MONEY MARKET OBLIGATIONS TRUST /NEW/, 485APOS, 1999-08-13

MONEY MARKET OBLIGATIONS TRUST /NEW/
485APOS, 1999-08-13

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1933 Act File No. 33-31602
1940 Act File No. 811-5950

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. 32 ............................ X
-------- ---------

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
---------

Amendment No. 33 ....................................... X
------ ------

MONEY MARKET OBLIGATIONS TRUST
(Exact Name of Registrant as Specified in Charter)

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
(Address of Principal Executive Offices)

(412) 288-1900
(Registrant's Telephone Number)

John W. McGonigle, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)

It is proposed that this filing will become effective:

_ immediately upon filing pursuant to paragraph (b) __ on ___________________,
pursuant to paragraph (b) _ 60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i)
X 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.

Copies to: Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, DC 20037

Prospectus

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust

institutional capital shares

A money market mutual fund seeking to provide current income exempt from all
federal regular income tax consistent with stability of principal by investing
in a portfolio of tax exempt securities maturing in 397 days or less.

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.

Contents
Risk/Return Summary
What are the Fund's Fees and Expenses?
What are the Fund's Investment Strategies?
What are the Principal Securities in Which the Fund Invests?
What are the Specific Risks of Investing in the Fund?
What do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem Shares
Account and Share Information
Who Manages the Fund?
Financial Information

october , 1999

<PAGE>

RISK/RETURN SUMMARY

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund is a money market fund which seeks to maintain a stable net asset value
of $1.00 per share. The Fund's investment objective is to provide current income
exempt from all federal regular income tax consistent with stability of
principal. While there is no assurance that the Fund will achieve its investment
objective, it endeavors to do so by following the strategies and policies
described in this prospectus. This investment objective may be changed by the
Fund's Trustees without shareholder approval.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests in tax-exempt securities maturing in 397 days or less. Under
normal market conditions, the Fund will invest at least 80% of its total assets
in municipal securities. At least 80% of the Fund's annual interest income will
be exempt from federal regular income tax. Interest income from the Fund's
investments may be subject to the federal alternative minimum tax for
individuals and corporations (AMT). The average maturity of the Fund's portfolio
will be 90 days or less.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

All mutual funds take investment risks. Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund. 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.

<PAGE>

Risk/Return Bar Chart and Table

The Bar Chart and Performance Table below reflect historical performance data
for Institutional Capital Shares (Shares) of Municipal Obligations Fund (the
Former Fund) prior to its reorganization into the Fund, which is a newly created
portfolio of Money Market Obligations Trust (the Trust). On the date of the
reorganization, the Former Fund was dissolved and its net assets (inclusive of
liabilities recorded on the Former Fund's records) were transferred to the Fund.

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Institutional Capital Shares of the Former Fund as of
the calendar year-end for each of five years.

The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 4%.

The `x' axis represents calculation periods from the earliest first full
calendar year end of the Former Fund's start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Capital Shares for
each calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1998. The percentages noted are: 2.77%, 3.88%,
3.42%, 3.55% and 3.44%.

Historically, the Former Fund has maintained a constant $1.00 net asset value
per Share. The bar chart shows the variability of the Former Fund's
Institutional Capital Shares total returns on a calendar year-end basis.

The Former Fund's Institutional Capital Shares are not sold subject to a sales
charge (load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Capital Shares total return from January 1, 1999
to September 30, 1999 was ____%.

Within the period shown in the Chart, the Former Fund's Institutional Capital
Shares highest quarterly return was 1.00% (quarter ended June 30, 1995). Its
lowest quarterly return was 0.56% (quarter ended March 31, 1994).

Average Annual Total Return Table

The following table represents the Former Fund's Institutional Capital Shares
Average Annual Total Returns for the calendar periods ended December 31, 1998.

Calendar Period Former Fund
1 Year 3.44%
5 Years 3.41%
Start of Performance1 3.25%
1 The Former Fund's Institutional Capital Shares start of performance date was
February 8, 1993.

The Former Fund's Institutional Capital Shares 7- Day Net Yield as of 12/31/98
was 3.65%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.

Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you can
analyze whether the Former Fund's investment risks are balanced by its potential
rewards.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?
municipal OBLIGATIONS FUND - institutional Capital Shares

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Capital Shares of the Fund. Shareholder Fees Fees Paid Directly
From Your Investment Maximum Sales Charge (Load) Imposed on Purchases (as a
percentage of offering price) None Maximum Deferred Sales Charge (Load) (as a
percentage of original purchase price or redemption None proceeds, as
applicable) Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and
other Distributions) (as a None percentage of offering price) Redemption Fee (as
a percentage of amount redeemed, if applicable) None Exchange Fee None

Annual Fund Operating Expenses (Before Waivers)1 Expenses That are Deducted From
Fund Assets (as a percentage of average net assets) Management Fee2 0.20%
Distribution (12b-1) Fee None Shareholder Services Fee3 0.25% Other Expenses
0.16% Total Annual Fund Operating Expenses4 0.61% 1 Although not contractually
obligated to do so, the adviser and shareholder services provider expect to
waive certain amounts. These are described below along with the net expenses the
Fund's Institutional Capital Shares expect to pay for the fiscal year ending
January 31, 2000.

Waiver of Fund Expenses 0.31%
Total Actual Annual Fund Operating Expenses (after waivers) 0.30%

3 The shareholder services provider expects to voluntarily reduce the
shareholder services fee. The shareholder services provider can terminate
this anticipated voluntary reduction at any time. The shareholder services
fee paid by the Fund's Institutional Capital Shares (after the voluntary
reduction) is expected to be 0.10% for the year ending January 31, 2000.
4 For the fiscal year ended January 31, 1999, prior to the reorganization of
Municipal Obligations Fund, the Former Fund, as a portfolio of Money Market
Obligations Trust into the Fund, the Total Annual Fund Operating Expenses and
Total Actual Annual Fund Operating Expenses (after waivers) were 0.61% and
0.30%, respectively.

EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Institutional Capital Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Capital Shares for the time periods indicated and then redeem all of your Shares
at the end of those periods. The Example also assumes that your investment has a
5% return each year and that the Fund's Institutional Capital Shares operating
expenses are before waivers as estimated above in the table and remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

- ----------------------------------------------------
1 Year $ 62
3 Years $195
5 Years $340
10 Years $762

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high-quality tax exempt securities maturing
in 397 days or less. At least 80% of the Fund's annual interest income will be
exempt from federal regular income tax. Under normal market conditions, the Fund
will invest at least 80% of its total assets in municipal securities. The
average maturity of the Fund's portfolio is 90 days or less. The Fund's
investment adviser (Adviser) actively manages the Fund's portfolio, seeking to
limit the credit risk taken by the Fund and select investments with enhanced
yields.

The Adviser performs a fundamental credit analysis to develop an approved list
of issuers and securities that meet the Adviser's standard for minimal credit
risk. The Adviser monitors the credit risks of all portfolio securities on an
ongoing basis by reviewing periodic financial data and ratings of nationally
recognized rating services.

The Adviser targets an average portfolio maturity based upon its interest rate
outlook and the tax exempt securities available. The Adviser formulates its
interest rate outlook by analyzing a variety of factors such as current and
expected U.S. economic growth; current and expected interest rates and
inflation; and the Federal Reserve's monetary policy. The Adviser structures the
portfolio by investing primarily in municipal notes and variable rate demand
instruments. The Adviser generally shortens the portfolio's maturity when it
expects interest rates to rise and extends the maturity when it expects interest
rates to fall. This strategy seeks to enhance the returns from favorable
interest rate changes and reduce the effect of unfavorable changes.

In an attempt to further enhance yield and provide diversification, the Adviser
may invest in securities subject to the alternative minimum tax.

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

Tax Exempt Securities
Tax exempt securities are fixed income securities that pay interest that is not
subject to regular federal income taxes. Fixed income securities pay interest,
dividends or distributions at a specified rate. The rate may be a fixed
percentage of the principal or adjusted periodically. In addition, the issuer of
a fixed income security must repay the principal amount of the security,
normally within a specified time. Typically, states, counties, cities and other
political subdivisions and authorities issue tax exempt securities. The market
categorizes tax exempt securities by their source of repayment. The following
describes the types of tax exempt securities in which the Fund invests:

Municipal Notes

Municipal notes are short-term tax exempt securities. Many municipalities issue
such notes to fund their current operations before collecting taxes or other
municipal revenues. Municipalities may also issue notes to fund capital projects
prior to issuing long-term bonds. The issuers typically repay the notes at the
end of their fiscal year, either with taxes, other revenues or proceeds from
newly issued notes or bonds.

Variable Rate Demand Instruments

Variable rate demand instruments are tax exempt securities that require the
issuer or a third party, such as a dealer or bank, to repurchase the security
for its face value upon demand. The securities also pay interest at a variable
rate intended to cause the securities to trade at their face value. The Fund
treats demand instruments as short-term securities, because their variable
interest rate adjusts in response to changes in market rates, even though their
stated maturity may extend beyond 13 months.

Credit Enhancement
Credit enhancement consists of an arrangement in which a company agrees to pay
amounts due on a fixed income security if the issuer defaults. In some cases the
company providing credit enhancement makes all payments directly to the security
holders and receives reimbursement from the issuer. Normally, the credit
enhancer has greater financial resources and liquidity than the issuer. For this
reason, the Adviser usually evaluates the credit risk of a fixed income security
based solely upon its credit enhancement.

Investment Ratings
The 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 rating
services or be of comparable quality to securities having such ratings.

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

Although there are many factors which may affect an investment in the Fund, the
principal risks of investing in a municipal money market fund are described
below.

Interest Rate Risks
Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged. Interest rate changes have a greater effect on the price of
fixed income securities with longer maturities. Money market funds try to
minimize this risk by purchasing short-term securities.

Credit Risks

Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money. Money market funds try to minimize this risk by purchasing
higher quality securities. Many fixed income securities receive credit ratings
from services such as Standard & Poor's and Moody's Investors Services. These
services assign ratings to securities by assessing the likelihood of issuer
default. Lower credit ratings correspond to higher credit risk. If a security
has not received a rating, the Fund must rely entirely upon the Adviser's credit
assessment.

Sector Risks
A substantial part of the Fund's portfolio may be comprised of securities credit
enhanced by banks or companies with similar characteristics. As a result, the
Fund will be more susceptible to any economic, business, political, or other
developments which generally affect these entities.

Temporary Defensive Investments
During adverse market conditions, the Fund may temporarily depart from its
principal investment strategies by investing in securities subject to federal
regular income tax. Temporary investments will be of comparable quality to other
securities in which the Fund invests. This may cause the Fund to receive and
distribute taxable income to investors.

WHAT DO SHARES COST?

You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. The Fund attempts to stabilize the net asset value (NAV) of its Shares at
$1.00 by valuing the portfolio securities using the amortized cost method. The
Fund cannot guarantee that its NAV will always remain at $1.00 per Share. The
Fund does not charge a front-end sales charge. NAV is determined at 12:00 noon
and 3:00 p.m. (Eastern time) and as of the end of regular trading (normally 4:00
p.m. Eastern time) each day the NYSE is open.

The required minimum initial investment for Fund Shares is $1,000,000. There is
no required minimum subsequent investment amount.

An account may be opened with a smaller amount as long as the $1,000,000 minimum
is reached within one year of opening the account. An institutional investor's
minimum investment is calculated by combining all accounts it maintains with the
Fund. Accounts established through investment professionals may be subject to a
smaller minimum investment amount. Keep in mind that investment professionals
may charge you fees for their services in connection with your Share
transactions.

HOW IS THE FUND SOLD?

The Fund offers three share classes: Institutional Shares, Institutional Service
Shares and Institutional Capital Shares, each representing interests in a single
portfolio of securities. This prospectus relates only to Institutional Capital
Shares. Each share class has different expenses, which affect their performance.
Contact your investment professional or call 1-800-341-7400 for more information
concerning the other classes.

The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to institutions acting in an agency or fiduciary capacity
directly or through investment professionals.

The Distributor and its affiliates may pay out of their assets other amounts
(including items of material value) to investment professionals for marketing
and servicing Shares. The Distributor is a subsidiary of Federated Investors,
Inc. (Federated).

HOW TO PURCHASE SHARES

You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and

o Submit your purchase order to the investment professional before 3:00 p.m.
(Eastern time). You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment by
3:00 p.m. (Eastern time). You will become the owner of Shares and receive
dividends when the Fund receives your payment.

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed New Account
Form; and

o Send your payment to the Fund by Federal Reserve wire or check.

You will become the owner of Shares after the Fund receives your wire or your
check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees the Fund or its transfer agent incurs.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

By Wire Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

By Check
Make your check payable to The Federated Funds, note your account number on the
check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
If you send your check by a private courier or overnight delivery service that
requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third-party checks (checks originally payable to someone other than
you or The Federated Funds). Orders by mail are considered received when payment
by check is converted into federal funds (normally the business day after the
check is received) and Shares begin earning dividends the next day.

By invest-by-phone
Once you establish an account, you may use the Fund's Invest-By-Phone privilege
for future Share purchases if you have an account with a bank that is an
Automated Clearing House (ACH) member. To apply, call the Fund for an
authorization form. You may use Invest-By-Phone to purchase Shares approximately
two weeks from the date you file the form with Federated Shareholder Services
Company.

BY AUTOMATED CLEARING HOUSE
Once you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the New Account Form.

HOW TO REDEEM SHARES

You should redeem Shares:

o through an investment professional if you purchased Shares through an
investment professional; or

o directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption request to your investment professional by the end of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). Investment
professionals are responsible for promptly submitting redemption requests and
providing proper written redemption instructions as outlined below.

DIRECTLY FROM THE FUND

By Telephone
You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 12:00 noon (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.

If you call after 12:00 noon (Eastern time), your redemption will be wired to
you the following business day. You will receive that day's dividend.

By Mail
You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Send requests by private courier or overnight delivery service to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317 All requests must include:

o Fund Name and Share Class, account number and account registration;

o amount to be redeemed; and

o signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

Signature Guarantees Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last 30 days ; or

o a redemption is payable to someone other than the shareholder(s) of record.

A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union or broker, dealer, or securities exchange member. A notary public cannot
provide a signature guarantee.

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

Redemption in Kind
Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

Telephone Transactions
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

Share Certificates
The Fund no longer issues share certificates. If you are redeeming Shares
represented by certificates previously issued by the Fund, you must return the
certificates with your written redemption request. For your protection, send
your certificates by registered or certified mail, but do not endorse them.

ACCOUNT AND SHARE INFORMATION

Account Activity
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS
The Fund declares any dividends daily and pays them monthly to shareholders. If
you purchase Shares by wire, you begin earning dividends on the day your wire is
received. If you purchase Shares by check, you begin earning dividends on the
business day after the Fund receives your check. In either case, you earn
dividends through the day your redemption request is received.

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 pays any capital gains at least annually. Your dividends and
capital gains distributions will be automatically reinvested in additional
Shares without a sales charge, unless you elect cash payments.

ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, accounts may be
closed if redemptions cause the account balance to fall below the minimum
initial investment amount. Before an account is closed, you will be notified and
allowed 30 days to purchase additional Shares to meet the minimum.

TAX INFORMATION
The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. It is anticipated that
Fund distributions will be primarily dividends that are exempt from federal
income tax, although a portion of the Fund's dividends may not be exempt.
Dividends may be subject to state and local taxes. Capital gains and non-exempt
dividends are taxable whether paid in cash or reinvested in the Fund.
Redemptions are taxable sales. Please consult your tax adviser regarding your
federal, state and local tax liability.

WHO MANAGES THE FUND?

The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the Fund's
assets, including buying and selling portfolio securities. The Adviser's address
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.

The Adviser and other subsidiaries of Federated advise approximately 175 mutual
funds and separate accounts, which totaled approximately $111 billion in assets
as of December 31, 1998. Federated was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees. More than 4,000 investment professionals make Federated Funds
available to their customers.

Advisory Fees
The Adviser receives an annual investment advisory fee of 0.20% of the Fund's
average daily net assets. The Adviser may voluntarily waive a portion of its fee
or reimburse the Fund for certain operating expenses.

Year 2000 Readiness
The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or experience other date-related problems. The Year 2000 problem may cause
systems to process information incorrectly and could disrupt businesses, such as
the Fund, that rely on computers.

While it is impossible to determine in advance all of the risks to the Fund, the
Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.

The Fund's service providers are making changes to their computer systems to fix
any Year 2000 problems. In addition, they are working to gather information from
third-party providers to determine their Year 2000 readiness.

Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase. The financial impact of these issues for the Fund is still being
determined. There can be no assurance that potential Year 2000 problems would
not have a material adverse effect on the Fund.

FINANCIAL INFORMATION

FINANCIAL HIGHLIGHTS
The Fund's Financial Highlights are contained in the Former Fund's prospectus,
which also serves as the Annual Report, dated March 31, 1999 and is incorporated
by reference and must precede or accompany this document.

<PAGE>

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust

Institutional capital shares

A Statement of Additional Information (SAI) dated October , 1999, is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is contained in the Former Fund's Annual and Semi-Annual
Reports to shareholders as they become available. To obtain the SAI, the Annual
Report, the Semi-Annual Report and other information without charge and make
inquiries, call your investment professional or the Fund at 1-800-341-7400.

You can obtain information about the Fund (including the SAI) by visiting or
writing the Public Reference Room of the Securities and Exchange Commission in
Washington, DC 20549-6009 or from the Commission's Internet site at
http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.

Investment Company Act File No. 811-5950
Cusip 000000000

000000-00 (10/99)

Prospectus

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust

institutional shares

A money market mutual fund seeking to provide current income exempt from all
federal regular income tax consistent with stability of principal.

october , 1999

<PAGE>

RISK/RETURN SUMMARY

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

<PAGE>

Risk/Return Bar Chart and Table

The Bar Chart and Performance Table below reflect historical performance data
for Municipal Obligations Fund (the "Former Fund") prior to its reorganization
into the Fund, which is a newly created portfolio of Money Market Obligations
Trust (the "Trust"). On the date of the reorganization, on or about September
__, 1999, the Former Fund was dissolved and its net assets (inclusive of
liabilities recorded on the Former Fund's records) were transferred into the
Fund.

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Institutional Shares of the Former Fund as of the
calendar year-end for each of five years.

The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 5%.

The `x' axis represents calculation periods from the earliest first full
calendar year end of the Fund's start of business through the calendar year
ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Class for each calendar year is
stated directly at the top of each respective bar, for the calendar years 1994
through 1998, The percentages noted are: 2.92%, 4.04%, 3.58%, 3.67% and 3.56%.

Historically, the Former Fund has maintained a constant $1.00 net asset value.
The bar chart shows the variability of the Former Fund's Institutional Shares
total returns on a calendar year-end basis.

The Former Fund's Institutional Shares are not sold subject to a sales charge
(load). The total returns displayed above are based upon the net asset value.

The Former Fund's total return from January 1, 1999 to September 30, 1999 was
____%.

Within the period shown in the Chart, the Former Fund's Institutional Shares
highest quarterly return was 1.04% (quarter ended June 30, 1995). Its lowest
quarterly return was 0.60% (quarter ended March 31, 1994).

Average Annual Total Return Table

The following table represents the Former Fund's Institutional Shares Average
Annual Total Return for the calendar periods ending December 31, 1998.

Calendar Period Former Fund
1 Year 3.56%
5 Years 3.55%
Start of Performance1 3.39%
1 The Former Fund's Institutional Shares start of performance date was February
8, 1993.

The Former Fund's Institutional Service Shares 7- Day Net Yield as of 12/31/98
was 3.77%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield .

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?
municipal OBLIGATIONS FUND - institutional Shares

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Shares of the Fund. Shareholder Fees Fees Paid Directly From Your
Investment Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of
offering price) None Maximum Deferred Sales Charge (Load) (as a percentage of
original purchase price or redemption None proceeds, as applicable) Maximum
Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions)
(as a None percentage of offering price) Redemption Fee (as a percentage of
amount redeemed, if applicable) None Exchange Fee None

Annual Fund Operating Expenses (Before Waivers)1 Expenses That are Deducted From
Fund Assets (as a percentage of average net assets) Management Fee2 0.20%
Distribution (12b-1) Fee None Shareholder Services Fee3 0.25% Other Expenses
0.14% Total Annual Fund Operating Expenses4 0.59% 1 Although not contractually
obligated to do so, the adviser and shareholder services provider expect to
waive certain amounts. These are described below along with the net expenses the
Fund's Institutional Shares expect to pay for the fiscal year ending January 31,
2000.

Waiver of Fund Expenses 0.31%
Total Actual Annual Fund Operating Expenses (after waivers) 0.28%
2 The adviser expects to voluntarily waive a portion of the management fee. The
adviser can terminate this anticipated voluntary waiver at any time. The
management fee paid by the Fund's Institutional Shares (after the anticipated
voluntary waiver) is expected to be 0.04% for the year ending January 31,
2000.
3 The shareholder services provider expects to voluntarily reduce the
shareholder services fee. The shareholder services provider can terminate
this anticipated voluntary reduction at any time. The shareholder services
fee paid by the Fund's Institutional Shares (after the voluntary reduction)
is expected to be 0.10% for the year ending January 31, 2000.
4 For the fiscal year ended January 31, 1999, prior to the reorganization of
Municipal Obligations Fund, the Former Fund, as a portfolio of Money Market
Obligations Trust into the Fund, the Total Annual Fund Operating Expenses and
Total Actual Annual Fund Operating Expenses (after waivers) were 0.59% and
0.18%, respectively.

EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Institutional Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional Shares
for the time periods indicated and then redeem all of your Shares at the end of
those periods. The Example also assumes that your investment has a 5% return
each year and that the Fund's Institutional Shares operating expenses are before
waivers as estimated above in the table and remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:

- ----------------------------------------------------
1 Year $ 60
3 Years $189
5 Years $329
10 Years $738

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

In an attempt to further enhance yield and provide diversification, the Adviser
may invest in securities subject to the alternative minimum tax.

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

Municipal Notes
Municipal notes are short-term tax exempt securities. Many municipalities issue
such notes to fund their current operations before collecting taxes or other
municipal revenues. Municipalities may also issue notes to fund capital projects
prior to issuing long-term bonds. The issuers typically repay the notes at the
end of their fiscal year, either with taxes, other revenues or proceeds from
newly issued notes or bonds.

Variable Rate Demand Instruments
Variable rate demand instruments are tax exempt securities that require the
issuer or a third party, such as a dealer or bank, to repurchase the security
for its face value upon demand. The securities also pay interest at a variable
rate intended to cause the securities to trade at their face value. The Fund
treats demand instruments as short-term securities, because their variable
interest rate adjusts in response to changes in market rates, even though their
stated maturity may extend beyond 13 months.

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

Although there are many factors which may affect an investment in the Fund, the
principal risks of investing in a municipal money market fund are described
below.

Credit Risks
Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money. Money market funds try to minimize this risk by purchasing
higher quality securities. Many fixed income securities receive credit ratings
from services such as Standard & Poor's and Moody's Investors Services. These
services assign ratings to securities by assessing the likelihood of issuer
default. Lower credit ratings correspond to higher credit risk. If a security
has not received a rating, the Fund must rely entirely upon the Adviser's credit
assessment.

WHAT DO SHARES COST?

The required minimum initial investment for Fund Shares is $1,000,000. There is
no required minimum subsequent investment amount.

HOW IS THE FUND SOLD?

The Fund offers three share classes: Institutional Shares, Institutional Service
Shares and Institutional Capital Shares, each representing interests in a single
portfolio of securities. This prospectus relates only to Institutional Shares.
Each share class has different expenses, which affect their performance. Contact
your investment professional or call 1-800-341-7400 for more information
concerning the other classes.

HOW TO PURCHASE SHARES

You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed New Account
Form; and

o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

By Wire Send your wire to:

By Check
Make your check payable to The Federated Funds, note your account number on the
check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
If you send your check by a private courier or overnight delivery service that
requires a street address, mail it to:

HOW TO REDEEM SHARES

You should redeem Shares:

o through an investment professional if you purchased Shares through an
investment professional; or

o directly from the Fund if you purchased Shares directly from the Fund.

DIRECTLY FROM THE FUND

By Telephone
You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 12:00 noon (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.

If you call after 12:00 noon (Eastern time), your redemption will be wired to
you the following business day. You will receive that day's dividend.

By Mail
You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Send requests by private courier or overnight delivery service to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317 All requests must include:

o Fund Name and Share Class, account number and account registration;

o amount to be redeemed; and

o signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

Signature Guarantees Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last 30 days ; or

o a redemption is payable to someone other than the shareholder(s) of record.

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

ACCOUNT AND SHARE INFORMATION

Account Activity
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

ACCOUNT AND SHARE INFORMATION

Account Activity
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

WHO MANAGES THE FUND?

The Adviser and other subsidiaries of Federated advise approximately 175 mutual
funds and separate accounts, which total approximately $111 billion in assets as
of December 31, 1998. Federated was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees. More than 4,000 investment professionals make Federated Funds
available to their customers.

FINANCIAL INFORMATION

<PAGE>

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust

Institutional shares

Investment Company Act File No. 811-5950
Cusip 000000000

000000-00 (9/99)

Prospectus

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust

institutional service shares

A money market mutual fund seeking to provide current income exempt from all
federal regular income tax consistent with stability of principal.

october , 1999

<PAGE>

RISK/RETURN SUMMARY

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

<PAGE>

Risk/Return Bar Chart and Table

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Institutional Service Shares of the Former Fund as of
the calendar year-end for each of five years.

