AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 25, 1995
REGISTRATION NO. 33-35913
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------
POST-EFFECTIVE AMENDMENT NO. 5
TO
FORM S-6
------------------------------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
------------------------------------------
A. EXACT NAME OF TRUST:
DEFINED ASSET FUNDS--
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES 7J
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
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 PAINEWEBBER INCORPORATED DEAN WITTER REYNOLDS INC.
INCORPORATED 1285 AVENUE OF THE TWO WORLD TRADE
ONE SEAPORT PLAZA AMERICAS CENTER--59TH FLOOR
199 WATER STREET NEW YORK, N.Y. 10019 NEW YORK, N.Y. 10048
NEW YORK, N.Y. 10292
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
TERESA KONCICK, ESQ. LAURIE A. HESSLEIN DOUGLAS LOWE, ESQ.
P.O. BOX 9051 388 GREENWICH ST. 130 LIBERTY STREET--29TH
PRINCETON, N.J. NEW YORK, N.Y. 10013 FLOOR
08543-9051 NEW YORK, N.Y. 10006
LEE B. SPENCER, JR. ROBERT E. HOLLEY COPIES TO:
ONE SEAPORT PLAZA 1200 HARBOR BLVD. PIERRE DE SAINT PHALLE,
199 WATER STREET WEEHAWKEN, N.J. 07087 ESQ.
NEW YORK, N.Y. 10292 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 November
3, 1995 pursuant to paragraph (b) of Rule 485. / x /
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------------------------------------------
MUNICIPAL INVESTMENT This Defined Fund consists of fixed portfolios of
TRUST FUND long-term bonds issued by a single state and its
MULTISTATE SERIES 7J local governments and authorities or by certain
(UNIT INVESTMENT U.S. territories or possessions. Each Trust is
TRUSTS) formed to provide interest income which in the
- ------------------------------opinion of counsel is, with certain exceptions,
/ / DESIGNED FOR DOUBLE exempt from Federal income taxes and from certain
TAX-FREE INCOME state and local taxes of the State for which the
/ / DEFINED PORTFOLIOS OF Trust is named but may be subject to other state
MUNICIPAL BONDS and local taxes. There is no assurance that this
/ / MONTHLY INCOME objective will be met because it is subject to the
CALIFORNIA INSURED TRUST continuing ability of issuers of the bonds to meet
FLORIDA INSURED TRUST their principal and interest requirements.
MARYLAND TRUST Furthermore, the market value of the bonds, and
therefore the value of the Units, will fluctuate
with changes in interest rates and other factors.
Certain Trusts may be 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.
Minimum Purchase: One Unit
-------------------------------------------------
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 DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------------------------------------
SPONSORS: PART A OF THIS PROSPECTUS MAY NOT BE DISTRIBUTED
Merrill Lynch, UNLESS ACCOMPANIED BY MUNICIPAL INVESTMENT TRUST
Pierce, Fenner & Smith FUND PROSPECTUS PART B.
Incorporated INVESTORS SHOULD READ BOTH PARTS OF THIS
Smith Barney Inc. PROSPECTUS CAREFULLY AND RETAIN THEM FOR FUTURE
Prudential Securities REFERENCE.
Incorporated INQUIRIES SHOULD BE DIRECTED TO THE TRUSTEE AT
Dean Witter Reynolds Inc. 1-800-221-7771.
PaineWebber Incorporated PROSPECTUS PART A DATED NOVEMBER 3, 1995.
<PAGE>
- --------------------------------------------------------------------------------
Def ined Asset FundsSM
Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $100 billion sponsored since over the last 25 years. Each
Defined Asset Fund is a portfolio of preselected securities. Each portfolio is
divided into 'units' representing equal shares of the underlying assets. Each
unit receives an equal share of income and principal distributions.
Defined Asset Funds offer several defined 'distinctives'. You know in advance
what you are investing in and that changes in the portfolio are limited - a
defined portfolio. Most defined bond funds pay interest monthly - defined
income. The portfolio offers a convenient and simple way to invest - simplicity
defined.
Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:
o Municipal portfolios
o Corporate portfolios
o Government portfolios
o Equity portfolios
o International portfolios
The terms of Defined Funds are as short as one year or as long as 30 years.
Special defined funds are available including: insured funds, double and triple
tax-free funds and funds with 'laddered maturities' to help protect against
changing interest rates. Defined Asset Funds are offered by prospectus only.
- ----------------------------------------------------------------
Defined Multistate Series
- ----------------------------------------------------------------
Our defined portfolios of municipal bonds offer you a simple and convenient way
to earn tax-free monthly income. And by purchasing Defined Asset Funds, you not
only receive professional selection but also gain the advantage of reduced risk
by investing in bonds of several different issuers.
INVESTMENT OBJECTIVE
To provide interest income exempt from regular federal income taxes through
investment in a fixed portfolio consisting primarily of municipal bonds issued
by or on behalf of a single state and its local governments and authorities.
Units may also be exempt from certain state and local taxes for residents of the
State.
DIVERSIFICATION
Each Portfolio contains a number of different bond issues. Spreading your
investment among different issuers reduces your risk, but does not eliminate it,
especially since each Portfolio contains bonds of only one State. Because of
maturities, sales or other dispositions of bonds, the size, composition and
return of the Portfolio will change over time. The information in this
prospectus is as of July 31, 1995, the evaluation date
- ----------------------------------------------------------------
Defining Your Portfolio
- ----------------------------------------------------------------
PROFESSIONAL SELECTION AND SUPERVISION
Each Portfolio contains a variety of bonds selected by experienced buyers and
research analysts. The Fund is not actively managed; however, it is regularly
reviewed and a bond can be sold if retaining it is considered detrimental to
investors' interests.
MONTHLY FEDERALLY TAX-FREE INTEREST INCOME
Each Portfolio pays monthly income, even though the bonds generally pay interest
semi-annually.
INSURANCE
The bonds included in certain Trusts may be insured. This insurance guarantees
the timely payment of principal and interest on the bonds, but does not
guarantee the value of the bonds or the units. Insurance does not cover
accelerated payments of principal or any increase in interest payments or
premiums payable on mandatory redemptions, including if interest on a bond is
determined to be taxable. (See Bonds Backed by Letters of Credit or Insurance in
Part B).
BOND CALL FEATURES
It is possible that during periods of falling interest rates, a bond with a
coupon higher than current market rates will be prepaid or 'called', at the
option of the bond issuer, before its expected maturity. When bonds are
initially callable, the price is usually at a premium to par which then declines
to par over time. Bonds may also be subject to a mandatory sinking fund or have
extraordinary redemption provisions. For example, if the bond's proceeds are not
able to be used as intended the bond may be redeemed. This redemption and the
sinking fund are often at par.
A-2
<PAGE>
CALL PROTECTION
Although many bonds are subject to optional refunding or call provisions, we
selected bonds with call protection. This call protection means that any bond in
a Portfolio generally cannot be called for a number of years after the initial
date of deposit (which was August 9, 1990) and thereafter at a declining premium
over par.
TAX INFORMATION
Based on the opinion of bond counsel, income from the bonds held by this Fund is
generally 100% exempt under existing laws from regular federal income tax and
certain state and local personal income taxes for residents of a particular
State. Any gain on a disposition of the underlying bonds or units will be
subject to tax.
