AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 29, 1997
REGISTRATION NO. 333-10807
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
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
GNMA SERIES--2A
DEFINED ASSET FUNDS
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INC.
SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE, SMITH BARNEY INC. PAINEWEBBER INCORPORATED
FENNER & 388 GREENWICH 1285 AVENUE OF THE
SMITH INCORPORATED STREET--23RD FLOOR AMERICAS
UNIT INVESTMENT TRUST NEW YORK, NY 10013 NEW YORK, NY 10019
DIVISION
P.O. BOX 9051
PRINCETON, NJ 08543-9051
PRUDENTIAL SECURITIES
INCORPORATED
ONE NEW YORK PLAZA
NEW YORK, NY 10292
DEAN WITTER REYNOLDS INC.
TWO WORLD TRADE
CENTER--59TH FLOOR
NEW YORK, NY 10048
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
TERESA KONCICK, ESQ. LAURIE A. HESSLEIN ROBERT E. HOLLEY
P.O. BOX 9051 388 GREENWICH STREET 1200 HARBOR BLVD.
PRINCETON, NJ 08543-9051 NEW YORK, NY 10013 WEEHAWKEN, NJ 07087
COPIES TO:
PIERRE DE SAINT PHALLE, DOUGLAS LOWE, ESQ.
LEE B. SPENCER, JR. ESQ. 130 LIBERTY STREET--29TH
ONE NEW YORK PLAZA 450 LEXINGTON AVENUE FLOOR
NEW YORK, NY 10292 NEW YORK, NY 10017 NEW YORK, NY 10006
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Beneficial Interest pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended.
F. PROPOSED MAXIMUM OFFERING PRICE TO THE PUBLIC OF THE SECURITIES BEING
REGISTERED: Indefinite
G. AMOUNT OF FILING FEE: Not applicable
H. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of the Registration Statement.
/ x / Check box if it is proposed that this filing will become effective upon
filing on August 29, 1997, pursuant to Rule 487.
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<PAGE>
DEFINED ASSET FUNDSSM
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GOVERNMENT 6.60% ESTIMATED CURRENT RETURN shows the estimated
SECURITIES annual cash to be received from interest-bearing
INCOME FUND securities in the Portfolio (net of estimated
GNMA SERIES--2A annual expenses) divided by the Public Offering
(A UNIT INVESTMENT TRUST) Price (including the maximum sales charge).
- ------------------------------6.46% ESTIMATED LONG TERM RETURN is a measure of
/ / MONTHLY INCOME the estimated return over the estimated life of
6.60% the Fund (about 10 years). This represents an
ESTIMATED CURRENT RETURN average of the yields to maturity (or in certain
6.46% cases, to an earlier call date) of the individual
ESTIMATED LONG TERM RETURN securities in the Portfolio, adjusted to reflect
AS OF AUGUST 28, 1997 the maximum sales charge and estimated expenses.
The average yield for the Portfolio is derived by
weighting each security's yield by its market
value and the time remaining to the call or
maturity date, depending on how the security is
priced. Unlike Estimated Current Return, Estimated
Long Term Return takes into account maturities,
discounts and premiums of the underlying bonds.
No return estimate can be predictive of your
actual return because returns will vary with
purchase price (including sales charges), how long
units are held, changes in Portfolio composition,
changes in interest income and changes in fees and
expenses. Therefore, Estimated Current Return and
Estimated Long Term Return are designed to be
comparative rather than predictive. A yield
calculation which is more comparable to an
individual security may be higher or lower than
Estimated Current Return or Estimated Long Term
Return which are more comparable to return
calculations used by other investment products.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
SPONSORS: HAS THE COMMISSION OR ANY STATE SECURITIES
Merrill Lynch, COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
Pierce, Fenner & Smith OF THIS DOCUMENT. ANY REPRESENTATION TO THE
Incorporated CONTRARY IS A CRIMINAL OFFENSE.
Smith Barney Inc. Inquiries should be directed to the Trustee at
Prudential Securities 1-800-221-7771.
Incorporated Prospectus dated August 29, 1997.
Dean Witter Reynolds Inc. INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
PaineWebber Incorporated AND RETAIN IT FOR FUTURE REFERENCE.
<PAGE>
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Defined 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 bond portfolios
o Corporate bond portfolios
o Government bond portfolios
o Equity portfolios
o International equity and bond 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 GNMA Series
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Our defined portfolio of mortgage-backed GNMA Securities offers you a simple and
convenient way to participate in the GNMA market and obtain monthly income while
earning an attractive return as well as the assurance of an investment in
securities that are guaranteed by GNMA, a federal agency.
INVESTMENT OBJECTIVES
To obtain safety of capital and current monthly income distributions through
investment in a portfolio of interest-bearing GNMA securities. The full faith
and credit of the United States is pledged to the payment of the Securities but
the units of the Fund, as such, are not directly backed.
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Defining Your Portfolio
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PROFESSIONAL SELECTION AND SUPERVISION
The Portfolio of Securities is selected by experienced buyers. The Fund is not
actively managed; however, it is regularly reviewed and a Security can be sold
if retaining it is considered detrimental to investors' interests.
PORTFOLIO COMPOSITION
The Portfolio consists of two different issues of mortgage-backed Securities of
the modified pass-through type guaranteed by the Government National Mortgage
Association (GNMA): 6% Ginnie Maes maturing 8/15/14 to 9/15/27, 40%; 7.5% Ginnie
Maes maturing 8/15/14 to 9/15/27, 60%. All of the Ginnie Maes in the Fund are
backed by pools of long term mortgages on 1-to 4-family dwellings. The Ginnie
Maes are fully guaranteed as to payment of principal and interest by GNMA.
TAX INFORMATION
Distributions of ordinary income or capital gain from the Fund will be included
in a U.S. investor's gross income, but will not be eligible for the dividends-
received deduction for corporations. Under the recently enacted Taxpayer Relief
Act of 1997, investors who are individuals and have held their units for more
than 18 months may be entitled to a 20% maximum federal tax rate for gains from
the sale of these units. It is not clear at the time of printing this prospectus
whether or how the new 20% rate will apply to distributions from the Fund.
