AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 19, 2000
REGISTRATION NO. 333-66199
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-6
-------------------------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
-------------------------------------
A. EXACT NAME OF TRUST:
DEFINED ASSET FUNDS
MUNICIPAL DEFINED FUND--5
B. NAME OF DEPOSITOR:
MERRILL LYNCH, PIERCE, FENNER & SMITH INC.
SALOMON SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
DEAN WITTER REYNOLDS INC.
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
<TABLE>
<S> <C> <C>
MERRILL LYNCH, PIERCE,
FENNER & SMITH
INCORPORATED
DEFINED ASSET FUNDS
POST OFFICE BOX 9051
PRINCETON, NJ 08543-9051 SALOMON SMITH BARNEY INC.
388 GREENWICH
STREET--23RD FLOOR
NEW YORK, NY 10013
</TABLE>
<TABLE>
<S> <C> <C>
PAINEWEBBER INCORPORATED
1285 AVENUE OF THE
AMERICAS
NEW YORK, NY 10019 DEAN WITTER REYNOLDS INC.
TWO WORLD TRADE
CENTER--59TH FLOOR
NEW YORK, NY 10048
</TABLE>
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
<TABLE>
<CAPTION>
<S> <C> <C>
TERESA KONCICK, ESQ.
P.O. BOX 9051
PRINCETON, NJ 08543-9051
MICHAEL KOCHMANN
388 GREENWICH STREET
NEW YORK, NY 10013
COPIES TO: DOUGLAS LOWE, ESQ.
PIERRE DE SAINT PHALLE, DEAN WITTER REYNOLDS INC.
ROBERT E. HOLLEY ESQ. TWO WORLD TRADE
1200 HARBOR BLVD. 450 LEXINGTON AVENUE CENTER--59TH FLOOR
WEEHAWKEN, NJ 07087 NEW YORK, NY 10017 NEW YORK, NY 10048
</TABLE>
The issuer has registered an indefinite number of Units under the Securities Act
of 1933 pursuant to Rule 24f-2 and filed the Rule 24f-2 Notice for the most
recent fiscal year on March 25, 2000.
Check box if it is proposed that this filing will become effective on January
28, 2000 pursuant to paragraph (b) of Rule 485. /X/
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<PAGE>
DEFINED ASSET FUNDS--REGISTERED TRADEMARK--
----------------------------------------------------
MUNICIPAL DEFINED FUND--5
(A UNIT INVESTMENT TRUST)
- PORTFOLIO OF INSURED LONG TERM MUNICIPAL BONDS
- DESIGNED TO BE FREE OF REGULAR FEDERAL INCOME TAX
- DISTRIBUTIONS TWICE A YEAR
SPONSORS:
MERRILL LYNCH, -----------------------------------------------------
PIERCE, FENNER & SMITH The Securities and Exchange Commission has not
INCORPORATED approved or disapproved these Securities or passed
SALOMON SMITH BARNEY INC. upon the adequacy of this prospectus. Any
PAINEWEBBER INCORPORATED representation to the contrary is a criminal offense.
DEAN WITTER REYNOLDS INC. Prospectus dated January 28, 2000.
<PAGE>
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Defined Asset Funds--Registered Trademark--
Defined Asset Funds-Registered Trademark- is America's oldest and largest family
of unit investment trusts, with over $160 billion sponsored over the last 28
years. Defined Asset Funds has been a leader in unit investment trust research
and product innovation. Our family of Funds helps investors work toward their
financial goals with a full range of quality investments, including municipal,
corporate and government bond portfolios, as well as domestic and international
equity portfolios.
Defined Asset Funds offer a number of advantages:
- A disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
- Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
- Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
- Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
- Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.
THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF THE EVALUATION DATE,
OCTOBER 29 1999.
<TABLE>
<S> <C>
CONTENTS
PAGE
----
Risk/Return Summary.................. 3
What You Can Expect From Your
Investment......................... 7
Monthly Income..................... 7
Return Figures..................... 7
Records and Reports................ 7
The Risks You Face................... 8
Interest Rate Risk................. 8
Call Risk.......................... 8
Reduced Diversification Risk....... 8
Liquidity Risk..................... 8
Collateral Related Risk............ 8
Concentration Risk................. 8
Bond Quality Risk.................. 9
Insurance Related Risk............. 9
Litigation and Legislation Risks... 9
Selling or Exchanging Units.......... 9
Sponsors' Secondary Market......... 9
Selling Units to the Trustee....... 10
Exchange Option.................... 10
How The Fund Works................... 11
Pricing............................ 11
Evaluations........................ 11
Income............................. 11
Expenses........................... 11
Portfolio Changes.................. 12
Fund Termination................... 12
Certificates....................... 12
Trust Indenture.................... 13
Legal Opinion...................... 13
Auditors........................... 13
Sponsors........................... 14
Trustee............................ 14
Underwriters' and Sponsors'
Profits.......................... 14
Public Distribution................ 14
Code of Ethics..................... 14
Year 2000 Issues................... 15
Taxes................................ 15
Supplemental Information............. 16
Financial Statements................. D-1
</TABLE>
2
<PAGE>
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RISK/RETURN SUMMARY
<TABLE>
<C> <S>
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is
exempt from regular federal income taxes
by investing in a fixed portfolio
consisting of municipal bonds with an
estimated average life of 26 years.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued
by states, municipalities and public
authorities to finance the cost of
buying, building or improving various
projects intended to generate revenue,
such as airports, health care
facilities, housing and municipal
electric, water and sewer utilities.
Generally, payments on these bonds
depend solely on the revenues generated
by the projects, excise taxes or state
appropriations, and are not backed by
the government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 19
insured long-term tax-exempt municipal
bonds [, and some short-term bonds
reserved to pay the deferred sales
charge,] with a current aggregate face
amount of $14,930,000. The Fund is a
unit investment trust which means that,
unlike a mutual fund, the Fund's
portfolio is not managed.
