MONEY MARKET OBLIGATIONS TRUST /NEW/, 485APOS, 1999-11-17

MONEY MARKET OBLIGATIONS TRUST /NEW/
485APOS, 1999-11-17

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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. 37 ........................... X
-------- -----

and/or

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

Amendment No. 38 ........................................... 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

ALABAMA MUNICIPAL CASH TRUST

A Portfolio of Money Market Obligations Trust

A money market mutual fund seeking to provide current income exempt from federal
regular income tax and the income tax imposed by the State of Alabama consistent
with stability of principal by investing in a portfolio of high-quality Alabama
tax exempt securities maturing in 397 days or less.

As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. 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
Report of Independent Auditors

JANUARY 31, 2000

<PAGE>

RISK/RETURN SUMMARY

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
Alabama Municipal Cash Trust (Fund) is a money market fund that seeks to
maintain a stable net asset value (NAV) of $1.00 per share. The Fund's
investment objective is to provide current income exempt from federal regular
income tax and the income tax imposed by the State of Alabama 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.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests in high-quality Alabama tax exempt securities maturing in 397
days or less. The Fund will invest so that at least 80% of its annual interest
income is exempt from federal regular and Alabama state income tax or so that at
least 80% of its net assets is invested in obligations, the interest income from
which is exempt from federal regular and Alabama state income tax. Interest from
the Fund's investments may be subject to the federal alternative minimum tax for
individuals and corporations (AMT). The dollar-weighted 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 NAV, it is possible to lose
money by investing in the Fund. Because the Fund may invest a significant
portion of its assets in securities of a single issuer, an investment in the
Fund may involve additional risks compared to a fully diversified money market
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 Shares of Alabama Municipal Cash Trust (Former Fund) prior to its
reorganization into the Fund, which is a newly created portfolio of Money Market
Obligations Trust. On the date of the reorganization, February 1, 2000, the
Former Fund will be dissolved and its net assets (inclusive of liabilities
recorded on the Former Fund's records) will be transferred to the Fund.

The graphic presentation displayed here consists of a bar chart representing the
annual total returns 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 0.50% up to 4.00%

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 Former Fund 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: 2.71%, 3.67%, 3.16%, 3.30%
and 3.16%, respectively.

Historically, the Former Fund has maintained a constant $1.00 NAV 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 were sold without a sales charge (load). The total
returns displayed above are based upon NAV.

The Former Fund's total return for the nine-month period from January 1, 1999 to
September 30, 1999 was 2.20%.

Within the period shown in the Chart, the Former Fund's highest quarterly return
was 0.98% (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 Average Annual Total Returns
for the calendar periods ended December 31, 1998.

Calendar Period Former Fund 1 Year 3.16% 5 Years 3.20% Start of Performance1
3.19% 1 The Former Fund's start of performance date was December 3, 1993.
The Former Fund's 7-Day Net Yield as of December 31, 1998, was 3.35%. You may
call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.

Past performance is no guarantee of future results. This information provides
you with historical performance information so that you can analyze whether the
Fund's investment risks are balanced by its potential returns.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?

ALABAMA Municipal Cash Trust

Fees and Expenses
This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Fund.

<S> <C>

Shareholder Fees
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering None
price)
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase None
price or redemption proceeds, as applicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other None
Distributions) (as a percentage of offering price)
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None
</TABLE>

Annual Fund Operating Expenses (Before Waivers)(1) Expenses That are Deducted
From Fund Assets (as a percentage of average net assets) Management Fee(2) 0.50%
Distribution (12b-1) Fee None Shareholder Services Fee(3) 0.25% Other Expenses
0.17% Total Annual Fund Operating Expenses(4) 0.92% 1 Although not contractually
obligated to do so, the Adviser and Shareholder Services
Provider expect to waive certain amounts during the fiscal year ending
October 31, 2000. These are shown below along with the net expenses the Fund
expects to actually pay for the fiscal year ending October 31, 2000. Total
Waiver of Fund Expenses 0.37% Total Actual Annual Fund Operating Expenses
(after waivers) 0.55%
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 (after the anticipated voluntary waiver) is
expected to be 0.14% for the fiscal year ending October 31, 2000.
3 The Shareholder Services Provider expects to voluntarily waive a portion of
the shareholder services fee. The Shareholder Services Provider can terminate
this anticipated voluntary waiver at any time. The shareholder services fee
paid by the Fund (after the anticipated voluntary waiver) is expected to be
0.24% for the fiscal year ending October 31, 2000.
4 For the fiscal year ended October 31, 1999, prior to the reorganization of
the Former Fund as a portfolio of Money Market Obligations Trust, the Total
Annual Fund Operating Expenses and Total Actual Annual Fund Operating
Expenses (after waivers) for the Former Fund's Shares were 0.92% and 0.55%,
respectively.

