DEFINED ASSET FUNDS-REGISTERED TRADEMARK-
--------------------------------
--------------------------------
<TABLE>
<S> <C>
MUNICIPAL INVESTMENT TRUST FUND
INVESTMENT GRADE PORTFOLIO--11
(BBB QUALITY OR BETTER)
LONG-INTERMEDIATE TERM SERIES
(A UNIT INVESTMENT TRUST)
- PORTFOLIO OF LONG-INTERMEDIATE TERM MUNICIPAL
BONDS
- DESIGNED FOR INCOME FREE FROM REGULAR FEDERAL
INCOME TAX
- INCOME DISTRIBUTIONS TWICE A YEAR
- AMT BONDS
SPONSORS: ---------------------------------------------
Merrill Lynch, The Securities and Exchange Commission has not approved or
Pierce, Fenner & Smith Incorporated disapproved these Securities or passed upon the adequacy of
Salomon Smith Barney Inc. this prospectus. Any representation to the contrary is a
PaineWebber Incorporated criminal offense.
Dean Witter Reynolds Inc. Prospectus dated August 2, 2000.
</TABLE>
--------------------------------------------------------------------------------
Defined Asset Funds--Registered Trademark--
Defined Asset Funds-Registered Trademark- is America's oldest and largest family
of unit investment trusts, with over $160 billion sponsored over the last 28
years. Defined Asset Funds has been a leader in unit investment trust research
and product innovation. Our family of Funds helps investors work toward their
financial goals with a full range of quality investments, including municipal,
corporate and government bond portfolios, as well as domestic and international
equity portfolios.
Defined Asset Funds offer a number of advantages:
- Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
- Preselected Portfolios: We choose the stocks and bonds in advance, so you
know what you're investing in.
- Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
- Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.
THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF THE EVALUATION DATE, MARCH
31, 2000.
<TABLE>
<S> <C>
CONTENTS
PAGE
---------
Risk/Return Summary and Portfolio...... 3
What You Can Expect From Your
Investment........................... 8
Income Twice A Year.................. 8
Return Figures....................... 8
Records and Reports.................. 8
The Risks You Face..................... 9
Ratings Risk......................... 9
Interest Rate Risk................... 9
Call Risk............................ 9
Reduced Diversification Risk......... 10
Liquidity Risk....................... 10
Bond Quality Risk.................... 10
Insurance Related Risk............... 10
Concentration Risk................... 10
Litigation and Legislation Risks..... 10
Selling or Exchanging Units............ 10
Sponsors' Secondary Market........... 11
Selling Units to the Trustee......... 11
Exchange Option...................... 12
How The Fund Works..................... 12
Pricing.............................. 12
Evaluations.......................... 12
Income............................... 13
Expenses............................. 13
Portfolio Changes.................... 14
Fund Termination..................... 14
Certificates......................... 14
Trust Indenture...................... 15
Legal Opinion........................ 15
Auditors............................. 15
Sponsors............................. 16
Trustee.............................. 16
The Credit Consultant................ 16
Underwriters' and Sponsors'
Profits............................ 16
Public Distribution.................. 17
Code of Ethics....................... 17
Year 2000 Issues..................... 17
Taxes.................................. 17
Supplemental Information............... 18
Financial Statements................... D-1
</TABLE>
2
<PAGE>
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RISK/RETURN SUMMARY
<TABLE>
<C> <S>
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is
exempt from regular federal income taxes
by investing in a fixed portfolio
consisting primarily of municipal revenue
bonds with an estimated average life of
13 years.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued
by states, municipalities and public
authorities to finance the cost of
buying, building or improving various
projects intended to generate revenue,
such as airports, health care facilities,
housing and municipal electric, water and
sewer utilities. Generally, payments on
these bonds depend solely on the revenues
generated by the projects, excise taxes
or state appropriations, and are not
backed by the government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 13
long-intermediate term tax-exempt
municipal bonds, and some short-term
bonds reserved to pay the deferred sales
charge, with a current aggregate face
amount of $9,845,000.
- The Fund is a unit investment trust which
means that, unlike a mutual fund, the
Fund's portfolio is not managed.
- The bonds in the Fund were selected by
the agent for the Sponsors with the help
of Fitch IBCA, Inc., the Credit
Consultant, which reviewed the bonds
proposed by the agent for the Sponsors.
When initially deposited in the Fund,
each bond was considered to be investment
grade quality by Fitch or have, in the
opinion of Agent for the Sponsors,
comparable credit characteristics to
investment grade bonds. In some cases,
Standard & Poor's and/or Moody's rated
the bonds as investment grade.
- Fitch's opinions regarding investment
grade characteristics are based
exclusively on publicly available
information provided to it by the Agent
for the Sponsors and other information
already in Fitch's possession. Fitch will
use its professional expertise to
evaluate the information and prepare its
opinions. The opinion of the Agent for
the Sponsors is based both on publicly
available information provided to it by
the bond's issuer, underwriter and/or
placement agent and other information
already in its possession as well as
information gathered during on-site
visits and through private meetings with
the issuer and others.
- Fitch as Credit Consultant has an ongoing
responsibility to monitor the bonds and
to inform the Agent for the Sponsors if
in Fitch's opinion any bond no longer has
investment grade characteristics. If the
Credit Consultant does not believe it has
enough information to continue to monitor
a bond, it may withdraw its opinion as to
the investment grade quality of the bond
unless the agent for the Sponsors
provides adequate information about the
bond.
- Many of the bonds can be called at a
premium declining over time to par value.
Some bonds may be called earlier at par
for extraordinary reasons.
- 36% of the bonds are backed by bank
letters of credit.
- 10% of the bonds are insured by insurance
companies.
Letters of credit and insurance guarantee
timely payments of principal and interest
on the bonds (but not Fund units or the
market value of the bonds before they
mature).
