NUVEEN UNIT TRUSTS
SERIES 3
Nuveen Investment Grade Corporate Trust, Series 2 (Long-Term) 29,000 Units
FIXED INCOME PROSPECTUS - PART TWO
DATED FEBRUARY 28, 1999
NOTE: This Prospectus Part Two may not be distributed unless accompanied
by Part One.
Currently Offered at Public Offering Price plus interest accrued to the date of
settlement. Minimum purchase -- either $5,000 or 50 Units ($1,000 or 10 Units
for Traditional and Roth IRA purchases and $500 or nearest whole number of Units
whose value is less than $500 for Education IRA purchases), whichever is less.
THE UNITS of fractional undivided interest in the Nuveen Unit Trusts being
offered hereby are issued and outstanding Units that have been reacquired by
John Nuveen & Co. Incorporated either by purchase of Units tendered to the
Trustee for redemption or by purchase in the open market. The price paid in each
instance was not less than the Redemption Price determined as provided in Part
One under the caption "How Units May Be Redeemed Without Charge." The Units are
being offered at the Public Offering Price computed in the manner described in
Part One under the caption "Public Offering Price." Any profit or loss resulting
from the sale of Units will accrue to John Nuveen & Co. Incorporated and no
proceeds from the sale will be received by the Trusts.
The objective of the Investment Grade Corporate Trust is to provide a high level
of current income through investing in a portfolio consisting primarily of
investment grade corporate debt obligations issued after July 18, 1984. The
trust may also contain U.S. Treasury obligations (which as of the initial date
of deposit represented less than 20% of the principal amount of the Securities
deposited in the Trust).
The Trust is 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.
<PAGE>
ESSENTIAL INFORMATION REGARDING THE TRUST
As of February 28, 1999
Sponsor and Evaluator......John Nuveen & Co. Incorporated
Trustee......The Chase Manhattan Bank
The income, expense and distribution data set forth below have been
calculated for Unitholders electing to receive monthly distributions.
Unitholders choosing distributions quarterly or semi-annually will receive a
slightly higher net annual interest income because of the lower Trustee's fees
and expenses under such plans.
<TABLE>
<CAPTION>
INVESTMENT
GRADE
CORPORATE TRUST,
SERIES 2
-----------------
<S> <C>
Principal Amount of Bonds in Trust........................................................... $2,900,000
Number of Units.............................................................................. 29,000
Fractional Undivided Interest in Trust Per Unit.............................................. 1/29,000
Public Offering Price --
Less than 1,000 Units
Aggregate Bid Price of Bonds in Trust................................................... $2,859,250
Plus Sales Charge (1)................................................................... $166,320
Total................................................................................. $3,025,570
Divided by Number of Units.............................................................. $104.33
Plus Cash Per Unit(2)................................................................... $0
Public Offering Price Per Unit(3)....................................................... $104.33
Redemption Price Per Unit (exclusive of accrued interest).................................... $98.59
Sponsor's Repurchase Price Per Unit (exclusive of accrued interest).......................... $98.59
Excess of Public Offering Price Per Unit over Redemption Price Per Unit...................... $5.74
Excess of Public Offering Price Per Unit over Sponsor's Repurchase Price Per Unit $5.74
Par Value Per Unit(4)........................................................................ $100.00
Calculation of Net Annual Interest Income Per Unit...........................................
Annual Interest Income.................................................................. $6.9806
Less Estimated Annual Expense........................................................... $.2342
Net Annual Interest Income.............................................................. $6.7464
Daily Rate of Accrual Per Unit............................................................... $.01874
Trustee's Annual Fee per $1,000 principal(6)................................................. $1.6286
Estimated Current Return(5).................................................................. 6.47%
Estimated Long Term Return(5)................................................................ 6.51%
</TABLE>
Evaluations for purpose of sale, purchase or redemption of Units are made as of
the close of trading on the New York Stock Exchange next following receipt by
John Nuveen & Co. Incorporated of an order for a sale or purchase of units or
receipt by the Trustee of units tendered for redemption.
