As filed with the Securities and Exchange Commission on April 18, 1994
Registration No. 2-88220
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 10
To
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
NEW YORK MUNICIPAL TRUST, NEW YORK DISCOUNT & ZERO COUPON FUND, 4TH
SERIES
B. Name of depositor: BEAR, STEARNS & CO. INC.
C. Complete address of depositor's principal executive office:
245 Park Avenue
New York, NY 10167
D. Name and complete address of agent for service:
PETER J. DeMARCO Copy of comments to:
Managing Director MICHAEL R. ROSELLA, ESQ.
Bear, Stearns & Co. Inc. Battle Fowler
245 Park Avenue 280 Park Avenue
New York, NY 10167 New York, NY 10017
(212) 856-6858
It is proposed that this filing become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/ X / on April 29, 1994 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / on ( date ) pursuant to paragraph (a) of Rule 485
<PAGE>
NEW YORK MUNICIPAL TRUST
NEW YORK DISCOUNT AND ZERO COUPON FUND, 4TH SERIES
CROSS-REFERENCE SHEET
Pursuant to Rule 404 of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items required by Instruction as
to the Prospectus in Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
1. (a) Name of trust................ Front Cover of Prospectus
(b) Title of securities issued... "
2. Name and address of each depositor The Sponsor
3. Name and address of trustee..... The Trustee
4. Name and address of principal
underwriters................... The Sponsor
5. State of organization of trust... Organization
6. Execution and termination of
trust agreement................ Trust Agreement, Amendment and
Termination
7. Changes of name.................. Not Applicable
8. Fiscal year...................... "
9. Litigation....................... None
II. General Description of the Trust and Securities of the Trust
10. (a) Registered or bearer
securities.................. Certificates
(b) Cumulative or distributive
securities.................. Interest and Principal
Distributions
(c) Redemption................. Trustee Redemption
(d) Conversion, transfer, etc... Certificates, Sponsor
Repurchase, Trustee
Redemption, Exchange Privilege
and Conversion Offer
(e) Periodic payment plan...... Not Applicable
(f) Voting rights.............. Trust Agreement, Amendment and
Termination
(g) Notice to certificateholders Records, Portfolio, Trust
Agreement, Amendment and
Termination, The Sponsor, The
Trustee
(h) Consents required........... Trust Agreement, Amendment and
Termination
(i) Other provisions........... Tax Status
11. Type of securities
comprising units............. Objectives, Portfolio,
Description of Portfolio
12. Certain information regarding
periodic payment certificates Not Applicable
13. (a) Load, fees, expenses, etc... Summary of Essential
Information, Offering Price,
Volume and Other Discounts,
Sponsor's and Underwriters'
Profits, Total Reinvestment
Plan, Trust Expenses and
Charges
(b) Certain information regarding
periodic payment certificates Not Applicable
(c) Certain percentages.......... Summary of Essential
Information, Offering Price,
Total Reinvestment Plan
(d) Price differences.......... Volume and Other Discounts
(e) Other loads, fees, expenses Certificates
(f) Certain profits receivable
by depositors, principal
underwriters, trustee or
affiliated persons......... Sponsor's and Underwriters'
Profits
(g) Ratio of annual charges
to income.................. Not Applicable
14. Issuance of trust's securities. Organization, Certificates
15. Receipt and handling of payments
from purchasers.............. Organization
16. Acquisition and disposition of
underlying securities........ Organization, Objectives,
Portfolio, Portfolio
Supervision
17. Withdrawal or redemption....... Comparison of Public Offering
Price, Sponsor's Repurchase
Price and Redemption Price,
Sponsor Repurchase, Trustee
Redemption
18. (a) Receipt, custody and
disposition of income...... Distribution Elections,
Interest and Principal
Distributions, Records, Total
Reinvestment Plan
(b) Reinvestment of distributions. Total Reinvestment Plan
(c) Reserves or special funds... Interest and Principal
Distributions
(d) Schedule of distributions... Not Applicable
19. Records, accounts and reports... Records, Total Reinvestment
Plan
20. Certain miscellaneous provisions
of trust agreement........... Trust Agreement, Amendment and
Termination
(a) Amendment.................. "
(b) Termination................ "
(c) and (d) Trustee, removal and
successor.................. The Trustee
(e) and (f) Depositor, removal
and successor.............. The Sponsor
21. Loans to security holders...... Not Applicable
22. Limitations on liability....... The Sponsor, The Trustee, The
Evaluator
23. Bonding arrangements.......... Part II--Item A
24. Other material provisions
of trust agreement........... Not Applicable
III. Organization, Personnel and Affiliated Persons of Depositor
25. Organization of depositor...... The Sponsor
26. Fees received by depositor..... Not Applicable
27. Business of depositor.......... The Sponsor
28. Certain information as to
officials and affiliated
persons of depositor......... Part II--Item C
29. Voting securities of depositor.. Not Applicable
30. Persons controlling depositor... "
31. Payments by depositor for certain
services rendered to trust.... "
32. Payment by depositor for certain
other services rendered to trust. "
33. Remuneration of employees of
depositor for certain services
rendered to trust.............. "
34. Remuneration of other persons for
certain services rendered to trust. "
IV. Distribution and Redemption of Securities
35. Distribution of trust's
securities by states......... Distribution of Units
36. Suspension of sales of
trust's securities........... Not Applicable
37. Revocation of authority
to distribute................ "
38. (a) Method of distribution..... Distribution of Units, Total
Reinvestment Plan
(b) Underwriting agreements.... "
(c) Selling agreements......... "
39. (a) Organization of principal
underwriters............... The Sponsor
(b) N.A.S.D. membership of
principal underwriters..... "
40. Certain fees received by
principal underwriters...... Not Applicable
41. (a) Business of principal
underwriters.............. The Sponsor
(b) Branch offices of principal
underwriters............... Not Applicable
(c) Salesmen of principal
underwriters............... "
42. Ownership of trust's
securities by certain persons. "
43. Certain brokerage commissions
received by principal
underwriters................. "
44. (a) Method of valuation........ Summary of Essential
Information, Offering Price,
Accrued Interest, Volume and
Other Discounts, Total
Reinvestment Plan,
Distribution of Units
(b) Schedule as to offering price.. Not Applicable
(c) Variation in offering price
to certain persons......... Distribution of Units, Total
Reinvestment Plan, Volume and
Other Discounts
45. Suspension of redemption rights.. Trustee Redemption
46. (a) Redemption valuation........ Comparison of Public Offering
Price, Sponsor's Repurchase
Price and Redemption Price,
Trustee Redemption
(b) Schedule as to
redemption price........... Not Applicable
47. Maintenance of position in
underlying securities........ Comparison of Public Offering
Price, Sponsor's Repurchase
Price and Redemption Price,
Sponsor Repurchase, Trustee
Redemption
V. Information Concerning the Trustee or Custodian
48. Organization and regulation
of trustee................... The Trustee
49. Fees and expenses of trustee... Trust Expenses and Charges
50. Trustee's lien................. "
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of
trust's securities........... Not Applicable
VII. Policy of Registrant
52. (a) Provisions of trust agreement
with respect to selection or
elimination of underlying
securities................. Objectives, Portfolio,
Portfolio Supervision
(b) Transactions involving
elimination of underlying
securities................. Not Applicable
(c) Policy regarding substitution
or elimination of underlying
securities................. Objectives, Portfolio,
Portfolio Supervision,
Substitution of Bonds
(d) Fundamental policy not
otherwise covered.......... Not Applicable
53. Tax status of trust............ Tax Status
VIII. Financial and Statistical Information
54. Trust's securities during
last ten years............... Not Applicable
55. Hypothetical account for issuers
of periodic payment plans..... "
56. Certain information regarding
periodic payment certificates.. "
57. Certain information regarding
periodic payment plans........ "
58. Certain other information
regarding periodic payment plans. "
59. Financial Statements
(Instruction 1(c) to Form S-6).. Statement of Financial
Condition
<PAGE>
NOTE: Part A of This Prospectus May Not Be
Distributed Unless Accompanied by Part B.
NEW YORK MUNICIPAL TRUST,
NEW YORK DISCOUNT & ZERO COUPON FUND - 4TH SERIES
The Trust is a unit investment trust with an underlying
portfolio of long-term tax-exempt bonds and was formed to preserve capital
and to provide interest income (including, where applicable, earned
original issue discount) which, in the opinions of bond counsel to the
respective issuers, is, with certain exceptions, currently exempt from
regular federal income tax and New York State and New York City income
taxes under existing law but may be subject to state and local taxes in
other jurisdictions. Capital gains are subject to tax. (See "Tax Status"
and "The Trust--Portfolio" in Part B of this Prospectus.) The Sponsor is
Bear, Stearns & Co. Inc. The value of the Units of the Trust will
fluctuate with the value of the underlying bonds. Minimum purchase: 1
Unit.
This Prospectus consists of two parts. Part A contains the
Summary of Essential Information as of December 31, 1993 (the "Evaluation
Date"), a summary of certain specific information regarding the Trust and
audited financial statements of the Trust, including the related
portfolio, as of the Evaluation Date. Part B of this Prospectus contains
a general summary of the Trust.
Investors should retain both parts of
this Prospectus for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Part A Dated April 29, 1994
<PAGE>
THE TRUST. The Trust is a unit investment trust formed to
preserve capital and to provide interest income (including, where
applicable, the earned original issue discount) which, in the opinions of
bond counsel to the respective issuers, is, with certain exceptions,
currently exempt from regular federal income tax and New York State and
New York City income taxes under existing law through investment in a
fixed, diversified portfolio of long-term bonds (the "Bonds"), issued by
or on behalf of the State of New York and its political subdivisions,
municipalities and public authorities, and by the Commonwealth of Puerto
Rico and its public authorities. Although the Supreme Court has
determined that Congress has the authority to subject interest on bonds
such as the Bonds in the Trust to regular federal income taxation,
existing law excludes such interest from regular federal income tax. Such
interest income may, however, be subject to federal corporate alternative
minimum tax and to state and local taxes in other jurisdictions. The
Bonds were acquired at prices which resulted in the portfolio as a whole
being purchased at a deep discount from par value. The portfolio may also
include bonds issued at an original issue discount. All of the Bonds in
the Trust were rated "A" or better by Standard & Poor's Corporation or
Moody's Investors Service, Inc. at the time originally deposited in the
Trust. For a discussion of the significance of such ratings, see
"Description of Bond Ratings" in Part B of this Prospectus. Some of the
Bonds in the Trust have been issued with optional refunding or refinancing
provisions ("Refunded Bonds") whereby the issuer of the Bond has the right
to call such Bond prior to its stated maturity date (and other than
pursuant to sinking fund provisions) and to issue new bonds ("Refunding
Bonds") in order to finance the redemption. Issuers typically utilize
refunding calls in order to take advantage of lower interest rates in the
marketplace. Some of these Refunded Bonds may be called for redemption
pursuant to pre-refunding provisions ("Pre-Refunded Bonds") whereby the
proceeds from the issue of the Refunding Bonds are typically invested in
government securities in escrow for the benefit of the holders of the Pre-
Refunded Bonds until the refunding call date. Usually, Pre-Refunded Bonds
will bear a triple-A rating because of this escrow. The issuers of Pre-
Refunded Bonds must call such Bonds on their refunding call date.
Therefore, as of such date, the Trust will receive the call price for such
bonds but will cease receiving interest income with respect to them. For
a list of those Bonds which are Pre-Refunded Bonds as of the Evaluation
Date, if any, see "Notes to Financial Statements" in this Part A. Some of
the Bonds in the portfolio may have been purchased at an aggregate premium
over par. Additionally, some of the Bonds in the portfolio may be "Zero
Coupon" bonds, which are original issue discount bonds that provide for
payment at maturity at par value, but do not provide for the payment of
any current interest. The payment of interest and preservation of capital
are, of course, dependent upon the continuing ability of the issuers of
the Bonds to meet their obligations. There can be no assurance that the
Trust's investment objectives will be achieved. Investment in the Trust
should be made with an understanding of the risks which an investment in
long-term fixed rate debt obligations may entail, including the risk that
the value of the underlying portfolio will decline with increases in
interest rates, and that the value of Zero Coupon Bonds is subject to
greater fluctuation than coupon bonds in response to such changes in
interest rates. Each Unit in the Trust represents a 1/9677th undivided
interest in the principal and net income of the Trust. The principal
amount of Bonds deposited in the Trust per Unit is reflected in the
Summary of Essential Information. (See "The Trust Organization" in Part B
of this Prospectus.) The Units being offered hereby are issued and
outstanding Units which have been purchased by the Sponsor in the
secondary market.
PUBLIC OFFERING PRICE. The secondary market Public Offering
Price of each Unit is equal to the aggregate bid price of the Bonds in the
Trust divided by the number of Units outstanding, plus a sales charge of
5.5% of the Public Offering Price, or 5.820% of the net amount invested in
Bonds per Unit. In addition, accrued interest to the expected date of
settlement is added to the Public Offering Price. If Units had been
available for sale on the Evaluation Date, the Public Offering Price per
Unit would have been $297.59 plus accrued interest of $8.15 under the
monthly distribution plan, $10.48 under the semi-annual distribution plan
and $10.44 under the annual distribution plan, for a total of $305.74,
$308.07 and $308.03, respectively. The Public Offering Price per Unit can
vary on a daily basis in accordance with fluctuations in the aggregate bid
prices of the Bonds. (See "Public Offering--Offering Price" in Part B of
this Prospectus.)
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. The
rate of return on an investment in Units of the Trust is measured in terms
of "Estimated Current Return" and "Estimated Long Term Return".
Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted
bond practices, which practices take into account not only the interest
payable on the Bond but also the amortization of premiums or accretion of
discounts, if any; (2) calculating the average of the yields for the Bonds
in the Trust's portfolio by weighing each Bond's yield by the market value
of the Bond and by the amount of time remaining to the date to which the
Bond is priced (thus creating an average yield for the portfolio of the
Trust); and (3) reducing the average yield for the portfolio of the Trust
in order to reflect estimated fees and expenses of the Trust and the
maximum sales charge paid by investors. The resulting Estimated Long Term
Return represents a measure of the return to investors earned over the
estimated life of the Trust. (For the Estimated Long Term Return to
Certificateholders under the monthly, semi-annual and annual distribution
plans, see "Summary of Essential Information".)
Estimated Current Return is a measure of the Trust's cash flow.
Estimated Current Return is computed by dividing the Estimated Net Annual
Interest Income per Unit by the Public Offering Price per Unit. In
contrast to the Estimated Long Term Return, the Estimated Current Return
does not take into account the amortization of premium or accretion of
discount, if any, on the Bonds in the portfolio of the Trust. Moreover,
because interest rates on Bonds purchased at a premium are generally
higher than current interest rates on newly issued bonds of a similar type
with comparable rating, the Estimated Current Return per Unit may be
affected adversely if such Bonds are redeemed prior to their maturity.
The Estimated Net Annual Interest Income per Unit of the Trust
will vary with changes in the fees and expenses of the Trustee and the
Evaluator applicable to the Trust and with the redemption, maturity, sale
or other disposition of the Bonds in the Trust. The Public Offering Price
will vary with changes in bid prices of the Bonds. Therefore, there is no
assurance that the present Estimated Current Return or Estimated Long Term
Return will be realized in the future. (For the Estimated Current Return
to Certificateholders under the monthly, semi-annual and annual
distribution plans, see "Summary of Essential Information". See
"Estimated Long Term Return and Estimated Current Return" in Part B of
this Prospectus.)
A schedule of cash flow projections is available from the
Sponsor upon request.
DISTRIBUTIONS. Distributions of interest income, less expenses,
will be made by the Trust either monthly, semi-annually or annually
depending upon the plan of distribution applicable to the Unit purchased.
A purchaser of a Unit in the secondary market will initially receive
distributions in accordance with the plan selected by the prior owner of
such Unit and may thereafter change the plan as provided under "Interest
and Principal Distributions" in Part B of the Prospectus. Distributions
of principal, if any, will be made semi-annually on June 15 and
December 15 of each year. For estimated monthly, semi-annual and annual
interest distributions, see "Summary of Essential Information".
MARKET FOR UNITS. The Sponsor, although not obligated to do so,
presently maintains and intends to continue to maintain a secondary market
for the Units at prices based upon the aggregate bid price of the Bonds in
the Trust portfolio. The reoffer price will be based on the aggregate bid
price of the Bonds plus a sales charge of 5.5% (5.820% of the net amount
invested), plus net accrued interest. If a market is not maintained a
Certificateholder will be able to redeem his Units with the Trustee at a
price also based upon the aggregate bid price of the Bonds. (See "Sponsor
Repurchase" and "Public Offering--Offering Price" in Part B of this
Prospectus.)
TOTAL REINVESTMENT PLAN. Certificateholders under the semi-
annual and annual plans of distribution have the opportunity to have all
their regular interest distributions and principal distributions, if any,
reinvested in available series of "Municipal Securities Trust". (See
"Total Reinvestment Plan" in Part B of the Prospectus. Residents of Texas
see "Total Reinvestment Plan for Texas Residents" in Part B of this
Prospectus.) The Plan is not designed to be a complete investment
program.
<PAGE>
NEW YORK MUNICIPAL TRUST,
NEW YORK DISCOUNT & ZERO COUPON FUND
4TH SERIES
SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1993
Date of Deposit: February 2, 1984 Minimum Principal Distribution:
Principal Amount of Bonds ...$2,680,000 $1.00 per Unit.
Number of Units .............9,677 Weighted Average Life to
Fractional Undivided Inter- Maturity:
est in Trust per Unit .....1/9677 4.5 Years.
Principal Amount of Minimum Value of Trust:
Bonds per Unit ............$276.95 Trust may be terminated if
Secondary Market Public value of Trust is less than
Offering Price** $4,000,000 in principal amount
Aggregate Bid Price of Bonds.
of Bonds in Trust .......$2,721,375+++ Mandatory Termination Date:
Divided by 9,677 Units ....$281.22 The earlier of December 31,
Plus Sales Charge of 5.5% 2033 or the disposition of the
of Public Offering Price $16.37 last Bond in the Trust.
Public Offering Price Trustee***: The Bank of New
per Unit ................$297.59+ York.
Redemption and Sponsor's Trustee's Annual Fee: Monthly
Repurchase Price plan $1.03 per $1,000; semi-
per Unit ..................$281.22+ annual plan $.55 per $1,000;
+++ and annual plan is $.35 per
++++ $1,000.
Excess of Secondary Market Evaluator: Kenny S&P Evaluation
Public Offering Price Services.
over Redemption and Evaluator's Fee for Each
Sponsor's Repurchase Evaluation: Minimum of $12
Price per Unit ............$16.37++++ plus $.25 per each issue of
Difference between Public Bonds in excess of 50 issues
Offering Price per Unit (treating separate maturities
and Principal Amount per as separate issues).
Unit Premium/(Discount) ...$20.64 Sponsor: Bear, Stearns & Co.
Evaluation Time: 4:00 p.m. Inc.
New York Time.
PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED
Monthly Semi-Annual Annual
Option Option Option
Gross annual interest income# .........$26.01 $26.01 $26.01
Less estimated annual fees and
expenses ............................ .89 .69 .62
Estimated net annual interest ______ ______ ______
income (cash)# ......................$25.12 $25.32 $25.39
Estimated interest distribution# ...... 2.09 12.66 25.39
Estimated daily interest accrual# ..... .0697 .0703 .0705
Estimated current return#++ ........... 8.44% 8.51% 8.53%
Estimated long term return++ .......... 1.89% 1.95% 1.98%
Record dates .......................... 1st of Dec. 1 and Dec. 1
each month June 1
Interest distribution dates ........... 15th of Dec. 15 and Dec. 15
each month June 15
<PAGE>
* The Date of Deposit is the date on which the Trust Agreement was
signed and the deposit of the Bonds with the Trustee made.
** For information regarding offering price per unit and applicable
sales charge under the Total Reinvestment Plan, see Total
Reinvestment Plan in Part B of this Prospectus.
*** The Trustee maintains its corporate trust office at 101 Barclay
Street, New York, New York 10286 (tel. no.: 1-800-431-8002). For
information regarding redemption by the Trustee, see "Trustee
Redemption" in Part B of this Prospectus.
+ Plus accrued interest to expected date of settlement (approximately
five business days after purchase) of $8.15 monthly, $10.48 semi-
annually and $10.44 annually.
++ The estimated current return and estimated long term return are
increased for transactions entitled to a discount (see "Employee
Discounts" in Part B of this Prospectus), and are higher under the
semi-annual and annual options due to lower Trustee's fees and
expenses.
+++ Based solely upon the bid side evaluation of the underlying Bonds
(including, where applicable, undistributed cash from the principal
account). Upon tender for redemption, the price to be paid will be
calculated as described under "Trustee Redemption" in Part B of this
Prospectus.
++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.
# Does not include accrual from original issue discount bonds, if any.
<PAGE>
INFORMATION REGARDING THE TRUST
AS OF DECEMBER 31, 1993
DESCRIPTION OF PORTFOLIO*
General
Each unit in the Trust consists of a 1/9677th fractional undivided
interest in the principal and net income of the Trust in the ratio of one
unit for each $276.95 principal amount of the Bonds currently held in the
Trust. The Sponsor has participated as a sole underwriter or manager, co-
manager or member of an underwriting syndicate from which 7.5% of the
initial aggregate principal amount of the Bonds were acquired. The
portfolio of the Trust consists of 8 issues representing obligations of 6
issuers located in New York State. Five issues representing $1,375,000 of
the principal amount of the Bonds in the Trust are "moral obligation"
bonds. All of the Bonds in the Trust are subject to redemption prior to
their stated maturity dates pursuant to sinking fund or optional call
provisions. The Bonds may also be subject to other calls, which may be
permitted or required by events which cannot be predicted (such as
destruction, condemnation, termination of a contract, or receipt of excess
or unanticipated revenues). None of the Bonds are general obligation
bonds. Eight issues representing $2,680,000 of the principal amount of
the Bonds are payable from the income of a specific project or authority
and are not supported by the issuer's power to levy taxes. The portfolio
is divided for purpose of issue as follows: Commuter Facilities 1,
Highway 1, Hospital & Nursing 3, Municipal Assistance 1, Power 1 and
Transit Facilities 1. For an explanation of the significance of these
factors see "The Trust--Portfolio" in Part B of this Prospectus.
