AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 31, 1997
REGISTRATION NO. 33-48915
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 4
TO
FORM S-6
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FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
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A. EXACT NAME OF TRUST:
GOVERNMENT SECURITIES INCOME FUND
U.S. TREASURY STRATEGY TRUST--1, DEFINED ASSET FUNDS
(A UNIT INVESTMENT TRUST)
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE,
FENNER & SMITH
INCORPORATED
UNIT INVESTMENT TRUSTS
POST OFFICE BOX 9051
PRINCETON, NJ 08543-9051 SMITH BARNEY INC.
TWO WORLD TRADE CENTER
101ST FLOOR
NEW YORK, NY 10048
PAINEWEBBER INCORPORATED PRUDENTIAL SECURITIES DEAN WITTER REYNOLDS INC.
1285 AVENUE OF THE INCORPORATED TWO WORLD TRADE
AMERICAS ONE NEW YORK PLAZA CENTER--59TH FLOOR
NEW YORK, NY 10019 NEW YORK, NY 10292 NEW YORK, NY 10048
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
TERESA KONCICK, ESQ. LEE B. SPENCER, JR. LAURIE A. HESSLEIN
P.O. BOX 9051 ONE NEW YORK PLAZA 388 GREENWICH ST.
PRINCETON, NJ 08543-9051 NEW YORK, NY 10292 NEW YORK, NY 10013
ROBERT E. HOLLEY COPIES TO: DOUGLAS LOWE, ESQ.
1200 HARBOR BLVD. PIERRE DE SAINT PHALLE, 130 LIBERTY STREET--29TH
WEEHAWKEN, NJ 07087 ESQ. FLOOR
450 LEXINGTON AVENUE NEW YORK, NY 10006
NEW YORK, NY 10017
The issuer has registered an indefinite number of Units under the Securities Act
of 1933 pursuant to Rule 24f-2 and filed the Rule 24f-2 Notice for the most
recent fiscal year on February 13, 1997.
Check box if it is proposed that this filing will become effective on August 8,
1997 pursuant to paragraph (b) of Rule 485. / x /
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<PAGE>
DEFINED ASSET FUNDSSM
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GOVERNMENT The objective of this Defined Fund is safety of
SECURITIES capital and current monthly income by investing in
INCOME FUND a portfolio of interest-bearing U.S. Treasury
U.S. TREASURY STRATEGY securities with maturities of approximately one to
TRUSTSM--1 five years. These securities are backed by the
(A UNIT INVESTMENT TRUST) full faith and credit of the United States
- ------------------------------Government. By dividing its holdings among
/ / U.S. GOVERNMENT SECURITIESsecurities with staggered maturities, the fund
/ / LADDERED MATURITIES forms a 'ladder' of investments. Laddering
/ / MONTHLY INCOME arranges maturities over specified periods of time
/ / REINVESTMENT OPTION which can reduce risk from interest rate
fluctuations. This strategy is also designed to
produce a higher overall yield than shorter-term
investments. Approximately once a year until 2007,
the proceeds of each maturing Security in the
Portfolio will be reinvested (an 'Extension')
automatically into a then available U.S. Treasury
security with a maturity of approximately five
years (an 'Extension Security'). By continually
reinvesting in five-year treasuries, the Fund is
always invested in these longer-term, usually
higher-yielding securities while maintaining for
most of the Fund's life an average weighted
maturity of 2 1/2 years for lower price
volatility. Interest income is exempt from state
personal income taxes in all states. There can be
no assurance that the Fund will achieve its
objective.
The value of units will fluctuate with the value
of the Portfolio.
Minimum purchase: $250.
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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
SPONSORS: STATE SECURITIES COMMISSION PASSED UPON THE
Merrill Lynch, ACCURACY
Pierce, Fenner & Smith OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
Incorporated TO THE CONTRARY IS A CRIMINAL OFFENSE.
Smith Barney Inc. INQUIRIES SHOULD BE DIRECTED TO THE TRUSTEE AT
PaineWebber Incorporated 1-800-323-1508
Prudential Securities PROSPECTUS DATED AUGUST 8, 1997.
Incorporated READ AND RETAIN THIS PROSPECTUS FOR FUTURE
Dean Witter Reynolds Inc. REFERENCE.
<PAGE>
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Def ined Asset FundsSM
Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $115 billion sponsored over the last 25 years. Each Defined
Asset Fund is a portfolio of preselected securities. The portfolio is divided
into 'units' representing equal shares of the underlying assets. Each unit
receives an equal share of income and principal distributions.
Defined Asset Funds offer several defined 'distinctives'. You know in advance
what you are investing in and that changes in the portfolio are limited - a
defined portfolio. Most defined bond funds pay interest monthly - defined
income. The portfolio offers a convenient and simple way to invest - simplicity
defined.
Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:
o Municipal portfolios
o Corporate portfolios
o Government portfolios
o Equity portfolios
o International portfolios
The terms of Defined Funds are as short as one year or as long as 30 years.
Special defined funds are available including: insured funds, double and triple
tax-free funds and funds with 'laddered maturities' to help protect against
changing interest rates. Defined Asset Funds are offered by prospectus only.
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Defined U.S. Treasury Portfolio
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Our defined portfolio of U.S. Treasury securities offers you a simple and
convenient way to participate in the U.S. Treasury market and obtain monthly
income while earning an attractive return.
INVESTMENT OBJECTIVES
To obtain safety of capital as well as current monthly income through investment
in an extendable portfolio consisting of U.S. Treasury securities with laddered
maturities of approximately one to five years. The Fund seeks to reduce unit
price fluctuations with changing interest rates by reinvesting the proceeds of
maturing securities approximately once a year until 2007 into Extension
Securities with maturities of approximately five years so that the Fund will
maintain a Portfolio of securities with a weighted average maturity of
approximately 2 1/2 years.
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Defining Your Portfolio
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PORTFOLIO COMPOSITION
As of the evaluation date, April 30, 1997, the Portfolio contains 5 different
issues of U.S. Treasury securities with fixed final maturity dates ranging from
1997 to 2001. The percentage relationships are as follows: 5.50% coupons
maturing 7/31/97, 20%; 5.125% coupons maturing 4/30/98, 20%; 6.75% coupons
maturing 6/30/99, 20%; 6.875% coupons maturing 3/31/00, 20%; and 6.375% coupons
maturing 3/31/01, 20%. As each U.S. Treasury security matures, until
approximately 2007, the proceeds (minus the deferred sales charge payable to the
Sponsors) will be automatically reinvested into new five-year U.S. Treasury
securities. For the last five years of the Fund, proceeds of maturing securities
will be distributed to investors as they become available, returning
approximately 20% of the Portfolio as of the last year in which an Extension
occurs on maturity of each Security.
CALL PROTECTION
100% of the aggregate face amount of the Portfolio is not subject to redemption
prior to maturity but is payable in full at the stated maturity amounts.
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Defining Your Risks
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U.S. Government securities are not affected by credit risk but are subject to
changes in market value resulting from changes in interest rates. Therefore, an
investment in units of the Fund should be made with an understanding of the
risks which an investment in fixed-rate short and intermediate term debt
obligations may entail, including the risk that the value of the Portfolio and
hence of the units will decline with increases in interest rates. Holders should
also understand that while the weighted average maturity of the Portfolio is
approximately 2 years, until approximately 2007 it will range from a low of one
year to a high of five years, depending on the time to the next extension date.
There is no guarantee that the Fund will achieve its investment objective. The
Fund is not backed by the full faith and credit of the U.S. Government.
A-2
<PAGE>
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Defining Your Income
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MONTHLY INCOME DISTRIBUTIONS
The Fund pays monthly income, even though the securities generally pay interest
semi-annually.
WHAT YOU MAY EXPECT
(PAYABLE ON THE 25TH DAY OF THE MONTH TO HOLDERS OF RECORD ON THE 10TH DAY OF
THE MONTH):
Regular Monthly Income per unit $ 4.93
Annual Income per unit: $ 59.22
These figures are estimates and actual payments may vary.
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Defining Your Investment
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PUBLIC OFFERING PRICE PER 1,000 UNITS $1,003.42
The Public Offering Price as of April 30, 1997, the Evaluation Date, is based on
the aggregate offer side evaluation of the underlying securities ($105,052,970)
divided by the number of units outstanding (106,020,611) times 1,000, plus the
initial sales charge. The Public Offering Price on any subsequent date will
vary. An amount equal to net accrued but undistributed interest on the unit is
added to the Public Offering Price. The underlying securities are valued by the
Trustee on the basis of their closing sale prices at 3:30 p.m. Eastern time on
every business day.
LOW MINIMUM INVESTMENT
You can get started with a minimum purchase of $250. There is no minimum
purchase for payroll deduction plans.
SALES CHARGES
The total sales charge for this investment combines an initial up-front sales
charge and a maximum of 10 annual deferred sales charges that will be paid from
the proceeds of maturing Securities on their maturity dates (each a 'Deferred
Charge Payment Date'). The initial sales charge is reduced on quantity
purchases. If an investor sells or redeems units before a Deferred Charge
Payment Date, no future deductions of deferred sales charges will be collected
from that investor. This will have the effect of reducing the rate of sales
charges paid by that investor.