<PAGE>
ESSENTIAL INFORMATION REGARDING THE TRUST(S)
(CONTINUED)
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Record Dates.........................................................See "Distributions to Unitholders" in Part One
Distribution Dates...................................................See "Distributions to Unitholders" in Part One
Minimum Principal Distribution.......................................................................$0.10 per Unit
Date Trust Established.............................................................................November 5, 1997
Mandatory Termination Date.................................See "Amendment and Termination of Indenture" in Part One
Minimum Value of Trust.....................................See "Amendment and Termination of Indenture" in Part One
Sponsor's Annual Evaluation Fee..........................................$0.170 per $1000 principal amount of Bonds
</TABLE>
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(1) See "Public Offering Price" in Part One for the method by which the sales
charge is calculated.
(2) This amount represents cash held by the Trust (or an advancement of cash to
the Trust by the Trustee) which may amount to less than $0.01 per Unit and
is added to (or deducted from) the Public Offering Price.
(3) Units are offered at the Public Offering Price plus accrued interest to the
date of settlement (three business days after purchase). On the above date
there was added to the Public Offering Price of the Trust, $104.33, accrued
interest to the settlement date of $.06 for a total price of $104.39.
(4) Par value per Unit is each Unit's pro rata share of aggregate principal
amount of Bonds in the Trust adjusted to reflect cash, if any, held in or
advanced to the Principal Account.
(5) See "Estimated Long Term Return and Estimated Current Return" in Part One
for an explanation of these returns.
(6) The Trustee's Annual Fee per $1000 principal amount of Bonds set forth
above is calculated for Unitholders electing the monthly plan of
distribution. The Trustee's Annual Fee per $1000 principal amount of
Bonds for the Trust, will be $1.3086 under the quarterly distribution
option and $1.1186 under the semi-annual distribution option.
<PAGE>
NUVEEN UNIT TRUSTS, SERIES 3
NUVEEN INVESTMENT GRADE CORPORATE TRUST, SERIES 2 (LONG-TERM)
STATEMENT OF NET ASSETS
October 31, 1998
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments in securities, at market value
(Cost $2,801,693) (Note 1)..................................................... $2,949,688
Accrued interest receivable....................................................... 39,445
Other assets...................................................................... 3,480
-----------
Total assets.......................................................... 2,992,613
===========
LIABILITIES:
Advance from trustee.............................................................. 17,726
Accrued trustee and evaluator fees................................................ -
Other accrued liabilities......................................................... 2,000
-----------
Total liabilities.................................................... 19,726
-----------
Net assets, applicable to 29,000 units of fractional undivided
interest outstanding.............................................. $2,972,887
===========
NET ASSETS, REPRESENTED BY:
Cost to original investors of 29,000 units sold................................... $2,943,784
Less initial underwriting commission (Note 1)................................. (144,233)
-----------
2,799,551
Undistributed net investment income............................................... 25,341
Unrealized appreciation of investments............................................ 147,995
-----------
$2,972,887
===========
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER UNIT:
NET ASSET VALUE PER UNIT
----------------------------
BEFORE
TYPE OF UNITS ACCRUED ACCRUED
INCOME DISTRIBUTION OUTSTANDING INTEREST INTEREST TOTAL
------------------- ----------- -------- -------- -----
<S> <C> <C> <C> <C>
Monthly............................... 24,615 $101.64 .54 $102.18
Quarterly............................. 2,275 $101.64 1.68 $103.32
Semi-Annual........................... 2,110 $101.64 3.38 $105.02
------- ======= ==== =======
29,000
======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
NUVEEN UNIT TRUSTS, SERIES 3
NUVEEN INVESTMENT GRADE CORPORATE TRUST, SERIES 2 (LONG-TERM)
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
FOR THE PERIOD NOVEMBER 5, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH OCTOBER 31, 1998
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
<S> <C>
Investment income (Note 1):
Interest income.............................................................. $201,769
--------
Expenses (Note 3):
Trustee fees and expenses................................................ 6,237
Evaluator fees........................................................... 484
Other expenses........................................................... 870
