<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 16, 1998
REGISTRATION NO. 33-42074
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------
POST-EFFECTIVE AMENDMENT NO. 7
TO
FORM S-6
------------------------------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
------------------------------------------
A. EXACT NAME OF TRUST:
DEFINED ASSET FUNDS--
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--9H
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SALOMON SMITH BARNEY INC.
PRUDENTIAL SECURITIES INCORPORATED
PAINEWEBBER INCORPORATED
DEAN WITTER REYNOLDS INC.
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE,
FENNER & SMITH
INCORPORATED
DEFINED ASSET FUNDS
POST OFFICE BOX 9051
PRINCETON, NJ 08543-9051 SALOMON SMITH BARNEY INC.
388 GREENWICH
STREET--23RD FLOOR
NEW YORK, NY 10013
PRUDENTIAL SECURITIES PAINEWEBBER INCORPORATED DEAN WITTER REYNOLDS INC.
INCORPORATED 1285 AVENUE OF THE TWO WORLD TRADE
ONE NEW YORK PLAZA AMERICAS CENTER--59TH FLOOR
NEW YORK, NY 10292 NEW YORK, NY 10019 NEW YORK, NY 10048
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
TERESA KONCICK, ESQ. ROBERT E. HOLLEY LAURIE A. HESSLEIN
P.O. BOX 9051 1200 HARBOR BLVD. 388 GREENWICH ST.
PRINCETON, NJ 08543-9051 WEEHAWKEN, NJ 07087 NEW YORK, NY 10013
LEE B. SPENCER, JR. COPIES TO: DOUGLAS LOWE, ESQ.
ONE NEW YORK PLAZA PIERRE DE SAINT PHALLE, DEAN WITTER REYNOLDS INC.
NEW YORK, NY 10292 ESQ. TWO WORLD TRADE
450 LEXINGTON AVENUE CENTER--59TH FLOOR
NEW YORK, NY 10017 NEW YORK, NY 10048
The issuer has registered an indefinite number of Units under the Securities Act
of 1933 pursuant to Rule 24f-2 and filed the Rule 24f-2 Notice for the most
recent fiscal year on March 10, 1998.
Check box if it is proposed that this filing will become effective on November
20, 1998 pursuant to paragraph (b) of Rule 485. / x /
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<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------
- ----------------------------------
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--9H
(A UNIT INVESTMENT TRUST)
O CALIFORNIA, NORTH CAROLINA, PENNSYLVANIA AND
VIRGINIA PORTFOLIOS
O PORTFOLIOS OF LONG TERM MUNICIPAL BONDS
O DESIGNED FOR FEDERALLY TAX-FREE INCOME
O EXEMPT FROM SOME STATE TAXES
O MONTHLY DISTRIBUTIONS
SPONSORS:
Merrill Lynch,
Pierce, Fenner & Smith -------------------------------------------------
Incorporated The Securities and Exchange Commission has not
Salomon Smith Barney Inc. approved or disapproved these Securities or
Prudential Securities passed upon the adequacy of this prospectus. Any
Incorporated representation to the contrary is a criminal
PaineWebber Incorporated offense.
Dean Witter Reynolds Inc. Prospectus dated November 20, 1998.
<PAGE>
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Defined Asset FundsSM
Defined Asset FundsSM is America's oldest and largest family of unit investment
trusts, with over $115 billion sponsored over the last 25 years. Defined Asset
Funds has been a leader in unit investment trust research and product
innovation. Our family of Funds helps investors work toward their financial
goals with a full range of quality investments, including municipal, corporate
and government bond portfolios, as well as domestic and international equity
portfolios.
Defined Asset Funds offer a number of advantages:
o A disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
o Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
o Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
o Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
o Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.
THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF AUGUST 31, 1998, THE
EVALUATION DATE.
CONTENTS
PAGE
-----------
California Insured Portfolio--
Risk/Return Summary.................................. 3
North Carolina Portfolio-- Risk/Return Summary.......... 6
Pennsylvania Insured Portfolio-- Risk/Return Summary.... 9
Virginia Portfolio--Risk/Return Summary................. 12
What You Can Expect From Your Investment................ 16
Monthly Income....................................... 16
Return Figures....................................... 16
Records and Reports.................................. 16
The Risks You Face...................................... 17
Interest Rate Risk................................... 17
Call Risk............................................ 17
Reduced Diversification Risk......................... 17
Liquidity Risk....................................... 17
Concentration Risk................................... 17
State Concentration Risk............................. 18
Bond Quality Risk.................................... 20
Insurance Related Risk............................... 20
Litigation and Legislation Risks..................... 20
Selling or Exchanging Units............................. 20
Sponsors' Secondary Market........................... 20
Selling Units to the Trustee......................... 21
Exchange Option...................................... 21
How The Fund Works...................................... 22
Pricing.............................................. 22
Evaluations.......................................... 22
Income............................................... 22
Expenses............................................. 22
Portfolio Changes.................................... 23
Fund Termination..................................... 23
Certificates......................................... 23
Trust Indenture...................................... 23
Legal Opinion........................................ 24
Auditors............................................. 24
Sponsors............................................. 24
Trustee.............................................. 25
Underwriters' and Sponsors' Profits 25
Public Distribution.................................. 25
Code of Ethics....................................... 25
Year 2000 Issues..................................... 25
Taxes................................................... 26
Supplemental Information................................ 28
Financial Statements.................................... D-1
2
<PAGE>
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CALIFORNIA INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 10 long-term tax-exempt
municipal bonds with an aggregate face amount of
$6,730,000. The Fund is a unit investment trust which means
that, unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o The Fund is concentrated in refunded bonds.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Hospitals/Healthcare 15%
/ / Refunded Bonds 61%
/ / Special Tax Issues 12%
/ / State/Local Government Supported 12%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF CALIFORNIA
SO IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO CALIFORNIA WHICH ARE BRIEFLY
DESCRIBED UNDER STATE CONCENTRATION RISKS LATER IN THIS
PROSPECTUS.
3
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in bonds of
several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 5.00
Annual Income per unit: $ 60.05
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
2.90%
Maximum Sales Fee (Load) on new purchases
(as a percentage of $1,000 invested)
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.64
Trustee's Fee
$ 0.38
Portfolio Supervision,
Bookkeeping and
Administrative Fees
$ 0.15
Evaluator's Fee
$ 0.18
Other Operating Expenses
-----------
$ 1.35
TOTAL
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
California Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to this
Fund. These prior Series differed in that they charged a
higher sales fee. These prior California Series were offered
between March 30, 1988 and September 27, 1996 and were
outstanding on September 30, 1998. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 9/30/98.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 6.54% 5.07% 7.45% 11.50% 6.15% 8.05%
Average 4.38 4.38 7.32 7.66 5.39 7.91
Low 2.62 3.84 7.19 4.39 4.75 7.68
- -------------------------------------------------------------------
Average
Sales fee 3.18% 5.01% 5.70%
- -------------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
4
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is $250.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,004.12
(as of August 31, 1998)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
UNIT PAR VALUE $1,000.00
Unit par value means the total amount of money you should
generally receive on each unit by the termination of the
Fund (other than interest and premium on the bonds). This
total amount assumes that all bonds in the Fund are either
paid at maturity or called by the issuer at par or are sold
by the Fund at par. If you sell your units before the Fund
terminates, you may receive more or less than the unit par
value.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other
fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some California state and local personal income
taxes if you live in California.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective, but the bonds will generally not be
insured. Income from this program will generally be subject
to state and local income taxes. For more complete
information about the program, including charges and fees,
ask the Trustee for the program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
5
<PAGE>
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NORTH CAROLINA PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 6 long-term tax-exempt
municipal bonds with an aggregate face amount of
$2,115,000. The Fund is a unit investment trust which means
that, unlike a mutual fund, the Portfolio is not managed.
o When the bonds were initially deposited they were rated A
or better by Standard & Poor's, Moody's or Fitch. The
quality of the bonds may currently be lower.
o The Fund is concentrated in refunded bonds.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 28% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Hospitals/Healthcare 22%
/ / Refunded Bonds 64%
/ / State/Local Municipal Electric
Utilities 14%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
[ALT: In addition, % of the bonds are currently rated
lower than investment grade and % of the bonds are
currently unrated. % of the bonds are defaulted
bonds.]
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF NORTH
CAROLINA SO IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND
IS SUBJECT TO RISKS PARTICULAR TO NORTH CAROLINA WHICH ARE
BRIEFLY DESCRIBED UNDER STATE CONCENTRATION RISKS LATER IN
THIS PROSPECTUS.
6
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in bonds of
several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.25
Annual Income per unit: $ 51.03
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
2.90%
Maximum Sales Fee (Load) on new purchases
(as a percentage of $1,000 invested)
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.57
Trustee's Fee
$ 0.35
Portfolio Supervision,
Bookkeeping and
Administrative Fees
$ 0.43
Evaluator's Fee
$ 0.49
Other Operating Expenses
-----------
$ 1.84
TOTAL
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
North Carolina Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to this
Fund. These prior Series differed in that they charged a
higher sales fee. These prior North Carolina Series were
offered between May 19, 1988 and June 23, 1994 and were
outstanding on September 30, 1998. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 9/30/98.
