AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 30, 1997
REGISTRATION NO. 333-00009
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE 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
MONTHLY PAYMENT U.S. TREASURY SERIES--25
(LADDERED MATURITIES)
DEFINED ASSET FUNDS
(A UNIT INVESTMENT TRUST)
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE,
FENNER & SMITH
INCORPORATED
UNIT INVESTMENT TRUSTS
POST OFFICE BOX 9051
PRINCETON, NJ 08543-9051 SMITH BARNEY INC.
TWO WORLD TRADE CENTER
101ST FLOOR
NEW YORK, NY 10048
PRUDENTIAL SECURITIES PAINEWEBBER INCORPORATED DEAN WITTER REYNOLDS INC.
INCORPORATED 1285 AVENUE OF THE TWO WORLD TRADE
ONE NEW YORK PLAZA AMERICAS CENTER--59TH FLOOR
NEW YORK, NY 10292 NEW YORK, NY 10019 NEW YORK, NY 10048
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
TERESA KONCICK, ESQ. LAURIE A. HESSLEIN LEE B. SPENCER, JR.
P.O. BOX 9051 388 GREENWICH STREET ONE NEW YORK PLAZA
PRINCETON, NJ 08543-9051 NEW YORK, NY 10013 NEW YORK, NY 10292
COPIES TO:
DOUGLAS LOWE, ESQ. ROBERT E. HOLLEY PIERRE DE SAINT PHALLE,
130 LIBERTY STREET--29TH 1200 HARBOR BLVD. ESQ.
FLOOR WEEHAWKEN, NJ 07087 450 LEXINGTON AVENUE
NEW YORK, NY 10006 NEW YORK, NY 10017
The issuer has registered an indefinite number of Units under the Securities Act
of 1933 pursuant to Rule 24f-2 and filed the Rule 24f-2 Notice for the most
recent fiscal year on February 13, 1997.
Check box if it is proposed that this filing will become effective on June 6,
1997 pursuant to paragraph (b) of Rule 485. / x /
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DEFINED ASSET FUNDSSM
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GOVERNMENT The objective of this Defined Fund is safety of
SECURITIES capital and current monthly income by investing in
INCOME FUND a portfolio of interest-bearing U.S. Treasury
MONTHLY PAYMENT securities with laddered maturities. These
U.S. TREASURY securities are backed by the full faith and credit
SERIES--25 of the United States government. Laddered
(LADDERED MATURITIES) maturities will periodically return to investors
(A UNIT INVESTMENT TRUST) approximately equal portions of principal invested
- ------------------------------as each security matures, ending in 2006. For many
/ / MONTHLY INCOME foreign investors, interest income is exempt from
/ / FOREIGN HOLDERS U.S. federal income taxes, including withholding
TAX-EXEMPT taxes. Interest income is subject to U.S. federal
income taxes for U.S. investors, but is exempt
from state and local personal income taxes in all
states. There can be no assurance that the Fund
will achieve its objective.
The value of units will fluctuate with the value
of the Portfolio, which will change with changes
in interest rates.
Minimum purchase: $250
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THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY
STATE SECURITIES COMMISSION PASSED UPON THE
SPONSORS: ACCURACY
Merrill Lynch, OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION
Pierce, Fenner & Smith TO THE CONTRARY IS A CRIMINAL OFFENSE.
Incorporated --------------------------------------------------
Smith Barney Inc. INQUIRIES SHOULD BE DIRECTED TO THE TRUSTEE AT
PaineWebber Incorporated 1-800-323-1508.
Prudential Securities PROSPECTUS DATED JUNE 6, 1997.
Incorporated INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN
Dean Witter Reynolds Inc. IT FOR FUTURE REFERENCE.
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Def ined Asset FundsSM
Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $115 billion sponsored in the last 25 years. Each Defined
Asset Fund is a portfolio of preselected securities. The portfolio is divided
into 'units' representing equal shares of the underlying assets. Each unit
receives an equal share of income and principal distributions.
Defined Asset Funds offer several defined 'distinctives'. You know in advance
what you are investing in and that changes in the portfolio are limited -- a
defined portfolio. Most defined bond funds pay interest monthly -- defined
income. The portfolio offers a convenient and simple way to invest -- simplicity
defined.
Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:
o Municipal portfolios
o Corporate portfolios
o Government portfolios
o Equity portfolios
o International portfolios
The terms of Defined Funds are as short as one year or as long as 30 years.
Special defined bond funds are available including: insured funds, double and
triple tax-free funds and funds with 'laddered maturities' to help protect
against changing interest rates. Defined Asset Funds are offered by prospectus
only.
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Defined U.S. Treasury Series
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Our defined portfolio of U.S. Treasury securities offers you a simple and
convenient way to participate in the U.S. Treasury market and obtain monthly
income while earning an attractive return.
INVESTMENT OBJECTIVES
To obtain safety of capital and investment flexibility as well as current
monthly income distributions through investment in a fixed, laddered portfolio
of interest-bearing U.S. Treasury obligations with maturities of approximately
five to nine years. By utilizing an investment strategy called laddering, the
Fund seeks to protect against changes in interest rates by investing a portion
of the Portfolio in 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.
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Defining Your Portfolio
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PROFESSIONAL SELECTION AND SUPERVISION
The Portfolio of Securities is selected by experienced buyers and research
analysts. 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' interest.
PORTFOLIO COMPOSITION
The Fund was created March 8, 1996. The information in this prospectus is as of
February 28, 1997, the evaluation date.