The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 4%.

Historically, the Former Fund has maintained a constant $1.00 net asset value.
The bar chart shows the variability of the Former Fund's Institutional Service
Shares total returns on a calendar year-end basis.

The Former Fund's Institutional Service Shares are not sold subject to a sales
charge (load). The total returns displayed above are based upon the net asset
value.

The Former Fund's total return from January 1, 1999 to September 30, 1999 was
____%.

Within the period shown in the Chart, the Former Fund's Institutional Service
Shares highest quarterly return was 0.98% (quarter ended June 30, 1995). Its
lowest quarterly return was 0.53% (quarter ended March 31, 1994).

Average Annual Total Return Table

The following table represents the Former Fund's Institutional Service Shares
Average Annual Total Return for the calendar periods ending December 31, 1998.

Calendar Period Former Fund
1 Year 3.30%
5 Years 3.29%
Start of Performance1 3.14%
1 The Former Fund's Institutional Service Shares start of performance date was
February 8, 1993.

The Former Fund's Institutional Service Shares 7- Day Net Yield as of 12/31/98
was 3.52%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield .

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?
municipal OBLIGATIONS FUND - institutional service Shares

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Service Shares of the Fund. Shareholder Fees Fees Paid Directly
From Your Investment Maximum Sales Charge (Load) Imposed on Purchases (as a
percentage of offering price) None Maximum Deferred Sales Charge (Load) (as a
percentage of original purchase price or redemption None proceeds, as
applicable) Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and
other Distributions) (as a None percentage of offering price) Redemption Fee (as
a percentage of amount redeemed, if applicable) None Exchange Fee None

Annual Fund Operating Expenses (Before Waivers)1 Expenses That are Deducted From
Fund Assets (as a percentage of average net assets) Management Fee2 0.20%
Distribution (12b-1) Fee None Shareholder Services Fee 0.25% Other Expenses
0.14% Total Annual Fund Operating Expenses3 0.59% 1 Although not contractually
obligated to do so, the adviser and shareholder services provider expect to
waive certain amounts. These are described below along with the net expenses the
Fund's Institutional Service Shares expect to pay for the fiscal year ending
January 31, 2000.

Waiver of Fund Expenses 0.16%
Total Actual Annual Fund Operating Expenses (after waivers) 0.43%
2 The adviser expects to voluntarily waive a portion of the management fee. The
adviser can terminate this anticipated voluntary waiver at any time. The
management fee paid by the Fund's Institutional Service Shares (after the
anticipated voluntary waiver) is expected to be 0.04% for the year ending
January 31, 2000.
3 For the fiscal year ended January 31, 1999, prior to the reorganization of
Municipal Obligations Fund, the Former Fund, as a portfolio of Money Market
Obligations Trust into the Fund, the Total Annual Fund Operating Expenses and
Total Actual Annual Fund Operating Expenses (after waivers) were 0.59% and
0.43%, respectively.

EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Institutional Service Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Service Shares for the time periods indicated and then redeem all of your Shares
at the end of those periods. The Example also assumes that your investment has a
5% return each year and that the Fund's Institutional Service Shares operating
expenses are before waivers as estimated above in the table and remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

- ----------------------------------------------------
1 Year $ 68
3 Years $189
5 Years $329
10 Years $738

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

In an attempt to further enhance yield and provide diversification, the Adviser
may invest in securities subject to the alternative minimum tax.

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

Although there are many factors which may affect an investment in the Fund, the
principal risks of investing in a municipal money market fund are described
below.

WHAT DO SHARES COST?

The required minimum initial investment for Fund Shares is $1,000,000. There is
no required minimum subsequent investment amount.

HOW IS THE FUND SOLD?

The Fund offers three share classes: Institutional Shares, Institutional Service
Shares and Institutional Capital Shares, each representing interests in a single
portfolio of securities. This prospectus relates only to Institutional Service
Shares. Each share class has different expenses, which affect their performance.
Contact your investment professional or call 1-800-341-7400 for more information
concerning the other classes.

HOW TO PURCHASE SHARES

You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed New Account
Form; and

o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

By Wire Send your wire to:

By Check
Make your check payable to The Federated Funds, note your account number on the
check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
If you send your check by a private courier or overnight delivery service that
requires a street address, mail it to:

HOW TO REDEEM SHARES

You should redeem Shares:

o through an investment professional if you purchased Shares through an
investment professional; or

o directly from the Fund if you purchased Shares directly from the Fund.

DIRECTLY FROM THE FUND

By Telephone
You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 12:00 noon (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.

If you call after 12:00 noon (Eastern time), your redemption will be wired to
you the following business day. You will receive that day's dividend.

By Mail
You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Send requests by private courier or overnight delivery service to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317 All requests must include:

o Fund Name and Share Class, account number and account registration;

o amount to be redeemed; and

o signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

Signature Guarantees Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last 30 days ; or

o a redemption is payable to someone other than the shareholder(s) of record.

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

ACCOUNT AND SHARE INFORMATION

Account Activity
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

WHO MANAGES THE FUND?

FINANCIAL INFORMATION

<PAGE>

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust

Institutional service shares

A Statement of Additional Information (SAI) dated October , 1999, is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is contained in the Former Fund's Annual and Semi-Annual
Reports to shareholders as they become available. To obtain the SAI, the Annual
and the Semi-Annual Reports and other information without charge and make
inquiries, call your investment professional or the Fund at 1-800-341-7400.

Investment Company Act File No. 811-5950
Cusip 000000000

000000-00 (9/99)

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust

institutional shares
institutional service shares
institutional capital shares

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectuses for Institutional Shares, Institutional
Service Shares, and Institutional Capital Shares of Municiapl Obligations Fund
(Fund), dated October __, 1999. Obtain the prospectuses without charge by
calling 1-800-341-7400.

<PAGE>

Contents
How is the Fund Organized?
Securities in Which the Fund Invests
What Do Shares Cost?
How is the Fund Sold?
Subaccounting Services
Redemption in Kind
Massachusetts Partnership Law
Account and Share Information
Tax Information
Who Manages and Provides Services to the Fund?
How Does the Fund Measure Performance?
Who is Federated Investors, Inc.?
Addresses

october , 1999

G0 (10/99)

<PAGE>

HOW IS THE FUND ORGANIZED?

The Fund is a diversified portfolio of Money Market Obligations Trust (Trust).
The Trust is an open-end, management investment company that was established as
a Massachusetts business trust under the laws of the Commonwealth of
Massachusetts on October 3, 1988. The Trust may offer separate series of shares
representing interests in separate portfolios of securities. The Fund, which was
established on February 5, 1993 was reorganized as a portfolio of the Trust on
September __, 1999.

The Board of Trustees (Board) has established three classes of shares of the
Fund, known as Institutional Shares, Institutional Service Shares, and
Institutional Capital Shares (Shares). This SAI relates to all three classes.
The Fund's investment adviser is Federated Investment Management Company
(Adviser).

SECURITIES IN WHICH THE FUND INVESTS

In pursuing its investment strategy, the Fund may invest in the following
securities for any purpose that is consistent with its investment objective.

SECURITIES DESCRIPTIONS AND TECHNIQUES

Fixed Income Securities
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.

A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher risks generally have
higher yields.

The following describes the types of fixed income securities in which the Fund
invests.

Tax Exempt Securities
Tax exempt securities are fixed income securities that pay interest that is not
subject to regular federal income taxes. Typically, states, counties, cities and
other political subdivisions and authorities issue tax exempt securities. The
market categorizes tax exempt securities by their source of repayment.

General Obligation Bonds
General obligation bonds are supported by the issuer's power to exact
property or other taxes. The issuer must impose and collect taxes
sufficient to pay principal and interest on the bonds. However, the
issuer's authority to impose additional taxes may be limited by its
charter or state law.

Special Revenue Bonds
Special revenue bonds are payable solely from specific revenues
received by the issuer such as specific taxes, assessments, tolls, or
fees. Bondholders may not collect from the municipality's general taxes
or revenues. For example, a municipality may issue bonds to build a
toll road, and pledge the tolls to repay the bonds. Therefore, a
shortfall in the tolls normally would result in a default on the bonds.

Private Activity Bonds
Private activity bonds are special revenue bonds used to finance
private entities. For example, a municipality may issue bonds to
finance a new factory to improve its local economy. The municipality
would lend the proceeds from its bonds to the company using the
factory, and the company would agree to make loan payments sufficient
to repay the bonds. The bonds would be payable solely from the
company's loan payments, not from any other revenues of the
municipality. Therefore, any default on the loan normally would result
in a default on the bonds. The interest on many types of private
activity bonds is subject to the federal alternative minimum tax (AMT).
The Fund may invest in bonds subject to AMT.

Municipal Leases
Municipalities may enter into leases for equipment or facilities. In
order to comply with state public financing laws, these leases are
typically subject to annual appropriation. In other words, a
municipality may end a lease, without penalty, by not providing for the
lease payments in its annual budget. After the lease ends, the lessor
can resell the equipment or facility but may lose money on the sale.

Credit Enhancement
Common types of credit enhancement include guarantees, letters of
credit, bond insurance and surety bonds. Credit enhancement also
includes arrangements where securities or other liquid assets secure
payment of a fixed income security. If a default occurs, these assets
may be sold and the proceeds paid to security's holders. Either form of
credit enhancement reduces credit risks by providing another source of
payment for a fixed income security.

Special Transactions

Asset Coverage
In order to secure its obligations in connection with special transactions,
including delayed delivery transactions, the Fund will either own the underlying
assets, enter into an offsetting transaction or set aside readily marketable
securities with a value that equals or exceeds the Fund's obligations. Unless
the Fund has other readily marketable assets to set aside, it cannot trade
assets used to secure such obligations without entering into an offsetting
transaction or terminating a special transaction. This may cause the Fund to
miss favorable trading opportunities or to realize losses on special
transactions.

Temporary Defensive Investments
The Fund may make temporary defensive investments in the following taxable
securities.

Treasury Securities
Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the lowest
credit risks.

Agency Securities
Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a GSE). The United
States supports some GSEs with its full faith and credit. Other GSEs receive
support through federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities. Agency securities are
generally regarded as having low credit risks, but not as low as treasury
securities.

Bank Instruments
Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances. Yankee instruments are denominated in U.S. dollars and
issued by U.S. branches of foreign banks. Eurodollar instruments are denominated
in U.S. dollars and issued by non-U.S. branches of U.S. or foreign banks.

Corporate Debt Securities
Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Fund may also purchase interests in bank loans to
companies. The credit risks of corporate debt securities vary widely among
issuers.

Commercial Paper
Commercial paper is an issuer's obligation with a maturity of less than nine
months. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue
to obtain liquidity in this fashion, its commercial paper may default.

Repurchase Agreements
Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.

The Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price.

Repurchase agreements are subject to credit risks.

Investment Ratings
A nationally recognized rating service's two highest rating categories are
determined without regard for sub-categories and gradations. For example,
securities rated A-1+, A-1, or A-2 by Standard & Poor's, Prime-1 or Prime-2 by
Moody's Investors Services, or F-1+, F-1, or F-2 by Fitch IBCA, Inc. 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 rating service can be treated as being in one of the two
highest short-term rating categories; currently, such securities must be rated
by two rating services in one of their two highest rating categories. See
"Regulatory Compliance."

INVESTMENT RISKS

There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.

Tax Risks

In order to be tax exempt, municipal securities must meet certain legal
requirements. Failure to meet such requirements may cause the interest received
and distributed by the Fund to shareholders to be taxable. Changes or proposed
changes in federal tax laws may cause the prices of municipal securities to
fall.

Credit Risks
Credit risk includes the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.

Leverage Risks
Leverage risk is created when an investment exposes the Fund to a level of risk
that exceeds the amount invested. Changes in the value of such an investment
magnify the Fund's risk of loss and potential for gain.

INVESTMENT LIMITATIONS

Diversification of Investments
With respect to securities comprising 75% of the value of its total assets, the
Fund will not purchase securities of any one issuer (other than cash; cash
items; securities issued or guaranteed by the government of the United States or
its agencies or instrumentalities and repurchase agreements collateralized by
such U.S. government securities; and securities of other investment companies)
if, as a result, more than 5% of the value of its total assets would be invested
in securities of that issuer, or the Fund would own more than 10% of the
outstanding voting securities of that issuer. As a matter of non-fundamental
policy, the Fund complies with the diversification requirements of Rule 2a-7,
which are more rigorous.

Concentration of Investments

The Fund will not make investments that will result in the concentration of its
investmenst in the securities of issuers primarily engaged in the same industry.
Government securities, municipal securities and bank instruments are not deemed
to constitute an industry. To conform to the current view of the Securities and
Exchange Commission (SEC) that only domestic bank instruments may be excluded
from industry concentration limitations, as a matter of non-fundamental policy,
the Fund will not exclude foreign bank instruments from industry concentration
limits as long as the policy of the SEC remains in effect. As a non-fundamental
operating policy, the Fund will consider concentration to be the investment of
more than 25% of the value of its total assets in any one industry.

Lending Cash or Securities
The Fund may not make loans, provided that this restriction does not prevent the
Fund from purchasing debt obligations, entering into repurchase agreements,
lending its assets to broker/dealers or institutional investors and investing in
loans, including assignments and participation interests.

Underwriting
The Fund may not underwrite the securities of other issuers, except that the
Fund may engage in transactions involving the acquisition, disposition or resale
of its portfolio securities, under circumstances where it may be considered to
be an underwriter under the Securities Act of 1933.

Investing in Real Estate
The Fund may not purchase or sell real estate, provided that this restriction
does not prevent the Fund from investing in issuers which invest, deal, or
otherwise engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interests therein.
The Fund may exercise its rights under agreements relating to such securities,
including the right to enforce security interests and to hold real estate
acquired by reason of such enforcement until that real estate can be liquidated
in an orderly manner.

Investing in Commodities
The Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities.

Issuing Senior Securities, Borrowing Money and Pledging Assets
The Fund may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the 1940 Act.

The above limitations cannot be changed unless authorized by the Board and by
the "vote of a majority of its outstanding voting securities," as defined by the
Investment Company Act. The following limitations, however, may be changed by
the Board without shareholder approval. Shareholders will be notified before any
material change in these limitations becomes effective.

Pledging Assets

The Fund will not mortgage, pledge or hypothecate any of its assets, provided
that this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activites.

Investing in Illiquid Securities
The Fund will not purchase securities for which there is no readily available
market, or enter into repurchase agreements or purchase time deposits maturing
in more than seven days, if immediately after and as a result, the value of such
securities would exceed, in the aggregate, 10% of the Fund's net assets.

Buying on Margin
The Fund will not purchase securities on margin, provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities.

Regulatory Compliance
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this SAI, in order to comply with applicable laws and
regulations, including the provisions of and regulations under the Investment
Company Act of 1940. In particular, the Fund will comply with the various
requirements of Rule 2a-7 (the Rule), which regulates money market mutual funds.
For example, with limited exceptions, the Rule prohibits the investment of more
than 5% of the Fund's total assets in the securities of any one issuer, although
the Fund's investment limitation only requires such 5% diversification with
respect to 75% of its assets. The Fund will invest more than 5% of its assets in
any one issuer only under the circumstances permitted by the Rule. The Fund will
also 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
nationally recognized rating services, according to the Rule The Fund may change
these operational policies to reflect changes in the laws and regulations
without the approval of its shareholders.

DETERMINING MARKET VALUE OF SECURITIES
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.
Accordingly, 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. In periods of rising interest rates, the opposite may be true.

The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in the Rule. 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 per share, taking into account current market conditions and the Fund's
investment objective. The 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 of 1% 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.

WHAT DO SHARES COST?

The net asset value (NAV) for each class of Shares may differ due to the
variance in daily net income realized by each class. Such variance will reflect
only accrued net income to which the shareholders of a particular class are
entitled.

HOW IS THE FUND SOLD?

Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best- efforts basis.

SHAREHOLDER SERVICES
The Fund may pay Federated Shareholder Services Company, a subsidiary of
Federated Investors, Inc. (Federated), for providing shareholder services and
maintaining shareholder accounts. Federated Shareholder Services Company may
select others to perform these services for their customers and may pay them
fees.

SUPPLEMENTAL PAYMENTS
Investment professionals may be paid fees out of the assets of the Distributor
and/or Federated Shareholder Services Company (but not out of Fund assets). The
Distributor and/or Federated Shareholder Services Company may be reimbursed by
the Adviser or its affiliates.

Investment professionals receive such fees for providing distribution-related or
shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Fund or other special
events at recreational-type facilities, or items of material value. These
payments will be based upon the amount of Shares the investment professional
sells or may sell and/or upon the type and nature of sales or marketing support
furnished by the investment professional.

SUBACCOUNTING SERVICES

Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding Shares in a fiduciary, agency,
custodial, or similar capacity 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 that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.

Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is obligated to pay Share redemptions to any one
shareholder in cash only up to the lesser of $250,000 or 1% of the net assets
represented by such Share class during any 90-day period.

Any Share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.

Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.

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 documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust.

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.

ACCOUNT AND SHARE INFORMATION

VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All Shares of the Trust have
equal voting rights, except that in matters affecting only a particular Fund or
class, only Shares of that Fund or class are entitled to vote.

Trustees may be removed by the Board or by shareholders at a special meeting. A
special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Trust's outstanding shares
of all series entitled to vote.

TAX INFORMATION

FEDERAL INCOME TAX
The Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.

The Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Trust's other portfolios will be separate from those realized by the Fund.

WHO MANAGES AND PROVIDES SERVICES TO THE FUND?

BOARD OF TRUSTEES
The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Trust for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Trust is comprised of
twenty-one funds and the Federated Fund Complex is comprised of 54 investment
companies, whose investment advisers are affiliated with the Fund's Adviser.

As of October , 1999, the Fund's Board and Officers as a group owned less than
1% of the Fund's outstanding Institutional, Institutional Service, and
Institutional Capital Shares.

An asterisk (*) denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940. A pound sign (#) denotes a Member
of the Board's Executive Committee, which handles the Board's responsibilities
between its meetings.

<PAGE>

John F. Donahue*+# Chief Executive Officer and Director or Trustee of the $0 $0 for the
Birth Date: July 28, 1924 Federated Fund Complex; Chairman and Director, Trust and
Federated Investors Tower Federated Investors, Inc.; Chairman and Trustee, 54 other investment
1001 Liberty Avenue Federated Investment Management Company; Chairman and companies
Pittsburgh, PA Director, Federated Investment Counseling and in the Fund Complex
CHAIRMAN AND TRUSTEE Federated Global Investment Management Corp.;

Chairman, Passport Research, Ltd.
Thomas G. Bigley Director or Trustee of the Federated Fund Complex; $18, 351 $113,860.22 for the
Birth Date: February 3, 1934 Director, Member of Executive Committee, Children's Trust and 54 other
15 Old Timber Trail Hospital of Pittsburgh; Director, Robroy Industries, investment
Pittsburgh, PA Inc. (coated steel conduits/computer storage companies
TRUSTEE equipement); formerly: Senior Partner, Ernst & Young in the Fund Complex
LLP; Director, MED 3000 Group, Inc (physician
practice management).; Director, Member of
Executive Committee, University of Pittsburgh.

John T. Conroy, Jr. Director or Trustee of the Federated Fund Complex; $20,189 $125,264.48 for the
Birth Date: June 23, 1937 President, Investment Properties Corporation; Senior Trust and 54 other
Wood/Commercial Dept. Vice President, John R. Wood and Associates, Inc., investment
John R. Wood Associates, Realtors; Partner or Trustee in private real estate companies
Inc. Realtors ventures in Southwest Florida; formerly: President, in the Fund Complex
3255 Tamiami Trail North Naples Property Management, Inc. and Northgate Village
Naples, FL Development Corporation.
TRUSTEE

John F. Cunningham++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: March 5, 1943 Complex; Chairman, President and Chief Executive and 40 other
353 El Brillo Way Officer, Cunningham & Co., Inc. (strategic business investment
Palm Beach, FL consulting); Trustee Associate, Boston College; companies in the
TRUSTEE Director, EMC Corporation (computer storage systems); Fund Complex
formerly: Director, Redgate Communications.

Previous Positions: Chairman of the Board and Chief
Executive Officer, Computer Consoles, Inc., President
and Chief Operating Officer, Wang Laboratories;
Director, First National Bank of Boston; Director,
Apollo Computer, Inc.

Lawrence D. Ellis, M.D.* Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: October 11, 1932 Professor of Medicine, University of Pittsburgh; Trust and 54 other
3471 Fifth Avenue Medical Director, University of Pittsburgh Medical investment
Suite 1111 Center - Downtown; Hematologist, Oncologist, and companies
Pittsburgh, PA Internist, University of Pittsburgh Medical Center; in the Fund Complex
TRUSTEE Member, National Board of Trustees, Leukemia Society
of America.

- ----------------------------- -- -------------------------------------------------------- -- ------------ - ---------------------
Charles F. Mansfield, Jr.++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: April 10, 1945 Complex; Management Consultant. and 43 other
80 South Road investment
Westhampton Beach, NY Previous Positions: Chief Executive Officer, PBTC companies in the
TRUSTEE International Bank; Partner, Arthur Young & Company Fund Complex
(now Ernst & Young LLP); Chief Financial
Officer of Retail Banking Sector, Chase
Manhattan Bank; Senior Vice President, Marine
Midland Bank; Vice President, Citibank;
Assistant Professor of Banking and Finance,
Frank G. Zarb School of Business, Hofstra
University.

John E. Murray, Jr., J.D., Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for
S.J.D.# President, Law Professor, Duquesne University; the
Birth Date: December 20, 1932 Consulting Partner, Mollica & Murray; Director, Trust and 54 other
President, Duquesne Michael Baker Corp. (engineering, construction, investment
University operations, and technical services). companies
Pittsburgh, PA in the Fund Complex

TRUSTEE Previous Positions: Dean and Professor of Law,
University of Pittsburgh School of Law; Dean and
Professor of Law, Villanova University School of Law.

Marjorie P. Smuts Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for
Birth Date: June 21, 1935 Public Relations/Marketing/Conference Planning. the Trust and 54
4905 Bayard Street other investment
Pittsburgh, PA Previous Positions: National Spokesperson, Aluminum companies in the
TRUSTEE Company of America; television producer; business Fund Complex
owner.

John S. Walsh++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: November 28, 1957 Complex; President and Director, Heat Wagon, Inc. and 41 other
2007 Sherwood Drive (manufacturer of construction temporary heaters); investment
Valparaiso, IN President and Director, Manufacturers Products, Inc. companies in the
TRUSTEE (distributor of portable construction heaters); Fund Complex
President, Portable Heater Parts, a division
of Manufacturers Products, Inc.; Director,
Walsh & Kelly, Inc. (heavy highway
contractor); formerly, Vice President, Walsh &
Kelly, Inc.

J. Christopher Donahue+ President or Executive Vice President of the $0 $0 for the Trust
Birth Date: April 11, 1949 Federated Fund Complex; Director or Trustee of some and 16 other
Federated Investors Tower of the Funds in the Federated Fund Complex; President investment
1001 Liberty Avenue and Director, Federated Investors, Inc.; President companies in the
Pittsburgh, PA and Trustee, Federated Investment Management Company; Fund Complex
PRESIDENT President and Director, Federated Investment
Counseling and Federated Global Investment
Management Corp.; President, Passport
Research, Ltd.; Trustee, Federated Shareholder
Services Company; Director, Federated Services
Company.

<PAGE>

Edward C. Gonzales Trustee or Director of some of the Funds in the $0 $0 for the Trust
Birth Date: October 22, 1930 Federated Fund Complex; President, Executive Vice and
Federated Investors Tower President and Treasurer of some of the Funds in the 1 other investment
1001 Liberty Avenue Federated Fund Complex; Vice Chairman, Federated companies in the
Pittsburgh, PA Investors, Inc.; Vice President, Federated Investment Fund Complex
EXECUTIVE VICE PRESIDENT Management Company, Federated Investment Counseling,
Federated Global Investment Management Corp. and
Passport Research, Ltd.; Executive Vice President and
Director, Federated Securities Corp.; Trustee,
Federated Shareholder Services Company.

Richard J. Thomas Treasurer of the Federated Fund Complex; Vice $0 $0 for the Trust
Birth Date: June 17, 1954 President - Funds Financial Services Division, and 54 other
Federated Investors Tower Federated Investors, Inc.; Formerly: various investment
1001 Liberty Avenue management positions within Funds Financial Services companies in the
Pittsburgh, PA Division of Federated Investors, Inc. Fund Complex
TREASURER

William D. Dawson, III Chief Investment Officer of this Fund and various $0 $0 for the Trust
Birth Date: March 3, 1949 other Funds in the Federated Fund Complex; Executive and 41 other
Federated Investors Tower Vice President, Federated Investment Counseling, investment
1001 Liberty Avenue Federated Global Investment Management Corp., companies in the
Pittsburgh, PA Federated Investment Management Company and Passport Fund Complex
CHIEF INVESTMENT OFFICER Research, Ltd.; Registered Representative, Federated
Securities Corp.; Portfolio Manager, Federated
Administrative Services; Vice President,
Federated Investors, Inc.; formerly: Executive
Vice President and Senior Vice President,
Federated Investment Counseling Institutional
Portfolio Management Services Division; Senior
Vice President, Federated Investment
Management Company and Passport Research, Ltd.

