplanned outages or extensions of scheduled outages due to equipment problems
or new regulatory requirements sometimes followed by a significant delay in
obtaining regulatory approval to return to service. A major accident at a
nuclear plant anywhere, such as the accident at a plant in Chernobyl, U.S.S.R.,
could cause the imposition of limits or prohibitions on the operation,
construction or licensing of nuclear units in the United States.
In view of the uncertainties discussed above, there can be no assurance that
any bond issuer's share of the full cost of nuclear units under construction
ultimately will be recovered in rates or of the extent to which a bond issuer
could earn an adequate return on its investment in such units. The likelihood of
a significantly adverse event occurring in any of the areas of concern described
above varies, as does the potential severity of any adverse impact. It should be
recognized, however, that one or more of such adverse events could occur and
individually or collectively could have a material adverse impact on the
financial condition or the results of operations or on a bond issuer's ability
to make interest and principal payments on its outstanding debt.
Other general problems of the gas, water, telephone and electric utility
industry (including state and local joint action power agencies) include
difficulty in obtaining timely and adequate rate increases, difficulty in
financing large construction programs to provide new or replacement facilities
during an inflationary period, rising costs of rail transportation to transport
fossil fuels, the uncertainty of transmission service costs for both interstate
and intrastate transactions, changes in tax laws which adversely affect a
utility's ability to operate profitably, increased competition in service costs,
reductions in estimates of future demand for electricity and gas in certain
areas of the country, restrictions on operations and increased cost and delays
attributable to environmental considerations, uncertain availability and
increased cost of capital, unavailability of fuel for electric generation at
reasonable prices, including the steady rise in fuel costs and the costs
associated with conversion to alternate fuel sources such as coal, availability
and cost of natural gas for resale, technical and cost factors and other
problems associated with construction, licensing, regulation and operation of
nuclear facilities for electric generation, including among other considerations
the problems associated with the use of radioactive materials and the disposal
of radioactive wastes, and the effects of energy conservation. Each of the
problems referred to could adversely affect the ability of the issuer of any
utility bonds in a Corporate Trust to make payments due on these Corporate
Bonds.
In addition, the ability of state and local joint action power agencies to
make payments on bonds they have issued is dependent in large part on payments
made to them pursuant to power supply or similar agreements.
Courts in Washington and Idaho have held that certain agreements between
Washington Public Power Supply System ("WPPSS") and the WPPSS participants are
unenforceable because the participants did not have the authority to enter into
the agreements. While these decisions are not specifically applicable to
agreements entered into by public entities in other states, they may cause a
reexamination of the legal structure and economic viability of certain projects
financed by joint action power agencies, which might exacerbate some of the
problems referred to above and possibly lead to legal proceedings questioning
the enforceability of agreements upon which payment of these bonds may depend.
Business conditions of the telephone industry in general may affect the
performance of a Trust. General problems of telephone companies include
regulation of rates for service by the FCC and various state or other regulatory
agencies. However, over the last several years regulation has been changing,
7
<PAGE>
resulting in increased competition. The new approach is more market oriented,
more flexible and more complicated. For example, Federal and certain state
regulators have instituted "price cap" regulation which couples protection of
rate payers for basic services with flexible pricing for ancillary services.
These new approaches to regulation could lead to greater risks as well as
greater rewards for operating telephone companies such as those in the Trusts.
Inflation has substantially increased the operating expenses and cost of plant
required for growth, service, improvement and replacement of existing plant.
Continuing cost increases, to the extent not offset by improved productivity and
revenues from increased business, would result in a decrease in rate of return
and a continuing need for rate increases. Although allowances are generally made
in rate making proceedings for cost increases, delays may be experienced in
obtaining the necessary rate increases and there can be no assurance that the
regulatory agencies will grant rate increases adequate to cover operating and
other expenses and debt service requirements. To meet increasing competition,
telephone companies will have to commit substantial capital, technological and
marketing resources. Telephone usage, and therefore revenues, could also be
adversely affected by any sustained economic recession. New technology, such as
cellular service and fiber optics, will require additional capital outlays. The
uncertain outcomes of future labor agreements may also have a negative impact on
the telephone companies. Each of these problems could adversely affect the
ability of the telephone company issuers of any Corporate Bonds in a Corporate
Trust to make payments of principal and interest on their Corporate Bonds.
GENERAL. Certain of the Securities may have been deposited at a market
discount or premium principally because their interest rates are lower or higher
than prevailing rates on comparable securities. The current returns of market
discount securities are lower than comparably rated securities selling at par
because discount securities tend to increase in market value as they approach
maturity. The current returns of market premium securities are higher than
comparably rated securities selling at par because premium securities tend to
decrease in market value as they approach maturity. Because part of the purchase
price is returned through current income payments and not at maturity, an early
redemption at par of a premium security will result in a reduction in yield to a
Trust. Market premium or discount attributable to interest rate changes does not
indicate market confidence or lack of confidence in the issue.
COMPOSITION OF TRUSTS
Each Trust initially consists of delivery statements relating to contracts
to purchase Securities (or of such Securities) as are listed under "SCHEDULE OF
INVESTMENTS" in Part A of this Prospectus and, thereafter, of such Securities as
may continue to be held from time to time (including certain Securities
deposited in a Trust to create additional Units, in substitution for Securities
not delivered to a Trust or in exchange or substitution for Securities upon
certain refundings), together with accrued and undistributed interest thereon
and undistributed cash realized from the disposition of Securities.
"WHEN-ISSUED" AND "DELAYED DELIVERY" TRANSACTIONS. The contracts to
purchase Securities delivered to the Trustee represent an obligation by issuers
or dealers to deliver Securities to the Sponsor for deposit in the Trusts.
Certain of the contracts relate to Securities which have not been issued as of
the Initial Date of Deposit and which are commonly referred to as "when issued"
or "when, as and if issued" Securities. Although the Sponsor believes it
unlikely, if such Securities, or replacement Securities described below, are not
acquired by a Trust or if their delivery is delayed, the Estimated Current
Returns and Estimated Long Term Returns shown in Part A of this Prospectus may
be reduced. Certain of the contracts for the purchase of Securities provide for
delivery dates after the date of settlement for purchases made on the Initial
Date of Deposit. Interest on such "when issued" and "delayed delivery"
Securities accrues to the benefit of Unitholders commencing with the first
settlement date for the Units. However, in the opinion of counsel, Unitholders
who purchase their Units prior to the date such Securities are actually
delivered to the Trustee must reduce the tax basis of their Units for interest
accruing on such Securities during the interval between their purchase of Units
and the delivery of the Securities because such amounts constitute a return of
principal. As a result of such adjustment, the Estimated Current Returns set
forth in Part A of this
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Prospectus (which are based on the Public Offering Price as of the business day
prior to the Initial Date of Deposit) may be slightly lower than that which
Unitholders will receive after the first year, assuming the Portfolio does not
change and estimated annual expense does not vary from that set forth under
"ESSENTIAL INFORMATION" in Part A of this Prospectus. Those Securities in each
Trust purchased with delivery dates after the date of settlement for purchases
made on the Initial Date of Deposit are so noted in the "SCHEDULE OF
INVESTMENTS" in Part A of this Prospectus.
LIMITED REPLACEMENT OF CERTAIN SECURITIES. Neither the Sponsor nor the
Trustee shall be liable in any way for any default, failure or defect in any
Security. In the event of a failure to deliver any Security that has been
purchased for a Trust under a contract, including those Securities purchased on
a when, as and if issued basis ("FAILED SECURITIES"), the Sponsor is authorized
under the Indenture to direct the Trustee to acquire other specified securities
("REPLACEMENT SECURITIES") to make up the original corpus of the Trust within 20
days after delivery of notice of the failed contract and the cost to the Trust
(exclusive of accrued interest) may not exceed the amount of funds reserved for
the purchase of the Failed Securities. The Replacement Securities must satisfy
the criteria previously described for the Trusts and shall be substantially
identical to the Failed Securities they replace. For U.S. Treasury Trusts, the
Replacement Securities must be substantially identical to the Failed Securities
they replace. For U.S. Treasury Trusts, the Replacement Securities must be
substantially identical to the Failed Securities they replace in terms of (i)
the exemption from state and local taxation; (ii) maturity; and (iii) cost to
the U.S. Treasury Trust. For Corporate Trusts, the Replacement Securities (i)
must be payable in United States currency, (ii) must be purchased at a price
that results in a yield to maturity and a current return at least equal to that
of the Failed Securities as of the Initial Date of Deposit, (iii) must satisfy
any rating criteria for Securities originally included in the Corporate Trust,
(iv) must be insured prior to acquisition by the Corporate Trust, (v) must be
corporate bonds, debentures, notes or other straight debt obligations (whether
secured or unsecured and whether senior or subordinated) without equity or other
conversion features, with fixed maturity dates substantially the same as those
or the Failed Securities having no warrants or subscription privileges attached
and (vi) be issued after July 18, 1984. In addition, for any Trust, Replacement
Securities shall not be "when, as and if issued" Securities. Whenever a
Replacement Security has been acquired for a Trust, the Trustee shall, within
five days after the delivery thereof, mail or deliver a notice of such
acquisition to all Unitholders of the Trust involved. Once the original corpus
of the Trust is acquired, the Trustee will have no power to vary the investment
of the Trust.
To the extent Replacement Securities are not acquired, the Sponsor shall
refund to all Unitholders of the Trust involved the sales charge attributable to
such Failed Securities not replaced, and the principal and accrued interest
attributable to such Securities shall be distributed not more than 30 days after
the determination of such failure or at such earlier time as the Trustee in its
sole discretion deems to be in the interest of the Unitholders. Any such accrued
interest paid to Unitholders will be paid by the Sponsor. In the event Failed
Securities in a Trust could not be replaced, the Net Annual Interest Income per
Unit for such Trust would be reduced and the Estimated Current Return thereon
might be lowered.
SALE, MATURITY AND REDEMPTION OF SECURITIES. Certain of the Securities may
from time to time under certain circumstances be sold or will mature in
accordance with their terms. The proceeds from such events will be used to pay
for Units redeemed or distributed to Unitholders and not reinvested;
accordingly, no assurance can be given that a Trust will retain for any length
of time its present size and composition.
LITIGATION. To the best knowledge of the Sponsor, there is no litigation
pending as of the Initial Date of Deposit in respect of any Securities which
might reasonably be expected to have a material adverse effect on the Trusts. It
is possible that after the Initial Date of Deposit, litigation may be initiated
with respect to Securities in any Trust. The Sponsor is unable to predict
whether any such litigation may be instituted, or if instituted, whether such
litigation might have a material adverse effect on the Trusts.
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INSURANCE ON THE CORPORATE BONDS
All Bonds in an insured Corporate Trust ("INSURED CORPORATE TRUST")
portfolio except for any U.S. Treasury obligations contained in such portfolio
are insured as to the scheduled payment of interest and principal either by the
issuer of the Corporate Bonds or by the Sponsor under a financial guaranty
insurance policy obtained from MBIA Insurance Corporation ("MBIA"). The premium
for each such insurance policy has been paid in advance by such issuer or the
Sponsor and each such policy is non-cancellable and will remain in force so long
as the Corporate Bonds are outstanding and MBIA remains in business. No premiums
for such insurance are paid by any Corporate Trust. If MBIA is unable to meet
its obligations under its policy or if the rating assigned to the claims-paying
ability of MBIA deteriorates, no other insurer has any obligation to insure any
issue adversely affected by either of these events.
The aforementioned insurance guarantees the scheduled payment of principal
and interest on all of the Corporate Bonds in an Insured Corporate Trust except
for any U.S. Treasury obligations. It does not guarantee the market value of the
Corporate Bonds or the value of the Units of a Corporate Trust. This insurance
is effective so long as the Corporate Bond is outstanding, whether or not held
by a Corporate Trust. Therefore, any such insurance may be considered to
represent an element of market value in regard to the Corporate Bonds, but the
exact effect, if any, of this insurance on such market value cannot be
predicted.
MBIA, formerly known as Municipal Bond Investors Insurance Corporation, is
the principal operating subsidiary of MBIA, Inc., a New York Stock Exchange
listed company. MBIA, Inc. is not obligated to pay the debts of or claims
against MBIA. MBIA is domiciled in the State of New York and licensed to do
business in all 50 states, the District of Columbia, the Commonwealth of Puerto
Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands of
the United States and the Territory of Guam. MBIA has one European branch in the
Republic of France.
As of December 31, 1995, MBIA had admitted assets of $3.8 billion (audited),
total liabilities of $2.5 billion (audited), and total capital and surplus of
$1.3 billion (audited) determined in accordance with statutory accounting
practices prescribed or permitted by insurance regulatory authorities. As of
March 31, 1996, MBIA had admitted assets of $4.0 billion (unaudited), total
liabilities of $2.7 billion (unaudited), and total capital and surplus of $1.3
billion (unaudited) determined in accordance with statutory accounting practices
prescribed or permitted by insurance regulatory authorities. Copies of MBIA
Corporation's financial statements prepared in accordance with statutory
accounting practices are available from MBIA Corporation. The address of MBIA
Corporation is 113 King Street, Armonk, New York 10504.
Moody's rates all bond issues insured by MBIA "Aaa" and short term loans
"MIG 1," both designated to be of the highest quality. Standard & Poor's, upon
request, rates all new issues insured by MBIA "AAA."
Because the Corporate Bonds in an Insured Corporate Trust (other than U.S.
Treasury Obligations) are insured as to the scheduled payment of principal and
interest and on the basis of the financial condition and the method of operation
of MBIA, Standard & Poor's has assigned to Units in such Corporate Trusts its
"AAA" investment rating. This is the highest rating assigned to securities by
such rating agency. These ratings should not be construed as an approval of the
offering of the Units by Standard & Poor's or as a guarantee of the market value
of a Corporate Trust or the Units thereof.
Bonds in a Corporate Trust for which insurance has been obtained by the
issuer thereof or by the Sponsor from MBIA (all of which were rated "Aaa" by
Moody's) may or may not have a higher yield than uninsured bonds rated "Aaa" by
Moody's. In selecting Corporate Bonds for the portfolio of a Corporate Trust,
the Sponsor has applied the criteria hereinbefore described.
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PUBLIC OFFERING PRICE
The Public Offering Price of the Units of each Trust is equal to the
Trustee's determination of the aggregate offering prices of the Securities
deposited therein (minus any advancement to the principal account of the Trust
made by the Trustee) plus a sales charge as set forth in Part A of this
Prospectus, in each case adding to the total thereof, the cash held by the
Trust, if any, and dividing the sum so obtained by the number of Units
outstanding in the Trust. See "UNIT VALUE AND EVALUATION."
The sales charge applicable to quantity purchases is reduced on a graduated
scale as set forth in Part A of this Prospectus. For purposes of calculating the
applicable sales charge, purchasers who have indicated their intent to purchase
a specified amount of Units of any Trust in the primary or secondary offering
period by executing and delivering a letter of intent to the Sponsor, which
letter of intent must be in a form acceptable to the Sponsor and shall have a
maximum duration of thirteen months, will be eligible to receive a reduced sales
charge according to the following tables based on the amount of intended
aggregate purchases as expressed in the letter of intent. Due to administrative
limitations and in order to permit adequate tracking, the only secondary market
purchases that will be permitted to be applied toward the intended specified
amount and that will receive the corresponding reduced sales charge are those
Units that are acquired through or from the Sponsor. By establishing a letter of
intent, a Unitholder agrees that the first purchase of Units following the
execution of such letter of intent will be at least 5% of the total amount of
intended aggregate purchases expressed in such Unitholder's letter of intent.
Further, through the establishment of the letter of intent, such Unitholder
agrees that Units representing 5% of the total amount of the intended purchases
will be held in escrow by the Trustee pending completion of these purchases. All
distributions on Units held in escrow will be credited to such Unitholder's
account. If total purchases prior to the expiration of the letter of intent
period equal or exceed the amount specified in a Unitholder's letter of intent,
the Units held in escrow will be transferred to such Unitholder's account. A
Unitholder who purchases Units during the letter of intent period in excess of
the number of Units specified in a Unitholder's letter of intent, the amount of
which would cause the Unitholder to be eligible to receive an additional sales
charge reduction, will be allowed such additional sales charge reduction on the
purchase of Units which caused the Unitholder to reach such new breakpoint level
and on all additional purchases of Units during the letter of intent period. If
the total purchases are less than the amount specified, the Unitholder involved
must pay the Sponsor an amount equal to the difference between the amounts paid
for these purchases and the amounts which would have been paid if the higher
sales charge had been applied; the Unitholder will, however, be entitled to any
reduced sales charge qualified for by reaching any lower breakpoint level. If
such Unitholder does not pay the additional amount within 20 days after written
request by the Sponsor or the Unitholder's securities representative, the
Sponsor will instruct the Trustee to redeem an appropriate number of the
escrowed Units to meet the required payment. By establishing a letter of intent,
a Unitholder irrevocably appoints the Sponsor as attorney to give instructions
to redeem any or all of such Unitholder's escrowed Units, with full power of
substitution in the premises. A Unitholder or his bonds representative must
notify the Sponsor whenever such Unitholder makes a purchase of Units that he
wishes to be counted towards the intended amount.
