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File No. 33-50586
CIK #708852
Securities and Exchange Commission
Washington, D. C. 20549
Post-Effective
Amendment No. 11
to
Form S-6
For Registration under the Securities Act of 1933
of Securities of Unit Investment Trusts Registered
on Form N-8B-2
KEMPER TAX-EXEMPT INCOME TRUST, SERIES 48
NAME AND EXECUTIVE OFFICE ADDRESS OF DEPOSITOR:
KEMPER UNIT INVESTMENT TRUSTS
(a service of Kemper Securities, Inc.)
77 West Wacker - 5th Floor
Chicago, Illinois 60601
Name and complete address of agent for service:
C. PERRY MOORE
77 West Wacker - 5th Floor
Chicago, Illinois 60601
X(X) Check box if it is proposed that this filing will become effective
immediately upon pursuant to paragraph (b) of Rule 485.
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KEMPER TAX-EXEMPT INCOME TRUST
NATIONAL SERIES
INTERMEDIATE TERM SERIES
SHORT-INTERMEDIATE TERM SERIES
PART ONE
The date of this Part One is that date
which is set forth in Part Two
of the Prospectus
Each Series of Kemper Tax-Exempt Income Trust (the "National Trust")
was formed for the purpose of gaining interest income free from Federal income
taxes while conserving capital and diversifying risks by investing in a fixed
portfolio of Municipal Bonds consisting of obligations of states of the United
States and political subdivisions and authorities thereof. The portfolios of
the Intermediate Term Series and the Short-Intermediate Term Series of the
Trust are similar to the National Series, except that the Intermediate Term
Series consist of obligations having a dollar-weighted average maturity of 10
years or less and the Short- Intermediate Term Series have a dollar-weighted
average maturity of 5 years or less.
This Prospectus is in two parts. Read and retain both parts of this
Prospectus for future reference.
SPONSOR: KEMPER UNIT INVESTMENT TRUSTS
A SERVICE OF KEMPER SECURITIES, INC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
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SUMMARY . . . . . . . . . . . . . . . . . . . 3
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The Trust . . . . . . . . . . . . . . . . 3
Public Offering Price . . . . . . . . . . 3 Essential Information*
Interest and Principal Report of Independent Auditors*
Distributions . . . . . . . . . . . . . 3 Statement of Net Assets and Liabilities*
Reinvestment . . . . . . . . . . . . . . 4 Statement of Operations*
Estimated Current Return and Statement of Changes in Net Assets*
Estimated Long-Term Return . . . . . . 4 Schedule of Investments*
Market for Units . . . . . . . . . . . . 4 Notes to Schedule Investments*
THE TRUST . . . . . . . . . . . . . . . . . . 5 Notes to Financial Statements*
PORTFOLIO . . . . . . . . . . . . . . . . . . 6
Portfolio Risk Information . . . . . . . 7
DISTRIBUTION REINVESTMENT . . . . . . . . . . 12
INTEREST AND ESTIMATED LONG-TERM *INFORMATION ON THESE ITEMS
AND CURRENT RETURNS . . . . . . . . . . . 12 APPEARS IN PART TWO
TAX STATUS OF THE TRUST . . . . . . . . . . . 13
PUBLIC OFFERING OF UNITS . . . . . . . . . . 17
Public Offering Price . . . . . . . . . . 17
Public Distribution of Units . . . . . . 18
Profits of Sponsor . . . . . . . . . . . 19
MARKET FOR UNITS . . . . . . . . . . . . . . 19
REDEMPTION . . . . . . . . . . . . . . . . . 19
Computation of Redemption Price . . . . . 21
UNITHOLDERS . . . . . . . . . . . . . . . . . 21
Ownership of Units . . . . . . . . . . . 21
Distributions to Unitholders . . . . . . 21
Statements to Unitholders . . . . . . . . 21
Rights of Unitholders . . . . . . . . . . 24
INVESTMENT SUPERVISION . . . . . . . . . . . 24
ADMINISTRATION OF THE TRUST . . . . . . . . . 25
The Trustee . . . . . . . . . . . . . . . 25
The Evaluator . . . . . . . . . . . . . . 26
Amendment and Termination . . . . . . . . 26
Limitations on Liability . . . . . . . . 27
EXPENSES OF THE TRUST . . . . . . . . . . . . 27
THE SPONSOR . . . . . . . . . . . . . . . . . 28
LEGAL OPINIONS . . . . . . . . . . . . . . . 29
INDEPENDENT AUDITORS . . . . . . . . . . . . 29
DESCRIPTION OF SECURITIES
RATINGS . . . . . . . . . . . . . . . . . 29
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KEMPER TAX-EXEMPT INCOME TRUST
NATIONAL SERIES
INTERMEDIATE TERM SERIES
SHORT-INTERMEDIATE TERM SERIES
SUMMARY
THE TRUST. Each Series of the Kemper Tax-Exempt Income Trust
(the "Trust") is one of a series of investment companies each of which is a
unit investment trust consisting of a diversified portfolio of obligations of
states of the United States and political subdivisions and authorities thereof
("Municipal Bonds or "Securities"). The portfolios of the Intermediate Term
Series and Short-Intermediate Term Series of the Trust are similar to the
National Series, except that the Intermediate Term Series consist of
obligations having a dollar-weighted average maturity of 10 years or less and
the Short-Intermediate Term Series have a dollar-weighted average maturity of 5
years or less. Municipal Bonds in the portfolio were rated as of the Date of
Deposit in the category "A" or better by Standard & Poor's Corporation or
Moody's Investors Service, Inc. Ratings of the Municipal Bonds may have
changed since the Date of Deposit. See "Description of Securities Ratings"
herein and the "Schedule of Investments" in Part Two.
The objective of each Series of the Trust is tax-exempt income
and conservation of capital with diversification of risk through investment in
a fixed portfolio of Municipal Bonds. Interest on certain Municipal Bonds in
certain of the National Series will be a preference item for purposes of the
alternative minimum tax. Accordingly, such National Series may be appropriate
only for investors who are not subject to the alternative minimum tax. There
is, of course, no guarantee that the Trust's objectives will be achieved.
The Units, each of which represents a pro rata undivided
fractional interest in the Municipal Bonds deposited in the appropriate Series
of the Trust, are issued and outstanding Units which have been reacquired by
the Sponsor either by purchase or Units tendered to the Trustee for redemption
or by purchase in the open market. No offering is being made on behalf of the
Trust and any profit or loss realized on the sale of Units will accrue to the
Sponsor and/or the firm reselling such Units.
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of
a Series of the Trust is equal to a pro rata share of the aggregate bid prices
of the Municipal Bonds in such Series (plus or minus a pro rata share of cash,
if any, in the Principal Account, held or owed by the Series) plus a sales
charge in the amount shown under "Public Offering of Units." In addition,
there will be added to each transaction an amount equal to the accrued
interest from the last Record Date of such Series to the date of settlement
(five business days after order). The sales charge is reduced on a graduated
scale as indicated under "Public Offering of Units -Public Offering Price."
INTEREST AND PRINCIPAL DISTRIBUTIONS. Distributions of the
estimated annual interest income received by a National Series or an
Intermediate Term Series, after deduction of estimated expenses, will be made
monthly unless the Unitholder elects to receive such distributions quarterly or
semi-annually. Distributions will be paid on the Distribution Dates to holders
of record of each such Series on the Record Dates set forth for the applicable
option. Distributions of the estimated annual interest income to be received
by a Short-
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Intermediate Term Series of the Trust, after deduction of estimated expenses,
will be made semi-annually on January 15 and July 15 to Unitholders of record
on January 1 and July 1, respectively, of each year. (See "Essential
Information" in Part Two).
The distribution of funds, if any, in the Principal Account of
each Series, will be made semi-annually to Unitholders of Record on the
appropriate dates. See "Essential Information" in Part Two.
REINVESTMENT. Distributions of interest and principal,
including capital gains, if any, made by a Series of the Trust will be paid in
cash unless a Unitholder elects to reinvest such distributions. Each
Unitholder of a Trust Fund offered herein may elect to have distributions of
principal or interest or both automatically invested without charge in shares
of certain mutual funds sponsored by Kemper Financial Services, Inc. See
"Distribution Reinvestment."
ESTIMATED CURRENT RETURN AND ESTIMATED LONG-TERM RETURN. The
Estimated Current Return is calculated by dividing the estimated net annual
interest income per Unit by the Public Offering Price of such Trust. The
estimated net annual interest income per Unit will vary with changes in fees
and expenses of the Trustee, the Sponsor and Evaluator and with the principal
prepayment, redemption, maturity, exchange or sale of Securities while the
Public Offering Price will vary with changes in the bid price of the underlying
Securities; therefore, there is no assurance that the present Estimated Current
Returns will be realized in the future. Estimated Long-Term Return is
calculated using a formula which (1) takes into consideration, and determines
and factors in the relative weightings of, the market values, yields (which
takes into account the amortization of premiums and the accretion of discounts)
and estimated retirements of all of the Securities in the Trust and (2) takes
into account the expenses and sales charge associated with each Trust Unit.
Since the market values and estimated retirements of the Securities and the
expenses of the Trust will change, there is no assurance that the present
Estimated Long-Term Return will be realized in the future. Estimated Current
Return and Estimated Long-Term Return are expected to differ because the
calculation of Estimated Long-Term Return reflects the estimated date and
amount of principal returned while Estimated Current Return calculations
include only net annual interest income and Public Offering Price.
MARKET FOR UNITS. While under no obligation to do so, the
Sponsor intends, subject to change at any time, to maintain a market for the
Units of each Series of the Trust and to continuously offer to repurchase such
Units at prices which are based on the aggregate bid side evaluation of the
Municipal Bonds in such Series of the Trust. If such a market is not
maintained and no other over-the-counter market is available, Unitholders will
still be able to dispose of their Units through redemption by the Trustee at
prices based upon the aggregate bid price of the Municipal Bonds in such Series
of the Trust. See "Redemption."
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KEMPER TAX-EXEMPT INCOME TRUST
NATIONAL SERIES
INTERMEDIATE-TERM SERIES
SHORT-INTERMEDIATE TERM SERIES
THE TRUST
Each Series of the Trust is one of a Series of unit investment
trusts created by the Sponsor under the name Kemper Tax-Exempt Income Trust,
all of which are similar, and each of which was created under the laws of the
State of Missouri pursuant to a Trust Agreement*1 (the "Agreement"). Kemper
Unit Investment Trusts, a service of Kemper Securities, Inc. acts as Sponsor
and Evaluator and Investors Fiduciary Trust Company acts as Trustee. For
information regarding the relationship of Kemper Unit Investment Trusts and
Investors Fiduciary Trust Company, see "The Sponsor."
A Series of the Trust may be an appropriate investment vehicle
for investors who desire to participate in a portfolio of tax-exempt, fixed
income securities with greater diversification than they might be able to
acquire individually. In addition, Municipal Bonds of the type deposited in
the Trust are often not available in small amounts.
Each Series of the Trust contains a portfolio of interest
bearing obligations issued by or on behalf of states of the United States and
political subdivisions and authorities thereof the interest on which is, in the
opinion of bond counsel to the issuing authorities, exempt from all Federal
income taxes under existing law, but may be subject to state and local taxes.
The portfolios of the Intermediate Term Series and the Short-Intermediate Term
Series of the Trust are similar to the National Series, except that the
Intermediate Term Series consist of obligations having a dollar-weighted
average maturity of 10 years or less and the Short-Intermediate Series consist
of obligations having a dollar-weighted average maturity of 5 years or less.
Proceeds of the maturity, redemption or sale of the Municipal
Bonds in a Series of the Trust, unless used to pay for Units tendered for
redemption, will be distributed to Unitholders of such Series and will not be
utilized to purchase replacement or additional Municipal Bonds for such Series.
The Units, each of which represents a pro rata undivided
fractional interest in the principal amount of Municipal Bonds deposited in a
Series of the Trust, are issued and outstanding Units which have been
reacquired by the Sponsor either by purchase of Units tendered to the Trustee
for redemption or by purchase in the open market. No offering is being made
on behalf of the Trust or any Series thereof and any profit or loss realized on
the sale of Units will accrue to the Sponsor and/or the firm reselling such
Units.
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*Reference is hereby made to said Trust Agreements, and any
statements contained herein are qualified in their entirety by the
provisions thereof.
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To the extent that Units of a Series of the Trust are
redeemed, the principal amount of Municipal Bonds in such Series will be
reduced and the undivided fractional interest represented by each outstanding
Unit of that Series will increase. See "Redemption."
The objective of the Trust is tax-exempt income and
conservation of capital with diversification of risk through investment in a
fixed portfolio of Municipal Bonds. There is, of course, no guarantee that the
Trust's objectives will be achieved.
PORTFOLIO
In selecting the Municipal Bonds which comprise the portfolio
of a Series of the Trust the following requirements, among others, were deemed
to be of primary importance: (a) a minimum rating of "A" by either Standard &
Poor's Corporation or Moody's Investors Service, Inc. (See "Description of
Securities Ratings"); (b) the price of the Municipal Bonds relative to other
issues of similar quality and maturity; (c) the diversification of the
Municipal Bonds as to purpose of issue; (d) the dates of maturity of the
Municipal Bonds and (e) the income to the Unitholders of the Series of the
Trust. A Municipal Bond may cease to be rated or its rating may be reduced
below the minimum required as of the Date of Deposit. Neither event requires
the elimination of such investment from the portfolio of a Series of the Trust,
but may be considered in the Sponsor's determination to direct the Trustee to
dispose of the investment. See "Investment Supervision" herein and "Schedule
of Investments" in Part Two.
