1933 Act File No. 33-31259
1940 Act File No. 811-5911
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 31 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 31 X
FEDERATED MUNICIPAL TRUST
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
X on October 31, 1994 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(i)
___ on _______________ pursuant to paragraph (a)(i)
___ 75 days after filing pursuant to paragraph (a)(ii)
on pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
___ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:
filed the Notice required by that Rule on _________________; or
X intends to file the Notice required by that Rule on or about December
15, 1994; or
during the most recent fiscal year did not sell any securities pursuant
to Rule 24f-2 under the Investment Company Act of 1940, and, pursuant to
Rule 24f-2(b)(2), need not file the Notice.
Copies to:
Thomas J. Donnelly, Esquire Charles H. Morin, Esquire
Houston, Houston & Donnelly Dickstein, Shapiro & Morin, L.L.P.
2510 Centre City Tower 2101 L Street, N.W.
650 Smithfield Street Washington, D.C. 20037
Pittsburgh, Pennsylvania 15222
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of FEDERATED
MUNICIPAL TRUST, which consists of thirteen portfolios: (1) Connecticut
Municipal Cash Trust, (a) Institutional Service Shares; (2) Pennsylvania
Municipal Cash Trust, (a) Cash Series Shares and (b) Institutional
Service Shares; (3) Massachusetts Municipal Cash Trust,
(a) Institutional Service Shares and (b) BayFunds Shares; (4) Minnesota
Municipal Cash Trust, (a) Cash Series Shares and (b) Institutional
Shares; (5) New Jersey Municipal Cash Trust, (a) Institutional Shares
and (b) Institutional Service Shares; (6) Ohio Municipal Cash Trust, (a)
Cash II Shares and (b) Institutional Shares; (7) Virginia Municipal Cash
Trust, (a) Institutional Shares and (b) Institutional Service Shares;
(8) Alabama Municipal Cash Trust; (9) North Carolina Municipal Cash
Trust; (10) Maryland Municipal Cash Trust; (11) California Municipal
Cash Trust; (12) New York Municipal Cash Trust, (a) Cash II Shares and
(b) Institutional Service Shares; and (13) Florida Municipal Cash Trust,
relates only to the Maryland Municipal Cash Trust and is comprised of
the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page (1-13) Cover Page.
Item 2. Synopsis (1-13) Summary of Fund
Expenses.
Item 3. Condensed Financial
Information (8,9,10) Financial Highlights;
(1-10) Performance
Information; (3b) Tax-
Equivalent Yield.
Item 4. General Description of
Registrant (1-13) General Information;
(1-13) Investment Information;
(1-13) Investment Objective;
(1-13) Investment Policies;
(1) Connecticut Municipal
Securities; (2) Pennsylvania
Municipal Securities;
(3) Massachusetts Municipal
Securities; (4) Minnesota
Municipal Securities; (5) New
Jersey Municipal Securities;
(6) Ohio Municipal Securities;
(7) Virginia Municipal
Securities; (8) Alabama
Municipal Securities; (9)
North Carolina Municipal
Securities; (10) Maryland
Municipal Securities; (11)
California Municipal
Securities; (12) New York
Municipal Securities; (13)
Florida Municipal Securities;
(1-13) Standby Commitments;
(1) Connecticut Investment
Risks; (2) Pennsylvania
Investment Risks;
(3) Massachusetts Investment
Risks; (4) Minnesota
Investment Risks; (5) New
Jersey Investment Risks;
(6) Ohio Investment Risks;
(7) Virginia Investment Risks;
(8) Alabama Investment Risks;
(9) North Carolina Investment
Risks; (10) Maryland
Investment Risks; (11)
California Investment Risks;
(12) New York Investment
Risks; (1-13) Non-
Diversification;
(1-13) Investment Limitations;
(1-13) Regulatory Compliance.
Item 5. Management of the Fund (1-13) Federated Municipal
Trust Information; (1-13)
Management of Federated
Municipal Trust; (1-7, 12)
Distribution of Cash Series,
Institutional, Institutional
Service, or Cash II Shares;
(10,11,13) Distribution of
Fund Shares; (1-13)
Administration of the Fund;
(7,11,12) Expenses of the Fund
and Institutional,
Institutional Service, or Cash
II Shares; (8-13) Expenses of
the Fund.
Item 6. Capital Stock and Other
Securities (1-13) Dividends; (1-13)
Capital Gains; (1-13)
Shareholder Information; (1-
13) Voting Rights; (1-13)
Massachusetts Partnership Law;
(1-13) Tax Information; (1-12)
Federal Income Tax; (1)
Connecticut Tax
Considerations; (2)
Pennsylvania Tax
Considerations; (3)
Massachusetts Tax
Considerations; (4) Minnesota
Tax Considerations; (5) New
Jersey Tax Considerations; (6)
Ohio Tax Considerations; (7)
Virginia Tax Considerations;
(8) Alabama Taxes; (9) North
Carolina Taxes; (10) Maryland
Tax Considerations; (11)
California State Income Taxes;
(12) New York State Tax
Considerations; (13) Florida
Tax Considerations; (1-
13) Other State and Local
Taxes; (2,3,4,5,6,7,12) Other
Classes of Shares.
Item 7. Purchase of Securities Being
Offered (1-13) Net Asset Value;
(4a,5a,6a) Distribution Plan;
(12) Distribution and
Shareholder Servicing
Arrangements; (13)
Distribution and Shareholder
Services Plan; (8,9,10,12,13)
Other Payments to Financial
Institutions; (3b,7b,10)
Shareholder Services Plan; (1-
7,10,12) Investing in Cash
Series, Institutional,
Institutional Services or Cash
II Shares; (8,9,10,11,13)
Investing in Fund Shares; (1-
6,11,12,13) Share Purchases;
(1-13) Minimum Investment
Required; (1-12) What Shares
Cost; (2a,4a,6a) Systematic
Investment Program; (2a,4a,6a)
Automatic Investments; (1-13)
Subaccounting Services; (1-13)
Certificates and
Confirmations.
Item 8. Redemption or Repurchase (1-7,12) Redeeming Cash
Series, Institutional,
Institutional Service or Cash
II Shares; (8,9) Redeeming
Fund Shares; (11,13) Redeeming
Shares; (2a,4a,6a,13) Through
a Financial Institution;
(2a,4a,6a,10) Directly from
the Fund;
(1,2,3,4b,5,6b,7,11,12)
Telephone Redemption; (1-
9,11,12) Written Requests;
(12, 13) By Mail; (10, 13) By
Writing a Check; (1-7)
Redemption Before Purchase
Instruments Clear; (1-13)
Accounts With Low Balances.
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page (1-13) Cover Page.
Item 11. Table of Contents (1-13) Table of Contents.
Item 12. General Information and
History (1-13) General Information
About the Fund.
Item 13. Investment Objectives and
Policies (1-13) Investment Objective
and Policies; (1-13)
Investment Limitations.
Item 14. Management of the Fund (1-10) Federated Municipal
Trust Management; (11,12,13)
Trust Management.
Item 15. Control Persons and Principal
Holders of Securities Not applicable.
Item 16. Investment Advisory and Other
Services (1-13) Investment Advisory
Services; (1-13)
Administrative Services;
(4a,5a,6a,12) Distribution
Plan; (3b,7b,10) Shareholder
Services Plan; (13)
Distribution and Shareholder
Services Plan.
Item 17. Brokerage Allocation (1-13) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not applicable.
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered (1-13) Purchasing Shares;
(1-13) Determining Net Asset
Value; (1-13) Redeeming
Shares.
Item 20. Tax Status (1-13) Tax Status.
Item 21. Underwriters Not applicable.
Item 22. Calculation of Performance
Data (1-13) Yield; (1-13) Effective
Yield; (1,2,3a,4-13) Tax-
Equivalent Yield; (1-13)
Performance Comparisons.
Item 23. Financial Statements (1-10,12,13) Filed in Part A;
(11) To be filed by Amendment
- --------------------------------------------------------------------------------
MARYLAND
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH TRUST
- --------------------------------------------------------------------------------
(A Portfolio of Federated Municipal Trust)
SUPPLEMENT TO PROSPECTUS
DATED MAY 4, 1994
FEDERATED SECURITIES CORP.
(LOGO)
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
314229774
G00578-01 (10/94)
October 31, 1994
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
A. Please insert the following "Financial Highlights" table as page 2 of the
prospectus, following the "Summary of Fund Expenses" table and before the
section entitled "General Information." In addition, please add the heading
"Financial Highlights" to the Table of Contents page after the heading
"Summary of Fund Expenses."
MARYLAND MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
PERIOD ENDED
AUGUST 31, 1994*
-------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00
- --------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------
Net investment income .01
- -------------------------------------------------------------------- ------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------
Dividends to shareholders from net investment income (.01)
- -------------------------------------------------------------------- ------------
NET ASSET VALUE, END OF PERIOD $1.00
----
- --------------------------------------------------------------------
TOTAL RETURN** 0.84%
- --------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------
Expenses 0.35%(b)
- --------------------------------------------------------------------
Net investment income 2.64%(b)
- --------------------------------------------------------------------
Expense waiver/reimbursement (a) 0.60%(b)
- --------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------
Net assets, end of period (000 omitted) $65,227
- --------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from May 9, 1994 (date of initial public
investment) to August 31, 1994 (unaudited).
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
B. Please insert the financial statements immediately following the section
entitled "Performance Information" on page 16 of the prospectus. In addition,
please add the heading "Financial Statements" to the Table of Contents page
immediately before the heading "Addresses."
MARYLAND MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------- --------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--101.3%
- -------------------------------------------------------------------------
MARYLAND--99.2%
-------------------------------------------------------
$2,000,000 Anne Arundel County, MD, EDRB, 3.20% CP (Series 1988)/
(Baltimore Gas & Electric Co.)/(Subject to AMT),
Mandatory Tender 10/20/94 A-1 $ 2,000,000
-------------------------------------------------------
1,000,000 Anne Arundel County, MD, EDRB, 3.20% CP (Series 1988)/
(Baltimore Gas & Electric Co.)/(Subject to AMT),
Mandatory Tender 10/21/94 A-1 1,000,000
-------------------------------------------------------
1,760,000 Anne Arundel County, MD, EDRB, 3.40% CP (Series 1988)/
(Baltimore Gas & Electric Co.)/(Subject to AMT),
Mandatory Tender 11/17/94 A-1 1,760,000
-------------------------------------------------------
2,575,000 Baltimore County, MD, EDRB Weekly VRDNs (Series
1994A)/(Pitts Realty Ltd. L.P.)/(PNC Bank, Delaware
LOC)/(Subject to AMT) P-1 2,575,000
-------------------------------------------------------
2,900,000 Baltimore County, MD, IDA Weekly VRDNs (Mine Safety
Appliances Co.)/(Sanwa Bank Ltd. LOC) P-1 2,900,000
-------------------------------------------------------
2,100,000 Baltimore County, MD, Port Facility Weekly VRDNs
(Occidental Petroleum)/(National Westminster Bank LOC) A-1+ 2,100,000
-------------------------------------------------------
3,000,000 ++ Baltimore County, MD, Weekly VRDNs (Series 20 Putters)/
(Morgan Guaranty Trust Co. BPA) VMIG1 3,000,000
-------------------------------------------------------
1,000,000 Baltimore County, MD, Weekly VRDNs (Sheppard & Enoch
Pratt Hospital Facility)/(Societe Generale LOC) VMIG1 1,000,000
-------------------------------------------------------
</TABLE>
MARYLAND MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------- --------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------------
MARYLAND--CONTINUED
-------------------------------------------------------
$1,000,000 Baltimore County, MD, PCR Weekly VRDNs
(SCM Plants, Inc.)/(Barclays Bank, PLC LOC) A-1+ $ 1,000,000
-------------------------------------------------------
1,500,000 Cecil County, MD, County Commissions EDRB Weekly VRDNs
(Series 1988S)/(Williams Mobile Offices, Inc.)/ (First
National Bank, Maryland LOC)/(Subject to AMT) A-1 1,500,000
-------------------------------------------------------
1,080,000 Elkton, MD, Weekly VRDNs (Series 1992S)/(Highway
Service Ventures, Inc. Facility)/(First Union National
Bank, Charlotte LOC) P-1 1,080,000
-------------------------------------------------------
3,141,000 Hartford County, MD, Weekly VRDNs (Series 1989)/
(Hartford Commons Associates Facility)/(Nationsbank of
Virginia N.A. LOC)/(Subject to AMT) P-1 3,141,000
-------------------------------------------------------
2,000,000 Howard County, MD, Consolidated Public Improvements
Weekly VRDNs BANs (Series 1993)/(Union Bank of
Switzerland BPA) A-1+ 2,000,000
-------------------------------------------------------
5,325,000 Maryland State CDA Weekly VRDNs (Series 1990B)/ (Cherry
Hill Apartment L.P)/(Nationsbank of Maryland
LOC)/(Subject to AMT) P-1 5,325,000
-------------------------------------------------------
1,000,000 Maryland State CDA 3.65% Multi-Family Housing Revenue
Bonds (Series 1984B), Optional Tender 11/15/94 NR(2) 1,000,000
-------------------------------------------------------
1,400,000 ++ Maryland State Department of Transportation PA-68
Weekly VRDNs (Series 1993) VMIG1 1,400,000
-------------------------------------------------------
3,000,000 Maryland State Energy Financing Administration IDRB
Weekly VRDNs (Series 1988)/(Morningstar Foods Inc.)/
(Long Term Credit Bank of Japan Ltd. LOC)/
(Subject to AMT) A-2 3,000,000
-------------------------------------------------------
1,000,000 Maryland State HEFA Weekly VRDNs (Series 1985B)/
(Pooled Loan Program)/(Sanwa Bank Ltd. LOC) VMIG1 1,000,000
-------------------------------------------------------
2,700,000 Maryland State HEFA Weekly VRDNs (Series 1985A)/
(Dai-Ichi Kangyo Bank Ltd. LOC) VMIG1 2,700,000
-------------------------------------------------------
</TABLE>
MARYLAND MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------- --------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------------
MARYLAND--CONTINUED
-------------------------------------------------------
$1,000,000 Maryland State HEFA Weekly VRDNs Revenue Bonds (Series
1922B)/(North Arundel Hospital)/
(Mellon Bank N.A. LOC) VMIG1 $ 1,000,000
-------------------------------------------------------
800,000 Maryland State HEFA 9.25% Prerefunded Bonds (Series
1985A)/(John Hopkins University), 7/1/95 AAA 850,053
-------------------------------------------------------
2,445,000 Maryland State HEFA 9.25% Revenue Bonds
(Series 1985A)/(John Hopkins University)/
(Prerefunded), 7/1/95 (@102) AAA 2,604,868
-------------------------------------------------------
6,500,000 ++ Maryland State Tender Option Certificates-K Weekly
VRDNs GO Bonds (Series 1993)/(Dai-Ichi Kangyo Bank Ltd.
BPA) A-1 6,500,000
-------------------------------------------------------
1,320,000 ++ Maryland State Weekly VRDNs GO Bonds P-Floats
(First Series, 1993) VMIG1 1,320,000
-------------------------------------------------------
1,000,000 Montgomery County, MD, 6.80% Public Improvement Bonds
(Series A), 4/1/95 AAA 1,020,140
-------------------------------------------------------
4,200,000 Montgomery County, MD, EDA Weekly VRDNs (U.S.
Pharmacopeial Convention Facility)/(Chemical Bank LOC) VMIG1 4,200,000
-------------------------------------------------------
1,000,000 Northeast, MD, Waste Disposal Authority, 3.40%
Semi-Annual TOBs (Southwest Resource Recovery
Facility)/(MBIA Insured), Optional Tender 1/1/95 NR(1) 1,000,000
-------------------------------------------------------
1,950,000 Washington County, Sanitary District, 4.00% BANs
(Series 1994), 4/18/95 SP-1 1,954,072
-------------------------------------------------------
4,760,000 Wicomico County, MD, EDRB Weekly VRDNs (Series
1994)/(Field Container Co. L.P.)/
(Northern Trust Co. LOC)/(Subject to AMT) A-1+ 4,760,000
------------------------------------------------------- ------------
Total 64,690,133
-------------------------------------------------------
</TABLE>
MARYLAND MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------- --------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------------
PUERTO RICO--2.1%
-------------------------------------------------------
$1,400,000 Puerto Rico Industrial, Medical & Environmental PCA,
4.00% Annual TOBs (Series 1983A)/(Reynolds Metals Co.)/
(ABN AMRO Bank N.A. LOC), Optional Tender 9/1/95 VMIG1 $ 1,401,358
------------------------------------------------------- ------------
TOTAL MUNICIPAL SECURITIES (AT AMORTIZED COST) $ 66,091,491+
------------------------------------------------------- ------------
</TABLE>
* Please refer to the Appendix of the Statement of Additional Information for
an explanation of the credit ratings. Current credit ratings are unaudited.
