INTERMEDIATE MUNICIPAL TRUST
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Dear Shareholder:
The Board of Trustees and Management of Intermediate Municipal Trust, on
behalf of its portfolio, Federated Ohio Intermediate Municipal Trust (the
"Fund"), are pleased to submit for your vote a proposal to sell all of the
Fund's assets to Federated Ohio Municipal Income Fund, a portfolio of Municipal
Securities Income Trust. As described in the enclosed Prospectus/Proxy
Statement, Federated Ohio Municipal Income Fund has an investment objective and
policies similar to the Fund. Both seek to provide current income exempt from
federal regular income tax and the personal income taxes imposed by the State of
Ohio.
We believe that the sale of the Fund's assets in this transaction will
present an excellent investment opportunity for our shareholders. Your vote on
the transaction is critical to its success. The sale will be effected only if
approved by the holders of a majority of the Fund's outstanding shares on the
record date. We hope you share our enthusiasm and will participate by casting
your vote in person or by proxy if your are unable to attend the meeting. Please
read the enclosed Prospectus/Proxy Statement carefully before you vote. If you
have any questions, please feel free to call us at 1-800-341-7400.
Thank you for your prompt attention and participation.
Sincerely,
LOGO
John F. Donahue
Chairman of the Board
INTERMEDIATE MUNICIPAL TRUST
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO SHAREHOLDERS OF FEDERATED OHIO INTERMEDIATE MUNICIPAL TRUST, A PORTFOLIO
OF INTERMEDIATE MUNICIPAL TRUST: A Special Meeting of Shareholders of Federated
Ohio Intermediate Municipal Trust (the "Fund") will be held at 2:00 p.m. on July
7, 1997, at Federated Investors Tower, 19th Floor, 1001 Liberty Avenue,
Pittsburgh, Pennsylvania 15222-3779 for the following purposes:
(1) To approve or disapprove a proposed Agreement and Plan of
Reorganization between Intermediate Municipal Trust, on behalf of the
Fund, and Municipal Securities Income Trust (the "Trust"), on behalf of
its portfolio, Federated Ohio Municipal Income Fund (the "Portfolio"),
whereby the Trust would acquire all of the assets of the Fund in
exchange for Class F Shares of the Portfolio to be distributed pro rata
by the Fund to holders of shares of the Fund, in complete liquidation
of the Fund; and
(2) To transact such other business as may properly come before the meeting
or any adjournment thereof.
By Order of the Board of Trustees
John W. McGonigle
Secretary
Dated: May 23, 1997
Shareholders of record at the close of business on May 9, 1997 are entitled
to vote at the meeting. Whether or not you plan to attend the meeting, please
sign and return the enclosed proxy card. Your vote is important.
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND TO SAVE THE EXPENSE OF
FURTHER MAILINGS, PLEASE MARK YOUR PROXY CARD, SIGN IT, AND RETURN IT IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. YOU
MAY REVOKE YOUR PROXY AT ANY TIME AT OR BEFORE THE MEETING OR VOTE IN PERSON IF
YOU ATTEND THE MEETING.
PROSPECTUS/PROXY STATEMENT
MAY 23, 1997
ACQUISITION OF THE ASSETS OF
FEDERATED OHIO INTERMEDIATE MUNICIPAL TRUST,
A PORTFOLIO OF INTERMEDIATE MUNICIPAL TRUST
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
TELEPHONE NUMBER: 1-800-341-7400
BY AND IN EXCHANGE FOR CLASS F SHARES OF
FEDERATED OHIO MUNICIPAL INCOME FUND,
A PORTFOLIO OF MUNICIPAL SECURITIES INCOME TRUST
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
TELEPHONE NUMBER: 1-800-341-7400
This Prospectus/Proxy Statement describes the proposed Agreement and Plan
of Reorganization (the "Plan") whereby Municipal Securities Income Trust, a
Massachusetts business trust (the "Trust"), on behalf of its portfolio,
Federated Ohio Municipal Income Fund (the "Portfolio"), would acquire all of the
assets of Federated Ohio Intermediate Municipal Trust (the "Fund"), a portfolio
of Intermediate Municipal Trust, in exchange for Class F Shares of the Portfolio
to be distributed pro rata by the Fund to its shareholders in complete
liquidation of the Fund. As a result of the Plan, each shareholder of the Fund
will become the owner of Class F Shares of the Portfolio having a total net
asset value equal to the total net asset value of his or her holdings in the
Fund.
The Trust is among over 100 funds managed by subsidiaries of Federated
Investors. Federated Investors is one of the largest institutional service
providers in the United States. It has been providing advisory services for over
41 years.
The Trust is an open-end, non-diversified management investment company
which currently includes five portfolios: Federated California Municipal Income
Fund, Federated Michigan Intermediate Municipal Trust, Federated New York
Municipal Income Fund, Federated Pennsylvania Municipal Income Fund, and the
Portfolio. The investment objective of the Portfolio is to provide current
income exempt from federal regular income tax and the personal income taxes
imposed by the State of Ohio and Ohio municipalities. The investment objective
of the Fund is to provide current income exempt from federal regular income tax
and the personal income taxes imposed by the State of Ohio. The Portfolio
pursues its investment objective by investing its assets so that at least 80% of
its annual interest income is exempt from federal regular income tax and the
personal income taxes imposed by the State of Ohio and Ohio municipalities. The
Fund pursues its investment objective by investing at least 80% of its net
assets in a portfolio of Ohio municipal securities. Both the Portfolio and the
Fund are non-diversified series of investment companies. Shares in the Portfolio
and the Fund are not insured or guaranteed by the U.S. government or any agency
thereof. For a comparison of the investment policies of the Portfolio and the
Fund, see "Comparison of Investment Policies and Risk Factors."
The Portfolio is currently offered with one class of shares: Class F Shares
(formerly, Fortress Shares). Holders of shares of the Fund will receive Class F
Shares of the Portfolio if the Reorganization
is approved by shareholders. Information concerning Class F Shares of the
Portfolio, as compared to shares of the Fund, is included in this
Prospectus/Proxy Statement in the sections entitled "SUMMARY--Investment
Objective and Policies," "Comparative Fee Tables," "Purchase and Redemption
Procedures," and "Dividends" and "COMPARISON OF INVESTMENT POLICIES AND RISK
FACTORS."
This Prospectus/Proxy Statement should be retained for future reference. It
sets forth concisely the information about the Trust and the Portfolio that a
prospective investor should know before investing. This Prospectus/Proxy
Statement is accompanied by the Prospectus of the Portfolio dated October 31,
1996, which is incorporated herein by reference. Statements of Additional
Information for the Portfolio dated October 31, 1996 (relating to the
Portfolio's prospectus of the same date) and May 23, 1997 (relating to this
Prospectus/Proxy Statement) containing additional information have been filed by
the Trust with the Securities and Exchange Commission and are incorporated
herein by reference. Further information about the Portfolio's performance is
contained in the Portfolio's Annual Report for the fiscal year ended August 31,
1996, which is incorporated herein by reference. Copies of the Statements of
Additional Information and the Annual Report may be obtained without charge by
writing or by calling the Trust at the address and telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS/ PROXY STATEMENT
AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE FUND OR THE PORTFOLIO.
SHARES OF THE PORTFOLIO ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK. SHARES OF THE PORTFOLIO ARE NOT FEDERALLY INSURED BY,
GUARANTEED BY, OBLIGATIONS OF OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENTAL AGENCY. AN INVESTMENT IN THE PORTFOLIO INVOLVES INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Proposal 1. Reorganization...................................................... 4
Summary........................................................................ 4
Comparison of Investment Policies and Risk Factors............................. 10
Information About the Reorganization........................................... 12
Information About the Portfolio and the Fund................................... 16
Voting Information............................................................. 17
Agreement and Plan of Reorganization............................................. Exhibit A
</TABLE>
PROPOSAL 1. REORGANIZATION
SUMMARY
About the Proposed Reorganization
The Board of Trustees of Intermediate Municipal Trust, including its
members who are not "interested persons" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act"), on behalf of one of its
portfolios, Federated Ohio Intermediate Municipal Trust (the "Fund"), has voted
to recommend to shareholders of the Fund the approval of an Agreement and Plan
of Reorganization (the "Plan"), whereby Municipal Securities Income Trust, a
Massachusetts business trust (the "Trust"), on behalf of its portfolio,
Federated Ohio Municipal Income Fund (the "Portfolio"), would acquire all of the
assets of the Fund in exchange for Class F Shares of the Portfolio to be
distributed pro rata by the Fund to its shareholders in complete liquidation and
dissolution of the Fund (the "Reorganization"). As a result of the
Reorganization, each shareholder of shares of the Fund will become the owner of
Class F Shares of the Portfolio having a total net asset value equal to the
total net asset value of his or her holdings in the Fund on the date of the
Reorganization (the "Closing Date").
As a condition to the Reorganization transactions, the Trust and the Fund
will receive an opinion of counsel that the Reorganization will be considered a
tax-free "reorganization" under applicable provisions of the Internal Revenue
Code of 1986, as amended, so that no gain or loss will be recognized by either
the Trust or the Fund or their respective shareholders. The tax cost-basis of
the Class F Shares of the Portfolio received by Fund shareholders will be the
same as the tax cost-basis of their shares in the Fund. Because the Portfolio
may maintain a higher percentage of its assets in securities subject to the
alternative minimum tax as compared to the Fund at the Closing Date, certain
shareholders could experience certain adverse tax consequences.
After the acquisition is completed, the Fund will no longer be available as
an investment portfolio of Intermediate Municipal Trust.
Investment Objective and Policies
The investment objective of the Portfolio is to provide current income
exempt from federal regular income tax and the personal income taxes imposed by
the State of Ohio and Ohio municipalities, while the Fund's investment objective
is to provide current income exempt from federal regular income tax and the
personal income taxes imposed by the State of Ohio. Both the Portfolio and the
Fund pursue their respective investment objectives by investing in a portfolio
consisting primarily of obligations issued by or on behalf of states,
territories, and possessions of the United States, and their respective
political subdivisions or financing authorities, which pay income exempt from
federal regular income tax and Ohio personal income taxes. The Portfolio pursues
its investment objective by investing its assets so that at least 80% of its
annual interest income is exempt from federal regular income tax and the
personal income taxes imposed by the State of Ohio and Ohio municipalities. The
Fund pursues its investment objective by investing at least 80% of its net
assets in a portfolio of Ohio municipal securities. Both the Portfolio and the
Fund are non-diversified series of investment companies. The Fund maintains a
dollar-weighted average maturity of not less than three nor more than ten years.
The
Portfolio has no such maturity limitation. Since the Portfolio and the Fund
invest in similar securities, an investment in the Portfolio presents similar
investment risks as investing in the Fund.
The securities in which the Portfolio may invest must be "investment
grade." Thus, the Portfolio's securities must be rated Aaa, Aa, A, or Baa by
Moody's Investors Service, Inc. ("Moody's"), or AAA, AA, A, or BBB by Standard &
Poor's Rating Group ("S&P") or Fitch Investors Service, Inc. ("Fitch"). The
securities in which the Fund may invest must be rated within the three highest
ratings for municipal securities by Moody's, S&P, or Fitch. In addition to the
foregoing, both the Portfolio and the Fund may invest in unrated securities if,
at the time of purchase, the investment adviser determines that such security is
of equivalent quality to securities with the applicable ratings. Due to the
difference in the dollar-weighted average maturity and rating requirements of
the Portfolio and the Fund, an investment in the Portfolio may present different
or additional investment risks.
Advisory Fees and Expense Ratios
The maximum annual investment advisory fee for the Portfolio is 0.40% of
average daily net assets. The maximum annual investment advisory fee for the
Fund is 0.50% of average daily net assets.
For its fiscal year ended August 31, 1996, the Portfolio's ratio of
expenses to average daily net assets was 0.90% for Class F Shares. During this
period the Portfolio's investment adviser, Federated Advisers ("Federated
Advisers"), voluntarily waived a portion of its management fees and reimbursed
the Portfolio for certain operating expenses. Absent such waiver and
reimbursement, the ratio of expenses to average daily net assets would have been
1.48% for Class F Shares of the Portfolio. This undertaking to waive management
fees and/or reimburse operating expenses may be terminated by Federated Advisers
at any time in its discretion.
For its fiscal year ended May 31, 1996, the Fund's ratio of expenses to
average daily net assets was 0.45%. During this period the Fund's investment
adviser, Federated Management ("Federated Management"), voluntarily waived a
portion of its management fees and reimbursed the Fund for certain operating
expenses. Absent such waiver and reimbursement, the ratio of expenses to average
daily net assets would have been 4.53%. This undertaking to waive management
fees and/or reimburse operating expenses may be terminated by Federated
Management at any time in its discretion.
Services Providers to the Trust and Portfolio
Administrative services to the Trust and Portfolio are provided by
Federated Services Company ("Federated Services"). Federated Services is a
wholly-owned subsidiary of Federated Investors. For its services to the
Portfolio, Federated Services receives a fee at an annual rate which relates to
the average aggregate daily net assets of all funds administered by Federated
Services in the Federated Investors complex, determined as follows: 0.15% on the
first $250 million in assets; 0.125% on the next $250 million in assets; 0.10%
on the next $250 million in assets; and 0.075% on assets in excess of $750
million. The minimum annual administrative fee for the Portfolio is $125,000
plus $30,000 per each additional class of shares. For the fiscal year ended
August 31, 1996, Federated Services received administrative fees at the
effective rate of 0.18% of the average daily net assets of the Portfolio.
Federated Services also serves as the Portfolio's transfer agent and
dividend disbursing agent. Federated Services also provides certain accounting
and recordkeeping services with respect to the portfolio investments of the
Portfolio.
Federated Securities Corp. ("FSC"), a wholly-owned subsidiary of Federated
Investors, is the principal distributor of the Trust and Portfolio. Under a
distribution agreement, FSC acts as the Trust's agent in connection with the
offering of shares of the Portfolio.
Federated Services serves as the administrator, transfer agent and dividend
disbursing agent, and portfolio accountant and recordkeeper for the Fund under
the same fee schedules applicable to the Portfolio. In addition, FSC is the
principal distributor of Intermediate Municipal Trust and the Fund.
Comparative Fee Tables
Set forth in the tables below is information regarding the fees and
expenses paid by the Fund and Class F Shares of the Portfolio as of August 31,
1996, and pro forma information for the Portfolio assuming that the
Reorganization had taken place on August 31, 1996.