The Fund is not likely to be suitable for foreign investors (including
nonresident alien individuals and foreign corporations) not engaged in U.S.
trade or business, because distributions to foreign investors (if not designated
as capital gain dividends) will generally be subject to 30% U.S. withholding tax
(or a lower applicable treaty rate), whereas interest income of the type
received by the Fund would generally not have been subject to withholding if it
had been received directly by foreign investors. Under certain circumstances,
withholding agents will file with the Internal Revenue Service foreign person
information returns. (See Taxes in Part B.)
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Defining Your Investment
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PUBLIC OFFERING PRICE PER 1,000 UNITS $1,026.69
The Public Offering Price as of August 28, 1997, the business day prior to the
Initial Date of Deposit, is based on the aggregate offer side value of the
underlying Securities in the Fund ($492,812.00), plus a maximum sales charge of
4.167% of the value of the Securities, divided by the number of units (500,000)
times 1,000. The Public Offering Price on any subsequent date will vary. An
amount equal to principal cash, if any, as well as net accrued but undistributed
interest on the unit is added to the Public Offering Price. The underlying
Securities are evaluated by an independent evaluator at 3:30 p.m. Eastern time.
A-2
<PAGE>
LOW MINIMUM INVESTMENT
You can get started with a minimum purchase of $250. There is no minimum
purchase for payroll deduction plans.
REINVESTMENT OPTION
You can elect to automatically reinvest your distributions into a separate
portfolio of mortgage-backed securities. Reinvesting helps to compound your
income.
TERMINATION DATE
The Fund will generally terminate no later than one year following the maturity
date of the last maturing Security listed in the Portfolio. The Fund may be
terminated earlier if the value is less than 40% of the face amount of
Securities deposited.
SPONSORS' PROFIT OR LOSS
The Sponsors' profit or loss associated with the Fund will include the receipt
of applicable sales charges, fluctuations in the Public Offering Price or
secondary market price of units, a gain of $1,530.75 on the initial deposit of
the Securities and a gain or loss on subsequent deposits of additional
Securities (see Underwriters' and Sponsors' Profits in Part B).
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Defining Your Risks
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RISK FACTORS
U.S. Government securities are not affected by credit risk but are subject to
changes in market value resulting from changes in interest rates. Unit price
fluctuates and the value of units will decline if interest rates increase. The
mortgages underlying the GNMA Securities are amortized, and there is no
prepayment protection. The potential for appreciation that might otherwise
result from a decline in interest rates would be limited by any increase in
prepayments by mortgagors as interest rates decline. Investors may also receive
payments of principal sooner than anticipated, and interest payments will
decrease as principal is returned. Because regular payments of principal will be
received over the life of the Fund and because of the possible maturity, sale or
other disposition of Securities, the size, composition and return of the
Portfolio may change at any time. Because of the sales charges, returns of
principal and fluctuations in unit price, among other reasons, the sale price
will generally be less than the cost of your units. There is no guarantee that
the Fund will achieve its investment objective.
The Fund itself is not backed by the full faith and credit of the U.S.
Government (see Risk Factors in Part B).
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Defining Your Costs
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SALES CHARGES
Although the Fund 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 % As a %
of Initial Offer- of Secondary
ing Market
Period Public Public Offering
Offering Price Price
----------------- -----------------
Maximum Sales Charges 4.00% 4.25%
The Fund (and therefore the investors) will bear all or a portion of its
organizational costs--including costs of preparing the registration statement,
the trust indenture and other closing documents, registering units with the SEC
and the states and the initial audit of the Portfolio--as is common for mutual
funds.
ESTIMATED ANNUAL FUND OPERATING EXPENSES
As a %
of Average Per 1,000
Net Assets* Units
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Trustee's Fee .086% $ 0.84
Portfolio Supervision,
Bookkeeping and Administrative
Fees .026% $ 0.25
Organizational Expenses .020% $ 0.20
Evaluator's Fee .001% $ 0.01
Other Operating Expenses .013% $ 0.13
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TOTAL .146% $ 1.43
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* Based on the mean of the bid and offer side evaluations.
A-3
<PAGE>
COSTS OVER TIME
You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on the investment throughout the indicated periods:
1 Year 3 Years 5 Years 10 Years
$41 $44 $48 $58
The example assumes reinvestment of all distributions into additional units of
the Fund (a reinvestment option not offered by this Fund) and uses a 5% annual
rate of return as mandated by Securities and Exchange Commission regulations
applicable to mutual funds. The Costs Over Time above reflect both sales charges
and operating expenses on an increasing investment (because the net annual
return is reinvested). The example should not be considered a representation of
past or future expenses or annual rate of return; the actual expenses and annual
rate of return may be more or less than the example.
REDEEMING OR SELLING YOUR INVESTMENT
You may redeem or sell your units at any time. Your price is based on the Fund's
then current net asset value (based on the offer bid side evaluation of the
Securities during the initial public offering period and on the lower, bid side
evaluation thereafter, as determined by an independent evaluator), plus
principal cash, if any, as well as accrued interest. The bid side redemption and
secondary market repurchase price per 1,000 units as of August 28, 1997 was
$982.51 ($44.18 less than the Public Offering Price). There is no fee for
redeeming or selling your units.
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Defining Your Income
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MONTHLY INTEREST INCOME
The Fund pays monthly income.
