<PAGE>
DEFINED
Asset FundsSM
Corporate
Income Fund
- ---------------------------------------------
MONTHLY PAYMENT
SERIES--316
A UNIT INVESTMENT TRUST
/ /DIVERSIFIED
/ /MONTHLY INCOME
/ /INVESTMENT GRADE
6.67%
ESTIMATED CURRENT RETURN AS OF
JANUARY 27, 1994
6.68%
ESTIMATED LONG TERM RETURN AS OF
JANUARY 27, 1994
TAX EXEMPT TO FOREIGN
HOLDERS WHEN CERTAIN
CONDITIONS ARE MET
Merrill Lynch,
Pierce, Fenner & Smith Inc.
Unit Investment Trusts
P.O. Box 9051
Princeton, N.J. 08543-9051
(609) 282-8500
<PAGE>
<PAGE>
INVESTMENT SUMMARY AS OF JANUARY 27, 1994
<TABLE>
<S> <C>
ESTIMATED CURRENT RETURN*
(based on Public Offering Price) 6.67%
ESTIMATED LONG TERM RETURN*
(based on Public Offering Price) 6.68%
PUBLIC OFFERING PRICE PER UNIT
(including 4.50% sales charge) $ 1,018.24**
FACE AMOUNT OF SECURITIES-- $ 8,000,000
INITIAL NUMBER OF UNITS***-- 8,000
SPONSORS' REPURCHASE PRICE AND
REDEMPTION PRICE PER UNIT****
(based on bid side evaluation) $ 967.42**
FRACTIONAL UNDIVIDED INTEREST IN
FUND REPRESENTED BY EACH UNIT-- 1/8,000TH
CALCULATION OF PUBLIC OFFERING
PRICE
Aggregate offering side
evaluation of Securities in
Fund......................... $ 7,779,375.00
---------------
Divided by 8,000 Units.......... $ 972.42
Plus sales charge of 4.50% of
Public Offering Price (4.712%
of net amount invested in
Securities)+................. 45.82
---------------
Public Offering Price per
Unit......................... $ 1,018.24
Plus accrued interest++......... 1.13
---------------
Total........................ $ 1,019.37
---------------
---------------
</TABLE>
<TABLE>
<S> <C>
MONTHLY INCOME DISTRIBUTIONS
First distribution to be paid on the
25th day of April, 1994 to Holders
of record on the 10th day of April,
1994............................... $ 1.99
Calculation of second and following
distributions, to be paid on the
25th day of each month:
Estimated net annual interest rate per
Unit times $1,000.................. $ 67.89
Divided by 12......................... $ 5.65
REDEMPTION PRICE PER UNIT LESS THAN:
Public Offering Price by........... $ 50.82
Sponsors' Initial Repurchase Price
by................................. $ 5.00
</TABLE>
PORTFOLIO AT A GLANCE--
DIVERSIFICATION--The Portfolio contains obligations of 14 issuers
representing corporate utilities and other issuers. Because of possible
maturity, sale or other disposition of Securities, the size, composition and
return of the Portfolio may change at any time.
INVESTMENT QUALITY--All 15 issues are investment grade. Standard & Poor's
rated 1 issue AAA, 4 issues AA, 9 issues A and 1 issue BBB+. Moody's rated 1
issue Aaa, 2 issues Aa, 11 issues A and 1 issue Baa. Fitch rated 2 issues AA and
5 issues A.
LONG-TERM MATURITIES--The issues have maturity dates ranging from 2023 to
2033.
CALL PROTECTION--Issuers are usually able to redeem bonds under optional
refunding and sinking fund provisions. Optional refunding redemptions, which may
redeem all or part of an issue, are in most cases initially at a premium, and
then in subsequent years at declining prices, but typically not below par value.
Approximately 31% of the aggregate face amount of the Debt Obligations are not
subject to call prior to maturity. Approximately 6% of the aggregate face amount
of the Debt Obligations are currently subject to optional refunding redemptions
at prices initially not less than 105.82% of par; approximately 63% of the Debt
Obligations are subject to optional refunding redemptions, but not before 1998,
and then at prices initially not less than 101.95% of par (see Portfolio). Bonds
are also generally subject to mandatory sinking fund redemptions at par over the
life of the issue and may also provide for redemption at par prior or in
addition to any optional or mandatory redemption dates or maturity, for example,
through operation of a maintenance and replacement fund, if proceeds are not
able to be used as contemplated, the project is condemned or sold, the project
is destroyed and insurance proceeds are used to redeem the bonds or in other
special circumstances.