Richard B. Fisher President or Vice President of some of the Funds in $0 $0 for the Trust
Birth Date: May 17, 1923 the Federated Fund Complex; Director or Trustee of and 6 other
Federated Investors Tower some of the Funds in the Federated Fund Complex; investment
1001 Liberty Avenue Executive Vice President, Federated Investors, Inc.; companies in the
Pittsburgh, PA Chairman and Director, Federated Securities Corp. Fund Complex
VICE PRESIDENT

Deborah A. Cunningham Deborah A. Cunningham is Vice President of the Trust. $0 $0 for the Trust
Birth Date: September 15, Ms. Cunningham joined Federated Investors in 1981 and 6 other
1959 and has been a Senior Portfolio Manager and a Senior investment
Federated Investors Tower Vice President of the Fund's investment adviser since companies in the
1001 Liberty Avenue 1997. Ms. Cunningham served as a Portfolio Manager Fund Complex
Pittsburgh, PA and a Vice President of the investment adviser from
VICE PRESIDENT 1993 until 1996. Ms. Cunningham is a Chartered
Financial Analyst and received her M.S.B.A. in
Finance from Robert Morris College.

Mary Jo Ochson Mary Jo Ochson has been the Fund's portfolio manager $0 $0 for the Trust
Birth Date: September 12, since inception. She is Vice President of the and 7 other
1953 Trust. Ms. Ochson joined Federated Investors in 1982 investment
Federated Investors Tower and has been a Senior Portfolio Manager and a Senior companies in the
1001 Liberty Avenue Vice President of the Fund's investment adviser since Fund Complex
Pittsburgh, PA 1996. From 1988 through 1995, Ms. Ochson served as a
VICE PRESIDENT Portfolio Manager and a Vice President of the Fund's
investment adviser. Ms. Ochson is a Chartered
Financial Analyst and received her M.B.A. in Finance
from the University of Pittsburgh.

</TABLE>

+ Mr. Donahue is the father of J. Christopher Donahue, President of the Trust.
++ Messrs. Cunningham, Mansfield, and Walsh became members of the Board on
January 1, 1999. They did not earn any fees for serving the Fund Complex since
these fees are reported as of the end of the last calendar year. They did not
receive any fees as of the fiscal year end of the Trust.

INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund.

The Adviser is a wholly owned subsidiary of Federated.

The Adviser shall not be liable to the Trust or any Fund shareholder 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.

Prior to November 15, 1996, Lehman Brothers Global Asset Management (former
adviser), New York, New York, served as the Fund's Adviser.

Other Related Services
Affiliates of the Adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of Fund Shares offered by the Distributor.

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. The 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. In selecting among firms believed to meet these
criteria, the Adviser may give consideration to those firms which have sold or
are selling Shares of the Fund and other funds distributed by the Distributor
and its affiliates. The Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to review by the Fund's Board.

Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund.

ADMINISTRATOR
Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Fund. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets of
all Federated Funds as specified below:

Maximum Administrative Fee Average Aggregate Daily Net
Assets of the Federated Funds

0.150 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750

million

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 Services Company may voluntarily waive a portion of its fee and may
reimburse the Fund for expenses.

Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets, plus out-of-pocket expenses.

Prior to November 15, 1996, FDISG (former administrator), a subsidiary of First
Data Corporation, Boston, Massachusetts, served as the Fund's administrator.

CUSTODIAN
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Fund pays the transfer agent a fee based on the size, type, and
number of accounts and transactions made by shareholders.

INDEPENDENT auditors
The independent auditor for the Fund, Ernst & Young LLP, plans and performs
their audit so that they may provide an opinion as to whether the Fund's
financial highlights are free of material misstatement.

FEES PAID BY THE FUND FOR SERVICES
For the Year Ended January 31 1999 1998 19971
Advisory Fee Earned 2 $803,037 $447,960 $76,352
Advisory Fee Reduction 636,478 76,352
447,960
Administrative Fee3 302,822 190,864 19,609
Shareholder Services Fee
Institutional Shares 0 N/A N/A
Institutional Service Shares 157,723 N/A N/A
Institutional Capital Shares 69,567 N/A N/A

1 For the period from November 15, 1996 to Januay 31, 1997.
2 For the period from February 1, 1996 to November 14, 1996, the former adviser
earned $287,184. 3 For the period from February 1, 1996 to November 14, 1996,
the former administrator earned $143,592. Fees are allocated among classes based
on their pro rata share of Fund assets, except for shareholder services fees,
which are borne only by the applicable class of Shares.

For the fiscal years ended January 31, 1999, 1998 and 1997, fees paid by the
Fund for services are prior to the Fund's reorganization as a portfolio of the
Trust on September __, 1999.

HOW DOES THE FUND MEASURE PERFORMANCE?

The Fund may advertise Share performance by using the SEC's standard method for
calculating performance applicable to all mutual funds. The SEC also permits
this standard performance information to be accompanied by non-standard
performance information.

The performance of Shares depends upon such variables as: portfolio quality;
average portfolio maturity; type and value of portfolio securities; changes in
interest rates; changes or differences in the Fund's or any class of Shares'
expenses; and various other factors.

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

Average Annual Total Returns and Yield
Total returns given for the one-year, five-year and the start of performance
periods ended January 31, 1999.

Yield, Effective Yield, and Tax-Equivalent Yield given for the 7-day period
ended January 31, 1999.

Performance of the Fund shown is prior to its reorganization as a portfolio of
the Trust on September __, 1999.

Share Class 7-Day 1 5 Start of
Period Year Years Performance on
February 8, 1993
Institutional
Shares:
Total Return N/A 3.53% 3.57% 3.39%
Yield 3.03% N/A N/A N/A
Effective Yield 3.07% N/A N/A N/A
Tax-equivalent 5.02% N/A N/A N/A
Yield

Share Class 7-Day 1 5 Start of
Period Year Years Performance on
September 1, 1993
Institutional
Service Shares:
Total Return N/A 3.27% 3.31% 3.13%
Yield 2.78% N/A N/A N/A
Effective Yield 2.82% N/A N/A N/A
Tax-Equivalent 4.60% N/A N/A N/A
Yield

Share Class 7-Day 1 5 Start of
Period Year Years Performance on
February 8, 1993
Institutional
Capital Shares:
Total Return N/A 3.40% 3.43% 3.25%
Yield 2.91% N/A N/A N/A
Effective Yield 2.95% N/A N/A N/A
Tax-Equivalent 4.82% N/A N/A N/A
Yield

TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.

The average annual total return for Shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of Shares owned at the end of the period by
the NAV per Share at the end of the period. The number of Shares owned at the
end of the period is based on the number of Shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional Shares, assuming the annual reinvestment of all
dividends and distributions.

YIELD, effective yield and tax-equivalent yield
The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated 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 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. The effective yield is calculated by compounding the unannualized
base-period return by: adding one to the base-period return, raising the sum to
the 365/7th power; and subtracting one from the result. The tax-equivalent yield
of shares is calculated similarily to the yield, but is adjusted to reflect the
taxable yield that Shares would have had to earn to equal the actual yield,
assuming a specific tax rate.

To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share performance is lower for shareholders paying those fees.

TAX EQUIVALENCY TABLE
Set forth below is a sample of a tax-equivalency table that may be used in
advertising and sales literature. This table is for illustrative purposes only
and is not representative of past or future performance of the Fund. The
interest earned by the municipal securities owned by the Fund generally remains
free from federal regular income tax and is often free from state and local
taxes as well. However, some of the Fund's income may be subject to the federal
alternative minimum tax and state and/or local taxes.

Taxable Yield Equivalent for 1999 MultiState Municipal Fund

<TABLE>

Federal Income Tax Bracket: 15.00% 28.00% 31.00% 36.00% 39.60%
Joint Return $1-43,050 $43,051-104,050 $104,051-158,550 $158,551-283,150 Over 283,150
Single Return $1-25,750 $25,751-62,450 $62,451-130,250 $130,251-283,150 Over 283,150
Tax Exempt Yield: Taxable Yield Equivalent:
1.00% 1.18% 1.39% 1.45% 1.56% 1.66%
1.50% 1.76% 2.08% 2.17% 2.34% 2.48%
2.00% 2.35% 2.78% 2.90% 3.13% 3.31%
2.50% 2.94% 3.47% 3.62% 3.91% 4.14%
3.00% 3.53% 4.17% 4.35% 4.69% 4.97%
3.50% 4.12% 4.86% 5.07% 5.47% 5.79%
4.00% 4.71% 5.56% 5.80% 6.25% 6.62%
4.50% 5.29% 6.25% 6.52% 7.03% 7.45%
5.00% 5.88% 6.94% 7.25% 7.81% 8.28%
5.50% 6.47% 7.64% 7.97% 8.59% 9.11%
6.00% 7.06% 8.33% 8.70% 9.38% 9.93%
6.50% 7.65% 9.03% 9.42% 10.16% 10.76%
7.00% 8.24% 9.72% 10.14% 10.94% 11.59%
7.50% 8.82% 10.42% 10.87% 11.72% 12.42%
8.00% 9.41% 11.11% 11.59% 12.50% 13.25%
</TABLE>

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
caparable taxable investments were not used to increase federal deductions.

PERFORMANCE COMPARISONS
Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;

o charts, graphs, and illustrations using the Fund's returns; or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;

o discussions of economic, financial and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Funds; and

o information about the mutual fund industry from sources such as the Investment
Company Institute.

The Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.

The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

You may use financial publications and/or indices to obtain a more complete view
of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Fund uses in advertising may include:

VIBC/Donoghue's Money Fund Report
IBC/Donoghue's Money Fund Report publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.

Bank Rate Monitor(C) National Index
Bank Rate Monitor(C) National Index, Miami Beach, Florida, published weekly, is
an average of the interest rates of personal money market deposit accounts at
ten of the largest banks and thrifts in each of the five largest Standard
Metropolitan Statistical Areas. If more than one rate is offered, the lowest
rate is used. Account minimums and compounding methods may vary.

WHO IS FEDERATED INVESTORS, INC.?

Federated is dedicated to meeting investor needs by making structured,
straightforward and consistent investment decisions. Federated investment
products have a history of competitive performance and have gained the
confidence of thousands of financial institutions and individual investors.

Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is a fusion of individual talents and state-of-the-art
industry tools and resources. Federated's investment process involves teams of
portfolio managers and analysts, and investment decisions are executed by
traders who are dedicated to specific market sectors and who handle trillions of
dollars in annual trading volume.

Federated Funds overview

Municipal Funds
In the municipal sector, as of December 31, 1998, Federated managed 10 bond
funds with approximately $2.2 billion in assets and 23 money market funds with
approximately $12.5 billion in total assets. In 1976, Federated introduced one
of the first municipal bond mutual funds in the industry and is now one of the
largest institutional buyers of municipal securities. The Funds may quote
statistics from organizations including The Tax Foundation and the National
Taxpayers Union regarding the tax obligations of Americans.

Equity Funds
In the equity sector, Federated has more than 28 years' experience. As of
December 31, 1998, Federated managed 27 equity funds totaling approximately
$14.9 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value-oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.

Corporate Bond Funds
In the corporate bond sector, as of December 31, 1998, Federated managed 9 money
market funds and 15 bond funds with assets approximating $22.8 billion and $7.1
billion, respectively. Federated's corporate bond decision making--based on
intensive, diligent credit analysis--is backed by over 26 years of experience in
the corporate bond sector. In 1972, Federated introduced one of the first
high-yield bond funds in the industry. In 1983, Federated was one of the first
fund managers to participate in the asset- backed securities market, a market
totaling more than $209 billion.

Government Funds
In the government sector, as of December 31, 1998, Federated manages 9
mortgage-backed, 5 government/agency, and 19 government money market mutual
funds, with assets approximating $5.3 billion, $1.8 billion, and $41.6 billion,
respectively. Federated trades approximately $425 million in U.S. government and
mortgage-backed securities daily and places approximately $25 billion in
repurchase agreements each day. Federated introduced the first U.S. government
fund to invest in U.S. government bond securities in 1969. Federated has been a
major force in the short- and intermediate-term government markets since 1982
and currently manages approximately $43.2 billion in government funds within
these maturity ranges.

Money Market Funds
In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market fund.
Simultaneously, the company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a principal means used by
money managers today to value money market fund shares. Other innovations
include the first institutional tax-free money market fund. As of December 31,
1998, Federated managed more than $76.7 billion in assets across 52 money market
funds, including 19 government, 9 prime, and 23 municipal with assets
approximating $41.6 billion, $22.8 billion, and $12.5 billion, respectively.

The Chief Investment Officers responsible for oversight of the various
investment sectors within Federated are: U.S. equity and high yield--J. Thomas
Madden; U.S. fixed income--William D. Dawson, III; and global equities and fixed
income--Henry A. Frantzen. The Chief Investment Officers are Executive Vice
Presidents of the Federated advisory companies.

Mutual Fund Market
Thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $5 trillion to the more than 7,300 funds available,
according to the Investment Company Institute.

Federated Clients Overview
Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:

Institutional Clients
Federated meets the needs of approximately 900 institutional clients nationwide
by managing and servicing separate accounts and mutual funds for a variety of
purposes, including defined benefit and defined contribution programs, cash
management, and asset/liability management. Institutional clients include
corporations, pension funds, tax exempt entities, foundations/ endowments,
insurance companies, and investment and financial advisers. The marketing effort
to these institutional clients is headed by John B.
Fisher, President, Institutional Sales Division, Federated Securities Corp.

Bank Marketing
Other institutional clients include more than 1,600 banks and trust
organizations. Virtually all of the trust divisions of the top 100 bank holding
companies use Federated Funds in their clients' portfolios. The marketing effort
to trust clients is headed by Timothy C. Pillion, Senior Vice President, Bank
Marketing & Sales.

Broker/Dealers and Bank Broker/Dealer Subsidiaries
Federated Funds are available to consumers through major brokerage firms
nationwide--we have over 2,200 broker/dealer and bank broker/dealer
relationships across the country--supported by more wholesalers than any other
mutual fund distributor. Federated's service to financial professionals and
institutions has earned it high ratings in several surveys performed by DALBAR,
Inc. DALBAR is recognized as the industry benchmark for service quality
measurement. The marketing effort to these firms is headed by James F. Getz,
President, Broker/Dealer Sales Division, Federated Securities Corp.

FINANCIAL INFORMATION

The Financial Statements for Municipal Obligations Fund (the Former Fund) for
the fiscal year ended January 31, 1999, are for prior to the Fund's
reorganization as a portfolio of the Trust on September __, 1999. The Financial
Statements are incorporated herein by reference to the Former Fund's Prospectus
which serves as the Annual Report to Shareholders dated March 31, 1999.

<PAGE>

INVESTMENT RATINGS

Standard & Poor's Short-Term Municipal Obligation Ratings
A Standard & Poor's (S&P) 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
sign (+) designation.
SP-2--Satisfactory capacity to pay principal and interest.

Variable Rate Demand Notes (VRDNs) And Tender Option Bonds (TOBs) Ratings
S&P 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
long-term and the short-term ratings are provided below.)

Commercial Paper (CP) Ratings
An S&P 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 highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation. A-2--Capacity for
timely payment on issues with this designation is satisfactory. However, the
relative degree of safety is not as high as for issues designated A-1.

Long-Term Debt Ratings
AAA--Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong. AA--Debt rated AA has a very
strong capacity to pay interest and repay principal and differs from the
highest-rated issues only in small degree. A--Debt rated A has a strong capacity
to pay interest and repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic conditions than
debt in higher-rated categories.

Moody's Investors Service Short-Term Municipal Obligation Ratings

Moody's Investors Service (Moody's) short-term ratings are designated Moody's
Investment Grade (MIG or VMIG). (See below.) The purpose of the MIG or VMIG
ratings 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
Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as 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
P-1--Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics: leading
market positions in well established industries, high rates of return on funds
employed, conservative capitalization structure with moderate reliance on debt
and ample asset protection, broad margins in earning coverage of fixed financial
charges and high internal cash generation, well-established access to a range of
financial markets and assured sources of alternate liquidity. P-2--Issuers rated
Prime-2 (or related supporting institutions) have a strong capacity for
repayment of short-term promissory obligations. This will normally be evidenced
by many of the characteristics cited above, but to a lesser degree. Earnings
trends and coverage ratios, while sound, will be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.

Long-Term Debt Ratings
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
edged." 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. NR--Indicates that both the bonds and the
obligor or credit enhancer are not currently rated by S&P or Moody's with
respect to short-term indebtedness. However, management considers them to be of
comparable quality to securities rated A-1 or P-1. NR(1)--The underlying
issuer/obligor/guarantor has other outstanding debt rated AAA by S&P or Aaa by
Moody's. NR(2)--The underlying issuer/obligor/guarantor has other outstanding
debt rated AA by S&P or Aa by Moody's. NR(3)--The underlying
issuer/obligor/guarantor has other outstanding debt rated A by S&P or Moody's.

Fitch IBOA, Inc. Short-Term Debt 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 for 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 for issues assigned F-1+ and F-1 ratings.

<PAGE>

ADDRESSES

Municipal OBLIGATIONS FUND
Institutional Shares
Institutional Service Shares
Institutional Capital Shares

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

Distributor
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Investment Adviser
Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Custodian
State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600

Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Independent Auditors
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072

PRIME VALUE OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust

institutional shares

A money market mutual fund seeking to achieve current income consistent with
stability of principal and liquidity by investing in fixed income securities
maturing in 397 days or less.

<PAGE>

OCTOBER __, 1999

<PAGE>

Contents
Risk/Return Summary
What are the Fund's Fees and Expenses? What are the Fund's Investment
Strategies? What are the Principal Securities in Which the Fund Invests? What
are the Specific Risks of Investing in the Fund?
What Do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem Shares
Account and Share Information
Who Manages the Fund?
Financial Information

<PAGE>

RISK/RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund is a money market fund which seeks to maintain a stable net asset value
of $1.00. The Fund's investment objective is current income consistent with
stability of principal and liquidity. While there is no assurance that the Fund
will achieve its investment objective, it endeavors to do so by following the
strategies and policies described in this prospectus.
This investment objective may be changed by the Fund's Trustees without
shareholder approval.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests in a portfolio of high quality fixed income securities maturing
in 397 days or less. The average maturity of the Fund's portfolio will be 90
days or less.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
All mutual funds take investment risks. Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund. 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.

<PAGE>

Risk/Return Bar Chart and Table

The Bar Chart and Performance Table below reflect historical performance data
for Institutional Shares of Prime Value Obligations Fund (the "Former Fund")
prior to its reorganization into the Fund, which is a newly created portfolio of
Money Market Obligations Trust (the "Trust"). On the date of the reorganization,
October __, 1999, the Former Fund was dissolved and its net assets (inclusive of
liabilities recorded on the Former Fund's records) were transferred to the Fund.

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Institutional Shares of the Former Fund as of the
calendar year-end for each of five years.

The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 7%.

The `x' axis represents calculation periods from the earliest first full
calendar year end of the Former Fund's start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Shares for each
calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1998. The percentages noted are: 4.30%, 6.10%,
5.44%, 5.652% and 5.58%.

Historically, the Former Fund has maintained a constant $1.00 net asset value
per share. The bar chart shows the variability of the Former Fund's
Institutional Shares total returns on a calendar year-end basis.

The Former Fund's Institutional Shares are not sold subject to a sales charge
(load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Shares total return from January 1, 1999 to June
30, 1999 was ____%.

Within the period shown in the Chart, the Former Fund's Institutional Shares
highest quarterly return was 1.53% (quarter ended June 30, 1995). Its lowest
quarterly return was 0.82% (quarter ended March 31, 1994).

Average Annual Total Return Table

The following table represents the Former Fund's Institutional Shares Average
Annual Total Return for the calendar periods ended December 31, 1998.

Calendar Period Institutional
Shares
1 Year 5.58%
5 Years 5.41%
Start of Performance1 5.08%
1 The Former Fund's Institutional Shares start of performance date was February
8, 1993.

The Former Fund's Institutional Shares 7- Day Net Yield as of 12/31/98 was
5.15%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield .

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?
PRIME VALUE OBLIGATIONS FUND - Institutional Shares

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Fund's Institutional Shares. Shareholder Fees Fees Paid Directly
From Your Investment Maximum Sales Charge (Load) Imposed on Purchases (as a
percentage of offering price) None Maximum Deferred Sales Charge (Load) (as a
percentage of original purchase price or redemption None proceeds, as
applicable) Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and
other Distributions) (as a None percentage of offering price) Redemption Fee (as
a percentage of amount redeemed, if applicable) None Exchange Fee None

<S> <C>

Annual Fund Operating Expenses (Before Waivers)1
Expenses That are Deducted From Fund Assets (as a percentage of average net assets)
Management Fee2 0.20%
Distribution (12b-1) Fee None
Shareholder Services Fee3 0.25%
Other Expenses 0.11%
Total Annual Fund Operating Expenses4 0.56%
-
1 Although not contractually obligated to do so, the adviser and shareholder services provider
expect to waive certain amounts. These are shown below along with the net
expenses the Fund's Institutional Shares expects to pay for the fiscal year
ending January 31, 2000.
Total Waivers of Fund Expenses 0.40%
Total Actual Annual Fund Operating Expenses (after waivers) 0.16%
</TABLE>

2 The adviser expects to voluntarily waive a portion of the management fee.
The adviser can terminate this anticipated voluntary waiver at any time.
The management fee paid by the Fund's Institutional Shares (after the
anticipated voluntary waiver) is expected to be 0.05% for the fiscal year
ending January 31, 2000.
3 The shareholder services provider expects to voluntarily reduce a portion of
the Fund's shareholder services fee. The shareholder services provider can
terminate this anticipated voluntary reduction at any time. The shareholder
services fee paid by the Fund's Institutional Shares (after the anticipated
voluntary reduction) is expected to be 0.00% for the fiscal year ending
January 31, 2000.
4 For the fiscal year ended January 31, 1999, prior to the reorganization of
Prime Value Obligations Fund, the Former Fund, as a portfolio of Money Market
Obligations Trust, had Total Annual Fund Operating Expenses and Total Actual
Annual Fund Operating Expenses (after waivers) of 0.56% and 0.16%,
respectively.

<PAGE>

EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Institutional Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional Shares
for the time periods indicated and then redeem all of your Shares at the end of
those periods. The Example also assumes that your investment has a 5% return
each year and that the Fund's Institutional Shares operating expenses are before
waivers as estimated in the table and remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:

- ------------------------------------------------------
1 Year $57
3 Years $179
5 Years $313
10 Years $701

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high-quality fixed income securities maturing
in 397 days or less. The average maturity of the Fund's portfolio is 90 days or
less. The Fund's investment adviser (Adviser) actively manages the Fund's
portfolio, seeking to limit the credit risk taken by the Fund and provide
enhanced returns.

The Adviser targets an average portfolio maturity based upon its interest rate
outlook. The Adviser formulates its interest rate outlook by analyzing a variety
of factors such as current and expected U.S. economic growth; current and
expected interest rates and inflation; and the Federal Reserve's monetary
policy. The Adviser structures the portfolio by investing primarily in variable
rate demand instruments and commercial paper to achieve a limited barbell
structure. The Adviser generally shortens the portfolio's maturity when it
expects interest rates to rise and extends the maturity when it expects interest
rates to fall. This strategy seeks to enhance the returns from favorable
interest rate changes and reduce the effect of unfavorable changes.

Industry Concentration
The Fund intends to invest 25% or more of the value of its total assets in
obligations of issuers in the banking industry or in obligations, such as
repurchase agreements, secured by such obligations; provided that there is no
limitation with respect to investments in U.S. government securities or, in bank
instruments issued or enhanced by approved banks.

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?
Fixed income securities
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. The
following describes the types of fixed income securities in which the Fund
invests:

Corporate Debt Securities
Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures, and commercial paper are the most prevalent types of
corporate debt securities. The Fund may also purchase interests in bank loans to
companies.

Commercial Paper
Commercial paper is an issuer's obligation with a maturity of nine months or
less. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue
to obtain liquidity in this fashion, its commercial paper may default.

Demand Instruments
Demand instruments are corporate debt securities that the issuer must repay upon
demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Fund treats
demand instruments as short-term securities, even though their stated maturity
may extend beyond one year.

Bank Instruments

Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances. Yankee instruments are denominated in U.S. dollars and
issued by U.S. branches of foreign banks. Eurodollar instruments are denominated
in U.S. dollars and issued by non-U.S. branches of U.S. or foreign banks.

Asset Backed Securities
Asset Backed Securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts
with maturities of less than ten years. However, almost any type of fixed income
assets (including other fixed income securities) may be used to create an asset
backed security. Asset backed securities may take the form of commercial paper,
notes, or pass-through certificates.

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?
Although there are many factors which may affect an investment in the Fund, the
principal risks of investing in a corporate money market fund are described
below.

Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services, Inc. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not received
a rating, the Fund must rely entirely upon the Adviser's credit assessment.

interest rate Risks
Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

<PAGE>

Sector Risks
A substantial part of the Fund's portfolio may be comprised of securities credit
enhanced by banks or companies with similiar characteristics. As a result, the
Fund will be more susceptible to any economic, business, political, or other
developments which generally affect these entities.

WHAT DO SHARES COST?

The required minimum initial investment for Fund Shares is $1,000,000. There
is no required minimum subsequent investment amount.

