<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 5, 1995
REGISTRATION NO. 33-34754
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 5
TO
FORM S-6
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FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
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A. EXACT NAME OF TRUST:
DEFINED ASSET FUNDS--
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES 7B
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE,
FENNER & SMITH
INCORPORATED
DEFINED ASSET FUNDS
POST OFFICE BOX 9051
PRINCETON, N.J.
08543-9051 SMITH BARNEY INC.
388 GREENWICH
STREET--23RD FLOOR
NEW YORK, NY 10013
PRUDENTIAL SECURITIES
INCORPORATED
ONE SEAPORT PLAZA
199 WATER STREET
NEW YORK, N.Y. 10292 DEAN WITTER REYNOLDS INC.
TWO WORLD TRADE
CENTER--59TH FLOOR
NEW YORK, N.Y. 10048
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
TERESA KONCICK, ESQ.
P.O. BOX 9051
PRINCETON, N.J.
08543-9051 LAURIE A. HESSLEIN
388 GREENWICH ST.
NEW YORK, N.Y. 10013
LEE B. SPENCER, JR. DOUGLAS LOWE, ESQ. COPIES TO:
ONE SEAPORT PLAZA 130 LIBERTY STREET--29TH PIERRE DE SAINT PHALLE,
199 WATER STREET FLOOR ESQ.
NEW YORK, N.Y. 10292 NEW YORK, N.Y. 10006 450 LEXINGTON AVENUE
NEW YORK, N.Y. 10017
The issuer has registered an indefinite number of Units under the Securities Act
of 1933 pursuant to Rule 24f-2 and filed the Rule 24f-2 Notice for the most
recent fiscal year on February 17, 1995.
Check box if it is proposed that this filing will become effective on July 14,
1995 pursuant to paragraph (b) of Rule 485. / x /
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<PAGE>
<PAGE>
DEFINED
ASSET FUNDSSM
MUNICIPAL INVESTMENT
TRUST FUND
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MULTISTATE SERIES 7B
MARYLAND TRUST
MINNESOTA TRUST
NEW JERSEY TRUST (INSURED)
NORTH CAROLINA TRUST
(UNIT INVESTMENT TRUSTS)
PROSPECTUS, PART A
DATED JULY 14, 1995
SPONSORS:
Merrill Lynch,
Pierce, Fenner & Smith Incorporated
Smith Barney Inc.
Prudential Securities Incorporated
Dean Witter Reynolds Inc.
MONTHLY INCOME - TAX-FREE
This Defined Fund consists of separate underlying Trusts, each comprising a
fixed portfolio of Bonds issued by a single state and municipalities, public
authorities and similar entities thereof, or by certain U.S. territories or
possessions. The Fund is formed for the purpose of providing interest income
which in the opinion of counsel is, with certain exceptions, exempt from Federal
income taxes and from certain state and local taxes of the State for which a
Trust is named but may be subject to other state and local taxes. There is no
assurance that this objective will be met because it is subject to the
continuing ability of issuers of the Bonds to meet their principal and interest
requirements and of any insurors to meet their obligations under their insurance
policies. Furthermore, the market value of the underlying Bonds, and therefore
the value of the Units, will fluctuate with changes in interest rates and other
factors. In addition, the Bonds included in the New Jersey Trust are insured.
This insurance guarantees the timely payment of principal and interest on but
does not guarantee the market value of the Bonds or the value of the Units. As a
result of this insurance, Units of the New Jersey Trust are rated AAA by
Standard & Poor's Corporation.
Minimum Purchase: One Unit
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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.
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NOTE: PART A OF THIS PROSPECTUS MAY NOT BE DISTRIBUTED
UNLESS ACCOMPANIED BY PART B.
This Prospectus consists of two parts. The first includes an Investment Summary
and certified financial statements of the Fund, including the related portfolio;
the second contains a general summary of the Fund.
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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 $95 billion sponsored since 1971. Each Defined Fund is a
portfolio of preselected securities. The portfolio is divided into 'units'
representing equal shares of the underlying assets. Each unit receives an equal
share of income and principal distributions.
With Defined Asset Funds you know in advance what you are investing in and that
changes in the portfolio are limited. Most defined bond funds pay interest
monthly and repay principal as bonds are called, redeemed, sold or as they
mature. Defined equity funds offer preselected stock portfolios with defined
termination dates.
Your financial advisor can help you select a Defined Fund to meet your personal
investment objectives. Our size and market presence enable us to offer a wide
variety of investments. Defined Funds are available in the following types of
securities: municipal bonds, corporate bonds, government bonds, utility stocks,
growth stocks, even international securities denominated in foreign currencies.
Termination dates are as short as one year or as long as 30 years. Special funds
are available for investors seeking extra features: insured funds, double and
triple tax-free funds, and funds with 'laddered maturities' to help protect
against rising interest rates. Defined Funds are offered by prospectus only.
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CONTENTS
Investment Summary.......................................... A-3
Accountants' Opinion Relating to the Fund................... D-1
Statements of Condition and Portfolios...................... D-2
A-2
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DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES 7B
INVESTMENT SUMMARY
AS OF APRIL 30, 1995, THE EVALUATION DATE
MARYLAND MINNESOTA
TRUST TRUST
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FACE AMOUNT OF
BONDS(a)--...............$ 3,005,000 $ 3,050,000
NUMBER OF UNITS--........ 3,081 3,102
FACE AMOUNT OF BONDS PER
UNIT.....................$ 975.33 $ 983.23
FRACTIONAL UNDIVIDED
INTEREST IN TRUST
REPRESENTED BY EACH
UNIT-- 1/3,081st 1/3,102nd
PUBLIC OFFERING PRICE
Aggregate bid side
evaluation of Bonds......$ 3,215,524 $ 3,197,206
--------------- ---------------
Divided by Number of
Units..................$ 1,043.66 $ 1,030.69
Plus sales charge of
4.728% and 3.665% of
Public Offering Price
(4.963% and 3.805% of
net amount invested
in Bonds)(b) for the
Maryland and
Minnesota Trusts,
respectively......... 51.80 39.22
--------------- ---------------
Public Offering Price
per Unit.............$ 1,095.46 $ 1,069.91
(plus cash (plus cash
adjustments and adjustments and
accrued accrued
interest)(c) interest)(c)
SPONSORS' REPURCHASE
PRICE AND
REDEMPTION PRICE PER
UNIT...................$ 1,043.66 $ 1,030.69
(based on bid side (plus cash (plus cash
evaluation of Bonds) adjustments and adjustments and
($51.80 and $39.22 per accrued accrued
Unit less than Public interest)(c) interest)(c)
Offering Price) for the
Maryland and Minnesota
Trusts, respectively.
PREMIUM AND DISCOUNT
ISSUES IN PORTFOLIO
Face Amount of Bonds
with bid side
evaluation:
over par-- 100% 84%
at a discount from par-- -- 16%
CALCULATION OF ESTIMATED
NET ANNUAL INTEREST
RATE PER UNIT (based on
face amount per Unit)
Annual interest rate
per Unit............... 7.127% 7.030%
Less estimated annual
expenses per Unit
expressed as a
percentage........... .195% .226%
--------------- ---------------
Estimated net annual
interest rate per
Unit................. 6.932% 6.804%
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DAILY RATE AT WHICH
ESTIMATED NET
INTEREST ACCRUES PER
UNIT..................... .0192% .0189%
MONTHLY INCOME
DISTRIBUTIONS
Estimated net annual
interest rate per
Unit times face
amount per Unit......$ 67.61 $ 66.90
Divided by 12..........$ 5.63 $ 5.57
TRUSTEE'S ANNUAL FEE AND
EXPENSES PER UNIT(d)
(see Fund Expenses in
Part B)................$ 1.91 $ 2.23
FACE AMOUNT OF BONDS ON
DATE OF DEPOSIT..........$ 3,225,000 $ 3,350,000
MINIMUM VALUE OF TRUST
Trust may be terminated
if value of the Trust
is less than 40% of
Face Amount of Bonds
on the dates of their
deposit. On the
Evaluation Date each
Trust was valued at
the following
percentage of Face
Amount of Bonds on
the dates of their
deposit.............. 99% 95%
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(a) Cost of Bonds is set forth under each Portfolio.
(b) This is the maximum Effective Sales Charge on the date stated. The
sales charge will vary depending on the maturities of the underlying Bonds and
will be reduced on a graduated scale for purchases of 250 or more Units (see How
To Buy Units in Part B). Any resulting reduction in the Public Offering Price
will increase the effective returns 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 Trust (see Statements of Condition) 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 in the Capital Account not
allocated to the purchase of specific Bonds (see How To Buy Units and How To
Sell Units in Part B).
(d) Of this figure, the Trustee receives annually for its service as
Trustee, $0.72 per $1,000 face amount of Bonds. The Trustee's Annual Fee and
Expenses also includes the Portfolio Supervision Fee and Evaluator's Fee set
forth herein (see Fund Expenses in Part B).
A-3
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DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES 7B
INVESTMENT SUMMARY AS OF THE EVALUATION DATE (CONTINUED)
MARYLAND MINNESOTA
TRUST TRUST
-------------- --------------
NUMBER OF ISSUERS IN
PORTFOLIO-- 8 8
NUMBER OF ISSUES IN
PORTFOLIO-- 10 9
NUMBER OF ISSUES
BY
SOURCE OF
REVENUE:
General Obligation-- 1 --
Hospital/Health Care
Facility-- 2 --
Housing-- 2 1
Industrial Development
Revenue-- -- 1(a)
University/College-- 1 --
State/Local Municipal
Utility-- 1 2
Refunded Bonds-- 3 5
NUMBER OF ISSUES RATED BY(b)
STANDARD &
POOR'S/RATING-- AAA-- 5 4
AA-- 2 1
A-- 1 2
MOODY'S/RATING(c)-- Aaa -- 1
Aa-- 2 --
A-- -- 1
RANGE OF MATURITIES......... 2009-2019 2011-2017
CONCENTRATIONS(d) EXPRESSED
AS PERCENTAGE OF AGGREGATE
FACE AMOUNT OF PORTFOLIO:
Hospital/Health Care
Facility.................. 33% --
Refunded Bonds............ -- 54%
PERCENTAGE OF AGGREGATE FACE
AMOUNT OF PORTFOLIO
COMPRISED OF:
Issuers located in Puerto
Rico...................... 8% 7%
PERCENTAGE OF AGGREGATE FACE
AMOUNT OF PORTFOLIO BACKED
BY INSURANCE(e)............. 42% 35%
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(a) This industrial development revenue bond is issued on behalf of a
hospital/health care facility.
(b) The ratings assigned by the bond rating agencies may change from time
to time. Certain of the ratings may be provisional or conditional. See
Description of Ratings in Part B.
(c) A Moody's rating is included only if Standard & Poor's has not rated
an issue; this rating has been furnished by the Evaluator but not confirmed by
Moody's.
(d) A Fund is considered to be 'concentrated' in a category when the
Bonds in that category constitute 25% or more of the aggregate face amount of
the Portfolio. See Risk Factors in Part B for a brief description of certain
investment risks relating to these types of Bonds.
(e) See Risk Factors--Bonds Backed by Letters of Credit or Insurance in
Part B.
A-4
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DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES 7B
INVESTMENT SUMMARY AS OF THE EVALUATION DATE (CONTINUED)
NEW JERSEY NORTH CAROLINA
TRUST TRUST
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FACE AMOUNT OF BONDS(a)--...$ 3,025,000 $ 2,885,000
NUMBER OF UNITS............. 3,050 2,958
FACE AMOUNT OF BONDS PER
UNIT........................$ 991.80 $ 975.32
FRACTIONAL UNDIVIDED
INTEREST IN TRUST
REPRESENTED BY EACH UNIT-- 1/3,050th 1/2,958th
PUBLIC OFFERING PRICE
Aggregate bid side
evaluation of Bonds.........$ 3,209,792 $ 3,006,609
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Divided by Number of
Units.....................$ 1,052.39 $ 1,016.43
Plus sales charge of
4.338% and 4.482% of
Public Offering Price
(4.535% and 4.693% of
net amount invested in
Bonds)(b) for the New
Jersey and North
Carolina Trusts,
respectively................ 47.73 47.70
-------------- --------------
Public Offering Price per
Unit......................$ 1,100.12 $ 1,064.13
(plus cash (plus cash
adjustments adjustments
and accrued and accrued
interest)(c) interest)(c)
SPONSORS' REPURCHASE PRICE
AND
REDEMPTION PRICE PER
UNIT......................$ 1,052.39 $ 1,016.43
(based on bid side (plus cash (plus cash
evaluation of Bonds) adjustments adjustments
($47.73 and $47.70 per and accrued and accrued
Unit less than Public interest)(c) interest)(c)
Offering Price) for the
New Jersey and North
Carolina Trusts,
respectively.
PREMIUM AND DISCOUNT ISSUES
IN PORTFOLIO
Face Amount of Bonds with
bid side evaluation:
over par-- 83% 83%
at a discount from par-- 17% 17%
CALCULATION OF ESTIMATED NET
ANNUAL INTEREST RATE PER
UNIT (based on face amount
per Unit)
Annual interest rate per
Unit...................... 7.077% 7.043%
Less estimated annual
expenses per Unit
expressed as a
percentage.............. .198% .200%
-------------- --------------
Estimated net annual
interest rate per
Unit.................... 6.879% 6.843%
-------------- --------------
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DAILY RATE AT WHICH
ESTIMATED NET INTEREST
ACCRUES PER UNIT............ .0191% .0190%
MONTHLY INCOME DISTRIBUTIONS
Estimated net annual
interest rate per Unit
times face amount per
Unit....................$ 68.23 $ 66.75
Divided by 12.............$ 5.68 $ 5.56
TRUSTEE'S ANNUAL FEE AND
EXPENSES PER UNIT(d) (see
Fund Expenses in Part
B)........................$ 1.97 $ 1.96
FACE AMOUNT OF BONDS ON DATE
OF DEPOSIT................$ 3,250,000 $ 3,200,000
MINIMUM VALUE OF TRUST
Trust may be terminated if
value of the Trust is
less than 40% of Face
Amount of Bonds on the
dates of their deposit.
On the Evaluation Date
each Trust was valued at
the following percentage
of Face Amount of Bonds
on the dates of their
deposit................. 98% 93%
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(a) Cost of Bonds is set forth under each Portfolio.
(b) This is the maximum Effective Sales Charge on the date stated. The
sales charge will vary depending on the maturities of the underlying Bonds and
will be reduced on a graduated scale for purchases of 250 or more Units (see How
To Buy Units in Part B). Any resulting reduction in the Public Offering Price
will increase the effective returns 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 Trust (see Statements of Condition) 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 in the Capital Account not
allocated to the purchase of specific Bonds (see How To Buy Units and How To
Sell Units in Part B).
(d) Of this figure, the Trustee receives annually for its service as
Trustee, $0.72 per $1,000 face amount of Bonds. The Trustee's Annual Fee and
Expenses also includes the Portfolio Supervision Fee and Evaluator's Fee set
forth herein (see Fund Expenses in Part B).
A-5
<PAGE>
DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES 7B
INVESTMENT SUMMARY AS OF THE EVALUATION DATE (CONTINUED)
NEW JERSEY NORTH CAROLINA
TRUST TRUST
-------------- --------------
NUMBER OF ISSUERS IN
PORTFOLIO-- 7 7
NUMBER OF ISSUES IN
PORTFOLIO-- 7 9
NUMBER OF ISSUES BY
SOURCE OF
REVENUE:
General Obligation-- 1 --
Hospital/Health Care
Facility-- 1 1
Housing-- 1 1
Industrial Development
Revenue-- 1(a) --
State/Local Municipal
Utility-- -- 3
Refunded Bonds-- 3 4
NUMBER OF ISSUES RATED BY(b)
STANDARD &
POOR'S/RATING-- AAA-- 7(c) 3
A-- -- 6
RANGE OF MATURITIES......... 2013-2021 2011-2022
CONCENTRATIONS(d) EXPRESSED
AS PERCENTAGE OF AGGREGATE
FACE AMOUNT OF PORTFOLIO:
State/Local Municipal
Utility................... -- 34%
Refunded Bonds............ 43% 35%
PERCENTAGE OF AGGREGATE FACE
AMOUNT OF PORTFOLIO
COMPRISED OF:
Issuers located in Puerto
Rico...................... -- 7%
PERCENTAGE OF AGGREGATE FACE
AMOUNT OF PORTFOLIO BACKED
BY INSURANCE(e)............. 100% 15%
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(a) This industrial development revenue bond is issued on behalf of a
corporate utility.
(b) The ratings assigned by the bond rating agencies may change from time
to time. Certain of the ratings may be provisional or conditional. See
Description of Ratings in Part B.
(c) All of the Bonds in this Trust are Insured as to scheduled payments
of principal and interest as a result of which Units of the Trust are rated AAA
by Standard & Poor's.
(d) A Fund is considered to be 'concentrated' in a category when the
Bonds in that category constitute 25% or more of the aggregate face amount of
the Portfolio. See Risk Factors in Part B for a brief description of certain
investment risks relating to these types of Bonds.
(e) See Risk Factors--Bonds backed by Letters of Credit or Insurance in
Part B.
A-6
<PAGE>
DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES 7B
INVESTMENT SUMMARY FOR EACH TRUST AS OF THE EVALUATION DATE (CONTINUED)
RECORD DAY
The 10th day of each month.
DISTRIBUTION DAY
The 25th day of each month.
MINIMUM CAPITAL DISTRIBUTION
No distribution need be made from Capital Account
if balance in Account is less than $5.00 per Unit.
INITIAL DATE OF DEPOSIT
May 23, 1990
PORTFOLIO SUPERVISION FEE(a)
Maximum of $0.35 per $1,000 face amount of underlying
Bonds (see Fund Expenses in Part B).
EVALUATOR'S FEE FOR EACH SERIES
Maximum of $13 (see Fund Expenses in Part B).
EVALUATION TIME
3:30 P.M. New York Time.
RISK FACTORS
Investors should consult Risk Factors in Part B for a general summary of
certain investment risks relating to the types of Bonds in the Portfolio. In
addition, following is a brief description of the factors which may affect the
financial condition of the applicable States represented in this Fund, together
with a summary of tax considerations relating to those States.
