INSURED MUNICIPAL SEC TR NY NAV INS SER 5 & NJ NAV INS SER 2, 485BPOS, 2000-10-27

INSURED MUNICIPAL SEC TR NY NAV INS SER 5 & NJ NAV INS SER 2
485BPOS, 2000-10-27

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As filed with the Securities and Exchange Commission on October 27, 2000
Registration No. 33-37297*

================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------

POST-EFFECTIVE AMENDMENT
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:

INSURED MUNICIPAL SECURITIES TRUST,
NEW JERSEY NAVIGATOR INSURED SERIES 2 AND SERIES 27
& NEW JERSEY NAVIGATOR INSURED SERIES 6

B. Name of depositor:ING FUNDS DISTRIBUTOR, INC.

C. Complete address of depositor's principal executive office:

ING Funds Distributor, Inc.
1475 Dunwoody Drive
West Chester, Pennsylvania 19380

D. Name and complete address of agent for service:

PETER J. DeMARCO Copy of comments to:
Senior Vice President MICHAEL R. ROSELLA, ESQ.
ING Funds Distributor, Inc. Paul, Hastings, Janofsky & Walker LLP
1475 Dunwoody Drive 399 Park Avenue
West Chester, Pennsylvania 19380 New York, NY 10022
(212) 318-6000

It is proposed that this filing become effective (check appropriate box)

|_| immediately upon filing pursuant to paragraph (b) of Rule 485.
|X| on October 28, 2000 pursuant to paragraph (b) of Rule 485.
|_| 60 days after filing pursuant to paragraph (a) of Rule 485.
|_| on ( date ) pursuant to paragraph (a) of Rule 485.

================================================================================

* The Prospectus included in this Registration Statement constitutes a
combined Prospectus as permitted by the provisions of Rule 429 of the
General Rules and Regulations under the Securities Act of 1933 (the
"Act"). Said Prospectus covers units of undivided interest in Insured
Municipal Securities Trust, New Jersey Navigator Insured Series 2 and
Series 27 & New Jersey Navigator Insured Series 6, covered by
prospectuses heretofore filed as part of separate registration
statements on Form S-6 (Registration Nos. 33-37297 and 33-41923,
respectively) under the Act. This filing constitutes Post-Effective
Amendment No. 10 for New Jersey Navigator Insured Series 2 and
Post-Effective Amendment No. 9 for Series 27 & New Jersey Navigator
Insured Series 6.

Each of the Registrants filed a Rule 24f-2 Notice for its fiscal year
ended June 30, 2000 on or about September 28, 2000.

NY/306536.1

<PAGE>

Prospectus Part A Dated October 28, 2000

INSURED MUNICIPAL SECURITIES TRUST
NEW JERSEY NAVIGATOR INSURED

SERIES 2

The Trust is a unit investment trust designated Series 2 ("New
Jersey Navigator Trust") with an underlying portfolio of long-term insured
tax-exempt bonds and was formed to preserve capital and to provide interest
income (including, where applicable, earned original issue discount) which, in
the opinions of bond counsel to the respective issuers, is, with certain
exceptions, currently exempt from regular federal income tax under existing law
and from New Jersey gross income tax. There can be no assurance that the Trust's
investment objectives will be achieved. Although the Supreme Court has
determined that Congress has the authority to subject the interest on bonds such
as the Bonds in the Trust to regular federal income taxation, existing law
excludes such interest from regular federal income tax. Such interest income
may, however, be a specific preference item for purposes of the federal
individual and/or corporate alternative minimum tax. (See "Description of
Portfolio" in this Part A for a list of those Bonds which pay interest income
subject to the federal individual alternative minimum tax.) In addition, capital
gains are subject to tax. (See "Tax Status" and "The Trust--Portfolio" in Part B
of this Prospectus.) The Sponsor is ING Funds Distributor, Inc. (successor to
Reich & Tang Distributors, Inc.). The value of the Units of the Trust will
fluctuate with the value of the underlying bonds. Minimum purchase: 1 Unit.

This Prospectus consists of two parts. Part A contains the Summary
of Essential Information as of June 30, 2000 (the "Evaluation Date"), a summary
of certain specific information regarding the Trust and audited financial
statements of the Trust, including the related portfolio, as of the Evaluation
Date. Part B of this Prospectus contains a general summary of the Trust. Part A
of this Prospectus may not be distributed unless accompanied by Part B.
Investors should retain both parts of this Prospectus for future reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THE TRUST. The Trust seeks to achieve its investment objectives
through investment in a fixed, diversified portfolio of long-term insured bonds
(the "Bonds") issued by or on behalf of states, municipalities and public
authorities which, because of irrevocable insurance, were rated "AAA" by
Standard & Poor's Corporation. All of the Bonds in the Trust were rated "AAA" by
Standard & Poor's Corporation at the time originally deposited in the Trust (see
"Portfolio"). This rating results from insurance relating only to the Bonds in
the Trust and not to Units of the Trust. The insurance does not remove market
risk, as it does not guarantee the market value of the Units. For a discussion
of the significance of such ratings, see "Description of Bond

NY/300340.1

<PAGE>

Ratings" in Part B of this Prospectus. Some of the aggregate principal amount of
the Bonds in the Trust may be "Zero Coupon Bonds," which are original issue
discount bonds that provide for payment at maturity at par value, but do not
provide for the payment of current interest (for the amount of Zero Coupon Bonds
in the Trust, and the cost of such Bonds to the Trust, see "Description of
Portfolio" in this Part A). The payment of interest and preservation of capital
are, of course, dependent upon the continuing ability of the issuers of the
Bonds or the insurer thereof to meet their obligations.

Investment in the Trust should be made with an understanding of the
risks which an investment in long-term fixed rate debt obligations may entail,
including the risk that the value of the underlying portfolio will decline with
increases in interest rates, and that the value of Zero Coupon Bonds is subject
to greater fluctuation than coupon bonds in response to such changes in interest
rates. A Trust designated as a long-term trust must have a dollar-weighted
average portfolio maturity of more than ten years. (See "Portfolio" in Part B of
this Prospectus.)

Each Unit in the Trust represents a 1/4568th undivided interest in
the principal and net income of the Trust. The principal amount of Bonds
deposited in the Trust per Unit is reflected in the Summary of Essential
Information. (See "Organization" in Part B of this Prospectus.) The Units being
offered hereby are issued and outstanding Units which have been purchased by the
Sponsor in the secondary market.

INSURANCE. Each of the Bonds in the New Jersey Navigator Trust is
insured by a municipal bond guaranty insurance policy obtained by the Sponsor
(the "Navigator Sponsor-Insured Bonds") from MBIA Insurance Corporation ("MBIA
Corp.") covering regularly scheduled payments of principal thereof and interest
thereon when such amounts become due for payment but shall not have been paid.
For discussion of the effect of an occurrence of non-payment of principal or
interest on any Bonds in the New Jersey Navigator Trust see "Portfolio
Supervision" in Part B of this Prospectus. The premiums for the Navigator
Sponsor-Insured Bonds are obligations of the Sponsor. Additionally, some of the
Bonds in the New Jersey Navigator Trust may be Pre-Insured Bonds (as described
below). The premium for the Pre-Insured Bonds is an obligation of the issuers,
underwriters or prior owners of those Bonds. The insurance policy or policies
relating to the Navigator Sponsor-Insured Bonds provides that, to the extent
that Bonds are both Pre-Insured Bonds and Navigator Sponsor-Insured Bonds,
coverage is effective after a claim has been made upon the insurer of the
Pre-Insured Bonds.

Some of the Bonds in the New Jersey Navigator Trust may additionally
be insured by a municipal bond guaranty insurance policy obtained by issuers,
underwriters or prior owners of the Bonds ("Pre-Insured Bonds") and issued by
one of the insurance companies described under "Insurance on the Bonds" in Part
B of this Prospectus (the "Insurance Companies"). Such insurance covers the
scheduled payment of principal thereof and interest thereon when such amounts
shall become due for payment but shall not have been paid by the issuer or any
other insurer thereof.

A-2
NY/300340.1

<PAGE>

B of this Prospectus. No representation is made herein as to any Bond insurer's
ability to meet its obligations under a policy of insurance relating to any of
the Pre-Insured Bonds. In addition, investors should be aware that subsequent to
the Date of Deposit the rating of the claims-paying ability of the insurer of an
underlying Pre-Insured Bond may be downgraded.

All of the Bonds in the New Jersey Navigator Trust are covered by
insurance obtained by the Sponsor from MBIA Corp. and 100% of the Bonds in the
New Jersey Navigator Trust are Pre-Insured Bonds. The approximate percentage of
the aggregate principal amount of the Trust that is insured by each Insurance
Company with respect to Pre-Insured Bonds is as follows: AMBAC Indemnity Corp.
("AMBAC"), 32.5%; Bond Investors Guaranty ("BIG"), 28.0%; Financial Guaranty
Insurance Company ("Financial Guaranty"), 11.3%; and MBIA Corp., 28.2%.

PUBLIC OFFERING PRICE. The secondary market Public Offering Price of
each Unit is equal to the aggregate offering price of the Bonds in such Trust
divided by the number of Units outstanding, plus a sales charge of 5.2% of the
Public Offering Price, or 5.485% of the net amount invested in Bonds per Unit.
The sales charge for secondary market purchases is based upon the number of
years remaining to maturity of each bond in the Trust's portfolio. (See "Public
Offering" in Part B of this Prospectus.) In addition, accrued interest to the
expected date of settlement is added to the Public Offering Price. If Units had
been purchased on the Evaluation Date, the Public Offering Price per Unit would
have been $417.44 plus accrued interest of $6.29 under the monthly distribution
plan, $8.22 under the semi-annual distribution plan and $20.17 under the annual
distribution plan, for a total of $423.73, $425.66 and $437.61, respectively.
The Public Offering Price per Unit can vary on a daily basis in accordance with
fluctuations in the aggregate bid price of the Bonds. (See "Public
Offering--Offering Price" in Part B of this Prospectus.)

ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. Units of
each Trust are offered to investors on a "dollar price" basis (using the
computation method described under "Public Offering--Offering Price" in Part B)
as distinguished from a "yield price" basis often used in offerings of tax
exempt bonds (involving the lesser of the yield as computed to maturity of bonds
or to an earlier redemption date). Since they are offered on a dollar price
basis, the rate of return on an investment in Units of each Trust is measured in
terms of "Estimated Current Return" and "Estimated Long Term Return".

Estimated Long Term Return is calculated by: (1) computing the yield
to maturity or to an earlier call date (whichever results in a lower yield) for
each Bond in the Trust's portfolio in accordance with accepted bond practices,
which practices take into account not only the interest payable on the Bond but
also the amortization of premiums or accretion of discounts, if any; (2)
calculating the average of the yields for the Bonds in the Trust's portfolio by
weighing each Bond's yield by the market value of the Bond and by the amount of
time remaining to the date to which the Bond is priced (thus creating an average
yield for the portfolio of the Trust); and (3) reducing the average yield for
the portfolio of the Trust in order to reflect estimated fees and expenses of
the Trust and the maximum sales charge paid by investors. The resulting
Estimated Long Term Return represents a measure of the return to investors
earned over the estimated life of the Trust. (For the Estimated Long Term Return
to Certificateholders under the monthly, semi-annual and annual distribution
plans, see "Summary of Essential Information".)

A-3
NY/300340.1

<PAGE>

Estimated Current Return is a measure of the Trust's cash flow.
Estimated Current Return is computed by dividing the Estimated Net Annual
Interest Income per Unit by the Public Offering Price per Unit. In contrast to
the Estimated Long Term Return, the Estimated Current Return does not take into
account the amortization of premium or accretion of discount, if any, on the
Bonds in the portfolio of the Trust. Moreover, because interest rates on Bonds
purchased at a premium are generally higher than current interest rates on newly
issued bonds of a similar type with comparable rating, the Estimated Current
Return per Unit may be affected adversely if such Bonds are redeemed prior to
their maturity.

The Estimated Net Annual Interest Income per Unit of the Trust will
vary with changes in the fees and expenses of the Trustee and the Evaluator
applicable to the Trust and with the redemption, maturity, sale or other
disposition of the Bonds in the Trust. The Public Offering Price will vary with
changes in the bid prices of the Bonds. Therefore, there is no assurance that
the present Estimated Current Return or Estimated Long Term Return will be
realized in the future. (For the Estimated Current Return to Certificateholders
under the monthly, semi-annual and annual distribution plans, see "Summary of
Essential Information". See "Estimated Long Term Return and Estimated Current
Return" in Part B of this Prospectus.)

A schedule of cash flow projections is available from the Sponsor
upon request.

DISTRIBUTIONS. Distributions of interest income, less expenses, will
be made by the Trust either monthly, semi-annually or annually depending upon
the plan chosen by the Certificateholder. Certificateholders purchasing Units in
the secondary market will initially receive distributions in accordance with the
elections of the prior owner. The first interest distributions will be made on
the First Payment Date to all Certificateholders of record on the First Record
Date and thereafter distributions will be made in accordance with the
distribution plan chosen by the Certificateholder. Distributions of principal,
if any, will be made semi-annually on June 15 and December 15 of each year. (See
"Rights of Certificateholders--Interest and Principal Distributions" in Part B
of this Prospectus. For estimated monthly, semi-annual and annual interest
distributions, the amount of the first interest distributions and the specific
dates representing the First Payment Date and the First Record Date see "Summary
of Essential Information.")

MARKET FOR UNITS. The Sponsor, although not obligated to do so,
intends to maintain a secondary market for the Units of each Trust after the
initial public offering has been completed. The secondary market repurchase
price will be based on the aggregate bid price of the Bonds in the Trust
portfolio; and the reoffer price will be based on the aggregate bid price of the
Bonds plus a sales charge of 5.2% of the Public Offering Price (5.485% of the
net amount invested), plus net accrued interest. If a market is not maintained a
Certificateholder will be able to redeem his or her Units with the Trustee at a
price based on the aggregate bid price of the Bonds. (See "Sponsor Repurchase"
in Part B of this Prospectus.)

A-4
NY/300340.1

<PAGE>

INSURED MUNICIPAL SECURITIES TRUST
NEW JERSEY NAVIGATOR INSURED
SERIES 2

SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 30, 2000

<S> <C> <C>
Date of Deposit*: Weighted Average Life to
October 25, 1990 Maturity: 14.9 Years.
Principal Amount of Bonds ... $1,770,000 Minimum Value of Trust: Trust
Number of Units ............. 4,568 may be terminated if value
Fractional Undivided Inter- of Trust is less than
est in Trust per Unit ..... 1/4568 $2,400,000 in principal
Principal Amount of amount of Bonds.
Bonds per Unit ............ $387.48 Mandatory Termination Date:
Secondary Market Public The earlier of December 31,
Offering Price** 2039 or the disposition of
Aggregate Bid Price the last Bond in the Trust.
of Bonds in Trust ....... $1,807,931+++ Trustee***: The Chase
Divided by 4,568 Units .... $395.78 Manhattan Bank.
Plus Sales Charge of Trustee's Annual Fee: Monthly
5.2% of Public plan $.98 per $1,000;
Offering Price........... $21.66 semi-annual plan $.52 per
Public Offering Price $1,000; and annual plan is
per Unit .............. . $417.44+ $.34 per $1,000.
Redemption and Sponsor's Evaluator: Kenny S&P
Repurchase Price Evaluation Services.
per Unit ................ . $395.78+ Evaluator's Fee for Each
+++ Evaluation: Minimum of $8
++++ plus $.25 per each issue of
Excess of Secondary Market Bonds in excess of 50 issues
Public Offering Price (treating separate
over Redemption and maturities as separate
Sponsor's Repurchase issues).
Price per Unit .......... . $21.66++++ Sponsor: ING Funds
Difference between Public Distributor, Inc.
Offering Price per Unit Sponsor's Annual Fee: Maximum
and Principal Amount per of $.25 per $1,000 principal
Unit Premium/(Discount) . . $29.96 amount of Bonds (see "Trust
Evaluation Time: 4:00 p.m. Expenses and Charges" in
New York Time. Part B of this Prospectus).
Minimum Principal Distri-
bution: $1.00 per Unit.

</TABLE>

PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED
------------------------------------------------------------------

Monthly Semi-Annual Annual
Option Option Option
------ ------ ------

<S> <C> <C> <C>
Gross annual interest income# ............ $24.43 $24.43 $24.43
Less estimated annual fees and
expenses ............................... 1.23 1.04 .90
Estimated net annual interest ______ ______ ______
income (cash)# ......................... $23.20 $23.39 $23.53
Estimated interest distribution# ......... 1.93 11.69 23.53
Estimated daily interest accrual# ........ .0644 .0649 .0653
Estimated current return#++ .............. 5.56% 5.60% 5.64%
Estimated long term return++ ............. 4.73% 4.78% 4.81%
Record dates ............................. 1st of Dec. 1 and Dec. 1
each month June 1
Interest distribution dates .............. 15th of Dec. 15 and Dec. 15
each month June 15

</TABLE>

A-5
NY/300340.1

<PAGE>

Footnotes to Summary of Essential Information
---------------------------------------------

* The Date of Deposit is the date on which the Trust Agreement was signed
and the deposit of the Bonds with the Trustee made.

** Certain amounts distributable as of June 30, 2000 may be reported in the
Summary of Essential Information as if they had been distributed as of
year-end.

*** The Trustee maintains its principal executive office at 270 Park Avenue,
New York, New York 10017 and its unit investment trust office at 4 New
York Plaza, New York, New York 10004 (tel. no.: 1-800-882-9898). For
information regarding redemption by the Trustee, see "Trustee Redemption"
in Part B of this Prospectus.

+ Plus accrued interest to the expected date of settlement (approximately
three business days after purchase) of $6.29 monthly, $8.22 semi-annually
and $20.17 annually.

++ The estimated current return and estimated long term return are increased
for transactions entitled to a discount (see "Employee Discounts" in Part
B of this Prospectus), and are higher under the semi-annual and annual
options due to lower Trustee's fees and expenses.

+++ Based solely upon the bid side evaluation of the underlying Bonds
(including, where applicable, undistributed cash from the principal
account). Upon tender for redemption, the price to be paid will be
calculated as described under "Trustee Redemption" in Part B of this
Prospectus.

++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price and
Redemption Price" in Part B of this Prospectus.

# Does not include income accrual from original issue discount bonds, if
any.

FINANCIAL AND STATISTICAL INFORMATION

Selected data for each Unit outstanding for the periods listed below:

Distribu-
Distributions of Interest tions of
During the Period (per Unit) Principal
--------------------------- During
Net Asset* Semi- the
Units Out- Value Monthly Annual Annual Period
Period Ended standing Per Unit Option Option Option (Per Unit)
------------ -------- -------- ------- ------ ------ ----------

<S> <C> <C> <C> <C> <C> <C>
June 30, 1998 5,262 $801.16 $48.90 $49.37 $49.85 $ 2.15
June 30, 1999 4,858 506.39 37.82 38.24 48.64 273.50
June 30, 2000 4,568 403.72 26.50 26.81 29.53 91.46

</TABLE>

----------
* Net Asset Value per Unit is calculated by dividing net assets as disclosed
in the "Statement of Net Assets" by the number of Units outstanding as of
the date of the Statement of Net Assets. See Note 5 of Notes to Financial
Statements for a description of the components of Net Assets.

A-6
NY/300340.1

<PAGE>

INFORMATION REGARDING THE TRUST
AS OF JUNE 30, 2000

DESCRIPTION OF PORTFOLIO*

The portfolio of the Trust consists of 4 issues representing
obligations of 4 issuers located in the state of New Jersey. The Sponsor has not
participated as a sole underwriter or manager, co-manager or members of
underwriting syndicates from which any of the initial aggregate principal amount
of the Bonds were acquired. None of the Bonds are obligations of state and local
housing authorities; approximately 28.2% are hospital revenue bonds; none were
issued in connection with the financing of nuclear generating facilities; and
none are "mortgage subsidy" bonds. Two of the Bonds in the Trust are subject to
redemption prior to their stated maturity dates pursuant to sinking fund or call
provisions. The Bonds may also be subject to other calls, which may be permitted
or required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess or unanticipated
revenues). None of the Bonds are general obligation bonds. Four issues
representing $1,770,000 of the principal amount of the Bonds are payable from
the income of a specific project or authority and are not supported by the
issuer's power to levy taxes. The portfolio is divided for purpose of issue as
follows: Convention Center 1, Hospital 1, Lease Rental 1 and Sewer 1. For an
explanation of the significance of these factors see "The Trust--Portfolio" in
Part B of this Prospectus.

As of June 30, 2000, $700,000 (approximately 39.5% of the aggregate
principal amount of the Bonds) were original issue discount bonds. Of these
original issue discount bonds, $200,000 (approximately 11.3% of the aggregate
principal amount of the Bonds) were Zero Coupon Bonds. Zero Coupon Bonds do not
provide for the payment of any current interest and provide for payment at
maturity at par value unless sooner sold or redeemed. The market value of Zero
Coupon Bonds is subject to greater fluctuations than coupon bonds in response to
changes in interest rates. None of the aggregate principal amount of the Bonds
in the Trust were purchased at a "market" discount from par value at maturity,
$1,070,000 (approximately 60.5% of the aggregate principal amount of the Bonds)
were purchased at a premium and none were purchased at par. For an explanation
of the significance of these factors see "Discount and Zero Coupon Bonds" in
Part B of this Prospectus.

None of the Bonds in the Trust are subject to the federal individual
alternative minimum tax under the Tax Reform Act of 1986. See "Tax Status" in
Part B of this Prospectus.

----------

* Changes in the Trust Portfolio: From July 1, 2000 to September 15, 2000,
$75,000 of the principal amount of the Bond in portfolio no. 3 was sold
and is no longer contained in the Trust. 210 Units were redeemed from the
Trust.

A-7
NY/300340.1

<PAGE>

Report of Independent Auditors

The Sponsor, Trustee and Certificateholders of
Insured Municipal Securities Trust, New Jersey Navigator Insured Series 2

We have audited the accompanying statement of net assets of Insured Municipal
Securities Trust, New Jersey Navigator Insured Series 2, including the
portfolio, as of June 30, 2000 and the related statements of operations, and
changes in net assets and financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility of the
Trustee. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit. The statement of
operations and statement of changes in net assets for each of the two years in
the period ended June 30, 1999 and financial highlights for each of the four
years in the period ended June 30, 1999 were audited by other auditors whose
report thereon dated September 15, 1999, expressed an unqualified opinion on
those financial statements and financial highlights.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of the securities
owned by correspondence with 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 audit provides a reasonable basis for our opinion.

In our opinion, the 2000 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Insured Municipal Securities Trust, New Jersey Navigator Insured Series 2 at
June 30, 2000, the results of its operations, changes in its net assets and
financial highlights for the year then ended, in conformity with accounting
principles generally accepted in the United States.

/s/ Ernst & Young
New York, New York
October 16, 2000

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 2

Portfolio

June 30, 2000
<TABLE>
<CAPTION>

Aggregate Coupon
Portfolio Principal Ratings Rate/Date(s) of
No. Amount Name of Issuer and Title of Bonds (1) Maturity (2)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 $ 500,000 N.J. Hlth. Care Facs. Finc. Auth. Rev. Bonds AAA 6.500%
Bayshore Cmmnty. Hosp. Issue Series 1989A 7/01/2015
(MBIA Corp.)

2 495,000 Atlantic Cnty. N.J. Imprvmt. Auth. Pub. Facs. AAA 7.400
Lease Rental Rev. Rfndg. Bonds (Atlantic 3/01/2012
Cnty. Prjts.) Series 1986A (MBIA Corp.)

3 575,000 Atlantic Cnty. N.J. Imprvmt. Auth. Convntn. AAA 7.400
Cntr. Rev. Bonds Series 1985 (MBIA Corp.) 7/01/2016

4 200,000 Camden Cnty. N.J. Muni. Utils. Auth. Cnty. AAA 0.000
Agreement Swr. Rev. Cap. Apprec. Bonds 9/01/2019
Series 1990A (MBIA Corp.)

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

$1,770,000 Total Investment (Cost(3) $1,588,526)
==============
</TABLE>

Portfolio

June 30, 2000 (continued)
<TABLE>
<CAPTION>

Redemption
Aggregate Feature (2)(4)
Portfolio Principal S.F.-Sinking Fund Market
No. Amount Name of Issuer and Title of Bonds Ref.-Refunding Value (3)
----------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C>
1 $ 500,000 N.J. Hlth. Care Facs. Finc. Auth. Rev. Bonds 7/01/10 @ 100 S.F. $ 508,150
Bayshore Cmmnty. Hosp. Issue Series 1989A None
(MBIA Corp.)

2 495,000 Atlantic Cnty. N.J. Imprvmt. Auth. Pub. Facs. No Sinking Fund 570,601
Lease Rental Rev. Rfndg. Bonds (Atlantic None
Cnty. Prjts.) Series 1986A (MBIA Corp.)

3 575,000 Atlantic Cnty. N.J. Imprvmt. Auth. Convntn. 7/01/11 @ 100 S.F. 679,374
Cntr. Rev. Bonds Series 1985 (MBIA Corp.) None

4 200,000 Camden Cnty. N.J. Muni. Utils. Auth. Cnty. No Sinking Fund 65,730
Agreement Swr. Rev. Cap. Apprec. Bonds None
Series 1990A (MBIA Corp.)

-------------- ----------------
$ 1,823,855
$1,770,000 Total Investment (Cost(3) $1,588,526) ================
==============
</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 2

Footnotes to Portfolio

1 All ratings are by Kenny S&P Evaluation Services, a business unit of J.J.
Kenny Company, Inc., a subsidiary of The McGraw-Hill Companies, Inc. A brief
description of the ratings symbols and their meaning is set forth under
"Description of Bond Ratings" in Part B of the Prospectus.

2. See "The Trust--Portfolio" in Part B of the Prospectus for an explanation of
redemption features. See "Tax Status" in Part B of the Prospectus for a
statement of the Federal tax consequences to a Certificateholder upon the
sale, redemption or maturity of a bond.

3. At June 30, 2000, the net unrealized appreciation of all the bonds was
comprised of the following:

Gross unrealized appreciation $ 235,329
Gross unrealized depreciation -
----------------------
Net unrealized appreciation $ 235,329
======================

4. The Bonds may also be subject to other calls, which may be permitted or
required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess of
unanticipated revenues).

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 2
Statement of Net Assets

June 30, 2000
<TABLE>
<CAPTION>

<S> <C>
Investments in securities, at market value (cost $1,588,526) $ 1,823,855

Other assets
Accrued interest 49,438
------------------------
Total other assets 49,438
------------------------

Liabilities
Redemption payable 16,070
Advance from Trustee 13,045
------------------------
Total liabilities 29,115
------------------------

Excess of other assets over total liabilities 20,323
------------------------

Net assets (4,568 units of fractional undivided
interest outstanding, $403.72 per unit) $ 1,844,178
========================
</TABLE>

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 2

Statement of Operations

Year ended June 30,
2000 1999 1998
-------------------------------------------------------------------

Investment income
<S> <C> <C> <C>
Interest $ 129,199 $ 198,492 $ 269,663

Expenses
Trustee's fees 4,795 5,982 6,860
Evaluator's fee 2,200 2,250 2,369
Sponsor's advisory fee 625 976 1,015
-------------------------------------------------------------------
Total expenses 7,620 9,208 10,244
-------------------------------------------------------------------

Net investment income 121,579 189,284 259,419
-------------------------------------------------------------------

Realized and unrealized gain (loss)
Realized gain on investments 75,067 12,180 153
Unrealized appreciation (depreciation)
on investments (125,410) (110,258) 4,346
-------------------------------------------------------------------
Net gain (loss) on investments (50,343) (98,078) 4,499
-------------------------------------------------------------------
Net increase in net assets resulting from operations $ 71,236 $ 91,206 $ 263,918
===================================================================
</TABLE>

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 2

Statement of Changes in Net Assets
<TABLE>
<CAPTION>

Year ended June 30,
2000 1999 1998
-------------------------------------------------------------

Operations
<S> <C> <C> <C>
Net investment income $ 121,579 $ 189,284 $ 259,419
Realized gain on investments 75,067 12,180 153
Unrealized appreciation (depreciation)
on investments (125,410) (110,258) 4,346
-------------------------------------------------------------
Net increase in net assets resulting from operations 71,236 91,206 263,918
-------------------------------------------------------------

Distributions to Certificateholders
Investment income 124,919 194,398 258,061
Principal 428,216 1,434,035 11,313

Redemptions
Interest 2,510 6,182 672
Principal 131,476 212,237 19,784
-------------------------------------------------------------
Total distributions and redemptions 687,121 1,846,852 289,830
-------------------------------------------------------------

Total (decrease) (615,885) (1,755,646) (25,912)

Net assets
Beginning of year 2,460,063 4,215,709 4,241,621
-------------------------------------------------------------
End of year (including undistributed net investment income of
$61,941, $67,791 and $79,087, respectively) $ 1,844,178 $ 2,460,063 $ 4,215,709
=============================================================
</TABLE>

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 2
<TABLE>
<CAPTION>
Financial Highlights

Selected data for a unit of the Trust outstanding:*

Year ended June 30
2000 1999 1998 1997 1996
-------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year** $ 506.39 $ 801.16 $ 802.27 $ 872.96 $ 893.15
-------------------------------------------------------------------------------------------

Interest income 27.41 39.23 51.12 53.96 57.53
Expenses (1.62) (1.82) (1.94) (1.81) (1.69)
-------------------------------------------------------------------------------------------
Net investment income 25.79 37.41 49.18 52.15 55.84
-------------------------------------------------------------------------------------------
Net gain or loss on investments (1) (10.56) (9.13) .90 9.59 (16.70)
-------------------------------------------------------------------------------------------
Total from investment operations 15.23 28.28 50.08 61.74 39.14
-------------------------------------------------------------------------------------------

Less distributions
to Certificateholders
Income 26.51 38.42 48.92 52.27 58.24
Principal 90.86 283.41 2.14 79.38 -
for Redemptions
Interest .53 1.22 .13 .78 1.09
-------------------------------------------------------------------------------------------
Total distributions 117.90 323.05 51.19 132.43 59.33
-------------------------------------------------------------------------------------------
Net asset value, end of year** 403.72 $ 506.39 $ 801.16 $ 802.27 $ 872.96
===========================================================================================
</TABLE>

(1) Net gain or loss on investments is a result of changes in outstanding units
since July 1, 1999, 1998, 1997, 1996 and 1995, respectively, and the dates
of net gain and loss on investments.

* Unless otherwise stated, based upon average units outstanding during the
year of 4,713 ([4,858 + 4,568]/2) for 2000, 5,060 ([5,262 + 4,858]/2) for
1999, 5,275 ([5,287 + 5,262]/2) for 1998, 5,358 ([5,429 + 5,287]/2) for 1997
and of 5,549 ([5,668 + 5,429]/2) for 1996.

** Based upon actual units outstanding.

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 2

Notes to Financial Statements

June 30, 2000

1. Organization

Insured Municipal Securities Trust, New Jersey Navigator Insured Series 2 (the
"Trust") was organized on October 25, 1990 by Bear, Stearns & Co. Inc. and
Gruntal & Co., LLC under the laws of the State of New York by a Trust Indenture
and Agreement, and is registered under the Investment Company Act of 1940. The
Trust was formed to preserve capital and to provide interest income.

On September 28, 1995, Reich & Tang Distributors, Inc. ("Reich & Tang") had
become the successor sponsor to certain of the unit investment trusts previously
sponsored by Bear, Stearns & Co. Inc. As successor sponsor, Reich & Tang had
assumed all of the obligations and rights of Bear, Stearns & Co. Inc., the
previous sponsor.

Effective February 9, 2000, Gruntal & Co., LLC resigned as a co-sponsor of
certain unit investment trusts previously co-sponsored with Reich & Tang. ING
Funds Distributor, Inc. ("ING") has become the successor sponsor to certain unit
investment trusts previously sponsored by Reich & Tang. As successor sponsor,
ING has assumed all of the obligations and rights of Reich & Tang, the previous
sponsor.

2. Summary of Significant Accounting Policies

The following is a summary of significant accounting policies consistently
followed by the Trust in preparation of its financial statements. The policies
are in conformity with generally accepted accounting principles ("GAAP"). The
preparation of financial statements in accordance with GAAP requires management
to make estimates and assumptions that affect the reported amounts and
disclosures in the financial statements. Actual amounts could differ from those
estimates.

Interest Income

Interest income is recorded on the accrual basis. The discount on the
zero-coupon bonds is accreted by the interest method over the respective lives
of the bonds. The accretion of such discount is included in interest income;
however, it is not distributed until realized in cash upon maturity or sale of
the respective bonds.

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 2

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Security Valuation

Investments are carried at market value which is determined by Kenny S&P
Evaluation Services, a business unit of J.J. Kenny Company, Inc., a subsidiary
of the McGraw-Hill Companies, Inc. The market value of the portfolio is based
upon the bid prices for the bonds at the end of the year, which approximates the
fair value of the security at that date, except that the market value on the
date of deposit represents the cost to the Trust based on the offering prices
for investments at that date. The difference between cost (including accumulated
accretion of original issue discount on zero-coupon bonds) and market value is
reflected as unrealized appreciation (depreciation) of investments. Securities
transactions are recorded on the trade date. Realized gains (losses) from
securities transactions are determined on the basis of average cost of the
securities sold or redeemed.

3. Income Taxes

No provision for federal income taxes has been made in the accompanying
financial statements because the Trust intends to continue to qualify for the
tax treatment applicable to Grantor Trusts under the Internal Revenue Code.
Under existing law, if the Trust so qualifies, it will not be subject to federal
income tax on net income and capital gains that are distributed to unitholders.

4. Trust Administration

The Chase Manhattan Bank (the "Trustee") has custody of assets and
responsibility for the accounting records and financial statements of the Trust
and is responsible for establishing and maintaining a system of internal control
related thereto. The Trustee is also responsible for all estimates of expenses
and accruals reflected in the Trust's financial statements.