NO SALES
WITH SALES FEE FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
- -------------------------------------------------------------------
High 5.56% 4.95% 9.10% 6.13%
Average 4.01 4.39 6.49 5.37
Low 2.76 3.89 4.72 4.63
- -------------------------------------------------------------------
Average
Sales fee 2.42% 4.87% ----------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
7
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is $250.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $886.02
(as of August 31, 1998)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
UNIT PAR VALUE $1,000.00
Unit par value means the total amount of money you should
generally receive on each unit by the termination of the
Fund (other than interest and premium on the bonds). This
total amount assumes that all bonds in the Fund are either
paid at maturity or called by the issuer at par or are sold
by the Fund at par. If you sell your units before the Fund
terminates, you may receive more or less than the unit par
value.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other
fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some North Carolina state and local personal
income taxes if you live in North Carolina.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective. Income from this program will
generally be subject to state and local income taxes. For
more complete information about the program, including
charges and fees, ask the Trustee for the program's
prospectus. Read it carefully before you invest. The Trustee
must receive your written election to reinvest at least 10
days before the record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
8
<PAGE>
- --------------------------------------------------------------------------------
PENNSYLVANIA INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 7 long-term tax-exempt
municipal bonds with an aggregate face amount of
$4,420,000. The Fund is a unit investment trust which means
that, unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o The Fund is concentrated in refunded bonds.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Hospitals/Healthcare 18%
/ / Lease Rental Appropriation 19%
/ / Refunded Bonds 63%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF
PENNSYLVANIA SO IT IS LESS DIVERSIFIED THAN A NATIONAL FUND
AND IS SUBJECT TO RISKS PARTICULAR TO PENNSYLVANIA WHICH
ARE BRIEFLY DESCRIBED UNDER STATE CONCENTRATION RISKS LATER
IN THIS PROSPECTUS.
9
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in bonds of
several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 5.46
Annual Income per unit: $ 65.50
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
2.90%
Maximum Sales Fee (Load) on new purchases
(as a percentage of $1,000 invested)
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.69
Trustee's Fee
$ 0.40
Portfolio Supervision,
Bookkeeping and
Administrative Fees
$ 0.25
Evaluator's Fee
$ 0.31
Other Operating Expenses
-----------
$ 1.65
TOTAL
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
Pennsylvania Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to this
Fund. These prior Series differed in that they charged a
higher sales fee. These prior Pennsylvania Series were
offered between March 4, 1988 and September 11, 1997 and
were outstanding on September 30, 1998. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 9/30/98.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 6.45% 5.08% 7.33% 10.73% 6.08% 7.93%
Average 3.97 4.31 7.28 7.24 5.35 7.86
Low 2.42 3.72 7.22 3.61 4.76 7.76
- -------------------------------------------------------------------
Average
Sales fee 3.20% 5.12% 5.60%
- -------------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
10
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is $250.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,081.73
(as of August 31, 1998)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
UNIT PAR VALUE $1,000.00
Unit par value means the total amount of money you should
generally receive on each unit by the termination of the
Fund (other than interest and premium on the bonds). This
total amount assumes that all bonds in the Fund are either
paid at maturity or called by the issuer at par or are sold
by the Fund at par. If you sell your units before the Fund
terminates, you may receive more or less than the unit par
value.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other
fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some Pennsylvania state and local personal
income taxes if you live in Pennsylvania.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective, but the bonds generally will not be
insured. Income from this program will generally be subject
to state and local income taxes. For more complete
information about the program, including charges and fees,
ask the Trustee for the program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
11
<PAGE>
- --------------------------------------------------------------------------------
VIRGINIA PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of long
term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 8 long-term tax-exempt
municipal bonds with an aggregate face amount of $2,420,000
including some short-term bonds reserved to pay the
deferred sales fee. The Fund is a unit investment trust
which means that, unlike a mutual fund, the Portfolio is
not managed.
o When the bonds were initially deposited they were rated A
or better by Standard & Poor's, Moody's or Fitch. The
quality of the bonds may currently be lower.
o The Fund is concentrated in refunded bonds.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 20% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Hospitals/Healthcare 19%
/ / Housing 21%
/ / Refunded Bonds 58%
/ / State/Local Municipal Electric
Utilities 2%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF VIRGINIA SO
IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT
TO RISKS PARTICULAR TO VIRGINIA WHICH ARE BRIEFLY DESCRIBED
UNDER STATE CONCENTRATION RISKS LATER IN THIS PROSPECTUS.
12
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in bonds of
several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 5.44
Annual Income per unit: $ 65.33
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
2.90%
Maximum Sales Fee (Load) on new purchases
(as a percentage of $1,000 invested)
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.69
Trustee's Fee
$ 0.40
Portfolio Supervision,
Bookkeeping and
Administrative Fees
$ 0.45
Evaluator's Fee
$ 0.46
Other Operating Expenses
-----------
$ 2.00
TOTAL
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
Virginia Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to this
Fund. These prior Series differed in that they charged a
higher sales fee. These prior Virginia Series were offered
between March 9, 1988 and June 13, 1997 and were outstanding
on September 30, 1998. OF COURSE, PAST PERFORMANCE OF PRIOR
SERIES IS NO GUARANTEE OF FUTURE RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 9/30/98.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
- ---------------------------------------------------------------
High 5.97% 5.09% 10.17% 6.26%
Average 4.17 4.44 6.82 5.43
Low 2.82 3.83 4.75 4.72
- ---------------------------------------------------------------
Average
Sales fee 2.58% 4.92%
- -------------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
13
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is $250.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,078.25
(as of August 31, 1998)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
UNIT PAR VALUE $1,000.00
Unit par value means the total amount of money you should
generally receive on each unit by the termination of the
Fund (other than interest and premium on the bonds). This
total amount assumes that all bonds in the Fund are either
paid at maturity or called by the issuer at par or are sold
by the Fund at par. If you sell your units before the Fund
terminates, you may receive more or less than the unit par
value.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other
fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some Virginia state and local personal income
taxes if you live in Virginia.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective. Income from this program will
generally be subject to state and local income taxes. For
more complete information about the program, including
charges and fees, ask the Trustee for the program's
prospectus. Read it carefully before you invest. The Trustee
must receive your written election to reinvest at least 10
days before the record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
14
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR CALIFORNIA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,350 $ $0- 42,350 20.10 3.75 4.38 5.01 5.63 6.26 6.88 7.51 8.14
$ 25,351- 61,400 $ 42,351-102,300 34.70 4.59 5.36 6.13 6.89 7.66 8.42 9.19 9.95
$ 61,401-128,100 $102,301-155,950 37.42 4.79 5.59 6.39 7.19 7.99 8.79 9.59 10.39
$128,101-278,450 $155,951-278,450 41.95 5.17 6.03 6.89 7.75 8.61 9.47 10.34 11.20
OVER $278,450 OVER $278,450 45.22 5.48 6.39 7.30 8.21 9.13 10.04 10.95 11.87
</TABLE>
FOR NORTH CAROLINA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0- 25,350 $ 0- 42,350 20.95 3.80 4.43 5.05 5.89 6.38 6.96 7.69 8.22
$ 25,350- 81,400 $ 42,350-102,300 33.58 4.52 5.27 6.02 6.78 7.53 8.28 9.03 9.79
$ 81,400-128,100 $102,300-155,950 36.35 4.71 5.60 6.28 7.07 7.88 8.04 9.43 10.21
$128,100-278,450 $155,950-278,450 40.96 5.08 5.93 6.78 7.62 8.47 9.32 10.16 11.01
OVER $278,450 OVER $278,450 44.28 5.38 6.28 7.18 8.08 8.97 9.87 10.77 11.67
</TABLE>
FOR PENNSYLVANIA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5% 7%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,350 $ 0- 42,350 17.38 3.63 4.24 4.84 5.45 6.05 6.66 7.26 7.87 8.47
$ 25,350- 61,400 $ 42,350-102,300 30.02 4.29 5.00 5.72 6.43 7.14 7.86 8.57 9.29 10.00
$ 61,400-128,100 $102,300-155,950 32.93 4.47 5.22 5.96 6.71 7.46 8.20 8.95 9.69 10.44
$128,100-278,450 $155,940-278,450 37.79 4.82 5.63 6.43 7.23 8.04 8.84 9.65 10.45 11.25
OVER $278,450 OVER $278,450 41.29 5.11 5.96 6.81 7.66 8.52 9.37 10.22 11.07 11.92
</TABLE>
FOR VIRGINIA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,350 $ 0- 42,350 19.89 3.74 4.37 4.88 5.62 6.24 6.87 7.49 8.11
$ 25,350- 61,400 $ 42,350-102,300 32.14 4.42 5.16 5.89 6.63 7.37 8.10 8.84 9.58
$ 61,400-128,100 $102,300-155,950 34.97 4.81 5.38 6.15 6.92 7.69 8.46 9.23 10.00
$128,100-278,450 $155,950-278,450 39.68 4.97 5.80 6.83 7.48 8.29 9.12 9.95 10.78
OVER $278,450 OVER $278,450 43.07 5.27 6.15 7.03 7.90 8.78 9.86 10.54 11.42
</TABLE>
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates 1998
federal and applicable state income tax rates and assumes that all income would
otherwise be taxed at the investor's highest tax rate. Yield figures are for
example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions or the possible partial disallowance of
deductions. Consequently, you should consult your own tax advisers in this
regard.
15
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
o elimination of one or more bonds from the Fund's portfolio because of
calls, redemptions or sales;
o a change in the Fund's expenses; or
o the failure by a bond's issuer to pay interest.
Changes in interest rates generally will not affect your income because the
portfolio is fixed.
Along with your income, you will receive your share of any available bond
principal.
RETURN FIGURES
We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.
Estimated Current Return equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):
Estimated Annual Estimated
Interest Income - Annual Expenses
- -------------------------------------------------
Unit Price
Estimated Long Term Return is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.
Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.
These return quotations are designed to be comparative rather than predictive.
RECORDS AND REPORTS
You will receive:
o a monthly statement of income payments and any principal payments;
o a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
o an annual report on Fund activity; and
o annual tax information. This will also be sent to the IRS. You must report the
amount of tax-exempt interest received during the year.
You may request:
o copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
o audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
16
<PAGE>
THE RISKS YOU FACE
INTEREST RATE RISK
Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, bonds with longer maturities will
change in value more than bonds with shorter maturities. Bonds in the Fund are
more likely to be called when interest rates decline. This would result in early
returns of principal to you and may result in early termination of the Fund. Of
course, we cannot predict how interest rates may change.
