<PAGE>
40 Act File No. 811-08103
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 41
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: April 21, 1999
/ / Check box if it is proposed that this filing will become effective on
(date) at (time) pursuant to Rule 487.
<PAGE>
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
- 2 -
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PRELIMINARY PROSPECTUS
DATED APRIL 6, 1999
SUBJECT TO COMPLETION
[LOGO]
Defined Portfolios
Nuveen U.S. Treasury Portfolio, Series 7 (Short-Term)
Prospectus Part A dated April , 1999
- --------------------------------------------------------------------------------
- - Seeks Current Interest Income from U.S. Treasury Bonds
- - Monthly, Quarterly or Semi-annual Distributions
- - U.S. Tax Exempt for Many Foreign Holders
- - Income Exempt from State and Local Personal Income Taxes
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.
ETR-SH-007-P 4/99
<PAGE>
Nuveen U.S. Treasury Portfolio,
Series 7
<TABLE>
<CAPTION>
CUSIP NOS:
<S> <C> <C>
MONTHLY QUARTERLY SEMI-ANNUAL
</TABLE>
Overview
Nuveen Unit Trusts, Series 41 includes the unit investment trust listed above.
The Portfolio seeks to provide current interest income consistent with
preservation of capital and investment flexibility by investing in U.S. Treasury
bonds that are backed by the full faith and credit of the United States
Government.
The Portfolio is scheduled to terminate in approximately 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>
2 Overview
3 Nuveen U.S Treasury Portfolio, Series 7
3 Risk/Return Summary
3 Investment Objective
3 Investment Strategy
3 Bond Selection
3 Investor Suitability
3 Industry Diversification
3 Primary Risks
4 Fees and Expenses
4 How to Buy and Sell Units
4 Investing in the Portfolio
5 Sales or Redemptions
5 Risk Factors
5 Distributions and Taxes
5 Interest Distributions
6 Principal Distributions
6 Tax Status
6 Estimated Returns
7 General Information
7 Insurance
7 Ratings
7 Termination
7 The Sponsor
7 Dealer Concessions
7 Optional Features
7 LETTER OF INTENT
7 REINVESTMENT
7 NUVEEN MUTUAL FUNDS
8 Schedule of Investments
9 Statement of Condition
10 Report of Independent Public Accountants
For the Table of Contents of Part B, see Part B of the
Prospectus.
</TABLE>
- ------------
------
2
<PAGE>
Nuveen U.S. Treasury
Portfolio, Series 7
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE
The Portfolio seeks to provide current interest income consistent with
preservation of capital and investment flexibility.
INVESTMENT STRATEGY
The Portfolio consists of U.S. Treasury bonds with varying yields and
maturities. The bonds are expected to remain in the Portfolio until they mature,
are called or are sold to meet redemptions or expenses.
The Portfolio is designed to help protect you against changing interest rates by
seeking to return approximately 20% of the Portfolio semi-annually, commencing
on , 2000.
BOND SELECTION
In selecting the bonds for the Portfolio, the following factors, among others,
were considered by the Sponsor:
- - The types of bonds available;
- - The prices and yields of the bonds, including the extent to which the bonds
are traded at a premium or discount from par; and
- - The maturities of the bonds.
A description of the bonds included in the Portfolio is provided in the
"Schedule of Investments," below.
The Portfolio consists of U.S. Treasury bonds having a dollar-weighted
average maturity of ___ years.
INVESTOR SUITABILITY
The Portfolio may be suitable for you if you are seeking:
- - Attractive, dependable income exempt from state and local personal income
taxes;
- - Preservation of investment capital over time through owning
government-guaranteed U.S. Treasuries;
- - Reduced interest rate risk through owning a laddered Portfolio;
- - Income exempt from U.S. withholding for foreign (non-resident) investors that
meet certain conditions; and
- - Predictable payment of principal.
The Portfolio is not appropriate for you if you are seeking:
- - An aggressive high-growth investment strategy; or
- - A long-term investment product.
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;
- - Rising inflation can cause interest rates to fluctuate, which can reduce the
value of the bonds and your Units;
- - Assuming no changes in interest rates, when you sell your Units they will
generally be worth less than your cost because your cost included a sales
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.
------
3
<PAGE>
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>
AMOUNT PER UNIT
-----------------
<S> <C>
Trustee's Fee(1)........................ $ .
Sponsor's Evaluation Fee(1)............. $ .
Other Operating Expenses................ $ .
-------
TOTAL................................... $ .
MAXIMUM ORGANIZATION COSTS(2)........... $
</TABLE>
<TABLE>
<CAPTION>
AMOUNT PER
$1,000
INVESTED (AS
OF INITIAL
DATE OF
DEPOSIT)
-------------
<S> <C> <C>
INVESTOR FEES
(As of the Initial Date of
Deposit)
Maximum Sales Charge...... 1.75% $ 17.50
</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(1) PRICE
- ---------------------------------------------- -------------
<S> <C>
Less than 5,000.............................. 1.75%
5,000 but less than 10,000................... 1.50
10,000 but less than 25,000.................. 1.25
25,000 but less than 50,000.................. 1.00
50,000 or more............................... 0.75
</TABLE>
- ------------
(1) Sales charge reductions are computed both on a dollar basis and on the basis
of the number of Units purchased, using the equivalent of 5,000 Units to
$50,000, 10,000 Units to $100,000 etc., and will be applied on that basis
which is more favorable to 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>
Redemption $ $ $ $
No Redemption $ $ $ $
</TABLE>
See "Trust Operating Expenses" in Part B of the Prospectus for additional
information regarding expenses.
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 Education IRA purchases the minimum investment is $500 or the
nearest whole number of Units whose value is less than $500 and for Traditional
or Roth IRAs the minimum investment is $1,000 or 10 Units.
YOU CAN BUY UNITS FROM ANY PARTICIPATING DEALER.
As of April , 1999, the Initial Date of Deposit, the PER UNIT PUBLIC OFFERING
PRICE FOR THE PORTFOLIO IS $____. As described above, Units are subject to a
maximum sales charge of 1.75% of the Public Offering Price. The Public Offering
Price includes the sales charge, any net accrued but undistributed interest on
the Units and the estimated organization cost of $____ per Unit. For Units
purchased on the Initial Date of Deposit, $____ of accrued interest will be
added to the Public Offering Price. The Public Offering Price changes every day
with changes in the price of the bonds.
Wrap Account Purchases and certain other investors described in Part B of the
Prospectus, may buy Units
------
4
<PAGE>
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.
- - 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 world markets;
-- changes in interest rates or inflation; or
-- changes in the financial condition of the U.S. government.
- - 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.
- - LITIGATION AND LEGISLATION RISK
Litigation and legislation risk is the risk that future litigation or
legislation could affect the value of the Portfolio.
- - 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
------
5
<PAGE>
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>
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 $ $ $
(Date) (5/15/99) (5/15/99) (5/15/99)
Partial Payment N/A $ $
(Date) (8/15/99) (11/15/99)
First Normal Payment $ $ $
(Date) (6/15/99) (11/15/99) (5/15/99)
Normal Total Annual $ $ $
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.
Interest income does not include accretion of original issue discount on "zero
coupon" bonds. 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. Beginning , 2000, the Portfolio expects to
distribute approximately 20% of its assets each semi-annual period. See
"Distributions to Unitholders" in Part B of the Prospectus for additional
information.
TAX STATUS
Interest on the bonds in the Portfolio are subject to federal income taxes for
U.S. investors. You will receive principal payments if bonds are sold, called or
mature. You will be subject to tax on any gain realized by the Portfolio on the
disposition of bonds.
The Portfolio passes through to Unitholders in all states the exemption from
state and local personal income taxes afforded to direct owners of U.S. Treasury
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 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 % %
Quarterly % %
Semi-Annual % %
</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.
------
6
<PAGE>
See "Estimated Long Term Return and Estimated Current Return" in Part B of the
Prospectus for details.
General Information
CREDIT QUALITY
The U.S. Treasury bonds in the Portfolio are direct obligations of the United
States and are backed by its full faith and credit, although the Units of the
Portfolio are not so backed. U.S. Treasury bonds 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.
RATINGS
All Units of the Portfolio have been rated "AAA" by Standard & Poor's, its
highest rating.
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, ______________.
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 life-style they
currently enjoy.
The prospectus describes in detail the investment objectives, policies and risks
of this unit trust. We invite you to discuss the contents with your financial
adviser, or you may call us at 800-257-8787 for additional information.