WHAT YOU MAY EXPECT
(PAYABLE ON THE 23RD DAY OF THE MONTH TO HOLDERS OF RECORD ON THE 17TH DAY OF
THE MONTH):
Regular Monthly Income per 1,000 units
(Beginning on September 23, 1997): $ 5.64
Annual Income per 1,000 units: $ 67.77
A-4
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Defined GNMA Portfolio
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Government Securities Income Fund
GNMA Series--2A August 29, 1997
<TABLE>
<CAPTION>
FACE RANGE OF STATED
PORTFOLIO NO. AND TITLE AMOUNT COUPON MATURITIES(1) COST TO FUND(2)
- ------------------------------------------------------ --------- -------- ------------------- ----------------
<S> <C> <C> <C> <C> <C>
1. Government National Mortgage
Association, Modified
Pass-Through Mortgage-Backed Se-
curities $ 200,000 6.000% 8/15/14 to 9/15/27 $ 188,876.00
2. Government National Mortgage
Association, Modified
Pass-Through Mortgage-Backed Se-
curities 300,000 7.500 8/15/14 to 9/15/27 303,936.00
-------------- ----------------
$ 500,000 $ 492,812.00
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-------------- ----------------
</TABLE>
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(1) The face amount of securities listed as having the range of maturities
shown is an aggregate of individual Securities having varying ranges of
maturities within that shown. They are listed as one category of Securities with
a single range of maturities because of current market conditions that accord no
difference in price among the Securities grouped together on the basis of the
difference in their maturity ranges. At some time in the future, however, the
difference in maturity ranges could affect the market value of the individual
Securities. In addition to the information as to the GNMA modified pass-through
mortgage-backed Securities set forth above, the Trustee will furnish investors a
statement listing the name of issuer, pool number, interest rate, maturity date
and above amount for each Security in the Portfolio upon written request.
(2) Evaluation of the Securities by the Evaluator is made on the basis of
current offer side evaluation. On this basis, 60% of the Securities were
deposited at a premium and 40% at a discount from par. On the business day prior
to the Initial Date of Deposit, the bid side evaluation was 0.32% lower than the
offer side evaluation.
A-5
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders of Government Securities Income Fund, GNMA
Series--2A, Defined Asset Funds (the 'Fund'):
We have audited the accompanying statement of condition and the related
portfolio included in the prospectus of the Fund as of August 29, 1997. This
financial statement is the responsibility of the Trustee. Our responsibility is
to express an opinion on this financial statement based on our audit.
We conducted our audit 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 statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of an irrevocable letter of credit deposited for the purchase of
securities, as described in the statement of condition, with the Trustee. An
audit also includes assessing the accounting principles used and significant
estimates made by the Trustee, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of the Fund as of August 29, 1997
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
NEW YORK, N.Y.
AUGUST 29, 1997
STATEMENT OF CONDITION AS OF AUGUST 29, 1997
TRUST PROPERTY
Investments--Securities and Contracts to purchase
Securities(1) $ 492,812.00
Accrued interest to Initial Date of Deposit on underlying
Securities 2,012.50
Organizational costs(2) 100,000.00
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Total $ 594,824.50
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LIABILITIES AND INTEREST OF HOLDERS
Liabilities: Accrued interest to Initial Date of Deposit
on underlying Securities(3) $ 2,012.50
Accrued Liability(2) 100,000.00
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Subtotal 102,012.50
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Interest of Holders of 500,000 Units of fractional
undivided interest outstanding:
Cost to investors(4) 513,347.00
Gross underwriting commissions(5) (20,535.00)
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Subtotal $ 492,812.00
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Total $ 594,824.50
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(1) Aggregate cost to the Fund of the securities under Defined
Portfolio is based upon the offer side evaluation determined by the Evaluator at
the evaluation time on the business day prior to the Initial Date of Deposit.
The contracts to purchase the securities are collateralized by an irrevocable
letter of credit which has been issued by Fuji Bank, Ltd., New York Agency, in
the amount of $493,293.75 and deposited with the Trustee. The amount of the
letter of credit includes $491,281.25 for the purchase of $500,000.00 face
amount of the securities, plus $2,012.50 for accrued interest.
(2) This represents a portion of the Fund's organizational costs which
will be deferred and amortized over five years. Organizational costs have been
estimated based on a projected Fund size of $100,000,000. To the extent the Fund
is larger or smaller, the amount paid may vary.
(3) Representing a special distribution to the Sponsors by the Trustee
of an amount equal to the accrued interest on the securities as of the initial
date of deposit.
(4) Aggregate public offering price (exclusive of interest) computed
on the basis of the offer side evaluation of the underlying securities as of the
evaluation time on the business day prior to the Initial Date of Deposit.
(5) Assumes the maximum sales charge of 4.00% of the Public Offering
Price (4.167% of the value of the Securities).
A-6
<PAGE>
GOVERNMENT SECURITIES INCOME FUND
GNMA SERIES--2A
DEFINED ASSET FUNDS
I want to learn more about automatic reinvestment in the GNMA Fund Investment
Accumulation Program, Inc. Please send me information about the Program and a
current Prospectus.
My Name (please print) Registered Holder
My Address, including
Zip Code (please print)
Registered Holder
(Two signatures required if
joint tenancy)
12345678
<PAGE>
BUSINESS REPLY MAIL NO POSTAGE
FIRST CLASS PERMIT NO. 1313, NEW YORK, NY NECESSARY
IF MAILED
POSTAGE WILL BE PAID BY ADDRESSEE IN THE
THE BANK OF NEW YORK (GNMA--2A) UNITED STATES
UNIT INVESTMENT TRUST DEPARTMENT
P.O. BOX 974 - WALL STREET DIVISION
NEW YORK, NY 10268-0974
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(Fold along this line.)
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(Fold along this line.)
<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
GOVERNMENT SECURITIES INCOME FUND
GNMA SERIES
THIS PART B OF THE PROSPECTUS MAY NOT BE DISTRIBUTED UNLESS ACCOMPANIED OR
PRECEDED BY PART A.
FURTHER INFORMATION REGARDING THE FUND MAY BE OBTAINED
WITHIN FIVE DAYS OF WRITING OR CALLING THE TRUSTEE, AT THE ADDRESS AND
TELEPHONE NUMBER 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...................................... 4
How to Redeem or Sell Units........................... 4
Income and Distributions.............................. 5
Fund Expenses......................................... 6
PAGE
---------
Taxes................................................. 7
Records and Reports................................... 9
Trust Indenture....................................... 9
Miscellaneous......................................... 10
Supplemental Information.............................. 11
Appendix A--Sales Charge Schedules.................... a-1
FUND DESCRIPTION
PORTFOLIO SELECTION
Professional buyers 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 Defined Asset Funds
are included in the Portfolio. No leverage or borrowing is used nor does the
Portfolio contain other kinds of securities to enhance yield. A summary of the
Securities in the Portfolio appears in Part A of the Prospectus.
