DEFINED
ASSET FUNDSSM
CORPORATE INCOME
FUND
------------------------------------------------------------
CASH OR ACCRETION BOND
SERIES--11
(A UNIT INVESTMENT TRUST)
PROSPECTUS, PART A
DATED SEPTEMBER 8, 1995
SPONSORS:
Merrill Lynch,
Pierce, Fenner & Smith Incorporated
Smith Barney Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
Dean Witter Reynolds Inc.
This Defined Fund's objective is to provide a substantial level of safety with a
choice of quarterly distribution of new units or cash through investment in a
portfolio consisting primarily of long-term compound interest corporate bonds
that are collateralized (the 'Compound Interest Bonds'). There is no assurance
that this objective will be met because it is subject to the continuing ability
of issuers of the Debt Obligations to meet their principal and interest
requirements. Furthermore, the market value of the underlying Securities, and
therefore the value of the Units, will fluctuate with changes in interest rates
and other factors. The Securities were issued after July 18, 1984, as a result
of which the interest income (including original issue discount) will be exempt
from U.S. Federal income taxes, including withholding taxes, for many foreign
Holders (see Taxes in Part B).
The collateral backing the Compound Interest Bonds is primarily composed of
mortgage-backed Securities guaranteed as to the payment of principal and
interest by the Federal National Mortgage Association ('FNMA Certificates' or
'Fannie Maes') or the Federal Home Loan Mortgage Corporation ('FHLMC
Certificates' or 'Freddie Macs'). The guaranty obligation with respect to the
FNMA Certificates and the FHLMC Certificates will be obligations of FNMA and
FHLMC, respectively, only (limited by FNMA's and FHLMC's credit capabilities)
and will not be backed by the full faith and credit of the United States or any
other governmental entity. Neither FNMA nor FHLMC guarantees payment on the
Bonds or on the Units of the Fund, as such. The Fund is also designed for IRA
accounts, Keogh plans and other tax-deferred retirement programs.
MINIMUM PURCHASE IN INDIVIDUAL TRANSACTIONS: 1,000 UNITS
------------------------------------------------------------------------
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.
------------------------------------------------------------------------
NOTE: PART A OF THIS PROSPECTUS MAY NOT BE DISTRIBUTED
UNLESS ACCOMPANIED BY CORPORATE INCOME FUND PROSPECTUS, PART B.
This Prospectus consists of two parts. The first includes an Investment Summary
and certified financial statements of the Fund, including the related securities
portfolio; the second contains a general summary of the Fund.
------------------------------------------------------------------------
Read and retain both parts of this Prospectus for future reference.
<PAGE>
DEFINED ASSET FUNDSSM is America's oldest and largest family of unit investment
trusts with over $95 billion sponsored since 1971. Each Defined Fund is a
portfolio of preselected securities. The portfolio is divided into 'units'
representing equal shares of the underlying assets. Each unit receives an equal
share of income and principal distributions.
With Defined Asset Funds you know in advance what you are investing in and that
changes in the portfolio are limited. Most defined bond funds pay interest
monthly and repay principal as bonds are called, redeemed, sold or as they
mature. Defined equity funds offer preselected stock portfolios with defined
termination dates.
Your financial advisor can help you select a Defined Fund to meet your personal
investment objectives. Our size and market presence enable us to offer a wide
variety of investments. Defined Funds are available in the following types of
securities: municipal bonds, corporate bonds, government bonds, utility stocks,
growth stocks, even international securities denominated in foreign currencies.
Termination dates are as short as one year or as long as 30 years. Special funds
are available for investors seeking extra features: insured funds, double and
triple tax-free funds, and funds with 'laddered maturities' to help protect
against rising interest rates. Defined Funds are offered by prospectus only.
