<PAGE>
File No. 333-75111
40 Act File No. 811-08103
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2
A. Exact name of Trust: NUVEEN UNIT TRUSTS, SERIES 39
B. Name of Depositor: JOHN NUVEEN & CO. INCORPORATED
C. Complete address of Depositor's principal executive offices:
333 West Wacker Drive
Chicago, Illinois 60606
D. Name and complete address of agents for service:
JOHN NUVEEN & CO. INCORPORATED
Attention: Alan G. Berkshire
333 West Wacker Drive
Chicago, Illinois 60606
CHAPMAN AND CUTLER
Attention: Eric F. Fess
111 West Monroe Street
Chicago, Illinois 60603
It is proposed that this filing will become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / on (date) pursuant to paragraph (a) of rule 485 or 486
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
E. Title of securities being registered: Units of fractional undivided
beneficial interest.
F. Approximate date of proposed public offering: June 23, 1999
/ / Check box if it is proposed that this filing will become effective on
(date) at (time) pursuant to Rule 487.
<PAGE>
[LOGO]
Defined Portfolios
Nuveen Unit Trusts, Series 39
Nuveen Insured Corporate Portfolio,
Series 4 (Long-Term)
Prospectus Part A dated June 23, 1999
- --------------------------------------------------------------------------------
- - Seeks a High Level of Current Income
- - Utility and U.S. Treasury Bonds
- - Utility Bonds Insured by MBIA Insurance Corporation
- - Monthly, Quarterly or Semi-annual Distributions
- - U.S. Tax Exempt for Many Foreign Holders
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
ECR-004-P 6/99
<PAGE>
Nuveen Insured Corporate Portfolio,
Series 4
<TABLE>
<CAPTION>
CUSIP NOS:
<S> <C> <C>
MONTHLY QUARTERLY SEMI-ANNUAL
67090A198 67090A206 67090A214
</TABLE>
Overview
Nuveen Unit Trusts, Series 39 includes the unit investment trust listed above.
The Portfolio seeks to provide a high level of current income consistent with
preservation of capital by investing primarily in insured bonds issued by
utility companies.
The Portfolio has a dollar-weighted average maturity of 29.9 years.
Units are not deposits or obligations of, or guaranteed by any bank. Units are
not FDIC insured and involve investment risk, including the possible loss of
principal.
Contents
<TABLE>
<C> <S> <S>
2 OVERVIEW
3 NUVEEN INSURED CORPORATE PORTFOLIO, SERIES 4
3 RISK/RETURN SUMMARY
3 Investment Objective
3 Investment Strategy
3 Bond Selection
3 Investor Suitability
3 Portfolio Diversification
3 Primary Risks
4 Fees and Expenses
5 SCHEDULE OF INVESTMENTS
6 HOW TO BUY AND SELL UNITS
6 Investing in the Portfolio
6 Sales or Redemptions
6 RISK FACTORS
7 DISTRIBUTIONS AND TAXES
7 Interest Distributions
8 Principal Distributions
8 Tax Status
8 ESTIMATED RETURNS
9 GENERAL INFORMATION
9 Insurance
9 Ratings
9 Termination
9 The Sponsor
9 Dealer Concessions
9 Optional Features
9 LETTER OF INTENT
9 REINVESTMENT
9 NUVEEN MUTUAL FUNDS
10 STATEMENT OF CONDITION
11 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
For the Table of Contents of Part B, see Part B of the Prospectus.
</TABLE>
- ------------
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2
<PAGE>
Nuveen Insured
Corporate Portfolio,
Series 4
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE
The Portfolio seeks to provide a high level of current income consistent with
preservation of capital.
INVESTMENT STRATEGY
The Portfolio primarily consists of insured bonds issued by utility companies,
including telephone companies. Approximately 3.2 percent of the principal amount
of the Portfolio consists of zero coupon U.S. Treasury Bonds. The bonds are
expected to remain in the Portfolio until they mature, are called or are sold to
meet redemptions or expenses.
BOND SELECTION
In selecting bonds for the Portfolio, the following factors, among others, were
considered by the Sponsor:
- - The prices and yields of the bonds;
- - Whether the bonds are trading at a premium or discount from par;
- - The present rating and credit quality of the issuers of the bonds and the
potential improvement in the credit quality of such issuers;
- - The diversification of the bonds as to the location of the issuers;
- - The potential income generated by the bonds;
- - Whether the bonds were issued after July 18, 1984;
- - The stated maturities and call provisions of the bonds;
- - Whether the bonds were issued by a utility company; and
- - Whether the bonds were insured and the availability and cost of insurance for
the bonds.
Through examining these factors, the Sponsor seeks to select a Portfolio that
has the potential to meet the Portfolio's investment objective of a high level
of current income consistent with preservation of capital.
A description of the bonds included in the Portfolio is provided in the
"Schedule of Investments."
The Portfolio consists of bonds having a dollar-weighted average maturity of
29.9 years.
INVESTOR SUITABILITY
The Portfolio may be suitable for you if you are seeking:
- - An opportunity for attractive, dependable income;
- - Insured, AAA-rated utility bonds;
- - A focus on long-term capital preservation;
- - An appropriate vehicle for retirement or other tax-deferred accounts; and
- - Exemption from U.S. withholding for foreign (non-resident) investors that
meet certain conditions.
The Portfolio is not appropriate for you if you are seeking:
- - An aggressive high-growth investment strategy.
PORTFOLIO DIVERSIFICATION
The Portfolio consists of the following types of bonds:
<TABLE>
<CAPTION>
APPROXIMATE
TYPE OF ISSUER PORTFOLIO PERCENTAGE
- ------------------------------------ ---------------------
<S> <C>
Communication 48.4%
Power Revenue 48.4%
General Obligation 3.2%
------
Total 100.00%
</TABLE>
PRIMARY RISKS
YOU CAN LOSE MONEY BY INVESTING IN THE PORTFOLIO. In addition, the Portfolio may
not perform as well as you hope. These things can happen for various reasons,
including:
- - Unit prices and yields may decline during the life of the Portfolio;
- - Rising interest rates will reduce the value of your Units. Typically, bonds
with longer periods before maturity are more sensitive to interest rate
changes;
- - A bond issuer or an insurer may be unwilling or unable to meet its obligation
to make principal or interest payments, resulting in a reduction in the value
of your Units;
- - The financial condition of a bond issuer or insurer may worsen or their
credit ratings may drop, resulting in a reduction in the value of your Units;
- - Because the Portfolio is concentrated in utility bonds, adverse developments
in this industry may affect the value of your Units. Utility companies must
contend with:
- government regulation,
- possible deregulation and the impact of stranded costs,
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3
<PAGE>
- environmental concerns,
- fuel costs, and
- energy conservation;
- - 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
charge;
- - The Portfolio 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; and
- - The Portfolio is not actively managed and may continue to purchase or hold a
bond included in the Portfolio even though the bond's outlook or its market
value or yield may have changed.
FEES AND EXPENSES
This table shows the fees and expenses you may pay, directly or indirectly, when
you invest in the Portfolio.
ESTIMATED ANNUAL OPERATING EXPENSES
<TABLE>
<CAPTION>
DISTRIBUTION PLAN
-------------------------------------
MONTHLY QUARTERLY SEMI-ANNUAL
--------- ----------- -------------
<S> <C> <C> <C>
Trustee's Fee(1)...... $ 1.5784 $ 1.2384 $ 1.0430
Sponsor's Evaluation
Fee(1).............. $ 0.17 $ 0.17 $ 0.17
Other Operating
Expenses (per
Unit)............... $ .02570 $ .02570 $ .02570
TOTAL (per Unit as of
the Initial Date of
Deposit)............ $ .20054 $ .16654 $ .14700
MAXIMUM ORGANIZATION
COSTS(2)............ $ .25 $ .25 $ .25
</TABLE>
<TABLE>
<CAPTION>
AMOUNT PER
$1,000
INVESTED (AS
OF INITIAL
AMOUNT DATE OF
PER UNIT DEPOSIT)
--------- -------------
<S> <C> <C>
INVESTOR FEES
(As of the Initial Date of
Deposit)
Maximum Sales Charge.............. 4.9% $ 49.00
</TABLE>
- ------------
(1) The Trustee's Fee and the Sponsor's Evaluation Fee are per $1,000 principal
amount of the bonds in the Portfolio.
(2) Organization costs are deducted from Portfolio assets at the earlier of the
close of the initial offering period or 6 months after Initial Date of
Deposit.
THE MAXIMUM PER UNIT SALES CHARGES ARE REDUCED AS FOLLOWS:
<TABLE>
<CAPTION>
PERCENT OF
OFFERING
NUMBER OF UNITS* PRICE
- ---------------------------------------------- -------------
<S> <C>
Less than 500................................ 4.90%
500 but less than 1,000...................... 4.75
1,000 but less than 2,500.................... 4.50
2,500 but less than 5,000.................... 4.25
5,000 but less than 10,000................... 3.50
10,000 but less than 25,000.................. 3.00
25,000 but less than 50,000.................. 2.50
50,000 or more............................... 2.00
</TABLE>
- ------------
* Sales charge reductions are computed both on a dollar basis and on the basis
of the number of Units purchased, using the equivalent of 500 Units to
$50,000, 1,000 Units to $100,000 etc., and will be applied on that basis
which is more favorable to you.
As described in "Public Offering Price" in Part B of the Prospectus, certain
classes of investors are also entitled to reduced sales charges. Also see
"Public Offering Price" in Part B of the Prospectus for secondary market sales
charges.
EXAMPLE
This example may help you compare the cost of investing in the Portfolio to the
cost of investing in other funds.
The example assumes that you invest $10,000 in the Portfolio for the periods
indicated and then either redeem or do not redeem your Units at the end of those
periods. The example also assumes a 5% return on your investment each year and
that the Portfolio's operating expenses stay the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Monthly $ 535.05 $ 589.90 $ 650.36 $ 830.04
Quarterly $ 531.65 $ 586.15 $ 646.23 $ 824.77
Semi-annual $ 529.70 $ 583.99 $ 643.85 $ 821.74
</TABLE>
See "Trust Operating Expenses" in Part B of the Prospectus for additional
information regarding expenses.
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4
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
(AT THE INITIAL DATE OF DEPOSIT, JUNE 23, 1999)
NUVEEN INSURED CORPORATE PORTFOLIO, SERIES 4 (LONG-TERM)
<TABLE>
<CAPTION>
RATINGS(2)
---------------------
AGGREGATE REDEMPTION STANDARD &
PRINCIPAL NAME OF ISSUER(1)(6) PROVISIONS(3) POOR'S MOODY'S
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
United States of America Treasury Securities, Stripped
Principal Payments, 0.00% Due 8/15/22(5)
$ 50,000 No Optional Call N/A N/A
250,000 Bellsouth Telecommunications Company, 7.00% Due 10/01/25 No Optional Call AAA Aaa
250,000 Duke Energy Corporation, 7.00%, Due 7/01/33 2003 at 102.35 AAA Aaa
250,000 New York Telephone Company, 7.00% Due 12/01/33 2013 at 100 AAA Aaa
250,000 Pacific Bell Telephone Company, 6.625% Due 10/15/34 2013 at 101.12 AAA Aaa
250,000 Pacific Gas & Electric Corporation, 7.050% Due 03/01/24 No Optional Call AAA Aaa
250,000 Southern California Edison Company, 7.125% Due 07/15/25 2003 at 102.09 AAA Aaa
- ------------
$ 1,550,000
- ------------
- ------------
<CAPTION>
COST OF BONDS
AGGREGATE TO
PRINCIPAL PORTFOLIO(4)
<C> <C>
- -------------------------------------------
$ 50,000 $ 11,607
250,000 244,768
250,000 245,483
250,000 240,598
250,000 232,460
250,000 248,723
250,000 243,110
--------------
- ------------
$ 1,466,749
$ 1,550,000
--------------
--------------
- ------------
- ------------
</TABLE>
- ------------
(1) The Sponsor's contracts to purchase the bonds were entered into on June 22,
1999. All bonds are represented by regular way contracts, unless otherwise
indicated, for the performance of which an irrevocable letter of credit has
been deposited with the Trustee.
(2) A brief description of the applicable Standard & Poor's and Moody's rating
symbols and their meanings is set forth under "Description of Ratings" in
the Information Supplement to this Prospectus. "N.R." indicates that the
issue has not been rated by that rating agency.
(3) Under this heading, the year in which each issue of bonds is initially or
currently redeemable and the redemption price for that year is shown.
Unless otherwise indicated, each issue continues to be redeemable at
declining prices thereafter, but not at a price below par value. The prices
at which the bonds may be redeemed or called prior to maturity may or may
not include a premium and, in certain cases, may be less than the cost of
the bonds to the Portfolio. In addition, certain bonds in the Portfolio may
be redeemed in whole or in part other than by operation of the stated
redemption provisions under certain unusual or extraordinary circumstances
specified in the instruments setting forth the terms and provisions of such
bonds.
(4) During the initial offering period, evaluations of bonds are made on the
basis of current offering side evaluations of the bonds.
(5) This bond has been purchased at a deep discount from the par value because
there is no stated interest income thereon. Bonds which pay no interest are
normally described as "zero coupon" bonds. Over the life of bonds purchased
at a deep discount, the value of the bonds will increase such that upon
maturity the holders of such bonds will receive 100% of the principal
amount thereof.
(6) Other information regarding the bonds in the Portfolio on the Initial Date
of Deposit is as follows:
<TABLE>
<CAPTION>
ESTIMATED
ANNUAL ESTIMATED ESTIMATED
PROFIT INTEREST GROSS ANNUAL NET ANNUAL
COST TO (OR LOSS) INCOME TO INCOME PER INCOME PER BID PRICE
SPONSOR TO SPONSOR PORTFOLIO(7) UNIT(7) UNIT(7) OF BONDS
- ------------ ------------ ------------- --------------------------- --------------------------- ------------
- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
$ 1,455,083 $ 11,666 $ 104,500 $ 6.7419 -- Monthly $ 6.5414 -- Monthly $ 1,460,624
$ 6.7419 -- Quarterly $ 6.5754 -- Quarterly
$ 6.7419 -- Semi-annual $ 6.5949 -- Semi-annual
</TABLE>
In addition, the difference between the Trustee's determination of offering
price and bid price (as a percentage of principal amount) is .40% for the
Portfolio.
(7) The estimated income figures reflected above are estimates determined as of
the business day prior to the Initial Date of Deposit and actual payments
may vary. It is anticipated that the amount of interest to be distributed
per Unit in each year will initially be substantially equal to the
estimated net annual income per Unit provided above. Interest income does
not include accretion of original issue discount on zero coupon bonds. The
amount of interest to be distributed annually per Unit will generally
change as bonds are redeemed, mature or are sold or as fees and expenses
increase or decrease. See "Distribution to Unitholders" in Part B of this
Prospectus.
PLEASE NOTE THAT IF THIS PROSPECTUS IS USED AS A PRELIMINARY PROSPECTUS FOR A
FUTURE NUVEEN DEFINED PORTFOLIO, THE PORTFOLIO WILL CONTAIN DIFFERENT BONDS THAN
THOSE DESCRIBED ABOVE.
- --------------------------------------------------------------------------------
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5
<PAGE>
How to Buy and Sell Units
INVESTING IN THE PORTFOLIO
The MINIMUM INVESTMENT is normally $5,000 or 50 Units, whichever is less.
However, for IRA purchases the minimum investment is $500 or the nearest whole
number of Units whose value is less than $500.
YOU CAN BUY UNITS FROM ANY PARTICIPATING DEALER.
As of June 23, 1999, the Initial Date of Deposit, the PER UNIT PUBLIC OFFERING
PRICE FOR THE PORTFOLIO IS $99.77 . As described above, Units are subject to a
maximum sales charge of 4.9% of the Public Offering Price. The Public Offering
Price includes the sales charge, any net accrued but undistributed interest on
the Unit and the estimated organization cost of $0.25 per Unit. For Units
purchased on the Initial Date of Deposit, $.09 of accrued interest will be added
to the Public Offering Price. The Public Offering Price changes every day with
changes in the prices of the bonds.
Wrap Account Purchases and certain other investors described in Part B of the
Prospectus, may buy Units at the Public Offering Price for non-breakpoint
purchases minus the concession the Sponsor typically allows for dealers for
non-breakpoint purchases.
The Portfolio's securities are valued by the Sponsor, John Nuveen & Co.
Incorporated, every business day.
The Sponsor intends to periodically create additional Units of the Portfolio.
See "Nuveen Defined Portfolios" and "Composition of Trusts" in Part B of the
Prospectus for more details.
See "Public Offering Price" and "Market for Units" in Part B for additional
information.
SALES OR REDEMPTIONS
Units may be redeemed by the Trustee, The Chase Manhattan Bank, on any business
day at their current market value based on the bid prices of the bonds.
Although not obligated to do so, the Sponsor, John Nuveen & Co. Incorporated,
may maintain a market for Units and offer to repurchase the Units at prices
based on their current market value. If a secondary market is not maintained, a
Unitholder may still redeem Units through the Trustee.
During the period ending with the earlier of six months after the Initial Date
of Deposit or the end of the initial offering period, the price at which the
Trustee will redeem Units and the price at which the Sponsor may repurchase
Units include estimated organization costs. After such period, the amount paid
will not include such estimated organization costs.
See "Redemption" and "Market for Units" in Part B of the Prospectus for details.
Risk Factors
YOU CAN LOSE MONEY BY INVESTING IN THE PORTFOLIO. Your investment is at risk
primarily because of:
- - INTEREST RATE RISK
Interest rate risk is the risk that bonds in the Portfolio will decline in
value because of a rise in interest rates. Generally, bonds will increase in
value when interest rates decline and decrease in value when interest rates
rise. Typically, bonds with longer periods before maturity are more sensitive
to interest rate changes.
- - CREDIT RISK
Credit risk is the risk that an issuer of a bond in the Portfolio or an
insurer is unable or unwilling to meet its obligation to make interest and
principal payments.
- - CALL RISK
Call risk is the risk that bonds can be prepaid or "called" by the issuer
before their stated maturity. If bonds are called, your income will decline
and you may not be able to reinvest the money you receive at as high a yield.
Also, an early call at par of a premium bond will reduce your return. Bonds
in the Portfolio 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 Portfolio. The dates and prices upon which the bonds
are first subject to optional calls are provided in "Schedule of
Investments." The bonds may also be subject to special or extraordinary call
provisions and "mandatory
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6
<PAGE>
put" features that may cause the bonds to be removed from the Portfolio prior
to maturity.
- - MARKET RISK
Market risk is the risk that the market value of a bond or the Portfolio may
change rapidly and unpredictably, causing the bond or the Portfolio to be
worth less than its original price. Volatility in the market price of the
bonds in the Portfolio changes the value of the Units of the Portfolio.
Market value may be affected by a variety of factors including, among others:
-- changes in the perceptions about the issuers or insurers;
-- changes in interest rates or inflation;
-- changes in the ratings of the issuers or insurers; or
-- changes in the financial condition of the issuers or insurers of the
bonds.
- - LIQUIDITY RISK
Liquidity risk is the risk that the value of the bonds may be reduced if
trading in the bonds is limited or absent. Because the bonds will generally
trade in the over-the-counter market, a liquid trading market may not exist.
- - INFLATION RISK
Inflation risk is the risk that the value of assets or income from
investments will be less in the future as inflation decreases the value of
money.
- - BOND QUALITY RISK
Bond quality risk is the risk that a reduction in a bond's rating may
decrease its value and the value of your investment in the Portfolio.
- - REDUCED DIVERSIFICATION RISK
Reduced diversification risk is the risk that the diversification of your
investment is reduced as bonds in the Portfolio are called, sold or mature.
This reduction in diversification may increase the risk of loss and increase
your share of Portfolio expenses.
- - LITIGATION AND LEGISLATION RISK
Litigation and legislation risk is the risk that future litigation or
legislation could affect the value of the Portfolio.
- - CONCENTRATION RISK
When bonds in a particular industry make up 25% or more of the Portfolio, it
is said to be "concentrated" in that industry, which makes a Portfolio less
diversified and subject to more market risk. The Portfolio is concentrated in
the bonds of utility companies.
Companies involved in this industry must contend with:
-- government regulation;
-- possible deregulation and the impact of stranded costs;
-- environmental concerns;
-- the difficulty of obtaining fuel at reasonable prices; and
-- energy conservation.
- - ZERO COUPON RISK
Zero coupon bonds do not provide for the payment of any current interest. The
buyer receives only the right to receive a final payment of the face amount
of the bond at its maturity. Zero coupon bonds are subject to substantially
greater price fluctuations during periods of changing market interest rates
than are bonds of comparable quality that pay interest currently.
Distributions and Taxes
INTEREST DISTRIBUTIONS
Interest income received by the Portfolio, net of expenses, will be paid to
investors. You may choose to receive interest distributions on a monthly,
quarterly or semi-annual basis. Interest distributions will be paid on the
following dates to the applicable Unitholders of record:
<TABLE>
<CAPTION>
DISTRIBUTION
PLAN RECORD DATES DISTRIBUTION DATES
- ------------ ---------------------- ----------------------
<S> <C> <C>
Monthly 1st of each month 15th of each month
- ------------------------------------------------------------
Quarterly 1st of February, May, 15th of February, May,
August and November August and November
- ------------------------------------------------------------
Semi-annual 1st of May and 15th of May and
November November
</TABLE>
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7
<PAGE>
The Portfolio's estimated interest distributions per Unit are as follows:
<TABLE>
<CAPTION>
DISTRIBUTION PLAN MONTHLY QUARTERLY SEMI-ANNUAL
- --------------------- --------- ---------- -------------
<S> <C> <C> <C>
Initial Payment $6.904 $.6904 $.6904
(Date) (8/15/99) (8/15/99) (8/15/99)
Partial Payment N/A N/A $1.6479
(Date) (11/15/99)
First Normal Payment $.5451 $1.6434 $3.2958
(Date) (9/15/99) (11/15/99) (5/15/00)
Normal Total Annual $6.5414 $6.5754 $6.5949
Distributions
</TABLE>
The amount of interest will generally change as bonds in the Portfolio mature,
are called or are sold or as fees and expenses increase or decrease. Estimated
distributions assume that all of the bonds are delivered to the Portfolio.
The estimated distributions provided above do not include accretion of original
issue discount on "zero coupon" bonds. Zero coupon bonds will only distribute
amounts at maturity. See "Distributions to Unitholders" in Part B of this
Prospectus for details.
PRINCIPAL DISTRIBUTIONS
Distributions of principal received by the Portfolio will be paid on or shortly
after each May 15 and November 15 to Unitholders of record on each May 1 and
November 1, respectively, provided the amount available for distribution equals
at least $0.10 per Unit. See "Distributions to Unitholders" in Part B of the
Prospectus for additional information.
TAX STATUS
Interest on the bonds in the Portfolio is subject to federal income taxes for
U.S. investors. You will receive principal payments if bonds are sold or called,
or mature. You will be subject to tax on any gain realized by the Portfolio on
the disposition of bonds.
For non-resident aliens, income from the Portfolio will be exempt from
withholding for U.S. federal income tax, PROVIDED certain conditions are met.
See "Tax Status" in Part B of this Prospectus for further tax information.
Estimated Returns
Defined Portfolios use two separate calculations to measure estimated returns:
estimated current return and estimated long term return.
Estimated current return equals the estimated annual cash to be received from
the bonds in the Portfolio less estimated annual Portfolio expenses, divided by
the Unit price (including the maximum sales charge):
<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 Portfolio. Unlike Estimated Current Return, Estimated Long
Term Return reflects maturities, discounts and premiums of the bonds in the
Portfolio. 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 Portfolio's maximum sales charge 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.
The Portfolio's estimated current and long term returns as of the business day
prior to the Initial Date of Deposit are as follows:
ESTIMATED RETURNS
<TABLE>
<CAPTION>
DISTRIBUTION PLAN CURRENT RETURN LONG-TERM RETURN
- ------------------ ---------------- ------------------
<S> <C> <C>
Monthly 6.56% 6.67%
Quarterly 6.59% 6.71%
Semi-Annual 6.61% 6.73%
</TABLE>
These return quotations are designed to be comparative rather than predictive
and your actual return will vary with Unit price, how long you hold your
investment and changes in the Portfolio, interest income and expenses.
Yields on individual bonds depend on many factors including the general
condition of the bond market, 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.
See "Estimated Long Term Return and Estimated Current Return" in Part B of the
Prospectus for details.
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8
<PAGE>
General Information
INSURANCE
All of the utility bonds in the Portfolio are insured either by the issuer of
the bonds or by the Sponsor under a financial guaranty insurance policy obtained
from MBIA Insurance Corporation ("MBIA") for as long as the bonds are
outstanding and MBIA remains in business. The insurance guarantees the scheduled
payment of principal and interest on all of the utility bonds in the Portfolio.
It does not guarantee the market value of the bonds or the value of the Units of
the Portfolio. See "Insurance on the Corporate Bonds" in Part B of the
Prospectus for further information. Any U.S. Treasury Obligations in the
Portfolio are not insured.
RATINGS
All Utility bonds in the Portfolio have been rated "AAA" by Standard & Poor's
and "Aaa" by Moody's, their highest ratings.
TERMINATION
The Portfolio will terminate upon the sale, redemption of other disposition of
the last bond in the Portfolio. However, in no event will the Portfolio continue
after the Mandatory Termination Date, October 15, 2034.
Unitholders will receive a cash distribution that represents their share of the
Portfolio's assets within a reasonable time after the Portfolio terminates. For
more details regarding termination, including a description of other
circumstances in which the Portfolio may terminate, see "Other Information --
Termination of Indenture" in Part B of the Prospectus.
THE SPONSOR
Since our founding in 1898, John Nuveen & Co. Incorporated has been synonymous
with investments that withstand the test of time. Today, we offer a range of
equity and fixed-income unit trusts designed to suit the unique circumstances
and financial planning needs of mature investors. More than 1.3 million
investors have trusted Nuveen to help them maintain the lifestyle they currently
enjoy.
The prospectus describes in detail the investment objectives, policies and risks
of this unit trust. We invite you to discuss the contents with your financial
adviser, or you may call us at 800-257-8787 for additional information.
DEALER CONCESSIONS
The Sponsor plans to allow a concession of $3.20 per Unit for non-breakpoint
purchases of Units to dealer firms in connection with the sale of Units in a
given transaction.
The concession paid to dealers is reduced or eliminated in connection with Units
sold in transactions to investors that receive reduced sales charges based on
the number of Units sold or in connection with Units sold in Wrap Account
Purchases and to other investors entitled to the sales charge reduction
applicable for Wrap Account Purchases, as follows:
- ----------------------------------------------
<TABLE>
<CAPTION>
DISCOUNT PER
NUMBER OF UNITS* UNIT
- ------------------------------------------------ -------------
<S> <C>
Less than 500................................... $ 3.20
500 but less than 1,000......................... 3.20
1,000 but less than 2,500....................... 3.20
2,500 but less than 5,000....................... 3.20
5,000 but less than 10,000...................... 2.50
10,000 but less than 25,000..................... 2.00
25,000 but less than 50,000..................... 1.75
50,000 or more.................................. 1.75
Wrap Account Purchases.......................... 0.00
</TABLE>
*Sales charge reductions are computed both on a dollar basis and on the basis of
the number of Units purchased using the equivalent of 500 Units to $50,000,
1,000 Units to $100,000 etc., and will be applied on that basis which is more
favorable to you and may result in a reduction in the discount per Unit.
See "Distributions of Units to the Public" in Part B of the Prospectus for
additional information on dealer concessions, volume incentives, and secondary
market dealer concessions.
OPTIONAL FEATURES
LETTER OF INTENT (LOI)
Investors may use a Letter of Intent to get reduced sales charges on purchases
made over a 13-month period (and to take advantage of dollar cost averaging).
The minimum LOI investment is $50,000. See "Public Offering Price" in Part B of
this Prospectus.
REINVESTMENT
Interest income and returned principal can be reinvested with no sales charge
into Nuveen mutual or money market funds. See "Accumulation Plan" in Part B of
this Prospectus. For more information, obtain a prospectus from your financial
adviser.
NUVEEN MUTUAL FUNDS
Portfolio purchases may be applied toward breakpoint pricing discounts for
Nuveen Mutual Funds. For more information about Nuveen investment products,
obtain a prospectus from your financial adviser.