The Trust Indenture and Agreement provides for interest distributions as often
as monthly (depending upon the distribution plan elected by the
Certificateholders).

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 2

Notes to Financial Statements (continued)

4. Trust Administration (continued)

The Trust Indenture and Agreement further requires that principal received from
the disposition of bonds, other than those bonds sold in connection with the
redemption of units, be distributed to Certificateholders.

The Trust Indenture and Agreement also requires the Trust to redeem units
tendered. For the years ended June 30, 2000, 1999 and 1998, 290, 404 and 25
units were redeemed, respectively.

The Trust pays an annual fee for trustee services rendered by the Trustee that
ranges from $.34 to $.98 per $1,000 of outstanding investment principal. In
addition, a minimum fee of $8.00 is paid to a service bureau for each portfolio
valuation. A maximum fee of $.25 per $1,000 of outstanding investment principal
is paid to the Sponsor. For the years ended June 30, 2000, 1999 and 1998, the
"Trustee's Fees" are comprised of Trustee fees of $1,827, $2,673 and $3,508 and
other expenses of $2,968, $3,309 and $3,352, respectively. The other expenses
include professional, printing and miscellaneous fees.

5. Net Assets

At June 30, 2000, the net assets of the Trust represented the interest of
Certificateholders as follows:
<TABLE>

<S> <C>
Original cost to Certificateholders $ 6,055,356
Less initial gross underwriting commission 296,715
-----------------------
5,758,641

Accumulated cost of securities sold, matured or called (4,195,809)
Net unrealized appreciation 235,329
Undistributed net investment income 61,941
Distributions in excess of proceeds from investments (15,924)
-----------------------
Total $ 1,844,178
=======================
</TABLE>

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 2

Notes to Financial Statements (continued)

5. Net Assets (continued)

The original cost to Certificateholders, less the initial gross underwriting
commission, represents the aggregate initial public offering price net of the
applicable sales charge on 6,000 units of fractional undivided interest of the
Trust as of the date of deposit.

Undistributed net investment income includes accumulated accretion of original
issue discount of $25,694.

6. Concentration of Credit Risk

Since the Trust invests a portion of its assets in municipal bonds, it may be
affected by economic and political developments in the municipalities. Certain
debt obligations held by the Trust may be entitled to the benefit of insurance,
standby letters of credit or other guarantees of banks or other financial
institutions.

<PAGE>

Prospectus Part A Dated October 28, 2000

INSURED MUNICIPAL SECURITIES TRUST

SERIES 27

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

The Trust is a unit investment trust designated Series 27
("Insured Municipal Trust") with an underlying portfolio of long-term insured
tax-exempt bonds issued by or on behalf of states, municipalities and public
authorities and was formed to preserve capital and to provide interest income
(including, where applicable, earned original issue discount) which, in the
opinions of bond counsel to the respective issuers, is, with certain exceptions,
currently exempt from regular federal income tax under existing law but may be
subject to state and local taxes. There can be no assurance that the Trust's
investment objectives will be achieved. Although the Supreme Court has
determined that Congress has the authority to subject interest on bonds such as
the Bonds in the Trust to regular federal income taxation, existing law excludes
such interest from regular federal income tax. Such interest income may,
however, be subject to the federal corporate alternative minimum tax and to
state and local taxes. In addition, capital gains are subject to tax. (See "Tax
Status" and "The Trust--Portfolio" in Part B of this Prospectus.) The Sponsor is
ING Funds Distributor, Inc. (successor to Reich & Tang Distributors, Inc.). The
value of the Units of the Trust will fluctuate with the value of the underlying
bonds. Minimum purchase: 1 Unit.

This Prospectus consists of two parts. Part A contains the
Summary of Essential Information as of June 30, 2000 (the "Evaluation Date"), a
summary of certain specific information regarding the Trust and audited
financial statements of the Trust, including the related portfolio, as of the
Evaluation Date. Part B of this Prospectus contains a general summary of the
Trust. Part A of this Prospectus may not be distributed unless accompanied by
Part B. Investors should retain both parts of this Prospectus for future
reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

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

THE TRUST. The Trust seeks to achieve its investment
objectives through investment in a fixed, diversified portfolio of long-term
insured bonds (the "Bonds") issued by or on behalf of states, municipalities and
public authorities which, because of irrevocable insurance, were rated "AAA" by
Standard & Poor's Corporation at the time originally deposited in the Trust. The
"AAA" rating results from insurance relating only to the Bonds in the Trust and
not to Units of the Trust. The insurance does not remove market risk, as it does
not guarantee the market value of the Units. For a discussion of the
significance of such ratings, see "Description of Bond Ratings" in Part B of
this Prospectus, and for a list of ratings on the Evaluation Date see the
"Portfolio."

Some of the Bonds may be "Zero Coupon Bonds", which are
original issue discount bonds that provide for payment at maturity at par value,
but do not provide for the payment of any current interest. Some of the Bonds in
the Trust have been issued with optional refunding or refinancing provisions
("Refunded Bonds") whereby the issuer of the Bond has the right to call such
Bond prior to its stated maturity date (and other than pursuant to sinking fund
provisions) and to issue new bonds ("Refunding Bonds") in order to finance the
redemption. Issuers typically utilize refunding calls in order to take advantage
of lower interest rates in the marketplace. Some of these Refunded Bonds may be
called for redemption pursuant to pre-refunding provisions ("Pre-Refunded
Bonds") whereby the proceeds from the issue of the Refunding Bonds are typically
invested in government securities in escrow for the benefit of the holders of
the Pre-Refunded Bonds until the refunding call

NY/300341.1

<PAGE>

date. Usually, Pre-Refunded Bonds will bear a triple-A rating because of this
escrow. The issuers of Pre-Refunded Bonds must call such Bonds on their
refunding call date. Therefore, as of such date, the Trust will receive the call
price for such bonds but will cease receiving interest income with respect to
them. For a list of those Bonds which are Pre-Refunded Bonds, if any, as of the
Evaluation Date, see "Notes to Financial Statements" in this Part A. Some of the
Bonds in the portfolio may have been purchased at an aggregate premium over par.
The payment of interest and preservation of capital are, of course, dependent
upon the continuing ability of issuers of the Bonds or the insurers thereof to
meet their obligations.

Investment in the Trust should be made with an understanding
of the risks which an investment in long-term fixed rate debt obligations may
entail, including the risk that the value of the underlying portfolio will
decline with increases in interest rates, and that the value of Zero Coupon
Bonds is subject to greater fluctuation than coupon bonds in response to changes
in interest rates. A Trust designated as a long-term trust must have a
dollar-weighted average portfolio maturity of more than ten years.

Each Unit in the Trust represents a 1/2617th undivided
interest in the principal and net income of the Trust. The principal amount of
Bonds deposited in the Trust per Unit is reflected in the Summary of Essential
Information. (See "Organization" in Part B of this Prospectus.) The Units being
offered hereby are issued and outstanding Units which have been purchased by the
Sponsor in the secondary market.

INSURANCE. Each of the Bonds in the Trust is insured by a
municipal bond guaranty insurance policy obtained by either the Sponsor
("Sponsor-Insured Bonds") or the issuers of the Bonds ("Pre-Insured Bonds") and
issued by one of the insurance companies (the "Insurance Companies"), described
under "Insurance on the Bonds" in Part B of this Prospectus, covering scheduled
payment of principal thereof and interest thereon when such amounts shall become
due for payment but shall not have been paid by the issuer or any other insurer
thereof. None of the insurance will cover accelerated payments of principal or
penalty interest or premiums unrelated to taxability of interest on the Bonds
(although the insurance, including insurance obtained by MBIA Corp., does
guarantee payment of principal and interest in such amounts and at such times as
such amounts would have been due absent such acceleration). The insurance
relates only to the prompt payment of principal of and interest on the
securities in the portfolio, and does not remove market risks or guarantee the
market value of the Units in the Trust. The terms of the insurance are more
fully described under "Insurance on the Bonds" in Part B of this Prospectus. For
a discussion of the effect of an occurrence of nonpayment of principal or
interest on any Bonds in the Trust, see "Portfolio Supervision" in Part B of
this Prospectus. No representation is made herein as to any Bond insurer's
ability to meet its obligations under a policy of insurance relating to any of
the Bonds. In addition, investors should be aware that, subsequent to the Date
of Deposit, the rating of the claims paying ability of the insurer of an
underlying Bond may be downgraded, which may result in a downgrading of the
rating of the Units in the Trust. The approximate percentage of the aggregate
principal amount of the portfolio that is insured by each insurance company is
as follows: AMBAC Indemnity Corp. ("AMBAC"), 2.2%; Capital Guaranty Insurance
Company ("Capital Guaranty"), 22.5%; Financial Guaranty Insurance Company
("Financial Guaranty"), 9.4%; and MBIA Corp., 65.9%.

PUBLIC OFFERING PRICE. The secondary market Public Offering
Price of each Unit is equal to the aggregate bid price of the Bonds in the Trust
divided by the number of Units outstanding, plus a sales charge of 4.0% of the
Public Offering Price, or 4.166% of the net amount invested in Bonds per Unit.
The sales charge for secondary market purchases is based upon the number of
years remaining to maturity of each bond in the Trust's portfolio. (See "Public
Offering" in Part B of this Prospectus.) In addition, accrued interest to the
expected date of settlement is added to the Public Offering Price. If Units had
been purchased on the Evaluation Date, the Public Offering Price per Unit would
have been $906.71 plus accrued interest of $10.12 under the monthly distribution
plan, $14.80 under the semi-annual

A-2
NY/300341.1

<PAGE>

distribution plan and $44.36 under the annual distribution plan, for a total of
$916.83, $921.51 and $951.07, respectively. The Public Offering Price per Unit
can vary on a daily basis in accordance with fluctuations in the aggregate bid
price of the Bonds. (See "Public Offering--Offering Price" in Part B of this
Prospectus.)

ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. Units
of each Trust are offered to investors on a "dollar price" basis (using the
computation method described under "Public Offering--Offering Price" in Part B)
as distinguished from a "yield price" basis often used in offerings of tax
exempt bonds (involving the lesser of the yield as computed to maturity of bonds
or to an earlier redemption date). Since they are offered on a dollar price
basis, the rate of return on an investment in Units of each Trust is measured in
terms of "Estimated Current Return" and "Estimated Long Term Return".

Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted bond
practices, which practices take into account not only the interest payable on
the Bond but also the amortization of premiums or accretion of discounts, if
any; (2) calculating the average of the yields for the Bonds in the Trust's
portfolio by weighing each Bond's yield by the market value of the Bond and by
the amount of time remaining to the date to which the Bond is priced (thus
creating an average yield for the portfolio of the Trust); and (3) reducing the
average yield for the portfolio of the Trust in order to reflect estimated fees
and expenses of the Trust and the maximum sales charge paid by investors. The
resulting Estimated Long Term Return represents a measure of the return to
investors earned over the estimated life of the Trust. (For the Estimated Long
Term Return to Certificateholders under the monthly, semi-annual and annual
distribution plans, see "Summary of Essential Information".)

Estimated Current Return is a measure of the Trust's cash
flow. Estimated Current Return is computed by dividing the Estimated Net Annual
Interest Income per Unit by the Public Offering Price per Unit. In contrast to
the Estimated Long Term Return, the Estimated Current Return does not take into
account the amortization of premium or accretion of discount, if any, on the
Bonds in the portfolio of the Trust. Moreover, because interest rates on Bonds
purchased at a premium are generally higher than current interest rates on newly
issued bonds of a similar type with comparable rating, the Estimated Current
Return per Unit may be affected adversely if such Bonds are redeemed prior to
their maturity.

The Estimated Net Annual Interest Income per Unit of the Trust
will vary with changes in the fees and expenses of the Trustee and the Evaluator
applicable to the Trust and with the redemption, maturity, sale or other
disposition of the Bonds in the Trust. The Public Offering Price will vary with
the changes in the bid prices of the Bonds. Therefore, there is no assurance
that the present Estimated Current Return or Estimated Long Term Return will be
realized in the future. (For the Estimated Current Return to Certificateholders
under the monthly, semi-annual and annual distribution plans, see "Summary of
Essential Information". See "Estimated Long Term Return and Estimated Current
Return" in Part B of this Prospectus.)

A schedule of cash flow projections is available from the
Sponsor upon request.

DISTRIBUTIONS. Distributions of interest income, less
expenses, will be made by the Trust either monthly, semi-annually or annually
depending upon the plan of distribution applicable to the Unit purchased. A
purchaser of a Unit in the secondary market will initially receive distributions
in accordance with the distribution plan chosen by the prior owner of such Unit
and may thereafter change the plan as provided under "Interest and Principal
Distributions" in Part B of the Prospectus. Distributions of principal, if any,
will be made semi-annually on June 15 and December 15 of each year. (See "Rights
of Certificateholders--Interest and Principal Distributions" in Part B of this
Prospectus. For estimated monthly, semi-annual and annual interest
distributions, see "Summary of Essential Information.")

A-3
NY/300341.1

<PAGE>

MARKET FOR UNITS. The Sponsor, although not obligated to do
so, intends to maintain a secondary market for the Units at prices based on the
aggregate bid price of the Bonds in the Trust portfolio. The reoffer price will
be based on the aggregate bid price of the Bonds plus a sales charge of 4.0% of
the Public Offering Price (4.166% of the net amount invested), plus net accrued
interest. If a market is not maintained a Certificateholder will be able to
redeem his or her Units with the Trustee at a price also based on the aggregate
bid price of the Bonds. (See "Liquidity--Sponsor Repurchase" and "Public
Offering--Offering Price" in Part B of this Prospectus.)

A-4
NY/300341.1

<PAGE>

INSURED MUNICIPAL SECURITIES TRUST
SERIES 27

SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 30, 2000
----------------------------------------------------

<S> <C> <C>
Date of Deposit*: Minimum Principal Distribution:
November 14, 1991 $1.00 per Unit.
Principal Amount of Bonds .. $2,225,000 Weighted Average Life to Maturity:
Number of Units ............ 2,617 15.7 Years.
Fractional Undivided Inter- Minimum Value of Trust: Trust may
est in Trust per Unit .... 1/2617 be terminated if value of Trust
Principal Amount of is less than $1,200,000 in
Bonds per Unit ........... $850.21 principal amount of Bonds.
Secondary Market Public Mandatory Termination Date: The
Offering Price** earlier of December 31, 2040 or
Aggregate Bid Price the disposition of the last
of Bonds in Trust ...... $2,276,975+++ Bond in the Trust.
Divided by 2,617 Units ... $870.07 Trustee***: The Chase Manhattan
Plus Sales Charge of 4.0% Bank.
of Public Offering Trustee's Annual Fee: Monthly plan
Price .................. $36.64 $1.05 per $1,000; semi-annual
Public Offering Price plan $.60 per $1,000; and
per Unit ............... $906.71+ annual plan is $.35 per $1,000.
Redemption and Sponsor's Evaluator: Kenny S&P Evaluation
Repurchase Price Services.
per Unit ................. $870.07+ Evaluator's Fee for Each
++ Evaluation: Minimum of $8 plus
++++ $.25 per each issue of Bonds in
Excess of Secondary Market excess of 50 issues (treating
Public Offering Price separate maturities as separate
over Redemption and issues).
Sponsor's Repurchase Sponsor: ING Funds Distributor,
Price per Unit ........... $36.64++++ Inc.
Difference between Public Sponsor's Annual Fee: Maximum of
Offering Price per Unit $.25 per $1,000 principal
and Principal Amount per amount of Bonds (see "Trust
Unit Premium/(Discount) .. $56.50 Expenses and Charges" in Part B
Evaluation Time: 4:00 p.m. of this Prospectus).
New York Time.

</TABLE>

PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED
------------------------------------------------------------------

Monthly Semi-Annual Annual
Option Option Option
------ ------ ------

<S> <C> <C> <C>
Gross annual interest income# ...... $58.45 $58.45 $58.45
Less estimated annual fees and
expenses ......................... 2.40 2.01 -0-
Estimated net annual interest ______ ______ ______
income (cash)# ................... $56.05 $56.44 $58.45
Estimated interest distribution# ... 4.67 28.22 58.45
Estimated daily interest accrual# .. .1557 .1567 .1623
Estimated current return#++ ........ 6.18% 6.22% 6.45%
Estimated long term return++ ....... 2.75% 2.80% -0-
Record dates ....................... 1st of Dec. 1 and Dec. 1
each month June 1
Interest distribution dates ........ 15th of Dec. 15 and Dec. 15
each month June 15

</TABLE>

A-5
NY/300341.1

<PAGE>

Footnotes to Summary of Essential Information
---------------------------------------------

* The Date of Deposit is the date on which the Trust Agreement was signed
and the deposit of the Bonds with the Trustee made.

** Certain amounts distributable as of June 30, 2000 may be reported in
the Summary of Essential Information as if they had been distributed at
year-end.

*** The Trustee maintains its principal executive office at 270 Park
Avenue, New York, New York 10017 and its unit investment trust office
at 4 New York Plaza, New York, New York 10004 (tel. no.:
1-800-882-9898). For information regarding redemption by the Trustee,
see "Trustee Redemption" in Part B of this Prospectus.

+ Plus accrued interest to the expected date of settlement (approximately
three business days after purchase) of $10.12 monthly, $14.80 semi-
annually and $44.36 annually.

++ The estimated current return and estimated long term return are
increased for transactions entitled to a discount (see "Employee
Discounts" in Part B of this Prospectus), and are higher under the
semi- annual and annual options due to lower Trustee's fees and
expenses.

++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.

# Does not include income accrual from original issue discount bonds, if
any.

<TABLE>
<CAPTION>
FINANCIAL AND STATISTICAL INFORMATION

Selected data for each Unit outstanding for the periods listed below:

Distribu-
Distributions of Interest tions of
During the Period (per Unit) Principal
---------------------------- During
Net Asset* Semi- the
Units Out- Value Monthly Annual Annual Period
Period Ended standing Per Unit Option Option Option (Per Unit)
------------ ---------- ---------- ------- ------ ------ ----------

<S> <C> <C> <C> <C> <C> <C>
June 30, 1998 2,725 $1,023.00 $62.37 $62.88 -0- $ 21.10
June 30, 1999 2,692 991.60 60.95 61.46 -0- 9.64
June 30, 2000 2,617 884.27 57.38 57.85 -0- 161.86

</TABLE>

----------
* Net Asset Value per Unit is calculated by dividing net assets as
disclosed in the "Statement of Net Assets" by the number of Units
outstanding as of the date of the Statement of Net Assets. See Note 5
of Notes to Financial Statements for a description of the components of
Net Assets.

A-6
NY/300341.1

<PAGE>

INFORMATION REGARDING THE TRUST

AS OF JUNE 30, 2000

DESCRIPTION OF PORTFOLIO*
------------------------

The portfolio of the Trust consists of 8 issues representing
obligations of issuers located in 8 states. The Sponsor has not participated as
a sole underwriter or manager, co-manager or member of underwriting syndicates
from which any of the initial aggregate principal amount of the Bonds were
acquired. None of the Bonds are obligations of state and local housing
authorities; approximately 14.2% are hospital revenue bonds; none were issued in
connection with the financing of nuclear generating facilities; and
approximately 8.1% are "mortgage subsidy" bonds. All of the Bonds in the Trust
are subject to redemption prior to their stated maturity dates pursuant to
sinking fund or call provisions. The Bonds may also be subject to other calls,
which may be permitted or required by events which cannot be predicted (such as
destruction, condemnation, termination of a contract, or receipt of excess or
unanticipated revenues). One of the issues representing $210,000 of the
principal amount of the Bonds is a general obligation bond. All seven of the
remaining issues representing $2,015,000 of the principal amount of the Bonds
are payable from the income of a specific project or authority and are not
supported by the issuer's power to levy taxes. The portfolio is divided for
purpose of issue as follows: Convention Center 1, Courthouse 1, Electric and Gas
1, Hospital 1, Pollution Control 1, Single Family Mortgage Revenue 1 and Water
Development 1. For an explanation of the significance of these factors see "The
Trust--Portfolio" in Part B of this Prospectus.

As of June 30, 2000, $220,000 (approximately 9.9% of the
aggregate principal amount of the Bonds) were original issue discount bonds. Of
these original issue discount bonds, $50,000 (approximately 2.2% of the
aggregate principal amount of the Bonds) were Zero Coupon Bonds. Zero Coupon
Bonds do not provide for the payment of any current interest and provide for
payment at maturity at par value unless sooner sold or redeemed. The market
value of Zero Coupon Bonds is subject to greater fluctuations than coupon bonds
in response to changes in interest rates. None of the aggregate principal amount
of the Bonds in the Trust were purchased at a "market" discount from par value
at maturity, approximately 90.1% were purchased at a premium and none were
purchased at par. For an explanation of the significance of these factors see
"Discount and Zero Coupon Bonds" in Part B of this Prospectus.

None of the Bonds in the Trust are subject to the federal
individual alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.

----------

* Changes in the Trust Portfolio: From July 1, 2000 to September 15,
2000, the entire principal amount of the bond in portfolio no. 3A was
called and is no longer contained in the Trust.

A-7
NY/300341.1

<PAGE>

Report of Independent Auditors

The Sponsor, Trustee and Certificateholders of
Insured Municipal Securities Trust, Series 27

We have audited the accompanying statement of net assets of Insured Municipal
Securities Trust, Series 27, including the portfolio, as of June 30, 2000 and
the related statements of operations, and changes in net assets and financial
highlights for the year then ended. These financial statements and financial
highlights are the responsibility of the Trustee. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audit. The statement of operations and statement of changes in net assets
for each of the two years in the period ended June 30, 1999 and financial
highlights for each of the four years in the period ended June 30, 1999 were
audited by other auditors whose report thereon dated September 15, 1999,
expressed an unqualified opinion on those financial statements and financial
highlights.

In our opinion, the 2000 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Insured Municipal Securities Trust, Series 27 at June 30, 2000, the results of
its operations, changes in its net assets and financial highlights for the year
then ended, in conformity with accounting principles generally accepted in the
United States.

/s/ Ernst & Young
New York, New York
October 16, 2000

<PAGE>

Insured Municipal Securities Trust, Series 27

Portfolio

June 30, 2000
<TABLE>
<CAPTION>

Redemption
Aggregate Coupon Feature (2)(4)
Portfolio Principal Rate/Date(s) of S.F.-Sinking Fund
No. Amount Name of Issuer and Title of Bonds Ratings (1) Maturity (2) Ref.-Refunding
-----------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
1 $ 400,000 Jasper Cnty. Ind. Colltzd. Poll. Cntrl. (No. Ind. AAA 7.100% No Sinking Fund
Pub. Serv. Co. Prjt.) Rfndg. Rev. Bonds Series 7/01/2017 7/01/01 @ 102 Ref.
1991 (MBIA Corp.)

2 400,000 Burlington Ks. Poll. Cntrl. Rfndg. Rev. Bonds AAA 7.000 No Sinking Fund
(Kansas Gas & Elec. Co. Prjt.) (MBIA Corp.) 6/01/2031 6/01/01 @ 102 Ref.

3 155,000 Maine State Hsg. Auth. Mtg. Purch. Rev. Bonds AAA 7.150 11/15/03 @ 100 S.F.
Series 1989A-2 (MBIA Corp.) 11/15/2014 11/15/04 @ 100 Ref.

3A 25,000 Maine State Hsg. Auth. Mtg. Purch. Rev. Bonds AAA 7.150 11/15/03 @ 100 S.F.
Series 1989A-2 (MBIA Corp.) 11/15/2014 7/15/00 @ 100 Ref.

4 210,000 North Las Vegas Nev. Gen. Oblig. (Ltd. Tax) Pub. AAA 7.125 4/01/06 @ 100 S.F.
Safety Bldg. Bonds Series 1991 (Financial Guaranty) 4/01/2011 4/01/01 @ 101 Ref.

5 170,000 R.I. Cnvntn. Cntr. Auth. Rev. Bonds Series 1991A AAA 6.700 5/15/13 @ 100 S.F.
(MBIA Corp.) 5/15/2020 5/15/01 @ 102 Ref.

6 500,000 W. Va. Wtr. Dev. Auth. Wtr. Dev. Rev. Rfndg. Bonds AAA 7.000 11/01/12 @ 100 S.F.
(Loan Prgm.) Series 1991A (Capital Guaranty) 11/01/2025 11/01/01 @ 102 Ref.

7 315,000 Wisc. Hlth. & Ed. Facs. Auth. (St. Luke's Med. AAA 7.100 8/15/12 @ 100 S.F.
Cntr. Prjt.) Rev. Bonds (MBIA Corp.) 8/15/2019 8/15/01 @ 102 Ref.

8 50,000 Dade Cnty. Fla. Gtd. Entitlement Rev. Bonds Series AAA 0.000 2/01/15 @ 76.763 S.F.
1990 (AMBAC) 8/01/2018 2/01/06 @ 40.444 Ref.

------------
$2,225,000 Total Investments (Cost (3) $2,245,708)

============
</TABLE>

Portfolio

June 30, 2000 (continued)
<TABLE>
<CAPTION>

Aggregate
Portfolio Principal Market
No. Amount Name of Issuer and Title of Bonds Value (3)
---------------------------------------------------------------------------------------------------------

<S> <C> <C>
1 $ 400,000 Jasper Cnty. Ind. Colltzd. Poll. Cntrl. (No. Ind $ 415,908
Pub. Serv. Co. Prjt.) Rfndg. Rev. Bonds Series
2 1991 (MBIA Corp.) 415,111

400,000 Burlington Ks. Poll. Cntrl. Rfndg. Rev. Bonds
3 (Kansas Gas & Elec. Co. Prjt.) (MBIA Corp.) 158,643

155,000 Maine State Hsg. Auth. Mtg. Purch. Rev. Bonds
3A Series 1989A-2 (MBIA Corp.) 25,000

25,000 Maine State Hsg. Auth. Mtg. Purch. Rev. Bonds
4 Series 1989A-2 (MBIA Corp.) 216,395

210,000 North Las Vegas Nev. Gen. Oblig. (Ltd. Tax) Pub.
5 Safety Bldg. Bonds Series 1991 (Financial Guaranty) 176,650

170,000 R.I. Cnvntn. Cntr. Auth. Rev. Bonds Series 1991A
6 (MBIA Corp.) 523,865

500,000 W. Va. Wtr. Dev. Auth. Wtr. Dev. Rev. Rfndg. Bonds
7 (Loan Prgm.) Series 1991A (Capital Guaranty) 330,111

315,000 Wisc. Hlth. & Ed. Facs. Auth. (St. Luke's Med.
8 Cntr. Prjt.) Rev. Bonds (MBIA Corp.) 15,289

50,000 Dade Cnty. Fla. Gtd. Entitlement Rev. Bonds Series
1990 (AMBAC) ---------------
$ 2,276,972
------------
$2,225,000 Total Investments (Cost (3) $2,245,708) ===============
============
</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

Insured Municipal Securities Trust, Series 27

Footnotes to Portfolio

1. All ratings are by Kenny S&P Evaluation Services, a business unit of J.J.
Kenny Company, Inc., a subsidiary of The McGraw-Hill Companies, Inc. A
brief description of the ratings symbols and their meaning is set forth
under "Description of Bond Ratings" in Part B of the Prospectus.

2. See "The Trust--Portfolio" in Part B of the Prospectus for an explanation
of redemption features. See "Tax Status" in Part B of the Prospectus for a
statement of the Federal tax consequences to a Certificateholder upon the
sale, redemption or maturity of a bond.

3. At June 20, 2000, the net unrealized appreciation of all the bonds was
comprised of the following:

Gross unrealized appreciation $ 33,614
Gross unrealized depreciation (2,350)
-----------------
Net unrealized appreciation $ 31,264
=================

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust, Series 27

Statement of Net Assets

June 30, 2000
<TABLE>
<CAPTION>

<S> <C>
Investments in securities, at market value (cost $2,245,708) $ 2,276,972

Other assets:
Accrued interest 37,305
------------------------
Total other assets 37,305
------------------------

Liabilities:
Advance from Trustee 155
------------------------
Total liabilities 155
------------------------

Excess of other assets over total liabilities 37,150
------------------------

Net assets (2,617 units of fractional undivided
interest outstanding, $884.27 per unit) $ 2,314,122
========================
</TABLE>

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust, Series 27

Statement of Operations

Year ended June 30,
2000 1999 1998
-------------------------------------------------------------------

Investment income
<S> <C> <C> <C>
Interest $ 157,612 $ 174,177 $ 180,372

Expenses
Trustee's fees 3,917 4,338 4,628
Evaluator's fee 2,200 2,249 2,368
Sponsor's advisory fee 649 678 695
-------------------------------------------------------------------
Total expenses 6,766 7,265 7,691
-------------------------------------------------------------------

Net investment income 150,846 166,912 172,681
-------------------------------------------------------------------

Realized and unrealized gain (loss)
Realized gain on investments 2,789 2,594 4,680
Unrealized (depreciation)
on investments (71,952) (63,290) (9,797)
-------------------------------------------------------------------
Net (loss) on investments (69,163) (60,696) (5,117)
-------------------------------------------------------------------
Net increase in net assets resulting from operations $ 81,683 $ 106,216 $ 167,564
===================================================================
</TABLE>

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust, Series 27

Statement of Changes in Net Assets
<TABLE>
<CAPTION>

Year ended June 30,
2000 1999 1998
-------------------------------------------------------------------

Operations
<S> <C> <C> <C>
Net investment income $ 150,846 $ 166,912 $ 172,681
Realized gain on investments 2,789 2,594 4,680
Unrealized (depreciation)
on investments (71,952) (63,290) (9,797)
-------------------------------------------------------------------
Net increase in net assets resulting from operations
81,683 106,216 167,564
-------------------------------------------------------------------

Distributions to certificateholders
Investment income 151,433 164,805 171,247
Principal 216,053 25,951 57,601

Redemptions
Interest 932 385 834
Principal 68,525 33,377 67,416
-------------------------------------------------------------------
Total distributions and redemptions 436,943 224,518 297,098
-------------------------------------------------------------------

Total (decrease) (355,260) (118,302) (129,534)

Net assets
Beginning of year 2,669,382 2,787,684 2,917,218
-------------------------------------------------------------------
End of year (including undistributed net investment income of
$43,245, $57,523, and $55,801, respectively) $ 2,314,122 $ 2,669,382 $ 2,787,684
===================================================================
</TABLE>

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust, Series 27

Financial Highlights

Selected data for a unit of the Trust outstanding:*
<TABLE>
<CAPTION>

Year ended June 30,
2000 1999 1998 1997 1996
---------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year** $ 991.60 $ 1,023.00 $ 1,045.60 $ 1,051.42 $ 1,056.70
---------------------------------------------------------------------------------

Interest income 59.36 64.30 65.40 66.46 67.08
Expenses (2.55) (2.68) (2.79) (2.63) (2.55)
---------------------------------------------------------------------------------
Net investment income 56.81 61.62 62.61 63.83 64.53
---------------------------------------------------------------------------------
Net gain or loss on investments (1) (25.37) (22.46) (1.93) 5.37 (5.93)
---------------------------------------------------------------------------------
Total from investment operations 31.44 39.16 60.68 69.20 58.60
---------------------------------------------------------------------------------

Less distributions
to Certificateholders:
Income 57.04 60.84 62.09 63.07 63.77
Principal 81.38 9.58 20.89 10.94 -
for Redemptions:
Interest 0.35 .14 .30 1.01 .11
---------------------------------------------------------------------------------
Total distributions 138.77 70.56 83.28 75.02 63.88
---------------------------------------------------------------------------------
Net asset value, end of year** $ 884.27 $ 991.60 $ 1,023.00 $ 1,045.60 $ 1,051.42
=================================================================================
</TABLE>

(1) Net gain or loss on investments is a result of changes in outstanding units
since July 1, 1999, 1998, 1997, 1996 and 1995, respectively, and the dates
of net gain and loss on investments.

* Unless otherwise stated, based upon average units outstanding during the
year of 2,655 ([2,692 + 2,617]/2) for 2000, 2,709 ([2,725 + 2,692]/2) for
1999, 2,758 ([2,790 + 2,725]/2) for 1998, 2,878 ([2,966 + 2,790]/2) for 1997
and of 2,976 ([2,986 + 2,966]/2) for 1996.

** Based upon actual units outstanding.

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust, 27

Notes to Financial Statements

June 30, 2000

1. Organization

Insured Municipal Securities Trust, Series 27 (the "Trust") was organized on
November 14, 1991 by Bear, Stearns & Co. Inc. and Gruntal & Co. LLC under the
laws of the State of New York by a Trust Indenture and Agreement, and is
registered under the Investment Company Act of 1940. The Trust was formed to
preserve capital and to provide interest income.

Effective February 9, 2000, Gruntal & Co. LLC resigned as a co-sponsor of
certain unit investment trusts previously co-sponsored with Reich & Tang. ING
Funds Distributor, Inc. ("ING") has become the successor sponsor to certain unit
investment trusts previously sponsored by Reich & Tang. As successor sponsor,
ING has assumed all of the obligations and rights of Reich & Tang, the previous
sponsor.

2. Summary of Significant Accounting Policies

Interest Income

<PAGE>

Insured Municipal Securities Trust, 27

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Security Valuation

3. Income Taxes

4. Trust Administration

The Trust Indenture and Agreement provides for interest distributions as often
as monthly (depending upon the distribution plan elected by the
Certificateholders).

<PAGE>

Insured Municipal Securities Trust, 27

Notes to Financial Statements (continued)

4. Trust Administration (continued)

The Trust Indenture and Agreement also requires the Trust to redeem units
tendered. For the years ended June 30, 2000, 1999 and 1998, 75, 33 and 65 units
were redeemed, respectively.