CALL RISK
Many bonds can be prepaid or 'called' by the issuer before their stated
maturity.
For example, some bonds may be required to be called pursuant to mandatory
sinking fund provisions.
Also, an issuer might call its bonds during periods of falling interest rates,
if the issuer's bonds have a coupon higher than current market rates.
An issuer might call its bonds in extraordinary cases, including if:
o it no longer needs the money for the original purpose;
o the project is condemned or sold;
o the project is destroyed and insurance proceeds are used to redeem the
bonds;
o any related credit support expires and is not replaced; or
o interest on the bonds become taxable.
If the bonds are called, your inocme will decline and you may not be able to
reinvest the money you receive at as high a yield or as long a maturity. An
early call at par of a premium bond will reduce your return.
REDUCED DIVERSIFICATION RISK
If many investors sell their units, the Fund will have to sell bonds. This could
reduce the diversification of your investment and increase your share of Fund
expenses.
LIQUIDITY RISK
You can always sell back your units, but we cannot assure you that a liquid
trading market will always exist for the bonds in the portfolio, especially
since current law may restrict the Fund from selling bonds to any Sponsor. The
bonds will generally trade in the over-the-counter market. The value of the
bonds, and of your investment, may be reduced if trading in bonds is limited or
absent.
CONCENTRATION RISK
When a certain type of bond makes up 25% or more of the portfolio, it is said to
be 'concentrated' in that bond type, which makes the Portfolio less diversified.
Here is what you should know about each Portfolio's concentration in refunded
bonds.
Refunded bonds are typically:
o backed by direct obligations of the U.S. government; or
o in some cases, backed by obligations guaranteed by the U.S. government and
placed in escrow with an independent trustee;
o noncallable prior to maturity; but
o sometimes called for redemption prior to maturity.
Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentrations over time.
17
<PAGE>
STATE CONCENTRATION RISK
CALIFORNIA RISKS
Generally
From the late 1980s through the early 1990s, an economic recession eroded
California's revenue base. At the same time rapid population growth caused State
expenditures to exceed budget appropriations.
o As a result California experienced a period of sustained budget imbalance.
o Since that time the California economy has improved and the extreme
budgetary pressures have begun to lessen. However, the Asian economic
crisis is expected to have some negative effect on the State's economy.
State Government
The 1997-98 Budget Act allocated a State budget of approximately $66.9 Billion
and contains no tax increases or reductions. Despite this somewhat improved
state, California's budget is still subject to certain unforeseeable events. For
example:
o In December, 1994, Orange County and its investment pool filed for
bankruptcy. While a settlement has been reached, the impact, if any on the
State and Orange County is still unknown.
o California faces constant fluctuations in other expenses (including health
and welfare caseloads, property tax receipts, federal funding and natural
disaster relief) that could create new budgetary pressure and could effect
issuers' ability to pay their debts.
o California's general obligation bonds are currently rated AA3 by Moody's
and A+ by Standard & Poor's.
Other Risks
Issuers' ability to make payments on bonds (and the remedies available to
bondholders) could also be adversely affected by the following constraints:
o Certain provisions of California's Constitution, laws and regulatory system
contain tax, spending and appropriations limits and prohibit the
imposition of certain taxes without voter approval.
o Certain other California laws subject the users of bond proceeds to strict
rules and limits regarding revenue repayment.
o Bonds of healthcare institutions which are subject to the strict rules and
limits regarding reimbursement payments of California's Medi-Cal program
for health care services to welfare recipients and bonds secured by liens
on real property are two of the types of bonds that could be affected by
these provisions.
NORTH CAROLINA RISKS
Generally
North Carolina has seen significant growth over the past 25 years, including
increases in population, labor force, and per capita income. It has become the
tenth most populous state, and has had an unemployment rate below the national
average for several years. Nonetheless, it remains primarily a rural state.
North Carolina's economy consists of a combination of industry, agriculture and
tourism:
o the state ranked tenth nationally in non-agricultural employment and eighth
in manufacturing employment in 1997;
o the state also ranked eighth nationally in gross agricultural income in
1995;
18
<PAGE>
o the state's agriculture industry is the third most diversified in the
country which has protected farm income from some of the wide swings that
have been seen in other states; and
o the number of farms in the state has been decreasing, but the state's
agribusiness sector, such as processing of farm products, and farm inputs
such as fertilizer and farm machinery remains strong.
State and Local Government
The state constitution requires a balanced budget.
During the recession of the late 1980s and early 1990s, the state spent nearly
all of its retained surplus, imposed new taxes and cut spending to avoid a
budget deficit. These actions helped maintain the state's credit rating, but at
the cost of reduced spending on infrastructure and social development projects.
Since then, the state has seen an economic recovery, and state revenues have
increased faster than expected. As a result, the state has lowered some taxes,
including the corporate income tax and the food tax.
Most of the North Carolina bonds in the Trust will not be general obligation
bonds of the state. Instead, they will be revenue bonds repaid from the proceeds
of certain revenue-producing governmental activities or revenues generated by
private entities. Therefore, they are subject to certain risks that are
different from the general economic risks facing the state. Also, the Trust is
concentrated on North Carolina bonds, which creates additional risk based on
lack of diversification.
The state's general obligations are rated Aaa by Moody's and AAA by Standard &
Poor's.
PENNSYLVANIA RISKS
Generally
Pennsylvania and many of its municipalities (including Philadelphia) have
undergone an economic decline:
o coal, steel, railroads and other heavy industry historically associated
with the Commonwealth has given way to increased competition from foreign
producers.
o agriculture and related industries are still an important part of the
Commonwealth's economy.
o Recently, however, service sector industries (trade, medical and health
services, education and financial services) have provided new sources of
growth.
State and Local Governments
Historically, both the Commonwealth and the City of Philadelphia have
experienced serious revenue shortfalls. At the same time, rising demands for
state and local programs and services (particularly medical assistance and cash
assistance programs) have lead to increased spending.
o In recent years, both the Commonwealth and the City of Philadelphia have
tried to balance their budgets with a mix of tax increases and spending
cuts.
o Philadelphia has considered significant service cuts and privatization of
certain services which it has provided to date.
o In 1991, the Commonwealth created the Pennsylvania Inter-Governmental
Cooperation Authority ('PICA') which it authorized to issue debt to cover
Philadelphia's budget shortfalls, eliminate the City's projected deficits
and fund its capital spending. PICA issued approximately $1.76 billion of
Special
19
<PAGE>
Revenue Bonds on Philadelphia's behalf. Its power to issue bonds on
Philadelphia's behalf expired at the end of 1996; as of June 30, 1997,
approximately $1.1 billion in PICA Special Revenue Bonds were outstanding.
o Pennsylvania's general obligation bonds are currently rated A1 by Moody's
and AA-by Standard & Poor's. Philadelphia's general obligation bonds are
rated Baa by Moody's and BBB by Standard & Poor's. There can be no
assurance that these ratings will not be lowered.
VIRGINIA RISKS
Virginia's economy is highly dependent on defense spending:
o there are major concentrations of defense installations in Northern
Virginia and the Hampton Roads area; and
o any substantial reductions in military spending, including base closings,
could hurt both the state and local economies.
The state's general obligations are rated AAA by Standard & Poor's and Aaa by
Moody's.
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.
INSURANCE RELATED RISK
Some bonds may be backed by insurance companies (as shown under Portfolios).
Insurance policies generally make payments only according to a bond's original
payment schedule and do not make early payments when a bond defaults or becomes
taxable. Although the federal government does not regulate the insurance
business, various state laws and federal initiatives and tax law changes could
significantly affect the insurance business. The claims-paying ability of the
insurance companies is generally rated A or better by Standard & Poor's or
another nationally recognized rating organization. The insurance company ratings
are subject to change at any time at the discretion of the rating agencies.
LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
Future tax legislation could affect the value of the portfolio by:
o limiting real property taxes,
o reducing tax rates,
o imposing a flat or other form of tax, or
o exempting investment income from tax.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:
o adding the value of the bonds, net accrued interest, cash and any other
Fund assets;
o subtracting accrued but unpaid Fund expenses, unreimbursed Trustee
advances, cash held to buy back units or for distribution to investors and
any other Fund liabilities; and
o dividing the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any
20
<PAGE>
other fee or charge. We may resell the units to other buyers or to the Trustee.
You should consult your financial professional for current market prices to
determine if other broker-dealers or banks are offering higher prices.
We have maintained the secondary market continuously for over 25 years, but we
could discontinue it without prior notice for any business reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold Unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional documents are
needed such as a trust document, certificate of corporate authority, certificate
of death or appointment as executor, administrator or guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.
There could be a delay in paying you for your units:
o if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
o if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
bonds not reasonably practicable; and
o for any other period permitted by SEC order.
EXCHANGE OPTION
You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 1.90%. You may exchange units of this Fund for units
of certain other Defined Asset Funds at a reduced sales fee if your investment
goals change. To exchange units, you should talk to your financial professional
about what funds are exchangeable, suitable and currently available.
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.
We may amend or terminate this exchange option at any time without notice.
21
<PAGE>
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the bonds, less expenses, from
the initial most recent Record Day up to, but not including, the settlement
date, which is usually three business days after the purchase date of the unit.
A portion of the price of a unit consists of cash so that the Trustee can
provide you with regular monthly income. When you sell your units you will
receive your share of this cash.
EVALUATIONS
An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
Bond values are based on current bid or offer prices for the bonds or comparable
bonds. In the past, the difference between bid and offer prices of publicly
offered tax-exempt bonds has ranged from 0.5% of face amount on actively traded
issues to 3.5% on inactively traded issues; the difference has averaged between
1 and 2%.
INCOME
The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.