DEALER CONCESSIONS
The Sponsor plans to allow a concession of $1.00 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 5,000................................. $ 1.00
5,000 but less than 10,000...................... 0.90
10,000 but less than 25,000..................... 0.75
25,000 but less than 50,000..................... 0.60
50,000 or more.................................. 0.45
Wrap Account Purchases.......................... 0.00
</TABLE>
See "Distributions of Units to the Public" in Part B of the Prospectus for
additional information on dealer concessions and volume incentives. Also see
"Distributions of Units to the Public" in Part B of the Prospectus for 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. If an investor purchases only Nuveen
Treasury Defined Portfolios, the benefit of an LOI will start at $500,000. 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.
------
7
<PAGE>
- --------------------------------------------------------------------------------
Preliminary Schedule of Investments
(AT THE INITIAL DATE OF DEPOSIT, APRIL __, 1999)
NUVEEN U.S. TREASURY PORTFOLIO, SERIES 7 (SHORT-TERM)
SUBJECT TO COMPLETION
<TABLE>
<CAPTION>
TRUSTEE'S
FACE DETERMINATION OF
AMOUNT DESCRIPTION COUPON MATURITY OFFERING PRICE(1)
<C> <S> <C> <C> <C>
- ------------------------------------------------------------------------------------------
-----------
- ----------
$
$
-----------
-----------
- ----------
- ----------
</TABLE>
- -------------
(1) The Sponsor's contracts to purchase U.S. Treasury bonds were entered into
on April , 1999. Other information regarding the bonds in the Portfolio
on the Initial Date of Deposit is as follows:
<TABLE>
<CAPTION>
ANNUAL
PROFIT INTEREST
COST TO (OR LOSS) INCOME TO BID PRICE
SPONSOR TO SPONSOR PORTFOLIO OF BONDS
- ----------- ------------ ----------- -----------
<S> <C> <C> <C>
$ $ $ $
</TABLE>
In addition, the difference between the Trustee's determination of offering
price and bid price (as a percentage of principal amount) is . % for the
Portfolio.
(2) This security has been purchased at a deep discount from the par value
because there is no stated interest income thereon. Securities which pay no
interest are normally described as "zero coupon" securities. Over the life
of securities purchased at a deep discount the value of such securities
will increase such that upon maturity the holders of such securities will
receive 100% of the principal amount thereof.
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.
- --------------------------------------------------------------------------------
------
8
<PAGE>
- --------------------------------------------------------------------------------
Statement of Condition
(AT THE INITIAL DATE OF DEPOSIT, APRIL __, 1999)
<TABLE>
<S> <C>
Trust Property
Investment in bonds represented by purchase contracts(1)(2)................................. $
Accrued interest to April , 1999 on underlying bonds(1)..................................... $
----------
Total........................................................................... $
----------
----------
Liabilities and Interest of Unitholders
LIABILITIES:
Accrued interest to April , 1999 on underlying bonds(4)................................. $
Reimbursement of Sponsor for organization costs(3)...................................... $
----------
Total........................................................................... $
----------
----------
INTEREST OF UNITHOLDERS:
Units of fractional undivided interest outstanding ()
Cost to investors(5).................................................................... $
Less: Gross underwriting commission(6).............................................. $
Less: Organization costs(4)......................................................... $
----------
Net amount applicable to investors...................................................... $
----------
Total........................................................................... $
----------
----------
</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 $ 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 1.75% of the Public Offering Price has
been calculated on the assumption that the Units sold are not subject to a
reduction of sales charge for quantity purchases. In single transactions
involving 500 Units or more, the sales charge is reduced. (See "Public
Offering Price" in Part B of this Prospectus.)
------
9
<PAGE>
Report of Independent Public Accountants
TO THE BOARD OF DIRECTORS OF JOHN NUVEEN & CO. INCORPORATED AND UNITHOLDERS OF
NUVEEN UNIT TRUSTS, SERIES 41:
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 41 (Nuveen U.S. Treasury Portfolio, Series 7 (Short-Term)),
as of April __, 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 41 (Nuveen U.S. Treasury
Portfolio, Series 7 (Short-Term)), as of April __, 1999, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
April __, 1999.
------
10
<PAGE>
[Logo]
Defined
NUVEEN UNIT TRUSTS, SERIES
Portfolios
PROSPECTUS -- PART A
APRIL __, 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-_____)
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>
NUVEEN UNIT TRUSTS
FIXED INCOME TRUST PROSPECTUS--PART B
APRIL , 1998
This Part B of the Prospectus may not be distributed unless accompanied by
Part A. Both Parts of this Prospectus should be retained for future reference.
FURTHER DETAIL REGARDING CERTAIN OF THE INFORMATION PROVIDED IN THE
PROSPECTUS MAY BE OBTAINED WITHIN FIVE BUSINESS DAYS OF WRITTEN OR TELEPHONIC
REQUEST TO THE TRUSTEE AT 4 NEW YORK PLAZA, NEW YORK, NY 10004-2413 OR (800)
257-8787.
CURRENTLY OFFERED AT PUBLIC OFFERING PRICE PLUS INTEREST ACCRUED TO THE DATE
OF SETTLEMENT. MINIMUM PURCHASE -- EITHER $5,000 OR 50 UNITS ($1,000 OR 10 UNITS
FOR TRADITIONAL AND ROTH IRA PURCHASES AND $500 OR NEAREST WHOLE NUMBER OF UNITS
WHOSE VALUE IS LESS THAN $500 FOR EDUCATION IRA PURCHASES), WHICHEVER IS LESS.
THIS NUVEEN UNIT TRUST SERIES consists of the underlying separate unit
investment trusts set forth in Part A of this Prospectus. Each trust initially
consists of delivery statements relating to contracts to purchase securities
and, thereafter, will consist of a portfolio of securities (see "SCHEDULE OF
INVESTMENTS" appearing in Part A of this Prospectus). Except in specific
instances as noted in Part A of this Prospectus, the information contained in
this Part B shall apply to the Trust in its entirety.
Trusts consisting of a portfolio of U.S Treasury obligations ("U.S. TREASURY
OBLIGATIONS") shall be referred to herein as "U.S. Treasury Trusts." Trusts
primarily consisting of a portfolio of investment grade, corporate debt
obligations issued after July 18, 1984 ("CORPORATE BONDS") shall be referred to
herein as "Corporate Trusts." Collectively, the U.S. Treasury Trusts and the
Corporate Trusts shall be referred to herein as the "TRUSTS." 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 shall be referred to herein as the "OBLIGATIONS" or the "SECURITIES."
THE OBJECTIVE of the U.S. Treasury Trusts is to provide current interest
income consistent with preservation of capital and investment flexibility. The
objective of the Insured Corporate Trusts is to provide a high level of current
income consistent with preservation of capital provided primarily by a portfolio
of investment grade, corporate debt obligations issued after July 18, 1984. The
objective of the Investment Grade Corporate Trusts is to provide a high level of
current income through investing in a portfolio consisting primarily of
investment grade, corporate debt obligations issued after July 18, 1984.
DISTRIBUTIONS of interest received by a Trust will be made monthly,
quarterly or semi-annually, depending upon the Unitholder's selection. (See
"DISTRIBUTIONS TO UNITHOLDERS") Distribution of funds in the Principal Account,
if any, will ordinarily be made as set forth under "DISTRIBUTIONS TO
UNITHOLDERS."
FOR ESTIMATED LONG TERM RETURNS AND ESTIMATED CURRENT RETURNS to Unitholders
on the business day prior to the Initial Date of Deposit, see Part A of this
Prospectus and "ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN."
THE PUBLIC OFFERING PRICE per Unit of each Trust during the initial offering
period is based upon the pro rata share of the OFFERING prices of the Securities
in such Trust's portfolio plus a sales charge as set forth in Part A of this
Prospectus. The Secondary Market Public Offering Price per Unit for each Trust
is based upon the pro rata share of the sum of BID prices of the Securities in
such Trust plus the sales charges as set forth in
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>
Part A of this Prospectus. Accrued interest from the preceding Record Date to,
but not including, the settlement date (normally three business days after
purchase) is added to the Public Offering Price. The sales charge is reduced on
a graduated scale for sales involving at least the number of Units set forth in
Part A of this Prospectus. See "PUBLIC OFFERING PRICE."
A UNITHOLDER MAY REDEEM UNITS at the office of the Trustee at prices based
upon the BID prices of the Securities. The price received upon redemption may be
more or less than the amount paid by Unitholders, depending upon the value of
the Securities on the date of tender for redemption. (See "REDEMPTION.") The
Sponsor, although not required to do so, intends to make a secondary market for
the Units of certain of the Trusts at prices based upon the BID prices of the
Securities in the respective Trusts. (See "MARKET FOR UNITS.")