The Trust pays an annual fee for trustee services rendered by the Trustee that
ranges from $.35 to $1.05 per $1,000 of outstanding investment principal. In
addition, a minimum fee of $8.00 is paid to a service bureau for each portfolio
valuation. A maximum fee of $.25 per $1,000 of outstanding investment principal
is paid to the Sponsor. For the years ended June 30, 2000, 1999 and 1998, the
"Trustee's Fees" are comprised of Trustee fees of $2,410, $2,715 and $3,036 and
other expenses of $1,507, $1,623 and $1,592, respectively. The other expenses
include professional, printing and miscellaneous fees.

5. Net Assets

At June 30, 2000, the net assets of the Trust represented the interest of
Certificateholders as follows:
<TABLE>

<S> <C>
Original cost to Certificateholders $ 3,070,023
Less initial gross underwriting commission 150,431
--------------------
2,919,592

Accumulated cost of securities sold, matured or called (679,982)
Net unrealized appreciation 31,264
Undistributed net investment income 43,245
Undistributed proceeds from investments 3
--------------------
Total $ 2,314,122
====================
</TABLE>

<PAGE>

Insured Municipal Securities Trust, 27

Notes to Financial Statements (continued)

5. Net Assets (continued)

The original cost to Certificateholders, less the initial gross underwriting
commission, represents the aggregate initial public offering price net of the
applicable sales charge on 3,000 units of fractional undivided interest of the
Trust as of the date of deposit.

Undistributed net investment income includes accumulated accretion of original
issue discount of $6,098.

6. Concentration of Credit Risk

<PAGE>

Prospectus Part A Dated October 28, 2000

INSURED MUNICIPAL SECURITIES TRUST
NEW JERSEY NAVIGATOR INSURED

SERIES 6

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

The Trust is a unit investment trust designated Series 6 ("New
Jersey Navigator Trust") with an underlying portfolio of long-term insured
tax-exempt bonds and was formed to preserve capital and to provide interest
income (including, where applicable, earned original issue discount) which, in
the opinions of bond counsel to the respective issuers, is, with certain
exceptions, currently exempt from regular federal income tax under existing law
and from New Jersey gross income tax. There can be no assurance that the Trust's
investment objectives will be achieved. Although the Supreme Court has
determined that Congress has the authority to subject the interest on bonds such
as the Bonds in the Trust to regular federal income taxation, existing law
excludes such interest from regular federal income tax. Such interest income
may, however, be a specific preference item for purposes of the federal
individual and/or corporate alternative minimum tax. (See "Description of
Portfolio" in this Part A for a list of those Bonds which pay interest income
subject to the federal individual alternative minimum tax.) In addition, capital
gains are subject to tax. (See "Tax Status" and "The Trust--Portfolio" in Part B
of this Prospectus.) The Sponsor is ING Funds Distributor, Inc. (successor to
Reich & Tang Distributors, Inc.). The value of the Units of the Trust will
fluctuate with the value of the underlying bonds. Minimum purchase: 1 Unit.

This Prospectus consists of two parts. Part A contains the
Summary of Essential Information as of June 30, 2000 (the "Evaluation Date"), a
summary of certain specific information regarding the Trust and audited
financial statements of the Trust, including the related portfolio, as of the
Evaluation Date. Part B of this Prospectus contains a general summary of the
Trust. Part A of this Prospectus may not be distributed unless accompanied by
Part B. Investors should retain both parts of this Prospectus for future
reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

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

THE TRUST. The Trust seeks to achieve its investment
objectives through investment in a fixed, diversified portfolio of long-term
insured bonds (the "Bonds") issued by or on behalf of states, municipalities and
public authorities which, because of irrevocable insurance, were rated "AAA" by
Standard & Poor's Corporation. All of the Bonds in the Trust were rated "AAA" by
Standard & Poor's Corporation at the time originally deposited in the Trust (see
"Portfolio"). This rating results from insurance relating only to the Bonds in
the Trust and not to Units of the Trust. The insurance does not remove market
risk, as it does not guarantee the market value of the Units. For a discussion
of the significance of such ratings, see "Description of Bond Ratings" in Part B
of this Prospectus. Some of the aggregate principal amount of the Bonds in the
Trust may be "Zero Coupon Bonds," which are original issue

NY/300342.1

<PAGE>

discount bonds that provide for payment at maturity at par value, but do not
provide for the payment of current interest (for the amount of Zero Coupon Bonds
in the Trust, and the cost of such Bonds to the Trust, see "Description of
Portfolio" in this Part A). The payment of interest and preservation of capital
are, of course, dependent upon the continuing ability of the issuers of the
Bonds or the insurer thereof to meet their obligations.

Investment in the Trust should be made with an understanding
of the risks which an investment in long-term fixed rate debt obligations may
entail, including the risk that the value of the underlying portfolio will
decline with increases in interest rates, and that the value of Zero Coupon
Bonds is subject to greater fluctuation than coupon bonds in response to such
changes in interest rates. A Trust designated as a long-term trust must have a
dollar-weighted average portfolio maturity of more than ten years. (See
"Portfolio" in Part B of this Prospectus.)

Each Unit in the Trust represents a 1/2805th undivided
interest in the principal and net income of the Trust. The principal amount of
Bonds deposited in the Trust per Unit is reflected in the Summary of Essential
Information. (See "Organization" in Part B of this Prospectus.) The Units being
offered hereby are issued and outstanding Units which have been purchased by the
Sponsor in the secondary market.

INSURANCE. Each of the Bonds in the New Jersey Navigator Trust
is insured by a municipal bond guaranty insurance policy obtained by the Sponsor
(the "Navigator Sponsor-Insured Bonds") from MBIA Insurance Corporation ("MBIA
Corp.") covering regularly scheduled payments of principal thereof and interest
thereon when such amounts become due for payment but shall not have been paid.
For discussion of the effect of an occurrence of non-payment of principal or
interest on any Bonds in the New Jersey Navigator Trust see "Portfolio
Supervision" in Part B of this Prospectus. The premiums for the Navigator
Sponsor-Insured Bonds are obligations of the Sponsor. Additionally, some of the
Bonds in the New Jersey Navigator Trust may be Pre-Insured Bonds (as described
below). The premium for the Pre-Insured Bonds is an obligation of the issuers,
underwriters or prior owners of those Bonds. The insurance policy or policies
relating to the Navigator Sponsor-Insured Bonds provides that, to the extent
that Bonds are both Pre-Insured Bonds and Navigator Sponsor-Insured Bonds,
coverage is effective after a claim has been made upon the insurer of the
Pre-Insured Bonds.

Some of the Bonds in the New Jersey Navigator Trust may
additionally be insured by a municipal bond guaranty insurance policy obtained
by issuers, underwriters or prior owners of the Bonds ("Pre-Insured Bonds") and
issued by one of the insurance companies described under "Insurance on the
Bonds" in Part B of this Prospectus (the "Insurance Companies"). Such insurance
covers the scheduled payment of principal thereof and interest thereon when such
amounts shall become due for payment but shall not have been paid by the issuer
or any other insurer thereof.

None of the insurance will cover accelerated payments of
principal or penalty interest or premiums unrelated to taxability of interest on
the Bonds. The insurance relates only to the prompt payment of principal of and
interest on the securities in the portfolios, and does not remove market risks
nor does it guarantee the market value of Units in the Trusts. The terms of the
insurance are more fully described under "Insurance on the Bonds" in Part B of
this Prospectus. No representation is made herein as to any Bond insurer's
ability to meet its obligations under a policy of insurance relating to any of
the Pre-Insured Bonds. In addition, investors should be aware that

A-2
NY/300342.1

<PAGE>

subsequent to the Date of Deposit the rating of the claims-paying ability of the
insurer of an underlying Pre-Insured Bond may be downgraded.

All of the Bonds in the New Jersey Navigator Trust are covered
by insurance obtained by the Sponsor from MBIA Corp. and 93.2% of the Bonds in
the New Jersey Navigator Trust are Pre-Insured Bonds. The approximate percentage
of the aggregate principal amount of the Trust that is insured by each Insurance
Company with respect to Pre-Insured Bonds is as follows: AMBAC Indemnity Corp.
("AMBAC"), 16.2%; Financial Guaranty Insurance Company ("Financial Guaranty"),
23.5%; and MBIA Corp., 53.5%.

PUBLIC OFFERING PRICE. The secondary market Public Offering
Price of each Unit is equal to the aggregate offering price of the Bonds in such
Trust divided by the number of Units outstanding, plus a sales charge of 3.5% of
the Public Offering Price, or 3.626% of the net amount invested in Bonds per
Unit. The sales charge for secondary market purchases is based upon the number
of years remaining to maturity of each bond in the Trust's portfolio. (See
"Public Offering" in Part B of this Prospectus.) In addition, accrued interest
to the expected date of settlement is added to the Public Offering Price. If
Units had been purchased on the Evaluation Date, the Public Offering Price per
Unit would have been $695.28 plus accrued interest of $5.28 under the monthly
distribution plan, $8.59 under the semi-annual distribution plan and $29.23
under the annual distribution plan, for a total of $700.56, $703.87 and $724.51,
respectively. The Public Offering Price per Unit can vary on a daily basis in
accordance with fluctuations in the aggregate bid price of the Bonds. (See
"Public Offering--Offering Price" in Part B of this Prospectus.)

ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. Units
of each Trust are offered to investors on a "dollar price" basis (using the
computation method described under "Public Offering--Offering Price" in Part B)
as distinguished from a "yield price" basis often used in offerings of tax
exempt bonds (involving the lesser of the yield as computed to maturity of bonds
or to an earlier redemption date). Since they are offered on a dollar price
basis, the rate of return on an investment in Units of each Trust is measured in
terms of "Estimated Current Return" and "Estimated Long Term Return".

Estimated Long Term Return is calculated by: (1) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in the Trust's portfolio in accordance with accepted bond
practices, which practices take into account not only the interest payable on
the Bond but also the amortization of premiums or accretion of discounts, if
any; (2) calculating the average of the yields for the Bonds in the Trust's
portfolio by weighing each Bond's yield by the market value of the Bond and by
the amount of time remaining to the date to which the Bond is priced (thus
creating an average yield for the portfolio of the Trust); and (3) reducing the
average yield for the portfolio of the Trust in order to reflect estimated fees
and expenses of the Trust and the maximum sales charge paid by investors. The
resulting Estimated Long Term Return represents a measure of the return to
investors earned over the estimated life of the Trust. (For the Estimated Long
Term Return to Certificateholders under the monthly, semi-annual and annual
distribution plans, see "Summary of Essential Information".)

A-3
NY/300342.1

<PAGE>

the Bonds in the portfolio of the Trust. Moreover, because interest rates on
Bonds purchased at a premium are generally higher than current interest rates on
newly issued bonds of a similar type with comparable rating, the Estimated
Current Return per Unit may be affected adversely if such Bonds are redeemed
prior to their maturity.

The Estimated Net Annual Interest Income per Unit of the Trust
will vary with changes in the fees and expenses of the Trustee and the Evaluator
applicable to the Trust and with the redemption, maturity, sale or other
disposition of the Bonds in the Trust. The Public Offering Price will vary with
changes in the bid prices of the Bonds. Therefore, there is no assurance that
the present Estimated Current Return or Estimated Long Term Return will be
realized in the future. (For the Estimated Current Return to Certificateholders
under the monthly, semi-annual and annual distribution plans, see "Summary of
Essential Information". See "Estimated Long Term Return and Estimated Current
Return" in Part B of this Prospectus.)

A schedule of cash flow projections is available from the
Sponsor upon request.

DISTRIBUTIONS. Distributions of interest income, less
expenses, will be made by the Trust either monthly, semi-annually or annually
depending upon the plan chosen by the Certificateholder. Certificateholders
purchasing Units in the secondary market will initially receive distributions in
accordance with the elections of the prior owner and may thereafter change the
plan as provided under "Interest and Principal Distributions" in Part B of this
Prospectus. Distributions of principal, if any, will be made semi-annually on
June 15 and December 15 of each year. (See "Rights of
Certificateholders--Interest and Principal Distributions" in Part B of this
Prospectus. For estimated monthly, semi-annual and annual interest
distributions, see "Summary of Essential Information.")

MARKET FOR UNITS. The Sponsor, although not obligated to do
so, intends to maintain a secondary market for the Units at a price based on the
aggregate bid price of the Bonds in the Trust portfolio. The reoffer price will
be based on the aggregate bid price of the Bonds in the Trust portfolio plus a
sales charge of 3.5% of the Public Offering Price (3.626% of the net amount
invested), plus net accrued interest. If a market is not maintained a
Certificateholder will be able to redeem his or her Units with the Trustee at a
price based on the aggregate bid price of the Bonds. (See "Sponsor Repurchase"
and "Public Offering--Offering Price" in Part B of this Prospectus.)

A-4
NY/300342.1

<PAGE>

INSURED MUNICIPAL SECURITIES TRUST
NEW JERSEY NAVIGATOR INSURED
SERIES 6

SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 30, 2000
----------------------------------------------------

<S> <C> <C>
Date of Deposit*: Weighted Average Life to Maturity:
November 14, 1991 9.9 Years.
Principal Amount of Bonds .... $1,980,000 Minimum Value of Trust: Trust may
Number of Units .............. 2,805 be terminated if value of Trust
Fractional Undivided Inter- is less than $1,600,000 in
est in Trust per Unit ...... 1/2805 principal amount of Bonds.
Principal Amount of Mandatory Termination Date: The
Bonds per Unit ............. $705.88 earlier of December 31, 2040 or
Secondary Market Public the disposition of the last
Offering Price** Bond in the Trust.
Aggregate Bid Price Trustee***: The Chase Manhattan
of Bonds in Trust ........ $1,881,555+++ Bank.
Divided by 2,805 Units ..... $670.79 Trustee's Annual Fee: Monthly plan
Plus Sales Charge of 3.5% $1.07 per $1,000; semi-annual
of Public Offering Price . $24.49 plan $.62 per $1,000; and
Public Offering Price annual plan is $.37 per $1,000.
per Unit ................. $695.28 Evaluator: Kenny S&P Evaluation
Redemption and Sponsor's Services.
Repurchase Price Evaluator's Fee for Each
per Unit ................. $670.79+ Evaluation: Minimum of $8 plus
+++ $.25 per each issue of Bonds in
++++ excess of 50 issues (treating
Excess of Secondary Market separate maturities as separate
Public Offering Price issues).
over Redemption and Sponsor: ING Funds Distributor,
Sponsor's Repurchase Inc.
Price per Unit ............. $24.49++++ Sponsor's Annual Fee: Maximum of
Difference between Public $.25 per $1,000 principal
Offering Price per Unit amount of Bonds (see "Trust
and Principal Amount per Expenses and Charges" in Part B
Unit Premium/(Discount) .... $(10.60) of this Prospectus).
Evaluation Time: 4:00 p.m.
New York Time.
Minimum Principal Distribution:
$1.00 per Unit.

</TABLE>

<TABLE>
<CAPTION>
PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED
------------------------------------------------------------------

Monthly Semi-Annual Annual
Option Option Option
------ ------ ------

<S> <C> <C> <C>
Gross annual interest income# ......... $31.12 $31.12 $31.12
Less estimated annual fees and
expenses ............................ 2.20 1.70 1.38
Estimated net annual interest ______ ______ ______
income (cash)# ...................... $28.92 $29.42 $29.74
Estimated interest distribution# ...... 2.41 14.71 29.74
Estimated daily interest accrual# ..... .0803 .0817 .0826
Estimated current return#++ ........... 4.16% 4.23% 4.28%
Estimated long term return++ .......... 2.82% 2.92% 2.98%
Record dates .......................... 1st of Dec. 1 and Dec. 1
each month June 1
Interest distribution dates ........... 15th of Dec. 15 and Dec. 15
each month June 15

</TABLE>

A-5
NY/300342.1

<PAGE>

Footnotes to Summary of Essential Information

* The Date of Deposit is the date on which the Trust Agreement was signed
and the deposit of the Bonds with the Trustee made.

** Certain amounts distributable as of June 30, 2000 may be reported in
the Summary of Essential Information as if they had been distributed as
of year-end.

*** The Trustee maintains its principal executive office at 270 Park
Avenue, New York, New York 10017 and its unit investment trust office
at 4 New York Plaza, New York, New York 10004 (tel. no.:
1-800-882-9898). For information regarding redemption by the Trustee,
see "Trustee Redemption" in Part B of this Prospectus.

+ Plus accrued interest to the expected date of settlement (approximately
three business days after purchase) of $5.28 monthly, $8.59
semi-annually and $29.23 annually.

++ The estimated current return and estimated long term return are
increased for transactions entitled to a discount (see "Employee
Discounts" in Part B of this Prospectus), and are higher under the
semi-annual and annual options due to lower Trustee's fees and
expenses.

++++ See "Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B of this Prospectus.

# Does not include income accrual from original issue discount bonds, if
any.

<TABLE>
<CAPTION>
FINANCIAL AND STATISTICAL INFORMATION

Selected data for each Unit outstanding for the periods listed below:

<S> <C> <C> <C> <C> <C> <C>
June 30, 1998 3,250 $826.12 $48.25 $48.75 $51.31 $70.96
June 30, 1999 2,916 784.23 46.76 47.23 48.08 24.11
June 30, 2000 2,805 679.44 43.36 43.80 47.08 86.78

</TABLE>

----------
* Net Asset Value per Unit is calculated by dividing net assets as
disclosed in the "Statement of Net Assets" by the number of Units
outstanding as of the date of the Statement of Net Assets. See Note 5
of Notes to Financial Statements for a description of the components of
Net Assets.

A-6
NY/300342.1

<PAGE>

INFORMATION REGARDING THE TRUST

AS OF JUNE 30, 2000

DESCRIPTION OF PORTFOLIO*
------------------------

The portfolio of the Trust consists of 8 issues representing
obligations of 7 issuers located in the state of New Jersey. The Sponsor has not
participated as a sole underwriter or manager, co-manager or member of
underwriting syndicates from which any of the initial aggregate principal amount
of the Bonds were acquired. None of the Bonds are obligations of state and local
housing authorities; approximately 34.3% are hospital revenue bonds; none were
issued in connection with the financing of nuclear generating facilities; and
none are "mortgage subsidy" bonds. Six of the Bonds in the Trust are subject to
redemption prior to their stated maturity dates pursuant to sinking fund or call
provisions. The Bonds may also be subject to other calls, which may be permitted
or required by events which cannot be predicted (such as destruction,
condemnation, termination of a contract, or receipt of excess or unanticipated
revenues). None of the Bonds are general obligation bonds. Eight issues
representing $1,980,000 of the principal amount of the Bonds are payable from
the income of a specific project or authority and are not supported by the
issuer's power to levy taxes. The portfolio is divided for purpose of issue as
follows: Educational Facilities 2, Hospital 3 and Utility Revenue 3. For an
explanation of the significance of these factors see "The Trust--Portfolio" in
Part B of this Prospectus.

As of June 30, 2000, $380,000 (approximately 19.2% of the
aggregate principal amount of the Bonds) were original issue discount bonds. Of
these original issue discount bonds, $230,000 (approximately 11.6% of the
aggregate principal amount of the Bonds) were Zero Coupon Bonds. Zero Coupon
Bonds do not provide for the payment of any current interest and provide for
payment at maturity at par value unless sooner sold or redeemed. The market
value of Zero Coupon Bonds is subject to greater fluctuations than coupon bonds
in response to changes in interest rates. Approximately 41.4% of the aggregate
principal amount of the Bonds in the Trust were purchased at a "market" discount
from par value at maturity, approximately 39.4% were purchased at a premium and
none were purchased at par. For an explanation of the significance of these
factors see "Discount and Zero Coupon Bonds" in Part B of this Prospectus.

None of the Bonds in the Trust are subject to the federal
individual alternative minimum tax under the Tax Reform Act of 1986. See "Tax
Status" in Part B of this Prospectus.

----------

* Changes in the Trust Portfolio: From July 1, 2000 to September 15,
2000, the entire principal amount of the Bond in portfolio no. 4 was
called and is no longer contained in the Trust. 30 Units were redeemed
from the Trust.

A-7
NY/300342.1

<PAGE>

Report of Independent Auditors

The Sponsor, Trustee and Certificateholders of
Insured Municipal Securities Trust, New Jersey Navigator Insured Series 6

We have audited the accompanying statement of net assets of Insured Municipal
Securities Trust, New Jersey Navigator Insured Series 6, including the
portfolio, as of June 30, 2000 and the related statements of operations, and
changes in net assets and financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility of the
Trustee. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit. The statement of
operations and statement of changes in net assets for each of the two years in
the period ended June 30, 1999 and financial highlights for each of the four
years in the period ended June 30, 1999 were audited by other auditors whose
report thereon dated September 15, 1999, expressed an unqualified opinion on
those financial statements and financial highlights.

In our opinion, the 2000 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Insured Municipal Securities Trust, New Jersey Navigator Insured Series 6 at
June 30, 2000, the results of its operations, changes in its net assets and
financial highlights for the year then ended, in conformity with accounting
principles generally accepted in the United States.

/s/ Ernst & Young
New York, New York
October 16, 2000

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 6

Portfolio

June 30, 2000
<TABLE>
<CAPTION>

<S> <C> <C> <C> <C> <C>
1 $ 320,000 N.J. Ed. Facs. Auth. Rev. Bonds Montclair State AAA 6.400% 7/01/07 @ 100 S.F.
Cllg. Issue Series 1991E (MBIA Corp.) 7/01/2011 7/01/01 @ 100 Ref.

2 500,000 N.J. Ed. Facs. Auth. The William Paterson Cllg. Of AAA 6.375 7/01/07 @ 100 S.F.
N.J. Issue Rev. Bonds Series 1991F (MBIA Corp.) 7/01/2021 7/01/01 @ 101 Ref.

3 120,000 N.J. Hlth. Care Facs. Fincg. Auth. Rev. Bonds AAA 7.250 2/15/08 @ 100 S.F.
Cathedral Hlth. Servs. Inc. Issue (FHA Insrd. 2/15/2021 2/15/01 @ 102 Ref.
Mtg.) Series A (MBIA Corp.)

4 410,000 N.J. Hlth. Care Facs. Fincg. Auth. Rev. Bonds AAA 7.000 7/01/01 @ 100 S.F.
Comm. Med. Cntr./Kensington Manor Care Center 7/01/2020 7/01/00 @ 102 Ref.
Issue Series E (MBIA Corp.)

5 150,000 N.J. Care Facs. Fincg. Auth. Rev. Bonds Mercer AAA 6.500 7/01/11 @ 100 S.F.
Med. Cntr. Issue Series 1991 (MBIA Corp.) 7/01/2021 7/01/01 @ 102 Ref.

6 250,000 Ocean Cnty. N.J. Utils. Auth. Waste Wtr. Rfndg. AAA 6.600 1/01/12 @ 100 S.F.
Rev. Bonds Series 1991A (MBIA Corp.) 1/01/2018 1/01/01 @ 101 Ref.

7 100,000 Camden Cnty. N.J. Muni. Utils. Auth. Cnty. AAA 0.000 No Sinking Fund
Agreement Swr. Rev. Cap. Apprec. Bonds Series 9/01/2016 None
1990A (MBIA Corp.)

8 130,000 Camden Cnty. N.J. Muni. Utils. Auth. Cnty. AAA 0.000 No Sinking Fund
Agreement Swr. Rev. Cap. Apprec. Bonds Series 9/01/2018 Fund
1990A (MBIA Corp.)

------------
$ 1,980,000 Total Investments (Cost (3) $1,838,840)
============
</TABLE>

Portfolio

June 30, 2000 (continued)

Aggregate
Portfolio Principal Market
No. Amount Name of Issuer and Title of Bonds Value (3)
-----------------------------------------------------------------------------------------------

<S> <C> <C>
1 $ 320,000 N.J. Ed. Facs. Auth. Rev. Bonds Montclair State $ 328,480
Cllg. Issue Series 1991E (MBIA Corp.)
2 514,419
500,000 N.J. Ed. Facs. Auth. The William Paterson Cllg. Of
N.J. Issue Rev. Bonds Series 1991F (MBIA Corp.)
3 124,504
120,000 N.J. Hlth. Care Facs. Fincg. Auth. Rev. Bonds
Cathedral Hlth. Servs. Inc. Issue (FHA Insrd.
Mtg.) Series A (MBIA Corp.)
4 418,200
410,000 N.J. Hlth. Care Facs. Fincg. Auth. Rev. Bonds
Comm. Med. Cntr./Kensington Manor Care Center
Issue Series E (MBIA Corp.)
5 155,306
150,000 N.J. Care Facs. Fincg. Auth. Rev. Bonds Mercer
Med. Cntr. Issue Series 1991 (MBIA Corp.)
6 254,788
250,000 Ocean Cnty. N.J. Utils. Auth. Waste Wtr. Rfndg.
Rev. Bonds Series 1991A (MBIA Corp.)
7 40,175
100,000 Camden Cnty. N.J. Muni. Utils. Auth. Cnty.
Agreement Swr. Rev. Cap. Apprec. Bonds Series
1990A (MBIA Corp.)
8 45,679
130,000 Camden Cnty. N.J. Muni. Utils. Auth. Cnty.
Agreement Swr. Rev. Cap. Apprec. Bonds Series
1990A (MBIA Corp.)
----------------
------------ $1,881,551
$ 1,980,000 Total Investments (Cost (3) $1,838,840)
============ ================
</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 6

Footnotes to Portfolio

1. All ratings are by Kenny S&P Evaluation Services, a business unit of J.J.
Kenny Company, Inc., a subsidiary of The McGraw-Hill Companies, Inc. A brief
description of the ratings symbols and their meaning is set forth under
"Description of Bond Ratings" in Part B of the Prospectus.

3. At June 30, 2000, the net unrealized appreciation of all the bonds was
comprised of the following:

Gross unrealized appreciation $ 54,702
Gross unrealized depreciation (11,991)
-----------------
Net unrealized appreciation $ 42,711
=================

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 6

Statement of Net Assets

June 30, 2000
<TABLE>
<CAPTION>

<S> <C>
Investments in securities, at market value (cost $1,838,840) $ 1,881,551

Other assets
Accrued interest 56,827
--------------------
Total other assets 56,827
--------------------

Liabilities
Advance from Trustee 32,542
--------------------
Total liabilities 32,542
--------------------

Excess of other assets over total liabilities 24,285
--------------------

Net assets (2,805 units of fractional undivided
interest outstanding, $679.44 per unit) $ 1,905,836
====================
</TABLE>

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 6

Statement of Operations
<TABLE>
<CAPTION>

Year ended June 30,
2000 1999 1998
-------------------------------------------------------------------

Investment income
<S> <C> <C> <C>
Interest $ 131,088 $ 154,856 $ 173,298

Expenses
Trustee's fees 3,895 4,473 4,860
Evaluator's fee 2,200 2,250 2,364
Sponsor's advisory fee 634 674 759
-------------------------------------------------------------------
Total expenses 6,729 7,397 7,983
-------------------------------------------------------------------

Net investment income 124,359 147,459 165,315
-------------------------------------------------------------------

Realized and unrealized gain (loss)
Realized gain (loss) on investments (7,296) (498) 5,398
Unrealized (depreciation) on investments (44,667) (55,087) (3,218)
-------------------------------------------------------------------
Net gain (loss) on investments (51,963) (55,585) 2,180
-------------------------------------------------------------------
Net increase in net assets resulting from operations $ 72,396 $ 91,874 $ 167,495
===================================================================
</TABLE>

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 6

Statement of Changes in Net Assets
<TABLE>
<CAPTION>

Year ended June 30,
2000 1999 1998
-------------------------------------------------------------------

Operations
<S> <C> <C> <C>
Net investment income $ 124,359 $ 147,459 $ 165,315
Realized gain (loss) on investments (7,296) (498) 5,398
Unrealized (depreciation)
on investments (44,667) (55,087) (3,218)
-------------------------------------------------------------------
Net increase in net assets resulting from operations 72,396 91,874 167,495
-------------------------------------------------------------------

Distributions to certificateholders
Investment income 123,110 142,757 164,022
Principal 245,556 72,801 245,210

Redemptions
Interest 1,395 5,309 2,095
Principal 83,326 269,066 172,685
-------------------------------------------------------------------
Total distributions and redemptions 453,387 489,933 584,012
-------------------------------------------------------------------

Total (decrease) (380,991) (398,059) (416,517)

Net assets
Beginning of year 2,286,827 2,684,886 3,101,403
-------------------------------------------------------------------
End of year (including undistributed net investment income of
$56,055, $56,201 and $56,808, respectively) $ 1,905,836 $ 2,286,827 $ 2,684,886
===================================================================
</TABLE>

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 6

Financial Highlights

Selected data for a unit of the Trust outstanding:*
<TABLE>
<CAPTION>

Year ended June 30,
2000 1999 1998 1997 1996
-------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year** $ 784.23 $ 826.12 $ 896.10 $ 895.07 $ 906.89
-------------------------------------------------------------------------------------------

Interest income 45.82 50.23 51.64 54.95 55.93
Expenses (2.35) (2.40) (2.38) (2.20) (2.06)
-------------------------------------------------------------------------------------------
Net investment income 43.47 47.83 49.26 52.75 53.87
-------------------------------------------------------------------------------------------
Net gain or loss on investments (1) (18.91) (18.09) 3.32 2.82 (8.16)
-------------------------------------------------------------------------------------------
Total from investment operations 24.56 29.74 52.58 55.57 45.71
-------------------------------------------------------------------------------------------

Less distributions
to Certificateholders
Income 43.03 46.30 48.87 50.52 56.85
Principal 85.83 23.61 73.07 1.65 -
for Redemptions
Interest .49 1.72 0.62 2.37 0.68
-------------------------------------------------------------------------------------------
Total distributions 129.35 71.63 122.56 54.54 57.53
-------------------------------------------------------------------------------------------
Net asset value, end of year** $ 679.44 $ 784.23 $ 826.12 $ 896.10 $ 895.07
===========================================================================================
</TABLE>

(1) Net gain or loss on investments is a result of changes in outstanding units
since July 1, 1999, 1998, 1997, 1996 and 1995, respectively, and the dates
of net gain and loss on investments.

* Unless otherwise stated, based upon average units outstanding during the
year of 2,861 ([2,916 + 2,805]/2) for 2000, 3,083 ([3,250 + 2,916]/2) for
1999, 3,356 ([3,461 + 3,250]/2) for 1998, 3,611 ([3,760 + 3,461]/2) for 1997
and of 3,880 ([4,000 + 3,760]/2) for 1996.

** Based upon actual units outstanding.

The accompanying notes form an integral part of the financial statements.

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 6

Notes to Financial Statements

June 30, 2000

1. Organization

Insured Municipal Securities Trust, New Jersey Navigator Insured Series 6 (the
"Trust") was organized on November 14, 1991 by Bear, Stearns & Co. Inc. and
Gruntal & Co., LLC under the laws of the State of New York by a Trust Indenture
and Agreement, and is registered under the Investment Company Act of 1940. The
Trust was formed to preserve capital and to provide interest income.

2. Summary of Significant Accounting Policies

Interest Income

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 6

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Security Valuation

3. Income Taxes

4. Trust Administration

The Trust Indenture and Agreement provides for interest distributions as often
as monthly (depending upon the distribution plan elected by the
Certificateholders).

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 6

Notes to Financial Statements (continued)

4. Trust Administration (continued)

The Trust Indenture and Agreement also requires the Trust to redeem units
tendered. For the years ended June 30, 2000, 1999 and 1998, 111, 334 and 211
units were redeemed, respectively.

The Trust pays an annual fee for trustee services rendered by the Trustee that
ranges from $.37 to $1.07 per $1,000 of outstanding investment principal. In
addition, a minimum fee of $8.00 is paid to a service bureau for each portfolio
valuation. A maximum fee of $.25 per $1,000 of outstanding investment principal
is paid to the Sponsor. For the years ended June 30, 2000, 1999 and 1998, the
"Trustee's Fees" are comprised of Trustee fees of $2,017, $2,305 and $2,631 and
other expenses of $1,878, $2,168 and $2,229, respectively. The other expenses
include professional, printing and miscellaneous fees.

5. Net Assets

At June 30, 2000, the net assets of the Trust represented the interest of
Certificateholders as follows:
<TABLE>

<S> <C>
Original cost to Certificateholders $ 4,107,448
Less initial gross underwriting commission 201,265
--------------------
3,906,183

Accumulated cost of securities sold, matured or called (2,099,117)
Net unrealized appreciation 42,711
Undistributed net investment income 56,055
Undistributed proceeds from investments 4
--------------------
Total $ 1,905,836
====================
</TABLE>

<PAGE>

Insured Municipal Securities Trust
New Jersey Navigator Insured Series 6

Notes to Financial Statements (continued)

5. Net Assets (continued)

The original cost to Certificateholders, less the initial gross underwriting
commission, represents the aggregate initial public offering price net of the
applicable sales charge on 4,000 units of fractional undivided interest of the
Trust as of the date of deposit.

Undistributed net investment income includes accumulated accretion of original
issue discount of $31,774.

6. Concentration of Credit Risk

<PAGE>

Note: Part B of This Prospectus May Not Be Distributed
Unless Accompanied by Part A.

Please Read and Retain Both Parts
---------------------------------
of This Prospectus For Future Reference.
---------------------------------------

INSURED MUNICIPAL SECURITIES TRUST

Prospectus Part B

Dated: October 28, 2000

THE TRUST
---------

Organization. "Insured Municipal Securities Trust" (the
"Trust") consists of the "unit investment trust" designated as set forth in Part
A.* The Trust was created under the laws of the State of New York pursuant to
the Trust Indenture and Agreement** (collectively, the "Trust Agreement"), dated
the Date of Deposit, among Reich & Tang Distributors, Inc. the predecessor to
ING Funds Distributor, Inc. as Sponsor or, depending on the particular Trust,
Reich & Tang Distributors, Inc. and Gruntal & Co., L.L.C., as co-sponsors
(Gruntal & Co., L.L.C. has resigned as co-sponsor), Kenny S&P Evaluation
Services, a business unit of J.J. Kenny Company, Inc., a subsidiary of The
McGraw-Hill Companies, as Evaluator and The Chase Manhattan Bank, as Trustee.