The Portfolio contain 5 different issues of U.S. Treasury securities with fixed
final maturity dates ranging from 8/15/02 to 2/15/06. The percentage
relationships are as follows: 6.50% coupons maturing 5/15/05, 20%; 5.625%
coupons maturing 2/15/06, 20%; 5.75% coupons maturing 8/15/03, 20%; 5.875%
coupons maturing 2/15/04, 20%; 6.375% coupons maturing 8/15/02, 20%. As each
U.S. Treasury security matures, the proceeds of the maturing Security will be
distributed to investors, returning approximately equal portions of principal
invested each year. The U.S. Treasury securities in the Portfolio are backed by
the full faith and credit of the United States.
CALL PROTECTION
100% of the aggregate face amount of the Portfolio is not subject to redemption
prior to maturity but is payable in full at the stated maturity amounts.
TAX INFORMATION
In the opinion of special counsel to the Sponsors, each investor will be
considered to have received the interest on his pro rata portion of each
Security when interest on the Security is received by the Fund. This interest is
subject to U.S. Federal income taxes for U.S. investors but exempt from state
and local personal income taxes in all states. For many foreign investors,
income from the Fund will be exempt from Federal income taxes.
Allowable contributions to an IRA spousal account have been increased to $4,000
from $2,250 for tax years beginning after December 31, 1996. (See
Taxes--Retirement Plans in Part B.)
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Defining Your Investment
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PUBLIC OFFERING PRICE $994.41
PER 1,000 UNITS
The Public Offering Price as of Februry 28, 1997, the evaluation date is based
on the aggregate offer side value of the underlying Securities in the Fund
($53,108,179), plus a maximum sales charge of 2.041% of the value of the
Securities, plus cash ($555,900), divided by the number of units outstanding
(55,055,900) 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 on every business day.
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PREMIUM AND DISCOUNT ISSUES
On the evaluation date, 20% of the securities were valued at a premium over par
and 80% at a discount from par (see Risk Factors in Part B.)
LOW MINIMUM INVESTMENT
You can get started with a minimum purchase of $250. There is no minimum
purchase for payroll deduction plans.
PRINCIPAL DISTRIBUTIONS
Principal from sales, redemptions and maturities of Securities in the Fund will
be distributed to investors periodically when the amount to be distributed is
more than $5.00 per 1,000 units. As each Treasury note matures, the proceeds
will be distributed to investors.
REINVESTMENT OPTION
You can elect to automatically reinvest your income distributions into
additional units of the Fund. 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. On the evaluation date the value of the Fund was 95% of
the face amount of securities deposited.
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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 of Secondary
Offering Market
Period Public Public Offering
Offering Price Price
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Maximum Sales Charges 2.041% 2.00%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
Per 1,000 Units
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Trustee's Fee $ 0.48
Portfolio Supervision and Administrative Fees $ 0.25
Evaluator's Fee $ 0.20
Organizational Expenses $ 0.02
Other Operating Expenses $ 0.14
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TOTAL $ 1.09
The Fund (and therefore the investors) will bear all or a portion of its
organizational costs--including costs of preparing registration statements, 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.
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 (generally based on the lower bid side evaluation,
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 the evaluation date was $974.72 ($19.69 less than
the Public Offering Price). There is no fee for redeeming or selling your units.
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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.
Because of deposits of additional Securities and the maturity, possible 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 Income
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MONTHLY INTEREST INCOME
The Fund pays monthly income, even though the Securities generally pay interest
semi-annually.
WHAT YOU MAY EXPECT
(PAYABLE ON THE 25TH DAY OF THE MONTH TO HOLDERS OF RECORD ON THE 10TH DAY OF
THE MONTH):
Regular Monthly Income per 1,000 units: $ 4.87
Annual Income per 1,000 units: $ 58.55
These figures are estimates determined as of the evaluation date and actual
payments may vary.
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DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
GOVERNMENT SECURITIES INCOME FUND
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
PROSPECTUS MAY BE OBTAINED
WITHIN FIVE DAYS OF WRITING OR CALLING THE TRUSTEE, AT THE ADDRESS AND
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...................................... 3
How to Redeem or Sell Units........................... 4
Income and Distributions.............................. 4
Reinvestment.......................................... 5
Fund Expenses......................................... 5
PAGE
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Taxes................................................. 6
Records and Reports................................... 8
Trust Indenture....................................... 8
Miscellaneous......................................... 9
Supplemental Information.............................. 11
Appendix A--Sales Charge Schedules.................... a-1
FUND DESCRIPTION
PORTFOLIO SELECTION
Professional buyers and research analysts for Defined Asset Funds, with
access to extensive research, selected the Securities for the Portfolio after
considering the Fund's investment objectives as well as the availability of the
Securities (all Securities in the Portfolio were issued after July 18, 1984),
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 dedicated research analysts are included in the Portfolio. No leverage or
borrowing is used nor does the Portfolio contain other kinds of securities to
enhance yield. 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 among the face amounts of the
Securities. During the 90-day period 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.
Deposits of additional Securities subsequent to the 90-day period must generally
replicate exactly the proportionate relationship among the face amounts of the
Securities at the end of the initial 90-day period.
Yields on U.S. Government securities depend on many factors including
general money market conditions, general conditions of the bond markets and
prevailing interest rates.
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. Because the Portfolio is not
actively managed and principal is returned as the Securities are disposed of,
this principal should be relatively unaffected by changes in interest rates.
1
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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 by
the U.S. Treasury and has a fixed maturity date substantially similar to the
failed Security. A replacement security must be deposited within 110 days after
the initial date of deposit, 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.
Generally speaking, securities with longer maturities will fluctuate in value
more than securities with shorter maturities. In recent years there have been
wide fluctuations in interest rates and in the value of fixed-rate bonds
generally. The Sponsors cannot predict the direction or scope of any future
fluctuations.