DISTRIBUTIONS
In addition to monthly income distributions, distributions of any capital gain
net income (i.e., the excess of capital gains over capital losses) recognized by
the Fund in any taxable year will be made annually shortly before or after the
end of the year. Until 2007, the proceeds from maturing Securities will be
automatically reinvested into new Securities if available with maturities of
approximately five years. Therafter, a distribution will be made in cash when
each remaining Security in the Fund matures.
REINVESTMENT OPTION
You can elect to automatically reinvest your distributions into additional units
of the Portfolio subject only to the deferred sales charge remaining at the time
of reinvestment. Reinvesting helps to compound your income for a greater total
return.
TAXES
Individual investors will not be subject to any state or local personal income
taxes on distributions of the Fund's interest income. Distributions of ordinary
income or capital gain from the Fund will constitute dividends for Federal
income tax purposes, but will not be eligible for the dividends-received
deduction for corporations.
Distributions to investors who are not U.S. citizens or residents will generally
be subject to withholding tax at the statutory rate of 30% (or a lesser treaty
rate). Because interest income of the type received by the Fund would generally
not be subject to withholding if received directly by a foreign investor, an
investment in the Fund is likely to be appropriate for a foreign investor only
when that foreign investor can utilize a foreign tax credit or corresponding
benefit in respect of such withholding tax.
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Defining Your Costs
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SALES CHARGE
First-time investors pay a 1.25% sales charge when they buy. In addition,
deferred sales charges of $3.75 per 1,000 units will be paid from the proceeds
of maturing Securities on each Deferred Charge Payment Date until 2007 ($37.50
total through the final Deferred Charge Payment Date). This deferred method of
payment keeps more of your money invested over a longer period of time. Although
this is a unit investment trust rather than a mutual fund, the following
information is presented to permit a comparison of fees and an understanding of
the direct or indirect costs and expenses that you pay.
As a %
of Public Amount per
Offering Price 1,000 Units
------------------- ---------------
Maximum Initial Sales Charge 1.25% $ 12.54
Deferred Sales Charge 3.74% 37.50
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4.99% $ 50.04
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Maximum Sales Charge Imposed
on Reinvested Dividends 3.74% $ 37.50
A-3
<PAGE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
Amount per
1,000 Units
---------------
Trustee's Fee $ 0.36
Portfolio Supervision, Bookkeeping and
Administrative Fees $ 0.25
Evaluator's Fee $ 0.02
Other Operating Expenses $ 0.60
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TOTAL $ 1.23
REDEEMING OR SELLING YOUR INVESTMENT
You may redeem or sell your units at any time. Your price will be based on the
then current net asset value (based on the offer side evaluation of the bonds
during the initial public offering period and on the lower, bid side evaluation
thereafter, as determined by an independent evaluation, plus accrued interest).
The redemption and secondary market repurchase price as of April 30, 1997 was
$989.03 per 1,000 units ($14.39 per 1,000 units less than the Public Offering
Price). If you sell your units before the termination of the Portfolio, you will
not pay the remaining deferred sales charges. There is no fee for redeeming or
selling Units.
A-4
<PAGE>
THE GOVERNMENT SECURITIES INCOME FUND,
U.S. TREASURY STRATEGY TRUST - 1, DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of The Government Securities Income Fund,
U.S. Treasury Strategy Trust - 1, Defined Asset Funds:
We have audited the accompanying statement of condition of The Government
Securities Income Fund, U.S. Treasury Strategy Trust - 1, Defined Asset Funds,
including the portfolio, as of April 30, 1997 and the related statements of
operations and of changes in net assets for the years ended April 30, 1997, 1996
and 1995. These financial statements are the responsibility of the Trustee.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Securities owned at
April 30, 1997, as shown in such portfolio, were confirmed to us by The Chase
Manhattan Bank, the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Trustee, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Government Securities
Income Fund, U.S. Treasury Strategy Trust - 1, Defined Asset Funds at April 30,
1997 and the results of its operations and changes in its net assets for the
above-stated years in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
July 24, 1997
D-1
<PAGE>
THE GOVERNMENT SECURITIES INCOME FUND,
U.S. TREASURY STRATEGY TRUST - 1, DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF APRIL 30, 1997
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $104,641,165) (Note 1) $104,857,586
Accrued interest receivable 1,007,473
Total trust property 105,865,059
LESS LIABILITIES:
Advance from Trustee $ 618,698
Accrued Sponsors' fees 8,501 627,199
NET ASSETS, REPRESENTED BY:
106,020,611 units of fractional undivided interest
outstanding (Note 3) 104,866,377
Undistributed net investment income 371,483 $105,237,860
UNIT VALUE ($105,237,860 / 106,020,611 units) $0.99262
</TABLE>
See Notes to Financial Statements.
D-2
<PAGE>
THE GOVERNMENT SECURITIES INCOME FUND,
U.S. TREASURY STRATEGY TRUST - 1, DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE><CAPTION>
Years Ended April 30,
1997 1996 1995
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income $5,818,631 $4,621,610 $3,325,655
Trustee's fees and expenses (110,386) (106,638) (90,586)
Sponsors' fees (13,770) (12,876) (16,758)
Net investment income 5,694,475 4,502,096 3,218,311
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain (loss) on securities sold
or redeemed 208,200 22,563 (66,942)
Unrealized appreciation (depreciation) of
investments (379,893) 1,532,731 500,604
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (171,693) 1,555,294 433,662
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $5,522,782 $6,057,390 $3,651,973
See Notes to Financial Statements.
</TABLE>
D-3
<PAGE>
THE GOVERNMENT SECURITIES INCOME FUND,
U.S. TREASURY STRATEGY TRUST - 1, DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE><CAPTION>
Years Ended April 30,
1997 1996 1995
<S> <C> <C> <C>
OPERATIONS:
Net investment income $ 5,694,475 $ 4,502,096 $ 3,218,311
Realized gain (loss) on securities sold
or redeemed 208,200 22,563 (66,942)
Unrealized appreciation (depreciation)
of investments (379,893) 1,532,731 500,604
Net increase in net assets resulting
from operations 5,522,782 6,057,390 3,651,973
DISTRIBUTIONS TO HOLDERS (Note 2):
Income (5,639,744) (4,459,871) (3,185,046)
Principal (123,807)
Total distributions (5,763,551) (4,459,871) (3,185,046)
DEFERRED SALES CHARGES (Note 5) (321,330) (505,149)
CAPITAL SHARE TRANSACTIONS:
Issuances of 20,332,658, 11,988,833 and
23,967,213 units, respectively 20,214,589 12,030,128 23,255,184
Redemptions of 1,007,465 and 2,760,628
units, respectively (1,025,479) (2,694,180)
Net capital share transactions 20,214,589 11,004,649 20,561,004
NET INCREASE IN NET ASSETS 19,652,490 12,602,168 20,522,782
NET ASSETS AT BEGINNING OF YEAR 85,585,370 72,983,202 52,460,420
NET ASSETS AT END OF YEAR $105,237,860 $85,585,370 $72,983,202
PER UNIT:
Income distributions during year $0.05877 $0.05464 $0.04762
Principal distributions during year $0.00124
Net asset value at end of year $0.99262 $0.99880 $0.97693
TRUST UNITS OUTSTANDING AT END OF YEAR 106,020,611 85,687,953 74,706,585
See Notes to Financial Statements.
</TABLE>
D-4
<PAGE>
THE GOVERNMENT SECURITIES INCOME FUND,
U.S. TREASURY STRATEGY TRUST - 1, DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator based on
bid side evaluations for the securities (see "How to Sell Units -
Trustee's Redemption of Units" in this Prospectus, Part B). The cost
of securities deposited subsequent to the initial date of deposit are
based on offering side evaluations at dates of purchase. Gains or
losses on sales of securities are computed using the first-in, first-
out method.
(b) The Fund is not subject to income taxes. Accordingly, no provision
for such taxes is required.
(c) Interest income is recorded as earned.
2. DISTRIBUTIONS
Net investment income is distributed to Holders each month. Receipts other
than interest, after deductions for redemptions and applicable expenses,
are distributed as explained in "Income and Distributions - Distributions"
in this Prospectus, Part B.
3. NET CAPITAL
Cost of 106,020,611 units at Dates of Deposit $106,729,797
Less sales charges (including deferred sales charges paid) 2,150,453
Net amount applicable to Holders 104,579,344
Redemption of units - net cost of 3,768,093 units
redeemed less redemption amounts 30,598
Realized gain on securities sold or redeemed 163,821
Principal distributions (123,807)
Net unrealized appreciation of investments 216,421
Net capital applicable to Holders $104,866,377
4. INCOME TAXES
All Fund items of income received, expenses paid, and realized gains and
losses on securities sold are attributable to the Holders, on a pro rata
basis, for Federal income tax purposes in accordance with the grantor trust
rules of the United States Internal Revenue Code.