<TABLE>
<CAPTION>
FEDERATED OHIO
MUNICIPAL
INCOME FUND FEDERATED OHIO PRO FORMA
CLASS F SHARES INTERMEDIATE COMBINED FUND
(THE MUNICIPAL TRUST CLASS F
"PORTFOLIO") (THE "FUND") SHARES
--------------- --------------- -------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a percentage
of offering price)........................................ 1.00% None 1.00%
Maximum Sales Charge Imposed on Reinvested Dividends (as a
percentage of offering price)............................. None None None
Contingent Deferred Sales Charge (as a percentage of
original purchase price or redemption proceeds, as
applicable)............................................... 1.00%(1) None 1.00%(1)
Redemption Fees (as a percentage of amount redeemed, if
applicable)............................................... None None None
Exchange Fee................................................ None None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees/Advisory Fees (after fee waivers) (2)....... 0.07% 0.00% 0.07%
12b-1 Fees (after waivers).................................. 0.16%(3) None 0.16%(3)
Shareholder Services Fee (after waivers) (4)................ 0.24% 0.10% 0.24%
Other Expenses (after fee waivers and/or expense
reimbursements)........................................... 0.43% 0.35% 0.43%
Total Operating Expenses (after fee waivers and/or
expense reimbursements................................ 0.90%(5) 0.45%(6) 0.90%(5)
</TABLE>
(1) The contingent deferred sales charge is 1.00% of the lesser of the original
purchase price or the net asset value of shares redeemed within four years of
their purchase date. If the Reorganization is completed, current shareholders of
the Fund would not be subject to the contingent deferred sales charge.
(2) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary waiver
at any time at its sole discretion. The maximum management fee of the Portfolio
and the Pro Forma Combined Fund is 0.40%. The maximum fee of the Fund is 0.50%.
(3) The Portfolio and the Pro Forma Combined Fund 12b-1 fee has been reduced to
reflect the voluntary waiver of a portion of the 12b-1 fee. The 12b-1 fee
provider can terminate this voluntary waiver at any time at its sole discretion.
The maximum 12b-1 fee is 0.40%.
(4) The shareholder services fee has been reduced to reflect the voluntary
waiver of the shareholder services fee. The shareholder service provider can
terminate this voluntary waiver at any time at its sole discretion. The maximum
shareholder services fee for the Portfolio, the Fund and the Pro Forma Combined
Fund is 0.25%.
(5) The total operating expenses would have been 1.48% absent the voluntary
waiver of a portion of the management fee, the shareholder services fee, and the
12b-1 fee.
(6) The total operating expenses would have been 4.53% absent the voluntary
waiver of the management fee, a portion of the shareholder services fee, and the
voluntary reimbursement of certain other operating expenses.
LONG TERM SHAREHOLDERS MAY PAY MORE THAN THE ECONOMIC EQUIVALENT OF THE
MAXIMUM FRONT-END SALES CHARGE PERMITTED UNDER THE RULES OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder will bear, either directly or
indirectly. Wire-transferred redemption of less than $5,000 may be subject to
additional fees.
EXAMPLES
The Examples below are intended to assist an investor in understanding the
various costs that an investor will bear directly or indirectly. The Examples
assume payment of operating expenses at the levels set forth in the table above.
(1) This Example does not include sales charges or contingent deferred
sales charges since such sales charges are not applicable to the Portfolio Class
F Shares received as a result of the proposed reorganization.
An investor would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return, and (2) redemption at the end of each time
period. Expenses would be the same if there were no redemption at the end of
each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Federated Ohio Municipal Income Fund (Class F Shares)... $ 9 $29 $50 $111
Federated Ohio Intermediate Municipal Trust............. $ 5 $14 $25 $ 57
Pro Forma Combined Fund (Class F Shares)................ $ 9 $29 $50 $111
</TABLE>
(2) This Example includes sales charges since Portfolio Class F Shares
purchased subsequent to the reorganization may be subject to sales charges.
An investor would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return, (2) redemption at the end of each time period,
and (3) payment of the maximum sales charge.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Federated Ohio Municipal Income Fund (Class F Shares)... $ 29 $50 $59 $120
Federated Ohio Intermediate Municipal Trust............. $ 5 $14 $25 $ 57
Pro Forma Combined Fund (Class F Shares)................ $ 29 $50 $59 $120
</TABLE>
An investor would pay the following expenses, assuming no redemption.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Federated Ohio Municipal Income Fund (Class F Shares)... $ 19 $38 $59 $120
Federated Ohio Intermediate Municipal Trust............. $ 5 $14 $25 $ 57
Pro Forma Combined Fund (Class F Shares)................ $ 19 $38 $59 $120
</TABLE>
THE ABOVE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
As a result of the Reorganization, the expense ratio of the Fund will
increase by 0.45%.
Purchase and Redemption Procedures
Procedures for the purchase and redemption of Portfolio shares are similar,
but not identical, to procedures applicable to the purchase and redemption of
Fund shares. In anticipation that the Reorganization will be consummated,
shareholders of the Fund will receive information with respect to the various
services provided by the Portfolio, as well as a detailed explanation of the
options available to shareholders for effecting purchases and redemptions of
Portfolio shares. Any questions about such
procedures may be directed to, and assistance in effecting purchases or
redemptions of Portfolio shares may be obtained by calling the Portfolio at
1-800-341-7400.
Reference is made to the Prospectus of the Portfolio dated October 31,
1996, and the Prospectus of the Fund for a complete description of the purchase
and redemption procedures applicable to purchases and redemptions of Portfolio
and Fund shares, respectively, each of which is incorporated herein by reference
thereto. Set forth below is a brief listing of the more significant differences
between the purchase and redemption procedures of the Portfolio as compared to
the Fund.
Shares of the Portfolio are subject to a maximum sales charge on purchases
of 1.00% of the offering price and a contingent deferred sales charge of up to
1.00%. Shares of the Fund are available for purchase without the imposition of a
sales charge on purchases or a contingent deferred sales charge. Shareholders of
the Fund will not pay a sales charge on shares of the Portfolio received in the
Reorganization, if approved by shareholders. In addition, redemptions of shares
received in the Reorganization will not be subject to the contingent deferred
sales charge. Trust and Institutional customers are exempt from the sales charge
and contingent deferred sales charge. The minimum initial investment in the
Portfolio is $1,500.00. The minimum initial investment by an institution in the
Fund is $25,000.00. To meet the minimum investment requirements, purchases of
shares of the Fund may be aggregated over a period of 90 days.
The Fund's and the Portfolio's net asset values are calculated at the close
of each day on which each computes its net asset value. Purchase orders received
by either the Portfolio or the Fund by wire before 1:00 p.m. (Eastern time)
begin earning dividends that day. Purchase orders received by check by either
the Portfolio or the Fund begin earning dividends the day after such check is
converted into federal funds, which ordinarily occurs one day after receipt by
State Street Bank and Trust Company, the Fund's and the Portfolio's custodian.
Shares of the Portfolio may also be purchased at a given day's price if an order
is placed through a financial institution, including a registered broker/dealer,
and if the purchase order is received by 4:00 p.m. and transmitted to the
Portfolio by 5:00 p.m., in the case of a broker/dealer, or 4:00 p.m., in the
case of a financial institution other than a broker/dealer.
Shares of both the Portfolio and the Fund may be redeemed by mail or by
telephone. Shares of the Fund are redeemed at the net asset value per share next
determined after receiving the redemption order. Shares of the Portfolio are
subject to a contingent deferred sales charge of 1.00% of the lesser of the
original purchase price or the net asset value of shares redeemed within four
years of their purchase date.
Dividends
The Fund's dividends are declared daily and paid monthly. In contrast, the
Portfolio's dividends are declared and paid monthly to all shareholders invested
in the Portfolio on the record date. Dividends paid by both the Fund and the
Portfolio are automatically reinvested in additional shares unless shareholders
request cash payment. Dividends reinvested in Portfolio shares are purchased at
net asset value without a sales charge.
COMPARISON OF INVESTMENT POLICIES AND RISK FACTORS
Investment Objectives and Policies
The Portfolio and the Fund have similar investment objectives. The
investment objective of the Portfolio is to provide current income exempt from
federal regular income tax and the personal income taxes imposed by the State of
Ohio and Ohio municipalities. The investment objective of the Fund is to provide
current income exempt from federal regular income tax and the personal income
taxes imposed by the State of Ohio.
The Portfolio invests its assets so that at least 80% of its annual
interest income is exempt from federal regular income tax and the personal
income taxes imposed by the State of Ohio and Ohio municipalities. The Fund
pursues its investment objective by investing at least 80% of its net assets in
a non-diversified portfolio of Ohio municipal securities. In addition, the Fund
maintains a dollar-weighted average maturity of not less than three nor more
than ten years. The Portfolio has no such maturity limitation.
Each of the Portfolio and the Fund invests in municipal securities which
pay interest that is, in the opinion of bond counsel for the issuers or in the
opinion of officers of the investment adviser of the Portfolio or the Fund,
respectively, exempt from both federal regular income tax and the personal
income taxes imposed by the State of Ohio (the "Municipal Securities"). The
Municipal Securities in which the Portfolio and the Fund invest are: (1)
obligations issued by or on behalf of the State of Ohio, its political
subdivisions, or agencies; (2) debt obligations of any state, territory, or
possession of the United States, including the District of Columbia, or any
political subdivision of any of these; and (3) participation interests in any of
the foregoing obligations.
The Municipal Securities in which the Portfolio may invest must be
"investment grade." Thus, the Portfolio's Municipal Securities must be rated
Aaa, Aa, A, or Baa, by Moody's Investors Service, Inc. ("Moody's"), or AAA, AA,
A, or BBB by Standard & Poor's Ratings Group ("S&P") or Fitch Investors Service,
Inc. ("Fitch"). The Municipal Securities in which the Fund may invest must be
rated within the three highest ratings for municipal securities by Moody's, S&P,
or Fitch. In addition to the foregoing, both the Portfolio and the Fund may
invest in unrated Municipal Securities if, at the time of purchase, the
investment adviser determines that such security is of equivalent quality to
securities with the applicable ratings. In addition, the Fund may invest in
Municipal Securities which are: (1) guaranteed at the time of purchase by the
U.S. government as to the payment of principal and interest; (2) fully
collateralized by an escrow of U.S. government securities or other securities
acceptable to the investment adviser; (3) rated at the time of purchase within
Moody's highest short-term municipal obligation rating (MIG 1/VMIG 1) or Moody's
highest municipal commercial paper rating (PRIME-1) or S&P's highest municipal
commercial paper rating (SP-1); or (4) unrated if, at the time of purchase,
other municipal securities of that issuer are rated A or better by Moody's, S&P,
or Fitch. Finally, both the Portfolio and the Fund may retain a Municipal
Security that is downgraded if the investment adviser determines that such
security continues to be an acceptable investment.
Both the Portfolio and the Fund may purchase participation interests from
financial institutions such as commercial banks, savings associations, and
insurance companies. Participation interests give the Portfolio and the Fund
undivided interests in Ohio Municipal Securities. The financial institutions
from which the Portfolio or the Fund may purchase participation interests
frequently provide or secure irrevocable letters of credit or guarantees to
assure that the participation interests are of high quality.
Both the Portfolio and the Fund may also invest in variable rate Municipal
Securities. The variable interest rates of the Municipal Securities are
ordinarily stated as a percentage of a published interest rate, interest rate
index, or a similar standard, such as the 91-day U.S. Treasury bill rate. Many
of the variable rate Municipal Securities are subject to payment of principal on
demand by the Portfolio or the Fund in not more than seven days.
Both the Portfolio and Fund may also invest in municipal leases. Municipal
leases are obligations issued by state and local governments or authorities to
finance the acquisition of equipment and facilities and may be considered
illiquid. The Fund restricts the ability to invest in "non-appropriation" leases
to not more than ten percent of its total assets. Lease obligations that contain
"non-appropriation" clauses provide that the municipality has no obligation to
make lease or installment purchase payments in future years unless money is
appropriated for such purpose on a yearly basis. The Portfolio does not include
this limitation.
Both the Portfolio and the Fund may also purchase Municipal Securities on a
when-issued or delayed delivery basis. In these transactions, the Portfolio or
the Fund may purchase securities with payment and delivery scheduled for a
future time so long as sufficient assets are segregated in the transactions. A
seller's failure to complete these transactions may cause the Portfolio or the
Fund to miss a price or yield considered to be advantageous.
Finally, both the Portfolio and the Fund may invest in temporary
investments, which may include short-term non-Ohio municipal tax-exempt
obligations or taxable temporary investments. Both the Portfolio and the Fund
invest in temporary investments when the investment adviser determines the
market conditions call for a temporary defensive posture. The temporary
investments include: (1) notes issued by or on behalf of municipal corporate
issuers; (2) obligations issued or guaranteed by the U.S. government, its
agencies, or instrumentalities; (3) other debt securities; (4) commercial paper;
(5) certificates of deposit of banks; and (6) repurchase agreements. There are
no rating requirements applicable to temporary investments, with the exception
of the Fund's investment in temporary municipal securities, which are subject to
the same rating requirements as all other Municipal Securities in which the Fund
invests. Neither the Portfolio nor the Fund is subject to a percentage
limitation applicable to temporary investments.
Investment Restrictions
The investment restrictions of the Portfolio and the Fund are similar. The
significant differences are as follows. Although neither the Portfolio nor the
Fund intend to invest more than 10% of its assets in securities that may be
illiquid because of legal contractual restrictions on resale ("restricted
securities") or securities for which there are no readily available market
quotations, only the Portfolio requires majority shareholder approval in order
to change the limitation relating to restricted securities. In addition,
although neither the Portfolio nor the Fund intends to invest in puts, calls,
straddles, spreads, or any combination of these securities, only the Portfolio
requires majority shareholder approval in order to permit investments in these
securities.
Risk Factors
The risks associated with an investment in the Portfolio and the Fund are
similar. The nature of the Municipal Securities included in each of the
Portfolio's and Fund's investments are generally subject to the same factors,
including: the general conditions of the municipal bond market; the size of the
particular offering; the maturity of the obligations; and the rating of the
issue. Further, adverse economic conditions or developments affecting the State
of Ohio or its municipalities could impact the Portfolio's or the Fund's
investments. Shareholders of the Fund should consider two differences in the
investment policies of the Fund and the Portfolio that may present different or
additional risk. First, the Portfolio is not subject to a dollar-weighted
maturity limitation. The Fund is required to maintain a dollar-weighted maturity
of not less than three nor more than ten years. Because the Portfolio is not
subject to a maturity limitation and can maintain a dollar-weighted maturity of
less than three years or more than ten years, an investment in the Portfolio may
present shareholders with risks and opportunities different than those presented
by an investment in the Fund. Second, because the Portfolio may invest in
Municipal Securities that are rated in the four highest rating categories by
Moody's, S&P, or Fitch, an investment in the Portfolio may be subject to
additional investment risk as compared to the Fund, which limits its purchase of
Municipal Securities to those rated in the three highest categories. Securities
rated in the fourth highest rating category are considered to have some
speculative characteristics and are more vulnerable to changes in economic
conditions, higher interest rates, or adverse issuer-specific developments which
are likely to lead to a weaker capacity to make principal and interest payments
than comparable higher rated debt securities.