On the Date of Deposit, the Sponsor deposited with the Trustee
long-term insured bonds, and/or delivery statements relating to contracts for
the purchase of certain such bonds (the "Bonds") and cash or an irrevocable
letter of credit issued by a major commercial bank in the amount required for
such purchases. Thereafter, the Trustee, in exchange for the Bonds so deposited,
delivered to the Sponsor the Certificates evidencing the ownership of all Units
of the Trust. The Trust consists of the Bonds described under "The Trust" in
Part A, the interest (including, where applicable, earned original issue
discount)on which, in the opinions of bond counsel to the respective issuers
given at the time of original delivery of the Bonds, is exempt from regular
Federal income tax under existing law.

Each "Unit" outstanding on the Evaluation Date represented an
undivided interest or pro rata share in the principal and interest of the Trust
in the ratio of one Unit to the principal amount of Bonds in the Trust on such
date as specified in Part A of this Prospectus. To the extent that any Units are
redeemed by the Trustee, the fractional undivided interest or pro rata share in
the Trust represented by each unredeemed Unit will increase, although the actual
interest in the Trust represented by such fraction will remain unchanged. Units
will remain outstanding until redeemed upon tender to the Trustee by
Certificateholders, which may include the Sponsor or the Underwriters, or until
the termination of the Trust Agreement.

------------------
* This Part B relates to the outstanding series of Insured Municipal
Securities Trust, Insured Municipal Securities Discount Trust, Insured
Municipal Securities New York Navigator Insured Trust, Insured
Municipal Securities New Jersey Navigator Insured Trust and/or Insured
Municipal Securities Pennsylvania Navigator Insured Trust, as reflected
in Part A attached hereto.

** References in this Prospectus to the Trust Agreement are qualified in
their entirety by the Trust Indenture and Agreement which is
incorporated herein.

NY/302306.3

<PAGE>

Objectives. The Trust, one of a series of similar but separate
unit investment trusts formed by the Sponsor, offers investors the opportunity
to participate in a portfolio of long-term insured tax-exempt bonds with a
greater diversification than they might be able to acquire themselves. The
objectives of the Trust are to preserve capital and to provide interest income
(including, where applicable, earned original issue discount) which, in the
opinions of bond counsel given at the time of original delivery of the Bonds, is
exempt from regular Federal income tax under existing law and exempt from state
and local income tax to the extent indicated herein when received by persons
subject to state and local taxation in a state in which the issuers of the Bonds
are located. Such interest income may, however, be subject to the corporate
alternative minimum taxes and to state and local taxes. (See "Description of
Portfolio" in Part A for a list of those Bonds which pay interest income subject
to Federal individual alternative minimum tax. See also "Tax Status".)
Consistent with such objectives, the Sponsor has obtained bond insurance
guaranteeing the scheduled payment of principal and interest on certain of the
Bonds and has purchased, as to the remainder of each Trust Portfolio, Bonds
which are already covered by insurance. (See "Insurance on the Bonds".) An
investor will realize taxable income upon maturity or early redemption of the
market discount bonds in a Trust portfolio and will realize, where applicable,
tax-exempt income to the extent of the earned portion of interest, including
original issue discount earned on the Bonds in a Trust portfolio. Investors
should be aware that there is no assurance the Trust's objectives will be
achieved as these objectives are dependent on the continuing ability of the
issuers of the Bonds to meet their interest and principal payment requirements,
on the abilities of the Insurance Companies to meet their obligations under the
policies of insurance issued on the Bonds, on the continuing satisfaction of the
conditions required for the exemption of interest thereon from regular Federal
income tax and on the market value of the Bonds, which can be affected by
fluctuations in interest rates and other factors.

Since disposition of Units prior to final liquidation of each
Trust may result in an investor receiving less than the amount paid for such
Units (see "Comparison of Public Offering Price, Sponsor's Repurchase Price and
Redemption Price"), the purchase of a Unit should be looked upon as a long-term
investment. Neither the Trust nor the Total Reinvestment Plan are designed to be
complete investment programs.

Portfolio. All of the Bonds in the Trust were rated "AAA" by
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies
("Standard & Poor's") at the time originally deposited in the Trust. (See
"Insurance on the Bonds.") The "AAA" rating was assigned to the Bonds by
Standard & Poor's because each Bond was insured by a municipal bond guaranty
insurance policy issued by a company whose claims-paying ability was rated
"AAA" by Standard & Poor's at that time. In the event of a downgrading of the
claims-paying ability of one of the insurers, as of the Evaluation Date, the
Bonds in the Trust which are insured by that company would no longer be rated
"AAA" by Standard & Poor's. The Units of Trusts containing the downgraded bonds
are no longer rated "AAA."

For information regarding (i) the number of issues in the
Trust, (ii) the range of fixed maturities of the Bonds, (iii) the number of
issues payable from the income of a specific project or authority and (iv) the
number of issues constituting general obligations of a government entity, see
"Information Regarding the Trust" and "Portfolio" in Part A of this Prospectus.

When selecting Bonds for a Trust, the following factors, among
others, were considered by the Sponsor: (i) the quality of the Bonds and whether
such Bonds, whether Sponsor-Insured or Pre-Insured, were rated "AAA" by Standard
& Poor's, (ii) the yield and price of the Bonds relative to other tax-exempt
securities of comparable quality and maturity, (iii) income to the
Certificateholders of the Trust, (iv) whether a bond was insured, or insurance
was available for the Bonds at a reasonable cost, (v) in connection with Bonds
for which bond insurance was obtained by the Sponsor, the quality of the Bonds
and whether they were rated, without regard to such bond insurance, "A" or
better by either Standard & Poor's or Moody's Investors Service, Inc.
("Moody's"), and (vi) the diversification of the Trust portfolio, as to purpose
of issue and location of issuer, taking into account the availability in the
market of issues which meet the Trust's quality, rating, yield and price
criteria. Subsequent to the Date of Deposit, a Bond may cease to be rated or its
rating may be reduced below that specified above. Neither

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event requires an elimination of such Bond from a Trust but may be considered in
the Sponsor's determination to direct the Trustee to dispose of the Bond. (See
"Portfolio Supervision".) For an interpretation of the bond ratings see
"Description of Bond Ratings".

Housing Bonds. Some of the aggregate principal amount of the
Bonds may consist of obligations of state and local housing authorities whose
revenues are primarily derived from mortgage loans to rental housing projects
for low to moderate income families. Since such obligations are usually not
general obligations of a particular state or municipality and are generally
payable primarily or solely from rents and other fees, adverse economic
developments including failure or inability to increase rentals, fluctuations of
interest rates, and increasing construction and operating costs may reduce
revenues available to pay existing obligations. See "Description of Portfolio"
in Part A for the amount of rental housing bonds contained therein.

Hospital Revenue Bonds. Some of the aggregate principal amount
of the Bonds may consist of hospital revenue bonds. Ratings of hospital bonds
are often initially based on feasibility studies which contain projections of
occupancy levels, revenues and expenses. Actual experience may vary considerably
from such projections. A hospital's gross receipts and net income will be
affected by future events and conditions including, among other things, demand
for hospital services and the ability of the hospital to provide them,
physicians' confidence in hospital management capability, economic developments
in the service area, competition, actions by insurers and governmental agencies
and the increased cost and possible unavailability of malpractice insurance.
Additionally, a major portion of hospital revenue typically is derived from
third-party payors and government programs such as Medicare and Medicaid. Both
private third-party payors and government programs have undertaken cost
containment measures designed to limit payments. Furthermore, government
programs are subject to statutory and regulatory changes, retroactive rate
adjustments, administrative rulings and government funding restrictions, all of
which may materially decrease the rate of program payments for health care
facilities. There can be no assurance that payments under governmental programs
will remain at levels comparable to present levels or will, in the future, be
sufficient to cover the costs allocable to patients participating in such
programs. In addition, there can be no assurance that a particular hospital or
other health care facility will continue to meet the requirements for
participation in such programs.

The health care delivery system is undergoing considerable
alteration and consolidation. Consistent with that trend, the ownership or
management of a hospital or health care facility may change, which could result
in (i) an early redemption of bonds, (ii) alteration of the facilities financed
by the Bonds or which secure the Bonds, (iii) a change in the tax exempt status
of the Bonds or (iv) an inability to produce revenues sufficient to make timely
payment of debt service on the Bonds. Future legislation or changes in the areas
noted above, among other things, would affect all hospitals to varying degrees
and, accordingly, any adverse change in these areas may affect the ability of
such issuers to make payment of principal and interest on such bonds. See
"Description of Portfolio" in Part A for the amount of hospital revenue bonds
contained therein.

Nuclear Power Facility Bonds. Certain Bonds may have been
issued in connection with the financing of nuclear generating facilities.
Electric utilities which own or operate nuclear power plants are exposed to
risks inherent in the nuclear industry. These risks include exposure to new
requirements resulting from extensive Federal and state regulatory oversight,
public controversy, decommissioning costs, and spent fuel and radioactive waste
disposal issues. While nuclear power construction risks are no longer of
paramount concern, the emerging issue is radioactive waste disposal. In
addition, nuclear plants typically require substantial capital additions and
modifications throughout their operating lives to meet safety, environmental,
operational and regulatory requirements and to replace and upgrade various plant
systems. The high degree of regulatory monitoring and controls imposed on
nuclear plants could cause a plant to be out of service or on limited service
for long periods. When a nuclear facility owned by an investor-owned utility or
a state or local municipality is out of service or operating on a limited
service basis, the utility operator or its owners may be liable for the recovery
of replacement power costs. Risks of substantial liability also arise from the
operation of nuclear facilities and from the use,

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handling, and possible radioactive emissions associated with nuclear fuel.
Insurance may not cover all types or amounts of loss which may be experienced in
connection with the ownership and operation of a nuclear plant and severe
financial consequences could result from a significant accident or occurrence.
The Nuclear Regulatory Commission has promulgated regulations mandating the
establishment of funded reserves to assure financial capability for the eventual
decommissioning of licensed nuclear facilities. These funds are to be accrued
from revenues in amounts currently estimated to be sufficient to pay for
decommissioning costs. The Sponsor is unable to predict whether any such actions
or whether any such proposals or litigation, if enacted or instituted, will have
an adverse impact on the revenues available to pay the debt service on the Bonds
in the portfolio issued to finance such nuclear projects. See "Description of
Portfolio" in Part A for the amount of bonds issued to finance nuclear
generating facilities contained therein.

Mortgage Subsidy Bonds. Certain Bonds may be "mortgage subsidy
bonds" which are obligations of which all or a significant portion of the
proceeds are to be used directly or indirectly for mortgages on owner-occupied
residences. Section 103A of the Internal Revenue Code of 1954 provided as a
general rule that interest on "mortgage subsidy bonds" will not be exempt from
Federal income tax. An exception is provided for certain "qualified mortgage
bonds." Qualified mortgage bonds are bonds that are used to finance
owner-occupied residences and that meet numerous statutory requirements. These
requirements include certain residency, ownership, purchase price and target
area requirements, ceiling amounts for state and local issuers, arbitrage
restrictions and (for bonds issued after December 31, 1984) certain information
reporting, certification, public hearing and policy statement requirements. In
the opinions of bond counsel to the issuing governmental authorities, interest
on all the Bonds in a Trust that might be deemed "mortgage subsidy bonds" will
be exempt from Federal income tax when issued. See "Description of Portfolio" in
Part A for the amount of mortgage subsidy Bonds contained therein.

Mortgage Revenue Bonds. Certain Bonds may be "mortgage revenue
bonds." Under the Internal Revenue Code of 1986, as amended (the "Code") (and
under similar provisions of the prior tax law) "mortgage revenue bonds" are
obligations the proceeds of which are used to finance owner-occupied residences
under programs which meet numerous statutory requirements relating to residency,
ownership, purchase price and target area requirements, ceiling amounts for
state and local issuers, arbitrage restrictions, and certain information
reporting certification, and public hearing requirements. There can be no
assurance that additional Federal legislation will not be introduced or that
existing legislation will not be further amended, revised, or enacted after
delivery of these Bonds or that certain required future actions will be taken by
the issuing governmental authorities, which action or failure to act could cause
interest on the Bonds to be subject to Federal income tax. If any portion of the
Bond proceeds is not committed for the purpose of the issue, Bonds in such
amount could be subject to earlier mandatory redemption at par, including issues
of Zero Coupon Bonds (see "Discount and Zero Coupon Bonds"). See "Description of
Portfolio" in Part A for the amount of mortgage revenue bonds contained therein.

Private Activity Bonds. The portfolio of the Trust may contain
other Bonds which are "private activity bonds" (often called Industrial Revenue
Bonds if issued prior to 1987) which would be primarily of two types: (i) Bonds
for a publicly owned facility which a private entity may have a right to use or
manage to some degree, such as an airport, seaport facility or water system and
(ii) facilities deemed owned or beneficially owned by a private entity but which
were financed with tax-exempt bonds of a public issuer, such as a manufacturing
facility or a pollution control facility. In the case of the first type, bonds
are generally payable from a designated source of revenues derived from the
facility and may further receive the benefit of the legal or moral obligation of
one or more political subdivisions or taxing jurisdictions. In most cases of
project financing of the first type, receipts or revenues of the issuer are
derived from the project or the operator or from the unexpended proceeds of the
bonds. Such revenues include user fees, service charges, rental and lease
payments, and mortgage and other loan payments.

The second type of issue will generally finance projects which
are owned by or for the benefit of, and are operated by, corporate entities.
Ordinarily, such private activity bonds are not general obligations of

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governmental entities and are not backed by the taxing power of such entities,
and are solely dependent upon the creditworthiness of the corporate user of the
project or corporate guarantor.

The private activity bonds in the Trust have generally been
issued under bond resolutions, agreements or trust indentures pursuant to which
the revenues and receipts payable under the issuer's arrangements with the users
or the corporate operator of a particular project have been assigned and pledged
to the holders of the private activity bonds. In certain cases, a mortgage on
the underlying project has been assigned to the holders of the private activity
bonds or a trustee as additional security. In addition, private activity bonds
are frequently directly guaranteed by the corporate operator of the project or
by another affiliated company. See "Description of Portfolio" in Part A for the
amount of private activity bonds contained therein.

Litigation. Litigation challenging the validity under state
constitutions of present systems of financing public education has been
initiated in a number of states. Decisions in some states have been reached
holding such school financing in violation of state constitutions. In addition,
legislation to effect changes in public school financing has been introduced in
a number of states. The Sponsor is unable to predict the outcome of the pending
litigation and legislation in this area and what effect, if any, resulting
changes in the sources of funds, including proceeds from property taxes applied
to the support of public schools, may have on the school bonds in a Trust.

To the Sponsor's knowledge, there was no litigation pending as
of the initial Date of Deposit with respect to any Bonds which might reasonably
be expected to have a material adverse effect on a Trust. Subsequent to the Date
of Deposit, litigation may be initiated on a variety of grounds with respect to
Bonds in a Trust. Such litigation, as, for example, suits challenging the
issuance of pollution control revenue bonds under recently-enacted environmental
protection statutes, may affect the validity of such Bonds or the tax-free
nature of the interest thereon. The Sponsor is unable to predict whether any
such litigation may be instituted or, if instituted, whether it might have a
material adverse effect on a Trust.

Other Factors. The Bonds in the Trust, despite their optional
redemption provisions which generally do not take effect until 10 years after
the original issuance dates of such bonds (often referred to as "ten year call
protection"), do contain provisions which require the issuer to redeem such
obligations at par from unused proceeds of the issue within a stated period. In
recent periods of declining interest rates there have been increased redemptions
of bonds, particularly housing bonds, pursuant to such redemption provisions. In
addition, the Bonds in the Trusts are also subject to mandatory redemption in
whole or in part at par at any time that voluntary or involuntary prepayments of
principal on the underlying collateral are made to the trustee for such bonds or
that the collateral is sold by the bond issuer. Prepayments of principal tend to
be greater in periods of declining interest rates; it is possible that such
prepayments could be sufficient to cause a bond to be redeemed substantially
prior to its stated maturity date, earliest call date or sinking fund redemption
date.

The Bonds may also be subject to other calls, which may be
permitted or required by events which cannot be predicted (such as destruction,
condemnation, or termination of a contract).

In 1976 the Federal bankruptcy laws were amended so that an
authorized municipal debtor could more easily seek Federal court protection to
assist in reorganizing its debts so long as certain requirements were met.
Historically, very few financially troubled municipalities have sought court
assistance for reorganizing their debts; notwithstanding, the Sponsor is unable
to predict to what extent financially troubled municipalities may seek court
assistance in reorganizing their debts in the future and, therefore, what
effect, if any, the applicable Federal bankruptcy law provisions will have on
the Trusts.

The Trust may also include "moral obligation" bonds. Under
statutes applicable to such bonds, if any issuer is unable to meet its
obligations, the repayment of such bonds becomes a moral commitment but not a

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legal obligation of the state or municipality in question. See "Description of
Portfolio" in Part A of this Prospectus for the amount of moral obligation bonds
contained therein.

Certain of the Bonds in the Trust are subject to redemption
prior to their stated maturity dates pursuant to sinking fund or call
provisions. A sinking fund is a reserve fund appropriated specifically toward
the retirement of a debt. A callable bond is one which is subject to redemption
or refunding prior to maturity at the option of the issuer. A refunding is a
method by which a bond is redeemed at or before maturity from the proceeds of a
new issue of bonds. In general, call provisions are more likely to be exercised
when the offering side evaluation of a bond is at a premium over par than when
it is at a discount from par. A listing of the sinking fund and call provisions,
if any, with respect to each of the Bonds is contained under "Portfolio".
Certificateholders will realize a gain or loss on the early redemption of such
Bonds, depending upon whether the price of such Bonds is at a discount from or
at a premium over par at the time Certificateholders purchase their Units.

Neither the Sponsor nor the Trustee shall be liable in any way
for any default, failure or defect in any of the Bonds. Because certain of the
Bonds from time to time may be redeemed or will mature in accordance with their
terms or may be sold under certain circumstances, no assurance can be given that
a Trust will retain its present size and composition for any length of time. The
proceeds from the sale of a Bond or the exercise of any redemption or call
provision will be distributed to Certificateholders on the next distribution
date, except to the extent such proceeds are applied to meet redemptions of
Units. (See "Trustee Redemption".)

Puerto Rico Bonds. Certain of the Bonds in the Trust may be
general obligations and/or revenue bonds of issuers located in Puerto Rico.
These Bonds will be affected by general economic conditions in Puerto Rico. The
economy of Puerto Rico is fully integrated with that of the mainland United
States. During fiscal 1999, approximately 87% of Puerto Rico's exports were to
the United States mainland, which was also the source of 60% of Puerto Rico's
imports. In fiscal 1999, Puerto Rico experienced a $9.6 billion positive
adjusted merchandise trade balance. The dominant sectors of the Puerto Rico
economy are manufacturing and services. Gross product in fiscal 1995 was $28.5
billion ($26.0 billion in 1992 prices) and gross product in fiscal 1999 was
$38.2 billion ($29.8 billion in 1992 prices). This represents an increase in
gross product of 34.4% from fiscal 1995 to 1999 (14.8% in 1992 prices).

Average employment increased from 1,051,000 in fiscal 1995, to
1,147,000 in fiscal 1999. Average unemployment decreased from 13.8% in fiscal
1995, to 12.5% in fiscal 1999, the lowest annual unemployment rate in more than
two decades. According to the Labor Department's Household Employment Survey,
during fiscal 1999, total employment increased 0.9% over fiscal 1998. Total
monthly employment averaged 1,147,000 in fiscal 1999, compared to 1,137,400 in
fiscal 1998. The seasonally adjusted unemployment rate for January 2000 was
11.9%. According to the Labor Department's Household Employment Survey, during
the first seven months of fiscal 2000, total employment increased 0.4% over the
same period in fiscal 1999. Total monthly employment averaged 1,138,600 during
the first seven months of fiscal 2000, compared to 1,134,400 in the same period
in fiscal 1999.

The Planning Board's gross product forecast for fiscal 2000, made in
October 1999, projected an increase of 2.7% over fiscal 1999 and an increase of
2.3% for fiscal 2001. The performance of the economy during fiscal 2000 and 2001
will be effected principally by the performance of the United States economy and
by the increase in oil prices and, to a lesser extent, by the level of interest
rates. Since Puerto Rico is heavily dependent on oil imports for its energy
needs, if the level of oil prices remains at its current high level, this may
adversely affect economic activity in Puerto Rico during the remainder of fiscal
2000 and during fiscal 2001.

Discount And Zero Coupon Bonds. Some of the Bonds in a Trust
may be original issue discount bonds. The original issue discount, which is the
difference between the initial purchase price of the Bonds and the face value,
is deemed to accrue on a daily basis and the accrued portion will be treated as
tax-exempt interest

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income for regular Federal income tax purposes. Upon sale or redemption, any
gain realized that is in excess of the earned portion of original issue discount
will generally be taxable as capital gain. (See "Tax Status".) The current value
of an original issue discount bond reflects the present value of its face amount
at maturity. The market value tends to increase more slowly in early years and
in greater increments as the Bonds approach maturity. Of these original issue
discount bonds, some of the aggregate principal amount of the Bonds in the Trust
may be Zero Coupon Bonds. (See "Description of Portfolio" in Part A.) Zero
Coupon Bonds do not provide for the payment of any current interest and provide
for payment at maturity at face value unless sooner sold or redeemed. The market
value of Zero Coupon Bonds is subject to greater fluctuations than coupon bonds
in response to changes in interest rates. Zero Coupon Bonds generally are
subject to redemption at compound accredit value based on par value at maturity.
Because the issuer is not obligated to make current interest payments, Zero
Coupon Bonds may be less likely to be redeemed than coupon bonds issued at a
similar interest rate, although certain zero coupon housing bonds may be subject
to mandatory call provisions.

Some of the Bonds in the Trust may have been purchased at a
"market" discount from par value at maturity. This is because the coupon
interest rates on the discount bonds at the time they were purchased and
deposited in each Trust were lower than the current market interest rates for
newly issued bonds of comparable rating and type. At the time of issuance, the
discount Bonds were for the most part issued at then current coupon interest
rates. The current yields (coupon interest income as a percentage of market
price) of discount bonds will be lower than the current yields of comparably
rated bonds of similar type newly issued at current interest rates because
discount bonds tend to increase in market value as they approach maturity and
the full principal amount becomes payable. Gain on the disposition of a Bond
purchased at a market discount generally will be treated as ordinary income,
rather than capital gain, to the extent of accrued market discount. A discount
bond held to maturity will have a larger portion of its total return in the form
of capital gain and ordinary income and less in the form of tax-exempt interest
income than a comparable bond newly issued at current market rates. Under the
provisions of the Internal Revenue Code in effect on the date of this
Prospectus, any income attributable to market discount will be taxable but will
not be realized until maturity, redemption or sale of the Bonds or Units.
Discount Bonds with a large term to maturity tend to have a higher current yield
and a lower current market value than otherwise comparable bonds with a shorter
term to maturity. If interest rates rise, the value of discount bonds will
decrease; and if interest rates decline, the value of discount bonds will
increase. The discount does not necessarily indicate a lack of market confidence
in the issuer.

Insurance On The Bonds. Each of the Bonds in the Trust is
insured by a municipal bond guaranty insurance policy obtained by either the
Sponsor with respect to Bonds which were not insured prior to their deposit in
the Trust ("Sponsor-Insured Bonds") or the issuer, underwriter or prior owner of
the Bonds ("Pre-Insured Bonds"), and issued by one of the insurance companies
described under "Insurance on the Bonds" in Part B (the "Insurance Companies").
The insurance policies are non-cancelable and will continue in force so long as
the Bonds are outstanding and the insurers remain in business. The insurance
policies guarantee the timely payment of principal and interest on the Bonds but
do not guarantee the market value of the Bonds or the value of the Units. No
representation is made herein as to any Bond insurer's ability to meet its
obligations under a policy of insurance relating to any of the Bonds. An
insurance company that is required to pay interest and/or principal in respect
of any Bond will succeed and be subrogated to the Trustee's right to collect
such interest and/or principal from the issuer and to other related rights of
the Trustee with respect to any such Bond.

Such insurance covers the scheduled payment of principal
thereof and interest thereon when such amounts shall become due for payment but
shall not have been paid by the issuer or any other insurer thereof. The
insurance, unless obtained by MBIA Insurance Corporation ("MBIA Corp."), will
also cover any accelerated payments of principal and any increase in interest
payments or premiums, if any, payable upon mandatory redemption of the Bonds if
interest on any Bonds is ultimately deemed to be subject to regular Federal
income tax. Insurance obtained from MBIA Corp. only guarantees the full and
complete payments required to be made by or on behalf of an issuer of small
industrial revenue bonds and pollution control revenue bonds if there occurs an
event

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which results in the loss of tax-exempt status of the interest on such Bonds,
including principal, interest or premiums payments, if any, as and when
required. To the extent, therefore, that Bonds are only covered by insurance
obtained from MBIA Corp., such Bonds will not be covered for the full and
complete payments required to be made by or on behalf of an issuer of other than
small industrial revenue bonds or pollution control revenue bonds if there
occurs an event which results in the loss of tax-exempt status of the interest
on such Bonds. None of the insurance will cover accelerated payments of
principal or penalty interest or premiums unrelated to taxability of interest on
the Bonds. The insurance relates only to the prompt payment of principal of and
interest on the securities in the portfolios, and does not remove market risks
nor does it guarantee the market value of Units in the Trusts. The terms of the
insurance are more fully described herein. No representation is made herein as
to any Bond insurer's ability to meet its obligations under a policy of
insurance relating to any of the Pre-Insured Bonds. In addition, investors
should be aware that subsequent to the Date of Deposit the rating of the
claims-paying ability of the insurer of an underlying Pre-Insured Bond may be
down-graded.

Navigator Insured Trusts

Sponsor-Insured Bonds. Each of the Bonds in the Navigator
Trusts is insured by a financial guaranty insurance policy obtained by the
Sponsor (the "Navigator Sponsor-Insured Bonds") from MBIA Corp. covering
regularly scheduled payments of principal thereof and interest thereon when such
amounts become due for payment but have not been paid. Such amounts shall be
reduced by any amounts received by the holders or the owners of the Bonds from
any trustee for the Bond issuers, any other Bond insurers or any other source
other than MBIA Corp. MBIA Corp. has issued such policy or policies covering
each of the Bonds in the Navigator Trusts and each such policy will remain in
force until the payment in full of such Bonds, whether or not such Bonds
continue to be held in the Navigator Trusts. The insurer's policies relating to
small industrial development bonds and pollution control revenue bonds also
guarantee any accelerated payments required to be made by or on behalf of an
issuer of Bonds pursuant to the terms of the Bonds if there occurs an event
which results in the loss of the tax-exempt status of the interest on such
Bonds, including principal, interest or premium payments, if any, as and when
required. Such insurance does not cover for any accelerated payments required to
be made by or on behalf of an issuer of other than small industrial revenue
bonds or pollution control revenue bonds if there occurs an event which results
in the loss of the tax exempt status of the interest on such Bonds nor will the
insurance cover accelerated payments of principal or penalty interest or
premiums unrelated to taxability of interest on any of the Bonds, including
pollution control revenue bonds or small industrial development bonds. In the
event of such an acceleration, the payments guaranteed by MBIA Corp. shall be
made in such amounts and at such times as such payments would have been made
absent any such acceleration. The insurance relates only to the prompt payment
of principal of and interest on the securities in the Navigator Portfolios and
does not remove market risk nor does it guarantee the market value of Units in
the Navigator Trusts. The terms of the insurance are more fully described
herein. For discussion of the effect of an occurrence of non-payment of
principal or interest on any Bonds in the Navigator Trusts see "Portfolio
Supervision" in Part B. No representation is made herein as to any bond
insurer's ability to meet its obligations under a policy of insurance relating
to any of the Bonds in the Navigator Trusts. In addition, investors should be
aware that subsequent to the Date of Deposit the rating of the claims-paying
ability of MBIA Corp. may be downgraded, which may result in a downgrading of
the rating of the Units in the Navigator Trusts. The premiums for the Navigator
Sponsor-Insured Bonds are obligations of the Sponsor. Additionally, some of the
Bonds in the Navigator Trusts may be Pre-Insured Bonds (as described below). The
premium for the Pre-Insured Bonds is an obligation of the issuers, underwriters
or prior owners of those Bonds. The insurance policy or policies relating to the
Navigator Sponsor-Insured Bonds provides that, to the extent that Bonds are both
Pre-Insured Bonds and Navigator Sponsor-Insured Bonds, coverage is effective
after a claim has been made upon the insurer of the Pre-Insured Bonds.

Upon notification from the trustee for any bond issuer or any
holder or owner of the Bonds that such trustee or paying agent has insufficient
funds to pay any principal or interest in full when due, MBIA Corp. will be
obligated to deposit funds promptly with Citibank, N.A., New York, New York, as
fiscal agent for MBIA

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Corp., sufficient to fully cover the deficit. If notice of nonpayment is
received on or after the due date, MBIA Corp. will provide for payment within
one business day following receipt of the notice. Upon payment by MBIA Corp. of
any Bonds, coupons, or interest payments, MBIA Corp. shall succeed to the rights
of the owner of such Bonds, coupons or interest payments with respect thereto.

Pre-Insured Bonds. Some of the Bonds in the Trusts that are
insured under policies obtained by the Bond issuers, underwriters or prior
owners of the Bonds ("Pre-Insured Bonds") are insured either by Ambac Assurance
Corporation ("Ambac"), Capital Guaranty Insurance Company ("Capital Guaranty"),
Connie Lee Insurance Company ("Connie Lee"), Financial Guaranty Insurance
Company ("Financial Guaranty"), Financial Security Assurance, Inc. ("Financial
Security") or Municipal Bond Insurance Association ("MBIA"), MBIA
Corp.(collectively the "Insurance Companies"). The cost of this insurance is
borne by the respective issuers, underwriters or prior owners of the Pre-Insured
Bonds. The percentage of each Portfolio insured by each insurance company, if
any, is set forth under "Insurance" in Part A of this Prospectus.

Ambac is a Wisconsin-domiciled stock insurance corporation,
regulated by the Office of the Commissioner of Insurance of the State of
Wisconsin and licensed to do business in 50 states, the District of Columbia,
the Territory of Guam and the Commonwealth of Puerto Rico, with admitted assets
of approximately $4,141,000,000 (unaudited), and statutory capital of
approximately $2,556,000,000 (unaudited) as of June 30, 2000. Statutory capital
consists of Ambac's policyholders' surplus and statutory contingency reserve.
Standard & Poor's Ratings Service, a Division of The McGraw-Hill Companies,
Moody's and Fitch IBCA, Inc. ("Fitch") have each assigned a triple-A financial
strength rating to Ambac.

Ambac has obtained a ruling from the Internal Revenue Service
to the effect that the insuring of an obligation by Ambac will not affect the
treatment for Federal income tax purposes of interest on such obligation and
that insurance proceeds representing maturing interest paid by Ambac under
policy provisions substantially identical to those contained in its municipal
bond insurance policy shall be treated for Federal income tax purposes in the
same manner as if such payments were made by the issuer of the Bonds.

Connie Lee Insurance Company ("Connie Lee"), a Wisconsin stock
insurance corporation, is a wholly-owned subsidiary of Connie Lee Holdings, Inc.
(formerly Construction Loan Insurance Corporation, and herein, "Holdings"). On
December 18, 1997, Ambac acquired all of the outstanding capital stock of
Holdings. Holdings and Connie Lee are now wholly-owned subsidiaries of Ambac.
Connie Lee, which guaranteed bonds issued primarily for college and hospital
infrastructure projects, is not expected to write any new business. Ambac and
Connie Lee have arrangements in place to assure that Connie Lee maintains a
level of capital sufficient to support Connie Lee's outstanding obligations and
for Connie Lee insured bonds to retain their triple-A rating.

As of June 30, 2000, the qualified statutory capital of Connie
Lee was $167,151,607 (unaudited) and total admitted assets were $240,307,485
(unaudited), as reported to the Commissioner of Insurance of the State of
Wisconsin.

As of the Evaluation Date, the claims-paying ability of Connie
Lee has been rated "AAA" by Standard & Poor's.

Financial Guaranty is a wholly-owned subsidiary of FGIC
Corporation (the "Corporation"), a Delaware holding company. The Corporation is
a subsidiary of General Electric Capital Corporation ("GE Capital"). Neither the
Corporation nor GE Capital is obligated to pay the debts of or the claims
against Financial Guaranty. Financial Guaranty is a monoline financial guaranty
insurer domiciled in the State of New York and subject to regulation by the
State of New York Insurance Department. As of June 30, 2000, the total capital
and surplus of Financial Guaranty was $1,293,000,000. Financial Guaranty
prepares financial statements on the basis of both statutory accounting
principles and generally accepted accounting principles. Copies of such
financial

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statements may be obtained by writing to Financial Guaranty at 115 Broadway, New
York, New York 10006, Attention: Communications Department (telephone number:
212-312-3000) or to the New York State Insurance Department at 25 Beaver Street,
New York, New York 10004-2319, Attention: Financial Condition Property/Casualty
Bureau (telephone number: 212-480-5187).

Financial Security is a wholly owned subsidiary of Financial
Security Assurance Holdings Ltd. ("Holdings"). Holdings is an indirect
subsidiary of Dexia S.A., a publicly held Belgian Corporation. Dexia S.A.,
through its bank subsidiaries is primarily engaged in the business of public
finance in France, Belgium and other European countries. No shareholder of
Holdings is obligated to pay any debt of Financial Security or any claim under
any insurance policy issued by Financial Security or to make any additional
contribution to the capital of Financial Security.