* Changes in the Trust Portfolio: From January 1, 1994 to March 24,
1994, the entire principal amount of the Bonds in portfolio no. 5
has been called and is no longer contained in the Trust. 5 Units
have been redeemed from the Trust.
<PAGE>
As of December 31, 1993, none of the Bonds were original issue
discount bonds. Approximately 18.9% of the aggregate principal amount of
the Bonds in the Trust were purchased at a "market" discount from par
value at maturity, approximately 53.2% were purchased at a premium and
approximately 27.9% were purchased at par. For an explanation of the
significance of these factors see "Discount and Zero Coupon Bonds" in
Part B of this Prospectus.
None of the Bonds in the Trust are subject to the federal individual
alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.
<PAGE>
FINANCIAL AND STATISTICAL INFORMATION
Selected data for each Unit outstanding for the periods listed below:
Distribu-
tions of
Distributions of Interest Principal
During the Period (per Unit) During
Net Asset * Semi- the
Units Out- Value Monthly Annual Annual Period
Period Ended standing Per Unit Option Option Option (Per Unit)
December 31, 1991 10,000 $528.24 $41.64 $42.18 $42.37 -0-
December 31, 1992 10,000 435.31 36.67 37.20 37.39$ 79.19
December 31, 1993 9,677 290.21 29.17 29.64 29.80 134.78
* Net Asset Value per Unit is calculated by dividing net assets as
disclosed in the "Statement of Net Assets" by the number of Units
outstanding as of the date of the Statement of Net Assets. See
Note 5 of Notes to Financial Statements for a description of the
components of Net Assets.
<PAGE>
Independent Auditors' Report
The Sponsor, Trustee and Certificateholders
New York Municipal Trust, New York Discount
and Zero Coupon Fund, 4th Series:
We have audited the accompanying statement of net assets, including the
portfolio, of New York Municipal Trust, New York Discount and Zero Coupon
Fund, 4th Series as of December 31, 1993, and the related statements of
operations and changes in net assets for each of the years in the three
year period then ended. These financial statements are the responsibility
of the Trustee (see note 2). 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 securities owned as
of December 31, 1993, by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant
estimates made by management, 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 New York Municipal
Trust, New York Discount and Zero Coupon Fund, 4th Series as of
December 31, 1993, and the results of its operations and the changes in
its net assets for each of the years in the three year period then ended
in conformity with generally accepted accounting principles.
KPMG Peat Marwick
New York, New York
March 31, 1994
<PAGE>
Statement of Net Assets
December 31, 1993
Investments in marketable securities,
at market value (cost $2,611,026) $ 2,806,499
Excess of other assets over total liabilities 1,831
----------
Net assets 9,677 units of fractional undivided
interest outstanding, $290.21 per unit) $ 2,808,330
==========
See accompanying notes to financial statements.
<PAGE>
<TABLE>
Statements of Operations
<CAPTION>
Years ended December 31,
------------------------------------------
1993 1992 1991
---------- ---------- -----------
<S> <C> <C> <C>
Investment income - interest $ 316,349 400,127 454,300
---------- ---------- -----------
Expenses:
Trustee's fees 10,315 10,522 _ 10,807
Evaluator's fees 3,300 3,163 3,012
---------- ---------- -----------
Total expenses 13,615 13,685 13,819
---------- ---------- -----------
Investment income, net 302,734 386,442 440,481
---------- ---------- -----------
Realized and unrealized gain (loss)
on investments:
Net realized gain (loss) on
bonds sold or called 103,773 (62,944) -
Unrealized appreciation
(depreciation) for the year (216,831) (92,747) 24,180
---------- ---------- -----------
Net gain (loss)
on investments (113,058) (155,691) 24,180
---------- ---------- -----------
Net increase in net
assets resulting
from operations $ 189,676 230,751 464,661
========== ========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
Years ended December 31,
----------- - ----------- - -----------
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Operations:
Investment income, net $ 302,734 386,442 440,481
Net realized gain (loss) on
bonds sold or called 103,773 (62,944) -
Unrealized appreciation
(depreciation) for the year (216,831) (92,747) 24,180
----------- ----------- -----------
Net increase in net
assets resulting
from operations 189,676 230,751 464,661
----------- ----------- -----------
Distributions to Certificateholders:
Investment income 292,844 368,231 417,989
Principal 1,346,101 791,900 -
Redemptions:
Interest 2,828 - -
Principal 92,627 - -
----------- ----------- -----------
Total distributions
and redemptions 1,734,400 1,160,131 417,989
----------- ----------- -----------
Total increase (decrease) (1,544,724) (929,380) 46,672
Net assets at beginning of year 4,353,054 5,282,434 5,235,762
----------- ----------- -----------
Net assets at end of year (including
undistributed net investment
income of $86,955, $253,506 and
$235,295, respectively) $ 2,808,330 4,353,054 5,282,434
=========== =========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NEW YORK MUNICIPAL TRUST, NEW YORK DISCOUNT
AND ZERO COUPON FUND, 4TH SERIES
Notes to Financial Statements
December 31, 1993, 1992 and 1991
(1) Organization
New York Municipal Trust, New York Discount and Zero Coupon Fund, 4th
Series (Trust) was organized on February 2, 1984 by Bear, Stearns &
Co. Inc. (Sponsor) under the laws of the State of New York by a Trust
Indenture and Agreement, and is registered under the Investment
Company Act of 1940.
(2) Summary of Significant Accounting Policies
The Bank of New York (Trustee) has custody of and responsibility for
the accounting records and financial statements of the Trust and is
responsible for establishing and maintaining a system of internal
control related thereto.
The Trustee is also responsible for all estimates of expenses and
accruals reflected in the Trust's financial statements. The
accompanying financial statements have been adjusted to record the
unrealized appreciation (depreciation) of investments and to record
interest income and expenses on the accrual basis.
The discount on the zero-coupon bonds is accreted by the interest
method over the respective lives of the bonds. The accretion of such
discount is included in interest income; however, it is not
distributed until realized in cash upon maturity or sale of the
respective bonds.
Investments are carried at market value which is determined by either
Standard & Poor's Corporation or Moody's Investors Service, Inc.
(Evaluator) as discussed in Footnotes to Portfolio. The market value
of the investments is based upon the bid prices for the bonds at the
end of the year, except that the market value on the date of deposit
represents the cost to the Trust based on the offering prices for
investments at that date. The difference between cost (including
accumulated accretion of original issue discount on zero-coupon
bonds) and market value is reflected as unrealized appreciation
(depreciation) of investments. Securities transactions are recorded
on the trade date. Realized gains (losses) from securities
transactions are determined on the basis of average cost of the
securities sold or redeemed.
(3) Income Taxes
The Trust is not subject to Federal income taxes as provided for by
the Internal Revenue Code.
(4) Trust Administration
The fees and expenses of the Trust are incurred and paid on the basis
set forth under "Trust Expenses and Charges" in Part B of this
Prospectus.
The Trust Indenture and Agreement provides for interest distributions
as often as monthly (depending upon the distribution plan elected by the
Certificateholders).
The Trust Indenture and Agreement further requires that principal
received from the disposition of bonds, other than those bonds sold
in connection with the redemption of units, be distributed to
Certificateholders.
See "Financial and Statistical Information" in Part A of this
Prospectus for the amounts of per unit distributions during the years
ended December 31, 1993, 1992 and 1991.
The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. 323 units were redeemed in 1993. No units were
redeemed in the years ended December 31, 1992 and 1991, respectively.
(5) Net Assets
At December 31, 1993, the net assets of the Trust represented the
interest of Certificateholders as follows:
Original cost to Certificateholders $ 5,815,764
Less initial gross underwriting commission (319,900)
5,495,864
Cost of securities sold or called (2,884,838)
Net unrealized appreciation 195,473
Undistributed proceeds from bonds sold or called (85,124)
Undistributed net investment income 86,955
Total $ 2,808,330
The original cost to Certificateholders, less the initial gross
underwriting commission, represents the aggregate initial public offering
price net of the applicable sales charge on 10,000 units of fractional
undivided interest of the Trust as of the date of deposit.
<PAGE>
<TABLE>
NEW YORK MUNICIPAL TRUST, NEW YORK DISCOUNT
AND ZERO COUPON FUND, 4TH SERIES
NEW YORK MUNICIPAL TRUST, NEW YORK DISCOUNT
AND ZERO COUPON FUND, 4TH SERIES
<CAPTION>
Portfolio
December 31, 1993
Port- Aggregate Coupon Rate/ Redemption Feature
folio Principal Name of Issuer Ratings Date(s) of S.F.--Sinking Fund Market
No. Amount and Title of Bonds (1) Maturity(2) Ref. - Refunding (2)(7) Value(3)
------- ---------- --------------------- ------ ------------ ---------------------- ----------
<S> <C> <C> <C> <C> <C> <C>
1 $ 265,000 New York York State A* 6.875% 11/01/98 @ 100 S.F. $ 271,363
Housing Finance 11/01/2007 2/03/94@ 102 Ref.
Agency, Hospital and
Nursing Home Project
Bonds, 1977 Series A
2 170,000 New York State A* 10.000 Currently @ 100 S.F. 179,321
Medical Care 11/01/2006 2/03/94 @ 105 Ref.
Facilities Finance
Agency, Hospital and
Nursing Project
Bonds, 1975 Series A
3 135,000 New York State A* 9.375 Currently @ 100 S.F. 142,455
Medical Care 11/01/2016 2/03/94 @ 105 Ref.
Facilities Finance
Agency, Hospital and
Nursing Home Project
Bonds, 1975 Series A
4 105,000 New York State A* 7.400 11/01/04 @ 100 S.F. 108,524
Medical Care 11/01/2016 2/03/94 @ 103 Ref.
Facilities Finance
Agency, Hospital and
Nursing Home Project
Bonds, 1979 Series A
5 555,000 Power Authority of AAA 9.750 1/01/07 @ 100 S.F. 571,650
the State of New York 1/01/2017 1/01/94 @ 103 Ref.
General Purpose
Bonds,1983 Series N
(5)
6 500,000 Metropolitan AAA 9.875 7/01/05 @ 100 S.F. 528,894
Transportation 7/01/2017 7/01/94 @ 102 Ref.
Authority Commuter
Facilities Service
Contract Bonds, 1984
Series E (5)
7 250,000 Metropolitan AAA 9.875 7/01/05 @ 100 S.F. 264,448
Transportation 7/01/2017 7/01/94 @ 102 Ref.
Authority Transit
Facilities Service
Contract Bonds, 1984
Series E (5)
8 700,000 Municipal Assistance AAA 9.700 7/01/00 @ 100 S.F. 739,844
Corporation for the 7/01/2008 7/01/94 @ 102 Ref.
City of New York (A
Public Benefit
Corporation of the
State of New York)
1984 Series 48 Bonds
(5)
---------- ----------
$ 2,680,000 $ 2,806,499
========== ==========
See accompanying footnotes to portfolio and notes to financial statements.
</TABLE>
<PAGE>
Footnotes to Portfolio
December 31, 1993
(1) All ratings are by Standard & Poor's Corporation, except for those
identified by an asterisk (*) which are by Moody's Investors Service,
Inc. A brief description of the ratings symbols and their meanings
is set forth under "Description of Bond Ratings" in Part B of this
Prospectus.
(2) See "The Trust - Portfolio" in Part B of this Prospectus for an
explanation of redemption features. See "Tax Status" in Part B of
this Prospectus for a statement of the Federal tax consequences to a
Certificateholder upon the sale, redemption or maturity of a bond.
(3) At December 31, 1993, the net unrealized appreciation of all the bonds
was comprised of gross unrealized appreciation of $195,473.
(4) The annual interest income, based upon bonds held at December 31, 1993,
(excluding accretion of original issue discount on zero-coupon bonds)
to the Trust is $251,721.
(5) The bonds have been prerefunded and will be redeemed at the next
refunding call date.
(6) Bonds sold or called after December 31, 1993 are noted in a footnote
"Changes in Trust Portfolio" under "Description of Portfolio" in Part
A of this Prospectus.
(7) The Bonds may also be subject to other calls, which may be permitted or
required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess or
unanticipated revenues).
<PAGE>
Note: Part B of This Prospectus May Not be Distributed
Unless Accompanied by Part A.
Please Read And Retain Both Parts of This
Prospectus For Future Reference.
NEW YORK MUNICIPAL TRUST
NEW YORK DISCOUNT &
ZERO COUPON FUND
Prospectus Part B *
Dated: April 29, 1994
THE TRUST
Organization
"New York Municipal Trust" consists of the unit investment trusts
designated "New York Discount & Zero Coupon Fund" ("New York Discount
Trust") and "New York Municipal Trust" ("New York Municipal Trust")
created under the laws of the State of New York pursuant to a Trust
Indenture and Agreement** (the "Trust Agreement"), dated the Date of
Deposit, among Bear, Stearns & Co. Inc., as Sponsor, The Bank of New York
as Trustee, and Kenny S&P Evaluation Services as Evaluator.
* This Part B relates to the outstanding series of New York Discount
Trust or New York Municipal Trust (individually, the "Trust") as
reflected in Part A attached hereto.
** References in this Prospectus to the Trust Agreement are qualified
in their entirety by the Trust Indenture and Agreement which is
incorporated herein by reference.
<PAGE>
On the Date of Deposit the Sponsor deposited with the Trustee long-
term bonds, and/or delivery statements relating to contracts for the
purchase of certain such bonds (the "Bonds") and cash or an irrevocable
letter of credit issued by a major commercial bank in the amount required
for such purchases. Thereafter, the Trustee, in exchange for the Bonds so
deposited, delivered to the Sponsor the Certificates evidencing the
ownership of all Units of the Trusts.
The Trust consists of the interest-bearing bonds described under
"The Trust" in Part A of this Prospectus, the interest (including, where
applicable, earned original issue discount) on which is, in the opinions
of bond counsel to the respective issuers given at the time of original
delivery of the Bonds, exempt from regular federal income tax under
existing law and from New York State and New York City income taxes under
existing law.
Each "Unit" outstanding on the Evaluation Date represented an
undivided interest or pro rata share in the principal and interest of the
Trust in the ratio of one Unit to the principal amount of Bonds initially
deposited in the Trust as set forth in Part A of this Prospectus. To the
extent that any Units are redeemed by the Trustee, the fractional
undivided interest or pro rata share in the Trusts represented by each
unredeemed Unit will increase, although the actual interest in the Trusts
represented by such fraction will remain unchanged. Units will remain
outstanding until redeemed upon tender to the Trustee by Certificate-
holders, which may include the Sponsor, or until the termination of the
Trust Agreements.
Objectives
The Trust offers investors the opportunity to participate in a
portfolio of long-term tax-exempt bonds with a greater diversification
than they might be able to acquire themselves. The objectives of the
Trust are to preserve capital and to provide interest income (including,
where applicable, earned original issue discount) which is, in the
opinions of bond counsel to the respective issuers given at the time of
original delivery of the Bonds, exempt from regular federal income tax and
from New York State and New York City income taxes under existing law.
Such interest income may, however, be subject to the federal corporate
alternative minimum tax and to state and local taxes in other
jurisdictions. Investors should be aware that there is no assurance the
Trusts' objectives will be achieved as these objectives are dependent on
the continuing ability of the issuers of the Bonds to meet their interest
and principal payment requirements, on the continuing satisfaction of the
Bonds of the conditions required for the exemption of interest thereon
from regular federal income tax and on the market value of the Bonds,
which can be affected by fluctuations in interest rates and other factors.
Since disposition of Units prior to final liquidation of the Trust
may result in an investor receiving less than the amount paid for such
Units (see "Comparison of Public Offering Price, Sponsor's Repurchase
Price and Redemption Price"), the purchase of a Unit should be looked upon
as a long-term investment. Neither the Trusts nor the Total Reinvestment
Plan is designed to be a complete investment program.
PORTFOLIOS
All of the Bonds in the Trust were rated "A" or better by Standard &
Poor's Corporation or Moody's Investors Service, Inc. at the time
originally deposited in the Trust. For a list of the ratings of each Bond
on the Evaluation Date, see "Portfolio" in Part A of this Prospectus.
For information regarding (i) the number of issues in the Trust,
(ii) the range of fixed maturities of the Bonds, (iii) the number of
issues payable from the income of a specific project or authority and
(iv) the number of issues constituting general obligations of a government
entity, see "Description of Portfolio" in Part A.
When selecting Bonds for the Trust, the following factors, among
others, were considered by the Sponsor on the Date of Deposit: (a) the
quality of the Bonds and whether such Bonds were rated "A" or better by
either Standard & Poor's Corporation or Moody's Investors Service, Inc.,
(b) the yield and price of the Bonds relative to other New York and Puerto
Rico debt securities of comparable quality and maturity, (c) income to the
Certificateholders of the Trusts and (d) the diversification of the Trust
portfolio, as to purpose of issue and location of issuer, taking into
account the availability in the market of issues which meet such Trust's
quality, rating, yield and price criteria. Subsequent to the Evaluation
Date, a Bond may cease to be rated or its rating may be reduced below that
specified above. Neither event requires an elimination of such Bond from
the Trust but may be considered in the Sponsor's determination to direct
the Trustee to dispose of the Bond. See "Portfolio Supervision." For an
interpretation of the bond ratings see "Description of Bond Ratings."
Housing Bonds. Some of the aggregate principal amount of the Bonds
may consist of obligations of state and local housing authorities whose
revenues are primarily derived from mortgage loans to rental housing
projects for low to moderate income families. Since such obligations are
usually not general obligations of a particular state or municipality and
are generally payable primarily or solely from rents and other fees,
adverse economic developments including failure or inability to increase
rentals, fluctuations of interest rates and increasing construction and
operating costs may reduce revenues available to pay existing obligations.
See "Description of Portfolio" in Part A for the amount of rental housing
bonds contained therein.
Hospital Revenue Bonds. Some of the aggregate principal amount of
the Bonds may consist of hospital revenue bonds. Ratings of hospital
bonds are often initially based on feasibility studies which contain
projections of occupancy levels, revenues and expenses. Actual experience
may vary considerably from such projections. A hospital's gross receipts
and net income will be affected by future events and conditions including,
among other things, demand for hospital services and the ability of the
hospital to provide them, physicians' confidence in hospital management
capability, economic developments in the service area, competition,
actions by insurers and governmental agencies and the increased cost and
possible unavailability of malpractice insurance. Additionally, a major
portion of hospital revenue typically is derived from federal or state
programs such as Medicare and Medicaid which have been revised
substantially in recent years and which are undergoing further review at
the state and federal level.
Proposals for significant changes in the health care system and the
present programs for third party payment of health care costs are under
consideration in Congress and many states. Future legislation or changes
in the areas noted above, among other things, would affect all hospitals
to varying degrees and, accordingly, any adverse change in these areas may
affect the ability of such issuers to make payment of principal and
interest on such bonds. See "Description of Portfolio" in Part A for the
amount of hospital revenue bonds contained therein.
Nuclear Power Facility Bonds. Certain Bonds may have been issued in
connection with the financing of nuclear generating facilities. In view
of recent developments in connection with such facilities, legislative and
administrative actions have been taken and proposed relating to the
development and operation of nuclear generating facilities. The Sponsor
is unable to predict whether any such actions or whether any such
proposals or litigation, if enacted or instituted, will have an adverse
impact on the revenues available to pay the debt service on the Bonds in
the portfolio issued to finance such nuclear projects. See "Description
of Portfolio" in Part A for the amount of bonds issued to finance nuclear
generating facilities contained therein.
Mortgage Subsidy Bonds. Certain Bonds may be "mortgage subsidy
bonds" which are obligations of which all or a significant portion of the
proceeds are to be used directly or indirectly for mortgages on owner-
occupied residences. Section 103A of the Internal Revenue Code of 1954,
as amended, provided as a general rule that interest on "mortgage subsidy
bonds" will not be exempt from Federal income tax. An exception is
provided for certain "qualified mortgage bonds." Qualified mortgage bonds
are bonds that are used to finance owner-occupied residences and that meet
numerous statutory requirements. These requirements include certain
residency, ownership, purchase price and target area requirements, ceiling
amounts for state and local issuers, arbitrage restrictions and (for bonds
issued after December 31, 1984) certain information reporting,
certification, public hearing and policy statement requirements. In the
opinions of bond counsel to the issuing governmental authorities, interest
on all the Bonds in a Trust that might be deemed "mortgage subsidy bonds"
will be exempt from Federal income tax when issued. See "Description of
Portfolio" in Part A for the amount of mortgage subsidy Bonds contained
therein.
Mortgage Revenue Bonds. Certain Bonds may be "mortgage revenue
bonds." Under the Internal Revenue Code of 1986, as amended (the "Code")
(and under similar provisions of the prior tax law) "mortgage revenue
bonds" are obligations the proceeds of which are used to finance owner-
occupied residences under programs which meet numerous statutory
requirements relating to residency, ownership, purchase price and target
area requirements, ceiling amounts for state and local issuers, arbitrage
restrictions, and certain information reporting certification, and public
hearing requirements. There can be no assurance that additional federal
legislation will not be introduced or that existing legislation will not
be further amended, revised, or enacted after delivery of these Bonds or
that certain required future actions will be taken by the issuing
governmental authorities, which action or failure to act could cause
interest on the Bonds to be subject to federal income tax. If any portion
of the Bonds proceeds are not committed for the purpose of the issue,
Bonds in such amount could be subject to earlier mandatory redemption at
par, including issues of Zero Coupon Bonds (see "Discount and Zero Coupon
Bonds"). See "Description of Portfolio" in Part A for the amount of
mortgage revenue bonds contained therein.
Private Activity Bonds. The portfolio of the Trust may contain
other Bonds which are "private activity bonds" (often called Industrial
Revenue Bonds ("IRBs") if issued prior to 1987) which would be primarily
of two types: (1) Bonds for a publicly owned facility which a private
entity may have a right to use or manage to some degree, such as an
airport, seaport facility or water system and (2) facilities deemed owned
or beneficially owned by a private entity but which were financed with
tax-exempt bonds of a public issuer, such as a manufacturing facility or a
pollution control facility. In the case of the first type, bonds are
generally payable from a designated source of revenues derived from the
facility and may further receive the benefit of the legal or moral
obligation of one or more political subdivisions or taxing jurisdictions.
In most cases of project financing of the first type, receipts or revenues
of the Issuer are derived from the project or the operator or from the
unexpended proceeds of the bonds. Such revenues include user fees,
service charges, rental and lease payments, and mortgage and other loan
payments.