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9
<PAGE>
- --------------------------------------------------------------------------------
Statement of Condition
(AT THE INITIAL DATE OF DEPOSIT, JUNE 23, 1999)
<TABLE>
<S> <C>
TRUST PROPERTY
Investment in bonds represented by purchase contracts(1)(2)................................. $1,466,749
Accrued interest to June 23, 1999 on underlying bonds(1).................................... $ 25,440
Cash in portfolio........................................................................... $ 3,875
----------
Total........................................................................... $1,496,064
----------
----------
LIABILITIES AND INTEREST OF UNITHOLDERS
LIABILITIES:
Accrued interest to June 23, 1999 on underlying bonds(4)................................ $ 25,440
Reimbursement of Sponsor for organization costs(3)...................................... $ 3,875
----------
Total........................................................................... $ 29,315
----------
----------
INTEREST OF UNITHOLDERS:
Units of fractional undivided interest outstanding (15,500)
Cost to investors(5).................................................................... $1,546,191
Less: Gross underwriting commission(6).............................................. $ 75,567
Less: Organization costs(3)......................................................... $ 3,875
----------
Net amount applicable to investors...................................................... $1,466,749
----------
Total........................................................................... $1,496,064
----------
----------
</TABLE>
- ------------
(1) An irrevocable letter of credit has been deposited with the Trustee as
collateral, which is sufficient to cover the monies necessary for the
purchase of the bonds pursuant to contracts for the purchase of such bonds.
The amount of such letter of credit and any cash deposited exceeds the
amount necessary for the purchase of the bonds plus accrued interest to the
Initial Date of Deposit.
(2) Aggregate value (at offering prices) as of the Initial Date of Deposit of
the bonds listed under "Schedule of Investments", and their aggregate cost
to the Portfolio is the same. These offering prices were determined by Kenny
S&P Evaluation Services, a division of J.J. Kenny Co., Inc., as of the close
of business on the business day prior to the Initial Date of Deposit. (See
"Evaluation of Securities at the Initial Date of Deposit" in Part B of this
Prospectus.)
(3) A portion of the Public Offering Price consists of an amount sufficient to
reimburse the Sponsor for all or a portion of the costs of establishing the
Portfolio. These costs have been estimated at $0.25 per Unit for the
Portfolio. A payment will be made as of the earlier of six months after the
Initial Date of Deposit or the end of the initial offering period to an
account maintained by the Trustee from which the obligations of the
investors to the Sponsor are dispensed. To the extent that actual
organization costs are greater than the estimated amount, only the estimated
organization costs added to the Public Offering Price will be reimbursed to
the Sponsor and deducted from the assets of the Portfolio.
(4) Representing, as set forth in "Accrued Interest" in Part B of this
Prospectus, advancement by the Trustee of an amount equal to the accrued
bond interest as of the Initial Date of Deposit.
(5) Aggregate Public Offering Price (exclusive of accrued interest) computed as
set forth under "Public Offering Price" in Part B of this Prospectus.
(6) The gross underwriting commission of 4.9% of the Public Offering Price has
been calculated on the assumption that the Units sold are not subject to a
reduction of the sales charge for quantity purchases. In single transactions
involving 500 Units or more, the sales charge is reduced. (See "Public
Offering Price" in Part B of this Prospectus.)
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10
<PAGE>
Report of Independent Public Accountants
TO THE BOARD OF DIRECTORS OF JOHN NUVEEN & CO. INCORPORATED AND UNITHOLDERS OF
NUVEEN UNIT TRUSTS, SERIES 39:
We have audited the accompanying statement of condition and the schedule of
investments at date of deposit (included in Part A of this Prospectus) of Nuveen
Unit Trusts, Series 39 (Nuveen Insured Corporate Portfolio, Series 4
(Long-Term)), as of June 23, 1999. These financial statements are the
responsibility of the Sponsor. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of the irrevocable letter of credit arrangement for the purchase of
securities, described in Note (1) to the statement of condition, by
correspondence with the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Sponsor, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the statement of condition and the schedule of investments at
date of deposit referred to above present fairly, in all material respects, the
financial position of Nuveen Unit Trusts, Series 39 (Nuveen Insured Corporate
Portfolio, Series 4 (Long-Term)), as of June 23, 1999, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
June 23, 1999.
------
11
<PAGE>
[Logo]
Defined
NUVEEN UNIT TRUSTS, SERIES 39
Portfolios
PROSPECTUS -- PART A
JUNE 23, 1999
<TABLE>
<C> <S> <C>
Sponsor John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
Telephone: 312-917-7700
Trustee The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
Telephone: 800-257-8787
</TABLE>
This Prospectus does not contain complete information about the Portfolio
filed with the Securities and Exchange Commission in Washington, DC under the:
Securities Act of 1933 (file no. 333-75111)
Investment Company Act of 1940 (file no. 811-08103)
To obtain copies at proscribed rates--
<TABLE>
<S> <C>
Write: Public Reference Section of the Commission, 450 Fifth Street NW, Washington, DC
20549-6009
Call: (800) SEC-0330
Visit: http://www.sec.gov
</TABLE>
No person is authorized to give any information or representation about the
Portfolio not contained in Parts A or B of this Prospectus or the Information
Supplement, and you should not rely on any other information.
When Units of the Portfolio are no longer available or for investors who
will reinvest into subsequent series of the Portfolio, this Prospectus may be
used as a preliminary Prospectus for a future series. If this is the case,
investors should note the following:
1. Information in this Prospectus is not complete and may be changed;
2. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective; and
3. This prospectus is not an offer to sell the securities of a future
series and is not soliciting an offer to buy such securities in any state
where the offer or sale is not permitted.
<PAGE>
<TABLE>
<S> <C>
[NUVEEN LOGO]
Defined Portfolios
Nuveen Fixed Income Portfolio Prospectus
Prospectus Part B dated June 23, 1999
</TABLE>
THE PROSPECTUS FOR A NUVEEN DEFINED PORTFOLIO (A "TRUST") IS DIVIDED INTO TWO
PARTS. PART A OF THE PROSPECTUS RELATES EXCLUSIVELY TO A PARTICULAR TRUST AND
PROVIDES SPECIFIC INFORMATION REGARDING THE TRUST'S PORTFOLIO, INVESTMENT
OBJECTIVES, EXPENSES, FINANCIAL HIGHLIGHTS, INTEREST AND PRINCIPAL
DISTRIBUTIONS, ESTIMATED RETURNS, RISK FACTORS, TAX STATUS AND OPTIONAL
FEATURES. PART B OF THE PROSPECTUS PROVIDES MORE GENERAL INFORMATION REGARDING
THE NUVEEN DEFINED PORTFOLIOS. YOU SHOULD READ BOTH PARTS OF THE PROSPECTUS AND
RETAIN THEM FOR FUTURE REFERENCE. EXCEPT AS PROVIDED IN PART A OF THE
PROSPECTUS, THE INFORMATION CONTAINED IN THIS PART B WILL APPLY TO EACH TRUST.
Additional information about the Trusts is provided in the Information
Supplement. You can receive an Information Supplement by calling The Chase
Manhattan Bank (the "TRUSTEE") at (800) 257-8787.
NUVEEN DEFINED PORTFOLIOS
Each Nuveen Defined Portfolio consists of a portfolio of U.S. Treasury
Obligations or Corporate Bonds described in the applicable Part A of the
Prospectus (see "SCHEDULE OF INVESTMENTS" in Part A of the Prospectus. Trusts
consisting of U.S. Treasury obligations ("U.S. TREASURY OBLIGATIONS") shall be
referred to herein as "U.S. Treasury Trusts." Trusts primarily consisting of
investment grade, corporate debt obligations issued after July 18, 1984
("CORPORATE BONDS") shall be referred to herein as "Corporate Trusts."
Collectively, the U.S. Treasury Trusts and the Corporate Trusts shall be
referred to herein as the "TRUSTS." Corporate Trusts consisting primarily of
insured Corporate Bonds shall be referred to herein as "Insured Corporate
Trusts" and Corporate Trusts consisting primarily of uninsured investment grade
Corporate Bonds shall be referred to herein as "Investment Grade Corporate
Trusts." U.S. Treasury Obligations and the Corporate Bonds held by a Trust shall
be referred to herein as the "OBLIGATIONS", "BONDS" or the "SECURITIES."
MINIMUM INVESTMENT--$5,000 or 50 Units ($500 or nearest whole number of
Units whose value is less than $500 for IRA purchases), whichever is less.
REDEEMABLE UNITS. You may redeem your Units at the office of the Trustee at
prices based upon the BID prices of the Securities. If so provided in Part A of
the Prospectus, during the period ending with the earlier of six months after
the Initial Date of Deposit or the end of the initial offering period, the
Redemption Price per Unit includes estimated organization costs per Unit. After
such period, the Redemption Price will not include such estimated organization
costs. See "FEES AND EXPENSES" in Part A of the Prospectus for the organization
costs and see "REDEMPTION" herein for a more detailed discussion of redeeming
your Units.
DISTRIBUTIONS. Interest received by a Trust will be paid monthly, quarterly
or semi-annually, depending on your selection. (See "DISTRIBUTIONS TO
UNITHOLDERS.") Distributions of funds in the Principal Account, if any, will
ordinarily be made as set forth under "DISTRIBUTIONS TO UNITHOLDERS".
PUBLIC OFFERING PRICE. Public Offering Price of a Trust during the Initial
Offering Period is based upon the OFFERING prices of the Securities in the
Trust's portfolio plus a sales charge as set forth in Part A of the Prospectus.
If so provided in Part A of the Prospectus, the Public Offering Price during the
period ending with the earlier of six months after the Initial Date of Deposit
or the end of the initial offering period also includes organization costs
incurred in establishing a Trust. These costs will be deducted from the assets
of the Trust as of the close of such period. See "FEES AND EXPENSES" in Part A
of the Prospectus. For Units purchased in the secondary market, the Public
Offering Price is based upon the BID prices of the Securities in the Trust, plus
the sales charges as set forth herein. Accrued interest on the Securities in the
Trust from the preceding Record Date to, but not including, the settlement date
(normally three business days after purchase) is added to the Public Offering
Price. (See "PUBLIC OFFERING PRICE.")
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
NUVEEN DEFINED PORTFOLIOS.......................................................................... 3
SUMMARY OF PORTFOLIOS.............................................................................. 3
COMPOSITION OF TRUSTS.............................................................................. 4
INSURANCE ON THE CORPORATE BONDS................................................................... 6
PUBLIC OFFERING PRICE.............................................................................. 7
MARKET FOR UNITS................................................................................... 10
ACCRUED INTEREST................................................................................... 10
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN............................................ 11
EVALUATION OF SECURITIES AT THE INITIAL DATE OF DEPOSIT............................................ 12
TAX STATUS......................................................................................... 12
TRUST OPERATING EXPENSES........................................................................... 15
DISTRIBUTIONS TO UNITHOLDERS....................................................................... 16
ACCUMULATION PLAN.................................................................................. 17
REPORTS TO UNITHOLDERS............................................................................. 18
UNIT VALUE AND EVALUATION.......................................................................... 18
DISTRIBUTIONS OF UNITS TO THE PUBLIC............................................................... 18
OWNERSHIP AND TRANSFER OF UNITS.................................................................... 20
REDEMPTION......................................................................................... 20
PURCHASE OF UNITS BY THE SPONSOR................................................................... 22
REMOVAL OF SECURITIES FROM THE TRUSTS.............................................................. 22
INFORMATION ABOUT THE TRUSTEE...................................................................... 22
LIMITATIONS ON LIABILITIES OF SPONSOR AND TRUSTEE.................................................. 22
SUCCESSOR TRUSTEES AND SPONSORS.................................................................... 23
INFORMATION ABOUT THE SPONSOR...................................................................... 23
OTHER INFORMATION.................................................................................. 24
LEGAL OPINION...................................................................................... 24
AUDITORS........................................................................................... 24
SUPPLEMENTAL INFORMATION........................................................................... 25
</TABLE>
2
<PAGE>
NUVEEN DEFINED PORTFOLIOS
This Nuveen Defined Portfolio is one of a series of separate but similar
investment companies created by the Sponsor, each of which is designated by a
different Series number. The underlying unit investment trusts contained in this
Series are combined under one Trust Indenture and Agreement. Specific
information regarding each Trust is set forth in Part A of this Prospectus. The
various Nuveen Defined Portfolios are collectively referred to herein as the
"TRUSTS." This Series was created under the laws of the State of New York
pursuant to a Trust Indenture and Agreement dated the Initial Date of Deposit
(the "INDENTURE") between John Nuveen & Co. Incorporated ("NUVEEN" or the
"SPONSOR") and The Chase Manhattan Bank (the "TRUSTEE").
The Sponsor has deposited with the Trustee delivery statements relating to
contracts for the purchase of the Securities described in the applicable Part A
of the Prospectus, together with funds represented by an irrevocable letter of
credit issued by a major commercial bank in the amount, including accrued
interest, required for their purchase (or the Securities themselves). See
"SCHEDULE OF INVESTMENTS" in Part A of this Prospectus, for a description of the
Securities deposited in a Trust. See "RISK/RETURN SUMMARY" and "RISK FACTORS" in
Part A of the Prospectus for a discussion of zero coupon bonds and stripped
obligations included in the Trusts, if any. Some of the delivery statements may
relate to contracts for the purchase of "when issued" or other Securities with
delivery dates after the date of settlement for a purchase made on the Initial
Date of Deposit. See the "SCHEDULE OF INVESTMENTS" in Part A of this Prospectus
and "COMPOSITION OF TRUSTS." For a discussion of the Sponsor's obligations in
the event of a failure of any contract for the purchase of any of the Securities
and its limited right to substitute other securities to replace any failed
contract, see "COMPOSITION OF TRUSTS."
The Trustee has delivered to the Sponsor registered Units which represent
ownership of the entire Trust, and which are offered for sale by this
Prospectus. Each Unit of a Trust represents a fractional undivided interest in
the principal and net income of such Trust. Units may only be sold in states in
which they are registered. To the extent that any Units of any Trust are
redeemed by the Trustee, the aggregate value of the Trust's assets will decrease
by the amount paid to the redeeming Unitholder, but the fractional undivided
interest of each unredeemed Unit in such Trust will increase proportionately.
The Sponsor will initially, and from time to time thereafter, hold Units in
connection with their offering.
Additional Units of each Trust may be issued from time to time following the
Initial Date of Deposit by depositing in such Trust additional Securities (or
contracts for the purchase thereof together with irrevocable letters of credit)
or cash (including a letter of credit) with instructions to purchase additional
Securities in the Trust. As additional Units are issued by a Trust as a result
of the deposit of additional Securities or cash by the Sponsor, the aggregate
value of the Securities in a Trust will be increased and the fractional
undivided interest in such Trust represented by each Unit will be decreased. The
Sponsor may continue to make additional deposits of Securities or cash with
instructions to purchase additional Securities, into such Trust following the
Initial Date of Deposit, provided that such additional deposits will be in
amounts which will maintain, within reasonable parameters, the same original
proportionate relationship among the Securities in such Trust established on the
Initial Date of Deposit. Thus, although additional Units will be issued, each
Unit will continue to represent the same proportionate amount of each Security,
and the percentage relationship among the principal amounts of the Securities in
the respective Trust will remain the same. To the extent that any Units are
redeemed by the Trustee or additional Units are issued as a result of additional
Securities or cash being deposited by the Sponsor, the fractional undivided
interest in a Trust represented by each unredeemed Unit will increase or
decrease accordingly, although the actual interest in such Trust represented by
such fraction will remain unchanged. If the Sponsor deposits cash, however,
existing and new investors may experience a dilution of their investment and a
reduction in their anticipated income because of fluctuations in the price of
the Securities between the time of the cash deposit and the purchase of the
Securities and because the Trust will pay the associated brokerage fees. To
minimize this effect, the Trust will try to purchase the Securities as close to
the evaluation time or as close to the evaluation price as possible. Units will
remain outstanding until redeemed upon tender to the Trustee by Unitholders,
which may include the Sponsor, or until termination of the Indenture. The
Sponsor may be considered to have realized a profit or to have sustained a loss,
as the case may be, in the amount of any difference between the cost of the
Securities to the Trust (which is based on the Evaluator's determination of the
aggregate offering price of the underlying Securities of the Trust) on the
subsequent date(s) of deposit and the cost of such Securities to Nuveen, if
applicable.
SUMMARY OF PORTFOLIOS
In selecting U.S. Treasury Obligations for deposit in the U.S. Treasury
Trusts the following factors, among others, were considered by the Sponsor: (a)
the types of such obligations available; (b) the prices and yields of such
obligations relative to other comparable obligations, including the extent to
which such obligations are traded at a premium or at a discount from par; and
(c) the maturities of such obligations.
3
<PAGE>
In selecting Corporate Bonds for deposit in the Corporate Trusts, the
following factors, among others, were considered by the Sponsor: (a) the prices
and yields of such Corporate Bonds relative to other Corporate Bonds of similar
quality and maturity, including the extent to which such Corporate Bonds are
traded at a premium or discount from par; (b) the present rating and credit
quality of the issuers of the Corporate Bonds and the potential improvement in
the credit quality of such issuers; (c) the diversification of the Corporate
Bonds as to location of issuer; (d) the income to the Unitholders of the
Corporate Trusts; (e) whether the Corporate Bonds were issued after July 18,
1984; (f) the stated maturities and call provisions of the Corporate Bonds; (g)
whether the Corporate Bonds were issued by a utility company; and (h) whether
the Corporate Bonds were insured and the availability and cost of insurance for
the Corporate Bonds.
COMPOSITION OF TRUSTS
Each Trust initially consists of delivery statements relating to contracts
to purchase Securities (or of such Securities) as are listed under "SCHEDULE OF
INVESTMENTS" in Part A of this Prospectus and, thereafter, of such Securities as
may continue to be held from time to time (including certain Securities
deposited in a Trust to create additional Units, in substitution for Securities
not delivered to a Trust or in exchange or substitution for Securities upon
certain refundings), together with accrued and undistributed interest thereon
and undistributed cash realized from the disposition of Securities.
"WHEN-ISSUED" AND "DELAYED DELIVERY" TRANSACTIONS. The contracts to
purchase Securities delivered to the Trustee represent an obligation by issuers
or dealers to deliver Securities to the Sponsor for deposit in the Trusts.
Certain of the contracts relate to Securities which have not been issued as of
the Initial Date of Deposit and which are commonly referred to as "when issued"
or "when, as and if issued" Securities. Although the Sponsor believes it
unlikely, if such Securities, or replacement Securities described below, are not
acquired by a Trust or if their delivery is delayed, the Estimated Current
Returns and Estimated Long Term Returns shown in Part A of this Prospectus may
be reduced. Certain of the contracts for the purchase of Securities provide for
delivery dates after the date of settlement for purchases made on the Initial
Date of Deposit. Interest on such "when issued" and "delayed delivery"
Securities accrues to the benefit of Unitholders commencing with the first
settlement date for the Units. However, in the opinion of counsel, Unitholders
who purchase their Units prior to the date such Securities are actually
delivered to the Trustee must reduce the tax basis of their Units for interest
accruing on such Securities during the interval between their purchase of Units
and the delivery of the Securities because such amounts constitute a return of
principal. As a result of such adjustment, the Estimated Current Returns set
forth in Part A of this Prospectus (which are based on the Public Offering Price
as of the business day prior to the Initial Date of Deposit) may be slightly
lower than that which Unitholders will receive after the first year, assuming
the Portfolio does not change and estimated annual expense does not vary from
that set forth under "FEES AND EXPENSES" in Part A of this Prospectus. Those
Securities in each Trust purchased with delivery dates after the date of
settlement for purchases made on the Initial Date of Deposit are so noted in the
"SCHEDULE OF INVESTMENTS" in Part A of this Prospectus.
LIMITED REPLACEMENT OF CERTAIN SECURITIES. Neither the Sponsor nor the
Trustee shall be liable in any way for any default, failure or defect in any
Security. In the event of a failure to deliver any Security that has been
purchased for a Trust under a contract, including those Securities purchased on
a when, as and if issued basis ("FAILED SECURITIES"), the Sponsor is authorized
under the Indenture to direct the Trustee to acquire other specified Securities
("REPLACEMENT SECURITIES") to make up the original corpus of the Trust within 20
days after delivery of notice of the failed contract and the cost to the Trust
(exclusive of accrued interest) may not exceed the amount of funds reserved for
the purchase of the Failed Securities. The Replacement Securities must satisfy
the criteria previously described for the Trusts and shall be substantially
identical to the Failed Securities they replace. For U.S. Treasury Trusts, the
Replacement Securities must be substantially identical to the Failed Securities
they replace in terms of (i) the exemption from state and local taxation; (ii)
maturity; and (iii) cost to the U.S. Treasury Trust. For Corporate Trusts, the
Replacement Securities (i) must be payable in United States currency, (ii) must
be purchased at a price that results in a yield to maturity and a current return
at least equal to that of the Failed Securities as of the Initial Date of
Deposit, (iii) must satisfy any rating criteria for Securities originally
included in the Corporate Trust, (iv) must be insured prior to acquisition by
the Corporate Trust, (v) must be corporate bonds, debentures, notes or other
straight debt obligations (whether secured or unsecured and whether senior or
subordinated) without equity or other conversion features, with fixed maturity
dates substantially the same as those or the Failed Securities having no
warrants or subscription privileges attached; and (vi) be issued after July 18,
1984. In addition, for any Trust, Replacement Securities shall not be "when, as
and if issued" Securities. Whenever a Replacement Security has been acquired for
a Trust, the Trustee shall, within five days after the delivery thereof, mail or
deliver a notice of such acquisition to all Unitholders of the Trust involved.
Once the original corpus of the Trust is acquired, the Trustee will have no
power to vary the investment of the Trust.
To the extent Replacement Securities are not acquired, the Sponsor shall
refund to all Unitholders of the Trust involved the sales charge attributable to
such Failed Securities not replaced, and the principal and accrued interest
attributable to
4
<PAGE>
such Securities shall be distributed not more than 30 days after the
determination of such failure or at such earlier time as the Trustee in its sole
discretion deems to be in the interest of the Unitholders. Any such accrued
interest paid to Unitholders will be paid by the Sponsor. In the event Failed
Securities in a Trust could not be replaced, the Net Annual Interest Income per
Unit for such Trust would be reduced and the Estimated Current Return thereon
might be lowered.
The Indenture also authorizes the Sponsor to increase the size of the Trust
and the number of Units thereof by the deposit of additional Securities in the
Trust or cash (including a letter of credit) with instructions to purchase
additional Securities in the Trust and the issuance of a corresponding number of
additional Units. If the Sponsor deposits cash, however, existing and new
investors may experience a dilution of their investment and a reduction in their
anticipated income because of fluctuations in the prices of the Securities
between the time of the cash deposit and the purchase of the Securities and
because the Trust will pay the associated brokerage fees.
SALE, MATURITY AND REDEMPTION OF SECURITIES. Certain of the Securities may
from time to time under certain circumstances be sold or will mature in
accordance with their terms. The proceeds from such events will be used to pay
for expenses or for Units redeemed or distributed to Unitholders and not
reinvested; accordingly, no assurance can be given that a Trust will retain for
any length of time its present size and composition.
Certain Bonds in the Trusts may be subject to being called or redeemed in
whole or in part prior to their stated maturities pursuant to the optional
redemption provisions described in the "SCHEDULE OF INVESTMENTS" in Part A of
this Prospectus and in most cases pursuant to a sinking fund or special or
extraordinary redemption provisions. See the discussion of the various types of
bond issues, above, for information on the call provisions of such bonds,
particularly single family mortgage revenue bonds. Certain Bonds may carry a
"mandatory put" (also referred to as a "mandatory tender" or "mandatory
repurchase") feature pursuant to which the holder of such Bonds will receive
payment of the full principal amount thereof on a stated date prior to the
maturity date unless such holder affirmatively acts to retain the Bond. The
Trustee does not have the authority to act to retain Bonds with such features;
accordingly, it will receive payment of the full principal amount of any such
Bonds on the stated put date and such date is therefore treated as the maturity
date of such Bonds in selecting Bonds for the respective Trusts and for purposes
of calculating the average maturity of the Bonds in any Trust.
The exercise of redemption or call provisions will (except to the extent the
proceeds of the called Bonds are used to pay for Unit redemptions) result in the
distribution of principal and may result in a reduction in the amount of
subsequent interest distributions; it may also affect the current return on
Units of the Trust involved. The exercise of redemption or call provisions is
more likely to occur in situations where the Bonds have an offering side
evaluation which represents a premium over par (as opposed to a discount from
par). (In the case of original issue discount bonds, such redemption is
generally to be made at the issue price plus the amount of original issue
discount accreted to the date of redemption; such price is referred to herein as
"accreted value"). Because Bonds may have been valued at prices above or below
par value or the then current accreted value at the time Units were purchased,
Unitholders may realize gain or loss upon the redemption of portfolio Bonds.
YEAR 2000 PROBLEM. Like other investment companies, financial and business
organizations and individuals around the world, a Trust could be adversely
affected if the computer systems used by the Sponsor or Trustee or other service
providers to a Trust do not properly process and calculate date-related
information and data from and after January 1, 2000. This is commonly known as
the "Year 2000 Problem." The Sponsor and Trustee are taking steps that they
believe are reasonably designed to address the Year 2000 Problem with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by a Trust's other service providers. At this
time, however, there can be no assurance that these steps will be sufficient to
avoid any adverse impact to the Trusts.
The Year 2000 Problem is expected to impact corporations and other parties,
which may include issuers of the Securities contained in a Trust, to varying
degrees based upon various factors, including, but not limited to, their
industry sector and degree of technological sophistication. The Sponsor is
unable to predict what impact, if any, the Year 2000 Problem will have on
issuers of the Securities contained in the Trusts.
ORIGINAL ISSUE DISCOUNT OBLIGATIONS AND STRIPPED OBLIGATIONS. Certain
Trusts may include original issue discount obligations or stripped obligations.
Such bonds are bonds which were issued with nominal interest rates less than the
rates then offered by comparable securities and as a consequence were originally
sold at a discount from their face, or par, values. In a stable interest rate
environment, the market value of an original issue discount bond would tend to
increase more slowly in early years and in greater increments as the bond
approached maturity.
Certain of the original issue discount obligations in a Trust may be zero
coupon bonds. Zero coupon bonds do not provide for the payment of any current
interest; the buyer receives only the right to receive a final payment of the
face
5
<PAGE>
amount of the bond at its maturity. Zero coupon bonds are subject to
substantially greater price fluctuations during periods of changing market
interest rates than are securities of comparable quality that pay interest
currently.
Original issue discount obligations, including zero coupon bonds, may be
subject to redemption at prices based on the issue price plus the amount of
original issue discount accreted to redemption (the "accreted value") plus, if
applicable, some premium. Pursuant to such call provisions, an original issue
discount bond may be called prior to its maturity date at a price less than its
face value. See the "SCHEDULE OF INVESTMENTS" appearing in Part A of this
Prospectus for more information about the call provisions of portfolio Bonds.
Certain of the Bonds in a Trust may be stripped obligations, which represent
evidences of ownership with respect to either the principal amount of or a
payment of interest on an obligation ("Stripped Obligations"). Each Stripped
Obligation has been purchased at a discount from the amount payable at maturity.
A Stripped Obligation therefore has economic charactersitics similar to zero
coupon bonds, as described above.
Unitholders should consult their own tax adviser with respect to the state
and local tax consequences of owning original issue discount bonds or Stripped
Obligations. Under applicable provisions governing determination of state and
local taxes, interest on original issue discount obligations or Stripped
Obligations may be deemed to be received in the year of accrual even though
there is no corresponding cash payment.
LEGISLATION. At any time after the Initial Date of Deposit, legislation may
be enacted, with respect to the Securities in a Trust or the issuers of the
Securities. Changing approaches to regulation, particularly with respect to the
environment, may have a negative impact on certain companies represented in a
Trust. There can be no assurance that future legislation, regulation or
deregulation will not have a material adverse effect on a Trust or will not
impair the ability of the issuers of the Securities to achieve their business
goals.