Interest on certain Municipal Bonds in certain of the National
Series will be a preference item for purposes of the alternative minimum tax.
Accordingly, such National Series may be appropriate only for investors who are
not subject to the alternative minimum tax.
The Sponsor may not alter the portfolio of a Series of the
Trust, except that certain of the Municipal Bonds may be sold upon the
happening of certain extraordinary circumstances. See "Investment
Supervision."
Certain of the Municipal Bonds in the Series of the Trust may
be subject to redemption prior to their stated maturity date pursuant to
sinking fund provisions, call provisions or extraordinary optional or
mandatory redemption provisions or otherwise. A sinking fund is a reserve fund
accumulated over a period of time for retirement of debt. A callable debt
obligation 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 debt
obligation is redeemed at or before maturity, by the proceeds of a new debt
obligation. In general, call provisions are more likely to be exercised when
the offering side valuation is at a premium over par than when it is at a
discount from par. Accordingly, any such call, redemption, sale or maturity
will reduce the size and diversity of such Series, and the net annual interest
income of the Series and may reduce the Estimated Long-Term Return and/or
Estimated Current Return. See "Interest and Estimated Long-Term and Current
Returns." Each Trust portfolio contains a listing of the sinking fund and call
provisions, if any, with respect to each of the debt obligations.
Extraordinary optional redemptions and mandatory redemptions result from the
happening of certain events. Generally, events that may permit the
extraordinary optional redemption of Municipal Bonds or may require the
mandatory redemption of Municipal Bonds include, among others: a final
determination that the interest on the Municipal Bonds is taxable; the
substantial damage or destruction by fire or other casualty of the project for
which the proceeds of the Municipal Bonds were used; an exercise by a local,
state or Federal
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governmental unit of its power of eminent domain to take all or substantially
all of the project for which the proceeds of the Municipal Bonds were used;
changes in the economic availability of raw materials, operating supplies or
facilities or technological or other changes which render the operation of the
project for which the proceeds of the Municipal Bonds were used uneconomic;
changes in law or an administrative or judicial decree which renders the
performance of the agreement under which the proceeds of the Municipal Bonds
were made available to finance the project impossible or which creates
unreasonable burdens or which imposes excessive liabilities, such as taxes not
imposed on the date the Municipal Bonds are issued on the issuer of the
Municipal Bonds or the user of the proceeds of the Municipal Bonds; an
administrative or judicial decree which requires the cessation of a substantial
part of the operations of the project financed with the proceeds of the
Municipal Bonds; an overestimate of the costs of the project to be financed
with the proceeds of the Municipal Bonds resulting in excess proceeds of the
Municipal Bonds which may be applied to redeem Municipal Bonds; or an
underestimate of a source of funds securing the Municipal Bonds resulting in
excess funds which may be applied to redeem Municipal Bonds. The Sponsor is
unable to predict all of the circumstances which may result in such redemption
of an issue of Municipal Bonds.
The Sponsor, and the Trustee shall not be liable in any way
for any default, failure or defect in any Municipal Bond.
PORTFOLIO RISK INFORMATION. An investment in Units of a
Series of the Trust should be made with an understanding of the risks which an
investment in fixed rate debt obligations may entail, including the risk that
the value of the portfolio and hence of the Units will decline with increases
in interest rates. The value of the underlying Municipal Bonds will fluctuate
inversely with changes in interest rates. The uncertain economic conditions of
recent years, together with the fiscal measures adopted to attempt to deal with
them, have resulted in wide fluctuations in interest rates and, thus, in the
value of fixed rate debt obligations generally and long term obligations in
particular. The Sponsor cannot predict whether such fluctuations will continue
in the future.
Certain of the Municipal Bonds in some Series of the Trust may
be general obligations of a governmental entity that are backed by the taxing
power of such entity. All other Municipal Bonds in such Trusts are revenue
bonds payable from the income of a specific project or authority and are not
supported by the issuer's power to levy taxes. General obligation bonds are
secured by the issuer's pledge of its faith, credit and taxing power for the
payment of principal and interest. Revenue bonds, on the other hand, are
payable only from the revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source. There are, of course, variations in the security of
the different Municipal Bonds in the Trusts, both within a particular
classification and between classifications, depending on numerous factors.
Certain of the Municipal Bonds in some Series of the Trust may
be obligations of issuers whose revenues are derived from services provided by
hospitals and other health care facilities, including nursing homes. In view
of this an investment in such Series should be made with an understanding of
the characteristics of such issuers and the risks that such an investment may
entail. Ratings of bonds issued for health care facilities are often based on
feasibility studies that contain projections of occupancy levels, revenues and
expenses. A facility's gross receipts and net income available for debt
service will be affected by future events and conditions including, among other
things, demand for services and the ability of the facility to provide the
services required, physicians' confidence in the facility, management
capabilities, economic developments in
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the service area, competition, efforts by insurers and governmental agencies to
limit rates, legislation establishing state rate- setting agencies, expenses,
the cost and possible unavailability of malpractice insurance, the funding of
Medicare, Medicaid and other similar third party payor programs, and government
regulation. Federal legislation has been enacted which implemented a system of
prospective Medicare reimbursement which may restrict the flow of revenues to
hospitals and other facilities which are reimbursed for services provided under
the Medicare program. Future legislation or changes in the areas noted above,
among other things, would affect all hospitals to varying degrees and,
accordingly, any adverse changes in these areas may adversely affect the
ability of such issuers to make payment of principal and interest on Municipal
Bonds held in such Series. Such adverse changes also may adversely affect the
ratings of the Municipal Bonds held in such Series of the Trust.
Certain of the Municipal Bonds in some Series of the Trust may
be single family mortgage revenue bonds, which are issued for the purpose of
acquiring from originating financial institutions notes secured by mortgages on
residences located within the issuer's boundaries and owned by persons of low
or moderate income. Mortgage loans are generally partially or completely
prepaid prior to their final maturities as a result of events such as sale of
the mortgaged premises, default, condemnation or casualty loss. Because these
Municipal Bonds are subject to extraordinary mandatory redemption in whole or
in part from such prepayments of mortgage loans, a substantial portion of such
Municipal Bonds will probably be redeemed prior to their scheduled maturities
or even prior to their ordinary call dates. The redemption price of such
issues may be more or less than the offering price of such Municipal Bonds.
Extraordinary mandatory redemption without premium could also result from the
failure of the originating financial institutions to make mortgage loans in
sufficient amounts within a specified time period or, in some cases, from the
sale by the Municipal Bond issuer of the mortgage loans. Failure of the
originating financial institutions to make mortgage loans would be due
principally to the interest rates on mortgage loans funded from other sources
becoming competitive with the interest rates on the mortgage loans funded with
the proceeds of the single family mortgage revenue bonds. Additionally,
unusually high rates of default on the underlying mortgage loans may reduce
revenues available for the payment of principal of or interest on such mortgage
revenue bonds. Single family mortgage revenue bonds issued after December 31,
1980 were issued under Section 103A of the Internal Revenue Code of 1954, which
Section contains certain ongoing requirements relating to the use of the
proceeds of such Bonds in order for the interest on such Municipal Bonds to
retain its tax-exempt status. In each case, the issuer of the Municipal Bonds
has covenanted to comply with applicable ongoing requirements and bond counsel
to such issuer has issued an opinion that the interest on the Municipal Bonds
is exempt from Federal income tax under existing laws and regulations. There
can be no assurances that the ongoing requirements will be met. The failure to
meet these requirements could cause the interest on the Municipal Bonds to
become taxable, possibly retroactively from the date of issuance.
Certain of the Municipal Bonds in some Series of the Trust may
be obligations of issuers whose revenues are primarily derived from mortgage
loans to housing projects for low to moderate income families. The ability of
such issuers to make debt service payments will be affected by events and
conditions affecting financed projects, including, among other things, the
achievement and maintenance of sufficient occupancy levels and adequate rental
income, increases in taxes, employment and income conditions prevailing in
local labor markets, utility costs and other operating expenses, the managerial
ability of project managers, changes in laws and governmental regulations, the
appropriation of subsidies and social and economic trends affecting the
localities in which the projects are located. The occupancy of housing
projects may be adversely affected by high rent levels and income limitations
imposed under Federal and state programs. Like single family mortgage revenue
bonds, multi-family mortgage revenue bonds are subject to redemption and call
features, including extraordinary mandatory redemption features, upon
prepayment, sale or non-origination of mortgage
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loans as well as upon the occurrence of other events. Certain issuers of
single or multi-family housing bonds have considered various ways to redeem
bonds they have issued prior to the stated first redemption dates for such
bonds. In connection with the housing Municipal Bonds held by the Trust, the
Sponsor has not had any direct communications with any of the issuers thereof,
but at the initial Date of Deposit it was not aware that any of the respective
issuers of such Municipal Bonds were actively considering the redemption of
such Municipal Bonds prior to their respective stated initial call dates.
However, there can be no assurance that an issuer of a Municipal Bond in a
Trust will not attempt to so redeem a Municipal Bond in such Trust.
Certain of the Municipal Bonds in some Series of the Trust may
be obligations of issuers whose revenues are derived from the sale of water
and/or sewerage services. Water and sewerage bonds are generally payable from
user fees. Problems faced by such issuers include the ability to obtain timely
and adequate rate increases, a decline in population resulting in decreased
user fees, the difficulty of financing large construction programs, the
limitations on operations and increased costs and delays attributable to
environmental considerations, the increasing difficulty of obtaining or
discovering new supplies of fresh water, the effect of conservation programs
and the impact of "no-growth" zoning ordinances. Issuers may have experienced
these problems in varying degrees.
Certain of the Municipal Bonds in some Series of the Trust may
be obligations of issuers whose revenues are primarily derived from the sale of
electric energy or natural gas. Utilities are generally subject to extensive
regulation by state utility commissions which, among other things, establish
the rates which may be charged and the appropriate rate of return on an
approved asset base. The problems faced by such issuers include the difficulty
in obtaining approval for timely and adequate rate increases from the governing
public utility commission, the difficulty in financing large construction
programs, the limitations on operations and increased costs and delays
attributable to environmental considerations, increased competition, recent
reductions in estimates of future demand for electricity in certain areas of
the county, the difficulty of the capital market in absorbing utility debt, the
difficulty in obtaining fuel at reasonable prices and the effect of energy
conservation. Issuers may have experienced these problems in varying degrees.
In addition, Federal, state and municipal governmental authorities may from
time to time review existing and impose additional regulations governing the
licensing, construction and operation of nuclear power plants, which may
adversely affect the ability of the issuers of such Municipal Bonds to make
payments of principal and/or interest on such Municipal Bonds. The ability of
state and local joint action power agencies to make payments on bonds they
have issued is dependent in large part on payments made to them pursuant to
power supply or similar agreements. Courts in Washington and Idaho have held
that certain agreements between the Washington Public Power Supply System
("WPPSS") and the WPPSS participants are unenforceable because the participants
did not have the authority to enter into the agreements. While these decisions
are not specifically applicable to agreements entered into by public entities
in other states, they may cause a reexamination of the legal structure and
economic viability of certain projects financed by joint action power agencies,
which might exacerbate some of the problems referred to above and possibly lead
to legal proceedings questioning the enforceability of agreements upon which
payment of these bonds may depend.
Certain of the Municipal Bonds in some Series of the Trust may
be industrial revenue bonds ("IRBs"), including pollution control revenue
bonds, which are tax-exempt securities issued by states, municipalities, public
authorities or similar entities to finance the cost of acquiring, constructing
or improving various industrial projects. These projects are usually operated
by corporate entities. Issuers are obligated only to pay amounts due on the
IRBs to the extent that funds are available from the unexpended proceeds of the
IRBs or receipts or revenues of the issuer under an arrangement between the
issuer and the corporate operator of a
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project. The arrangement may be in the form of a lease, installment sale
agreement, conditional sale agreement or loan agreement, but in each case the
payments to the issuer are designed to be sufficient to meet the payments of
amounts due on the IRBs. Regardless of the structure, payment of IRBs is
solely dependent upon the creditworthiness of the corporate operator of the
project or corporate guarantor. Corporate operators or guarantors may be
affected by many factors which may have an adverse impact on the credit quality
of the particular company or industry. These include cyclicality of revenues
and earnings, regulatory and environmental restrictions, litigation resulting
from accidents or environmentally-caused illnesses, extensive competition and
financial deterioration resulting from leveraged buy-outs or takeovers. The
IRBs in the Series of the Trust may be subject to special or extraordinary
redemption provisions which may provide for redemption at par or, with respect
to original issue discount bonds, at issue price plus the amount of original
issue discount accreted to the redemption date plus, if applicable, a premium.
The Sponsor cannot predict the causes or likelihood of the redemption of IRBs
or other Municipal Bonds in the Series of the Trust prior to the stated
maturity of such Municipal Bonds.
