File No. 333-48115
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
POST-EFFECTIVE
AMENDMENT NO. 2
TO
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
FT 248
DIVERSIFIED INCOME & GROWTH TRUST, 1998 SPRING SERIES
(Exact Name of Trust)
NIKE SECURITIES L.P.
(Exact Name of Depositor)
1001 Warrenville Road
Lisle, Illinois 60532
(Complete address of Depositor's principal executive offices)
NIKE SECURITIES L.P. CHAPMAN AND CUTLER
Attn: James A. Bowen Attn: Eric F. Fess
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
(Name and complete address of agents for service)
It is proposed that this filing will become effective (check
appropriate box)
: : immediately upon filing pursuant to paragraph (b)
: x : June 30, 2000
: : 60 days after filing pursuant to paragraph (a)
: : on (date) pursuant to paragraph (a) of rule (485 or 486)
<PAGE>
FT 248
DIVERSIFIED INCOME & GROWTH TRUST, 1998 SPRING SERIES
1,546,977 UNITS
PROSPECTUS
Part One
Dated June 28, 2000
Note: Part One of this Prospectus may not be distributed unless accompanied by
Part Two and Part Three.
The Trust
The Diversified Income & Growth Trust, 1998 Spring Series (the "Trust") is a
unit investment trust consisting of a portfolio containing common stocks. At
May 16, 2000, each Unit represented a 1/1,546,977 undivided interest in the
principal and net income of the Trust (see "The Trust" in Part Two).
The Units being offered by this Prospectus are issued and outstanding Units
which have been purchased by the Sponsor in the secondary market or from the
Trustee after having been tendered for redemption. The profit or loss
resulting from the sale of Units will accrue to the Sponsor. No proceeds from
the sale of Units will be received by the Trust.
Public Offering Price
The Public Offering Price per Unit is equal to the aggregate value of the
Securities in the Portfolio of the Trust, plus or minus cash, if any, in the
Income and Capital Accounts of the Trust divided by the number of Units
outstanding, plus a sales charge of 2.8% of the Public Offering Price (2.881%
of the net amount invested) excluding income and principal cash. At May 16,
2000, the Public Offering Price per Unit was $9.775 (see "Public Offering" in
Part Two). The minimum purchase is $1,000 ($500 for Individual Retirement
Accounts or other retirement plans).
Please retain all parts of this Prospectus for future reference.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
______________________________________________________________________________
NIKE SECURITIES L.P.
Sponsor
<PAGE>
FT 248
DIVERSIFIED INCOME & GROWTH TRUST, 1998 SPRING SERIES
SUMMARY OF ESSENTIAL INFORMATION AS OF MAY 16, 2000
Sponsor: Nike Securities L.P.
Evaluator: First Trust Advisors L.P.
Trustee: The Chase Manhattan Bank
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Number of Units 1,546,977
Fractional Undivided Interest in the Trust per Unit 1/1,546,977
Public Offering Price:
Aggregate Value of Securities in the Portfolio $14,657,302
Aggregate Value of Securities per Unit $9.475
Income and Principal cash (overdraft) in the Portfolio $41,063
Income and Principal cash (overdraft) per Unit $.027
Sales Charge 2.881% (2.8% of Public Offering Price,
excluding income and principal cash) $.273
Public Offering Price per Unit $9.775
Redemption Price and Sponsor's Repurchase Price per
Unit ($.273 less than the Public Offering Price
per Unit) $9.502
</TABLE>
Date Trust Established April 1, 1998
Mandatory Termination Date March 30, 2001
Evaluator's Annual Fee: $.0030 per Unit outstanding. Evaluations for
purposes of sale, purchase or redemption of Units are made as of the close of
trading (4:00 p.m. Eastern time) on the New York Stock Exchange on each day
on which it is open.
Supervisory fee payable to Maximum of $.0035 per
an affiliate of the Sponsor Unit outstanding annually
Bookkeeping and administrative expenses Maximum of $.0010 per
payable to the Sponsor Unit outstanding annually
Annual amortization of organization
and offering costs $12,641 annually
Trustee's Annual Fee: $.0096 per Unit outstanding.
Capital Distribution Record Date and Distribution Date: Distributions from
the Capital Account will be made monthly payable on the last day of the month
to Unit holders of record on the fifteenth day of such month if the amount
available for distribution equals at least $.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be made in
December of each year.
Income Distribution Record Date: Fifteenth day of each March, June, September
and December.
Income Distribution Date: The last day of each March, June, September and
December.
A Unit holder who owns at least 2,500 Units may request an "In-Kind
Distribution" upon redemption or upon termination of the Trust. See "Rights
of Unit Holders - How are Income and Capital Distributed?" in Part Two.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Unit Holders of FT 248,
Diversified Income & Growth
Trust, 1998 Spring Series
We have audited the accompanying statement of assets and liabilities,
including the portfolio, of FT 248, Diversified Income & Growth Trust, 1998
Spring Series as of February 29, 2000, and the related statements of
operations and changes in net assets for the year then ended and for the
period from the Initial Date of Deposit, April 1, 1998, to February 28, 1999.
These financial statements are the responsibility of the Trust's Sponsor. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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 securities owned as of
February 29, 2000, 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FT 248, Diversified Income &
Growth Trust, 1998 Spring Series at February 29, 2000, and the results of its
operations and changes in its net assets for the year then ended and for the
period from the Initial Date of Deposit, April 1, 1998, to February 28, 1999,
in conformity with accounting principles generally accepted in the United
States.
ERNST & YOUNG LLP
Chicago, Illinois
June 9, 2000
<PAGE>
FT 248
DIVERSIFIED INCOME & GROWTH TRUST, 1998 SPRING SERIES
STATEMENT OF ASSETS AND LIABILITIES
February 29, 2000
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Securities, at market value (cost, $15,564,269)
(Note 1) $14,119,271
Dividends receivable 36,501
Unamortized deferred organization and offering costs 13,714
Cash 130,423
Receivable from investment transactions 86,368
___________
14,386,277
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C>
Accrued liabilities 5,478
Unit redemptions payable 86,049
__________
91,527
__________
Net assets, applicable to 1,736,225 outstanding
units of fractional undivided interest:
Cost of Trust assets (Note 1) $15,564,269
Net unrealized depreciation (Note 2) (1,444,998)
Distributable funds 822,067
Less deferred sales charges paid (Note 3) (646,588)
___________
$14,294,750
===========
Net asset value per unit $8.233
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 248
DIVERSIFIED INCOME & GROWTH TRUST, 1998 SPRING SERIES
PORTFOLIO - See notes to portfolio.
February 29, 2000
<TABLE>
<CAPTION>
Number of Market
shares Name of Issuer of Equity Securities value
<C> <S> <C>
Capital Goods
20,804 W.H. Brady Company $564,309
8,088 General Electric Corporation 1,069,137
13,920 Hubbell, Inc. (Class B) 338,437
Consumer Non-Durables
15,340 Hannaford Brothers Company 1,092,975
11,963 H.J. Heinz Company 382,074
14,173 Newell Rubbermaid, Inc.
(formerly Newell Companies) 327,751
16,311 PepsiCo, Inc. 526,030
Consumer Cyclical
11,166 Johnson Controls, Inc. 595,985
Energy
22,411 (1) Exxon Mobil Corporation 1,687,840
11,475 Texaco, Inc. 544,351
Banks
10,634 Bank One Corporation 274,495
REITs
27,860 CBL & Associates Properties, Inc. 623,367
24 Prison Realty Corporation 123
20,100 CenterPoint Properties Trust 729,891
16,364 Spieker Properties, Inc. 656,605
Healthcare
18,144 Abbott Laboratories 594,216
13,996 American Home Products Corporation 608,826
10,722 Merck & Co., Inc. 660,078
20,450 (2) Pfizer, Inc. 656,956
Retail
16,335 (3) May Department Stores Company 427,781
Utilities
26,555 American States Water Company 715,339
19,598 CMS Energy Corporation (Class G) 328,267
16,761 Florida Progress Corporation 714,438
___________
Total investments $14,119,271
===========
</TABLE>
<PAGE>
FT 248
DIVERSIFIED INCOME & GROWTH TRUST, 1998 SPRING SERIES
NOTES TO PORTFOLIO
February 29, 2000
(1) In November 1999, Exxon Corporation (Exxon), which was one of the
Trust's original holdings, acquired Mobil Corporation (Mobil), which was
also one of the Trust's original holdings. Each shareholder of Mobil
received 1.3201 shares of Exxon for each share of Mobil held.
Concurrently, the name of the combined company was changed to Exxon
Mobil Corporation.
(2) The number of shares reflects the effect of a three for one stock split.
(3) The number of shares reflects the effect of a three for two stock split.
See accompanying notes to financial statements.
<PAGE>
FT 248
DIVERSIFIED INCOME & GROWTH TRUST, 1998 SPRING SERIES
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
Apr. 1,
Year ended 1998, to
Feb. 29, Feb. 28,
2000 1999
<S> <C> <C>
Dividends $639,235 $671,747
Expenses:
Trustee's fees and related expenses (40,145) (23,262)
Evaluator's fees (5,934) (7,163)
Supervisory fees (8,362) (8,640)
Administrative fees (2,159) (2,469)
Amortization of organization and
offering costs (12,641) (11,567)
__________________________
Total expenses (69,241) (53,101)
__________________________
Investment income - net 569,994 618,646
Net gain (loss) on investments:
Net realized gain (loss) (826,501) (122,369)
Change in net unrealized appreciation
or depreciation (952,463) (492,535)
__________________________
(1,778,964) (614,904)
__________________________
Net increase (decrease) in net assets
resulting from operations $(1,208,970) 3,742
==========================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 248
DIVERSIFIED INCOME & GROWTH TRUST, 1998 SPRING SERIES
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
Apr. 1,
Year ended 1998, to
Feb. 29, Feb. 28,
2000 1999
<S> <C> <C>
Net increase in net assets resulting
from operations:
Investment income - net $569,994 618,646
Net realized gain (loss) on investments (826,501) (122,369)
Change in net unrealized appreciation
or depreciation on investments (952,463) (492,535)
__________________________
(1,208,970) 3,742
Units issued (37,383 and 2,804,049 units
in 2000 and 1999, respectively, net of
deferred sales charges of $643,138
in 1999) 359,738 26,477,404
Unit redemptions (927,296 and 192,909 units
in 2000 and 1999, respectively) (8,619,703) (1,823,004)
Distributions to unit holders:
Investment income - net (606,428) (433,059)
Principal from investment transactions - -
__________________________
(606,428) (433,059)
__________________________
Total increase (decrease) in net assets (10,075,363) 24,225,083
Net assets:
At the beginning of the period
(representing 2,626,138 and 14,998 units
at February 28, 1999 and April 1,
1998, respectively) 24,370,113 145,030
__________________________
At the end of the period (including
distributable funds applicable to
Trust units of $822,067 and $703,490
at February 29, 2000 and February 28,
1999, respectively) $14,294,750 24,370,113
==========================
Trust units outstanding at the end of
the period 1,736,225 2,626,138
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 248
DIVERSIFIED INCOME & GROWTH TRUST, 1998 SPRING SERIES
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies
Security valuation -
The equity securities are stated at the closing sale prices of listed equity
securities and the bid prices of over-the-counter traded equity securities as
reported by First Trust Advisors L.P. (the Evaluator), an affiliate of the
Sponsor.
