As filed with the Securities and Exchange Commission on April 25, 1997
Registration No. 2-62505*
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT
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: NEW YORK MUNICIPAL TRUST, SERIES 1, SERIES 2,
SERIES 3, SERIES 4, SERIES 5 and SERIES 6
B. Name of depositor: REICH & TANG DISTRIBUTORS L.P.
C. Complete address of depositor's principal executive office:
600 Fifth Avenue
New York, NY 10020
D. Name and complete address of agent for service:
PETER J. DeMARCO Copy of comments to:
Executive Vice President MICHAEL R. ROSELLA, ESQ.
Reich & Tang Distributors L.P. Battle Fowler LLP
600 Fifth Avenue 75 East 55th Street
New York, NY 10020 New York, NY 10022
(212) 856-6858
It is proposed that this filing become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/x/ on April 30, 1997 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / on ( date ) pursuant to paragraph (a) of Rule 485
* The Prospectus included in this Registration Statement constitutes a
Combined Prospectus as permitted by the provisions of Rule 429 of The
General Rules and Regulations under the Securities Act of 1933 (the "Act").
Said Prospectus covers units of undivided interest in New York Municipal
Trust, Series 1, Series 2, Series 3, Series 4, Series 5 and Series 6
heretofore filed as part of separate registration statements on Form S-6
(Registration Nos. 2-62505, 2-63235, 2-63439, 2-64016, 2-64475, and
2-64913, respectively) under the Act. This filing constitutes
Post-Effective Amendment No. 20 for Series 1, Series 2 and Series 3 and
Post-Effective Amendment No. 19 for Series 4, Series 5 and Series 6.
1656.1
<PAGE>
Prospectus Part A Dated April 30, 1997
NEW YORK MUNICIPAL TRUST
SERIES 1
- ------------------------------------------------------------------------------
The Trust is a unit investment trust with an underlying
portfolio of long-term tax-exempt bonds and was formed to preserve capital and
to provide interest income (including, where applicable, earned original issue
discount) which, in the opinions of bond counsel to the respective issuers, is,
with certain exceptions, currently exempt from regular federal income tax and
New York State and New York City income taxes under existing law but may be
subject to state and local taxes in other jurisdictions. There can be no
assurance that the Trust's investment objectives will be achieved. Although the
Supreme Court has determined that Congress has the authority to subject interest
on bonds such as the Bonds in the Trust to regular federal income taxation,
existing law excludes such interest from regular federal income tax. Such
interest income may, however, be subject to federal corporate alternative
minimum tax and to state and local taxes in other jurisdictions. (See
"Description of Portfolio" in this Part A for a list of these Bonds which pay
interest income subject to the Federal individual alternative minimum tax.) In
addition, capital gains are subject to tax. (See "Tax Status" and "The
Trust--Portfolios" in Part B of this Prospectus.) The Sponsor is Reich & Tang
Distributors L.P. The value of the Units of the Trust will fluctuate with the
value of the underlying bonds. Minimum purchase: 1 Unit.
This Prospectus consists of two parts. Part A contains the
Summary of Essential Information as of December 31, 1996 (the "Evaluation
Date"), a summary of certain specific information regarding the Trust and
audited financial statements of the Trust, including the related portfolio, as
of the Evaluation Date. Part B of this Prospectus contains a general summary of
the Trust. Part A of this Prospectus may not be distributed unless accompanied
by Part B. Investors should retain both parts of this Prospectus for future
reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
THE TRUST. The Trust seeks to achieve its investment
objectives through investment in a fixed, diversified portfolio of long-term
bonds (the "Bonds") issued by or on behalf of the State of New York and its
political subdivisions, municipalities and public authorities and by the
Commonwealth of Puerto Rico and its public authorities. All of the Bonds in the
Trust were rated "A" or better by Standard & Poor's Corporation or Moody's
Investors Service, Inc. at the time originally deposited in the Trust. For a
discussion of the significance of such ratings, see "Description of Bond
Ratings" in Part B of this Prospectus. For a list of ratings on the Evaluation
Date, see "Portfolio".
Some of the Bonds in the Trust have been issued with optional
refunding or refinancing provisions ("Refunded Bonds") whereby the issuer of the
Bond has the right to call such Bond prior to its stated maturity date (and
other than pursuant to sinking fund provisions) and to issue new bonds
109802.1
<PAGE>
("Refunding Bonds") in order to finance the redemption. Issuers typically
utilize refunding calls in order to take advantage of lower interest rates in
the marketplace. Some of these Refunded Bonds may be called for redemption
pursuant to pre-refunding provisions ("Pre-Refunded Bonds") whereby the proceeds
from the issue of the Refunding Bonds are typically invested in government
securities in escrow for the benefit of the holders of the Pre- Refunded Bonds
until the refunding call date. Usually, Pre-Refunded Bonds will bear a triple-A
rating because of this escrow. The issuers of Pre- Refunded Bonds must call such
Bonds on their refunding call date. Therefore, as of such date, the Trust will
receive the call price for such bonds but will cease receiving interest income
with respect to them. For a list of those Bonds which are Pre-Refunded Bonds as
of the Evaluation Date, if any, see "Notes to Financial Statements" in this Part
A. Some of the Bonds in the portfolio may have been purchased at an aggregate
premium over par. The payment of interest and preservation of capital are, of
course, dependent upon the continuing ability of the issuers of the Bonds to
meet their obligations.
Investment in the Trust should be made with an understanding
of the risks which an investment in long-term fixed rate debt obligations may
entail, including the risk that the value of the underlying portfolio will
decline with increases in interest rates. A Trust designated as a long-term
trust must have a dollar-weighted average portfolio maturity of more than ten
years.
Each Unit in the Trust represents a 1/4731st undivided
interest in the principal and net income of the Trust. The principal amount of
Bonds deposited in the Trust per Unit is reflected in the Summary of Essential
Information. (See "The Trust--Organization" in Part B of this Prospectus.) The
Units being offered hereby are issued and outstanding Units which have been
purchased by the Sponsor in the secondary market.
PUBLIC OFFERING PRICE. The secondary market Public Offering
Price of each Unit is equal to the aggregate bid price of the Bonds in the Trust
divided by the number of Units outstanding, plus a sales charge of 4.8% of the
Public Offering Price, or 5.028% of the net amount invested in Bonds per Unit.
In addition, accrued interest to the expected date of settlement is added to the
Public Offering Price. If Units had been purchased on the Evaluation Date, the
Public Offering Price per Unit would have been $527.88 plus accrued interest of
$14.10 under the monthly distribution plan and $16.68 under the semi-annual
distribution plan for a total of $541.98 and $544.56, respectively. The Public
Offering Price per Unit can vary on a daily basis in accordance with
fluctuations in the aggregate bid prices of the Bonds. (See "Public
Offering--Offering Price" in Part B of this Prospectus.)
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. Units
of each Trust are offered to investors on a "dollar price" basis (using the
computation method described under "Public Offering -- Offering Price" in Part
B) as distinguished from a "yield price" basis often used in offerings of tax
exempt bonds (involving the lesser of the yield as computed to maturity of bonds
or to an earlier redemption date). Since they are offered on a dollar price
basis, the rate of return on an investment in Units of each Trust is measured in
terms of "Estimated Current Return" and "Estimated Long Term Return".
Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted bond
practices, which practices take into account not only the interest payable on
the Bond but also the amortization of premiums or accretion of discounts, if
any; (2) calculating the average of the yields for the Bonds in the Trust's
portfolio by weighing each Bond's yield by the market value of the Bond and by
the amount of time remaining to the date to which the Bond is priced (thus
109802.1
A-2
<PAGE>
creating an average yield for the portfolio of the Trust); and (3) reducing the
average yield for the portfolio of the Trust in order to reflect estimated fees
and expenses of the Trust and the maximum sales charge paid by investors. The
resulting Estimated Long Term Return represents a measure of the return to
investors earned over the estimated life of the Trust. (For the Estimated Long
Term Return to Certificateholders under the monthly and semi-annual distribution
plans, see "Summary of Essential Information".)
Estimated Current Return is a measure of the Trust's cash
flow. Estimated Current Return is computed by dividing the Estimated Net Annual
Interest Income per Unit by the Public Offering Price per Unit. In contrast to
the Estimated Long Term Return, the Estimated Current Return does not take into
account the amortization of premium or accretion of discount, if any, on the
Bonds in the portfolio of the Trust. Moreover, because interest rates on Bonds
purchased at a premium are generally higher than current interest rates on newly
issued bonds of a similar type with comparable rating, the Estimated Current
Return per Unit may be affected adversely if such Bonds are redeemed prior to
their maturity.
The Estimated Net Annual Interest Income per Unit of the Trust
will vary with changes in the fees and expenses of the Trustee and the Evaluator
applicable to the Trust and with the redemption, maturity, sale or other
disposition of the Bonds in the Trust. The Public Offering Price will vary with
changes in the bid prices of the Bonds. Therefore, there is no assurance that
the present Estimated Current Return or Estimated Long Term Return will be
realized in the future. (For the Estimated Current Return to Certificateholders
under the monthly and semi-annual distribution plans, see "Summary of Essential
Information". See "Estimated Long Term Return and Estimated Current Return" in
Part B of this Prospectus.)
A schedule of cash flow projections is available from the
Sponsors upon request.
DISTRIBUTIONS. Distributions of interest income, less
expenses, will be made by the Trust either monthly or semi-annually depending
upon the plan of distribution applicable to the Unit purchased. A purchaser of a
Unit in the secondary market will initially receive distributions in accordance
with the plan selected by the prior owner of such Unit and may thereafter change
the plan as provided under "Interest and Principal Distributions" in Part B of
this Prospectus. Distributions of principal, if any, will be made semi-annually
on June 15 and December 15 of each year. For estimated monthly and semi-annual
interest distributions, see "Summary of Essential Information".
MARKET FOR UNITS. The Sponsor, although not obligated to do
so, presently maintains and intends to continue to maintain a secondary market
for the Units at prices based upon the aggregate bid price of the Bonds in the
Trust portfolio. The reoffer price will be based on the aggregate bid price of
the Bonds plus a sales charge of 4.8% (5.028% of the net amount invested), plus
net accrued interest. If a market is not maintained a Certificateholder will be
able to redeem his or her Units with the Trustee at a price also based upon the
aggregate bid price of the Bonds. (See "Sponsor Repurchase" and "Offering Price"
in Part B of this Prospectus.)
TOTAL REINVESTMENT PLAN. Certificateholders under the
semi-annual plan of distribution have the opportunity to have all their regular
interest distributions, and principal distributions, if any, reinvested in
available series of "New York Municipal Trust". (See "Total Reinvestment Plan"
in Part B of this Prospectus.) The Plan is not designed to be a complete
investment program.
109802.1
A-3
<PAGE>
NEW YORK MUNICIPAL TRUST
SERIES 1
SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1996
<TABLE>
<S> <C> <C>
Date of Deposit: November 21, 1978 Evaluation Time: 4:00 p.m.
Principal Amount of Bonds ... $2,315,000 New York Time.
Number of Units ............. 4,731 Minimum Principal Distribution:
Fractional Undivided Inter- $1.00 per Unit.
est in Trust per Unit ..... 1/4731 Weighted Average Life to
Principal Amount of Maturity: 14.5 Years.
Bonds per Unit ............ $489.33 Minimum Value of Trust:
Secondary Market Public Trust may be terminated if
Offering Price** value of Trust is less than
Aggregate Bid Price $2,400,000 in principal amount
of Bonds in Trust ....... $2,377,859+++ of Bonds.
Divided by 4,731 Units .... $502.61 Mandatory Termination Date:
Plus Sales Charge of 4.8% The earlier of December 31,
of Public Offering Price $25.27 2027 or the disposition of the
Public Offering Price last Bond in the Trust.
per Unit ................ $527.88+ Trustee***: The Bank of New
Redemption and Sponsor's York.
Repurchase Price Trustee's Annual Fee: Monthly
per Unit .................. $502.61+ plan $1.08 per $1,000; and
+++ semi-annual plan $.60 per
++++ $1,000.
Excess of Secondary Market Evaluator: Kenny S&P Evaluation
Public Offering Price Services.
over Redemption and Evaluator's Fee for Each
Sponsor's Repurchase Evaluation: Minimum of $35
Price per Unit ............ $25.27++++ plus $.25 per each issue of
Difference between Public Bonds in excess of 50 issues
Offering Price per Unit (treating separate maturities
and Principal Amount per as separate issues).
Unit Premium/(Discount) ... $38.55 Sponsor: Reich & Tang
Distributors L.P.
</TABLE>
PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED
Monthly Semi-Annual
Option Option
Gross annual interest income# ......... $32.69 $32.69
Less estimated annual fees and
expenses ............................ 1.98 1.59
Estimated net annual interest ______ ______
income (cash)# ...................... $30.71 $31.10
Estimated interest distribution# ...... 2.56 15.55
Estimated daily interest accrual# ..... .0853 .0863
Estimated current return#++ ........... 5.82% 5.89%
Estimated long term return++ .......... 3.94% 4.01%
Record dates .......................... 1st of Dec. 1 and
each month June 1
Interest distribution dates ........... 15th of Dec. 15 and
each month June 15
A-4
109802.1
<PAGE>
Footnotes to Summary of Essential Information
* The Date of Deposit is the date on which the Trust Agreement was signed
and the deposit of the Bonds with the Trustee made.
** For information regarding offering price per unit and applicable sales
charge under the Total Reinvestment Plan, see Total Reinvestment Plan
in Part B of this Prospectus.
*** The Trustee maintains its corporate trust office at 101 Barclay Street,
New York, New York 10286 (tel. no.: 1-212-495-1784). For information
regarding redemption by the Trustee, see "Trustee Redemption" in Part B
of this Prospectus.
+ Plus accrued interest to expected date of settlement (approximately
three business days after purchase) of $14.10 monthly and $16.68
semi-annually.
++ The estimated current return and estimated long term returns are
increased for transactions entitled to a discount (see "Employee
Discounts" in Part B of this Prospectus), and are higher under the
semi-annual option due to lower Trustee's fees and expenses.
+++ Based solely upon the bid side evaluation of the underlying Bonds
(including, where applicable, undistributed cash in the principal
account). Upon tender for redemption, the price to be paid will be
calculated as described under "Trustee Redemption" in Part B of this
Prospectus.
++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.
# Does not include accrual from original issue discount bonds, if any.
FINANCIAL AND STATISTICAL INFORMATION
Selected data for each Unit outstanding for the periods listed below:
<TABLE>
<CAPTION>
Distribu-
tions of
Distributions of Interest Principal
During the Period (per Unit) During
Net Asset* Semi- the
Units Out- Value Monthly Annual Period
Period Ended standing Per Unit Option Option (Per Unit)
<S> <C> <C> <C> <C> <C>
December 31, 1994 5,059 $494.33 $30.27 $30.73 -0-
December 31, 1995 5,029 521.99 30.44 30.82 $2.57
December 31, 1996 4,731 515.14 30.33 30.72 3.82
</TABLE>
- --------
* Net Asset Value per Unit is calculated by dividing net assets as
disclosed in the "Statement of Net Assets" by the number of Units
outstanding as of the date of the Statement of Net Assets. See Note 5
of Notes to Financial Statements for a description of the components of
Net Assets.
A-5
109802.1
<PAGE>
INFORMATION REGARDING THE TRUST
AS OF DECEMBER 31, 1996
DESCRIPTION OF PORTFOLIO*
Each Unit in the Trust consists of a 1/4731st fractional
undivided interest in the principal and net income of the Trust in the ratio of
one Unit for each $489.33 principal amount of the Bonds currently held in the
Trust. The Sponsor has not participated as a sole underwriter or manager,
co-manager or member of an underwriting syndicate from which any of the initial
aggregate principal amount of the Bonds were acquired. The portfolio of the
Trust consists of 9 issues representing obligations of 4 issuers located in New
York State. Five issues representing $1,250,000 of the principal amount of the
Bonds in the Trust are "moral obligation" bonds. All of the Bonds in the Trust
are subject to redemption prior to their stated maturity dates pursuant to
sinking fund or optional call provisions. The Bonds may also be subject to other
calls, which may be permitted or required by events which cannot be predicted
(such as destruction, condemnation, termination of a contract, or receipt of
excess or unanticipated revenues). Two issues representing $325,000 of the
principal amount of the Bonds are general obligation bonds. All 7 of the
remaining issues representing $1,990,000 of the principal amount of the Bonds
are payable from the income of a specific project or authority and are not
supported by the issuer's power to levy taxes. The portfolio is divided for
purpose of issue as follows: Hospital and Nursing 2, Housing 3, University
Construction 1, and Water and Power 1. For an explanation of the significance of
these factors see "The Trust--Portfolio" and "Special Factors Concerning the
Portfolio" in Part B of this Prospectus. See "Tax Status" in Part B of this
Prospectus.
None of the Bonds in the Trust are subject to the federal
individual alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.
- --------------
* Changes in the Trust Portfolio: From January 1, 1997 to March 21, 1997,
2 Units were redeemed from the Trust.
A-6
109802.1
<PAGE>
Report of Independent Accountants
To the Sponsor, Trustee and Certificateholders of
New York Municipal Trust, Series 1
In our opinion, the accompanying statement of net assets, including the
portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of New York Municipal Trust, Series 1
(the "Trust") at December 31, 1996, the results of its operations, the changes
in its net assets and the financial highlights for the year then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at December
31, 1996 by correspondence with the Trustee, provides a reasonable basis for the
opinion expressed above. The financial statements for the prior periods
presented were audited by other independent accountants whose report dated March
31, 1996 expressed an unqualified opinion on those financial statements.
PRICE WATERHOUSE LLP
160 Federal Street
Boston, MA 02110
March 28, 1997
<PAGE>
<TABLE>
New York Municipal Trust, Series 1
Portfolio
December 31, 1996
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount Title of Bonds (1) Maturity (2) Ref.-Refunding Value (3)
<S> <C> <C> <C> <C> <C> <C>
1 $ 100,000 State of New York General Obligation, A* 3.200% No Sinking Fund $ 89,664
Low Cost Housing Bonds, Series 1963 6/01/2003 6/01/98 @ 100 Ref.
2 225,000 State of New York General Obligation, A* 5.250 No Sinking Fund 218,500
Housing Middle Income, Series 1971 5/01/2013 5/01/97 @ 102 Ref.
3 500,000 New York Housing Finance Agency AAA 6.375 No Sinking Fund 538,130
Facilities Bonds, 1972 Series A 5/01/2001 None
4 135,000 New York State Housing Finance Agency, A* 5.500 No Sinking Fund 136,172
Hospital and Nursing Project Bonds, 11/01/2013 1/31/97 @ 103 Ref.
1972 Series A
5 315,000 New York State Housing Finance Agency, A* 7.000 11/01/98 @ 100 S.F. 324,450
Hospital and Nursing Project Bonds, 11/01/2017 1/31/97 @ 102 Ref.
1977 Series A
6 300,000 New York State Housing Finance Agency, AAA 6.500 5/01/97 @ 100 S.F. 324,894
State University Construction Bonds, 11/01/2006 None
1977 Series B
7 625,000 New York State Housing Finance Agency, NR 8.000 Currently @ 100 S.F. 632,738
Towpath Towers Housing 5/01/2019 5/01/97 @ 101 Ref.
Project Bonds
8 15,000 Power Authority of the State of New York, AAA 9.500 Currently @ 100 S.F. 16,263
General Purpose Bonds, Series C 1/01/2001 None
9 100,000 St. Casimir's Elderly Housing NR 7.375 9/01/00 @ 100 S.F. 104,059
Corporation (New York) First Lien 9/01/2010 3/01/97 @ 104 Ref.
Revenue Bonds (Series 1978--Section 8
Assisted Project)
----------- -------------
$2,315,000 Total Investments (Cost $2,113,756) $ 2,384,870
========== =============
See accompanying footnotes to portfolio and notes to financial statements.
</TABLE>
<PAGE>
New York Municipal Trust, Series 1
Footnotes to Portfolio
- -------------------------------------------------------------------------------
1. All ratings are by Kenny S&P Evaluation Services, a business unit of J.J.
Kenny Company, Inc., a subsidiary of The McGraw-Hill Companies, Inc.,
except for those identified by an asterisk (*) which are by Moody's
Investors Service, Inc. A brief description of the ratings symbols and
their meaning is set forth under "Description of Bond Ratings" in Part B
of the Prospectus.
2. See "The Trust - Portfolio" in Part B of the Prospectus for an
explanation of redemption features. See "Tax Status" in Part B of the
Prospectus for a statement of the Federal tax consequences to a
Certificateholder upon the sale, redemption or maturity of a bond.
3. At December 31, 1996, the net unrealized appreciation of all the bonds
was comprised of the following:
Gross unrealized appreciation $ 286,614
Gross unrealized depreciation (15,500)
-------------
Net unrealized appreciation $ 271,114
=============
4. The Bonds may also be subject to other calls, which may be permitted or
required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess or
unanticipated revenues).
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 1
Statement of Net Assets
December 31, 1996
Investments in Securities,
at Market Value (Cost $2,113,756) $2,384,870
----------
Other Assets
Accrued Interest 27,347
Cash 24,892
----------
Total Other Assets 52,239
----------
Net Assets (4,731 Units of Fractional Undivided
Interest Outstanding, $515.14 per Unit) $2,437,109
==========
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 1
Statement of Operations
For the Years Ended December 31,
1996 1995 1994
Investment Income
Interest $159,572 $162,546 $168,053
-------- -------- --------
Expenses
Trustee's Fees 6,769 3,773 8,101
Evaluator's Fees 3,286 3,013 3,581
-------- -------- --------
Total Expenses 10,055 6,786 11,682
-------- -------- --------
Net Investment Income 149,517 155,760 156,371
-------- -------- --------
Realized and Unrealized Gain (Loss)
Realized Gain (Loss) on
Investments 41,192 (1,041) (7,377)
Change in Unrealized Appreciation
(Depreciation) on Investments (55,552) 152,522 (191,292)
-------- -------- --------
Net Gain (Loss) on Investments (14,360) 151,481 (198,669)
-------- -------- --------
Net Increase (Decrease)
in Net Assets
Resulting From Operations $135,157 $307,241 $(42,298)
======== ======== =========
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 1
Statement of Changes in Net Assets
For the Years Ended December 31,
1996 1995 1994
Operations
Net Investment Income $149,517 $155,760 $156,371
Realized Gain (Loss)
on Investments 41,192 (1,041) (7,377)
Change in Unrealized Appreciation
(Depreciation) on Investments (55,552) 152,522 (191,292)
-------- --------- --------
Net Increase (Decrease) in
Net Assets Resulting
From Operations 135,157 307,241 (42,298)
-------- --------- --------
Distributions to Certificateholders
Investment Income 149,839 154,299 158,436
Principal 18,126 12,948 -
Redemptions
Interest 5,447 652 5,401
Principal 149,737 15,081 133,961
-------- --------- --------
Total Distributions
and Redemptions 323,149 182,980 297,798
-------- --------- --------
Total Increase (Decrease) (187,992) 124,261 (340,096)
Net Assets
Beginning of Year 2,625,101 2,500,840 2,840,936
--------- --------- ---------
End of Year (Including
Undistributed Net Investment
Income of $59,248, $65,017
and $64,208, Respectively) $2,437,109 $2,625,101 $2,500,840
========== ========== ==========
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 1
Notes to Financial Statements
1. Organization
New York Municipal Trust, Series 1 (the "Trust") was organized on
November 21, 1978 by Bear, Stearns & Co. Inc. under the laws of the
State of New York by a Trust Indenture and Agreement, and is registered
under the Investment Company Act of 1940. The Trust was formed to
preserve capital and to provide interest income.
Effective September 28, 1995, Reich & Tang Distributors L.P. ("Reich &
Tang") has become the successor sponsor (the "Sponsor") to certain of
the unit investment trusts previously sponsored by Bear, Stearns & Co.
Inc. As successor Sponsor, Reich & Tang has assumed all of the
obligations and rights of Bear, Stearns & Co. Inc., the previous
sponsor.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies
consistently followed by the Trust in preparation of its financial
statements. The policies are in conformity with generally accepted
accounting principles ("GAAP"). The preparation of financial statements
in accordance with GAAP requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual amounts could differ from those estimates.
Interest income is recorded on the accrual basis.
Security Valuation
Investments are carried at market value which is determined by Kenny
S&P Evaluation Services, a business unit of J.J. Kenny Company, Inc., a
subsidiary of The McGraw-Hill Companies, Inc. The market value of the
portfolio is based upon the bid prices for the bonds at the end of the
year, which approximates the fair value of the security at that date,
except that the market value on the date of deposit represents the cost
to the Trust based on the offering prices for investments at that date.
The difference between cost and market value is reflected as unrealized
appreciation (depreciation) of investments. Securities transactions are
recorded on the trade date. Realized gains (losses) from securities
transactions are determined on the basis of average cost of the
securities sold or redeemed.
<PAGE>
New York Municipal Trust, Series 1
Notes to Financial Statements
3. Income Taxes
No provision for federal income taxes has been made in the accompanying
financial statements because the Trust intends to continue to qualify
for the tax treatment applicable to Grantor Trusts under the Internal
Revenue Code. Under existing law, if the Trust so qualifies, it will
not be subject to federal income tax on net income and capital gains
that are distributed to unitholders.
4. Trust Administration
The Bank of New York (the Trustee) has custody of assets and
responsibility for the accounting records and financial statements of
the Trust and is responsible for establishing and maintaining a system
of internal control related thereto. The Trustee is also responsible
for all estimates of expenses and accruals reflected in the Trust's
financial statements.
The Trust Indenture and Agreement provides for interest distributions
as often as monthly (depending upon the distribution plan elected by
the Certificateholders).
The Trust Indenture and Agreement further requires that principal
received from the disposition of bonds, other than those bonds sold in
connection with the redemption of units, be distributed to
Certificateholders.
The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. For the years ended December 31, 1996, 1995 and 1994,
298, 30 and 275 units were redeemed, respectively.
The Trust pays an annual fee for trustee services rendered by the
Trustee that ranges from $.40 to $1.08 per $1,000 of outstanding
investment principal. In addition, a minimum fee of $35.00 is paid to a
service bureau for each portfolio valuation. For the year ended
December 31, 1996, the "Trustee's Fees" are comprised of Trustee fees
of $2,167 and other expenses of $4,602. The other expenses include
professional, printing and miscellaneous fees.
<PAGE>
New York Municipal Trust, Series 1
Notes to Financial Statements
5. Net Assets
At December 31, 1996, the net assets of the Trust represented the
interest of Certificateholders as follows:
Original cost to Certificateholders $ 6,058,946
Less Initial Gross Underwriting Commission 272,640
---------------
5,786,306
Accumulated Cost of Securities Sold,
Matured or Called (3,672,550)
Net Unrealized Appreciation 271,114
Undistributed Net Investment Income 59,248
Undistributed Proceeds From Investments (7,009)
---------------
Total $ 2,437,109
================
The original cost to Certificateholders, less the initial gross
underwriting commission, represents the aggregate initial public
offering price net of the applicable sales charge on 6,000 units of
fractional undivided interest of the Trust as of the date of deposit.
6. Concentration of Credit Risk
Since the Trust invests a portion of its assets in municipal bonds, it
may be affected by economic and political developments in the
municipalities. Certain debt obligations held by the Trust may be
entitled to the benefit of insurance, standby letters of credit or
other guarantees of banks or other financial institutions.
<PAGE>
New York Municipal Trust, Series 1
Notes to Financial Statements
7. Financial Highlights (per unit)*
Selected data for a unit of the Trust outstanding for the year ended
December 31, 1996:
Net Asset Value, Beginning of Year ** $ 521.99
-------------
Interest Income 32.70
Expenses (2.06)
Net Investment Income 30.64
-------------
Net Gain or Loss on Investments(1) (1.96)
-------------
Total from Investment Operations 28.68
-------------
Less Distributions
to Certificateholders
Income 30.70
Principal 3.71
for Redemptions
Interest 1.12
-------------
Total Distributions 35.53
-------------
Net Asset Value, End of Year ** $ 515.14
=============
See "Financial and Statistical Information" in Part A of this
Prospectus for amounts of per unit distributions during the years ended
December 31, 1996, 1995 and 1994 based on actual units.
(1) Net gain or loss on investments is a result of changes in outstanding units
since January 1, 1996 and the dates of net gain and loss on investments.
- -------------------------------
* Unless otherwise stated, based upon average units outstanding during
the year of 4,880 ([4,731 + 5,029]/2).
** Based upon actual units outstanding.
<PAGE>
Prospectus Part A Dated April 30, 1997
NEW YORK MUNICIPAL TRUST
SERIES 2
- ------------------------------------------------------------------------------
The Trust is a unit investment trust with an underlying
portfolio of long-term tax-exempt bonds and was formed to preserve capital and
to provide interest income (including, where applicable, earned original issue
discount) which, in the opinions of bond counsel to the respective issuers, is,
with certain exceptions, currently exempt from regular federal income tax and
New York State and New York City income taxes under existing law but may be
subject to state and local taxes in other jurisdictions. There can be no
assurance that the Trust's investment objectives will be achieved. Although the
Supreme Court has determined that Congress has the authority to subject interest
on bonds such as the Bonds in the Trust to regular federal income taxation,
existing law excludes such interest from regular federal income tax. Such
interest income may, however, be subject to federal corporate alternative
minimum tax and to state and local taxes in other jurisdictions. (See
"Description of Portfolio" in this Part A for a list of these Bonds which pay
interest income subject to the Federal individual alternative minimum tax.) In
addition, capital gains are subject to tax. (See "Tax Status" and "The
Trust--Portfolios" in Part B of this Prospectus.) The Sponsor is Reich & Tang
Distributors L.P. The value of the Units of the Trust will fluctuate with the
value of the underlying bonds. Minimum purchase: 1 Unit.
This Prospectus consists of two parts. Part A contains the
Summary of Essential Information as of December 31, 1996 (the "Evaluation
Date"), a summary of certain specific information regarding the Trust and
audited financial statements of the Trust, including the related portfolio, as
of the Evaluation Date. Part B of this Prospectus contains a general summary of
the Trust. Part A of this Prospectus may not be distributed unless accompanied
by Part B. Investors should retain both parts of this Prospectus for future
reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
THE TRUST. The Trust seeks to achieve its investment
objectives through investment in a fixed, diversified portfolio of long-term
bonds (the "Bonds") issued by or on behalf of the State of New York and its
political subdivisions, municipalities and public authorities and by the
Commonwealth of Puerto Rico and its public authorities. All of the Bonds in the
Trust were rated "A" or better by Standard & Poor's Corporation or Moody's
Investors Service, Inc. at the time originally deposited in the Trust. For a
discussion of the significance of such ratings, see "Description of Bond
Ratings" in Part B of this Prospectus. For a list of ratings on the Evaluation
Date, see "Portfolio".
Some of the Bonds in the Trust have been issued with optional
refunding or refinancing provisions ("Refunded Bonds") whereby the issuer of the
Bond has the right to call such Bond prior to its stated maturity date (and
other than pursuant to sinking fund provisions) and to issue new bonds
110249.1
<PAGE>
("Refunding Bonds") in order to finance the redemption. Issuers typically
utilize refunding calls in order to take advantage of lower interest rates in
the marketplace. Some of these Refunded Bonds may be called for redemption
pursuant to pre-refunding provisions ("Pre-Refunded Bonds") whereby the proceeds
from the issue of the Refunding Bonds are typically invested in government
securities in escrow for the benefit of the holders of the Pre- Refunded Bonds
until the refunding call date. Usually, Pre-Refunded Bonds will bear a triple-A
rating because of this escrow. The issuers of Pre- Refunded Bonds must call such
Bonds on their refunding call date. Therefore, as of such date, the Trust will
receive the call price for such bonds but will cease receiving interest income
with respect to them. For a list of those Bonds which are Pre-Refunded Bonds as
of the Evaluation Date, if any, see "Notes to Financial Statements" in this Part
A. Some of the Bonds in the portfolio may have been purchased at an aggregate
premium over par. The payment of interest and preservation of capital are, of
course, dependent upon the continuing ability of the issuers of the Bonds to
meet their obligations.
Investment in the Trust should be made with an understanding
of the risks which an investment in long-term fixed rate debt obligations may
entail, including the risk that the value of the underlying portfolio will
decline with increases in interest rates. A Trust designated as a long-term
trust must have a dollar-weighted average portfolio maturity of more than ten
years.
Each Unit in the Trust represents a 1/4975th undivided
interest in the principal and net income of the Trust. The principal amount of
Bonds deposited in the Trust per Unit is reflected in the Summary of Essential
Information. (See "The Trust--Organization" in Part B of this Prospectus.) The
Units being offered hereby are issued and outstanding Units which have been
purchased by the Sponsor in the secondary market.
PUBLIC OFFERING PRICE. The secondary market Public Offering
Price of each Unit is equal to the aggregate bid price of the Bonds in the Trust
divided by the number of Units outstanding, plus a sales charge of 4.7% of the
Public Offering Price, or 4.890% of the net amount invested in Bonds per Unit.
In addition, accrued interest to the expected date of settlement is added to the
Public Offering Price. If Units had been purchased on the Evaluation Date, the
Public Offering Price per Unit would have been $483.36 plus accrued interest of
$18.52 under the monthly distribution plan and $20.02 under the semi-annual
distribution plan for a total of $501.88 and $503.38, respectively. The Public
Offering Price per Unit can vary on a daily basis in accordance with
fluctuations in the aggregate bid prices of the Bonds. (See "Public
Offering--Offering Price" in Part B of this Prospectus.)
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. Units
of each Trust are offered to investors on a "dollar price" basis (using the
computation method described under "Public Offering -- Offering Price" in Part
B) as distinguished from a "yield price" basis often used in offerings of tax
exempt bonds (involving the lesser of the yield as computed to maturity of bonds
or to an earlier redemption date). Since they are offered on a dollar price
basis, the rate of return on an investment in Units of each Trust is measured in
terms of "Estimated Current Return" and "Estimated Long Term Return".
Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted bond
practices, which practices take into account not only the interest payable on
the Bond but also the amortization of premiums or accretion of discounts, if
any; (2) calculating the average of the yields for the Bonds in the Trust's
portfolio by weighing each Bond's yield by the market value of the Bond and by
the amount of time remaining to the date to which the Bond is priced (thus
A-2
110249.1
<PAGE>
creating an average yield for the portfolio of the Trust); and (3) reducing the
average yield for the portfolio of the Trust in order to reflect estimated fees
and expenses of the Trust and the maximum sales charge paid by investors. The
resulting Estimated Long Term Return represents a measure of the return to
investors earned over the estimated life of the Trust. (For the Estimated Long
Term Return to Certificateholders under the monthly and semi-annual distribution
plans, see "Summary of Essential Information".)
Estimated Current Return is a measure of the Trust's cash
flow. Estimated Current Return is computed by dividing the Estimated Net Annual
Interest Income per Unit by the Public Offering Price per Unit. In contrast to
the Estimated Long Term Return, the Estimated Current Return does not take into
account the amortization of premium or accretion of discount, if any, on the
Bonds in the portfolio of the Trust. Moreover, because interest rates on Bonds
purchased at a premium are generally higher than current interest rates on newly
issued bonds of a similar type with comparable rating, the Estimated Current
Return per Unit may be affected adversely if such Bonds are redeemed prior to
their maturity.
The Estimated Net Annual Interest Income per Unit of the Trust
will vary with changes in the fees and expenses of the Trustee and the Evaluator
applicable to the Trust and with the redemption, maturity, sale or other
disposition of the Bonds in the Trust. The Public Offering Price will vary with
changes in the bid prices of the Bonds. Therefore, there is no assurance that
the present Estimated Current Return or Estimated Long Term Return will be
realized in the future. (For the Estimated Current Return to Certificateholders
under the monthly and semi-annual distribution plans, see "Summary of Essential
Information". See "Estimated Long Term Return and Estimated Current Return" in
Part B of this Prospectus.)
A schedule of cash flow projections is available from the
Sponsors upon request.
DISTRIBUTIONS. Distributions of interest income, less
expenses, will be made by the Trust either monthly, semi-annually or annually
depending upon the plan of distribution applicable to the Unit purchased. A
purchaser of a Unit in the secondary market will initially receive distributions
in accordance with the plan selected by the prior owner of such Unit and may
thereafter change the plan as provided under "Interest and Principal
Distributions" in Part B of this Prospectus. Distributions of principal, if any,
will be made semi-annually on June 15 and December 15 of each year. For
estimated monthly and semi-annual interest distributions, see "Summary of
Essential Information".
MARKET FOR UNITS. The Sponsor, although not obligated to do
so, presently maintains and intends to continue to maintain a secondary market
for the Units at prices based upon the aggregate bid price of the Bonds in the
Trust portfolio. The reoffer price will be based on the aggregate bid price of
the Bonds plus a sales charge of 4.7% (4.890% of the net amount invested), plus
net accrued interest. If a market is not maintained a Certificateholder will be
able to redeem his or her Units with the Trustee at a price also based upon the
aggregate bid price of the Bonds. (See "Sponsor Repurchase" and "Offering Price"
in Part B of this Prospectus.)
TOTAL REINVESTMENT PLAN. Certificateholders under the
semi-annual plan of distribution have the opportunity to have all their regular
interest distributions, and principal distributions, if any, reinvested in
available series of "New York Municipal Trust". (See "Total Reinvestment Plan"
in Part B of this Prospectus.) The Plan is not designed to be a complete
investment program.
A-3
110249.1
<PAGE>
NEW YORK MUNICIPAL TRUST
SERIES 2
SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1996
<TABLE>
<S> <C> <C>
Date of Deposit: January 16, 1979 Evaluation Time: 4:00 p.m.
Principal Amount of Bonds ... $2,280,000 New York Time.
Number of Units ............. 4,975 Minimum Principal Distribution:
Fractional Undivided Inter- $1.00 per Unit.
est in Trust per Unit ..... 1/4975 Weighted Average Life to
Principal Amount of Maturity: 16.3 Years.
Bonds per Unit ............ $458.29 Minimum Value of Trust:
Secondary Market Public Trust may be terminated if
Offering Price** value of Trust is less than
Aggregate Bid Price $2,600,000 in principal amount
of Bonds in Trust ....... $2,292,644+++ of Bonds.
Divided by 4,975 Units .... $460.83 Mandatory Termination Date:
Plus Sales Charge of 4.7% The earlier of December 31,
of Public Offering Price $22.53 2028 or the disposition of the
Public Offering Price last Bond in the Trust.
per Unit ................ $483.36+ Trustee***: The Bank of New
Redemption and Sponsor's York.
Repurchase Price Trustee's Annual Fee: Monthly
per Unit .................. $460.83+ plan $1.08 per $1,000; semi-
+++ annual plan $.60 per $1,000.
++++ Evaluator: Kenny S&P Evaluation
Excess of Secondary Market Services.
Public Offering Price Evaluator's Fee for Each
over Redemption and Evaluation: Minimum of $35
Sponsor's Repurchase plus $.25 per each issue of
Price per Unit ............ $22.53++++ Bonds in excess of 50 issues
Difference between Public (treating separate maturities
Offering Price per Unit as separate issues).
and Principal Amount per Sponsor: Reich & Tang
Unit Premium/(Discount) ... $25.07 Distributors L.P.
</TABLE>
PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED
Monthly Semi-Annual
Option Option
Gross annual interest income# ......... $30.65 $30.65
Less estimated annual fees and
expenses ............................ 1.78 1.41
Estimated net annual interest ______ ______
income (cash)# ...................... $28.87 $29.24
Estimated interest distribution# ...... 2.40 14.62
Estimated daily interest accrual# ..... .0801 .0812
Estimated current return#++ ........... 5.97% 6.05%
Estimated long term return++ .......... 4.00% 4.08%
Record dates .......................... 1st of Dec. 1 and
each month June 1
Interest distribution dates ........... 15th of Dec. 15 and
each month June 15
A-4
110249.1
<PAGE>
Footnotes to Summary of Essential Information
* The Date of Deposit is the date on which the Trust Agreement was signed
and the deposit of the Bonds with the Trustee made.
** For information regarding offering price per unit and applicable sales
charge under the Total Reinvestment Plan, see Total Reinvestment Plan
in Part B of this Prospectus.