The second type of issue will generally finance projects which are
owned by or for the benefit of, and are operated by, corporate entities.
Ordinarily, such private activity bonds are not general obligations of
governmental entities and are not backed by the taxing power of such
entities, and are solely dependent upon the creditworthiness of the
corporate user of the project or corporate guarantor.
The private activity bonds in the Trust have generally been issued
under bond resolutions, agreements or trust indentures pursuant to which
the revenues and receipts payable under the issuer's arrangements with the
users or the corporate operator of a particular project have been assigned
and pledged to the holders of the private activity bonds. In certain
cases a mortgage on the underlying project has been assigned to the
holders of the private activity bonds or a trustee as additional security.
In addition, private activity bonds are frequently directly guaranteed by
the corporate operator of the project or by another affiliated company.
See "Description of Portfolio" in Part A for the amount of private
activity bonds contained therein.
Litigation. Litigation challenging the validity under state
constitutions of present systems of financing public education has been
initiated in a number of states. Decisions in some states have been
reached holding such school financing in violation of state constitutions.
In addition, legislation to effect changes in public school financing has
been introduced in a number of states. The Sponsor is unable to predict
the outcome of the pending litigation and legislation in this area and
what effect, if any, resulting changes in the sources of funds, including
proceeds from property taxes applied to the support of public schools, may
have on the school bonds in the Trusts. See "Description of Portfolio"
for the amount of school bonds contained therein.
To the Sponsor's knowledge, there is no litigation pending as of the
date of this Prospectus with respect to any Bonds which might reasonably
be expected to have a material adverse effect on the Trust. Such
litigation, as, for example, suits challenging the issuance of pollution
control revenue bonds under recently enacted environmental protection
statutes, may affect the validity of such Bonds or the tax-free nature of
the interest thereon. At any time after the date of this Prospectus,
litigation may be instituted on a variety of grounds with respect to the
Bonds in the Trust. The Sponsor is unable to predict whether any such
litigation may be instituted or, if instituted, whether it might have a
material adverse effect on the Trust.
Other Factors. The Bonds in the Trust, despite their optional
redemption provisions which generally do not take effect until 10 years
after the original issuance dates of such bonds (often referred to as "ten
year call protection"), do contain provisions which require the issuer to
redeem such obligations at par from unused proceeds of the issue within a
stated period. In recent periods of declining interest rates there have
been increased redemptions of bonds, particularly housing bonds, pursuant
to such redemption provisions. In addition, the Bonds in the Trusts are
also subject to mandatory redemption in whole or in part at par at any
time that voluntary or involuntary prepayments of principal on the
underlying collateral are made to the trustee for such bonds or that the
collateral is sold by the bond issuer. Prepayments of principal tend to
be greater in periods of declining interest rates; it is possible that
such prepayments could be sufficient to cause a bond to be redeemed
substantially prior to its stated maturity date, earliest call date or
sinking fund redemption date.
The Bonds may also be subject to other calls, which may be permitted
or required by events which cannot be predicted (such as destruction,
condemnation, or termination of a contract).
In 1976 the federal bankruptcy laws were amended so that an
authorized municipal debtor could more easily seek federal court
protection to assist in reorganizing its debts so long as certain
requirements were met. Historically, very few financially troubled
municipalities have sought court assistance for reorganizing their debts;
notwithstanding, the Sponsors are unable to predict to what extent
financially troubled municipalities may seek court assistance in
reorganizing their debts in the future and, therefore, what effect, if
any, the applicable federal bankruptcy law provisions will have on the
Trusts.
The Trust may also include "moral obligation" bonds issued by
agencies and authorities of New York State. Under statutes applicable to
such Bonds, the State may be called on to restore any deficits in capital
reserve funds of such agencies or authorities created with respect to the
Bonds. Any such restoration requires appropriation by the State
Legislature for such purpose, and accordingly the statutes do not
constitute a legally enforceable obligation or debt of the State. The
agencies or authorities in question have no taxing power. Neither the
State nor any State agency having the benefit of a "moral obligation"
provision is in default in the payment of principal or interest on any
bond.
Certain of the Bonds in the Trust are subject to redemption prior to
their stated maturity dates pursuant to sinking fund or call provisions.
A sinking fund is a reserve fund appropriated specifically toward the
retirement of a debt. A callable bond is one which is subject to
redemption or refunding prior to maturity at the option of the issuer. A
refunding is a method by which a bond is redeemed at or before maturity
from the proceeds of a new issue of bonds. In general, call provisions
are more likely to be exercised when the offering side evaluation of a
bond is at a premium over par than when it is at a discount from par. A
listing of the sinking fund and call provisions, if any, with respect to
each of the Bonds is contained under "Portfolio" in Part A of this
Prospectus. Certificateholders will realize a gain or loss on the early
redemption of such Bonds, depending upon whether the price of such Bonds
is at a discount from or at a premium over par at the time the Certifi-
cateholders purchase their Units.
Neither the Sponsor nor the Trustee shall be liable in any way for
any default, failure or defect in any of the Bonds. Because certain of
the Bonds from time to time may be redeemed or will mature in accordance
with their terms or may be sold under certain circumstances, no assurance
can be given that the Trust will retain its present size and composition
for any length of time. The proceeds from the sale of a Bond or the
exercise of any redemption or call provision will be distributed to Cer-
tificateholders on the next distribution date except to the extent such
proceeds are applied to meet redemptions of Units. See "Trustee
Redemption."
Puerto Rico Bonds. Certain of the Bonds in the portfolio may be
general obligations and/or revenue bonds of issuers located in Puerto Rico
which will be affected by general economic conditions in Puerto Rico. The
economy of Puerto Rico is closely integrated with that of the mainland
United States. During fiscal year 1991, approximately 87% of Puerto
Rico's exports were to the United States mainland, which was also the
source of 67% of Puerto Rico's imports. In fiscal 1991, Puerto Rico
experienced a $2,325.5 million positive adjusted trade balance. The
economy of Puerto Rico is dominated by the manufacturing and service
sectors. The manufacturing sector has experienced a basic change over the
years as a result of increased emphasis on higher wage, high technology
industries such as pharmaceuticals, electronics, computers,
microprocessors, professional and scientific instruments, and certain high
technology machinery and equipment. The service sector, including
finance, insurance and real estate, also plays a major role in the
economy. It ranks second only to manufacturing in contribution to the
gross domestic product and leads all sectors in providing employment. In
recent years, the service sector has experienced significant growth in
response to and paralleling the expansion of the manufacturing sector.
Since fiscal 1987, personal income has increased consistently in each
fiscal year. In fiscal 1991, aggregate personal income was $21.4 billion
($18.7 billion in 1987 prices) and personal income per capital was $6,038
($5,287 in 1987 prices). Real personal income showed a small decrease in
fiscal 1991 principally as a result of a decline in real transfer
payments. Real transfer payments grew at an above normal rate in fiscal
1990 due to the receipt of non-recurrent relief of federal funds for
hurricane Hugo victims. Personal income includes transfer payments to
individuals in Puerto Rico under various social programs. Total federal
payments to Puerto Rico, which include many types in addition to federal
transfer payments, are lower on a per capita basis in Puerto Rico than in
any state. Transfer payments to individuals in fiscal 1991 were $4.6
billion, of which $3.0 billion, or 65.4%, represent entitlement to
individuals who had previously performed services or made contributions
under programs such as social security, veterans benefits and medicare.
The number of persons employed in Puerto Rico rose to a record level
during fiscal 1991. Unemployment, although at the lowest level since the
late 1970s, remains above the average for the United States. In fiscal
1991, the unemployment rate in Puerto Rico was 15.2%. From fiscal 1987
through fiscal 1990, Puerto Rico experienced an economic expansion that
affected almost every sector of its economy and resulted in record levels
of employment. Factors behind this expansion include Commonwealth
sponsored economic development programs, the relatively stable prices of
oil imports, the continued growth of the United States economy, periodic
declines in exchange value of the United States dollar and the relatively
low cost borrowing during the period. Real gross product amounted to
approximately $19.2 billion in fiscal 1991, or .9% above the fiscal 1990
level. The economy continued its growth during fiscal 1991 but at a
slower rate. The Puerto Rico Planning Board's economic activity index, a
composite index for thirteen economic indicators, increased .4% for the
first eleven months of fiscal 1992 compared to the same period in fiscal
1991, which period showed a decrease of .5% over the same period in fiscal
1990. Growth in the Puerto Rico economy in fiscal 1993 depends on several
factors, including the state of the United States economy and the relative
stability in the price of oil imports, the exchange value of the U.S.
dollar and the cost of borrowing.
Discount And Zero Coupon Bonds
Some of the Bonds in the Trust may be original issue discount bonds.
The original issue discount, which is the difference between the initial
purchase price of the Bonds and the face value, is deemed to accrue on a
daily basis and the accrued portion will be treated as tax-exempt interest
income for regular federal income tax purposes. Upon sale or redemption,
any gain realized that is in excess of the earned portion of original
issue discount will be taxable as capital gain. (See "Tax Status.") The
current value of an original issue discount bond reflects the present
value of its face amount at maturity. The market value tends to increase
more slowly in early years and in greater increments as the Bonds approach
maturity. Of these original issue discount bonds, a portion of the
aggregate principal amount of the Bonds in each Trust is Zero Coupon
Bonds. See "Description of Portfolio" in Part A. Zero Coupon Bonds do
not provide for the payment of any current interest and provide for
payment at maturity at par value unless sooner sold or redeemed. The
market value of Zero Coupon Bonds is subject to greater fluctuation than
coupon bonds in response to changes in interest rates. Zero Coupon Bonds
generally are subject to redemption at compound accreted value based on
par value at maturity. Because the issuer is not obligated to make
current interest payments, Zero Coupon Bonds may be less likely to be
redeemed than coupon bonds issued at a similar interest rate.
Some of the Bonds in the Trust may have been purchased at deep
"market" discount from par value at maturity. This is because the coupon
interest rates on the discount bonds at the time they were purchased and
deposited in the Trust were lower than the current market interest rates
for newly issued bonds of comparable rating and type. At the time of
issuance the discount Bonds were for the most part issued at then current
coupon interest rates. The current yields (coupon interest income as a
percentage of market price) of discount bonds will be lower than the
current yields of comparably rated bonds of similar type newly issued at
current interest rates because discount bonds tend to increase in market
value as they approach maturity and the full principal amount becomes
payable. A discount bond held to maturity will have a larger portion of
its total return in the form of capital gain and less in the form of tax-
exempt interest income than a comparable bond newly issued at current
market rates. Gain on the disposition of a Bond purchased at a market
discount generally will be treated as ordinary income, rather than capital
gain, to the extent of accrued market discount. Discount bonds with a
longer term to maturity tend to have a higher current yield and a lower
current market value than otherwise comparable bonds with a shorter term
to maturity. If interest rates rise, the value of discount bonds will
decrease; and if interest rates decline, the value of discount bonds will
increase. The discount does not necessarily indicate a lack of market
confidence in the issuer.
SPECIAL FACTORS AFFECTING NEW YORK
The information set forth below is derived from official statements
released by the City of New York in connection with the preparation of the
State's Executive Budget and official statements and/or preliminary drafts
of official statements prepared in connection with the issuance of New
York State and New York City municipal bonds. The Sponsor has not
independently verified this information.
New York City. New York City (the "City"), with a population of
approximately 7.3 million, is an international center of business and
culture. Its non-manufacturing economy is broadly based, with the banking
and securities, life insurance, communications, publishing, fashion
design, retailing and construction industries accounting for a significant
portion of the City's total employment earnings. Additionally, the City
is the nation's leading tourist destination. The City's manufacturing
activity is conducted primarily in apparel and publishing.
The national economic recession which began in July 1990 has
adversely impacted the City harder than almost any other political
jurisdiction in the nation. As a result, the City, with approximately 3
percent of national employment, has lost approximately 20 percent of all
U.S. jobs during the recent economic downturn and, consequently, has
suffered erosion of its local tax base. In total, the City private sector
employment has plummeted by approximately 360,000 jobs since 1987. But,
after nearly five years of decline, the City appears to be on the verge of
a broad-based recovery which will lift many sectors of the local economy.
Most of the nascent local recovery can be attributed to the continued
improvement in the U.S. economy, but a great deal of the strength expected
in the City economy will be due to local factors, such as the heavy
concentration of the securities and banking industries in the City. The
current forecast calls for modest employment growth of about 20,000 a year
(0.6 percent) on average through 1998 with some slowing but still positive
growth in employment in 1995-96 as U.S. growth slows (local job gains slow
from 25,000 to around 10,000 per year).
During the most recent economic downturn, the City has faced
recurring extraordinary budget gaps that have been addressed by
undertaking one-time, one-shot budgetary initiatives to close then
projected budget gaps in order to achieve a balanced budget as required by
the laws of the State of New York (the "State"). For example, in order to
achieve a balanced budget for the 1992 fiscal year, the City increased
taxes and reduced services during the 1991 fiscal year to close a then
projected gap of $3.3 billion in the 1992 fiscal year which resulted from,
among other things, lower than expected tax revenue of approximately $1.4
billion, reduced State aid for the City of approximately $564 million and
greater than projected increases in legally mandated expenditures of
approximately $400 million, including public assistance and Medicare
expenditures. The gap closing measures for fiscal year 1992 included
receipt of $605 million from tax increases, approximately $1.5 billion of
proposed service reductions and proposed productivity savings of $545
million.
Notwithstanding its recurring projected budgets gaps, for fiscal
years 1981 through 1993 the City achieved balanced operating results (the
City's General Fund revenues and transfers reduced by expenditures and
transfers), as reported in accordance with Generally Accepted Accounting
Principles ("GAAP"), and the City's 1994 fiscal year results are projected
to be balanced in accordance with GAAP.
The City's ability to maintain balanced budgets in the future is
subject to numerous contingencies; therefore, even though the City has
managed to close substantial budget gaps in recent years in order to
maintain balanced operating results, there can be no assurance that the
City will continue to maintain a balanced budget as required by State law
without additional tax or other revenue increases or reduction in City
services, which could adversely affect the City's economic base.
Pursuant to the laws of the State, the City prepares an annual four-
year financial plan, which is reviewed and revised on a quarterly basis
and which includes the City's capital, revenue and expense projections.
The City is required to submit its financial plans to review bodies,
including the New York State Financial Control Board ("Control Board").
If the City were to experience certain adverse financial circumstances,
including the occurrence or the substantial likelihood and imminence of
the occurrence of an annual operating deficit of more than $100 million or
the loss of access to the public credit markets to satisfy the City's
capital and seasonal financing requirements, the Control Board would be
required by State law to exercise powers, among others, of prior approval
of City financial plans, proposed borrowings and certain contracts.
On November 23, 1993, the City submitted to the Control Board the
Financial Plan for the 1994 through 1997 fiscal years, which is a
modification to a financial plan submitted to the Control Board on
August 30, 1993 and which relates to the City, the Board of Education
("BOE") and the City University of New York ("CUNY"). The 1994-1997
Financial Plan projects revenues and expenditures for the 1994 fiscal year
balanced in accordance with GAAP. The 1994-1997 Financial Plan sets forth
actions to close a previously projected gap of approximately $2.0 billion
in the 1994 fiscal year. The gap-closing actions for the 1994 fiscal year
included agency actions aggregating $666 million, including productivity
savings and savings from restructuring the delivery of City services;
service reductions aggregating $274 million; the sale of delinquent real
property tax receivables for $215 million; discretionary transfers from
the 1993 fiscal year of $110 million; reduced debt service costs
aggregating $187 million, resulting from refinancings and other actions;
$150 million in proposed increased Federal assistance; a continuation of
the personal income tax surcharge, resulting in revenues of $143 million;
$80 million in proposed increased State aid, which is subject to approval
by the Governor; and revenue actions aggregating $173 million.
The Financial Plan also sets forth projections for the 1995 through
1997 fiscal years and outlines a proposed gap-closing program to close
projected budget gaps of $1.7 billion, $2.5 billion and $2.7 billion for
the 1995 through 1997 fiscal years, respectively. City gap-closing
actions total $640 million in the 1995 fiscal year, $814 million in the
1996 fiscal year and $870 million in the 1997 fiscal year. These actions
include increased revenues and reduced expenditures from agency actions
aggregating $165 million, $439 million and $470 million in the 1995
through 1997 fiscal years, respectively, including productivity savings
and savings from restructuring the delivery of City services and service
reductions; possible BOE expenditure reductions aggregating $125 million
in each of the 1995 through 1997 fiscal years; and reduced other than
personal service costs aggregating $50 million in each of the 1995 through
1997 fiscal years.
State actions proposed in the gap-program total $306 million, $616
million and $766 million in each of the 1995, 1996 and 1997 fiscal years,
respectively. These actions include savings from various proposed mandate
relief measures and the proposed reallocation of State education aid among
various localities totaling $175 million, $325 million and $475 million in
each of the 1995, 1996 and 1997 fiscal years, respectively. These actions
also include $131 million in 1995 and $291 million in each of 1996 and
1997 in anticipated State actions which could include savings from the
proposed State assumption of certain Medicaid costs or various proposed
mandate relief measures.
The Federal actions proposed in the gap-closing program are $100
million and $200 million in increased Federal assistance in fiscal years
1996 and 1997, respectively.
Other Actions proposed in the gap-closing program represent Federal,
State or City actions to be specified in the future.
Various actions proposed in the Financial Plan, including the
proposed continuation of the personal income tax surcharge beyond December
31, 1995 and the proposed increase in State aid, are subject to approval
by the Governor and the State Legislature, and the proposed increase in
Federal aid is subject to approval by Congress and the President. The
State Legislature has in previous legislative sessions failed to approve
proposals for the State assumption of certain Medicaid costs, mandate
relief and reallocation of State education aid, thereby increasing the
uncertainty as to the receipt of the State assistance included in the
Financial Plan. If these actions cannot be implemented, the City will be
required to take other actions to decrease expenditures or increase
revenues to maintain a balanced financial plan. The state Legislature has
approved the continuation of the personal income tax surcharge through
December 31, 1995, and the Governor is expected to approve this
continuation. The Financial Plan has been the subject of extensive public
comment and criticism particularly regarding the sale of delinquent
property tax receivables, the sale of the New York City Off-Track Betting
Corporation ("OTB"), the amount of State and Federal aid included in the
Financial Plan and the inclusion of non-recurring actions.
Notwithstanding the proposed city, federal and state actions in the
gap-closing programs, the City Comptroller has warned in past published
reports that State and local tax increases in an economic downturn or
period of slow economic growth can have adverse effects on the local
economy and can slow down an economic recovery. The City Comptroller has
also previously expressed concerns about the effects on the City's economy
and budgets of rapidly increasing water and sewer rates, decreasing rental
payments in future years from the Port Authority under leases for
LaGuardia and Kennedy airports, the dependence on increased aid from the
State and Federal Governments for gap-closing programs, the escalation
cost of judgements and claims, federal deficit reduction measures and the
increasing percentage of future years' revenues projected to be consumed
by debt service, even after reductions in the capital program.
Although the City has maintained balanced budgets in each of its
last thirteen fiscal years, and is projected to achieve balanced operating
results for the 1993 fiscal year, there can be no assurance that the gap-
closing actions proposed in the Financial Plan can be successfully
implemented or that the City will maintain a balanced budget in future
years without additional State aid, revenue increases or expenditure
reductions. Additional tax increases and reductions in essential City
services could adversely affect the City's economic base.
In November 1993, Rudolph W. Giuliani was elected mayor of the City,
replacing the previous administration on January 1, 1994. Mayor
Giuliani's Modification No. 94-2 to the Financial Plan for the City and
Covered Organizations for fiscal years 1994-1998 (the "Modification"),
issued February 10, 1994, reports that for 1995 fiscal year, the budget
gap is estimated at $2.26 billion, or nearly a 12 percent shortfall of
existing tax revenues over baseline expenditures. Absent gap closing
initiatives, the Modification reports that the projected budget gap will
grow to nearly $3.4 billion by 1998 fiscal year. According to the
Modification, the 1995 fiscal year budget gap is the largest that the City
has faced since 1981, when the City converted to GAAP. The Modification
attributes the projected budget gaps to the lingering national recession,
to a sharp growth in expenditures during the boom years of the 1980s and
the failure of the City to reduce the City's municipal workforce. The
Modification reports that at the same time that City employment has
declined as a percentage of U.S. employment, local government employment
in the City, which exceeds the state government employment of the five
largest states, is on the verge of an historic high. According to the
Modification, at the end of December 1993, the City's full-time municipal
workforce stood at more than 362,000 employees, and absent reductions,
will reach an all-time high at the end of fiscal year 1994.
The Modification states that in order to strengthen the City's long-
term fiscal position the City's gap closing initiatives must be
accomplished without resorting to one-shot gap-closing measures, such as
tax increases; instead, it must balance its budgets by reducing City
spending, reducing the size of the City's municipal workforce and reducing
certain City taxes to encourage economic growth. Under the Modification,
fiscal year 1995 spending declines by $516 million over the current fiscal
year, the lowest projected spending rate since 1975. The Modification
plans to reduce the City's municipal workforce by 15,000 positions, as
compared to the current actual headcount, by the end of fiscal year 1995.
The workforce reduction will be achieved through an aggressive severance
package, and, if necessary, layoffs. It is anticipated that these
workforce reduction initiatives will save $117 million, $144 million, $311
million, $415 million and $539 million in fiscal years 1994 through 1998,
respectively, after taking into account an estimated $200 million in costs
related to instituting the proposed severance programs which are
anticipated to be financed with surplus Municipal Assistance Corporation
funds (see below for a discussion of the Municipal Assistance
Corporation). The Modification also contemplates the loss of $35 million,
$186 million, $534 million and $783 million in tax revenues in 1995
through 1998, respectively, as a result of the reduction in certain City
taxes, such as the reduction of the hotel tax from 6 percent to 5 percent,
commercial rent tax reductions and the elimination of the 12.5 percent
personal income tax surcharge.