The Portfolio consists of municipal bonds
of the following types:
</TABLE>
<TABLE>
- General Obligation 11%
<C> <S>
- Hospitals/Health Care 14%
- Housing 6%
- Industrial Development Revenue 36%
- Lease Rental 7%
- Municipal Electric Utility 1%
- Natural Resources 11%
- Special Tax 10%
- University/College 4%
</TABLE>
3
<PAGE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- The Portfolio contains bonds rated BBB
and Bbb, which is the lowest "investment
grade" rating assigned by the rating
agencies as well as bonds which are not
rated. These bonds may have speculative
characteristics and changes in economic
conditions or other circumstances are
more likely to lead to a weakened
capacity to make principal and interest
payment on these bonds than is the case
with higher rated securities.
- The opinions provided to the Agent for
the Sponsors by the Credit Consultant on
unrated bonds will not be traditional
ratings because:
-- they will generally not be based on
the level of information or access to
officials generally utilized in
connection with a traditional credit
rating;
-- they are likely to be given on an
expedited basis; and
-- the opinion will generally not be
based on formal procedures normally
associated with traditional credit
ratings, such as the use of a rating
committee.
Therefore, the Credit Consultant's
opinions on credit quality are likely to
have less certainty than traditional
credit ratings.
- The Credit Consultant will render an
opinion only when in the judgement of its
analysts it has sufficient information to
determine whether a bond has investment
grade credit characteristics.
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
industrial development revenue bonds,
adverse developments in this sector may
affect the value of your Units.
- Assuming no changes in interest rates,
when you sell your units, they will
generally be worth less than your cost
because your cost included a sales fee.
- The Fund will receive early returns of
principal if bonds are called or sold
before they mature. If this happens your
income will decline and you may not be
able to reinvest the money you receive at
as high a yield or as long a maturity.
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want regular income free from
regular federal income tax. You will
benefit from a professionally selected
and supervised portfolio whose risk is
reduced by investing in bonds of several
different issuers.
The Fund is NOT appropriate for you if
you want a speculative investment that
changes to take advantage of market
movements, if you do not want a
tax-advantaged investment, if you are
subject to AMT or if you cannot tolerate
any risk.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
WHAT YOU MAY EXPECT
Regular Semi-Annual Income per
1,000 units
(each May and November): $25.85
Annual Income per 1,000 units: $51.70
RECORD DAY: 10th day of each
May and November
</TABLE>
<TABLE>
<C> <S>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses
you may pay, directly or indirectly, when
you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of $1,000
invested) 2.75%
You will pay an up-front sales fee of
1.657%, as well as a total deferred sales
fee of $8.74 per 1,000 units (paid in
quarterly installments August, November,
February and May through May, 2001).
Employees of some of the Sponsors and
their affiliates may be charged a reduced
sales fee of no less than $5.00 per 1,000
Units.
</TABLE>
4
<PAGE>
<TABLE>
<C> <S>
The maximum sales fee is reduced if you
invest at least $100,000, as follows:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
Less than $100,000 2.75%
$100,000 to $249,999 2.50%
$250,000 to $499,999 2.25%
$500,000 to $999,999 2.00%
$1,000,000 and over 1.75%
Maximum Exchange Fee 1.75%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$ 0.63
Trustee's Fee
$ 0.60
Portfolio Supervision,
Bookkeeping,
Administrative
(including updating
expenses) and Credit
Consultant's Fees
$ 0.12
Evaluator's Fee
$ 0.21
Other Operating Expenses
------
$ 1.56
TOTAL
</TABLE>
The Sponsor historically paid updating expenses.
<TABLE>
<C> <S>
7. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not
managed and bonds are not sold because of
market changes. Rather, experienced
Defined Asset Funds financial analysts
regularly review the bonds in the Fund.
The Fund may sell a bond if certain
adverse credit or other conditions exist.
8. HOW DO I BUY UNITS?
You can buy units from any of the
Sponsors and other broker-dealers. The
Sponsors are listed later in this
prospectus. Some banks may offer units
for sale through special arrangements
with the Sponsors, although certain legal
restrictions may apply.
The minimum investment is $250.
UNIT PRICE PER 1,000 UNITS $934.07
(as of March 31, 200)
Unit price is based on the net asset
value of the Fund plus the up-front sales
fee. An amount equal to any principal
cash, as well as net accrued but
undistributed interest on the unit, is
added to the unit price. Unit price also
includes the estimated organization costs
shown above, to which no sales fee has
been applied. An independent evaluator
prices the bonds at 3:30 p.m. Eastern
time every business day. Unit price
changes every day with changes in the
prices of the bonds in the Fund.
9. HOW DO I SELL UNITS?
You may sell your units at any time to
any
Sponsor or the Trustee for the net asset
value determined at the close of business
on
the date of sale, less any remaining
deferred
sales fee. You will not pay any other fee
when you sell your units.
10. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income twice a year. In the
opinion of bond counsel when each bond
was issued, interest on the bonds in this
Fund is generally 100% exempt from
regular federal income tax. However,
interest on approximately 40% of the
bonds will be a preference item for
alternative minimum tax. A portion of the
income may also be exempt from state and
local personal income taxes, depending on
where you live.
You will also receive principal payments
if bonds are sold or called or mature,
when the cash available is more than
$10.00 per 1,000 units. You will be
subject to tax on any gain realized by
the Fund on the disposition of bonds.
</TABLE>
5
<PAGE>
<TABLE>
<C> <S>
11. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash
unless you choose to compound your income
by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation
Program, Inc. This program is an open-end
mutual fund with a comparable investment
objective. Income from this program will
generally be subject to state and local
income taxes. FOR MORE COMPLETE
INFORMATION ABOUT THE PROGRAM, INCLUDING
CHARGES AND FEES, ASK THE TRUSTEE FOR THE
PROGRAM'S PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST. THE TRUSTEE MUST
RECEIVE YOUR WRITTEN ELECTION TO REINVEST
AT LEAST 10 DAYS BEFORE THE RECORD DAY OF
AN INCOME PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for
units of certain other Defined Asset
Funds. You may also exchange into this
Fund from certain other funds. We charge
a reduced sales fee on exchanges.