At April 30, 1997, the cost of investment securities for Federal income tax
purposes was approximately equivalent to the cost as shown in the fund's
portfolio.
5. DEFERRED SALES CHARGES
Deferred sales charges are paid to the Sponsors as described in this
Prospectus, Part A.
D-5
<PAGE>
THE GOVERNMENT SECURITIES INCOME FUND,
U.S. TREASURY STRATEGY TRUST - 1, DEFINED ASSET FUNDS
PORTFOLIO
AS OF APRIL 30, 1997
<TABLE><CAPTION>
Portfolio No. and Title of Face Interest
Securities Amount Rate Maturities Cost(1) Value(1)
<S> <C> <C> <C> <C> <C>
1. United States Treasury Notes $ 21,105,000 5.500% 7/31/97 $ 21,173,881 $ 21,089,171
2. United States Treasury Notes 21,105,000 5.125 4/30/98 20,861,447 20,937,004
3. United States Treasury Notes 20,874,000 6.750 6/30/99 20,886,289 21,064,371
4. United States Treasury Notes 20,840,000 6.875 3/31/00 20,876,834 21,089,038
5. United States Treasury Notes 20,784,000 6.375 3/31/01 20,842,714 20,678,002
TOTAL $104,708,000 $104,641,165 $104,857,586
(1) See note 1 to Financial Statements.
</TABLE>
D-6
<PAGE>
AUTHORIZATION FOR REINVESTMENT
GOVERNMENT SECURITIES INCOME FUND
U.S. TREASURY STRATEGY TRUST--1
DEFINED ASSET FUNDS
/ / YES, I WANT TO PARTICIPATE IN THE FUND'S REINVESTMENT PLAN AND PURCHASE
ADDITIONAL UNITS OF THE FUND EACH MONTH.
I hereby acknowledge receipt of the Prospectus for Government Securities
Income Fund, U.S. Treasury Strategy Trust--1, Defined Asset and authorize The
Chase Manhattan Bank to pay distributions on my Units as indicated below
(distributions to be reinvested will be paid for my account to The Chase
Manhattan Bank).
Income distributions
(check one): / / in cash / / reinvested
Please print or type
Name Registered Holder
Address
Registered Holder
(Two signatures required if
joint tenancy)
City State Zip Code
This page is a self-mailer. Please complete the information above, cut
along the dotted line, fold along the lines on the reverse side, tape, and mail
with the Trustee's address displayed on the outside.
12345678
<PAGE>
BUSINESS REPLY MAIL NO POSTAGE
FIRST CLASS PERMIT NO. 644, NEW YORK, N.Y. NECESSARY
IF MAILED
POSTAGE WILL BE PAID BY ADDRESSEE IN THE
GOVERNMENT SECURITIES INCOME FUND UNITED STATES
U.S. TREASURY STRATEGY TRUST--1
THE CHASE MANHATTAN BANK
RETAIL PROCESSING DEPARTMENT
BOWLING GREEN STATION
P.O. BOX 5179
NEW YORK, N.Y. 10274-5179
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(Fold along this line.)
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(Fold along this line.)
<PAGE>
PROSPECTUS--PART B
GOVERNMENT SECURITIES INCOME FUND--U.S. TREASURY STRATEGY TRUSTSM
DEFINED ASSET FUNDSSM
THIS PART B OF THE PROSPECTUS MAY NOT BE DISTRIBUTED UNLESS ACCOMPANIED OR
PRECEDED BY PART A.
FURTHER DETAIL REGARDING ANY OF THE INFORMATION PROVIDED IN THE PROSPECTUS MAY
BE OBTAINED
WITHIN FIVE DAYS BY WRITING OR CALLING THE TRUSTEE, THE ADDRESS AND
TELEPHONE NUMBER OF WHICH ARE SET FORTH ON THE BACK COVER OF THIS PROSPECTUS.
Index
PAGE
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Fund Description...................................... 1
Risk Factors.......................................... 2
How to Buy Units...................................... 3
How to Sell Units..................................... 4
Income, Distributions and Reinvestment................ 5
Fund Expenses......................................... 6
Taxes................................................. 7
Records and Reports................................... 9
PAGE
---------
Trust Indenture....................................... 9
Miscellaneous......................................... 10
Supplemental Information.............................. 11
Appendix A--Sales Charge Schedules.................... a-1
FUND DESCRIPTION
PORTFOLIO SELECTION
Professional buyers and research analysts for Defined Asset Funds, with
access to extensive research, selected the Securities for the Portfolio after
considering the Fund's investment objectives as well as the availability of the
Securities, the price of the Securities compared to similar securities and the
extent to which they were trading at discounts or premiums to par, and the
maturities of the Securities. Only issues meeting these stringent criteria of
the Defined Asset Funds team of dedicated research analysts are included in the
Portfolio. No leverage or borrowing is used nor does the Portfolio contain other
kinds of securities to enhance yield. Yields on U.S. Government securities
depend on many factors including general money market conditions, general
conditions of the bond markets and prevailing interest rates. A summary of the
Securities in the Portfolio appears in Part A of the Prospectus.
The Portfolio contains interest-bearing U.S. Treasury securities, including
certain additional interest-bearing U.S. Treasury securities subsequently
acquired by the Fund through the reinvestment of the proceeds of maturing
securities (less an amount for deferred sales charge obligations) to take place
approximately once a year ('Extensions'). The deposit of the Securities in the
Fund on the initial date of deposit established a proportionate relationship
among the face amounts of the Securities. Following the initial date of deposit
the Sponsors may deposit additional Securities, including Extension Securities,
in order to create new Units, maintaining to the extent possible that original
proportionate relationship.
Because each Defined Asset Fund is a preselected portfolio of securities,
you know the terms of the Securities before you invest. Of course, the Portfolio
will change somewhat over time, as Extension Securities are deposited, and as
Securities mature, are redeemed or are sold to meet Unit redemptions or in other
limited circumstances. Because the Portfolio is not actively managed and
principal is returned as the Securities are disposed of, this principal should
be relatively unaffected by changes in interest rates.
In addition, until 2007, the proceeds from maturing Securities (less an
amount necessary to satisfy the investors' deferred sales charge obligation) may
be reinvested into Extension Securities with maturities of approximately five
years and at prices at or close to par, if possible; if appropriate Extension
Securities are not available in any of those years, and in each year subsequent
to approximately the fourteenth year of the Fund in which a Security matures,
the proceeds will be distributed to investors upon maturity of the Security.
1
<PAGE>
PORTFOLIO SUPERVISION
The Fund follows a buy and hold investment strategy in contrast to the
frequent portfolio changes of a managed fund based on economic, financial and
market analyses. Experienced financial analysts regularly review the Portfolio
and a Security may be sold in certain circumstances including the occurrence of
a default in payment on the Security or any other securities backed by the full
faith and credit of the United States, institution of certain legal proceedings,
if the Security becomes inconsistent with the Fund's investment objectives, a
decline in the price of the Security or the occurrence of other market or credit
factors that, in the opinion of Defined Asset Funds research analysts, makes
retention of the Security detrimental to the interests of investors.
The Sponsors and the Trustee are not liable for any default or defect in a
Security. If a contract to purchase any Security fails, the Sponsors may
generally deposit a replacement security so long as it is a security issued by
the U.S. Treasury and has a fixed maturity date substantially similar to the
failed Security. A replacement security must be deposited within 110 days after
deposit of the failed contract, at a cost that does not exceed the funds
reserved for purchasing the failed Security and at a yield to maturity and
current return substantially equivalent (considering then current market
conditions and relative creditworthiness) to those of the failed Security, as of
the date the failed contract was deposited.
RISK FACTORS
An investment in the Fund entails certain risks, including the risk that
the value of your investment will decline with increases in interest rates. The
U.S. Treasury obligations included in the Portfolio, though backed by the full
faith and credit of the United States, are subject to changes in market value
when interest rates fluctuate. Generally speaking, securities with longer
maturities will fluctuate in value more than securities with shorter maturities.
In recent years there have been wide fluctuations in interest rates and in the
value of fixed-rate bonds generally. The Sponsors cannot predict the direction
or scope of any future fluctuations.
Certain of the Securities may have been deposited at a market discount or
premium principally because their interest rates are lower or higher than
prevailing rates on comparable debt securities. The current returns of market
discount securities are lower than comparably rated securities selling at par
because discount securities tend to increase in market value as they approach
maturity. The current returns of market premium securities are higher than
comparably rated securities selling at par because premium securities tend to
decrease in market value as they approach maturity. Because part of the purchase
price is returned through current income payments and not at maturity, an early
redemption at par of a premium security will result in a reduction in yield to
the Fund. Market premium or discount attributable to interest rate changes does
not indicate market confidence or lack of confidence in the issue.
LITIGATION AND LEGISLATION
The Sponsors do not know of any pending litigation as of the date of this
Prospectus which might reasonably be expected to have a material adverse effect
upon the Fund. At any time after the initial date of deposit, litigation may be
initiated on a variety of grounds, or legislation may be enacted, affecting the
Securities in the Fund.