The deposit of the Securities in the Fund on the initial date of deposit
established a proportionate relationship between the face amount of the
Securities. Following the initial date of deposit the Sponsors may deposit
additional Securities in order to create new Units, maintaining to the extent
possible that original proportionate relationship.
Yields on GNMA mortgage-backed securities depend on many factors including
general money market conditions, general conditions of the corporate and
mortgage-backed bond markets and prevailing interest rates.
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 additional Securities are deposited in order
to create new Units, and as Securities mature, are redeemed or are sold to meet
Unit redemptions or in other limited circumstances.
GINNIE MAES
The Ginnie Maes in the Portfolio have been issued by the Government
National Mortgage Association (GNMA), which is a wholly-owned U.S. government
corporation within the Department of Housing and Urban Development.
The Ginnie Maes are of the 'modified pass-through' type, the terms of which
provide for timely monthly payment by the issuers to the registered holders
(including the Fund) of their pro rata shares of the scheduled principal
1
<PAGE>
payments on account of the mortgages backing these Ginnie Maes, plus any
prepayments of principal of such mortgages received, and interest on the
aggregate unpaid principal balance of these Ginnie Maes. Ginnie Maes are
guaranteed by GNMA as to timely payment of principal and interst. The full faith
and credit of the United States is pledged to the payment of all amounts which
may be required to be paid under the guaranty.
All mortgages in the pools backing the Ginnie Maes contained in the
Portfolio are mortgages on 1-to 4-family dwellings (amortizing over a period of
up to 30 years). In general, the mortgages in these pools provide for equal
monthly payments over the life of the mortgage (aside from prepayments),
designed to repay the principal of the mortgage over this period, together with
interest at a fixed rate on the unpaid balance.
The GNMA guaranty described above relates only to a payment of principal of
and interest on the Ginnie Maes in the Portfolio and not to the Units of the
Fund.
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 the Sponsors, 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 and
guaranteed by GNMA and has a fixed maturity date substantially similar to the
failed Security. A replacement security must be deposited within 110 days after
the 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 and
that payments of principal may be received sooner than anticipated, especially
if interest rates decline. 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. The value of Ginnie Maes purchased at a market discount will increase
in value faster than Ginnie Maes purchased at a market premium if interest rates
decrease. Conversely, if intrest rates increase, the value of Ginnie Maes
purchased at a market discount will decrease faster than Ginnie Maes purchased
at a premium. In addition, if interest rates rise, the prepayment risk of higher
yielding, premium Ginnie Maes and the prepayment benefit for lower yielding,
discount Ginnie Maes will be reduced. The potential for appreciation on the
Securities, which could otherwise be expected to result from a decline in
interest rates, may tend to be limited by any increased prepayments by
mortgagors as interest rates decline. In addition, prepayments of principal on
Ginnie Maes purchased at a premium over par will result in some loss on
investment which prepayments on Ginnie Maes purchased at a discount from par
will result in some gain on investment. Market premium or discount attributable
to interest rate changes does not indicate market confidence or lack of
confidence in the issue.
The Securities in the Portfolio, though backed by GNMA, are subject to
changes in market value when interest rates fluctuate. The Fund seeks to protect
against declining interest rates by investing a portion of the Portfolio in
2
<PAGE>
longer-term Securities, while if interest rates rise investors will be able to
reinvest the proceeds of principal returned each year in higher yielding
obligations. It is anticipated that equal portions of principal invested will be
returned annually as Securities mature.
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
Monthly payments and prepayments of principal are made to the Fund in
respect of the mortgages underlying the Ginnie Maes. All of the mortgages in the
pools relating to the Ginnie Maes in the Portfolio are subject to prepayment
without any significant premium or penalty at the option of the mortgagors
(i.e., the homeowners). While the mortgages on 1-to 4-family dwellings
underlying the Ginnie Maes are amortized over a period of up to 30 years, it has
been the experience of the mortgage industry that the average life of comparable
mortgages, owing to prepayments, is much less. Generally speaking, a number of
factors, including mortgage market interest rates and homeowners mobility, will
affect the average life of the Ginnie Maes in the Portfolio. Changes in
prepayment patterns are influenced by changes in housing cycles and mortgage
refinancing could influence yield assumptions used in pricing the securities.
While the value of these mortgage backed securities generally fluctuates
inversely with changes in interest rates, it should be noted that their
potential for appreciation, which could otherwise be expected to result from a
decline in interest rates, may tend to be limited by any increased prepayments
by mortgagors as interest rates decline. Accordingly, the termination of the
Fund might be accelerated as a result of prepayments made as described above.
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.
Early termination of a Fund or early payments of principal may have
important consequences to the investor, e.g., to the extent that Units were
purchased with a view to an investment of longer duration, the overall
investment program of the investor may require readjustment; or the overall
return on investment may be less or greater than anticipated, depending in part
on whether the purchase price paid for Units represented the payment of an
overall premium or a discount, respectively, above or below the state principal
amounts of the underlying mortgages.
FUND TERMINATION
The Fund will be terminated no later than the mandatory termination date
specified in Part A of the Prospectus. 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 the minimum value specified in Part A
of the Prospectus. A decision by the Sponsors to 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.
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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, 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 (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.
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.
Net accrued interest and principal cash, if any, are added to the Public
Offering Price, the Sponsors' Repurchase Price and the Redemption Price per
Unit. This represents the interest accrued on the Securities, net of Fund
expenses, from the initial date of deposit to, but not including, the settlement
date for Units (less any prior distributions of interest income to investors).