</TABLE>
6
<PAGE>
--------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
<TABLE>
EFFECTIVE
TAXABLE INCOME 2000* % TAX TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN BRACKET 3% 3.5% 4% 4.5% 5% 5.5% 6%
IS EQUIVALENT TO A TAXABLE YIELD OF
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------
$ 0- 26,250 $ 0- 43,850 15.00 3.53 4.12 4.71 5.29 5.88 6.47 7.06
---------------------------------------------------------------------------------------------------------------------------
$ 26,251- 63,550 $ 43,851-105,950 28.00 4.17 4.86 5.56 6.25 6.94 7.64 8.33
---------------------------------------------------------------------------------------------------------------------------
$ 63,551-132,600 $105,951-161,450 31.00 4.35 5.07 5.80 6.52 7.25 7.97 8.70
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$132,601-288,350 $161,451-288,350 36.00 4.69 5.47 6.25 7.03 7.81 8.59 9.38
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OVER $288,350 OVER $288,350 39.60 4.97 5.79 6.62 7.45 8.28 9.11 9.93
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
<S> <C>
TAXABLE INCOME 20
SINGLE RETURN 6.5%
IS
EQUIVALENT
TO A
TAXABLE
YIELD OF
-----------------
$ 0- 26,250 7.65
-----------------
$ 26,251- 63,550 9.03
-----------------
$ 63,551-132,600 9.42
--------
-----------------
$132,601-288,350 10.16
--------
-----------------
OVER $288,350 10.76
--------
-----------------
</TABLE>
To compare the yield of a taxable security with the yield of a federally
tax-free security, find your taxable income and read across. The table
incorporates 2000 federal income tax rates and assumes that all income would
otherwise be taxed at a U.S. investor's highest tax rate. Yield figures are for
example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase-out of
exemptions, itemized deductions, the possible partial disallowance of deductions
or state and local taxation. Consequently, investors are urged to consult their
own tax advisers in this regard.
MUNICIPAL BONDS AND THE ALTERNATIVE MINIMUM TAX
<TABLE>
INCOME+ MAXIMUM "PREFERENCE" INCOME
WITHOUT TRIGGERING AMT
(STATE INCOME TAX RATES)
SINGLE ++ JOINT ++ 0% 7% 11%
<S> <C> <C> <C> <C>
----------------------------------------------------------
$50,000 $20,000 $15,000 $13,000
----------------------------------------------------------
$30,000 $19,000 $16,000 $14,000
----------------------------------------------------------
$100,000 $24,000 $15,000 $11,000
----------------------------------------------------------
$55,000 $21,000 $16,000 $13,000
----------------------------------------------------------
$225,000 $30,000 $12,000 $ 3,000
----------------------------------------------------------
$205,000 $30,000 $14,000 $ 6,000
----------------------------------------------------------
</TABLE>
NOTES:
+ Regular taxable income plus state income taxes
and personal exemptions.
++ Assuming no dependents.
Under federal tax law, interest income on certain municipal bonds, although
exempt from regular income tax, is treated as a "preference" item for purposes
of AMT. The table above shows amounts of such municipal bond "preference"
interest income, assuming no other "preference" or similar items apply, that
individual taxpayers could receive in 2000 without becoming subject to the AMT.
The table gives information for single and joint returns of U.S. individuals
having no dependents. The table provides three income levels and three
hypothetical state income tax rates. The table further assumes that the stated
amount of municipal bond "preference" interest income is subject to state income
taxes.
7
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
INCOME TWICE A YEAR
The Fund will pay you regular income twice a year. Your income may vary because
of:
- elimination of one or more bonds from the Fund's portfolio because of calls,
redemptions or sales;
- a change in the Fund's expenses; or
- the failure by a bond's issuer to pay interest.
Changes in interest rates generally will not affect your income because the
portfolio is fixed.
Along with your income, you will receive your share of any available bond
principal.
RETURN FIGURES
We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.
ESTIMATED CURRENT RETURN equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):
<TABLE>
<S> <C> <C>
Estimated Annual Estimated
Interest Income - Annual Expenses
-------------------------------------
Unit Price
</TABLE>
ESTIMATED LONG TERM RETURN is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.
Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.
These return quotations are designed to be comparative rather than predictive.
RECORDS AND REPORTS
You will receive:
- a statement of income payments twice a year;
- a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
- an annual report on Fund activity; and
- annual tax information. THIS WILL ALSO BE SENT TO THE IRS. YOU MUST REPORT THE
AMOUNT OF TAX-EXEMPT INTEREST RECEIVED DURING THE YEAR.
You may request:
- copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
- audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
8
<PAGE>
THE RISKS YOU FACE
RATINGS RISK
The Portfolio contains bonds rated in the BBB and Bbb category, which is the
lowest "investment grade" rating assigned by the rating agencies. The Portfolio
also contains bonds which are not rated but which have in the opinion of the
Credit Consultant, comparable credit characteristics to bonds rated investment
grade. These bonds may have speculative characteristics and changes in economic
conditions or other circumstances are more likely to lead to a weakened capacity
to make principal and interest payments on these bonds than is the case with
higher rated bonds.
Subsequent to the initial date of deposit, a bond or other obligation of the
issuer or guarantor or bank or other entity issuing a letter of credit related
thereto may cease to be rated, its rating may be reduced or the credit
assessment of the Credit Consultant may change. None of these events requires an
elimination of that bond from the Portfolio, but the lowered rating or changed
credit assessment may be considered in the Sponsors' determination to direct the
disposal of the bond.
The opinions provided to the Agent for the Sponsors by the Credit Consultant on
unrated bonds will not be traditional ratings because:
- they will generally not be based on the level of information or access to
public officials generally utilized in connection with a traditional credit
rating;
- they are likely to be given on an expedited basis; and
- they will generally not be based on formal procedures normally associated
with traditional credit ratings, such as the use of a rating committee.
Therefore, the Credit Consultant's opinions on credit quality are likely to have
less certainty than traditional credit ratings. However, the Credit Consultant
will render an opinion only when in the judgement of its analysts it has
sufficient information to determine whether a bond has investment grade credit
characteristics.