For "secondary market" sales, the Public Offering Price per Unit of each
Trust is determined by adding to the Trustee's determination of the bid price of
each Bond in the Trust a sales charge as set forth in Part A of this Prospectus.
See "UNIT VALUE AND EVALUATION." The secondary market sales charge is reduced
with respect to quantity purchases in such amounts as set forth in Part A of
this Prospectus.
Pursuant to the terms of the Indenture, the Trustee may terminate a Trust if
the net asset value of such Trust, as shown by any evaluation, is less than 20%
of the original principal amount of the Trust.
At all times while Units are being offered for sale, the Sponsor will
appraise or cause to be appraised daily the value of the underlying Securities
in each Trust as of 4:00 p.m. eastern time, or as of any earlier closing time on
a day on which the New York Stock Exchange (the "EXCHANGE") is scheduled in
advance to
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close at such earlier time and will adjust the Public Offering Price of the
Units commensurate with such appraisal. Such Public Offering Price will be
effective for all orders received by a dealer or the Sponsor at or prior to 4:00
p.m. eastern time on each such day or as of any earlier closing time on a day on
which the Exchange is scheduled in advance to close at such earlier time. Orders
received after that time, or on a day when the Exchange is closed for a
scheduled holiday or weekend, will be held until the next determination of
price.
Accrued interest from the preceding Record Date to, but not including, the
settlement date of the transaction (three business days after purchase) will be
added to the Public Offering Price to determine the purchase price of Units. See
"ACCRUED INTEREST."
The graduated sales charges set forth in Part A of this Prospectus will
apply on all applicable purchases of Nuveen investment company securities on any
one day by the same purchaser in the amounts stated, and for this purpose
purchases of this Series will be aggregated with concurrent purchases of any
other Series or of shares of any open-end management investment company of which
the Sponsor is principal underwriter and with respect to the purchase of which a
sales charge is imposed. Purchases by or for the account of an individual and
his or her spouse and children under 21 years of age ("IMMEDIATE FAMILY
MEMBERS") will be aggregated to determine the applicable sales charge. The
graduated sales charges are also applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary account.
Units may be purchased at the Public Offering Price without a sales charge by
officers or directors and by bona fide, full-time employees of Nuveen, Nuveen
Advisory Corp., Nuveen Institutional Advisory Corp. and The John Nuveen Company,
including in each case these individuals and their immediate family members (as
defined above).
Units may be purchased in the primary market with a sales charge as provided
for "Wrap Accounts" as set forth in Part A of this Prospectus by (1) investors
who purchase Units through registered investment advisers, certified financial
planners and registered broker-dealers who in each case either charge periodic
fees for financial planning, investment advisory or asset management services,
or provide such services in connection with the establishment of an investment
account for which a comprehensive "wrap fee" charge is imposed, (2) bank trust
departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency, custodial or
similar capacity, (3) any person who for at least 90 days, has been an officer,
director or bona fide employee of any firm offering Units for sale to investors
or their immediate family members (as defined above) and (4) officers and
directors of bank holding companies that make Units available directly or
through subsidiaries or bank affiliates (collectively, the "DISCOUNTED
PURCHASES"). In addition, such investors may purchase Units in the secondary
market at the Public Offering Price for non-breakpoint purchases minus the
concession the Sponsor typically allows to brokers and dealers for
non-breakpoint purchases. Notwithstanding anything to the contrary in this
Prospectus, investors who purchase Units as described in this paragraph will not
receive sales charge reductions for quantity purchases.
The initial or primary Public Offering Price of the Units in each Trust is
based upon a pro rata share of the offering prices per Unit of the Securities in
such Trust plus the applicable sales charge. The secondary market Public
Offering Price of each Trust is based upon a pro rata share of the bid prices
per Unit of the Securities in such Trust plus the applicable sales charge. The
offering prices of Securities in a Trust may be expected to average between 1/2%
to 2% more than the bid prices of such Securities. The difference between the
bid side evaluation and the offering side evaluation of the Securities in each
Trust on the business day prior to the Initial Date of Deposit is shown in the
discussion of each Trust portfolio.
Whether or not Units are being offered for sale, the Sponsor will determine
the aggregate value of each Trust as of 4:00 p.m. eastern time: (i) on each June
30 or December 31 (or, if such date is not a business day, the last business day
prior thereto), (ii) on any day on which a Unit is tendered for redemption (or
the next succeeding business day if the date of tender is a non-business day)
and (iii) at
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such other times as may be necessary. For this purpose, a "business day" shall
be any day on which the Exchange is normally open. (See "UNIT VALUE AND
EVALUATION.")
MARKET FOR UNITS
During the initial public offering period, the Sponsor intends to offer to
purchase Units of each Trust at a price equivalent to the pro rata share per
Unit of the offering prices of the Securities in such Trust (plus accrued
interest). Afterward, although it is not obligated to do so, the Sponsor intends
to maintain a secondary market for Units of each Trust at its own expense and
continuously to offer to purchase Units of each Trust at prices, subject to
change at any time, which are based upon the bid prices of Securities in the
respective portfolios of the Trusts. UNITHOLDERS WHO WISH TO DISPOSE OF THEIR
UNITS SHOULD INQUIRE OF THE TRUSTEE OR THEIR BROKER AS TO THE CURRENT REDEMPTION
PRICE. (See "REDEMPTION.") In connection with its secondary market making
activities, the Sponsor may from time to time enter into secondary market joint
account agreements with other brokers and dealers. Pursuant to such an
agreement, the Sponsor will purchase Units from the broker or dealer at the bid
price and will place the Units into a joint account managed by the Sponsor;
sales from the account will be made in accordance with the then current
prospectus and the Sponsor and the broker or dealer will share profits and
losses in the joint account in accordance with the terms of their joint account
agreement.
Certificates, if any, for Units are delivered to the purchaser as promptly
after the date of settlement (three business days after purchase) as the Trustee
can complete the mechanics of registration, normally within 48 hours after
registration instructions are received. Purchasers of Units to whom Certificates
are issued will be unable to exercise any right of redemption until they have
received their Certificates, properly endorsed for transfer. (See "REDEMPTION.")
ACCRUED INTEREST
Accrued interest is the accumulation of unpaid interest on a bond from the
last day on which interest thereon was paid. Interest on Securities in each
Trust is accounted for daily on an accrual basis. For this reason, the purchase
price of Units of a Trust will include not only the Public Offering Price but
also the proportionate share of accrued interest to the date of settlement.
Unitholders will receive on the next distribution date of a Trust the amount, if
any, of accrued interest paid on their Units.
In an effort to reduce the amount of accrued interest that investors would
have to pay in addition to the Public Offering Price, the Trustee has agreed to
advance to each Trust the amount of accrued interest due on the Securities as of
the Initial Date of Deposit (which has been designated the first Record Date).
This accrued interest will be paid to the Sponsor as the holder of record of all
Units on the Initial Date of Deposit. Consequently, the amount of accrued
interest to be added to the Public Offering Price of Units will include only
accrued interest from the Initial Date of Deposit to, but not including, the
date of settlement of the investor's purchase (three business days after
purchase), less any distributions from the related Interest Account. The Trustee
will recover its advancements (without interest or other cost to the Trusts)
from interest received on the Securities deposited in each Trust.
The Trustee has no cash for distribution to Unitholders until it receives
interest payments on the Securities in the Trusts. Since interest is accrued
daily but paid only semi-annually, during the initial months of the Trusts, the
Interest Accounts, consisting of accrued but uncollected interest and collected
interest (cash), will be predominantly the uncollected accrued interest that is
not available for distribution. However, due to advances by the Trustee, the
Trustee will provide a first distribution approximately 30 days after the
Initial Date of Deposit. Assuming each Trust retains its original size and
composition and expenses and fees remain the same, annual interest collected and
distributed will approximate the estimated Net Annual Interest Income stated in
Part A of this Prospectus. However, the amount of accrued interest at any point
in time will be greater than the amount that the Trustee will have actually
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received and distributed to the Unitholders. Therefore, there will always remain
an item of accrued interest that is included in the purchase price and the
redemption price of the Units.
Interest is accounted for daily and a proportionate share of accrued and
undistributed interest computed from the preceding Record Date is added to the
daily valuation of each Unit of each Trust. (See Part A of this Prospectus and
"WHEN ARE DISTRIBUTIONS MADE TO UNITHOLDERS?") As Securities mature, or are
redeemed or sold, the accrued interest applicable to such securities is
collected and subsequently distributed to Unitholders. Unitholders who sell or
redeem all or a portion of their Units will be paid their proportionate share of
the remaining accrued interest to, but not including, the third business day
following the date of sale or tender.
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN
The Estimated Long Term Return for each Trust is a measure of the return to
the investor expected to be earned over the estimated life of the Trust. The
Estimated Long Term Return represents an average of the yields to maturity (or
call) of the Securities in the Trust's portfolio calculated in accordance with
accepted practice and adjusted to reflect expenses and sales charges. Under
accepted practice, securities are customarily offered to investors on a "yield
price" basis, which involves computation of yield to maturity or to an earlier
call date (whichever produces the lower yield), and which takes into account not
only the interest payable on the securities but also the amortization or
accretion of any premium over, or discount from, the par (maturity) value
inherent in the security's purchase price. In the calculation of Estimated Long
Term Return, the average yield for a Trust's portfolio is derived by weighting
each Security's yield by the market value of the Security and by the amount of
time remaining to the date to which the Security is priced. This weighted
average yield is then adjusted to reflect estimated expenses, is compounded, and
is reduced by a factor which represents the amortization of the sales charge
over the expected average life of a Trust. The Estimated Long Term Return
calculation does not take into account the effect of a first distribution which
may be less than regular distribution or may be paid at some point after 30 days
(or a second distribution which may be less than a normal distribution for
Unitholders who choose quarterly or semi-annual plans of distribution), and it
also does not take into account the difference in timing of payments to
Unitholders who choose quarterly or semi-annual plans of distribution, each of
which will reduce the return.
Estimated Current Return is computed by dividing the Net Annual Interest
Income per Unit by the Public Offering Price. In contrast to Estimated Long Term
Return, Estimated Current Return does not reflect the amortization of premium or
accretion of discount, if any, on the Securities in a Trust's portfolio. Net
Annual Interest Income per Unit is calculated by dividing the annual interest
income to a Trust, less estimated expenses, by the number of Units outstanding.
Net Annual Interest Income per Unit, used to calculate Estimated Current
Return, will vary with changes in fees and expenses of the Trustee and the
Evaluator and with the redemption, maturity, exchange or sale of Securities. A
Unitholder's actual return may vary significantly from the Estimated Long-Term
Return, based on their holding period, market interest rate changes, other
factors affecting the prices of individual securities in the portfolio, and
differences between the expected remaining life of portfolio securities and the
actual length of time that they remain in a Trust; such actual holding periods
may be reduced by termination of a Trust, as described in "OTHER INFORMATION."
Since both the Estimated Current Return and the Estimated Long Term Return
quoted herein are based on the market value of the underlying Securities on the
business day prior to the Initial Date of Deposit, subsequent calculations of
these performance measures will reflect the then current market value of the
underlying Securities and may be higher or lower. The Sponsor will provide
estimated cash flow information relating to a Trust without charge to each
potential investor in a Trust who receives this prospectus and makes an oral or
written request to the Sponsor for such information.
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A portion of the monies received by a Trust may be treated, in the first
year only, as a return of principal due to the inclusion in the Trust portfolio
of "when-issued" or other Securities having delivery dates after the date of
settlement for purchases made on the Initial Date of Deposit. A consequence of
this treatment is that in the computation of Estimated Current Return for the
first year, such monies are excluded from Net Annual Interest Income and treated
as an adjustment to the Public Offering Price. (See "Performance Information"
appearing in Part A of this Prospectus, "COMPOSITION OF TRUSTS" and "WHAT IS THE
TAX STATUS OF UNITHOLDERS?")
A comparison of estimated current returns with the returns on various other
taxable investments is one element to consider in making an investment decision.
The Sponsor may from time to time in its advertising and sales materials compare
the then current estimated returns on a Trust and returns over specified periods
on other similar Nuveen Trusts with returns on taxable investments such as
corporate or U.S. Government securities, bank CD's and money market accounts or
money market funds, each of which has investment characteristics that may differ
from those of the Trust. U.S. Government securities, for example, are backed by
the full faith and credit of the U.S. Government and bank CD's and money market
accounts are insured by an agency of the federal government. Money market
accounts and money market funds provide stability of principal, but pay interest
at rates that vary with the condition of the short-term debt market. The
investment characteristics of the Trusts are described more fully elsewhere in
the Prospectus.
EVALUATION OF SECURITIES AT THE INITIAL DATE OF DEPOSIT
The prices at which the Securities deposited in the Trusts would have been
offered to the public on the business day prior to the Initial Date of Deposit
were determined by the Trustee on the basis of an evaluation of such securities
prepared by Kenny S&P Evaluation Services, a division of J. J. Kenny Co., Inc.
("KENNY S&P"), a firm regularly engaged in the business of evaluating, quoting
or appraising comparable securities.
The amount by which the Trustee's determination of the OFFERING PRICES of
the Securities deposited in the Trust was greater or less than the cost of such
Securities to the Sponsor was PROFIT OR LOSS to the Sponsor exclusive of any
underwriting profit. (See Part A of this Prospectus.) The Sponsor also may
realize FURTHER PROFIT OR SUSTAIN FURTHER LOSS as a result of fluctuations in
the Public Offering Price of the Units. Cash, if any, made available to the
Sponsor prior to the settlement date for a purchase of Units, or prior to the
acquisition of all Portfolio securities by a Trust, may be available for use in
the Sponsor's business, and may be of benefit to the Sponsor.
TAX STATUS
In the Opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. Each Trust is not an association taxable as a corporation for
federal income tax purposes.
2. Each Unitholder will be considered the owner of a pro rata portion
of each of the Trust assets for federal income tax purposes under Subpart E,
Subchapter J of Chapter 1 of the Internal Revenue Code of 1986, as amended
(the "CODE"). Each Unitholder will be considered to have received his pro
rata share of income derived from each Trust asset when such income is
considered to be received by a Trust.
3. Each Unitholder will have a taxable event when a Security is
disposed of (whether by sale, exchange, liquidation, redemption, or payment
at maturity) or when the Unitholder redeems or sells his Units. The cost of
the Units to a Unitholder on the date such Units are purchased is allocated
among the Securities held in a Trust (in accordance with the proportion of
the fair market values of such Securities) in order to determine his tax
basis for his pro rata portion in each Security. Unitholders must reduce the
tax basis of their Units for their share of accrued interest received, if
any,
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on Securities delivered after the date on which the Unitholders pay for
their Units and, consequently, such Unitholders may have an increase in
taxable gain or reduction in capital loss upon the disposition of such
Units. Gain or loss upon the sale or redemption of Units is measured by
comparing the proceeds of such sale or redemption with the adjusted basis of
the Units. If the Trustee disposes of Securities, gain or loss is recognized
to the Unitholder (subject to various non-recognition provisions of the
Code). The amount of any such gain or loss is measured by comparing the
Unitholders' pro rata share of the total proceeds from such disposition with
his basis for his fractional interest in the asset disposed of. The basis of
each Unit and of each Security which was issued with original issue discount
must be increased by the amount of accrued original issue discount and the
basis of each Unit and of each Security which was purchased by a Trust at a
premium must be reduced by the annual amortization of corporate bond premium
which the Unitholder has properly elected to amortize under Section 171 of
the Code. The tax basis reduction requirements of the Code relating to
amortization of corporate bond premium may, under some circumstances, result
in the Unitholder realizing a taxable gain when his Units are sold or
redeemed for an amount equal to or less than his original cost. A Trust may
contain certain "zero coupon" Securities (the "STRIPPED TREASURY
SECURITIES") that are treated as bonds that were originally issued at an
original issue discount provided, pursuant to a Treasury Regulation (the
"REGULATION") issued on December 28, 1992, that the amount of original issue
discount determined under Section 1286 of the Code is not less than a DE
MINIMIS amount as determined thereunder. Because the Stripped Treasury
Securities represent interests in "stripped" U.S. Treasury bonds, a
Unitholder's initial cost for his pro rata portion of each Stripped Treasury
Security held by a Trust (determined at the time he acquires his Units, in
the manner described above) shall be treated as its "purchase price" by the
Unitholder. Original issue discount is effectively treated as interest for
federal income tax purposes, and the amount of original issue discount in
this case is generally the difference between the bond's purchase price and
its stated redemption price at maturity. A Unitholder will be required to
include in gross income for each taxable year the sum of his daily portions
of original issue discount attributable to the Stripped Treasury Securities
held by a Trust as such original issue discount accrues and will, in
general, be subject to federal income tax with respect to the total amount
of such original issue discount that accrues for such year even though the
income is not distributed to the Unitholders during such year to the extent
it is not less than a DE MINIMIS amount as determined under the Regulation.