LITIGATION. Except as provided in Part A of the Prospectus, to the best
knowledge of the Sponsor, there is no litigation pending as of the Initial Date
of Deposit in respect of any Securities which might reasonably be expected to
have a material adverse effect on any of the Trusts. It is possible that after
the Initial Date of Deposit, litigation may be initiated with respect to
Securities in any Trust or current litigation may have unexpected results. The
Sponsor is unable to predict whether any such litigation may have such results
or may be instituted, or if instituted, whether any such litigation might have a
material adverse effect on the Trusts.
INSURANCE ON THE CORPORATE BONDS
All Bonds in an Insured Corporate Trust portfolio except for any U.S.
Treasury obligations contained in such portfolio are insured as to the scheduled
payment of interest and principal under a financial guaranty insurance policy
obtained by the issuer of the Corporate Bonds or by the Sponsor from MBIA
Insurance Corporation ("MBIA"). The premium for each such insurance policy has
been paid in advance by such issuer or the Sponsor and each such policy is
non-cancellable and will remain in force so long as the Corporate Bonds are
outstanding and MBIA remains in business. No premiums for such insurance are
paid by any Corporate Trust. If MBIA is unable to meet its obligations under its
policy or if the rating assigned to the claims-paying ability of MBIA
deteriorates, no other insurer has any obligation to insure any issue adversely
affected by either of these events.
The aforementioned insurance guarantees the scheduled payment of principal
and interest on all of the Corporate Bonds in an Insured Corporate Trust except
for any U.S. Treasury obligations. It does not guarantee the market value of the
Corporate Bonds or the value of the Units of a Corporate Trust. This insurance
is effective so long as the Corporate Bond is outstanding, whether or not held
by a Corporate Trust. Therefore, any such insurance may be considered to
represent an element of market value in regard to the Corporate Bonds, but the
exact effect, if any, of this insurance on such market value cannot be
predicted.
MBIA, formerly known as Municipal Bond Investors Insurance Corporation, is
the principal operating subsidiary of MBIA, Inc., a New York Stock Exchange
listed company. MBIA, Inc. is not obligated to pay the debts of or claims
against MBIA. MBIA is domiciled in the State of New York and licensed to do
business in and subject to regulation under all 50 states, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern
Mariana Islands, the Virgin Islands of the United States and the Territory of
Guam. MBIA has two European branches, one in the Republic of France and the
other in the Kingdom of Spain.
As of December 31, 1998, MBIA had admitted assets of $6.5 billion (audited),
total liabilities of $4.2 billion (audited), and total capital and surplus of
$2.3 billion (audited) determined in accordance with statutory accounting
practices prescribed or permitted by insurance regulatory authorities. As of
March 31, 1999, MBIA had admitted assets of $6.7 billion (unaudited), total
liabilities of $4.4 billion (unaudited), and total capital and surplus of $2.3
billion (unaudited) determined in accordance with statutory accounting practices
prescribed or permitted by insurance regulatory authorities. Copies of MBIA
Corporation's financial statements prepared in accordance with statutory
accounting practices are available from
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<PAGE>
MBIA Corporation. The address of MBIA Corporation is 113 King Street, Armonk,
New York 10504. The telephone number of MBIA is (914) 273-4545.
YEAR 2000 READINESS DISCLOSURE
MBIA Inc. is actively managing a high-priority Year 2000 (Y2K) program. The
company has established an independent Y2K testing lab in its Armonk
headquarters, with a committee of business unit managers overseeing the project.
MBIA has a budget of $1.13 million for its 1998-2000 Y2K efforts. Expenditures
are proceeding as anticipated, and we do not expect the project budget to
materially exceed this amount. MBIA has initiated a comprehensive Y2K plan that
includes assessment, remediation, testing and contingency planning. This plan
covers "mission-critical" internally developed systems, vendor software,
hardware and certain third-party entities through which MBIA conducts their
business. Testing to date indicates that functions critical to the financial
guarantee business, both domestic and international, were Y2K-ready as of
December 31, 1998. Additional testing will continue throughout 1999.
Moody's Investors Service, Inc. rates the financial strength of MBIA "Aaa".
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc., rates the financial strength of MBIA "AAA".
Fitch IBCA, Inc., (formerly known as Fitch Investors Service, L.P.) rates
the financial strength of MBIA "AAA".
Each rating of MBIA should be evaluated independently. The ratings reflect
the respective rating agency's current assessment of the creditworthiness of
MBIA and its ability to pay claims on its policies of insurance. Any further
explanation as to the significance of the above ratings may be obtained only
from the applicable rating agency.
The above ratings are not recommendations to buy, sell or hold the Bonds,
and such ratings may be subject to revision or withdrawal at any time by the
rating agencies. Any downward revision or withdrawal of any of the above ratings
may have an adverse effect on the market price of the Bonds. MBIA does not
guaranty the market price of the Bonds nor does it guaranty that the ratings on
the Bonds will not be revised or withdrawn.
Because the Corporate Bonds in an Insured Corporate Trust (other than U.S.
Treasury Obligations) are insured as to the scheduled payment of principal and
interest and on the basis of the financial condition and the method of operation
of MBIA, Standard & Poor's has assigned to Units in such Insured Corporate
Trusts its "AAA" investment rating. This is the highest rating assigned to
securities by such rating agency and will remain in effect for a period of 13
months following an Insured Corporate Trust's Initial Date of Deposit, unless
renewed. These ratings should not be construed as an approval of the offering of
the Units by Standard & Poor's or as a guarantee of the market value of an
Insured Corporate Trust or the Units thereof.
Bonds in an Insured Corporate Trust for which insurance has been obtained by
the issuer thereof or by the Sponsor from MBIA (all of which were rated "AAA" by
Standard & Poor's and "Aaa" by Moody's) may or may not have a higher yield than
uninsured bonds rated "AAA" by Standard & Poor's and "Aaa" by Moody's. In
selecting Corporate Bonds for the portfolio of a Corporate Trust, the Sponsor
has applied the criteria hereinbefore described.
PUBLIC OFFERING PRICE
The Public Offering Price of the Units of each Trust is equal to the
Trustee's determination of the aggregate offering prices of the Securities
deposited therein (minus any advancement to the principal account of the Trust
made by the Trustee) plus a sales charge as set forth in Part A of this
Prospectus, in each case adding to the total thereof, cash held by the Trust, if
any (minus accrued expenses and any advances to the Trust made by the Trustee),
and dividing the sum so obtained by the number of Units outstanding in the
Trust. In addition, if so provided in Part A of the Prospectus, a portion of the
Public Offering Price during the initial offering period also consists of cash
and/or Securities in an amount sufficient to pay for all or a portion of the
costs incurred in establishing a Trust, including costs of preparing the
registration statement, the trust indenture and other closing documents,
registering Units with the Securities and Exchange Commission and states, the
initial audit of each Trust portfolio, the initial evaluation, legal fees, the
initial fees and expenses of the Trustee and any non-material out-of-pocket
expenses.
If Securities are purchased with the portion of the Public Offering Price
intended to be used to reimburse the Sponsor for the Trust's organization costs,
such Securities will be purchased in the same proportionate relationship as all
the Securities contained in the Trust. Such Securities will be sold to reimburse
the Sponsor for the Trust's organization costs at the earlier of six months
after the Initial Date of Deposit or the end of the initial offering period (a
shorter time period than the life of the Trust). Also, any cash reserved for
such purposes will be paid to the Sponsor at the earlier of six months after the
Initial Date of Deposit or the end of the initial offering period. During the
period ending with the earlier of six months after the Initial Date of Deposit
or the end of the initial offering period, there may be a decrease in the value
of the Securities. To the extent the proceeds from the sale of these Securities
and any cash reserved are insufficient to repay the Sponsor for the Trust
organization costs, the Trustee will sell additional Securities to allow the
Trust to fully reimburse the
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<PAGE>
Sponsor. In that event, the net asset value per Unit will be reduced by the
amount of additional Securities sold. Although the dollar amount of the
reimbursement due to the Sponsor will remain fixed and will never exceed the
amount per Unit set forth for the Trust in "STATEMENT OF CONDITION," this will
result in a greater effective cost per Unit to Unitholders for the reimbursement
to the Sponsor. When Securities are sold to reimburse the Sponsor for
organization costs, the Trustee will sell such Securities to an extent which
will maintain the same proportionate relationship among the Securities contained
in the Trust as existed prior to such sale. See "FEES AND EXPENSES" in Part A of
the Prospectus. See "UNIT VALUE AND EVALUATION."
The sales charge applicable to quantity purchases is reduced on a graduated
scale. For purposes of calculating the applicable sales charge, purchasers who
have indicated their intent to purchase a specified amount of Units of any
Nuveen unit investment trust in the primary or secondary offering period by
executing and delivering a letter of intent to the Sponsor, which letter of
intent must be in a form acceptable to the Sponsor and shall have a maximum
duration of thirteen months, will be eligible to receive a reduced sales charge
according to the graduated scale provided in Part A of this Prospectus, based on
the amount of intended aggregate purchases (excluding purchases which are
subject only to a deferred sales charge) as expressed in the letter of intent.
For purposes of letter of intent calculations, units of equity products are
valued at $10 per unit. Due to administrative limitations and in order to permit
adequate tracking, the only secondary market purchases that will be permitted to
be applied toward the intended specified amount and that will receive the
corresponding reduced sales charge are those Units that are acquired through or
from the Sponsor. By establishing a letter of intent, a Unitholder agrees that
the first purchase of Units following the execution of such letter of intent
will be at least 5% of the total amount of intended aggregate purchases
expressed in such Unitholder's letter of intent. Further, through the
establishment of the letter of intent, such Unitholder agrees that Units
representing 5% of the total amount of the intended purchases will be held in
escrow by the Trustee pending completion of these purchases. All distributions
on Units held in escrow will be credited to such Unitholder's account. If total
purchases prior to the expiration of the letter of intent period equal or exceed
the amount specified in a Unitholder's letter of intent, the Units held in
escrow will be transferred to such Unitholder's account. A Unitholder who
purchases Units during the letter of intent period in excess of the number of
Units specified in a Unitholder's letter of intent, the amount of which would
cause the Unitholder to be eligible to receive an additional sales charge
reduction, will be allowed such additional sales charge reduction on the
purchase of Units which caused the Unitholder to reach such new breakpoint level
and on all additional purchases of Units during the letter of intent period. If
the total purchases are less than the amount specified, the Unitholder involved
must pay the Sponsor an amount equal to the difference between the amounts paid
for these purchases and the amounts which would have been paid if the higher
sales charge had been applied; the Unitholder will, however, be entitled to any
reduced sales charge qualified for by reaching any lower breakpoint level. If
such Unitholder does not pay the additional amount within 20 days after written
request by the Sponsor or the Unitholder's securities representative, the
Sponsor will instruct the Trustee to redeem an appropriate number of the
escrowed Units to meet the required payment. By establishing a letter of intent,
a Unitholder irrevocably appoints the Sponsor as attorney to give instructions
to redeem any or all of such Unitholder's escrowed Units, with full power of
substitution in the premises. A Unitholder or his securities representative must
notify the Sponsor whenever such Unitholder makes a purchase of Units that he
wishes to be counted towards the intended amount.
For "secondary market" sales, the Public Offering Price per Unit of each
Trust is based on the Trustee's determination of the bid price of each Security
in the Trust and includes a sales charge as set forth below based upon the
number of years remaining to the maturity of each such Security. See "UNIT VALUE
AND EVALUATION." The effect of this method of sales charge calculation will be
that different sales charge rates will be applied to the various Securities in a
Trust portfolio based upon the maturities of such Securities. As shown, the
sales charge on Securities in each maturity range (and therefore the aggregate
sales charge on the purchase) is reduced with respect to volume purchases:
Corporate Trust Secondary Market Sales Charges
<TABLE>
<CAPTION>
AMOUNT OF PURCHASE*
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$50,000 $100,000 $250,000 $500,000 $1,000,000 $2,500,000
UNDER TO TO TO TO TO TO $5,000,000
YEARS TO MATURITY $50,000 $99,999 $249,999 $499,999 $999,999 $2,499,999 $4,999,999 OR MORE
- ------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Less than 1.............. 0 0 0 0 0 0 0 0
1 but less than 2........ 1.523% 1.446% 1.369% 1.317% 1.215% 1.061% .900% .750%
2 but less than 3........ 2.041 1.937 1.833 1.729 1.626 1.420 1.225 1.030
3 but less than 4........ 2.564 2.433 2.302 2.175 2.041 1.781 1.546 1.310
4 but less than 5........ 3.093 2.961 2.828 2.617 2.459 2.175 1.883 1.590
5 but less than 7........ 3.627 3.433 3.239 3.093 2.881 2.460 2.165 1.870
7 but less than 10....... 4.167 3.951 3.734 3.520 3.239 2.828 2.489 2.150
10 but less than 13...... 4.712 4.467 4.221 4.004 3.788 3.253 2.842 2.430
13 but less than 16...... 5.263 4.988 4.712 4.439 4.167 3.627 3.169 2.710
16 or more............... 5.820 5.542 5.263 4.987 4.603 4.004 3.500 3.000
</TABLE>
*Breakpoint sales charges are computed both on a dollar basis and on the basis
of the number of Units purchased, using the equivalent of 500 Units to
$50,000, 2,500 Units to $250,000, etc., and will be applied on that basis
which is more favorable to the purchaser.
8
<PAGE>
U.S. Treasury Trust Secondary Market Sales Charges
<TABLE>
<CAPTION>
AMOUNT OF PURCHASE*
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$50,000 $100,000 $250,000 $500,000 $1,000,000 $2,500,000
UNDER TO TO TO TO TO TO $5,000,000
YEARS TO MATURITY $50,000 $99,999 $249,999 $499,999 $999,999 $2,499,999 $4,999,999 OR MORE
- ------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Less than 1.............. 0 0 0 0 0 0 0 0
1 but less than 2........ 1.10% 1.00% 0.90% 0.90% 0.80% 0.70% 0.60% 0.50%
2 but less than 3........ 1.40 1.30 1.30 1.20 1.10 1.00 0.80 0.70
3 but less than 4........ 1.60 1.50 1.50 1.40 1.30 1.10 1.00 0.80
4 but less than 5........ 1.80 1.70 1.70 1.50 1.40 1.30 1.10 0.90
5 but less than 7........ 1.90 1.80 1.70 1.70 1.50 1.30 1.20 1.00
7 but less than 10....... 2.20 2.10 2.00 1.90 1.70 1.50 1.30 1.20
10 but less than 13...... 2.70 2.60 2.40 2.30 2.20 1.90 1.70 1.40
13 but less than 16...... 3.30 3.10 2.90 2.80 2.60 2.30 2.00 1.70
16 or more............... 3.60 3.40 3.30 3.10 2.90 2.50 2.20 1.90
</TABLE>
*Breakpoint sales charges are computed both on a dollar basis and on the basis
of the number of Units purchased, using the equivalent of 5,000 Units to
$500,000 and 10,000 Units to $1 million, etc., and will be applied on that
basis which is more favorable to the purchaser.
The secondary market sales charges above are expressed as a percent of the
net amount invested; expressed as a percent of the Public Offering Price, the
maximum sales charge on a Corporate Trust, for instance one consisting entirely
of Bonds with 16 years or more to maturity, would be 5.50% (5.820% of the net
amount invested). The actual secondary market sales charge included in the
Public Offering Price of any particular Trust will depend on the maturities of
the Securities in the portfolio of such Trust.
Pursuant to the terms of the Indenture, the Trustee may terminate a Trust if
the net asset value of such Trust, as shown by any evaluation, is less than 20%
of the aggregate principal amount of Securities deposited in the Trust during
the initial offering period of the Trust.
At all times while Units are being offered for sale, the Sponsor will
appraise or cause to be appraised daily the value of the underlying Securities
in each Trust as of 4:00 p.m. eastern time, or as of any earlier closing time on
a day on which the New York Stock Exchange (the "EXCHANGE") is scheduled in
advance to close at such earlier time (the "Evaluation Time") and will adjust
the Public Offering Price of the Units commensurate with such appraisal. Such
Public Offering Price will be effective for all orders received by a dealer or
the Sponsor at or prior to 4:00 p.m. eastern time on each such day or as of any
earlier closing time on a day on which the Exchange is scheduled in advance to
close at such earlier time. Orders received after that time, or on a day when
the Exchange is closed for a scheduled holiday or weekend, will be held until
the next determination of price.
Accrued interest from the preceding Record Date to, but not including, the
settlement date of the transaction (three business days after purchase) will be
added to the Public Offering Price to determine the purchase price of Units. See
"ACCRUED INTEREST."
The graduated sales charges set forth in the table provided in Part A of
this Prospectus and/or herein will apply on all applicable purchases of Nuveen
investment company securities on any one day by the same purchaser in the
amounts stated, and for this purpose purchases of a Trust will be aggregated
with concurrent purchases of any other Nuveen unit investment trust or of shares
of any open-end management investment company of which the Sponsor is principal
underwriter and with respect to the purchase of which a sales charge is imposed.
Purchases by or for the account of individuals and their spouses, parents,
children, grandchildren, grandparents, parents-in-law, sons - and
daughters-in-law, siblings, a sibling's spouse and a spouse's siblings,
("IMMEDIATE FAMILY MEMBERS") will be aggregated to determine the applicable
sales charge. The graduated sales charges are also applicable to a trustee or
other fiduciary purchasing securities for a single trust estate or single
fiduciary account.
Units may be purchased in the primary market with a sales charge as provided
for "Wrap Account Purchases" under "HOW TO BUY AND SELL UNITS" in Part A of this
Prospectus by (1) investors who purchase Units through registered investment
advisers, certified financial planners and registered broker-dealers who in each
case either charge periodic fees for financial planning, investment advisory or
asset management services, or provide such services in connection with the
establishment of an investment account for which a comprehensive "wrap fee"
charge is imposed; (2) bank trust departments investing funds over which they
exercise exclusive discretionary investment authority and that are held in a
fiduciary, agency, custodial or similar capacity; (3) any person who for at
least 90 days, has been an officer, director or bona fide employee of any firm
offering Units for sale to investors, (4) officers and directors of bank holding
companies that make Units available directly or through subsidiaries or bank
affiliates, (5) officers or directors and bona fide, full-time employees of
Nuveen, Nuveen Advisory Corp., Nuveen Institutional Advisory Corp., Rittenhouse
Financial Services, Inc., and The John Nuveen Company, including in each case
these individuals and their spouses, minor children, and parents, however,
purchases by parents must be made through a registered broker-dealer and (6) any
person who for at least 90 days, has been an officer,
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<PAGE>
director or bona fide employee of any vendor who provides services to the
Sponsor and who purchases Units through a registered broker-dealer
(collectively, the "DISCOUNTED PURCHASES"). In addition, such investors may
purchase Units in the secondary market at the Public Offering Price for
non-breakpoint purchases minus the concession the Sponsor typically allows to
brokers and dealers for non-breakpoint purchases. Notwithstanding anything to
the contrary in this Prospectus, investors who purchase Units as described in
this paragraph will not receive sales charge reductions for quantity purchases.
The initial or primary Public Offering Price of the Units in each Trust is
based upon a pro rata share of the offering prices per Unit of the Securities in
such Trust plus the applicable sales charge. The secondary market Public
Offering Price of each Trust is based upon a pro rata share of the bid prices
per Unit of the Securities in such Trust plus the applicable sales charge. The
offering prices of Securities in a Trust may be expected to average between 1/2%
to 2% more than the bid prices of such Securities. The difference between the
bid side evaluation and the offering side evaluation of the Securities in each
Trust on the business day prior to the Initial Date of Deposit is shown in the
discussion of each Trust portfolio.
Whether or not Units are being offered for sale, the Trustee will determine
or cause to be determined the aggregate value of each Trust as of 4:00 p.m.
eastern time: (i) on each June 30 or December 31 (or, if such date is not a
business day, the last business day prior thereto), (ii) on any day on which a
Unit is tendered for redemption (or the next succeeding business day if the date
of tender is a non-business day) and (iii) at such other times as may be
necessary. For this purpose, a "business day" shall be any day on which the
Exchange is normally open. (See "UNIT VALUE AND EVALUATION.")
MARKET FOR UNITS
During the initial public offering period, the Sponsor intends to offer to
purchase Units of each Trust at a price based upon the pro rata share per Unit
of the offering prices of the Securities in such Trust (plus accrued interest).
Afterward, although it is not obligated to do so, the Sponsor intends to
maintain a secondary market for Units of certain Trusts at its own expense and
continuously offer to purchase Units of each such Trust at prices, subject to
change at any time, which are based upon the bid prices of Securities in the
respective portfolios of such Trusts. If so provided in Part A of the
Prospectus, during the period ending with the earlier of six months after the
Initial Date of Deposit or the end of the initial offering period, the price at
which the Sponsor expects to repurchase Units (the "SPONSOR'S REPURCHASE PRICE")
includes estimated organization costs per Unit. After such period, the Sponsor's
Repurchase Price will not include such estimated organization costs. See "FEES
AND EXPENSES" in Part A of the Prospectus. UNITHOLDERS WHO WISH TO DISPOSE OF
THEIR UNITS SHOULD INQUIRE OF THE TRUSTEE OR THEIR BROKER AS TO THE CURRENT
REDEMPTION PRICE. (See "REDEMPTION.")
In connection with its secondary market making activities, the Sponsor may
from time to time enter into secondary market joint account agreements with
other brokers and dealers. Pursuant to such an agreement, the Sponsor will
purchase Units from the broker or dealer at the bid price and will place the
Units into a joint account managed by the Sponsor; sales from the account will
be made in accordance with the then current prospectus and the Sponsor and the
broker or dealer will share profits and losses in the joint account in
accordance with the terms of their joint account agreement.
In maintaining a market for the Units, the Sponsor will realize profits or
sustain losses in the amount of any difference between the price at which Units
are purchased and the price at which Units are resold or redeemed. The secondary
market Public Offering Price of Units may be greater or less than the cost of
such Units to the Sponsor.
Certificates, if any, for Units are delivered to the purchaser as promptly
after the date of settlement (three business days after purchase) as the Trustee
can complete the mechanics of registration, normally within 48 hours after
registration instructions are received. Purchasers of Units to whom Certificates
are issued will be unable to exercise any right of redemption until they have
received their Certificates, properly endorsed for transfer. (See "REDEMPTION.")
ACCRUED INTEREST
Accrued interest is the accumulation of unpaid interest on a security bond
from the last day on which interest thereon was paid. Interest on Securities in
each Trust is accounted for daily on an accrual basis. For this reason, the
purchase price of Units of a Trust will include not only the Public Offering
Price but also the proportionate share of accrued interest to the date of
settlement. Unitholders will receive on the next distribution date of a Trust
the amount, if any, of accrued interest paid on their Units.
In an effort to reduce the amount of accrued interest that investors would
have to pay in addition to the Public Offering Price, the Trustee has agreed to
advance to each Trust the amount of accrued interest due on the Securities as of
the Initial Date of Deposit (which has been designated the first Record Date).
This accrued interest will be paid to the Sponsor as the holder of record of all
Units on the Initial Date of Deposit. Consequently, the amount of accrued
interest to be added to the Public Offering Price of Units will include only
accrued interest from the preceding Record Date to, but not including, the
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<PAGE>
date of settlement of the investor's purchase (three business days after
purchase). The Trustee will recover its advancements (without interest or other
cost to the Trusts) from interest received on the Securities deposited in each
Trust.
The Trustee has no cash for distribution to Unitholders until it receives
interest payments on the Securities in the Trusts. Since interest is accrued
daily but paid only semi-annually, during the initial months of the Trusts, the
Interest Accounts, consisting of accrued but uncollected interest and collected
interest (cash), will be predominantly the uncollected accrued interest that is
not available for distribution. However, due to advances by the Trustee, the
Trustee will provide a first distribution approximately 30 to 60 days after the
Initial Date of Deposit. Assuming each Trust retains its original size and
composition and expenses and fees remain the same, annual interest collected and
distributed will approximate the estimated Net Annual Interest Income stated in
Part A of this Prospectus. However, the amount of accrued interest at any point
in time will be greater than the amount that the Trustee will have actually
received and distributed to the Unitholders. Therefore, there will always remain
an item of accrued interest that is included in the purchase price and the
redemption price of the Units.
Interest is accounted for daily and a proportionate share of accrued and
undistributed interest computed from the preceding Record Date is added to the
daily valuation of each Unit of each Trust. (See Part A of this Prospectus and
"DISTRIBUTIONS TO UNITHOLDERS.") As Securities mature, or are redeemed or sold,
the accrued interest applicable to such securities is collected and subsequently
distributed to Unitholders. Unitholders who sell or redeem all or a portion of
their Units will be paid their proportionate share of the remaining accrued
interest to, but not including, the third business day following the date of
sale or tender.
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN
The Estimated Long Term Return for each Trust is a measure of the return to
the investor expected to be earned over the estimated life of the Trust. The
Estimated Long Term Return represents an average of the yields to maturity (or
call) of the Securities in the Trust's portfolio calculated in accordance with
accepted practice and adjusted to reflect expenses and sales charges. Under
accepted practice, securities are customarily offered to investors on a "yield
price" basis, which involves computation of yield to maturity or to an earlier
call date (whichever produces the lower yield), and which takes into account not
only the interest payable on the securities but also the amortization or
accretion of any premium over, or discount from, the par (maturity) value
inherent in the security's purchase price. In the calculation of Estimated Long
Term Return, the average yield for a Trust's portfolio is derived by weighting
each Security's yield by the market value of the Security and by the amount of
time remaining to the date to which the Security is priced. This weighted
average yield is then adjusted to reflect estimated expenses, is compounded, and
is reduced by a factor which represents the amortization of the sales charge
over the expected average life of a Trust. The Estimated Long Term Return
calculation does not take into account the effect of a first distribution which
may be less than a regular distribution or may be paid at some point after 30
days (or a second distribution which may be less than a normal distribution for
Unitholders who choose quarterly or semi-annual plans of distribution), and it
also does not take into account the difference in timing of payments to
Unitholders who choose quarterly or semi-annual plans of distribution, each of
which will effect the return.
Estimated Current Return is computed by dividing the Net Annual Interest
Income per Unit by the Public Offering Price. In contrast to Estimated Long Term
Return, Estimated Current Return does not reflect the amortization of premium or
accretion of discount, if any, on the Securities in a Trust's portfolio. Net
Annual Interest Income per Unit is calculated by dividing the annual interest
income to a Trust, less estimated expenses, by the number of Units outstanding.
Net Annual Interest Income per Unit, used to calculate Estimated Current
Return, will vary with changes in fees and expenses of the Trustee and the
Evaluator and with the redemption, maturity, exchange or sale of Securities. A
Unitholder's actual return may vary significantly from the Estimated Long-Term
Return, based on their holding period, market interest rate changes, other
factors affecting the prices of individual securities in the portfolio, and
differences between the expected remaining life of portfolio securities and the
actual length of time that they remain in a Trust; such actual holding periods
may be reduced by termination of a Trust, as described in "OTHER INFORMATION."
Since both the Estimated Current Return and the Estimated Long Term Return
quoted herein are based on the market value of the underlying Securities on the
business day prior to the Initial Date of Deposit, subsequent calculations of
these performance measures will reflect the then current market value of the
underlying Securities and may be higher or lower. The Sponsor will provide
estimated cash flow information relating to a Trust without charge to each
potential investor in a Trust who receives this prospectus and makes an oral or
written request to the Sponsor for such information.
A portion of the monies received by a Trust may be treated, in the first
year only, as a return of principal due to the inclusion in the Trust portfolio
of "when-issued" or other Securities having delivery dates after the date of
settlement for purchases made on the Initial Date of Deposit. A consequence of
this treatment is that in the computation of Estimated
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Current Return for the first year, such monies are excluded from Net Annual
Interest Income and treated as an adjustment to the Public Offering Price. (See
"COMPOSITION OF TRUSTS" and "TAX STATUS").
EVALUATION OF SECURITIES AT THE INITIAL DATE OF DEPOSIT
The prices at which the Securities deposited in the Trusts would have been
offered to the public on the business day prior to the Initial Date of Deposit
were determined by the Trustee on the basis of an evaluation of such securities
prepared by Kenny S&P Evaluation Services, a division of J.J. Kenny Co., Inc., a
firm regularly engaged in the business of evaluating, quoting or appraising
comparable securities.