Under an intercompany agreement, liabilities on financial
guaranty insurance written or reinsured from third parties by Financial Security
or its domestic or Bermuda operating insurance company subsidiaries are
generally reinsured among such companies on an agreed upon percentage
substantially proportional to their respective capital, surplus and reserves,
subject to applicable statutory risk limitations. In addition, Financial
Security reinsures a portion of its liabilities under certain of its financial
guaranty insurance policies with other reinsurers under various treaties and on
a transaction-by-transaction basis. This reinsurance is used by Financial
Security as a risk management device and to comply with certain statutory and
rating agency requirements; it does not alter or limit Financial Security's
obligations under any financial guaranty insurance policy. As of June 30, 2000,
total shareholders equity of Financial Security and its wholly-owned
subsidiaries was (unaudited) $377,567,000 and total unearned premium reserves
was (unaudited) $574,825,000.

As of the Evaluation Date, Financial Security's insurance
financial strength has been rated "Aaa" by Moody's Investors Service, Inc. and
"AAA" by Fitch Financial Security's insurer financial strength has been rated
"AAA" by Standard & Poor's Rating Services and Standard & Poor's (Australia)
Pty. Ltd., Financial Security's claims-paying ability has been rated "AAA" by
Japan Rating and Investment Information, Inc.

MBIA Corp. is domiciled in the State of New York and licensed
to do business in and subject to regulation under the laws of all 50 states, the
District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands of the United States and the
Territory of Guam. MBIA Corp. has two European branches, one in the Republic of
France and the other in the Kingdom of Spain.

As of December 31, 1999, MBIA Corp. had admitted assets of
$7.0 billion (audited), total liabilities of $4.6 billion (audited), and total
capital and surplus of $2.4 billion (audited) prepared in accordance with
statutory accounting practices prescribed or permitted by insurance regulatory
authorities. As of June 30, 2000, MBIA Corp. had admitted assets of $7.3 billion
(unaudited), total liabilities of $4.9 billion (unaudited), and total capital
and surplus of $2.4 billion (unaudited).

As of the Evaluation Date, the claims-paying ability of MBIA
Corp. has been rated "AAA" by Standard & Poor's and Fitch, and Aaa by Moody's.

Insured Municipal Securities Trust

Sponsor-Insured Bonds. For those Bonds which are not covered
by an insurance policy obtained by the issuers of such Bonds, the Sponsor has
obtained bond insurance from either BIG, Financial Guaranty, MBIA or MBIA Corp.
in an effort to protect Certificateholders against nonpayment of principal and
interest in respect of such Bonds (the "Sponsor-Insured Bonds"). The bond
insurance on the Sponsor-Insured Bonds covers the Sponsor-Insured Bonds
deposited in a Trust at the time that they are physically delivered to the
Trustee (in the case of bearer bonds) or registered in the name of the Trustee
or its nominee or delivered along with an assignment (in the case of

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registered bonds) or registered in the name of the Trustee or its nominee (in
the case of bonds held in book-entry form). Accordingly, although contracts to
purchase Sponsor-Insured Bonds are not covered by the bond insurance obtained by
the Sponsor, such Bonds will be insured when they are deposited in the Trust.
When selecting Bonds for a Trust prior to obtaining insurance thereon, the
Sponsor considers the factors listed under "Portfolio", among others. The
insurers of the Sponsor-Insured Bonds apply their own standards in determining
whether to insure the Sponsor-Insured Bonds. To the extent that the standards of
such insurers are more restrictive than those of the Sponsor, the Sponsor's
investment criteria have been limited to the more restrictive standards.

Pre-Insured Bonds. The Bonds which are insured under policies
obtained by the Bond issuers are insured by Ambac, Financial Guaranty, Financial
Security, or MBIA Corp. (collectively, the "Insurance Companies") on the date
the Bonds were originally deposited in the Trust. The cost of this insurance is
borne by the respective issuers of the Pre-Insured Bonds. The percentage of the
Portfolio insured by each Insurance Company, if any, is set forth under
"Insurance" in Part A.

Ratings. As of the Date of Deposit for each of the respective
Trusts, Standard & Poor's had rated the claims-paying ability of each of the
above insurance companies "AAA" and had rated each of the Bonds in the Portfolio
"AAA" because the insurance companies had insured the Bonds. The assignment of
such "AAA" ratings was due to Standard & Poor's assessment of the
creditworthiness of the insurance companies and their ability to pay claims on
their policies of insurance. Subsequently, the rating of the claims-paying
ability of the insurer of an underlying Bond may cease to be rated or may be
downgraded which may result in a downgrading of the rating of the Units in the
Trust. For a discussion of the rating of the claims-paying ability of each of
the Bond insurers see "Insurance On The Bonds". For a list of Bond Ratings as of
the Evaluation Date see the "Portfolio" in Part A of this Prospectus. For a
discussion of the rating assigned to the Units of the Trusts, see "the Trust" in
Part A of this Prospectus. The percentage of each Trust portfolio insured by
each Insurance Company, if any, is set forth under "Insurance" in Part A.

The foregoing information relating to the above insurance
companies is from published documents and other public sources and/or
information provided by such insurance companies. No representation is made
herein as to the accuracy or adequacy of such information or as to the absence
of material adverse changes in such information subsequent to the dates thereof,
but the Sponsor is not aware that the information herein is inaccurate or
incomplete.

RISK CONSIDERATIONS
-------------------

Special Factors Affecting the Navigator Trusts. The Sponsor
believes the information summarized below describes some of the more significant
events relating to the Navigator Trusts. Sources of such information are the
official statements of issuers located in the states of the Navigator Trusts
which have been issued in connection with the debt offerings of such states, as
well as other publicly available documents and information. While the Sponsor
has not independently verified such information, it has no reason to believe it
is not correct in all material respects.

New York Navigator Trust

The information set forth below is derived from the Official Statements
and/or preliminary drafts of Official Statements prepared in connection with the
issuance of New York State and New York City municipal bonds. The Sponsors have
not independently verified this information.

Economic Trends. Over the long term, the State of New York (the
"State") and the City of New York (the "City") face serious potential economic
problems. The City accounts for approximately 41% of the State's

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population and personal income, and the City's financial health affects the
State in numerous ways. The State historically has been one of the wealthiest
states in the nation. For decades, however, the State has grown more slowly than
the nation as a whole, gradually eroding its relative economic affluence.
Statewide, urban centers have experienced significant changes involving
migration of the more affluent to the suburbs and an influx of generally less
affluent residents. Regionally, the older Northeast cities have suffered because
of the relative success that the South and the West have had in attracting
people and business. The City has also had to face greater competition as other
major cities have developed financial and business capabilities which make them
less dependent on the specialized services traditionally available almost
exclusively in the City.

The State has for many years had a very high State and local tax burden
relative to other states. The State and its localities have used these taxes to
develop and maintain their transportation networks, public schools and colleges,
public health systems, other social services and recreational facilities.
Despite these benefits, the burden of State and local taxation, in combination
with the many other causes of regional economic dislocation, has contributed to
the decisions of some businesses and individuals to relocate outside, or not
locate within, the State.

Notwithstanding the numerous initiatives that the State and its
localities may take to encourage economic growth and achieve balanced budgets,
reductions in Federal spending could materially and adversely affect the
financial condition and budget projections of the State and its localities.

New York City. The City, with a population of approximately 7.4
million, is an international center of business and culture. Its
non-manufacturing economy is broadly based, with the banking and securities,
life insurance, communications, publishing, fashion design, retailing and
construction industries accounting for a significant portion of the City's total
employment earnings. Additionally, the City is the nation's leading tourist
destination. Manufacturing activity in the City is conducted primarily in
apparel and printing.

For each of the 1981 through 1999 fiscal years, the City had an
operating surplus, before discretionary transfers, and achieved balanced
operating results as reported in accordance with then applicable generally
accepted accounting principles ("GAAP"), after discretionary transfers. The City
has been required to close substantial gaps between forecast revenues and
forecast expenditures in order to maintain balanced operating results. There can
be no assurance that the City will continue to maintain balanced operating
results as required by State law without tax or other revenue increases or
reductions in City services or entitlement programs, which could adversely
affect the City's economic base.

As required by law, the City prepares a four-year annual financial
plan, which is reviewed and revised on a quarterly basis and which includes the
City's capital, revenue and expense projections and outlines proposed gap-
closing programs for years with projected budget gaps. The City's current
financial plan projects a surplus in the 2000 and 2001 fiscal years, before
discretionary transfers, and budget gaps for each of the 2002, 2003 and 2004
fiscal years. This pattern of current year surplus operating results and
projected subsequent year budget gaps has been consistent through the entire
period since 1982, during which the City has achieved surplus operating results,
before discretionary transfers, for each fiscal year.

The City depends on aid from the State both to enable the City to
balance its budget and to meet its cash requirements. There can be no assurance
that there will not be reductions in State aid to the City from amounts
currently projected; that, in future years, State budgets will be adopted by the
April 1 statutory deadline, or interim appropriations will be enacted; or that
any such reductions or delays will not have adverse effects on the City's cash
flow or expenditures. In addition, the Federal budget negotiation process could
result in a reduction in or a delay in the receipt of Federal grants which could
have additional adverse effects on the City's cash flow or revenues.

The Mayor is responsible for preparing the City's financial plan,
including the City's current financial plan for the 2000 through 2004 fiscal
years (the "2000-2004 Financial Plan" or "Financial Plan"). The City's
projections set forth in the Financial Plan are based on various assumptions and
contingencies which are uncertain and which

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may not materialize. Such assumptions and contingencies include the condition of
the regional and local economies, the provision of State and Federal aid and the
impact on City revenues and expenditures of any future Federal or State policies
affecting the City.

Implementation of the Financial Plan is dependent upon the City's
ability to market its securities successfully. The City's program for financing
capital projects for fiscal years 2000 through 2004 contemplates the issuance of
$7.21 billion of general obligation bonds and $7.33 billion of bonds to be
issued by the New York City Transitional Finance Authority (the "Finance
Authority"). In addition, the Financial Plan anticipates access to approximately
$2.4 billion in financing capacity of TSASC, Inc. ("TSASC"), which will issue
debt secured by revenues derived from the settlement of litigation with tobacco
companies selling cigarettes in the United States. The Finance Authority and
TSASC were created to assist the City in financing its capital program while
keeping the City's indebtedness within the forecast level of the constitutional
restrictions on the amount of debt the City is authorized to incur. In addition,
the City issues revenue and tax anticipation notes to finance its seasonal
working capital requirements. The success of projected public sales of City, New
York City Municipal Water Finance Authority ("Water Authority"), Finance
Authority, TSASC and other bonds and notes will be subject to prevailing market
conditions. The City's planned capital and operating expenditures are dependent
upon the sale of its general obligation debt, as well as debt of the Water
Authority, Finance Authority and TSASC. Future developments concerning the City
and public discussion of such developments, as well as prevailing market
conditions, may affect the market for outstanding City general obligation bonds
and notes.

The City Comptroller and other agencies and public officials, from time
to time, issue reports and make public statements which, among other things,
state that projected revenues and expenditures may be different from those
forecast in the City's financial plans.

For the 1999 fiscal year, the City had an operating surplus, before
discretionary and other transfers, and achieved balanced operating results,
after discretionary and other transfers, in accordance with GAAP. The 1999
fiscal year is the nineteenth year that the City has achieved an operating
surplus, before discretionary and other transfers, and balanced operating
results, after discretionary and other transfers.

On June 15, 2000, the City released the Financial Plan for the 2000
through 2004 fiscal years, which relates to the City and certain entities that
receive funds from the City, and that reflects changes as a result of the City's
expense and capital budgets for fiscal year 2001, that were adopted on June 6,
2000. The Financial Plan is a modification to the financial plan submitted to
the Control Board on June 14, 1999 (the "June Financial Plan"), which was
subsequently modified in November 1999 and January and May 2000. The Financial
Plan projects revenues and expenditures for the 2000 and 2001 fiscal years
balanced in accordance with GAAP, and projects gaps of $2.6 billion, $2.7
billion and $2.7 billion for fiscal years 2002 through 2004, respectively, after
implementation of a gap closing program.

Changes since the June Financial Plan include: (i) an increase in
projected revenues of $1.9 billion, $1.2 billion, $1.1 billion, $1.3 billion and
$1.6 billion in fiscal years 2000 through 2004, respectively, reflecting
primarily increases in projected personal income, business, sales, real estate
transfer and mortgage recording tax revenues; (ii) a delay in the assumed
collection of $730 million of projected rent payments for the City's airports
from fiscal year 2001 through 2004 to fiscal years 2002 through 2005; (iii)
establishment of a labor reserve for merit pay wage increases for City employees
of $30 million, $325 million, $750 million, $800 million and $800 million in
fiscal years 2000 through 2004, respectively, contingent upon productivity
savings set forth in the gap-closing program; and (iv) increased costs and
revenue losses from State and Federal actions of $185 million, $392 million,
$454 million, $518 million and $587 million in fiscal years 2000 through 2004,
respectively, including a reduction in the sales tax on utilities approved by
the State Legislature; and (v) other net expenditure savings of $784 million in
fiscal year 2000, and net expenditure increases of $771 million, $897 million,
$1.2 billion and $888 million in fiscal years 2001 through 2004, respectively.
The changes in net expenditures include, among other things, pension fund
savings of $524 million and $284 million in fiscal years 2000 and 2001,
respectively, resulting

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primarily from a market value restart, increased net pension costs of $230
million, $348 million and $286 million in fiscal years 2002 through 2004,
respectively, reflecting recent pension benefit legislation, and increased
spending for education and other agencies. Increased pension costs reflect
certain pension benefit improvements, to which the City and its unions have
agreed, which are estimated at $279 million per year commencing in fiscal year
2001, pending the Governor signing enabling legislation and other actions. In
addition, various benefit enhancements for City and State employees, including a
cost of living adjustment in pension payments, which have been adopted by the
State legislature, are not reflected in the Financial Plan. These benefit
enhancements are expected to increase pension costs reflected in the City's
future financial plan modifications by $98 million, $236 million, $363 million
and $480 million in fiscal years 2001 through 2004, respectively, and by $586
million in fiscal year 2005 when the adjustment is fully implemented. The City
will consider revising the proposed tax reduction program and implementing a
planned expenditure reduction program to help offset these increased pension
costs.

The Financial Plan reflects a proposed discretionary transfer from
fiscal year 2000 to fiscal year 2001 primarily to pay debt service due in fiscal
year 2001 totaling $3.2 billion, a proposed discretionary transfer from fiscal
year 2001 to fiscal year 2002 to pay debt service due in fiscal year 2002
totaling $904 million and a proposed discretionary transfer from fiscal year
2002 to fiscal year 2003 to pay debt service in fiscal year 2003 totaling $345
million.

In addition, the Financial Plan sets forth gap-closing actions to
eliminate a previously projected gap for the 2001 fiscal year and to reduce
projected gaps for fiscal years 2002 through 2004. The gap-closing actions for
the 2000 through 2004 fiscal years include: (i) additional agency actions
totaling $337 million, $400 million, $210 million, $210 million and $210 million
for fiscal years 2000 through 2004, respectively; (ii) assumed additional
Federal and State actions of $75 million in each of fiscal years 2001 through
2004, which are subject to Federal and State approval; and (iii) proposed
productivity savings and reducing fringe benefits costs totaling $250 million,
$265 million, $280 million and $300 million in fiscal years 2001 through 2004,
respectively, to partly offset the costs of the proposed merit pay program which
is subject to collective bargaining negotiations. The Financial Plan also
reflects a proposed tax reduction program totaling $418 million, $735 million,
$877 million and $1.1 billion in fiscal years 2001 through 2004, respectively,
including elimination of the commercial rent tax over three years commencing
June 1, 2000 at a cost of $16 million in fiscal year 2001, increasing to $430
million in fiscal year 2004; a reduction and restructuring in the 14% personal
income tax surcharge on July 1, 2000 at a cost of $329 million in fiscal year
2001, increasing to $403 million in fiscal year 2004; the extension of current
tax reductions for owners of cooperative and condominium apartments at an annual
cost of approximately $200 million starting in fiscal year 2002; and repeal of
the $2 flat fee hotel occupancy tax effective December 1, 2000; and other tax
reduction proposals including elimination of the borough commercial
revitalization tax. Except for the elimination of the commercial rent tax, the
proposed tax reductions require State legislative approval. To date, only the
reduction and restructuring of the 14% personal income tax surcharge and the
reduction of the borough commercial revitalization program have been passed by
the State Legislature.

Wage increases for City employees are provided for in the Financial
Plan through a merit pay plan for two years after their collective bargaining
agreements expire in fiscal years 2000 and 2001, contingent upon productivity
savings. The Financial Plan does not make any provision for wage increases
thereafter. In addition, the economic and financial condition of the City may be
affected by various financial, social, economic and other factors which could
have a material effect on the City.

The Financial Plan is based on numerous assumptions, including the
condition of the City's and the region's economies and modest employment growth
and the concomitant receipt of economically sensitive tax revenues in the
amounts projected. The 2000-2004 Financial Plan is subject to various other
uncertainties and contingencies relating to, among other factors, the extent, if
any, to which wage increases for City employees exceed the annual wage costs
assumed for the 2000 through 2004 fiscal years; continuation of projected
interest earnings assumptions for pension fund assets and current assumptions
with respect to wages for City employees affecting the City's required pension
fund contributions; the willingness and ability of the State to provide the aid

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contemplated by the Financial Plan and to take various other actions to assist
the City; the ability of City agencies to maintain balanced budgets; the
willingness of the Federal government to provide the amount of Federal aid
contemplated in the Financial Plan; the impact on City revenues and expenditures
of Federal and State welfare reform and any future legislation affecting
Medicare or other entitlement programs; adoption of the City's budgets by the
City Council in substantially the forms submitted by the Mayor; the ability of
the City to implement cost reduction initiatives, and the success with which the
City controls expenditures; the impact of conditions in the real estate market
on real estate tax revenues; the City's ability to market its securities
successfully in the public credit markets; and unanticipated expenditures that
may be incurred as a result of the need to maintain the City's infrastructure.

Although the City has maintained balanced budgets in each of its last
nineteen fiscal years and is projected to achieve balanced operating results for
the 2000 and 2001 fiscal years, there can be no assurance that the gap-closing
actions proposed in the Financial Plan can be successfully implemented or that
the City will maintain a balanced budget in future years without additional
State aid, revenue increases or expenditure reductions. Additional tax increases
and reductions in essential City services could adversely affect the City's
economic base.

On July 16, 1998, Standard & Poor's revised its rating of City bonds
upward from BBB+ to A-. Moody's rating of City bonds was revised in February
1998 to A3 from Baa1. On March 8, 1999, Fitch revised its rating of City bonds
upward to A. Moody's, Standard & Poor's and Fitch currently rate the City's
outstanding general obligation bonds A3, A- and A, respectively.

New York State and its Authorities. The State ended the 1999-2000
fiscal year in balance on a cash basis, with a reported closing balance in the
General Fund of $1.17 billion. The State adopted the debt service portion of the
State budget for the 2000-01 fiscal year on March 30, 2000. The remainder of the
budget for the State's 2000-01 fiscal year was adopted by the State Legislature
on May 5, 2000, 35 days after the statutory deadline of April 1, 2000. Following
enactment of the budget, the State prepared a Financial Plan for the 2000-01
fiscal year which projects total General Fund disbursements of $38.9 billion, an
increase of 4.7 percent. Preliminary analysis by the State Division of the
Budget indicates that the State could face a projected 2001-02 budget gap of
approximately $2 billion. In a report released on June 7, 2000, the State
Comptroller estimated future State budget gaps of approximately $3.0 billion in
2001-02 and $4.9 billion in 2002-03, assuming certain one-time legislative
additions to the budget would be recurring.

In 2000-01, General Fund disbursements, including transfers to support
capital projects, debt service and other funds, are estimated at $38.92 billion,
an increase of $1.75 billion or 4.72 percent over 1999-2000. Projected spending
under the 2000-01 enacted budget is $992 million above the Governor's Executive
Budget recommendations, including 30-day amendments submitted January 31, 2000.

The 2000-01 Financial Plan projects closing balances in the General
Fund and other reserves of $3.2 billion, including $1.71 billion in the General
Fund. This closing balance is comprised of $675 million in reserves for
potential labor costs resulting from new collective bargaining agreements and
other spending commitments, $547 million in the Tax Stabilization Reserve Fund
(for use in case of unanticipated deficits), $150 million in the Contingency
Reserve Fund (which helps offset litigation risks), and $338 million in the
Community Projects Fund (which finances legislative initiatives). In addition to
the $1.71 billion balance in the General Fund, $1.2 billion is projected for
reserve in the STAR Special Revenue Fund and $250 million in the Debt Reduction
Reserve Fund.

Many complex political, social and economic forces influence the
State's economy and finances, which may in turn affect the State Financial Plan.
The 2000-01 Financial Plan is also necessarily based upon forecasts of national
and State economic activity. The Division of Budget believes that its
projections of receipts and disbursements relating to the 2000-01 Financial
Plan, and the assumptions on which they are based, are reasonable, however,
actual results could differ materially and adversely from these projections.

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Standard & Poor's rates the State's general obligation bonds A+, and
Moody's rates the State's general obligation bonds A2. On November 9, 1999,
Standard & Poor's revised its rating on the State's general obligation bonds
from A to A+.

Litigation. A number of court actions have been brought involving State
finances. The court actions in which the State is a defendant generally involve
State programs and miscellaneous tort, real property, and contract claims. While
the ultimate outcome and fiscal impact, if any, on the State of those
proceedings and claims are not currently predictable, adverse determinations in
certain of them might have a material adverse effect upon the State's ability to
carry out the State Financial Plan.

The City has estimated that its potential future liability on account
of outstanding claims against it as of June 30, 1999 amounted to approximately
$3.5 billion.

New Jersey Navigator Trust

State Finance
-------------

New Jersey is the ninth largest state in population and the
fifth smallest in land area. It has an average of 1,098 people per square mile,
and is the most densely populated of all the states. The State's economic base
is diversified, consisting of a variety of manufacturing, construction and
service industries, supplemented by rural areas with selective commercial
agriculture. Historically, New Jersey's average per capita income has been well
above the national average, and in 1998 the State ranked second among the states
in per capital personal income ($32,779).

The Trust is susceptible to political, economic or regulatory
factors affecting issuers of the New Jersey securities. The following
information provides only a brief summary of some of the complex factors
affecting the financial situation in New Jersey (the "State") and is derived
from sources that are generally available to investors and is believed to be
accurate. It is based in part on information obtained from various State and
local agencies in New Jersey. No independent verification has been made of any
of the following information.

The New Jersey Economic Policy Council, a statutory arm of the
New Jersey Department of Commerce and Economic Development, has reported in New
Jersey Economic Indicators, a monthly publication of the New Jersey Department
of Labor, Division of Labor Market and Demographic Research, that in 1988 and
1989 employment in New Jersey's manufacturing sector failed to benefit from the
export boom experienced by many Midwest states and the State's service sectors,
which had fueled the State's prosperity since 1982, lost momentum. In the
meantime, the prolonged fast growth in the State in the mid 1980s resulted in a
tight labor market situation, which has led to relatively high wages and housing
prices. This means that, while the incomes of New Jersey residents are
relatively high, the State's business sector has become more vulnerable to
competitive pressures.

The onset of the national recession (which officially began in
July 1990 according to the National Bureau of Economic Research) caused an
acceleration of New Jersey's job losses in construction and manufacturing. In
addition, the national recession caused an employment downturn in such
previously growing sectors as wholesale trade, retail trade, finance, utilities
and trucking and warehousing. Reflecting the downturn, the rate of unemployment
in the State rose from a low of 3.6% during the first quarter of 1989 to an
estimated 4.8% in July 1999 which is above the national average of 4.3% in July
1999. The early trends in year 2000, however, indicate that the number of
unemployed persons in New Jersey has dropped to its lowest level since mid-1989.

The economic outlook for 2000/2001 is for continued growth,
but at somewhat more moderate rates. Employment is expected to increase to a
limited extent reflecting a slowing national economy and shortages in skilled
technical specialties that will constrain job growth.

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The New Jersey outlook is based on expected national economic
performance and on recent state strategic policy actions aimed at infrastructure
improvements, effective education and training of the State's workforce and
maintaining a competitive business environment.

Debt Service
------------

The primary method for State financing of capital projects is
through the sale of the general obligation bonds of the State. These bonds are
backed by the full faith and credit of the State tax revenues and certain other
fees are pledged to meet the principal and interest payments and, if provided,
redemption premium payments, if any, required to repay the bonds. As of June 30,
2000, there was a total authorized bond indebtedness of approximately $11.24
billion, of which $3.79 billion was issued and outstanding, $6.3 billion was
retired (including bonds for which provisions for payment have been made through
the sale and issuance of refunding bonds) and $1.15 billion was unissued. For
Fiscal Year 2001, the appropriation for the debt service obligation on
outstanding projected indebtedness is $530.0 million. The state issued an
additional $428.39 million of its general obligation bonds pursuant to the
Refunding Bond Act of 1985 to refund the various general obligation bonds of the
State. Further on August 13, 1999, the State enacted the Statewide
Transportation and Local Bridge Bond Act of 1999, which authorizes the issuance
of $500.0 million of the State's general obligation bonds. The Statewide
Transportation and Local Bridge Act of 1999 was approved by voters on November
2, 1999.

New Jersey Budget and Appropriation System.
------------------------------------------

The State operates on a fiscal year beginning July 1 and
ending June 30. In 1997 New Jersey closed its fiscal year with a surplus of
$1.10 million, in 1998 New Jersey closed its fiscal year with a surplus of $1.25
billion and in 1999 New Jersey closed its fiscal year with a surplus of $1.26
billion. It is estimated that New Jersey will close its fiscal year 2000 with a
surplus of $1.17 billion and in 2001 with an estimated surplus of $870.2
million.

In order to provide additional revenues to balance future
budgets, to redistribute school aid and to contain real property taxes, on June
27, 1990, and July 12, 1990, Governor Florio signed into law legislation which
was estimated to raise approximately $2.8 billion in additional taxes
(consisting of $1.5 billion in sales and use taxes and $1.3 billion in income
taxes), the biggest tax hike in New Jersey history. There was no assurance that
receipts and collections of such taxes would meet such estimates.

The first part of the tax hike took effect on July 1, 1990,
with the increase in the State's sales and use tax rate from 6% to 7% and the
elimination of exemptions for certain products and services not previously
subject to the tax, such as telephone calls, paper products (which has since
been reinstated), soaps and detergents, janitorial services, alcoholic beverages
and cigarettes. At the time of enactment, it was projected that these taxes
would raise approximately $1.5 billion in additional revenue. Projections and
estimates and receipts from sales and use taxes, however, have been subject to
variance in recent fiscal years.

The second part of the tax hike took effect on January 1,
1991, in the form of an increased state income tax on individuals. At the time
of enactment, it was projected that this increase would raise approximately $1.3
billion in additional income taxes to fund a new school aid formula, a new
homestead rebate program and state assumption of welfare and social services
costs. Projections and estimates of receipts from income taxes, however,

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have also been subject to variance in recent fiscal years. Under the
legislation, income tax rates increased from their previous range of 2% to 3.5%
to a new range of 2% to 7%, with the higher rates applying to married couples
with incomes exceeding $70,000 who file joint returns, and to individuals filing
single returns with incomes of more than $35,000.

The Florio administration had contended that the income tax
package would help reduce local property tax increases by providing more state
aid to municipalities. Under the income tax legislation, the State would assume
approximately $289 million in social services costs that previously were paid by
counties and municipalities and funded by property taxes. In addition, under the
new formula for funding school aid, an extra $1.1 billion was proposed to be
sent by the State to school districts beginning in 1991, thus reducing the need
for property tax increases to support education programs.

Effective July 1, 1992, the State's sales and use tax rate
decreased from 7% to 6%. Effective January 1, 1994, an across-the-board 5%
reduction in the income tax rates was enacted and effective January 1, 1995,
further reductions ranging from 1% to 10% in income tax rates took effect.
Governor Whitman recently signed into law further reductions up to 15% for some
taxpayers effective January 1, 1996, thus reducing income taxes by up to 30% for
most taxpayers within three years.

On or about June 30, 1999, Governor Whitman signed the New
Jersey Legislature's $19.515 billion budget for Fiscal Year 2000. The balanced
budget, which includes anticipated revenue of $20.297 billion will thereby
result in an anticipated surplus of $2.782 billion. Whether the State can
achieve a balanced budget depends on its ability to enact and implement
expenditure reductions and to collect the estimated tax revenues. Projections
and estimates of receipts from taxes have been subject to variance in recent
years as a result of several factors, most recently a significant slowdown in
the national, regional and State economies, sluggish employment and
uncertainties in taxpayer behavior as a result of actual and proposed changes in
Federal tax laws.

On June 25, 1997, the New Jersey Economic Development
Authority (EDA) issued State Pension Funding Bonds (PFB) in the amount of $2.803
billion to finance a portion of the unfunded accrued liability of the
State-administered retirement systems. Under the authorizing legislation, the
bonds are limited obligations of the EDA and contain a statement that they are
not a legal debt or liability of the State. This is true even though the
principal and interest on the bonds will be paid through annual State
appropriations from the General Fund. Because the pension bonds are issued by an
authority, they are not General Obligation (G.O.) Bonds which are backed by the
"full faith and credit" of the State. G.O. bonds would require voter approval.

The PFB sold at an average interest rate of 7.64% after the
State purchased insurance against default. In concept, the proceeds of the PFB
are invested with the anticipation that the interest rate on investment earnings
will at least equal and, hopefully, exceed the interest rate cost of the bonds,
thereby lowering future State costs to fund the retirement systems. However
there is always a risk of uncertainty in investing funds.

The unfunded accrued liability of the several
State-administered retirement systems is $3.2 billion, according to the
actuarial valuations prepared by Fiscal Year 1998. Of that amount, $2.75 billion
is funded from the sale of the Pension Bonds. The balance, an estimated $450
million, was made available through the passage of companion legislation. That
law authorized a one-time accounting change in the value of the assets of the
retirement systems to full-market value as of the valuation reports applicable
to Fiscal Year 1998. This one-time revaluation from the current market-related
value of assets (which recognizes 20 percent of full-market) to full-market
value, immediately recognizes all capital gains up to the valuation date,
resulting in an increased value of the accumulated assets of the retirement
systems. The assets of the retirement systems at full-market value are
approximately $2.4 billion greater than they are when measured at their
market-related value.

Debt Ratings
------------

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<PAGE>

For many years, both Moody's Investors Service, Inc., and
Standard and Poor's Corporation have rated New Jersey general obligation bonds
"Aaa" and "AAA", respectively. Moody's Investors Service Inc., currently rates
New Jersey general obligation bonds "Aa1" and Standard and Poor's Ratings Group
currently rates New Jersey general obligation bonds "AA+".

On July 3, 1991, however, Standard and Poor's Corporation
downgraded New Jersey general obligation bonds to "AA+." On June 4, 1992
Standard & Poor's Corporation placed New Jersey general obligation bonds on
Credit Watch with negative implications, citing as its principal reason for its
caution the unexpected denial by the Federal Government of New Jersey's request
for $450 million in retroactive Medicaid payments for psychiatric hospitals.
These funds were critical to closing a $1 billion gap in the State's $15 billion
budget for fiscal year 1992 which ended on June 30, 1992. Under New Jersey state
law, the gap in the current budget must be closed before the new budget year
begins on July 1, 1992. Standard and Poor's Corporation suggested the State
could close fiscal 1992's budget gap and help fill fiscal 1993's hole by a
reversion of $700 million of pension contributions to its general fund under a
proposal to change the way the State calculates its pension liability.

On July 6, 1992, Standard and Poor's Corporation reaffirmed
its "AA+" rating for New Jersey general obligation bonds and removed the debt
from its Credit Watch list, although it stated that New Jersey's long-term
financial outlook is negative. Standard and Poor's Corporation was concerned
that the State was entering the 1993 fiscal year that began July 1, 1992, with a
slim $26 million surplus and remained concerned about whether the sagging State
economy would recover quickly enough to meet lawmakers' revenue projections. It
also remained concerned about the recent Federal ruling leaving in doubt how
much the State was due in retroactive Medicaid reimbursements and a ruling by a
Federal judge, now on appeal, of the State's method for paying for uninsured
hospital patients. However, on July 27, 1994, Standard and Poor's announced that
it was changing the State's outlook from negative to stable due to a brightening
of the State's prospects as a result of Governor Whitman's effort to trim
spending and cut taxes, coupled with an improving economy. Standard and Poor's
reaffirmed its "AA+" rating at the same time. There can be no assurance that
these ratings will continue or that particular bond issues may not be adversely
affected by changes in the State or local economic and political conditions.

On August 24, 1992, Moody's Investors Service, Inc. downgraded
New Jersey general obligation bonds to "Aa1", stating that the reduction
reflected a developing pattern of reliance on nonrecurring measures to achieve
budgetary balance, four years of financial operations marked by revenue
shortfalls and operating deficits, and the likelihood that serious financial
pressures would persist. On August 5, 1994, Moody's reaffirmed its "Aa1" rating,
citing on the positive side New Jersey's broad-based economy, high income
levels, history of maintaining a positive financial position and moderate
(although rising) debt ratios, and, on the negative side, a continued reliance
on one-time revenue and a dependence on pension-related savings to achieve
budgetary balance.

Capital Construction
--------------------

In addition to payment from bond proceeds, capital
construction can also be funded by appropriation of current revenues on a
pay-as-you go basis. The amount appropriated for the Fiscal Year 2001 for
Capital Construction is $1,168.3 million.

All appropriations for capital projects and all proposals for
State bond authorizations are subject to the review and recommendation of the
New Jersey Commission on Capital Budgeting and Planning. This permanent
commission was established in November, 1975, and is charged with the
preparation of the State Capital Improvement Plan, which contains proposals for
State spending for capital projects.