Certain of the Securities may have been deposited at a market discount or
premium principally because their interest rates are lower or higher than
prevailing rates on comparable debt securities. The current returns of market
discount securities are lower than comparably rated securities selling at par
because discount securities tend to increase in market value as they approach
maturity. The current returns of market premium securities are higher than
comparably rated securities selling at par because premium securities tend to
decrease in market value as they approach maturity. Because part of the purchase
price is returned through current income payments and not at maturity, an early
redemption at par of a premium security will result in a reduction in yield to
the Fund. Market premium or discount attributable to interest rate changes does
not indicate market confidence or lack of confidence in the issue.
The U.S. Treasury obligations included in the Portfolio, though backed by
the full faith and credit of the United States, are subject to changes in market
value when interest rates fluctuate. The Fund seeks to protect against declining
interest rates by investing a portion of the Portfolio in 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
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.
2
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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.
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 of the Fund and any other Monthly Payment U.S. Treasury Series of
Government Securities Income Fund purchased on any one day by a single purchaser
(see Initial Offering sales charge schedule in Appendix A). In the secondary
market (after the initial offering period), the Public Offering Price is based
on the bid side evaluation of the Bonds, and includes a sales charge based on
the number of Units of the Fund purchased in the secondary market on the same
day by a single purchaser (see Secondary Market sales charge schedule in
Appendix A). Purchases in the secondary market of one or more Series sponsored
by the Sponsors that have the same rates of sales charge may be aggregated.
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 Treasury obligations of the type deposited in the
Portfolio are expected to be approximately .10% less than the offer price.
3
<PAGE>
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.
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 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.
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<PAGE>
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 AND DISTRIBUTIONS
INCOME
Interest received is credited to an Income Account and other receipts to a
Capital Account. A Reserve Account may be created by withdrawing from the Income
and Capital Accounts amounts considered appropriate by the Trustee to reserve
for any material amount that may be payable out of the Fund.
DISTRIBUTIONS
Each Unit receives an equal share of monthly distributions of interest
income net of estimated expenses. Interest on the Securities is generally
received by the Fund on a semi-annual or annual basis. Because interest on the
Securities is not received at a constant rate throughout the year, any Monthly
Income Distribution may be more or less than the interest actually received. To
eliminate fluctuations in the Monthly Income Distribution, a portion of the
Public Offering Price may consist of cash in an amount necessary for the Trustee
to provide approximately equal interest distributions. Upon the sale or
redemption of Units, investors will receive their proportionate share of this
cash. In addition, if a security is sold, redeemed or otherwise disposed of, the
Fund will periodically distribute to investors the portion of this cash that is
attributable to the Security, as well their share of principal received from the
disposition of the 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.
The initial estimated annual income per Unit, after deducting estimated
annual Fund expenses as stated in Part A of the Prospectus, will change as
Securities mature, are called or sold or otherwise disposed of, as replacement
obligations are deposited and as Fund expenses change. Because the Portfolio is
not actively managed, income distributions will generally not be affected by
changes in interest rates and the amount of income should be substantially
maintained as long as the Portfolio remains unchanged; however, optional
redemptions of Securities or other Portfolio changes may occur more frequently
when interest rates decline, which would result in early returns of principal
and possibly earlier termination of the Fund.
REINVESTMENT
Distributions of income may be reinvested by participating in the Fund's
reinvestment plan.
Purchases made pursuant to the Reinvestment Plan will be made without a
sales charge. Unit prices are based on the offer side evaluation in the primary
market, and the bid side evaluation in the secondary market. Under the
Reinvestment Plan, the Fund will pay the distributions to the Trustee which in
turn will purchase for the investor full and fractional Units of the Fund at the
price determined as of the close of business on the distribution day and will
add the Units to the investor's account and send the investor an account
statement reflecting the reinvestment. The Sponsors reserve the right to amend,
modify or terminate the reinvestment plan at any time without prior notice.
Investors holding Units in 'street name' should contact their broker, dealer or
financial institution if they wish to participate in the reinvestment plan. Only
income distributions may be reinvested; principal distributions will be paid in
cash.
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,
5
<PAGE>
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 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.
TAXES
The following summary describes some of the important income tax
consequences of holding Units, assuming that the investor is not a dealer,
financial institution or insurance company or other investor with special
circumstances. Investors should consult their tax advisers about an investment
in the Fund.
The Sponsors believe that individual investors will not be subject to any
state or local personal income taxes on the interest received by the Fund and
distributed to them. However, investors (including individuals) may be subject
to state and local taxes on any capital gains (or 'market discount' treated as
ordinary income) and to other state and local taxes (including corporate income
or franchise taxes, personal property or intangibles taxes, and estate or
inheritance taxes) on their Units or the income derived therefrom. In addition,
individual investors (and any other investors which are not subject to state and
local taxes on the interest income derived from the Fund) will probably not be
entitled to a deduction for state and local tax purposes for their share of the
fees and expenses paid by the Fund, for any amortized bond premium or for any
interest on money borrowed to purchase their Units. Investors should consult
their tax advisers regarding the state and local taxes that may result from an
investment in the Fund.
After the end of each calendar year, the Trustee will furnish to each
investor an annual statement containing information relating to the interest
received by the Fund on the Securities, the gross proceeds received by the Fund
from the disposition of any Security, and the fees and expenses paid by the
Fund. The Trustee will also furnish annual information returns to each investor
and to the Internal Revenue Service.