The amount by which the Trustee's determination of the OFFERING PRICES of
the Securities deposited in the Trusts was greater or less than the cost of such
Securities to the Sponsor was PROFIT OR LOSS to the Sponsor exclusive of any
underwriting profit. (See Part A of this Prospectus.) The Sponsor also may
realize FURTHER PROFIT OR SUSTAIN FURTHER LOSS as a result of fluctuations in
the Public Offering Price of the Units. Cash, if any, made available to the
Sponsor prior to the settlement date for a purchase of Units, or prior to the
acquisition of all Portfolio securities by a Trust, may be available for use in
the Sponsor's business, and may be of benefit to the Sponsor.
TAX STATUS
For purposes of the following discussion and opinions, it is assumed that
each Obligation is debt for federal income tax purposes and that interest on
each Obligation is includable in gross income for federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. Each Trust is not an association taxable as a corporation for
federal income tax purposes.
2. Each Unitholder will be considered the owner of a pro rata portion
of each of a Trust's assets for federal income tax purposes under Subpart E,
Subchapter J of Chapter 1 of the Internal Revenue Code of 1986 (the "CODE").
Each Unitholder will be considered to have received his pro rata share of
income derived from each Trust asset when such income is considered to be
received by a Trust. Each Unitholder will be required to include in taxable
income for federal income tax purposes, original issue discount with respect
to his interest in any Obligation held by a Trust at the same time and in
the same manner as though the Unitholder were the direct owner of such
interest.
3. Each Unitholder will have a taxable event when an Obligation is
disposed of (whether by sale, exchange, liquidation, redemption, payment at
maturity, or otherwise) or when the Unitholder redeems or sells his Units. A
Unitholder's tax basis in his Units will equal his tax basis in his pro rata
portion of all the assets of the Trust. Such basis is determined (before the
adjustments described below) by apportioning the tax basis for the Units
among each of the Trust's assets, according to value as of the valuation
date nearest the date of acquisition of the Units. Unitholders must reduce
the tax basis of their Units for their share of accrued interest received,
if any, on Obligations delivered after the date on which the Unitholders pay
for their Units to the extent that such interest accrued on such Obligations
before the date the Trust acquired ownership of the Obligations (and the
amount of this reduction may exceed the amount of accrued interest paid to
the sellers) and, consequently, such Unitholders may have an increase in
taxable gain or reduction in capital loss upon the disposition of such
Units. Unitholders should consult their own tax advisors with regard to
calculation of basis.
Gain or loss upon the sale or redemption of Units is measured by comparing
the proceeds of such sale or redemption with the adjusted basis of the Units. If
the Trustee disposes of Obligations (whether by sale, exchange, payment on
maturity, redemption or otherwise) gain or loss is recognized to the Unitholder
(subject to various non-recognition provisions of the Code). The amount of any
such gain or loss is measured by comparing the Unitholders' pro rata share of
the total proceeds from such disposition with his basis for his fractional
interest in the asset disposed of. The basis of each Unit and of each Obligation
which was issued with original issue discount (including the Treasury Bonds) (or
which has market discount) must be increased by the amount of accrued original
issue discount (and market discount if the Unitholder elects to include market
discount in income as it accrues) and the basis of each Unit and of each
Obligation which was purchased by a Trust at a premium must be reduced by the
annual amortization of bond premium which the Unitholder has properly elected to
amortize under Section 171 of the Code. The tax basis reduction requirements of
the Code relating to amortization of bond premium may, under some circumstances,
result in the Unitholder realizing a taxable gain when his Units are sold or
redeemed for an amount equal to or less than his original cost. A Trust may
contain certain "zero coupon" Securities (the "STRIPPED TREASURY SECURITIES")
that are treated as bonds that were originally issued at an original issue
discount provided, pursuant to a Treasury Regulation (the "REGULATION") issued
on December 28, 1992, that the amount of original issue discount determined
under Section 1286 of the Code is not less than a DE MINIMIS amount as
determined thereunder. Because the Stripped Treasury Securities represent
interests in "stripped" U.S. Treasury bonds, a Unitholder's initial cost
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for his pro rata portion of each Stripped Treasury Security held by a Trust
(determined at the time he acquires his Units, in the manner described above)
shall be treated as its "purchase price" by the Unitholder. Original issue
discount is effectively treated as interest for federal income tax purposes, and
the amount of original issue discount in this case is generally the difference
between the bond's purchase price and its stated redemption price at maturity. A
Unitholder will be required to include in gross income for each taxable year the
sum of his daily portions of original issue discount attributable to the
Stripped Treasury Securities held by a Trust as such original issue discount
accrues and will, in general, be subject to federal income tax with respect to
the total amount of such original issue discount that accrues for such year even
though the income is not distributed to the Unitholders during such year to the
extent it is not less than a DE MINIMIS amount as determined under the
Regulation. To the extent that the amount of such discount is less than the
respective DE MINIMIS amount, such discount shall be treated as zero. In
general, original issue discount accrues daily under a constant interest rate
method which takes into account the semi-annual compounding of accrued interest.
In the case of the Stripped Treasury Securities, this method will generally
result in an increasing amount of income to the Unitholders each year.
Unitholders should consult their tax advisors regarding the Federal income tax
consequences and accretion of original issue discount.
LIMITATIONS ON DEDUCTIBILITY OF TRUST EXPENSES BY UNITHOLDERS -- Each
Unitholder's pro rata share of each expense paid by a Trust is deductible by the
Unitholder to the same extent as though the expense had been paid directly by
him. It should be noted that as a result of the Tax Reform Act of 1986, certain
miscellaneous itemized deductions, such as investment expenses, tax return
preparation fees and employee business expenses, will be deductible by an
individual only to the extent they exceed 2% of such individual's adjusted gross
income (similar limitations also apply to estates and trusts). Unitholders may
be required to treat some or all of the expenses paid by each Trust as
miscellaneous itemized deductions subject to this limitation.
PREMIUM -- If a Unitholder's tax basis of his pro rata portion in any
Obligations held by a Trust exceeds the amount payable by the issuer of the
Obligation with respect to such pro rata interest upon the maturity of the
Obligation, such excess would be considered "premium" which may be amortized by
the Unitholder at the Unitholder's election as provided in Section 171 of the
Code. Unitholders should consult their tax advisors regarding whether such
election should be made and the manner of amortizing premium.
ORIGINAL ISSUE DISCOUNT -- Certain of the Obligations in a Trust may have
been acquired with "original issue discount." In the case of any Obligations in
a Trust acquired with "original issue discount" that exceeds a "DE MINIMIS"
amount as specified in the Code or in the case of the Stripped Treasury
Securities as specified in the Regulation, such discount is includable in
taxable income of the Unitholders on an accrual basis computed daily, without
regard to when payments of interest on such Obligations are received. The Code
provides a complex set of rules regarding the accrual of original issue
discount. These rules provide that original issue discount generally accrues on
the basis of a constant compound interest rate over the term of the Obligations.
Unitholders should consult their tax advisors as to the amount of original issue
discount which accrues.
Special original issue discount rules apply if the purchase price of the
Obligation by a Trust exceeds its original issue price plus the amount of
original issue discount which would have previously accrued based upon its issue
price (its "ADJUSTED ISSUE PRICE"). Similarly, these special rules would apply
to a Unitholder if the tax basis of his pro rata portion of an Obligation issued
with original issue discount exceeds his pro rata portion of its adjusted issue
price. Unitholders should also consult their tax advisers regarding these
special rules.
It is possible that a Corporate Bond that has been issued at an original
issue discount may be characterized as a "high-yield discount obligation" within
the meaning of Section 163(e)(5) of the Code. To the extent that such an
obligation is issued at a yield in excess of six percentage points over the
applicable Federal rate, a portion of the original issue discount on such
obligation will be characterized as a distribution on stock (e.g., dividends)
for purposes of the dividends received deduction which is available to certain
corporations with respect to certain dividends received by such corporation.
MARKET DISCOUNT -- If a Unitholder's tax basis in his pro rata portion of
Obligations is less than the allocable portion of such Obligation's stated
redemption price at maturity (or, if issued with original issue discount, the
allocable portion of its "REVISED ISSUE PRICE"), such difference will constitute
market discount unless the amount of market discount is "DE MINIMIS" as
specified in the Code. Market discount accrues daily computed on a straight-line
basis, unless the Unitholder elects to calculate accrued market discount under a
constant-yield method. The market discount rules do not apply to Stripped
Treasury Securities because they are stripped debt instruments subject to
special original issue discount rules discussed above. Unitholders should
consult their own tax advisers regarding whether an election should be made and
as to the amount of market discount which accrues.
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Accrued market discount is generally includable in taxable income to the
Unitholders as ordinary income for Federal tax purposes upon the receipt of
serial principal payments on the Obligations, on the sale, maturity or
disposition of such Obligations by a Trust, and on the sale by a Unitholder of
Units, unless a Unitholder elects to include the accrued market discount in
taxable income as such discount accrues. If a Unitholder does not elect to
annually include accrued market discount in taxable income as it accrues,
deductions for any interest expense incurred by the Unitholder which is incurred
to purchase or carry his Units will be reduced by such accrued market discount.
In general, the portion of any interest expense which was not currently
deductible would ultimately be deductible when the accrued market discount is
included in income. Unitholders should consult their tax advisors regarding
whether an election should be made to include market discount in income as it
accrues and as to the amount of interest expense which may not be currently
deductible.
COMPUTATION OF THE UNITHOLDER'S TAX BASIS -- The tax basis of a Unitholder
with respect to his interest in an Obligation is increased by the amount of
original issue discount (and market discount, if the Unitholder elects to
include market discount, if any, on the Obligations held by a Trust in income as
it accrues) thereon properly included in the Unitholder's gross income as
determined for Federal income tax purposes and reduced by the amount of any
amortized premium which the Unitholder has properly elected to amortize under
Section 171 of the Code. A Unitholder's tax basis in his Units will equal his
tax basis in his pro rata portion of all of the assets of a Trust.
RECOGNITION OF TAXABLE GAIN OR LOSS UPON DISPOSITION OF OBLIGATIONS BY A
TRUST OR DISPOSITION OF UNIT -- A Unitholder will recognize taxable capital gain
(or loss) when all or part of his pro rata interest in an Obligation is disposed
of in a taxable transaction for an amount greater (or less) than his tax basis
therefor (subject to various non-recognition provisions of the Code). As
previously discussed, gain realized on the disposition of the interest of a
Unitholder in any Obligation deemed to have been acquired with market discount
will be treated as ordinary income to the extent the gain does not exceed the
amount of accrued market discount not previously taken into income. Any capital
gain or loss arising from the disposition of an Obligation by a Trust or the
disposition of Units by a Unitholder will be determined by the period of time
the Unitholder held his Unit and the period of time the Trust held the
Obligation. 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 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 for
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.
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. Unitholders and
prospective investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units.
The Taxpayer Relief Act of 1997 (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. Unitholders should consult their own
tax advisors with regard to any such constructive sales rules.
If the Unitholder disposes of a Unit, he is deemed thereby to have disposed
of his entire pro rata interest in all Trust assets, including his pro rata
portion of all of the Obligations represented by the Unit. This may result in a
portion of the gain, if any, on such sale being taxable as ordinary income under
the market discount rules (assuming no election was made by the Unitholder to
include market discount in income as it accrues) as previously discussed. The
tax basis reduction requirements of the Code relating to amortization of
Obligation premium may, under some circumstances, result in the Unitholder's
realizing taxable gain when his Units are sold or redeemed for an amount equal
to or less than his original cost.
FOREIGN INVESTORS -- A Unitholder who is a foreign investor (I.E., an
investor other than a U.S. citizen or resident or a U.S. corporation,
partnership, estate or trust) will not be subject to United States federal
income taxes, including withholding taxes, on interest income (including any
original issue discount) on, or any gain from the sale or other disposition of,
his pro rata interest in any Obligation or the sale of his Units PROVIDED that
all of the following conditions are met (i) the interest income or gain is not
effectively connected with the conduct by the foreign investor of a trade or
business within the United States, (ii) if the interest is United States source
income (which is the case for most securities issued by United States issuers),
the Obligation is issued after July 18, 1984, and the foreign investor does not
own, directly or indirectly, 10% or more of the total combined voting power of
all classes of voting stock of the issuer of the Obligation and the foreign
investor is not a controlled foreign corporation related (within the meaning of
Section 864(d)(4) of the Code) to the issuer of the
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Obligation, or (iii) with respect to any gain, the foreign investor (if an
individual) is not present in the United States for 183 days or more during his
taxable year, and (iv) the foreign investor provides all certification which may
be required of his or her status (foreign investors may contact the Sponsor to
obtain a Form W-8-BEN which must be filed with the Trustee and refiled every
three calendar years thereafter). Foreign investors should consult their tax
advisers with respect to United States tax consequences of ownership of Units.
The Revenue Reconciliation Act of 1993 includes a provision which eliminates
the exemption from United States taxation, including withholding taxes, for
certain "contingent interest." The provision applies to interest received after
December 31, 1993. No opinion is expressed herein regarding the potential
applicability of this provision and whether United States taxation or
withholding taxes could be imposed with respect to income derived from the Units
as a result thereof. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
GENERAL -- Each Unitholder (other than a foreign investor who has properly
provided the certifications described above) will be requested to provide the
Unitholder's taxpayer identification number to the Trustee and to certify that
the Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by a
Trust to such Unitholder including amounts received upon the redemption of the
Units will be subject to back-up withholding.
The foregoing discussion relates only to United States federal income taxes
and applies only to the Trusts which are described in this Prospectus;
Unitholders may be subject to foreign, state and local taxation in other
jurisdictions (including a foreign investor's country of residence). Unitholders
should consult their tax advisers regarding potential state, local, or foreign
taxation with respect to the Units.
In the opinion of Carter, Ledyard & Milburn, special counsel to the Trusts
for New York tax matters each Trust is not an association taxable as a
corporation and the income of each Trust will be treated as the income of the
Unitholders under the existing income tax laws of the State and City of New
York.
The Sponsor believes that investors who are individuals will not be subject
to any state or local personal income taxes on the interest received by the U.S.
Treasury Trusts and distributed to them. However, investors (including
individuals) may be subject to state and local taxes on any capital gains (or
market discount treated as ordinary income) derived from the U.S. Treasury
Trusts and to other state and local taxes (including corporate income or
franchise taxes, personal property or intangibles taxes, and estate or
inheritance taxes) on their Units or the income derived therefrom. In addition,
individual investors (and any other investors which are not subject to state and
local taxes on the interest income derived from the U.S. Treasury Trusts) will
probably not be entitled to a deduction for state and local tax purposes for
their share of the fees and expenses paid by the U.S. Treasury Trusts, for any
amortized bond premium or for any interest on indebtedness incurred to purchase
or carry their Units. Therefore, even though the Sponsor believes that interest
income from the U.S. Treasury Trusts is exempt from state and local personal
income taxes in all states, investors should consult their own tax advisers with
respect to state and local taxation.
TRUST OPERATING EXPENSES
No annual advisory fee is charged to the Trusts by the Sponsor. The Sponsor
and/or its affiliates do, however, receive those fees as set forth in "FEES AND
EXPENSES" in Part A of this Prospectus for regularly evaluating the Bonds and
for maintaining surveillance over the portfolio (the "Sponsor's Evaluation
Fee").
The Trustee receives for ordinary recurring services an annual fee for each
plan of distribution for each Trust as set forth in "FEES AND EXPENSES"
appearing in Part A of this Prospectus. Each annual fee is per $1,000 principal
amount of the underlying Securities in a Trust for that portion of the Trust
that represents a particular plan of distribution, provided, however, that for
services performed prior to the record date for the second distribution from the
Interest Account indicated under "INTEREST DISTRIBUTIONS" in Part A of the
Prospectus, the Trustee's compensation shall be computed in respect of all Units
outstanding at the rate specified for the monthly plan of distribution. The
Trustee's fee and the Sponsor's Evaluation Fee are computed on the basis of the
largest principal amount of Bonds in the Trust at any time during the period
with respect to which such compensation is being computed. The Trustee's fee may
be periodically adjusted in response to fluctuations in short-term interest
rates (reflecting the cost to the Trustee of advancing funds to a Trust to meet
scheduled distributions). In addition, the Trustee's fee and the Sponsor's
Evaluation Fee may be periodically adjusted in accordance with the cumulative
percentage increase of the United States Department of Labor's Consumer Price
Index entitled "All Services Less Rent of Shelter" since the establishment of
the Trusts. In addition, with respect to any fees payable to the sponsor or an
affiliate of the Sponsor for providing bookkeeping and other administrative
services, supervisory services and evaluation services, such individual fees may
exceed the actual costs of providing such services for a Trust, but
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at no time will the total amount received for such services, in the aggregate,
rendered to all unit investment trusts of which John Nuveen & Co. Incorporated
is the Sponsor in any calendar year exceed the actual cost to the Sponsor or its
affiliates of supplying such services, in the aggregate, in such year. The
Trustee has the use of funds, if any, being held in the Interest and Principal
Accounts of each Trust for future distributions, payment of expenses and
redemptions. These Accounts are non-interest bearing to Unitholders. Pursuant to
normal banking procedures, the Trustee benefits from the use of funds held
therein. Part of the Trustee's compensation for its services to the Trusts is
expected to result from such use of these funds.
Premiums for the policies of insurance obtained by the Sponsor or by the
Corporate Bond issuers with respect to the Corporate Bonds in the Insured
Corporate Trusts have been paid in full prior to the deposit of the Corporate
Bonds in the Corporate Trusts, and the value of such insurance has been included
in the evaluation of the Corporate Bonds in each Corporate Trust and accordingly
in the Public Offering Price of Units of each Corporate Trust. There are no
annual continuing premiums for such insurance.
The following are additional expenses of the Trusts and, when paid by or are
owed to the Trustee, are secured by a lien on the assets of the Trust or Trusts
to which such expenses are allocable: (1) the expenses and costs of any action
undertaken by the Trustee to protect the Trusts and the rights and interests of
the Unitholders; (2) all taxes and other governmental charges upon the
Securities or any part of the Trusts (no such taxes or charges are being levied
or made or, to the knowledge of the Sponsor, contemplated); (3) amounts payable
to the Trustee as fees for ordinary recurring services and for extraordinary
non-recurring services rendered pursuant to the Indenture, all disbursements and
expenses, including counsel fees (including fees of counsel which the Trustee
may retain) sustained or incurred by the Trustee in connection therewith; and
(4) any losses or liabilities accruing to the Trustee without negligence, bad
faith or willful misconduct on its part. The expenses are paid monthly and the
Trustee is empowered to sell Securities in order to pay these amounts if funds
are not otherwise available in the applicable Interest and Principal Accounts.
Unless the Sponsor determines that an audit is not required, the Indenture
requires each Trust to be audited on an annual basis at the expense of the Trust
by independent public accountants selected by the Sponsor. The Trustee shall not
be required, however, to cause such an audit to be performed if its cost to a
Trust shall exceed $.05 per Unit on an annual basis. Unitholders of a Trust
covered by an audit may obtain a copy of the audited financial statements upon
request.
DISTRIBUTIONS TO UNITHOLDERS
Interest received by the Trustee on the Securities in each Trust, including
that part of the proceeds of any disposition of Securities which represents
accrued interest and including any insurance proceeds representing interest due
on defaulted Corporate Bonds, shall be credited to the "Interest Account" of
such Trust and all other moneys received by the Trustee shall be credited to the
"Principal Account" of such Trust.
The pro rata share of cash in the Principal Account in each Trust will be
computed as of each semi-annual Record Date and distributions to the Unitholders
as of such Record Date will be made on or shortly after the fifteenth day of the
month. With the exception of proceeds received from maturing U.S. Treasury
Obligations by the U.S. Treasury Trusts, proceeds received from the disposition,
including sale, call or maturity, of any of the Securities and all amounts paid
with respect to zero coupon bonds and Stripped Obligations will be held in the
Principal Account and either used to pay for Units redeemed or distributed on
the Distribution Date following the next semi-annual Record Date. Proceeds
received by a U.S. Treasury Trust as a result of the maturity of an underlying
U.S. Treasury Obligation will be distributed within five business days after
such U.S. Treasury Obligation matures to Unitholders of record on such maturity
date. The Trustee is not required to make a distribution from the Principal
Account of any Trust unless the amount available for distribution in such
account equals at least ten cents per Unit.
The pro rata share of the Interest Account in each Trust will be computed by
the Trustee as of each Record Date and distributions will be made on or shortly
after the fifteenth day of the month to Unitholders of such Trust as of the
Record Date who are entitled to distributions at that time under the plan of
distribution chosen. Persons who purchase Units between a Record Date and a
Distribution Date will receive their first distribution on the Distribution Date
following the next Record Date under the applicable plan of distribution.
Purchasers of Units who desire to receive interest distributions on a
monthly or quarterly basis may elect to do so at the time of purchase during the
initial public offering period. Those indicating no choice will be deemed to
have chosen the semi-annual distribution plan. All Unitholders, however, who
purchase Units during the initial public offering period and who hold them of
record on the first Record Date after the Initial Date of Deposit will receive
the first distribution of interest. Thereafter, Record Dates for monthly
distributions will be the first day of each month; Record Dates for quarterly
distributions will be the first day of February, May, August and November; and
Record dates for semi-annual distributions will be the first day of May and
November. See Part A of this Prospectus for details of distributions per Unit of
each Trust
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based upon estimated Net Annual Interest Income at the Initial Date of Deposit.
The amount of the regular distributions will generally change when Securities
are redeemed, mature or are sold or when fees and expenses increase or decrease.
For the purpose of minimizing fluctuations in the distributions from the
Interest Account of a Trust, the Trustee is authorized to advance such amounts
as may be necessary to provide for interest distributions of approximately equal
amounts. The Trustee shall be reimbursed, without interest, for any such
advances from funds in the Interest Account of such Trust. The Trustee's fee
takes into account the costs attributable to the outlay of capital needed to
make such advances.
The plan of distribution selected by a Unitholder will remain in effect
until changed. Unitholders purchasing Units in the secondary market will
initially receive distributions in accordance with the election of the prior
owner. Unitholders desiring to change their plan of distribution may do so by
sending a written notice requesting the change, together with any
Certificate(s), to the Trustee. The notice and any Certificate(s) must be
received by the Trustee not later than the semi-annual Record Date to be
effective as of the semi-annual distribution following the subsequent
semi-annual Record Date. Unitholders are requested to make any such changes
within 45 days prior to the applicable Record Date. Certificates should only be
sent by registered or certified mail to minimize the possibility of their being
lost or stolen. See "OWNERSHIP AND TRANSFER OF UNITS."
As of the first day of each month the Trustee will deduct from the Interest
Account of a Trust or, to the extent funds are not sufficient therein, from the
Principal Account of a Trust, amounts needed for payment of expenses of such
Trust. The Trustee also may withdraw from said accounts such amount, if any, as
it deems necessary to establish a reserve for any governmental charges payable
out of such Trust. Amounts so withdrawn shall not be considered a part of a
Trust's assets until such time as the Trustee shall return all or any part of
such amounts to the appropriate accounts. The Trustee shall withdraw from the
Interest Account and the Principal Account of a Trust such amounts as may be
necessary to cover redemptions of Units of such Trust by the Trustee. Funds
which are available for future distributions, redemptions and payment of
expenses are held in accounts which are non-interest bearing to Unitholders and
are available for use by the Trustee pursuant to normal banking procedures.
Unitholders of a Trust which contains Stripped Treasury Securities should
note that Stripped Treasury Securities are sold at a deep discount because the
buyer of those securities obtains only the right to receive a future fixed
payment on the security and not any rights to periodic interest payments
thereon. Purchasers of these Securities acquire, in effect, discount obligations
that are economically identical to the "zero-coupon bonds" that have been issued
by corporations. Zero coupon bonds are debt obligations which do not make any
periodic payments of interest prior to maturity and accordingly are issued at a
deep discount. Under generally accepted accounting principles, a holder of a
security purchased at a discount normally must report as an item of income for
financial accounting purposes the portion of the discount attributable to the
applicable reporting period. The calculation of this attributable income would
be made on the "interest" method which generally will result in a lesser amount
of includable income in earlier periods and a corresponding larger amount in
later periods. For federal income tax purposes, the inclusion will be on a basis
that reflects the effective compounding of accrued but unpaid interest
effectively represented by the discount. Although this treatment is similar to
the "interest" method described above, the "interest" method may differ to the
extent that generally accepted accounting principles permit or require the
inclusion of interest on the basis of a compounding period other than the
semi-annual period. See "TAX STATUS."
ACCUMULATION PLAN
The Sponsor is also the principal underwriter of several open-end mutual
funds (the "ACCUMULATION FUNDS") into which Unitholders may choose to reinvest
Trust distributions. Unitholders may elect to reinvest principal distributions
or interest and principal distributions automatically, without any sales charge.
Each Accumulation Fund has investment objectives which differ in certain
respects from those of the Trusts and may invest in securities which would not
be eligible for deposit in the Trusts. Further information concerning the
Accumulation Plan and a list of Accumulation Funds is set forth in the
Information Supplement of this Prospectus, which may be obtained by contacting
the Trustee at (800) 257-8787.
Participants may at any time, by so notifying the Trustee in writing, elect
to change the Accumulation Fund into which their distributions are being
reinvested, to change from principal only reinvestment to reinvestment of both
principal and interest or vice versa, or to terminate their participation in the
Accumulation Plan altogether and receive future distributions on their Units in
cash. Such notice will be effective as of the next Record Date occurring at
least 10 days after the Trustee's receipt of the notice. There will be no charge
or other penalty for such change of election or termination. The character of
Trust distributions for income tax purposes will remain unchanged even if they
are reinvested in an Accumulation Fund.
17
<PAGE>
REPORTS TO UNITHOLDERS
The Trustee shall furnish Unitholders of a Trust in connection with each
distribution, a statement of the amount of interest, if any, and the amount of
other receipts (received since the preceding distribution) being distributed,
expressed in each case as a dollar amount representing the pro rata share of
each Unit of a Trust outstanding. Within a reasonable period of time after the
end of each calendar year, the Trustee shall furnish to each person, who at any
time during the calendar year was a registered Unitholder of a Trust, a
statement with respect to such Trust (i) as to the Interest Account: interest
received (including amounts representing interest received upon any disposition
of Securities), deductions for fees and expenses of such Trust, redemption of
Units and the balance remaining after such distributions and deductions,
expressed in each case both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the last business
day of such calendar year; (ii) as to the Principal Account: the dates of
disposition of any Securities and the net proceeds received therefrom (excluding
any portion representing accrued interest), the amount paid for purchase of
Replacement Securities, the amount paid upon redemption of Units, deductions for
payment of applicable taxes and fees and expenses of the Trustee, and the
balance remaining after such distributions and deductions expressed both as a
total dollar amount and as a dollar amount representing the pro rata share of
each Unit outstanding on the last business day of such calendar year; (iii) a
list of the Securities held and the number of Units outstanding on the last
business day of such calendar year; (iv) the Unit Value based upon the last
computation thereof made during such calendar year; and (v) amounts actually
distributed during such calendar year from the Interest Account and from the
Principal Account, separately stated, expressed both as total dollar amounts and
as dollar amounts representing the pro rata share of each Unit outstanding.
UNIT VALUE AND EVALUATION
The value of each Trust is determined by the Sponsor on the basis of (1) the
cash on hand in the Trust (other than cash declared held in trust to cover
contracts to purchase securities) or moneys in the process of being collected,
(2) the value of the Securities in the Trust based on the BID prices of the
Securities; and (3) interest accrued thereon not subject to collection and
distribution, LESS (1) amounts representing taxes or governmental charges
payable out of the Trust, (2) the accrued expenses of the Trust; (3) if so
provided in Part A of the Prospectus, amounts representing unpaid organization
costs; and (4) cash held for distribution to Unitholders of record, and required
for redemption of Units tendered, as of a date prior to the date of evaluation.
The result of such computation is divided by the number of Units of the Trust
outstanding as of the date thereof to determine the per Unit value ("UNIT
VALUE") of such Trust. The Sponsor may determine the value of the Securities in
each Trust (1) on the basis of current BID prices of the Securities obtained
from dealers or brokers who customarily deal in securities comparable to those
held by the Trust, (2) if bid prices are not available for any of the
Securities, on the basis of bid prices for comparable securities, (3) by causing
the value of the Securities to be determined by others engaged in the practice
of evaluating, quoting or appraising comparable securities or (4) by any
combination of the above. Although the Unit Value of each Trust is based on the
BID prices of the Securities, the Units are sold initially to the public at the
Public Offering Price based on the OFFERING prices of the Securities.