Certain of the Municipal Bonds in some Series of the Trust may
be obligations which are payable from and secured by revenues derived from the
ownership and operation of facilities such as airports, bridges, turnpikes,
port authorities, convention centers and arenas. The major portion of an
airport's gross operating income is generally derived from fees received from
signatory airlines pursuant to use agreements which consist of annual payments
for leases, occupancy of certain terminal space and service fees. Airport
operating income may therefore be affected by the ability of the airlines to
meet their obligations under the use agreements. The air transport industry is
experiencing significant variations in earnings and traffic, due to increased
competition, excess capacity, increased costs, deregulation, traffic
constraints and other factors, and several airlines are experiencing severe
financial difficulties. The Sponsor cannot predict what effect these industry
conditions may have on airport revenues which are dependent for payment on the
financial condition of the airlines and their usage of the particular airport
facility. Similarly, payment on Municipal Bonds related to other facilities is
dependent on revenues from the projects, such as user fees from ports, tolls on
turnpikes and bridges and rents from buildings. Therefore, payment may be
adversely affected by reduction in revenues due to such factors as increased
cost of maintenance, decreased use of a facility, lower cost of alternative
modes of transportation, scarcity of fuel and reduction or loss of rents.
Certain of the Municipal Bonds in some Series of the Trust may
be obligations of issuers which are, or which govern the operation of, schools,
colleges and universities and whose revenues are derived mainly from ad valorem
taxes, or for higher education systems, from tuition, dormitory revenues,
grants and endowments. General problems relating to school bonds include
litigation contesting the state constitutionality of financing public education
in part from ad valorem taxes, thereby creating a disparity in educational
funds available to schools in wealthy areas and schools in poor areas.
Litigation or legislation on this issue may affect the sources of funds
available for the payment of school bonds in the Trusts. General problems
relating to college and university obligations would include the prospect of a
declining percentage of the population consisting of "college" age individuals,
possible inability to raise tuition and fees sufficiently to cover increased
operating costs, the uncertainty of continued receipt of Federal grants and
state funding and new government legislation or regulations which may adversely
affect the revenues or costs of such issuers. All of such issuers have been
experiencing certain of these problems in varying degrees.
Certain of the Municipal Bonds in some Series of the Trust may
be Urban Redevelopment Bonds ("URBs"). URBs have generally been issued under
bond resolutions pursuant to which the revenues and receipts payable under the
arrangements with the operator of a particular project have been assigned and
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<PAGE> 11
pledged to purchasers. In some cases, a mortgage on the underlying project may
have been granted as security for the URBs. Regardless of the structure,
payment of the URBs is solely dependent upon the creditworthiness of the
operator of the project.
Certain of the Municipal Bonds in the Trust may be lease
revenue bonds whose revenues are derived from lease payments made by a
municipality or other political subdivision which is leasing equipment or
property for use in its operation. The risks associated with owning Municipal
Bonds of this nature include the possibility that appropriation of funds for a
particular project or equipment may be discontinued. The Sponsor cannot
predict the likelihood of nonappropriation of funds for these types of lease
revenue Municipal Bonds.
Certain of the Municipal Bonds in some Series of the Trust may
be "zero coupon" bonds, i.e., an original issue discount bond that does not
provide for the payment of current interest. Zero coupon bonds are purchased
at a deep discount because the buyer obtains only the right to receive a final
payment at the maturity of the bond and does not receive any periodic interest
payments. The effect of owning deep discount bonds which do not make current
interest payments (such as the zero coupon bonds) is that a fixed yield is
earned not only on the original investment but also, in effect, on all discount
earned during the life of such obligation. This implicit reinvestment of
earnings at the same rate eliminates the risk of being unable to reinvest the
income on such obligation at a rate as high as the implicit yield on the
discount obligation, but at the same time eliminates the holder's ability to
reinvest at higher rates in the future. For this reason, zero coupon bonds are
subject to substantially greater price fluctuations during periods of changing
market interest rates than are securities of comparable quality which pay
interest currently. For the Federal tax consequences of original issue
discount bonds such as the zero coupon bonds, see "Tax Status of the Trust."
Investors should be aware that many of the Municipal Bonds in
some Series of the Trust are subject to continuing requirements such as the
actual use of Municipal Bond proceeds or manner of operation of the project
financed from Municipal Bond proceeds that may affect the exemption of interest
on such Municipal Bonds from Federal income taxation. Although at the time of
issuance of each of the Municipal Bonds in the Trusts an opinion of bond
counsel was rendered as to the exemption of interest on such obligations from
Federal income taxation, there can be no assurance that the respective issuers
or other obligors on such obligations will fulfill the various continuing
requirements established upon issuance of the Municipal Bonds. A failure to
comply with such requirements may cause a determination that interest on such
obligations is subject to Federal income taxation, perhaps even retroactively
from the date of issuance of such Municipal Bonds, thereby reducing the value
of the Municipal Bonds and subjecting Unitholders to unanticipated tax
liabilities.
Federal bankruptcy statutes relating to the adjustment of
debts of political subdivisions and authorities of states of the United States
provide that, in certain circumstances, such subdivisions or authorities may be
authorized to initiate bankruptcy proceedings without prior notice to or
consent of creditors, which proceedings could result in material and adverse
modification or alteration of the rights of holders of obligations issued by
such subdivisions or authorities.
Certain of the Municipal Bonds in some Series of the Trust
represent "moral obligations" of another governmental entity other than the
issuer. In the event that the issuer of the Municipal Bond defaults in the
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<PAGE> 12
repayment thereof, such other governmental entity lawfully may, but is not
obligated to, discharge the obligation of the issuer to repay such Municipal
Bond.
To the best of the Sponsor's knowledge, as of the date of the
Prospectus, there is no litigation pending with respect to any Municipal Bonds
which might reasonably be expected to have a material adverse effect on the
Trust or any Series thereof. Although the Sponsor is unable to predict whether
any litigation may be instituted, or if instituted, whether such litigation
might have a material adverse effect on the Trust or any Series, the Trust
received copies of the opinions of bond counsel given to the issuing
authorities at the time of original delivery of each of the Municipal Bonds to
the effect that the Municipal Bonds had been validly issued and that the
interest thereon is exempt from Federal income taxes.
DISTRIBUTION REINVESTMENT
Each Unitholder of the Trust may elect to have distributions
of principal (including capital gains, if any) or interest or both
automatically invested without charge in shares of any mutual fund underwritten
or advised by KFS (the "Kemper Funds"), other than those Kemper Funds sold with
a contingent deferred sales charge. Since the portfolio securities and
investment objectives of such Kemper Funds may differ significantly from that
of the Trust, Unitholders should carefully consider the consequences, before
selecting such Kemper Funds for reinvestment. Detailed information with
respect to the investment objectives and the management of the Kemper Funds is
contained in their respective prospectuses, which can be obtained from the
Sponsor, and many investment firms, upon request. An investor should read the
appropriate prospectus prior to making the election to reinvest. Unitholders
who desire to have such distributions automatically reinvested should inform
their broker at the time of purchase or should file with the Program Agent
referred to below a written notice of election.
Unitholders who are receiving distributions in cash may elect
to participate in distribution reinvestment by filing with the Program Agent an
election to have such distributions reinvested without charge. Such election
must be received by the Program Agent at least ten days prior to the Record
Date applicable to any distribution in order to be in effect for such Record
Date. Any such election shall remain in effect until a subsequent notice is
received by the Program Agent. See "Distributions to Unitholders."
The Program Agent is Investors Fiduciary Trust Company. All
inquiries concerning participation in distribution reinvestment should be
directed to Kemper Service Company, service agent for the Program Agent at P.O.
Box 419430, Kansas City, Missouri 64173-0216, telephone (800) 422-2848.
INTEREST AND ESTIMATED LONG-TERM AND CURRENT RETURNS
As of the opening of business on the date indicated therein,
the Estimated Current Returns and the Estimated Long- Term Returns for the
Trust were as set forth under "Essential Information" in Part Two of this
Prospectus. Unitholders choosing distributions quarterly or semi-annually will
receive a slightly higher rate because of the lower Trustee's fees and expenses
under such plans. Estimated Current Returns are calculated by dividing the
estimated net annual interest income per Unit by the Public Offering Price.
The estimated net annual interest income per Unit will vary with changes in
fees and expenses of the Trustee, the sponsor and the Evaluator and with the
principal prepayment, redemption, maturity, exchange or sale of Securities
while
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<PAGE> 13
the Public Offering Price will vary with changes in the offering price of the
underlying Securities; therefore, there is no assurance that the present
Estimated Current Returns will be realized in the future. Estimated Long-Term
Returns are calculated using a formula which (1) takes into consideration, and
determines and factors in the relative weightings of, the market values, yields
(which takes into account the amortization of premiums and the accretion of
discounts) and estimated retirements of all of the Securities in the Trust and
(2) takes into account the expenses and sales charge associated with the Trust
Unit. Since the market values and estimated retirements of the Securities and
the expenses of the Trust will change, there is no assurance that the present
Estimated Long-Term Returns will be realized in the future. Estimated Current
Returns and Estimated Long-Term Returns are expected to differ because the
calculation of Estimated Long-Term Returns reflects the estimated date and
amount of principal returned while Estimated Current Returns calculations
include only net annual interest income and Public Offering Price.
TAX STATUS OF THE TRUST
All Municipal Bonds in the Series of the Trust Fund were
accompanied by copies of opinions of bond counsel given to the issuers thereof
at the time of original delivery of the Municipal Bonds to the effect that the
interest thereon is exempt from all Federal income taxes. In connection with
the offering of Units of the Trust Funds, neither the Sponsor, the Trustee, the
auditors nor their respective counsel have made any review of the proceedings
relating to the issuance of the Municipal Bonds or the basis for such opinions.
Gain realized on the sale or redemption of the Municipal Bonds by the Trustee
or of a Unit by a Unitholder is, however, includable in gross income for
Federal income tax purposes. Such gain does not include any amounts received
in respect of accrued interest or earned original issue discount. It should be
noted that under recently enacted legislation described below that subjects
accretion of market discount on tax-exempt bonds to taxation as ordinary
income, gain realized on the sale or redemption of Municipal Bonds by the
Trustee or of Units by a Unitholder that would have been treated as capital
gain under prior law is treated as ordinary income to the extent it is
attributable to accretion of market discount. Market discount can arise based
on the price a Trust Fund pays for Municipal Bonds or the price a Unitholder
pays for his or her Units. In addition, bond counsel to the issuing
authorities rendered opinions as to the exemption of interest on such Bonds,
when held by residents of the state in which the issuers of such bonds are
located, from state income taxes and, where applicable, local income taxes.
Neither the Sponsor, the Trustee, the Independent Auditors nor
their respective counsel have made any review of the proceedings relating to
the issuance of the Municipal Bonds or the bases for such opinions.
At the time of the closing for the Trusts, Chapman and Cutler,
counsel for the Sponsor, rendered an opinion under then existing law
substantially to the effect that:
Each Series of the Trust Fund is not an association
taxable as a corporation for Federal income tax purposes and
interest and accrued original issue discount on Bonds which is
excludable from gross income under the Internal Revenue Code of 1986
(the "Code") will retain its status when distributed to Unitholders,
except to the extent such interest is subject to the alternative
minimum tax, an additional tax on branches of foreign corporations
and the environmental tax (the "Superfund Tax"), as noted below.
Each Unitholder is considered to be the owner of a pro rata
portion of each asset of the respective Trust Fund in the proportion
that the number of Units of such Trust Fund held by
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<PAGE> 14
him bears to the total number of Units outstanding of such Trust
Fund under subpart E, subchapter J of chapter 1 of the Code and will
have a taxable event when such Trust Fund disposes of a Municipal
Bond, or when the Unitholder redeems or sells his Units.
Unitholders must reduce the tax basis of their Units for their share
of accrued interest received by a Trust Fund, if any, on Municipal
Bonds delivered after the Unitholders pay for their Units to the
extent that such interest accrued on such Municipal Bonds during the
period from the Unitholder's settlement date to the date such
Municipal Bonds are delivered to a Trust Fund and, consequently,
such Unitholders may have an increase in taxable gain or reduction
in capital loss upon the disposition of such Units. Gain or loss
upon the sale or redemption of Units is measured by comparing the
proceeds of such sale or redemption with the adjusted basis of the
Units. If the Trustee disposes of Municipal Bonds (whether by sale,
payment on maturity, redemption or otherwise), gain or loss is
recognized to the Unitholder. The amount of any such gain or loss
is measured by comparing the Unitholder's pro rata share of the
total proceeds from such disposition with the Unitholder's basis for
his or her fractional interest in the asset disposed of. In the
case of a Unitholder who purchases Units, such basis (before
adjustment for earned original issue discount and amortized bond
premium, if any) is determined by apportioning the cost of the
Units among each of the Trust Fund's assets ratably according to
value as of the date of acquisition of the Units. The tax cost
reduction requirements of the Code relating to amortization of bond
premium may, under some circumstances, result in the Unitholder
realizing a taxable gain when his Units are sold or redeemed for an
amount equal to his original cost.
Any proceeds paid under individual policies obtained by
issuers of Bonds which represent maturing interest on defaulted obligations
held by the Trustee will be excludable from Federal gross income if, and to the
same extent as, such interest would have been so excludable if paid in the
normal course by the issuer of the defaulted obligations.
Sections 1288 and 1272 of the Internal Revenue Code of 1986
(the "Code") provide a complex set of rules governing the accrual of original
issue discount. These rules provide that original issue discount accrues
either on the basis of a constant compound interest rate or ratably over the
term of the Municipal Bond, depending on the date the Municipal Bond was
issued. In addition, special rules apply if the purchase price of a Municipal
Bond exceeds the original issue price plus the amount of original issue
discount which would have previously accrued based upon its issue price (its
"adjusted issue price"). The application of these rules will also vary
depending on the value of the Municipal Bond on the date a Unitholder acquires
his Units, and the price the Unitholder pays for his Units. Investors with
questions regarding these Code sections should consult with their tax advisers.
