<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 10, 2000
REGISTRATION NO. 333-30446
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------------
AMENDMENT NO. 1
TO
FORM S-6
-------------------------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
-------------------------------------
A. EXACT NAME OF TRUST:
CORPORATE INCOME FUND
PREFERRED SECURITIES PORTFOLIO SERIES 101
DEFINED ASSET FUNDS
B. NAME OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INC.
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
C. COMPLETE ADDRESS OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
UNIT INVESTMENT TRUST DIVISION
P.O. BOX 9051
PRINCETON, NJ 08543-9051
<TABLE>
<S> <C> <C>
DEAN WITTER REYNOLDS INC.
TWO WORLD TRADE
CENTER--59TH FLOOR
NEW YORK, NY 10048 PAINEWEBBER INCORPORATED
1285 AVENUE OF THE
AMERICAS
NEW YORK, NY 10019
</TABLE>
D. NAMES AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
<TABLE>
<S> <C> <C>
DOUGLAS LOWE, ESQ. TERESA KONCICK, ESQ. ROBERT E. HOLLEY
DEAN WITTER REYNOLDS INC. P.O. BOX 9051 1200 HARBOR BLVD.
TWO WORLD TRADE PRINCETON, NJ 08543-9051 WEEHAWKEN, NJ 07087
CENTER--59TH FLOOR
NEW YORK, NY 10048
COPIES TO:
PIERRE DE SAINT PHALLE,
ESQ.
450 LEXINGTON AVENUE
NEW YORK, NY 10017
</TABLE>
E. TITLE OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Beneficial Interest pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended.
F. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of the Registration Statement.
/X/ Check box if it is proposed that this registration statement will become
effective upon filing on August 10, 2000 pursuant to Rule 487.
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--------------------------------------------------------------------------------
<PAGE>
DEFINED ASSET FUNDS--REGISTERED TRADEMARK--
----------------------------------------------------
CORPORATE INCOME FUND
PREFERRED SECURITIES PORTFOLIO
SERIES 101
(A UNIT INVESTMENT TRUST)
- DESIGNED FOR TOTAL RETURN
-- CURRENT INTEREST INCOME
-- CAPITAL APPRECIATION
- MONTHLY INCOME DISTRIBUTIONS
SPONSORS: -----------------------------------------------------
MERRILL LYNCH, The Securities and Exchange Commission has not
PIERCE, FENNER & SMITH approved or disapproved these Securities or passed
INCORPORATED upon the adequacy of this prospectus. Any
DEAN WITTER REYNOLDS INC. representation to the contrary is a criminal offense.
PAINEWEBBER INCORPORATED Prospectus dated August 10, 2000.
<PAGE>
--------------------------------------------------------------------------------
Defined Asset Funds--Registered Trademark--
Defined Asset Funds-Registered Trademark- is America's oldest and largest family
of unit investment trusts, with over $160 billion sponsored over the last 28
years. Defined Asset Funds has been a leader in unit investment trust research
and product innovation. Our family of Funds helps investors work toward their
financial goals with a full range of quality investments, including municipal,
corporate and government bond portfolios, as well as domestic and international
equity portfolios.
Defined Asset Funds offer a number of advantages:
- A disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
- Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
- Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
- Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
- Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, risk tolerance 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.
<TABLE>
<S> <C>
CONTENTS
PAGE
--
Risk/Return Summary and Portfolio.... 3
What You Can Expect From Your
Investment......................... 6
Monthly Income..................... 6
Return Figures..................... 6
Records and Reports................ 6
The Risks You Face................... 7
Interest Rate Risk................. 7
Call Risk.......................... 7
Reduced Diversification Risk....... 7
Liquidity Risk..................... 7
Concentration Risk................. 7
Tax Risk........................... 8
Rating Risk........................ 8
Litigation Risk.................... 8
Selling or Exchanging Units.......... 8
Sponsors' Secondary Market......... 8
Selling Units to the Trustee....... 9
Exchange Option.................... 9
How The Fund Works................... 10
Pricing............................ 10
Evaluations........................ 10
Income............................. 10
Expenses........................... 10
Portfolio Changes.................. 11
Fund Termination................... 11
Certificates....................... 12
Trust Indenture.................... 12
Legal Opinion...................... 13
Auditors........................... 13
Sponsors........................... 13
Trustee............................ 13
Underwriters' and Sponsors'
Profits.......................... 13
Public Distribution................ 14
Code of Ethics..................... 14
Year 2000 Issues................... 14
Advertising and Sales Literature... 14
Taxes................................ 15
Supplemental Information............. 17
Financial Statements................. 18
Report of Independent Accountants.. 18
Statement of Condition............. 18
</TABLE>
2
<PAGE>
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RISK/RETURN SUMMARY
<TABLE>
<C> <S>
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks total return through a
combination of current interest income
and capital appreciation by investing in
a fixed portfolio consisting primarily of
long-term trust preferred securities.
2. WHAT ARE TRUST PREFERRED SECURITIES?
- When a company issues trust preferred
securities it first creates a trust.
- The company then signs a junior
subordinated debenture and deposits it
into the trust. The debenture is the
trust's only asset.
- The trust issues securities (trust
preferred securities) that have terms
identical to the debenture. When the
company makes interest payments on the
debenture, that money is used to make
payments on the trust preferred
securities.