PAYMENT OF THE SECURITIES AND LIFE OF THE FUND
The size and composition of the Fund will be affected by the level of
redemptions of Units that may occur from time to time. Principally, this will
depend upon the number of investors seeking to sell or redeem their Units and
whether or not the Sponsors are able to sell the Units acquired by them in the
secondary market. As a result, Units offered in the secondary market may not
represent the same face amount of Securities as on the initial date of deposit.
Factors that the Sponsors will consider in determining whether or not to sell
Units acquired in the secondary market include the size of the Fund relative to
its original size, the ratio of Fund expenses to income, the Fund's current and
long-term returns, the degree to which Units may be selling at a premium over
par and the cost of maintaining a current prospectus for the Fund. These factors
may also lead the Sponsors to seek to terminate the Fund earlier than its
mandatory termination date.
FUND TERMINATION
The Fund generally will be terminated no later than one year following the
maturity date of the last maturing Security in the Portfolio. It will terminate
earlier upon the disposition of the last Security or upon the consent of
investors holding 51% of the Units. The Fund may also be terminated earlier by
the Sponsors once the total assets of the Fund have fallen below 40% of the
value of Securities when deposited. A decision by the Sponsors to
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<PAGE>
terminate the Fund early will be based on factors similar to those considered by
the Sponsors in determining whether to continue the sale of Units in the
secondary market.
Notice of impending termination will be provided to investors and
thereafter Units will no longer be redeemable. On or shortly before termination,
the Fund will seek to dispose of any Securities remaining in the Portfolio
although any Security unable to be sold at a reasonable price may continue to be
held by the Trustee in a liquidating trust pending its final disposition. A
proportional share of the expenses associated with termination, including
brokerage costs in disposing of Securities, will be borne by investors remaining
at that time. This may have the effect of reducing the amount of proceeds those
investors are to receive in any final distribution.
HOW TO BUY UNITS
PUBLIC OFFERING PRICE
Units are available from any of the Sponsors, Underwriters and other
broker-dealers at the Public Offering Price plus accrued interest on the Units.
The Public Offering Price varies each Business Day with changes in the value of
the Portfolio and other assets and liabilities of the Fund. In the initial
offering period (expected to last until 2007), the Public Offering Price is
based on the next offer side evaluation of the Securities, and includes a sales
charge based on the number of Units of the Fund purchased on any one day by a
single purchaser (see Initial Offering sales charge schedule in Appendix A). In
the secondary market (after the initial offering period), the Public Offering
Price is based on the bid side evaluation of the Bonds, and includes a sales
charge based on the number of Units of the Fund purchased in the secondary
market on the same day by a single purchaser (see Secondary Market sales charge
schedule in Appendix A). Purchases in the secondary market of one or more Series
sponsored by the Sponsors that have the same rates of sales charge may be
aggregated.
Purchase of Units is subject to (i) an initial sales charge at the rates
set forth in the table below and (ii) a maximum of 10 deferred sales charges of
$3.75 per 1,000 Units payable from the proceeds of maturing Securities on their
maturity date (each a 'Deferred Charge Payment Date'). The percentages which the
aggregate sales charges represent of the Public Offering Price per 1,000 Units
at various intervals are shown in the chart below. If you sell or redeem Units
before the final Deferred Charge Payment Date, no deferred sales charge
deduction will be made from the proceeds, and this will have the effect of
reducing the aggregate sales charges. Similarly, if Units are purchased after
any Deferred Charge Payment Date, you will not pay charges previously deducted
and this will also have the effect of reducing the aggregate sales charges.
AGGREGATE SALES CHARGES AS A
PERCENTAGE OF PUBLIC OFFERING PRICE PER 1,000 UNITS AT SELECTED INTERVALS*
<TABLE>
<CAPTION>
PUBLIC PUBLIC
OFFERING PRICE PUBLIC OFFERING OFFERING PRICE
MINUS PRICE PER PLUS
---------------------- 1,000 UNITS ON --------------------------
$50 $25 APRIL 30, 1997 $25 $50
---------- ---------- ------------------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Public Offering Price $ 953.42 $ 978.42 $ 1,003.42 $ 1,028.42 $ 1,053.42
Aggregate Sales Charges $ 49.41 $ 49.73 $ 50.04 $ 50.35 $ 50.66
Aggregate Sales Charges as a percentage of
Public Offering Price 5.18% 5.08% 4.99% 4.90% 4.81%
</TABLE>
To qualify for a reduced sales charge, the dealer must confirm that the
sale is to a single purchaser or is purchased for its own account and not for
distribution. For these purposes, Units held in the name of the purchaser's
spouse or child under 21 years of age are deemed to be purchased by a single
purchaser. A trustee or other fiduciary purchasing securities for a single trust
estate or single fiduciary account is also considered a single purchaser. This
procedure may be amended or terminated at any time without notice.
Employees of certain Sponsors and Sponsor affiliates and non-employee
directors of Merrill Lynch & Co. Inc. may purchase Units at any time at prices
including a sales charge of not less than $5 per 1,000 Units.
- ---------------
*These represent the maximum fees and figures assuming that Units were purchased
on the date stated and are held until maturity of the Fund. Sales before the
last Deferred Charge Payment Date will result in less deductions of deferred
sales charges and therefore have the effect of reducing the aggregate sales
charge. The initial sales charge is reduced on purchases of 1,000,000 Units or
more.
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The next chart sets forth the estimated maximum dollar amount payable on
account of the deferred sales charge assuming you hold your Units through the
following numbers of maturities of the Securities in the portfolio
(approximately annually), as follows:
MAXIMUM DOLLAR AMOUNT PER 1,000 UNITS
PAYABLE ON ACCOUNT OF DEFERRED SALES CHARGE
CUMULATIVE
DEFERRED
SALES
MATURITIES CHARGE
- ------------- -----------
1 $ 3.75
2 7.50
3 11.25
4 15.00
5 18.75
6 22.50
7 26.25
8 30.00
9 33.75
10 37.50
EVALUATIONS
Evaluations are determined by the independent Evaluator on each Business
Day. This excludes Saturdays, Sundays and the following holidays as observed by
the New York Stock Exchange: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas, and the
following Federal holidays: Martin Luther King's Birthday, Columbus Day and
Veterans Day. Securities evaluations are generally determined on the basis of
current bid or offer prices for the Securities or comparable securities or by
appraisal or by any combination of these methods. Under current market
conditions the bid prices for Treasury obligations of the type deposited in the
Portfolio are expected to be approximately .10% less than the offer price.
Neither the Sponsors, the Trustee or the Evaluator will be liable for errors in
the Evaluator's judgment. The fees of the Evaluator will be borne by the Fund.
CERTIFICATES
Certificates for Units are issued upon request and may be transferred by
paying any taxes or governmental charges and by complying with the requirements
for redeeming Certificates (see How To Sell Units--Trustee's Redemption of
Units). Certain Sponsors collect additional charges for registering and shipping
Certificates to purchasers. Lost or mutilated Certificates can be replaced upon
delivery of satisfactory indemnity and payment of costs.
HOW TO SELL UNITS
SPONSORS' MARKET FOR UNITS
You can sell your Units at any time without a fee. The Sponsors (although
not obligated to do so) will normally buy any Units offered for sale at the
repurchase price next computed after receipt of the order. The Sponsors have
maintained secondary markets in Defined Asset Funds for over 20 years. Primarily
because of the sales charge and fluctuations in the market value of the
Securities, the sale price may be less than the cost of your Units. You should
consult your financial professional for current market prices to determine if
other broker-dealers or banks are offering higher prices for Units.
The Sponsors may discontinue this market without prior notice if the supply
of Units exceeds demand or for other business reasons; in that event, the
Sponsors may still purchase Units at the redemption price as a service to
investors. The Sponsors may reoffer or redeem Units repurchased.
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<PAGE>
TRUSTEE'S REDEMPTION OF UNITS
You may redeem your Units by sending the Trustee a redemption request
together with any certificates you hold. Certificates must be properly endorsed
or accompanied by a written transfer instrument with signatures guaranteed by an
eligible institution. In certain instances, additional documents may be required
such as a certificate of death, trust instrument, certificate of corporate
authority or appointment as executor, administrator or guardian. If the Sponsors
are maintaining a market for Units, they will purchase any Units tendered at the
repurchase price described above. The Fund has no back-end load or 12b-1 fees,
so there is never a fee for cashing in your investment (see Appendix A). If they
do not purchase Units tendered, the Trustee is authorized in its discretion to
sell Units in the over-the-counter market if it believes it will obtain a higher
net price for the redeeming investor.
You may request distribution in kind from the Trustee instead of cash
redemption, provided that you are tendering Units with a value of at least
$50,000. By the seventh calendar day after tender, an amount and value of
Securities per Unit, together with a pro rata portion of the cash balance in the
Fund, equal to the Redemption Price per Unit, will be paid over to the Trustee,
as distribution agent, and either held for your account or disposed of in
accordance with your instructions. Any brokerage commissions on sales of
Securities in connection with in-kind redemptions will be borne by you.
