INSURED MUNICIPALS SEC TR SE 29 NY NA IN SE 11 NJ NA IN SE 8, 485BPOS, 1998-10-28

INSURED MUNICIPALS SEC TR SE 29 NY NA IN SE 11 NJ NA IN SE 8
485BPOS, 1998-10-28

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As filed with the Securities and Exchange Commission on October 28, 1998
Registration No. 33-45890*
- -------------------------------------------------------------------------------

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, SERIES 29,
NEW YORK NAVIGATOR INSURED SERIES 11 &
NEW JERSEY NAVIGATOR INSURED SERIES 8,
SERIES 30 & NEW YORK NAVIGATOR INSURED SERIES 12
AND NEW YORK NAVIGATOR INSURED SERIES 15
& NEW JERSEY NAVIGATOR INSURED SERIES 11

B. Name of depositors: REICH & TANG DISTRIBUTORS, INC.
GRUNTAL & CO., L.L.C.

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

Reich & Tang Distributors, Inc. Gruntal & Co., L.L.C.
600 Fifth Avenue One Liberty Plaza
New York, New York 10020 New York, New York 10006

D. Name and complete address of agent for service:

PETER J. DeMARCO LEE FENSTERSTOCK Copy of comments to:
Executive Vice President President MICHAEL R. ROSELLA, ESQ.
Reich & Tang Gruntal & Co., L.L.C. Battle Fowler LLP
Distributors, Inc. One Liberty Plaza 75 East 55th Street
600 Fifth Avenue New York, NY 10006 New York, NY 10022
New York, New York 10020 (212) 856-6858

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

x immediately upon filing pursuant to paragraph (b) of Rule 485.
on ( date ) 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,
Series 29, New York Navigator Insured Series 11 & New Jersey Navigator
Insured Series 8, Series 30 & New York Navigator Insured Series 12, and New
York Navigator Insured Series 15 & New Jersey Navigator Insured Series 11
covered by prospectuses heretofore filed as part of separate registration
statements on Form S-6 (Registration Nos. 33-45890, 33-53124, and 33-50891
respectively) under the Act. This filing constitutes Post- Effective
Amendment No. 6 for Insured Municipal Securities Trust, Series 29, New York
Navigator Insured Series 11 & New Jersey Navigator Insured Series 8 and
Series 30 & New York Navigator Insured Series 12 and Post-Effective Amendment
No. 5 for Insured Municipal Securities Trust, New York Navigator Insured
Series 15 & New Jersey Navigator Insured Series 11.

Each of the Registrants filed a Rule 24f-2 Notice for its fiscal year
ended June 30, 1998 on or about September 14, 1998.

138866.1
<PAGE>

Prospectus Part A Dated October 28, 1998

INSURED MUNICIPAL SECURITIES TRUST

SERIES 29

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

The Trust is a unit investment trust designated Series 29 ("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 Sponsors are Reich & Tang
Distributors, Inc. and Gruntal & Co., L.L.C. (sometimes referred to as the
"Sponsor" or the "Sponsors"). 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, 1998 (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

144375.1

<PAGE>

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
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 1/4368th 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"), 47.9%; Financial Guaranty Insurance Company
("Financial Guaranty"), 23.3%; Financial Security Assurance, Inc. ("Financial
Security"), 23.0%; and MBIA Corp., 5.8%.

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 4.27% of the Public
Offering Price, or 4.46% 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

A-2
144375.1

<PAGE>

Offering Price per Unit would have been $1,103.01 plus accrued interest of
$10.32 under the monthly distribution plan, $14.83 under the semi-annual
distribution plan and $42.83 under the annual distribution plan, for a total of
$1,113.33, $1,117.84 and $1,145.84, 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

A-3
144375.1

<PAGE>

"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 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 4.27% of
the Public Offering Price (4.46% 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
144375.1

<PAGE>

<TABLE>
<CAPTION>
INSURED MUNICIPAL SECURITIES TRUST
SERIES 29

SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 30, 1998

<S> <C>

Date of Deposit*: July 23, 1992 Minimum Principal Distribution:
Principal Amount of Bonds ... $4,480,000 $1.00 per Unit.
Number of Units ............. 4,368 Weighted Average Life to Maturity:
Fractional Undivided Inter- 8.6 Years.
est in Trust per Unit ..... 1/4368 Minimum Value of Trust:
Principal Amount of Trust may be terminated if value
Bonds per Unit ............ $1,025.64 of Trust is less than $2,400,000
Secondary Market Public in principal amount of Bonds.
Offering Price** Mandatory Termination Date:
Aggregate Bid Price The earlier of December 31, 2041
of Bonds in Trust ....... $4,612,072+++ or the disposition of the last
Divided by 4,368 Units .... $1,055.88 Bond in the Trust.
Plus Sales Charge of 4.27% Trustee***: The Chase Manhattan
of Public Offering Price. $47.13 Bank.
Public Offering Price Trustee's Annual Fee: Monthly
per Unit ................ $1,103.01+ plan $1.00 per $1,000; semi-annual
Redemption and Sponsor's plan $.52 per $1,000; and annual
Repurchase Price plan is $.33 per $1,000.
per Unit .................. $1,055.88+ Evaluator: Kenny S&P Evaluation
+++ Services.
++++ Evaluator's Fee for Each
Excess of Secondary Market Evaluation: Minimum of $8 plus
Public Offering Price $.25 per each issue of Bonds in
over Redemption and excess of 50 issues (treating
Sponsor's Repurchase separate maturities as separate
Price per Unit ............ $47.13++++ issues).
Difference between Public Sponsors: Reich & Tang
Offering Price per Unit Distributors, Inc. and Gruntal &
and Principal Amount per Co., L.L.C.
Unit Premium/(Discount) ... $77.37 Sponsors' Annual Fee: Maximum of
Evaluation Time: 4:00 p.m. $.25 per $1,000 principal amount
New York Time. of Bonds (see "Trust Expenses and
Charges" in Part B of this
Prospectus).

</TABLE>

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

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

Gross annual interest income# ......... $55.19 $55.19 $55.19
Less estimated annual fees and
expenses ............................ 2.00 1.49 1.78
Estimated net annual interest ------ ------ ______
income (cash)# ...................... $53.19 $53.70 $53.41
Estimated interest distribution# ...... 4.43 26.85 53.41
Estimated daily interest accrual# ..... .1478 .1492 .1484
Estimated current return#++ ........... 4.82% 4.87% 5.00%
Estimated long term return++ .......... 3.10% 3.15% 3.12%
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
144375.1

<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, 1998 may be reported at
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 $10.32 monthly, $14.83
semi-annually and $42.83 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.

<TABLE>
<CAPTION>
FINANCIAL AND STATISTICAL INFORMATION

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

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

June 30, 1996 5,312 $1,040.81 $55.60 $56.23 -0- -0-
June 30, 1997 4,640 1,052.20 54.67 55.18 $57.16 $1.93
June 30, 1998 4,368 1,069.20 53.81 54.36 -0- 2.05

</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
144375.1

<PAGE>

INFORMATION REGARDING THE TRUST
AS OF JUNE 30, 1998

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

The portfolio of the Trust consists of 11 issues representing
obligations of issuers located in 8 states. The Sponsors have not participated
as a sole underwriter or manager, co-manager or member of an underwriting
syndicate 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; none are hospital revenue bonds; none were issued in connection
with the financing of nuclear generating facilities; and none 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 optional 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). Four issues representing $1,765,000 of the aggregate principal amount
of the Bonds are general obligation bonds. All seven of the remaining issues
representing $2,715,000 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: Education Facility 1, Highway 1, Lease Revenue 1, Solid Waste 1,
Student Loan 1, Transportation 1 and Utilities 1. For an explanation of the
significance of these factors see "The Trust-- Portfolio" in Part B of this
Prospectus.

As of June 30, 1998, $1,290,000 (approximately 28.8% of the aggregate
principal amount of the Bonds) were original issue discount bonds. Of these
original issue discount bonds, $590,000 (approximately 13.2% 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 41.1% were purchased at a premium and approximately 30.1% 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, 1998 to September 15,
1998, the entire principal amount of the Bond in portfolio no. 4 was
sold and is no longer contained in the Trust. 62 Units were redeemed
from the Trust.

A-7

144375.1

<PAGE>

Report of Independent Accountants

To the Sponsor, Trustee and Certificateholders of
Insured Municipal Securities Trust, Series 29

In our opinion, the accompanying statement of net assets, including the
portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Insured Municipal Securities Trust,
Series 29 (the "Trust") at June 30, 1998, the results of its operations, the
changes in its net assets and the financial highlights for the three years then
ended, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at June
30, 1998 by correspondence with the Trustee, provide a reasonable basis for the
opinion expressed above.

/s/PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Boston, MA
September 22, 1998

<PAGE>

Insured Municipal Securities Trust, Series 29
Portfolio
June 30, 1998
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Title Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount of Bonds (1) Maturity(2) Ref.-Refunding Value(3)
<S> <C> <C> <C> <C> <C> <C>
1 $700,000 Alaska Student Ln. Corp. AAA 6.125% No Sinking Fund $739,410
State Asstd. Rev. Bonds 7/01/2005 07/01/02 @ 100 Ref.
1992 Series A (AMT)
(AMBAC)

2 600,000 Adams Cnty. Co. Schl. AAA 6.125 No Sinking Fund 653,670
District No. 12 Genl. 12/15/2007 12/15/03 @ 100 Ref.
Oblig. Rfndg. Rev. Bonds
Series 1992 (Financial
Guaranty)

3 70,000 Escambia Cnty. Fla. Schl. AAA 6.250 2/01/05 @ 100 S.F. 74,711
Bd. Certs. of Part. 2/01/2007 2/01/02 @ 100 Ref.
Series 1992 (Financial
Security)

4 25,000 Lee Cnty. Fla. Solid AAA 6.900 No Sinking Fund 27,428
Waste Sys. Rev. Bonds 10/01/2003 10/01/01 @ 102 Ref.
Series 1991 A (AMT)(MBIA Corp.)

5 445,000 St. John's Cnty. Fla. AAA 6.000 10/01/04 @ 100 S.F. 472,052
Trans. Imprvmnt. Rfndg. 10/01/2007 10/01/00 @ 102 Ref.
Rev. Bonds Series 1992
(Financial Guaranty)

6 205,000 Will Cnty. Ill. Forest AAA 6.000 No Sinking Fund 219,309
Preserve Genl. Oblig. 12/01/2007 12/01/02 @ 100 Ref.
Rfndg. Rev. Bonds Series
1992 (AMBAC)

7 650,000 State of Iowa Certs. of AAA 6.500 7/01/03 @ 100 S.F. 714,298
Part. Series 1992A (AMBAC) 07/01/2006 7/01/02 @ 102 Ref.

8 700,000 Parish of Iberville La. AAA 6.000 No Sinking Fund 760,284
Genl. Oblig. Schl. Rfndg. 12/01/2007 10/01/02 @ 102 Ref.
Bonds Cnsldtd. Schl.
Dstrct. No. 5 Series 1992
(Financial Security)

9 260,000 West Ouchita Parish La. AAA 6.700 No Sinking Fund 282,012
Sch. Dstrct. Genl. Oblig. 3/01/2006 3/01/01 @ 102 Ref.
Rev. Rfndg. Bonds Series
1991 (Financial Security)
</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

Insured Municipal Securities Trust, Series 29
Portfolio
June 30, 1998
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Title Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount of Bonds (1) Maturity(2) Ref.-Refunding Value(3)
<S> <C> <C> <C> <C> <C> <C>
10 $235,000 Brownsville Tx. Utils. AAA 6.250% No Sinking Fund $ 252,768
Sys. Priority Rev. Rfndg. 9/01/2007 9/01/02 @ 100 Ref.
Bonds Series 1992 (MBIA
Corp.)

11 590,000 Mi. State Trunk Line Fund AAA 0.000 No Sinking Fund 389,099
Rev. Bonds Series 1992 A 10/01/2007 None
(AMBAC)
---------- ----------
$4,480,000 Total Investments (Cost (3) $4,273,664) $4,585,041
========== ==========
</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

Insured Municipal Securities Trust, Series 29
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 meanings 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, 1998, the net unrealized appreciation of all bonds was
comprised of the following:

Gross unrealized appreciation $311,377
Gross unrealized depreciation -
--------
Net unrealized appreciation $311,377
========

(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 or
unanticipated revenues).

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

<PAGE>

Insured Municipal Securities Trust, Series 29

Statement of Net Assets
June 30, 1998
- --------------------------------------------------------------------------------

Investments in Securities,
at Market Value (Cost $4,273,664) $ 4,585,041
--------------
Other Assets
Accrued Interest 74,683
Cash 10,552
--------------
Total Other Assets 85,235
--------------
Net Assets (4,368 Units of Fractional Undivided
Interest Outstanding, $1,069.20 per Unit) $ 4,670,276
==============

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

<PAGE>

Insured Municipal Securities Trust, Series 29
Statement of Operations
- --------------------------------------------------------------------------------

For the Years Ended June 30,
1998 1997 1996

Investment Income
Interest $ 268,608 $ 290,454 $ 325,653
----------- ----------- ----------
Expenses
Trustee's Fees 6,824 6,797 6,372
Evaluator's Fee 2,369 2,182 2,200
Sponsor's Advisory Fee 1,219 1,361 1,384
----------- ----------- ----------
Total Expenses 10,412 10,340 9,956
----------- ----------- ----------
Net Investment Income 258,196 280,114 315,697
----------- ----------- ----------
Realized and Unrealized Gain (Loss)
Realized Gain on
Investments 8,688 4,894 1,541

Unrealized Appreciation
(Depreciation) on Investments 62,144 39,994 41,477
----------- ----------- ----------
Net Gain on Investments 70,832 44,888 43,018
----------- ----------- ----------
Net Increase
in Net Assets
Resulting From Operations $ 329,028 $ 325,002 $ 358,715
=========== =========== ==========

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

<PAGE>

Insured Municipal Securities Trust, Series 29
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------

For the Years Ended June 30,
1998 1997 1996

Operations
Net Investment Income $ 258,196 $ 280,114 $ 315,697
Realized Gain
on Investments 8,688 4,894 1,541
Unrealized Appreciation
(Depreciation) on Investments 62,144 39,994 41,477
---------- ---------- ----------
Net Increase in
Net Assets Resulting
From Operations 329,028 325,002 358,715
---------- ---------- ----------
Distributions to Certificateholders
Investment Income 242,089 261,284 299,660
Principal 9,264 9,270 ----

Redemptions
Interest 3,360 10,174 1,162
Principal 286,260 690,842 114,793
---------- ---------- ----------
Total Distributions
and Redemptions 540,973 971,570 415,615
---------- ---------- ----------
Total (Decrease) (211,945) (646,568) (56,900)

Net Assets
Beginning of Year 4,882,221 5,528,789 5,585,689
---------- ---------- ----------
End of Year (Including
Undistributed Net Investment
Income of $160,205, $147,458
and $138,802, Respectively) $4,670,276 $4,882,221 $5,528,789
========== ========== ==========

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

<PAGE>

Insured Municipal Securities Trust, Series 29
Financial Highlights
- --------------------------------------------------------------------------------

Selected data for a unit of the Trust outstanding: *
For the years ended June 30,
1998 1997 1996

Net Asset Value, Beginning of Year** $ 1,052.20 $ 1,040.81 $ 1,030.19
---------- ---------- ----------
Interest Income 59.63 58.37 60.68
Expenses (2.31) (2.08) (1.86)
---------- ---------- ----------
Net Investment Income 57.32 56.29 58.82
---------- ---------- ----------
Net Gain or Loss on Investments(1) 16.24 11.51 7.85
---------- ---------- ----------
Total from Investment Operations 73.56 67.80 66.67
---------- ---------- ----------
Less Distributions
to Certificateholders
Income 53.75 52.51 55.83
Principal 2.06 1.86 ----
for Redemptions
Interest .75 2.04 .22
---------- ---------- ----------
Total Distributions 56.56 56.41 56.05
---------- ---------- ----------
Net Asset Value, End of Year** $ 1,069.20 $ 1,052.20 $ 1,040.81
========== ========== ==========

(1) Net gain or loss on investments is a result of changes in outstanding
units since July 1, 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 4,504 ([4,640 + 4,368]/2) for 1998, 4,976 ([5,312 +
4,640]/2) for 1997 and 5,367 ([5,422 + 5,312]/2) for 1996.

** Based upon actual units outstanding.

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

<PAGE>

Insured Municipal Securities Trust, Series 29
Notes to Financial Statements
- --------------------------------------------------------------------------------

1. Organization

Insured Municipal Securities Trust, Series 29 (the "Trust"), was
organized on July 23, 1992 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 September 28, 1995, Reich & Tang Distributors, Inc. ("Reich &
Tang") has become the successor sponsor (the "Sponsor") to certain of
the unit investment trusts previously sponsored by Bear, Stearns & Co.
Inc. As successor Sponsor, Reich & Tang has assumed all of the
obligations and rights of Bear, Stearns & Co. Inc., the previous
sponsor. Effective September 2, 1995, United States Trust Company of
New York was merged into The Chase Manhattan Bank ("Chase" or the
"Trustee"). Accordingly, Chase is the successor trustee of the Trust.

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.

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.

<PAGE>

Insured Municipal Securities Trust, Series 29
Notes to Financial Statements
- --------------------------------------------------------------------------------

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 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).

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, 1998, 1997 and 1996, 272,
672, and 110 units were redeemed, respectively.

The Trust pays an annual fee for trustee services rendered by the
Trustee that ranges from $.33 to $1.00 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, 1998, 1997 and 1996, the "Trustee's Fees" are
comprised of Trustee fees of $4,413, $4,763 and $4,829 and other
expenses of $2,411, $2,034, and $1,543, respectively. The other
expenses include professional, printing and miscellaneous fees.

<PAGE>

Insured Municipal Securities Trust, Series 29
Notes to Financial Statements
- --------------------------------------------------------------------------------

5. Net Assets

At June 30, 1998, the net assets of the Trust represented the interest
of Certificateholders as follows:

Original cost to Certificateholders $ 6,165,855
Less Initial Gross Underwriting Commission 302,127
---------------
5,863,728
Accumulated Cost of Securities Sold,
Matured or Called (1,692,064)
Net Unrealized Appreciation 311,377
Undistributed Net Investment Income 160,205
Undistributed Proceeds from Investments 27,030
---------------
Total $ 4,670,276
===============

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 $102,000

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, 1998

INSURED MUNICIPAL SECURITIES TRUST
NEW YORK NAVIGATOR INSURED

SERIES 11

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

The Trust is a unit investment trust designated Series 11
("New York 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 York State and City personal 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 Sponsors are Reich & Tang Distributors, Inc. and
Gruntal & Co., L.L.C. (sometimes referred to as the "Sponsor" or the
"Sponsors"). 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, 1998 (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.

144657.1

<PAGE>

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 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 each Trust, and the
cost of such Bonds to that 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 1/3139th 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
Sponsors in the secondary market.

INSURANCE. Each of the Bonds in the New York Navigator Trust
is insured by a municipal bond guaranty insurance policy obtained by the
Sponsors (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 York Navigator Trust see
"Portfolio Supervision" in Part B of this Prospectus. The premiums for the
Navigator Sponsor-Insured Bonds are obligations of the Sponsors. Additionally,
some of the Bonds in the New York 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 York 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").

A-2

144657.1

<PAGE>

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 York Navigator Trust are covered
by insurance obtained by the Sponsors from MBIA Corp. and 63.8% of the Bonds in
the New York Navigator Trust are Pre-Insured Bonds. The approximate percentage
of the aggregate principal amount of the Portfolio that is insured by each
Insurance Company with respect to Pre-Insured Bonds is as follows: AMBAC
Indemnity Corp. ("AMBAC"), 33.4%; Financial Guaranty Insurance Company
("Financial Guaranty"), 9.8%; Financial Security Assurance Inc. ("Financial
Security"), 8.6%; and MBIA Corp., 12.0%.

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 3.60%
of the Public Offering Price, or 3.73% 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 for sale on the Evaluation Date, the Public Offering
Price per Unit would have been $1,032.71 plus accrued interest of $7.17 under
the monthly distribution plan, $11.96 under the semi-annual distribution plan
and $41.22 under the annual distribution plan, for a total of $1,039.88,
$1,044.67 and $1,073.93, 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

144657.1

<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
Sponsors 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 Sponsors, although not obligated to do
so, intend 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 plus a sales charge of 3.60% of
the Public Offering Price (3.73% 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

144657.1

<PAGE>

INSURED MUNICIPAL SECURITIES TRUST
NEW YORK NAVIGATOR INSURED
SERIES 11

SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 30, 1998

<TABLE>
<S> <C> <C>
Date of Deposit*: July 23, 1992 Weighted Average Life to
Principal Amount of Bonds. $2,915,000 Maturity: 8.6 Years.
Number of Units .......... 3,139 Minimum Value of Trust:
Fractional Undivided Inter- Trust may be terminated if
est in Trust per Unit .. 1/3139 value of Trust is less than
Principal Amount of $1,600,000 in principal amount
Bonds per Unit ......... $928.64 of Bonds.
Secondary Market Public Mandatory Termination Date:
Offering Price** The earlier of December 31,
Aggregate Bid Price 2041 or the disposition of the
of Bonds in Trust .... $3,124,956++++ last Bond in the Trust.
Divided by 3,139 Units.. $995.53 Trustee***: The Chase Manhattan
Plus Sales Charge Bank.
of 3.60% of Public Trustee's Annual Fee: Monthly
Offering Price........ $37.18 plan $1.14 per $1,000; semi-
Public Offering Price annual plan $.67 per $1,000;
per Unit ............. $1,032.71+ and annual plan is $.40 per
Redemption and Sponsors' $1,000.
Repurchase Price Evaluator: Kenny S&P Evaluation
per Unit ............... $995.53+ Services.
+++ Evaluator's Fee for Each
++++ Evaluation: Minimum of $8 plus
Excess of Secondary Market $.25 per each issue of Bonds in
Public Offering Price excess of 50 issues (treating
over Redemption and separate maturities as separate
Sponsors' Repurchase issues).
Price per Unit ......... $37.18++++ Sponsors: Reich & Tang
Difference between Public Distributors, Inc. and Gruntal
Offering Price per Unit & Co., L.L.C.
and Principal Amount per Sponsors' Annual Fee: Maximum
Unit Premium/(Discount) $104.07 of $.25 per $1,000 principal
Evaluation Time: 4:00 p.m. amount of Bonds (see "Trust
New York Time. Expenses and Charges" in Part B
Minimum Principal Distribution: of this Prospectus).
$1.00 per Unit.

</TABLE>

PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED

<TABLE>
<CAPTION>
Monthly Semi-Annual Annual
Option Option Option
------ ------ ------
<S> <C> <C> <C> <C>

Gross annual interest income# ......... $59.29 $59.29 $59.29
Less estimated annual fees and
expenses ............................ 2.30 1.81 1.56
Estimated net annual interest ______ ______ ______
income (cash)# ...................... $56.99 $57.48 $57.73
Estimated interest distribution# ...... 4.75 28.74 57.73
Estimated daily interest accrual# ..... .1583 .1597 .1604
Estimated current return#++ ........... 5.52% 5.56% 5.59%
Estimated long term return++ .......... 3.14% 3.19% 3.22%
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

144657.1

<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, 1998 may be reported in
the Summary of Essential Information as if they had been distributed as
of year-end.

+ Plus accrued interest to the expected date of settlement (approximately
three business days after purchase) of $7.17 monthly, $11.96
semi-annually and $41.22 annually.

++++ 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:

<TABLE>
<CAPTION>
Distribu-
tions of
Distributions of Interest Principal
During the Period (per Unit) 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, 1996 3,880 $1,008.58 $61.35 $61.93 $62.26 -0-
June 30, 1997 3,531 1,055.88 58.22 58.78 59.57 $14.00
June 30, 1998 3,139 1,006.45 60.62 58.12 58.55 7.57

</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

144657.1

<PAGE>

INFORMATION REGARDING THE TRUST
AS OF JUNE 30, 1998

DESCRIPTION OF PORTFOLIO

The portfolio of the Trust consists of 12 issues representing
obligations of 7 issuers located in the state of New York. The Sponsor has
participated as a sole underwriter or manager, co-manager or member of an
underwriting syndicate from which none of the initial aggregate principal amount
of the Bonds were acquired. Approximately 5.1% of the Bonds are obligations of
state and local housing authorities; approximately 7.5% are hospital revenue
bonds; none were issued in connection with the financing of nuclear generating
facilities; and none were "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 optional 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). Two issues representing $600,000 of the
principal amount of the Bonds are general obligation bonds. All ten of the
remaining issues representing $2,315,000 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: Bridge and Tunnel 2, Commuter Facility 2, Hospital
2, Multi-Family Housing 1, Transit 1, University 1 and Water 1. For an
explanation of the significance of these factors see "The Trust--Portfolio" in
Part B of this Prospectus.

As of June 30, 1998, $200,000 (approximately 6.9% of the
aggregate principal amount of the Bonds) were original issue discount bonds. Of
these original issue discount bonds, none 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 26.9% of the aggregate
principal amount of the Bonds in the Trust were purchased at a "market" discount
from par value at maturity, approximately 55.1% were purchased at a premium and
approximately 11.1% 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.

A-7

144657.1

<PAGE>

Report of Independent Accountants

To the Sponsor, Trustee and Certificateholders of
Insured Municipal Securities Trust, New York Navigator Insured Series 11

In our opinion, the accompanying statement of net assets, including the
portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Insured Municipal Securities Trust,
New York Navigator Insured Series 11 (the "Trust") at June 30, 1998, the results
of its operations, the changes in its net assets and the financial highlights
for the three years then ended, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1998 by correspondence with the Trustee,
provide a reasonable basis for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Boston, MA
September 22, 1998

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 11
Portfolio
June 30, 1998
- -------------------------------------------------------------------------------

2 150,000 N.Y. State Hsg. Finc. AAA 7.650 No Sinking Fund 166,654
Agncy. Serv. Cntrct. 3/15/2005 3/15/01 @ 102 Ref.
Oblig. Rev. Bonds 1991
Series A (MBIA Corp.)

3 120,000 N.Y. State Med. Care AAA 7.750 2/15/11 @ 100 S.F. 129,541
Facs. Finc. Agncy. 2/15/2022 2/15/00 @ 102 Ref.
Mental Hlth. Servs.
Facs. Imprvmnt. Rev.
Bonds 1990 Series A
(MBIA Corp.)

4 100,000 N.Y. State Med. Care AAA 6.200 No Sinking Fund 108,151
Facs. Finc. Agncy. 8/15/2022 8/15/02 @ 102 Ref.
Hosp. & Nrsg. Home FHA
Insrd. Mtg. Rev. Bonds
1992 Series B (MBIA
Corp.)

5 275,000 Metro. Trans. Auth. of AAA 6.000 7/01/10 @ 100 S.F. 284,735
N.Y. Trans. Facs. Rev. 7/01/2011 7/01/00 @ 100 Ref.
Bonds 1990 Series I
(MBIA Corp.)

6 50,000 Metro. Trans. Auth. of AAA 6.125 7/01/10 @ 100 S.F. 53,917
N.Y. Cmmtr. Facs. Rev. 7/01/2012 7/01/02 @ 102 Ref.
Bonds 1992 Series A
(MBIA Corp.)

7 300,000 Metro. Trans. Auth. of AAA 6.250 7/01/18 @ 100 S.F. 329,391
N.Y. Cmmtr. Facs. Rev. 7/01/2022 7/01/02 @ 102 Ref.
Bonds Series 1992 B
(MBIA Corp.)

8 250,000 N.Y. City Genl. Oblig. AAA 6.250 No Sinking Fund 273,742
Rev. Bonds Fiscal 1992 8/01/2010 8/01/02 @ 101.5 Ref.
Series C Subseries C-1 (MBIA Corp.)

