IRA Ideal!
DEFINED ASSET FUNDS [SM]
PREMIER
AMERICAN
PORTFOLIO
BLUE CHIP SERIES 7
[ML Logo] Merrill Lynch
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PREMIER AMERICAN PORTFOLIO
[GRAPHICS]
AN OPPORTUNITY TO ACQUIRE A DIVERSIFIED PORTFOLIO OF SOME
OF AMERICA'S PREMIER COMPANIES
Now the Premier American Portfolio brings 35 of America's leading companies
together in one Portfolio, affording individual investors access to stocks of
companies that supply products and services America uses every day. With the
Premier American Portfolio, the relatively high stock prices of these companies
are not a barrier to ownership. What's more, by including this Portfolio in
your investments, you can be instantly diversified among 35 of America's
premier stocks.
Blue Chip Portfolio
We believe the Premier American Portfolio is a solid choice for the equity
portion of your investment portfolio. The Portfolio seeks total return through
capital appreciation and, to a lesser extent, dividend income. It offers a
diversified Portfolio of some of America's largest and most established
companies.
Buy with Knowledge o Hold with Confidence
Each company represented in the Portfolio was professionally selected for its
high quality and established earnings record. On February 1, 1999, 33 of the 35
stocks traded on the New York Stock Exchange, and each at a price of more than
$65 a share. The market capitalization of each company was at least $5 billion,
and each has passed our rigorous screening process.
A Defined Strategy
The Premier American Portfolio offers access to an affordable variety of blue
chip stocks. Like other Defined Asset Funds (SM), it follows a disciplined
investment strategy of selecting stocks based on specific investment merits,
and then holds them for a set period of time, in this case, two years. At the
end of two years, the screening process is reapplied and a new Portfolio is
selected. You can choose to reinvest into another Portfolio, if available, or
redeem your investment.
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Company Symbol
MEDICAL/HEALTH CARE 22% of Portfolio
Bristol-Myers Squibb Company BMY
Bristol-Myers Squibb is the number one drug company in the U.S. Pravachol
(cholesterol), TAXOL (cancer) and glucophage (diabetes) are key products.
Presently, there are 50 compounds in development.
Cardinal Health, Inc. CAH
One of the largest pharmaceutical distributors in the nation. Cardinal also
provides hospital pharmacy management, automated dispensing systems
manufacturing, pharmacy packaging, retail pharmacy franchising and clinical
information systems development.
Eli Lilly and Company LLY
World-wide pharmaceutical company best known for Prozac, the top selling anti-
depressant in the world. Evista, used to prevent osteoporosis and has potential
to address breast cancer, may be come Lily's best selling drug. Approximately
18 compounds are now in clinical trials.
Johnson & Johnson JNJ
With $24 billion in sales, Johnson & Johnson is a world-wide leader in
pharmaceuticals, toiletries, first aid, hygiene, medical equipment, surgical
products and contraceptives. The company spends over $2 billion annually on
research and development.
Medtronic, Inc. MDT
Medtronic is the world's leading medical technology company specializing in
implantable and interventional therapies. It is the world leader in
defibrillators which slow down a rapid heartbeat, and pacemakers which speed up
a slow beating heart.
Merck & Co., Inc. MRK
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One of the world's largest pharmaceutical companies, Merck spends $2 billion
annually on research and is a leader in treating cholesterol, high blood
pressure and HIV. Five new drugs were launched in 1998 and ten drugs are in
late stages of development.
Pfizer, Inc. PFE
A world-wide producer of drugs, medical technology, consumer health-care items
and animal health goods. Its drug, Viagra, may become the best selling drug
ever. It has one of the best drug development pipelines.
Warner-Lambert Company WLA
Warner-Lambert is a worldwide leader in health-care and consumer products with
sales in excess of $10 billion. Lipitor (cholesterol) has sales over $2
billion. Several products are waiting market clearance or in advanced clinical
development.
COMMERCIAL BANKING 10% of Portfolio
Fifth Third Bancorp FITB
In addition to traditional banking services, Fifth Third Bancorp also provides
money management and data processing. With offices primarily in Ohio,
Kentucky and Indiana, this bank continues to expand its services and geographic
reach. Acquisitions and the expansion of fee sources should extend the bank's
track record.
