PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for
Municipal Obligations Fund, a portfolio of Money Market Obligations
Trust II. The Report covers the six-month period ended July 31, 1997.
It begins with the fund's investment review, followed by a complete
list of holdings and the financial statements.
The fund continues to put your ready cash to work pursuing daily
tax-free income and stability of principal* while giving you easy
access to your money. At the end of the period, the fund's assets were
invested in a highly diversified portfolio of short-term securities
issued by municipalities across 31 states.
During the six-month reporting period, tax-free dividends paid to
shareholders of Institutional Shares, Institutional Service Shares and
Institutional Capital Shares totaled $0.02 per share.** Net assets in
the
fund reached $231.6 million at the period's end.
Thank you for putting your cash to work through Municipal Obligations
Fund. We welcome your questions and comments.
Sincerely,
[Graphic]
J. Christopher Donahue
President
September 15, 1997
* Although money market funds seek to maintain a stable net asset
value of $1.00 per share, there is no assurance that they will be
able to do so. An investment in the fund is neither insured nor
guaranteed by the U.S.
government.
** Income may be subject to the federal alternative minimum tax and state
and local taxes.
INVESTMENT REVIEW
Municipal Obligations Fund is invested in high quality, short-term,
tax-exempt debt securities. Typical security types include, but are
not limited to: commercial paper, variable rate demand notes, and
fixed rate notes. For the six-month reporting period ended July 31,
1997, the net assets of the fund increased from $159.6 million to
$231.6 million while the 7-day net yield for the fund's Institutional
Shares, Institutional Service Shares and Institutional Capital Shares
increased from 3.50% to 3.69%, 3.25% to 3.44% and 3.38% to 3.57%,
respectively.* The effective average maturity of the Fund on July 31,
1997 was 37 days.
Interest rates in the tax-exempt money markets over the reporting
period were dictated by the actions of the Federal Reserve Board (the
"Fed"), as well as significant supply and demand imbalances. Yields on
variable rate demand notes (VRDNs), which comprise 50% or more of the
fund's assets, started February at 3.25% and traded in a tight range
between 3.25% and 3.30% until the end of the month. In the first half
of March, moderate cash flows forced yields on VRDNs down to 3.05%,
before they rebounded to close the quarter at 3.45%. Throughout the
first quarter, VRDNs rates were expensive compared to taxable rates,
mainly due to strong VRDNs demand. VRDNs rates averaged 3.28%, which
was only 63% of taxable repurchase rates.
Until late February investors shrugged off strong economic numbers,
expecting friendly inflation data to keep the Fed from raising
interest rates. Fed Chairman Alan Greenspan's Humphrey Hawkins
testimony on February 27 ended these expectations as the Fed signaled
the possible need for further Fed tightenings to slow the economy and
lower the probability of future inflation. In late March, the Fed
increased the Federal Funds rate by 25 basis points. Correspondingly
VRDNs rates moved sharply higher from mid-March to late April,
reaching a period high of 4.60%. VRDNs rates were also influenced by
heavy tax related redemptions in April. VRDNs yields stayed at high
levels throughout the second quarter. This resulted in an average
weekly rate of 3.93% for the quarter, an increase of 65 basis points
above the average for the first quarter. VRDNs levels were also very
cheap to taxables, averaging 75% of the taxable repurchase rates.
As investors became more confident that the economy could continue its
pattern of moderate economic growth coupled with low inflation, the
gradual rate decline that started in mid-May accelerated. Yields on
VRDNs dropped sharply in July to end the reporting period at 3.60%.
Throughout the period, the target average maturity for the fund
remained in the 40-60 day range, reflecting a neutral position
regarding Fed policy. As long as inflation remains benign, the Fed
should be content to sit on the sidelines until confronted with signs
of overriding strength or weakness in economic growth. The average
maturity will continue to be managed in accordance with our
expectations for stable monetary policy near term. Nevertheless we
continue to watch market developments in order to best serve our
municipal money market clients.
* Past performance is not indicative of future results. Yield will vary.