"The Revenue Reconcilliation Act of 1993" (the "Tax Act") was
recently enacted. The Tax Act subjects tax-exempt bonds to the market discount
rules of the Code effective for bonds purchased after April 30, 1993. In
general, market discount is the amount (if any) by which the stated redemption
price at maturity exceeds an investor's purchase price (except to the extent
that such difference, if any, is attributable to original issue discount not
yet accrued). Under the Tax Act, accretion of market discount is taxable as
ordinary income; under prior law the accretion had been treated as capital
gain. Market discount that accretes while a Trust Fund holds a Municipal Bond
would be recognized as ordinary income by the Unitholders when principal
payments are received on the Municipal Bond, upon sale or at redemption
(including early redemption), or upon the sale or redemption of his or her
Units, unless a Unitholder elects to include market discount in taxable
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<PAGE> 15
income as it accrues. The market discount rules are complex and Unitholders
should consult their tax advisers regarding these rules and their application.
In the case of all Unitholders (both individuals and
corporations), interest on all or certain Bonds held by certain Series of the
Trust may be treated as an item of tax preference for purposes of computing the
alternative minimum tax. Accordingly, investments in Units may subject
Unitholders to (or result in increased liability under) the alternative minimum
tax. Due to the complexity of the alternative minimum tax, Unitholders are
urged to consult their tax advisers regarding the impact, if any, of the
alternative minimum tax.
In addition, in the case of certain corporations, the
alternative minimum tax and the Superfund Tax depend upon the corporation's
alternative minimum taxable income, which is the corporation's taxable income
with certain adjustments. One of the adjustment items used in computing the
alternative minimum taxable income and the Superfund Tax of a corporation
(other than an S Corporation, Regulated Investment Company, Real Estate
Investment Trust, or REMIC) is an amount equal to 75% of the excess of such
corporation's "adjusted current earnings" over an amount equal to its
alternative minimum taxable income (before such adjustment item and the
alternative tax net operating loss deduction). "Adjusted current earnings"
includes all tax-exempt interest, including interest on all of the Municipal
Bonds in a Trust Fund. Unitholders are urged to consult their tax advisers
with respect to the particular tax consequences to them including the
corporate alternative minimum tax, the Superfund Tax and the branch profit tax
imposed by Section 884 of the Code.
Counsel for the Sponsor has also advised that under Section
265 of the Code, interest on indebtedness incurred or continued to purchase or
carry Units of a Trust Fund is not deductible for Federal income tax purposes.
The Internal Revenue Service has taken the position that such indebtedness need
not be directly traceable to the purchase or carrying of Units (however, these
rules generally do not apply to interest paid on indebtedness incurred to
purchase or improve a personal residence). Also, under Section 265 of the
Code, certain financial institutions that acquire Units would generally not be
able to deduct any of the interest expense attributable to ownership of such
Units. Investors with questions regarding these issues should consult with
their tax advisers.
In the case of certain Municipal Bonds in the Trust Funds, the
opinions of bond counsel indicate that interest on such securities received by
a "substantial user" of the facilities being financed with the proceeds of
these securities or persons related thereto, for periods while such securities
are held by such a user or related person, will not be excludable from Federal
gross income, although interest on such securities received by others would be
excludable from Federal gross income. "Substantial user" and "related person"
are defined under U.S. Treasury Regulations. Any person who believes that he
or she may be a "substantial user" or a "related person" as so defined should
contact his or her tax adviser.
Under existing law, the Trust Funds are not associations
taxable as a corporation and the income of the Trust Funds will be treated as
the income of the Unitholders under the income tax laws of the State of
Missouri.
All statements of law in the Prospectus concerning exclusion
from gross income for Federal, state or other tax purposes are the opinions of
counsel and are to be so construed.
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<PAGE> 16
At the respective times of issuances of the Bonds, opinions
relating to the validity thereof and to the exclusion of interest thereon from
Federal gross income are rendered by bond counsel to the respective issuing
authorities. Neither the Sponsor nor Chapman and Cutler has made any special
review for the Trust Funds of the proceedings relating to the issuance of the
Bonds or of the basis for such opinions.
For taxpayers other than corporations, net capital gains are
presently subject to a maximum marginal stated tax rate of 28 percent.
However, it should be noted that legislative proposals are introduced from time
to time that affect tax rates and could affect relative differences at which
ordinary income and capital gains are taxed. Under the Code, taxpayers must
disclose to the Internal Revenue Service the amount of tax-exempt interest
earned during the year.
Section 86 of the Code, in general, provides that fifty
percent of Social Security benefits are includible in gross income to the
extent that the sum of "modified adjusted gross income" plus fifty percent of
the Social Security benefits received exceeds a "base amount". The base
amount is $25,000 for unmarried taxpayers, $32,000 for married taxpayers filing
a joint return and zero for married taxpayers who do not live apart at all
during the taxable year and who file separate returns. Modified adjusted gross
income is adjusted gross income determined without regard to certain otherwise
allowable deductions and exclusions from gross income and by including tax
exempt interest. To the extent that Social Security benefits are includible in
gross income, they will be treated as any other item of gross income.
In addition, under the Tax Act, for taxable years beginning
after December 31, 1993, up to 85 percent of Social Security benefits are
includible in gross income to the extent that the sum of "modified adjusted
gross income" plus fifty percent of Social Security benefits received exceeds
an "adjusted base amount." The adjusted base amount is $34,000 for married
taxpayers, $44,000 for married taxpayers filing a joint return and zero for
married taxpayers who do not live apart at all times during the taxable year
and who file separate returns.
Although tax-exempt interest is included in modified adjusted
gross income solely for the purpose of determining what portion, if any, of
Social Security benefits will be included in gross income, no tax exempt
interest, including that received from the Trust Fund, will be subject to tax.
A taxpayer whose adjusted gross income already exceeds the base amount must
include fifty percent of his Social Security benefits in gross income whether
or not he receives any tax-exempt interest. A taxpayer whose modified adjusted
gross income (after inclusion of tax-exempt interest) does not exceed the base
amount need not include any Social Security benefits in gross income.
For a discussion of the state tax status of income earned on
Units of a state trust, see the discussion of tax status for the applicable
trust. Except as noted therein, the exemption of interest on state and local
obligations for Federal income tax purposes discussed above does not
necessarily result in exemption under the income or other tax laws of any state
or city. The laws of the several states vary with respect to the taxation of
such obligations.
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<PAGE> 17
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. Units of each Series of the Trust are
offered at the Public Offering Price, plus accrued interest to the expected
settlement date. The Public Offering Price per Unit is equal to the aggregate
bid side evaluation of the Municipal Bonds in the Series' portfolio (as
determined pursuant to the terms of a contract with the Evaluator, by Kenny
Information Services, Inc. a non-affiliated firm regularly engaged in the
business of evaluating, quoting or appraising comparable securities), plus or
minus cash, if any, in the Principal Account, held or owned by such Series of
the Trust, divided by the number of outstanding Units of the Series, plus the
sales charge applicable. The sales charge is based upon the dollar weighted
average maturity of the Trust and is determined in accordance with the table
set forth below. For purposes of this computation, Municipal Bonds will be
deemed to mature on their expressed maturity dates unless: (a) the Municipal
Bonds have been called for redemption or funds or securities have been placed
in escrow to redeem them on an earlier call date, in which case such call date
will be deemed to be the date upon which they mature; or (b) such Municipal
Bonds are subject to a "mandatory tender", in which case such mandatory tender
will be deemed to be the date upon which they mature. The effect of this
method of sales charge computation will be that different sales charge rates
will be applied to the Trust based upon the dollar weighted average maturity of
such Trust's portfolio, in accordance with the following schedule:
<TABLE>
<CAPTION>
DOLLAR PERCENT OF PERCENT OF NET
WEIGHTED AVERAGE PUBLIC OFFERING AMOUNT
YEARS TO MATURITY PRICE INVESTED
----------------- -------------- ----------------
<S> <C> <C>
0 to 3.99 years . . . . . . . . . . . . . . . . . . . . . 2.00% 2.041%
4 to 7.99 years . . . . . . . . . . . . . . . . . . . . . 3.50 3.627
8 to 14.99 years . . . . . . . . . . . . . . . . . . . . 4.50 4.712
15 or more years . . . . . . . . . . . . . . . . . . . . 5.50 5.820
</TABLE>
The sales charge per Unit will be reduced as set forth below:
<TABLE>
<CAPTION>
DOLLAR WEIGHTED AVERAGE
YEARS TO MATURITY*2
4 TO 7.99 8 TO 14.99 15 OR MORE
--------------------------------------
AMOUNT OF INVESTMENT SALES CHARGE (% OF PUBLIC OFFERING PRICE)
-------------------- -----------------------------------------
<S> <C> <C> <C>
$1 to $99,999 . . . . . . . . . . . . . . . 3.50% 4.50% 5.50%
$100,000 to $499,999 . . . . . . . . . . . 3.25 4.25 5.00
$500,000 to $999,999 . . . . . . . . . . . 3.00 4.00 4.50
$1,000,000 or more . . . . . . . . . . . . 2.75 3.75 4.00
</TABLE>
The reduced sales charges as shown on the chart above will
apply to all purchases of Units on any one
- --------------------------
* If the dollar weighted average maturity of the Trust is under
3.99 years, the sales charge is 2% and 1.5% of the Public Offering
Price for purchases of $1 to $249,999 and $250,000 or more,
respectively.
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<PAGE> 18
day by the same purchaser from the same firm and for this purpose purchases of
Units of a Series of the Trust will be aggregated with concurrent purchases of
Units of any other unit investment trust that may be offered by the Sponsor.
Additionally, Units purchased in the name of a spouse or child (under 21) of
such purchaser will be deemed to be additional purchases by such purchaser.
The reduced sales charges will also be applicable to a trust or other fiduciary
purchasing for a single trust estate or single fiduciary account.
The Sponsor intends to permit officers, directors and
employees of the Sponsor and, at the discretion of the Sponsor and Evaluator,
registered representatives of selling firms to purchase Units of the Trust
without a sales charge, although a transaction processing fee may be imposed
on such trades.
The Public Offering Price per Unit of a Series of the Trust on
the date shown on the cover page of Part Two of the Prospectus or on any
subsequent date will vary from the amounts stated under "Essential Information"
in Part Two due to fluctuations in the prices of the underlying Municipal
Bonds. The aggregate bid side evaluation of the Municipal Bonds shall be
determined (a) on the basis of current bid prices of the Municipal Bonds, (b)
if bid prices are not available for any particular Municipal Bond, on the basis
of current bid prices for comparable bonds, (c) by determining the value of the
Municipal Bonds on the bid side of the market by appraisal, or (d) by any
combination of the above.
The foregoing evaluations and computations shall be made as of
the Evaluation Time stated under "Essential Information" in Part Two, on each
business day effective for all sales made during the proceeding 24-hour period,
and for purposes of resales and repurchase of Units.
The interest on the Municipal Bonds in a Series of the Trust,
less the estimated fees and expenses, is estimated to accrue in the annual
amounts per Unit set forth under "Essential Information" in Part Two. The
amount of net interest income which accrues per Unit may change as Municipal
Bonds mature or are redeemed, exchanged or sold, or as the expenses of such
Series of the Trust change or as the number of outstanding Units of the Series
changes.
Payment for Units must be made on or before the fifth business
day following purchase (the "settlement date"). A purchaser becomes the owner
of Units on the settlement date. If a Unitholder desires to have certificates
representing Units purchased, such certificates will be delivered as soon as
possible following a written request therefor. For information with respect to
redemption of Units purchased, but as to which certificates requested have not
been received, see "Redemption" below.
PUBLIC DISTRIBUTION OF UNITS. The Sponsor has qualified Units
for sale in all states. Units will be sold through dealers who are members of
the National Association of Securities Dealers, Inc. and through others. Sales
may be made to or through dealers at prices which represent discounts from the
Public Offering Price as set forth below. Certain commercial banks are making
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, in an amount as shown in the tables below. Under the Glass-Steagall
Act, banks are prohibited from underwriting Trust 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.
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<PAGE> 19
<TABLE>
<CAPTION>
DOLLAR WEIGHTED AVERAGE
YEARS TO MATURITY*3
4 TO 7.99 8 TO 14.99 15 OR MORE
----------------------------------------------------------
DISCOUNT PER UNIT
AMOUNT OF INVESTMENT (% OF PUBLIC OFFERING PRICE)
-------------------- ----------------------------
<S> <C> <C> <C>
$1 to $99,999 . . . . . . . . . . . . . . . 2.00% 3.00% 4.00%
$100,000 to $499,999 . . . . . . . . . . . 1.75 2.75 3.50
$500,000 to $999,999 . . . . . . . . . . . 1.50 2.50 3.00
$1,000,000 or more . . . . . . . . . . . . 1.25 2.25 2.50
</TABLE>
The Sponsor reserves the right to change the discounts set
forth above from time to time. In addition to such discounts, the Sponsor may,
from time to time, pay or allow an additional discount, in the form of cash or
other compensation, to dealers employing registered representatives who sell,
during a specified time period, a minimum dollar amount of Units of the Trust
and other unit investment trusts underwritten by the Sponsor. The difference
between the discount and the sales charge will be retained by the Sponsor.