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CONTENTS
Investment Summary.......................................... A-3
Accountants' Opinion Relating to the Fund................... D-1
Statement of Condition...................................... D-2
Portfolio................................................... D-7
A-2
<PAGE>
DEFINED ASSET FUNDS--CORPORATE INCOME FUND, CASH OR ACCRETION BOND SERIES--11
INVESTMENT SUMMARY
AS OF MAY 31, 1995, THE EVALUATION DATE
PRINCIPAL AMOUNT OF SECURITIES(a)........................$ 6,121,052
NUMBER OF UNITS.......................................... 8,974,456
FACE AMOUNT OF SECURITIES PER UNIT (TIMES 1,000).........$ 682.05
FRACTIONAL UNDIVIDED INTEREST IN FUND REPRESENTED BY EACH
UNIT................................................... 1/8,974,456th
PUBLIC OFFERING PRICE PER 1,000 UNITS(b)
Aggregate bid side evaluation of Securities.........$ 6,261,743
--------------------
Divided by Number of Units (times 1,000)............$ 697.73
Plus sales charge of 3.50% of Public Offering Price
(3.626% of net amount invested) 25.30
--------------------
Public Offering Price per 1,000 Units...............$ 723.03
(plus cash
adjustments and
accrued interest)(c)
SPONSORS' REPURCHASE PRICE AND REDEMPTION PRICE PER 1,000
UNITS..................................................$ 697.73
(aggregate bid side evaluation of Securities) ($25.30 (plus cash
less than Public Offering Price per 1,000 Units) adjustments and
accrued interest)(c)
CALCULATION OF ESTIMATED NET ANNUAL INTEREST RATE PER
1,000 UNITS (BASED ON FACE AMOUNT PER 1,000 UNITS)
Annual interest rate per 1,000 Units................ 8.788%
Less estimated annual expenses per 1,000 Units
($3.84) expressed as a percentage................. .563%
--------------------
Estimated net annual interest rate per 1,000
Units............................................. 8.225%
--------------------
--------------------
RECORD DAY FOR UNIT ACCRETION DISTRIBUTION
The 1st of September, December, March and June of each year until the last
Payment Commencement Date.
RECORD DAY FOR PRINCIPAL AND INTEREST
DISTRIBUTIONS
The 10th day of each month after the first Payment Commencement Date.
UNIT ACCRETION DISTRIBUTIONS(d)
The 10th of September, December, March and June of each year until the last
Payment Commencement Date.
PRINCIPAL AND INTEREST DISTRIBUTIONS
The 25th of each month after receipt of payments on any Compound Interest
Bond.
MINIMUM CAPITAL DISTRIBUTION
No distribution need be made from Capital Account if balance is less than
$5.00 per 1,000 Units.
TRUSTEE'S ANNUAL FEE AND EXPENSES(e)
$3.84 per 1,000 Units (see Fund Expenses in Part B).
PORTFOLIO SUPERVISION FEE(f)
Maximum of $0.35 per 1,000 original Principal Amount of underlying Compound
Interest Bonds (see Fund Expenses in Part B).
EVALUATOR'S FEE FOR EACH EVALUATION
Maximum of $14 (see Expenses and Charges in Part B).
EVALUATION TIME
3:30 P.M. New York Time
MINIMUM VALUE OF FUND
Trust may be terminated if value of Fund is less than 40% of the original
Principal Amount of Fund Securities on the date of their deposit. As of the
Evaluation Date, the value of the Fund is 41% of the original Principal
Amount of Fund Securities on the date of their deposit.
------------------------------
(a)On the initial date of Deposit (March 4, 1987) the Principal Amount of
Securities in the Fund was $15,362,411. Cost of Securities is set
forth under Portfolio.
(b)These figures assume a purchase of 1,000 Units. The price of a single
Unit, or any multiple thereof, is calculated simply by dividing the
Public Offering Price per 1,000 Units, above, by 1,000, and
multiplying by the number of Units. The sales charge will be reduced
on a graduated scale in the case of quantity purchases. The resulting
reduction in the Public Offering Price will increase the effective
return on a Unit.
(c)For Units purchased or redeemed on the Evaluation Date, accrued
interest is approximately equal to the undistributed net investment
income of the Fund (see Statement of Condition on p. D-2) divided by
the number of outstanding Units, plus accrued interest per Unit to the
expected date of settlement (5 business days after purchase or
redemption). The amount of the cash adjustment which is added is equal
to the cash per Unit held in the Capital Account not allocated to the
purchase of specific Securities (see How To Buy Units, How To Sell
Units in Part B).
(d)Until principal and interest payments on all other classes of bonds of
an issue are completed, interest accruing on the Compound Interest
Bonds is accrued but not paid. After any payment commencement date,
interest and principal on that Bond will be paid in cash and the
number of new Units created will be reduced correspondingly. Payments
have commenced on two of the Compound Interest Bonds.
(e)The Trustee receives annually for its services as Trustee $0.95 per
$1,000 original Principal Amount of Compound Interest Bonds. The
Trustee's Annual Fee and Expenses also includes the Portfolio
Supervision Fee and the Evaluator's Fee set forth herein.