In the opinion of Davis Polk & Wardwell, special counsel for the Sponsors,
under existing law:
GENERAL TREATMENT OF THE FUND
The fund will not be taxed as a corporation for federal income tax purposes
or for New York State or City purposes, and each investor will be considered to
own directly a share of each Security in the Fund. Each investor will be
considered to have received the interest (and accrued the 'original issue
discount', if any) on his pro rata portion of each Security when interest is
received (or original issue discount is accrued) by the Fund regardless of
whether the interest is automatically reinvested in the Fund or used to pay Fund
expenses.
INCOME OR LOSS UPON DISPOSITION
Upon a disposition of all or part of an investor's pro rata portion of a
Security (by sale, exchange or redemption of the Security or his Units), an
investor will generally recognize capital gain or loss. However, gain from the
disposition will generally be ordinary income to the extent of any accrued
market discount. An investor will generally have
6
<PAGE>
market discount to the extent that his basis in a Security when he purchases a
Unit is less than its stated redemption price at maturity (or, in the case of a
Security issued with original issue discount, the issue price increased by
original issue discount that has accrued to previous holders). Investors should
consult their tax advisers in this regard.
The excess of a non-corporate investor's net long-term capital gains over
his net short-term capital losses may be subject to tax at a lower rate than
ordinary income. A capital gain or loss is long-term if the investment is held
for more than one year and short-term if held for one year or less. Because the
deduction of capital losses is subject to limitations, an investor may not be
able to deduct all of his capital losses.
INVESTOR'S BASIS IN THE BONDS
An investor's aggregate basis in the Securities will be equal to the cost
of his Units, including any sales charges and the organizational expenses borne
by the investor but excluding any amount paid for accrued interest, and adjusted
to reflect any accruals of 'original issue discount', 'acquisition premium' and
'bond premium'. Investors should consult their tax advisers in this regard.
ORIGINAL ISSUE DISCOUNT, ACQUISITION PREMIUM AND BOND PREMIUM
Original issue discount accrues in accordance with a constant yield method
based on a compounding of interest and is generally equal to the excess of a
Security's maturity price over its original issue price. Original issue discount
inclusions are reduced by accruals of acquisition premium. An investor will have
acquisition premium to the extent his basis in a Security when he purchases a
Unit is less than the maturity price but more than the issue price increased by
any original issue discount that has accrued to previous holders.
Generally, bond premium accruals on a bond will be based upon the excess of
an investor's basis in the Security at the time of purchasing a Unit over its
maturity price. If an investor has elected to amortize bond premium, which is an
election that applies to all debt obligations of an investor and that can be
revoked only with consent of the Internal Revenue Service, the amount amortized
offsets the investor's interest from the Security and reduces the investor's
basis. Investors should consult their tax advisers in this regard.
EXPENSES
An individual investor who itemizes deductions may deduct his pro rata
share of current ongoing Fund expenses only to the extent that such amount,
together with the investor's other miscellaneous deductions, exceeds 2% of his
adjusted gross income.
FOREIGN INVESTORS
Notwithstanding the foregoing, an investor that is a non-resident alien
individual or a foreign corporation that is not engaged in a U.S. trade or
business will generally not be subject to U.S. federal income taxes, including
withholding taxes, with respect to an investment in the Fund if certain
requirements are met, including, the certification of foreign status and other
matters. Under certain circumstances, withholding agents will file with the
Internal Reveue Service foreign person information returns. Investors should
consult their tax adivsers with respect to United States federal income tax
consequences of ownership of Units.
* * *
After the end of each calendar year, the Trustee will furnish to each
investor an annual statement containing information relating to 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 of any Security or the sale by the Fund of any Security), and the fees
and expenses paid by the Fund. The Trustee will also furnish annual information
returns to each investor and to the Internal Revenue Service.
The Sponsors believe that investors who are individuals will not be subject
to any state or local personal income taxes on the interest received by the Fund
and distributed to them. However, investors (including individuals) may be
subject to state and local taxes on any capital gains (or market discount
treated as ordinary income) derived from the Fund and to other state and local
taxes (including corporate income or franchise taxes, personal property or
intangibles taxes, and estate or inheritance taxes) on their Units or the income
derived therefrom. In addition, individual investors (and any other investors
which are not subject to state and local taxes on the interest income
7
<PAGE>
derived from the Fund) will probably not be entitled to a deduction for state
and local tax purposes for their share of the fees and expenses paid by the
Fund, for any amortized bond premium or for any interest on indebtedness
incurred to purchase or carry their Units. Therefore, even though the Sponsors
believe that interest income from the Fund is exempt from state and local
personal income taxes in all states, investors should consult their own tax
advisers with respect to state and local taxation.
RETIREMENT PLANS
This Series of Government Securities Income Fund may be well suited for
purchase by Individual Retirement Accounts ('IRAs'), Keogh plans, pension funds
and other qualified retirement plans, certain of which are briefly described
below. Generally, capital gains and income received in each of the foregoing
plans are exempt from Federal taxation. All distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible for
special 5 or 10 year averaging or tax-deferred rollover treatment. Investors in
IRAs, Keogh plans and other tax-deferred retirement plans should consult their
plan custodian as to the appropriate disposition of distributions. Investors
considering participation in any of these plans should review specific tax laws
related thereto and should consult their attorneys or tax advisors with respect
to the establishment and maintenance of any of these plans. These plans are
offered by brokerage firms, including the Sponsor of this Fund, and other
financial institutions. Fees and charges with respect to such plans may vary.
Retirement Plans for the Self-Employed--Keogh Plans. Units of the Fund may
be purchased by retirement plans established for self-employed individuals,
partnerships or unincorporated companies ('Keogh plans'). The assets of a Keogh
plan must be held in a qualified trust or other arrangement which meets the
requirements of the Code. Keogh plan participants may also establish separate
IRAs (see below) to which they may contribute up to an additional $2,000 per
year ($4,000 in a spousal account).