INFORMATION ABOUT THE REORGANIZATION
Background and Reasons for the Proposed Acquisition
The Fund commenced operations on December 2, 1993, in order to provide
financial institutions serving in a fiduciary capacity with an investment
vehicle which provided current income exempt from federal regular income tax and
the personal income taxes imposed by the State of Ohio. Federated Securities
Corp. ("FSC"), the distributor of shares of both the Fund and the Portfolio, has
proposed that the Fund consider a sale of all of the Fund's assets to the Trust,
acting on behalf of the Portfolio.
In considering the proposed Reorganization, the Board of Trustees of
Intermediate Municipal Trust took into consideration a number of factors,
including: (1) the comparatively larger size of the Portfolio, (2) the
capabilities and resources of Federated Advisers, (3) expense ratios and
published information regarding the fees and expenses of the Portfolio in
relation to similar funds, (4) the fact that Federated Management had advised
the Board that, if the Reorganization is not completed, it will consider
discontinuing the waiver of its investment advisory fee and its reimbursement of
certain Fund operating expenses; (5) the comparative investment performance of
the Portfolio and the Fund as well as the performance of similar funds, (6) the
terms and conditions of the Reorganization and whether the Reorganization would
result in the dilution of shareholder interests, (7) the tax consequences of the
Reorganization, and (8) the compatibility of the Portfolio's and the Fund's
investment objectives, policies, restrictions and portfolios, as well as service
features available to shareholders in the respective funds.
The Board concluded to recommend that the shareholders of the Fund vote to
approve the Reorganization. Pursuant to Rule 17a-8 under the 1940 Act, the Board
of Trustees of Intermediate Municipal Trust, including a majority of the
Trustees who were not interested persons of either Intermediate Municipal Trust
or the Trust, determined that participation in the transaction was in the best
interests of the Fund's shareholders and that the interests of existing Fund
shareholders would not be diluted as a result of effecting the transaction. This
conclusion was based on a number of factors, including the following:
1. The Reorganization would permit the shareholders of the Fund to pursue
substantially the same investment goals in a larger fund. A larger fund
should enhance the ability of portfolio managers to effect their
portfolio transactions on more favorable terms and give portfolio
managers greater investment flexibility and the ability to select a
larger number of portfolio securities, with the attendant ability to
spread investment risks over a larger number of portfolio issues.
2. The 30-day yield of the Portfolio for the period ended August 31, 1996,
was 5.06%. The 30-day yield of the Fund for the period ended May 31,
1996, was 4.91%. Over other periods the performance of the Portfolio and
the Fund in relation to each other have varied, in part due to differing
expense waivers by the respective investment advisers.
3. The current waiver of investment advisory fees charged to the Fund by
Federated Management might be discontinued, as well as Federated
Management's reimbursement of certain Fund operating expenses.
The Board of Trustees of Municipal Securities Income Trust likewise
considered the Reorganization and approved the Plan on behalf of the Portfolio.
Pursuant to Rule 17a-8 under the 1940 Act, the Board of Trustees of Municipal
Securities Income Trust, including a majority of the Trustees who were not
interested persons of either Intermediate Municipal Trust or the Trust,
determined that participation in the transaction was in the best interests of
the Portfolio's shareholders and that the interests of existing Portfolio
shareholders would not be diluted as a result of effecting the transaction.
Description of the Plan of Reorganization
The Plan provides that the Trust, on behalf of the Portfolio, will acquire
all of the assets of the Fund in exchange for Class F Shares of the Portfolio to
be distributed pro rata by the Fund to the holders of Fund shares in complete
liquidation of the Fund on or about July 11, 1997. Fund shareholders will
receive a number of shares in the Portfolio equal to the same total net asset
value as the Fund shares they held immediately prior to the Closing.
Shareholders of the Fund will become shareholders of the Portfolio as of 5:00
p.m. (Eastern time) on the Closing Date. Shareholders of the Fund will earn
their last dividend from the Fund on the day preceding the Closing Date, which
Closing Date is expected to be July 11, 1997.
Consummation of the Reorganization is subject to the conditions set forth
in the Plan, including receipt of an opinion in form and substance satisfactory
to Intermediate Municipal Trust, on behalf of the Fund, and the Trust, on behalf
of the Portfolio, as described under the caption "Federal Income Tax
Consequences" below. The Plan may be terminated and the Reorganization may be
abandoned at any
time before or after approval by shareholders of the Fund prior to the Closing
Date by either party if it believes that consummation of the Reorganization
would not be in the best interests of its shareholders.
Federated Advisers is responsible for the payment of all expenses of the
Reorganization, whether or not the Reorganization is consummated. Such expenses
include, but are not limited to: legal fees; registration fees; transfer taxes
(if any); the fees of banks and transfer agents; and the costs of preparing,
printing, copying, and mailing proxy solicitation materials to the Fund's
shareholders and the costs of holding the Special Meeting of Shareholders.
The foregoing description of the Plan entered into between the Trust, on
behalf of the Portfolio, and Intermediate Municipal Trust, on behalf of the
Fund, is qualified in its entirety by the terms and provisions of the Plan, a
copy of which is attached hereto as Exhibit A and incorporated herein by
reference.
Description of Portfolio Shares
Class F Shares of the Portfolio to be issued to shareholders of the Fund
under the Plan will be fully paid and nonassessable when issued, transferable
without restrictions and will have no preemptive or conversion rights. Reference
is hereby made to the Prospectus of the Portfolio provided herewith for
additional information about Class F Shares of the Portfolio.
Federal Income Tax Consequences
As a condition to the Reorganization transactions, the Trust, on behalf of
the Portfolio, and Intermediate Municipal Trust, on behalf of the Fund, will
receive an opinion from Howard & Howard Attorneys, P.C., to the effect that, on
the basis of the existing provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), current administrative rules and court decisions, for
federal income tax purposes: (1) the Reorganization as set forth in the Plan
will constitute a tax-free reorganization under section 368(a)(1)(C) of the
Code; (2) no gain or loss will be recognized by the Portfolio upon its receipt
of the Fund's assets in exchange for Portfolio shares; (3) the holding period
and basis for the Fund's assets acquired by the Portfolio will be the same as
the holding period and the basis to the Fund immediately prior to the
Reorganization; (4) no gain or loss will be recognized by the Fund upon transfer
of its assets to the Portfolio in exchange for Portfolio shares or upon the
distribution of the Portfolio shares to the Fund's shareholders in exchange of
their Fund shares; (5) no gain or loss will be recognized by shareholders of the
Fund upon exchange of their Fund shares for Portfolio shares; (6) the holding
period of Portfolio shares received by shareholders of the Fund pursuant to the
Plan will be the same as the holding period of Fund shares held immediately
prior to the Reorganization, provided the Fund shares were held as capital
assets on the date of the Reorganization; and (7) the basis of Portfolio shares
received by shareholders of the Fund pursuant to the Plan will be the same as
the basis of Fund shares held immediately prior to the Reorganization. The Fund
does not intend to sell portfolio securities in anticipation of the
Reorganization, other than in the normal course of business, which would result
in recognition of gains or losses to the Fund and its shareholders.
Comparative Information on Shareholder Rights and Obligations
The Trust is organized as a Massachusetts business trust pursuant to a
Declaration of Trust dated August 6, 1990, under the laws of the Commonwealth of
Massachusetts. Intermediate Municipal Trust is also organized as a Massachusetts
business trust under a Declaration of Trust dated May 31, 1985. The rights of
shareholders of the Trust and of Intermediate Municipal Trust are identical. Set
forth below is a brief summary of the more significant similarities between
rights of shareholders of the Fund and the Portfolio.
Special meetings of both the Fund's and the Portfolio's shareholders may be
called for any purpose on the written request of shareholders entitled to cast
at least ten percent (10%) of all votes entitled to be cast at the meeting.
Special meetings of the Fund's and the Portfolio's shareholders may also be
called by the Trustees or the Chief Executive Officer of Intermediate Municipal
Trust or the Trust, respectively. Shareholders of the Fund and the Portfolio are
entitled to at least fifteen days' notice of any meeting.
The Declaration of Trust of both Intermediate Municipal Trust and the Trust
provide that shareholders shall have the following voting powers: (i) to vote
for the election of Trustees; (ii) to vote with respect to any investment
advisory or sub-advisory contract entered into on behalf of any series; (iii) to
vote to the same extent as shareholders of a Massachusetts business corporation
as to whether or not a court action, proceeding, or claim should or should not
be brought derivatively or as a class action on behalf of the trust, any series,
or the shareholders; (iv) to vote for the removal of Trustees; (v) to vote on
amendments or supplements to the Declaration of Trust; and (vi) to vote on such
additional matters as required by the Declaration of Trust, the By-laws, the
registration statement, or the Securities and Exchange Commission.
Under certain circumstances, shareholders of the Fund or the Portfolio may
be held personally liable as partners under Massachusetts law for acts or
obligations of Intermediate Municipal Trust or the Trust, respectively. To
protect shareholders of the Fund and the Portfolio, the Declarations of Trust
expressly disclaim the liability of shareholders for acts or obligations of the
Fund and the Portfolio. The Declarations of Trust provide that a notice of the
disclaimer of liability may be included in each agreement, obligation, or
instrument that either Intermediate Municipal Trust or the Trust may enter into.
In the unlikely event that a shareholder of either the Fund or the
Portfolio is held personally liable for obligations of the Fund or the
Portfolio, the Declarations of Trust provide that property of the Fund or the
Portfolio will be used to protect or compensate the shareholder. On request,
claims are defended and judgments against shareholders are paid that arise out
of any act or obligation of Intermediate Municipal Trust or the Trust on behalf
of the Fund or the Portfolio, respectively. Therefore, financial loss resulting
from liability as a shareholder will occur only if Intermediate Municipal Trust
or the Trust cannot meet its obligations to indemnify shareholders and pay
judgments against them from the assets of the Fund or the Portfolio,
respectively.
Capitalization
The following table shows the capitalization of the Portfolio and the Fund
as of February 28, 1997, and on a pro forma basis as of that date:
<TABLE>
<CAPTION>
PRO FORMA
PORTFOLIO COMBINED
(CLASS F SHARES) FUND (CLASS F SHARES)
---------------- ---------- ----------------
<S> <C> <C> <C>
Net Assets.................................. $ 67,616,569 $8,820,015 $ 76,436,584
Price Per Share............................. $ 11.38 $ 9.95 $ 11.38
Shares Outstanding.......................... 5,944,265 886,561 6,719,645
</TABLE>
INFORMATION ABOUT THE PORTFOLIO AND THE FUND
Federated Ohio Municipal Income Fund, a portfolio of Municipal Securities Income
Trust
Information about the Trust and the Portfolio is contained in the
Portfolio's current Prospectus. A copy of the prospectus is included herewith
and incorporated by reference herein. Additional information about the Trust and
the Portfolio is included in the Portfolio's Statement of Additional Information
dated October 31, 1996, which is incorporated herein by reference. Copies of the
Statement of Additional Information, as well as the Statement of Additional
Information relating to this Prospectus/Proxy Statement dated May 23, 1997, both
of which have been filed with the Securities and Exchange Commission, may be
obtained without charge by contacting the Trust at 1-800-341-7400 or by writing
to the Trust at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779.
The Trust, on behalf of the Portfolio, is subject to the informational
requirements of the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, and the Investment Company Act of 1940, as amended, and
in accordance therewith files reports and other information with the Securities
and Exchange Commission. Reports, proxy and information statements, and other
information filed by the Trust, on behalf of the Portfolio, can be obtained by
calling or writing the Trust and can also be inspected and copied by the public
at the public reference facilities maintained by the Securities and Exchange
Commission in Washington, D.C. located at Room 1024, 450 Fifth Street, N.W.,
Washington D.C. 20549 and at certain of its regional offices located at Room
1204, Everett McKinley Dirksen Building, 219 South Dearborn Street, Chicago,
Illinois 60604 and 14th Floor, 75 Park Place, New York, New York 10007. Copies
of such material can be obtained at prescribed rates from the Public Reference
Branch, Office of Consumer Affairs and Information Services, Securities and
Exchange Commission, Washington D.C. 20549, or obtained electronically from the
Securities and Exchange Commission's Internet Web site (http://www.sec.gov).
This Prospectus/Proxy Statement, which constitutes part of a Registration
Statement filed by the Trust, on behalf of the Portfolio, with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, omits
certain of the information contained in the Registration Statement. Reference is
hereby made to the Registration Statement and to the exhibits thereto for
further information with respect to the Trust, the Portfolio and the shares
offered hereby. Statements contained herein concerning the provisions of
documents are necessarily summaries of such documents, and each
such statement is qualified in its entirety by reference to the copy of the
applicable documents filed with the Securities and Exchange Commission.
Federated Ohio Intermediate Municipal Trust, a portfolio of Intermediate
Municipal Trust
Information about the Fund may be found in the Fund's current Prospectuses
dated July 31, 1996, and its Statement of Additional Information dated July 31,
1996, which are incorporated herein by reference. Financial Statements for the
Fund for the year ended May 31, 1996, may be found in the Fund's prospectus.
Copies of the Fund's Prospectus and Statement of Additional Information may be
obtained without charge from the Fund by calling 1-800-341-7400 or by writing to
the Fund at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779. A
copy of the Statement of Additional Information relating to this
Prospectus/Proxy Statement may be obtained without charge from Intermediate
Municipal Trust by calling 1-800-341-7400 or by writing to Intermediate
Municipal Trust at Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779. The Fund is subject to the information requirements of the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, and the Investment Company Act of 1940, as amended, and in accordance
therewith files reports and other information with the Securities and Exchange
Commission. Reports, proxy and information statements, and other information
filed by the Fund can be obtained by calling or writing the Fund and can also be
inspected at the public reference facilities maintained by the Securities and
Exchange Commission at the addresses listed in the previous section.
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with the
solicitation by the Board of Trustees of the Fund of proxies for use at the
Special Meeting of Shareholders (the "Meeting") to be held on July 7, 1997 and
at any adjournment thereof. The proxy confers discretionary authority on the
persons designated therein to vote on other business not currently contemplated
which may properly come before the Meeting. A proxy, if properly executed, duly
returned, and not revoked, will be voted in accordance with the specifications
thereon; if no instructions are given, such proxy will be voted in favor of the
Plan. A shareholder may revoke a proxy at any time prior to use by filing with
the Secretary of the Fund an instrument revoking the proxy, or by submitting a
proxy bearing a later date, or by attending and voting at the Meeting. Proxies,
instruments revoking a proxy, or proxies bearing a later date may be
communicated by telephone, by electronic means including facsimile, or by mail.