+ Also represents cost for federal tax purposes.
++ Denotes restricted security.
Note: The categories of investments are shown as a percentage of net assets
($65,226,818) at August 31, 1994.
The following abbreviations are used in this portfolio:
<TABLE>
<S> <C>
AMT -- Alternative Minimum Tax
BANs -- Bond Anticipation Notes
BPA -- Bond Purchase Agreement
CDA -- Community Development Administration
CP -- Commercial Paper
EDA -- Economic Development Authority
EDRB -- Economic Development Revenue Bonds
GO -- General Obligations
HEFA -- Health and Education Facilities Authority
IDA -- Industrial Development Authority
IDRB -- Industrial Development Revenue Bonds
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PCA -- Pollution Control Authority
PCR -- Pollution Control Revenue
TOBs -- Tender Option Bonds
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MARYLAND MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $66,091,491
- ---------------------------------------------------------------------------------
Cash 297,642
- ---------------------------------------------------------------------------------
Interest receivable 306,860
- --------------------------------------------------------------------------------- -----------
Total assets 66,695,993
- ---------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------
Payable for investments purchased $1,401,358
- --------------------------------------------------------------------
Dividends payable 1,253
- --------------------------------------------------------------------
Accrued expenses and other liabilities 66,564
- -------------------------------------------------------------------- ----------
Total liabilities 1,469,175
- --------------------------------------------------------------------------------- -----------
NET ASSETS for 65,226,818 shares of beneficial interest outstanding $65,226,818
- --------------------------------------------------------------------------------- -----------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share
($65,226,818 / 65,226,818 shares of beneficial interest outstanding) $1.00
- --------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MARYLAND MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
PERIOD ENDED AUGUST 31, 1994*
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------------
Interest income $503,691
- -------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee $ 84,287
- -------------------------------------------------------------------------
Custodian and recordkeeper fees 28,000
- -------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 3,600
- -------------------------------------------------------------------------
Shareholder services fees 42,143
- -------------------------------------------------------------------------
Legal fees 750
- -------------------------------------------------------------------------
Printing and postage 109
- -------------------------------------------------------------------------
Miscellaneous 1,000
- ------------------------------------------------------------------------- --------
Total expenses 159,889
- -------------------------------------------------------------------------
Deduct--
- ---------------------------------------------------------------
Waiver of investment advisory fee $84,287
- ---------------------------------------------------------------
Reimbursement of other operating expenses by adviser 17,200 101,487
- --------------------------------------------------------------- ------- --------
Net expenses 58,402
- ------------------------------------------------------------------------------------- --------
Net investment income $445,289
- ------------------------------------------------------------------------------------- --------
</TABLE>
* For the period from May 9, 1994 (date of initial public investment) to August
31, 1994.
(See Notes which are an integral part of the Financial Statements)
MARYLAND MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
AUGUST 31, 1994*
(UNAUDITED)
-----------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------
Net investment income $ 445,289
-------------
- -------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------------------
Dividends to shareholders from net investment income (445,289)
-------------
- -------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS--
- -------------------------------------------------------------------------
Proceeds from sale of shares 173,561,527
- -------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of dividends
declared 348,369
- -------------------------------------------------------------------------
Cost of shares redeemed (108,683,078)
- ------------------------------------------------------------------------- -----------------
Change in net assets from Fund share transactions 65,226,818
- ------------------------------------------------------------------------- -----------------
Change in net assets 65,226,818
- -------------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------------
Beginning of period --
- ------------------------------------------------------------------------- -----------------
End of period $ 65,226,818
- ------------------------------------------------------------------------- -----------------
</TABLE>
* For the period from May 9, 1994 (date of initial public investment) to August
31, 1994.
(See Notes which are an integral part of the Financial Statements)
MARYLAND MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end, management
investment company. The Trust consists of twelve, non-diversified portfolios.
The financial statements included herein are only those of Maryland Municipal
Cash Trust (the "Fund"). The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value its portfolio
securities is in accordance with Rule 2a-7 under the Act.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses are accrued
daily. Bond premium and discount, if applicable, are amortized as required by the
Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are
recorded on the ex-dividend date.
C. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the Code
applicable to regulated investment companies and to distribute to shareholders each year
substantially all of its taxable income. Accordingly, no provisions for federal tax are
necessary.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in when-issued or
delayed delivery transactions. The Fund records when-issued securities on the trade date
and maintains security positions such that sufficient liquid assets will be available to
make payment for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning interest on the
settlement date.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to registration of its
shares in its first fiscal year, excluding the initial expense of registering its shares,
have been deferred and are being amortized using the straight-line method not to exceed a
period of five years from the Fund's commencement date.
F. RESTRICTED SECURITIES--Restricted securities are securities that may only be resold upon
registration under Federal securities laws or in transactions exempt from such
registration. Many restricted securities may be resold in the secondary market in
transactions exempt from registration. In some cases, the restricted securities may be
resold without registration upon exercise of a demand feature. Such restricted securities
may be determined to be liquid under criteria established by the Board of Trustees. The
Fund will not incur any registration costs upon such resales. Restricted securities are
valued at amortized cost in accordance with Rule 2a-7 under the Act. Additional
information on each restricted security held at August 31, 1994 is as follows:
</TABLE>
MARYLAND MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
----------------------------------------------------------- ----------- -----------
<S> <C> <C>
Baltimore County, MD, Weekly VRDNs (Series 20 Putters) 7/1/94 $3,000,000
Maryland State Department of Transportation PA-68
Weekly VRDNs (Series 1993) 2/17/94 1,400,000
Maryland State Tender Option Certificates-K Weekly VRDNs
GO Bonds (Series 1993) 1/15/94 4,300,000
Maryland State Tender Option Certificates-K Weekly VRDNs
GO Bonds (Series 1993) 7/15/94 2,200,000
Maryland State Weekly VRDNs GO Bonds P-Floats
(First Series, 1993) 2/1/94 1,320,000
G. CONCENTRATION OF RISK--Since the Fund invests a substantial portion of its assets in
issuers located in one state, it will be more susceptible to factors adversely affecting
issuers of that state than would be a comparable general tax-exempt mutual fund. In order
to reduce the credit risk associated with such factors, at August 31, 1994, 77.4% of the
securities in the portfolio of investments are backed by letters of credit or bond
insurance of various financial institutions and financial guaranty assurance agencies.
The value of investments insured by or supported (backed) by a letter of credit for any
one institution or agency did not exceed 13.9% of total investments.
H. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). At August
31, 1994, paid in capital aggregated $65,226,818. Transactions in Fund shares
were as follows:
<TABLE>
<CAPTION>
YEAR ENDED
AUGUST 31,
1994*
- ------------------------------------------------------------------------------ ------------
<S> <C>
Shares sold 173,561,527
- ------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 348,369
- ------------------------------------------------------------------------------
Shares redeemed (108,683,078)
- ------------------------------------------------------------------------------ ------------
Net change resulting from Fund share transactions 65,226,818
- ------------------------------------------------------------------------------ ------------
</TABLE>
* For the period from May 9, 1994 (date of initial public investment) to August
31, 1994.
MARYLAND MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
("Adviser"), receives for its services an annual investment advisory fee equal
to .50 of 1% of the Fund's average daily net assets. The Adviser may voluntarily
choose to waive a portion of its fee and reimburse certain operating expenses of
the fund. The Adviser can modify or terminate this voluntary waiver at any time
at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with administrative personnel and services. Prior to March 1, 1994, these
services were provided at approximate cost. Effective March 1, 1994, the FAS fee
is based on the level of average aggregate daily net assets of all funds advised
by subsidiaries of Federated Investors for the period. The administrative fee
received during any fiscal year shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS") the Fund will pay FSS up to .25 of
1% of average net assets of the Fund for the period. This fee is to obtain
certain personal services for shareholders and the maintenance of shareholder
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund. The fee
is based on the size, type and number of accounts and transactions made by
shareholders.
FServ also maintains the Fund's accounting records. The fee is based on the
level of the Fund's average net assets for the period plus, out of pocket
expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses and start-up administrative
service expenses incurred by the Fund will be borne initially by Adviser and are
estimated at $33,100 and $31,500, respectively. The Fund has agreed to reimburse
the Adviser for the organizational expenses and start-up administrative expenses
during the five year period following May 4, 1994 (date the Fund first became
effective).
INTERFUND TRANSACTIONS--During the six months ended August 31, 1994, the Fund
engaged in purchase and sale transactions with other affiliated Funds at current
value pursuant to Rule 17a-7 under the Act amounting to $79,685,000 and
$67,900,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors of
the above companies.
- --------------------------------------------------------------------------------
MARYLAND MUNICIPAL CASH TRUST
(A PORTFOLIO OF FEDERATED MUNICIPAL TRUST)
PROSPECTUS
The shares of Maryland Municipal Cash Trust (the "Fund") offered by
this prospectus represent interests in a non-diversified portfolio of
Federated Municipal Trust (the "Trust"), an open-end management
investment company (a mutual fund). The Fund invests in Maryland
municipal securities to achieve current income exempt from federal
regular income tax and Maryland state and local income tax consistent
with stability of principal and liquidity. The Fund invests primarily
in Maryland municipal securities, including securities of states,
territories, and possessions of the United States, which are not
issued by or on behalf of Maryland or its political subdivisions and
financing authorities, which are exempt from the federal regular and
Maryland state income tax.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS
OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT
INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT
RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE FUND ATTEMPTS TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE NO
ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know
before you invest in the Fund. Keep this prospectus for future
reference.
The Fund has also filed a Statement of Additional Information dated
May 4, 1994, with the Securities and Exchange Commission. The
information contained in the Statement of Additional Information is
incorporated by reference into this prospectus. You may request a
copy of the Statement of Additional Information free of charge by
calling 1-800-235-4669. To obtain other information, or make
inquiries about the Fund, contact the Fund at the address listed in
the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated May 4, 1994
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUMMARY OF FUND EXPENSES 1
- --------------------------------------------------
GENERAL INFORMATION 2
- --------------------------------------------------
INVESTMENT INFORMATION 2
- --------------------------------------------------
Investment Objective 2
Investment Policies 2
Acceptable Investments 2
Variable Rate Demand Notes 3
Participation Interests 3
Municipal Leases 3
Ratings 4
Credit Enhancement 4
Demand Features 4
When-Issued and Delayed Delivery
Transactions 4
Restricted and Illiquid Securities 5
Temporary Investments 5
Maryland Municipal Securities 5
Standby Commitments 5
Maryland Investment Risks 6
Non-Diversification 6
Investment Limitations 7
Regulatory Compliance 7
FEDERATED MUNICIPAL TRUST INFORMATION 7
- --------------------------------------------------
Management of the Trust 7
Board of Trustees 7
Investment Adviser 7
Advisory Fees 7
Adviser's Background 7
Other Payments to Financial
Institutions 8
Distribution of Fund Shares 8
Administration of the Fund 8
Administrative Services 8
Shareholder Services Plan 9
Custodian 9
Transfer Agent and Dividend
Disbursing Agent 9
Legal Counsel 9
Independent Public Accountants 9
Expenses of the Fund 9
NET ASSET VALUE 9
- --------------------------------------------------
INVESTING IN THE FUND 10
- --------------------------------------------------
Share Purchases 10
Through a Financial Institution 10
By Wire 10
By Mail 10
Minimum Investment Required 10
What Shares Cost 10
Subaccounting Services 11
Certificates and Confirmations 11
Dividends 11
Capital Gains 11
REDEEMING SHARES 11
- --------------------------------------------------
Through a Financial Institution 11
Receiving Payment 12
By Wire 12
By Check 12
By Mail 12
By Writing a Check 13
Accounts with Low Balances 13
SHAREHOLDER INFORMATION 13
- --------------------------------------------------
Voting Rights 13
Massachusetts Partnership Law 13
TAX INFORMATION 14
- --------------------------------------------------
Federal Income Tax 14
Maryland Tax Considerations 15
Other State and Local Taxes 15
PERFORMANCE INFORMATION 16
- --------------------------------------------------
ADDRESSES INSIDE BACK COVER
- --------------------------------------------------
</TABLE>
I
<PAGE>
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................................................... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)................................................... None
Contingent Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, as applicable)................................................... None
Redemption Fee.......................................................................... None
Exchange Fee............................................................................ None
<CAPTION>
ANNUAL FUND OPERATING EXPENSES*
(As a percentage of average net assets)
<S> <C> <C>
Management Fees (after waiver) (1)........................................... 0.00%
12b-1 Fees................................................................... None
Total Other Expenses (after expense reimbursement)........................... 0.65%
Shareholder Servicing Fee................................................ 0.25%
Total Fund Operating Expenses (2).................................... 0.65%
<FN>
(1) The estimated management fee has been reduced to reflect the voluntary
waiver of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
.50%.
(2) The Total Fund Operating Expenses are estimated to be 1.16% absent the
anticipated voluntary waiver of the management fee and the anticipated
voluntary reimbursement of certain other operating expenses.
* Total Operating Expenses are estimated based on average expenses expected to
be incurred during the period ending October 31, 1994. During the course of this
period, expenses may be more or less than the average amount shown.
</TABLE>
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "INVESTING IN THE FUND" AND "FEDERATED MUNICIPAL TRUST
INFORMATION." WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN $5,000 MAY BE SUBJECT TO
ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
- --------------------------------------------------------------------------- --------- ---------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time period. As noted
in the table above, the Fund charges no contingent deferred sales charge... $7 $21
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THIS
EXAMPLE IS BASED ON ESTIMATED DATA FOR THE FUND'S FISCAL YEAR ENDING OCTOBER 31,
1994.
1
<PAGE>
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated September 1, 1989. The Declaration of Trust permits the Trust to
offer separate series of shares of beneficial interest representing interests in
separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. With respect to this Fund, as of the date of this
prospectus, the Board of Trustees ("Trustees") have established one class of
shares. This prospectus relates only to these shares ("Shares") of the Fund,
which are designed primarily for financial institutions acting in an agency or
fiduciary capacity as a convenient means of accumulating an interest in a
professionally managed, non-diversified portfolio investing primarily in
short-term Maryland municipal securities. A minimum initial investment of
$10,000 over a 90 day period is required. The Fund may not be a suitable
investment for non-Maryland taxpayers or retirement plans since it invests
primarily in Maryland municipal securities.
The Fund attempts to stabilize the value of a Share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income exempt from
federal regular income tax and the personal income taxes imposed by the State of
Maryland and Maryland municipalities consistent with stability of principal and
liquidity. This investment objective cannot be changed without shareholder
approval. While there is no assurance that the Fund will achieve its investment
objective, it endeavors to do so by following the investment policies described
in this prospectus.
Interest income of the Fund that is exempt from the income taxes described above
retains its tax-free status when distributed to the Fund's shareholders.
However, income distributed by the Fund may not necessarily be exempt from state
or municipal taxes in states other than Maryland.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing in a portfolio of
Maryland municipal securities (as defined below) maturing in 13 months or less.
As a matter of investment policy, which cannot be changed without shareholder
approval, at least 80% of the Fund's annual interest income will be exempt from
federal regular income tax and Maryland state and local income tax. The average
maturity of the securities in the Fund's portfolio, computed on a
dollar-weighted basis, will be 90 days or less. Unless indicated otherwise, the
investment policies set forth below may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The Fund invests primarily in debt obligations issued
by or on behalf of the State of Maryland and its political subdivisions and
financing authorities, and obligations of other states, territories, and
possessions of the United States, including the District of Columbia, and any
2
<PAGE>
political subdivision or financing authority of any of these, the income from
which is exempt from federal regular income tax and Maryland state and local
income tax. Examples of Maryland municipal securities include, but are not
limited to:
- tax and revenue anticipation notes ("TRANs") issued to finance working
capital needs in anticipation of receiving taxes or other revenues;
- bond anticipation notes ("BANs") that are intended to be refinanced
through a later issuance of longer-term bonds;
- municipal commercial paper and other short-term notes;
- variable rate demand notes;
- municipal bonds (including bonds having serial maturities and pre-refunded
bonds) and
- leases; and
- participation, trust and partnership interests in any of the foregoing
obligations.
VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term debt
instruments that have variable or floating interest rates and provide the Fund
with the right to tender the security for repurchase at its stated principal
amount plus accrued interest. Such securities typically bear interest at a rate
that is intended to cause the securities to trade at par. The interest rate may
float or be adjusted at regular intervals (ranging from daily to annually), and
is normally based on a published interest rate or interest rate index. Most
variable rate demand notes allow the Fund to demand the repurchase of the
security on not more than seven days prior notice. Other notes only permit the
Fund to tender the security at the time of each interest rate adjustment or at
other fixed intervals. See "Demand Features." The Fund treats variable rate
demand notes as maturing on the later of the date of the next interest rate
adjustment or the date on which the Fund may next tender the security for
repurchase.