*** The Trustee maintains its corporate trust office at 101 Barclay Street,
New York, New York 10286 (tel. no.: 1-212-495-1784). For information
regarding redemption by the Trustee, see "Trustee Redemption" in Part B
of this Prospectus.
+ Plus accrued interest to expected date of settlement (approximately
three business days after purchase) of $18.52 monthly and $20.02
semi-annually.
++ The estimated current return and estimated long term returns are
increased for transactions entitled to a discount (see "Employee
Discounts" in Part B of this Prospectus), and are higher under the
semi-annual option due to lower Trustee's fees and expenses.
+++ Based solely upon the bid side evaluation of the underlying Bonds
(including, where applicable, undistributed cash in the principal
account). Upon tender for redemption, the price to be paid will be
calculated as described under "Trustee Redemption" in Part B of this
Prospectus.
++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.
# Does not include accrual from original issue discount bonds, if any.
FINANCIAL AND STATISTICAL INFORMATION
Selected data for each Unit outstanding for the periods listed below:
<TABLE>
<CAPTION>
Distribu-
tions of
Distributions of Interest Principal
During the Period (per Unit) During
Net Asset* Semi- the
Units Out- Value Monthly Annual Period
Period Ended standing Per Unit Option Option (Per Unit)
<S> <C> <C> <C> <C> <C>
December 31, 1994 $5,221 $544.57 $34.25 $34.72 $ 2.80
December 31, 1995 5,189 559.33 34.69 35.16 1.98
December 31, 1996 4,975 474.96 32.94 33.39 79.06
</TABLE>
- --------
* Net Asset Value per Unit is calculated by dividing net assets as
disclosed in the "Statement of Net Assets" by the number of Units
outstanding as of the date of the Statement of Net Assets. See Note 5
of Notes to Financial Statements for a description of the components of
Net Assets.
A-5
110249.1
<PAGE>
INFORMATION REGARDING THE TRUST
AS OF DECEMBER 31, 1996
DESCRIPTION OF PORTFOLIO
Each Unit in the Trust consists of a 1/4975th fractional
undivided interest in the principal and net income of the Trust in the ratio of
one Unit for each $452.57 principal amount of the Bonds currently held in the
Trust. The Sponsor has not participated as a sole underwriter or manager,
co-manager or member of an underwriting syndicate from which any of the initial
aggregate principal amount of the Bonds were acquired. The portfolio of the
Trust consists of 7 issues representing obligations of 6 issuers located in New
York State and 1 in Puerto Rico. Four issues representing $1,485,000 of the
principal amount of the Bonds in the Trust are "moral obligation" bonds. All of
the Bonds in the Trust are subject to redemption prior to their stated maturity
dates pursuant to sinking fund or optional call provisions. The Bonds may also
be subject to other calls, which may be permitted or required by events which
cannot be predicted (such as destruction, condemnation, termination of a
contract, or receipt of excess or unanticipated revenues). One issue
representing $50,000 of the principal amount of the Bonds is a general
obligation bond. All 6 of the remaining issues representing $2,230,000 of the
principal amount of the Bonds are payable from the income of a specific project
or authority and are not supported by the issuer's power to levy taxes. The
portfolio is divided for purpose of issue as follows: Highway 1, Hospital &
Nursing 2, Housing 1, Port Authority 1 and Public Benefit 1. For an explanation
of the significance of these factors see "The Trust--Portfolio" and "Special
Factors Concerning the Portfolio" in Part B of this Prospectus. See "Tax Status"
in Part B of this Prospectus.
None of the Bonds in the Trust are subject to the federal
individual alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.
A-6
110249.1
<PAGE>
Report of Independent Accountants
To the Sponsor, Trustee and Certificateholders of
New York Municipal Trust, Series 2
In our opinion, the accompanying statement of net assets, including the
portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of New York Municipal Trust, Series 2
(the "Trust") at December 31, 1996, the results of its operations, the changes
in its net assets and the financial highlights for the year then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at December
31, 1996 by correspondence with the Trustee, provides a reasonable basis for the
opinion expressed above. The financial statements for the prior periods
presented were audited by other independent accountants whose report dated March
31, 1996 expressed an unqualified opinion on those financial statements.
PRICE WATERHOUSE LLP
160 Federal Street
Boston, MA 02110
March 28, 1997
<PAGE>
New York Municipal Trust, Series 2
Portfolio
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount Title of Bonds (1) Maturity (2) Ref.-Refunding Value (3)
<S> <C> <C> <C> <C> <C> <C>
1 $ 50,000 New York State General Obligation A* 3.000% No Sinking Fund $ 46,661
3/15/2001 None
2 325,000 New York State Housing Finance Agency, AAA 7.750 No Sinking Fund 336,229
Health Facilities Bonds, 11/01/1997 None
1974 Series A
3 375,000 New York State Housing Finance Agency, A* 7.000 11/01/98 @ 100 S.F. 386,250
Hospital and Nursing Home Project Bonds, 11/01/2017 1/31/97 @ 102 Ref.
1977 Series A
4 455,000 New York State Housing Finance Agency, N/R 8.000 Currently @ 100 S.F. 460,633
Towpath Towers Housing Project Bonds 5/01/2019 5/01/97 @ 101 Ref.
5 545,000 The Port Authority of New York and AA- 6.000 Currently @ 103 S.F. 550,777
New Jersey, Consolidated Revenue 3/01/2013 3/01/97 @ 101 Ref.
Bonds Forty Sixth Series
6 330,000 United Nations Development Corporation Aaa* 5.900 5/01/99 @ 100 S.F. 340,009
(A Public Benefit New York) Series 1973 5/01/2023 None
7 200,000 Corporation of the State of Puerto Rico A 5.500 Currently @ 100 S.F. 200,566
Highway Authority Revenue Bonds, 7/01/2003 7/01/97 @ 100 Ref.
Series G
---------- -------------
$2,280,000 Total Investments (Cost $2,048,784) $ 2,321,125
========== =============
</TABLE>
See accompanying footnotes to portfolio and notes to financial statements.
<PAGE>
New York Municipal Trust, Series 2
Footnotes to Portfolio
- --------------------------------------------------------------------------------
1. All ratings are by Kenny S&P Evaluation Services, a business unit of J.J.
Kenny Company, Inc., a subsidiary of The McGraw-Hill Companies, Inc.,
except for those identified by an asterisk (*) which are by Moody's
Investors Service, Inc. A brief description of the ratings symbols and
their meaning is set forth under "Description of Bond Ratings" in Part B
of the Prospectus.
2. See "The Trust - Portfolio" in Part B of the Prospectus for an
explanation of redemption features. See "Tax Status" in Part B of the
Prospectus for a statement of the Federal tax consequences to a
Certificateholder upon the sale, redemption or maturity of a bond.
3. At December 31, 1996, the net unrealized appreciation of all the bonds
was comprised of the following:
Gross unrealized appreciation $ 274,989
Gross unrealized depreciation (2,648)
-------------
Net unrealized appreciation $ 272,341
=============
4. The Bonds may also be subject to other calls, which may be permitted or
required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess or
unanticipated revenues).
The accompanying notes form an integral part of the
financial statements.
<PAGE>
New York Municipal Trust, Series 2
Statement of Net Assets
December 31, 1996
- --------------------------------------------------------------------------------
Investments in Securities,
at Market Value (Cost $2,048,784) $ 2,321,125
--------------
Other Assets
Accrued Interest 34,741
Cash 7,058
--------------
Total Other Assets 41,799
--------------
Net Assets (4,975 Units of Fractional Undivided
Interest Outstanding, $474.96 per Unit) $ 2,362,924
==============
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 2
Statement of Operations
- --------------------------------------------------------------------------------
For the Years Ended December 31,
1996 1995 1994
Investment Income
Interest $ 175,203 $ 190,418 $ 195,049
----------- ----------- ----------
Expenses
Trustee's Fees 7,143 5,914 6,352
Evaluator's Fees 3,286 3,013 3,306
----------- ----------- ----------
Total Expenses 10,429 8,927 9,658
----------- ----------- ----------
Net Investment Income 164,774 181,491 185,391
----------- ----------- ----------
Realized and Unrealized Gain (Loss)
Realized Gain on
Investments 10,483 854 29,395
Change in Unrealized Appreciation
(Depreciation) on Investments (32,541) 86,419 (177,865)
----------- ----------- ----------
Net Gain (Loss) on Investments (22,058) 87,273 (148,470)
----------- ----------- ----------
Net Increase in Net Assets
Resulting From Operations $ 142,716 $ 268,764 $ 36,921
=========== =========== ===========
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 2
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31,
1996 1995 1994
Operations
<S> <C> <C> <C>
Net Investment Income $ 164,774 $ 181,491 185,391
Realized Gain
on Investments 10,483 854 29,395
Change in Unrealized Appreciation
(Depreciation) on Investments (32,541) 86,419 (177,865)
------------ ------------- -------
Net Increase in Net Assets
Resulting From Operations 142,716 268,764 36,921
------------ ------------- -------
Distributions to Certificateholders
Investment Income 168,412 181,336 184,742
Principal 400,160 10,274 15,165
Redemptions
Interest 4,852 646 4,624
Principal 108,707 17,343 102,393
------------ ------------- -------
Total Distributions
and Redemptions 682,131 209,599 306,924
------------ ------------- -------
Total Increase (Decrease) (539,415) 59,165 (270,003)
Net Assets
Beginning of Year 2,902,339 2,843,174 3,113,177
------------ ------------- -------
End of Year (Including
Undistributed Net Investment
Income of $70,280, $78,770
and $79,261, Respectively) $ 2,362,924 $ 2,902,339 $ 2,843,174
============ ============ ============
</TABLE>
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 2
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Organization
New York Municipal Trust, Series 2 (the "Trust") was organized on
January 16, 1979 by Bear, Stearns & Co. Inc. under the laws of the
State of New York by a Trust Indenture and Agreement, and is registered
under the Investment Company Act of 1940. The Trust was formed to
preserve capital and to provide interest income.
Effective September 28, 1995, Reich & Tang Distributors L.P. ("Reich &
Tang") has become the successor sponsor (the "Sponsor") to certain of
the unit investment trusts previously sponsored by Bear, Stearns & Co.
Inc. As successor Sponsor, Reich & Tang has assumed all of the
obligations and rights of Bear, Stearns & Co. Inc., the previous
sponsor.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies
consistently followed by the Trust in preparation of its financial
statements. The policies are in conformity with generally accepted
accounting principles ("GAAP"). The preparation of financial statements
in accordance with GAAP requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual amounts could differ from those estimates.
Interest income is recorded on the accrual basis.
Security Valuation
Investments are carried at market value which is determined by Kenny
S&P Evaluation Services, a business unit of J.J. Kenny Company, Inc., a
subsidiary of The McGraw-Hill Companies, Inc. The market value of the
portfolio is based upon the bid prices for the bonds at the end of the
year, which approximates the fair value of the security at that date,
except that the market value on the date of deposit represents the cost
to the Trust based on the offering prices for investments at that date.
The difference between cost and market value is reflected as unrealized
appreciation (depreciation) of investments. Securities transactions are
recorded on the trade date. Realized gains (losses) from securities
transactions are determined on the basis of average cost of the
securities sold or redeemed.
<PAGE>
New York Municipal Trust, Series 2
Notes to Financial Statements
- --------------------------------------------------------------------------------
3. Income Taxes
No provision for federal income taxes has been made in the accompanying
financial statements because the Trust intends to continue to qualify
for the tax treatment applicable to Grantor Trusts under the Internal
Revenue Code. Under existing law, if the Trust so qualifies, it will
not be subject to federal income tax on net income and capital gains
that are distributed to unitholders.
4. Trust Administration
The Trustee has custody of assets and responsibility for the accounting
records and financial statements of the Trust and is responsible for
establishing and maintaining a system of internal control related
thereto. The Trustee is also responsible for all estimates of expenses
and accruals reflected in the Trust's financial statements.
The Trust Indenture and Agreement provides for interest distributions
as often as monthly (depending upon the distribution plan elected by
the Certificateholders).
The Trust Indenture and Agreement further requires that principal
received from the disposition of bonds, other than those bonds sold in
connection with the redemption of units, be distributed to
Certificateholders.
The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. For the years ended December 31, 1996, 1995 and 1994,
214, 32 and 195 units were redeemed, respectively.
The Trust pays an annual fee for trustee services rendered by the
Trustee that ranges from $.60 to $1.08 per $1,000 of outstanding
investment principal. In addition, a minimum fee of $35.00 is paid to a
service bureau for each portfolio valuation. For the year ended
December 31, 1996, the "Trustee's Fees" are comprised of Trustee fees
of $5,467 and other expenses of $1,676. The other expenses include
professional, printing and miscellaneous fees.
<PAGE>
New York Municipal Trust, Series 2
Notes to Financial Statements
- --------------------------------------------------------------------------------
5. Net Assets
At December 31, 1996, the net assets of the Trust represented the
interest of Certificateholders as follows:
Original cost to Certificateholders $ 6,517,193
Less Initial Gross Underwriting Commission 293,280
---------------
6,223,913
Accumulated Cost of Securities Sold,
Matured or Called (4,175,129)
Net Unrealized Appreciation 272,341
Undistributed Net Investment Income 70,280
Undistributed Proceeds From Investments (28,481)
---------------
Total $ 2,362,924
===============
The original cost to Certificateholders, less the initial gross
underwriting commission, represents the aggregate initial public
offering price net of the applicable sales charge on 6,000 units of
fractional undivided interest of the Trust as of the date of deposit.
6. Concentration of Credit Risk
Since the Trust invests a portion of its assets in municipal bonds, it
may be affected by economic and political developments in the
municipalities. Certain debt obligations held by the Trust may be
entitled to the benefit of insurance, standby letters of credit or
other guarantees of banks or other financial institutions.
<PAGE>
New York Municipal Trust, Series 2
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. Financial Highlights (per unit)*
Selected data for a unit of the Trust outstanding for the year ended
December 31, 1996:
Net Asset Value, Beginning of Year ** $ 559.33
---------------
Interest Income 34.48
Expenses (2.05)
---------------
Net Investment Income 32.43
---------------
Net Gain or Loss on Investments(1) (3.97)
---------------
Total from Investment Operations 28.46
---------------
Less Distributions
to Certificateholders
Income 33.14
Principal 78.74
for Redemptions
Interest .95
---------------
Total Distributions 112.83
---------------
Net Asset Value, End of Year ** $ 474.96
===============
See "Financial and Statistical Information" in Part A of this
Prospectus for amounts of per unit distributions during the years ended
December 31, 1996, 1995 and 1994 based on actual units.
(1) Net gain or loss on investments is a result of changes in outstanding
units since January 1, 1996 and the dates of net gain and loss on
investments.
- ---------------
* Unless otherwise stated, based upon average units outstanding during
the year of 5,082 ([4,975 + 5,189]/2).
**Based upon actual units outstanding.
<PAGE>
Prospectus Part A Dated April 30, 1997
NEW YORK MUNICIPAL TRUST
SERIES 3
- ------------------------------------------------------------------------------
The Trust is a unit investment trust with an underlying
portfolio of long-term tax-exempt bonds and was formed to preserve capital and
to provide interest income (including, where applicable, earned original issue
discount) which, in the opinions of bond counsel to the respective issuers, is,
with certain exceptions, currently exempt from regular federal income tax and
New York State and New York City income taxes under existing law but may be
subject to state and local taxes in other jurisdictions. There can be no
assurance that the Trust's investment objectives will be achieved. Although the
Supreme Court has determined that Congress has the authority to subject interest
on bonds such as the Bonds in the Trust to regular federal income taxation,
existing law excludes such interest from regular federal income tax. Such
interest income may, however, be subject to federal corporate alternative
minimum tax and to state and local taxes in other jurisdictions. (See
"Description of Portfolio" in this Part A for a list of these Bonds which pay
interest income subject to the federal individual alternative minimum tax.) In
addition, capital gains are subject to tax. (See "Tax Status" and "The
Trust--Portfolios" in Part B of this Prospectus.) The Sponsor is Reich & Tang
Distributors L.P. The value of the Units of the Trust will fluctuate with the
value of the underlying bonds. Minimum purchase: 1 Unit.
This Prospectus consists of two parts. Part A contains the
Summary of Essential Information as of December 31, 1996 (the "Evaluation
Date"), a summary of certain specific information regarding the Trust and
audited financial statements of the Trust, including the related portfolio, as
of the Evaluation Date. Part B of this Prospectus contains a general summary of
the Trust. Part A of this Prospectus may not be distributed unless accompanied
by Part B. Investors should retain both parts of this Prospectus for future
reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
THE TRUST. The Trust seeks to achieve its investment
objectives through investment in a fixed, diversified portfolio of long-term
bonds (the "Bonds") issued by or on behalf of the State of New York and its
political subdivisions, municipalities and public authorities and by the
Commonwealth of Puerto Rico and its public authorities. All of the Bonds in the
Trust were rated "A" or better by Standard & Poor's Corporation or Moody's
Investors Service, Inc. at the time originally deposited in the Trust. For a
discussion of the significance of such ratings, see "Description of Bond
Ratings" in Part B of this Prospectus. For a list of ratings on the Evaluation
Date, see "Portfolio".
Some of the Bonds in the Trust have been issued with optional
refunding or refinancing provisions ("Refunded Bonds") whereby the issuer of the
Bond has the right to call such Bond prior to its stated maturity date (and
other than pursuant to sinking fund provisions) and to issue new bonds
111201.1
<PAGE>
("Refunding Bonds") in order to finance the redemption. Issuers typically
utilize refunding calls in order to take advantage of lower interest rates in
the marketplace. Some of these Refunded Bonds may be called for redemption
pursuant to pre-refunding provisions ("Pre-Refunded Bonds") whereby the proceeds
from the issue of the Refunding Bonds are typically invested in government
securities in escrow for the benefit of the holders of the Pre- Refunded Bonds
until the refunding call date. Usually, Pre-Refunded Bonds will bear a triple-A
rating because of this escrow. The issuers of Pre- Refunded Bonds must call such
Bonds on their refunding call date. Therefore, as of such date, the Trust will
receive the call price for such bonds but will cease receiving interest income
with respect to them. For a list of those Bonds which are Pre-Refunded Bonds as
of the Evaluation Date, if any, see "Notes to Financial Statements" in this Part
A. Some of the Bonds in the portfolio may have been purchased at an aggregate
premium over par. The payment of interest and preservation of capital are, of
course, dependent upon the continuing ability of the issuers of the Bonds to
meet their obligations.
Investment in the Trust should be made with an understanding
of the risks which an investment in long-term fixed rate debt obligations may
entail, including the risk that the value of the underlying portfolio will
decline with increases in interest rates. A Trust designated as a long-term
trust must have a dollar-weighted average portfolio maturity of more than ten
years.
Each Unit in the Trust represents a 1/6630th undivided
interest in the principal and net income of the Trust. The principal amount of
Bonds deposited in the Trust per Unit is reflected in the Summary of Essential
Information. (See "The Trust--Organization" in Part B of this Prospectus.) The
Units being offered hereby are issued and outstanding Units which have been
purchased by the Sponsor in the secondary market.
PUBLIC OFFERING PRICE. The secondary market Public Offering
Price of each Unit is equal to the aggregate bid price of the Bonds in the Trust
divided by the number of Units outstanding, plus a sales charge of 4.6% of the
Public Offering Price, or 4.789% of the net amount invested in Bonds per Unit.
In addition, accrued interest to the expected date of settlement is added to the
Public Offering Price. If Units had been purchased on the Evaluation Date, the
Public Offering Price per Unit would have been $300.55 plus accrued interest of
$10.81 under the monthly distribution plan and $11.89 under the semi-annual
distribution plan for a total of $311.36 and $312.44, respectively. The Public
Offering Price per Unit can vary on a daily basis in accordance with
fluctuations in the aggregate bid prices of the Bonds. (See "Public
Offering--Offering Price" in Part B of this Prospectus.)
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. Units
of each Trust are offered to investors on a "dollar price" basis (using the
computation method described under "Public Offering -- Offering Price" in Part
B) as distinguished from a "yield price" basis often used in offerings of tax
exempt bonds (involving the lesser of the yield as computed to maturity of bonds
or to an earlier redemption date). Since they are offered on a dollar price
basis, the rate of return on an investment in Units of each Trust is measured in
terms of "Estimated Current Return" and "Estimated Long Term Return".
Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted bond
practices, which practices take into account not only the interest payable on
the Bond but also the amortization of premiums or accretion of discounts, if
any; (2) calculating the average of the yields for the Bonds in the Trust's
portfolio by weighing each Bond's yield by the market value of the Bond and by
the amount of time remaining to the date to which the Bond is priced (thus
A-2
111201.1
<PAGE>
creating an average yield for the portfolio of the Trust); and (3) reducing the
average yield for the portfolio of the Trust in order to reflect estimated fees
and expenses of the Trust and the maximum sales charge paid by investors. The
resulting Estimated Long Term Return represents a measure of the return to
investors earned over the estimated life of the Trust. (For the Estimated Long
Term Return to Certificateholders under the monthly and semi-annual distribution
plans, see "Summary of Essential Information".)
Estimated Current Return is a measure of the Trust's cash
flow. Estimated Current Return is computed by dividing the Estimated Net Annual
Interest Income per Unit by the Public Offering Price per Unit. In contrast to
the Estimated Long Term Return, the Estimated Current Return does not take into
account the amortization of premium or accretion of discount, if any, on the
Bonds in the portfolio of the Trust. Moreover, because interest rates on Bonds
purchased at a premium are generally higher than current interest rates on newly
issued bonds of a similar type with comparable rating, the Estimated Current
Return per Unit may be affected adversely if such Bonds are redeemed prior to
their maturity.
The Estimated Net Annual Interest Income per Unit of the Trust
will vary with changes in the fees and expenses of the Trustee and the Evaluator
applicable to the Trust and with the redemption, maturity, sale or other
disposition of the Bonds in the Trust. The Public Offering Price will vary with
changes in the bid prices of the Bonds. Therefore, there is no assurance that
the present Estimated Current Return or Estimated Long Term Return will be
realized in the future. (For the Estimated Current Return to Certificateholders
under the monthly and semi-annual distribution plans, see "Summary of Essential
Information". See "Estimated Long Term Return and Estimated Current Return" in
Part B of this Prospectus.)
A schedule of cash flow projections is available from the
Sponsors upon request.
DISTRIBUTIONS. Distributions of interest income, less
expenses, will be made by the Trust either monthly or semi-annually depending
upon the plan of distribution applicable to the Unit purchased. A purchaser of a
Unit in the secondary market will initially receive distributions in accordance
with the plan selected by the prior owner of such Unit and may thereafter change
the plan as provided under "Interest and Principal Distributions" in Part B of
this Prospectus. Distributions of principal, if any, will be made semi-annually
on June 15 and December 15 of each year. For estimated monthly and semi-annual
interest distributions, see "Summary of Essential Information".
MARKET FOR UNITS. The Sponsor, although not obligated to do
so, presently maintains and intends to continue to maintain a secondary market
for the Units at prices based upon the aggregate bid price of the Bonds in the
Trust portfolio. The reoffer price will be based on the aggregate bid price of
the Bonds plus a sales charge of 4.6% (4.789% of the net amount invested), plus
net accrued interest. If a market is not maintained a Certificateholder will be
able to redeem his or her Units with the Trustee at a price also based upon the
aggregate bid price of the Bonds. (See "Sponsor Repurchase" and "Offering Price"
in Part B of this Prospectus.)
TOTAL REINVESTMENT PLAN. Certificateholders under the
semi-annual plan of distribution have the opportunity to have all their regular
interest distributions, and principal distributions, if any, reinvested in
available series of "New York Municipal Trust". (See "Total Reinvestment Plan"
in Part B of this Prospectus.) The Plan is not designed to be a complete
investment program.
A-3
111201.1
<PAGE>
NEW YORK MUNICIPAL TRUST
SERIES 3
SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1996
<TABLE>
<S> <C> <C>
Date of Deposit: March 1, 1979 Evaluation Time: 4:00 p.m.
Principal Amount of Bonds ... $1,850,000 New York Time.
Number of Units ............. 6,630 Minimum Principal Distribution:
Fractional Undivided Inter- $1.00 per Unit.
est in Trust per Unit ..... 1/6630 Weighted Average Life to
Principal Amount of Maturity: 14.3 Years.
Bonds per Unit ............ $279.03 Minimum Value of Trust: Trust
Secondary Market Public may be terminated if value of
Offering Price** Trust is less than $3,200,000 in
Aggregate Bid Price principal amount of Bonds.
of Bonds in Trust ....... $1,901,550+++ Mandatory Termination Date:
Divided by 6,630 Units ... $286.81 The earlier of December 31, 2028
Plus Sales Charge of 4.6% or the disposition of the last
of Public Offering Price. $13.74 Bond in the Trust.
Public Offering Price Trustee***: The Bank of New
per Unit ................ $300.55+ York.
Redemption and Sponsor's Trustee's Annual Fee: Monthly
Repurchase Price plan $1.08 per $1,000 and semi-
per Unit .................. $286.81+ annual plan $.60 per $1,000.
+++ Evaluator: Kenny S&P Evaluation
++++ Services.
Excess of Secondary Market Evaluator's Fee for Each
Public Offering Price Evaluation: Minimum of $35 plus
over Redemption and $.25 per each issue of Bonds in
Sponsor's Repurchase excess of 50 issues (treating
Price per Unit ............ $13.74++++ separate maturities as separate
Difference between Public issues).
Offering Price per Unit Sponsor: Reich & Tang
and Principal Amount per Distributors L.P.
Unit Premium/(Discount) ... $21.52
</TABLE>
PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED
Monthly Semi-Annual
Option Option
Gross annual interest income# ......... $20.22 $20.22
Less estimated annual fees and
expenses ............................ 1.35 1.09
Estimated net annual interest ______ ______
income (cash)# ...................... $18.87 $19.13
Estimated interest distribution# ...... 1.57 9.56
Estimated daily interest accrual# ..... .0524 .0531
Estimated current return#++ ........... 6.28% 6.36%
Estimated long term return++ .......... 5.56% 5.65%
Record dates .......................... 1st of Dec. 1 and
each month June 1
Interest distribution dates ........... 15th of Dec. 15 and
each month June 15
A-4
111201.1
<PAGE>
Footnotes to Summary of Essential Information
* The Date of Deposit is the date on which the Trust Agreement was signed
and the deposit of the Bonds with the Trustee made.
** For information regarding offering price per unit and applicable sales
charge under the Total Reinvestment Plan, see Total Reinvestment Plan
in Part B of this Prospectus.
*** The Trustee maintains its corporate trust office at 101 Barclay Street,
New York, New York 10286 (tel. no.: 1-212-495-1784). For information
regarding redemption by the Trustee, see "Trustee Redemption" in Part B
of this Prospectus.
+ Plus accrued interest to expected date of settlement (approximately
three business days after purchase) of $10.81 monthly and $11.89
semi-annually.
++ The estimated current return and estimated long term returns are
increased for transactions entitled to a discount (see "Employee
Discounts" in Part B of this Prospectus), and are higher under the
semi-annual option due to lower Trustee's fees and expenses.
+++ Based solely upon the bid side evaluation of the underlying Bonds
(including, where applicable, undistributed cash in the principal
account). Upon tender for redemption, the price to be paid will be
calculated as described under "Trustee Redemption" in Part B of this
Prospectus.
++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.
# Does not include accrual from original issue discount bonds, if any.
FINANCIAL AND STATISTICAL INFORMATION
Selected data for each Unit outstanding for the periods listed below:
<TABLE>
<CAPTION>
Distribu-
tions of
Distributions of Interest Principal
During the Period (per Unit) During
Net Asset* the
Units Out- Value Monthly Annual Period
Period Ended standing Per Unit Option Option (Per Unit)
<S> <C> <C> <C> <C> <C>
December 31, 1994 6,792 $426.81 $39.62 $30.00 $ 3.01
December 31, 1995 6,771 419.47 29.24 29.60 34.43
December 31, 1996 6,630 299.04 25.14 25.50 112.71
</TABLE>
- --------
* Net Asset Value per Unit is calculated by dividing net assets as
disclosed in the "Statement of Net Assets" by the number of Units
outstanding as of the date of the Statement of Net Assets. See Note 5
of Notes to Financial Statements for a description of the components of
Net Assets.
A-5
111201.1
<PAGE>
INFORMATION REGARDING THE TRUST
AS OF DECEMBER 31, 1996
DESCRIPTION OF PORTFOLIO
Each Unit in the Trust consists of a 1/6630th fractional
undivided interest in the principal and net income of the Trust in the ratio of
one Unit for each $279.03 principal amount of the Bonds currently held in the
Trust. The Sponsor has participated as a sole underwriter or manager, co-manager
or member of an underwriting syndicate from which 21.3% of the initial aggregate
principal amount of the Bonds were acquired. The portfolio of the Trust consists
of 7 issues representing obligations of 3 issuers located in New York State.
Five issues representing $730,000 of the principal amount of the Bonds in the
Trust are "moral obligation" bonds. All of the Bonds in the Trust are subject to
redemption prior to their stated maturity dates pursuant to sinking fund or
optional call provisions. The Bonds may also be subject to other calls, which
may be permitted or required by events which cannot be predicted (such as
destruction, condemnation, termination of a contract, or receipt of excess or
unanticipated revenues). One issue representing $200,000 of the principal amount
of the Bonds is a general obligation bond. All 6 of the remaining issues
representing $1,650,000 of the principal amount of the Bonds are payable from
the income of a specific project or authority and are not supported by the
issuer's power to levy taxes. The portfolio is divided for purpose of issue as
follows: Health 1, Hospital and Nursing Projects 4 and Housing 1. For an
explanation of the significance of these factors see "The Trust--Portfolio" and
"Special Factors Concerning the Portfolio" in Part B of this Prospectus. See
"Tax Status" in Part B of this Prospectus.
None of the Bonds in the Trust are subject to the federal
individual alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.
A-6
111201.1
<PAGE>
Report of Independent Accountants
To the Sponsor, Trustee and Certificateholders of
New York Municipal Trust, Series 3
In our opinion, the accompanying statement of net assets, including the
portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of New York Municipal Trust, Series 3
(the "Trust") at December 31, 1996, the results of its operations, the changes
in its net assets and the financial highlights for the year then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at December
31, 1996 by correspondence with the Trustee, provides a reasonable basis for the
opinion expressed above. The financial statements for the prior periods
presented were audited by other independent accountants whose report dated March
31, 1996 expressed an unqualified opinion on those financial statements.
PRICE WATERHOUSE LLP
160 Federal Street
Boston, MA 02110
March 28, 1997
<PAGE>
<TABLE>
<CAPTION>
New York Municipal Trust, Series 3
Portfolio
December 31, 1996
- -------------------------------------------------------------------------------------------------------------------
Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount Title of Bonds (1) Maturity (2) Ref.-Refunding Value (3)
<S> <C> <C> <C> <C> <C>
1 $ 10,000 State of New York General Obligation Bonds A* 5.250% No Sinking Fund $ 9,679
5/01/2014 5/01/97 @ 102 Ref.
1a 190,000 State of New York General Obligation Bonds A * 5.250 No Sinking Fund 182,193
5/01/2016 5/01/97 @ 102 Ref.
2 250,000 New York State Housing Finance Agency, AAA 6.375 No Sinking Fund 266,013
Health Facilities Bonds, 1972 Series A 5/01/2000 None
3 35,000 New York State Housing Finance Agency, A * 5.875 No Sinking Fund 35,732
Hospital and Nursing Project Bonds, 11/01/2011 5/01/97 @ 102 Ref.
1971 Series A
4 45,000 New York State Housing Finance Agency, A * 5.500 No Sinking Fund 45,711
Hospital and Nursing Project Bonds, 11/01/2012 1/31/97 @ 103 Ref.
1972 Series A
5 50,000 New York State Housing Finance Agency, A* 5.500 No Sinking Fund 50,434
Hospital and Nursing Project Bonds, 11/01/2013 1/31/97 @ 103 Ref.
1972 Series A
6 350,000 New York State Housing Finance Agency, A* 7.000 11/01/98 @ 100 S.F. 360,500
Hospital and Nursing Project Bonds, 11/01/2017 1/31/97 @ 102 Ref.
1977 Series A
7 920,000 Riverhead Housing Development NR 8.250 Currently @ 100 S.F. 951,224
Corporation (New York), Section 8 8/01/2010 1/31/97 @ 104 Ref.
Assisted Mortgage Revenue Bonds
(Riverhead Village Apartments Project)
---------- -------------
$1,850,000 Total Investments (Cost $1,615,577) $ 1,901,486
========== =============
</TABLE>
See accompanying footnotes to portfolio and notes to financial statements.
<PAGE>
New York Municipal Trust, Series 3
Footnotes to Portfolio
- --------------------------------------------------------------------------------
1. All ratings are by Kenny S&P Evaluation Services, a business unit of J.J.
Kenny Company, Inc., a subsidiary of The McGraw-Hill Companies, Inc.,
except for those identified by an asterisk (*) which are by Moody's
Investors Service, Inc. A brief description of the ratings symbols and
their meaning is set forth under "Description of Bond Ratings" in Part B
of the Prospectus.
2. See "The Trust - Portfolio" in Part B of the Prospectus for an
explanation of redemption features. See "Tax Status" in Part B of the
Prospectus for a statement of the Federal tax consequences to a
Certificateholder upon the sale, redemption or maturity of a bond.
3. At December 31, 1996, the net unrealized appreciation of all the bonds
was comprised of the following:
Gross unrealized appreciation $ 298,768
Gross unrealized depreciation (12,859)
-------------
Net unrealized appreciation $ 285,909
=============
4. The Bonds may also be subject to other calls, which may be permitted or
required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess or
unanticipated revenues).
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 3
Statement of Net Assets
December 31, 1996
- --------------------------------------------------------------------------------
Investments in Securities,
at Market Value (Cost $1,615,577) $1,901,486
----------
Other Assets
Accrued Interest 41,328
Cash 39,814
----------
Total Other Assets 81,142
----------
Net Assets (6,630 Units of Fractional Undivided
Interest Outstanding, $299.04 per $1,982,628
==========
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 3
Statement of Operations
- --------------------------------------------------------------------------------
For the Years Ended December 31,
1996 1995 1994
Investment Income
Interest $173,996 $207,525 $211,612
-------- -------- --------
Expenses
Trustee's Fees 6,506 5,229 6,510
Evaluator's Fees 3,286 3,013 3,308
-------- -------- --------
Total Expenses 9,792 8,242 9,818
-------- -------- --------
Net Investment Income 164,204 199,283 201,794
-------- -------- --------
Realized and Unrealized Gain (Loss)
Realized Gain on
Investments 6,310 46,346 2,283
Change in Unrealized Appreciation
(Depreciation) on Investments (53,163) 127,780 (195,077)
-------- -------- --------
Net Gain (Loss) on Investments (46,853) 174,126 (192,794)
-------- -------- --------
Net Increase in Net Assets
Resulting From Operations $117,351 $373,409 $9,000
======== ======== ======
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 3
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Years Ended December 31,
1996 1995 1994
Operations
Net Investment Income $164,204 $199,283 $201,794
Realized Gain
on Investments 6,310 46,346 2,283
Change in Unrealized Appreciation
(Depreciation) on Investments (53,163) 127,780 (195,077)
------- ------- --------
Net Increase in Net Assets
Resulting From Operations 117,351 373,409 9,000
------- ------- --------
Distributions to Certificateholders
Investment Income 169,103 198,959 202,216
Principal 750,571 233,126 20,444
Redemptions
Interest 2,348 ---- ----
Principal 52,938 ---- ----
------- ------- --------
Total Distributions
and Redemptions 974,960 432,085 222,660
------- ------- --------
Total (Decrease) (857,609) (58,676) (213,660)
Net Assets
Beginning of Year 2,840,237 2,898,913 3,112,573
--------- ------- --------
End of Year (Including
Undistributed Net Investment
Income of $72,018, $79,265
and $78,941, Respectively) $1,982,628 $2,840,237 $2,898,913
========== ========== ==========
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 3
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Organization
New York Municipal Trust, Series 3 (the "Trust") was organized on March
1, 1979 by Bear, Stearns & Co. Inc. under the laws of the State of New
York by a Trust Indenture and Agreement, and is registered under the
Investment Company Act of 1940. The Trust was formed to preserve
capital and to provide interest income.
Effective September 28, 1995, Reich & Tang Distributors L.P. ("Reich &
Tang") has become the successor sponsor (the "Sponsor") to certain of
the unit investment trusts previously sponsored by Bear, Stearns & Co.
Inc. As successor Sponsor, Reich & Tang has assumed all of the
obligations and rights of Bear, Stearns & Co. Inc., the previous
sponsor.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies
consistently followed by the Trust in preparation of its financial
statements. The policies are in conformity with generally accepted
accounting principles ("GAAP"). The preparation of financial statements
in accordance with GAAP requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual amounts could differ from those estimates.
Interest income is recorded on the accrual basis.
Security Valuation
Investments are carried at market value which is determined by Kenny
S&P Evaluation Services, a business unit of J.J. Kenny Company, Inc., a
subsidiary of The McGraw-Hill Companies, Inc. The market value of the
portfolio is based upon the bid prices for the bonds at the end of the
year, which approximates the fair value of the security at that date,
except that the market value on the date of deposit represents the cost
to the Trust based on the offering prices for investments at that date.
The difference between cost and market value is reflected as unrealized
appreciation (depreciation) of investments. Securities transactions are
recorded on the trade date. Realized gains (losses) from securities
transactions are determined on the basis of average cost of the
securities sold or redeemed.
3. Income Taxes
No provision for federal income taxes has been made in the accompanying
financial statements because the Trust intends to continue to qualify
for the tax treatment applicable to Grantor Trusts under the Internal
Revenue Code. Under existing law, if the Trust so qualifies, it will
not be subject to federal income tax on net income and capital gains
that are distributed to unitholders.
<PAGE>
New York Municipal Trust, Series 3
Notes to Financial Statements
- --------------------------------------------------------------------------------
4. Trust Administration
The Trustee has custody of assets and responsibility for the accounting
records and financial statements of the Trust and is responsible for
establishing and maintaining a system of internal control related
thereto. The Trustee is also responsible for all estimates of expenses
and accruals reflected in the Trust's financial statements.
The Trust Indenture and Agreement provides for interest distributions
as often as monthly (depending upon the distribution plan elected by
the Certificateholders).
The Trust Indenture and Agreement further requires that principal
received from the disposition of bonds, other than those bonds sold in
connection with the redemption of units, be distributed to
Certificateholders.
The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. For the years ended December 31, 1996 and 1995, 141 and
21 units were redeemed, respectively. No units were redeemed during the
year ended December 31, 1994.
The Trust pays an annual fee for trustee services rendered by the
Trustee that ranges from $.60 to $1.08 per $1,000 of outstanding
investment principal. In addition, a minimum fee of $35.00 is paid to a
service bureau for each portfolio valuation. For the year ended
December 31, 1996, the "Trustee's Fees" are comprised of Trustee fees
of $4,831 and other expenses of $1,675. The other expenses include
professional, printing and miscellaneous fees.
<PAGE>
New York Municipal Trust, Series 3
Notes to Financial Statements
- --------------------------------------------------------------------------------
5. Net Assets
At December 31, 1996, the net assets of the Trust represented
the interest of Certificateholders as follows:
Original cost to Certificateholders $8,144,657
Less Initial Gross Underwriting Commission 366,480
----------
7,778,177
Accumulated Cost of Securities Sold,
Matured or Called (6,162,600)
Net Unrealized Appreciation 285,909
Undistributed Net Investment Income 72,018
Undistributed Proceeds From Investments 9,124
----------
Total $1,982,628
==========
The original cost to Certificateholders, less the initial gross
underwriting commission, represents the aggregate initial public
offering price net of the applicable sales charge on 8,000 units of
fractional undivided interest of the Trust as of the date of deposit.
6. Concentration of Credit Risk
Since the Trust invests a portion of its assets in municipal bonds, it
may be affected by economic and political developments in the
municipalities. Certain debt obligations held by the Trust may be
entitled to the benefit of insurance, standby letters of credit or
other guarantees of banks or other financial institutions.