The cost of the solicitation, including the printing and mailing of proxy
materials, will be borne by Federated Advisers. In addition to solicitations
through the mails, proxies may be solicited by officers, employees, and agents,
including third party solicitors, of the Fund at no additional costs to the
Fund. Such solicitations may be by telephone, telegraph, or otherwise. Any
telephonic solicitations will follow procedures designed to ensure accuracy and
prevent fraud including requiring identifying shareholder information, recording
the shareholder's instructions, and delivering a written confirmation of the
shareholder's instructions. Shareholders who communicate proxies by telephone or
by other electronic means have the same power and authority to issue, revoke, or
otherwise change their voting instructions as currently exists for instructions
communicated in written form. Federated Advisers will reimburse custodians,
nominees, and fiduciaries for the reasonable costs incurred by them in connec-
tion with forwarding solicitation materials to the beneficial owners of shares
held of record by such persons.
Outstanding Shares and Voting Requirements
The Board of Trustees of the Fund has fixed the close of business on May 9,
1997, as the record date for the determination of shareholders entitled to
notice of and to vote at the Special Meeting of Shareholders and any adjournment
thereof. As of the record, date, there were 881,394 shares of the Fund
outstanding. Each Fund share is entitled to one vote and fractional shares have
proportionate voting rights. On the record date, the following persons of record
owned 5% or more of the Fund's outstanding shares: DEFCO, Defiance, OH, owned
approximately 204,065 shares (23.15%); Holdon, Findlay, OH, owned approximately
187,905 shares (21.32%); Lorban & Company, Elyria, OH, owned approximately
104,694 shares (11.88%); National Financial Services, New York, NY, acting in
various capacities for numerous accounts, owned approximately 103,887 shares
(11.79%); Parcol & Co., Akron, OH, owned approximately 63,249 shares (7.18%);
Grand Old Co., Zanesville, OH, owned approximately 53,326 shares (6.05%). On
such date, no other person owned of record, or to the knowledge of the Fund,
beneficially owned, 5% or more of the Fund's outstanding shares. On the record
date, the Trustees and officers of the Fund as a group owned less than 1% of the
outstanding shares of the Fund.
On the record date, the following person of record owned 5% or more of the
Portfolio's outstanding Class F Shares: MLPF&S, Jacksonville, FL, acting in
various capacities for numerous accounts, owned approximately 2,134,078 shares
(36.66%). On the record date, the Trustees and officers of the Trust as a group
owned less than 1% of the outstanding Class F Shares of the Portfolio.
The votes of shareholders of the Portfolio are not being solicited since
their approval is not required in order to effect the Reorganization.
Approval of the Reorganization requires the affirmative vote of a majority
of the Fund's outstanding shares. As used herein, the term "majority of the
Fund's outstanding shares" means the lesser of: (a) 67% of the shares of the
Fund present at the Special Meeting if the holders of more than 50% of the
outstanding shares of the Fund are present in person or by proxy, or (b) more
than 50% of the outstanding shares of the Fund.
In tallying shareholder votes, abstentions and broker non-votes (i.e.,
proxies sent in by brokers and other nominees that cannot be voted on a proposal
because instructions have been received from the beneficial owners) will be
counted for purposes of determining whether or not a quorum is present for
purposes of convening the meeting. On each proposal, broker non-votes will be
considered to be abstentions on the vote regarding each proposal.
No Dissenter's Right of Appraisal
Shareholders of the Fund objecting to the Reorganization have no appraisal
rights under the Fund's Declaration of Trust or under the laws of the
Commonwealth of Massachusetts. Shareholders have the right, however, to redeem
their Fund shares at net asset value until the Closing Date, and thereafter
shareholders may redeem Class F Shares of the Portfolio acquired by them in the
Reorganization at net asset value.
Quorum
In the event that a quorum is not present at the Special Meeting, or in the
event that a quorum is present at the Special Meeting, but sufficient votes to
approve the Plan are not received, the persons named as proxies may propose one
or more adjournments of the Special Meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a majority of
shares that are represented at the Meeting in person or by proxy. If a quorum is
present, the persons named as proxies will vote those proxies which they are
entitled to vote FOR the Plan in favor of such adjournments, and will vote those
proxies required to be voted AGAINST such proposal against any adjournment. A
quorum is constituted with respect to the Fund by the presence in person or by
proxy of the holders of more than 50% of the outstanding shares of the Fund
entitled to vote at the Meeting. Proxies properly executed and marked with a
negative vote or an abstention will be considered to be present at the Meeting
for purposes of determining the existence of a quorum for the transaction of
business.
Other Matters
Management of the Fund knows of no other matters that may properly be, or
which are likely to be, brought before the meeting. However, if any other
business shall properly come before the meeting the persons named in the proxy
intend to vote thereon in accordance with their best judgment.
So far as management is presently informed, there is no litigation pending
or threatened against the Trust.
Whether or not shareholders expect to attend the meeting, all shareholders
are urged to sign, fill in and return the enclosed proxy form promptly.
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated February 27, 1997 (the
"Agreement"), by and between MUNICIPAL SECURITIES INCOME TRUST, a Massachusetts
business trust, on behalf of its portfolio, Federated Ohio Municipal Income Fund
(hereinafter called the "Acquiring Fund"), FEDERATED ADVISERS, a Delaware
business trust ("Federated Advisers"), INTERMEDIATE MUNICIPAL TRUST, a
Massachusetts business trust, on behalf of its portfolio, Federated Ohio
Intermediate Municipal Trust (hereinafter called the "Acquired Fund") and
FEDERATED MANAGEMENT, a Delaware business trust ("Federated Management").
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368(a)(1)(C) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer of all of the assets of the
Acquired Fund in exchange solely for Class F Shares of beneficial interest of
the Acquiring Fund (collectively, the "Acquiring Fund Shares") and the
distribution, after the Closing Date as hereinafter defined, of Class F Shares
of the Acquiring Fund to the shareholders of the Acquired Fund in liquidation of
the Acquired Fund as provided herein, all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Acquired Fund and the Acquiring Fund are registered open-end,
non-diversified, management investment companies and the Acquired Fund owns
securities which generally are assets of the character in which the
Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue the Acquiring Fund
Shares and the Acquired Fund is authorized to issue its shares of
beneficial interest;
WHEREAS, Federated Advisers, an investment adviser registered as such under
the Investment Advisers Act of 1940, as amended, serves as investment
adviser to the Acquiring Fund;
WHEREAS, Federated Management, an investment adviser registered as such
under the Investment Advisers Act of 1940, as amended, serves as investment
adviser to the Acquired Fund;
WHEREAS, the Board of Trustees, including a majority of the Trustees who
are not "interested persons" as defined under the Investment Company Act of
1940, as amended (the "1940 Act") of the Acquiring Fund has determined that
the transfer of all of the assets of the Acquired Fund for Acquiring Fund
Shares is in the best interests of the Acquiring Fund shareholders and that
the interests of the existing shareholders of the Acquiring Fund would not
be diluted as a result of this transaction; and
WHEREAS, the Board of Trustees, including a majority of the Trustees who
are not "interested persons" (as defined under the 1940 Act) of the
Acquired Fund has determined that the exchange of all of the assets of the
Acquired Fund for Acquiring Fund Shares is in the best interests of the
Acquired Fund shareholders, that the interests of the shareholders of the
Acquired Fund would not be diluted as a result of this transaction and
determined that subsequent to the consummation of the transaction
contemplated by this Agreement, the Acquired Fund will cease operations;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements hereinafter set forth, the parties agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING
FUND SHARES AND LIQUIDATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions contained herein, the Acquired Fund
agrees to assign, transfer, and convey to the Acquiring Fund all of the assets
of the Acquired Fund at the time of the Closing (defined below), including
without limitation all securities and cash, and the Acquiring Fund agrees in
exchange therefor to deliver to the Acquired Fund the number of Acquiring Fund
Shares, including fractional Acquiring Fund Shares, representing Class F Shares,
determined as set forth in paragraph 2.3 of this Agreement. Such transactions
shall take place at the closing (the "Closing") on the closing date (the
"Closing Date"), as provided in paragraph 3.1 of this Agreement. In lieu of
delivering certificates for the Acquiring Fund Shares, the Acquiring Fund shall
credit the Acquiring Fund Shares to the Acquired Fund's account on the stock
record books of the Acquiring Fund's transfer agent and shall deliver a
confirmation thereof to the Acquired Fund.
1.2 The Acquired Fund will discharge all of its liabilities and obligations
prior to the Closing Date.
1.3 Delivery of the assets of the Acquired Fund to be transferred shall be
made on the Closing Date and shall be delivered to State Street Bank and Trust
Company (hereinafter referred to as "State Street"), Boston, Massachusetts, the
Acquiring Fund's custodian (the "Custodian"), for the account of the Acquiring
Fund, together with proper instructions and all documents necessary to transfer
such assets to the account of the Acquiring Fund, free and clear of all liens,
encumbrances, rights, restrictions and claims, except as may be indicated in a
schedule delivered by the Acquired Fund to the Acquiring Fund immediately prior
to the Closing. All cash delivered shall be in the form of currency or
immediately available funds payable to the order of Custodian for the Acquiring
Fund.
1.4 The Acquired Fund will pay or cause to be paid to the Acquiring Fund
any dividends or interest received on or after the Closing Date with respect to
assets transferred to the Acquiring Fund hereunder. The Acquired Fund will
transfer to the Acquiring Fund any distributions, rights, or other assets
received by the Acquired Fund after the Closing Date as distributions on, or
with respect to, the securities transferred. Such assets shall be deemed
included in assets transferred to the Acquiring Fund on the Closing Date and
shall not be separately valued.
1.5 As soon after the Closing Date as is practicable (the "Liquidation
Date"), the Acquired Fund will liquidate and distribute pro rata to the Acquired
Fund's shareholders of record, determined as of the close of business on the
Closing Date (the "Acquired Fund Shareholders"), the Acquiring Fund Shares
received by the Acquired Fund pursuant to paragraph 1.1. Such liquidation and
distribution will be accomplished by the transfer (by the Acquiring Fund or its
transfer agent) of the Acquiring Fund Shares to an account for each shareholder
on the books of the Acquiring Fund's transfer agent in the name of each Acquired
Fund Shareholder and representing the pro rata number of the Acquiring Fund
Shares due each Acquired Fund Shareholder. All issued and outstanding shares of
the Acquired Fund will simultaneously be canceled on the books of the Acquired
Fund. Share certificates representing interests in the Acquired Fund will
represent a number of Acquiring Fund Shares after the Closing Date as determined
in accordance with paragraph 2.3. The Acquiring Fund will issue certificates
representing
the Acquiring Fund Shares in connection with such exchange only for, and upon
receipt of, certificated shares of the Acquired Fund.
1.6 Any transfer taxes payable upon issuance of the Acquiring Fund Shares
in a name other than the registered holder of the Acquired Fund shares on the
books of the Acquired Fund as of the Closing Date shall, as a condition of such
issuance and transfer, be paid by the person to whom such Acquiring Fund Shares
are to be issued and transferred.
1.7 Any reporting responsibility of the Acquired Fund is and shall remain
the responsibility of the Acquired Fund up to and including the Closing Date and
such later dates with respect to discontinuation of the Acquired Fund as a
series of Intermediate Municipal Trust with federal and state authorities.
2. VALUATION.
2.1 The value of the Acquired Fund's assets to be acquired by the Acquiring
Fund hereunder shall be the net asset value of such assets computed as of the
close of business on the Closing Date (such time and date being hereinafter
called the "Valuation Date"), using the valuation procedures set forth in the
Acquiring Fund's then-current prospectus or statement of additional information.
2.2 The net asset value of an Acquiring Fund Share shall be the net asset
value per share computed as of the close of business on the Valuation Date,
using the valuation procedures set forth in the Acquiring Fund's then-current
prospectus or statement of additional information.
2.3 The number of the Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Acquired Fund's assets shall be
determined by dividing the value of the assets attributable to the Acquired Fund
determined using the same valuation procedures referred to in paragraph 2.1 by
the net asset value of one Acquiring Fund Share determined in accordance with
paragraph 2.2. Class F Shares of the Acquiring Fund shall be issued for shares
of the Acquired Fund.
2.4 All computations of value shall be made in accordance with the regular
practices of the Acquiring Fund.
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be July 11, 1997, or such later date as the
parties may mutually agree. All acts taking place at the Closing Date shall be
deemed to take place simultaneously as of the close of business on the Closing
Date unless otherwise provided. The Closing shall be held at the close of
business at the offices of the Acquired Fund, Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779, or such other time and/or place as the
parties may mutually agree.
3.2 If on the Valuation Date: (a) the primary trading market for portfolio
securities of the Acquiring Fund or the Acquired Fund shall be closed to trading
or trading thereon shall be restricted; or (b) trading or the reporting of
trading shall be disrupted so that accurate appraisal of the value of the net
assets of the Acquiring Fund or the Acquired Fund is impracticable, the Closing
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
3.3 The Acquired Fund shall instruct Federated Services Company, as
transfer agent for the Acquired Fund, to deliver to the Acquiring Fund at the
Closing, a certificate of an authorized officer
stating that its records contain the names and addresses of the Acquired Fund
Shareholders and the number of outstanding shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall issue and deliver a
confirmation evidencing the Class F Shares of the Acquiring Fund to be credited
on the Closing Date to the Secretary of the Acquired Fund or provide evidence
satisfactory to the Acquired Fund that such Class F Shares of the Acquiring Fund
have been credited to the respective accounts of the Acquired Fund Shareholders
on the books of the Acquiring Fund. At the Closing, each party shall deliver to
the other such bills of sale, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request.
4. REPRESENTATIONS AND WARRANTIES.
4.1 Each of the Acquired Fund and Federated Management represents and
warrants to the Acquiring Fund as follows:
(a) Intermediate Municipal Trust is a business trust organized, validly
existing, and in good standing under the laws of the Commonwealth of
Massachusetts and has power to carry on its business as it is now being
conducted.
(b) Intermediate Municipal Trust is registered under the 1940 Act, as an
open-end, non-diversified, management investment company, and such registration
has not been revoked or rescinded and is in full force and effect.
(c) Intermediate Municipal Trust is not, and the execution, delivery, and
performance of this Agreement will not result, in a material violation of its
Declaration of Trust or By-Laws or of any agreement, indenture, instrument,
contract, lease, or other undertaking to which the Acquired Fund is a party or
by which it is bound.
(d) No material litigation or administrative proceeding or investigation of
or before any court or governmental body is currently pending or to its
knowledge threatened against the Acquired Fund or any of the Acquired Fund's
properties or assets which, if adversely determined, would materially and
adversely affect its financial condition or the conduct of its business. Neither
Federated Management nor the Acquired Fund knows of any facts which might form
the basis for the institution of such proceedings, and the Acquired Fund is not
a party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects its business
or its ability to consummate the transactions herein contemplated.