Example
This Example is intended to help you compare the cost of investing in the Fund's
Shares 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 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 3 Years 5 Years 10 Years
$94 $293 $509 $1,131

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high-quality Alabama tax exempt securities
maturing in 397 days or less. The Fund will invest so that at least 80% of its
annual interest income is exempt from federal regular and Alabama state income
tax or so that at least 80% of its net assets is invested in obligations, the
interest income from which is exempt from federal regular and Alabama state
income tax. Interest from the Fund's investments may be subject to AMT. The
dollar-weighted average maturity of the Fund's portfolio will be 90 days or
less. The 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 statistical rating organizations (NRSROs).

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 Board'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'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.

Temporary Defensive Investments
The Fund may temporarily depart from its principal investment strategies by
investing its assets in securities subject to federal and Alabama 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?

Tax Exempt Securities
Tax exempt securities are fixed income securities that pay interest that is not
subject to federal income taxes. Fixed income securities pay interest, dividends
or distributions at a specified rate. The rate may be fixed or adjusted
periodically. The issuer must also 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.

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 397 days.

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.

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 NRSROs or be of comparable quality
to securities having such ratings.

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

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 NRSROs such as Standard
& Poor's and Moody's Investors Service. 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 on 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.

Sector Risks
A substantial part of the Fund's portfolio may be comprised of securities issued
by Alabama issuers or 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.

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 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 1:00 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 $10,000. There is no
required minimum subsequent investment amount.

An account may be opened with a smaller amount as long as the $10,000 minimum is
reached within 90 days. 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 financial institutions acting in an agency or fiduciary
capacity or to individuals directly or through investment professionals. The
Fund may not be a suitable investment for retirement plans or for non-Alabama
taxpayers because it invests in Alabama municipal securities.

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 1:00 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 (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 incurred by the Fund or Federated
Shareholder Services Company, the Fund's transfer agent.

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.

<PAGE>

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 SYSTEMATIC INVESTMENT PROGRAM
Once you have opened an account, you may automatically purchase additional
Shares on a regular basis by completing the Systematic Investment Program (SIP)
section of the New Account Form or by contacting the Fund or your investment
professional. The minimum investment amount for SIPs is $50.

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.

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 at 1-800-341-7400 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. Under limited
circumstances, arrangements may be made with the Distributor for same-day
payment of redemption proceeds, without that day's dividend, for redemption
requests received before 2:00 p.m.
(Eastern time).

<PAGE>

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.

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.

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.

<PAGE>

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.

SYSTEMATIC WITHDRAWAL PROGRAM
You may automatically redeem Shares in a minimum amount of $100 on a regular
basis. Complete the appropriate section of the New Account Form or an Account
Service Options Form or contact your investment professional or the Fund. Your
account value must meet the minimum initial investment amount at the time the
program is established. This program may reduce, and eventually deplete, your
account. Payments should not be considered yield or income.

CHECKWRITING
You may request checks to redeem your Fund Shares. Your account will continue to
receive the daily dividend declared on the Shares being redeemed until the check
is presented for payment.

DEBIT CARD
You may request a debit card account that allows you to redeem Shares. There is
an annual fee for this service that the Fund will automatically deduct from your
account.

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.

<PAGE>

ACCOUNT AND SHARE INFORMATION

Account Activity
You will receive periodic statements reporting all account activity, including
systematic transactions, 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.

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, although the Fund's dividends
will be exempt from the Alabama taxes discussed above to the extent they are
derived from interest on obligations exempt from such 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 0.50% 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.

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 Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years. Some of the information is presented
on a per share basis. Total returns represent the rate an investor would have
earned (or lost) on an investment in the Fund, assuming reinvestment of any
dividends and capital gains.

This information has been audited by Ernst & Young LLP, whose report, along with
the Fund's audited financial statements, is included in the Annual Report.

[Financial Highlights will be filed by amendment.]

<PAGE>

24
ALABAMA MUNICIPAL CASH TRUST

A Portfolio of Money Market Obligations Trust

A Statement of Additional Information (SAI) dated January 31, 2000, is
incorporated by reference into this prospectus. Additional information about the
Fund and its investments is contained in the Fund's SAI and Annual and
Semi-Annual Reports to shareholders as it becomes available. The Annual Report
discusses market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year. To obtain the SAI,
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.