- When they were initially deposited, the
bonds were rated A or better by Standard
& Poor's, Moody's or Fitch or in the
opinion of the agent for the Sponsors
had similar credit quality to the other
bonds in the portfolio. Their credit
quality may currently be lower.
- Most of the bonds cannot be called for
several years, and after that they can
be called at a premium declining over
time to par value. at a premium
declining over time to Some bonds may be
called earlier at par for extraordinary
reasons.
- 29% of the bonds are insured by
insurance companies rated A or better,
which guarantee timely payments of
principal and interest on the bonds (but
not Fund units or the market value of
the bonds before they mature).
The Portfolio consists of municipal
bonds of the following types:
</TABLE>
<TABLE>
- Airports/Ports/Highways 7%
<C> <S>
- General Obligation 1%
- Housing 7%
- General Obligation 1%
- Hospital/Health Care 39%
- Housing 7%
- Lease Rental 8%
- Moral Obligations 8%
- Special Tax 8%
- Miscellaneous 6%
- University/College 15%
</TABLE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
hospital/health care bonds, adverse
developments in this industry may affect
the value of your units.
- Assuming no changes in interest rates,
when you sell your units, they will
generally be worth less than your cost
because your cost included a sales fee.
- The Fund will receive early returns of
principal if bonds are called or sold
before they mature. If this happens your
income will decline and you may not be
able to reinvest the money you receive
at as high a yield or as long a
maturity.
</TABLE>
<TABLE>
<C> <S>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free
income. You will benefit from a
professionally selected and supervised
portfolio whose risk is reduced by
investing in lont-term bonds of several
different issuers.
The Fund is NOT appropriate for you if
you want a speculative investment that
changes to take advantage of market
movements, if you do not want a
tax-advantaged investment or if you
cannot tolerate any risk.
</TABLE>
3
<PAGE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
WHAT YOU MAY EXPECT (PAYABLE ON THE 10TH DAY
OF EACH JUNE AND DECEMBER):
Regular Semi-Annual Income per 1,000 units
(each June and December): $26.11
Annual Income per 1,000 units $52.23
RECORD DAY: 10th day of each June ane
December
THESE FIGURES ARE ESTIMATES ON THE EVALUATION DATE;
ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
You will pay an up-front sales fee of 1.476% as well
as a deferred sales fee of $14.24 per 1,000 units
(paind in quarterly installments). Employees of some
of the Sponsors and their affiliates may pay a reduced
sales fee of at least $5.00 per 1,000 units.
The maximum sales fee is reduced if you invest at
least $100,000, as follows:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
$100,000 to $249,999 2.65
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$ 0.52
Trustee's Fee
$ 0.40
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.08
Evaluator's Fee
$ 0.16
Other Operating Expenses
------
$ 1.16
TOTAL
</TABLE>
<TABLE>
<C> <S>
The Sponsors historically paid updating
expenses.
</TABLE>
<TABLE>
<C> <S>
7. IS THE FUND MANAGED?
UNLIKE A MUTUAL FUND, FUND IS NOT
MANAGED AND BONDS ARE NOT SOLD BECAUSE
OF MARKET CHANGES. RATHER, EXPERIENCED
DEFINED ASSET FUNDS FINANCIAL ANALYSTS
REGULARLY REVIEW THE BONDS IN THE FUND.
THE FUND MAY SELL A BOND IF CERTAIN
ADVERSE CREDIT OR OTHER CONDITIONS
EXIST.
8. HOW DO I BUY UNITS?
The minimum investment is $250.
You can buy units from any of the
Sponsors and other broker-dealers. The
Sponsors are listed later in this
prospectus. Some banks may offer units
for sale through special arrangements
with the Sponsors, although certain
legal restrictions may apply.
</TABLE>
<TABLE>
<C> <S>
UNIT PRICE PER UNIT $893.78
(as of October 29, 1999)
Unit price is based on the net asset
value of the Fund plus the sales fee. An
amount equal to any principal cash, as
well as net accrued but undistributed
interest on the unit, is added to the
unit price. An independent evaluator
prices the bonds at 3:30 p.m. Eastern
time every business day. Unit price
changes every day with changes in the
prices of the bonds in the Fund.
</TABLE>
9. HOW DO I SELL UNITS? You may sell your units at any time to any Sponsor or
the Trustee for the net asset value determined at the close of business on the
date of sale, less any remaining deferred sales fee. You will not pay any other
fee
when you sell your units.
10. HOW ARE DISTRIBUTIONS MADE AND TAXED? The Fund pays income twice a year. In
the opinion of bond counsel when each bond was issued, interest on the bonds in
this Fund is generally 100% exempt from regular federal income tax. A portion of
the income may also be exempt from state and local personal income taxes,
depending on where you live.
You will also receive principal payments if bonds are sold or called or mature,
when the cash available is more than $10.00 per 1,000 units. You will be subject
to tax on any gain realized by the Fund on the disposition of bonds.
4
<PAGE>
11. WHAT OTHER SERVICES ARE AVAILABLE? REINVESTMENT
You will receive your semi-annual income in cash unless you choose to compound
your income by reinvesting at no sales fee in the Municipal Fund Investment
Accumulation Program, Inc. This Program is an open-end mutual fund with a
comparable investment objective. Income from this Program will generally be
subject to state and local income taxes. FOR MORE COMPLETE INFORMATION ABOUT THE
PROGRAM, INCLUDING CHARGES AND FEES, ASK THE TRUSTEE FOR THE PROGRAM'S
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST. THE TRUSTEE MUST RECEIVE YOUR
WRITTEN ELECTION TO REINVEST AT LEAST 10 DAYS BEFORE THE RECORD DAY OF AN INCOME
PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain other Defined Asset
Funds. You may also exchange into this Fund from certain other funds. We charge
a reduced sales fee on exchanges.