Firstar Corp. FSR
With the recent merger of Star Banc and Firstar, the new Firstar is among the
leading banks in the country with offices in Wisconsin, Ohio, Kentucky and
Indiana. Substantial growth in earnings is expected due to cost savings and
revenue enhancements.
SunTrust Banks, Inc. STI
Operating primarily in Florida, Georgia, Tennessee and Virginia, SunTrust
provides a wide range of financial services. The company holds 48.3 million
shares of common stock in the Coca-Cola company. Strong credit quality and
operating results are expected to continue.
Wachovia Corporation WB
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With dual headquarters in Atlanta, GA and Winston-Salem, NC, Wachovia offers a
full range of financial services. It is a leading issuer of credit cards, and
has significantly expanded overall operations with multiple acquisitions in
Virginia. Recent expansion should boost revenue growth going forward.
TELECOMMUNICATIONS 9% of Portfolio
AT&T Corp. T
Incorporated in 1885, AT&T operates the world's largest communications network
serving over 90 million customers. Products and services include long distance
and wireless services; online services; access to home entertainment and local
telephone services in selected cities.
Century Telephone Enterprise, Inc. CTL
Provides a range of telecommunications services including local exchange,
wireless, long distance and internet access to over two million customers in 21
states. Its properties are primarily in suburban and rural areas with strong
demand for services and less competitive exposure.
Sprint Corporation FON
Founded in 1938, Sprint provides domestic and international long distance,
local exchange, wireless and internet access services. It is the nation's third
largest interexchange carrier, and it provides local phone services to over
seven million access lines in 21 states.
DIVERSIFIED OPERATIONS 9% of Portfolio
Berkshire Hathaway, Inc. (Class B) BRK/B
A diversified holding company under the direction of Warren Buffet, that
engages in property/casualty insurance and reinsurance as well as a range of
diverse non-insurance businesses. As a result of its exceptionally strong and
consistent growth, the company's book value has grown over the past 30 years
at a compound annual rate of 25%.
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MULTI-SECTOR 9% of Portfolio
General Electric Company GE
The fifth-largest U.S. corporation, GE's diverse businesses include aircraft
engines, TV network NBC, appliances, electrical and industrial control systems,
information services, lighting, medical services, power and transportation
systems and plastics. GE's Capital Services business is one of the largest
financial services companies in the U.S. An ongoing focus on cost management
and an expansion of service businesses bode well for GE's earnings outlook.
Textron, Inc. TXT
Business segments of this diversified company include aircraft (Bell Helicopter
and Cessna Aircraft), automotive components, financial services and a variety
of industrial products and systems. Strong earnings growth is expected aided by
acquisitions and the deployment of proceeds from the sale of Avco Financial.
United Technologies Corporation UTX
This global company's principal products and support services are provided by
Pratt & Whitney, a leader in aircraft engines; Otis, the world's largest maker
of elevators; and Carrier, the world's largest manufacturer of air
conditioning/heating equipment. Earnings growth is expected due to margin
improvements and strong cash generation which allows for acquisitions and share
repurchases.
ELECTRONIC PRODUCTS/SERVICES 7% of Portfolio
Honeywell, Inc. HON
A world leader in automation and control technology. Its products, which range
from home automatic thermostats to high-tech valves and process controllers,
increase comfort, protect the environment, conserve energy and enhance
productivity and safety in homes, industry, aviation and space.
Texas Instruments, Inc. TXN
A global semi-conductor company and a leading designer and supplier of digital
signal processing solutions. The company is a key player in networking today's
society by providing wireless communication, semi-conductors, signal processing
and digital imaging.
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INSURANCE 7% of Portfolio
American International Group, Inc. AIG
The nation's largest underwriter of commercial insurance conducts
property/casualty business in over 100 countries. AIG recently acquired Sun
America, a leader in the retirement savings market. One of the strongest and
most diversified financial services companies in the world with an outstanding
record of profitable growth.
Jefferson-Pilot Corporation JP
This life insurance holding company also has interests in radio and TV
stations. Jefferson-Pilot is among the largest life insurers in the U.S. and a
leading provider of universal life insurance. Through its life an annuities
businesses, the company is well positioned in the asset accumulation market.