(f)The Sponsors also may be reimbursed for their costs of bookkeeping and
administrative services to the Fund. Portfolio supervision fees
deducted in excess of portfolio supervision expenses may be used for
this reimbursement. Additional deductions for this purpose are
currently estimated not to exceed an annual rate of $0.10 per 1,000
Units.
A-3
<PAGE>
DEFINED ASSET FUNDS--CORPORATE INCOME FUND, CASH OR ACCRETION BOND SERIES--11
INVESTMENT SUMMARY AS OF THE EVALUATION DATE (CONTINUED)
NUMBER OF ISSUES IN PORTFOLIO............................... 6
RANGE OF MATURITIES.................................................2016-2018
NUMBER OF COMPOUND INTEREST BONDS........................... 5
NUMBER OF U.S. TREASURY INTEREST BEARING BONDS.............. 1
PERCENTAGE OF ACCRETED PRINCIPAL AMOUNT OF PORTFOLIO
REPRESENTED BY EACH ISSUER(a) OF COMPOUND INTEREST BONDS:
Collateralized Mortgage Obligation
Trust 14............................................... 31%
Drexel Burnham Lambert Collateralized Mortgage Obligations
Trust, Series G........................................... 4%
Drexel Burnham Lambert CMO Trust, Series H................ 28%
Kidder Peabody Mortgage Assets
Trust V................................................ 23%
M.D.C. Asset Investors Trust I............................ 6%
PERCENTAGE OF ACCRETED PRINCIPAL AMOUNT OF PORTFOLIO
COMPRISED OF:
FHLMC-COLLATERALIZED BONDS:
8.45% Compound Interest Bond (stated maturity
5/20/2018)............................................. 23%
9.10% Compound Interest Bond (stated maturity
3/20/2018)........................................... 4%
FNMA-COLLATERALIZED BONDS
8.00% Compound Interest Bond (stated maturity 1/1/2017)... 31%
8.50% Compound Interest Bond (stated maturity 4/1/2017)... 28%
FNMA & FHLMC-COLLATERALIZED BONDS
8.60% Compound Interest Bond (stated maturity
8/20/2018)........................................... 6%
ESTIMATED RATE TO PROJECTED MATURITY--Estimated Rate to Projected Maturity
of the Compound Interest Bonds is calculated assuming that the mortgages
underlying the collateral for the Compound Interest Bonds are prepaid at a range
of specified percentages of a standard prepayment model as set forth under Note
(4) to Portfolio.
RISK FACTORS--The compounding of interest on the Compound Interest Bonds,
without cash payments to Holders for a number of years (even though the
additional Units credited to Holders in respect of the compounding interest may
be liquidated at any time by Holders), may make investment in the Fund
particularly well suited for purchase by Individual Retirement Accounts. Keogh
plan, pension funds and other tax-deferred retirement plans or for investors who
can have taxable income attributed to them in advance of the receipt of the cash
attributable to such income. In addition, the ability to buy single Units
enables these investors to tailor the dollar amount of their purchases of Units
to take maximum possible advantage of the annual deductions available for
contributions to these plans (see Retirement Plans in Part B).
PRINCIPAL ACCRETION--AUTOMATIC INCREASES IN NUMBER OF UNITS OUTSTANDING.
Principal Accretion of the Fund is derived from the increase semi-annually in
the Accreted Principal Amounts of the Compound Interest Bonds from the Date of
Deposit to their Payment Commencement Dates. On the Date of Deposit, 15,362,411
Units were issued representing, on a one Unit per one dollar basis, undivided
fractional interests in the Principal Amount of $15,362,411 of the Compound
Interest Bonds acquired on that date. To reflect the aggregate accrued interest
which has been added to the principal of the Compound Interest Bonds (i.e.,
'compounded') during the period preceding each Unit Accretion Distribution Day,
the Indenture requires additional Units to be issued ratably to Holders of
record on each Unit Accretion Distribution Day. The additional Units will be
issued based on the same rate of one Unit per one dollar of aggregate increase
in Accreted Principal Amount of the Compound Interest Bonds since the last
Record Day for Unit Accretion Distribution. Additional Units will not be created
as to a Compound Interest Bond after it reaches its Payment Commencement Date
(for estimated Payment Commencement Dates see Portfolio).