You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, DC. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected]. or by writing to the SEC's Public
Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for
information on the Public Reference Room's operations and copying fees.

Investment Company Act File No. 811-5950

Cusip 000000000

000000-00 (1/00)

Statement of Additional Information

ALABAMA MUNICIPAL CASH TRUST

A Portfolio of Money Market Obligations Trust

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Alabama Municipal Cash Trust (Fund),
dated January 31, 2000. This SAI incorporates by reference the Fund's Annual
Report. Obtain the prospectus or the Annual Report without charge by calling
1-800-341-7400.

January 31, 2000

Contents
How is the Fund Organized?
Securities in Which the Fund Invests
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.?
Financial Information
Investment Ratings
Addresses
Cusip 000000000

00000000 (1/00)

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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 December 1, 1993,
will be reorganized as a portfolio of the Trust on February 1, 2000.

The Fund's investment adviser is Federated Investment Management Company
(Adviser). Effective March 31, 1999, Federated Management, former adviser to the
Fund, became Federated Investment Management Company (formerly, Federated
Advisers).

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
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 federal regular 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.
The Fund may invest in securities supported by individual leases or
pools of leases.

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
interest rate risks and credit risks of a zero coupon security.

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 the security's holders. Either
form of credit enhancement reduces credit risks by providing another
source of payment for a fixed income security.

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

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.

Asset Coverage
In order to secure its obligations in connection with special
transactions, including delayed delivery transactions, the Fund will 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
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.

U.S. Treasury Securities
U.S. Treasury securities are direct obligations of the federal government
of the United States.

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.

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.

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.

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
Securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's (S&P), MIG-1 or MIG-2
by Moody's Investors Service (Moody's), or F-1+, F-1 or F-2 by Fitch IBCA, 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 nationally recognized statistical rating organizations 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
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.

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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.

Fundamental INVESTMENT Objective and PolicY
The Fund's investment objective is to provide current income exempt from federal
regular income tax and the income tax imposed by the State of Alabama consistent
with stability of principal.

The Fund will invest so that at least 80% of its annual interest income is
exempt from federal regular and Alabama state income tax or so that at least 80%
of its net assets is invested in obligations, the interest income from which is
exempt from federal regular and Alabama state income tax.

This investment objective and policy may not be changed by the Fund's Board of
Trustees (Board) without shareholder approval.

INVESTMENT LIMITATIONS

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 will not be
deemed to constitute an industry.

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.

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 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 and Borrowing Money
The Fund may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the Investment Company Act of 1940 (1940
Act).

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.

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
1940 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 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.

Investing in Restricted Securities
The Fund may invest in securities subject to restrictions on resale under the
federal securities laws.

Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
limitation.

To conform to the current view of the Securities and Exchange Commission (SEC)
staff 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 limitation
tests so long as the policy of the SEC remains in effect. In addition,
investments in certain industrial development bonds funded by activities in a
single industry will be deemed to constitute investment in an industry, except
when held for temporary defensive purposes. The investment of more than 25% of
the value of the Fund's total assets in any one industry will constitute
"concentration."

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 Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the 1940 Act. In particular, the Fund will comply with the various
requirements of Rule 2a-7 (the Rule), which regulates money market mutual funds.
The Fund will determine the effective maturity of its investments 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 Board has 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 (NAV) 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 NAV 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 Board must establish procedures reasonably designed to stabilize the NAV 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 NAV per Share based upon available
indications of market value. The Board 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 Board will take any steps it considers 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 NAV.

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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 1940 Act,
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.

As of January __, 2000, the following shareholders owned of record,
beneficially, or both, 5% or more of outstanding Shares: _______. (To be filed
by amendment.)

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.

STATE TAXES
Under existing Alabama law, distributions made by the Fund will not be subject
to Alabama personal income taxes to the extent that such distributions are
attributable to interest earned on obligations that would be exempt from Alabama
personal income taxes if held directly by shareholders (such as obligations of
Alabama or its political subdivisions, of the United States or of certain
territories or possessions of the United States). Conversely, to the extent that
distributions made by the Fund are derived from other types of obligations, such
distributions will be subject to Alabama personal income taxes.

Shareholders may exclude from the share value of the Fund, for purposes of the
Alabama personal property tax, that portion of the total share value which is
attributable to the value of the obligations of Alabama or its political
subdivisions, of the United States or of certain territories or possessions of
the United States.