The Sponsor reserves the right to reject, in whole or in part,
any order for the purchase of Units
PROFITS OF SPONSOR. The Sponsor will retain a portion of the
sales charge of each Unit sold, representing the difference between the Public
Offering Price of the Units and the discounts allowed to firms selling such
Units. The Sponsor may realize additional profit or loss as a result of the
possible change in the daily evaluation of the Municipal Bonds in a Series of
the Trust, since the value of its inventory of Units may increase or decrease.
MARKET FOR UNITS
While not obligated to do so, the Sponsor intends to, subject
to change at any time, maintain a market for Units of each Series of the Trust
offered hereby and to offer to purchase said Units at prices, as determined by
the Sponsor and Evaluator, based on the aggregate bid prices of the underlying
Municipal Bonds of such Series, together with accrued interest to the expected
date of settlement. Accordingly, Unitholders who wish to dispose of their
Unit should inquire of their broker or financial services representative as to
the current market price of the Units prior to making a tender for redemption
to the Trustee.
REDEMPTION
If more favorable terms do not exist in the over-the-counter
market described above, Unitholders of a Series of the Trust may cause their
Units to be redeemed by the Trustee by making a written request to the Trustee,
Investors Fiduciary Trust Company, P.O. Box 419430, Kansas City, Missouri
64173-0216 and, in the case of Units evidenced by a certificate, by tendering
such certificate to the Trustee, properly endorsed or accompanied by a
- ------------------------
* If the dollar weighted average maturity of a Trust is under
3.99 years, the concession or agency commission is 1.00% of the
Public Offering Price.
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<PAGE> 20
written instrument or instruments of transfer in form satisfactory to the
Trustee. Unitholders must sign such written request, and such certificate or
transfer instrument, exactly as their names appear on the records of the
Trustee and on any certificate representing the Units to be redeemed. If the
amount of the redemption is $25,000 or less and the proceeds are payable to the
Unitholder(s) of record at the address of record, no signature guarantee is
necessary for redemptions by individual account owners (including joint
owners). Additional documentation may be requested, and a signature guarantee
is generally required, from corporations, executors, administrators, trustees,
guardians or associations. The signatures must be guaranteed by a commercial
bank or trust company, by a saving and loan association or by a member firm of
a national securities exchange. A certificate should only be sent by
registered or certified mail for the protection of the Unitholder. Since
tender of the certificate is required for redemption when one has been issued,
Units represented by a certificate cannot be redeemed until the certificate
representing the Units has been received by the purchaser.
Redemption shall be made by the Trustee on the seventh
calendar day following the day on which a tender for redemption is received, or
if the seventh calendar day is not a business day, on the first business day
prior thereto (the "Redemption Date"), by payment of cash equivalent to the
Redemption Price, determined as set forth below under "Computation of
Redemption Price", as of the Evaluation Time stated under "Essential
Information" in Part Two, next following such tender, multiplied by the number
of Units being redeemed. The price received upon redemption might be more or
less than the amount paid by the Unitholder depending on the value of the
Municipal Bonds in the portfolio at the time of redemption. Any Units redeemed
shall be cancelled and any undivided fractional interest in that Series of the
Trust will be extinguished.
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of the principal amount
of a Unit redemption if the Trustee has not been furnished the redeeming
Unitholder's tax identification number in the manner required by such
regulations. Any amount so withheld is transmitted to the Internal Revenue
Service and may be recovered by the Unitholder only when filing a tax return.
Under normal circumstances the Trustee obtains the Unitholder's tax
identification number from the selling broker. However, any time a Unitholder
elects to tender Units for redemption, such Unitholder should make sure that
the Trustee has been provided a certified tax identification number in order to
avoid this possible "back-up withholding." In the event the Trustee has not
been previously provided such number, one must be provided at the time
redemption is requested.
Any amounts paid on redemption representing interest shall be
withdrawn from the Interest Account for such Series to the extent that funds
are available for such purpose. All other amounts paid on redemption shall be
withdrawn from the Principal Account of such Series. The Trustee is empowered
to sell Municipal Bonds from the portfolio of a Series of the Trust in order to
make funds available for the redemption of Units of such Series. Such sale may
be required when Municipal Bonds would not otherwise be sold and might result
in lower prices than might otherwise be realized. To the extent Municipal
Bonds are sold, the size and diversity of that Series will be reduced.
The Trustee is irrevocably authorized in its discretion, if
the Sponsor does not elect to purchase any Unit tendered for redemption, in
lieu of redeeming such Units, to sell such Units in the over-the counter market
for the account of tendering Unitholders at prices which will return to such
Unitholders amounts in cash, net after brokerage commissions, transfer taxes
and other charges, equal to or in excess of Redemption Price for such Units.
In the event of any such sale, the Trustee shall pay the net proceeds thereof
to the Unitholders on the day they would otherwise be entitled to receive
payment of the Redemption Price.
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The right of redemption may be suspended and payment postponed
(1) for any period during which the New York Stock Exchange is closed, other
than customary weekend and holiday closings, or during which (as determined by
the Securities and Exchange Commission) trading on the New York Stock Exchange
is restricted; (2) for any period during which an emergency exists as a result
of which disposal by the Trustee of Municipal Bonds is not reasonably
practicable or it is not reasonably practicable fairly to determine the value
of the underlying Municipal Bonds in accordance with the Agreement; or (3) for
such other period as the Securities and Exchange Commission may by order
permit. The Trustee is not liable to any person or in any way for any loss or
damage which may result from any such suspension or postponement.
COMPUTATION OF REDEMPTION PRICE. The Redemption Price for
Units of each Series of the Trust is computed by the Evaluator as of the
Evaluation Time stated under "Essential Information" in Part Two next occurring
after the tendering of a Unit for redemption and on any other business day
desired by it, by
A. adding (1) the cash on hand in such Series
of the Trust; (2) the aggregate value of the Municipal Bonds held in such
Series of the Trust, as determined by the Evaluator on the basis of bid prices
therefor; and (3) interest accrued and unpaid on the Municipal Bonds in such
Series of the Trust as of the date of computation; and
B. deducting therefrom (1) amounts representing
any applicable taxes or governmental charges payable out of the Series of the
Trust and for which no deductions have been previously made for the purpose of
additions to the Reserve Account described under "Expenses of the Trust"; (2)
amounts representing estimated accrued expenses of such Series including, but
not limited to, unpaid fees and expenses of the Trustee (including legal and
auditing fees), the Evaluator, the Sponsor, and bond counsel, if any; (3) cash
held for distribution to Unitholders of record as of the business day prior to
the evaluation being made; and (4) other liabilities incurred by such Series;
and
C. finally, dividing the results of such
computation by the number of Units of such Series of the Trust outstanding as
of the date thereof.
UNITHOLDERS
OWNERSHIP OF UNITS. Ownership of Units of a Series of the
Trust will not be evidenced by a certificate unless a Unitholder or the
Unitholder's registered broker/dealer makes a written request to the Trustee.
Units are transferable by making a written request to the Trustee and, in the
case of Units evidenced by a certificate, presenting and surrendering such
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent registered or
certified mail for the protection of the Unitholder. Unitholders must sign such
written request, and such certificate or transfer instrument, exactly as their
names appear on the records of the Trustee and on any certificate representing
the Units to be transferred. Such signatures must be guaranteed by a
commercial bank or trust company, savings and loan association or by a member
firm of a national securities exchange.
Units may be purchased and certificates, if requested, will be
issued in denominations of one Unit or any whole Unit multiple thereof subject
to any minimum requirement established by the sponsor from time to time. Any
certificate issued will be numbered serially for identification, issued in
fully registered form and will be transferable only on the books of the
trustee. The Trustee may require a Unitholder to pay a reasonable fee, to be
determined in the sole discretion of the Trustee, for each certificate
re-issued or transferred, and to pay any governmental charge
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that may be imposed in connection with each such transfer or interchange. The
Trustee at the present time does not intend to charge for the normal transfer
or interchange of certificates. Destroyed, stolen, mutilated or lost
certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity (generally amounting to 3% of the market value of the Units),
affidavit of loss, evidence of ownership and payment of expenses incurred.
DISTRIBUTIONS TO UNITHOLDERS. Interest received by a Series
of the Trust, including any portion of the proceeds from a disposition of
Municipal Bonds which represents accrued interest, is credited by the Trustee
to the Interest Account for such Series. All other receipts are credited by
the Trustee to a separate Principal Account for such Series. During each year
the distributions to the Unitholders of each Series of the Trust as of each
Record Date (see "Essential Information" in Part Two) will be made on the
following Distribution Date or shortly thereafter and shall consist of an
amount substantially equal to one-twelfth, one-quarter or one-half (depending
on the distribution option selected) of such holders' pro rata share of the
estimated annual income to the Interest Account for such Series, after
deducting estimated expenses. In addition, the Trustee will distribute on each
semi-annual Distribution Date or shortly thereafter, to each Unitholder of
record of a Series of the Trust on the preceding Record Date, an amount
substantially equal to such holders' pro rata share of the cash balance, if
any, in the Principal Account of such Series (but not less than $1.00 per Unit)
computed as of the close of business on the preceding Record Date. Persons who
purchase Units of a Series of the Trust between a Record Date and a
Distribution Date will receive their first distribution on the second
Distribution Date following their purchase of Units. All distributions of
principal and interest will be paid in cash unless a Unitholder has elected to
reinvest principal and/or interest payments in shares of one of the
reinvestment funds. See "Distribution Reinvestment." Interest distributions
per Unit for each Series will be in the amounts shown under "Essential
Information" in Part Two and may change as underlying Municipal Bonds are
redeemed, paid or sold, or as expenses of such Series of the Trust change or
the number of outstanding Units of such Series changes.
Since interest on Municipal Bonds in each Series of the Trust
is payable at varying intervals, usually in semiannual installments, and
distributions of income are made to Unitholders of the Series of the Trust at
what may be different intervals from receipt of interest, the interest accruing
to such Series of the Trust may not be equal to the amount of money received
and available for distribution from the Interest Account for such Series.
Therefore, on each Distribution Date the amount of interest actually on deposit
in the Interest Account and available for distribution may be slightly more or
less than the interest distribution made. In order to eliminate fluctuations
in interest distributions resulting from such variances, the Trustee is
authorized by the Agreements to advance such amounts as may be necessary to
provide interest distributions of approximately equal amounts. The Trustee
will be reimbursed, without interest, for any such advances from funds
available in the Interest Account of such Series.
Because the interest to which Unitholders of a Series of the
Trust are entitled will at most times exceed the amount available for
distribution, there will almost always remain an item of accrued interest that
is accounted for daily and is added to the value of each Unit. If Unitholders
sell or redeem all or a portion of their Units, they will be paid their
proportionate share of the accrued interest of such Series of the Trust to, but
not including, the fifth business day after the date of sale or to the date of
tender in the case of a redemption.
Unitholders purchasing Units will initially receive
distributions in accordance with the election of the prior owner. Unitholders
desiring to change their distribution option may do so by sending written
notice to the Trustee, together with their certificate (if one was issued).
Certificates should only be sent by registered or certified mail to minimize
the possibility of loss. If written notice and any certificate are received by
the Trustee not later than January 1 or July 1 of a year, the change will
become effective on January 2 for distributions commencing with
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February 15 or August 15, respectively, of that year. If notice is not
received by the Trustee, the Unitholder will be deemed to have elected to
continue with the same option.
STATEMENTS TO UNITHOLDERS. With each distribution, the
Trustee will furnish each Unitholder a statement of the amount of interest and
the amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit.
The accounts of each Series of the Trust are required to be
audited annually, at the Series' expense, by independent certified public
accountants designated by the Sponsor, unless the Trustee determines that such
an audit would not be in the best interest of the Unitholders of such Series of
the Trust. The accountants' report will be furnished by the Trustee to any
Unitholder of such Series of the Trust upon written request.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each person who at any time during
calendar year was a Unitholder of such Series of the Trust a statement covering
the calendar year, setting forth:
A. As to the Interest Account for such Series:
1. The amount of interest received on the
Municipal Bonds and the percentage of such amount by states and
territories in which the issuers of such Bonds are located;
2. The amount paid from the Interest account
representing accrued interest of any Units redeemed;
3. The deductions from the Interest Account for
applicable taxes, if any, fees and expenses of the Trustee, the
Evaluator, and, if any, of bond counsel;
4. Any amounts credited by the Trustee to a
Reserve Account described under "Expense of the Trust"; and
5. The net amount remaining after such payment and
deductions, expressed both as a total dollar amount and a dollar
amount per Unit outstanding on the last business day of such
calendar year.
B. As to the Principal Account for such Series:
1. The dates of the maturity, liquidation or
redemption of any of the Municipal Bonds and the net proceeds
received therefrom excluding any portion credited to the Interest
Account;
2. The amount paid from the Principal Account
representing the principal of any Units redeemed;
3. The deductions from the Principal Account for
payment of taxes, if any, fees and expenses of the Trustee, the
Evaluator, and, if any, of bond counsel;
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4. The amounts credited by the Trustee to a Reserve Account
described under "Expenses of the Trust"; and
5. The net amount remaining after distributions of principal
and deductions, expressed both as a dollar amount and as a dollar
amount per Unit outstanding on the last business day of such
calendar year.
C. The following information:
1. A list of the Municipal Bonds in such Series as of the
last business day of such calendar year;
2. The number of Units of such Series outstanding on the
last business day of such calendar year;
3. The Redemption Price of such Series based on the last
Trust Evaluation made during such calendar year;
4. The amount actually distributed during such
calendar year from the Interest and Principal Accounts of such
Series separately stated, expressed both as total dollar amounts
and as dollar amounts per Unit outstanding on the Record Date for
each such distribution.