The 1994-97 Financial Plan is based on numerous assumptions,
including the recovery of the City's and the region's economy early in the
calendar year 1993 and the concomitant receipt of economically sensitive
tax revenues in the amounts projected. The 1994-97 Financial Plan is
subject to various other uncertainties and contingencies relating to,
among other factors, the extent, if any, to which wage increases for City
employees exceed the annual increases assumed for the 1994 through 1997
fiscal years; continuation of the 9% interest earnings assumptions for
pension fund assets affecting the City's required pension fund
contributions; the willingness and ability of the State to provide the aid
contemplated by the Financial Plan and to take various other actions to
assist the City, including the proposed State takeover of certain Medicaid
costs and State mandate relief, the ability of the New York City Health
and Hospitals Corporation ("HHC"), BOE and other agencies to maintain
budget balance; the willingness of the Federal government to provide
Federal aid; approval of the proposed continuation of the personal income
tax surcharge and the State budgets; adoption of the City's budgets by the
City Council; the ability of the City to implement contemplated
productivity and service and personnel reduction programs and the success
with which the City controls expenditures; additional expenditures that
may be incurred due to the requirements of certain legislation requiring
minimum levels of funding for education; the City's ability to market its
securities successfully in the public credit markets; the level of funding
required to comply with the Americans with Disabilities Act of 1990; and
additional expenditures that may be incurred as a result of deterioration
in the condition of the City's infrastructure. Certain of these
assumptions have been questioned by the City Comptroller and other public
officials.
Estimates of the City's revenues and expenditures are based on
numerous assumptions and subject to various uncertainties. If expected
Federal or State aid is not forthcoming, if unforeseen developments in the
economy significantly reduce revenues derived from economically sensitive
taxes or necessitate increased expenditures for public assistance, if the
City should negotiate wage increases for its employees greater than the
amounts provided for in the City's Financial Plan or if other
uncertainties materialize that reduce expected revenues or increase
projected expenditures, then, to avoid operating deficits, the City may be
required to implement additional actions, including increases in taxes and
reductions in essential City services. The City might also seek
additional assistance from the State.
The City depends on the State for State aid both to enable the City
to balance its budget and to meet its cash requirements. For its 1993
fiscal year, the State, before taking any remedial action, reported a
potential budget deficit of $4.8 billion (before providing for repayment
of the deficit notes as described below). If the State experiences
revenue shortfalls or spending increases beyond its projections during its
1993 fiscal year or subsequent years, such developments could result in
reductions in projected State aid to the City. In addition, there can be
no assurance that State budgets in future fiscal years will be adopted by
the April 1 statutory deadline and that there will not be adverse effects
on the City's cash flow and additional City expenditures as a result of
such delays.
Implementation of the Financial Plan is also dependent upon the
City's ability to market its securities successfully in the public credit
markets. The City's financing program for fiscal years 1994-1997
contemplates issuance of $11.7 billion of general obligation bonds
primarily to reconstruct and rehabilitate the City's infrastructure and
physical assets and to make capital investments. A significant portion of
such bond financing is used to reimburse the City's general fund for
capital expenditures already incurred. In addition, the City issues
revenue and tax anticipation notes to finance its seasonal working capital
requirements. The success of projected public sales of City bonds and
notes will be subject to prevailing market conditions at the time of the
sale, and no assurance can be given that such sales will be completed. If
the City were unable to sell its general obligation bonds and notes, it
would be prevented from meeting its planned operating and capital
expenditures.
Substantially all of the City's full-time employees are members of
labor unions. The Financial Emergency Act requires that all collective
bargaining agreements entered into by the City and the Covered
Organizations be consistent with the City's current financial plan, except
under certain circumstances, such as awards arrived at through impasse
procedures.
On January 11, 1993, the City announced a settlement with a
coalition of municipal unions, including Local 237 of the International
Brotherhood of Teamsters ("Local 237"), District Council 37 of the
American Federation of State, County and Municipal Employees ("District
Council 37") and other unions covering approximately 44% of the City's
work force. The settlement, which has been ratified by the unions,
includes a total net expenditure increase of 8.25% over a 39-month period,
ending March 31, 1995 for most of these employees. On April 9, 1993 the
City announced an agreement with the Uniformed Fire Officers Association
(the "UFOA") which is consistent with the coalition agreement. The
agreement has been ratified. The Financial Plan reflects the costs
associated with these settlements and provides for similar increases for
all other City-funded employees.
The Financial Plan provides no additional wage increases for City
employees after their contracts expire in the 1995 fiscal year. Each 1%
wage increase for all employees commencing in the 1995 fiscal year would
cost the City an additional $30 million for the 1995 fiscal year and $135
million for the 1996 fiscal year and $150 million for each year thereafter
above the amounts provided for in the Financial Plan.
A substantial portion of the capital improvements in the City are
financed by indebtedness issued by the Municipal Assistance Corporation
for the City of New York ("MAC"). MAC was organized in 1975 to provide
financing assistance for the City and also to exercise certain review
functions with respect to the City's finances. MAC bonds are payable out
of certain State sales and compensating use taxes imposed within the City,
State stock transfer taxes and per capita State aid to the City. Any
balance from these sources after meeting MAC debt service and reserve fund
requirements and paying MAC's operating expenses is remitted to the City
or, in the case of the stock transfer taxes, rebated to the taxpayers.
The State is not, however, obligated to continue the imposition of such
taxes or to continue appropriation of the revenues therefrom to MAC, nor
is the State obligated to continue to appropriate the State per capita aid
to the City which would be required to pay the debt service on certain MAC
obligations. MAC has no taxing power and MAC bonds do not create an
enforceable obligation of either the State or the City. As of September
30, 1993, MAC had outstanding an aggregate of approximately $5.304 billion
of its bonds.
Standard & Poor's has rated City Bonds A-. Moody's Investors
Service, Inc. ("Moody's") has rated City Bonds Baal. Such ratings reflect
only the views of Standard & Poor's and Moody's from which an explanation
of the significance of such ratings may be obtained. There is no
assurance that either or both of such ratings will continue for any given
period of time or that either or both will not be revised downward or
withdrawn entirely. Any such downward revision or withdrawal could have
an adverse effect on the market prices of the Bonds.
In 1975, Standard & Poor's suspended its A rating of City Bonds.
This suspension remained in effect until March 1981, at which time the
City received an investment grade rating of BBB from Standard & Poor's.
On July 2, 1985, Standard & Poor's revised its rating of City Bonds upward
to BBB+ and on November 19, 1987, to A-. On July 2, 1993, Standard &
Poor's reconfirmed its A- rating of City Bonds, continued its negative
rating outlook assessment and stated that maintenance of such ratings
depended upon the City's making further progress towards reducing budget
gaps in the outlying years. Moody's ratings of City bonds were revised in
November 1981 from B (in effect since 1977) to Ba1, in November 1983 to
Baa, in December 1985 to Baal, in May 1988 to A and again in February 1991
to Baal.
New York State and Its Authorities. The national recession which
commenced in mid-1990 has had a more adverse impact on the State's economy
than on other parts of the nation, owing to a significant retrenchment in
the financial services industry, cutbacks in defense spending, and an
overbuilt real estate market in the State and City. As a result of the
national and regional economic recession, the State's tax revenues for its
1991 and 1992 fiscal years were substantially lower than projected.
Consequently, the State took various actions for its 1992 fiscal year,
which included increases in certain State taxes and fees, substantial
decreases in certain expenditures from previously projected levels,
including cuts in State operations and reductions in State aid to
localities, and the sale of $531 million of short-term deficit notes prior
to the end of the State's 1992 fiscal year. The State's 1992-93 budget
was passed on time, closing an estimated $4.8 billion imbalance resulting
primarily from the national and regional economic recession. Major
budgetary actions included a freeze in the scheduled reduction in the
personal income tax and business tax surcharge, adoption of significant
Medicaid cost containment or revenue initiatives, and reductions in both
agency operations and grants to local governments from previously
anticipated levels. The State completed its 1993 fiscal year with a
positive margin of $671 million in the General Fund which was deposited
into a tax refund reserve account.
The Governor released the recommended Governor's Executive Budget
for the 1993-1994 fiscal year on January 19, 1993. The recommended 1993-
1994 State Financial Plan projected a balanced General Fund. General Fund
receipts and transfers from other funds were projected at $31.6 billion,
including $184 million carried over from the State's 1993 fiscal year.
Disbursements and transfers from other funds were projected at $31.5
billion, not including a $67 million repayment to the State's Tax
Stabilization Reserve Fund. To achieve General Fund budgetary balance in
the 1994 State fiscal year, the Governor recommended various actions.These
included proposed spending reductions and other actions that would reduce
General Fund spending ($1.6 billion); continuing the freeze on personal
income and corporate tax reductions and on hospital assessments ($1.3
billion); retaining moneys in the General Fund that would otherwise have
been deposited in dedicated highway and transportation funds ($516
million); a 21-cent increase in the cigarette tax ($180 million); and new
revenues from miscellaneous sources ($91 million). The recommended
Governor's 1993-94 Executive Budget included reductions in anticipated aid
to all levels of local government.
In comparison to the recommended 1993-94 Executive Budget, the 1993-
94 State budget, as enacted, reflects increases in both receipts and
disbursements in the general Fund of $811 million.
The $811 million increase in projected receipts reflects (i) an
increase of $487 million, from $184 million to $671 million, in the
positive year-end margin at March 31, 1993, which resulted primarily from
improving economic conditions and higher-than-expected tax collections,
(ii) an increase of $269 million in projected receipts, $211 million
resulting from the improved 1992-93 results and the expectation of an
improving economy and the balance from improved auditing and enforcement
measures and other miscellaneous items, (iii) additional payments of $200
million from the Federal government to reimburse the State for the cost of
providing indigent medical care, and (iv) the payment of an additional $50
million of personal income tax refunds in the 1992-93 fiscal year which
would otherwise have been paid in fiscal year 1993-94; offset by (v) $195
million of revenue raising recommendations in the Executive Budget that
were not enacted in the budget and thus are not included in the 1993-94
State Financial Plan.
The $811 million increase in projected disbursements reflects (i) an
increase of $252 million in projected school-aid payments, after applying
estimated receipts from the State Lottery allocated to school aid, (ii) a
increase of $194 million in projected payments for Medicaid assistance and
other social service programs, (iii) additional spending on the judiciary
($56 million) and criminal justice ($48 million), (iv) a net capital
projects, of $162 million, after reflecting certain re-estimates in
spending, and (v) the transfer of $100 million to a newly-established
contingency reserve.
The 1993-94 State budget, as enacted, included $400 million less in
State actions that the City had anticipated. Reform of education aid
formulas was achieved which brought an additional $145 million education
dollars to New York City. However, the State Legislature failed to enact
a takeover of local Medicaid costs, other significant mandate relief items
and certain Medicaid cost containment items proposed by the Governor,
which would have provided the City with savings. The adopted State budget
cut aid for probation services, increased sanctions on social service
programs, eliminated the pass-through of a State surcharge on parking
tickets, cut reimbursement for CHIPS transportation operating dollars, and
required a large contribution in City funds to hold the MTA fare at the
current level. In the event of any significant reduction in projected
State revenues or increases in projected State expenditures from the
amounts currently projected by the State, there could be an adverse impact
on the timing and amounts of State aid payments to the City in the future.
On October 29, 1993, the State released a revised financial plan for
the State's 1993-94 fiscal year (the "Revised State Financial Plan") which
includes increased taxes and other revenues, deferral of scheduled
personal income and corporation tax reductions, reductions from previously
projected levels in aid to localities and State operations and other
budgetary actions that further limit the growth of General Fund
disbursements as compared to the initial financial plan for the State's
1993-94 fiscal year. The Revised State Financial Plan is based on
economic projections that the State will perform more poorly than the
nation as a whole. The State's economy, as measured by employment, was
expected to commence growth late in the 1993 calendar year. Many
uncertainties exist in forecasts of both the national and State economies,
including consumer attitudes toward spending. There can be no assurance
that the State economy will not experience worse-than-predicted results in
the 1993-94 fiscal year, with corresponding material and adverse effects
on the State's projections of receipts and disbursements.
In certain prior fiscal years, the State has failed to enact a
budget prior to the beginning of the State's fiscal year. A delay in the
adoption of the State's budget beyond the statutory April 1 deadline and
the resultant delay in the State's Spring borrowing has in certain prior
years delayed the projected receipt by the City of State aid, and there
can be no assurance that State budgets in future fiscal years will be
adopted by the April 1 statutory deadline.
The State has noted that its forecasts of tax receipts have been
subject to variance in recent fiscal years. As a result of these
uncertainties and other factors, actual results could differ materially
and adversely from the State's current projections and the State's
projections could be materially and adversely changed from time to time.
On January 14, 1992, Standard & Poor's downgraded the State's
general obligation bonds from A to A-. Also downgraded was certain of the
State's variously rated moral obligation, lease purchase, guaranteed and
contractual obligation debt, including debt issued by certain State
agencies. On June 6, 1990, Moody's changed its rating of the State's
outstanding general obligation bonds from AA- to A. The State's tax and
revenue anticipation notes issued in February 1991 were rated MIG-2 by
Moody's and SP-1 by Standard & Poor's. On January 6, 1992, Moody's
changed its rating of certain appropriations-backed debt of the State from
A to Baal. Moody's also placed the State's general obligation, State
guaranteed and New York State Local Government Assistance Corporation
bonds under review for possible downgrading in coming months. Any action
taken by Standard & Poor's or Moody's to lower the credit rating on
outstanding indebtedness and obligations of the State may have an adverse
impact on the marketability of the State's notes and bonds.
As of March 31, 1993, the State had approximately $5.132 billion in
general obligation bonds excluding refunding bonds and $293 million in
bond anticipation notes outstanding. On May 24, 1993 the State issued
$850 million in tax and revenue anticipation notes all of which will
mature on December 31, 1993. Principal and interest due on general
obligation bonds and interest due on bond anticipation notes and on tax
and revenue anticipation notes were $890 million and $818.8 million for
the 1991-92 and 1992-93 fiscal years, respectively, and are estimated to
be $789 million for the State's 1993-94 fiscal year, not including
interest on refunding bonds, issued in July 1992, to the extent that such
interest is to be paid from escrowed funds.
The fiscal stability of the State is related to the fiscal stability
of its authorities, which generally have responsibility for financing,
constructing and operating revenue-producing public benefit facilities.
The authorities are not subject to the constitutional restrictions on the
incurrence of debt which apply to the State itself and may issue bonds and
notes within the amounts of, and as otherwise restricted by, their
legislative authorization. As of September 30, 1992 there were 18
authorities that had outstanding debt of $100 million or more. The
aggregate outstanding debt, including refunding bonds, of these 18
authorities was $62.2 billion as of September 30, 1992, of which
approximately $8.2 billion was moral obligation debt and approximately
$17.1 billion was financed under lease-purchase or contractual-obligation
financing arrangements.
The authorities are generally supported by revenues generated by the
projects financed or operated, such as fares, user fees on bridges,
highway tolls and rentals for dormitory rooms and housing. In recent
years, however, the State has provided financial assistance through
appropriations, in some cases of a recurring nature, to certain of the 18
authorities for operating and other expenses and, in fulfillment of its
commitments on moral obligation indebtedness or otherwise for debt
service. This assistance is expected to continue to be required in future
years.
The Metropolitan Transit Authority ("MTA"), a State agency, oversees
the operation of the City's subway and bus system (the "Transit Authority"
or "TA") and commuter rail lines serving the New York metropolitan area.
Fare revenues from such operations have been insufficient to meet
expenditures, and the MTA depends heavily upon a system of State, local,
Triborough Bridge and Tunnel Authority ("TBTA") and, to the extent
available, Federal support. Over the past several years, the State has
enacted several taxes, including a surcharge on the profits of banks,
insurance corporations and general business corporations doing business in
the 12-county region served by the MTA (the "Metropolitan Transportation
Region") and a special one-quarter of 1% regional sales and use tax, that
provide additional revenues for mass transit purposes including assistance
to the MTA. The surcharge, which expires in November 1995, yielded $507
million in calendar year 1992, of which the MTA was entitled to receive
approximately 90 percent, or approximately $456 million.
For 1993, TA has projected a budget gap of about $266 million. The
MTA Board approved an increase in TBTA tools which took effect January 31,
1993. Since the TBTA operating surplus helps subsidize TA operations, the
January toll increase on TBTA facilities, and other developments, reduced
the projected gap to approximately $241 million. Legislation passed in
April 1993 relating to the MTA's 1992-1996 Capital Program reflected a
plan for closing this gap without raising fares. A major element of the
plan provides that the TA receive a significant share of the petroleum
business tax which will be paid directly to MTA for its agencies. The
plan also relies on certain City actions that have not yet been taken.
The plan also relies on MTA and TA resources projected to be available to
help close the gap. If any of the assumptions used in making these
projections prove incorrect, the TA's gap could grow, and the TA would be
required to seek additional State assistance, raise fares or take other
actions.
Two serious accidents in December 1990 and August 1992, which caused
fatalities and many injuries, have given rise to substantial claims for
damages against both the TA and the City.
The State's experience has been that if an Authority suffers serious
financial difficulties, both the ability of the State and the Authorities
to obtain financing in the public credit markets and the market price of
the State's outstanding bonds and notes may be adversely affected. The
Housing Finance Agency ("HFA") and the Urban Development Corporation
("UDC") have in the past required substantial amounts of assistance from
the State to meet debt service costs or to pay operating expenses.
Further assistance, possibly in increasing amounts, may be required for
these, or other, Authorities in the future. In addition, certain
statutory arrangements provide for State local assistance payments
otherwise payable to localities to be made under certain circumstances to
certain Authorities. The State has no obligation to provide additional
assistance to localities whose local assistance payments have been paid to
Authorities under these arrangements. However, in the event that such
local assistance payments are so diverted, the affected localities could
seek additional State funds.
Litigation. A number of court actions have been brought involving
State finances. The court actions in which the State is a defendant
generally involve state programs and miscellaneous tort, real property,
employment discrimination and contract claims and the monetary damages
sought are substantial. The outcome of these proceedings could affect the
ability of the State to maintain a balanced State Financial Plan in the
1994-97 fiscal year or thereafter.
In particular, for the State's 1993-1994 fiscal year, the State may
be required to make payments as a result of the United States Supreme
Court decision in the case of State of Delaware v. State of New York,
which involved a challenge to the State's possession of certain funds
taken pursuant to the State's Abandoned Property Law. Although it is not
possible to predict the amounts of the payments that may be required to be
made in the State's 1993-94 fiscal year, the amount may be significant.
The Division of the Budget expects, however, that the State will have the
resources to meet reasonably anticipated payment requirements for the
1993-94 fiscal year resulting from the litigation.
In addition, on November 23, 1993, the New York Court of Appeals,
the State's highest court, affirmed the decisions of the State's Supreme
Court in several actions challenging the constitutionality of legislation
enacted in 1990 which changed the actuarial funding methods for
determining contributions by the State and local governments to the State
and local retirement systems. As a result of this decision, the State
Comptroller has developed a plan to return to the previous actuarial
funding method and to restore previous funding levels of the retirement
system. The Comptroller expects to achieve this objective in a manner
that, consistent with its fiduciary duties, will neither require the State
to make additional contributions in its 1993-1994 fiscal year nor
materially and adversely affect the financial condition of the State
thereafter.
Among the more significant of these claims still pending against the
State at various procedural stages, are those that challenge: (1) the
validity of agreements and treaties by which various Indian tribes
transferred title to the State of certain land in central New York; (2)
certain aspects of the State's Medicaid rates and regulations, including
reimbursements to providers of mandatory and optional Medicaid services;
(3) contamination in the Love Canal area of Niagara Falls; (4) an action
against State and New York City officials alleging that the present level
of shelter allowance for public assistance recipients is inadequate under
statutory standards to maintain proper housing; (5) challenges to the
practice of reimbursing certain Office of Mental Health patient care
expenses from the client's Social Security benefits; (6) a challenge to
the methods by which the State reimburses localities for the
administrative costs of food stamp programs; (7) alleged responsibility of
State officials to assist in remedying racial segregation in the City of
Yonkers; (8) an action in which the State is a third party defendant, for
injunctive or other appropriate relief, concerning liability for the
maintenance of stone groins constructed along certain areas of Long
Island's shoreline; (9) an action challenging legislation enacted in 1990
which had the effect of deferring certain employer contributions to the
State Teachers' Retirement System and reducing State aid to school
districts by a like amount; (10) a challenge to the constitutionality of
financing programs of the Thruway Authority authorized by Chapters 166 and
410 of the Laws of 19; (11) a challenge to the constitutionality of
financing programs of the Metropolitan Transportation Authority and the
Thruway Authority authorized by Chapter 56 of the Law of 1993; (12)
challenges to the delay by the State Department of Social Services in
making two one-week Medicaid payments to the service providers; (13)
challenges to provisions of Section 2807-C of the Public Health Law, which
impose a 13% surcharge on impatient hospital bills paid by commercial
insurers and employee welfare benefit plans and portions of Chapter 55 of
The Laws of 1992 which require hospitals to impose and remit to the state
an 11% surcharge on hospital bills paid by commercial insurers; (14)
challenges to the promulgation of the State's proposed procedure to
determine the eligibility for and nature of home care services for
Medicaid recipients; (15) a challenge to State implementation of a program
which reduces Medicaid benefits to certain home-relief recipients; and
(16) challenges to the rationality and retroactive application of State
regulations recalibrating nursing home Medicaid rates.
State Economic Trends. Over the long term, the State and the City
also face serious potential economic problems. The City accounts for
approximately 41% of the State's population and personal income, and the
City's financial health affects the State in numerous ways. The State
historically has been one of the wealthiest states in the nation. For
decades, however, the State has grown more slowly than the nation as a
whole, gradually eroding its relative economic affluence. Statewide,
urban centers have experienced significant changes involving migration of
the more affluent to the suburbs and an influx of generally less affluent
residents. Regionally, the older Northeast cities have suffered because
of the relative success that the South and the West have had in attracting
people and business. The City has also had to face greater competition as
other major cities have developed financial and business capabilities
which make them less dependent on the specialized services traditionally
available almost exclusively in the City. In recent years the State's
economic position has improved in a manner consistent with that for the
Northeast as a whole.
The State has for many years had a very high State and local tax
burden relative to other states. The State and its localities have used
these taxes to develop and maintain their transportation networks, public
schools and colleges, public health systems, other social services and
recreational facilities. Despite these benefits, the burden of State and
local taxation, in combination with the many other causes of regional
economic dislocation, has contributed to the decisions of some businesses
and individuals to relocate outside, or not locate within, the State.
Notwithstanding the numerous initiatives that the State and its
localities may take to encourage economic growth and achieve balanced
budgets, reductions in Federal spending could materially and adversely
affect the financial condition and budget projections of the State and its
localities.