RISK FACTORS. An investment in a Trust should be made with an understanding
of the risks associated therewith, including, among other factors, the inability
of the issuer or an insurer (in the case of insured Corporate Bonds) to pay the
principal of or interest on a security when due, the general condition of the
relevant market, economic recession, volatile interest rates, early call
provisions and changes to the tax status of the Bonds. The value of the
underlying Securities will fluctuate inversely with changes in interest rates.
Although in recent years interest rates have been relatively stable, the
uncertain economic conditions of prior years, together with the monetary
policies and fiscal measures adopted in response to them, resulted in wide
fluctuations of interest rates and, thus, in the value of fixed rate debt
obligations. The Sponsor cannot predict the degree to which such fluctuations
will exist in the future. See Part A of this Prospectus and "RISK FACTORS."
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
NUVEEN UNIT TRUSTS...................................................................... 4
OBJECTIVE OF THE TRUSTS................................................................. 5
SUMMARY OF PORTFOLIOS................................................................... 5
RISK FACTORS............................................................................ 5
COMPOSITION OF TRUSTS................................................................... 10
INSURANCE ON THE CORPORATE BONDS........................................................ 12
PUBLIC OFFERING PRICE................................................................... 13
MARKET FOR UNITS........................................................................ 16
ACCRUED INTEREST........................................................................ 16
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN................................. 17
EVALUATION OF SECURITIES AT THE INITIAL DATE OF DEPOSIT................................. 18
TAX STATUS.............................................................................. 18
TRUST OPERATING EXPENSES................................................................ 22
DISTRIBUTIONS TO UNITHOLDERS............................................................ 23
ACCUMULATION PLAN....................................................................... 25
REPORTS TO UNITHOLDERS.................................................................. 25
UNIT VALUE AND EVALUATION............................................................... 26
DISTRIBUTIONS OF UNITS TO THE PUBLIC.................................................... 26
OWNERSHIP AND TRANSFER OF UNITS......................................................... 28
REDEMPTION.............................................................................. 29
PURCHASE OF UNITS BY THE SPONSOR........................................................ 30
REMOVAL OF SECURITIES FROM THE TRUSTS................................................... 30
INFORMATION ABOUT THE TRUSTEE........................................................... 31
INFORMATION ABOUT THE SPONSOR........................................................... 32
OTHER INFORMATION....................................................................... 32
LEGAL OPINION........................................................................... 33
AUDITORS................................................................................ 33
SUPPLEMENTAL INFORMATION................................................................ 33
</TABLE>
3
<PAGE>
NUVEEN UNIT TRUSTS
This Nuveen Unit Trust is one of a series of separate but similar investment
companies created by the Sponsor, each of which is designated by a different
Series number. The underlying unit investment trusts contained in this Series
are combined under one Trust Indenture and Agreement. Specific information
regarding each Trust is set forth in Part A of this Prospectus. The various
Nuveen Unit Trusts are collectively referred to herein as the "TRUSTS." This
Series was created under the laws of the State of New York pursuant to a Trust
Indenture and Agreement dated the Initial Date of Deposit (the "INDENTURE")
between John Nuveen & Co. Incorporated ("NUVEEN" or the "SPONSOR") and The Chase
Manhattan Bank (the "TRUSTEE").
The Sponsor has deposited with the Trustee delivery statements relating to
contracts for the purchase of the Securities together with funds represented by
an irrevocable letter of credit issued by a major commercial bank in the amount,
including accrued interest, required for their purchase (or the obligations
themselves). See "SCHEDULE OF INVESTMENTS" in Part A of this Prospectus, for a
description of the Securities deposited in a Trust. See "SUMMARY OF PORTFOLIO"
and "RISK FACTORS" for a discussion of zero coupon bonds and stripped
obligations included in the Trusts, if any. Some of the delivery statements may
relate to contracts for the purchase of "when issued" or other Securities with
delivery dates after the date of settlement for a purchase made on the Initial
Date of Deposit. See the "SCHEDULE OF INVESTMENTS" in Part A of this Prospectus
and "COMPOSITION OF TRUSTS." For a discussion of the Sponsor's obligations in
the event of a failure of any contract for the purchase of any of the 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 in the ratio set forth in "ESSENTIAL
INFORMATION" in Part A of this Prospectus. Units may only be sold in states in
which they are registered. To the extent that any Units of any Trust are
redeemed by the Trustee, the aggregate value of the Trust's assets will decrease
by the amount paid to the redeeming Unitholder, but the fractional undivided
interest of each unredeemed Unit in such Trust will increase proportionately.
The Sponsor will initially, and from time to time thereafter, hold Units in
connection with their offering.
Additional Units of each Trust may be issued from time to time following the
Initial Date of Deposit by depositing in such Trust additional Securities or
contracts for the purchase thereof together with irrevocable letters of credit
or cash. As additional Units are issued by a Trust as a result of the deposit of
additional Securities by the Sponsor, the aggregate value of the Securities in a
Trust will be increased and the fractional undivided interest in such Trust
represented by each Unit will be decreased. The Sponsor may continue to make
additional deposits of Securities into such Trust following the Initial Date of
Deposit, provided that such additional deposits will be in amounts which will
maintain 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 being deposited by the
Sponsor, the fractional undivided interest in a Trust represented by each
unredeemed Unit will increase or decrease accordingly, although the actual
interest in such Trust represented by such fraction will remain unchanged. Units
will remain outstanding until redeemed upon tender to the Trustee by
Unitholders, which may include the Sponsor, or until termination of the Trust
Agreement. 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.
4
<PAGE>
OBJECTIVE OF THE TRUSTS
U.S. TREASURY TRUSTS. The objective of the U.S. Treasury Trusts is to
provide current income consistent with preservation of capital and investment
flexibility. The U.S. Treasury Trusts seek to achieve this objective through
investment in a portfolio of U.S. Treasury Obligations with differing maturities
which are backed by the full faith and credit of the United States Government.
Interest income distributed by each U.S. Treasury Trust is exempt from state and
local personal income taxes in all states.
CORPORATE TRUSTS. The objective of the Insured Corporate Trusts is to
provide a high level of current income consistent with preservation of capital
provided primarily by a portfolio of investment grade, corporate debt
obligations issued after July 18, 1984. The objective of the Investment Grade
Corporate Trusts is to provide a high level of current income through investing
in a portfolio consisting primarily of investment grade, corporate debt
obligations issued after July 18, 1984. In addition, certain Corporate Trusts
may also contain U.S. Treasury obligations. The Corporate Trusts may be an
appropriate investment vehicle for investors who wish to participate in a
portfolio of taxable fixed income obligations issued by corporate obligors with
greater diversification than investors might be able to acquire individually.
Corporate Bonds of the type deposited in the Corporate Trusts often are not
available in small amounts. Diversification of the Corporate Trusts' assets will
not eliminate the risk of loss always inherent in the ownership of corporate
debt obligations.
Units of both the U.S. Treasury Trusts and the Corporate Trusts are
available to non-resident aliens and the income from the Trusts, provided
certain conditions are met, will be exempt from withholding for such foreign
investors. There is, of course, no guarantee that the Trusts' objectives will be
achieved.
SUMMARY OF PORTFOLIOS
In selecting U.S. Treasury Obligations for deposit in the U.S. Treasury
Trusts the following factors, among others, were considered by the Sponsor: (a)
the types of such obligations available; (b) the prices and yields of such
obligations relative to other comparable obligations, including the extent to
which such obligations are traded at a premium or at a discount from par; and
(c) the maturities of such obligations.
In selecting Corporate Bonds for deposit in the Corporate Trusts, the
following factors, among others, were considered by the Sponsor: (a) the prices
and yields of such Corporate Bonds relative to other Corporate Bonds of similar
quality and maturity, including the extent to which such Corporate Bonds are
traded at a premium or discount from par; (b) the present rating and credit
quality of the issuers of the Corporate Bonds and the potential improvement in
the credit quality of such issuers; (c) the diversification of the Corporate
Bonds as to location of issuer; (d) the income to the Unitholders of the
Corporate Trusts; (e) whether the Corporate Bonds were issued after July 18,
1984; (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.
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.
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
5
<PAGE>
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 (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
6
<PAGE>
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.
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
7
<PAGE>
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.
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
8
<PAGE>
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
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.
9
<PAGE>
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 jursidiction 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.
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.
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.
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
10
<PAGE>
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 "ESSENTIAL INFORMATION" in Part A of this
Prospectus. Those Securities in each Trust purchased with delivery dates after
the date of settlement for purchases made on the Initial Date of Deposit are so
noted in the "SCHEDULE OF INVESTMENTS" in Part A of this Prospectus.