MUNICIPAL OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(A) SHORT-TERM MUNICIPALS--99.4%
ARKANSAS--1.9%
<C> <S> <C>
$ 1,000,000 Arkadelphia, AR, Industrial Development Revenue Bonds
(Series 1996) Weekly VRDNs (Siplast, Inc.)/
(Den Danske Bank A/S LOC) $ 1,000,000
3,500,000 Arkansas Development Finance Authority, Single Family Mortgage
Revenue Bonds (1997 Series D), 4.05% TOBs, Mandatory
Tender 7/1/1998 3,500,000
Total 4,500,000
COLORADO--3.2%
3,375,000 Colorado Municipal Securities Trust, Series 1996B Weekly VRDNs
(Colorado Health Facilities Authority)/(MBIA INS)/
(Norwest Bank Minnesota, Minneapolis LIQ) 3,375,000
4,000,000 Denver (City & County), CO, Airport System Subordinate Revenue
Bonds (Series 1990B), 3.80% CP (Sanwa Bank Ltd., Osaka LOC),
Mandatory Tender 8/11/1997 4,000,000
Total 7,375,000
DELAWARE--4.3%
10,000,000 Delaware EDA, IDRB (Series 1996A), 3.75% CP (Delaware City
Waste Recovery)/(Canadian
Imperial Bank of Commerce, Toronto LOC),
Mandatory Tender 8/12/1997 10,000,000
DISTRICT OF COLUMBIA--1.0%
2,400,000 District of Columbia Housing Finance Agency, Multi-Family Housing
Revenue Bonds (1995 Series A) Weekly VRDNs (Tyler House)/
(PNC Bank, N.A. LOC) 2,400,000
ILLINOIS--3.9%
300,000 Chicago O'Hare International Airport, Special Facility Revenue
Bonds
(Series 1990) Weekly VRDNs (Compagnie Nationale Air France
Project)/(Societe Generale, Paris LOC) 300,000
1,400,000 Illinois Development Finance Authority, (Series 1989) Weekly
VRDNs
(Addison 450 Limited Partnership)/(American National Bank,
Chicago LOC) 1,400,000
</TABLE>
MUNICIPAL OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
ILLINOIS-- CONTINUED
$1,800,000 Illinois Development Finance Authority, Industrial Development
Revenue Bonds (Series 1996) Weekly VRDNs (Bimba
Manufacturing Co.)/(Harris Trust & Savings Bank, Chicago LOC) $ 1,800,000
1,000,000 Illinois Development Finance Authority, Sewerage Facility
Revenue
Bonds (Series 1993) Weekly VRDNs (The NutraSweet Company)/
(Monsanto Co. GTD) 1,000,000
4,000,000 Illinois Housing Development Authority, (1997 Subseries B-2),
4.15% TOBs, Mandatory Tender 7/7/1998 4,000,000
600,000 Southwestern Illinois Development Authority, (Series 1991)
Weekly
VRDNs (Robinson Steel Co.)/(American National Bank,
Chicago LOC) 600,000
Total 9,100,000
INDIANA--1.4%
1,200,000 Indiana Economic Development Commission, Economic Development
Revenue Bonds (Series 1988) Daily VRDNs (Shadeland Avenue
Associates)/(Credit Commercial De France, Paris LOC) 1,200,000
2,000,000 Richmond, IN, Economic Development Revenue Bonds (Series 1996)
Weekly VRDNs (Holland Colors Americas, Inc. Project)/(Bank One,
Indianapolis, IN LOC) 2,000,000
Total 3,200,000
KENTUCKY--0.4%
1,000,000 Graves County, KY, School Building Revenue Bonds (Series 1988)
Weekly VRDNs (Seaboard Farms Project)/(Bank of New York,
New York LOC) 1,000,000
MAINE--1.7%
4,000,000 Jay, ME, Solid Waste Disposal Revenue Bonds, 4.20% TOBs
International Paper Co.), Optional Tender 6/1/1998 4,000,000
MARYLAND--2.3%
1,400,000 Carroll County, MD, Variable Rate Economic Development Refunding
Revenue Bonds (Series 1995B) Weekly VRDNs (Evapco, Inc.
Project)/
(Nationsbank of Maryland, N.A. LOC) 1,400,000
</TABLE>
MUNICIPAL OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
MARYLAND-- CONTINUED
$2,600,000 Maryland State Community Development Administration,
(Series 1990A) Weekly VRDNs (College Estates)/(First National
Bank
of Maryland, Baltimore LOC) $ 2,600,000
1,400,000 Montgomery County, MD Weekly VRDNs (Information Systems and
Networks Corp.)/(PNC Bank, N.A. LOC) 1,400,000
Total 5,400,000
MINNESOTA--1.3%
1,000,000 Maplewood, MN, (Series 1997) Weekly VRDNs (Camada Limited
Partnership)/(Norwest Bank Minnesota, Minneapolis LOC) 1,000,000
2,000,000 White Bear Lake, MN, (Series 1997), 4.5475% TOBs (Century
Townhomes)/(Westdeutsche
Landesbank Girozentrale INV),
Mandatory Tender 6/1/1998 2,000,000
Total 3,000,000
MISSISSIPPI--4.8%
1,168,000 Greenville, MS IDA Weekly VRDNs (Mebane Packaging Corp.)/
(First Union National Bank, Charlotte, NC LOC) 1,168,000