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
<TABLE>
EFFECTIVE
TAXABLE INCOME 1999* % TAX TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN BRACKET 3% 3.5% 4% 4.5% 5% 5.5% 6%
IS EQUIVALENT TO A TAXABLE YIELD OF
<S> <C>
TAXABLE INCOME 19
SINGLE RETURN 6.5%
IS
EQUIVALENT
TO A
TAXABLE
YIELD OF
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
$ 0- 25,750 $ 0- 43,050 15.00 3.53 4.12 4.71 5.29 5.88 6.47 7.06
- ---------------------------------------------------------------------------------------------------------------------------
$ 25,751- 62,450 $ 43,051-104,050 28.00 4.17 4.86 5.56 6.25 6.94 7.64 8.33
- ---------------------------------------------------------------------------------------------------------------------------
$ 62,451-130,250 $104,051-158,550 31.00 4.35 5.07 5.80 6.52 7.25 7.97 8.70
- ---------------------------------------------------------------------------------------------------------------------------
$130,251-283,150 $158,551-283,150 36.00 4.69 5.47 6.25 7.03 7.81 8.59 9.38
- ---------------------------------------------------------------------------------------------------------------------------
OVER $283,151 OVER $283,151 39.60 4.97 5.79 6.62 7.45 8.28 9.11 9.93
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
- -----------------
$ 0- 25,750 7.65
- -----------------
$ 25,751- 62,450 9.03
- -----------------
$ 62,451-130,250 9.42
--------
- -----------------
$130,251-283,150 10.16
--------
- -----------------
OVER $283,151 10.76
--------
- -----------------
</TABLE>
To compare the yield of a taxable security with the yield of a federally
tax-free security, find your taxable income and read across. The table
incorporates 1999 federal income tax rates and assumes that all income would
otherwise be taxed at a U.S. investor's highest tax rate. Yield figures are for
example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase-out of
exemptions, itemized deductions, the possible partial disallowance of deductions
or state and local taxation. Consequently, investors are urged to consult their
own tax advisers in this regard.
5
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
INCOME TWICE A YEAR
The Fund will pay you regular income twice a year. Your income may vary because
of:
- elimination of one or more bonds from the Fund's portfolio because of calls,
redemptions or sales;
- a change in the Fund's expenses; or
- the failure by a bond's issuer to pay interest.
Changes in interest rates generally will not affect your income because the
portfolio is fixed.
Along with your income, you will receive your share of any available bond
principal.
RETURN FIGURES
We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.
ESTIMATED CURRENT RETURN equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):
<TABLE>
<S> <C> <C>
Estimated Annual Estimated
Interest Income - Annual Expenses
- -------------------------------------
Unit Price
</TABLE>
ESTIMATED LONG TERM RETURN is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.
Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.
These return quotations are designed to be comparative rather than predictive.
RECORDS AND REPORTS
You will receive:
- - a statement of income payments twice a year;
- - a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
- - an annual report on Fund activity; and
- - annual tax information. THIS WILL ALSO BE SENT TO THE IRS. YOU MUST REPORT THE
AMOUNT OF TAX-EXEMPT INTEREST RECEIVED DURING THE YEAR.
You may request:
- - copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
- - audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
THE RISKS YOU FACE
INTEREST RATE RISK
Investing involves risks, including the risk that your investment will decline
in value if
6
<PAGE>
interest rates rise. Generally, bonds with longer maturities will change in
value more than bonds with shorter maturities. Bonds in the Fund are more likely
to be called when interest rates decline. This would result in early returns of
principal to you and may result in early termination of the Fund. Of course, we
cannot predict how interest rates may change.
CALL RISK
Many bonds can be prepaid or "called" by the issuer before their stated
maturity.
Some bonds may be required to be called incrementally pursuant to mandatory
sinking fund provisions.
Also, an issuer might call its bonds during periods of falling interest rates,
if the issuer's bonds have a coupon higher than current market rates.
In extraordinary cases, an issuer might be able to call its bonds if, for
example:
- it no longer needs the money for the original purpose;
- the project is condemned or sold;
- the project is destroyed and insurance proceeds are used to redeem the
bonds;
- any related credit support expires and is not replaced; or
- interest on the bonds become taxable.
If the bonds are called, your income will decline and you may not be able to
reinvest the money you receive at as high a yield or as long a maturity. An
early call at par of a premium bond will reduce your return.
REDUCED DIVERSIFICATION RISK
If many investors sell their units, the Fund will have to sell bonds. This could
reduce the diversification of your investment and increase your share of Fund
expenses.
LIQUIDITY RISK
The bonds will generally trade in the over-the-counter market. We cannot assure
you that a liquid trading market will exist, especially since current law may
restrict the Fund from selling bonds to any Sponsor. The value of the bonds, and
of your investment, may be reduced if trading in bonds is limited or absent.
CONCENTRATION RISK
When a certain type of bond makes up 25% or more of the portfolio, the Fund is
said to be "concentrated" in that bond type, which makes the Fund less
diversified.
Here is what you should know about the Fund's concentration in hospital and
health care bonds.
- payment for these bonds depends on revenues from private third-party payors
and government programs, including Medicare and Medicaid, which have
generally undertaken cost containment measures to limit payments to health
care providers;
- hospitals face increasing competition resulting from hospital mergers and
affiliations;
- hospitals need to reduce costs as HMOs increase market penetration and
hospital supply and drug companies raise prices; and
- hospitals and health care providers are subject to various legal claims by
patients and others and are adversely affected by increasing costs of
insurance.
- many hospitals are aggressively buying physician practices and assuming risk
contracts to gain market share. If revenues do not increase accordingly,
this practice could reduce profits.
7
<PAGE>
- Medicare is changing its reimbursement system for nursing homes. Many
nursing home providers are not sure how they will be treated. In many cases,
the providers may receive lower reimbursements and these would have to cut
expenses to maintain profitability.