An account may be opened with a smaller amount as long as the $1,000,000
minimum is reached within one year of opening the account. An institutional
investor's minimum investment is calculated by combining all accounts it
maintains with the Fund. Accounts established through investment professionals
may be subject to a smaller minimum investment amount. Keep in mind that
investment professionals may charge you fees for their services in connection
with your Share transactions.

HOW IS THE FUND SOLD?

The Fund offers three share classes: Institutional Shares, Institutional Service
Shares and Institutional Capital Shares, each representing interests in a single
portfolio of securities. This prospectus relates only to Institutional Shares.
Each share class has different expenses, which affect their performance. Contact
your investment professional or call 1-800-341-7400 for more information
concerning the other classes.

The Fund's Distributor, Federated Securities Corp., markets the Shares
described in this prospectus to institutions acting in an agency or fiduciary
capacity or individuals, directly or through investment professionals. The
Distributor and its affiliates may pay out of their assets other amounts
(including items of material value) to investment professionals for marketing
and servicing Shares.
The Distributor is a subsidiary of Federated Investors, Inc. (Federated).

HOW TO PURCHASE SHARES

You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and
o Submit your purchase order to the investment professional before 3:00 p.m.
(Eastern time). You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment
by 3:00 p.m. (Eastern time). You will become the owner of Shares and
receive dividends when the Fund receives your payment.

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND
o Establish your account with the Fund by submitting a completed New Account
Form; and o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

By Wire Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number, or Group Number Nominee/Institution Name
Fund Name and Number and Account Number.

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

By Check
Make your check payable to The Federated Funds, note your account number on the
check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

If you send your check by a private courier or overnight delivery service that
requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third- party checks (checks originally payable to someone other than
you or The Federated Funds). Orders by mail are considered received when payment
by check is converted into federal funds (normally the business day after the
check is received) and Shares begin earning dividends the next day.

By invest-by-phone
Once you establish an account, you may use the Fund's Invest-By-Phone privilege
for future Share purchases if you have an account with a bank that is an
Automated Clearing House member. To apply, call the Fund for an authorization
form. You may use Invest-By-Phone to purchase Shares approximately two weeks
from the date you file the form with Federated Shareholder Services Company.

BY AUTOMATED CLEARING HOUSE (ACH)
Once you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the New Account Form.

HOW TO REDEEM SHARES
You should redeem Shares:
o through an investment professional if you purchased Shares through an
investment professional; or o directly from the Fund if you purchased Shares
directly from the Fund.

DIRECTLY FROM THE FUND

By Telephone
You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 3:00 p.m. (Eastern time) your redemption will be wired to
you the same day. You will not receive that day's dividend.

If you call after 3:00 p.m. (Eastern time) your redemption will be wired to
you the following business day. You will receive that day's dividend.

By Mail
You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Send requests by private courier or overnight delivery service to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

All requests must include:

o Fund Name and Share Class, account number and account registration;
o amount to be redeemed; and
o signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

Signature Guarantees Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed within
the last 30 days; or o a redemption is payable to someone other than the
shareholder(s) of record.

PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened: o an electronic transfer to your account at a financial
institution that is an ACH member; or o wire payment to your account at a
domestic commercial bank that is a Federal Reserve System member.

LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:
o to allow your purchase to clear;
o during periods of market volatility; or
o when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

<PAGE>

ACCOUNT AND SHARE INFORMATION
account activity
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

TAX INFORMATION
The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

WHO MANAGES THE FUND?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the Fund's
assets, including buying and selling portfolio securities. The Adviser's address
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.

The Adviser and other subsidiaries of Federated advise approximately 175
mutual funds and separate accounts, which totaled approximately $111 billion in
assets as of December 31, 1998. Federated was established in 1955 and is one of
the largest mutual fund investment managers in the United States with
approximately 1,900 employees. More than 4,000 investment professionals make
Federated Funds available to their customers.

While it is impossible to determine in advance all of the risks to the Fund,
the Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
Share transactions or Fund communications.

The Fund's service providers are making changes to their computer systems to
fix any Year 2000 problems. In addition, they are working to gather information
from third-party providers to determine their Year 2000 readiness.

However, this may be difficult with certain issuers. For example, funds
dealing with foreign service providers or investing in foreign securities will
have difficulty determining the Year 2000 readiness of those entities. The
financial impact of these issues for the Fund is still being determined. There
can be no assurance that potential Year 2000 problems would not have a material
adverse effect on the Fund.

FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
The Fund's Financial Highlights are contained in the Former Fund's Prospectus
which also serves as the Annual Report, dated March 31, 1999 and is incorporated
by reference and must precede or accompany this document.

<PAGE>

PRIME VALUE OBLIGATIONS FUND
A Portfolio of Money Market Obligations Trust

Institutional shares

October __, 1999

A Statement of Additional Information (SAI) dated October __, 1999, is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is contained in the Former Fund's Annual and Semi-Annual
Reports to shareholders and will be contained in the Fund's Annual and
Semi-Annual Reports as they become available. To obtain the SAI, the Annual
Report, Semi-Annual Report and other information without charge and make
inquiries, call your investment professional or the Fund at 1-800- 341-7400.

Investment Company Act File No. 811-5950
Cusip ________________

__________ (10/99)

PRIME VALUE OBLIGATIONS FUND
A Portfolio of Money Market Obligations Trust

Institutional Capital Shares

A money market mutual fund seeking to achieve current income consistent with
stability of principal and liquidity by investing in fixed income securities
maturing in 397 days or less.

Contents
Risk/Return
Summary What
are the Fund's
Fees and
Expenses? What
are the Fund's
Investment
Strategies?
What are the
Principal
Securities in
Which the Fund
Invests? What
are the
Specific Risks
of Investing in
the Fund?
What do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem Shares
Account and Share Information
Who Manages the Fund?
Financial Information
October __, 1999

<PAGE>

Risk/Return Bar Chart and Table

The Bar Chart and Performance Table below reflect historical performance data
for Institutional Capital Shares of Prime Value Obligations Fund (the "Former
Fund") prior to its reorganization into the Fund, which is a newly created
portfolio of Money Market Obligations Trust (the "Trust"). On the date of the
reorganization, October __, 1999, the Former Fund was dissolved and its net
assets (inclusive of liabilities recorded on the Former Fund's records) were
transferred to the Fund.

The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 6%.

Historically, the Former Fund has maintained a constant $1.00 net asset value
per share. The bar chart shows the variability of the Former Fund's
Institutional Capital Shares total returns on a calendar year-end basis.

The Former Fund's Institutional Capital Shares are not sold subject to a sales
charge (load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Capital Shares total return from January 1, 1999
to June 30, 1999 was ____%.

Within the period shown in the Chart, the Former Fund's Institutional Capital
Shares highest quarterly return was 1.49% (quarter ended June 30, 1995). Its
lowest quarterly return was 0.78% (quarter ended March 31, 1994).

Average Annual Total Return Table

The following table represents the Former Fund's Institutional Capital Shares
Average Annual Total Return for the calendar periods ended December 31, 1998.

Calendar Period Institutional
Capital Shares
1 Year 5.46%
5 Years 5.27%
Start of Performance1 4.94%
1 The Former Fund's Institutional Capital Shares start of performance date was
February 8, 1993.

The Former Fund's Institutional Capital Shares 7- Day Net Yield as of 12/31/98
was 5.03%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield .

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?
PRIME VALUE OBLIGATIONS FUND - Institutional capital shares

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Fund's Institutional Capital Shares. Shareholder Fees Fees Paid
Directly From Your Investment Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price or redemption None proceeds, as
applicable) Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and
other Distributions) (as a None percentage of offering price) Redemption Fee (as
a percentage of amount redeemed, if applicable) None Exchange Fee None

<S> <C>

Annual Fund Operating Expenses (Before Waivers)1
Expenses That are Deducted From Fund Assets (as a percentage of average net assets)
Management Fee2 0.20%
Distribution (12b-1) Fee None
Shareholder Services Fee3 0.25%
Other Expenses 0.13%
Total Annual Fund Operating Expenses4 0.58%
-
1 Although not contractually obligated to do so, the adviser and shareholder services provider
expect to waive certain amounts. These are shown below along with the net
expenses the Fund's Institutional Capital Shares expects to pay for the
fiscal year ending January 31, 2000.
Total Waivers of Fund Expenses 0.30%
Total Actual Annual Fund Operating Expenses (after waivers) 0.28%
</TABLE>

3 The shareholder services provider expects to voluntarily reduce a portion of
the Fund's shareholder services fee. The shareholder services provider can
terminate this anticipated voluntary reduction at any time. The shareholder
services fee paid by the Fund's Institutional Capital Shares (after the
anticipated voluntary reduction) is expected to be 0.10% for the fiscal year
ending January 31, 2000.
4 For the fiscal year ended January 31, 1999, prior to the reorganization of
Prime Value Obligations Fund, the Former Fund, as a portfolio of Money Market
Obligations Trust, had Total Annual Fund Operating Expenses and Total Actual
Annual Fund Operating Expenses (after waivers) of 0.58% and 0.28%,
respectively.

<PAGE>

EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Institutional Capital Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Capital Shares for the time periods indicated and then redeem all of your Shares
at the end of those periods. The Example also assumes that your investment has a
5% return each year and that the Fund's Institutional Capital Shares operating
expenses are before waivers as estimated in the table and remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

- -------------------------------------------------------
1 Year $59
3 Years $186
5 Years $324
10 Years $726

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

<PAGE>

Bank Instruments

<PAGE>

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

<PAGE>

WHAT DO SHARES COST?
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. The Fund attempts to stabilize the net asset value (NAV) of its Shares at
$1.00 by valuing the portfolio securities using the amortized cost method. The
Fund cannot guarantee that its NAV will always remain at $1.00 per Share. The
Fund does not charge a front-end sales charge. NAV is determined at 12:00 noon
and 3:00 p.m. (Eastern time) and as of the end of regular trading (normally 4:00
p.m. Eastern time) each day the NYSE is open.

The required minimum initial investment for Fund Shares is $1,000,000. There
is no required minimum subsequent investment amount.

An account may be opened with a smaller amount as long as the $1,000,000
minimum is reached within one year of opening the account. An institutional
investor's minimum investment is calculated by combining all accounts it
maintains with the Fund. Accounts established through investment professionals
may be subject to a smaller minimum investment amount. Keep in mind that
investment professionals may charge you fees for their services in connection
with your Share transactions.

HOW IS THE FUND SOLD?
The Fund offers three share classes: Institutional Shares, Institutional Service
Shares and Institutional Capital Shares, each representing interests in a single
portfolio of securities. This prospectus relates only to Institutional Capital
Shares. Each share class has different expenses, which affect their performance.
Contact your investment professional or call 1-800-341-7400 for more information
concerning the other classes.

HOW TO PURCHASE SHARES
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND
o Establish your account with the Fund by submitting a completed New Account
Form; and o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

By Wire Send your wire to:

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

By Check
Make your check payable to The Federated Funds, note your account number on the
check, and mail it to:

<PAGE>

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

If you send your check by a private courier or overnight delivery service that
requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

By invest-by-phone
Once you establish an account, you may use the Fund's Invest-By-Phone privilege
for future Share purchases if you have an account with a bank that is an
Automated Clearing House member. To apply, call the Fund for an authorization
form. You may use Invest-By-Phone to purchase Shares approximately two weeks
from the date you file the form with Federated Shareholder Services Company.

<PAGE>

DIRECTLY FROM THE FUND

By Telephone
You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 3:00 p.m. (Eastern time) your redemption will be wired to
you the same day. You will not receive that day's dividend.

If you call after 3:00 p.m. (Eastern time) your redemption will be wired to
you the following business day. You will receive that day's dividend.

By Mail
You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Send requests by private courier or overnight delivery service to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

All requests must include:

o Fund Name and Share Class, account number and account registration;
o amount to be redeemed; and
o signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

Signature Guarantees Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed within
the last 30 days; or o a redemption is payable to someone other than the
shareholder(s) of record.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

ACCOUNT AND SHARE INFORMATION
account activity
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

The Adviser and other subsidiaries of Federated advise approximately 175
mutual funds and separate accounts, which totaled approximately $111 billion in
assets as of December 31, 1998. Federated was established in 1955 and is one of
the largest mutual fund investment managers in the United States with
approximately 1,900 employees. More than 4,000 investment professionals make
Federated Funds available to their customers.

While it is impossible to determine in advance all of the risks to the Fund,
the Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
Share transactions or Fund communications.

The Fund's service providers are making changes to their computer systems to
fix any Year 2000 problems. In addition, they are working to gather information
from third-party providers to determine their Year 2000 readiness.

<PAGE>

PRIME VALUE OBLIGATIONS FUND
A Portfolio of Money Market Obligations Trust

Institutional Capital shares

October __, 1999

Investment Company Act File No. 811-5950
Cusip ________________

__________ (10/99)

PRIME VALUE OBLIGATIONS FUND
A Portfolio of Money Market Obligations Trust

Institutional Service Shares

A money market mutual fund seeking to achieve current income consistent with
stability of principal and liquidity by investing in fixed income securities
maturing in 397 days or less.

Contents
Risk/Return
Summary What
are the Fund's
Fees and
Expenses? What
are the Fund's
Investment
Strategies?
What are the
Principal
Securities in
Which the Fund
Invests? What
are the
Specific Risks
of Investing in
the Fund?
What do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem Shares
Account and Share Information
Who Manages the Fund?
Financial Information
October __, 1999

<PAGE>

Risk/Return Bar Chart and Table

The Bar Chart and Performance Table below reflect historical performance data
for Institutional Service Shares of Prime Value Obligations Fund (the "Former
Fund") prior to its reorganization into the Fund, which is a newly created
portfolio of Money Market Obligations Trust (the "Trust"). On the date of the
reorganization, October __, 1999, the Former Fund was dissolved and its net
assets (inclusive of liabilities recorded on the Former Fund's records) were
transferred to the Fund.

The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 6%.

The `x' axis represents calculation periods from the earliest first full
calendar year end of the Former Fund's start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Service Shares for
each calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1998. The percentages noted are: 4.04%, 5.84%,
5.18%, 5.38% and 5.32%.

Historically, the Former Fund has maintained a constant $1.00 net asset value
per share. The bar chart shows the variability of the Former Fund's
Institutional Service Shares total returns on a calendar year-end basis.

The Former Fund's Institutional Service Shares are not sold subject to a sales
charge (load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Service Shares total return from January 1, 1999
to June 30, 1999 was ____%.

Within the period shown in the Chart, the Former Fund's Institutional Service
Shares highest quarterly return was 1.47% (quarter ended June 30, 1995). Its
lowest quarterly return was 0.76% (quarter ended March 31, 1994).

Average Annual Total Return Table

The following table represents the Former Fund's Institutional Service Shares
Average Annual Total Return for the calendar periods ended December 31, 1998.

Calendar Period Institutional
Service Shares
1 Year 5.32%
5 Years 5.15%
Start of Performance1 5.02%
1 The Former Fund's Institutional Service Shares start of performance date was
October 1, 1993.

The Former Fund's Institutional Service Shares 7- Day Net Yield as of 12/31/98
was 4.90%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield .

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?
PRIME VALUE OBLIGATIONS FUND - Institutional Service Shares

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Fund's Institutional Service Shares. Shareholder Fees Fees Paid
Directly From Your Investment Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price or redemption None proceeds, as
applicable) Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and
other Distributions) (as a None percentage of offering price) Redemption Fee (as
a percentage of amount redeemed, if applicable) None Exchange Fee None

<S> <C>

Annual Fund Operating Expenses (Before Waiver)1
Expenses That are Deducted From Fund Assets (as a percentage of average net assets)
Management Fee2 0.20%
Distribution (12b-1) Fee None
Shareholder Services Fee 0.25%
Other Expenses 0.11%
Total Annual Fund Operating Expenses3 0.56%
-
1 Although not contractually obligated to do so, the adviser expects to waive certain amounts.
These are shown below along with the net expenses the Fund's Institutional
Service Shares expects to pay for the fiscal year ending January 31, 2000.
Total Waiver of Fund Expenses 0.15%
Total Actual Annual Fund Operating Expenses (after waiver) 0.41%
</TABLE>

3 For the fiscal year ended January 31, 1999, prior to the reorganization of
Prime Value Obligations Fund, the Former Fund, as a portfolio of Money Market
Obligations Trust, had Total Annual Fund Operating Expenses and Total Actual
Annual Fund Operating Expenses (after waivers) of 0.56% and 0.41%,
respectively.

<PAGE>

EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Institutional Service Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Service Shares for the time periods indicated and then redeem all of your Shares
at the end of those periods. The Example also assumes that your investment has a
5% return each year and that the Fund's Institutional Service Shares operating
expenses are before waivers as estimated in the table and remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

- ------------------------------------------------------
1 Year $57
3 Years $179
5 Years $313
10 Years $701

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

Bank Instruments

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

<PAGE>

The required minimum initial investment for Fund Shares is $1,000,000. There
is no required minimum subsequent investment amount.

An account may be opened with a smaller amount as long as the $1,000,000
minimum is reached within one year of opening the account. An institutional
investor's minimum investment is calculated by combining all accounts it
maintains with the Fund. Accounts established through investment professionals
may be subject to a smaller minimum investment amount. Keep in mind that
investment professionals may charge you fees for their services in connection
with your Share transactions.

HOW IS THE FUND SOLD?
The Fund offers three share classes: Institutional Shares, Institutional Service
Shares and Institutional Capital Shares, each representing interests in a single
portfolio of securities. This prospectus relates only to Institutional Service
Shares. Each share class has different expenses, which affect their performance.
Contact your investment professional or call 1-800-341-7400 for more information
concerning the other classes.

<PAGE>

HOW TO PURCHASE SHARES
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND
o Establish your account with the Fund by submitting a completed New Account
Form; and o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

By Wire Send your wire to:

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

By Check
Make your check payable to The Federated Funds, note your account number on the
check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

If you send your check by a private courier or overnight delivery service that
requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

By invest-by-phone
Once you establish an account, you may use the Fund's Invest-By-Phone privilege
for future Share purchases if you have an account with a bank that is an
Automated Clearing House member. To apply, call the Fund for an authorization
form. You may use Invest-By-Phone to purchase Shares approximately two weeks
from the date you file the form with Federated Shareholder Services Company.

DIRECTLY FROM THE FUND

By Telephone
You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 3:00 p.m. (Eastern time) your redemption will be wired to
you the same day. You will not receive that day's dividend.

If you call after 3:00 p.m. (Eastern time) your redemption will be wired to
you the following business day. You will receive that day's dividend.

By Mail
You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Send requests by private courier or overnight delivery service to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

All requests must include:

o Fund Name and Share Class, account number and account registration;
o amount to be redeemed; and
o signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

Signature Guarantees Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed within
the last 30 days; or o a redemption is payable to someone other than the
shareholder(s) of record.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

<PAGE>

ACCOUNT AND SHARE INFORMATION
account activity
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

The Adviser and other subsidiaries of Federated advise approximately 175
mutual funds and separate accounts, which totaled approximately $111 billion in
assets as of December 31, 1998. Federated was established in 1955 and is one of
the largest mutual fund investment managers in the United States with
approximately 1,900 employees. More than 4,000 investment professionals make
Federated Funds available to their customers.

While it is impossible to determine in advance all of the risks to the Fund,
the Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
Share transactions or Fund communications.

The Fund's service providers are making changes to their computer systems to
fix any Year 2000 problems. In addition, they are working to gather information
from third-party providers to determine their Year 2000 readiness.

<PAGE>

PRIME VALUE OBLIGATIONS FUND
A Portfolio of Money Market Obligations Trust

Institutional Service Shares

October __, 1999

Investment Company Act File No. 811-5950
Cusip ________________

__________ (10/99)

PRIME VALUE OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust

institutional shares
institutional service shares
institutional capital shares

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This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectuses for Institutional Shares, Institutional
Service Shares, and Institutional Capital Shares of Prime Value Obligations Fund
(Fund), dated October __, 1999. Obtain the prospectuses without charge by
calling 1-800-341-7400.

<PAGE>

October __, 1999

<PAGE>

__________ (10/99)

<PAGE>

Contents
How is the Fund Organized? 1
Securities in Which the Fund Invests 1
What Do Shares Cost? 5
How is the Fund Sold? 5
Subaccounting Services 5
Redemption in Kind 6
Massachusetts Partnership Law 6
Account and Share Information 6
Tax Information 6
Who Manages and Provides Services to the Fund? 7
How Does the Fund Measure Performance? 10
Who is Federated Investors, Inc.? 12
Addresses 13

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HOW IS THE FUND ORGANIZED?

The Fund is a diversified portfolio of Money Market Obligations Trust (Trust).
The Trust is an open-end, management investment company that was established
under the laws of the Commonwealth of Massachusetts on October 3, 1988. The
Trust may offer separate series of shares representing interests in separate
portfolios of securities. The Fund, which was established on February 5, 1993,
was reorganized as a portfolio of the Trust on October __, 1999.

The Board of Trustees (the Board) has established three classes of shares of
the Fund, known as Institutional Shares, Institutional Service Shares and
Institutional Capital Shares (Shares). This SAI relates to all classes of
Shares. The Fund's investment adviser is Federated Investment Management Company
(Adviser).

SECURITIES IN WHICH THE FUND INVESTS

In pursuing its investment strategy, the Fund may invest in the following
securities for any purpose that is consistent with its investment objective.

SECURITIES DESCRIPTIONS AND TECHNIQUES

The following describes the types of fixed income securities in which the Fund
invests.

Treasury securities
Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the lowest
credit risks.

Agency securities
Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a GSE). The United
States supports some GSEs with its full faith and credit. Other GSEs receive
support through federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities. Agency securities are
generally regarded as having low credit risks, but not as low as treasury
securities.

The Fund treats mortgage backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against credit risks, it does not
reduce the market and prepayment risks of these mortgage backed securities.

Corporate debt securities
Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Fund may also purchase interests in bank loans to
companies. The credit risks of corporate debt securities vary widely among
issuers.

In addition, the credit risk of an issuer's debt security may vary based on
its priority for repayment. For example, higher ranking (senior) debt securities
have a higher priority than lower ranking (subordinated) securities. This means
that the issuer might not make payments on subordinated securities while
continuing to make payments on senior securities. In addition, in the event of
bankruptcy, holders of senior securities may receive amounts otherwise payable
to the holders of subordinated securities. Some subordinated securities, such as
trust preferred and capital securities notes, also permit the issuer to defer
payments under certain circumstances. For example, insurance companies issue
securities known as surplus notes that permit the insurance company to defer any
payment that would reduce its capital below regulatory requirements.

Commercial paper
Commercial paper is an issuer's obligation with a maturity of nine months or
less. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue
to obtain liquidity in this fashion, its commercial paper may default.

Demand instruments
Demand instruments are corporate debt securities that the issuer must repay upon
demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Fund treats
demand instruments as short-term securities, even though their stated maturity
may extend beyond one year.

Municipal securities
Municipal securities are issued by states, counties, cities and other political
subdivisions and authorities. Although many municipal securities are exempt from
federal income tax, the Fund may invest in taxable municipal securities.

Asset backed securities
Asset Backed Securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts
with maturities of less than ten years. However, almost any type of fixed income
assets (including other fixed income securities) may be used to create an asset
backed security. Asset backed securities may take the form of commercial paper,
notes, or pass-through certificates. Zero Coupon Securities Zero coupon
securities do not pay interest or principal until final maturity unlike debt
securities that provide periodic payments of interest (referred to as a coupon
payment). Investors buy zero coupon securities at a price below the amount
payable at maturity. The difference between the purchase price and the amount
paid at maturity represents interest on the zero coupon security. Investors must
wait until maturity to receive interest and principal, which increases the
market and credit risks of a zero coupon security. A zero coupon step-up
security converts to a coupon security before final maturity.

Bank instruments

Insurance contracts
Insurance contracts include guaranteed investment contracts, funding agreements
and annuities. The Fund treats these contracts as fixed income securities.

Credit enhancement
Common types of credit enhancement include guarantees, letters of credit, bond
insurance and surety bonds. Credit enhancement also includes arrangements where
securities or other liquid assets secure payment of a fixed income security. If
a default occurs, these assets may be sold and the proceeds paid to security's
holders. Either form of credit enhancement reduces credit risk by providing
another source of payment for a fixed income security.

Foreign securities
Foreign securities are securities of issuers based outside the United States.
The Fund considers an issuer to be based outside the United States if:

o it is organized under the laws of, or has a principal office located in,
another country;

o the principal trading market for its securities is in another country; or

o it (or its subsidiaries) derived in its most current fiscal year at least
50% of its total assets, capitalization, gross revenue or profit from goods
produced, services performed, or sales made in another country.

Foreign securities are primarily denominated in foreign currencies. Along with
the risks normally associated with domestic securities of the same type, foreign
securities are subject to currency risks and risks of foreign investing. Trading
in certain foreign markets is also subject to liquidity risks.

Investing in Securities of Other Investment Companies
The Fund may invest its assets in securities of other investment companies,
including the securities of affiliated money market funds, as an efficient means
of carrying out its investment policies and managing its uninvested cash.

Special Transactions

Repurchase Agreements
Repurchase Agreements are transactions in which a Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements with
banks and other recognized financial institutions, such as securities dealers,
which are deemed creditworthy by the Adviser.

The Fund's custodian or subcustodian is required to take possession of the
securities subject to repurchase agreements. The Adviser or subcustodian will
monitor the value of the underlying security each day to ensure that the value
of the security always equals or exceeds the repurchase price.

Repurchase Agreements are subject to credit risks.