To the extent that the amount of such discount is less than the respective
DE MINIMIS amount, such discount shall be treated as zero. In general,
original issue discount accrues daily under a constant interest rate method
which takes into account the semi-annual compounding of accrued interest. In
the case of the Stripped Treasury Securities, this method will generally
result in an increasing amount of income to the Unitholders each year.
Limitations on Deductibility of Trust Expenses by Unitholders -- Each
Unitholder's pro rata share of each expense paid by a Trust is deductible by the
Unitholder to the same extent as though the expense had been paid directly by
him. It should be noted that as a result of the Tax Reform Act of 1986, certain
miscellaneous itemized deductions, such as investment expenses, tax return
preparation fees and employee business expenses, may be deductible by an
individual only to the extent they exceed 2% of such individual's adjusted gross
income. Unitholders may be required to treat certain expenses of a Trust as
miscellaneous itemized deductions subject to this limitation.
Premium -- If a Unitholder's tax basis of his pro rata portion in any
Securities held by a Trust exceeds the amount payable by the issuer of the
Security with respect to such pro rata interest upon the maturity of the
Security, such excess would be considered "premium" which may be amortized by
the Unitholder at the Unitholder's election as provided in Section 171 of the
Code.
Original Issue Discount -- Certain of the Securities in a Trust may have
been acquired with "original issue discount." In the case of any Securities in a
Trust acquired with "original issue discount" that exceeds a "DE MINIMIS" amount
as specified in the Code, such discount is includable in taxable income of the
Unitholders on an accrual basis computed daily, without regard to when payments
of interest on such
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Securities are received. The Code provides a complex set of rules regarding the
accrual of original issue discount. These rules provide that original issue
discount generally accrues on the basis of a constant compound interest rate
over the term of the Securities. Unitholders should consult their tax advisers
as to the amount of original issue discount as it accrues.
Special original issue discount rules apply if the purchase price of the
Security by a Trust exceeds its original issue price plus the amount of original
issue discount which would have previously accrued based upon its issue price
(its "ADJUSTED ISSUE PRICE"). Similarly, these special rules would apply to a
Unitholder if the tax basis of his pro rata portion of a Security issued with
original issue discount exceeds his pro rata portion of its adjusted issue
price. Unitholders should also consult their tax advisers regarding these
special rules.
Market Discount -- If a Unitholder's tax basis in his pro rata portion of
Securities is less than the allocable portion of such Security's stated
redemption price at maturity (or, if issued with original issue discount, the
allocable portion of its "REVISED ISSUE PRICE"), such difference will constitute
market discount unless the amount of market discount is "DE MINIMIS" as
specified in the Code. Market discount accrues daily computed on a straight-line
basis, unless the Unitholder elects to calculate accrued market discount under a
constant-yield method. The market discount rules do not apply to Stripped
Treasury Securities because they are stripped debt instruments subject to
special original issue discount rules discussed above. Unitholders should
consult their own tax advisers regarding whether an election should be made and
as to the amount of market discount which accrues.
Accrued market discount is generally includable in taxable income to the
Unitholders as ordinary income for Federal tax purposes upon the receipt of
serial principal payments on the Securities, on the sale, maturity or
disposition of such Securities by a Trust, and on the sale by a Unitholder of
Units, unless a Unitholder elects to include the accrued market discount in
taxable income as such discount accrues. If a Unitholder does not elect to
annually include accrued market discount in taxable income as it accrues,
deductions for any interest expense incurred by the Unitholder which is incurred
to purchase or carry his Units will be reduced by such accrued market discount.
In general, the portion of any interest expense which was not currently
deductible would ultimately be deductible when the accrued market discount is
included in income.
Computation of the Unitholder's Tax Basis -- The tax basis of a Unitholder
with respect to his interest in a Security is increased by the amount of
original issue discount (and market discount, if the Unitholder elects to
include market discount, if any, on the Securities held by a Trust in income as
it accrues) thereon properly included in the Unitholder's gross income as
determined for Federal income tax purposes and reduced by the amount of any
amortized premium which the Unitholder has properly elected to amortize under
Section 171 of the Code. A Unitholder's tax basis in his Units will equal his
tax basis in his pro rata portion of all of the assets of a Trust.
Recognition of Taxable Gain or Loss upon Disposition of Obligations by a
Trust or Disposition of Unit -- A Unitholder will recognize taxable capital gain
(or loss) when all or part of his pro rata interest in a Security is disposed of
in a taxable transaction for an amount greater (or less) than his tax basis
therefor. Any gain recognized on a sale or exchange and not constituting a
realization of accrued "market discount," and any loss, will generally be
capital gain or loss except in the case of a dealer or financial institution. As
previously discussed, gain realized on the disposition of the interest of a
Unitholder in any Security deemed to have been acquired with market discount
will be treated as ordinary income to the extent the gain does not exceed the
amount of accrued market discount not previously taken into income. Any capital
gain or loss arising from the disposition of a Security by a Trust or the
disposition of Units by a Unitholder will be short-term capital gain (or loss)
unless the Unitholder has held his Units for more than one year in which case
such capital gain or loss will be long-term. For taxpayers other than
corporations, net capital gains are subject to a maximum marginal stated tax
rate of 28%. However, it should be noted that legislative proposals are
introduced from time to time that affect tax rates and could affect relative
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differences at which ordinary income and capital gains are taxed. The tax cost
reduction requirements of the Code relating to amortization of Security premium
may, under some circumstances, result in the Unitholder's realizing taxable gain
when his Units are sold or redeemed for an amount equal to or less than his
original cost.
If the Unitholder disposes of a Unit, he is deemed thereby to have disposed
of his entire pro rata interest in all Trust assets, including his pro rata
portion of all of the Securities represented by the Unit. This may result in a
portion of the gain, if any, on such sale being taxable as ordinary income under
the market discount rules (assuming no election was made by the Unitholder to
include market discount in income as it accrues) as previously discussed.
"The Revenue Reconciliation Act of 1993" (the "TAX ACT") raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated rate
for taxpayers other than corporations. Because some or all capital gains are
taxed at a comparatively lower rate under the Tax Act, the Tax Act includes a
provision that recharacterizes capital gains as ordinary income in the case of
certain financial transactions that are "conversion transactions" effective for
transactions entered into after April 30, 1993. Unitholders and prospective
investors should consult with their tax advisers regarding the potential effect
of this provision on their investment in Units.
Foreign Investors -- A Unitholder who is a foreign investor (I.E., an
investor other than a U.S. citizen or resident of a U.S. corporation,
partnership, estate or trust) will not be subject to United States federal
income taxes, including withholding taxes, on interest income (including any
original issue discount) on, or any gain from the sale or other disposition of,
his pro rata interest in any Security or the sale of his Units PROVIDED that (i)
the interest income or gain is not effectively connected to the conduct by the
foreign investor of a trade or business within the United States, (ii) with
respect to any gain, the foreign investor (if an individual) is not present in
the United States for 183 days or more during his taxable year, (iii) the
foreign investor provides all certification which may be required of his or her
status (foreign investors may contact the Sponsor to obtain a Form W-8 which
must be filed with the Trustee and refiled every three calendar years
thereafter) and (iv) FURTHER PROVIDED that the exemption from withholding for
U.S. Federal income taxes for interest on any U.S. Securities shall apply to the
extent the securities were issued after July 18, 1984. Foreign investors should
consult their tax advisers with respect to United States tax consequences of
ownership of Units. On December 7, 1995 the U.S. Treasury Department released
proposed legislation that, if adopted, could affect the United States federal
income taxation of such non-United States Unitholders and the portion of the
Trust's income allocable to non-United States Unitholders.
In the opinion of Carter, Ledyard & Milburn, special counsel to the Trusts
for New York tax matters each Trust is not an association taxable as a
corporation and the income of each Trust will be treated as the income of the
Unitholders under the existing income tax laws of the State and City of New
York.
General -- Each Unitholder (other than a foreign investor who has properly
provided the certifications described above) will be requested to provide the
Unitholder's taxpayer identification number to the Trustee and to certify that
the Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided with requested, distributions by a
Trust to such Unitholder will be subject to back-up withholding.
The foregoing discussion relates only to United States federal income taxes
and applies only to the Trusts which are described in this Prospectus;
Unitholders may be subject to state and local taxation in other jurisdictions
(including a foreign investor's country of residence). Unitholders should
consult their tax advisers regarding potential state, local, or foreign taxation
with respect to the Units and the tax treatment of Securities acquired at an
original issue discount or market discount and premium, if any.
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TRUST OPERATING EXPENSES
No annual advisory fee is charged to the Trusts by the Sponsor. The Sponsor
does, however, receive those fees as set forth in "EXPENSE INFORMATION" in Part
A of this Prospectus for regularly evaluating the Bonds and for maintaining
surveillance over the portfolio. (See "UNIT VALUE AND EVALUATION.")
The Trustee receives for ordinary recurring services an annual fee for each
plan of distribution for each Trust as set forth in "EXPENSE INFORMATION"
appearing in Part A of this Prospectus. Each annual fee is per $1,000 principal
amount of the underlying Securities in a Trust for that portion of the Trust
that represents a particular plan of distribution. The Trustee's fee may be
periodically adjusted in response to fluctuations in short-term interest rates
(reflecting the cost to the Trustee of advancing funds to a Trust to meet
scheduled distributions) and may be further adjusted in accordance with the
cumulative percentage increase of the United States Department of Labor's
Consumer Price Index entitled "All Services Less Rent of Shelter" since the
establishment of the Trusts. The Trustee has the use of funds, if any, being
held in the Interest and Principal Accounts of each Trust for future
distributions, payment of expenses and redemptions. These Accounts are
non-interest bearing to Unitholders. Pursuant to normal banking procedures, the
Trustee benefits from the use of funds held therein. Part of the Trustee's
compensation for its services to the Trusts is expected to result from such use
of these funds.
Premiums for the policies of insurance obtained by the Sponsor or by the
Corporate Bond issuers with respect to the Corporate Bonds in the Insured
Corporate Trusts have been paid in full prior to the deposit of the Corporate
Bonds in the Corporate Trusts, and the value of such insurance has been included
in the evaluation of the Corporate Bonds in each Corporate Trust and accordingly
in the Public Offering Price of Units of each Corporate Trust. There are no
annual continuing premiums for such insurance.
All or a portion of the expenses incurred in establishing the Trusts,
including costs of preparing the registration statement, the trust indenture and
other closing documents, registering Units with the Securities and Exchange
Commission and states, the initial audit of each Trust portfolio, the initial
evaluation, legal fees, the initial fees and expenses of the Trustee and any
other non-material out-of-pocket expenses, will be paid by the Trusts and
amortized over the life of such Trusts. The following are additional expenses of
the Trusts and, when paid by or are owed to the Trustee, are secured by a lien
on the assets of the Trust or Trusts to which such expenses are allocable: (1)
the expenses and costs of any action undertaken by the Trustee to protect the
Trusts and the rights and interests of the Unitholders; (2) all taxes and other
governmental charges upon the Securities or any part of the Trusts (no such
taxes or charges are being levied or made or, to the knowledge of the Sponsor,
contemplated); (3) amounts payable to the Trustee as fees for ordinary recurring
services and for extraordinary non-recurring services rendered pursuant to the
Indenture, all disbursements and expenses including counsel fees (including fees
of counsel which the Trustee may retain) sustained or incurred by the Trustee in
connection therewith; and (4) any losses or liabilities accruing to the Trustee
without negligence, bad faith or willful misconduct on its part. The Trustee is
empowered to sell Securities in order to pay these amounts if funds are not
otherwise available in the applicable Interest and Principal Accounts.
The Indenture requires each Trust to be audited on an annual basis at the
expense of the Trust by independent public accountants selected by the Sponsor.
The Trustee shall not be required, however, to cause such an audit to be
performed if its cost to a Trust shall exceed $.05 per Unit on an annual basis.
Unitholders of a Trust covered by an audit may obtain a copy of the audited
financial statements upon request.
DISTRIBUTIONS TO UNITHOLDERS
Interest received by the Trustee on the Bonds in each Trust, including that
part of the proceeds of any disposition of Bonds which represents accrued
interest and including any insurance proceeds representing
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interest due on defaulted Corporate Bonds, shall be credited to the "Interest
Account" of such Trust and all other moneys received by the Trustee shall be
credited to the "Principal Account" of such Trust.
The pro rata share of cash in the Principal Account in each Trust will be
computed as of each semi-annual Record Date and distributions to the Unitholders
as of such Record Date will be made on or shortly after the fifteenth day of the
month. With the exception of proceeds received from maturing U.S. Treasury
Obligations by the U.S. Treasury Trusts, proceeds received from the disposition,
including sale, call or maturity, of any of the Securities and all amounts paid
with respect to zero coupon bonds and Stripped Obligations will be held in the
Principal Account and either used to pay for Units redeemed or distributed on
the Distribution Date following the next semi-annual Record Date. Proceeds
received by a U.S. Treasury Trust as a result of the maturity of an underlying
U.S. Treasury Obligation will be distributed within five business days after
such U.S. Treasury Obligation matures to Unitholders of record on such maturity
date. The Trustee is not required to make a distribution from the Principal
Account of any Trust unless the amount available for distribution in such
account equals at least ten cents per Unit.
The pro rata share of the Interest Account in each Trust will be computed by
the Trustee as of each Record Date and distributions will be made on or shortly
after the fifteenth day of the month to Unitholders of such Trust as of the
Record Date who are entitled to distributions at that time under the plan of
distribution chosen. Persons who purchase Units between a Record Date and a
Distribution Date will receive their first distribution on the Distribution Date
following the next Record Date under the applicable plan of distribution.
Purchasers of Units who desire to receive interest distributions on a
monthly or quarterly basis may elect to do so at the time of purchase during the
initial public offering period. Those indicating no choice will be deemed to
have chosen the semi-annual distribution plan. All Unitholders, however, who
purchase Units during the initial public offering period and who hold them of
record on the first Record Date will receive the first distribution of interest.
Thereafter, Record Dates for monthly distributions will be the first day of each
month; Record Dates for quarterly distributions will be the first day of
February, May, August and November; and Record dates for semi-annual
distributions will be the first day of May and November. See Part A of this
Prospectus for details of distributions per Unit of each Trust based upon
estimated Net Annual Interest Income at the Initial Date of Deposit. The amount
of the regular distributions will generally change when Securities are redeemed,
mature or are sold or when fees and expenses increase or decrease. For the
purpose of minimizing fluctuations in the distributions from the Interest
Account of a Trust, the Trustee is authorized to advance such amounts as may be
necessary to provide for interest distributions of approximately equal amounts.
The Trustee shall be reimbursed, without interest, for any such advances from
funds in the Interest Account of such Trust. The Trustee's fee takes into
account the costs attributable to the outlay of capital needed to make such
advances.
The plan of distribution selected by a Unitholder will remain in effect
until changed. Unitholders purchasing Units in the secondary market will
initially receive distributions in accordance with the election of the prior
owner. Unitholders desiring to change their plan of distribution may do so by
sending a written notice requesting the change, together with any
Certificate(s), to the Trustee. The notice and any Certificate(s) must be
received by the Trustee not later than the semi-annual Record Date to be
effective as of the semi-annual distribution following the subsequent
semi-annual Record Date. Unitholders are requested to make any such changes
within 45 days prior to the applicable Record Date. Certificates should only be
sent by registered or certified mail to minimize the possibility of their being
lost or stolen. See "OWNERSHIP AND TRANSFER OF UNITS."
As of the first day of each month the Trustee will deduct from the Interest
Account of a Trust or, to the extent funds are not sufficient therein, from the
Principal Account of a Trust, amounts needed for payment of expenses of such
Trust. The Trustee also may withdraw from said accounts such amount, if any, as
it deems necessary to establish a reserve for any governmental charges payable
out of such Trust. Amounts so withdrawn shall not be considered a part of a
Trust's assets until such time as the Trustee shall
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withdraw from the Interest Account and the Principal Account of a Trust such
amounts as may be necessary to cover redemptions of Units of such Trust by the
Trustee. Funds which are available for future distributions, redemptions and
payment of expenses are held in accounts which are non-interest bearing to
Unitholders and are available for use by the Trustee pursuant to normal banking
procedures.