Dividend income -
Dividends on each equity security are recognized on such equity security's ex-
dividend date.
Security cost -
Cost of the equity securities is based on the market value of such securities
on the dates the securities were deposited in the Trust. The cost of
securities sold is determined using the average cost method. Sales of
securities are recorded on the trade date.
Federal income taxes -
The Trust is not taxable for Federal income tax purposes. Each unit holder is
considered to be the owner of a pro rata portion of the Trust and,
accordingly, no provision has been made for Federal income taxes.
Expenses of the Trust -
The Trust pays a fee for Trustee services to The Chase Manhattan Bank, which
is based on $.0096 per annum per unit outstanding based on the largest
aggregate number of units outstanding during the year. In addition, the
Evaluator will receive an annual fee based on $.0030 per unit outstanding.
The Trust also pays recurring financial reporting costs, an annual supervisory
fee payable to an affiliate of the Sponsor and an annual administrative fee
payable to the Sponsor.
Organization and offering costs -
The Trust has paid a portion of its organization and offering costs, including
costs of preparing the registration statement, the Trust indenture and other
closing documents, registering units with the Securities and Exchange
Commission and states, the initial audit of the Trust's portfolio, legal fees
and the initial fees and expenses of the Trustee. Such costs, totaling
$37,922, have been deferred and are being amortized over three years from the
Initial Date of Deposit.
<PAGE>
2. Unrealized appreciation and depreciation
An analysis of net unrealized depreciation at February 29, 2000 follows:
<TABLE>
<S> <C>
Unrealized depreciation $(2,566,130)
Unrealized appreciation 1,121,132
___________
$(1,444,998)
===========
</TABLE>
3. Other information
Cost to investors -
The cost to initial investors of units of the Trust was based on the aggregate
underlying value of the equity securities on the date of an investor's
purchase, plus a deferred sales charge of $.23 per unit which was paid to the
Sponsor over a five-month period ending on March 19, 1999, plus an initial
sales charge equal to the difference between the deferred sales charge and the
total sales charge of 3.3% of the public offering price which was equivalent
to approximately 3.3333% of the net amount invested, exclusive of the deferred
sales charge.
Distributions to unit holders -
Income distributions to unit holders are made on the last day of March, June,
September and December to unit holders of record on the fifteenth day of
March, June, September and December. Capital distributions to unit holders,
if any, are made on the last day of each month to unit holders of record on
the fifteenth day of such month if the amount available for distribution
equals at least $.01 per unit. Notwithstanding, capital distributions, if
any, will be made in December of each year.
<PAGE>
Selected data per unit of the Trust
outstanding throughout each period -
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
Apr. 1,
Year ended 1998, to
Feb.29, Feb. 28,
2000 1999
<S> <C> <C>
Dividend income $.284 .260
Expenses (.031) (.020)
___________________
Investment income - net .253 .240
Distributions to unit holders:
Investment income - net (.261) (.158)
Principal from investment transactions - -
Net gain (loss) on investments (1.039) (.472)
___________________
Total increase (decrease) in net assets (1.047) (.390)
Net assets:
Beginning of the period 9.280 9.670
___________________
End of the period $8.233 9.280
===================
</TABLE>
Dividend income, Expenses and Investment income - net per unit have been
calculated based on the weighted-average number of units outstanding during
each period (2,252,414 and 2,580,414 units in 2000 and 1999, respectively).
Distributions to unit holders of Investment income - net per unit reflects the
Trust's actual distributions of approximately $.068 per unit to 2,600,167
units on March 31, 1999, approximately $.063 per unit to 2,417,207 units on
June 30, 1999, approximately $.064 per unit to 2,249,699 units on September
30, 1999, approximately $.066 per unit to 2,031,164 units on December 31,
1999, approximately $.035 per unit to 2,783,356 units on June 30, 1998,
approximately $.062 per unit to 2,751,671 units on September 30, 1998 and
approximately $.061 per unit to 2,726,945 units on December 31, 1998. The Net
gain (loss) on investments per unit during each period includes the effects of
changes arising from issuance of additional units during each period at net
asset values which differed from the net asset value per unit at the beginning
of the period.
<PAGE>
FT 248
DIVERSIFIED INCOME & GROWTH TRUST, 1998 SPRING SERIES
PART ONE
Must be Accompanied by Part Two and Part Three
___________________
P R O S P E C T U S
___________________
SPONSOR: Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
(800) 621-1675
TRUSTEE: The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR: 111 West Monroe Street
Chicago, Illinois 60603
LEGAL COUNSEL Carter, Ledyard & Milburn
TO TRUSTEE: 2 Wall Street
New York, New York 10005
INDEPENDENT Ernst & Young LLP
AUDITORS: Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any jurisdiction to any person to whom it is not
lawful to make such offer in such jurisdiction.
This Prospectus does not contain all the information set forth in the
registration statement and exhibits relating thereto, which the Trust has
filed with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
THE FIRST TRUST SPECIAL SITUATIONS TRUST
FT SERIES
PROSPECTUS NOTE: THIS PART TWO PROSPECTUS MAY
Part Two ONLY BE USED WITH PART ONE
Dated May 31, 2000 AND PART THREE
The FT Series (formerly known as The First Trust Special Situations
Trust) is a unit investment trust. The FT Series has many separate
series. The Part One which accompanies this Part Two describes one such
series of the FT Series. Each series of the FT Series consists of one or
more portfolios ("Trust(s)") which invest in one or more of the
following: common stock ("Equity Securities"), preferred stock
("Preferred Stocks"), trust preferred securities ("Trust Preferred
Securities"), real estate investment trusts ("REITs") and/or closed-end
funds ("Closed-End Funds"). See Part One and Part Three for a more
complete description of the portfolio for each Trust.
All Parts of the Prospectus Should be Retained for Future Reference.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (registered trademark)
1-800-621-9533
Page 1
Table of Contents
The FT Series 3
Risk Factors 3
Public Offering 4
Distribution of Units 5
The Sponsor's Profits 6
The Secondary Market 6
How We Purchase Units 6
Expenses and Charges 6
Tax Status 7
Retirement Plans 9
Rights of Unit Holders 9
Income and Capital Distributions 10
Redeeming Your Units 11
Removing Securities from a Trust 12
Amending or Terminating the Indenture 13
Information on the Sponsor, Trustee and Evaluator 13
Other Information 14
Page 2
The FT Series
The FT Series Defined.
We, Nike Securities L.P. (the "Sponsor"), have created hundreds of
similar yet separate series of a unit investment trust which we have
named the FT Series or its predecessor, The First Trust Special
Situations Trust. See Part One for a description of the series and
Trusts for which this Part Two Prospectus relates.
Each Trust was created under the laws of the State of New York by a
Trust Agreement (the "Indenture") dated the Initial Date of Deposit.
This agreement, entered into among Nike Securities L.P., as Sponsor, The
Chase Manhattan Bank as Trustee and First Trust Advisors L.P. as
Portfolio Supervisor and Evaluator, governs the operation of the Trusts.
How We Created the Trusts.
On the Initial Date of Deposit for each Trust, we deposited a portfolio
or portfolios of one or more of following: Equity Securities, Preferred
Stocks, Trust Preferred Securities, Closed-End Funds and/or REITs,
(collectively, the "Securities") with the Trustee and in turn, the
Trustee delivered documents to us representing our ownership of the
Trusts in the form of units ("Units").
See "The Objective of the Trusts" in Part Three for each Trust for a
specific description of such Trust's objective.
We cannot guarantee that a Trust will keep its present size and
composition for any length of time. Since the prices of the Securities
will fluctuate daily, the ratio of Securities in the Trusts, on a market
value basis, will also change daily. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be reinvested. However, Securities will not be sold to take
advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation, or if they no longer meet the criteria by
which they were selected. You will not be able to dispose of or vote any
of the Securities in the Trusts. As the holder of the Securities, the
Trustee will vote all of the Securities and will do so based on our
instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities.
Risk Factors
Price Volatility. The Trusts may invest in any of the securities set
forth in "The FT Series." The value of a Trust's Units will fluctuate
with changes in the value of these securities. The prices of securities
fluctuate for several reasons including, the type of security, changes
in investor's perceptions of the financial condition of an issuer or the
general condition of the relevant market, or when political or economic
events effecting the issuers occur. In addition, prices may be
particularly sensitive to rising interest rates, as the cost of capital
rises and borrowing costs increase. However, because preferred stock
dividends are fixed (though not guaranteed) and preferred stocks
typically have superior rights to common stocks in dividend
distributions and liquidation, they are generally less volatile than
common stocks.
Because the Trusts are not managed, the Trustee will not sell securities
in response to or in anticipation of market fluctuations, as is common
in managed investments. As with any investment, we cannot guarantee that
the performance of any Trust will be positive over any period of time,
or that you won't lose money. Units of the Trusts are not deposits of
any bank and are not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
Certain of the Securities in certain of the Trusts may be issued by
companies with market capitalizations of less than $1 billion. The share
prices of these small-cap companies are often more volatile than those
of larger companies as a result of several factors common to many such
issuers, including limited trading volumes, products or financial
resources, management inexperience and less publicly available
information.
Dividends. There is no guarantee that the issuers of the Equity
Securities will declare dividends in the future or that if declared they
will either remain at current levels or increase over time. In addition,
there is no assurance that the issuers of the Preferred Stocks included
in a Trust will be able to pay dividends at their stated rate in the
future.
Trust Preferred Securities. Certain Trusts may contain trust preferred
securities. Trust preferred securities are limited-life preferred
securities typically issued by corporations, generally in the form of
Page 3
interest-bearing notes or preferred securities, or by an affiliated
business trust of a corporation, generally in the form of beneficial
interests in subordinated debentures or similarly structured securities.
