As Filed with the Securities and Exchange Commission
August 22, 1997
1933 Act Registration No. 333-30169
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___ Post-Effective Amendment No. 1
THORNBURG INVESTMENT TRUST
- --------------------------
(Exact Name of Registrant as Specified in Charter)
119 East Marcy Street, Suite 202, Santa Fe, NM 87501
- ---------------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Area Code and Telephone Number: (505) 984-0200
--------------
H. Garrett Thornburg, Jr.
119 East Marcy Street, Suite 202
Santa Fe, New Mexico 87501
- ---------------------------------------
(Name and Address of Agent for Service)
Charles W. N. Thompson, Jr.
White, Koch, Kelly & McCarthy, P. A.
Post Office Box 787
Santa Fe, New Mexico 87504-0787
- ------------------------------------
(Copies of all Correspondence)
It is proposed that this filing will become effective immediately upon
filing pursuant to Rule 485(b) under the Securities Act of 1933.
The Registrant has registered an indefinite amount of securities under
the Securities Act of 1933 pursuant to Rule 24f under the Investment
Company Act of 1940. Accordingly, no fee is payable herewith. Registrant
filed the notice required by Rule 24f-2 with respect to its most recent
fiscal year on November 26, 1996.
<PAGE>
EXPLANATORY NOTE
This Registration Statement includes two combined Prospectus/Proxy
Statements, which relate respectively to two of the Registrant's separate
series, THORNBURG INTERMEDIATE MUNICIPAL FUND and THORNBURG NEW YORK
INTERMEDIATE MUNICIPAL FUND. The two Prospectus/Proxy Statements, together
with the related Statements of Additional Information, were filed in
definitive form on August 6, 1997 in accordance with Rule 497, and are
incorporated herein by reference.
This post-effective amendment is made pursuant to the Registrant's
undertaking to file opinions of counsel supporting the tax consequences of
the proposed acquisitions of assets and issuance of shares described in this
Registration Statement. The form of opinion is filed as two exhibits to this
amendment, and is proposed to be delivered at the closing of the each of the
reorganizations.
<PAGE>
THORNBURG INVESTMENT TRUST
(Thornburg Intermediate Municipal Fund)
Form N-14 Cross Reference Sheet
Part A. Thornburg Intermediate Municipal Fund Prospectus/Proxy Statement
Item No. and Caption Caption
1. Beginning of Registration Statement Cover Page; Front cover
and Outside Front Cover Page of page of Prospectus/Proxy
Prospectus Statement
2. Beginning and Outside Back Cover of Table of Contents
Prospectus
3. Fee Table, Synopsis Information and Summary of the Proposed
Risk Factors Reorganization; Principal
Risk Factors; Fees and
Expenses of Mackenzie Fund
and Thornburg Fund;
Comparative Fee Tables;
Comparison of Investment
Objectives, Policies and
Restrictions of Mackenzie
and Thornburg Funds;
Comparative Information on
Shareholder Rights
4. Information About the Transaction Summary of the Proposed
Reorganization;
Information About the
Reorganization
5. Information About the Registrant Summary of the Proposed
Reorganization; Investment
Advisers and Distributors
of Mackenzie Fund and
Thornburg Fund; Comparison
of Investment Objectives,
Policies and Restrictions
of Mackenzie Fund and
Thornburg Fund; Principal
Risk Factors; Fees and
Expenses of Mackenzie Fund
and Thornburg Fund;
Comparative Fee Table;
Purchase, Redemption and
Exchange Procedures for
Mackenzie Fund and
Thornburg Fund; Dividend
Policies of Mackenzie Fund
and Thornburg Fund;
Comparative Information
on Shareholder Rights;
Additional Information
About Mackenzie Fund and
Thornburg Fund
6. Information About the Company Summary of the Proposed
Being Acquired Reorganization; Investment
Advisers and Distributors
of Mackenzie Fund and
Thornburg Fund;
Investment Objectives,
Policies and Restrictions
of Mackenzie Fund and
Thornburg Fund; Principal
Risk Factors; Fees and
Expenses of Mackenzie Fund
and Thornburg Fund;
Comparative Fee Table;
Purchase, Redemption and
Exchange Procedures of
Mackenzie Fund and
Thornburg Fund; Dividend
Policies of Mackenzie Fund
and Thornburg Fund;
Comparative Information on
Shareholder Rights;
Additional Information
about Mackenzie Fund and
Thornburg Fund
7. Voting Information Information About the
Reorganization; Voting
Information
8. Interest of Certain Persons and Experts Not Applicable
9. Additional Information Required for Not Applicable
Reoffering by Persons Deemed to be
Underwriters
<PAGE>