- ----------------------------------------------------------------
Defining Your Investment
- ----------------------------------------------------------------
PUBLIC OFFERING PRICE
The Public Offering Price as of the evaluation date, is based on the aggregate
bid side value of the underlying bonds in the Portfolio, divided by the number
of units outstanding, plus a sales charge. The Public Offering Price on any
subsequent date will vary. An amount equal to principal cash, if any, as well as
net accrued but undistributed interest on the unit is added to the Public
Offering Price. The underlying bonds are evaluated by an independent evaluator
at 3:30 p.m. Eastern time on every business day.
REINVESTMENT OPTION
You can elect to automatically reinvest your distributions into a separate
portfolio of federally tax-exempt bonds. Most or all of the bonds in that
portfolio, however, will not be insured or exempt from state and local taxes.
Reinvesting helps to compound your income free of federal income taxes.
PRINCIPAL DISTRIBUTIONS
Principal from sales, redemptions and maturities of bonds in the Portfolios will
be distributed to investors periodically when the amount to be distributed is
more than $5.00 per unit.
SELLING YOUR INVESTMENT
You may sell your units at any time. Your price is based on the then current net
asset value of the Portfolio (based on the lower bid side evaluation of the
bonds, as determined by an independent evaluator), plus principal cash, if any,
as well as accrued interest. There is no fee for selling your units.
- ----------------------------------------------------------------
Defining Your Risks
- ----------------------------------------------------------------
RISK FACTORS
Unit price fluctuates and could be adversely affected by increasing interest
rates as well as the financial condition of the issuers of the bonds and any
insurance companies backing certain of the bonds. Because of the possible
maturity, sale or other disposition of securities, the size, composition and
return of the portfolio may change at any time. Because of the sales charges,
returns of principal and fluctuations in unit price, among other reasons, the
sale price will generally be less than the cost of your units. Unit prices could
also be adversely affected if a limited trading market exists in any security to
be sold. There is no guarantee that the Fund will achieve its investment
objective.
In addition, each Portfolio has fewer bond issues than a national fund, and is
concentrated in bonds of issuers located in only one State. There may be
additional risk from decreased diversification as well as from factors
particular to that State.
A-3
<PAGE>
- --------------------------------------------------------------------------------
Defined California Insured Trust
- --------------------------------------------------------------------------------
PORTFOLIO DIVERSIFICATION
The Portfolio contains 6 California bonds.
TYPES OF BONDS
The Portfolio consists of municipal bonds of the following types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / General Obligation 21%
/ / Hospitals/Health Care Facilities 23%
/ / Refunded Bonds 37%
/ / State/Local Municipal Electric
Utilities 20%
INSURANCE
The approximate percentage of the aggregate face amount of the Portfolio insured
by each insurance company is:
AMBAC Indemnity Corporation 38%
Financial Guaranty Insurance Company 21%
MBIA Insurance Corporation 41%
RISK FACTORS
The Portfolio is concentrated in refunded bonds and bonds of California issuers
and is subject to additional risk from decreased diversification as well as from
factors that may be particular to California, which are briefly described on
page A-5.
PREMIUM AND DISCOUNT ISSUES
On the evaluation date, 80% of the bonds were valued at a premium over par and
20% at a discount from par (see Risk Factors in Part B).
TERMINATION DATE
The Portfolio will generally terminate no later than the maturity date of the
last maturing bond listed in the Portfolio. The Portfolio may be terminated if
the value is less than 40% of the face amount of bonds deposited. On the
evaluation date the value of the Portfolio was 77% of the face amount of bonds
deposited.
- ----------------------------------------------------------------
Defining Your Income
- ----------------------------------------------------------------
WHAT YOU MAY EXPECT
(PAYABLE ON THE 25TH DAY OF THE MONTH TO HOLDERS OF RECORD ON THE 10TH DAY OF
THE MONTH):
Regular Monthly Income per unit: $ 5.51
Annual Income per unit: $ 66.19
These figures are estimates determined as of the evaluation date and actual
payments may vary.
- ----------------------------------------------------------------
Defining Your Costs
- ----------------------------------------------------------------
PUBLIC OFFERING PRICE PER UNIT $1,109.64
The Public Offering Price as of July 31, 1995, the evaluation date, is based on
the aggregate bid side value of the bonds ($4,645,379), divided by the number of
units outstanding (4,387), plus a sales charge of 4.57%. An amount equal to
principal cash, if any, as well as net accrued but undistributed interest on the
unit is added to the Public Offering Price.
The per unit bid side redemption and secondary market repurchase price as of the
evaluation date was $1,058.90 ($50.74 less than the Public Offering Price).
SALES CHARGE
Although the Trust is a unit investment trust rather than a mutual fund, the
following information is presented to permit a comparison of fees and an
understanding of the direct or indirect costs and expenses that you pay.
As a %
of Secondary
Market Public
Offering Price
-----------------
Maximum Sales Charges 5.50%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
Per Unit
--------------
Trustee's Fee $ 0.70
Maximum Portfolio Supervision and Bookkeeping
Fees $ 0.45
Evaluator's Fee $ 0.25
Other Operating Expenses $ 0.78
--------------
TOTAL $ 2.18
A-4
<PAGE>
- --------------------------------------------------------------------------------
California Taxes and Risks
- --------------------------------------------------------------------------------
CALIFORNIA RISK FACTORS
The State of California continues to confront budgetary concerns. State
expenditures in recent years have exceeded projected amounts mainly because of
increased health and welfare caseloads, lower property taxes (requiring State
support for certain education expenses), lower than expected federal government
payments for immigration related costs, significant additional costs associated
with the construction and operation of correctional institutions and
extraordinary expenditures related to the January 1994 Los Angeles earthquake
and the recent severe flooding in various parts of the State. Also, in December
1994, Orange County, California and its Investment Pool filed for bankruptcy in
connection with substantial losses experienced by the Pool. The County has since
defaulted on certain of its obligations and substantial budget deficits may be
experienced by the County and other public agencies which participate in the
Pool. The ultimate financial impact of these events upon the County and other
Pool investors and the State of California, generally, or the liquidity or value
of their securities, cannot be predicted.
To balance the budget, the Governor of California has proposed, among other
things, a series of revenue shifts from local government, reliance on increased
federal aid and reductions in state spending. Major adjustments reflected in
recent budgets include a shift in property taxes from cities, counties, special
districts and redevelopment agencies to school and community college districts,
severe reductions in support for health and welfare programs and higher
education, and various other cuts in services, suspensions of tax credits and
payment deferrals.
Certain California constitutional amendments, legislative measures,
executive orders, administrative regulations and voter initiatives could have
adverse effects on the California economy. Among these are measures that have
established tax, spending or appropriations limits and prohibited the imposition
of certain new taxes, authorized the transfers of tax liabilities and
reallocations of tax receipts among governmental entities and provided for
minimum levels of funding.
Certain bonds in the Trust may be subject to provisions of California law
that could adversely affect payments on those bonds or limit the remedies
available to bondholders. Among these are bonds of health care institutions
which are subject to the strict rules and limits regarding reimbursement
payments of California's Medi-Cal Program for health care services to welfare
beneficiaries, and bonds secured by liens on real property.
General obligation bonds of the State of California are currently rated A1
by Moody's and A by Standard & Poor's.