(e) The Statement of Assets and Liabilities of the Acquired Fund at May 31,
1996, has been audited by Arthur Andersen LLP, independent public accountants,
and has been prepared in accordance with generally accepted accounting
principles, consistently applied, and such statement (copies of which have been
furnished to the Acquiring Fund) fairly reflect the financial condition of the
Acquired Fund as of such date, and there are no liabilities of the Acquired
Fund, known to the Acquired Fund or to Federated Management, contingent or
otherwise, as of such date not disclosed therein.
(f) The unaudited Statement of Assets and Liabilities of the Acquired Fund
at November 30, 1996, has been prepared in accordance with generally accepted
accounting principles, consistently applied, and on a basis consistent with the
Statement of Assets and Liabilities of the Acquired Fund at May 31, 1996, which
has been audited by Arthur Andersen LLP, and such statement (copies of which
have been furnished to the Acquiring Fund) fairly reflects the financial
condition of the Acquired Fund as of such
date, and there are no liabilities of the Acquired Fund known to the Acquired
Fund or to Federated Management, contingent or otherwise, as of such date not
disclosed therein.
(g) Since May 31, 1996, there has not been any material adverse change in
the Acquired Fund's financial condition, assets, liabilities, or business other
than changes occurring in the ordinary course of business, or any incurrence by
the Acquired Fund of any indebtedness for borrowed money.
(h) At the Closing Date, all federal and other tax returns and reports of
the Acquired Fund required by law (or permitted extensions thereto) to have been
filed shall have been filed, and to the best of the Acquired Fund's knowledge
all federal and other taxes shall have been paid so far as due, or provision
shall have been made for the payment thereof, and to the best of the Acquired
Fund's knowledge no such return is currently under audit and no assessment has
been asserted with respect to such returns.
(i) For each fiscal year (or part thereof) of its operation, the Acquired
Fund has met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company.
(j) All issued and outstanding shares of the Acquired Fund are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid and
non-assessable. All of the issued and outstanding shares of the Acquired Fund
will, at the time of the Closing, be held by the persons and in the amounts set
forth in the records of the transfer agent as provided in paragraph 3.3 of this
Agreement. The Acquired Fund does not have outstanding options, warrants or
other rights to subscribe for or purchase any of the Acquired Fund shares, nor
is there outstanding any security convertible into Acquired Fund shares.
(k) On the Closing Date, all issued and outstanding shares of the Acquired
Fund will have been duly registered under the Securities Act of 1933, as amended
(the "1933 Act"), and registered, or exempt from registration, to the extent
required thereby under each state securities or "blue sky" law of every state in
which the Acquired Fund has offered or sold its shares.
(l) On the Closing Date, the Acquired Fund will have full right, power, and
authority to sell, assign, transfer, and deliver the assets to be transferred by
it hereunder.
(m) The execution, delivery, and performance of this Agreement has been
duly authorized by all necessary action on the part of the Acquired Fund's Board
of Trustees and, subject to the approval of the Acquired Fund Shareholders, this
Agreement constitutes the valid and legally binding obligation of the Acquired
Fund enforceable in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and
other similar laws relating to or affecting creditors' rights generally and
court decisions with respect thereto, and to general principles of equity and
the discretion of the court before which a proceeding is brought (regardless of
whether the enforceability is considered in a proceeding in equity or at law).
(n) The Prospectus/Proxy Statement to be included in the Registration
Statement (only insofar as it relates to the Acquired Fund) will, on the
effective date of the Registration Statement and on the Closing Date be true and
correct in all material respects. Further, on the effective date of the
Registration Statement and on the Closing Date, the Prospectus/Proxy Statement
(only insofar as it relates to the Acquired Fund) will not contain any untrue
statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements were made,
not misleading.
(o) The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of the Prospectus/Proxy Statement.
4.2 Each of the Acquiring Fund and Federated Advisers represents and
warrants to the Acquired Fund as follows:
(a) Municipal Securities Income Trust is a business trust duly organized,
validly existing, and in good standing under the laws of the Commonwealth of
Massachusetts and has the power to carry on its business as it is now being
conducted and to carry out this Agreement.
(b) Municipal Securities Income Trust is registered under the 1940 Act as
an open-end, non-diversified, management investment company, and such
registration has not been revoked or rescinded and is in full force and effect.
(c) The current prospectus and statement of additional information of the
Acquiring Fund conform in all material respects to the applicable requirements
of the 1933 Act and the 1940 Act and the rules and regulation of the SEC
thereunder and do not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(d) At the Closing Date, the Acquiring Fund will have good and marketable
title to its assets.
(e) Municipal Securities Income Trust is not, and the execution, delivery,
and performance of this Agreement will not result in a material violation of its
Declaration of Trust or By-Laws or of any agreement, indenture, instrument,
contract, lease, or other undertaking to which the Acquiring Fund is a party or
by which it is bound.
(f) No material litigation or administrative proceeding or investigation of
or before any court or governmental body is currently pending or to its
knowledge threatened against the Acquiring Fund or any of the Acquiring Fund's
properties or assets which, if adversely determined, would affect the Acquiring
Fund's financial condition or the conduct of its business. Neither Federated
Advisers nor the Acquiring Fund knows of any facts which might form the basis
for the institution of such proceedings, and the Acquiring Fund is not a party
to or subject to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business or its
ability to consummate the transactions herein contemplated.
(g) The Statement of Assets and Liabilities of the Acquiring Fund at August
31, 1996, has been audited by Deloitte & Touche LLP, independent auditors, and
has been prepared in accordance with generally accepted accounting principles,
consistently applied, and such statement (copies of which have been furnished to
the Acquired Fund) fairly reflects the financial condition of the Acquiring Fund
as of such date, and there are no liabilities of the Acquiring Fund, known to
the Acquiring Fund or to Federated Advisers, contingent or otherwise, as of such
date not disclosed therein.
(h) Since August 31, 1996, there has not been any adverse change in the
Acquiring Fund's financial condition, assets, liabilities, or business other
than changes occurring in the ordinary course of business, or any incurrence by
the Acquiring Fund of any indebtedness for borrowed money.
(i) At the Closing Date, all federal and other tax returns and reports of
the Acquiring Fund required by law (or permitted extensions thereto) to have
been filed shall have been filed, and to the best of the Acquiring Fund's
knowledge all federal and other taxes shall have been paid so far as due or
provision shall have been made for the payment thereof, and to the best of the
Acquiring Fund's knowledge no such return is currently under audit and no
assessment has been asserted with respect to such returns.
(j) For each fiscal year (or part thereof) of its operation, the Acquiring
Fund has met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company.
(k) All issued and outstanding shares of the Acquiring Fund are, and
including the Acquiring Fund Shares issued to the Acquired Fund Shareholders
pursuant hereto, at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any of the Acquiring Fund Shares, nor is there outstanding any security
convertible into any Acquiring Fund Shares.
(l) All issued and outstanding shares of each class of the Acquiring Fund
are, and at the Closing Date will be, duly registered under the 1933 Act and
registered, or exempt from registration, to the extent required thereby under
each state securities or "blue sky" law of every state in which the Acquiring
Fund has offered or sold its shares.
(m) The execution, delivery, and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action on the
part of the Acquiring Fund's Board of Trustees, and this Agreement constitutes
the valid and legally binding obligation of Municipal Securities Income Trust
enforceable in accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other similar
laws relating to or affecting creditors' rights generally and court decisions
with respect thereto, and to general principles of equity and the discretion of
the court before which a proceeding is brought (regardless of whether the
enforceability is considered in a proceeding in equity or at law).
(n) The Prospectus/Proxy Statement to be included in the Registration
Statement (only insofar as it relates to the Acquiring Fund) will, on the
effective date of the Registration Statement and on the Closing Date be true and
correct in all material respects. Further, on the effective date of the
Registration Statement and on the Closing Date, the Prospectus/Proxy Statement
(only insofar as it relates to the Acquiring Fund) will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading.
(o) The Acquiring Fund has entered into an agreement under which Federated
Advisers will assume the expenses of the Reorganization, including legal fees of
the Acquiring Fund, registration fees, transfer tax (if any), the fees of banks
and transfer agents, and the costs of preparing, printing, copying, and mailing
proxy solicitation materials to the Acquired Fund's shareholders.
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND.
5.1 The Acquiring Fund and the Acquired Fund each will operate its business
in the ordinary course between the date hereof and the Closing Date, it being
understood that such ordinary course of business will include customary
dividends and distributions.
5.2 The Acquired Fund will call a meeting of the Acquired Fund Shareholders
to consider and act upon this Agreement and to take all other action necessary
and appropriate to obtain approval of the transactions contemplated herein.
5.3 Subject to the provisions of this Agreement, the Acquiring Fund and the
Acquired Fund will each take, or cause to be taken, all action, and do or cause
to be done, all things reasonably necessary, proper, or advisable to consummate
and make effective the transactions contemplated by this Agreement.
5.4 As promptly as practicable, but in any case within sixty days after the
Closing Date, the Acquired Fund shall furnish the Acquiring Fund, in such form
as is reasonably satisfactory to the Acquiring Fund, a statement of the earnings
and profits of the Acquired Fund for federal income tax purposes which will be
carried over to the Acquiring Fund as a result of Section 381 of the Code and
which will be certified by the Acquired Fund's President or its Treasurer.
5.5 Municipal Securities Income Trust shall have filed with the SEC a
Registration Statement Form N-14 complying in all material respects with the
requirements of the 1933 Act, the Securities Exchange Act of 1934, as amended,
the 1940 Act, and applicable rules and regulations thereunder, relating to a
meeting of the shareholders of the Acquired Fund to be called to consider and
act upon the transactions contemplated herein, and such Registration Statement
shall have been declared effective by the SEC. The Acquired Fund agrees to
provide the Acquiring Fund with information relating to the Acquired Fund
required under such Acts, rules and regulations for inclusion in the
Registration Statement Form N-14.
5.6 The Acquiring Fund agrees to use all best efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act, and such of
the state Blue Sky or securities laws as it may deem appropriate in order to
continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete the transactions provided
for herein shall be subject to the performance by the Acquired Fund of all the
obligations to be performed by it hereunder on or before the Closing Date and,
in addition thereto, the following conditions:
6.1 All representations and warranties of Federated Management and the
Acquired Fund contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date.
6.2 The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets, together with a list of the Acquired
Fund's portfolio securities showing the tax costs of such securities by lot and
the holding periods of such securities, as of the Closing Date, certified by the
Treasurer or the Assistant Treasurer of the Acquired Fund.
6.3 The Acquired Fund and Federated Management shall have delivered to the
Acquiring Fund on the Closing Date a certificate executed in their names by
their respective Presidents or Vice Presidents and their Treasurers or Assistant
Treasurers, in form and substance reasonably satisfactory to the Acquiring Fund,
to the effect that the representations and warranties of the Acquired Fund and
Federated Management made in this Agreement are true and correct at and as of
the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, and as to such other matters as the Acquiring
Fund shall reasonably request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject to the performance by the Acquiring Fund of
all the obligations to be performed by it hereunder on or before the Closing
Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of the Acquiring Fund and Federated
Advisers contained in this Agreement shall be true and correct in all material
respects as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date.
7.2 The Acquiring Fund and Federated Advisers shall have delivered to the
Acquired Fund on the Closing Date a certificate executed in their names by their
respective Presidents or Vice Presidents and their Treasurers or Assistant
Treasurers, in form and substance reasonably satisfactory to the Acquired Fund,
to the effect that the representations and warranties of the Acquiring Fund and
Federated Advisers made in this Agreement are true and correct at and as of the
Closing Date, except as they may be affected by the transactions contemplated by
this Agreement, and as to such other matters as the Acquired Fund shall
reasonably request.
8. FURTHER CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ACQUIRING FUND
AND THE ACQUIRED FUND.
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Acquired Fund or the Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement.
8.1 The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of beneficial interest of the
Acquired Fund in accordance with the laws of the Commonwealth of Massachusetts
and the Acquired Fund's Declaration of Trust and By-Laws.
8.2 On the Closing Date no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
8.3 All consents of parties hereto and all other consents, orders, permits,
and exemptions of federal, state, and local regulatory authorities (including
those of the Securities and Exchange Commission and of state Blue Sky and
securities authorities) deemed necessary by the Acquiring Fund or the Acquired
Fund to permit consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where failure to obtain any
such consent, order, or permit would not involve a risk of a material adverse
effect on the assets or properties of the Acquiring
Fund or the Acquired Fund, provided that either party hereto may for itself
waive any of such conditions.
8.4 The Form N-14 shall have become effective under the 1933 Act by the SEC
and no stop orders suspending the effectiveness thereof shall have been issued
and, to the best knowledge of the parties hereto, no investigation or proceeding
for that purpose shall have been instituted or be pending, threatened, or
contemplated under the 1933 Act.
8.5 The Acquiring Fund and the Acquired Fund shall have received an opinion
of Howard & Howard Attorneys, P.C., substantially to the effect that, on the
basis of the existing provisions of the Code, current administrative rules, and
court decisions, for federal income tax purposes:
(a) The transfer of all or substantially all of the Acquired Fund assets in
exchange for the Acquiring Fund Shares and the distribution of the Acquiring
Fund Shares to the shareholders of the Acquired Fund in liquidation of the
Acquired Fund will constitute a "reorganization" within the meaning of Section
368(a)(1)(C) of the Code; (b) No gain or loss will be recognized by the
Acquiring Fund upon the receipt of the assets of the Acquired Fund solely in
exchange for the Acquiring Fund Shares; (c) No gain or loss will be recognized
by the Acquired Fund upon the transfer of the Acquired Fund assets to the
Acquiring Fund in exchange for the Acquiring Fund Shares or upon the
distribution (whether actual or constructive) of the Acquiring Fund Shares to
Acquired Fund Shareholders in exchange for their shares of the Acquired Fund;
(d) No gain or loss will be recognized by the Acquired Fund Shareholders upon
the exchange of their Acquired Fund shares for the Acquiring Fund Shares: (e)
The tax basis of the Acquired Fund assets acquired by the Acquiring Fund will be
the same as the tax basis of such assets to the Acquired Fund immediately prior
to the Reorganization; (f) The tax basis of the Acquiring Fund Shares received
by each of the Acquired Fund Shareholders pursuant to the Reorganization will be
the same as the tax basis of the Acquired Fund shares held by such shareholder
immediately prior to the Reorganization; (g) The holding period of the assets of
the Acquired Fund in the hands of the Acquiring Fund will include the period
during which those assets were held by the Acquired Fund; and (h) The holding
period of the Acquiring Fund Shares to be received by each Acquired Fund
Shareholder will include the period during which the Acquired Fund Shares
exchanged therefor were held by such shareholder (provided the Acquired Fund
Shares were held as capital assets on the date of the Reorganization).