Part B. Thornburg Intermediate Municipal Fund Statement of Additional
Item No. and Caption Information Caption
10. Cover Page Cover Page
11. Table of Contents Not Applicable
12. Additional Information About Registrant Statement of Additional
Information of Thornburg
Intermediate Municipal
Funds, February 1, 1997,
as revised May 6, 1997
13. Additional Information About the Company Statement of Additional
Being Acquired Information of Mackenzie
Series Trust, dated
October 25, 1996
14. Financial Statements Annual Report of Thornburg
Intermediate Municipal
Fund, September 30, 1996;
Semiannual Report of
Thornburg Intermediate
Municipal Fund, March 31,
1997;
Annual Report of Mackenzie
National Municipal Fund,
June 30, 1996;
Semiannual Report of
Mackenzie National
Municipal Fund,
December 31, 1996
Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
<PAGE>
THORNBURG INVESTMENT TRUST
(Thornburg New York Intermediate Municipal Fund)
Form N-14 Cross Reference Sheet
Report A. Thornburg New York Intermediate Municipal Fund
Item No. and Caption Prospectus/Proxy Statement
Caption
1. Beginning of Registration Statement Cover Page; Front cover
and Outside Front Cover Page of page of Prospectus/Proxy
Prospectus Statement
2. Beginning and Outside Back Cover of Table of Contents
Prospectus
3. Fee Table, Synopsis Information and Summary of the Proposed
Risk Factors Reorganization; Principal
Risk Factors; Fees and
Expenses of Mackenzie Fund
and Thornburg Fund;
Comparative Fee Tables;
Comparison of Investment
Objectives, Policies and
Restrictions of Mackenzie
Fund and Thornburg Fund;
Comparative Information on
Shareholder Rights
4. Information About the Transaction Summary of the Proposed
Reorganization;
Information About the
Reorganization
5. Information About the Registrant Summary of the Proposed
Reorganization; Investment
Advisers and Distributors
of Mackenzie Fund and
Thornburg Fund;
Investment Objectives,
Policies and Restrictions
of Mackenzie Fund and
Thornburg Fund; Principal
Risk Factors; Fees and
Expenses of Mackenzie Fund
and Thornburg Fund;
Comparative Fee Table;
Purchase, Redemption
and Exchange Procedures
for Mackenzie Fund and
Thornburg Fund; Dividend
Policies of Mackenzie Fund
and Thornburg Fund;
Comparative Information
on Shareholder Rights;
Additional Information
About Mackenzie Fund
and Thornburg Fund
6. Information About the Company Summary of the Proposed
Being Acquired Reorganization; Investment
Advisers and Distributors
of Mackenzie Fund and
Thornburg Fund;
Investment Objectives,
Policies and Restrictions
of Mackenzie Fund and
Thornburg Fund; Principal
Risk Factors; Fees and
Expenses of Mackenzie Fund
and Thornburg Fund;
Comparative Fee Table;
Purchase, Redemption and
Exchange Procedures of
Mackenzie Fund and
Thornburg Fund; Dividend
Policies of Mackenzie Fund
and Thornburg Fund;
Comparative Information on
Shareholder Rights;
Additional Information
about Mackenzie Fund and
Thornburg Fund
7. Voting Information Information About the
Reorganization; Voting
Information
8. Interest of Certain Not Applicable
Persons and Experts
9. Additional Information Required for Not Applicable
Reoffering by Persons Deemed to be
Underwriters
<PAGE>
Part B: Thornburg New York Intermediate Municipal Fund
Item No. and Caption Statement of Additional
Information Caption
10. Cover Page Cover Page
11. Table of Contents Not Applicable
12. Additional Information About Registrant Statement of Additional
Information of Thornburg
New York Intermediate
Municipal Fund, June 1,
1997
13. Additional Information About the Company Statement of Additional
Being Acquired Information of Mackenzie
Series Trust, dated
October 25, 1996
14. Financial Statements Annual Report of Mackenzie
New York Municipal Fund,
June 30, 1996;
Semi-annual Report of
Mackenzie New York
Municipal Fund,
December 31, 1996
Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
<PAGE>
Part C
Other Information
- -----------------
Item 15. Indemnification
- -------------------------
(1) Section 10.2 of the Registrant's Agreement and Declaration of
Trust generally provides that each of the Trust's officers and Trustees
will be indemnified by the Trust against liability and expenses in
connection with his having been a Trustee or officer unless it is
determined that the individual is liable by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office, or if the individual did not act in good faith
in the reasonable belief that the action was in the Trust's best interest.