Unitholders of a Trust which contains Stripped Treasury Securities should
note that Stripped Treasury Securities are sold at a deep discount because the
buyer of those securities obtains only the right to receive a future fixed
payment on the security and not any rights to periodic interest payments
thereon. Purchasers of these Securities acquire, in effect, discount obligations
that are economically identical to the "zero-coupon bonds" that have been issued
by corporations. Zero coupon bonds are debt obligations which do not make any
periodic payments of interest prior to maturity and accordingly are issued at a
deep discount. Under generally accepted accounting principles, a holder of a
security purchased at a discount normally must report as an item of income for
financial accounting purposes the portion of the discount attributable to the
applicable reporting period. The calculation of this attributable income would
be made on the "interest" method which generally will result in a lesser amount
of includable income in earlier periods and a corresponding larger amount in
later periods. For federal income tax purposes, the inclusion will be on a basis
that reflects the effective compounding of accrued but unpaid interest
effectively represented by the discount. Although this treatment is similar to
the "interest" method described above, the "interest" method may differ to the
extent that generally accepted accounting principles permit or require the
inclusion of interest on the basis of a compounding period other than the
semi-annual period. See "TAX STATUS."
ACCUMULATION PLAN
The Sponsor is also the principal underwriter of several open-end mutual
funds (the "ACCUMULATION FUNDS") into which Unitholders may choose to reinvest
Trust distributions. Unitholders may elect to reinvest principal distributions
or interest and principal distributions automatically, without any sales charge.
Each Accumulation Fund has investment objectives which differ in certain
respects from those of the Trusts and may invest in securities which would not
be eligible for deposit in the Trusts. Further information concerning the
Accumulation Plan and a list of Accumulation Funds is set forth in the
Information Supplement of this Prospectus, which may be obtained by contacting
the Trustee at the phone number listed on the back cover of this Prospectus.
Participants may at any time, by so notifying the Trustee in writing, elect
to change the Accumulation Fund into which their distributions are being
reinvested, to change from principal only reinvestment to reinvestment of both
principal and interest or vice versa, or to terminate their participation in the
Accumulation Plan altogether and receive future distributions on their Units in
cash. There will be no charge or other penalty for such change of election or
termination. The character of Trust distributions for income tax purposes will
remain unchanged even if they are reinvested in an Accumulation Fund.
REPORTS TO UNITHOLDERS
The Trustee shall furnish Unitholders of a Trust in connection with each
distribution, a statement of the amount of interest, if any, and the amount of
other receipts (received since the preceding distribution) being distributed,
expressed in each case as a dollar amount representing the pro rata share of
each Unit of a Trust outstanding and a year to date summary of all distributions
paid on said Units. Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each person, who at any time during
the calendar year was a registered Unitholder of a Trust, a statement with
respect to such Trust (i) as to the Interest Account: interest received
(including amounts representing interest received upon any disposition of
Securities), deductions for fees and expenses of such Trust, redemption of Units
and the balance remaining after such distributions and deductions, expressed in
each case both as a total dollar amount and as a dollar amount representing the
pro rata share of each Unit outstanding on the last business day of such
calendar year; (ii) as to the Principal Account: the dates of disposition of any
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Securities and the net proceeds received therefrom (excluding any portion
representing accrued interest), the amount paid for purchase of Replacement
Securities, the amount paid upon redemption of Units, deductions for payment of
applicable taxes and fees and expenses of the Trustee, and the balance remaining
after such distributions and deductions expressed both as a total dollar amount
and as a dollar amount representing the pro rata share of each Unit outstanding
on the last business day of such calendar year; (iii) a list of the Securities
held and the number of Units outstanding on the last business day of such
calendar year; (iv) the Unit Value based upon the last computation thereof made
during such calendar year; and (v) amounts actually distributed during such
calendar year from the Interest Account and from the Principal Account,
separately stated, expressed both as total dollar amounts and as dollar amounts
representing the pro rata share of each Unit outstanding.
UNIT VALUE AND EVALUATION
The value of each Trust is determined by the Sponsor on the basis of (1) the
cash on hand in the Trust or moneys in the process of being collected, (2) the
value of the Securities in the Trust based on the BID prices of the Securities
and (3) interest accrued thereon not subject to collection, LESS (1) amounts
representing taxes or governmental charges payable out of the Trust and (2) the
accrued expenses of the Trust. The result of such computation is divided by the
number of Units of the Trust outstanding as of the date thereof to determine the
per Unit value ("UNIT VALUE") of such Trust. The Sponsor may determine the value
of the Securities in each Trust (1) on the basis of current BID prices of the
Securities obtained from dealers or brokers who customarily deal in securities
comparable to those held by the Trust, (2) if bid prices are not available for
any of the Securities, on the basis of bid prices for comparable securities, (3)
by causing the value of the Securities to be determined by others engaged in the
practice of evaluating, quoting or appraising comparable securities or (4) by
any combination of the above. Although the Unit Value of each Trust is based on
the BID prices of the Securities, the Units are sold initially to the public at
the Public Offering Price based on the OFFERING prices of the Securities.
Because the insurance obtained by the Sponsor or by the issuers of Corporate
Bonds with respect to the Corporate Bonds in the Insured Corporate Trusts is
effective so long as such Corporate Bonds are outstanding, such insurance will
be taken into account in determining the bid and offering prices of such
Corporate Bonds and therefore some value attributable to such insurance will be
included in the value of Units of Corporate Trusts that include such Corporate
Bonds.
DISTRIBUTIONS OF UNITS TO THE PUBLIC
Nuveen, in addition to being the Sponsor, is the sole Underwriter of the
Units. It is the intention of the Sponsor to qualify Units of the Trusts for
sale under the laws of substantially all of the states of the United States of
America.
Promptly following the deposit of Securities in exchange for Units of the
Trusts, it is the practice of the Sponsor to place all of the Units as
collateral for a letter or letters of credit from one or more commercial banks
under an agreement to release such Units from time to time as needed for
distribution. Under such an arrangement the Sponsor pays such banks compensation
based on the then current interest rate. This is a normal warehousing
arrangement during the period of distribution of the Units to public investors.
To facilitate the handling of transactions, sales of Units shall be limited to
transactions involving a minimum of either $5,000 or 50 Units, whichever is
less. The Sponsor reserves the right to reject, in whole or in part, any order
for the purchase of Units.
The Sponsor plans to allow a discount to brokers and dealers in connection
with the primary distribution of Units and also in secondary market
transactions. The amounts of such discounts are set forth in Part A of this
Prospectus.
The Sponsor currently intends to maintain a secondary market for Units of
each Trust. See "MARKET FOR UNITS."
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The Sponsor reserves the right to change the amounts of the dealer
concessions set forth in Part A of this Prospectus from time to time.
Registered investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for financial
planning, investment advisory or asset management services, or provide such
services in connection with the establishment of an investment account for which
a comprehensive "wrap fee" charge is imposed, and bank trust departments
investing funds over which they exercise exclusive discretionary investment
authority and that are held in a fiduciary, agency, custodial or similar
capacity, are not entitled to receive any dealer concession for any sales made
to investors which qualified as "Discounted Purchases" during the primary or
secondary market. (See "PUBLIC OFFERING PRICE.")
Certain commercial banks are making Units of the Trusts available to their
customers on an agency basis. A portion of the sales charge paid by these
customers is retained by or remitted to the banks in the amounts shown in the
above table. The Glass-Steagall Act prohibits banks from underwriting Trust
Units; the Act does, however, permit certain agency transactions and banking
regulators have not indicated that these particular agency transactions are not
permitted under the Act. In Texas and in certain other states, any bank making
Units available must be registered as a broker-dealer under state law.
OWNERSHIP AND TRANSFER OF UNITS
The ownership of Units is evidenced by book entry positions recorded on the
books and records of the Trustee unless the Unitholder expressly requests that
the purchased Units be evidenced in Certificate form. The Trustee is authorized
to treat as the owner of Units that person who at the time is registered as such
on the books of the Trustee. Any Unitholder who holds a Certificate may change
to book entry ownership by submitting to the Trustee the Certificate along with
a written request that the Units represented by such Certificate be held in book
entry form. Likewise, a Unitholder who holds Units in book entry form may obtain
a Certificate for such Units by written request to the Trustee. Units may be
held in denominations of one Unit or any multiple or fraction thereof. Fractions
of Units are computed to three decimal places. Any Certificates issued will be
numbered serially for identification, and are issued in fully registered form,
transferable only on the books of the Trustee. Book entry Unitholder will
receive a Book Entry Position Confirmation reflecting their ownership.
For Trusts allowing optional plans of distribution, Certificates for Units
will bear an appropriate notation of their face indicating which plan of
distribution has been selected. When a change is made, the existing Certificates
must be surrendered to the Trustee and new Certificates issued to reflect the
currently effective plan of distribution. There will be no charge for this
service. Holders of book entry Units can change their plan of distribution by
making a written request to the Trustee, which will issue a new Book Entry
Position Confirmation to reflect such change.
Units are transferable by making a written request to the Trustee and, in
the case of Units evidenced by Certificate(s), by presenting and surrendering
such Certificate(s) to the Trustee, at its address listed on the back cover of
this Part B of the Prospectus, properly endorsed or accompanied by a written
instrument or instruments of transfer. The Certificate(s) should be sent
registered or certified mail for the protection of the Unitholders. Each
Unitholder must sign such written request, and such Certificate(s) or transfer
instrument, exactly as his name appears on (a) the face of the Certificate(s)
representing the Units to be transferred, or (b) the Book Entry Position
Confirmation(s) relating to the Units to be transferred. Such signature(s) must
be guaranteed by a guarantor acceptable to the Trustee. In certain instances the
Trustee may require additional documents such as, but not limited to, trust
instruments, certificates of death, appointments as executor or administrator or
certificates of corporate authority. Mutilated Certificates must be surrendered
to the Trustee in order for a replacement Certificate to be issued. Although at
the date hereof no charge is made and none is contemplated, a Unitholder may be
required to pay $2.00 to the
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Trustee for each Certificate reissued or transfer of Units requested and to pay
any governmental charge which may be imposed in connection therewith.
REPLACEMENT OF LOST, STOLEN OR DESTROYED CERTIFICATES
To obtain a new Certificate replacing one that has been lost, stolen, or
destroyed, the Unitholder must furnish the Trustee with sufficient
indemnification and pay such expenses as the Trustee may incur. This
indemnification must be in the form of an Open Penalty Bond of Indemnification.
The premium for such an indemnity bond may vary, but currently amounts to 1% of
the market value of the Units represented by the Certificate. In the case
however, of a Trust as to which notice of termination has been given, the
premium currently amounts to 0.5% of the market value of the Units represented
by such Certificate.
REDEMPTION
Unitholders may redeem all or a portion of their Units by (1) making a
written request for such redemption (book entry Unitholders may use the
redemption form on the reverse side of their Book Entry Position Confirmation)
to the Trustee at its address listed on the back cover of this Part B of the
Prospectus (redemptions of 1,000 Units or more will require a signature
guarantee), (2) in the case of Units evidenced by a Certificate, by also
tendering such Certificate to the Trustee, duly endorsed or accompanied by
proper instruments of transfer with signatures guaranteed as explained above, or
provide satisfactory indemnity required in connection with lost, stolen or
destroyed Certificates and (3) payment of applicable governmental charges, if
any. Certificates should be sent only by registered or certified mail to
minimize the possibility of their being lost or stolen. (See "OWNERSHIP AND
TRANSFER OF UNITS.") No redemption fee will be charged. A Unitholder may
authorize the Trustee to honor telephone instructions for the redemption of
Units held in book entry form. Units represented by Certificates may not be
redeemed by telephone. The proceeds of Units redeemed by telephone will be sent
by check either to the Unitholder at the address specified on his account or to
a financial institution specified by the Unitholder for credit to the account of
the Unitholders. A Unitholder wishing to use this method of redemption must
complete a Telephone Redemption Authorization Form and furnish the Form to the
Trustee. Telephone Redemption Authorization Forms can be obtained from a
Unitholder's registered representative or by calling the Trustee. Once the
completed Form is on file, the Trustee will honor telephone redemption requests
by any authorized person. The time a telephone redemption request is received
determines the "date of tender" as discussed below. The redemption proceeds will
be mailed within three business days following the telephone redemption request.
Only Units held in the name of individuals may be redeemed by telephone;
accounts registered in broker name, or accounts of corporations or fiduciaries
(including among others, trustees, guardians, executors and administrators) may
not use the telephone redemption privilege.
On the third business day following the date of tender, the Unitholder will
be entitled to receive in cash for each Unit tendered an amount equal to the
Unit Value of such Trust determined by the Trustee, as of 4:00 p.m. eastern
time, or as of any earlier closing time on a day on which the Exchange is
scheduled in advance to close at such earlier time, on the date of tender as
defined hereafter, plus accrued interest to, but not including, the third
business day after the date of tender ("REDEMPTION PRICE"). The price received
upon redemption may be more or less than the amount paid by the Unitholder
depending on the value of the Securities on the date of tender. Unitholders
should check with the Trustee or their broker to determine the Redemption Price
before tendering Units.
The "DATE OF TENDER" is deemed to be the date on which the request for
redemption of Units is received in proper form by the Trustee, except that as
regards a redemption request received after 4:00 p.m. eastern time, or as of any
earlier closing time on a day on which the Exchange is scheduled in advance to
close at such earlier time, or on any day on which the Exchange is normally
closed, the date of tender is the next
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day on which such Exchange is normally open for trading and such request will be
deemed to have been made on such day and the redemption will be effected at the
Redemption Price computed on that day.
Accrued interest paid on redemption shall be withdrawn from the Interest
Account of the appropriate Trust or, if the balance therein is insufficient,
from the Principal Account of such Trust. All other amounts paid on redemption
shall be withdrawn from the Principal Account. The Trustee is empowered to sell
underlying Securities of a Trust in order to make funds available for
redemption. (See "REMOVAL OF SECURITIES FROM THE TRUSTS.") Units so redeemed
shall be cancelled. To the extent that Securities are sold from the Trusts, the
size and diversity of such Trust will be reduced. Such sales may be required at
a time when Securities would not otherwise be sold and might result in lower
prices than might otherwise be realized.
The Redemption Price is determined on the basis of the BID prices of the
Securities in each Trust, while the initial Public Offering Price of Units will
be determined on the basis of the OFFERING prices of the Securities as of 4:00
p.m. eastern time on any day on which the Exchange is normally open for trading,
or as of any earlier closing time on a day on which the Exchange is scheduled in
advance to close at such earlier time, and such determination is made. As of any
given time, the difference between the bid and offering prices of such
Securities may be expected to average 1/2% to 2% of principal amount. In the
case of actively traded Securities, the difference may be as little as 1/4 to
1/2 of 1%, and in the case of inactively traded Securities such difference
usually will not exceed 3%.
The right of redemption may be suspended and payment postponed (1) for any
period in which the New York Stock Exchange is closed, other than customary
weekend and holiday closings or for any period during which the Securities and
Exchange Commission determines that trading on the New York Stock Exchange is
restricted, (2) for any period during which an emergency exists, as a result of
which disposal or evaluation of the Securities is not reasonably practicable, or
(3) for such other periods as the Securities and Exchange Commission may by
order permit.
Under regulations issued by the Internal Revenue Service, the Trustee will
be required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing his or her tax return. Under normal
circumstances the Trustee obtains the Unitholder's tax identification number
from the selling broker at the time the Certificate or Book Entry Return
Confirmation is issued, and this number is printed on the Certificate or Book
Entry Return Confirmation and on distribution statements. If a Unitholder's tax
identification number does not appear as described above, or if it is incorrect,
the Unitholder should contact the Trustee before redeeming Units to determine
what action, if any, is required to avoid this "back-up withholding."
PURCHASE OF UNITS BY THE SPONSOR
The Trustee will notify the Sponsor of any tender of Units for redemption.
If the Sponsor's bid in the secondary market at that time equals or exceeds the
Redemption Price it may purchase such Units by notifying the Trustee before the
close of business on the second succeeding business day and by making payment
therefor to the Unitholder not later than the day on which payment would
otherwise have been made by the Trustee. (See "REDEMPTION.") The Sponsor's
current practice is to bid at the Redemption Price in the secondary market.
Units held by the Sponsor may be tendered to the Trustee for redemption as any
other Units.