CALIFORNIA TAXES
In the opinion of O'Melveny & Myers, Los Angeles, California, special
counsel on California tax matters, under existing California law:
The Trust is not an association taxable as a corporation for California tax
purposes. Each holder will be considered the owner of a pro rata portion of the
Trust Fund and will be deemed to receive his pro rata portion of the income
therefrom. To the extent interest on the Debt Obligations is exempt from
California personal income taxes, said interest is similarly exempt from
California personal income taxes in the hands of the holders, except to the
extent such holders are banks or corporations subject to the California
franchise tax. Holders will be subject to California income tax on any gain on
the disposition of all or part of his pro rata portion of a Debt Obligation in
the Trust Fund. A holder will be considered to have disposed of all or part of
his pro rata portion of each Debt Obligation when he sells or redeems all or
some of his Units. A holder will also be considered to have disposed of all or
part of his pro rata portion of a Debt Obligation when all or part of the Debt
Obligation is sold by the Trust Fund or is redeemed or paid at maturity. The
Debt Obligations and the Units are not taxable under the California personal
property tax law.
A-5
<PAGE>
- --------------------------------------------------------------------------------
Defined Florida Insured Trust
- --------------------------------------------------------------------------------
PORTFOLIO DIVERSIFICATION
The Portfolio contains 7 Florida bonds.
TYPES OF BONDS
The Portfolio consists of municipal bonds of the following types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Hospitals/Health Care Facilities 23%
/ / Industrial Development Revenue 17%
/ / Refunded Bonds 39%
/ / Moral Obligations 21%
INSURANCE
The approximate percentage of the aggregate face amount of the Portfolio insured
by each insurance company is:
Financial Guaranty Insurance Company 44%
MBIA Insurance Corporation 40%
AMBAC Indemnity Corporation 16%
RISK FACTORS
The Portfolio is concentrated in Refunded bonds. In addition, 21% of the bonds
represent moral obligations. (See Risk Factors in Part B.) The Portfolio is also
concentrated in bonds of Florida issuers and is subject to additional risk from
decreased diversification as well as from factors that may be particular to
Florida, which are briefly described on page A-7.
PREMIUM AND DISCOUNT ISSUES
On the evaluation date, 89% of the bonds were valued at a premium over par and
11% at a discount from par (see Risk Factors in Part B).
TERMINATION DATE
The Portfolio will generally terminate no later than the maturity date of the
last maturing bond listed in the Portfolio. The Portfolio may be terminated if
the value is less than 40% of the face amount of bonds deposited. On the
evaluation date the value of the Portfolio was 79% of the face amount of bonds
deposited.
- ----------------------------------------------------------------
Defining Your Income
- ----------------------------------------------------------------
WHAT YOU MAY EXPECT
(PAYABLE ON THE 25TH DAY OF THE MONTH TO HOLDERS OF RECORD ON THE 10TH DAY OF
THE MONTH):
Regular Monthly Income per unit: $ 5.58
Annual Income per unit: $ 66.99
These figures are estimates determined as of the evaluation date and actual
payments may vary.
- ----------------------------------------------------------------
Defining Your Costs
- ----------------------------------------------------------------
PUBLIC OFFERING PRICE PER UNIT $1,118.27
The Public Offering Price as of July 31, 1995, the evaluation date, is based on
the aggregate bid side value of the bonds ($2,612,151), divided by the number of
units outstanding (2,438), plus a sales charge of 4.19%. An amount equal to
principal cash, if any, as well as net accrued but undistributed interest on the
unit is added to the Public Offering Price.
The per unit bid side redemption and secondary market repurchase price as of the
evaluation date was $1,071.43 ($46.84 less than the Public Offering Price).
SALES CHARGE
Although the Trust is a unit investment trust rather than a mutual fund, the
following information is presented to permit a comparison of fees and an
understanding of the direct or indirect costs and expenses that you pay.
As a %
of Secondary
Market Public
Offering Price
-----------------
Maximum Sales Charges 5.50%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
Per Unit
---------------
Trustee's Fee $ 0.69
Maximum Portfolio Supervision and Bookkeeping
Fees $ 0.45
Evaluator's Fee $ 0.45
Other Operating Expenses $ 1.07
---------------
TOTAL $ 2.66
A-6
<PAGE>
- --------------------------------------------------------------------------------
Florida Taxes and Risks
- --------------------------------------------------------------------------------
FLORIDA RISK FACTORS
The financial condition of the State of Florida is affected by various
national, economic, social and environmental policies and conditions.
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 govenments to satisfy the Bonds, are
affected by numerous factors. South Florida is susceptible to international
trade and currency imbalances and to economic problems in Central and South
America due to its geographical location and its involvement with foreign trade,
tourism and investment capital. The central and northern portions of the State,
on the other hand, could be impacted by problems in the agricultural sector,
including crop failures, severe weather conditions or other agriculture-related
problems, particularly with regard to the citrus and sugar industries. The
State's economy also has historically been somewhat dependent on the tourism and
construction industries and is sensitive to trends in those sectors.
General obligation bonds of the State are currently rated Aa by Moody's
Investors Service and AA by Standard & Poor's.
FLORIDA TAXES
In the opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida, special counsel on Florida tax matters, under
existing Florida law:
1. The Fund will not be subject to income, franchise or other taxes of a
similar nature imposed by the State of Florida or its subdivisions,
agencies or instrumentalities.
2. Because Florida does not impose a personal income tax, non-corporate
investors in Units of the Fund will not be subject to any Florida income
taxes with respect to (i) amounts received by the Fund on the Bonds it
holds; (ii) amounts which are distributed by the Fund to non-corporate
investors in Units of the Fund or (iii) any gain realized on the sale or
redemption of Bonds by the Fund or of a Unit of the Fund by a non-corporate
investor. However, corporations as defined in Chapter 220, Florida Statutes
(1991), which are otherwise subject to Florida income taxation will be
subject to tax on their respective share of any income and gain realized by
the Fund and on any gain realized by a corporate investor on the sale or
redemption of Units of the Fund by the corporate investor.
3. The Units will be subject to Florida estate taxes only if held by
Florida residents, or if held by non-residents deemed to have business
sites in Florida. The Florida estate tax is limited to the amount of the
credit for state death taxes provided for in Section 2011 of the Internal
Revenue Code, as amended.
4. Bonds issued by the State of Florida or its political subdivisions are
exempt from Florida intangible personal property taxation under Chapter
199, Florida Statutes (1991), as amended. Bonds issued by the Government of
Puerto Rico or by the Government of Guam, or by their authority, are exempt
by Federal statute from taxes such as the Florida intangible personal
property tax. Thus, the Fund will not be subject to Florida intangible
personal property tax on any Bonds in the Fund issued by the State of
Florida or its political subdivisions, by the Government of Puerto Rico or
by its authority or by the Government of Guam or by its authority. In
addition, the Units of the Fund will not be subject to the Florida
intangible personal property tax if the Fund invests solely in such
Florida, Puerto Rico or Guam debt obligations.
A-7
<PAGE>
- --------------------------------------------------------------------------------
Defined Maryland Trust
- --------------------------------------------------------------------------------
PORTFOLIO DIVERSIFICATION
The Portfolio contains 6 Maryland bonds and 1 Puerto Rico bond.
TYPES OF BONDS
The Portfolio consists of municipal bonds of the following types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Housing 17%
/ / Lease Rental Appropriation 14%
/ / Refunded Bonds 65%
/ / State/Local Municipal Electric
Utilities 4%
INSURANCE
The approximate percentage of the aggregate face amount of the Portfolio insured
by each insurance company is:
AMBAC Indemnity Corporation 17%
Capital Guaranty Insurance Company 14%
Financial Guaranty Insurance Company 15%
MBIA Insurance Corporation 26%
Approximately 72% of the bonds included in the Portfolio are insured.