(2) Section 7 of the Registrant's Distribution Agreement in the form
applicable to each of its series, generally provides that the Trust will
indemnify TSC, its officers and directors, and its controlling persons
against liabilities and expenses incurred because of any alleged untrue
statement of material fact contained in the Registration Statement,
Prospectus or annual or interim reports to shareholders, or any alleged
omission to state a material fact required to be stated therein, or
necessary to make the statements therein not misleading, except where (i)
the untrue statement or omission arises from information furnished by TSC,
or (ii) to the extent the prospective indemnitee is an officer, trustee or
controlling person of the Trust, the indemnification is against public
policy as expressed in the 1933 Act, or (iii) the liability or expense
arises from TSC's willful misfeasance, bad faith, gross negligence,
reckless performance of duties, or reckless disregard of its obligations
and duties under the Distribution Agreement. Further, TSC agrees to
indemnify the Trust, its officers and trustees, and its controlling persons
in certain circumstances.
(3) The directors and officers of TMC are insured, and it is intended
that the Trustees and officers of Thornburg Trust will become insured,
under a joint professional and directors and officers liability policy.
The described individuals are referred to as the "insureds." The policy
covers amounts for which the insureds become legally obligated to pay by
reason of the act, error, omission, misstatement, misleading statement or
neglect or breach of duty in the performance of their duties as directors,
trustees and officers. In addition, the policy covers TMC, and is proposed
to cover the Registrant, to the extent that they have legally indemnified
the insureds for amounts incurred by the insureds as described in the
preceding sentence. The coverage excludes amounts that the insureds become
obligated to pay by reason of conduct which constitutes willful
misfeasance, bad faith, gross negligence or reckless disregard of the
insured's duties. The application of the foregoing provisions is limited
by the following undertaking set forth in the rules promulgated by the
Securities and Exchange Commission:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officer
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policies
expressed in such Act and that if a claim for indemnification
against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in such Act and will be
governed by the final adjudication of such issue.
Item 16. Exhibits
- ------------------
(1) Declaration of Trust, as amended, incorporated by reference from
registrant's initial registration statement on Form N-1A filed on
June 12, 1987; First Amendment dated August 11, 1987,
incorporated by reference from pre-effective amendment no. 1
filed on October 28, 1987; Second Amendment incorporated by
reference from post-effective amendment no. 1 filed on March 3,
1988; Third, Fourth, Fifth, Sixth and Seventh Amendments,
incorporated by reference from post-effective amendment no. 13
filed on December 3, 1993; Amended and Restated Designation of
Series, incorporated by reference from post-effective amendment
no. 17 filed on July 27, 1994; Ninth Amendment, incorporated by
reference from post-effective amendment no. 20 filed on July 5,
1995; Corrected Tenth Amendment, incorporated by reference from
post-effective amendment no. 22 filed on October 2, 1995; First
Supplement to Amended and Restated Designation of Series,
incorporated by reference from post-effective amendment no. 26
filed on May 6, 1996.
(2) By-laws, incorporated by reference from registrant's initial
registration statement on Form N-1A filed on June 12, 1987.
(3) Not applicable.
(4) Agreement and Plan of Reorganization - (filed as
Exhibit A to each of the Prospectus/Proxy Statements
included as Part A of this Registration Statement).
(5) Not applicable.
(6) (a) Form of Restated Investment Advisory Agreement, incorporated
by reference from post-effective amendment number 27
to Registrant's registration statement on form N-1A, filed
on August 30, 1996.
(b) Form of Administrative Services Agreement, incorporated by
reference from post-effective amendment no. 29 to
registrant's registration statement on Form N-1A, filed on
March 14, 1997.