- From an investor's perspective, investing
in the company's trust preferred
securities is just like purchasing the
company's unsecured junior subordinated
debt. The trust preferred securities and
the junior subordinated debentures rank
senior to the company's common and
preferred stock and junior to the
company's senior debt, subordinated debt
and other indebtedness.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 20
trust preferred securities with an
aggregate face amount of $10,000,000 and
some U.S. Treasury notes reserved to pay
the deferred sales fee. The Fund is a
unit investment trust which means that,
unlike a mutual fund, the Fund's
portfolio is not managed. The securities
in the Portfolio were selected by the
Agent for the Sponsors. The criteria used
in the selection process is as follows:
(1) issues must have at least three to
five years of call protection;
(2) no sinking funds, adjustables,
exchangeable capital securities
(X-caps) or partnerships;
(3) issues must have investment grade
ratings (baa3/ BBB- or better);
(4) the credit outlook for the issuer
should be stable to improving, and not be
on credit watch for a downgrade;
(5) maximum premium of 4% over the call
prices;
(6) NYSE listing; and
(7) more than $30 million of debt
outstanding.
- 37% of the securities are rated in the
category BBB and 63% of the securities
are rated A or better by Standard &
Poor's, Moody's or Duff & Phelps.
The Portfolio consists of securities in
the following industries:
</TABLE>
<TABLE>
- Banking 15%
<C> <S>
- Electric Utility 19%
- Financial 19%
- Insurance 10%
- Manufacturing 20%
- Oil/Gas 15%
- U.S. Government 2%
</TABLE>
<TABLE>
<C> <S>
4. WHAT IS PARTIAL CALL PROTECTION?
In periods of falling interest rates,
securities may be prepaid or "called" at
the option of the issuer before its
expected maturity. However, the
securities in this Fund have partial call
protection meaning that the issuer may
not call the securities for a number of
years, at least 3, and after that, the
securities generally may only be called
at par.
</TABLE>
<TABLE>
<C> <S>
5. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates and an issuer's
worsening financial condition can reduce
the price of your units.
- Generally, securities with longer
maturities will change in value more than
securities with shorter maturities.
- 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.
- If securities are called or sold before
they mature, your income will decline and
you may not be able to reinvest the money
you receive at as high a yield or as long
a maturity.
</TABLE>
3
<PAGE>
--------------------------------------------------------------------------------
Defined Portfolio
-------------------------------------------------------------------
Preferred Securities Portfolio Series 101
<TABLE>
<CAPTION>
RATINGS OF COST
PORTFOLIO TITLE COUPON MATURITY (1) ISSUES (2) TO FUND (3)
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------
BANKING (15%)
1. $550,000 NAB Capital Trust I, 8.00% Trust Preferred 8.000% 12/31/2047 a1(m) $ 519,200.00
Securities
2. $500,000 ONB Capital Trust I, 9.50% Trust Preferred 9.500 03/15/2030 baa1(m) 548,000.00
Securities
3. $500,000 Fleet Capital Trust III, 7.05% Trust Originated 7.050 03/31/2028 a2(m) 428,000.00
Preferred SecuritiesSM
ELECTRIC UTILITIES (19%)
4. $400,000 TXU Capital II, 8.70% Trust Originated 8.700 12/31/2034 BBB- 402,400.00
Preferred SecuritiesSM
5. $400,000 DQE Capital Corporation, 8.375% Public Income 8.375 09/15/2039 BBB 400,000.00
Notes
6. $550,000 Penelec Capital Trust, 7.34% Trust Originated 7.340 09/01/2039 a3(m) 497,200.00
Preferred SecuritiesSM
7. $550,000 Met - Ed Capital Trust, 7.35% Trust Preferred 7.350 09/01/2039 a3(m) 497,200.00
Securities
FINANCIAL (19%)
8. $500,000 AT&T Capital Corporation, 8.125% Senior Public 8.125 12/15/2028 A+ 495,000.00
Income Notes
9. $450,000 Citigroup Capital V, 7.00% Trust Preferred 7.000 11/15/2028 aa2(m) 405,000.00
Securities
10. $500,000 American Express Capital Trust I, 7.00% 7.000 07/16/2028 a1(m) 449,000.00
Cumulative Quarterly Income Preferred Securities, Series
A
11. $500,000 Household Capital Trust V, 10.00% Trust 10.000 06/30/2030 BBB+ 525,000.00
Preferred Securities
</TABLE>
----------------------------
(1) Approximately 39% of the Securities are callable beginning in 2003, 43% are
callable beginning in 2004 and the remaining are callable beginning in
2005. Redemption pursuant to refunding redemption provisions generally will
occur at times when the redeemed Preferred Stocks have an offering side
valuation which represents a premium over par or stated value. If the
Securities were deposited in the Fund at a price higher than the price at
which they are redeemed, this will represent a loss of capital. However, if
the Securities were acquired at a price lower than the redemption price,
this will represent an increase in capital. The principal amount and any
premium received on redemption of Securities will be distributed to
Unitholders. Monthly income will be reduced by the amount of income that
would have otherwise been paid on a redeemed Security. The estimated
current return in this event may be affected by such redemptions. The
Federal tax effect of such redemptions and resultant distributions is
described later in this prospectus under "Taxes."
--------------------------------
PLEASE NOTE THAT IF THIS PROSPECTUS IS USED AS A PRELIMINARY
PROSPECTUS
FOR A FUTURE FUND IN THIS SERIES, THE PORTFOLIO WILL CONTAIN
DIFFERENT
SECURITIES FROM THOSE DESCRIBED ABOVE.