- most retirement/nursing home providers rely on entrance fees for operating
revenues. If people live longer than expected and turnover is lower than
budgeted, operating revenues would be adversely affected by less than
expected entrance fees.
Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentration over time.
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.
INSURANCE RELATED RISK
Some bonds are backed by insurance companies (as shown under Portfolio).
Insurance policies generally make payments only according to a bond's original
payment schedule and do not make early payments when a bond defaults or becomes
taxable. Although the federal government does not regulate the insurance
business, various state laws and federal initiatives and tax law changes could
significantly affect the insurance business. The claims-paying ability of the
insurance companies is generally rated A or better by Standard & Poor's or
another nationally recognized rating organization. The insurance company ratings
are subject to change at any time at the discretion of the rating agencies.
LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
Future tax legislation could affect the value of the portfolio by:
- limiting real property taxes,
- reducing tax rates,
- imposing a flat or other form of tax, or
- exempting investment income from tax.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:
- ADDING the value of the bonds, net accrued interest, cash and any other Fund
assets;
- SUBTRACTING accrued but unpaid Fund expenses, unreimbursed Trustee advances,
cash held to buy back units or for distribution to investors and any other
Fund liabilities; and
- DIVIDING the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.
If you sell your units before the final deferred sales fee installment, the
amount of any remaining installments will be deducted from your proceeds.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge other than any remaining deferred sales charge.
We may resell the units to other buyers or to the Trustee. You should
8
<PAGE>
consult your financial professional for current market prices to determine if
other broker-dealers or banks are offering higher prices.
We may discontinue the secondary market without prior notice for any business
reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold Unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional documents are
needed such as a trust document, certificate of corporate authority, certificate
of death or appointment as executor, administrator or guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a
higher price, but the Trustee is not required to do so. In that case, you will
receive the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.
If you acquire 25% or more of the outstanding units of the Fund and you sell
units with a value exceeding $250,000, the Trustee may choose to pay you "in
kind" by distributing bonds and cash with a total value equal to the price of
those units. The Trustee will try to distribute bonds in the portfolio pro rata,
but it reserves the right to distribute only one or a few bonds. The Trustee
will act as your agent in an in kind distribution and will either hold the bonds
for your account or sell them as you instruct. You must pay any transaction
costs as well as transfer and ongoing custodial fees on sales of bonds
distributed in kind.
There could be a delay in paying you for your units:
- if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
- if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
bonds not reasonably practicable; and
- for any other period permitted by SEC order.
EXCHANGE OPTION
You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 1.90%. You may exchange units of this Fund for units
of certain other Defined Asset Funds at a reduced sales fee if your investment
goals change. To exchange units, you should talk to your financial professional
about what funds are exchangeable, suitable and currently available.
9
<PAGE>
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.
We may amend or terminate this exchange option at any time without notice.
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the bonds, less expenses, from
the initial date of deposit up to, but not including, the settlement date, which
is usually three business days after the purchase date of the unit.
In addition, a portion of the price of a unit also consists of cash to pay all
or some of the costs of organizing the Fund including:
- cost of initial preparation of legal documents;
- federal and state registration fees;
- initial fees and expenses of the Trustee;
- initial audit; and
- legal expenses and other out-of-pocket expenses.
EVALUATIONS
An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
Bond values are based on current bid or offer prices for the bonds or comparable
bonds. In the past, the difference between bid and offer prices of publicly
offered tax-exempt bonds has ranged from 0.5% of face amount on actively traded
issues to 3.5% on inactively traded issues; the difference has averaged between
1 and 2%.
INCOME
The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.
EXPENSES
The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:
- to reimburse the Trustee for the Fund's operating expenses;
- for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
- costs of actions taken to protect the Fund and other legal fees and
expenses;
- expenses for keeping the Fund's registration statement current; and
- Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 55 CENTS per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. While this
fee may exceed the amount of these costs and expenses attributable to this Fund,
the total of these fees for all Series of Defined Asset Funds will not exceed
the aggregate
10
<PAGE>
amount attributable to all of these Series for any calendar year. The Fund also
pays the Evaluator's fees.
The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.
Quarterly deferred sales charges you owe are paid with interest and principal
from certain bonds. If these amounts are not enough, the rest will be paid out
of distributions to you from the Fund's Capital and Income Accounts.
The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the Fund will owe the excess. The
Trustee has a lien on Fund assets to secure reimbursement of Fund expenses and
may sell bonds if cash is not available.
PORTFOLIO CHANGES
The Sponsors and Trustee are not liable for any default or defect in a bond.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
bonds in the portfolio even if their credit quality declines or other adverse
financial circumstances occur. However, we may sell a bond in certain cases if
we believe that certain adverse credit conditions exist or if a bond becomes
taxable.
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which will affect the size
and composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
- diversity of the portfolio;
- size of the Fund relative to its original size;
- ratio of Fund expenses to income;
- current and long-term returns;
- degree to which units may be selling at a premium over par; and
- cost of maintaining a current prospectus.
FUND TERMINATION
The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of bonds deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.
When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final sale.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.
11
<PAGE>
CERTIFICATES
Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.
TRUST INDENTURE
The Fund is a "unit investment trust" governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
- to cure ambiguities;
- to correct or supplement any defective or inconsistent provision;
- to make any amendment required by any governmental agency; or
- to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Fund without your written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
- it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
- it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsors and the Trustee without the consent of
investors. The resignation or removal of either becomes effective when a
successor accepts appointment. The Sponsors will try to appoint a successor
promptly; however, if no successor has accepted within 30 days after notice of
resignation, the resigning Trustee or Evaluator may petition a court to appoint
a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
- remove it and appoint a replacement Sponsor;
- liquidate the Fund; or
- continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.