Securities deposited also carry accrued but unpaid interest up to the initial
date of deposit. To avoid having investors pay this additional accrued interest
(which earns no return) when they purchase Units, the Trustee advances and
distributes this amount to the Sponsors; it recovers this advance from interest
received on the Securities. Because of varying interest payment dates on the
Securities, accrued interest at any time will exceed the interest actually
received by the Fund.
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 Ginnie Maes of the type deposited in the Portfolio
are expected to be 1/4 to 1/2 of 1% 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 Redeem or Sell Units below). 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 REDEEM OR SELL UNITS
You can redeem your Units at any time for net asset value. In addition, the
Sponsors have maintained an uninterrupted secondary market for Units for over 20
years and will ordinarily buy back Units at net asset value. The following
describes these two methods to redeem or sell Units in greater detail.
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REDEEMING UNITS WITH THE TRUSTEE
You can always redeem your Units directly with the Trustee for net asset
value. This can be done by sending the Trustee a redemption request together
with any Unit certificates you hold, which 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 trust instrument, certificate of corporate authority, certificate of
death or appointment as executor, administrator or guardian.
Within seven days after the Trustee's receipt of your request containing
the necessary documents, a check will be mailed to you in an amount equal to the
net asset value of your Units. Because of the sales charge, market movements or
changes in the Portfolio, net asset value at the time you redeem your Units may
be greater or less than the original cost of your Units. Net asset value is
calculated each Business Day by adding the value of the Securities, net accrued
interest, cash and the value of any other Fund assets; deducting unpaid taxes or
other governmental charges, accrued but unpaid Fund expenses, unreimbursed
Trustee advances, cash held to redeem Units or for distribution to investors and
the value of any other Fund liabilities; and dividing the result by the number
of outstanding Units.
As long as the Sponsors are maintaining a secondary market for Units (as
described below), the Trustee will not actually redeem your Units but will sell
them to the Sponsors for net asset value. If the Sponsors are not maintaining a
secondary market, the Trustee will redeem your Units for net asset value or will
sell your Units in the over-the-counter market if the Trustee believes it will
obtain a higher net price for your Units. If the Trustee is able to sell the
Units for a net price higher than net asset value, you will receive the net
proceeds of the sale.
Securities are evaluated on the offer side during the initial offering
period and on the bid side thereafter.
If cash is not available in the Fund's Income and Capital Accounts to pay
redemptions, the Trustee may sell Securities selected by the Agent for the
Sponsors, based on market and credit factors determined to be in the best
interest of the Fund. These sales are often made at times when the Securities
would not otherwise be sold and may result in lower prices than might be
realized otherwise and will also reduce the size and diversity of the Fund. If
Securities are being sold during a time when additional Units are being created
by the purchase of additional Securities (as described under Portfolio
Selection), Securities will be sold in a manner designed to maintain, to the
extent practicable, the proportionate relationship among the face amounts of
each Security in the Portfolio.
Redemptions may be suspended or payment postponed (i) if the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (ii) if
the SEC determines that trading on the New York Stock Exchange is restricted or
that an emergency exists making disposal or evaluation of the Securities not
reasonably practicable or (iii) for any other period permitted by SEC order.
SPONSORS' SECONDARY MARKET FOR UNITS
The Sponsors, while not obligated to do so, will buy back Units at net
asset value without any other fee or charge as long as they are maintaining a
secondary market for Units. Because of the sales charge, market movements or
changes in the portfolio, net asset value at the time you sell your Units may be
greater or less than the original cost of your Units. The Sponsors may resell
the Units to other buyers or redeem the Units by tendering them to the Trustee.
You should consult your financial professional for current market prices to
determine if other broker-dealers or banks are offering higher prices for Units.
The Sponsors may discontinue the secondary market for Units without prior
notice if the supply of Units exceeds demand or for other business reasons.
Regardless of whether the Sponsors maintain a secondary market, you have the
right to redeem your Units for net asset value with the Trustee at any time, as
described above.
INCOME, DISTRIBUTIONS AND REINVESTMENT
INCOME
The terms of the Ginnie Maes provide for payment to the holders thereof
(including the Fund), on the fifteenth day of each month, of amounts collected
by or due to the issuers thereof with respect to the underlying mortgages during
the preceding month, except for the first payment, which is not due until 45
days after the initial issue date of the Security. 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.
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DISTRIBUTIONS
Each Unit receives an equal share of monthly distributions of interest
income net of estimated expenses. Along with the Monthly Income Distributions,
the Trustee will distribute the investor's pro rata share of principal received
from any disposition of a Security to the extent available for distribution. 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.
A portion of Fund expenses will be deducted from the Income Account and a
portion from the Capital Account. The initial estimated annual income per Unit,
after deducting estimated annual Fund expenses as stated in Part A of the
Prospectus, will change as prepayments occur on the underlying mortgages, 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
prepayments 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.
REINVESTMENT
Distributions will be paid in cash unless you elect to have your
distributions reinvested in The GNMA Fund Investment Accumulation Program, Inc.
The Program is an open-end management investment company whose primary
investment objective is to obtain a high level of current income through
investment in a portfolio of Ginnie Maes. Investors participating in the Program
will be taxed on their reinvested distributions in the manner described in Taxes
even though distributions are reinvested in the Program. For more complete
information about the Program, including charges and expenses, return the
enclosed form for a prospectus. Read it carefully before you decide to
participate. Notice of election to participate must be received by the Trustee
in writing at least ten days before the Record Day for the first distribution to
which the notice is to apply.
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 fee shown in Part A of this Prospectus assumes that the Fund will
reach a size estimated by the Sponsors and is based on a sliding fee scale that
reduces the per 1,000 units Trustee's fee as the size of the Fund increases. 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 Trustee fees and expenses for maintaining
the Fund's registration statement current with Federal and State authorities,
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
currently estimated at $0.25 per $1,000 face amount 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 Defined Asset Funds, 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 or some portion of the expenses incurred in establishing the Fund,
including the cost of the initial preparation of documents relating to the Fund,
Federal and State registration fees, the initial fees and expenses of the
Trustee, legal expenses and any other out-of-pocket expenses will be paid by the
Fund and amortized over five years. Any balance 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.