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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 38
funds and the Federated Fund Complex is comprised of 54 investment companies,
whose investment advisers are affiliated with the Fund's Adviser.

As of January __, 2000, the Fund's Board and Officers as a group owned less than
1% of the Fund's outstanding Shares.

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

Thomas G. Bigley Director or Trustee of the Federated Fund Complex; $22,998.69 $113,860.22 for the
Birth Date: February 3, 1934 Director, Member of Executive Committee, Children's Trust
15 Old Timber Trail Hospital of Pittsburgh; Director, Robroy Industries, and 54 other investment
Pittsburgh, PA Inc. (coated steel conduits/computer storage equipment); companies in the Fund
TRUSTEE formerly: Senior Partner, Ernst & Young LLP; Director, Complex
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; $20,158.88 $125,264.48 for the Trust
Birth Date: June 23, 1937 President, Investment Properties Corporation; Senior and 54 other investment
Wood/Commercial Dept. Vice President, John R. Wood and Associates, Inc., companies in the Fund
John R. Wood Associates, Inc. Realtors; Partner or Trustee in private real estate Complex
Realtors ventures in Southwest Florida; formerly: President,
3255 Tamiami Trail North Naples Property Management, Inc. and Northgate Village
Naples, FL Development Corporation.
TRUSTEE

Nicholas Constantakis Director or Trustee of the Federated Fund Complex; $0 $47,958.02 for the
Birth Date: September 3, 1939 formerly: Partner, Andersen Worldwide SC. Trust and
175 Woodshire Drive 29 other investment
Pittsburgh, PA companies
TRUSTEE in the Fund Complex

John F. Cunningham++ Director or Trustee of some of the Federated Fund $12,056.51 $0 for the Trust and 46
Birth Date: March 5, 1943 Complex; Chairman, President and Chief Executive other investment
353 El Brillo Way Officer, Cunningham & Co., Inc. (strategic business companies in the Fund
Palm Beach, FL consulting); Trustee Associate, Boston College; Complex
TRUSTEE Director, Iperia Corp. (communications/software);
formerly: Director, Redgate Communications and EMC
Corporation (computer storage systems).

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.
- -----------------------------------------------------------------------------------------------------------------------------

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

Lawrence D. Ellis, M.D.* Director or Trustee of the Federated Fund Complex; $22,998.69 $113,860.22 for the Trust
Birth Date: October 11, 1932 Professor of Medicine, University of Pittsburgh; Medical and 54 other investment
3471 Fifth Avenue Director, University of Pittsburgh Medical Center - companies in the Fund
Suite 1111 Downtown; Hematologist, Oncologist and Internist, Complex
Pittsburgh, PA University of Pittsburgh Medical Center; Member,
TRUSTEE National Board of Trustees, Leukemia Society of America.

Peter E. Madden Director or Trustee of the Federated Fund Complex; $20,158.88 $113,860.22 for the Trust
Birth Date: March 16, 1942 formerly: Representative, Commonwealth of Massachusetts and 54 other investment
One Royal Palm Way General Court; President, State Street Bank and Trust companies in the Fund
100 Royal Palm Way Company and State Street Corporation. Complex
Palm Beach, FL
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 $12,056.51 $0 for the Trust and 50
Birth Date: April 10, 1945 Complex; Management Consultant. other investment
80 South Road companies in the Fund
Westhampton Beach, NY Previous Positions: Chief Executive Officer, PBTC Complex
TRUSTEE International Bank; Partner, Arthur Young & Company (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; $20,158.88 $113,860.22 for the
S.J.D.# President, Law Professor, Duquesne University; Trust
Birth Date: December 20, 1932 Consulting Partner, Mollica & Murray; Director, Michael and 54 other investment
President, Duquesne University Baker Corp. (engineering, construction, operations and companies in the Fund
Pittsburgh, PA technical services). 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; $22,998.69 $113,860.22 for the
Birth Date: June 21, 1935 Public Relations/Marketing/Conference Planning. Trust
4905 Bayard Street and 54 other investment
Pittsburgh, PA Previous Positions: National Spokesperson, Aluminum companies in the Fund
TRUSTEE Company of America; television producer; business owner. Complex

John S. Walsh++ Director or Trustee of some of the Federated Fund $12,056.51 $0 for the Trust and 48
Birth Date: November 28, 1957 Complex; President and Director, Heat Wagon, Inc. other investment
2007 Sherwood Drive (manufacturer of construction temporary heaters); companies in the Fund
Valparaiso, IN President and Director, Manufacturers Products, Inc. Complex
TRUSTEE (distributor of portable construction heaters);
President, Portable Heater Parts, a division of
Manufacturers Products, Inc.; Director, Walsh & Kelly,
Inc. (heavy highway contractor); formerly: Vice
President, Walsh & Kelly, Inc.
- --------------------------------------------------------------------------------------------------------------------------------