Redemptions may be suspended or payment postponed if the New York Stock
Exchange is closed other than for customary weekend and holiday closings, if the
SEC determines that trading on that Exchange is restricted or that an emergency
exists making disposal or evaluation of the Securities not reasonably
practicable, or for any other period permitted by the SEC.
INCOME, DISTRIBUTIONS AND REINVESTMENT
INCOME
Interest received is credited to an Income Account and other receipts to a
Capital Account. A Reserve Account may be created by withdrawing from the Income
and Capital Accounts amounts considered appropriate by the Trustee to reserve
for any material amount that may be payable out of the Fund.
DISTRIBUTIONS AND RETURNS
Each Unit receives an equal share of monthly distributions of interest
income net of estimated expenses. Interest on the Securities is generally
received by the Fund on a semi-annual or annual basis. Because interest on the
Securities is not received at a constant rate throughout the year, any Monthly
Income Distribution may be more or less than the interest actually received. To
eliminate fluctuations in the Monthly Income Distribution, the Trustee will
advance amounts necessary to provide approximately equal interest distributions;
it will be reimbursed, without interest, from interest received on the
Securities, but the Trustee is compensated, in part, by holding the Fund's cash
balances in non-interest bearing accounts. In approximately the next 11 years of
the Fund, all principal from maturing Securities (less an amount necessary to
satisfy the investors' deferred sales charge obligation) will be reinvested in
Extension Securities. Thereafter, as each Security in the Portfolio matures, the
balance in the Capital Account will be distributed on or about the second
business day following the maturity date to investors of record on the business
day immediately preceding the distribution day.
The estimated annual income per Unit, after deducting estimated annual Fund
expenses as stated in Part A of the Prospectus, will change as Securities
mature, are called or sold or otherwise disposed of, as replacement obligations
are deposited and as Fund expenses change. Because the Portfolio is not actively
managed, income distributions will generally not be affected by changes in
interest rates and the amount of income should be substantially maintained as
long as the Portfolio remains unchanged; however, optional redemptions of
Securities or other Portfolio changes may occur more frequently when interest
rates decline, which would result in early returns of principal and possibly
earlier termination of the Fund.
ESTIMATED YIELD TO NEXT EXTENSION DATE
Estimated Yield to Next Extension Date shows the net annual yield to
investors from the date of purchase of Units until the Next Extension Date
(i.e., the next date on which approximately 20% of the face value of the
Portfolio matures). Under accepted bond practice, bonds are customarily offered
to investors on a 'yield price'
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<PAGE>
basis, which involves computation of yield to maturity, and which takes into
account not only the interest payable on the bonds but also the amortization or
accretion to a specified date of any premium over or discount from the par
(maturity) value in the bond's purchase price. In calculating Estimated Yield to
Next Extension Date, the average yield for the Portfolio is derived by weighting
each Security's yield by the market value of the Security (but not by the time
remaining to maturity). Once the average Portfolio yield is computed, this
figure is then adjusted for estimated expenses and the effect of the applicable
sales charges paid by investors. The Estimated Yield to Next Extension Date
calculation does not take into account certain delays in distributions of income
and the timing of other receipts and distributions on Units and may, depending
on maturities, overstate or understate the impact of sales charges. All of these
factors may result in a lower figure.
Estimated Yield to Next Extension Date will vary with the purchase price of
the Units (including sales charges), changes in fund income and expenses and
changes in Portfolio composition (including dispositions and Extensions of
Securities) and the date of purchase of the Units and therefore can be
materially different than the figure set forth herein. In addition this figure,
may not be directly comparable to yield figures used to measure other
investments, and since it is based on certain assumptions and variables the
actual return received by an investor may be higher or lower.
REINVESTMENT
Income distributions on Units may be reinvested by participating in the
Fund's reinvestment plan. Under the plan, the Units acquired for investors will
be either Units already held in investory by the Sponsors or new Units created
by the Sponsors' deposit of additional Securities. Deposits or purchases of
additional Securities will generally be made so as to maintain the then existing
proportionate relationship among the number of shares of each Security in the
Fund. Units acquired by reinvestment will be subject to the applicable Public
Offering Price (less the initial sales charge). The Sponsors reserve the right
to amend, modify or terminate the reinvestment plan at any time without prior
notice. Investors holding Units in 'street name' should contact their broker,
dealer or financial institution if they wish to participate in the reinvestment
plan.
FUND EXPENSES
Estimated annual Fund expenses are listed in Part A of the Prospectus; if
actual expenses exceed the estimate, the excess will be borne by the Fund. The
Trustee's annual fee is payable in monthly installments. The Trustee also
benefits when it holds cash for the Fund in non-interest bearing accounts.
Possible additional charges include extraordinary services, costs of
indemnifying the Trustee and the Sponsors, costs of action taken to protect the
Fund and other legal fees and expenses, Fund termination expenses and any
governmental charges. The Trustee has a lien on Fund assets to secure
reimbursement of these amounts and may sell Securities for this purpose if cash
is not available. The Sponsors receive an annual fee of a maximum of $0.25 per
$1,000 face amount of underlying Securities to reimburse them for the cost of
providing Portfolio supervisory services to the Fund. While the fee may exceed
their costs of providing these services to the Fund, the total supervision fees
from all Series of Government Securities Income Fund will not exceed their costs
for these services to all of those Series during any calendar year. The Sponsors
may also be reimbursed for their costs of providing bookkeeping and
administrative services to the Fund, currently estimated at $0.10 per 1,000
Units. The Trustee's, Sponsors' and Evaluator's fees may be adjusted for
inflation without Investors' approval.
All of the expenses incurred in establishing the Fund, as well as
advertising and selling expenses, will be paid from the Underwriting Account at
no charge to the Fund. Sales charges on Defined Asset Funds range from under
1.0% to 5.5%. This may be less than you might pay to buy and hold a comparable
managed fund. Defined Asset Funds can be a cost-effective way to purchase and
hold investments. Annual operating expenses are generally lower than for managed
funds. Because Defined Asset Funds have no management fees, limited transaction
costs and no ongoing marketing expenses, operating expenses are generally less
than 0.25% a year. When compounded annually, small differences in expense ratios
can make a big difference in your investment results.
6
<PAGE>
TAXES
TAXATION OF THE FUND
The Fund intends to qualify for and elect the special tax treatment
applicable to 'regulated investment companies' under Sections 851-855 of the
Internal Revenue Code of 1986, as amended (the 'Code'). Qualification and
election as a 'regulated investment company' involves no supervision of
investment policy or management by any government agency. If the Fund qualifies
as a 'regulated investment company' and distributes to investors 90% or more of
its taxable income excluding its net capital gain (i.e. the excess of its net
long-term capital gain over its short-term capital loss), it will not be subject
to Federal income tax on the portion of its taxable income (including any net
capital gain) it distributes to investors in a timely manner. In addition, the
Fund will not be subject to the 4% excise tax on certain undistributed income of
'regulated investment companies' to the extent it distributes to investors in a
timely manner at least 98% of its taxable income (including any net capital
gain). It is anticipated that the Fund will not be subject to Federal income tax
or the excise tax, because the Indenture requires the distribution of the Fund's
taxable income (including any net capital gain) in a timely manner. Although all
or a portion of the Fund's taxable income (including any net capital gain) for a
calendar year may be distributed shortly after the end of the calendar year,
such a distribution will be treated for Federal income tax purposes as having
been received by investors during the calendar year.
DISTRIBUTIONS
Distributions of the Fund's net capital gain that are designated as capital
gain dividends by the Fund will be taxable to investors as long-term capital
gain, regardless of the time the Units have been held by an investor. However,
if the Fund were to terminate in less than one year, the Fund would not
distribute any capital gain dividends. Distributions to investors of the Fund's
interest income, gain that is treated as ordinary income under the market
discount rules, and any net short-term capital gain in any year will generally
be taxable as ordinary income to investors to the extent of the Fund's taxable
income (other than taxable income attributed to its net capital gain) for that
year. Distributions in excess of the Fund's taxable income will be treated as a
return of capital and will reduce the investor's basis in his Units and, to the
extent that such distributions exceed his basis, will be treated as a gain from
the sale of his Units as discussed below. It is anticipated that substantially
all of the distributions of the Fund's net capital gains will be designated as
capital gain dividends and that the Fund's interest income, ordinary gain and
any net short-term capital gain will be taxable as ordinary income to investors.
Distributions that are taxable as ordinary income to investors will constitute
dividends for Federal income tax purposes but will not be eligible for the
dividends-received deduction for corporations.