LIMITED REPLACEMENT OF CERTAIN SECURITIES. Neither the Sponsor nor the
Trustee shall be liable in any way for any default, failure or defect in any
Security. In the event of a failure to deliver any Security that has been
purchased for a Trust under a contract, including those Securities purchased on
a when, as and if issued basis ("FAILED SECURITIES"), the Sponsor is authorized
under the Indenture to direct the Trustee to acquire other specified securities
("REPLACEMENT SECURITIES") to make up the original corpus of the Trust within 20
days after delivery of notice of the failed contract and the cost to the Trust
(exclusive of accrued interest) may not exceed the amount of funds reserved for
the purchase of the Failed Securities. The Replacement Securities must satisfy
the criteria previously described for the Trusts and shall be substantially
identical to the Failed Securities they replace. For U.S. Treasury Trusts, the
Replacement Securities must be substantially identical to the Failed Securities
they replace in terms of (i) the exemption from state and local taxation; (ii)
maturity; and (iii) cost to the U.S. Treasury Trust. For Corporate Trusts, the
Replacement Securities (i) must be payable in United States currency, (ii) must
be purchased at a price that results in a yield to maturity and a current return
at least equal to that of the Failed Securities as of the Initial Date of
Deposit, (iii) must satisfy any rating criteria for Securities originally
included in the Corporate Trust, (iv) must be insured prior to acquisition by
the Corporate Trust, (v) must be corporate bonds, debentures, notes or other
straight debt obligations (whether secured or unsecured and whether senior or
subordinated) without equity or other conversion features, with fixed maturity
dates substantially the same as those or the Failed Securities having no
warrants or subscription privileges attached; and (vi) be issued after July 18,
1984. In addition, for any Trust, Replacement Securities shall not be "when, as
and if issued" Securities. Whenever a Replacement Security has been acquired for
a Trust, the Trustee shall, within five days after the delivery thereof, mail or
deliver a notice of such acquisition to all Unitholders of the Trust involved.
Once the original corpus of the Trust is acquired, the Trustee will have no
power to vary the investment of the Trust.
To the extent Replacement Securities are not acquired, the Sponsor shall
refund to all Unitholders of the Trust involved the sales charge attributable to
such Failed Securities not replaced, and the principal and accrued interest
attributable to such Securities shall be distributed not more than 30 days after
the determination of such failure or at such earlier time as the Trustee in its
sole discretion deems to be in the interest of the Unitholders. Any such accrued
interest paid to Unitholders will be paid by the Sponsor. In the event Failed
Securities in a Trust could not be replaced, the Net Annual Interest Income per
Unit for such Trust would be reduced and the Estimated Current Return thereon
might be lowered.
SALE, MATURITY AND REDEMPTION OF SECURITIES. Certain of the Securities may
from time to time under certain circumstances be sold or will mature in
accordance with their terms. The proceeds from such events
11
<PAGE>
will be used to pay for Units redeemed or distributed to Unitholders and not
reinvested; accordingly, no assurance can be given that a Trust will retain for
any length of time its present size and composition.
LITIGATION. To the best knowledge of the Sponsor, there is no litigation
pending as of the Initial Date of Deposit in respect of any Securities which
might reasonably be expected to have a material adverse effect on the Trusts. It
is possible that after the Initial Date of Deposit, litigation may be initiated
with respect to Securities in any Trust. The Sponsor is unable to predict
whether any such litigation may be instituted, or if instituted, whether such
litigation might have a material adverse effect on the Trusts.
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 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.
Effective February 17, 1998, MBIA, Inc. acquired all of the outstanding
stock of Capital Markets Assurance Corporation ("CMAC"), a New York domiciled
financial guarantee insurance company, through a merger with its parent, CapMAC
Holdings, Inc. MBIA, Inc. then contributed the common stock of CMAC to MBIA.
Pursuant to a reinsurance agreement, CMAC has ceded all of its net insured risks
as well as its unearned premiums and contingency reserves to MBIA and MBIA has
reinsured CMAC's net outstanding exposure. MBIA, Inc. is not obligated to pay
the debts of or claims against CMAC.
As of December 31, 1996, MBIA had admitted assets of $4.4 billion (audited),
total liabilities of $3.0 billion (audited), and total capital and surplus of
$1.4 billion (audited) determined in accordance with statutory accounting
practices prescribed or permitted by insurance regulatory authorities. As of
September 30, 1997, MBIA had admitted assets of $5.1 billion (unaudited), total
liabilities of $3.4 billion (unaudited), and total capital and surplus of $1.7
billion (unaudited) determined in accordance with statutory accounting practices
prescribed or permitted by insurance regulatory authorities. Copies of MBIA
Corporation's financial statements prepared in accordance with statutory
accounting practices are available from MBIA Corporation. The address of MBIA
Corporation is 113 King Street, Armonk, New York 10504.
Moody's rates all bond issues insured by MBIA "Aaa" and short term loans
"MIG 1," both designated to be of the highest quality. Standard & Poor's, upon
request, rates all new issues insured by MBIA "AAA."
12
<PAGE>
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, accrued interest and the
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. See "UNIT VALUE AND EVALUATION."
The sales charge applicable to quantity purchases is reduced on a graduated
scale as set forth in Part A of this Prospectus. For purposes of calculating the
applicable sales charge, purchasers who have indicated their intent to purchase
a specified amount of Units of any Trust in the primary or secondary offering
period by executing and delivering a letter of intent to the Sponsor, which
letter of intent must be in a form acceptable to the Sponsor and shall have a
maximum duration of thirteen months, will be eligible to receive a reduced sales
charge according to the 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.
13
<PAGE>
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 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.
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.
14
<PAGE>
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 tables provided in Part A of
this Prospectus will apply on all applicable purchases of Nuveen investment
company securities on any one day by the same purchaser in the amounts stated,
and for this purpose purchases of this Series will be aggregated with concurrent
purchases of any other Series or of shares of any open-end management investment
company of which the Sponsor is principal underwriter and with respect to the
purchase of which a sales charge is imposed. Purchases by or for the account of
individuals and their spouses, parents, children, grandchildren, grandparents,
parents-in-laws, 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 at the Public Offering Price
without a sales charge by officers or directors and by bona fide, full-time
employees of Nuveen, Nuveen Advisory Corp., Nuveen Institutional Advisory Corp.
and The John Nuveen Company, including in each case these individuals and their
immediate family members (as defined above).
Units may be purchased in the primary market with a sales charge as provided
for "Wrap Accounts" as set forth in Part A of this Prospectus by (1) investors
who purchase Units through registered investment advisers, certified financial
planners and registered broker-dealers who in each case either charge periodic
fees for financial planning, investment advisory or asset management services,
or provide such services in connection with the establishment of an investment
account for which a comprehensive "wrap fee" charge is imposed; (2) bank trust
departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency, custodial or
similar capacity; (3) any person who for at least 90 days, has been an officer,
director or bona fide employee of any firm offering Units for sale to investors
or their immediate family members (as defined above); and, (4) officers and
directors of bank holding companies that make Units available directly or
through subsidiaries or bank affiliates (collectively, the "DISCOUNTED
PURCHASES"). In addition, such investors may purchase Units in the secondary
market at the Public Offering Price for non-breakpoint purchases minus the
concession the Sponsor typically allows to brokers and dealers for
non-breakpoint purchases. Notwithstanding anything to the contrary in this
Prospectus, investors who purchase Units as described in this paragraph will not
receive sales charge reductions for quantity purchases.
The initial or primary Public Offering Price of the Units in each Trust is
based upon a pro rata share of the offering prices per Unit of the Securities in
such Trust plus the applicable sales charge. The secondary market Public
Offering Price of each Trust is based upon a pro rata share of the bid prices
per Unit of the Securities in such Trust plus the applicable sales charge. The
offering prices of Securities in a Trust may be expected to average between 1/2%
to 2% more than the bid prices of such Securities. The difference between the
bid side evaluation and the offering side evaluation of the Securities in each
Trust on the business day prior to the Initial Date of Deposit is shown in the
discussion of each Trust portfolio.
Whether or not Units are being offered for sale, the Sponsor will determine
the aggregate value of each Trust as of 4:00 p.m. eastern time: (i) on each June
30 or December 31 (or, if such date is not a business day,
15
<PAGE>
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 to 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. 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 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
16
<PAGE>
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 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.
17
<PAGE>
A portion of the monies received by a Trust may be treated, in the first
year only, as a return of principal due to the inclusion in the Trust portfolio
of "when-issued" or other Securities having delivery dates after the date of
settlement for purchases made on the Initial Date of Deposit. A consequence of
this treatment is that in the computation of Estimated Current Return for the
first year, such monies are excluded from Net Annual Interest Income and treated
as an adjustment to the Public Offering Price. (See "Essential Information"
appearing in Part A of this Prospectus, "COMPOSITION OF TRUSTS" and "TAX
STATUS").