Edward C. Gonzales Trustee or Director of some of the Funds in the $0 $0 for the Trust and 1
Birth Date: October 22, 1930 Federated Fund Complex; President, Executive Vice other investment
Federated Investors Tower President and Treasurer of some of the Funds in the company 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, 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 Federated $0 $0 for the Trust and 54
Birth Date: October 26, 1938 Fund Complex; Executive Vice President, Secretary and other investment
Federated Investors Tower Director, Federated Investors, Inc.; Trustee, Federated companies in the Fund
1001 Liberty Avenue Investment Management Company and Federated Investment Complex
Pittsburgh, PA Counseling; Director, Federated Global Investment
EXECUTIVE VICE PRESIDENT AND Management Corp.,, Federated Services Company and
SECRETARY Federated Securities Corp.

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

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

William D. Dawson, III Chief Investment Officer of this Fund and various other $0 $0 for the Trust and 41
Birth Date: March 3, 1949 Funds in the Federated Fund Complex; Executive Vice other investment
Federated Investors Tower President, Federated Investment Counseling, Federated companies in the Fund
1001 Liberty Avenue Global Investment Management Corp., Federated Investment Complex
Pittsburgh, PA Management Company and Passport Research, Ltd.;
CHIEF INVESTMENT OFFICER 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 is Vice President of the Trust. $0 $0 for the Trust and 6
Birth Date: September 15, 1959 Ms. Cunningham joined Federated in 1981 and has been a other investment
Federated Investors Tower Senior Portfolio Manager and a Senior Vice President of companies in the Fund
1001 Liberty Avenue the Funds' Adviser since 1997. Ms. Cunningham served as Complex
Pittsburgh, PA a Portfolio Manager and a Vice President of the Adviser
VICE PRESIDENT from 1993 until 1996.
Ms. Cunningham is a Chartered Financial Analyst and
received her M.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 and 7
Birth Date: September 12, 1953 Ochson joined Federated in 1982 and has been a Senior other investment
Federated Investors Tower Portfolio Manager and a Senior Vice President of the companies in the Fund
1001 Liberty Avenue Funds' Adviser since 1996. From 1988 through 1995, Ms. Complex
Pittsburgh, PA Ochson served as a Portfolio Manager and a Vice
VICE PRESIDENT President of the Funds' Adviser. Ms. Ochson is a
Chartered Financial Analyst and received her M.B.A. in
Finance from the University of Pittsburgh.
</TABLE>

- --------------------------------------------------------------------------------

* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the 1940 Act.

# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.

+ 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.

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.

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. 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.

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 its
audit so that it 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 October 31 1999 1998 1997
Advisory Fee Earned $ $944,018 $1,102,550
Advisory Fee Reduction $ $686,739 $774,067
Brokerage Commissions $ $0 $0
Administrative Fee $ $142,377 $166,497
Shareholder Services Fee $ -- --
</TABLE>

For the fiscal years ended October 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 February 1, 2000.

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 are given for the one-year, five-year and Start of Performance
periods ended October 31, 1999.

Yield, Effective Yield and Tax-Equivalent Yield are given for the seven-day
period ended October 31, 1999.

Performance of the Fund shown is prior to its reorganization as a portfolio of
the Trust on February 1, 2000.

Start of Performance on
7-Day Period 1 Year 5 Years December 3, 1993
Total Return NA % % %
Yield % NA NA NA
Effective Yield % NA NA NA
Tax-Equivalent Yield % NA NA NA
- ---------------------------------------------------------------------------------------------------------------
</TABLE>

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 similarly 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 AMT and
state and/or local taxes.

Taxable Yield Equivalent for 1999 - STATE OF ALABAMA

Combined Federal and State
Income Tax Bracket: 20.00% 33.00% 36.00% 41.00% 44.60%
- ----------------------------------------------------------------------------------------------------------------------
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:
2.50% 3.13% 3.73% 3.91% 4.24% 4.51%
3.00% 3.75% 4.48% 4.69% 5.08% 5.42%
3.50% 4.38% 5.22% 5.47% 5.93% 6.32%
4.00% 5.00% 5.97% 6.25% 6.78% 7.22%
4.50% 5.63% 6.72% 7.03% 7.63% 8.12%
5.00% 6.25% 7.46% 7.81% 8.47% 9.03%
5.50% 6.88% 8.21% 8.59% 9.32% 9.93%
6.00% 7.50% 8.96% 9.38% 10.17% 10.83%
6.50% 8.13% 9.70% 10.16% 11.02% 11.73%
7.00% 8.75% 10.45% 10.94% 11.86% 12.64%
</TABLE>

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 Fund; 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:

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
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
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 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 Fund 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 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.