MBIA, Inc. MBI
The world's leading financial guarantor also provides specialized financial
products and services for public and private sector organizations around the
globe. MBIA's primary business is insuring municipal bonds issued by
governmental units to finance essential public purposes. The acquisition of
CAPMAC has strengthened its position in the structured finance market.
Progressive Corp. PGR
An insurance holding company that underwrites private passenger automobile
insurance and related services throughout the U.S. and Canada. Progressive is
the fifth-largest private passenger vehicle insurer in the U.S. and is the
leading underwriter of non-standard automobile insurance.
CONSUMER PRODUCTS 6% Portfolio
Clorox Company CLX
A leading producer of home cleaning products with several major brands. Other
products include Combat insecticides, Kingsford and Matchlite Charcoal, Hidden
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Valley Ranch salad dressings, Armor All products and Fresh Step cat litter.
Double-digit growth should continue due to the portfolio of leading brands, new
product development, international expansion and tight cost control.
Colgate-Palmolive Company CL
The global leader in oral care and a leading producer of cleaners, deodorants,
shampoos, fabric softeners and detergents in a variety of markets. Innovative
new products, continued geographic expansion and tight cost control are
expected to continue earnings growth over the next few years.
Proctor & Gamble Company PG
One of the world's leading consumer product companies, Procter & Gamble markets
a broad range of laundry, cleaning, paper, beauty, health care, food and
beverage products. Key brands include Tide, Crest, Ivory, Dawn, Downy, Comet,
Head & Shoulders, Scope, Secret, Crisco, Pampers, Folger's, Covergirl and many
others. Its key strengths are dominant market shares and geographic diversity,
low cost base and strong customer relationships.
OIL 5% of Portfolio
Chevron Corp. CHV
Explores for, develops and produces crude oil and natural gas; refines crude
oil into finished petroleum products; transports and markets crude oil, natural
gas and petroleum products; and makes chemicals for industrial uses. Recent
huge oil discoveries in West Africa, attractive Caspian Sea production and cost
cutting make Chevron well positioned in the current market environment.
Mobil Corp. MOB
Mobil combines worldwide oil and gas operations, a global marketing and
refining complex, a network of pipelines and tankers with a highly
sophisticated research and engineering operation. After the impending merger
with Mobil is complete, Exxon will be the largest oil company in the world.
RETAIL 4% of Portfolio
Wal-Mart Stores, Inc. WMT
The world's largest retailer, Wal-Mart is one of the strongest and fastest
growing retailers in the U.S. Its size and buying power enable the company to
get the
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lowest prices from suppliers, giving it a competitive edge that supports
continued growth.
LINEN SUPPLIES 4% of Portfolio
Cintas Corp. CTAS
One of the leaders in corporate identity uniform programs, Cintas also provides
corporate services including entrance mats, sanitation supplies, first aid
products and services. The pending acquisition of Unitog will make it the
industry leader and should fuel continued strong earning growth.
OFFICE AUTOMATION & EQUIPMENT 3% of Portfolio
Xerox Corporation XRX
Xerox manufacturers a broad range of office equipment including copiers, laser
printers, publishing and duplication equipment. Eliminating insurance and
financial service businesses made it possible for Xerox to focus on growth
markets in its core document processing business. Strict cost controls and
reduced headcount should allow it to maintain its double-digit growth goals.
RESTAURANTS 3% of Portfolio
McDonald's Corp. MCD
The world's leading fast food service organization with more than 23,000
restaurants. McDonald's holds the number one market share in the majority of
the 109 countries and territories in which it operates.
FINANCIAL SERVICES 2% of Portfolio
Fannie Mae FNM
This federally chartered, privately-owned corporation, organized as a U.S.
government agency, provides supplemental liquidity to the residential mortgage
market. Rather than functioning as a primary lender, Fannie Mae purchases,
sells and deals in mortgages in the secondary market. It also issues
mortgage-backed securities in exchange for pools of mortgages from lenders.
About Defined Asset Funds -- Time in the Market
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We believe the disciplined strategy of buying and holding securities with a
long-term view can help meet your needs. For income, for growth or for total
return, time in the market can be an effective strategy for growing your
portfolio. This philosophy is the cornerstone of Defined Asset Funds.