</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 11
Portfolio
June 30, 1998
- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Amount Name of Issuer and Ratings Date(s) of S.F.-Sinking Fund Market
No. Title of Bonds (1) Maturity(2) Ref.-Refunding Value(3)
<S> <C> <C> <C> <C> <C> <C>
9 $ 350,000 N.Y. City Genl. Oblig. AAA 7.000% No Sinking Fund $ 388,311
Rev. Bonds Fiscal 1992 2/01/2022 2/01/02 @ 101.5 Ref.
Series H (MBIA Corp.)
10 285,000 N.Y. City Muni. Wtr. AAA 6.000 6/15/15 @ 100 S.F. 291,367
Finc. Auth. Wtr. & Swr. 6/15/2016 6/15/99 @ 100 Ref.
Sys. Rev. Bonds Series
A (MBIA Corp.)
11 500,000 Triborough Bridge & AAA 6.000 1/01/13 @ 100 S.F. 524,000
Tunnel Auth. of N.Y. 1/01/2015 1/01/02 @ 101.5 Ref.
Spec. Oblig. Rev. 1992
Bonds (MBIA Corp.)
12 200,000 Triborough Bridge & AAA 5.500 1/01/16 @ 100 S.F. 202,792
Tunnel Auth. of N.Y. 1/1/2017 1/01/02 @ 100 Ref.
Spec. Oblig. Rev. 1989
Bonds (MBIA Corp.)
--------------- ---------------
$2,915,000 Total Investments (Cost (3) $2,980,427) $3,125,583
=============== ===============

</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 11
Footnotes to Portfolio
- -------------------------------------------------------------------------------

(3) At June 30, 1998, the net unrealized appreciation of all bonds was
comprised of the following:

Gross unrealized appreciation $ 150,856
Gross unrealized depreciation (5,700)
--------------
Net unrealized appreciation $ 145,156
==============

(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 or
unanticipated revenues).

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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 11
Statement of Net Assets
June 30, 1998
- -------------------------------------------------------------------------------

Investments in Securities,
at Market Value (Cost $2,980,427) $ 3,125,583
--------------

Other Assets
Accrued Interest 68,440
--------------
Total Other Assets 68,440
--------------

Liabilities
Advance from Trustee 34,772
--------------
Total Liabilities 34,772
--------------

Excess of Other Assets over Total Liabilities 33,668
--------------

Net Assets (3,139 Units of Fractional Undivided
Interest Outstanding, $1,006.45 per Unit) $ 3,159,251
==============

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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 11
Statement of Operations
- --------------------------------------------------------------------------------

For the Years Ended June 30,
1998 1997 1996
<S> <C> <C> <C>
Investment Income
Interest $ 204,359 $ 222,804 $ 243,312
----------- ----------- ----------

Expenses
Trustee's Fees 4,797 5,013 4,986
Evaluator's Fee 2,370 2,182 2,200
Sponsor's Advisory Fee 883 983 983
----------- ----------- ----------

Total Expenses 8,050 8,178 8,169
----------- ----------- ----------

Net Investment Income 196,309 214,626 235,143
----------- ----------- ----------

Realized and Unrealized Gain (Loss)
Realized Gain (Loss) on
Investments 10,283 (3,714) 136

Unrealized Appreciation
(Depreciation) on Investments 26,134 46,866 (9,065)
----------- ----------- ----------

Net Gain (Loss) on Investments 36,417 43,152 (8,929)
----------- ----------- ----------

Net Increase
in Net Assets
Resulting From Operations $ 232,726 $ 257,778 $ 226,214
=========== =========== ==========

</TABLE>

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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 11
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
For the Years Ended June 30,
1998 1997 1996
<S> <C> <C> <C>
Operations
Net Investment Income $ 196,309 $ 214,626 $ 235,143
Realized Gain (Loss)
on Investments 10,283 (3,714) 136
Unrealized Appreciation
(Depreciation) on Investments 26,134 46,866 (9,065)
------------- ------------- -------------

Net Increase in
Net Assets Resulting
From Operations 232,726 257,778 226,214
------------- ------------- -------------

Distributions to Certificateholders
Investment Income 201,268 223,108 242,559
Principal 25,336 39,581 ----

Redemptions
Interest 5,905 4,940 1,406
Principal 392,732 351,671 88,368
------------- ------------- -------------

Total Distributions
and Redemptions 625,241 619,300 332,333
------------- ------------- -------------

Total (Decrease) (392,515) (361,522) (106,119)

Net Assets
Beginning of Year 3,551,766 3,913,288 4,019,407
------------- ------------- -------------

End of Year (Including
Undistributed Net Investment
Income of $34,296, $45,160,
and $58,582, Respectively) $ 3,159,251 $ 3,551,766 $ 3,913,288
============ ============ ============
</TABLE>

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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 11
Financial Highlights
- -------------------------------------------------------------------------------

Selected data for a unit of the Trust outstanding: *
For the years ended June 30,
1998 1997 1996
<S> <C> <C> <C>
Net Asset Value, Beginning of Year** $ 1,005.88 $ 1,008.58 $ 1,012.96
---------- ---------- ----------

Interest Income 61.28 60.13 62.01
Expenses (2.41) (2.21) (2.01)
----------- ----------- -----------
Net Investment Income 58.87 57.92 59.93
----------- ----------- -----------
Net Gain or Loss on Investments(1) 11.42 11.60 (2.14)
----------- ----------- -----------

Total from Investment Operations 70.29 69.52 57.79
----------- ----------- -----------
Less Distributions
to Certificateholders
Income 60.35 60.20 61.81
Principal 7.60 10.69 ----
for Redemptions
Interest 1.77 1.33 .36
----------- ----------- -----------

Total Distributions 69.72 72.22 62.17
----------- ----------- -----------

Net Asset Value, End of Year** $ 1,006.45 $ 1,005.88 $ 1,008.58
========== ========== ==========

</TABLE>

(1) Net gain or loss on investments is a result of changes in outstanding units
since July 1, 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 3,335([3,531 + 3,139]/2) for 1998, 3,706 ([3,880 +
3,531]/2) for 1997 and of 3,924 ([3,968 + 3,880]/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 York Navigator Insured Series 11
Notes to Financial Statements
- --------------------------------------------------------------------------------

1. Organization

Insured Municipal Securities Trust, New York Navigator Insured Series
11, (the "Trust") was organized on July 23, 1992 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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 11
Notes to Financial Statements
- -------------------------------------------------------------------------------

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).

The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. For the years ended June 30, 1998, 1997 and 1996, 392,
349 and 88 units were redeemed, respectively.

The Trust pays an annual fee for trustee services rendered by the
Trustee that ranges from $.40 to $1.14 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, 1998, 1997 and 1996, the "Trustee's Fees" are
comprised of Trustee fees of $2,846, $3,349 and $3,360 and other
expenses of $1,951, $1,664 and $1,626, respectively. The other expenses
include professional, printing and miscellaneous fees.

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 11
Notes to Financial Statements
- -------------------------------------------------------------------------------

5. Net Assets

At June 30, 1998, the net assets of the Trust represented the interest
of Certificateholders as follows:

Original cost to Certificateholders $ 4,110,490
Less Initial Gross Underwriting Commission 201,414
---------------
3,909,076
Accumulated Cost of Securities Sold,
Matured or Called (928,649)
Net Unrealized Appreciation 145,156
Undistributed Net Investment Income 34,296
Distribution in Excess of Proceeds from Investments (628)
---------------
Total $ 3,159,251
===============

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.

6. Concentration of Credit Risk

<PAGE>

Prospectus Part A Dated October 28, 1998

INSURED MUNICIPAL SECURITIES TRUST
NEW JERSEY NAVIGATOR INSURED

SERIES 8

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

The Trust is a unit investment trust designated Series 8 ("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 Sponsors are Reich & Tang Distributors, Inc. and
Gruntal & Co., L.L.C.(sometimes referred to as the "Sponsor" or the "Sponsors").
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, 1998 (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.

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

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

144658.1

<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 1/3382nd 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
Sponsors 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
Sponsors (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 Sponsors. 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
144658.1

<PAGE>

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 Sponsors from MBIA Corp. and 89.7% 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"), 27.8%; and MBIA Corp., 61.9%.

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 5.50%
of the Public Offering Price, or 5.820% 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 $883.73 plus accrued interest of $7.11 under the monthly
distribution plan, $11.00 under the semi-annual distribution plan and $34.95
under the annual distribution plan, for a total of $890.84, $894.73 and $918.68,
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
144658.1

<PAGE>

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
Sponsors upon request.

MARKET FOR UNITS. The Sponsors, although not obligated to do
so, intend 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 plus a sales charge of 5.50% of
the Public Offering Price (5.820% 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
144658.1

<PAGE>

INSURED MUNICIPAL SECURITIES TRUST
NEW JERSEY NAVIGATOR INSURED
SERIES 8

SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 30, 1998

<TABLE>
<S> <C>
Date of Deposit*: July 23, 1992 Minimum Principal Distribution:
Principal Amount of Bonds.. $2,770,000 $1.00 per Unit.
Number of Units ........... 3,382 Weighted Average Life to Maturity:
Fractional Undivided Inter- 22.7 Years.
est in Trust per Unit ... 1/3382 Minimum Value of Trust:
Principal Amount of Trust may be terminated if value of
Bonds per Unit .......... $819.04 Trust is less than $1,400,000 in
Secondary Market Public principal amount of Bonds.
Offering Price** Mandatory Termination Date:
Aggregate Bid Price The earlier of December 31, 2041 or
of Bonds in Trust ..... $2,824,396+++ the disposition of the last Bond in
Divided by 3,382 Units .. $835.13 the Trust.
Plus Sales Charge Trustee***: The Chase Manhattan
of 5.50% of Public Bank.
Offering Price......... $48.60 Trustee's Annual Fee: Monthly
Public Offering Price plan $1.12 per $1,000; semi-annual
per Unit .............. $883.73+ plan $.65 per $1,000; and annual
Redemption and Sponsors' plan is $.38 per $1,000.
Repurchase Price Evaluator: Kenny S&P Evaluation
per Unit ................ $835.13+ Services.
+++ Evaluator's Fee for Each
++++ Evaluation: Minimum of $8 plus
Excess of Secondary Market $.25 per each issue of Bonds in
Public Offering Price excess of 50 issues (treating
over Redemption and separate maturities as separate
Sponsors' Repurchase issues).
Price per Unit .......... $48.60++++ Sponsors: Reich & Tang
Difference between Public Distributors, Inc. and Gruntal &
Offering Price per Unit Co., L.L.C.
and Principal Amount per Sponsors' Annual Fee: Maximum of
Unit Premium/(Discount) . $64.69 $.25 per $1,000 principal amount of
Evaluation Time: 4:00 p.m. Bonds (see "Trust Expenses and
New York Time. Charges" in Part B of this
Prospectus).

</TABLE>

PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED
<TABLE>
<CAPTION>
Monthly Semi-Annual Annual
Option Option Option
------ ------ ------
<S> <C> <C> <C>

Gross annual interest income# ......... $48.35 $48.35 $48.35
Less estimated annual fees and
expenses ............................ 2.15 1.67 .45
Estimated net annual interest ______ ______ ______
income (cash)# ...................... $46.20 $46.68 $47.90
Estimated interest distribution# ...... 3.85 23.34 47.90
Estimated daily interest accrual# .... .1283 .1297 .1331
Estimated current return#+ ............ 5.23% 5.28% 5.42%
Estimated long term return++ .......... 3.30% 3.35% 3.50%
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
144658.1

<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, 1998 may be reported in
the Summary of Essential Information as if they had been distributed as
of year-end.

+ Plus accrued interest to the expected date of settlement (approximately
three business days after purchase) of $7.11 monthly, $11.00
semi-annually and $34.95 annually.

++++ 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:

June 30, 1996 3,490 $1,004.91 $58.65 $59.22 $59.67 -0-
June 30, 1997 3,426 841.08 55.69 56.25 59.65 $182.28
June 30, 1998 3,382 845.39 47.44 47.93 53.10 4.22

</TABLE>

A-6
144658.1

<PAGE>

INFORMATION REGARDING THE TRUST
AS OF JUNE 30, 1998

DESCRIPTION OF PORTFOLIO

The portfolio of the Trust consists of 10 issues representing
obligations of 8 issuers located in the state of New Jersey. The Sponsor has
participated as a sole underwriter or manager, co-manager or member of an
underwriting syndicate from which none of the initial aggregate principal amount
of the Bonds were acquired. Approximately 13.5% of the Bonds are obligations of
state and local housing authorities; approximately 39.4% are hospital revenue
bonds; none were issued in connection with the financing of nuclear generating
facilities; and none 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 optional 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. Ten issues representing $2,770,000 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: Educational Facility 1, Hospital 2, Lease Revenue
1, Parking 1, Port Authority 1, Sewer Revenue 2, Turnpike 1 and Water Supply 1.
For an explanation of the significance of these factors see "The
Trust--Portfolio" in Part B of this Prospectus.

As of June 30, 1998, $530,000 (approximately 19.1% of the
aggregate principal amount of the Bonds) were original issue discount bonds. Of
these original issue discount bonds, $155,000 (approximately 5.6% 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 19.0% of the aggregate
principal amount of the Bonds in the Trust were purchased at a "market" discount
from par value at maturity, approximately 61.9% 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.

A-7
144658.1

<PAGE>

Report of Independent Accountants

To the Sponsor, Trustee and Certificateholders of
Insured Municipal Securities Trust, New Jersey Navigator Insured Series 8

In our opinion, the accompanying statement of net assets, including the
portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 8 (the "Trust") at June 30, 1998, the
results of its operations, the changes in its net assets and the financial
highlights for the three years then ended, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Trust's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1998 by correspondence with the Trustee,
provide a reasonable basis for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Boston, MA
September 22, 1998

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 8
Portfolio
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount Title of Bonds (1) Maturity(2) Ref.-Refunding Value(3)
<S> <C> <C> <C> <C> <C> <C>
1 $235,000 N.J. Ed. Fac. Auth. AAA 6.500% 7/01/12 @ 100 S.F. $251,763
Rev. Bonds Montclair 7/01/2021 7/01/01 @ 101 Ref.
State Cllg. Issue
Series 1991 E (MBIA Corp.)

2 565,000 N.J. Hlth. Care Facs. AAA 6.500 7/01/03 @ 100 S.F. 588,922
Fincg. Auth. Rev. Bonds 7/01/2020 7/01/99 @ 102 Ref.
Bayshore Cmmnty. Hosp.
Issue Series 1989 B
(MBIA Corp.)

3 525,000 N.J. Hlth. Care Facs. AAA 6.000 7/01/19 @ 100 S.F. 534,597
Fincg. Auth. Rev. Bonds 7/01/2023 7/01/99 @ 100 Ref.
St. Barnabas Med. Cntr.
Issue Series 1989 B
(MBIA Corp.)

4 320,000 N.J. Tnpke. Auth. AAA 6.500 1/01/12 @ 100 S.F. 377,830
Tnpke. Rev. Bonds 1/01/2016 None
Series 1991C (MBIA Corp.)

5 130,000 Essex Cnty. N.J. AAA 6.200 7/01/13 @ 100 S.F. 139,595
Imprvmnt. Auth. Pkg. 7/01/2022 7/01/02 @ 101 Ref.
Fac. Rev. Bonds Series
1992 (MBIA Corp.)

6 375,000 New Brunswick N.J. Hsg. AAA 5.750 7/01/13 @ 100 S.F. 390,416
& Urb. Dev. Auth. Lease 7/01/2024 7/01/02 @ 102 Ref.
Rev. Bonds Series 1992
(MBIA Corp.)

7 250,000 No. Jersey Dstrct. Wtr. AAA 6.250 11/15/12 @ 100 S.F. 269,808
Supl. Comm. Wanaque No. 11/15/2017 11/15/01 @ 102 Ref.
Project Rev. Rfndg.
Bonds Series 1991 B
(MBIA Corp.)

</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

8 $215,000 Port. Auth. of N.Y. & AAA 6.500% 7/15/13 @ 100 S.F. $228,412
N.J. Cnsldtd. Rev. 1/15/2026 1/15/01 @ 101 Ref.
Bonds 1991
Seventy-first Series
(MBIA Corp.)

9 100,000 Camden Cnty. N.J. Muni. AAA 0.000 No Sinking Fund 38,249
Utils. Auth. Cnty. 9/01/2016 None
Agreement Swr. Rev.
Cap. Apprec. Bonds
Series 1990 A (MBIA
Corp.)

10 55,000 Camden Cnty. N.J. Muni. AAA 0.000 No Sinking Fund 19,842
Utils. Auth. Cnty. 9/01/2017 None
Agreement Swr. Rev.
Cap. Apprec. Bonds
Series 1990 A (MBIA Corp.)
---------- ----------
$2,770,000 Total Investments (Cost (3) $2,702,264) $2,839,434
========== ==========
</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 8
Footnotes to Portfolio
- --------------------------------------------------------------------------------

(3) At June 30, 1998, the net unrealized appreciation of all bonds was
comprised of the following:

Gross unrealized appreciation $137,170
Gross unrealized depreciation --
--------
Net unrealized appreciation $137,170
========

(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 or
unanticipated revenues).

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

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 8
Statement of Net Assets
June 30, 1998
- --------------------------------------------------------------------------------

Investments in Securities,
at Market Value (Cost $2,702,264) $ 2,839,434
--------------

Other Assets
Accrued Interest 74,948
--------------
Total Other Assets 74,948
--------------
Liabilities
Advance from Trustee 55,276
--------------
Total Liabilities 55,276
--------------

Excess of Other Assets over Total Liabilities 19,672
--------------
Net Assets (3,382 Units of Fractional Undivided
Interest Outstanding, $845.39 per Unit) $ 2,859,106
==============

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

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 8
Statement of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended June 30,
1998 1997 1996
<S> <C> <C> <C>
Investment Income
Interest $ 166,751 $ 203,642 $ 212,569
----------- ----------- ----------

Expenses
Trustee's Fees 4,667 3,959 7,152
Evaluator's Fee 2,369 2,182 2,200
Sponsor's Advisory Fee 868 875 875
----------- ----------- ----------

Total Expenses 7,904 7,016 10,227
----------- ----------- ----------

Net Investment Income 158,847 196,626 202,342
----------- ----------- ----------
Realized and Unrealized Gain (Loss)
Realized Gain (Loss) on
Investments 105 (14,695) ----

Unrealized Appreciation
(Depreciation) on Investments 32,403 76,268 (10,649)
----------- ----------- ----------
Net Gain (Loss) on Investments 32,508 61,573 (10,649)
----------- ----------- ----------
Net Increase
in Net Assets
Resulting From Operations $ 191,355 $ 258,199 $ 191,693
=========== =========== ==========
</TABLE>

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

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 8
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended June 30,
1998 1997 1996
<S> <C> <C> <C>
Operations
Net Investment Income $ 158,847 $ 196,626 $ 202,342
Realized Gain (Loss)
on Investments 105 (14,695) ----
Unrealized Appreciation
(Depreciation) on Investments 32,403 76,268 (10,649)
------------- ------------- -------------
Net Increase in
Net Assets Resulting
From Operations 191,355 258,199 191,693
------------- ------------- -------------
Distributions to Certificateholders
Investment Income 161,924 193,759 205,665
Principal 14,348 629,893 ----

Redemptions
Interest 612 1,777 116
Principal 36,906 58,370 10,055
------------- ------------- -------------
Total Distributions
and Redemptions 213,790 883,799 215,836
------------- ------------- -------------
Total (Decrease) (22,435) (625,600) (24,143)

Net Assets
Beginning of Year 2,881,541 3,507,141 3,531,284
------------- ------------- -------------
End of Year (Including
Undistributed Net Investment
Income of $49,854, $53,543
and $52,453, Respectively) $ 2,859,106 $ 2,881,541 $ 3,507,141
============= ============= =============
</TABLE>

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

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 8
Financial Highlights
- --------------------------------------------------------------------------------

Selected data for a unit of the Trust outstanding: *
For the years ended June 30,
1998 1997 1996
<S> <C> <C> <C>
Net Asset Value, Beginning of Year** $ 841.08 $ 1,004.91 $ 1,008.94
---------- ---------- ----------

Interest Income 48.99 58.89 60.82
Expenses (2.32) (2.03) (2.93)
---------- ---------- ----------
Net Investment Income 46.67 56.86 57.80
---------- ---------- ----------
Net Gain or Loss on Investments(1) 9.61 18.01 (3.04)
---------- ---------- ----------

Total from Investment Operations 56.28 74.87 54.85
---------- ---------- ----------

Less Distributions
to Certificateholders
Income 47.57 56.03 58.85
Principal 4.22 182.16 ----
for Redemptions
Interest .18 .51 .03
---------- ---------- ----------

Total Distributions 51.97 238.70 58.88
---------- ---------- ----------

Net Asset Value, End of Year** $ 845.39 $ 841.08 $ 1,004.91
========== ========== ==========

</TABLE>

(1) Net gain or loss on investments is a result of changes in outstanding
units since July 1, 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 3,404 (3,426 + 3,382]/2) for 1998, 3,458 ([3,490 + 3,426]/2) for
1997 and of 3,495 ([3,500 + 3,490]/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 8
Notes to Financial Statements
- --------------------------------------------------------------------------------

1. Organization

Insured Municipal Securities Trust, New Jersey Navigator Insured Series
8, (the "Trust") was organized on July 23, 1992 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

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 8
Notes to Financial Statements
- --------------------------------------------------------------------------------

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).

The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. For the years ended June 30, 1998, 1997 and 1996, 44,
64 and 10 units were redeemed, respectively.

The Trust pays an annual fee for trustee services rendered by the
Trustee that ranges from $.38 to $1.12 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, 1998, 1997 and 1996, the "Trustee's Fees" are
comprised of Trustee fees of $2,637, $3,247 and $3,170 and other
expenses of $2,030, $712 and $3,982, respectively. The other expenses
include professional, printing and miscellaneous fees.

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 8
Notes to Financial Statements
- --------------------------------------------------------------------------------

5. Net Assets

At June 30, 1998, the net assets of the Trust represented the interest
of Certificateholders as follows:

Original cost to Certificateholders $ 3,613,295
Less Initial Gross Underwriting Commission 177,051
---------------
3,436,244
Accumulated Cost of Securities Sold,
Matured or Called (749,124)
Net Unrealized Appreciation 137,170
Undistributed Net Investment Income 49,854
Distribution in Excess of Proceeds from Investments (15,038)
---------------
Total $ 2,859,106
===============

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 3,500 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 $15,144.

6. Concentration of Credit Risk

<PAGE>

Prospectus Part A Dated October 28, 1998

INSURED MUNICIPAL SECURITIES TRUST

SERIES 30

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

The Trust is a unit investment trust designated Series 30
("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 Sponsors
are Reich & Tang Distributors, Inc. and Gruntal & Co., L.L.C. (sometimes
referred to as the "Sponsor" or the "Sponsors"). 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, 1998 (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.

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

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

144363.1

<PAGE>

the benefit of the holders of the Pre-Refunded Bonds until the refunding call
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 1/3722nd 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"), 32.1%; Connie Lee Insurance Company
("Connie Lee"), 13.4%; Financial Guaranty Insurance Company ("Financial
Guaranty"), 23.0%; Financial Security Assurance Inc. ("Financial Security"),
24.8%; and MBIA Corp., 6.7%.

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 4.91% of the
Public Offering Price, or 5.16% 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 $1,064.75 plus accrued interest of $8.99 under the monthly
distribution plan, $13.84 under the semi-annual distribution plan and $43.84
under the annual distribution plan, for a total

A-2
144363.1

<PAGE>

of $1,073.74, $1,078.59 and $1,108.59, 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
144363.1

<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 4.91% of
the Public Offering Price (5.16% 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
144363.1

<PAGE>

INSURED MUNICIPAL SECURITIES TRUST
SERIES 30

SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 30, 1998

<TABLE>
<S> <C> <C>
Date of Deposit:* November 6, 1992 Minimum Principal Distribution:
Principal Amount of Bonds ... $3,725,000 $1.00 per Unit.
Number of Units ............. 3,722 Weighted Average Life to Maturity:
Fractional Undivided Inter- 17.8 Years.
est in Trust per Unit ..... 1/3722 Minimum Value of Trust:
Principal Amount of Trust may be terminated if. value of
Bonds per Unit ............ $1,000.81 Trust is less than $2,000,000 in
Secondary Market Public principal amount of Bonds.
Offering Price** Mandatory Termination Date:
Aggregate Bid Price The earlier of December 31, 2041 or
of Bonds in Trust .......$3,768,213+++ the disposition of the last Bond in
Divided by 3,722 Units .... $1,012.42 the Trust.
Plus Sales Charge of 4.91% Trustee***: The Chase Manhattan
of Public Offering Price.$52.33 Bank.
Public Offering Price Trustee's Annual Fee: Monthly
per Unit ................$1,064.75+ plan $1.00 per $1,000; semi-annual
Redemption and Sponsor's plan $.52 per $1,000; and annual plan
Repurchase Price is $.33 per $1,000.
per Unit ..................$1,012.42+ Evaluator: Kenny S&P
+++ Evaluation Services.
++++ Evaluator's Fee for Each
Excess of Secondary Market Evaluation: Minimum of $8 plus $.25
Public Offering Price per each issue of Bonds in excess of
over Redemption and 50 issues (treating separate
Sponsor's Repurchase maturities as separate issues).
Price per Unit ............$52.33++++ Sponsors: Reich & Tang
Difference between Public Distributors, Inc. and Gruntal &
Offering Price per Unit Co., L.L.C.
and Principal Amount per Sponsors' Annual Fee: Maximum
Unit Premium/(Discount) ...$64.28 of $.25 per $1,000 principal amount of
Evaluation Time: 4:00 p.m. Bonds (see "Trust Expenses and
New York Time. Charges" in Part B of this
Prospectus).

</TABLE>

PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED
<TABLE>
<CAPTION>
Monthly Semi-Annual Annual
Option Option Option
------ ------ ------
<S> <C> <C> <C>

Gross annual interest income# ......... $60.05 $60.05 $60.05
Less estimated annual fees and
expenses ............................ 2.07 2.05 .58
Estimated net annual interest ______ ______ ______
income (cash)# ...................... $57.98 $58.00 $59.47
Estimated interest distribution# ...... 4.83 29.00 59.47
Estimated daily interest accrual# ..... .1611 .1611 .1652
Estimated current return#++ ........... 5.44% 5.45% 5.58%
Estimated long term return++ .......... 2.99% 2.99% 3.13%
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
144363.1

<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, 1998 may be reported in
the Summary of Essential Information as if they had been distributed at
year-end.

+ Plus accrued interest to the expected date of settlement (approximately
three business days after purchase) of $8.99 monthly, $13.84
semi-annually and $43.84 annually.

++++ 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:

June 30, 1996 4,471 $1,024.86 $60.19 $60.37 $61.23 -0-
June 30, 1997 4,159 1,040.47 60.00 60.05 61.59 $ 2.56
June 30, 1998 3,722 1,024.88 58.71 58.78 61.14 22.98

</TABLE>

A-6
144363.1

<PAGE>

INFORMATION REGARDING THE TRUST
AS OF JUNE 30, 1998

DESCRIPTION OF PORTFOLIO*

The portfolio of the Trust consists of 11 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 an underwriting syndicate
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 25.4% are hospital revenue bonds; none were issued in
connection with the financing of nuclear generating facilities; and none 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
optional 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. Eleven
issues representing $3,725,000 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: Civic Center 1, Education 1, Environmental 1, Hospital 4, Power 1,
Utility 1, Water 1, and Water 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, 1998, $1,250,000 (approximately 33.6% of the
aggregate principal amount of the Bonds) were original issue discount bonds. Of
these original issue discount bonds, $350,000 (approximately 9.4% 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 6.7% of the aggregate
principal amount of the Bonds in the Trust were purchased at a "market" discount
from par value at maturity, approximately 37.6% were purchased at a premium and
approximately 22.1% 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, 1998 to September 15,
1998, $40,000 of the principal amount of the Bond in portfolio no. 7 was
called and is no longer contained in the Trust. 20 Units were redeemed
from the Trust.