MARYLAND RISK FACTORS
The financial condition of the State of Maryland is impacted by various
economic, social and environmental conditions that affect the U.S. generally and
the Mid-Atlantic region in particular. Among others, changes in levels of
Federal funding and financial support of certain industries, as well as changes
in burdens created by Federal regulations, will affect the revenues generated by
Maryland businesses, and hence the levels of State tax revenues. Additionally,
limitations placed by the State's Constitution on the State and its local
governments covering income taxes, ad valorem taxes, bond indebtedness and other
matters, as well as various statutory limitations, may constrain the
revenue-generating capacity of the State and its local governments and,
therefore, the ability of the issuers of the Bonds to satisfy their obligations.
The economic vitality of the State and its various regions and, therefore,
the ability of the State and its local governments to satisfy the Bonds, are
affected by numerous factors. The Maryland economy has undergone and continues
to undergo a shift away from its historically significant manufacturing and
industrial base to a service-based economy, resulting in the loss of many
defense-and construction-related jobs. Also, cutbacks in Federal spending (such
as are projected for the near future) generally affect Maryland more than other
states, since many thousands of residents of the State work for the Federal
government and its agencies in and around Washington, D.C. Baltimore City and
certain other urban areas continue to experience decreases in population and an
erosion of the tax base necessary to provide essential services at current tax
rates.
General obligation bonds of the State are currently rated Aaa by Moody's
Investors Serivice and AAA by Standard & Poor's.
MARYLAND TAXES
In the opinion of Weinberg & Green LLC, Baltimore, Maryland, special
counsel on Maryland tax matters, under existing Maryland law:
1. The Maryland Trust will not be recognized as an association taxable
as a corporation, and the income of the Maryland Trust will be treated as
the income of the Holder. The Maryland Trust is not a 'financial
institution' subject to the Maryland Franchise Tax measured by net
earnings. The Maryland Trust is not subject to Maryland property taxes
imposed on the intangible personal property of certain corporations.
2. A Holder will not be required to include the Holder's share of the
earnings of, or distributions from, the Maryland Trust in the Holder's
Maryland taxable income to the extent that such earnings or distributions
represent interest excludable from gross income for federal income tax
purposes received by the Maryland Trust on obligations of the State of
Maryland, or the Government of Puerto Rico, or the Government of Guam and
their respective political subdivisions and authorities. Interest on Debt
Obligations is subject to the Maryland Franchise Tax imposed on 'financial
institutions' and measured by net earnings.
3. In the case of taxpayers who are individuals, Maryland presently
imposes an income tax on items of tax preference with reference to such
items as defined in the Internal Revenue Code, as amended, for purposes of
calculating the federal alternative minimum tax. Interest paid on certain
private activity bonds is a preference item for purposes of calculating the
federal alternative minimum tax. Accordingly, if the Maryland Trust holds
such bonds, 50% of the interest on such bonds in excess of a threshold
amount is taxable by Maryland.
4. A Holder may recognize taxable gain or loss, which will be capital
gain or loss except in the case of a dealer or a financial institution,
when the Holder disposes of all or part of the Holder's pro rata portion of
the Debt Obligations in the Maryland Trust. A Holder will be considered to
have disposed of all or part of the Holder's pro rata portion of each Debt
Obligation when the Holder sells or redeems all or some of the Holder's
Units. A Holder will also be considered to have disposed of all or part of
the Holder's pro rata portion of a Debt Obligation when all or part of the
Debt Obligation is disposed of by the Maryland Trust or is redeemed or paid
at matuity. Capital gains included in the gross income of Holders for
federal income
- ---------------
(a) 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 Unit (see Fund Expenses in Part B).
A-7
<PAGE>
DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES 7B
tax purposes may be subtracted from income for Maryland income tax purposes
only to the extent that the gain is derived from the disposition of Debt
Obligations issued by the State of Maryland and its political subdivisions.
Profits realized on the sale or exchange of Debt Obligations are subject to
the Maryland Franchise Tax imposed on 'financial institutions' and measured
by net earnings.
5. Units of the Maryland Trust will be subject to Maryland inheritance
and estate tax only if held by Maryland residents.
6. Neither the Debt Obligations nor the Units will be subject to
Maryland personal property tax.
7. The sales of Units in Maryland or the holding of Units in Maryland
will not be subject to Maryland Sales or Use Tax.
MINNESOTA RISK FACTORS
The State of Minnesota and other governmental units and agencies, school
systems and entities dependent on government appropriations or economic activity
in Minnesota have, in recent years, suffered cash deficiencies and budgetary
difficulties due to changing economic conditions. Unfavorable economic trends,
such as a renewed recession, and other factors could adversely affect the Debt
Obligations and the value of the Portfolio.
Because the State is consitutionally required to maintain a balanced
budget, the Governor and legislature have frequently found it necessary to take
action to bring the revenues and expenditures of the State back into balance.
Budget proposals for the 1995-1997 biennium will confront the likelihood of
decreased federal aid for programs maintained by the State. Concerns have also
been raised regarding the cost of debt service and the capacity of the State to
authorize additional major bonding.
The outcome of litigation involving the State could also have an impact on
its budget.
General obligation bonds of the State are currently rated AA+ by a Standard
& Poor's, Aa1 by Moody's and AAA by Fitch.
MINNESOTA TAXES
In the opinion of Doherty, Rumble & Butler Professional Association,
Minneapolis, Minnesota, special counsel on Minnesota tax matters, under existing
Minnesota law:
The Minnesota Trust is not an association taxable as a corporation for
Minnesota income tax purposes. Minnesota imposes its income tax on the
taxable net income of individuals, estates and trusts resident in Minnesota
and on certain nonresident taxpayers having activities or contacts within
Minnesota. Taxable net income is the portion of a taxpayer's Federal
taxable income (subject to certain variations and determined pursuant to
the Internal Revenue Code as amended through December 31, 1993) which is
properly allocable to Minnesota. Exclusion from 'taxable net income' for
Minnesota income tax purposes for individuals, trusts and estates of
interest on most obligations of the State of Minnesota, its political and
governmental subdivisions, municipalities, and governmental agencies and
instrumentalities depends on the availability of a Federal exclusion.
Each Holder of Units in the Minnesota Trust which is an individual,
trust or estate resident in Minnesota will be treated as the owner of a
proportionate, undivided interest in the Minnesota Trust, and the income of
the Minnesota Trust will be treated as the income of such Holders for
Minnesota income tax purposes. Accordingly, interest on Debt Obligations
held by the Minnesota Trust which would be exempt from Federal and
Minnesota income taxation when paid directly to an individual, trust or
estate will be exempt from Minnesota income taxation with respect to such
Holders when received by the Minnesota Trust and distributions of the
proceeds of interest received by the Minnesota Trust on such Debt
Obligations will not be a taxable event under Minnesota law.
Holders of Units of the Minnesota Trust which are individuals, trusts or
estates resident in Minnesota will be required to recognize any taxable
gain or loss realized on the disposition of a Debt Obligation by the
Minnesota Trust (whether by sale, exchange, redemption or payment at
maturity) or upon the disposition by the Holder of Units.
Taxable income for corporations under Minnesota law is computed on the
basis of Federal law with certain modifications. Interest on bonds issued
by the State of Minnesota and its subdivisions, municipalities, agencies
and instrumentalities is generally not exempt from Minnesota taxes measured
by corporate income. Accordingly, no opinion is given with respect to the
Minnesota tax effects of an investment in the Minnesota Trust by
corporations.
The Units of the Minnesota Trust and any of the Debt Obligations held in
the Minnesota Trust are not subject to any property taxes imposed by
Minnesota or its state and local subdivisions. The Units of the Minnesota
Trust, however, will be subject to the Minnesota estate tax if held by an
individual who is domiciled in Minnesota at death. Investors should consult
with their own personal tax advisors concerning any potential Minnesota
estate tax liability.
NEW JERSEY RISK FACTORS
New Jersey and certain of its public authorities have in recent years
experienced financial difficulties and pressures to a significant degree.
Employment in manufacturing, wholesale and retail trade and construction have
been in decline although gains have been recorded in the services, government,
financial/insurance/real estate and tranportation/communication/public utilities
sectors. The economic recovery in New Jersey is likely to be slow and uneven
becasue some sectors, like commercial and industrial construction, suffer from
excess capacity, and even in rebounding sectors, employers are expected to be
cautious about hiring.
State appropriations of funds are distributed among a diverse group of
public recipients. In 1994, the largest state aid appropriation was provided for
local elementary and secondary education programs, followed by appropriations
for operation of the state government (including the State Legislature,
Judiciary and Executive
A-8
<PAGE>
DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES 7B
Office) and other programs including, among others, correctional facilities and
the State Police, higher education and environmental protection. The effect on
these appropriations and other State funding requirements of Governor Whitman's
1994 personal income tax rate reduction of 5% cannot yet be evaluated.
The primary method for State financing of capital projects is through the
sale of the general obligation bonds of the State. These bonds are backed by the
full faith and credit of the State. Tax revenues and certain other fees are
pledged to meet the principal and interest payments required to pay the debt
fully. With certain exceptions, no general obligation debt can be issued by the
State without prior voter approval.
General obligation bonds of New Jersey are currently rated Aa1 by Moody's
and AA+ by Standard & Poor's.
NEW JERSEY TAXES
In the opinion of Shanley & Fisher, P.C., Morristown, New Jersey, special
counsel on New Jersey tax matters, under existing New Jersey law:
1. The proposed activities of the Fund will not cause it to be subject to
the New Jersey Corporation Business Tax Act.
2. The income of the Fund will be treated as the income of individuals,
estates and trusts who are the investors in the Fund for purposes of the New
Jersey Gross Income Tax Act, and interest which is exempt from tax under the New
Jersey Gross Income Tax Act when received by the Fund will retain its status as
tax exempt in the hands of such investors. Gains arising from the sale or
redemption by an investor of his Units or from the sale or redemption by the
Fund of any Bond are exempt from taxation under the New Jersey Gross Income Tax
Act, as enacted and construed on the date hereof, to the extent such gains are
attributable to Bonds the interest on which is exempt from tax under the New
Jersey Gross Income Tax Act.
3. Units of the Fund may be subject, in the estates of New Jersey
residents, to taxation under the Transfer Inheritance Tax Law of the State of
New Jersey.
NORTH CAROLINA RISK FACTORS
The population, labor force, per capita income and North Carolina economy
has experienced general growth over the past 25 years. During the period from
1970 to 1980 the State increased from the twelfth to the tenth most populous
state in the nation. The population grew by approximately 13% from 1980 to 1990
(to 6,657,106 persons), with the State maintaining its ranking as tenth most
populous state. According to State figures, the population as of June 1994 was
7,023,663, an increase of 5.5% from the 1990 census figure. Notwithstanding its
rank in population size, North Carolina is primarily a rural state, having only
five municipalities with populations in excess of 100,000. During the period
1980 to 1994, the State labor force grew about 25% (from 2,855,200 to
3,560,000). Unemployment in the past several years has been below the national
average. Per capita income during the period 1985 to 1993 grew from $11,870 to
$18,702, an increase of 58%.
The current economic profile of the State consists of a combination of
industry, agriculture and tourism. As of June 1994 the State ranked tenth
nationally in non-agricultural employment and eighth in manufacturing
employment. As of 1993 the State ranked tenth in the nation in gross
agricultural income, of which nearly the entire amount was from commodities. In
1993 more than $8.3 billion was spent on tourism in the State, an amount that
exceeded gross agricultural income.
The labor force has undergone significant change during recent years as the
State has moved from an agricultural to a service and goods producing economy.
Those persons displaced by farm mechanization and farm consolidations have, in
large measure, sought and found employment in other pursuits. Due to the wide
dispersion of non-agricultural employment, the people have been able to
maintain, to a large extent, their rural habitation practices.
The diversity of agriculture in North Carolina and a continuing push in
marketing efforts have protected farm income from some of the wide variations
that have been experienced in other states where most of the agricultural
economy is dependent on a small number of agricultural commodities. Although
tobacco production is a single largest source of agricultural income (20% as of
1993), the poultry industry provided nearly 34% of total agricultural income in
1993 and pork production is growing (17% of gross agricultural income in 1993).
North Carolina is the third most diversified agricultural state in the nation.
Although the number of farms has been decreasing (about 19% in seven years), a
strong agribusiness sector supports farmers with farm inputs (fertilizer,
insecticide, pesticide and farm machinery) and processing of commodities
produced by farmers (vegetable canning and cigarette manufacturing).
The State constitution requires a balanced state budget. The general
economic recession of the late 1980's and early 1990's, and particularly the
reduced level of state tax revenue that resulted, caused the State to expend
nearly all of its retained surplus and to impose new taxes and expenditure
reductions in order to avoid a budget deficit. The State's actions helped
maintain a favorable rating for the State's debt obligations, although rating
agencies expressed concern about the effect, in the long term, of reductions in
infrastructure, evaluation and social development project spending that were
effected by the budget measures. North Carolina, like the nation generally, has
experienced economic recovery since 1991. Apparently due to both increased tax
and fee revenue and previously enacted spending reductions, the State had a
budget surplus of approximately $887 million at the end of fiscal 1993-94. After
review of the 1994-95 budget, the General Assembly approved allocations of most
of this surplus, allowing the reauthorization of some programs that had been
affected by the prior reductions, or different initiatives for economic
development, education, human services and environmental protection.
The General Assembly currently is considering a number of tax reduction
measures, and several state programs are being reviewed with respect to
continuation or funding level. The repeal of significant taxes, or the reduction
of tax rates, if not offset by increased tax revenue from greater economic
performance or by spending restrictions, could again put the State's fiscal
condition in distress and require corrective action. Similarly, any reductions
in spending on infrastructure, education or social development might have
adverse effects on
A-9
<PAGE>
DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES 7B
the economy of the State in the long term. Therefore, the consequences of any
legislative response to perceived public demand for reduced taxation and
government spending are uncertain. If the legislature's assumptions underlying
that response prove to be incorrect, the economy of the State and the fiscal
condition of State and local governments could be affected adversely.
It is expected that few, if any, Bonds in the Trust will be general
obligation bonds backed by the taxing power of the government. Most bonds are
expected to be revenue bonds payable exclusively from certain revenue-producing
governmental activities or from revenues generated by private entities. These
Bonds may be subject to particular risks that are not reflected in general
economic conditions.
General obligation bonds of the State of North Carolina currently are rated
Aaa by Moody's and AAA by Standard & Poor's.
NORTH CAROLINA TAXES
In the opinion of Hunton & Williams, Raleigh, North Carolina, special
counsel on North Carolina tax matters, under existing North Carolina law:
Upon the establishing of the North Carolina Trust and the Units thereunder:
1. The North Carolina Trust is not an 'association' taxable as a
corporation under North Carolina law with the result that income of the
North Carolina Trust will be deemed to be income of the Holders.
2. Interest on the Bonds that is exempt from North Carolina income tax
when received by the North Carolina Trust will retain its tax-exempt status
when received by the Holders.
3. Holders will realize a taxable event when the North Carolina Trust
disposes of a Bond or when a Holder redeems or sells his Units, and taxable
gains for federal income tax purposes may result in gain taxable as
ordinary income for North Carolina income tax purposes. However, when a
Bond has been issued under an act of the North Carolina General Assembly
that provides that all income from such Bond, including any profit received
by the North Carolina Trust will retain its tax-exempt status in the hands
of the Holders.
4. Holders must amortize their proportionate shares of any premium on a
Bond. Amortization for each taxable year is achieved by lowering the
Holder's basis (as adjusted) in his Units, with no deduction against gross
income for the year.
5. In order for the Units to be exempt from the North Carolina tax on
intangible personal property: (a) at all times either (i) the corpus of the
North Carolina Trust must be composed entirely of North Carolina Bonds, or
pending distribution, amounts received on the sale, redemption or maturity
of the North Carolina Bonds, or (ii) (if Puerto Rico or Guam Bonds are
included in the Trust) at least 80% of the fair market value of the Bonds,
excluding amounts received on the sale, redemption or maturity of the
Bonds, must be attributable to the fair market value of the North Carolina
Bonds; and (b) the Trustee periodically must supply to the North Carolina
Department of Revenue at such times as required by the Department of
Revenue a complete description of the North Carolina Trust and also the
name, description and value of the obligations held in the corpus of the
North Carolina Trust.
The opinion of Hunton & Williams is based, in part, on the opinion of Davis
Polk & Wardwell regarding federal tax status and upon current interpretations
and rulings of the North Carolina Department of Revenue, which are subject to
change.
RETURN CALCULATIONS--
Estimated Current Return shows the estimated annual cash to be received
from interest-bearing Bonds in the Portfolio (net of estimated annual expenses)
divided by the Public Offering Price (including the maximum sales charge).
Estimated Long Term Return is a measure of the estimated return over the
estimated life of the Fund. This represents an average of the yields to maturity
(or in certain cases, to an earlier call date) of the individual Bonds in the
Portfolio, adjusted to reflect the maximum sales charge and estimated expenses.
The average yield for the Portfolio is derived by weighting each Bond's yield by
its market value and the time remaining to the call or maturity date, depending
on how the Bond is priced. Unlike Estimated Current Return, Estimated Long Term
Return takes into account maturities, discounts and premiums of the underlying
Bonds.
No return estimate can be predictive of your actual return because returns
will vary with purchase price (including sales charges), how long units are
held, changes in Portfolio composition, changes in interest income and changes
in fees and expenses. Therefore, Estimated Current Return and Estimated Long
Term Return are designed to be comparative rather than predictive. A yield
calculation which is more comparable to an individual Bond may be higher or
lower than Estimated Current Return or Estimated Long Term Return which are more
comparable to return calculations used by other investment products.
A-10
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (MARYLAND, MINNESOTA, NEW JERSEY
AND NORTH CAROLINA TRUSTS)
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Defined Asset Funds - Municipal Investment Trust Fund,
Multistate Series - 7B (Maryland, Minnesota, New Jersey
and North Carolina Trusts):
We have audited the accompanying statements of condition of Defined
Asset Funds - Municipal Investment Trust Fund, Multistate Series - 7B,
(Maryland, Minnesota, New Jersey and North Carolina Trusts) including
the portfolios, as of April 30, 1995 and the related statements of
operations and of changes in net assets for the years ended April 30,
1995, 1994 and 1993. These financial statements are the responsibility
of the Trustee. 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 April 30, 1995, as shown in such portfolios, 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 - Municipal Investment Trust Fund, Multistate
Series - 7B, (Maryland, Minnesota, New Jersey and North Carolina
Trusts) at April 30, 1995 and the results of their operations and
changes in their net assets for the above-stated years in conformity
with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
June 19, 1995
D - 1
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (MARYLAND TRUST)
STATEMENT OF CONDITION
AS OF APRIL 30, 1995
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $2,961,178) (Note 1).................... $3,215,524
Accrued interest receivable..................... 47,575
Cash............................................ 1,285
______________
Total trust property.................. $3,264,384
==============
NET ASSETS, REPRESENTED BY:
3,081 units of fractional undivided
interest outstanding (Note 3)................. $3,215,537
Undistributed net investment income............. 48,847
____________
$3,264,384
==============
UNIT VALUE ($3,264,384/3,081 units)............... $1,059.52
==============
See Notes to Financial Statements.