<PAGE>
New York Municipal Trust, Series 3
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. Financial Highlights (per unit)*
Selected data for a unit of the Trust outstanding
for the year ended December 31, 1996:
Net Asset Value, Beginning of Year ** $419.47
-------
Interest Income 25.97
Expenses (1.46)
-------
Net Investment Income 24.51
-------
Net Gain or Loss on Investments(1) (7.34)
-------
Total from Investment Operations 17.17
-------
Less Distributions
to Certificateholders
Income 25.24
Principal 112.01
for Redemptions
Interest .35
-------
Total Distributions 137.60
-------
Net Asset Value, End of Year ** $299.04
=======
See "Financial and Statistical Information" in Part A of this
Prospectus for amounts of per unit distributions during the years ended
December 31, 1996, 1995 and 1994 based on actual units.
(1) Net gain or loss on investments is a result of changes in outstanding
units since January 1, 1996 and the dates of net gain and loss on
investments.
- -----------
* Unless otherwise stated, based upon average units outstanding during
the year of 6,701 ([6,630 + 6,771]/2).
**Based upon actual units outstanding.
<PAGE>
Prospectus Part A Dated April 30, 1997
NEW YORK MUNICIPAL TRUST
SERIES 4
------------------------------------------------------------------------------
The Trust is a unit investment trust with an underlying
portfolio of long-term tax-exempt bonds and was formed to preserve capital and
to provide interest income (including, where applicable, earned original issue
discount) which, in the opinions of bond counsel to the respective issuers, is,
with certain exceptions, currently exempt from regular federal income tax and
New York State and New York City income taxes under existing law but may be
subject to state and local taxes in other jurisdictions. There can be no
assurance that the Trust's investment objectives will be achieved. Although the
Supreme Court has determined that Congress has the authority to subject interest
on bonds such as the Bonds in the Trust to regular federal income taxation,
existing law excludes such interest from regular federal income tax. Such
interest income may, however, be subject to federal corporate alternative
minimum tax and to state and local taxes in other jurisdictions. (See
"Description of Portfolio" in this Part A for a list of these Bonds which pay
interest income subject to the federal individual alternative minimum tax.) In
addition, capital gains are subject to tax. (See "Tax Status" and "The
Trust--Portfolios" in Part B of this Prospectus.) The Sponsor is Reich & Tang
Distributors L.P. The value of the Units of the Trust will fluctuate with the
value of the underlying bonds. Minimum purchase: 1 Unit.
This Prospectus consists of two parts. Part A contains the
Summary of Essential Information as of December 31, 1996 (the "Evaluation
Date"), a summary of certain specific information regarding the Trust and
audited financial statements of the Trust, including the related portfolio, as
of the Evaluation Date. Part B of this Prospectus contains a general summary of
the Trust. Part A of this Prospectus may not be distributed unless accompanied
by Part B. Investors should retain both parts of this Prospectus for future
reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
THE TRUST. The Trust seeks to achieve its investment
objectives through investment in a fixed, diversified portfolio of long-term
bonds (the "Bonds") issued by or on behalf of the State of New York and its
political subdivisions, municipalities and public authorities and by the
Commonwealth of Puerto Rico and its public authorities. All of the Bonds in the
Trust were rated "A" or better by Standard & Poor's Corporation or Moody's
Investors Service, Inc. at the time originally deposited in the Trust. For a
discussion of the significance of such ratings, see "Description of Bond
Ratings" in Part B of this Prospectus. For a list of ratings on the Evaluation
Date, see "Portfolio".
Some of the Bonds in the Trust have been issued with optional
refunding or refinancing provisions ("Refunded Bonds") whereby the issuer of the
Bond has the right to call such Bond prior to its stated maturity date (and
other than pursuant to sinking fund provisions) and to issue new bonds
111199.1
<PAGE>
("Refunding Bonds") in order to finance the redemption. Issuers typically
utilize refunding calls in order to take advantage of lower interest rates in
the marketplace. Some of these Refunded Bonds may be called for redemption
pursuant to pre-refunding provisions ("Pre-Refunded Bonds") whereby the proceeds
from the issue of the Refunding Bonds are typically invested in government
securities in escrow for the benefit of the holders of the Pre- Refunded Bonds
until the refunding call date. Usually, Pre-Refunded Bonds will bear a triple-A
rating because of this escrow. The issuers of Pre- Refunded Bonds must call such
Bonds on their refunding call date. Therefore, as of such date, the Trust will
receive the call price for such bonds but will cease receiving interest income
with respect to them. For a list of those Bonds which are Pre-Refunded Bonds as
of the Evaluation Date, if any, see "Notes to Financial Statements" in this Part
A. Some of the Bonds in the portfolio may have been purchased at an aggregate
premium over par. The payment of interest and preservation of capital are, of
course, dependent upon the continuing ability of the issuers of the Bonds to
meet their obligations.
Investment in the Trust should be made with an understanding
of the risks which an investment in long-term fixed rate debt obligations may
entail, including the risk that the value of the underlying portfolio will
decline with increases in interest rates. A Trust designated as a long-term
trust must have a dollar-weighted average portfolio maturity of more than ten
years.
Each Unit in the Trust represents a 1/11163rd undivided
interest in the principal and net income of the Trust. The principal amount of
Bonds deposited in the Trust per Unit is reflected in the Summary of Essential
Information. (See "The Trust--Organization" in Part B of this Prospectus.) The
Units being offered hereby are issued and outstanding Units which have been
purchased by the Sponsor in the secondary market.
PUBLIC OFFERING PRICE. The secondary market Public Offering
Price of each Unit is equal to the aggregate bid price of the Bonds in the Trust
divided by the number of Units outstanding, plus a sales charge of 3.6% of the
Public Offering Price, or 3.737% of the net amount invested in Bonds per Unit.
In addition, accrued interest to the expected date of settlement is added to the
Public Offering Price. If Units had been purchased on the Evaluation Date, the
Public Offering Price per Unit would have been $457.99 plus accrued interest of
$8.16 under the monthly distribution plan, $9.81 under the semi-annual
distribution plan and $9.77 under the annual distribution plan for a total of
$466.15, $467.80 and $467.76, respectively. The Public Offering Price per Unit
can vary on a daily basis in accordance with fluctuations in the aggregate bid
prices of the Bonds. (See "Public Offering--Offering Price" in Part B of this
Prospectus.)
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. Units
of each Trust are offered to investors on a "dollar price" basis (using the
computation method described under "Public Offering -- Offering Price" in Part
B) as distinguished from a "yield price" basis often used in offerings of tax
exempt bonds (involving the lesser of the yield as computed to maturity of bonds
or to an earlier redemption date). Since they are offered on a dollar price
basis, the rate of return on an investment in Units of each Trust is measured in
terms of "Estimated Current Return" and "Estimated Long Term Return".
Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted bond
practices, which practices take into account not only the interest payable on
the Bond but also the amortization of premiums or accretion of discounts, if
any; (2) calculating the average of the yields for the Bonds in the Trust's
portfolio by weighing each Bond's yield by the market value of the Bond and by
A-2
111199.1
<PAGE>
the amount of time remaining to the date to which the Bond is priced (thus
creating an average yield for the portfolio of the Trust); and (3) reducing the
average yield for the portfolio of the Trust in order to reflect estimated fees
and expenses of the Trust and the maximum sales charge paid by investors. The
resulting Estimated Long Term Return represents a measure of the return to
investors earned over the estimated life of the Trust. (For the Estimated Long
Term Return to Certificateholders under the monthly, semi-annual and annual
distribution plans, see "Summary of Essential Information".)
Estimated Current Return is a measure of the Trust's cash
flow. Estimated Current Return is computed by dividing the Estimated Net Annual
Interest Income per Unit by the Public Offering Price per Unit. In contrast to
the Estimated Long Term Return, the Estimated Current Return does not take into
account the amortization of premium or accretion of discount, if any, on the
Bonds in the portfolio of the Trust. Moreover, because interest rates on Bonds
purchased at a premium are generally higher than current interest rates on newly
issued bonds of a similar type with comparable rating, the Estimated Current
Return per Unit may be affected adversely if such Bonds are redeemed prior to
their maturity.
The Estimated Net Annual Interest Income per Unit of the Trust
will vary with changes in the fees and expenses of the Trustee and the Evaluator
applicable to the Trust and with the redemption, maturity, sale or other
disposition of the Bonds in the Trust. The Public Offering Price will vary with
changes in the bid prices of the Bonds. Therefore, there is no assurance that
the present Estimated Current Return or Estimated Long Term Return will be
realized in the future. (For the Estimated Current Return to Certificateholders
under the monthly, semi-annual and annual distribution plans, see "Summary of
Essential Information". See "Estimated Long Term Return and Estimated Current
Return" in Part B of this Prospectus.)
A schedule of cash flow projections is available from the
Sponsors upon request.
DISTRIBUTIONS. Distributions of interest income, less
expenses, will be made by the Trust either monthly, semi-annually or annually
depending upon the plan of distribution applicable to the Unit purchased. A
purchaser of a Unit in the secondary market will initially receive distributions
in accordance with the plan selected by the prior owner of such Unit and may
thereafter change the plan as provided under "Interest and Principal
Distributions" in Part B of this Prospectus. Distributions of principal, if any,
will be made semi-annually on June 15 and December 15 of each year. For
estimated monthly, semi-annual and annual interest distributions, see "Summary
of Essential Information".
MARKET FOR UNITS. The Sponsor, although not obligated to do
so, presently maintains and intends to continue to maintain a secondary market
for the Units at prices based upon the aggregate bid price of the Bonds in the
Trust portfolio. The reoffer price will be based on the aggregate bid price of
the Bonds plus a sales charge of 3.6% (3.737% of the net amount invested), plus
net accrued interest. If a market is not maintained a Certificateholder will be
able to redeem his or her Units with the Trustee at a price also based upon the
aggregate bid price of the Bonds. (See "Sponsor Repurchase" and "Offering Price"
in Part B of this Prospectus.)
TOTAL REINVESTMENT PLAN. Certificateholders under the
semi-annual and annual plans of distribution have the opportunity to have all
their regular interest distributions, and principal distributions, if any,
reinvested in available series of "New York Municipal Trust". (See "Total
Reinvestment Plan" in Part B of this Prospectus.) The Plan is not designed to be
a complete investment program.
A-3
111199.1
<PAGE>
NEW YORK MUNICIPAL TRUST
SERIES 4
SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1996
<TABLE>
<S> <C> <C>
Date of Deposit: May 10, 1979 Minimum Principal Distribution:
Principal Amount of Bonds ... $4,965,000 $1.00 per Unit.
Number of Units ............. 11,163 Weighted Average Life to
Fractional Undivided Inter- Maturity: 8.9 Years.
est in Trust per Unit ..... 1/11163 Minimum Value of Trust:
Principal Amount of Trust may be terminated if
Bonds per Unit ............ $444.77 value of Trust is less than
Secondary Market Public $5,200,000 in principal amount
Offering Price** of Bonds.
Aggregate Bid Price Mandatory Termination Date:
of Bonds in Trust ....... $4,928,402+++ The earlier of December 31,
Divided by 11,163 Units ... $441.49 2028 or the disposition of the
Plus Sales Charge of 3.6% last Bond in the Trust.
of Public Offering Price. $16.50 Trustee***: The Bank of New
Public Offering Price York.
per Unit ................ $457.99+ Trustee's Annual Fee: Monthly
Redemption and Sponsor's plan $1.08 per $1,000; semi-
Repurchase Price annual plan $.60 per $1,000;
per Unit .................. $441.49+ and annual plan is $.40 per
+++ $1,000.
++++ Evaluator: Kenny S&P Evaluation
Excess of Secondary Market Services.
Public Offering Price Evaluator's Fee for Each
over Redemption and Evaluation: Minimum of $35
Sponsor's Repurchase plus $.25 per each issue of
Price per Unit ............ $16.50++++ Bonds in excess of 50 issues
Difference between Public (treating separate maturities
Offering Price per Unit as separate issues).
and Principal Amount per Sponsor: Reich & Tang
Unit Premium/(Discount) ... $13.22 Distributors L.P.
Evaluation Time: 4:00 p.m.
New York Time.
</TABLE>
PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED
<TABLE>
<CAPTION>
Monthly Semi-Annual Annual
Option Option Option
<S> <C> <C> <C>
Gross annual interest income# ......... $29.42 $29.42 $29.42
Less estimated annual fees and
expenses ............................ 1.28 .90 .78
Estimated net annual interest ______ ______ ______
income (cash)# ...................... $28.14 $28.52 $28.64
Estimated interest distribution# ...... 2.34 14.26 28.64
Estimated daily interest accrual# ..... .0781 .0792 .0795
Estimated current return#++ ........... 6.14% 6.23% 6.25%
Estimated long term return++ .......... 3.93% 4.02% 4.04%
Record dates .......................... 1st of Dec. 1 and Dec. 1
each month June 1
Interest distribution dates ........... 15th of Dec. 15 and Dec. 15
each month June 15
</TABLE>
A-4
111199.1
<PAGE>
Footnotes to Summary of Essential Information
* The Date of Deposit is the date on which the Trust Agreement was signed
and the deposit of the Bonds with the Trustee made.
** For information regarding offering price per unit and applicable sales
charge under the Total Reinvestment Plan, see Total Reinvestment Plan
in Part B of this Prospectus.
*** The Trustee maintains its corporate trust office at 101 Barclay Street,
New York, New York 10286 (tel. no.: 1-212-495-1784). For information
regarding redemption by the Trustee, see "Trustee Redemption" in Part B
of this Prospectus.
+ Plus accrued interest to expected date of settlement (approximately
three business days after purchase) of $8.16 monthly, $9.81
semi-annually and $9.77 annually.
++ The estimated current return and estimated long term returns are
increased for transactions entitled to a discount (see "Employee
Discounts" in Part B of this Prospectus), and are higher under the
semi-annual and annual options due to lower Trustee's fees and
expenses.
+++ Based solely upon the bid side evaluation of the underlying Bonds
(including, where applicable, undistributed cash in the principal
account). Upon tender for redemption, the price to be paid will be
calculated as described under "Trustee Redemption" in Part B of this
Prospectus.
++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.
# Does not include accrual from original issue discount bonds, if any.
FINANCIAL AND STATISTICAL INFORMATION
Selected data for each Unit outstanding for the periods listed below:
<TABLE>
<CAPTION>
Distribu-
tions of
Distributions of Interest Principal
During the Period (per Unit) During
Net Asset* Semi- the
Units Out- Value Monthly Annual Annual Period
Period Ended standing Per Unit Option Option Option (Per Unit)
- ------------ ---------- ---------- ------- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1994 11,756 $509.94 $33.89 $34.36 $34.49 $ 4.63
December 31, 1995 11,651 527.93 33.64 34.12 34.26 1.33
December 31, 1996 11,163 449.06 32.01 32.47 32.60 73.22
</TABLE>
- --------
* Net Asset Value per Unit is calculated by dividing net assets as
disclosed in the "Statement of Net Assets" by the number of Units
outstanding as of the date of the Statement of Net Assets. See Note 5
of Notes to Financial Statements for a description of the components of
Net Assets.
A-5
111199.1
<PAGE>
INFORMATION REGARDING THE TRUST
AS OF DECEMBER 31, 1996
DESCRIPTION OF PORTFOLIO*
Each Unit in the Trust consists of a 1/11163rd fractional
undivided interest in the principal and net income of the Trust in the ratio of
one Unit for each $444.77 principal amount of the Bonds currently held in the
Trust. The Sponsor has not participated as a sole underwriter or manager,
co-manager or member of an underwriting syndicate from which any of the initial
aggregate principal amount of the Bonds were acquired. The portfolio of the
Trust consists of 14 issues representing obligations of 9 issuers located in New
York State and 3 in Puerto Rico. Four issues representing $1,590,000 of the
principal amount of the Bonds in the Trust are "moral obligation" bonds. All of
the Bonds in the Trust are subject to redemption prior to their stated maturity
dates pursuant to sinking fund or optional call provisions. The Bonds may also
be subject to other calls, which may be permitted or required by events which
cannot be predicted (such as destruction, condemnation, termination of a
contract, or receipt of excess or unanticipated revenues). Four issues
representing $1,335,000 of the principal amount of the Bonds are general
obligation bonds. All 10 of the remaining issues representing $3,630,000 of the
principal amount of the Bonds are payable from the income of a specific project
or authority and are not supported by the issuer's power to levy taxes. The
portfolio is divided for purpose of issue as follows: College and University
Dormitories 1, Electric 1, Health 2, Highway 1, Hospital and Nursing Projects 1,
Housing 3 and Port Authority 1. For an explanation of the significance of these
factors see "The Trust--Portfolio" and "Special Factors Concerning the
Portfolio" in Part B of this Prospectus. See "Tax Status" in Part B of this
Prospectus.
None of the Bonds in the Trust are subject to the federal
individual alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.
- --------
* Changes in the Trust Portfolio: From January 1, 1997 to March 21, 1997,
204 Units were redeemed from the Trust.
A-6
111199.1
<PAGE>
Report of Independent Accountants
To the Sponsor, Trustee and Certificateholders of
New York Municipal Trust, Series 4
In our opinion, the accompanying statement of net assets, including the
portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of New York Municipal Trust, Series 4
(the "Trust") at December 31, 1996, the results of its operations, the changes
in its net assets and the financial highlights for the year then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at December
31, 1996 by correspondence with the Trustee, provides a reasonable basis for the
opinion expressed above. The financial statements for the prior periods
presented were audited by other independent accountants whose report dated March
31, 1996 expressed an unqualified opinion on those financial statements.
PRICE WATERHOUSE LLP
160 Federal Street
Boston, MA 02110
March 28, 1997
<PAGE>
New York Municipal Trust, Series 4
Portfolio
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount Title of Bonds (1) Maturity (2) Ref.-Refunding Value (3)
<S> <C> <C> <C> <C> <C> <C>
1 $ 350,000 State of New York, General Obligation A* 3.400% 4/01/00 @ 100 S.F. $ 282,324
4/01/2009 4/01/00 @ 100 S.F.
1a 110,000 State of New York, General Obligation Bonds A* 3.400 4/01/00 @ 100 S.F. 95,159
4/01/2006 4/01/00 @ 100 S.F.
2 275,000 State of New York, General Obligation A* 5.000 No Sinking Fund 274,326
3/15/2007 None
3 100,000 State of New York, General Obligation A* 3.900 No Sinking Fund 98,181
8/15/2000 None
4 50,000 Dormitory Authority of the State of New York, B1* 8.750 Currently @ 103 S.F. 49,991
Revenue Bonds, Cornwall Hospital, Series A 7/01/2007 1/31/97 @ 100 Ref.
5 200,000 New York State Housing Finance Agency, AAA 5.600 No Sinking Fund 210,442
Health Facilities Bonds, 1973 Series A 5/01/2002 None
5a 65,000 New York State Housing Finance Agency, AAA 5.600 No Sinking Fund 68,909
Health Facilities Bonds, 1973 Series A 5/01/2003 None
5b 35,000 New York State Housing Finance Agency, AAA 5.600 No Sinking Fund 37,226
Health Facilities Bonds, 1973 Series A 11/01/2003 None
6 500,000 New York State Housing Finance Agency, AAA 7.750 No Sinking Fund 517,275
Health Facilities Bonds, 1974 Series A 11/01/1997 None
6a 300,000 New York State Housing Finance Agency, AAA 7.750 No Sinking Fund 320,184
Health Facilities Bonds, 1974 Series A 11/01/1998 None
7 440,000 New York State Housing Finance Agency, A* 6.875 11/01/98 @ 100 S.F. 449,728
Hospital and Nursing Home Project Bonds, 11/01/2007 1/31/97 @ 102 Ref.
1977 Series A
8 95,000 The Port Authority of New York and AA- 5.500 Currently @ 103.5 S.F. 95,085
New Jersey Consolidated Bonds, 10/01/2008 4/01/97 @ 100 Ref.
Forty-First Series (First Installment)
9 180,000 Riverhead Housing Development NR 8.250 Currently @ 100 S.F. 186,109
Corporation (New York), Section 8 8/01/2010 1/31/97 @ 104 Ref.
Assisted Mortgage Revenue Bonds
(Riverhead Village Apartment Project)
10 250,000 St. Casimir's Elderly Housing Corporation NR 7.375 9/01/00 @ 100 S.F. 260,148
(New York), First Lien Revenue Bonds 9/01/2010 3/01/97 @ 104 Ref.
(Series 1978 - Section 8 Assisted Project)
11 500,000 Suffolk County, New York (General Obligation) Baa1* 5.100 No Sinking Fund 505,720
Public Improvement Bonds, 1974 2/15/2000 None
12 185,000 Puerto Rico Highway Authority, A 5.500 Currently @ 100 S.F. 185,524
Highway Revenue Bonds, Series G 7/01/2003 7/01/97 @ 100 Ref.
13 1,255,000 Puerto Rico Housing Finance Corporation, A 8.250% Currently @ 100 S.F. 1,271,854
Multi-Family Mortgage Revenue Bonds, 6/01/2011 1/31/97 @ 101 Ref.
Series 1979A (Section 8 Assisted National
Housing Partnership/Albors Housing
Developments)
14 75,000 Puerto Rico Water Resources Authority, A 5.400 Currently @ 100 S.F. 77,612
Electric Revenue Bonds, Series 1971 - B 7/01/2001 1/1/01 @ 100 Ref.
----------
--------------
$4,965,000 Total Investments (Cost $4,463,546) $ 4,985,797
========== =============
</TABLE>
See accompanying footnotes to portfolio and notes to financial statements.
<PAGE>
New York Municipal Trust, Series 4
Footnotes to Portfolio
- --------------------------------------------------------------------------------
1. All ratings are by Kenny S&P Evaluation Services, a business unit of J.J.
Kenny Company, Inc., a subsidiary of The McGraw-Hill Companies, Inc.,
except for those identified by an asterisk (*) which are by Moody's
Investors Service, Inc. A brief description of the ratings symbols and
their meaning is set forth under "Description of Bond Ratings" in Part B
of the Prospectus.
2. See "The Trust - Portfolio" in Part B of the Prospectus for an
explanation of redemption features. See "Tax Status" in Part B of the
Prospectus for a statement of the Federal tax consequences to a
Certificateholder upon the sale, redemption or maturity of a bond.
3. At December 31, 1996, the net unrealized appreciation of all the bonds
was comprised of the following:
Gross unrealized appreciation $ 854,947
Gross unrealized depreciation (332,696)
-------------
Net unrealized appreciation $ 522,251
=============
4. The Bonds may also be subject to other calls, which may be permitted or
required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess or
unanticipated revenues).
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 4
Statement of Net Assets
December 31, 1996
- --------------------------------------------------------------------------------
Investments in Securities,
at Market Value (Cost $4,463,546) $ 4,985,797
--------------
Other Assets
Accrued Interest 68,808
--------------
Total Other Assets 68,808
--------------
Liabilities
Advance from Trustee 41,693
--------------
Total Liabilities 41,693
--------------
Excess of Other Assets over Total Liabilities 27,115
--------------
Net Assets (11,163 Units of Fractional Undivided
Interest Outstanding, $449.06 per Unit) $ 5,012,912
==============
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 4
Statement of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31,
1996 1995 1994
Investment Income
<S> <C> <C> <C>
Interest $ 378,794 $ 410,536 $ 416,385
----------- ----------- ----------
Expenses
Trustee's Fees 11,513 9,889 10,586
Evaluator's Fees 3,286 3,013 3,312
----------- ----------- ----------
Total Expenses 14,799 12,902 13,898
----------- ----------- ----------
Net Investment Income 363,995 397,634 402,487
----------- ----------- ----------
Realized and Unrealized Gain (Loss)
Realized Gain (Loss)
on Investments (871) 3,844 2,830
Change in Unrealized Appreciation
(Depreciation) on Investments (57,549) 221,573 (311,262)
----------- ----------- ----------
Net Gain (Loss) on Investments (58,420) 225,417 (308,432)
----------- ----------- ----------
Net Increase in Net Assets
Resulting From Operations $ 305,575 $ 623,051 $ 94,055
=========== =========== ===========
</TABLE>
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 4
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31,
1996 1995 1994
Operations
<S> <C> <C> <C>
Net Investment Income $ 363,995 $ 397,634 $ 402,487
Realized Gain (Loss)
on Investments (871) 3,844 2,830
Change in Unrealized Appreciation
(Depreciation) on Investments (57,549) 221,573 (311,262)
----------- ------------- -------------
Net Increase in Net Assets
Resulting From Operations 305,575 623,051 94,055
----------- ------------- -------------
Distributions to Certificateholders
Investment Income 369,628 395,775 402,175
Principal 831,808 15,622 54,745
Redemptions
Interest 5,622 1,413 693
Principal 236,537 54,120 34,631
----------- ------------- -------------
Total Distributions
and Redemptions 1,443,595 466,930 492,244
----------- ------------- -------------
Total Increase (Decrease) (1,138,020) 156,121 (398,189)
Net Assets
Beginning of Year 6,150,932 5,994,811 6,393,000
----------- ------------- -------------
End of Year (Including
Undistributed Net Investment
Income of $84,511, $95,766
and $95,320, Respectively) $ 5,012,912 $ 6,150,932 $ 5,994,811
============ ============ ============
</TABLE>
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 4
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Organization
New York Municipal Trust, Series 4 (the "Trust") was organized on May
10, 1979 by Bear, Stearns & Co. Inc. under the laws of the State of New
York by a Trust Indenture and Agreement, and is registered under the
Investment Company Act of 1940. The Trust was formed to preserve
capital and to provide interest income.
Effective September 28, 1995, Reich & Tang Distributors L.P. ("Reich &
Tang") has become the successor sponsor (the "Sponsor") to certain of
the unit investment trusts previously sponsored by Bear, Stearns & Co.
Inc. As successor Sponsor, Reich & Tang has assumed all of the
obligations and rights of Bear, Stearns & Co. Inc., the previous
sponsor.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies
consistently followed by the Trust in preparation of its financial
statements. The policies are in conformity with generally accepted
accounting principles ("GAAP"). The preparation of financial statements
in accordance with GAAP requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual amounts could differ from those estimates.
Interest income is recorded on the accrual basis.
Security Valuation
Investments are carried at market value which is determined by Kenny
S&P Evaluation Services, a business unit of J.J. Kenny Company, Inc., a
subsidiary of The McGraw-Hill Companies, Inc. The market value of the
portfolio is based upon the bid prices for the bonds at the end of the
year, which approximates the fair value of the security at that date,
except that the market value on the date of deposit represents the cost
to the Trust based on the offering prices for investments at that date.
The difference between cost and market value is reflected as unrealized
appreciation (depreciation) of investments. Securities transactions are
recorded on the trade date. Realized gains (losses) from securities
transactions are determined on the basis of average cost of the
securities sold or redeemed.
3. Income Taxes
No provision for federal income taxes has been made in the accompanying
financial statements because the Trust intends to continue to qualify
for the tax treatment applicable to Grantor Trusts under the Internal
Revenue Code. Under existing law, if the Trust so qualifies, it will
not be subject to federal income tax on net income and capital gains
that are distributed to unitholders.
<PAGE>
New York Municipal Trust, Series 4
Notes to Financial Statements
- --------------------------------------------------------------------------------
4. Trust Administration
The Trustee has custody of assets and responsibility for the accounting
records and financial statements of the Trust and is responsible for
establishing and maintaining a system of internal control related
thereto. The Trustee is also responsible for all estimates of expenses
and accruals reflected in the Trust's financial statements.
The Trust Indenture and Agreement provides for interest distributions
as often as monthly (depending upon the distribution plan elected by
the Certificateholders).
The Trust Indenture and Agreement further requires that principal
received from the disposition of bonds, other than those bonds sold in
connection with the redemption of units, be distributed to
Certificateholders.
The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. For the years ended December 31, 1996, 1995 and 1994,
488, 105 and 68 units were redeemed, respectively.
The Trust pays an annual fee for trustee services rendered by the
Trustee that ranges from $.40 to $1.08 per $1,000 of outstanding
investment principal. In addition, a minimum fee of $35.00 is paid to a
service bureau for each portfolio valuation. For the year ended
December 31, 1996, the "Trustee's Fees" are comprised of Trustee fees
of $9,839 and other expenses of $1,674. The other expenses include
professional, printing and miscellaneous fees.
<PAGE>
New York Municipal Trust, Series 4
Notes to Financial Statements
- --------------------------------------------------------------------------------
5. Net Assets
At December 31, 1996, the net assets of the Trust represented the
interest of Certificateholders as follows:
Original cost to Certificateholders $ 13,284,520
Less Initial Gross Underwriting Commission 597,740
--------------
12,686,780
Accumulated Cost of Securities Sold,
Matured or Called (8,223,234)
Net Unrealized Appreciation 522,251
Undistributed Net Investment Income 84,511
Undistributed Proceeds From Investments (57,396)
--------------
Total $ 5,012,912
===============
The original cost to Certificateholders, less the initial gross
underwriting commission, represents the aggregate initial public
offering price net of the applicable sales charge on 13,000 units of
fractional undivided interest of the Trust as of the date of deposit.
6. Concentration of Credit Risk
Since the Trust invests a portion of its assets in municipal bonds, it
may be affected by economic and political developments in the
municipalities. Certain debt obligations held by the Trust may be
entitled to the benefit of insurance, standby letters of credit or
other guarantees of banks or other financial institutions.
<PAGE>
New York Municipal Trust, Series 4
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. Financial Highlights (per unit)*
Selected data for a unit of the Trust outstanding for the year ended
December 31, 1996:
Net Asset Value, Beginning of Year ** $ 527.93
---------------
Interest Income 33.21
Expenses (1.30)
---------------
Net Investment Income 31.91
---------------
Net Gain or Loss on Investments(1) (4.97)
---------------
Total from Investment Operations 26.94
---------------
Less Distributions
to Certificateholders
Income 32.40
Principal 72.92
for Redemptions
Interest .49
---------------
Total Distributions 105.81
---------------
Net Asset Value, End of Year ** $ 449.06
===============
See "Financial and Statistical Information" in Part A of this
Prospectus for amounts of per unit distributions during the years ended
December 31, 1996, 1995 and 1994 based on actual units.
(1) Net gain or loss on investments is a result of changes in outstanding
units since January 1, 1996 and the dates of net gain and loss on
investments.
- --------------------------------
* Unless otherwise stated, based upon average units outstanding during
the year of 11,407 ([11,163 + 11,651]/2).
**Based upon actual units outstanding.
<PAGE>
Prospectus Part A Dated April 30, 1997
NEW YORK MUNICIPAL TRUST
SERIES 5
- ------------------------------------------------------------------------------
The Trust is a unit investment trust with an underlying
portfolio of long-term tax-exempt bonds and was formed to preserve capital and
to provide interest income (including, where applicable, earned original issue
discount) which, in the opinions of bond counsel to the respective issuers, is,
with certain exceptions, currently exempt from regular federal income tax and
New York State and New York City income taxes under existing law but may be
subject to state and local taxes in other jurisdictions. There can be no
assurance that the Trust's investment objectives will be achieved. Although the
Supreme Court has determined that Congress has the authority to subject interest
on bonds such as the Bonds in the Trust to regular federal income taxation,
existing law excludes such interest from regular federal income tax. Such
interest income may, however, be subject to federal corporate alternative
minimum tax and to state and local taxes in other jurisdictions. (See
"Description of Portfolio" in this Part A for a list of these Bonds which pay
interest income subject to the federal individual alternative minimum tax.) In
addition, capital gains are subject to tax. (See "Tax Status" and "The
Trust--Portfolios" in Part B of this Prospectus.) The Sponsor is Reich & Tang
Distributors L.P. The value of the Units of the Trust will fluctuate with the
value of the underlying bonds. Minimum purchase: 1 Unit.
This Prospectus consists of two parts. Part A contains the
Summary of Essential Information as of December 31, 1996 (the "Evaluation
Date"), a summary of certain specific information regarding the Trust and
audited financial statements of the Trust, including the related portfolio, as
of the Evaluation Date. Part B of this Prospectus contains a general summary of
the Trust. Part A of this Prospectus may not be distributed unless accompanied
by Part B. Investors should retain both parts of this Prospectus for future
reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
THE TRUST. The Trust seeks to achieve its investment
objectives through investment in a fixed, diversified portfolio of long-term
bonds (the "Bonds") issued by or on behalf of the State of New York and its
political subdivisions, municipalities and public authorities and by the
Commonwealth of Puerto Rico and its public authorities. All of the Bonds in the
Trust were rated "A" or better by Standard & Poor's Corporation or Moody's
Investors Service, Inc. at the time originally deposited in the Trust. For a
discussion of the significance of such ratings, see "Description of Bond
Ratings" in Part B of this Prospectus. For a list of ratings on the Evaluation
Date, see "Portfolio".
Some of the Bonds in the Trust have been issued with optional
refunding or refinancing provisions ("Refunded Bonds") whereby the issuer of the
Bond has the right to call such Bond prior to its stated maturity date (and
other than pursuant to sinking fund provisions) and to issue new bonds
111215.1
<PAGE>
("Refunding Bonds") in order to finance the redemption. Issuers typically
utilize refunding calls in order to take advantage of lower interest rates in
the marketplace. Some of these Refunded Bonds may be called for redemption
pursuant to pre-refunding provisions ("Pre-Refunded Bonds") whereby the proceeds
from the issue of the Refunding Bonds are typically invested in government
securities in escrow for the benefit of the holders of the Pre- Refunded Bonds
until the refunding call date. Usually, Pre-Refunded Bonds will bear a triple-A
rating because of this escrow. The issuers of Pre- Refunded Bonds must call such
Bonds on their refunding call date. Therefore, as of such date, the Trust will
receive the call price for such bonds but will cease receiving interest income
with respect to them. For a list of those Bonds which are Pre-Refunded Bonds as
of the Evaluation Date, if any, see "Notes to Financial Statements" in this Part
A. Some of the Bonds in the portfolio may have been purchased at an aggregate
premium over par. The payment of interest and preservation of capital are, of
course, dependent upon the continuing ability of the issuers of the Bonds to
meet their obligations.
Investment in the Trust should be made with an understanding
of the risks which an investment in long-term fixed rate debt obligations may
entail, including the risk that the value of the underlying portfolio will
decline with increases in interest rates. A Trust designated as a long-term
trust must have a dollar-weighted average portfolio maturity of more than ten
years.
Each Unit in the Trust represents a 1/11533rd undivided
interest in the principal and net income of the Trust. The principal amount of
Bonds deposited in the Trust per Unit is reflected in the Summary of Essential
Information. (See "The Trust--Organization" in Part B of this Prospectus.) The
Units being offered hereby are issued and outstanding Units which have been
purchased by the Sponsor in the secondary market.
PUBLIC OFFERING PRICE. The secondary market Public Offering
Price of each Unit is equal to the aggregate bid price of the Bonds in the Trust
divided by the number of Units outstanding, plus a sales charge of 4.58% of the
Public Offering Price, or 4.575% of the net amount invested in Bonds per Unit.
In addition, accrued interest to the expected date of settlement is added to the
Public Offering Price. If Units had been purchased on the Evaluation Date, the
Public Offering Price per Unit would have been $565.75 plus accrued interest of
$12.76 under the monthly distribution plan, $15.33 under the semi-annual
distribution plan and $15.25 under the annual distribution plan for a total of
$578.51, $581.08 and $581.00, respectively. The Public Offering Price per Unit
can vary on a daily basis in accordance with fluctuations in the aggregate bid
prices of the Bonds. (See "Public Offering--Offering Price" in Part B of this
Prospectus.)
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. Units
of each Trust are offered to investors on a "dollar price" basis (using the
computation method described under "Public Offering -- Offering Price" in Part
B) as distinguished from a "yield price" basis often used in offerings of tax
exempt bonds (involving the lesser of the yield as computed to maturity of bonds
or to an earlier redemption date). Since they are offered on a dollar price
basis, the rate of return on an investment in Units of each Trust is measured in
terms of "Estimated Current Return" and "Estimated Long Term Return".
Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted bond
practices, which practices take into account not only the interest payable on
the Bond but also the amortization of premiums or accretion of discounts, if
any; (2) calculating the average of the yields for the Bonds in the Trust's
portfolio by weighing each Bond's yield by the market value of the Bond and by
A-2
111215.1
<PAGE>
the amount of time remaining to the date to which the Bond is priced (thus
creating an average yield for the portfolio of the Trust); and (3) reducing the
average yield for the portfolio of the Trust in order to reflect estimated fees
and expenses of the Trust and the maximum sales charge paid by investors. The
resulting Estimated Long Term Return represents a measure of the return to
investors earned over the estimated life of the Trust. (For the Estimated Long
Term Return to Certificateholders under the monthly, semi-annual and annual
distribution plans, see "Summary of Essential Information".)
Estimated Current Return is a measure of the Trust's cash
flow. Estimated Current Return is computed by dividing the Estimated Net Annual
Interest Income per Unit by the Public Offering Price per Unit. In contrast to
the Estimated Long Term Return, the Estimated Current Return does not take into
account the amortization of premium or accretion of discount, if any, on the
Bonds in the portfolio of the Trust. Moreover, because interest rates on Bonds
purchased at a premium are generally higher than current interest rates on newly
issued bonds of a similar type with comparable rating, the Estimated Current
Return per Unit may be affected adversely if such Bonds are redeemed prior to
their maturity.
The Estimated Net Annual Interest Income per Unit of the Trust
will vary with changes in the fees and expenses of the Trustee and the Evaluator
applicable to the Trust and with the redemption, maturity, sale or other
disposition of the Bonds in the Trust. The Public Offering Price will vary with
changes in the bid prices of the Bonds. Therefore, there is no assurance that
the present Estimated Current Return or Estimated Long Term Return will be
realized in the future. (For the Estimated Current Return to Certificateholders
under the monthly, semi-annual and annual distribution plans, see "Summary of
Essential Information". See "Estimated Long Term Return and Estimated Current
Return" in Part B of this Prospectus.)
A schedule of cash flow projections is available from the
Sponsors upon request.
DISTRIBUTIONS. Distributions of interest income, less
expenses, will be made by the Trust either monthly, semi-annually or annually
depending upon the plan of distribution applicable to the Unit purchased. A
purchaser of a Unit in the secondary market will initially receive distributions
in accordance with the plan selected by the prior owner of such Unit and may
thereafter change the plan as provided under "Interest and Principal
Distributions" in Part B of this Prospectus. Distributions of principal, if any,
will be made semi-annually on June 15 and December 15 of each year. For
estimated monthly, semi-annual and annual interest distributions, see "Summary
of Essential Information".
MARKET FOR UNITS. The Sponsor, although not obligated to do
so, presently maintains and intends to continue to maintain a secondary market
for the Units at prices based upon the aggregate bid price of the Bonds in the
Trust portfolio. The reoffer price will be based on the aggregate bid price of
the Bonds plus a sales charge of 4.58% (4.575% of the net amount invested), plus
net accrued interest. If a market is not maintained a Certificateholder will be
able to redeem his or her Units with the Trustee at a price also based upon the
aggregate bid price of the Bonds. (See "Sponsor Repurchase" and "Offering Price"
in Part B of this Prospectus.)
TOTAL REINVESTMENT PLAN. Certificateholders under the
semi-annual and annual plans of distribution have the opportunity to have all
their regular interest distributions, and principal distributions, if any,
reinvested in available series of "New York Municipal Trust". (See "Total
Reinvestment Plan" in Part B of this Prospectus.) The Plan is not designed to be
a complete investment program.
A-3
111215.1
<PAGE>
NEW YORK MUNICIPAL TRUST
SERIES 5
SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1996
<TABLE>
<S> <C> <C>
Date of Deposit: June 22, 1979 Minimum Principal Distribution:
Principal Amount of Bonds.... $6,085,000 $1.00 per Unit.
Number of Units ............. 11,533 Weighted Average Life to
Fractional Undivided Inter- Maturity: 12.7 Years.
est in Trust per Unit .... 1/11533 Minimum Value of Trust:
Principal Amount of Trust may be terminated if
Bonds per Unit ........... $527.62 value of Trust is less than
Secondary Market Public $5,250,000 in principal amount
Offering Price** of Bonds.