A-7
144363.1

<PAGE>

Report of Independent Accountants

To the Sponsor, Trustee and Certificateholders of
Insured Municipal Securities Trust, Series 30

In our opinion, the accompanying statement of net assets, including the
portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Insured Municipal Securities Trust,
Series 30 (the "Trust") at June 30, 1998, the results of its operations, the
changes in its net assets and the financial highlights for the three years then
ended, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at June
30, 1998 by correspondence with the Trustee, provide a reasonable basis for the
opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Boston, MA
September 22, 1998

<PAGE>

<TABLE>
<CAPTION>
Insured Municipal Securities Trust, Series 30
Portfolio
June 30, 1998
- --------------------------------------------------------------------------------

Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Title Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount of Bonds (1) Maturity(2) Ref.-Refunding Value(3)

<S> <C> <C> <C> <C> <C> <C>
1 $500,000 Volusia Cnty. Fla. Ed. AAA 6.625% 10/15/16 @ 100 S.F. $548,029
Fac. Auth. Rev. 1992 10/15/2022 10/15/02 @ 102 Ref.
Bonds (Embry-Riddle
Aeronautical Univ.)
(Connie Lee)
2 400,000 Iowa Finc. Auth. Hosp. AAA 6.250 2/15/09 @ 100 S.F. 430,516
Rev. Bonds (Sisters of 2/15/2022 2/15/02 @ 102 Ref.
Mercy Hlth. Corp. Oblig.
Group) 1992 Series N
(Financial Security)
3 250,000 Me. Hlth. & Hghr. Ea. AAA 6.375 10/01/12 @ 100 S.F. 269,053
Facs. Auth. Hosp. Rev. 10/01/2021 10/01/01 @ 102 Ref.
Bonds Ea. Me. Hlthcare.
Issue Series 1991
(Financial Guaranty)
4 220,000 Humbolt Cnty. Nv. Poll. AAA 6.550 No Sinking Fund 240,027
Control Rfndg. Rev. 10/01/2013 5/28/02 @ 102 Ref.
Bonds (Sierra Pacific
Pwr. Co. Project) Series
1987 (AMBAC)
5 500,000 Sand Springs Ok. Muni. AAA 6.500 5/01/08 @ 100 S.F. 545,860
Auth. Wtr. & Swr. Sys. 5/01/2012 5/01/02 @ 102 Ref.
Rev. Rfdg. Series 1992
Bonds (AMBAC)
6 80,000 R.I. Depositors Econom. AAA 6.625 8/01/14 @ 100 S.F. 88,881
Protection Corp. Spec. 8/01/2019 8/01/02 @ 102 Ref.
Oblig. Bonds 1992 Series
A (Financial Security)
7 375,000 Tx. Wtr. Res. Finc. AAA 7.500 2/15/09 @ 100 S.F. 389,138
Auth. Rev. Bonds Series 8/15/2013 8/15/99 @ 100 Ref.
1989 (AMBAC)

See accompanying footnotes to portfolio and notes to financial statements.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Insured Municipal Securities Trust, Series 30
Portfolio
June 30, 1998
- --------------------------------------------------------------------------------

Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Title Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount of Bonds (1) Maturity(2) Ref.-Refunding Value(3)

<S> <C> <C> <C> <C> <C> <C>
8 $445,000 Montgomery Cnty. Tx. AAA 6.625% 4/01/10 @ 100 S.F. $ 490,666
Hosp. District Rev. 4/01/2017 4/01/02 @ 102 Ref.
Bonds (Financial
Security)
9 605,000 Sabine Rvr. Auth. Tx. AAA 6.550 No Sinking Fund 662,233
Colltzd. Poll. Control 10/01/2022 10/01/02 @ 102 Ref.
Rev. Rfdg. Bonds (Tx.
Utils. Elec. Co.
Project) Series 1992
(Financial Guaranty)
10 250,000 Mo. Hlth. & Ed. Facs. AAA 0.000 No Sinking Fund 80,108
Auth. Hlth. Facs. Rev. 9/01/2020 None
Bonds (Lester E. Cox
Med. Centers Project)
Series 1992-H (MBIA
Corp.)
11 100,000 City of Dallas Tx. AAA 0.000 No Sinking Fund 24,950
(Dallas, Denton & Collin 01/01/2021 1/01/06 @ 34.967 Ref.
Cntys.) Civic Center
Cnvntn. Cmplx. Sr. Lien
Rev. Bonds Series 1991
(AMBAC)
---------- ----------
$3,725,000 Total Investments (Cost (3) $3,458,139) $3,769,460
========== ==========

See accompanying footnotes to portfolio and notes to financial statements.

</TABLE>

<PAGE>

Insured Municipal Securities Trust, Series 30
Footnotes to Portfolio
- --------------------------------------------------------------------------------

(3) At June 30, 1998, the net unrealized appreciation of all bonds was
comprised of the following:

Gross unrealized appreciation $ 317,422
Gross unrealized depreciation (6,101)
--------------
Net unrealized appreciation $ 311,321
==============

(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 or
unanticipated revenues).

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

<PAGE>

Insured Municipal Securities Trust, Series 30

Statement of Net Assets
June 30, 1998
- --------------------------------------------------------------------------------

Investments in Securities,
at Market Value (Cost $3,458,139) $ 3,769,460
------------

Other Assets
Accrued Interest 58,930
------------
Total Other Assets 58,930
------------
Liabilities
Advance from Trustee 13,775
------------
Total Liabilities 13,775
------------
Excess of Other Assets over Total Liabilities 45,155
------------
Net Assets (3,722 Units of Fractional Undivided
Interest Outstanding, $1,024.88 per Unit) $ 3,814,615
============

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

<PAGE>

<TABLE>
<CAPTION>
Insured Municipal Securities Trust, Series 30

Statement of Operations
- --------------------------------------------------------------------------------

For the Years Ended June 30,
1998 1997 1996

Investment Income
<S> <C> <C> <C>
Interest $ 248,365 $ 272,291 $ 283,026
----------- ----------- ----------

Expenses
Trustee's Fees 7,752 7,797 7,209
Evaluator's Fee 2,369 2,182 2,200
Sponsor's Advisory Fee 1,085 1,134 1,185
----------- ----------- ----------
Total Expenses 11,206 11,113 10,594
----------- ----------- ----------
Net Investment Income 237,159 261,178 272,432
----------- ----------- ----------
Realized and Unrealized Gain (Loss)
Realized Gain on
Investments 44,818 13,970 17,612

Unrealized Appreciation
(Depreciation) on Investments (14,619) 60,767 (15,462)
----------- ----------- ----------
Net Gain on Investments 30,199 74,737 2,150
----------- ----------- ----------
Net Increase
in Net Assets
Resulting From Operations $ 267,358 $ 335,915 $ 274,582
=========== =========== ==========
</TABLE>

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

<PAGE>

<TABLE>
<CAPTION>
Insured Municipal Securities Trust, Series 30

Statement of Changes in Net Assets
- --------------------------------------------------------------------------------

For the Years Ended June 30,
1998 1997 1996

<S> <C> <C> <C>
Operations
Net Investment Income $ 237,159 $ 261,178 $ 272,432
Realized Gain
on Investments 44,818 13,970 17,612
Unrealized Appreciation
(Depreciation) on Investments (14,619) 60,767 (15,462)
------------- ------------- -------------
Net Increase in
Net Assets Resulting
From Operations 267,358 335,915 274,582
------------- ------------- -------------
Distributions to Certificateholders
Investment Income 235,950 258,768 270,420
Principal 91,203 10,647 --

Redemptions
Interest 4,965 3,391 203
Principal 447,924 317,958 15,301
------------- ------------- -------------
Total Distributions
and Redemptions 780,042 590,764 285,924
------------- ------------- -------------
Total (Decrease) (512,684) (254,849) (11,342)

Net Assets
Beginning of Year 4,327,299 4,582,148 4,593,490
------------- ------------- -------------
End of Year (Including
Undistributed Net Investment
Income of $71,515, $75,271, and
$76,252, Respectively) $ 3,814,615 $ 4,327,299 $ 4,582,148
============= ============= =============
</TABLE>

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

<PAGE>

<TABLE>
<CAPTION>
Insured Municipal Securities Trust, Series 30

Financial Highlights
- --------------------------------------------------------------------------------

Selected data for a unit of the Trust outstanding: *
For the years ended June 30,
1998 1997 1996

<S> <C> <C> <C>
Net Asset Value, Beginning of Year** $ 1,040.47 $ 1,024.86 $ 1,023.96
---------- ---------- ----------
Interest Income 63.02 63.10 63.20
Expenses (2.84) (2.58) (2.37)
---------- ---------- ----------
Net Investment Income 60.18 60.52 60.83
---------- ---------- ----------
Net Gain or Loss on Investments(1) 8.50 18.32 .50
---------- ---------- ----------
Total from Investment Operations 68.68 78.84 61.33
---------- ---------- ----------
Less Distributions
to Certificateholders
Income 59.87 59.97 60.38
Principal 23.14 2.47 ----
for Redemptions
Interest 1.26 .79 .05
---------- ---------- ----------
Total Distributions 84.27 63.23 60.43
---------- ---------- ----------
Net Asset Value, End of Year** $ 1,024.88 $ 1,040.47 $ 1,024.86
========== ========== ==========

(1) Net gain or loss on investments is a result of changes in outstanding
units since July 1, 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 3,941 ([4,159 + 3,722]/2) for 1998, 4,315 ([4,471 +
4,159]/2) for 1997 and of 4,479 ([4,486 + 4,471]/2) for 1996.

** Based upon actual units outstanding

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

</TABLE>

<PAGE>

Insured Municipal Securities Trust, Series 30

Notes to Financial Statements
- --------------------------------------------------------------------------------

1. Organization

Insured Municipal Securities Trust, Series 30, (the "Trust") was
organized on November 6, 1992 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

<PAGE>

Insured Municipal Securities Trust, Series 30

Notes to Financial Statements
- --------------------------------------------------------------------------------

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).

The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. For the years ended June 30, 1998, 1997 and 1996, 437,
312 and 15 units were redeemed, respectively.

The Trust pays an annual fee for trustee services rendered by the
Trustee that ranges from $.33 to $1.00 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, 1998, 1997 and 1996, the "Trustee's Fees" are
comprised of Trustee fees of $3,781, $4,090 and $4,029 and other
expenses of $3,971, $3,707 and $3,180, respectively. The other expenses
include professional, printing and miscellaneous fees.

<PAGE>

Insured Municipal Securities Trust, Series 30

Notes to Financial Statements
- --------------------------------------------------------------------------------

5. Net Assets

At June 30, 1998, the net assets of the Trust represented the interest
of Certificateholders as follows:

Original cost to Certificateholders $ 4,981,213
Less Initial Gross Underwriting Commission 244,079
------------
4,737,134
Accumulated Cost of Securities Sold,
Matured or Called (1,304,111)
Net Unrealized Appreciation 311,321
Undistributed Net Investment Income 71,515
Distribution in Excess of Proceeds from Investments (1,244)
------------
Total $ 3,814,615
============

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 5,000 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 $25,116.

6. Concentration of Credit Risk

<PAGE>

Prospectus Part A Dated October 28, 1998

INSURED MUNICIPAL SECURITIES TRUST
NEW YORK NAVIGATOR INSURED

SERIES 12

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

The Trust is a unit investment trust designated Series 12
("New York 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 York State and City personal 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 Sponsors are Reich & Tang Distributors, Inc. and
Gruntal & Co., L.L.C. (sometimes referred to as the "Sponsor" or the
"Sponsors"). 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, 1998 (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.

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.

A-1
144372.1

<PAGE>

For a discussion of the significance of such ratings, see "Description of Bond
Ratings" in Part B of this Prospectus.

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 1/4586th 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 Sponsors in the secondary market.

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
downgraded.

A-2
144372.1

<PAGE>

All of the Bonds in the New York Navigator Trust are covered
by insurance obtained by the Sponsors from MBIA Corp. and 5.8% of the Bonds in
the New York Navigator Trust are Pre-Insured Bonds. The approximate percentage
of the aggregate principal amount of the Portfolio that is insured by each
Insurance Company with respect to Pre-Insured Bonds is as follows: Financial
Guaranty Insurance Company ("Financial Guaranty"), 5.8%.

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 3.58%
of the Public Offering Price, or 3.71% 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 $1,052.27 plus accrued interest of $7.88 under the monthly
distribution plan, $12.79 under the semi-annual distribution plan and $42.56
under the annual distribution plan, for a total of $1,060.15, $1,065.06 and
$1,094.83, 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.

A-3
144372.1

<PAGE>

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
Sponsors upon request.

MARKET FOR UNITS. The Sponsors, although not obligated to do
so, intend 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 plus a sales charge of 3.58% of
the Public Offering Price (3.71% 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
144372.1

<PAGE>

<TABLE>
<CAPTION>
INSURED MUNICIPAL SECURITIES TRUST
NEW YORK NAVIGATOR INSURED
SERIES 12

SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 30, 1998

<S> <C>

Date of Deposit*: November 6, 1992 Weighted Average Life to
Principal Amount of Bonds $4,305,000 Maturity: 11.9 Years.
Number of Units .......... 4,586 Minimum Value of Trust:
Fractional Undivided Inter- Trust may be terminated if
est in Trust per Unit .. 1/4586 value of Trust is less than
Principal Amount of $2,000,000 in principal
Bonds per Unit ......... $938.73 amount of Bonds.
Secondary Market Public Mandatory Termination Date:
Offering Price** The earlier of December 31,
Aggregate Bid Price 2041 or the disposition of
of Bonds in Trust .... $4,652,938+++ the last Bond in the Trust.
Divided by 4,586 Units . $1,014.60 Trustee***: The Chase
Plus Sales Charge of Manhattan Bank.
3.58% of Public Trustee's Annual Fee:Monthly
Offering Price........ $37.67 plan $1.04 per $1,000; semi-
Public Offering Price annual plan $.56 per $1,000;
per Unit ............. $1,052.27+ and annual plan is $.37 per
Redemption and Sponsors' $1,000.
Repurchase Price Evaluator: Kenny S&P
per Unit ............... $1,014.60+ Evaluation Services.
+++ Evaluator's Fee for Each
++++ Evaluation: Minimum of $8
Excess of Secondary Market plus $.25 per each issue of
Public Offering Price Bonds in excess of 50 issues
over Redemption and (treating separate
Sponsors' Repurchase maturities as separate
Price per Unit ......... $37.67++++ issues).

Difference between Public Sponsors: Reich & Tang
Offering Price per Unit Distributors, Inc. and
and Principal Amount per Gruntal & Co., L.L.C.
Unit Premium/(Discount) $113.54 Sponsors' Annual Fee: Maximum
Evaluation Time: 4:00 p.m. of $.25 per $1,000 principal
New York Time. amount of Bonds (see "Trust
Minimum Principal Distribution: Expenses and Charges" in
$1.00 per Unit. Part B of this Prospectus).
</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# ......... $60.45 $60.45 $60.45
Less estimated annual fees and
expenses ............................ 1.97 1.52 1.39
Estimated net annual interest ------ ------ ______
income (cash)# ...................... $58.48 $58.93 $59.06
Estimated interest distribution# ...... 4.87 29.47 59.06
Estimated daily interest accrual# ..... .1624 .1637 .1641
Estimated current return#++ ........... 5.56% 5.60% 5.61%
Estimated long term return++ .......... 3.34% 3.38% 3.39%
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
144372.1

<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, 1998 may be reported in
the Summary of Essential Information as if they had been distributed as
of year-end.

+ Plus accrued interest to the expected date of settlement (approximately
three business days after purchase) of $7.88 monthly, $12.79
semi-annually and $42.56 annually.

++++ 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:

June 30, 1996 4,940 $1,015.15 $61.85 $62.40 $62.57 -0-
June 30, 1997 4,746 1,020.11 59.27 59.83 60.19 $9.87
June 30, 1998 4,586 1,026.49 58.97 59.47 59.68 7.32

- -----------------
* 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.
</TABLE>

A-6
144372.1

<PAGE>

INFORMATION REGARDING THE TRUST
AS OF JUNE 30, 1998

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

The portfolio of the Trust consists of 10 issues representing
obligations of 8 issuers located in the state of New York. The Sponsor has not
participated as a sole underwriter or manager, co-manager or member of an
underwriting syndicate 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 16.0% are hospital revenue bonds; none were
issued in connection with the financing of nuclear generating facilities; and
none 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
optional 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). Two issues representing $1,050,000 of the principal
amount of the Bonds are general obligation bonds. All eight of the remaining
issues representing $3,255,000 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: Assistance Corporation 1, Convention Center 1, Hospital 1, Thruway 1,
Transit Authority 1, University 2 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, 1998, $2,230,000 (approximately 51.8% of the
aggregate principal amount of the Bonds) were original issue discount bonds. Of
these original issue discount bonds, none 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 30.0% were purchased at a premium and approximately
18.2% 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.

A-7
144372.1

<PAGE>

Report of Independent Accountants

To the Sponsor, Trustee and Certificateholders of
Insured Municipal Securities Trust, New York Navigator Insured Series 12

In our opinion, the accompanying statement of net assets, including the
portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Insured Municipal Securities Trust,
New York Navigator Insured Series 12 (the "Trust") at June 30, 1998, the results
of its operations, the changes in its net assets and the financial highlights
for the three years then ended, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1998 by correspondence with the Trustee,
provide a reasonable basis for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Boston, MA
September 22, 1998

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 12
Portfolio
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Title Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount of Bonds (1) Maturity (2) Ref.-Refunding Value (3)
<S> <C> <C> <C> <C> <C> <C>

1 $100,000 N.Y. State Dorm. Auth. AAA 7.250% 5/15/09 @ 100 S.F. $107,940
Rev. Rfndg. Bonds State 5/15/2015 5/15/00 @ 102 Ref.
Univ. Ed. Facs. Series
1989 B (MBIA Corp.)

2 455,000 N.Y. State Dorm. Auth. AAA 6.500 5/15/14 @ 100 S.F. 476,713
State Univ. Ed. Facs. 5/15/2019 5/15/00 @ 100 Ref.
Rev. Bonds Series 1990 A
(MBIA Corp.)

3 690,000 N.Y. State Med. Care AAA 6.875 No Sinking Fund 755,702
Facs. Finc. Agency Hosp. 2/15/2032 2/15/02 @ 102 Ref.
& Nrsg. Home Insrd. Mtg.
Rev. Bonds Series 1992 A
(MBIA Corp.)

4 250,000 N.Y. State Thruway Auth. AAA 5.500 1/01/20 @ 100 S.F. 253,890
Genl. Rev. Bonds Series 1/01/2023 1/01/02 @ 100 Ref.
1992 A (MBIA Corp.)

5 500,000 Metro Trans. Auth. Of AAA 6.000 7/01/16 @ 100 S.F. 528,465
N.Y. Transit Facs. 1987 7/01/2021 7/01/01 @ 101.5 Ref.
Serv. Cntrct. Rev. Bonds
Series 6 (MBIA Corp.)

6 550,000 N.Y. City Genl. Oblig. AAA 6.250 No Sinking Fund 595,414
Rev. Bonds Fiscal 1993 8/01/2017 8/01/02 @ 101.5 Ref.
Series A (MBIA Corp.)

7a 400,000 N.Y. City Genl. Oblig. AAA 7.000 No Sinking Fund 443,586
Rev. Bonds Fiscal 1992 2/01/2016 2/01/02 @ 101.5 Ref.
Series H (MBIA Corp.)

7b 100,000 N.Y. City Genl. Oblig. AAA 7.000 No Sinking Fund 109,588
Rev. Bonds Fiscal 1992 6/01/2013 6/01/01 @ 101.5 Ref.
Series H (MBIA Corp.)

8 330,000 N.Y. Local Gov. Assis. AAA 6.500 4/01/19 @ 100 S.F. 357,558
Corp. (A Pub. Benefit 4/01/2020 4/01/01 @ 102 Ref.
Corp. of the State of
N.Y.) Rev. Bonds Series
1991 A (MBIA Corp.)

</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 12
Portfolio
June 30, 1998
- --------------------------------------------------------------------------------

9 $695,000 N.Y. City Muni. Wtr. AAA 6.375% 6/15/21 @ 100 S.F. $759,732
Finc. Auth. Wtr. & Swr. 6/15/2022 6/15/02 @ 101 Ref.
Sys. Rev. Bonds Fiscal
1993 Series B (MBIA
Corp.)

10 235,000 Triborough Bridge & AAA 6.000 1/01/04 @ 100 S.F. 264,349
Tunnel Auth. of N.Y. 1/01/2011 None
Convntn. Center Project
Bonds Series 1990 E
(MBIA Corp.)
------------- ---------------
$4,305,000 Total Investments (Cost (3) $4,246,564) $4,652,937
============= ===============

</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 12
Footnotes to Portfolio
- -------------------------------------------------------------------------------

(3) At June 30, 1998, the net unrealized appreciation of all bonds was
comprised of the following:

Gross unrealized appreciation $406,373
Gross unrealized depreciation --
---------------
Net unrealized appreciation $406,373
==============

(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 or
unanticipated revenues).

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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 12
Statement of Net Assets
June 30, 1998
- --------------------------------------------------------------------------------

Investments in Securities,
at Market Value (Cost $4,246,564) $ 4,652,937
--------------

Other Assets
Accrued Interest 84,686
--------------
Total Other Assets 84,686
--------------

Liabilities
Advance from Trustee 30,143
--------------
Total Liabilities 30,143
--------------

Excess of Other Assets over Total Liabilities 54,543
--------------

Net Assets (4,586 Units of Fractional Undivided
Interest Outstanding, $1,026.49 per Unit) $ 4,707,480
==============

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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 12
Statement of Operations
- -------------------------------------------------------------------------------

For the Years Ended June 30,
<S> <C> <C> <C>
1998 1997 1996

Investment Income
Interest $ 286,209 $ 297,078 $ 307,437
----------- ----------- ----------

Expenses
Trustee's Fees 6,922 6,835 5,963
Evaluator's Fee 2,369 2,182 2,200
Sponsor's Advisory Fee 1,175 1,226 1,226
----------- ----------- ----------

Total Expenses 10,466 10,243 9,389
----------- ----------- ----------

Net Investment Income 275,743 286,835 298,048
----------- ----------- ----------

Realized and Unrealized Gain (Loss)
Realized Gain on
Investments 4,773 12,941 ----

Unrealized Appreciation
(Depreciation) on Investments 62,675 59,105 2,968
----------- ----------- ----------

Net Gain on Investments 67,448 72,046 2,968
----------- ----------- ----------

Net Increase
in Net Assets
Resulting From Operations $ 343,191 $ 358,881 $ 301,016
=========== =========== ==========

</TABLE>

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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 12
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------

For the Years Ended June 30,
1998 1997 1996

Operations
Net Investment Income $ 275,743 $ 286,835 $ 298,048
Realized Gain
on Investments 4,773 12,941 ----
Unrealized Appreciation
(Depreciation) on Investments 62,675 59,105 2,968
------------- ------------- -------------

Net Increase in
Net Assets Resulting
From Operations 343,191 358,881 301,016
------------- ------------- -------------

Distributions to Certificateholders
Investment Income 277,036 294,428 307,909
Principal 33,990 37,140 ----

Redemptions
Interest 2,921 4,162 157
Principal 163,183 196,567 15,089
------------- ------------- -------------

Total Distributions
and Redemptions 477,130 532,297 323,155
------------- ------------- -------------

Total (Decrease) (133,939) (173,416) (22,139)

Net Assets
Beginning of Year 4,841,419 5,014,835 5,036,974
------------- ------------- -------------

End of Year (Including
Undistributed Net Investment
Income of $54,542, $58,756
and $70,511, Respectively) $ 4,707,480 $ 4,841,419 $ 5,014,835
============ ============= =============
</TABLE>

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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 12
Financial Highlights
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Selected data for a unit of the Trust outstanding: *
For the years ended June 30,
1998 1997 1996

Net Asset Value, Beginning of Year** $ 1,020.11 $ 1,015.15 $ 1,016.54
---------- ---------- ----------

Interest Income 61.34 61.34 62.14
Expenses (2.24) (2.12) (1.90)
---------- ---------- ----------
Net Investment Income 59.10 59.22 60.24
---------- ---------- ----------
Net Gain or Loss on Investments(1) 14.56 15.06 .64
---------- ---------- ----------

Total from Investment Operations 73.66 74.28 60.88
---------- ---------- ----------

Less Distributions
to Certificateholders
Income 59.37 60.79 62.24
Principal 7.28 7.67 ----
for Redemptions
Interest .63 .86 .03
---------- ---------- ----------

Total Distributions 67.28 69.32 62.27
---------- ---------- ----------

Net Asset Value, End of Year** $ 1,026.49 $ 1,020.11 $ 1,015.15
========== ========== ==========

</TABLE>

(1) Net gain or loss on investments is a result of changes in outstanding units
since July 1, 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 4,666 ([4,746 + 4,586]/2) for 1998, 4,834 ([4,940 + 4,746]/2) for
1997 and of 4,947.50 ([4,955 + 4,940]/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 York Navigator Insured Series 12
Notes to Financial Statements
- --------------------------------------------------------------------------------

1. Organization

Insured Municipal Securities Trust, New York Navigator Insured Series
12, (the "Trust") was organized on November 6, 1992 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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 12
Notes to Financial Statements
- --------------------------------------------------------------------------------

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).

The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. For the years ended June 30, 1998, 1997, and 1996, 160,
194 and 15 units were redeemed, respectively.

The Trust pays an annual fee for trustee services rendered by the
Trustee that ranges from $.37 to $1.04 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, 1998, 1997 and 1996, the "Trustee's Fees" are
comprised of Trustee fees of $3,730, $3,969 and $3,829 and other
expenses of $3,192, $2,866 and $2,134, respectively. The other expenses
include professional, printing and miscellaneous fees.

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 12
Notes to Financial Statements
- --------------------------------------------------------------------------------

5. Net Assets

At June 30, 1998, the net assets of the Trust represented the interest
of Certificateholders as follows:

Original cost to Certificateholders $ 4,980,572
Less Initial Gross Underwriting Commission 244,048
---------------
4,736,524
Accumulated Cost of Securities Sold,
Matured or Called (489,960)
Net Unrealized Appreciation 406,373
Undistributed Net Investment Income 54,542
Undistributed Proceeds From Investments 1
---------------

Total $ 4,707,480
===============

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 5,000 units of
fractional undivided interest of the Trust as of the date of deposit.

6. Concentration of Credit Risk

<PAGE>

Prospectus Part A Dated October 28, 1998

INSURED MUNICIPAL SECURITIES TRUST
NEW YORK NAVIGATOR INSURED

SERIES 15

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

The Trust is a unit investment trust designated Series 15 ("New York
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
York State and City personal 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 Sponsors are Reich & Tang Distributors, Inc. and
Gruntal & Co., L.L.C. (sometimes referred to as the "Sponsor" or the
"Sponsors"). The value of the Units of the Trust will fluctuate with the value
of the underlying bonds. Minimum purchase: 1 Unit.

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.

217480.1

<PAGE>

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 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 each Trust, and the cost of
such Bonds to that 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 1/3110th 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 Sponsors in the
secondary market.

INSURANCE. Each of the Bonds in the New York Navigator Trust is
insured by a municipal bond guaranty insurance policy obtained by the Sponsors
(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 York Navigator Trust see "Portfolio
Supervision" in Part B of this Prospectus. The premiums for the Navigator
Sponsor-Insured Bonds are obligations of the Sponsors. Additionally, some of the
Bonds in the New York 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 York 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").

A-2
217480.1

<PAGE>

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 York Navigator Trust are covered by
insurance obtained by the Sponsors from MBIA Corp. and 5.6% of the Bonds in the
New York Navigator Trust are Pre-Insured Bonds. The approximate percentage of
the aggregate principal amount of the Portfolio that is insured by each
Insurance Company with respect to Pre-Insured Bonds is as follows: MBIA Corp.,
5.6%.

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 5.34% of the
Public Offering Price, or 5.64% 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 $1,049.02 plus accrued interest of $5.40 under the monthly
distribution plan, $9.59 under the semi-annual distribution plan and $35.28
under the annual distribution plan, for a total of $1,054.42, $1,058.61 and
$1,084.30, 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.)