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 the Fund for the fiscal year ended October 31, 1999
are incorporated herein by reference to the Annual Report to Shareholders of
Alabama Municipal Cash Trust dated October 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 IBCA, 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

Alabama municipal cash 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
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072

Prospectus

ARIZONA MUNICIPAL CASH TRUST

A Portfolio of Money Market Obligations Trust

institutional service shares

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

January 31, 2000

<PAGE>

RISK/RETURN SUMMARY

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
Arizona Municipal Cash Trust (Fund) is a money market fund that seeks to
maintain a stable net asset value (NAV) of $1.00 per share. The Fund's
investment objective is to provide current income exempt from federal regular
income tax and Arizona income taxes 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.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests in high-quality Arizona 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 and Arizona income taxes. Interest from the
Fund's investments may be subject to the federal alternative minimum tax for
individuals and corporations (AMT). The dollar-weighted average maturity of the
Fund's portfolio will be 90 days or less.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

<PAGE>

Risk/Return Bar Chart and Table
A performance bar chart and total return information for the Fund will be
provided after the Fund has been in operation for a full calendar year.

Average Annual Total Return Table
The Fund's 7-Day Net Yield as of December 31, 1998, was 3.07%. You may call the
Fund at 1-800-341-7400 for the current 7-Day Net Yield.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?

ARIZONA Municipal Cash Trust

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.

<S> <C>

Annual Fund Operating Expenses (Before Waivers and Reimbursements)(1) Expenses
That are Deducted From Fund Assets (as a percentage of average net assets)
Management Fee(2) 0.50% Distribution (12b-1) Fee None Shareholder Services Fee
0.25% Other Expenses(3) 1.78% Total Annual Fund Operating Expenses(4) 2.53% 1
Although not contractually obligated to do so, the Adviser expects to waive and
reimburse
certain amounts during the fiscal year ending October 31, 2000. These are shown below
along with the net expenses the Fund expects to actually pay for the fiscal year ending
October 31, 2000.
Total Waivers and Reimbursement of Fund Expenses 2.21%
Total Actual Annual Fund Operating Expenses (after waivers and 0.32%
reimbursements)
</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 (after the anticipated voluntary waiver) is
expected to be 0.00% for the fiscal year ending October 31, 2000.
3 The Adviser expects to voluntarily reimburse certain operating expenses of
the Fund. The Adviser can terminate this anticipated voluntary reimbursement
at any time. Other operating expenses paid by the Fund (after the anticipated
voluntary reimbursement) is expected to be 0.07% for the fiscal year ending
October 31, 2000.
4 For the fiscal year ended October 31, 1999, prior to the reorganization of
Arizona Municipal Cash Trust (Former Fund) as a portfolio of Money Market
Obligations Trust, the Total Annual Fund Operating Expenses and Total Actual
Annual Fund Operating Expenses (after waivers and reimbursements) for the
Former Fund's Shares were 2.53% and 0.32%, 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 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 operating expenses are before waivers and reimbursements 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 3 Years 5 Years 10 Years
$256 $788 $1,345 $2,866

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high-quality Arizona 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 and Arizona income taxes.
Interest from the Fund's investments may be subject to AMT. The dollar-weighted
average maturity of the Fund's portfolio will be 90 days or less. The Adviser
actively manages the Fund's portfolio, seeking to limit the credit risk taken by
the Fund and select investments with enhanced yields.

Temporary Defensive Investments
The Fund may temporarily depart from its principal investment strategies by
investing its assets in securities subject to federal and Arizona 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.

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

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.

Sector Risks
A substantial part of the Fund's portfolio may be comprised of securities issued
by Arizona issuers or 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.

WHAT DO SHARES COST?

The required minimum initial investment for Fund Shares is $10,000. There is no
required minimum subsequent investment amount.

HOW IS THE FUND SOLD?

The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to financial institutions acting in an agency or fiduciary
capacity or to individuals directly or through investment professionals. The
Fund may not be a suitable investment for retirement plans or for non-Arizona
taxpayers because it invests in Arizona municipal securities.