Reverse Repurchase Agreements
Reverse Repurchase Agreements are repurchase agreements in which a Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because the Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.

Delayed Delivery Transactions
Delayed Delivery Transactions, including when issued transactions, are
arrangements in which the Fund buys securities for a set price, with payment and
delivery scheduled for a future time. During the period between purchase and
settlement, no payment is made by the Fund to the issuer and no interest accrues
to the Fund. The Fund records the transaction when it agrees to purchase the
securities and reflects their value in determining the price of its shares.
Settlement dates may be a month or more after entering into these transactions
so that the market values of the securities bought may vary from the purchase
prices. Therefore, delayed delivery transactions create interest raterisks for
the Fund. Delayed delivery transactions also involve credit risks in the event
of a counterparty default. These transactions create leverage risks.

Securities Lending
The Fund may lend portfolio securities to borrowers that the Adviser deems
creditworthy. In return, the Fund receives cash or liquid securities from the
borrower as collateral. The borrower must furnish additional collateral if the
market value of the loaned securities increases. Also, the borrower must pay the
Fund the equivalent of any dividends or interest received on loaned securities.
The Fund will reinvest cash collateral in securities that qualify as an
acceptable investment for the Fund. However, the Fund must pay interest to the
borrower for the use of any cash collateral.

Loans are subject to termination at the option of the Fund or the borrower. The
Fund will not have the right to vote on securities while they are on loan, but
it will terminate a loan in anticipation of any important vote. The Fund may pay
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash collateral to a securities
lending agent or broker.

Securities lending activities are subject to market risks and credit risks.

Asset Coverage
In order to secure its obligations in connection with derivatives contracts or
special transactions, the Fund will either own the underlying assets, enter into
an offsetting transaction or set aside readily marketable securities with a
value that equals or exceeds the Fund's obligations. Unless the Fund has other
readily marketable assets to set aside, it cannot trade assets used to secure
such obligations without entering into an offsetting transaction or terminating
the special transaction. This may cause the Fund to miss favorable trading
opportunities or to realize losses on derivative contracts or special
transactions.

Investment Ratings
A nationally recognized rating service's two highest rating categories are
determined without regard for sub-categories and gradations. For example,
securities rated A-1, A-1+, or A-2 by Standard & Poor's, Prime-1 or Prime-2 by
Moody's Investors Service, Inc., or F-1+, F-1, or F-2 by Fitch IBCA, Inc. 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 rating service can be treated as being in one of the two
highest short-term rating categories; currently, such securities must be rated
by two rating services in one of their two highest rating categories. See
"Regulatory Compliance."

INVESTMENT RISKS
There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.

Credit Risks
Fixed income securities generally compensate for greater credit risk by paying
interest at a higher rate. The difference between the yield of a security and
the yield of a U.S. Treasury security with a comparable maturity (the spread)
measures the additional interest paid for risk. Spreads may increase generally
in response to adverse economic or market conditions. A security's spread may
also increase if the security's rating is lowered, or the security is perceived
to have an increased credit risk. An increase in the spread will cause the price
of the security to decline. Credit risk includes the possibility that a party to
a transaction involving the Fund will fail to meet its obligations. This could
cause the Fund to lose the benefit of the transaction or prevent the Fund from
selling or buying other securities to implement its investment strategy.

Currency Risks
Exchange rates for currencies fluctuate daily. The combination of currency risk
and market risks tends to make securities traded in foreign markets more
volatile than securities traded exclusively in the U.S.

Risks of Foreign Investing
Foreign securities pose additional risks because foreign economic or political
conditions may be less favorable than those of the United States. Securities in
foreign markets may also be subject to taxation policies that reduce returns for
U.S. investors.

INVESTMENT LIMITATIONS

Issuing Senior Securities and Borrowing Money
The Fund may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the 1940 Act.

Concentration of Investments
The Fund will not make investments that will result in the concentration of its
investments in the securities of issuers primarily engaged in the same industry.
Government securities, municipal securities and bank instruments are not deemed
to constitute an industry. To conform to the current view of the SEC that only
domestic bank instruments may be excluded from industry concentration
limitations, as a matter of non-fundamental policy, the Fund will not exclude
foreign bank instruments from industry concentration limits as long as the
policy of the SEC remains in effect. As a non-fundamental operating policy, the
Fund will consider concentration to be the investment of more than 25% of the
value of its total assets in any one industry.

Investing in Commodities
The Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities.

The above limitations cannot be changed unless authorized by the "vote of a
majority of its outstanding voting securities," as defined by the Investment
Company Act. The following limitations, however, may be changed by the Board
without shareholder approval. Shareholders will be notified before any material
change in these limitations becomes effective.

Pledging Assets
The Fund will not mortgage, pledge or hypothecate any of its assets, provided
that this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.

Buying on Margin
The Fund will not purchase securities on margin provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities.

Investing in Other Investment Companies
The Fund may invest its assets in securities of other investment companies.

Regulatory Compliance
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this SAI, in order to comply with applicable laws and
regulations, including the provisions of and regulations under the Investment
Company Act of 1940. In particular, the Fund will comply with the various
requirements of Rule 2a-7 (the "Rule"), which regulates money market mutual
funds. For example, with limited exceptions, the Rule prohibits the investment
of more than 5% of the Fund's total assets in the securities of any one issuer,
although the Fund's investment limitation only requires such 5% diversification
with respect to 75% of its assets. The Fund will invest more than 5% of its
assets in any one issuer only under the circumstances permitted by the Rule. The
Fund will also 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 nationally recognized rating services, according to the Rule. The
Fund may change these operational policies to reflect changes in the laws and
regulations without the approval of its shareholders.

WHAT DO SHARES COST?

HOW IS THE FUND SOLD?

Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best- efforts basis.

Investment professionals receive such fees for providing distribution-related
or shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Fund or other special
events at recreational-type facilities, or items of material value. These
payments will be based upon the amount of Shares the investment professional
sells or may sell and/or upon the type and nature of sales or marketing support
furnished by the investment professional.

SUBACCOUNTING SERVICES

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REDEMPTION IN KIND

Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving the portfolio securities and selling them
before their maturity could receive less than the redemption value of the
securities and could incur certain transaction costs.

MASSACHUSETTS PARTNERSHIP LAW

ACCOUNT AND SHARE INFORMATION

Trustees may be removed by the Board or by shareholders at a special meeting.
A special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Trust's outstanding shares
of all series entitled to vote.

Shareholders owning 25% or more of outstanding Shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.

TAX INFORMATION

WHO MANAGES AND PROVIDES SERVICES TO THE FUND?

BOARD OF TRUSTEES
The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Trust for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Trust is comprised of 21
funds and the Federated Fund Complex is comprised of 54 investment companies,
whose investment advisers are affiliated with the Fund's Adviser.

As of October __, 1999, the Fund's Board and Officers as a group owned less
than 1% of the Fund's outstanding Institutional, Institutional Service, and
Institutional Capital Shares.

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Name Total
Birth Date Aggregate Compensation From
Address Principal Occupations Compensation Trust and Fund
Position With Trust for Past Five Years From Trust Complex
John F. Donahue*+ Chief Executive Officer and Director or Trustee of the $0 $0 for the
Birth Date: July 28, 1924 Federated Fund Complex; Chairman and Director, Trust and
Federated Investors Tower Federated Investors, Inc.; Chairman and Trustee, 54 other investment
1001 Liberty Avenue Federated Investment Management Company; Chairman and companies
Pittsburgh, PA Director, Federated Investment Counseling and in the Fund Complex
CHAIRMAN AND TRUSTEE Federated Global Investment Management Corp.;
Chairman, Passport Research, Ltd.
Thomas G. Bigley Director or Trustee of the Federated Fund Complex; $18, 351 $113,860.22 for the
Birth Date: February 3, 1934 Director, Member of Executive Committee, Children's Trust and 54 other
15 Old Timber Trail Hospital of Pittsburgh; Director, Robroy Industries, investment
Pittsburgh, PA Inc. (coated steel conduits/computer storage companies
TRUSTEE equipment); formerly: Senior Partner, Ernst & Young in the Fund Complex
LLP; Director, MED 3000 Group, Inc. (physician
practice management); Director, Member of Executive
Committee, University of Pittsburgh.

John F. Cunningham++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: March 5, 1943 Complex; Chairman, President and Chief Executive and 40 other
353 El Brillo Way Officer, Cunningham & Co., Inc. (strategic business investment
Palm Beach, FL consulting) ; Trustee Associate, Boston College; companies in the
TRUSTEE Director, EMC Corporation (computer storage systems); Fund Complex
formerly: Director, Redgate Communications.

Previous Positions: Chairman of the Board and Chief
Executive Officer, Computer Consoles, Inc.; President
and Chief Operating Officer, Wang Laboratories;
Director, First National Bank of Boston; Director,
Apollo Computer, Inc.

Peter E. Madden Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: March 16, 1942 formerly: Representative, Commonwealth of Trust and 54 other
One Royal Palm Way Massachusetts General Court; President, State Street investment
100 Royal Palm Way Bank and Trust Company and State Street Corporation. companies
Palm Beach, FL in the Fund Complex
TRUSTEE Previous Positions: Director, VISA USA and VISA
International; Chairman and Director,
Massachusetts Bankers Association; Director,
Depository Trust Corporation; Director, The
Boston Stock Exchange.
Charles F. Mansfield, Jr.++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: April 10, 1945 Complex; Management Consultant. and 43 other
80 South Road investment
Westhampton Beach, NY Previous Positions: Chief Executive Officer, PBTC companies in the
TRUSTEE International Bank; Partner, Arthur Young & Company Fund Complex
(now Ernst & Young LLP); Chief Financial
Officer of Retail Banking Sector, Chase
Manhattan Bank; Senior Vice President, Marine
Midland Bank; Vice President, Citibank;
Assistant Professor of Banking and Finance,
Frank G. Zarb School of Business, Hofstra
University..

John E. Murray, Jr., J.D., Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for
S.J.D. President, Law Professor, Duquesne University; the
Birth Date: December 20, 1932 Consulting Partner, Mollica & Murray; Director, Trust and 54 other
President, Duquesne Michael Baker Corp. (engineering, construction, investment
University operations, and technical services). companies
Pittsburgh, PA in the Fund Complex
TRUSTEE Previous Positions: Dean and Professor of Law,
University of Pittsburgh School of Law; Dean and
Professor of Law, Villanova University School of Law.
Marjorie P. Smuts Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for
Birth Date: June 21, 1935 Public Relations/Marketing/Conference Planning. the Trust and 54
4905 Bayard Street other investment
Pittsburgh, PA Previous Positions: National Spokesperson, Aluminum companies in the
TRUSTEE Company of America; television producer; business Fund Complex
owner.

John S. Walsh++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: November 28, 1957 Complex; President and Director, Heat Wagon, Inc. and 41 other
2007 Sherwood Drive (manufacturer of construction temporary heaters); investment
Valparaiso, IN President and Director, Manufacturers Products, Inc. companies in the
TRUSTEE (distributor of portable construction heaters); Fund Complex
President, Portable Heater Parts, a division of
Manufacturers Products, Inc.; Director, Walsh &
Kelly, Inc. (heavy (highway contractor); formerly:
Vice President, Walsh & Kelly, Inc.

<PAGE>

Deborah A. Cunningham Deborah A. Cunningham has been the Fund's portfolio $0 $0 for the Trust
Birth Date: September 15, manager since inception. She is Vice President of and 6 other
1959 the Trust. Ms. Cunningham joined Federated Investors investment
Federated Investors Tower in 1981 and has been a Senior Portfolio Manager and a companies in the
1001 Liberty Avenue Senior Vice President of the Fund's investment Fund Complex
Pittsburgh, PA adviser since 1997. Ms. Cunningham served as a
VICE PRESIDENT Portfolio Manager and a Vice President of the
investment adviser from 1993 until 1996. Ms.
Cunningham is a Chartered Financial Analyst and
received her M.S.B.A. in Finance from Robert Morris
College.

Mary Jo Ochson Mary Jo Ochson is Vice President of the Trust. Ms. $0 $0 for the Trust
Birth Date: September 12, Ochson joined Federated Investors in 1982 and has and 7 other
1953 been a Senior Portfolio Manager and a Senior Vice investment
Federated Investors Tower President of the Fund's investment adviser since companies in the
1001 Liberty Avenue 1996. From 1988 through 1995, Ms. Ochson served as a Fund Complex
Pittsburgh, PA Portfolio Manager and a Vice President of the Fund's
VICE PRESIDENT investment adviser. Ms. Ochson is a Chartered
Financial Analyst and received her M.B.A. in Finance
from the University of Pittsburgh.

Susan R. Hill Susan R. Hill is Vice President of the Trust. Ms. $0 $0 for the Trust
Birth Date: June 20, 1963 Hill joined Federated Investors in 1990 and has been and 9 other
Federated Investors Tower a Portfolio Manager since 1993 and a Vice President investment
1001 Liberty Avenue of the Fund's investment adviser since 1997. Ms. companies in the
Pittsburgh, PA Hill was a Portfolio Manager and an Assistant Vice Fund Complex
VICE PRESIDENT President of the investment adviser from 1994 until
1997. Ms. Hill is a Chartered Financial Analyst and
received an M.S. in Industrial Administration from
Carnegie Mellon University.
</TABLE>

+ Mr. Donahue is the father of J. Christopher Donahue, President of the
Trust.
++ Messrs. Cunningham, Mansfield and Walsh became members of the Board on
January 1, 1999. They did not earn any fees for serving the Fund Complex since
these fees are reported as of the end of the last calendar year. They did not
receive any fees as of the fiscal year end of the Trust.

INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund.

The Adviser is a wholly owned subsidiary of Federated.

Prior to November 15, 1996, Lehman Brothers Global Asset Management (former
adviser), New York, New York, served as the Fund's Adviser.

Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.

Prior to November 15, 1996, FDISG (former administrator), a subsidiary of
First Data Corporation, Boston, Massachusetts, served as the Fund's
administrator.

CUSTODIAN
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Foreign instruments purchased by the Fund are
held by foreign banks participating in a network coordinated by State Street
Bank.

FEES PAID BY THE FUND FOR SERVICES
For the Year Ended January 31 1999 1998 1997
Advisory Fee Earned2 $3,264,534$1,821,778 $202,835
Advisory Fee Reduction 2,420,288 166,441
1,553,105
Administrative Fee3 1,230,729 687,478 78,894
Shareholder Services Fee
Institutional Shares 0
Institutional Service Shares 960,721
Institutional Capital Shares 117,109

1 For the period from November 15, 1996 to January 31, 1997.
2 For the period from February 1, 1996 to November 14, 1996, the former adviser
earned $1,965,709. 3 For the period from February 1, 1996 to November 14, 1996,
the former administrator earned $757,667. Fees are allocated among classes based
on their pro rata share of Fund assets, except for shareholder services fees,
which are borne only by the applicable class of Shares.

For the fiscal years ended January 31, 1999, 1998 and 1997, fees paid by the
Fund for services are prior to the Fund's reorganization as a portfolio of the
Trust on October __, 1999.

HOW DOES THE FUND MEASURE PERFORMANCE?

The Fund may advertise Share performance by using the Securities and Exchange
Commission's (SEC) standard method for calculating performance applicable to all
mutual funds. The SEC also permits this standard performance information to be
accompanied by non-standard performance information.

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

Average Annual Total Returns and Yield
Total returns given for the one-year, five-year and the start of performance
periods ended January 31, 1999.

Yield and Effective Yield given for the 7-day period ended January 31, 1999.

Performance of the Fund shown is prior to its reorganization as a portfolio of
the Trust on October __, 1999.

Share Class 7-Day 1 5 Start of
Period Year Years Performance on
February 8, 1993
Institutional
Shares:
Total Return 5.53% 5.45% 5.08%
Yield 4.97%
Effective Yield 5.09%

Share Class 7-Day 1 5 Start of
Period Year Years Performance on
September 1, 1993
Institutional
Service Shares:
Total Return 5.27% 5.18% 5.02%
Yield 4.72%
Effective Yield 4.83%

Share Class 7-Day 1 5 Start of
Period Year Years Performance on
February 8, 1993
Institutional
Capital Shares:
Total Return 5.40% 5.30% 4.94%
Yield 4.85%
Effective Yield 4.96%

YIELD
The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated 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 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. The effective yield is calculated by compounding the unannualized
base-period return by: adding one to the base-period return, raising the sum to
the 365/7th power; and subtracting one from the result.

PERFORMANCE COMPARISONS
Advertising and sales literature may include:

o........references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;

o discussions of economic, financial and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Funds; and

o information about the mutual fund industry from sources such as the Investment
Company Institute.

The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

You may use financial publications and/or indices to obtain a more complete
view of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Fund uses in advertising may include:

Lipper Analytical Services, Inc.
Lipper Analytical Services, Inc. ranks funds in various fund categories based on
total return, which assumes the reinvestment of all
income dividends and capital gains distributions, if any.

IBC/Donoghue's Money Fund Report
IBC/Donoghue's Money Fund Report publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.

Money
Money, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.

WHO IS FEDERATED INVESTORS, INC.?

Federated Funds overview

Corporate Bond Funds
In the corporate bond sector, as of December 31, 1998, Federated managed 9 money
market funds and 15 bond funds with assets approximating $22.8 billion and $7.1
billion, respectively. Federated's corporate bond decision making--based on
intensive, diligent credit analysis--is backed by over 26 years of experience in
the corporate bond sector. In 1972, Federated introduced one of the first
high-yield bond funds in the industry. In 1983, Federated was one of the first
fund managers to participate in the asset backed securities market, a market
totaling more than $209 billion.

Government Funds
In the government sector, as of December 31, 1998, Federated managed 9 mortgage
backed, 5 government/agency, and 19 government money market mutual funds, with
assets approximating $5.3 billion, $1.8 billion, and $41.6 billion,
respectively. Federated trades approximately $425 million in U.S. government and
mortgage backed securities daily and places approximately $25 billion in
repurchase agreements each day. Federated introduced the first U.S. government
fund to invest in U.S. government bond securities in 1969. Federated has been a
major force in the short- and intermediate-term government markets since 1982
and currently manages approximately $43.2 billion in government funds within
these maturity ranges.

Federated Clients Overview
Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:

FINANCIAL INFORMATION

The Financial Statements for the Former Fund for the fiscal year ended January
31, 1999, are for prior to the Fund's reorganization as a portfolio of the Trust
on October __, 1999.

<PAGE>

ADDRESSES

PRIME VALUE OBLIGATIONS FUND
Institutional Shares
Institutional Service Shares
Institutional Capital Shares

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

Distributor
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Investment Adviser
Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Custodian
State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600

Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Independent Auditors
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072

PRIME CASH OBLIGATIONS FUND
A Portfolio of Money Market Obligations Trust

Institutional Service Shares

A money market mutual fund seeking to achieve current income consistent with
stability of principal and liquidity by investing in fixed income securities
maturing in 397 days or less.

Contents
Risk/Return
Summary What
are the Fund's
Fees and
Expenses? What
are the Fund's
Investment
Strategies?
What are the
Principal
Securities in
Which the Fund
Invests? What
are the
Specific Risks
of Investing in
the Fund?
What do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem Shares
Account and Share Information
Who Manages the Fund?
Financial Information
october __, 1999

<PAGE>

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
All mutual funds take investment risks.Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund. 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.

<PAGE>

Risk/Return Bar Chart and Table
The Bar Chart and Performance Table below reflect historical performance data
for Institutional Service Shares of Prime Cash Obligations Fund (the "Former
Fund") prior to its reorganization into the Fund, which is a newly created
portfolio of Money Market Obligations Trust (the "Trust"). On the date of the
reorganization, ________, 1999, the Former Fund was dissolved and its net assets
(inclusive of liabilities recorded on the Former Fund's records) were
transferred to the Fund.

The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1.5% up to 6%.

The `x' axis represents calculation periods from the earliest first full
calendar year end of the Former Fund's start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Service Shares for
each calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1998. The percentages noted are: 4.03%, 5.82%,
5.15%, 5.31% and 5.29%.

The Former Fund's Institutional Service Shares were not sold subject to a sales
charge (load). The total returns displayed above are based upon the net asset
value.

The Former Fund's Institutional Service Shares total return from January 1, 1999
to June 30, 1999 was ____%.

Within the period shown in the Chart, the Former Fund's Institutional Service
Shares highest quarterly return was 1.46% (quarter ended June 30, 1995). Its
lowest quarterly return was 0.75% (quarter ended March 31, 1994).

Average Annual Total Return Table
The following table represents the Former Fund's Institutional Service Shares
Average Annual Total Returns for the calendar periods ending December 31, 1998.

Institutional Service
Calendar Period Shares
1 Year 5.29%
5 Years 5.12%
Start of Performance1 4.98%
1 The Former Fund's Institutional Service Shares start of performance date was
September 2, 1993.

The Former Fund's Institutional Service Shares 7-Day Net Yield as of December
31, 1998 was 4.85%.

Investors may call the Fund at 1-800-341-7400 to acquire the current 7-Day Net
Yield.

Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
rewards.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?
PRIME cash OBLIGATIONS FUND-Institutional service shares

FEES AND EXPENSES

<S> <C>

- --------------------------------------------------------------------------------
1 Although not contractually obligated to do so, the adviser expects to waive
certain amounts. These are shown below along with the net expenses the Fund's
Institutional Service Shares expects to pay for the fiscal year ending
January 31, 2000.
Total Waivers of Fund Expenses 0.12% Total Actual Annual Fund Operating Expenses
(after waivers) 0.43% 2 The adviser expects to voluntarily waive a portion of
the management fee. The adviser can terminate
this anticipated voluntary waiver at any time. The management fee paid by the
Fund's Institutional Service Shares (after the anticipated voluntary waiver)
is expected to be 0.08% for the fiscal year ending January 31, 2000.
3 For the fiscal year ended January 31, 1999, prior to the reorganization of
Prime Cash Obligations Fund, the Former Fund, as a portfolio of Money Market
Obligations Trust, had Total Annual Fund Operating Expenses and Total Actual
Annual Fund Operating Expenses (after waivers) of 0.55% and 0.43%,
respectively.

<PAGE>

EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Institutional Service Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Service Shares for the time periods indicated and then redeem all of your Shares
at the end of those periods. The Example also assumes that your investment has a
5% return each year and that the Fund's Institutional Service Shares operating
expenses are before waivers as estimated in the table and remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

- ----------------------------------------------------
1 Year $ 56
3 Years $176
5 Years $307
10 Years $689

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high-quality fixed income securities maturing
in 397 days or less. The average maturity of the Fund's portfolio is 90 days or
less. The Fund's investment adviser (Adviser) actively manages the fund's
portfolio, seeking to limit the credit risk taken by the Fund and provide
enhanced returns.

Bank Instruments

Investment Ratings
The securities in which the Fund invests must be rated in the highest short-term
rating category by one or more nationally recognized rating services or be of
comparable quality to securities having such ratings.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

The required minimum initial investment for Fund Shares is $1,000,000. There is
no required minimum subsequent investment amount.

HOW IS THE FUND SOLD?
The Fund offers three share classes: Institutional Shares, Institutional Service
Shares and Institutional Capital Shares, each representing interests in a single
portfolio of securities. This prospectus relates only to Institutional Service
Shares. Each share class has different expenses, which affect their performance.
Contact your investment professional or call 1-800-341-7400 for more information
concerning the other classes.

The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to institutions acting in an agency or fiduciary capacity or
individuals, directly or through investment professionals. The Distributor and
its affiliates may pay out of their assets other amounts (including items of
material value) to investment professionals for marketing and servicing Shares.
The Distributor is a subsidiary of Federated Investors, Inc. (Federated).

HOW TO PURCHASE SHARES
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND
o Establish your account with the Fund by submitting a completed New Account
Form; and o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

By Wire Send your wire to:

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

By Check
Make your check payable to The Federated Funds, note your account number on the
check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

If you send your check by a private courier or overnight delivery service that
requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

By invest-by-phone
Once you establish an account, you may use the Fund's Invest-By-Phone privilege
for future Share purchases if you have an account with a bank that is an
Automated Clearing House member. To apply, call the Fund for an authorization
form. You may use Invest-By-Phone to purchase Shares approximately two weeks
from the date you file the form with Federated Shareholder Services Company.

<PAGE>

DIRECTLY FROM THE FUND

By Telephone
You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 3:00 p.m. (Eastern time) your redemption will be wired to you
the same day. You will not receive that day's dividend.

If you call after 3:00 p.m. (Eastern time) your redemption will be wired to you
the following business day. You will receive that day's dividend.

By Mail
You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Send requests by private courier or overnight delivery service to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

All requests must include:

o Fund Name and Share Class, account number and account registration;
o amount to be redeemed; and
o signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

Signature Guarantees Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of record;

o your redemption will be sent to an address of record that was changed within
the last 30 days; or o a redemption is payable to someone other than the
shareholder(s) of record.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

ACCOUNT AND SHARE INFORMATION
account activity
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

<PAGE>

However, this may be difficult with certain issuers. For example, funds dealing
with foreign service providers or investing in foreign securities will have
difficulty determining the Year 2000 readiness of those entities. The financial
impact of these issues for the Fund is still being determined. There can be no
assurance that potential Year 2000 problems would not have a material adverse
effect on the Fund.

FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
The Fund's Financial Highlights are contained in the Former Fund's Prospectus
which serves as the Annual Report, dated March 31, 1999 and is incorporated by
reference and must precede or accompany this document.