12
<PAGE>
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
special counsel for the Sponsors, has given an opinion that the units are
validly issued.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statement of Condition included in this
prospectus.
SPONSORS
The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.) P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
13
<PAGE>
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
TRUSTEE
The Bank of New York, 101 Barclay Street--17W, New York, New York 10268 is the
Trustee. It is supervised by the Federal Deposit Insurance Corporation, the
Board of Governors of the Federal Reserve System and New York State banking
authorities.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. Sponsors also realized
a profit or loss on the initial deposit of the bonds. Any cash made available by
you to the Sponsors before the settlement date for those units may be used in
the Sponsors' businesses to the extent permitted by federal law and may benefit
the Sponsors.
A Sponsor or Underwriter may have realized profits or sustain losses on bonds in
the Fund which were acquired from underwriting syndicates of which it was a
member.
In maintaining a secondary market, the Sponsors will also realize profits or
sustain losses in the amount of any difference between the prices at which they
buy units and the prices at which they resell or redeem them.
PUBLIC DISTRIBUTION
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
CODE OF ETHICS
Merrill Lynch, as agent for the Sponsors, has adopted a code of ethics requiring
preclearance and reporting of personal securities transactions by its employees
with access to information on portfolio transactions. The goal of the code is to
prevent fraud, deception or misconduct against the Fund and to provide
reasonable standards of conduct.
TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances or subject to
special rules. You should consult your own tax adviser about your particular
circumstances.
At the date of issue of each bond, counsel for the issuer delivered an opinion
to the effect that interest on the bond is exempt from regular federal income
tax. However, interest may be subject to state and local taxes and may be taken
into account in determining your preference items for alternative minimum tax
purposes. Neither we nor our counsel have reviewed the issuance of the bonds,
related proceedings or the basis for the opinions of counsel for the issuers. We
cannot assure you that the issuer (or other users) have complied or will comply
with any requirements necessary for a bond to be tax-exempt. If any of the
14
<PAGE>
bonds were determined not to be tax-exempt, you could be required to pay income
tax for current and prior years, and if the Fund were to sell the bond, it might
have to sell it at a substantial discount.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each bond in the Fund.
GAIN OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued "market
discount". Generally you will have market discount to the extent that your basis
in a bond when you purchase a unit is less than its stated redemption price at
maturity (or, if it is an original issue discount bond, the issue price
increased by original issue discount that has accrued on the bond before your
purchase). You should consult your tax adviser in this regard.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will be long-term if you are considered to have held
your investment on each bond for more than one year and short-term otherwise. If
you are an individual and sell your units after holding them for more than 12
months, you may be entitled to a 20% maximum federal tax rate on any resulting
gains. Consult your tax adviser in this regard. Because the deductibility of
capital losses is subject to limitations, you may not be able to deduct all of
your capital losses.
YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges and the organizational expenses you pay, adjusted to
reflect any accruals of "original issue discount," "acquisition premium" and
"bond premium". You should consult your tax adviser in this regard.
EXPENSES
If you are not a corporate investor, you will not be entitled to a deduction for
your share of fees and expenses of the Fund. Also, if you borrowed money in
order to purchase or carry your units, you will not be able to deduct the
interest on this borrowing for federal income tax purposes. The IRS may treat
your purchase of units as made with borrowed money even if the money is not
directly traceable to the purchase of units.
STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation. If you are a New York taxpayer, your income from the
Fund will not be tax-exempt in New York except to the extent that the income is
earned on bonds that are tax-exempt for New York purposes. Depending on where
you live, your income from the Fund may be subject to state and local taxation.
You should consult your tax adviser in this regard.
15
<PAGE>
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolio, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.
16
<PAGE>
DEFINED ASSET FUNDS,
MUNICIPAL DEFINED FUND SERIES - 5,
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Defined Asset Funds - Municipal
Defined Fund Series - 5:
We have audited the accompanying statement of condition of Defined
Asset Funds, Municipal Defined Fund Series - 5, including the
portfolio, as of October 31, 1999 and the related statements of
operations and of changes in net assets for the period November 20,
1998 to October 31, 1999. These financial statements are the
responsibility of the Trustee. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. Securities owned at October 31, 1999, as shown
in such portfolio, were confirmed to us by The Bank of New York, the
Trustee. An audit also includes assessing the accounting principles
used and significant estimates made by the Trustee, as well as
evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Defined
Asset Funds, Municipal Defined Fund Series - 5, at October 31, 1999
and the results of its operations and changes in its net assets for
the above-stated period in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
January 10, 2000
D - 1
<PAGE>
DEFINED ASSET FUNDS
MUNICIPAL DEFINED FUND SERIES - 5,
STATEMENT OF CONDITION
AS OF OCTOBER 31, 1999
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $14,884,830)(Note 1).................. $12,947,299
Accrued interest receivable................... 234,302
Accrued interest on segregated bonds.......... 2,829
Cash.......................................... 42,184
_____________
Total trust property.............. 13,226,614
LESS LIABILITIES:
Deferred sales charge......................... $ 60,334
Accrued expenses.............................. 6,750 67,084
_____________ _____________
NET ASSETS, REPRESENTED BY:
14,699,006 units of fractional undivided
interest outstanding (Note 3)............... 12,889,794
Undistributed net investment income........... 269,736
_____________
$13,159,530
=============
UNIT VALUE ($13,159,530/14,699,006 units)....... $0.89527
=============
</TABLE>
See Notes to Financial Statements.
D - 2
<PAGE>
DEFINED ASSET FUNDS
MUNICIPAL DEFINED FUND SERIES - 5,
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
November 20,
1998
to
October 31,
1999
_____________
<S> <C>
INVESTMENT INCOME:
Interest income........................... $ 719,370
Interest income on segregated bonds....... 9,164
Trustee's fees and expenses............... (4,275)
Sponsors' fees............................ (5,544)
_____________
Net investment income..................... 718,715
_____________
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized loss on securities sold
or redeemed............................. (24,145)
Unrealized depreciation of investments.... (1,937,531)
_____________
Net realized and unrealized loss on
investments............................. (1,961,676)
_____________
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................... $(1,242,961)
=============
</TABLE>
See Notes to Financial Statements.