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:

<PAGE>

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 at 1-800-341-7400 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.

<PAGE>

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.

<PAGE>

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.

DEBIT CARD
You may request a debit card account that allows you to redeem Shares. There is
an annual fee for this service that the Fund will automatically deduct from your
account.

ADDITIONAL CONDITIONS

Share Certificates
The Fund does not issue share certificates.

<PAGE>

ACCOUNT AND SHARE INFORMATION

Account Activity
You will receive periodic statements reporting all account activity, including
systematic transactions, 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. 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, although the Fund's dividends
will be exempt from the Arizona taxes discussed above to the extent they are
derived from interest on obligations exempt from such 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?

FINANCIAL INFORMATION

FINANCIAL HIGHLIGHTS
The Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years, or since inception, if the life of
the Fund is shorter. Some of the information is presented on a per share basis.
Total returns represent the rate an investor would have earned (or lost) on an
investment in the Fund, assuming reinvestment of any dividends and capital
gains.

This information has been audited by Ernst & Young LLP, whose report, along with
the Fund's audited financial statements, is included in the Annual Report.

[Financial Highlights will be filed by amendment.]

<PAGE>

68
ARIZONA MUNICIPAL CASH TRUST

A Portfolio of Money Market Obligations Trust

institutional service shares

Investment Company Act File No. 811-5950

Cusip 000000000

000000-00 (1/00)

Statement of Additional Information

ARIZONA MUNICIPAL CASH TRUST

A Portfolio of Money Market Obligations Trust

institutional service shares

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Institutional Service Shares of
Arizona Municipal Cash Trust (Fund), dated January 31, 2000. This SAI
incorporates by reference the Fund's Annual Report. Obtain the prospectus or the
Annual Report without charge by calling 1-800-341-7400.

JANUARY 31, 2000

00000000 (1/00)

<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, 1988. The
Trust may offer separate series of shares representing interests in separate
portfolios of securities. The Fund, which was established on May 30, 1998, will
be reorganized as a portfolio of the Trust on February 1, 2000.

SECURITIES IN WHICH THE FUND INVESTS

SECURITIES DESCRIPTIONS AND TECHNIQUES

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

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.

Special Transactions

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

U.S. Treasury Securities
U.S. Treasury securities are direct obligations of the federal government
of the United States.

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.

Repurchase agreements are subject to credit risks.

Reverse Repurchase Agreements
Reverse repurchase agreements are repurchase agreements in which the 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.

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.

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.

Changes or proposed changes in federal tax laws may cause the prices of
municipal securities to fall.

Fundamental INVESTMENT Objective and PolicY
The Fund's investment objective is to provide current income exempt from federal
regular income tax and Arizona income taxes consistent with stability of
principal and liquidity.

At least 80% of the Fund's annual interest income will be exempt from federal
regular income tax and Arizona income taxes.

This investment objective and policy may not be changed by the Fund's Board of
Trustees (Board) without shareholder approval.

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.

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 Restricted Securities
The Fund may invest in securities subject to restrictions on resale under the
federal securities laws.

<PAGE>

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.

SUBACCOUNTING SERVICES

REDEMPTION IN KIND

MASSACHUSETTS PARTNERSHIP LAW

ACCOUNT AND SHARE INFORMATION

As of January __, 2000, the following shareholders owned of record,
beneficially, or both, 5% or more of outstanding Shares: _______. (To be filed
by amendment.)

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

STATE TAXES
Under existing Arizona law, distributions made by the Fund will not be subject
to Arizona individual or corporate income taxes to the extent that such
distributions qualify as exempt-interest dividends under Internal Revenue Code
and represent (i) interest income received on obligations of the United Sates or
its territories or possessions; and (ii) interest income received on obligations
of Arizona or its political subdivisions. Conversely, to the extent that
distributions made by the Fund are attributable to other types of obligations,
such distributions will be subject to Arizona income taxes.

<PAGE>

WHO MANAGES AND PROVIDES SERVICES TO THE FUND?

As of January __, 2000, the Fund's Board and Officers as a group owned less than
1% of the Fund's outstanding Shares.

<PAGE>

John W. McGonigle Executive Vice President and Secretary of the Federated $0 $0 for the Trust and 54
Birth Date: October 26, 1938 Fund Complex; Executive Vice President, Secretary and other investment
Federated Investors Tower Director, Federated Investors, Inc.; Trustee, Federated companies in the Fund
1001 Liberty Avenue Investment Management Company and Federated Investment Complex
Pittsburgh, PA Counseling; Director, Federated Global Investment
EXECUTIVE VICE PRESIDENT AND Management Corp., Federated Services Company and
SECRETARY Federated Securities Corp.

* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the 1940 Act.

# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.

+ 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.

INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund. The Adviser is a wholly owned subsidiary of Federated.

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.

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

INDEPENDENT auditors
The independent Auditor for the Fund, Ernst & Young LLP, plans and performs its
audit so that it 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 October 31 1999 1998*
Advisory Fee Earned $ $24,043
Advisory Fee Reduction $ $24,043
Brokerage Commissions $ $0
Administrative Fee $ $48,973
Shareholder Services Fee
Institutional Service Shares $ --
* From the Fund's inception (June 10, 1998) to October 31, 1998.

For the fiscal years ended October 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 February 1, 2000.

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 are given for the one-year, five-year and Start of Performance
periods ended October 31, 1999.

Yield, Effective Yield and Tax-Equivalent Yield are given for the seven-day
period ended October 31, 1999.

Performance of the Fund shown is prior to its reorganization as a portfolio of
the Trust on February 1, 2000.

Start of Performance on
7-Day Period 1 Year June 10, 1998
Institutional Service Shares
Total Return NA % %
Yield % NA NA
Effective Yield % NA NA
Tax-Equivalent Yield % NA NA
- --------------------------------------------------------------------------------------------------
</TABLE>

Taxable Yield Equivalent for 1999 - STATE OF ARIZONA

Combined Federal and State
Income Tax Bracket: 18.74% 32.72% 35.72% 41.04% 44.64%
- ----------------------------------------------------------------------------------------------------------------------
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:
1.50% 1.85% 2.23% 2.33% 2.54% 2.71%
2.00% 2.46% 2.97% 3.11% 3.39% 3.61%
2.50% 3.08% 3.72% 3.89% 4.24% 4.52%
3.00% 3.69% 4.46% 4.67% 5.09% 5.42%
3.50% 4.31% 5.20% 5.44% 5.94% 6.32%
4.00% 4.92% 5.95% 6.22% 6.78% 7.23%
4.50% 5.54% 6.69% 7.00% 7.63% 8.13%
5.00% 6.15% 7.43% 7.78% 8.48% 9.03%
5.50% 6.77% 8.17% 8.56% 9.33% 9.93%
6.00% 7.38% 8.92% 9.33% 10.18% 10.84%
6.50% 8.00% 9.66% 10.11% 11.02% 11.74%
7.00% 8.61% 10.40% 10.89% 11.87% 12.64%
7.50% 9.23% 11.15% 11.67% 12.72% 13.55%
8.00% 9.84% 11.89% 12.45% 13.57% 14.45%
</TABLE>

<PAGE>

Taxable Yield Equivalent for 1999 - STATE OF ARIZONA

Combined Federal and State
Income Tax Bracket: 18.20% 32.72% 35.72% 40.72% 44.64%
- ----------------------------------------------------------------------------------------------------------------------
Joint Return $1-43,050 $43,051-104,050 $104,051-158,550 $158,551-283,150 Over 283,150
Tax Exempt Yield: Taxable Yield Equivalent:
1.50% 1.83% 2.23% 2.33% 2.53% 2.71%
2.00% 2.44% 2.97% 3.11% 3.37% 3.61%
2.50% 3.06% 3.72% 3.89% 4.22% 4.52%
3.00% 3.67% 4.46% 4.67% 5.06% 5.42%
3.50% 4.28% 5.20% 5.44% 5.90% 6.32%
4.00% 4.89% 5.95% 6.22% 6.75% 7.23%
4.50% 5.50% 6.69% 7.00% 7.59% 8.13%
5.00% 6.11% 7.43% 7.78% 8.43% 9.03%
5.50% 6.72% 8.17% 8.56% 9.28% 9.93%
6.00% 7.33% 8.92% 9.33% 10.12% 10.84%
6.50% 7.95% 9.66% 10.11% 10.98% 11.74%
7.00% 8.56% 10.40% 10.89% 11.81% 12.64%
7.50% 9.17% 11.15% 11.67% 12.65% 13.55%
8.00% 9.78% 11.89% 12.45% 13.50% 14.45%
</TABLE>

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 Fund; 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.
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
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

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 Fund for the fiscal year ended October 31, 1999
are incorporated herein by reference to the Annual Report to Shareholders of
Arizona Municipal Cash Trust dated October 31, 1999.