[GRAPHICS BOX]
Defined Advantages
o Diversification among 35 "Blue-Chip" stocks.
o A defined term of two years.
o A minimum investment of about $250.
o Daily liquidity at a price based on then-current net asset value which may
be more or less than your cost.
o Option to reinvest quarterly distributions at a reduced sales charge.
Is the Blue Chip Portfolio Right for You?
If you are saving for a long-term goal, such as a new home, a child's education
or retirement, this Portfolio may be a smart choice. It may not be suitable for
investors seeking current income.
The Portfolio is designed for investors who can assume the risks associated
with equity investments. The value of your investment will fluctuate with the
prices of the underlying stocks in the Portfolio. Stock prices can be volatile.
There can be no assurance that any of the stocks included in the Portfolio will
appreciate or not depreciate in price during the two-year life of the
Portfolio.
Tax Reporting
The proceeds received when you sell this investment will reflect the deduction
of the deferred sales charge and, after the initial offering period, the charge
for organization costs.
In addition, the annual statement and the relevant tax reporting forms you
receive at year-end will be based on the amount paid to you, net of the
deferred sales
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charge and the charge for organization costs, after the initial offering
period. Accordingly, you should not increase the tax basis in your units by
these charges.
Generally, dividends and any gains will be subject to tax each year, whether or
not reinvested. Capital gains, if any, on assets held over a year will be taxed
up to the maximum federal tax rate of 20% for individuals. However, on
rollovers of future Portfolios, if available, investors will defer recognition
of gains and losses for federal tax purposes on stocks that are transferred to
the new Portfolio. Please consult your tax advisor concerning state and local
taxation.
Defining Your Costs
First-time investors pay an initial sales charge of about 1% when they buy. In
addition, all investors pay a deferred sales charge in seven monthly
installments of $2.50 per 1,000 units, deducted from the Portfolio's net asset
value in each year of the Portfolio's two-year life ($35.00 total).
As a % of Amount
Public Offering Price per 1,000 units
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Initial Sales Charge 1.00% $10.00
Deferred Sales Charge Year 1 1.75% $17.50
Deferred Sales Charge Year 2 1.75% $17.50
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Maximum Sales Charge 4.50% $45.00
Estimated Annual Operating Expenses
(as a % of net assets) 0.166% $1.64
Estimated Organization Costs $1.68
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If you sell your units before the final deferred sales charge installment in
either the first or second year, the remaining balance of your deferred sales
charge for that year will be deducted, along with the estimated costs of
selling Portfolio securities. If you roll over to a successor Portfolio, if
available, the initial sales charge will be waived. You will only pay the
deferred sales charge.
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of your
investment dollars to work for you.
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Amount Total Two-Year Sales Charge
Purchased as a % of Public Offering Price
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Less than $50,000 4.50%
$50,000 to $99,999 4.25
$100,000 to $249,999 3.75
$250,000 to $999,999 3.50
$1,000,000 or more 2.75
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Take Stock in America Today!
You can get started with the Premier American Portfolio for about $250 for
regular or IRA accounts. Contact your financial professional for a free
prospectus containing more complete information, including all sales charges,
expenses and risks. Be sure to read it carefully before you invest or send
money.
Defined Asset Funds
Buy With Knowledge o Hold With Confidence
[logo]
EQUITY INVESTOR FUNDS
Other Concept Series
Health Care Trust (Pharmaceutical & Biotechnology Portfolio)
Premier World Portfolio
Real Estate Income Trust
Tele-Global Trust
Utility Portfolio
Select Series
Select Ten Portfolio
(DJIA)
United Kingdom Portfolio
(Financial Times Index)
Select Growth Portfolio
Select S&P Industrial
Portfolio
Select S&P Industry
Turnaround Portfolio
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Select Standard & Poor's
Intrinsic Value Portfolio
Index Series
S&P 500 Trust
S&P MidCap Trust
FIXED INCOME FUNDS
Corporate Funds
Government Funds
Municipal Funds
[Recycle logo] Printed on recycled Paper 15570BR-2/99
[Copyright logo] 1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
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