Aggregate Bid Price Mandatory Termination Date:
of Bonds in Trust........ $6,239,381+++ The earlier of December 31,
Divided by 11,533 Units.. $541.00 2028 or the disposition of the
Plus Sales Charge of 4.58% last Bond in the Trust.
of Public Offering Price $24.75 Trustee***: The Bank of New
Public Offering Price York.
per Unit ................ $565.75+ Trustee's Annual Fee: Monthly
Redemption and Sponsor's plan $1.08 per $1,000; semi-
Repurchase Price annual plan $.60 per $1,000;
per Unit ................ $541.00+ and annual plan is $.40 per
+++ $1,000.
++++ Evaluator: Kenny S&P Evaluation
Excess of Secondary Market Services.
Public Offering Price Evaluator's Fee for Each
over Redemption and Evaluation: Minimum of $35
Sponsor's Repurchase plus $.25 per each issue of
Price per Unit ........... $24.75++++ Bonds in excess of 50 issues
Difference between Public (treating separate maturities
Offering Price per Unit as separate issues).
and Principal Amount per Sponsor: Reich & Tang
Unit Premium/(Discount) .. $25.96 Distributors L.P.
Evaluation Time: 4:00 p.m.
New York Time.
</TABLE>
PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED
<TABLE>
<CAPTION>
Monthly Semi-Annual Annual
Option Option Option
<S> <C> <C> <C>
Gross annual interest income# ......... $37.39 $37.39 $37.39
Less estimated annual fees and
expenses ............................ 1.33 .90 .78
Estimated net annual interest ______ ______ ______
income (cash)# ...................... $36.06 $36.49 $36.61
Estimated interest distribution# ...... 3.00 18.24 36.61
Estimated daily interest accrual# ..... .1001 .1013 .1016
Estimated current return#++ ........... 6.39% 6.47% 6.49%
Estimated long term return++ .......... 4.51% 4.59% 4.61%
Record dates .......................... 1st of Dec. 1 and Dec. 1
each month June 1
Interest distribution dates ........... 15th of Dec. 15 and Dec. 15
each month June 15
</TABLE>
A-4
111215.1
<PAGE>
Footnotes to Summary of Essential Information
* The Date of Deposit is the date on which the Trust Agreement was signed
and the deposit of the Bonds with the Trustee made.
** For information regarding offering price per unit and applicable sales
charge under the Total Reinvestment Plan, see Total Reinvestment Plan
in Part B of this Prospectus.
Certain amounts distributable as of December 31, 1996 are reported in
the summary of essential information as if they had been distributed at
year-end.
*** The Trustee maintains its corporate trust office at 101 Barclay Street,
New York, New York 10286 (tel. no.: 1-212-495-1784). For information
regarding redemption by the Trustee, see "Trustee Redemption" in Part B
of this Prospectus.
+ Plus accrued interest to expected date of settlement (approximately
three business days after purchase) of $12.76 monthly, $15.33
semi-annually and $15.25 annually.
++ The estimated current return and estimated long term returns are
increased for transactions entitled to a discount (see "Employee
Discounts" in Part B of this Prospectus), and are higher under the
semi-annual and annual options due to lower Trustee's fees and
expenses.
+++ Based solely upon the bid side evaluation of the underlying Bonds
(including, where applicable, undistributed cash in the principal
account). Upon tender for redemption, the price to be paid will be
calculated as described under "Trustee Redemption" in Part B of this
Prospectus.
++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.
# Does not include accrual from original issue discount bonds, if any.
FINANCIAL AND STATISTICAL INFORMATION
Selected data for each Unit outstanding for the periods listed below:
<TABLE>
<CAPTION>
Distribu-
tions of
Distributions of Interest Principal
During the Period (per Unit) During
Net Asset* Semi- the
Units Out- Value Monthly Annual Annual Period
Period Ended standing Per Unit Option Option Option (Per Unit)
- ------------ ---------- ---------- ------- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1994 12,089 $568.39 $38.43 $38.93 $39.05 $12.98
December 31, 1995 11,842 579.52 37.80 38.30 38.43 8.49
December 31, 1996 11,533 553.57 36.63 37.11 37.23 20.06
</TABLE>
- --------
* Net Asset Value per Unit is calculated by dividing net assets as
disclosed in the "Statement of Net Assets" by the number of Units
outstanding as of the date of the Statement of Net Assets. See Note 5
of Notes to Financial Statements for a description of the components of
Net Assets.
A-5
111215.1
<PAGE>
INFORMATION REGARDING THE TRUST
AS OF DECEMBER 31, 1996
DESCRIPTION OF PORTFOLIO*
Each Unit in the Trust consists of a 1/11533rd fractional
undivided interest in the principal and net income of the Trust in the ratio of
one Unit for each $527.62 principal amount of the Bonds currently held in the
Trust. The Sponsor has not participated as a sole underwriter or manager,
co-manager or member of an underwriting syndicate from which any of the initial
aggregate principal amount of the Bonds were acquired. The portfolio of the
Trust consists of 21 issues representing obligations of 7 issuers located in New
York State and 2 in Puerto Rico. Eight issues representing $2,715,000 of the
principal amount of the Bonds in the Trust are "moral obligation" bonds. All of
the Bonds in the Trust are subject to redemption prior to their stated maturity
dates pursuant to sinking fund or optional call provisions. The Bonds may also
be subject to other calls, which may be permitted or required by events which
cannot be predicted (such as destruction, condemnation, termination of a
contract, or receipt of excess or unanticipated revenues). Seven issues
representing $670,000 of the principal amount of the Bonds are general
obligation bonds. All 14 of the remaining issues representing $5,415,000 of the
principal amount of the Bonds are payable from the income of a specific project
or authority and are not supported by the issuer's power to levy taxes. The
portfolio is divided for purpose of issue as follows: Health Facilities 3,
Highway 1, Hospital and Nursing Projects 5, Housing 4 and Port Authority 1. For
an explanation of the significance of these factors see "The Trust--Portfolio"
and "Special Factors Concerning the Portfolio" in Part B of this Prospectus. See
"Tax Status" in Part B of this Prospectus.
None of the Bonds in the Trust are subject to the federal
individual alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.
- --------
* Changes in the Trust Portfolio: From January 1, 1997 to March 21, 1997,
$15,000 of the principal amount of the Bond in portfolio no. 16 and
$60,000 of the principal amount of the Bond in portfolio no. 19 have
been called and are no longer contained in the Trust.
A-6
111215.1
<PAGE>
Report of Independent Accountants
To the Sponsor, Trustee and Certificateholders of
New York Municipal Trust, Series 5
In our opinion, the accompanying statement of net assets, including the
portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of New York Municipal Trust, Series 5
(the "Trust") at December 31, 1996, the results of its operations, the changes
in its net assets and the financial highlights for the year then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at December
31, 1996 by correspondence with the Trustee, provides a reasonable basis for the
opinion expressed above. The financial statements for the prior periods
presented were audited by other independent accountants whose report dated March
31, 1996 expressed an unqualified opinion on those financial statements.
PRICE WATERHOUSE LLP
160 Federal Street
Boston, MA 02110
March 28, 1997
<PAGE>
New York Municipal Trust, Series 5
Portfolio
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount Title of Bonds (1) Maturity (2) Ref.-Refunding Value (3)
<S> <C> <C> <C> <C> <C> <C>
1 $ 50,000 State of New York, General Obligation A* 3.300% No Sinking Fund $ 47,200
4/01/2001 4/01/00 @ 100 Ref.
2 150,000 State of New York, General Obligation A* 3.700 No Sinking Fund 138,189
12/01/2003 12/01/99 @ 100 Ref.
3 125,000 State of New York, General Obligation A* 3.700 No Sinking Fund 113,303
12/01/2004 12/01/99 @ 100 Ref.
4 50,000 State of New York, General Obligation A* 5.000 No Sinking Fund 50,647
12/15/2005 None
5 220,000 State of New York, General Obligation A* 3.400 No Sinking Fund 190,318
4/01/2006 4/01/00 @ 100 Ref.
6 25,000 State of New York, General Obli gation A* 3.600 No Sinking Fund 21,093
2/01/2008 2/01/01 @ 100 Ref.
7 50,000 State of New York, General Obligation A* 5.200 No Sinking Fund 50,173
5/01/2008 5/01/97 @ 102 Ref.
8 100,000 New York State Housing Finance Agency, AAA 6.375 No Sinking Fund 110,127
Health Facilities Bonds, 1973 Series A 5/01/2003 None
8a 50,000 New York State Housing Finance Agency, AAA 6.375 No Sinking Fund 55,435
Health Facilities Bonds, 1972 Series A 5/01/2004 None
9 75,000 New York State Housing Finance Agency, AAA 5.600 No Sinking Fund 78,916
Health Facilities Bonds, 1973 Series A 5/01/2002 None
9a 30,000 New York State Housing Finance Agency, AAA 5.600 No Sinking Fund 31,804
Health Facilities Bonds, 1973 Series A 5/01/2003 None
9b 100,000 New York State Housing Finance Agency, AAA 5.600 No Sinking Fund 106,360
Health Facilities Bonds, 1973 Series A 11/01/2003 None
10 835,000 New York State Housing Finance Agency, AAA 7.600 Currently @ 100 S.F. 911,327
Health Facilities Bonds, 1979 Series A 11/01/2004 None
11 30,000 New York State Housing Finance Agency, A* 5.850 No Sinking Fund 30,732
Hospital and Nursing Home Project Bonds, 11/01/2002 5/01/97 @ 102 Ref.
1971 Series A
11a 50,000 New York State Housing Finance Agency, A* 5.850 No Sinking Fund 51,161
Hospital and Nursing Home Project Bonds, 11/01/2003 5/01/97 @ 102 Ref.
1971 Series A
11b 65,000 New York State Housing Finance Agency, A* 5.875 No Sinking Fund 66,359
Hospital and Nursing Home Project Bonds, 11/01/2011 5/01/97 @ 102 Ref.
1971 Series A
12 30,000 New York State Housing Finance Agency, A* 5.500 No Sinking Fund 30,907
Hospital and Nursing Home Project Bonds, 11/01/2006 1/31/97 @ 103 Ref.
1972 Series A
12a 40,000 New York State Housing Finance Agency, A* 5.500 No Sinking Fund 40,729
Hospital and Nursing Home Project Bonds, 11/01/2011 1/31/97 @ 103 Ref.
1972 Series A
13 20,000 New York State Housing Finance Agency, A* 5.900 No Sinking Fund 20,209
Hospital and Nursing Home Project Bonds, 11/01/2006 1/31/97 @ 101 Ref.
1974 Series A
</TABLE>
See accompanying footnotes to portfolio and notes to financial statements.
<PAGE>
New York Municipal Trust, Series 5
Portfolio
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount Title of Bonds (1) Maturity (2) Ref.-Refunding Value (3)
<S> <C> <C> <C> <C> <C> <C>
14 $ 210,000 New York State Housing Finance Agency, A* 6.875% 11/01/98 @ 100 S.F. $ 214,643
Hospital and Nursing Home Project Bonds, 11/01/2007 1/31/97 @ 102 Ref.
1977 Series A
15 1,005,000 New York State Medical Care Facilities A* 7.400 11/01/04 @ 100 S.F. 1,027,623
Finance Agency, Hospital and Nuring 11/01/2016 1/31/97 @ 102 Ref.
Home Project Bonds, 1979 Series A
16 405,000 New York City Housing Authority, A* 8.250 Currently @ 100 S.F. 415,125
Section 8 Federal Subsidy Mrtge. 1/01/2011 1/31/97 @ 101 Ref.
Revenue Bonds, 1978 Series A
17 75,000 The Port Authority of New York and AA- 5.500 Currently @ 103 S.F. 75,067
New Jersey Consolidated Bonds, 10/01/2008 4/01/97@ 100 Ref.
Forty-First Series
18 100,000 Riverhead Housing Development NR 8.250 Currently @ 100 S.F. 103,394
Corporation (New York), Section 8 8/01/2010 1/31/97 @ 104 Ref.
Assisted Mortgage Revenue Bonds
(Riverhead Village Apartment Project)
19 1,300,000 Tonawanda Senior Citizen Housing NR 7.875 Currently @ 100 S.F. 1,352,247
Corporation, Section 8 Assisted 2/01/2011 2/01/97 @ 104 Ref.
Mortgage Rev. Bonds (Westchester Park
Apartment Project)
20 55,000 Puerto Rico Highway Authority, A 5.250 Currently @ 100 S.F. 55,046
Highway Revenue Bonds, Series A 2/01/97 1/31/97 @ 100 Ref.
21 840,000 Puerto Rico Housing Finance Corporation, A 8.250 6/01/97 @ 100 S.F.
Multi-Fam. Mortgage Revenue Bonds, 6/01/2011 1/31/97 @ 101 Ref. 851,280
Series 1979A (Section 8 Assisted Albors
Housing Developments/National Housing
Partnership)
----------
-------------
$6,085,000 Total Investments (Cost $5,786,529) $ 6,239,414
========== ===========
</TABLE>
See accompanying footnotes to portfolio and notes to financial statements.
<PAGE>
New York Municipal Trust, Series 5
Footnotes to Portfolio
- --------------------------------------------------------------------------------
1. All ratings are by Kenny S&P Evaluation Services, a business unit of J.J.
Kenny Company, Inc., a subsidiary of The McGraw-Hill Companies, Inc.,
except for those identified by an asterisk (*) which are by Moody's
Investors Service, Inc. A brief description of the ratings symbols and
their meaning is set forth under "Description of Bond Ratings" in Part B
of the Prospectus.
2. See "The Trust - Portfolio" in Part B of the Prospectus for an
explanation of redemption features. See "Tax Status" in Part B of the
Prospectus for a statement of the Federal tax consequences to a
Certificateholder upon the sale, redemption or maturity of a bond.
3. At December 31, 1996, the net unrealized appreciation of all the bonds
was comprised of the following:
Gross unrealized appreciation $ 473,376
Gross unrealized depreciation (20,491)
-------------
Net unrealized appreciation $ 452,885
=============
4. The Bonds may also be subject to other calls, which may be permitted or
required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess or
unanticipated revenues).
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 5
Statement of Net Assets
December 31, 1996
- --------------------------------------------------------------------------------
Investments in Securities,
at Market Value (Cost $5,786,529) $ 6,239,414
--------------
Other Assets
Accrued Interest 106,241
Cash 38,626
--------------
Total Other Assets 144,867
--------------
Net Assets (11,533 Units of Fractional Undivided
Interest Outstanding, $553.57 per Unit) $ 6,384,281
==============
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 5
Statement of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31,
1996 1995 1994
Investment Income
<S> <C> <C> <C>
Interest $ 443,810 $ 467,724 $ 483,972
----------- ----------- ----------
Expenses
Trustee's Fees 11,604 10,278 11,143
Evaluator's Fees 3,286 3,013 3,315
----------- ----------- ----------
Total Expenses 14,890 13,291 14,458
----------- ----------- ----------
Net Investment Income 428,920 454,433 469,514
----------- ----------- ----------
Realized and Unrealized Gain (Loss)
Realized Gain
on Investments 20,427 6,897 9,919
Change in Unrealized Appreciation
(Depreciation) on Investments (87,680) 228,329 (336,795)
----------- ----------- ----------
Net Gain (Loss) on Investments (67,253) 235,226 (326,876)
----------- ----------- ----------
Net Increase in Net Assets
Resulting From Operations $ 361,667 $ 689,659 $ 142,638
=========== =========== ==========
</TABLE>
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 5
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31,
1996 1995 1994
Operations
<S> <C> <C> <C>
Net Investment Income $ 428,920 $ 454,433 $ 469,514
Realized Gain
on Investments 20,427 6,897 9,919
Change in Unrealized Appreciation
(Depreciation) on Investments (87,680) 228,329 (336,795)
------------ ------------- -------------
Net Increase in Net Assets
Resulting From Operations 361,667 689,659 142,638
------------ ------------- -------------
Distributions to Certificateholders
Investment Income 428,565 453,729 469,697
Principal 243,086 101,075 157,954
Redemptions
Interest 7,314 4,018 3,093
Principal 170,084 139,400 99,288
------------ ------------- -------------
Total Distributions
and Redemptions 849,049 698,222 730,032
------------ ------------- -------------
Total (Decrease) (478,382) (8,563) (587,394)
Net Assets
Beginning of Year 6,862,663 6,871,226 7,458,620
------------ ------------- -------------
End of Year (Including
Undistributed Net Investment
Income of $159,901, $166,860
and $170,174, Respectively) $ 6,384,281 $ 6,862,663 $ 6,871,226
============ ============ =============
</TABLE>
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 5
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Organization
New York Municipal Trust, Series 5 (the "Trust") was organized on June
22, 1979 by Bear, Stearns & Co. Inc. under the laws of the State of New
York by a Trust Indenture and Agreement, and is registered under the
Investment Company Act of 1940. The Trust was formed to preserve
capital and to provide interest income.
Effective September 28, 1995, Reich & Tang Distributors L.P. ("Reich &
Tang") has become the successor sponsor (the "Sponsor") to certain of
the unit investment trusts previously sponsored by Bear, Stearns & Co.
Inc. As successor Sponsor, Reich & Tang has assumed all of the
obligations and rights of Bear, Stearns & Co. Inc., the previous
sponsor.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies
consistently followed by the Trust in preparation of its financial
statements. The policies are in conformity with generally accepted
accounting principles ("GAAP"). The preparation of financial statements
in accordance with GAAP requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual amounts could differ from those estimates.
Interest income is recorded on the accrual basis.
Security Valuation
Investments are carried at market value which is determined by Kenny
S&P Evaluation Services, a business unit of J.J. Kenny Company, Inc., a
subsidiary of The McGraw-Hill Companies, Inc. The market value of the
portfolio is based upon the bid prices for the bonds at the end of the
year, which approximates the fair value of the security at that date,
except that the market value on the date of deposit represents the cost
to the Trust based on the offering prices for investments at that date.
The difference between cost and market value is reflected as unrealized
appreciation (depreciation) of investments. Securities transactions are
recorded on the trade date. Realized gains (losses) from securities
transactions are determined on the basis of average cost of the
securities sold or redeemed.
3. Income Taxes
No provision for federal income taxes has been made in the accompanying
financial statements because the Trust intends to continue to qualify
for the tax treatment applicable to Grantor Trusts under the Internal
Revenue Code. Under existing law, if the Trust so qualifies, it will
not be subject to federal income tax on net income and capital gains
that are distributed to unitholders.
<PAGE>
New York Municipal Trust, Series 5
Notes to Financial Statements
- --------------------------------------------------------------------------------
4. Trust Administration
The Trustee has custody of assets and responsibility for the accounting
records and financial statements of the Trust and is responsible for
establishing and maintaining a system of internal control related
thereto. The Trustee is also responsible for all estimates of expenses
and accruals reflected in the Trust's financial statements.
The Trust Indenture and Agreement provides for interest distributions
as often as monthly (depending upon the distribution plan elected by
the Certificateholders).
The Trust Indenture and Agreement further requires that principal
received from the disposition of bonds, other than those bonds sold in
connection with the redemption of units, be distributed to
Certificateholders.
The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. For the years ended December 31, 1996, 1995 and 1994,
309, 247 and 173 units were redeemed, respectively.
The Trust pays an annual fee for trustee services rendered by the
Trustee that ranges from $.40 to $1.08 per $1,000 of outstanding
investment principal. In addition, a minimum fee of $35.00 is paid to a
service bureau for each portfolio valuation. For the year ended
December 31, 1996, the "Trustee's Fees" are comprised of Trustee fees
of $9,929 and other expenses of $1,675. The other expenses include
professional, printing and miscellaneous fees.
<PAGE>
New York Municipal Trust, Series 5
Notes to Financial Statements
- --------------------------------------------------------------------------------
5. Net Assets
At December 31, 1996, the net assets of the Trust represented the
interest of Certificateholders as follows:
Original cost to Certificateholders $ 13,324,802
Less Initial Gross Underwriting Commission 599,560
--------------
12,725,242
Accumulated Cost of Securities Sold,
Matured or Called (6,938,713)
Net Unrealized Appreciation 452,885
Undistributed Net Investment Income 159,901
Undistributed Proceeds From Investments (15,034)
--------------
Total $ 6,384,281
===============
The original cost to Certificateholders, less the initial gross
underwriting commission, represents the aggregate initial public
offering price net of the applicable sales charge on 13,000 units of
fractional undivided interest of the Trust as of the date of deposit.
6. Concentration of Credit Risk
Since the Trust invests a portion of its assets in municipal bonds, it
may be affected by economic and political developments in the
municipalities. Certain debt obligations held by the Trust may be
entitled to the benefit of insurance, standby letters of credit or
other guarantees of banks or other financial institutions.
<PAGE>
New York Municipal Trust, Series 5
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. Financial Highlights (per unit)*
Selected data for a unit of the Trust outstanding for the year ended
December 31, 1996:
Net Asset Value, Beginning of Year ** $ 579.52
---------------
Interest Income 37.97
Expenses (1.27)
---------------
Net Investment Income 36.70
---------------
Net Gain or Loss on Investments(1) (4.55)
---------------
Total from Investment Operations 32.15
---------------
Less Distributions
to Certificateholders
Income 36.67
Principal 20.80
for Redemptions
Interest .63
---------------
Total Distributions 58.10
---------------
Net Asset Value, End of Year ** $ 553.57
===============
See "Financial and Statistical Information" in Part A of this
Prospectus for amounts of per unit distributions during the years ended
December 31, 1996, 1995 and 1994 based on actual units.
(1) Net gain or loss on investments is a result of changes in outstanding
units since January 1, 1996 and the dates of net gain and loss on
investments.
- -------------------
* Unless otherwise stated, based upon average units outstanding during
the year of 11,688 ([11,533 + 11,842]/2).
**Based upon actual units outstanding.
<PAGE>
Prospectus Part A Dated April 30, 1997
NEW YORK MUNICIPAL TRUST
SERIES 6
- ------------------------------------------------------------------------------
The Trust is a unit investment trust with an underlying
portfolio of long-term tax-exempt bonds and was formed to preserve capital and
to provide interest income (including, where applicable, earned original issue
discount) which, in the opinions of bond counsel to the respective issuers, is,
with certain exceptions, currently exempt from regular federal income tax and
New York State and New York City income taxes under existing law but may be
subject to state and local taxes in other jurisdictions. There can be no
assurance that the Trust's investment objectives will be achieved. Although the
Supreme Court has determined that Congress has the authority to subject interest
on bonds such as the Bonds in the Trust to regular federal income taxation,
existing law excludes such interest from regular federal income tax. Such
interest income may, however, be subject to federal corporate alternative
minimum tax and to state and local taxes in other jurisdictions. (See
"Description of Portfolio" in this Part A for a list of these Bonds which pay
interest income subject to the federal individual alternative minimum tax.) In
addition, capital gains are subject to tax. (See "Tax Status" and "The
Trust--Portfolios" in Part B of this Prospectus.) The Sponsor is Reich & Tang
Distributors L.P. The value of the Units of the Trust will fluctuate with the
value of the underlying bonds. Minimum purchase: 1 Unit.
This Prospectus consists of two parts. Part A contains the
Summary of Essential Information as of December 31, 1996 (the "Evaluation
Date"), a summary of certain specific information regarding the Trust and
audited financial statements of the Trust, including the related portfolio, as
of the Evaluation Date. Part B of this Prospectus contains a general summary of
the Trust. Part A of this Prospectus may not be distributed unless accompanied
by Part B. Investors should retain both parts of this Prospectus for future
reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
THE TRUST. The Trust seeks to achieve its investment
objectives through investment in a fixed, diversified portfolio of long-term
bonds (the "Bonds") issued by or on behalf of the State of New York and its
political subdivisions, municipalities and public authorities and by the
Commonwealth of Puerto Rico and its public authorities. All of the Bonds in the
Trust were rated "A" or better by Standard & Poor's Corporation or Moody's
Investors Service, Inc. at the time originally deposited in the Trust. For a
discussion of the significance of such ratings, see "Description of Bond
Ratings" in Part B of this Prospectus. For a list of ratings on the Evaluation
Date, see "Portfolio".
Some of the Bonds in the Trust have been issued with optional
refunding or refinancing provisions ("Refunded Bonds") whereby the issuer of the
Bond has the right to call such Bond prior to its stated maturity date (and
other than pursuant to sinking fund provisions) and to issue new bonds
111218.1
<PAGE>
("Refunding Bonds") in order to finance the redemption. Issuers typically
utilize refunding calls in order to take advantage of lower interest rates in
the marketplace. Some of these Refunded Bonds may be called for redemption
pursuant to pre-refunding provisions ("Pre-Refunded Bonds") whereby the proceeds
from the issue of the Refunding Bonds are typically invested in government
securities in escrow for the benefit of the holders of the Pre- Refunded Bonds
until the refunding call date. Usually, Pre-Refunded Bonds will bear a triple-A
rating because of this escrow. The issuers of Pre- Refunded Bonds must call such
Bonds on their refunding call date. Therefore, as of such date, the Trust will
receive the call price for such bonds but will cease receiving interest income
with respect to them. For a list of those Bonds which are Pre-Refunded Bonds as
of the Evaluation Date, if any, see "Notes to Financial Statements" in this Part
A. Some of the Bonds in the portfolio may have been purchased at an aggregate
premium over par. The payment of interest and preservation of capital are, of
course, dependent upon the continuing ability of the issuers of the Bonds to
meet their obligations.
Investment in the Trust should be made with an understanding
of the risks which an investment in long-term fixed rate debt obligations may
entail, including the risk that the value of the underlying portfolio will
decline with increases in interest rates. A Trust designated as a long-term
trust must have a dollar-weighted average portfolio maturity of more than ten
years.
Each Unit in the Trust represents a 1/11732nd undivided
interest in the principal and net income of the Trust. The principal amount of
Bonds deposited in the Trust per Unit is reflected in the Summary of Essential
Information. (See "The Trust--Organization" in Part B of this Prospectus.) The
Units being offered hereby are issued and outstanding Units which have been
purchased by the Sponsor in the secondary market.
PUBLIC OFFERING PRICE. The secondary market Public Offering
Price of each Unit is equal to the aggregate bid price of the Bonds in the Trust
divided by the number of Units outstanding, plus a sales charge of 4.5% of the
Public Offering Price, or 4.729% of the net amount invested in Bonds per Unit.
In addition, accrued interest to the expected date of settlement is added to the
Public Offering Price. If Units had been purchased on the Evaluation Date, the
Public Offering Price per Unit would have been $689.34 plus accrued interest of
$12.25 under the monthly distribution plan, $15.39 under the semi-annual
distribution plan and $15.47 under the annual distribution plan for a total of
$701.59, $704.73 and $704.81, respectively. The Public Offering Price per Unit
can vary on a daily basis in accordance with fluctuations in the aggregate bid
prices of the Bonds. (See "Public Offering--Offering Price" in Part B of this
Prospectus.)
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. Units
of each Trust are offered to investors on a "dollar price" basis (using the
computation method described under "Public Offering -- Offering Price" in Part
B) as distinguished from a "yield price" basis often used in offerings of tax
exempt bonds (involving the lesser of the yield as computed to maturity of bonds
or to an earlier redemption date). Since they are offered on a dollar price
basis, the rate of return on an investment in Units of each Trust is measured in
terms of "Estimated Current Return" and "Estimated Long Term Return".
Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted bond
practices, which practices take into account not only the interest payable on
the Bond but also the amortization of premiums or accretion of discounts, if
any; (2) calculating the average of the yields for the Bonds in the Trust's
portfolio by weighing each Bond's yield by the market value of the Bond and by
A-2
111218.1
<PAGE>
the amount of time remaining to the date to which the Bond is priced (thus
creating an average yield for the portfolio of the Trust); and (3) reducing the
average yield for the portfolio of the Trust in order to reflect estimated fees
and expenses of the Trust and the maximum sales charge paid by investors. The
resulting Estimated Long Term Return represents a measure of the return to
investors earned over the estimated life of the Trust. (For the Estimated Long
Term Return to Certificateholders under the monthly, semi-annual and annual
distribution plans, see "Summary of Essential Information".)
Estimated Current Return is a measure of the Trust's cash
flow. Estimated Current Return is computed by dividing the Estimated Net Annual
Interest Income per Unit by the Public Offering Price per Unit. In contrast to
the Estimated Long Term Return, the Estimated Current Return does not take into
account the amortization of premium or accretion of discount, if any, on the
Bonds in the portfolio of the Trust. Moreover, because interest rates on Bonds
purchased at a premium are generally higher than current interest rates on newly
issued bonds of a similar type with comparable rating, the Estimated Current
Return per Unit may be affected adversely if such Bonds are redeemed prior to
their maturity.
The Estimated Net Annual Interest Income per Unit of the Trust
will vary with changes in the fees and expenses of the Trustee and the Evaluator
applicable to the Trust and with the redemption, maturity, sale or other
disposition of the Bonds in the Trust. The Public Offering Price will vary with
changes in the bid prices of the Bonds. Therefore, there is no assurance that
the present Estimated Current Return or Estimated Long Term Return will be
realized in the future. (For the Estimated Current Return to Certificateholders
under the monthly, semi-annual and annual distribution plans, see "Summary of
Essential Information". See "Estimated Long Term Return and Estimated Current
Return" in Part B of this Prospectus.)
A schedule of cash flow projections is available from the
Sponsors upon request.
DISTRIBUTIONS. Distributions of interest income, less
expenses, will be made by the Trust either monthly, semi-annually or annually
depending upon the plan of distribution applicable to the Unit purchased. A
purchaser of a Unit in the secondary market will initially receive distributions
in accordance with the plan selected by the prior owner of such Unit and may
thereafter change the plan as provided under "Interest and Principal
Distributions" in Part B of this Prospectus. Distributions of principal, if any,
will be made semi-annually on June 15 and December 15 of each year. For
estimated monthly, semi-annual and annual interest distributions, see "Summary
of Essential Information".
MARKET FOR UNITS. The Sponsor, although not obligated to do
so, presently maintains and intends to continue to maintain a secondary market
for the Units at prices based upon the aggregate bid price of the Bonds in the
Trust portfolio. The reoffer price will be based on the aggregate bid price of
the Bonds plus a sales charge of 4.5% (4.729% of the net amount invested), plus
net accrued interest. If a market is not maintained a Certificateholder will be
able to redeem his or her Units with the Trustee at a price also based upon the
aggregate bid price of the Bonds. (See "Sponsor Repurchase" and "Offering Price"
in Part B of this Prospectus.)
TOTAL REINVESTMENT PLAN. Certificateholders under the
semi-annual and annual plans of distribution have the opportunity to have all
their regular interest distributions, and principal distributions, if any,
reinvested in available series of "New York Municipal Trust". (See "Total
Reinvestment Plan" in Part B of this Prospectus.) The Plan is not designed to be
a complete investment program.
A-3
111218.1
<PAGE>
NEW YORK MUNICIPAL TRUST
SERIES 6
SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1996
<TABLE>
<S> <C> <C>
Date of Deposit: July 24, 1979 Minimum Principal Distribution:
Principal Amount of Bonds ... $7,775,000 $1.00 per Unit.
Number of Units ............. 11,732 Weighted Average Life to
Fractional Undivided Inter- Maturity: 13.8 Years.
est in Trust per Unit ..... 1/11732 Minimum Value of Trust:
Principal Amount of Trust may be terminated if
Bonds per Unit ............ $662.72 value of Trust is less than
Secondary Market Public $5,200,000 in principal amount
Offering Price** of Bonds.
Aggregate Bid Price Mandatory Termination Date:
of Bonds in Trust ....... $7,722,101+++ The earlier of December 31,
Divided by 11,732 Units ... $658.21 2028 or the disposition of the
Plus Sales Charge of 4.5% last Bond in the Trust.
of Public Offering Price. $31.13 Trustee***: The Bank of New
Public Offering Price York.
per Unit ................ $689.34+ Trustee's Annual Fee: Monthly
Redemption and Sponsor's plan $1.08 per $1,000; semi-
Repurchase Price annual plan $.60 per $1,000;
per Unit .................. $658.21+ and annual plan is $.40 per
+++ $1,000.
++++ Evaluator: Kenny S&P Evaluation
Excess of Secondary Market Services.
Public Offering Price Evaluator's Fee for Each
over Redemption and Evaluation: Minimum of $35
Sponsor's Repurchase plus $.25 per each issue of
Price per Unit ............ $31.13++++ Bonds in excess of 50 issues
Difference between Public (treating separate maturities
Offering Price per Unit as separate issues).
and Principal Amount per Sponsor: Reich & Tang
Unit Premium/(Discount) ... $26.62 Distributors L.P.
Evaluation Time: 4:00 p.m.
New York Time.
</TABLE>
PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED
<TABLE>
<CAPTION>
Monthly Semi-Annual Annual
Option Option Option
<S> <C> <C> <C>
Gross annual interest income# ......... $45.22 $45.22 $45.22
Less estimated annual fees and
expenses ............................ 1.46 .98 .84
Estimated net annual interest ______ ______ ______
income (cash)# ...................... $43.76 $44.24 $44.38
Estimated interest distribution# ...... 3.64 22.12 44.38
Estimated daily interest accrual# ..... .1215 .1228 .1232
Estimated current return#++ ........... 6.35% 6.42% 6.44%
Estimated long term return++ .......... 4.73% 4.80% 4.82%
Record dates .......................... 1st of Dec. 1 and Dec. 1
each month June 1
Interest distribution dates ........... 15th of Dec. 15 and Dec. 15
each month June 15
</TABLE>
A-4
111218.1
<PAGE>
Footnotes to Summary of Essential Information
* The Date of Deposit is the date on which the Trust Agreement was signed
and the deposit of the Bonds with the Trustee made.
** For information regarding offering price per unit and applicable sales
charge under the Total Reinvestment Plan, see Total Reinvestment Plan
in Part B of this Prospectus.
*** The Trustee maintains its corporate trust office at 101 Barclay Street,
New York, New York 10286 (tel. no.: 1-212-495-1784). For information
regarding redemption by the Trustee, see "Trustee Redemption" in Part B
of this Prospectus.
+ Plus accrued interest to expected date of settlement (approximately
three business days after purchase) of $12.25 monthly, $15.39
semi-annually and $15.47 annually.
++ The estimated current return and estimated long term returns are
increased for transactions entitled to a discount (see "Employee
Discounts" in Part B of this Prospectus), and are higher under the
semi-annual and annual options due to lower Trustee's fees and
expenses.
+++ Based solely upon the bid side evaluation of the underlying Bonds
(including, where applicable, undistributed cash in the principal
account). Upon tender for redemption, the price to be paid will be
calculated as described under "Trustee Redemption" in Part B of this
Prospectus.
++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.
# Does not include accrual from original issue discount bonds, if any.
FINANCIAL AND STATISTICAL INFORMATION
Selected data for each Unit outstanding for the periods listed below:
<TABLE>
<CAPTION>
Distribu-
tions of
Distributions of Interest Principal
During the Period (per Unit) During
Net Asset* Semi- the
Units Out- Value Monthly Annual Annual Period
Period Ended standing Per Unit Option Option Option (Per Unit)
- ------------ ---------- ---------- ------- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1994 12,142 $679.21 $46.46 $47.01 $47.15 $20.72
December 31, 1995 11,973 703.47 45.73 46.26 46.40 4.61
December 31, 1996 11,732 671.63 44.54 45.06 45.20 24.89
</TABLE>
- --------
* Net Asset Value per Unit is calculated by dividing net assets as
disclosed in the "Statement of Net Assets" by the number of Units
outstanding as of the date of the Statement of Net Assets. See Note 5
of Notes to Financial Statements for a description of the components of
Net Assets.
A-5
111218.1
<PAGE>
INFORMATION REGARDING THE TRUST
AS OF DECEMBER 31, 1996
DESCRIPTION OF PORTFOLIO*
Each Unit in the Trust consists of a 1/11732nd fractional
undivided interest in the principal and net income of the Trust in the ratio of
one Unit for each $662.72 principal amount of the Bonds currently held in the
Trust. The Sponsor has not participated as a sole underwriter or manager,
co-manager or member of an underwriting syndicate from which any of the initial
aggregate principal amount of the Bonds were acquired. The portfolio of the
Trust consists of 18 issues representing obligations of 9 issuers located in New
York State and 3 in Puerto Rico. Six issues representing $3,260,000 of the
principal amount of the Bonds in the Trust are "moral obligation" bonds. All of
the Bonds in the Trust are subject to redemption prior to their stated maturity
dates pursuant to sinking fund or optional call provisions. The Bonds may also
be subject to other calls, which may be permitted or required by events which
cannot be predicted (such as destruction, condemnation, termination of a
contract, or receipt of excess or unanticipated revenues). Four issues
representing $1,200,000 of the principal amount of the Bonds are general
obligation bonds. All 14 of the remaining issues representing $6,575,000 of the
principal amount of the Bonds are payable from the income of a specific project
or authority and are not supported by the issuer's power to levy taxes. The
portfolio is divided for purpose of issue as follows: Health Facilities 2,
Highway 1, Hospital and Nursing Projects 4, Housing 3, Port Authority 1 and
Power 3. For an explanation of the significance of these factors see "The
Trust--Portfolio" and "Special Factors Concerning the Portfolio" in Part B of
this Prospectus. See "Tax Status" in Part B of this Prospectus.
None of the Bonds in the Trust are subject to the federal
individual alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.
- --------
* Changes in the Trust Portfolio: From January 1, 1997 to March 21, 1997,
$45,000 of the principal amount of the Bond in portfolio no. 13 has
been called and is no longer contained in the Trust.
A-6
111218.1
<PAGE>
Report of Independent Accountants
To the Sponsor, Trustee and Certificateholders of
New York Municipal Trust, Series 6
In our opinion, the accompanying statement of net assets, including the
portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of New York Municipal Trust, Series 6
(the "Trust") at December 31, 1996, the results of its operations, the changes
in its net assets and the financial highlights for the year then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at December
31, 1996 by correspondence with the Trustee, provides a reasonable basis for the
opinion expressed above. The financial statements for the prior periods
presented were audited by other independent accountants whose report dated March
31, 1996 expressed an unqualified opinion on those financial statements.
PRICE WATERHOUSE LLP
160 Federal Street
Boston, MA 02110
March 28, 1997
<PAGE>
New York Municipal Trust, Series 6
Portfolio
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount Title of Bonds (1) Maturity (2) Ref.-Refunding Value (3)
<S> <C> <C> <C> <C> <C>
1 $ 200,000 State of New York, General Obligation A* 3.750% No Sinking Fund $ 160,984
12/01/2011 6/01/97 @ 101 Ref.
2 300,000 State of New York, General Obligation A* 3.750 No Sinking Fund 237,969
12/01/2012 6/01/97 @ 101 Ref.
3 200,000 State of New York, General Obligation A* 3.750 No Sinking Fund 154,308
12/01/2014 6/01/97@ 101 Ref.
4 500,000 State of New York, General Obligation A* 3.750 No Sinking Fund 377,415
12/01/2016 6/01/97 @ 101 Ref.
5 25,000 New York State Housing Finance Agency, AAA 5.600 No Sinking Fund 26,400
Health Facilities Bonds, 1973 Series A 11/01/2002 None
5a 50,000 New York State Housing Finance Agency, AAA 5.600 No Sinking Fund 53,007
Health Facilities Bonds, 1973 Series A 5/01/2003 None
5b 100,000 New York State Housing Finance Agency, AAA 5.600 No Sinking Fund 106,576
Health Facilities Bonds, 1973 Series A 11/01/2004 None
6 1,065,000 New York State Housing Finance Agency, AAA 7.600 Currently @ 100 S.F. 1,162,352
Health Facilities Bonds, 1979 Series A 11/01/2004 None
7 45,000 New York State Housing Finance Agency, A* 6.875 No Sinking Fund 45,986
Hospital and Nursing Home Project Bonds, 11/01/2010 1/31/97 @ 102 Ref.
1970 Series A
7a 130,000 New York State Housing Finance Agency, A* 6.875 No Sinking Fund 132,675
Hospital and Nursing Home Project Bonds, 11/01/2011 1/31/97 @ 102 Ref.