<PAGE>

PRIME CASH OBLIGATIONS FUND
A Portfolio of Money Market Obligations Trust

Institutional service shares

September __, 1999

A Statement of Additional Information (SAI) dated September __, 1999, is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is contained in the Former Fund's Annual and Semi-Annual
Reports to shareholders and will be contained in the Fund's Annual and
Semi-Annual Reports as they become available. To obtain the SAI, the Annual
Report, Semi-Annual Report and other information without charge and make
inquiries, call your investment professional or the Fund at 1-800- 341-7400.

Investment Company Act File No. 811-5950
Cusip ________________

__________ (9/99)

PRIME CASH OBLIGATIONS FUND
A Portfolio of Money Market Obligations Trust

Institutional Shares

A money market mutual fund seeking to achieve current income consistent with
stability of principal and liquidity by investing in fixed income securities
maturing in 397 days or less.

Contents
Risk/Return
Summary What
are the Fund's
Fees and
Expenses? What
are the Fund's
Investment
Strategies?
What are the
Principal
Securities in
Which the Fund
Invests? What
are the
Specific Risks
of Investing in
the Fund?
What do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem Shares
Account and Share Information
Who Manages the Fund?
Financial Information
october __, 1999

<PAGE>

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
All mutual funds take investment risks.Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund. 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.

<PAGE>

Risk/Return Bar Chart and Table
The Bar Chart and Performance Table below reflect historical performance data
for Institutional Shares of Prime Cash Obligations Fund (the "Former Fund")
prior to its reorganization into the Fund, which is a newly created portfolio of
Money Market Obligations Trust (the "Trust"). On the date of the reorganization,
________, 1999, the Former Fund was dissolved and its net assets (inclusive of
liabilities recorded on the Former Fund's records) were transferred to the Fund.

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Institutional Shares of the Former Fund as of the
calendar year-end for each of five years.

The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 2% up to 8%.

The `x' axis represents calculation periods from the earliest first full
calendar year end of the Former Fund's start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Shares for each
calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1998. The percentages noted are: 4.29%, 6.08%,
5.41%, 5.57% and 5.56%.

The Former Fund's Institutional Shares were not sold subject to a sales charge
(load). The total returns displayed above are based upon the net asset value.

The Former Fund's Institutional Shares total return from January 1, 1999 to June
30, 1999 was ____%.

Average Annual Total Return Table
The following table represents the Former Fund's Institutional Shares Average
Annual Total Returns for the calendar periods ending December 31, 1998.

Calendar Period Institutional Shares
1 Year 5.56%
5 Years 5.38%
Start of Performance1 5.05%
1 The Former Fund's Institutional Shares start of performance date was February
8, 1993.

The Former Fund's Institutional Shares 7-Day Net Yield as of December 31, 1998
was 5.10%.

Investors may call the Fund at 1-800-341-7400 to acquire the current 7-Day Net
Yield.

Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
rewards.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?
PRIME cash OBLIGATIONS FUND-Institutional shares

FEES AND EXPENSES

<S> <C>

- -----------------------------------------------------------------------------------------------------------
</TABLE>

1 Although not contractually obligated to do so, the adviser and shareholder
services provider expect to waive certain amounts. These are shown below
along with the net expenses the Fund's Institutional Shares expects to pay
for the fiscal year ending January 31, 2000.
Total Waivers of Fund Expenses 0.37% Total Actual Annual Fund Operating Expenses
(after waivers) 0.18% 2 The adviser expects to voluntarily waive a portion of
the management fee. The adviser can terminate
this anticipated voluntary waiver at any time. The management fee paid by the
Fund's Institutional Shares (after the anticipated voluntary waiver) is
expected to be 0.08% for the fiscal year ending January 31, 2000.
3 The shareholder services provider expects to voluntarily reduce a portion of
the Fund's shareholder services fee. The shareholder services provider can
terminate this anticipated voluntary reduction at any time. The shareholder
services fee paid by the Fund's Institutional Shares (after the anticipated
voluntary reduction) is expected to be 0.00% for the fiscal year ending
January 31, 2000.
4 For the fiscal year ended January 31, 1999, prior to the reorganization of
Prime Cash Obligations Fund, the Former Fund, as a portfolio of Money Market
Obligations Trust, had Total Annual Fund Operating Expenses and Total Actual
Annual Fund Operating Expenses (after waivers) of 0.55% and 0.18%,
respectively.

<PAGE>

EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Institutional Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional Shares
for the time periods indicated and then redeem all of your Shares at the end of
those periods. The Example also assumes that your investment has a 5% return
each year and that the Fund's Institutional Shares operating expenses are before
waivers as estimated in the table and remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:

- ----------------------------------------------------
1 Year $ 56
3 Years $176
5 Years $307
10 Years $689

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high-quality fixed income securities maturing
in 397 days or less. The average maturity of the Fund's portfolio is 90 days or
less. The Fund's investment adviser (Adviser) actively manages the fund's
portfolio, seeking to limit the credit risk taken by the Fund and provide
enhanced returns.

<PAGE>

Bank Instruments

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

The required minimum initial investment for Fund Shares is $1,000,000. There is
no required minimum subsequent investment amount.

HOW IS THE FUND SOLD?
The Fund offers three share classes: Institutional Shares, Institutional Service
Shares and Institutional Capital Shares, each representing interests in a single
portfolio of securities. This prospectus relates only to Institutional Shares.
Each share class has different expenses, which affect their performance. Contact
your investment professional or call 1-800-341-7400 for more information
concerning the other classes.

The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to institutions acting in an agency or fiduciary capacity or
individuals, directly or through investment professionals. The Distributor and
its affiliates may pay out of their assets other amounts (including items of
material value) to investment professionals for marketing and servicing Shares.
The Distributor is a subsidiary of Federated Investors, Inc. (Federated).

HOW TO PURCHASE SHARES
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND
o Establish your account with the Fund by submitting a completed New Account
Form; and o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

By Wire Send your wire to:

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

By Check
Make your check payable to The Federated Funds, note your account number on the
check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

If you send your check by a private courier or overnight delivery service that
requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

By invest-by-phone
Once you establish an account, you may use the Fund's Invest-By-Phone privilege
for future Share purchases if you have an account with a bank that is an
Automated Clearing House member. To apply, call the Fund for an authorization
form. You may use Invest-By-Phone to purchase Shares approximately two weeks
from the date you file the form with Federated Shareholder Services Company.

<PAGE>

DIRECTLY FROM THE FUND

By Telephone
You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 3:00 p.m. (Eastern time) your redemption will be wired to you
the same day. You will not receive that day's dividend.

If you call after 3:00 p.m. (Eastern time) your redemption will be wired to you
the following business day. You will receive that day's dividend.

By Mail
You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Send requests by private courier or overnight delivery service to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

All requests must include:

o Fund Name and Share Class, account number and account registration;
o amount to be redeemed; and
o signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

Signature Guarantees Signatures must be guaranteed if:
o your redemption will be sent to an address other than the address of
record;
o your redemption will be sent to an address of record that was changed within
the last 30 days; or o a redemption is payable to someone other than the
shareholder(s) of record.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

ACCOUNT AND SHARE INFORMATION
account activity
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

<PAGE>

However, this may be difficult with certain issuers. For example, funds dealing
with foreign service providers or investing in foreign securities will have
difficulty determining the Year 2000 readiness of those entities. The financial
impact of these issues for the Fund is still being determined. There can be no
assurance that potential Year 2000 problems would not have a material adverse
effect on the Fund.

<PAGE>

PRIME CASH OBLIGATIONS FUND
A Portfolio of Money Market Obligations Trust

Institutional shares

october __, 1999

Investment Company Act File No. 811-5950
Cusip ________________

__________ (10/99)

PRIME CASH OBLIGATIONS FUND
A Portfolio of Money Market Obligations Trust

Institutional Capital Shares

A money market mutual fund seeking to achieve current income consistent with
stability of principal and liquidity by investing in fixed income securities
maturing in 397 days or less.

Contents
Risk/Return
Summary What
are the Fund's
Fees and
Expenses? What
are the Fund's
Investment
Strategies?
What are the
Principal
Securities in
Which the Fund
Invests? What
are the
Specific Risks
of Investing in
the Fund?
What do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem Shares
Account and Share Information
Who Manages the Fund?
Financial Information
october __, 1999

<PAGE>

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
All mutual funds take investment risks.Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund. 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.

<PAGE>

Risk/Return Bar Chart and Table
The Bar Chart and Performance Table below reflect historical performance data
for Institutional Capital Shares of Prime Cash Obligations Fund (the "Former
Fund") prior to its reorganization into the Fund, which is a newly created
portfolio of Money Market Obligations Trust (the "Trust"). On the date of the
reorganization, ________, 1999, the Former Fund was dissolved and its net assets
(inclusive of liabilities recorded on the Former Fund's records) were
transferred to the Fund.

The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 2% up to 10%.

The `x' axis represents calculation periods from the earliest first full
calendar year end of the Former Fund's start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features four distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Capital Shares for
each calendar year is stated directly at the top of each respective bar, for the
calendar years 1995 through 1998. The percentages noted are: 5.93%, 5.26%, 5.45%
and 5.43%.

The Former Fund's Institutional Capital Shares were not sold subject to a sales
charge (load). The total returns displayed above are based upon net asset value.

The Former Fund's Institutional Capital Shares total return from January 1, 1999
to June 30, 1999 was ____%.

Average Annual Total Return Table
The following table represents the Former Fund's Institutional Capital Shares
Average Annual Total Returns for the calendar periods ending December 31, 1998.

Institutional Captial Shares
Calendar Period
1 Year 5.43%
Start of Performance1 5.49%
1 The Former Fund's Institutional Capital Shares start of performance date was
October 6, 1994.

The Former Fund's Institutional Capital Shares 7-Day Net Yield as of December
31, 1998 was 4.98%.

Investors may call the Fund at 1-800-341-7400 to acquire the current 7-Day Net
Yield.

Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
rewards.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?
PRIME cash OBLIGATIONS FUND-Institutional capital shares

FEES AND EXPENSES

<S> <C>

- -----------------------------------------------------------------------------------------------------------
</TABLE>

1 Although not contractually obligated to do so, the adviser and shareholder
services provider expect to waive certain amounts. These are shown below
along with the net expenses the Fund's Institutional Capital Shares expects
to pay for the fiscal year ending January 31, 2000.
Total Waivers of Fund Expenses 0.27% Total Actual Annual Fund Operating Expenses
(after waivers) 0.30% 2 The adviser expects to voluntarily waive a portion of
the management fee. The adviser can terminate
this anticipated voluntary waiver at any time. The management fee paid by the
Fund's Institutional Capital Shares (after the anticipated voluntary waiver)
is expected to be 0.08% for the fiscal year ending January 31, 2000.
3 The shareholder services provider expects to voluntarily reduce a portion of
the Fund's shareholder services fee. The shareholder services provider can
terminate this anticipated voluntary reduction at any time. The shareholder
services fee paid by the Fund's Institutional Capital Shares (after the
anticipated voluntary reduction) is expected to be 0.10% for the fiscal year
ending January 31, 2000.
4 For the fiscal year ended January 31, 1999, prior to the reorganization of
Prime Cash Obligations Fund, the Former Fund, as a portfolio of Money Market
Obligations Trust, had Total Annual Fund Operating Expenses and Total Actual
Annual Fund Operating Expenses (after waivers) of 0.57% and 0.30%,
respectively.

<PAGE>

EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Institutional Capital Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Capital Shares for the time periods indicated and then redeem all of your Shares
at the end of those periods. The Example also assumes that your investment has a
5% return each year and that the Fund's Institutional Capital Shares operating
expenses are before waivers as estimated in the table and remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

- ----------------------------------------------------
1 Year $ 58
3 Years $183
5 Years $318
10 Years $714

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high-quality fixed income securities maturing
in 397 days or less. The average maturity of the Fund's portfolio is 90 days or
less. The Fund's investment adviser (Adviser) actively manages the fund's
portfolio, seeking to limit the credit risk taken by the Fund and provide
enhanced returns.

Bank Instruments

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

The required minimum initial investment for Fund Shares is $1,000,000. There is
no required minimum subsequent investment amount.

The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to institutions acting in an agency or fiduciary capacity or
individuals, directly or through investment professionals. The Distributor and
its affiliates may pay out of their assets other amounts (including items of
material value) to investment professionals for marketing and servicing Shares.
The Distributor is a subsidiary of Federated Investors, Inc. (Federated).

HOW TO PURCHASE SHARES
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND
o Establish your account with the Fund by submitting a completed New Account
Form; and o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

By Wire Send your wire to:

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

By Check
Make your check payable to The Federated Funds, note your account number on the
check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

If you send your check by a private courier or overnight delivery service that
requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

By invest-by-phone
Once you establish an account, you may use the Fund's Invest-By-Phone privilege
for future Share purchases if you have an account with a bank that is an
Automated Clearing House member. To apply, call the Fund for an authorization
form. You may use Invest-By-Phone to purchase Shares approximately two weeks
from the date you file the form with Federated Shareholder Services Company.

<PAGE>

DIRECTLY FROM THE FUND

By Telephone
You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 3:00 p.m. (Eastern time) your redemption will be wired to you
the same day. You will not receive that day's dividend.

If you call after 3:00 p.m. (Eastern time) your redemption will be wired to you
the following business day. You will receive that day's dividend.

By Mail
You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Send requests by private courier or overnight delivery service to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

All requests must include:

o Fund Name and Share Class, account number and account registration;
o amount to be redeemed; and
o signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

Signature Guarantees Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed within
the last 30 days; or o a redemption is payable to someone other than the
shareholder(s) of record.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

<PAGE>

ACCOUNT AND SHARE INFORMATION
account activity
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

<PAGE>

However, this may be difficult with certain issuers. For example, funds dealing
with foreign service providers or investing in foreign securities will have
difficulty determining the Year 2000 readiness of those entities. The financial
impact of these issues for the Fund is still being determined. There can be no
assurance that potential Year 2000 problems would not have a material adverse
effect on the Fund.

<PAGE>

PRIME CASH OBLIGATIONS FUND
A Portfolio of Money Market Obligations Trust

Institutional Capital shares

September __, 1999

Investment Company Act File No. 811-5950
Cusip ________________

__________ (9/99)

PRIME CASH OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust

institutional shares
institutional service shares
institutional capital shares

<PAGE>

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectuses for Institutional Shares, Institutional
Service Shares and Institutional Capital Shares of Prime Cash Obligations Fund
(Fund), dated October ____, 1999. Obtain the prospectuses without charge by
calling 1-800-341-7400.

<PAGE>

Contents
How is the Fund Organized? 1
Securities in Which the Fund Invests 1
What Do Shares Cost? 5
How is the Fund Sold? 5
Subaccounting Services 5
Redemption in Kind 5
Massachusetts Partnership Law 6
Account and Share Information 6
Tax Information 6
Who Manages and Provides Services to the Fund? 7
How Does the Fund Measure Performance? 10
Who is Federated Investors, Inc.? 12
Addresses 13

october ____, 1999

G01881-11 (10/99)

<PAGE>

HOW IS THE FUND ORGANIZED?

The Fund is a diversified portfolio of Money Market Obligations Trust (Trust).
The Trust is an open-end, management investment company that was established
under the laws of the Commonwealth of Massachusetts on October 3, 1998. The
Trust may offer separate series of shares representing interests in separate
portfolios of securities. The Fund, which was established on November 16, 1992,
was reorganized as a portfolio of the Trust on October ____, 1999.

The Board of Trustees (the Board) has established three classes of shares of the
Fund, known as Institutional Shares, Institutional Service Shares and
Institutional Capital Shares (Shares). This SAI relates to all classes of
Shares. The Fund's investment adviser is Federated Investment Management Company
(Adviser).

SECURITIES IN WHICH THE FUND INVESTS

In pursuing its investment strategy, the Fund may invest in the following
securities for any purpose that is consistent with its investment objective.

SECURITIES DESCRIPTIONS AND TECHNIQUES

Fixed income securities
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.

A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemtpion. Securities with higher risks generally have
higher yields.

The following describes the types of fixed income securities in which the Fund
invests.

Treasury Securities
Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the lowest
credit risks.

Agency Securities
Agency securities are issued or guaranteed by a federal agency or other
government-sponsored entity acting under federal authority (a GSE). The United
States supports some GSEs with its full faith and credit. Other GSEs receive
support through federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities. Agency securities are
generally regarded as having low credit risks, but not as low as treasury
securities.

In addition, the credit risk of an issuer's debt security may vary based on its
priority for repayment. For example, higher ranking (senior) debt securities
have a higher priority than lower ranking (subordinated) securities. This means
that the issuer might not make payments on subordinated securities while
continuing to make payments on senior securities. In addition, in the event of
bankruptcy, holders of senior securities may receive amounts otherwise payable
to the holders of subordinated securities. Some subordinated securities, such as
trust preferred and capital securities notes, also permit the issuer to defer
payments under certain circumstances. For example, insurance companies issue
securities known as surplus notes that permit the insurance company to defer any
payment that would reduce its capital below regulatory requirements.

Commercial Paper
Commercial paper is an issuer's obligation with a maturity of less than
nine months. Companies typically issue commercial paper to pay for
current expenditures. Most issuers constantly reissue their commercial
paper and use the proceeds (or bank loans) to repay maturing paper. If
the issuer cannot continue to obtain liquidity in this fashion, its
commercial paper may default.

Demand Instruments
Demand instruments are corporate debt securities that the issuer must
repay upon demand. Other demand instruments require a third party, such
as a dealer or bank, to repurchase the security for its face value upon
demand. The Fund treats demand instruments as short-term securities,
even though their stated maturity may extend beyond one year.

Municipal Securities
Municipal securities are issued by states, counties, cities and other
political subdivisions and authorities. Although many municipal securities
are exempt from federal income tax, the Fund may invest in taxable
municipal securities.

Asset Backed Securities
Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts
with maturities of less than ten years. However, almost any type of fixed income
assets (including other fixed income securities) may be used to create an asset
backed security. Asset backed securities may take the form of commercial paper,
notes, or pass through certificates.

Zero Coupon Securities
Zero coupon securities do not pay interest or principal until final maturity
unlike debt securities that provide periodic payments of interest (referred to
as a coupon payment). Investors buy zero coupon securities at a price below the
amount payable at maturity. The difference between the purchase price and the
amount paid at maturity represents interest on the zero coupon security.
Investors must wait until maturity to receive interest and principal, which
increases the market and credit risks of a zero coupon security. A zero coupon
step-up security converts to a coupon security before final maturity.

Bank Instruments

Insurance Contracts
Insurance contracts include guaranteed investment contracts, funding agreements
and annuities. The Fund treats these contracts as fixed income securities.

Credit Enhancement
Common types of credit enhancement include guarantees, letters of credit, bond
insurance and surety bonds. Credit enhancement also includes arrangements where
securities or other liquid assets secure payment of a fixed income security. If
a default occurs, these assets may be sold and the proceeds paid to security's
holders. Either form of credit enhancement reduces credit risks by providing
another source of payment for a fixed income security.

Foreign Securities
Foreign securities are securities of issuers based outside the United States.
The Fund considers an issuer to be based outside the United States if: o it is
organized under the laws of, or has a principal office located in, another
country; o the principal trading market for its securities is in another
country; or o it (or its subsidiaries) derived in its most current fiscal year
at least 50% of its total assets, capitalization, gross
revenue or profit from goods produced, services performed, or sales made in
another country.

Special Transactions

Repurchase Agreements are subject to credit risks.

Delayed Delivery Transactions
Delayed delivery transactions, including when issued transactions, are
arrangements in which the Fund buys securities for a set price, with payment and
delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. The Fund records the transaction when it
agrees to buy the securities and reflects their value in determining the price
of its shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, delayed delivery transactions create interest
rate risks for the Fund. Delayed delivery transactions also involve credit risks
in the event of a counterparty default.

The Fund will reinvest cash collateral in securities that qualify as an
acceptable investment for the Fund. However, the Fund must pay interest to the
borrower for the use of cash collateral.

Securities lending activities are subject to interest rate risks and credit
risks.

Investment Ratings
A nationally recognized rating service's highest rating category is determined
without regard for sub-categories and gradations. For example, securities rated
A-1 or A-1+ by Standard & Poor's, Prime-1 by Moody's Investors Service, Inc.
("Moody's"), or F-1 (+ or -) by Fitch IBCA, Inc. are all considered rated in the
highest short-term rating category. The Fund will follow applicable regulations
in determining whether a security rated by more than one rating service can be
treated as being in the highest short-term rating category; currently, such
securities must be rated by two rating services in their highest rating
category. See "Regulatory Compliance."

INVESTMENT RISKS
There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.

INVESTMENT LIMITATIONS

Issuing Senior Securities and Borrowing Money
The Fund may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the 1940 Act.

Investing in Commodities
The Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities.

Buying on Margin
The Fund will not purchase securities on margin provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities.

Investing in Other Investment Companies
The Fund may invest its assets in securities of other investment companies.

Regulatory Compliance
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this SAI, in order to comply with applicable laws and
regulations, including the provisions of and regulations under the Investment
Company Act of 1940. In particular, the Fund will comply with the various
requirements of Rule 2a-7 (the "Rule"), which regulates money market mutual
funds. For example, with limited exceptions, the Rule prohibits the investment
of more than 5% of the Fund's total assets in the securities of any one issuer,
although the Fund's investment limitation only requires such 5% diversification
with respect to 75% of its assets. The Fund will invest more than 5% of its
assets in any one issuer only under the circumstances permitted by the Rule. The
Fund will also 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 nationally recognized rating services, according to the Rule. The
Fund may change these operational policies to reflect changes in the laws and
regulations without the approval of its shareholders.

WHAT DO SHARES COST?

HOW IS THE FUND SOLD?

Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best- efforts basis.

SUBACCOUNTING SERVICES

<PAGE>

REDEMPTION IN KIND

MASSACHUSETTS PARTNERSHIP LAW

ACCOUNT AND SHARE INFORMATION

As of September____, 1999, , the following shareholders owned of record,
beneficially, or both, 5% or more of outstanding Shares:

Shareholders owning 25% or more of outstanding Shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.

TAX INFORMATION

<PAGE>

WHO MANAGES AND PROVIDES SERVICES TO THE FUND?

BOARD OF TRUSTEES
The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Trust for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Trust is comprised of 21
funds and the Federated Fund Complex is comprised of 54 investment companies,
whose investment advisers are affiliated with the Fund's Adviser.

As of _________, 1999, the Fund's Board and Officers as a group owned less than
1% of the Fund's outstanding Institutional, Institutional Service and
Institutional Capital Shares.

<PAGE>

Name Total
Birth Date Aggregate Compensation From
Address Principal Occupations Compensation Trust and Fund
Position With Trust for Past Five Years From Trust Complex
- ------------------------------- -- ------------------------------------------------------- -------------- -- ------------------
John F. Donahue*+# Chief Executive Officer and Director or Trustee of $0 $0 for the
Birth Date: July 28, 1924 the Federated Fund Complex; Chairman and Director, Trust and
Federated Investors Tower Federated Investors, Inc.; Chairman and Trustee, 54 other investment
1001 Liberty Avenue Federated Investment Management Company; Chairman and companies
Pittsburgh, PA Director, Federated Investment Counseling and in the Fund Complex
CHAIRMAN AND TRUSTEE Federated Global Investment Management Corp.;
Chairman, Passport Research, Ltd.
Thomas G. Bigley Director or Trustee of the Federated Fund Complex; $18, 351 $113,860.22 for the
Birth Date: February 3, 1934 Director, Member of Executive Committee, Children's Trust and 54 other
15 Old Timber Trail Hospital of Pittsburgh; Director, Robroy Industries, investment
Pittsburgh, PA Inc. (coated steel conduits/computer storage companies
TRUSTEE equipment); formerly: Senior Partner, Ernst & Young in the Fund Complex
LLP; Director, MED 3000 Group, Inc. (physician
practice management); Director, Member of Executive
Committee, University of Pittsburgh.

John T. Conroy, Jr. Director or Trustee of the Federated Fund Complex; $20,189 $125,264.48 for the
Birth Date: June 23, 1937 President, Investment Properties Corporation; Senior Trust and 54 other
Wood/ Vice President, John R. Wood and Associates, Inc., investment
IPC Commercial Dept. Realtors; Partner or Trustee in private real estate companies
John R. Wood Associates, Inc. ventures in Southwest Florida; formerly: President, in the Fund Complex
Realtors Naples Property Management, Inc. and Northgate
3255 Tamiami Trail North Village Development Corporation.
Naples, FL
TRUSTEE

John F. Cunningham++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: March 5, 1943 Complex; Chairman, President and Chief Executive and 40 other
353 El Brillo Way Officer, Cunningham & Co., Inc. (strategic business investment
Palm Beach, FL consulting) ; Trustee Associate, Boston College; companies in the
TRUSTEE Director, EMC Corporation (computer storage systems); Fund Complex
formerly: Director, Redgate Communications.

Charles F. Mansfield, Jr.++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: April 10, 1945 Complex; Management Consultant. and 43 other
80 South Road investment
Westhampton Beach, NY TRUSTEE Previous Positions: Chief Executive Officer, PBTC companies in the
International Bank; Partner, Arthur Young & Company Fund Complex
(now Ernst & Young LLP); Chief Financial Officer of
Retail Banking Sector, Chase Manhattan Bank; Senior
Vice President, Marine Midland Bank; Vice President,
Citibank; Assistant Professor of Banking and Finance,
Frank G. Zarb School of Business, Hofstra University.