A comparison of estimated current returns with the returns on various other
taxable investments is one element to consider in making an investment decision.
The Sponsor may from time to time in its advertising and sales materials compare
the then current estimated returns on a Trust and returns over specified periods
on other similar Nuveen Trusts with returns on taxable investments such as
corporate or U.S. Government securities, bank CD's and money market accounts or
money market funds, each of which has investment characteristics that may differ
from those of the Trust. 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.
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 Trust was greater or less than the cost of such
Securities to the Sponsor was PROFIT OR LOSS to the Sponsor exclusive of any
underwriting profit. (See Part A of this Prospectus.) The Sponsor also may
realize FURTHER PROFIT OR SUSTAIN FURTHER LOSS as a result of fluctuations in
the Public Offering Price of the Units. Cash, if any, made available to the
Sponsor prior to the settlement date for a purchase of Units, or prior to the
acquisition of all Portfolio securities by a Trust, may be available for use in
the Sponsor's business, and may be of benefit to the Sponsor.
TAX STATUS
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, or payment
at maturity) or when the Unitholder redeems or sells his
18
<PAGE>
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 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 discounts.
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.
19
<PAGE>
Premium -- If a Unitholder's tax basis of his pro rata portion in any
Securities held by a Trust exceeds the amount payable by the issuer of the
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
Securities is less than the allocable portion of such Security's stated
redemption price at maturity (or, if issued with original issue discount, the
allocable portion of its "REVISED ISSUE PRICE"), such difference will constitute
market discount unless the amount of market discount is "DE MINIMIS" as
specified in the Code. Market discount accrues daily computed on a straight-line
basis, unless the Unitholder elects to calculate accrued market discount under a
constant-yield method. The market discount rules do not apply to Stripped
Treasury Securities because they are stripped debt instruments subject to
special original issue discount rules discussed above. Unitholders should
consult their own tax advisers regarding whether an election should be made and
as to the amount of market discount which accrues.
Accrued market discount is generally includable in taxable income to the
Unitholders as ordinary income for Federal tax purposes upon the receipt of
serial principal payments on the 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
20
<PAGE>
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. 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) is subject to a maximum marginal stated tax rate of either 28% or
20%, depending upon the holding periods of the capital assets. Capital gain or
loss is long-term if the holding period for the asset is more than one year, and
is short-term if the holding period for the asset is one year or less. The date
on which a Unit is acquired (i.e., the "trade date") is excluded for purposes of
determining the holding period of the Unit. Generally, capital gains realized
from assets held for more than one year but not more than 18 months are taxed at
a maximum marginal stated tax rate of 28% and capital gains realized from assets
(with certain exclusions) held for more than 18 months are taxed at a maximum
marginal stated tax rate of 20% (10% in the case of certain taxpayers in the
lowest tax bracket). Further, capital gains realized from assets held for one
year or less are taxed at the same rates as ordinary income. Legislation is
currently pending that provides the appropriate methodology that should be
applied in netting the realized capital gains and losses. Such legislation is
proposed to be effective retroactively for tax years ending after May 6, 1997.
It should be noted that legislative proposals are introduced from time to time
that affect tax rates and could affect relative differences at which ordinary
income and capital gains are taxed.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered into
after April 30, 1993. 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
21
<PAGE>
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, then 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 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 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.
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." 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
does, however, receive those fees as set forth in "EXPENSE INFORMATION" in Part
A of this Prospectus for regularly evaluating the Bonds and for maintaining
surveillance over the portfolio. (See "UNIT VALUE AND EVALUATION.")
22
<PAGE>
The Trustee receives for ordinary recurring services an annual fee for each
plan of distribution for each Trust as set forth in "EXPENSE INFORMATION"
appearing in Part A of this Prospectus. Each annual fee is per $1,000 principal
amount of the underlying Securities in a Trust for that portion of the Trust
that represents a particular plan of distribution. The Trustee's fee may be
periodically adjusted in response to fluctuations in short-term interest rates
(reflecting the cost to the Trustee of advancing funds to a Trust to meet
scheduled distributions) and may be further adjusted in accordance with the
cumulative percentage increase of the United States Department of Labor's
Consumer Price Index entitled "All Services Less Rent of Shelter" since the
establishment of the Trusts. The Trustee has the use of funds, if any, being
held in the Interest and Principal Accounts of each Trust for future
distributions, payment of expenses and redemptions. These Accounts are
non-interest bearing to Unitholders. Pursuant to normal banking procedures, the
Trustee benefits from the use of funds held therein. Part of the Trustee's
compensation for its services to the Trusts is expected to result from such use
of these funds.
Premiums for the policies of insurance obtained by the Sponsor or by the
Corporate Bond issuers with respect to the Corporate Bonds in the Insured
Corporate Trusts have been paid in full prior to the deposit of the Corporate
Bonds in the Corporate Trusts, and the value of such insurance has been included
in the evaluation of the Corporate Bonds in each Corporate Trust and accordingly
in the Public Offering Price of Units of each Corporate Trust. There are no
annual continuing premiums for such insurance.
All or a portion of the expenses incurred in establishing the Trusts,
including costs of preparing the registration statement, the trust indenture and
other closing documents, registering Units with the Securities and Exchange
Commission and states, the initial audit of each Trust portfolio, the initial
evaluation, legal fees, the initial fees and expenses of the Trustee and any
other non-material out-of-pocket expenses, will be amortized and paid by the
Trust over the lesser of 60 months or the life of the Trust. The following are
additional expenses of the Trusts and, when paid by or are owed to the Trustee,
are secured by a lien on the assets of the Trust or Trusts to which such
expenses are allocable: (1) the expenses and costs of any action undertaken by
the Trustee to protect the Trusts and the rights and interests of the
Unitholders; (2) all taxes and other governmental charges upon the Securities or
any part of the Trusts (no such taxes or charges are being levied or made or, to
the knowledge of the Sponsor, contemplated); (3) amounts payable to the Trustee
as fees for ordinary recurring services and for extraordinary non-recurring
services rendered pursuant to the Indenture, all disbursements and expenses
including counsel fees (including fees of counsel which the Trustee may retain)
sustained or incurred by the Trustee in connection therewith; and (4) any losses
or liabilities accruing to the Trustee without negligence, bad faith or willful
misconduct on its part. The Trustee is empowered to sell Securities in order to
pay these amounts if funds are not otherwise available in the applicable
Interest and Principal Accounts.
The Indenture requires each Trust to be audited on an annual basis at the
expense of the Trust by independent public accountants selected by the Sponsor.
The Trustee shall not be required, however, to cause such an audit to be
performed if its cost to a Trust shall exceed $.05 per Unit on an annual basis.
Unitholders of a Trust covered by an audit may obtain a copy of the audited
financial statements upon request.
DISTRIBUTIONS TO UNITHOLDERS
Interest received by the Trustee on the 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
23
<PAGE>
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 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 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
24
<PAGE>
these Securities acquire, in effect, discount obligations that are economically
identical to the "zero-coupon bonds" that have been issued by corporations. Zero
coupon bonds are debt obligations which do not make any periodic payments of
interest prior to maturity and accordingly are issued at a deep discount. Under
generally accepted accounting principles, a holder of a security purchased at a
discount normally must report as an item of income for financial accounting
purposes the portion of the discount attributable to the applicable reporting
period. The calculation of this attributable income would be made on the
"interest" method which generally will result in a lesser amount of includable
income in earlier periods and a corresponding larger amount in later periods.
For federal income tax purposes, the inclusion will be on a basis that reflects
the effective compounding of accrued but unpaid interest effectively represented
by the discount. Although this treatment is similar to the "interest" method
described above, the "interest" method may differ to the extent that generally
accepted accounting principles permit or require the inclusion of interest on
the basis of a compounding period other than the semi-annual period. See "TAX
STATUS."
ACCUMULATION PLAN
The Sponsor is also the principal underwriter of several open-end mutual
funds (the "ACCUMULATION FUNDS") into which Unitholders may choose to reinvest
Trust distributions. Unitholders may elect to reinvest principal distributions
or interest and principal distributions automatically, without any sales charge.
Each Accumulation Fund has investment objectives which differ in certain
respects from those of the Trusts and may invest in securities which would not
be eligible for deposit in the Trusts. Further information concerning the
Accumulation Plan and a list of Accumulation Funds is set forth in the
Information Supplement of this Prospectus, which may be obtained by contacting
the Trustee at the phone number listed on the back cover of this Prospectus.
Participants may at any time, by so notifying the Trustee in writing, elect
to change the Accumulation Fund into which their distributions are being
reinvested, to change from principal only reinvestment to reinvestment of both
principal and interest or vice versa, or to terminate their participation in the
Accumulation Plan altogether and receive future distributions on their Units in
cash. 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.