An investor, other than a dealer in securities, will generally recognize
capital gain or loss when the investor disposes of his Units (by sale,
redemption or otherwise). In the case of a distribution of Securities to an
investor upon redemption of his Units, gain or loss will generally be recognized
in an amount equal to the difference between the investor's tax basis in his
Units and the fair market value of the Securities received in redemption. Net
capital gain may be taxed at a lower rate than ordinary income for certain
individuals and other noncorporate taxpayers. Any such capital gain or loss is
long-term if the asset is held for more than one year and short-term if held for
one year or less. However, any capital loss on the sale or redemption of a Unit
that an investor has held for six months or less will be a long-term capital
loss to the extent of any capital gain dividends previously distributed to the
investor by the Fund. The deduction of capital losses is subject to limitations.
Sales of Securities by the Fund (to meet redemptions or otherwise) may give
rise to gain (including market discount) to the Fund. The amount of gain will be
based upon the cost of the Security to the Fund and will be without regard to
the value of the Security when a particular investor purchases his Units. Since
distributions of such gain do not generally reduce an investor's tax basis in
his Units, an investor may have a corresponding capital loss (or a reduced
amount of gain) on a subsequent sale or redemption of his Units.
The Federal tax status of each year's distributions will be reported to
investors and to the Internal Revenue Service. The foregoing discussion relates
only to the Federal income tax status of the Fund and to the tax treatment of
distributions by the Fund to U.S. investors. Investors who are not U.S. citizens
or residents should be aware that distributions from the Fund generally will be
subject to a withholding tax of 30%, or a lower treaty rate. Because interest
income of the type received by the fund would generally not be subject to
withholding if
7
<PAGE>
received directly by the foreign investor, an investment in the Fund is likely
to be appropriate for a foreign investor only when that foreign investor can
utilize a foreign tax credit or corresponding benefit in respect of such
withholding taxes. Foreign investors should consult their own tax advisers to
determine whether investment in the Fund is appropriate. Distributions may also
be subject to state and local taxation and investors should consult their own
tax advisers in this regard.
Investors will be taxed in the manner described above regardless of whether
distributions from the Fund are actually received by the investor or are
automatically reinvested (see Income, Distributions and Reinvestment--
Reinvestment above).
* * *
The Sponsors believe that investors who are individuals will not be subject
to any state or local personal income taxes on distributions of the Fund's
interest income. However, investors (including individuals) may be subject to
state or local taxes on distributions by the Fund of income other than interest
as well as capital gains from the sale or redemption of Units of a Fund. Other
state and local taxes (including corporate income or franchise taxes, personal
property or intangible taxes and estate or inheritance taxes) may also be
imposed on distributions of income by the Fund or capital gains from the sale or
redemption of Units of a Fund. In addition, individual investors (and any other
investors that are subject to state or local taxes on the interest income
distributed by the Fund) may not be entitled to a deduction for state and local
tax purposes for any interest on indebtedness incurred to purchase or carry
their Units or for their share of fees and expenses paid by the Fund. Therefore,
even though the Sponsors believe that interest income distributed by the Fund is
exempt from state and local personal income taxes in all states, investors
should consult their own tax advisers with respect to state taxation.
RETIREMENT PLANS
This Series of Government Securities Income Fund may be well suited for
purchase by Individual Retirement Accounts ('IRAs'), Keogh plans, pension funds
and other qualified retirement plans, certain of which are briefly described
below. Generally, capital gains and income received in each of the foregoing
plans are exempt from Federal taxation. All distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible for
special 5 or 10 year averaging or tax-deferred rollover treatment. Investors in
IRAs, Keogh plans and other tax-deferred retirement plans should consult their
plan custodian as to the appropriate disposition of distributions. Investors
considering participation in any of these plans should review specific tax laws
related thereto and should consult their attorneys or tax advisors with respect
to the establishment and maintenance of any of these plans. These plans are
offered by brokerage firms, including the Sponsor of this Fund, and other
financial institutions. Fees and charges with respect to such plans may vary.
Retirement Plans for the Self-Employed--Keogh Plans. Units of the Fund may
be purchased by retirement plans established for self-employed individuals,
partnerships or unincorporated companies ('Keogh plans'). The assets of a Keogh
plan must be held in a qualified trust or other arrangement which meets the
requirements of the Code. Keogh plan participants may also establish separate
IRAs (see below) to which they may contribute up to an additional $2,000 per
year ($4,000 in a spousal account).
Individual Retirement Account--IRA. Any individual can make use of a
qualified IRA arrangement for the purchase of Units of the Fund. Any individual
(including one covered by an employer retirement plan) can make a contribution
in an IRA equal to the lesser of $2,000 ($4,000 in a spousal account) or 100% of
earned income; such investment must be made in cash. However, the deductible
amount an individual covered by an employer retirement plan may contribute will
be reduced if the individual's adjusted gross income exceeds $25,000 (in the
case of a single individual), $40,000 (in the case of married individuals filing
a joint return) or $200 (in the case of a married individual filling a separate
return). Certain transactions which are prohibited under Section 408 of the Code
will cause all or a portion of the amount in an IRA to be deemed to be
distributed and subject to tax at that time. Unless nondeductible contributions
were made in 1987 or a later year, all distributions from an IRA will be treated
as ordinary income but generally are eligible for tax-deferred rollover
treatment. Taxable distributions made before attainment of age 59 1/2, except in
the case of the participant's death or disability or where the amount
distributed is part of a series of substantially equal periodic (at least
annual) payments that are to be made over the life expectancies of the
participant and his or her beneficiary, are generally subject to a surtax in an
amount equal to 10% of the distribution.
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<PAGE>
Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing
plan for employees of a corporation may purchase Units of the Fund.
RECORDS AND REPORTS
The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Fund,
including a current list of the Securities and a copy of the Indenture, and
supplemental information on the operations of the Fund and the risks associated
with the Securities held by the Fund, which may be inspected by investors at
reasonable times during business hours.
With each distribution, the Trustee includes a statement of the interest
and any other receipts being distributed. Within five days after deposit of
Securities in exchange or substitution for Securities (or contracts) previously
deposited, the Trustee will send a notice to each investor, identifying both the
Securities removed and the replacement Securities deposited. The Trustee sends
each investor of record an annual report summarizing transactions in the Fund's
accounts and amounts distributed during the year and Securities held, the number
of Units outstanding and the Redemption Price at year end, the interest received
by the Fund on the Securities, the cash proceeds received by the Fund from the
disposition of any Security (resulting from redemption or payment at maturity or
sale of any Security), and the fees and expenses paid by the Fund, among other
matters. The Trustee will also furnish annual information returns to each
investor. Investors may obtain copies of Security evaluations from the Trustee
to enable them to comply with federal and state tax reporting requirements. Fund
accounts are audited annually by independent accountants selected by the
Sponsors. Audited financial statements are available from the Trustee on
request.
TRUST INDENTURE
The Fund is a 'unit investment trust' created under New York law by a Trust
Indenture among the Sponsors, the Trustee and the Evaluator. This Prospectus
summarizes various provisions of the Indenture, but each statement is qualified
in its entirety by reference to the Indenture.
The Indenture may be amended by the Sponsors and the Trustee without
consent by investors to cure ambiguities or to correct or supplement any
defective or inconsistent provision, to make any amendment required by the SEC
or other governmental agency or to make any other change not materially adverse
to the interest of investors (as determined in good faith by the Sponsors). The
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor in the Fund
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified on the substance of any amendment.
The Trustee may resign upon notice to the Sponsors. It may be removed by
investors holding 51% of the Units at any time or by the Sponsors without the
consent of investors if it becomes incapable of acting or bankrupt, its affairs
are taken over by public authorities, or if under certain conditions the
Sponsors determine in good faith that its replacement is in the best interest of
the investors. The Evaluator may resign or be removed by the Sponsors and the
Trustee without the investors' consent. The resignation or removal of either
becomes effective upon acceptance of appointment by a successor; in this case,
the Sponsors will use their best efforts to appoint a successor promptly;
however, if upon resignation no successor has accepted appointment within 30
days after notification, the resigning Trustee or Evaluator may apply to a court
of competent jurisdiction to appoint a successor.
Any Sponsor may resign so long as one Sponsor with a net worth of
$2,000,000 remains and is agreeable to the resignation. A new Sponsor may be
appointed by the remaining Sponsors and the Trustee to assume the duties of the
resigning Sponsor. If there is only one Sponsor and it fails to perform its
duties or becomes incapable of acting or bankrupt or its affairs are taken over
by public authorities, the Trustee may appoint a successor Sponsor at reasonable
rates of compensation, terminate the Indenture and liquidate the Fund or
continue to act as Trustee without a Sponsor. Merrill Lynch, Pierce, Fenner &
Smith Incorporated has been appointed as Agent for the Sponsors by the other
Sponsors.
The Sponsors, the Trustee and the Evaluator are not liable to investors or
any other party for any act or omission in the conduct of their responsibilities
absent bad faith, willful misfeasance, negligence (gross negligence in the case
of a Sponsor or the Evaluator) or reckless disregard of duty. The Indenture
contains customary provisions limiting the liability of the Trustee.
9
<PAGE>
MISCELLANEOUS
LEGAL OPINION
The legality of the Units has been passed upon by Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017, as special counsel for the
Sponsors.