D - 3
<PAGE>
DEFINED ASSET FUNDS
MUNICIPAL DEFINED FUND SERIES - 5,
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
November 20,
1998
to
October 31,
1999
_____________
<S> <C>
OPERATIONS:
Net investment income....................... $ 718,715
Realized loss on securities sold
or redeemed............................... (24,145)
Unrealized depreciation of investments...... (1,937,531)
_____________
Net decrease in net assets resulting
from operations........................... (1,242,961)
INCOME DISTRIBUTIONS TO HOLDERS (Note 2)...... (437,401)
DEFERRED SALES CHARGE (Note 5)................ (75,686)
CAPITAL SHARE TRANSACTIONS - Redemptions of
300,994 units............................... (280,072)
_____________
NET DECREASE IN NET ASSETS.................... (2,036,120)
NET ASSETS AT BEGINNING OF PERIOD............. 15,195,650
_____________
NET ASSETS AT END OF PERIOD................... $13,159,530
=============
PER UNIT:
Income distributions during period.......... $0.02916
=============
Net asset value at end of period............ $0.89527
=============
TRUST UNITS OUTSTANDING AT END OF PERIOD...... 14,699,006
=============
</TABLE>
See Notes to Financial Statements.
D - 4
<PAGE>
DEFINED ASSET FUNDS
MUNICIPAL DEFINED FUND SERIES - 5,
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as
a Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator
based on bid side evaluations for the securities, except that value
on November 20, 1998, was based upon offer side evaluations at
November 18, 1998 the day prior to the Date of Deposit. Cost of
securities at November 20, 1998 was also based on such offer side
evaluations.
(b) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(c) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each
month. Receipts other than interest, after deductions for
redemptions and applicable expenses, are also distributed
periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 14,699,006 units at Date of Deposit......... $14,890,730
Redemptions of units - net cost of 300,994 units
redeemed less redemption amounts.................. 27,262
Realized loss on securities sold or redeemed........ (24,145)
Deferred sales charge............................... (75,686)
Interest income on segregated bonds................. 9,164
Unrealized depreciation of investments.............. (1,937,531)
______________
Net capital applicable to Holders................... $12,889,794
==============
</TABLE>
4. INCOME TAXES
As of October 31, 1999, unrealized depreciation of investments, based
on cost for Federal income tax purposes, aggregated $1,937,531, all of
which related to depreciated securities. The cost of investment
securities for Federal income tax purposes was $14,884,830 at
October 31, 1999.
D - 5
<PAGE>
DEFINED ASSET FUNDS
MUNICIPAL DEFINED FUND SERIES - 5,
NOTES TO FINANCIAL STATEMENTS
5. DEFERRED SALES CHARGE
A deferred sales fee of $19.00 per 1,000 units is payable over a two-
year period ($2.38 per 1,000 units quarterly in the first year and $2.37
per 1,000 units quarterly in the second year.)
D - 6
<PAGE>
DEFINED ASSET FUNDS
MUNICIPAL DEFINED FUND SERIES - 5,
PORTFOLIO
AS OF OCTOBER 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
__________ _________ ______ ______ _____________ _____________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 Louisiana Offshore Terminal Auth., A $ 1,090,000 5.200% 2018 10/01/08 $ 1,094,098 $ 973,970
Deepwater Port Rfdg. Rev. Bonds @ 100.000
(LOOP LLC Proj.), Ser. 1998
2 City of Easton, Northhampton Cnty., Aaa(m) 25,000 3.550 1999 None 25,168 24,994
PA, G.O Bonds, Ser. 1998 (AMBAC 30,000 3.700 2000 None 30,201 29,917
Ins.)(3)(4)
3 Illinois Hlth. Fac. Auth. Rev. A- 600,000 5.750 2027 08/15/07 624,918 534,258
Bonds (Victory Hlth. Svcs.), Ser. @ 101.000
1997 A
4 New Hampshire Higher Educl. and A 1,150,000 4.875 2028 07/01/08 1,077,297 902,763
Hlth. Facs. Auth., Hosp. Rev. Bonds @ 101.000
(The Cheshire Med. Ctr. Issue),
Ser. 1998
5 New Mexico Hosp. Equip. Loan A-(f) 1,020,000 5.375 2018 06/01/08 1,020,000 885,268
Council, Hosp. Rev. Bonds (Mem. @ 101.000
Med. Ctr. Inc. Proj.), Ser. 1998
6 Cumberland Cnty. Mun. Auth., PA, A 1,060,000 6.000 2026 12/01/06 1,118,650 1,013,561
Rev. Bonds (Presbyterian Homes, Inc. @ 100.000
Proj.), Ser. 1996 (ACA Ins.)(3)
7 The Health, Educl. and Hsg. Facs. A- 1,000,000 5.250 2028 06/01/08 992,550 828,460
Bd. of the City of Chattanooga, TN, @ 101.000
Hosp. Imp. and Rfdg. Rev. Bonds
(Siskin Hosp. for Physical Rehab.,
Inc. Proj.), Ser. 1998
8 Bell Cnty. Hlth. Facs. Dev. Corp., A- 1,040,000 5.250 2028 11/15/08 1,024,535 854,901
TX, Retirement Fac. Rev. Bonds @ 101.000
(Bucker Retirement Svcs. Inc.