D - 2
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (MARYLAND TRUST)
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
............Years Ended April 30,.........
1995 1994 1993
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income................................. $215,993 $222,494 $228,968
Trustee's fees and expenses..................... (5,507) (5,537) (5,453)
Sponsors' fees ................................. (806) (806) (806)
__________________________________________
Net investment income........................... 209,680 216,151 222,709
__________________________________________
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain on securities sold or
redeemed...................................... 232 25,532
Unrealized appreciation (depreciation)
of investments................................ 9,610 (119,198) 198,581
__________________________________________
Net realized and unrealized gain (loss) on
investments................................... 9,842 (93,666) 198,581
__________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................. $219,522 $122,485 $421,290
==========================================
</TABLE>
See Notes to Financial Statements.
D - 3
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (MARYLAND TRUST)
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
............Years Ended April 30,.........
1995 1994 1993
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income........................... $ 209,680 $ 216,151 $ 222,709
Realized gain on securities sold
or redeemed.................................. 232 25,532
Unrealized appreciation (depreciation) of
investments.................................. 9,610 (119,198) 198,581
__________________________________________
Net increase in net assets resulting
from operations.............................. 219,522 122,485 421,290
__________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income.......................................... (209,600) (215,736) (222,622)
Principal....................................... (43,350) (31,369)
__________________________________________
Total distributions............................. (252,950) (247,105) (222,622)
__________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of 144
units........................................... (161,254)
__________________________________________
NET INCREASE (DECREASE) IN NET ASSETS............. (33,428) (285,874) 198,668
NET ASSETS AT BEGINNING OF YEAR................... 3,297,812 3,583,686 3,385,018
__________________________________________
NET ASSETS AT END OF YEAR......................... $3,264,384 $3,297,812 $3,583,686
==========================================
PER UNIT:
Income distributions during year................ $68.03 $68.35 $69.03
==========================================
Principal distributions during year............. $14.07 $9.88
============================
Net asset value at end of year.................. $1,059.52 $1,070.37 $1,111.22
==========================================
TRUST UNITS OUTSTANDING AT END OF YEAR............ 3,081 3,081 3,225
==========================================
</TABLE>
See Notes to Financial Statements.
D - 4
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (MARYLAND TRUST)
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) The Fund is not subject to income taxes. Accordingly, no provision for
such taxes is required.
(c) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Administration of
the Fund - Accounts and Distributions" in this Prospectus, Part B.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 3,081 units at Date of Deposit............................................. $3,170,613
Less sales charge.................................................................. 142,681
_______________
Net amount applicable to Holders................................................... 3,027,932
Redemptions of units - net cost of 144 units redeemed less redemption
amounts.......................................................................... (17,786)
Realized gain on securities sold or redeemed....................................... 25,764
Principal distributions............................................................ (74,719)
Unrealized appreciation of investments............................................. 254,346
_______________
Net capital applicable to Holders.................................................. $3,215,537
===============
</TABLE>
4. INCOME TAXES
As of April 30, 1995, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $254,346, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $2,961,178 at April 30, 1995.
D - 5
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B
PORTFOLIO OF THE MARYLAND TRUST
AS OF APRIL 30, 1995
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
__________ _________ ______ _______ _____________ _____________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 Maryland Health and Higher Educational AAA $ 500,000 7.500% 2019 07/01/99 $ 512,530 $544,765
Fac. Auth., Rev. Bonds, Franklin @ 102.000
Square Hospital Issue, Series 1989
(MBIA Ins.) (5)
2 Maryland Health and Higher Educational AA- 500,000 7.375 2009 11/15/98 504,520 541,100
Facilities Authority, Refunding Revenue @ 102.000
Bonds, The Johns Hopkins Hospital Issue,
Series 1988
3 Maryland Health and Higher Educational AAA 250,000 7.000 2019(6) 07/01/00 245,407 276,520
Facilities Auth., Revenue Bonds, Sinai @ 102.000
Hosp. of Baltimore Issue, Series 1990
(AMBAC Ins.) (5)
4 State of Maryland, Community Dev. Adm., Aa(m) 465,000 7.400 2017 04/01/99 462,251 489,464
Dept. of Housing and Community Dev., @ 102.000
Single Family Program Bonds, 1989 First
Series
5 Baltimore County, Maryland, Certificates AAA 110,000 7.200 2010(6) 04/01/00 110,000 122,219
of Participation, Series 1990 C (MBIA @ 102.000
Ins.) (5) 390,000 7.200 2010 04/01/00 390,000 420,876
@ 102.000
6 Montgomery County, Maryland, Housing Aa(m) 120,000 7.375 2017 07/01/98 119,400 124,801
Opportunities, Commission of Montgomery @ 102.000
County, Single Family Mortgage Revenue
Bonds, 1988 Series B
7 University of Maryland, System Auxiliary AA+ 415,000 6.000 2009 10/01/99 371,317 419,947
Facility and Tuition Revenue Bonds, 1989 @ 100.000
Series B
</TABLE>
D - 6
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B
PORTFOLIO
AS OF APRIL 30, 1995
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
__________ _________ ______ _______ _____________ _____________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
8 Puerto Rico Electric Power Auth., Power AAA $ 145,000 7.125% 2014(6) 07/01/99 $ 139,742 $ 159,042
Revenue Refunding Bonds, Series N @ 101.500
A- 110,000 7.125 2014 07/01/99 106,011 116,790
@ 101.500
__________ __________ ___________
TOTAL $3,005,000 $2,961,178 $3,215,524
========== ========== ===========
</TABLE>
See Notes to Portfolios on Pages D - 23 and D - 24.
D - 7
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (MINNESOTA TRUST)
STATEMENT OF CONDITION
AS OF APRIL 30, 1995
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $2,948,828) (Note 1).................... $3,197,206
Accrued interest receivable..................... 67,174
______________
Total trust property.................. 3,264,380
LESS LIABILITY - Advance from Trustee............. 16,882
______________
NET ASSETS, REPRESENTED BY:
3,102 units of fractional undivided
interest outstanding (Note 3)................. $3,199,506
Undistributed net investment income............. 47,992
____________
$3,247,498
==============
UNIT VALUE ($3,247,498/3,102 units)............... $1,046.90
==============
See Notes to Financial Statements.
D - 8
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (MINNESOTA TRUST)
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
............Years Ended April 30,.........
1995 1994 1993
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income................................. $221,246 $233,680 $234,542
Trustee's fees and expenses..................... (5,717) (5,826) (5,543)
Sponsors' fees ................................. (833) (838) (838)
__________________________________________
Net investment income........................... 214,696 227,016 228,161
__________________________________________
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain on securities sold or
redeemed...................................... 19,199 4,606 30
Unrealized appreciation (depreciation)
of investments................................ (36,806) (83,249) 209,296
__________________________________________
Net realized and unrealized gain (loss) on
investments................................... (17,607) (78,643) 209,326
__________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................. $197,089 $148,373 $437,487
==========================================
</TABLE>
See Notes to Financial Statements.
D - 9
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (MINNESOTA TRUST)
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
............Years Ended April 30,.........
1995 1994 1993
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income........................... $ 214,696 $ 227,016 $ 228,161
Realized gain on securities sold
or redeemed.................................. 19,199 4,606 30
Unrealized appreciation (depreciation) of
investments.................................. (36,806) (83,249) 209,296
__________________________________________
Net increase in net assets resulting
from operations.............................. 197,089 148,373 437,487
__________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income.......................................... (214,698) (226,626) (228,000)
Principal....................................... (11,060) (29,983) (20,000)
__________________________________________
Total distributions............................. (225,758) (256,609) (248,000)
__________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of 205
and 43 units, respectively..................... (213,265) (45,522)
__________________________________________
NET INCREASE (DECREASE) IN NET ASSETS............. (241,934) (153,758) 189,487
NET ASSETS AT BEGINNING OF YEAR................... 3,489,432 3,643,190 3,453,703
__________________________________________
NET ASSETS AT END OF YEAR......................... $3,247,498 $3,489,432 $3,643,190
==========================================
PER UNIT:
Income distributions during year................ $67.01 $67.65 $68.06
==========================================
Principal distributions during year............. $3.52 $8.95 $5.97
==========================================
Net asset value at end of year.................. $1,046.90 $1,055.17 $1,087.52
==========================================
TRUST UNITS OUTSTANDING AT END OF YEAR............ 3,102 3,307 3,350
==========================================
</TABLE>
See Notes to Financial Statements.
D - 10
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (MINNESOTA TRUST)
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) The Fund is not subject to income taxes. Accordingly, no provision for
such taxes is required.
(c) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Administration of
the Fund - Accounts and Distributions" in this Prospectus, Part B.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 3,102 units at Date of Deposit............................................. $3,145,231
Less sales charge.................................................................. 141,544
_______________
Net amount applicable to Holders................................................... 3,003,687
Redemptions of units - net cost of 248 units redeemed less redemption
amounts.......................................................................... (15,440)
Realized gain on securities sold or redeemed....................................... 23,924
Principal distributions............................................................ (61,043)
Unrealized appreciation of investments............................................. 248,378
_______________
Net capital applicable to Holders.................................................. $3,199,506
===============
</TABLE>
4. INCOME TAXES
As of April 30, 1995, unrealized appreciation of investments, based on cost
for Federal income tax purposes, aggregated $248,378, all of which related
to appreciated securities. The cost of investment securities for Federal
income tax purposes was $2,948,828 at April 30, 1995.
D - 11
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B
PORTFOLIO OF THE MINNESOTA TRUST
AS OF APRIL 30, 1995
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
__________ _________ ______ _______ _____________ _____________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 Minnesota Housing Finance Agency, Single AA+ $ 275,000 7.300% 2017 07/01/99 $ 273,371 $ 288,852
Family Mortgage Bonds, 1989 Series B @ 102.000
2 City of Minneapolis, MN, Hospital Fac. Aaa(m) 500,000 7.875 2014(6) 12/01/97 517,735 546,500
Refunding Revenue Bonds, (Lifespan Inc. @ 102.000
Issue), Series 1988-A
3 City of Minneapolis, MN, The Housing and AAA 500,000 7.400 2011 08/15/00 505,930 550,830
Redev. Auth. of The City of Saint Paul, @ 102.000
MN, Hlth. Care Sys. Rev. Bonds (Health One
Obligated Group) Ser. 1990 (MBIA Ins.) (5)
4 Minneapolis, Minnesota, Special School A1(m) 500,000 7.375 2015(6) 02/01/98 502,100 532,300
District Number 1, Certificates of @ 100.000
Participation, Series 1990
5 Northern Municipal Power Agency, MN, AAA 100,000 7.250 2017(6) 01/01/99 100,355 109,514
Electric System Revenue Bonds, Refunding @ 102.000
Series 1989 A (AMBAC Ins.) (5)
6 Southern Minnesota Municipal Power Agency AAA 455,000 6.750 2013(6) 01/01/96 432,259 470,211
Power Supply System Revenue Bonds Series @ 102.000
1986 A (MBIA Ins.) (5)
7 Western Minnesota Municipal Power Agency, A 500,000 5.500 2015 01/01/97 405,055
462,610
Power Supply Revenue Refunding Bonds, 1987 @ 100.000
Series A
8 Puerto Rico Electric Power Authority, Power AAA 80,000 7.125 2014(6) 07/01/99 77,099 87,747
Revenue Refunding Bonds Series N @ 101.500
A- 140,000 7.125 2014 07/01/99 134,924 148,642
@ 101.500
__________ __________ __________
TOTAL $3,050,000 $2,948,828 $3,197,206
========== ========== ==========
</TABLE>
See Notes to Portfolios on Pages D - 23 and D - 24.
D - 12
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (NEW JERSEY TRUST)
STATEMENT OF CONDITION
AS OF APRIL 30, 1995
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $2,971,263) (Note 1).................... $3,209,792
Accrued interest receivable..................... 64,280
______________
Total trust property.................. 3,274,072
LESS LIABILITY - Advance from Trustee............. 10,639
______________
NET ASSETS, REPRESENTED BY:
3,050 units of fractional undivided
interest outstanding (Note 3)................. $3,214,804
Undistributed net investment income............. 48,629
____________
$3,263,433
==============
UNIT VALUE ($3,263,433/3,050 units)............... $1,069.98
==============
See Notes to Financial Statements.
D - 13
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (NEW JERSEY TRUST)
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
............Years Ended April 30,.........
1995 1994 1993
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income................................. $217,113 $226,341 $230,317
Trustee's fees and expenses..................... (5,583) (5,565) (5,445)
Sponsors' fees ................................. (813) (813) (813)
__________________________________________
Net investment income........................... 210,717 219,963 224,059
__________________________________________
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain (loss) on securities sold or
redeemed...................................... 4,128 15,688 (100)
Unrealized appreciation (depreciation)
of investments................................ (9,346) (109,536) 195,056
__________________________________________
Net realized and unrealized gain (loss) on
investments................................... (5,218) (93,848) 194,956
__________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................. $205,499 $126,115 $419,015
==========================================
</TABLE>
See Notes to Financial Statements.
D - 14
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (NEW JERSEY TRUST)
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
............Years Ended April 30,.........
1995 1994 1993
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income........................... $ 210,717 $ 219,963 $ 224,059
Realized gain (loss) on securities sold
or redeemed.................................. 4,128 15,688 (100)
Unrealized appreciation (depreciation) of
investments.................................. (9,346) (109,536) 195,056
__________________________________________
Net increase in net assets resulting
from operations.............................. 205,499 126,115 419,015
__________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income.......................................... (210,822) (219,568) (223,957)
Principal....................................... (5,277) (19,988)
__________________________________________
Total distributions............................. (216,099) (219,568) (243,945)
__________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of 70,
and 130 units, respectively..................... (71,775) (146,522)
__________________________________________
NET INCREASE (DECREASE) IN NET ASSETS............. (82,375) (239,975) 175,070
NET ASSETS AT BEGINNING OF YEAR................... 3,345,808 3,585,783 3,410,713
__________________________________________
NET ASSETS AT END OF YEAR......................... $3,263,433 $3,345,808 $3,585,783
==========================================
PER UNIT:
Income distributions during year................ $68.21 $68.24 $68.91
==========================================
Principal distributions during year............. $1.73 $6.15
============== ============
Net asset value at end of year.................. $1,069.98 $1,072.37 $1,103.32
==========================================
TRUST UNITS OUTSTANDING AT END OF YEAR............ 3,050 3,120 3,250
==========================================
</TABLE>
See Notes to Financial Statements.
D - 15
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (NEW JERSEY TRUST)
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) The Fund is not subject to income taxes. Accordingly, no provision for
such taxes is required.
(c) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Administration of
the Fund - Accounts and Distributions" in this Prospectus, Part B.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 3,050 units at Date of Deposit............................................. $3,142,247
Less sales charge.................................................................. 141,398
_______________
Net amount applicable to Holders................................................... 3,000,849
Redemptions of units - net cost of 200 units redeemed less redemption
amounts.......................................................................... (19,025)
Realized gain on securities sold or redeemed....................................... 19,716
Principal distributions............................................................ (25,265)
Unrealized appreciation of investments............................................. 238,529
_______________
Net capital applicable to Holders.................................................. $3,214,804
===============
</TABLE>
4. INCOME TAXES
As of April 30, 1995, unrealized appreciation of investments, based on cost
for Federal income tax purposes, aggregated $238,529, all of which related
to appreciated securities. The cost of investment securities for Federal
income tax purposes was $2,971,263 at April 30, 1995.
D - 16
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B
PORTFOLIO OF THE NEW JERSEY TRUST (INSURED)
AS OF APRIL 30, 1995
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities (4) Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost
Value(2)
__________ _________ ______ _______ _____________ _____________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 New Jersey Economic Dev. Auth. AAA $ 555,000 7.000% 2019 01/01/97 $ 544,855 $ 581,141
Water Facilities Rev. Refdg. Bonds @ 102.000
(Hackensack Water Company Project-
1986 Series A) (AMBAC Ins.)
2 New Jersey Health Care Fac. Finance AAA 500,000 6.000 2019 07/01/99 432,655 488,115
Authority Rev. Bonds, Comm. Medical @ 100.000
Center Iss. Series D (MBIA Ins.)
3 New Jersey Health Care Fac. Finance AAA 365,000 7.250 2013(6) 07/01/97 367,722 392,802
Auth. Rev. Bonds, St. Peter's Medical @ 102.000
Center Iss., Series D (MBIA Ins.)
4 New Jersey Housing and Mortgage Finance AAA 480,000 7.375 2017 10/01/99 482,400 506,880
Agency Home Buyer Revenue Bonds, 1989 @ 102.000
Series C (MBIA Ins.)
5 Belvidere New Jersey, General AAA 195,000 7.300 2014 12/01/99 197,501 211,850
Obligation Bonds (AMBAC Ins.) @ 102.000
6 Hoboken-Union City-Weehawken Sewerage AAA 430,000 7.250 2019(6) 08/01/99 431,565 475,799
Authority, New Jersey, Sewer Revenue Bonds @ 102.000
(Series 1989) (MBIA Ins.)
7 County of Hudson, NJ, Correctional AAA 500,000 7.600 2021(6) 12/01/98 514,565 553,205
Facility, Certificates of Participation, @ 102.000
Series 1988 (MBIA Ins.)
__________ __________ __________
TOTAL $3,025,000 $2,971,263 $3,209,792
========== ========== ==========
</TABLE>
See Notes to Portfolios on Pages D - 23 and D - 24.
D - 17
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (NORTH CAROLINA TRUST)
STATEMENT OF CONDITION
AS OF APRIL 30, 1995
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $2,799,605) (Note 1).................... $3,006,609
Accrued interest receivable..................... 48,265
Cash............................................ 277
______________
Total trust property.................. $3,055,151
==============
NET ASSETS, REPRESENTED BY:
2,958 units of fractional undivided
interest outstanding (Note 3)................. $3,006,633
Undistributed net investment income............. 48,518
____________
$3,055,151
==============
UNIT VALUE ($3,055,151/2,958 units)............... $1,032.84
==============
See Notes to Financial Statements.