RISK FACTORS
The Portfolio is concentrated in refunded bonds. (See Risk Factors in Part B.)
The Portfolio is also concentrated in bonds of Maryland issuers and is subject
to additional risk from decreased diversification as well as from factors that
may be particular to Maryland, which are briefly described on page A-9.
PREMIUM AND DISCOUNT ISSUES
On the evaluation date, 100% of the bonds were valued at a premium over par (see
Risk Factors in Part B).
TERMINATION DATE
The Portfolio will generally terminate no later than the maturity date of the
last maturing bond listed in the Portfolio. The Portfolio may be terminated if
the value is less than 40% of the face amount of bonds deposited. On the
evaluation date the value of the Portfolio was 100% of the face amount of bonds
deposited.
- ----------------------------------------------------------------
Defining Your Income
- ----------------------------------------------------------------
WHAT YOU MAY EXPECT
(PAYABLE ON THE 25TH DAY OF THE MONTH TO HOLDERS OF RECORD ON THE 10TH DAY OF
THE MONTH):
Regular Monthly Income per unit: $ 5.69
Annual Income per unit: $ 68.38
These figures are estimates determined as of the evaluation date and actual
payments may vary.
- ----------------------------------------------------------------
Defining Your Costs
- ----------------------------------------------------------------
PUBLIC OFFERING PRICE PER UNIT $1,162.44
The Public Offering Price as of July 31, 1995, the evaluation date, is based on
the aggregate bid side value of the bonds ($3,255,746), divided by the number of
units outstanding (2,912), plus a sales charge of 3.82%. An amount equal to
principal cash, if any, as well as net accrued but undistributed interest on the
unit is added to the Public Offering Price.
The per unit bid side redemption and secondary market repurchase price as of the
evaluation date was $1,118.04 ($44.40 less than the Public Offering Price).
SALES CHARGE
Although the Trust is a unit investment trust rather than a mutual fund, the
following information is presented to permit a comparison of fees and an
understanding of the direct or indirect costs and expenses that you pay.
As a %
of Secondary
Market Public
Offering Price
-----------------
Maximum Sales Charges 5.50%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
Per Unit
---------------
Trustee's Fee $ 0.71
Maximum Portfolio Supervision and Bookkeeping
Fees $ 0.46
Evaluator's Fee $ 0.38
Other Operating Expenses $ 0.96
---------------
TOTAL $ 2.51
A-8
<PAGE>
- --------------------------------------------------------------------------------
Maryland Taxes and Risks
- --------------------------------------------------------------------------------
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 subject to a
three-year phase-in period, interest on Debt Obligations is not subject to
the Maryland Franchise Tax imposed on 'financial institutions'.
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 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 subject to a three-year phase-in period, profits
realized on the sale or exchange of Debt Obligations are not subject to the
Maryland Franchise Tax imposed on 'financial institutions'.
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.
A-9
<PAGE>
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR CALIFORNIA RESIDENTS
- --------------------------------------------------------------------------------
COMBINED
EFFECTIVE
TAXABLE INCOME 1995* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0- 23,350 $ 0- 39,000 20.10 5.01 5.63 6.26 6.88 7.51 8.14 8.76 9.39 10.01
$ 23,350- 56,550 $ 39,000- 94,250 34.70 6.13 6.89 7.66 8.42 9.19 9.95 10.72 11.48 12.25
$ 94,250-143,600 37.42 6.39 7.19 7.99 8.79 9.59 10.39 11.19 11.98 12.78
$ 56,550-117,950 37.90 6.44 7.25 8.05 8.86 9.66 10.47 11.27 12.08 12.88
$143,600-256,500 42.40 6.94 7.81 8.68 9.55 10.42 11.28 12.15 13.02 13.89
$117,950-256,500 43.04 7.02 7.90 8.78 9.66 10.53 11.41 12.29 13.17 14.04
OVER $256,500 OVER $256,500 46.24 7.44 8.37 9.30 10.23 11.16 12.09 13.02 13.95 14.88
<CAPTION>
FOR FLORIDA RESIDENTS
- --------------------------------------------------------------------------------
EFFECTIVE
TAXABLE INCOME 1995* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0- 23,350 $ 0- 39,000 15.00 4.71 5.29 5.88 6.47 7.06 7.65 8.24 8.82 9.41
$ 23,350- 56,550 $ 39,000- 94,250 28.00 5.56 6.25 6.94 7.64 8.33 9.03 9.72 10.42 11.11
$ 56,550-117,950 $ 94,250-143,600 31.00 5.80 6.52 7.25 7.97 8.70 9.42 10.14 10.87 11.59
$117,950-256,500 $143,600-256,500 36.00 6.25 7.03 7.81 8.59 9.38 10.16 10.94 11.72 12.50
OVER $256,500 OVER $256,500 39.60 6.62 7.45 8.28 9.11 9.93 10.76 11.59 12.42 13.25
<CAPTION>
FOR MARYLAND RESIDENTS
- --------------------------------------------------------------------------------
EFFECTIVE
TAXABLE INCOME 1995* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0- 23,350 $ 0- 39,000 19.25 4.95 5.57 6.19 6.81 7.43 8.05 8.67 9.29 9.91
$ 23,350- 56,550 $ 39,000- 94,250 31.80 5.87 6.60 7.33 8.06 8.80 9.53 10.26 11.00 11.73
$ 94,250-143,600 34.45 6.10 6.86 7.63 8.39 9.15 9.92 10.68 11.44 12.20
$ 58,550-127,950 35.14 6.17 6.94 7.71 8.48 9.25 10.02 10.79 11.56 12.33
$117,950-256,500 $143,600-256,500 39.84 6.65 7.48 8.31 9.14 9.97 10.80 11.64 12.47 13.30
OVER $256,500 OVER $256,500 43.22 7.04 7.93 8.81 9.69 10.57 11.45 12.33 13.21 14.09
</TABLE>
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates
projected 1995 federal and applicable State income tax rates and assumes that
all income would otherwise be taxed at the investor's highest tax rate. Yield
figures are for example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions or the possible partial disallowance of
deductions. Consequently, investors are urged to consult their own tax advisers
in this regard.
A-10
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST,
MULTISTATE SERIES - 7J (California, Florida and Maryland Trusts)
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Defined Asset Funds - Municipal Investment Trust,
Multistate Series - 7J (California, Florida and Maryland Trusts):
We have audited the accompanying statements of condition of Defined
Asset Funds - Municipal Investment Trust, Multistate Series - 7J
(California, Florida and Maryland Trusts), including the portfolios,
as of July 31, 1995 and the related statements of operations and of
changes in net assets for the years ended July 31, 1995, 1994 and
1993. These financial statements are the responsibility of the
Trustee. (See Notes 5.) Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Securities
owned at July 31, 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, Multistate Series - 7J
(California, Florida and Maryland Trusts) at July 31, 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.
September 27, 1995
D - 1
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST,
MULTISTATE SERIES - 7J (CALIFORNIA TRUST)
STATEMENT OF CONDITION
AS OF JULY 31, 1995
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $4,201,773) (Note 1).................... $4,645,379
Accrued interest receivable..................... 93,519
______________
Total trust property.................. 4,738,898
LESS LIABILITY - Advance from Trustee............. 8,869
______________
NET ASSETS, REPRESENTED BY:
4,387 units of fractional undivided
interest outstanding (Note 3)................. $4,661,870
Undistributed net investment income............. 68,159
____________
$4,730,029
==============
UNIT VALUE ($4,730,029/4,387 units)............... $1,078.19
==============
See Notes to Financial Statements.