Individual Retirement Account--IRA. Any individual can make use of a
qualified IRA arrangement for the purchase of Units of the Fund. Any individual
(including one covered by an employer retirement plan) can make a contribution
in an IRA equal to the lesser of $2,000 ($4,000 in a spousal account) or 100% of
earned income; such investment must be made in cash. However, the deductible
amount an individual may contribute will be reduced if the individual's adjusted
gross income exceeds $25,000 (in the case of a single individual), $40,000 (in
the case of married individuals filing a joint return) or $200 (in the case of a
married individual filling a separate return). Certain transactions which are
prohibited under Section 408 of the Code will cause all or a portion of the
amount in an IRA to be deemed to be distributed and subject to tax at that time.
Unless nondeductible contributions were made in 1987 or a later year, all
distributions from an IRA will be treated as ordinary income but generally are
eligible for tax-deferred rollover treatment. Taxable distributions made before
attainment of age 59 1/2, except in the case of the participant's death or
disability or where the amount distributed is part of a series of substantially
equal periodic (at least annual) payments that are to be made over the life
expectancies of the participant and his or her beneficiary, are generally
subject to a surtax in an amount equal to 10% of the distribution.
Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing
plan for employees of a corporation may purchase Units of the Fund.
RECORDS AND REPORTS
The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Fund,
including a current list of the Securities and a copy of the Indenture, and
supplemental information on the operations of the Fund and the risks associated
with the Securities held by the Fund, which may be inspected by investors at
reasonable times during business hours.
With each distribution, the Trustee includes a statement of the interest
and any other receipts being distributed. Within five days after deposit of
Securities in exchange or substitution for Securities (or contracts) previously
deposited, the Trustee will send a notice to each investor, identifying both the
Securities removed and the replacement Securities deposited. The Trustee sends
each investor of record an annual report summarizing transactions in the Fund's
accounts and amounts distributed during the year and Securities held, the number
of Units outstanding and the Redemption Price at year end, the interest received
by the Fund on the Securities, the 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
8
<PAGE>
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.
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 Financial Statements have been audited by Deloitte & Touche LLP,
independent accountants, as stated in their opinion. They are 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.
9
<PAGE>
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 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 and thereafter to the extent additional
Units continue to be offered for sale to the public by means of this Prospectus,
Units will be distributed directly to the public by this Prospectus.
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. 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.
10
<PAGE>
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
SIX TO TEN YEAR MATURITIES
INITIAL OFFERING SALES CHARGE SCHEDULE
<TABLE>
<CAPTION>
SALES CHARGE
(GROSS UNDERWRITING PROFIT)
-------------------------------- PRIMARY MARKET
AS PERCENT OF AS PERCENT OF DEALER CONCESSION AS CONCESSION TO
OFFER SIDE PUBLIC NET AMOUNT PERCENT OF PUBLIC INTRODUCING
NUMBER OF UNITS OFFERING PRICE INVESTED OFFERING PRICE DEALERS
- ----------------------------------- ----------------- ------------- ----------------------- ------------------
<S> <C> <C> <C> <C>
Less than 500,000.................. 2.00% 2.041% 1.300% $ 14.40
500,000 - 999,999.................. 1.50 1.523 0.975 10.80
1,000,000 or more.................. 1.00 1.010 0.650 7.20
</TABLE>
SECONDARY MARKET SALES CHARGE SCHEDULE
<TABLE>
<CAPTION>
SALES CHARGE
(GROSS UNDERWRITING PROFIT)
--------------------------------
AS PERCENT OF AS PERCENT OF DEALER CONCESSION AS
BID SIDE PUBLIC NET AMOUNT PERCENT OF PUBLIC
NUMBER OF UNITS OFFERING PRICE INVESTED OFFERING PRICE
- ----------------------------------- ----------------- ------------- -----------------------
<S> <C> <C> <C> <C>
Less than 500,000.................. 2.25% 2.302% 1.463%
500,000 - 999,999.................. 1.75 1.781 1.138
1,000,000 or more.................. 1.25 1.266 0.813
</TABLE>
a-1
<PAGE>
GOVERNMENT SECURITIES INCOME FUND,
MONTHLY PAYMENT U.S. TREASURY SERIES - 25 (Laddered Maturities),
DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Government Securities Income Fund,
Monthly Payment U.S. Treasury Series - 25 (Laddered Maturities),
Defined Asset Funds:
We have audited the accompanying statement of condition of Government Securities
Income Fund, Monthly Payment U.S. Treasury Series - 25 (Laddered Maturities),
Defined Asset Funds, including the portfolio, as of February 28, 1997 and the
related statements of operations and of changes in net assets for the period
March 9, 1996 to February 28, 1997. These financial statements are the
responsibility of the Trustee. Our responsibility is to express an opinion on
these financial statements 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 statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Securities owned at
February 28, 1997, as shown in such portfolio, were confirmed to us by The Chase
Manhattan Bank, the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Trustee, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Government Securities Income
Fund, Monthly Payment U.S. Treasury Series - 25 (Laddered Maturities), Defined
Asset Funds at February 28, 1997 and the results of its operations and changes
in its net assets for the above-stated period in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
April 28, 1997
D-1
<PAGE>
GOVERNMENT SECURITIES INCOME FUND,
MONTHLY PAYMENT U.S. TREASURY SERIES - 25 (Laddered Maturities),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF FEBRUARY 28, 1997
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $52,722,555) (Note 1) $53,005,937
Accrued interest receivable 323,064
Cash - Principal 555,900
Deferred organization costs (Note 5) 48,497
Total trust property 53,933,398
LESS LIABILITIES:
Accrued Sponsors' fees $ 2,160
Advance from Trustee 124,221
Other liabilities (Note 5) 48,497
Due to Sponsor 4,174 179,052
NET ASSETS, REPRESENTED BY:
55,055,900 units of fractional undivided interest
outstanding (Note 3) 53,561,837
Undistributed net investment income 192,509 $53,754,346
UNIT VALUE ($53,754,346 / 55,055,900 units) $0.97636
</TABLE>
See Notes to Financial Statements.