- ------------
* Estimated Current Return represents annual interest income after
estimated annual expenses divided by the maximum public offering price including
a 4.50% maximum sales charge. Estimated Long Term return is the net annual
percentage return based on the yield on each underlying Debt Obligation weighted
to reflect market value and time to maturity or earlier call date. Estimated
Long Term return is adjusted for estimated expenses and the maximum offering
price but not for delays in the Fund's distribution of income. Estimated Current
Return shows current annual cash return to investors while Estimated Long Term
Return shows the return on Units held to maturity, reflecting maturities,
discounts and premiums on underlying Debt Obligations. Each figure will vary
with purchase price including sales charge, changes in Fund income and the
redemption, sale or other disposition of Debt Obligations in the Portfolio.
** Plus accrued interest.
*** The Sponsors may create additional Units during the offering period of
the Fund.
**** During the initial offering period, the Fund's Sponsors intend to offer
to purchase Units at prices based on the offer side value of the underlying
Securities. Thereafter, the Sponsors intend to maintain such a market based on
the bid side value of the underlying Securities which will be equal to the
Redemption Price.
+ The sales charge during the initial offering period and in the secondary
market will be reduced on a graduated scale in the case of quantity purchases.
The resulting reduction in the Public Offering Price will increase the effective
current and long term returns on a Unit.
++ Figure shown represents interest accrued on underlying Securities from
the Initial Date of Deposit to expected date of settlement (normally five
business days after purchase) for Units purchased on the Initial Date of
Deposit.
VOLUME PURCHASE DISCOUNT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INITIAL OFFERING PERIOD SECONDARY MARKET SALES
<S> <C> <C> <C>
SALES CHARGE AS SALES CHARGE AS
A PERCENTAGE OF THE OFFER SIDE A PERCENTAGE OF THE BID SIDE
NUMBER OF UNITS PUBLIC OFFERING PRICE NUMBER OF UNITS PUBLIC OFFERING PRICE
- ---------------------- ------------------------------ ---------------------- ------------------------------
Less than 250......... 4.50% Less than 250......... 5.50%
250 - 499............. 3.50 250 - 499............. 4.50
500 - 749............. 3.00 500 - 749............. 3.50
750 - 999............. 2.50 750 - 999............. 2.50
1,000 or more......... 2.00 1,000 or more......... 2.00
</TABLE>
<PAGE>
<PAGE>
DEFINED CORPORATE INCOME FUNDS
Our defined portfolios of corporate bonds offer investors a simple and
convenient way to earn monthly income. And by purchasing corporate Defined
Funds, investors not only avoid the problem of selecting corporate bonds by
themselves, but also gain the advantage of diversification by investing in bonds
of several different issuers.
MONTHLY INCOME
Even though the securities in the portfolio pay interest semi-annually or
annually, the Fund will make monthly distributions of net interest income.
REINVESTMENT OPTION
You can elect to automatically reinvest your distributions into a separate
portfolio of corporate bonds. Reinvesting helps to compound your income and
keeps your capital continuously working for you.
INVESTMENT GRADE QUALITY
Each bond in the Fund has been selected by investment professionals among
available investment grade bonds or those, in the opinion of Defined Asset Funds
research analysts, having comparable credit characteristics. Risk is further
reduced by purchasing bonds of a number of different issuers and types.
PROFESSIONAL SELECTION AND SUPERVISION
Each bond in the Fund has been selected by experienced buyers and market
analysts. Spreading your investment among different securities and issuers
reduces your risk, but does not eliminate it. The Fund is not actively managed.
However, the portfolio is regularly reviewed and a security can be sold if
retaining it could be detrimental to investors' interests.
A LIQUID INVESTMENT
Although not legally required to do so, the Sponsors have maintained a secondary
market for Defined Asset Funds for over 20 years. You can cash in your units at
any time. Your price is based on the market value of the Fund's securities at
that time as determined by an independent evaluator. Or, you can exchange your
investment for another Defined Fund at a reduced sales charge. There is never a
fee for cashing in your investment.
PRINCIPAL DISTRIBUTIONS
Principal from sales, redemptions and maturities of bonds in the Fund is
distributed to investors periodically.
RISK FACTORS
Unit price fluctuates and is affected by interest rates as well as the financial
condition of the issuers of the bonds.
- --------------------------------------------------------------------------------
Information contained herein is subject to completion or amendment. A
registration statement relating to the securities of the next Trust in the
series of Corporate Income Fund has been filed with the Securities and Exchange
Commission. The securities of that Trust may not be sold nor may offers to buy
be accepted prior to the time that registration statement becomes effective.
This brochure shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of these securities in any State in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such State.