D - 18
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (NORTH CAROLINA TRUST)
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
............Years Ended April 30,.........
1995 1994 1993
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income................................. $205,784 $207,225 $210,433
Trustee's fees and expenses..................... (5,476) (5,440) (5,294)
Sponsors' fees ................................. (751) (751) (800)
__________________________________________
Net investment income........................... 199,557 201,034 204,339
__________________________________________
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain on securities sold or
redeemed...................................... 3,953 325
Unrealized appreciation (depreciation)
of investments................................ (32,801) (71,876) 176,002
__________________________________________
Net realized and unrealized gain (loss) on
investments................................... (28,848) (71,876) 176,327
__________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................. $170,709 $129,158 $380,666
==========================================
</TABLE>
See Notes to Financial Statements.
D - 19
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (NORTH CAROLINA TRUST)
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
............Years Ended April 30,.........
1995 1994 1993
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income........................... $ 199,557 $ 201,034 $ 204,339
Realized gain on securities sold
or redeemed.................................. 3,953 325
Unrealized appreciation (depreciation) of
investments.................................. (32,801) (71,876) 176,002
__________________________________________
Net increase in net assets resulting
from operations.............................. 170,709 129,158 380,666
__________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income.......................................... (199,684) (200,394) (204,462)
Principal....................................... (4,910) (64,990)
__________________________________________
Total distributions............................. (204,594) (200,394) (269,452)
__________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of 55,
units.......................................... (54,982)
__________________________________________
NET INCREASE (DECREASE) IN NET ASSETS............. (88,867) (71,236) 111,214
NET ASSETS AT BEGINNING OF YEAR................... 3,144,018 3,215,254 3,104,040
__________________________________________
NET ASSETS AT END OF YEAR......................... $3,055,151 $3,144,018 $3,215,254
==========================================
PER UNIT:
Income distributions during year................ $66.68 $66.51 $67.86
==========================================
Principal distributions during year............. $1.66 $21.57
=============== ==========
Net asset value at end of year.................. $1,032.84 $1,043.48 $1,067.13
==========================================
TRUST UNITS OUTSTANDING AT END OF YEAR............ 2,958 3,013 3,013
==========================================
</TABLE>
See Notes to Financial Statements.
D - 20
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (NORTH CAROLINA TRUST)
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) The Fund is not subject to income taxes. Accordingly, no provision for
such taxes is required.
(c) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Administration of
the Fund - Accounts and Distributions" in this Prospectus, Part B.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 2,958 units at Date of Deposit............................................. $3,016,639
Less sales charge.................................................................. 135,743
_______________
Net amount applicable to Holders................................................... 2,880,896
Redemptions of units - net cost of 242 units redeemed less redemption
amounts.......................................................................... (5,861)
Realized gain on securities sold or redeemed....................................... 7,058
Principal distributions............................................................ (82,464)
Unrealized appreciation of investments............................................. 207,004
_______________
Net capital applicable to Holders.................................................. $3,006,633
===============
</TABLE>
4. INCOME TAXES
As of April 30, 1995, unrealized appreciation of investments, based on cost
for Federal income tax purposes, aggregated $207,004, all of which related
to appreciated securities. The cost of investment securities for Federal
income tax purposes was $2,799,605 at April 30, 1995.
D - 21
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B
PORTFOLIO OF THE NORTH CAROLINA TRUST
AS OF APRIL 30, 1995
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
__________ _________ ______ _______ _____________ _____________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 North Carolina Eastern Municipal Power A- $ 65,000 7.250% 2021(6) 01/01/97 $ 63,456 $ 68,695
Agency, Power System Revenue Bonds, @ 102.000
Refunding Series 1987 A 435,000 7.250 2021 01/01/97 424,669 452,074
@ 102.000
2 North Carolina Housing Finance Agency, A+ 430,000 7.400 2022 03/01/00 427,850 452,106
Single Family Revenue Bonds, Series J @ 102.000
3 North Carolina Medical Care Commission, A 450,000 7.250 2019 02/15/99 450,000 464,490
Health Care Facilities Revenue Bonds (Gaston @ 102.000
Health Care Support Project) Series 1989
4 North Carolina Municipal Power Agency Number A 500,000 6.000 2015 01/01/98 428,690 471,880
1, Catawba Electric Revenue Bonds, Series @ 100.000
1988
5 Craven Regional Medical Authority, North AAA 445,000 7.200 2019(6) 10/01/00 446,748 498,026
Carolina, Insured Health Care Facilities @ 102.000
Revenue Bonds, Series 1990 (MBIA Ins.) (5)
6 University of North Carolina, Chapel AAA 360,000 7.300 2011(6) 08/01/96 365,444 381,726
Hill, Utilities Systems Revenue Bonds, @ 103.000
Series 1986
7 Puerto Rico Electric Power Auth., Power AAA 150,000 7.125 2014(6) 07/01/99 144,561 164,526
Revenue Refunding Bonds, Series N @ 101.500
A- 50,000 7.125 2014 07/01/99 48,187 53,086
@ 101.500
__________ __________ __________
TOTAL $2,885,000 $2,799,605 $3,006,609
========== ========== ==========
</TABLE>
See Notes to Portfolios on Pages D - 23 and D - 24.
D - 22
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (MARYLAND, MINNESOTA, NEW JERSEY
AND NORTH CAROLINA TRUSTS)
NOTES TO PORTFOLIOS
AS OF APRIL 30, 1995
(1) A description of the rating symbols and their meanings appears under
"Description of Ratings" in this Prospectus, Part B. Ratings, which
have been provided by the Evaluator, are by Standard & Poor's (when
available) or by Moody's Investors Service (as indicated by "m") when
Standard & Poor's ratings are not available. "NR", if applicable,
indicates that this security is not currently rated by either rating
service.
(2) See Notes to Financial Statements.
(3) Optional redemption provisions, which may be exercised in whole or in
part, are initially at prices of par plus a premium, then subsequently
at prices declining to par. Certain securities may provide for
redemption at par prior or in addition to any optional or mandatory
redemption dates or maturity, for example, through the operation of a
maintenance and replacement fund, if proceeds are not able to be used
as contemplated, the project is condemned or sold or the project is
destroyed and insurance proceeds are used to redeem the securities.
Many of the securities are also subject to mandatory sinking fund
redemption commencing on dates which may be prior to the date on which
securities may be optionally redeemed. Sinking fund redemptions are at
par and redeem only part of the issue. Some of the securities have
mandatory sinking funds which contain optional provisions permitting
the issuer to increase the principal amount of securities called on a
mandatory redemption date. The sinking fund redemptions with optional
provisions may, and optional refunding redemptions generally will,
occur at times when the redeemed securities have an offering side
evaluation which represents a premium over par. To the extent that the
securities were acquired at a price higher than the redemption price,
this will represent a loss of capital when compared with the Public
Offering Price of the Units when acquired. Distributions will generally
be reduced by the amount of the income which would otherwise have been
paid with respect to redeemed securities and there will be distributed
to Holders any principal amount and premium received on such redemption
after satisfying any redemption requests for Units received by the Fund.
The estimated current return may be affected by redemptions. The tax
effect on Holders of redemptions and related distributions is described
under "Taxes" in this Prospectus, Part B.
(4) All Securities are insured either on an individual basis or portfolio
insurance, by a municipal bond insurance company which has been
assigned "AAA" claims paying ability by Standard & Poor's. Accordingly,
Standard & Poor's has assigned "AAA" ratings to the Securities.
Securities covered by portfolio insurance are rated "AAA" only as long
as the remain in this Trust. See "Risk Factors - Insured Obligations"
in this Prospectus, Part B.
(5) Insured by the indicated municipal bond insurance company. See "Risk
Factors - Insured Obligations" in this Prospectus, Part B.
D - 23
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7B (MARYLAND, MINNESOTA, NEW JERSEY
AND NORTH CAROLINA TRUSTS)
NOTES TO PORTFOLIOS
AS OF APRIL 30, 1995
(6) Bonds with an aggregate face amount of $505,000, $1,635,000, 1,295,000
and $1,020,000 for the Maryland, Minnesota, New Jersey and North
Carolina Trusts, respectively, have been pre-refunded and are expected
to be called for redemption on the optional redemption provision dates
shown.
D - 24
<PAGE>
DEFINED ASSET FUNDS--
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES
I want to learn more about automatic reinvestment in the Investment Accumulation
Program. Please send me information about participation in the Municipal Fund
Accumulation Program, Inc. and a current Prospectus.
My name (please
print) _______________________________________________________________________
My address (please print):
Street and Apt.
No. __________________________________________________________________________
City, State, Zip
Code _________________________________________________________________________
This page is a self-mailer. Please complete the information above, cut along the
dotted line, fold along the lines on the reverse side, tape, and mail with the
Trustee's address displayed on the outside.
12345678
<PAGE>
BUSINESS REPLY MAIL NO POSTAGE
FIRST CLASS PERMIT NO. 1313 NEW YORK, N.Y. NECESSARY
IF MAILED
POSTAGE WILL BE PAID BY ADDRESSEE IN THE
INVESTMENT ACCUMULATION PROGRAM (MITF) UNITED STATES
THE BANK OF NEW YORK
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P.O. BOX 974
WALL STREET STATION
NEW YORK, N.Y. 10268-0974
- --------------------------------------------------------------------------------
(Fold along this line.)
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(Fold along this line.)
<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
DEFINED ASSET FUNDS MUNICIPAL SERIES
MUNICIPAL INVESTMENT TRUST FUND
THIS PART B OF THE PROSPECTUS MAY NOT BE DISTRIBUTED UNLESS ACCOMPANIED OR
PRECEDED BY PART A. FURTHER DETAIL REGARDING ANY OF THE INFORMATION
PROVIDED IN THE PROSPECTUS MAY BE OBTAINED WITHIN FIVE DAYS OF WRITTEN
OR TELEPHONIC REQUEST TO THE TRUSTEE, THE ADDRESS AND
TELEPHONE NUMBER OF WHICH ARE SET FORTH IN PART A OF THIS PROSPECTUS.
Index
PAGE
---------
Fund Description...................................... 1
Risk Factors.......................................... 2
How to Buy Units...................................... 7
How to Sell Units..................................... 9
Income, Distributions and Reinvestment................ 9
Fund Expenses......................................... 10
Taxes................................................. 11
Records and Reports................................... 12
PAGE
---------
Trust Indenture....................................... 12
Miscellaneous......................................... 13
Exchange Option....................................... 14
Supplemental Information.............................. 15
Appendix A--Description of Ratings.................... a-1
Appendix B--Sales Charge Schedules for Defined Asset
Funds Municipal Series................................ b-1
Appendix C--Sales Charge Schedules for Municipal
Investment Trust Fund................................. c-1
FUND DESCRIPTION
BOND PORTFOLIO SELECTION
Professional buyers and research analysts for Defined Asset Funds, with
access to extensive research, selected the Bonds for the Portfolio after
considering the Fund's investment objective as well as the quality of the Bonds
(all Bonds in the Portfolio are initially rated in the category A or better by
at least one nationally recognized rating organization or have comparable credit
characteristics), the yield and price of the Bonds compared to similar
securities, the maturities of the Bonds and the diversification of the
Portfolio. Only issues meeting these stringent criteria of the Defined Asset
Funds team of dedicated research analysts are included in the Portfolio. No
leverage or borrowing is used nor does the Portfolio contain other kinds of
securities to enhance yield. A summary of the Bonds in the Portfolio appears in
Part A of the Prospectus.
The deposit of the Bonds in the Fund on the initial date of deposit
established a proportionate relationship among the face amounts of the Bonds.
During the 90-day period following the initial date of deposit the Sponsors may
deposit additional Bonds in order to create new Units, maintaining to the extent
possible that original proportionate relationship. Deposits of additional Bonds
subsequent to the 90-day period must generally replicate exactly the
proportionate relationship among the face amounts of the Bonds at the end of the
initial 90-day period.
Yields on bonds depend on many factors including general conditions of the
bond markets, the size of a particular offering and the maturity and quality
rating of the particular issues. Yields can vary among bonds with similar
maturities, coupons and ratings. Ratings represent opinions of the rating
organizations as to the quality of the bonds rated, based on the credit of the
issuer or any guarantor, insurer or other credit provider, but these ratings are
only general standards of quality (see Appendix A).
After the initial date of deposit, the ratings of some Bonds may be reduced
or withdrawn, or the credit characteristics of the Bonds may no longer be
comparable to bonds rated A or better. Bonds rated BBB or Baa (the lowest
investment grade rating) or lower may have speculative characteristics, and
changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity to make principal and interest payments than is the case
with higher grade bonds. Bonds rated below investment grade or unrated bonds
with
1
<PAGE>
similar credit characteristics are often subject to
greater market fluctuations and risk of loss of principal and income than higher
grade bonds and their value may decline precipitously in response to rising
interest rates.
Because each Defined Asset Fund is a preselected portfolio of bonds, you
know the securities, maturities, call dates and ratings before you invest. Of
course, the Portfolio will change somewhat over time, as Bonds mature, are
redeemed or are sold to meet Unit redemptions or in other limited circumstances.
Because the Portfolio is not actively managed and principal is returned as the
Bonds are disposed of, this principal should be relatively unaffected by changes
in interest rates.
BOND PORTFOLIO SUPERVISION
The Fund follows a buy and hold investment strategy in contrast to the
frequent portfolio changes of a managed fund based on economic, financial and
market analyses. The Fund may retain an issuer's bonds despite adverse financial
developments. Experienced financial analysts regularly review the Portfolio and
a Bond may be sold in certain circumstances including the occurrence of a
default in payment or other default on the Bond, a decline in the projected
income pledged for debt service on a revenue bond, institution of certain legal
proceedings, if the Bond becomes taxable or is otherwise inconsistent with the
Fund's investment objectives, a decline in the price of the Bond or the
occurrence of other market or credit factors (including advance refunding) that,
in the opinion of Defined Asset Funds research analysts, makes retention of the
Bond detrimental to the interests of investors. The Trustee must generally
reject any offer by an issuer of a Bond to exchange another security pursuant to
a refunding or refinancing plan.
The Sponsors and the Trustee are not liable for any default or defect in a
Bond. If a contract to purchase any Bond fails, the Sponsors may generally
deposit a replacement bond so long as it is a tax-exempt bond, has a fixed
maturity or disposition date substantially similar to the failed Bond and is
rated A or better by at least one nationally recognized rating organization or
has comparable credit characteristics. A replacement bond must be deposited
within 110 days after deposit of the failed contract, at a cost that does not
exceed the funds reserved for purchasing the failed Bond and at a yield to
maturity and current return substantially equivalent (considering then current
market conditions and relative creditworthiness) to those of the failed Bond, as
of the date the failed contract was deposited.
RISK FACTORS
An investment in the Fund entails certain risks, including the risk that
the value of your investment will decline with increases in interest rates.
Generally speaking, bonds with longer maturities will fluctuate in value more
than bonds with shorter maturities. In recent years there have been wide
fluctuations in interest rates and in the value of fixed-rate bonds generally.
The Sponsors cannot predict the direction or scope of any future fluctuations.
Certain of the Bonds may have been deposited at a market discount or
premium principally because their interest rates are lower or higher than
prevailing rates on comparable debt securities. The current returns of market
discount bonds are lower than comparably rated bonds selling at par because
discount bonds tend to increase in market value as they approach maturity. The
current returns of market premium bonds are higher than comparably rated bonds
selling at par because premium bonds tend to decrease in market value as they
approach maturity. Because part of the purchase price is returned through
current income payments and not at maturity, an early redemption at par of a
premium bond will result in a reduction in yield to the Fund. Market premium or
discount attributable to interest rate changes does not indicate market
confidence or lack of confidence in the issue.
Certain Bonds deposited into the Fund may have been acquired on a
when-issued or delayed delivery basis. The purchase price for these Bonds is
determined prior to their delivery to the Fund and a gain or loss may result
from fluctuations in the value of the Bonds. Additionally, in any Defined Asset
Funds Municipal Series, if the value of the Bonds reserved for payment of the
periodic deferred sales charge, together with the interest thereon, were to
become insufficient to pay these charges, additional bonds would be required to
be sold.
The Fund may be concentrated in one or more of types of bonds.
Concentration in a State may involve additional risk because of the decreased
diversification of economic, political, financial and market risks. Set forth
below is a brief description of certain risks associated with bonds which may be
held by the Fund. Additional information is contained in the Information
Supplement which is available from the Trustee at no charge to the investor.
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GENERAL OBLIGATION BONDS
Certain of the Bonds may be general obligations of a governmental entity.
General obligation bonds are backed by the issuer's pledge of its full faith,
credit and taxing power for the payment of principal and interest. However, the
taxing power of any governmental entity may be limited by provisions of state
constitutions or laws and its credit will depend on many factors, including an
erosion of the tax base resulting from population declines, natural disasters,
declines in the state's industrial base or an inability to attract new
industries, economic limits on the ability to tax without eroding the tax base
and the extent to which the entity relies on federal or state aid, access to
capital markets or other factors beyond the entity's control. In addition,
political restrictions on the ability to tax and budgetary constraints affecting
state governmental aid may have an adverse impact on the creditworthiness of
cities, counties, school districts and other local governmental units.
As a result of the recent recession's adverse impact upon both revenues and
expenditures, as well as other factors, many state and local governments have
confronted deficits which were the most severe in recent years. Many issuers are
facing highly difficult choices about significant tax increases and spending
reductions in order to restore budgetary balance. The failure to implement these
actions on a timely basis could force these issuers to issue additional debt to
finance deficits or cash flow needs and could lead to a reduction of their bond
ratings and the value of their outstanding bonds.
MORAL OBLIGATION BONDS
The Portfolio may include 'moral obligation' bonds. If an issuer of moral
obligation bonds is unable to meet its obligations, the repayment of the bonds
becomes a moral commitment but not a legal obligation of the state or local
government in question. Even though the state or local government may be called
on to restore any deficits in capital reserve funds of the agencies or
authorities which issued the bonds, any restoration generally requires
appropriation by the state or local legislature and does not constitute a
legally enforceable obligation or debt of the state or local government. The
agencies or authorities generally have no taxing power.
REFUNDED BONDS
Refunded bonds are typically secured by direct obligations of the U.S.
Government or in some cases obligations guaranteed by the U.S. Government placed
in an escrow account maintained by an independent trustee until maturity or a
predetermined redemption date. These obligations are generally noncallable prior
to maturity or the predetermined redemption date. In a few isolated instances,
however, bonds which were thought to be escrowed to maturity have been called
for redemption prior to maturity.