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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.
Under the recently enacted Taxpayer Relief Act of 1997, investors who are
individuals and have held their Units for more than 18 months may be entitled to
a 20% maximum federal tax rate for gains from the sale of these Units. (See
Defining Your Investment--Termination Date.) Prior to the issuance of relevant
regulations, it is not certain whether or how the 20% maximum rate will be
available with respect to capital gain dividends paid by the Fund. Investors
should consult their own tax advisers in this regard.
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.
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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 applicable treaty rate. Because
interest income of the type received by the fund would generally not have been
subject to withholding if it had been 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).
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 (prior to the year 2000) 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 Sponsors 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 of a contribution by an individual covered by an employer retirement plan
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 a married individual
filing a joint return) or $200 (in the case of a married individual filing 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. Under the recently enacted Taxpayer
Relief Act of 1997 the 10% surtax will be waived for withdrawals for certain
educational and first-time homebuyer expenses. The Taxpayer Relief Act also
provides, subject to certain income limitations, for a special type of IRA under
which contributions would be non-deductible but distributions would be tax-free
if the account were held for at least five years and the account holder was at
least aged 59 1/2 at the time of distribution.
Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing
plan for employees of a corporation may purchase Units of the Fund.
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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 gross 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.
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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.
CODE OF ETHICS
The Agent for the Sponsors has adopted a code of ethics requiring
preclearance and reporting of personal securities transactions by its personnel
who have access to information on Defined Asset Funds portfolio transactions.
The code is intended to prevent any act, practice or course of conduct which
would operate as a fraud or deceit on any Fund and to provide guidance to these
persons regarding standards of conduct consistent with the Agent's
responsibilities to the Funds.
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 initial offering period is 30 days
or less if all Units are sold. If some Units initially offered have not been
sold, the Sponsors may extend the initial offering period for up to four
additional successive 30-day periods.
The Sponsors intend 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.
10
<PAGE>
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 their 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.
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
SALES CHARGE
(GROSS UNDERWRITING PROFIT)
----------------------------------
AS PERCENT OF AS PERCENT OF
OFFER SIDE PUBLIC NET AMOUNT
NUMBER OF UNITS OFFERING PRICE INVESTED
- ----------------------------------- ------------------- -------------
Less than 100,000.................. 4.00% 4.167%
100,000-499,999.................... 3.00 3.093
500,000-749,999.................... 2.50 2.564
750,000-999,999.................... 2.00 2.041
1,000,000 or more.................. 1.50 1.523
SECONDARY MARKET SALES CHARGE SCHEDULE
SALES CHARGE
(GROSS UNDERWRITING PROFIT)
--------------------------------
AS PERCENT OF AS PERCENT OF
BID SIDE PUBLIC NET AMOUNT
NUMBER OF UNITS OFFERING PRICE INVESTED
- ----------------------------------- ----------------- -------------
Less than 100,000.................. 4.25% 4.439%
100,000-499,999.................... 3.25 3.359
500,000-749,999.................... 2.50 2.564
750,000-999,999.................... 2.00 2.041
1,000,000 or more.................. 1.50 1.523
The concession to dealers is 65% of the effective sales charge.
a-1
<PAGE>
Defined
Asset FundsSM
SPONSORS/UNDERWRITERS: GOVERNMENT SECURITIES
Merrill Lynch, INCOME FUND
Pierce, Fenner & Smith Incorporated GNMA Series--2A
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.
Weehawken, NJ 07087 Copies of filed material can be obtained
(201) 902-3000 from 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 this
The Bank of New York Prospectus; and any information or
Unit Investment Trust Department representation not contained herein must
P.O. Box 974 not be relied upon as having been
Wall Street Division authorized.
New York, NY 10268-0974 ------------------------------
1-800-221-7771 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 does not constitute an
offer to sell or a solicitation of an
offer to buy 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.
11322--8/97
a-2
<PAGE>
PART II
ADDITIONAL INFORMATION NOT INCLUDED IN THE PROSPECTUS
A. THE FOLLOWING INFORMATION RELATING TO THE DEPOSITORS IS INCORPORATED BY
REFERENCE TO THE SEC FILINGS INDICATED AND MADE A PART OF THIS REGISTRATION
STATEMENT.
I. Bonding arrangements of each of the Depositors are incorporated by reference
to Item A of Part II to the Registration Statement on Form S-6 under the
Securities Act of 1933 for Municipal Investment Trust Fund, Monthly Payment
Series--573 Defined Asset Funds (Reg. No. 333-08241).
II. The date of organization of each of the Depositors is set forth in Item B
of Part II to the Registration Statement on Form S-6 under the Securities Act of
1933 for Municipal Investment Trust Fund, Monthly Payment Series--573 Defined
Asset Funds (Reg. No. 333-08241) and is herein incorporated by reference
thereto.
III. The Charter and By-Laws of each of the Depositors are incorporated herein
by reference to Exhibits 1.3 through 1.12 to the Registration Statement on Form
S-6 under the Securities Act of 1933 for Municipal Investment Trust Fund,
Monthly Payment Series--573 Defined Asset Funds (Reg. No. 333-08241).
IV. Information as to Officers and Directors of the Depositors has been filed
pursuant to Schedules A and D of Form BD under Rules 15b1-1 and 15b3-1 of the
Securities Exchange Act of 1934 and is incorporated by reference to the SEC
filings indicated and made a part of this Registration Statement:
Merrill Lynch, Pierce, Fenner & Smith Incorporated 8-7221
Smith Barney Inc. ........................................ 8-8177
PaineWebber Incorporated.................................. 8-16267
Prudential Securities Incorporated........................ 8-27154
Dean Witter Reynolds Inc. ................................ 8-14172
------------------------------------
B. The Internal Revenue Service Employer Identification Numbers of the
Sponsors and Trustee are as follows:
Merrill Lynch, Pierce, Fenner & Smith Incorporated 13-5674085
Smith Barney Inc. ........................................ 13-1912900
PaineWebber Incorporated.................................. 13-2638166
Prudential Securities Incorporated........................ 13-6134767
Dean Witter Reynolds Inc. ................................ 94-1671384
The Bank of New York, Trustee............................. 13-4941102
II-1
<PAGE>
SERIES OF GOVERNMENT SECURITIES INCOME FUND,
MUNICIPAL INVESTMENT TRUST FUND, EQUITY INCOME FUND
AND DEFINED ASSET FUNDS MUNICIPAL INSURED SERIES
DESIGNATED PURSUANT TO RULE 487 UNDER THE SECURITIES ACT OF 1933
SEC
SERIES NUMBER FILE NUMBER
- --------------------------------------------------------------------------------
Government Securities Income Fund, Monthly Payment U.S.