EXPENSES
The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:
o to reimburse the Trustee for the Fund's operating expenses;
o for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
o costs of actions taken to protect the Fund and other legal fees and
expenses;
o expenses for keeping the Fund's registration statement current; and
o Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 45 cents per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. While this
fee may exceed the amount of these costs and expenses attributable to this Fund,
the total of these fees for all Series of Defined Asset Funds will not exceed
the aggregate amount attributable to all of these Series for any calendar year.
The Fund also pays the Evaluator's fees.
The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.
The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the Fund will owe the excess. The
Trustee has a lien on Fund assets to secure reimbursement of Fund expenses and
may sell bonds if cash is not available.
22
<PAGE>
PORTFOLIO CHANGES
The Sponsors and Trustee are not liable for any default or defect in a bond; if
a contract to buy any bond.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
bonds in the portfolio even if their credit quality declines or other adverse
financial circumstances occur. However, we may sell a bond in certain cases if
we believe that certain adverse credit conditions exist or if a bond becomes
taxable.
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which will affect the size
and composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
o diversity of the portfolio;
o size of the Fund relative to its original size;
o ratio of Fund expenses to income;
o current and long-term returns;
o degree to which units may be selling at a premium over par; and
o cost of maintaining a current prospectus.
FUND TERMINATION
The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of bonds deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.
When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final sale.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.
CERTIFICATES
Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.
TRUST INDENTURE
The Fund is a 'unit investment trust' governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
o to cure ambiguities;
23
<PAGE>
o to correct or supplement any defective or inconsistent provision;
o to make any amendment required by any governmental agency; or
o to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Fund without your written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
o it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
o it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsors and the Trustee without the consent of
investors. The resignation or removal of either becomes effective when a
successor accepts appointment. The Sponsors will try to appoint a successor
promptly; however, if no successor has accepted within 30 days after notice of
resignation, the resigning Trustee or Evaluator may petition a court to appoint
a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
o remove it and appoint a replacement Sponsor;
o liquidate the Fund; or
o continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
counsel for the Sponsors, has given an opinion that the units are validly
issued. Special counsel located in the relevant states have given state and
local tax opinions.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statements of Condition included in this
prospectus.
SPONSORS
The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of The
Travelers Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
24
<PAGE>
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PRUDENTIAL SECURITIES INCORPORATED (an
indirect wholly-owned subsidiary of the
Prudential Insurance Company of America)
One New York Plaza
New York, NY 10292
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
TRUSTEE
The Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th Floor, New York, New York 10004, is the Trustee.
The Bank of New York, 101 Barclay Street, 17 W. New York, New York 10268, is the
Trustee.
It is supervised by the Federal Deposit Insurance Corporation, the Board of
Governors of the Federal Reserve System and New York State banking authorities.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. The Sponsors also
realized a profit or loss on the initial date of deposit of the bonds. Any cash
made available by you to the Sponsors before the settlement date for those units
may be used in the Sponsors' businesses to the extent permitted by federal law
and may benefit the Sponsors.
A Sponsor or Underwriter may realize profits or sustain losses on bonds in the
Fund which were acquired from underwriting syndicates of which it was a member.
In maintaining a secondary market, the Sponsors will also realize profits or
sustain losses in the amount of any difference between the prices at which they
buy units and the prices at which they resell or redeem them.
PUBLIC DISTRIBUTION
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
CODE OF ETHICS
Merrill Lynch, as agent for the Sponsors, has adopted a code of ethics requiring
preclearance and reporting of personal securities transactions by its employees
with access to information on portfolio transactions. The goal of the code is to
prevent fraud, deception or misconduct against the Fund and to provide
reasonable standards of conduct.
YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the 'Year
2000 Problem'). We do not expect that the
25
<PAGE>
computer system changes necessary to prepare for the Year 2000 will cause any
major operational difficulties for the Fund.
TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances. You should
consult your own tax adviser about your particular circumstances.
At the date of issue of each bond, counsel for the issuer delivered an opinion
to the effect that interest on the bond is exempt from regular federal income
tax. However, interest may be subject to state and local taxes and federal
alternative minimum tax. Neither we nor our counsel have reviewed the issuance
of the bonds, related proceedings or the basis for the opinions of counsel for
the issuers. We cannot assure you that the issuer (or other users) have complied
or will comply with any requirements necessary for a bond to be tax-exempt. If
any of the bonds were determined not to be tax-exempt, you could be required to
pay income tax for current and prior years, and if the Fund were to sell the
bond, it might have to sell it at a substantial discount.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each bond in the Fund.
INCOME OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued 'market
discount'. Generally you will have market discount to the extent that your basis
in a bond when you purchase a unit is less than its stated redemption price at
maturity (or, if it is an original issue discount bond, the issue price
increased by original issue discount that has accrued on the bond before your
purchase). You should consult your tax adviser in this regard.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will be long-term if you are considered to have held
your investment on each bond for more than one year and short-term if you held
it for one year or less. If you are an individual and sell your units after
holding them for more than one year, you may be entitled to a 20% maximum
federal tax rate on any resulting gains. Consult your tax adviser in this
regard. Because the deductibility of capital losses is subject to limitations,
you may not be able to deduct all of your capital losses.
YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges and the organizational expenses you pay, adjusted to
reflect any accruals of 'original issue discount,' 'acquisition
26
<PAGE>
premium' and 'bond premium'. You should consult your tax adviser in this regard.
EXPENSES
If you are not a corporate investor, you will not be entitled to a deduction for
your share of fees and expenses of the Fund. Also, if you borrowed money in
order to purchase or carry your units, you will not be able to deduct the
interest on this borrowing for federal income tax purposes. The IRS may treat
your purchase of units as made with borrowed money even if the money is not
directly traceable to the purchase of units.
STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation. If you are a New York taxpayer, your income from the
Fund will not be tax-exempt in New York except to the extent that the income is
earned on bonds that are tax-exempt for New York purposes. Depending on where
you live, your income from the Fund may be subject to state and local taxation.
You should consult your tax adviser in this regard.
CALIFORNIA TAXES
In the opinion of O'Melveny & Myers LLP, Los Angeles, California, special
counsel on California tax matters:
Under the income tax laws of the State of California, the Trust will not be
taxed as a corporation and you will be considered to own directly your share of
each bond of the Trust. If you are a California taxpayer, your share of the
income from the bonds of the Trust will not be tax-exempt in California except
for California personal income tax purposes and only to the extent that the
income is earned on bonds that are exempt for such purposes. If you are a
California taxpayer and all or part of your share of a bond is disposed of (for
example, when a bond is sold, exchanged or redeemed at maturity or you sell or
exchange your units), you will recognize gain or loss for California tax
purposes. Depending on where you live, your income from the Trust may be subject
to state and local taxation. You should consult your tax advisor in this regard.
NORTH CAROLINA TAXES
In the opinion of Hunton & Williams, Raleigh, North Carolina, special counsel on
North Carolina tax matters:
The North Carolina Trust will not be taxed as a corporation under the current
income tax laws of North Carolina. Therefore, if you are a North Carolina
taxpayer your interest income from the North Carolina Trust will be exempt from
North Carolina income tax to the extent that income is earned on bonds or other
obligations held by the Trust that are exempt from North Carolina income tax.
However, gains on the sale of bonds or other obligations by the North Carolina
Trust or on the sale of your units will be subject to North Carolina income tax,
unless the gain from the sale of such bonds or other obligation is expressly
exempt from income tax under North Carolina law. You should consult your tax
adviser as to the consequences to you with respect to any investment you make in
the Trust.
PENNSYLVANIA TAXES
In the opinion of Drinker Biddle & Reath, Philadelphia, Pennsylvania, special
counsel on Pennsylvania tax matters:
The Pennsylvania Trust will not be taxed as a corporation under the current
income tax laws of Pennsylvania. Your income from the Trust
27
<PAGE>
may be subject to taxation depending on where you live. If you are a
Pennsylvania taxpayer your interest income from the Trust will be tax exempt to
the extent that income is earned on bonds that are tax exempt for Pennsylvania
purposes. However, gains on the sale of bonds by the Trust or on the sale of
your Units will be subject to Pennsylvania income tax. If you are a Philadelphia
resident you may be subject to the Philadelphia school district tax on any gains
realized from the sale of bonds by the Trust or the sale of Units by you to the
extent either the bonds or Units have been held for six months or less. You
should consult your tax adviser as to the consequences to you with respect to
any investment you make in the Trust.
VIRGINIA TAXES
In the opinion of Hunton & Williams, Richmond, Virginia, special counsel on
Virginia tax matters:
Under the income tax laws of the State of Virginia, the Virginia Trust will not
be taxed as a corporation. If you are a Virginia taxpayer, your income from the
Virginia Trust will not be tax-exempt in Virginia except to the extent that the
income is attributable to either (i) interest earned on bonds that are tax-
exempt for Virginia purposes or (ii) profits from the sale of certain Virginia
bonds that have been issued under Virginia legislation specifically exempting
all income from those bonds. If, at the time of your death, you either are a
Virginia resident or, in certain cases, are not a resident of the United States,
your units may be subject to Virginia estate tax. You should consult your tax
adviser in these matters.
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolios, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.
28
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (CALIFORNIA, NORTH CAROLINA,
PENNSYLVANIA AND VIRGINIA TRUSTS)
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Defined Asset Funds - Municipal Investment Trust Fund,
Multistate Series - 9H (California, North Carolina,
Pennsylvania and Virginia Trusts):
We have audited the accompanying statements of condition of
Defined Asset Funds - Municipal Investment Trust Fund,
Multistate Series - 9H (California, North Carolina,
Pennsylvania and Virginia Trusts), including the
portfolios, as of August 31, 1998 and the related
statements of operations and of changes in net assets for
the years ended August 31, 1998, 1997 and 1996. These
financial statements are the responsibility of the Trustee.
Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures
in the financial statements. Securities owned at August 31,
1998, as shown in such portfolios, were confirmed to us by
The Chase Manhattan Bank, the Trustee. An audit also includes
assessing the accounting principles used and significant
estimates made by the Trustee, as well as evaluating the
overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of Defined Asset Funds - Municipal
Investment Trust Fund, Multistate Series - 9H (California,
North Carolina, Pennsylvania and Virginia Trusts) at August
31, 1998 and the results of their operations and changes in
their net assets for the above-stated years in conformity
with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
October 14, 1998
D - 1.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (CALIFORNIA TRUST)
STATEMENT OF CONDITION
As of August 31, 1998
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 6,656,368 )(Note 1)........ $ 7,261,211
Accrued interest .............................. 65,808
Cash - income ................................. 31,555
Cash - principal .............................. 15,060
-----------
Total trust property ........................ 7,373,634
LESS LIABILITY - Accrued Sponsors' fees ......... 1,887
-----------
NET ASSETS, REPRESENTED BY:
7,332 units of fractional undivided
interest outstanding (Note 3)...............$ 7,276,271
Undistributed net investment income ........... 95,476 $ 7,371,747
----------- ===========
UNIT VALUE ($ 7,371,747 / 7,332 units ).......... $ 1,005.42
===========
</TABLE>
See Notes to Financial Statements.
D - 2.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (CALIFORNIA TRUST)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended August 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................$ 462,942 $ 505,290 $ 534,527
Trustee's fees and expenses ............ (7,781) (8,137) (8,649)
Sponsors' fees ......................... (2,937) (3,123) (3,074)
------------------------------------------------
Net investment income .................. 452,224 494,030 522,804
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 57,436 59,364 46,150
Unrealized appreciation (depreciation)
of investments ....................... (91,035) 35,059 (99,244)
------------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (33,599) 94,423 (53,094)
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..............$ 418,625 $ 588,453 $ 469,710
================================================
</TABLE>
See Notes to Financial Statements.
D - 3.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (CALIFORNIA TRUST)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended August 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income ..................$ 452,224 $ 494,030 $ 522,804
Realized gain on
securities sold or redeemed .......... 57,436 59,364 46,150
Unrealized appreciation (depreciation)
of investments ....................... (91,035) 35,059 (99,244)
------------------------------------------------
Net increase in net assets
resulting from operations ............ 418,625 588,453 469,710
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (452,631) (494,842) (522,979)
Principal .............................. (35,035) (20,367) (9,372)
------------------------------------------------
Total distributions .................... (487,666) (515,209) (532,351)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (5,932) (7,877) (3,883)
Redemption amounts - principal ......... (489,598) (657,401) (317,389)
------------------------------------------------
Total share transactions ............... (495,530) (665,278) (321,272)
------------------------------------------------
NET DECREASE IN NET ASSETS ............... (564,571) (592,034) (383,913)
NET ASSETS AT BEGINNING OF YEAR .......... 7,936,318 8,528,352 8,912,265
------------------------------------------------
NET ASSETS AT END OF YEAR ................$ 7,371,747 $ 7,936,318 $ 8,528,352
================================================
PER UNIT:
Income distributions during
year .................................$ 60.00 $ 60.14 $ 60.17
================================================
Principal distributions during
year .................................$ 4.59 $ 2.41 $ 1.07
================================================
Net asset value at end of
year .................................$ 1,005.42 $ 1,014.49 $ 1,004.99
================================================
TRUST UNITS:
Redeemed during year ................... 491 663 318
Outstanding at end of year ............. 7,332 7,823 8,486
================================================
</TABLE>
See Notes to Financial Statements.
D - 4.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (CALIFORNIA TRUST)
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
See "How to Sell Units - Trustee Redemption of Units"
in this Prospectus, Part B.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Income, Distribution
and Reinvestment - Distributions" in this Prospectus, Part B.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 7,332 units at Date of Deposit .....................$ 7,561,938
Less sales charge .......................................... 340,279
-----------
Net amount applicable to Holders ........................... 7,221,659
Redemptions of units - net cost of 2,668 units redeemed
less redemption amounts (principal)....................... (46,813)
Realized gain on securities sold or redeemed ............... 319,876
Principal distributions .................................... (823,294)
Unrealized appreciation of investments...................... 604,843
-----------
Net capital applicable to Holders ..........................$ 7,276,271
===========
</TABLE>
4. INCOME TAXES
As of August 31, 1998, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $604,843, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $6,656,368 at August 31, 1998.
D - 5.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (CALIFORNIA TRUST) (INSURED)
PORTFOLIO
As of August 31, 1998
<TABLE>
<CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 California Hlth. Fac. Fin. Auth., Ins. AAA $ 1,000,000 7.050 % 2021 08/01/01 $ 1,024,150 $ 1,095,720
Hosp. Rev. Bonds (Sharp Temecula @ 102.000
Valley), Ser. 1991 A (MBIA Ins.)
2 Benicia, CA, Unified School Dist., AAA 855,000 6.850 2016(6) 08/01/01 862,541 945,904
Genl. Oblig. Bonds, Ser. A (AMBAC Ins.) @ 102.000
3 City of Anaheim, CA, Elec. Sys. Cert. AAA 320,000 6.750 2022(6) 10/01/00 320,000 346,426
of Part. (Pub. Util. Bldg.) (AMBAC @ 102.000
Ins.)
4 Mt. Diablo, CA, Unified School Dist. AAA 1,000,000 7.050 2020(6) 08/01/00 1,022,770 1,083,400
Comm. Fac. Dist. No. 1, Spec. Tax @ 102.000
Bonds, Ser. 1990 (Contra Costa Cnty.)
(Financial Guaranty Ins.)
5 San Jose, CA, Redev. Agy. Tax AAA 895,000 6.625 2011(6) 08/01/99 888,288 938,676
Allocation Bonds, Area Redev. Proj., @ 102.000
Ser. B (MBIA Ins.)
6 County of San Mateo, CA, Certs. of AAA 155,000 6.000 2021(6) 07/01/01 141,986 164,798
Part. (Capitol Proj. Prog.), @ 100.000
Ser. 1991 (MBIA Ins.)
7 Sulphur Springs, CA, Union School AAA 130,000 7.200 2021(6) 08/01/01 134,157 142,698
Dist., Cert. of Participation (1991 @ 100.000
School Imp. Proj.) (AMBAC Ins.)
8 Tri-City, CA, Hosp. Dist. (Oceanside), AAA 810,000 6.000 2022 02/01/02 736,719 852,501
Ins. Rev. Bonds, Ser. 1991 (MBIA Ins.) @ 100.000
9 West Basin, CA, Mun. Wtr. Dist. Pub. AAA 785,000 6.850 2016(6) 08/01/00 790,903 847,619
Facs. Corp. West Basin Wtr. Reclamation @ 102.000
Prog., Ser. 1991 (AMBAC Ins.)
</TABLE>
D - 6.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (CALIFORNIA TRUST) (INSURED)
PORTFOLIO
As of August 31, 1998
<TABLE>
<CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
10 West Sacramento, CA, Redev. Agy., West AAA $ 780,000 6.250 % 2021 09/01/01 $ 734,854 $ 843,469
Sacramento Redev. Proj. Tax Allocation @ 102.000
Bonds (MBIA Ins.)
--------- --------- ---------
TOTAL $ 6,730,000 $ 6,656,368 $ 7,261,211
========= ========= =========
See Notes to portfolios on page
</TABLE>
D - 7.
<PAGE>
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (NORTH CAROLINA TRUST)
STATEMENT OF CONDITION
As of August 31, 1998
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 2,026,693 )(Note 1)......... $ 2,253,163
Accrued interest ............................... 37,106
Cash - principal ............................... 12
-----------
Total trust property ......................... 2,290,281
LESS LIABILITIES:
Income advance from Trustee.....................$ 2,485
Accrued Sponsors' fees ......................... 659 3,144
----------- -----------
NET ASSETS, REPRESENTED BY:
2,578 units of fractional undivided
interest outstanding (Note 3)................ 2,253,174
Undistributed net investment income ............ 33,963 $ 2,287,137
----------- ===========
UNIT VALUE ($ 2,287,137 / 2,578 units )........... $ 887.17
===========
</TABLE>
See Notes to Financial Statements.
D - 8.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (NORTH CAROLINA TRUST)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended August 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................$ 159,509 $ 199,610 $ 208,814
Trustee's fees and expenses ............ (4,503) (4,819) (5,100)
Sponsors' fees ......................... (1,064) (1,204) (1,203)
------------------------------------------------
Net investment income .................. 153,942 193,587 202,511
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 38,224 12,356 18,562
Unrealized appreciation (depreciation)
of investments ....................... (18,549) 13,966 (15,897)
------------------------------------------------
Net realized and unrealized
gain on investments ................. 19,675 26,322 2,665
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..............$ 173,617 $ 219,909 $ 205,176
================================================
</TABLE>
See Notes to Financial Statements.
D - 9.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (NORTH CAROLINA TRUST)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended August 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income ..................$ 153,942 $ 193,587 $ 202,511
Realized gain on
securities sold or redeemed .......... 38,224 12,356 18,562
Unrealized appreciation (depreciation)
of investments ....................... (18,549) 13,966 (15,897)
------------------------------------------------
Net increase in net assets
resulting from operations ............ 173,617 219,909 205,176
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (156,604) (193,893) (202,500)
Principal .............................. (534,673) (4,591) (3,182)
------------------------------------------------
Total distributions .................... (691,277) (198,484) (205,682)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (4,312) (1,941) (2,215)
Redemption amounts - principal ......... (335,757) (165,861) (170,779)
------------------------------------------------
Total share transactions ............... (340,069) (167,802) (172,994)
------------------------------------------------
NET DECREASE IN NET ASSETS ............... (857,729) (146,377) (173,500)
NET ASSETS AT BEGINNING OF YEAR .......... 3,144,866 3,291,243 3,464,743
------------------------------------------------
NET ASSETS AT END OF YEAR ................$ 2,287,137 $ 3,144,866 $ 3,291,243
================================================
PER UNIT:
Income distributions during
year .................................$ 55.99 $ 63.66 $ 63.77
================================================
Principal distributions during
year .................................$ 187.05 $ 1.48 $ 1.00
================================================
Net asset value at end of
year .................................$ 887.17 $ 1,068.23 $ 1,061.01
================================================
TRUST UNITS:
Redeemed during year ................... 366 158 161
Outstanding at end of year ............. 2,578 2,944 3,102
================================================
</TABLE>
See Notes to Financial Statements.