Dividend payments of the trust preferred securities generally coincide
with interest payments on the underlying obligations. Trust preferred
securities generally have a yield advantage over traditional preferred
stocks, but unlike preferred stocks, distributions are treated as
interest rather than dividends for federal income tax purposes and
therefore, are not eligible for the dividends-received deduction. Trust
preferred securities are subject to unique risks which include the fact
that dividend payments will only be paid if interest payments on the
underlying obligations are made, which interest payments are dependent
on the financial condition of the issuer and may be deferred for up to
20 consecutive quarters, and that the underlying obligations, and thus
the trust preferred securities, may be prepaid after a stated call date
or as a result of certain tax or regulatory events.
Closed End Funds. Certain Trusts may contain common stocks issued by
closed-end investment companies. The closed-end investment companies in
turn invest in other securities. Shares of closed-end funds frequently
trade at a discount from their net asset value in the secondary market.
This risk is separate and distinct from the risk that the net asset
value of the closed-end fund shares may decrease. The amount of such
discount from net asset value is subject to change from time to time in
response to various factors.
Real Estate Investment Trusts. Certain Trusts may contain securities
issued by Real Estate Investment Trusts ("REITs"). REITs are financial
vehicles that pool investors' capital to purchase or finance real
estate. REITs may concentrate their investments in specific geographic
areas or in specific property types, i.e., hotels, shopping malls,
residential complexes and office buildings. The value of the REITs and
the ability of the REITs to distribute income may be adversely affected
by several factors, including rising interest rates, changes in the
national, state and local economic climate and real estate conditions,
perceptions of prospective tenants of the safety, convenience and
attractiveness of the properties, the ability of the owner to provide
adequate management, maintenance and insurance, the cost of complying
with the Americans with Disabilities Act, increased competition from new
properties, the impact of present or future environmental legislation
and compliance with environmental laws, changes in real estate taxes and
other operating expenses, adverse changes in governmental rules and
fiscal policies, adverse changes in zoning laws, and other factors
beyond the control of the issuers of the REITs.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed in the United States and abroad which may have
a negative impact on certain of the companies represented in the Trusts.
In addition, litigation regarding any of the issuers of the Securities,
or of the industries represented by such issuers may negatively impact
the share prices of these Securities. We cannot predict what impact any
pending or proposed legislation or pending or threatened litigation will
have on the share prices of the Securities.
Foreign Stocks. Certain of the Securities in certain of the Trusts may
be issued by foreign companies, which makes the Trusts subject to more
risks than if they invested solely in domestic common stocks. These
Securities are either directly listed on a U.S. securities exchange or
are in the form of American Depositary Receipts ("ADRs") which are
listed on a U.S. securities exchange. Risks of foreign common stocks
include higher brokerage costs; different accounting standards;
expropriation, nationalization or other adverse political or economic
developments; currency devaluations, blockages or transfer restrictions;
restrictions on foreign investments and exchange of securities;
inadequate financial information; and lack of liquidity of certain
foreign markets.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the per Unit price of
which is comprised of the following:
- The aggregate underlying value of the Securities;
- The amount of any cash in the Income and Capital Accounts;
- Dividends receivable on Securities; and
- The total sales charge.
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" in Part One due to various
Page 4
factors, including fluctuations in the prices of the Securities and
changes in the value of the Income and/or Capital Accounts.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Sales Charges.
The sales charge you will pay will consist of a one-time initial sales
charge as listed in Part One for each Trust. See Part Three "Public
Offering" for additional information for each Trust.
The Value of the Securities.
The Evaluator will appraise the aggregate underlying value of the
Securities in a Trust as of the Evaluation Time on each business day and
will adjust the Public Offering Price of the Units according to this
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the
Trustee receive orders for purchases, sales or redemptions after that
time, or on a day which is not a business day, they will be held until
the next determination of price. The term "business day" as used in this
prospectus will exclude Saturdays, Sundays and certain national holidays
on which the NYSE is closed.
The aggregate underlying value of the Securities in a Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, their value is generally based on
the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). However, if there is no closing sale price on that exchange
or system, they are valued based on the closing bid prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, their value will
generally be based on the current bid prices on the over-the-counter
market (unless it is determined that these prices are not appropriate as
a basis for valuation). If current bid prices are unavailable, the
valuation is generally determined:
a) On the basis of current bid prices for comparable securities;
b) By appraising the value of the Securities on the bid side of the
market; or
c) By any combination of the above.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
Dealer Concessions.
Dealers will receive concessions on the sale of Units in the amounts set
forth in Part Three of this prospectus. We reserve the right to change
the amount of concessions or agency commissions from time to time.
Certain commercial banks may be making Units of the Trusts available to
their customers on an agency basis. A portion of the sales charge paid
by these customers is kept by or given to the banks in the amounts shown
above.
Award Programs.
From time to time we may sponsor programs which provide awards to a
dealer's registered representatives who have sold a minimum number of
Units during a specified time period. We may also pay fees to qualifying
dealers for services or activities which are meant to result in sales of
Units of the Trusts. In addition, we will pay to dealers who sponsor
sales contests or recognition programs that conform to our criteria, or
participate in our sales programs, amounts equal to no more than the
total applicable sales charge on Units sold by such persons during such
programs. We make these payments out of our own assets and not out of
Trust assets. These programs will not change the price you pay for your
Units.
Investment Comparisons.
From time to time we may compare the estimated returns of the Trusts
(which may show performance net of the expenses and charges the Trusts
would have incurred) and returns over specified periods of other similar
trusts we sponsor in our advertising and sales materials, with (1)
returns on other taxable investments such as the common stocks
comprising various market indexes, corporate or U.S. Government bonds,
bank CDs and money market accounts or funds, (2) performance data from
Morningstar Publications, Inc. or (3) information from publications such
as Money, The New York Times, U.S. News and World Report, BusinessWeek,
Page 5
Forbes or Fortune. The investment characteristics of each Trust differ
from other comparative investments. You should not assume that these
performance comparisons will be representative of a Trust's future
performance.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales
charge per Unit of a Trust less any reduced sales charge as stated in
Part Three of this prospectus. In maintaining a market for the Units,
any difference between the price at which we purchase Units and the
price at which we sell or redeem them will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units and
continuously offer to purchase Units at prices based on the Redemption
Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees, Trustee costs to transfer and record the ownership of
Units and costs incurred in annually updating each Trust's registration
statement. We may discontinue purchases of Units at any time. IF YOU
WISH TO DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET
PRICES BEFORE MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid at that time is equal to or greater than the Redemption Price per
Unit, we may purchase the Units. You will receive your proceeds from the
sale no later than if they were redeemed by the Trustee. We may tender
Units that we hold to the Trustee for redemption as any other Units. If
we elect not to purchase Units, the Trustee may sell tendered Units in
the over-the-counter market, if any. However, the amount you will
receive is the same as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of each Trust are set forth under "Summary
of Essential Information" in Part One of this prospectus. If actual
expenses of a Trust exceed the estimate, that Trust will bear the
excess. The Trustee will pay operating expenses of a Trust from the
Income Account of such Trust if funds are available, and then from the
Capital Account. The Income and Capital Accounts are noninterest-bearing
to Unit holders, so the Trustee may earn interest on these funds, thus
benefiting from their use.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trusts, and will receive brokerage fees
when a Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. Legal, typesetting, electronic filing and regulatory
filing fees and expenses associated with updating those Trusts'
registration statements yearly are also now chargeable to such Trusts.
Historically, we paid these fees and expenses. First Trust Advisors
L.P., an affiliate of ours, acts as both Portfolio Supervisor and
Evaluator to the Trusts and will receive the fees set forth under
"Summary of Essential Information" in Part One of this prospectus for
providing portfolio supervisory and evaluation services to the Trusts.
In providing portfolio supervisory services, the Portfolio Supervisor
may purchase research services from a number of sources, which may
include underwriters or dealers of the Trusts.
The fees payable to us, First Trust Advisors L.P. and the Trustee are
based on the largest aggregate number of Units of a Trust outstanding at
any time during the calendar year. These fees may be adjusted for
inflation without Unit holders' approval, but in no case will the annual
fees paid to us or our affiliates for providing a given service to all
unit investment trusts for which we provide such services be more than
the actual cost of providing such services in such year.
For certain Trusts, as set forth in the "Summary of Essential
Information" appearing in Part One for such Trusts, expenses incurred in
establishing such 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 the Trust portfolio and the initial fees and expenses
of the Trustee and any other out-of-pocket expenses, have been paid by
the Trust and are being charged off over a period not to exceed five
years from such Trust's Initial Date of Deposit, or over a period not to
exceed the life of the Trust, if shorter than five years.
Page 6
In addition to a Trust's operating expenses and those fees described
above, each Trust may also incur the following charges:
- License fees payable by a Trust for the use of certain trademarks and
trade names associated with such Trust, if any;
- All legal and annual auditing expenses of the Trustee according to its
responsibilities under the Indenture;
- The expenses and costs incurred by the Trustee to protect a Trust and
your rights and interests;
- Fees for any extraordinary services the Trustee performed under the
Indenture;
- Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of a Trust;
- Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of a
Trust; and/or
- All taxes and other government charges imposed upon the Securities or
any part of a Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
the Trusts. Since the dividend income is unpredictable, we cannot
guarantee that dividends will be sufficient to meet any or all expenses
of the Trusts. If there is not enough cash in the Income or Capital
Account, the Trustee has the power to sell Securities in a Trust to make
cash available to pay these charges which may result in capital gains or
losses to you. See "Tax Status."
Each Trust will be audited annually. We will bear the cost of these
annual audits to the extent the costs exceed $0.0050 per Unit.
Otherwise, each Trust will pay for the audit. You can request a copy of
the audited financial statements from the Trustee.
Tax Status
Federal Tax Status.
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of a Trust. This section is current as of
the date of this prospectus. Tax laws and interpretations change
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, these summaries generally do
not describe your situation if you are a non-U.S. person, a
broker/dealer, or other investor with special circumstances. In
addition, this section does not describe state or foreign taxes. As with
any investment, you should consult your own tax professional about your
particular consequences.
Assets of the Trusts.
Each Trust will hold one or more of the following: (i) stock in domestic
and foreign corporations (the "Stocks"), (ii) interests in real estate
investment trusts (the "REIT Shares"), (iii) Trust Preferred Securities
(the "Debt Obligations") and (iv) shares in funds qualifying as
regulated investment companies (the "RIC Shares"). All of the foregoing
assets constitute the "Trust Assets." For purposes of this federal tax
discussion, it is assumed that the Stocks constitute equity, the Debt
Obligations constitute debt and that the RIC Shares and the REIT Shares
constitute qualifying shares in regulated investment companies and real
estate investment trusts, respectively, for federal income tax purposes.