(7) Form of Underwriting Agreement, incorporated by reference from
registrant's initial registration statement on Form N-1A filed on
June 12, 1987.
(8) Not applicable.
(9) Custody Agreement, incorporated by reference from post-effective
amendment no. 29 to registrant's registration statement on
Form N-1A, filed on March 14, 1997.
(10) (a) Form of Class A Service Plan, incorporated by reference from
post-effective amendment no. 29 to registrant's registration
statement on Form N-1A, filed on March 14, 1997.
(b) Multiple Class Plan pursuant to Rule 18F-3, filed as exhibit
to initial filing of this Registration Statement on June 27,
1997.
(11) Opinion and consent of Koch, Kelly & McCarthy, P.A., filed as
exhibit to initial filing of this Registration Statement on
June 27, 1997.
(12) (a) Form of opinion and consent of Dechert Price & Rhoads,
relating to proposed acquisition of substantially all of the
assets of Mackenzie National Municipal Fund by Thornburg
Intermediate Municipal Fund.
(b) Form of opinion and consent of Dechert Price & Rhoads,
relating to proposed acquisition of substantially all of the
assets of Mackenzie New York Municipal Fund by Thornburg New
York Intermediate Municipal Fund.
(13) Not applicable.
(14) (a) Consent of McGladrey & Pullen, LLP, independent auditors,
filed as exhibit to initial filing of this Registration
Statement on June 27, 1997.
(b) Consent of Coopers & Lybrand, LLP, independent auditors,
filed as exhibit to initial filing of this Registration
Statement on June 27, 1997.
(15) Not applicable.
(16) Powers of attorney, filed as exhibit to initial filing of this
Registration Statement on June 27, 1997.
(17) (a) Declaration pursuant to Rule 24f-2, filed as exhibit to
initial filing of this Registration Statement on June 27,
1997.
(b) Proxy card (Mackenzie National Municipal Fund), filed as
exhibit to initial filing of this Registration Statement on
June 27, 1997.
(c) Proxy Card (Mackenzie New York Municipal Fund), filed as
exhibit to initial filing of this Registration Statement on
June 27, 1997.
Item 17. Undertakings
- ----------------------
(1) The undersigned registrant agrees that prior to any public
offering of the securities registered through the use of a
prospectus which is part of this registration statement by any
person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act of 1933, as
amended, the reoffering prospectus will contain the information
called for by the applicable registration form for reofferings
by person who may be deemed underwriters, in addition to the
information called for by the other items of the applicable
form.
(2) The undersigned registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as part of an
amendment to the registration statement and will not be used
until the amendment is effective, and that, in determining any
liability under the Securities Act of 1933, as amended, each
post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein, and
the offering of the securities at that time shall be deemed to
be the initial bona fide offering of them.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended
(the "Securities Act"), the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Santa Fe, and State of New Mexico on the 22nd
day of August, 1997. The Registrant represents that this amendment is filed
solely for one or more of the purposes specified in Rule 485(b)(1), and no
material event requiring disclosure in the prospectus/proxy statements has
occurred since the date specified in Rule 485(b)(2).
THORNBURG INVESTMENT TRUST
Registrant
By *
------------------------------------
H. Garrett Thornburg, Jr., President
Pursuant to the requirements of the Securities Act this Registration
Statement has been signed below by the following persons in the capacities
and on the date indicated.
*
- ------------------------------------------
H. Garrett Thornburg, Jr., Trustee,
President and principal executive officer
*
- ------------------------------------------
J. Burchenal Ault, Trustee
*
- ------------------------------------------
David A. Ater, Trustee
*
- ------------------------------------------
Forrest S. Smith, Trustee
*
- ------------------------------------------
James W. Weyhrauch, Trustee
*
- ------------------------------------------
Brian J. McMahon, Vice President
Trustee and principal accounting
and financial officer
* By: /s/
------------------------------------- Date: August 22, 1997
Charles W.N. Thompson, Jr.