Treasury Series-1........................................... 2-81969
Municipal Investment Trust Fund, Four Hundred Thirty-Eighth
Monthly Payment Series...................................... 33-16561
Government Securities Income Fund, Monthly Payment U.S.
Treasury Series-8........................................... 33-31728
Municipal Investment Trust Fund, Multistate Series-48....... 33-50247
Government Securities Income Fund, U.S. Treasury Strategy
Series-1.................................................... 33-48915
Defined Asset Funds Municipal Insured Series................ 33-54565
Equity Income Fund, Select Ten Portfolio--1995 Spring
Series...................................................... 33-55807
CONTENTS OF REGISTRATION STATEMENT
The Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet of Form S-6.
The Cross-Reference Sheet (incorporated by reference to the Cross-Reference
Sheet to the Registration Statement of Defined Asset Funds Municipal Series,
1933 Act File No. 33-54565).
The Prospectus.
Additional Information not included in the Prospectus (Part II). Consent of
independent accountants.
The following exhibits:
1.1 --Form of Reference Trust Indenture (incorporated by reference to
Exhibit 1.1 to the Registration Statement of Government Securities
Income Fund, Monthly Payment U.S. Treasury Series--22, 1933 Act file
No. 33-57173).
1.1.1 --Form of Standard Terms and Conditions of Trust Effective 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).
1.2 --Form of Master Agreement Among Underwriters (incorporated by reference
to Exhibit 1.2 to the Registration Statement of The Corporate Income
Fund, One Hundred Ninety-Fourth Monthly Payment Series, 1933 Act File
No. 2-90925).
2.1 --Form of Certificate of Beneficial Interest (included in Exhibit
1.1.1).
3.1 --Opinion of counsel as to the legality of the securities being issued
including their consent to the use of their names under the heading
'Miscellaneous--Legal Opinion' in the Prospectus.
4.1.1 --Consent of the Evaluator.
4.1.2 --Consent of Rating Agency.
5.1 --Consent of independent accountants.
9.1 --Information Supplement (incorporated by reference to Exhibit 9.1 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
GNMA SERIES--2A
DEFINED ASSET FUNDS
SIGNATURES
The registrant hereby identifies the series numbers of Government
Securities Income Fund, Municipal Investment Trust Fund, Equity Income Fund and
Defined Asset Funds Municipal Insured Series listed on page R-1 for the purposes
of the representations required by Rule 487 and represents the following:
1) That the portfolio securities deposited in the series as to which this
registration statement is being filed do not differ materially in type
or quality from those deposited in such previous series;
2) That, except to the extent necessary to identify the specific portfolio
securities deposited in, and to provide essential information for, the
series with respect to which this registration statement is being filed,
this registration statement does not contain disclosures that differ in
any material respect from those contained in the registration statements
for such previous series as to which the effective date was determined
by the Commission or the staff; and
3) That it has complied with Rule 460 under the Securities Act of 1933.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
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 29TH DAY OF
AUGUST, 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 Powers of Attorney have been filed
a majority of under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, File
Fenner & Smith Incorporated: 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
DANIEL C. TYLER
(As authorized signatory for Merrill Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
<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 Numbers:
33-49753, 33-55073
and 333-10441
STEVEN D. BLACK
JAMES BOSHART III
ROBERT A. CASE
JAMES DIMON
ROBERT DRUSKIN
ROBERT H. LESSIN
WILLIAM J. MILLS, II
MICHAEL B. PANITCH
PAUL UNDERWOOD
By GINA LEMON
(As authorized signatory for
Smith Barney Inc. and
Attorney-in-fact for the persons listed above)
R-4
<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 Number: 33-55073
of PaineWebber Incorporated:
JOSEPH J. GRANO, JR.
DONALD B. MARRON
By
ROBERT E. HOLLEY
(As authorized signatory for PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-5
<PAGE>
PRUDENTIAL SECURITIES INCORPORATED
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Prudential Securities have been filed
Incorporated: under Form SE and
the following 1933
Act File Numbers:
33-41631 and
333-15919
ROBERT C. GOLDEN
ALAN D. HOGAN
A. LAURENCE NORTON, JR.
LELAND B. PATON
VINCENT T. PICA II
MARTIN PFINSGRAFF
HARDWICK SIMMONS
LEE B. SPENCER, JR.
BRIAN M. STORMS
By RICHARD R. HOFFMANN
(As authorized signatory for Prudential Securities
Incorporated and Attorney-in-fact for the persons
listed above)
R-6
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following 1933
the Board of Directors of Dean Witter Act File Numbers: 33-17085 and
Reynolds Inc.: 333-13039
RICHARD M. DeMARTINI
ROBERT J. DWYER
CHRISTINE A. EDWARDS
CHARLES A. FIUMEFREDDO
JAMES F. HIGGINS
MITCHELL M. MERIN
STEPHEN R. MILLER
RICHARD F. POWERS III
PHILIP J. PURCELL
THOMAS C. SCHNEIDER
WILLIAM B. SMITH
By
MICHAEL D. BROWNE
(As authorized signatory for
Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)
R-7
EXHIBIT 3.1
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
August 29, 1997
GOVERNMENT SECURITIES INCOME FUND,
GNMA SERIES--2A
DEFINED ASSET FUNDS
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
C/O MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEFINED ASSET FUNDS
P.O. BOX 9051
PRINCETON, NJ 08543-9051
Dear Sirs:
We have acted as special counsel for you, as sponsors (the 'Sponsors') of
GNMA Series--2A of Government Securities Income Fund, Defined Asset Funds (the
'Fund'), in connection with the issuance of units of fractional undivided
interest in the Fund (the 'Units') in accordance with the Trust Indenture
relating to the Fund (the 'Indenture').