REMOVAL OF SECURITIES FROM THE TRUSTS
Securities will be removed from a Trust as they mature or are redeemed by
the issuers thereof. The Indenture also empowers the Trustee to sell Securities
for the purpose of redeeming Units tendered by any Unitholder, and for the
payment of expenses for which income may not be available. Under the Indenture,
25
<PAGE>
the Sponsor is obligated to provide the Trustee with a current list of
Securities in each Trust to be sold in such circumstances. In deciding which
Securities should be sold the Sponsor intends to consider, among other things,
such factors as: (1) market conditions; (2) market prices of the Securities; (3)
the effect on income distributions to Unitholders of the sale of various
Securities; (4) the effect on principal amount of underlying Securities per Unit
of the sale of various Securities; (5) the financial condition of the issuers;
and (6) the effect of the sale of various Securities on the investment character
of the Trust. Such sales, if required, could result in the sale of Securities by
the Trustee at prices less than original cost to the Trust. To the extent
Securities are sold, the size and diversity of such Trust will be reduced.
In addition, the Sponsor is empowered to direct the Trustee to liquidate
Securities upon the happening of certain other events, such as default in the
payment of principal and/or interest, an action of the issuer that will
adversely affect its ability to continue payment of the principal of and
interest on its Securities, or an adverse change in market, revenue or credit
factors affecting the investment character of the Securities. If a default in
the payment of the principal of and/or interest on any of the Securities occurs,
and if the Sponsor fails to instruct the Trustee whether to sell or continue to
hold such Securities within 30 days after notification by the Trustee to the
Sponsor of such default, the Indenture provides that the Trustee shall liquidate
said Securities forthwith and shall not be liable for any loss so incurred. The
Sponsor may also direct the Trustee to liquidate Securities in a Trust if the
Securities in the Trust are the subject of an advanced refunding generally
considered to be when refunding bonds are issued and the proceeds thereof are
deposited in irrevocable trust to retire the refunded Securities on their
redemption date.
Except as stated in "COMPOSITION OF THE TRUST" regarding the deposit of
additional securities or the limited right of substitution of Replacement
Securities for Failed Securities, and except for refunding Securities that may
be exchanged for Securities under certain conditions specified in the Indenture,
the Indenture does not permit either the Sponsor or the Trustee to acquire or
deposit bonds either in addition to, or in substitution for, any of the
Securities initially deposited in a Trust.
INFORMATION ABOUT THE TRUSTEE
The Trustee and its address are stated on the back cover of this Part B of
the Prospectus. The Trustee is subject to supervision and examination by the
Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and either the Comptroller of the Currency or state banking
authorities.
LIMITATIONS ON LIABILITIES OF SPONSOR AND TRUSTEE
The Sponsor and the Trustee shall be under no liability to Unitholders for
taking any action or for refraining from any action in good faith pursuant to
the Indenture, or for errors in judgment, but shall be liable only for their own
negligence, lack of good faith or willful misconduct. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the Trustee of
any of the Securities. In the event of the failure of the Sponsor to act under
the Indenture, the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Indenture or upon or in respect of any Trust which
the Trustee may be required to pay under any present or future law of the United
States of America or of any other taxing authority having jurisdiction. In
addition, the Indenture contains other customary provisions limiting the
liability of the Trustee.
SUCCESSOR TRUSTEES AND SPONSORS
The Trustee or any successor trustee may resign by executing an instrument
of resignation in writing and filing same with the Sponsor and mailing a copy of
a notice of resignation to all Unitholders then of
26
<PAGE>
record. Upon receiving such notice, the Sponsor is required to promptly appoint
a successor trustee. If the Trustee becomes incapable of acting or is adjudged a
bankrupt or insolvent, or a receiver or other public officer shall take charge
of its property or affairs, the Sponsor may remove the Trustee and appoint a
successor by written instrument. The resignation or removal of a trustee and the
appointment of a successor trustee shall become effective only when the
successor trustee accepts its appointment as such. Any successor trustee shall
be a corporation authorized to exercise corporate trust powers, having capital,
surplus and undivided profits of not less than $5,000,000. Any corporation into
which a trustee may be merged or with which it may be consolidated, or any
corporation resulting from a
If upon resignation of a trustee no successor has been appointed and has
accepted the appointment within 30 days after notification, the retiring trustee
may apply to a court of competent jurisdiction for the appointment of a
successor.
If the Sponsor fails to undertake any of its duties under the Indenture, and
no express provision is made for action by the Trustee in such event, the
Trustee may, in addition to its other powers under the Indenture (1) appoint a
successor sponsor or (2) terminate the Indenture and liquidate the Trusts.
INFORMATION ABOUT THE SPONSOR
Founded in 1898, Nuveen is the oldest and largest investment banking firm
specializing in the underwriting and distribution of tax-exempt securities and
maintains the largest research department in the investment banking community
devoted exclusively to the analysis of municipal securities. In 1961, Nuveen
began sponsoring the Nuveen Tax-Free Unit Trust and since that time has issued
more than $36 billion in tax-exempt unit trusts, including over $12 billion in
tax-exempt insured unit trusts. In addition, Nuveen open-end and closed-end
funds held approximately $35 billion in securities under management as of the
date of this Statement. Over 1,000,000 individuals have invested to date in
Nuveen's tax-exempt funds and trusts. Nuveen is a subsidiary of The John Nuveen
Company which, in turn, is approximately 78% owned by the St. Paul Companies,
Inc. ("ST. PAUL"). St. Paul is located in St. Paul, Minnesota and is principally
engaged in providing property-liability insurance through subsidiaries. Nuveen
is a member of the National Association of Securities Dealers, Inc. and the
Securities Industry Association and has its principal offices located in Chicago
(333 West Wacker Drive) and New York (Swiss Bank Tower, 10 East 50th Street).
Nuveen maintains 11 regional offices.
To help advisers and investors better understand and more efficiently use an
investment in the Trusts to reach their investment goals, the Sponsor may
advertise and create specific investment programs and systems. For example, such
activities may include presenting information on how to use an investment in the
Trusts, alone or in combination with an investment in other mutual funds or unit
investment trusts sponsored by Nuveen, to accumulate assets for future education
needs or periodic payments such as insurance premiums. The Trusts' sponsor may
produce software or additional sales literature to promote the advantages of
using the Trusts to meet these and other specific investor needs.
OTHER INFORMATION
AMENDMENT OF INDENTURE
The Indenture may be amended by the Trustee and the Sponsor without the
consent of any of the Unitholders (1) to cure any ambiguity or to correct or
supplement any provision thereof which may be defective or inconsistent, or (2)
to make such other provisions as shall not adversely affect the Unitholders,
provided, however, that the Indenture may not be amended to permit the deposit
or acquisition of securities either in addition to, or in substitution for any
of the Securities initially deposited in any Trust except as stated in
"COMPOSITION OF THE TRUSTS" regarding the creation of additional Units and the
limited right of substitution of Replacement Securities and except for the
substitution of refunding securities under certain circumstances. The Trustee
shall advise the Unitholders of any amendment promptly after execution thereof.
27
<PAGE>
TERMINATION OF INDENTURE
Each Trust may be liquidated at any time by written consent of 100% of the
Unitholders or by the Trustee when the value of such Trust, as shown by any
evaluation, is less than 20% of the aggregate principal amount of Securities
deposited in a Trust during the initial offering period of such Trust and will
be liquidated by the Trustee in the event that Units not yet sold aggregating
more than 60% of the Units originally created are tendered for redemption by the
Sponsor thereby reducing the net worth of such Trust to less than 40% of the
principal amount of the Securities originally deposited in the portfolio. (See
"ESSENTIAL INFORMATION" appearing in Part A of this Prospectus.) The sale of
Securities from the Trusts upon termination may result in realization of a
lesser amount than might otherwise be realized if such sale were not required at
such time. For this reason, among others, the amount realized by a Unitholder
upon termination may be less than the principal amount of Securities originally
represented by the Units held by such Unitholder. The Indenture will terminate
upon the redemption, sale or other disposition of the last Securities held
thereunder, but in no event shall it continue beyond the end of the calendar
year preceding the twentieth anniversary of its execution for Long-Term, Long
Intermediate, and Intermediate Trusts or beyond the end of the calendar year
preceding the tenth anniversary of its execution for Short Intermediate and
Short Term Trusts.
Written notice of any termination specifying the time or times at which
Unitholders may surrender their Certificates, if any, for cancellation shall be
given by the Trustee to each Unitholder at the address appearing on the
registration books of a Trust maintained by the Trustee. Within a reasonable
time thereafter, the Trustee shall liquidate any Securities in the Trust then
held and shall deduct from the assets of the Trust any accrued costs, expenses
or indemnities provided by the Indenture which are allocable to such Trust,
including estimated compensation of the Trustee and costs of liquidation and any
amounts required as a reserve to provide for payment of any applicable taxes or
other governmental charges. The Trustee shall then distribute to Unitholders of
such Trust their pro rata share of the balance of the Interest and Principal
Accounts. With such distribution, the Unitholders shall be furnished a final
distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the Trustee
in its sole discretion shall determine that any amounts held in reserve are no
longer necessary, it shall make distribution thereof to Unitholders in the same
manner.
LEGAL OPINION
The legality of the Units offered hereby has been passed upon by Chapman and
Cutler, 111 West Monroe Street, Chicago, Illinois 60603. Carter, Ledyard &
Milburn, 2 Wall Street, New York, New York 10005, has acted as counsel for the
Trustee with respect to the Trusts.
AUDITORS
The "Statement of Condition" and "Schedule of Investments" at Initial Date
of Deposit included in Part A of this Prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report in
Part A of this Prospectus, and are included herein in reliance upon the
authority of said firm as experts in giving said report.
SUPPLEMENTAL INFORMATION
Upon written or telephonic request to the Trustee, investors will receive at
no cost to the investor supplemental information about their respective Trust,
which has been filed with the Securities and Exchange Commission and is intended
to supplement information contained in Part A and Part B of this Prospectus.
This supplement includes additional general information about the Sponsor and
the Trusts.
28
<PAGE>
NUVEEN UNIT TRUSTS
PROSPECTUS--PART B
MAY 1, 1997
<TABLE>
<C> <S>
Sponsor John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
Trustee The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
Telephone: 800-257-8787
Legal Counsel to Chapman and Cutler
Sponsor 111 West Monroe Street
Chicago, IL 60603
Independent Arthur Andersen LLP
Public Accountants 33 West Monroe Street
for the Trusts Chicago, IL 60603
</TABLE>
Except as to statements made herein furnished by the Trustee, the Trustee
has assumed no responsibility for the accuracy, adequacy and completeness of the
information contained in this Prospectus.
This Prospectus does not contain all of the information set forth in the
registration statement and exhibits relating thereto, filed with the Securities
and Exchange Commission, Washington, D.C., under the Securities Act of 1933, and
to which reference is made.
No person is authorized to give any information or to make representations
not contained in this Prospectus or in supplemental information or sales
literature prepared by the Sponsor, and any information or representation not
contained therein must not be relied upon as having been authorized by either
the Trusts, the Trustee or the Sponsor. This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, securities in any State to
any Person to whom it is not lawful to make such offer in such state. The Trusts
are registered as a Unit Investment Trusts under the Investment Company Act of
1940, as amended. Such registration does not imply that the Trusts or any of
their Units have been guaranteed, sponsored, recommended or approved by the
United States or any State or agency or officer thereof.
29
<PAGE>
NUVEEN UNIT TRUSTS
INFORMATION SUPPLEMENT
NUVEEN U.S. TREASURY TRUST, SERIES 1 (SHORT-TERM)
The Information Supplement provides additional information concerning the
structure and operations of a Nuveen Unit Trust not found in the prospectuses
for the Trusts. This Information Supplement is not a prospectus and does not
include all of the information that a prospective investor should consider
before investing in a Trust. This Information Supplement should be read in
conjunction with the prospectus for the Trust in which an investor is
considering investing ("PROSPECTUS"). Copies of the Prospectus can be obtained
by calling or writing the Trustee at the telephone number and address indicated
in Part B of the Prospectus. This Information Supplement has been created to
supplement information contained in the Prospectus.
This Information Supplement is dated . Capitalized terms have
been defined in the Prospectus.
TABLE OF CONTENTS
<TABLE>
<S> <C>
ACCUMULATION PLAN...................................................................... 2
INFORMATION ABOUT THE SPONSOR.......................................................... 3
EFFECT OF STATE PERSONAL INCOME TAX EXEMPTION.......................................... 5
</TABLE>
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<PAGE>
ACCUMULATION PLAN
The Sponsor, John Nuveen & Co. Incorporated, is also the principal
underwriter of the Accumulation Funds listed in the following table. Each of
these funds is an open-end, diversified management investment company into which
Unitholders may choose to reinvest Trust distributions automatically, without
any sales charge. Unitholders may reinvest both interest and principal
distributions or principal distributions only. Each Accumulation Fund has
investment objectives which differ in certain respects from those of the Trusts
and may invest in securities which would not be eligible for deposit in the
Trusts. The investment adviser to each Accumulation Fund is a wholly-owned
subsidiary of the Sponsor. Unitholders should contact their financial adviser or
the Sponsor to determine which of the Accumulation Funds they may reinvest into,
as reinvestment in certain of the Accumulation Funds may be restricted to
residents of a particular state or states. Unitholders may obtain a prospectus
for each Accumulation Fu
The following is a complete list of the Accumulation Funds currently
available, as of the Date of Deposit of this Prospectus, to Unitholders under
the Accumulation Plan. The list of available Accumulation Funds is subject to
change without the consent of any of the Unitholders.
ACCUMULATION FUNDS
MUTUAL FUNDS
NUVEEN FLAGSHIP MUNICIPAL TRUST
Nuveen Municipal Bond Fund
Nuveen Insured Municipal Bond Fund
Nuveen Flagship All-American Municipal Bond Fund
Nuveen Flagship Limited Term Municipal Bond Fund
Nuveen Flagship Intermediate Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST I
Nuveen Flagship Arizona Municipal Bond Fund
Nuveen Flagship Colorado Municipal Bond Fund
Nuveen Flagship Florida Municipal Bond Fund
Nuveen Flagship Florida Intermediate Municipal Bond Fund
Nuveen Maryland Municipal Bond Fund
Nuveen Flagship New Mexico Municipal Bond Fund
Nuveen Flagship Pennsylvania Municipal Bond Fund
Nuveen Flagship Virginia Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST II
Nuveen California Municipal Bond Fund
Nuveen California Insured Municipal Bond Fund
Nuveen Flagship Connecticut Municipal Bond Fund
Nuveen Massachusetts Municipal Bond Fund
Nuveen Massachusetts Insured Municipal Bond Fund
Nuveen Flagship New Jersey Municipal Bond Fund
Nuveen Flagship New Jersey Intermediate Municipal Bond Fund
Nuveen Flagship New York Municipal Bond Fund
Nuveen New York Insured Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST III
Nuveen Flagship Alabama Municipal Bond Fund
Nuveen Flagship Georgia Municipal Bond Fund
Nuveen Flagship Louisiana Municipal Bond Fund
Nuveen Flagship North Carolina Municipal Bond Fund
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<PAGE>
Nuveen Flagship South Carolina Municipal Bond Fund
Nuveen Flagship Tennessee Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST IV
Nuveen Flagship Kansas Municipal Bond Fund
Nuveen Flagship Kentucky Municipal Bond Fund
Nuveen Flagship Kentucky Limited Term Municipal Bond Fund
Nuveen Flagship Michigan Municipal Bond Fund
Nuveen Flagship Missouri Municipal Bond Fund
Nuveen Flagship Ohio Municipal Bond Fund
Nuveen Flagship Wisconsin Municipal Bond Fund
Flagship Utility Income Fund
Nuveen Growth and Income Stock Fund
MONEY MARKET FUNDS
Nuveen California Tax-Free Money Market Fund
Nuveen Massachusetts Tax-Free Money Market Fund
Nuveen New York Tax-Free Money Market Fund
Nuveen Tax-Free Reserves, Inc.
Nuveen Tax-Exempt Money Market Fund, Inc.
Each person who purchases Units of a Trust may become a participant in the
Accumulation Plan and elect to have his or her distributions on Units of the
Trust invested directly in shares of one of the Accumulation Funds. Reinvesting
Unitholders may select any interest distribution plan. Thereafter, each
distribution of interest income or principal on the participant's Units
(principal only in the case of a Unitholder who has chosen to reinvest only
principal distributions) will, on the applicable distribution date, or the next
day on which the New York Stock Exchange is nominally open ("BUSINESS DAY") if
the distribution date is not a business day, automatically be received by the
transfer agent for each of the Accumulation Funds, on behalf of such participant
and applied on that date to purchase shares (or fractions thereof) of the
Accumulation Fund chosen at net asset value as computed as of 4:00 p.m. eastern
time on each such date. All distributions will be reinvested in the Accumulation
Fund chosen and no part thereof will be retained in a separate account. These
purchases will be made without a sales charge.
The Transfer Agent of the Accumulation Fund will mail to each participant in
the Accumulation Plan a quarterly statement containing a record of all
transactions involving purchases of Accumulation Fund shares (or fractions
thereof) with Trust interest distributions or as a result of reinvestment of
Accumulation Fund dividends. Any distribution of principal used to purchase
shares of an Accumulation Fund will be separately confirmed by the Transfer
Agent. Unitholders will also receive distribution statements from the Trustee
detailing the amounts transferred to their Accumulation Fund accounts.