D - 2
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST,
MULTISTATE SERIES - 7J (CALIFORNIA TRUST)
<TABLE><CAPTION>
STATEMENTS OF OPERATIONS
............Years Ended July 31,..........
1995 1994 1993
____ ____ ____
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income................................. $316,574 $344,256 $394,677
Trustee's fees and expenses..................... (5,934) (8,639) (8,233)
Sponsors' fees ................................. (1,401) (1,598) (1,475)
__________________________________________
Net investment income........................... 309,239 334,019 384,969
__________________________________________
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain on securities sold or
redeemed...................................... 46,689 83,399 59,466
Unrealized appreciation (depreciation)
of investments................................ 44,677 (315,254) 35,976
__________________________________________
Net realized and unrealized gain (loss) on
investments................................... 91,366 (231,855) 95,442
__________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................. $400,605 $102,164 $480,411
==========================================
</TABLE>
See Notes to Financial Statements.
D - 3
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST,
MULTISTATE SERIES - 7J (CALIFORNIA TRUST)
<TABLE><CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
............Years Ended July 31,..........
1995 1994 1993
____ ____ ____
<S> <C> <C> <C>
OPERATIONS:
Net investment income........................... $ 309,239 $ 334,019 $ 384,969
Realized gain on securities sold
or redeemed.................................. 46,689 83,399 59,466
Unrealized appreciation (depreciation) of
investments.................................. 44,677 (315,254) 35,976
__________________________________________
Net increase in net assets resulting
from operations.............................. 400,605 102,164 480,411
__________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income.......................................... (307,282) (335,592) (385,385)
Principal....................................... (21,831) (32,209) (7,581)
__________________________________________
Total distributions............................. (329,113) (367,801) (392,966)
__________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of 418,
558 and 424 units, respectively................. (436,581) (629,317) (469,973)
__________________________________________
NET DECREASE IN NET ASSETS........................ (365,089) (894,954) (382,528)
NET ASSETS AT BEGINNING OF YEAR................... 5,095,118 5,990,072 6,372,600
__________________________________________
NET ASSETS AT END OF YEAR......................... $4,730,029 $5,095,118 $5,990,072
==========================================
PER UNIT:
Income distributions during year................ $66.30 $66.83 $67.50
==========================================
Principal distributions during year............. $4.64 $6.31 $1.31
==========================================
Net asset value at end of year.................. $1,078.19 $1,060.38 $1,116.93
==========================================
TRUST UNITS OUTSTANDING AT END OF YEAR............ 4,387 4,805 5,363
==========================================
</TABLE>
See Notes to Financial Statements.
D - 4
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST,
MULTISTATE SERIES - 7J (CALIFORNIA 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 4,387 units at Date of Deposit............................................. $4,451,117
Less sales charge.................................................................. 200,310
_______________
Net amount applicable to Holders................................................... 4,250,807
Redemptions of units - net cost of 1,613 units redeemed less redemption
amounts.......................................................................... (179,741)
Realized gain on securities sold or redeemed....................................... 208,819
Principal distributions............................................................ (61,621)
Unrealized appreciation of investments............................................. 443,606
_______________
Net capital applicable to Holders.................................................. $4,661,870
===============
</TABLE>
4. INCOME TAXES
As of July 31, 1995, unrealized appreciation of investments, based on cost
for Federal income tax purposes,aggregated $443,606, all of which related
to appreciated securities. The cost of investment securities for Federal
income tax purposes was $4,201,773 at July 31, 1995.
5. CHANGE OF TRUSTEE
On March 1, 1995, The Bank of New York assumed all of the Trustee
responsibilities from Investors Bank & Trust Company.
D - 5
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST,
MULTISTATE SERIES - 7J
PORTFOLIO OF THE CALIFORNIA TRUST (INSURED)
AS OF JULY 31, 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 California Health Facilities Financing AAA $1,000,000 7.125% 2016 01/01/00 $ 996,980 $1,087,360
Authority, Revenue Refunding Bonds (Alexian @ 102.000
Brothers of San Jose, Inc.), Ser. 1990
(MBIA Ins.)
2 California Health Facilities Financing AAA 675,000 7.625 2015(6) 10/01/98 697,761 757,019
Authority, Insured Health Facilities Revenue @ 102.000
Bonds (Unihealth America), 1988 Ser. A
(AMBAC Ins.)
3 Castaic Lake, California, Water Agency, AAA 790,000 7.125 2016(6) 08/01/00 787,662 895,339
Certificates of Participation (Water System @ 102.000
Improvement Projects), Ser. 1990 (MBIA Ins.)
4 The City of Los Angeles, California, AAA 140,000 7.000 2021(6) 08/15/00 136,150 157,991
Certificates of Participation, Los Angeles @ 102.000
Convention and Exhibition Center Auth., 1990
Ser. (AMBAC Ins.)
5 City of Oakland, California, Special AAA 900,000 7.600 2021 08/01/98 928,521 993,150
Refunding Revenue Bonds (Pension Financing), @ 102.000
1988 Ser. A (Financial Guaranty Ins.)
6 Southern California Public Power Authority, AAA 855,000 5.000 2015 07/01/99 654,699 754,520
Power Project Revenue Refunding Bonds, Ser. @ 100.000
1989 A (AMBAC Ins.)
_______________ _____________ ___________
TOTAL $4,360,000 $4,201,773 $4,645,379
=============== ============= ===========
</TABLE>
See Notes to Portfolios on Page D - 17.
D - 6
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7J (FLORIDA TRUST)
STATEMENT OF CONDITION
AS OF JULY 31, 1995
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $2,352,780) (Note 1).................... $2,612,151
Accrued interest receivable..................... 37,375
Cash............................................ 5,571
______________
Total trust property.................. $2,655,097
==============
NET ASSETS, REPRESENTED BY:
2,438 units of fractional undivided
interest outstanding (Note 3)................. $2,618,808
Undistributed net investment income............. 36,289
____________
$2,655,097
==============
UNIT VALUE ($2,655,097/2,438 units)............... $1,089.05
==============
See Notes to Financial Statements.
D - 7
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7J (FLORIDA TRUST)
<TABLE><CAPTION>
STATEMENTS OF OPERATIONS
............Years Ended July 31,..........
1995 1994 1993
____ ____ ____
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income................................. $174,772 $180,212 $191,251
Trustee's fees and expenses..................... (5,494) (6,040) (5,350)
Sponsors' fees ................................. (964) (979) (970)
__________________________________________
Net investment income........................... 168,314 173,193 184,931
__________________________________________
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain on securities sold or
redeemed...................................... 6,651 8,953 30,652
Unrealized appreciation (depreciation)
of investments................................ (1,047) (89,306) 34,362
__________________________________________
Net realized and unrealized gain (loss) on
investments................................... 5,604 (80,353) 65,014
__________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................. $173,918 $ 92,840 $249,945
==========================================
</TABLE>
See Notes to Financial Statements.
D - 8
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7J (FLORIDA TRUST)
<TABLE><CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
............Years Ended July 31,..........