We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of such documents and instruments as
we have deemed necessary or advisable for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that (i) the execution and
delivery of the Indenture and the issuance of the Units have been duly
authorized by the Sponsor and (ii) the Units, when duly executed and delivered
by the Sponsors and the Trustee in accordance with the Indenture, will be
legally issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as Exhibit 3.1 of the
Registration Statement relating to the Units filed under the Securities Act of
1933 and to the use of our name in such Registration Statement and in the
related prospectus under the heading 'Miscellaneous--Legal Opinion.'
Very truly yours,
DAVIS POLK & WARDWELL
EXHIBIT 4.1.1
KENNY S&P EVALUATION SERVICES
A Division of J.J. Kenny Co., Inc.
65 Broadway
New York, New York 10006-2511
Telephone 212/770-4422
Fax 212/797-8681
Frank A. Ciccotto, Jr.
Vice President
AUGUST 29, 1997
MERRILL LYNCH PIERCE FENNER & SMITH INCORPORATED
DEFINED ASSET FUNDS
P.O. BOX 9051
PRINCETON, NJ 08543-9051
THE BANK OF NEW YORK
UNIT INVESTMENT TRUST DIVISION
P.O. BOX 974 - WALL STREET STATION
NEW YORK, NY 10268-0974
RE: GOVERNMENT SECURITIES INCOME FUND, GNMA SERIES--2A, DEFINED ASSET FUNDS
Gentlemen:
We have examined the Registration Statement File No. 333-10807 for the
above captioned fund. We hereby acknowledge that Kenny S&P Evaluation Services,
a division of Kenny Information Systems, 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 Kenny
Information Systems, Inc., as evaluator.
You are hereby authorized to file a copy of this letter with the Securities
and Exchange Commission.
Sincerely,
FRANK A. CICCOTTO, JR.
Vice President
MANAGED FUND RATINGS
25 Broadway
New York, NY 10004-1064
Tel.: 212-208-8000
Fax: 212-208-8034
EXHIBIT 4.1.2
STANDARD & POOR'S CORPORATION
A Division of The McGraw-Hill Companies
Mr. Michael Perini The Bank of New York
First Vice President Unit Investment Trust Department
Merrill Lynch Pierce Fenner & Smith, P.O. Box 974
Inc. Wall Street Division
UIT Division New York, NY 10268-0974
P.O. Box 9051
Princeton, New Jersey 08543-9051
RE: Government Securities Income Fund GNMA Series--2A Defined Asset Funds,
Registration No. 333-10807
Dear Mr. Perini:
Pursuant to your request for a Standard & Poor's rating on the units of the
above captioned trust, we have reviewed the information presented to us and have
assigned an 'AAA' rating to the units in the trust. The rating is a direct
reflection of the portfolio of the trust, which will be composed solely of
mortgage-backed securities fully guaranteed as to principal and interest by the
Government National Mortgage Association (GNMA) and the full faith and credit of
the United States is pledged to the payment of the securities in the trust.
You have permission to use the name of Standard & Poor's, a division of The
McGraw-Hill Companies and the above-assigned rating in connection with your
dissemination of information relating to these units, provided that it is
understood that the rating is not a 'market' rating nor a recommendation to buy,
hold or sell the units of the trust. Further, it should be understood the rating
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
holders of the interest and principal required to be paid on the portfolio
assets. Standard & Poor's reserves the right to advise its own clients,
subscribers, and the public of the rating. Standard & Poor's relies on the
sponsor and its counsel, accountants, and other experts for the accuracy and
completeness of the information submitted in connection with the rating.
Standard & Poor's does not independently verify the truth or accuracy of any
such information.
Standard & Poor's will maintain surveillance of the 'AAA' rating until
September 29, 1998. On this date, the rating will be automatically withdrawn by
Standard & Poor's unless a post effective letter is requested by the trust.
This letter evidences our consent to the use of the name of Standard &
Poor's, a division of The McGraw-Hill Companies and the above-assigned rating in
the registration statement or prospectus relating to the units or the trust.
However, this letter should not be construed as a consent by us, within the
meaning of Section 7 of the Securities Act of 1933, to the use of the name of
Standard & Poor's, a division of The McGraw-Hill Companies in connection with
the ratings assigned to the securities contained in the trust. You are hereby
authorized to file a copy of this letter with the Securities and Exchange
Commission.
Please be certain to send us three copies of your final prospectus as soon
as it becomes available. Should we not receive them within a reasonable time
after the closing or should they not conform to the representations made to us,
we reserve the right to withdraw the rating.
We are pleased to have had the opportunity to be of service to you. Our
bill will be sent to you within one month. If we can be of further help, please
do not hesitate to call upon us.
Sincerely,
EXHIBIT 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee of Government Securities Income Fund,
GNMA Series--2A, Defined Asset Funds:
We consent to the use in this Registration Statement No. 333-10807 of our report
dated August 29, 1997, relating to the Statement of Condition of Government
Securities Income Fund, GNMA Series--2A, Defined Asset Funds, and to the
reference to us under the heading 'Miscellaneous--Auditors' in the Prospectus
which is a part of this Registration Statement.
DELOITTE & TOUCHE LLP
New York, N.Y.
August 29, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> AUG-29-1997
<INVESTMENTS-AT-COST> 492,812
<INVESTMENTS-AT-VALUE> 492,812
<RECEIVABLES> 2,013
<ASSETS-OTHER> 100,000
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 594,825
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 102,013
<TOTAL-LIABILITIES> 102,013
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 492,812
<SHARES-COMMON-STOCK> 500,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 492,812
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 500,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
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<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>