Participants may at any time, by so notifying the Trustee in writing, elect
to change the Accumulation Fund into which their distributions are being
reinvested, to change from principal only reinvestment to reinvestment of both
principal and interest or vice versa, or to terminate their participation in the
Accumulation Plan altogether and receive future distributions on their Units in
cash. There will be no charge or other penalty for such change of election or
termination. The character of Trust distributions for income tax purposes will
remain unchanged even if they are reinvested in an Accumulation Fund.
INFORMATION ABOUT THE SPONSOR
Founded in 1898, Nuveen is the oldest and largest investment banking firm
specializing in the underwriting and distribution of tax-exempt securities and
maintains the largest research department in
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the investment banking community devoted exclusively to the analysis of
municipal securities. In 1961, Nuveen began sponsoring the Nuveen Tax-Free Unit
Trust and since that time has issued more than $36 billion in tax-exempt unit
trusts, including over $12 billion in tax-exempt insured unit trusts. The
Sponsor is also principal underwriter of the registered open-end investment
companies set forth herein under "Accumulation Plan" as well as for the Golden
Rainbow A James Advised Mutual Fund, and acted as co-managing underwriter of
Nuveen Municipal Value Fund, Inc., Nuveen California Municipal Value Fund, Inc.,
Nuveen New York Municipal Value Fund, Inc., Nuveen Municipal Income Fund, Inc.,
Nuveen Premium Income Municipal Fund, Inc., Nuveen Performance Plus Municipal
Fund, Inc., Nuveen California Performance Plus Municipal Fund, Inc., Nuveen New
York Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund,
Inc., Nuveen Municipal Market Opportunity Fund, Inc. Nuveen California Municipal
Market Opportunity Fund, Inc., Nuveen Investment Quality Municipal Fund, Inc.,
Nuveen California Investment Quality Municipal Fund, Inc., Nuveen New York
Investment Quality Municipal Fund, Inc., Nuveen Insured Quality Municipal Fund,
Inc., Nuveen Florida Investment Quality Municipal Fund, Nuveen Pennsylvania
Investment Quality Municipal Fund, Nuveen New Jersey Investment Quality
Municipal Fund, Inc., and the Nuveen Select Quality Municipal Fund, Inc., Nuveen
California Select Quality Municipal Fund, Inc., Nuveen New York Select Quality
Municipal Fund, Inc., Nuveen Quality Income Municipal Fund, Inc., Nuveen Insured
Municipal Opportunity Fund, Inc., Nuveen Florida Quality Income Municipal Fund,
Nuveen Michigan Quality Income Municipal Fund, Inc., Nuveen Ohio Quality Income
Municipal Fund, Inc., Nuveen Texas Quality Income Municipal Fund, Nuveen
California Quality Income Municipal Fund, Inc., Nuveen New York Quality Income
Municipal Fund, Inc., Nuveen Premier Municipal Income Fund, Inc., Nuveen Premier
Insured Municipal Income Fund, Inc., Nuveen Select Tax-Free Income Portfolio,
Nuveen Select Tax-Free Income Portfolio 2, Nuveen Insured California Select
Tax-Free Income Portfolio, Nuveen Insured New York Select Tax-Free Income
Portfolio, Nuveen Premium Income Municipal Fund 2, Inc., Nuveen Select Tax-Free
Income Portfolio 3, Nuveen Select Maturities Municipal Fund, Nuveen Insured
California Premium Income Municipal Fund, Inc., Nuveen Arizona Premium Income
Municipal Fund, Inc., Nuveen Insured Florida Premium Income Municipal Fund,
Nuveen Michigan Premium Income Municipal Fund, Inc., Nuveen New Jersey Premium
Income Municipal Fund, Inc., Nuveen Insured New York Premium Income Municipal
Fund, Inc., Nuveen Premium Income Municipal Fund 4, Inc., Nuveen Pennsylvania
Premium Income Municipal Fund 2, Nuveen Maryland Premium Income Municipal Fund,
Nuveen Virginia Premium Income Municipal Fund, Nuveen Massachusetts Premium
Income Municipal Fund, Nuveen Insured California Premium Income Municipal Fund
2, Inc., Nuveen Washington Premium Income Municipal Fund, Nuveen Georgia Premium
Income Municipal Fund, Nuveen Missouri Premium Income Municipal Fund, Nuveen
Connecticut Premium Income Municipal Fund, Nuveen North Carolina Premium Income
Municipal Fund, Nuveen California Premium Income Municipal Fund, Nuveen Insured
Premium Income Municipal Fund 2, all registered closed-end management investment
companies. These registered open-end and closed-end investment companies
currently have approximately $35 billion in securities under management. Over
1,000,000 individuals have invested to date in Nuveen's tax-exempt funds and
trusts. Nuveen is a subsidiary of The John Nuveen Company which, in turn, is
approximately 78% owned by the St. Paul Companies, Inc. ("ST. PAUL"). St. Paul
is located in St. Paul, Minnesota and is principally engaged in providing
property-liability insurance through subsidiaries. Nuveen is a member of the
National Association of Securities Dealers, Inc. and the Securities Industry
Association and has its principal offices located in Chicago (333 West Wacker
Drive) and New York (Swiss Bank Tower, 10 East 50th Street). Nuveen maintains 11
regional offices.
To help advisers and investors better understand and more efficiently use an
investment in the Trust to reach their investment goals, the Trust's sponsor,
John Nuveen & Co. Incorporated, may advertise and create specific investment
programs and systems. For example, such activities may include presenting
information on how to use an investment in the Trust, alone or in combination
with an investment in other mutual funds or unit investment trusts sponsored by
Nuveen, to accumulate assets for future education needs or periodic payments
such as insurance premiums. The Trust's sponsor may produce software or
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<PAGE>
additional sales literature to promote the advantages of using the Trust to meet
these and other specific investor needs.
The Sponsor offers a program of advertising support to registered
broker-dealer firms, banks and bank affiliates ("FIRMS") that sell Trust Units
or shares of Nuveen Open-End Mutual Funds (excluding money-market funds)
("FUNDS"). Under this program, the Sponsor will pay or reimburse the Firm for up
to one half of specified media costs incurred in the placement of advertisements
which jointly feature the Firm and the Nuveen Funds and Trusts. Reimbursements
to the Firm will be based on the number of the Firm's registered representatives
who have sold Fund Shares and/or Trust Units during the prior calendar year
according to an established schedule. Reimbursements under this program will be
made by the Sponsor and not by the Funds or Trusts.
EFFECT OF STATE PERSONAL INCOME TAX EXEMPTION
The following Chart shows what the return on security that is subject to
state personal income taxes would have to be in order to equal 5.52% Estimated
Current Return on a Monthly Payment U.S. Treasury Series. This Trust is free
from state personal income taxes in all states; the comparable security would be
subject to deduction of state personal income taxes at the maximum state rate.
Of course, if you are not in the maximum state personal income tax bracket, the
fully taxable equivalent return would be less.
<TABLE>
<CAPTION>
FULLY TAXABLE RETURN FULLY TAXABLE RETURN
EQUIVALENT TO 5.52% EQUIVALENT TO 5.52%
ESTIMATED CURRENT ESTIMATED CURRENT
MAXIMUM STATE RETURN ON MONTHLY MAXIMUM STATE RETURN ON MONTHLY
PERSONAL INCOME PAYMENT U.S. TREASURY PERSONAL INCOME PAYMENT U.S. TREASURY
STATE TAX RATE(1) SERIES STATE TAX RATE(1) SERIES
- ---------------- --------------- --------------------- ---------------- --------------- ---------------------
<S> <C> <C> <C> <C> <C>
Alabama 5.000%(2) 5.81% Nebraska 6.990% 5.93%
Alaska 0.00 5.52 Nevada 0.000 5.52
Arizona 5.600(2) 5.85 New Hampshire 5.000 5.81
Arkansas 7.000 5.94 New Jersey 6.370 5.90
California 9.300 6.09 New Mexico 8.500 6.03
Colorado 5.000 5.81 New York 7.000 5.94
Connecticut 4.500 5.78 North Carolina 7.750 5.98
Delaware 7.100 5.94 North Dakota 12.000(7) 6.27
Florida 0.000 5.52 Ohio 7.500 5.97
Georgia 6.000 5.87 Oklahoma 10.000( (4) 6.13
Hawaii 10.000 6.13 Oregon 9.000(2) 6.07
Idaho 8.200 6.01 Pennsylvania 2.800 5.68
Illinois 3.000 5.69 Puerto Rico 36.000(8) 8.63
Indiana 3.400 5.71 Rhode Island 10.890(5) 6.19
Iowa 9.980(2) 6.13 South Carolina 7.000 5.94
Kansas 7.750 5.98 South Dakota 0.000 5.52
Kentucky 6.000 5.87 Tennessee 6.000 5.87
Louisiana 6.000 5.87 Texas 0.000 5.52
Maine 8.500 6.03 Utah 7.200(3) 5.95
Maryland 5.000 5.81 Vermont 9.900( (6) 6.13
Massachusetts 12.000 6.27 Virginia 5.750 5.86
Michigan 4.470 5.78 Washington 0.000 5.52
Minnesota 8.500 6.03 West Virginia 6.500 5.90
Mississippi 5.000 5.81 Wisconsin 6.930 5.93
Missouri 6.000 5.87 Wyoming 0.000 5.52
Dist. of
Montana 11.000 6.20 Columbia 9.500 6.10
</TABLE>
This Chart incorporates current applicable State income tax rates and
assumes that all income would otherwise be taxed at the investor's highest tax
rate. If you live in a locality which imposes local personal income taxes, the
fully taxable equivalent return may be greater than as shown on this Chart.
Yield figures are for example only.
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<PAGE>
(1) Based upon net amount subject to State income tax after deductions and
exemptions. This Chart does not reflect other possible tax factors, such as
the alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions and the possible partial disallowance of
deductions. Consequently, Unitholders are urged to consult their own tax
advisors in this regard.
(2) This state allows in any taxable year, the deduction from gross income of
payments of federal tax liability in that year.
(3) This state allows in any taxable year, the deduction from gross income of
50% of amounts paid on federal tax liability in that year.
(4) This maximum applicable rate may be 7% if the taxpayer chooses not to deduct
payments of federal tax liability.
(5) This rate is calculated as a percentage of the highest federal personal
income tax rate of 39.6%.
(6) The rate shown includes the maximum surtax imposed by this state of 6% of
federal personal income tax liability.
(7) The maximum applicable rate may be 14% of adjusted federal personal income
tax liability if the state tax calculated on that basis is less than the
state tax calculated on the basis of the rate shown above.
(8) An alternate basic tax may be assessed if greater than the tax calculated on
the basis of the rate shown above.
S-6
<PAGE>
NUVEEN UNIT TRUSTS
INFORMATION SUPPLEMENT
NUVEEN U.S. TREASURY TRUST, SERIES 2 (SHORT-INTERMEDIATE)
The Information Supplement provides additional information concerning the
structure and operations of a Nuveen Unit Trust not found in the prospectuses
for the Trusts. This Information Supplement is not a prospectus and does not
include all of the information that a prospective investor should consider
before investing in a Trust. This Information Supplement should be read in
conjunction with the prospectus for the Trust in which an investor is
considering investing ("PROSPECTUS"). Copies of the Prospectus can be obtained
by calling or writing the Trustee at the telephone number and address indicated
in Part B of the Prospectus. This Information Supplement has been created to
supplement information contained in the Prospectus.
This Information Supplement is dated . Capitalized terms have
been defined in the Prospectus.
TABLE OF CONTENTS
<TABLE>
<S> <C>
ACCUMULATION PLAN...................................................................... 2
INFORMATION ABOUT THE SPONSOR.......................................................... 3
EFFECT OF STATE PERSONAL INCOME TAX EXEMPTION.......................................... 5
</TABLE>
S-1
<PAGE>
ACCUMULATION PLAN
The Sponsor, John Nuveen & Co. Incorporated, is also the principal
underwriter of the Accumulation Funds listed in the following table. Each of
these funds is an open-end, diversified management investment company into which
Unitholders may choose to reinvest Trust distributions automatically, without
any sales charge. Unitholders may reinvest both interest and principal
distributions or principal distributions only. Each Accumulation Fund has
investment objectives which differ in certain respects from those of the Trusts
and may invest in securities which would not be eligible for deposit in the
Trusts. The investment adviser to each Accumulation Fund is a wholly-owned
subsidiary of the Sponsor. Unitholders should contact their financial adviser or
the Sponsor to determine which of the Accumulation Funds they may reinvest into,
as reinvestment in certain of the Accumulation Funds may be restricted to
residents of a particular state or states. Unitholders may obtain a prospectus
for each Accumulation Fu
The following is a complete list of the Accumulation Funds currently
available, as of the Date of Deposit of this Prospectus, to Unitholders under
the Accumulation Plan. The list of available Accumulation Funds is subject to
change without the consent of any of the Unitholders.
ACCUMULATION FUNDS
MUTUAL FUNDS
NUVEEN FLAGSHIP MUNICIPAL TRUST
Nuveen Municipal Bond Fund
Nuveen Insured Municipal Bond Fund
Nuveen Flagship All-American Municipal Bond Fund
Nuveen Flagship Limited Term Municipal Bond Fund
Nuveen Flagship Intermediate Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST I
Nuveen Flagship Arizona Municipal Bond Fund
Nuveen Flagship Colorado Municipal Bond Fund
Nuveen Flagship Florida Municipal Bond Fund
Nuveen Flagship Florida Intermediate Municipal Bond Fund
Nuveen Maryland Municipal Bond Fund
Nuveen Flagship New Mexico Municipal Bond Fund
Nuveen Flagship Pennsylvania Municipal Bond Fund
Nuveen Flagship Virginia Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST II
Nuveen California Municipal Bond Fund
Nuveen California Insured Municipal Bond Fund
Nuveen Flagship Connecticut Municipal Bond Fund
Nuveen Massachusetts Municipal Bond Fund
Nuveen Massachusetts Insured Municipal Bond Fund
Nuveen Flagship New Jersey Municipal Bond Fund
Nuveen Flagship New Jersey Intermediate Municipal Bond Fund
Nuveen Flagship New York Municipal Bond Fund
Nuveen New York Insured Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST III
Nuveen Flagship Alabama Municipal Bond Fund
Nuveen Flagship Georgia Municipal Bond Fund
Nuveen Flagship Louisiana Municipal Bond Fund
Nuveen Flagship North Carolina Municipal Bond Fund
S-2
<PAGE>
Nuveen Flagship South Carolina Municipal Bond Fund
Nuveen Flagship Tennessee Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST IV
Nuveen Flagship Kansas Municipal Bond Fund
Nuveen Flagship Kentucky Municipal Bond Fund
Nuveen Flagship Kentucky Limited Term Municipal Bond Fund
Nuveen Flagship Michigan Municipal Bond Fund
Nuveen Flagship Missouri Municipal Bond Fund
Nuveen Flagship Ohio Municipal Bond Fund
Nuveen Flagship Wisconsin Municipal Bond Fund
Flagship Utility Income Fund
Nuveen Growth and Income Stock Fund
MONEY MARKET FUNDS
Nuveen California Tax-Free Money Market Fund
Nuveen Massachusetts Tax-Free Money Market Fund
Nuveen New York Tax-Free Money Market Fund
Nuveen Tax-Free Reserves, Inc.
Nuveen Tax-Exempt Money Market Fund, Inc.
Each person who purchases Units of a Trust may become a participant in the
Accumulation Plan and elect to have his or her distributions on Units of the
Trust invested directly in shares of one of the Accumulation Funds. Reinvesting
Unitholders may select any interest distribution plan. Thereafter, each
distribution of interest income or principal on the participant's Units
(principal only in the case of a Unitholder who has chosen to reinvest only
principal distributions) will, on the applicable distribution date, or the next
day on which the New York Stock Exchange is nominally open ("BUSINESS DAY") if
the distribution date is not a business day, automatically be received by the
transfer agent for each of the Accumulation Funds, on behalf of such participant
and applied on that date to purchase shares (or fractions thereof) of the
Accumulation Fund chosen at net asset value as computed as of 4:00 p.m. eastern
time on each such date. All distributions will be reinvested in the Accumulation
Fund chosen and no part thereof will be retained in a separate account. These
purchases will be made without a sales charge.
The Transfer Agent of the Accumulation Fund will mail to each participant in
the Accumulation Plan a quarterly statement containing a record of all
transactions involving purchases of Accumulation Fund shares (or fractions
thereof) with Trust interest distributions or as a result of reinvestment of
Accumulation Fund dividends. Any distribution of principal used to purchase
shares of an Accumulation Fund will be separately confirmed by the Transfer
Agent. Unitholders will also receive distribution statements from the Trustee
detailing the amounts transferred to their Accumulation Fund accounts.