D-2
<PAGE>
GOVERNMENT SECURITIES INCOME FUND,
MONTHLY PAYMENT U.S. TREASURY SERIES - 25 (Laddered Maturities),
DEFINED ASSET FUNDS
STATEMENT OF OPERATIONS
<TABLE><CAPTION>
March 9, 1996
to
February 28,
1997
<S> <C>
INVESTMENT INCOME:
Interest income $1,959,156
Trustee's fees and expenses (24,239)
Sponsors' fees (8,164)
Organizational costs (6,559)
Net investment income 1,920,194
UNREALIZED APPRECIATION OF INVESTMENTS 283,382
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,203,576
See Notes to Financial Statements.
</TABLE>
D-3
<PAGE>
GOVERNMENT SECURITIES INCOME FUND,
MONTHLY PAYMENT U.S. TREASURY SERIES - 25 (Laddered Maturities),
DEFINED ASSET FUNDS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE><CAPTION>
March 9, 1996
to
February 28,
1997
<S> <C>
OPERATIONS:
Net investment income $ 1,920,194
Unrealized appreciation of investments 283,382
Net increase in net assets resulting from operations 2,203,576
INCOME DISTRIBUTIONS TO HOLDERS (Note 2) (1,839,198)
CAPITAL SHARE TRANSACTIONS:
Issuance of 54,550,800 units 52,884,663
NET INCREASE IN NET ASSETS 53,249,041
NET ASSETS AT BEGINNING OF PERIOD 505,305
NET ASSETS AT END OF PERIOD $53,754,346
PER UNIT:
Income distributions during period $0.05388
Net asset value at end of period $0.97636
TRUST UNITS OUTSTANDING AT END OF PERIOD 55,055,900
See Notes to Financial Statements.
</TABLE>
D-4
<PAGE>
GOVERNMENT SECURITIES INCOME FUND,
MONTHLY PAYMENT U.S. TREASURY SERIES - 25 (Laddered Maturities),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator based on
bid side evaluations for the securities (see "How to Sell Units -
Trustee's Redemption of Units" in this prospectus, Part B), except
that value on March 9, 1996 was based upon offering side evaluations
at March 7, 1996, the day prior to the Date of Deposit. Cost of
securities at March 9, 1996 was also based on such offering side
evaluations. The cost of securities deposited subsequent to the
initial date of deposit are based on offering side evaluations at
dates of purchase. Gains or losses on sales of securities are
computed using the first-in, first-out method.
(b) The Fund is not subject to income taxes. Accordingly, no provision
for such taxes is required.
(c) Interest income is recorded as earned.
2. DISTRIBUTIONS
Net investment income is distributed to Holders each month. Receipts other
than interest, after deductions for redemptions and applicable expenses,
are distributed as explained in "Income and Distributions -Distributions"
in this Prospectus, Part B.
3. NET CAPITAL
Cost of 55,055,900 units at Dates of Deposit $54,365,770
Less sales charge 1,087,315
Net amount applicable to Holders 53,278,455
Unrealized appreciation of investments 283,382
Net capital applicable to Holders $53,561,837
4. INCOME TAXES
All fund items of income received, expenses paid, and realized gains and
losses on securities sold are attributable to the Holders, on a pro rata
basis, for Federal income tax purposes in accordance with the grantor trust
rules of the United States Internal Revenue Code.
At February 28, 1997, the cost of investment securities for Federal income
tax purposes was approximately equivalent to the cost as shown in the
Fund's portfolio.
D-5
<PAGE>
GOVERNMENT SECURITIES INCOME FUND,
MONTHLY PAYMENT U.S. TREASURY SERIES - 25 (Laddered Maturities),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized on a straight-line basis
over a period of five years. "Other liabilities" includes $48,497 payable
to the Trustee for reimbursement of costs related to the organization of
the Trust.
D-6
<PAGE>
GOVERNMENT SECURITIES INCOME FUND,
MONTHLY PAYMENT U.S. TREASURY SERIES - 25 (Laddered Maturities),
DEFINED ASSET FUNDS
PORTFOLIO
AS OF FEBRUARY 28, 1997
<TABLE><CAPTION>
Portfolio No. and Title of Face Interest
Securities Amount Rate Maturities Cost (1) Value(1)
<S> <C> <C> <C> <C> <C>
1. United States Treasury Notes $10,900,000 6.375% 08/15/02 $10,857,601 $10,888,555
2. United States Treasury Notes 10,900,000 5.750 08/15/03 10,424,395 10,500,188
3. United States Treasury Notes 10,900,000 5.875 02/15/04 10,460,335 10,533,760
4. United States Treasury Notes 10,900,000 6.500 05/15/05 10,812,263 10,865,229
5. United States Treasury Notes 10,900,000 5.625 02/15/06 10,167,961 10,218,205
TOTAL $54,500,000 $52,722,555 $53,005,937
(1) See Note 1 to Financial Statements.