Trust Status.
Except if indicated otherwise in Part Three of this prospectus, each
Trust will not be taxed as a corporation for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of each of the Trust Assets, and as such you will be
considered to have received a pro rata share of income (i.e., interest,
dividends, accruals of original issue discount and market discount, and
capital gains, if any) from each Trust Asset when such income is
considered to be received by the Trust. This is true even if you elect
to have your distributions automatically reinvested into additional
Units.
Your Tax Basis and Income or Loss upon Disposition.
If your Trust disposes of Trust Assets, you will generally recognize
gain or loss. If you dispose of your Units or redeem your Units for
cash, you will also generally recognize gain or loss. To determine the
amount of this gain or loss, you must subtract your tax basis in the
related Trust Assets from your share of the total proceeds received in
the transaction. You can generally determine your initial tax basis in
each Trust Asset by apportioning the cost of your Units, generally
including sales charges, among each Trust Asset ratably according to its
value on the date you acquire your Units. In certain circumstances,
however, you may have to adjust your tax basis after you acquire your
Page 7
Units (for example, in the case of certain dividends that exceed a
corporation's accumulated earnings and profits or in the case of
original issue discount, market discount, premium and accrued interest
with regard to the Debt Obligations, as discussed below).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (10% for certain taxpayers in the lowest
tax bracket). Net capital gain equals net long-term capital gain minus
net short-term capital loss for the taxable year. Capital gain or loss
is long-term if the holding period for the asset is more than one year
and is short-term if the holding period for the asset is one year or
less. You must exclude the date you purchase your Units or the date your
Trust purchases a Trust Asset to determine the holding period. The tax
rates for capital gains realized from assets held for one year or less
are generally the same as for ordinary income. The Code may, however,
treat certain capital gains as ordinary income in special situations
(for example, in the case of gain on the Debt Obligations attributable
to market discount). In addition, capital gain received from assets held
for more than one year that is considered "unrecaptured section 1250
gain" (which may be the case, for example, with some capital gains
attributable to the REIT Shares) is taxed at a maximum stated tax rate
of 25%.
Dividends from RIC Shares and REIT Shares.
Some dividends on the REIT Shares or the RIC Shares may qualify as
"capital gain dividends," taxable to you as long-term capital gains. If
you hold a Unit for six months or less or if your Trust holds a RIC
Share or REIT Share for six months or less, any loss incurred by you
related to the disposition of such RIC Share or REIT Share will be
treated as a long-term capital loss to the extent of any long-term
capital gain distributions received (or deemed to have been received)
with respect to such RIC Share or REIT Share. Distributions of income or
capital gains declared on the REIT Shares or the RIC Shares in October,
November or December will be deemed to have been paid to you on December
31 of the year they are declared, even when paid by the REIT or the RIC
during the following January.
Discount, Accrued Interest and Premium on Debt Obligations.
Some Debt Obligations may have been sold with original issue discount.
This generally means that the Debt Obligations were originally issued at
a price below their face (or par) value. Original issue discount accrues
on a daily basis and generally is treated as interest income for federal
income tax purposes. The basis of your Unit and of each Debt Obligation
which was issued with original issue discount must be increased as
original issue discount accrues.
Some Debt Obligations may have been purchased by you or your Trust at a
market discount. Market discount is generally the excess of the stated
redemption price at maturity for the Debt Obligation over the purchase
price of the Debt Obligation (not including unaccrued original issue
discount). Market discount can arise based on the price your Trust pays
for a Debt Obligation or on the price you pay for your Units. Market
discount is taxed as ordinary income. You will recognize this income
when your Trust receives principal payments on the Debt Obligation, when
the Debt Obligation is sold or redeemed, or when you sell or redeem your
Units. Alternatively, you may elect to include market discount in
taxable income as it accrues. Whether or not you make this election will
affect how you calculate your basis and the timing of certain interest
expense deductions.
Alternatively, some Debt Obligations may have been purchased by you or
your Trust at a premium. Generally, if the tax basis of your pro rata
portion of any Debt Obligation exceeds the amount payable at maturity,
such excess is considered premium. You may elect to amortize premium. If
you make this election, you may reduce your interest income received on
the Debt Obligation by the amount of the premium that is amortized and
your tax basis will be reduced.
If the price of your Units included accrued interest on a Debt
Obligation, you must include the accrued interest in your tax basis in
that Debt Obligation. When your Trust receives this accrued interest,
you must treat it as a return of capital and reduce your tax basis in
the Debt Obligation.
This discussion provides only the general rules with respect to the tax
treatment of original issue discount, market discount and premium. The
rules, however, are complex and special rules apply in certain
circumstances. For example, the accrual of market discount or premium
Page 8
may differ from the discussion set forth above in the case of Debt
Obligations that were issued with original issue discount.
Dividends Received Deduction.
A corporation that owns Units will generally not be entitled to the
dividends received deduction with respect to many dividends received by
your Trust, because the dividends received deduction is not available
for dividends from most foreign corporations or from REITs.
Distributions on a RIC Share are eligible for the dividends received
deduction only to the extent that the dividends received by the Unit
owner are attributable to dividends received by the RIC itself from
certain domestic corporations and are designated by the RIC as being
eligible for the dividends received deduction. Finally, because the Debt
Obligations are treated as debt (not equity) for federal income tax
purposes, distributions from the Debt Obligations are not eligible for
the dividends received deduction.
In-Kind Distributions.
Under certain circumstances, you may request an In-Kind Distribution of
Trust Assets when you redeem your Units or at your Trust's termination.
By electing to receive an In-Kind Distribution, you will receive an
undivided interest in Trust Assets plus, possibly, cash. You will not
recognize gain or loss if you only receive Trust Assets in exchange for
your pro rata portion of the Trust Assets held by your Trust. However,
if you also receive cash in exchange for a fractional portion of a Trust
Asset, you will generally recognize gain or loss based on the difference
between the amount of cash you receive and your tax basis in such
fractional portion of the Trust Asset.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of your Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by your Trust to the same extent as if you directly
paid the expense. You may be required to treat some or all of the
expenses of your Trust as miscellaneous itemized deductions. However,
individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Interest and dividend payments on your Trust Assets of foreign companies
that are paid to your Trust may be subject to foreign withholding taxes.
Any income withheld will still be treated as income to you. Under the
grantor trust rules, you are considered to have paid directly your share
of foreign taxes. Therefore, for U.S. tax purposes, you may be entitled
to a foreign tax credit or deduction for those foreign taxes.
If you are a foreign investor (i.e., an investor other than a U.S.
citizen or resident or a U.S. corporation, partnership, estate or
trust), you will not be subject to U.S. federal income taxes, including
withholding taxes, on some of the income from your Trust or on any gain
from the sale or redemption of your Units, provided that certain
conditions are met. You should consult your tax advisor with respect to
the conditions you must meet in order to be exempt for U.S. tax purposes.
Under the existing income tax laws of the State and City of New York,
your Trust will not be taxed as a corporation, and the income of your
Trust will be treated as the income of the Unit holders in the same
manner as for federal income tax purposes. You should consult your tax
advisor regarding potential foreign, state or local taxation with
respect to your Units.
Retirement Plans
You may purchase Units of the Trusts for:
- Individual Retirement Accounts;
- Keogh Plans;
- Pension funds; and
- Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
advisor. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. It is your responsibility to notify the Trustee when
Page 9
you become Record Owner, but normally your broker/dealer provides this
notice. You may elect to hold your Units in either certificated or
uncertificated form.
Certificated Units. When you purchase your Units you can request that
they be evidenced by certificates, which will be delivered shortly after
your order. Certificates will be issued in fully registered form,
transferable only on the books of the Trustee in denominations of one
Unit or any multiple thereof. You can transfer or redeem your
certificated Units by endorsing and surrendering the certificate to the
Trustee, along with a written instrument of transfer. You must sign your
name exactly as it appears on the face of the certificate with your
signature guaranteed by an eligible institution. In certain cases the
Trustee may require additional documentation before they will transfer
or redeem your Units.
You may be required to pay a nominal fee to the Trustee for each
certificate reissued or transferred, and to pay any government charge
that may be imposed for each transfer or exchange. If a certificate gets
lost, stolen or destroyed, you may be required to furnish indemnity to
the Trustee to receive replacement certificates. You must surrender
mutilated certificates to the Trustee for replacement.
Uncertificated Units. You may also choose to hold your Units in
uncertificated form. If you choose this option, the Trustee will
establish an account for you and credit your account with the number of
Units you purchase. Within two business days of the issuance or transfer
of Units held in uncertificated form, the Trustee will send you:
- A written initial transaction statement containing a description of
the Trust;
- A list of the number of Units issued or transferred;
- Your name, address and Taxpayer Identification Number ("TIN");
- A notation of any liens or restrictions of the issuer and any adverse
claims; and
- The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per Unit amount of income (if any)
distributed. After the end of each calendar year, the Trustee will
provide you with the following information:
- A summary of transactions in your Trust for the year;
- A list of any Securities sold during the year and the Securities held
at the end of that year by your Trust;
- The Redemption Price per Unit, computed on the 31st day of December of
such year (or the last business day before); and
- Amounts of income and capital distributed during the year.
You may request from the Trustee copies of the evaluations of the
Securities as prepared by the Evaluator to enable you to comply with
federal and state tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit dividends received on a
Trust's Securities to the Income Account of such Trust. All other
receipts, such as return of capital, are credited to the Capital Account
of such Trust.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information" in Part One of this prospectus. No income distribution will
be paid if accrued expenses of a Trust exceed amounts in the Income
Account on the Income Distribution Dates. Distribution amounts will vary
with changes in a Trust's fees and expenses, in dividends received and
with the sale of Securities. The Trustee will distribute amounts in the
Capital Account, net of amounts designated to meet redemptions or pay
expenses on the last day of each month to Unit holders of record on the
fifteenth day of each month provided the amount equals at least $1.00
per 100 Units ($1.00 per 1,000 Units if the Initial Public Offering
Price was approximately $1.00 per Unit). If the Trustee does not have
your TIN, it is required to withhold a certain percentage of your
distribution and deliver such amount to the Internal Revenue Service
Page 10
("IRS"). You may recover this amount by giving your TIN to the Trustee,
or when you file a tax return. However, you should check your statements
to make sure the Trustee has your TIN to avoid this "back-up withholding."
Within a reasonable time after a Trust is terminated, you will receive
the pro rata share of the money from the sale of the Securities.
However, if you are eligible, you may elect to receive an In-Kind
Distribution as described under "Amending or Terminating the Indenture."
You will receive a pro rata share of any other assets remaining in your
Trust after deducting any unpaid expenses.