1970 Series A
7b 20,000 New York State Housing Finance Agency, A* 6.875 No Sinking Fund 20,447
Hospital and Nursing Home Project Bonds, 11/01/2012 1/31/97 @ 102 Ref.
1970 Series A
8 80,000 New York State Housing Finance Agency, A* 5.900 No Sinking Fund 80,825
Hospital and Nursing Home Project Bonds, 11/01/2003 1/31/97 @ 101 Ref.
1974 Series A
9 560,000 New York State Housing Finance Agency, A* 6.875 11/01/98 @ 100 S.F. 572,382
Hospital and Nursing Home Project Bonds, 11/01/2007 1/31/97 @ 101 Ref.
1977 Series A
9a 50,000 New York State Housing Finance Agency, A* 7.000 11/01/08 @ 100 S.F. 51,500
Hospital and Nursing Home Project Bonds, 11/01/2017 1/31/97 @ 102 Ref.
1977 Series A
10 1,135,000 New York State Medical Care Facilities A* 7.400 11/01/04 @ 100 S.F. 1,160,549
Finance Agency, Hospital and Nursing 11/01/2016 1/31/97 @ 102 S.F.
Home Project Bonds, 1979 Series A
11 320,000 New York City Housing Authority, A* 8.250 Currently @ 100 S.F. 328,000
Section 8 Federal Subsidy Mortgage 1/01/2011 1/31/97 @ 101 Ref.
Revenue Bonds, 1978 Series A
12 185,000 The Port Authority of New York and AA- 4.000 Currently @ 100 S.F. 183,035
New Jersey Consolidated Bonds, 3/01/2002 3/01/97 @ 100 Ref.
Thirty-First Series
</TABLE>
See accompanying footnotes to portfolio and notes to financial statements.
<PAGE>
New York Municipal Trust, Series 6
Portfolio
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount Title of Bonds (1) Maturity (2) Ref.-Refunding Value (3)
<S> <C> <C> <C> <C> <C>
13 $1,310,000 Tonawanda Senior Citizen Housing NR 7.875% Currently @ 100 S.F. $ 1,362,649
Corporation, Section 8 Assisted 2/01/2011 2/01/97 @ 104 Ref.
Mortgage Revenue Bonds (Westchester
Park Apartment Project)
14 25,000 Puerto Rico Highway Authority, A 5.250 Currently @ 100 S.F. 25,022
Highway Revenue Bonds, Series A 7/01/1998 1/31/97 @ 100 Ref.
15 1,175,000 Puerto Rico Housing Finance A 8.250 Currently @ 100 S.F. 1,190,780
Corporation, Multi-Family Mortgage 6/01/2011 1/31/97 @ 101 Ref.
Revenue Bonds, Series 1979A (Section 8
Assisted Albors Housing Developments
National Housing Partnership)
16 85,000 Puerto Rico Water Resources Authority, A 3.700 Currently @ 100 S.F. 84,754
Electric Revenue Bonds, Series 1964 1/01/1999 7/1/98 @ 100 Ref.
17 100,000 Puerto Rico Water Resources Authority, A 5.500 Currently @ 100 S.F. 105,100
Electric Revenue Bonds 7/01/2003 1/1/03 @ 100 Ref.
18 115,000 Puerto Rico Water Resources Authority, BBB+ 6.000 Currently @ 100 S.F. 115,708
Power Revenue Bonds, Series A 7/01/2014 1/31/97 @ 101 Ref.
----------
--------------
$7,775,000 Total Investments (Cost $7,260,612) $ 7,738,423
========== =============
</TABLE>
See accompanying footnotes to portfolio and notes to financial statements.
<PAGE>
New York Municipal Trust, Series 6
Footnotes to Portfolio
- --------------------------------------------------------------------------------
1. All ratings are by Kenny S&P Evaluation Services, a business unit of J.J.
Kenny Company, Inc., a subsidiary of The McGraw-Hill Companies, Inc.,
except for those identified by an asterisk (*) which are by Moody's
Investors Service, Inc. A brief description of the ratings symbols and
their meaning is set forth under "Description of Bond Ratings" in Part B
of the Prospectus.
2. See "The Trust - Portfolio" in Part B of the Prospectus for an
explanation of redemption features. See "Tax Status" in Part B of the
Prospectus for a statement of the Federal tax consequences to a
Certificateholder upon the sale, redemption or maturity of a bond.
3. At December 31, 1996, the net unrealized appreciation of all the bonds
was comprised of the following:
Gross unrealized appreciation $ 516,467
Gross unrealized depreciation (38,656)
-------------
Net unrealized appreciation $ 477,811
=============
4. The Bonds may also be subject to other calls, which may be permitted or
required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess or
unanticipated revenues).
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 6
Statement of Net Assets
December 31, 1996
- --------------------------------------------------------------------------------
Investments in Securities,
at Market Value (Cost $7,260,612) $ 7,738,423
--------------
Other Assets
Accrued Interest 118,051
Cash 23,133
--------------
Total Other Assets 141,184
--------------
Net Assets (11,732 Units of Fractional Undivided
Interest Outstanding, $671.63 per Unit) $ 7,879,607
==============
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 6
Statement of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31,
1996 1995 1994
Investment Income
<S> <C> <C> <C>
Interest $ 543,960 $ 568,610 $ 583,541
----------- ---------- ----------
Expenses
Trustee's Fees 13,563 12,141 12,985
Evaluator's Fees 3,286 3,011 3,312
----------- ---------- ----------
Total Expenses 16,849 15,152 16,297
----------- ---------- ----------
Net Investment Income 527,111 553,458 567,244
----------- ---------- ----------
Realized and Unrealized Gain (Loss)
Realized Gain (Loss)
on Investments 6,136 (427) 4,271
Change in Unrealized Appreciation
(Depreciation) on Investments (86,443) 349,347 (471,872)
----------- ---------- ----------
Net Gain (Loss) on Investments (80,307) 348,920 (467,601)
----------- ---------- ----------
Net Increase in Net Assets
Resulting From Operations $ 446,804 $ 902,378 $ 99,643
=========== =========== ===========
</TABLE>
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 6
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31,
1996 1995 1994
Operations
<S> <C> <C> <C>
Net Investment Income $ 527,111 $ 553,458 $ 567,244
Realized Gain (Loss)
on Investments 6,136 (427) 4,271
Change in Unrealized Appreciation
(Depreciation) on Investments (86,443) 349,347 (471,872)
------------ ------------- -------------
Net Increase in Net Assets
Resulting From Operations 446,804 902,378 99,643
------------ ------------- -------------
Distributions to Certificateholders
Investment Income 527,905 552,783 567,626
Principal 294,191 55,196 252,349
Redemptions
Interest 5,778 2,859 2,610
Principal 162,018 115,809 77,509
------------ ------------- -------------
Total Distributions
and Redemptions 989,892 726,647 900,094
------------ ------------- -------------
Total Increase (Decrease) (543,088) 175,731 (800,451)
Net Assets
Beginning of Year 8,422,695 8,246,964 9,047,415
------------ ------------- -------------
End of Year (Including
Undistributed Net Investment
Income of $157,505, $164,077
and $166,261, Respectively) $ 7,879,607 $ 8,422,695 $ 8,246,964
============ ============ ============
</TABLE>
The accompanying notes form an integral part of the financial statements.
<PAGE>
New York Municipal Trust, Series 6
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Organization
New York Municipal Trust, Series 6 (the "Trust") was organized on July
24, 1979 by Bear, Stearns & Co. Inc. under the laws of the State of New
York by a Trust Indenture and Agreement, and is registered under the
Investment Company Act of 1940. The Trust was formed to preserve
capital and to provide interest income.
Effective September 28, 1995, Reich & Tang Distributors L.P. ("Reich &
Tang") has become the successor sponsor (the "Sponsor") to certain of
the unit investment trusts previously sponsored by Bear, Stearns & Co.
Inc. As successor Sponsor, Reich & Tang has assumed all of the
obligations and rights of Bear, Stearns & Co. Inc., the previous
sponsor.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies
consistently followed by the Trust in preparation of its financial
statements. The policies are in conformity with generally accepted
accounting principles ("GAAP"). The preparation of financial statements
in accordance with GAAP requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual amounts could differ from those estimates.
Interest income is recorded on the accrual basis.
Security Valuation
Investments are carried at market value which is determined by Kenny
S&P Evaluation Services, a business unit of J.J. Kenny Company, Inc., a
subsidiary of The McGraw-Hill Companies, Inc. The market value of the
portfolio is based upon the bid prices for the bonds at the end of the
year, which approximates the fair value of the security at that date,
except that the market value on the date of deposit represents the cost
to the Trust based on the offering prices for investments at that date.
The difference between cost and market value is reflected as unrealized
appreciation (depreciation) of investments. Securities transactions are
recorded on the trade date. Realized gains (losses) from securities
transactions are determined on the basis of average cost of the
securities sold or redeemed.
3. Income Taxes
No provision for federal income taxes has been made in the accompanying
financial statements because the Trust intends to continue to qualify
for the tax treatment applicable to Grantor Trusts under the Internal
Revenue Code. Under existing law, if the Trust so qualifies, it will
not be subject to federal income tax on net income and capital gains
that are distributed to unitholders.
<PAGE>
New York Municipal Trust, Series 6
Notes to Financial Statements
- --------------------------------------------------------------------------------
4. Trust Administration
The Trustee has custody of assets and responsibility for the accounting
records and financial statements of the Trust and is responsible for
establishing and maintaining a system of internal control related
thereto. The Trustee is also responsible for all estimates of expenses
and accruals reflected in the Trust's financial statements.
The Trust Indenture and Agreement provides for interest distributions
as often as monthly (depending upon the distribution plan elected by
the Certificateholders).
The Trust Indenture and Agreement further requires that principal
received from the disposition of bonds, other than those bonds sold in
connection with the redemption of units, be distributed to
Certificateholders.
The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. For the years ended December 31, 1996, 1995 and 1994,
241, 169 and 111 units were redeemed, respectively.
The Trust pays an annual fee for trustee services rendered by the
Trustee that ranges from $.40 to $1.08 per $1,000 of outstanding
investment principal. In addition, a minimum fee of $35.00 is paid to a
service bureau for each portfolio valuation. For the year ended
December 31, 1996, the "Trustee's Fees" are comprised of Trustee fees
of $11,888 and other expenses of $1,675. The other expenses include
professional, printing and miscellaneous fees.
<PAGE>
New York Municipal Trust, Series 6
Notes to Financial Statements
- --------------------------------------------------------------------------------
5. Net Assets
At December 31, 1996, the net assets of the Trust represented the
interest of Certificateholders as follows:
Original cost to Certificateholders $ 13,354,711
Less Initial Gross Underwriting Commission 600,990
--------------
12,753,721
Accumulated Cost of Securities Sold,
Matured or Called (5,493,109)
Net Unrealized Appreciation 477,811
Undistributed Net Investment Income 157,505
Undistributed Proceeds From Investments (16,321)
--------------
Total $ 7,879,607
===============
The original cost to Certificateholders, less the initial gross
underwriting commission, represents the aggregate initial public
offering price net of the applicable sales charge on 13,000 units of
fractional undivided interest of the Trust as of the date of deposit.
6. Concentration of Credit Risk
Since the Trust invests a portion of its assets in municipal bonds, it
may be affected by economic and political developments in the
municipalities. Certain debt obligations held by the Trust may be
entitled to the benefit of insurance, standby letters of credit or
other guarantees of banks or other financial institutions.
<PAGE>
New York Municipal Trust, Series 6
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. Financial Highlights (per unit)*
Selected data for a unit of the Trust outstanding for the year ended
December 31, 1996:
Net Asset Value, Beginning of Year ** $ 703.47
---------------
Interest Income 45.89
Expenses (1.42)
---------------
Net Investment Income 44.47
---------------
Net Gain or Loss on Investments(1) (6.46)
---------------
Total from Investment Operations 38.01
---------------
Less Distributions
to Certificateholders
Income 44.54
Principal 24.82
for Redemptions
Interest .49
---------------
Total Distributions 69.85
---------------
Net Asset Value, End of Year ** $ 671.63
===============
See "Financial and Statistical Information" in Part A of this
Prospectus for amounts of per unit distributions during the years ended
December 31, 1996, 1995 and 1994 based on actual units.
(1) Net gain or loss on investments is a result of changes in outstanding
units since January 1, 1996 and the dates of net gain and loss on
investments.
- -----------------
* Unless otherwise stated, based upon average units outstanding during
the year of 11,853 ([11,732 + 11,973]/2).
**Based upon actual units outstanding.
Note: Part B of This Prospectus May Not be Distributed
Unless Accompanied by Part A.
Please Read And Retain Both Parts of This
-----------------------------------------
Prospectus For Future Reference.
--------------------------------
NEW YORK MUNICIPAL TRUST
Prospectus Part B
Dated: April 30, 1997
THE TRUST
---------
ORGANIZATION. "New York Municipal Trust" is a unit investment
trust created under the laws of the State of New York pursuant to a Trust
Indenture and Agreement* (the "Trust Agreement"), dated the Date of Deposit,
among Reich & Tang Distributors L.P. as Sponsor, The Bank of New York as
Trustee, and Kenny S&P Evaluation Services, a business unit of J.J. Kenny
Company, Inc., a subsidiary of The McGraw-Hill Companies, as Evaluator.
On the Date of Deposit the Sponsor deposited with the Trustee
long-term bonds, and/or delivery statements relating to contracts for the
purchase of certain such bonds (the "Bonds") and cash or an irrevocable letter
of credit issued by a major commercial bank in the amount required for such
purchases. Thereafter, the Trustee, in exchange for the Bonds so deposited,
delivered to the Sponsor the Certificates evidencing the ownership of all Units
of the Trusts.
The Trust consists of the interest-bearing bonds described
under "The Trust" in Part A of this Prospectus, the interest (including, where
applicable, earned original issue discount) on which is, in the opinions of bond
counsel to the respective issuers given at the time of original delivery of the
Bonds, exempt from regular federal income tax under existing law and from New
York State and New York City income taxes under existing law.
Each "Unit" outstanding on the Evaluation Date represented an
undivided interest or pro rata share in the principal and interest of the Trust
in the ratio of one Unit to the principal amount of Bonds initially deposited in
the Trust as set forth in Part A of this Prospectus. To the extent that any
Units are redeemed by the Trustee, the fractional undivided interest or pro rata
share in the Trusts represented by each unredeemed Unit will increase, although
the actual interest in the Trusts represented by such fraction will remain
unchanged. Units will remain outstanding until redeemed upon tender to the
Trustee by Certificateholders, which may include the Sponsor, or until the
termination of the Trust Agreements.
OBJECTIVES. The Trust offers investors the opportunity to
participate in a portfolio of long-term tax-exempt bonds with a greater
diversification than they might be able to acquire themselves. The objectives
of the Trust are to preserve capital and to provide interest income
(including, where applicable, earned original issue discount) which is, in the
opinions of bond counsel to the respective issuers given at the time of
original delivery of the Bonds, exempt from regular federal income tax and
from New York State and New York City income taxes under existing law. Such
- --------
* References in this Prospectus to the Trust Agreement are qualified in
their entirety by the Trust Indenture and Agreement which is
incorporated herein by reference.
1653.3
<PAGE>
interest income may, however, be subject to the federal corporate alternative
minimum tax and to state and local taxes in other jurisdictions. Investors
should be aware that there is no assurance the Trusts' objectives will be
achieved as these objectives are dependent on the continuing ability of the
issuers of the Bonds to meet their interest and principal payment requirements,
on the continuing satisfaction of the Bonds of the conditions required for the
exemption of interest thereon from regular federal income tax and on the market
value of the Bonds, which can be affected by fluctuations in interest rates and
other factors.
Since disposition of Units prior to final liquidation of the
Trust may result in an investor receiving less than the amount paid for such
Units (see "Comparison of Public Offering Price, Sponsor's Repurchase Price and
Redemption Price"), the purchase of a Unit should be looked upon as a long-term
investment. Neither the Trusts nor the Total Reinvestment Plan is designed to be
a complete investment program.
PORTFOLIOS
----------
All of the Bonds in the Trust were rated "A" or better by
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies
("Standard & Poor's") or Moody's Investors Service, Inc. ("Moody's") at the time
originally deposited in the Trust. For a list of the ratings of each Bond on the
Evaluation Date, see "Portfolio" in Part A of this Prospectus.
For information regarding (i) the number of issues in the
Trust, (ii) the range of fixed maturities of the Bonds, (iii) the number of
issues payable from the income of a specific project or authority and (iv) the
number of issues constituting general obligations of a government entity, see
"Description of Portfolio" in Part A.
When selecting Bonds for the Trust, the following factors,
among others, were considered by the Sponsor on the Date of Deposit: (a) the
quality of the Bonds and whether such Bonds were rated "A" or better by either
Standard & Poor's or Moody's, (b) the yield and price of the Bonds relative to
other New York and Puerto Rico debt securities of comparable quality and
maturity, (c) income to the Certificateholders of the Trusts and (d) the
diversification of the Trust portfolio, as to purpose of issue and location of
issuer, taking into account the availability in the market of issues which meet
such Trust's quality, rating, yield and price criteria. Subsequent to the
Evaluation Date, a Bond may cease to be rated or its rating may be reduced below
that specified above. Neither event requires an elimination of such Bond from
the Trust but may be considered in the Sponsor's determination to direct the
Trustee to dispose of the Bond. See "Portfolio Supervision." For an
interpretation of the bond ratings see "Description of Bond Ratings."
Housing Bonds: Some of the aggregate principal amount of the
-------------
Bonds may consist of obligations of state and local housing authorities whose
revenues are primarily derived from mortgage loans to rental housing projects
for low to moderate income families. Since such obligations are usually not
general obligations of a particular state or municipality and are generally
payable primarily or solely from rents and other fees, adverse economic
developments including failure or inability to increase rentals, fluctuations of
interest rates and increasing construction and operating costs may reduce
revenues available to pay existing obligations. See "Description of Portfolio"
in Part A for the amount of rental housing bonds contained therein.
Hospital Revenue Bonds: Some of the aggregate principal amount
----------------------
of the Bonds may consist of hospital revenue bonds. Ratings of hospital bonds
are often initially based on feasibility studies which contain projections of
-2-
1653.3
<PAGE>
occupancy levels, revenues and expenses. Actual experience may vary considerably
from such projections. A hospital's gross receipts and net income will be
affected by future events and conditions including, among other things, demand
for hospital services and the ability of the hospital to provide them,
physicians' confidence in hospital management capability, economic developments
in the service area, competition, actions by insurers and governmental agencies
and the increased cost and possible unavailability of malpractice insurance.
Additionally, a major portion of hospital revenue typically is derived from
third-party payors and government programs such as Medicare and Medicaid. Both
private third-party payors and government programs have undertaken cost
containment measures designed to limit payments. Furthermore, government
programs are subject to statutory and regulatory changes, retroactive rate
adjustments, administrative rulings and government funding restrictions, all of
which may materially decrease the rate of program payments for health care
facilities. There can be no assurance that payments under governmental programs
will remain at levels comparable to present levels or will, in the future, be
sufficient to cover the costs allocable to patients participating in such
programs. In addition, there can be no assurance that a particular hospital or
other health care facility will continue to meet the requirements for
participation in such programs.
The health care delivery system is undergoing considerable
alteration and consolidation. Consistent with that trend, the ownership or
management of a hospital or health care facility may change, which could result
in (i) an early redemption of bonds, (ii) alteration of the facilities financed
by the Bonds or which secure the Bonds, (iii) a change in the tax exempt status
of the Bonds or (iv) an inability to produce revenues sufficient to make timely
payment of debt service on the Bonds. Future legislation or changes in the areas
noted above, among other things, would affect all hospitals to varying degrees
and, accordingly, any adverse change in these areas may affect the ability of
such issuers to make payment of principal and interest on such bonds. See
"Description of Portfolio" in Part A for the amount of hospital revenue bonds
contained therein.
Nuclear Power Facility Bonds: Certain Bonds may have been
----------------------------
issued in connection with the financing of nuclear generating facilities. In
view of recent developments in connection with such facilities, legislative and
administrative actions have been taken and proposed relating to the development
and operation of nuclear generating facilities. The Sponsor is unable to predict
whether any such actions or whether any such proposals or litigation, if enacted
or instituted, will have an adverse impact on the revenues available to pay the
debt service on the Bonds in the portfolio issued to finance such nuclear
projects. See "Description of Portfolio" in Part A for the amount of bonds
issued to finance nuclear generating facilities contained therein.
Mortgage Subsidy Bonds: Certain Bonds may be "mortgage subsidy
----------------------
bonds" which are obligations of which all or a significant portion of the
proceeds are to be used directly or indirectly for mortgages on owner-occupied
residences. Section 103A of the Internal Revenue Code of 1954, as amended,
provided as a general rule that interest on "mortgage subsidy bonds" will not be
exempt from Federal income tax. An exception is provided for certain "qualified
mortgage bonds." Qualified mortgage bonds are bonds that are used to finance
owner-occupied residences and that meet numerous statutory requirements. These
requirements include certain residency, ownership, purchase price and target
area requirements, ceiling amounts for state and local issuers, arbitrage
restrictions and (for bonds issued after December 31, 1984) certain information
reporting, certification, public hearing and policy statement requirements. In
the opinions of bond counsel to the issuing governmental authorities, interest
on all the Bonds in a Trust that might be deemed "mortgage subsidy bonds" will
be exempt from Federal income tax when
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issued. See "Description of Portfolio" in Part A for the amount of mortgage
subsidy Bonds contained therein.
Mortgage Revenue Bonds: Certain Bonds may be "mortgage revenue
----------------------
bonds." Under the Internal Revenue Code of 1986, as amended (the "Code") (and
under similar provisions of the prior tax law) "mortgage revenue bonds" are
obligations the proceeds of which are used to finance owner-occupied residences
under programs which meet numerous statutory requirements relating to residency,
ownership, purchase price and target area requirements, ceiling amounts for
state and local issuers, arbitrage restrictions, and certain information
reporting certification, and public hearing requirements. There can be no
assurance that additional federal legislation will not be introduced or that
existing legislation will not be further amended, revised, or enacted after
delivery of these Bonds or that certain required future actions will be taken by
the issuing governmental authorities, which action or failure to act could cause
interest on the Bonds to be subject to federal income tax. If any portion of the
Bonds proceeds are not committed for the purpose of the issue, Bonds in such
amount could be subject to earlier mandatory redemption at par, including issues
of Zero Coupon Bonds (see "Discount and Zero Coupon Bonds"). See "Description of
Portfolio" in Part A for the amount of mortgage revenue bonds contained therein.
Private Activity Bonds: The portfolio of the Trust may contain
----------------------
other Bonds which are "private activity bonds" (often called Industrial Revenue
Bonds ("IRBs") if issued prior to 1987) which would be primarily of two types:
(1) Bonds for a publicly owned facility which a private entity may have a right
to use or manage to some degree, such as an airport, seaport facility or water
system and (2) facilities deemed owned or beneficially owned by a private entity
but which were financed with tax-exempt bonds of a public issuer, such as a
manufacturing facility or a pollution control facility. In the case of the first
type, bonds are generally payable from a designated source of revenues derived
from the facility and may further receive the benefit of the legal or moral
obligation of one or more political subdivisions or taxing jurisdictions. In
most cases of project financing of the first type, receipts or revenues of the
Issuer are derived from the project or the operator or from the unexpended
proceeds of the bonds. Such revenues include user fees, service charges, rental
and lease payments, and mortgage and other loan payments.
The second type of issue will generally finance projects which
are owned by or for the benefit of, and are operated by, corporate entities.
Ordinarily, such private activity bonds are not general obligations of
governmental entities and are not backed by the taxing power of such entities,
and are solely dependent upon the creditworthiness of the corporate user of the
project or corporate guarantor.
The private activity bonds in the Trust have generally been
issued under bond resolutions, agreements or trust indentures pursuant to which
the revenues and receipts payable under the issuer's arrangements with the users
or the corporate operator of a particular project have been assigned and pledged
to the holders of the private activity bonds. In certain cases a mortgage on the
underlying project has been assigned to the holders of the private activity
bonds or a trustee as additional security. In addition, private activity bonds
are frequently directly guaranteed by the corporate operator of the project or
by another affiliated company. See "Description of Portfolio" in Part A for the
amount of private activity bonds contained therein.
Litigation: Litigation challenging the validity under state
----------
constitutions of present systems of financing public education has been
initiated in a number of states. Decisions in some states have been reached
holding such school financing in violation of state constitutions. In
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addition, legislation to effect changes in public school financing has been
introduced in a number of states. The Sponsor is unable to predict the outcome
of the pending litigation and legislation in this area and what effect, if any,
resulting changes in the sources of funds, including proceeds from property
taxes applied to the support of public schools, may have on the school bonds in
the Trusts. See "Description of Portfolio" for the amount of school bonds
contained therein.
As of the date of this Prospectus, the Sponsor has not been
notified or made aware of any litigation pending with respect to any Bonds which
might reasonably be expected to have a material adverse effect on the Trust.
Such litigation, as, for example, suits challenging the issuance of pollution
control revenue bonds under recently enacted environmental protection statutes,
may affect the validity of such Bonds or the tax-free nature of the interest
thereon. At any time after the date of this Prospectus, litigation may be
instituted on a variety of grounds with respect to the Bonds in the Trust. The
Sponsor is unable to predict whether any such litigation may be instituted or,
if instituted, whether it might have a material adverse effect on the Trust.
Other Factors: The Bonds in the Trust, despite their optional
-------------
redemption provisions which generally do not take effect until 10 years after
the original issuance dates of such bonds (often referred to as "ten year call
protection"), do contain provisions which require the issuer to redeem such
obligations at par from unused proceeds of the issue within a stated period. In
recent periods of declining interest rates there have been increased redemptions
of bonds, particularly housing bonds, pursuant to such redemption provisions. In
addition, the Bonds in the Trusts are also subject to mandatory redemption in
whole or in part at par at any time that voluntary or involuntary prepayments of
principal on the underlying collateral are made to the trustee for such bonds or
that the collateral is sold by the bond issuer. Prepayments of principal tend to
be greater in periods of declining interest rates; it is possible that such
prepayments could be sufficient to cause a bond to be redeemed substantially
prior to its stated maturity date, earliest call date or sinking fund redemption
date.
The Bonds may also be subject to other calls, which may be
permitted or required by events which cannot be predicted (such as destruction,
condemnation, or termination of a contract).
In 1976 the federal bankruptcy laws were amended so that an
authorized municipal debtor could more easily seek federal court protection to
assist in reorganizing its debts so long as certain requirements were met.
Historically, very few financially troubled municipalities have sought court
assistance for reorganizing their debts; notwithstanding, the Sponsors are
unable to predict to what extent financially troubled municipalities may seek
court assistance in reorganizing their debts in the future and, therefore, what
effect, if any, the applicable federal bankruptcy law provisions will have on
the Trusts.
The Trust may also include "moral obligation" bonds issued by
agencies and authorities of New York State. Under statutes applicable to such
Bonds, the State may be called on to restore any deficits in capital reserve
funds of such agencies or authorities created with respect to the Bonds. Any
such restoration requires appropriation by the State Legislature for such
purpose, and accordingly the statutes do not constitute a legally enforceable
obligation or debt of the State. The agencies or authorities in question have no
taxing power. Neither the State nor any State agency having the benefit of a
"moral obligation" provision is in default in the payment of principal or
interest on any bond.
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Certain of the Bonds in the Trust are subject to redemption
prior to their stated maturity dates pursuant to sinking fund or call
provisions. A sinking fund is a reserve fund appropriated specifically toward
the retirement of a debt. A callable bond is one which is subject to redemption
or refunding prior to maturity at the option of the issuer. A refunding is a
method by which a bond is redeemed at or before maturity from the proceeds of a
new issue of bonds. In general, call provisions are more likely to be exercised
when the offering side evaluation of a bond is at a premium over par than when
it is at a discount from par. A listing of the sinking fund and call provisions,
if any, with respect to each of the Bonds is contained under "Portfolio" in Part
A of this Prospectus. Certificateholders will realize a gain or loss on the
early redemption of such Bonds, depending upon whether the price of such Bonds
is at a discount from or at a premium over par at the time the
Certificateholders purchase their Units.
Neither the Sponsor nor the Trustee shall be liable in any way
for any default, failure or defect in any of the Bonds. Because certain of the
Bonds from time to time may be redeemed or will mature in accordance with their
terms or may be sold under certain circumstances, no assurance can be given that
the Trust will retain its present size and composition for any length of time.
The proceeds from the sale of a Bond or the exercise of any redemption or call
provision will be distributed to Certificateholders on the next distribution
date except to the extent such proceeds are applied to meet redemptions of
Units. See "Trustee Redemption."
Puerto Rico Bonds: Certain of the Bonds in the Trust may be
-----------------
general obligations and/or revenue bonds of issuers located in Puerto Rico which
will be affected by general economic conditions in Puerto Rico. The economy of
Puerto Rico is closely integrated with that of the mainland United States.
During fiscal year 1995, approximately 89% of Puerto Rico's exports were to the
United States mainland, which was also the source of 65% of Puerto Rico's
imports. In fiscal 1995, Puerto Rico experienced a $4.6 billion positive
adjusted trade balance. The economy of Puerto Rico is dominated by the
manufacturing and service sectors. The manufacturing sector has experienced a
basic change over the years as a result of increased emphasis on higher wage,
high technology industries such as pharmaceuticals, electronics, computers,
microprocessors, professional and scientific instruments, and certain high
technology machinery and equipment. The service sector, including finance,
insurance and real estate, wholesale and retail trade, and hotel and related
services, also plays a major role in the economy. It ranks second only to
manufacturing in contribution to the gross domestic product and leads all
sectors in providing employment. In recent years, the service sector has
experienced significant growth in response to and paralleling the expansion of
the manufacturing sector. Since fiscal 1985, personal income, both aggregate and
per capita, has increased consistently in each fiscal year. In fiscal 1995,
aggregate personal income was $27.0 billion ($22.5 billion in 1987 prices) and
personal income per capita was $7,296 ($6,074 in 1987 prices). Personal income
includes transfer payments to individuals in Puerto Rico under various social
programs. Total federal payments to Puerto Rico, which include many types in
addition to federal transfer payments, are lower on a per capita basis in Puerto
Rico than in any state. Transfer payments to individuals in fiscal 1995 were
$5.9 billion, of which $4.0 billion, or 67.6%, represent entitlement to
individuals who had previously performed services or made contributions under
programs such as Social Security, Veterans Benefits and Medicare. The number of
persons employed in Puerto Rico during fiscal 1996 averaged 1,092,300, an
increase of 3.9% over fiscal 1995. The unemployment rate in Puerto Rico for
fiscal 1996 remained the same. The Puerto Rico Planning Board's most recent
gross product forecast for fiscal 1997, made in February 1996, showed an
increase of 2.7%. The Planning Board's Economic Activity Index, a composite
index for thirteen economic indicators, increased 1.6% for fiscal 1996 compared
to fiscal 1995, and 2.0% for fiscal 1995, compared to fiscal 1994. During the
first three months of fiscal 1997
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the Index decreased 0.9% compared to the same period in fiscal 1996, which
period showed an increase of 1.7% over the same period of fiscal 1995. Growth in
the Puerto Rico economy in fiscal 1997 depends on several factors, including the
state of the United States economy and the relative stability in the price of
oil imports, the exchange value of the U.S. dollar, the level of federal
transfers and the cost of borrowing.
Discount and Zero Coupon Bonds: Some of the Bonds in the Trust
------------------------------
may be original issue discount bonds. The original issue discount, which is the
difference between the initial purchase price of the Bonds and the face value,
is deemed to accrue on a daily basis and the accrued portion will be treated as
tax-exempt interest income for regular federal income tax purposes. Upon sale or
redemption, any gain realized that is in excess of the earned portion of
original issue discount will be taxable as capital gain. (See "Tax Status.") The
current value of an original issue discount bond reflects the present value of
its face amount at maturity. The market value tends to increase more slowly in
early years and in greater increments as the Bonds approach maturity. Of these
original issue discount bonds, a portion of the aggregate principal amount of
the Bonds in each Trust is Zero Coupon Bonds. See "Description of Portfolio" in
Part A. Zero Coupon Bonds do not provide for the payment of any current interest
and provide for payment at maturity at par value unless sooner sold or redeemed.
The market value of Zero Coupon Bonds is subject to greater fluctuation than
coupon bonds in response to changes in interest rates. Zero Coupon Bonds
generally are subject to redemption at compound accreted value based on par
value at maturity. Because the issuer is not obligated to make current interest
payments, Zero Coupon Bonds may be less likely to be redeemed than coupon bonds
issued at a similar interest rate.
Some of the Bonds in the Trust may have been purchased at deep
"market" discount from par value at maturity. This is because the coupon
interest rates on the discount bonds at the time they were purchased and
deposited in the Trust were lower than the current market interest rates for
newly issued bonds of comparable rating and type. At the time of issuance the
discount Bonds were for the most part issued at then current coupon interest
rates. The current yields (coupon interest income as a percentage of market
price) of discount bonds will be lower than the current yields of comparably
rated bonds of similar type newly issued at current interest rates because
discount bonds tend to increase in market value as they approach maturity and
the full principal amount becomes payable. A discount bond held to maturity will
have a larger portion of its total return in the form of capital gain and less
in the form of tax-exempt interest income than a comparable bond newly issued at
current market rates. Gain on the disposition of a Bond purchased at a market
discount generally will be treated as ordinary income, rather than capital gain,
to the extent of accrued market discount. Discount bonds with a longer term to
maturity tend to have a higher current yield and a lower current market value
than otherwise comparable bonds with a shorter term to maturity. If interest
rates rise, the value of discount bonds will decrease; and if interest rates
decline, the value of discount bonds will increase. The discount does not
necessarily indicate a lack of market confidence in the issuer.
SPECIAL FACTORS AFFECTING NEW YORK
----------------------------------
The information set forth below is derived from the official
statements and/or preliminary drafts of official statements prepared in
connection with the issuance of New York State and New York City municipal
bonds. The Sponsors have not independently verified this information.
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<PAGE>
NEW YORK TRUST
--------------
SPECIAL FACTORS AFFECTING NEW YORK. The information set forth
below is derived from the official statements and/or preliminary drafts of
official statements prepared in connection with the issuance of New York State
and New York City municipal bonds. The Sponsors have not independently verified
this information.
Economic Trends. Over the long term, the State of New York
(the "State") and the City of New York (the "City") face serious potential
economic problems. The City accounts for approximately 41% of the State's
population and personal income, and the City's financial health affects the
State in numerous ways. The State historically has been one of the wealthiest
states in the nation. For decades, however, the State has grown more slowly than
the nation as a whole, gradually eroding its relative economic affluence.
Statewide, urban centers have experienced significant changes involving
migration of the more affluent to the suburbs and an influx of generally less
affluent residents. Regionally, the older Northeast cities have suffered because
of the relative success that the South and the West have had in attracting
people and business. The City has also had to face greater competition as other
major cities have developed financial and business capabilities which make them
less dependent on the specialized services traditionally available almost
exclusively in the City.
The State has for many years had a very high State and local
tax burden relative to other states. The State and its localities have used
these taxes to develop and maintain their transportation networks, public
schools and colleges, public health systems, other social services and
recreational facilities. Despite these benefits, the burden of State and local
taxation, in combination with the many other causes of regional economic
dislocation, has contributed to the decisions of some businesses and individuals
to relocate outside, or not locate within, the State.
Notwithstanding the numerous initiatives that the State and
its localities may take to encourage economic growth and achieve balanced
budgets, reductions in Federal spending could materially and adversely affect
the financial condition and budget projections of the State and its localities.
New York City. The City, with a population of approximately
7.3 million, is an international center of business and culture. Its
non-manufacturing economy is broadly based, with the banking and securities,
life insurance, communications, publishing, fashion design, retailing and
construction industries accounting for a significant portion of the City's total
employment earnings. Additionally, the City is the nation's leading tourist
destination. The City's manufacturing activity is conducted primarily in apparel
and printing.
The national economic downturn which began in July 1990
adversely affected the local economy, which had been declining since late 1989.
As a result, the City experienced job losses in 1990 and 1991 and real Gross
City Product ("GCP") fell in those two years. Beginning in calendar year 1992,
the improvement in the national economy helped stabilize conditions in the City.
Employment losses moderated toward year-end and real GCP increased, boosted by
strong wage gains. After noticeable improvements in the City's economy during
calendar year 1994, economic growth slowed in calendar year 1995, and the City's
current four-year financial plan assumes that moderate economic growth will
continue through calendar year 2000.
For each of the 1981 through 1996 fiscal years, the City
achieved balanced operating results as reported in accordance with generally
accepted accounting principles ("GAAP"). The City was required to close
substantial
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budget gaps in recent years in order to maintain balanced operating results. For
fiscal year 1995, the City adopted a budget which halted the trend in recent
years of substantial increases in City-funded spending from one year to the
next. There can be no assurance that the City will continue to maintain a
balanced budget as required by State law without additional tax or other revenue
increases or reductions in City services, which could adversely affect the
City's economic base.
Pursuant to the New York State Financial Emergency Act for the
City of New York, the City prepares an annual four-year financial plan, which is
reviewed and revised on a quarterly basis and which includes the City's capital,
revenue and expense projections and outlines proposed gap-closing programs for
years with projected budget gaps. The City's current four-year financial plan
projects substantial budget gaps for each of the 1998 through 2000 fiscal years.
The City is required to submit its financial plans to review bodies, including
the New York State Financial Control Board ("Control Board").
The City depends on the State for State aid both to enable the
City to balance its budget and to meet its cash requirements. There can be no
assurance that there will not be reductions in State aid to the City from
amounts currently projected or that State budgets in future fiscal years will be
adopted by the April 1 statutory deadline and that such reductions or delays
will not have adverse effects on the City's cash flow or expenditures. In
addition, the Federal Budget negotiation process could result in a reduction in
or a delay in the receipt of Federal grants in the City's 1997 fiscal year which
could have additional adverse effects on the City's cash flow or revenues.
The Mayor is responsible for preparing the City's four-year
financial plan, including the City's current financial plan for the 1997 through
2000 fiscal years (the "1997-2000 Financial Plan" or "Financial Plan"). The
City's projections set forth in the Financial Plan are based on various
assumptions and contingencies which are uncertain and which may not materialize.
Changes in major assumptions could significantly affect the City's ability to
balance its budget as required by State law and to meet its annual cash flow and
financing requirements. Such assumptions and contingencies include the condition
of the regional and local economies, the impact on real estate tax revenues of
the real estate market, wage increases for City employees consistent with those
assumed in the Financial Plan, employment growth, the results of a pending
actuarial audit of the City's pension system which is expected to significantly
increase the City's annual pension costs, the ability to implement proposed
reductions in City personnel and other cost reduction initiatives, which may
require in certain cases the cooperation of the City's municipal unions, the
ability of the New York City Health and Hospitals Corporation ("HHC") and BOE to
take actions to offset reduced revenues, the ability to complete revenue
generating transactions and provision of State and Federal aid and mandate
relief and the impact on City revenues of proposals for Federal and State
welfare reform and any future legislation affecting Medicare or other
entitlements.