PUBLIC OFFERING
Offering Price
The secondary market Public Offering Price per Unit is computed by
adding to the aggregate bid price of the Bonds in the Trust divided by the
number of Units outstanding, an amount equal to 5.820% for the New York
Discount Trust and 4.712% for the New York Municipal Trust of such
aggregate bid prices of the Bonds. This amount is equal to a sales charge
of 5-1/2% and 4-1/2%, respectively, of the secondary market Public
Offering Price, for the New York Discount Trust and the New York Municipal
Trust, respectively. A proportionate share of accrued interest on the
Bonds to the expected date of settlement for the Units is added to the
Public Offering Price. Accrued interest is the accumulated and unpaid
interest on a Bond from the last day on which interest was paid and is
accounted for daily by a Trust at the initial daily rate set forth under
"Summary of Essential Information" in Part A. This daily rate is net of
estimated fees and expenses. The secondary market Public Offering Price
can vary on a daily basis from the amount stated on the cover of Part A of
this Prospectus in accordance with fluctuations in the prices of the
Bonds. The price to be paid by each investor will be computed on the
basis of an evaluation made as of the date the Units are purchased. The
aggregate bid price evaluation of the Bonds is determined in the manner
set forth under "Trustee Redemption".
The Evaluator may obtain current prices for the Bonds from
investment dealers or brokers (including the Sponsor) that customarily
deal in tax-exempt obligations or from any other reporting service or
source of information which the Evaluator deems appropriate.
Accrued Interest
An amount of accrued interest which represents accumulated unpaid or
uncollected interest on a Bond from the last day on which interest was
paid thereon will be added to the Public Offering Price. This daily rate
is net of estimated fees and expenses. Since a Trust normally receives
the interest on Bonds twice a year and the interest on the Bonds in such
Trust is accrued on a daily basis, the Trusts will always have an amount
of interest earned but uncollected by, or unpaid to, the Trustee. A Cer-
tificateholder will not recover his proportionate share of accrued
interest until the Units are sold or redeemed, or the Trusts are
terminated. At that time, the Certificateholder will receive his
proportionate share of the accrued interest computed to the settlement
date in the case of sale or termination and to the date of tender in the
case of redemption.
Employee Discounts
Employees (and their immediate families) of Bear, Stearns & Co. Inc.
and of any underwriter of either Trust, pursuant to employee benefit
arrangements, may purchase Units of a Trust at a price equal to the bid
side evaluation of the underlying securities in such Trust divided by the
number of Units outstanding plus a reduced charge of $10.00 per Unit.
Such arrangements result in less selling effort and selling expenses than
sales to employee groups of other companies. Resales or transfers of
Units purchased under the employee benefit arrangements may only be made
through the Sponsor's secondary market, so long as it is being maintained.
Distribution Of Units
Certain banks and thrifts will make Units of the Trust available to
their customers on an agency basis. A portion of the sales charge paid by
their customers is retained by or remitted to the banks. Under the Glass-
Steagall Act, banks are prohibited from underwriting Units; however, the
Glass-Steagall Act does permit certain agency transactions and the banking
regulators have indicated that these particular agency transactions are
permitted under such Act. In addition, state securities laws on this
issue may differ from the interpretations of federal law expressed herein
and banks and financial institutions may be required to register as
dealers pursuant to state law.
The Sponsor intends to qualify the Units for sale in New York, New
Jersey, Connecticut, Florida and New Hampshire through dealers who are
members of the National Association of Securities Dealers, Inc. Units may
be sold to dealers at prices which represent a concession of up to (a) 4%
of the Public Offering Price for the New York Municipal Trust Series or
(b) $25.00 per unit for the New York Municipal Trust, Discount and Zero
Coupon Fund, subject to the Sponsor's right to change the dealers'
concession from time to time. In addition, for transactions of 1,000,000
Units or more, the Sponsor intends to negotiate the applicable sales
charge and such charge will be disclosed to any such purchaser. Such
Units may then be distributed to the public by the dealers at the Public
Offering Price then in effect. The Sponsor reserves the right to reject,
in whole or in part, any order for the purchase of Units. The Sponsor
reserves the right to change the discount from time to time.
Sponsor's Profits
The Sponsor will receive a gross commission on all Units sold in the
secondary market equal to the applicable sales charge on each transaction.
(See "Offering Price.") In addition, in maintaining a market for the
Units (see "Sponsor Repurchase") the Sponsor will realize profits or
sustain losses in the amount of any difference between the price at which
it buys Units and the price at which it resells such Units.
Participants in the "Total Reinvestment Plan" can designate a broker
as the recipient of a dealer concession. See "Total Reinvestment Plan."
Comparison Of Public Offering Price, Sponsor's
Repurchase Price And Redemption Price
The secondary market Public Offering Price of Units of the Trust
will be determined on the basis of the current bid prices of the Bonds in
such Trust, plus the applicable sales charge. The value at which Units
may be resold in the secondary market or redeemed will be determined on
the basis of the current bid prices of such Bonds without any sales
charge. On the Evaluation Date, the Public Offering Price per Unit (based
on the bid prices of the Bonds in the Trust plus the sales charge)
exceeded the Repurchase and Redemption Price per Unit (based upon the bid
prices of the Bonds in the Trust without the sales charge) by the amount
shown under "Summary of Essential Information" in Part A. For this
reason, among others (including fluctuations in the market prices of Bonds
and the fact that the Public Offering Price includes the 5-1/2% sales
charge for the New York Discount Trust or the 4-1/2% sales charge for the
New York Municipal Trust), the amount realized by a Certificateholder upon
any redemption of Units may be less than the price paid for such Units.
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN
The rate of return on an investment in Units of each Trust is
measured in terms of "Estimated Current Return" and "Estimated Long Term
Return".
Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in a Trust's portfolio in accordance with accepted
bond practices, which practices take into account not only the interest
payable on the Bond but also the amortization of premiums or accretion of
discounts, if any; (2) calculating the average of the yields for the Bonds
in each Trust's portfolio by weighing each Bond's yield by the market
value of the Bond and by the amount of time remaining to the date to which
the Bond is priced (thus creating an average yield for the portfolio of
each Trust); and (3) reducing the average yield for the portfolio of each
Trust in order to reflect estimated fees and expenses of that Trust and
the maximum sales charge paid by Unitholders. The resulting Estimated
Long Term Return represents a measure of the return to Unitholders earned
over the estimated life of each Trust. The Estimated Long Term Return as
of the day prior to the Evaluation Date is stated for each Trust under
"Summary of Essential Information" in Part A.
Estimated Current Return is computed by dividing the Estimated Net
Annual Interest Income per Unit by the Public Offering Price per Unit. In
contrast to the Estimated Long Term Return, the Estimated Current Return
does not take into account the amortization of premium or accretion of
discount, if any, on the Bonds in the portfolios of each Trust. Moreover,
because interest rates on Bonds purchased at a premium are generally
higher than current interest rates on newly issued bonds of a similar type
with comparable rating, the Estimated Current Return per Unit may be
affected adversely if such Bonds are redeemed prior to their maturity. On
the day prior to the Evaluation Date, the Estimated Net Annual Interest
Income per Unit divided by the Public Offering Price resulted in the
Estimated Current Return stated for each Trust under "Summary of Essential
Information" in Part A.
The Estimated Net Annual Interest Income per Unit of each Trust will
vary with changes in the fees and expenses of the Trustee and the
Evaluator applicable to each Trust and with the redemption, maturity, sale
or other disposition of the Bonds in each Trust. The Public Offering
Price will vary with changes in the bid prices of the Bonds. Therefore,
there is no assurance that the present Estimated Current Return or
Estimated Long Term Return will be realized in the future.
A schedule of cash flow projections is available from the Sponsor
upon request.
RIGHTS OF CERTIFICATEHOLDERS
Certificates
Ownership of Units of the Trust is evidenced by registered
Certificates executed by the Trustee and the Sponsor. Certificates may be
issued in denominations of one or more Units and will bear appropriate
notations on their faces indicating which plan of distribution has been
selected by the Certificateholder. Certificates are transferable by
presentation and surrender to the Trustee properly endorsed and/or
accompanied by a written instrument or instruments of transfer. Although
no such charge is presently made or contemplated, the Trustee may require
a Certificateholder to pay $2.00 for each Certificate reissued or
transferred and any governmental charge that may be imposed in connection
with each such transfer or interchange. Mutilated, destroyed, stolen or
lost Certificates will be replaced upon delivery of satisfactory indemnity
and payment of expenses incurred.
Interest And Principal Distributions
Interest received by the Trust is credited by the Trustee to an
Interest Account of such Trust and a deduction is made to reimburse the
Trustee without interest for any amounts previously advanced. Proceeds
representing principal received from the maturity, redemption, sale or
other disposition of the Bonds are credited to a Principal Account of such
Trust.
Distributions to each Certificateholder from the Interest Account
are computed as of the close of business of each Record Date for the
following Payment Date and consist of an amount substantially equal to
one-twelfth, one-half or all of each Certificateholder's pro rata share of
the Estimated Net Annual Interest Income in the Interest Account,
depending upon the applicable plan of distribution. Distributions from
the Principal Account will be computed as of each semi-annual Record Date,
and will be made to the Certificateholders on or shortly after the next
semi-annual Payment Date. Proceeds representing principal received from
the disposition of any of the Bonds between a Record Date and a Payment
Date which are not used for redemptions of Units will be held in the
Principal Account and not distributed until the second succeeding semi-
annual Payment Date. No distributions will be made to Certificateholders
electing to participate in the Total Reinvestment Plan, except as provided
thereunder. Persons who purchase Units between a Record Date and a
Payment Date will receive their first distribution on the second Payment
Date after such purchase.
Because interest payments are not received by the Trust at a
constant rate throughout the year, interest distributions may be more or
less than the amount credited to the Interest Account as of a given Record
Date. For the purpose of minimizing fluctuations in the distributions
from the Interest Account, the Trustee will advance sufficient funds as
may be necessary to provide interest distributions of approximately equal
amounts. The Trustee shall be reimbursed, without interest, for these
advances to the Interest Account. Funds which are available for future
distributions, investment in the Total Reinvestment Plan, payments of
expenses and redemptions are in accounts which are non-interest bearing to
Certificateholders and are available for use by the Trustee pursuant to
normal banking procedures.
As of the first day of each month, the Trustee will deduct from the
Interest Account of the Trust and, to the extent funds are not sufficient
therein, from the Principal Account of such Trust, amounts necessary to
pay the expenses of such Trust (as determined on the basis set forth under
"Trust Expenses and Charges"). The Trustee also may withdraw from said
accounts such amounts, if any, as it deems necessary to establish a
reserve for any applicable taxes or other governmental charges that may be
payable out of such Trust. Amounts so withdrawn shall not be considered a
part of such Trust's assets until such time as the Trustee shall return
all or any part of such amounts to the appropriate accounts. In addition,
the Trustee may withdraw from the Interest and Principal Accounts such
amounts as may be necessary to cover redemptions of Units of such Trust by
the Trustee.
The estimated monthly, semi-annual or annual interest distribution
per Unit will be in the amount shown under "Summary of Essential
Information" in Part A and will change and may be reduced as Bonds mature
or are redeemed, exchanged or sold, or as expenses of the Trust fluctuate.
No distribution need be made from the Principal Account until the balance
therein is an amount sufficient to distribute at least $1.00 per Unit.
Distribution Elections
Interest is distributed monthly, semi-annually or annually,
depending upon the distribution plan applicable to the Unit purchased.
Record Dates are the first day of each month for monthly distributions,
the first day of each June and December for semi-annual distributions and
the first day of each December for annual distributions. Payment Dates
will be the fifteenth day of each month following the respective Record
Dates. Certificateholders purchasing Units in the secondary market will
initially receive distributions in accordance with the election of the
prior owner. Every October each Certificateholder may change his
distribution election by notifying the Trustee in writing of such change
between October 1 and November 1 of each year. (Certificateholders
deciding to change their election should contact the Trustee by calling
the number listed on the back cover hereof for information regarding the
procedures that must be followed in connection with this written
notification of the change of election.) Failure to notify the Trustee on
or before November 1 of each year will result in a continuation of the
plan for the following 12 months.
Records
The Trustee shall furnish Certificateholders in connection with each
distribution a statement of the amount of interest, if any, and the amount
of other receipts, if any, which are being distributed, expressed in each
case as a dollar amount per Unit. Within a reasonable time after the end
of each calendar year (normally prior to January 31 of the succeeding
year), the Trustee will furnish to each person who at any time during the
calendar year was a Certificateholder of record of a Trust, a statement
showing (e) as to the Interest Account of such Trust: interest received
(including amounts representing interest received upon any disposition of
Bonds and earned original issue discount, if any), amounts paid for
redemptions of Units, if any, deductions for applicable taxes and fees and
expenses of such Trust, and the balance remaining after such distributions
and deductions, expressed both as a total dollar amount and as a dollar
amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (f) as to the Principal Account
of such Trust: the dates of disposition of any Bonds and the net proceeds
received therefrom (including any unearned original issue discount but
excluding any portion representing accrued interest), deductions for
payments of applicable taxes and fees and expenses of such Trust, amounts
paid for redemptions of Units, if any, and the balance remaining after
such distributions and deductions, expressed both as a total dollar amount
and as a dollar amount representing the pro rata share of each Unit
outstanding on the last business day of such calendar year; (g) a list of
the Bonds held in such Trust and the number of Units outstanding on the
last business day of such calendar year; (h) the Redemption Price per Unit
of such Trust based upon the last computation thereof made during such
calendar year; and (i) amounts actually distributed to Certificateholders
during such calendar year from the Interest and Principal Accounts,
separately stated, expressed both as total dollar amounts and as dollar
amounts representing the pro rata share of each Unit outstanding on the
last business day of such calendar year.
The Trustee shall keep available for inspection by Certificate-
holders at all reasonable times during usual business hours, books of
record and account of its transactions as Trustee, including records of
the names and addresses of Certificateholders, Certificates issued or
held, a current list of Bonds in the portfolio and a copy of the Trust
Agreement.
TAX STATUS
All Bonds acquired by the Trust were accompanied by copies of
opinions of bond counsel to the issuing governmental authorities given at
the time of original delivery of the Bonds to the effect that the interest
thereon is exempt from regular federal income tax and from New York State
and New York City income taxes. Such interest may, however, be subject to
federal corporate alternative minimum tax and to state or local taxes in
other jurisdictions. None of the Bonds in the Trust is subject to the
federal individual alternative minimum tax under the Tax Reform Act of
1986 (the "Act"). All Bonds were issued by or on behalf of the State of
New York, its political subdivisions or its public authorities or by the
Commonwealth of Puerto Rico or its public authorities. Neither the
Sponsor nor the Trustee nor their respective counsel have made any review
of the proceedings relating to the issuance of the Bonds or the bases for
such opinions and express no opinion as to these matters, and neither the
Trustee nor the Sponsor nor their respective counsel have made an
independent examination or verification that the federal income tax status
of the Bonds has not been altered since the time of the original delivery
of those opinions.
The Revenue Reconciliation Act of 1993 ("P.L. 103-66") was recently
enacted. P.L. 103-66 increases maximum marginal income tax rates for
individuals and corporations (generally effective for taxable years
beginning after December 31, 1992), extends the authority to issue certain
categories of tax-exempt bonds (qualified small issue bonds and qualified
mortgage bonds), limits the availability of capital gain treatment for
tax-exempt bonds purchased at a market discount, increases the amount of
Social Security benefits subject to tax (effective for taxable years
beginning after December 31, 1993) and makes a variety of other changes.
Prospective investors are urged to consult their own tax advisors as to
the effect of P.L. 103-66 on an investment in Units.
In rendering the opinion set forth below, counsel has examined the
Agreement, the final form of Prospectus dated the date hereof (the
"Prospectus") and the documents referred to therein, among others, and has
relied on the validity of said documents and the accuracy and completeness
of the facts set forth therein.
In the opinion of Battle Fowler, counsel for the Sponsor, under
existing law:
The Trust is not an association taxable as a corporation for federal
income tax purposes under the Internal Revenue Code of 1986 (the "Code"),
and income received by the Trust that consists of interest excludable from
federal gross income under the Code will be excludable from the federal
gross income of the Certificateholders of the Trust.
Each Certificateholder will be considered the owner of a pro rata portion
of the Trust under Section 676(a) of the Code. Thus, each Certificate-
holder will be considered to have received his pro rata share of bond
interest when it is received by the Trust, and the net income
distributable to Certificateholders that is exempt from federal income tax
when received by the Trust will constitute tax-exempt income when received
by the Certificateholders.
Gain (other than any earned original issue discount) realized on a sale
or redemption of the Bonds or on sale of a Unit is, however, includable in
gross income for federal income tax purposes, generally as capital gain,
although gain on the disposition of a Bond or a Unit purchased at a market
discount generally will be treated as ordinary income, rather than capital
gain, to the extent of accrued market discount. (It should be noted in
this connection that such gain does not include any amounts received in
respect of accrued interest.) Such gain may be long- or short-term gain
depending on the facts and circumstances. Capital losses are deductible
to the extent of capital gains; in addition, up to $3,000 of capital
losses of non-corporate Certificateholders may be deducted against
ordinary income. Capital assets acquired on or after January 1, 1988 must
be held for more than one year to qualify for long-term capital gain
treatment. Individuals who realize long-term capital gains will be
subject to a maximum tax rate of 28% on such gain.
Each Certificateholder will realize taxable gain or loss when the Trust
disposes of a Bond (whether by sale, exchange, redemption or payment at
maturity), as if the Certificateholder had directly disposed of his pro
rata share of such Bond. The gain or loss is measured by the difference
between (i) the tax cost of such pro rata share and (ii) the amount
received therefor. For this purpose, a Certificateholder's tax cost for
each Bond is determined by allocating the total tax cost of each Unit
among all of the Bonds held in the Trust (in accordance with the portion
of such Trust comprised by each Bond). In order to determine the amount
of taxable gain or loss, the Certificateholder's amount received is
similarly allocated at that time. The Certificateholder may exclude from
the amount received any amounts that represent accrued interest or the
earned portion of any original issue discount but may not exclude amounts
attributable to market discount. Thus, when a Bond is disposed of by the
Trust at a gain, taxable gain will equal the difference between (i) the
amount received and (ii) the amount paid plus any original issue discount
(limited, in the case of Bonds issued after June 8, 1980, to the portion
earned from the date of acquisition to the date of disposition). Gain on
the disposition of a Bond purchased at a market discount generally will be
treated as ordinary income, rather than capital gain, to the extent of
accrued market discount. No deduction is allowed for the amortization of
bond premium on tax-exempt bonds such as the Bonds in computing regular
federal income tax.
Discount generally accrues based on the principle of compounding of
accrued interest, not on a straight-line or ratable method, with the
result that the amount of earned original issue discount is less in the
earlier years and more in the later years of a bond term. The tax basis
of a discount bond is increased by the amount of accrued, tax-exempt
original issue discount thus determined. This method of calculation will
produce higher capital gains (or lower losses) to a Certificateholder, as
compared to the results produced by the straight-line method of accounting
for original issue discount, upon an early disposition of a Bond by the
Trust or of a Unit by a Certificateholder.
A Certificateholder may also realize taxable income or loss when a Unit
of the Trust is sold or redeemed. The amount received is allocated among
all the Bonds in such Trust in the same manner as when the Trust disposes
of Bonds and the Certificateholder may exclude accrued interest and the
earned portion of any original issue discount (but not amounts
attributable to market discount). The return of a Certificateholder's tax
cost is otherwise a tax-free return of capital.
A portion of social security benefits is includable in gross income for
taxpayers whose "modified adjusted gross income" combined with a portion
of their benefits exceeds a base amount. The base amount is $25,000 for
an individual, $32,000 for a married couple filing a joint return and zero
for married persons filing separate returns. Interest on tax-exempt bonds
is to be added to adjusted gross income for purposes of computing the
amount of Social Security benefits that are includable in gross income and
determining whether an individual's income exceeds the base amount above
which a portion of the benefits would be subject to tax. For taxable
years beginning after December 31, 1993, the amount of Social Security
benefits subject to tax will be increased.
Corporate Certificateholders are required to include in federal corporate
alternative minimum taxable income 75 percent of the amount by which the
adjusted current earnings (which will include tax-exempt interest) of the
corporation exceeds alternative minimum taxable income (determined without
regard to this item). Further, interest on the bonds is includable in a
0.12% additional corporate minimum tax imposed by the Superfund Amendments
and Reauthorization Act of 1986 for taxable years beginning before January
1, 1996. In addition, in certain cases, Subchapter S corporations with
accumulated earnings and profits from Subchapter C years will be subject
to a minimum tax on excess "passive investment income" which includes tax-
exempt interest.
Under federal law, interest on Trust-held Bonds issued by authority of
the Government of Puerto Rico is exempt from regular federal income tax,
and state and local income tax in the United States and Puerto Rico.
The Trust is not subject to the New York State Franchise Tax on Business
Corporations or the New York City General Corporation Tax. Under the
personal income tax laws of the State and City of New York, the income of
the Trust will be treated as the income of the Certificateholders.
Interest on the Bonds that is exempt from tax under the laws of the State
and City of New York when received by the Trust will retain its status as
tax-exempt interest to its Certificateholders. In addition, non-residents
of New York City will not be subject to the New York City personal income
tax on gains derived with respect to their Units. Non-residents of New
York State will not be subject to New York State personal income tax on
such gains unless the Units are employed in a business, trade or
occupation carried on in New York State. A New York State or New York
City resident should determine his basis and holding period for his Units
in the same manner for New York State and New York City tax purposes as
for federal tax purposes. For corporations doing business in New York
State and New York City, interest earned on state and municipal
obligations that are exempt from federal income tax, including obligations
of New York State and New York City, its political subdivisions and
instrumentalities, must be included in calculating New York State and New
York City entire net income for purposes of calculating New York State and
New York City franchise (income) tax. The laws of the several states and
local taxing authorities vary with respect to the taxation of such
obligations and each Certificateholder is advised to consult his own tax
advisor as to the tax consequences of his Certificates under state and
local tax laws.
The exemption of interest on municipal obligations for federal
income tax purposes does not necessarily result in exemption under the
income tax laws of any state or local government. The laws of such states
and local governments vary with respect to the taxation of such
obligations.