4,500,000 Mississippi Business Finance Corp., (Series 1995) Weekly VRDNs
(Mississippi Baking Company LLC Project)/(First National Bank of
Maryland, Baltimore LOC) 4,500,000
5,400,000 Mississippi Business Finance Corp., Series 1995 Weekly VRDNs
(Schuller International, Inc.)/(Bank of New York, New York LOC) 5,400,000
Total 11,068,000
MISSOURI--0.8%
1,900,000 Missouri State HEFA, (Series 1996D), 4.50% TRANs
(Rockwood R-VI School District), 9/8/1997 1,901,143
NEBRASKA--2.4%
2,850,000 Nebraska Investment Finance Authority, (Series 1997)
Weekly VRDNs (Transcrypt International, Inc.)/(Norwest Bank
Minnesota, Minneapolis LOC) 2,850,000
2,600,000 Stanton County, NE, IDRB (Series 1996) Weekly VRDNs
(Nucor Corporation)/(Nucor Corporation GTD) 2,600,000
Total 5,450,000
</TABLE>
MUNICIPAL OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
NEVADA--0.3%
$ 650,000 Nevada State Department of Community & Industrial Development
Weekly VRDNs (Kinplex Company Project)/(Credit Commercial
De France, Paris LOC) $ 650,000
NEW HAMPSHIRE--2.2%
5,100,000 New Hampshire Business Finance Authority, PCR Bonds (Series A),
3.90% CP (New England Power Co.), Mandatory Tender 8/15/1997 5,100,000
NEW JERSEY--1.1%
2,515,374 Camden County, NJ, (Series 1997A), 4.00% BANs, 2/10/1998 2,517,935
NEW YORK--6.8%
1,547,250 Geneva, NY, 4.125% BANs, 1/15/1998 1,550,145
2,134,000 Groton Central School District, NY, 4.125% BANs, 1/21/1998 2,138,137
4,000,000 New York City Housing Development Corp., Multifamily Mortgage
Revenue Bonds (1995 Series A-1) Weekly VRDNs (400 West 59th Street
Development)/(Bayerische Hypotheken-Und
Wechsel-Bank Ag LOC)
4,000,000
4,000,000 New York City, NY, (Series K), 4.50% Bonds, 8/1/1997 4,000,000
1,000,000 Royalton-Hartland, NY CSD, 4.50% BANs, 8/15/1997 1,000,184
3,000,000 Sodus Central School District, NY, 4.00% BANs, 2/4/1998 3,002,951
Total 15,691,417
NORTH CAROLINA--2.6%
6,000,000 Person County, NC Industrial Facilities & Pollution Control
Financing
Authority Daily VRDNs (Carolina Power & Light Co.)/
(Fuji Bank, Ltd., Tokyo LOC) 6,000,000
OHIO--2.6%
4,000,000 Brookville, OH, (Series 1988) Weekly VRDNs (Green Tokai)/
(Bank of Tokyo-Mitsubishi Ltd. LOC) 4,000,000
2,000,000 Ohio HFA, Multifamily Housing Revenue Bonds, (Series 1997),
4.76% TOBs (Wind River Apartments)/(Republic National Bank
of New York INV), Mandatory Tender 12/1/1997 2,000,000
Total 6,000,000
</TABLE>
MUNICIPAL OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
OKLAHOMA--3.1%
$ 6,000,000 Broken Arrow, OK EDA Weekly VRDNs (Blue Bell Creameries)/
(Banque Nationale de Paris LOC) $ 6,000,000
1,145,000 Tulsa, OK International Airport, Variable Rate Certificates
(Series 1997 B-1) Weekly VRDNs (MBIA INS)/(Bank of America
NT and SA, San Francisco LIQ) 1,145,000
Total 7,145,000
OREGON--1.1%
1,000,000 Oregon State Housing and Community Services Department,
(Series G), 4.05% TOBs, Mandatory Tender 8/1/1997 1,000,000
755,000 Oregon State, Economic Development Revenue Bonds (Series 1988C)
Weekly VRDNs (Jepco Development Inc.)/
(Wells Fargo Bank, N.A. LOC) 755,000
825,000 Oregon State, Economic Development Revenue Bonds (Series1988B)
Weekly VRDNs (Domaine Drouhin Oregon, Inc.)/
(Wells Fargo Bank, N.A. LOC) 825,000
Total 2,580,000
PENNSYLVANIA--3.6%
1,290,000 Carbon County, PA IDA, Resource Recovery Bonds (Series B), 3.80%
CP (Panther Creek)/(National Westminster Bank, PLC, London LOC),
Mandatory Tender 10/20/1997 1,290,000
3,000,000 Clinton County, PA IDA, Solid Waste Disposal Revenue Bonds
(Series 1992A), 3.75% TOBs (International Paper Co.),
Optional Tender 1/15/1998 3,000,000
3,885,000 Pennsylvania Housing Finance Authority, 3.85% TOBs
(First National Bank of Chicago LIQ), Optional Tender 10/1/1997 3,885,000
100,000 Pennsylvania State Higher Education Assistance Agency Weekly
VRDNs (Fuji Bank, Ltd., Tokyo LOC) 100,000
Total 8,275,000
SOUTH CAROLINA--10.0%
10,000,000 Berkeley County, SC, (Series 1996A) Weekly VRDNs
(Nucor Corporation)/(Nucor Corporation GTD) 10,000,000
</TABLE>
MUNICIPAL OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
SOUTH CAROLINA-- CONTINUED
$5,000,000 Berkeley County, SC, (Series 1997) Weekly VRDNs