</TABLE>
D-7
<PAGE>
AUTHORIZATION FOR REINVESTMENT
GOVERNMENT SECURITIES INCOME FUND
MONTHLY PAYMENT U.S. TREASURY SERIES 25
DEFINED ASSET FUNDS
/ / Yes, I want to participate in the Fund's Reinvestment Plan and purchase
additional Units or fractions of aditional Units of the Fund.
I hereby acknowledge receipt of the Prospectus for Government Securities
Income Fund, Monthly Payment U.S. Treasury Series 25 and authorize The Chase
Manhattan Bank to pay distributions on my Units as indicated below
(distributions to be reinvested will be paid for my account to The Chase
Manhattan Bank).
/ / I want to reinvest all monthly income distributions (including capital
gains) in additional Units of the Fund.
Please print or type
Name Registered Holder
Address
Registered Holder
(Two signatures required if
joint tenancy)
City State Zip Code
Unless you complete and return this form, all distributions to you from the
Monthly Payment U.S. Treasury Series 25 will be paid in cash.
This page is a self-mailer. Please complete the information above, cut
along the dotted line, fold along the lines on the reverse side, tape, and mail
with the Trustee's address displayed on the outside.
12345678
<PAGE>
BUSINESS REPLY MAIL NO POSTAGE
FIRST CLASS PERMIT NO. 644, NEW YORK, NY NECESSARY
IF MAILED
POSTAGE WILL BE PAID BY ADDRESSEE IN THE
GOVERNMENT SECURITIES INCOME FUND UNITED STATES
U.S. TREASURY SERIES--25
THE CHASE MANHATTAN BANK
RETAIL PROCESSING DEPARTMENT
BOWLING GREEN STATION
P.O. BOX 5179
NEW YORK, NY 10274-5179
- --------------------------------------------------------------------------------
(Fold along this line.)
- --------------------------------------------------------------------------------
(Fold along this line.)
<PAGE>
DEFINED
ASSET FUNDSSM
SPONSORS/UNDERWRITERS: GOVERNMENT SECURITIES
Merrill Lynch, INCOME FUND
Pierce, Fenner & Smith Incorporated Monthly Payment
Defined Asset Funds U.S. Treasury Series--25
P.O. Box 9051 (Laddered Maturities)
Princeton, NJ 08543-9051 A Unit Investment Trust
(609) 282-8500 This Prospectus does not contain all of
Smith Barney Inc. the information with respect to the
Unit Trust Department investment company set forth in its
388 Greenwich Street--23rd Floor registration statement and exhibits
New York, NY 10013 relating thereto which have been filed
(212) 816-4000 with the Securities and Exchange
PaineWebber Incorporated Commission, Washington, D.C. under the
1200 Harbor Boulevard Securities Act of 1933 and the
Weehawken, NJ 07087 Investment Company Act of 1940, and to
(201) 902-3000 which reference is hereby made.
Prudential Securities Incorporated ------------------------------
One New York Plaza No person is authorized to give any
New York, NY 10292 information or to make any
(212) 778-6164 representations with respect to this
Dean Witter Reynolds Inc. investment company not not contained in
Two World Trade Center--59th Floor this Prospectus; and any information or
New York, NY 10048 representation not contained herein must
(212) 392-2222 not be relied upon as having been
ADDITIONAL UNDERWRITERS: authorized.
First Montauk Securities Corp. ------------------------------
328 Newman Spring Road When Units of this Fund are no longer
Red Bank, NJ 07701 available, this Prospectus may be used
(908) 842-4700 as a preliminary prospectus for a future
EVALUATOR: series, and investors should note the
Kenny S&P Evaluation Services, following:
a division of J. J. Kenny Co., Inc. Information contained herein is subject
65 Broadway to amendment. A registration statement
New York, NY 10006 relating to securities of a future
Gruntal & Co. Incorporated series has been filed with the
14 Wall Street Securities and Exchange Commission.
New York, NY 10005 These securities may not be sold nor may
(212) 267-8800 offers to buy be accepted prior to the
TRUSTEE: time the registration statement becomes
The Chase Manhattan Bank effective.
Customer Service Retail Department This Prospectus does not constitute an
Bowling Green Station offer to sell or a solicitation of an
P.O. Box 5187 offer to buy securities in any state in
New York, NY 10274-5187 which such offer, solicitation or sale
1-800-323-1508 would be unlawful prior to registration
or qualification under the securities
laws of any such state.
15185--6/97
<PAGE>
GOVERNMENT SECURITIES INCOME FUND
DEFINED ASSET FUNDS--
CONTENTS OF REGISTRATION STATEMENT
This Post-Effective Amendment to the Registration Statement on Form S-6
comprises the following papers and documents:
The facing sheet of Form S-6.
The cross-reference sheet (incorporated by reference to the Registration
Statement on Form S-6 of Defined Asset Funds Municipal Insured Series, 1933 Act
File No. 33-54565).
The Prospectus.
The Signatures.
The following exhibits:
1.1.1--Form of Standard Terms and Conditions of Trust Effective as of
October 21, 1993 (incorporated by reference to Exhibit 1.1.1 to
the Registration Statement of Municipal Investment Trust Fund,
Multistate Series--48, 1933 Act File No. 33-50247).
4.1 --Consent of the Evaluator.
5.1 --Consent of independent accountants.
9.1 --Information Supplement (incorporated by reference to Exhibit 9.1
to Post Effective Amendment No. 4 to the Registration Statement
of Government Securities Income Fund, Freddie Mac Series 10, 1933
Act File No. 33-46142).
R-1
<PAGE>
GOVERNMENT SECURITIES INCOME FUND
MONTHLY PAYMENT U.S. TREASURY SERIES--25
DEFINED ASSET FUNDS
(LADDERED MATURITIES)
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
DEFINED ASSET FUNDS--GOVERNMENT SECURITIES INCOME FUND, MONTHLY PAYMENT U.S.