1995 1994 1993
____ ____ ____
<S> <C> <C> <C>
OPERATIONS:
Net investment income........................... $ 168,314 $ 173,193 $ 184,931
Realized gain on securities sold
or redeemed.................................. 6,651 8,953 30,652
Unrealized appreciation (depreciation) of
investments.................................. (1,047) (89,306) 34,362
__________________________________________
Net increase in net assets resulting
from operations.............................. 173,918 92,840 249,945
__________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income.......................................... (168,278) (173,512) (184,992)
Principal....................................... (5,466) (7,793) (2,824)
__________________________________________
Total distributions............................. (173,744) (181,305) (187,816)
__________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of 81,
70 and 207 units, respectively.................. (87,476) (77,359) (228,593)
__________________________________________
NET DECREASE IN NET ASSETS........................ (87,302) (165,824) (166,464)
NET ASSETS AT BEGINNING OF YEAR................... 2,742,399 2,908,223 3,074,687
__________________________________________
NET ASSETS AT END OF YEAR......................... $2,655,097 $2,742,399 $2,908,223
==========================================
PER UNIT:
Income distributions during year................ $67.21 $67.47 $67.62
==========================================
Principal distributions during year............. $2.17 $3.01 $1.03
==========================================
Net asset value at end of year.................. $1,089.05 $1,088.69 $1,123.30
==========================================
TRUST UNITS OUTSTANDING AT END OF YEAR............ 2,438 2,519 2,589
==========================================
</TABLE>
See Notes to Financial Statements.
D - 9
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7J (FLORIDA 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 2,438 units at Date of Deposit............................................. $2,483,513
Less sales charge.................................................................. 111,758
_______________
Net amount applicable to Holders................................................... 2,371,755
Redemptions of units - net cost of 862 units redeemed less redemption
amounts.......................................................................... (52,581)
Realized gain on securities sold or redeemed....................................... 57,838
Principal distributions............................................................ (17,575)
Unrealized appreciation of investments............................................. 259,371
_______________
Net capital applicable to Holders.................................................. $2,618,808
===============
</TABLE>
4. INCOME TAXES
As of July 31, 1995, unrealized appreciation of investments, based on cost
for Federal income tax purposes, aggregated $259,371, all of which related
to appreciated securities. The cost of investment securities for Federal
income tax purposes was $2,352,780 at July 31, 1995.
5. CHANGE OF TRUSTEE
On March 1, 1995, The Bank of New York assumed all of the Trustee
responsibilities from Investors Bank & Trust Company.
D - 10
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7J
PORTFOLIO OF THE FLORIDA TRUST (INSURED)
AS OF JULY 31, 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 City of Gulf Breeze, Florida, Local AAA $500,000 7.750% 2015 12/01/99 $520,955 $564,860
Government Loan Program Revenue Bonds, @ 102.000
Ser. 1985 E (Financial Guaranty Ins.)
2 Indian River County, Florida, Water and AAA 300,000 7.400 2019(6) 05/01/98 304,095
329,577
Sewer Revenue Refunding Bonds, Ser. 1989 @ 101.500
(Financial Guaranty Ins.)
3 Jacksonville, FL, Hlth. Facs. Auth. Hosp. AAA 300,000 7.250 2008 06/01/99 301,068 329,148
Rev. Rfdg. Bonds (Baptist Med. Ctr. Proj.), @ 102.000
Ser. 1989A (MBIA Ins.)
4 Marion County, Florida, Hospital District AAA 265,000 6.000 2020 10/01/99 228,926 262,591
Revenue Bonds, (Munroe Regional Medical @ 100.000
Center), Ser. 1989B (Financial Guaranty Ins.)
5 Martin County, Florida, Pollution Control AAA 400,000 7.300 2020 07/01/00 403,116 440,804
Revenue Refunding Bonds (Florida Power and @ 102.000
Light Company Project), Ser. 1990 (MBIA Ins.)
6 City of Sanford, Florida Water and Sewer AAA 390,000 6.000 2016(6) 10/01/96 339,280 400,171
Revenue Bonds, Ser. 1986 (AMBAC Ins.) @ 100.000
7 City of Winter Spring, Florida, Water and AAA 250,000 7.450 2020(6) 04/01/00 255,340 285,000
Sewer Revenue Bonds, Ser. 1990 (MBIA Ins.) @ 102.000
_______________ _____________ __________
TOTAL $2,405,000 $2,352,780 $2,612,151
=============== ============= ==========
</TABLE>
See Notes to Portfolios on Page D - 17.
D - 11
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7J (MARYLAND TRUST)
STATEMENT OF CONDITION
AS OF JULY 31, 1995
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $2,913,855) (Note 1).................... $3,255,746
Accrued interest receivable..................... 37,909
Cash............................................ 11,339
______________
Total trust property.................. 3,304,994
LESS LIABILITY - Redemptions payable.............. 66,731
______________
NET ASSETS, REPRESENTED BY:
2,912 units of fractional undivided
interest outstanding (Note 3)................. $3,192,931
Undistributed net investment income............. 45,332
____________
$3,238,263
==============
UNIT VALUE ($3,238,263/2,912 units)............... $1,112.04
==============
See Notes to Financial Statements.
D - 12
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7J (MARYLAND TRUST)
<TABLE><CAPTION>
STATEMENTS OF OPERATIONS
............Years Ended July 31,..........
1995 1994 1993
____ ____ ____
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income................................. $212,984 $215,881 $227,386
Trustee's fees and expenses..................... (5,063) (6,538) (5,951)
Sponsors' fees ................................. (943) (1,083) (1,060)
__________________________________________
Net investment income........................... 206,978 208,260 220,375
__________________________________________
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain on securities sold or
redeemed...................................... 5,856 16,186 11,319
Unrealized appreciation (depreciation)
of investments................................ 25,708 (131,709) 102,519
__________________________________________
Net realized and unrealized gain (loss) on
investments................................... 31,564 (115,523) 113,838
__________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................. $238,542 $ 92,737 $334,213
==========================================
</TABLE>
See Notes to Financial Statements.
D - 13
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7J (MARYLAND TRUST)
<TABLE><CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
............Years Ended July 31,..........
1995 1994 1993
____ ____ ____
<S> <C> <C> <C>
OPERATIONS:
Net investment income........................... $ 206,978 $ 208,260 $ 220,375
Realized gain on securities sold
or redeemed.................................. 5,856 16,186 11,319
Unrealized appreciation (depreciation) of
investments.................................. 25,708 (131,709) 102,519
__________________________________________
Net increase in net assets resulting
from operations.............................. 238,542 92,737 334,213
__________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income.......................................... (205,536) (208,584) (220,677)
Principal....................................... (10,482)
__________________________________________
Total distributions............................. (205,536) (219,066) (220,677)
__________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of 101,
94 and 100 units, respectively.................. (111,865) (109,330) (112,298)
__________________________________________
NET INCREASE (DECREASE) IN NET ASSETS............. (78,859) (235,659) 1,238
NET ASSETS AT BEGINNING OF YEAR................... 3,317,122 3,552,781 3,551,543
__________________________________________
NET ASSETS AT END OF YEAR......................... $3,238,263 $3,317,122 $3,552,781
==========================================
PER UNIT:
Income distributions during year................ $68.45 $68.54 $68.99
==========================================
Principal distributions during year............. $3.45
================
Net asset value at end of year.................. $1,112.04 $1,100.94 $1,143.48
==========================================
TRUST UNITS OUTSTANDING AT END OF YEAR............ 2,912 3,013 3,107
==========================================
</TABLE>
See Notes to Financial Statements.