Because the insurance obtained by the Sponsor or by the issuers of Corporate
Bonds with respect to the Corporate Bonds in the Insured Corporate Trusts is
effective so long as such Corporate Bonds are outstanding, such insurance will
be taken into account in determining the bid and offering prices of such
Corporate Bonds and therefore some value attributable to such insurance will be
included in the value of Units of Corporate Trusts that include such Corporate
Bonds.
DISTRIBUTIONS OF UNITS TO THE PUBLIC
Nuveen, in addition to being the Sponsor, is the sole Underwriter of the
Units. It is the intention of the Sponsor to qualify Units of the Trusts for
sale under the laws of substantially all of the states of the United States of
America.
Promptly following the deposit of Securities in exchange for Units of the
Trusts, it is the practice of the Sponsor to place all of the Units as
collateral for a letter or letters of credit from one or more commercial banks
under an agreement to release such Units from time to time as needed for
distribution. Under such an arrangement the Sponsor pays such banks compensation
based on the then current interest rate. This is a normal warehousing
arrangement during the period of distribution of the Units to public investors.
To facilitate the handling of transactions, sales of Units shall be limited to
transactions involving a minimum of either $5,000 or 50 Units ($500 or nearest
whole number of Units whose value is less than $500 for IRA purchases),
whichever is less. The Sponsor reserves the right to reject, in whole or in
part, any order for the purchase of Units.
The Sponsor plans to allow a discount to brokers and dealers in connection
with the primary distribution of Units. The amounts of such discounts are set
forth in Part A of this Prospectus.
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<PAGE>
The Sponsor currently intends to maintain a secondary market for Units of
certain Trusts. See "MARKET FOR UNITS." The amount of the dealer concession on
secondary market purchases of Trust Units through the Sponsor will be computed
based upon the value of the Bonds in the Trust portfolio, including the sales
charge computed as described in "PUBLIC OFFERING PRICE", and adjusted to reflect
the cash position of the Trust principal account, and will vary with the size of
the purchase as shown in the following table:
Corporate Trust Dealer Concessions
<TABLE>
<CAPTION>
AMOUNT OF PURCHASE*
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$50,000 $100,000 $250,000 $500,000 $1,000,000 $2,500,000
UNDER TO TO TO TO TO TO $5,000,000
YEARS TO MATURITY $50,000 $99,999 $249,999 $499,999 $999,999 $2,499,999 $4,999,999 OR MORE
- -------------------------- --------- --------- --------- --------- --------- ---------- ---------- ----------
Less than 1............... 0 0 0 0 0 0 0 0
1 but less than 2......... 1.00% .90% .85% .80% .70% .55% .467% .389%
2 but less than 3......... 1.30 1.20 1.10 1.00 .90 .73 .634 .538
3 but less than 4......... 1.60 1.45 1.35 1.25 1.10 .90 .781 .662
4 but less than 5......... 2.00 1.85 1.75 1.55 1.40 1.25 1.082 .914
5 but less than 7......... 2.30 2.15 1.95 1.80 1.65 1.50 1.320 1.140
7 but less than 10........ 2.60 2.45 2.25 2.10 1.95 1.70 1.496 1.292
10 but less than 13....... 3.00 2.80 2.60 2.45 2.30 2.00 1.747 1.494
13 but less than 16....... 3.25 3.15 3.00 2.75 2.50 2.15 1.878 1.606
16 or more................ 3.50 3.50 3.40 3.35 3.00 2.50 2.185 1.873
</TABLE>
*Breakpoint sales charges and related dealer concessions are computed both on a
dollar basis and on the basis of the number of Units purchased, using the
equivalent of 500 Units to $50,000, 2,500 Units to $250,000, etc., and will be
applied on that basis which is more favorable to the purchaser.
U.S. Treasury Trust Dealer Concessions
<TABLE>
<CAPTION>
AMOUNT OF PURCHASE*
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$50,000 $100,000 $250,000 $500,000 $1,000,000 $2,500,000
UNDER TO TO TO TO TO TO $5,000,000
YEARS TO MATURITY $50,000 $99,999 $249,999 $499,999 $999,999 $2,499,999 $4,999,999 OR MORE
- -------------------------- --------- --------- --------- --------- --------- ---------- ---------- ----------
Less than 1............... 0 0 0 0 0 0 0 0
1 but less than 2......... 0.715% 0.650% 0.585% 0.585% 0.520% 0.455% 0.390% 0.325%
2 but less than 3......... 0.910 0.845 0.845 0.780 0.715 0.650 0.520 0.455
3 but less than 4......... 1.040 0.975 0.975 0.910 0.845 0.715 0.650 0.520
4 but less than 5......... 1.170 1.105 1.105 0.975 0.910 0.845 0.715 0.585
5 but less than 7......... 1.235 1.170 1.105 1.105 0.975 0.845 0.780 0.650
7 but less than 10........ 1.430 1.365 1.300 1.235 1.105 0.975 0.845 0.780
10 but less than 13....... 1.755 1.690 1.560 1.495 1.430 1.235 1.105 0.910
13 but less than 16....... 2.145 2.015 1.885 1.820 1.690 1.495 1.300 1.105
16 or More................ 2.340 2.210 2.145 2.015 1.885 1.625 1.430 1.235
</TABLE>
*Breakpoint sales charges are computed both on a dollar basis and on the basis
of the number of Units purchased, using the equivalent of 5,000 Units to
$500,000 and 10,000 Units to $1 million, etc., and will be applied on that
basis which is more favorable to the purchaser.
The Sponsor reserves the right to change the amounts of the dealer
concessions from time to time.
Volume incentives can be earned as a marketing allowance by eligible dealer
firms who reach cumulative firm sales or sales arrangement levels of a specified
dollar amount of Nuveen unit trusts (other than any series of the Nuveen--The
Dow 5(sm) Portfolios and Nuveen--The Dow 10(sm) Portfolios) sold in the primary
or secondary market during any quarter as set forth in the table below. Eligible
dealer firms are dealers that are providing marketing support for Nuveen unit
trusts in the form of 1) distributing or permitting the distribution of
marketing materials and other product information, 2) providing Nuveen
representatives access to the dealer's branch offices, and 3) generally
facilitating the placement of orders by the dealer's registered representatives
such as putting Nuveen unit trusts on their order entry screens. Eligible firms
will not include firms that solely provide clearing services to broker/dealer
firms. For purposes of determining the applicable volume incentive rate for a
given quarter, the dollar amount of all units sold over the current and three
previous quarters (the "Measuring Period") is aggregated. The volume incentive
received by the dealer firm will equal the dollar amount of units sold during
the current quarter times the highest applicable rate for the Measuring Period.
For firms that meet the necessary volume level, volume incentives may be given
on all applicable trades originated from or by that firm.
<TABLE>
<CAPTION>
TOTAL DOLLAR AMOUNT SOLD
OVER MEASURING PERIOD VOLUME INCENTIVE
- ---------------------------------- -----------------------------------------
<S> <C>
$ 5,000,000 to $ 9,999,999 0.10% of current quarter sales
$10,000,000 to $19,999,999 0.125% of current quarter sales
$20,000,000 to $49,999,999 0.1375% of current quarter sales
$50,000,000 or more 0.15% of current quarter sales
</TABLE>
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<PAGE>
Only sales through the Sponsor qualify for volume incentives and for meeting
minimum requirements. The Sponsor reserves the right to modify or change the
volume incentive schedule at any time and make the determination as to which
firms qualify for the marketing allowance and the amount paid.
Firms are not entitled to receive any dealer concession or volume incentives
for any sales made to investors which qualified as Discounted Purchases (as
defined in "PUBLIC OFFERING PRICE") during the primary or secondary market. (See
"PUBLIC OFFERING PRICE".)
Certain commercial banks are making Units of the Trusts available to their
customers on an agency basis. A portion of the sales charge paid by these
customers is retained by or remitted to the banks in the amounts shown in the
above table. The Glass-Steagall Act prohibits banks from underwriting Trust
Units; the Act does, however, permit certain agency transactions and banking
regulators have not indicated that these particular agency transactions are not
permitted under the Act. In Texas and in certain other states, any bank making
Units available must be registered as a broker-dealer under state law.
OWNERSHIP AND TRANSFER OF UNITS
The ownership of Units is evidenced by registered Certificates unless the
Unitholder expressly requests that ownership be evidenced by a book entry
position recorded on the books and records of the Trustee. The Trustee is
authorized to treat as the owner of Units that person who at the time is
registered as such on the books of the Trustee. Any Unitholder who holds a
Certificate may change to book entry ownership by submitting to the Trustee the
Certificate along with a written request that the Units represented by such
Certificate be held in book entry form. Likewise, a Unitholder who holds Units
in book entry form may obtain a Certificate for such Units by written request to
the Trustee. Units may be held in denominations of one Unit or any multiple or
fraction thereof. Fractions of Units are computed to three decimal places. Any
Certificates issued will be numbered serially for identification, and are issued
in fully registered form, transferable only on the books of the Trustee. Book
entry Unitholders will receive a Book Entry Position Confirmation reflecting
their ownership.
For Trusts allowing optional plans of distribution, Certificates for Units
will bear an appropriate notation on their face indicating which plan of
distribution has been selected. When a change is made, the existing Certificates
must be surrendered to the Trustee and new Certificates issued to reflect the
currently effective plan of distribution. There will be no charge for this
service. Holders of book entry Units can change their plan of distribution by
making a written request to the Trustee, which will issue a new Book Entry
Position Confirmation to reflect such change.
Units are transferable by making a written request to the Trustee and, in
the case of Units evidenced by Certificate(s), by presenting and surrendering
such Certificate(s) to the Trustee, The Chase Manhattan Bank, at 4 New York
Plaza, New York, NY 10004-2413, properly endorsed or accompanied by a written
instrument or instruments of transfer. The Certificate(s) should be sent
registered or certified mail for the protection of the Unitholders. Each
Unitholder must sign such written request, and such Certificate(s) or transfer
instrument, exactly as his name appears on (a) the face of the Certificate(s)
representing the Units to be transferred, or (b) the Book Entry Position
Confirmation(s) relating to the Units to be transferred. Such signature(s) must
be guaranteed by a guarantor acceptable to the Trustee. In certain instances the
Trustee may require additional documents such as, but not limited to, trust
instruments, certificates of death, appointments as executor or administrator or
certificates of corporate authority. Mutilated Certificates must be surrendered
to the Trustee in order for a replacement Certificate to be issued. Although at
the date hereof no charge is made and none is contemplated, a Unitholder may be
required to pay $2.00 to the Trustee for each Certificate reissued or transfer
of Units requested and to pay any governmental charge which may be imposed in
connection therewith.
REPLACEMENT OF LOST, STOLEN OR DESTROYED CERTIFICATES
To obtain a new Certificate replacing one that has been lost, stolen, or
destroyed, the Unitholder must furnish the Trustee with sufficient
indemnification and pay such expenses as the Trustee may incur. This
indemnification must be in the form of an Open Penalty Bond of Indemnification.
The premium for such an indemnity bond may vary, but currently amounts to 1% of
the market value of the Units represented by the Certificate. In the case
however, of a Trust as to which notice of termination has been given, the
premium currently amounts to 0.5% of the market value of the Units represented
by such Certificate.
REDEMPTION
Unitholders may redeem all or a portion of their Units by (1) making a
written request for such redemption (book entry Unitholders may use the
redemption form on the reverse side of their Book Entry Position Confirmation)
to the
20
<PAGE>
Trustee at 4 New York Plaza, New York, NY 10004-2413 (redemptions of 1,000 Units
or more will require a signature guarantee), (2) in the case of Units evidenced
by a Certificate, by also tendering such Certificate to the Trustee, duly
endorsed or accompanied by proper instruments of transfer with signatures
guaranteed as explained above, or provide satisfactory indemnity required in
connection with lost, stolen or destroyed Certificates and (3) payment of
applicable governmental charges, if any. Certificates should be sent only by
registered or certified mail to minimize the possibility of their being lost or
stolen. (See "OWNERSHIP AND TRANSFER OF UNITS.") No redemption fee will be
charged. A Unitholder may authorize the Trustee to honor telephone instructions
for the redemption of Units held in book entry form. Units represented by
Certificates may not be redeemed by telephone. The proceeds of Units redeemed by
telephone will be sent by check either to the Unitholder at the address
specified on his account or to a financial institution specified by the
Unitholder for credit to the account of the Unitholder. A Unitholder wishing to
use this method of redemption must complete a Telephone Redemption Authorization
Form and furnish the Form to the Trustee. Telephone Redemption Authorization
Forms can be obtained from a Unitholder's registered representative or by
calling the Trustee. Once the completed Form is on file, the Trustee will honor
telephone redemption requests by any authorized person. The time a telephone
redemption request is received determines the "date of tender" as discussed
below. The redemption proceeds will be mailed within three business days
following the telephone redemption request. Only Units held in the name of
individuals may be redeemed by telephone; accounts registered in broker name, or
accounts of corporations or fiduciaries (including among others, trustees,
guardians, executors and administrators) may not use the telephone redemption
privilege.
On the third business day following the date of tender, the Unitholder will
be entitled to receive in cash for each Unit tendered an amount equal to the
Unit Value of such Trust determined by the Trustee, as of 4:00 p.m. eastern
time, or as of any earlier closing time on a day on which the Exchange is
scheduled in advance to close at such earlier time, on the date of tender as
defined hereafter, plus accrued interest to, but not including, the third
business day after the date of tender ("REDEMPTION PRICE"). If so provided in
Part A of the Prospectus, during the period ending with the earlier of six
months after the Initial Date of Deposit or the end of the initial offering
period, the Redemption Price per Unit includes estimated organization costs per
Unit. After such period, the Redemption Price will not include such estimated
organization costs. See "FEES AND EXPENSES" in Part A of the Prospectus. The
price received upon redemption may be more or less than the amount paid by the
Unitholder depending on the value of the Securities on the date of tender.
Unitholders should check with the Trustee or their broker to determine the
Redemption Price before tendering Units.
The "DATE OF TENDER" is deemed to be the date on which the request for
redemption of Units is received in proper form by the Trustee, except that a
redemption request received after 4:00 p.m. eastern time, or as of any earlier
closing time on a day on which the Exchange is scheduled in advance to close at
such earlier time, or on any day on which the Exchange is normally closed, the
date of tender is the next day on which such Exchange is normally open for
trading and such request will be deemed to have been made on such day and the
redemption will be effected at the Redemption Price computed on that day.
Accrued interest paid on redemption shall be withdrawn from the Interest
Account of the appropriate Trust or, if the balance therein is insufficient,
from the Principal Account of such Trust. All other amounts paid on redemption
shall be withdrawn from the Principal Account. The Trustee is empowered to sell
underlying Securities of a Trust in order to make funds available for
redemption. (See "REMOVAL OF SECURITIES FROM THE TRUSTS.") Units so redeemed
shall be cancelled. To the extent that Securities are sold from the Trusts, the
size and diversity of such Trust will be reduced. Such sales may be required at
a time when Securities would not otherwise be sold and might result in lower
prices than might otherwise be realized.
The Redemption Price is determined on the basis of the BID prices of the
Securities in each Trust, while the initial Public Offering Price of Units will
be determined on the basis of the OFFERING prices of the Securities as of 4:00
p.m. eastern time on any day on which the Exchange is normally open for trading,
or as of any earlier closing time on a day on which the Exchange is scheduled in
advance to close at such earlier time, and such determination is made. As of any
given time, the difference between the bid and offering prices of such
Securities may be expected to average 1/2% to 2% of principal amount. In the
case of actively traded Securities, the difference may be as little as 1/4 to
1/2 of 1%, and in the case of inactively traded Securities such difference
usually will not exceed 3%.
The right of redemption may be suspended and payment postponed (1) for any
period in which the New York Stock Exchange is closed, other than customary
weekend and holiday closings or for any period during which the Securities and
Exchange Commission determines that trading on the New York Stock Exchange is
restricted, (2) for any period during which an emergency exists, as a result of
which disposal or evaluation of the Securities is not reasonably practicable, or
(3) for such other periods as the Securities and Exchange Commission may by
order permit.
21
<PAGE>
Under regulations issued by the Internal Revenue Service, the Trustee will
be required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing his or her tax return. Under normal
circumstances the Trustee obtains the Unitholder's tax identification number
from the selling broker at the time the Certificate or Book Entry Return
Confirmation is issued, and this number is printed on the Certificate or Book
Entry Return Confirmation and on distribution statements. If a Unitholder's tax
identification number does not appear as described above, or if it is incorrect,
the Unitholder should contact the Trustee before redeeming Units to determine
what action, if any, is required to avoid this "back-up withholding."
PURCHASE OF UNITS BY THE SPONSOR
The Trustee will notify the Sponsor of any tender of Units for redemption.
If the Sponsor's bid in the secondary market at that time equals or exceeds the
Redemption Price it may purchase such Units by notifying the Trustee before the
close of business on the second succeeding business day and by making payment
therefor to the Unitholder not later than the day on which payment would
otherwise have been made by the Trustee. (See "REDEMPTION.") The Sponsor's
current practice is to bid at the Redemption Price in the secondary market.
Units held by the Sponsor may be tendered to the Trustee for redemption as any
other Units.
REMOVAL OF SECURITIES FROM THE TRUSTS
Securities will be removed from a Trust as they mature or are redeemed by
the issuers thereof. The Indenture also empowers the Trustee to sell Securities
for the purpose of redeeming Units tendered by any Unitholder, and for the
payment of expenses for which income may not be available. Under the Indenture,
the Sponsor is obligated to provide the Trustee with a current list of
Securities in each Trust to be sold in such circumstances. In deciding which
Securities should be sold the Sponsor intends to consider, among other things,
such factors as: (1) market conditions; (2) market prices of the Securities; (3)
the effect on income distributions to Unitholders of the sale of various
Securities; (4) the effect on principal amount of underlying Securities per Unit
of the sale of various Securities; (5) the financial condition of the issuers;
and (6) the effect of the sale of various Securities on the investment character
of the Trust. Such sales, if required, could result in the sale of Securities by
the Trustee at prices less than original cost to the Trust. To the extent
Securities are sold, the size and diversity of such Trust will be reduced.
In addition, the Sponsor is empowered to direct the Trustee to liquidate
Securities upon the happening of certain other events, such as default in the
payment of principal and/or interest, an action of the issuer that will
adversely affect its ability to continue payment of the principal of and
interest on its Securities, or an adverse change in market, revenue or credit
factors affecting the investment character of the Securities. If a default in
the payment of the principal of and/or interest on any of the Securities occurs,
and if the Sponsor fails to instruct the Trustee whether to sell or continue to
hold such Securities within 30 days after notification by the Trustee to the
Sponsor of such default, the Indenture provides that the Trustee shall liquidate
said Securities forthwith and shall not be liable for any loss so incurred. The
Sponsor may also direct the Trustee to liquidate Securities in a Trust if the
Securities in the Trust are the subject of an advanced refunding generally
considered to be when refunding bonds are issued and the proceeds thereof are
deposited in irrevocable trust to retire the refunded Securities on their
redemption date.
Except as stated in "NUVEEN DEFINED PORTFOLIOS" or "COMPOSITION OF TRUSTS"
regarding the deposit of additional securities or the limited right of
substitution of Replacement Securities for Failed Securities, except for
refunding Securities that may be exchanged for Securities under certain
conditions specified in the Indenture, and except as otherwise provided in the
Prospectus or the Indenture, the Indenture does not permit either the Sponsor or
the Trustee to acquire or deposit securities either in addition to, or in
substitution for, any of the Securities initially deposited in a Trust.
INFORMATION ABOUT THE TRUSTEE
The Trustee is The Chase Manhattan Bank. Its address is 4 New York Plaza,
New York, NY 10004-2413. The Trustee is subject to supervision and examination
by the Federal Deposit Insurance Corporation, the Board of Governors of the
Federal Reserve System and either the Comptroller of the Currency or state
banking authorities.
LIMITATIONS ON LIABILITIES OF SPONSOR AND TRUSTEE
The Sponsor and the Trustee shall be under no liability to Unitholders for
taking any action or for refraining from any action in good faith pursuant to
the Indenture, or for errors in judgment, but shall be liable only for their own
negligence, lack of good faith or willful misconduct. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale
22
<PAGE>
by the Trustee of any of the Securities. In the event of the failure of the
Sponsor to act under the Indenture, the Trustee may act thereunder and shall not
be liable for any action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Indenture or upon or in respect of any Trust which
the Trustee may be required to pay under any present or future law of the United
States of America or of any other taxing authority having jurisdiction. In
addition, the Indenture contains other customary provisions limiting the
liability of the Trustee.
SUCCESSOR TRUSTEES AND SPONSORS
The Trustee or any successor trustee may resign by executing an instrument
of resignation in writing and filing same with the Sponsor and mailing a copy of
a notice of resignation to all Unitholders then of record. Upon receiving such
notice, the Sponsor is required to promptly appoint a successor trustee. If the
Trustee becomes incapable of acting or is adjudged a bankrupt or insolvent, or a
receiver or other public officer shall take charge of its property or affairs,
the Sponsor may remove the Trustee and appoint a successor by written
instrument. The resignation or removal of a trustee and the appointment of a
successor trustee shall become effective only when the successor trustee accepts
its appointment as such. Any successor trustee shall be a corporation authorized
to exercise corporate trust powers, having capital, surplus and undivided
profits of not less than $5,000,000. Any corporation into which a trustee may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which a trustee shall be a party, shall be the
successor trustee.
If upon resignation of a trustee no successor has been appointed and has
accepted the appointment within 30 days after notification, the retiring trustee
may apply to a court of competent jurisdiction for the appointment of a
successor.
If the Sponsor fails to undertake any of its duties under the Indenture, and
no express provision is made for action by the Trustee in such event, the
Trustee may, in addition to its other powers under the Indenture (1) appoint a
successor sponsor or (2) terminate the Indenture and liquidate the Trusts.
INFORMATION ABOUT THE SPONSOR
Since our founding in 1898, Nuveen has been synonymous with investments that
withstand the test of time. Today, we offer a broad range of investments
designed for mature investors whose portfolio is the principal source of their
ongoing financial security. More than 1.3 million investors have entrusted
Nuveen to help them maintain the lifestyle they currently enjoy.
A value investing approach--purchasing securities of strong companies and
communities that represent good long-term value--is the cornerstone of Nuveen's
investment philosophy. It is a careful, long-term strategy that offers the
potential for attractive returns with moderated risk. Successful value investing
begins with in-depth research and a discerning eye for marketplace opportunity.
Nuveen's team of investment professionals is backed by the discipline, resources
and expertise of a century of investment experience, including one of the most
recognized research departments in the industry.
To meet the unique circumstances and financial planning needs of mature
investors, Nuveen offers a wide array of taxable and tax-free investment
products--including equity and fixed-income mutual funds, unit trusts,
exchange-traded funds, customized asset management services and cash management
products. Nuveen is a subsidiary of The John Nuveen Company which, in turn, is
approximately 78% owned by the St. Paul Companies, Inc. ("ST. PAUL"). St. Paul
is located in St. Paul, Minnesota, and is principally engaged in providing
property-liability insurance through subsidiaries. Nuveen is a member of the
National Association of Securities Dealers, Inc. and the Securities Industry
Association and has its principal office located in Chicago (333 West Wacker
Drive). Nuveen maintains 8 regional offices.
To help advisers and investors better understand and more efficiently use an
investment in the Trusts to reach their investment goals, the Sponsor may
advertise and create specific investment programs and systems. For example, such
activities may include presenting information on how to use an investment in the
Trusts, alone or in combination with an investment in other mutual funds or unit
investment trusts sponsored by Nuveen, to accumulate assets for future education
needs or periodic payments such as insurance premiums. The Sponsor may produce
software or additional sales literature to promote the advantages of using the
Trusts to meet these and other specific investor needs.
A comparison of estimated current returns with the returns on various other
taxable investments is one element to consider in making an investment decision.
The Sponsor may from time to time in its advertising and sales materials compare
the then current estimated returns on a Trust and returns over specified periods
on other similar Nuveen Trusts with returns on taxable investments such as
corporate or U.S. Government securities, bank CD's and money market
23
<PAGE>
accounts or money market funds, each of which has investment characteristics
that may differ from those of the Trust. In addition, the Sponsor may compare
the performance of various indices with the performance of U.S. Government
securities and bank CDs. U.S. Government securities, for example, are backed by
the full faith and credit of the U.S. Government and bank CDs and money market
accounts are insured by an agency of the federal government. Money market
accounts and money market funds provide stability of principal, but pay interest
at rates that vary with the condition of the short-term debt market. The
investment characteristics of the Trusts are described more fully elsewhere in
the Prospectus.
OTHER INFORMATION
AMENDMENT OF INDENTURE
The Indenture may be amended by the Trustee and the Sponsor without the
consent of any of the Unitholders (1) to cure any ambiguity or to correct or
supplement any provision thereof which may be defective or inconsistent, or (2)
to make such other provisions as shall not adversely affect the Unitholders,
provided, however, that the Indenture may not be amended to permit the deposit
or acquisition of securities either in addition to, or in substitution for any
of the Securities initially deposited in any Trust except as stated in "NUVEEN
DEFINED PORTFOLIOS" or "COMPOSITION OF TRUSTS" regarding the creation of
additional Units and the limited right of substitution of Replacement Securities
and except for the substitution of refunding securities under certain
circumstances or except as otherwise provided in this Prospectus. The Trustee
shall advise the Unitholders of any amendment promptly after execution thereof.
TERMINATION OF INDENTURE
Each Trust may be liquidated at any time by written consent of 100% of the
Unitholders or by the Trustee when the value of such Trust, as shown by any
evaluation, is less than 20% of the aggregate principal amount of Securities
deposited in a Trust during the initial offering period of such Trust and will
be liquidated by the Trustee in the event that Units not yet sold aggregating
more than 60% of the Units originally created are tendered for redemption by the
Sponsor thereby reducing the net worth of such Trust to less than 40% of the
principal amount of the Securities originally deposited in the portfolio. (See
"STATEMENT OF CONDITION" appearing in Part A of this Prospectus.) The sale of
Securities from the Trusts upon termination may result in realization of a
lesser amount than might otherwise be realized if such sale were not required at
such time. For this reason, among others, the amount realized by a Unitholder
upon termination may be less than the principal amount of Securities originally
represented by the Units held by such Unitholder. The Indenture will terminate
upon the redemption, sale or other disposition of the last Securities held
thereunder, but in no event shall it continue beyond the end of the calendar
year preceding the fiftieth anniversary of its execution for Long-Term, Long
Intermediate, and Intermediate Trusts, beyond the end of the calendar year
preceding the tenth anniversary of its execution for Short Intermediate and
Short Term Trusts or beyond the Mandatory Termination Date.
Written notice of any termination specifying the time or times at which
Unitholders may surrender their Certificates, if any, for cancellation shall be
given by the Trustee to each Unitholder at the address appearing on the
registration books of a Trust maintained by the Trustee. Within a reasonable
time thereafter, the Trustee shall liquidate any Securities in the Trust then
held and shall deduct from the assets of the Trust any accrued costs, expenses
or indemnities provided by the Indenture which are allocable to such Trust,
including estimated compensation of the Trustee and costs of liquidation and any
amounts required as a reserve to provide for payment of any applicable taxes or
other governmental charges. The Trustee shall then distribute to Unitholders of
such Trust their pro rata share of the balance of the Interest and Principal
Accounts. With such distribution, the Unitholders shall be furnished a final
distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the Trustee
in its sole discretion shall determine that any amounts held in reserve are no
longer necessary, it shall make distribution thereof to Unitholders in the same
manner.
LEGAL OPINION
The legality of the Units offered hereby has been passed upon by Chapman and
Cutler, 111 West Monroe Street, Chicago, Illinois 60603. Carter, Ledyard &
Milburn, 2 Wall Street, New York, New York 10005, has acted as counsel for the
Trustee and special New York tax counsel with respect to the Trusts.
AUDITORS
The "STATEMENT OF CONDITION" and "SCHEDULE OF INVESTMENTS" at the Initial
Date of Deposit included in Part A of this Prospectus have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report in Part A of this Prospectus, and are included herein in reliance upon
the authority of said firm as experts in giving said report.