PARTICIPATION INTERESTS. The Fund may purchase interests in Maryland municipal
securities from financial institutions such as commercial and investment banks,
savings and loan associations, and insurance companies. These interests may take
the form of participations, beneficial interests in a trust, partnership
interests or any other form of indirect ownership that allows the Fund to treat
the income from the investment as exempt from federal income tax. The Fund
invests in these participation interests in order to obtain credit enhancement
or demand features that would not be available through direct ownership of the
underlying Maryland municipal securities.
MUNICIPAL LEASES. Municipal leases are obligations issued by state and local
governments or authorities to finance the acquisition of equipment and
facilities. They may take the form of a lease, an installment purchase contract,
a conditional sales contract, or a participation interest in any of the above.
The Fund may purchase municipal securities in the form of participation
interests which represent undivided proportional interests in lease payments by
a governmental or non-profit entity. The lease payments and other rights under
the lease provide for and secure the payments on the certificates. Lease
obligations may be limited by municipal charter or the nature of the
appropriation for the lease.
3
<PAGE>
In particular, lease obligations may be subject to periodic appropriation. If
the entity does not appropriate funds for future lease payments, the entity
cannot be compelled to make such payments.
Furthermore, a lease may provide that the participants cannot accelerate lease
obligations upon default. The participants would only be able to enforce lease
payments as they became due. In the event of a default or failure of
appropriation, unless the participation interests are credit enhanced, it is
unlikely that the participants would be able to obtain an acceptable substitute
source of payment.
RATINGS. The Maryland municipal securities in which the Fund invests must be
rated in one of the two highest short-term rating categories by one or more
nationally recognized statistical rating organizations ("NRSROs"). An NRSRO's
two highest rating categories are determined without regard for sub-categories
and gradations. For example, securities rated SP-1+, SP-1, or SP-2 by Standard &
Poor's Corporation ("S&P"), MIG-1 or MIG-2 by Moody's Investors Service, Inc.
("Moody's"), or FIN-1+, FIN-1, and FIN-2 by Fitch Investors Service, Inc.
("Fitch") are all considered rated in one of the two highest short-term rating
categories. The Fund will follow applicable regulations in determining whether a
security rated by more than one NRSRO can be treated as being in one of the two
highest short-term rating categories; currently, such securities must be rated
by two NRSROs in one of their two highest rating categories. See "Regulatory
Compliance."
CREDIT ENHANCEMENT. Certain of the Fund's acceptable investments may be credit
enhanced by a guaranty, letter of credit, or insurance. The Fund typically
evaluates the credit quality and ratings of credit enhanced securities based
upon the financial condition and ratings of the party providing the credit
enhancement (the "credit enhancer"), rather than the issuer. However, credit
enhanced securities will not be treated as having been issued by the credit
enhancer for diversification purposes, unless the Fund has invested more than
10% of its assets in securities issued, guaranteed or otherwise credit enhanced
by the credit enhancer, in which case the securities will be treated as having
been issued by both the issuer and the credit enhancer. The bankruptcy,
receivership, or default of the credit enhancer will adversely affect the
quality and marketability of the underlying security.
DEMAND FEATURES. The Fund may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount (usually with accrued interest) within a fixed period (usually
seven days) following a demand by the Fund. The demand feature may be issued by
the issuer of the underlying securities, a dealer in the securities, or by
another third party, and may not be transferred separately from the underlying
security. The Fund uses these arrangements to provide the Fund with liquidity
and not to protect against changes in the market value of the underlying
securities. The bankruptcy, receivership, or default by the issuer of the demand
feature, or a default on the underlying security or other event that terminates
the demand feature before its exercise, will adversely affect the liquidity of
the underlying security. Demand features that are exercisable even after a
payment default on the underlying security may be treated as a form of credit
enhancement.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous.
4
<PAGE>
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund may
invest pursuant to its investment objective and policies but which are subject
to restrictions on resale under federal securities laws. Under criteria
established by the Trustees, certain restricted securities are determined to be
liquid. To the extent that restricted securities are not determined to be
liquid, the Fund will limit their purchase, together with other illiquid
securities, to 10% of its net assets.
TEMPORARY INVESTMENTS. From time to time, when the investment adviser
determines that market conditions call for a temporary defensive posture, the
Fund may invest in tax-exempt or taxable securities such as: obligations issued
by or on behalf of municipal or corporate issuers having the same quality
characteristics as described above; obligations issued or guaranteed by the U.S.
government, its agencies, or instrumentalities; instruments issued by a U.S.
branch of a domestic bank or other deposit institution having capital, surplus,
and undivided profits in excess of $100,000,000 at the time of investment; and
repurchase agreements (arrangements in which the organization selling the Fund a
temporary investment agrees at the time of sale to repurchase it at a mutually
agreed upon time and price).
Although the Fund is permitted to make taxable, temporary investments, there is
no current intention of generating income subject to federal regular income tax
or the personal income taxes imposed by the State of Maryland.
MARYLAND MUNICIPAL SECURITIES
Maryland municipal securities are generally issued to finance public works, such
as airports, bridges, highways, housing, hospitals, mass transportation
projects, schools, streets, and water and sewer works. They are also issued to
repay outstanding obligations, to raise funds for general operating expenses,
and to make loans to other public institutions and facilities.
Maryland municipal securities include industrial development bonds issued by or
on behalf of public authorities to provide financing aid to acquire sites or
construct and equip facilities for privately or publicly owned corporations. The
availability of this financing encourages these corporations to locate within
the sponsoring communities and thereby increases local employment.
The two principal classifications of Maryland municipal securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. Interest on and principal of revenue bonds, however, are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.
STANDBY COMMITMENTS
Some securities dealers are willing to sell municipal securities to the Fund
accompanied by their commitments to repurchase the securities prior to maturity,
at the Fund's option, for the amortized cost of the securities at the time of
repurchase. These arrangements are not used to protect against changes in the
market value of municipal securities. They permit the Fund, however, to remain
fully
5
<PAGE>
invested and still provide liquidity to satisfy redemptions. The cost of
municipal securities accompanied by these "standby" commitments could be greater
than the cost of municipal securities without such commitments. Standby
commitments are not marketable or otherwise assignable and have value only to
the Fund. The default or bankruptcy of a securities dealer giving such a
commitment would not affect the quality of the municipal securities purchased.
However, without a standby commitment, these securities could be more difficult
to sell. The Fund enters into standby commitments only with those dealers whose
credit the investment adviser believes to be of high quality.
MARYLAND INVESTMENT RISKS
Yields on Maryland municipal securities depend on a variety of factors,
including: the general conditions of the short-term municipal market and of the
municipal bond market; the size and maturity of the particular offering; and the
rating of the issue. Further, any adverse economic conditions or developments
affecting the State of Maryland or its municipalities could impact the Fund's
portfolio. The ability of the Fund to achieve its investment objective also
depends on the continuing ability of the issuers of Maryland municipal
securities and demand features for such securities, or the credit enhancers of
either, to meet their obligations for the payment of interest and principal when
due. In addition, from time to time, the supply of Maryland municipal securities
acceptable for purchase by the Fund could become limited, especially if issuers
do not maintain their high quality short-term credit ratings. Obligations of
issuers of Maryland municipal securities are subject to the provisions of
bankruptcy, insolvency, and other laws affecting the rights and remedies of
creditors. In addition, the obligations of such issuers may become subject to
laws enacted in the future by Congress, state legislators, or referenda
extending the time for payment of principal and/or interest, or imposing other
constraints upon enforcement of such obligations or upon the ability of states
or municipalities to levy taxes. There is also the possibility that, as a result
of litigation or other conditions, the power or ability of any issuer to pay,
when due, the principal of and interest on its municipal securities may be
materially affected.
However, the State of Maryland's substantial resources include a relatively
stable economic structure, high wealth levels, and a long record of sound
financial operations all of which provide superior protection to bondholders. An
expanded discussion of current economic risks associated with the purchase of
Maryland municipal securities is contained in the Statement of Additional
Information.
NON-DIVERSIFICATION
The Fund is a non-diversified investment portfolio. An investment in the Fund,
therefore, will entail greater risk than would exist in a diversified investment
portfolio because the higher percentage of investments among fewer issuers may
result in greater fluctuation in the total market value of the Fund's portfolio.
Any economic, political, or regulatory developments affecting the value of the
securities in the Fund's portfolio will have a greater impact on the total value
of the portfolio than would be the case if the portfolio were diversified among
more issuers.
However, the Fund intends to comply with Subchapter M of the Internal Revenue
Code. This undertaking requires that, at the end of each quarter of each taxable
year, with regard to at least 50% of the Fund's total assets, no more than 5% of
its total assets are invested in the securities of a single
6
<PAGE>
issuer and that with respect to the remainder of the Fund's total assets, no
more than 25% of its total assets are invested in the securities of a single
issuer.
INVESTMENT LIMITATIONS
The Fund will not borrow money or pledge securities except, under certain
circumstances, the Fund may borrow up to one-third of the value of its total
assets and pledge assets to secure such borrowings. This investment limitation
cannot be changed without shareholder approval.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940, as amended. In particular, the Fund
will comply with the various requirements of Rule 2a-7, which regulates money
market mutual funds. The Fund will determine the effective maturity of its
investments, as well as its ability to consider a security as having received
the requisite short-term ratings by NRSROs, according to Rule 2a-7. The Fund may
change these operational policies to reflect changes in the laws and regulations
without the approval of its shareholders.
FEDERATED MUNICIPAL TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the Fund's business affairs and for exercising all
the Trust's powers except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's responsibilities between
meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the Trustees.
The adviser continually conducts investment research and supervision for the
Fund and is responsible for the purchase and sale of portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee equal
to .50 of 1% of the Fund's average daily net assets. The adviser has
undertaken to reimburse the Fund up to the amount of the advisory fee for
operating expenses in excess of limitations established by certain states.
The adviser also may voluntarily choose to waive a portion of its fee or
reimburse other expenses of the Fund, but reserves the right to terminate
such waiver or reimbursement at any time at its sole discretion.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is
7
<PAGE>
President and Trustee of Federated Investors. Federated Management and other
subsidiaries of Federated Investors serve as investment advisers to a number
of investment companies and private accounts. Certain other subsidiaries
also provide administrative services to a number of investment companies.
Total assets under management or administration by these and other
subsidiaries of Federated Investors are approximately $70 billion. Federated
Investors, which was founded in 1956 as Federated Investors, Inc., develops
and manages mutual funds primarily for the financial industry. Federated
Investors' track record of competitive performance and its risk averse
investment philosophy serve approximately 3,500 client institutions
nationwide. Through these same client institutions, individual shareholders
also have access to this same level of investment expertise.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to periodic payments to
financial institutions under the Shareholder Services Plan certain financial
institutions may be compensated by the adviser or its affiliates for the
continuing investment of customers' assets in certain funds, including the Fund,
advised by those entities. These payments will be made directly by the
distributor or adviser from their assets, and will not be made from the assets
of the Fund.
DISTRIBUTION OF FUND SHARES
Federated Securities Corp. is the principal distributor for Shares of the Fund.
It is a Pennsylvania corporation organized on November 14, 1969, and is the
principal distributor for a number of investment companies. Federated Securities
Corp. is a subsidiary of Federated Investors.
State securities laws governing the ability of depository institutions to act as
underwriters or distributors of securities may differ from interpretations given
to the Glass-Steagall Act and, therefore, banks and financial institutions may
be required to register as dealers pursuant to state laws.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate which relates
to the average aggregate daily net assets of all funds advised by subsidiaries
of Federated Investors ("Federated Funds") as specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY NET ASSETS
ADMINISTRATIVE FEE OF THE FEDERATED FUNDS
-------------------- ------------------------------------
<C> <S>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.
8
<PAGE>
SHAREHOLDER SERVICES PLAN. The Fund has adopted a Shareholder Services Plan
(the "Services Plan") under which it may make payments up to 0.25 of 1% of the
average daily net asset value of the Fund to obtain certain personal services
for shareholders and the maintenance of shareholder accounts ("shareholder
services"). The Fund has entered into a Shareholder Services Agreement with
Federated Shareholder Services, a subsidiary of Federated Investors, under which
Federated Shareholder Services will either perform shareholder services directly
or will select Financial Institutions to perform shareholder services. Financial
Institutions will receive fees based upon shares owned by their clients or
customers. The schedules of such fees and the basis upon which such fees will be
paid will be determined from time to time by the Fund and Federated Shareholder
Services.
CUSTODIAN. State Street Bank and Trust, Boston, MA is custodian for the
securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Pittsburgh, PA is transfer agent for the shares of, and dividend disbursing
agent for, the Fund.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston and Donnelly,
Pittsburgh, PA and Dickstein, Shapiro and Morin, Washington, DC
INDEPENDENT PUBLIC ACCOUNTANTS. The independent Public Accountants for the Fund
are Arthur Andersen and Co., Pittsburgh, PA.
EXPENSES OF THE FUND
The Fund pays all of its allocable share of Trust expenses. The expenses of the
Fund include, but are not limited to, the cost of: organizing the Trust and
continuing its existence; Trustees' fees; investment advisory and administrative
services; printing prospectuses and other Fund documents for shareholders;
registering the Trust, the Fund, and Shares of the Fund; taxes and commissions;
issuing, purchasing, repurchasing, and redeeming Shares; fees for custodians,
transfer agents, dividend disbursing agents, shareholder servicing agents, and
registrars; printing, mailing, auditing and certain accounting and legal
expenses; reports to shareholders and governmental agencies; meetings of
Trustees and shareholders and proxy solicitations therefor; insurance premiums;
association membership dues; and such non-recurring and extraordinary items as
may arise. However, the Adviser may voluntarily reimburse the Fund the amount,
up to the amount of the advisory fee, by which operating expenses exceed
limitations imposed by certain states.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the net asset value of its Shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net asset
value per Share is determined by subtracting total liabilities from total assets
and dividing the remainder by the number of shares outstanding. The Fund cannot
guarantee that its net asset value will always remain at $1.00 per Share.
9
<PAGE>
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange and the Federal
Reserve Wire System are open for business. Shares may be purchased as described
below. In connection with any sale, Federated Securities Corp. may from time to
time offer certain items of nominal value to any shareholder or investor. The
Fund reserves the right to reject any purchase request.
THROUGH A FINANCIAL INSTITUTION. Investors may call their financial
institutions to place an order. Orders through a financial institution are
considered received when the Fund receives payment by wire or converts payment
by check from the financial institution into federal funds. It is the financial
institution's responsibility to transmit orders promptly. Financial institutions
may charge additional fees for their services.
BY WIRE. To purchase by wire, call the Fund. All information needed will be
taken over the telephone, and the order is considered received when State Street
Bank receives payment by wire. Federal funds should be wired as follows: State
Street Bank and Trust Company, Boston, Massachusetts; Attention; EDGEWIRE; For
Credit to: Maryland Municipal Cash Trust; Fund Number (this number can be found
on the account statement or by contacting the Fund) Group Number or Order
Number; Nominee or Institution Name; and ABA Number 011000028. Shares cannot be
purchased by wire on days on which the New York Stock Exchange is closed and on
federal holidays restricting wire transfers.
BY MAIL. To purchase by mail, send a check made payable to Maryland Municipal
Cash Trust to State Street Bank and Trust Company, P.O. Box 8604, Boston, MA
02266-8604. Orders by mail are considered received when payment by check is
converted by State Street Bank into federal funds. This is normally the next
business day after the check is received.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $10,000. However, an account may be opened
with a smaller amount as long as the minimum is reached within 90 days. Minimum
investments will be calculated by combining all accounts maintained with the
Fund. Financial institutions may impose different minimum investment
requirements on their customers.
WHAT SHARES COST
Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund. Investors who purchase
Shares through a bank or broker may be charged an additional service fee by that
bank or broker.
The net asset value is determined at 12:00 noon (Eastern time), 1:00 p.m.
(Eastern time), and 4:00 p.m. (Eastern time), Monday through Friday, except on:
(i) days on which there are not sufficient changes in the value of the Fund's
portfolio securities that its net asset value might be materially affected; (ii)
days during which no shares are tendered for redemption and no orders to
purchase shares are
10
<PAGE>
received; or (iii) the following holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent charges a fee based on the level of subaccounting services
rendered. Financial institutions may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the ownership of
Fund Shares. This prospectus should, therefore, be read together with any
agreement between the customer and the financial institution with regard to the
services provided, the fees charged for those services and any restrictions and
limitations imposed.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional Shares of the Fund unless cash
payments are requested by writing to the Fund. Shares purchased by wire before
1:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by
check begin earning dividends on the day after the check is converted, upon
instruction of the transfer agent, into federal funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund will distribute in cash or additional Shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which the
Fund computes its net asset value. Redemption requests must be received in
proper form and can be made as described below.