John E. Murray, Jr., J.D., Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
S.J.D.# President, Law Professor, Duquesne University; Trust and 54 other
Birth Date: December 20, 1932 Consulting Partner, Mollica & Murray; Director, investment
President, Duquesne University Michael Baker Corp. (engineering, construction, companies
Pittsburgh, PA operations, and technical services). in the Fund Complex
TRUSTEE
Previous Positions: Dean and Professor of Law,
University of Pittsburgh School of Law; Dean and
Professor of Law, Villanova University School of Law.

Marjorie P. Smuts Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: June 21, 1935 Public Relations/Marketing/Conference Planning. Trust and 54 other
4905 Bayard Street investment
Pittsburgh, PA Previous Positions: National Spokesperson, Aluminum companies in the
TRUSTEE Company of America; television producer; business Fund Complex
owner.

John S. Walsh++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: November 28, 1957 Complex; President and Director, Heat Wagon, Inc. and 41 other
2007 Sherwood Drive (manufacturer of construction temporary heaters); investment
Valparaiso, IN President and Director, Manufacturers Products, Inc. companies in the
TRUSTEE (distributor of portable construction heaters); Fund Complex
President, Portable Heater Parts, a division of
Manufacturers Products, Inc.; Director, Walsh &
Kelly, Inc. (heavy highway contractor); formerly:
Vice President, Walsh & Kelly, Inc.

J. Christopher Donahue+ President or Executive Vice President of the $0 $0 for the Trust
Birth Date: April 11, 1949 Federated Fund Complex; Director or Trustee of some and 16 other
Federated Investors Tower of the Funds in the Federated Fund Complex; President investment
1001 Liberty Avenue and Director, Federated Investors, Inc.; President companies in the
Pittsburgh, PA and Trustee, Federated Investment Management Company; Fund Complex
PRESIDENT President and Director, Federated Investment
Counseling and Federated Global Investment
Management Corp.; President, Passport
Research, Ltd.; Trustee, Federated
Shareholder Services Company; Director,
Federated Services Company.

<PAGE>

Edward C. Gonzales Trustee or Director of some of the Funds in the $0 $0 for the Trust and
Birth Date: October 22, 1930 Federated Fund Complex; President, Executive Vice 1 other investment
Federated Investors Tower President and Treasurer of some of the Funds in the companies in the
1001 Liberty Avenue Federated Fund Complex; Vice Chairman, Federated Fund Complex
Pittsburgh, PA Investors, Inc.; Vice President, Federated Investment
EXECUTIVE VICE PRESIDENT Management Company and Federated Investment
Counseling, Federated Global Investment Management
Corp. and Passport Research, Ltd.; Executive Vice
President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company.

John W. McGonigle Executive Vice President and Secretary of the $0 $0 for the Trust
Birth Date: October 26, 1938 Federated Fund Complex; Executive Vice President, and 54 other
Federated Investors Tower Secretary, and Director, Federated Investors, Inc.; investment
1001 Liberty Avenue Trustee, Federated Investment Management Company; companies in the
Pittsburgh, PA Director, Federated Investment Counseling and Fund Complex
EXECUTIVE VICE PRESIDENT AND Federated Global Investment Management Corp.;
SECRETARY Director, Federated Services Company; Director,
Federated Securities Corp.
Richard J. Thomas Treasurer of the Federated Fund Complex; Vice $0 $0 for the Trust
Birth Date: June 17, 1954 President - Funds Financial Services Division, and 54 other
Federated Investors Tower Federated Investors, Inc.; formerly: various investment
1001 Liberty Avenue management positions within Funds Financial Services companies in the
Pittsburgh, PA Division of Federated Investors, Inc. Fund Complex
TREASURER

William D. Dawson, III Chief Investment Officer of this Fund and various $0 $0 for the Trust
Birth Date: March 3, 1949 other Funds in the Federated Fund Complex; Executive and 41 other
Federated Investors Tower Vice President, Federated Investment Counseling, investment
1001 Liberty Avenue Federated Global Investment Management Corp., companies in the
Pittsburgh, PA Federated Investment Management Company and Passport Fund Complex
CHIEF INVESTMENT OFFICER Research, Ltd.; Registered Representative, Federated
Securities Corp.; Portfolio Manager,
Federated Administrative Services; Vice
President, Federated Investors, Inc.;
formerly: Executive Vice President and Senior
Vice President, Federated Investment
Counseling Institutional Portfolio Management
Services Division; Senior Vice President,
Federated Investment Management Company and
Passport Research, Ltd.

Deborah A. Cunningham Deborah A. Cunningham has been the Fund's portfolio $0 $0 for the Trust
Birth Date: September 15, manager since inception. She is Vice President of the and 6 other
1959 Trust. Ms. Cunningham joined Federated Investors in investment
Federated Investors Tower 1981 and has been a Senior Portfolio Manager and a companies in the
1001 Liberty Avenue Senior Vice President of the Fund's investment Fund Complex
Pittsburgh, PA aAdviser since 1997. Ms. Cunningham served as a
VICE PRESIDENT Portfolio Manager and a Vice President of the
investment
adviser from 1993 until 1996. Ms. Cunningham is a
Chartered Financial Analyst and received her M.S.B.A.
in Finance from Robert Morris College.
Mary Jo Ochson Mary Jo Ochson is Vice President of the Trust. Ms. $0 $0 for the Trust
Birth Date: September 12, Ochson joined Federated Investors in 1982 and has and 7 other
1953 been a Senior Portfolio Manager and a Senior Vice investment
Federated Investors Tower President of the Fund's investment adviser since companies in the
1001 Liberty Avenue 1996. From 1988 through 1995, Ms. Ochson served as a Fund Complex
Pittsburgh, PA Portfolio Manager and a Vice President of the Fund's
VICE PRESIDENT investment adviser. Ms. Ochson is a Chartered
Financial Analyst and received her M.B.A. in Finance
from the University of Pittsburgh.

+ Mr. Donahue is the father of J. Christopher Donahue, President and Trustee
of the Trust.
++ Messrs. Cunningham, Mansfield and Walsh became members of the Board on
January 1, 1999. They did not earn any fees for serving the Fund Complex since
these fees are reported as of the end of the last calendar year. They did not
receive any fees as of the fiscal year end of the Trust.

INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund. The Adviser is a wholly owned subsidiary of Federated.

Prior to November 15, 1996, Lehman Brothers Global Asset Management (former
adviser), New York, New York, served as the Fund's adviser.

Maximum Administrative Fee Average Aggregate Daily Net
Assets of the Federated Funds
0.150 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750
million
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 Services Company may voluntarily waive a portion of its fee and may
reimburse the Fund for expenses.

Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.

Prior to November 15, 1996, FDISG (former administrator), a subsidiary of First
Data Corporation, Boston, Massachusetts, served as the Fund's administrator.

FEES PAID BY THE FUND FOR SERVICES
For the Year ended January 31 1999 1998 19971
Advisory Fee Earned 2 $4,676,382 $3,485,448 $911,504
Advisory Fee Reduction 2,853,923 2,107,753 505,519
Administrative Fee 3 1,762,996 1,315,415 30,284
Shareholder Services Fee:
Institutional Shares 0
Institutional Service Shares 1,803,553
Institutional Capital Shares 236,964

1 For the period from November 15, 1996 to January 31, 1997.
2 For the period from February 1, 1996 to November 14, 1996, the former adviser
earned $4,814,270. 3 For the period from February 1, 1996 to November 14, 1996,
the former administrator earned $2,380,339. Fees are allocated among classes
based on their pro rata share of Fund assets, except for shareholder services
fees, which are borne only by the applicable class of Shares.

For the fiscal years ended January 31, 1999, 1998 and 1997, fees paid by the
Fund for services are prior to the Fund's reorganization as a portfolio of the
Trust on _____, 1999.

HOW DOES THE FUND MEASURE PERFORMANCE?

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

<PAGE>

Average Annual Total Returns and Yield
Total returns given for the one-year, five-year and the start of performance
periods ended January 31, 1999.

Yield and Effective Yield given for the 7-day period ended January 31, 1999.

Performance of the Fund shown is prior to its reorganization as a portfolio of
the Trust on _______, 1999.

Share Class 7-Day 1 Year 5 Years Start of
Period Performance on
February 8, 1993
Institutional
Shares:
Total Return 5.50% 5.41% 5.05%
Yield 4.94%
Effective Yield 5.06%

Share Class 7-Day 1 Year 5 Years Start of
Period Performance on
September 2, 1993
Institutional
ServiceShares:
Total Return 5.23% 5.15% 4.98%
Yield 4.69%
Effective Yield 4.80%

Share Class 7-Day 1 Year Start of
Period Performance on
October 6, 1994
Institutional
CapitalShares:
Total Return 5.37% 5.48%
Yield 4.82%
Effective Yield 4.93%
- ----------------------------------------------------------------------

<PAGE>

PERFORMANCE COMPARISONS
Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;

o charts, graphs, and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;

o discussions of economic, financial and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Funds; and

o information about the mutual fund industry from sources such as the Investment
Company Institute.

The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

Lipper Analytical Services, Inc.

Lipper Analytical Services, Inc. ranks funds in various fund categories based on
total return, which assumes the reinvestment of all income dividends and capital
gains distributions, if any.

Money
Money, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven- day effective yield.

Bank Rate Monitor(C) National Index
Bank Rate Monitor(C) National Index, Miami Beach, Florida, published weekly, is
an average of the interest rates of personal money market deposit accounts at 10
of the largest banks and thrifts in each of the five largest Standard
Metropolitan Statistical Areas. If more than one rate is offered, the lowest
rate is used. Account minimums and compounding methods may vary.

WHO IS FEDERATED INVESTORS, INC.?

<PAGE>

Federated Funds overview

Equity Funds
In the equity sector, Federated has more than 28 years' experience. As of
December 31, 1998, Federated managed 27 equity funds totaling approximately
$14.9 billion in assets across growth, value, equity income, international,
index, and sector (i.e. utility) styles. Federated's value-oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.

Corporate Bond Funds
In the corporate bond sector, as of December 31, 1998, Federated managed 9 money
market funds and 15 bond funds with assets approximating $22.8 billion and $7.1
billion, respectively. Federated's corporate bond decision making-- based on
intensive, diligent credit analysis--is backed by over 26 years of experience in
the corporate bond sector. In 1972, Federated introduced one of the first
high-yield bond funds in the industry. In 1983, Federated was one of the first
fund managers to participate in the asset backed securities market, a market
totaling more than $209 billion.

Federated Clients Overview
Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:

<PAGE>

ADDRESSES

prime cash obligations fund
Institutional Shares
Institutional Service Shares
Institutional Capital Shares

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

Distributor
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Investment Adviser
Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Custodian
State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600

Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Independent Auditors
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072

FEDERATED TAX-FREE TRUST
A Portfolio of Money Market Obligations Trust

A money market mutual fund seeking to seeking to provide dividend income exempt
from federal regular income taxes while seeking relative stability of principal
by investing in high quality tax exempt securities maturing in 397 days or less.

Contents
Risk/Return
Summary What
are the Fund's
Fees and
Expenses? What
are the Fund's
Investment
Strategies?
What are the
Principal
Securities in
Which the Fund
Invests? What
are the
Specific Risks
of Investing in
the Fund?
What Do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem Shares
Account and Share Information
Who Manages the Fund?
Financial Information
October __, 1999

<PAGE>

RISK/RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund is a money market fund which seeks to maintain a stable net asset value
of $1.00. The Fund's investment objective is to provide for its shareholders
dividend income exempt from federal regular income taxes while seeking relative
stability of principal. While there is no assurance that the Fund will achieve
its investment objective, it endeavors to do so by following the strategies and
policies described in this prospectus.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests in tax exempt securities maturing in 397 days or less. At least
80% of the Fund's annual interest income will be exempt from federal regular
income tax. Interest income from the Fund's investments may be subject to
federal alternative minimum tax for individuals and corporations (AMT). The
average maturity of the Fund's portfolio will be 90 days or less.

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.

<PAGE>

Risk/Return Bar Chart and Table

The Bar Chart and Performance Table below reflect historical performance data
for Shares of Federated Tax-Free Trust (the "Former Fund") prior to its
reorganization into the Fund, which is a newly created portfolio of Money Market
Obligations Trust (the "Trust"). On the date of the reorganization, October __,
1999, the Former Fund was dissolved and its net assets (inclusive of liabilities
recorded on the Former Fund's records) were transferred to the Fund.

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Shares of the Former Fund as of the calendar year-end
for each of ten years.

The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 7%.

The `x' axis represents calculation periods from the earliest first full
calendar year end of the Former Fund's start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features ten distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Shares for each calendar year is
stated directly at the top of each respective bar, for the calendar years 1989
through 1998. The percentages noted are: 6.03%, 5.69%, 4.32%, 2.75%, 2.14%,
2.57%, 3.57%, 3.14%, 3.33% and 3.18%.

Historically, the Former Fund has maintained a constant $1.00 net asset value
per share. The bar chart shows the variability of the Former Fund's total
returns on a calendar year-end basis.

The Former Fund's Shares are not sold subject to a sales charge (load). The
total returns displayed above are based upon net asset value.

The Former Fund's total return from January 1, 1999 to June 30, 1999 was ____%.

Within the period shown in the Chart, the Former Fund's highest quarterly return
was 1.54% (quarter ended June 30, 1995). Its lowest quarterly return was 0.49%
(quarter ended March 31, 1994).

Average Annual Total Return Table

The following table represents the Former Fund's Shares Average Annual Total
Return for the calendar periods ended December 31, 1998.

Calendar Period
1 Year 3.18% 5 Years 3.16% 10 Years 3.66% Start of Performance1 ___% 1 The
Former Fund's start of performance date was _____________, 198__.

The Former Fund's 7- Day Net Yield as of 12/31/98 was 5.03%. Investors may call
the Fund at 1-800-341-7400 to acquire the current 7-Day Net Yield .

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?
FEDERATED TAX-FREE TRUST

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Fund . Shareholder Fees Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price) None Maximum Deferred Sales Charge (Load) (as a percentage of original
purchase price or redemption None proceeds, as applicable) Maximum Sales Charge
(Load) Imposed on Reinvested Dividends (and other Distributions) (as a None
percentage of offering price) Redemption Fee (as a percentage of amount
redeemed, if applicable) None Exchange Fee None

<S> <C>

Annual Fund Operating Expenses (Before Waivers)
Expenses That are Deducted From Fund Assets (as a percentage of average net assets)
Management Fee1 0.40%
Distribution (12b-1) Fee None
Shareholder Services Fee 0.25%
Other Expenses 0.12%
Total Annual Fund Operating Expenses2 0.77%
- ------------------------------------- - -----
</TABLE>

Total Waivers of Fund Expenses (contractual waivers) 0.32% Total Actual Annual
Fund Operating Expenses (after waivers) 0.45% 1 Pursuant to the investment
advisory contract, the adviser will waive a portion of the Management
Fee. The Management Fee the Fund expects to pay (after the contractual
waivers) is expected to
be 0.08% for the fiscal year ending November 30, 1999.
2 For the fiscal year ended November 30, 1998, prior to the reorganization of
Federated Tax-Free Trust, the Former Fund, as a portfolio of Money Market
Obligations Trust, had Total Annual Fund Operating Expenses and Total Actual
Annual Fund Operating Expenses (after waivers) of 0.77% and 0.45%,
respectively.

<PAGE>

EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your Shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's maximum allowable operating expenses as shown in the table remain the
same. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

- ------------------------------------------------------
1 Year $46
3 Years $144
5 Years $252
10 Years $567

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high-quality tax exempt securities maturing
in 397 days or less. At least 80% of the Fund's annual interest income will be
exempt from federal regular income tax. Interest from the Fund's investments may
be subject to AMT. The Fund will have an average portfolio maturity of 90 days
or less. The Fund's investment adviser (Adviser) actively manages the Fund's
portfolio, seeking to limit the credit risk taken by the Fund and select
investments with enhanced yields.

The Adviser performs a fundamental credit analysis to develop an approved list
of issuers and securities that meet the Adviser's standard for minimal
creditrisk. The Adviser monitors the credit risks of all portfolio securities on
an ongoing basis by reviewing periodic financial data and ratings of nationally
recognized rating services.

The Adviser targets an average portfolio maturity based upon its interest rate
outlook and the tax exempt securities available. The Adviser formulates its
interest rate outlook by analyzing a variety of factors such as current and
expected U.S. economic growth; current and expected interest rates and
inflation; and the Federal Reserve's monetary policy. The Adviser structures the
portfolio by investing primarily in variable rate demand instruments and
municipal notes. The Adviser generally shortens the portfolio maturity when it
expects interest rates to rise and extends the maturity when it expects interest
rates to fall. This strategy seeks to enhance the returns from favorable
interest rate changes and reduce the effect of unfavorable changes.

temporary defensive investments
The Fund may temporarily depart from its principal investment strategies by
investing its assets in securities subject to federal regular income tax. It may
do this to minimize potential losses and maintain liquidity to meet shareholder
redemptions during adverse market conditions. This may cause the Fund to receive
and distribute taxable income to investors.

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

Typically, states, counties, cities and other political subdivisions and
authorities issue tax exempt securities. The market categorizes tax exempt
securities by their source of repayment.

The following describes the types of tax exempt securities in which the Fund
invests.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

<PAGE>

The required minimum initial investment for Fund Shares is $25,000. There is
no required minimum subsequent investment amount.

An account may be opened with a smaller amount as long as the $25,000 minimum
is reached within 90 days of opening the account. An institutional investor's
minimum investment is calculated by combining all accounts it maintains with the
Fund. Accounts established through investment professionals may be subject to a
smaller minimum investment amount. Keep in mind that investment professionals
may charge you fees for their services in connection with your Share
transactions.

HOW IS THE FUND SOLD?
The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to institutions acting in an agency or fiduciary capacity or
individuals, directly or through investment professionals. The Distributor and
its affiliates may pay out of their assets other amounts (including items of
material value) to investment professionals for marketing and servicing Shares.
The Distributor is a subsidiary of Federated Investors, Inc. (Federated).

HOW TO PURCHASE SHARES
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND
o Establish your account with the Fund by submitting a completed New Account
Form; and o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

By Wire Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number or Group Number Nominee/Institution Name
Fund Name and Number and Account Number.

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

By Check
Make your check payable to The Federated Funds, note your account number on the
check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

If you send your check by a private courier or overnight delivery service that
requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

By invest-by-phone
Once you establish an account, you may use the Fund's Invest-By-Phone privilege
for future Share purchases if you have an account with a bank that is an
Automated Clearing House member. To apply, call the Fund for an authorization
form. You may use Invest-By-Phone to purchase Shares approximately two weeks
from the date you file the form with Federated Shareholder Services Company.

BY Automatic Investments
You may establish an account with your financial institution to automatically
purchase Shares on pre-determined dates or when your bank account reaches a
certain level. Under this program, participating financial institutions are
responsible for prompt transmission of orders and may charge you for this
service. You should read this prospectus along with your financial institution's
agreement or materials describing this service.

DIRECTLY FROM THE FUND

By Telephone
You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 12:00 noon (Eastern time) your redemption will be wired to
you the same day. You will not receive that day's dividend.

If you call after 12:00 noon (Eastern time) your redemption will be wired to
you the following business day. You will receive that day's dividend.

By Mail
You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Send requests by private courier or overnight delivery service to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

All requests must include:

o Fund Name and Share Class, account number and account registration;
o amount to be redeemed; and
o signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

Signature Guarantees Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of record;

o your redemption will be sent to an address of record that was changed within
the last 30 days; or o a redemption is payable to someone other than the
shareholder(s) of record.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

ACCOUNT AND SHARE INFORMATION
account activity
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

The Adviser and other subsidiaries of Federated advise approximately 175
mutual funds and separate accounts, which totaled approximately $111 billion in
assets as of December 31, 1998. Federated was established in 1955 and is one of
the largest mutual fund investment managers in the United States with
approximately 1,900 employees. More than 4,000 investment professionals make
Federated Funds available to their customers.

Advisory Fees
The Adviser receives an annual investment advisory fee of 0.40% of the Fund's
average daily net assets. Under the investment advisory contract, which is
subject to annual renewal by the Fund's Board of Trustees, the Adviser will
waive the amount, limited to the amount of the advisory fee, by which the Fund's
aggregate annual operating expenses, including the investment advisory fee but
excluding interest, taxes, brokerage commissions, expenses of registering or
qualifying the Fund and its shares under federal and state laws and regulations,
expenses of withholding taxes, and extraordinary expenses exceed 0.45% of its
average daily net assets.

While it is impossible to determine in advance all of the risks to the Fund,
the Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
Share transactions or Fund communications.

The Fund's service providers are making changes to their computer systems to
fix any Year 2000 problems. In addition, they are working to gather information
from third-party providers to determine their Year 2000 readiness.

<PAGE>

FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
The Fund's Financial Highlights are contained in the Former Fund's Prospectus
which also serves as the Annual Report, dated January 31, 1999 and is
incorporated by reference and must precede or accompany this document.

<PAGE>

FEDERATED TAX-FREE TRUST
A Portfolio of Money Market Obligations Trust

October __, 1999

Investment Company Act File No. 811-2891
Cusip ________________

__________ (10/99)

FEDERATED TAX-FREE TRUST

A Portfolio of Money Market Obligations Trust

<PAGE>

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Federated Tax-Free Trust (Fund),
dated October __, 1999. Obtain the prospectuses without charge by calling
1-800-341-7400.

<PAGE>

October __, 1999

<PAGE>

__________ (10/99)

<PAGE>

Contents
How is the Fund Organized? 1
Securities in Which the Fund Invests 1
What Do Shares Cost?
How is the Fund Sold?
Subaccounting Services
Redemption in Kind
Massachusetts Partnership Law
Account and Share Information
Tax Information
Who Manages and Provides Services to the Fund?
How Does the Fund Measure Performance?
Who is Federated Investors, Inc.?
Investment Ratings
Addresses

<PAGE>

HOW IS THE FUND ORGANIZED?

The Fund is a diversified portfolio of Money Market Obligations Trust (Trust).
The Trust is an open-end, management investment company that was established
under the laws of the Commonwealth of Massachusetts on November 20, 1978. The
Trust may offer separate series of shares representing interests in separate
portfolios of securities. The Fund, which was established on March 6, 1979, was
reorganized as a portfolio of the Trust on October __, 1999. The Fund's
investment adviser is Federated Investment Management Company (Adviser).

SECURITIES IN WHICH THE FUND INVESTS

The Fund's principal securities, are described in its prospectus. Additional
securities, and further information regarding the principal securities, are
outlined below. In pursuing its investment strategy, the Fund may invest in such
tax exempt securities for any purpose that is consistent with its investment
objective.

FUNDAMENTAL INVESTMENT POLICY

As a fundamental investment policy, at least 80% of the Fund's annual interest
income will be exempt from Federal regular income tax except in extraordinary
circumstances when, for example, management feels that market conditions dictate
a defensive posture in temporary investments.

SECURITIES DESCRIPTIONS AND TECHNIQUES

The following describes the types of fixed income securities in which the Fund
invests.

General Obligation Bonds
General obligation bonds are supported by the issuer's power to exact property
or other taxes. The issuer must impose and collect taxes sufficient to pay
principal and interest on the bonds. However, the issuer's authority to impose
additional taxes may be limited by its charter or state law.

Special Revenue Bonds
Special revenue bonds are payable solely from specific revenues received by the
issuer such as specific taxes, assessments, tolls, or fees. Bondholders may not
collect from the municipality's general taxes or revenues. For example, a
municipality may issue bonds to build a toll road, and pledge the tolls to repay
the bonds. Therefore, a shortfall in the tolls normally would result in a
default on the bonds.

<PAGE>

Private Activity Bonds
Private activity bonds are special revenue bonds used to finance private
entities. For example, a municipality may issue bonds to finance a new factory
to improve its local economy. The municipality would lend the proceeds from its
bonds to the company using the factory, and the company would agree to make loan
payments sufficient to repay the bonds. The bonds would be payable solely from
the company's loan payments, not from any other revenues of the municipality.
Therefore, any default on the loan normally would result in a default on the
bonds.

The interest on many types of private activity bonds is subject to the federal
alternative minimum tax (AMT). The Fund may invest in bonds subject to AMT.

Municipal Leases
Municipalities may enter into leases for equipment or facilities. In order to
comply with state public financing laws, these leases are typically subject to
annual appropriation. In other words, a municipality may end a lease, without
penalty, by not providing for the lease payments in its annual budget. After the
lease ends, the lessor can resell the equipment or facility but may lose money
on the sale.

The Fund may invest in securities supported by pools of municipal leases. The
most common type of lease backed securities are certificates of participation
(COPs). However, the Fund may also invest directly in individual leases. Credit
enhancement Common types of credit enhancement include guarantees, letters of
credit, bond insurance and surety bonds. Credit enhancement also includes
arrangements where securities or other liquid assets secure payment of a fixed
income security. If a default occurs, these assets may be sold and the proceeds
paid to security's holders. Either form of credit enhancement reduces credit
risk by providing another source of payment for a fixed income security.

SPECIAL TRANSACTIONS

Asset Coverage
In order to secure its obligations in connection with special transactions
including delayed delivery transactions, the Fund will either own the underlying
assets, enter into an offsetting transaction or set aside readily marketable
securities with a value that equals or exceeds the Fund's obligations. Unless
the Fund has other readily marketable assets to set aside, it cannot trade
assets used to secure such obligations without entering into an offsetting
transaction or terminating the special transaction. This may cause the Fund to
miss favorable trading opportunities or to realize losses on special
transactions.