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SUPPLEMENTAL INFORMATION
Upon written or telephonic request to the Trustee, investors will receive at
no cost to the investor supplemental information about their respective Trust,
which has been filed with the Securities and Exchange Commission and is intended
to supplement information contained in Part A and Part B of this Prospectus.
This supplement includes additional general information about the Sponsor and
the Trusts. The information supplement is incorporated by reference into the
Prospectus.
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[Logo]
Defined
NUVEEN FIXED INCOME
Portfolios
PROSPECTUS -- PART B
JUNE 23, 1999
<TABLE>
<C> <S> <C>
Sponsor John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
Telephone: 312-917-7700
Trustee The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
Telephone: 800-257-8787
Legal Counsel to Sponsor Chapman and Cutler
111 West Monroe Street
Chicago, IL 60603
Independent Arthur Andersen LLP
Public Accountants 33 West Monroe Street
for the Trusts Chicago, IL 60603
</TABLE>
This Prospectus does not contain complete information about the
Portfolios filed with the Securities and Exchange Commission in Washington, DC
under the Securities Act of 1933 and the Investment Company Act of 1940.
To obtain copies at proscribed rates--
<TABLE>
<S> <C>
Write: Public Reference Section of the Commission, 450 Fifth Street NW,
Washington, DC 20549-6009
Call: (800) SEC-0330
Visit: http://www.sec.gov
</TABLE>
No person is authorized to give any information or representation about
the Portfolios not contained in Parts A or B of this Prospectus or the
Information Supplement, and you should not rely on any other information.
When Units of the Portfolios are no longer available or for investors
who will reinvest into subsequent series of the Portfolios, this Prospectus may
be used as a preliminary Prospectus for a future series. If this is the case,
investors should note the following:
1. Information in this Prospectus is not complete and may be
changed;
2. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective;
and
3. This prospectus is not an offer to sell the securities of a
future series and is not soliciting an offer to buy such securities in any
state where the offer or sale is not permitted.
<PAGE>
NUVEEN UNIT TRUSTS
INFORMATION SUPPLEMENT
NUVEEN INSURED CORPORATE TRUST SERIES 4 (LONG-TERM)
The Information Supplement provides additional information concerning the
structure and operations of a Nuveen Unit Trust not found in the prospectuses
for the Trusts. This Information Supplement is not a prospectus and does not
include all of the information that a prospective investor should consider
before investing in a Trust. This Information Supplement should be read in
conjunction with the prospectus for the Trust in which an investor is
considering investing ("PROSPECTUS"). Copies of the Prospectus can be obtained
by calling or writing the Trustee at 4 New York Plaza, New York, NY 10004-2413;
800-257-8787. This Information Supplement is dated June 23, 1999. Capitalized
terms have been defined in the Prospectus.
TABLE OF CONTENTS
<TABLE>
<S> <C>
ACCUMULATION PLAN....................................................................... 2
INFORMATION ABOUT THE SPONSOR........................................................... 4
RISK FACTORS............................................................................ 5
DESCRIPTION OF RATINGS.................................................................. 10
ESTIMATED CASH FLOWS.................................................................... 12
HOW TO CALCULATE YOUR ESTIMATED INCOME.................................................. 14
</TABLE>
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ACCUMULATION PLAN
The Sponsor, John Nuveen & Co. Incorporated, is also the principal
underwriter of the Accumulation Funds listed in the following table. Each of
these funds is an open-end, diversified management investment company into which
Unitholders may choose to reinvest Trust distributions automatically, without
any sales charge. Unitholders may reinvest both interest and principal
distributions or principal distributions only. Each Accumulation Fund has
investment objectives which differ in certain respects from those of the Trusts
and may invest in securities which would not be eligible for deposit in the
Trusts. The investment adviser to each Accumulation Fund is a wholly-owned
subsidiary of the Sponsor. Unitholders should contact their financial adviser or
the Sponsor to determine which of the Accumulation Funds they may reinvest into,
as reinvestment in certain of the Accumulation Funds may be restricted to
residents of a particular state or states. Unitholders may obtain a prospectus
for each Accumulation Fund through their financial adviser or through the
Sponsor at (800) 621-7227. For a more detailed description, Unitholders should
read the prospectus of the Accumulation Fund in which they are interested.
The following is a complete list of the Accumulation Funds currently
available, as of the Date of Deposit of this Prospectus, to Unitholders under
the Accumulation Plan. The list of available Accumulation Funds is subject to
change without the consent of any of the Unitholders.
ACCUMULATION FUNDS
MUTUAL FUNDS
NUVEEN FLAGSHIP MUNICIPAL TRUST
Nuveen Municipal Bond Fund
Nuveen Insured Municipal Bond Fund
Nuveen Flagship All-American Municipal Bond Fund
Nuveen Flagship Limited Term Municipal Bond Fund
Nuveen Flagship Intermediate Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST I
Nuveen Flagship Arizona Municipal Bond Fund
Nuveen Flagship Colorado Municipal Bond Fund
Nuveen Flagship Florida Municipal Bond Fund
Nuveen Flagship Florida Intermediate Municipal Bond Fund
Nuveen Maryland Municipal Bond Fund
Nuveen Flagship New Mexico Municipal Bond Fund
Nuveen Flagship Pennsylvania Municipal Bond Fund
Nuveen Flagship Virginia Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST II
Nuveen California Municipal Bond Fund
Nuveen California Insured Municipal Bond Fund
Nuveen Flagship Connecticut Municipal Bond Fund
Nuveen Massachusetts Municipal Bond Fund
Nuveen Massachusetts Insured Municipal Bond Fund
Nuveen Flagship New Jersey Municipal Bond Fund
Nuveen Flagship New Jersey Intermediate Municipal Bond Fund
Nuveen Flagship New York Municipal Bond Fund
Nuveen New York Insured Municipal Bond Fund
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NUVEEN FLAGSHIP MULTISTATE TRUST III
Nuveen Flagship Alabama Municipal Bond Fund
Nuveen Flagship Georgia Municipal Bond Fund
Nuveen Flagship Louisiana Municipal Bond Fund
Nuveen Flagship North Carolina Municipal Bond Fund
Nuveen Flagship South Carolina Municipal Bond Fund
Nuveen Flagship Tennessee Municipal Bond Fund
NUVEEN FLAGSHIP MULTISTATE TRUST IV
Nuveen Flagship Kansas Municipal Bond Fund
Nuveen Flagship Kentucky Municipal Bond Fund
Nuveen Flagship Kentucky Limited Term Municipal Bond Fund
Nuveen Flagship Michigan Municipal Bond Fund
Nuveen Flagship Missouri Municipal Bond Fund
Nuveen Flagship Ohio Municipal Bond Fund
Nuveen Flagship Wisconsin Municipal Bond Fund
Flagship Utility Income Fund
Nuveen Investment Trust
Nuveen Growth and Income Stock Fund
Nuveen Balanced Municipal and Stock Fund
Nuveen Balanced Stock and Bond Fund
Nuveen European Value Fund
Nuveen Investment Trust II
Nuveen Rittenhouse Growth Fund
Nuveen Investment Trust III
Nuveen Income Fund
MONEY MARKET FUNDS
Nuveen California Tax-Free Money Market Fund
Nuveen Massachusetts Tax-Free Money Market Fund
Nuveen New York Tax-Free Money Market Fund
Nuveen Tax-Free Reserves, Inc.
Nuveen Tax-Exempt Money Market Fund, Inc.
Each person who purchases Units of a Trust may become a participant in the
Accumulation Plan and elect to have his or her distributions on Units of the
Trust invested directly in shares of one of the Accumulation Funds. Reinvesting
Unitholders may select any interest distribution plan. Thereafter, each
distribution of interest income or principal on the participant's Units
(principal only in the case of a Unitholder who has chosen to reinvest only
principal distributions) will, on the applicable distribution date, or the next
day on which the New York Stock Exchange is nominally open ("BUSINESS DAY") if
the distribution date is not a business day, automatically be received by the
transfer agent for each of the Accumulation Funds, on behalf of such participant
and applied on that date to purchase shares (or fractions thereof) of the
Accumulation Fund chosen at net asset value as computed as of 4:00 p.m. eastern
time on each such date. All distributions will be reinvested in the Accumulation
Fund chosen and no part thereof will be retained in a separate account. These
purchases will be made without a sales charge.
The Transfer Agent of the Accumulation Fund will mail to each participant in
the Accumulation Plan a quarterly statement containing a record of all
transactions involving purchases of Accumulation Fund shares (or fractions
thereof) with Trust interest distributions or as a result of reinvestment of
Accumulation Fund
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<PAGE>
dividends. Any distribution of principal used to purchase shares of an
Accumulation Fund will be separately confirmed by the Transfer Agent.
Unitholders will also receive distribution statements from the Trustee detailing
the amounts transferred to their Accumulation Fund accounts.
Participants may at any time, by so notifying the Trustee in writing, elect
to change the Accumulation Fund into which their distributions are being
reinvested, from principal only reinvestment to reinvestment of both principal
and interest or vice versa, or to terminate their participation in the
Accumulation Plan altogether and receive future distributions on their Units in
cash. There will be no charge or other penalty for such change of election or
termination. The character of Trust distributions for income tax purposes will
remain unchanged even if they are reinvested in an Accumulation Fund.
INFORMATION ABOUT THE SPONSOR
Since our founding in 1898, Nuveen has been synonymous with investments that
withstand the test of time. Today, we offer a broad range of investments
designed for mature investors whose portfolio is the principal source of their
ongoing financial security. More than 1.3 million investors have entrusted
Nuveen to help them maintain the lifestyle they currently enjoy.
A value investing approach--purchasing securities of strong companies and
communities that represent good long-term value--is the cornerstone of Nuveen's
investment philosophy. It is a careful, long-term strategy that offers the
potential for attractive returns with moderated risk. Successful value investing
begins with in-depth research and a discerning eye for marketplace opportunity.
Nuveen's team of investment professionals is backed by the discipline, resources
and expertise of a century of investment experience, including one of the most
recognized research departments in the industry.
To meet the unique circumstances and financial planning needs of mature
investors, Nuveen offers a wide array of taxable and tax-free investment
products--including equity and fixed-income mutual funds, unit trusts,
exchange-traded funds, customized asset management services and cash management
products.
The Sponsor is also principal underwriter of the registered open-end
investment companies set forth herein under "Accumulation Plan" as well as for
the Golden Rainbow A James Advised Mutual Fund, and acted as co-managing
underwriter of Nuveen Municipal Value Fund, Inc., Nuveen California Municipal
Value Fund, Inc., Nuveen New York Municipal Value Fund, Inc., Nuveen Municipal
Income Fund, Inc., Nuveen Premium Income Municipal Fund, Inc., Nuveen
Performance Plus Municipal Fund, Inc., Nuveen California Performance Plus
Municipal Fund, Inc., Nuveen New York Performance Plus Municipal Fund, Inc.,
Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal Market Opportunity Fund,
Inc. Nuveen California Municipal Market Opportunity Fund, Inc., Nuveen
Investment Quality Municipal Fund, Inc., Nuveen California Investment Quality
Municipal Fund, Inc., Nuveen New York Investment Quality Municipal Fund, Inc.,
Nuveen Insured Quality Municipal Fund, Inc., Nuveen Florida Investment Quality
Municipal Fund, Nuveen Pennsylvania Investment Quality Municipal Fund, Nuveen
New Jersey Investment Quality Municipal Fund, Inc., and the Nuveen Select
Quality Municipal Fund, Inc., Nuveen California Select Quality Municipal Fund,
Inc., Nuveen New York Select Quality Municipal Fund, Inc., Nuveen Quality Income
Municipal Fund, Inc., Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen
Florida Quality Income Municipal Fund, Nuveen Michigan Quality Income Municipal
Fund, Inc., Nuveen Ohio Quality Income Municipal Fund, Inc., Nuveen Texas
Quality Income Municipal Fund, Nuveen California Quality Income Municipal Fund,
Inc., Nuveen New York Quality Income Municipal Fund, Inc., Nuveen Premier
Municipal Income Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc.,
Nuveen Select Tax-Free Income Portfolio, Nuveen Select Tax-Free Income Portfolio
2, Nuveen Insured California Select Tax-Free Income Portfolio, Nuveen Insured
New York Select Tax-Free Income Portfolio, Nuveen Premium Income Municipal Fund
2, Inc., Nuveen Select Tax-Free Income Portfolio 3, Nuveen Select Maturities
Municipal Fund, Nuveen Insured California Premium Income Municipal Fund, Inc.,
Nuveen Arizona Premium Income Municipal Fund, Inc., Nuveen Insured Florida
Premium Income Municipal Fund, Nuveen Michigan Premium Income Municipal Fund,
Inc., Nuveen New Jersey Premium Income Municipal Fund, Inc., Nuveen Insured New
York Premium Income Municipal Fund, Inc., Nuveen Premium Income Municipal Fund
4, Inc., Nuveen Pennsylvania Premium Income Municipal Fund 2, Nuveen
S-4
<PAGE>
Maryland Premium Income Municipal Fund, Nuveen Virginia Premium Income Municipal
Fund, Nuveen Massachusetts Premium Income Municipal Fund, Nuveen Insured
California Premium Income Municipal Fund 2, Inc., Nuveen Washington Premium
Income Municipal Fund, Nuveen Georgia Premium Income Municipal Fund, Nuveen
Missouri Premium Income Municipal Fund, Nuveen Connecticut Premium Income
Municipal Fund, Nuveen North Carolina Premium Income Municipal Fund, Nuveen
California Premium Income Municipal Fund, Nuveen Insured Premium Income
Municipal Fund 2, all registered closed-end management investment companies.
These registered open-end and closed-end investment companies currently have
approximately $35 billion in securities under management. Nuveen is a subsidiary
of The John Nuveen Company which, in turn, is approximately 78% owned by the St.
Paul Companies, Inc. ("ST. PAUL"). St. Paul is located in St. Paul, Minnesota
and is principally engaged in providing property-liability insurance through
subsidiaries. Nuveen is a member of the National Association of Securities
Dealers, Inc. and the Securities Industry Association and has its principal
office located in Chicago (333 West Wacker Drive). Nuveen maintains 8 regional
offices.
To help advisers and investors better understand and more efficiently use an
investment in the Trust to reach their investment goals, the Trust's sponsor,
John Nuveen & Co. Incorporated, may advertise and create specific investment
programs and systems. For example, such activities may include presenting
information on how to use an investment in the Trust, alone or in combination
with an investment in other mutual funds or unit investment trusts sponsored by
Nuveen, to accumulate assets for future education needs or periodic payments
such as insurance premiums. The Trust's sponsor may produce software or
additional sales literature to promote the advantages of using the Trust to meet
these and other specific investor needs.
The Sponsor offers a program of advertising support to registered
broker-dealer firms, banks and bank affiliates ("FIRMS") that sell Trust Units
or shares of Nuveen Open-End Mutual Funds (excluding money-market funds)
("FUNDS"). Under this program, the Sponsor will pay or reimburse the Firm for up
to one half of specified media costs incurred in the placement of advertisements
which jointly feature the Firm and the Nuveen Funds and Trusts. Reimbursements
to the Firm will be based on the number of the Firm's registered representatives
who have sold Fund Shares and/or Trust Units during the prior calendar year
according to an established schedule. Reimbursements under this program will be
made by the Sponsor and not by the Funds or Trusts.
A comparison of the estimated returns of the Trust and the historic
performance of corporate bonds to the returns and performance of other
investments is one element to consider in making an informed investment
decision. The Sponsor may compare the estimated returns of the Trust with the
current or historical yields or returns of other investments, including
Certificates of Deposit, U.S. Government Securities and money market funds. In
addition, the Sponsor may compare the returns of various indices with the
estimated returns of the Trust and the historical or current returns of
Corporate bonds and Corporate bond indices. The Sponsor may also quote various
performance measures and studies in order to compare the historical returns
available from an investment in Corporate bonds with investments in other
tax-free and taxable securities. Other types of fixed income securities have
investment characteristics that differ from those of the Trust. U.S. Government
bonds are long-term investments backed by the full faith and credit of the U.S.
Government and are subject to federal income tax but are exempt from state and
local personal income taxes. Bank CDs are generally short-term FDIC insured
investments, which pay fixed principal and interest but are subject to
fluctuating rollover rates. Both bank CDs and corporate bonds are generally
subject to both federal and state income taxes. Money market funds are
short-term investments with stable net asset values, fluctuating yields and
special features that enhance liquidity.
RISK FACTORS
U.S. TREASURY OBLIGATIONS. U.S. Treasury Obligations are direct obligations
of the United States and are backed by its full faith and credit although the
Units are not so backed. The U.S. Treasury Obligations are not rated but in the
opinion of the Sponsor have credit characteristics comparable to those of
securities rated "AAA" by nationally recognized rating agencies.
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An investment in Units of a Trust which contains U.S. Treasury Obligations
should be made with an understanding of the risks which an investment in fixed
rate debt obligations may entail, including the risk that the value of the U.S.
Treasury Obligations and hence the Units will decline with increases in interest
rates. The high inflation of prior years, together with the fiscal measures
adopted in response to such inflation, have resulted in wide fluctuations in
interest rates and, thus, in the value of fixed rate debt obligations generally.
The Sponsor cannot predict whether such fluctuations will exist in the future.
CORPORATE DEBT OBLIGATIONS. An investment in Units of a Corporate Trust
should be made with an understanding of the risks that an investment in fixed
rate, investment grade corporate debt obligations may entail, including the risk
that the value of the Units will decline with increases in interest rates.
Although in recent years interest rates have been relatively stable, the high
inflation of prior years, together with the fiscal measures adopted in response
to such inflation, have resulted in wide fluctuations in interest rates and thus
in the value of fixed rate debt obligations generally. Generally, bonds with
longer maturities will fluctuate in value more than bonds with shorter
maturities. A slowdown in the economy, or a development adversely affecting an
issuer's creditworthiness, may result in the issuer being unable to maintain
earnings or sell assets at the rate and at the prices, respectively, that are
required to produce sufficient cash flow to meet its interest and principal
requirements and accordingly such issuer may not be able to meet its obligations
to make principal and income payments. In addition, a slowdown in the economy or
a development adversely affecting an issuer's creditworthiness may also result
in the ratings of the Corporate Bonds and the value of the underlying portfolio
being reduced. The Corporate Trusts consist of Corporate Bonds that, in many
cases, do not have the benefit of covenants that would prevent the issuer from
engaging in capital restructurings or borrowing transactions in connection with
corporate acquisitions, leveraged buyouts or restructurings that could have the
effect of reducing the ability of the issuer to meet its obligations and might
also result in the ratings of the Corporate Bonds and the value of the
underlying portfolio being reduced.
Should the issuer of any Corporate Bond default in the payment of principal
or interest, the Corporate Trust may incur additional expenses seeking payment
on the defaulted Bond. Because amounts recovered by a Corporate Trust in payment
under the defaulted Corporate Bond, if any, may not be reflected in the value of
the Units until actually received by such Corporate Trust, and depending upon
when a Unitholder purchases or sells his or her Units, it is possible that a
Unitholder would bear a portion of the cost of recovery without receiving a
portion of any payment recovered.
UTILITY ISSUES. Certain of the Corporate Bonds in a Corporate Trust may be
obligations of utility issuers. In general, utilities are regulated monopolies
engaged in the business of supplying light, water, power, heat, transportation
or means of communication. Historically, the utilities industry has provided
investors in securities issued by companies in this industry with high levels of
reliability, stability and relative total return on their investments. However,
an investment in a Corporate Trust which contains obligations of utility issuers
should be made with an understanding of the characteristics of such issuers and
the risks which such an investment may entail. General problems of such issuers
would include the difficulty in financing large construction programs in an
inflationary period, the limitations on operations and increased costs and
delays attributable to environmental considerations, the difficulty of the
capital market in absorbing utility debt, the difficulty in obtaining fuel at
reasonable prices and the effect of energy conservation. All of such issuers
have been experiencing certain of these problems in varying degrees. In
addition, federal, state and municipal governmental authorities may from time to
time review existing, and impose additional, regulations governing the
licensing, construction and operation of nuclear power plants, which may
adversely affect the ability of the issuers of certain of such Corporate Bonds
in certain Corporate Trusts to make payments of principal and/or interest on
such Corporate Bonds.
Utilities are generally subject to extensive regulation by state utility
commissions which, for example, establish the rates which may be charged and the
appropriate rate of return on an approved asset base, which must be approved by
the state commissions. Certain utilities have had difficulty from time to time
in persuading regulators, who are subject to political pressures, to grant rate
increases necessary to maintain an adequate return on investment and voters in
many states have the ability to impose limits on rate adjustments
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(for example, by initiative or referendum). Any unexpected limitations could
negatively affect the profitability of utilities whose budgets are planned far
in advance. Also, changes in certain accounting standards currently under
consideration by the Financial Accounting Standards Board could cause
significant write-downs of assets and reductions in earnings for many
investor-owned utilities. In addition, gas pipeline and distribution companies
have had difficulties in adjusting to short and surplus energy supplies,
enforcing or being required to comply with long-term contracts and avoiding
litigation from their customers, on the one hand, or suppliers, on the other.
Finally, utilities may be subject to deregulation and competitive pressures from
alternative providers. In this environment, utilities may face costs which
prevent them from earning a positive rate of return, which will negatively
impact the issues of Corporate Bonds.
Certain of the issuers of the Corporate Bonds in a Corporate Trust may own
or operate nuclear generating facilities. Governmental authorities may from time
to time review existing, and impose additional, requirements governing the
licensing, construction and operation of nuclear power plants. Nuclear
generating projects in the electric utility industry have experienced
substantial cost increases, construction delays and licensing difficulties.
These have been caused by various factors, including inflation, high financing
costs, required design changes and rework, allegedly faulty construction,
objections by groups and governmental officials, limits on the ability to
finance, reduced forecasts of energy requirements and economic conditions. This
experience indicates that the risk of significant cost increases, delays and
licensing difficulties remains present through completion and achievement of
commercial operation of any nuclear project. Also, nuclear generating units in
service have experienced unplanned outages or extensions of scheduled outages
due to equipment problems or new regulatory requirements sometimes followed by a
significant delay in obtaining regulatory approval to return to service. A major
accident at a nuclear plant anywhere could cause the imposition of limits or
prohibitions on the operation, construction or licensing of nuclear units in the
United States.
In view of the uncertainties discussed above, there can be no assurance that
any bond issuer's share of the full cost of nuclear units under construction
ultimately will be recovered in rates or of the extent to which a bond issuer
could earn an adequate return on its investment in such units. The likelihood of
a significantly adverse event occurring in any of the areas of concern described
above varies, as does the potential severity of any adverse impact. It should be
recognized, however, that one or more of such adverse events could occur and
individually or collectively could have a material adverse impact on the
financial condition or the results of operations or on a bond issuer's ability
to make interest and principal payments on its outstanding debt.
Other general problems of the gas, water, telephone and electric utility
industry (including state and local joint action power agencies) include
difficulty in obtaining timely and adequate rate increases, difficulty in
financing large construction programs to provide new or replacement facilities
during an inflationary period, rising costs of rail transportation to transport
fossil fuels, the uncertainty of transmission service costs for both interstate
and intrastate transactions, changes in tax laws which adversely affect a
utility's ability to operate profitably, increased competition in service costs,
reductions in estimates of future demand for electricity and gas in certain
areas of the country, restrictions on operations and increased cost and delays
attributable to environmental considerations, uncertain availability and
increased cost of capital, unavailability of fuel for electric generation at
reasonable prices, including the steady rise in fuel costs and the costs
associated with conversion to alternate fuel sources such as coal, availability
and cost of natural gas for resale, technical and cost factors and other
problems associated with construction, licensing, regulation and operation of
nuclear facilities for electric generation, including among other considerations
the problems associated with the use of radioactive materials and the disposal
of radioactive wastes, and the effects of energy conservation. Each of the
problems referred to could adversely affect the ability of the issuer of any
utility bonds in a Corporate Trust to make payments due on these Corporate
Bonds.
In addition, the ability of state and local joint action power agencies to
make payments on bonds they have issued is dependent in large part on payments
made to them pursuant to power supply or similar agreements.
S-7
<PAGE>
Courts in Washington and Idaho have held that certain agreements between
Washington Public Power Supply System ("WPPSS") and the WPPSS participants are
unenforceable because the participants did not have the authority to enter into
the agreements. While these decisions are not specifically applicable to
agreements entered into by public entities in other states, they may cause a
reexamination of the legal structure and economic viability of certain projects
financed by joint action power agencies, which might exacerbate some of the
problems referred to above and possibly lead to legal proceedings questioning
the enforceability of agreements upon which payment of these bonds may depend.
Business conditions of the telephone industry in general may affect the
performance of a Trust. General problems of telephone companies include
regulation of rates for service by the FCC and various state or other regulatory
agencies. However, over the last several years regulation has been changing,
resulting in increased competition. The new approach is more market oriented,
more flexible and more complicated. For example, Federal and certain state
regulators have instituted "price cap" regulation which couples protection of
rate payers for basic services with flexible pricing for ancillary services.
These new approaches to regulation could lead to greater risks as well as
greater rewards for operating telephone companies such as those that may be
included in the Trusts. Inflation has substantially increased the operating
expenses and cost of plant required for growth, service, improvement and
replacement of existing plant. Continuing cost increases, to the extent not
offset by improved productivity and revenues from increased business, would
result in a decrease in rate of return and a continuing need for rate increases.
Although allowances are generally made in rate making proceedings for cost
increases, delays may be experienced in obtaining the necessary rate increases
and there can be no assurance that the regulatory agencies will grant rate
increases adequate to cover operating and other expenses and debt service
requirements. To meet increasing competition, telephone companies will have to
commit substantial capital, technological and marketing resources. Telephone
usage, and therefore revenues, could also be adversely affected by any sustained
economic recession. New technology, such as cellular service and fiber optics,
will require additional capital outlays. The uncertain outcomes of future labor
agreements may also have a negative impact on the telephone companies. Each of
these problems could adversely affect the ability of the telephone company
issuers of any Corporate Bonds in a Corporate Trust to make payments of
principal and interest on their Corporate Bonds.
HOSPITAL AND HEALTH CARE FACILITY ISSUES. Certain of the Corporate Bonds in
a Corporate Trust may be obligations of hospital and health care issuers.
Payments on hospital and health care facility bonds are dependent upon revenues
of hospitals and other health care facilities. These revenues come from private
third-party payors and government programs, including the Medicare and Medicaid
programs, which have generally undertaken cost containment measures to limit
payments to health care facilities. Hospitals and health care facilities are
subject to various legal claims by patients and others and are adversely
affected by the increasing cost of insurance.
BANKS AND OTHER FINANCIAL INSTITUTION ISSUES. Certain of the Corporate
Bonds in a Corporate Trust may be obligations of banks and other financial
institution issuers. The profitability of a financial institution is largely
dependent upon the credit quality of its loan portfolio which, in turn, is
affected by the institution's underwriting criteria, concentrations within the
portfolio and specific industry and general economic conditions. The operating
performance of financial institutions is also impacted by changes in interest
rates, the availability and cost of funds, the intensity of competition and the
degree of governmental regulation.
TELECOMMUNICATIONS ISSUES. Certain of the Corporate Bonds in a Corporate
Trust may be obligations of telecommunications issuers. Payments on bonds of
companies in the telecommunications industry, including local, long-distance and
cellular service, the manufacture of telecommunications equipment, and other
ancillary services, are generally dependant upon the amount and growth of
customer demand, the level of rates permitted to be charged by regulatory
authorities and the ability to obtain periodic rate increases, the effects of
inflation on the cost of providing services and the rate of technological
innovation. The industry is characterized by increasing competition in all
sectors and extensive regulation by the Federal Communications Commission and
various state regulatory authorities.
S-8
<PAGE>
GENERAL. Certain of the Securities may have been deposited at a market
discount or premium principally because their interest rates are lower or higher
than prevailing rates on comparable securities. The current returns of market
discount securities are lower than comparably rated securities selling at par
because discount securities tend to increase in market value as they approach
maturity. The current returns of market premium securities are higher than
comparably rated securities selling at par because premium securities tend to
decrease in market value as they approach maturity. Because part of the purchase
price is returned through current income payments and not at maturity, an early
redemption at par of a premium security will result in a reduction in yield to a
Trust. Market premium or discount attributable to interest rate changes does not
indicate market confidence or lack of confidence in the issue.