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
25
<PAGE>
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; (3) interest accrued thereon not subject to collection and
distribution and (4) amounts representing organizational expenses paid less
accrued organizational expenses of the Trust, LESS (1) amounts representing
taxes or governmental charges payable out of the Trust, (2) the accrued expenses
of the Trust and (3) 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 ($1,000 or 10
Units for Traditional and Roth IRA purchases and $500 or nearest whole number of
Units whose value is less than $500 for Education IRA purchases), whichever is
less. The 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.
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:
26
<PAGE>
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.
At the discretion of the Sponsor, volume incentives can be earned as a
marketing allowance by dealer firms who reach cumulative firm sales or sales
arrangement levels of a specified number of Units of an individual Trust during
the primary offering period as set forth in the table below. For firms that meet
the necessary volume level for a Trust, volume incentives may be given on all
trades involving that Trust originated from or by that firm during the primary
offering period.
Primary Market Volume Incentives
<TABLE>
<CAPTION>
DOLLAR-WEIGHTED PER TRUST SALES LEVEL
AVERAGE MATURITY DURING THE PRIMARY VOLUME INCENTIVE
OF TRUST OFFERING PERIOD PER UNIT
- ------------------------------- --------------------------- -------------------
<S> <C> <C>
Less than 6 years At least 5,000 Units $ 0.05
6 but less than 15 years At least 2,500 Units $ 0.10
15 years or more At least 2,500 Units $ 0.20
</TABLE>
In addition, a volume incentive of $2.50 per $1,000 of Units sold can be
earned by dealer firms as a marketing allowance for secondary market sales of at
least $1 million of Nuveen Unit Trust units per calendar quarter.
27
<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.
Registered investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for financial
planning, investment advisory or asset management services, or provide such
services in connection with the establishment of an investment account for which
a comprehensive "wrap fee" charge is imposed, and bank trust departments
investing funds over which they exercise exclusive discretionary investment
authority and that are held in a fiduciary, agency, custodial or similar
capacity, are not entitled to receive any dealer concession for any sales made
to investors which qualified as "Discounted Purchases" during the primary or
secondary market. (See "PUBLIC OFFERING PRICE.")
Certain commercial banks are making Units of the Trusts available to their
customers on an agency basis. A portion of the sales charge paid by these
customers is retained by or remitted to the banks in the amounts shown in the
above table. The Glass-Steagall Act prohibits banks from underwriting Trust
Units; the Act does, however, permit certain agency transactions and banking
regulators have not indicated that these particular agency transactions are not
permitted under the Act. In Texas and in certain other states, any bank making
Units available must be registered as a broker-dealer under state law.
OWNERSHIP AND TRANSFER OF UNITS
The ownership of Units is evidenced by 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 Unitholder will receive a Book Entry Position Confirmation reflecting
their ownership.
For Trusts allowing optional plans of distribution, Certificates for Units
will bear an appropriate notation of their face indicating which plan of
distribution has been selected. When a change is made, the existing Certificates
must be surrendered to the Trustee and new Certificates issued to reflect the
currently effective plan of distribution. There will be no charge for this
service. Holders of book entry Units can change their plan of distribution by
making a written request to the Trustee, which will issue a new Book Entry
Position Confirmation to reflect such change.
Units are transferable by making a written request to the Trustee and, in
the case of Units evidenced by Certificate(s), by presenting and surrendering
such Certificate(s) to the Trustee, at its address listed on the back cover of
this Part B of the Prospectus, properly endorsed or accompanied by a written
instrument or instruments of transfer. The Certificate(s) should be sent
registered or certified mail for the protection of the Unitholders. Each
Unitholder must sign such written request, and such Certificate(s) or transfer
instrument, exactly as his name appears on (a) the face of the Certificate(s)
representing the Units to be transferred, or (b) the Book Entry Position
Confirmation(s) relating to the Units to be transferred. Such signature(s) must
be guaranteed by a guarantor acceptable to the Trustee. In certain instances the
Trustee may require additional documents such as, but not limited to, trust
instruments, certificates of death, appointments as executor or administrator or
certificates of corporate authority. Mutilated Certificates must be surrendered
to the Trustee in order for a replacement Certificate to be issued. Although at
the date hereof no charge is made and none is contemplated, a Unitholder may be
required to pay $2.00 to the Trustee for each Certificate reissued or
28
<PAGE>
transfer of Units requested and to pay any governmental charge which may be
imposed in connection therewith.
REPLACEMENT OF LOST, STOLEN OR DESTROYED CERTIFICATES
To obtain a new Certificate replacing one that has been lost, stolen, or
destroyed, the Unitholder must furnish the Trustee with sufficient
indemnification and pay such expenses as the Trustee may incur. This
indemnification must be in the form of an Open Penalty Bond of Indemnification.
The premium for such an indemnity bond may vary, but currently amounts to 1% of
the market value of the Units represented by the Certificate. In the case
however, of a Trust as to which notice of termination has been given, the
premium currently amounts to 0.5% of the market value of the Units represented
by such Certificate.
REDEMPTION
Unitholders may redeem all or a portion of their Units by (1) making a
written request for such redemption (book entry Unitholders may use the
redemption form on the reverse side of their Book Entry Position Confirmation)
to the Trustee at its address listed on the back cover of this Part B of the
Prospectus (redemptions of 1,000 Units or more will require a signature
guarantee), (2) in the case of Units evidenced by a Certificate, by also
tendering such Certificate to the Trustee, duly endorsed or accompanied by
proper instruments of transfer with signatures guaranteed as explained above, or
provide satisfactory indemnity required in connection with lost, stolen or
destroyed Certificates and (3) payment of applicable governmental charges, if
any. Certificates should be sent only by registered or certified mail to
minimize the possibility of their being lost or stolen. (See "OWNERSHIP AND
TRANSFER OF UNITS.") No redemption fee will be charged. A Unitholder may
authorize the Trustee to honor telephone instructions for the redemption of
Units held in book entry form. Units represented by Certificates may not be
redeemed by telephone. The proceeds of Units redeemed by telephone will be sent
by check either to the Unitholder at the address specified on his account or to
a financial institution specified by the Unitholder for credit to the account of
the Unitholders. A Unitholder wishing to use this method of redemption must
complete a Telephone Redemption Authorization Form and furnish the Form to the
Trustee. Telephone Redemption Authorization Forms can be obtained from a
Unitholder's registered representative or by calling the Trustee. Once the
completed Form is on file, the Trustee will honor telephone redemption requests
by any authorized person. The time a telephone redemption request is received
determines the "date of tender" as discussed below. The redemption proceeds will
be mailed within three business days following the telephone redemption request.
Only Units held in the name of individuals may be redeemed by telephone;
accounts registered in broker name, or accounts of corporations or fiduciaries
(including among others, trustees, guardians, executors and administrators) may
not use the telephone redemption privilege.
On the third business day following the date of tender, the Unitholder will
be entitled to receive in cash for each Unit tendered an amount equal to the
Unit Value of such Trust determined by the Trustee, as of 4:00 p.m. eastern
time, or as of any earlier closing time on a day on which the Exchange is
scheduled in advance to close at such earlier time, on the date of tender as
defined hereafter, plus accrued interest to, but not including, the third
business day after the date of tender ("REDEMPTION PRICE"). The price received
upon redemption may be more or less than the amount paid by the Unitholder
depending on the value of the Securities on the date of tender. Unitholders
should check with the Trustee or their broker to determine the Redemption Price
before tendering Units.
The "DATE OF TENDER" is deemed to be the date on which the request for
redemption of Units is received in proper form by the Trustee, except that as
regards a redemption request received after 4:00 p.m. eastern time, or as of any
earlier closing time on a day on which the Exchange is scheduled in advance to
close at such earlier time, or on any day on which the Exchange is normally
closed, the date of tender is the next 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.
29
<PAGE>
Accrued interest paid on redemption shall be withdrawn from the Interest
Account of the appropriate Trust or, if the balance therein is insufficient,
from the Principal Account of such Trust. All other amounts paid on redemption
shall be withdrawn from the Principal Account. The Trustee is empowered to sell
underlying Securities of a Trust in order to make funds available for
redemption. (See "REMOVAL OF SECURITIES FROM THE TRUSTS.") Units so redeemed
shall be cancelled. To the extent that Securities are sold from the Trusts, the
size and diversity of such Trust will be reduced. Such sales may be required at
a time when Securities would not otherwise be sold and might result in lower
prices than might otherwise be realized.