A-3
217480.1

<PAGE>

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 Sponsors
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 Sponsors, although not obligated to do so,
intend 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 plus a sales charge of 5.34% of
the Public Offering Price (5.64% 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
217480.1

<PAGE>

<TABLE>
<CAPTION>
INSURED MUNICIPAL SECURITIES TRUST
NEW YORK NAVIGATOR INSURED
SERIES 15

SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 30, 1998
----------------------------------------------------

<S> <C>
Date of Deposit*: December 9, 1993 Minimum Principal Distribution:
Principal Amount of Bonds.. $3,120,000 $1.00 per Unit.
Number of Units............ 3,110 Weighted Average Life to
Fractional Undivided Inter- Maturity: 20.28 Years.
est in Trust per Unit.... 1/3110 Minimum Value of Trust:
Principal Amount of Trust may be terminated if
Bonds per Unit .......... $1,003.22 value of Trust is less than
Secondary Market Public $1,400,000 in principal amount
Offering Price** of Bonds.
Aggregate Bid Price Mandatory Termination Date:
of Bonds in Trust...... $3,088,208+++ The earlier of December 31,
Divided by 3,110 Units .. $992.99 2043 or the disposition of the
Plus Sales Charge of last Bond in the Trust.
5.34% of Public Trustee***: The Chase Manhattan
Offering Price ........ $56.03 Bank.
Public Offering Price Trustee's Annual Fee: Monthly
per Unit .............. $1,049.02+ plan $1.13 per $1,000; semi-
Redemption and Sponsors' annual plan $.66 per $1,000;
Repurchase Price and annual plan is $.39 per
per Unit ................ $992.99+ $1,000.
+++ Evaluator: Kenny S&P Evaluation
++++ Services.
Excess of Secondary Market Evaluator's Fee for Each
Public Offering Price Evaluation: Minimum of $8 plus
over Redemption and $.25 per each issue of Bonds in
Sponsors' Repurchase excess of 50 issues (treating
Price per Unit .......... $56.03++++ separate maturities as separate
Difference between Public issues).
Offering Price per Unit Sponsors: Reich & Tang
and Principal Amount per Distributors, Inc. and Gruntal
Unit Premium/(Discount).. $45.80 & Co., L.L.C.
Evaluation Time: 4:00 p.m. Sponsors' Annual Fee: Maximum of
New York Time. $.25 per $1,000 principal
amount of Bonds (see "Trust
Expenses and Charges" in Part B
of this Prospectus).
</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# ......... $51.95 $51.95 $51.95
Less estimated annual fees and
expenses ............................ 2.42 1.87 .94
Estimated net annual interest ______ ______ ______
income (cash)# ...................... $49.53 $50.08 $51.01
Estimated interest distribution# ...... 4.13 25.04 51.01
Estimated daily interest accrual# ..... .1376 .1391 .1417
Estimated current return#++ ........... 4.72% 4.77% 4.86%
Estimated long term return++ .......... 4.46% 4.52% 4.61%
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
217480.1

<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, 1998 may be reported in
the Summary of Essential Information as if they had been distributed at
year-end.

+ Plus accrued interest to the expected date of settlement (approximately
three business days after purchase) of $5.40 monthly, $9.59
semi-annually and $35.28 annually.

++++ See "Comparison of Public Offering Price, Sponsors' 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:

June 30, 1996 3,500 $ 933.84 $53.32 $53.86 $54.32 -0-
June 30, 1997 3,340 958.48 50.55 51.07 52.03 $1.11
June 30, 1998 3,110 1,001.43 50.44 51.03 52.20 2.44

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

A-6
217480.1

<PAGE>

INFORMATION REGARDING THE TRUST
AS OF JUNE 30, 1998

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

The portfolio of the Trust consists of 10 issues representing
obligations of 8 issuers located in the state of New York and 1 in Puerto Rico.
The Sponsors have not participated as a sole underwriter or manager, co-manager
or member of an underwriting syndicate 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 9.6% are hospital revenue
bonds; none were issued in connection with the financing of nuclear generating
facilities; and approximately 16.0% 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 optional 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). Two of the issues
representing $120,000 of the principal amount of the Bonds are general
obligation bonds. All eight of the remaining issues representing $3,000,000 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: Civic Facility 1,
Correctional Facility 1, Dormitory Authority 1, Health and Education 1, Hospital
1, Housing 1, Transit Facility 1 and Water 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, 1998, $1,395,000 (approximately 44.7% of the aggregate
principal amount of the Bonds) were original issue discount bonds. Of these
original issue discount bonds, $175,000 (approximately 5.6% 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. None of the aggregate principal amount of the Bonds
in the Trust were purchased at a "market" discount from par value at maturity,
approximately 55.3% 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.

A-7
217480.1

<PAGE>

Report of Independent Accountants

To the Sponsor, Trustee and Certificateholders of
Insured Municipal Securities Trust, New York Navigator Insured Series 15

In our opinion, the accompanying statement of net assets, including the
portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Insured Municipal Securities Trust,
New York Navigator Insured Series 15 (the "Trust") at June 30, 1998, the results
of its operations, the changes in its net assets and the financial highlights
for the three years then ended, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1998 by correspondence with the Trustee,
provide a reasonable basis for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Boston, MA
September 22, 1998

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 15
Portfolio
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Amount Name of Issuer and Ratings Date(s) of S.F.-Sinking Fund Market
No. Title of Bonds (1) Maturity(2) Ref.-Refunding Value(3)
<S> <C> <C> <C> <C> <C> <C>
1 400,000 N.Y. State Dorm. Auth. AAA 5.000% No Sinking Fund $390,620
(St. Univ. Ed. Facs.) 5/15/2018 5/15/00 @ 100 Ref.
Rev. Bonds Series 1989
B (MBIA Corp.)

2 500,000 N.Y. State Hsg. Finc. AAA 5.375 3/15/14 @ 100 S.F. 506,359
Agncy. Serv. Contrct. 3/15/2023 9/15/03 @ 102 Ref.
Oblig. Rev. Bonds
Series 1993 D (MBIA Corp.)

3 320,000 N.Y. State Med. Care AAA 5.250 2/15/14 @ 100 S.F. 319,094
Facs. Finc. Agncy. 8/15/2023 8/15/03 @ 102 Ref.
Mental Hlth. Servs.
Facs. Imprvmnt. Rev.
Bonds Series 1993 D
(MBIA Corp.)

4 450,000 N.Y. State Urban Dev. AAA 5.750 1/01/11 @ 100 S.F. 480,254
Corp. Correc. Cap. 1/01/2013 1/01/03 @ 102 Ref.
Facs. Rev. Rfng. Bonds
Series 1993 (MBIA Corp.)

5 605,000 Metro. Trans. Auth. AAA 5.750 7/01/13 @ 100 S.F. 633,320
N.Y. Serv. Cntrct. Rev. 7/01/2015 7/01/03 @ 101.5 Ref.
Bonds Trans. Facs.
Series P 1993 (MBIA
Corp.)

6 20,000 N.Y. City Genl. Oblig. AAA 6.250 No Sinking Fund 21,656
Rev. Bonds Fiscal 1993 8/01/2016 8/01/03 @ 101.5 Ref.
Series A (MBIA Corp.)

7 100,000 N.Y. City Genl. Oblig. AAA 5.750 No Sinking Fund 104,882
Rev. Bonds Fiscal 1994 8/15/2015 8/15/03 @ 101.5 Ref.
Series D (MBIA Corp.)

8 250,000 N.Y. City Muni. Wtr. AAA 5.500 6/15/18 @ 100 S.F. 254,343
Finc. Auth. Wtr. & Swr. 6/15/2020 6/15/02 @ 100 Ref.
Sys. Rev. Rfndg. Bonds
Series 1992 A (MBIA
Corp.)
</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 15
Portfolio
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Amount Name of Issuer and Ratings Date(s) of S.F.-Sinking Fund Market
No. Title of Bonds (1) Maturity(2) Ref.-Refunding Value(3)
<S> <C> <C> <C> <C> <C> <C>
9 $300,000 P.R. Pub. Bldgs. Auth. AAA 5.500% 7/01/17 @ 100 S.F. $306,993
Pub. Ed. & Hlth. Facs. 7/01/2021 7/01/03 @ 101.5 Ref.
Rev. Rfndg. Bonds Gtd.
By The Cmmnwlth. of
P.R. Series 1993 M
(MBIA Corp.)

10 175,000 Glencove N.Y. Ind. Dev. AAA 0.000 No Sinking Fund 59,644
Agncy. Civic Fac. Rev. 10/15/2019 None
Bonds (Regency at
Glencove) Series 1992 B
(MBIA Corp.)
---------- ------------
$3,120,000 Total Investments (Cost (3) $3,010,572) $3,077,165
========== ============

</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 15
Footnotes to Portfolio
- --------------------------------------------------------------------------------

(3) At June 30, 1998, the net unrealized appreciation of all bonds was
comprised of the following:

Gross unrealized appreciation $66,593
Gross unrealized depreciation --
-------
Net unrealized appreciation $66,593
========

(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 or
unanticipated revenues).

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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 15
Statement of Net Assets
June 30, 1998
- --------------------------------------------------------------------------------

Investments in Securities,
at Market Value (Cost $3,010,572) $ 3,077,165
--------------

Other Assets
Accrued Interest 57,821
--------------
Total Other Assets 57,821
--------------

Liabilities
Advance from Trustee 20,548
--------------
Total Liabilities 20,548
--------------

Excess of Other Assets over Total Liabilities 37,273
--------------

Net Assets (3,110 Units of Fractional Undivided
Interest Outstanding, $1,001.43 per Unit) $ 3,114,438
==============

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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 15
Statement of Operations
- --------------------------------------------------------------------------------

For the Years Ended June 30,
1998 1997 1996

<S> <C> <C> <C>
Investment Income
Interest $ 169,718 $ 183,702 $ 187,030
----------- ----------- -----------

Expenses
Trustee's Fees 4,490 4,562 4,364
Evaluator's Fee 2,369 2,182 2,200
Sponsor's Advisory Fee 853 875 875
----------- ----------- -----------
Total Expenses 7,712 7,619 7,439
----------- ----------- -----------
Net Investment Income 162,006 176,083 179,591
----------- ----------- -----------
Realized and Unrealized Gain (Loss)
Realized (Loss) on
Investments (994) (4,372) ----

Unrealized Appreciation
(Depreciation) on Investments 148,430 93,060 57,955
----------- ----------- -----------
Net Gain on Investments 147,436 88,688 57,955
----------- ----------- -----------
Net Increase
in Net Assets
Resulting From Operations $ 309,442 $ 264,771 $ 237,546
=========== =========== ===========

</TABLE>

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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 15
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------

For the Years Ended June 30,
1998 1997 1996

<S> <C> <C> <C>
Operations
Net Investment Income $ 162,006 $ 176,083 $ 179,591
Realized (Loss)
on Investments (994) (4,372) ----
Unrealized Appreciation
(Depreciation) on Investments 148,430 93,060 57,955
----------- ---------- ----------

Net Increase in
Net Assets Resulting
From Operations 309,442 264,771 237,546
----------- ---------- ----------
Distributions to Certificateholders
Investment Income 162,660 175,635 187,790
Principal 7,688 3,707 ----

Redemptions
Interest 2,764 1,044 ----
Principal 223,229 151,492 ----
----------- ---------- ------
Total Distributions
and Redemptions 396,341 331,878 187,790
------- ------ ----------
Total Increase (Decrease) (86,899) (67,107) 49,756

Net Assets
Beginning of Year 3,201,337 3,268,444 3,218,688
---------- ---------- -----------
End of Year (Including
Undistributed Net Investment
Income of $35,189, $38,607 and
$39,203, Respectively) $ 3,114,438 $ 3,201,337 $ 3,268,444
============ ============ ============

</TABLE>

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

<PAGE>

Insured Municipal Securities Trust,
New York Navigator Insured Series 15
Financial Highlights
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Selected data for a unit of the Trust outstanding: *
For the years ended June 30,
1998 1997 1996

<S> <C> <C> <C>
Net Asset Value, Beginning of Year** $ 958.48 $ 933.84 $ 919.63
---------- ---------- ----------

Interest Income 52.63 53.71 53.44
Expenses (2.39) (2.23) (2.13)
---------- ---------- ----------
Net Investment Income 50.24 51.48 51.31
---------- ---------- ----------
Net Gain or Loss on Investments(1) 46.39 25.91 16.55
---------- ---------- ----------

Total from Investment Operations 96.63 77.39 67.86
---------- ---------- ----------
Less Distributions
to Certificateholders
Income 50.44 51.36 53.65
Principal 2.38 1.08 ----
for Redemptions
Interest .86 .31 ----
---------- ---------- ----------
Total Distributions 53.68 52.75 53.65
---------- ---------- ----------
Net Asset Value, End of Year** $ 1,001.43 $ 958.48 $ 933.84
========== ========== ==========
</TABLE>

(1) Net gain or loss on investments is a result of changes in outstanding
units since July 1, 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 3,225 ([3,340 + 3,110]/2) for 1998, 3,420 ([3,500 +
3,340]/2) for 1997 and of 3,500 ([3,500 + 3,500]/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 York Navigator Insured Series 15
Notes to Financial Statements
- --------------------------------------------------------------------------------

1. Organization

Insured Municipal Securities Trust, New York Navigator Insured Series
15, (the "Trust") was organized on December 9, 1993 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

<PAGE>
Insured Municipal Securities Trust,
New York Navigator Insured Series 15
Notes to Financial Statements
- --------------------------------------------------------------------------------

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).

The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. For the years ended June 30, 1998 and 1997, 230, and
160 units were redeemed, respectively. No units were redeemed during
the year ended June 30, 1996.

The Trust pays an annual fee for trustee services rendered by the
Trustee that ranges from $.39 to $1.13 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, 1998, 1997 and 1996, the "Trustee's Fees" are
comprised of Trustee fees of $2,741, $2,987 and $2,936 and other
expenses of $1,749, $1,575 and $1,428, respectively. The other expenses
include professional, printing and miscellaneous fees.

Insured Municipal Securities Trust,
New York Navigator Insured Series 15
Notes to Financial Statements
- --------------------------------------------------------------------------------

5. Net Assets

At June 30, 1998, the net assets of the Trust represented the interest
of Certificateholders as follows:

Original cost to Certificateholders $ 3,579,535
Less Initial Gross Underwriting Commission 175,397
--------------
3,404,138
Accumulated Cost of Securities Sold,
Matured or Called (402,525)
Net Unrealized Depreciation 66,593
Undistributed Net Investment Income 35,189
Undistributed Proceeds From Investments 11,043
---------------

Total $ 3,114,438
===============

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 3,500 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 $8,959.

6. Concentration of Credit Risk

<PAGE>

Prospectus Part A Dated October 28, 1998

INSURED MUNICIPAL SECURITIES TRUST
NEW JERSEY NAVIGATOR INSURED

SERIES 11

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

The Trust is a unit investment trust designated Series 11 ("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 Sponsors are Reich & Tang Distributors, Inc. and Gruntal & Co., L.L.C.
(sometimes referred to as the "Sponsor" or the "Sponsors"). The value of the
Units of the Trust will fluctuate with the value of the underlying bonds.
Minimum purchase: 1 Unit.

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.

217484.1

<PAGE>

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
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 1/2631st 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 Sponsors 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 Sponsors
(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 Sponsors. 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

218484.1
<PAGE>

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
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 Sponsors from MBIA Corp. and 83.1% 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: Financial Guaranty
Insurance Company ("Financial Guaranty"), 5.7%; Financial Security Assurance
Inc. ("Financial Security"), 18.9%; and MBIA Corp., 58.5%.

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 5.50% of the
Public Offering Price, or 5.820% 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 $1,037.51 plus accrued interest of $6.18 under the monthly
distribution plan, $10.34 under the semi-annual distribution plan and $36.20
under the annual distribution plan, for a total of $1,043.69, $1,047.85 and
$1,073.71, 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.)

A-3

217484.1
<PAGE>

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 Sponsors
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 Sponsors, although not obligated to do so,
intend 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 plus a sales charge of 5.50% of
the Public Offering Price (5.820% 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

217484.1
<PAGE>

INSURED MUNICIPAL SECURITIES TRUST
NEW JERSEY NAVIGATOR INSURED
SERIES 11

SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 30, 1998

<S> <C>

Date of Deposit*: December 9, 1993 Minimum Principal Distribution:
Principal Amount of Bonds . $2,640,000 $1.00 per Unit.
Number of Units ........... 2,631 Weighted Average Life to Maturity:
Fractional Undivided Inter- 26.0 Years.
est in Trust per Unit ... 1/2631 Minimum Value of Trust:
Principal Amount of Trust may be terminated if value of
Bonds per Unit .......... $1,003.42 Trust is less than $1,200,000 in
Secondary Market Public principal amount of Bonds.
Offering Price** Mandatory Termination Date:
Aggregate Bid Price The earlier of December 31, 2043 or
of Bonds in Trust ..... $2,579,560+++ the disposition of the last Bond in
Divided by 2,631 Units .. $980.45 the Trust.
Plus Sales Charge of Trustee***: The Chase Manhattan
5.50% of Public Bank.
Offering Price.......... $57.06 Trustee's Annual Fee: Monthly
Public Offering Price plan $1.13 per $1,000; semi-annual
per Unit .............. $1,037.51+ plan $.66 per $1,000; and annual
Redemption and Sponsors' plan is $.39 per $1,000.
Repurchase Price Evaluator: Kenny S&P Evaluation
per Unit ................ $980.45+ Services.
+++ Evaluator's Fee for Each
++++ Evaluation: Minimum of $8 plus
Excess of Secondary Market $.25 per each issue of Bonds in
Public Offering Price excess of 50 issues (treating
over Redemption and separate maturities as separate
Sponsors' Repurchase issues).
Price per Unit .......... $57.06++++ Sponsors: Reich & Tang Distributors,
Difference between Public Inc. and Gruntal & Co., L.L.C.
Offering Price per Unit Sponsors' Annual Fee: Maximum of
and Principal Amount per $.25 per $1,000 principal amount of
Unit Premium/(Discount) . $34.09 Bonds (see "Trust Expenses and
Evaluation Time: 4:00 p.m. Charges" in Part B of this
New York Time. Prospectus).
</TABLE>

PER UNIT INFORMATION BASED UPON INTEREST DISTRIBUTION PLAN ELECTED

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

Gross annual interest income# ......... $52.00 $52.00 $52.00
Less estimated annual fees and
expenses ............................ 2.66 2.17 .61
Estimated net annual interest ----- ------ ------
income (cash)# ...................... $49.34 $49.83 $51.39
Estimated interest distribution# ...... 4.12 24.92 51.39
Estimated daily interest accrual# ..... .1372 .1384 .1428
Estimated current return#++ ........... 4.75% 4.80% 4.95%
Estimated long term return++ .......... 4.52% 4.57% 4.73%
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
217484.1

<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, 1998 may be reported in
the Summary of Essential Information as if they had been distributed at
year-end.

+ Plus accrued interest to the expected date of settlement (approximately
three business days after purchase) of $6.18 monthly, $10.34
semi-annually and $36.20 annually.

++++ 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:
<TABLE>
<CAPTION>

June 30, 1996 3,000 $925.40 $52.01 $52.63 $53.21 -0-
June 30, 1997 2,991 947.91 50.07 50.67 52.04 -0-
June 30, 1998 2,631 989.95 49.55 50.10 51.80 $7.94
</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
217484.1
<PAGE>

INFORMATION REGARDING THE TRUST
AS OF JUNE 30, 1998

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

The portfolio of the Trust consists of 7 issues representing
obligations of 6 issuers located in the state of New Jersey and 1 in Puerto
Rico. The Sponsor has not participated as a sole underwriter or manager,
co-manager or member of an underwriting syndicate 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; none are hospital revenue
bonds; none were issued in connection with the financing of nuclear generating
facilities; and approximately 4.7% 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 optional 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. Seven issues representing $2,640,000 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,
Health and Education 1, Housing 1, Pollution Control 2 and Utilities 2. For an
explanation of the significance of these factors see "The Trust--Portfolio" in
Part B of this Prospectus.

As of June 30, 1998, $150,000 (approximately 5.7% of the aggregate
principal amount of the Bonds) were original issue discount bonds. Of these
original issue discount bonds, $150,000 (approximately 5.7% 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 Bonds in the Trust were purchased at a
"market" discount from par value at maturity, approximately 89.6% were purchased
at a premium and approximately 4.7% 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.

A-7
217484.1

<PAGE>
Report of Independent Accountants

To the Sponsor, Trustee and Certificateholders of
Insured Municipal Securities Trust, New Jersey Navigator Insured Series 11

In our opinion, the accompanying statement of net assets, including the
portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 11 (the "Trust") at June 30, 1998, the
results of its operations, the changes in its net assets and the financial
highlights for the three years then ended, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Trust's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1998 by correspondence with the Trustee,
provide a reasonable basis for the opinion expressed above.

/s/PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Boston, MA
September 22, 1998

<PAGE>

<S> <C> <C> <C> <C> <C> <C> <C>
1 $525,000 N.J. Econ. Dev. Auth. AAA 5.375% No Sinking Fund $531,605
Nat. Gas. Facs. Rfndg. 8/01/2023 8/01/03 @ 102 Opt.
Rev. Bonds (N.J. Nat.
Gas Co. Prjt.) Series
1993A (MBIA Corp.)

2 125,000 N.J. Hsg. & Mtg. Finc. AAA 5.350 4/01/08 @ 100 S.F. 126,486
Agncy. Home Buyer Rev. 10/01/2015 10/01/03 @ 102 Opt.
Bonds 1993 Series G
(MBIA Corp.)

3 460,000 N.J. Sports & Expo AAA 5.500 7/01/21 @ 100 S.F. 471,081
Auth. Cnvntn. Cntr. 7/01/2022 7/01/02 @ 102 Opt.
Luxury Tax Bonds Series
1992A (MBIA Corp.)

4 150,000 Camden Cnty. N.J. Muni. AAA 0.000 No Sinking Fund 48,453
Utils. Auth. Cnty. 9/01/2019 None
Agreement Swr. Rev.
Cap. Apprec. Bonds
Series 1990 A (MBIA
Corp.)

5 500,000 Salem Cnty. N.J. Poll. AAA 5.600 No Sinking Fund 513,870
Cntrl. Fincg. Auth. 11/01/2025 11/01/03 @ 102 Ref.
Poll. Cntrl. Rev. Bonds
(Atlantic City Elec.
Co. Prjt.) Series 1993
A (AMT) (MBIA Corp.)

6 435,000 Salem Cnty. N.J. Poll. AAA 5.500 No Sinking Fund 447,358
Cntrl. Fincg. Auth. 11/01/2033 11/01/03 @ 102 Opt.
Poll. Cntrl. Rev.
Rfndg. Bonds (Pub.
Serv. Elec. & Gas Co.
Prjt.) Series 1993 C
(MBIA Corp.)
</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.
<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 11
Portfolio
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Redemption
Aggregate Coupon Rate/ Feature (2)(4)
Portfolio Principal Name of Issuer and Ratings Date(s) of S.F.-Sinking Fund Market
No. Amount Title of Bonds (1) Maturity(2) Ref.-Refunding Value(3)
<S> <C> <C> <C> <C> <C> <C> <C>
7 $445,000 P.R. Pub. Bldgs. Auth. AAA 5.500% 7/01/17 @ 100 S.F. $455,373
Pub. Ed. & Hlth. Facs. 7/01/2021 7/01/03 @ 101.5 Opt.
Rev. Rfndg. Bonds Gtd.
By The Cmnwlth. of P.R.
Series 1993 M (MBIA
Corp.)

-------------- ----------------
$2,640,000 Total Investments (Cost (3) $2,561,578) $2,594,226
============== ================
</TABLE>

See accompanying footnotes to portfolio and notes to financial statements.

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 11
Footnotes to Portfolio
- --------------------------------------------------------------------------------

(3) At June 30, 1998, the net unrealized appreciation of all bonds was
comprised of the following:

Gross unrealized appreciation $32,648

Gross unrealized depreciation --
-------

Net unrealized appreciation $32,648
=======

(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 or
unanticipated revenues).

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

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 11
Statement of Net Assets
June 30, 1998
- --------------------------------------------------------------------------------

Investments in Securities,
at Market Value (Cost $2,561,578) $ 2,594,226
--------------

Other Assets
Accrued Interest 46,628
--------------
Total Other Assets 46,628
--------------

Liabilities
Advance from Trustee 36,292
--------------
Total Liabilities 36,292
--------------

Excess of Other Assets over Total Liabilities 10,336
--------------

Net Assets (2,631 Units of Fractional Undivided
Interest Outstanding, $989.95 per Unit) $ 2,604,562
==============

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

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 11
Statement of Operations
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
For the Years Ended June 30,
1998 1997 1996
<S> <C> <C> <C>
Investment Income
Interest $ 149,030 $ 158,591 $ 158,494
----------- ----------- ----------

Expenses
Trustee's Fees 4,222 4,133 4,114
Evaluator's Fee 2,368 2,182 2,200
Sponsor's Advisory Fee 750 750 750
----------- ----------- ----------

Total Expenses 7,340 7,065 7,064
----------- ----------- ----------

Net Investment Income 141,690 151,526 151,430
----------- ----------- ----------

Realized and Unrealized Gain (Loss)
Realized (Loss) on
Investments (3,320) ---- ----

Unrealized Appreciation
(Depreciation) on Investments 146,034 67,081 51,908
----------- ----------- ----------

Net Gain on Investments 142,714 67,081 51,908
----------- ----------- ----------

Net Increase
in Net Assets
Resulting From Operations $ 284,404 $ 218,607 $ 203,338
=========== =========== ==========
</TABLE>

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

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 11
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
For the Years Ended June 30,
1998 1997 1996
<S> <C> <C> <C>
Operations
Net Investment Income $ 141,690 $ 151,526 $ 151,430
Realized (Loss)
on Investments (3,320) ---- ----
Unrealized Appreciation
(Depreciation) on Investments 146,034 67,081 51,908
------------- ------------- -------------
Net Increase in
Net Assets Resulting
From Operations 284,404 218,607 203,338
------------- ------------- -------------
Distributions to Certificateholders
Investment Income 138,383 151,099 157,161
Principal 21,596 ---- ----

Redemptions
Interest 5,857 87 ----
Principal 349,210 8,408 ----
------------- ------------- -------------

Total Distributions
and Redemptions 515,046 159,594 157,161
------------- ------------- -------------

Total Increase (Decrease) (230,691) 59,013 46,177

Net Assets
Beginning of Year 2,835,203 2,776,190 2,730,013
------------- ------------- -------------

End of Year (Including
Undistributed Net Investment
Income of $32,672, $35,222,
and $34,882, Respectively) $ 2,604,562 $ 2,835,203 $ 2,776,190
============ ============ ============
</TABLE>

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

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 11
Financial Highlights
- --------------------------------------------------------------------------------

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

For the years ended June 30,
1998 1997 1996
<S> <C> <C> <C>
Net Asset Value, Beginning of Year** $ 947.91 $ 925.40 $ 910.00
---------- ---------- ----------

Interest Income 53.02 52.94 52.83
Expenses (2.61) (2.36) (2.35)
---------- ---------- ----------
Net Investment Income 50.41 50.58 50.48
---------- ---------- ----------
Net Gain or Loss on Investments(1) 50.62 22.40 17.31
---------- ---------- ----------

Total from Investment Operations 101.03 72.98 67.79
---------- ---------- ----------
Less Distributions
to Certificateholders
Income 49.23 50.44 52.39
Principal 7.68 ----- -----
for Redemptions
Interest 2.08 .03 -----
---------- ---------- ----------

Total Distributions 58.99 50.47 52.39
---------- ---------- ----------

Net Asset Value, End of Year** $ 989.95 $ 947.91 $ 925.40
========== ========== ==========
</TABLE>

(1) Net gain or loss on investments is a result of changes in outstanding
units since July 1, 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 2,811 ([2,991 + 2,631]/2) for 1998, 2,996 ([3,000 +
2,991]/2) for 1997 and of 3,000 ([3,000 + 3,000]/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 11
Notes to Financial Statements
- --------------------------------------------------------------------------------

1. Organization

Insured Municipal Securities Trust, New Jersey Navigator Insured Series
11 (the "Trust"), was organized on December 9, 1993 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

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 11
Notes to Financial Statements
- --------------------------------------------------------------------------------

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).

The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. For the years ended June 30, 1998 and 1997, 360 and 9
units were redeemed, respectively. No units were redeemed during the
year ended June 30, 1996.