Implementation of the Financial Plan is also dependent upon
the City's ability to market its securities successfully. The City's financing
program for fiscal years 1997 through 2000 contemplates the issuance of $9.0
billion of general obligation bonds and $3.8 billion of bonds to be issued by
the proposed New York City Infrastructure Finance Authority ("Finance
Authority") to finance education and transportation projects. The creation of
Finance Authority, which is subject to the enactment of State legislation, is
being proposed as part of the City's effort to assist in keeping the City's
indebtedness within the forecast level of the constitutional restrictions on the
amount of debt the City is authorized to incur. Indebtedness subject to the
constitutional debt limit includes liability on capital contracts that are
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expected to be funded with general obligation bonds, as well as general
obligation bonds. The City's projections of total debt subject to the general
debt limit that would be required to be issued to fund the updated ten-year
capital strategy published in April 1995 indicates that projected contracts for
capital projects and debt issuance may exceed the general debt limit by the end
of fiscal year 1997 and would exceed the general debt limit by a substantial
amount thereafter, unless legislation is enacted creating the Finance Authority
or other legislative initiatives are identified and implemented. Depending on a
number of factors, including whether the Legislature is expected to enact
legislation creating the Finance Authority or to take other action that would
provide relief under the general debt limit, the City may find it necessary to
curtail its currently defined capital program before the end of fiscal year 1997
to ensure that there is ongoing capacity to enter into capital contracts
necessary to preserve projects designed to safeguard health and safety in the
City. Without the Finance Authority or other legislative relief, the City's
general obligation financed capital program with respect to new projects would
be virtually brought to a halt during the Financial Plan period. General
obligation borrowing would continue to reimburse the City's general fund for
ongoing costs of existing contractual commitments. In addition, the City issues
revenue and tax anticipation notes to finance its seasonal working capital
requirements. The success of projected public sales of City bonds and notes and
finance Authority bonds will be subject to prevailing market conditions, and no
assurance can be given that such sales will be completed. If the City were
unable to sell its general obligation bonds and notes or bonds of the proposed
Finance Authority, it would be prevented from meeting its obligation bonds and
notes or bonds of the proposed Finance Authority, it would be prevented from
meeting its planned capital and operating expenditures. Future developments
concerning the City and public discussion of such developments, as well as
prevailing market conditions, may affect the market for outstanding City general
obligation bonds and notes.
On November 14, 1996, the City submitted to the Control Board
the Financial Plan for the 1997 through 2000 fiscal years, which relates to the
City, the BOE and the City University of New York ("CUNY"). The Financial Plan
is a modification to the financial plan submitted to the Control Board on June
21, 1996 (the "June Financial Plan").
The June Financial Plan identified actions to close a
previously projected gap of approximately $2.6 billion for the 1997 fiscal year.
The proposed actions in the June Financial Plan for the 1997 fiscal year
included (i) agency actions totaling $1.2 billion; (ii) a revised tax reduction
program which would increase projected tax revenues by $369 million due to the
four year extension of the 12.5% personal income tax surcharge and other
actions; (iii) savings resulting from cost containment in entitlement programs
to reduce City expenditures and additional proposed State aid of $75 million;
(iv) the assumed receipt of revenues relating to rent payments for the City's
airports, which are currently the subject of a dispute with the Port Authority
of New York and New Jersey (the "Port Authority"); (v) the sale of the City's
television station for $207 million; and (vi) pension costs savings totaling
$134 million resulting from a proposed increase in the earnings assumption for
pension assets from 8.5% to 8.75%.
The 1997-2000 Financial Plan published on November 14, 1996
reflects actual receipts and expenditures and changes in forecast revenues and
expenditures since the June Financial Plan. The 1997-2000 Financial Plan
projects revenues and expenditures for 1997 fiscal year balanced in accordance
with GAAP, and projects gaps of $1.2 billion, $2.1 billion and $3.0 billion for
the 1998, 1999 and 2000 fiscal years, respectively. Changes since the June
Financial Plan include (i) an increase in projected tax revenues of $450
million, $120 million, $50 million and $45 million in fiscal years 1997 and
through 2000, respectively; (ii) a delay in the assumed receipt of $304
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million relating to projected rent payments for the City airports from the 1997
fiscal year to the 1998 and 1999 fiscal years, and a $34 million reduction in
assumed State and Federal aid for the 1997 Fiscal year; (iii) an approximately
$200 million increase in projected overtime and other expenditures in each of
the fiscal years 1997 through 2000; (iv) a $70 million increase in expenditures
for BOE in the 1997 fiscal year for school text books; (v) a reduction in
projected pension costs of $34 million, $50 million, $49 million and $47 million
in fiscal years 1997 through 2000, respectively; and (vi) additional agency
actions totalling $179 million, $386 million, $473 million and $589 million in
fiscal years 1997 through 2000, including personnel reductions through attrition
and early retirement.
The Financial Plan assumes (i) approval by the Governor and
the State Legislature of the extension of the 12.5% personal income tax
surcharge, which is projected to provide revenue of $170 million, $463 million,
$492 million and $521 million, in the 1997 through 2000 fiscal years,
respectively; (ii) collection of the projected rent payments for the City's
airports, totalling $270 million and $180 million in the 1998 and 1999 fiscal
years, respectively, which may depend on the successful completion of
negotiations with the Port Authority or the enforcement of the City's rights
under the existing leases thereto through pending legal actions; (iii) the
ability of HHC and BOE to identify actions to offset substantial City and State
revenue reductions and the receipt by BOE of additional State aid; (iv) State
approval of the cost containment initiatives and State aid proposed by the City;
and (v) a reduction in City funding for labor settlements for certain public
authorities or corporations. Legislation extending the 12.5% personal income tax
surcharge beyond December 31, 1996, was not enacted in the special legislative
session held in December 1996. Such legislation may be enacted in the 1997 State
Legislative Session. The Financial Plan does not reflect any increased costs
which the City might incur as a result of welfare legislation recently enacted
by Congress or legislation proposed by the Governor, which would, if enacted,
implement such Federal welfare legislation. In addition, the economic and
financial condition of the City may be affected by various financial, social,
economic and political factors which could have a material effect on the City.
In January 1997, the Mayor is expected to publish a
modification (the "January Modification") to the financial plan for the City's
1997 through 2001 fiscal years and a preliminary budget for the City's 1998
fiscal year. The January Modification will reflect changes since the Financial
Plan, including the City's program to address the currently forecast gap of
approximately $1.2 billion in the 1998 fiscal year. The gap-closing program, as
proposed in the Financial Plan, is currently being further developed and is
subject to change in connection with the January Modification. The Governor
released the 1997-1998 Executive Budget on January 14, 1997, which will be
considered for adoption by the State Legislature. Based on a preliminary
evaluation of currently available information, the City's Office of Management
and Budget ("OMB") believes that the reductions in Medicaid reimbursement rates
and other entitlement and welfare initiatives proposed in the 1997-1998
Executive Budget, if approved by the State Legislature without change, would
provide the City with a portion of the $650 million of additional aid and
reductions in entitlements costs assumed in the City's gap-closing program for
the 1998 fiscal year. OMB expects that the January Modification will reflect
additional initiative proposed by the City relating to reductions in entitlement
costs and additional governmental aid, which would be dependent upon State
legislative approval. Certain proposed cost containment and other initiatives
have been previously considered and rejected by the State Legislature. The
nature and extent of the impact on the City of the State budget, when adopted,
is uncertain, and no assurance can be given that the State actions included in
the State adopted budget may not have a significant adverse impact on the City's
budget and its Financial Plan. It can be expected that the proposals contained
in the January Modification to close the
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projected budget gap for the 1998 fiscal year will engender substantial public
debate which will continue through the time the budget is scheduled to be
adopted in June 1997.
The City's financial plans have been the subject of extensive
public comment and criticism. On July 16, 1996, the staff of the City
Comptroller issued a report on the Financial Plan. The report concluded that the
City's fiscal situation remains serious, and that the City faces budgetary risks
of approximately $787 million to $941 million for the 1997 fiscal year, which
increase to $4.16 billion to $4.31 billion for fiscal year 2000.
The projections for the 1997 through 2000 fiscal years reflect
the cost of the settlements with the United Federation of Teachers ("UFT") and a
coalition of unions headed by District Council 37 of the American Federation of
State, County and Municipal Employees, which together represent approximately
two-thirds of the City's workforce, and assume that the City will reach
agreement with its remaining municipal unions under terms which are generally
consistent with such settlements. The settlement provides for a wage freeze in
the first two years, followed by a cumulative effective wage increase of 11% by
the end of the five year period covered by the proposed agreements, ending in
fiscal years 2000 and 2001. Additional benefit increases would raise the total
cumulative effective increase to 13% above present costs. Costs associated with
similar settlements for all City-funded employees would total $49 million, $459
million and $1.2 billion in the 1997, 1998 and 1999 fiscal years respectively,
and exceed $2 billion in each fiscal year after the 1999 fiscal year. There can
be no assurance that the City will reach an agreement with the unions that have
not yet reached a settlement with the City on the terms contained in the
Financial Plan.
In the event of a collective bargaining impasse, the terms of
wage settlements could be determined through statutory impasse procedures, which
can impose a binding settlement except in the case of collective bargaining with
the UFT, which may be subject to non-binding arbitration. On January 23, 1996,
the City requested the Office of Collective Bargaining to declare an impasse
against the Patrolmen's Benevolent Association and the Uniformed Firefighters
Association.
On July 10, 1995, Standard & Poor's revised downward its
rating on City general obligation bonds from A- to BBB+ and removed City bonds
from CreditWatch. Standard & Poor's stated that "structural budgetary balance
remains elusive because of persistent softness in the City's economy,
highlighted by weak job growth and a growing dependence on the historically
volatile financial services sector". Other factors identified by Standard &
Poor's in lowering its rating on City bonds included a trend of using one-time
measures, including debt refinancings, to close projected budget gaps,
dependence on unratified labor savings to help balance the Financial Plan,
optimistic projections of additional federal and State aid or mandate relief, a
history of cash flow difficulties caused by State budget delays and continued
high debt levels.
On March 1, 1996, Moody's stated that the rating for City
general obligation bonds remains under review pending the outcome of the
adoption of the City's budget for the 1997 fiscal year, and, in light of the
status of the debate on public assistance and Medicaid reform; the enactment of
a State budget, upon which major assumptions regarding State aid are dependent,
which may be extensively delayed; and the seasoning of the City's economy with
regard to its strength and direction in the face of a potential national
economic slowdown. Since July 15, 1993, Fitch Investors Service, L.P. ("Fitch")
has rated City bonds A-. On February 28, 1996, Fitch placed the City's general
obligation bonds on FitchAlert with negative implications. On November 5, 1996,
Fitch removed the City's general obligation bonds from FitchAlert, although
Fitch stated the outlook remains negative.
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New York State and its Authorities. The State's current fiscal
year commenced on April 1, 1996, and ends on March 31, 1997, and is referred to
herein as the State's 1996-97 fiscal year. The State's budget for the 1996-97
fiscal year was enacted by the Legislature on July 13, 1996, more than three
months after the start of the fiscal year. The State Financial Plan for the
1996-97 fiscal year was formulated on July 25, 1996 and is based on the State's
budget as enacted by the Legislature and signed into law by the Governor, as
well as actual results for the first quarter of the current fiscal year. The
State's prior fiscal year commenced on April 1, 1995, and ended on March 31,
1996, and is referred to herein as the State's 1995-96 fiscal year. The State's
budget for the 1995-96 fiscal year was enacted by the Legislature on June 7,
1995, more than two months after the start of the fiscal year. The State
Financial Plan for the 1995-96 fiscal year was formulated on June 20, 1995 and
is based on the State's budget as enacted by the Legislature and signed into law
by the Governor.
The State closed projected budget gaps of $5.0 billion and
$3.9 billion for its 1995-96 and 1996-97 fiscal years, respectively. The 1997-98
gap was projected at $1.44 billion, based on the Governor's proposed budget of
December 1995. As a result of changes made in the enacted budget, that gap is
now expected to be larger. However, the gap is not expected to be as large as
those faced in the prior two fiscal years. The Governor has indicated that he
will propose to close any potential imbalance primarily through General Fund
expenditure reductions and without increases in taxes or deferrals of scheduled
tax reductions.
The 1996-97 State Financial Plan is projected to be balanced
on a cash basis. As compared to the Governor's proposed budget as revised on
March 20, 1996, the State's adopted budget for 1996-97 increases General Fund
spending by $842 million, primarily from increases for education, special
education and higher education ($563 million). The balance represents funding
increases to a variety of other programs, including community projects and
increased assistance to fiscally distressed cities. Resources used to fund these
additional expenditures include $540 million in increased revenues projected for
1996-97 based on higher-than-projected tax collections during the first half of
calendar 1996, $110 million in projected receipts from a new State tax amnesty
program, and other resources including certain non-recurring resources. The
total amount of non-recurring resources included in the 1996-97 State budget is
projected by the State Division of the Budget ("DOB") to be $1.3 billion, or 3.9
percent of total General Fund receipts.
The State issued its first update to the cash-basis 1996-97
State Financial Plan (the "Mid-Year Update") on October 25, 1996. The Mid-Year
Update reflects a balanced 1996-97 State Financial Plan, with a reserve for
contingencies in the General Fund of $300 million. This reserve will be utilized
to help offset a variety of potential risks and other unexpected contingencies
that the State may face during the balance of the 1996-97 fiscal year.
That State Financial Plan is based on a June 1996 projection
by DOB of national and State economic activity. The national economy has resumed
a more robust rate of growth after a "soft landing" in 1995, with over 11
million jobs added nationally since early 1992. The State economy has continued
to expand, but growth remains somewhat slower than in the nation. Although the
State has added approximately 240,000 jobs since late 1992, employment growth in
the State has been hindered during recent years by significant cutbacks in the
computer and instrument manufacturing, utility, defense, and banking industries.
Government downsizing has also moderated these job gains.
In its Mid-Year Update the State revised its forecast of
national and State economic activity through the end of calendar year 1997 to
reflect
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the stronger-than-expected growth in the first half of 1996. The national
economic forecast has been changed slightly from the initial forecast on which
the original 1996-97 State Financial Plan was based. The revised forecast
projects real Gross Domestic Product in the nation of 2.5 percent for 1996 and
2.4 percent n 1997. The inflation rate is expected to be 3.0 percent in 1996 and
2.9 percent in 1997. The annual rate of job growth is expected to slow gradually
to about 1.8 percent in 1997, down from 2.2 percent in 1996. Growth in personal
income and wages are expected to slow accordingly.
The State economic forecast has been changed slightly from the
one formulated with the July 1996-97 State Financial Plan. Moderate growth is
projected to continue through the second half of 1996, with employment, wages
and incomes continuing their modest rise. Personal income is projected to
increase by 5.2 percent in 1996 and 4.7 percent in 1997, reflecting robust
projected wage growth fueled in part by financial sector bonus payments. Overall
employment growth will continue at a modest rate, reflecting the slowdown in the
national economy, continued spending restraint in government, and restructuring
in the health care and financial sectors.
The forecast for continued moderate growth, and any resultant
impact on the State's 1996-1997 Financial Plan, contains some uncertainties.
Stronger-than-expected gains in employment could lead to a significant
improvement in consumption spending. Investments could also remain robust.
Conversely, the prospect of a continuing deadlock on federal budget deficit
reduction or fears of excessively rapid economic growth could create upward
pressures on interest rates. In addition, the State economic forecast could
over- or underestimate the level of future bonus payments or inflation growth,
resulting in forecasted average wage growth that could differ significantly from
actual growth. Similarly, the State forecast could fail to correctly account for
expected declines in government and banking employment and the direction of
employment change that is likely to accompany telecommunications deregulation.
The DOB believes that its projections of receipts and
disbursements relating to the current State Financial Plan, and the assumptions
on which they are based, are reasonable. Actual results, however, could differ
materially and adversely from the projections set forth below, and those
projections may be changed materially and adversely from time to time.
The economic and financial condition of the State may be
affected by various financial, social, economic and political factors. Those
factors can be very complex, may vary from fiscal year to fiscal year, and are
frequently the result of actions taken not only by the State and its agencies
and instrumentalities, but also by entities, such as the Federal government,
that are not under the control of the State. Because of the uncertainty and
unpredictability of changes in these factors, their impact cannot be fully
included in the assumptions underlying the State's projections. There can be no
assurance that the State economy will not experience results that are worse than
predicted, with corresponding material and adverse effects on the State's
financial projections.
The General Fund is the principal operating fund of the State
and is used to account for all financial transactions, except those required to
be accounted for in another fund. It is the State's largest fund and receives
almost all State taxes and other resources not dedicated to particular purposes.
In the State's 1996-97 fiscal year, the General Fund is expected to account for
approximately 47 percent of total governmental-fund receipts and 71 percent of
total governmental-fund disbursements. General Fund moneys are also transferred
to other funds, primarily to support certain capital projects and debt service
payments in other fund types.
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The General Fund is projected to be balanced on a cash basis
for 1996-97 fiscal year. Actual receipts through the first two quarters of the
1996-96 State fiscal year reflecting stronger-than-expected growth in most
taxes, with actual receipts exceeding expectations by $276 million. Based on the
revised economic outlook and actual receipts for the first six months of
1996-97, projected General Fund receipts for the 1996-97 State fiscal year have
been increased by $420 million. Most of this projected increase is in the yield
of the personal income tax ($241 million), with additional increases now
expected in business taxes ($124 million) and other tax receipts ($49 million).
Projected collections from user taxes and fees have been revised downward
slightly ($5 million). Revisions were also made to both miscellaneous receipts
and in transfers from other funds (an $11 million combined projected increase).
Disbursements through the first six months of the fiscal year
were $415 million less than projected, primarily because of delays in processing
payments following delayed enactment of the State budget. As a result, no
savings are included in the Mid-Year Update from this slower-than-expected
spending. Projections of 1996-97 General Fund disbursements are increased by
$120 million, since increased General Fund disbursements for education are
required to replace a projected decrease in lottery receipts. This modification
is shown in the form of an increased transfer of General Fund monies to the
Lottery Fund in the Special Revenue fund type. The projected closing fund
balance in the General Fund of $337 million reflects a balance of $252 million
in the Tax Stabilization Reserve Fund (following a payment of $15 million during
the current fiscal year) and a deposit of $85 million to the Contingency Reserve
Fund.
On January 13, 1992, Standard & Poor's reduced its ratings on
the State's general obligation bonds from A to A- and, in addition, reduced its
ratings on the State's moral obligation, lease purchase, guaranteed and
contractual obligation debt. Standard & Poor's also continued its negative
rating outlook assessment on State general obligation debt. On April 26, 1993,
Standard & Poor's revised the rating outlook assessment to stable. On February
14, 1994, Standard & Poor's raised its outlook to positive and, on August 5,
1996, confirmed its A- rating. On January 6, 1992, Moody's reduced its ratings
on outstanding limited-liability State lease purchase and contractual
obligations from A to Baa1. On July 26, 1996, Moody's reconfirmed its A rating
on the State's general obligation long-term indebtedness.
Litigation. The court actions in which the State is a
defendant generally involve State programs and miscellaneous tort, real
property, and contract claims. While the ultimate outcome and fiscal impact, if
any, on the State of those proceedings and claims are not currently predictable,
adverse determinations in certain of them might have a material adverse effect
upon the State's ability to maintain a balanced 1996-97 State Financial Plan.
The claims involving the City other than routine litigation
incidental to the performance of their governmental and other functions and
certain other litigation arise out of alleged constitutional violations, torts,
breaches of contract and other violations of law and condemnation proceedings.
While the ultimate outcome and fiscal impact, if any, on the City of those
proceedings and claims are not currently predictable, adverse determinations in
certain of them might have a material adverse effect upon the City's ability to
carry out the 1997-2000 Financial Plan. The City has estimated that its
potential future liability on account of outstanding claims against it as of
June 30, 1996 amounted to approximately $2.8 billion.
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<PAGE>
PUBLIC OFFERING
---------------
OFFERING PRICE. The secondary market Public Offering Price per
Unit is computed by adding a sales charge to the aggregate bid price of the
Bonds in the Trust divided by the number of Units outstanding. The method used
by the Evaluator for computing the sales charge for secondary market purchases
shall be based upon the number of years remaining to maturity of each Bond.
Bonds will be deemed to mature on their stated maturity dates unless bonds have
been called for redemption, funds have been placed in escrow to redeem them on
an earlier call date or are subject to a "mandatory put," in which case the
maturity will be deemed to be such other date.
The table below sets forth the various sales charges based on
the length of maturity of each Bond:
As Percent of Public
Time to Maturity Offering Price
- ---------------- --------------
less than 6 months 0%
6 mos. to 1 year 1%
over 1 yr. to 2 yrs. 1 1/2%
over 2 yrs. to 4 yrs. 2 1/2%
over 4 yrs. to 8 yrs. 3 1/2%
over 8 yrs. to 15 yrs. 4 1/2%
over 15 years 5 1/2%
A proportionate share of accrued interest on the Bonds to the
expected date of settlement for the Units is added to the Public Offering Price.
Accrued interest is the accumulated and unpaid interest on a Bond from the last
day on which interest was paid and is accounted for daily by a Trust at the
initial daily rate set forth under "Summary of Essential Information" in Part A.
This daily rate is net of estimated fees and expenses. The secondary market
Public Offering Price can vary on a daily basis from the amount stated on the
cover of Part A of this Prospectus in accordance with fluctuations in the prices
of the Bonds. The price to be paid by each investor will be computed on the
basis of an evaluation made as of the date the Units are purchased. The
aggregate bid price evaluation of the Bonds is determined in the manner set
forth under "Trustee Redemption".
The Evaluator may obtain current prices for the Bonds from
investment dealers or brokers (including the Sponsor) that customarily deal in
tax-exempt obligations or from any other reporting service or source of
information which the Evaluator deems appropriate.
ACCRUED INTEREST. An amount of accrued interest which
represents accumulated unpaid or uncollected interest on a Bond from the last
day on which interest was paid thereon will be added to the Public Offering
Price. This daily rate is net of estimated fees and expenses. Since a Trust
normally receives the interest on Bonds twice a year and the interest on the
Bonds in such Trust is accrued on a daily basis, the Trusts will always have an
amount of interest earned but uncollected by, or unpaid to, the Trustee. A
Certificateholder will not recover his proportionate share of accrued interest
until the Units are sold or redeemed, or the Trusts are terminated. At that
time, the Certificateholder will receive his proportionate share of the accrued
interest computed to the settlement date in the case of sale or termination and
to the date of tender in the case of redemption.
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<PAGE>
EMPLOYEE DISCOUNTS. Employees (and their immediate families)
of Reich & Tang Distributors L.P. (and its affiliates) and of any underwriter of
either Trust, pursuant to employee benefit arrangements, may purchase Units of a
Trust at a price equal to the bid side evaluation of the underlying securities
in such Trust divided by the number of Units outstanding plus a reduced charge
of $10.00 per Unit. Such arrangements result in less selling effort and selling
expenses than sales to employee groups of other companies. Resales or transfers
of Units purchased under the employee benefit arrangements may only be made
through the Sponsor's secondary market, so long as it is being maintained.
DISTRIBUTION OF UNITS. Certain banks and thrifts will make
Units of the Trust available to their customers on an agency basis. A portion of
the sales charge paid by their customers is retained by or remitted to the
banks. Under the Glass-Steagall Act, banks are prohibited from underwriting
Units; however, the Glass-Steagall Act does permit certain agency transactions
and the banking regulators have indicated that these particular agency
transactions are permitted under such Act. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed herein
and banks and financial institutions may be required to register as dealers
pursuant to state law.
The Sponsor intends to qualify the Units for sale in New York,
New Jersey, Connecticut, Florida and New Hampshire through dealers who are
members of the National Association of Securities Dealers, Inc. Units may be
sold to dealers at prices which represent a concession of up to (a) 4% of the
Public Offering Price for the New York Municipal Trust Series or (b) $25.00 per
unit for the New York Municipal Trust, Discount and Zero Coupon Fund, subject to
the Sponsor's right to change the dealers' concession from time to time. In
addition, for transactions of 1,000,000 Units or more, the Sponsor intends to
negotiate the applicable sales charge and such charge will be disclosed to any
such purchaser. Such Units may then be distributed to the public by the dealers
at the Public Offering Price then in effect. The Sponsor reserves the right to
reject, in whole or in part, any order for the purchase of Units. The Sponsor
reserves the right to change the discount from time to time.
SPONSOR'S PROFITS. The Sponsor will receive a gross commission
on all Units sold in the secondary market equal to the applicable sales charge
on each (see "Offering Price.") In addition, in maintaining a market for Units
(see "Sponsor Repurchase") the Sponsor will realize profits or sustain losses in
the amount of any difference between the price at which it buys Units and the
price at which it resells such Units.
Participants in the "Total Reinvestment Plan" can designate a
broker as the recipient of a dealer concession. See "Total Reinvestment Plan."
COMPARISON OF PUBLIC OFFERING PRICE, SPONSOR'S REPURCHASE
PRICE AND REDEMPTION PRICE. The secondary market Public Offering Price of Units
of the Trust will be determined on the basis of the current bid prices of the
Bonds in such Trust, plus the applicable sales charge. The value at which Units
may be resold in the secondary market or redeemed will be determined on the
basis of the current bid prices of such Bonds without any sales charge. On the
Evaluation Date, the Public Offering Price per Unit (based on the bid prices of
the Bonds in the Trust plus the sales charge) exceeded the Repurchase and
Redemption Price per Unit (based upon the bid prices of the Bonds in the Trust
without the sales charge) by the amount shown under "Summary of Essential
Information" in Part A. For this reason, among others (including fluctuations in
the market prices of Bonds and the fact that the Public Offering Price includes
the 5-1/2% sales charge for the New York Discount Trust or the 4-1/2% sales
charge for the New York Municipal Trust), the amount realized by a
Certificateholder upon any redemption of Units may be less than the price paid
for such Units.
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<PAGE>
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN
-------------------------------------------------------
The rate of return on an investment in Units of each Trust is
measured in terms of "Estimated Current Return" and "Estimated Long Term
Return".
Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in a Trust's portfolio in accordance with accepted bond
practices, which practices take into account not only the interest payable on
the Bond but also the amortization of premiums or accretion of discounts, if
any; (2) calculating the average of the yields for the Bonds in each Trust's
portfolio by weighing each Bond's yield by the market value of the Bond and by
the amount of time remaining to the date to which the Bond is priced (thus
creating an average yield for the portfolio of each Trust); and (3) reducing the
average yield for the portfolio of each Trust in order to reflect estimated fees
and expenses of that Trust and the maximum sales charge paid by Unitholders. The
resulting Estimated Long Term Return represents a measure of the return to
Unitholders earned over the estimated life of each Trust. The Estimated Long
Term Return as of the day prior to the Evaluation Date is stated for each Trust
under "Summary of Essential Information" in Part A.
Estimated Current Return is computed by dividing the Estimated
Net Annual Interest Income per Unit by the Public Offering Price per Unit. In
contrast to the Estimated Long Term Return, the Estimated Current Return does
not take into account the amortization of premium or accretion of discount, if
any, on the Bonds in the portfolios of each Trust. Moreover, because interest
rates on Bonds purchased at a premium are generally higher than current interest
rates on newly issued bonds of a similar type with comparable rating, the
Estimated Current Return per Unit may be affected adversely if such Bonds are
redeemed prior to their maturity. On the day prior to the Evaluation Date, the
Estimated Net Annual Interest Income per Unit divided by the Public Offering
Price resulted in the Estimated Current Return stated for each Trust under
"Summary of Essential Information" in Part A.
The Estimated Net Annual Interest Income per Unit of each
Trust will vary with changes in the fees and expenses of the Trustee and the
Evaluator applicable to each Trust and with the redemption, maturity, sale or
other disposition of the Bonds in each Trust. The Public Offering Price will
vary with changes in the bid prices of the Bonds. Therefore, there is no
assurance that the present Estimated Current Return or Estimated Long Term
Return will be realized in the future.
A schedule of cash flow projections is available from the
Sponsor upon request.
RIGHTS OF CERTIFICATEHOLDERS
----------------------------
CERTIFICATES. Ownership of Units of the Trust is evidenced by
registered Certificates executed by the Trustee and the Sponsor. Certificates
may be issued in denominations of one or more Units and will bear appropriate
notations on their faces indicating which plan of distribution has been selected
by the Certificateholder. Certificates are transferable by presentation and
surrender to the Trustee properly endorsed and/or accompanied by a written
instrument or instruments of transfer. Although no such charge is presently made
or contemplated, the Trustee may require a Certificateholder to pay $2.00 for
each Certificate reissued or transferred and any governmental charge that may be
imposed in connection with each such transfer or interchange. Mutilated,
destroyed, stolen or lost Certificates will be
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replaced upon delivery of satisfactory indemnity and payment of expenses
incurred.
INTEREST AND PRINCIPAL DISTRIBUTIONS. Interest received by the
Trust is credited by the Trustee to an Interest Account of such Trust and a
deduction is made to reimburse the Trustee without interest for any amounts
previously advanced. Proceeds representing principal received from the maturity,
redemption, sale or other disposition of the Bonds are credited to a Principal
Account of such Trust.
Distributions to each Certificateholder from the Interest
Account are computed as of the close of business of each Record Date for the
following Payment Date and consist of an amount substantially equal to
one-twelfth, one-half or all of each Certificateholder's pro rata share of the
Estimated Net Annual Interest Income in the Interest Account, depending upon the
applicable plan of distribution. Distributions from the Principal Account will
be computed as of each semi-annual Record Date, and will be made to the
Certificateholders on or shortly after the next semi-annual Payment Date.
Proceeds representing principal received from the disposition of any of the
Bonds between a Record Date and a Payment Date which are not used for
redemptions of Units will be held in the Principal Account and not distributed
until the second succeeding semi-annual Payment Date. No distributions will be
made to Certificateholders electing to participate in the Total Reinvestment
Plan, except as provided thereunder. Persons who purchase Units between a Record
Date and a Payment Date will receive their first distribution on the second
Payment Date after such purchase.
Because interest payments are not received by the Trust at a
constant rate throughout the year, interest distributions may be more or less
than the amount credited to the Interest Account as of a given Record Date. For
the purpose of minimizing fluctuations in the distributions from the Interest
Account, the Trustee will advance sufficient funds as may be necessary to
provide interest distributions of approximately equal amounts. The Trustee shall
be reimbursed, without interest, for these advances to the Interest Account.
Funds which are available for future distributions, investment in the Total
Reinvestment Plan, payments of expenses and redemptions are in accounts which
are non-interest bearing to Certificateholders and are available for use by the
Trustee pursuant to normal banking procedures.
As of the first day of each month, the Trustee will deduct
from the Interest Account of the Trust and, to the extent funds are not
sufficient therein, from the Principal Account of such Trust, amounts necessary
to pay the expenses of such Trust (as determined on the basis set forth under
"Trust Expenses and Charges"). The Trustee also may withdraw from said accounts
such amounts, if any, as it deems necessary to establish a reserve for any
applicable taxes or other governmental charges that may be payable out of such
Trust. Amounts so withdrawn shall not be considered a part of such Trust's
assets until such time as the Trustee shall return all or any part of such
amounts to the appropriate accounts. In addition, the Trustee may withdraw from
the Interest and Principal Accounts such amounts as may be necessary to cover
redemptions of Units of such Trust by the Trustee.
The estimated monthly, semi-annual or annual interest
distribution per Unit will be in the amount shown under "Summary of Essential
Information" in Part A and will change and may be reduced as Bonds mature or are
redeemed, exchanged or sold, or as expenses of the Trust fluctuate. No
distribution need be made from the Principal Account until the balance therein
is an amount sufficient to distribute at least $1.00 per Unit.
DISTRIBUTION ELECTIONS. Interest is distributed monthly, semi-
annually or annually, depending upon the distribution plan applicable to the
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Unit purchased. Record Dates are the first day of each month for monthly
distributions, the first day of each June and December for semi-annual
distributions and the first day of each December for annual distributions.
Payment Dates will be the fifteenth day of each month following the respective
Record Dates. Certificateholders purchasing Units in the secondary market will
initially receive distributions in accordance with the election of the prior
owner. Every October each Certificateholder may change his distribution election
by notifying the Trustee in writing of such change between October 1 and
November 1 of each year. (Certificateholders deciding to change their election
should contact the Trustee by calling the number listed on the back cover hereof
for information regarding the procedures that must be followed in connection
with this written notification of the change of election.) Failure to notify the
Trustee on or before November 1 of each year will result in a continuation of
the plan for the following 12 months.
RECORDS. The Trustee will furnish Certificateholders in
connection with each distribution a statement of the amount of interest, if any,
and the amount of other receipts, if any, which are being distributed, expressed
in each case as a dollar amount per Unit. Within a reasonable time after the end
of each calendar year (normally prior to January 31 of the succeeding year), the
Trustee will furnish to each person who at any time during the calendar year was
a Certificateholder of record of a Trust, a statement showing (a) as to the
Interest Account of such Trust: interest received (including amounts
representing interest received upon any disposition of Bonds and earned original
issue discount, if any), amounts paid for redemptions of Units, if any,
deductions for applicable taxes and fees and expenses of such Trust, and the
balance remaining after such distributions and deductions, expressed both as a
total dollar amount and as a dollar amount representing the pro rata share of
each Unit outstanding on the last business day of such calendar year; (b) as to
the Principal Account of such Trust: the dates of disposition of any Bonds and
the net proceeds received therefrom (including any unearned original issue
discount but excluding any portion representing accrued interest), deductions
for payments of applicable taxes and fees and expenses of such Trust, amounts
paid for redemptions of Units, if any, and the balance remaining after such
distributions and deductions, expressed both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (c) a list of the Bonds held in such
Trust and the number of Units outstanding on the last business day of such
calendar year; (d) the Redemption Price per Unit of such Trust based upon the
last computation thereof made during such calendar year; and (e) amounts
actually distributed to Certificateholders during such calendar year from the
Interest and Principal Accounts, separately stated, expressed both as total
dollar amounts and as dollar amounts representing the pro rata share of each
Unit outstanding on the last business day of such calendar year.
The Trustee shall keep available for inspection by
Certificateholders at all reasonable times during usual business hours, books of
record and account of its transactions as Trustee, including records of the
names and addresses of Certificateholders, Certificates issued or held, a
current list of Bonds in the portfolio and a copy of the Trust Agreement.
TAX STATUS
----------
All Bonds acquired by the Trust were accompanied by copies of
opinions of bond counsel to the issuing governmental authorities given at the
time of original delivery of the Bonds to the effect that the interest thereon
is exempt from regular federal income tax and from New York State and New York
City income taxes. Such interest may, however, be subject to federal corporate
alternative minimum tax and to state or local taxes in other
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<PAGE>
jurisdictions. None of the Bonds in the Trust is subject to the federal
individual alternative minimum tax under the Tax Reform Act of 1986 (the "Act").
All Bonds were issued by or on behalf of the State of New York, its political
subdivisions or its public authorities or by the Commonwealth of Puerto Rico or
its public authorities. Neither the Sponsor nor the Trustee nor their respective
counsel have made any review of the proceedings relating to the issuance of the
Bonds or the bases for such opinions and express no opinion as to these matters,
and neither the Trustee nor the Sponsor nor their respective counsel have made
an independent examination or verification that the federal income tax status of
the Bonds has not been altered since the time of the original delivery of those
opinions.
In rendering the opinion set forth below, counsel has examined
the Agreement, the final form of Prospectus dated the date hereof (the
"Prospectus") and the documents referred to therein, among others, and has
relied on the validity of said documents and the accuracy and completeness of
the facts set forth therein.
In the opinion of Battle Fowler LLP, counsel for the Sponsor,
under existing law:
The Trust is not an association taxable as a corporation for
federal income tax purposes under the Internal Revenue Code of 1986
(the "Code"), and income received by the Trust that consists of
interest excludable from federal gross income under the Code will
be excludable from the federal gross income of the
Certificateholders of the Trust.
Each Certificateholder will be considered the owner of a pro
rata portion of the Trust under Section 676(a) of the Code. Thus,
each Certificateholder will be considered to have received his pro
rata share of bond interest when it is received by the Trust, and
the net income distributable to Certificateholders that is exempt
from federal income tax when received by the Trust will constitute
tax-exempt income when received by the Certificateholders.
Gain (other than any earned original issue discount) realized
on a sale or redemption of the Bonds or on sale of a Unit is,
however, includable in gross income for federal income tax
purposes, generally as capital gain, although gain on the
disposition of a Bond or a Unit purchased at a market discount
generally will be treated as ordinary income, rather than capital
gain, to the extent of accrued market discount. (It should be noted
in this connection that such gain does not include any amounts
received in respect of accrued interest.) Such gain may be long- or
short-term gain depending on the facts and circumstances. Capital
losses are deductible to the extent of capital gains; in addition,
up to $3,000 of capital losses of non-corporate Certificateholders
may be deducted against ordinary income. Capital assets must be
held for more than one year to qualify for long-term capital gain
treatment. Individuals who realize long-term capital gains will be
subject to a maximum tax rate of 28% on such gain.
Each Certificateholder will realize taxable gain or loss when
the Trust disposes of a Bond (whether by sale, exchange, redemption
or payment at maturity), as if the Certificateholder had directly
disposed of his pro rata share of such Bond. The gain or loss is
measured by the difference between (i) the tax cost of such pro
rata share and (ii) the amount received therefor. For this purpose,
a Certificateholder's tax cost for each Bond is determined by
allocating the total tax cost of each Unit among all of the Bonds
held in the Trust (in accordance with the portion of such Trust
comprised by each Bond). In order to determine the amount of
taxable gain or loss, the Certificateholder's amount received is
similarly allocated at that time. The Certificate-
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<PAGE>
holder may exclude from the amount received any amounts that
represent accrued interest or the earned portion of any original
issue discount but may not exclude amounts attributable to market
discount. Thus, when a Bond is disposed of by the Trust at a gain,
taxable gain will equal the difference between (i) the amount
received and (ii) the amount paid plus any original issue discount
(limited, in the case of Bonds issued after June 8, 1980, to the
portion earned from the date of acquisition to the date of
disposition). Gain on the disposition of a Bond purchased at a
market discount generally will be treated as ordinary income,
rather than capital gain, to the extent of accrued market discount.
No deduction is allowed for the amortization of bond premium on
tax-exempt bonds such as the Bonds in computing regular federal
income tax.
Discount generally accrues based on the principle of
compounding of accrued interest, not on a straight-line or ratable
method, with the result that the amount of earned original issue
discount is less in the earlier years and more in the later years
of a bond term. The tax basis of a discount bond is increased by
the amount of accrued, tax-exempt original issue discount thus
determined. This method of calculation will produce higher capital
gains (or lower losses) to a Certificateholder, as compared to the
results produced by the straight-line method of accounting for
original issue discount, upon an early disposition of a Bond by the
Trust or of a Unit by a Certificateholder.
A Certificateholder may also realize taxable income or loss
when a Unit of the Trust is sold or redeemed. The amount received
is allocated among all the Bonds in such Trust in the same manner
as when the Trust disposes of Bonds and the Certificateholder may
exclude accrued interest and the earned portion of any original
issue discount (but not amounts attributable to market discount).
The return of a Certificateholder's tax cost is otherwise a
tax-free return of capital.
A portion of social security benefits is includable in gross
income for taxpayers whose "modified adjusted gross income"
combined with a portion of their benefits exceeds a base amount.
The base amount is $25,000 for an individual, $32,000 for a married
couple filing a joint return and zero for married persons filing
separate returns. Interest on tax-exempt bonds is to be added to
adjusted gross income for purposes of computing the amount of
Social Security benefits that are includable in gross income and
determining whether an individual's income exceeds the base amount
above which a portion of the benefits would be subject to tax. For
taxable years beginning after December 31, 1993, the amount of
Social Security benefits subject to tax have been increased.
Corporate Certificateholders are required to include in
federal corporate alternative minimum taxable income 75 percent of
the amount by which the adjusted current earnings (which will
include tax-exempt interest) of the corporation exceeds alternative
minimum taxable income (determined without regard to this item). In
addition, in certain cases, Subchapter S corporations with
accumulated earnings and profits from Subchapter C years will be
subject to a minimum tax on excess "passive investment income"
which includes tax-exempt interest.
Under federal law, interest on Trust-held Bonds issued by
authority of the Government of Puerto Rico is exempt from regular
federal income tax, and state and local income tax in the United
States and Puerto Rico.
The Trust is not subject to the New York State Franchise Tax
on Business Corporations or the New York City General Corporation
Tax.
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<PAGE>
Under the personal income tax laws of the State and City of
New York, the income of the Trust will be treated as the income of
the Certificateholders. Interest on the Bonds that is exempt from
tax under the laws of the State and City of New York when received
by the Trust will retain its status as tax-exempt interest to its
Certificateholders. In addition, non-residents of New York City
will not be subject to the New York City personal income tax on
gains derived with respect to their Units. Non-residents of New
York State will not be subject to New York State personal income
tax on such gains unless the Units are employed in a business,
trade or occupation carried on in New York State. A New York State
or New York City resident should determine his basis and holding
period for his Units in the same manner for New York State and New
York City tax purposes as for federal tax purposes. For
corporations doing business in New York State and New York City,
interest earned on state and municipal obligations that are exempt
from federal income tax, including obligations of New York State
and New York City, its political subdivisions and
instrumentalities, must be included in calculating New York State
and New York City entire net income for purposes of calculating New
York State and New York City franchise (income) tax. The laws of
the several states and local taxing authorities vary with respect
to the taxation of such obligations and each Certificateholder is
advised to consult his own tax advisor as to the tax consequences
of his Certificates under state and local tax laws.