The Redemption Price is determined on the basis of the BID prices of the
Securities in each Trust, while the initial Public Offering Price of Units will
be determined on the basis of the OFFERING prices of the Securities as of 4:00
p.m. eastern time on any day on which the Exchange is normally open for trading,
or as of any earlier closing time on a day on which the Exchange is scheduled in
advance to close at such earlier time, and such determination is made. As of any
given time, the difference between the bid and offering prices of such
Securities may be expected to average 1/2% to 2% of principal amount. In the
case of actively traded Securities, the difference may be as little as 1/4 to
1/2 of 1%, and in the case of inactively traded Securities such difference
usually will not exceed 3%.
The right of redemption may be suspended and payment postponed (1) for any
period in which the New York Stock Exchange is closed, other than customary
weekend and holiday closings or for any period during which the Securities and
Exchange Commission determines that trading on the New York Stock Exchange is
restricted, (2) for any period during which an emergency exists, as a result of
which disposal or evaluation of the Securities is not reasonably practicable, or
(3) for such other periods as the Securities and Exchange Commission may by
order permit.
Under regulations issued by the Internal Revenue Service, the Trustee will
be required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing his or her tax return. Under normal
circumstances the Trustee obtains the Unitholder's tax identification number
from the selling broker at the time the Certificate or Book Entry Return
Confirmation is issued, and this number is printed on the Certificate or Book
Entry Return Confirmation and on distribution statements. If a Unitholder's tax
identification number does not appear as described above, or if it is incorrect,
the Unitholder should contact the Trustee before redeeming Units to determine
what action, if any, is required to avoid this "back-up withholding."
PURCHASE OF UNITS BY THE SPONSOR
The Trustee will notify the Sponsor of any tender of Units for redemption.
If the Sponsor's bid in the secondary market at that time equals or exceeds the
Redemption Price it may purchase such Units by notifying the Trustee before the
close of business on the second succeeding business day and by making payment
therefor to the Unitholder not later than the day on which payment would
otherwise have been made by the Trustee. (See "REDEMPTION.") The Sponsor's
current practice is to bid at the Redemption Price in the secondary market.
Units held by the Sponsor may be tendered to the Trustee for redemption as any
other Units.
REMOVAL OF SECURITIES FROM THE TRUSTS
Securities will be removed from a Trust as they mature or are redeemed by
the issuers thereof. The Indenture also empowers the Trustee to sell Securities
for the purpose of redeeming Units tendered by any Unitholder, and for the
payment of expenses for which income may not be available. Under the Indenture,
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
30
<PAGE>
distributions to Unitholders of the sale of various Securities; (4) the effect
on principal amount of underlying Securities per Unit of the sale of various
Securities; (5) the financial condition of the issuers; and (6) the effect of
the sale of various Securities on the investment character of the Trust. Such
sales, if required, could result in the sale of Securities by the Trustee at
prices less than original cost to the Trust. To the extent Securities are sold,
the size and diversity of such Trust will be reduced.
In addition, the Sponsor is empowered to direct the Trustee to liquidate
Securities upon the happening of certain other events, such as default in the
payment of principal and/or interest, an action of the issuer that will
adversely affect its ability to continue payment of the principal of and
interest on its Securities, or an adverse change in market, revenue or credit
factors affecting the investment character of the Securities. If a default in
the payment of the principal of and/or interest on any of the Securities occurs,
and if the Sponsor fails to instruct the Trustee whether to sell or continue to
hold such Securities within 30 days after notification by the Trustee to the
Sponsor of such default, the Indenture provides that the Trustee shall liquidate
said Securities forthwith and shall not be liable for any loss so incurred. The
Sponsor may also direct the Trustee to liquidate Securities in a Trust if the
Securities in the Trust are the subject of an advanced refunding generally
considered to be when refunding bonds are issued and the proceeds thereof are
deposited in irrevocable trust to retire the refunded Securities on their
redemption date.
Except as stated in "COMPOSITION OF THE TRUST" regarding the deposit of
additional securities or the limited right of substitution of Replacement
Securities for Failed Securities, and except for refunding Securities that may
be exchanged for Securities under certain conditions specified in the Indenture,
the Indenture does not permit either the Sponsor or the Trustee to acquire or
deposit securities either in addition to, or in substitution for, any of the
Securities initially deposited in a Trust.
INFORMATION ABOUT THE TRUSTEE
The Trustee and its address are stated on the back cover of this Part B of
the Prospectus. The Trustee is subject to supervision and examination by the
Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and either the Comptroller of the Currency or state banking
authorities.
LIMITATIONS ON LIABILITIES OF SPONSOR AND TRUSTEE
The Sponsor and the Trustee shall be under no liability to Unitholders for
taking any action or for refraining from any action in good faith pursuant to
the Indenture, or for errors in judgment, but shall be liable only for their own
negligence, lack of good faith or willful misconduct. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the Trustee of
any of the Securities. In the event of the failure of the Sponsor to act under
the Indenture, the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Indenture or upon or in respect of any Trust which
the Trustee may be required to pay under any present or future law of the United
States of America or of any other taxing authority having jurisdiction. In
addition, the Indenture contains other customary provisions limiting the
liability of the Trustee.
SUCCESSOR TRUSTEES AND SPONSORS
The Trustee or any successor trustee may resign by executing an instrument
of resignation in writing and filing same with the Sponsor and mailing a copy of
a notice of resignation to all Unitholders then of 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
31
<PAGE>
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.
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
32
<PAGE>
in "COMPOSITION OF THE TRUSTS" regarding the creation of additional Units and
the limited right of substitution of Replacement Securities and except for the
substitution of refunding securities under certain circumstances. The Trustee
shall advise the Unitholders of any amendment promptly after execution thereof.
TERMINATION OF INDENTURE
Each Trust may be liquidated at any time by written consent of 100% of the
Unitholders or by the Trustee when the value of such Trust, as shown by any
evaluation, is less than 20% of the aggregate principal amount of Securities
deposited in a Trust during the initial offering period of such Trust and will
be liquidated by the Trustee in the event that Units not yet sold aggregating
more than 60% of the Units originally created are tendered for redemption by the
Sponsor thereby reducing the net worth of such Trust to less than 40% of the
principal amount of the Securities originally deposited in the portfolio. (See
"ESSENTIAL INFORMATION" appearing in Part A of this Prospectus.) The sale of
Securities from the Trusts upon termination may result in realization of a
lesser amount than might otherwise be realized if such sale were not required at
such time. For this reason, among others, the amount realized by a Unitholder
upon termination may be less than the principal amount of Securities originally
represented by the Units held by such Unitholder. The Indenture will terminate
upon the redemption, sale or other disposition of the last Securities held
thereunder, but in no event shall it continue beyond the end of the calendar
year preceding the 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 Initial Date
of Deposit included in Part A of this Prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report in
Part A of this Prospectus, and are included herein in reliance upon the
authority of said firm as experts in giving said report.
SUPPLEMENTAL INFORMATION
Upon written or telephonic request to the Trustee, investors will receive at
no cost to the investor supplemental information about their respective Trust,
which has been filed with the Securities and Exchange Commission and is intended
to supplement information contained in Part A and Part B of this Prospectus.
This supplement includes additional general information about the Sponsor and
the Trusts.
33
<PAGE>
[Logo]
Defined
NUVEEN FIXED INCOME
Portfolios
PROSPECTUS -- PART B
APRIL __, 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 U.S. TREASURY PORTFOLIO SERIES 7 (SHORT-TERM)
The Information Supplement provides additional information concerning the
structure and operations of a Nuveen Unit Trust not found in the prospectuses
for the Trusts. This Information Supplement is not a prospectus and does not
include all of the information that a prospective investor should consider
before investing in a Trust. This Information Supplement should be read in
conjunction with the prospectus for the Trust in which an investor is
considering investing ("PROSPECTUS"). Copies of the Prospectus can be obtained
by calling or writing the Trustee at 4 New York Plaza, New York, NY 10004-2413;
800-257-8787. This Information Supplement is dated _________, 1999. Capitalized
terms have been defined in the Prospectus.
TABLE OF CONTENTS
<TABLE>
<S> <C>
ACCUMULATION PLAN....................................................................... 2
INFORMATION ABOUT THE SPONSOR........................................................... 4
DESCRIPTION OF RATINGS.................................................................. 6
ESTIMATED CASH FLOWS.................................................................... 7
HOW TO CALCULATE YOUR ESTIMATED INCOME.................................................. 8
</TABLE>
S-1
<PAGE>
ACCUMULATION PLAN
The Sponsor, John Nuveen & Co. Incorporated, is also the principal
underwriter of the Accumulation Funds listed in the following table. Each of
these funds is an open-end, diversified management investment company into which
Unitholders may choose to reinvest Trust distributions automatically, without
any sales charge. Unitholders may reinvest both interest and principal
distributions or principal distributions only. Each Accumulation Fund has
investment objectives which differ in certain respects from those of the Trusts
and may invest in securities which would not be eligible for deposit in the
Trusts. The investment adviser to each Accumulation Fund is a wholly-owned
subsidiary of the Sponsor. Unitholders should contact their financial adviser or
the Sponsor to determine which of the Accumulation Funds they may reinvest into,
as reinvestment in certain of the Accumulation Funds may be restricted to
residents of a particular state or states. Unitholders may obtain a prospectus
for each Accumulation 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
S-2
<PAGE>
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.