The Trust pays an annual fee for trustee services rendered by the
Trustee that ranges from $.37 to $1.13 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, 1998, 1997 and 1996, the "Trustee's Fees" are
comprised of Trustee fees of $2,575, $2,683 and $2,588 and other
expenses of $1,647, $1,450 and $1,526, respectively. The other expenses
include professional, printing and miscellaneous fees.

<PAGE>

Insured Municipal Securities Trust,
New Jersey Navigator Insured Series 11
Notes to Financial Statements
- --------------------------------------------------------------------------------

5. Net Assets

At June 30, 1998, the net assets of the Trust represented the interest
of Certificateholders as follows:

Original cost to Certificateholders $ 3,072,319
Less Initial Gross Underwriting Commission 150,544
---------------
2,921,775
Accumulated Cost of Securities Sold,
Matured or Called (367,866)
Net Unrealized Depreciation 32,648
Undistributed Net Investment Income 32,672
Distribution in Excess of Proceeds from Investments (14,667)
---------------

Total $ 2,604,562
===============

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 $7,669.

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, 1998

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. or, depending on the
particular Trust, among Reich & Tang Distributors, Inc. and Gruntal & Co.,
L.L.C., as Co-Sponsors (the Sponsor or Co-Sponsors, if applicable, are referred
to herein as the "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. The name of the Sponsor for
a particular Trust is contained in the "Summary of Additional Information" in
Part A.

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

- ---------------------------
* 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 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 incorpo
rated herein.

112677.8

<PAGE>

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 Under
writers, or until the termination of the Trust Agreement.

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 have 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

112677.8
-2-

<PAGE>

"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 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

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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, 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, as amended,
provided as a general rule that interest on "mortgage subsidy bonds" will not

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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 are 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 ("IRBs") 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
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

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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

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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
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 which
will be affected by general economic conditions in Puerto Rico. The economy of
Puerto Rico is fully integrated with that of the United States mainland. During
fiscal 1997, approximately 88% of Puerto Rico's exports went to the United
States mainland, which was also the source of approximately 62% of Puerto Rico's
imports. In fiscal 1997, Puerto Rico experienced a $2.7 billion positive
adjusted merchandise trade balance. The dominant sectors of the Puerto Rico
economy are manufacturing and services. Puerto Rico's more than decade-long
economic expansion continued throughout the five-year period from fiscal 1993
through fiscal 1997. Factors behind this expansion included government-sponsored
economic development programs, periodic declines in the exchange value of the
United States dollar, increases in the level of federal transfers, and the
relatively low cost of borrowing. Gross product in fiscal 1993 was $25.1 billion
($24.5 billion in 1992 prices) and gross product in fiscal 1997 was $32.1
billion ($27.7 billion in 1992 prices). This represents an increase in gross
product of 27.7% from fiscal 1993 to 1997 (13.0% in 1992 prices). Since fiscal
1985, personal income, both aggregate and per capita, has increased consistently
each fiscal year. In fiscal 1997, aggregate personal income was $32.1 billion
($30.0 billion in 1992 prices) and personal income per capita was $8,509 ($7,957
in 1992 prices). Personal income includes transfer payments to individuals in
Puerto Rico under various social

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<PAGE>

programs. Total federal payments to Puerto Rico, which include transfers to
local government entities and expenditures of federal agencies in Puerto Rico,
in addition to federal transfer payments to individuals, are lower on a per
capita basis in Puerto Rico than in any state. Transfer payments to individuals
in fiscal 1997 were $7.3 billion, of which $5.2 billion, or 71.6%, represented
entitlements to individuals who had previously performed services or made
contributions under programs such as Social Security, Veterans' Benefits,
Medicare and U.S. Civil Service retirement pensions. Average employment
increased from 999,000 in fiscal 1993, to 1,128,300 in fiscal 1997. Average
unemployment decreased from 16.8% in fiscal 1993, to 13.1% in fiscal 1997.
According to the Labor Department's Household Employment Survey, during the
first eight months of fiscal 1998, total employment increased 0.4% over the same
period in fiscal 1997. Total monthly employment averaged 1,129,000 during the
first eight months of fiscal 1998, compared to 1,124,500 in the same period of
fiscal 1997. The Puerto Rico Planning Board's gross product forecast for fiscal
1998 projected an increase of 3.0% over fiscal 1997.

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 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 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 less in the form of tax-exempt interest income than a
comparable bond newly issued at current market rates. 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

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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.

Year 2000 Issue. The Trust, like other businesses and
entities, could be adversely affected if the computer systems used by the
Sponsor and Trustee or other service providers to the Trust do not properly
process and calculate date-related information and data from and after January
1, 2000. This is commonly known as the "Year 2000 Problem." The Sponsor and
Trustee are taking steps that they believe are reasonably designed to address
the Year 2000 Problem with respect to computer systems that they use and to
obtain reasonable assurances that comparable steps are being taken by the
Trusts' other service providers. However, there can be no assurance that the
Year 2000 Problem will be properly or timely resolved as to avoid any adverse
impact to the Trust.

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-cancellable 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 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

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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 Corp., sufficient to fully cover the

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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 which 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 $3,073,000,000 (unaudited), and statutory capital of
approximately $1,769,000,000 as of June 30, 1998. Statutory capital consists of
Ambac's policyholders' surplus and statutory contingency reserve. Standard &
Poor's, 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 issuer of the Bonds.

Connie Lee Insurance Company ("Connie Lee"), a Wisconsin stock
insurance corporation, is 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 December 31, 1997, the qualified statutory capital of
Connie Lee was $112,742,860 (unaudited) and total admitted assets were
$46,792,234 (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 ("FGIC"), a Delaware holding company. FGIC is a wholly-owned
subsidiary of General Electric Capital Corporation ("GECC"). Neither FGIC nor

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GECC 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 is subject to regulation by the State of New York
Insurance Department. As of June 30, 1998, the total capital and surplus of
Financial Guaranty was approximately $1,282,692,798. In addition, Financial
Guaranty is currently licensed to write insurance in 50 states and the District
of Columbia.

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

Financial Security is a monoline insurance company
incorporated in 1984 under the laws of the State of New York and is licensed to
engage in the financial guaranty insurance business in all 50 states, the
District of Columbia and Puerto Rico.

Financial Security is a wholly owned subsidiary of Financial
Security Assurance Holdings Ltd. ("Holdings"), a New York Stock Exchange listed
company. Major shareholders of Holdings include Fund American Enterprises
Holdings, Inc., MediaOne Capital Corporation, formerly US WEST Capital
Corporation, and The Tokio Marine and Fire Insurance Co., Ltd. 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.

Pursuant to an intercompany agreement, liabilities on
financial guaranty insurance written or reinsured from third parties by
Financial Security or any of its domestic operating insurance company
subsidiaries are 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 quota-share
treaties and on a transaction-by-transaction basis. Such reinsurance is utilized
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, 1998, total shareholders equity of Financial Security and its wholly-owned
subsidiaries was (unaudited) $949,625,000 and total unearned premium reserves
was (unaudited) $457,615,000.

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

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, 1997, MBIA Corp. had admitted assets of
$5.3 billion (audited), total liabilities of $3.0 billion (audited), and total
capital and surplus of $1.8 billion (audited) prepared in accordance with
statutory accounting practices prescribed or permitted by insurance regulatory
authorities. As of June 30, 1998, MBIA Corp. had admitted assets of $6.0

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billion (unaudited), total liabilities of $4.0 billion (unaudited), and total
capital and surplus of $2.0 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 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

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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, they have no reason to believe
it is not correct in all material respects.

New York Navigator Trust

Special Factors Affecting New York. 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
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

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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. The City's manufacturing activity is conducted primarily in apparel
and printing.

For each of the 1981 through 1997 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 each of the 1998 and 1999 fiscal
years, before discretionary transfers, and budget gaps for each of the 2000,
2001 and 2002 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 of New York (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 State budgets will
be adopted by the April 1 statutory deadline, or interim appropriations 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 1999 through 2002
fiscal years (the "1999-2002 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 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 financing
program for fiscal years 1999 through 2002 contemplates the issuance of $5.2
billion of general obligation bonds and $5.4 billion of bonds to be issued by
the New York City Transitional Finance Authority (the "Finance Authority") to
finance City capital projects. The Finance Authority was created as part of the
City's effort to assist in 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

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anticipation notes to finance its seasonal working capital requirements. The
success of projected public sales of City bonds and notes, New York City
Municipal Water Finance Authority ("Water Authority") bonds and Finance
Authority bonds will be subject to prevailing market conditions. The City's
planned capital and operating expenditures are dependent upon the sale of its
general obligation bonds and notes, and the Water Authority and Finance
Authority bonds. 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.

For the 1997 fiscal year, the City had an operating surplus,
before discretionary transfers, and achieved balanced operating results, after
discretionary transfers, in accordance with GAAP. The 1997 fiscal year is the
seventeenth year that the City has achieved an operating surplus, before
discretionary transfers, and balanced operating results, after discretionary
transfers. The most recent quarterly modification to the City's financial plan
for the 1998 fiscal year, submitted to the Control Board on April 30, 1998 (the
"1998 Modification"), projects a balanced budget in accordance with GAAP for the
1998 fiscal year.

On April 24, 1998, the City released the Financial Plan for
the 1999 through 2002 fiscal years, which relates to the City and certain
entities which receive funds from the City, and which is based on the Executive
Budget and Budget Message for the City's 1999 fiscal year (the "Executive
Budget"). The Financial Plan is consistent with the Executive Budget and has not
been revised to reflect changes subsequent to the date of the Financial Plan.
The Executive Budget and Financial Plan project revenues and expenditures for
the 1999 fiscal year balanced in accordance with GAAP, and project gaps of $1.5
billion, $2.1 billion and $1.6 billion for the 2000, 2001 and 2002 fiscal years,
respectively.

Changes since the June Financial Plan include: (i) an increase
in projected tax revenues of $1.3 billion, $1.1 billion, $955 million, $897
million and $1.7 billion in the 1998 through 2002 fiscal years, respectively;
(ii) a reduction in assumed State aid of $283 million in the 1998 fiscal year
and of between $134 million and $142 million in each of the 1999 through 2002
fiscal years, reflecting the adopted budget for the State's 1998 fiscal year;
(iii) a delay in the assumed collection of $350 million of projected rent
payments for the City's airports in the 1999 fiscal year to fiscal years 2000
through 2002; (iv) a reduction in projected debt service expenditures totaling
$197 million, $361 million, $204 million and $226 million in the 1998 through
2001 fiscal years, respectively; (v) an increase in the Board of Education (the
"BOE") spending of $266 million, $26 million, $58 million and $193 million in
the 1999 through 2002 fiscal years, respectively; (vi) an increase in
expenditures for the City's proposed drug initiatives totaling $68 million in
the 1998 fiscal year and of between $167 million and $193 million in each of the
1999 through 2002 fiscal years; (vii) other agency net spending initiatives
totaling $112 million, $443 million, $281 million, $273 million and $677 million
in fiscal years 1998 through 2002, respectively; and (viii) reduced pension
costs of $116 million, $168 million and $404 million in fiscal years 2000
through 2002, respectively. The Financial Plan also sets forth gap-closing
actions for the 1998 through 2002 fiscal years, which include: (i) additional
agency actions totaling $176 million, $595 million, $516 million, $494 million
and $552 million in fiscal years 1998 through 2002, respectively, and (ii)
assumed additional Federal and State aid of $100 million in each of fiscal years
1999 through 2002.

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The 1998 Modification and the 1999-2002 Financial Plan include
a proposed discretionary transfer in the 1998 fiscal year of approximately $2.0
billion to pay debt service due in the 1999 fiscal year, and a proposed
discretionary transfer in the 1999 fiscal year of $416 million to pay debt
service due in fiscal year 2000, included in the Budget Stabilization Accounts
for the 1998 and 1999 fiscal years, respectively. In addition, the Financial
Plan reflects proposed tax reduction programs totaling $237 million, $537
million, $657 million and $666 million in fiscal years 1999 through 2002,
respectively, including the elimination of the City sales tax on all clothing as
of December 1, 1999, a City-funded acceleration of the State funded personal
income tax reduction for the 1999 through 2001 fiscal years, the extension of
current tax reductions for owners of cooperative and condominium apartments
starting in fiscal year 2000 and a personal income tax credit for child care and
for resident holders of Subchapter S corporations, which are subject to State
legislative approval, and reduction of the commercial rent tax commencing in
fiscal year 2000.

The Financial Plan assumes (i) approval by the Governor and
the State Legislature of the extension of the 14% personal income tax surcharge,
which is scheduled to expire on December 31, 1999, and the extension of which is
projected to provide revenue of $172 million, $500 million and $514 million in
the 2000, 2001 and 2002 fiscal years, respectively, and of the extension of the
12.5% personal income tax surcharge, which is scheduled to expire on December
31, 1998, and the extension of which is projected to provide revenue of $201
million, $546 million, $568 million and $593 million in the 1999 through 2002
fiscal years, respectively; (ii) collection of the projected rent payments for
the City's airports, totaling $15 million, $365 million, $155 million and $185
million in the 1999 through 2002 fiscal years, respectively, which may depend on
the successful completion of negotiations with The Port Authority of New York
and New Jersey (the "Port Authority") or the enforcement of the City's rights
under the existing leases through pending legal actions; and (iii) State
approval of the repeal of the Wicks Law relating to contracting requirements for
City construction projects and the additional State funding assumed in the
Financial Plan and State and Federal approval of the State and Federal
gap-closing actions assumed in the Financial Plan. The Financial Plan provides
no additional wage increases for City employees after their contracts expire in
fiscal years 2000 and 2001. In addition, the economic and financial condition of
the City may be affected by various financial, social, economic and political
factors which could have a material effect on the City.

On June 5, 1998, the City Council adopted a budget which
reallocated expenditures from those provided in the Executive Budget in the
amount of $409 million. The re-allocated expenditures, which include $116
million from the Budget Stabilization Account, $82 million from debt service,
$45 million from pension contributions, $54 million from social services
spending and $112 million from other spending, were re-allocated to uses set
forth in the City Council's adopted budget. Such uses include a revised tax
reduction program at a revenue cost in the 1999 fiscal year of $45 million,
additional expenditures for various programs of $199 million and provision of
$165 million to retire high interest debt. The revised tax reduction program in
the City Council's adopted budget assumes the expiration of the 12.5% personal
income tax surcharge, rather than the implementation of the personal income tax
reduction program proposed in the Executive Budget. The changes reflected in the
City Council's adopted budget would increase the gaps forecast between revenues
and expenditures in the future years of the Financial Plan.

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On June 5, 1998, in accordance with the City Charter, the
Mayor certified to the City Council revised estimates of the City's revenues
(other than property tax) for fiscal year 1999. Consistent with this
certification, the property tax levy was estimated by the Mayor to require an
increase to realize sufficient revenue from this source to produce a balanced
budget within generally accepted accounting principles. On June 8, 1998, the
City Council adopted a property tax levy that was $237.7 million lower than the
levy estimated to be required by the Mayor. The City Council, however,
maintained that the revenue to be derived from the levy it adopted would be
sufficient to achieve a balanced budget because the property tax reserve for
uncollectibles could be reduced. Property tax bills for fiscal year 1999 are
expected to be mailed in the near future by the City's Department of Finance at
the rates adopted by the City Council for fiscal year 1998, subject to later
adjustment.

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. 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 Legislature passed a
State budget for the 1998-1999 fiscal year on April 18, 1998, and on April 26,
1998 the Governor vetoed certain of the increased spending in the State budget
passed by the Legislature. The Legislature did not override any of the
Governor's vetoes. The State Financial Plan for the 1998-1999 fiscal year, as
modified on July 30, 1998, projects balance on a cash basis for the 1998-1999
fiscal year, with a closing balance in the General Fund of $1.67 billion. The
State Financial Plan contains projections of a potential imbalance in the
1999-2000 fiscal year of $1.3 billion, assuming implementation of $600 million
of unspecified efficiency actions, the receipt of $250 million in funds from the
tobacco settlement and the application of certain reserves established in the
1998-1999 State Financial Plan. The Executive Budget submitted in February 1998
contained projections at that time of a potential imbalance in the 2000-2001
fiscal year of $3.72 billion, assuming implementation of $800 million of
unspecified efficiency initiatives in the 2000-2001 fiscal year and $250 million
in funds from the tobacco settlement. The State Financial Plan for the 1998-1999
fiscal year includes multi-year tax reductions and significant increases in
spending which will affect the 2000-2001 fiscal year. The various elements of
the State and local tax and assessment reductions enacted during the last
several fiscal years will reduce projected revenues by more than $4 billion in
the 2002-2003 fiscal year as measured from the current 1998-1999 base.

On July 23, 1998, the New York State Comptroller issued a
report which noted that a significant cause for concern are the budget gaps in
the 1999-2000 and 2000-2001 fiscal years, which the State Comptroller projected
at $1.8 billion and $5.5 billion, respectively, after excluding the uncertain
receipt by the State of $250 million of funds from the tobacco settlement
assumed for each of such fiscal years, as well as the unspecified actions
assumed in the State's projections. The State Comptroller also stated that if
the securities industry or economy slows, the size of the gaps would increase.

Standard & Poor's rates the State's general obligation bonds
A, and Moody's rates the State's general obligation bonds A2. On August 28,
1997, Standard & Poor's revised its rating on the State's general obligation
bonds from A- to A.

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Litigation. 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 1999-2002 Financial Plan. The City has
estimated that its potential future liability on account of outstanding claims
against it as of June 30, 1997 amounted to approximately $3.5 billion.

New Jersey Navigator Trust

New Jersey Risk Factors

State Finance. New Jersey is the ninth largest state in
population and the fifth smallest in land area. With an average of 1,071 people
per square mile, it 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 1995 the State ranked second among
the states in per capital personal income ($29,248).

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 5.3% in May 1997, which is above the national average of 4.8% in May
1997. Economic recovery is likely to be slow and uneven in New Jersey, with
unemployment receding at a correspondingly slow pace, due to the fact that some
sectors may lag as a result of continued excess capacity. In addition, employers
even in rebounding sectors can be expected to remain

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cautious about hiring until they become convinced that improved business will be
sustained. Also, certain firms will continue to merge or downsize to increase
profitability.

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, 1996, there was a total authorized bond
indebtedness of approximately $10.31 billion, of which $3.69 billion was issued
and outstanding, $4.76 billion was retired (including bonds for which provisions
for payment have been made through the sale and issuance of refunding bonds) and
$1.86 billion was unissued. The debt service obligation of such outstanding
indebtedness is $446.9 million for Fiscal Year 1997.

New Jersey Budget and Appropriation System. The State operates
on a fiscal year beginning July 1 and ending June 30. At the end of Fiscal Year
1993 there was a surplus of $937.4 million. In 1994, New Jersey closed its
fiscal year with a surplus of $926.0 million, in 1995 New Jersey closed its
fiscal year with a surplus of $569.2, in 1996 New Jersey closed its fiscal year
with a surplus of $442.0 million and in 1997 New Jersey closed its fiscal year
with a surplus of $276.2 billion. It is estimated that New Jersey will close its
fiscal year ending June 30, 1998 with a surplus of 1.1 billion.

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, former 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 can be no assurance
that receipts and collections of such taxes will 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, have
also been subject to variance in recent fiscal years. Under the legislation,

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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 June 27, 1997, Governor Whitman signed the New Jersey
Legislature's $16.8 billion budget for Fiscal Year 1998. The balanced budget,
which includes $442 million in surplus, is approximately $800 million more than
the 1997 budget. 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-

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related value of assets (which recognizes 20% of full-market) to full-market
value, immediately recognizes all capital gains up to the validation 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. For many years, both Moody's Investors Service,
Inc., and Standard & Poor's Corporation have rated New Jersey general obligation
bonds "Aaa" and "AAA", respectively. Currently, however, Moody's Investors
Service, Inc. rates New Jersey general obligation bonds Aa1 and Standard &
Poor's Ratings Group rates such bonds AA+. On July 3, 1991, however, Standard &
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 & 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 & 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 & 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 & 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 & 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

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on a pay-as-you go basis. Capital Construction expenditures for Fiscal Year 1995
represent 1.9% of the total Fiscal Year 1995 expenditures. In Fiscal Year 1995,
total Capital Construction expenditures were $289.8 million, a decrease of $83.4
million from Fiscal Year 1994. This amount reflects a reduction of $136.4
million in capital projects and an increase of $53.0 million in expenditures to
the Transportation Trust Fund Authority.

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. 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 a $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

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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 to 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 the 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. 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

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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.

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.

Higher Education Assistance Authority. The Higher Education
Assistance Authority has issued $24,996,064 aggregate principal amount of
revenue bonds, the interest on which has been capitalized to but not including
January 1, 1993. After the period of capitalized interest has ended, it is
anticipated that the authority's revenues will be sufficient to cover debt
service on its bonds.

Below are listed State appropriations made since 1986 which
covered deficiencies in revenues of the Corporation, for debt service and
property tax payments.

Appropriation for Appropriation for
Calendar Year Debt Service Property Tax
------------- ------------ ----------------
1986............................ $ 0 $1,647,216.00
1987............................ 0 1,647,216.00
1988............................ 0 1,647,216.00
1989............................ 1,281,793.58 1,745,917.00
1990............................ 2,362,850.67 1,850,000.00
1991............................ 2,770,851.00 1,850,000.00

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

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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 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%
or an index rate determined annually by the Director, whichever is less.
However, where the index percentage rate exceeds 5%, 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%, 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%. 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

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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 reflecting 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% of the equalized valuation basis in the case of municipalities
and 2% of the equalized valuation basis in the case of counties. The debt limit
of a county or municipality, with certain exemptions, 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 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.

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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% 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% 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% of its tax levy. The number of
municipalities which have a cash deficit greater than 4% 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.

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

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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 Fund 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. 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% down payment provision generally applied to bonds issued by
municipalities and counties, they are subject to debt limits (which

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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% 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% of the average equalized valuation basis of the constituent
municipality, and in cities with populations in excess of 80,000 the debt limit
is 6% 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 alterative 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. 6:22-A-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.

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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 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, 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 the 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 by the State only if the above mentioned appropriations are
made by the State. Total outstanding indebtedness for "qualified bonds"
consisted of $103,720,500 by various school districts as of June 30, 1992 and
$830,037,105 by various municipalities as of June 30, 1992.

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% 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-l 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

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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
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 a 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 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.

Pennsylvania Trust

The following information constitutes only a brief summary of
a number of the complex factors which may impact issuers of Pennsylvania
municipal securities and does not purport to be a complete or exhaustive
description of all conditions to which issuers of Pennsylvania municipal
securities may be subject. Additionally, many factors, including national,
economic, social and environmental policies and conditions, which are not within
the control of such issuers, could have an adverse impact on the financial
condition of such issuers. The Pennsylvania Trust cannot predict whether or to
what extent such factors or other factors may affect the issuers of Pennsylvania
municipal securities, the market value or marketability of such securities or
the ability of the respective issuers of such securities held by the
Pennsylvania Trust to pay interest on or principal of such securities. The
creditworthiness of obligations issued by local Pennsylvania issuers may be
unrelated to the creditworthiness of obligations issued by the Commonwealth of
Pennsylvania, and there is no obligation on the part of the Commonwealth of
Pennsylvania to make payments on such local obligations. There may be specific
factors that are applicable in connection with investment in the obligations of
particular issuers located within

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Pennsylvania, and it is possible the Pennsylvania Trust has invested in
obligations of particular issuers as to which such specific factors are
applicable. However, the information set forth below is intended only as a
general summary and not as a discussion of any specific factors that may affect
any particular issuer of Pennsylvania municipal securities.

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

State Economy. The Commonwealth of Pennsylvania is one of the
most populous states, ranking fifth behind California, New York, Texas and
Florida. Pennsylvania is an established yet growing state with a diversified
economy. It is the headquarters for many major corporations. Pennsylvania
historically has been identified as a heavy industry state although that
reputation has changed over the last thirty years as the industrial composition
of the Commonwealth diversified when the coal, steel and railroad industries
began to decline. A more diversified economy was necessary as the traditionally
strong industries in the Commonwealth declined due to a long-term shift in jobs,
investment and workers away from the northeast part of the nation. The major
sources of growth in Pennsylvania are in the service sector, including trade,
medical and the health services, education and financial institutions.
Pennsylvania's agricultural industries are also an important component of the
Commonwealth's economic structure, accounting for more than $3.6 billion in crop
and livestock products annually, while agribusiness and food related industries
support $39 billion in economic activity annually.

Non-agricultural employment in Pennsylvania over the ten years
ending in 1996 increased at an annual rate of 1.03%. This rate compares to a
0.41% rate for the Middle Atlantic region and 1.8% for the U.S. during the
period 1986 through 1996. For the three years ending with 1996, employment in
the Commonwealth has increased 3.6%. The growth in employment experienced in
Pennsylvania during this period is higher than the 3.0% growth in the Middle
Atlantic region. Non-manufacturing employment has increased in recent years to
82.5% as of December 1996. Consequently, manufacturing employment constitutes a
diminished share of total employment within Pennsylvania. Manufacturing,
contributing 17.5% of 1996 non-agricultural employment, has fallen behind both
the services sector and the trade sector as the largest single source of
employment within the Commonwealth. In 1996, the services sector accounted for
31.1% of all non-agricultural employment while the trade sector accounted for
22.7%.

Pennsylvania's annual average unemployment rate was below the
national average from 1986 until 1990. Slower economic growth caused the
unemployment rate in the Commonwealth to rise to 6.9% in 1991 and 7.5% in 1992.
The resumption of faster economic growth resulted in a decrease in the
Commonwealth's unemployment rate to 7.1% in 1993. In 1994 and 1995,
Pennsylvania's annual average unemployment rate was below the Middle Atlantic
Region's average, but slightly higher than that of the United States. As of
January 1998, the most recent month for which data is available, the seasonally
adjusted unemployment rate for the Commonwealth was 4.6%, compared to 4.7% for
the United States.

The Commonwealth operates under an annual budget which is
formulated and submitted for legislative approval by the Governor each February.
The Pennsylvania Constitution requires that the Governor's budget proposal
consist of three parts: (i) a balanced operating budget setting forth proposed
expenditures and estimated revenues from all sources and, if estimated revenues
and available surplus are less than proposed expenditures, recommending specific
additional sources of revenue sufficient to pay the

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deficiency; (ii) a capital budget setting forth proposed expenditures to be
financed from the proceeds of obligations of the Commonwealth or its agencies or
from operating funds; and (iii) a financial plan for not less than the
succeeding five fiscal years, which includes for each year projected operating
expenditures and estimated revenues and projected expenditures for capital
projects. The General Assembly may add, change or delete any items in the budget
prepared by the Governor, but the Governor retains veto power over the
individual appropriations passed by the legislature. A gubernatorial veto can be
overridden only by a two-thirds majority of all members of each house. The
Commonwealth's fiscal year begins on July 1 and ends on June 30.

The Constitution and the laws of the Commonwealth require all
payments from the treasury, with the exception of refunds of taxes, licenses,
fees and other charges, to be made only by duly enacted appropriations. Amounts
appropriated from a fund may not exceed its actual and estimated revenues for
the fiscal year plus any surplus available. Appropriations from the principal
operating funds of the Commonwealth (the General Fund, the Motor License Fund
and the State Lottery Fund) are generally made for one fiscal year and are
returned to the unappropriated surplus of the fund (a lapse) if not spent or
encumbered by the end of the fiscal year.

Pennsylvania uses the "fund" method of accounting for receipts
and disbursements. For purposes of government accounting, a "fund" is an
independent fiscal and accounting entity with a self-balancing set of accounts,
recording cash and/or other resources together with all related liabilities and
equities which are segregated for the purpose of carrying on specific activities
or attaining certain objectives in accordance with the fund's special
regulations, restrictions or limitations. In the Commonwealth, funds are
established by legislative enactment or in certain cases by administrative
action. Over 150 funds have been established for the purpose of recording the
receipts and disbursements of monies received by the Commonwealth. Annual
budgets are adopted each fiscal year for the principal operating funds of the
Commonwealth and several other special revenue funds. Expenditures and
encumbrances against these funds may only be made pursuant to appropriation
measures enacted by the General Assembly and approved by the Governor. The
General Fund, the Commonwealth's largest fund, receives all tax revenues,
non-tax revenues and federal grants and entitlements that are not specified by
law to be deposited elsewhere. The majority of the Commonwealth's operating and
administrative expenses are payable from the General Fund. Debt service on all
bond indebtedness of the Commonwealth, except that issued for highway purposes
or for the benefit of other special revenue funds, is payable from the General
Fund.