THROUGH A FINANCIAL INSTITUTION
Shares may be redeemed by calling the shareholder's financial institution.
Shares will be redeemed at the net asset value next determined after the Fund
receives the redemption request from the financial institution. The financial
institution is responsible for promptly submitting redemption requests and
11
<PAGE>
providing proper written redemption instructions. The financial institution may
charge customary fees and commissions for this service.
An authorization form permitting redemption requests by telephone must first be
completed. Authorization forms and information on this service are available
from Federated Securities Corp. Telephone redemption instructions may be
recorded. If reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If this occurs, another method of
redemption, such as "By Mail", should be considered.
RECEIVING PAYMENT. Pursuant to instructions from the financial institution,
redemptions will be made by check or by wire.
BY WIRE. Proceeds for redemption requests received before 12:00 noon,
(Eastern time) will be wired the same day but will not be entitled to that
day's dividend. Redemption requests received after 12:00 noon, (Eastern
time) will receive that day's dividends and will be wired the following
business day.
BY CHECK. Normally, a check for the proceeds is mailed within one business
day, but in no event more than seven days, after receipt of a proper
redemption request. Dividends are paid up to and including the day that a
redemption request is processed.
BY MAIL
Shares may be redeemed by sending a written request to the transfer agent. The
written request should state: Maryland Municipal Cash Trust; shareholder's name;
the account number; and the Share or dollar amount requested. Sign the request
exactly as the Shares are registered. Shareholders should call the Fund for
assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.
Shareholders requesting a redemption of $50,000 or more, a redemption of any
amount to be sent to an address other than that on record with the Fund, or a
redemption payable other than to the shareholder of record must have their
signatures guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member firm of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
12
<PAGE>
The Fund and the transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of the
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
BY WRITING A CHECK
At the shareholder's request, State Street Bank and Trust will establish a
checking account for redeeming shares. A fee is charged for this service. For
further information, contact the Fund.
With this checking account, Shares may be redeemed by writing a check. The
redemption will be made at the net asset value on the date that the check is
presented to the Fund. A check may not be written to close an account. A
shareholder may obtain cash by negotiating the check through the shareholder's
local bank. Checks should never be made payable or sent to State Street Bank and
Trust to redeem Shares. Cancelled checks are sent to the shareholder each month.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $10,000 due to
shareholder redemptions.
Before Shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional Shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights, except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Fund's operation and for
the election of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding Shares of the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal
13
<PAGE>
documents with Massachusetts that expressly disclaim the liability of its
shareholders for acts or obligations of the Trust. These documents require
notice of this disclaimer to be given in each agreement, obligation, or
instrument the Trust or its Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code applicable to regulated investment companies and to
receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.
Shareholders are not required to pay the federal regular income tax on any
dividends received from the Fund that represent net interest on tax-exempt
municipal bonds. However, under the Tax Reform Act of 1986, dividends
representing net interest earned on certain "private activity" bonds issued
after August 7, 1986, may be included in calculating the federal individual
alternative minimum tax or the federal alternative minimum tax for corporations.
The Fund may purchase all types of municipal bonds, including private activity
bonds.
The alternative minimum tax, up to 28% of alternative minimum taxable income for
individuals and 20% for corporations, applies when it exceeds the regular tax
for the taxable year. Alternative minimum taxable income is equal to the regular
taxable income of the taxpayer increased by certain "tax preference" items not
included in regular taxable income and reduced by only a portion of the
deductions allowed in the calculation of the regular tax.
The Tax Reform Act of 1986 treats interest on certain "private activity" bonds
issued after August 7, 1986, as a tax preference item for both individuals and
corporations. Unlike traditional governmental purpose municipal bonds, which
finance roads, schools, libraries, prisons and other public facilities, private
activity bonds provide benefits to private parties. The Fund may purchase all
types of municipal bonds, including private activity bonds. Thus, should it
purchase any such bonds, a portion of the Fund's dividends may be treated as a
tax preference item.
In addition, in the case of a corporate shareholder, dividends of the Fund which
represent interest on municipal bonds may be subject to the 20% corporate
alternative minimum tax because the dividends are included in a corporation's
"adjusted current earnings." The corporate alternative minimum tax
14
<PAGE>
treats 75% of the excess of a taxpayer's pre-tax "adjusted current earnings"
over the taxpayer's preadjusted alternative minimum taxable income as a tax
preference item. "Adjusted current earnings" is based upon the concept of a
corporation's "earnings and profits." Since "earnings and profits" generally
includes the full amount of any Fund dividend, and alternative minimum taxable
income does not include the portion of the Fund's dividend attributable to
municipal bonds which are not private activity bonds, 75% of the difference will
be included in the calculation of the corporation's alternative minimum tax.
Dividends of the Fund representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.
These tax consequences apply whether dividends are received in cash or as
additional shares.
MARYLAND TAX CONSIDERATIONS
Under existing Maryland law, shareholders of the Fund who are individuals,
corporations, estates or trusts will not be subject to Maryland state or local
taxes on Fund dividends to the extent that such dividends qualify as
exempt-interest dividends for federal income tax purposes which are attributable
to (i) interest on tax-exempt obligations of Maryland or its political
subdivisions or authorities, (ii) interest on obligations of the United States
or an authority, commission, instrumentality, possession or territory of the
United States, or (iii) gain realized by the Fund from the sale or exchange of
bonds issued by Maryland, a political subdivision of Maryland, or the United
States government (excluding obligations issued by the District of Columbia, a
territory or possession of the United States, or a department, agency,
instrumentality, or political subdivision of the District, territory or
possession).
Distributions, if any, derived from other sources generally will be taxable for
Maryland income tax purposes to shareholders of the Fund who are subject to
Maryland income tax.
OTHER STATE AND LOCAL TAXES
Income from the Fund is not necessarily free from taxes in states other than
Maryland. Shareholders are urged to consult their own tax advisers regarding the
status of their accounts under state and local tax laws.
15
<PAGE>
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises its yield, effective yield, and
tax-equivalent yield.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment. The tax-equivalent yield is calculated similarly to the yield, but
is adjusted to reflect the taxable yield that would have to be earned to equal
the Fund's tax exempt yield, assuming a specific tax rate.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the Fund after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, the Fund may advertise its performance using certain
reporting services and/or compare its performance to certain indices.
16
<PAGE>
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Fund
Maryland Municipal Cash Trust Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -------------------------------------------------------------------------------------------
Investment Advisor
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -------------------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company P.O. Box 8602
Boston, Massachusetts 02266-8602
- -------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- -------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin 2101 L Street, N.W.
Washington, D.C. 20037
- -------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen & Co. 2100 PPG Place
Pittsburgh, Pennsylvania 15222
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
MARYLAND MUNICIPAL
CASH TRUST
PROSPECTUS
A NON-DIVERSIFIED PORTFOLIO OF
FEDERATED MUNICIPAL TRUST,
AN OPEN-END MANAGEMENT
INVESTMENT COMPANY
PROSPECTUS DATED MAY 4, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
G00105-01-A (5/94)
<PAGE>
MARYLAND MUNICIPAL CASH TRUST
(A PORTFOLIO OF FEDERATED MUNICIPAL TRUST)
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus of Maryland Municipal Cash Trust (the "Fund") dated May
4, 1994. This Statement is not a prospectus itself. To receive a
copy of the prospectus, write or call Federated Municipal Trust.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated May 4, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
GENERAL INFORMATION ABOUT THE FUND 1
- ---------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES 1
- ---------------------------------------------------------
Acceptable Investments 1
When-Issued and Delayed Delivery
Transactions 1
Temporary Investments 2
Investment Limitations 2
Maryland Investment Risks 4
TRUST MANAGEMENT 4
- ---------------------------------------------------------
Officers and Trustees 4
Fund Ownership 6
The Funds 6
Trustee Liability 7
INVESTMENT ADVISORY SERVICES 7
- ---------------------------------------------------------
Adviser to the Fund 7
Advisory Fees 7
ADMINISTRATIVE SERVICES 7
- ---------------------------------------------------------
SHAREHOLDER SERVICES PLAN 8
- ---------------------------------------------------------
BROKERAGE TRANSACTIONS 8
- ---------------------------------------------------------
PURCHASING SHARES 8
- ---------------------------------------------------------
Conversion to Federal Funds 8
DETERMINING NET ASSET VALUE 8
- ---------------------------------------------------------
Use of Amortized Cost Method 9
REDEEMING SHARES 10
- ---------------------------------------------------------
Redemption in Kind 10
TAX STATUS 10
- ---------------------------------------------------------
The Fund's Tax Status 10
YIELD 10
- ---------------------------------------------------------
EFFECTIVE YIELD 11
- ---------------------------------------------------------
TAX-EQUIVALENT YIELD 11
- ---------------------------------------------------------
Tax-Equivalency Table 11
PERFORMANCE COMPARISONS 12
- ---------------------------------------------------------
APPENDIX 13
- ---------------------------------------------------------
</TABLE>
I
<PAGE>
GENERAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------
The Fund is a portfolio in Federated Municipal Trust (the "Trust"), which was
established as a Massachusetts business trust under a Declaration of Trust dated
September 1, 1989.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is to provide current income exempt from federal
regular income tax and the income tax imposed by the State of Maryland and
Maryland municipalities consistent with stability of principal. The investment
objective cannot be changed without approval of shareholders.
ACCEPTABLE INVESTMENTS
The Fund invests primarily in debt obligations issued by or on behalf of the
State of Maryland and of other states, territories and possessions of the United
States, including the District of Columbia, and any political subdivision or
financing authority of any of these, the income from which is, in the opinion of
qualified legal counsel, exempt from both federal regular income tax and
Maryland state and local income tax.
When determining whether a Maryland municipal security presents minimal credit
risks, the investment adviser considers the creditworthiness of the issuer of
the security, the issuer of a demand feature if the Fund has the unconditional
right to demand payment for the security, or the guarantor of payment by either
of those issuers.
If a security loses its rating or the security's rating is reduced below the
required minimum after the Fund purchased it, the Fund is not required to sell
the security. The investment adviser considers this event, however, in its
determination of whether the Fund should continue to hold the security in its
portfolio. If ratings made by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Corporation ("S&P") change because of changes in those
organizations or in their rating systems, the Fund will try to use comparable
ratings as standards in accordance with the investment policies described in the
Fund's prospectus.
MUNICIPAL LEASES
Under the criteria currently established by the Board of Trustees
("Trustees"), the Fund's investment adviser must consider the following
factors in determining the liquidity of municipal lease securities: (1)
the frequency of trades and quotes for the security; (2) the volatility of
quotations and trade prices for the security; (3) the number of dealers
willing to purchase or sell the security and the number of potential
purchasers; (4) dealer undertakings to make a market in the security; (5)
the nature of the security and the nature of the marketplace trades; (6)
the rating of the security and the financial condition and prospects of
the issuer of the security; and (7) such other factors as may be relevant
to the Fund's ability to dispose of the security. In the case of a
municipal lease security, the adviser must also consider the following
additional factors: (a) whether the lease can be terminated by the lessee;
(b) the potential recovery, if any, from a sale of the leased property
upon termination of the lease; (c) the lessee's general credit strength;
(d) the likelihood that the lessee will discontinue appropriating funding
for the leased property because the property is no longer deemed essential
to its operations; and (e) any credit enhancement or legal recourse
provided upon an event of nonappropriation or other termination of the
lease.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are arrangements in which the Fund purchases securities with
payment and delivery scheduled for a future time. The Fund engages in
when-issued and delayed delivery transactions only for the purpose of acquiring
portfolio securities consistent with the Fund's investment objective and
policies, not for investment leverage.
These transactions are made to secure what is considered to be an advantageous
price and yield for the Fund. Settlement dates may be a month or more after
entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices.
No fees or other expenses, other than normal transaction costs, are incurred.
However, liquid assets of the Fund sufficient to make payment for the securities
to be purchased are segregated on the Fund's records at the trade date. These
securities are marked to market daily and maintained until the transaction is
settled.
The Fund may engage in these transactions to an extent that would cause the
segregation of an amount up to 20% of the total value of its assets.
1
<PAGE>
- --------------------------------------------------------------------------------
TEMPORARY INVESTMENTS
The Fund may also invest in high quality temporary investments during times of
unusual market conditions for defensive purposes and to maintain liquidity.
REPURCHASE AGREEMENTS
Repurchase agreements are arrangements in which banks, broker/dealers and
other recognized financial institutions sell U.S. government securities or
other securities to the Fund and agree at the time of sale to repurchase
them at a mutually agreed upon time and price within one year from the
date of acquisition. The Fund or its custodian will take possession of the
securities subject to repurchase agreements and these securities will be
marked to market daily. To the extent that the original seller does not
repurchase the securities from the Fund, the Fund could receive less than
the repurchase price on any sale of such securities. In the event that a
defaulting seller filed for bankruptcy or became insolvent, disposition of
such securities by the Fund might be delayed pending court action. The
Fund believes that under the regular procedures normally in effect for
custody of the Fund's portfolio securities subject to repurchase
agreements, a court of competent jurisdiction would rule in favor of the
Fund and allow retention or disposition of such securities. The Fund will
only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the
Fund's investment adviser to be creditworthy pursuant to guidelines
established by the Trustees.
INVESTMENT LIMITATIONS
SELLING SHORT AND BUYING ON MARGIN
The Fund will not sell any securities short or purchase any securities on
margin but may obtain such short-term credits as may be necessary for
clearance of transactions.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund will not issue senior securities except that the Fund may borrow
money directly or through reverse repurchase agreements in amounts up to
one-third of the value of its net assets, including the amounts borrowed.
The Fund will not borrow money or engage in reverse repurchase agreements
for investment leverage, but rather as a temporary, extraordinary, or
emergency measure or to facilitate management of the portfolio by enabling
the Fund to meet redemption requests when the liquidation of portfolio
securities is deemed to be inconvenient or disadvantageous. The Fund will
not purchase any securities while borrowings in excess of 5% of its total
assets are outstanding.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In those cases, it may pledge assets having a
market value not exceeding the lesser of the dollar amounts borrowed or
15% of the value of its total assets at the time of the pledge.
INVESTING IN REAL ESTATE
The Fund will not purchase or sell real estate or real estate limited
partnership's, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in securities
which are secured by real estate or interests in real estate.
INVESTING IN COMMODITIES
The Fund will not purchase or sell commodities, commodity contracts, or
commodity futures contracts.
UNDERWRITING
The Fund will not underwrite any issue of securities, except as it may be
deemed to be an underwriter under the Securities Act of 1933 in connection
with the sale of securities in accordance with its investment objective,
policies and limitations.
2
<PAGE>
- --------------------------------------------------------------------------------
LENDING CASH OR SECURITIES
The Fund will not lend any of its assets, except that it may acquire
publicly or nonpublicly issued Maryland municipal securities or temporary
investments or enter into repurchase agreements, in accordance with its
investment objective, policies, limitations, and its Declaration of Trust.
CONCENTRATION OF INVESTMENTS
The Fund will not purchase securities if, as a result of such purchase,
25% or more of the value of its total assets would be invested in any one
industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects.
However, the Fund may invest as temporary investments more than 25% of the
value of its assets in cash or cash items, securities issued or guaranteed
by the U.S. government, its agencies, or instrumentalities, or instruments
secured by these money market instruments, such as repurchase agreements.
The above investment limitations cannot be changed without shareholder approval.
The following investment limitations, however, may be changed by the Trustees
without shareholder approval. Shareholders will be notified before any material
change in these limitations becomes effective.
RESTRICTED SECURITIES
The Fund will not invest more than 10% of its total assets in securities
subject to restrictions on resale under the Securities Act of 1933 except
for certain restricted securities which meet the criteria for liquidity as
established by the Trustees.
ILLIQUID SECURITIES
The Fund will not invest more than 10% of the value of its net assets in
securities which are illiquid, including repurchase agreements providing
for settlement in more than seven days after notice, certain restricted
securities not determined by the Trustees to be liquid, and non-negotiable
fixed time deposits with maturities over seven days.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund will not purchase securities of other investment companies,
except as part of a merger, consolidation, reorganization, or other
acquisition.
INVESTING IN NEW ISSUERS
The Fund will not invest more than 5% of the value of its total assets in
industrial development bonds or other municipal securities where the
principal and interest is the responsibility of companies (or guarantors,
where applicable) with less than three years of continuous operations,
including the operation of any predecessor.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND TRUSTEES OF
THE TRUST
The Fund will not purchase or retain the securities of any issuer if the
officers and Trustees of the Trust or its investment adviser, owning
individually more than 1/2 of 1% of the issuer's securities, together own
more than 5% of the issuer's securities.