S-3
<PAGE>
The Transfer Agent of the Accumulation Fund will mail to each participant in
the Accumulation Plan a quarterly statement containing a record of all
transactions involving purchases of Accumulation Fund shares (or fractions
thereof) with Trust interest distributions or as a result of reinvestment of
Accumulation Fund dividends. Any distribution of principal used to purchase
shares of an Accumulation Fund will be separately confirmed by the Transfer
Agent. Unitholders will also receive distribution statements from the Trustee
detailing the amounts transferred to their Accumulation Fund accounts.
Participants may at any time, by so notifying the Trustee in writing, elect
to change the Accumulation Fund into which their distributions are being
reinvested, 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
S-4
<PAGE>
Portfolio 3, Nuveen Select Maturities Municipal Fund, Nuveen Insured California
Premium Income Municipal Fund, Inc., Nuveen Arizona Premium Income Municipal
Fund, Inc., Nuveen Insured Florida Premium Income Municipal Fund, Nuveen
Michigan Premium Income Municipal Fund, Inc., Nuveen New Jersey Premium Income
Municipal Fund, Inc., Nuveen Insured New York Premium Income Municipal Fund,
Inc., Nuveen Premium Income Municipal Fund 4, Inc., Nuveen Pennsylvania Premium
Income Municipal Fund 2, Nuveen Maryland Premium Income Municipal Fund, Nuveen
Virginia Premium Income Municipal Fund, Nuveen Massachusetts Premium Income
Municipal Fund, Nuveen Insured California Premium Income Municipal Fund 2, Inc.,
Nuveen Washington Premium Income Municipal Fund, Nuveen Georgia Premium Income
Municipal Fund, Nuveen Missouri Premium Income Municipal Fund, Nuveen
Connecticut Premium Income Municipal Fund, Nuveen North Carolina Premium Income
Municipal Fund, Nuveen California Premium Income Municipal Fund, Nuveen Insured
Premium Income Municipal Fund 2, all registered closed-end management investment
companies. These registered open-end and closed-end investment companies
currently have approximately $35 billion in securities under management. 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.
S-5
<PAGE>
DESCRIPTION OF RATINGS
STANDARD & POOR'S CORPORATION;. A description of the applicable Standard &
Poor's Corporation rating symbols and their meanings follows:
A Standard & Poor's rating is a current assessment of the creditworthiness
of an obligor with respect to a specific debt obligation. This assessment may
take into consideration obligors such as guarantors, insurers or lessees.
The rating is not a recommendation to purchase, sell or hold a security,
inasmuch as it does not comment as to market price or suitability for a
particular investor.
The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. Standard
& Poor's does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in, or unavailability of, such
information, or for other circumstances.
The ratings are based, in varying degrees, on the following considerations:
I. Likelihood of default--capacity and willingness of the obligor as
to the timely payment of interest and repayment of principal in accordance
with the terms of the obligation;
II. Nature of and provisions of the obligation;
III. Protection afforded by, and relative position of, the obligation
in the event of bankruptcy, reorganization or other arrangements under the
laws of bankruptcy and other laws affecting creditors' rights.
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.
AA--Bonds rated AA have a very strong capacity to pay interest and repay
principal, and differ from the highest rated issues only in small degree.
A--Bonds rated A have a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in the higher rated categories.
PLUS (+) OR MINUS (-): The ratings from "AA" to "BB" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
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.
S-6
<PAGE>
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 U.S. TREASURY PORTFOLIO 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.
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.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
MONTHLY
Total
Principal
& Interest
Dates Payment
- --------------------------------------------------------------------------------------------
[TO COME]
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
QUARTERLY
Total
Principal
& Interest
Dates Payment
- --------------------------------------------------------------------------------------------
</TABLE>
S-7
<PAGE>
<TABLE>
<S> <C>
[TO COME]
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SEMI-ANNUAL
Total
Principal
& Interest
Dates Payment
- --------------------------------------------------------------------------------------------
[TO COME]
</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 U.S. TREASURY PORTFOLIO, SERIES 7 (SHORT-TERM)
$10,000 DIVIDED BY $ =
Investment Offering price and # of units purchased
(as of ) accrued interest
X $ = $
# of units purchased Annual income per unit annual income
(monthly plan)
</TABLE>
S-8
<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:
INSURER/POLICY NO. AMOUNT
Reliance Insurance Company $26,000,000
B 262 6895
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
The following exhibits
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 (to be supplied by amendment).
1.2* Copy of Certificate of Incorporation, as amended, of John Nuveen & Co.
Incorporated, Depositor.
1.3** Copy of amendment of Certificate of Incorporation changing name of
Depositor
- --------------------
* Incorporated by reference to Form N-8B-2 (File No. 811-1547) filed on
behalf of Nuveen Tax-Free Unit Trust, Series 16.
** Incorporated by reference to Form N-8B-2 (File No. 811-2198) filed on
behalf of Nuveen Tax-Free Unit Trust, Series 37.
S-1
<PAGE>
to John Nuveen & Co. Incorporated.
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1(a) and
incorporated herein by reference).
3.1 Opinion of counsel as to legality of securities being registered (to be
supplied by amendment).
3.2 Opinion of counsel as to Federal income tax status of securities being
registered (to be supplied by amendment).
3.3 Opinion of counsel as to advancement of funds by Trustee (to be supplied
by amendment).
3.4 Opinion of counsel as to New York income tax status of Securities being
registered (to be supplied by amendment).
4.1 Consent of Standard & Poor's Corporation (to be supplied by amendment).
4.2 Consent of Kenny S & P Evaluation Services (to be supplied by
amendment).
4.4 Consent of Arthur Andersen LLP (to be supplied by amendment).
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).
C. Explanatory Note
This 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-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Nuveen Unit Trusts, Series 41 has duly caused this Registration Statement to
be signed on its behalf by the undersigned thereunto duly authorized in the
City of Chicago and State of Illinois on the 6th day of April, 1999.
NUVEEN UNIT TRUSTS, SERIES 39
(Registrant)
By JOHN NUVEEN & CO. INCORPORATED
(Depositor)
By Thomas C. Muntz
------------------------------------
Vice President
Attest Karen L. Healy
--------------------------------
Assistant Secretary
S-3
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
and on the date indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE** DATE
<S> <C> <C>
Timothy R. Schwertfeger Chairman, Board of Directors )
Chief Executive Officer )
and Director )
)
)
Larry W. Martin
------------------
Larry W. Martin
Attorney-in-Fact**
)
John P. Amboian Chief Financial Officer and ) April 6, 1999
Executive Vice President )
)
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 6 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-4
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The consent of Arthur Andersen LLP to the use of its report and to the
reference to such firm in the Prospectus included in this Registration
Statement will be filed 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 this Registration Statement will be contained in its opinions to
be filed as Exhibits 3.1 and 3.2 to the Registration Statement.
CONSENT OF STANDARD & POOR'S, 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 this Registration Statement will be filed as Exhibit
4.1 to the Registration Statement.
CONSENT OF KENNY S&P EVALUATION SERVICES
The consent of Kenny S&P Evaluation Services to the use of its name in the
Prospectus included in this Registration Statement will be filed as Exhibit
4.2 to the Registration Statement.
CONSENT OF CARTER, LEDYARD & MILBURN
The consent of Carter, Ledyard & Milburn to the use of its name in the
Prospectus included in this Registration Statement will be filed as Exhibit
3.4 to the Registration Statement.
S-5
<PAGE>
MEMORANDUM
Re: Nuveen Unit Trusts, Series 41
The list of securities comprising each trust of the fund, the evaluation,
record and distribution dates and other changes pertaining specifically to
the new series, such as size and number of units of the trusts in the fund
and the statement of condition of the new fund will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
Form N-8A and Form N-8B-2 were filed in respect of Nuveen Unit Trusts, Series
1 (File No. 811-08103).
1933 ACT
THE INDENTURE
The form of the proposed Trust Indenture and Agreement is expected to be in
all respects consistent with the form of Trust Indenture and Agreement dated
May 29, 1997 relative to Nuveen Unit Trusts, Series 1.
Chicago, Illinois
April 6, 1999
S-6