Obligated Grp. Proj.) Ser. 1998
</TABLE>
D - 7
<PAGE>
DEFINED ASSET FUNDS
MUNICIPAL DEFINED FUND SERIES - 5,
PORTFOLIO
AS OF OCTOBER 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
__________ _________ ______ ______ _____________ _____________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
9 Missouri Dev. Fin. Bd., Multifamily AA $ 1,050,000 5.600% 2028 09/15/07 $ 1,058,379 $ 976,353
Hsg. Rev. Rfdg. Bonds (Quality Hill @ 101.000
Proj.), Ser. 1999 A (Asset Guaranty
Ins.)(3)
10 State of Hawaii, Certs. of Part. AAA 45,000 3.800 2001 None 45,104 44,474
(Kapolei State Office Bldg.), Ser.
1998 A (AMBAC Ins.)(4)
11 Oklahoma City Pub. Prop. Auth., OK, AA 1,150,000 5.250 2023 10/01/08 1,150,000 995,382
Rev. Rfdg. and Imp. Bonds (Oklahoma @ 100.000
City Golf Sys.), Ser. 1998 (Asset
Guaranty Ins.)(3)
12 Mississippi Dev. Bank, Special A 1,150,000 5.000 2028 07/01/08 1,115,362 913,813
Oblig. Bonds (Panola Cnty., @ 102.000
Mississippi Hosp. Rev. Bonds
Proj.), Ser. 1998
13 City of Kansas City, MO, Sewerage AA- 45,000 5.600 2000 None 46,233 45,263
Sys. Rfdg. and Imp. Rev. Bonds,
Ser. 1992 (4)
14 City of Grand Prairie, TX, Wtr. and AAA 95,000 3.600 2000 None 95,225 94,930
Wastewater Sys. Rev. Bonds (Dallas,
Tarrant and Ellis Countries), Ser.
1998 (MBIA Ins.)(3)(4)
15 Hereford, TX, Ind. Sch. Dist. Pub. A 1,135,000 5.375 2023 08/15/08 1,142,264 1,015,303
Fac. Corp., Sch. Fac. Lease Rev. @ 102.000
Bonds. Ser. 1998 (ACA Ins.)(3)
16 Illinois Educl. Fac. Auth., Rev. A 1,000,000 5.500 2028 05/15/08 1,012,740 898,240
Bonds (Midwest Univ.), Ser 1998 B @ 101.000
(ACA Ins.)(3)
</TABLE>
D - 8
<PAGE>
DEFINED ASSET FUNDS
MUNICIPAL DEFINED FUND SERIES - 5,
PORTFOLIO
AS OF OCTOBER 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
__________ _________ ______ ______ _____________ _____________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
17 Massachusetts Dev. Fin. Agy., Rev. A- $ 515,000 5.000% 2028 07/01/08 $ 499,488 $ 428,407
Bonds (Clark Univ. Issue), Ser. @ 102.000
1998
18 New Jersey Educl. Fac. Auth., Rev. NR 750,000 5.700 2028 07/01/08 759,480 675,945
Bonds (Fairleigh Dickinson Univ. @ 101.000
Issue), Ser. 1998 G
19 Central Falls Detention Fac. Corp., AA 980,000 5.000 2023 01/15/08 953,138 811,097
RI, Detention Fac. Rev. Rfdg. Bonds @ 102.000
(The Donald W. Wyatt Detention
Fac.), Ser. 1998 A (Asset
Guaranty Ins.)(3)
______________ ______________ ______________
TOTAL $14,930,000 $14,884,830 $12,947,299
============== ============== ==============
</TABLE>
See Notes to Portfolio.
D - 9
<PAGE>
DEFINED ASSET FUNDS
MUNICIPAL DEFINED FUND SERIES - 5,
NOTES TO PORTFOLIO
AS OF OCTOBER 31, 1999
(1) The ratings of the bonds are by Standard & Poor's Ratings
Group, or by Moody's Investors Service, Inc. if followed by
"(m)", or by Fitch Investors Service, Inc. if followed by
"(f)"; "NR" indicates that this bond is not currently rated by
any of the above-mentioned rating services. These ratings have
been furnished by the Evaluator but not confirmed with
the rating agencies.
(2) Optional redemption provisions, which may be exercised in whole
or in part, are initially at prices of par plus a premium, then
subsequently at prices declining to par. Certain securities may
provide for redemption at par prior or in addition to any
optional or mandatory redemption dates or maturity, for
example, through the operation of a maintenance and replacement
fund, if proceeds are not able to be used as contemplated, the
project is condemned or sold or the project is destroyed and
insurance proceeds are used to redeem the securities. Many of
the securities are also subject to mandatory sinking fund
redemption commencing on dates which may be prior to the date
on which securities may be optionally redeemed. Sinking fund
redemptions are at par and redeem only part of the issue. Some
of the securities have mandatory sinking funds which contain
optional provisions permitting the issuer to increase the
principal amount of securities called on a mandatory redemption
date. The sinking fund redemptions with optional provisions
may, and optional refunding redemptions generally will, occur
at times when the redeemed securities have an offering side
evaluation which represents a premium over par. To the extent
that the securities were acquired at a price higher than the
redemption price, this will represent a loss of capital when
compared with the Public Offering Price of the Units when
acquired. Distributions will generally be reduced by the amount
of the income which would otherwise have been paid with respect
to redeemed securities and there will be distributed to Holders
any principal amount and premium received on such redemption
after satisfying any redemption requests for Units received by
the Fund. The estimated current return may be affected by
redemptions.
(3) Insured by the indicated municipal bond insurance company.
(4) It is anticipated that interest and principal received from
these bonds will be applied to the payment of the Trust's
deferred sales charges.
D - 10
<PAGE>
Defined
Asset Funds
- -SM-
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<S> <C>
HAVE QUESTIONS ? MUNICIPAL DEFINED FUND
Request the most SERIES 5
recent free Information (A Unit Investment Trust)
Supplement that gives more ---------------------------------------
details about the Fund, This Prospectus does not contain
by calling: complete information about the
The Bank of New York investment company filed with the
1-800-221-7771 Securities and Exchange Commission in
Washington, D.C. under the:
- Securities Act of 1933 (file no.