<PAGE>
--------------------------------------------------------------------------------
Defined Portfolio--Continued
-------------------------------------------------------------------
Preferred Securities Portfolio Series 101
<TABLE>
<CAPTION>
RATINGS OF COST
PORTFOLIO TITLE COUPON MATURITY (1) ISSUES (2) TO FUND (3)
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------
INSURANCE (10%)
12. $550,000 Ace Capital Trust I, 8.875% Trust Originated 8.875% 12/31/2029 a2(m) $ 550,000.00
Preferred SecuritiesSM
13. $500,000 American General Capital I, 7.875% Trust 7.875 09/30/2048 A 496,000.00
Originated Preferred SecuritiesSM
MANUFACTURING (20%)
14. $500,000 Transcanada Pipeline LTD, 8.25% Trust 8.250 10/01/2047 a3(m) 470,000.00
Originated Preferred SecuritiesSM
15. $500,000 Cameco Corp., 8.75% Trust Preferred Securities 8.750 09/30/2047 baa1(m) 453,000.00
16. $500,000 Magna International Inc., 8.875% Cumulative 8.875 09/21/2048 BBB+ 486,000.00
Quarterly Income Preferred Securities, Series B
17. $500,000 Motorola Capital Trust I, 6.68% Trust 6.680 03/31/2039 a1(m) 437,000.00
Originated Preferred SecuritiesSM
OIL/GAS (15%)
18. $500,000 Coastal Finance I, 8.375% Trust Originated 8.375 06/30/2038 BBB- 464,000.00
Preferred SecuritiesSM
19. $550,000 Sempra Energy Capital Trust I, 8.90% Cumulative 8.900 02/23/2030 a3(m) 561,000.00
Quarterly Income Preferred Securities, Series A
20. $500,000 Alberta Energy, 9.50% Trust Preferred 9.500 09/30/2048 baa2(m) 503,000.00
Securities
U.S. GOVERNMENT (2%)
21. $250,000 United States Treasury Notes (4) 6.250 02/28/02- AAA 250,559.50
02/15/03
-------------
$9,836,559.50
=============
</TABLE>
----------------------------
(2) Quality ratings on preferred securities are expressed by symbols like those
used in rating bonds. They are independent of bond ratings, however, in the
sense that they are not necessarily downgraded when the debt of the same
company is downgraded. All ratings are by Standard & Poor's Ratings Group
unless followed by "(m)", which indicates a Moody's Investors Service
rating; by "(f)", which indicates a Fitch IBCA, Inc. rating or by "(d)",
which indicates a Duff & Phelps Credit Rating Co. rating. Ratings A through
AAA indicate good to highest quality bonds with a strong to very strong
capacity to pay interest and repay principal. "NR" indicates that no rating
has been assigned.
(3) 64% of the securities were deposited at a discount from par, 9% at par and
27% at a premium. Sponsors' profit on deposit was $64,978.25.
(4) The interest and principal on these securities will be used to pay the
deferred sales charge obligations of the investors, and these amounts are
not included in the calculation of Estimated Current and Long Term Returns.
--------------------------------
PLEASE NOTE THAT IF THIS PROSPECTUS IS USED AS A PRELIMINARY
PROSPECTUS
FOR A FUTURE FUND IN THIS SERIES, THE PORTFOLIO WILL CONTAIN
DIFFERENT
SECURITIES FROM THOSE DESCRIBED ABOVE.
<PAGE>
--------------------------------------------------------------------------------
RISK/RETURN SUMMARY (CONTINUED)
<TABLE>
<C> <S>
- 37% of the Portfolio securities are rated
in the BBB category, which is the lowest
"investment grade" rating assigned. These
securities 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 securities than is the
case with higher rated securities.
- From an investor's point of view, trust
preferred securities are designed to
create the same business risk as if the
investor had bought the company's
unsecured junior subordinated debt with
the same terms directly from the company.
These risks are more fully discussed
later in this prospectus under
Concentration Risk.
6. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want current monthly income.
You will benefit from a professionally
selected and supervised portfolio whose
risk is reduced by investing in
securities 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 or if you cannot tolerate any
risk.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME AND ESTIMATING YOUR RETURN
</TABLE>
<TABLE>
<C> <S> <C>
WHAT YOU MAY EXPECT
Regular Monthly Income per 1,000 units
(beginning 9/25/00): $ 6.69
Annual Income per 1,000 units: $80.29
RECORD DAY: 10th day of each month
THESE FIGURES ARE ESTIMATES ON THE BUSINESS DAY BEFORE
THE INITIAL DATE OF DEPOSIT; ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S> <C>
Estimated Current Return 8.07%
Estimated Long Term Return 8.11%
THESE RETURNS WILL VARY (SEE PAGE 6)
</TABLE>
<TABLE>
<C> <S>
7. 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.
</TABLE>
<TABLE>
<C> <S> <C>
INVESTOR FEES
3.50%
Maximum Sales Fee (Load) on new
purchases (as a percentage of $1,000
invested)
</TABLE>
<TABLE>
<C> <S>
You will pay an up-front sales fee of 1.00%, as
well as a total deferred sales fee of $25.00
(beginning in February, 2001, four quarterly
payments of $3.13 per 1,000 units and then four
quarterly payments of $3.12 per 1,000 units).
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.
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 3.50%
$100,000 to $249,999 3.25%
$250,000 to $499,999 3.00%
$500,000 to $999,999 2.75%
$1,000,000 and over 2.50%
Maximum Exchange Fee 2.50%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AS A % OF AMOUNT
$1,000 PER 1,000
INVESTED UNITS
--------- ---------
<C> <S> <C> <C>
.079 % $0.72
Trustee's Fee
.061 % $0.56
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
.035 % $0.32
Evaluator's Fee
.036 % $0.33
Other Operating Expenses
------- -----
.211 % $1.93
TOTAL
</TABLE>
<TABLE>
<C> <S>
The Sponsors historically paid updating
expenses.