Participants may at any time, by so notifying the Trustee in writing, elect
to change the Accumulation Fund into which their distributions are being
reinvested, to change from principal only reinvestment to reinvestment of both
principal and interest or vice versa, or to terminate their participation in the
Accumulation Plan altogether and receive future distributions on their Units in
cash. There will be no charge or other penalty for such change of election or
termination. The character of Trust distributions for income tax purposes will
remain unchanged even if they are reinvested in an Accumulation Fund.
INFORMATION ABOUT THE SPONSOR
Founded in 1898, Nuveen is the oldest and largest investment banking firm
specializing in the underwriting and distribution of tax-exempt securities and
maintains the largest research department in
S-3
<PAGE>
the investment banking community devoted exclusively to the analysis of
municipal securities. In 1961, Nuveen began sponsoring the Nuveen Tax-Free Unit
Trust and since that time has issued more than $36 billion in tax-exempt unit
trusts, including over $12 billion in tax-exempt insured unit trusts. The
Sponsor is also principal underwriter of the registered open-end investment
companies set forth herein under "Accumulation Plan" as well as for the Golden
Rainbow A James Advised Mutual Fund, and acted as co-managing underwriter of
Nuveen Municipal Value Fund, Inc., Nuveen California Municipal Value Fund, Inc.,
Nuveen New York Municipal Value Fund, Inc., Nuveen Municipal Income Fund, Inc.,
Nuveen Premium Income Municipal Fund, Inc., Nuveen Performance Plus Municipal
Fund, Inc., Nuveen California Performance Plus Municipal Fund, Inc., Nuveen New
York Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund,
Inc., Nuveen Municipal Market Opportunity Fund, Inc. Nuveen California Municipal
Market Opportunity Fund, Inc., Nuveen Investment Quality Municipal Fund, Inc.,
Nuveen California Investment Quality Municipal Fund, Inc., Nuveen New York
Investment Quality Municipal Fund, Inc., Nuveen Insured Quality Municipal Fund,
Inc., Nuveen Florida Investment Quality Municipal Fund, Nuveen Pennsylvania
Investment Quality Municipal Fund, Nuveen New Jersey Investment Quality
Municipal Fund, Inc., and the Nuveen Select Quality Municipal Fund, Inc., Nuveen
California Select Quality Municipal Fund, Inc., Nuveen New York Select Quality
Municipal Fund, Inc., Nuveen Quality Income Municipal Fund, Inc., Nuveen Insured
Municipal Opportunity Fund, Inc., Nuveen Florida Quality Income Municipal Fund,
Nuveen Michigan Quality Income Municipal Fund, Inc., Nuveen Ohio Quality Income
Municipal Fund, Inc., Nuveen Texas Quality Income Municipal Fund, Nuveen
California Quality Income Municipal Fund, Inc., Nuveen New York Quality Income
Municipal Fund, Inc., Nuveen Premier Municipal Income Fund, Inc., Nuveen Premier
Insured Municipal Income Fund, Inc., Nuveen Select Tax-Free Income Portfolio,
Nuveen Select Tax-Free Income Portfolio 2, Nuveen Insured California Select
Tax-Free Income Portfolio, Nuveen Insured New York Select Tax-Free Income
Portfolio, Nuveen Premium Income Municipal Fund 2, Inc., Nuveen Select Tax-Free
Income Portfolio 3, Nuveen Select Maturities Municipal Fund, Nuveen Insured
California Premium Income Municipal Fund, Inc., Nuveen Arizona Premium Income
Municipal Fund, Inc., Nuveen Insured Florida Premium Income Municipal Fund,
Nuveen Michigan Premium Income Municipal Fund, Inc., Nuveen New Jersey Premium
Income Municipal Fund, Inc., Nuveen Insured New York Premium Income Municipal
Fund, Inc., Nuveen Premium Income Municipal Fund 4, Inc., Nuveen Pennsylvania
Premium Income Municipal Fund 2, Nuveen Maryland Premium Income Municipal Fund,
Nuveen Virginia Premium Income Municipal Fund, Nuveen Massachusetts Premium
Income Municipal Fund, Nuveen Insured California Premium Income Municipal Fund
2, Inc., Nuveen Washington Premium Income Municipal Fund, Nuveen Georgia Premium
Income Municipal Fund, Nuveen Missouri Premium Income Municipal Fund, Nuveen
Connecticut Premium Income Municipal Fund, Nuveen North Carolina Premium Income
Municipal Fund, Nuveen California Premium Income Municipal Fund, Nuveen Insured
Premium Income Municipal Fund 2, all registered closed-end management investment
companies. These registered open-end and closed-end investment companies
currently have approximately $35 billion in securities under management. Over
1,000,000 individuals have invested to date in Nuveen's tax-exempt funds and
trusts. Nuveen is a subsidiary of The John Nuveen Company which, in turn, is
approximately 78% owned by the St. Paul Companies, Inc. ("ST. PAUL"). St. Paul
is located in St. Paul, Minnesota and is principally engaged in providing
property-liability insurance through subsidiaries. Nuveen is a member of the
National Association of Securities Dealers, Inc. and the Securities Industry
Association and has its principal offices located in Chicago (333 West Wacker
Drive) and New York (Swiss Bank Tower, 10 East 50th Street). Nuveen maintains 11
regional offices.
To help advisers and investors better understand and more efficiently use an
investment in the Trust to reach their investment goals, the Trust's sponsor,
John Nuveen & Co. Incorporated, may advertise and create specific investment
programs and systems. For example, such activities may include presenting
information on how to use an investment in the Trust, alone or in combination
with an investment in other mutual funds or unit investment trusts sponsored by
Nuveen, to accumulate assets for future education needs or periodic payments
such as insurance premiums. The Trust's sponsor may produce software or
S-4
<PAGE>
additional sales literature to promote the advantages of using the Trust to meet
these and other specific investor needs.
The Sponsor offers a program of advertising support to registered
broker-dealer firms, banks and bank affiliates ("FIRMS") that sell Trust Units
or shares of Nuveen Open-End Mutual Funds (excluding money-market funds)
("FUNDS"). Under this program, the Sponsor will pay or reimburse the Firm for up
to one half of specified media costs incurred in the placement of advertisements
which jointly feature the Firm and the Nuveen Funds and Trusts. Reimbursements
to the Firm will be based on the number of the Firm's registered representatives
who have sold Fund Shares and/or Trust Units during the prior calendar year
according to an established schedule. Reimbursements under this program will be
made by the Sponsor and not by the Funds or Trusts.
EFFECT OF STATE PERSONAL INCOME TAX EXEMPTION
The following Chart shows what the return on security that is subject to
state personal income taxes would have to be in order to equal 5.52% Estimated
Current Return on a Monthly Payment U.S. Treasury Series. This Trust is free
from state personal income taxes in all states; the comparable security would be
subject to deduction of state personal income taxes at the maximum state rate.
Of course, if you are not in the maximum state personal income tax bracket, the
fully taxable equivalent return would be less.
<TABLE>
<CAPTION>
FULLY TAXABLE RETURN FULLY TAXABLE RETURN
EQUIVALENT TO 5.52% EQUIVALENT TO 5.52%
ESTIMATED CURRENT ESTIMATED CURRENT
MAXIMUM STATE RETURN ON MONTHLY MAXIMUM STATE RETURN ON MONTHLY
PERSONAL INCOME PAYMENT U.S. TREASURY PERSONAL INCOME PAYMENT U.S. TREASURY
STATE TAX RATE(1) SERIES STATE TAX RATE(1) SERIES
- ---------------- --------------- --------------------- ---------------- --------------- ---------------------
<S> <C> <C> <C> <C> <C>
Alabama 5.000%(2) 5.81% Nebraska 6.990% 5.93%
Alaska 0.00 5.52 Nevada 0.000 5.52
Arizona 5.600(2) 5.85 New Hampshire 5.000 5.81
Arkansas 7.000 5.94 New Jersey 6.370 5.90
California 9.300 6.09 New Mexico 8.500 6.03
Colorado 5.000 5.81 New York 7.000 5.94
Connecticut 4.500 5.78 North Carolina 7.750 5.98
Delaware 7.100 5.94 North Dakota 12.000(7) 6.27
Florida 0.000 5.52 Ohio 7.500 5.97
Georgia 6.000 5.87 Oklahoma 10.000( (4) 6.13
Hawaii 10.000 6.13 Oregon 9.000(2) 6.07
Idaho 8.200 6.01 Pennsylvania 2.800 5.68
Illinois 3.000 5.69 Puerto Rico 36.000(8) 8.63
Indiana 3.400 5.71 Rhode Island 10.890(5) 6.19
Iowa 9.980(2) 6.13 South Carolina 7.000 5.94
Kansas 7.750 5.98 South Dakota 0.000 5.52
Kentucky 6.000 5.87 Tennessee 6.000 5.87
Louisiana 6.000 5.87 Texas 0.000 5.52
Maine 8.500 6.03 Utah 7.200(3) 5.95
Maryland 5.000 5.81 Vermont 9.900( (6) 6.13
Massachusetts 12.000 6.27 Virginia 5.750 5.86
Michigan 4.470 5.78 Washington 0.000 5.52
Minnesota 8.500 6.03 West Virginia 6.500 5.90
Mississippi 5.000 5.81 Wisconsin 6.930 5.93
Missouri 6.000 5.87 Wyoming 0.000 5.52
Dist. of
Montana 11.000 6.20 Columbia 9.500 6.10
</TABLE>
This Chart incorporates current applicable State income tax rates and
assumes that all income would otherwise be taxed at the investor's highest tax
rate. If you live in a locality which imposes local personal income taxes, the
fully taxable equivalent return may be greater than as shown on this Chart.
Yield figures are for example only.
S-5
<PAGE>
(1) Based upon net amount subject to State income tax after deductions and
exemptions. This Chart does not reflect other possible tax factors, such as
the alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions and the possible partial disallowance of
deductions. Consequently, Unitholders are urged to consult their own tax
advisors in this regard.
(2) This state allows in any taxable year, the deduction from gross income of
payments of federal tax liability in that year.
(3) This state allows in any taxable year, the deduction from gross income of
50% of amounts paid on federal tax liability in that year.
(4) This maximum applicable rate may be 7% if the taxpayer chooses not to deduct
payments of federal tax liability.
(5) This rate is calculated as a percentage of the highest federal personal
income tax rate of 39.6%.
(6) The rate shown includes the maximum surtax imposed by this state of 6% of
federal personal income tax liability.
(7) The maximum applicable rate may be 14% of adjusted federal personal income
tax liability if the state tax calculated on that basis is less than the
state tax calculated on the basis of the rate shown above.
(8) An alternate basic tax may be assessed if greater than the tax calculated on
the basis of the rate shown above.
S-6
<PAGE>
NUVEEN UNIT TRUSTS
INFORMATION SUPPLEMENT
NUVEEN INSURED CORPORATE TRUST SERIES 1 (LONG-TERM)
The Information Supplement provides additional information concerning the
structure and operations of a Nuveen Unit Trust not found in the prospectuses
for the Trusts. This Information Supplement is not a prospectus and does not
include all of the information that a prospective investor should consider
before investing in a Trust. This Information Supplement should be read in
conjunction with the prospectus for the Trust in which an investor is
considering investing ("PROSPECTUS"). Copies of the Prospectus can be obtained
by calling or writing the Trustee at the telephone number and address indicated
in Part B of the Prospectus. This Information Supplement has been created to
supplement information contained in the Prospectus.
This Information Supplement is dated . Capitalized terms have
been defined in the Prospectus.
TABLE OF CONTENTS
<TABLE>
<S> <C>
ACCUMULATION PLAN...................................................................... 2
INFORMATION ABOUT THE SPONSOR.......................................................... 3
DESCRIPTION OF RATINGS................................................................. 5
</TABLE>
S-1
<PAGE>
ACCUMULATION PLAN
The Sponsor, John Nuveen & Co. Incorporated, is also the principal
underwriter of the Accumulation Funds listed in the following table. Each of
these funds is an open-end, diversified management investment company into which
Unitholders may choose to reinvest Trust distributions automatically, without
any sales charge. Unitholders may reinvest both interest and principal
distributions or principal distributions only. Each Accumulation Fund has
investment objectives which differ in certain respects from those of the Trusts
and may invest in securities which would not be eligible for deposit in the
Trusts. The investment adviser to each Accumulation Fund is a wholly-owned
subsidiary of the Sponsor. Unitholders should contact their financial adviser or
the Sponsor to determine which of the Accumulation Funds they may reinvest into,
as reinvestment in certain of the Accumulation Funds may be restricted to
residents of a particular state or states. Unitholders may obtain a prospectus
for each Accumulation Fu
The following is a complete list of the Accumulation Funds currently
available, as of the Date of Deposit of this Prospectus, to Unitholders under
the Accumulation Plan. The list of available Accumulation Funds is subject to
change without the consent of any of the Unitholders.
ACCUMULATION FUNDS
MUTUAL FUNDS
NUVEEN FLAGSHIP MUNICIPAL TRUST
Nuveen Municipal Bond Fund
Nuveen Insured Municipal Bond Fund
Nuveen Flagship All-American Municipal Bond Fund
Nuveen Flagship Limited Term Municipal Bond Fund
Nuveen Flagship Intermediate Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST I
Nuveen Flagship Arizona Municipal Bond Fund
Nuveen Flagship Colorado Municipal Bond Fund
Nuveen Flagship Florida Municipal Bond Fund
Nuveen Flagship Florida Intermediate Municipal Bond Fund
Nuveen Maryland Municipal Bond Fund
Nuveen Flagship New Mexico Municipal Bond Fund
Nuveen Flagship Pennsylvania Municipal Bond Fund
Nuveen Flagship Virginia Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST II
Nuveen California Municipal Bond Fund
Nuveen California Insured Municipal Bond Fund
Nuveen Flagship Connecticut Municipal Bond Fund
Nuveen Massachusetts Municipal Bond Fund
Nuveen Massachusetts Insured Municipal Bond Fund
Nuveen Flagship New Jersey Municipal Bond Fund
Nuveen Flagship New Jersey Intermediate Municipal Bond Fund
Nuveen Flagship New York Municipal Bond Fund
Nuveen New York Insured Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST III
Nuveen Flagship Alabama Municipal Bond Fund
Nuveen Flagship Georgia Municipal Bond Fund
Nuveen Flagship Louisiana Municipal Bond Fund
Nuveen Flagship North Carolina Municipal Bond Fund
S-2
<PAGE>
Nuveen Flagship South Carolina Municipal Bond Fund
Nuveen Flagship Tennessee Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST IV
Nuveen Flagship Kansas Municipal Bond Fund
Nuveen Flagship Kentucky Municipal Bond Fund
Nuveen Flagship Kentucky Limited Term Municipal Bond Fund
Nuveen Flagship Michigan Municipal Bond Fund
Nuveen Flagship Missouri Municipal Bond Fund
Nuveen Flagship Ohio Municipal Bond Fund
Nuveen Flagship Wisconsin Municipal Bond Fund
Flagship Utility Income Fund
Nuveen Growth and Income Stock Fund
MONEY MARKET FUNDS
Nuveen California Tax-Free Money Market Fund
Nuveen Massachusetts Tax-Free Money Market Fund
Nuveen New York Tax-Free Money Market Fund
Nuveen Tax-Free Reserves, Inc.
Nuveen Tax-Exempt Money Market Fund, Inc.
Each person who purchases Units of a Trust may become a participant in the
Accumulation Plan and elect to have his or her distributions on Units of the
Trust invested directly in shares of one of the Accumulation Funds. Reinvesting
Unitholders may select any interest distribution plan. Thereafter, each
distribution of interest income or principal on the participant's Units
(principal only in the case of a Unitholder who has chosen to reinvest only
principal distributions) will, on the applicable distribution date, or the next
day on which the New York Stock Exchange is nominally open ("BUSINESS DAY") if
the distribution date is not a business day, automatically be received by the
transfer agent for each of the Accumulation Funds, on behalf of such participant
and applied on that date to purchase shares (or fractions thereof) of the
Accumulation Fund chosen at net asset value as computed as of 4:00 p.m. eastern
time on each such date. All distributions will be reinvested in the Accumulation
Fund chosen and no part thereof will be retained in a separate account. These
purchases will be made without a sales charge.
The Transfer Agent of the Accumulation Fund will mail to each participant in
the Accumulation Plan a quarterly statement containing a record of all
transactions involving purchases of Accumulation Fund shares (or fractions
thereof) with Trust interest distributions or as a result of reinvestment of
Accumulation Fund dividends. Any distribution of principal used to purchase
shares of an Accumulation Fund will be separately confirmed by the Transfer
Agent. Unitholders will also receive distribution statements from the Trustee
detailing the amounts transferred to their Accumulation Fund accounts.