MUNICIPAL REVENUE BONDS
Municipal revenue bonds are tax-exempt securities issued by states,
municipalities, public authorities or similar entities to finance the cost of
acquiring, constructing or improving various projects. Municipal revenue bonds
are not general obligations of governmental entities backed by their taxing
power and payment is generally solely dependent upon the creditworthiness of the
public issuer or the financed project or state appropriations. Examples of
municipal revenue bonds are:
Municipal utility bonds, including electrical, water and sewer revenue
bonds, whose payments are dependent on various factors, including the rates
the utilities may charge, the demand for their services and their operating
costs, including expenses to comply with environmental legislation and
other energy and licensing laws and regulations. Utilities are particularly
sensitive to, among other things, the effects of inflation on operating and
construction costs, the unpredictability of future usage requirements, the
costs and availability of fuel and, with certain electric utilities, the
risks associated with the nuclear industry;
Lease rental bonds which are generally issued by governmental financing
authorities with no direct taxing power for the purchase of equipment or
construction of buildings that will be used by a state or local government.
Lease rental bonds are generally subject to an annual risk that the lessee
government might not appropriate funds for the leasing rental payments to
service the bonds and may also be subject to the risk that rental
obligations may terminate in the event of damage to or destruction or
condemnation of the equipment or building;
Multi-family housing revenue bonds and single family mortgage revenue
bonds which are issued to provide financing for various housing projects
and which are payable primarily from the revenues derived from mortgage
loans to housing projects for low to moderate income families or notes
secured by mortgages on residences; repayment of this type of bonds is
therefore dependent upon, among other things, occupancy
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levels, rental income, the rate of default on underlying mortgage loans,
the ability of mortgage insurers to pay claims, the continued availability
of federal, state or local housing subsidy programs, economic conditions in
local markets, construction costs, taxes, utility costs and other operating
expenses and the managerial ability of project managers. Housing bonds are
generally prepayable at any time and therefore their average life will
ordinarily be less than their stated maturities;
Hospital and health care facility bonds whose payments are dependent
upon revenues of hospitals and other health care facilities. These revenues
come from private third-party payors and government programs, including the
Medicare and Medicaid programs, which have generally undertaken cost
containment measures to limit payments to health care facilities. Hospitals
and health care facilities are subject to various legal claims by patients
and others and are adversely affected by increasing costs of insurance;
Airport, port, highway and transit authority revenue bonds which are
dependent for payment on revenues from the financed projects, including
user fees from ports and airports, tolls on turnpikes and bridges, rents
from buildings, transit fare revenues and additional financial resources
including federal and state subsidies, lease rentals paid by state or local
governments or a pledge of a special tax such as a sales tax or a property
tax. In the case of the air travel industry, airport income is largely
affected by the airlines' ability to meet their obligations under use
agreements which in turn is affected by increased competition among
airlines, excess capacity and increased fuel costs, among other factors.
Solid waste disposal bonds which are generally payable from dumping and
user fees and from revenues that may be earned by the facility on the sale
of electrical energy generated in the combustion of waste products and
which are therefore dependent upon the ability of municipalities to fully
utilize the facilities, sufficient supply of waste for disposal, economic
or population growth, the level of construction and maintenance costs, the
existence of lower-cost alternative modes of waste processing and
increasing environmental regulation. A recent decision of the U.S. Supreme
Court limiting a municipality's ability to require use of its facilities
may have an adverse affect on the credit quality of various issues of these
bonds;
Special tax bonds which are not secured by general tax revenues but are
only payable from and secured by the revenues derived by a municipality
from a particular tax--for example, a tax on the rental of a hotel room, on
the purchase of food and beverages, on the rental of automobiles or on the
consumption of liquor and may therefore be adversely affected by a
reduction in revenues resulting from a decline in the local economy or
population or a decline in the consumption, use or cost of the goods and
services that are subject to taxation;
Student loan revenue bonds which are typically secured by pledges of new
or existing student loans. The loans, in turn, are generally either
guaranteed by eligible guarantors and reinsured by the Secretary of the
U.S. Department of Education, directly insured by the federal government,
or financed as part of supplemental or alternative loan programs within a
state (e.g., loan repayments are not guaranteed). These bonds often permit
the issuer to enter into interest rate swap agreements with eligible
counterparties in which event the bonds are subject to the additional risk
of the counterparty's ability to fulfill its swap obligation;
University and college bonds, the payments on which are dependent upon
various factors, including the size and diversity of their sources of
revenues, enrollment, reputation, the availability of endowments and other
funds and, in the case of public institutions, the financial condition of
the relevant state or other governmental entity and its policies with
respect to education; and
Tax increment and tax allocation bonds, which are secured by ad valorem
taxes imposed on the incremental increase of taxable assessed valuation of
property within a jurisdiction above an established base of assessed value.
The issuers of these bonds do not have general taxing authority and the tax
assessments on which the taxes used to service the bonds are based may be
subject to devaluation due to market price declines or governmental action.
Puerto Rico. Certain Bonds may be affected by general economic conditions
in the Commonwealth of Puerto Rico. Puerto Rico's economy is largely dependent
for its development on federal programs and current federal budgetary policies
suggest that an expansion of its programs is unlikely. Reductions in federal tax
benefits or incentives or curtailment of spending programs could adversely
affect the Puerto Rican economy.
Industrial Development Revenue Bonds. Industrial development revenue bonds
are municipal obligations issued to finance various privately operated projects
including pollution control and manufacturing facilities. Payment is generally
solely dependent upon the creditworthiness of the corporate operator of the
project and, in
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certain cases, an affiliated or third party guarantor and may be affected by
economic factors relating to the particular industry as well as varying degrees
of governmental regulation. In many cases industrial revenue bonds do not have
the benefit of covenants which would prevent the corporations from engaging in
capital restructurings or borrowing transactions which could reduce their
ability to meet their obligations and result in a reduction in the value of the
Portfolio.
BONDS BACKED BY LETTERS OF CREDIT OR INSURANCE
Certain Bonds may be secured by letters of credit issued by commercial
banks or savings banks, savings and loan associations and similar thrift
institutions or are direct obligations of banks or thrifts. The letter of credit
may be drawn upon, and the Bonds redeemed, if an issuer fails to pay amounts due
on the Bonds or, in certain cases, if the interest on the Bond becomes taxable.
Letters of credit are irrevocable obligations of the issuing institutions. The
profitability of a financial institution is largely dependent upon the credit
quality of its loan portfolio which, in turn, is affected by the institution's
underwriting criteria, concentrations within the portfolio and specific industry
and general economic conditions. The operating performance of financial
institutions is also impacted by changes in interest rates, the availability and
cost of funds, the intensity of competition and the degree of governmental
regulation.
Certain Bonds may be insured or guaranteed by insurance companies listed
below. The claims-paying ability of each of these companies, unless otherwise
indicated, was rated AAA by Standard & Poor's or another nationally recognized
rating organization at the time the insured Bonds were purchased by the Fund.
The ratings are subject to change at any time at the discretion of the rating
agencies. In the event that the rating of an Insured Fund is reduced, the
Sponsors are authorized to direct the Trustee to obtain other insurance on
behalf of the Fund. The insurance policies guarantee the timely payment of
principal and interest on the Bonds but do not guarantee their market value or
the value of the Units. The insurance policies generally do not provide for
accelerated payments of principal or cover redemptions resulting from events of
taxability.
The following summary information relating to the listed insurance
companies has been obtained from publicly available information:
<TABLE><CAPTION>
FINANCIAL INFORMATION
AS OF SEPTEMBER 30, 1994
(IN MILLIONS OF DOLLARS)
--------------------------------------
POLICYHOLDERS'
NAME DATE ESTABLISHED ADMITTED ASSETS SURPLUS
- ---------------------------------------------------- ----------------- --------------- ---------------------
<S> <C> <C> <C>
AMBAC Indemnity Corporation......................... 1970 $ 2,150 $ 779
Asset Guaranty Insurance Co. (AA by S&P) 1988 152 73
Capital Guaranty Insurance Company.................. 1986 293 166
Capital Markets Assurance Corp...................... 1987 198 139
Connie Lee Insurance Company........................ 1987 193 106
Continental Casualty Company........................ 1948 19,220 3,309
Financial Guaranty Insurance Company................ 1984 2,092 872
Financial Security Assurance Inc.................... 1984 776 369
Firemen's Insurance Company of Newark, NJ........... 1855 2,236 383
Industrial Indemnity Co. (HIBI)..................... 1920 1,853 299
Municipal Bond Investors Assurance Corporation...... 1986 3,314 1,083
Insurance companies are subject to extensive regulation and supervision
where they do business by state insurance commissioners who regulate the
standards of solvency which must be maintained, the nature of and limitations on
investments, reports of financial condition, and requirements regarding reserves
for unearned premiums, losses and other matters. A significant portion of the
assets of insurance companies are required by law to be held in reserve against
potential claims on policies and is not available to general creditors. Although
the federal government does not regulate the business of insurance, federal
initiatives including pension regulation, controls on medical care costs,
minimum standards for no-fault automobile insurance, national health insurance,
tax law changes affecting life insurance companies and repeal of the antitrust
exemption for the insurance business can significantly impact the insurance
business.
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STATE RISK FACTORS
Investment in a single State Trust, as opposed to a Fund which invests in
the obligations of several states, may involve some additional risk due to the
decreased diversification of economic, political, financial and market risks. A
brief description of the factors which may affect the financial condition of the
applicable State for any State Trust, together with a summary of tax
considerations relating to that State, appear in Part A (or for certain State
Trusts, Part C), of the Prospectus; further information is contained in the
Information Supplement.
LITIGATION AND LEGISLATION
The Sponsors do not know of any pending litigation as of the initial date
of deposit which might reasonably be expected to have a material adverse effect
upon the Fund. At any time after the initial date of deposit, litigation may be
initiated on a variety of grounds, or legislation may be enacted, affecting the
Bonds in the Fund. Litigation, for example, challenging the issuance of
pollution control revenue bonds under environmental protection statutes may
affect the validity of certain Bonds or the tax-free nature of their interest.
While the outcome of litigation of this nature can never be entirely predicted,
opinions of bond counsel are delivered on the date of issuance of each Bond to
the effect that it has been validly issued and that the interest thereon is
exempt from federal income tax. Also, certain proposals, in the form of state
legislative proposals or voter initiatives, seeking to limit real property taxes
have been introduced in various states, and an amendment to the constitution of
the State of California, providing for strict limitations on real property
taxes, has had a significant impact on the taxing powers of local governments
and on the financial condition of school districts and local governments in
California. In addition, other factors may arise from time to time which
potentially may impair the ability of issuers to make payments due on the Bonds.
Under the Federal Bankruptcy Code, for example, municipal bond issuers, as well
as any underlying corporate obligors or guarantors, may proceed to restructure
or otherwise alter the terms of their obligations.
From time to time Congress considers proposals to prospectively and
retroactively tax the interest on state and local obligations, such as the
Bonds. The Supreme Court clarified in South Carolina v. Baker (decided on April
20, 1988) that the U.S. Constitution does not prohibit Congress from passing a
nondiscriminatory tax on interest on state and local obligations. This type of
legislation, if enacted into law, could require investors to pay income tax on
interest from the Bonds and could adversely affect an investment in Units. See
Taxes.
PAYMENT OF THE BONDS AND LIFE OF THE FUND
The size and composition of the Portfolio will change over time. Most of
the Bonds are subject to redemption prior to their stated maturity dates
pursuant to optional refunding or sinking fund redemption provisions or
otherwise. In general, optional refunding redemption provisions are more likely
to be exercised when the value of a Bond is at a premium over par than when it
is at a discount from par. Some Bonds may be subject to sinking fund and
extraordinary redemption provisions which may commence early in the life of the
Fund. Additionally, the size and composition of the Fund will be affected by the
level of redemptions of Units that may occur from time to time. Principally,
this will depend upon the number of investors seeking to sell or redeem their
Units and whether or not the Sponsors are able to sell the Units acquired by
them in the secondary market. As a result, Units offered in the secondary market
may not represent the same face amount of Bonds as on the initial date of
deposit. Factors that the Sponsors will consider in determining whether or not
to sell Units acquired in the secondary market include the diversity of the
Portfolio, the size of the Fund relative to its original size, the ratio of Fund
expenses to income, the Fund's current and long-term returns, the degree to
which Units may be selling at a premium over par and the cost of maintaining a
current prospectus for the Fund. These factors may also lead the Sponsors to
seek to terminate the Fund earlier than its mandatory termination date.
FUND TERMINATION
The Fund will be terminated no later than the mandatory termination date
specified in Part A of the Prospectus. It will terminate earlier upon the
disposition of the last Bond or upon the consent of investors holding 51% of the
Units. The Fund may also be terminated earlier by the Sponsors once the total
assets of the Fund have fallen below the minimum value specified in Part A of
the Prospectus. A decision by the Sponsors to terminate the Fund early will be
based on factors similar to those considered by the Sponsors in determining
whether to continue the sale of Units in the secondary market.
Notice of impending termination will be provided to investors and
thereafter units will no longer be redeemable. On or shortly before termination,
the Fund will seek to dispose of any Bonds remaining in the
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Portfolio although any Bond unable to be sold at a reasonable price may continue
to be held by the Trustee in a liquidating trust pending its final disposition.
A proportional share of the expenses associated with termination, including
brokerage costs in disposing of Bonds, will be borne by investors remaining at
that time. This may have the effect of reducing the amount of proceeds those
investors are to receive in any final distribution.
LIQUIDITY
Up to 40% of the value of the Portfolio may be attributable to guarantees
or similar security provided by corporate entities. These guarantees or other
security may constitute restricted securities that cannot be sold publicly by
the Trustee without registration under the Securities Act of 1933, as amended.
The Sponsors nevertheless believe that, should a sale of the Bonds guaranteed or
secured be necessary in order to meet redemption of Units, the Trustee should be
able to consummate a sale with institutional investors.
The principal trading market for the Bonds will generally be in the
over-the-counter market and the existence of a liquid trading market for the
Bonds may depend on whether dealers will make a market in them. There can be no
assurance that a liquid trading market will exist for any of the Bonds,
especially since the Fund may be restricted under the Investment Company Act of
1940 from selling Bonds to any Sponsor. The value of the Portfolio will be
adversely affected if trading markets for the Bonds are limited or absent.
HOW TO BUY UNITS
Units are available from any of the Sponsors, Underwriters and other
broker-dealers at the Public Offering Price plus accrued interest on the Units.
The Public Offering Price varies each Business Day with changes in the value of
the Portfolio and other assets and liabilities of the Fund.
PUBLIC OFFERING PRICE--DEFINED ASSET FUNDS MUNICIPAL SERIES
To allow Units to be priced at $1,000, the Units outstanding as of the
Evaluation Time on the Initial Date of Deposit (all of which are held by the
Sponsors) will be split (or split in reverse).
During the initial offering period for at least the first three months of
the Fund, the Public Offering Price (and the Initial Repurchase Price) is based
on the higher, offer side evaluation of the Bonds at the next Evaluation Time
after the order is received. In the secondary market (after the initial offering
period), the Public Offering Price (and the Sponsors' Repurchase Price and the
Redemption Price) is based on the lower, bid side evaluation of the Bonds.
Investors will be subject to differing types and amounts of sales charge
depending upon the timing of their purchases and redemptions of Units. A
periodic deferred sales charge will be payable quarterly through about the fifth
anniversary of the Fund from a portion of the interest on and principal of Bonds
reserved for that purpose. Commencing on the first anniversary of the Fund, the
Public Offering Price will also include an up-front sales charge applied to the
value of the Bonds in the Portfolio. Lastly, investors redeeming their Units
prior to the fourth anniversary of the Fund will be charged a contingent
deferred sales charge payable out of the redemption proceeds of their Units.
These charges may be less than you would pay to buy and hold a comparable
managed fund. A complete schedule of sales charges appears in Appendix B. The
Sponsors have received an opinion of their counsel that the deferred sales
charge described in this Prospectus is consistent with an exemptive order
received from the SEC.
Because accrued interest on the Bonds is not received by the Fund at a
constant rate throughout the year, any Monthly Income Distribution may be more
or less than the interest actually received by the Fund. To eliminate
fluctuations in the Monthly Income Distribution, a portion of the Public
Offering Price consists of an advance to the Trustee of an amount necessary to
provide approximately equal distributions. Upon the sale or redemption of Units,
investors will receive their proportionate share of the Trustee advance. In
addition, if a Bond is sold, redeemed or otherwise disposed of, the Fund will
periodically distribute the portion of the Trustee advance that is attributable
to the Bond to investors.
The regular Monthly Income Distribution is stated in Part A of the
Prospectus and will change as the composition of the Portfolio changes over
time.
PUBLIC OFFERING PRICE--MUNICIPAL INVESTMENT TRUST FUND
In the initial offering period, the Public Offering Price is based on the
next offer side evaluation of the Bonds, and includes a sales charge based on
the number of Units of a single Fund or Trust purchased on the same or any
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<PAGE>
preceding day by a single purchaser. See Initial Offering sales charge schedule
in Appendix C. The purchaser or his dealer must notify the Sponsors at the time
of purchase of any previous purchase to be aggregated and supply sufficient
information to permit confirmation of eligibility; acceptance of the purchase
order is subject to confirmation. Purchases of Fund Units may not be aggregated
with purchases of any other unit trust. This procedure may be amended or
terminated at any time without notice.
In the secondary market (after the initial offering period), the Public
Offering Price is based on the bid side evaluation of the Bonds, and includes a
sales charge based (a) on the number of Units of the Fund and any other Series
of Municipal Investment Trust Fund purchased in the secondary market on the same
day by a single purchaser (see Secondary Market sales charge schedule in
Appendix C) and (b) the maturities of the underlying Bonds (see Effective Sales
Charge Schedule in Appendix C). To qualify for a reduced sales charge, the
dealer must confirm that the sale is to a single purchaser or is purchased for
its own account and not for distribution. For these purposes, Units held in the
name of the purchaser's spouse or child under 21 years of age are deemed to be
purchased by a single purchaser. A trustee or other fiduciary purchasing
securities for a single trust estate or single fiduciary account is also
considered a single purchaser.