Temporary Defensive Investments

The Fund may make temporary defensive investments in the following taxable
securities.

Treasury Securities
Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the lowest
credit risks.

Bank Instruments

Investment Ratings
A nationally recognized rating service'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 Ratings Group
("S&P"), MIG-1 or MIG-2 by Moody's Investors Service, Inc. ("Moody's"), or F-1+,
F-1, or F-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
rating service can be treated as being in one of the two highest short-term
rating categories; currently, such securities must be rated by two rating
services in one of their two highest rating categories. See "Regulatory
Compliance."

INVESTMENT RISKS
There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.

Tax Risks
In order to be tax exempt, municipal securities must meet certain legal
requirements. Failure to meet such requirements may cause the interest received
and distributed by the Fund to shareholders to be taxable. Changes or proposed
changes in federal tax laws may cause the prices of municipal securities to
fall.

INVESTMENT LIMITATIONS

Issuing Senior Securities and Borrowing Money
The Fund may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the 1940 Act.

Concentration of Investments

The Fund will not make investments that will result in the concentration of its
investments in the securities of issuers primarily engaged in the same industry,
except that the Fund may concentrate its investments in short-term tax exempt
securities which are guaranteed by the U.S. government, regardless of the
location of the issuing municipality. Government securities, municipal
securities and bank instruments are not deemed to constitute an industry.

Investing in Commodities
The Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities.

Buying on Margin
The Fund will not purchase securities on margin provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities.

Investing in Other Investment Companies
The Fund may invest its assets in securities of other investment companies.

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 asets will not result in a violation of such
limitation.

Regulatory Compliance
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this SAI, in order to comply with applicable laws and
regulations, including the provisions of and regulations under the Investment
Company Act of 1940. In particular, the Fund will comply with the various
requirements of Rule 2a-7 (the "Rule"), which regulates money market mutual
funds. For example, with limited exceptions, the Rule prohibits the investment
of more than 5% of the Fund's total assets in the securities of any one issuer,
although the Fund's investment limitation only requires such 5% diversification
with respect to 75% of its assets. The Fund will invest more than 5% of its
assets in any one issuer only under the circumstances permitted by the Rule. The
Fund will also 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 nationally recognized rating services, according to the Rule. The
Fund may change these operational policies to reflect changes in the laws and
regulations without the approval of its shareholders.

HOW IS THE FUND SOLD?

Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best- efforts basis.

Investment professionals receive such fees for providing distribution-related
or shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Fund or other special
events at recreational-type facilities, or items of material value. These
payments will be based upon the amount of Shares the investment professional
sells or may sell and/or upon the type and nature of sales or marketing support
furnished by the investment professional.

REDEMPTION IN KIND

Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving the portfolio securities and selling them
before their maturity could receive less than the redemption value of the
securities and could incur certain transaction costs.

MASSACHUSETTS PARTNERSHIP LAW

ACCOUNT AND SHARE INFORMATION

Trustees may be removed by the Board or by shareholders at a special meeting.
A special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Trust's outstanding shares
of all series entitled to vote.

Shareholders owning 25% or more of outstanding Shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.

TAX INFORMATION

WHO MANAGES AND PROVIDES SERVICES TO THE FUND?

BOARD OF TRUSTEES
The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Trust for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Trust is comprised of 21
funds and the Federated Fund Complex is comprised of 54 investment companies,
whose investment advisers are affiliated with the Fund's Adviser.

As of October __, 1999, the Fund's Board and Officers as a group owned less
than 1% of the Fund's outstanding Shares.

<PAGE>

John F. Cunningham++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: March 5, 1943 Complex; Chairman, President and Chief Executive and 40 other
353 El Brillo Way Officer, Cunningham & Co., Inc. (strategic business investment
Palm Beach, FL consulting) ; Trustee Associate, Boston College; companies in the
TRUSTEE Director, EMC Corporation (computer storage systems); Fund Complex
formerly: Director, Redgate Communications.

Charles F. Mansfield, Jr.++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: April 10, 1945 Complex; Management Consultant. and 43 other
80 South Road investment
Westhampton Beach, NY Previous Positions: Chief Executive Officer, PBTC companies in the
TRUSTEE International Bank; Partner, Arthur Young & Company Fund Complex
(now Ernst & Young LLP); Chief Financial
Officer of Retail Banking Sector, Chase
Manhattan Bank; Senior Vice President, Marine
Midland Bank; Vice President, Citibank;
Assistant Professor of Banking and Finance,
Frank G. Zarb School of Business, Hofstra
University..

John S. Walsh++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: November 28, 1957 Complex; President and Director, Heat Wagon, Inc. and 41 other
2007 Sherwood Drive (manufacturer of construction temporary heaters); investment
Valparaiso, IN President and Director, Manufacturers Products, Inc. companies in the
TRUSTEE (distributor of portable construction heaters); Fund Complex
President, Portable Heater Parts, a division of
Manufacturers Products, Inc.; Director, Walsh &
Kelly, Inc. (heavy (highway contractor); formerly:
Vice President, Walsh & Kelly, Inc.

<PAGE>

William D. Dawson, III Chief Investment Officer of this Fund and various $0 for the
Birth Date: March 3, 1949 other Funds in the Federated Fund Complex; Executive $0 Trust and
Federated Investors Tower Vice President, Federated Investment Counseling, 41 other investment
1001 Liberty Avenue Federated Global Investment Management Corp., companies
Pittsburgh, PA Federated Investment Management Company and Passport in the Fund Complex
CHIEF INVESTMENT OFFICER Research, Ltd.; Registered Representative, Federated
Securities Corp.; Portfolio Manager, Federated
Administrative Services; Vice President,
Federated Investors, Inc.; formerly: Executive
Vice President and Senior Vice President,
Federated Investment Counseling Institutional
Portfolio Management Services Division; Senior
Vice President, Federated Investment
Management Company and Passport Research, Ltd.
</TABLE>

+ Mr. Donahue is the father of J. Christopher Donahue, President of the
Trust.
++ Messrs. Cunningham, Mansfield and Walsh became members of the Board on
January 1, 1999. They did not earn any fees for serving the Fund
Complex since these fees are reported as of the end of the last
calendar year. They did not receive any fees as of the fiscal year end
of the Trust.

INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund.

The Adviser is a wholly owned subsidiary of Federated.

The Adviser must waive the portion of its advisory fee that increases the
Fund's aggregate annual operating expenses above 0.45% of its average daily net
assets. The Fund's operating expenses include the advisory fee but exclude
interest, taxes, brokerage commissions, expenses of registering the Fund and its
shares under federal and state laws, expenses of withholding taxes, and
extraordinary expenses.

Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.

<PAGE>

INDEPENDENT auditors
The independent auditor for the Fund, Deloitte & Touche LLP, plans and performs
their audit so that they may provide an opinion as to whether the Fund's
financial statements and financial highlights are free of material misstatement.

FEES PAID BY THE FUND FOR SERVICES
For the Year Ended November 30 1998 1997 1996
Advisory Fee Earned2 $2,267,974$2,902,993 $3,255,470
Advisory Fee Reduction 700,126 960,485
823,445
Brokerage Commissions 0 0 0
Administrative Fee 427,513 547,940 615,257
Shareholder Services Fee 283,496 - -
If the Fund's are capped at a particular level, the cap does not include
reimbursement to the Fund of any expenses incurred by shareholders who use the
transfer agent's subaccounting facilities. For the fiscal years ended November
30, 1998, 1997 and 1996, fees paid by the Fund for services are prior to the
Fund's reorganization as a portfolio of the Trust on October __, 1999.

HOW DOES THE FUND MEASURE PERFORMANCE?

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

Average Annual Total Returns and Yield
Total returns given for the one-year, five-year and ten year periods ended
November 30, 1998.

Yield, Effective Yield and Tax-Equivalent Yield given for the 7-day period ended
November 30, 1998.

Performance of the Fund shown is prior to its reorganization as a portfolio of
the Trust on October __, 1999.

7-Day 1 5 10 Years
Period Year Years
Total Return 3.21% 3.14% 3.69%
Yield 3.03% N/A N/A N/A
Effective Yield 3.08% N/A N/A N/A
Tax-Equivalent 5.02% N/A N/A N/A
Yield

TAX EQUIVALENCY TABLE
Taxable Yield Equivalent for 1999 MultiState Municipal Fund

Note: The maximum marginal tax rate for each bracket was used in calculating the
taxable yield equivalent.

PERFORMANCE COMPARISONS
Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;

o discussions of economic, financial and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Funds; and

o information about the mutual fund industry from sources such as the Investment
Company Institute.

The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

You may use financial publications and/or indices to obtain a more complete
view of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Fund uses in advertising may include:

<PAGE>

Lipper Analytical Services, Inc.

Lipper Analytical Services, Inc. ranks funds in various fund categories based on
total return, which assumes the reinvestment of all income dividends and capital
gains distributions, if any.

Money
Money, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.

WHO IS FEDERATED INVESTORS, INC.?

Federated Funds overview

Corporate Bond Funds
In the corporate bond sector, as of December 31, 1998, Federated managed 9 money
market funds and 15 bond funds with assets approximating $22.8 billion and $7.1
billion, respectively. Federated's corporate bond decision making--based on
intensive, diligent credit analysis--is backed by over 26 years of experience in
the corporate bond sector. In 1972, Federated introduced one of the first
high-yield bond funds in the industry. In 1983, Federated was one of the first
fund managers to participate in the asset backed securities market, a market
totaling more than $209 billion.

Federated Clients Overview
Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:

FINANCIAL INFORMATION

The Financial Statements for the Former Fund for the fiscal year ended November
30, 1998, are for prior to the Fund's reorganization as a portfolio of the Trust
on October __, 1999.

<PAGE>

INVESTMENT RATINGS

Standard & Poor's Short-Term Municipal Obligation Ratings
A Standard & Poor's (S&P) note rating reflects the liquidity concerns and market
access risks unique to notes.

Commercial Paper (CP) Ratings
An S&P 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.

Moody's Investors Service, Inc., Short-Term Municipal Obligation Ratings
Moody's Investor 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 ratings is to provide investors with a simple system by which the relative
investment qualities of short-term obligations may be evaluated.

Fitch Investors Service, L.P. Short-Term Debt 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 for 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 for issues assigned F-1+ and F-1 ratings.

<PAGE>

ADDRESSES

FEDERATED TAX-FREE TRUST
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

Distributor
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Investment Adviser
Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Custodian
State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600

Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Independent Auditors
Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116

PART C. OTHER INFORMATION.
Item 23 Exhibits:

(a) (i) Conformed copy of Declaration of Trust of the Registrant; (12)
(ii) Conformed copy of Amendment to the Declaration of Trust of
the Registrant; (12)
(iii) Conformed copy of Amendment No. 2 to Declaration of Trust of
the Registrant; (17)
(iv) Conformed copy of Amendment No. 3 to Declaration of Trust of
the Registrant; (17)
(v) Conformed copy of Amendment No. 4 to Declaration of Trust of
the Registrant; (17)
(vi) Conformed copy of Amendment No. 5 to Declaration of Trust of
the Registrant; (17)
(vii) Conformed copy of Amendment No. 6 to Declaration of Trust of
the Registrant; (17)
(viii) Conformed copy of Amendment No. 8 to Declaration of Trust of
the Registrant; (10)
(ix) Conformed copy of Amendment No. 9 to Declaration of Trust of
the Registrant; (15)
(x) Conformed copy of Amendment No. 10 to Declaration of Trust of
the Registrant; (16)
(b) (i) Copy of By-Laws of the Registrant; (12)
(ii) Copy of Amendment No. 1 to By-Laws of the
Registrant; (17)
(iii) Copy of Amendment No. 2 to By-Laws of the Registrant; (17)
(iv) Copy of Amendment No. 3 to By-Laws of the Registrant; (17)
(v) Copy of Amendment No. 4 to By-Laws of the
Registrant; (17)
(c) (i) Copy of Specimen Certificate for Shares of Beneficial
Interest of the Registrant; (8)
(ii) Copies of Specimen Certificates for Shares of Beneficial
Interest of Automated Cash Management Trust-Cash II Shares
and Institutional Service Shares and Treasury Obligations
Fund-Institutional Capital Shares; (16)

- -
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed June 1, 1994.
(File Nos. 33-31602 and 811-5950)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 on Form N-1A filed February 21, 1995.
(File Nos. 33-31602 and 811-5950)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed September 29, 1995.
(File Nos. 33-31602 and 811-5950)
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed September 23, 1996.
(File Nos. 33-31602 and 811-5950)
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed September 23, 1997.
(File Nos. 33-31602 and 811-5950)
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 24 on Form N-1A filed September 28, 1998.
(File Nos. 33-31602 and 811-5950)

<PAGE>

(d) (i) Conformed copy of Investment Advisory Contract of the Registrant;

(12)
(ii) Conformed copies of Exhibits A through
G to Investment Advisory Contract of the
Registrant; (12) (iii) Conformed copy of
Investment Advisory Contract of the
Registrant (Government Obligations Tax
Managed Fund only); (11)
(iv) Conformed copy of Exhibit A to
Investment Advisory Contract of the
Registrant(Government Obligations
Tax Managed Fund only); (11)
(e) (i) Conformed copy of Distributor's
Contract of the Registrant; (7)
(ii) Conformed copy of Exhibit B to the
Distributor's Contract of the
Registrant; (15)
(iii) Conformed copy of Exhibit D to the
Distributor's Contract of the
Registrant;
(15)
(iv) Conformed copy of Exhibit E to the
Distributor's Contract of the
Registrant; (16)
(v) Conformed copy of Exhibit F to the
Distributor's Contract of the
Registrant; (16)
(vi) The Registrant hereby incorporates
the conformed copy of the specimen
Mutual Funds Sales and
Service Agreement; Mutual Funds
Service Agreement; and Plan
Trustee/ Mutual Funds Service
Agreement from Item 24(b)(6) of the
Cash Trust Series II Registration
Statement on Form N-1A filed with
the Commission on July 24,
1995.
(File Nos. 33-38550 and 811-6269).
(f) Not applicable;

-------------------

7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed May 6, 1994. (File Nos. 33-31602 and
811-5950)

11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed May 7, 1995. (File Nos. 33-31602 and
811-5950)

12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed September 29, 1995. (File Nos. 33-31602
and 811-5950)

15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed September 23, 1996. (File Nos. 33-31602
and 811-5950)

16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed September 23, 1997. (File Nos. 33-31602
and 811-5950)

<PAGE>

(g) (i) Conformed copy of Custodian Agreement of
the Registrant; (8) (ii) Conformed copy of
Custodian Fee Schedule; (17)

(h) (i) Conformed copy of Amended and Restated Agreement for Fund
Accounting Services, Administrative Services, Transfer Agency Services and
Custody Services Procurement;(17)

(ii) The responses described in Item
23(e)(vi) are hereby incorporated by
reference. (iii) Conformed copy of Amended
and Restated Shareholder Services Agreement
of the Registrant; (17) (iv) The Registrant
hereby incorporates by reference the
conformed copy of the Shareholder Services
Sub-Contract between Fidelity and
Federated Shareholder Services from
Item 24(b)(9)(iii) of the Federated
GNMA Trust Registration Statement
on Form N-1A, filed with the
Commission on March 25, 1996 (File
Nos. 2-75670 and 811-3375).
(i) Conformed copy of Opinion and Consent of Counsel
as to legality of shares being registered; (12) (j)
(i) Conformed copy of Consent of Deloitte & Touche
LLP, Independent Auditors for:
(a) Federated Master Trust; (19)
(b) Liquid Cash Trust; (20)
(c) Automated Government Money Trust;(19)
(d) Trust for Short-Term U.S. Government Securities (19)
(ii) Conformed copy of Consent of Arthur Andersen LLP for:
(a) Trust for Government Cash Reserves (19)
(b) Trust for U.S. Treasury Obligations (19)
(c) Federated Short-Term U.S. Government Trust (19)
(k) Not applicable;
(l) Conformed copy of Initial Capital Understanding; (12)

+ All exhibits are being filed electronically

8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed June 1, 1994. (File Nos. 33-31602 and
811-5950)

12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed September 29, 1995. (File Nos. 33-31602
and 811-5950)

17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 24 on Form N-1A filed September 28, 1998. (File Nos. 33-31602
and 811-5950)

19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed April 26, 1999. (File Nos. 33-31602 and
811-5950)

20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed May 25, 1999. (File Nos. 33-31602 and
811-5950)

<PAGE>

(m) (i) Conformed copy of Distribution Plan of
the Registrant; (16) (ii) Conformed copy of
Exhibit A to the Distribution Plan of the
Registrant; (16) (iii) The responses
described in Item 23(e)(vi) are hereby
incorporated by reference.
(n) Copies of Financial Data Schedules; (not included
per footnote 60 of Release No. 33-7684) (o) The
Registrant hereby incorporates the conformed copy of
the specimen Multiple Class Plan from
Item 24(b)(18) of the World Investment Series, Inc. Registration
Statement on Form N-1A, filed
with the Commission on January 26, 1996. (File Nos. 33-52149 and
811-07141).
(p) Conformed copy of Power of Attorney of the Registrant; (18)
(i) Conformed copy of Power of Attorney of
Chief Investment Officer of the Registrant; (18)
(ii) Conformed copy of Power of Attorney of
Treasurer of the Registrant; (18)

Item 24. Persons Controlled by or Under Common Control with the Fund:

None

Item 25. Indemnification: (1)

Item 26. Business and Other Connections of Investment Adviser:

(a) For a description of the other business of the investment adviser,
see the section entitled "Who Manages the Fund?" 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 "Who Manages and Provides
Services to the Fund?" 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:

Executive Vice Presidents: William D. Dawson, III
Henry A. Frantzen
J. Thomas Madden

Senior Vice Presidents: Joseph M. Balestrino
David A. Briggs
Drew J. Collins
Jonathan C. Conley
Deborah A. Cunningham
Michael P. Donnelly
Mark E. Durbiano
Jeffrey A. Kozemchak
Sandra L. McInerney
Susan M. Nason
Mary Jo Ochson
Robert J. Ostrowski

- ---------------------------------

1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed October 20, 1989. (File Nos. 33-31602 and
811-5950)

16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed September 23, 1997. (File Nos. 33-31602
and 811-5950)

18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 25 on Form N-1A filed February 12, 1999. (File Nos. 33-31602
and 811-5950)

Vice Presidents: Todd A. Abraham
J. Scott Albrecht
Arthur J. Barry
Randall S. Bauer
G. Andrew Bonnewell
David A. Briggs
Micheal W. Casey
Robert E. Cauley
Kenneth J. Cody
Alexandre de Bethmann
B. Anthony Delserone, Jr.
Linda A. Duessel
Donald T. Ellenberger
Kathleen M. Foody-Malus
Thomas M. Franks
Edward C. Gonzales
James E. Grefenstette
Marc Halperin
Patricia L. Heagy
Susan R. Hill
William R. Jamison
Constantine J. Kartsonas
Stephen A. Keen
Robert M. Kowit
Richard J. Lazarchic
Steven Lehman
Marian R. Marinack
William M. Painter
Jeffrey A. Petro
Keith J. Sabol
Frank Semack
Aash M. Shah
Michael W. Sirianni, Jr.
Christopher Smith
Tracy P. Stouffer
Edward J. Tiedge
Peter Vutz
Paige M. Wilhelm
George B. Wright
Jolanta M. Wysocka

Assistant Vice Presidents: Nancy J. Belz
Lee R. Cunningham, II
James H. Davis, II
Jacqueline A. Drastal
Paul S. Drotch
Salvatore A. Esposito
Donna M. Fabiano
Gary E. Farwell
Eamonn G. Folan
John T. Gentry
John W. Harris
Nathan H. Kehm
John C. Kerber
Grant K. McKay
Natalie F. Metz
Joseph M. Natoli
Ihab Salib
James W. Schaub
John Sheehy
Matthew K. Stapen
Diane Tolby
Timothy G. Trebilcock
Leonardo A. Vila
Steven J. Wagner
Lori A. Wolff

Secretary: G. Andrew Bonnewell

Treasurer: Thomas R. Donahue

Assistant Secretaries: Thomas R. Donahue
Richard B. Fisher

Assistant Treasurer: Richard B. Fisher

The business address of each of the Officers of the investment
adviser is Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, Pennsylvania 15222-3779. These individuals are also
officers of a majority of the investment advisers to the
investment companies in the Federated Fund Complex described in
Part B of this Registration Statement.

Item 27. Principal Underwriters:

(a)......Federated Securities Corp. the Distributor for shares of the Fund,
acts as principal underwriter for the following ........ open-end investment
companies, including the Registrant:

Cash Trust Series II; Cash Trust Series, Inc.; CCB Funds; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated Adjustable Rate U.S. Government Fund, Inc.;
Federated American Leaders Fund, Inc.; Federated ARMs Fund; Federated Core
Trust; Federated Equity Funds; Federated Equity Income Fund, Inc.; Federated
Fund for U.S. Government Securities, Inc.; Federated GNMA Trust; Federated
Government Income Securities, Inc.; Federated Government Trust; Federated High
Income Bond Fund, Inc.; Federated High Yield Trust; Federated Income Securities
Trust; Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Insurance Series; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Stock and Bond Fund, Inc.; Federated Stock
Trust; Federated Tax-Free Trust; Federated Total Return Series, Inc.; Federated
U.S. Government Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years;
Federated U.S. Government Securities Fund: 2-5 Years; Federated U.S. Government
Securities Fund: 5-10 Years; Federated Utility Fund, Inc.; Fixed Income
Securities, Inc.; ; Hibernia Funds; Independence One Mutual Funds; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Liberty U.S. Government Money Market Trust; Managed Series Trust; Marshall
Funds, Inc.; Money Market Management, Inc.; Money Market Obligations Trust;
Money Market Obligations Trust II; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; Regions Funds; RIGGS Funds; SouthTrust Funds;
Tax-Free Instruments Trust; The Planters Funds; The Wachovia Funds; The Wachovia
Municipal Funds; Vision Group of Funds, Inc.; World Investment Series, Inc.;
Blanchard Funds; Blanchard Precious Metals Fund, Inc.; DG Investor Series; High
Yield Cash Trust; Investment Series Trust; Star Funds; Targeted Duration Trust;
The Virtus Funds; Trust for Financial Institutions;

Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty Term Trust, Inc.- 1999.

<PAGE>

(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Richard B. Fisher Chairman, Chief Executive Vice President
Federated Investors Tower Officer, Chief Operating
1001 Liberty Avenue Officer, Asst. Secretary
Pittsburgh, PA 15222-3779 and Asst. Treasurer,
Federated Securities Corp.

Arthur L. Cherry Director --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Fisher President-Institutional Sales --
Federated Investors Tower and Director
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas R. Donahue Director, Assistant Secretary --
Federated Investors Tower and Assistant Treasurer
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

James F. Getz President-Broker/Dealer and --
Federated Investors Tower Director
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

Edward C. Gonzales Executive Vice President Executive
Federated Investors Tower Federated Securities Corp. Vice President
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Matthew W. Brown Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Mark Carroll Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Steven R. Cohen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert J. Deuberry Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark A. Gessner Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Tad Gullickson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Dayna C. Haferkamp Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Raymond Hanley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Beth A. Hetzel Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Christopher A. Layton Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael H. Liss Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Segura Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert W. Bauman Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Terri E. Bush Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John T. Glickson Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert M. Rossi Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Matthew S. Hardin Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Leslie K. Ross Assistant Secretary, Assistant Secretary
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

</TABLE>

Item 28. Location of Accounts and Records:

All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:

<S> <C>

Registrant Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(Notices should be sent to the Agent for Service at the above address)

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

Federated Shareholder Services Company P.O. Box 8600
("Transfer Agent and Dividend Boston, MA 02266-8600
Disbursing Agent")

Federated Services Company Federated Investors Tower
("Administrator") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Federated Investment Management Federated Investors Tower
Company ("Adviser") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779

State Street Bank and Trust Company P.O. Box 8600
("Custodian") Boston, MA 02266-8600
</TABLE>

Item 29. Management Services: Not applicable.

Item 30. 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.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, MONEY MARKET OBLIGATIONS TRUST,
has duly caused this Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Pittsburgh
and Commonwealth of Pennsylvania, on the 13th day of August, 1999.

MONEY MARKET OBLIGATIONS TRUST

BY: /s/ Leslie K. Ross
Leslie K. Ross, Assistant Secretary
Attorney in Fact for John F. Donahue
August 13, 1999

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/ Leslie K. Ross
Leslie K. Ross Attorney In Fact August 13, 1999
ASSISTANT SECRETARY For the Persons
Listed Below

NAME TITLE

John F. Donahue* Chairman and Trustee
(Chief Executive Officer)

J. Christopher Donahue* President

Richard J. Thomas* Treasurer(Principal Financial and
Accounting Officer)

William D. Dawson, III* Chief Investment Officer

Thomas G. Bigley* Trustee

John T. Conroy, Jr.* Trustee

John F. Cunningham* Trustee

Lawrence D. Ellis, M.D.* Trustee

Peter E. Madden* Trustee

Charles F. Mansfield, Jr.* Trustee

John E. Murray, Jr., J.D., S.J.D.* Trustee

Marjorie P. Smuts* Trustee

John S. Walsh* Trustee

* By Power of Attorney
</TABLE>