REDUCED REINVESTMENT AND PREPAYMENT RISK--Interest accrues on the
Compound-Interest Bonds but is not paid until their respective Payment
Commencement Dates. After this period, interest and principal are paid
semi-annually to the Fund and distributed monthly to Holders. During the
compounding period, interest continues to accrue at the original rate so that
reinvestment risk is substantially eliminated for Holders who do not elect
automatic liquidation. In that respect, during their compounding period, the
Bonds resemble a zero coupon instrument. Prepayments on the collateral go to pay
the 'fast pay' classes before the Compound Interest Bonds begin to amortize.
Moreover, for Units purchased at a Public Offering Price below the current
principal amount of the Compound Interest Bonds, prepayments on the FNMA or
FHLMC collateral increase the actual return on Units.
------------------------------
(a) All of the issuers of the Compound Interest Bonds are limited purpose
corporations organized solely for the purpose of issuing bonds collateralized by
mortgage-backed securities. The collateral security for each issue will serve as
collateral only for that issue.
A-4
<PAGE>
DEFINED ASSET FUNDS--CORPORATE INCOME FUND, CASH OR ACCRETION BOND SERIES--11
TAXES--
The following supplements 'Taxes' in Part B:
Each Holder's pro rata portion of each Compound Interest Bond will be
considered to have been originally issued at a discount ('original issue
discount'). In general, original issue discount is defined as the
difference between the price at which a debt obligation was issued and its
stated redemption price at maturity. Each Holder will be required to
include in gross income each year the amount of original issue discount
which accrues during the year (determined under a formula based on the
compounding of interest) on his pro rata portion of each Compound Interest
Bond. If a Holder's tax cost for his pro rata portion of a Debt Obligation
issued with original issue discount is greater than its 'adjusted issue
price' but less than its stated redemption price at maturity (as may be
adjusted for certain payments), the Holder will be considered to have
purchased his pro rata portion of the Debt Obligation at an 'acquisition
premium.' The amount of original issue discount which must be accrued will
be reduced by the amount of such acquisition premium. The amount of accrued
original issue discount so included in income in respect of a Holder's pro
rata portion of a Bond is added to the Holder's tax basis therefor. If a
Debt Obligation is redeemed at a premium pursuant to its terms, the amount
of any such redemption may be treated as ordinary income.
A Holder will not recognize taxable gain or loss when additional Units
are credited to his account to reflect increases in the Accreted Principal
Amount of the Compound Interest Bonds, but taxable gain or loss may be
recognized when the Holder disposes of these Units either pursuant to the
procedures specified for automatic capital appreciation liquidations or
otherwise. As discussed above, when the Holder disposes of these Units he
will be considered to have disposed of a part of his pro rata portion of
each Bond and may recognize taxable gain (or loss) depending on the
Holder's adjusted tax basis for this part of his pro rata portion of each
Bond.
* * *
To the best knowledge of the Sponsors, each Bond was issued after July 18,
1984.
Certain aspects of the above opinion of Davis Polk & Wardwell are based in
part on the assumption that the Compound Interest Bonds are treated as
indebtedness of their respective Issuers for Federal income tax purposes. In
connection with the issuance of each Compound Interest Bond, counsel to the
Issuer thereof has rendered or will render an opinion that the Compound Interest
Bonds (and the other compound interest bonds and other classes of bonds issued
with it) will be treated for Federal income tax purposes as indebtedness of the
Issuer, and not as an ownerhip interest in the GNMA/FNMA/FHLMC Certificates
collateralizing such bonds, or an equity interest in the Issuer or in a separate
association taxable as a corporation. Neither the Sponsors nor Davis Polk &
Wardwell have made or will make any review of the basis for these opinions.
After the end of each calendar year, the Fund Trustee will furnish to each
Holder an annual statement containing information relating to the interest
received by the Fund on each interest-bearing bond (and on each Compound
Interest Bond after it reaches its Payment Commencement Date), the original
issue discount accrued on any Compound Interest Bond or other bond having
original issue discount, the gross proceeds received by the Fund from the
disposition of any Bond (resulting from redemption or payment at maturity of any
Bond) and the fees and expenses paid by the Fund. The Trustee will also furnish
annual information returns to each Holder and to the Internal Revenue Service.