TREASURY SERIES--25 (LADDERED MATURITIES) (A UNIT INVESTMENT TRUST), CERTIFIES
THAT IT MEETS ALL OF THE REQUIREMENTS FOR EFFECTIVENESS OF THIS REGISTRATION
STATEMENT PURSUANT TO RULE 485(B) UNDER THE SECURITIES ACT OF 1933 AND HAS DULY
CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION STATEMENT TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED IN THE CITY
OF NEW YORK AND STATE OF NEW YORK ON THE 30TH DAY OF MAY, 1997.
SIGNATURES APPEAR ON PAGES R-3, R-4, R-5, R-6 AND R-7.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Smith Barney Inc.
has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Prudential
Securities Incorporated has signed this Registration Statement or Amendment to
the Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.
A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Merrill Lynch, Pierce, have been filed
Fenner & Smith Incorporated: under
Form SE and the
following 1933 Act
File
Number: 33-43466
and 33-51607
HERBERT M. ALLISON, JR.
BARRY S. FREIDBERG
EDWARD L. GOLDBERG
STEPHEN L. HAMMERMAN
JEROME P. KENNEY
DAVID H. KOMANSKY
DANIEL T. NAPOLI
THOMAS H. PATRICK
JOHN L. STEFFENS
DANIEL P. TULLY
ROGER M. VASEY
ARTHUR H. ZEIKEL
By 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>
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-4
<PAGE>
SMITH BARNEY INC.
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Smith Barney Inc.: have been filed
under the 1933 Act
File 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-5
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following 1933
the Board of Directors of Dean Witter Act File 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-6
<PAGE>
PAINEWEBBER INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Executive Committee of the Board the following 1933 Act File
of Directors of PaineWebber Number: 33-55073
Incorporated:
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-7
EXHIBIT 4.1
KENNY S&P EVALUATION SERVICES
A DIVISION OF J. J. KENNY CO., INC.
65 BROADWAY
NEW YORK, N.Y. 10006-2511
TELEPHONE (212) 770-4422
FAX 212/797-8681
May 30, 1997
Frank A. Ciccotto
Vice President
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Unit Investment Trust Division
P.O. Box 9051
Princeton, New Jersey 08543-9051
The Chase Manhattan Bank
1 Chase Manhattan Plaza--3B
New York, New York 10081
RE: GOVERNMENT SECURITIES INCOME FUND,
MONTHLY PAYMENT U.S. TREASURY SERIES--25, DEFINED ASSET FUNDS
Gentlemen:
We have examined the post-effective Amendment to the Registration Statement
File No. 333-00009 for the above-captioned trust. We hereby acknowledge that
Kenny S&P Evaluation Services, a division of J. J. Kenny Co., Inc. is currently
acting as the evaluator for the trust. We hereby consent to the use in the
Amendment of the reference to Kenny S&P Evaluation Services, a division of J. J.
Kenny Co., Inc. as evaluator.
You are hereby authorized to file copies of this letter with the Securities
and Exchange Commission.
Sincerely,
FRANK A. CICCOTTO
Exhibit 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee
of Government Securities Income Fund, Monthly Payment U.S. Treasury Series--25
(Laddered Maturities), Defined Asset Funds
We consent to the use in Post-Effective Amendment No. 1 to Registration
Statement No. 333-00009 of our opinion dated April 28, 1997 appearing in the
Prospectus, which is part of such Registration Statement, and to the reference
to us under the heading 'Auditors' in such Prospectus.
DELOITTE & TOUCHE LLP
New York, N.Y.
May 30, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1
<S>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-END> FEB-28-1997
<INVESTMENTS-AT-COST> 52,722,555
<INVESTMENTS-AT-VALUE> 53,005,937
<RECEIVABLES> 371,561
<ASSETS-OTHER> 555,900
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 53,933,398
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (179,052)
<TOTAL-LIABILITIES> (179,052)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 53,278,455
<SHARES-COMMON-STOCK> 55,055,900
<SHARES-COMMON-PRIOR> 505,100
<ACCUMULATED-NII-CURRENT> 192,509
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 283,382
<NET-ASSETS> 53,754,346
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,959,156
<OTHER-INCOME> 0
<EXPENSES-NET> (38,962)
<NET-INVESTMENT-INCOME> 1,920,194
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 283,382
<NET-CHANGE-FROM-OPS> 2,203,576
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,839,198)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 54,550,800
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 53,249,041
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
May 23, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We hereby represent that the Post-Effective Amendments to the registered
unit investment trusts described in Exhibit A attached hereto do not contain
disclosures which would render them ineligible to become effective pursuant to
Rule 485(b) under the Securities Act of 1933.
Very truly yours,
Davis Polk & Wardwell
Attachment
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
1933 ACT 1940 ACT
FUND NAME CIK FILE NO. FILE NO.
- --------- --- -------- --------
<S> <C> <C> <C>
DEFINED ASSET FUNDS-MUNICIPAL INSURED SERIES 2 939797 33-57883 811-2537
DEFINED ASSET FUNDS-MUNICIPAL FLIS 2 933617 33-56819 811-1777
DEFINED ASSET FUNDS- MPUSTS-25 DAF 893119 333-0000 811-2810
DEFINED ASSET FUNDS-IS-28 DAF 895589 33-64103 811-2295
DEFINED ASSET FUNDS-MPS-322 DAF 893502 333-0049 811-2295
DEFINED ASSET FUNDS-CONCEPT SER TELEGLOBAL TRUST 2 1000076 33-62265 811-3044
TOTAL: 6 FUNDS
</TABLE>