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER 1,000
UNITS
---------
<C> <S> <C>
$ 2.00
ORGANIZATION COSTS (deducted from
Fund assets at the close of the
initial offering period)
</TABLE>
<TABLE>
<C> <S>
EXAMPLE
This example may help you compare the
cost of investing in the Fund to the cost
of investing in other funds.
The example assumes that you invest
$10,000 in the Fund for the periods
indicated and sell all your units at the
end of those periods. The example also
assumes a 5%
</TABLE>
4
<PAGE>
--------------------------------------------------------------------------------
RISK/RETURN SUMMARY (CONTINUED)
<TABLE>
<C> <S>
return on your investment each year and
that the Fund's operating expenses stay
the same. Although your actual costs may
be higher or lower, based on these
assumptions your costs would be:
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
$409 $493 $585 $854
</TABLE>
<TABLE>
<C> <S>
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not
managed and securities are not sold
because of market changes. However, the
Fund may sell a security if certain
adverse credit or other conditions exist
(for example, if the credit quality of
any security's parent debt falls below
BBB-).
9. HOW DO I BUY UNITS?
You can buy units from any of the
Sponsors and other broker-dealers. 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 $995.34
(as of August 9, 2000)
Unit price is based on the net asset
value of the Fund plus the up-front sales
fee. Unit price also includes the
estimated organization costs shown on the
previous page. An independent evaluator
prices the securities at 3:30 p.m.
Eastern time every business day. Unit
price changes every day with changes in
the prices of the securities in the Fund.
UNIT PAR VALUE $1.00
Unit par value means the total amount of
money you should generally receive on
each unit by the termination of the Fund
(other than income and premium on the
securities). This total amount assumes
that all securities in the Fund are
either paid at maturity or called by the
issuer at par or are sold by the Fund at
par. If you sell your units before the
Fund terminates, you may receive more or
less than the unit par value.
10. HOW DO I SELL UNITS?
You may sell your units at any time to
any of the Sponsors 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.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly. Interest on
the securities in the Fund is subject to
federal income taxes for U.S. investors,
but if you are a non-U.S. investor, your
interest may be exempt from U.S. federal
income taxes, including withholding
taxes. Interest on the U.S. Treasury
notes will be exempt from state and local
personal income taxes.
12. WHAT OTHER SERVICES ARE AVAILABLE?
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.
REINVESTMENT
You will receive your monthly income in
cash unless you choose to compound your
income by reinvesting at no sales fee in
the Corporate Fund Investment
Accumulation Program, Inc. This Program
is an open-end mutual fund with a
comparable investment objective. Income
from this Program will be subject to U.S.
federal income taxes for both U.S. and
foreign investors. 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.
</TABLE>
5
<PAGE>
--------------------------------------------------------------------------------
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
- elimination of one or more securities from the Fund's portfolio because of
calls, redemptions or sales;
- a change in the Fund's expenses; or
- the failure by a securities issuer to pay interest.
Changes in interest rates generally will not affect your monthly income because
the portfolio is fixed.
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 securities 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 securities in the
Fund. It is an average of the yields to maturity (or in certain cases, to an
earlier call date) of the individual securities 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 security's yield by its market
value and the time remaining to the call or maturity date.
Yields on individual securities depend on many factors including general
conditions of the preferred security markets, the size of a particular offering
and the maturity and quality rating of the particular issues. Yields can vary
among securities with similar maturities, coupons and ratings.
These return quotations are designed to be comparative rather than predictive.
RECORDS AND REPORTS
You will receive:
- a monthly statement of income payments;
- a notice from the Trustee when new securities are deposited in exchange or
substitution for securities 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 INCOME RECEIVED DURING THE YEAR.
You may request:
- copies of security 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.
6
<PAGE>
THE RISKS YOU FACE
INTEREST RATE RISK
Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, securities with longer maturities
will change in value more than securities with shorter maturities. Securities in
the Fund are more likely to be called when interest rates decline. This may
result in early termination of the Fund. Of course, we cannot predict how
interest rates may change.
CALL RISK
Many securities can be prepaid or "called" by the issuer before their stated
maturity.
For example, an issuer might call its securities if it no longer needs the money
for the original purpose or, during periods of falling interest rates, if the
issuer's preferred securities have a coupon higher than current market rates. If
the securities 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 security will reduce your return.
REDUCED DIVERSIFICATION RISK
If many investors sell their units, the Fund will have to sell securities. This
could reduce the diversification of your investment and increase your share of
Fund expenses.
LIQUIDITY RISK
The securities 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 securities to the Sponsors. The value of the
securities, and of your investment, may be reduced if trading in securities is
limited or absent. As a result, you would generally be required to include
original issue discount in respect of those junior subordinated debentures in
income during the deferral period. After the deferral period, you would include
original issue discount in income, rather than the amount of interest paid on
the junior subordinated debentures.
CONCENTRATION RISK
When a certain type of security makes up 25% or more of the portfolio, the Fund
is said to be "concentrated" in that security type, which makes the Fund less
diversified.
Here is what you should know about the Fund's concentration in trust preferred
securities.