D - 10.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (NORTH CAROLINA TRUST)
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
See "How to Sell Units - Trustee Redemption of Units."
in this Prospectus, Part B.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Income,
Distributions and Reinvestment - Distributions" in this Prospectus, Part B.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 2,578 units at Date of Deposit .....................$ 2,628,684
Less sales charge .......................................... 118,278
-----------
Net amount applicable to Holders ........................... 2,510,406
Redemptions of units - net cost of 722 units redeemed
less redemption amounts (principal)....................... (10,205)
Realized gain on securities sold or redeemed ............... 73,909
Principal distributions .................................... (547,406)
Unrealized appreciation of investments...................... 226,470
-----------
Net capital applicable to Holders ..........................$ 2,253,174
===========
</TABLE>
4. INCOME TAXES
As of August 31, 1998, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $226,470, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $2,026,693 at August 31, 1998.
D - 11.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (NORTH CAROLINA TRUST)
PORTFOLIO
As of August 31, 1998
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 City of Charlotte, NC, Cert. of Part. AAA $ 135,000 6.750 % 2021(6) 12/01/01 $ 135,000 $ 149,711
Ser. 1991 (Conv. Fac. Proj.), (AMBAC @ 102.000
Ins.) (5)
2 County of Durham, NC, Cert. of Aa1(m) 455,000 6.625 2014(6) 05/01/01 453,626 495,873
Participation (1991 Jail Fac. and @ 102.000
Computer Equipment Fin. Proj.)
3 North Carolina Eastern Mun. Pwr. Agy., Aaa(m) 460,000 7.250 2023(6) 01/01/99 472,438 474,826
Pwr. Sys. Rev. Bonds, Rfdg. Ser. 1989 A @ 102.000
4 North Carolina Med. Care Comm. Hosp. AAA 455,000 6.000 2021 10/01/01 416,730 487,401
Rev. Bonds, Wayne Mem. Hosp. Proj. @ 102.000
(AMBAC Ins.) (5)
5 County of Pitt, NC, Pitt Cnty. Mem. Aaa(m) 310,000 6.900 2021(6) 12/01/01 310,000 344,887
Hosp. Rev. Bonds, Ser. 1991 @ 102.000
6 Puerto Rico Elec. Pwr. Auth., Pwr. Rev. BBB+ 300,000 5.000 2012 07/01/99 238,899 300,465
Rfdg. Bonds, Ser. N @ 100.000
--------- --------- ---------
TOTAL $ 2,115,000 $ 2,026,693 $ 2,253,163
========= ========= =========
See Notes to portfolios on page
</TABLE>
D - 12.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (PENNSYLVANIA TRUST)
STATEMENT OF CONDITION
As of August 31, 1998
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 4,390,727 )(Note 1)......... $ 4,778,149
Accrued interest ............................... 78,185
Cash - principal ............................... 7,720
-----------
Total trust property ......................... 4,864,054
LESS LIABILITIES:
Income advance from Trustee.....................$ 12,190
Accrued Sponsors' fees ......................... 1,217 13,407
----------- -----------
NET ASSETS, REPRESENTED BY:
4,486 units of fractional undivided
interest outstanding (Note 3)................ 4,785,869
Undistributed net investment income ............ 64,778 $ 4,850,647
----------- ===========
UNIT VALUE ($ 4,850,647 / 4,486 units )........... $ 1,081.29
===========
</TABLE>
See Notes to Financial Statements.
D - 13.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (PENNSYLVANIA TRUST)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended August 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................$ 307,981 $ 331,711 $ 360,812
Trustee's fees and expenses ............ (6,086) (6,249) (6,813)
Sponsors' fees ......................... (1,870) (1,968) (2,063)
------------------------------------------------
Net investment income .................. 300,025 323,494 351,936
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 11,108 49,815 42,309
Unrealized depreciation
of investments ....................... (20,748) (39,075) (9,299)
------------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (9,640) 10,740 33,010
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..............$ 290,385 $ 334,234 $ 384,946
================================================
</TABLE>
See Notes to Financial Statements.
D - 14.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (PENNSYLVANIA TRUST)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended August 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income ..................$ 300,025 $ 323,494 $ 351,936
Realized gain on
securities sold or redeemed .......... 11,108 49,815 42,309
Unrealized depreciation
of investments ....................... (20,748) (39,075) (9,299)
------------------------------------------------
Net increase in net assets
resulting from operations ............ 290,385 334,234 384,946
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (300,430) (324,310) (352,124)
Principal .............................. (13,401) (21,153) (21,625)
------------------------------------------------
Total distributions .................... (313,831) (345,463) (373,749)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (2,033) (5,974) (5,188)
Redemption amounts - principal ......... (179,399) (498,631) (407,225)
------------------------------------------------
Total share transactions ............... (181,432) (504,605) (412,413)
------------------------------------------------
NET DECREASE IN NET ASSETS ............... (204,878) (515,834) (401,216)
NET ASSETS AT BEGINNING OF YEAR .......... 5,055,525 5,571,359 5,972,575
------------------------------------------------
NET ASSETS AT END OF YEAR ................$ 4,850,647 $ 5,055,525 $ 5,571,359
================================================
PER UNIT:
Income distributions during
year .................................$ 65.63 $ 65.86 $ 65.96
================================================
Principal distributions during
year .................................$ 2.88 $ 4.24 $ 3.97
================================================
Net asset value at end of
year .................................$ 1,081.29 $ 1,086.51 $ 1,088.58
================================================
TRUST UNITS:
Redeemed during year ................... 167 465 375
Outstanding at end of year ............. 4,486 4,653 5,118
================================================
</TABLE>
See Notes to Financial Statements.
D - 15.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (PENNSYLVANIA TRUST)
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
See "How to Sell Units - Trustee Redemption of Units."
in this Prospectus, Part B.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Income, Distributions
and Reinvestment - Distributions" in this Prospectus, Part B.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 4,486 units at Date of Deposit .....................$ 4,652,851
Less sales charge .......................................... 209,361
-----------
Net amount applicable to Holders ........................... 4,443,490
Redemptions of units - net cost of 1,764 units redeemed
less redemption amounts (principal)....................... (153,000)
Realized gain on securities sold or redeemed ............... 185,592
Principal distributions .................................... (77,635)
Unrealized appreciation of investments...................... 387,422
-----------
Net capital applicable to Holders ..........................$ 4,785,869
===========
</TABLE>
4. INCOME TAXES
As of August 31, 1998, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $387,422, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $4,390,727 at August 31, 1998.
D - 16.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (PENNSYLVANIA TRUST) (INSURED)
PORTFOLIO
As of August 31, 1998
<TABLE><CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Pennsylvania Higher Educl. Fac. Auth. AAA $ 810,000 6.900 % 2021(6) 07/01/01 $ 813,127 $ 892,045
Univ. Rev. Bonds, Ser. 1991 (Hahnemannn @ 102.000
Univ. Proj.) (MBIA Ins.)
2 Dauphin Cnty., PA, Gen. Auth. Rev. AAA 950,000 7.125 2011(6) 06/01/01 971,556 1,032,318
Bonds, Ser. of 1991 (Harrisburg @ 100.000
International Airport Project) (MBIA
Ins.)
3 Erie Cnty., Prision Auth. (Commonwealth AAA 40,000 6.625 2014(6) 11/01/01 39,185 43,376
of Pennsylvania) Commenwealth Lease Rev. @ 100.000
Bonds, Ser. of 1991 (MBIA Ins.)
4 Health Care Fac. Auth. of Sayre, PA, AAA 805,000 6.000 2021 03/01/01 728,171 837,498
Ser. 1991 A Rev. Bonds, Guthrie @ 100.000
Healthcare Sys. (AMBAC Ins.)
5 Scranton-Lackawanna Hlth. and Welfare AAA 900,000 6.900 2023(6) 01/01/00 903,159 954,702
Auth., PA, Hosp. Fac. Rev. Bonds (Mercy @ 102.000
Hlth. Sys.), Ser. 1989 B (MBIA Ins.)
6 Redevelopment Auth. of the Cnty. of AAA 820,000 7.125 2013 06/01/01 839,475 901,196
Schuylkill, PA, Commonwealth Lease Rev. @ 102.000
Bonds, Ser. A of 1991 (Financial
Guaranty Ins.)
7 City of Philadelphia, PA, Gas Works AAA 95,000 7.000 2020 None 96,054 117,014
Rev. Bonds, Twelfth Ser. B (MBIA Ins.)
--------- --------- ---------
TOTAL $ 4,420,000 $ 4,390,727 $ 4,778,149
========= ========= =========
See Notes to portfolios on page
</TABLE>
D - 17.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (VIRGINIA TRUST)
STATEMENT OF CONDITION
As of August 31, 1998
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 2,396,221 )(Note 1)......... $ 2,606,667
Accrued interest ............................... 59,551
Cash - principal ............................... 7,767
-----------
Total trust property ......................... 2,673,985
LESS LIABILITIES:
Income advance from Trustee.....................$ 23,719
Accrued Sponsors' fees ......................... 684 24,403
----------- -----------
NET ASSETS, REPRESENTED BY:
2,455 units of fractional undivided
interest outstanding (Note 3)................ 2,614,424
Undistributed net investment income ............ 35,158 $ 2,649,582
----------- ===========
UNIT VALUE ($ 2,649,582 / 2,455 units )........... $ 1,079.26
===========
</TABLE>
See Notes to Financial Statements.