In the secondary market, the Public Offering Price is further reduced
depending on the maturities of the various Bonds in the Portfolio, by
determining a sales charge percentage for each Bond, as stated in Effective
Sales Charge in Appendix C. The sales charges so determined, multiplied by the
bid side evaluation of the Bonds, are aggregated and the total divided by the
number of Units outstanding to determine the Effective Sales Charge. On any
purchase, the Effective Sales Charge is multiplied by the applicable secondary
market sales charge percentage (depending on the number of Units purchased) in
order to determine the sales charge component of the Public Offering Price.
* * *
Employees of certain Sponsors and Sponsor affiliates and non-employee
directors of Merrill Lynch & Co. Inc. may purchase Units at any time at prices
including a sales charge of not less than $5 per Unit.
Net accrued interest is added to the Public Offering Price, the Sponsors'
Repurchase Price and the Redemption Price per Unit. This represents the interest
accrued on the Bonds, net of Fund expenses, from the initial date of deposit to,
but not including, the settlement date for Units (less any prior distributions
of interest income to investors). Bonds deposited also carry accrued but unpaid
interest up to the initial date of deposit. To avoid having investors pay this
additional accrued interest (which earns no return) when they purchase Units,
the Trustee advances and distributes this amount to the Sponsors; it recovers
this advance from interest received on the Bonds. Because of varying interest
payment dates on the Bonds, accrued interest at any time will exceed the
interest actually received by the Fund.
EVALUATIONS
Evaluations are determined by the independent Evaluator on each Business
Day. This excludes Saturdays, Sundays and the following holidays as observed by
the New York Stock Exchange: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. Bond
evaluations are based on closing sales prices (unless the Evaluator deems these
prices inappropriate). If closing sales prices are not available, the evaluation
is generally determined on the basis of current bid or offer prices for the
Bonds or comparable securities or by appraisal or by any combination of these
methods. In the past, the bid prices of publicly offered tax-exempt issues have
been lower than the offer prices by as much as 3 1/2% or more of face amount in
the case of inactively traded issues and as little as 1/2 of 1% in the case of
actively traded issues, but the difference between the offer and bid prices has
averaged between 1 and 2% of face amount. Neither the Sponsors, the Trustee or
the Evaluator will be liable for errors in the Evaluator's judgment. The fees of
the Evaluator will be borne by the Fund.
CERTIFICATES
Certificates for Units are issued upon request and may be transferred by
paying any taxes or governmental charges and by complying with the requirements
for redeeming Certificates (see How To Sell Units--Trustee's Redemption of
Units). Certain Sponsors collect additional charges for registering and shipping
Certificates to purchasers. Lost or mutilated Certificates can be replaced upon
delivery of satisfactory indemnity and payment of costs.
8
<PAGE>
HOW TO SELL UNITS
SPONSORS' MARKET FOR UNITS
You can sell your Units at any time without a fee. The Sponsors (although
not obligated to do so) will normally buy any Units offered for sale at the
repurchase price next computed after receipt of the order. The Sponsors have
maintained secondary markets in Defined Asset Funds for over 20 years. Primarily
because of the sales charge and fluctuations in the market value of the Bonds,
the sale price may be less than the cost of your Units. You should consult your
financial professional for current market prices to determine if other broker-
dealers or banks are offering higher prices for Units.
The Sponsors may discontinue this market without prior notice if the supply
of Units exceeds demand or for other business reasons; in that event, the
Sponsors may still purchase Units at the redemption price as a service to
investors. The Sponsors may reoffer or redeem Units repurchased.
TRUSTEE'S REDEMPTION OF UNITS
You may redeem your Units by sending the Trustee a redemption request
together with any certificates you hold. Certificates must be properly endorsed
or accompanied by a written transfer instrument with signatures guaranteed by an
eligible institution. In certain instances, additional documents may be required
such as a certificate of death, trust instrument, certificate of corporate
authority or appointment as executor, administrator or guardian. If the Sponsors
are maintaining a market for Units, they will purchase any Units tendered at the
repurchase price described above. While Defined Asset Funds Municipal Series
have a declining deferred sales charge payable on redemption (see Appendix B),
Municipal Investment Trust Fund has no back-end load or 12b-1 fees, so there is
never a fee for cashing in your investment (see Appendix C). If they do not
purchase Units tendered, the Trustee is authorized in its discretion to sell
Units in the over-the-counter market if it believes it will obtain a higher net
price for the redeeming investor.
By the seventh calendar day after tender you will be mailed an amount equal
to the Redemption Price per Unit. Because of market movements or changes in the
Portfolio, this price may be more or less than the cost of your Units. The
Redemption Price per Unit is computed each Business Day by adding the value of
the Bonds, net accrued interest, cash and the value of any other Fund assets;
deducting unpaid taxes or other governmental charges, accrued but unpaid Fund
expenses, unreimbursed Trustee advances, cash held to redeem Units or for
distribution to investors and the value of any other Fund liabilities; and
dividing the result by the number of outstanding Units.
For Defined Asset Funds Municipal Series, Bonds are evaluated on the offer
side during the initial offering period and for at least the first three months
of the Fund (even in the secondary market) and on the bid side thereafter. For
Municipal Investment Trust Fund, Bonds are evaluated on the offer side during
the initial offering period and on the bid side thereafter.
If cash is not available in the Fund's Income and Capital Accounts to pay
redemptions, the Trustee may sell Bonds selected by the Agent for the Sponsors
based on market and credit factors determined to be in the best interest of the
Fund. These sales are often made at times when the Bonds would not otherwise be
sold and may result in lower prices than might be realized otherwise and will
also reduce the size and diversity of the Fund.
Redemptions may be suspended or payment postponed if the New York Stock
Exchange is closed other than for customary weekend and holiday closings, if the
SEC determines that trading on that Exchange is restricted or that an emergency
exists making disposal or evaluation of the Bonds not reasonably practicable, or
for any other period permitted by the SEC.
INCOME, DISTRIBUTIONS AND REINVESTMENT
INCOME
Some of the Bonds may have been purchased on a when-issued basis or may
have a delayed delivery. Since interest on these Bonds does not begin to accrue
until the date of their delivery to the Fund, the Trustee's annual fee and
expenses may be reduced to provide tax-exempt income to investors for this
non-accrual period. If a when-issued Bond is not delivered until later than
expected and the amount of the Trustee's annual fee and expenses is insufficient
to cover the additional accrued interest, the Sponsors will treat the contracts
as failed Bonds. The Trustee is compensated for its fee reduction by drawing on
the letter of credit deposited by the
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Sponsors before the settlement date for these Bonds and depositing the proceeds
in a non-interest bearing account for the Fund.
Interest received is credited to an Income Account and other receipts to a
Capital Account. A Reserve Account may be created by withdrawing from the Income
and Capital Accounts amounts considered appropriate by the Trustee to reserve
for any material amount that may be payable out of the Fund.
DISTRIBUTIONS
Each Unit receives an equal share of monthly distributions of interest
income net of estimated expenses. Interest on the Bonds is generally received by
the Fund on a semi-annual or annual basis. Because interest on the Bonds is not
received at a constant rate throughout the year, any Monthly Income Distribution
may be more or less than the interest actually received. To eliminate
fluctuations in the Monthly Income Distribution, the Trustee will advance
amounts necessary to provide approximately equal interest distributions; it will
be reimbursed, without interest, from interest received on the Bonds, but the
Trustee is compensated, in part, by holding the Fund's cash balances in
non-interest bearing accounts. Along with the Monthly Income Distributions, the
Trustee will distribute the investor's pro rata share of principal received from
any disposition of a Bond to the extent available for distribution. In addition,
for Defined Asset Funds Municipal Series, distributions of amounts necessary to
pay the deferred portion of the sales charge will be made from the Capital and
Income Accounts to an account maintained by the Trustee for purposes of
satisfying investors' sales charge obligations.
The initial estimated annual income per Unit, after deducting estimated
annual Fund expenses (and, for Defined Asset Funds Municipal Series, the portion
of the deferred sales charge payable from interest income) as stated in Part A
of the Prospectus, will change as Bonds mature, are called or sold or otherwise
disposed of, as replacement bonds are deposited and as Fund expenses change.
Because the Portfolio is not actively managed, income distributions will
generally not be affected by changes in interest rates. Depending on the
financial conditions of the issuers of the Bonds, the amount of income should be
substantially maintained as long as the Portfolio remains unchanged; however,
optional bond redemptions or other Portfolio changes may occur more frequently
when interest rates decline, which would result in early returns of principal
and possibly earlier termination of the Fund.
REINVESTMENT
Distributions will be paid in cash unless the investor elects to have
distributions reinvested without sales charge in the Municipal Fund Accumulation
Program, Inc. The Program is an open-end management investment company whose
investment objective is to obtain income exempt from regular federal income
taxes by investing in a diversified portfolio of state, municipal and public
authority bonds rated A or better or with comparable credit characteristics.
Reinvesting compounds earnings free from federal tax. Investors participating in
the Program will be subject to state and local income taxes to the same extent
as if the distributions had been received in cash, and most of the income on the
Program is subject to state and local income taxes. For more complete
information about the Program, including charges and expenses, request the
Program's prospectus from the Trustee. Read it carefully before you decide to
participate. Written notice of election to participate must be received by the
Trustee at least ten days before the Record Day for the first distribution to
which the election is to apply.
FUND EXPENSES
Estimated annual Fund expenses are listed in Part A of the Prospectus; if
actual expenses exceed the estimate, the excess will be borne by the Fund. The
Trustee's annual fee is payable in monthly installments. The Trustee also
benefits when it holds cash for the Fund in non-interest bearing accounts.
Possible additional charges include Trustee fees and expenses for extraordinary
services, costs of indemnifying the Trustee and the Sponsors, costs of action
taken to protect the Fund and other legal fees and expenses, Fund termination
expenses and any governmental charges. The Trustee has a lien on Fund assets to
secure reimbursement of these amounts and may sell Bonds for this purpose if
cash is not available. The Sponsors receive an annual fee of a maximum of $0.35
per $1,000 face amount to reimburse them for the cost of providing Portfolio
supervisory services to the Fund. While the fee may exceed their costs of
providing these services to the Fund, the total supervision fees from all
Defined Asset Funds Municipal Series will not exceed their costs for these
services to all of those Series during any calendar year; and the total
supervision fees from all Series of Municipal Investment Trust Fund will not
exceed their costs for these services to all of those Series during any calendar
year. The Sponsors may also be reimbursed for their costs of providing
bookkeeping and administrative services to the Fund, currently estimated at
$0.10 per Unit. The Trustee's, Sponsors' and Evaluator's fees may be adjusted
for inflation without investors' approval.
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All expenses in establishing the Fund will be paid from the Underwriting
Account at no charge to the Fund. Sales charges on Defined Asset Funds range
from under 1.0% to 5.5%. This may be less than you might pay to buy and hold a
comparable managed fund. Defined Asset Funds can be a cost-effective way to
purchase and hold investments. Annual operating expenses are generally lower
than for managed funds. Because Defined Asset Funds have no management fees,
limited transaction costs and no ongoing marketing expenses, operating expenses
are generally less than 0.25% a year. When compounded annually, small
differences in expense ratios can make a big difference in your investment
results.
TAXES
The following discussion addresses only the U.S. federal and certain New
York State and City income tax consequences under current law of Units held as
capital assets and does not address the tax consequences of Units held by
dealers, financial institutions or insurance companies or other investors with
special circumstances.
In the opinion of Davis Polk & Wardwell, special counsel for the Sponsors,
under existing law:
The Fund is not an association taxable as a corporation for federal
income tax purposes. Each investor will be considered the owner of a pro
rata portion of each Bond in the Fund under the grantor trust rules of
Sections 671-679 of the Internal Revenue Code of 1986, as amended (the
'Internal Revenue Code'). Each investor will be considered to have received
the interest and accrued the original issue discount, if any, on his pro
rata portion of each Bond when interest on the Bond is received or original
issue discount is accrued by the Fund. The investor's basis in his Units
will be equal to the cost of his Units, including any up-front sales
charge.
When an investor pays for accrued interest, the investor's confirmation
of purchase will report to him the amount of accrued interest for which he
paid. These investors will receive the accrued interest amount as part of
their first monthly distribution. Accordingly, these investors should
reduce their tax basis by the accrued interest amount after the first
monthly distribution.
An investor will recognize taxable gain or loss when all or part of his
pro rata portion of a Bond is disposed of by the Fund. An investor will
also be considered to have disposed of all or a portion of his pro rata
portion of each Bond when he sells or redeems all or some of his Units. An
investor who is treated as having acquired his pro rata portion of a Bond
at a premium will be required to amortize the premium over the term of the
Bond. The amortization is only a reduction of basis for the investor's pro
rata portion of the Bond and does not result in any deduction against the
investor's income. Therefore, under some circumstances, an investor may
recognize taxable gain when his pro rata portion of a Bond is disposed of
for an amount equal to or less than his original tax basis therefor.
Under Section 265 of the Internal Revenue Code, a non-corporate investor
is not entitled to a deduction for his pro rata share of fees and expenses
of the Fund, because the fees and expenses are incurred in connection with
the production of tax-exempt income. Further, if borrowed funds are used by
an investor to purchase or carry Units of the Fund, interest on this
indebtedness will not be deductible for federal income tax purposes. In
addition, under rules used by the Internal Revenue Service, the purchase of
Units may be considered to have been made with borrowed funds even though
the borrowed funds are not directly traceable to the purchase of Units.
Under the income tax laws of the State and City of New York, the Fund is
not an association taxable as a corporation and income received by the Fund
will be treated as the income of the investors in the same manner as for
federal income tax purposes, but will not necessarily be tax-exempt.
The foregoing discussion relates only to U.S. federal and certain
aspects of New York State and City income taxes. Depending on their state
of residence, investors may be subject to state and local taxation and
should consult their own tax advisers in this regard.
* * *
In the opinion of bond counsel rendered on the date of issuance of each
Bond, the interest on each Bond is excludable from gross income under existing
law for regular federal income tax purposes (except in certain circumstances
depending on the investor) but may be subject to state and local taxes, and
interest on some or all of the Bonds may become subject to regular federal
income tax, perhaps retroactively to their date of issuance, as a result of
changes in federal law or as a result of the failure of issuers (or other users
of the proceeds of the Bonds) to comply with certain ongoing requirements. If
the interest on a Bond should be determined to be taxable, the
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<PAGE>
Bond would generally have to be sold at a substantial discount. In addition,
investors could be required to pay income tax on interest received prior to the
date on which the interest is determined to be taxable.
Neither the Sponsors nor Davis Polk & Wardwell have made or will make any
review of the proceedings relating to the issuance of the Bonds or the basis for
these opinions and there can be no assurance that the issuer (and other users)
will comply with any ongoing requirements necessary for a Bond to maintain its
tax-exempt character.
RECORDS AND REPORTS
The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Fund,
including a current list of the Bonds and a copy of the Indenture, and
supplemental information on the operations of the Fund and the risks associated
with the Bonds held by the Fund, which may be inspected by investors at
reasonable times during business hours.
With each distribution, the Trustee includes a statement of the interest
and any other receipts being distributed. Within five days after deposit of
Bonds in exchange or substitution for Bonds (or contracts) previously deposited,
the Trustee will send a notice to each investor, identifying both the Bonds
removed and the replacement bonds deposited. The Trustee sends each investor of
record an annual report summarizing transactions in the Fund's accounts and
amounts distributed during the year and Bonds held, the number of Units
outstanding and the Redemption Price at year end, the interest received by the
Fund on the Bonds, the gross proceeds received by the Fund from the disposition
of any Bond (resulting from redemption or payment at maturity or sale of any
Bond), and the fees and expenses paid by the Fund, among other matters. The
Trustee will also furnish annual information returns to each investor and to the
Internal Revenue Service. Investors are required to report to the Internal
Revenue Service the amount of tax-exempt interest received during the year.
Investors may obtain copies of Bond evaluations from the Trustee to enable them
to comply with federal and state tax reporting requirements. Fund accounts are
audited annually by independent accountants selected by the Sponsors. Audited
financial statements are available from the Trustee on request.
TRUST INDENTURE
The Fund is a 'unit investment trust' created under New York law by a Trust
Indenture among the Sponsors, the Trustee and the Evaluator. This Prospectus
summarizes various provisions of the Indenture, but each statement is qualified
in its entirety by reference to the Indenture.
The Indenture may be amended by the Sponsors and the Trustee without
consent by investors to cure ambiguities or to correct or supplement any
defective or inconsistent provision, to make any amendment required by the SEC
or other governmental agency or to make any other change not materially adverse
to the interest of investors (as determined in good faith by the Sponsors). The
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor in the Fund
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified on the substance of any amendment.
The Trustee may resign upon notice to the Sponsors. It may be removed by
investors holding 51% of the Units at any time or by the Sponsors without the
consent of investors if it becomes incapable of acting or bankrupt, its affairs
are taken over by public authorities, or if under certain conditions the
Sponsors determine in good faith that its replacement is in the best interest of
the investors. The Evaluator may resign or be removed by the Sponsors and the
Trustee without the investors' consent. The resignation or removal of either
becomes effective upon acceptance of appointment by a successor; in this case,
the Sponsors will use their best efforts to appoint a successor promptly;
however, if upon resignation no successor has accepted appointment within 30
days after notification, the resigning Trustee or Evaluator may apply to a court
of competent jurisdiction to appoint a successor.
Any Sponsor may resign so long as one Sponsor with a net worth of
$2,000,000 remains and is agreeable to the resignation. A new Sponsor may be
appointed by the remaining Sponsors and the Trustee to assume the duties of the
resigning Sponsor. If there is only one Sponsor and it fails to perform its
duties or becomes incapable of acting or bankrupt or its affairs are taken over
by public authorities, the Trustee may appoint a successor Sponsor at reasonable
rates of compensation, terminate the Indenture and liquidate the Fund or
continue to act as Trustee without a Sponsor. Merrill Lynch, Pierce, Fenner &
Smith Incorporated has been appointed as Agent for the Sponsors by the other
Sponsors.
The Sponsors, the Trustee and the Evaluator are not liable to investors or
any other party for any act or omission in the conduct of their responsibilities
absent bad faith, willful misfeasance, negligence (gross negligence
12
<PAGE>
in the case of a Sponsor or the Evaluator) or reckless disregard of duty. The
Indenture contains customary provisions limiting the liability of the Trustee.
MISCELLANEOUS
LEGAL OPINION
The legality of the Units has been passed upon by Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017, as special counsel for the
Sponsors.
AUDITORS
The Statement of Condition in Part A of the Prospectus was audited by
Deloitte & Touche LLP, independent accountants, as stated in their opinion. It
is included in reliance upon that opinion given on the authority of that firm as
experts in accounting and auditing.