D - 14
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7J (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 2,912 units at Date of Deposit............................................. $3,007,395
Less sales charge.................................................................. 135,321
_______________
Net amount applicable to Holders................................................... 2,872,074
Redemptions of units - net cost of 338 units redeemed less redemption
amounts.......................................................................... (40,335)
Realized gain on securities sold or redeemed....................................... 35,267
Principal distributions............................................................ (15,966)
Unrealized appreciation of investments............................................. 341,891
_______________
Net capital applicable to Holders.................................................. $3,192,931
===============
</TABLE>
4. INCOME TAXES
As of July 31, 1995, unrealized appreciation of investments, based on cost
for Federal income tax purposes, aggregated $341,891, all of which related
to appreciated securities. The cost of investment securities for Federal
income tax purposes was $2,913,855 July 31, 1995.
5. CHANGE OF TRUSTEE
On March 1, 1995, The Bank of New York assumed all of the Trustee
responsibilities from Investors Bank & Trust Company.
D - 15
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7J
PORTFOLIO OF THE MARYLAND TRUST
AS OF JULY 31, 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 Baltimore, MD, Certificates of Participation, AAA $ 60,000 7.250% 2016(6) 04/01/00 $ 60,250 $ 67,682
Ser. 1990 C (MBIA Ins.)(5) @ 102.000
410,000 7.250 2016 04/01/00 411,705 449,454
@ 102.000
2 Mayor and City Council of Baltimore, MD, Proj. AAA 310,000 6.500 2020(6) 07/01/00 287,025 336,347
and Refunding Revenue Bonds, (Waste Water @ 100.000
Projects), Ser. 1990 A (MBIA Ins.)(5)
3 Bel-Air, MD, Ctfs. of Ptcptn., Parking Fac. AAA 400,000 7.800 2010(6) 12/01/98 420,988 451,688
Rev. Bonds, Ser. 1988 (CGIC Ins.)(5) @ 102.000
4 State of Maryland, Community Development Aa(m) 500,000 7.375 2010 04/01/00 496,250 532,450
Administration, Department of Housing and @ 102.000
Community Development, Single Family
Program Bonds, 1990 Ser. 4
5 Maryland Health and Higher Educational AAA 500,000 7.000 2019(6) 07/01/00 490,835 561,180
Facilities Authority, Revenue Bonds, Sinai @ 102.000
Hospital of Baltimore Issue, Ser. 1990
(AMBAC Ins.)(5)
6 Maryland Health and Higher Educational AAA 450,000 6.750 2023(6) 07/01/00 430,011 500,364
Facilities Authority, Revenue Bonds, (Francis @ 102.000
Scott Key Medical Center Issue), Ser. 1990
(Financial Guaranty Ins.)(5)
7 Puerto Rico Elec. Pwr. Auth., Pwr. Rev. Bonds, AAA 205,000 7.125 2014(6) 07/01/99 199,822 228,421
Ser. O @ 101.500
A- 120,000 7.125 2014 07/01/99 116,969 128,160
@ 101.500
_______________ _____________ ___________
TOTAL $2,955,000 $2,913,855 $3,255,746
=============== ============= ===========
See Notes to Portfolios on Page D - 17.
D - 16
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 7J (California, Florida and Maryland Trusts)
NOTES TO PORTFOLIOS
AS OF JULY 31, 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 by
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 they 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.
(6) Bonds with an aggregate face amount of $1,605,000, $940,000 and
$1,925,000 for the California, Florida and Maryland Trusts,
respectively, have been pre-refunded and are expected to be called
for redemption on the optional redemption provision dates shown.
D - 17
<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.
<PAGE>
BUSINESS REPLY MAIL NO POSTAGE
FIRST CLASS PERMIT NO. 1313 NEW YORK, NY NECESSARY
IF MAILED
POSTAGE WILL BE PAID BY ADDRESSEE IN THE
THE BANK OF NEW YORK UNITED STATES
UNIT INVESTMENT TRUST DEPARTMENT
P.O. BOX 974
WALL STREET STATION
NEW YORK, NY 10268-0974
- --------------------------------------------------------------------------------
(Fold along this line.)
- --------------------------------------------------------------------------------
(Fold along this line.)
<PAGE>
SUPPLEMENT DATED AUGUST 14, 1995 TO PROSPECTUS--PART B
DEFINED ASSET FUNDS MUNICIPAL SERIES
MUNICIPAL INVESTMENT TRUST FUND
The following table replaces the table on page 5:
</TABLE>
<TABLE><CAPTION>
FINANCIAL INFORMATION
AS OF MARCH 31, 1995
(IN MILLIONS OF DOLLARS)
--------------------------------------
POLICYHOLDERS'
NAME DATE ESTABLISHED ADMITTED ASSETS SURPLUS
- ---------------------------------------- ----------------- --------------- ---------------------
<S> <C> <C> <C>
AMBAC Indemnity Corporation 1970 $ 2,204 $ 792
Asset Guaranty Insurance Co. (AA by
S&P).................................. 1988 166 77
Capital Guaranty Insurance Company...... 1986 309 171
Capital Markets Assurance Corp. 1987 210 138
Connie Lee Insurance Company 1987 195 108
Continental Casualty Company............ 1948 19,816 3,502
Financial Guaranty Insurance Company.... 1984 2,172 963
Financial Security Assurance Inc. 1984 806 341
Firemen's Insurance Company of Newark,
NJ.................................... 1855 2,038 390
Industrial Indemnity Co. (HIBI) 1920 1,719 309
MBIA Insurance Corporation.............. 1986 3,504 1,132
</TABLE>
The following is added on page 6 after the fourth sentence under the heading
"Litigation and Legislation":
From time to time, proposals are introduced in Congress to, among other
things, reduce federal income tax rates, impose a flat tax, exempt investment
income from tax or abolish the federal income tax and replace it with another
form of tax. Enactment of any such legislation could adversely affect the value
of the Units. The Fund, however, cannot predict what legislation, if any, in
respect of tax rates may be proposed, nor can it predict which proposals, if
any, might be enacted.
The following is added on page 10 after the section entitled "Distributions":
RETURN CALCULATIONS
Estimated Current Return shows the estimated annual cash to be received
from interest-bearing bonds in a 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 Trust. 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.
The following is added on page a-1 before the definition of "NR":
* Continuance of the rating is contingent upon S&P's receipt of an executed
copy of the escrow agreement or closing documentation confirming investments and
cash flows.
15900--2/95
<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.
2
<PAGE>
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
3
<PAGE>
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
4
<PAGE>
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.
5
<PAGE>
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
6
<PAGE>
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
7
<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
9
<PAGE>
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.
10
<PAGE>
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
11
<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,
13
<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
<PAGE>
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.
a-2
<PAGE>
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>
PROSPECTUS FORMAT
This prospectus consists of a Part A, this Part B and for certain State
Trusts, an additional Part C. The Prospectus does not contain all of the
information with respect to the investment company set forth in its
registration statement and exhibits relating thereto which have been filed
with the Securities and Exchange Commission, Washington, D.C. under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
No person is authorized to give any information or to make any
representations with respect to this investment company not contained in the
Prospectus; and any information or representation not contained herein must
not be relied upon as having been authorized. The Prospectus does not
constitute an offer to sell, or a solicitation of any offer to buy, securities
in any state to any person to whom it is not lawful to make such offer in such
state.