D - 18.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (VIRGINIA TRUST)
STATEMENTS OF OPERATIONS
<TABLE><CAPTION>
Years Ended August 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................$ 170,737 $ 181,572 $ 189,922
Trustee's fees and expenses ............ (4,452) (4,455) (4,767)
Sponsors' fees ......................... (1,031) (1,057) (1,054)
------------------------------------------------
Net investment income .................. 165,254 176,060 184,101
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 17,734 8,419 13,578
Unrealized appreciation (depreciation)
of investments ....................... (15,293) 11,790 (33,019)
------------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... 2,441 20,209 (19,441)
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..............$ 167,695 $ 196,269 $ 164,660
================================================
</TABLE>
See Notes to Financial Statements.
D - 19.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (VIRGINIA TRUST)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE><CAPTION>
Years Ended August 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income ..................$ 165,254 $ 176,060 $ 184,101
Realized gain on
securities sold or redeemed .......... 17,734 8,419 13,578
Unrealized appreciation (depreciation)
of investments ....................... (15,293) 11,790 (33,019)
------------------------------------------------
Net increase in net assets
resulting from operations ............ 167,695 196,269 164,660
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (165,542) (175,992) (184,217)
Principal .............................. (6,584) (3,776) (7,114)
------------------------------------------------
Total distributions .................... (172,126) (179,768) (191,331)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (2,509) (1,381) (1,585)
Redemption amounts - principal ......... (205,596) (94,218) (130,796)
------------------------------------------------
Total share transactions ............... (208,105) (95,599) (132,381)
------------------------------------------------
NET DECREASE IN NET ASSETS ............... (212,536) (78,098) (159,052)
NET ASSETS AT BEGINNING OF YEAR .......... 2,862,118 2,941,216 3,100,268
------------------------------------------------
NET ASSETS AT END OF YEAR ................$ 2,649,582 $ 2,862,118 $ 2,941,216
================================================
PER UNIT:
Income distributions during
year .................................$ 65.34 $ 65.67 $ 65.67
================================================
Principal distributions during
year .................................$ 2.57 $ 1.40 $ 2.53
================================================
Net asset value at end of
year .................................$ 1,079.26 $ 1,080.86 $ 1,074.61
================================================
TRUST UNITS:
Redeemed during year ................... 193 89 122
Outstanding at end of year ............. 2,455 2,648 2,737
================================================
</TABLE>
See Notes to Financial Statements.
D - 20.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (VIRGINIA TRUST)
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
See "How to Sell Units - Trustee Redemption of Units."
in this Prospectus, Part B.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Income, Redemptions
and Reinvestment - Distributions" in this Prospectus, Part B.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 2,455 units at Date of Deposit .....................$ 2,538,837
Less sales charge .......................................... 114,256
-----------
Net amount applicable to Holders ........................... 2,424,581
Redemptions of units - net cost of 1,045 units redeemed
less redemption amounts (principal)....................... (84,353)
Realized gain on securities sold or redeemed ............... 109,718
Principal distributions .................................... (45,968)
Unrealized appreciation of investments...................... 210,446
-----------
Net capital applicable to Holders ..........................$ 2,614,424
===========
</TABLE>
4. INCOME TAXES
As of August 31, 1998, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $210,446, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $2,396,221 at August 31, 1998.
D - 21.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (VIRGINIA TRUST)
PORTFOLIO
As of August 31, 1998
<TABLE><CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Virginia St. Hsg. Dev. Auth. AA+ $ 500,000 7.100 % 2013 05/01/01 $ 501,250 $ 529,090
Multi-family Hsg. Bonds, 1991 Ser. F @ 102.000
2 Arlington Cnty., VA, Indl. Dev. Auth., Aaa(m) 295,000 7.125 2021(6) 09/01/01 299,139 327,878
Hosp. Rev. Bonds (The Arlington Hosp.), @ 102.000
Ser. 1991 A
3 Augusta Cnty., VA Ind. Dev. Auth., A(m) 300,000 7.000 2021(6) 09/01/01 301,194 331,884
Hosp. Rev. Bonds (Augusta Hosp. Corp. @ 102.000
Proj.), Ser. 1991
4 Fairfax Cnty. VA, Wtr. Auth., Wtr. AAA 330,000 7.250 2027(6) 01/01/00 343,306 351,635
Rev. Bonds, Ser. 1989 @ 102.000
5 Harrisonburg, VA, Redev. & Hsg. Auth., A+(f) 445,000 6.500 2014(6) 09/01/01 422,172 478,371
Pub. Fac. Lease Rev. Bonds (Cnty. of @ 100.000
Rockingham and City of Harrisonburg
Proj.), Ser. 1991
6 City of Norfolk, VA, Indl. Dev. Auth. AAA 450,000 6.500 2021 06/01/01 441,239 483,633
Hosp. Rev. Bonds (Children's Hosp. of @ 102.000
The King's Daughters Obligated Grp.),
Ser. 1991 (AMBAC Ins.) (5)
7 Prince William Cnty., VA, Service AAA 45,000 6.500 2021(6) 07/01/01 44,123 49,091
Auth., Wtr. & Swr. Sys. Rev. Bonds, @ 102.000
Ser. 1991 (Financial Guaranty Ins.) (5)
8 Puerto Rico Elec. Pwr. Auth., Pwr. Rev. BBB+ 55,000 5.000 2012 07/01/99 43,798 55,085
Bonds, Ser. O @ 100.000
--------- --------- ---------
TOTAL $ 2,420,000 $ 2,396,221 $ 2,606,667
========= ========= =========
See Notes to portfolios on page
</TABLE>
D - 22.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 9H (CALIFORNIA, NORTH CAROLINA,
PENNSYLVANIA AND VIRGINIA TRUSTS)
NOTES TO PORTFOLIOS
As of August 31, 1998
<TABLE><CAPTION>
<S> <C>
(1) The rating of the bonds are by Standard & Poor's Rating Group, or by
Moody's Investors Service, Inc. if followed by "(m)", or by Fitch Investors
Service, Inc. if followed by "(f)"; "NR" indicates that this bond is not
currently rated by any of the above-mentioned rating services. These
ratings have been furnished by the Evaluator but not confirmed with the
rating agencies. See "Description of Ratings" in Part B of this Prospectus.
(2) See Notes to Financial Statements.
(3) Optional redemption provisions, which may be exercised in whole or in part,
are initially at prices of par plus a premium, then subsequently at prices
declining to par. Certain securities may provide for redemption at par
prior or in addition to any optional or mandatory redemption dates or
maturity, for example, through the operation of a maintenance and
replacement fund, if proceeds are not able to be used as contemplated, the
project is condemned or sold or the project is destroyed and insurance
proceeds are used to redeem the securities. Many of the securities are also
subject to mandatory sinking fund redemption commencing on dates which may
be prior to the date on which securities may be optionally redeemed.
Sinking fund redemptions are at par and redeem only part of the issue. Some
of the securities have mandatory sinking funds which contain optional
provisions permitting the issuer to increase the principal amount of
securities called on a mandatory redemption date. The sinking fund
redemptions with optional provisions may, and optional refunding
redemptions generally will, occur at times when the redeemed securities
have an offering side evaluation which represents a premium over par. To
the extent that the securities were acquired at a price higher than the
redemption price, this will represent a loss of capital when compared with
the Public Offering Price of the Units when acquired. Distributions will
generally be reduced by the amount of the income which would otherwise have
been paid with respect to redeemed securities and there will be distributed
to Holders any principal amount and premium received on such redemption
after satisfying any redemption requests for Units received by the Fund.
The estimated current return may be affected by redemptions. The tax effect
on Holders of redemptions and related distributions is described under
"Taxes" in this Prospectus, Part B.
(4) All Securities are insured, either on an individual basis or by portfolio
insurance, by a municipal bond insurance company which has been assigned
"AAA" claims paying ability by Standard & Poor's. Accordingly, Standard &
Poor's has assigned a "AAA" rating to the securities. Securities covered
by portfolio insurance are rated "AAA" only as long as they remain in this
Trust. See "Risk Factors - Bonds Backed by Letters of Credit or Insurance"
in this Prospectus, Part B.
(5) Insured by the indicated municipal bond insurance company. See "Risk
Factors - Bonds Backed by Letters of Credit or Insurance" in this
Prospectus, Part B.
(6) Bonds with an aggregate face amount of $ 4,140,000 of the California Trust,
$ 1,360,000 of the North California Trust, $ 2,700,000 of the Pennsylvania
Trust and $ 1,415,000 of the Virgina Trust have been pre-refunded and are
expected to be called for redemption on the optional redemption provision
dates shown.
</TABLE>
D - 23.
<PAGE>
Defined
Asset FundsSM
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most MULTISTATE SERIES--9H
recent free Information (A Unit Investment Trust)
Supplement that gives more ---------------------------------------
details about the Fund, This Prospectus does not contain
by calling: complete information about the
The Chase Manhattan Bank investment company filed with the
1-800-323-1508 Securities and Exchange Commission in
Washington, D.C. under the:
o Securities Act of 1933 (file no.
33-42074) and
o Investment Company Act of 1940 (file
no. 811-1777).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
Units of any future series may not be
sold nor may offers to buy be accepted
until that series has become effective
with the Securities and Exchange
Commission. No units can be sold in any
State where a sale would be illegal.
14004--11/98
<PAGE>
DEFINED ASSET FUNDS--
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES
CONTENTS OF REGISTRATION STATEMENT
This Post-Effective Amendment to the Registration Statement on Form S-6
comprises the following papers and documents:
The facing sheet of Form S-6.
The cross-reference sheet (incorporated by reference to the Cross-Reference
Sheet to the Registration Statement of Defined Asset Funds Municipal Insured
Series, 1933 Act File No. 33-54565).