Financial information for the principal operating funds of the
Commonwealth is maintained on a budgetary basis of accounting. Since 1984, the
Commonwealth has also prepared annual financial statements in accordance with
generally accepted accounting principles ("GAAP"). Financial statements prepared
in accordance with GAAP have been audited jointly by the Auditor General of the
Commonwealth and an independent public accounting firm each year since 1984.
Budgetary basis financial reports are based on a modified cash basis of
accounting as opposed to a modified accrual basis of accounting prescribed by
GAAP. The budgetary basis financial information maintained by the Commonwealth
to monitor and enforce budgetary control is adjusted at fiscal year-end to
reflect appropriate accruals for financial reporting in conformity with GAAP.

Financial Results for Recent Fiscal Years (GAAP Basis). During
the five year period from fiscal 1993 through fiscal 1997, revenues and other

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sources increased by an average 4.7 percent annually. Tax revenues during this
same period increased by an annual average of 4.1 percent. Intergovernmental
revenues, at an 8.5 percent annual average rate of increase, were the revenue
source with the largest rate of growth over the five-year period. An accounting
change in fiscal 1996 that made food stamp coupon revenue from the federal
government an item of intergovernmental revenue is largely responsible for this
increase.

Expenditures and other uses during the fiscal 1993 through
fiscal 1997 period rose at an average annual rate of 4.9 percent. Program costs
for protection of persons and property increased an average 13.8 percent
annually, the largest growth rate of all programs. This high rate of increase
reflects the costs to acquire, staff and operate expanded prison facilities to
house a larger prison population. Public health and welfare program costs
increased at a 5.7 percent annual average rate during the period. Efforts to
control costs for various social programs and the presence of favorable economic
conditions have helped restrain these costs.

The fund balance at June 30, 1997 totaled $1,364.9 million, an
increase of $729.7 million over the $635.2 million balance at June 30, 1996. Of
the $832.4 million unreserved-designated component of fund balance, almost
one-half of that amount is represented by the balance in the Tax Stabilization
Reserve Fund. The increase in the fund balance at June 30, 1997 also includes a
return of an unreserved-undesignated balance. The last such balance was recorded
at the end of fiscal 1994. The fiscal 1997 year-end unreserved- undesignated
balance of $187.3 million is the largest balance recorded since fiscal 1987.

Fiscal 1996 Financial Results (GAAP Basis). For fiscal 1996
the fund balance was drawn down $53.1 million from the balance at the end of
fiscal 1995 to $635.2 million. A planned drawdown of the budgetary
unappropriated surplus during fiscal 1996 contributed to expenditures and other
uses exceeding revenues and other sources by $28.0 million. Consequently, the
unreserved fund balance declined by $6.1 million, reducing the balance to $381.8
million at the end of fiscal 1996. Total revenues and other sources increased by
8.7% for the fiscal year led by a 24.2% increase in intergovernmental revenues.
This increase was due mainly to an accounting change in which food stamp coupon
revenue received from the federal government is not counted as income to the
Commonwealth. Increased participation in the federal Medicare program also
contributed to the increase. The reduction for the revenue source "operating
transfers in" reflects an accounting change that no longer recognizes the state
police highway patrol costs paid by the Motor License Fund as a transfer into
the General Fund.

Expenditures and other uses increased by 8.6% for the fiscal
year. The 24.8% increase for protection of persons and property program costs is
due to higher correctional program costs and a re-categorizing of expenditures.
The abolishment of the Department of Environmental Resources and the creation of
the Department of Environmental Protection and the Department of Conservation
and National Pressures resulted in a reclassification of expenditures from
conservation of natural resources to protection of persons and property. The
departmental changes were also responsible for the decline in costs for the
conservation of natural resources programs.

Budgetary Basis. The unappropriated surplus (prior to
transfers to the Tax Stabilization Reserve Fund) at the close of the 1996 fiscal
year for the General Fund was $183.8 million, $65.5 million above estimate.
Expenditures from Commonwealth revenues for the fiscal year, including $113.0

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million of supplemental appropriations but excluding pooled financing
expenditures, totaled $16,074.7 million. Expenditures exceeded available
revenues and lapses by $253.2 million. The difference was funded from a planned
partial drawdown of the $437.0 million fiscal year adjusted beginning
unappropriated surplus.

Commonwealth revenues (prior to tax refunds) for the 1996
fiscal year increased by $113.9 million over the prior fiscal year to $16,338.5
million representing a growth rate of 0.7%. Tax rate reductions and other tax
law changes substantially reduced the amount and rate of revenue growth for the
fiscal year. It is estimated that tax changes enacted for the fiscal year
reduced Commonwealth revenues by $283.4 million representing 1.7 percentage
points of fiscal 1996 growth in Commonwealth revenues. The most significant tax
changes enacted for the fiscal year were (i) a reduction of the corporate net
income tax rate to 9.99%; (ii) an increase in the maximum annual allowance for a
net operating loss deduction from $0.5 million to $1.0 million; (iv) an increase
in the basic exemption amount of the capital stock and franchise tax; (v) a
repeal of the tax on annuities; and (vi) a repeal of inheritance tax on
transfers of certain property to surviving spouses.

Among the major sources of Commonwealth revenues for the
fiscal year, corporate tax receipts declined $338.4 million from receipts in the
prior fiscal year, largely due to the various tax changes enacted for these
taxes. Corporate tax changes were enacted to reduce the cost of doing business
in Pennsylvania for the purpose of encouraging business to remain in
Pennsylvania and to expand employment opportunities within the state. Sales and
use tax receipts for the fiscal year increased $155.5 million, or 2.8%, over
receipts during fiscal 1995. All of the increase was produced by the non-motor
vehicle portion of the tax as receipts from the sale of motor vehicles declined
slightly for fiscal 1996. Personal income tax receipts for the fiscal year
increased $291.1 million, or 5.7%, over receipts during fiscal 1995. Personal
income tax receipts were aided by a 10.2% increase in non- withholding tax
payments which generally are comprised of quarterly estimated and annual final
return tax payments. Non-tax receipts for the fiscal year increased $23.7
million for the fiscal year. Included in that increase was $67 million in net
receipts from a tax amnesty program that was available for a portion of the 1996
fiscal year. Some portion of the tax amnesty receipts represent normal
collection of delinquent taxes. The tax amnesty program is not expected to be
repeated.

Transfers to the Tax Stabilization Reserve Fund from fiscal
1996 operations were $27.6 million. This amount represents the 15% of the fiscal
year ending unappropriated surplus transfer provided under current law. With the
addition of this transfer, the Tax Stabilization Reserve Fund balance totaled
$222.6 million as of June 30, 1996.

Fiscal 1997 Financial Results (GAAP Basis): For fiscal 1997,
assets increased $563.4 million and liabilities declined $166.3 million to
produce a $729.7 million increase in fund balance at June 30, 1997. The fund
balance increase during fiscal 1997 has brought a restoration of an
undesignated-unreserved balance. The $187.3 million undesignated-unreserved
balance is the first recorded since fiscal 1994 and is the largest amount since
fiscal 1987. Total revenues and other sources rose 3.5% for fiscal 1997. An
increase of 5.5% in tax revenue aided by an improving state economy was
partially offset by a $175.2 million decline in intergovernmental revenues.

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Expenditures and other uses increased by 1.0% for the fiscal
year. As in the past several fiscal years, expenditure increases were led by
protection of persons and property program costs. Fiscal 1997 costs for this
program rose by 4.7%, the largest increase for a program, but well below the
17.1% average annual increase that occurred over the four fiscal years prior to
fiscal 1997. General government program costs for fiscal 1997 declined by 14.3%
from the fiscal year earlier. A reduction in estimated expenditures for
maintaining the Commonwealth's self-insured worker's compensation program is
largely responsible for the decline.

Budgetary Basis. The unappropriated balance of Commonwealth
revenues increased during the 1997 fiscal year by $432.9 million. Higher than
estimated revenues and slightly lower expenditures than budgeted caused the
increase. The unappropriated balance rose from an adjusted amount of $158.5
million at the beginning of fiscal 1997 to $591.4 million (prior to reserves for
transfer to the Tax Stabilation Reserve Fund) at the close of the fiscal year.
Transfers to the Tax Stabilization Reserve Fund for fiscal 1997 operations were
$88.7 million representing the normal fifteen percent of the ending
unappropriated balance, plus an additional $100 million authorized by the
General Assembly when it enacted the fiscal 1998 budget.

Commonwealth revenues (prior to tax refunds) during the fiscal
year totaled $17,320.6 million, $576.1 million (3.4 percent) above the estimate
made at the time the budget was enacted. Revenue from taxes was the largest
contributor to higher than estimated receipts. Tax revenue in fiscal 1997 grew
6.1 percent over tax revenues in fiscal 1996. This rate of increase was not
adjusted for legislated tax reductions that affected receipts during both of
those fiscal years and therefore understates the actual underlying rate of tax
revenue growth during fiscal 1997. Receipts from the personal income tax
produced the largest single component of higher revenues for the fiscal year.
Personal income collections were $236.3 million over estimate representing a 6.9
percent increase over fiscal 1996 receipts. Receipts of the sales and use tax
were $185.6 million over estimate representing a 6.2 percent increase.
Collections of corporate taxes, led by the capital stock and franchise and the
gross receipts taxes, also exceeded their estimates for the fiscal year. Non-tax
revenues were $19.8 million (5.8 percent) over estimate mostly due to higher
than anticipated interest earnings.

Expenditures from Commonwealth revenues (excluding pooled
financing expenditures) during fiscal 1997 totaled $16,347.7 million and were
close to the estimate made in February 1997 with the presentation of the
Governor's fiscal 1998 budget request. Total expenditures represent an increase
over fiscal 1996 of 1.7 percent. Lapses of appropriation authority during the
fiscal year totaled $200.6 million compared to an estimate of $100 million. The
higher amount of appropriation lapses was used to support $79.8 million in
fiscal 1997 supplemental appropriations over the February 1997 estimate.
Supplemental appropriations for fiscal 1997 totaled $169.3 million. The largest
supplemental appropriations included $100.1 million for medical assistance costs
due to implementation of managed medical care for a portion of the medical
assistance caseload, and an additional $50 million for bond debt service for
potential use to produce present value savings.

Fiscal 1998 Budget (Budgetary Basis). The budget for fiscal
1998 was enacted in May 1997. Commonwealth revenues for the fiscal year at that
time were estimated to be $17,435.4 million before reserves for tax refunds.
That estimate represented an increase over estimated fiscal 1997 Commonwealth
revenues of 1.0 percent. Although actual fiscal 1997 revenues exceeded the
estimate, the adopted fiscal 1998 budget revenue estimate was not changed and

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represents a 0.7 percent increase over actual fiscal 1997 revenues. Fiscal 1998
estimates for Commonwealth revenues made at the time the budget was enacted were
based on an economic forecast for national economic growth to slow through the
remainder of calendar year 1997. A growth rate of just above 1.0 percent was
anticipated to be maintained for the last two quarters of the fiscal year and
result in a 1.2 percent growth rate in real gross domestic product for the
second calendar quarter of 1998 over the second quarter of 1997. This
anticipated rate of economic growth is a result of anticipated slowing of gains
in consumer spending, business investment and residential housing. Inflation was
projected to remain modest and the unemployment rate was projected to reach 6.0
percent by the second calendar quarter of 1998.

The rate of anticipated growth of Commonwealth revenues was
also affected by the enactment of tax reductions and tax revenue dedications
effective for the 1998 fiscal year. Excluding these newly enacted changes,
revenues were projected to increase by 2.4 percent during fiscal 1998. Tax
reductions enacted for the 1998 fiscal year budget totaled an estimated $170.6
million, including $16.2 million reflected in higher projected tax refunds. In
addition, $75 million of existing sales tax revenue has been earmarked for mass
transit funding and one cent of the cigarette tax ($10.8 million) has been
earmarked for children's health program and are no longer included in the
General Fund. Major changes to taxes enacted for fiscal 1998 include: (i) the
repeal of the sales and use tax on computer services ($79.1 million); (ii) an
increase in the amount of income that is exempt from the personal income tax for
low-income families ($25.4 million); (iii) enactment of a research and
development tax credit program for business ($15.0 million); (iv) conforming
state tax laws to federal laws for sub-chapter S and limited liability companies
($16.3 million); and various other miscellaneous changes. Most changes were
effective beginning in July 1997 although some were effective retroactively to
January 1997.

The reserve for tax refunds for fiscal 1998 has been increased
by 21.3 percent to $655.0 million. A portion of the additional reserves reflect
tax refund liabilities that are expected to result in cash payments in a
subsequent fiscal year.

Appropriations enacted for fiscal 1998 are 3.7 percent ($618
million) above appropriations enacted for fiscal 1997 (including supplemental
appropriations). Major funding increases provided by the fiscal 1998 budget
include: (i) $166 million of appropriations for elementary and secondary
education plus an estimated $51 million in reduced employer retirement
contributions payable by local school districts due to a reduction in the
contribution rate; (ii) $42 million for higher education institutions plus $16
million for student scholarships; (iii) $70 million for higher caseload,
utilization, and cost of nursing home care; (iv) $60 million for economic
development assistance through programs providing incentive grants and loans;
and (v) $38 million for corrections including $17 million for operating costs
for new and expanded facilities. The balance of the increase is spread over many
other department and program operations.

Through January 1998, Commonwealth revenues are $211.4 million
or 2.4 percent above estimate. Most of the above estimate revenues are accounted
for by personal income tax receipts that are $176.7 million (5.7 percent) above
estimate. In the Governor's proposed fiscal 1999 General Fund budget, the
estimate of commonwealth revenues anticipated for fiscal 1998 has been increased
by $231.1 million, raising the year-over-year increase to 2.1 percent.
Reflecting the current strength of personal income tax receipts estimated
receipts for that tax constitute $231.5 million of that increase,

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raising the personal income tax year-over-year increase to 5.0 percent from 1.3
percent in the earlier estimate. Inheritance tax receipts have also been above
estimate for the fiscal year to date and have been increased in the revision by
$60 million, making the increase 11.0 percent compared to 1.2 percent
originally. From a review of expenditure projections for fiscal 1998, $100.6
million of supplemental appropriation needs have been identified. Of the total
supplemental appropriation needs identified, $96.2 million are for the
Department of Public Welfare, mostly for the medical assistance program. These
needs arise from delay in implementation of the movement of the final group to
the HealthChoices managed health care program resulting in unanticipated fee for
service costs. The cost of the supplemental appropriations will be appropriated
from an estimated $190 million of expenditure lapses projected to occur during
the fiscal year. The amounts of appropriation lapses over the amount of
supplemental appropriations and estimated additional revenue to be received are
projected to permit the fund to close fiscal 1998 with an unappropriated surplus
balance of $330.1 million. After transfer of the required 15 percent to the Tax
Stabilization Reserve Fund which is estimated to be $49.5 million, the fiscal
1998 ending balance is projected to be $280.6 million.

Proposed Fiscal 1999 Budget. In February 1998, the Governor
presented his proposed General Fund budget for fiscal 1999 to the General
Assembly. Revenue estimates in the proposed budget were developed using a
national economic forecast with a projected real gross domestic product growth
annual rate below 2 percent. Total commonwealth revenues before reductions for
tax refunds and proposed tax changes are estimated to be $18,191.0 million, 2.9
percent above revised estimates for fiscal 1997. Proposed appropriations from
those revenues total $17,787.4 million, a 3.0 percent increase over currently
estimated appropriations for fiscal 1998. As proposed, the fiscal 1999 budget
assumes the draw down of the currently estimated $280.6 million unappropriated
surplus at June 30, 1998; however, no appropriation lapses are included in this
projection. The proposed fiscal 1999 budget includes five proposed tax
reductions representing an estimated $128.1 million (0.7) of fiscal 1999
revenues. The proposal with the largest effect on revenues is an expansion of
the amount of household income eligible for tax forgiveness from the personal
income tax and is estimated at $54.1 million. A 0.0005% reduction to the tax
rate for the capital stock and franchise tax and an increase from three to ten
years in the time period for a business to recover operating losses for
corporate net income tax purposes are also proposed. Estimated fiscal 1999 costs
of these proposals are $46.2 million and $17.8 million respectively. In
addition, funding for two tax credit programs will cost $5 million each. All
proposed tax changes require legislative enactment. The General Assembly is
reviewing the proposed budget in hearings before its committees. The General
Assembly may change, eliminate or add amounts and items to the Governor's
proposed budget and there can be no assurance that the budget, as proposed by
the Governor, will be enacted into law.

Tax Structure. The Commonwealth, through its principal
operating funds -- the General Fund, the Motor License Fund and the State
Lottery Fund -- receives over 57% of its revenues from taxes levied by the
Commonwealth. Interest earnings, licenses and fees, lottery ticket sales, liquor
store profits, miscellaneous revenues, augmentations and federal government
grants supply the balance of receipts to these funds.

Tax and fee proceeds relating to motor fuels and vehicles are
constitutionally dedicated for highway purposes and are deposited into the Motor
License Fund. Lottery ticket sale revenues are deposited into the State

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Lottery Fund and are reserved by statute for programs to benefit senior
citizens. Revenues, other than those specified to be deposited in a particular
fund, are deposited into the General Fund.

The major tax sources for the General Fund of the Commonwealth
are the sales tax enacted in 1953, the personal income tax enacted in 1971, and
the corporate net income tax which in its present form dates back to 1935. The
last restructuring of the Commonwealth's tax system occurred with the enactment
of the Tax Reform Code of 1971 that codified many of the taxes levied by the
Commonwealth.

The major tax sources for the Motor License Fund are the
liquid fuels taxes and the oil company franchise tax. The Motor License Fund
also receives revenues from fees levied on heavy trucks and from taxes on fuels
used for aviation purposes. Use of these revenues is restricted to the repair
and construction of highway bridges and aviation programs respectively.

The Tax Stabilization Reserve Fund was established in 1986 to
provide a source of funds that can be used to alleviate emergencies threatening
the health, safety or welfare of the Commonwealth's citizens or to offset
unanticipated revenue shortfalls due to economic downturns. Income to the fund
is provided by specific appropriation from available balances by the General
Assembly, from investment income and by the transfer to the Tax Stabilization
Reserve Fund of 15% of the budgetary basis operating surplus in the General Fund
at the close of any fiscal year. In addition, the proceeds received from the
disposition of assets of the Commonwealth not specified to be deposited
elsewhere are also to be deposited into the Tax Stabilization Reserve Fund. The
Commonwealth has not prepared estimates of such sales.

Assets of the Tax Stabilization Reserve Fund may be used only
upon the recommendation by the Governor and approval by the vote of two-thirds
of the members of each house of the General Assembly. In February 1991, in
response to a projected fiscal 1991 General Fund budgetary deficit caused by
lower revenues and higher expenditures than budgeted, the Governor recommended,
and the General Assembly authorized, the available balance of $133.8 million in
the Tax Stabilization Reserve Fund be used to pay medical assistance and special
education costs not covered by budgeted funds. On June 30, 1996, the balance in
the Tax Stabilization Reserve Fund was $183.6 million and $27.6 million was in
the General Fund pending transfer to the Tax Stabilization Reserve Fund for
fiscal 1996. The transfer was completed in September 1996.

Debt Limits and Outstanding Debt. The Pennsylvania
Constitution permits the Commonwealth to issue the following types of debt: (i)
debt to suppress insurrection or rehabilitate areas affected by disaster, (ii)
electorate approved debt, (iii) debt for capital projects subject to an
aggregate debt limit of 1.75 times the annual average tax revenues of the
preceding five fiscal years, and (iv) tax anticipation notes payable in the
fiscal year of issuance. All debt except tax anticipation notes must be
amortized in substantial and regular amounts.

Outstanding general obligation debt totaled $4,795.1 million
on June 30, 1997, a decrease of $261.0 million from June 30, 1996. Over the
10-year period ending June 30, 1997, total outstanding general obligation debt
increased at an annual rate of 0.5%. Within the most recent 5-year period,
outstanding general obligation debt has decreased at an annual rate of 0.3%.

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General obligation debt for non-highway purposes of $4,046.9
million was outstanding on June 30, 1997. Outstanding debt for these purposes
decreased $160.9 million since June 30, 1996. For the period ending June 30,
1997, the 10-year and 5-year average annual compounded growth rate for total
outstanding debt for non-highway purposes has been 3.3% and 3.6%, respectively.
In its current debt financing plan, Commonwealth infrastructure investment
projects include improvement and rehabilitation of existing capital facilities,
such as water supply systems and construction of new facilities, such as
prisons, transit facilities and public buildings.

Outstanding general obligation debt for highway purposes was
$748.2 million on June 30, 1997, a decrease of $100.1 million from June 30,
1996. Highway outstanding debt has declined over the most recent 10-year and
5-year periods ending June 30, 1997 by the annual average rates of 7.4% and
12.8%, respectively. The decline in outstanding highway debt is due to the
policy begun in 1980 of funding highway capital projects with current revenues
except for various limited exceptions. No debt issuance for highway capital
projects is currently planned.

The Commonwealth may incur debt to fund capital projects for
community colleges, highways, public improvements, transportation assistance,
flood control, redevelopment assistance, site development and the Pennsylvania
Industrial Development Authority. Before a project may be funded, it must be
itemized in a capital budget bill adopted by the General Assembly. An annual
capital budget bill states the maximum amount of debt for capital projects that
may be incurred during the current fiscal year for projects authorized in the
current or previous years' capital budget bills. Capital projects debt is
subject to a constitutional limit on debt. As of December 31, 1997, $3,724.4
million of capital projects debt was outstanding.

The issuance of electorate approved debt is subject to the
enactment of legislation which places on the ballot the question of whether debt
shall be incurred. Such legislation must state the purposes for which the debt
is to be authorized and, as a matter of practice, includes a maximum amount of
funds to be borrowed. Upon electorate approval and enactment of legislation
implementing the proposed debt-funded program, bonds may be issued. As of
December 31, 1997, the Commonwealth had $903.5 million of electorate approved
debt outstanding.

Debt issued to rehabilitate areas affected by disasters is
authorized by specific legislation. The Commonwealth had $50.4 million of
disaster relief debt outstanding as of December 31, 1997.

Due to the timing of major tax payment dates, the
Commonwealth's cash receipts are generally concentrated in the last four months
of the fiscal year, from March through June. Disbursements are distributed more
evenly throughout the fiscal year. As a result, operating cash shortages can
occur during certain months of the fiscal year. The Commonwealth engages in
short-term borrowing to fund expenses within the fiscal year through the sale of
tax anticipation notes. Currently, the Commonwealth has $225 million of tax
anticipation notes outstanding. Those tax anticipation notes mature June 30,
1998.

Pending the issuance of bonds, the Commonwealth may issue bond
anticipation notes subject to the applicable statutory and constitutional
limitations generally imposed on bonds. The term of such borrowings may not
exceed three years. Currently, $60 million of bond anticipation notes are

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authorized to be issued in the form of commercial paper notes. As of
December 31, 1997, $46.4 million was issued and outstanding.

Certain state-created organizations have statutory authority
to issue debt for which state appropriations to pay debt service thereon are not
required. The debt of these organizations is supported by assets of, or revenues
derived from, the various projects financed and is not an obligation of the
Commonwealth. Some of these agencies, however, are indirectly dependent on
Commonwealth appropriations. These entities include: Delaware River Joint Toll
Bridge Commission, Delaware River Port Authority, Pennsylvania Energy
Development Authority, Pennsylvania Higher Education Assistance Agency,
Pennsylvania Higher Educational Facilities Authority, Pennsylvania Industrial
Development Authority, Pennsylvania Infrastructure Investment Authority,
Pennsylvania State Public School Building Authority, Pennsylvania Turnpike
Commission, the Philadelphia Regional Port Authority and the Pennsylvania
Economic Development Financing Authority. As of December 31, 1997, the aggregate
outstanding indebtedness of these entities was $8,225.0 million.

The Pennsylvania Housing Finance Agency ("PHFA"), as of
December 31, 1997, had $2,631.1 million of revenue bonds outstanding. The
statute creating PHFA provides that if there is a potential deficiency in the
capital reserve fund or if funds are necessary to avoid default on interest,
principal or sinking fund payments on bonds or notes of PHFA, the Governor, upon
notification from the PHFA, shall place in the budget of the Commonwealth for
the next succeeding year an amount sufficient to make up any such deficiency or
to avoid any such default. The budget as finally adopted by the General Assembly
may or may not include the amount so placed therein by the Governor. PHFA is not
permitted to borrow additional funds so long as any deficiency exists in the
capital reserve fund.

The Hospitals and Higher Education Facilities Authority of
Philadelphia, as of June 30, 1997, had $21.1 million of bonds outstanding which
benefit from a moral obligation of the Commonwealth's Department of Public
Welfare to request a budget appropriation to make up any deficiency in the debt
service reserve fund for said bonds. The budget as finally adopted may or may
not include the amount requested.

The Commonwealth, through several of its departments and
agencies, has entered into various agreements to lease, as lessee, certain real
property and equipment and to make lease rental payments. Some of those lease
payments are pledged as security for various outstanding debt obligations issued
by certain public authorities or other entities within the state. All lease
payments due from Commonwealth departments and agencies are subject to and
dependent upon an annual spending authorization approved through the
Commonwealth's annual budget process. The Commonwealth is not required by law to
appropriate or otherwise provide moneys from which the lease payments are to be
paid. The obligations to be paid from such lease payments are not bonded debt of
the Commonwealth.

The Commonwealth maintains contributory benefit pension plans
covering all state employees, public school employees and employees of certain
other state-related organizations. Unfunded actuarial accrued liabilities for
the Public School Employees' Retirement Fund as of June 30, 1997 were negative
$1,663 million, and for the State Employees' Retirement Fund were negative $904
million as of December 31, 1996.

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Municipal Finance
-----------------

Local Finance. The Local Government Unit Debt Act (Act 52 of
1978) (the "Debt Act") establishes debt limits for local government units. Local
government units include municipalities (except a first class city or county),
school districts and intermediate units. The Act establishes three classes of
debt for a local government unit: (i) electoral debt (debt incurred with the
approval of the electors of the municipality for which there is no limitation on
the amount that may be incurred); (ii) nonelectoral debt (debt of a local
government unit not being electoral or lease rental debt); (iii) lease rental
debt (the principal amount of debt of an authority organized by a municipality
or debt of another local government unit, which debt is to be repaid by the
local government unit through a lease, subsidy contract, guarantee or other form
of agreement evidencing acquisition of a capital asset, payable or which may be
payable out of tax revenues and other general revenues. Each local government
unit is subject to a limitation as to the amount of class "ii" and class "iii"
debt which may be issued which is based upon such local government unit's
Borrowing Base.

Borrowing Base is defined in the Debt Act as the annual
arithmetic average of the total revenues for the three full fiscal years ended
next preceding the date of the incurring of nonelectoral debt or lease rental
debt. Total revenues for the purposes of the Debt Act excludes, inter alia,
certain state and federal subsidies and reimbursements, certain pledged
revenues, interest on pledged funds and nonrecurring items.

The debt limitations applicable to the various local
government units are set forth below:

Nonelectoral plus
Nonelectoral Lease Rental
------------ -----------------
First Class
School District 100% of Borrowing Base 200% of Borrowing Base
County 300% of Borrowing Base 400% of Borrowing Base
Other 250% of Borrowing Base 350% of Borrowing Base

A county may utilize an additional debt limit of 100% of its
Borrowing Base for additional nonelectoral or additional lease rental debt, or
both, if such county has assumed countywide responsibility for hospitals and
other public health services, air and water pollution control, flood control,
environmental protection, water distribution and supply systems, sewage and
refuse collection and disposal systems, education at any level, highways, public
transportation, or port operations, but such additional debt limit may be so
utilized only to provide funds for and towards the costs of capital facilities
for any or any combination of the foregoing purposes.