The Trustee may establish reserves (the "Reserve Account") within a
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of such Trust.
Distribution Reinvestment Option. If applicable, you may elect to have
each distribution of income and/or capital reinvested into additional
Units of your Trust by notifying the Trustee at least 10 days before any
Record Date. Each later distribution of income and/or capital on your
Units will be reinvested by the Trustee into additional Units of your
Trust. There is no sales charge on Units acquired through the
Distribution Reinvestment Option. This option may not be available in
all states.PLEASE NOTE THAT EVEN IF YOU REINVEST DISTRIBUTIONS, THEY ARE
STILL CONSIDERED DISTRIBUTIONS FOR INCOME TAX PURPOSES.See Part Three of
this prospectus to determine whether the distribution reinvestment
option is available for a particular Trust.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending the
certificates representing the Units you want to redeem to the Trustee at
its unit investment trust office. If your Units are uncertificated, you
need only deliver a request for redemption to the Trustee. In either
case, the certificates or the redemption request must be properly
endorsed with proper instruments of transfer and signature guarantees as
explained in "Rights of Unit Holders-Unit Ownership" (or by providing
satisfactory indemnity if the certificates were lost, stolen, or
destroyed). No redemption fee will be charged, but you are responsible
for any governmental charges that apply. Three business days after the
day you tender your Units (the "Date of Tender") you will receive cash
in an amount for each Unit equal to the Redemption Price per Unit
calculated at the Evaluation Time on the Date of Tender.
The Date of Tender is considered to be the date on which the Trustee
receives your certificates or redemption request (if such day is a day
the NYSE is open for trading). However, if your certificates or
redemption request are received after 4:00 p.m. Eastern time (or after
any earlier closing time on a day on which the NYSE is scheduled in
advance to close at such earlier time), the Date of Tender is the next
day the NYSE is open for trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account if funds are available for that purpose, or from
the Capital Account. All other amounts paid on redemption will be taken
from the Capital Account. The IRS will require the Trustee to withhold a
portion of your redemption proceeds if it does not have your TIN, as
generally discussed under "Income and Capital Distributions."
For certain Trusts, if you tender at least the minimum number of Units
specified in "Summary of Essential Information" in Part One of this
prospectus, rather than receiving cash, you may elect to receive an In-
Kind Distribution in an amount equal to the Redemption Price per Unit by
making this request in writing to the Trustee at the time of tender.
However, no In-Kind Distribution requests submitted during the nine
business days prior to a Trust's Mandatory Termination Date will be
honored. Where possible, the Trustee will make an In-Kind Distribution
by distributing each of the Securities in book-entry form to your bank
or broker/dealer account at the Depository Trust Company. The Trustee
will subtract any customary transfer and registration charges from your
In-Kind Distribution. As a tendering Unit holder, you will receive your
pro rata number of whole shares of the Securities that make up the
portfolio, and cash from the Capital Account equal to the fractional
shares to which you are entitled.
The Trustee may sell Securities to make funds available for redemption.
If Securities are sold, the size and diversification of a Trust will be
reduced. These sales may result in lower prices than if the Securities
were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- If the NYSE is closed (other than customary weekend and holiday
closings);
- If the SEC determines that trading on the NYSE is restricted or that
Page 11
an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of a Trust not designated to
purchase Securities;
2. the aggregate value of the Securities held in a Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of a Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of a Trust, if any;
4. cash held for distribution to Unit holders of record of a Trust as of
the business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by a Trust; and
dividing
1. the result by the number of outstanding Units of a Trust.
Removing Securities from a Trust
The portfolios of the Trusts are not managed. However, we may, but are
not required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- The issuer of the Security defaults in the payment of a declared
dividend;
- Any action or proceeding prevents the payment of dividends;
- There is any legal question or impediment affecting the Security;
- The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- The issuer has defaulted on the payment of any other of its
outstanding obligations;
- There has been a public tender offer made for a Security or a merger
or acquisition is announced affecting a Security, and that in our
opinion the sale or tender of the Security is in the best interest of
Unit holders; or
- The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to a Trust.
A Trust may not acquire any securities or other property other than the
Securities. The Trustee, on behalf of the Trusts, will reject any offer
for new or exchanged securities or property in exchange for a Security,
such as those acquired in a merger or other transaction. If such
exchanged securities or property are nevertheless acquired by a Trust,
at our instruction, they will either be sold or held in such Trust. In
making the determination as to whether to sell or hold the exchanged
securities or property we may get advice from each Portfolio Supervisor.
Any proceeds received from the sale of Securities, exchanged securities
or property will be credited to the Capital Account for distribution to
Unit holders or to meet redemption requests. The Trustee may retain and
pay us or an affiliate of ours to act as agent for a Trust to facilitate
selling Securities, exchanged securities or property from the Trusts. If
we or our affiliate act in this capacity, we will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
The Trustee may sell Securities designated by us or, absent our
direction, at its own discretion, in order to meet redemption requests
or pay expenses. In designating Securities to be sold, we will try to
maintain the proportionate relationship among the Securities. If this is
not possible, the composition and diversification of a Trust may be
changed. To get the best price for a Trust we may specify minimum
amounts (generally 100 shares) in which blocks of Securities are to be
sold. We may consider sales of units of unit investment trusts which we
sponsor when we make recommendations to the Trustee as to which
broker/dealers they select to execute a Trust's portfolio transactions,
or when acting as agent for a Trust in acquiring or selling Securities
on behalf of the Trusts.
Page 12
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- To cure ambiguities;
- To correct or supplement any defective or inconsistent provision;
- To make any amendment required by any governmental agency; or
- To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trusts will terminate on
the Mandatory Termination Date as stated in the "Summary of Essential
Information" in Part One for each Trust. The Trusts may be terminated
earlier:
- Upon the consent of 100% of the Unit holders of a Trust;
- If the value of the Securities owned by a Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination, the Trustee will send written notice to all Unit
holders which will specify how you should tender your certificates, if
any, to the Trustee. For various reasons, a Trust may be reduced below
the Discretionary Liquidation Amount and could therefore be terminated
before the Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of a Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner and timing of the sale of
Securities. Because the Trustee must sell the Securities within a
relatively short period of time, the sale of Securities as part of the
termination process may result in a lower sales price than might
otherwise be realized if such sale were not required at this time.
If you qualify for an In-Kind Distribution, the Trustee will send you a
form at least 30 days prior to the Mandatory Termination Date which will
enable you to receive an In-Kind Distribution (reduced by customary
transfer and registration charges) rather than the typical cash
distribution. See "Tax Status" for additional information. You must
notify the Trustee at least ten business days prior to the Mandatory
Termination Date if you elect this In-Kind Distribution option. If you
do not elect to participate in the In-Kind Distribution option, you will
receive a cash distribution from the sale of the remaining Securities,
along with your interest in the Income and Capital Accounts, within a
reasonable time after such Trust is terminated. Regardless of the
distribution involved, the Trustee will deduct from the Trusts any
accrued costs, expenses, advances or indemnities provided for by the
Indenture, including estimated compensation of the Trustee and costs of
liquidation and any amounts required as a reserve to pay any taxes or
other governmental charges.
Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, Nike Securities L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust"
brand name and other securities. An Illinois limited partnership formed
in 1991, we act as Sponsor for successive series of:
- The First Trust Combined Series
- FT Series (formerly known as The First Trust Special Situations Trust)
- The First Trust Insured Corporate Trust
- The First Trust of Insured Municipal Bonds
- The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $27 billion in First Trust unit
investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(630) 241-4141. As of December 31, 1999, the total partners' capital of
Nike Securities L.P. was $19,881,035 (audited).
Page 13
This information refers only to us and not to the Trusts or to any
series of the Trusts or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
Code of Ethics. The Sponsor and the Trusts have adopted a code of ethics
requiring the Sponsor's employees who have access to information on
Trust transactions to report personal securities transactions. The
purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to the Trusts.
The Trustee.
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. If you have questions regarding the Trusts, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities for the
Trusts; it only provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for
not taking any action in good faith according to the Indenture. We will
also not be accountable for errors in judgment. We will only be liable
for our own willful misfeasance, bad faith, gross negligence (ordinary
negligence in the Trustee's case) or reckless disregard of our
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC;
- Terminate the Indenture and liquidate the Trusts; or
- Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information,
but will not be liable to the Trustee, Sponsor or Unit holders for
errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to federal tax law. Carter, Ledyard &
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trusts.
Experts.
Ernst & Young LLP, independent auditors, have audited the Trusts'
statements of net assets, including the schedules of investments,
appearing in each Part One of this prospectus, as set forth in their
report. We've included the Trusts' statements of net assets, including
the schedules of investments, in the prospectus and elsewhere in the
registration statement in reliance on Ernst & Young LLP's report, given
on their authority as experts in accounting and auditing.
Page 14
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Page 15
FIRST TRUST (registered trademark)
THE FIRST TRUST SPECIAL SITUATIONS TRUST
FT SERIES
Prospectus
Part Two
Sponsor:
NIKE SECURITIES L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
This prospectus contains information relating to the above-mentioned
unit investment trusts, but does not contain all of the information
about this investment company as filed with the Securities and Exchange
Commission in Washington, D.C. under the:
- Securities Act of 1933 (set forth in Part One for each Trust) and
- Investment Company Act of 1940 (file no. 811-05903)
Information about the Trusts, including their Codes of Ethics, can be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington D.C. Information regarding the operation of
the Commission's Public Reference Room may be obtained by calling the
Commission at 1-202-942-8090.
Information about the Trusts is available on the EDGAR Database on the
Commission's Internet site at
http://www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0102
e-mail address: [email protected]
May 31, 2000
PLEASE RETAIN ALL PARTS OF THIS PROSPECTUS FOR FUTURE REFERENCE
Page 16
DIVERSIFIED INCOME & GROWTH TRUST SERIES
The First Trust (registered trademark) Special Situations Trust
FT Series
PROSPECTUS NOTE: THIS PART THREE PROSPECTUS
Part Three MAY ONLY BE USED WITH
Dated March 31, 2000 PART ONE AND PART TWO
The Trusts. The Trusts consist of fixed, diversified portfolios of
common stocks with current dividend yields as of the Initial Date of
Deposit of at least 70% of the dividend yield on the Standard & Poor's
500 Composite Stock Price Index (the "S&P 500 Index") (the "Equity
Securities"), chosen because of the companies' likelihood to
consistently raise annual dividends. A.G. Edwards & Sons, Inc.