The exemption of interest on municipal obligations for federal
income tax purposes does not necessarily result in exemption under the income
tax laws of any state or local government. The laws of such states and local
governments vary with respect to the taxation of such obligations.
In the case of Bonds that are industrial revenue bonds
("IRBs") or certain types of private activity bonds, the opinions of bond
counsel to the respective issuing authorities indicate that interest on such
Bonds is exempt from regular federal income tax. However, interest on such Bonds
will not be exempt from regular federal income tax for any period during which
such Bonds are held by a "substantial user" of the facilities financed by the
proceeds of such Bonds or by a "related person" thereof within the meaning of
the Code. Therefore, interest on any such Bonds allocable to a Certificateholder
who is such a "substantial user" or "related person" thereof will not be
tax-exempt. Furthermore, in the case of IRBs that qualify for the "small issue"
exemption, the "small issue" exemption will not be available or will be lost if,
at any time during the three-year period beginning on the later of the date the
facilities are placed in service or the date of issue, all outstanding
tax-exempt IRBs, together with a proportionate share of any present issue, of an
owner or principal user (or related person) of the facilities exceeds
$40,000,000. In the case of IRBs issued under the $10,000,000 "small issue"
exemption, interest on such IRBs will become taxable if the face amount of such
IRBs plus certain capital expenditures exceeds $10,000,000.
In addition, a Bond can lose its tax-exempt status as a result
of other subsequent but unforeseeable events such as prohibited "arbitrage"
activities by the issuer of the Bond or the failure of the Bond to continue to
satisfy the conditions required for the exemption of interest thereon from
regular federal income tax. No investigation has been made as to the current or
future owners or users of the facilities financed by the Bonds, the amount of
such persons' outstanding tax-exempt IRBs, or the facilities themselves, and no
assurance can be given that future events will not affect the tax-exempt status
of the Bonds. Investors should consult their tax advisors for advice with
respect to the effect of these provisions on their particular tax situation.
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<PAGE>
Interest on indebtedness incurred or continued to purchase or
carry the Units is not deductible for regular federal income tax or New York
State or New York City income tax purposes. However, such interest is deductible
for New York State and New York City income tax purposes by corporations that
are required to include interest on the Bonds in New York State and New York
City entire net income for purposes of calculating New York State and New York
City franchise (income) taxes. In addition, under rules used by the Internal
Revenue Service for determining when borrowed funds are considered used for the
purpose of purchasing or carrying particular assets, the purchase of Units may
be considered to have been made with borrowed funds even though the borrowed
funds are not directly traceable to the purchase of the Units. Similar rules are
applicable for New York State and New York City tax purposes. Also, in the case
of certain financial institutions that acquire Units, in general no deduction is
allowed for interest expense allocable to the Units.
From time to time proposals have been introduced before
Congress to restrict or eliminate the federal income tax exemption for interest
on debt obligations similar to the Bonds in the Trust, and it can be expected
that similar proposals may be introduced in the future.
In South Carolina v. Baker, the U.S. Supreme Court held that
the federal government may constitutionally require states to register bonds
they issue and subject the interest on such bonds to federal income tax if not
registered, and that there is no constitutional prohibition against the federal
government's taxing the interest earned on state or other municipal bonds. The
Supreme Court decision affirms the authority of the federal government to
regulate and control bonds such as the Bonds in the Trust and to tax interest on
such bonds in the future. The decision does not, however, affect the current
exemption from taxation of the interest earned on the Bonds in the Trust in
accordance with Section 103 of the Code.
The opinions of bond counsel or special tax counsel to the
issuing governmental authorities to the effect that interest on the Bonds is
exempt from regular federal income tax may be limited to law existing at the
time the Bonds were issued, and may not apply to the extent that future changes
in law, regulations or interpretations affect such Bonds. Investors are advised
to consult their own tax advisors for advice with respect to the effect of any
legislative changes.
LIQUIDITY
---------
SPONSOR REPURCHASE. The Sponsor, although not obligated to do
so, intends to maintain a secondary market for the Units. The Sponsor's
secondary market repurchase price will be based on the aggregate bid price of
the Bonds in the Trust portfolio and will be the same as the redemption price.
The aggregate bid price will be determined by the Evaluator on a daily basis set
forth under "Trustee Redemption." Certificateholders who wish to dispose of
their Units should inquire of the Sponsor prior to making a tender for
redemption. The Sponsor may discontinue repurchases of Units of the Trust if the
supply of Units exceeds demand, or for other business reasons. The date of
repurchase is deemed to be the date on which Certificates representing Units are
physically received in proper form by the Sponsor, Reich & Tang Distributors
L.P., 600 Fifth Avenue, New York, New York 10020. Units received after 4 P.M.,
New York time, will be deemed to have been repurchased on the next business day.
In the event a market is not maintained for the Units, a Certificateholder may
be able to dispose of Units only by tendering them to the Trustee for
redemption.
Prospectuses relating to certain other bond trusts indicate an
intention by the respective Sponsors, subject to change, to repurchase units
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<PAGE>
on the basis of a price higher than the bid prices of the Bonds in the Trusts.
Consequently, depending on the prices actually paid, the secondary market
repurchase price of other trusts may be computed on a somewhat more favorable
basis than the repurchase price offered by the Sponsor for units of these
Trusts, although in all bond trusts, the purchase price of a unit depends
primarily on the value of the bonds in the trust portfolio.
Units purchased by the Sponsor in the secondary market may be
reoffered for sale by the Sponsor at a price based on the aggregate bid price of
the Bonds in a Trust plus a 4-1/2% sales charge (4.712% of the net amount
invested) plus net accrued interest. Any Units that are purchased by the Sponsor
in the secondary market also may be redeemed by the Sponsor if it determines
such redemption to be in its best interest.
The Sponsor may, under certain circumstances, as a service to
Certificateholders, elect to purchase any Units tendered to the Trustee for
redemption (see "Trustee Redemption"). Factors which the Sponsor will consider
in making a determination will include the number of Units of all Trusts which
it has in inventory, its estimate of the salability and the time required to
sell such Units and general market conditions. For example, if in order to meet
redemptions of Units the Trustee must dispose of Bonds, and if such disposition
cannot be made by the redemption date (seven calendar days after tender), the
Sponsor may elect to purchase such Units. Such purchase shall be made by payment
to the Certificateholder not later than the close of business on the redemption
date of an amount equal to the Redemption Price on the date of tender.
TRUSTEE REDEMPTION. Units also may be tendered to the Trustee
for redemption at its corporate trust office as set forth in Part A of this
Prospectus, upon proper delivery of Certificates representing such Units and
payment of any relevant tax. At the present time there are no specific taxes
related to the redemption of Units. No redemption fee will be charged by the
Sponsor or the Trustee. Units redeemed by the Trustee will be canceled.
Certificates representing Units to be redeemed must be
delivered to the Trustee and must be properly endorsed or accompanied by proper
instruments of transfer with signature guaranteed (or by providing satisfactory
indemnity, as in the case of lost, stolen or mutilated Certificates). Thus,
redemptions of Units cannot be effected until Certificates representing such
Units have been delivered by the person seeking redemption. (See
"Certificates".) Certificateholders must sign exactly as their names appear on
the faces of their Certificates. In certain instances the Trustee may require
additional documents such as, but not limited to, trust instruments,
certificates of death, appointments as executor or administrator or certificates
of corporate authority.
Within three business days following a tender for redemption,
the Certificateholder will be entitled to receive in cash an amount for each
Unit tendered equal to the Redemption Price per Unit computed as of the
Evaluation Time on the date of tender. The "date of tender" is deemed to be the
date on which Units are received by the Trustee, except that with respect to
Units received after the close of trading on the New York Stock Exchange, the
date of tender is the next day on which such Exchange is open for trading, and
such Units will be deemed to have been tendered to the Trustee on such day for
redemption at the Redemption Price computed on that day.
Accrued interest paid on redemption shall be withdrawn from
the Interest Account, or, if the balance therein is insufficient, from the
Principal Account. All other amounts paid on redemption shall be withdrawn from
the Principal Account. The Trustee is empowered to sell bonds in order to make
funds available for redemptions. Such sales, if required, could
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<PAGE>
result in a sale of Bonds by the Trustee at a loss. To the extent Bonds in a
Trust are sold, the size and diversity of such Trust will be reduced.
The Redemption Price per Unit is the pro rata share of each
Unit in a Trust determined by the Trustee on the basis of (v) the cash on hand
in such Trust or moneys in the process of being collected, (vi) the value of the
Bonds in such Trust based on the bid prices of such Bonds and (vii) interest
accrued thereon, less (a) amounts representing taxes or other governmental
charges payable out of such Trust, (b) the accrued expenses of such Trust and
(c) cash allocated for distribution to Certificateholders of record of such
Trust as of the business day prior to the evaluation being made. The Evaluator
may determine the value of the Bonds in such Trust for purposes of redemption
(1) on the basis of current bid prices of the bonds obtained from dealers or
brokers who customarily deal in bonds comparable to those held by such Trust,
(2) on the basis of bid prices for bonds comparable to any Bonds for which bid
prices are not available, (3) by determining the value of the Bonds by
appraisal, or (4) by any combination of the above.
The Trustee is irrevocably authorized in its discretion, if
the Sponsor does not elect to purchase a Unit tendered for redemption or if the
Sponsor tenders a Unit for redemption, in lieu of redeeming such Unit, to sell
such Unit in the over-the-counter market for the account of the tendering
Certificateholder at prices which will return to the Certificateholder an amount
in cash, net after deducting brokerage commissions, transfer taxes and other
charges, equal to or in excess of the Redemption Price for such Unit. The
Trustee will pay the net proceeds of any such sale to the Certificateholder on
the day he would otherwise be entitled to receive payment of the Redemption
Price.
The Trustee reserves the right to suspend the right of
redemption and to postpone the date of payment of the Redemption Price per Unit
for any period during which the New York Stock Exchange is closed, other than
customary weekend and holiday closings, or trading on that Exchange is
restricted or during which (as determined by the Securities and Exchange
Commission) an emergency exists as a result of which disposal or evaluation of
the Bonds is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit. The Trustee and the
Sponsor are not liable to any person or in any way for any loss or damage which
may result from any such suspension or postponement.
A Certificateholder who wishes to dispose of his Units should
inquire of his bank or broker in order to determine if there is a current
secondary market price in excess of the Redemption Price.
TOTAL REINVESTMENT PLAN
-----------------------
Under the Total Reinvestment Plan (the "Plan"), semi-annual
and annual Certificateholders may elect to have all regular interest and
principal distributions, if any, with respect to their Units reinvested either
in units of various series of "New York Municipal Trust"* which will have been
created shortly before each semi-annual or annual Payment Date (a "Primary
Series") or, if units of a Primary Series are not available, in units of a
previously
- --------
* Certificateholders of either Trust who participate in the Plan will
have reinvestments made in Units from a similar Trust if such Units are
available. If no such Units are available for reinvestment,
distributions to Certificateholders will be reinvested in Units of
regular series of Municipal Securities Trusts, the income earned on
which may not be exempt from state and local income taxes.
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<PAGE>
formed series of a Trust which have been repurchased by the Sponsor in the
secondary market or which constitute a portion of the Units of a Trust not sold
by the Sponsor prior to such Payment Date (a "Secondary Series") (Primary Series
and Secondary Series are hereafter collectively referred to as "Available
Series"). June 15 and December 15 of each year, in the case of semi-annual
Certificateholders, and December 15 of each year, in the case of annual
Certificateholders, are the "Plan Reinvestment Dates."
Under the Plan (subject to compliance with applicable blue sky
laws), fractional units ("Plan Units") will be purchased from the Sponsor at a
price equal to the aggregate offering price per Unit of the bonds in the
Available Series portfolio during the initial offering of the Available Series
or at the aggregate bid price per Unit of the Available Series if its initial
offering has been completed, plus a sales charge equal to 3.627% of the net
amount invested in such bonds or 3-1/2% of the Reinvestment Price per Plan Unit,
plus accrued interest, divided by one hundred (the "Reinvestment Price per Plan
Unit"). All Plan Units will be sold at this reduced sales charge of 3-1/2% in
comparison to the regular sales charge on primary and secondary market sales of
Units in any series of "New York Municipal Trust". Participants in the Plan will
have the opportunity to designate, in the Authorization Form for the Plan, the
name of a broker to whom the Sponsor will allocate a sales commission of 1-1/2%
per Plan Unit, payable out of the 3-1/2% sales charge. If no such designation is
made, the Sponsor will retain the sales commission.
Under the Plan, the entire amount of a participant's income
and principal distributions will be reinvested. For example, a Certificateholder
who is entitled to receive $130.50 interest income from a Trust would acquire
13.05 Plan Units assuming that the Reinvestment Price per Plan Unit, plus
accrued interest, approximated $10 (Ten Dollars).
A semi-annual or annual Certificateholder may join the Plan at
the time he invests in Units of a Trust or any time thereafter by delivering to
the Trustee an Authorization Form which is available from brokers or the
Sponsor. In order that distributions may be reinvested on a particular Plan
Reinvestment Date, the Authorization Form must be received by the Trustee not
later than the 15th day of the month preceding such Date. Authorization Forms
not received in time for a particular Plan Reinvestment Date will be valid only
for the second succeeding Plan Reinvestment Date. Similarly, a participant may
withdraw from the Plan at any time by notifying the Trustee (see below).
However, if written confirmation of withdrawal is not given to the Trustee prior
to a particular distribution, the participant will be deemed to have elected to
participate in the Plan with respect to that particular distribution and his
withdrawal would become effective for the next succeeding distribution.
Once delivered to the Trustee, an Authorization Form will
constitute a valid election to participate in the Plan with respect to Units
purchased in a Trust (and with respect to Plan Units purchased with the
distributions from the Units purchased in a Trust) for each subsequent
distribution as long as the Certificateholder continues to participate in the
Plan. However, if an Available Series should materially differ from a Trust in
the opinion of the Sponsor, the authorization will be voided and participants
will be provided with both a notice of the material change and a new
Authorization Form which would have to be returned to the Trustee before the
Certificateholder would again be able to participate in the Plan. The Sponsor
anticipates that a material difference which would result in a voided
authorization would include such facts as the inclusion of bonds in the
Available Series portfolio the interest income on which was not exempt from all
federal, New York State and New York City income tax, or the inclusion of bonds
which were not rated "A" or better by either Standard & Poor's
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<PAGE>
Corporation or Moody's Investors Service, Inc. on the date such bonds were
initially deposited in the Available Series portfolio.
The Sponsor has the option at any time to use units of a
Secondary Series to fulfill the requirements of the Plan in the event units of a
Primary Series are not available either because a Primary Series is not then in
existence or because the registration statement relating thereto is not declared
effective in sufficient time to distribute final prospectuses to Plan
participants (see below). It should be noted that there is no assurance that the
quality and diversification of the Bonds in any Available Series or the
estimated current return thereon will be similar to that of these Trusts.
It is the Sponsor's intention that Plan Units will be offered
on or about each semi-annual and annual Record Date for determining who is
eligible to receive distributions on the related Payment Date. Such Record Dates
are June 1 and December 1 of each year for semi-annual Certificateholders, and
December 1 of each year for annual Certificateholders. On each Record Date, the
Sponsor will send a current Prospectus relating to the Available Series being
offered for the next Plan Reinvestment Date along with a letter which reminds
each participant that Plan Units are being purchased for him as part of the Plan
unless he notifies the Trustee in writing by that Plan Reinvestment Date that he
no longer wishes to participate in the Plan. In the event a Primary Series has
not been declared effective in sufficient time to distribute a final Prospectus
relating thereto and there is no Secondary Series as to which a registration
statement is currently effective, it is the Sponsor's intention to suspend the
Plan and distribute to each participant his regular semi-annual or annual
distribution. If the Plan is so suspended, it will resume in effect with the
next Plan Reinvestment Date assuming units of an Available Series are then being
offered.
To aid a participant who might desire to withdraw either from
the Plan or from a particular distribution, the Trustee has established a toll
free number (see below) for participants to use for notification of withdrawal,
which must be confirmed in writing prior to the Plan Reinvestment Date. Should
the Trustee be so notified, it will make the appropriate cash disbursement.
Unless the withdrawing participant specifically indicates in his written
confirmation that (a) he wishes to withdraw from the Plan for that particular
distribution only, or (b) he wishes to withdraw from the Plan for less than all
units of each series of "New York Municipal Trust" which he might then own (and
specifically identifies which series are to continue in the Plan), he will be
deemed to have withdrawn completely from the Plan in all respects. Once a
participant withdraws completely, he will only be allowed to again participate
in the Plan by submitting a new Authorization Form. A sale or redemption of a
portion of a participant's Plan Units will not constitute a withdrawal from the
Plan with respect to the remaining Plan Units owned by such participant.
Unless a Certificateholder notifies the Trustee in writing to
the contrary, each semi-annual and annual Certificateholder who has acquired
Plan Units will be deemed to have elected the semi-annual and annual plan of
distribution, respectively, and to participate in the Plan with respect to
distributions made in connection with such Plan Units. (Should the Available
Series from which Plan Units are purchased for the account of an annual
Certificateholder fail to have an annual distribution plan, such
Certificateholder will be deemed to have elected the semi-annual plan of
distribution, and to participate in the Plan with respect to distributions made
in connection with such Plan Units.) A participant who subsequently desires to
have distributions made with respect to Plan Units delivered to him in cash may
withdraw from the Plan with respect to such Plan Units and remain in the Plan
with respect to units acquired other than through the Plan. Assuming a
participant has his distributions made with respect to Plan Units reinvested,
all such distributions will be accumulated with distributions generated from
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<PAGE>
the Units of a Trust used to purchase such additional Plan Units. However,
distributions related to units in other series of "New York Municipal Trust"
will not be accumulated with the foregoing distributions for Plan purchases.
Thus, if a person owns units in more than one series of "New York Municipal
Trust" (which are not the result of purchases under the Plan), distributions
with respect thereto will not be aggregated for purchases under the Plan.
Although not obligated to do so, the Sponsor has maintained
and intends to continue to maintain a market for the Plan Units and continuously
to offer to purchase Plan Units at prices based upon the aggregate offering
price of the bonds in the Available Series portfolio, during the initial
offering of the Available Series, or at the aggregate bid price of the Bonds in
the Available Series if its initial offering has been completed. The Sponsor may
discontinue such purchases at any time. The aggregate bid price of the
underlying bonds may be expected to be less than the aggregate offering prices.
In the event that a market is not maintained for Plan Units, a participant
desiring to dispose of his Plan Units may be able to do so only by tendering
such Plan Units to the Trustee for redemption at the Redemption Price of full
units in the Available Series corresponding to such Plan Units, which is based
upon the aggregate bid price of the underlying bonds as described in the "New
York Municipal Trust" Prospectus for the Available Series in question. If a
participant wishes to dispose of his Plan Units, he should inquire of the
Sponsor as to current market prices prior to making a tender for redemption to
the Trustee.
Any participant may tender his Plan Units for redemption to
the Available Series trustee. Participants may redeem Plan Units by making a
written request to the Trustee at the address set forth in Part A, on the
Redemption Form supplied by the Trustee. The redemption price per Plan Unit will
be determined as set forth in the "New York Municipal Trust" Prospectus of the
Available Series from which such Plan Unit was purchased following receipt of
the request and adjusted to reflect the fact that it relates to a Plan Unit.
There is no charge for the redemption of Plan Units.
The Trust Agreement requires that the Trustee notify the
Sponsor of any tender of Plan Units for redemption. So long as the Sponsor is
maintaining a bid in the secondary market, the Sponsor will purchase any Plan
Units tendered to the Trustee for redemption by making payment therefor to the
Certificateholder in an amount not less than the redemption price for such Plan
Units on the date of tender not later than the day on which such Plan Units
would otherwise have been redeemed by the Trustee.
Participants in the Plan will not receive individual
certificates for their Plan Units unless the amount of Plan Units accumulated
represents $1,000 principal amount of bonds underlying such Units and, in such
case, a written request for certificates is made to the Trustee. All Plan Units
will be accounted for by the Trustee on a book entry system. Each time Plan
Units are purchased under the Plan, a participant will receive a confirmation
stating his cost, number of Units purchased and estimated current return.
Questions regarding a participant's statement should be directed to the Trustee
at the telephone number set forth in the "Summary of Essential Information" in
Part A.
All expenses relating to the operation of the Plan are borne
by the Sponsor. Both the Sponsor and the Trustee reserve the right to suspend,
modify or terminate the Plan at any time for any reason, including the right to
suspend the Plan if the Sponsor is unable or unwilling to establish a Primary
Series or is unable to provide Secondary Series units. All participants will
receive notice of any such suspension, modification or termination.
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<PAGE>
TRUST ADMINISTRATION
--------------------
PORTFOLIO SUPERVISION. The Sponsor may direct the Trustee to
dispose of Bonds upon (i) default in payment of principal or interest on such
Bonds, (ii) institution of certain legal proceedings with respect to the issuers
of such Bonds, (iii) default under other documents adversely affecting debt
service on such Bonds, (iv) default in payment of principal or interest on other
obligations of the same issuer or guarantor, (v) with respect to revenue Bonds,
decline in revenues and income of any facility or project below the estimated
levels calculated by proper officials charged with the construction or operation
of such facility or project, or (vi) decline in price or the occurrence of other
market or credit factors which in the opinion of the Sponsor would make the
retention of such Bonds in a Trust detrimental to the interests of the
Certificateholders. If a default in the payment of principal or interest on any
of the Bonds occurs and if the Sponsor fails to instruct the Trustee to sell or
hold such Bonds, the Trust Agreement provides that the Trustee may sell such
Bonds.
The Sponsor is authorized by the Trust Agreement to direct the
Trustee to accept or reject certain plans for the refunding or refinancing of
any of the Bonds. Any bonds received in exchange or substitution will be held by
the Trustee subject to the terms and conditions of the Agreement to the same
extent as the Bonds originally deposited. Within five days after such deposit,
notice of such exchange and deposit shall be given by the Trustee to each
Certificateholder registered on the books of the Trustee, including an
identification of the Bonds eliminated and the Bonds substituted therefor.
Except as stated, the acquisition by the Trusts of any securities other than the
bonds initially deposited is prohibited.
TRUST AGREEMENT, AMENDMENT AND TERMINATION. The Trust
Agreement may be amended by the Trustee, the Sponsor and the Evaluator without
the consent of any of the Certificateholders: (1) to cure any ambiguity or to
correct or supplement any provision which may be defective or inconsistent; (2)
to change any provision thereof as may be required by the Securities and
Exchange Commission or any successor governmental agency; or (3) to make such
other provisions in regard to matters arising thereunder as shall not adversely
affect the interests of the Certificateholders.
The Trust Agreement may also be amended in any respect, or
performance of any of the provisions thereof may be waived, with the consent of
the holders of Certificates evidencing 66-2/3% of the Units then outstanding for
the purpose of modifying the rights of Certificateholders; provided that no such
amendment or waiver shall reduce any Certificateholder's interest in a Trust
without his consent or reduce the percentage of Units required to consent to any
such amendment or waiver without the consent of the holders of all Certificates.
The Trust Agreement may not be amended, without the consent of the holders of
all Certificates in a Trust then outstanding, to increase the number of Units
issuable by such Trust or to permit the acquisition of any bonds in addition to
or in substitution for those initially deposited in such Trust, except in
accordance with the provisions of the Trust Agreement. The Trustee shall
promptly notify Certificateholders, in writing, of the substance of any such
amendment.
The Trust Agreement provides that the Trust shall terminate
upon the maturity, redemption or other disposition, as the case may be, of the
last of the Bonds held in such Trust but in no event is it to continue beyond
the end of the calendar year preceding the fiftieth anniversary of the execution
of the Trust Agreement. If the value of a Trust shall be less than the minimum
amount set forth under "Summary of Essential Information", the Trustee may, in
its discretion, and shall, when so directed by the Sponsor, terminate such
Trust. The Trust may also be terminated at any time with the consent of
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the holders of Certificates representing 100% of the Units of such Trust then
outstanding. In the event of termination, written notice thereof will be sent by
the Trustee to all Certificateholders. Within a reasonable period after
termination, the Trustee must sell any Bonds remaining in the terminated Trust,
and, after paying all expenses and charges incurred by such Trust, distribute to
each Certificateholder, upon surrender for cancellation of his Certificate for
Units his pro rata share of the Interest and Principal Accounts of such Trust.
THE SPONSOR. The Sponsor, Reich & Tang Distributors L.P.
("Reich & Tang") is engaged in the brokerage business and is a member of the
National Association of Securities Dealers, Inc. Reich & Tang is also a
registered investment adviser. Reich & Tang maintains its principal business
offices at 600 Fifth Avenue, New York, New York 10020. Reich & Tang Asset
Management L.P. ("RTAM LP"), a registered investment adviser, having its
principal place of business at 399 Boylston Street, Boston, MA 02116, is the 99%
limited partner of the Sponsor. RTAM LP is 99.5% owned by New England Investment
Companies, LP ("NEIC LP") and Reich & Tang Asset Management, Inc., a wholly
owned subsidiary of NEIC LP, owns the remaining .5% interest of RTAM LP and is
its general partner. NEIC LP's general partner is New England Investment
Companies, Inc. ("NEIC"), a holding company offering a broad array of investment
styles across a wide range of asset categories through eleven subsidiaries,
divisions and affiliates offering a wide array of investment styles and products
to institutional clients. These affiliates in the aggregate are investment
advisers or managers to over 54 registered investment companies. Reich & Tang is
the successor sponsor for numerous series of unit investment trusts, including,
New York Municipal Trust, Series 1 (and Subsequent Series), Municipal Securities
Trust, Series 1 (and Subsequent Series), 1st Discount Series (and Subsequent
Series), Multi-State Series 1 (and Subsequent Series), Mortgage Securities
Trust, Series 1 (and Subsequent Series), Insured Municipal Securities Trust,
Series 1 (and Subsequent Series), 5th Discount Series (and Subsequent Series),
and Equity Securities Trust, Series 1, Signature Series, Gabelli Communications
Income Trust (and Subsequent Series). The information included herein is only
for the purpose of informing investors as to the financial responsibility of the
Sponsor and its ability to carry out its contractual obligations.
On August 30, 1996, of New England Mutual Life Insurance
Company ("The New England") and Metropolitan Life Insurance Company ("MetLife")
merged, with MetLife being the continuing company. RTAM L.P. remains a
wholly-owned subsidiary of NEIC LP, but RTAM Inc., its sole general partner, is
now an indirect subsidiary of MetLife. Also, Metlife New England Holdings, Inc.,
a wholly-owned subsidiary of MetLife, owns 55% of the outstanding limited
partnership interest of NEIC L.P., also indirectly owns a majority of the
outstanding limited partnership interest of NEIC LP.
MetLife is a mutual life insurance company with assets of
$142.2 billion at March 31, 1996. It is the second largest life insurance
company in the United States in terms of total assets. MetLife provides a wide
range of insurance and investment products and services to individuals and
groups and is the leader among United States life insurance companies in terms
of total life insurance in force, which exceeded $1.2 trillion at March 31, 1996
for MetLife and its insurance affiliates. MetLife and its affiliates provide
insurance or other financial services to approximately 36 million people
worldwide.
The Sponsor is liable for the performance of its obligations
arising from its responsibilities under the Trust Agreement, but will be under
no liability to Certificateholders for taking any action, or refraining from
taking any action, in good faith pursuant to the Trust Agreement, or for errors
in judgment except in cases of its own willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
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The Sponsor may resign at any time by delivering to the
Trustee an instrument of resignation executed by the Sponsor.
If at any time the Sponsor shall resign or fail to perform any
of its duties under the Trust Agreement or becomes incapable of acting or
becomes bankrupt or its affairs are taken over by public authorities, then the
Trustee may either (a) appoint a successor Sponsor, (b) terminate the Trust
Agreement and liquidate the Trusts, or (c) continue to act as Trustee without
terminating the Trust Agreement. Any successor Sponsor appointed by the Trustee
shall be satisfactory to the Trustee and, at the time of appointment, shall have
a net worth of at least $1,000,000.
THE TRUSTEE. The Trustee is The Bank of New York, a trust
company organized under the laws of New York, having its offices at 101 Barclay
Street, New York, New York 10286 (1-800-431-8002). The Bank of New York is
subject to supervision and examination by the Superintendent of Banks of the
State of New York and the Board of Governors of the Federal Reserve System, and
its deposits are insured by the Federal Deposit Insurance Corporation to the
extent permitted by law. The Trustee must be a banking corporation organized
under the laws of the United States or any state which is authorized under such
laws to exercise corporate trust powers and must have at all times an aggregate
capital, surplus and undivided profits of not less than $5,000,000. The duties
of the Trustee are primarily ministerial in nature. The Trustee did not
participate in the selection of Securities for the portfolio of the Trust.
The Trustee shall not be liable or responsible in any way for
taking any action or for refraining from taking any action, in good faith
pursuant to the Trust Agreement, or for errors in judgment; or for any
disposition of any moneys, Bonds or Certificates in accordance with the Trust
Agreement, except in cases of its own willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties; provided,
however, that the Trustee shall not in any event be liable or responsible for
any evaluation made by the Evaluator. In addition, the Trustee shall not be
liable for any taxes or other governmental charges imposed upon or in respect of
the Bonds or the Trusts which it may be required to pay under current or future
law of the United States or any other taxing authority having jurisdiction. The
Trustee shall not be liable for depreciation or loss incurred by reason of the
sale by the Trustee of any of the Bonds pursuant to the Trust Agreement.
For further information relating to the responsibilities of
the Trustee under the Trust Agreement, see "Rights of Certificateholders."
The Trustee may resign by executing an instrument in writing
and filing the same with the Sponsor, and mailing a copy of a notice of
resignation to all Certificateholders. In such an event, the Sponsor is
obligated to appoint a successor Trustee as soon as possible. In addition, if
the Trustee becomes incapable of acting or becomes bankrupt or its affairs are
taken over by public authorities, the Sponsor may remove the Trustee and appoint
a successor as provided in the Trust Agreement. Notice of such removal and
appointment shall be mailed to each Certificateholder by the Sponsor. If upon
resignation of the Trustee no successor has been appointed and has accepted the
appointment within thirty days after notification, the retiring Trustee may
apply to a court of competent jurisdiction for the appointment of a successor.
The resignation or removal of the Trustee becomes effective only when the
successor Trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor Trustee. Upon execution of a written
acceptance of such appointment by such successor Trustee, all the rights,
powers, duties and obligations of the original Trustee shall vest in the
successor.
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Any corporation into which the Trustee may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Trustee shall be a party, shall be the successor
Trustee. The Trustee must always be a banking corporation organized under the
laws of the United States or any State and have at all times an aggregate
capital, surplus and undivided profits of not less than $2,500,000.
THE EVALUATOR. The Evaluator is Kenny S&P Evaluation Services,
a business unit of J.J. Kenny Company, Inc., a subsidiary of The McGraw-Hill
Companies, with main offices located at 65 Broadway, New York, New York 10006.
The Evaluator is a wholly-owned subsidiary of McGraw-Hill, Inc. The Evaluator is
a registered investment advisor and also provides financial information
services.
The Trustee, the Sponsor and Certificateholders may rely on
any evaluation furnished by the Evaluator and shall have no responsibility for
the accuracy thereof. Determinations by the Evaluator under the Trust Agreement
shall be made in good faith upon the basis of the best information available to
it; provided, however, that the Evaluator shall be under no liability to the
Trustee, the Sponsor, or Certificateholders for errors in judgment, except in
cases of its own willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties.
The Evaluator may resign or may be removed by the Sponsor and
the Trustee, and the Sponsor and the Trustee are to use their best efforts to
appoint a satisfactory successor. Such resignation or removal shall become
effective upon the acceptance of appointment by the successor Evaluator. If upon
resignation of the Evaluator no successor has accepted appointment within thirty
days after notice of resignation, the Evaluator may apply to a court of
competent jurisdiction for the appointment of a successor.
TRUST EXPENSES AND CHARGES
--------------------------
At no cost to the Trust, the Sponsor has borne the expenses of
creating and establishing the Trust, including the cost of initial preparation
and execution of the Trust Agreement, registration of the Trust and the Units
under the Investment Company Act of 1940 and the Securities Act of 1933,
preparation and printing of the Certificates, legal and auditing expenses,
advertising and selling expenses, initial fees and expenses of the Trustee and
other out-of-pocket expenses. The fees of the Evaluator, however, incurred
during the initial public offering period are paid directly by the Trust.
The Sponsor will not charge the Trust a fee for its services
as such. (See "Sponsor's Profits".)
The Trustee will receive for its ordinary recurring services
to each Trust an annual fee in the amount set forth under "Summary of Essential
Information" in Part A. For a discussion of the services performed by the
Trustee pursuant to its obligations under the Trust Agreement, see "Trust
Administration" and "Rights of Certificateholders".
The Evaluator will receive, for each daily evaluation of the
Bonds in the Trusts, a fee in the amount set forth under "Summary of Essential
Information" in Part A.
The Trustee's and Evaluator's fees are payable monthly as of
the Record Date from the Interest Account to the extent funds are available and
then from the Principal Account. Both fees may be increased without approval of
the Certificateholders by amounts not exceeding proportionate increases in
consumer prices for services as measured by the United States Department of
Labor's Consumer Price Index entitled "All Services Less Rent."
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The following additional charges are or may be incurred by the
Trust: all expenses (including counsel and auditing fees) of the Trustee
incurred and advances made in connection with its activities under the Trust
Agreement, including the expenses and costs of any action undertaken by the
Trustee to protect a Trust and the rights and interests of the
Certificateholders; fees of the Trustee for any extraordinary services performed
under the Trust Agreement; indemnification of the Trustee for any loss or
liability accruing to it without gross negligence, bad faith or willful
misconduct on its part, arising out of or in connection with its acceptance or
administration of a Trust; indemnification of the Sponsor for any loss,
liabilities and expenses incurred in acting as Sponsor of a Trust without gross
negligence, bad faith or willful misconduct on its part; and all taxes and other
governmental charges imposed upon the Bonds or any part of a Trust (no such
taxes or charges are being levied, made or, to the knowledge of the Sponsor,
contemplated). The above expenses, including the Trustee's fees, when paid by or
owing to the Trustee are secured by a first lien on the Trust to which such
expenses are allowable. In addition, the Trustee is empowered to sell Bonds of a
Trust in order to make funds available to pay all expenses of such Trust.
Unless the Sponsor otherwise directs, the accounts of the
Trust shall be audited not less than annually by independent public accountants
selected by the Sponsor. The expenses of the audit shall be an expense of the
Trust. So long as the Sponsor maintains a secondary market, the Sponsor will
bear any audit expense which exceeds $.50 per 1,000 Units. Certificateholders
covered by the audit during the year may receive a copy of the audited
financials upon request.
EXCHANGE PRIVILEGE AND CONVERSION OFFER
---------------------------------------
EXCHANGE PRIVILEGE. Certificateholders will be able to elect
to exchange any or all of their Units of this Trust for Units of one or more of
any available series of Equity Securities Trust, Insured Municipal Securities
Trust, Municipal Securities Trust, New York Municipal Trust or Mortgage
Securities Trust (the "Exchange Trusts") at a reduced sales charge as set forth
below. Under the Exchange Privilege, the Sponsor's repurchase price during the
initial offering period of the Units being surrendered will be based on the
market value of the Securities in the Trust portfolio or on the aggregate offer
price of the Bonds in the other Trust Portfolios; and, after the initial
offering period has been completed, will be based on the aggregate bid price of
the Bonds in the particular Trust portfolio. Units in an Exchange Trust then
will be sold to the Certificateholder at a price based on the aggregate offer
price of the Bonds in the Exchange Trust portfolio (or for units of Equity
Securities Trust, based on the market value of the underlying securities in the
Trust portfolio) during the initial public offering period of the Exchange
Trust; and after the initial public offering period has been completed, based on
the aggregate bid price of the Bonds in the Exchange Trust Portfolio if its
initial offering has been completed plus accrued interest (or for units of
Equity Securities Trust, based on the market value of the underlying securities
in the Trust portfolio) and a reduced sales charge as set forth below.
Except for Certificateholders who wish to exercise the
Exchange Privilege within the first five months of their purchase of Units of
the Trust, any purchaser who purchases Units under the Exchange Privilege will
pay a lower sales charge than that which would be paid for the Units by a new
investor. For Certificateholders who wish to exercise the Exchange Privilege
within the first five months of their purchase of Units of the Trust, the sales
charge applicable to the purchase of units of an Exchange Trust shall be the
greater of (i) the reduced sales charge or (ii) an amount which when
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coupled with the sales charge paid by the Certificateholder upon his original
purchase of Units of the Trust would equal the sales charge applicable in the
direct purchase of units of an Exchange Trust.
Exercise of the Exchange Privilege by Certificateholders is
subject to the following conditions (i) the Sponsor must be maintaining a
secondary market in the units of the available Exchange Trust, (ii) at the time
of the Certificateholder's election to participate in the Exchange Privilege,
there must be units of the Exchange Trust available for sale, either under the
initial primary distribution or in the Sponsor's secondary market, (iii)
exchanges will be effected in whole units only, (iv) Units of the Mortgage
Securities Trust may only be acquired in blocks of 1,000 Units and (v) Units of
the Equity Securities Trust may only be acquired in blocks of 100 Units.
Certificateholders will not be permitted to advance any funds in excess of their
redemption in order to complete the exchange. Any excess proceeds received from
a Certificateholder for exchange will be remitted to such Certificateholder.
The Sponsor reserves the right to suspend, modify or terminate
the Exchange Privilege. The Sponsor will provide Certificateholders of the Trust
with 60 days' prior written notice of any termination or material amendment to
the Exchange Privilege, provided that, no notice need be given if (i) the only
material effect of an amendment is to reduce or eliminate the sales charge
payable at the time of the exchange, to add one or more series of the Trust
eligible for the Exchange Privilege or to delete a series which has been
terminated from eligibility for the Exchange Privilege, (ii) there is a
suspension of the redemption of units of an Exchange Trust under Section 22(e)
of the Investment Company Act of 1940, or (iii) an Exchange Trust temporarily
delays or ceases the sale of its units because it is unable to invest amounts
effectively in accordance with its investment objectives, policies and
restrictions. During the 60-day notice period prior to the termination or
material amendment of the Exchange Privilege described above, the Sponsor will
continue to maintain a secondary market in the units of all Exchange Trusts that
could be acquired by the affected Certificateholders. Certificateholders may,
during this 60-day period, exercise the Exchange Privilege in accordance with
its terms then in effect.
To exercise the Exchange Privilege, a Certificateholder should
notify the Sponsor of his desire to exercise his Exchange Privilege. If Units of
a designated, outstanding series of an Exchange Trust are at the time available
for sale and such Units may lawfully be sold in the state in which the
Certificateholder is a resident, the Certificateholder will be provided with a
current prospectus or prospectuses relating to each Exchange Trust in which he
indicates an interest. He may then select the Trust or Trusts into which he
desires to invest the proceeds from his sale of Units. The exchange transaction
will operate in a manner essentially identical to a secondary market transaction
except that units may be purchased at a reduced sales charge.
THE CONVERSION OFFER. Unit owners of any registered unit
investment trust for which there is no active secondary market in the units of
such trust (a "Redemption Trust") will be able to elect to redeem such units and
apply the proceeds of the redemption to the purchase of available Units of one
or more series of Municipal Securities Trust, Insured Municipal Securities
Trust, Mortgage Securities Trust, New York Municipal Trust or Equity Securities
Trust (the "Conversion Trusts") at the Public Offering Price for units of the
Conversion Trust based on a reduced sales charge as set forth below. Under the
Conversion Offer, units of the Redemption Trust must be tendered to the trustee
of such trust for redemption at the redemption price determined as set forth in
the relevant Redemption Trust's prospectus. The purchase price of the units will
be based on the aggregate offer price of the in the Conversion Trust's portfolio
securities during its initial offering
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period; or, at a price based on the aggregate bid price of the underlying bonds
if the initial public offering of the Conversion Trust has been completed, plus
accrued interest and a sales charge as set forth below. If the participant
elects to purchase units of the Equity Securities Trust under the Conversion
Offer, the purchase price of the units will be based, at all times, on the
market value of the underlying securities in the Trust portfolio plus a sales
charge.