RIGHTS OF UNITHOLDERS. A Unitholder may at any time tender
Units to the Trustee for redemption. No Unitholder shall have the right to
control the operation and management of the Trust or any Series thereof in any
manner, except to vote with respect to amendment of the Agreement or
termination of a Series of the Trust. The death or incapacity of any
Unitholder will not operate to terminate any Series of the Trust nor entitle
legal representatives or heirs to claim an accounting or to bring any action or
proceeding in any court for partition for winding up of the Trust.
INVESTMENT SUPERVISION
The Sponsor may not alter the portfolio of a Series of the
Trust by the purchase, sale or substitution of Municipal Bonds, except in the
special circumstances noted below. Thus, with the exception of the redemption
or maturity of Municipal Bonds in accordance with their terms, and/or the sale
of Municipal Bonds to meet redemption requests, the assets of each Series of
the Trust will remain unchanged under normal circumstances.
The Sponsor may direct the Trustee to dispose of Municipal
Bonds the value of which has been affected by certain adverse events including
default in the payment of principal or interest, institution of certain legal
proceedings, default under other documents which may adversely affect debt
service, default in the payment of principal or interest on other obligations
of the same issuer, decline in projected income pledged for debt service on
revenue bonds, or decline in price or the occurrence of other market factors,
including advance refunding, so that in the opinion of the Sponsor the
retention of such Bonds in a Series of the Trust would be detrimental to the
interest of the Unitholders. The proceeds from any such sales, exclusive of
any portion which represents accrued interest, will be credited to the
Principal Account of such Series for distribution to the Unitholders.
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The Sponsor is required to instruct the Trustee to reject any
offer made by an issuer of the Municipal Bonds to issue new obligation in
exchange or substitution for any of such Municipal Bonds pursuant to a
refunding financing plan, except that the Sponsor may instruct the Trustee to
accept or reject such an offer or to take any other action with respect thereto
as the Sponsor may deem proper if (a) the issuer is in default with respect to
such Municipal Bonds; or (b) in the written opinion of the Sponsor, there is a
reasonable basis to believe that the issuer will default with respect to such
Municipal Bonds in the foreseeable future. Any obligations 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 Municipal Bonds
originally deposited thereunder. Within five days after such deposit, notice
of such exchange and deposit shall be given by the Trustee, to each Unitholder
of such Series of the Trust registered on the books of the Trustee, including
an identification of the Municipal Bonds eliminated and the Municipal Bonds
substituted therefor.
ADMINISTRATION OF THE TRUST
THE TRUSTEE. The Trustee, Investors Fiduciary Trust Company,
is a trust company specializing in investment related services, organized and
existing under the laws of Missouri, having its trust office at 127 West 10th
Street, Kansas City, Missouri 64105. The Trustee is subject to supervision and
examination by the Division of Finance of the State of Missouri and the Federal
Deposit Insurance Corporation. Investors Fiduciary Trust Company is jointly
owned by DST Systems, Inc. and Kemper Financial Services, Inc., an affiliate of
the Sponsor. See "The Sponsor."
The Trustee, whose duties are ministerial in nature, has not
participated in selecting the portfolio of any Series of the Trust. For
information relating to the responsibilities of the Trustee under the
Agreement, reference is made to the material set forth under "Unitholders."
In accordance with the Agreement, the Trustee shall keep
proper books of record and account of all transactions at its office. Such
records shall include the name and address of, and the number of Units held by,
every Unitholder of a Series of the Trust. Such books and records shall be
open to inspection by any Unitholder of such Series at all reasonable times
during the usual business hours. The Trustee shall make such annual or other
reports as may from time to time be required under any applicable state or
Federal statute, rule or regulation. The Trustee shall keep a certified copy
or duplicate original of the Agreement on file in its office available for
inspection at all reasonable times during usual business hours by any
Unitholder of such Series, together with a current list of the Municipal Bonds
held in such Series of the Trust. Pursuant to the Agreement, the Trustee may
employ one or more agents for the purpose of custody and safeguarding of
Municipal Bonds comprising the portfolio.
Under the Agreement, the Trustee or any successor trustee may
resign and be discharged of its duties created by the Agreement by executing an
instrument in writing and filing the same with the Sponsor.
The Trustee or successor trustee must mail a copy of the
notice of resignation to all Unitholders then of record, not less than sixty
days before the date specified in such notice when such resignation is to take
effect. The Sponsor upon receiving notice of such resignation is obligated to
appoint a successor trustee promptly. If, upon such resignation, no successor
trustee 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. In case the Trustee becomes
incapable of acting or is adjudged a bankrupt or is taken over by public
authorities, the Sponsor may remove the Trustee and appoint a successor trustee
as provided in the Agreement. Notice of such
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removal and appointment shall be mailed to each Unitholder by the Sponsor.
Upon execution of a written acceptance of such appointment by a successor
trustee, all the rights, powers, duties and obligations of the original Trustee
shall vest in successor.
The Trustee shall be a corporation organized under the laws of
the United States or any state thereof, which is authorized under such laws to
exercise trust powers. The Trustee shall have at all times an aggregate
capital, surplus and undivided profits of not less than $2,000,000.
THE EVALUATOR. Kemper Unit Investment Trusts, a service of
Kemper Securities, Inc., the Sponsor, also serves as Evaluator. The Evaluator
may resign or be removed by the Trustee which is to use its best efforts to
appoint a satisfactory successor. Such resignation or removal shall become
effective upon 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. Notice of such
resignation or removal and appointment shall be mailed by the Trustee to each
Unitholder. At the present time, pursuant to a contract with the Evaluator,
Kenny Information Services, Inc., a non-affiliated firm regularly engaged in
the business of evaluating, quoting or appraising comparable securities,
provides portfolio evaluations of the Municipal Bonds in the Trust which are
then reviewed by the Evaluator. In the event the Sponsor is unable to obtain
current evaluations from Kenny Information Systems, Inc., it may make its own
evaluations or it may utilize the services of any other non-affiliated
evaluator or evaluators it deems appropriate.
AMENDMENT AND TERMINATION. The Agreement may be amended by
the Trustee and the Sponsor without the consent of any of the Unitholders: (1)
to cure any ambiguity or to correct or supplement any provision 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 provisions as shall not adversely
affect the interests of the Unitholders. The Agreement may also be amended in
any respect by the Sponsor and the Trustee, or any of the provisions thereof
may be waived, with the consent of the holders of Units representing 66-2/3%
of the Units then outstanding, provided that no such amendment or waiver will
reduce the interest of any Unitholder without the consent of such Unitholder or
reduce the percentage of Units required to consent to any such amendment or
waiver without consent of all Unitholders. In no event shall the Agreement be
amended to increase the number of Units of a Series issuable thereunder or to
permit, except in accordance with the provisions of the Agreement, the
acquisition of any Municipal Bonds in addition to or in substitution for those
in any Series of the Trust. The Trustee shall promptly notify Unitholders of
the substance of any such amendment.
The Agreement provides that each Series of the Trust shall
terminate upon the maturity, redemption or other disposition, as the case may
be, of the last of Municipal Bonds held in such Series. If the value of a
Series of the Trust shall be less than the applicable minimum value stated
under "Essential Information" in Part Two the Trustee may, in its discretion,
and shall, when so directed by the Sponsor, terminate such Series of the Trust.
A Series of the Trust may be terminated at any time by the holders of Units
representing 66-2/3% of the Units of such Series then outstanding.
Notwithstanding the foregoing, in no event shall a Series of the Trust continue
beyond the mandatory termination date shown in Part Two under "Essential
Information" or a date which is twenty years after the death of the last
survivor of six persons named in the Agreement, whichever occurs first. In the
event of termination, written notice thereof will be sent by the Trustee to all
Unitholders of such Series. Within a reasonable period after termination, the
Trustee will sell any Municipal Bonds remaining in that Series of the Trust
and, after paying all expenses and charges incurred by the Series, will
distribute to Unitholders of such Series (upon surrender for cancellation of
certificates for Units, if issued) their pro rata share of the balances
remaining in the Interest and
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Principal Accounts of such Series.
LIMITATIONS ON LIABILITY. The Sponsor: The Sponsor is liable
for the performance of its obligations arising from the responsibilities under
the Agreement, but will be under no liability to the Unitholders for taking any
action or refraining from any action in good faith pursuant to the Agreement or
for errors in judgment, except in cases of its own gross negligence, bad faith
or willful misconduct. The Sponsor shall not be liable or responsible in any
way for depreciation or loss incurred by reason of the sale of any Municipal
Bonds.
The Trustee: The Agreement provides that the Trustee shall be
under no liability for any action taken in good faith in reliance upon prima
facie properly executed documents or for the disposition of monies, Municipal
Bonds, or certificate except by reason of its own gross negligence, bad faith
or willful misconduct, nor shall the Trustee be liable or responsible in any
way for depreciation or loss incurred by reason of the sale by the Trustee of
any Municipal Bonds. In the event that the Sponsor shall fail to act, the
Trustee may act and shall not be liable for any such action taken in good
faith. The Trustee shall not be personally liable for any taxes or other
governmental charges imposed upon or in respect of the Municipal Bonds or upon
the interest thereon. In addition, the Agreement contains other customary
provisions limiting the liability of the Trustee. The Trustee, whose duties
are ministerial, did not participate in the selection of Municipal Bonds for
the Series of the Trust.
The Evaluator: The Trustee and Unitholders may rely on any
evaluation furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. The Agreement provides that the determinations made by the
Evaluator 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 or Unitholders for errors in judgment, but shall be
liable only for its gross negligence, lack of faith or willful misconduct.
EXPENSES OF THE TRUST
The Sponsor will not charge any Series of the Trust an
advisory fee and will receive no fee from the Trust for services performed as
Sponsor. The Sponsor paid all the expenses of creating and establishing the
Trust, including the cost of the initial preparation, printing and execution of
the Prospectus, Agreement and the certificates, legal and accounting expenses,
advertising and selling expenses, payment of closing fees, expenses of the
Trustee, initial evaluation fees and other out-of-pocket expenses.
The Trustee receives for its services a fee calculated on the
basis of the annual rate set forth under "Essential Information" in Part Two
per $1,000 principal amount of Municipal Bonds in each Series of the Trust,
based on the largest aggregate principal amount of Municipal Bonds in such
Series of the Trust at any time during the monthly, quarterly or semi-annual
period, as appropriate. The Trustee also receives indirect benefits to the
extent that it holds funds on deposit in the various non-interest bearing
accounts created pursuant to the Agreement; however, the Trustee is also
authorized by the Agreement to make from time to time certain non-interest
bearing advances to the Series of the Trust. See "Unitholders-Distributions
to Unitholders."
For evaluation of Municipal Bonds in a Series of the Trust,
the Evaluator receives a fee, calculated on an annual rate as set forth under
"Essential Information" in Part Two, based upon the largest aggregate principal
amount of Municipal Bonds in such Series of the Trust at any time during such
monthly period.
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The Trustee's and Evaluator's fees are payable monthly on or
before each Distribution Date by deductions from the Interest Account of such
Series to the extent funds are available and then from the Principal Account of
such Series. Both fees may be increased without approval of Unitholders by
amounts not exceeding a proportionate increase in the Consumer Price Index
entitled "All Services Less Rent of Shelter", published by the United States
Department of Labor, or any equivalent index substituted therefor.
The following additional charges are or may be incurred by a
Series of the Trust: (a) fees for the Trustee's extraordinary services; (b)
expenses of the Trustee (including legal and auditing expenses, but not
including any fees and expenses charged by any agent for custody and
safeguarding of Municipal Bonds) and of bond counsel, if any; (c) various
governmental charges; (d) expenses and costs of any action taken by the Trustee
to protect the Trust or any series thereof, or the rights and interests of the
Unitholders; (e) indemnification of the Trustee for any loss, liability or
expense incurred by it in the administration of the Trust or any Series without
gross negligence, bad faith or willful misconduct on its part; (f)
indemnification of the Sponsor for any loss, liability or expense incurred in
acting as Depositor of a Series of the Trust without gross negligence, bad
faith or willful misconduct; and (g) expenditures incurred in contacting
Unitholders upon termination of a Series of the Trust. The fees and expenses
set forth herein are payable out of the appropriate Series of the Trust and,
when owed to the Trustee, are secured by a lien on the assets of such Series.
Fees and expenses of a Series of the Trust shall be deducted
from the Interest Account of such Series, or, to the extent funds are not
available in such Account, from the Principal Interest Account of such Series.
The Trustee may withdraw from the Principal Account of a Series or the Interest
Account of a Series such amounts, if any, as it deems necessary to establish a
reserve for any taxes or other governmental charges or other extraordinary
expenses payable out of the Trust. Amounts so withdrawn shall be credited to a
separate account maintained for such Series of the Trust known as the Reserve
Account and shall not be considered a part of such Series of the Trust when
determining the value of the Units until such time as the Trustee shall return
all or any part of such amounts to the appropriate account.
THE SPONSOR
The Sponsor, Kemper Unit Investment Trusts, with an office at
77 W. Wacker Drive, 5th Floor, Chicago, Illinois 60601, (800) 621-5024, is a
service of Kemper Securities, Inc., which is a wholly-owned subsidiary of
Kemper Financial Companies, Inc. which, in turn, is a wholly-owned subsidiary
of Kemper Corporation. The Sponsor acts as underwriter of a number of other
Kemper unit investment trusts and will act as underwriter of any other unit
investment trust products developed by the Sponsor in the future. As of April
30, 1993, the total stockholder's equity of Kemper Securities, Inc., was
approximately $426,125,017 (unaudited).