INVESTING IN MINERALS
The Fund will not purchase or sell oil, gas, or other mineral exploration
or development programs, or leases.
Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
restriction.
The Fund does not expect to borrow money or pledge securities in excess of 5% of
the value of its net assets during the coming fiscal year.
In order to comply with certain state restrictions, the Fund will not invest in
real estate limited partnership's or oil, gas or other mineral leases.
3
<PAGE>
- --------------------------------------------------------------------------------
For purpose of its policies and limitations, the Fund considers certificates of
deposit and demand and time deposits issued by a U.S. branch of a domestic bank
or savings and loan having capital, surplus, and undivided profits in excess of
$100,000,000 at the time of investment to be "cash items".
MARYLAND INVESTMENT RISKS
The State of Maryland's economy differs from that of the nation, with a far
smaller contribution to jobs and earnings coming from manufacturing, and a
heavier dependence on government, services (particularly business, engineering,
and management services), and trade. Much of Maryland's economic structure
reflects its location adjacent to Washington, DC. The state was little affected
by the recession of the early 1980's with total jobs growing at a pace 23%
faster that the nation's during the entire decade. In the 1990-91 recession, the
state experienced significant job losses in the construction and retail trade
sectors; however, throughout the recession and during the past two years, the
state's unemployment rate remained below that of the nation. Slow growth is now
apparent in several sectors of the state's economy.
State finances are well managed with strong administrative control exercised by
the State Board of Public Works, which is comprised of the governor, treasurer,
and the controller. The revenue stream is diversified, relying on sales and
income taxes; state property tax continues to be levied to provide for a portion
of debt service. The State experienced moderate financial strain from 1990
through 1992, requiring successive budgetary adjustments and remedial action to
control operating deficits. The fiscal 1994 budget relies on conservative
revenue estimates and economic growth, and establishes a rainy day fund at 5% of
General Fund revenues, up from the 2% target level of prior years.
Maryland has been among the most heavily indebted of the states, although its
position is more moderate given the borrowing associated with the state's
assumption of local school construction costs. Closely following the annual
recommendation of its capital debt affordability committee, the state has
restrained borrowing in recent years, yielding a more modest relative debt
position.
The Fund's concentration in securities issued by the State and its political
subdivisions provides a greater level of risk than a fund which is diversified
across numerous states and municipal entities. The ability of the State or its
municipalities to meet their obligations will depend on the availability of tax
and other revenues; economic, political, and demographic conditions within the
State; and the underlying fiscal condition of the State, and its municipalities.
TRUST MANAGEMENT
- --------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Officers and Trustees are listed with their addresses, principal occupations,
and present positions, including any affiliation with Federated Management,
Federated Investors, Federated Securities Corp., Federated Services Company,
Federated Administrative Services, Inc., and the Funds (as defined below).
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John F. Donahue*+ Chairman and Chairman and Trustee, Federated Investors; Chairman and
Federated Investors Trustee Trustee, Federated Advisers, Federated Management, and
Tower Federated Research; Director, AEtna Life and Casualty
Pittsburgh, PA Company; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds; formerly, Director,
The Standard Fire Insurance Company. Mr. Donahue is the
father of J. Christopher Donahue, Vice President of the
Trust.
- ----------------------------------------------------------------------------------------------------------------------
John T. Conroy, Jr. Trustee President, Investment Properties Corporation; Senior
Wood/IPC Commercial Vice-President, John R. Wood and Associates, Inc., Realtors;
Department President, Northgate Village Development Corporation;
John R. Wood and General Partner or Trustee in private real estate ventures
Associates, Inc., Realtors in Southwest Florida; Director, Trustee, or Managing General
3255 Tamiami Trail North Partner of the Funds; formerly, President, Naples Property
Naples, FL Management, Inc.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
William J. Copeland Trustee Director and Member of the Executive Committee, Michael
One PNC Plaza - 23rd Baker, Inc.; Director, Trustee, or Managing General Partner
Floor of the Funds; formerly, Vice Chairman and Director, PNC
Pittsburgh, PA Bank, N.A. and PNC Bank Corp. and Director, Ryan Homes, Inc.
- ----------------------------------------------------------------------------------------------------------------------
James E. Dowd Trustee Attorney-at-law; Director, The Emerging Germany Fund, Inc.;
571 Hayward Mill Road Director, Trustee, or Managing General Partner of the Funds;
Concord, MA formerly, Director, Blue Cross of Massachusetts, Inc.
- ----------------------------------------------------------------------------------------------------------------------
Lawrence D. Ellis, M.D. Trustee Hematologist, Oncologist, and Internist, Presbyterian and
3471 Fifth Avenue Montefiore Hospitals; Clinical Professor of Medicine and
Suite 1111 Trustee, University of Pittsburgh; Director, Trustee, or
Pittsburgh, PA Managing General Partner of the Funds.
- ----------------------------------------------------------------------------------------------------------------------
Edward L. Flaherty, Jr.+ Trustee Attorney-at-law; Partner, Meyer and Flaherty; Director,
5916 Penn Mall Eat'N Park Restaurants, Inc., and Statewide Settlement
Pittsburgh, PA Agency, Inc.; Director, Trustee, or Managing General Partner
of the Funds; formerly, Counsel, Horizon Financial, F.A.,
Western Region.
- ----------------------------------------------------------------------------------------------------------------------
Glen R. Johnson* President and Trustee, Federated Investors; President and/or Trustee of
Federated Investors Trustee some of the Funds; staff member, Federated Securities Corp.
Tower and Federated Administrative Services.
Pittsburgh, PA
- ----------------------------------------------------------------------------------------------------------------------
Peter E. Madden Trustee Consultant; State Representative, Commonwealth of
225 Franklin Street Massachusetts; Director, Trustee, or Managing General
Boston, MA Partner of the Funds; formerly, President, State Street Bank
and Trust Company and State Street Boston Corporation and
Trustee, Lahey Clinic Foundation, Inc.
- ----------------------------------------------------------------------------------------------------------------------
Gregor F. Meyer Trustee Attorney-at-law; Partner, Meyer and Flaherty; Chairman,
5916 Penn Mall Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.;
Pittsburgh, PA Director, Trustee, or Managing General Partner of the Funds;
formerly, Vice Chairman, Horizon Financial, F.A.
- ----------------------------------------------------------------------------------------------------------------------
Wesley W. Posvar Trustee Professor, Foreign Policy and Management Consultant;
1202 Cathedral of Trustee, Carnegie Endowment for International Peace, OnLine
Learning Computer Library Center, Inc., RAND Corporation, and U.S.
University of Pittsburgh Space Foundation; Chairman, Czecho Slovak Management Center;
Pittsburgh, PA Director, Trustee or Managing General Partner of the Funds;
President Emeritus, University of Pittsburgh; formerly
Chairman, National Advisory Council for Environmental Policy
and Technology.
- ----------------------------------------------------------------------------------------------------------------------
Marjorie P. Smuts Trustee Public relations/marketing consultant; Director, Trustee, or
4905 Bayard Street Managing General Partner of the Funds.
Pittsburgh, PA
- ----------------------------------------------------------------------------------------------------------------------
J. Christopher Donahue Vice President President and Trustee, Federated Investors; Trustee,
Federated Investors Federated Advisers, Federated Management, and Federated
Tower Research; President and Trustee, Federated Administrative
Pittsburgh, PA Services; Trustee, Federated Services Company; President or
Vice President of the Funds; Director, Trustee or Managing
General Partner of some of the Funds. Mr. Donahue is the son
of John F. Donahue, Chairman and Trustee of the Trust.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Richard B. Fisher Vice President Executive Vice President and Trustee, Federated Investors;
Federated Investors Chairman and Director, Federated Securities Corp.; President
Tower or Vice President of the Funds; Director or Trustee of some
Pittsburgh, PA of the Funds.
- ----------------------------------------------------------------------------------------------------------------------
Edward C. Gonzales Vice President Vice President, Treasurer and Trustee, Federated Investors;
Federated Investors and Treasurer Vice President and Treasurer, Federated Advisers, Federated
Tower Management, and Federated Research; Trustee, Federated
Pittsburgh, PA Services Company; Executive Vice President, Treasurer, and
Director, Federated Securities Corp.; Chairman, Treasurer,
and Trustee, Federated Administrative Services; Trustee or
Director of some of the Funds; Vice President and Treasurer
of the Funds.
- ----------------------------------------------------------------------------------------------------------------------
John W. McGonigle Vice President Vice President, Secretary, General Counsel, and Trustee,
Federated Investors and Secretary Federated Investors; Vice President, Secretary and Trustee,
Tower Federated Advisers, Federated Management, and Federated
Pittsburgh, PA Research; Trustee, Federated Services Company; Executive
Vice President, Secretary, and Trustee, Federated
Administrative Services; Director and Executive Vice
President, Federated Securities Corp.; Vice President and
Secretary of the Funds.
- ----------------------------------------------------------------------------------------------------------------------
John A. Staley, IV Vice President Vice President and Trustee, Federated Investors; Executive
Federated Investors Vice President, Federated Securities Corp.; President and
Tower Trustee, Federated Advisers, Federated Management, and
Pittsburgh, PA Federated Research; Vice President of the Funds; Director,
Trustee, or Managing General Partner of some of the Funds;
formerly, Vice President, The Standard Fire Insurance
Company and President of its Federated Research Division.
- ----------------------------------------------------------------------------------------------------------------------
<FN>
* This Trustee is deemed to be an "interested person" of the Trust as defined in
the Investment Company Act of 1940.
+ Member of the Trust's Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Trustees between
meetings of the Trustees.
</TABLE>
FUND OWNERSHIP
Officers and Trustees own less than 1% of the Fund's outstanding shares.
THE FUNDS
"The Funds" and "Funds" mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management Trust;
Automated Government Money Trust; California Municipal Cash Trust; Cash Trust
Series, Inc.; Cash Trust Series II; DG Investor Series; Edward D. Jones & Co.
Daily Passport Cash Trust; FT Series, Inc.; Federated ARMs Fund; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust; Federated
Growth Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Intermediate Government
Trust; Federated Master Trust; Federated Municipal Trust; Federated
Short-Intermediate Government Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust; Federated U.S. Government Bond
Fund; First Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable
Rate U.S. Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress
Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government Income
Securities, Inc.; High Yield Cash Trust; Insight Institutional Series, Inc.;
Insurance Management Series; Intermediate Municipal Trust; International Series,
Inc., Investment Series Funds, Inc.; Investment Series Trust; Liberty Equity
Income Fund, Inc.; Liberty High Income Bond Fund, Inc.; Liberty Municipal
Securities Fund, Inc.; Liberty Term Trust, Inc.--1999; Liberty U.S. Government
Money Market Trust; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed
Series Trust; Mark Twain Funds; Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Trust; Municipal Securities Income Trust; New
York Municipal Cash Trust; 111 Corcoran Funds; Peachtree Funds; The Planters
Funds; Portage Funds; RIMCO Monument Funds; The Shawmut Funds; Short-Term
Municipal Trust; Signet Select Funds; Star Funds; The
6
<PAGE>
- --------------------------------------------------------------------------------
Starburst Funds; The Starburst Funds II; Stock and Bond Fund, Inc.; Sunburst
Funds; Targeted Duration Trust; Tax-Free Instruments Trust; Trademark Funds;
Trust for Financial Institutions; Trust for Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; and Trust for U.S. Treasury Obligations;
World Investment Series, Inc.
TRUSTEE LIABILITY
The Trust's Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
INVESTMENT ADVISORY SERVICES
- --------------------------------------------------------------------------------
ADVISER TO THE FUND
The Fund's investment adviser is Federated Management. Federated Management is a
subsidiary of Federated Investors. All of the Class A (voting) shares of
Federated Investors are owned by a trust, the trustees of which are John F.
Donahue, his wife, and his son, J. Christopher Donahue. John F. Donahue is
Chairman and Trustee, Federated Management; Chairman and Trustee, Federated
Investors; and Chairman and Trustee of the Trust. John A. Staley, IV, is
President and Trustee, Federated Management; Vice President and Trustee,
Federated Investors; Executive Vice President, Federated Securities Corp.; and
Vice President of the Trust. J. Christopher Donahue is Trustee, Federated
Management; President and Trustee, Federated Investors; President and Director,
Federated Administrative Services, Inc.; and Vice President of the Trust. John
W. McGonigle is Vice President, Secretary, and Trustee, Federated Management;
Vice President, Secretary, General Counsel, and Trustee, Federated Investors;
Executive Vice President, Secretary and Director, Federated Administrative
Services, Inc.; Executive Vice President and Director, Federated Securities
Corp; and Vice President and Secretary of the Trust.
The adviser shall not be liable to the Trust, the Fund, or any shareholder of
the Fund for any losses that may be sustained in the purchase, holding, or sale
of any security, or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Trust.
ADVISORY FEES
For its advisory services, Federated Management receives an annual investment
advisory fee as described in the prospectus.
STATE EXPENSE LIMITATIONS
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares are
registered for sale in those states. If the Fund's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes, and extraordinary expenses) exceed
2 1/2% per year of the first $30 million of average net assets, 2% per
year of the next $70 million of average net assets, and 1 1/2% per year of
the remaining average net assets, the adviser will reimburse the Fund for
its expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this expense
limitation, the investment advisory fee paid will be reduced by the amount
of the excess, subject to an annual adjustment. If the expense limitation
is exceeded, the amount to be reimbursed by the adviser will be limited,
in any single fiscal year, by the amount of the investment advisory fee.
These arrangements are not part of the advisory contract and have been
established only to comply with applicable state authorities. They may be
amended or rescinded in the future.
ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------
Federated Administrative Services, a subsidiary of Federated Investors, provides
administrative personnel and services to the Fund for a fee as described in the
prospectus. John A. Staley, IV, an officer of the Trust, and Dr. Henry J.
Gailliot, an officer of Federated Management, the adviser to the Fund, hold
approximately 15% and 20%, respectively, of the outstanding common stock and
serve as directors of Commercial Data Services, Inc., a
7
<PAGE>
- --------------------------------------------------------------------------------
company which provides computer processing services to Federated Administrative
Services, Inc., and Federated Administrative Services. For the fiscal years
ended October 31, 1993, 1992, and 1991, Federated Administrative Services, Inc.
paid approximately $165,431, $189,741, and $187,677, respectively, for services
provided by Commercial Data Services, Inc.
SHAREHOLDER SERVICES PLAN
- --------------------------------------------------------------------------------
This arrangement permits the payment of fees to Federated Shareholder Services
and, indirectly, to financial institutions to cause services to be provided to
shareholders by a representative who has knowledge of the shareholder's
particular circumstances and goals. These activities and services may include,
but are not limited to, providing office space, equipment, telephone facilities,
and various clerical, supervisory, computer, and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash balance; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and addresses.
BROKERAGE TRANSACTIONS
- --------------------------------------------------------------------------------
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the adviser looks for prompt execution of the order at a favorable
price. In working with dealers, the investment adviser will generally use those
who are recognized dealers in specific portfolio instruments, except when a
better price and execution of the order can be obtained elsewhere. The adviser
makes decisions on portfolio transactions and selects brokers and dealers
subject to review by the Trustees.
The adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Fund or to the adviser
and may include:
- advice as to the advisability of investing in securities;
- security analysis and reports;
- economic studies;
- industry studies;
- receipt of quotations for portfolio evaluations; and
- similar services.
The adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions charged
by such persons are reasonable in relationship to the value of the brokerage and
research services provided.
Research services provided by brokers may be used by the adviser or by
affiliates of Federated Investors in advising other accounts. To the extent that
receipt of these services may supplant services for which the adviser or its
affiliates might otherwise have paid, it would tend to reduce their expenses.
PURCHASING SHARES
- --------------------------------------------------------------------------------
Shares are sold at their net asset value without a sales charge on days the New
York Stock Exchange and the Federal Reserve Wire System are open for business.
The procedure for purchasing shares is explained in the prospectus under
"Investing in the Fund."
CONVERSION TO FEDERAL FUNDS
It is the Fund's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds. State Street Bank acts as the
shareholder's agent in depositing checks and converting them to federal funds.
DETERMINING NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the value of a share at $1.00. The days on which
net asset value is calculated by the Fund are described in the prospectus. Net
asset value will not be calculated on the following holidays: New
8
<PAGE>
- --------------------------------------------------------------------------------
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, and Christmas Day.
USE OF AMORTIZED COST METHOD
The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in Rule 2a-7, as amended (the
"Rule"), promulgated by the Securities and Exchange Commission under the
Investment Company Act of 1940. Under the Rule, the Trustees must establish
procedures reasonably designed to stabilize the net asset value per share, as
computed for purposes of distribution and redemption, at $1.00, taking into
account current market conditions and the Fund's investment objective.