(Nucor Corporation)/(Nucor Corporation GTD) $ 5,000,000
650,000 South Carolina Job Development Authority, (Series 1987) Weekly
VRDNs (Jewish Community Center)/
(Bank of Tokyo-Mitsubishi Ltd. LOC) 650,000
250,000 South Carolina Job Development Authority, (Series 1988A)
Weekly VRDNs (Kent Manufacturing Company)/
(Credit Commercial De France, Paris LOC) 250,000
350,000 South Carolina Job Development Authority, (Series 1988B)
Weekly VRDNs (Seacord Corporation)/
(Credit Commercial De France, Paris LOC) 350,000
550,000 South Carolina Job Development Authority, (Series 1990) Weekly
VRDNs (NMFO Associates)/(Wachovia Bank & Trust Co. LOC) 550,000
1,100,000 South Carolina Job Development Authority, (Series 1990) Weekly
VRDNs (Old Claussen's Bakery)/(Wachovia Bank & Trust Co. LOC) 1,100,000
650,000 South Carolina Job Development Authority, (Series 1990) Weekly
VRDNs (Rice Street Association)/(Wachovia Bank & Trust Co. LOC) 650,000
1,105,000 South Carolina Job Development Authority, (Series B) Weekly
VRDNs
(Osmose Wood Preserving)/(Credit Commercial De France, Paris LOC) 1,105,000
3,410,000 York County, SC IDA, Industrial Development Revenue Bonds
(Series1989) Weekly VRDNs (Sediver Inc)/
(Banque Nationale de Paris LOC) 3,410,000
Total 23,065,000
SOUTH DAKOTA--4.1%
9,465,000 South Dakota Housing Development Authority, Homeownership
Mortgage Bonds (1997 Series E) Weekly VRDNs (Westdeutsche
Landesbank Girozentrale LIQ) 9,465,000
</TABLE>
MUNICIPAL OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
TENNESSEE--3.5%
$1,500,000 Cheatham County, TN IDB, (Series 1997B) Weekly VRDNs
(Triton Boat Co.)/(First American National Bank, Nashville, TN $ 1,500,000
LOC)
300,000 Collierville, TN IDB, Industrial Development Revenue Bonds
(Series 1994) Weekly VRDNs (Ardco, Inc.)/(Harris Trust & Savings
Bank, Chicago LOC) 300,000
200,000 Jackson, TN IDB, Solid Waste Facility Bonds (Series 1995) Weekly
VRDNs (Florida Steel Corp.)/(Nationsbank, N.A., Charlotte LOC) 200,000
1,800,000 Knox County, TN IDB, (Series 1996) Weekly VRDNs
(Health Ventures, Inc. Project)/(SunTrust Bank, Nashville LOC) 1,800,000
3,200,000 Oak Ridge, TN IDB, Solid Waste Facility Bonds (Series 1996)
Weekly
VRDNs (M4 Environmental L.P. Project)/(SunTrust Bank, Atlanta 3,200,000
LOC)
1,000,000 South Pittsburg, TN IDB, (Series 1996) Weekly VRDNs
(Lodge Manufacturing Co. Project)/(SunTrust Bank, Nashville LOC) 1,000,000
Total 8,000,000
TEXAS--17.3%
8,000,000 Brazos River Authority, TX, (Series 1996C) Daily VRDNs
(Texas Utilities Electric Co.)/(AMBAC INS)/
(Bank of New York, New York LIQ) 8,000,000
10,100,000 Gulf Coast, TX Waste Disposal Authority, (Series 1993)
Daily VRDNs (Amoco Corp.) 10,100,000
5,500,000 Gulf Coast, TX Waste Disposal Authority, (Series 1994)
Daily VRDNs (Amoco Corp.) 5,500,000
16,500,000 Harris County, TX HFDC, Unit Priced Demand Adjustable Revenue
Bonds (Series 1997B) Daily VRDNs (St. Luke's Episcopal
Hospital)/
(Morgan Guaranty Trust Co., New York, Nationsbank of Texas,
N.A. and Toronto-Dominion Bank LIQs) 16,500,000
Total 40,100,000
</TABLE>
MUNICIPAL OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
UTAH--0.3%
$ 800,000 Utah State Board of Regents, Student Loan Revenue Bonds
(Series 1993A) Weekly VRDNs (Student Loan Marketing
Association LOC) $ 800,000
VIRGINIA--6.8%
7,000,000 Alexandria, VA Redevelopment and Housing Authority Weekly
VRDNs (Crystal City Apartments)/(Safeco Insurance Co. of America
INS)/(Barclays Bank PLC, London LIQ) 7,000,000
4,000,000 Halifax, VA IDA, MMMs, PCR, 3.85% CP (Virginia Electric Power
Co.),
Mandatory Tender 8/13/1997 4,000,000
2,500,000 Richmond, VA Redevelopment & Housing Authority Weekly VRDNs
(Richmond, VA Red Tobacco Row)/(Bayerische Landesbank
Girozentrale LOC) 2,500,000
2,160,000 Richmond, VA Redevelopment & Housing Authority, (Series B-5)
Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische
Landesbank Girozentrale LOC) 2,160,000
Total 15,660,000
WASHINGTON--3.2%
7,500,000 Port of Moses Lake, WA Public Corp., Industrial Revenue Bonds
(Series 1997) Weekly VRDNs (National Frozen Foods Corp.