333-66199) and
- Investment Company Act of 1940 (file
no. 811-2537).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
UNITS OF ANY FUTURE SERIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED
UNTIL THAT SERIES HAS BECOME EFFECTIVE
WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO UNITS CAN BE SOLD IN ANY
STATE WHERE A SALE WOULD BE ILLEGAL.
32701--1/00
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<PAGE>
DEFINED ASSET FUNDS
MUNICIPAL DEFINED FUND
CONTENTS OF REGISTRATION STATEMENT
This Post-Effective Amendment to the Registration Statement on Form S-6
comprises the following papers and documents:
The facing sheet of Form S-6.
The cross-reference sheet (incorporated by reference to the Cross-Reference
Sheet to the Registration Statement of Defined Asset Funds Municipal Insured
Series, 1933 Act File No. 33-54565).
The Prospectus.
The Signatures.
The following exhibits:
1.1.1-- Form of Standard Terms and Conditions of Trust Effective as of
October 21, 1993 (incorporated by reference to Exhibit 1.1.1 to the
Registration Statement of Municipal Investment Trust Fund,
Multi-state Series--48, 1933 Act File No. 33-50247).
4.1 --Consent of the Evaluator.
5.1 --Consent of independent accountants.
9.1 -- Information Supplement (incorporated by reference to Exhibit 9.1 to
Amendment No. 1 to the Registration Statement of Municipal Investment
Trust Fund, Multistate Series--409, 1933 Act File No. 333-81777).
R-1
<PAGE>
DEFINED ASSET FUNDS
MUNICIPAL DEFINED FUND--5
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
DEFINED ASSET FUNDS, MUNICIPAL DEFINED FUND--5, 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
REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED IN THE CITY OF NEW
YORK AND STATE OF NEW YORK ON THE 19TH DAY OF JANUARY, 2000.
SIGNATURES APPEAR ON PAGES R-3, R-4, R-5 AND R-6.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Salomon Smith Barney
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
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By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, File
Fenner & Smith Incorporated: Number: 333-70593
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GEORGE A. SCHIEREN
JOHN L. STEFFENS
By J. DAVID MEGLEN
(As authorized signatory for Merrill Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
<PAGE>
SALOMON SMITH BARNEY INC.
DEPOSITOR
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By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Salomon Smith Barney Inc.: have been filed
under the 1933 Act
File Numbers:
333-63417 and
333-63033
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MICHAEL A. CARPENTER
DERYCK C. MAUGHAN
By GINA LEMON
(As authorized signatory for
Salomon Smith Barney Inc. and
Attorney-in-fact for the persons listed above)
R-4
<PAGE>
PAINEWEBBER INCORPORATED
DEPOSITOR
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By the following persons, who constitute Powers of Attorney have been filed
the Board of Directors of PaineWebber under
Incorporated: the following 1933 Act File
Number: 33-55073
</TABLE>
MARGO N. ALEXANDER
TERRY L. ATKINSON
BRIAN M. BAREFOOT
STEVEN P. BAUM
MICHAEL CULP
REGINA A. DOLAN
JOSEPH J. GRANO, JR.
EDWARD M. KERSCHNER
JAMES P. MacGILVRAY
DONALD B. MARRON
ROBERT H. SILVER
MARK B. SUTTON
By ROBERT E. HOLLEY
(As authorized signatory for
PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-5
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
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By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following 1933
the Board of Directors of Dean Witter Act File Numbers: 33-17085,
Reynolds Inc.: 333-13039, 333-47553 and 89045
</TABLE>
BRUCE F. ALONSO
RICHARD M. DeMARTINI
RAYMOND J. DROP
JAMES F. HIGGINS
JOHN J. MACK
MITCHELL M. MERIN
STEPHEN R. MILLER
PHILIP J. PURCELL
JOHN H. SCHAEFER
THOMAS C. SCHNEIDER
ALAN A. SCHRODER
ROBERT G. SCOTT
By MICHAEL D. BROWNE
(As authorized signatory for
Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)
R-6
EXHIBIT 4.1
STANDARD & POOR'S
A DIVISION OF THE McGRAW-HILL COMPANIES
J. J. KENNY
65 BROADWAY
NEW YORK, N.Y. 10006-2551
TELEPHONE (212) 770-4422
FAX 212/797-8681
January, 2000
Frank A. Ciccotto, Jr
Vice President
Tax-Exempt Evaluations
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<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Defined Asset Funds
P.O. Box 9051
Princeton, New Jersey 08543-9051
The Bank of New York
101 Barclay Street
New York, New York 10286
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RE:
Gentlemen:
We have examined the post-effective Amendment to the Registration Statement
File No. 333-66199 for the above-captioned trust. We hereby acknowledge that
Kenny S&P Evaluation Services, a division of J. J. Kenny Co., Inc. is currently
acting as the evaluator for the trust. We hereby consent to the use in the
Amendment of the reference to Kenny S&P Evaluation Services, a division of J. J.
Kenny Co., Inc. as evaluator.
In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registration Statement for the respective
bonds comprising the trust portfolio are the ratings currently indicated in our
KENNYBASE database.
You are hereby authorized to file copies of this letter with the Securities
and Exchange Commission.
Sincerely,
FRANK A. CICCOTTO
Vice President
Exhibit 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee of
DEFINED ASSET FUNDS--MUNICIPAL DEFINED FUND SERIES--5
We consent to the use in this Post-Effective Amendment No. 1 to Registration
Stateme nt No. 333-66199 of our opinion dated January 10, 2000 appearing in the
Prospectus, which is part of such Registration Statement, and to the reference
to us under the heading "Miscellaneous--Auditors" in such Prospectus.
DELOITTE & TOUCHE LLP
New York, N.Y.
January 19, 2000