INTEREST RATE RISK
Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, bonds with longer maturities will
change in value more than bonds with shorter maturities. Bonds in the Fund are
more likely to be called when interest rates decline. This would result in early
returns of principal to you and may result in early termination of the Fund. Of
course, we cannot predict how interest rates may change.
CALL RISK
Many bonds can be prepaid or "called" by the issuer before their stated
maturity. For example, some bonds may be required to be called pursuant to
mandatory sinking fund provisions.
Also, an issuer might call its bonds during periods of falling interest rates,
if the issuer's bonds have a coupon higher than current market rates.
An issuer might call its bonds in extraordinary cases, including if:
- it no longer needs the money for the original purpose;
- the project is condemned or sold;
- the project is destroyed and insurance proceeds are used to redeem the
bonds;
- any related credit support expires and is not replaced; or
- interest on the bonds become taxable.
9
<PAGE>
If the bonds are called, your income will decline and you may not be able to
reinvest the money you receive at as high a yield or as long a maturity. An
early call at par of a premium bond will reduce your return.
REDUCED DIVERSIFICATION RISK
If many investors sell their units, the Fund will have to sell bonds. This could
reduce the diversification of your investment and increase your share of Fund
expenses.
LIQUIDITY RISK
Debt rated below investment grade or having similar credit characteristics also
tends to be more thinly traded than investment-grade debt and held primarily by
institutions, and this lack of liquidity can negatively affect the value of the
debt.
The bonds will generally trade in the over-the-counter market. We cannot assure
you that a liquid trading market will exist, especially since current law may
restrict the Fund from selling bonds to any Sponsor. The value of the bonds, and
of your investment, may be reduced if trading in bonds is limited or absent.
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.
INSURANCE RELATED RISK
Some bonds are backed by insurance companies (as shown under Defined Portfolio).
Insurance policies generally make payments only according to a bond's original
payment schedule and do not make early payments when a bond defaults or becomes
taxable. Although the federal government does not regulate the insurance
business, various state laws and federal initiatives and tax law changes could
significantly affect the insurance business. The claims-paying ability of the
insurance companies is generally rated AAA by Standard & Poor's or another
nationally recognized rating organization. The insurance company ratings are
subject to change at any time at the discretion of the rating agencies.
CONCENTRATION RISK
Here is what you should know about the Fund's concentration in industrial
development revenue bonds (IDRs). IDRs are issued to finance various privately
operated projects such as pollution control and manufacturing facilities.
Payment for these bonds depends on:
- creditworthiness of the corporate operator of the project being financed;
- economic factors relating to the particular industry; and,
- in some cases, creditworthiness of an affiliated or third-party guarantor.
LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
Future tax legislation could affect the value of the portfolio by:
- limiting real property taxes,
- reducing tax rates,
- imposing a flat or other form of tax, or
- exempting investment income from tax.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:
10
<PAGE>
- ADDING the value of the bonds, net accrued interest, cash and any other Fund
assets;
- SUBTRACTING accrued but unpaid Fund expenses, unreimbursed Trustee advances,
cash held to buy back units or for distribution to investors and any other
Fund liabilities; and
- DIVIDING the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.
If you sell your units before the final deferred sales fee installment, the
amount of any remaining installments will be deducted from your proceeds.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge other than any remaining deferred sales charge.
We may resell the units to other buyers or to the Trustee. You should consult
your financial professional for current market prices to determine if other
broker-dealers or banks are offering higher prices.
We have maintained a secondary market continuously for over 28 years, but we
could discontinue it without prior notice for any business reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold Unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional documents are
needed such as a trust document, certificate of corporate authority, certificate
of death or appointment as executor, administrator or guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.
If you acquire 25% or more of the outstanding units of the Fund and you sell
units with a value exceeding $250,000, the Trustee may choose to pay you "in
kind" by distributing bonds and cash with a total value equal to the price of
those units. The Trustee will try to distribute bonds in the portfolio pro rata,
but it reserves the right to distribute only one or a few bonds. The Trustee
will act as your agent
11
<PAGE>
in an in kind distribution and will either hold the bonds for your account or
sell them as you instruct. You must pay any transaction costs as well as
transfer and ongoing custodial fees on sales of bonds distributed in kind.
There could be a delay in paying you for your units:
- if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
- if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
bonds not reasonably practicable; and
- for any other period permitted by SEC order.
EXCHANGE OPTION
You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 1.75%. You may exchange units of this Fund for units
of certain other funds at a reduced sales fee if your investment goals change.
To exchange units, you should talk to your financial professional about what
funds are exchangeable, suitable and currently available.
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.
We may amend or terminate this exchange option at any time without notice.
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the bonds, less expenses, from
the initial date of deposit up to, but not including, the settlement date, which
is usually three business days after the purchase date of the unit.
Bonds also carry accrued but unpaid interest up to the initial date of deposit.
To avoid having you pay this additional accrued interest (which earns no return)
when you buy, the Trustee advances this amount to the Sponsors. The Trustee
recovers this advance from interest received on the bonds.
EVALUATIONS
An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
Bond values are based on current bid or offer prices for the bonds or comparable
bonds. In the past, the difference between bid and offer prices of publicly
offered tax-exempt bonds has ranged from 0.5% of face amount on actively traded
issues to 3.5% on inactively traded issues; the difference has averaged between
1 and 2%.
INCOME
Interest on any bonds purchased on a when-issued basis or for a delayed delivery
does not begin to accrue until the bonds are delivered to the Fund. The Trustee
may reduce its fee to
12
<PAGE>
provide you with tax-exempt income for this non-accrual period. If a bond is not
delivered on time and the Trustee's annual fee and expenses do not cover the
additional accrued interest, we will treat the contract to buy the bond as
failed.
The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.
EXPENSES
The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:
- to reimburse the Trustee for the Fund's operating expenses;
- for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
- costs of actions taken to protect the Fund and other legal fees and
expenses;
- expenses for keeping the Fund's registration statement current; and
- Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 55 CENTS per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. Legal,
typesetting, electronic filing and regulatory filing fees and expenses
associated with updating the Fund's registration statement yearly are also now
chargeable to the Fund. While this fee may exceed the amount of these costs and
expenses attributable to this Fund, the total of these fees for all Series of
Defined Asset Funds will not exceed the aggregate amount attributable to all of
these Series for any calendar year. Certain of these expenses were previously
paid for by the Sponsors. The Fund also pays the Evaluator's fees.