Attorney-In-Fact
<PAGE>
INDEX TO EXHIBITS
(12) (a) Form of opinion and consent of Dechert Price & Rhoads,
relating to proposed acquisition of substantially all of the
assets of Mackenzie National Municipal Fund by Thornburg
Intermediate Municipal Fund
(b) Form of opinion and consent of Dechert Price & Rhoads,
relating to proposed acquisition of substantially all of the
assets of Mackenzie New York Municipal Fund by Thornburg New
York Intermediate Municipal Fund
<PAGE>
EXHIBIT 12(a)
[Closing Date], 1997
Mackenzie Series Trust
in respect of
Mackenzie [ ] Municipal Fund
Via Mizner Financial Plaza
700 South Federal Highway
Boca Raton, Florida 33432
Thornburg [ ]
in respect of
Thornburg [ ]
119 East Marcy Street
Santa Fe, New Mexico 87501
Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences to Mackenzie [ ] Municipal Fund
("Target"), a separate series of Mackenzie Series Trust ("Mackenzie"), to the
holders of the shares of beneficial interest (the "shares") of Target (the
"Target shareholders"), and to Thornburg [ ]
("Acquiring Fund"), a separate series of Thornburg [ ]
("Thornburg"), in connection with the proposed transfer of substantially all
of the assets of Target to Acquiring Fund in exchange solely for voting
shares of [beneficial interest/common stock] of Acquiring Fund ("Acquiring
Fund shares") and the assumption by Acquiring Fund of certain liabilities of
Target, followed by the distribution of such Acquiring Fund shares received
by Target in complete liquidation, all pursuant to the Agreement and Plan of
Reorganization (the "Plan") dated as of [ ], 1997 (the
"Reorganization").
For purposes of this opinion, we have examined and rely upon (1) the
Plan, (2) the Form N-14, filed by Thornburg on [ ],
1997, with the Securities and Exchange Commission, (3) the facts and
representations contained in the letter dated [ ],
1997, addressed to us from Mackenzie, (4) the facts and representations
contained in the letter dated [ ],
1997, addressed to us from Thornburg, and (5) such other documents and
instruments as we have deemed necessary or appropriate for purposes of
rendering this opinion.
<PAGE>
Mackenzie [ ] Municipal Fund
Thornburg [ ]
[Closing Date], 1997
Page 2
This opinion is based upon the Internal Revenue Code of 1986, as amended
(the "Code"), United States Treasury regulations, judicial decisions and
administrative rulings and pronouncements of the Internal Revenue Service,
all as in effect on the date hereof. This opinion is conditioned upon the
Reorganization taking place in the manner described in the Plan and the Form
N-14 referred to above.
Based upon the foregoing, it is our opinion that:
(1) The acquisition by Acquiring Fund of substantially all of the
assets of Target in exchange solely for Acquiring Fund shares and the
assumption by Acquiring Fund of certain liabilities of Target, followed by
the distribution of such Acquiring Fund shares to the Target shareholders in
exchange for their Target shares in complete liquidation of Target, will
constitute a reorganization within the meaning of Section 368(a) of the Code.
Acquiring Fund and Target will each be "a party to a reorganization" within
the meaning of Section 368(b) of the Code.
(2) No gain or loss will be recognized to Target upon the transfer of
substantially all of its assets to Acquiring Fund in exchange solely for
Acquiring Fund shares and the assumption by Acquiring Fund of certain
liabilities of Target, or upon the distribution to the Target shareholders of
the Acquiring Fund shares.
(3) No gain or loss will be recognized by Acquiring Fund upon the
receipt of Target's assets in exchange for Acquiring Fund shares.
(4) The basis of the assets of Target in the hands of Acquiring Fund
will be, in each instance, the same as the basis of those assets in the hands
of Target immediately prior to the Reorganization exchange.
(5) The holding period of Target's assets in the hands of Acquiring Fund
will include the period during which the assets were held by Target.
(6) No gain or loss will be recognized to the Target shareholders upon
the receipt of Acquiring Fund shares solely in exchange for Target shares.
(7) The basis of the Acquiring Fund shares received by the Target
shareholders will be the same as the basis of the Target shares surrendered
in exchange therefor.
(8) The holding period of the Acquiring Fund shares received by the
Target shareholders will include the holding period of the Target shares
surrendered in exchange therefor, provided that such Target shares were held
as capital assets in the hands of the Target shareholders upon the date of
the exchange.
<PAGE>
Mackenzie [ ] Municipal Fund
Thornburg [ ]
[Closing Date], 1997
Page 3
We express no opinion as to the federal income tax consequences of the
Reorganization except as expressly set forth above, or as to any transaction
except those consummated in accordance with the Plan.