9. TERMINATION OF AGREEMENT.
9.1 This Agreement and the transactions contemplated hereby may be
terminated and abandoned by resolution of the Board of Trustees of Intermediate
Municipal Trust or the Board of Trustees of Municipal Securities Income Trust,
at any time prior to the Closing Date without liability on the part of either
party hereto, if circumstances should develop that, in the opinion of the Board
of Trustees of either party hereto, determines that proceeding with the
Agreement is not in the best interests of that party's shareholders.
9.2 If this Agreement is terminated and the exchange contemplated hereby is
abandoned pursuant to the provisions of this Section 9, this Agreement shall
become void and have no effect, without any liability on the part of any party
hereto (other than the agreement of Federated Advisers to assume the expenses of
the Reorganization) or the trustees, directors, officers or shareholders of the
Acquiring Fund or of the Acquired Fund, in respect of this Agreement.
10. WAIVER.
At any time prior to the Closing Date, any of the foregoing conditions
(other than that set forth in Section 8.5) may be waived by the Board of
Trustees of Municipal Securities Income Trust or the Board of Trustees of
Intermediate Municipal Trust if, in the judgment of either, such waiver will not
have a material adverse effect on the benefits intended under this Agreement to
the shareholders of the Acquiring Fund or of the Acquired Fund, as the case may
be.
11. AMENDMENT.
This Agreement and Plan of Reorganization may be amended at any time by the
mutual agreement of the Acquired Fund and the Acquiring Fund, authorized by
their respective Boards of Trustees and notwithstanding approval thereof by the
Acquired Fund Shareholders; provided, that if so approved by the Acquired Fund
Shareholders, no amendment shall be made which substantially changes the terms
hereof.
12. NO BROKER'S OR FINDER'S FEE.
The Acquired Fund and the Acquiring Fund each represents that there is no
person with whom it has dealt who by reason of such dealings is entitled to any
broker's or finder's or other similar fee or commission arising out of the
transactions contemplated by this Agreement and Plan of Reorganization.
13. MISCELLANEOUS.
13.1 The representations and warranties included or provided for herein
shall not survive consummation of the transactions contemplated hereby.
13.2 This Agreement contains the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof, and merges and
supersedes all prior discussions, agreements, and understandings of every kind
and nature between them relating to the subject matter hereof. Neither party
shall be bound by any condition, definition, warranty, or representation, other
than as set forth or provided in this Agreement or as may be set forth in a
later writing signed by the party to be bound thereby.
13.3 This Agreement shall be governed and construed in accordance with the
internal laws of the Commonwealth of Pennsylvania, without giving effect to such
jurisdiction's conflicts of laws principles.
13.4 This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
13.5 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm, or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
13.6 Intermediate Municipal Trust is hereby expressly put on notice of the
limitation of liability as set forth in the Declaration of Trust of Municipal
Securities Income Trust and agrees that the
obligations assumed by the Acquiring Fund pursuant to this Agreement shall be
limited in any case to the Acquiring Fund and its assets and the Acquired Fund
shall not seek satisfaction of any such obligation from the shareholders of the
Acquiring Fund, the Trustees, officers, employees, or agents of Municipal
Securities Income Trust or any of them.
13.7 Municipal Securities Income Trust is hereby expressly put on notice of
the limitation of liability as set forth in the Declaration of Trust of
Intermediate Municipal Trust and agrees that the obligations assumed by the
Acquired Fund pursuant to this Agreement shall be limited in any case to the
Acquired Fund and its assets and the Acquiring Fund shall not seek satisfaction
of any such obligation from the shareholders of the Acquired Fund, the Trustees,
officers, employees, or agents of Intermediate Municipal Trust or any of them.
IN WITNESS WHEREOF, the Acquired Fund and the Acquiring Fund have each
caused this Agreement and Plan of Reorganization to be executed and attested on
its behalf by its duly authorized representatives as of the date first above
written.
<TABLE>
<S> <C>
Acquired Fund:
INTERMEDIATE MUNICIPAL TRUST,
on behalf of its portfolio,
FEDERATED OHIO INTERMEDIATE
Attest: MUNICIPAL TRUST
/s/ S. ELLIOTT COHAN By: /s/ J. CHRISTOPHER DONAHUE
- ------------------------------------- ------------------------------------------
Assistant Secretary Name: J. Christopher Donahue
Title: President
Attest: FEDERATED MANAGEMENT
/s/ CHRISTINE ITA MCGONIGLE By: /s/ J. CHRISTOPHER DONAHUE
- ------------------------------------- ------------------------------------------
Assistant Secretary Name: J. Christopher Donahue
Title: President
Acquired Fund:
MUNICIPAL SECURITIES INCOME TRUST,
on behalf of its portfolio,
Attest: FEDERATED OHIO MUNICIPAL INCOME FUND
/s/ S. ELLIOTT COHAN By: /s/ J. CHRISTOPHER DONAHUE
- ------------------------------------- ------------------------------------------
Assistant Secretary Name: J. Christopher Donahue
Title: President
</TABLE>
<TABLE>
<S> <C>
Attest: FEDERATED ADVISERS
/s/ CHRISTINE ITA MCGONIGLE By: /s/ J. CHRISTOPHER DONAHUE
- ------------------------------------ ------------------------------------------
Assistant Secretary Name: J. Christopher Donahue
Title: President
</TABLE>
STATEMENT OF ADDITIONAL INFORMATION{PRIVATE }
May 23, 1997
Acquisition of the assets of FEDERATED OHIO INTERMEDIATE
MUNICIPAL TRUST, a portfolio of Intermediate Municipal Trust
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Telephone No: 1-800-341-7400
By and in exchange for shares of
FEDERATED OHIO MUNICIPAL INCOME FUND, a portfolio of
Municipal Securities Income Trust
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Telephone No. 1-800-341-7400
This Statement of Additional Information dated May 23, 1997 is not a
prospectus. A Prospectus/Proxy Statement dated May 23, 1997, related to
the above-referenced matter may be obtained from Municipal Securities
Income Trust, on behalf of its portfolio, Federated Ohio Municipal Income
Fund, Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779. This
Statement of Additional Information should be read in conjunction with such
Prospectus/Proxy Statement.
TABLE OF CONTENTS
Statement of Additional Information of Federated Ohio Municipal Income
Fund, a portfolio of Municipal Securities Income Trust, dated August
31, 1996.
Statement of Additional Information of Federated Ohio Intermediate
Municipal Trust, a portfolio of Intermediate Municipal Trust, dated
May 31, 1996.
Financial Statements of Federated Ohio Municipal Income Fund, a portfolio
of Municipal Securities Income Trust, dated August 31, 1996.
Financial Statements of Federated Ohio Intermediate Municipal Trust, a
portfolio of Intermediate Municipal Trust, dated May 31, 1996.
Unaudited Financial Statements of Federated Ohio Intermediate Municipal
Trust, a portfolio of Municipal Securities Income Trust, dated
November 30, 1996.
The Statement of Additional Information of Federated Ohio Municipal Income
Fund (the "Portfolio"), a portfolio of Municipal Securities Income Trust
(the "Trust"), is incorporated by reference to the Trust's Post-Effective
Amendment No. 21 to its Registration Statement on Form N-1A (File No. 33-
36729) which was filed with the Securities and Exchange Commission on or
about October 24, 1996.
The Statement of Additional Information of Federated Ohio Municipal Income
Fund (the "Fund"), a portfolio of Intermediate Municipal Trust, is
incorporated by reference to Intermediate Municipal Trust's Post-Effective
Amendment No. 26 to its Registration Statement on Form N-1A (File No. 2-
98237) which was filed with the Securities and Exchange Commission on or
about July 25, 1996. A copy may be obtained from the Trust at Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779. Telephone Number:
1-800-341-7400.
The audited financial statements of the Portfolio dated August 31, 1996,
are incorporated by reference to the Portfolio's Prospectus filed with
Post-Effective Amendment No. 21 to the Trust's Registration Statement on
Form N-1A (File No. 33-36729) which was filed with the Securities and
Exchange Commission on or about October 24, 1996.
The audited financial statements of the Fund dated May 31, 1996, are
incorporated by reference to the Fund's prospectus filed with Post-
Effective Amendment No. 26 to Intermediate Municipal Trust's Registration
Statement on Form N-1A (File No. 2-98237) which was filed with the
Securities and Exchange Commission on or about July 25, 1996.
The unaudited financial statements of the Fund dated November 30, 1996, are
incorporated by reference to the Semi-Annual Report to Shareholders of the
Fund which was filed with the Securities and Exchange Commission pursuant
to Section 30(b) of the Investment Company Act of 1940, as amended, on or
about February 3, 1997.
Pro forma financial statements as of August 31, 1996, which give effect to
the Reorganization of the Fund into the Portfolio, are attached.
I:\b358\rcr\federated\intermediate\sai
FEDERATED OHIO MUNICIPAL INCOME FUND
FEDERATED OHIO INTERMEDIATE MUNICIPAL TRUST
INTRODUCTION TO PROPOSED MERGER
The accompanying unaudited Pro Forma Combining Portfolio of Investments and
Statement of Assets and Liabilities reflect the accounts of Federated Ohio
Municipal Income Fund and Federated Ohio Intermediate Municipal Trust,
collectively (`the Funds''), as of August 31, 1996. These statements have
been derived from the books and records utilized in calculating daily net
asset values at August 31, 1996. The accompanying unaudited Pro Forma
Combining Statement of Operations reflects the accounts of Federated Ohio
Municipal Income Fund's most recent fiscal year ended August 31, 1996, and
the twelve month period ended August 31, 1996, for Federated Ohio
Intermediate Municipal Trust.
The Pro Forma statements give effect to the proposed transfer of assets
from Federated Ohio Intermediate Municipal Trust in exchange for shares of
Federated Ohio Municipal Income Fund.
FEDERATED OHIO MUNICIPAL INCOME FUND
FEDERATED OHIO INTERMEDIATE MUNICIPAL TRUST
NOTES TO PRO FORMA FINANCIAL STATEMENTS
AUGUST 31, 1996 (UNAUDITED)
1. BASIS OF COMBINATION
The accompanying unaudited Pro Forma Combining Portfolio of
Investments and Statement of Assets and Liabilities reflect the
accounts of Federated Ohio Municipal Income Fund and Federated Ohio
Intermediate Municipal Trust, collectively (the `Funds''), as of
August 31, 1996. These statements have been derived from the books and
records utilized in calculating daily net asset values at August 31,
1996. The accompanying unaudited Pro Forma Combining Statement of
Operations reflects the accounts of Federated Ohio Municipal Income
Fund's most recent fiscal year ended August 31, 1996, and the twelve
month period ended August 31, 1996, for Federated Ohio Intermediate
Municipal Trust.
The Pro Forma Financial Statements should be read in conjunction with
historical financial statements of the Funds which are incorporated by
reference in the Statement of Additional Information. The Funds follow
generally accepted accounting principles applicable to management
investment companies which are disclosed in the historical financial
statements of each fund.
The Pro Forma Financial Statements give effect to the proposed
transfer of assets of Federated Ohio Intermediate Municipal Trust in
exchange for shares of Federated Ohio Municipal Income Fund. Under
generally accepted accounting principles, Federated Ohio Municipal
Income Fund will be the surviving entity for accounting purposes with
its historical cost of investment securities and results of operations
being carried forward.
The Pro Forma Financial Statements have been adjusted to reflect the
anticipated advisory and administrative fee arrangements for the
surviving entity. Certain other operating costs have also been
adjusted to reflect anticipated expenses of the combined entity. Other
costs which may change as a result of the reorganization are currently
undeterminable.
For the twelve months ended August 31, 1996, Federated Ohio Municipal
Income Fund and Federated Ohio Intermediate Municipal Trust, paid
investment advisory fees computed at the annual rate of each Fund's
average net assets as follows:
PERCENT OF EACH FUND'S
FUND AVERAGE NET ASSETS
Federated Ohio Municipal 0.40%
Income Fund
Federated Ohio 0.50%
Intermediate Municipal
Trust
Each adviser may voluntarily choose to waive a portion of their fees
and reimburse certain operating expenses.
2. SHARES OF BENEFICIAL INTEREST
The Pro Forma net asset value per share assumes the issuance of
757,676 shares of Federated Ohio Municipal Income Fund shares in
exchange for 868,161 shares of Federated Ohio Intermediate Municipal
Trust at August 31, 1996, in conjunction with the proposed
reorganization.