15900--2/95
<PAGE>
DEFINED
ASSET FUNDSSM
SPONSORS: MUNICIPAL INVESTMENT
Merrill Lynch, TRUST FUND
Pierce, Fenner & Smith Incorporated Multistate Series 7J
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
PaineWebber Incorporated Exchange Commission, Washington, D.C.
1200 Harbor Boulevard under the Securities Act of 1933 and the
Weehawken, N.J. 07087 Investment Company Act of 1940, and to
(201) 902-3000 which reference is hereby made.
Prudential Securities Incorporated No person is authorized to give any
One Seaport Plaza information or to make any
199 Water Street representations with respect to this
New York, N.Y. 10292 investment company not contained in its
(212) 776-1000 registration statement and exhibits
Dean Witter Reynolds Inc. relating thereto; and any information or
Two World Trade Center--59th Floor representation not contained therein
New York, N.Y. 10048 must not be relied upon as having been
(212) 392-2222 authorized. This Prospectus does not
EVALUATOR: constitute an offer to sell, or a
Kenny S&P Evaluation Services, solicitation of an offer to buy,
a division of J. J. Kenny Co., Inc. securities in any state to any person to
65 Broadway whom it is not lawful to make such offer
New York, N.Y. 10006 in such state.
TRUSTEE:
The Bank of New York
(a New York Banking Corporation)
Unit Investment Trust Department
P.O. Box 974
Wall Street Station
New York, N.Y. 10268-0974
1-800-221-7771
11371--11/95
<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 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 --Consent of the Evaluator.
5.1 --Consent of independent accountants.
9.1 --Information Supplement (incorporated by reference to Exhibit 9.1 to
Amendment No. 1 to the Registration Statement of Municipal
Investment Trust Fund, Insured Series--226, 1933 Act File No. 33-61281).
R-1
<PAGE>
DEFINED ASSET FUNDS--
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES 7J
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES 7J,
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 25TH DAY OF
OCTOBER, 1995.
SIGNATURES APPEAR ON PAGES R-3, R-4, R-5, R-6 AND R-7.
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 Executive Committee of the Board of
Directors of PaineWebber 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 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
ALAN D. HOGAN
GEORGE A. MURRAY
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>
PAINEWEBBER INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Executive Committee of the Board the following 1933 Act File
of Directors of PaineWebber Number: 33-55073
Incorporated:
JOSEPH J. GRANO, JR.
DONALD B. MARRON
By
ROBERT E. HOLLEY
(As authorized signatory for
PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-7
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
October 25, 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 7J
Gentlemen:
We have examined the post-effective Amendment to the Registration Statement
File No. 33-35913 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
Exhibit 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee of
Defined Asset Funds--Municipal Investment Trust Fund--Multistate Series 7J
(California, Florida and Maryland Trusts):
We consent to the use in this Post-Effective Amendment No. 5 to Registration
Statement No. 33-35913 of our opinion dated September 27, 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.
October 25, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> MARYLAND TRUST
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 2,913,855
<INVESTMENTS-AT-VALUE> 3,255,746
<RECEIVABLES> 37,909
<ASSETS-OTHER> 11,339
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,304,994
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,851,040
<SHARES-COMMON-STOCK> 2,912
<SHARES-COMMON-PRIOR> 3,013
<ACCUMULATED-NII-CURRENT> 45,332
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 341,891
<NET-ASSETS> 3,238,263
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 212,984
<OTHER-INCOME> 0
<EXPENSES-NET> 6,006
<NET-INVESTMENT-INCOME> 206,978
<REALIZED-GAINS-CURRENT> 5,856
<APPREC-INCREASE-CURRENT> 25,708
<NET-CHANGE-FROM-OPS> 238,542
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 205,536
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 101
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (78,859)
<ACCUMULATED-NII-PRIOR> 45,403
<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
<SERIES>
<NUMBER> 2
<NAME> CALIFORNIA TRUST
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 4,201,773
<INVESTMENTS-AT-VALUE> 4,645,379
<RECEIVABLES> 93,519
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,738,898
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,869
<TOTAL-LIABILITIES> 8,869
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,218,264
<SHARES-COMMON-STOCK> 4,387
<SHARES-COMMON-PRIOR> 4,805
<ACCUMULATED-NII-CURRENT> 68,159
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 443,606
<NET-ASSETS> 4,730,029
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 316,574
<OTHER-INCOME> 0
<EXPENSES-NET> 7,335
<NET-INVESTMENT-INCOME> 309,239
<REALIZED-GAINS-CURRENT> 46,689
<APPREC-INCREASE-CURRENT> 44,677
<NET-CHANGE-FROM-OPS> 400,605
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 307,282
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 21,831
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 418
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (365,089)
<ACCUMULATED-NII-PRIOR> 71,753
<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
<SERIES>
<NUMBER> 3
<NAME> FLORIDA TRUST
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 2,352,780
<INVESTMENTS-AT-VALUE> 2,612,151
<RECEIVABLES> 37,375
<ASSETS-OTHER> 5,571
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,655,097
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,359,437
<SHARES-COMMON-STOCK> 2,438
<SHARES-COMMON-PRIOR> 2,519
<ACCUMULATED-NII-CURRENT> 36,289
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 259,371
<NET-ASSETS> 2,655,097
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 174,772
<OTHER-INCOME> 0
<EXPENSES-NET> 6,458
<NET-INVESTMENT-INCOME> 168,314
<REALIZED-GAINS-CURRENT> 6,651
<APPREC-INCREASE-CURRENT> (1,047)
<NET-CHANGE-FROM-OPS> 173,918
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 168,278
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 5,466
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 81
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (87,302)
<ACCUMULATED-NII-PRIOR> 37,291
<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
October 25, 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 IS-181 803853 33-48875 811-1777
DEFINED ASSET FUNDS- IS-209 DAF 803949 33-54659 811-1777
DEFINED ASSET FUNDS-ITS-50 DAF 883663 33-52011 811-2295
DEFINED ASSET FUNDS-MITF ITS-161 780830 33-36340 811-1777
DEFINED ASSET FUNDS- ITS-235 DAF 910381 33-54255 811-1777
DEFINED ASSET FUNDS-MITF MPS-458 781911 33-21314 811-1777
DEFINED ASSET FUNDS- MPS-546 DAF 892770 33-54727 811-1777
DEFINED ASSET FUNDS-MITF MSS-10 881834 33-49298 811-1777
DEFINED ASSET FUNDS-MITF MSS-11 881836 33-49302 811-1777
DEFINED ASSET FUNDS-MITF MSS-12 881837 33-49308 811-1777
DEFINED ASSET FUNDS- MSS-44 DAF 895631 33-49799 811-1777
DEFINED ASSET FUNDS-MITF MSS 7J 847216 33-35913 811-1777
DEFINED ASSET FUNDS-MITF MSS 9E 868175 33-41743 811-1777
DEFINED ASSET FUNDS-MITF MSS 9F 868177 33-41980 811-1777
DEFINED ASSET FUNDS-MITF MSS 9G 868178 33-41976 811-1777
DEFINED ASSET FUNDS-MITF MSS C 735402 2-88231 811-1777
DEFINED ASSET FUNDS-MITF PAS-11 068995 2-55082 811-1777
TOTAL: 17 FUNDS
</TABLE>