Project)/
(Bank of America NT and SA, San Francisco LOC) 7,500,000
WEST VIRGINIA--0.5%
1,100,000 Fayette County, WV, Solid Waste Disposal Facility Revenue Bonds
(Series 1995) Weekly VRDNs (Georgia-Pacific Corp.)/
(Industrial Bank of Japan Ltd., Tokyo LOC) 1,100,000
</TABLE>
MUNICIPAL OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
WISCONSIN--0.9%
$ 2,100,000 Sun Prairie, WI Area School District, 4.25% TRANs, 8/22/1997 $ 2,100,536
TOTAL SHORT-TERM MUNICIPALS 230,144,031
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $ 230,144,031
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 81.5%
of the portfolio as calculated based upon total portfolio market
value.
(a) The Fund may only invest in securities rated in one of the two
highest short-term rating categories by nationally recognized
statistical rating organizations ("NRSROs") or unrated securities
of comparable quality. An NRSRO's two highest rating categories
are determined without regard for sub-categories and gradations.
For example, securities rated SP-1+, SP-1 or SP-2 by Standard &
Poor's Corporation, MIG-1, or MIG-2 by Moody's Investors Service,
Inc., F-1+, F-1, and F-2 by Fitch Investors Service, Inc. are all
considered rated in one of the two highest short-term rating
categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The Fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security.
At July 31 1997, the portfolio securities were rated as follows:
Tier Rating Percent Based on Total Market Value (Unaudited)
FIRST TIER SECOND TIER
95.65% 4.35%
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($231,576,359) at July 31, 1997.
MUNICIPAL OBLIGATIONS FUND
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation
BANs --Bond Anticipation Notes
CP --Commercial Paper
CSD --Central School District
EDA --Economic Development Authority
GTD --Guaranty
HEFA --Health and Education Facilities Authority
HFA --Housing Finance Authority
HFDC --Health Facility Development Corporation
IDA --Industrial Development Authority
IDB --Industrial Development Bond
IDRB --Industrial Development Revenue Bond
INS --Insured
INV --Investment Agreement
LIQ --Liquidity Agreement
LOC --Letter of Credit
MBIA --Municipal Bond Investors Assurance
MMMs --Money Market Municipals
PCR --Pollution Control Revenue
PLC --Public Limited Company
TOBs --Tender Option Bonds
TRANs --Tax and Revenue Anticipation Notes
VRDNs --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $230,144,031
Cash 805,571
Income receivable 1,234,185
Total assets 232,183,787
LIABILITIES:
Income distribution payable $ 594,038
Accrued expenses 13,390
Total liabilities 607,428
NET ASSETS for 231,552,030 shares outstanding $231,576,359
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$215,384,782 / 215,360,453 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$8,738,818 / 8,738,818 shares outstanding $1.00
INSTITUTIONAL CAPITAL SHARES:
$7,452,759 / 7,452,759 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL OBLIGATIONS FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JULY 31, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 3,710,652
EXPENSES:
Investment advisory fee $ 198,907
Administrative personnel and services fee 91,722
Custodian fees 15,127
Transfer and dividend disbursing agent fees and expenses 27,097
Directors'/Trustees' fees 1,675
Auditing fees 6,468
Legal fees 2,199
Portfolio accounting fees 40,687
Shareholder services fee -- Institutional Shares 231,590
Shareholder services fee -- Institutional Service Shares 6,444
Shareholder services fee -- Institutional Capital Shares 10,517
Share registration costs 21,644
Printing and postage 9,095
Insurance premiums 2,002
Miscellaneous 1,583
Total expenses 666,757
Waivers and reimbursements --
Waiver of investment advisory fee $ (198,907) Waiver of
shareholder services fee -- Institutional Shares (231,590) Waiver
of shareholder services fee -- Institutional Capital Shares
(6,310) Reimbursement of other operating expenses by the adviser
(34,589)
Total waivers and reimbursements (471,396)
Net expenses 195,361
Net investment income $ 3,515,291
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
(UNAUDITED) JANUARY 31,
JULY 31, 1997 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 3,515,291 $ 6,313,403
Net realized gain (loss) on investments -- (32,313)
Change in net assets resulting from 3,515,291 6,281,090
operations
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (3,283,769) (6,272,384)
Institutional Service Shares (90,073) (4)
Institutional Capital Shares (141,449) (4,848)
Class C Shares -- (36,167)
Change in net assets resulting from
distributions to
shareholders (3,515,291) (6,313,403)
CAPITAL CONTRIBUTION-- -- 32,313
SHARE TRANSACTIONS--
Proceeds from sale of shares 1,962,357,559 3,319,509,601
Net asset value of shares issued to
shareholders in payment of
distributions declared 771,097 1,279,467
Cost of shares redeemed (1,891,114,075) (3,298,316,597)