The Prospectus.
The Signatures.
The following exhibits:
1.1.1--Form of Standard Terms and Conditions of Trust Effective as of
October 21, 1993 (incorporated by reference to Exhibit 1.1.1 to the
Registration Statement of Municipal Investment Trust Fund,
Multistate Series--48, 1933 Act File No. 33-50247).
4.1 --Consent of the Evaluator.
5.1 --Consent of independent accountants.
9.1 --Information Supplement (incorporated by reference to Post-Effective
Amendment No. 4 to Exhibit 9.1 to the Registration Statement of
Municipal Investment Trust Fund, Insured Series--207, 1933 Act File
No. 33-54037).
R-1
<PAGE>
DEFINED ASSET FUNDS--
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--9H
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES--9H,
CERTIFIES THAT IT MEETS ALL OF THE REQUIREMENTS FOR EFFECTIVENESS OF THIS
REGISTRATION STATEMENT PURSUANT TO RULE 485(B) UNDER THE SECURITIES ACT OF 1933
AND HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 11TH DAY OF
NOVEMBER, 1998.
SIGNATURES APPEAR ON PAGES R-3, R-4, R-5, R-6 AND R-7.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Salomon Smith Barney
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
A majority of the members of the Board of Directors of Prudential
Securities Incorporated has signed this Registration Statement or Amendment to
the Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.
A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, File
Fenner & Smith Incorporated: Numbers: 33-43466 and 33-51607
HERBERT M. ALLISON, JR.
JOHN L. STEFFENS
By ERNEST V. FABIO
(As authorized signatory for Merrill Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
<PAGE>
SALOMON SMITH BARNEY INC.
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Salomon Smith Barney Inc.: have been filed
under the 1933 Act
File Numbers:
33-49753,
33-55073,
333-41765,
333-10441,
333-63417 and
333-63033
MICHAEL A. CARPENTER
DERYCK C. MAUGHAN
By GINA LEMON
(As authorized signatory for
Salomon Smith Barney Inc. and
Attorney-in-fact for the persons listed above)
R-4
<PAGE>
PRUDENTIAL SECURITIES INCORPORATED
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Prudential Securities have been filed
Incorporated: under Form SE and
the following 1933
Act File Numbers:
33-41631 and
333-15919
ROBERT C. GOLDEN
ALAN D. HOGAN
A. LAURENCE NORTON, JR.
LELAND B. PATON
VINCENT T. PICA II
MARTIN PFINSGRAFF
HARDWICK SIMMONS
LEE B. SPENCER, JR.
BRIAN M. STORMS
By RICHARD R. HOFFMANN
(As authorized signatory for Prudential Securities
Incorporated and Attorney-in-fact for the persons
listed above)
R-5
<PAGE>
PAINEWEBBER INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
the Board of Directors of PaineWebber under
Incorporated: the following 1933 Act File
Number: 33-55073
MARGO N. ALEXANDER
TERRY L. ATKINSON
BRIAN M. BAREFOOT
STEVEN P. BAUM
MICHAEL CULP
REGINA A. DOLAN
JOSEPH J. GRANO, JR.
EDWARD M. KERSCHNER
JAMES P. MacGILVRAY
DONALD B. MARRON
ROBERT H. SILVER
MARK B. SUTTON
By
ROBERT E. HOLLEY
(As authorized signatory for
PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-6
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following 1933
the Board of Directors of Dean Witter Act File Numbers: 33-17085 and
Reynolds Inc.: 333-13039
RICHARD M. DeMARTINI
ROBERT J. DWYER
CHRISTINE A. EDWARDS
CHARLES A. FIUMEFREDDO
JAMES F. HIGGINS
MITCHELL M. MERIN
STEPHEN R. MILLER
RICHARD F. POWERS III
PHILIP J. PURCELL
THOMAS C. SCHNEIDER
WILLIAM B. SMITH
By
MICHAEL D. BROWNE
(As authorized signatory for
Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)
R-7
<PAGE>
EXHIBIT 4.1
STANDARD & POOR'S
A DIVISION OF THE McGRAW-HILL COMPANIES
J. J. KENNY
65 BROADWAY
NEW YORK, N.Y. 10006-2551
TELEPHONE (212) 770-4422
FAX 212/797-8681
NOVEMBER 16, 1998
Frank A. Ciccotto, Jr.
Vice President
Tax-Exempt Evaluations
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Defined Asset Funds
P.O. Box 9051
Princeton, New Jersey 08543-9051
The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004
RE: DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 9H
Gentlemen:
We have examined the post-effective Amendment to the Registration Statement
File No. 33-42074 for the above-captioned trust. We hereby acknowledge that
Kenny S&P Evaluation Services, a division of J. J. Kenny Co., Inc. is currently
acting as the evaluator for the trust. We hereby consent to the use in the
Amendment of the reference to Kenny S&P Evaluation Services, a division of J. J.
Kenny Co., Inc. as evaluator.
In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registration Statement for the respective
bonds comprising the trust portfolio are the ratings currently indicated in our
KENNYBASE database.
You are hereby authorized to file copies of this letter with the Securities
and Exchange Commission.
Sincerely,
FRANK A. CICCOTTO
Vice President
<PAGE>
Exhibit 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee of
Defined Asset Funds--Municipal Investment Trust Fund--Multistate Series--9H
(California, North Carolina, Pennsylvania and Virginia Trusts):
We consent to the use in this Post-Effective Amendment No. 7 to Registration
Statement No. 33-42074 of our opinion dated October 14, 1998 appearing in the
Prospectus, which is part of such Registration Statement, and to the reference
to us under the heading 'Miscellaneous--Auditors' in such Prospectus.
DELOITTE & TOUCHE LLP
New York, N.Y.
NOVEMBER 16, 1998
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>1
<NAME>CALIFORNIA TRUST
<MULTIPLIER> 1
<S>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 6,656,368
<INVESTMENTS-AT-VALUE> 7,261,211
<RECEIVABLES> 65,808
<ASSETS-OTHER> 46,615
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,373,634
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (1,887)
<TOTAL-LIABILITIES> (1,887)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,671,428
<SHARES-COMMON-STOCK> 7,332
<SHARES-COMMON-PRIOR> 7,823
<ACCUMULATED-NII-CURRENT> 95,476
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 604,843
<NET-ASSETS> 7,371,747
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 462,942
<OTHER-INCOME> 0
<EXPENSES-NET> (10,718)
<NET-INVESTMENT-INCOME> 452,224
<REALIZED-GAINS-CURRENT> 57,436
<APPREC-INCREASE-CURRENT> (91,035)
<NET-CHANGE-FROM-OPS> 418,625
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (452,631)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (35,035)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 491
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (564,571)
<ACCUMULATED-NII-PRIOR> 101,815
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>2
<NAME>NORTH CAROLINA TRUST
<MULTIPLIER> 1
<S>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 2,026,693
<INVESTMENTS-AT-VALUE> 2,253,163
<RECEIVABLES> 37,106
<ASSETS-OTHER> 12
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,290,281
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (3,144)
<TOTAL-LIABILITIES> (3,144)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,026,704
<SHARES-COMMON-STOCK> 2,578
<SHARES-COMMON-PRIOR> 2,944
<ACCUMULATED-NII-CURRENT> 33,963
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 226,470
<NET-ASSETS> 2,287,137
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 159,509
<OTHER-INCOME> 0
<EXPENSES-NET> (5,567)
<NET-INVESTMENT-INCOME> 153,942
<REALIZED-GAINS-CURRENT> 38,224
<APPREC-INCREASE-CURRENT> (18,549)
<NET-CHANGE-FROM-OPS> 173,617
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (156,604)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (534,673)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 366
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (857,729)
<ACCUMULATED-NII-PRIOR> 40,937
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>3
<NAME>PENNSYLVANIA TRUST
<MULTIPLIER> 1
<S>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 4,390,727
<INVESTMENTS-AT-VALUE> 4,778,149
<RECEIVABLES> 78,185
<ASSETS-OTHER> 7,720
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,864,054
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (13,407)
<TOTAL-LIABILITIES> (13,407)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,398,447
<SHARES-COMMON-STOCK> 4,486
<SHARES-COMMON-PRIOR> 4,653
<ACCUMULATED-NII-CURRENT> 64,778
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 387,422
<NET-ASSETS> 4,850,647
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 307,981
<OTHER-INCOME> 0
<EXPENSES-NET> (7,956)
<NET-INVESTMENT-INCOME> 300,025
<REALIZED-GAINS-CURRENT> 11,108
<APPREC-INCREASE-CURRENT> (20,748)
<NET-CHANGE-FROM-OPS> 290,385
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (300,430)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (13,401)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 167
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (204,878)
<ACCUMULATED-NII-PRIOR> 67,218
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>4
<NAME>VIRGINIA TRUST
<MULTIPLIER> 1
<S>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 2,396,221
<INVESTMENTS-AT-VALUE> 2,606,667
<RECEIVABLES> 59,551
<ASSETS-OTHER> 7,767
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,673,985
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (24,403)
<TOTAL-LIABILITIES> (24,403)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,403,978
<SHARES-COMMON-STOCK> 2,455
<SHARES-COMMON-PRIOR> 2,648
<ACCUMULATED-NII-CURRENT> 35,158
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 210,446
<NET-ASSETS> 2,649,582
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 170,737
<OTHER-INCOME> 0
<EXPENSES-NET> (5,483)
<NET-INVESTMENT-INCOME> 165,254
<REALIZED-GAINS-CURRENT> 17,734
<APPREC-INCREASE-CURRENT> (15,293)
<NET-CHANGE-FROM-OPS> 167,695
<EQUALIZATION> 0
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<DISTRIBUTIONS-OTHER> (6,584)
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<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (212,536)
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<OVERDIST-NET-GAINS-PRIOR> 0
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