The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.
Quarterly deferred sales charges you owe are paid with interest and principal
from certain bonds. If these amounts are not enough, the rest will be paid out
of distributions to you from the Fund's Capital and Income Accounts.
The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the Fund will owe the excess. The
Trustee has a lien on Fund assets to secure reimbursement of Fund expenses and
may sell bonds if cash is not available.
PORTFOLIO CHANGES
The Sponsors and Trustee are not liable for any default or defect in a bond; if
a contract to buy any bond fails in the first 90 days of the Fund, we generally
will deposit a replacement tax-exempt bond with a similar yield, maturity,
rating and price.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
bonds in the portfolio even if their credit quality declines or other adverse
financial circumstances occur. However, we may sell a bond in certain cases if
13
<PAGE>
we believe that certain adverse credit conditions exist or if a bond becomes
taxable.
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which will affect the size
and composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
- diversity of the portfolio;
- size of the Fund relative to its original size;
- ratio of Fund expenses to income;
- current and long-term returns;
- degree to which units may be selling at a premium over par; and
- cost of maintaining a current prospectus.
FUND TERMINATION
The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of bonds deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.
When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final sale.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.
CERTIFICATES
Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.
TRUST INDENTURE
The Fund is a "unit investment trust" governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
- to cure ambiguities;
- to correct or supplement any defective or inconsistent provision;
- to make any amendment required by any governmental agency; or
- to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51%
14
<PAGE>
requirement. No amendment may reduce your interest in the Fund without your
written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
- it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
- it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsors and the Trustee without the consent of
investors. The resignation or removal of either becomes effective when a
successor accepts appointment. The Sponsors will try to appoint a successor
promptly; however, if no successor has accepted within 30 days after notice of
resignation, the resigning Trustee or Evaluator may petition a court to appoint
a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
- remove it and appoint a replacement Sponsor;
- liquidate the Fund; or
- continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
special counsel for the Sponsors, has given an opinion that the units are
validly issued.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statement of Condition included in this
prospectus.
SPONSORS
The Sponsors and their underwriting percentages are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to
15
<PAGE>
many unit investment trusts. As a registered broker-dealer each Sponsor buys and
sells securities (including investment company shares) for others (including
investment companies) and participates as an underwriter in various selling
groups.
TRUSTEE
The Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th Floor, New York, New York 10004, is the Trustee. It is supervised by
the Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and New York State banking authorities.
THE CREDIT CONSULTANT
The Credit Consultant, Fitch IBCA, Inc., is a Nationally Recognized Statistical
Rating Organization, whose primary business is to provide credit ratings on
bonds issued by states and municipalities and their instrumentalities and
political subdivisions, industrial companies, utilities, financial institutions,
and issuers of mortgage- and asset-backed securities.
The Credit Consultant is registered as an investment adviser with the Securities
and Exchange Commission ("SEC") and various states.
Fitch ratings and credit opinions are not recommendations to buy, sell, or hold
any bond.
Fitch ratings are based on information obtained from issuers, other obligors,
underwriters, their experts, and other sources Fitch believes to be reliable.
Fitch does not audit or verify the truth or accuracy of the information. Ratings
are subject to change, suspension, or withdraw.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. Sponsors also realize a
profit or loss on deposit of the bonds shown under Defined Portfolio. Any cash
made available by you to the Sponsors before the settlement date for those units
may be used in the Sponsors' businesses to the extent permitted by federal law
and may benefit the Sponsors.
During the initial offering period, the Sponsors also may realize profits or
sustain losses on units they hold. In maintaining a secondary market, the
Sponsors will also realize profits or sustain losses in the amount of any
difference between the prices at which they buy units and the prices at which
they resell or redeem them.
PUBLIC DISTRIBUTION
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
CODE OF ETHICS
The Fund and the Agent for the Sponsors have each adopted a code of ethics
requiring reporting of personal securities transactions by its employees with
access to information on Fund transactions. Subject to certain conditions, the
codes permit employees to invest in Fund securities for their own accounts. The
codes are designed to prevent fraud, deception and misconduct against the Fund
and to provide reasonable standards of conduct. These codes are on file with the
Commission and you may obtain a copy by
16
<PAGE>
contacting the Commission at the address listed on the back cover of this
prospectus.
YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the "Year
2000 Problem"). To date we are not aware of any major operational difficulties
resulting from the computer system changes necessary to prepare for the Year
2000. However, there can be no assurance that the Year 2000 Problem will not
adversely affect the issuers of the bonds contained in the Portfolio. We cannot
predict whether any impact will be material to the Fund as a whole.
TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances or subject to
special rules. You should consult your own tax adviser about your particular
circumstances.
At the date of issue of each bond, counsel for the issuer delivered an opinion
to the effect that interest on the bond is exempt from regular federal income
tax. However, interest may be subject to state and local taxes and may be taken
into account in determining your preference items for alternative minimum tax
purposes. Neither we nor our counsel have reviewed the issuance of the bonds,
related proceedings or the basis for the opinions of counsel for the issuers. We
cannot assure you that the issuers (or other users of bond proceeds) have
complied or will comply with any requirements necessary for a bond to be
tax-exempt. If any of the bonds were determined not to be tax-exempt, you could
be required to pay income tax for current and prior years, and if the Fund were
to sell the bond, it might have to sell it at a substantial discount.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each bond in the Fund.
GAIN OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued "market
discount". Generally you will have market discount to the extent that your basis
in a bond when you purchase a unit is less than its stated redemption price at
maturity (or, if it is an original issue discount bond, the issue price
increased by original issue discount that has accrued on the bond before your
purchase). You should consult your tax adviser in this regard.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will
17
<PAGE>
be long-term if you are considered to have held your investment on each bond for
more than one year and short-term otherwise. Because the deductibility of
capital losses is subject to limitations, you may not be able to deduct all of
your capital losses.
YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges you pay, adjusted to reflect any accruals of
"original issue discount," "acquisition premium" and "bond premium". You should
consult your tax adviser in this regard.
EXPENSES
If you are not a corporate investor, you will not be entitled to a deduction for
your share of fees and expenses of the Fund. Also, if you borrowed money in
order to purchase or carry your units, you will not be able to deduct the
interest on this borrowing for federal income tax purposes. The IRS may treat
your purchase of units as made with borrowed money even if the money is not
directly traceable to the purchase of units.
NEW YORK TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation. If you are a New York taxpayer, your income from the
Fund will not be tax-exempt in New York except to the extent that the income is
earned on bonds that are tax-exempt for New York purposes. Depending on where
you live, your income from the Fund may be subject to state and local taxation.
You should consult your tax adviser in this regard.
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolio, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.
18
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INVESTMENT GRADE PORTFOLIO - 11 (BBB QUALITY OR BETTER),
LONG INTERMEDIATE TERM SERIES,
DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Municipal Investment Trust Fund,
Investment Grade Portfolio - 11 (BBB Quality or Better),
Long Intermediate Term Series,
Defined Asset Funds:
We have audited the accompanying statement of condition of
Municipal Investment Trust Fund, Investment Grade
Portfolio - 11 (BBB Quality or Better), Long Intermediate Series,
Defined Asset Funds, including the portfolio, as of March 31,
2000 and the related statements of operations and of changes in
net assets for the period April 24, 1999 to March 31, 2000. These
financial statements are the responsibility of the Trustee. Our
responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures
in the financial statements. Securities owned at March 31, 2000,
as shown in such portfolio, were confirmed to us by The Chase
Manhattan Bank, the Trustee. An audit also includes assessing
the accounting principles used and significant estimates made by
the Trustee, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of Municipal Investment Trust Fund,
Investment Grade Portfolio - 11 (BBB Quality or Better), Long
Intermediate Series, Defined Asset Funds at March 31, 2000
and the results of its operations and changes in its net assets
for the above-stated period in accordance with accounting
principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
New York, N.Y.
June 14, 2000
D - 1
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INVESTMENT GRADE PORTFOLIO - 11 (BBB QUALITY OR BETTER),
LONG INTERMEDIATE TERM SERIES,
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of March 31, 2000
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 9,913,372 )(Note 1)......... $ 8,967,961
Accrued interest ............................... 129,741
Accrued interest on Segregated Bonds (Note 5) .. 1,652
Prepaid Trustee's fees and expenses ............ 1,740
Surveillance fees receivable ................... 1,113
Income payments receivable (Segregated Bonds) .. 206
Principal payments receivable .................. 3,841
Cash - income .................................. 65,109
Cash - income on Segregated Bonds .............. 4,156
Cash - principal ............................... 732
-----------
Total trust property ......................... 9,176,251
LESS LIABILITIES:
Income advance from Trustee..................... $ 1
Principal advance from Trustee ................. 3,814
Principal payments payable (Segregated Bonds) .. 732
Deferred sales charge (Note 5) ................. 58,249
Income payments payable ........................ 1,210
Accrued Sponsors' fees ......................... 382 64,388
----------- -----------
NET ASSETS, REPRESENTED BY:
9,762,757 units of fractional undivided
interest outstanding (Note 3)................ 8,915,753
Undistributed net investment income ............ 196,110 $ 9,111,863
----------- ===========
UNIT VALUE ($ 9,111,863 / 9,762,757 units )....... $ 0.93333
===========
</TABLE>
See Notes to Financial Statements.
D - 2
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INVESTMENT GRADE PORTFOLIO - 11 (BBB QUALITY OR BETTER),
LONG INTERMEDIATE TERM SERIES,
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
April 24, 1999
to
March 31,
2000
----
<S> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 509,470
Interest income on Segregated
Bonds (Note 5) ....................... 6,014
Trustee's fees and expenses ............ (9,337)
Surveillance fees ...................... (5,357)
Sponsors' fees ......................... (788)
------------
Net investment income .................. 500,002
------------
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS:
Realized loss on
securities sold or redeemed .......... (111,934)
Unrealized depreciation
of investments ....................... (945,411)
------------
Net realized and unrealized
loss on investments ................. (1,057,345)
------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (557,343)
============
</TABLE>
See Notes to Financial Statements.
D - 3
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INVESTMENT GRADE PORTFOLIO - 11 (BBB QUALITY OR BETTER),
LONG INTERMEDIATE TERM SERIES,
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
April 24, 1999
to
March 31,
2000
----
<S> <C> <C>
OPERATIONS:
Net investment income .................. $ 500,002
Realized loss on
securities sold or redeemed .......... (111,934)
Unrealized depreciation
of investments ....................... (945,411)
-------------
Net decrease in net assets
resulting from operations ............ (557,343)
-------------
DISTRIBUTIONS TO HOLDERS (Note 2)
Income ............................... (292,301)
Principal ............................ (29,973)
-------------
Total distributions .................. (322,274)
-------------
SHARE TRANSACTIONS:
Deferred sales charge (Note 5):
Principal ............................ (73,981)
Redemption amounts:
Income ............................... (5,577)
Principal ............................ (508,416)
-------------
Net share transactions ................. (587,974)
-------------
NET DECREASE IN NET ASSETS ............... (1,467,591)
NET ASSETS AT BEGINNING OF PERIOD ........ 10,579,454
-------------
NET ASSETS AT END OF PERIOD .............. $ 9,111,863
=============
PER UNIT:
Income distributions during
period ............................... $ 0.02831
=============
Principal distributions during
period ............................... $ 0.00302
=============
Net asset value at end of
period ............................... $ 0.93333
============
TRUST UNITS:
Redeemed during period ................. 562,243
Outstanding at end of period ........... 9,762,757
============
</TABLE>
See Notes to Financial Statements.