- From an investor's point of view, trust preferred securities (TPS) are
designed to create the same business risk as if the investor had bought
unsecured junior subordinated debt of the company establishing the trust
(the "parent company") with the same terms. Each trust's ability to pay
distributions on its TPS is solely dependent on the parent company
fulfilling its obligations with respect to the payment of interest on its
junior subordinated debentures that are the trust's sole asset.
- Investors have no right to accelerate the TPS or the junior subordinated
debentures for non-payment.
- The parent company may cause a deferral of cash distributions at any time
during the life of the TPS. The parent company may cause more than one
deferral but no deferral may last longer than 10 consecutive semi-annual
periods. During any deferral period, the parent company may not pay
dividends
7
<PAGE>
on its common stock or preferred stock and may not make certain other
payments. During any deferral period, investors will be taxed as if the Fund
had received current income. A holder that disposes of TPS during a period
of deferred payments may not receive the same return on its investment as a
holder that continues to hold TPS. There is no guarantee that payments will
not be deferred.
- The TPS are subject to redemption at the option of the parent company after
at least 3 years at par. In addition, if the favorable tax or regulatory
treatment of the TPS were to change, the parent company generally may redeem
the TPS at par at anytime or exchange the TPS for the junior subordinated
debentures. There is no guarantee that the TPS will not be redeemed prior to
maturity.
TAX RISK
Future tax legislation or positions taken by the Internal Revenue Service could
affect the value of the Portfolio by characterizing obligations such as the
junior subordinated debentures as equity. Congress has considered proposals to
that effect in the past and may do so again in the future. In addition, the
Trust Preferred Securities could be characterized as equity interests in the
issuing corporation.
RATING RISK
A reduction in a security's rating may decrease its value and, indirectly, the
value of your investment in the Fund.
LITIGATION RISK
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:
- ADDING the value of the securities, net 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.
As of the close of the initial offering period, the price you receive will be
reduced to reflect estimated organization costs.
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
8
<PAGE>
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 Sponsors will select securities to be sold. Securities will be selected
based on market and credit factors. These sales could be made at times when the
securities 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 securities and cash with a total value equal to the price
of those units. The Trustee will try to distribute securities in the portfolio
pro rata, but it reserves the right to distribute only one or a few securities.
The Trustee will act as your agent in an in kind distribution and will either
hold the securities 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
securities 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
securities 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 2.50%. 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
9
<PAGE>
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
In addition, a portion of the price of a unit also consists of cash to pay all
or some of the costs of organizing the Fund including:
- cost of initial preparation of legal documents;
- federal and state registration fees;
- initial fees and expenses of the Trustee;
- initial audit; and
- legal expenses and other out-of-pocket expenses.
EVALUATIONS
An independent Evaluator values the securities 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).
Preferred Security values are based on current bid or offer prices for the
securities or comparable securities.
INCOME
- The annual income per unit, after deducting estimated annual Portfolio
expenses per unit, will depend primarily upon the amount of interest paid by
the issuers of the securities and changes in the expenses of the Portfolio
and, to a lesser degree, upon the level of purchases of additional
securities and sales of securities.
- Each unit receives an equal share of distributions of income net of
estimated expenses. Each investor's monthly income distribution will equal
approximately one-twelfth of the investor's pro rata share of the estimated
annual income to the Income Account, after deducting estimated expenses. The
Trustee credits interest received 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
10
<PAGE>
- Fund termination expenses and any governmental charges.
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; the Sponsors historically paid these amounts.
The Sponsors are currently reimbursed up to 55 CENTS per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. While this
fee may exceed the amount of these costs and expenses attributable to this Fund,
the total of these fees for all Series of Defined Asset Funds will not exceed
the aggregate amount attributable to all of these Series for any calendar year.
The Fund also pays the Evaluator's fees.
The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.
Quarterly deferred sales charges you owe are paid with principal from certain
securities. 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 securities if cash is not available.
PORTFOLIO CHANGES
The Sponsors and Trustee are not liable for any default or defect in a security;
if a contract to buy any security fails in the first 90 days of the Fund, we
generally will deposit a replacement corporate security with a similar yield,
maturity, rating and price.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
securities in the portfolio even if their credit quality declines or other
adverse financial circumstances occur. However, we may sell a security in
certain cases if we believe that certain adverse credit or certain other
conditions exist (e.g., if the credit quality of any security falls below BBB-).
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 securities 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
security in the
11
<PAGE>
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 securities 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 securities, and you will receive your final
distribution. Any security 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 securities. 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% 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 determines 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.
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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 92.00%
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048 4.00%
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019 4.00%
100.00%
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
Sponsors to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
TRUSTEE
The Bank of New York, Unit Trust Department, P.O. 974, Wall Street Division, New
York, New York 10268-0974, is the Trustee. It is supervised by the Federal
Deposit Insurance Corporation, the Board of Governors of the Federal Reserve
System and New York State banking authorities.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. The Sponsors also
realize a profit or loss on deposit of the securities 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.
A Sponsor or Underwriter may realize profits or sustain losses on securities in
the Fund which were acquired from
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<PAGE>
underwriting syndicates of which it was a member. None of the securities in the
Portfolio were bought from any of the Sponsors (as sole underwriter, managing
underwriter or member of an underwriting syndicate).
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
During the initial offering period, units will be distributed to the public by
the Sponsors and dealers who are members of the National Association of
Securities Dealers, Inc. This period is 30 days or less if all units are sold.
The Sponsors may extend the initial period up to 120 days.
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.
In the initial offering period, the concession to dealers will be $24 per 1,000
units. We may change the concession at any time. Dealers may resell units to
other dealers with a concession not in excess of the original concession to
dealers.