FEDERATED OHIO MUNICIPAL INCOME FUND
FEDERATED OHIO INTERMEDIATE MUNICIPAL TRUST
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
AUGUST 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
FEDERATED
FEDERATED OHIO
OHIO INTERMEDIATE FEDERATED FEDERATED
MUNICIPAL MUNICIPAL PRO FORMA OHIO OHIO PRO
INCOME TRUST COMBINED MUNICIPAL INTERMEDIATE FORMA
FUND INCOME MUNICIPAL COMBIN
FUND TRUST ED
<S> <C> <C> <C> <C> <C> <C>
PRINCIPAL PRINCIPAL PRINCIPAL CREDIT
AMOUNT AMOUNT AMOUNT VALUE VALUE VALUE
RATING
*
LONG-TERM MUNICIPALS 99.6%
OHIO--93.9%
$200,000 --- $200,000 Akron, Bath &
Copley, OH Joint
Township,
Revenue Bonds,
7.45% AAA $224,580 --- $224,5
(Children's 80
Hospital
Medical Center,
Akron)/(United
States Treasury
PRF)/(Original
Issue Yield:
7.698%),
11/15/2000
(@102)
400,000 --- 400,000 Akron, Bath &
Copley, OH Joint
Township,
Revenue Bonds,
7.45% A+ 449,160 --- 449,16
(Children's 0
Hospital
Medical Center,
Akron)/(United
States Treasury
PRF)/(Original
Issue Yield:
7.698%),
11/15/2000
(@102)
--- 200,000 200,000 Akron, OH,
Various Purpose AAA --- 206,346 206,34
LT GO, 5.50% 6
(MBIA INS),
12/1/2005
750,000 --- 750,000 Ashland County,
OH, LT GO Bonds, A 809,415 --- 809,41
7.00%, 12/1/2011 5
300,000 --- 300,000 Bellefontaine,
OH, Storm Water A 322,215 --- 322,21
Utility LT GO 5
Bonds, 7.05%,
6/1/2011
500,000 --- 500,000 Brunswick, OH,
UT GO Bonds, A 553,480 --- 553,48
7.35% (Original 0
Issue Yield:
7.446%),
12/1/2010
--- 200,000 200,000 Cleveland, OH
Airport System,
Revenue Bonds AAA --- 204,540 204,54
(Series A), 0
5.40% (FGIC
INS)/(Original
Issue Yield:
5.55%), 1/1/2004
2,500,000 --- 2,500,000 Cleveland, OH
Airport System,
Revenue Bonds AAA 2,481,500 --- 2,481,
(Series A), 500
6.00% (FGIC
INS)/(Original
Issue Yield:
6.378%),
1/1/2024
--- 250,000 250,000 Cleveland, OH,
LT GO Bonds, AAA --- 267,598 267,59
6.00% (MBIA 8
INS)/(Original
Issue Yield:
6.10%),
11/15/2004
2,000,000 --- 2,000,000 Cleveland, OH
Public Power
System, Revenue
Bonds, First AAA 2,246,200 --- 2,246,
Mortgage (Series 200
A ), 7.00% (MBIA
Insurance
Corporation
INS)/(Original
Issue Yield:
7.15%),
11/15/2024
--- 500,000 500,000 Columbus, OH
Municipal
Airport
Authority, AAA --- 514,515 514,51
Revenue Bonds, 5
5.55% (Port
Columbus Intl
Airport )/(MBIA
INS)/(Original
Issue Yield:
5.65%), 1/1/2004
2,600,000 --- 2,600,000 Columbus, OH
Municipal
Airport
Authority, AAA 2,663,414 --- 2,663,
Improvement 414
Revenue Bonds,
6.25% (Port
Columbus Intl
Airport )/(MBIA
INS)/(Original
Issue Yield:
6.35%), 1/1/2024
---- 100,000 100,000 Columbus, OH
Water System, AA- --- 104,365 104,36
Revenue 5
Refunding Bonds,
6.375%,
11/1/2010
---- 150,000 150,000 Columbus, OH, LT
GO Bonds, 5.50% AA+ --- 156,344 156,34
(Original Issue 4
Yield: 5.55%),
5/15/2004
$2,000,000 --- $2,000,000 Cuyahoga County,
OH Hospital
Authority,
Improvement &
Refunding AAA $1,908,78 --- $1,908
Revenue Bonds 0 ,780
(Series A),
5.625%
(University
Hospitals Health
System,
Inc.)/(MBIA
INS)/(Original
Issue Yield:
5.90%),
1/15/2026
1,000,000 --- 1,000,000 Cuyahoga County,
OH Hospital
Authority,
Revenue Bonds, A 1,010,090 --- 1,010,
6.25% (Fairview 090
General
Hospital)/(Origi
nal Issue Yield:
6.321%),
8/15/2010
1,500,000 --- 1,500,000 Cuyahoga County,
OH Hospital
Authority, A 1,495,035 --- 1,495,
Revenue Bonds, 035
6.25% (Meridia
Health
System)/(Origina
l Issue Yield:
6.80%),
8/15/2024
800,000 --- 800,000 Cuyahoga County,
OH Hospital
Authority,
Revenue Bonds, AA 818,944 --- 818,94
6.50% 4
(University
Hospitals Health
System,
Inc.)/(Original
Issue Yield:
6.68%),
1/15/2019
780,000 --- 780,000 Cuyahoga County,
OH Hospital
Authority,
Revenue AAA 837,556 --- 837,55
Refunding Bonds, 6
6.875%
(University
Hospitals Health
System,
Inc.)/(AMBAC
INS)/(Original
Issue Yield:
6.954%),
1/15/2019
500,000 --- 500,000 Cuyahoga County,
OH Hospital
Authority, A+ 522,400 --- 522,40
Revenue 0
Refunding Bonds,
8.00% (Cleveland
Clinic)/(Origina
l Issue Yield:
8.068%),
12/1/2015
800,000 --- 800,000 Cuyahoga County,
OH, UT GO Jail
Facilities Aa 893,624 --- 893,62
Bonds, 7.00% 4
(Original Issue
Yield: 7.065%),
10/1/2013
500,000 --- 500,000 Franklin County,
OH Hospital
Facility
Authority,
Hospital Revenue AAA 543,705 --- 543,70
Refunding & 5
Improvement
Bonds, 7.25%
(Riverside
United Methodist
Hospital)/(MBIA
INS)/(Original
Issue Yield:
7.29%),
5/15/2020
260,000 --- 260,000 Franklin County,
OH Hospital
Facility
Authority,
Revenue
Refunding & Aa 289,474 --- 289,47
Improvement 4
Bonds (Series
B), 7.50%
(Riverside
United Methodist
Hospital)/(Unite
d States
Treasury
PRF)/(Original
Issue Yield:
7.60%),
5/15/2000 (@102)
2,000,000 --- 2,000,000 Franklin County,
OH Hospital
Facility
Authority, Aa 1,938,200 --- 1,938,
Revenue 200
Refunding Bonds
(Series A),
5.75% (Riverside
United Methodist
Hospital)/(Origi
nal Issue Yield:
6.10%),
5/15/2020
--- 300,000 300,000 Franklin County,
OH, Hospital
Refunding &
Improvement Aa --- 300,570 300,57
Revenue Bonds 0
(1996 Series A),
5.20%
(Children's
Hospital)/(Origi
nal Issue Yield:
5.30%),
11/1/2004
--- 400,000 400,000 (B) Franklin
County, OH,
Hospital Revenue AA --- 410,880 410,88
Bonds (Series 0
1996), 5.50%
(Holy Cross
Health System
Corp.), 6/1/2004
--- 250,000 250,000 Franklin County,
OH Mortgage
Revenue,
Mortgage Revenue Aa --- 257,190 257,19
Bonds, 5.875% 0
(Seton Square
North, OH)/(FHA
GTD)/(Original
Issue Yield:
6.00%),
10/1/2004
1,300,000 --- 1,300,000 Hamilton County,
OH Health
System, Revenue
Refunding Bonds,
Providence BBB- 1,312,194 --- 1,312,
Hospital, 6.875% 194
(Franciscan
Sisters of
Christian
Charity
HealthCare
Ministry,
Inc.)/(Original
Issue Yield:
7.05%), 7/1/2015
700,000 --- 700,000 Hamilton County,
OH Hospital
Facilities
Authority, A- 736,267 --- 736,26
Revenue 7
Refunding &
Improvement
Bonds, 7.00%
(Deaconess
Hospital)/(Origi
nal Issue Yield:
7.046%),
1/1/2012
--- 490,000 490,000 Hamilton County,
OH Hospital
Facilities
Authority, A --- 500,270 500,27
Revenue 0
Refunding Bonds
(Series A),
5.50% (Bethesda
Hospital,
OH)/(Original
Issue Yield:
5.65%), 1/1/2000
2,000,000 --- 2,000,000 Hamilton County,
OH Hospital
Facilities
Authority, A 2,019,820 --- 2,019,
Revenue 820
Refunding Bonds
(Series A),
6.25% (Bethesda
Hospital,
OH)/(Original
Issue Yield:
6.55%), 1/1/2012
--- 500,000 500,000 Hamilton County,
OH Hospital
Facilities
Authority,
Refunding Aa2 --- $527,090 $527,0
Revenue Bonds 90
(Series 1992),
6.80% (Episcopal
Retirement
Homes,
Inc.)/(Fifth
Third Bank,
Cincinnati LOC),
1/1/2008
--- $200,000 $200,000 Hamilton County,
OH Sewer System,
Improvement & AAA --- 200,102 200,10
Revenue 2
Refunding Bonds
(Series A),
4.55% (FGIC
INS), 12/1/2000
--- 100,000 100,000 Kings Local
School District, NR --- 106,701 106,70
OH, UT GO Bonds, 1
6.25%, 12/1/2001
--- 100,000 100,000 Kings Local
School District, NR --- 109,085 109,08
OH, UT GO Bonds, 5
6.50%, 12/1/2003
440,000 --- 440,000 Lakewood, OH
Hospital
Improvement
Authority, AAA 444,730 --- 444,73
Revenue 0
Refunding Bonds
(Series One),
6.00% (Lakewood
Hospital,
OH)/(MBIA
INS)/(Original
Issue Yield:
6.90%),
2/15/2010
500,000 --- 500,000 Lebanon, OH
Waterworks
System, Revenue A 544,925 --- 544,92
Improvement and 5
Refunding Bonds,
7.10%, 3/1/2008
---- 300,000 300,000 Lucas County,
OH, Hospital
Revenue AAA --- 304,236 304,23
Refunding Bonds 6
(Series 1996),
5.00% (ProMedica
Healthcare
Obligated
Group)/(MBIA
INS), 11/15/2000
1,000,000 --- 1,000,000 Marion County,
OH Hospital
Authority,
Hospital
Refunding & BBB+ 991,880 --- 991,88
Improvement 0
Revenue Bonds
(Series 1996),
6.375%
(Community
Hospital of
Springfield)/(Or
iginal Issue
Yield: 6.52%),
5/15/2011
420,000 --- 420,000 Marysville, OH,
LT Sewer System A 453,319 --- 453,31
GO Bonds, 7.15%, 9
12/1/2011
--- 300,000 300,000 Miami County,
OH, Hospital
Facilities
Revenue
Refunding & AAA --- 303,297 303,29
Improvement 7
Bonds (Series
1996B), 5.20%
(Upper Valley
Medical Center,
OH)/(MBIA
INS)/(Original
Issue Yield:
5.30%),
5/15/2004
1,000,000 --- 1,000,000 Miami County,
OH, Hospital
Facilities
Revenue BBB 971,120 --- 971,12
Refunding & 0
Improvement
Bonds (Series
1996A), 6.375%
(Upper Valley
Medical Center,
OH)/(Original
Issue Yield:
6.62%),
5/15/2026
--- 150,000 150,000 Miami Valley
Regional Transit A --- 153,750 153,75
Authority, OH, 0
LT GO Bonds,
5.40%, 12/1/2004
650,000 --- 650,000 Middleburg
Heights, OH, LT Aa 716,580 --- 716,58
GO Bonds, 7.20%, 0
12/1/2011
1,000,000 --- 1,000,000 Montgomery
County, OH
Health
Facilities AAA 1,063,420 --- 1,063,
Authority, 420
Revenue Bonds
(Series A),
6.625% (Sisters
of Charity
Health Care
System)/(MBIA
INS)/(Original
Issue Yield:
6.80%),
5/15/2021
3,000,000 --- 3,000,000 Moraine, OH
Solid Waste
Disposal A- 3,260,250 --- 3,260,
Authority, 250
Revenue Bonds,
6.75% (General
Motors
Corp.)/(Original
Issue Yield:
6.80%), 7/1/2014
--- 300,000 300,000 Muskingum
County, OH,
(Series 1995)
Hospital
Facilities AAA --- 295,836 295,83
Refunding 6
Revenue Bonds,
5.10%
(Franciscan
Sisters of
Christian
Charity
HealthCare
Ministry,
Inc.)/(Connie
Lee
INS)/(Original
Issue Yield:
5.30%),
2/15/2006
--- 150,000 150,000 North Canton OH
City School A --- 154,227 154,22
District, LT GO 7
Energy
Conservation
Bonds, 5.50%,
12/1/2003
--- 300,000 300,000 Ohio Enterprise
Bond Fund,
(Series 1995-3) A- --- 298,209 298,20
State Economic 9
Development
Revenue Bonds,
5.60% (Smith
Steelite),
12/1/2003
--- 150,000 150,000 Ohio HFA,
Residential AAA --- 151,269 151,26
Mortgage Revenue 9
Bonds (Series A-
1), 5.40% (GNMA
COL), 3/1/2004
--- 600,000 600,000 Ohio HFA,
Residential AAA --- 607,884 607,88
MortgageRevenue 4
Bonds (Series B-
1), 5.80% (GNMA
COL), 9/1/2005
10,515,000 --- 10,515,000 Ohio HFA,
Residential AAA 10,800,06 --- 10,800
Mortgage Revenue 2 ,062
Bonds (Series B-
2), 6.70% (GNMA
COL), 3/1/2025
2,400,000 --- 2,400,000 Ohio HFA, SFM
Revenue Bonds
(Series A), AAA 2,516,496 --- 2,516,
7.65% (GNMA 496
COL)/(Original
Issue Yield:
7.669%),
3/1/2029
275,000 --- 275,000 Ohio HFA, SFM
Revenue Bonds AAA 288,761 --- 288,76
(Series A), 1
7.80% (GNMA
COL), 3/1/2030
$2,500,000 --- $2,500,000 Ohio State Air
Quality
Development BBB- $2,296,95 --- $2,296
Authority, PCR 0 ,950
Refunding Bonds
(Series A),
5.95% (Ohio
Edison Co.),
5/15/2029
500,000 --- 500,000 Ohio State Air
Quality
Development AAA 547,920 --- 547,92
Authority, PCR 0
Refunding Bonds
(Series A),
7.45% (Ohio
Edison
Co.)/(FGIC INS),
3/1/2016
4,800,000 --- 4,800,000 Ohio State Air
Quality
Development
Authority, AAA 4,980,384 --- 4,980,
Revenue 384
Refunding Bonds,
6.375% (JMG
Funding Limited
Partnership)/(AM
BAC
INS)/(Original
Issue Yield:
6.493%),
1/1/2029
--- 400,000 400,000 Ohio State
Building
Authority, State A+ --- 418,792 418,79
Correctional 2
Facilities
Revenue
Refunding Bonds,
Series A, 5.80%
(Original Issue
Yield: 5.95%),
10/1/2006
2,000,000 --- 2,000,000 Ohio State
Department of
Transportation, A+ 1,915,540 --- 1,915,
Certificates of 540
Participation,
6.125%
(Rickenbacker,
OH Port
Authority),
4/15/2015
2,000,000 --- 2,000,000 Ohio State
Turnpike AA- 1,947,460 --- 1,947,
Commission, 460
Revenue Bonds,
Series A, 5.75%,
2/15/2024
--- 350,000 350,000 Ohio State
Turnpike AAA --- 372,775 372,77
Commission, 5
Revenue Bonds
(Series A),
6.00% (FSA INS),
2/15/2005
--- 250,000 250,000 Ohio State, UT
GO Bonds, 5.60% AA --- 262,223 262,22
(Original Issue 3
Yield: 5.65%),
8/1/2002
1,700,000 --- 1,700,000 Ohio State Water
Development
Authority, PCR BBB- 1,545,045 --- 1,545,
Refunding Bonds, 045
5.95% (Ohio
Edison Co.),
5/15/2029
650,000 --- 650,000 Ohio State Water
Development
Authority, Pure
Water Revenue A 680,290 --- 680,29
Bonds, 7.00% 0
(United States
Treasury
PRF)/(Original
Issue Yield:
7.65%), 6/1/1998
(@100)
--- 250,000 250,000 Olentangy, OH
Local School
District, UT GO AA- --- 260,105 260,10
Bonds (Series 5
A), 5.60%
(Original Issue
Yield: 5.70%),
12/1/2004
350,000 --- 350,000 Rocky River, OH
City School
District, UT GO Aa 378,102 --- 378,10
Bonds (Series 2
A), 6.90%
(Original Issue
Yield: 6.98%),
12/1/2011
--- 195,000 195,000 Stow, OH, LT GO
Safety Center A1 --- 228,105 228,10
Construction 5
Bonds, 7.75%,
12/1/2003
500,000 --- 500,000 South Euclid,
OH, UT GO A1 542,350 --- 542,35
Refunding Bonds, 0
7.00%, 12/1/2011
--- 260,000 260,000 Summit County,
OH, LT Various AAA --- 273,593 273,59
Purpose GO 3
Bonds, 5.75%
(AMBAC INS),
12/1/2005
500,000 --- 500,000 Tiffin, OH, LT A 539,865 --- 539,86
GO Bonds, 7.10%, 5
12/1/2011
3,500,000 --- 3,500,000 Toledo-Lucas
County, OH Port
Authority, Port
Facilities Aa3 3,536,540 --- 3,536,
Revenue 540
Refunding Bonds,
5.90% (Cargill,
Inc.)/(Original
Issue Yield:
5.981%),
12/1/2015
--- 200,000 200,000 Toledo, OH Sewer
System, Revenue
Bonds, 5.75% AAA --- 211,474 211,47
(AMBAC 4
INS)/(Original
Issue Yield:
5.85%),
11/15/2005
500,000 --- 500,000 University of
Cincinnati, OH,
General Receipts AA- 545,360 --- 545,36
Revenue Bonds 0
(Series B),
7.00% (Original
Issue Yield:
7.05%), 6/1/2011
500,000 --- 500,000 University of
Cincinnati, OH,
Revenue Bonds AA- 529,130 --- 529,13
(Series 12), 0
6.50% (Original
Issue Yield:
6.613%),
6/1/2011
Total 66,112,53 8,161,371 74,273
2 ,903
PUERTO RICO-- ---
3.2%
2,400,000 --- 2,400,000 Puerto Rico
Electric Power
Authority, A- 2,501,182 --- 2,501,
Revenue Bonds 182
(Series T),
6.375% (Original
Issue Yield:
6.58%), 7/1/2024
VIRGIN ISLANDS-
-2.5%
--- $200,000 $200,000 Virgin Islands
HFA, SFM AAA --- $201,624 $201,624
Revenue
Refunding Bonds
(Series A),
5.70% (GNMA
COL), 3/1/2004
1,750,000 --- 1,750,000 Virgin Islands
HFA, SFM
Revenue AAA 1,767,220 --- 1,767,220
Refunding Bonds
(Series A),
6.50% (GNMA
COL)/(Original
Issue Yield:
6.522%),
3/1/2025
Total 1,767,220 201,624 1,968,844
TOTAL
INVESTMENTS $70,380,9 $8,362,9 $78,743,9
(IDENTIFIED 34 95 29
COST
$75,967,522)(A)
</TABLE>
Securities that are subject to alternative
minimum tax represents 43.6% of the portfolio
as calculated based upon total portfolio
market value.