Securities Research Department, along with the Sponsor, scrutinized the
dividend security and long-term growth potential of hundreds of
companies. The list of Equity Securities in the Trusts is recommended by
experienced financial professionals at A.G. Edwards & Sons, Inc. from
A.G. Edwards & Sons' Diversified Stock Income Plan ("DSIP") and is
ultimately selected by the Sponsor. The Trusts include only those stocks
initially believed to have the potential to provide a higher stream of
income and which are considered appropriate by long-term income and
growth-oriented investors with a three-year investment horizon. In the
opinion of A.G. Edwards & Sons, Inc., a company's ability to pay and
increase a dividend is an important sign of that company's financial
strength. A.G. Edwards & Sons, Inc. has employed this strategy since
1992, scrutinizing the dividend history (when applicable) and long-term
dividend growth potential of hundreds of companies. Between the time of
the creation of the DSIP list in 1992 and the Initial Date of Deposit,
175 companies had the opportunity to raise their annual dividends one or
more times since being added to the DSIP list. From this group, 165
companies (91%) had, in fact, raised their annual dividends each time
they have had the opportunity. For example, if a company had been on the
list for five years, it had raised its annual dividend five times.
Investors in the Trusts should be aware, however, that current dividend
yields are at historic lows for the market as a whole. The Trusts do not
include Treasury Obligations. See "Portfolio" appearing in Part One for
each Trust.
The Objective of the Trusts. The objective of each Trust is to provide a
higher stream of income each year and risk reduction through
diversification by investing a Trust's portfolio in selected common
stocks of companies which met the criteria stated above. There is, of
course, no guarantee that the objective of the Trusts will be achieved.
Federal Tax Status of Unit Holders. Notwithstanding anything to the
contrary in Part II of the Prospectus, this is a general discussion of
certain of the Federal income tax consequences of the purchase,
ownership and disposition of the Units. The summary is limited to
investors who hold the Units as "capital assets" (generally, property
held for investment) within the meaning of Section 1221 of the Internal
Revenue Code of 1986 (the "Code"). Unit holders should consult their tax
advisors in determining the Federal, state, local and any other tax
consequences of the purchase, ownership and disposition of Units in the
Trusts. For purposes of the following discussion and opinion, it is
assumed that each Equity Security is equity for Federal income tax
purposes and that each REIT Share (as defined below) represents a share
in an entity treated as a real estate investment trust for Federal
income tax purposes.
ALL PARTS OF THE PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Page 1
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; each Unit holder will be treated as the
owner of a pro rata portion of each of the assets of the Trusts under
the Code; and the income of the Trusts will be treated as income of the
Unit holders thereof under the Code. Each Unit holder will be considered
to have received his pro rata share of the income derived from each
Equity Security when such income is considered to be received by the
Trusts.
2. Each Unit holder will be considered to have received all of the
dividends paid on his or her pro rata portion of each Equity Security
when such dividends are received by the Trusts regardless of whether
such dividends are used to pay a portion of the deferred sales charge or
are automatically reinvested. Unit holders will be taxed in this manner
regardless of whether distributions from the Trusts are actually
received by the Unit holder or are automatically reinvested. See "How
are Income and Capital Distributed?-Distribution Reinvestment Option."
3. Each Unit holder will have a taxable event when the Trusts dispose
of an Equity Security (whether by sale, taxable exchange, liquidation,
redemption, or otherwise) or upon the sale or redemption of Units by
such Unit holder (except to the extent an In-Kind distribution of stocks
is received by such Unit holder as described below). The price a Unit
holder pays for his or her Units, generally including sales charges, is
allocated among his pro rata portion of each Equity Security held by the
Trusts (in proportion to the fair market values thereof on the valuation
date closest to the date the Unit holder purchases his or her Units) in
order to determine the tax basis for his or her pro rata portion of each
Equity Security held by such Trusts. Unit holders should consult their
own tax advisors with regard to calculation of basis. For Federal income
tax purposes, a Unit holder's pro rata portion of dividends (other than
capital gains dividends of a REIT, as described below), as defined by
Section 316 of the Code, paid by a corporation with respect to an Equity
Security held by the Trusts is taxable as ordinary income to the extent
of such corporation's current and accumulated "earnings and profits." A
Unit holder's pro rata portion of dividends paid on such Equity Security
which exceed such current and accumulated earnings and profits will
first reduce a Unit holder's tax basis in such Equity Security, and to
the extent that such dividends exceed a Unit holder's tax basis in such
Equity Security shall generally be treated as capital gain. In general,
the holding period for such capital gain will be determined by the
period of time a Unit holder has held his or her Units. Certain of the
issuers of the Equity Securities intend to qualify under special Federal
income tax rules as "real estate investment trusts" (a "REIT," shares of
such issuer held by the Trusts shall be referred to as the "REIT
Shares"). Because Unit holders are deemed to directly own a pro rata
portion of the REIT Shares as discussed above, Unit holders are advised
to consult their tax advisors for information relating to the tax
consequences of owning the REIT Shares. Provided such issuers qualify as
a REIT, certain distributions by such issuers on the REIT Shares may
qualify as "capital gain dividends," taxable to shareholders (and,
accordingly, to the Unit holders as owners of a pro rata portion of the
REIT Shares) as long-term capital gains, regardless of how long a
shareholder has owned such shares. In addition, distributions of income
or capital gains declared on REIT Shares in October, November or
December will be deemed to have been paid to shareholders (and,
accordingly, to the Unit holders as owners of a pro rata portion of the
REIT Shares) on December 31 of the year they are declared, even when
paid by the REIT during the following January and received by
shareholders or Unit holders in such following year.
4. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held by the
Trusts will generally be considered a capital gain (except in the case
of a dealer or a financial institution). A Unit holder's portion of
loss, if any, upon the sale or redemption of Units or the disposition of
Equity Securities held by the Trusts will generally be considered a
capital loss (except in the case of a dealer or a financial
institution). Unit holders should consult their tax advisors regarding
the recognition of such capital gains and losses for Federal income tax
purposes. In addition, special rules, as described below, apply to a
Unit holder's pro rata portion of the REIT Shares.
Page 2
Deferred Sales Charge. Generally, the tax basis of a Unit holder
includes sales charges, and such charges are not deductible. A portion
of the sales charge for the Trusts is deferred. It is possible that for
Federal income tax purposes a portion of the deferred sales charge may
be treated as interest which would be deductible by a Unit holder
subject to limitations on the deduction of investment interest. In such
a case, the non-interest portion of the deferred sales charge should be
added to the Unit holder's tax basis in his or her Units. The deferred
sales charge could cause the Unit holder's Units to be considered to be
debt-financed under Section 246A of the Code which would result in a
small reduction of the dividends-received deduction. In any case, the
income (or proceeds from redemption) a Unit holder must take into
account for Federal income tax purposes is not reduced by amounts
deducted to pay the deferred sales charge. Unit holders should consult
their own tax advisors as to the income tax consequences of the deferred
sales charge.
Dividends Received Deduction. A corporation that owns Units will
generally be entitled to a 70% dividends received deduction with respect
to such Unit holder's pro rata portion of dividends received by the
Trusts (to the extent such dividends are taxable as ordinary income, as
discussed above, and are attributable to domestic corporations) in the
same manner as if such corporation directly owned the Equity Securities
paying such dividends (other than corporate Unit holders, such as "S"
corporations, which are not eligible for the deduction because of their
special characteristics and other than for purposes of special taxes
such as the accumulated earnings tax and the personal holding
corporation tax). However, a corporation owning Units should be aware
that Sections 246 and 246A of the Code impose additional limitations on
the eligibility of dividends for the 70% dividends received deduction.
These limitations include a requirement that stock (and therefore Units)
must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have recently been issued which
address special rules that must be considered in determining whether the
46-day holding period requirement is met. Moreover, the allowable
percentage of the deduction will be reduced from 70% if a corporate Unit
holder owns certain stock (or Units) the financing of which is directly
attributable to indebtedness incurred by such corporation. DIVIDENDS
RECEIVED ON THE REIT SHARES ARE NOT ELIGIBLE FOR THE DIVIDENDS RECEIVED
DEDUCTION.
It should be noted that various legislative proposals that would affect
the dividends received deduction have been introduced. Unit holders
should consult with their tax advisors with respect to the limitations
on and possible modifications to the dividends received deduction.
Limitations on Deductibility of each Trust's Expenses by Unit Holders.
Each Unit holder's pro rata share of each expense paid by the Trusts is
deductible by the Unit holder to the same extent as though the expense
had been paid directly by such Unit holder. It should be noted that as a
result of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to
the extent they exceed 2% of such individual's adjusted gross income.
Unit holders may be required to treat some or all of the expenses of the
Trusts as miscellaneous itemized deductions subject to this limitation.
Unit holders should consult their tax advisors regarding the limitations
on the deductibility of Trust expenses.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by a
Trust or Disposition of Units. As discussed above, a Unit holder may
recognize taxable gain (or loss) when an Equity Security is disposed of
by a Trust or if the Unit holder disposes of a Unit. However, any loss
realized by a Unit holder with respect to the disposition of his or her
pro rata portion of the REIT Shares, to the extent such Unit holder has
owned his Units for less than six months or a Trust has held the REIT
Shares for less than six months, will be treated as long-term capital
loss to the extent of such Unit holder's pro rata portion of any capital
gain dividends received (or deemed to have been received) with respect
to the REIT Shares. The Internal Revenue Service Restructuring and
Reform Act of 1998 (the "1998 Tax Act") provides that for taxpayers
other than corporations, net capital gain (which is defined as net long-
term capital gain over net short-term capital loss for the taxable year)
realized from property (with certain exclusions) is generally subject to
a maximum marginal stated tax rate of 20% (10% in the case of certain
taxpayers in the lowest tax bracket). Capital gain or loss is long-term
if the holding period for the asset is more than one year, and is short-
term if the holding period for the asset is one year or less. The date
on which a Unit is acquired (i.e., the "trade date") is excluded for
purposes of determining the holding period of the Unit. Capital gains
realized from assets held for one year or less are taxed at the same
rates as ordinary income. Note, however, that the 1998 Tax Act (and The
Page 3
Taxpayer Relief Act of 1997 (the "1997 Act")) provide that the
application of the rules described above in the case of pass-through
entities such as REITs will be prescribed in future Treasury
Regulations. The Internal Revenue Service has released preliminary
guidance which provides that, in general, pass-through entities such as
REITs may designate their capital gain dividends as either a 20% rate
gain distribution, an unrecaptured Section 1250 gain distribution, or a
28% rate gain distribution, depending on the nature of the gain received
by the pass-through entity. Accordingly, Unit holders should consult
their own tax advisors as to the tax rate applicable to capital gain
dividends.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered
into after April 30, 1993. Unit holders and prospective investors should
consult with their tax advisors regarding the potential effect of this
provision on their investment in Units.