<PAGE>
<PAGE>
PORTFOLIO OF CORPORATE INCOME FUND ON THE INITIAL DATE OF DEPOSIT,
MONTHLY PAYMENT SERIES--316, DEFINED ASSET FUNDS January 28, 1994
<TABLE>
<CAPTION>
Ratings of Issues
Standard & Moody's Fitch
Portfolio No. and Poor's Investors Investors
Securities Contracted for Corp. Service Service Face Amount Coupon Maturities
<C> <S> <C> <C> <C> <C> <C> <C>
---------- ---------- --------- ------------ ------ -----------
1. Aetna Life and Casualty Company, AA- A1 NR $ 500,000 7.250 % 8/15/23
Debentures
2. Atlantic City Electric Company, First A- A3 A+ 500,000 7.000 8/01/28
Mortgage Bonds
3. BellSouth Telecommunications AAA Aaa NR 500,000 6.750 10/15/33
Incorporated, Debentures
4. CNA Financial Company, Debentures A+ A1 NR 500,000 7.250 11/15/23
5. Duke Power Company, First and Refunding AA- Aa2 AA 500,000 6.750 8/01/25
Mortgage Bonds
6. International Paper Company, Debentures A- A3 NR 500,000 6.875 11/01/23
7. Loews Corporation, Senior Notes AA- A1 AA 500,000 7.000 10/15/23
8. New York Telephone Company, Debentures A A2 A+ 500,000 7.000 8/15/25
9. Northern Telecom Limited, Notes A A2 NR 500,000 6.875 9/01/23
10. Pacific Gas & Electric Company, First and A A1 A 500,000 6.750 10/01/23
Refunding Mortgage Bonds, Series 93-F
11. Philadelphia Electric Company, First and BBB+ Baa1 A- 1,000,000 7.250 11/01/24
Refunding Mortgage Bonds
12. Seagram Company Limited, Debentures A A2 NR 500,000 6.875 9/01/23
13. Southwestern Bell Telephone Company, A+ A1 NR 500,000 6.625 9/01/24
Debentures
14. US West Communications Incorporated, AA- Aa3 NR 500,000 6.875 9/15/33
Debentures
15. Virginia Electric & Power Company, First A A2 A+ 500,000 7.000 1/01/24
and Refunding Mortgage Bonds
------------
$ 8,000,000
------------
------------
<CAPTION>
Optional
Refunding
Redemptions (1)
<C> <S><C>
---------------------
1. --
2. Currently@ 105.82
3. 10/15/03@ 103.50
4. --
5. 8/1/98@ 102.68
6. --
7. 10/15/03@ 102.39
8. 8/15/03@ 102.34
9. --
10. 12/01/03@ 102.74
11. 11/01/98@ 104.71
12. --
13. 9/01/03@ 102.19
14. 9/15/03@ 101.95
15. 1/01/04@ 102.82
</TABLE>
- ---------------
NOTES
(1) Bonds are first subject to optional redemptions (which may be exercised in
whole or in part) on the dates and at the prices indicated under the
Optional Refunding Redemptions column in the table. In subsequent years
Securities are redeemable at declining prices, but typically not below par
value. Some issues may be subject to sinking fund redemption or
extraordinary redemption without premium prior to the dates shown.
Certain bonds may provide for redemption at par prior or in addition to any
optional or mandatory redemption dates or maturity, for example, through
the operation of a maintenance and replacement fund, if proceeds are not
able to be used as contemplated, the project is condemned or sold, the
project is destroyed and insurance proceeds are used to redeem the bonds or
in other special circumstances.
Sinking fund redemptions are all at par and generally redeem only part of
an issue. Some of the Securities have mandatory sinking funds which contain
optional provisions permitting the issuer to increase the principal amount
of Securities called on a mandatory redemption date. The sinking fund
redemptions with optional provisions may, and optional refunding
redemptions generally will, occur at times when the redeemed Securities
have an offering side evaluation which represents a premium over par. To
the extent that the Securities were acquired at a price higher than the
redemption price, this will represent a loss of capital when compared with
the original Public Offering Price of the Units. Monthly distributions will
generally be reduced by the amount of the income which would otherwise have
been paid with respect to redeemed Securities and there will be distributed
to Holders any principal amount and premium received on such redemption
after satisfying any redemption requests received by the Fund. The
estimated current return and estimated long term return in this event may
be affected by redemptions. The tax effect on Holders of redemptions and
related distributions is described under Taxes.
---------------------------------------------
All Securities are represented entirely by contracts to purchase such
Securities, which were entered into on January 27, 1994. All contracts are
expected to be settled by the initial settlement date for the purchase of
Units.
14690-1/94
<PAGE>
<PAGE>