Holders should be aware that, because of the above original issue discount
rules, Holders will be required for Federal income tax purposes to include
amounts in gross income in advance of the receipt of the cash attributable to
such income. A Holder who elects to sell or redeem the additional Units credited
to his account pursuant to the Fund's automatic Unit accretion liquidations or
otherwise will receive cash each year but will still be required to determine
the amount includable in his gross income under the original issue discount
rules and in addition will be required to calculate whether he recognized any
taxable gain or loss on the sale or redemption of the additional Units.
Therefore, investment in the Fund may be appropriate only for Individual
Retirement Accounts, Keogh plans, pension funds and other tax-deferred
retirement plans (see Retirement Plan below). Purchasers of Units should consult
their own tax advisers as to the tax treatment of original issue discount with
respect to their particular circumstances, and the application of state and
local taxes, in order to determine whether an investment in the Fund would be
appropriate for them.
A-5
<PAGE>
DEFINED ASSET FUNDS - CORPORATE INCOME FUND,
CASH OR ACCRETION BOND SERIES - 11
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Defined Asset Funds - Corporate Income Fund,
Cash or Accretion Bond Series - 11:
We have audited the accompanying statement of condition of Defined Asset Funds -
Corporate Income Fund, Cash or Accretion Bond Series - 11, including the
portfolio, as of May 31, 1995 and the related statements of operations and of
changes in net assets for the years ended May 31, 1995, 1994 and 1993. These
financial statements are the responsibility of the Trustee. (See Note 5.) 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. Securities owned at
May 31, 1995, as shown in such portfolio, were confirmed to us by The Bank of
New York, the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Trustee, as well as
evaluating the overall financial statement presentation. We believe that our
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 Defined Asset Funds - Corporate
Income Fund, Cash or Accretion Bond Series - 11 at May 31, 1995 and the results
of its operations and changes in its net assets for the above-stated years in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
August 5, 1995
D-1
<PAGE>
DEFINED ASSET FUNDS - CORPORATE INCOME FUND,
CASH OR ACCRETION BOND SERIES - 11
STATEMENT OF CONDITION
AS OF MAY 31, 1995
TRUST PROPERTY:
Investment in marketable securities -
at value (adjusted cost $5,746,694) (Note 1) $6,261,743
Accrued interest receivable 11,593
Cash 30,889
Total trust property $6,304,225
NET ASSETS, REPRESENTED BY:
8,974,456 units of fractional undivided interest
outstanding (Note 3) $6,169,480
Undistributed net investment income 134,745 $6,304,225
UNIT VALUE ($6,304,225 / 8,974,456 units) $.70246
See Notes to Financial Statements.
D-2
<PAGE>
DEFINED ASSET FUNDS - CORPORATE INCOME FUND,
CASH OR ACCRETION BOND SERIES - 11
STATEMENTS OF OPERATIONS
<TABLE><CAPTION>
Years Ended May 31,
1995 1994 1993
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest on collateralized bonds. $465,791 $626,853 $1,067,616
Other interest income 87,110 70,683 136,798
Trustee's fees and expenses (21,379) (29,957) (27,656)
Sponsors' fees (3,841) (3,978) (8,909)
Net investment income 527,681 663,601 1,167,849
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain on securities sold or
redeemed 46,162 234,151 183,417
Unrealized appreciation (depreciation) of
investments 148,399 (462,055) 1,701,671
Net realized and unrealized gain (loss) on
investments 194,561 (227,904) 1,885,088
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $722,242 $435,697 $3,052,937
</TABLE>
See Notes to Financial Statements.
D-3
<PAGE>
DEFINED ASSET FUNDS - CORPORATE INCOME FUND,
CASH OR ACCRETION BOND SERIES - 11
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE><CAPTION>
Years Ended May 31,
1995 1994 1993
<S> <C> <C> <C>
OPERATIONS:
Net investment income $ 527,681 $ 663,601 $ 1,167,849
Realized gain on securities sold or
redeemed 46,162 234,151 183,417
Unrealized appreciation (depreciation) of
investments 148,399 (462,055) 1,701,671
Net increase in net assets resulting from
operations 722,242 435,697 3,052,937
DISTRIBUTIONS TO HOLDERS (Note 2):
Income (45,103) (103,284) (13,537)
Principal (488,313) (2,603,812) (709,828)
Total distributions (533,416) (2,707,096) (723,365)
CAPITAL SHARE TRANSACTIONS:
Issuances of 470,428, 619,850 and 1,190,876
additional units, respectively (Note 1)
Redemptions of 1,472,057, 2,950,000 and
3,166,000 units, respectively (971,865) (2,472,491) (3,220,476)
NET DECREASE IN NET ASSETS (783,039) (4,743,890) (890,904)
NET ASSETS AT BEGINNING OF YEAR 7,087,264 11,831,154 12,722,058
NET ASSETS AT END OF YEAR $6,304,225 $ 7,087,264 $11,831,154
PER UNIT:
Income distributions during year. $.00453 $.00913 $.01100
Principal distributions during year $.04824 $.22839 $.05751
Net asset value at end of year $.70246 $.71043 $.96140
TRUST UNITS OUTSTANDING AT END OF YEAR 8,974,456 9,976,085 12,306,235
</TABLE>
See Notes to Financial Statements.