TRUSTEE
The Trustee and its address are stated in Part A of the Prospectus. The
Trustee is subject to supervision by the Federal Deposit Insurance Corporation,
the Board of Governors of the Federal Reserve System and either the Comptroller
of the Currency or state banking authorities.
SPONSORS
The Sponsors are listed in Part A of the Prospectus. They may include
Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly-owned subsidiary of
Merrill Lynch Co. Inc.; Smith Barney Inc., an indirect wholly-owned subsidiary
of The Travelers Inc.; Prudential Securities Incorporated, an indirect
wholly-owned subsidiary of the Prudential Insurance Company of America; Dean
Witter Reynolds, Inc., a principal operating subsidiary of Dean Witter Discover
& Co. and PaineWebber Incorporated, a wholly-owned subsidiary of PaineWebber
Group Inc. Each Sponsor, or one of its predecessor corporations, has acted as
Sponsor of a number of series of unit investment trusts. Each Sponsor has acted
as principal underwriter and managing underwriter of other investment companies.
The Sponsors, in addition to participating as members of various selling groups
or as agents of other investment companies, execute orders on behalf of
investment companies for the purchase and sale of securities of these companies
and sell securities to these companies in their capacities as brokers or dealers
in securities.
PUBLIC DISTRIBUTION
In the initial offering period Units will be distributed to the public
through the Underwriting Account and dealers who are members of the National
Association of Securities Dealers, Inc. The initial offering period is 30 days
or less if all Units are sold. If some Units initially offered have not been
sold, the Sponsors may extend the initial offering period for up to four
additional successive 30-day periods.
The Sponsors intend to qualify Units for sale in all states in which
qualification is deemed necessary through the Underwriting Account and by
dealers who are members of the National Association of Securities Dealers, Inc.;
however, Units of a State trust will be offered for sale only in the State for
which the trust is named, except that Units of a New Jersey trust will also be
offered in Connecticut, Units of a Florida trust will also be offered in New
York and Units of a New York trust will also be offered in Connecticut, Florida
and Puerto Rico. The Sponsors do not intend to qualify Units for sale in any
foreign countries and this Prospectus does not constitute an offer to sell Units
in any country where Units cannot lawfully be sold. Sales to dealers and to
introducing dealers, if any, will initially be made at prices which represent a
concession from the Public Offering Price, but the Agent for the Sponsors
reserves the right to change the rate of any concession from time to time. Any
dealer or introducing dealer may reallow a concession up to the concession to
dealers.
UNDERWRITERS' AND SPONSORS' PROFITS
Upon sale of the Units, the Underwriters will be entitled to receive sales
charges. The Sponsors also realize a profit or loss on deposit of the Bonds
equal to the difference between the cost of the Bonds to the Fund (based on the
offer side evaluation on the initial date of deposit) and the Sponsors' cost of
the Bonds. In addition, a Sponsor or Underwriter may realize profits or sustain
losses on Bonds it deposits in the Fund which were acquired from underwriting
syndicates of which it was a member. During the initial offering period, the
Underwriting Account also may realize profits or sustain losses as a result of
fluctuations after the initial date of deposit in the Public Offering Price of
the Units. In maintaining a secondary market for Units, the Sponsors will also
realize profits or sustain losses in the amount of any difference between the
prices at which they buy Units and the prices at which they resell these Units
(which include the sales charge) or the prices at which they redeem the Units.
Cash, if any,
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<PAGE>
made available by buyers of Units to the Sponsors prior to a settlement date for
the purchase of Units may be used in the Sponsors' businesses to the extent
permitted by Rule 15c3-3 under the Securities Exchange Act of 1934 and may be of
benefit to the Sponsors.
FUND PERFORMANCE
Information on the performance of the Fund for various periods, on the
basis of changes in Unit price plus the amount of income and principal
distributions reinvested, may be included from time to time in advertisements,
sales literature, reports and other information furnished to current or
prospective investors. Total return figures are not averaged, and may not
reflect deduction of the sales charge, which would decrease the return. Average
annualized return figures reflect deduction of the maximum sales charge. No
provision is made for any income taxes payable.
Past performance may not be indicative of future results. The Fund is not
actively managed. Unit price and return fluctuate with the value of the Bonds in
the Portfolio, so there may be a gain or loss when Units are sold.
Fund performance may be compared to performance on the same basis (with
distributions reinvested) of Moody's Municipal Bond Averages or performance data
from publications such as Lipper Analytical Services, Inc., Morningstar
Publications, Inc., Money Magazine, The New York Times, U.S. News and World
Report, Barron's Business Week, CDA Investment Technology, Inc., Forbes Magazine
or Fortune Magazine. As with other performance data, performance comparisons
should not be considered representative of the Fund's relative performance for
any future period.
DEFINED ASSET FUNDS
Municipal Investment Trust Funds have provided investors with tax-free
income for more than 30 years. For decades informed investors have purchased
unit investment trusts for dependability and professional selection of
investments. Defined Asset Funds' philosophy is to allow investors to 'buy with
knowledge' (because, unlike managed funds, the portfolio of municipal bonds and
the return are relatively fixed) and 'hold with confidence' (because the
portfolio is professionally selected and regularly reviewed). Defined Asset
Funds offers an array of simple and convenient investment choices, suited to fit
a wide variety of personal financial goals--a buy and hold strategy for capital
accumulation, such as for children's education or retirement, or attractive,
regular current income consistent with the preservation of principal. Tax-exempt
income can help investors keep more today for a more secure financial future. It
can also be important in planning because tax brackets may increase with higher
earnings or changes in tax laws. Unit investment trusts are particularly suited
for the many investors who prefer to seek long-term income by purchasing sound
investments and holding them, rather than through active trading. Few
individuals have the knowledge, resources or capital to buy and hold a
diversified portfolio on their own; it would generally take a considerable sum
of money to obtain the breadth and diversity that Defined Asset Funds offer.
One's investment objectives may call for a combination of Defined Asset Funds.
One of the most important investment decisions you face may be how to
allocate your investments among asset classes. Diversification among different
kinds of investments can balance the risks and rewards of each one. Most
investment experts recommend stocks for long-term capital growth. Long-term
corporate bonds offer relatively high rates of interest income. By purchasing
both defined equity and defined bond funds, investors can receive attractive
current income, as well as growth potential, offering some protection against
inflation. From time to time various advertisements, sales literature, reports
and other information furnished to current or prospective investors may present
the average annual compounded rate of return of selected asset classes over
various periods of time, compared to the rate of inflation over the same
periods.
EXCHANGE OPTION--MUNICIPAL INVESTMENT TRUST FUND ONLY.
You may exchange Fund Units for units of certain other Defined Asset Funds
subject only to a reduced sales charge. You may exchange your units of any
Select Ten Portfolio, of any other Defined Asset Fund with a regular maximum
sales charge of at least 3.50%, or of any unaffiliated unit trust with a regular
maximum sales charge of at least 3.0%, for Units of this Fund at their relative
net asset values, subject only to a reduced sales charge, or to any remaining
Deferred Sales Charge, as applicable.
To make an exchange, you should contact your financial professional to find
out what suitable Exchange Funds are available and to obtain a prospectus. You
may acquire units of only those Exchange Funds in which the Sponsors are
maintaining a secondary market and which are lawfully for sale in the state
where you reside. Except for the reduced sales charge, an exchange is a taxable
event normally requiring recognition of any gain or loss on the units exchanged.
However, the Internal Revenue Service may seek to disallow a loss if the
portfolio of the
14
<PAGE>
units acquired is not materially different from the portfolio of the units
exchanged; you should consult your own tax advisor. If the proceeds of units
exchanged are insufficient to acquire a whole number of Exchange Fund units, you
may pay the difference in cash (not exceeding the price of a single unit
acquired).
As the Sponsors are not obligated to maintain a secondary market in any
series, there can be no assurance that units of a desired series will be
available for exchange. The Exchange Option may be amended or terminated at any
time without notice.
SUPPLEMENTAL INFORMATION
Upon written or telephonic request to the Trustee shown in Part A of this
Prospectus, investors will receive at no cost to the investor supplemental
information about the Fund, which has been filed with the SEC and is hereby
incorporated by reference. The supplemental information includes more detailed
risk factor disclosure about the types of Bonds that may be part of the Fund's
Portfolio, general risk disclosure concerning any letters of credit or insurance
securing certain Bonds, and general information about the structure and
operation of the Fund.
15
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APPENDIX A
DESCRIPTION OF RATINGS (AS DESCRIBED BY THE RATING COMPANIES THEMSELVES)
STANDARD & POOR'S RATINGS GROUP, A DIVISION OF MCGRAW-HILL, INC.
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA--Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A--Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB--Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB, B, CCC, CC--Debt rated BB, B, CCC and CC is regarded, on balance, as
predominately speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
The ratings may be modified by the addition of a plus or minus sign to show
relative standing within the major rating categories.
A provisional rating, indicated by 'p' following a rating, assumes the
successful completion of the project being financed by the issuance of the debt
being rated and indicates that payment of debt service requirements is largely
or entirely dependent upon the successful and timely completion of the project.
This rating, however, while addressing credit quality subsequent to completion
of the project, makes no comment on the likelihood of, or the risk of default
upon failure of, such completion.
NR--Indicates that no rating has been requested, that there is insufficient
information on which to base a rating or that Standard & Poor's does not rate a
particular type of obligation as a matter of policy.
MOODY'S INVESTORS SERVICE, INC.
Aaa--Bonds which are rated Aaa are judged to be 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.
Ba--Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
a-1
<PAGE>
B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Rating symbols may include numerical modifiers 1, 2 or 3. The numerical
modifier 1 indicates that the security ranks at the high end, 2 in the
mid-range, and 3 nearer the low end, of the generic category. These modifiers of
rating symbols give investors a more precise indication of relative debt quality
in each of the historically defined categories.
Conditional ratings, indicated by 'Con.', are sometimes given when the
security for the bond depends upon the completion of some act or the fulfillment
of some condition. Such bonds are given a conditional rating that denotes their
probable credit stature upon completion of that act or fulfillment of that
condition.
NR--Should no rating be assigned, the reason may be one of the following:
(a) an application for rating was not received or accepted; (b) the issue or
issuer belongs to a group of securities that are not rated as a matter of
policy; (c) there is a lack of essential data pertaining to the issue or issuer
or (d) the issue was privately placed, in which case the rating is not published
in Moody's publications.
FITCH INVESTORS SERVICE, INC.
AAA--These bonds are considered to be investment grade and of the highest
quality. The obligor has an extraordinary ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA--These bonds are considered to be investment grade and of high quality.
The obligor's ability to pay interest and repay principal, while very strong, is
somewhat less than for AAA rated securities or more subject to possible change
over the term of the issue.
A--These bonds are considered to be investment grade and of good quality.
The obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB--These bonds are considered to be investment grade and of satisfactory
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however are more likely to weaken this ability than bonds with higher ratings.
A '+' or a '-' sign after a rating symbol indicates relative standing in
its rating.
DUFF & PHELPS CREDIT RATING CO.
AAA--Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA--High credit quality. Protection factors are strong. Risk is modest but
may vary slightly from time to time because of economic condtions.
A--Protection factors are average but adequate. However, risk factors are
more variable and greater in periods of economic stress.
A '+' or a '-' sign after a rating symbol indicates relative standing in
its rating.
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APPENDIX B
SALES CHARGE SCHEDULES FOR DEFINED ASSET FUNDS, MUNICIPAL SERIES
DEFERRED AND UP-FRONT SALES CHARGES. Units purchased during the first year
of the Fund will be subject to periodic deferred and contingent deferred sales
charges. Units purchased in the second through fifth year will be subject to an
up-front sales charge as well as periodic deferred and contingent deferred sales
charges. Units purchased thereafter will be subject only to an up-front sales
charge. During the first five years of the Fund, a fixed periodic deferred sales
charge of $2.75 per Unit is payable on 20 quarterly payment dates occurring on
the 10th day of February, May, August and November, commencing no earlier than
45 days after the initial date of deposit. Investors purchasing Units on the
initial date of deposit and holding for at least five years, for example, would
incur total periodic deferred sales charges of $55.00 per Unit. Because of the
time value of money, however, as of the initial date of deposit this periodic
deferred sales charge obligation would, at current interest rates, equate to an
up-front sales charge of approximately 4.75%.
On the Fund's initial offering date, the Public Offering Price per Unit
will be $1,000. Subsequently, the Public Offering Price per Unit will fluctuate.
As the periodic deferred sales charge is a fixed dollar amount irrespective of
the Public Offering Price, it will represent a varying percentage of the Public
Offering Price. An up-front sales charge will be imposed on all unit purchases
after the first year of the Fund. The following table illustrates the combined
maximum up-front and periodic deferred sales charges that would be incurred by
an investor who purchases Units at the beginning of each of the first five years
of the Fund (based on a constant Unit price) and holds them through the fifth
year of the Fund:
</TABLE>
<TABLE><CAPTION>
TOTAL
UP-FRONT SALES CHARGE MAXIMUM UP-FRONT AND PERIODIC
----------------------------------------------------------- AMOUNT DEFERRED SALES
YEAR OF UNIT AS PERCENT OF PUBLIC AS PERCENT OF NET AMOUNT PER DEFERRED PER CHARGES
PURCHASE OFFERING PRICE AMOUNT INVESTED $1,000 INVESTED $1,000 INVESTED PER $1,000 INVESTED
- ------------------- --------------------- ------------------- --------------- --------------- ---------------------
<S> <C> <C> <C> <C> <C>
1 None None None $ 55.00 $ 55.00
2 1.10% 1.11% $ 11.00 44.00 55.00
3 2.20 2.25 22.00 33.00 55.00
4 3.30 3.41 33.00 22.00 55.00
5 4.40 4.60 44.00 11.00 55.00
</TABLE>
CONTINGENT DEFERRED SALES CHARGE. Units redeemed or repurchased within 4
years after the Fund's initial date of deposit will not only incur the periodic
deferred sales charge until the quarter of redemption or repurchase but will
also be subject to a contingent deferred sales charge:
YEAR SINCE FUND'S
INITIAL DATE OF CONTINGENT DEFERRED
DEPOSIT SALES CHARGE PER UNIT
- --------------------- ---------------------
1 $ 25.00
2 15.00
3 10.00
4 5.00
5 and thereafter None
The contingent deferred sales charge is waived on any redemption or
repurchase of Units after the death (including the death of a single joint
tenant with rights of survivorship) or disability (as defined in the Internal
Revenue Code) of an investor, provided the redemption or repurchase is requested
within one year of the death or initial determination of disability. The
Sponsors may require receipt of satisfactory proof of disability before
releasing the portion of the proceeds representing the amount of the contingent
deferred sales charge waived.
To assist investors in understanding the total costs of purchasing units
during the first four years of the Fund and disposing of those units by the
fifth year, the following tables set forth the maximum combined up-front,
periodic and contingent deferred sales charges that would be incurred (assuming
a constant Unit price) by an investor:
<TABLE><CAPTION>
UNITS PURCHASED ON INITIAL OFFERING DATE
YEAR OF UNIT DEFERRED SALES CONTINGENT DEFERRED
DISPOSITION UP-FRONT SALES CHARGE CHARGE SALES CHARGE TOTAL SALES CHARGES
- ------------------- --------------------- ----------------- ------------------- -------------------
<S> <C> <C> <C> <C>
1 None $ 11.00 $ 25.00 $ 36.00
2 None 22.00 15.00 37.00
3 None 33.00 10.00 43.00
4 None 44.00 5.00 49.00
5 None 55.00 0.00 55.00
b-1
<PAGE>
<CAPTION>
UNITS PURCHASED ON FIRST ANNIVERSARY OF FUND
YEAR OF UNIT DEFERRED SALES CONTINGENT DEFERRED
DISPOSITION UP-FRONT SALES CHARGE CHARGE SALES CHARGE TOTAL SALES CHARGES
- ------------------- --------------------- ----------------- ------------------- -------------------
<S> <C> <C> <C> <C>
2 $ 11.00 $ 11.00 $ 15.00 $ 37.00
3 11.00 22.00 10.00 43.00
4 11.00 33.00 5.00 49.00
5 11.00 44.00 0.00 55.00
<CAPTION>
UNITS PURCHASED ON SECOND ANNIVERSARY OF FUND
YEAR OF UNIT DEFERRED SALES CONTINGENT DEFERRED
DISPOSITION UP-FRONT SALES CHARGE CHARGE SALES CHARGE TOTAL SALES CHARGES
- ------------------- --------------------- ----------------- ------------------- -------------------
<S> <C> <C> <C> <C>
3 $ 22.00 $ 11.00 $ 10.00 $ 43.00
4 22.00 22.00 5.00 49.00
5 22.00 33.00 0.00 55.00
<CAPTION>
UNITS PURCHASED ON THIRD ANNIVERSARY OF FUND
YEAR OF UNIT DEFERRED SALES CONTINGENT DEFERRED
DISPOSITION UP-FRONT SALES CHARGE CHARGE SALES CHARGE TOTAL SALES CHARGES
- ------------------- --------------------- ----------------- ------------------- -------------------
<S> <C> <C> <C> <C>
4 $ 33.00 $ 11.00 $ 5.00 $ 49.00
5 33.00 22.00 0.00 55.00
<CAPTION>
UNITS PURCHASED ON FOURTH ANNIVERSARY OF FUND
YEAR OF UNIT DEFERRED SALES CONTINGENT DEFERRED
DISPOSITION UP-FRONT SALES CHARGE CHARGE SALES CHARGE TOTAL SALES CHARGES
- ------------------- --------------------- ----------------- ------------------- -------------------
<S> <C> <C> <C> <C>
5 $ 44.00 $ 11.00 $ 0.00 $ 55.00
</TABLE>
b-2
<PAGE>
APPENDIX C
SALES CHARGE SCHEDULES FOR MUNICIPAL INVESTMENT TRUST FUND
INITIAL OFFERING
<TABLE><CAPTION>
SALES CHARGE
(GROSS UNDERWRITING PROFIT)
----------------------------------
AS PERCENT OF AS PERCENT OF DEALER CONCESSION AS PRIMARY MARKET
OFFER SIDE PUBLIC NET AMOUNT PERCENT OF PUBLIC CONCESSION TO
NUMBER OF UNITS OFFERING PRICE INVESTED OFFERING PRICE INTRODUCING DEALERS
- ----------------------------------- ------------------- ------------- --------------------- -------------------
MONTHLY PAYMENT SERIES, MULTISTATE SERIES, INSURED SERIES
<S> <C> <C> <C> <C>
Less than 250...................... 4.50% 4.712% 2.925% $ 32.40
250 - 499.......................... 3.50 3.627 2.275 25.20
500 - 749.......................... 3.00 3.093 1.950 21.60
750 - 999.......................... 2.50 2.564 1.625 18.00
1,000 or more...................... 2.00 2.041 1.300 14.40
<CAPTION>
INTERMEDIATE SERIES (TEN YEAR MATURITIES)
<S> <C> <C> <C> <C>
Less than 250...................... 4.00% 4.167% 2.600% $ 28.80
250 - 499.......................... 3.00 3.093 1.950 21.60
500 - 749.......................... 2.50 2.564 1.625 18.00
750 - 999.......................... 2.00 2.041 1.300 14.40
1,000 or more...................... 1.50 1.523 0.975 10.00
<CAPTION>
INTERMEDIATE SERIES (SHORT INTERMEDIATE MATURITIES)
<S> <C> <C> <C> <C>
Less than 250...................... 2.75% 2.828% 1.788% $ 19.80
250 - 499.......................... 2.25 2.302 1.463 16.20
500 - 749.......................... 1.75 1.781 1.138 12.60
750 - 999.......................... 1.25 1.266 0.813 9.00
1,000 or more...................... 1.00 1.010 0.650 7.20
</TABLE>
SECONDARY MARKET
ACTUAL SALES CHARGE AS DEALER CONCESSION AS
PERCENT OF EFFECTIVE PERCENT OF EFFECTIVE
NUMBER OF UNITS SALES CHARGE SALES CHARGE
- ----------------- ------------------------- -------------------------
1-249 100% 65%
250-499 80 52
500-749 60 39
750-999 45 29.25
1,000 or more 35 22.75
EFFECTIVE SALES CHARGE
AS PERCENT AS PERCENT
TIME TO OF BID SIDE OF PUBLIC
MATURITY EVALUATION OFFERING PRICE
- ---------------------------- ------------- -----------------
Less than six months 0% 0%
Six months to 1 year 0.756 0.75
Over 1 year to 2 years 1.523 1.50
Over 2 years to 4 years 2.564 2.50
Over 4 years to 8 years 3.627 3.50
Over 8 years to 15 years 4.712 4.50
Over 15 years 5.820 5.50
For this purpose, a Bond will be considered to mature on its stated
maturity date unless it has been called for redemption or funds or securities
have been placed in escrow to redeem it on an earlier date, or is subject to a
mandatory tender, in which case the earlier date will be considered the maturity
date.