Change in net assets resulting from 72,014,581 22,472,471
share transactions
Change in net assets 72,014,581 22,472,471
NET ASSETS:
Beginning of period 159,561,778 137,089,307
End of period $ 231,576,359 $ 159,561,778
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS -- INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JULY 31, YEAR ENDED
JANUARY 31,
1997 1997 1996 1995 1994(A)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.04 0.04 0.03 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.04) (0.04) (0.03) (0.02)
Distributions from net realized gains -- -- (0.00)** -- --
(loss)
TOTAL DISTRIBUTIONS (0.02) (0.04) (0.04) (0.03) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.80% 3.56% 4.03% 3.04% 2.46%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.18%* 0.18% 0.18% 0.15% 0.13%*
Net investment income 3.54%* 3.48% 3.95% 2.86% 2.53%*
Expense waiver/reimbursement(c) 0.49%* 0.20% 0.12% 0.16% 0.38%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $215,385 $159,561 $135,120 $93,595 $350,975
</TABLE>
* Computed on an annualized basis.
** Amount represents less than $0.0001 per share.
(a) Reflects operations for the period from February 8, 1993 (date of
initial public investment) to January 31, 1994.
(b) Based on net asset value, which does not reflect the sales charge
or contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense
and net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS -- INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
JULY 31, JANUARY 31,
1997 1997(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
TOTAL RETURN(B) 1.67% 3.31%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.43%* 0.43%*
Net investment income 3.49%* 3.08%*
Expense waiver/reimbursement(c) 0.24% * 0.21%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 8,739 $ 0.30
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from February 1, 1996 (date of
initial public offering) to January 31, 1997.
(b) Based on net asset value, which does not reflect the sales charge
or contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense
and net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS -- INSTITUTIONAL CAPITAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
JULY 31, JANUARY 31,
1997 1997(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
TOTAL RETURN(B) 1.74% 3.42%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.30%* 0.30%*
Net investment income 3.36%* 2.90%*
Expense waiver/reimbursement(c) 0.38%* 0.35%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 7,453 $ 0.30
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from February 1, 1996 (date of
initial public offering) to January 31, 1997.
(b) Based on net asset value, which does not reflect the sales charge
or contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense
and net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 (UNAUDITED)
1. ORGANIZATION
Money Market Obligations Trust II (the "Trust") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as an
open-end, management investment company. The Trust consists of three
portfolios. The financial statements included herein are only those of
Municipal Obligations Fund (the "Fund"). The financial statements of
the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held. The investment objective of
the Fund is to provide current income exempt from federal regular
income tax consistent with stability of principal.
The Fund offers three classes of shares: Institutional Shares,
Institutional Service Shares and Institutional Capital Shares. As of
November 15, 1996, the Fund's Class C Shares were no longer
operational.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. These policies are in conformity with generally accepted
accounting principles.
INVESTMENT VALUATIONS -- The Fund uses the amortized cost method to
value its portfolio securities in accordance with Rule 2a-7 under the
Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS -- Interest income and
expenses are accrued daily. Bond premium and discount, if applicable,
are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the
ex-dividend date.
FEDERAL TAXES -- It is the Fund's policy to comply with the provisions
of the Code applicable to regulated investment companies and to
distribute to shareholders each year substantially all of its income.
Accordingly, no provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Fund may engage
in when-issued or delayed delivery transactions. The Fund records
when-issued securities on the trade date and maintains security
positions such that sufficient liquid assets will be available to make
payment for the securities purchased. Securities purchased on a
when-issued or delayed delivery basis are marked to market daily and
begin earning interest on the settlement date.
USE OF ESTIMATES -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those
estimated.
OTHER -- Investment transactions are accounted for on the trade date.