AUDITORS
The Statement of Condition in Part A of the Prospectus was audited by
Deloitte & Touche LLP, independent accountants, as stated in their opinion. It
is included in reliance upon that opinion given on the authority of that firm as
experts in accounting and auditing.
TRUSTEE
The Trustee and its address are stated on the back cover of the Prospectus.
The Trustee is subject to supervision by the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System and New York
State banking authorities.
SPONSORS
The Sponsors are listed on the back cover of the Prospectus. They may
include Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly-owned
subsidiary of Merrill Lynch Co. Inc.; Smith Barney Inc., an indirect
wholly-owned subsidiary of The Travelers Inc.; Prudential Securities
Incorporated, an indirect wholly-owned subsidiary of the Prudential Insurance
Company of America; Dean Witter Reynolds, Inc., a principal operating subsidiary
of Morgan Stanley, Dean Witter, Discover & Co. and PaineWebber Incorporated, a
wholly-owned subsidiary of PaineWebber Group Inc. Each Sponsor, or one of its
predecessor corporations, has acted as Sponsor of a number of series of unit
investment trusts. Each Sponsor has acted as principal underwriter and managing
underwriter of other investment companies. The Sponsors, in addition to
participating as members of various selling groups or as agents of other
investment companies, execute orders on behalf of investment companies for the
purchase and sale of securities of these companies and sell securities to these
companies in their capacities as brokers or dealers in securities.
PUBLIC DISTRIBUTION
In the initial offering period Units will be distributed to the public
through the Underwriting Account and dealers who are members of the National
Association of Securities Dealers, Inc. The Sponsors intend to continue to
qualify Units for sale in all states in which qualification is deemed necessary
through the Underwriting Account and by dealers who are members of the National
Association of Securities Dealers, Inc. The Sponsors do not intend to qualify
Units for sale in any foreign countries and this Prospectus does not constitute
an offer to sell Units in any country where Units cannot lawfully be sold. Sales
to dealers and to introducing dealers, if any, will initially be made at prices
which represent a concession from the Public Offering Price, but the Agent for
the Sponsors reserves the right to change the rate of any concession from time
to time. Any dealer or introducing dealer may reallow a concession up to the
concession to dealers.
UNDERWRITERS' AND SPONSORS' PROFITS
Upon sale of the Units, the Underwriters will be entitled to receive sales
charges; each Underwriter's interest in the Underwriting Account will depend
upon the number of Units acquired through the issuance of additional Units. The
Sponsors also realize a profit or loss on deposit of the Securities equal to the
difference between the cost of the Securities to the Fund (based on the offer
side evaluation on the initial date of deposit) and the Sponsors' cost of the
Securities. During the initial offering period, the Underwriting Account also
may realize profits or sustain losses as a result of fluctuations after the
initial date of deposit in the Public Offering Price of the Units. In
maintaining a secondary market for Units, the Sponsors will also realize profits
or sustain losses in the amount of any difference between the prices at which
they buy Units and the prices at which they resell these Units (which include
the sales charge) or the prices at which they redeem the Units. Cash, if any,
made available by buyers of Units to the Sponsors prior to a settlement date for
the purchase of Units may be used in the Sponsors' businesses to the extent
permitted by Rule 15c3-3 under the Securities Exchange Act of 1934 and may be of
benefit to the Sponsors.
10
<PAGE>
FUND PERFORMANCE
Information on the performance of the Fund for various periods, on the
basis of changes in Unit price plus the amount of income and principal
distributions reinvested, may be included from time to time in advertisements,
sales literature, reports and other information furnished to current or
prospective investors. Total return figures are not averaged, and may not
reflect deduction of the sales charge, which would decrease the return. Average
annualized return figures reflect deduction of the maximum sales charge. No
provision is made for any income taxes payable.
Past performance may not be indicative of future results. The Fund is not
actively managed. Unit price and return fluctuate with the value of the
Securities in the Portfolio, so there may be a gain or loss when Units are sold.
Fund performance may be compared to performance data from publications such
as Donoghue's Money Fund Report, Lehman Brothers Intermediate Treasury Bond
Index, Lipper Analytical Services, Inc., Morningstar Publications, Inc., Money
Magazine, The New York Times, U.S. News and World Report, Barron's, Business
Week, CDA Investment Technology, Inc., Forbes Magazine or Fortune Magazine. As
with other performance data, performance comparisons should not be considered
representative of the Fund's relative performance for any future period.
DEFINED ASSET FUNDS
For decades informed investors have purchased unit investment trusts for
dependability and professional selection of investments. Defined Asset Funds'
philosophy is to allow investors to 'buy with knowledge' (because, unlike
managed funds, the portfolio of bonds and the return are relatively fixed) and
'hold with confidence' (because the portfolio is professionally selected and
regularly reviewed). Defined Asset Funds offers an array of simple and
convenient investment choices, suited to fit a wide variety of personal
financial goals--a buy and hold strategy for capital accumulation, such as for
children's education or retirement, or attractive, regular current income
consistent with the preservation of principal. Unit investment trusts are
particularly suited for the many investors who prefer to seek long-term income
by purchasing sound investments and holding them, rather than through active
trading. Few individuals have the knowledge, resources or capital to buy and
hold a diversified portfolio on their own; it would generally take a
considerable sum of money to obtain the breadth and diversity that Defined Asset
Funds offer. One's investment objectives may call for a combination of Defined
Asset Funds.
One of the most important investment decisions you face may be how to
allocate your investments among asset classes. Diversification among different
kinds of investments can balance the risks and rewards of each one. Most
investment experts recommend stocks for long-term capital growth. Long-term
corporate bonds offer relatively high rates of interest income. By purchasing
both defined equity and defined bond funds, investors can receive attractive
current income, as well as growth potential, offering some protection against
inflation. From time to time various advertisements, sales literature, reports
and other information furnished to current or prospective investors may present
the average annual compounded rate of return of selected asset classes over
various periods of time, compared to the rate of inflation over the same
periods.
SUPPLEMENTAL INFORMATION
Upon writing or calling the Trustee shown on the back cover of this
Prospectus, investors will receive at no cost to the investor supplemental
information about the Fund, which has been filed with the SEC. The supplemental
information includes more detailed risk factor disclosure about the types of
Securities that may be part of the Fund's Portfolio and general information
about the structure and operation of the Fund.
11
<PAGE>
APPENDIX A
INITIAL OFFERING SALES CHARGE SCHEDULE
<TABLE>
<CAPTION>
SALES CHARGE
(GROSS UNDERWRITING PROFIT)
----------------------------------
AS A PERCENT OF AS PERCENT OF DEALER CONCESSION AS PRIMARY MARKET
OFFER SIDE PUBLIC NET AMOUNT PERCENT OF PUBLIC CONCESSION TO
AMOUNT INVESTED OFFERING PRICE INVESTED OFFERING PRICE INTRODUCING DEALERS
- ------------------------------------------------- ------------------- ------------- --------------------- -------------------
<S> <C> <C> <C> <C>
Less than $1,000,000............................. 1.25% 1.266% 0.813% $ 9.00
$1,000,000 to $4,999,999......................... 1.00 1.010 0.650 7.20
$5,000,000 or more............................... .75 .756 0.490 5.40
<CAPTION>
SECONDARY MARKET SALES CHARGE SCHEDULE
SALES CHARGE
(GROSS UNDERWRITING PROFIT)
--------------------------------------
AS A PERCENT OF AS PERCENT OF DEALER CONCESSION AS
OFFER SIDE PUBLIC NET AMOUNT PERCENT OF PUBLIC
NUMBER OF UNITS OFFERING PRICE INVESTED OFFERING PRICE
- ------------------------------------------------------------------ ------------------- ----------------- --------------------
<S> <C> <C> <C>
Less than 1,000,000............................................... 1.50% 1.523% 0.975%
1,000,000 to 4,999,999............................................ 1.00 1.010 0.650
5,000,000 or more................................................. .75 .756 0.490
</TABLE>
a-1
<PAGE>
Def ined
Asset FundsSM
SPONSORS: GOVERNMENT SECURITIES
Merrill Lynch, INCOME FUND
Pierce, Fenner & Smith Incorporated U.S. Treasury Strategy TrustSM--1
Defined Asset Funds (A Unit Investment Trust)
P.O. Box 9051 This Prospectus does not contain all of
Princeton, NJ 08543-9051 the information with respect to the
(609) 282-8500 investment company set forth in its
Smith Barney Inc. registration statement and exhibits
Unit Trust Department relating thereto which have been filed
388 Greenwich Street--23rd Floor with the Securities and Exchange
New York, NY 10013 Commission, Washington, D.C. under the
212 (816) 4000 Securities Act of 1933 and the
PaineWebber Incorporated Investment Company Act of 1940, and to
1200 Harbor Boulevard which reference is hereby made. Copies
Weehawken, NJ 07087 of filed material can be obtained from
(201) 902-3000 the Public Reference Section of the
Prudential Securities Incorporated Commission, 450 Fifth Street, N.W.,
One New York Plaza Washington, D.C. 20549 at prescribed
New York, NY 10292 rates. The Commission also maintains a
(212) 778-6164 Web site that contains information
Dean Witter Reynolds Inc. statements and other information
Two World Trade Center--59th Floor regarding registrants such as Defined
New York, NY 10048 Asset Funds that file electronically
(212) 392-2222 with the Commission at
EVALUATOR: http://www.sec.gov.