City of Philadelphia. The City of Philadelphia
("Philadelphia") is the largest city in the Commonwealth, with an estimated
population of 1,585,577 according to the 1990 Census. Philadelphia functions
both as a city of the first class and a county for the purpose of administering
various governmental programs.

Legislation providing for the establishment of the
Pennsylvania Intergovernmental Cooperation Authority ("PICA") to assist first
class cities in remedying fiscal emergencies was enacted by the General Assembly
and

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approved by the Governor in June 1991. PICA is designed to provide assistance
through the issuance of funding debt to liquidate budget deficits and to make
factual findings and recommendations to the assisted city concerning its
budgetary and fiscal affairs. At this time, Philadelphia is operating under a
five year fiscal plan approved by PICA on May 20, 1997.

PICA has issued $1,761.7 million of its Special Tax Revenue
Bonds in the following series: Series of 1992 in the amount of $474.6 million;
Series of 1993 in the amount of $643.4 million; and Series of 1993A in the
amount of $178.7 million (issued to advance refund a portion of the Series of
1992); Series of 1994 in the amount of $122.0 million and Series of 1996 in the
amount of $343.0 million (issued to advance refund the Series of 1994 and the
remaining outstanding portion of the Series of 1992). This financial assistance
has included the refunding of certain city general obligation bonds, the funding
of capital projects and the liquidation of the cumulative General Fund balance
deficit as of June 30, 1992 of $224.9 million. The audited General Fund balance
of the city as of June 30, 1997, showed a surplus of approximately $28.8
million.

No further bonds are to be issued by PICA for the purpose of
financing a capital project or deficit as the authority for such bond sales
expired December 31, 1994. PICA's authority to issue debt for the purpose of
financing a cash flow deficit expired on December 31, 1996. Its ability to
refund existing outstanding debt is unrestricted. PICA had $1,102.4 million in
special revenue bonds outstanding as of June 30, 1997.

Litigation. According to the Official Statement dated March
10, 1998 describing General Obligation Bonds of the Commonwealth of
Pennsylvania, the Office of Attorney General and the Office of General Counsel
have reviewed the status of pending litigation against the Commonwealth, its
officers and employees, and have identified the following cases as ones where an
adverse decision could materially affect the Commonwealth's governmental
operations. Listed below are all litigation items so identified that may have a
material effect on government operations of the Commonwealth and consequently,
the Commonwealth's ability to pay debt service on its obligations.

Under Act No. 1978-152 approved September 28, 1978, as
amended, the General Assembly approved a limited waiver of sovereign immunity.
Damages for any loss are limited to $250,000 for each person and $1,000,000 for
each accident. The Supreme Court of Pennsylvania has held that this limitation
is constitutional. Approximately 3,500 suits against the Commonwealth remain
open. Tort claim payments for the departments and agencies, other than the
Department of Transportation, are paid from departmental and agency operating
and program appropriations. Tort claim payments for the Department of
Transportation are paid from an appropriation from the Motor License Fund. The
Motor License Fund tort claim appropriation for fiscal 1998 is $27.0 million.

Baby Neal v. Commonwealth. In April of 1990, the American
Civil Liberties Union ("ACLU") and various named plaintiffs filed a lawsuit
against the Commonwealth in federal court seeking an order requiring the
Commonwealth to provide additional funding for child welfare services. No
figures for the amount of funding sought are available. A similar lawsuit filed
in the Commonwealth Court, captioned as The City of Philadelphia, Hon. Wilson
Goode v. Commonwealth of Pennsylvania, Hon. Robert P. Casey et al., was resolved
through a court approved settlement providing, inter alia, for more Commonwealth
funding for these services for fiscal year 1991 as well as a commitment to pay
to counties $30.0 million over five years. The Commonwealth

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then sought dismissal of the federal action based on, among other things, the
settlement of the Commonwealth Court case.

In January of 1992, the U.S. District Court, per Judge Kelly,
denied the ACLU's motion for class certification and held that the "next
friends" seeking to represent the interests of the 16 minor plaintiffs in the
case were inadequate representatives. The Commonwealth filed a motion for
summary judgment on most of the counts in the ACLU's complaint on the basis of,
among other things, Suter v. Artist M.. After the motion for summary judgment
was filed, the ACLU filed a renewed motion to certify sub-classes.

In December of 1994, the Third Circuit reversed Judge Kelly's
ruling, finding that he erred in refusing to certify the class. Consistent with
the Third Circuit's ruling, the District Court certified the class, and the
parties have resumed discovery.

County of Allegheny v. Commonwealth of Pennsylvania. On
December 7, 1987, the Supreme Court of Pennsylvania held in County of Allegheny
v. Commonwealth of Pennsylvania, that the statutory scheme for county funding of
the judicial system is in conflict with the Pennsylvania Constitution. However,
the Supreme Court of Pennsylvania stayed its judgment to afford the General
Assembly an opportunity to enact appropriate funding legislation consistent with
its opinion and ordered that the prior system of county funding shall remain in
place until this is done.

On December 7, 1992, the State Association of County
Commissioners filed a new action in mandamus seeking to compel the Commonwealth
to comply with the decision in County of Allegheny. The Court issued the writ on
July 26, 1996, and appointed retired Justice and Senior Judge Frank J.
Montemuro, Jr. as special master to devise and submit a plan for implementation.
The Court indicated that it intends to require implementation by January 1,
1998.

Following issuance of the writ, the President Pro Tempore of
the Senate and the Speaker of the House filed a petition seeking reconsideration
from the Court.

On January 28, 1997, the Supreme Court granted Justice
Montemuro's request for a 90-day extension of time within to file his report.
The Court also announced the establishment of a tripartite committee, including
representatives of the Executive Department, the Legislative Department and
Justice Montemuro, to develop an implementation plan. On July 26, 1997, Justice
Montemuro filed the Interim Report of the Master wherein he recommended a four
phase transition to state funding of a unified judicial system, during each of
which specified court employees would transfer into the state payroll system.
Justice Montemuro recommended implementation of Phase I effective July 1, 1998
with completion of the final phase early next century. Objections to the report
were due September 1, 1997. The General Assembly has yet to enact legislation
implementing the Supreme Court of Pennsylvania's judgment. However, the Governor
has proposed as part of this recommended budget for fiscal 1999 that the General
Assembly appropriate $15.6 million to implement Phase I of the Interim Report of
the Master.

Fidelity Bank v. Commonwealth of Pennsylvania. On November 30,
1989, Fidelity Bank, N.A. ("Fidelity") filed a declaratory judgment action in
the Commonwealth Court of Pennsylvania in which Fidelity raised various
challenges to the constitutional validity of the Amended Bank Shares Act (Act
No. 1989-21) and related legislation. After the Commonwealth Court ruled in
favor of the Commonwealth, finding no constitutional deficiencies, Fidelity,

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the Commonwealth, and certain intervenor banks filed Notices of Appeal to the
Pennsylvania Supreme Court on August 5, 1994.

Pursuant to a Settlement Agreement dated as of April 21, 1995,
the Commonwealth agreed to enter a credit in favor of Fidelity in the amount of
$4,100,000 in settlement of the constitutional and non-constitutional issues,
including interest. This credit represents a credit of approximately five % (5%)
of the potential claim of Fidelity, had the constitutional issues been resolved
in favor of Fidelity.

Pursuant to a separate Settlement Agreement dated as of April
21, 1995, the Commonwealth settled with the intervening banks, referred to as
"New Banks," in connection with issues concerning the New Bank Tax Credit law
which were raised in the above-referenced Pennsylvania Supreme Court appeal. As
part of the settlement, the Commonwealth agreed neither to assess nor attempt to
recoup any new bank tax credits which had been granted or taken by any of the
intervening banks. No expenditure of Commonwealth funds is required in order to
implement this aspect of the settlement with the intervening banks, since the
credits have already been claimed by said banks.

Although the described settlements have eliminated the
Commonwealth's exposure to Fidelity and the intervening banks, other banks have
filed petitions which are currently pending with the Commonwealth Court. One of
these banks, Royal Bank of Pennsylvania, has filed a Stipulation of Facts with
the Court and in effect is proceeding forward on behalf of all the other banks.
These appeals raise the issues which were advanced by Fidelity, although not
brought to final resolution by the Pennsylvania Supreme Court. By decision dated
January 8, 1998, a panel of the Commonwealth Court ruled in favor of the
Commonwealth, finding no constitutional violation. Royal Bank has filed
exceptions and is awaiting argument before the Court en banc.

Pennsylvania Association of Rural and Small Schools (PARSS) v.
Casey. This action was filed in January, 1991 by an association of rural and
small schools, several individual school districts, and a group of parents and
students, against Governor Robert P. Casey and Secretary of Education Donald M.
Carroll, Jr. The action challenges the constitutionality of the Commonwealth's
system for funding local school districts. The action consists of two parallel
cases, one in the Commonwealth Court of Pennsylvania, and one in the United
States District Court for the Middle District of Pennsylvania. The federal court
case has been indefinitely stayed, pending resolution of the state court case.
The state court case has been assigned to Judge Pellegrini. Trial and post-trial
briefing have been completed, and oral argument was heard on September 8, 1997.
Judge Pellegrini has taken the case under advisement.

Austin v. Department of Corrections, et al. In November 1990,
the American Civil Liberties Union ("ACLU") brought a class action lawsuit on
behalf of the inmate populations in thirteen Commonwealth correctional
institutions.

The lawsuit challenged the conditions of confinement at each
institution and included specified allegations of overcrowding, deficiencies in
medical and mental health services, inadequate environmental conditions,
disparate treatment of HIV positive prisoners and other assorted claims.

No damages are sought. The ACLU sought injunctive relief which
would modify conditions, change practices and procedures and increase the number
of staff deployment.

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On August 1, 1994, the parties submitted a proposed settlement
agreement to the Court for its review. The Court held hearings on the proposed
Settlement Agreement in December 1994. The Court approved the Settlement
Agreement with a January 17, 1995 Memorandum. On February 3, 1995, the
Commonwealth paid $1.3 million in attorneys' fees to the plaintiffs' attorneys
in accordance with the Agreement. The preliminary injunction relating to certain
health issues was dismissed in August 1996. The attorneys' fees in the amount of
$100,000 in connection with the preliminary injunction were paid in January
1997.

The parties are currently complying with monitoring provisions
outlined in the Agreement. The monitoring phase expired on January 6, 1998. The
attorneys' fees for the 3-year monitoring period will not exceed $60,000 in any
one year.

Envirotest/Synterra Partners. On November 11, 1993, the
Commonwealth of Pennsylvania, Department of Transportation and
Envirotest/Synterra Partners ("Envirotest"), a partnership, entered into a
"Contract for Centralized Emissions Inspection Facilities." Thereafter,
Envirotest acquired certain land and constructed approximately 85 automobile
emissions inspection facilities throughout various regions of the Commonwealth.

By Act of the General Assembly in October 1994 (Act No.
1994-95), the emissions testing program was suspended and the Department of
Transportation was directed to consider other alternatives to the centralized
testing program. Former Governor Robert P. Casey vetoed the legislation and the
General Assembly overrode the veto in November 1994. As a result, the program
was suspended and the Department of Transportation was prohibited from expending
funds to implement the program.

On December 15, 1995, Envirotest Systems Corporation,
Envirotest Partners (successor to Envirotest/Synterra Partners) and the
Commonwealth of Pennsylvania entered into a Settlement Agreement ("Agreement")
pursuant to which the parties settled all claims which Envirotest might have had
against the Commonwealth arising from the suspension of the emissions testing
program. Under the Agreement, Envirotest received $145 million, with interest at
6 percent per annum, paid in the following fashion: $25 million in 1995, $40
million each in 1996 and 1997. Envirotest will receive an additional $40 million
in 1998. An additional $11 million may be required to be paid in 1998, depending
upon the results of property liquidations by Envirotest. On November 26, 1996,
the Commonwealth of Pennsylvania and Envirotest entered into a Consent to
Assignment pursuant to which Envirotest assigned its right, title and interest
in the base settlement to ES Funding Corporation, which subsequently assigned
the same to Market Street Capital Corp., which thereafter assigned the same to
Market Street Funding Corporation. Pursuant to the assignments, Envirotest
authorized the Commonwealth to remit future payments under the Agreement to PNC
Bank, National Association, as the administrator of the assignees.

Pennsylvania Human Relations Commission v. School District of
Philadelphia, et al. v. Commonwealth of Pennsylvania, et al. On November 3,
1995, the Commonwealth of Pennsylvania and the Governor of Pennsylvania, along
with the City of Philadelphia and the Mayor of Philadelphia, were joined as
additional respondents in an enforcement action commenced in Commonwealth
Court in 1973 by the Pennsylvania Human Relations Commission against the
School District of Philadelphia pursuant to the Pennsylvania Human Relations
Act. The enforcement action was pursued to remedy unintentional conditions of

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segregation in the public schools of Philadelphia. The Commonwealth and the City
were joined in the "remedial phase" of the proceeding "to determine their
liability, if any, to pay additional costs necessary to remedy the unlawful
conditions found to exist in the Philadelphia public schools." The Commonwealth
and the City sought to appeal their joinders to the Supreme Court of
Pennsylvania, but the Court denied the petitions without comment.

On February 28, 1996, the School District of Philadelphia
filed a third-party complaint against the Commonwealth of Pennsylvania asking
Commonwealth Court to require the Commonwealth to "supply such funding as is
necessary for full compliance with the November 28, 1994 and other remedial
Orders of the Commonwealth Court." In addition, a group of intervenors on March
4, 1996 filed a third party complaint against the Commonwealth of Pennsylvania
and the City of Philadelphia requesting Commonwealth Court to declare that "it
is the obligation of the Commonwealth and the City to supply the additional
funds identified as necessary for the District to fully comply with the orders
of the Commonwealth Court," and to require the Commonwealth and the City to
supply such additional funding as is necessary for the District to comply with
the orders.

By order dated April 30, 1996, Judge Doris A. Smith of
Commonwealth Court overruled the Commonwealth's and the City's preliminary
objections seeking dismissal of the claims against them. The Commonwealth and
the City thereafter filed answers to the complaints, asserting numerous
defenses. The Commonwealth also asserted a cross-claim against the City of
Philadelphia claiming that if any party is liable, sole liability rests with the
City; in the alternative, the Commonwealth argued that if it is held to be
liable, it has a right of indemnity or contribution against the City. Trial
commenced on May 30, 1996. During the course of the trial, upon motion of the
Commonwealth, the Supreme Court of Pennsylvania on July 3, 1996 assumed
extraordinary plenary jurisdiction and directed Judge Smith to conclude the
proceedings within 60 days and to file with the Supreme Court findings of fact,
conclusions of law and a final opinion. The Supreme Court retained jurisdiction.
The evidence in the trial was concluded on July 11, 1996, after 19 days of
trial. On August 20, 1996, Judge Smith issued an Opinion and Order. Judge Smith
specifically found that "because of the lack of adequate funds to comply with
the remedial order, the School District is entitled to additional resources for
1996-1997 of $45.1 million." In filings made on August 30, 1996, the
Commonwealth requested the Supreme Court to enter judgments in favor of the
Commonwealth and the Governor on all claims. On September 10, 1996, the Supreme
Court of Pennsylvania issued an order granting the Commonwealth's Motion to
Vacate. The Court directed its Prothonotary to establish a briefing schedule and
a date for oral argument and indicated that it would issue a further order
limiting the issues to be addressed. Finally, the Supreme Court stated that
Commonwealth Court "is divested of jurisdiction of th[e] matter..., and all
further proceedings in the Commonwealth Court are stayed pending further order
of th[e Supreme] Court." The Supreme Court again retained jurisdiction. On
January 28, 1997, the Supreme Court issued an order directing the parties to
brief certain issues. The Supreme Court heard oral argument on the three issues
on February 3, 1998 and took the matter under advisement.

Ridge v. State Employee's Retirement Board. On August 1, 1983,
the United States Supreme Court in Arizona Governing Committee v. Norris, 463
U.S. 1073 (1983) held that the use of gender distinct actuarial factors to
calculate pension benefits violated federal civil rights laws. Norris and the
subsequent Florida v. Long, 487 U.S. 223 (1988) limited required application of
gender neutral actuarial factors to benefits based on service credited on

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or after August 1, 1983. Benefits based upon service credited before August 1,
1983, could continue to be calculated using gender distinct actuarial factors.
The State Employee's Retirement Board and its sister agency, the Public School
Employee's Retirement Board, have been in full compliance with Norris, using
gender neutral factors for benefits based upon post-July 31, 1983 service and
gender distinct actuarial factors for benefits based upon pre-August 1, 1983
service. On December 29, 1993, Joseph H. Ridge, former judge of the Allegheny
Court of Common Pleas, filed in the Commonwealth Court a Petition for Review in
the Nature of Complaint in Mandamus and for a Declaratory Judgment against the
State Employee's Retirement Board. Judge Ridge filed an amended Petition for
Review on February 7, 1995. Judge Ridge alleges that the Retirement Board's use
of gender distinct actuarial factors for benefits based upon his pre-August 1,
1983 service violates Article I, Section 26 (equal protection) and Article I,
Section 28 (equal rights) of the Pennsylvania Constitution. He seeks "topped up"
benefits equal to those that a similarly situated female would be receiving. Due
to the constitutional nature of the claim, it is possible that a decision
adverse to the Retirement Board would be applicable to other members of the
State Employee's Retirement System and Public School Employee's Retirement
System who accrued service between the effective date of the state
constitutional provisions and before August 1, 1983, and who have received, are
receiving, or will receive benefits less than those received by other members of
the systems because of their sex or the sex of their survivors' annuitants. The
Commonwealth Court granted the Retirement Board's preliminary objections to
Judge Ridge's claims for punitive damages, attorneys' fees and compensatory
damages other than a recalculation of his pension benefits should he prevail.
The Commonwealth Court also denied Judge Ridge's preliminary objections to the
Retirement Board's New Matter. On November 20, 1996, the Commonwealth Court
heard oral argument en banc on Judge Ridge's motion for judgment of the
pleadings. On February 13, 1997, the Commonwealth Court, after all arguments en
banc, denied Judge Ridge's motion for judgment on the pleadings.

Yesenia Marrero, et al. v. Commonwealth, et al. On February
24, 1997, five residents of the City of Philadelphia, on their own behalf and on
behalf of their school-aged children, joined by the City of Philadelphia, the
School District of Philadelphia, and two non-profit organizations, ASPIRA, Inc.
of Pennsylvania and the Philadelphia Branch of the NAACP, filed in the
Commonwealth Court of Pennsylvania a civil action for declaratory judgment
against the Commonwealth of Pennsylvania, the General Assembly of Pennsylvania,
the presiding officers of the General Assembly, the Governor of Pennsylvania,
the State Board of Education, the Department of Education, and the Secretary of
Education. Citing the Education Clause of the Constitution of Pennsylvania, as
well as provisions of the Declaration of Rights under the Pennsylvania
Constitution, the petitioners claim, inter alia, that Pennsylvania's "statutory
education financing system is unconstitutional as applied to the School District
[of Philadelphia]"; that "[t]he system of funding public education violated the
constitutional mandate to provide a thorough and efficient system of public
education in the City [of Philadelphia]"; that "[t]he scheme for financing
public education precludes the Commonwealth from providing the constitutionally
required thorough and efficient system of public education in the circumstances
faced by the School District [of Philadelphia]"; and that "Defendants have
failed to provide the School District [of Philadelphia] with the resources and
other assistance necessary to provide all of its students with the quality of
education to which they are [c]onstitutionally entitled." Petitioners seek an
order that provides, inter alia, as follows: 1. A declaration "that the
Commonwealth has failed to fulfill its obligations to provide for an adequate
system of public schools in the School District [of Philadelphia]." 2. A
declaration "that

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the present statutory scheme employed for funding public education in the
Commonwealth as applied to the School District [of Philadelphia] violates
Article 3, Section 14 of the Pennsylvania Constitution." 3. A declaration "that
the [l]egislature must amend the present or enact new education legislation so
as to assure that education funding for the School District [of Philadelphia]
accounts and makes adequate provision for the greater and special educational
challenges and needs of students in the School District in order to redress
their disadvantage."

The respondents filed preliminary objections seeking dismissal
of the action. After briefs were filed, Commonwealth Court en banc heard oral
argument on September 10, 1997 and took the matter under advisement.

The Commonwealth Court granted respondent's preliminary
objections and dismissed the case on the grounds that the issues it presented
are non- justiciable. An appeal is expected.

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."

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:

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

less than 6 months 0%
6 mos. to 1 year 1%

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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%

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 Certifi
cateholder 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 Reich & Tang Distributors, Inc. and its affiliates, Gruntal & Co., L.L.C. 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. In addition, 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.

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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.

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

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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 Certifi
cateholders 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

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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 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

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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
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 Certificate
holders 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
----------

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 corporate 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 Battle Fowler LLP, counsel for the Sponsor,
under existing law:

The Trusts are not associations taxable as corporations for federal
income tax purposes under the Internal Revenue Code of 1986 (the "Code"), and
income received by the Trusts that consists of interest

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excludable from federal gross income under the Code will be excludable from the
federal gross income of the Certificateholders of such Trusts.

Each Certificateholder will be considered the owner of a pro rata
portion of the Trust under Section 676(a) of the Code. Thus, each Cer
tificateholder 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 federal income tax when received by that
Trust will constitute tax-exempt income when received by the Certificateholders.

Gain (other than any earned original issue discount) realized on a sale
or redemption of the Bonds or on a sale of a Unit is, however, includable in
gross income for federal income tax purposes, generally as capital gain,
although gain on the disposition of a Bond or a Unit purchased at a market
discount generally will be treated as ordinary income, rather than capital gain,
to the extent of accrued market discount. (It should be noted in this connection
that such gain does not include any amounts received in respect of accrued
interest.) Such gain may be long- or short-term depending on the holding period
of the Units, assuming that the Units are held as capital assets. 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 assets held
by individuals 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 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
Certificate holder 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 plus any accrued
original issue discount. 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. No deduction is allowed for the
amortization of bond premium on tax-exempt bonds, such as the Bonds, in
computing regular federal income tax.

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 a discount bond is
increased by the amount of accrued, tax-exempt original issue discount thus
determined. This method of calculation

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will produce higher capital gains (or lower losses) to a Certificate holder, 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 Certificate holder'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 benefits exceeds a base amount. The base amount is $25,000 for an
individual, $32,000 for a married couple filing a joint return and zero for
married persons filing separate returns. Interest on tax-exempt bonds is to be
added to adjusted gross income for purposes of computing the amount of Social
Security benefits that are includable in gross income and determining whether an
individual'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 minimum tax on excess "passive investment income" which includes tax-exempt
interest.

Under federal law, interest on Navigator Trust-held Bonds issued by
authority of the Government of Puerto Rico is exempt from regular federal income
tax, and state and local income tax in the United States and Puerto Rico. 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 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

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New York City entire net income for purposes of calculating New York State and
New York City franchise (income) tax.

The Insured Municipal Securities Trust is not subject to the New York
State Franchise Tax on Business Corporations or the New York City General
Corporation Tax. For a Certificateholder who is a New York resident, however, a
pro rata portion of all or part of the income of the Trust will be treated as
the income of the Certificateholder under the income tax laws of the State and
City of New York. Similar treatment may apply in other states.

The exemption of interest on municipal obligations for federal
income tax purposes does not necessarily result in exemption under the income
tax laws of any state or political subdivision. In general, municipal bond
interest exempt from federal income tax is taxable income to residents of the
State or City of New York under the tax laws of those jurisdictions unless the
bonds are issued by the State of New York or one of its political subdivisions
or by the Commonwealth of Puerto Rico or one of its political subdivisions. 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 instrumental
ities, 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 such 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.

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.

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

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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 Certificate-holder who is an
individual, estate or trust does not exceed the Redemption
Price. To the extent that the amount 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.

In the opinion of Saul, Ewing, Remick & Saul, special counsel
to the Sponsor on Pennsylvania tax matters, under existing law:

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(1) Units evidencing fractional undivided interests in the
Trust, to the extent represented by obligations issued by the
Commonwealth of Pennsylvania, any public authority, commission, board or
other agency created by the Commonwealth of Pennsylvania, any political
subdivision of the Commonwealth of Pennsylvania or any public authority
created by any such political subdivision, or by the Government of
Puerto Rico or its public authorities, are not taxable under any of the
personal property taxes presently in effect in Pennsylvania;

(2) Distributions of interest income to Certificateholders
that would not be taxable if received directly by a Pennsylvania
resident are not subject to personal income tax under the Pennsylvania
Tax Reform Code of 1971; nor will such interest be taxable under
Philadelphia School District Investment Income Tax imposed on
Philadelphia resident individuals;

(3) A Certificateholder which is an individual, estate or
trust will have a taxable event under the Pennsylvania state and local
income tax referred to in the preceding paragraph upon the redemption or
sale of Units;

(4) A Certificateholder which is a corporation will have a
taxable event under the Pennsylvania Corporate Net Income Tax or, if
applicable, the Mutual Thrift Institutions Tax, upon the redemption or
sale of its Units. Interest income distributed to Certificateholders
which are corporations is not subject to Pennsylvania Corporate Net
Income Tax or Mutual Thrift Institutions Tax. However, banks, title
insurance companies and trust companies may be required to take the
value of Units into account in determining the taxable value of their
shares subject to Shares Tax;

(5) Under Act No. 68 of December 3, 1993, gains derived by the
Trust from the sale, exchange or other disposition of Pennsylvania Bonds
may be subject to Pennsylvania personal or corporate income taxes. Those
gains which are distributed by the Trust to Certificateholders who are
individuals will be subject to Pennsylvania Personal Income Tax and, for
residents of Philadelphia, to Philadelphia School District Investment
Income Tax. For Certificateholders which are corporations, the
distributed gains will be subject to Corporate Net Income Tax or Mutual
Thrift Institutions Tax;

(6) For Pennsylvania Bonds, gains which are not distributed by
the Trust will nevertheless be taxable to Certificateholders if derived
by the Trust from the sale, exchange or other disposition of these Bonds
issued on or after February 1, 1994. Such gains which are not
distributed by the Trust will remain nontaxable to Certificateholders if
derived by the Trust from the sale, exchange or other disposition of
Bonds issued prior to February 1, 1994. However, for gains from the
sale, exchange or other disposition of these Bonds to be taxable under
the Philadelphia School District Investment Income Tax, the Bonds must
be held for six months or less;

(7) Gains from the sale, exchange or other disposition of
Puerto Rico Bonds will be taxable to Certificateholders if distributed
or retained by the Trust. However, for gains from the sale, exchange or
other disposition of these Bonds to be taxable under the Philadelphia
School District Investment Income Tax, the Bonds must be held for six
months or less;

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(8) Units are subject to Pennsylvania inheritance and estate
taxes;

(9) Any proceeds paid under insurance policies issued to the
Trustee or obtained by issuers or the underwriters of the Bonds, the
Sponsor or others which represent interest on defaulted obligations held
by the Trustee will be excludable from Pennsylvania gross income if, and
to the same extent as, such interest would have been so excludable if
paid in the normal course by the issuer of the defaulted obligations;
and

(10) The Trust is not taxable as a corporation under
Pennsylvania tax laws applicable to corporations.

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.
However, such interest is deductible for New York State and New York City income
tax purposes by corporations that are required to include interest on the Bonds
in New York State and New York City entire net income for purposes of
calculating New York State and City franchise (income) taxes. 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

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that acquire Units, in general no deduction is allowed for interest expense
allocable to the Units.

From time to time, proposals have been introduced before
Congress to restrict or eliminate the federal income tax exemption for interest
on debt obligations similar to the Bonds in the Trust, and it can be expected
that similar proposals may be introduced in the future. In particular, Congress
may consider the adoption of some form of "flat tax," which could have an
adverse impact on the value of tax-exempt bonds.

In South Carolina v. Baker, the U.S. Supreme Court held that
the federal government may constitutionally require states to register bonds
they issue and subject the interest on such bonds to federal income tax if not
registered, and that there is no constitutional prohibition against the federal
government's taxing the interest earned on state or other municipal bonds. The
Supreme Court decision affirms the authority of the federal government to
regulate and control bonds such as the Bonds in the Trust and to tax interest on
such bonds in the future. 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 Reich & Tang Distributors, Inc. 600
Fifth Avenue, New York, New York 10020 on behalf of the Sponsor. Units received
after 4 P.M., New York 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

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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 Trust 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 for redemptions. Such sales, if required, could

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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 Cer
tificateholder 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 is 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

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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 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.