Under the Rule, the Fund is permitted to purchase instruments which are subject
to demand features or standby commitments. As defined by the Rule, a demand
feature entitles the Fund to receive the principal amount of the instrument from
the issuer or a third party (1) on no more than 30 days' notice or (2) at
specified intervals not exceeding one year on no more than 30 days' notice. A
standby commitment entitles the Fund to achieve same day settlement and to
receive an exercise price equal to the amortized cost of the underlying
instrument plus accrued interest at the time of exercise.
Although demand features and standby commitments are techniques and are defined
as "puts" under the Rule, the Fund does not consider them to be "puts" as that
term is used in the Fund's investment limitations. Demand features and standby
commitments are features which enhance an instrument's liquidity, and the
investment limitation which proscribes puts is designed to prohibit the purchase
and sale of put and call options and is not designed to prohibit the Fund from
using techniques which enhance the liquidity of portfolio instruments.
MONITORING PROCEDURES
The Trustees' procedures include monitoring the relationship between the
amortized cost value per share and the net asset value per share based
upon available indications of market value. The Trustees will decide what,
if any, steps should be taken if there is a difference of more than 0.5%
between the two values. The Trustees will take any steps they consider
appropriate (such as redemption in kind or shortening the average
portfolio maturity) to minimize any material dilution or other unfair
results arising from differences between the two methods of determining
net asset value.
INVESTMENT RESTRICTIONS
The Rule requires that the Fund limit its investments to instruments that,
in the opinion of the Trustees, present minimal credit risk and have
received the requisite rating from one or more nationally recognized
statistical rating organizations. If the instruments are not rated, the
Trustees must determine that they are of comparable quality. The Rule also
requires the Fund to maintain a dollar-weighted average portfolio maturity
(not more than 90 days) appropriate to the objective of maintaining a
stable net asset value of $1.00 per share. In addition, no instrument with
a remaining maturity of more than 397 days can be purchased by the Fund.
For the treatment of Variable Rate Municipal Securities with demand
features, refer to "Variable Rate Demand Notes" in the prospectus.
Should the disposition of a portfolio security result in a dollar-weighted
average portfolio maturity of more than 90 days, the Fund will invest its
available cash to reduce the average maturity to 90 days or less as soon
as possible.
The Fund may attempt to increase yield by trading portfolio securities to take
advantage of short-term market variations. This policy may, from time to time,
result in high portfolio turnover. Under the amortized cost method of valuation,
neither the amount of daily income nor the net asset value is affected by any
unrealized appreciation or depreciation of the portfolio.
In periods of declining interest rates, the indicated daily yield on shares of
the Fund, computed by dividing the annualized daily income on the Fund's
portfolio by the net asset value computed as above, may tend to be higher than a
similar computation made by using a method of valuation based upon market prices
and estimates.
9
<PAGE>
- --------------------------------------------------------------------------------
In periods of rising interest rates, the indicated daily yield on shares of the
Fund computed the same way may tend to be lower than a similar computation made
by using a method of calculation based upon market prices and estimates.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems shares at the next computed net asset value after the Fund
receives the redemption request. Redemption procedures are explained in the
prospectus under "Redeeming Shares." Although State Street Bank does not charge
for telephone redemptions, it reserves the right to charge a fee for the cost of
wire-transferred redemptions of less than $5,000.
REDEMPTION IN KIND
Although the Trust intends to redeem shares in cash, it reserves the right under
certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from the Fund's portfolio. To the extent available,
such securities will be readily marketable.
Redemption in kind will be made in conformity with applicable Securities and
Exchange Commission rules, taking such securities at the same value employed in
determining net asset value and selecting the securities in a manner the
Trustees determine to be fair and equitable.
The Trust has elected to be governed by Rule 18f-1 of the Investment Company Act
of 1940 under which the Trust is obligated to redeem shares for any one
shareholder in cash only up to the lesser of $250,000 or 1% of the Fund's net
asset value during any 90-day period.
TAX STATUS
- --------------------------------------------------------------------------------
THE FUND'S TAX STATUS
The Fund will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code, as amended,
applicable to regulated investment companies and to receive the special tax
treatment afforded to such companies. To qualify for this treatment, the Fund
must, among other requirements:
- derive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities;
- derive less than 30% of its gross income from the sale of securities held
less than three months;
- invest in securities within certain statutory limits; and
- distribute to its shareholders at least 90% of its net income earned
during the year.
YIELD
- --------------------------------------------------------------------------------
The Fund calculates its yield based upon the seven days ending on the day of the
calculation, called the "base period." This yield is computed by:
- determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any additional
shares purchased with dividends earned from the original one share and (on
funds that pay dividends daily) all dividends declared on the original and
any purchased shares;
- dividing the net change in the account's value by the value of the account
at the beginning of the base period to determine the base period return;
and
- multiplying the base period return by (365/7).
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in the Fund,
the performance will be reduced for those shareholders paying those fees.
10
<PAGE>
- --------------------------------------------------------------------------------
EFFECTIVE YIELD
- --------------------------------------------------------------------------------
The Fund's effective yield is computed by compounding the unannualized base
period return by:
- adding 1 to the base period return;
- raising the sum to the 365/7th power; and
- subtracting 1 from the result.
TAX-EQUIVALENT YIELD
- --------------------------------------------------------------------------------
The Fund's tax-equivalent yield is calculated similarly to the yield, but is
adjusted to reflect the taxable yield that the Fund would have had to earn to
equal its actual yield, assuming a 39.6% tax rate (the maximum effective federal
rate for individuals) assuming that income earned is 100% tax-exempt.
TAX-EQUIVALENCY TABLE
The Fund may also use a tax-equivalency table in advertising and sales
literature. The interest earned by the municipal bonds in the Fund's
portfolio generally remains free from federal regular income tax,* and is
often free from state and local taxes as well. As the table below
indicates, a "tax-free" investment is an attractive choice for investors,
particularly in times of narrow spreads between tax-free and taxable
yields.
<TABLE>
<CAPTION>
TAXABLE YIELD EQUIVALENT FOR 1994
STATE OF MARYLAND
INCLUDING LOCAL INCOME TAX
- ----------------------------------------------------------------------------------------
COMBINED FEDERAL, STATE AND COUNTY INCOME TAX BRACKET
22.50% 35.50% 38.50% 40.00% 43.50% 45.00% 48.60%
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SINGLE $1- $22,751- $55,101- $100,001- $140,001- Over
Return: 22,750 55,100 100,000 140,000 250,000 $250,000
Joint $1- $38,001- $91,851- $140,001- $150,001- Over
Return: 38,000 91,850 140,000 150,000 250,000 $250,000
- ----------------------------------------------------------------------------------------
<CAPTION>
TAX-EXEMPT YIELD TAXABLE YIELD EQUIVALENT
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2.00% 2.50% 3.10% 3.25% 3.33% 3.54% 3.64% 3.89%
3.00 3.87 4.65 4.88 5.00 5.31 5.45 5.84
3.50 4.52 5.43 5.69 5.83 6.19 6.36 6.81
4.00 5.16 6.20 6.50 6.67 7.08 7.27 7.78
4.50 5.81 6.98 7.32 7.50 7.96 8.18 8.75
5.00 6.45 7.75 8.13 8.33 8.85 9.09 9.73
5.50 7.10 8.53 8.94 9.17 9.73 10.00 10.70
6.00 7.74 9.30 9.76 10.00 10.62 10.91 11.67
6.50 8.39 10.08 10.57 10.83 11.50 11.82 12.65
7.00 9.03 10.85 11.38 11.67 12.39 12.73 13.62
7.50 9.68 11.63 12.20 12.50 13.27 13.64 14.59
8.00 10.32 12.40 13.01 13.33 14.16 14.55 15.56
<FN>
Note: The maximum marginal tax rate for each bracket was used in calculating the
taxable yield equivalent. Furthermore, additional state and local taxes
paid on comparable taxable investments were not used to increase federal
deductions. The local income tax rate is assumed to be 50% of the state
rate for all counties excluding Alleghany, Montgomery, Prince George's,
Talbot, and Worcester.
The chart above is for illustrative purposes only. It is not an indicator of
past or future performance of the Fund.
* Some portion of the Fund's income may be subject to the federal
alternative minimum tax and state and local regular or alternative minimum
taxes.
</TABLE>
11
<PAGE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISONS
- --------------------------------------------------------------------------------
The performance of the Fund depends upon such variables as:
- portfolio quality;
- average portfolio maturity;
- type of instruments in which the portfolio is invested;
- changes in interest rates on money market instruments;
- changes in the Fund's expenses; and
- the relative amount of Fund cash flow.
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance, investors
should consider all relevant factors such as the composition of any index used,
prevailing market conditions, portfolio compositions of other funds, and methods
used to value portfolio securities and compute net asset value. The financial
publications and/or indices which the Fund uses in advertising may include:
- LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes
the reinvestment of all income dividends and capital gains distributions,
if any. From time to time, the Fund will quote its Lipper ranking in the
"tax-exempt money market fund" category in advertising and sales
literature.
- MORNINGSTAR, INC., an independent rating service, is the publisher of the
bi-weekly MUTUAL FUND VALUES. MUTUAL FUND VALUES rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk adjusted
returns. The maximum rating is five stars and ratings are effective for
two weeks.
Advertisements and other sales literature for the Fund may refer to total
return. Total return is the historic change in the value of an investment in the
Fund based on the monthly reinvestment of dividends over a specified period of
time. In addition, advertisements and sales literature for the Fund may include
charts and other illustrations that depict the hypothetical growth of a tax-free
investment as compared to a taxable investment.
12
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX
- --------------------------------------------------------------------------------
MUNICIPAL BOND RATING DEFINITIONS
STANDARD & POOR'S CORPORATION
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 higher 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
predominantly 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
outweighed by large uncertainties of major risk exposure to adverse conditions.
C--The rating C is reserved for income bonds on which no interest is being paid.
D--Debt rated D is in default, and payment of interest and/or repayment of
principal is in arreas.
MOODY'S INVESTORS SERVICE, INC.
Aaa--Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa--Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba--Bonds which are 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.
B--Bonds which are rated B generally lack characterstics 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.
Caa--Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
13
<PAGE>
- --------------------------------------------------------------------------------
Ca--Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C--Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S CORPORATION
A Standard & Poor's note rating reflects the liquidity concerns and market
access risks unique to notes.
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC.
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG
(see below)). The purpose of the MIG or VMIG rating is to provide investors with
a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1 This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNS)
AND
TENDER OPTION BONDS (TOBS)
RATINGS
STANDARD AND POOR'S CORPORATION
Standard & Poor's assigns dual ratings to all long-term debt issues that have as
part of their provisions a variable rate demand feature. The first rating
(long-term rating) addresses the likelihood of repayment of principal and
interest when due, and the second rating (short-term rating) describes the
demand characteristics. Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The
definitions for the short-term ratings are provided below).
MOODY'S INVESTORS SERVICE, INC.
Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics are payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity. In this case, two ratings are usually assigned, (for example,
Aaa/VMIG-1); the first representing an evaluation of the degree of risk
associated with scheduled principal and interest payments, and the second
representing an evaluation of the degree of risk associated with the demand
feature. The VMIG rating can be assigned a 1 or 2 designation using the same
definitions described above for the MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S CORPORATION
A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days.
A-1 This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign
designation.
A-2 Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated "A-1."
14
<PAGE>
- --------------------------------------------------------------------------------
MOODY'S INVESTORS SERVICE, INC.
P-1 Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations.
P-2 Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations.
The following is an explanation of the Fitch ratings. These ratings are not
referenced in the Portfolio of Investments.
FITCH TAX-EXEMPT INVESTMENT NOTE RATING DEFINITIONS
F-1+ (Exceptionally Strong Credit Quality). Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1 (Very Strong Credit Quality). Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
"F-1+."
F-2 (Good Credit Quality). Issues carrying this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as
great as the "F-1+" and "F-1" categories.
NR NR indicates that both the bonds and the obligor or credit enhancer are
currently rated by Standard and Poor's Corporation or Moody's Investors
Service, Inc. with respect to short term indebtedness. However, management
considers them to be of comparable quality to securities rated A-1 or P-1.
MNR(1) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by Standard and Poor's Corporation or "Aaa" by Moody's Investors
Service, Inc.
NR(2) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by Standard and Poor's Corporation or "Aa" by Moody's Investors
Service, Inc.
NR(3) The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by Standard and Poor's Corporation or Moody's Investors Service, Inc.
G00105-02-B (5/94)
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements (Filed in Part A-Supplement to
Prospectus
(b) Exhibits:
(1) Copy of Declaration of Trust of the Registrant (1);
(i) Copy of the Declaration of Trust, as amended
(7);
(ii) Copy of Amendment No. 10, dated November 18,
1992, to the Declaration of Trust (12);
(iii) Conformed copy of Amendment No. 12, dated
Nov. 22, 1993, to the Declaration of Trust
(17);
(iv) Conformed copy of Amendment No. 13, dated
February 24, 1994, to the Declaration of
Trust (17);
(v) Conformed copy of Amendment No. 14, dated
August 25, 1994 (20);
(2) Copy of By-Laws of the Registrant (7);
(3) Not applicable;
(4) (i) Copy of Specimen Certificates for Shares of
Beneficial Interest of Alabama Municipal Cash
Trust, Minnesota Municipal Cash Trust (Cash
Series Shares and Institutional Shares),
Pennsylvania Municipal Cash Trust (Cash
Series Shares and Institutional Service
Shares), Virginia Municipal Cash Trust
(Institutional Service Shares and
Institutional Shares), North Carolina
Municipal Cash Trust, Ohio Municipal Cash
Trust (Cash II Shares and Institutional
Shares), Massachusetts Municipal Cash Trust
(Institutional Service Shares and BayFunds
Shares), and New Jersey Municipal Cash Trust
(Institutional Shares and Institutional
Service Shares) (16);
______________________
1. Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed on September 29, 1989 (File
Nos. 33-31259 and 811-5911).
7. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 6 on Form N-1A filed on November 6, 1990 (File
Nos. 33-31259 and 811-5911).
12. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 14 on Form N-1A filed on December 23, 1992
(File Nos. 33-31251 and 811-5911).
16. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 21 on Form N-1A filed on December 29, 1993
(File Nos. 33-31251 and 811-5911).
17. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 22 on Form N-1A filed on March 2, 1994 (File
Nos. 33-31251 and 811-5911).
20. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 30 on Form N-1A filed
on September 19, 1994 (File Nos. 33-31251 and
811-5911).
(ii) Copy of Specimen Certificate for Maryland
Municipal Cash Trust (17);
(iii) Copy of Specimen Certificate for Florida
Municipal Cash Trust (20)
(5) Copy of Investment Advisory Contract of the
Registrant (7);
(i) Conformed copy of Exhibit G to Investment
Advisory Contract for Virginia Municipal
Cash Trust (18);
(ii) Conformed copy of Exhibit H to
Investment Advisory Contract for Alabama
Municipal Cash Trust (19);
(iii) Conformed copy of Exhibit I to
Investment Advisory Contract for North
Carolina Municipal Cash Trust (19);
(iv) Conformed copy of Exhibit J to
Investment Advisory Contract for Maryland
Municipal Cash Trust (19);
(v) Form of Exhibit K to Investment
Advisory Contract for New York Municipal Cash
Trust; +
(vi) Form of Exhibit L to Investment
Advisory Contract for California Municipal Cash
Trust; +
(vii) Form of Exhibit M to the
Investment Advisory Contract for Florida
Municipal Cash Trust;+
(6) Copy of Distributor's Contract of the Registrant (5);
(i) Exhibit M to Distributor's
Contract (13);
(ii) Conformed copy of Exhibit N to
the Distributor's Contract for Virginia
Municipal Cash Trust (19);
(iii) Conformed copy of Exhibit O to
the Distributor's Contract for Alabama
Municipal Cash Trust (19);
(iv) Conformed copy of Exhibit P to
the Distributor's Contract for North Carolina
Municipal Cash Trust (19);
+ All exhibits have been filed electronically.
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 3 on Form N-1A filed August 3, 1990 (File Nos. 33-31259
and 811-5911).
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed on November 6, 1990 (File Nos. 33-31259
and 811-5911).
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 15 on Form N-1A filed on December 24, 1992 (File Nos.
33-31259 and 811-5911).
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed on March 2, 1994 (File Nos.
33-31259 and 811-5911).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed on June 1, 1994 (File Nos.
33-31259 and 811-5911).
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on June 28, 1994 (File Nos.
33-31259 and 811-5911).
20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed on September 19, 1994 (File Nos.
33-31251 and 811-5911).