Lease Financing
---------------

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<PAGE>

The State has entered into a number of leases relating to the
financing of certain real property and equipment. The State leases the State Tax
Processing Building and the Richard J. Hughes Justice Complex in Trenton, both
from the Mercer County Improvement Authority (the "Authority"). On August 8,
1991 the Authority defeased outstanding bonds originally issued to finance
construction of the Richard J. Hughes Justice Complex through the issuance of
custody receipts (the "Custody Receipts") in the aggregate principal amount of
$95,760,000. The rental is sufficient to cover the debt service on the
Authority's Custody Receipts. Maximum annual rental payments on these leases,
including debt service, maintenance and payments in lieu of taxes, will be
approximately $11 million. The State's obligation to pay the rentals is subject
to appropriations being made by the State Legislature. The Custody Receipts will
mature in the years 1992 through 2018.

The State has also entered into a lease agreement, as lessee,
with the New Jersey Economic Development Authority, as lessor (the "EDA") to
lease (i) office buildings that are presently under construction and when
finished, are expected to house the New Jersey Division of Motor Vehicles, New
Jersey Network (the State's public television station) and a branch of the
United States Postal Service and (ii) a parking facility that is also under
construction, all of which were financed by the EDA's $114,391,434.70 initial
aggregate principal amount of Trenton Office Complex Revenue Bonds, 1980 Series
dated December 1, 1989. The State has also entered into a lease agreement, as
lessee, with the EDA to lease approximately 13 acres of real property and
certain infrastructure improvements thereon located in the City of Newark. This
property is in a geographical area generally bounded by McCarter Highway,
Mulberry Street and Saybrook Place and its purchase was financed by $21,510,000
aggregate principal amount of New Jersey Economic Development Authority Revenue
Bonds, New Jersey Performing Arts Center Site Acquisition Project, 1991 Series,
issued on August 20, 1991. The rental payments required to be made by the State
under such lease agreements are sufficient to cover debt service on such bonds
and other amounts payable to the EDA, including certain administrative expenses
of the EDA, and such rental payments are subject to annual appropriation by the
State Legislature. Maximum annual debt service on such bonds is approximately
$12,200,000. All of such bonds are still outstanding and mature in the years
1992 through 2012.

The state has also entered into a sublease with the EDA to
lease two parking lots, certain infrastructure improvements and related elements
located at Liberty State Park in the City of Jersey City. These parking lots and
improvements have been financed by $13,683,767.50 aggregate principal amount of
New Jersey Economic Development Authority Lease Rental Bonds, 1992 Series
(Liberty State Park Project) dated March 15, 1992. The rental payments that will
be required to be made by the State under such sublease agreement will be
sufficient to cover debt service on such bonds and other amounts payable to the
EDA, and such rental payments will be subject to appropriation by the State
Legislature.

In 1981, the Governor signed into law a bill creating the New
Jersey Building Authority (the "Building Authority") having the power to
construct facilities for leasing to the State (P.L. 1981, c. 120). The law
provides for leasing the State on a basis similar to that described above. The
Building Authority is authorized to have not more than $250 million of its notes
and bonds outstanding exclusive of refunded bonds and notes, provided that if
the Building Authority issues bonds or notes to finance the total cost of a
project based on estimates prepared by an independent consultant and the
consultant determines later that the costs of the project as initially approved
have increased, the Building Authority may issue additional bonds or notes to
finance the increased cost notwithstanding the $250 million limitation. In 1985
the Building Authority issued $129,635,000 of 1985 Series Bonds for five office
building projects in the Trenton area. During April 1987 the Building Authority
issued $103,760,000 of 1987 Series Bonds to refund the outstanding term bonds of
the 1985 issue. On April 6, 1989 the Building Authority issued $49,752,390.30 of
1989 Series Bonds for the renovation and historical restoration of portions of
the State Capital Complex in Trenton. On October 9, 1991 the Building Authority
issued $74,999,815.75 of State Building Revenue Bonds, 1991 Series (Garden State
Savings Bonds, 1991A), as capital appreciation bonds, under the Garden State
Savings Act of 1991, for the continued renovation and historical restoration of
portions of the State Capital Complex in Trenton and for the construction of a
structured parking facility. As of December 31, 1991 the total amount of
Building Authority Bonds outstanding was $238,687,206.05.

NY/302306.3
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<PAGE>

Outstanding Building Authority bonds are secured by annual rentals from the
State which are subject to annual appropriations by the State Legislature. The
State's combined annual rental payment for all leases with the Building
Authority will be (i) approximately $17.5 million per year for the years ending
June 15, 1992 through 1998, 2012 and 2013 and (ii) approximately $31.0 million
per year for the years ending June 15, 1999 through 2011.

Beginning in April 1984, the State, acting through the
Director of the Division of Purchase and Property, entered into a series of
lease purchase agreements which provide for the acquisition of equipment and
real property to be used by various departments and agencies of the State. To
date, the State has completed nine lease purchase agreements which have resulted
in issuance of Certificates of Participation totaling $541,085,000. A
Certificate of Participation evidences a proportionate interest of the owner
thereof in the lease payments to be made by the State under the terms of the
agreement. As of December 31, 1991, $305,400,000 Certificates of Participation
remain outstanding. The agreements relating to these transactions provide for
semiannual rental payments. The State's obligation to pay rentals due under
these leases is subject to annual appropriations being made by the State
Legislature. The final maturity of the outstanding Certificates of Participation
is December 15, 2013. The majority of proceeds from these transactions have been
or will be used to acquire equipment for the State and its agencies. The rentals
payable by the State will be made from monies appropriated by the State
Legislature. The State intends to continue to use this financing technique for a
substantial portion of its future equipment requirements.

"Moral Obligation" Financing
----------------------------

Aside from its general obligation bonds, the State's "moral
obligation" backs certain obligations issued by the New Jersey Housing and
Mortgage Finance Agency, the South Jersey Port Corporation and the Higher
Education Assistance Authority.

New Jersey Housing and Mortgage Finance Agency
----------------------------------------------

Neither the New Jersey Housing and Mortgage Finance Agency nor
its predecessors, the New Jersey Housing Finance Agency and the New Jersey
Mortgage Finance Agency, have had a deficiency in a debt service reserve fund,
which required the State to appropriate funds to meet its "moral obligation". It
is anticipated that this agency's revenues will continue to be sufficient to
cover debt service on its bonds.

Higher Education Assistance Authority
-------------------------------------

The Higher Education Student Assistance Authority (HESAA)
enacted in March 1999, the successor to the Higher Education Assistance
Authority has not had a revenue deficiency which required the State to
appropriate funds to meet its "moral obligation". It is anticipated the revenues
generated from HESAA will continue to be sufficient to pay debt service on its
bonds.

South Jersey Port Corporation
-----------------------------

The State provides the South Jersey Port Corporation (the
"Corporation") with funds to cover all debt service and property tax
requirements, when earned revenues are anticipated to be insufficient to cover
these obligations.

Below are listed State appropriations made since 1990, which
covered deficiencies in revenues of the Port Corporation, for debt service and
property tax payments.

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<PAGE>

<TABLE>

Appropriation for Appropriation for
Calendar Year Debt Service Property Tax
------------- ------------ ------------

<S> <C> <C>
1990 $1,281,793.58 $2,259,000.00
1991 2,362,850.67 1,850,000.00
1992 2,770,851.00 1,850,000.00
1993 3,644,095.00 4,875,000.00
1994 3,634,229.00 3,900,000.00
1995 3,647,700.00 - 0 -
1996 5,482,208.00 - 0 -
1997 5,507,242.00 - 0 -
1998 4,720,879.00 - 0 -
1999 5,250,412.89 - 0 -

</TABLE>

On April 2, 1987, the Corporation issued $31,580,000 aggregate
principal amount of Revenue Bonds, 1987 Series C (the "Series C Bonds"), a
portion of the proceeds of which will be used (i) on January 1, 1995, to refund
all of the Corporation's Marine Terminal Revenue Bonds, 1985 Refunding Series
and (ii) to pay interest on the Series C Bonds until January 1, 1995. Because of
the funded escrow, it is expected that there will not be any need for the State
to provide funds to pay debt service on the Series C Bonds through January 1,
1995. Also, in addition to the bonded indebtedness of the Corporation set forth
above, on April 2, 1987, the Corporation issued $10,295,000 Marine Terminal
Revenue Bonds, 1987 Series D to provide funds for financing a portion of the
costs of various capital improvements. On February 10, 1989, the Corporation
issued $4,085,000 Marine Terminal Revenue Bonds, 1989 Series E to provide funds
for financing a portion of the costs of various capital improvements and
additions to the Corporation's marine terminal facilities. On November 21, 1989,
the Corporation issued $3,655,000 Marine Terminal Revenue Bonds, 1989 Series F,
to provide for the costs of acquiring land in the city of Camden, for the
purpose of expanding the Corporation's marine terminal facilities.

MUNICIPAL FINANCE
-----------------

New Jersey's local finance system is regulated by various
statutes designed to assure that all local governments and their issuing
authorities remain on a sound financial basis. Regulatory and remedial statutes
are enforced by the Division of Local Government Services (the "Division") in
the State Department of Community Affairs.

Counties and Municipalities
---------------------------

The Local Budget Law (N.J.S.A. 40A:4-1 et seq.) imposes
specific budgetary procedures upon counties and municipalities ("local units").
Every local unit must adopt an operating budget which is balanced on a cash
basis, and items of revenue and appropriation must be examined by the Director
of the Division (the "Director"). The accounts of each local unit must be
independently audited by a registered municipal accountant. State law provides
that budgets must be submitted in a form promulgated by the Division and further
provides for limitations on estimates of tax collection and for reserves in the
event of any shortfalls in collections by the local unit. The Division reviews
all municipal and county annual budgets prior to adoption for compliance with
the Local Budget Law. The Director is empowered to require changes for
compliance with law as a condition of approval; to disapprove budgets not in
accordance with law; and to prepare the budget of a local unit, within the
limits of the adopted budget of the previous year with suitable adjustments for
legal compliance, if the local unit is unwilling to prepare a budget in
accordance with law. This process insures that every municipality and county
annually adopts a

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<PAGE>

budget balanced on a cash basis, within limitations on appropriations or tax
levies, respectively, and making adequate provision for principal of and
interest on indebtedness falling due in the fiscal year, deferred charges and
other statutory expenditure requirements. The Director also oversees changes to
local budgets after adoption as permitted by law, and enforces regulations
pertaining to execution of adopted budgets and financial administration. In
addition to the exercise of regulatory and oversight functions, the Division
offers expert technical assistance to local units in all aspects of financial
administration, including revenue collection and cash management procedures,
contracting procedures, debt management and administrative analysis.

The local Government Cap Law (N.J.S.A. 40A:4-45.1 et seq.)
(the "Cap Law") generally limits the year-to-year increase of the total
appropriations of any municipality and the tax levy of any county to either 5
percent or an index rate determined annually by the Director, whichever is less.
However, where the index percentage rate exceeds 5 percent, the Cap Law permits
the governing body of any municipality or county to approve the use of a higher
percentage rate up to the index rate. Further, where the index percentage rate
is less than 5 percent, the Cap Law also permits the governing body of any
municipality or county to approve the use of a higher percentage rate up to 5
percent. Regardless of the rate utilized, certain exceptions exist to the Cap
Law's limitation on increases in appropriations. The principal exceptions to
these limitations are municipal and county appropriations to pay debt service
requirements; to comply with certain other State or Federal mandates; amounts
approved by referendum; and, in the case of municipalities only, to fund the
preceding year's cash deficit or to reserve for shortfalls in tax collections.
The Cap Law, scheduled to expire on December 31, 1990, was re-enacted with
amendments and made a permanent part of the Municipal Finance System.

State law also regulates the issuance of debt by local units.
The Local Budget Law limits the amount of tax anticipation notes that may be
issued by local units and requires the repayment of such notes within three
months of the end of the fiscal year (six months in the case of the counties) in
which issued. The local Bond Law (N.J.S.A. 40A:2-1 et seq.) governs the issuance
of bonds and notes by the local units. No local unit is permitted to issue bonds
for the payment of current expenses (other than Fiscal Year Adjustment Bonds
described more fully below). Local units may not issue bonds to pay outstanding
bonds, except for refunding purposes, and then only with the approval of the
Local Finance Board. Local units may issue bond anticipation notes for temporary
periods not exceeding in the aggregate approximately ten years from the date of
first issue. The debt that any local unit may authorize is limited to a
percentage of its equalized valuation basis, which is the average of the
equalized value of all taxable real property and improvements within the
geographic boundaries of the local unit, as annually determined by the Director
of the Division of Taxation, for each of the three most recent years. In the
calculation of debt capacity, the local Bond Law and certain other statutes
permit the deduction of certain classes of debt ("statutory deductions") from
all authorized debt of the local unit ("gross capital debt") in computing
whether a local unit has exceeded its statutory debt limit. Statutory deductions
from gross capital debt consist of bonds or notes (i) authorized for school
purposes by a regional school district or by a municipality or a school district
with boundaries coextensive with such municipality to the extent permitted under
certain percentage limitations set forth in the School Bond Law (as hereinafter
defined); (ii) authorized for purposes which are self-liquidating, but only to
the extent permitted by the Local Bond Law; (iii) authorized by a public body
other than local unit the principal of and interest on which is guaranteed by
the local unit, but only to the extent permitted by law; (iv) that are bond
anticipation notes; (v) for which provision for payment has been made or (vi)
authorized for any other purpose for which a deduction is permitted by law.
Authorized net capital debt (gross capital debt minus statutory deductions) is
limited to 3.5 percent of the equalized valuation basis in the case of
municipalities and 2 percent of the equalized valuation basis in the case of
counties. The debt limit of a county or municipality, with certain exceptions,
may be exceeded only with the approval of the Local Finance Board.

Chapter 75 of the Pamphlet Laws of 1991 signed into law on
March 28, 1991 requires certain municipalities and permits all other
municipalities to adopt the State fiscal year in place of the existing calendar
fiscal year. Municipalities that change fiscal years must adopt a six month
transition budget for January to June. Since expenditures would be expected to
exceed revenues primarily because state aid for the calendar year would

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<PAGE>

not be received by the municipality until after the end of the transition year
budget, the act authorizes the issuance of Fiscal Year Adjustment Bonds to fund
the one time deficit for the six month transition budget. The act provides that
the deficit in the six month transition budget may be funded initially with bond
anticipation notes based on the estimated deficit in the six month transition
budget. Notes issued in anticipation of Fiscal Year Adjustment Bonds, including
renewals, can only be issued for up to one year unless the Local Finance Board
permits the municipality to renew them for a further period of time. The Local
Finance Board must confirm the actual deficit experienced by the municipality.
The municipality then may issue Fiscal Year Adjustment Bonds to finance the
deficit on a permanent basis. The purpose of the Act is to assist municipalities
that are heavily dependent on state aid and that have had to issue tax
anticipation notes to fund operating cash flow deficits each year. While the act
does not authorize counties to change their fiscal years, it does provide that
counties with cash flow deficits may issue Fiscal Year Adjustment Bonds as well.

State law authorizes State officials to supervise fiscal
administration in any municipality which is in default on its obligations; which
experiences severe tax collection problems for two successive years; which has a
deficit greater than 4 percent of its tax levy for two successive years; which
has failed to make payments due and owing to the State, county, school district
or special district for two consecutive years; which has an appropriation in its
annual budget for the liquidation of debt which exceeds 25 percent of its total
operating appropriations (except dedicated revenue appropriations) for the
previous budget year; or which has been subject to a judicial determination of
gross failure to comply with the Local Bond Law, the Local Budget Law or the
Local Fiscal Affairs Law which substantially jeopardizes its fiscal integrity.
State officials are authorized to continue such supervision for as long as any
of the conditions exist and until the municipality operates for a fiscal year
without incurring a cash deficit.

There are 567 municipalities and 21 counties in New Jersey.
During 1987, 1988, and 1989 no county exceeded its statutory debt limitations or
incurred a cash deficit in excess of 4 percent of its tax levy. The number of
municipalities which have a cash deficit greater than 4 percent of their tax
levies was five for 1987, zero for 1988, and six for 1989. The number of
municipalities, which exceeded statutory debt limits was six, five, and one as
of December 31, 1987, 1988, and 1989, respectively. No New Jersey municipality
or county has defaulted on the payment of interest or principal on any
outstanding debt obligation since the 1930's.

School Districts
----------------

All New Jersey school districts are coterminous with the
boundaries of one or more municipalities. They are characterized by the manner
in which the board of education, the governing body of the school district,
takes office. Type I school districts, most commonly found in cities, have a
board of education appointed by the mayor or the chief executive officer of the
municipality constituting the school district. In a Type II school district, the
board of education is elected by the voters of the district. Nearly all regional
and consolidated school districts are Type II school districts.

School Budgets
--------------

In every school district having a board of school estimate,
the board of school estimate examines the budget request and fixes the
appropriation amounts for the next year's operating budget after a public
hearing at which the taxpayers and other interested persons shall have an
opportunity to raise objections and to be heard with respect to the budget. This
board, whose composition is fixed by statute, certifies the budget to the
municipal governing bodies and to the local board of education. If either
disagrees, they must appeal to the State Commissioner of Education (the
"Commissioner") to request changes.

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<PAGE>

The Quality Education Act of 1990 (N.J.S.A. 18A:7D-1 et seq.)
limits the annual increase of a school district's net current expense budget.
The Commissioner certifies the allowable amount of increase for each school
district but may grant a higher level of increase in certain limited instances.
A school district may also submit a proposal to the voters to raise amounts
above the allowable amount of increase. If defeated, such a proposal is subject
to further review or appeal only if the Commissioner determines that additional
funds are required to provide a thorough and efficient education.

The Quality Education Act has been declared unconstitutional
by the New Jersey Supreme Court in 1994. The Supreme Court, while retaining
jurisdiction over this issue has stated that the State was required to address
the "special education needs" of 30 special needs districts for which funding
was required in addition to that necessary to achieve parity for richer
districts. The Supreme Court stated that it will not immediately intervene if
substantial equivalence of the special needs districts and wealthier districts
is achieved by the State for the 1997-1998 school year. The Court further
ordered the State to adopt a law assuring such substantial equivalence by
September 1996.

In May, 1997, in its further review of school funding, the
Supreme Court in Abbott by Abbott v. Burke, 149 N.J. 145 (1997) held that the
Comprehensive Educational Improvement and Financing Act (Act) which was enacted
by the legislature in response to previous state Supreme Court orders was
unconstitutional as it applied to special needs districts.

The Court held that the Act's funding levels were insufficient
and failed to address problems of dilapidated, unsafe and overcrowded
facilities. As interim relief pending legislative solution, the Court ordered
increased funding on parity with per-pupil expenditures for regular education,
required the State Commissioner of Education to ensure that increased funding be
put to optimal educational use, required the State, commencing September, 1997,
to provide special needs districts with money to enable such districts with
sufficient money to spend at the level of average budgeted per-pupil
expenditures in successful districts and remanded the case for a determination
of immediate implementation of programs to meet the needs of at-risk children.

As a result of this decision, the State's 1998 fiscal year
budget provided for an additional $246 million to special needs districts. Much
of this funding is attributable to the State Pension Funding Bonds sale.

In Type I or Type II school districts which have failed
monitoring over a period of time by the State because of continued educational
deficiencies, and are implementing an approved corrective action plan, the
Commissioner is required to determine the cost to the school district of the
implementation of those portions of the corrective action plan which are
directly responsive to the district's deficiencies as identified in the
monitoring process. Where appropriate, the Commissioner is required to
reallocate funds within the district's budget to support the corrective action
plan. The Commissioner is also required to determine the amount of additional
revenue needed to implement the corrective action plan, and to recertify the
budget for the district.

In State operated school districts the State District
Superintendent has the responsibility for the development of the budget subject
to appeal by the governing body of the municipality to the Commissioner and the
Director of the Division of Local Government Services in the State Department of
Community Affairs. Based upon his review, the Director is required to certify
the amount of revenues which can be raised locally to support the budget of the
State operated district. Any difference between the amount which the Director
certifies, and the total amount of local revenues required by the budget
approved by the Commissioner, is to be paid by the State in the fiscal year in
which the expenditures are made subject to the availability of appropriations.

School District Bonds
---------------------

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<PAGE>

School district bonds and temporary notes are issued in
conformity with N.J.S.A 18A:24-1 et seq. (the "School Bond Law"), which closely
parallels the Local Bond Law. Although school districts are exempted from the 5
percent down payment provision generally applied to bonds issued by
municipalities and counties, they are subject to debt limits (which vary
depending on the type of school system provided) and to State regulation of
their borrowing. The debt limitation on school district bonds depends upon the
classification of the school district but may be as high as 4 percent of the
average equalized valuation basis of the constituent municipality. In certain
cases involving school districts in cities with populations exceeding 100,000
the debt limit is 8 percent of the average equalized valuation basis of the
constituent municipality, and in cities with population in excess of 80,000 the
debt limit is 6 percent of the aforesaid average equalized valuation.

School bonds are authorized by (i) an ordinance adopted by the
governing body of a municipality within a Type I school district; (ii) adoption
of a proposal by resolution by the board of education of a Type II school
district having a board of school estimate; or (iii) adoption of a proposal by
resolution by the board of education and approval of the proposal by the legal
voters of any other Type II school district. If school bonds will exceed the
school district borrowing capacity, a school district (other than a regional
school district) may use the balance of the municipal borrowing capacity. If the
total amount of debt exceeds the school district's borrowing capacity and any
available remaining municipal borrowing capacity, the Commissioner and the Local
Finance Board must approve the proposed authorization before it is submitted to
the voters. All authorizations of debt in a Type II school district without a
board of school estimate require an approving referendum, except where, after
hearing, the Commissioner and the State Board of Education determine that the
issuance of such debt is necessary to meet the constitutional obligation to
provide a thorough and efficient system of public schools. When such obligations
are issued, they are issued by, and in the name of, the school district.

In Type I and II school districts with a board of school
estimate, that board examines the capital proposal of the board of education and
certifies the amount of bonds to be authorized. When it is necessary to exceed
the borrowing capacity of the municipality, the approval of a majority of the
legally qualified voters of the municipality is required, together with the
approval of the Commissioner and the Local Finance Board. When such bonds are
issued for a Type I school district, they are issued by the municipality and
identified as school bonds. When bonds are issued by a Type II school district
having a board of school estimate, they are issued by, and in the name of, the
school district.

All authorizations of debt must be reported to the Division of
Local Government Services by a supplemental debt statement prior to final
approval.

School District Lease Purchase Financings
-----------------------------------------

In 1982, school districts were given an alternative to the
traditional method of bond financing capital improvements pursuant to N.J.S.A.
18A:20-4.2(f) (the "Lease Purchase Law"). The Lease Purchase Law permits school
districts to acquire a site and school building through a lease purchase
agreement with a private lessor corporation. For Type II school districts, the
lease purchase agreement does not require voter approval. The rent payments
attributable to the lease purchase agreement are subject to annual appropriation
by the school district and are required, pursuant to N.J.A.C. 6:22A-1.2(h), to
be included in the annual current expense budget of the school district.
Furthermore, the rent payments attributable to the lease purchase agreement do
not constitute debt of the school district and therefore do not impact on the
school district's debt limitation. Lease purchase agreements in excess of five
years require the approval of the Commissioner and the Local Finance Board.

Qualified Bonds
---------------

In 1976, legislation was enacted (P.L. 1976, c. 38 and c. 39)
which provides for the issuance by municipalities and school districts of
"qualified bonds." Whenever a local board of education or the governing body

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of a municipality determines to issue bonds, it may file an application with the
Local Finance Board, and, in the case of a local board of education, the
Commissioner of Education, to qualify bonds pursuant to P.L. 1976, c. 38 or c.
39. Upon approval of such an application and after receipt of a certificate
stating the name and address of the paying agent for such bonds, the maturity
schedule, interest rates and payment dates, the State Treasurer shall, in the
case of qualified bonds for school districts, withhold from certain State
revenues or other school aid payable to such municipality or school district and
in the case of qualified bonds for municipalities, withhold from the amount of
business personal property tax replacement revenues, gross receipts tax
revenues, municipal purposes tax assistance fund distributions, State urban aid,
State revenue sharing, and any other funds appropriated as State aid and not
otherwise dedicated to specific municipal programs, payable to such
municipalities, an amount sufficient to cover debt service on such bonds. These
"qualified bonds" are not direct, guaranteed or moral obligations of the State,
and debt service on such bonds will be provided the State only if the above
mentioned appropriations are made by the State. As of June 30, 1999, the
aggregate amount of school district and municipal qualified bonds outstanding is
$290,848,900 and $864,078,164 respectively.

New Jersey School Bond Reserve Act
----------------------------------

The New Jersey School Bond Reserve Act (N.J.S.A. 18A:56-17 et
seq.) establishes a school bond reserve within the constitutionally dedicated
Fund for the Support of Free Public Schools. Under this law the reserve is
maintained at an amount equal to 1.5 percent of the aggregate outstanding bonded
indebtedness of counties, municipalities or school districts for school purposes
(exclusive of bonds whose debt service is provided by State appropriations), but
not in excess of monies available in such Fund. If a municipality, county or
school district is unable to meet payment of the principal of or interest on any
of its school bonds, the trustee of the school bond reserve will purchase such
bonds at the face amount thereof or pay the holders thereof the interest due or
to become due. On June 30, 1991, the book value of the Fund's assets aggregated
$59,352,429 and the reserve, computed as of June 30, 1991, amounted to
$19,668,349. There has never been an occasion to call upon this Fund.

Local Financing Authorities
---------------------------

The Local Authorities Fiscal Control Law (N.J.S.A. 40A:5A-1 et
seq.) provides for State supervision of the fiscal operations and debt issuance
practices of independent local authorities and special taxing districts by the
State Department of Community Affairs. The Local Authorities Fiscal Control Law
applies to all autonomous public bodies created by counties or municipalities,
which are empowered to issue bonds, to impose facility or service charges, or to
levy taxes in their districts. This encompasses most autonomous local
authorities (sewerage, municipal utilities, parking, pollution control,
improvement, etc.) and special taxing districts (fire, water, etc.). Authorities
which are subject to differing State or Federal financial restrictions are
exempted, but only to the extent of that difference.

Financial control responsibilities over local authorities and
special districts are assigned to the Local Finance Board and the Director of
the Division of Local Government Services. The Local Finance Board exercises
approval power over the creation of new authorities and special districts as
well as their dissolution. The Local Finance Board also reviews, conducts public
hearings and issues findings and recommendations on any proposed project
financing of an authority or district, and on any proposed financing agreement
between a municipality or county and an authority or special district. The Local
Finance Board prescribes minimum audit requirements to be followed by
authorities and special districts in the conduct of their annual audits. The
Director reviews and approves annual budgets of authorities and special
districts.

LITIGATION
----------

The State is a party in numerous legal proceedings pertaining
to matters incidental to the performance of routine governmental operations.
Such litigation includes, but is not limited to, claims asserted

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against the State arising from alleged torts, alleged breaches of contracts,
condemnation proceedings and other alleged violations of State and Federal laws.
Included in the State's outstanding litigation are cases which challenge the
following: the funding of teacher's pension funds; the hospital assessment
authorized by the Health Care Reform Act of 1992; the State's role in a consent
order concerning the construction of resource facility in Passaic County; the
State's actions regarding alleged chromium contamination of State-owned property
in Hudson County; the constitutionality of annual A-901 hazardous and solid
waste licensure renewal fees collected by the Department of Environmental
Protection and Energy; the State's funding formula that attempts to close the
spending gap between poor urban school districts and wealthy suburban districts;
the use by the State of assessments on certain insurances to retire debt of the
Market Transition Fund; the manner in which mental health services are provided
to inmates with serious mental disorders who are confined within the facilities
of the Department of Corrections; the spousal impoverishment provisions of the
Medicare Catastrophic Coverage Act; Medicaid hospital reimbursements since
February 1995; and the efforts to revitalize Atlantic City through the design
and construction of a highway and tunnel. Adverse judgments in these and other
matters could have the potential for either a significant loss of revenue or a
significant unanticipated expenditure by the State.

At any given, time, there are various numbers of claims and
cases pending against the State, State agencies and employees seeking recovery
of monetary damages that are primarily paid out of the fund created pursuant to
the New Jersey Tort Claims Act. In addition at any given time, there are various
numbers of contract claims against the State and State agencies seeking recovery
of monetary damages. The state is unable to estimate its exposure for these
claims.

Tax Status
----------

The Internal Revenue Service Restructuring and Reform Act of
1998 (the "1998 Tax Act") provides that for taxpayers other than corporations,
net capital gain (which is defined as net long-term capital gain over net
short-term capital loss for the taxable year) realized from property (with
certain exclusions) is subject to a maximum marginal stated tax rate of 20% (10%
in the case of certain taxpayers in the lowest tax bracket). Capital gain or
loss is long-term if the holding period for the asset is more than one year, and
is short term if the holding period of the asset is one year or less. The date
on which a Unit is acquired (i.e., the "trade date") is excluded for purposes
for determining the holding period of the Unit. The legislation is generally
effective retroactively for amounts properly taken into account on or after
January 1, 1998. Capital gains realized from assets held for one year or less
are taxed at the same rates as original income. See the Prospectus for a
discussion of the Federal Tax status of income earned on New Jersey Navigator
Trust.

PUBLIC OFFERING
---------------

Offering Price. The secondary market Public Offering Price per
Unit is computed by adding to the aggregate bid price of the Bonds in the Trust
divided by the number of Units outstanding, an amount based on the applicable
sales charge times the aggregate offering price of the Bonds (see "Public
Offering Price" in Part A for the applicable sales charge for the Trust). A
proportionate share of accrued interest on the Bonds to the expected date of
settlement for the Units is added to the Public Offering Price. Accrued interest
is the accumulated and unpaid interest on a Bond from the last day on which
interest was paid and is accounted for daily by the Trust at the initial daily
rate set forth under "Summary of Essential Information" in Part A of this
Prospectus. This daily rate is net of estimated fees and expenses. The Public
Offering Price can vary on a daily basis from the amount stated in Part A in
accordance with fluctuations in the prices of the Bonds and the price to be paid
by each investor will be computed as of the date the Units are purchased. The
aggregate bid price evaluation of the Bonds is determined in the manner set
forth under "Trustee Redemption."

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The Evaluator may obtain current bid or offering prices for
the Bonds from investment dealers or brokers (including the Sponsor) that
customarily deal in tax-exempt obligations or from any other reporting service
or source of information which the Evaluator deems appropriate.

The sales charge computed by the Evaluator is based upon the
number of years remaining to maturity of each Bond. Bonds will be deemed to
mature on their stated maturity dates unless bonds have been called for
redemption, funds have been placed in escrow to redeem them on an earlier call
date or are subject to a "mandatory put," in which case the maturity will be
deemed to be such other date.

The table below sets forth the various sales charges based on
the length of maturity of each Bond:

<TABLE>

As Percent of Public
Time to Maturity Offering Price
---------------- --------------

<S> <C>
less than 6 months 0%
6 mos. to 1 year 1%
over 1 yr. to 2 yrs. 1 1/2%
over 2 yrs. to 4 yrs. 2 1/2%
over 4 yrs. to 8 yrs. 3 1/2%
over 8 yrs. to 15 yrs. 4 1/2%
over 15 years 5 1/2%
</TABLE>

Accrued Interest. An amount of accrued interest which
represents accumulated unpaid or uncollected interest on a Bond from the last
day on which interest was paid thereon will be added to the Public Offering
Price and paid by the Certificateholder at the time Units are purchased. Since
the Trust normally receives the interest on Bonds twice a year and the interest
on the Bonds in the Trust is accrued on a daily basis (net of estimated fees and
expenses), the Trust will always have an amount of interest accrued but not
actually received and distributed to Certificateholders. A Certificateholder
will not recover his proportionate share of accrued interest until the Units are
sold or redeemed, or the Trust is terminated. At that time, the
Certificateholder will receive his proportionate share of the accrued interest
computed to the settlement date in the case of a sale or termination and to the
date of tender in the case of redemption.

Employee Discounts. Employees (and their immediate families)
of ING Funds Distributor, Inc. and its affiliates, and of any underwriter of a
Trust, pursuant to employee benefit arrangements, may purchase Units of a Trust
at a price equal to the offering side evaluation of the underlying securities in
a Trust during the initial offering period and at the bid side thereafter,
divided by the number of Units outstanding plus a reduced charge. Such
arrangements result in less selling effort and selling expenses than sales to
employee groups of other companies. Resales or transfers of Units purchased
under the employee benefit arrangements may only be made through the Sponsor's
secondary market, so long as it is being maintained.

Distribution Of Units. Certain banks and thrifts will make
Units of the Trust available to their customers on an agency basis. A portion of
the sales charge paid by their customers is retained by or remitted to the
banks. Under the Glass-Steagall Act, banks are prohibited from underwriting
Units; however, the Glass-Steagall Act does permit certain agency transactions
and the banking regulators have indicated that these particular agency
transactions are permitted under such Act. On November 16, 1999, President
Clinton signed the Gramm-Leach-Bliley Act, repealing certain provisions of the
Glass-Steagall Act which have restricted affiliation between banks and
securities firms and amending the Bank Holding Company Act thereby removing
restrictions on banks and insurance companies. The new legislation grants banks
new authority to conduct certain authorized activity through

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<PAGE>

financial institutions. State securities laws on this issue may differ from the
interpretations of Federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.

The Sponsor intends to qualify the Units for sale in
substantially all States through the Underwriters and through dealers who are
members of the National Association of Securities Dealers, Inc. Units may be
sold to dealers at prices which represent a concession of up to (a) 4% of the
Public Offering Price for the Insured Municipal Securities Trust Series, (b)
$25.00 per Unit for the Insured Municipal Securities Trust Discount Series or
(c) $33.00 per Unit, for the Insured Municipal Securities Navigator Trust,
subject to the Sponsor's right to change the dealers' concession from time to
time. In addition, for transactions of 1,000,000 Units or more, the Sponsor
intends to negotiate the applicable sales charge and such charge will be
disclosed to any such purchaser. Such Units may then be distributed to the
public by the dealers at the Public Offering Price then in effect. The Sponsor
reserves the right to reject, in whole or in part, any order for the purchase of
Units. The Sponsor reserves the right to change the discounts from time to time.