In the case of Bonds that are industrial revenue bonds ("IRBs") or
certain types of private activity bonds, the opinions of bond counsel to
the respective issuing authorities indicate that interest on such Bonds is
exempt from regular federal income tax. However, interest on such Bonds
will not be exempt from regular federal income tax for any period during
which such Bonds are held by a "substantial user" of the facilities
financed by the proceeds of such Bonds or by a "related person" thereof
within the meaning of the Code. Therefore, interest on any such Bonds
allocable to a Certificateholder who is such a "substantial user" or
"related person" thereof will not be tax-exempt. Furthermore, in the case
of IRBs that qualify for the "small issue" exemption, the "small issue"
exemption will not be available or will be lost if, at any time during the
three-year period beginning on the later of the date the facilities are
placed in service or the date of issue, all outstanding tax-exempt IRBs,
together with a proportionate share of any present issue, of an owner or
principal user (or related person) of the facilities exceeds $40,000,000.
In the case of IRBs issued under the $10,000,000 "small issue" exemption,
interest on such IRBs will become taxable if the face amount of such IRBs
plus certain capital expenditures exceeds $10,000,000.
In addition, a Bond can lose its tax-exempt status as a result of
other subsequent but unforeseeable events such as prohibited "arbitrage"
activities by the issuer of the Bond or the failure of the Bond to
continue to satisfy the conditions required for the exemption of interest
thereon from regular federal income tax. No investigation has been made
as to the current or future owners or users of the facilities financed by
the Bonds, the amount of such persons' outstanding tax-exempt IRBs, or the
facilities themselves, and no assurance can be given that future events
will not affect the tax-exempt status of the Bonds. Investors should
consult their tax advisors for advice with respect to the effect of these
provisions on their particular tax situation.
Interest on indebtedness incurred or continued to purchase or carry
the Units is not deductible for regular federal income tax or New York
State or New York City income tax purposes. However, such interest is
deductible for New York State and New York City income tax purposes by
corporations that are required to include interest on the Bonds in New
York State and New York City entire net income for purposes of calculating
New York State and New York City franchise (income) taxes. In addition,
under rules used by the Internal Revenue Service for determining when
borrowed funds are considered used for the purpose of purchasing or
carrying particular assets, the purchase of Units may be considered to
have been made with borrowed funds even though the borrowed funds are not
directly traceable to the purchase of the Units. Similar rules are
applicable for New York State and New York City tax purposes. Also, in
the case of certain financial institutions that acquire Units, in general
no deduction is allowed for interest expense allocable to the Units.
From time to time proposals have been introduced before Congress to
restrict or eliminate the federal income tax exemption for interest on
debt obligations similar to the Bonds in the Trust, and it can be expected
that similar proposals may be introduced in the future.
In a 1988 decision (South Carolina v. Baker), the U.S. Supreme
Court held that the federal government may constitutionally require states
to register bonds they issue and subject the interest on such bonds to
federal income tax if not registered, and that there is no constitutional
prohibition against the federal government's taxing the interest earned on
state or other municipal bonds. The Supreme Court decision affirms the
authority of the federal government to regulate and control bonds such as
the Bonds in the Trust and to tax interest on such bonds in the future.
The decision does not, however, affect the current exemption from taxation
of the interest earned on the Bonds in the Trust in accordance with Sec-
tion 103 of the Code.
The opinions of bond counsel or special tax counsel to the issuing
governmental authorities to the effect that interest on the Bonds is
exempt from regular federal income tax may be limited to law existing at
the time the Bonds were issued, and may not apply to the extent that
future changes in law, regulations or interpretations affect such Bonds.
Investors are advised to consult their own tax advisors for advice with
respect to the effect of any legislative changes.
LIQUIDITY
Sponsor Repurchase
The Sponsor, although not obligated to do so, intends to maintain a
secondary market for the Units. The Sponsor's secondary market repurchase
price will be based on the aggregate bid price of the Bonds in the Trust
portfolio and will be the same as the redemption price. The aggregate bid
price will be determined by the Evaluator on a daily basis set forth under
"Trustee Redemption." Certificateholders who wish to dispose of their
Units should inquire of the Sponsor prior to making a tender for
redemption. The Sponsor may discontinue repurchases of Units of the Trust
if the supply of Units exceeds demand, or for other business reasons. The
date of repurchase is deemed to be the date on which Certificates
representing Units are physically received in proper form by the Sponsor,
Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York 10167.
Units received after 4 P.M., New York time, will be deemed to have been
repurchased on the next business day. In the event a market is not
maintained for the Units, a Certificateholder may be able to dispose of
Units only by tendering them to the Trustee for redemption.
Prospectuses relating to certain other bond trusts indicate an
intention by the respective Sponsors, subject to change, to repurchase
units on the basis of a price higher than the bid prices of the Bonds in
the Trusts. Consequently, depending on the prices actually paid, the
secondary market repurchase price of other trusts may be computed on a
somewhat more favorable basis than the repurchase price offered by the
Sponsor for units of these Trusts, although in all bond trusts, the
purchase price of a unit depends primarily on the value of the bonds in
the trust portfolio.
Units purchased by the Sponsor in the secondary market may be
reoffered for sale by the Sponsor at a price based on the aggregate bid
price of the Bonds in a Trust plus a 5-1/2% sales charge (5.820% of the
net amount invested) for the New York Discount Trust and a 4-1/2% sales
charge (4.712% of the net amount invested) for the New York Municipal
Trust, plus net accrued interest. Any Units that are purchased by the
Sponsor in the secondary market also may be redeemed by the Sponsor if it
determines such redemption to be in its best interest.
The Sponsor may, under certain circumstances, as a service to Cer-
tificateholders, elect to purchase any Units tendered to the Trustee for
redemption (see "Trustee Redemption"). Factors which the Sponsor will
consider in making a determination will include the number of Units of all
Trusts which it has in inventory, its estimate of the salability and the
time required to sell such Units and general market conditions. For
example, if in order to meet redemptions of Units the Trustee must dispose
of Bonds, and if such disposition cannot be made by the redemption date
(seven calendar days after tender), the Sponsor may elect to purchase such
Units. Such purchase shall be made by payment to the Certificateholder
not later than the close of business on the redemption date of an amount
equal to the Redemption Price on the date of tender.
Trustee Redemption
Units also may be tendered to the Trustee for redemption at its
corporate trust office as set forth in Part A of this Prospectus, upon
proper delivery of Certificates representing such Units and payment of any
relevant tax. At the present time there are no specific taxes related to
the redemption of Units. No redemption fee will be charged by the Sponsor
or the Trustee. Units redeemed by the Trustee will be canceled.
Certificates representing Units to be redeemed must be delivered to
the Trustee and must be properly endorsed or accompanied by proper
instruments of transfer with signature guaranteed (or by providing
satisfactory indemnity, as in the case of lost, stolen or mutilated
Certificates). Thus, redemptions of Units cannot be effected until
Certificates representing such Units have been delivered by the person
seeking redemption. (See "Certificates".) Certificateholders must sign
exactly as their names appear on the faces of their Certificates. In
certain instances the Trustee may require additional documents such as,
but not limited to, trust instruments, certificates of death, appointments
as executor or administrator or certificates of corporate authority.
Within seven calendar days following a tender for redemption, or, if
such seventh day is not a business day, on the first business day prior
thereto, the Certificateholder will be entitled to receive in cash an
amount for each Unit tendered equal to the Redemption Price per Unit
computed as of the Evaluation Time on the date of tender. The "date of
tender" is deemed to be the date on which Units are received by the
Trustee, except that with respect to Units received after the close of
trading on the New York Stock Exchange, the date of tender is the next day
on which such Exchange is open for trading, and such Units will be deemed
to have been tendered to the Trustee on such day for redemption at the
Redemption Price computed on that day.
Accrued interest paid on redemption shall be withdrawn from the
Interest Account, or, if the balance therein is insufficient, from the
Principal Account. All other amounts paid on redemption shall be
withdrawn from the Principal Account. The Trustee is empowered to sell
bonds in order to make funds available for redemptions. Such sales, if
required, could result in a sale of Bonds by the Trustee at a loss. To
the extent Bonds in a Trust are sold, the size and diversity of such Trust
will be reduced.
The Redemption Price per Unit is the pro rata share of each Unit in
a Trust determined by the Trustee on the basis of (v) the cash on hand in
such Trust or moneys in the process of being collected, (vi) the value of
the Bonds in such Trust based on the bid prices of such Bonds and
(vii) interest accrued thereon, less (a) amounts representing taxes or
other governmental charges payable out of such Trust, (b) the accrued
expenses of such Trust and (c) cash allocated for distribution to Certifi-
cateholders of record of such Trust as of the business day prior to the
evaluation being made. The Evaluator may determine the value of the Bonds
in such Trust for purposes of redemption (1) on the basis of current bid
prices of the bonds obtained from dealers or brokers who customarily deal
in bonds comparable to those held by such Trust, (2) on the basis of bid
prices for bonds comparable to any Bonds for which bid prices are not
available, (3) by determining the value of the Bonds by appraisal, or
(4) by any combination of the above.
The Trustee is irrevocably authorized in its discretion, if the
Sponsor does not elect to purchase a Unit tendered for redemption or if
the Sponsor tenders a Unit for redemption, in lieu of redeeming such Unit,
to sell such Unit in the over-the-counter market for the account of the
tendering Certificateholder at prices which will return to the Certifi-
cateholder an amount in cash, net after deducting brokerage commissions,
transfer taxes and other charges, equal to or in excess of the Redemption
Price for such Unit. The Trustee will pay the net proceeds of any such
sale to the Certificateholder on the day he would otherwise be entitled to
receive payment of the Redemption Price.
The Trustee reserves the right to suspend the right of redemption
and to postpone the date of payment of the Redemption Price per Unit for
any period during which the New York Stock Exchange is closed, other than
customary weekend and holiday closings, or trading on that Exchange is
restricted or during which (as determined by the Securities and Exchange
Commission) an emergency exists as a result of which disposal or
evaluation of the Bonds is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
The Trustee and the Sponsor are not liable to any person or in any way for
any loss or damage which may result from any such suspension or
postponement.
A Certificateholder who wishes to dispose of his Units should
inquire of his bank or broker in order to determine if there is a current
secondary market price in excess of the Redemption Price.
TOTAL REINVESTMENT PLAN
Under the Total Reinvestment Plan (the "Plan"), semi-annual and
annual Certificateholders may elect to have all regular interest and
principal distributions, if any, with respect to their Units reinvested
either in units of various series of "New York Municipal Trust"* which
will have been created shortly before each semi-annual or annual Payment
Date (a "Primary Series") or, if units of a Primary Series are not
available, in units of a previously formed series of a Trust which have
been repurchased by the Sponsor in the secondary market or which
constitute a portion of the Units of a Trust not sold by the Sponsor prior
to such Payment Date (a "Secondary Series") (Primary Series and Secondary
Series are hereafter collectively referred to as "Available Series").
June 15 and December 15 of each year, in the case of semi-annual Certifi-
cateholders, and December 15 of each year, in the case of annual Certifi-
cateholders, are the "Plan Reinvestment Dates."
* Certificateholders of either Trust who participate in the Plan will
have reinvestments made in Units from a similar Trust if such Units
are available. If no such Units are available for reinvestment,
distributions to Certificateholders will be reinvested in Units of
regular series of Municipal Securities Trusts, the income earned on
which may not be exempt from state and local income taxes.
<PAGE>
Under the Plan (subject to compliance with applicable blue sky
laws), fractional units ("Plan Units") will be purchased from the Sponsor
at a price equal to the aggregate offering price per Unit of the bonds in
the Available Series portfolio during the initial offering of the
Available Series or at the aggregate bid price per Unit of the Available
Series if its initial offering has been completed, plus a sales charge
equal to 3.627% of the net amount invested in such bonds or 3-1/2% of the
Reinvestment Price per Plan Unit, plus accrued interest, divided by one
hundred (the "Reinvestment Price per Plan Unit"). All Plan Units will be
sold at this reduced sales charge of 3-1/2% in comparison to the regular
sales charge on primary and secondary market sales of Units in any series
of "New York Municipal Trust". Participants in the Plan will have the
opportunity to designate, in the Authorization Form for the Plan, the name
of a broker to whom the Sponsor will allocate a sales commission of 1-1/2%
per Plan Unit, payable out of the 3-1/2% sales charge. If no such
designation is made, the Sponsor will retain the sales commission.
Under the Plan, the entire amount of a participant's income and
principal distributions will be reinvested. For example, a Certificate-
holder who is entitled to receive $130.50 interest income from a Trust
would acquire 13.05 Plan Units assuming that the Reinvestment Price per
Plan Unit, plus accrued interest, approximated $10 (Ten Dollars).
A semi-annual or annual Certificateholder may join the Plan at the
time he invests in Units of a Trust or any time thereafter by delivering
to the Trustee an Authorization Form which is available from brokers or
the Sponsor. In order that distributions may be reinvested on a
particular Plan Reinvestment Date, the Authorization Form must be received
by the Trustee not later than the 15th day of the month preceding such
Date. Authorization Forms not received in time for a particular Plan
Reinvestment Date will be valid only for the second succeeding Plan
Reinvestment Date. Similarly, a participant may withdraw from the Plan at
any time by notifying the Trustee (see below). However, if written
confirmation of withdrawal is not given to the Trustee prior to a
particular distribution, the participant will be deemed to have elected to
participate in the Plan with respect to that particular distribution and
his withdrawal would become effective for the next succeeding
distribution.
Once delivered to the Trustee, an Authorization Form will constitute
a valid election to participate in the Plan with respect to Units
purchased in a Trust (and with respect to Plan Units purchased with the
distributions from the Units purchased in a Trust) for each subsequent
distribution as long as the Certificateholder continues to participate in
the Plan. However, if an Available Series should materially differ from a
Trust in the opinion of the Sponsor, the authorization will be voided and
participants will be provided with both a notice of the material change
and a new Authorization Form which would have to be returned to the
Trustee before the Certificateholder would again be able to participate in
the Plan. The Sponsor anticipates that a material difference which would
result in a voided authorization would include such facts as the inclusion
of bonds in the Available Series portfolio the interest income on which
was not exempt from all federal, New York State and New York City income
tax, or the inclusion of bonds which were not rated "A" or better by
either Standard & Poor's Corporation or Moody's Investors Service, Inc. on
the date such bonds were initially deposited in the Available Series
portfolio.
The Sponsor has the option at any time to use units of a Secondary
Series to fulfill the requirements of the Plan in the event units of a
Primary Series are not available either because a Primary Series is not
then in existence or because the registration statement relating thereto
is not declared effective in sufficient time to distribute final
prospectuses to Plan participants (see below). It should be noted that
there is no assurance that the quality and diversification of the Bonds in
any Available Series or the estimated current return thereon will be
similar to that of these Trusts.
It is the Sponsor's intention that Plan Units will be offered on or
about each semi-annual and annual Record Date for determining who is
eligible to receive distributions on the related Payment Date. Such
Record Dates are June 1 and December 1 of each year for semi-annual Cer-
tificateholders, and December 1 of each year for annual Certificate-
holders. On each Record Date, the Sponsor will send a current Prospectus
relating to the Available Series being offered for the next Plan
Reinvestment Date along with a letter which reminds each participant that
Plan Units are being purchased for him as part of the Plan unless he
notifies the Trustee in writing by that Plan Reinvestment Date that he no
longer wishes to participate in the Plan. In the event a Primary Series
has not been declared effective in sufficient time to distribute a final
Prospectus relating thereto and there is no Secondary Series as to which a
registration statement is currently effective, it is the Sponsor's
intention to suspend the Plan and distribute to each participant his
regular semi-annual or annual distribution. If the Plan is so suspended,
it will resume in effect with the next Plan Reinvestment Date assuming
units of an Available Series are then being offered.
To aid a participant who might desire to withdraw either from the
Plan or from a particular distribution, the Trustee has established a toll
free number (see below) for participants to use for notification of
withdrawal, which must be confirmed in writing prior to the Plan
Reinvestment Date. Should the Trustee be so notified, it will make the
appropriate cash disbursement. Unless the withdrawing participant
specifically indicates in his written confirmation that (a) he wishes to
withdraw from the Plan for that particular distribution only, or (b) he
wishes to withdraw from the Plan for less than all units of each series of
"New York Municipal Trust" which he might then own (and specifically
identifies which series are to continue in the Plan), he will be deemed to
have withdrawn completely from the Plan in all respects. Once a
participant withdraws completely, he will only be allowed to again
participate in the Plan by submitting a new Authorization Form. A sale or
redemption of a portion of a participant's Plan Units will not constitute
a withdrawal from the Plan with respect to the remaining Plan Units owned
by such participant.
Unless a Certificateholder notifies the Trustee in writing to the
contrary, each semi-annual and annual Certificateholder who has acquired
Plan Units will be deemed to have elected the semi-annual and annual plan
of distribution, respectively, and to participate in the Plan with respect
to distributions made in connection with such Plan Units. (Should the
Available Series from which Plan Units are purchased for the account of an
annual Certificateholder fail to have an annual distribution plan, such
Certificateholder will be deemed to have elected the semi-annual plan of
distribution, and to participate in the Plan with respect to distributions
made in connection with such Plan Units.) A participant who subsequently
desires to have distributions made with respect to Plan Units delivered to
him in cash may withdraw from the Plan with respect to such Plan Units and
remain in the Plan with respect to units acquired other than through the
Plan. Assuming a participant has his distributions made with respect to
Plan Units reinvested, all such distributions will be accumulated with
distributions generated from the Units of a Trust used to purchase such
additional Plan Units. However, distributions related to units in other
series of "New York Municipal Trust" or New York Discount Trust will not
be accumulated with the foregoing distributions for Plan purchases. Thus,
if a person owns units in more than one series of "New York Municipal
Trust" or New York Discount Trust (which are not the result of purchases
under the Plan), distributions with respect thereto will not be aggregated
for purchases under the Plan.
Although not obligated to do so, the Sponsor has maintained and
intends to continue to maintain a market for the Plan Units and
continuously to offer to purchase Plan Units at prices based upon the
aggregate offering price of the bonds in the Available Series portfolio,
during the initial offering of the Available Series, or at the aggregate
bid price of the Bonds in the Available Series if its initial offering has
been completed. The Sponsor may discontinue such purchases at any time.
The aggregate bid price of the underlying bonds may be expected to be less
than the aggregate offering prices. In the event that a market is not
maintained for Plan Units, a participant desiring to dispose of his Plan
Units may be able to do so only by tendering such Plan Units to the
Trustee for redemption at the Redemption Price of full units in the
Available Series corresponding to such Plan Units, which is based upon the
aggregate bid price of the underlying bonds as described in the "New York
Municipal Trust" Prospectus for the Available Series in question. If a
participant wishes to dispose of his Plan Units, he should inquire of the
Sponsor as to current market prices prior to making a tender for
redemption to the Trustee.
Any participant may tender his Plan Units for redemption to the
Available Series trustee. Participants may redeem Plan Units by making a
written request to the Trustee at the address set forth in Part A, on the
Redemption Form supplied by the Trustee. The redemption price per Plan
Unit will be determined as set forth in the "New York Municipal Trust"
Prospectus of the Available Series from which such Plan Unit was purchased
following receipt of the request and adjusted to reflect the fact that it
relates to a Plan Unit. There is no charge for the redemption of Plan
Units.
The Trust Agreement requires that the Trustee notify the Sponsor of
any tender of Plan Units for redemption. So long as the Sponsor is
maintaining a bid in the secondary market, the Sponsor will purchase any
Plan Units tendered to the Trustee for redemption by making payment
therefor to the Certificateholder in an amount not less than the
redemption price for such Plan Units on the date of tender not later than
the day on which such Plan Units would otherwise have been redeemed by the
Trustee.
Participants in the Plan will not receive individual certificates
for their Plan Units unless the amount of Plan Units accumulated
represents $1,000 principal amount of bonds underlying such Units and, in
such case, a written request for certificates is made to the Trustee. All
Plan Units will be accounted for by the Trustee on a book entry system.
Each time Plan Units are purchased under the Plan, a participant will
receive a confirmation stating his cost, number of Units purchased and
estimated current return. Questions regarding a participant's statement
should be directed to the Trustee at the telephone number set forth in the
"Summary of Essential Information" in Part A.
All expenses relating to the operation of the Plan are borne by the
Sponsor. Both the Sponsor and the Trustee reserve the right to suspend,
modify or terminate the Plan at any time for any reason, including the
right to suspend the Plan if the Sponsor is unable or unwilling to
establish a Primary Series or is unable to provide Secondary Series units.
All participants will receive notice of any such suspension, modification
or termination.
TRUST ADMINISTRATION
Portfolio Supervision
The Sponsor may direct the Trustee to dispose of Bonds upon
(i) default in payment of principal or interest on such Bonds,
(ii) institution of certain legal proceedings with respect to the issuers
of such Bonds, (iii) default under other documents adversely affecting
debt service on such Bonds, (iv) default in payment of principal or
interest on other obligations of the same issuer or guarantor, (v) with
respect to revenue Bonds, decline in revenues and income of any facility
or project below the estimated levels calculated by proper officials
charged with the construction or operation of such facility or project, or
(vi) decline in price or the occurrence of other market or credit factors
which in the opinion of the Sponsor would make the retention of such Bonds
in a Trust detrimental to the interests of the Certificateholders. If a
default in the payment of principal or interest on any of the Bonds occurs
and if the Sponsor fails to instruct the Trustee to sell or hold such
Bonds, the Trust Agreement provides that the Trustee may sell such Bonds.
The Sponsor is authorized by the Trust Agreement to direct the
Trustee to accept or reject certain plans for the refunding or refinancing
of any of the Bonds. Any bonds received in exchange or substitution will
be held by the Trustee subject to the terms and conditions of the
Agreement to the same extent as the Bonds originally deposited. Within
five days after such deposit, notice of such exchange and deposit shall be
given by the Trustee to each Certificateholder registered on the books of
the Trustee, including an identification of the Bonds eliminated and the
Bonds substituted therefor. Except as stated, the acquisition by the
Trusts of any securities other than the bonds initially deposited is
prohibited.
Trust Agreement, Amendment and Termination
The Trust Agreement may be amended by the Trustee, the Sponsor and
the Evaluator without the consent of any of the Certificateholders:
(1) to cure any ambiguity or to correct or supplement any provision which
may be defective or inconsistent; (2) to change any provision thereof as
may be required by the Securities and Exchange Commission or any successor
governmental agency; or (3) to make such other provisions in regard to
matters arising thereunder as shall not adversely affect the interests of
the Certificateholders.