D - 4
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INVESTMENT GRADE PORTFOLIO - 11 (BBB QUALITY OR BETTER),
LONG INTERMEDIATE TERM SERIES,
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a
Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
accordance with accounting principles generally accepted in the
United States of America.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities,
except that value on April 24, 1999 was based upon offering
side evaluations at April 22, 1999, the day prior to the
Date of Deposit. Cost of securities at April 24, 1999 was
also based on such offering side evaluations.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
Semi-annual distributions of net investment income are made to
Holders. Receipts other than interest, after deductions for
redemptions and applicable expenses, are also distributed
periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 9,762,757 units at Date of Deposit ................. $10,003,355
Transfer to capital of interest on Segregated Bonds (Note 5) 6,014
Redemptions of units - net cost of 562,243 units redeemed
less redemption amounts (principal)....................... 67,683
Principal distributions .................................... (29,973)
Deferred sales charge (Note 5) ............................. (73,981)
Realized loss on securities sold ........................... (111,934)
Unrealized depreciation of investments...................... (945,411)
-----------
Net capital applicable to Holders .......................... $ 8,915,753
===========
</TABLE>
4. INCOME TAXES
As of March 31, 2000, unrealized depreciation of investments, based
on cost for Federal income tax purposes, aggregated $945,411, all of
which related to depreciated securities. The cost of investment
securities for Federal income tax purposes was $9,913,372 at March
31, 2000.
D - 5
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INVESTMENT GRADE PORTFOLIO - 11 (BBB QUALITY OR BETTER),
LONG INTERMEDIATE TERM SERIES,
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
5. DEFERRED SALES CHARGE
$25,000 face amount of the City of Alexandria, LA, Util. Rev. Rfdg.
Bonds, Ser. 1993 and $100,000 face amount of the City School Dist.,
Oneida, NY, Sch. Dist. Bonds, Ser. 1998, have been segregated to
fund the deferred sales charges. The sales charges are being paid
for with the interest received and by periodic sales or maturity of
these bonds, as well as with principal proceeds received in
conjunction with the disposition on the unsegregated bonds in the
portfolio. A deferred sales charge of $2.19 per 1,000 Units charged
on a quarterly basis in the first six quarters and $2.18 per 1,000
Units charged on a quarterly basis in the next two quarters, and
paid to the Sponsors periodically by the Trustee on behalf of the
Holders, up to an aggregate of $17.50 per 1,000 Units over the first
two years of the life of the Fund. Should a Holder redeem Units
prior to the second anniversary of the Fund, the remaining balance
of the deferred sales charge will be charged.
D - 6
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INVESTMENT GRADE PORTFOLIO - 11 (BBB QUALITY OR BETTER),
LONG INTERMEDIATE TERM SERIES,
DEFINED ASSET FUNDS
PORTFOLIO
As of March 31, 2000
<TABLE>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 The Industrial Dev. Bd. of the City (b) $ 70,000 5.100 % 2010 03/01/06 $ 70,741 $ 65,260
Montgomery, AL, Indl. Dev. Rev. Bonds (Tom @ 102.000
Chapman Proj.), Ser 1999 (Regions Bank,
Montgomery, AL-Letter of Credit) 75,000 5.200 2011 03/01/06 75,791 69,775
(AMT)(5)(7) @ 102.000
80,000 5.250 2012 03/01/06 80,841 74,040
@ 102.000
80,000 5.300 2013 03/01/06 80,839 73,634
@ 102.000
85,000 5.350 2014 03/01/06 85,890 77,672
@ 102.000
2 Development Auth. of Johnson Cnty., (b) 290,000 5.150 2008 04/01/04 291,670 274,694
GA, Rev. Bonds (Bellcrest Homes, Inc. @ 102.000
Proj.) (First Commercial Bank,
Birmingham, AL-Letter of Credit) (7) 300,000 5.250 2009 04/01/04 301,722 284,127
(AMT)(5) @ 100.00
3 Crisp Cnty.-Cordele Indl. Dev. Auth., (b) 515,000 5.150 2008 04/01/04 517,966 487,818
GA, Rev. Bonds (Cavalier Industries, @ 102.000
Inc. Proj.) (First Commercial Bank,
Birmingham, AL-Letter of Credit) (7) 545,000 5.250 2009 04/01/04 548,128 516,164
@ 102.000
4 Industrial Dev. Bd. of Crenshaw Cnty., (b) 265,000 5.600 2013 03/01/05 273,377 251,535
AL, Indl. Rev. Bonds (Sister Schubert's @ 103.000
Homemade Rolls, Inc. Proj.), Ser. 1998
(AmSouth Bank, Birmingham, AL-Letter of
Credit) (AMT)(5) (7)
5 City of David City, NE, Indl. Dev. Rev. (b) 1,275,000 5.400 2010 09/15/06 1,298,435 1,195,274
Bonds (Henningsen Foods, Inc. Proj.), Ser. @ 102.000
1998 (The Bank Of Tokyo-Mitsubishi, Ltd.,
Chicago Branch-Letter of Credit) (AMT)(5)
(7)
6 Central Platte Valley Metro. Dist. A 1,000,000 5.150 2013 12/01/09 1,004,280 938,970
(Denver Cnty., CO), G.O. Bonds, @ 101.000
Ser. 1999 (ACA Ins.) (4)
</TABLE>
D - 7
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INVESTMENT GRADE PORTFOLIO - 11 (BBB QUALITY OR BETTER),
LONG INTERMEDIATE TERM SERIES,
DEFINED ASSET FUNDS
PORTFOLIO
As of March 31, 2000
<TABLE>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
7 City School Dist., Oneida, NY, Sch. Aaa(m) $ 100,000 4.125 % 2001 None $ 101,278 $ 99,692
Dist. Bonds, Ser. 1998 (FSA Ins.) (4) (6)
8 The Oklahoma Dev. Fin. Auth., BBB 395,000 5.750 2014 08/15/09 405,491 337,385
Hillcrest Healthcare Sys., Rev. @ 101.000
and Rfdg. Bonds, Ser. 1999A
9 Wisconsin Hlth. and Educl. Facs. A- 1,000,000 5.375 2015 02/15/09 1,000,000 852,690
Auth., Rev. Bonds (Aurora Hlth. Care, @ 101.000
Inc.) Ser 1999A
10 City of Beech Grove, IN, Econ. Dev. Aa2(m) 595,000 5.200 2013 06/01/08 599,962 561,870
Multifamily Hsg., Mtge. Rev. Rfdg. @ 102.000
Bonds (FHA Ins. Mtge. Loan-McGregor Woods
Apts. Proj.), Ser. 1998A (AMT)(5)
11 Shawnee Cnty, KS, Certs. of Part. (b) 155,000 4.900 2010 07/01/09 153,672 135,980
(Shawnee Cmnty. Mental Hlth. Ctr., @ 100.000
Inc. Proj,), Ser. 1999A
160,000 5.000 2011 07/01/09 159,266 139,050
@ 100.000
170,000 5.000 2012 07/01/09 168,368 145,236
@ 100.000
180,000 5.000 2013 07/01/09 177,291 151,407
@ 100.000
12 City of Alexandria, LA, Util. Rev. Rfdg. AAA 25,000 4.200 2000 None 25,225 25,002
Bonds, Ser. 1993 (Financial Guaranty Ins.)