Sponsor's Profits. The Sponsor will receive a gross commission
on all Units sold in the secondary market equal to the applicable sales charge
on each transaction. (See "Offering Price".) In addition, in maintaining a
market for the Units (see "Sponsor Repurchase") the Sponsor will realize profits
or sustain losses in the amount of any difference between the price at which
they buy Units and the price at which they resell such Units.

Comparison of Public Offering Price, Sponsor's Repurchase
Price And Redemption Price. The secondary market Public Offering Price of Units
will be determined on the basis of the current bid prices of the Bonds in the
Trust, plus the applicable sales charge. The value at which Units may be resold
in the Secondary Market or redeemed will be determined on the basis of the
current bid prices of the Bonds without any sales charge. On the Evaluation
Date, the Public Offering Price and the Sponsor's initial Repurchase Price per
Unit (each based on the bid side evaluation of the Bonds in the Trust) each
exceeded the Redemption Price and the Sponsor's secondary market Repurchase
Price per Unit (based upon the current bid side evaluation of the Bonds in the
Trust) by the amounts shown under "Summary of Essential Information" in Part A
of this Prospectus. For this reason, among others (including fluctuations in the
market prices of such Bonds and the fact that the Public Offering Price includes
the applicable sales charge), the amount realized by a Certificateholder upon
any redemption of Sponsor repurchase of Units may be less than the price paid
for such Units.

ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN
-------------------------------------------------------

The rate of return on an investment in Units of the Trust is
measured in terms of "Estimated Current Return" and "Estimated Long Term
Return".

Estimated Long Term Return is calculated by: (i) computing the
yield to maturity or to an earlier call date (whichever results in a lower
yield) for each Bond in a Trust's portfolio in accordance with accepted bond
practices, which practices take into account not only the interest payable on
the Bond but also the amortization of premiums or accretion of discounts, if
any; (ii) calculating the average of the yields for the Bonds in each Trust's
portfolio by weighing each Bond's yield by the market value of the Bond and by
the amount of time remaining to the date to which the Bond is priced (thus
creating an average yield for the portfolio of each Trust); and (iii) reducing
the average yield for the portfolio of each Trust in order to reflect estimated
fees and expenses of that Trust and the maximum sales charge paid by
Unitholders. The resulting Estimated Long Term Return represents a measure of
the return to Unitholders earned over the estimated life of each Trust. The
Estimated Long Term Return as of the day prior to the Evaluation Date is stated
for the Trust under "Summary of Essential Information" in Part A.

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Estimated Current Return is computed by dividing the Estimated
Net Annual Interest Income per Unit by the Public Offering Price per Unit. In
contrast to the Estimated Long Term Return, the Estimated Current Return does
not take into account the amortization of premium or accretion of discount, if
any, on the Bonds in the portfolios of the Trust. Moreover, because interest
rates on Bonds purchased at a premium are generally higher than current interest
rates on newly issued bonds of a similar type with comparable rating, the
Estimated Current Return per Unit may be affected adversely if such Bonds are
redeemed prior to their maturity. On the day prior to the Evaluation Date, the
Estimated Net Annual Interest Income per Unit divided by the Public Offering
Price resulted in the Estimated Current Return stated for the Trust under
"Summary of Essential Information" in Part A.

A schedule of cash flow projections is available from the
Sponsor upon request.

RIGHTS OF CERTIFICATEHOLDERS
----------------------------

Certificates. Ownership of Units of the Trust is evidenced by
registered Certificates executed by the Trustee and the Sponsor. Certificates
may be issued in denominations of one or more Units and will bear appropriate
notations on their faces indicating which plan of distribution has been selected
by the Certificateholder. Certificates are transferable by presentation and
surrender to the Trustee properly endorsed and/or accompanied by a written
instrument or instruments of transfer. Although no such charge is presently made
or contemplated, the Trustee may require a Certificateholder to pay $2.00 for
each Certificate reissued or transferred and any governmental charge that may be
imposed in connection with each such transfer or interchange. Mutilated,
destroyed, stolen or lost Certificates will be replaced upon delivery of
satisfactory indemnity and payment of expenses incurred.

Interest And Principal Distributions. Interest received by the
Trust is credited by the Trustee to an Interest Account and a deduction is made
to reimburse the Trustee without interest for any amounts previously advanced.
Proceeds representing principal received from the maturity, redemption, sale or
other disposition of the Bonds are credited to a Principal Account.

Distributions to each Certificateholder from the Interest
Account are computed as of the close of business on each Record Date for the
following Payment Date and consist of an amount substantially equal to one-
twelfth, one-half or all of such Certificateholder's pro rata share of the
Estimated Net Annual Interest Income in the Interest Account, depending upon the
applicable plan of distribution. Distributions from the Principal Account (other
than amounts representing failed contracts, as previously discussed) will be
computed as of each semi-annual Record Date, and will be made to the
Certificateholders on or shortly after the next semi-annual Payment Date.
Proceeds representing principal received from the disposition of any of the
Bonds between a Record Date and a Payment Date which are not used for
redemptions of Units will be held in the Principal Account and not distributed
until the second succeeding semi-annual Payment Date. No distributions will be
made to Certificateholders electing to participate in the Total Reinvestment
Plan. Persons who purchase Units between a Record Date and a Payment Date will
receive their first distribution on the second Payment Date after such purchase.

Because interest payments are not received by the Trust at a
constant rate throughout the year, interest distributions may be more or less
than the amount credited to the Interest Account as of a given Record Date. For
the purpose of minimizing fluctuations in the distributions from the Interest
Account, the Trustee will

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<PAGE>

advance sufficient funds, without interest, as may be necessary to provide
interest distributions of approximately equal amounts. All funds in respect of
the Bonds received and held by the Trustee prior to distribution to
Certificateholders may be of benefit to the Trustee and do not bear interest to
Certificateholders.

As of the first day of each month, the Trustee will deduct
from the Interest Account, and, to the extent funds are not sufficient therein,
from the Principal Account, amounts necessary to pay the expenses of the Trust
(as determined on the basis set forth under "Trust Expenses and Charges"). The
Trustee also may withdraw from said accounts such amounts, if any, as it deems
necessary to establish a reserve for any applicable taxes or other governmental
charges that may be payable out of the Trust. Amounts so withdrawn shall not be
considered a part of the Trust's assets until such time as the Trustee shall
return all or any part of such amounts to the appropriate accounts. In addition,
the Trustee may withdraw from the Interest and Principal Accounts such amounts
as may be necessary to cover purchases of Replacement Bonds and redemptions of
Units by the Trustee.

The estimated monthly, semi-annual or annual interest
distribution per Unit will initially be in the amount shown under Summary of
Essential Information and will change and may be reduced as Bonds mature or are
redeemed, exchanged or sold, or as expenses of the Trust fluctuate. No
distribution need be made from the Principal Account until the balance therein
is an amount sufficient to distribute $1.00 per Unit.

Distribution Elections. Interest is distributed monthly,
semi-annually or annually, depending upon the distribution plan applicable to
the Unit purchased. Record Dates are the first day of each month for monthly
distributions, the first day of each June and December for semi-annual
distributions and the first day of each December for annual distributions.
Payment Dates will be the fifteenth day of each month following the respective
Record Dates.

Certificateholders purchasing Units in the secondary market
will initially receive distributions in accordance with the election of the
prior owner. Every October each Certificateholder may change his distribution
election by notifying the Trustee in writing of such change between October 1
and November 1 of each year. (Certificateholders deciding to change their
election should contact the Trustee by calling the number listed on the back
cover hereof for information regarding the procedures that must be followed in
connection with this written notification of the change of election.) Failure to
notify the Trustee on or before November 1 of each year will result in a
continuation of the plan for the following 12 months.

Records. The Trustee shall furnish Certificateholders, in
connection with each distribution, a statement of the amount of interest, if
any, and the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per Unit. Within a reasonable time
after the end of each calendar year the Trustee will furnish to each person who
at any time during the calendar year was a Certificateholder of record, a
statement showing (i) as to the Interest Account: interest received (including
amounts representing interest received upon any disposition of Bonds and earned
original issue discount, if any), amounts paid for purchases of Replacement
Bonds and redemptions of Units, if any, deductions for applicable taxes and fees
and expenses of the Trust, and the balance remaining after such distributions
and deductions, expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the last business
day of such calendar year; (ii) as to the Principal Account: the dates of
disposition of any Bonds and the net proceeds received therefrom (including any
unearned original issue discount but excluding any portion representing accrued
interest), deductions for payments of applicable taxes and fees and expenses of
the Trust, amounts paid for purchases of Replacement Bonds and redemptions of
Units, if any, and the balance remaining after such distributions and
deductions, expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the last business
day of such calendar year; (iii) a list of the Bonds held and the number of
Units outstanding on the last business day of such calendar year; (iv) the
Redemption Price per Unit based upon the last computation thereof made such
calendar year; and (v) amounts actually distributed to Certificateholders during

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<PAGE>

such calendar year from the Interest and Principal Accounts, separately stated,
expressed both as total dollar amounts representing the pro rata share of each
Unit outstanding on the last business day of such calendar year.

The Trustee shall keep available for inspection by
Certificateholders at all reasonable times during usual business hours, books of
record and account of its transactions as Trustee, including records of the
names and addresses of Certificateholders, Certificates issued or held, a
current list of Bonds in the portfolio and a copy of the Trust Agreement.

TAX STATUS
----------

This is a general discussion of some of the Federal income tax
consequences of ownership of Units in the Trust. It applies only to investors
who hold their Units as capital assets. It does not discuss special rules that
apply to investors subject to special treatment, such as securities dealers,
financial institutions, insurance companies and investors who hold the Units as
a part of a hedge or a straddle.

All Bonds acquired by each Trust were accompanied by copies of
opinions of bond counsel to the issuing governmental authorities given at the
time of original delivery of the Bonds to the effect that the interest thereon
is exempt from regular Federal income tax. Such interest may, however, be
subject to the Federal alternative minimum tax and to state and local taxes.
Neither the Sponsor nor the Trustee nor their respective counsel have made any
review of the proceedings relating to the issuance of the Bonds or the bases for
such opinion and express no opinion as to these matters, and neither the Trustee
nor the Sponsor nor their respective counsel has made an independent examination
or verification that the Federal income tax status of the Bonds has not been
altered since the time of the original delivery of those opinions.

In rendering the opinion set forth below, counsel has examined
the Agreement, the final form of Prospectus dated the date hereof (the
"Prospectus") and the documents referred to therein, among others, and has
relied on the validity of said documents and the accuracy and completeness of
the facts set forth therein.

In the opinion of Paul, Hastings, Janofsky & Walker
LLP, counsel for the Sponsor, under existing law:

Each Trust will be classified as grantor trust and
not as an association taxable as a corporation for Federal income tax
purposes under the Internal Revenue Code and income received by each
Trust that consists of interest excluded from Federal gross income
under the Code will be excludable from the Federal gross income of the
Certificateholders of such Trust; and

Each Certificateholder will be considered the owner
of a pro rata portion of the assets of the Trust. Thus, each
Certificateholder will be considered to have received its pro rata
share of Bond interest when it is received by that Trust, and the net
income distributable to Certificateholders that is exempt from regular
Federal income tax when received by that Trust will constitute
tax-exempt income when received by the Certificateholders.

Gain realized on a sale or a redemption of the Bonds or on a
sale of a Unit is, however, includable in a Certificateholder's gross income for
Federal income tax purposes, generally as capital gain. Such gain does not
include any amount received in respect to accrued interest, earned original
issue discount and accrued market discount. Gain on the disposition of a Bond or
a Unit generally will be treated as ordinary income, rather than capital gain,
to the extent of any accrued market discount. Such gain may be long- or
short-term depending on the holding period of the Bond or the Unit, assuming
that the Bond or the Unit is held as a capital asset. Capital losses are
deductible to the extent of capital gains; in addition, up to $3,000 of capital
losses of non-corporate Certificateholders ($1,500 for married persons filing
separately) may be deducted against ordinary income. Capital

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<PAGE>

assets held by non-corporate Certificateholders will qualify for long-term
capital gain treatment if held for more than one year and will be subject to a
reduced tax rate of 20% rather than the regular maximum tax rate of 39.6%.

Each Certificateholder will realize taxable gain or loss when
the Trust disposes of a Bond (whether by sale, exchange, redemption or payment
at maturity), as if the Certificateholder had directly disposed of its pro rata
share of such Bond. The gain or loss is measured by the difference between (i)
the tax cost of such pro rata share of such Bond and (ii) the amount received
therefor. For this purpose, a Certificateholder's per Unit tax cost for each
Bond is determined by allocating the total tax cost of each Unit among all the
Bonds held in the Trust (in accordance with the portion of the Trust comprised
by each Bond). In order to determine the amount of taxable gain or loss, the
Certificateholder's amount received is similarly allocated at that time. The
Certificateholder may exclude from the amount received any amounts that
represent accrued interest or the earned portion of any original issue discount
but may not exclude amounts attributable to market discount. Thus, when a Bond
is disposed of by a Trust at a gain, taxable gain will equal the difference
between (i) the amount received and (ii) the amount paid (tax cost) plus any
accrued original issue discount. No deduction is allowed for the amortization of
bond premium on tax-exempt bonds, such as the Bonds, in computing regular
Federal income tax.

Original Issue discount generally accrues based on the
principle of compounding of accrued interest, not on a straight-line or ratable
method, with the result that the amount of earned original issue discount is
less in the earlier years and more in the later years of a bond term. The tax
basis of an original issue discount bond is increased by the amount of accrued,
tax-exempt original issue discount thus determined. This method of calculation
will produce higher capital gains (or lower losses) to a Certificateholder, as
compared to the results produced by the straight-line method of accounting for
original issue discount, upon an early disposition of a Bond by the Trust or of
a Unit by a Certificateholder.

A Certificateholder may also realize taxable gain or loss when
a Unit is sold or redeemed. The amount received is allocated among all the Bonds
in a particular Trust in the same manner as when that Trust disposes of Bonds,
and the Certificateholder may exclude accrued interest and the earned portion of
any original issue discount (but not amounts attributable to market discount).
The return of a Certificateholder's tax cost is otherwise a tax-free return of
capital.

A portion of Social Security benefits is includable in gross
income for taxpayers whose modified adjusted gross income combined with a
portion of their Social Security benefits exceeds a base amount. The base amount
is $32,000 for a married couple filing a joint return, zero for married persons
filing separate returns and not living apart at all times during the taxable
year, and $25,000 for all others. Interest on tax-exempt bonds is to be added to
a Certificateholder's adjusted gross income for purposes of computing the amount
of Social Security benefits that are includable in gross income and determining
whether a Certificateholder's income exceeds the base amount above which a
portion of the benefits would be subject to tax.

Corporate Certificateholders are required to include in
Federal corporate alternative minimum taxable income 75% of the amount by which
the adjusted current earnings (which will include tax-exempt interest) of the
corporation exceeds alternative minimum taxable income (determined without
regard to this item). In addition, in certain cases, Subchapter S corporations
with accumulated earnings and profits from Subchapter C years will be subject to
a tax on tax-exempt interest.

Any proceeds received pursuant to the terms of the insurance
on the Bonds that represent maturing interest on defaulted obligations will be
excludable from Federal gross income if, and to the same extent that, such
interest would have been so excludable if paid by the issuers of such defaulted
obligations.

The New York Navigator Insured Trust is not subject to the New
York State Franchise Tax on Business Corporations or the New York City General
Corporation Tax. Under the personal income tax laws of the State and City of New
York, the income of the New York Navigator Insured Trust will be treated as the
income of

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the Certificateholders. Interest on the Bonds of the New York Navigator Insured
Trust that is exempt from tax under the laws of the State and City of New York
when received by the Trust will retain its status as tax-exempt interest to its
Certificateholders. In addition, non-residents of New York City will not be
subject to the New York City personal income tax on gains derived with respect
to their Units of the New York Navigator Insured Trust. Non-residents of New
York State will not be subject to New York State personal income tax on such
gains unless the Units are employed in a business, trade or occupation carried
on in New York State. A New York State or New York City resident should
determine its basis and holding periods for its Units in the same manner for New
York State and New York City tax purposes as for Federal tax purposes. For
corporations doing business in New York State, interest earned on state and
municipal obligations that are exempt from Federal income tax, including
obligations of New York State, its political subdivisions and instrumentalities,
must be included in calculating New York State and New York City entire net
income for purposes of calculating New York State and New York City franchise
(income) tax.

The laws of the several states and local taxing authorities
vary with respect to the taxation of municipal obligations and each
Certificateholder is advised to consult his own tax advisor as to the tax
consequences of his Certificates under state and local tax laws.

In the opinion of Zeller and Bryant, special counsel to the
Sponsor on New Jersey tax matters, which opinion is made in reliance upon
certain information and based on certain assumptions respecting the New Jersey
Navigator Trust, under existing New Jersey law applicable to individuals who are
New Jersey residents and New Jersey estates and trusts:

(1) The New Jersey Navigator Trust will be
recognized as a trust and not as an association
taxable as a corporation. The New Jersey Navigator
Trust will not be subject to the New Jersey
Corporation Business Tax or the New Jersey
Corporation Income Tax.

(2) The income of the New Jersey Navigator
Trust will be treated as income of the
Certificateholders who are individuals, estates or
trusts under the New Jersey Gross Income Tax Act,
N.J.S.A. 54A: 1-1 et seq. (the "Act"). Interest on
the Bonds that is exempt from tax under the Act when
received by the New Jersey Navigator Trust will
retain its status as tax-exempt interest under the
Act when distributed to Certificateholders who are
individuals, estates or trusts.

(3) Certificateholders, who are individuals,
estates, or trusts will not be subject to the Act on
any gain realized when the New Jersey Navigator Trust
disposes of a Bond (whether by sale, exchange,
redemption, or payment at maturity). Any loss
realized on such disposition may not be utilized to
offset gains realized by such Certificateholder on
the disposition of assets the gain on which is
subject to the New Jersey Gross Income Tax.

(4) The sale, exchange or redemption of a
Unit by a Certificateholder shall be treated as a
sale or exchange of a Certificateholder's pro rata
interest in the assets in the New Jersey Navigator
Trust at the time of the transaction and any gain
will be exempt from tax under the Act to the extent
that the price received by the selling
Certificateholder who is an individual, estate or
trust does not exceed the Redemption Price. To the
extent that the amount

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received by the Certificateholder exceeds the
Redemption Price, any such gain will not be exempt
from tax under the Act.

(5) All proceeds representing interest on
defaulted obligations derived by Certificateholders
who are individuals, estates or trusts from an
insurance policy, either paid directly to the
Certificateholder or through the New Jersey Navigator
Trust, are exempt from tax under the Act.

(6) The Units of the New Jersey Navigator
Trust may be taxable in the estates of New Jersey
residents under the New Jersey Transfer Inheritance
Tax Law or the New Jersey Estate Tax Laws.

(7) If a Certificateholder is a corporation
subject to the New Jersey Corporation Business Tax or
New Jersey Corporation Income Tax, interest from the
Bonds in the New Jersey Navigator Trust which is
allocable to such corporation will be includable in
its entire net income for purposes of the New Jersey
Corporation Business Tax or New Jersey Corporation
Income Tax, less any interest expense incurred to
carry such investment to the extent such interest
expense has not been deducted in computing Federal
taxable income. Net gains derived by such corporation
on the disposition of the Bonds by the New Jersey
Navigator Trust or on the disposition of its Units
will be included in its entire net income for
purposes of the New Jersey Corporation Business Tax
or New Jersey Corporation Income Tax. Any proceeds
paid under the insurance policy issued to the Trustee
of the New Jersey Navigator Trust with respect to the
Bonds or under individual policies obtained by
issuers of Bonds which represent maturing interest or
maturing principal on defaulted obligations held by
the Trustee will be included in its entire net income
for purposes of the New Jersey Corporation Business
Tax or New Jersey Corporation Income Tax if, and to
the same extent as, such interest or proceeds would
have been so included if paid by the issuer of the
defaulted obligations.

(8) The Internal Revenue Service
Restructuring and Reform Act of 1998 (the "1998 Tax
Act") provides that for taxpayers other than
corporations, net capital gain (which is defined as
net long-term capital gain over net short-term
capital loss for the taxable year) realized from
property (with certain exclusions) is subject to a
maximum marginal stated tax rate of 20% (10% in the
case of certain taxpayers in the lowest tax bracket).
Capital gain or loss is long-term if the holding
period for the asset is more than one year, and is
short-term if the holding period of the asset is one
year or less. The date on which a Unit is acquired
(i.e., the "trade date") is excluded for purposes of
determining the holding period of the Unit. The
legislation is generally effective retroactively for
amounts properly taken into account on or after
January 1, 1998. Capital gains realized from assets
held for one year or less are taxed at the same rates
as original income. See Part A for a discussion of
the Federal Tax status of income earned on New Jersey
Navigator Trust.

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In the case of Bonds that are Industrial Revenue
Bonds ("IRBs") or certain types of private activity bonds, the opinions of bond
counsel to the respective issuing authorities indicate that interest on such
Bonds is exempt from regular Federal income tax. However, interest on such Bonds
will not be exempt from regular Federal income tax for any period during which
such Bonds are held by a substantial user of the facilities financed by the
proceeds of such Bonds or by a related person thereof within the meaning of the
Code. Therefore, interest on any such Bonds allocable to a Certificateholder who
is such a substantial user or related person thereof will not be tax-exempt.
Furthermore, in the case of IRBs that qualify for the small issue exemption, the
small issue exemption will not be available or will be lost if, at any time
during the three-year period beginning on the later of the date the facilities
are placed in service or the date of issue, all outstanding tax-exempt IRBs,
together with a proportionate share of any present issue, of an owner or
principal user (or related person) of the facilities exceeds $40,000,000. In the
case of IRBs issued under the $10,000,000 small issue exemption, interest on
such IRBs will become taxable if the face amount of the IRBs plus certain
capital expenditures exceeds $10,000,000.

In addition, a Bond can lose its tax-exempt status as a result
of other subsequent but unforeseeable events such as prohibited arbitrage
activities by the issuer of the Bond or the failure of the Bond to continue to
satisfy the conditions required for the exemption of interest thereon from
regular Federal income tax. No investigation has been made as to the current or
future owners or users of the facilities financed by the Bonds, the amount of
such persons' outstanding tax-exempt IRBs, or the facilities themselves, and no
assurance can be given that future events will not affect the tax-exempt status
of the Bonds. Investors should consult their tax advisors for advice with
respect to the effect of these provisions on their particular tax situation.

Interest on indebtedness incurred or continued to purchase or
carry the Units is not deductible for regular Federal income tax purposes. In
addition, under rules used by the Internal Revenue Service for determining when
borrowed funds are considered used for the purpose of purchasing or carrying
particular assets, the purchase of Units may be considered to have been made
with borrowed funds even though the borrowed funds are not directly traceable to
the purchase of Units. Also, in the case of certain financial institutions that
acquire Units, in general no deduction is allowed for interest expense allocable
to the Units.

The U.S. Supreme Court has held that there is no
constitutional prohibition against the Federal government's taxing the interest
earned on state or other municipal bonds. The decision does not, however, affect
the current exemption from taxation of the interest earned on the Bonds in the
Trust in accordance with Section 103 of the Code.

The opinions of bond counsel or special tax counsel to the
issuing governmental authorities to the effect that interest on the Bonds is
exempt from regular Federal income tax may be limited to law existing at the
time the Bonds were issued, and may not apply to the extent that future changes
in law, regulations or interpretations affect such Bonds. Investors are advised
to consult their own tax advisors for advice with respect to the effect of any
legislative changes.

LIQUIDITY
---------

Sponsor Repurchase. The Sponsor, although not obligated to do
so, intends to maintain a secondary market for the Units and continuously to
offer to repurchase the Units. The Sponsor's secondary market repurchase price,
after the initial public offering is completed, will be based on the aggregate
bid price of the Bonds in the Trust portfolio, determined by the Evaluator on a
daily basis, and will be the same as the redemption price. The aggregated bid
price, determined by the Evaluator on a daily basis, is computed on the basis
set forth under "Trustee Redemption". Certificateholders who wish to dispose of
their Units should inquire of the Sponsor as to current market prices prior to
making a tender for redemption. The Sponsor may discontinue repurchase of Units
if the supply of Units exceeds demand, or for other business reasons. The date
of repurchase is deemed to be the date on which Certificates representing Units
are physically received in proper form by ING Funds Distributors, Inc.,

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1475 Dunwoody Drive, West Chester, Pennsylvania, 19380 on behalf of the Sponsor.
Units received after 4 P.M., Eastern Time, will be deemed to have been
repurchased on the next business day. In the event a market is not maintained
for the Units, a Certificateholder may be able to dispose of Units only by
tendering them to the Trustee for redemption.

Prospectuses relating to certain other bond trusts indicate an
intention by the respective Sponsor, subject to change, to repurchase units on
the basis of a price higher than the bid prices of the bonds in the trusts.
Consequently, depending on the prices actually paid, the secondary market
repurchase price of other trusts may be computed on a somewhat more favorable
basis than the repurchase price offered by the Sponsor for units of this Trust,
although in all bond trusts, the purchase price of a unit depends primarily on
the value of the bonds in the trust portfolio.

Units purchased by the Sponsor in the secondary market may be
re-offered for sale by the Sponsor at a price based on the aggregate bid price
of the Bonds in the Trust plus the applicable sales charge (see "Public Offering
Price" in Part A) plus net accrued interest. Any Units that are purchased by the
Sponsor in the secondary market also may be redeemed by the Sponsor if it
determines such redemption to be in its best interest.

The Sponsor may, under certain circumstances, as a service to
Certificateholders, elect to purchase any Units tendered to the Trustee for
redemption (see "Trustee Redemption"). Factors which the Sponsor will consider
in making a determination will include the number of Units of all Trusts which
it has in inventory, its estimate of the salability and the time required to
sell such Units and general market conditions. For example, if in order to meet
redemptions of Units the Trustee must dispose of Bonds, and if such disposition
cannot be made by the redemption date (seven calendar days after tender), the
Sponsor may elect to purchase such Units. Such purchase shall be made by payment
to the Certificateholder not later than the close of business on the redemption
date of an amount equal to the Redemption Price on the date of tender.

Trustee Redemption. Units may also be tendered to the Trustee
for redemption at its corporate trust office as set forth in Part A of this
Prospectus, upon proper delivery of Certificates representing such Units and
payment of any relevant tax. At the present time there are no specific taxes
related to the redemption of Units. No redemption fee will be charged by the
Sponsor or the Trustee. Units redeemed by the Trustee will be canceled.

Certificates representing Units to be redeemed must be
delivered to the Trustee and must be properly endorsed or accompanied by proper
instruments of transfer with signature guaranteed (or by providing satisfactory
indemnity, as in the case of lost, stolen or mutilated Certificates). Thus,
redemptions of Units cannot be effected until Certificates representing such
Units have been delivered by the person seeking redemption. (See
"Certificates"). Certificateholders must sign exactly as their names appear on
the faces of their Certificates. In certain instances the Trustee may require
additional documents such as, but not limited to, trust instruments,
certificates of death, appointments as executor or administrator or certificates
of corporate authority.

Within three business days following a tender for redemption,
the Certificateholder will be entitled to receive in cash an amount for each
Unit tendered equal to the Redemption Price per Unit computed as of the
Evaluation Time set forth under "Summary of Essential Information" in Part A on
the date of tender. The "date of tender" is deemed to be the date on which Units
are received by the Trustee, except that with respect to Units received after
the close of trading on the New York Stock Exchange, the date of tender is the
next day on which such Exchange is open for trading, and such Units will be
deemed to have been tendered to the Trustee on such day for redemption at the
Redemption Price computed on that day.

Accrued interest paid on redemption shall be withdrawn from
the Interest Account, or, if the balance therein is insufficient, from the
Principal Account. All other amounts paid on redemption shall be withdrawn from
the Principal Account. The Trustee is empowered to sell Bonds in order to make
funds available

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for redemptions. Such sales, if required, could result in a sale
of Bonds by the Trustee at a loss. To the extent Bonds are sold, the size and
diversity of the Trust will be reduced.

The Redemption Price per Unit is the pro rata share of each
Unit in the Trust determined by the Trustee on the basis of (i) the cash on hand
in the Trust or moneys in the process of being collected, (ii) the value of the
Bonds in the Trust based on the bid prices of such Bonds and (iii) interest
accrued thereon, less (a) amounts representing taxes or other governmental
charges payable out of the Trust, (b) the accrued expenses of the Trust and (c)
cash allocated for the distribution to Certificateholders of record as of the
business day prior to the evaluation being made. The Evaluator may determine the
value of the Bonds in the Trust (i) on the basis of current bid prices of the
Bonds obtained from dealers or brokers who customarily deal in bonds comparable
to those held by the Trust, (ii) on the basis of bid prices for bonds comparable
to any Bonds for which bid prices are not available, (iii) by determining the
value of the Bonds by appraisal, or (iv) by any combination of the above. The
Evaluator will determine the aggregate current bid price evaluation of the Bonds
in the Trust, taking into account the market value of the Bonds insured under
the Bond Insurance Policy, in the manner described as set forth under "Public
Offering-- Offering Price". Insurance does not guarantee the market value of the
Bonds or the Units, and while Bond insurance represents an element of market
value in regard to insured Bonds, its exact effect, if any, on market value
cannot be predicted.

The Trustee is irrevocably authorized in its discretion, if
the Sponsor does not elect to purchase a Unit tendered for redemption or if the
Sponsor tenders a Unit for redemption, in lieu of redeeming such Unit, to sell
such Unit in the over-the-counter market for the account of the tendering
Certificateholder at prices which will return to the Certificateholder an amount
in cash, net after deducting brokerage commissions, transfer taxes and other
charges, equal to or in excess of the Redemption Price for such Unit. The
Trustee will pay the net proceeds of any such sale to the Certificateholder on
the day he would otherwise be entitled to receive payment of the Redemption
Price.

The Trustee reserves the right to suspend the right of
redemption and to postpone the date of payment of the Redemption Price per Unit
for any period during which the New York Stock Exchange is closed, other than
customary weekend and holiday closings, or trading on that Exchange is
restricted or during which (as determined by the Securities and Exchange
Commission) an emergency exists as a result of which disposal or evaluation of
the Bonds is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit. The Trustee and the
Sponsor are not liable to any person or in any way for any loss or damage which
may result from any such suspension or postponement.

A Certificateholder who wishes to dispose of his Units should
inquire of his bank or broker in order to determine if there is a current
secondary market price in excess of the Redemption Price.

TRUST ADMINISTRATION
--------------------

Portfolio Supervision. Except for the purchase of Replacement
Bonds or as discussed herein, the acquisition of any Bonds for the Trust other
than Bonds initially deposited by the Sponsor is prohibited. Although it is the
Sponsor's and Trustee's intention not to dispose of Bonds insured pursuant to
the Bond Insurance in the event of default, nevertheless, the Sponsor may direct
the Trustee to dispose of Bonds upon (i) default in payment of principal or
interest on such Bonds, (ii) institution of certain legal proceedings with
respect to the issuers of such Bonds, (iii) default under other documents
adversely affecting debt service on such Bonds, (iv) default in payment of
principal or interest on other obligations of the same issuer or guarantor, (v)
with respect to revenue Bonds, decline in revenues and income of any facility or
project below the estimated levels calculated by proper officials charged with
the construction or operation of such facility or project or (vi) decline in
price or the occurrence of other market or credit factors that in the opinion of
the Sponsor would make the retention of such Bonds in the Trust

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detrimental to the interests of the Certificateholders. If a default in the
payment of principal or interest on any of the Bonds occurs and if the Sponsor
fails to instruct the Trustee to sell or hold such Bonds, the Trust Agreement
provides that the Trustee may sell such Bonds. The Trustee shall not be liable
for any depreciation or loss by reason of any sale of bonds or by reason of the
failure of the Sponsor to give directions to the Trustee.

The Sponsor is authorized by the Trust Agreement to direct the
Trustee to accept or reject certain plans for the refunding or refinancing of
any of the Bonds. Any bonds received in exchange or substitution will be held by
the Trustee subject to the terms and conditions of the Agreement to the same
extent as the Bonds originally deposited. Within five days after such deposit,
notice of such exchange and deposit shall be given by the Trustee to each
Certificateholder registered on the books of the Trustee, including an
identification of the Bonds eliminated and the Bonds substituted therefor.

In determining whether to accept or reject certain plans for
the refunding or refinancing of any of the Bonds, the Sponsor may be advised by
the Portfolio Supervisor.

Trust Agreement, Amendment And Termination. The Trust
Agreement may be amended by the Trustee, the Sponsor and the Evaluator without
the consent of any of the Certificateholders: (i) to cure any ambiguity or to
correct or supplement any provision which may be defective or inconsistent; (ii)
to change any provision thereof as may be required by the Securities and
Exchange Commission or any successor governmental agency; or (iii) to make such
other provisions in regard to matters arising thereunder as shall not adversely
affect the interests of the Certificateholders.

The Trust Agreement may also be amended in any respect, or
performance of any of the provisions thereof may be waived, with the consent of
the holders of Certificates evidencing 66-2/3% of the Units then outstanding for
the purpose of modifying the rights of Certificateholders; provided that no such
amendment or waiver shall reduce any Certificateholder's interest in the Trust
without his consent or reduce the percentage of Units required to consent to any
such amendment or waiver without the consent of the holders of all Certificates.
The Trust Agreement may not be amended, without the consent of the holders of
all Certificates then outstanding, to increase the number of Units issuable or
to permit the acquisition of any bonds in addition to or in substitution for
those initially deposited in the Trust, except in accordance with the provisions
of the Trust Agreement. The Trustee shall promptly notify Certificateholders, in
writing, of the substance of any such amendment.