The Trust Agreement may also be amended in any respect, or
performance of any of the provisions thereof may be waived, with the
consent of the holders of Certificates evidencing 66-2/3% of the Units
then outstanding for the purpose of modifying the rights of Certificate-
holders; provided that no such amendment or waiver shall reduce any Cer-
tificateholder's interest in a Trust without his consent or reduce the
percentage of Units required to consent to any such amendment or waiver
without the consent of the holders of all Certificates. The Trust
Agreement may not be amended, without the consent of the holders of all
Certificates in a Trust then outstanding, to increase the number of Units
issuable by such Trust or to permit the acquisition of any bonds in
addition to or in substitution for those initially deposited in such
Trust, except in accordance with the provisions of the Trust Agreement.
The Trustee shall promptly notify Certificateholders, in writing, of the
substance of any such amendment.
The Trust Agreement provides that the Trust shall terminate upon the
maturity, redemption or other disposition, as the case may be, of the last
of the Bonds held in such Trust but in no event is it to continue beyond
the end of the calendar year preceding the fiftieth anniversary of the
execution of the Trust Agreement. If the value of a Trust shall be less
than the minimum amount set forth under "Summary of Essential
Information", the Trustee may, in its discretion, and shall, when so
directed by the Sponsor, terminate such Trust. The Trust may also be
terminated at any time with the consent of the holders of Certificates
representing 100% of the Units of such Trust then outstanding. In the
event of termination, written notice thereof will be sent by the Trustee
to all Certificateholders. Within a reasonable period after termination,
the Trustee must sell any Bonds remaining in the terminated Trust, and,
after paying all expenses and charges incurred by such Trust, distribute
to each Certificateholder, upon surrender for cancellation of his
Certificate for Units his pro rata share of the Interest and Principal
Accounts of such Trust.
The Sponsor
The Sponsor, Bear, Stearns & Co. Inc., a Delaware corporation, is
engaged in the underwriting, investment banking and brokerage business and
is a member of the National Association of Securities Dealers, Inc. and
all principal securities and commodities exchanges, including the New York
Stock Exchange, the American Stock Exchange, the Midwest Stock Exchange
and the Pacific Stock Exchange. Bear Stearns maintains its principal
business offices at 245 Park Avenue, New York, New York 10167 and, since
its reorganization from a partnership to a corporation in October 1985,
has been a wholly-owned subsidiary of The Bear Stearns Companies Inc.
Bear Stearns, through its predecessor entities, has been engaged in the
investment banking and brokerage business since 1923. Bear Stearns is the
sponsor for numerous series of unit investment trusts, including: A
Corporate Trust, Series 1 (and subsequent series); New York Municipal
Trust, Series 1 (and Subsequent Series), New York Discount & Zero Coupon
Fund-1st Series (and Subsequent Series); Municipal Securities Trust,
Series 1 (and Subsequent Series); 1st Discount Series (and Subsequent
Series), Multi-State Series 1 (and Subsequent Series), High Income Trust,
Series 1 (and Subsequent Series), Series 1-4 (Multiplier Portfolio);
Insured Municipal Securities Trust, Series 1; (and Subsequent Series); 5th
Discount Series (and Subsequent Series) and Navigator Series (and
Subsequent Series); Mortgage Securities Trust, CMO Series 1 (and
Subsequent Series); and Equity Securities Trust, Series 1, Signature
Series, Gabelli Communications Income Trust (and Subsequent Series). The
information included herein is only for the purpose of informing investors
as to the financial responsibility of the Sponsor and its ability to carry
out its contractual obligations. The information contained in the
Prospectus concerning governmental entities and authorities, including the
various issuers of the Bonds in the Trusts was gathered from sources
deemed to be reliable by the Sponsor. The Sponsor has not independently
verified the information contained in such sources.
The Sponsor is liable for the performance of its obligations arising
from its responsibilities under the Trust Agreement, but will be under no
liability to Certificateholders for taking any action, or refraining from
taking any action, in good faith pursuant to the Trust Agreement, or for
errors in judgment except in cases of its own willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations and
duties.
The Sponsor may resign at any time by delivering to the Trustee an
instrument of resignation executed by the Sponsor.
If at any time the Sponsor shall resign or fail to perform any of
its duties under the Trust Agreement or becomes incapable of acting or
becomes bankrupt or its affairs are taken over by public authorities, then
the Trustee may either (a) appoint a successor Sponsor, (b) terminate the
Trust Agreement and liquidate the Trusts, or (c) continue to act as
Trustee without terminating the Trust Agreement. Any successor Sponsor
appointed by the Trustee shall be satisfactory to the Trustee and, at the
time of appointment, shall have a net worth of at least $1,000,000.
The Trustee
The Trustee is The Bank of New York, a trust company organized under
the laws of New York, having its offices at 101 Barclay Street, New York,
New York 10286 (1-800-431-8002). The Bank of New York is subject to
supervision and examination by the Superintendent of Banks of the State of
New York and the Board of Governors of the Federal Reserve System, and its
deposits are insured by the Federal Deposit Insurance Corporation to the
extent permitted by law. The Trustee must be a banking corporation
organized under the laws of the United States or any state which is
authorized under such laws to exercise corporate trust powers and must
have at all times an aggregate capital, surplus and undivided profits of
not less than $5,000,000. The duties of the Trustee are primarily
ministerial in nature. The Trustee did not participate in the selection
of Securities for the portfolio of the Trust.
The Trustee shall not be liable or responsible in any way for taking
any action or for refraining from taking any action, in good faith
pursuant to the Trust Agreement, or for errors in judgment; or for any
disposition of any moneys, Bonds or Certificates in accordance with the
Trust Agreement, except in cases of its own willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations and
duties; provided, however, that the Trustee shall not in any event be
liable or responsible for any evaluation made by the Evaluator. In
addition, the Trustee shall not be liable for any taxes or other
governmental charges imposed upon or in respect of the Bonds or the Trusts
which it may be required to pay under current or future law of the United
States or any other taxing authority having jurisdiction. The Trustee
shall not be liable for depreciation or loss incurred by reason of the
sale by the Trustee of any of the Bonds pursuant to the Trust Agreement.
For further information relating to the responsibilities of the
Trustee under the Trust Agreement, see "Rights of Certificateholders."
The Trustee may resign by executing an instrument in writing and
filing the same with the Sponsor, and mailing a copy of a notice of
resignation to all Certificateholders. In such an event, the Sponsor is
obligated to appoint a successor Trustee as soon as possible. In
addition, if the Trustee becomes incapable of acting or becomes bankrupt
or its affairs are taken over by public authorities, the Sponsor may
remove the Trustee and appoint a successor as provided in the Trust
Agreement. Notice of such removal and appointment shall be mailed to each
Certificateholder by the Sponsor. If upon resignation of the Trustee no
successor has been appointed and has accepted the appointment within
thirty days after notification, the retiring Trustee may apply to a court
of competent jurisdiction for the appointment of a successor. The
resignation or removal of the Trustee becomes effective only when the
successor Trustee accepts its appointment as such or when a court of
competent jurisdiction appoints a successor Trustee. Upon execution of a
written acceptance of such appointment by such successor Trustee, all the
rights, powers, duties and obligations of the original Trustee shall vest
in the successor.
Any corporation into which the Trustee may be merged or with which
it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Trustee shall be a party, shall be the
successor Trustee. The Trustee must always be a banking corporation
organized under the laws of the United States or any State and have at all
times an aggregate capital, surplus and undivided profits of not less than
$2,500,000.
The Evaluator
The Evaluator is Kenny S&P Evaluation Services, a division of Kenny
Information Systems, Inc. with main offices located at 65 Broadway, New
York, New York 10006. The Evaluator is a wholly-owned subsidiary of
McGraw-Hill, Inc. The Evaluator is a registered investment advisor and
also provides financial information services.
The Trustee, the Sponsor and Certificateholders may rely on any
evaluation furnished by the Evaluator and shall have no responsibility for
the accuracy thereof. Determinations by the Evaluator under the Trust
Agreement shall be made in good faith upon the basis of the best
information available to it; provided, however, that the Evaluator shall
be under no liability to the Trustee, the Sponsor, or Certificateholders
for errors in judgment, except in cases of its own willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and
duties.
The Evaluator may resign or may be removed by the Sponsor and the
Trustee, and the Sponsor and the Trustee are to use their best efforts to
appoint a satisfactory successor. Such resignation or removal shall
become effective upon the acceptance of appointment by the successor
Evaluator. If upon resignation of the Evaluator no successor has accepted
appointment within thirty days after notice of resignation, the Evaluator
may apply to a court of competent jurisdiction for the appointment of a
successor.
TRUST EXPENSES AND CHARGES
At no cost to the Trust, the Sponsor has borne all the expenses of
creating and establishing the Trust, including the cost of initial
preparation and execution of the Trust Agreement, registration of the
Trust and the Units under the Investment Company Act of 1940 and the
Securities Act of 1933, preparation and printing of the Certificates, the
fees of the Evaluator during the initial public offering, legal and
auditing expenses, advertising and selling expenses, initial fees and
expenses of the Trustee and other out-of-pocket expenses.
The Sponsor will not charge the Trust a fee for its services as
such. (See "Sponsor's Profits".)
The Trustee will receive for its ordinary recurring services to each
Trust an annual fee in the amount set forth under "Summary of Essential
Information" in Part A. For a discussion of the services performed by the
Trustee pursuant to its obligations under the Trust Agreement, see "Trust
Administration" and "Rights of Certificateholders".
The Evaluator will receive, for each daily evaluation of the Bonds
in the Trusts, a fee in the amount set forth under "Summary of Essential
Information" in Part A.
The Trustee's and Evaluator's fees are payable monthly as of the
Record Date from the Interest Account to the extent funds are available
and then from the Principal Account. Both fees may be increased without
approval of the Certificateholders by amounts not exceeding proportionate
increases in consumer prices for services as measured by the United States
Department of Labor's Consumer Price Index entitled "All Services Less
Rent."
The following additional charges are or may be incurred by the
Trust: all expenses (including counsel and auditing fees) of the Trustee
incurred and advances made in connection with its activities under the
Trust Agreement, including the expenses and costs of any action undertaken
by the Trustee to protect a Trust and the rights and interests of the Cer-
tificateholders; fees of the Trustee for any extraordinary services
performed under the Trust Agreement; indemnification of the Trustee for
any loss or liability accruing to it without gross negligence, bad faith
or willful misconduct on its part, arising out of or in connection with
its acceptance or administration of a Trust; indemnification of the
Sponsor for any loss, liabilities and expenses incurred in acting as
Sponsor of a Trust without gross negligence, bad faith or willful
misconduct on its part; and all taxes and other governmental charges
imposed upon the Bonds or any part of a Trust (no such taxes or charges
are being levied, made or, to the knowledge of the Sponsor, contemplated).
The above expenses, including the Trustee's fees, when paid by or owing to
the Trustee are secured by a first lien on the Trust to which such
expenses are allowable. In addition, the Trustee is empowered to sell
Bonds of a Trust in order to make funds available to pay all expenses of
such Trust.
EXCHANGE PRIVILEGE AND CONVERSION OFFER
Exchange Privilege
Certificateholders may elect to exchange any or all of their Units
of these Trusts for Units of one or more of any available series of
Insured Municipal Securities Trust, Municipal Securities Trust, New York
Municipal Trust, Mortgage Securities Trust, A Corporate Trust or Equity
Securities Trust (upon receipt by the Equity Securities Trust of an
appropriate exemptive order from the Securities and Exchange Commission)
(the "Exchange Trusts") at a reduced sales charge as set forth below.
Under the Exchange Privilege, the Sponsor's repurchase price is based on
the aggregate bid price of the Bonds in the particular Trust portfolio.
Units in an Exchange Trust then will be sold to the Certificateholder at a
price based on the aggregate offer price of the Bonds in the Exchange
Trust portfolio (or for Units of the Equity Securities Trust, based on the
market value of the underlying securities in the Equity Trust portfolio)
during the initial public offering period of the Exchange Trust; or, based
on the aggregate bid price of the Bonds in the Exchange Trust portfolio if
its initial public offering has been completed, plus accrued interest (or
for Units of the Equity Securities Trust, based on the market value of the
underlying securities in the Equity Trust portfolio) and a reduced sales
charge as set forth below.
Except for unitholders who wish to exercise the Exchange Privilege
within the first five months of their purchase of Units of Trust, the
sales charge applicable to the purchase of units of an Exchange Trust
shall be $15 per unit (or per 1,000 Units for the Mortgage Securities
Trust or per 100 Units for the Equity Securities Trust) (approximately
1.5% of the price of each Exchange Trust unit (or 1,000 Units for the
Mortgage Securities Trust or 100 Units for the Equity Securities Trust)).
For unitholders who wish to exercise the Exchange Privilege within the
first five months of their purchase of Units of Trust, the sales charge
applicable to the purchase of units of an Exchange Trust shall be the
greater of (i) $15 per unit (or per 1,000 Units for the Mortgage
Securities Trust or per 100 Units for the Equity Securities Trust), or
(ii) an amount which when coupled with the sales charge paid by the
unitholder upon his original purchase of Units of the Trust at least
equals the sales charge applicable in the direct purchase of units of an
Exchange Trust. The Exchange Privilege is subject to the following
conditions:
(1) The Sponsor must be maintaining a secondary market in both the
Units of the Trust held by the Certificateholder and the Units of the
available Exchange Trust. While the Sponsor has indicated its intention
to maintain a market in the Units of all Trusts sponsored by it, the
Sponsor is under no obligation to continue to maintain a secondary market
and therefore there is no assurance that the Exchange Privilege will be
available to a Certificateholder at any specific time in the future. At
the time of the Certificateholder's election to participate in the
Exchange Privilege, there also must be Units of the Exchange Trust
available for sale, either under the initial primary distribution or in
the Sponsor's secondary market.
(2) Exchanges will be effected in whole units only. Any excess
proceeds from the Units surrendered for exchange will be remitted and the
selling Certificateholder will not be permitted to advance any new funds
in order to complete an exchange. Units of the Mortgage Securities Trust
may only be acquired in blocks of 1,000 Units. Units of the Equity
Securities Trust may only be acquired in blocks of 100 Units.
(3) The Sponsor reserves the right to suspend, modify or terminate
the Exchange Privilege. The Sponsor will provide unitholders of the
Trust with 60 days' prior written notice of any termination or material
amendment to the Exchange Privilege, provided that, no notice need be
given if (i) the only material effect of an amendment is to reduce or
eliminate the sales charge payable at the time of the exchange, to add
one or more series of the Trust eligible for the Exchange Privilege or to
delete a series which has been terminated from eligibility for the
Exchange Privilege, (ii) there is a suspension of the redemption of units
of an Exchange Trust under Section 22(e) of the Investment Company Act of
1940, or (iii) an Exchange Trust temporarily delays or ceases the sale of
its units because it is unable to invest amounts effectively in
accordance with its investment objectives, policies and restrictions.
During the 60 day notice period prior to the termination or material
amendment of the Exchange Privilege described above, the Sponsor will
continue to maintain a secondary market in the units of all Exchange
Trusts that could be acquired by the affected unitholders. Unitholders
may, during this 60 day period, exercise the Exchange Privilege in
accordance with its terms then in effect. In the event the Exchange
Privilege is not available to a Certificateholder at the time he wishes
to exercise it, the Certificateholder will immediately be notified and no
action will be taken with respect to his Units without further
instructions from the Certificateholder.
To exercise the Exchange Privilege, a Certificateholder should
notify the Sponsor of his desire to exercise his Exchange Privilege. If
Units of a designated, outstanding series of an Exchange Trust are at the
time available for sale and such Units may lawfully be sold in the state
in which the Certificateholder is a resident, the Certificateholder will
be provided with a current prospectus or prospectuses relating to each
Exchange Trust in which he indicates an interest. He may then select the
Trust or Trusts into which he desires to invest the proceeds from his sale
of Units. The exchange transaction will operate in a manner essentially
identical to a secondary market transaction except that units may be
purchased at a reduced sales charge.
Example: Assume that after the initial public offering has been
completed, a Certificateholder has five units of a Trust with a current
value of $700 per unit which he has held for more than 5 months and the
Certificateholder wishes to exchange the proceeds for units of a secondary
market Exchange Trust with a current price of $725 per unit. The proceeds
from the Certificateholder's original units will aggregate $3,500. Since
only whole units of an Exchange Trust may be purchased under the Exchange
Privilege, the Certificateholder would be able to acquire four units (or
4,000 Units of the Mortgage Securities Trust or 400 Units of the Equity
Securities Trust) for a total cost of $2,960 ($2,900 for unit and $60 for
the sales charge). The remaining $540 would be remitted to the
Certificateholder in cash. If the Certificateholder acquired the same
number of units at the same time in a regular secondary market
transaction, the price would have been $3,068.80 ($2,900 for units and
$168.80 for the sales charge, assuming a 5 1/2% sales charge times the
public offering price).
The Conversion Offer
Unit owners of any registered unit investment trust for which there
is no active secondary market in the units of such trust (a "Redemption
Trust") may elect to redeem such units and apply the proceeds of the
redemption to the purchase of available Units of one or more series of A
Corporate Trust, Municipal Securities Trust, Insured Municipal Securities
Trust, Mortgage Securities Trust, New York Municipal Trust or Equity
Securities Trust (upon receipt by the Equity Securities Trust of an
appropriate exemptive order from the Securities and Exchange Commission)
sponsored by Bear, Stearns & Co. Inc. or the Sponsor (the "Conversion
Trusts") at the Public Offering Price for units of the Conversion Trust
based on a reduced sales charge as set forth below. Under the Conversion
Offer, units of the Redemption Trust must be tendered to the trustee of
such trust for redemption at the redemption price, which is based upon the
aggregate bid side evaluation of the underlying bonds in such trust and is
generally about 1 1.2% to 2% lower than the offering price for such bonds
(or for Units of Equity Securities Trust, based on the market value of the
underlying securities in the Equity Trust portfolio). The purchase price
of the units of the Conversion Trusts will be based on the aggregate offer
price of the underlying bonds in the Conversion Trust portfolio (or for
Units of the Equity Securities Trust, based on the market value of the
underlying securities in the Equity Trust portfolio) during its initial
offering period; or, at a price based on the aggregate bid price of the
underlying bonds if the initial public offering of the Conversion Trust
has been completed, plus accrued interest (or for Units of the Equity
Securities Trust, based on the market value of the underlying securities
in the Equity Trust portfolio) and a sales charge as set forth below.
Except for unitholders who wish to exercise the Conversion Offer
within the first five months of their purchase of units of a Redemption
Trust, the sales charge applicable to the purchase of Units of the
Conversion Trust shall be $15 per Unit (or per 1,000 Units for the
Mortgage Securities Trust or per 100 Units for the Equity Securities
Trust). For unitholders who wish to exercise the Conversion Offer within
the first five months of their purchase of units of a Redemption Trust,
the sales charge applicable to the purchase of Units of a Conversion Trust
shall be the greater of (i) $15 per Unit (or per 1,000 Units for the
Mortgage Securities Trust or per 100 Units for the Equity Securities
Trust) or (ii) an amount which when coupled with the sales charge paid by
the unitholder upon his original purchase of units of the Redemption Trust
at least equals the sales charge applicable in the direct purchase of
Units of a Conversion Trust. The Conversion Offer is subject to the
following limitations:
(1) The Conversion Offer is limited only to unit owners of any
Redemption Trust, defined as a unit investment trust for which there is
no active secondary market at the time the Certificateholder elects to
participate in the Conversion Offer. At the time of the unit owner's
election to participate in the Conversion Offer, there also must be
available units of a Conversion Trust, either under a primary
distribution or in the Sponsor's secondary market.
(2) Exchanges under the Conversion Offer will be effected in whole
units only. Unit owners will not be permitted to advance any new funds
in order to complete an exchange under the Conversion Offer. Any excess
proceeds from units being redeemed will be returned to the unit owner.
Units of the Mortgage Securities Trust may only be acquired in blocks of
1,000 units. Units of the Equity Securities Trust may only be acquired
in blocks of 100 units.
(3) The Sponsor reserves the right to modify, suspend or terminate
the Conversion Offer at any time without notice to unit owners of
Redemption Trusts. In the event the Conversion Offer is not available to
a unit owner at the time he wishes to exercise it, the unit owner will be
notified immediately and no action will be taken with respect to his
units without further instruction from the unit owner. The Sponsor also
reserves the right to raise the sales charge based on actual increases in
the Sponsor's costs and expenses in connection with administering the
program, up to a maximum sales charge of $20 per unit (or per 1,000 units
for the Mortgage Securities Trust or 100 Units for the Equity Securities
Trust).
To exercise the Conversion Offer, a unit owner of a Redemption Trust
should notify his retail broker of his desire to redeem his Redemption
Trust Units and use the proceeds from the redemption to purchase Units of
one or more of the Conversion Trusts. If Units of a designated,
outstanding series of a Conversion Trust are at that time available for
sale and if such Units may lawfully be sold in the state in which the unit
owner is a resident, the unit owner will be provided with a current
prospectus or prospectuses relating to each Conversion Trust in which he
indicates an interest. He then may select the Trust or Trusts into which
he decides to invest the proceeds from the sale of his Units. The
transaction will be handled entirely through the unit owner's retail
broker. The retail broker must tender the units to the trustee of the
Redemption Trust for redemption and then apply the proceeds to the
redemption toward the purchase of units of a Conversion Trust at a price
based on the aggregate offer or bid side evaluation per Unit of the
Conversion Trust, depending on which price is applicable, plus accrued
interest and the applicable sales charge. The certificates must be
surrendered to the broker at the time the redemption order is placed and
the broker must specify to the Sponsor that the purchase of Conversion
Trust Units is being made pursuant to the Conversion Offer. The unit
owner's broker will be entitled to retain $5 of the applicable sales
charge.
Example: Assume a unit owner has five units of a Redemption Trust
which has held for more than 5 months with a current redemption price of
$675 per unit based on the aggregate bid price of the underlying bonds and
the unit owner wishes to participate in the Conversion Offer and exchange
the proceeds for units of a secondary market Conversion Trust with a
current price of $750 per Unit. The proceeds from the unit owner's
redemption of units will aggregate $3,375. Since only whole units of a
Redemption Trust may be purchased under the Conversion Offer, the unit
owner will be able to acquire four units of the Conversion Trust (or 4,000
units of the Mortgage Securities Trust or 400 Units of the Equity
Securities Trust) for a total cost of $2,860 ($2,800 for units and $60 for
the sales charge). The remaining $515 would be remitted to the unit owner
in cash. If the unit owner acquired the same number of Conversion Trust
units at the same time in a regular secondary market transaction, the
price would have been $2,962.96 ($2,800 for units and $162.96 sales
charge, assuming a 5 1/2% sales charge times the public offering price).