D-4
<PAGE>
DEFINED ASSET FUNDS - CORPORATE INCOME FUND,
CASH OR ACCRETION BOND SERIES - 11
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator based on
bid side evaluations for the securities (see "Redemption - Computation
of Redemption Price Per Unit" in this Prospectus, Part B).
(b) Accrued interest is added to the principal and cost of the
collateralized bonds in accordance with their terms. On the first day
of each September, December, March and June of each year, additional
units are issued ratably to Holders based on one unit per one dollar
of aggregate increase in the accreted principal amount of the
collateralized bonds.
(c) The Fund is not subject to income taxes. Accordingly, no provision for
such taxes is required.
(d) Interest income is recorded as earned.
2. DISTRIBUTIONS
The Fund receives distributions of principal or interest on some of its
holdings of the collateralized bonds in accordance with the terms of such
bonds. Distributions are made by the Fund to its Holders only when payments
of principal and interest are received on such bonds; distributions are
made on or about the last day of each month. For additional information,
see "Description of the Fund - Life of the Bonds and of the Fund" in this
Prospectus, Part B.
3. NET CAPITAL
Cost of 45,723 units at Date of Deposit $ 43,562
Less sales charge 1,960
Net amount applicable to Holders 41,602
Transfers from undistributed net investment income for
8,928,733 additional units issued 8,928,733
Redemptions of units - net cost of 15,316,688 units
redeemed less redemption amounts 1,678,015
Realized loss on securities sold or redeemed (1,081,903)
Principal distributions (3,912,016)
Unrealized appreciation of investments 515,049
Net capital applicable to Holders $6,169,480
D-5
<PAGE>
DEFINED ASSET FUNDS - CORPORATE INCOME FUND,
CASH OR ACCRETION BOND SERIES - 11
NOTES TO FINANCIAL STATEMENTS
4. INCOME TAXES
All Fund items of income received, accretion of original issue discount on
the collateralized bonds, expenses paid and realized gains and losses on
securities sold are attributable to the Holders, on a pro rata basis, for
Federal income tax purposes in accordance with the grantor trust rules of
the United States Internal Revenue Code.
At May 31, 1995, the cost of the investment securities for Federal income
tax purposes was approximately equivalent to the adjusted cost as shown in
the Fund's portfolio.
5. REDEMPTIONS
On March 1, 1995, The Bank of New York assumed all of the Trustee
responsibilities from Investors Bank & Trust Company. Holders may request
redemptions of units by presentation thereof to The Bank of New York,
generally on any business day.
D-6
<PAGE>
DEFINED ASSET FUNDS - CORPORATE INCOME FUND,
CASH OR ACCRETION BOND SERIES - 11
PORTFOLIO
AS OF MAY 31, 1995
<TABLE><CAPTION>
Estimated
S&P Optional Optional Payment
Portfolio No. and Title of Rating of Accreted Interest Call Call CommencementAdjusted
Securities Issues(1) Principal(2) Maturities Rate Date(3) Percentage(3)Date(4) Cost(2) Value(2)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Collateralized Mortgage AAA $1,894,575 1/01/17 8.00% 4/01/00 100% 1/01/96 $1,749,274 $1,915,343
Obligation Trust 14,
Collateralized Mortgage
Obligation, Class Z
2 Drexel Burnham Lambert, AAA 246,099 3/20/18 9.10 3/20/02 100 (5) 245,442 255,721
Collateralized Mortgage
Obligations Trust, Series G,
Class G4-Z
3 Drexel Burnham Lambert CMO AAA 1,713,717 4/01/17 8.50 4/01/02 100 4/01/99 1,623,194 1,753,416
Trust, Series H, Collater-
alized Mortgage Obligations,
Class H-4
4 Kidder Peabody, Mortgage AAA 1,421,093 5/20/18 8.45 4/20/97 10 2/20/97 1,317,064 1,443,077
Assets Trust V, Class V-Z
5 M.D.C. Asset Investors AAA 385,568 8/20/18 8.60 5/20/02 10 (5) 350,713 396,360
Trust I, Collateralized
Mortgage Obligations,
Class I-8
6 U.S. Treasury Bonds 7.50% AAA 460,000 11/15/16 7.50 - - - 461,007 497,826
TOTAL $6,121,052 $5,746,694 $6,261,743
</TABLE>
See Notes to Portfolio.