If at any time the Sponsor shall fail to perform any of its
duties under the Agreement or shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or its affairs are taken over by public
authorities, then the Trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the Trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the Agreement and liquidate the Trust or any
Series as provided therein or (c) continue to act as Trustee without
terminating the Agreement.
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The foregoing financial information with regard to the Sponsor
relates to the Sponsor only and not to any Series of this Trust. Such
information is included in this Prospectus only for the purpose of informing
investors as to the financial responsibility of the Sponsor and its ability to
carry out its contractual obligations with respect to the Series of the Trust.
More comprehensive financial information can be obtained upon request from the
Sponsor.
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters
relating to Federal tax law were originally passed upon by Chapman and Cutler,
111 West Monroe Street, Chicago, Illinois 60603, as counsel for the Sponsor.
INDEPENDENT AUDITORS
The statement of net assets, including the schedule of
investments, appearing in Part Two of this Prospectus and Registration
Statement, with information pertaining to the specific Series of the Trust to
which such statements relate, have been audited by Ernst & Young, independent
auditors, as set forth in their report appearing in Part Two and is included in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
DESCRIPTION OF SECURITIES RATINGS*4
STANDARD & POOR'S CORPORATION. A brief description of the
applicable Standard & Poor's Corporation rating symbols and their meanings
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 may take into consideration obligors
such as guarantors, insurers, or lessees.
The bond rating is not a recommendation to purchase, sell or
hold a security, inasmuch as it does not comment as to market price or
suitability for a particular investor.
The ratings are based on current information furnished by the
issuer and obtained by Standard & Poor's from other sources it considers
reliable. Standard & Poor's does not perform an audit in connection with any
rating and may, on occasion, rely on unaudited financial information. The
ratings may be changed, suspended, or withdrawn as a result of changes in, or
unavailability of, such information, or for other circumstances.
I. Likelihood of default - capacity and
willingness of the obligor as to the timely payment of interest and repayment
of principal in accordance with the terms of the obligation;
- ------------------------------
* As published by the rating companies.
-29-
<PAGE> 30
The ratings are based, in varying degrees, on the following
considerations:
II. Nature of and provisions of the obligation;
III. Protection afforded by, and relative
position of, the obligation in the event of bankruptcy, reorganization or other
arrangement, under the laws of bankruptcy and other laws affecting creditors'
rights.
AAA - Bonds rated AAA have the highest rating
assigned by Standard & Poor's to a debt obligation. Capacity to pay interest
and repay principal is extremely strong.
AA - Bonds rated AA have a very strong capacity
to pay interest and repay principal and differ from the highest rated issues
only in small degree.
A - Bonds rated A have a strong capacity to
pay interest and repay principal although they are somewhat more susceptible
to the adverse effects of changes in circumstances and economic conditions than
bonds in higher rated categories.
BBB - Bonds rated BBB are regarded as having an
adequate capacity to pay interest and repay principal. Whereas they normally
exhibit adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest
and repay principal for bonds in this category than for bonds in higher rated
categories.
Plus (+) or Minus (-): The ratings from "AA" to "A" may be
modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.
Provisional Ratings: The letter "p" indicates the rating is
provisional. A provisional rating assumes the successful completion of the
project being financed by the bonds being rated and indicates that payment of
debt service requirements is largely or entirely dependent upon the successful
and timely completion of the project. This rating, however, while addressing
credit quality subsequent to completion of the project, makes no comment on the
likelihood of, or the risk of default upon failure of, such completion. The
investor should exercise his own judgment with respect to such likelihood and
risk.
MOODY'S INVESTORS SERVICE, INC. - A brief description of the
applicable Moody's Investors Service, Inc. rating symbols and their meanings
follow:
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.
Their safety is so absolute that with the occasional exception of oversupply in
a few specific instances, characteristically, their market value is affected
solely by money market fluctuations.
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 fluctuations
of protective elements may be of greater amplitude or there may be other
elements present which make the long term risks appear somewhat larger
-30-
<PAGE> 31
than in Aaa securities. Their market value is virtually immune to all but
money market influences, with the occasional exception of oversupply in a few
specific instances.
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. The market value of A-rated bonds may be influenced to some degree by
economic performance during a sustained period of depressed business
conditions, but, during periods of normalcy, A-rated bonds frequently move in
parallel with Aaa and Aa obligations, with the occasional exception of
oversupply in a few specific instances.
A1 - Bonds which are rated A1 offer the maximum in security
within their quality group, can be bought for possible upgrading in quality,
and additionally, afford the investor an opportunity to gauge more precisely
the relative attractiveness of offering in the market place.
Baa - Bonds which are rated Baa are considered as lower 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. The market value of Baa-rated bonds is more sensitive to changes in
economic circumstances and, aside from occasional speculative factors applying
to some bonds of this class, Baa market valuations move in parallel with Aaa,
Aa and A obligations during periods of economic normalcy, except in instances
of oversupply.
Conditional Ratings: Bonds rated "Con (-)" are ones for which
the security depends upon the completion of some act or the fulfillment of some
condition. These are bonds secured by (a) earnings of projects under
construction. (b) earnings of project unseasoned in operation experience, (c)
rentals which begin when facilities are completed, or (d) payments to which
some other limiting condition attaches. Parenthetical rating denotes probable
credit stature upon completion of construction or elimination of basis of
condition.
Note: Moody's applies numerical modifiers, 1, 2, and 3 in
each generic rating classification from Aa through B in certain areas of its
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 issuer ranks in the lower end of
its generic rating category.
-31-
<PAGE> 2
Kemper Tax-Exempt Income Trust
Series 48
Essential Information
As of January 3, 1994
Sponser: Kemper Financial Services, Inc.
Kemper Tax-Exempt Income Trust
Series 48
Part Two
Dated January 28, 1994
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
NOTE: Part Two of this Prospectus May Not Be Distributed unless Accompanied
by Part One.
<PAGE> 3
Kemper Tax-Exempt Income Trust
Series 48
Essential Information
As of January 3, 1994
Sponsor: Kemper Financial Services, Inc.
Evaluator: Kemper Unit Investment Trusts
Trustee: Investors Fiduciary Trust Company
<TABLE>
<S> <C>
GENERAL INFORMATION
Principal Amount of Municipal Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,655,000
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,321
Fractional Undivided Interest in the Trust per Unit . . . . . . . . . . . . . . . . . . . . . 1/11,321
Principal Amount of Municipal Bonds per Unit . . . . . . . . . . . . . . . . . . . . . . . . $ 234.52
Public Offering Price:
Aggregate Bid Price of Municipal Bonds in the Portfolio . . . . . . . . . . . . . . . . . . $3,161,704
Aggregate Bid Price of Municipal Bonds per Unit . . . . . . . . . . . . . . . . . . . . . . $ 279.28
Cash per Unit (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ -
Sales Charge 4.712% (4.5% of Public Offering Price) . . . . . . . . . . . . . . . . . . . . $ 13.16
Public Offering Price per Unit (exclusive of accrued interest) (2) . . . . . . . . . . . . $ 292.44
Redemption Price per Unit (exclusive of accrued interest) . . . . . . . . . . . . . . . . . . $ 279.28
Excess of Public Offering Price per Unit Over Redemption Price per Unit . . . . . . . . . . . $ 13.16
Minimum Value of the Trust under which Trust Agreement may be terminated . . . . . . . . . . $2,400,000
Date of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 1, 1982
Mandatory Termination Date . . . . . . . . . . . . . . . . . . . . . . . December 31, 2032
</TABLE>
Annual Evaluation Fee: $.35 per $1,000 principal amount of Municipal Bonds.
Evaluations for purpose of sale, purchase or redemption of Units are made as
of the close of business of the Sponsor next following receipt of an order
for a sale or purchase of Units or receipt by Investors Fiduciary Trust
Company of Units tendered for redemption.
SPECIAL INFORMATION BASED ON VARIOUS DISTRIBUTION OPTIONS
<TABLE>
<CAPTION>
MONTHLY QUARTERLY SEMIANNUAL
------------------------------------------
<S> <C> <C> <C>
Calculation of Estimated Net Annual
Interest Income per Unit (3):
Estimated Annual Interest Income . . . . . . . . . . $24.0985 $24.0985 $24.0985
Less: Estimated Annual Expense . . . . . . . . . . .8380 .6842 .5852
------------------------------------------
Estimated Net Annual Interest Income . . . . . . . . $23.2605 $23.4143 $23.5133
------------------------------------------
------------------------------------------
Calculation of Interest Distribution per Unit:
Estimated Net Annual Interest Income . . . . . . . . . $23.2605 $23.4143 $23.5133
Divided by 12, 4 and 2, respectively . . . . . . . . . $ 1.9384 $ 5.8536 $11.7567
Estimated Daily Rate of Net Interest
Accrual per Unit . . . . . . . . . . . . . . . . . . . $ .0646 $ .0650 $ .0653
Estimated Current Return Based on Public
Offering Price (3) . . . . . . . . . . . . . . . . . . 7.95% 8.01% 8.04%
Estimated Long-Term Return (3) . . . . . . . . . . . . 7.32% 7.38% 7.41%
</TABLE>
Trustee's Annual Fees and Expenses (including Evaluator's Fee): $.8380, $.6842
and $.5852 ($.5214, $.4309 and $.4093 of which represent expenses) per Unit
under the monthly, quarterly and semiannual distribution options,
respectively.
Record and Computation Dates: First day of the month, as follows: monthly -
each month; quarterly - January, April, July and October; semiannual - January
and July.
Distribution Dates: Fifteenth day of the month, as follows:
monthly - each month; quarterly - January, April, July and October; semiannual
- January and July.
i
<PAGE> 4
1. This amount, if any, represents principal cash or overdraft which
is an asset or liability of the Trust and is included in the Public
Offering Price.
2. Units are offered at the Public Offering Price plus accrued
interest to the date of settlement (five business days after purchase). On
January 3, 1994, there was added to the Public Offering Price of $292.44,
accrued interest to the settlement date of January 10, 1994 of $3.83, $3.85
and $3.87 for a total price of $296.27, $296.29 and $296.31 for the
monthly, quarterly and semiannual distribution options, respectively.
3. The Estimated Long-Term Return and Estimated Current Return will
vary. For detailed explanation, see Part One of this prospectus.
ii
<PAGE> 5
Report of Independent Auditors
Unitholders
Kemper Tax-Exempt Income Trust
Series 48
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Kemper Tax-Exempt Income Trust Series 48 as of
September 30, 1993, and the related statements of operations and changes in net
assets for each of the three years in the period then ended. These financial
statements are the responsibility of the Trust's sponsor. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of investments owned as of September 30, 1993,
by correspondence with the custodial bank. An audit also includes assessing
the accounting principles used and significant estimates made by the sponsor,
as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Kemper Tax-Exempt Income
Trust Series 48 at September 30, 1993, and the results of its operations and
the changes in its net assets for each of the three years in the period then
ended in conformity with generally accepted accounting principles.
/S/ ERNST & YOUNG
ERNST & YOUNG
Kansas City, Missouri
January 14, 1994
1
<PAGE> 6
Kemper Tax-Exempt Income Trust
Series 48
Statement of Assets and Liabilities
September 30, 1993
<TABLE>
ASSETS
<S> <C> <C>
Municipal Bonds, at value (cost $2,534,132) (Note 1) $3,277,500
Accrued interest 113,191
----------
3,390,691
LIABILITIES AND NET ASSETS
Cash overdraft 24,224
Accrued liabilities 3,128
----------
27,352
Net assets, applicable to 11,321 Units outstanding (Note 5):
Cost of Trust assets, exclusive of interest (Note 1) $2,534,132
Unrealized appreciation (Note 2) 743,368
Distributable funds 85,839
-------------------------------
Net assets $3,363,339
----------
----------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 7
Kemper Tax-Exempt Income Trust
Series 48
Statement of Operations
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
1993 1992 1991
---------------------------------------------
<S> <C> <C> <C>
Investment income - interest $291,933 $923,897 $1,051,100
Expenses:
Trustee's fees and related expenses 8,519 14,995 14,118
Evaluator's fees 1,092 3,052 3,043
---------------------------------------------
Total expenses 9,611 18,047 17,161
---------------------------------------------
Net investment income 282,322 905,850 1,033,939
Realized and unrealized gain (loss)
on investments:
Realized gain 100,675 102,653 118,622
Unrealized depreciation during the year (112,157) (408,231) (97,596)
---------------------------------------------
Net gain (loss) on investments (11,482) (305,578) 21,026
---------------------------------------------
Net increase in net assets resulting
from operations $270,840 $600,272 $1,054,965
---------------------------------------------
---------------------------------------------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 8
Kemper Tax-Exempt Income Trust
Series 48
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
1993 1992 1991
-----------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income $ 282,322 $ 905,850 $ 1,033,939
Realized gain on investments 100,675 102,653 118,622
Unrealized depreciation on investments
during the year (112,157) (408,231) (97,596)
-----------------------------------------------
Net increase in net assets resulting
from operations 270,840 600,272 1,054,965
Distributions to Unitholders:
Net investment income (439,343) (953,544) (1,050,293)
Principal from investment transactions (5,343,059) (1,371,879) (911,567)
-----------------------------------------------
Total decrease in net assets (5,511,562) (1,725,151) (906,895)
Net assets:
At the beginning of the year 8,874,901 10,600,052 11,506,947
-----------------------------------------------
At the end of the year (including distributable funds
applicable to Trust Units of $85,839, $1,911,518 and
$290,591 at September 30, 1993, 1992 and 1991,
respectively) $ 3,363,339 $ 8,874,901 $10,600,052
-----------------------------------------------
-----------------------------------------------
Trust Units outstanding at the end of the year 11,321 11,321 11,321
-----------------------------------------------
-----------------------------------------------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 9
Kemper Tax-Exempt Income Trust
Series 48
Schedule of Investments
September 30, 1993
<TABLE>
<CAPTION>
REDEMPTION PRINCIPAL
NAME OF ISSUER AND TITLE OF BOND(5) COUPON RATE MATURITY DATE PROVISIONS(2) RATING(1) AMOUNT(4) VALUE(3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Illinois Housing Development 10.625% 7/01/2014 2004 @ 100 S.F. A+ $ 800,000 $ 800,456
Authority, Multifamily Housing 1994 @ 102.5
Bonds, 1982 Series C.