Description Of The Exchange
Trusts And The Conversion Trusts
A Corporate Trust may be an appropriate investment vehicle for an
investor who is more interested in a higher current return on his
investment (although taxable) than a tax-exempt return (resulting from the
fact that the current return from taxable fixed income securities is
normally higher than that available from tax-exempt fixed income
securities). Municipal Securities Trust and New York Municipal Trust may
be appropriate investment vehicles for an investor who is more interested
in tax-exempt income. The interest income from New York Municipal Trust
is, in general, also exempt from New York State and local New York income
taxes, while the interest income from Municipal Securities Trust is
subject to applicable New York State and local New York income taxes,
except for that portion of the income which is attributable to New York
obligations in the Trust portfolio, if any. The interest income from each
State Trust of the Multi-State Series is, in general, exempt from state
and local taxes when held by residents of the state where issuers of bonds
in such State Trusts are located. The Insured Municipal Securities Trust
combines the advantages of income free from regular federal income tax
with the added safety of irrevocable insurance on the underlying
obligations. Insured Navigator Series further combines the advantages of
providing interest income free from regular federal income tax and sate
and local taxes when held by residents of the state where issuers of bonds
in such state trusts are located with the added safety of irrevocable
insurance on the underlying obligations. Mortgage Securities Trust offers
an investment vehicle for investors who are interested in obtaining safety
of capital and a high level of current distribution of interest income
through investment in a fixed portfolio of collaterized mortgage
obligations. Equity Securities Trust offers investors an opportunity to
achieve capital appreciation together with a high level of current income.
Tax Consequences Of The Exchange
Privilege And The Conversion Offer
A surrender of units pursuant to the Exchange Privilege or the
Conversion Offer normally will constitute a "taxable event" to the Cer-
tificateholder under the Code. The Certificateholder will recognize a tax
gain or loss that will be of a long- or short-term capital or ordinary
income nature depending on the length of time the units have been held and
other factors. A Certificateholder's tax basis in the Units acquired
pursuant to the Exchange Privilege or Conversion Offer will be equal to
the purchase price of such Units. Investors should consult their own tax
advisors as to the tax consequences to them of exchanging or redeeming
units and participating in the Exchange Privilege or Conversion Offer.
OTHER MATTERS
Legal Opinions
The legality of the Units originally offered and certain matters
relating to federal tax law have been passed upon by Messrs. Battle
Fowler, 280 Park Avenue, New York, New York 10017 or Berger Steingut
Tarnoff & Stern, 600 Madison Avenue, New York, New York 10022, as counsel
for the Sponsor. Messrs. Booth & Baron, 122 East 42nd Street, New York,
New York 10168 have acted as counsel to the Trustee.
Independent Auditors
The financial statements of the Trust included in Part A of this
Prospectus have been examined by KPMG Peat Marwick, independent certified
public accountants, for the periods indicated in its reports appearing
herein. The financial statements examined by KPMG Peat Marwick have been
included in reliance upon its reports given on the authority of said firm
as experts in accounting and auditing.
<PAGE>
DESCRIPTION OF BOND RATINGS*
Standard & Poor's Corporation
A brief description of the applicable Standard & Poor's Corporation
rating symbols and their meanings is as follows:
A Standard & Poor's corporate or municipal bond rating is a current
assessment of the creditworthiness of an obligor with respect to a
specific debt obligation. This assessment of creditworthiness may take
into consideration obligors such as guarantors, insurers, or lessees.
* As described by the rating agencies.
<PAGE>
The bond rating is not a recommendation to purchase or sell a
security, inasmuch as it does not comment as to market price.
The ratings are based on current information furnished to Standard &
Poor's by the issuer and obtained by Standard & Poor's from other sources
it considers reliable. The ratings may be changed, suspended or withdrawn
as a result of changes in, or unavailability of, such information.
The ratings are based, in varying degrees, on the following
considerations:
(a) Likelihood of default--capacity and willingness of the obligor
as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation.
(b) Nature of and provisions of the obligation.
(c) Protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA -- This is the highest rating assigned by Standard & Poor's to
a debt obligation and indicates an extremely strong capacity to pay
principal and interest.
AA -- Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and they differ
from AAA issues only in small degrees.
A -- Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions.
BBB -- Bonds rated BBB are regarded as having an adequate capacity
to pay principal and interest. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
principal and interest for bonds in this category than for bonds in the A
category.
Plus (+) or Minus (-): To provide more detailed indications of
credit quality, the ratings from "AA" to "BB" may be modified by the
addition of a plus or minus sign to show relative standing within the
major rating categories.
Provisional Ratings (Prov.): following a rating indicates the
rating is provisional, which assumes the successful completion of the
project being financed by the issuance of the bonds being rated and
indicates that payment of debt service requirements is largely or entirely
dependent upon the successful and timely completion of the project. This
rating, however, while addressing credit quality subsequent to completion,
makes no comment on the likelihood of, or the risk of default upon failure
of, such completion. Accordingly, the investor should exercise his own
judgment with respect to such likelihood and risk.
Moody's Investors Service, Inc.
A brief description of the applicable Moody's Investors Service,
Inc.'s rating symbols and their meanings is as follows:
Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edge." Interest payments are protected by
a large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term
risks appear somewhat larger than in Aaa securities.
A -- Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium-grade obligations.
Factors giving security to principal and interest are considered adequate
but elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.
Those bonds in the A and Baa group which Moody's believes possess
the strongest investment attributes are designated by the symbol A 1 and
Baa 1. Other A bonds comprise the balance of the group. These rankings
(1) designate the bonds which offer the maximum in security within their
quality group, (2) designate bonds which can be bought for possible
upgrading in quality and (3) additionally afford the investor an
opportunity to gauge more precisely the relative attractiveness of
offerings in the market place.
Moody's applies numerical modifiers, 1, 2 and 3 in each generic
rating classification from Aa through B in its corporate bond rating
system. The modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issue ranks in the lower
end of its generic rating category.
Con-Bonds for which the security depends upon the completion of some
act or the fulfillment of some condition are rated conditionally. These
are debt obligations secured by (a) earnings of projects under
construction, (b) earnings of projects unseasoned in operating experience,
(c) rentals which begin when facilities are completed or (d) payments to
which some other limiting condition attaches. Rating denotes probable
credit stature upon completion of construction or elimination of basis of
condition.
* * *
<PAGE>
==========================================================================
AUTHORIZATION FOR INVESTMENT IN NEW YORK MUNICIPAL TRUST
TRP PLAN - TOTAL REINVESTMENT PLAN
I hereby elect to participate in the TRP Plan and am the owner of ____
units of Series ____/Discount & Zero Coupon Fund ____ Series.
I hereby authorize The Bank of New York, Trustee, to pay all semi-annual
or annual distributions of interest and principal (if any) with respect to
such units to The Bank of New York, as TRP Plan Agent, who shall
immediately invest the distributions in units of the available series of
New York Municipal Trust or, if unavailable, of other available series of
regular Municipal Securities Trust.
The foregoing authorization is subject Date ______________, 19__
in all respects to the terms and
conditions of participation set forth
in the prospectus relating to such
available series.
______________________________________
Registered Holder (print) Registered Holder (print)
______________________________________
Registered Holder Signature Registered Holder Signature
(Two signatures if joint tenancy)
My Brokerage Firm's Name
Street Address
City, State & Zip Code
Salesman's Name ______________________ Salesman's No.
UNIT HOLDERS NEED ONLY DATE AND SIGN THIS FORM AND MAIL THIS CARD.
=========================================================================
Mail to your Broker
or
The Bank of New York
101 Barclay Street
New York, New York 10286
<PAGE>
INDEX
Title Page NEW YORK MUNICIPAL TRUST
NEW YORK DISCOUNT
Summary of Essential Information . . . A-4 & ZERO COUPON FUND
Information Regarding the Trust . . . . A-6
Financial and Statistical Information . A-7 (A Unit Investment Trust)
Audit and Financial Information
Report of Independent Auditors . . . F-1 Prospectus
Statement of Net Assets . . . . . . . F-2
Statement of Operations . . . . . . . F-3 Dated: April 29, 1994
Statement of Changes in Net
Assets . . . . . . . . . . . . . . . F-4
Notes to Financial Statements . . . . F-5 Sponsor:
Portfolio . . . . . . . . . . . . . . F-6
The Trust . . . . . . . . . . . . . . . 1 Bear, Stearns & Co. Inc.
Portfolios . . . . . . . . . . . . . . 2 245 Park Avenue
Special Factors Affecting New York . . 7 New York, NY 10167
Public Offering . . . . . . . . . . . . 17 212-272-2500
Estimated Long Term Return and
Estimated Current Return . . . . . . . 19 Trustee:
Rights of Certificateholders . . . . . 19
Tax Status . . . . . . . . . . . . . . 22 The Bank of New York
Liquidity . . . . . . . . . . . . . . . 26 101 Barclay Street
Total Reinvestment Plan . . . . . . . . 28 New York, NY 10286
Trust Administration . . . . . . . . . 31 1-800-431-8002
Trust Expenses and Charges . . . . . . 35
Exchange Privilege and Conversion
Offer . . . . . . . . . . . . . . . . 35 Evaluator:
Other Matters . . . . . . . . . . . . . 40
Description of Bond Ratings . . . . . . 40 Kenny S&P Evaluation
Services
65 Broadway
Parts A and B of this Prospectus do not New York, NY 10006
contain all of the information set forth in
the registration statement and exhibits
relating thereto, filed with the Securities
and Exchange Commission, Washington, D.C.,
under the Securities Act of 1933, and to which
reference is made.
* * *
This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in any state to any person to
whom it is not lawful to make such offer in such state.
No person is authorized to give any information or to make any
representations not contained in Parts A and B in this Prospectus; and any
information or representation not contained herein must not be relied upon
as having been authorized by the Trust, the Trustee, the Evaluator, or the
Sponsor. The Trust is registered as a unit investment trust under the
Investment Company Act of 1940. Such registration does not imply that the
Trust or any of its Units have been guaranteed, sponsored, recommended or
approved by the United States or any state or any agency or officer
thereof.
<PAGE>
PART II
ADDITIONAL INFORMATION NOT REQUIRED
IN PROSPECTUS
CONTENTS OF REGISTRATION STATEMENT
This Post-Effective Amendment to the Registration Statement on Form S-6
comprises the following papers and documents:
The facing sheet on Form S-6.
The Cross-Reference Sheet.
The Prospectus consisting of pages.
Signatures.
Consent of Independent Auditors.
Consent of Counsel (included in Exhibits 99.3.1 and 99.3.1.1).
Consents of the Evaluator including Confirmation of Ratings (included in
Exhibit 99.5.1).
The following exhibits:
99.1.1 -- Form of Reference Trust Agreement, as amended (filed as
Exhibit 1.1 to Amendment No. 1 to Form S-6 Registration
Statement No. 2-89130 of New York Municipal Trust, New
York Discount and Zero Coupon Fund - 4th Series on
February 2, 1984 and incorporated herein by reference).
99.1.1.1 -- Trust Indenture and Agreement for New York Municipal
Trust, Series 19 (and Subsequent Series) dated July 14,
1982 (filed as Exhibit 1.1.1 to Amendment No. 1 to
Form S-6 Registration Statement No. 2-76247 of New York
Municipal Trust, Series 19 on July 14, 1982 and
incorporated herein by reference).
99.1.3.4 -- Certificate of Incorporation of Bear, Stearns & Co. Inc.,
as amended (filed as Exhibit 99.1.3.4 to Form S-6
Registration Statement Nos. 33-50891 and 33-50901 of
Insured Municipal Securities Trust, New York Navigator
Insured Series 15 and New Jersey Navigator Insured
Series 11; and Municipal Securities Trust, Multi-State
Series 44, respectively, on December 9, 1993 and
incorporated herein by reference).
99.1.3.5 -- By-Laws of Bear, Stearns & Co. Inc., as amended (filed as
Exhibit 99.1.3.5 to Form S-6 Registration Statement Nos.
33-50891 and 33-50901 of Insured Municipal Securities
Trust, New York Navigator Insured Series 15 and New Jersey
Navigator Insured Series 11; and Municipal Securities
Trust, Multi-State Series 44, respectively, on December 9,
1993 and incorporated herein by reference).
99.1.4 -- Form of Agreement Among Underwriters (filed as Exhibit 1.4
to Amendment No. 1 to Form S-6 Registration Statement
No. 2-62505 of New York Municipal Trust, Series 1 on
October 27, 1978 and incorporated herein by reference).
99.2.1 -- Form of Certificate (filed as Exhibit 2.1 to Amendment
No. 1 to Form S-6 Registration Statement No. 2-88220 of
New York Municipal Trust, New York Discount & Zero Coupon
Fund - 3rd Series on December 14, 1983 and incorporated
herein by reference).
99.3.1 -- Opinion of Berger Steingut Tarnoff & Stern (formerly
Berger and Steingut) (formerly Baskin and Steingut, P.C.)
(formerly Baskin and Sears, P.C.) as to the legality of
the securities being registered, including their consent
to the filing thereof and to the use of their name under
the heading "Legal Opinions" in the Prospectus (filed as
Exhibit 3.1 to Amendment No. 1 to Form S-6 Registration
Statement No. 2-89130 of New York Municipal Trust, New
York Discount & Zero Coupon Fund, 4th Series on
February 2, 1984 and incorporated herein by reference).
99.3.1.1 -- Opinion of Battle Fowler (formerly Battle, Fowler, Jaffin
& Kheel) as to tax status of securities being registered,
including their consent to the delivery thereof and to the
use of their name under the heading "Tax Status" in the
Prospectus (filed as Exhibit 3.1.1 to Post-Effective
Amendment No. 1 to Form S-6 Registration Statement
No. 2-89130 of New York Municipal Trust, New York Discount
& Zero Coupon Fund - 4th Series on May 15, 1985 and
incorporated herein by reference).
*99.5.1 -- Consents of the Evaluator including Confirmation of
Ratings.
99.6.0 -- Power of Attorney of Bear, Stearns & Co. Inc., the
Depositor, by its Officers and a majority of its Directors
(filed as Exhibit 6.0 to Post-Effective Amendment No. 8 to
Form S-6 Registration Statements Nos. 2-92113, 2-92660,
2-93073, 2-93884 and 2-94545 of Municipal Securities
Trust, Multi-State Series 4, 5, 6, 7 and 8, respectively,
on October 30, 1992 and incorporated herein by reference).
* Being filed by this Amendment.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, New York Municipal Trust, New York Discount & Zero Coupon
Fund - 4th Series certifies that it has met all of the requirements for
effectiveness of this Post-Effective Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933. The
registrant has duly caused this Post-Effective Amendment to the
Registration Statement to be signed on its behalf by the undersigned,
hereunto duly authorized, in the City of New York and State of New York on
the 18th day of April, 1994.
NEW YORK MUNICIPAL TRUST, NEW YORK DISCOUNT
& ZERO COUPON FUND - 4th SERIES
(Registrant)
BEAR, STEARNS & CO. INC.
(Depositor)
By: PETER J. DeMARCO
(Authorized Signator)
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment to the Registration Statement has been
signed below by the following persons who constitute the principal
officers and a majority of the directors of Bear, Stearns & Co. Inc., the
Depositor, in the capacities and on the dates indicated.
Name Title Date
ALAN C. GREENBERG Chairman of the Board, Chief )
Executive Officer, Director and )
JAMES E. CAYNE Senior Managing Director )
President, Director and Senior )April 18, 1994
ALVIN H. EINBENDER Managing Director )
Chief Operating Officer, Executive)
Vice President, Director and )
JOHN C. SITES, JR. Senior Managing Director )
Executive Vice President, Director)By:PETER J.DeMARCO
MICHAEL L. TARNOPOL and Senior Managing Director )
Executive Vice President, Director)
VINCENT J. MATTONE and Senior Managing Director ) Attorney-in-Fact*
Executive Vice President, Director)
ALAN D. SCHWARTZ and Senior Managing Director )
Executive Vice President, Director)
DOUGLAS P.C. NATION and Senior Managing Director )
Director and Senior Managing )
Director )
WILLIAM J. MONTGORIS Chief Financial Officer, Senior )
Vice President-Finance and Senior )
KENNETH L. EDLOW Managing Director )
Secretary and Senior Managing )
Director )
MICHAEL MINIKES Treasurer and Senior Managing )
Director )
MICHAEL J. ABATEMARCO Controller, Assistant Secretary )
and Senior Managing Director )
MARK E. LEHMAN Senior Vice President - General )
Counsel and Senior Managing )
Director )
FREDERICK B. CASEY Assistant Treasurer and Senior )
Managing Director )
_______________
* An executed power of attorney was filed as Exhibit 6.0 to Post-
Effective Amendment No. 8 to Registration Statements Nos. 2-92113,
2-92660, 2-93073, 2-93884 and 2-94545 on October 30, 1992.
<PAGE>
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in these Post-Effective Amendments to the Registration
Statements of our reports on the financial statements of New York Municipal
Trust, Discount & Zero Coupon Fund, 4th Series included herein and to the
reference to our firm under the heading "Independent Auditors" in the
Prospectus which is part of this Registration Statement.
KPMG PEAT MARWICK
New York, New York
April 15, 1994
<PAGE>
EXHIBIT INDEX
Exhibit Description Page No.
99.1.1 Form of Reference Trust Agreement, as
amended (filed as Exhibit 1.1 to Amendment
No. 1 to Form S-6 Registration Statement
No. 2-89130 of New York Municipal Trust,
New York Discount & Zero Coupon Fund - 4th
Series on February 2, 1984 and
incorporated herein by reference).
99.1.1.1 Trust Indenture and Agreement for New York
Municipal Trust, Series 19 (and Subsequent
Series) dated July 14, 1982 (filed as
Exhibit 1.1.1 to Amendment No. 1 to
Form S-6 Registration Statement
No. 2-76247 of New York Municipal Trust,
Series 19 on July 14, 1982 and
incorporated herein by reference).
99.1.3.4 Certificate of Incorporation of Bear,
Stearns & Co. Inc., as amended (filed as
Exhibit 99.1.3.4 to Form S-6 Registration
Statement Nos. 33-50891 and 33-50901 of
Insured Municipal Securities Trust, New
York Navigator Insured Series 15 and New
Jersey Navigator Insured Series 11; and
Municipal Securities Trust, Multi-State
Series 44, respectively, on December 9,
1993 and incorporated herein by
reference).
99.1.3.5 By-Laws of Bear, Stearns & Co. Inc., as
amended (filed as Exhibit 99.1.3.5 to Form
S-6 Registration Statement Nos. 33-50891
and 33-50901 of Insured Municipal
Securities Trust, New York Navigator
Insured Series 15 and New Jersey Navigator
Insured Series 11; and Municipal
Securities Trust, Multi-State Series 44,
respectively, on December 9, 1993 and
incorporated herein by reference).
99.1.4 Form of Agreement Among Underwriters
(filed as Exhibit 1.4 to Amendment No. 1
to Form S-6 Registration Statement
No. 2-62505 of New York Municipal Trust,
Series 1 on October 27, 1978 and
incorporated herein by reference).
99.2.1 Form of Certificate (filed as Exhibit 2.1
to Amendment No. 1 to Form S-6
Registration Statement No. 2-88220 of New
York Municipal Trust, New York Discount &
Zero Coupon Fund - 3rd Series on
December 14, 1983 and incorporated herein
by reference).
99.3.1 Opinion of Berger Steingut Tarnoff & Stern
(formerly Berger and Steingut) (formerly
Baskin and Steingut, P.C.) (formerly
Baskin and Sears, P.C.) as to the legality
of the securities being registered,
including their consent to the filing
thereof and to the use of their name under
the heading "Legal Opinions" in the
Prospectus (filed as Exhibit 3.1 to
Amendment No. 1 to Form S-6 Registration
Statement No. 2-89130 of New York
Municipal Trust, New York Discount & Zero
Coupon Fund, 4th Series on February 2,
1984 and incorporated herein by
reference).
99.3.1.1 Opinion of Battle Fowler (formerly Battle,
Fowler, Jaffin & Kheel) as to tax status
of securities being registered, including
their consent to the delivery thereof and
to the use of their name under the heading
"Tax Status" in the Prospectus (filed as
Exhibit 3.1.1 to Post-Effective Amendment
No. 1 to Form S-6 Registration Statement
No. 2-89130 of New York Municipal Trust,
New York Discount & Zero Coupon Fund - 4th
Series on May 15, 1985 and incorporated
herein by reference).
99.5.1 Consents of the Evaluator including
Confirmation of Ratings...................
99.6.0 Power of Attorney of Bear, Stearns & Co.
Inc., the Depositor, by its Officers and a
majority of its Directors (filed as
Exhibit 6.0 to Post-Effective Amendment
No. 8 to Form S-6 Registration Statements
Nos. 2-92113, 2-92660, 2-93073, 2-93884
and 2-94545 of Municipal Securities Trust,
Multi-State Series 4, 5, 6, 7 and 8,
respectively, on October 30, 1992 and
incorporated herein by reference).
KENNY S&P EVALUATION SERVICES
A Division of Kenny Information Systems, Inc.
65 Broadway
New York, New York 10006-2511
Telephone 212/770-4990
F.A. Shinal
Senior Vice President
Chief Financial Officer
April 29, 1994
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, NY 10167
RE: New York Municipal Trust, Discount & Zero
Coupon Fund, 4th Series
Gentlemen:
We have examined the post-effective Amendment to the
Registration Statement File No. 2-89130 for the above-captioned trust. We
hereby acknowledge that Kenny S&P Evaluation Services, a division of Kenny
Information Systems, Inc. is currently acting as the evaluator for the
trust. We hereby consent to the use in the Amendment of the reference to
Kenny S&P Evaluation Services, a division of Kenny Information Systems,
Inc. as evaluator.
In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registration Statement for the
respective bonds comprising the trust portfolio are the ratings currently
indicated in our KENNYBASE database.
You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commission.
Sincerely,
F. A. Shinal
Senior Vice President
FAS/cns