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 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 issues of the Securities contained in a Fund. We cannot
predict whether any impact will be material to the Portfolio as a whole.
ADVERTISING AND SALES LITERATURE
Sales material may discuss developing a long-term financial plan, working with
your financial professional; the nature and risks of various investment
strategies and Defined Asset Funds that could help you toward your financial
goals and the importance of discipline; how securities are selected for these
funds, how the funds are created and operated, features such as convenience and
costs, and options available for certain types of funds including automatic
reinvestment, rollover, exchanges and redemption. It may also summarize some
similarities and differences with mutual funds and discuss
14
<PAGE>
the philosophy of spending time in the market rather than trying to time the
market, including probabilities of negative returns over various holding
periods.
Advertising and sales literature may state past total return performance of the
Portfolio for various periods. Returns are computed by taking price changes for
the period plus income reinvested, divided by the initial public offering price,
and reflecting deduction of maximum Portfolio sales charges and expenses. For
periods of more than a year, average annualized returns shall be stated, which
may be accompanied with no greater prominence by statement of cumulatiave total
returns. Returns without reflecting deduction of sales charges or only of
deferred sales charges may also be stated with no greater prominence than total
returns reflecting deduction of all sales charges when the different basis of
computation is disclosed.
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. You should
consult your own tax adviser about your particular circumstances.
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 Security in the Fund.
Income from the Fund will generally be considered interest income for federal
income tax purposes and be taxed at ordinary income rates. You will be
considered to receive your share of any interest when that interest is received
by the Fund, regardless of whether the interest is reinvested or a portion is
used to pay fund expenses. Please consult your tax adviser in this regard.
Each issuer has, at the time of issuance of the Trust Preferred Securities,
expressed a belief that its Trust Preferred Securities were not issued with
original issue discount for federal income tax purposes. If, however, an issuer
exercises its right to defer interest payments, then its junior subordinated
debentures will be considered to be retired and reissued, giving rise to
original issue discount. You should consult your tax adviser in this regard.
GAIN OR LOSS UPON DISPOSITION
You will generally recognize capital gain or loss when you dispose of your units
for cash (by sale or redemption), when you exchange your units for units of
another Defined Fund or when the Trustee disposes of Securities in the
Portfolio.
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 security when you purchase a unit is less than its
stated redemption price at maturity (or, if it is an original issue discount
security, the issue price increased by original issue discount that has accrued
before your purchase). You should consult your tax adviser in this regard.
You generally will not recognize gain or loss on an "in-kind" distribution to
you of your
15
<PAGE>
proportional share of the Portfolio Securities, whether it is in redemption of
your units or upon termination of the Portfolio. Your holding period for the
distributed Securities will include your holding period in your units.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will be long-term if you are considered to have held
your investment that produces the gain or loss 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. You
should consult your tax adviser in this regard.
YOUR TAX BASIS IN THE SECURITIES
Your aggregate basis in units that you have purchased for cash will be equal to
the cost of the units, including the sales fee, and may be subject to certain
adjustments. You should consult your tax adviser in this regard.
You should not increase your basis in your units by deferred sales charges or
organizational expenses. The tax reporting form and annual statements you
receive will be based on the net amounts paid to you, from which these expenses
will already have been deducted. Your basis in Securities distributed to you
will be the same as the portion of your basis in your units that is attributable
to the distributed Securities and your holding period for distributed securities
will include your holding period in your units.
EXPENSES
If you are an individual who itemizes deductions, you may deduct your share of
Fund expenses, but only to the extent that such amount, together with your other
miscellaneous deductions, exceeds 2% of your adjusted gross income. Your ability
to deduct Portfolio expenses will be limited further if your adjusted gross
income exceeds a specified amount, currently $128,950 ($64,475 for a married
person filing separately).
STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation, and the income of the Fund will be treated as the
income of the investors in the same manner as for federal income tax purposes.
Interest on the U.S. Treasury Notes will be exempt from state and local personal
income taxes.
FOREIGN INVESTORS
If you are a foreign investor and you are not engaged in a U.S. trade or
businesses, you generally will not be subject to U.S. federal income tax, or
withholding tax, on your share of interest income or gain on a Security issued
after July 18, 1984, if you meet certain requirements, including the
certification of foreign status and other matters. If the junior subordinated
debentures or the Trust Preferred Securities were characterized as equity
interests in the issuing corporation (see "Tax Risk"), you generally would be
subject to withholding tax at a rate of 30% (or at a lower applicable treaty
rate). You should consult your tax adviser about the possible application of
federal, state and local, and foreign taxes.
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<PAGE>
RETIREMENT PLANS
You may wish to purchase units for an Individual Retirement Account (IRA) or
other retirement plan. Generally, capital gains and income received in each of
these plans are exempt from federal taxation. All distributions from such plans
are generally treated as ordinary income but may, in some cases, be eligible for
tax-deferred rollover treatment. You should consult your attorney or tax adviser
about the specific tax rules relating to these plans. These plans are offered by
brokerage firms, including the Sponsors of this Fund, and other financial
institutions. Fees and charges with respect to such plans may vary.
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 securities that may be in the Fund's portfolio, general risk
disclosure concerning any insurance securing certain securities, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.