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Total expenses...................................................... 7,591
---------
Net investment income........................................... 194,178
Net change in unrealized appreciation or
depreciation of investments.................................................. 147,995
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Net increase in net assets
from operations............................................................... $342,173
========
STATEMENT OF CHANGES IN NET ASSETS
Operations:
Net investment income........................................................ $194,178
Net change in unrealized appreciation or
depreciation of investments................................................ 147,995
----------
Net increase in net assets
from operations.............................................. 342,173
Distributions to unitholders from net investment income........................... (168,837)
------------
Total increase in net assets...................................................... 173,336
Net assets at beginning of period (Note 1)........................................ 2,799,551
-------------
Net assets at end of period (including undistributed net income of $25,341)....... $2,972,887
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
NUVEEN UNIT TRUSTS, SERIES 3
NUVEEN INVESTMENT GRADE CORPORATE TRUST, SERIES 2 (LONG-TERM)
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
<TABLE>
<CAPTION>
OPTIONAL RATINGS(2) CARRYING
REDEMPTION ---------------------- VALUE
PROVISIONS STANDARD AT MARKET
PRINCIPAL NAME OF ISSUER AND TITLE OF ISSUE (1) COUPON MATURITY & POOR'S MOODY'S (BID PRICES)
--------- --------------------------------- ------------------------- -------- -------- ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$250,000 Banc One Corporation No Optional Call 7.625% Due 10-15-26 A+ A1 $271,875
250,000 Bellsouth Telecommunications Company 2005 at $103.66 7.625% Due 5-15-35 AAA Aaa 275,625
250,000 Cincinnati Gas & Electric Company 2003 at $103.54 7.200% Due 10-1-23 A- A3 258,750
250,000 GTE Corporation 2007 at $103.95 7.900% Due 2-1-27 B Baa1 290,625
250,000 Loews Corporation 2003 at $102.39 7.000% Due 10-15-23 AA- A1 246,875
250,000 New York Telephone Co. 2004 at $103.06 7.250% Due 2-15-24 A A2 262,187
250,000 Pacific Bell Telephone Co. 2003 at $103.37 7.375% Due 6-15-25 AA- A1 273,750
250,000 Philip Morris Companies No Optional Call 7.750% Due 1-15-27 A A2 275,625
250,000 Sears Roebuck & Company 2007 at $103.68 7.500% Due 10-15-27 A- A2 260,000
250,000 Texaco, Inc. 2003 at $102.11 6.875% Due 8-15-23 A+ A1 245,313
150,000 U.S. Treasury STRIP (3) No Optional Call 0.000% Due 11-15-21 NR NR 40,313
250,000 U.S. West Communications 2003 at $101.95 6.875% Due 9-15-33 A Aa3 248,750
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$2,900,000 $2,949,688
========== ==========
</TABLE>
See accompanying notes to Financial Statements and Notes to Schedule of
Investments.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Investment Grade Corporate Trust commenced operations on
November 5, 1997 with the initial deposit of 29,000 units having a value
of $2,799,551.
The Trustee is responsible for maintaining the books and records of the
Trust on a cash basis and for safekeeping securities owned by the Trust. The
Sponsor is responsible for preparation of the financial statements in accordance
with generally accepted accounting principles based upon the books and records
provided by the Trustee. The following is a summary of the significant
accounting policies followed by the Trust.
Security Valuation -- The Bonds are reflected at market value in the
accompanying statement of net assets. The Sponsor determines the market price of
the Bonds in the Trust (1) on the basis of current bid prices of the Bonds
obtained from dealers or brokers (including the Sponsor) who customarily deal in
bonds comparable to those held by the Trust, (2) if bid prices are not available
for any of the Bonds, on the basis of bid prices for comparable bonds, (3) by
causing the value of the Bonds to be determined by others engaged in the
practice of evaluating, quoting or appraising comparable bonds, or (4) by any
combination of the above.
Unit Valuation -- On the Date of Deposit, the Public Offering Price of
Units was determined by adding a sales charge to the Trustee's determination of
the offering price of the Bonds. The value of Units offered in the secondary
market maintained by the Sponsor is based upon the pro rata share of the bid
price of the Bonds, plus a sales charge determined in accordance with the table
set forth in Part One under the caption "Public Offering Price" based on the
number of years remaining to the maturity of each Bond and adjusted for cash, if
any, held or owed by such Trust.
The initial underwriting commission and investors' original cost of
Units, as shown on the statement of net assets, are based upon the assumption
that the maximum sales commission was charged for each initial purchase of
Units.