(v) Conformed copy of Exhibit Q to
the Distributor's Contract for Maryland
Municipal Cash Trust (19);
(vi) Conformed copy of Exhibit R to
the Distributor's Contract for New York
Municipal Cash Trust, Cash II Shares; +
(vii) Conformed copy of Exhibit S to
the Distributor's Contract for New York
Municipal Cash Trust, Institutional Service
Shares; +
(viii) Conformed copy of Exhibit T to the
Distributor's Contract for California Municipal
Cash Trust; +
(ix) Form of Exhibit U to the
Distributor's Contract for Florida Municipal
Cash Trust;+
(7) Not applicable;
(8) (i) Conformed copy of Custodian Agreement of the
Registrant; (17)
(ii)Conformed copy of Transfer Agency
Agreement(17);
(9) (i) Conformed copy of Agency Agreement of the
Registrant (15);
(ii) Conformed copy of Sub-Transfer Agency
Agreement of the Registrant (Massachusetts
Municipal Cash Trust--BayFunds Shares
only)(15);
(iii) Conformed copy of Shareholder Services
Agreement of the Registrant (Massachusetts
Municipal Cash Trust--BayFunds Shares only)
(15);
(iv) Conformed copy of Shareholder
Services Agreement of the Registrant (to be
filed by Amendment);
(v) Copy of Exhibit A to Shareholder Services
Agreement for Virginia Municipal Cash
Trust(17);
(vii) Copy of Exhibit B to Shareholder Services
Agreement for Maryland Municipal Cash Trust
(17);
(viii) Conformed copy of Shareholder Services Plan
of the Registrant; (18)
+ All exhibits have been filed electronically.
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 18 on Form N-1A filed on October 1, 1993 (File Nos. 33-31259
and 811-5911).
17. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 22 on Form N-1A filed on March 2, 1994 (File
Nos. 33-31259 and 811-5911).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed on June 1, 1994 (File Nos. 33-31259
and 811-5911).
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on June 28, 1994 (File Nos. 33-31259
and 811-5911).
(ix) Conformed copy of Exhibit A to Shareholder
Services Plan for Virginia Municipal Cash
Trust-Institutional Service Shares; (19)
(x) Conformed copy of Exhibit B to Shareholder
Services Plan for Maryland Municipal Cash
Trust; (18)
(xi) Form of Exhibit C to Shareholder Services
Plan for Florida Municipal Cash Trust;+
(10) (i) Copy of Opinion and Consent of Counsel as to
the legality of shares for Minnesota
Municipal Cash Trust (5);
(ii) Copy of Opinion and Consent of Counsel as to
the legality of shares for New Jersey
Municipal Cash Trust (7);
(11) Not applicable
(12) Not applicable;
(13) Copy of Initial Capital Understanding (2);
(14) Not applicable.
(15) (i) Copy of Rule 12b-1 Plan of the Registrant
(7);
(1) Conformed copy of Exhibit H to 12b-1 Plan
for New York Municipal Cash Trust, Cash II
Shares;+
(2) Conformed copy of Exhibit I to 12b-1 Plan
for New York Municipal Cash Trust,
Institutional Service Shares;+
(3) Form of Exhibit J to 12b-1 Plan for
Florida Municipal Cash Trust;+
(ii) Copy of Rule 12b-1 Agreement of the
Registrant (7); Additional Exhibits to the
Rule 12b-1 Plan and Agreement have been
executed to reflect the coverage of
subsequently created portfolios and/or
classes under these documents. Because these
exhibits are substantially identical but
differ only as to the Fund name, dates, and
any other Fund - specific information,
pursuant to Rule 8b-31 of the Investment
Company Act they need not be filed.
_________________________
+ All exhibits have been filed electronically.
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed on October 31, 1989 (File Nos. 33-
31259 and 811-5911).
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 3 on Form N-1A filed August 3, 1990 (File Nos. 33-31259
and 811-5911).
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed on November 6, 1990 (File Nos. 33-
31259 and 811-5911).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed on June 1, 1994 (File Nos. 33-31259
and 811-5911).
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on June 28, 1994 (File Nos.
33-31259 and 811-5911).
(16) Schedules for Computation of Performance Data;
(i) New Jersey Municipal Cash Trust (9);
(ii) Ohio Municipal Cash Trust (10);
(iii) Virginia Municipal Cash Trust (Institutional
Share and Institutional Service Shares) (16);
(iv) Alabama Municipal Cash Trust (18);
(v) North Carolina Municipal Cash Trust (18);
(vi) Maryland Municipal Cash Trust;+
(17) Financial Data Schedule;+
(18) Conformed copy of Opinion and Consent of Counsel as
to Availability of Rule 485 (b);+
(19) Conformed copy of Power of Attorney(16)
Item 25. Persons Controlled by or Under Common Control with Registrant:
None
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of September 30, 1994
Shares of beneficial
interest (no par value)
Alabama Municipal Cash Trust 143
California Municipal Cash Trust 457
Connecticut Municipal Cash Trust
Institutional Service Shares 928
Florida Municipal Cash Trust 0
Maryland Municipal Cash Trust 134
Massachusetts Municipal Cash Trust
Institutional Service Shares 239
BayFunds Shares 3
____________________________
+All exhibits have been filed electronically.
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed on June 7, 1991 (File Nos. 33-
31259 and 811-5911).
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed on June 28, 1991 (File Nos. 33-
31259 and 811-5911).
16. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 21 on Form N-1A filed on December 29, 1993
(File Nos. 33-31259 and 811-5911).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed on June 1, 1994 (File Nos. 33-31259
and 811-5911).
Number of Record Holders
Title of Class as of September 30, 1994
Minnesota Municipal Cash Trust
Cash Series Shares 2,198
Institutional Shares 41
New Jersey Municipal Cash Trust
Institutional Service Shares 122
Institutional Shares 32
New York Municipal Cash Trust
Cash II Shares 96
Institutional Service Shares 176
North Carolina Municipal Cash Trust 222
Ohio Municipal Cash Trust
Cash II Shares 135
Institutional Shares 53
Pennsylvania Municipal Cash Trust
Cash Series Shares 404
Institutional Service Shares 277
Virginia Municipal Cash Trust
Institutional Shares 24
Institutional Service Shares 398
Item 27. Indemnification: (3.)
Item 28. Business and Other Connections of Investment Adviser:
For a description of the other business of the investment
adviser, see the section entitled "Federated Municipal Trust
Information - Management of the Trust" in Part A. The
affiliations with the Registrant of four of the Trustees and
one of the Officers of the investment adviser are included in
Part B of this Registration Statement under "Federated
Municipal Trust Management - Officers and Trustees." The
remaining Trustee of the investment adviser, his position with
the investment adviser, and, in parentheses, his principal
occupation is: Mark D. Olson (Partner, Wilson, Halbrook &
Bayard), 107 W. Market Street, Georgetown, Delaware 19947.
The remaining Officers of the investment adviser are:
William D. Dawson, J. Thomas Madden, Mark L. Mallon, Executive
Vice Presidents; Henry J. Gailliot, Senior Vice President-
Economist; Peter R. Anderson, Gary J. Madich, and J. Alan
Minteer, Senior Vice Presidents; Randall A. Bauer, Jonathan C.
Conley, Deborah A. Cunningham, Mark E. Durbiano, Kathleen M.
Foody-Malus, Thomas M. Franks, Edward C. Gonzales, Jeff A.
Kozemchak, Marian R. Marinack, John W. McGonigle, Gregory M.
Melvin, Susan M. Nason, Mary Jo Ochson, Robert J. Ostrowski,
Charles A. Ritter, and Christopher H. Wiles, Vice Presidents;
Edward C. Gonzales, Treasurer; and John W. McGonigle,
Secretary. The business address of each of the Officers of the
investment adviser is Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. These individuals are also officers
of a majority of the investment advisers to the Funds listed in
Part B of this Registration Statement under "The Funds."
3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed on March 22, 1990 (File Nos. 33-
31259 and 811-5911).
Item 29. Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the following
open-end investment companies: Alexander Hamilton Funds; American
Leaders Fund, Inc.; Annuity Management Series; Arrow Funds;
Automated Cash Management Trust; Automated Government Money Trust;
BayFunds; The Biltmore Funds; The Biltmore Municipal Funds;
California Municipal Cash Trust; Cash Trust Series, Inc.; Cash
Trust Series II; DG Investor Series; Edward D. Jones & Co. Daily
Passport Cash Trust; Federated ARMs Fund; Federated Exchange
Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated Growth Trust; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust; Federated Index
Trust; Federated Institutional Trust; Federated Intermediate
Government Trust; Federated Master Trust; Federated Short-
Intermediate Government Trust; Federated Short-Term U.S.
Government Trust; Federated Stock Trust; Federated Tax-Free Trust;
Federated U.S. Government Bond Fund; First Priority Funds; First
Union Funds; Fixed Income Securities, Inc.; Fortress Adjustable
Rate U.S. Government Fund, Inc.; Fortress Municipal Income Fund,
Inc.; Fortress Utility Fund, Inc.; Fountain Square Funds; Fund for
U.S. Government Securities, Inc.; Government Income Securities,
Inc.; High Yield Cash Trust; Independence One Mutual Funds;
Insight Institutional Series, Inc.; Insurance Management Series;
Intermediate Municipal Trust; International Series Inc.;
Investment Series Funds, Inc.; Investment Series Trust; Liberty
Equity Income Fund, Inc.; Liberty High Income Bond Fund, Inc.;
Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government
Money Market Trust; Liberty Utility Fund, Inc.; Liquid Cash Trust;
Managed Series Trust; Mark Twain Funds; Marshall Funds, Inc.;
Money Market Management, Inc.; The Medalist Funds; Money Market
Obligations Trust; Money Market Trust; The Monitor Funds;
Municipal Securities Income Trust; New York Municipal Cash Trust;
111 Corcoran Funds; Peachtree Funds; The Planters Funds; Portage
Funds; RIMCO Monument Funds; The Shawmut Funds; Short-Term
Municipal Trust; SouthTrust Vulcan Funds; Star Funds; The
Starburst Funds; The Starburst Funds II; Stock and Bond Fund,
Inc.; Sunburst Funds; Targeted Duration Trust; Tax-Free
Instruments Trust; Tower Mutual Funds; Trademark Funds; Trust for
Financial Institutions; Trust for Government Cash Reserves; Trust
for Short-Term U.S. Government Securities; Trust for U.S. Treasury
Obligations; Vision Fiduciary Funds, Inc.; Vision Group of Funds,
Inc.; and World Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter for
the following closed-end investment company: Liberty Term Trust,
Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, and
Asst. Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice Vice President and
Federated Investors Tower President, and Treasurer, Treasurer
Pittsburgh, PA 15222-3779 Federated Securities
Corp.
John W. McGonigle Director, Executive Vice Vice President and
Federated Investors Tower President, and Assistant Secretary
Pittsburgh, PA 15222-3779 Secretary, Federated
Securities Corp.
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
H. Joseph Kennedy Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David C. Glabicki Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
William J. Kerns Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Francis J. Matten, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Jeffrey Niss Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charles A. Robison Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Thomas E. Territ Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Philip C. Hetzel Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, Federated Assistant
Federated Investors Tower Securities Corp. Secretary
Pittsburgh, PA 15222-3779
(c) Not applicable.
Item 30. Location of Accounts and Records:
Federated Municipal Trust Federated Investors Tower
Registrant Pittsburgh, PA 15222-3779
Federated Services Company
Transfer Agent, Dividend
Disbursing Agent and Federated Investors Tower
Portfolio Recordkeeper Pittsburgh, PA 15222-3779
Federative Administrative
Services Federated Investors Tower
Administrator Pittsburgh, PA 15222-3779
Federated Management Federated Investors Tower
Adviser Pittsburgh, PA 15222-3779
State Street Bank
Trust Company P.O. Box 8604
Custodian Boston, MA 02266-8604
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.
Registrant hereby undertakes to file a post-effective amendment
on behalf of Florida Municipal Cash Trust, using financial
statements for such portfolio, which need not be certified,
within four to six months from the effective date of
Registrant's Post-Effective Amendment Nos. 29 and 30.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, FEDERATED MUNICIPAL TRUST,
certifies that it meets all of the requirements for effectiveness of this
Amendment to its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Pittsburgh and Commonwealth of Pennsylvania, on
the 24th day of October, 1994.
FEDERATED MUNICIPAL TRUST
BY: /s/ G. Andrew Bonnewell
G. Andrew Bonnewell, Assistant Secretary
Attorney in Fact for John F. Donahue
October 24, 1994
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:
NAME TITLE DATE
By: /s/G. Andrew Bonnewell
G. Andrew Bonnewell Attorney In Fact October 24, 1994
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President and Trustee
Edward C. Gonzales* Vice President and Treasurer
(Principal Financial and
Accounting Officer)
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit (18) under Form N-1A
Exhibit 99 under Item 601/Reg. S-K
HOUSTON, HOUSTON & DONNELLY
ATTORNEYS AT LAW
2510 CENTRE CITY TOWER
WILLIAM McC. HOUSTON PITTSBURGH, PA. 15222
FRED CHALMERS HOUSTON, JR. __________
THOMAS J. DONNELLY
JOHN F. MECK (412) 471-5828 FRED CHALMERS HOUSTON
FAX (412) 471-0736 (1914 - 1971)
MARIO SANTILLI, JR.
THEODORE M. HAMMER
October 20, 1994
Federated Municipal Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
As counsel to Federated Municipal Trust ("Trust") we have reviewed Post-
effective Amendment No. 31 to the Trust's Registration Statement to be filed
with the Securities and Exchange Commission under the Securities Act of 1933
(File No. 33-31259). The subject Post-effective Amendment will be filed
pursuant to Paragraph (b) of Rule 485 and become effective pursuant to said
Rule on October 31, 1994.
Our review also included an examination of other relevant portions of
the amended 1933 Act Registration Statement of the Trust and such other
documents and records deemed appropriate. On the basis of this review we are
of the opinion that Post-effective Amendment No. 31 does not contain
disclosures which would render it ineligible to become effective pursuant to
Paragraph (b) of Rule 485.
We hereby consent to the filing of this representation letter as a part
of the Trust's Registration Statement filed with the Securities and Exchange
Commission under the Securities Act of 1933 and as part of any application or
registration statement filed under the Securities Laws of the States of the
United States.
Very truly yours,
Houston, Houston & Donnelly
By: /s/ Thomas J. Donnelly
TJD:heh
Exhibit 5(v) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
EXHIBIT K
to the
Investment Advisory Contract
New York Municipal Cash Trust
For all services rendered by Adviser hereunder, the above-named Fund of
the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to .40 of 1% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of .40 of 1% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this ___ day of _____, 1994.
Attest: FEDERATED MANAGEMENT
By:
Secretary Executive Vice President
Attest: FEDERATED MUNICIPAL TRUST
By:
Assistant Secretary Vice President
Exhibit 5(vi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
EXHIBIT L
to the
Investment Advisory Contract
California Municipal Cash Trust
For all services rendered by Adviser hereunder, the above-named Fund of
the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to .50 of 1% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of .50 of 1% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this ___ day of _____, 1994.
Attest: FEDERATED MANAGEMENT
By:
Secretary Executive Vice President
Attest: FEDERATED MUNICIPAL TRUST
By:
Assistant Secretary Vice President
Exhibit 5(vii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
EXHIBIT M
to the
Investment Advisory Contract
Florida Municipal Cash Trust
For all services rendered by Adviser hereunder, the above-
named Fund of the Trust shall pay to Adviser and Adviser agrees
to accept as full compensation for all services rendered
hereunder, an annual investment advisory fee equal to .40 of 1%
of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net
assets of the Fund shall be accrued daily at the rate of 1/365th
of .40 of 1% applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 1st day of September,
1994.
Attest: FEDERATED MANAGEMENT
______________________ By:________________________
Secretary Executive Vice President
Attest: FEDERATED MUNICIPAL TRUST
______________________ By:________________________
Assistant Secretary Vice President
Exhibit 6(vi) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit R
FEDERATED MUNICIPAL TRUST
New York Municipal Cash Trust
Cash II Shares
The following provisions are hereby incorporated and
made part of the Distributor's Contract dated the 31st day
of August, 1990, between Federated Municipal Trust and
Federated Securities Corp. with respect to the separate
Class of Shares thereof, first set forth in this Exhibit.
1. The Trust hereby appoints FSC to engage in
activities principally intended to result in the sale of
shares of the Class. Pursuant to this appointment FSC is
authorized to select a group of brokers ("Brokers") to sell
shares of the above-listed Class ("Shares"), at the current
offering price thereof as described and set forth in the
respective prospectuses of the Trust, and to render
administrative support services to the Trust and its
shareholders. In addition, FSC is authorized to select a
group of Administrators ("Administrators") to render
administrative support services to the Trust and its
shareholders.