If the Unit holder disposes of a Unit, he or she is deemed thereby to
have disposed of his or her entire pro rata interest in all assets of a
Trust, including his or her pro rata portion of all the Equity
Securities represented by the Unit.
The 1997 Act includes provisions that treat certain transactions
designed to reduce or eliminate risk of loss and opportunities for gain
(e.g., short sales, offsetting notional principal contracts, futures or
forward contracts, or similar transactions) as constructive sales for
purposes of recognition of gain (but not loss) and for purposes of
determining the holding period. Unit holders should consult their own
tax advisors with regard to any such constructive sales rules.
Special Tax Consequences of In-Kind Distributions Upon Redemption of
Units or Termination of the Trusts. As discussed in "Rights of Unit
Holders-How are Income and Capital Distributed?", under certain
circumstances a Unit holder who owns a certain minimum number of Units
of a Trust may request an In-Kind Distribution upon the redemption of
Units or the termination of such Trust. The Unit holder requesting an In-
Kind Distribution will be liable for expenses related thereto (the
"Distribution Expenses") and the amount of such In-Kind Distribution
will be reduced by the amount of the Distribution Expenses. See "Rights
of Unit Holders-How are Income and Capital Distributed?" As previously
discussed, prior to the redemption of Units or the termination of the
Trusts, a Unit holder is considered as owning a pro rata portion of each
of a Trust's assets for Federal income tax purposes. The receipt of an
In-Kind Distribution will result in a Unit holder receiving an undivided
interest in whole shares of stock plus, possibly, cash.
The potential tax consequences that may occur under an In-Kind
Distribution will depend on whether or not a Unit holder receives cash
in addition to Equity Securities. An "Equity Security" for this purpose
is a particular class of stock issued by a particular corporation or
REIT. A Unit holder will not recognize gain or loss if a Unit holder
only receives Equity Securities in exchange for his or her pro rata
portion in the Equity Securities held by the Trusts. However, if a Unit
holder also receives cash in exchange for a fractional share of an
Equity Security held by the Trusts, such Unit holder will generally
recognize gain or loss based upon the difference between the amount of
cash received by the Unit holder and his tax basis in such fractional
share of an Equity Security held by the Trusts.
Because each Trust will own many Equity Securities, a Unit holder who
requests an In-Kind Distribution will have to analyze the tax
consequences with respect to each Equity Security owned by the Trusts.
If the Unit holder is deemed to recognize gain or loss on the In-Kind
Distribution because cash is received in addition to Equity Securities,
the amount of taxable gain (or loss) recognized upon such exchange will
generally equal the sum of the gain (or loss) recognized under the rules
described above by such Unit holder with respect to each Equity Security
owned by the Trusts. Unit holders who request an In-Kind Distribution
are advised to consult their tax advisors in this regard.
Computation of the Unit Holder's Tax Basis. Initially, a Unit holder's
tax basis in his Units will generally equal the price paid by such Unit
holder for his Units. The cost of the Units is allocated among the
Equity Securities held in the Trusts in accordance with the proportion
of the fair market values of such Equity Securities on the valuation
date nearest the date the Units are purchased in order to determine such
Unit holder's tax basis for his pro rata portion of each Equity Security.
A Unit holder's tax basis in his Units and his pro rata portion of an
Equity Security held by the Trusts will be reduced to the extent
dividends paid with respect to such Equity Security are received by the
Trusts which are not taxable as ordinary income as described above.
Page 4
General. Each Unit holder will be requested to provide the Unit holder's
taxpayer identification number to the Trustee and to certify that the
Unit holder has not been notified that payments to the Unit holder are
subject to back-up withholding. If the proper taxpayer identification
number and appropriate certification are not provided when requested,
distributions by the Trusts to such Unit holder (including amounts
received upon the redemption of Units) will be subject to back-up
withholding. Distributions by the Trusts (other than those that are not
treated as U.S. source income, if any) will generally be subject to U.S.
income taxation and withholding in the case of Units held by non-
resident alien individuals, foreign corporations or other non-U.S.
persons. Such persons should consult their tax advisors.
In general, income that is not effectively connected to the conduct of a
trade or business within the United States that is earned by non-U.S.
Unit holders and derived from dividends of foreign corporations will not
be subject to U.S. withholding tax provided that less than 25% of the
gross income of the foreign corporation for a three-year period ending
with the close of its taxable year preceding payment was not effectively
connected to the conduct of a trade or business within the United
States. In addition, such earnings may be exempt from U.S. withholding
pursuant to a specific treaty between the United States and a foreign
country. Non-U.S. Unit holders should consult their own tax advisors
regarding the imposition of U.S. withholding on distributions from the
Trusts.
It should be noted that payments to the Trusts of dividends on Equity
Securities that are attributable to foreign corporations may be subject
to foreign withholding taxes and Unit holders should consult their tax
advisors regarding the potential tax consequences relating to the
payment of any such withholding taxes by the Trusts. Any dividends
withheld as a result thereof will nevertheless by treated as income to
the Unit holders. Because, under the grantor trust rules, an investor is
deemed to have paid directly his or her share of foreign taxes that have
been paid or accrued, if any, an investor may be entitled to a foreign
tax credit or deduction for U.S. income tax purposes with respect to such
taxes. The 1997 Tax Act imposes a required holding period for such
credits. Investors should consult their tax advisors with respect to
foreign withholding taxes and foreign tax credits.
At the termination of the Trusts, the Trustee will furnish to each Unit
holder a statement containing information relating to the dividends
received by the Trusts on the Equity Securities, the gross proceeds
received by the Trusts from the disposition of any Equity Security
(resulting from redemption of the sale of any Equity Security) and the
fees and expenses paid by the Trusts. The Trustee will also furnish
annual information returns to Unit holders and to the Internal Revenue
Service.
Unit holders will be notified annually of the amounts of dividends
includable in the Unit holder's gross income and amounts of Trust
expenses which may be claimed as itemized deductions.
Unit holders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Are Investments in the Trust Eligible for
Retirement Plans?"
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the
Trusts for New York tax matters, under the existing income tax laws of
the State of New York, each Trust is not an association taxable as a
corporation and the income of the Trusts will be treated as the income
of the Unit holders thereof.
The foregoing discussion relates only to the tax treatment of United
States Unit holders ("U.S. Unit holders") with regard to United States
Federal income taxes; Unit holders may be subject to foreign, state and
local taxation. As used herein, the term "U.S. Unit holder" means an
owner of a Unit in the Trusts that (a) is (i) for United States Federal
income tax purposes a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in or
under the laws of the United States or of any political subdivision
thereof, or (iii) an estate or trust the income of which is subject to
United States Federal income taxation regardless of its source or (b)
does not qualify as a U.S. Unit holder in paragraph (a) but whose income
from a Unit is effectively connected with such Unit holder's conduct of
a United States trade or business. The term also includes certain former
citizens of the United States whose income and gain on the Units will be
taxable. Unit holders should consult their tax advisors regarding
potential foreign, state or local taxation with respect to the Units.
Unit holders should consult their tax advisors regarding potential state
or local taxation with respect to the Units.
Portfolio. The Trusts contain different issues of Equity Securities
which are listed on a national securities exchange or The Nasdaq Stock
Market or are traded in the over-the-counter market. The Equity
Page 5
Securities included in each Trust as of the Initial Date of Deposit are
of domestic companies. Certain of the Equity Securities included in each
Trust are issued by Real Estate Investment Trusts ("REITs"). There are
no preferred stock or convertible debt issues, nor are there stocks of
foreign companies.
Each Trust is designed to achieve two primary objectives:
Provide a Higher Stream of Income Each Year. With a portfolio of
stocks that have the potential to raise their dividends with regularity,
conservative, income-oriented equity investors should be better able to
keep up with the rising costs of living. An objective of the Trusts is
to provide investors with a portfolio of stocks with yields of at least
70% of the S&P 500's dividend yield that will result in a growing
dividend income over time if held for a period of time, defined as two
years or more.
Reduce Risk Through Diversification. A well-constructed portfolio
of stocks diversified across different industries and sectors can reduce
volatility and inflation risk. In fact, studies have shown that stocks
in as few as eight industries/sectors with different investment
characteristics can reduce risk to roughly that of the marketplace in
which the stocks themselves are traded.
In the Sponsor's opinion, there are several reasons to consider common
stocks of sound companies with strong dividend-paying histories. In an
uncertain market, such as we are currently experiencing, rising
dividends should be considered an important component of total return.
Typically, capital appreciation is believed to be the only important
building block in securing a financial future. Many investors, however,
fail to recognize the unique role that dividends play in providing total
value to an investment. In fact, a Barron's article (No Respect For
Dividends, June 23, 1997), quotes Charles B. Carlson, Vice President and
Editor of the Dow Theory Forecasts and DRIP Investor newsletter, as
follows: "the Standard & Poor's 500 Index for the 15-year period ended
1995 rose 354%. However, when you include dividends, the S&P 500's total
return was nearly 700%." Between November 30, 1997 and the Initial Date
of Deposit, these returns would have been 579% and 979%, respectively.
No assurance, however, can be given that the common stocks selected for
the Trusts will consistently raise dividends or that such common stocks
will provide for capital appreciation over the life of the Trusts.
Importance of Rising Dividends. Dividends should be considered an
important ingredient in the investment strategy of many investors.
Investors should look for well-managed and financially sound companies
with an outlook for solid dividend returns. Many such companies can
reward shareholders with a portion of the companies' profits in the form
of dividends with the potential to increase year after year, thus
producing strong total returns.
Reduce Volatility. Components of total return are the change in price
plus dividends an investor receives. Because prices fluctuate, dividend
income from selected, well managed companies can be a more stable
component of total return.
To illustrate the importance of emphasizing a rising dividend strategy,
and ultimately a stronger total return, consider the following
investment model, in which dividend yields rise by a half percentage
point each year for five years. This hypothetical example allows
investors to compare the importance of purchasing a stock that increases
its dividend by 5% a year, with a stock for which the dividend remains
unchanged over the entire period.
First Stock. A hypothetical dividend increasing 5% per year:
<TABLE>
<CAPTION>
Current Calculated Cumulative
Dividend* Dividend Stock Price Total
Year Rate Yield (Dividend/Yield) Return
____ ________ ______ ______________ ______
<S> <C> <C> <C> <C>
1 $1.00 5.00% $20.00
2 $1.05 5.50% $19.09
3 $1.10 6.00% $18.38
4 $1.16 6.50% $17.85
5 $1.22 7.00% $17.43 14.80%
<FN>
*Rounded for display
</FN>
</TABLE>
The 14.80% Cumulative Total Return is calculated by taking the sum of
all the annual cash dividends, $5.53, adding them to the $17.43 stock
price at the end of Year 5 for a total of $22.96, and dividing that by
the beginning price of $20.00.