(4) (6)
13 City of Nekoosa, WI, Poll. Ctl. Funding Baa2(m) 1,035,000 5.350 2015 None 1,040,486 911,680
Rev. Bonds (Nekoosa Papers Inc. Proj.),
Ser. 1999A
14 Village of Broadview (Cook Cnty., IL), BBB(f) 1,000,000 5.375 2015 07/01/09 997,230 885,870
Tax Increment Rev. Bonds, Ser. 1999 @ 100.000
</TABLE>
D - 8
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INVESTMENT GRADE PORTFOLIO - 11 (BBB QUALITY OR BETTER),
LONG INTERMEDIATE TERM SERIES,
DEFINED ASSET FUNDS
PORTFOLIO
As of March 31, 2000
<TABLE>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
15 Illinois Dev. Fin. Auth., Rev., Bonds (b) $ 450,000 5.350 % 2014 12/01/09 $ 455,423 $ 413,136
(Illinois Association of Sch. Bus. @ 100.000
Officials Proj.), Ser. 1998
--------- --------- ---------
TOTAL $ 9,845,000 $ 9,913,372 $ 8,967,961
========= ========= =========
See Notes to Portfolio.
</TABLE>
D - 9
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INVESTMENT GRADE PORTFOLIO - 11 (BBB QUALITY OR BETTER),
LONG INTERMEDIATE TERM SERIES,
DEFINED ASSET FUNDS
NOTES TO PORTFOLIO
As of March 31, 2000
(1) The ratings are of the bonds themselves by Standard & Poor's Ratings
Group, or by Moody's Investors Service, Inc. if followed by "(m)",
or by Fitch Investors Service, Inc. if followed by "(f)"; "(a)"
indicates that it is a rating of the outstanding debt obligations of
the institution providing the letter of credit or guarantee; "(b)"
indicates that while there is no such available rating, in the
opinion of Defined Asset Funds research analysts, the bond has
credit characteristics comparable to bonds rated "BBB" or better;
"(c)" indicates that while there is no such available rating, in the
opinion of Defined Asset Funds research analysts, the bond does not
have credit characteristics comparable to bonds rated "BBB" or
better. Bond ratings have been furnished by the Evaluator but not
confirmed with the rating agencies.
(2) See Notes to Financial Statements.
(3) Optional redemption provisions, which may be exercised in whole or
in part, are initially at prices of par plus a premium, then
subsequently at prices declining to par. Certain securities may
provide for redemption at par prior or in addition to any optional
or mandatory redemption dates or maturity, for example, through the
operation of a maintenance and replacement fund, if proceeds are not
able to be used as contemplated, the project is condemned or sold or
the project is destroyed and insurance proceeds are used to redeem
the securities. Many of the securities are also subject to mandatory
sinking fund redemption commencing on dates which may be prior to
the date on which securities may be optionally redeemed. Sinking
fund redemptions are at par and redeem only part of the issue. Some
of the securities have mandatory sinking funds which contain
optional provisions permitting the issuer to increase the principal
amount of securities called on a mandatory redemption date. The
sinking fund redemptions with optional provisions may, and optional
refunding redemptions generally will, occur at times when the
redeemed securities have an offering side evaluation which
represents a premium over par. To the extent that the securities
were acquired at a price higher than the redemption price, this will
represent a loss of capital when compared with the Public Offering
Price of the Units when acquired. Distributions will generally be
reduced by the amount of the income which would otherwise have been
paid with respect to redeemed securities and there will be
distributed to Holders any principal amount and premium received on
such redemption after satisfying any redemption requests for Units
received by the Fund. The estimated current return may be affected
by redemptions.
(4) Insured by the indicated municipal bond insurance company.
(5) Securities that are tax preference items for purposes of the
Alternative Minimum Tax are indicated by "(AMT)".
(6) These bonds have been segregated to fund the deferred sales charges.
(7) Certain bonds covered by letters of credit which may expire prior to
the maturity date of the bonds. Upon expiration of a letter of
credit, the issuer of the bond is obligated to obtain a replacement
letter of credit or call the bond.
D - 10
<PAGE>
DEFINED ASSET FUNDS-SM-
<TABLE>
<S> <C>
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most recent free INVESTMENT GRADE PORTFOLIO--11
Information Supplement LONG-INTERMEDIATE TERM SERIES
that gives more details about (A Unit Investment Trust)
the Fund, by calling: ---------------------------------------
The Chase Manhattan Bank This Prospectus does not contain
1-800-323-1508 complete information about the
investment company filed with the
Securities and Exchange Commission in
Washington, D.C. under the:
- Securities Act of 1933 (file no.
333-70583) and
- Investment Company Act of 1940 (file
no. 811-1777).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
UNITS OF ANY FUTURE SERIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED
UNTIL THAT SERIES HAS BECOME EFFECTIVE
WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO UNITS CAN BE SOLD IN ANY
STATE WHERE A SALE WOULD BE ILLEGAL.
100157--8/00
</TABLE>