D-7
<PAGE>
DEFINED ASSET FUNDS - CORPORATE INCOME FUND,
CASH OR ACCRETION BOND SERIES - 11
NOTES TO PORTFOLIO
AS OF MAY 31, 1995
(1) A description of the rating symbols, which have been provided by the
Evaluator, and their meanings appear in this Prospectus, Part B.
(2) See Notes to Financial Statements.
(3) The collateralized bonds were issued in series and each series is callable
at the option of the Issuer, in whole (but generally not in part), without
premium, at any time (i) on or after certain predetermined call dates or
(ii) after the aggregate outstanding principal amount of the collateralized
bonds of such series declines to a stated percentage of the aggregate
outstanding principal amount of such collateralized bonds on their original
issue date. The Compound Interest Bonds in Portfolio Numbers 2 and 3 are
callable on or after the date indicated provided all other classes of that
series of Compound Interest Bonds have been repaid in full. The Compound
Interest Bonds in Portfolio Number 1 are callable on the earlier of the
date indicated and the date on which the unpaid accreted value of the bonds
equals 100% or less of the original principal amount of the bonds. The
Compound Interest Bonds in Portfolio Numbers 4 and 5 are callable on the
earlier of the date indicated and the date on which the unpaid accreted
value of the bonds equals 10% or less of the original principal amount of
the bonds (see "Description of the Fund - Life of the Bonds and of the
Fund" in this Prospectus, Part B).
(4) Assumes that prepayments on the mortgages underlying the collateralized
bonds are prepaid at prepayment rates ranging from 240% to 350% of a
standard prepayment model.
(5) This security has commenced payments.
D-8
<PAGE>
DEFINED
ASSET FUNDSSM
SPONSORS: CORPORATE INCOME FUND
Merrill Lynch, Cash or Accretion Bond Series--11
Pierce, Fenner & Smith Incorporated (A Unit Investment Trust)
Defined Asset Funds PROSPECTUS PART A
P.O. Box 9051 This Prospectus does not contain all of
Princeton, N.J. 08543-9051 the information with respect to the
(609) 282-8500 investment company set forth in its
Smith Barney Inc. registration statement and exhibits
Unit Trust Department relating thereto which have been filed
388 Greenwich Street--23rd Floor with the Securities and Exchange
New York, NY 10013 Commission, Washington, D.C. under the
1-800-223-2532 Securities Act of 1933 and the
PaineWebber Incorporated Investment Company Act of 1940, and to
1200 Harbor Boulevard which reference is hereby made.
Weehawken, N.J. 07087 No person is authorized to give any
(201) 902-3000 information or to make any
Prudential Securities Incorporated representations with respect to this
One Seaport Plaza investment company not contained in this
199 Water Street Prospectus; and any information or
New York, N.Y. 10292 representation not contained herein must
(212) 776-1000 not be relied upon as having been
Dean Witter Reynolds Inc. authorized. This Prospectus does not
Two World Trade Center--59th Floor constitute an offer to sell, or a
New York, N.Y. 10048 solicitation of an offer to buy,
(212) 392-2222 securities in any state to any person to
EVALUATOR: whom it is not lawful to make such offer
Kenny S&P Evaluation Services, in such state.
a division of J. J. Kenny Co., Inc.
65 Broadway
New York, N.Y. 10006
INDEPENDENT ACCOUNTANTS:
Deloitte & Touche LLP
2 World Financial Center
9th Floor
New York, N.Y. 10281-1414
TRUSTEE:
The Bank of New York
(a New York Banking Corporation)
Unit Investment Trust Department
P.O. Box 974
Wall Street Station
New York, N.Y. 10268-0974
1-800-221-7771
11709--9/95