$22.96 divided by $20.00 = 14.80%.
Page 6
Second Stock. A hypothetical dividend remaining unchanged:
<TABLE>
<CAPTION>
Current Calculated Cumulative
Dividend* Dividend Stock Price Total
Year Rate Yield (Dividend/Yield) Return
____ ________ ______ ______________ ______
<S> <C> <C> <C> <C>
1 $1.00 5.00% $20.00
2 $1.00 5.50% $18.18
3 $1.00 6.00% $16.67
4 $1.00 6.50% $15.38
5 $1.00 7.00% $14.29 -3.55%
<FN>
*Rounded for display
</FN>
</TABLE>
The -3.55% Cumulative Total Return is calculated by taking the sum of
all the annual cash dividends, $5.00, adding them to the $14.29 stock
price at the end of Year 5 for a total of $19.29, and dividing that by
the beginning price of $20.00.
$19.29 divided by $20.00 = -3.55%.
The first illustration shows how rising dividends have the potential to
help minimize the effects of a declining stock market in a rising
interest rate environment and enhance an investor's total return.
Hedge Against Interest Rates & Inflation. Stocks with regularly rising
dividends tend to provide a hedge against rising interest rates. The
stock prices generally tend to increase over time in recognition of that
dividend growth. Furthermore, steadily increasing dividends have the
potential to cushion a stock price's fall when interest rates rise, as
well as amplify a stock's total return when interest rates are stable or
declining.
Historically, companies that have increased their annual dividends at
above-average rates have given investors the ability to keep up with, or
even outpace, the effect inflation has on the increasing costs of
living. However, there is no assurance that the Equity Securities
selected for the Trusts will either continue to pay or raise dividends
or that the Equity Securities will provide for capital appreciation over
the life of each Trust.
Enhance Returns. Another important consideration is reinvesting
dividends. The compounding effect of reinvesting dividends year after
year can significantly enhance a portfolio's return.
If investors diversify their portfolios with companies that have the
potential to raise their dividends regularly, in the Sponsor's opinion,
conservative, income-oriented investors should be better able to enhance
their returns.
Accrued Performance. The success of this rising dividend investment
strategy may increase further with the consideration of the following
conditions. The first and the most essential condition is that investors
begin investing as early as possible. The second condition is for
investors to reinvest as many of the dividends as they can afford.
Finally, individuals must think about all of their investments in terms
of long-term performance. In particular, investors will typically
increase their profits (through contributions and possible dividends)
through participation in tax deferred investment plans, such as IRAs and
401(k) plans.
In the case of those companies which increase their earnings over time,
stock prices have the potential to increase in recognition of that
growth. Companies who choose to reward stockholders with greater
dividends (and not a majority of companies do) help investors increase
capital and produce attractive total returns over time, particularly for
those who reinvest their dividend income.
When interest rates are stable, if companies can increase their
dividends with regularity, their stock prices tend to move up over time
in recognition of that dividend growth. If interest rates are rising,
steadily increasing dividends tend to cushion the stock prices' fall. In
addition, rising dividends help amplify stocks' total returns when
interest rates are declining. Generally, when long-term interest rates
go up, stock prices usually decline. Furthermore, a diversified stock
portfolio may perform well and may even show substantial capital
appreciation, when interest rates decline.
Each Trust is designed to reduce the two primary risks investors
encounter when investing:
Volatility (near-term risk)-The price of the investment fluctuates so
that upon selling an asset, the price may be lower than what was
originally paid.
Inflation (long-term risk)-The investment's rate of appreciation does
not keep up with the rising cost of living.
It is important that investors achieve some level of growth in their
investments, regardless of inflation. Stocks have historically outpaced
Page 7
inflation and are considered one of the best investment vehicles for
providing growth. In fact, investing in companies that have increased
their annual dividends at above average rates has given investors the
ability to keep up with, or outpace, the effect inflation has on raising
the cost of living, as well as cushioning a stock's inherent volatility
risk.
Given these factors, the Trusts have been designed to provide:
Secure dividend payments;
Positive prospects for dividend growth over time;
A minimum current dividend yield for each Equity Security at least
equal to 70% of the dividend yield on the S&P 500 Index.
There is, however, no assurance that the objective of the Trusts will be
achieved.
Investors should note that A.G. Edwards & Sons, Inc., in its general
securities business, acts as agent or principal in connection with the
purchase and sale of equity securities, including the Equity Securities
in the Trusts, and may act as a market maker in certain of the Equity
Securities. A.G. Edwards & Sons, Inc. also from time to time may issue
reports on and make recommendations relating to equity securities, which
may include the Equity Securities.
The criteria for inclusion in the Trusts were applied to the Equity
Securities immediately prior to the Initial Date of Deposit. Since the
Sponsor may deposit additional Equity Securities, the Sponsor may
continue to sell Units of the Trusts even though the dividend yields on
Equity Securities may have changed and would no longer justify inclusion
in the Trusts. Equity Securities included in the Trusts may have been
rated by A.G. Edwards & Sons, Inc. in research reports as other than
buy, accumulate or maintain at the time of the Initial Date of Deposit
because of the three-year investment horizon for the Trusts which may
vary from the time horizon for research reports. In addition, the
Sponsor will continue to sell Units of the Trusts even if A.G. Edwards &
Sons, Inc. changes a recommendation relating to an Equity Security.
Investors should also note that because A.G. Edwards & Sons, Inc. uses
the list of Equity Securities which comprises a portfolio in its
independent capacity as a broker/dealer and as an investment advisor to
individuals, mutual funds, employee benefit plans and other institutions
and persons and distributes this information to various individuals and
entities, A.G. Edwards & Sons, Inc. may recommend or effect from time to
time the purchase or sale of one or more of the Equity Securities. This
may have an effect on the prices of the Equity Securities which is
adverse to the interest of the purchasers of Units of the Trusts.
Additionally, this may have an impact on the price paid by a Trust for
the Equity Securities as well as the price received upon redemption of
the Units or upon the termination of a Trust.
Public Offering. The applicable sales charge is reduced by a discount as
indicated below for volume purchases as a percentage of the Public
Offering Price (except for sales made pursuant to a "wrap fee account"
or similar arrangements as set forth below):
<TABLE>
<CAPTION>
Maximum
Dollar Amount of Transaction Sales Net Dealer
at Public Offering Price* Discount Charge Concession
______________________ ________ ________ __________
<S> <C> <C> <C>
$50,000 but less than $100,000 0.25% 3.05% 2.20%
$100,000 but less than $150,000 0.50% 2.80% 1.95%
$150,000 but less than $500,000 0.85% 2.45% 1.60%
$500,000 but less than $1,000,000 1.20% 2.10% 1.30%
$1,000,000 or more 1.75% 1.55% 1.10%
<FN>
*The breakpoint sales charges are also applied on a Unit basis utilizing
a breakpoint equivalent in the above table of $10 per Unit and will be
applied on whichever basis is more favorable to the investor. The
breakpoints will be adjusted to take into consideration purchase orders
stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
</FN>
</TABLE>
Sales will be made to dealers and other selling agents at prices which
reflect a concession or agency commission of 65% of the maximum sales
charge.
Any such reduced sales charge shall be the responsibility of the selling
broker/dealer, bank or other selling agent. The reduced sales charge
structure will apply on all purchases of Units in a Trust by the same
person on any one day from any one broker/dealer, bank or other selling
agent. Additionally, Units purchased in the name of the spouse of a
Page 8
purchaser or in the name of a child of such purchaser under 21 years of
age will be deemed, for the purposes of calculating the applicable sales
charge, to be additional purchases by the purchaser. The reduced sales
charges will also be applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary
account. The purchaser must inform the broker/dealer, bank or other
selling agent of any such combined purchase prior to the sale in order
to obtain the indicated discount. In addition, with respect to the
employees, officers and directors (including their immediate family
members, defined as spouses, children, grandchildren, parents,
grandparents, siblings, mothers-in-law, fathers-in-law, sons-in-law and
daughters-in-law, and trustees, custodians or fiduciaries for the
benefit of such persons) of the Sponsor, broker/dealers, banks or other
selling agents and their subsidiaries and vendors providing services to
the Sponsor, Units may be purchased at the Public Offering Price less
the concession the Sponsor typically allows to dealers and other selling
agents.
Units may be purchased at the Public Offering Price less the concession
the Sponsor typically allows to dealers and other selling agents for
purchases by investors who purchase Units through registered investment
advisers, certified financial planners or 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.
Page 9
Diversified Income & Growth Trust Series
The First Trust (registered trademark) Special Situations Trust
FT Series
PART THREE PROSPECTUS
Must be Accompanied by Parts One and Two
SPONSOR: Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
(800) 621-1675
TRUSTEE: The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR: 111 West Monroe Street
Chicago, Illinois 60603
LEGAL COUNSEL Carter, Ledyard & Milburn
TO TRUSTEE: 2 Wall Street
New York, New York 10005
INDEPENDENT Ernst & Young LLP
AUDITORS: Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE TRUST
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
PLEASE RETAIN ALL PARTS OF THIS PROSPECTUS FOR FUTURE REFERENCE.
Page 10
CONTENTS OF POST-EFFECTIVE AMENDMENT
OF REGISTRATION STATEMENT
This Post-Effective Amendment of Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Auditors
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 248 DIVERSIFIED INCOME & GROWTH TRUST, 1998
SPRING SERIES, certifies that it meets all of the requirements
for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment of its Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized
in the Village of Lisle and State of Illinois on June 30, 2000.
FT 248
DIVERSIFIED INCOME & GROWTH TRUST, 1998
SPRING SERIES
(Registrant)
By NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment of Registration Statement has been
signed below by the following person in the capacity and on the
date indicated:
Signature Title Date
David J. Allen Sole Director of )
Nike Securities )
Corporation, ) June 30, 2000
the General Partner )
of Nike Securities L.P. )
)
) Robert M. Porcellino
) Attorney-in-Fact**
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with the Amendment No. 1 to Form S-6 of The First Trust
Combined Series 258 (File No. 33-63483) and the same is
hereby incorporated herein by this reference.
S-2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated June 9, 2000 in this
Post-Effective Amendment to the Registration Statement and
related Prospectus of FT Series dated June 28, 2000.
ERNST & YOUNG LLP
Chicago, Illinois
June 27, 2000