17
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REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders of Corporate Income Fund, Preferred Securities
Portfolio Series 101, Defined Asset Funds (the "Fund"):
We have audited the accompanying statement of condition and the related defined
portfolio included in the prospectus of the Fund as of August 10, 2000. This
financial statement is the responsibility of the Trustee. Our responsibility is
to express an opinion on this financial statement 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
statement is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. Our procedures included confirmation of cash and an irrevocable
letter of credit deposited for the purchase of securities, as described in the
statement of condition, with 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 statement referred to above presents fairly, in
all material respects, the financial position of the Fund as of August 10, 2000
in accordance with accounting principles generally accepted in the United States
of America.
DELOITTE & TOUCHE LLP
NEW YORK, NY
AUGUST 10, 2000
STATEMENT OF CONDITION AS OF AUGUST 10, 2000
TRUST PROPERTY
<TABLE>
<S> <C>
Investments--Contracts to purchase Securities(1) $ 9,836,559.50
Cash 20,000.00
--------------------
Total $ 9,856,559.50
====================
LIABILITIES AND INTEREST OF HOLDERS
Liabilities:
Reimbursement of Sponsors for Organization
Expenses (2) $ 20,000.00
--------------------
Subtotal 20,000.00
--------------------
Interest of Holders of 10,000,000 Units of fractional
undivided interest outstanding:
Cost to investors (2)(3)(4) 9,953,359.50
Organization Expenses (2) and gross
underwriting commissions (3) (116,800.00)
--------------------
Subtotal 9,836,559,50
--------------------
Total $ 9,856,559.00
====================
</TABLE>
------------
(1) Aggregate cost to the Fund of the securities listed under Defined
Portfolio is based upon the offer side evaluation determined by the Evaluator at
the evaluation time on the business day prior to the Initial Date of Deposit.
The contracts to purchase the securities are collateralized by an irrevocable
letter of credit which has been issued by San Paolo Bank, New York Branch, in
the amount of $12,000,000 and deposited with the Trustee for the purchase of
$10,250,000 face amount of securities.
(2) A portion of the Unit Price consists of cash in an amount sufficient
to pay for costs incurred in establishing the Fund. These costs have been
estimated at $2.00 per 1,000 Units. A distribution will be made at the close of
the initial offering period to an account maintained by the Trustee from which
the organization expense obligation of the investors to the Sponsors will be
satisfied. If the actual organization costs exceed the estimated aggregate
amount shown above, the Sponsors will pay for this excess amount.
(3) Assumes the maximum up-front sales fee per 1,000 units of 1.00% of
the Unit Price. A mandatory distribution of $3.13 per 1,000 Units in the first
year and $3.12 per 1,000 units in the second year is payable quarterly up to an
aggregate of $25.00 over approximately a two-year period. Distributions will be
made to an account maintained by the Trustee from which the deferred sales
charge obligation of the investors to the Sponsors will be satisfied. If units
are redeemed prior to the end of the second anniversary of the Fund, the
remaining portion of the deferred sales charge distribution will be transferred
to the account on the redemption date.
(4) Aggregate Unit Price computed on the basis of the offer side
evaluation of the underlying securities as of the evaluation time on the
business day prior to the Initial Date of Deposit.
18
<PAGE>
Defined
Asset Funds-Registered Trademark->
<TABLE>
<S> <C>
HAVE QUESTIONS ? CORPORATE INCOME FUND
Request the most PREFERRED SECURITIES PORTFOLIO SERIES
recent free Information 101
Supplement that gives more (A Unit Investment Trust)
details about the Fund, ---------------------------------------
by calling: This Prospectus does not contain
The Bank of New York complete information about the
1-800-221-7771 investment company filed with the
Securities and Exchange Commission in
Washington, D.C. under the:
- Securities Act of 1933 (file no.
333-30446) and
- Investment Company Act of 1940 (file
no. 811-2295).
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.
10429RR--08/00
</TABLE>
<PAGE>
PART II
ADDITIONAL INFORMATION NOT INCLUDED IN THE
PROSPECTUS
<TABLE>
<S> <C> <C>
A. The following information relating to the Depositors is incorporated by reference to the SEC filings
indicated and made a part of this Registration Statement.
</TABLE>
I. Bonding arrangements of the Depositors are incorporated by reference to Item
A of Part II to the Registration Statement on Form S-6 under the Securities Act
of 1933 for Municipal Investment Trust Fund, Monthly Payment Series--573 Defined
Asset Funds (Reg. No. 333-08241).
II. The date of organization of the Depositors is set forth in Item B of Part
II to the Registration Statement on Form S-6 under the Securities Act of 1933
for Municipal Investment Trust Fund, Monthly Payment Series--573 Defined Asset
Funds (Reg. No. 333-08241) and is herein incorporated by reference thereto.
III. The Charter and By-Laws of the Depositors are incorporated herein by
reference to Exhibits 1.3 through 1.12 to the Registration Statement on Form S-6
under the Securities Act of 1933 for Municipal Investment Trust Fund, Monthly
Payment Series--573 Defined Asset Funds (Reg. No. 333-08241).
IV. Information as to Officers and Directors of the Depositors has been filed
pursuant to Schedules A and D of Form BD under Rules 15b1-1 and 15b3-1 of the
Securities Exchange Act of 1934 and is incorporated by reference to the SEC
filings indicated and made a part of this Registration Statement:
<TABLE>
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 8-7221
Dean Witter Reynolds Inc. .................................. 8-14172
PaineWebber Incorporated.................................... 8-16267
</TABLE>
----------------------------
B. The Internal Revenue Service Employer Identification Numbers of the
Sponsors and Trustee are as follows:
<TABLE>
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 13-5674085
Dean Witter Reynolds Inc. .................................. 94-0899825
PaineWebber Incorporated.................................... 13-2638166
The Bank of New York, Trustee............................... 13-4941102
</TABLE>
II-1
<PAGE>
SERIES OF DEFINED ASSET FUNDS
DESIGNATED PURSUANT TO RULE 487 UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
SEC
FILE
SERIES NUMBER
------ ------
<S> <C>
Corporate Income Fund, Preferred Securities Portfolio Series
100, Defined Asset Funds.................................... 333-26487
</TABLE>
CONTENTS OF REGISTRATION STATEMENT
The Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet of Form S-6.