MUNICIPAL OBLIGATIONS FUND
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without
par value) for each class of shares. At July 31, 1997, capital paid-in
aggregated $231,576,359. Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
INSTITUTIONAL SHARES JULY 31, 1997 1997
<S> <C> <C>
Shares sold 1,690,746,562 3,310,319,398
Shares issued to shareholders in payment of distributions 735,026 1,275,572
declared
Shares redeemed (1,635,657,986) (3,287,154,333)
Net change resulting from Institutional Shares transactions 55,823,602 24,440,637
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
INSTITUTIONAL SERVICE SHARES JULY 31, 1997 1997
<S> <C> <C>
Shares sold 148,658,436 300
Shares issued to shareholders in payment of distributions 36,068 1
declared
Shares redeemed (139,955,985) (102)
Net change resulting from Institutional Service Shares 8,738,519 199
transactions
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
INSTITUTIONAL CAPITAL SHARES JULY 31, 1997 1997
<S> <C> <C>
Shares sold 122,952,561 5,039,630
Shares issued to shareholders in payment of distributions 3 3,892
declared
Shares redeemed (115,500,104) (5,043,323)
Net change resulting from Institutional Capital Shares 7,452,460 199
transactions
</TABLE>
MUNICIPAL OBLIGATIONS FUND
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
CLASS C SHARES JULY 31, 1997 1997(A)
<S> <C> <C>
Shares sold -- 4,150,273
Shares issued to shareholders in payment of distributions declared -- 2
Shares redeemed -- (6,118,839)
Net change resulting from Class C Shares transactions -- (1,968,564)
Net change resulting from share transactions 72,014,581 22,472,471
</TABLE>
(a) As of November 15, 1996, the Fund's Class C Shares were no longer
operational.
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE -- Federated Management, the Fund's investment
adviser (the "Adviser"), receives for its services an annual
investment advisory fee equal to 0.20% of the Fund's average daily net
assets. The Adviser may voluntarily choose to waive any portion of its
fee and reimburse certain operating expenses. The Adviser can modify
or terminate this voluntary waiver or reimbursement at any time at its
sole discretion.
Federated Management became the Fund's investment adviser on November
15, 1996. Prior to November 15, 1996, Lehman Brothers Global Asset
Management, Inc. (the "Former Adviser") served as the Fund's
investment adviser.
CAPITAL CONTRIBUTION -- The Former Adviser made a capital contribution
to the Fund on November 15, 1996, of an amount equal to the
accumulated net realized loss on investments balance carried by the
Fund.
This transaction resulted in a permanent book and tax difference. As
such, the paid-in-capital and accumulated net realized gain/loss
accounts have been adjusted accordingly. This adjustment did not
affect net investment income, net realized gains/losses, or net
assets.
ADMINISTRATIVE FEE -- Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with
administrative personnel and services. The fee paid to FServ is based
on the level of average aggregate daily net assets of all funds
advised by subsidiaries of Federated Investors for the period. The
administrative fee received during the period of the Administrative
Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares. FServ became the Fund's
administrator on November 15, 1996. Prior to November 15, 1996, First
Data Investors Services Group, Inc. ("FDISG") served as the Fund's
administrator.
DISTRIBUTION SERVICES FEE -- Pursuant to Rule 12b-1 under the Act, as
amended, the Fund had adopted Distribution Agreements ("Service
Agreements") with institutional investors such as banks, savings and
loan associations and other financial institutions with respect to the
Fund's former Class B Shares, Class C Shares and Class E Shares. All
such Service Agreements were terminated effective November 15, 1996.
Prior to November 15, 1996, Lehman Brothers, Inc., acted as the Fund's
distributor.
MUNICIPAL OBLIGATIONS FUND
SHAREHOLDER SERVICES FEE -- Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS") the Fund will
pay FSS up to 0.25% of average daily net assets of the Fund for the
period. The fee paid to FSS is used to finance certain services for
shareholders and to maintain shareholder accounts. FSS may voluntarily
choose to waive any portion of its fee. FSS can modify or terminate
this voluntary waiver at any time at its sole discretion. FSS became
the Fund's shareholder servicing agent on November 15, 1996.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ,
through its subsidiary, Federated Shareholder Services Company
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number of
accounts and transactions made by shareholders.
FSSC became the Fund's transfer and dividend disbursing agent on
November 15, 1996. Prior to November 15, 1996 FDISG served as the
Fund's transfer and dividend disbursing agent.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level of
the Fund's average daily net assets for the period, plus out-of-pocket
expenses.
GENERAL -- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
J. Christopher Donahue
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
J. Christopher Donahue
President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
J. Crilley Kelly
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board,
or any other government agency. Investment in mutual funds involves
risk, including possible loss of principal. Although money market
funds seek to maintain a stable net asset value of $1.00 per share,
there is no assurance that they will be able to do so.
This report is authorized for distribution to prospective investors
only when preceded or accompanied by the fund's prospectus which
contains facts concerning its objective and policies, management fees,
expenses and other information.
MUNICIPAL
OBLIGATIONS
FUND
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JULY 31, 1997
[Graphic]
Federated Securities Corp., Distributor
Cusip 608912309
Cusip 608912101
Cusip 608912200
G01999-05 (9/97)
[Graphic]
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for
Prime Cash Obligations Fund, a portfolio of Money Market Obligations
Trust II. The Report covers the six-month period ended July 31, 1997.
It begins with the fund's investment review, followed by a complete
list of holdings and the financial statements.
The fund continues to put your ready cash to work pursuing daily
income and stability of principal* while giving you easy access to
your money. At the end of the period, the fund's assets were invested
in a well-diversified portfolio of high quality money market
securities.