Except for Certificateholders who wish to exercise the
Conversion Offer within the first five months of their purchase of units of a
Redemption Trust, any Certificateholder who purchases Units under the Conversion
Offer will pay a lower sales charge than that which would be paid for the Units
by a new investor. For Certificateholders who wish to exercise the Conversion
Offer within the first five months of their purchase of units of Redemption
Trust, the sales charge applicable to the purchase of Units of a Conversion
Trust shall be the greater of (i) the reduced sales charge or (ii) an amount
which when coupled with the sales charge paid by the Certificateholder upon his
original purchase of units of the Redemption Trust would equal the sales charge
applicable in the direct purchase of Units of a Conversion Trust.
The exercise of the Conversion Offer is subject to the
following limitations: (i) the Conversion Offer is limited only to unit owners
of any Redemption Trust, (ii) at the time of the unit owner's election to
participate in the Conversion Offer, there also must be available units of a
Conversion Trust, either under a primary distribution or in the Sponsor's
secondary market, (iii) exchanges under the Conversion Offer will be effected in
whole units only, (iv) units of the Mortgage Securities Trust may only be
acquired in blocks of 1,000 units, (v) units of the Equity Securities Trust may
only be acquired in blocks of 100 Units. Unit owners will not be permitted to
advance any new funds in order to complete an exchange under the Conversion
Offer. Any excess proceeds from units being redeemed will be returned to the
unit owner.
The Sponsor reserves the right to modify, suspend or terminate
the Conversion Offer. The Sponsor will provide Certificateholders with 60 days
prior written notice of any termination or material amendment to the Conversion
Offer, provided that, no notice need be given if (i) the only material effect of
an amendment is to reduce or eliminate the sales charge payable at the time of
the exchange, to add one or more series of the Trusts eligible for the
Conversion Offer, to add any new unit investment trust sponsored by Reich & Tang
or a sponsor controlled by or under common control with Reich & Tang, or to
delete a series which has been terminated from eligibility for the Conversion
Offer, (ii) there is a suspension of the redemption of units of a Conversion
Trust under Section 22(e) of the Act, or (iii) a Conversion Trust temporarily
delays or ceases the sale of its units because it is unable to invest amounts
effectively in accordance with its investment objectives, policies and
restrictions.
To exercise the Conversion Offer, a unit owner of a Redemption
Trust should notify his retail broker of his desire to redeem his Redemption
Trust Units and use the proceeds from the redemption to purchase Units of one or
more of the Conversion Trusts. If Units of a designated, outstanding series of a
Conversion Trust are at that time available for sale and if such Units may
lawfully be sold in the state in which the unit owner is a resident, the unit
owner will be provided with a current prospectus or prospectuses relating to
each Conversion Trust in which he indicates an interest. He then may select the
Trust or Trusts into which he decides to invest the proceeds from the sale of
his Units. The transaction will be handled entirely through the unit owner's
retail broker. The retail broker must tender the units to the trustee of the
Redemption Trust for redemption and then apply the proceeds to the redemption
toward the purchase of units of a Conversion Trust at a price based on the
aggregate offer or bid side evaluation per Unit of the
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Conversion Trust, depending on which price is applicable, plus accrued interest
and the applicable sales charge. The certificates must be surrendered to the
broker at the time the redemption order is placed and the broker must specify to
the Sponsor that the purchase of Conversion Trust Units is being made pursuant
to the Conversion Offer. The unit owner's broker will be entitled to retain a
portion of the sales charge.
DESCRIPTION OF THE EXCHANGE TRUSTS AND THE CONVERSION TRUSTS.
Municipal Securities Trust and New York Municipal Trust may be appropriate
investment vehicles for an investor who is more interested in tax-exempt income.
The interest income from New York Municipal Trust is, in general, also exempt
from New York State and local New York income taxes, while the interest income
from Municipal Securities Trust is subject to applicable New York State and
local New York income taxes, except for that portion of the income which is
attributable to New York obligations in the Trust portfolio, if any. The
interest income from each State Trust of the Multi-State Series is, in general,
exempt from state and local taxes when held by residents of the state where
issuers of bonds in such State Trusts are located. The Insured Municipal
Securities Trust combines the advantages of income free from regular federal
income tax with the added safety of irrevocable insurance on the underlying
obligations. Insured Navigator Series further combines the advantages of
providing interest income free from regular federal income tax and sate and
local taxes when held by residents of the state where issuers of bonds in such
state trusts are located with the added safety of irrevocable insurance on the
underlying obligations. Mortgage Securities Trust offers an investment vehicle
for investors who are interested in obtaining safety of capital and a high level
of current distribution of interest income through investment in a fixed
portfolio of collaterized mortgage obligations. Equity Securities Trust offers
investors an opportunity to achieve capital appreciation together with a high
level of current income.
TAX CONSEQUENCES OF THE EXCHANGE PRIVILEGE AND THE CONVERSION
OFFER. A surrender of units pursuant to the Exchange Privilege or the Conversion
Offer normally will constitute a "taxable event" to the Certificateholder under
the Code. The Certificateholder will recognize a tax gain or loss that will be
of a long- or short-term capital or ordinary income nature depending on the
length of time the units have been held and other factors. A Certificateholder's
tax basis in the Units acquired pursuant to the Exchange Privilege or Conversion
Offer will be equal to the purchase price of such Units. Investors should
consult their own tax advisors as to the tax consequences to them of exchanging
or redeeming units and participating in the Exchange Privilege or Conversion
Offer.
OTHER MATTERS
-------------
LEGAL OPINIONS. The legality of the Units originally offered
and certain matters relating to federal tax law have been passed upon by Battle
Fowler LLP, 75 East 55th Street, New York, New York 10022, or Berger Steingut
Tarnoff & Stern, 600 Madison Avenue, New York, New York 10022, as counsel for
the Sponsor. Carter, Ledyard & Milburn, Two Wall Street, New York, New York
10005 have acted as counsel for The Chase Manhattan Bank. On the initial date of
deposit, Booth & Baron acted as counsel for The Bank of New York.
INDEPENDENT ACCOUNTANTS. The financial statements of the
Trusts for the year ended December 31, 1996 included in Part A of this
Prospectus have been examined by Price Waterhouse LLP, independent accountants.
The financial statements have been so included in reliance on their report given
upon the authority of said firm as experts in accounting and auditing. KPMG Peat
Marwick LLP has consented to the incorporation by reference of their report on
the statements of operations and changes in net assets for the
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Trusts included in Part A of this Prospectus for the periods ended December 31,
1994 and December 31, 1995, respectively.
DESCRIPTION OF BOND RATINGS*
---------------------------
STANDARD & POOR'S. A brief description of the applicable
Standard & Poor's rating symbols and their meanings is as follows:
A Standard & Poor's corporate or municipal bond rating is a
current assessment of the creditworthiness of an obligor with respect to a
specific debt obligation. This assessment of creditworthiness may take into
consideration obligors such as guarantors, insurers, or lessees.
The bond rating is not a recommendation to purchase or sell a
security, inasmuch as it does not comment as to market price.
The ratings are based on current information furnished to
Standard & Poor's by the issuer and obtained by Standard & Poor's from other
sources it considers reliable. The ratings may be changed, suspended or
withdrawn as a result of changes in, or unavailability of, such information.
The ratings are based, in varying degrees, on the following
considerations:
(a) Likelihood of default--capacity and willingness of the
obligor as to the timely payment of interest and repayment of principal
in accordance with the terms of the obligation.
(b) Nature of and provisions of the obligation.
(c) Protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA -- This is the highest rating assigned by Standard &
Poor's to a debt obligation and indicates an extremely strong capacity to pay
principal and interest.
AA -- Bonds rated AA also qualify as high-quality debt
obligations. Capacity to pay principal and interest is very strong, and they
differ from AAA issues only in small degrees.
A -- Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.
BBB -- Bonds rated BBB are regarded as having an adequate
capacity to pay principal and interest. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay principal and interest for
bonds in this category than for bonds in the A category.
Plus (+) or Minus (-): To provide more detailed indications of
credit quality, the ratings from "AA" to "BB" may be modified by the addition of
a plus or minus sign to show relative standing within the major rating
categories.
- --------
* As described by the rating agencies.
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Provisional Ratings -- (Prov.) following a rating indicates
the rating is provisional, which assumes the successful completion of the
project being financed by the issuance of the bonds being rated and indicates
that payment of debt service requirements is largely or entirely dependent upon
the successful and timely completion of the project. This rating, however, while
addressing credit quality subsequent to completion, makes no comment on the
likelihood of, or the risk of default upon failure of, such completion.
Accordingly, the investor should exercise his own judgment with respect to such
likelihood and risk.
MOODY'S. A brief description of the applicable Moody's rating
symbols and their meanings is as follows:
Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edge". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high
quality by all standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may be
other elements present which make the long term risks appear somewhat larger
than in Aaa securities.
A -- Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment sometime in the
future.
Baa -- Bonds which are rated Baa are considered as medium
grade obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Those bonds in the A and Baa group which Moody's believes
possess the strongest investment attributes are designated by the symbol A 1 and
Baa 1. Other A bonds comprise the balance of the group. These rankings (1)
designate the bonds which offer the maximum in security within their quality
group, (2) designate bonds which can be bought for possible upgrading in quality
and (3) additionally afford the investor an opportunity to gauge more precisely
the relative attractiveness of offerings in the market place.
Moody's applies numerical modifiers, 1, 2, and 3 in each
generic rating classification from Aa through B in its corporate bond rating
system. The modifier 1 indicates that the security ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its generic
rating category.
Con-Bonds for which the security depends upon the completion
of some act or the fulfillment of some condition are rated conditionally. These
are debt obligations secured by (a) earnings of projects under construction, (b)
earnings of projects unseasoned in operating experience, (c) rentals which begin
when facilities are completed, or (d) payments to which some other
-39-
1653.3
<PAGE>
limiting condition attaches. Rating denotes probable credit stature upon
completion of construction or elimination of basis of condition.
-40-
1653.3
<PAGE>
==============================================================================
AUTHORIZATION FOR INVESTMENT IN NEW YORK MUNICIPAL TRUST
TRP PLAN - TOTAL REINVESTMENT PLAN
I hereby elect to participate in the TRP Plan and am the owner of ____ units of
Series ____.
I hereby authorize The Bank of New York, Trustee, to pay all semi-annual or
annual distributions of interest and principal (if any) with respect to such
units to The Bank of New York, as TRP Plan Agent, who shall immediately invest
the distributions in units of the available series of New York Municipal Trust
or, if unavailable, of other available series of regular Municipal Securities
Trust.
The foregoing authorization is subject Date ______________, 19__
in all respects to the terms and
conditions of participation set forth
in the prospectus relating to such
available series.
- -------------------------------------- ------------------------------------
Registered Holder (print) Registered Holder (print)
- -------------------------------------- ------------------------------------
Registered Holder Signature Registered Holder Signature
(Two signatures if joint tenancy)
My Brokerage Firm's Name ____________________________________________________
Street Address ______________________________________________________________
City, State & Zip Code ______________________________________________________
Salesman's Name ______________________ Salesman's No. _____________________
UNIT HOLDERS NEED ONLY DATE AND SIGN THIS FORM AND MAIL THIS CARD.
==============================================================================
Mail to your Broker
or
The Bank of New York
101 Barclay Street
New York, New York 10286
1653.3
<PAGE>
<TABLE>
<CAPTION>
INDEX
-----
<S> <C>
Title Page NEW YORK MUNICIPAL TRUST
- ----- ----
Summary of Essential Information............................... A-4
Financial and Statistical Information.......................... A-5
Information Regarding the Trust................................ A-6 (A Unit Investment Trust)
Audit and Financial Information............................... F-1
The Trust...................................................... 1 Prospectus
----------
Portfolios..................................................... 2
Special Factors Affecting New York............................. 7 Dated: April 30, 1997
Public Offering................................................ 16
Estimated Long Term Return and Estimated Sponsor:
Current Return............................................... 18
Rights of Certificateholders................................... 18 Reich & Tang Distributors, L.P.
Tax Status..................................................... 20 600 Fifth Avenue
Liquidity...................................................... 24 New York, NY 10020
Total Reinvestment Plan........................................ 26 212-830-5200
Trust Administration........................................... 30
Trust Expenses and Charges..................................... 33
Exchange Privilege and Conversion Offer........................ 34 Trustee:
Other Matters.................................................. 37
Description of Bond Ratings.................................... 38 The Bank of New York
101 Barclay Street
New York, NY 10286
Parts A and B of this Prospectus do not 1-800-431-8002 contain all of the
information set forth in the registration statement and exhibits relating
thereto, filed with the Securities Evaluator:
and Exchange Commission, Washington, D.C.,
under the Securities Act of 1933, and to which Kenny S&P Evaluation Services
reference is made. 65 Broadway
New York, NY 10006
</TABLE>
* * *
This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in any state to any person to whom
it is not lawful to make such offer in such state.
No person is authorized to give any information or to make any
representations not contained in Parts A and B in this Prospectus; and any
information or representation not contained herein must not be relied upon as
having been authorized by the Trust, the Trustee, the Evaluator, or the Sponsor.
The Trust is registered as a unit investment trust under the Investment Company
Act of 1940. Such registration does not imply that the Trust or any of its Units
have been guaranteed, sponsored, recommended or approved by the United States or
any state or any agency or officer thereof.
1653.3
PART II
ADDITIONAL INFORMATION NOT REQUIRED
IN PROSPECTUS
CONTENTS OF REGISTRATION STATEMENT
This Post-Effective Amendment to the Registration Statement on Form S-6
comprises the following papers and documents:
The facing sheet on Form S-6.
TheCross-Reference Sheet (incorporated by reference to the Post-Effective
Amendment to Form S-6 Registration Statement No. 2-62505, filed on April 25,
1996).
The Prospectus consisting of pages.
Signatures.
Consent of Independent Accountants.
Consent of Counsel (included in Exhibits 99.3.1 and 99.3.1.1). Consent of the
Evaluator (included in Exhibit 99.5.1).
The following exhibits:
99.1.1 -- Form of Reference Trust Agreement, as amended (filed
as Exhibit 99.1.1 to Post-Effective Amendment No. 8
to Form S-6 Registration Statement No. 33-26426 on
April 25, 1997 and incorporated herein by reference).
99.1.1.1 -- Trust Indenture and Agreement for New York Municipal
Trust, Series 1 (and Subsequent Series) (filed as
Exhibit 99.1.1.1 to the Post-Effective Amendment to
Form S-6 Registration Statement No. 2-62505, on April
25, 1996 and incorporated herein by reference).
99.1.3.4 -- Certificate of Formation and Agreement among Limited
Partners, as amended, of Reich & Tang Distributors
L.P. (filed as Exhibit 99.1.3.4 to Post-Effective
Amendment No. 10 to Form S-6 Registration Statements
Nos. 2-98914, 33-00376, 33-00856 and 33-01869 of
Municipal Securities Trust, Series 28, 39th Discount
Series, Series 29 & 40th Discount Series and Series
30 & 41st Discount Series, respectively, on October
31, 1995 and incorporated herein by reference).
99.2.1 -- Form of Certificate (filed as Exhibit 99.2.1 to
Post-Effective Amendment No. 8 to Form S-6
Registration Statement No. 33-26426 on April 25, 1997
and incorporated herein by reference).
99.3.1 -- Form of Opinion of Battle Fowler LLP (formerly
Battle, Fowler, Jaffin & Kheel) as to the legality of
the securities being registered, including their
consent to the delivery thereof and to the use of
their name under the headings "Tax Status" and "Legal
Opinions" in the Prospectus (filed as Exhibit 99.3.1
to Post-Effective Amendment No. 8 to Form S-6
Registration Statement No. 2-26426 on April 25, 1997
and incorporated herein by reference).
**99.3.1.1 -- Form of Opinion of Battle Fowler LLP (formerly
Battle, Fowler, Jaffin & Kheel) as to tax status of
Securities being registered (filed as Exhibit
99.3.1.1 to Post-Effective
--------
** Filed herewith for the EDGAR filing only.
II-1
1656.1
<PAGE>
Amendment No. 20 to Form S-6 Registration Statement
No. 2-62505 on April 25, 1997 and incorporated herein
by reference).
*99.5.1 -- Consent of the Evaluator.
99.6.0 -- Power of Attorney of Reich & Tang Distributors L.P.,
the Depositor, by its officers and a majority of its
Directors (filed as Exhibit 99.6.0 to Amendment No. 1
to Form S-6 Registration Statement No. 33-62627 of
Equity Securities Trust, Series 6, Signature Series,
Gabelli Entertainment and Media Trust on November 16,
1995 and incorporated herein by reference).
*27 -- Financial Data Schedule(s) (for EDGAR filing only).
- --------
* Being filed by this Amendment.
II-2
1656.1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrants, New York Municipal Trust, Series 1, Series 2, Series 3, Series
4, Series 5 and Series 6, certify that they have met all of the requirements for
effectiveness of this Post-Effective Amendment to the Registration Statements
pursuant to Rule 485(b) under the Securities Act of 1933. The registrants have
duly caused this Post-Effective Amendment to the Registration Statements to be
signed on their behalf by the undersigned, hereunto duly authorized, in the City
of New York and State of New York on the 17th day of April, 1997.
NEW YORK MUNICIPAL TRUST, SERIES 1, SERIES 2,
SERIES 3, SERIES 4, SERIES 5 AND SERIES 6
(Registrants)
REICH & TANG DISTRIBUTORS L.P.
(Depositor)
By: Reich & Tang Asset Management, Inc.,
as general partner
By: /s/PETER J. DEMARCO
Peter J. DeMarco
(Authorized Signatory)
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment to the Registration Statement has been signed
below by the following persons who constitute the principal officers and a
majority of the directors of Reich & Tang Asset Management, Inc., the general
partner of Reich & Tang Distributors L.P., the Depositor, in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
<S> <C> <C>
PETER S. VOSS President, Chief Executive Officer )
and Director )
G. NEAL RYLAND Executive Vice President, Treasurer ) April 17, 1997
and Chief Financial Officer )
EDWARD N. WADSWORTH Clerk )
RICHARD E. SMITH III Director )By: /s/PETER J. DEMARCO
-------------------
STEVEN W. DUFF Director ) Peter J. DeMarco
BERNADETTE N. FINN Vice President ) Attorney-in-Fact*
LORRAINE C. HYSLER Secretary )
RICHARD DE SANCTIS Vice President and Treasurer )
</TABLE>
- ---------------
* Executed copies of Powers of Attorney were filed as Exhibit 6.0 to
Amendment No. 1 to Registration Statement No. 33-62627 on November 16,
1995.
II-3
1656.1
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Post-Effective Amendment to the registration statement on Form S-6 of our report
dated March 28, 1997, relating to the financial statements and financial
highlights for the year ended December 31, 1996 of the New York Municipal Trust,
Series 1; New York Municipal Trust, Series 2; New York Municipal Trust, Series
3; New York Municipal Trust, Series 4; New York Municipal Trust, Series 5; and
New York Municipal Trust, Series 6, which appear in such Prospectus. We also
consent to the reference to us under the heading "Independent Accountants" in
the Prospectus.
PRICE WATERHOUSE LLP
Boston, MA 02110
April 25, 1997
<PAGE>
Independent Auditors' Consent
Re: New York Municipal Trust, Series 1
New York Municipal Trust, Series 2
New York Municipal Trust, Series 3
New York Municipal Trust, Series 4
New York Municipal Trust, Series 5
New York Municipal Trust, Series 6
We consent to the incorporation by reference of our report dated March
31, 1996, on the statements of operations and changes in net assets for the
subject trusts for each of the years in the two year period ended December 31,
1995, and to the reference to our firm under the heading "Independent
Accountants" in the prospectus.
KPMG Peat Marwick LLP
New York, New York
April 24, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND> The schedule contains summary financial information
extracted from the financial statements and
supporting schedules as of the end of the most
current period and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000276718
<NAME> NYMT, Series 1
<SERIES>
<NUMBER> 1
<NAME> NYMT, Series 1
<S> <C>
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<PERIOD-TYPE> Year
<INVESTMENTS-AT-COST> 2,113,756
<INVESTMENTS-AT-VALUE> 2,384,870
<RECEIVABLES> 27,347
<ASSETS-OTHER> 24,892
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,437,109
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 2,437,109
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 59,248
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (7,009)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 271,114
<NET-ASSETS> 2,437,109
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 159,572
<OTHER-INCOME> 0
<EXPENSES-NET> 10,055
<NET-INVESTMENT-INCOME> 149,517
<REALIZED-GAINS-CURRENT> 41,192
<APPREC-INCREASE-CURRENT> (55,552)
<NET-CHANGE-FROM-OPS> 135,157
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 155,286
<DISTRIBUTIONS-OF-GAINS> 167,863
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 298
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (187,992)
<ACCUMULATED-NII-PRIOR> 65,017
<ACCUMULATED-GAINS-PRIOR> 467
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 521.99
<PER-SHARE-NII> 30.64
<PER-SHARE-GAIN-APPREC> (1.96)
<PER-SHARE-DIVIDEND> 31.82
<PER-SHARE-DISTRIBUTIONS> 3.71
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 515.14
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND> The schedule contains summary financial information
extracted from the financial statements and
supporting schedules as of the end of the most
current period and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000278075
<NAME> NYMT, Series 2
<SERIES>
<NUMBER> 1
<NAME> NYMT, Series 2
<S> <C>
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<PERIOD-TYPE> Year
<INVESTMENTS-AT-COST> 2,048,784
<INVESTMENTS-AT-VALUE> 2,321,125
<RECEIVABLES> 34,741
<ASSETS-OTHER> 7,058
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,362,924
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 2,362,924
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 70,280
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (28,481)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 272,341
<NET-ASSETS> 2,362,924
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 175,203
<OTHER-INCOME> 0
<EXPENSES-NET> 10,429
<NET-INVESTMENT-INCOME> 164,774
<REALIZED-GAINS-CURRENT> 10,483
<APPREC-INCREASE-CURRENT> (32,541)
<NET-CHANGE-FROM-OPS> 142,716
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 173,264
<DISTRIBUTIONS-OF-GAINS> 508,867
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 214
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (539,415)
<ACCUMULATED-NII-PRIOR> 78,770
<ACCUMULATED-GAINS-PRIOR> 36
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 559.33
<PER-SHARE-NII> 32.43
<PER-SHARE-GAIN-APPREC> (3.97)
<PER-SHARE-DIVIDEND> 34.09
<PER-SHARE-DISTRIBUTIONS> 78.74
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 474.96
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND> The schedule contains summary financial information
extracted from the financial statements and
supporting schedules as of the end of the most
current period and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000278210
<NAME> NYMT, Series 3
<SERIES>
<NUMBER> 1
<NAME> NYMT, Series 3
<S> <C>
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<PERIOD-TYPE> Year
<INVESTMENTS-AT-COST> 1,615,577
<INVESTMENTS-AT-VALUE> 1,901,486
<RECEIVABLES> 41,328
<ASSETS-OTHER> 39,814
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,982,628
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 1,982,628
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 72,018
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9,124
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 285,909
<NET-ASSETS> 1,982,628
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 173,996
<OTHER-INCOME> 0
<EXPENSES-NET> 9,792
<NET-INVESTMENT-INCOME> 164,204
<REALIZED-GAINS-CURRENT> 6,310
<APPREC-INCREASE-CURRENT> (53,163)
<NET-CHANGE-FROM-OPS> 117,351
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 171,451
<DISTRIBUTIONS-OF-GAINS> 803,509
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 141
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (857,609)
<ACCUMULATED-NII-PRIOR> 79,265
<ACCUMULATED-GAINS-PRIOR> 9,083
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 419.47
<PER-SHARE-NII> 24.51
<PER-SHARE-GAIN-APPREC> (7.34)
<PER-SHARE-DIVIDEND> 25.59
<PER-SHARE-DISTRIBUTIONS> 112.01
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 299.04
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND> The schedule contains summary financial information
extracted from the financial statements and
supporting schedules as of the end of the most
current period and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000310871
<NAME> NYMT, Series 4
<SERIES>
<NUMBER> 1
<NAME> NYMT, Series 4
<S> <C>
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<PERIOD-TYPE> Year
<INVESTMENTS-AT-COST> 4,463,546
<INVESTMENTS-AT-VALUE> 4,985,797
<RECEIVABLES> 68,808
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,054,605
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 41,693
<TOTAL-LIABILITIES> 41,693
<SENIOR-EQUITY> 5,012,912
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 84,511
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (57,396)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 522,251
<NET-ASSETS> 5,012,912
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 378,794
<OTHER-INCOME> 0
<EXPENSES-NET> 14,799
<NET-INVESTMENT-INCOME> 363,995
<REALIZED-GAINS-CURRENT> (871)
<APPREC-INCREASE-CURRENT> (57,549)
<NET-CHANGE-FROM-OPS> 305,575
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 375,250
<DISTRIBUTIONS-OF-GAINS> 1,068,345
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 488
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (1,138,020)
<ACCUMULATED-NII-PRIOR> 95,766
<ACCUMULATED-GAINS-PRIOR> (3,901)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 527.93
<PER-SHARE-NII> 31.91
<PER-SHARE-GAIN-APPREC> (4.97)
<PER-SHARE-DIVIDEND> 32.89
<PER-SHARE-DISTRIBUTIONS> 72.92
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 449.06
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND> The schedule contains summary financial information
extracted from the financial statements and
supporting schedules as of the end of the most
current period and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000311414
<NAME> NYMT, Series 5
<SERIES>
<NUMBER> 1
<NAME> NYMT, Series 5
<S> <C>
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<PERIOD-TYPE> Year
<INVESTMENTS-AT-COST> 5,786,529
<INVESTMENTS-AT-VALUE> 6,239,414
<RECEIVABLES> 106,241
<ASSETS-OTHER> 38,626
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,384,281
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 6,384,281
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 159,901
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (15,034)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 452,885
<NET-ASSETS> 6,384,281
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 443,810
<OTHER-INCOME> 0
<EXPENSES-NET> 14,890
<NET-INVESTMENT-INCOME> 428,920
<REALIZED-GAINS-CURRENT> 20,427
<APPREC-INCREASE-CURRENT> (87,680)
<NET-CHANGE-FROM-OPS> 361,667
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 435,879
<DISTRIBUTIONS-OF-GAINS> 413,170
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 309
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (478,382)
<ACCUMULATED-NII-PRIOR> 166,860
<ACCUMULATED-GAINS-PRIOR> 36
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 579.52
<PER-SHARE-NII> 36.70
<PER-SHARE-GAIN-APPREC> (4.55)
<PER-SHARE-DIVIDEND> 37.30
<PER-SHARE-DISTRIBUTIONS> 20.80
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 553.57
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND> The schedule contains summary financial information
extracted from the financial statements and
supporting schedules as of the end of the most
current period and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000312023
<NAME> NYMT, Series 6
<SERIES>
<NUMBER> 1
<NAME> NYMT, Series 6
<S> <C>
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<PERIOD-TYPE> Year
<INVESTMENTS-AT-COST> 7,260,612
<INVESTMENTS-AT-VALUE> 7,738,423
<RECEIVABLES> 118,051
<ASSETS-OTHER> 23,133
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,879,607
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 7,879,607
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 157,505
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (16,321)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 477,811
<NET-ASSETS> 7,879,607
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 543,960
<OTHER-INCOME> 0
<EXPENSES-NET> 16,849
<NET-INVESTMENT-INCOME> 527,111
<REALIZED-GAINS-CURRENT> 6,136
<APPREC-INCREASE-CURRENT> (86,443)
<NET-CHANGE-FROM-OPS> 446,804
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 533,683
<DISTRIBUTIONS-OF-GAINS> 456,209
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 241
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (543,088)
<ACCUMULATED-NII-PRIOR> 164,077
<ACCUMULATED-GAINS-PRIOR> 88
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 703.47
<PER-SHARE-NII> 44.47
<PER-SHARE-GAIN-APPREC> (6.46)
<PER-SHARE-DIVIDEND> 45.03
<PER-SHARE-DISTRIBUTIONS> 24.82
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 671.63
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Exhibit 3.1.1
[Battle Fowler Letterhead]
[Date]
[Addressed to Sponsor]
Re: [Name of Unit Investment Trust
sponsored by Sponsor]
Dear Sirs:
You have asked for our opinion on the status, for purposes of federal
income tax, New York State franchise tax and New York City general corporation
tax, of [Name of Trust] (the "Trust"), a trust created under the laws of the
State of New York pursuant to a Trust Indenture and Agreement and a Reference
Trust Agreement (the "Agreement") dated [date of effectiveness], among [Name of
Sponsor, Trustee and Evaluator, if any].
In rendering this opinion, we have examined the Agreement, the proposed
form of final Prospectus dated [date of effectiveness] (the "Prospectus") and
the documents referred to therein, among others, and we have relied on the
validity of said documents and the accuracy and completeness of the facts set
forth therein.
All Bonds (as defined in the Prospectus) to be acquired by the Trust,
pursuant to the contracts of purchase described in the Prospectus, were
accompanied by copies of opinions of bond counsel to the issuing governmental
authorities given at the time of original delivery of the Bonds to the effect
that the interest thereon is exempt from all federal income taxes, but we have
not made any review of the proceedings relating to the issuance of the Bonds or
the bases for such opinions.
Based on the foregoing, it is our opinion that, under existing law:
The Trust is not an association taxable as a corporation for Federal income
tax purposes under the Internal Revenue Code of
C/M 11939.0001 481887.1
(NYMT Series 1)
<PAGE>
2
1954, as amended (the "Code"), and income received by the Trust that consists of
interest excludable from gross income under the Code will be excludable from the
Federal gross income of the Certificateholders (as defined in the Prospectus) of
the Trust.
Each Certificateholder will be considered the owner of a pro rata portion
of the Trust under Section 676(a) of the Code. Thus, each Certificateholder will
be considered to have received his pro rata share of Bond interest when it is
received by the Trust. Moreover, each Certificateholder will realize taxable
gain or loss when the Trust disposes of a Bond (whether by sale, exchange,
redemption or payment at maturity) or when the Certificateholder redeems or
sells a Unit (as defined in the Prospectus), as if the Certificateholder had
directly disposed of his pro rata share of the Bonds. The gain or loss is
measured by the difference between (i) the tax cost of such pro rata share and
(ii) the amount received therefor. For this purpose, the total tax cost of each
Unit to a Certificateholder is allocated among all of the Bond issues held in
the Trust (in accordance with the ratio of the cost to the Trust of each Bond
issue to the total cost to the Trust of all Bond issues) in order to determine
his per Unit tax cost for each Bond issue, and amounts received upon disposition
are similarly allocated. In addition, the Code requires reduction of the tax
cost of tax exempt bonds for amortization of bond premium, but no corresponding
deduction is allowed for income tax purposes. This requirement will also apply
separately to the per Unit tax cost of each Bond issue, with the result that a
Certificateholder may realize taxable gain when a Unit is sold or redeemed for
an amount equal to, or even less than, his original cost. The return of a
Certificateholder's tax cost, as so adjusted, is otherwise a tax-free return of
capital.
Under Federal law, interest on Bonds in the Trust issued by authority of
the Government of Puerto Rico is exempt from all Federal, state and local income
taxes in the United States and Puerto Rico.
The Trust is not subject to the New York State Franchise Tax on Business
Corporations or the New York City General Corporation Tax. In addition, the
income of the Trust will be treated as the income of the Certificateholders and
the interest will be exempt from tax under the income tax laws of the State and
City of New York.
In the case of certain of the Bonds which are "industrial development
bonds" as that term is defined in ss.103(b)(2) of the Code, the opinions of bond
counsel to the respective issuing authorities indicate that although interest on
such Bonds is
C/M 11939.0001 481887.1
(NYMT Series 1)
<PAGE>
3
generally exempt from Federal income tax, interest on such Bonds will not be
exempt from Federal "income tax for any period during which such Bonds are held
by a substantial user" of the facilities financed by the proceeds of such Bonds
or a "related person" thereof within the meaning of ss.103(b)(6)(C) of the Code.
Therefore, interest on any such Bonds allocable to a Certificateholder who is
such a "substantial user" or "related person" thereof will not be tax exempt. We
have made no investigation as to the users of the facilities financed by the
Bonds or the facilities themselves.
Interest on indebtedness incurred or continued to purchase or carry the
Units is not deductible for Federal, New York State or New York City income tax
purposes. In addition, under rules used by the Internal Revenue Service for
determining when borrowed funds are considered used for the purpose of
purchasing or carrying particular assets, the purchase of Units may be
considered to have been made with borrowed funds even though the borrowed funds
are not directly traceable to the purchase of Units. Similar rules are
applicable for New York State and City tax purposes.
From time to time proposals have been introduced before Congress to
restrict or eliminate the Federal income tax exemption for interest on debt
obligations similar to the Bonds in the Trust, and it can be expected that
similar proposals may be introduced in the future. We cannot predict what
legislation in respect of the tax status of interest on such debt obligations
may be proposed by the executive branch or by members of Congress, nor can we
predict which proposals, if any, might be enacted or whether any legislation, if
enacted, would apply to the Bonds in the Trust.
The material set forth under the "Tax Status" on pp. [ ] of the Prospectus
is a fair summary of our opinion.
We authorize you to deliver copies of this opinion to the Trustee and the
Underwriters named in Schedule A to the Agreement Among Underwriters relating to
the Trust.
Very truly yours,
C/M 11939.0001 481887.1
(NYMT Series 1)
J.J. Kenny Frank A. Ciccotto, Jr.
65 Broadway Vice President
New York, NY 10006-2551 Tax-Exempt Evaluations
Tel 212 770 4422
Fax 212 797 8681
Standard & Poor's
A Division of The McGraw-Hill Companies
April 30, 1997
Reich & Tang Distributors L.P.
600 Fifth Avenue
New York, NY 10020
Re: New York Municipal Trust,
Series 1
Gentlemen:
We have examined the post-effective Amendment to the Registration
Statement File No. 2-62505 for the above-captioned trust. We hereby acknowledge
that Kenny S&P Evaluation Services, a division of J.J. Kenny Co., Inc. is
currently acting as the evaluator for the trust. We hereby consent to the use in
the Amendment of the reference to Kenny S&P Evaluation Services, a division of
J.J. Kenny Co., Inc. as evaluator.
In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registratin Statement for the respective bonds
comprising the trust portfolio are the ratings indicated in our KENNYBASE
database.
You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commision.
Sincerely,
Frank A. Ciccotto
FAC/trh
<PAGE>
J.J. Kenny Frank A. Ciccotto, Jr.
65 Broadway Vice President
New York, NY 10006-2551 Tax-Exempt Evaluations
Tel 212 770 4422
Fax 212 797 8681
Standard & Poor's
A Division of The McGraw-Hill Companies
April 30, 1997
Reich & Tang Distributors L.P.
600 Fifth Avenue
New York, NY 10020
Re: New York Municipal Trust,
Series 2
Gentlemen:
We have examined the post-effective Amendment to the Registration
Statement File No. 2-63235 for the above-captioned trust. We hereby acknowledge
that Kenny S&P Evaluation Services, a division of J.J. Kenny Co., Inc. is
currently acting as the evaluator for the trust. We hereby consent to the use in
the Amendment of the reference to Kenny S&P Evaluation Services, a division of
J.J. Kenny Co., Inc. as evaluator.
In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registratin Statement for the respective bonds
comprising the trust portfolio are the ratings indicated in our KENNYBASE
database.
You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commision.
Sincerely,
Frank A. Ciccotto
FAC/trh
<PAGE>
J.J. Kenny Frank A. Ciccotto, Jr.
65 Broadway Vice President
New York, NY 10006-2551 Tax-Exempt Evaluations
Tel 212 770 4422
Fax 212 797 8681
Standard & Poor's
A Division of The McGraw-Hill Companies
April 30, 1997
Reich & Tang Distributors L.P.
600 Fifth Avenue
New York, NY 10020
Re: New York Municipal Trust,
Series 3
Gentlemen:
We have examined the post-effective Amendment to the Registration
Statement File No. 2-63439 for the above-captioned trust. We hereby acknowledge
that Kenny S&P Evaluation Services, a division of J.J. Kenny Co., Inc. is
currently acting as the evaluator for the trust. We hereby consent to the use in
the Amendment of the reference to Kenny S&P Evaluation Services, a division of
J.J. Kenny Co., Inc. as evaluator.
In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registratin Statement for the respective bonds
comprising the trust portfolio are the ratings indicated in our KENNYBASE
database.
You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commision.
Sincerely,
Frank A. Ciccotto
FAC/trh
<PAGE>
J.J. Kenny Frank A. Ciccotto, Jr.
65 Broadway Vice President
New York, NY 10006-2551 Tax-Exempt Evaluations
Tel 212 770 4422
Fax 212 797 8681
Standard & Poor's
A Division of The McGraw-Hill Companies
April 30, 1997
Reich & Tang Distributors L.P.
600 Fifth Avenue
New York, NY 10020
Re: New York Municipal Trust,
Series 4
Gentlemen:
We have examined the post-effective Amendment to the Registration
Statement File No. 2-64016 for the above-captioned trust. We hereby acknowledge
that Kenny S&P Evaluation Services, a division of J.J. Kenny Co., Inc. is
currently acting as the evaluator for the trust. We hereby consent to the use in
the Amendment of the reference to Kenny S&P Evaluation Services, a division of
J.J. Kenny Co., Inc. as evaluator.
In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registratin Statement for the respective bonds
comprising the trust portfolio are the ratings indicated in our KENNYBASE
database.
You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commision.
Sincerely,
Frank A. Ciccotto
FAC/trh
<PAGE>
J.J. Kenny Frank A. Ciccotto, Jr.
65 Broadway Vice President
New York, NY 10006-2551 Tax-Exempt Evaluations
Tel 212 770 4422
Fax 212 797 8681
Standard & Poor's
A Division of The McGraw-Hill Companies
April 30, 1997
Reich & Tang Distributors L.P.
600 Fifth Avenue
New York, NY 10020
Re: New York Municipal Trust,
Series 5
Gentlemen:
We have examined the post-effective Amendment to the Registration
Statement File No. 2-64475 for the above-captioned trust. We hereby acknowledge
that Kenny S&P Evaluation Services, a division of J.J. Kenny Co., Inc. is
currently acting as the evaluator for the trust. We hereby consent to the use in
the Amendment of the reference to Kenny S&P Evaluation Services, a division of
J.J. Kenny Co., Inc. as evaluator.
In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registratin Statement for the respective bonds
comprising the trust portfolio are the ratings indicated in our KENNYBASE
database.
You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commision.
Sincerely,
Frank A. Ciccotto
FAC/trh
<PAGE>
J.J. Kenny Frank A. Ciccotto, Jr.
65 Broadway Vice President
New York, NY 10006-2551 Tax-Exempt Evaluations
Tel 212 770 4422
Fax 212 797 8681
Standard & Poor's
A Division of The McGraw-Hill Companies
April 30, 1997
Reich & Tang Distributors L.P.
600 Fifth Avenue
New York, NY 10020
Re: New York Municipal Trust,
Series 6
Gentlemen:
We have examined the post-effective Amendment to the Registration
Statement File No. 2-64913 for the above-captioned trust. We hereby acknowledge
that Kenny S&P Evaluation Services, a division of J.J. Kenny Co., Inc. is
currently acting as the evaluator for the trust. We hereby consent to the use in
the Amendment of the reference to Kenny S&P Evaluation Services, a division of
J.J. Kenny Co., Inc. as evaluator.
In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registratin Statement for the respective bonds
comprising the trust portfolio are the ratings indicated in our KENNYBASE
database.
You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commision.
Sincerely,
Frank A. Ciccotto
FAC/trh