Lower-rated securities tend to offer higher yields than higher-rated
securities with the same maturities because the creditworthiness of the issuers
of lower-rated securities may not be as strong as that of other issuers.
Moreover, if a Bond is recharacterized as equity by the Internal Revenue Service
for Federal income tax purposes, the issuer's interest deduction with respect to
the Bond will be disallowed and this disallowance may adversely affect the
issuer's credit rating. Because investors generally perceive that there are
greater risks associated with lower-rated securities, the yields and prices of
these securities tend to fluctuate more than higher-rated securities with
changes in the perceived quality of the credit of their issuers. In addition,
the market value of certain fixed-income securities may fluctuate more than the
market value of higher-rated securities since lower-rated, fixed-income
securities tend to reflect short-term credit developments to a greater extent
than higher-rated securities. Issuers of certain securities may possess less
creditworthiness characteristics than issuers of higher-rated securities and,
especially in the case of issuers whose obligations or credit standing have
recently been downgraded, may be subject to claims by debtholders, owners of
property leased to the issuer or others which, if sustained, would make it more
difficult for the issuers to meet their payment obligations. Bonds are also
affected by variables such as interest rates, inflation rates and real growth in
the economy. Therefore, investors should consider carefully the relative risks
associated with investment in securities which carry lower ratings.
FOREIGN ISSUERS. A portion of the Bonds in the Trusts may be invested in
securities of foreign issuers. It is appropriate for investors in such Trusts to
consider certain investment risks that distinguish investments in Bonds of
foreign issuers from those of domestic issuers. Those investment risks include
future political and economic developments, the possible imposition of
withholding taxes on interest income payable on the Bonds held in the Trusts,
the possible seizure or nationalization of foreign deposits, the possible
establishment of exchange controls or the adoption of other foreign governmental
restrictions (including expropriation, burdensome or confiscatory taxation and
moratoriums) which might adversely affect the payment or receipt of payment of
amounts due on the Bonds. Investors should realize that, although the Trusts
invest in U.S. dollar denominated investments, the foreign issuers which operate
internationally are subject to currency risks. The value of Bonds can be
adversely affected by political or social instability and unfavorable diplomatic
or other negative developments. In addition, because many foreign issuers are
not subject to the reporting requirements of the Securities Exchange Act of
1934, there may be less publicly available information about the foreign issuer
than a U.S. domestic issuer. Foreign issuers also are not necessarily subject to
uniform accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to U.S. domestic issuers. However,
the Sponsor anticipates that adequate information will be available to allow the
Sponsor to provide portfolio surveillance.
LIQUIDITY. The Bonds in the Trusts may not have been registered under the
Securities Act of 1933 and may not be exempt from the registration requirements
of the Act. Most of the Bonds will not be listed on a securities exchange.
Whether or not the Bonds are listed, the principal trading market for the Bonds
will generally be in the over-the-counter market. As a result, the existence of
a liquid trading market for the Bonds may depend on whether dealers will make a
market in the Bonds. There can be no assurance that a market will be made for
any of the Bonds, that any market for the Bonds will be maintained or of the
liquidity of the Bonds in any markets made. The price at which the Bonds may be
sold to meet redemptions and the value of the Trusts will be adversely affected
if trading markets for the Bonds are limited or absent. The Trusts may also
S-9
<PAGE>
contain non-exempt Bonds in registered form which have been purchased on a
private placement basis. Sales of these Bonds may not be practicable outside the
United States, but can generally be made to U.S. institutions in the private
placement market which may not be as liquid as the general U.S. securities
market. Since the private placement market is less liquid, the prices received
may be less than would have been received had the markets been broader.
EXCHANGE CONTROLS. On the basis of the best information available to the
Sponsor at the present time none of the Bonds is subject to exchange control
restrictions under existing law which would materially interfere with payment to
the Trusts of amounts due on the Bonds. However, there can be no assurance that
exchange control regulations might not be adopted in the future which might
adversely affect payments to the Trusts. In addition, the adoption of exchange
control regulations and other legal restrictions could have an adverse impact on
the marketability of the Bonds in the Trusts and on the ability of the Trusts to
satisfy its obligation to redeem Units tendered to the Trustee for redemption.
JURISDICTION OVER, AND U.S. JUDGMENTS CONCERNING, FOREIGN
OBLIGORS. Non-U.S. issuers of the Bonds will generally not have submitted to
the jurisdiction of U.S. courts for purposes of lawsuits relating to those
Bonds. If the Trusts contain Bonds of such an issuer, the Trusts as a holder of
those obligations may not be able to assert its rights in U.S. courts under the
documents pursuant to which the Bonds are issued. Even if the Trusts obtain a
U.S. judgment against a foreign obligor, there can be no assurance that the
judgment will be enforced by a court in the country in which the foreign obligor
is located. In addition, a judgment for money damages by a court in the United
States if obtained, will ordinarily be rendered only in U.S. dollars. It is not
clear, however, whether, in granting a judgment, the rate of conversion of the
applicable foreign currency into U.S. dollars would be determined with reference
to the due date or the date the judgment is rendered. Courts in other countries
may have rules that are similar to, or different from, the rules of U.S. courts.
DESCRIPTION OF RATINGS
STANDARD & POOR'S CORPORATION;. A description of the applicable Standard &
Poor's Corporation rating symbols and their meanings follows:
A Standard & Poor's rating is a current assessment of the creditworthiness
of an obligor with respect to a specific debt obligation. This assessment may
take into consideration obligors such as guarantors, insurers or lessees.
The rating is not a recommendation to purchase, sell or hold a security,
inasmuch as it does not comment as to market price or suitability for a
particular investor.
The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. Standard
& Poor's does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in, or unavailability of, such
information, or for other circumstances.
The ratings are based, in varying degrees, on the following considerations:
I. Likelihood of default--capacity and willingness of the obligor as
to the timely payment of interest and repayment of principal in accordance
with the terms of the obligation;
II. Nature of and provisions of the obligation;
III. Protection afforded by, and relative position of, the obligation
in the event of bankruptcy, reorganization or other arrangements under the
laws of bankruptcy and other laws affecting creditors' rights.
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.
AA--Bonds rated AA have a very strong capacity to pay interest and repay
principal, and differ from the highest rated issues only in small degree.
S-10
<PAGE>
A--Bonds rated A have a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in the higher rated categories.
PLUS (+) OR MINUS (-): The ratings from "AA" to "BB" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
PROVISIONAL RATINGS: The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of the
project being financed by the issuance of the bonds being rated and indicates
that payment of debt service requirements is largely or entirely dependent upon
the successful and timely completion of the project. This rating, however, while
addressing credit quality subsequent to completion of the project, makes no
comment on the likelihood of, or the risk of default upon failure of, such
completion. Accordingly, the investor should exercise his own judgment with
respect to such likelihood and risk.
NOTE RATINGS: A Standard & Poor's note rating reflects the liquidity
concerns and market access risks unique to notes. Notes due in 3 years or less
will likely receive a note rating. Notes maturing beyond 3 years will most
likely receive a long-term debt rating.
Note rating symbols are as follows:
SP-1 Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will
be given a plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
RATINGS OF INSURED TRUST UNITS
A Standard & Poor's rating on the units of a unit investment trust
(hereinafter referred to collectively as "units" and "trusts") is a current
assessment of creditworthiness with respect to the investment held by such
trust. This assessment takes into consideration the financial capacity of the
issuers and of any guarantors, insurers, lessees or mortgagors with respect to
such investments. The assessment, however, does not take into account the extent
to which trust expenses or portfolio asset sales for less than the trust
purchase price will reduce payment to the unitholder of the interest and
principal required to be paid on the portfolio assets. In addition, the rating
is not a recommendation to purchase, sell or hold units, inasmuch as the rating
does not comment as to market price of the units or suitability for a particular
investor.
Units rated "AAA" are composed exclusively of assets that are rated "AAA" by
Standard & Poor's and/or certain short-term investments. Standard & Poor's
defines its AAA rating for such assets as the highest rating assigned by
Standard & Poor's to a debt obligation. Capacity to pay interest and repay
principal is very strong. However, unit ratings may be subject to revision or
withdrawal at any time by Standard & Poor's and each rating should be evaluated
independently of any other rating. Such rating is only available for the first
13 months after the initial Date of Deposit of a Trust, unless the Sponsor
elects to renew the rating.
MOODY'S INVESTORS SERVICE, INC. A brief description of the applicable
Moody's Investors Service, Inc. rating symbols and their meanings follows:
Aaa--Bonds which are rated Aaa are judged to be the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of
S-11
<PAGE>
such issues. Their safety is so absolute that, with the occasional exception of
oversupply in a few specific instances, characteristically, their market value
is affected solely by money market fluctuations.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuations of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities. Their market value is virtually immune to all but money market
influences, with the occasional exception of oversupply in a few specific
instances.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future. The market
value of A-rated bonds may be influenced to some degree by economic performance
during a sustained period of depressed business conditions, but, during periods
of normalcy, A-rated bonds frequently move in parallel with Aaa and Aa
obligations, with the occasional exception of oversupply in a few specific
instances.
Moody's bond rating symbols may contain numerical modifiers of a generic
rating classification. The modifier 1 indicates that the bond ranks at the high
end of its category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the lower end of its generic rating
category.
Baa--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. The market value of Baa-rated
bonds is more sensitive to changes in economic circumstances, and aside from
occasional speculative factors applying to some bonds of this class, Baa market
valuations move in parallel with Aaa, Aa and A obligations during periods of
economic normalcy, except in instances of oversupply.
Con. (--)--Bonds for which the security depends upon the completion of some
act or the fulfillment of some condition are rated conditionally. These are
bonds secured by (a) earnings of projects under construction, (b) earnings of
projects unseasoned in operation experience, (c) rentals which begin when
facilities are completed, or (d) payments to which some other limiting condition
attaches. Parenthetical rating denotes probable credit stature upon completion
of construction or elimination of basis of condition.
NOTE RATINGS:
MIG 1--This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG 2--This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
ESTIMATED CASH FLOWS
The tables below set forth the estimated distributions per Unit of interest
and principal to Unitholders under each plan of distribution. The tables assume
no changes in Trust expenses, no redemptions or sales of the underlying Bonds
prior to maturity and the receipt of all principal due upon maturity. To the
extent the foregoing assumptions change, actual distributions will vary. There
is no guarantee that the principal amount distributed to a Unitholder by the
Trust will be equivalent to the investor's original investment.
S-12
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONTHLY
Total Principal
& Interest
Dates Payment
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
8/15/99........................................................................................ 0.6904
9/15/99 - 7/15/04.............................................................................. 0.5451
8/15/04 - 7/15/22.............................................................................. 0.5463
8/15/22........................................................................................ 3.7721
9/15/22 - 2/15/24.............................................................................. 0.5469
3/15/24........................................................................................ 16.6759
4/15/24 - 6/15/25.............................................................................. 0.4545
7/15/25........................................................................................ 16.5835
8/15/25 & 4/15/25.............................................................................. 0.3612
10/15/25....................................................................................... 16.4902
11/15/25-6/15/33............................................................................... 0.2697
7/15/33........................................................................................ 16.3987
8/15/33 - 11/15/33............................................................................. 0.1782
12/15/33....................................................................................... 16.3072
1/15/34 - 9/15/34.............................................................................. 0.0864
10/15/34....................................................................................... 16.1723
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUARTERLY
Total Principal
& Interest
Dates Payment
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
8/15/99........................................................................................ .6904
11/15/99 - 5/15/04............................................................................. 1.6434
8/15/04 - 5/15/22.............................................................................. 1.6479
8/15/22........................................................................................ 4.8737
11/15/22 - 2/15/24............................................................................. 1.6488
3/15/24........................................................................................ 16.1290
5/15/24........................................................................................ 1.4634
8/15/24 - 5/15/25.............................................................................. 1.3207
7/15/25........................................................................................ 16.1290
8/15/25........................................................................................ 1.2771
10/15/25....................................................................................... 16.1290
11/15/25....................................................................................... .9972
2/15/26 - 5/15/33.............................................................................. .8136
7/15/33........................................................................................ 16.1290
8/15/33........................................................................................ .7209
11/15/33....................................................................................... .5373
12/15/33....................................................................................... 16.1290
2/15/34........................................................................................ .3528
5/15/34 - 8/15/34.............................................................................. .2610
10/15/34....................................................................................... 16.3437
</TABLE>
S-13
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEMI-ANNUAL
Total Principal
& Interest
Dates Payment
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
8/15/99........................................................................................ 0.6904
11/15/99....................................................................................... 1.6479
5/15/00 - 5/15/04.............................................................................. 3.2958
11/15/04 - 5/15/22............................................................................. 3.3048
8/15/22........................................................................................ 3.2258
11/15/22 - 11/15/23............................................................................ 3.3066
3/15/24........................................................................................ 16.1290
5/15/24........................................................................................ 3.1212
11/15/24....................................................................................... 2.7486
6/15/25 - 10/15/25............................................................................. 16.1290
11/15/25....................................................................................... 2.2806
5/15/26 - 5/15/33.............................................................................. 1.6308
7/15/33........................................................................................ 16.1290
11/15/33....................................................................................... 1.2618
12/15/33....................................................................................... 16.1290
5/15/34........................................................................................ .6156
10/15/34....................................................................................... 16.6062
</TABLE>
HOW TO CALCULATE YOUR ESTIMATED INCOME
The example provided below illustrates how to calculate the estimated annual
income generated by a hypothetical $10,000 investment in the Trust. The
illustration assumes that the investment was made on the day prior to the date
of deposit by an investor electing the monthly distribution plan and that the
portfolio contains all of the Securities provided in "Schedule of Investments"
in Part A of this Prospectus. This hypothetical example is for illustrative
purposes only and is not intended to reflect or predict the results of any
actual investment and does not reflect any potential changes to the portfolio or
expenses.
<TABLE>
<S> <C> <C> <C> <C>
EXAMPLE OF HOW TO CALCULATE YOUR ESTIMATED INCOME:
NUVEEN INSURED CORPORATE TRUST, SERIES 4 (LONG-TERM)
$10,000 DIVIDED BY $99.86 = 100.14
Investment Offering price and # of units purchased
(as of 6/23/99) accrued interest
100.14 x $6.5414 = $655.06
# of units purchased Annual income per unit annual income
(monthly plan)
</TABLE>
S-14
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
A. BONDING ARRANGEMENTS OF DEPOSITOR:
The Depositor has obtained the following Stockbrokers Blanket Bonds for its
officers, directors and employees:
<TABLE>
<S> <C>
INSURER/POLICY NO. AMOUNT
Reliance Insurance Company $26,000,000
B262 6895
</TABLE>
B. THIS AMENDMENT OF REGISTRATION STATEMENT COMPRISES THE FOLLOWING PAPERS AND
DOCUMENTS:
The facing sheet
The Prospectus
The signatures
Consents of Independent Public
Accountants and Counsel as indicated
Exhibits as listed on page S-5
C. EXPLANATORY NOTE:
This Amendment No. 1 to the Registration Statement may contain multiple
separate prospectuses. Each prospectus will relate to an individual unit
investment trust and will consist of a Part A, a Part B and an Information
Supplement. Each prospectus will be identical with the exception of the
respective Part A which will contain the financial information specific to such
underlying unit investment trust.
D. UNDERTAKINGS:
1. The Information Supplement to the Trust will not include third party
financial information.
S-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Nuveen Unit Trusts, Series 39 has duly caused this Amendment No. 1 to the
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized in the City of Chicago and State of Illinois on June 23, 1999.
NUVEEN UNIT TRUSTS, SERIES 39
(Registrant)
By JOHN NUVEEN & CO. INCORPORATED
(Depositor)
By: Robert K. Burke
--------------------------------------
Vice President
Attest: Karen L. Healy
--------------------------------------
Assistant Secretary
S-2
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the date indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE* DATE
<S> <C> <C> <C>
Timothy R. Schwertfeger Chairman, Board of Directors )
Chief Executive Officer and )
Director )
) Larry Woods Martin
) Attorney-In-Fact**
John P. Amboian Chief Financial Officer and )
Executive Vice President ) June 23, 1999
)
)
Margaret E. Wilson Vice President and Controller )
)
)
)
</TABLE>
- --------------
* The titles of the persons named herein represent their capacity in and
relationship to John Nuveen & Co. Incorporated, the Depositor.
** The powers of attorney for messrs. Amboian and Schwertfeger were filed
as Exhibit P to Form N-8B-2 (File No. 811-08103) and for Ms. Wilson as
Exhibit 6.2 to Nuveen Unit Trusts, Series 12 (File No. 333-49197).
S-3
<PAGE>
3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The consent of Arthur Andersen LLP to the use of its name in the Prospectus
included in the Registration Statement is filed by this amendment as Exhibit 4.4
to the Registration Statement.
CONSENT OF CHAPMAN AND CUTLER
The consent of Chapman and Cutler to the use of its name in the Prospectus
included in the Registration Statement is contained in its opinions filed by
this amendment as Exhibits 3.1 and 3.2 to the Registration Statement.
CONSENT OF STANDARD & POOR'S,
A DIVISION OF THE MCGRAW-HILL COMPANIES
The consent of Standard & Poor's Ratings Group to the use of its name in the
Prospectus included in the Registration Statement is filed by this amendment as
Exhibit 4.1 to the Registration Statement.
CONSENT OF KENNY S&P EVALUATION SERVICES
The consent of Kenny S&P Evaluation Services to the use of its name in the
Prospectus included in the Registration Statement is filed by this amendment as
Exhibit 4.2 to the Registration Statement.
CONSENT OF CARTER, LEDYARD & MILBURN
The consent of Carter, Ledyard & Milburn to the use of its name in the
Prospectus included in the Registration Statement is filed by this amendment as
Exhibit 3.4 to the Registration Statement.
S-4
<PAGE>
LIST OF EXHIBITS
<TABLE>
<S> <C>
1.1(a) Copy of Standard Terms and Conditions of Trust for Nuveen Unit Trust, Series 1 and
certain subsequent series, effective May 29, 1997 between John Nuveen & Co.
Incorporated, Depositor, and The Chase Manhattan Bank, Trustee (incorporated by
reference to Amendment No. 2 to Form S-6 (File No. 333-23671) filed on behalf of Nuveen
Unit Trust, Series 1).
1.1(b) Trust Indenture and Agreement.
2.1 Copy of Certificate of Ownership (Included in Exhibit 1.1(a) on pages 2 to 8,
inclusive, and incorporated herein by reference).
3.1 Opinion of counsel as to legality of securities being registered.
3.2 Opinion of counsel as to Federal income tax status of securities being registered.
3.3 Opinion of counsel as to legality of securities being registered.
3.4 Opinion of counsel as to New York income tax status of securities being registered.
4.1 Consent of Standard & Poor's, a Division of The McGraw-Hill Companies.
4.2 Consent of Kenny S&P Evaluation Services.
4.4 Consent of Arthur Andersen LLP
6.1 List of Directors and Officers of Depositor and other related information (incorporated
by reference to Exhibit E to Form N-8B-2 (File No. 811-08103) filed on March 20, 1997 on
behalf of Nuveen Unit Trusts, Series 1 and subsequent Series).
</TABLE>
S-5
<PAGE>
EXHIBIT 1.1(B)
NUVEEN UNIT TRUSTS, SERIES 39
TRUST INDENTURE AND AGREEMENT
DATED June 23, 1999
This Trust Indenture and Agreement by and between John Nuveen & Co.
Incorporated, as Depositor and The Chase Manhattan Bank, as Trustee, sets forth
certain provisions in full and incorporates other provisions by reference to the
document entitled "Standard Terms and Conditions of Trust for Nuveen Unit Trust,
Series 1 and certain subsequent Series, effective May 29, 1997" (herein called
the "Standard Terms and Conditions of Trust"), and such provisions as are set
forth in full and such provisions as are incorporated by reference constitute a
single instrument. All references herein to Articles and Sections are to
Articles and Sections of the Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the promises and of the mutual agreements herein
contained, the Depositor and the Trustee, agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the Provisions of Part II hereof, all the provisions contained in
the Standard Terms and Conditions of Trust are herein incorporated by reference
in their entirety and shall be deemed to be a part of this instrument as fully
and to the same extent as though said provisions had been set forth in full in
this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(a) The Bonds defined in Section 1.01(1) listed in Schedule A hereto have
been deposited in trust under this Trust Indenture and Agreement.
(b) The fractional undivided interest in and ownership of the Trust Fund
represented by each Unit for a Trust on the Initial Date of Deposit is 1/ (the
number of Units) set forth under the caption "Statement of Condition -
Interest of Unitholders: Units of fractional undivided interest outstanding"
in the Prospectus.
(c) The number of Units created of a Trust are as set forth under the
caption "Statement of Condition - Interest of Unitholders: Units of fractional
undivided interest outstanding" in the Prospectus for the Trust.
(d) Article I of the Standard Terms and Conditions of Trust is hereby
amended to replace the definition of "Unit" and "Prospectus" and to add
the definitions of "Distribution Date", "Settlement Date",
"Evaluator" and "Initial Date of Deposit":
(23) "UNIT" in respect of any Trust shall mean the fractional
undivided interest in and ownership of an individual Trust Fund
equal initially to 1/(the number of Units of fractional
undivided interest outstanding) provided in the Statement of
Condition in the Prospectus for the Trust Fund, the denominator
of which fraction shall be (1) increased by the number of any
additional Units issued pursuant to Section 2.01 hereof and (2)
decreased by the number of any such Units redeemed as provided
in Section 4.02.
(27) "DISTRIBUTION DATE" shall mean that assigned to it in the
Prospectus for the Trust.
(28) "SETTLEMENT DATE" shall mean three business days after the Initial
Date of Deposit or, if stated otherwise in the Prospectus, the
meaning assigned to it in the Prospectus for the Trust.
(29) "EVALUATOR" shall mean the party designated in the Prospectus for
a Trust or any party appointed by the Sponsor.
(30) "INITIAL DATE OF DEPOSIT" shall have the meaning assigned to it in
the Prospectus for each respective Trust Fund.
(31) "PROSPECTUS" shall mean the Prospectus relating to a Trust in the
form first used to confirm sales of Units.
(e) Section 3.01 shall be amended to read in its entirety as follows:
SECTION 3.01. INITIAL COST: Subject to reimbursement as hereinafter provided,
the cost of organizing the Trust and the sale of the Trust Units shall be borne
by the Depositor, provided, however, that the liability on the part of the
Depositor under this section shall not include any fees or other expenses
incurred in connection with the administration of the Trust subsequent to the
deposit referred to in Section 2.01. At the earlier of six months after the
Initial Date of Deposit or the conclusion of the primary offering period (as
certified by the Depositor to the Trustee), the Trustee shall withdraw from the
Account or Accounts specified in the Prospectus or, if no Account is therein
specified, from the Principal Account, and pay to the Depositor the Depositor's
reimbursable expenses of organizing the Trust in an amount certified to the
Trustee by the Depositor. In no event shall the amount paid by the Trustee to
the Depositor for the Depositor's reimbursable expenses of organizing the Trust
exceed the estimated per Unit amount of organization costs set forth in the
prospectus for the Trust multiplied by the number of Units of the Trust
outstanding at the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period; nor shall the Depositor be entitled to
or request reimbursement for expenses of organizing the Trust incurred after the
earlier of six months after the Initial Date of Deposit or the end of the
initial offering period. If the cash balance of the Principal Account is
insufficient to make such withdrawal, the Trustee shall, as directed by the
Depositor, sell Securities identified by the Depositor, or distribute to the
Depositor Securities having a value, as determined under Section 4.01 as of the
date of distribution, sufficient for such reimbursement. Securities sold or
distributed to the Depositor to reimburse the Depositor pursuant to this Section
shall be sold or distributed by the Trustee, to the extent practicable, in the
percentage ratio then
<PAGE>
existing. The reimbursement provided for in this section shall be for the
account of the Unitholders of record at the earlier of six months after the
Initial Date of Deposit or the conclusion of the primary offering period. Any
assets deposited with the Trustee in respect of the expenses reimbursable under
this Section 3.01 shall be held and administered as assets of the Trust for all
purposes hereunder. The Depositor shall deliver to the Trustee any cash
identified in the Statement of Condition of the Trust included in the Prospectus
not later than the 10 calendar days following the Initial Date of Deposit or
deposit of additional Securities, as applicable and the Depositor's obligation
to make such delivery shall be secured by the letter of credit deposited
pursuant to Section 2.01. Any cash which the Depositor has identified as to be
used for reimbursement of expenses pursuant to this Section 3.01 shall be held
by the Trustee, without interest, and reserved for such purpose and,
accordingly, prior to the earlier of six months after the Initial Date of
Deposit or the conclusion of the primary offering period, shall not be subject
to distribution or, unless the Depositor otherwise directs, used for payment of
redemptions in excess of the per Unit amount payable pursuant to the next
sentence. If a Unitholder redeems Units prior to the earlier of six months
after the Initial Date of Deposit or the conclusion of the primary offering
period, the Trustee shall pay to the Unitholder, in addition to the Redemption
Value of the tendered Units, unless otherwise directed by the Depositor, an
amount equal to the estimated per Unit cost of organizing the Trust set forth in
the Prospectus, or such lower revision thereof most recently communicated to the
Trustee by the Depositor pursuant to Section 4.01, multiplied by the number of
Units tendered for redemption; to the extent the cash on hand in the Trust is
insufficient for such payment, the Trustee shall have the power to sell
Securities in accordance with Section 3.07. As used herein, the Depositor's
reimbursable expenses of organizing the Trust shall include the cost of the
initial preparation and typesetting of the registration statement, prospectuses
(including preliminary prospectuses), the indenture, and other documents
relating to the Trust, SEC and state blue sky registration fees, the cost of the
initial valuation of the portfolio and audit of the Trust, the initial fees and
expenses of the Trustee, and legal and other out-of-pocket expenses related
thereto, but not including the expenses incurred in the printing of preliminary
prospectuses and prospectuses, expenses incurred in the preparation and printing
of brochures and other advertising materials and any other selling expenses.
(f) The first paragraph of Section 4.01 shall be amended in its
entirety to read as follows:
SECTION 4.01. EVALUATION: The Trustee shall make an evaluation of each Trust as
of that time set forth in the Prospectus (the "EVALUATION TIME"), (i) on the
last business day of each of the months of June and December, (ii) on the day on
which any Unit of a respective Trust is tendered for redemption, and (iii) on
any other day desired by the Trustee or requested by the Depositor. Such
evaluations shall take into account and itemize separately, (1) the cash on hand
in the respective Trust (other than cash declared held in trust to cover
contracts to purchase securities) or moneys in the process of being collected
from matured interest coupons or securities matured or called for redemption
prior to maturity, (2) the value of each issue of the Securities in the Trust,
and (3) interest accrued thereon not subject to collection and distribution. In
making the evaluations the Trustee may determine the value of each issue of the
Securities in the Trust by the following methods or any combination thereof
which it deems appropriate: (i) on the basis of current bid prices of such
Securities as obtained from
<PAGE>
investment dealers or brokers (including the Depositor) who customarily deal
in bonds comparable to those held by the Trust, or (ii) if bid prices are not
available for any of such Securities, on the basis of bid prices for
comparable securities, or (iii) by causing the value of the Securities in the
Trust to be determined by others engaged in the practice of evaluating,
quoting or appraising securities. For each such evaluation there shall be
deducted from the sum of the above (i) amounts representing any applicable
taxes or governmental charges payable out of the Trust and for which no
deductions shall have previously been made for the purpose of addition to the
Reserve Account of such Trust, (ii) amounts representing accrued expenses of
the Trust including but not limited to unpaid fees and expenses of the
Trustee, the Depositor and counsel, in each case as reported by the Trustee
to the Depositor on or prior to the date of evaluation, (iii) amounts
representing unpaid organization costs, and (iv) cash held for distribution
to Unitholders of such Trust of record, and required for redemption of Units
tendered, as of a date prior to the evaluation then being made. The value of
the pro rata share of each Unit of such Trust determined on the basis of any
such evaluation shall be referred to herein as the "Unit Value."