2. Administrative support services may include, but are
not limited to, the following eleven functions: (1) account
openings: the Broker or Administrator communicates account
openings via computer terminals located on the Broker or
Administrator's premises; 2) account closings: the Broker
or Administrator communicates account closings via computer
terminals; 3) enter purchase transactions: purchase
transactions are entered through the Broker or
Administrator's own personal computer or through the use of
a toll-free telephone number; 4) enter redemption
transactions: Broker or Administrator enters redemption
transactions in the same manner as purchases; 5) account
maintenance: Broker or Administrator provides or arranges
to provide accounting support for all transactions. Broker
or Administrator also wires funds and receives funds for
Trust share purchases and redemptions, confirms and
reconciles all transactions, reviews the activity in the
Trust's accounts, and provides training and supervision of
its personnel; 6) interest posting: Broker or Administrator
posts and reinvests dividends to the Trust's accounts; 7)
prospectus and shareholder reports: Broker or Administrator
maintains and distributes current copies of prospectuses and
shareholder reports; 8) advertisements: the Broker or
Administrator continuously advertises the availability of
its services and products; 9) customer lists: the Broker or
Administrator continuously provides names of potential
customers; 10) design services: the Broker or Administrator
continuously designs material to send to customers and
develops methods of making such materials accessible to
customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the
product needs of customers.
3. During the term of this Agreement, the Trust will
pay FSC for services pursuant to this Agreement, a monthly
fee computed at the annual rate of up to .25% of the average
aggregate net asset value of the Cash II Shares of New York
Municipal Cash Trust held during the month. For the month
in which this Agreement becomes effective or terminates,
there shall be an appropriate proration of any fee payable
on the basis of the number of days that the Agreement is in
effect during the month.
4. FSC may from time-to-time and for such periods as it
deems appropriate reduce its compensation to the extent any
Class expenses exceed such lower expense limitation as FSC
may, by notice to the Trust, voluntarily declare to be
effective.
5. FSC will enter into separate written agreements with
various firms to provide certain of the services set forth
in Paragraph 1 herein. FSC, in its sole discretion, may pay
Brokers and Administrators a periodic fee in respect of
Shares owned from time to time by their clients or
customers. The schedules of such fees and the basis upon
which such fees will be paid shall be determined from time
to time by FSC in its sole discretion.
6. FSC will prepare reports to the Board of Trustees of
the Trust on a quarterly basis showing amounts expended
hereunder including amounts paid to Brokers and
Administrators and the purpose for such payments.
In consideration of the mutual covenants set forth in
the Distributor's Contract dated August 31, 1990 between
Federated Municipal Trust and Federated Securities Corp.,
Federated Municipal Trust executes and delivers this Exhibit
on behalf of the Funds, and with respect to the separate
Class of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 1st day of March,
1994.
Attest: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle By: /s/ Glen R. Johnson
Secretary President
(SEAL)
Attest: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ Edward C. Gonzales
Secretary President
(SEAL)
Exhibit 6(vii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit S
FEDERATED MUNICIPAL TRUST
New York Municipal Cash Trust
Institutional Service Shares
The following provisions are hereby incorporated and
made part of the Distributor's Contract dated the 31st day
of August, 1990, between Federated Municipal Trust and
Federated Securities Corp. with respect to the separate
Class of Shares thereof, first set forth in this Exhibit.
1. The Trust hereby appoints FSC to engage in
activities principally intended to result in the sale of
shares of the Class. Pursuant to this appointment FSC is
authorized to select a group of brokers ("Brokers") to sell
shares of the above-listed Class ("Shares"), at the current
offering price thereof as described and set forth in the
respective prospectuses of the Trust, and to render
administrative support services to the Trust and its
shareholders. In addition, FSC is authorized to select a
group of Administrators ("Administrators") to render
administrative support services to the Trust and its
shareholders.
2. Administrative support services may include, but are
not limited to, the following eleven functions: (1) account
openings: the Broker or Administrator communicates account
openings via computer terminals located on the Broker or
Administrator's premises; 2) account closings: the Broker
or Administrator communicates account closings via computer
terminals; 3) enter purchase transactions: purchase
transactions are entered through the Broker or
Administrator's own personal computer or through the use of
a toll-free telephone number; 4) enter redemption
transactions: Broker or Administrator enters redemption
transactions in the same manner as purchases; 5) account
maintenance: Broker or Administrator provides or arranges
to provide accounting support for all transactions. Broker
or Administrator also wires funds and receives funds for
Trust share purchases and redemptions, confirms and
reconciles all transactions, reviews the activity in the
Trust's accounts, and provides training and supervision of
its personnel; 6) interest posting: Broker or Administrator
posts and reinvests dividends to the Trust's accounts; 7)
prospectus and shareholder reports: Broker or Administrator
maintains and distributes current copies of prospectuses and
shareholder reports; 8) advertisements: the Broker or
Administrator continuously advertises the availability of
its services and products; 9) customer lists: the Broker or
Administrator continuously provides names of potential
customers; 10) design services: the Broker or Administrator
continuously designs material to send to customers and
develops methods of making such materials accessible to
customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the
product needs of customers.
3. During the term of this Agreement, the Trust will
pay FSC for services pursuant to this Agreement, a monthly
fee computed at the annual rate of up to .25% of the average
aggregate net asset value of the Institutional Service
Shares of New York Municipal Cash Trust held during the
month. For the month in which this Agreement becomes
effective or terminates, there shall be an appropriate
proration of any fee payable on the basis of the number of
days that the Agreement is in effect during the month.
4. FSC may from time-to-time and for such periods as it
deems appropriate reduce its compensation to the extent any
Class expenses exceed such lower expense limitation as FSC
may, by notice to the Trust, voluntarily declare to be
effective.
5. FSC will enter into separate written agreements with
various firms to provide certain of the services set forth
in Paragraph 1 herein. FSC, in its sole discretion, may pay
Brokers and Administrators a periodic fee in respect of
Shares owned from time to time by their clients or
customers. The schedules of such fees and the basis upon
which such fees will be paid shall be determined from time
to time by FSC in its sole discretion.
6. FSC will prepare reports to the Board of Trustees of
the Trust on a quarterly basis showing amounts expended
hereunder including amounts paid to Brokers and
Administrators and the purpose for such payments.
In consideration of the mutual covenants set forth in
the Distributor's Contract dated August 31, 1990 between
Federated Municipal Trust and Federated Securities Corp.,
Federated Municipal Trust executes and delivers this Exhibit
on behalf of the Funds, and with respect to the separate
Class of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 1st day of June,
1994.
Attest: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle By: /s/ Glen R. Johnson
Secretary President
(SEAL)
Attest: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ Edward C. Gonzales
Secretary President
(SEAL)
Exhibit 6(viii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit T
to the
Distributor's Contract
FEDERATED MUNICIPAL TRUST
California Municipal Cash Trust
In consideration of the mutual covenants set forth in
the Distributor's Contract dated August 31, 1990 between
Federated Municipal Trust and Federated Securities Corp.,
Federated Municipal Trust executes and delivers this
Exhibit on behalf of the Funds, and with respect to the
separate Classes of Shares thereof, first set forth in this
Exhibit.
Witness the due execution hereof this 1st day of
March, 1994.
Attest: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle By: /s/ Glen R. Johnson
Secretary President
(SEAL)
Attest: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ Edward C. Gonzales
Secretary President
(SEAL)
Exhibit 6(ix) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit U
to the
Distributor's Contract
FEDERATED MUNICIPAL TRUST
Florida Municipal Cash Trust
The following provisions are hereby incorporated and
made part of the Distributor's Contract dated the 31st day
of August, 1990, between Federated Municipal Trust and
Federated Securities Corp. with respect to Classes of the
Funds set forth above.
1. The Trust hereby appoints FSC to engage in
activities principally intended to result in the sale of
shares of the above-listed Portfolio ("Shares"). Pursuant
to this appointment, FSC is authorized to select a group of
brokers ("Brokers") to sell Shares at the current offering
price thereof as described and set forth in the respective
prospectuses of the Trust, and to render administrative
support services to the Trust and its shareholders. In
addition, FSC is authorized to select a group of
administrators ("Administrators") to render administrative
support services to the Trust and its shareholders.
2. Administrative support services may include, but
are not limited to, the following functions: 1) account
openings: the Broker or Administrator communicates account
openings via computer terminals located on the Broker's or
Administrator's premises; 2) account closings: the Broker
or Administrator communicates account closings via computer
terminals; 3) enter purchase transactions: purchase
transactions are entered through the Broker's or
Administrator's own personal computer or through the use of
a toll-free telephone number; 4) enter redemption
transactions: Broker or Administrator enters redemption
transactions in the same manner as purchases; 5) account
maintenance: Broker or Administrator provides or arranges
to provide accounting support for all transactions. Broker
or Administrator also wires funds and receives funds for
Trust share purchases and redemptions, confirms and
reconciles all transactions, reviews the activity in the
Trust's accounts, and provides training and supervision of
its personnel; 6) interest posting: Broker or Administrator
posts and reinvests dividends to the Trust's accounts; 7)
prospectus and shareholder reports: Broker or Administrator
maintains and distributes current copies of prospectuses and
shareholder reports; 8) advertisements: the Broker or
Administrator continuously advertises the availability of
its services and products; 9) customer lists: the Broker or
Administrator continuously provides names of potential
customers; 10) design services: the Broker or Administrator
continuously designs material to send to customers and
develops methods of making such materials accessible to
customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the
product needs of customers.
3. During the term of this Agreement, the Trust will
pay FSC for services pursuant to this Agreement, a monthly
fee computed at the annual rate of .25% of the average
aggregate net asset value of the Shares held during the
month. For the month in which this Agreement becomes
effective or terminates, there shall be an appropriate
proration of any fee payable on the basis of the number of
days that the Agreement is in effect during the month.
4. FSC may from time-to-time and for such
periods as it deems appropriate reduce its compensation to
the extent any Classes' expenses exceed such lower expense
limitation as FSC may, by notice to the Trust, voluntarily
declare to be effective.
5. FSC will enter into separate written
agreements with various firms to provide certain of the
services set forth in Paragraph 1 herein. FSC, in its sole
discretion, may pay Brokers and Administrators a periodic
fee in respect of Shares owned from time to time by their
clients or customers. The schedules of such fees and the
basis upon which such fees will be paid shall be determined
from time to time by FSC in its sole discretion.
6. FSC will prepare reports to the Board of
Trustees of the Trust on a quarterly basis showing amounts
expended hereunder including amounts paid to Brokers and
Administrators and the purpose for such payments.
In consideration of the mutual covenants set forth in
the Distributor's Contract dated August 31, 1990 between
Federated Municipal Trust and Federated Securities Corp.,
Federated Municipal Trust executes and delivers this Exhibit
on behalf of the Funds, and with respect to the separate
Classes of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 1st day of
September, 1994.
ATTEST: FEDERATED MUNICIPAL TRUST
By:
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary Executive Vice President
(SEAL)
Exhibit 9(xi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
EXHIBIT C
to the
Plan
FEDERATED MUNICIPAL TRUST
Florida Municipal Cash Trust
This Plan is adopted by FEDERATED MUNICIPAL TRUST
with respect to the Shares of the Portfolio of the Trust set
forth above.
In compensation for the services provided pursuant
to this Plan, Providers will be paid a monthly fee computed
at the annual rate of .25 of 1% of the average aggregate net
asset value of the Shares of Florida Municipal Cash Trust
held during the month.
Witness the due execution hereof this 1st day of
September, 1994.
FEDERATED MUNICIPAL TRUST
By:
President
Exhibit (15)(i)(3) on form N-1A
Exhibit (10) under Item 601/Reg. S-K
EXHIBIT J
to the
Plan
FEDERATED MUNICIPAL TRUST
Florida Municipal Cash Trust
This Plan is adopted by FEDERATED MUNICIPAL TRUST
with respect to the Shares of the Portfolio of the Trust set
forth above.
In compensation for the services provided pursuant
to this Plan, FSC will be paid a monthly fee computed at the
annual rate of .25 of 1% of the average aggregate net asset
value of Shares of Florida Municipal Cash Trust held during
the month.
Witness the due execution hereof this 1st day of
September, 1994.
FEDERATED MUNICIPAL TRUST
By:
President
Exhibit (15)(i)(2) on Form N-1A
Exhibit (10) under Item 601/Reg. S-K
EXHIBIT I
FEDERATED MUNICIPAL TRUST
New York Municipal Cash Trust
Institutional Service Shares
The Plan is adopted by Federated Municipal Trust with respect to
the Class of Shares of the Fund set forth above.
In compensation for the services provided pursuant to this Plan,
FSC will be paid a monthly fee computed at the annual rate of up to .25
of 1% of the average aggregate net asset value of the Institutional
Service Shares of the New York Municipal Cash Trust during the month.
Witness the due execution hereof this 19th day of May, 1994.
FEDERATED MUNICIPAL TRUST
By: /s/ Glen R. Johnson
President
Exhibit (15)(i)(1) on Form N-1A
Exhibit (10) under Item 601/Reg. S-K
EXHIBIT H
FEDERATED MUNICIPAL TRUST
New York Municipal Cash Trust
Cash II Shares
The Plan is adopted by Federated Municipal Trust with respect to
the Class of Shares of the Fund set forth above.
In compensation for the services pursuant to this Plan, FSC will
be paid a monthly fee computed at the annual rate of up to .25 of 1% of
the average aggregate net asset value of the Cash II shares of the New
York Municipal Cash Trust during the month.
Witness the due execution hereof this 1st day of March, 1994.
FEDERATED MUNICIPAL TRUST
By:/s/ Glen R. Johnson
President
<TABLE>
<CAPTION>
Schedule for Computation Initial
of Fund Performance Data Invest of: $1,000
Offering
Maryland Municipal Cash Trust Price/
Share= $1.00
Return Since Inception
ending 9/30/94 NAV= $1.00
FYE: October 31
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Begin Capital Reinvest Ending Total
DECLARED: DAILY Reinvest Period Dividend Gain Price Period Ending Invest
PAID: MONTHLY Dates Shares /Share /Share /Share Shares Price Value
5/31/94 1000.000 0.001930893 0.00000 $1.00 1001.931 $1.00 $1,001.93
6/30/94 1001.931 0.002112079 0.00000 $1.00 1004.047 $1.00 $1,004.05
7/31/94 1004.047 0.002078081 0.00000 $1.00 1006.133 $1.00 $1,006.13
8/31/94 1006.133 0.002226932 0.00000 $1.00 1008.374 $1.00 $1,008.37
9/30/94 1008.374 0.002298372 0.00000 $1.00 1010.692 $1.00 $1,010.69
$1,000 (1+T) = End Value
T = 1.07%
</TABLE>
Schedule for computation of Yield Calculation
<TABLE>
<S> <C>
Maryland Municipal Cash Trust
This example illustrates the yield quotation for the seven-day period ended: 30-Sep-94
Value of a hypothetical pre-existing account with exactly
one share at the beginning of the base period $1.000000000
Value of same account (excluding capital changes) at end
of the seven-day base period* $1.000569077
Net change in account value $0.000569077
Base Period Return:
Net change in account value divided by the beginning account value
($ .000569077 / $1.000000000) $0.000569077
Annualized Current Net Yield ( .000569077 x 365/7) 2.97%
Effective Yield ** (.000569077 + 1 ) ^ (365/7) - 1 3.01%
* This value includes the value of additional shares purchased with
dividends from the original share, and dividends declared on both the
original share and any such additional shares.
** This value may change to include shares purchased with dividends
reinvested on a less frequent basis.
Tax Equivalent Yield (Assumes individual does not itemize on Federal Return)
100% minus the Federal and Maryland taxable %'s (100% - 28% - 5% -2.5% = 64.5%)
7 Day Net Yield / by the tax equivalent % (2.97% / 64.5%) = 4.60%
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1994
<PERIOD-END> AUG-31-1994
<INVESTMENTS-AT-COST> 66,091,491
<INVESTMENTS-AT-VALUE> 66,091,491
<RECEIVABLES> 306,860
<ASSETS-OTHER> 297,642
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 66,695,993
<PAYABLE-FOR-SECURITIES> 1,401,358
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 67,817
<TOTAL-LIABILITIES> 1,469,175
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 65,226,818
<SHARES-COMMON-STOCK> 65,226,818
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 65,226,818
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 503,691
<OTHER-INCOME> 0
<EXPENSES-NET> 58,402
<NET-INVESTMENT-INCOME> 445,289
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 445,289
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 445,289
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 173,561,527
<NUMBER-OF-SHARES-REDEEMED> 108,683,078
<SHARES-REINVESTED> 348,369
<NET-CHANGE-IN-ASSETS> 65,226,818
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 84,287
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 159,889
<AVERAGE-NET-ASSETS> 53,972,948
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .010
<PER-SHARE-GAIN-APPREC> .000
<PER-SHARE-DIVIDEND> .010
<PER-SHARE-DISTRIBUTIONS> .000
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