c-1
<PAGE>
<PAGE>
DEFINED
ASSET FUNDSSM
SPONSORS: MUNICIPAL INVESTMENT
Merrill Lynch, TRUST FUND
Pierce, Fenner & Smith Incorporated Multistate Series 7B
Defined Asset Funds (Unit Investment Trusts)
P.O. Box 9051 PROSPECTUS PART A
Princeton, N.J. 08543-9051 This Prospectus consists of a Part A and
(609) 282-8500 a Part B. The Prospectus does not
Smith Barney Inc. contain all of the information with
Unit Trust Department respect to the investment company set
388 Greenwich Street--23rd Floor forth in its registration statement and
New York, NY 10013 exhibits relating thereto which have
1-800-223-2532 been filed with the Securities and
Prudential Securities Incorporated Exchange Commission, Washington, D.C.
One Seaport Plaza under the Securities Act of 1933 and the
199 Water Street Investment Company Act of 1940, and to
New York, N.Y. 10292 which reference is hereby made.
(212) 776-1000 No person is authorized to give any
Dean Witter Reynolds Inc. information or to make any
Two World Trade Center--59th Floor representations with respect to this
New York, N.Y. 10048 investment company not contained in this
(212) 392-2222 Prospectus; and any information or
EVALUATOR: representation not contained herein must
Kenny S&P Evaluation Services, not be relied upon as having been
a division of J. J. Kenny Co., Inc. authorized. This Prospectus does not
65 Broadway constitute an offer to sell, or a
New York, N.Y. 10006 solicitation of an offer to buy,
INDEPENDENT ACCOUNTANTS: securities in any state to any person to
Deloitte & Touche LLP whom it is not lawful to make such offer
2 World Financial Center in such state.
9th Floor
New York, N.Y. 10281-1414
TRUSTEE:
The Bank of New York
Unit Investment Trust Department
P.O. Box 974
Wall Street Station
New York, N.Y. 10268-0974
1-800-221-7771
12631--7/95
<PAGE>
DEFINED ASSET FUNDS--
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES
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 of Form S-6.
The cross-reference sheet (incorporated by reference to the Cross-Reference
Sheet to the Registration Statement on Form S-6 of Defined Asset Funds Municipal
Insured Series, 1933 Act File No. 33-54565).
The Prospectus.
The Signatures.
The following exhibits:
1.1.1--Form of Standard Terms and Conditions of Trust Effective as of
October 21, 1993 (incorporated by reference to Exhibit 1.1.1 to the
Registration Statement of Municipal Investment Trust Fund,
Multistate Series--48, 1933 Act File No. 33-50247).
4.1.1--Consent of the Evaluator.
4.1.2--Consent of the Rating Agency.
5.1 --Consent of independent accountants.
9.1 --Information Supplement (incorporated by reference to Exhibit 9.1 to
Post-Effective Amendment No. 4 to the Registration Statement of
Municipal Investment Trust Fund, Monthly Payment Series--506, 1933
Act File No. 33-37730)
R-1
<PAGE>
DEFINED ASSET FUNDS--
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES 7B
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES 7B,
CERTIFIES THAT IT MEETS ALL OF THE REQUIREMENTS FOR EFFECTIVENESS OF THIS
REGISTRATION STATEMENT PURSUANT TO RULE 485(B) UNDER THE SECURITIES ACT OF 1933
AND HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 5TH DAY OF JULY,
1995.
SIGNATURES APPEAR ON PAGES R-3, R-4, R-5 AND R-6.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Smith Barney Inc.
has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
A majority of the members of the Board of Directors of Prudential
Securities Incorporated has signed this Registration Statement or Amendment to
the Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.
A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Merrill Lynch, Pierce, have been filed
Fenner & Smith Incorporated: under
Form SE and the
following 1933 Act
File
Number: 33-43466
and 33-51607
HERBERT M. ALLISON, JR.
BARRY S. FREIDBERG
EDWARD L. GOLDBERG
STEPHEN L. HAMMERMAN
JEROME P. KENNEY
DAVID H. KOMANSKY
DANIEL T. NAPOLI
THOMAS H. PATRICK
JOHN L. STEFFENS
DANIEL P. TULLY
ROGER M. VASEY
ARTHUR H. ZEIKEL
By
ERNEST V. FABIO
(As authorized signatory for Merrill Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
<PAGE>
PRUDENTIAL SECURITIES INCORPORATED
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Prudential Securities have been filed
Incorporated: under Form SE and
the following 1933
Act File Number:
33-41631
JAMES T. GAHAN
ALAN D. HOGAN
HOWARD A. KNIGHT
LELAND B. PATON
HARDWICK SIMMONS
By
WILLIAM W. HUESTIS
(As authorized signatory for Prudential Securities
Incorporated and Attorney-in-fact for the persons
listed above)
R-4
<PAGE>
SMITH BARNEY INC.
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Smith Barney Inc.: have been filed
under the 1933 Act
File Number:
33-49753 and
33-51607
STEVEN D. BLACK
JAMES BOSHART III
ROBERT A. CASE
JAMES DIMON
ROBERT DRUSKIN
ROBERT F. GREENHILL
JEFFREY LANE
JACK L. RIVKIN
By GINA LEMON
(As authorized signatory for
Smith Barney Inc. and
Attorney-in-fact for the persons listed above)
R-5
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following 1933
the Board of Directors of Dean Witter Act File Number: 33-17085
Reynolds Inc.:
NANCY DONOVAN
CHARLES A. FIUMEFREDDO
JAMES F. HIGGINS
STEPHEN R. MILLER
PHILIP J. PURCELL
THOMAS C. SCHNEIDER
WILLIAM B. SMITH
By
MICHAEL D. BROWNE
(As authorized signatory for
Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)
R-6
<PAGE>
EXHIBIT 4.1
KENNY S&P EVALUATION SERVICES
A DIVISION OF J.J. KENNY CO., INC.
65 BROADWAY
NEW YORK, N.Y. 10006-2511
TELEPHONE (212) 770-4422
FAX 212/797-8681
July 5, 1995
Frank A. Ciccotto
Vice President
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Unit Investment Trust Division
P.O. Box 9051
Princeton, New Jersey 08543-9051
The Bank of New York
101 Barclay Street
New York, New York 10286
RE: DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 7B
Gentlemen:
We have examined the post-effective Amendment to the Registration Statement
File No. 33-34754 for the above-captioned trust. We hereby acknowledge that
Kenny S&P Evaluation Services, a division of J. J. Kenny Co., Inc. is currently
acting as the evaluator for the trust. We hereby consent to the use in the
Amendment of the reference to Kenny S&P Evaluation Services, a division of J. J.
Kenny Co., Inc. as evaluator.
In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the 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 copies of this letter with the Securities
and Exchange Commission.
Sincerely,
FRANK A. CICCOTTO
<PAGE>
EXHIBIT 4.1.2
STANDARD & POOR'S RATINGS GROUP,
A DIVISION OF McGRAW-HILL, INC.
MANAGED FUNDS GROUP
25 Broadway
New York, New York 10004-1064
Telephone 212/208-8287
FAX 212/208-8034
July 5, 1995
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Defined Asset Funds
P.O. Box 9051
Princeton, New Jersey 08543-9051
The Bank of New York
101 Barclay Street
New York, New York 10286
RE: Defined Asset Funds--Municipal Investment Trust Fund,
Multistate Series 7B (New Jersey)
We have received the fifth post-effective amendment to the registration
statement SEC file number 33-34754 for the above captioned trust.
Since the portfolio is composed solely of securities covered by bond
insurance policies that insure against default in the payment of principal and
interest on the securities and such policies have been issued by one or more
insurance companies which have been assigned 'AAA' claims paying ability ratings
by S&P, we reaffirm the assignment of a 'AAA' rating to the units of the trust
and a 'AAA' rating to the securities contained in the trust. Please note that
securities covered by bond insurance policies that insure such securities only
as long as they remain in the trust are rated 'AAA' only as long as they remain
in the trust.
You have permission to use the name of Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc. and the above-assigned ratings in connection with
your dissemination of information relating to these units, provided that it is
understood that the ratings are not 'market' ratings nor recommendations to buy,
hold, or sell the units of the trust or the securities in the trust. Further, it
should be understood that the rating on the units does not take into account the
extent to which fund expenses or portfolio asset sales for less than the fund's
purchase price will reduce payment to the unit holders of the interest and
principal required to be paid on the portfolio assets. S&P reserves the right to
advise its own clients, subscribers, and the public of the ratings. S&P relies
on the sponsor and its counsel, accountants, and other experts for the accuracy
and completeness of the information submitted in connection with the ratings.
S&P does not independently verify the truth or accuracy of any such information.
This letter evidences our consent to the use of the name of Standard &
Poor's Ratings Group, a division of McGraw-Hill, Inc. in connection with the
rating assigned to the units in the amendment referred to above. However, this
letter should not be construed as a consent by us, within the meaning of Section
7 of the Securities Act of 1933, to the use of the name of Standard & Poor's
Ratings Group, a division of McGraw-Hill, Inc. in connection with the ratings
assigned to the securities contained in the trust. You are hereby authorized to
file a copy of this letter with the Securities and Exchange Commission.
We are pleased to have had the opportunity to be of service to you. If we
can be of further help, please do not hesitate to call upon us.
Sincerely,
SANFORD B. BRAGG
Managing Director
Exhibit 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee of
Defined Asset Funds--Municipal Investment Trust Fund--Multistate Series 7B
(Maryland, Minnesota, North Carolina and New Jersey Trusts):
We consent to the use in this Post-Effective Amendment No. 5 to Registration
Statement No. 33-34754 of our opinion dated June 19, 1995 appearing in the
Prospectus, which is part of such Registration Statement, and to the reference
to us under the heading 'Auditors' in such Prospectus.
DELOITTE & TOUCHE LLP
New York, N.Y.
July 5, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM MULTISTATE SEREIS - 7B (MARYLAND) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> MARYLAND TRUST
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 2,961,178
<INVESTMENTS-AT-VALUE> 3,215,524
<RECEIVABLES> 0
<ASSETS-OTHER> 48,860
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,264,384
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,961,191
<SHARES-COMMON-STOCK> 3,081
<SHARES-COMMON-PRIOR> 3,081
<ACCUMULATED-NII-CURRENT> 48,847
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 254,346
<NET-ASSETS> 3,264,384
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 215,993
<OTHER-INCOME> 0
<EXPENSES-NET> 6,313
<NET-INVESTMENT-INCOME> 209,680
<REALIZED-GAINS-CURRENT> 232
<APPREC-INCREASE-CURRENT> 9,610
<NET-CHANGE-FROM-OPS> 219,522
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 209,600
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 43,350
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (33,428)
<ACCUMULATED-NII-PRIOR> 48,767
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM MULTISTATE SERIES - 7B (MINNESOTA) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> MINNESOTA TRUST
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 2,948,828
<INVESTMENTS-AT-VALUE> 3,197,206
<RECEIVABLES> 0
<ASSETS-OTHER> 67,174
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,264,380
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16,882
<TOTAL-LIABILITIES> 16,882
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,951,128
<SHARES-COMMON-STOCK> 3,102
<SHARES-COMMON-PRIOR> 3,307
<ACCUMULATED-NII-CURRENT> 47,992
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 248,378
<NET-ASSETS> 3,247,498
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 221,246
<OTHER-INCOME> 0
<EXPENSES-NET> 6,550
<NET-INVESTMENT-INCOME> 214,696
<REALIZED-GAINS-CURRENT> 19,199
<APPREC-INCREASE-CURRENT> (36,806)
<NET-CHANGE-FROM-OPS> 197,089
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 214,698
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 11,060
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 205
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (241,934)
<ACCUMULATED-NII-PRIOR> 50,588
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM MULTISTATE SERIES - 7B (NEW JERSEY) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> NEW JERSEY TRUST
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 2,971,263
<INVESTMENTS-AT-VALUE> 3,209,792
<RECEIVABLES> 0
<ASSETS-OTHER> 64,280
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,274,072
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 10,639
<TOTAL-LIABILITIES> 10,639
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,976,275
<SHARES-COMMON-STOCK> 3,050
<SHARES-COMMON-PRIOR> 3,120
<ACCUMULATED-NII-CURRENT> 48,629
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 238,529
<NET-ASSETS> 3,263,433
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 217,113
<OTHER-INCOME> 0
<EXPENSES-NET> 6,396
<NET-INVESTMENT-INCOME> 210,717
<REALIZED-GAINS-CURRENT> 4,128
<APPREC-INCREASE-CURRENT> (9,346)
<NET-CHANGE-FROM-OPS> 205,499
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 210,822
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 5,277
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 70
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (82,375)
<ACCUMULATED-NII-PRIOR> 49,573
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM MULTISTATE SERIES - 7B (NORTH CAROLINA) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> NORTH CAROLINA TRUST
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 2,799,605
<INVESTMENTS-AT-VALUE> 3,006,609
<RECEIVABLES> 0
<ASSETS-OTHER> 48,542
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,055,151
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,799,629
<SHARES-COMMON-STOCK> 2,958
<SHARES-COMMON-PRIOR> 3,013
<ACCUMULATED-NII-CURRENT> 48,518
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 207,004
<NET-ASSETS> 3,055,151
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 205,784
<OTHER-INCOME> 0
<EXPENSES-NET> 6,227
<NET-INVESTMENT-INCOME> 199,557
<REALIZED-GAINS-CURRENT> 3,953
<APPREC-INCREASE-CURRENT> (32,801)
<NET-CHANGE-FROM-OPS> 170,709
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 199,684
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 4,910
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 55
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (88,867)
<ACCUMULATED-NII-PRIOR> 49,371
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
July 5, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We hereby represent that the Post-Effective Amendments to the registered
unit investment trusts described in Exhibit A attached hereto do not contain
disclosures which would render them ineligible to become effective pursuant to
Rule 485(b) under the Securities Act of 1933.
Very truly yours,
Davis Polk & Wardwell
Attachment
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
1933 ACT 1940 ACT
FUND NAME CIK FILE NO. FILE NO.
- --------- --- -------- --------
<S> <C> <C> <C>
DEFINED ASSET FUNDS-MITF CA-43 747838 33-27522 811-1777
DEFINED ASSET FUNDS-GSIF GNMA SERIES 1W 893060 33-53181 811-2810
DEFINED ASSET FUNDS-MITF IS-166 803815 33-39366 811-1777
DEFINED ASSET FUNDS-MITF IS-178 803845 33-45958 811-1777
DEFINED ASSET FUNDS-MITF IS-191 803874 33-49447 811-1777
DEFINED ASSET FUNDS-MITF PUT-5 750011 2-92276 811-1777
DEFINED ASSET FUNDS-MITF ITS-190 868095 33-46843 811-1777
DEFINED ASSET FUNDS-MITF ITS-191 868096 33-46844 811-1777
DEFINED ASSET FUNDS-MITF ITS-205 868112 33-49425 811-1777
DEFINED ASSET FUNDS-MITF ITS-206 868113 33-49501 811-1777
DEFINED ASSET FUNDS- ITS-230 DAF 910376 33-53167 811-1777
DEFINED ASSET FUNDS- ITS-231 DAF 910377 33-53281 811-1777
DEFINED ASSET FUNDS-MITF MPS-481 803685 33-26840 811-1777
DEFINED ASSET FUNDS-MITF MPS-496 803703 33-33381 811-1777
DEFINED ASSET FUNDS- MPS-527 DAF 892745 33-49389 811-1777
DEFINED ASSET FUNDS-MITF MSS-33 895620 33-49427 811-1777
DEFINED ASSET FUNDS-MITF MSS-4 881828 33-47649 811-1777
DEFINED ASSET FUNDS- MSS-60 DAF 910006 33-52755 811-1777
DEFINED ASSET FUNDS-MITF MSS 6Y 847193 33-34132 811-1777
DEFINED ASSET FUNDS-MITF MSS 7A 847200 33-34404 811-1777
DEFINED ASSET FUNDS-MITF MSS 7B 847202 33-34754 811-1777
TOTAL: 21 FUNDS
</TABLE>