Income and Expenses -- Income and expenses are recognized on the
accrual basis of accounting. Gains and losses from Bond transactions are
determined on a specific identification basis.
2. INCOME TAX STATUS:
The trust is not an association taxable as a corporation for Federal
income tax purposes, and, therefore, has recorded no provision for Federal
income taxes. Each unitholder is considered to be the owner of a pro rata
portion of the Trust under Subpart E, subchapter J of Chapter 1 of the Internal
Revenue Code of 1986 and will have a taxable event each time the Trust disposes
of a bond.
<PAGE>
3. OPERATING EXPENSES:
See "Operating Expenses" in Part One of this Prospectus for information
with respect to trustee and evaluator fees and expenses.
4. USE OF ESTIMATES:
The preparation of the Trust's financial statements in conformity with
generally accepted accounting principles requires the Sponsor to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period.
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
1. The Bonds are first subject to optional redemption in the years,
and at the prices shown. Unless otherwise indicated, the Bonds, except for Bonds
issued at a substantial original issue discount, are redeemable at declining
prices (but not below par value) in subsequent years. Original issue discount
bonds are generally redeemable at prices based on the issue price plus the
amount of original issue discount accreted to redemption plus, if applicable,
some premium, the amount of which will decline in subsequent years. The Bonds
may also be subject to sinking fund redemption without premium prior to the
dates shown.
Certain Bonds may be subject to redemption without premium prior to the
date shown pursuant to special or mandatory call provisions; for example, if
bond proceeds are not able to be used as contemplated, the project is condemned
or sold, or the project is destroyed and insurance proceeds are used to redeem
the bonds. (See Part One, "Composition of Trusts.")
The Trustee's determination of the offering price of Bonds in the Trust
may be greater or less than the amounts that may be received upon redemption or
maturity of such Bonds. Subject to rules concerning amortization of bond premium
and of original issue discount, gain or loss realized by the Trustee on
disposition of any Bonds will be recognized as taxable capital gain or loss by
Unitholders. (See Part One, "Tax Status of Unitholders.")
2. The ratings shown, which are not covered by the report of
independent public accountants, are those assigned as of the date of the
Schedule of Investments.
3. 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.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of John Nuveen & Co. Incorporated and
Unitholders of Nuveen Unit Trusts, Series 3:
We have audited the accompanying statement of net assets and schedule
of investments of Nuveen Unit Trusts, Series 3 (consisting of Nuveen Investment
Grade Corporate Trust, Series 2 (Long-Term)), as of October 31, 1998 and the
related statements of operations and changes in net assets for the period
indicated on the face of the financial statements. These financial statements
are the responsibility of the Sponsor (See Note 1). 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. 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. In
addition, securities owned as of October 31, 1998 were confirmed by direct
correspondence with the Trustee. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Nuveen Unit
Trusts, Series 3 (Nuveen Investment Grade Corporate Trust, Series 2
(Long-Term)), as of October 31, 1998, the results of its operations and changes
in its net assets for the period indicated on the face of the financial
statements, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
February 28, 1998
<PAGE>
PROSPECTUS -- PART TWo
Part Two must be accompanied by Part One.
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Sponsor John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606
312-917-7700
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Swiss Bank Tower
10 East 50th Street
New York, New York 10022
212-207-2000
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Trustee The Chase Manhattan Bank
4 New York Plaza
New York, New York 10004-2413
800-257-8787
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Legal Counsel Chapman and Cutler
to Sponsor 111 West Monroe Street
Chicago, Illinois 60603
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Legal Counsel Carter, Ledyard & Milburn
to Trustee 2 Wall Street
New York, New York 10005
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Independent Arthur Andersen LLP
Public Accountants 33 West Monroe Street
for the Trust Chicago, Illinois 60603
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Except as to the 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 any
representations not contained in this Prospectus; and any information or
representation not contained herein must not be relied upon as having been
authorized by the Trust, 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 Trust is registered as a Unit Investment Trust under the Investment
Company Act of 1940. Such registration does not imply that the Trust or any of
its Units has been guaranteed, sponsored, recommended or approved by the United
States or any state or agency or officer thereof.