+Ohio Building Authority, State 10.125 10/01/2006 2003 @ 100 AAA 250,000 325,867
Facilities Bonds, Frank
J. Lausche State Office Building,
1982 Series A.
+Ohio Building Authority, State 10.125 10/01/2006 2003 @ 100 AAA 355,000 462,732
Facilities Bonds, Toledo
Government Office Building,
1982 Series A.
+Provo, Utah, Electric Revenue Bonds, 10.125 4/01/2015 2000 @ 100 S.F. AAA 750,000 1,109,925
Series 1980 A.
+Uintah County, Utah, Pollution 10.125 10/15/2012 1996 @ 100 Aaa* 500,000 578,520
Control Revenue Bonds, Deseret
Generation & Transmission
Co-operative Project, Series 1982 T.
---------------------------
$2,655,000 $3,277,500
---------------------------
---------------------------
</TABLE>
See accompanying notes to Schedule of Investments.
5
<PAGE> 10
Kemper Tax-Exempt Income Trust
Series 48
Notes to Schedule of Investments
1. All ratings are by Standard & Poor's Corporation, unless marked
with the symbol "*", in which case the rating is by Moody's Investors
Service, Inc. The symbol "NR" indicates Bonds for which no rating is
available.
2. There is shown under this heading the year in which each issue of
Bonds is initially redeemable and the redemption price for that year or, if
currently redeemable, the redemption price currently in effect; unless
otherwise indicated, each issue continues to be redeemable at declining
prices thereafter, but not below par value. In addition, certain Bonds in
the Portfolio may be redeemed in whole or in part other than by operation
of the stated redemption or sinking fund provisions under certain unusual
or extraordinary circumstances specified in the instruments setting forth
the terms and provisions of such Bonds. "S.F." indicates a sinking fund is
established with respect to an issue of Bonds. Redemption pursuant to call
provisions generally will, and redemption pursuant to sinking fund
provisions may, occur at times when the redeemed Bonds have a valuation
which represents a premium over the call price or par.
To the extent that the Bonds were deposited in the Trust at a price
higher than the price at which they are redeemed, this will represent a
loss of capital when compared with the original Public Offering Price of
the Units. To the extent that the Bonds were acquired at a price lower
than the redemption price, this may represent an increase in capital when
compared with the original Public Offering Price of the Units.
Distributions of net income will generally be reduced by the amount of the
income which would otherwise have been paid with respect to redeemed Bonds
and, unless utilized to pay for Units tendered for redemption, there will
be distributed to Unitholders the principal amount and any premium received
on such redemption. In this event the estimated current return and
estimated long-term return may be affected by such redemptions.
3. See Note 1 to the accompanying financial statements for a
description of the method of determining cost and value.
6
<PAGE> 11
Kemper Tax-Exempt Income Trust
Series 48
Notes to Schedule of Investments (continued)
4. At September 30, 1993, the Portfolio of the Trust consists of 5
issues of Bonds representing obligations of issuers located in 3 states.
All of the issues are payable from the income of a specific project or
authority and are not supported by an issuer's power to levy taxes. The
sources of payment for the revenue bonds are divided as follows: Electric
Systems, 2; Housing, 1; Miscellaneous, 2. Approximately 47% of the
aggregate principal amount of Bonds in the Trust are electrical systems
bonds. Approximately 30% of the aggregate principal amount of Bonds in the
Trust are housing revenue bonds. Approximately 49% of the aggregate
principal amount of Bonds in the Trust are subject to call by the issuers
within five years after September 30, 1993.
5. Those securities preceded by (+) are secured by, and payable from,
escrowed U.S. Government securities.
See accompanying notes to financial statements.
7
<PAGE> 12
Kemper Tax-Exempt Income Trust
Series 48
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF MUNICIPAL BONDS
Municipal Bonds (Bonds) are stated at bid prices as determined by Kemper Unit
Investment Trusts (A Service of Kemper Securities, Inc.), the "Evaluator" of
the Trust. The aggregate bid prices of the Bonds are determined by the
Evaluator based on (a) current bid prices of the Bonds, (b) current bid prices
for comparable bonds, (c) appraisal, or (d) any combination of the above.
COST OF MUNICIPAL BONDS
Cost of the Trust's Bonds was based on the offering prices of the Bonds on
December 1, 1982 (Date of Deposit). The premium or discount (including any
original issue discount) existing at December 1, 1982, is not being amortized.
Realized gain (loss) from Bond transactions is reported on an identified cost
basis.
2. UNREALIZED APPRECIATION AND DEPRECIATION
Following is an analysis of net unrealized appreciation at September 30, 1993:
Gross unrealized depreciation $ -
Gross unrealized appreciation 743,368
--------
Net unrealized appreciation $743,368
--------
--------
3. TRANSACTIONS WITH AFFILIATES
The Trustee, Investors Fiduciary Trust Company, is 50% owned by Kemper
Financial Services, Inc., the Trust's sponsor and an affiliate of Kemper Unit
Investment Trusts. Prior to July 1, 1991, the Trustee's fee (not including the
reimbursement of out-of-pocket expenses), calculated monthly, was at the annual
rate of $1.08, $.86 and $.60 under the monthly, quarterly and semiannual
distribution options, respectively, per $1,000 principal amount of Bonds in the
Trust, based on the largest aggregate principal amount of Bonds in the Trust at
any time during such monthly, quarterly or semiannual periods. Effective July
1, 1991, such fees were revised to $1.35, $1.08 and $.75 under the monthly,
quarterly and semiannual distribution options, respectively. The Evaluator
received a fee, payable monthly, at an annual rate of $.30 per $1,000 principal
amount of Bonds prior to July 1, 1991 and $.35 per $1,000 principal amount of
Bonds commencing July 1, 1991, based on the largest aggregate principal amount
of Bonds in the Trust at any time during such monthly period.
8
<PAGE> 13
Kemper Tax-Exempt Income Trust
Series 48
Notes to Financial Statements (continued)
4. FEDERAL INCOME TAXES
The Trust is not an association taxable as a corporation for federal income tax
purposes. Each Unitholder is considered to be the owner of a pro rata portion
of the Trust under Subpart E, Subchapter J of Chapter 1 of the Internal Revenue
Code of 1986, as amended. Accordingly, no provision has been made for federal
income taxes.
5. OTHER INFORMATION
COST TO INVESTORS
The cost to initial investors of Units of the Trust was based on the aggregate
offering price of the Bonds on the date of an investor's purchase, plus a sales
charge of 4.5% of the Public Offering Price (equivalent to 4.712% of the net
amount invested). The Public Offering Price for secondary market transactions
is based on the aggregate bid price of the Bonds plus or minus a pro rata share
of cash or overdraft in the Principal Account, if any, on the date of an
investor's purchase, plus a sales charge of 4.5% of the Public Offering Price
(equivalent to 4.712% of the net amount invested).
DISTRIBUTIONS
Distributions of net investment income to Unitholders are declared and paid in
accordance with the option (monthly, quarterly or semiannual) selected by the
investor. Such income distributions, on a record date basis, are as follows:
<TABLE>
<CAPTION>
YEAR ENDED
--------------------------------------------------------------------------------------
SEPTEMBER 30, 1993 SEPTEMBER 30, 1992 SEPTEMBER 30, 1991
DISTRIBUTION --------------------------------------------------------------------------------------
PLAN PER UNIT TOTAL PER UNIT TOTAL PER UNIT TOTAL
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Monthly $35.60 $259,878 $83.27 $603,545 $92.14 $ 666,674
Quarterly 44.28 89,230 85.76 173,830 93.70 190,770
Semiannual 44.45 90,235 86.05 176,169 93.98 192,849
-------- -------- ----------
$439,343 $953,544 $1,050,293
-------- -------- ----------
-------- -------- ----------
</TABLE>
9
<PAGE> 14
Kemper Tax-Exempt Income Trust
Series 48
Notes to Financial Statements (continued)
5. OTHER INFORMATION (CONTINUED)
Selected data for a Unit of the Trust outstanding throughout each year -
<TABLE>
<CAPTION>
MONTHLY QUARTERLY SEMIANNUAL
YEAR ENDED SEPTEMBER 30 YEAR ENDED SEPTEMBER 30 YEAR ENDEDSEPTEMBER 30
1993 1992 1991 1993 1992 1991 1993 1992 1991
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income
- interest $ 25.79 $ 81.61 $ 92.85 $ 25.79 $ 81.61 $ 92.85 $ 25.79 $ 81.61 $ 92.85
Expenses .91 1.74 1.69 .75 1.44 1.40 .63 1.16 1.10
-------------------------------------------------------------------------------------------------------------
Net investment income 24.88 79.87 91.16 25.04 80.17 91.45 25.16 80.45 91.75
Distributions to
Unitholders:
Net investment
income (35.60) (83.27) (92.14) (44.28) (85.76) (93.70) (44.45) (86.05) (93.98)
Principal from
investment
transactions (471.96) (121.18) (80.52) (471.96) (121.18) (80.52) (471.96) (121.18) (80.52)
Net gain (loss) on
investments (1.03) (27.00) 1.87 (1.03) (27.00) 1.87 (1.03) (27.00) 1.87
-------------------------------------------------------------------------------------------------------------
Change in net
asset value (483.71) (151.58) (79.63) (492.23) (153.77) (80.90) (492.28) (153.78) (80.88)
Net asset value:
Beginning of the year 779.12 930.70 1,010.33 791.88 945.65 1,026.55 793.15 946.93 1,027.81
-------------------------------------------------------------------------------------------------------------
End of the year,
including distributable
funds $ 295.41 $ 779.12 $ 930.70 $ 299.65 $ 791.88 $ 945.65 $ 300.87 $ 793.15 $ 946.93
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 15
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Independent
Auditors" and to the use of our report dated January 14, 1994, in this
Post-Effective Amendment to the Registration Statement (Form S-6) and related
Prospectus of Kemper Tax-Exempt Income Trust Series 48 dated January 28, 1994.
/S/ ERNST & YOUNG
ERNST & YOUNG
Kansas City, Missouri
January 28, 1994
<PAGE> 16
CONTENTS OF POST-EFFECTIVE AMENDMENT
TO REGISTRATION STATEMENT
This Post-Effective amendment to the Registration Statement comprises the
following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Kemper Tax-Exempt Income Trust, Series 48, certifies that it meets
all of the requirements for effectiveness of this registration statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, and State of
Illinois, on the 28th day of January, 1994.
KEMPER TAX-EXEMPT INCOME TRUST
SERIES 48
Registrant
By: Kemper Unit Investment Trusts
(a service of Kemper
Securities, Inc.)
Depositor
By /s/ C. Perry Moore
C. Perry Moore
Attorney-In-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on January 28,
1994 by the following persons, who constitute a majority of the Board of
Directors of Kemper Securities, Inc.
SIGNATURE TITLE
James R. Boris Chairman and Chief Executive Officer
James R. Boris
Donald F. Eller Senior Executive Vice President and Director
Donald F. Eller
Stanley R. Fallis Senior Executive Vice President, Chief Financial
Stanley R. Fallis Officer and Director
Frank V. Geremia Senior Executive Vice President and Director
Frank V. Geremia
David B. Mathis Director
David B. Mathis
Robert T. Jackson Director
Robert T. Jackson
Jay B. Walters Senior Executive Vice President and Director
Jay B. Walters
Frederick C. Hosken Senior Executive Vice President and Director
Frederick C. Hosken
Charles M. Kierscht Director
Charles M. Kierscht
Arthur J. McGivern Director
Arthur J. McGivern
C. Perry Moore C. Perry Moore
C. Perry Moore signs this document pursuant to power of attorney filed
with the Securities and Exchange Commission with (a) Amendment No. 1 to the
Registration Statement on Form S-6 for Kemper Tax-Exempt Insured Income Trust,
Series A-70 and Multi-State Series 28 and Kemper Tax-Exempt Income Trust,
Multi-State Series 42 (Registration No. 33-35425, (b) Amendment No. 1 to the
Registration Statement of Form S-6 for Kemper Tax-Exempt Insured Income Trust,
Series A-72 and Multi-State Series 30 (Registration No. 33-37178) and (c)
Amendment No. 1 to the Registration Statement of Form S-6 for Kemper Tax-Exempt
Insured Income Trust, Multi-State Series 51 (Registration No. 33-48398).