Participants may at any time, by so notifying the Trustee in writing, elect
to change the Accumulation Fund into which their distributions are being
reinvested, to change from principal only reinvestment to reinvestment of both
principal and interest or vice versa, or to terminate their participation in the
Accumulation Plan altogether and receive future distributions on their Units in
cash. There will be no charge or other penalty for such change of election or
termination. The character of Trust distributions for income tax purposes will
remain unchanged even if they are reinvested in an Accumulation Fund.
INFORMATION ABOUT THE SPONSOR
Founded in 1898, Nuveen is the oldest and largest investment banking firm
specializing in the underwriting and distribution of tax-exempt securities and
maintains the largest research department in
S-3
<PAGE>
the investment banking community devoted exclusively to the analysis of
municipal securities. In 1961, Nuveen began sponsoring the Nuveen Tax-Free Unit
Trust and since that time has issued more than $36 billion in tax-exempt unit
trusts, including over $12 billion in tax-exempt insured unit trusts. The
Sponsor is also principal underwriter of the registered open-end investment
companies set forth herein under "Accumulation Plan" as well as for the Golden
Rainbow A James Advised Mutual Fund, and acted as co-managing underwriter of
Nuveen Municipal Value Fund, Inc., Nuveen California Municipal Value Fund, Inc.,
Nuveen New York Municipal Value Fund, Inc., Nuveen Municipal Income Fund, Inc.,
Nuveen Premium Income Municipal Fund, Inc., Nuveen Performance Plus Municipal
Fund, Inc., Nuveen California Performance Plus Municipal Fund, Inc., Nuveen New
York Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund,
Inc., Nuveen Municipal Market Opportunity Fund, Inc. Nuveen California Municipal
Market Opportunity Fund, Inc., Nuveen Investment Quality Municipal Fund, Inc.,
Nuveen California Investment Quality Municipal Fund, Inc., Nuveen New York
Investment Quality Municipal Fund, Inc., Nuveen Insured Quality Municipal Fund,
Inc., Nuveen Florida Investment Quality Municipal Fund, Nuveen Pennsylvania
Investment Quality Municipal Fund, Nuveen New Jersey Investment Quality
Municipal Fund, Inc., and the Nuveen Select Quality Municipal Fund, Inc., Nuveen
California Select Quality Municipal Fund, Inc., Nuveen New York Select Quality
Municipal Fund, Inc., Nuveen Quality Income Municipal Fund, Inc., Nuveen Insured
Municipal Opportunity Fund, Inc., Nuveen Florida Quality Income Municipal Fund,
Nuveen Michigan Quality Income Municipal Fund, Inc., Nuveen Ohio Quality Income
Municipal Fund, Inc., Nuveen Texas Quality Income Municipal Fund, Nuveen
California Quality Income Municipal Fund, Inc., Nuveen New York Quality Income
Municipal Fund, Inc., Nuveen Premier Municipal Income Fund, Inc., Nuveen Premier
Insured Municipal Income Fund, Inc., Nuveen Select Tax-Free Income Portfolio,
Nuveen Select Tax-Free Income Portfolio 2, Nuveen Insured California Select
Tax-Free Income Portfolio, Nuveen Insured New York Select Tax-Free Income
Portfolio, Nuveen Premium Income Municipal Fund 2, Inc., Nuveen Select Tax-Free
Income Portfolio 3, Nuveen Select Maturities Municipal Fund, Nuveen Insured
California Premium Income Municipal Fund, Inc., Nuveen Arizona Premium Income
Municipal Fund, Inc., Nuveen Insured Florida Premium Income Municipal Fund,
Nuveen Michigan Premium Income Municipal Fund, Inc., Nuveen New Jersey Premium
Income Municipal Fund, Inc., Nuveen Insured New York Premium Income Municipal
Fund, Inc., Nuveen Premium Income Municipal Fund 4, Inc., Nuveen Pennsylvania
Premium Income Municipal Fund 2, Nuveen Maryland Premium Income Municipal Fund,
Nuveen Virginia Premium Income Municipal Fund, Nuveen Massachusetts Premium
Income Municipal Fund, Nuveen Insured California Premium Income Municipal Fund
2, Inc., Nuveen Washington Premium Income Municipal Fund, Nuveen Georgia Premium
Income Municipal Fund, Nuveen Missouri Premium Income Municipal Fund, Nuveen
Connecticut Premium Income Municipal Fund, Nuveen North Carolina Premium Income
Municipal Fund, Nuveen California Premium Income Municipal Fund, Nuveen Insured
Premium Income Municipal Fund 2, all registered closed-end management investment
companies. These registered open-end and closed-end investment companies
currently have approximately $35 billion in securities under management. Over
1,000,000 individuals have invested to date in Nuveen's tax-exempt funds and
trusts. Nuveen is a subsidiary of The John Nuveen Company which, in turn, is
approximately 78% owned by the St. Paul Companies, Inc. ("ST. PAUL"). St. Paul
is located in St. Paul, Minnesota and is principally engaged in providing
property-liability insurance through subsidiaries. Nuveen is a member of the
National Association of Securities Dealers, Inc. and the Securities Industry
Association and has its principal offices located in Chicago (333 West Wacker
Drive) and New York (Swiss Bank Tower, 10 East 50th Street). Nuveen maintains 11
regional offices.
To help advisers and investors better understand and more efficiently use an
investment in the Trust to reach their investment goals, the Trust's sponsor,
John Nuveen & Co. Incorporated, may advertise and create specific investment
programs and systems. For example, such activities may include presenting
information on how to use an investment in the Trust, alone or in combination
with an investment in other mutual funds or unit investment trusts sponsored by
Nuveen, to accumulate assets for future education needs or periodic payments
such as insurance premiums. The Trust's sponsor may produce software or
S-4
<PAGE>
additional sales literature to promote the advantages of using the Trust to meet
these and other specific investor needs.
The Sponsor offers a program of advertising support to registered
broker-dealer firms, banks and bank affiliates ("FIRMS") that sell Trust Units
or shares of Nuveen Open-End Mutual Funds (excluding money-market funds)
("FUNDS"). Under this program, the Sponsor will pay or reimburse the Firm for up
to one half of specified media costs incurred in the placement of advertisements
which jointly feature the Firm and the Nuveen Funds and Trusts. Reimbursements
to the Firm will be based on the number of the Firm's registered representatives
who have sold Fund Shares and/or Trust Units during the prior calendar year
according to an established schedule. Reimbursements under this program will be
made by the Sponsor and not by the Funds or Trusts.
DESCRIPTION OF RATINGS
Standard & Poor's Corporation;. A description of the applicable Standard &
Poor's Corporation rating symbols and their meanings follows:
A Standard & Poor's rating is a current assessment of the creditworthiness
of an obligor with respect to a specific debt obligation. This assessment may
take into consideration obligors such as guarantors, insurers or lessees.
The rating is not a recommendation to purchase, sell or hold a security,
inasmuch as it does not comment as to market price or suitability for a
particular investor.
The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. Standard
& Poor's does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in, or unavailability of, such
information, or for other circumstances.
The ratings are based, in varying degrees, on the following considerations:
I. Likelihood of default--capacity and willingness of the obligor as to
the timely payment of interest and repayment of principal in accordance with
the terms of the obligation;
II. Nature of and provisions of the obligation;
III. Protection afforded by, and relative position of, the obligation
in the event of bankruptcy, reorganization or other arrangements under the
laws of bankruptcy and other laws affecting creditors' rights.
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.
AA--Bonds rated AA have a very strong capacity to pay interest and repay
principal, and differ from the highest rated issues only in small degree.
A--Bonds rated A have a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in the higher rated categories.
PLUS (+) OR MINUS (-): The ratings from "AA" to "BB" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
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PROVISIONAL RATINGS: The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of the
project being financed by the issuance of the bonds being rated and indicates
that payment of debt service requirements is largely or entirely dependent upon
the successful and timely completion of the project. This rating, however, while
addressing credit quality subsequent to completion of the project, makes no
comment on the likelihood of, or the risk of default upon failure of, such
completion. Accordingly, the investor should exercise his own judgment with
respect to such likelihood and risk.
NOTE RATINGS: A Standard & Poor's note rating reflects the liquidity
concerns and market access risks unique to notes. Notes due in 3 years or less
will likely receive a note rating. Notes maturing beyond 3 years will most
likely receive a long-term debt rating.
Note rating symbols are as follows:
SP-1 Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will
be given a plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
RATINGS OF INSURED TRUST UNITS
A Standard & Poor's rating on the units of an insured investment trust
(hereinafter referred to collectively as 'units' and 'trusts') is a current
assessment of creditworthiness with respect to the investment held by such
trust. This assessment takes into consideration the financial capacity of the
issuers and of any guarantors, insurers, lessees or mortgagors with respect to
such investments. The assessment, however, does not take into account the extent
to which trust expenses or portfolio asset sales for less than the trust
purchase price will reduce payment to the unitholder of the interest and
principal required to be paid on the portfolio assets. In addition, the rating
is not a recommendation to purchase, sell or hold units, inasmuch as the rating
does not comment as to market price of the units or suitability for a particular
investor.
Units rated "AAA" are composed exclusively of assets that are rated "AAA" by
Standard & Poor's and/ or certain short-term investments. Standard & Poor's
defines its AAA rating for such assets as the highest rating assigned by
Standard & Poor's to a debt obligation. Capacity to pay interest and repay
principal is very strong. However, unit ratings may be subject to revision or
withdrawal at any time by Standard & Poor's and each rating should be evaluated
independently of any other rating.
MOODY'S INVESTORS SERVICE, INC. A brief description of the applicable
Moody's Investors Service, Inc. rating symbols and their meanings follows:
Aaa--Bonds which are rated Aaa are judged to be the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues. Their safety is so absolute that,
with the occasional exception of oversupply in a few specific instances,
characteristically, their market value is affected solely by money market
fluctuations.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuations of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities. Their market value is virtually immune to all but money market
influences, with the occasional exception of oversupply in a few specific
instances.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered
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adequate, but elements may be present which suggest a susceptibility to
impairment sometime in the future. The market value of A-rated bonds may be
influenced to some degree by economic performance during a sustained period of
depressed business conditions, but, during periods of normalcy, A-rated bonds
frequently move in parallel with Aaa and Aa obligations, with the occasional
exception of oversupply in a few specific instances.
Moody's bond rating symbols may contain numerical modifiers of a generic
rating classification. The modifier 1 indicates that the bond ranks at the high
end of its category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the lower end of its generic rating
category.
Baa--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. The market value of Baa-rated
bonds is more sensitive to changes in economic circumstances, and aside from
occasional speculative factors applying to some bonds of this class, Baa market
valuations move in parallel with Aaa, Aa and A obligations during periods of
economic normalcy, except in instances of oversupply.
Con. (--)--Bonds for which the security depends upon the completion of some
act or the fulfillment of some condition are rated conditionally. These are
bonds secured by (a) earnings of projects under construction, (b) earnings of
projects unseasoned in operation experience, (c) rentals which begin when
facilities are completed, or (d) payments to which some other limiting condition
attaches. Parenthetical rating denotes probable credit stature upon completion
of construction or elimination of basis of condition.
NOTE RATINGS:
MIG 1--This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG 2--This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
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CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
The Depositor has obtained the following Stockbrokers Blanket Bonds for
its officers, directors and employees:
INSURER/POLICY NO. AMOUNT
United Pacific Insurance Co. $10,000,000
Reliance Insurance Company
B 74 92 20
Aetna Casualty and Surety $10,000,000
08 F10618BCA
St. Paul Insurance Co. $ 6,000,000
400 HC 1051
<PAGE>
B. This Registration Statement comprises the following papers and documents:
The facing sheet
The Prospectus
The signatures
Consents of Counsel
The following exhibits:
1.1(a) Copy of Standard Terms and Conditions of Trust between John Nuveen &
Co. Incorporated, Depositor, and The Chase Manhattan Bank, Trustee
(to be supplied by amendment).
1.1(b) Trust Indenture and Agreement (to be supplied by amendment).
1.2* Copy of Certificate of Incorporation, as amended, of John Nuveen &
Co. Incorporated, Depositor.
1.3** Copy of amendment of Certificate of Incorporation changing name of
Depositor to John Nuveen & Co. Incorporated.
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1(a) and
incorporated herein by reference).
3.1 Opinion of counsel as to legality of securities being registered (to
be supplied by amendment).
3.2 Opinion of counsel as to Federal income tax status of securities
being registered (to be supplied by amendment).
4.1 Consent of Standard & Poor's Corporation (to be supplied by
amendment).
4.2 Consent of Kenny S & P Evaluation Services (to be supplied by
amendment).
4.3 Consent of Carter, Ledyard & Milburn (to be supplied by amendment).
6.1 List of Directors and Officers of Depositor (to be supplied
by amendment).
_________
* Incorporated by reference to Form N-8B-2 (File No. 811-1547) filed on
behalf of Nuveen Tax-Free Unit Trust, Series 16.
** Incorporated by reference to Form N-8B-2 (File No. 811-2198) filed on
behalf of Nuveen Tax-Free Unit trust, Series 37.
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C. EXPLANATORY NOTE
The Registration Statement will contain multiple separate prospectuses.
Each Prospectus will relate to an individual unit investment trust and will
consist of a Part A, a Part B and an Information Supplement. Each prospectus
will be identical with the exception of the respective Part A which will
contain the financial information specific to such underlying unit investment
trust.
D. UNDERTAKINGS
1. With the exception of the information included in the appendices to
the Information Supplement, which will vary depending upon the make-up of a
Fund or updated to reflect current events, any amendment to a Fund's
Information Supplement will be subject to the review of the staff of the
Securities and Exchange Commission prior to distribution; and
2. The Information Supplement to the Trust will not include third party
financial information.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Nuveen Unit Trust, Series 1, has duly caused this Amendment No. 1
to the Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized in the City of Chicago and State of Illinois on
May 20, 1997.
NUVEEN UNIT TRUST, SERIES 1
(Registrant)
BY JOHN NUVEEN & CO. INCORPORATED
(Depositor)
By Larry W. Martin
---------------------------------
Vice President
Attest Morrison C. Warren
-----------------------------
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
SIGNATURE TITLE* DATE
Timothy R. Schwertfeger Chairman, Board of Directors )
Chief Executive Officer )
and Director )
Anthony T. Dean President, Chief Operating ) Larry W. Martin
Officer and Director ) ---------------
) Larry W. Martin
) Attorney-in-Fact**
John P. Amboian Chief Financial Officer and ) May 20, 1997
Executive Vice President )
O. Walter Renfftlen Vice President and Controller )
(Principal Accounting Officer))
___________
* The titles of the persons named herein represent their capacity in and
relationship to John Nuveen & Co. Incorporated, the Depositor.
** The powers of attorney for Messrs. Amboian, Renfftlen, Dean and
Schwertfeger were filed as Exhibit 6 to Form N-8B-2 (File No. 811-08103).
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CONSENT OF CHAPMAN AND CUTLER
The consent of Chapman and Cutler to the use of its name in the
Prospectus included in this Registration Statement will be contained in its
opinions to be filed as Exhibits 3.1 and 3.2 to the Registration Statement.
CONSENT OF STANDARD & POOR'S CORPORATION
The consent of Standard & Poor's Corporation to the use of its name in
the Prospectus included in this Registration Statement will be filed as
Exhibit 4.1 to the Registration Statement.
CONSENT OF KENNY S & P EVALUATION SERVICES
The consent of Kenny S & P Evaluation Services to the use of its name in
the Prospectus included in this Registration Statement will be filed as
Exhibit 4.2 to the Registration Statement.
CONSENT OF CARTER, LEDYARD & MILBURN
The consent of Carter, Ledyard & Milburn to the use of its name in the
Prospectus included in this Registration Statement will be filed as Exhibit
4.3 to the Registration Statement.
CONSENT OF ARTHUR ANDERSEN LLP
The consent of Arthur Andersen LLP to the use of its report and to the
reference to such firm in the Prospectus included in this Registration
Statement will be filed by amendment.
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MEMORANDUM
Re: Nuveen Unit Trust, Series 1
----------------------------
The list of securities comprising each trust of the fund, the
evaluation, record and distribution dates and other changes pertaining
specifically to the new series, such as size and number of units of the
trusts in the fund and the statement of condition of the new fund will be
filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
Form N-8A and Form N-8B-2 were filed in respect of Nuveen Unit Trust
Series 1 (File No. 811-08103).
1933 ACT
THE INDENTURE
The form of the proposed Trust Indenture and Agreement is expected to be
filed with the amendment to Nuveen Unit Trust, Series 1.
Chicago, Illinois
May 20, 1997
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