Kenny S&P Evaluation Services, ------------------------------
a division of J. J. Kenny Co., Inc. No person is authorized to give any
65 Broadway information or to make any
New York, NY 10006 representations with respect to this
TRUSTEE: investment company not contained in its
The Chase Manhattan Bank registration statement and exhibits
Customer Service Retail Department related thereto; and any information or
Bowling Green Station representation not contained therein
P.O. Box 5187 must not be relied upon as having been
New York, NY 10274-5187 authorized.
1-800-323-1508 ------------------------------
When Units of this Fund are no longer
available this Prospectus may be used as
a preliminary prospectus for a future
series, and investors should note the
following:
Information contained herein is subject
to amendment. A registration statement
relating to securities of a future
series has been filed with the
Securities and Exchange Commission.
These securities may not be sold nor may
offers to buy be accepted prior to the
time the registration statement becomes
effective.
This Prospectus shall not constitute an
offer to sell or the solicitation of an
offer to buy nor shall there be any sale
of these securities in any State in
which such offer solicitation or sale
would be unlawful prior to registration
or qualification under the securities
laws of any such State.
14993--8/97
<PAGE>
GOVERNMENT SECURITIES INCOME FUND
DEFINED ASSET FUNDS
CONTENTS OF REGISTRATION STATEMENT
This Post-Effective Amendment to the Registration Statement on Form S-6
comprises the following papers and documents:
The facing sheet of Form S-6.
The cross-reference sheet (incorporated by reference to the Registration
Statement on Form S-6 of Defined Asset Funds Municipal Insured Series, 1933 Act
File No. 33-54565).
The Prospectus.
The Signatures.
The following exhibits:
1.1.1--Form of Standard Terms and Conditions of Trust Effective as of
October 21, 1993 (incorporated by reference to Exhibit 1.1.1 to the
Registration Statement of Municipal Investment Trust Fund, Multistate
Series--48, 1933 Act File No. 33-50247).
4.1 --Consent of the Evaluator.
5.1 --Consent of independent accountants.
9.1 --Information Supplement (incorporated by reference to Exhibit 9.1
to Post-Effective Amendment No. 1 to the Registration Statement
of Government Securities Income Fund Freddie Mac Series--12, 1933
Act File No. 33-56849).
R-1
<PAGE>
GOVERNMENT SECURITIES INCOME FUND
U.S. TREASURY STRATEGY TRUST--1
DEFINED ASSET FUNDS
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
GOVERNMENT SECURITIES INCOME FUND, U.S. TREASURY STRATEGY TRUST--1 DEFINED ASSET
FUNDS (A UNIT INVESTMENT TRUST), CERTIFIES THAT IT MEETS ALL OF THE REQUIREMENTS
FOR EFFECTIVENESS OF THIS REGISTRATION STATEMENT PURSUANT TO RULE 485(B) UNDER
THE SECURITIES ACT OF 1933 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT OR
AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW
YORK ON THE 31ST DAY OF JULY, 1997.
SIGNATURES APPEAR ON PAGES R-3, R-4, R-5, R-6 AND R-7.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Smith Barney Inc.
has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Prudential
Securities Incorporated has signed this Registration Statement or Amendment to
the Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.
A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Merrill Lynch, Pierce, have been filed
Fenner & Smith Incorporated: under
Form SE and the
following 1933 Act
File
Number: 33-43466
and 33-51607
HERBERT M. ALLISON, JR.
BARRY S. FREIDBERG
EDWARD L. GOLDBERG
STEPHEN L. HAMMERMAN
JEROME P. KENNEY
DAVID H. KOMANSKY
DANIEL T. NAPOLI
THOMAS H. PATRICK
JOHN L. STEFFENS
DANIEL P. TULLY
ROGER M. VASEY
ARTHUR H. ZEIKEL
By
ERNEST V. FABIO
(As authorized signatory for Merrill Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
<PAGE>
PRUDENTIAL SECURITIES INCORPORATED
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Prudential Securities have been filed
Incorporated: under Form SE and
the following 1933
Act File Number:
33-41631
JAMES T. GAHAN
ALAN D. HOGAN
LELAND B. PATON
HARDWICK SIMMONS
By
WILLIAM W. HUESTIS
(As authorized signatory for Prudential Securities
Incorporated and Attorney-in-fact for the persons
listed above)
R-4
<PAGE>
SMITH BARNEY INC.
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Smith Barney Inc.: have been filed
under the 1933 Act
File Number:
33-49753 and
33-51607
STEVEN D. BLACK
JAMES BOSHART III
ROBERT A. CASE
JAMES DIMON
ROBERT DRUSKIN
ROBERT F. GREENHILL
JEFFREY LANE
JACK L. RIVKIN
By GINA LEMON
(As authorized signatory for
Smith Barney Inc. and
Attorney-in-fact for the persons listed above)
R-5
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following 1933
the Board of Directors of Dean Witter Act File Number: 33-17085
Reynolds Inc.:
NANCY DONOVAN
CHARLES A. FIUMEFREDDO
JAMES F. HIGGINS
STEPHEN R. MILLER
PHILIP J. PURCELL
THOMAS C. SCHNEIDER
WILLIAM B. SMITH
By
MICHAEL D. BROWNE
(As authorized signatory for
Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)
R-6
<PAGE>
PAINEWEBBER INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Executive Committee of the Board the following 1933 Act File
of Directors of PaineWebber Number: 33-55073
Incorporated:
LEE FENSTERSTOCK
JOSEPH J. GRANO, JR.
By
ROBERT E. HOLLEY
(As authorized signatory for
PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-7
EXHIBIT 4.1
STANDARD & POOR'S
A DIVISION OF THE MCGRAW-HILL COMPANIES
J. J. KENNY
A DIVISION OF J. J. KENNY CO., INC.
65 BROADWAY
NEW YORK, N.Y. 10006-2551
TELEPHONE (212) 770-4422
FAX 212/797-8681
July 31, 1997
Frank A. Ciccotto
Vice President
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Defined Asset Funds
P.O. Box 9051
Princeton, New Jersey 08543-9051
The Chase Manhattan Bank, N.A.
4 New York Plaza, 6th Floor
New York, New York 10004
RE: GOVERNMENT SECURITIES INCOME FUND,
U.S. TREASURY STRATEGY TRUST--1, DEFINED ASSET FUNDS
Gentlemen:
We have examined the Registration Statement File No. 33-48915 for the
above-captioned fund. 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 Registration Statement 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
Vice President
Exhibit 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee
of Government Securities Income Fund, U.S. Treasury Strategy Trust--1, Defined
Asset Funds
We consent to the use in Post-Effective Amendment No. 4 to Registration
Statement No. 33-48915 of our opinion dated July 24, 1997 appearing in the
Prospectus, which is part of such Registration Statement, and to the reference
to us under the heading 'Auditors' in such Prospectus.
DELOITTE & TOUCHE LLP
New York, N.Y.
July 31, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1
<S>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> APR-30-1997
<INVESTMENTS-AT-COST> 104,641,165
<INVESTMENTS-AT-VALUE> 104,857,586
<RECEIVABLES> 1,007,473
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 105,865,059
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (627,199)
<TOTAL-LIABILITIES> (627,199)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 104,649,956
<SHARES-COMMON-STOCK> 106,020,611
<SHARES-COMMON-PRIOR> 85,687,953
<ACCUMULATED-NII-CURRENT> 371,483
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 216,421
<NET-ASSETS> 105,237,860
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5,818,631
<OTHER-INCOME> 0
<EXPENSES-NET> (124,156)
<NET-INVESTMENT-INCOME> 5,694,475
<REALIZED-GAINS-CURRENT> 208,200
<APPREC-INCREASE-CURRENT> (379,893)
<NET-CHANGE-FROM-OPS> 5,522,782
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,639,744)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (123,807)
<NUMBER-OF-SHARES-SOLD> 20,332,658
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 19,652,490
<ACCUMULATED-NII-PRIOR> 271,007
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
July 31, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We hereby represent that the Post-Effective Amendments to the registered
unit investment trusts described in Exhibit A attached hereto do not contain
disclosures which would render them ineligible to become effective pursuant to
Rule 485(b) under the Securities Act of 1933.
Very truly yours,
Davis Polk & Wardwell
Attachment
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
1933 ACT 1940 ACT
FUND NAME CIK FILE NO. FILE NO.
- --------- --- -------- --------
<S> <C> <C> <C>
DEFINED ASSET FUNDS- USTST-1 DAF 890652 33-48915 811-2810
TOTAL: 1 FUNDS
</TABLE>