The Trust Agreement provides that the Trust shall terminate
upon the maturity, redemption or other disposition, as the case may be, of the
last of the Bonds held in the Trust but in no event is it to continue beyond the
end of the calendar year preceding the fiftieth anniversary of the execution of
the Trust Agreement. If the value of the Trust shall be less than the minimum
amount set forth under "Summary of Essential Information" in Part A, the Trustee
may, in its discretion, and shall when so directed by the Sponsor, terminate the
Trust. The Trust may also be terminated at any time with the consent of the
holders of Certificates representing 100% of the Units then outstanding. In the
event of termination, written notice thereof will be sent by the Trustee to all
Certificateholders. Within a reasonable period after termination, the Trustee
must sell any Bond remaining in the Trust, and, after paying all expenses and
charges incurred by the Trust, distribute to each Certificateholder, upon
surrender for cancellation of his Certificate for Units, his pro rata share of
the Interest and Principal Accounts.

The Sponsor. Effective February 9, 2000, ING Funds
Distributor, Inc. has become the successor to Reich & Tang Distributors, Inc. as
Sponsor to the Trusts. In addition, Gruntal & Co., L.L.C. has resigned as co-
sponsor for those particular Trusts for which it acted in that capacity.

ING Funds Distributor, Inc., an Iowa corporation, a wholly
owned subsidiary of ING Group. ING Group among the leading financial services
organizations, is engaged in asset management, banking and insurance

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activities in 60 countries worldwide with over 82,000 employees. The Sponsor is
a member of the National Association of Securities Dealers, Inc.

The information included herein is only for the purpose of
informing investors as to the financial responsibility of the Sponsor and its
ability to carry out its contractual obligations. The Sponsor will be under no
liability to Unitholders for taking any action, or refraining from taking any
action, in good faith pursuant to the Trust Agreement, or of errors in judgment
except in cases of its own willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties.

Unless the Sponsor otherwise directs, the accounts of the
Trust shall be audited not less than annually by independent public accountants
selected by the Sponsor. The expenses of the audit shall be an expense of the
Trust. So long as the Sponsor maintains a secondary market, the Sponsor will
bear any audit expense which exceeds $.50 per 1,000 Units. Certificateholders
covered by the audit during the year may receive a copy of the audited
financials upon request.

The Sponsor may resign at any time by delivering to the
Trustee an instrument of resignation executed by the Sponsor.

If at any time the Sponsor shall resign or fail to perform any
of its duties under the Trust Agreement or becomes incapable of acting or
becomes bankrupt or its affairs are taken over by public authorities, then the
Trustee may either (i) appoint a successor Sponsor; (ii) terminate the Trust
Agreement and liquidate the Trust; or (iii) continue to act as Trustee without
terminating the Trust Agreement. Any successor Sponsor appointed by the Trustee
shall be satisfactory to the Trustee and, at the time of appointment, shall have
a net worth of at least $1,000,000.

The Trustee. For certain of the Trusts, as set forth in the
"Summary of Essential Information" in Part A, the Trustee is The Chase Manhattan
Bank with its principal executive office located at 270 Park Avenue, New York,
New York 10017 (800) 428-8890 and its unit investment trust office at 4 New York
Plaza, New York, New York 10004. The Trustee is subject to supervision by the
Superintendent of Banks of the State of New York, the Federal Deposit Insurance
Corporation and the Board of Governors of the Federal Reserve System.

The Trustee must be a banking corporation organized under the
laws of the United States or any state which is authorized under such laws to
exercise corporate trust powers and must have at all times an aggregate capital,
surplus and undivided profits of not less than $5,000,000. The duties of the
Trustee are primarily ministerial in nature. The Trustee did not participate in
the selection of Securities for the portfolio of the Trust.

The Trustee shall not be liable or responsible in any way for
taking any action, or for refraining from taking any action, in good faith
pursuant to the Trust Agreement, or for errors in judgment; or for any
disposition of any moneys, bonds or Certificates in accordance with the Trust
Agreement, except in cases of its own willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties; provided,
however, that the Trustee shall not in any event be liable or responsible for
any evaluation made by the Evaluator. In addition, the Trustee shall not be
liable for any taxes or other governmental charges imposed upon or in respect of
the Bonds or the Trust which it may be required to pay under current or future
law of the United States or any other taxing authority having jurisdiction. The
Trustee shall not be liable for depreciation or loss incurred by reason of the
sale by the Trustee of any of the Bonds pursuant to the Trust Agreement.

For further information relating to the responsibilities of
the Trustee under the Trust Agreement, reference is made to the material set
forth under "Rights of Certificateholders".

The Trustee may resign by executing an instrument in writing
and filing the same with the Sponsor, and mailing a copy of a notice of
resignation to all Certificateholders. In such an event, the Sponsor is
obligated to

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appoint a successor Trustee as soon as possible. In addition, if the Trustee
becomes incapable of acting or becomes bankrupt or its affairs are taken over by
public authorities, the Sponsor may remove the Trustee and appoint a successor
as provided in the Trust Agreement. Notice of such removal and appointment shall
be mailed to each Certificateholder by the Sponsor. If upon resignation of the
Trustee no successor has been appointed and has accepted the appointment within
thirty days after notification, the retiring Trustee may apply to a court of
competent jurisdiction for the appointment of a successor. The resignation or
removal of the Trustee becomes effective only when the successor Trustee accepts
its appointment as such or when a court of competent jurisdiction appoints a
successor Trustee. Upon execution of a written acceptance of such appointment by
successor Trustee, all the rights, powers, duties and obligations of final
Trustee shall vest in the successor.

Any corporation into which the Trustee may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Trustee shall be a party, shall be the successor
Trustee. The Trustee must always be a banking corporation organized under the
laws of the United States or any State and have at all times an aggregate of not
less than $2,500,000.

The Evaluator. The Evaluator is Kenny S&P Evaluation Services,
a division of J.J. Kenny Company, Inc., a subsidiary of The McGraw-Hill
Companies, with main offices located at 65 Broadway, New York, New York 10006.
The Evaluator is a wholly-owned subsidiary of McGraw Hill, Inc. The Evaluator is
a registered investment advisor and also provides financial information
services.

The Trustee, the Sponsor and the Certificateholders may rely
on any evaluation furnished by the Evaluator and shall have no responsibility
for the accuracy thereof. Determinations by the Evaluator under the Trust
Agreement shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee, the Sponsor or Certificateholders for errors in
judgment, except in cases of its own willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.

The Evaluator may resign or may be removed by the Sponsor and
Trustee, and the Sponsor and the Trustee are to use their best efforts to
appoint a satisfactory successor. Such resignation or removal shall become
effective upon the acceptance of appointment by the successor Evaluator. If upon
resignation of the Evaluator no successor has accepted appointment within thirty
days after notice of resignation, the Evaluator may apply to a court of
competent jurisdiction for the appointment of a successor.

TRUST EXPENSES AND CHARGES
--------------------------

At no cost to the Trust, the Sponsor has borne the expenses of
creating and establishing the Trust, including the cost of initial preparation
and execution of the Trust Agreement, registration of the Trust and the Units
under the Investment Company Act of 1940 and the Securities Act of 1933, the
premiums on the Sponsor-Insured Bonds, initial preparation and printing of the
Certificates, legal expenses, advertising and selling expenses, expenses of the
Trustee including, but not limited to, an amount equal to interest accrued on
certain "when issued" bonds since the date of settlement for the Units, initial
fees and other out-of-pocket expenses. The fees of the Evaluator, however,
incurred during the initial public offering, are paid directly by the Trust.

The Sponsor will not charge the Trust a fee for its services
as such. (See "Sponsor's Profits".)

ING Mutual Funds Management Co. LLC, an affiliate of ING Funds
Distributor, Inc., will receive, for portfolio supervisory services to the
Trust, an annual fee in the amount set forth under "Summary of Essential
Information" in Part A. This fee may exceed the actual cost of providing
portfolio supervisory services for the Trust, but at no time will the total
amount received for portfolio supervisory services rendered to all series of the

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Insured Municipal Securities Trust in any calendar year exceed the aggregate
costs to ING Mutual Funds Management Co. LLC of supplying such services in such
year. (See "Trust Administration -- Portfolio Supervision.")

The Trustee will receive for its ordinary recurring services
to the Trust an annual fee in the amount set forth under "Summary of Essential
Information" in Part A of this Prospectus. For a discussion of the services
performed by the Trustee pursuant to its obligations under the Trust Agreement,
see "Trust Administration" and "Rights of Certificateholders".

The Evaluator will receive, for each daily evaluation of the
Bonds in the Trust after the initial public offering is completed, a fee in the
amount set forth under "Summary of Essential Information" in Part A of this
Prospectus.

The Trustee's and Evaluator's fees are payable monthly as of
the Record Date from the Interest Account to the extent funds are available and
then from the Principal Account. The Trustee's fees, the Evaluator's fees and
the Portfolio Supervisor's fees may be increased without approval of the
Certificateholders by amounts not exceeding proportionate increases in consumer
prices for services as measured by the United States Department of Labor's
Consumer Price Index entitled "All Services Less Rent".

The following additional charges are or may be incurred by the
Trust: (i) all expenses (including counsel fees) of the Trustee incurred and
advances made in connection with its activities under the Trust Agreement,
including the expenses and costs of any action undertaken by the Trustee to
protect the Trust and the rights and interests of the Certificateholders; (ii)
fees of the Trustee for any extraordinary services performed under the Trust
Agreement; (iii) indemnification of the Trustee for any loss or liability
accruing to it without gross negligence, bad faith or willful misconduct on its
part, arising out of or in connection with its acceptance or administration of
the Trust; (iv) indemnification of the Sponsor for any losses, liabilities and
expenses incurred in acting as Sponsor of the Trust without gross negligence,
bad faith or willful misconduct on its part; and (v) all taxes and other
governmental charges imposed upon the Bonds or any part of the Trust (no such
taxes or charges are being levied, made or, to the knowledge of the Sponsor,
contemplated). The above expenses, including the Trustee's fees, when paid by or
owing to the Trustee, are secured by a first lien on the Trust. In addition, the
Trustee is empowered to sell Bonds in order to make funds available to pay all
expenses.

The accounts of the Trust shall be audited not less than
annually by independent public accountants selected by the Sponsor. So long as
the Sponsor maintains a secondary market, the Sponsor will bear any audit
expense which exceeds 50 cents per Unit. Certificateholders covered by the audit
during the year may receive a copy of the audited financial statements upon
request.

EXCHANGE PRIVILEGE AND CONVERSION OFFER
---------------------------------------

Certificateholders will be able to elect to exchange any or
all of their Units of this Trust for Units of one or more of any available
series of Equity Securities Trust, Insured Municipal Securities Trust, Municipal
Securities Trust, New York Municipal Trust or Mortgage Securities Trust (the
"Exchange Trusts") subject to a reduced sales charge as set forth in the
prospectus of the Exchange Trust (the "Exchange Privilege"). Unit owners of any
registered unit investment trust for which there is no active secondary market
in the units of such trust (a "Redemption Trust") will be able to elect to
redeem such units and apply the proceeds of the redemption to the purchase of
available Units of one or more series of an Exchange Trust (the "Conversion
Trusts") at the Public Offering Price for units of the Conversion Trust subject
to a reduced sales charge as set forth in the prospectus of the Conversion Trust
(the "Conversion Offer"). Under the Exchange Privilege, the Sponsor's repurchase
price during the initial offering period of the Units being surrendered will be
based on the market value of the Securities in the

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<PAGE>

Trust portfolio or on the aggregate offer price of the Bonds in the other Trust
Portfolios; and, after the initial offering period has been completed, will be
based on the aggregate bid price of the securities in the particular Trust
portfolio. Under the Conversion Offer, units of the Redemption Trust must be
tendered to the trustee of such trust for redemption at the redemption price
determined as set forth in the relevant Redemption Trust's prospectus. Units in
an Exchange or Conversion Trust will be sold to the Certificateholder at a price
based on the aggregate offer price of the securities in the Exchange or
Conversion trust portfolio (or for units of Equity Securities Trust, based on
the market value of the underlying securities in the trust portfolio) during the
initial public offering period of the Exchange or Conversion Trust; and after
the initial public offering period has been completed, based on the aggregate
bid price of the securities in the Exchange or Conversion Trust Portfolio if its
initial offering has been completed plus accrued interest (or for units of
Equity Securities Trust, based on the market value of the underlying securities
in the trust portfolio) and a reduced sales charge.

Except for Certificateholders who wish to exercise the
Exchange Privilege or Conversion Offer within the first five months of their
purchase of Units of the Exchange or Redemption Trust, any purchaser who
purchases Units under the Exchange Privilege or Conversion Offer will pay a
lower sales charge than that which would be paid for the Units by a new
investor. For Certificateholders who wish to exercise the Exchange Privilege or
Conversion Offer within the first five months of their purchase of Units of the
Exchange or Redemption Trust, the sales charge applicable to the purchase of
units of an Exchange or Conversion Trust shall be the greater of (i) the reduced
sales charge or (ii) an amount which when coupled with the sales charge paid by
the Certificateholder upon his original purchase of Units of the Exchange or
Redemption Trust would equal the sales charge applicable in the direct purchase
of units of an Exchange Trust.

In order to exercise the Exchange Privilege the Sponsor must
be maintaining a secondary market in the units of the available Exchange Trust.
The Conversion Offer is limited only to unit owners of any Redemption Trust.
Exercise of the Exchange Privilege and the Conversion Offer by
Certificateholders is subject to the following additional conditions: (i) at the
time of the Certificateholder's election to participate in the Exchange
Privilege or Conversion Offer, there must be units of the Exchange or Conversion
Trust available for sale, either under the initial primary distribution or in
the Sponsor's secondary market, (ii) exchanges will be effected in whole units
only, (iii) Units of the Mortgage Securities Trust may only be acquired in
blocks of 1,000 Units and (iv) Units of the Equity Securities Trust may only be
acquired in blocks of 100 Units. Certificateholders will not be permitted to
advance any funds in excess of their redemption in order to complete the
exchange. Any excess proceeds received from a Certificateholder for exchange or
from units being redeemed per conversion will be remitted to such
Certificateholder.

The Sponsor reserves the right to suspend, modify or terminate
the Exchange Privilege and/or the Conversion Offer. The Sponsor will provide
Certificateholders of the Trust with 60 days' prior written notice of any
termination or material amendment to the Exchange Privilege and/or the
Conversion Offer, provided that no notice need be given if (i) the only material
effect of an amendment is to reduce or eliminate the sales charge payable at the
time of the exchange, to add one or more series of the Trust eligible for the
Exchange Privilege or the Conversion Offer, to add any new unit investment trust
sponsored by ING Funds Distributor, Inc. or a sponsor controlled by or under
common control with ING Funds Distributor, Inc. or to delete a series which has
been terminated from eligibility for the Exchange Privilege and/or the
Conversion Offer, (ii) there is a suspension of the redemption of units of an
Exchange or Conversion Trust under Section 22(e) of the Investment Company Act
of 1940, or (iii) an Exchange Trust temporarily delays or ceases the sale of its
units because it is unable to invest amounts effectively in accordance with its
investment objectives, policies and restrictions. During the 60-day notice
period prior to the termination or material amendment of the Exchange Privilege
described above, the Sponsor will continue to maintain a secondary market in the
units of all Exchange Trusts that could be acquired by the affected
Certificateholders. Certificateholders may, during this 60-day period, exercise
the Exchange Privilege in accordance with its terms then in effect.

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<PAGE>

To exercise the Exchange Privilege, a Certificateholder should
notify the Sponsor of his desire to exercise his Exchange Privilege. To exercise
the Conversion Offer, a unit owner of a Redemption Trust should notify his
retail broker of his desire to redeem his Redemption Trust Units and use the
proceeds from the redemption to purchase Units of one or more of the Conversion
Trusts. If Units of a designated, outstanding series of an Exchange or
Conversion Trust are at the time available for sale and such Units may lawfully
be sold in the state in which the Certificateholder is a resident, the
Certificateholder will be provided with a current prospectus or prospectuses
relating to each Exchange or Conversion Trust in which he indicates an interest.
He may then select the Trust or Trusts into which he desires to invest the
proceeds from his sale of Units. The exchange transaction will operate in a
manner essentially identical to a secondary market transaction except that units
may be purchased at a reduced sales charge. The conversion transaction will be
handled entirely through the unit owner's retail broker. The retail broker must
tender the units to the trustee of the Redemption Trust for redemption and then
apply the proceeds to the redemption toward the purchase of units of a
Conversion Trust at a price based on the aggregate offer or bid side evaluation
per Unit of the Conversion Trust, depending on which price is applicable, plus
accrued interest and the applicable sales charge. The certificates must be
surrendered to the broker at the time the redemption order is placed and the
broker must specify to the Sponsor that the purchase of Conversion Trust Units
is being made pursuant to the Conversion Offer. The unit owner's broker will be
entitled to retail a portion of the sales charge.

Tax Consequences of the Exchange Privilege and the Conversion
Offer. A surrender of Units pursuant to the Exchange Privilege or the Conversion
Offer will constitute a "taxable event" to the Certificateholder under the
Internal Revenue Code. The Certificateholder will realize a tax gain or loss
that will be of a long- or short-term capital or ordinary income nature
dependent on the length of time the Units have been held and other factors. (See
"Tax Status".) A Certificateholder's tax basis in the Units acquired pursuant to
the Exchange Privilege or Conversion Offer will be equal to the purchase price
of such Units. Investors should consult their own tax advisors as to the tax
consequences to them of exchanging or redeeming units and participating in the
Exchange Privilege or Conversion Offer.

OTHER MATTERS
-------------

Legal Opinions. The legality of the Units offered hereby and
certain matters relating to Federal tax law have been passed upon by Paul,
Hastings, Janofsky & Walker LLP, 399 Park Avenue, New York, New York 10022, as
counsel for the Sponsor. Carter, Ledyard & Milburn, Two Wall Street, New York,
New York 10005 have acted as counsel for The Chase Manhattan Bank. Certain
matters relating to New Jersey tax law have been passed upon by Zeller and
Bryant, as special New Jersey counsel to the Sponsor.

Independent Accountants/Auditors. The financial statements of
the Trusts for the years ended June 30, 2000 and June 30, 1999 included in Part
A of this Prospectus have been examined by Ernst & Young LLP, independent
auditors. The financial statements have been so included in reliance on their
report given upon the authority of said firm as experts in accounting and
auditing. PricewaterhouseCoopers LLP has consented to the incorporation by
reference of their report on the statements of operations, changes in net assets
and financial highlights for the Trusts included in Part A of this Prospectus
for the period ended June 30, 1998.

Portfolio Supervisor. ING Mutual Funds Management Co. LLC, a
Delaware limited liability company, is a wholly-owned indirect subsidiary of ING
Group and is an affiliate of the Sponsor.

Performance Information. Total returns, average annualized
returns or cumulative returns for various periods of this Trust may be included
from time to time in advertisements, sales literature and reports to current or
prospective investors. Total return shows changes in Unit price during the
period plus reinvestment of dividends and capital gains, divided by the original
public offering price as of the date of calculation. Average

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<PAGE>

annualized returns show the average return for stated periods of longer than a
year. Sales material may also include an illustration of the cumulative results
of like annual investments during an accumulation period and like annual
withdrawals during a distribution period. Figures for actual portfolios will
reflect all applicable expenses and, unless otherwise stated, the maximum sales
charge. No provision is made for any income taxes payable. Returns may also be
shown on a combined basis. Trust performance may be compared to performance on a
total return basis of the Dow Jones Industrial Average, the S&P 500 Composite
Price Stock Index, or performance data from Lipper Analytical Services, Inc. and
Morningstar Publications, Inc. or from publications such as Money, The New York
Times, U.S. News and World Report, Business Week, Forbes or Fortune. As with
other performance data, performance comparisons should not be considered
representative of a Trust's relative performance for any future period.

DESCRIPTION OF BOND RATINGS*
---------------------------

Standard & Poor's Ratings Services. A brief description of the
applicable Standard & Poor's rating symbols and their meanings is as follows:

A Standard & Poor's corporate or municipal bond rating is a
current assessment of the creditworthiness of an obligor with respect to a
specific debt obligation. This assessment of creditworthiness may take into
consideration obligors such as guarantors, insurers, or lessees.

The bond rating is not a recommendation to purchase or sell a
security, inasmuch as it does not comment as to market price.

The ratings are based on current information furnished to
Standard & Poor's by the issuer and obtained by Standard & Poor's from other
sources it considers reliable. The ratings may be changed, suspended or
withdrawn as a result of changes in, or unavailability of, such information.

The ratings are based, in varying degrees, on the following
considerations:

(i) Likelihood of default-capacity and
willingness of the obligor as to the timely payment of interest and
repayment of principal in accordance with the terms of the obligation.

(ii) Nature of and provisions of the obligation.

(iii) Protection afforded by, and relative position
of, the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.

AAA -- This is the highest rating assigned by Standard &
Poor's to a debt obligation and indicates an extremely strong capacity to pay
principal and interest.

AA -- Bonds rated AA also qualify as high-quality debt
obligations. Capacity to pay principal and interest is very strong, and they
differ from AAA issues only in small degrees.

------------------
* As described by Standard & Poor's.

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<PAGE>

A -- Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.

BBB -- Bonds rated BBB are regarded as having an adequate
capacity to pay principal and interest. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay principal and interest for
bonds in this category than for bonds in the A category.

Plus (+) or Minus (-): To provide more detailed indications of
credit quality, the ratings from "AA" to "BB" may be modified by the addition of
a plus or minus sign to show relative standing within the major rating
categories.

NR: Indicates that no rating has been requested, that there is
insufficient information on which to base a rating or that S&P does not rate a
particular type of obligation as a matter of policy.

Provisional Ratings (Prov.) following a rating indicates the
rating is provisional, which assumes the successful completion of the project
being financed by the issuance of the bonds being rated and indicates that
payment of debt service requirements is largely or entirely dependent upon the
successful and timely completion of the project. This rating, however, while
addressing credit quality subsequent to completion, makes no comment on the
likelihood of, or the risk of default upon failure of, such completion.
Accordingly, the investor should exercise his own judgment with respect to such
likelihood and risk.

DESCRIPTION OF RATING ON THE UNITS*
----------------------------------

A Standard & Poor's rating on the units of an investment trust
(hereinafter referred to collectively as "units" and "fund") is a current
assessment of creditworthiness with respect to the investments held by such
fund. This assessment takes into consideration the financial capacity of the
issuers and of any guarantors, insurers, lessees, or mortgagors with respect to
such investments. The assessment, however, does not take into account the extent
to which fund expenses or portfolio asset sales for less than the fund's
purchase price will reduce payment to the unit holder of the interest and
principal required to be paid on the portfolio assets. In addition, the rating
is not a recommendation to purchase, sell, or hold units, inasmuch as the rating
does not comment as to market price of the units or suitability for a particular
investor.

Funds rated "AAA" are composed exclusively of assets that are
rated "AAA" by Standard & Poor's or have, in the opinion of Standard & Poor's,
credit characteristics comparable to assets that are rated "AAA", or certain
short-term investments. Standard & Poor's defines its AAA rating for such assets
as the highest rating assigned by Standard & Poor's to a debt obligation.
Capacity to pay interest and repay principal is very strong.

------------------
* As described by Standard & Poor's Corporation.

NY/302306.3
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<PAGE>

INDEX
-----

Title Page
----- ----

<S> <C>
Summary of Essential
Information............................................................... A-5
Financial and Statistical
Information............................................................... A-6
Information Regarding the Trust............................................. A-7
Audit and Financial Information............................................. F-1

The Trust................................................................... B-1
Risk Considerations........................................................ B-11
Public Offering............................................................ B-27
Estimated Long Term Return and
Estimated Current Return................................................. B-29
Rights of Certificateholders............................................... B-29
Tax Status................................................................. B-31
Liquidity.................................................................. B-35
Trust Administration....................................................... B-37
Trust Expenses and Charges................................................. B-40
Exchange Privilege and Conversion
Offer.................................................................... B-41
Other Matters.............................................................. B-43
Description of Bond Ratings................................................ B-43
Description of Rating on the Units......................................... B-45

</TABLE>

* * *

INSURED
MUNICIPAL SECURITIES TRUST
(Unit Investment Trust)
Prospectus

Dated: October 28, 2000

Sponsor:

ING Funds Distributor, Inc.
1475 Dunwoody Drive
West Chester, PA 19380
1-877-463-6464

Trustee:

The Chase Manhattan Bank
4 New York Plaza
New York, New York 10004
800-882-9898

Evaluator:

Kenny S&P
Evaluation Services
65 Broadway
New York, New York 10006

This Prospectus does not contain all of the information with respect to the
Trusts set forth in their registration statements filed with the Securities and
Exchange Commission, Washington, D.C. under the Securities Act of 1933 and to
which reference is hereby made. Information may be reviewed and copied at the
Commission's Public Reference Room, and information on the Public Reference Room
may be obtained by calling the SEC at 1-202-942-8090. Copies may be obtained
from the SEC by:

o visiting the SEC Internet address: http://www.sec.gov
------------------
o electronic request (after paying a duplicating fee) at the following E-mail
address: [email protected]
------------------
o writing: Public Reference Section of the Commission, 450 Fifth Street N.W.,
Washington, D.C. 20549-6009

This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in any state to any person to whom
it is not lawful to make such offer in such state.

* * *

No person is authorized to give any information or to make any
representations not contained in Parts A and B of this Prospectus; and any
information or representation not contained herein must not be relied upon as
having been authorized by the Trust, the Trustee, the Evaluator, or the Sponsor.
The Trust is registered as a unit investment trust under the Investment Company
Act of 1940. Such registration does not imply that the Trust or any of its Units
have been guaranteed, sponsored, recommended or approved by the United States or
any state or any agency or officer thereof.

NY/302306.3

<PAGE>

PART II

ADDITIONAL INFORMATION NOT REQUIRED
IN PROSPECTUS

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 on Form S-6.
The Prospectus consisting of pages.
Undertaking to file Reports.
Signatures.
Consent of Independent Accountants/Auditors.
Consent of Counsel.
Consent of New Jersey Counsel (included in Exhibit 99.3.2).
Consent of the Evaluator (included in Exhibit 99.5.1).

The following exhibits:

99.1.1 -- Reference Trust Agreements including certain Amendments to the
Trust Indenture and Agreement referred to under Exhibit 1.1.1
below (filed as Exhibit 99.1.1 to Post-Effective Amendments Nos. 6
and 5 to Form S-6 Registration Statements Nos. 33-37297 and
33-41923 of Insured Municipal Securities Trust, New Jersey
Navigator Insured Series 2 and Series 27 & New Jersey Navigator
Insured Series 6, respectively, on October 28, 1996 and
incorporated herein by reference).

99.1.1.1 -- Trust Indenture and Agreement for Insured Municipal Securities
Trust, 47th Discount Series and Series 20 (and Subsequent Series)
dated June 16, 1989 (filed as Exhibit 99.1.1.1 to Post-Effective
Amendment No. 7 to Form S-6 Registration Statement No. 33-28384 of
Insured Municipal Securities Trust, Series 20 on April 25, 1996
and incorporated herein by reference).

99.1.3.4 -- Certificate of Incorporation of ING Funds Distributor, Inc. (filed
as Exhibit 99.1.3.5 to Amendment No. 2 to Form S-6 Registration
Statement No. 333-31048 on March 28, 2000 and incorporated herein
by reference).

99.1.3.5 -- By-Laws of ING Funds Distributor, Inc. (filed as Exhibit 99.1.3.6
to Form S-6 Registration Statement No. 333-31048 on March 28, 2000
and incorporated herein by reference).

99.1.4 -- Form of Agreement Among Underwriters dated June 16, 1989 (filed as
Exhibit 99.1.4 to Post-Effective Amendment No. 7 to Registration
Statement Nos. 33-29313 and 33-30144 of Municipal Securities
Trust, Series 45 and Series 46 on October 25, 1996 and
incorporated herein by reference).

99.1.5 -- Form of Insurance Policy of Financial Guaranty Insurance Company
for Sponsor-Insured Bonds (filed as Exhibit 99.1.5 to
Post-Effective Amendment No. 7 to Form S-6 Registration Statement
No. 33-26426 of Insured Municipal Securities Trust, Series 15 on
April 25, 1996 and incorporated herein by reference).

99.1.5.1 -- Form of Insurance Policy of Bond Investors Guaranty for
Sponsor-Insured Bonds (filed as Exhibit 99.1.5.1 to Post-Effective
Amendment No. 7 to Form S-6 Registration Statement No. 33-26426 of
Insured Municipal Securities Trust, Series 15 on April 25, 1996
and incorporated herein by reference).

NY/306536.1
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<PAGE>

99.1.5.2 -- Form of Insurance Policy of Municipal Bond Investors Assurance
Corporation (filed as Exhibit 99.1.5.2 to Post-Effective Amendment
No. 7 to Form S-6 Registration Statement No. 33-26426 of Insured
Municipal Securities Trust, Series 15 on April 25, 1996 and
incorporated herein by reference).

99.2.1 -- Form of Certificate dated June 16, 1989 (filed as Exhibit 99.2.1
to Post-Effective Amendment No. 7 to Registration Statement Nos.
33-29313 and 33-30144 of Municipal Securities Trust, Series 45 and
Series 46 on October 25, 1996 and incorporated herein by
reference).

99.3.1 -- Opinion of Battle Fowler LLP as to the legality of the securities
being registered, including their consent to the filing thereof
and to the use of their name under the headings "Tax Status" and
"Legal Opinions" in the Prospectus, and to the filing of their
opinion regarding tax status of the Trust (filed as Exhibit 99.3.1
to Post-Effective Amendments Nos. 5 and 6 to Form S-6 Registration
Statements Nos. 33-41923 and 33-37297 of Insured Municipal
Securities Trust, Series 27 & New Jersey Navigator Insured Series
6 and New Jersey Navigator Insured Series 2, respectively, on
October 28, 1996 and incorporated herein by reference).

99.3.2 -- Opinion of Freeman, Zeller & Bryant, Special New Jersey Counsel
including their consent to the filing thereof and to the use of
their name in the Prospectus (filed as Exhibit 99.3.2 to
Post-Effective Amendments Nos. 5 and 6 to Form S-6 Registration
Statements Nos. 33-41923 and 33-37297 of Insured Municipal
Securities Trust, Series 27 & New Jersey Navigator Insured Series
6 and New Jersey Navigator Insured Series 2, respectively, on
October 28, 1996 and incorporated herein by reference).

*99.5.1 -- Consent of the Evaluator.

99.6.0 -- Powers of Attorney of ING Funds Distributor, Inc., by its officers
and a majority of its Directors (filed as Exhibit 99.6.0 to Form
S-6 Registration Statement No. 333-31048 on February 24, 2000 and
incorporated herein by reference).

99.11.0 -- Code of Ethics of ING Mutual Funds Management Co. LLC (filed as
Exhibit 99.11.0 to Post-Effective Amendment No. 8 to Form S-6
Registration Statement No. 33-45890 on October 27, 2000 and
incorporated herein by reference).

--------

* Being filed by this Amendment.

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II-2

<PAGE>

UNDERTAKING TO FILE REPORTS

Subject to the terms and conditions of Section 15(d) of the
Securities Exchange Act of 1934, the undersigned registrant hereby undertakes to
file with the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrants, Insured Municipal Securities Trust, New Jersey Navigator Insured
Series 2 and Series 27 & New Jersey Navigator Insured Series 6 certify that they
have met all of the requirements for effectiveness of this Post-Effective
Amendment to the Registration Statements pursuant to Rule 485(b) under the
Securities Act of 1933. The registrants have duly caused this Post-Effective
Amendment to the Registration Statements to be signed on their behalf by the
undersigned, thereunto duly authorized, in the City of New York and State of New
York on the 23rd day of October, 2000.

INSURED MUNICIPAL SECURITIES TRUST,
NEW JERSEY NAVIGATOR INSURED SERIES 2 AND
SERIES 27 & NEW JERSEY NAVIGATOR INSURED SERIES 6
(Registrants)

ING FUNDS DISTRIBUTOR, INC.
(Depositor)

By: /s/ PETER J. DEMARCO
------------------------
Peter J. DeMarco
(Authorized Signatory)

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons who constitute the principal officers and a majority of
the directors of ING Funds Distributor, Inc., the Depositor, in the capacities
and on the dates indicated.

Name Title Date
---- ----- ----
DONALD E. BROSTROM Chief Financial Officer, ) October 23, 2000
Treasurer and Director )
ERIC M. RUBIN Director )
)
)By: /s/ PETER J. DEMARCO
--------------------
) Peter J. DeMarco
) Attorney-in-Fact*

--------

* Executed copies of Powers of Attorney were filed as Exhibit 99.6.0 to Form S-6
Registration Statement No. 333-31048 on February 24, 2000.

NY/306536.1
II-3

INDEPENDENT AUDITORS' CONSENT

We consent to the reference to our firm under the caption "Independent Auditors"
and to the use of our report dated October 16, 2000, in the Registration
Statement and related Prospectus of Insured Municipal Securities Trust, New
Jersey Navigator Insured Series 2; Insured Municipal Securities Trust, Series 27
and Insured Municipal Securities Trust, New Jersey Navigator Insured Series 6.

ERNST & YOUNG LLP

New York, New York
October 27, 2000

NY/306536.1
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<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Post-Effective Amendment to the registration statement
on Form S-6 of our reports dated September 15, 1999, relating to the financial
statements and financial highlights for the two years ended June 30, 1999 of the
Insured Municipal Securities Trust, New Jersey Navigator Insured Series 2;
Insured Municipal Securities Trust, Series 27; and Insured Municipal Securities
Trust, New Jersey Navigator Insured Series 6 which appear in such Prospectus. We
also consent to the reference to us under the heading "Independent Accountants"
in the Prospectus.

PricewaterhouseCoopers LLP
Boston, MA
October 25, 2000

NY/306536.1
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<PAGE>

CONSENT OF COUNSEL

We hereby consent to the use of our name under the heading "Legal
Matters" in the Prospectus included in the Registration Statement.

PAUL, HASTINGS, JANOFSKY & WALKER LLP

New York, New York
October 27, 2000

NY/306536.1
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