(a) The cost of investments for federal tax
purposes amounts to $75,967,522. The net
unrealized appreciation of investments on a
federal tax basis amounts to $2,776,407 which
is comprised of $23,777,967 appreciation and
$21,001,560 depreciation at August 31, 1996.
(b) Denotes a when-issued security.
* Please refer to the Appendix of the Statement
of Additional Information for an explanation
of the credit ratings.
Not The categories of investments are shown as a
e: percentage of net assets ($79,060,787) at
August 31, 1996.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation
COL --Collateralized
FGIC --Financial Guaranty Insurance Company
FHA --Federal Housing Administration
FSA --Financial Security Assurance
GNMA --Government National Mortgage Association
GO --General Obligation
GTD --Guaranty
HFA --Housing Finance Authority
INS --Insured
LOC --Letter of Credit
LT --Limited Tax
MBIA --Municipal Bond Investors Assurance
PCR --Pollution Control Revenue
PRF --Prerefunded
SFM --Single Family Mortgage
UT --Unlimited Tax
(See Notes to Pro Forma Financial Statements)
FEDERATED OHIO INTERMEDIATE MUNICIPAL TRUST
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996 (UNAUDITED)
FEDERATED
FEDERATED OHIO
OHIO INTERMEDIATE
MUNICIPAL MUNICIPAL PRO FORMA PRO FORMA
INCOME TRUST ADJUSTMENT COMBINED
FUND
ASSETS:
Investments in $ 70,380,934$ 8,362,995 $ ---- $ 78,743,929
securities, at value
Cash 51,488 34,889 ---- 86,377
Deferred ---- 7,223 (7,223) (a) ----
Expenses
Receivables
for/from:
Investment Adviser ---- ---- 7,223 (a) 7,223
Shares of beneficial 22,095 ---- ---- 22,095
interest sold
Income 1,268,739 122,916 ---- 1,391,655
Total 71,723,256 8,528,023 ---- 80,251,279
assets
LIABILITIES:
Payables for/to:
Shares of beneficial
interest
redeemed 101 ---- ---- 101
Income distributions 119,082 34,193 ---- 153,275
Investments 990,737 ---- ---- 990,737
purchased
Accrued expenses and
other liabilities 45,621 758 ---- 46,379
Total 1,155,541 34,951 ---- 1,190,492
liabilities
TOTAL NET ASSETS $ 70,567,715 $ 8,493,072 $ 79,060,787
NET ASSETS CONSIST OF:
Paid in capital $ 68,463,362 $ 8,559,104 ---- $ 77,022,466
Net unrealized
appreciation of
investments 2,611,079 165,328 ---- 2,776,407
Accumulated net realized gain
(loss)
on (562,495) (231,360) ---- (793,855)
investments
Undistributed
net investment income 55,769 ---- ---- 55,769
TOTAL NET ASSETS $ 70,567,715 $ 8,493,072 $ ---- $ 79,060,787
SHARES OUTSTANDING 6,295,420 868,161 (110,485) (b) 7,053,096
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER
SHARE:
Net asset value per $ 11.21 $ 9.78 $ 11.21
share
Offering price per $ 11.32 * N/A $ 11.32 *
share $
Redemption proceeds $ 11.10 **$ N/A $ 11.10
per share
TOTAL INVESTMENTS, AT
IDENTIFIED COST $ 67,769,855 $ 8,197,667 $ 75,967,5
22
(a) Adjustment to reflect the elimination of deferred expenses.
(b) Adjustment to reflect share balance as a result of the combination,
based on the exchange ratio of
0.8727367389.
* See "What Shares Cost" in the Federated Ohio Municipal Income Fund
Prospectus, as of October 31,
1996.
** See `Contingent Deferred Sales Charge'' in the Federated Ohio Municipal
Income Fund Prospectus, as of
October 31, 1996.
(See Notes to Pro Forma Financial
Statements)
FEDERATED OHIO MUNICIPAL INCOME FUND
FEDERATED OHIO INTERMEDIATE MUNICIPAL TRUST
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED AUGUST 31, 1996 (UNAUDITED)
FEDERATED FEDERATED
OHIO OHIO
MUNICIPAL INTERMEDIA
TE
INCOME MUNICIPAL PRO FORMA PRO FORMA
FUND TRUST ADJUSTMENT COMBINED
S
INVESTMENT INCOME:
Interest $4,411,115 $398,891 $----- $4,810,006
EXPENSES:
Investment advisory fee 285,381 38,235 (7,651)(a) 315,965
Administrative personnel and 125,000 (125,087)(b) 125,000
services fee 125,087
Custodian fees 18,266 18,511 (17,911)(c) 18,866
Transfer and dividend
disbursing agent fees and 51,504 16,452 (10,432)(d) 57,524
expenses
Directors'/Trustees' 3,565 3,130 (3,130)(e) 3,565
fees
Auditing fees 13,711 16,687 (16,687)(f) 13,711
Legal fees 3,276 2,312 (1,812)(f) 3,776
Portfolio accounting 49,252 50,047 (45,084)(g) 54,215
fees
Distribution services fee 285,377 ---- ---- 285,377
Shareholder services fee 178,361 19,117 ---- 197,478
Share registration 16,062 20,541 (12,129)(h) 24,474
costs
Printing and postage 20,895 9,637 (7,500)(i) 23,032
Insurance premiums 4,236 3,376 (2,876)(j) 4,736
Taxes 215 171 ---- 386
Miscellaneous 2,160 11,165 (10,665)(k) 2,660
Total 1,057,261 334,468 (260,964) 1,130,765
expenses
Deduct-
Waiver of investment (233,662) (38,235) 47,893(a) (224,004)
advisory fee
Waiver of distribution (171,226) ---- ---- (171,226)
services fee
Waiver of shareholder (7,134) (13,959) ---- (21,093)
services fee
Reimbursement of other
operating ---- (247,525) 247,525(l) ----
expenses
Net 645,239 34,749 34,454 714,442
expenses
Net 3,765,876 364,142 (34,454) 4,095,564
investment income
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on 415,434 (4,386) ---- 411,048
investments
Net change in unrealized
appreciation (depreciation) of (528,504) (73,666) ---- (602,170)
investments
Net realized and
unrealized gain (loss) on (113,070) (78,052) ---- (191,122)
investments
Change in net assets
resulting from $3,652,806 $286,090 $(34,454) $3,904,442
operations
(See Notes to Pro Forma Combining Statement of Operations)
(See Notes to Pro Forma Financial
Statements)
Federated Ohio Municipal Income Fund
Federated Ohio Intermediate Municipal Trust
Notes to Pro Forma Combining Statement of Operations
For the Twelve Months Ended August 31, 1996 (unaudited)
(a) Federated Advisers receives for its services an annual investment
advisory fee equal to 0.40% of the Federated Ohio Municipal Income Fund's
(the `Municipal Income Fund'') average daily net assets. Federated
Management receives for its services an annual investment advisory fee
equal to 0.50% of the Federated Ohio Intermediate Municipal Trust's (the
`Intermediate Municipal Trust'') average daily net assets. Either adviser
may voluntarily choose to waive any portion of its fee.
(b) Federated Services Company (`FServ'') provides the funds with certain
administrative personnel and services. The fee paid to FServ is based on
the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during the period of the Administrative Services Agreement shall
be at least $125,000 per portfolio and $30,000 per each additional class of
shares.
(c) State Street Bank and Trust Company is custodian for the securities
and cash of the funds. The custodian fee is based upon the level of each
funds average daily net assets for the period plus out-of-pocket expenses.
(d) Fserv, through its subsidiary, Federated Shareholder Services Company
(`FSSC'') serves as transfer and dividend disbursing agent for the funds.
The fee paid to FSSC is based on the size, type and number of accounts and
transactions made by shareholders.
(e) Adjustment to reflect the elimination of the Trustees' fees paid for
Intermediate Municipal Trust .
(f) Adjustment to reflect the audit and legal fee reductions due to the
combining of two portfolios into a single portfolio.
(g) FServ maintains the funds accounting records. The fee paid to FServ is
based on the level of the fund's average daily net assets for the period,
plus out-of-pocket expenses.
(h) Adjustment to reflect the registration costs for the Municipal Income
Fund only and the write-off of the deferred expense balance for the
Intermediate Municipal Trust.
(i) Printing and postage expenses are adjusted to reflect estimated
savings to be realized by combining two portfolios into a single portfolio.
(j) Adjustment to reflect the decrease in insurance fees due to the
reduction in the coverage requirement of a single portfolio.
(k) Adjustment to reflect the miscellaneous expense for the Municipal
Income Fund only.
(l) Adjustment to reflect the elimination of the expense reimbursement due
to the expense reduction realized by combining two portfolios into a single
portfolio.
(See Notes to Pro Forma Financial Statements)
FEDERATED{PRIVATE } EXHIBIT 17.2
SECURITIES CORP. INTERMEDIATE MUNICIPAL TRUST
FEDERATED INVESTORS TOWER FEDERATED OHIO INTERMEDIATE
PITTSBURGH, PA 15222-3779 MUNICIPAL TRUST
SPECIAL MEETING OF SHAREHOLDERS
JULY 7, 1997
KNOW ALL PERSONS BY THESE
PRESENTS that the undersigned
Shareholder of FEDERATED OHIO
INTERMEDIATE MUNICIPAL TRUST, a
portfolio of Intermediate
Municipal Trust, hereby appoints
S. Elliott Cohan, Patricia F.
Conner, Catherine C. Ryan,
Amanda J. Reed, and Suzanne W.
Land,
or any of them, true and lawful
attorneys, with power of
substitution of each, to vote
all shares of FEDERATED OHIO
INTERMEDIATE MUNICIPAL TRUST, a
portfolio of Intermediate
Municipal Trust, which the
undersigned is entitled to vote,
at the Special Meeting of
Shareholders to be held on July
7, 1997, at Federated Investors
Tower, 1001 Liberty Avenue,
Nineteenth Floor, Pittsburgh,
Pennsylvania 15222-3779, at
2:00 p.m., and at any
adjournment thereof.
Discretionary authority is
hereby conferred as to all other
matters as may properly come
before the Special Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. THE ATTORNEYS
NAMED WILL VOTE THE SHARES REPRESENTED BY THIS PROXY IN ACCORDANCE WITH THE
CHOICE MADE ON THIS BALLOT. IF THIS PROXY IS RETURNED AND NO CHOICE IS
INDICATED AS TO ANY MATTER, THIS PROXY WILL BE VOTED AFFIRMATIVELY ON THE
MATTER PRESENTED.
PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS X KEEP
THIS PORTION FOR YOUR RECORDS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
FEDERATED OHIO INTERMEDIATE MUNICIPAL TRUSTDETACH AND RETURN
THIS PORTION ONLY
{PRIVATE }
VOTE ON
PROPOSAL
FORAGAINSTABSTAIN
" " " 1. APPROVAL OF A PROPOSED AGREEMENT
AND PLAN OF REORGANIZATION
BETWEEN INTERMEDIATE MUNICIPAL
TRUST, ON BEHALF OF FEDERATED
OHIO INTERMEDIATE MUNICIPAL TRUST
(THE "FUND"), AND MUNICIPAL
SECURITIES INCOME TRUST (THE
"TRUST"), ON BEHALF OF ITS
PORTFOLIO, FEDERATED OHIO
MUNICIPAL INCOME FUND (THE
"PORTFOLIO"), WHEREBY THE TRUST
WOULD ACQUIRE ALL OF THE ASSETS
OF THE FUND IN EXCHANGE FOR CLASS
F SHARES OF THE PORTFOLIO TO BE
DISTRIBUTED PRO RATA BY THE FUND
TO HOLDERS OF FUND SHARES IN
COMPLETE LIQUIDATION OF THE FUND.
PLEASE SIGN EXACTLY YOUR NAME(S) AS IT APPEARS BELOW. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, GUARDIAN, TRUSTEE, CUSTODIAN, ETC.,
PLEASE GIVE YOUR FULL TITLE AS SUCH. IF A CORPORATION OR PARTNERSHIP,
PLEASE SIGN THE FULL NAME BY AN AUTHORIZED OFFICER OR PARTNER. IF
SHARES ARE OWNED JOINTLY, ALL PARTIES SHOULD SIGN.
SIGNATURE SIGNATURE (JOINT OWNERS) DATE
b358\rcr\federated\intermediate\ballot.