Prior to the payment to the Depositor of its reimbursable organization
costs to be made at the earlier of six months after the Initial Date of
Deposit or the conclusion of the primary offering period in accordance with
Section 3.01 for purposes of determining the Trust Evaluation and Unit Value
under this Section 4.01, the Trustee shall rely upon the amounts representing
unpaid organization costs in the estimated amount per Unit set forth in the
Prospectus until such time as the Depositor notifies the Trustee in writing
of a revised estimated amount per Unit representing unpaid organization
costs. Upon receipt of such notice, the Trustee shall use this revised
estimated amount per Unit representing unpaid organization costs in
determining the Trust Evaluation and Unit Value but such revision of the
estimated expenses shall not effect calculations made prior thereto and no
adjustment shall be made in respect thereof.
(g) The following paragraph shall be added to Section 4.05.
The Depositor may employ agents in connection with its duties referenced
in Section 4.05 and shall not be answerable for the default or misconduct of
such agents if they shall have been selected with reasonable care. The fees
of such agents shall be reimbursable to the Depositor from the Trust Fund,
provided, however, that the amount of such reimbursement in any year (i)
shall reduce the amount payable to the Depositor for such year with respect
to the service in question and shall not exceed the maximum amount payable to
the Depositor for such service for such year and (ii) if such agent is an
affiliate of the Depositor, the amount of the reimbursement, when combined
with (a) all compensation received by such agent from other series of the
Fund or other unit investment trusts sponsored by the Depositor or its
affiliates and (b) the amount payable to the Depositor from the Trust Fund
and from other series of the Fund or other unit investment trusts sponsored
by the Depositor or its affiliates in respect of the service in question,
shall not exceed the aggregate cost of such agent and the Depositor of
providing such service. The Trustee shall pay such reimbursement against
the Depositor's invoice therefor upon which the Trustee may rely as the
Depositor's certification that the amount claimed complies with the
provisions of this paragraph.
<PAGE>
In Witness Whereof, John Nuveen & Co. Incorporated, has caused this Trust
Indenture and Agreement for Nuveen Unit Trusts, Series 39 to be executed by its
President, one of its Vice Presidents or one of its Assistant Vice Presidents
and its corporate seal to be hereto affixed and attested by its Secretary or its
Assistant Secretary and The Chase Manhattan Bank has caused this Trust Indenture
and Agreement to be executed by one of its Vice Presidents or Second Vice
Presidents and its corporate seal to be hereto affixed and attested to by one of
its Assistant Treasurers; all as of the day, month and year first above written.
John Nuveen & Co. Incorporated,
Depositor
By Robert K. Burke
Authorized Officer
(Seal)
Attest:
By Karen L. Healy
Assistant Secretary
The Chase Manhattan Bank, Trustee
By Alfred Miller
Assistant Vice President
(Seal)
Attest:
By Robert E. Lisk
Assistant Treasurer
SCHEDULE A TO THE TRUST INDENTURE AND AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
NUVEEN UNIT TRUSTS, SERIES 39
(Note: Incorporated herein and made a part hereof is the "Schedule of
Investments" as set forth for each Trust in the Prospectus.)
<PAGE>
EXHIBIT 3.1
(ON CHAPMAN AND CUTLER LETTERHEAD)
June 23, 1999
John Nuveen & Co. Incorporated
333 W. Wacker Drive
Chicago, Illinois 60606
RE: NUVEEN UNIT TRUSTS, SERIES 39
Gentlemen:
We have served as counsel for you, as depositor of Nuveen Unit Trusts,
Series 39 (hereinafter referred to as the "Fund"), in connection with the
issuance under the Trust Indenture and Agreement dated the date hereof
between John Nuveen & Co. Incorporated, as Depositor, and The Chase Manhattan
Bank, as Trustee, of Units of fractional undivided interest in the one or
more Trusts of said Fund (hereinafter referred to as the "Units").
In connection therewith, we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable
us to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Indenture and Agreement and the
establishment of book entry positions and the execution and issuance of
certificates evidencing the Units in the Trusts of the Fund have been duly
authorized; and
2. The book entry positions and certificates evidencing the Units in the
Trusts of the Fund when duly established or duly executed and delivered by the
Depositor and the Trustee in accordance with the aforementioned Trust Indenture
and Agreement, will constitute valid and binding obligations of such Trusts and
the Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-75111) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
<PAGE>
EXHIBIT 3.2
(ON CHAPMAN AND CUTLER LETTERHEAD)
June 23, 1999
John Nuveen & Co. Incorporated
333 W. Wacker Drive
Chicago, Illinois 60606
The Chase Manhattan Bank
Nuveen Administration Department
4 New York Plaza, Third Floor
New York, New York 10004-2413
RE: Nuveen Unit Trusts, Series 39 consisting of:
Nuveen Insured Corporate Portfolio, Series 4 (Long-Term)
Gentlemen:
We have acted as counsel for John Nuveen & Co. Incorporated, as Sponsor
and Depositor of Nuveen Unit Trusts, Series 39 (the "Fund") including Nuveen
Insured Corporate Portfolio, Series 4 (Long-Term) (the "Trust"), in
connection with the issuance of Units of fractional undivided interest in the
Trust, under a Trust Indenture and Agreement dated June 23, 1999 (the
"Indenture") between John Nuveen & Co. Incorporated, as Depositor and
Evaluator, and The Chase Manhattan Bank, as Trustee.
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we
have deemed pertinent. The assets of the Trust will consist of a portfolio of
long-term corporate debt obligations issued by utility companies (the
"Corporate Bonds") and "Zero Coupon" U.S. Treasury bonds (the "Treasury
Bonds") (collectively, the "Obligations") as set forth in the Prospectus. All
Obligations have been issued after July 18, 1984. For purposes of the
opinions set forth below, we have assumed that each of the Obligations is
debt for federal income tax purposes and that the interest on each of the
Obligations is includable in gross income for federal income tax purposes.
Based upon the foregoing and upon an investigation of such matters of law as
we consider to be applicable, we are of the opinion that, under existing federal
income tax law:
(i) The Trust is not an association taxable as a corporation for
federal income tax purposes but will be governed by the provisions of
subpart E, subchapter J (relating to trusts) of chapter 1, Internal
Revenue Code of 1986 (the "Code").
(ii) Each Unitholder will be considered as owning a pro rata share
of each asset of the Trust for federal income tax purposes. Under subpart
E, subchapter J of chapter 1 of the Code, income of the Trust will be
treated as income of each Unitholder. Each Unitholder will be considered
to have received his pro rata share of income derived from each Trust
asset when such income is considered to be received by the Trust. Each
Unitholder will also be required to include in taxable income for federal
income tax purposes, original issue discount with respect to his interest
in any Obligation held by the Trust at the same time and in the same manner
as though the Unitholder were the direct owner of such interest. Original
issue discount will be treated as zero with respect to an Obligation if it
is "de minimis" within the meaning of Section 1273 of the Code. If a
Corporate Bond is a "high-yield discount obligation" within the meaning of
Section 163(e)(5) of the Code, certain special rules may apply. A
Unitholder may elect to include in taxable income for Federal income tax
purposes, market discount as it accrues with respect to his interest in any
Obligation held by the Trust which he is considered as having acquired with
market discount at the same time and in the same manner as though the
Unitholder were the direct owner of such interest.
<PAGE>
(iii) The price a Unitholder pays for his Units, generally including
sales charges, is allocated among his pro rata portion of each Obligation
held by the Trust (in proportion to the fair market values thereof on the
valuation date closest to the date the Unitholder purchases his Units),
in order to determine his tax basis for his pro rata portion of each
Obligation held by the Trust. The Treasury Bonds are treated as bonds
that were originally issued at an original issue discount. Because the
Treasury Bonds represent interests in "stripped" U.S. Treasury bonds, a
Unitholder's initial cost for his pro rata portion of each Stripped
Treasury Bond held by the Trust (determined at the time he acquires his
Units, in the manner described above) shall be treated as its "purchase
price" by the Unitholder. Under the special rules relating to stripped
bonds, original issue discount applicable to the stripped Treasury Bonds
is effectively treated as interest for federal income tax purposes and
the amount of original issue discount in this case is generally the
difference between each stripped Treasury Bond's purchase price and its
stated redemption price at maturity. A Unitholder will be required to
include in gross income for each taxable year the sum of his daily
portions of original issue discount attributable to the Treasury Bonds
held by the Trust as such original issue discount accrues and will in
general be subject to federal income tax with respect to the total amount
of such original issue discount that accrues for such year even though
the income is not distributed to the Unitholders during such year to the
extent it is greater than or equal to the "de minimis" amount described
below. To the extent the amount of such discount is less than the
respective "de minimis" amount, such discount shall be treated as zero.
In general, original issue discount accrues daily under a constant
interest rate method which takes into account the semi-annual compounding
of accrued interest. In the case of Treasury Bonds this method will
generally result in an increasing amount of income to the Unitholders
each year.
(iv) Each Unitholder will have a taxable event when the Trustee
disposes of a Trust asset (whether by sale, exchange, liquidation,
redemption, payment on maturity or otherwise) or when the Unitholder redeems
or sells his Units. A Unitholder's tax basis in his Units will equal his tax
basis in his pro rata portion of all the assets of the Trust. Such basis is
determined (before the adjustments described below) by apportioning the tax
basis for his Units among each of the Trust assets according to their values
as of the valuation date nearest the date on which he purchased such Units.
Unitholders must reduce the tax basis of their Units for their share of
accrued interest received, if any, on Obligations delivered after the date
the Unitholders pay for their Units to the extent that such interest accrued
on such Obligations before the date the Trust acquired ownership of the
Obligations (and the amount of this reduction may exceed the amount of
accrued interest paid to the sellers) and, consequently, such Unitholders
may have an increase in taxable gain or reduction in capital loss upon the
disposition of such Units. Gain or loss upon the sale or redemption of Units
is measured by comparing the proceeds of such redemption or sale with the
adjusted basis of the Units. If the Trustee disposes of Obligations (whether
by sale, exchange, payment on maturity, redemption or otherwise), gain or
loss is recognized to the Unitholder (subject to various nonrecognition
provisions of the Code). The amount of any such gain or loss is measured by
comparing the Unitholder's pro rata share of the total proceeds from such
disposition with his basis for his fractional interest in the asset disposed
of. The basis of each Unit and of each Obligation which was issued with
original issue discount (or which had market discount) must be increased by
the amount of accrued original issue discount (and market discount if the
Unitholder elects to include market discount in income as it accrues) and
the basis of each Unit and of each Obligation which was purchased by the
Trust at a premium must be reduced by the annual amortization of bond
premium which the Unitholder has properly elected to amortize under
Section 171 of the Code. The tax basis reduction requirements of the Code
relating to amortization of bond premium may, under some circumstances,
result in the Unitholder realizing a taxable gain when his Units are sold
or redeemed for an amount equal to or less than his original cost.
Each Unitholder's pro rata share of each expense paid by the Trust is
deductible by the Unitholder to the same extent as though the expense had
been paid directly by him. It should be noted that as a result of the Tax
Reform Act of 1986, certain miscellaneous itemized deductions, such as
investment expenses, tax return preparation fees and employee business
expenses will be deductible by an individual only to the extent they exceed
2% of such individual's adjusted gross income (similar limitations also apply
to estates and trusts). Unitholders may be required to treat some or all of
the expenses of the Trust as miscellaneous itemized deductions subject to
this limitation.
The Code provides a complex set of rules governing the accrual of
original issue discount, including special rules relating to "stripped" debt
instruments such as the Treasury Bonds. These rules provide that original issue
discount generally accrues on the basis of a constant compound interest rate
over the term of such debt instruments. Special rules apply if the purchase
price of an Obligation exceeds its original issue price plus
<PAGE>
the amount of original issue discount which would have previously accrued, based
upon its issue price (its "adjusted issue price"). Similarly, these special
rules would apply to a Unitholder if the tax basis of his pro rata portion of an
Obligation issued with original issue discount exceeds his pro rata portion of
its adjusted issue price. In addition, as discussed above, the Regulation
provides that the amount of original issue discount on a stripped bond is
considered zero if the actual amount of original issue discount on such stripped
bond as determined under Section 1286 of the Code is less than a "de minimis"
amount, which, the Regulation provides, is the product of (i) 0.25 percent of
the stated redemption price at maturity and (ii) the number of full years from
the date the stripped bond is purchased (determined separately for each new
purchaser thereof) to the final maturity date of the bond.
It is possible that a Corporate Bond that has been issued at an original
issue discount may be characterized as a "high-yield discount obligation"
within the meaning of Section 163(e)(5) of the Code. To the extent that
such an obligation is issued at a yield in excess of six percentage points
over the applicable Federal rate, a portion of the original issue discount on
such obligation will be characterized as a distribution on stock (e.g.,
dividends) for purposes of the dividends received deduction which is
available to certain corporations with respect to certain dividends received
by such corporations.
If a Unitholder's tax basis in his pro rata portion of any Corporate Bond
held by the Trust is less than his allocable portion of such Corporate Bond's
stated redemption price at maturity (or, if issued with original issue
discount, his allocable portion of its revised issue price), such difference
will constitute market discount unless the amount of market discount is "de
minimis" as specified in the Code. To the extent the amount of such discount
is less than the respective "de minimis" amount, such discount shall be
treated as zero. Market discount accrues daily computed on a straight line
basis, unless the Unitholder elects to calculate accrued market discount
under a constant yield method. The market discount rules do not apply to
Treasury Bonds because they are stripped debt instruments subject to special
original issue discount rules as discussed in paragraph (iii).
Accrued market discount is generally includible in taxable income of the
Unitholders as ordinary income for federal tax purposes upon the receipt of
serial principal payments on Corporate Bonds held by the Trust, on the sale,
maturity or disposition of such Corporate Bonds by the Trust and on the sale
of a Unitholder's Units (unless a Unitholder elects to include the accrued
market discount in taxable income as such discount accrues). If a Unitholder
does not elect to annually include accrued market discount in taxable income
as it accrues, deductions of any interest expense incurred by the Unitholder
to purchase or carry his Units will be reduced by such accrued market
discount. In general, the portion of any interest which is not currently
deductible would ultimately be deductible when the accrued market discount is
included in income.
The tax basis of a Unitholder with respect to his interest in an
Obligation is increased by the amount of original issue discount (and market
discount, if the Unitholder elects to include market discount, if any, on the
Obligations held by the Trust in income as it accrues) thereon properly
included in the Unitholder's gross income as determined for federal income
tax purposes and reduced by the amount of any amortized premium which the
Unitholder has properly elected to amortize under Section 171 of the Code. A
Unitholder's tax basis in his Units will equal his tax basis in his pro rata
portion of all of the assets of the Trust.
A Unitholder will recognize taxable gain (or loss) when all or part of the
pro rata interest in an Obligation is disposed of for an amount greater (or
less) than his tax basis therefor in a taxable transaction subject to various
non-recognition provisions of the Code.
<PAGE>
As previously discussed, gain attributable to any Corporate Bond deemed to
have been acquired by the Unitholder with market discount will be treated as
ordinary income to the extent the gain does not exceed the amount of accrued
market discount not previously taken into income. The tax basis reduction
requirements of the Code relating to amortization of bond premium may, under
certain circumstances, result in the Unitholder realizing a taxable gain when
his Units are sold or redeemed for an amount equal to or less than his
original cost.
If a Unitholder disposes of a Unit, he is deemed thereby to have disposed
of his entire pro rata interest in all Trust assets including his pro rata
portion of all of the Corporate Bonds represented by the Unit. This may
result in a portion of the gain, if any, on such sale being taxable as
ordinary income under the market discount rules (assuming no election was
made by the Unitholder to include market discount in income as it accrues) as
previously discussed.
In addition, it should be noted that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into after
April 30, 1993.
A Unitholder who is a foreign investor (i.e., an investor other than a U.S.
citizen or resident or U.S. corporation, partnership, estate or trust) will not
be subject to United States federal income taxes, including withholding taxes on
interest income (including any original issue discount) on, or any gain from the
sale or other disposition of his pro rata interest in any Obligation held by the
Trust or the sale of his Units provided that all of the following conditions are
met:
(i) the interest income or gain is not effectively connected with the
conduct by the foreign investor of a trade or business within the United
States;
(ii) if the interest is United States source income (which is the
case for most securities issued by United States issuers), the Obligation
was issued after July 18, 1984 (which is the case for each Obligation held
by the Trust), the foreign investor does not own, directly or indirectly,
10% or more of the total combined voting power of all classes of voting
stock of the issuer of the Obligation and the foreign investor is not a
controlled foreign corporation related (within the meaning of Section
864(d)(4) of the Code) to the issuer of the Obligation, or
(iii) with respect to any gain, the foreign investor (if an individual)
is not present in the United States for 183 days or more during his or her
taxable year; and
(iv) the foreign investor provides all certification which may be
required of his status.
It should be noted that the Revenue Reconciliation Act of 1993 includes a
provision which eliminates the exemption from United States
taxation, including withholding taxes, for certain "contingent interest."
This provision applies to interest received after December 31, 1993. No
opinion is expressed herein regarding the potential applicability of this
provision and whether United States taxation or withholding taxes could be
imposed with respect to income derived from the Units as a result thereof.
The scope of this opinion is expressly limited to the matters set forth
herein, and, except as expressly set forth above, we express no opinion with
respect to any other taxes, including foreign, state or local taxes or
collateral tax consequences with respect to the purchase, ownership and
disposition of Units.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-75111) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related prospectus.
Very truly yours
CHAPMAN AND CUTLER
<PAGE>
EXHIBIT 3.3
CARTER, LEDYARD & MILBURN
2 WALL STREET
NEW YORK, NEW YORK 10005
June 23, 1999
The Chase Manhattan Bank,
as Trustee of
Nuveen Unit Trusts, Series 39
4 New York Plaza, 3rd Floor
New York, New York 10004
Attention: Mr. Steven B. Wolinsky
Senior Vice President
Re: Nuveen Unit Trusts, Series 39
Dear Sirs:
We are acting as counsel for The Chase Manhattan Bank ("Chase") in connection
with the execution and delivery of a Standard Terms and Conditions of Trust
for Nuveen Unit Trusts, Series 1 and subsequent dated May 29, 1997 and a
related Trust Indenture and Agreement dated today's date (such Standard Terms
and Conditions of Trust and related Trust Indenture and Agreement are
collectively referred to as the "Indenture"), each between John Nuveen & Co.
Incorporated, as Depositor (the "Depositor"), and Chase, as Trustee (the
"Trustee"), establishing the Nuveen Unit Trusts, Series 39, consisting of
Nuveen Insured Corporate Portfolio, Series 4 (Long-Term), (a "Trust Fund"), and
the confirmation by Chase, as Trustee under the Indenture, that it has caused
to be credited to the Depositor's account at The Depository Trust Company a
number of units constituting the entire interest in the Trust Fund (such
aggregate units being herein called "Units") each of which represents an
undivided interest in the Trust Fund, which consists of Treasury obligations
or corporate debt obligations, respectively (including confirmations of
contracts for the purchase of certain obligations not yet delivered and cash,
cash equivalents or an irrevocable letter of credit in the amount required
for such purchase upon the receipt of such obligations), such obligations
being defined in the Indenture as Securities and referenced in the schedules
to the Indenture.
We have examined the Indenture, the Closing Memorandum executed and delivered
today by the Depositor and the Trustee (the "Closing Memorandum"), the form of
certificate for the Units included in the Indenture and a specimen of the
certificates to be issued thereunder (the "Certificates") and such other
documents as we have deemed necessary in order to render this opinion. Based on
the foregoing, we are of the opinion that:
1. Chase is a duly organized and existing corporation having the powers
of a trust company under the laws of the State of New York.
2. The Indenture has been duly executed and delivered by Chase and,
assuming due execution and delivery by the Depositor, constitutes the valid
and legally binding obligation of Chase.
3. The Certificates are in proper form for execution and delivery by
Chase, as Trustee.
4. Chase, as Trustee, has registered on the registration books of each
Trust Fund the ownership of the Units by The Depository Trust Company, where
it has caused the Units to be credited to the account of the Depositor. Upon
receipt of confirmation of the effectiveness of the registration statement
for the sale of the Units filed with the Securities and Exchange Commission
under the Securities Act of 1933, the Trustee may cause the Units to be
transferred on the registration books of each Trust Fund to such other
<PAGE>
names, and in such denominations, as the Depositor may order, and may
deliver Certificates evidencing such ownership, as provided in the Closing
Memorandum.
5. Chase, as Trustee, may lawfully advance to each Trust Fund amounts
as may be necessary to provide periodic interest distributions of
approximately equal amounts, and may be reimbursed, without interest, for
any such advances from funds in the interest account, as provided in the
Indenture.
In rendering the foregoing opinion, we have not considered, among other
things, whether the Securities have been duly authorized and delivered.
Very truly yours,
Carter, Ledyard & Milburn
<PAGE>
EXHIBIT 3.4
CARTER LEDYARD & MILBURN
2 WALL STREET
NEW YORK, NEW YORK 10005
June 23, 1999
Nuveen Unit Trusts, Series 39
c/o The Chase Manhattan Bank, as Trustee
4 New York Plaza, 3rd Floor
New York, New York 10004
Re Nuveen Unit Trusts, Series 39
Dear Sirs:
We are acting as special counsel with respect to New York tax matters for
Nuveen Unit Trusts, Series 39, consisting of Nuveen Insured Corporate
Portfolio, Series 4 (Long-Term), (the "Trust Fund"), which will be
established under a Standard Terms and Conditions of Trust for Nuveen
Unit Trusts Series 1 and subsequent dated May 29, 1997 and a related
Trust Indenture and Agreement dated today's date (such Standard Terms
and Conditions of Trust and related Trust Indenture and Agreement are
referred to collectively as the "Indenture"), each between John Nuveen &
Co. Incorporated, as Depositor (the "Depositor"), and The Chase
Manhattan Bank, as Trustee (the "Trustee"). Pursuant to the terms of the
Indenture, units of fractional undivided interest in the Trust Fund will
be issued (the "Units"), which Units may, in accordance with the
Indenture, be represented by a certificate or certificates (the
"Certificates").
We have examined and are familiar with originals or certified copies, or
copies otherwise identified to our satisfaction, of such documents as we
have deemed necessary or appropriate for the purpose of this opinion. In
giving this opinion, we have relied upon the two opinions, each dated today
and addressed to the Trustee, of Chapman and Cutler, counsel for the
Depositor, with respect to the matters of law set forth therein.
Based upon the foregoing, we are of the opinion that:
1. The Trust Fund will not constitute an association taxable as a
corporation under New York law, and accordingly will not be subject to the
New York State franchise tax or the New York City general corporation tax.
2. Under the income tax laws of the State and City of New York, the
income of the Trust Fund will be considered the income of the holders of
the Units.
3. By reason of the exemption contained in paragraph (a) of Subdivision
8 of Section 270 of the New York Tax Law, no New York State stock transfer
tax will be payable in respect of any transfer of the Certificates.
We consent to the filing of this opinion as an exhibit to the
Registration Statement (No. 333-75111) filed with the Securities and
Exchange Commission with respect to the registration of the sale of the
Units and to the references to our name under the captions "Tax Status" and
"Legal Opinion" in such Registration Statement and the preliminary
prospectus included therein.
Very truly yours,
Carter, Ledyard & Milburn
<PAGE>
EXHIBIT 4.1
(ON STANDARD & POOR'S, A DIVISION OF THE MCGRAW-HILL COMPANIES LETTERHEAD)
June 23, 1999
John Nuveen & Co. Incorporated
333 W. Wacker Drive
Chicago, IL 60606
RE: NUVEEN UNIT TRUSTS, SERIES 39
Nuveen Insured Corporate Portfolio, Series 4 (Long-Term)
Gentlemen:
Pursuant to your request for a Standard & Poor's rating on the units of the
above-captioned Trust, SEC #333-75111, we have reviewed the information
presented to us and have assigned a "AAA" rating to the units of the Trust and a
"AAA" rating to the securities contained in the Trust. The ratings are direct
reflections of the portfolios of the Trust, which will be composed solely of
securities covered by bond insurance policies that insure against default in the
payment of principal and interest on the securities so long as they remain
outstanding, or of U.S. Treasury Debt Obligations fully guaranteed as to
principal and interest by the full faith and credit of the United States. Since
the policies on the insured securities have been issued by MBIA, which has been
assigned a 'AAA' claims paying ability rating by Standard & Poor's, Standard &
Poor's has assigned a "AAA" rating to the units of the Trust and to the
securities contained in the Trust.
Standard & Poor's will maintain surveillance on the "AAA" rating until
thirteen months from the initial date of deposit. On this date the rating will
be automatically withdrawn by Standard & Poor's unless a post effective letter
is requested by the trust.
You have permission to use the name of Standard & Poor's and the
above-assigned ratings in connection with your dissemination of information
relating to these units, provided that it is understood that the ratings are not
"market" ratings nor recommendations to buy, hold or sell the units of the
trusts or the securities contained in the Trust. Further, it should be
understood the rating on the units does not take into account the extent to
which the Trust's expenses or portfolio asset sales for less than the Trust's
purchase price will reduce payment to the unit holders of the interest and
principal required to be paid on the portfolio assets. Standard & Poor's
reserves the right to advise its own clients, subscribers, and the public of the
ratings. Standard & Poor's relies on the sponsor and its counsel, accountants,
and other experts for the accuracy and completeness of the information submitted
in connection with the ratings. Standard & Poor's does not independently verify
the truth or accuracy of any such information.
This letter evidences our consent to the use of the name of Standard &
Poor's Rating Services, a Division of The McGraw-Hill Companies, Inc. in
connection with the rating assigned to the units in the registration statement
or prospectus relating to the units or the Trust. However, this letter should
not be construed as a consent by us, within the meaning of Section 7 of the
Securities Act of 1933, to the use of the name of Standard & Poor's Ratings
Services, a Division of The McGraw-Hill Companies, Inc. in connection with the
ratings assigned to the securities contained in the Trust. You are hereby
authorized to file a copy of this letter with the Securities and Exchange
Commission.
Please be certain to send us a copy of your final prospectus as soon as it
becomes available. Should we not receive them within a reasonable amount of time
after the closing or should it not conform to the representations made to us, we
reserve the right to withdraw the rating.
Very truly yours,
STANDARD & POOR'S, A DIVISION OF THE MCGRAW-HILL COMPANIES
By Sanford B. Bragg
<PAGE>
EXHIBIT 4.2
(On J. J. Kenny Co., Inc. Letterhead)
June 23, 1999
John Nuveen & Company
333 West Wacker Drive
Chicago, IL 60606
Re: Nuveen Unit Trusts, Series 39
Gentlemen:
We have examined the registration statement File No. 333-75111 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 Registration Statement 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
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 a copy of this letter with the Securities
and Exchange Commission.
Sincerely,
Frank A. Ciccotto
<PAGE>
EXHIBIT 4.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report and to all references to our Firm included in or made a part of this
Registration Statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
June 23, 1999
<PAGE>
MEMORANDUM
NUVEEN UNIT TRUSTS, SERIES 39
FILE NO. 333-75111
The Prospectus and the Indenture filed with Amendment No. 1 of the
Registration Statement on Form S-6 have been revised to reflect information
regarding the execution of the Indenture and the deposit of securities on
June 23, 1999, and to set forth certain statistical data based thereon. In
addition, there are a number of other changes from the Prospectus as originally
filed to which reference is made. All references to the Units, prices and
related statistical data will apply to each trust of the Fund and the Units
thereof individually.
Except for such updating, an effort has been made to set forth below
certain of the changes and also to reflect all changes by marking the Prospectus
transmitted with the Amendment.
FORM S-6
FACING SHEET. The file number and proposed effective date is now shown.
THE PROSPECTUS
PART A --The "Estimated Long Term Return" and "Estimated Current
Return" to Unitholders under the Trust under each of the distribution plans are
stated.
PART A --The "Fees and Expenses" for the Trust has been completed for
this Series.
PART A --The estimated daily accrual of interest under the plans of
distribution for the Trust has been provided.
PART A --Data regarding the composition of the portfolio of the Trust
has been provided.
PART A --The schedule of investments for the Trust, including the notes
thereto has been completed.
PART A --The Record Dates and Distribution Dates for interest distributions
for the Trust has been provided.
PART A --The Statement of Condition for the Trust and the Accountant's
Report with regard thereto has been completed.
CHAPMAN AND CUTLER
Chicago, Illinois
June 23, 1999