Very truly yours,<PAGE>
EXHIBIT 12(b)
[Closing Date], 1997
Mackenzie Series Trust
in respect of
Mackenzie [ ] Municipal Fund
Via Mizner Financial Plaza
700 South Federal Highway
Boca Raton, Florida 33432
Thornburg [ ]
in respect of
Thornburg [ ]
119 East Marcy Street
Santa Fe, New Mexico 87501
Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences to Mackenzie [ ] Municipal Fund
("Target"), a separate series of Mackenzie Series Trust ("Mackenzie"), to the
holders of the shares of beneficial interest (the "shares") of Target (the
"Target shareholders"), and to Thornburg [ ]
("Acquiring Fund"), a separate series of Thornburg [ ]
("Thornburg"), in connection with the proposed transfer of substantially all
of the assets of Target to Acquiring Fund in exchange solely for voting
shares of [beneficial interest/common stock] of Acquiring Fund ("Acquiring
Fund shares") and the assumption by Acquiring Fund of certain liabilities of
Target, followed by the distribution of such Acquiring Fund shares received
by Target in complete liquidation, all pursuant to the Agreement and Plan of
Reorganization (the "Plan") dated as of [ ], 1997 (the
"Reorganization").
For purposes of this opinion, we have examined and rely upon (1) the
Plan, (2) the Form N-14, filed by Thornburg on [ ],
1997, with the Securities and Exchange Commission, (3) the facts and
representations contained in the letter dated [ ],
1997, addressed to us from Mackenzie, (4) the facts and representations
contained in the letter dated [ ],
1997, addressed to us from Thornburg, and (5) such other documents and
instruments as we have deemed necessary or appropriate for purposes of
rendering this opinion.
<PAGE>
Mackenzie [ ] Municipal Fund
Thornburg [ ]
[Closing Date], 1997
Page 2
This opinion is based upon the Internal Revenue Code of 1986, as amended
(the "Code"), United States Treasury regulations, judicial decisions and
administrative rulings and pronouncements of the Internal Revenue Service,
all as in effect on the date hereof. This opinion is conditioned upon the
Reorganization taking place in the manner described in the Plan and the Form
N-14 referred to above.
Based upon the foregoing, it is our opinion that:
(1) The acquisition by Acquiring Fund of substantially all of the
assets of Target in exchange solely for Acquiring Fund shares and the
assumption by Acquiring Fund of certain liabilities of Target, followed by
the distribution of such Acquiring Fund shares to the Target shareholders in
exchange for their Target shares in complete liquidation of Target, will
constitute a reorganization within the meaning of Section 368(a) of the Code.
Acquiring Fund and Target will each be "a party to a reorganization" within
the meaning of Section 368(b) of the Code.
(2) No gain or loss will be recognized to Target upon the transfer of
substantially all of its assets to Acquiring Fund in exchange solely for
Acquiring Fund shares and the assumption by Acquiring Fund of certain
liabilities of Target, or upon the distribution to the Target shareholders of
the Acquiring Fund shares.
(3) No gain or loss will be recognized by Acquiring Fund upon the
receipt of Target's assets in exchange for Acquiring Fund shares.
(4) The basis of the assets of Target in the hands of Acquiring Fund
will be, in each instance, the same as the basis of those assets in the hands
of Target immediately prior to the Reorganization exchange.
(5) The holding period of Target's assets in the hands of Acquiring Fund
will include the period during which the assets were held by Target.
(6) No gain or loss will be recognized to the Target shareholders upon
the receipt of Acquiring Fund shares solely in exchange for Target shares.
(7) The basis of the Acquiring Fund shares received by the Target
shareholders will be the same as the basis of the Target shares surrendered
in exchange therefor.
(8) The holding period of the Acquiring Fund shares received by the
Target shareholders will include the holding period of the Target shares
surrendered in exchange therefor, provided that such Target shares were held
as capital assets in the hands of the Target shareholders upon the date of
the exchange.
<PAGE>
Mackenzie [ ] Municipal Fund
Thornburg [ ]
[Closing Date], 1997
Page 3
We express no opinion as to the federal income tax consequences of the
Reorganization except as expressly set forth above, or as to any transaction
except those consummated in accordance with the Plan.
Very truly yours,