The Cross-Reference Sheet (incorporated by reference to the Cross-Reference
Sheet to the Registration Statement of Defined Asset Funds, Municipal Insured
Series, 1933 Act File No. 33-54565).
The Prospectus.
Additional Information not included in the Prospectus (Part II).
The following exhibits:
<TABLE>
<S> <C>
1.1 -- Form of Trust Indenture (incorporated by reference to Exhibit 1.1 to
the Registration Statement of Corporate Income Fund Intermediate Series
200, 1933 Act File No. 333-49975).
1.1.1 -- Form of Standard Terms and Conditions of Trust Effective October 21,
1993 (incorporated by reference to Exhibit 1.1.1 to the Registration
Statement of Municipal Investment Trust Fund, Multistate Series-48,
1933 Act File No. 33-50247).
-- Merrill Lynch Code of Ethics (incorporated by reference to Exhibit
1.11.1 1.11.1 to Post Effective Amendment No. 6 to the Registration Statement
of Corporate Income Fund, Monthly Payment Series 315, 1933 Act File
No. 33-49755).
-- Corporate Income Fund Code of Ethics (incorporated by reference to
1.11.2 Exhibit 1.11.2 to Post Effective Amendment No. 6 to the Registration
Statement of Corporate Income Fund, Monthly Payment Series 315, 1933
Act File No. 33-49755).
1.2 -- Form of Master Agreement Among Underwriters (incorporated by
reference to Exhibit 1.2 to the Registration Statement of The Corporate
Income Fund, One Hundred Ninety-Fourth Monthly Payment Series, 1933
Act File No. 2-90925).
2.1 --Form of Certificate of Beneficial Interest (included in Exhibit
1.1.1).
3.1 -- Opinion of counsel as to the legality of the securities being issued
including their consent to the use of their names under the heading "How
The Fund Works--Legal Opinion" in the Prospectus.
4.1 --Consent of the Evaluator.
5.1 --Consent of independent accountants.
9.1 -- Information Supplement (incorporated by reference to Exhibit 9.1 to
the Registration Statement of Corporate Income Fund, Intermediate Term
Series 54, 1933 Act File No. 33-57973).
</TABLE>
R-1
<PAGE>
CORPORATE INCOME FUND
PREFERRED SECURITIES PORTFOLIO SERIES 101
DEFINED ASSET FUNDS
SIGNATURES
The registrant hereby identifies the series number of Corporate Income Fund
listed on page R-1 for the purposes of the representations required by Rule 487
and represents the following:
1) That the portfolio securities deposited in the series as to which this
registration statement is being filed do not differ materially in type or
quality from those deposited in such previous series;
2) That, except to the extent necessary to identify the specific portfolio
securities deposited in, and to provide essential information for, the
series with respect to which this registration statement is being filed,
this registration statement does not contain disclosures that differ in
any material respect from those contained in the registration statements
for such previous series as to which the effective date was determined by
the Commission or the staff; and
3) That it has complied with Rule 460 under the Securities Act of 1933.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 10TH DAY OF
AUGUST, 2000.
SIGNATURES APPEAR ON PAGE R-3, R-4 AND R-5.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
<TABLE>
<S> <C>
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, File
Fenner & Smith Incorporated: Number: 333-70593
</TABLE>
GEORGE A. SCHIEREN
JOHN L. STEFFENS
JAY M. FIFE
(As authorized signatory for Merrill Lynch,
Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
<PAGE>
PAINEWEBBER INCORPORATED
DEPOSITOR
<TABLE>
<S> <C>
By the following persons, who constitute Powers of Attorney have been filed
the Board of Directors of PaineWebber under
Incorporated: the following 1933 Act File
Number: 2-61279
</TABLE>
MARGO N. ALEXANDER
TERRY L. ATKINSON
BRIAN M. BAREFOOT
STEVEN P. BAUM
MICHAEL CULP
REGINA A. DOLAN
JOSEPH J. GRANO, JR.
EDWARD M. KERSCHNER
JAMES P. MacGILVRAY
DONALD B. MARRON
ROBERT H. SILVER
MARK B. SUTTON
By ROBERT E. HOLLEY
(As authorized signatory for
PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-4
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
<TABLE>
<S> <C>
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following 1933
the Board of Directors of Dean Witter Act File Numbers: 33-17085,
Reynolds Inc.: 333-13039, 333-47553, 333-39302 and
333-89009
</TABLE>
BRUCE F. ALONSO
RICHARD M. DeMARTINI
RAYMOND J. DROP
JAMES F. HIGGINS
DONALD G. KEMPF, JR.
JOHN J. MACK
MITCHELL M. MERIN
STEPHEN R. MILLER
PHILIP J. PURCELL
JOHN H. SCHAEFER
THOMAS C. SCHNEIDER
ALAN A. SCHRODER
ROBERT G. SCOTT
By MICHAEL D. BROWNE
(As authorized signatory for
Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)
R-5