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

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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 Sponsors. The Sponsor, Reich & Tang Distributors, Inc.
("Reich & Tang") (successor to the Unit Investment Trust division of Bear,
Stearns & Co. Inc.), a Delaware limited partnership, is engaged in the brokerage
business and is a member of the National Association of Securities Dealers, Inc.
Reich & Tang is also a registered investment adviser. Reich & Tang maintains its
principal business offices at 600 Fifth Avenue, New York, New York 10020. The
sole shareholder of the Sponsor, Reich & Tang Asset Management, Inc. ("RTAM
Inc.") is wholly owned by NEIC Holdings, Inc. which, effective December 29,
1997, was wholly owned by NEIC Operating Partnership, L.P. ("NEICOP").
Subsequently, on March 31, 1998, NEICOP changed its name to Nvest Companies,
L.P. ("Nvest"). The general partners of Nvest are Nvest Corporation and Nvest,
L.P. Nvest, L.P. is owned approximately 99% by public unitholders and its
general partner is Nvest Corporation. Nvest, with a principal place of business
at 399 Boylston Street, Boston, MA 02116, is a holding company of firms engaged
in the securities and investment advisory business. These affiliates in the
aggregate are investment advisors or managers to over 80 registered investment
companies. Reich & Tang is Sponsor (and Co-Sponsor, as the case may be) for
numerous series of unit investment trusts, including New York Municipal Trust,
Series 1 (and Subsequent Series), Municipal Securities Trust, Series 1 (and
Subsequent Series), 1st Discount Series (and Subsequent Series), Multi-State
Series 1 (and Subsequent Series), Mortgage Securities Trust, Series 1 (and
Subsequent Series), Insured Municipal Securities Trust, Series 1 (and Subsequent
Series), and 5th Discount Series (and Subsequent Series), Equity Securities
Trust, Series 1, Signature Series, Gabelli Communications Income Trust (and
Subsequent Series) and Schwab Trusts.

For certain other Trusts as set forth in the "Summary of
Essential Information" in Part A, the Sponsors are Reich & Tang and Gruntal &
Co., L.L.C., both of whom have entered into an Agreement Among Co-Sponsors
pursuant to which both parties have agreed to act as Co-Sponsors for the Trust.
Reich & Tang has been appointed by Gruntal & Co., L.L.C. as agent for purposes
of taking any action required or permitted to be taken by the Sponsor under the
Trust Agreement. If the Sponsors are unable to agree with respect to action to
be taken jointly by them under the Trust Agreement and they cannot agree as to
which Sponsor shall act as sole Sponsor, then Reich & Tang shall act as sole
Sponsor. If one of the Sponsors fails to perform its duties under the Trust
Agreement or becomes incapable of acting or becomes bankrupt or its affairs are
taken over by public authorities, that Sponsor may be discharged under the Trust
Agreement and a new Sponsor may be appointed or the remaining Sponsor may
continue to act as Sponsor.

Gruntal & Co., L.L.C., a Delaware limited liability company,
operates a regional securities broker/dealer from its main office in New York
City and branch offices in nine states. The firm is very active in the marketing
of investment companies and has signed dealer agreements with many mutual fund
groups. Further, through its Syndicate Department, Gruntal & Co., L.L.C. has
underwritten a large number of Closed-End Funds and has been Co- Manager on the
following offerings: Cigna High Income Shares; Dreyfus New York Municipal
Income, Inc.; Franklin Principal Maturity Trust and Van Kampen Merritt Limited
Term High Income Trust. The Sponsor is liable for the

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performance of its obligations arising from its responsibilities under the Trust
Agreement, but will be under no liability to Certificateholders for taking any
action, or refraining from taking any action, in good faith pursuant to the
Trust Agreement, or 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 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 Certificateholders for taking any action, or refraining from taking
any action, in good faith pursuant to the Trust Agreement, or for errors in
judgment except in cases of its own wilful 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

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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 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 such successor Trustee, all the rights,
powers, duties and obligations of the original 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
capital, surplus and undivided profits of not less than $2,500,000.

The Evaluator. The Evaluator is Kenny S&P Evaluation Services,
a division of a business unit 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

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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".)

The Sponsor 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 of this Prospectus. The Sponsor's fee may exceed the
actual cost of providing portfolio supervisory services for this Trust, but at
no time will the total amount received for portfolio supervisory services
rendered to all series of the Municipal Securities Trust in any calendar year
exceed the aggregate cost to the Sponsor of supplying such services in such
year. (See "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. Both 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

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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 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

112677.8
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<PAGE>

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. Certificate holders 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 Reich & Tang or a sponsor controlled by or under common control
with Reich & Tang 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.

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

112677.8
-71-

<PAGE>

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-, mid- 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 Battle
Fowler LLP, 75 East 55th Street, 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. Certain matters relating to Pennsylvania tax law
have been passed upon by Saul, Ewing, Remick & Saul, as special Pennsylvania
counsel to the Sponsor.

Independent Accountants. The financial statements of the
Trusts for the years ended December 31, 1996, 1997 and 1998 included in Part A
of this Prospectus have been examined by PricewaterhouseCoopers LLP, independent
accountants. 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.

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 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

112677.8
-72-

<PAGE>

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.

112677.8
-73-

<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.

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.

112677.8
-74-
<PAGE>

INDEX INSURED
----- MUNICIPAL SECURITIES TRUST
Title Page (Unit Investment Trust)
Prospectus
<S> <C> <C>
Summary of Essential Information..................................A-5
Financial and Statistical Information.............................A-6 Dated: October 28, 1998
Information Regarding the Trust...................................A-7
Audit and Financial Information...................................F-1 Sponsor:
Reich & Tang Distributors, Inc.
The Trust........................................................ 1 600 Fifth Avenue
Risk Considerations............................................... 14 New York, New York 10020
Public Offering................................................... 50 (212) 830-5200
Estimated Long Term Return and
Estimated Current Return........................................ 52
Rights of Certificateholders...................................... 53 (and for certain Trusts:)
Tax Status........................................................ 55 Gruntal & Co., L.L.C.
Liquidity......................................................... 62 One Liberty Plaza
Trust Administration.............................................. 64 New York, New York 10005
Trust Expenses and Charges........................................ 69 212-267-8800
Exchange Privilege and Conversion
Offer........................................................... 70 Trustee:
Other Matters..................................................... 72
Description of Bond Ratings....................................... 73 The Chase Manhattan Bank
Description of Rating on the Units................................ 74 4 New York Plaza
New York, New York 10004
Parts A and B of this Prospectus do not 800-882-9898
contain all of the information set forth in
the registration statement and exhibits Evaluator:
relating thereto, filed with the Securities
and Exchange Commission, Washington, D.C., Kenny S&P
under the Securities Act of 1933, and to Evaluation Services
which reference is made. 65 Broadway
New York, New York 10006
</TABLE>
* * *

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.

112677.8

<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 Cross-Reference Sheet (incorporated by reference to the Post-Effective
Amendment to Form S-6 Registration No. 33-45890, filed on October 29,
1996).
The Prospectus consisting of pages.
Signatures.
Consent of Independent Accountants.
Consent of Counsel (included in Exhibit 99.3.1).
Consent of New Jersey Counsel (included in Exhibit 99.3.2). Consents 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 1.1 to Amendment No. 1 to Form S-6
Registration Statement No. 33-50891 of Insured Municipal
Securities Trust, New York Navigator Insured Series 15 & New
Jersey Navigator Insured Series 11, respectively, on
December 9, 1993, and incorporated herein by reference).

99.1.2 -- Reference Trust Agreements including certain Amendments to the
Trust Indenture and Agreement referred to under Exhibit 1.1.1
below (filed as Exhibit 99.1.2 to Post-Effective Amendment
No. 4 to Form S-6 Registration Statement Nos. 33-45890 and
33-53124 of Insured Municipal Securities Trust, Series 29, New
York Navigator Insured Series 11 & New Jersey Navigator Insured
Series 8 and Series 30 & New York Navigator Insured Series 12,
respectively, on October 29, 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).

II-1
138866.1

<PAGE>

99.1.3.4 -- Certificate of Incorporation of Reich & Tang Distributors, Inc.
(filed as Exhibit 99.1.3.5 to Form S-6 Registration Statement
No. 333-44301 on January 15, 1998 and incorporated herein by
reference).

99.1.3.5 -- By-Laws of Reich & Tang Distributors, Inc. (filed as Exhibit
99.1.3.6 to Form S-6 Registration Statement No. 333-44301 on
January 15, 1998 and incorporated herein by reference).

99.1.3.6 -- Certificate of Formation of Gruntal & Co., L.L.C. (filed
as Exhibit 99.1.3.6 to the Post-Effective Amendment to Form
S-6 Registration Statement No. 33-31426 on April 25, 1997
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).

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).

II-2
138866.1

<PAGE>

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 3.1 to Amendment No. 1 to Form S-6
Registration Statement No. 33-50891 of Insured Municipal
Securities Trust, New York Navigator Insured Series 15 & New
Jersey Navigator Insured Series 11, on December 9, 1993, and
incorporated herein by reference).

99.3.1.1 -- 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 99.3.1.1 to Post-Effective Amendment No. 4 to
Form S-6 Registration Statement Nos. 33-45890 and 33-53124 of
Insured Municipal Securities Trust, Series 29, New York
Navigator Insured Series 11 & New Jersey Navigator Insured
Series 8, and Series 30 & New York Navigator Insured Series 12,
respectively, on October 29, 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 3.2 to Amendment
No. 1 to Form S-6 Registration Statement No. 33-50891 of
Insured Municipal Securities Trust, New York Navigator Insured
Series 15 & New Jersey Navigator Insured Series 11, on
December 9, 1993, and incorporated herein by reference).

99.3.2.1 -- 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 99.3.2.1 to
Post-Effective Amendment No. 4 to Form S-6 Registration
Statement No. 33-45890 of Insured Municipal Securities Trust,
Series 29, New York Navigator Insured Series 11 & New Jersey
Navigator Insured Series 8, on October 29, 1996 and
incorporated herein by reference).

*99.5.1 -- Consent of the Evaluator.

99.6.0 -- Powers of Attorney of Reich & Tang Distributors, Inc.,
by its officers and a majority of its Directors (filed as
Exhibit 99.6.0 to Form S-6 Registration Statement No.
333-44301 on January 15, 1998 and incorporated herein by
reference).
- -------------------------
* Being filed by this Amendment.

II-3
138866.1

<PAGE>

99.6.1 -- Power of Attorney of Gruntal & Co., L.L.C., by its
officers and a majority of its Directors of the Executive
Committee (filed as Exhibit 99.6.1 to the Post-Effective
Amendment to Form S-6 Registration Statement No. 33-29989
of Municipal Securities Trust, Multi-State Series 38 on
October 28, 1998 and incorporated herein by reference).

99.7.0 -- Form of Agreement Among Co-Sponsors dated June 9, 1989
(filed as Exhibit 7.0 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).

*27 -- Financial Data Schedules (for EDGAR filing only).
- ------------------
* Being filed by this Amendment.

II-4
138866.1

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933,
the registrants, Insured Municipal Securities Trust, Series 29, New York
Navigator Insured Series 11 & New Jersey Navigator Insured Series 8, Series 30 &
New York Navigator Insured Series 12 and New York Navigator Insured Series 15 &
New Jersey Navigator Insured Series 11 certify that they have met all of the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933.
The registrants have duly caused this Post-Effective Amendment to the
Registration Statement 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
21st day of October, 1998.

GRUNTAL & CO., L.L.C.
(Depositor)

By: /s/ JOANNE T. MARREN
Joanne T. Marren
(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 Gruntal & Co., L.L.C., the Depositor, in the capacities and on
the dates indicated.

Name Title Date
ROBERT P. RITTEREISER Chief Executive Officer and )
Chairman of the Board of ) October 21, 1998
Directors )
LEE FENSTERSTOCK President and Director )
JOANNE T. MARREN Executive Vice President, ) By: /s/ JOANNE T. MARREN
--------------------
General Counsel, Secretary ) Joanne T. Marren
and Director ) Attorney-in-Fact*
HENRY D. GOTTMANN Executive Vice President and )
Director )
JOSEPH V. BATTIPAGLIA Executive Vice President and )
Director )
JOHN FEENEY Director and President of GMS )
JOHN CIRRITO Executive Vice President and )
Director )
RALPH H. BRADLEY, JR. Executive Vice President and )
Director )
STEPHEN BYERS Executive Vice President, )
Chief Financial Officer and )
Director )
STEPHEN A. GREYSER Director )
MICHAEL D. MADDEN Director )

* Executed copies of the Power of Attorney were filed as Exhibit 99.6.1 to the
Post-Effective Amendment to Form S-6 Registration Statement No. 33-29989 on
October 28, 1998.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrants, Insured Municipal Securities Trust, Series 29, New York Navigator
Insured Series 11 & New Jersey Navigator Insured Series 8, Series 30 & New York
Navigator Insured Series 12 and New York Navigator Insured Series 15 & New
Jersey Navigator Insured Series 11 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
21st day of October, 1998.

REICH & TANG DISTRIBUTORS, 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 Reich & Tang Distributors, Inc., the Depositor, in the
capacities and on the dates indicated.

Name Title Date

RICHARD E. SMITH, III President and Director )
PETER S. VOSS Director ) October 21, 1998
G. NEAL RYLAND Director )
STEVEN W. DUFF Director )By: /s/ PETER J. DEMARCO
--------------------
PETER J. DEMARCO Executive Vice President ) Peter J. DeMarco
RICHARD I. WEINER Vice President ) Attorney-in-Fact*
BERNADETTE N. FINN Vice President )
LORRAINE C. HYSLER Secretary )
RICHARD DE SANCTIS Treasurer )
EDWARD N. WADSWORTH Executive Officer )

- ----------------
* Executed copies of Powers of Attorney were filed as Exhibit 99.6.0 to Form
S-6 Registration Statement No. 333-44301 on January 15, 1998.

II-6
138866.1

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Post-Effective Amendment to the registration statement on Form S-6 of our report
dated September 22, 1998, relating to the financial statements and financial
highlights for the year ended June 30, 1998 of the Insured Municipal Securities
Trust, Series 29; Insured Municipal Securities Trust, New York Navigator Insured
Series 11; Insured Municipal Securities Trust, New Jersey Navigator Insured
Series 8; Insured Municipal Securities Trust, Series 30; Insured Municipal
Securities Trust, New York Navigator Insured Series 12; Insured Municipal
Securities Trust, New York Navigator Insured Series 15; and Insured Municipal
Securities Trust, New Jersey Navigator Insured Series 11, which appear in such
Prospectus. We also consent to the reference to us under the heading
"Independent Accountants" in the Prospectus.

PricewaterhouseCoopers LLP
Boston, Massachusetts
October 27, 1998

II-7

138866.1

<ARTICLE> 6
<LEGEND> The schedule contains
summary financial information extracted from
the financial statements and supporting
schedules as of the end of the most current
period and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000884185
<NAME> IMST, Series 29
<SERIES>
<NUMBER> 1
<NAME> IMST, Series 29

<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-START> Jul-01-1997
<PERIOD-END> Jun-30-1998
<INVESTMENTS-AT-COST> 4,273,664
<INVESTMENTS-AT-VALUE> 4,585,041
<RECEIVABLES> 74,683
<ASSETS-OTHER> 10,552
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,670,276
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 4,670,276
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 160,205
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 27,030
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 311,377
<NET-ASSETS> 4,670,276
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 268,608
<OTHER-INCOME> 0
<EXPENSES-NET> 10,412
<NET-INVESTMENT-INCOME> 258,196
<REALIZED-GAINS-CURRENT> 8,688
<APPREC-INCREASE-CURRENT> 62,144
<NET-CHANGE-FROM-OPS> 329,028
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 245,449
<DISTRIBUTIONS-OF-GAINS> 295,524
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 272
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (211,945)
<ACCUMULATED-NII-PRIOR> 147,458
<ACCUMULATED-GAINS-PRIOR> (1,911)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1,052.20
<PER-SHARE-NII> 57.32
<PER-SHARE-GAIN-APPREC> 16.24
<PER-SHARE-DIVIDEND> 54.50
<PER-SHARE-DISTRIBUTIONS> 2.06
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1,069.20
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND> The schedule contains
summary financial information extracted from
the financial statements and supporting
schedules as of the end of the most current
period and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000884185
<NAME> IMST-NY NAV SERIES 11
<SERIES>
<NUMBER> 2
<NAME> IMST-NY NAV SERIES 11

<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-START> Jul-01-1997
<PERIOD-END> Jun-30-1998
<INVESTMENTS-AT-COST> 2,980,427
<INVESTMENTS-AT-VALUE> 3,125,583
<RECEIVABLES> 68,440
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,194,023
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 34,772
<TOTAL-LIABILITIES> 34,772
<SENIOR-EQUITY> 3,159,251
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 34,296
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (628)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 145,156
<NET-ASSETS> 3,159,251
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 204,359
<OTHER-INCOME> 0
<EXPENSES-NET> 8,050
<NET-INVESTMENT-INCOME> 196,309
<REALIZED-GAINS-CURRENT> 10,283
<APPREC-INCREASE-CURRENT> 26,134
<NET-CHANGE-FROM-OPS> 232,726
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 207,173
<DISTRIBUTIONS-OF-GAINS> 418,068
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 392
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (392,515)
<ACCUMULATED-NII-PRIOR> 45,160
<ACCUMULATED-GAINS-PRIOR> 30,469
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1,005.88
<PER-SHARE-NII> 58.87
<PER-SHARE-GAIN-APPREC> 11.42
<PER-SHARE-DIVIDEND> 62.12
<PER-SHARE-DISTRIBUTIONS> 7.60
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1,006.45
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND> The schedule contains summary
financial information extracted from the
financial statements and supporting schedules
as of the end of the most current period and
is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000884185
<NAME> IMST-NJ NAV SERIES 8
<SERIES>
<NUMBER> 3
<NAME> IMST-NJ NAV SERIES 8

<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-START> Jul-01-1997
<PERIOD-END> Jun-30-1998
<INVESTMENTS-AT-COST> 2,702,264
<INVESTMENTS-AT-VALUE> 2,839,434
<RECEIVABLES> 74,948
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,914,382
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 55,276
<TOTAL-LIABILITIES> 55,276
<SENIOR-EQUITY> 2,859,106
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 49,854
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (15,038)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 137,170
<NET-ASSETS> 2,859,106
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 166,751
<OTHER-INCOME> 0
<EXPENSES-NET> 7,904
<NET-INVESTMENT-INCOME> 158,847
<REALIZED-GAINS-CURRENT> 10
<APPREC-INCREASE-CURRENT> 32,403
<NET-CHANGE-FROM-OPS> 191,355
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 162,536
<DISTRIBUTIONS-OF-GAINS> 51,254
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 44
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (22,435)
<ACCUMULATED-NII-PRIOR> 53,543
<ACCUMULATED-GAINS-PRIOR> 7
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 841.08
<PER-SHARE-NII> 46.67
<PER-SHARE-GAIN-APPREC> 9.61
<PER-SHARE-DIVIDEND> 47.75
<PER-SHARE-DISTRIBUTIONS> 4.22
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 845.39
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND> The schedule contain summary
financial information extracted from the
financial statements and supporting schedules
as of the end of the most current period and
is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000892871
<NAME> IMST, Series 30
<SERIES>
<NUMBER> 1
<NAME> IMST, Series 30

<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-START> Jul-01-1997
<PERIOD-END> Jun-30-1998
<INVESTMENTS-AT-COST> 3,458,139
<INVESTMENTS-AT-VALUE> 3,769,460
<RECEIVABLES> 58,930
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,828,390
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,775
<TOTAL-LIABILITIES> 13,775
<SENIOR-EQUITY> 3,814,615
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 71,515
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,244)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 311,321
<NET-ASSETS> 3,814,615
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 248,365
<OTHER-INCOME> 0
<EXPENSES-NET> 11,206
<NET-INVESTMENT-INCOME> 237,159
<REALIZED-GAINS-CURRENT> 44,818
<APPREC-INCREASE-CURRENT> (14,619)
<NET-CHANGE-FROM-OPS> 267,358
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 240,915
<DISTRIBUTIONS-OF-GAINS> 539,127
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 437
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (512,684)
<ACCUMULATED-NII-PRIOR> 75,271
<ACCUMULATED-GAINS-PRIOR> 7
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1,040.47
<PER-SHARE-NII> 60.18
<PER-SHARE-GAIN-APPREC> 8.50
<PER-SHARE-DIVIDEND> 61.13
<PER-SHARE-DISTRIBUTIONS> 23.14
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1,024.88
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND> The schedule contains summary
financial information extracted from the
financial statements and supporting schedules
as of the end of the most current period and
is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000892871
<NAME> IMST-NY NAV SERIES 12
<SERIES>
<NUMBER> 2
<NAME> IMST-NY NAV SERIES 12

<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-START> Jul-01-1997
<PERIOD-END> Jun-30-1998
<INVESTMENTS-AT-COST> 4,246,564
<INVESTMENTS-AT-VALUE> 4,652,937
<RECEIVABLES> 84,686
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,737,623
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 30,143
<TOTAL-LIABILITIES> 30,143
<SENIOR-EQUITY> 4,707,480
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 54,542
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 406,373
<NET-ASSETS> 4,707,480
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 286,209
<OTHER-INCOME> 0
<EXPENSES-NET> 10,466
<NET-INVESTMENT-INCOME> 275,743
<REALIZED-GAINS-CURRENT> 4,773
<APPREC-INCREASE-CURRENT> 62,675
<NET-CHANGE-FROM-OPS> 343,191
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 279,957
<DISTRIBUTIONS-OF-GAINS> 197,173
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 160
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (133,939)
<ACCUMULATED-NII-PRIOR> 58,756
<ACCUMULATED-GAINS-PRIOR> 34
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1,020.11
<PER-SHARE-NII> 59.10
<PER-SHARE-GAIN-APPREC> 14.56
<PER-SHARE-DIVIDEND> 60.00
<PER-SHARE-DISTRIBUTIONS> 7.28
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1,026.49
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND> The schedule contains summary
financial information extracted from the
financial statements and supporting schedules
as of the end of the most current period and
is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000908910
<NAME> IMST-NY NAV SERIES 15
<SERIES>
<NUMBER> 1
<NAME> IMST-NY NAV SERIES 15

<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-START> Jul-01-1997
<PERIOD-END> Jun-30-1998
<INVESTMENTS-AT-COST> 3,010,572
<INVESTMENTS-AT-VALUE> 3,077,165
<RECEIVABLES> 57,821
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,134,986
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 20,548
<TOTAL-LIABILITIES> 20,548
<SENIOR-EQUITY> 3,114,438
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 35,189
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 11,043
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 66,593
<NET-ASSETS> 3,114,438
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 169,718
<OTHER-INCOME> 0
<EXPENSES-NET> 7,712
<NET-INVESTMENT-INCOME> 162,006
<REALIZED-GAINS-CURRENT> (994)
<APPREC-INCREASE-CURRENT> 148,430
<NET-CHANGE-FROM-OPS> 309,442
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 165,424
<DISTRIBUTIONS-OF-GAINS> 230,917
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 230
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (86,899)
<ACCUMULATED-NII-PRIOR> 38,607
<ACCUMULATED-GAINS-PRIOR> 13
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 958.48
<PER-SHARE-NII> 50.24
<PER-SHARE-GAIN-APPREC> 46.39
<PER-SHARE-DIVIDEND> 51.30
<PER-SHARE-DISTRIBUTIONS> 2.38
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1,001.43
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND> The schedule contains summary
financial information extracted from the
financial statements and supporting schedules
as of the end of the most current period and
is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000908910
<NAME> IMST-NJNAV-11
<SERIES>
<NUMBER> 2
<NAME> IMST-NJNAV-11

<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-START> Jul-01-1997
<PERIOD-END> Jun-30-1998
<INVESTMENTS-AT-COST> 2,561,578
<INVESTMENTS-AT-VALUE> 2,594,226
<RECEIVABLES> 46,628
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,640,854
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36,292
<TOTAL-LIABILITIES> 36,292
<SENIOR-EQUITY> 2,604,562
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 32,672
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (14,667)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 32,648
<NET-ASSETS> 2,604,562
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 149,030
<OTHER-INCOME> 0
<EXPENSES-NET> 7,340
<NET-INVESTMENT-INCOME> 141,690
<REALIZED-GAINS-CURRENT> (3,320)
<APPREC-INCREASE-CURRENT> 146,034
<NET-CHANGE-FROM-OPS> 284,404
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 144,240
<DISTRIBUTIONS-OF-GAINS> 370,806
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 360
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (230,691)
<ACCUMULATED-NII-PRIOR> 35,222
<ACCUMULATED-GAINS-PRIOR> (8,408)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 947.91
<PER-SHARE-NII> 50.41
<PER-SHARE-GAIN-APPREC> 50.62
<PER-SHARE-DIVIDEND> 51.31
<PER-SHARE-DISTRIBUTIONS> 7.68
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 989.95
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

Standard & Poor's
A Division of The McGraw-Hill Companies

October 28, 1998

Reich & Tang Distributors, Inc.
600 Fifth Avenue
New York, NY 10020

Gruntal & Co., L.L.C.
14 Wall Street
New York, NY 10005

Re: Insured Municipal Securities Trust,
Series 29, New York Navigator Insured Series 11
and New Jersey Navigator Insured Series 8
-----------------------------------------------

Gentlemen:

We have examined the post-effective Amendment to the Registration Statement
File No. 33-45890 for the above-captioned trust. We hereby acknowledge that
Kenny S&P Evaluation Services, a division of J.J. Kenny Co., Inc. is currently
acting as the evaluator for the trust. We hereby consent to the use in the
Amendment of the reference to Kenny S&P Evaluation Services, a division of J.J.
Kenny Co., Inc. as evaluator.

In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registration Statement for the respective
bonds comprising the trust portfolio are the ratings indicated in our KENNYBASE
database.

You are hereby authorized to file a copy of this letter with the Securities
and Exchange Commission.

Sincerely,

Frank A. Ciccotto
FAC/trh

762512.1

<PAGE>

Standard & Poor's
A Division of The McGraw-Hill Companies

October 28, 1998

Reich & Tang Distributors, Inc.
600 Fifth Avenue
New York, NY 10020

Gruntal & Co., L.L.C.
14 Wall Street
New York, NY 10005

Re: Insured Municipal Securities Trust,
Series 30 and New York Navigator Insured Series 12
--------------------------------------------------

Gentlemen:

We have examined the post-effective Amendment to the Registration Statement
File No. 33-53124 for the above-captioned trust. We hereby acknowledge that
Kenny S&P Evaluation Services, a division of J.J. Kenny Co., Inc. is currently
acting as the evaluator for the trust. We hereby consent to the use in the
Amendment of the reference to Kenny S&P Evaluation Services, a division of J.J.
Kenny Co., Inc. as evaluator.

You are hereby authorized to file a copy of this letter with the Securities
and Exchange Commission.

Sincerely,

Frank A. Ciccotto

FAC/trh

762512.1

<PAGE>

Standard & Poor's
A Division of The McGraw-Hill Companies

October 28, 1998

Reich & Tang Distributors, Inc.
600 Fifth Avenue
New York, NY 10020

Gruntal & Co., L.L.C.
14 Wall Street
New York, NY 10005

Re: Insured Municipal Securities Trust,
New York Navigator Insured Series 15
and New Jersey Navigator Insured Series 11
------------------------------------------

Gentlemen:

We have examined the post-effective Amendment to the Registration Statement
File No. 33-50891 for the above-captioned trust. We hereby acknowledge that
Kenny S&P Evaluation Services, a division of J.J. Kenny Co., Inc. is currently
acting as the evaluator for the trust. We hereby consent to the use in the
Amendment of the reference to Kenny S&P Evaluation Services, a division of J.J.
Kenny Co., Inc. as evaluator.

You are hereby authorized to file a copy of this letter with the Securities
and Exchange Commission.

Sincerely,

Frank A. Ciccotto

FAC/trh

762512.1