During the six-month reporting period, dividends paid to shareholders
of Institutional Shares, Institutional Service Shares and
Institutional Capital Shares totaled $0.03 per share. Net assets in
the fund reached $1.4 billion
at the period's end.
Thank you for keeping your cash working hard through Prime Cash
Obligations Fund. We welcome your questions and comments.
Sincerely,
[Graphic]
J. Christopher Donahue
President
September 15, 1997
* Although money market funds seek to maintain a stable net asset
value of $1.00 per share, there is no assurance that they will be
able to do so. An investment in the fund is neither insured nor
guaranteed by the U.S.
government.
INVESTMENT REVIEW
Prime Cash Obligations Fund invests in money market instruments
maturing in thirteen months or less. The average maturity of these
securities, computed on a dollar-weighted basis, is restricted to 90
days or less. Portfolio securities must be rated in the highest
short-term rating category by one or more of the nationally recognized
statistical rating organizations or be of comparable quality to
securities having such ratings. Typical security types include, but
are not limited to: commercial paper, certificates of deposit, time
deposits, variable rate instruments and repurchase agreements.
For the first quarter of 1997, nearly all economic statistics showed
that an economic growth spurt continued. Private sector job gains
along with some acceleration in wage gains supported both hefty retail
sales and an uptick in the saving rate. Consumer confidence continued
upward to 126.5%, while the manufacturing sector has held its own as
evidenced by the capacity utilization rate of 83.5%. In the second
quarter of 1997, however, the consumer seems to have briefly stepped
to the sidelines despite the unemployment rate reaching a 20-year low
of 4.8%.
Although economic growth kept pace, inflation remained benign. Overall
the consumer price index rose just 1.4% during the reporting period
while the producer price index actually declined 3.4% on an annualized
basis. Energy prices drastically declined during the period, while
news on the wage inflation front was also positive. The employment
cost index during the first quarter rose just 0.8% and is expected to
have risen 0.7% for the second quarter.
Thirty-day commercial paper started the period at 5.35% on February 1,
1997, rose as high as 5.60% in late March, near the time the Federal
Reserve Board (the "Fed") raised rates on March 25, 1997. Since that
time, 30-day commercial paper has been trading in a 5.55% - 5.60%
range.
The Fed raised the target Federal Funds rate on March 25, 1997, from
5.25% to 5.50% in order to prevent a rise in inflation. The increase
was largely anticipated and had been reflected prior to the actual
increase.
The target average maturity range for Prime Cash Obligations Fund
remained in the 35-45 day target range for the entire period,
reflecting a neutral position regarding Fed policy. In structuring the
fund, there is continued emphasis placed on positioning 30-35% of the
fund's core assets in variable rate demand notes and accomplishing a
modest barbell structure.
During the six months ended July 31, 1997, the net assets of the fund
decreased from $2,034.6 to $1,418.6 million while the 7-day net yield
for the fund's Institutional Shares, Institutional Service Shares and
Institutional Capital Shares increased from 5.27% to 5.51%, 5.02% to
5.26% and 5.15% to 5.39%, respectively.* The effective average
maturity of the
fund on July 31, 1997 was 47 days.
* Past performance is not indicative of future results. Yield will vary.
PRIME CASH OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM NOTES--14.6%
BANKING--4.2%
$ 6,000,000 BankBoston, N.A., 6.040%, 7/17/1998 $ 6,000,000
24,500,000 (b)SALTS II Cayman Islands Corp., (Bankers Trust Int'l Swap Agmt.)
5.863%, 9/18/1997 24,500,000
20,000,000 (b)SALTS III Cayman Island Corp., (Bankers Trust International,
PLC Swap Agreement), 5.944%, 1/23/1998 20,000,000
9,000,000 (b)SALTS III Cayman Island Corp., (Bankers Trust Int'l Swap Agmt.)
6.065%, 12/18/1997 9,000,000
Total 59,500,000
BROKERAGE--3.5%
50,000,000 (b)Goldman Sachs & Co., 5.670%, 10/28/1997 50,000,000
FINANCE - AUTOMOTIVE--2.1%
12,690,615 Chase Manhattan Auto Owner Trust 1997-A, 5.545%, 4/10/1998 12,690,615
14,222,912 Chase Manhattan Auto Owner Trust 1997-B, 5.744%, 7/10/1998 14,222,912
3,191,420 Ford Credit Auto Lease Trust 1996-1, 5.451%, 11/15/1997 3,191,327
Total 30,104,854
FINANCE - COMMERCIAL--2.3%
10,000,000 Beta Finance, Inc., 6.080%, 3/26/1998 10,000,000
11,000,000 Beta Finance, Inc., 6.160%, 5/12/1998 11,000,000
10,000,000 Beta Finance, Inc., 6.260%, 4/30/1998 10,000,000
2,338,317 (b)Cargill Lease Receivables Trust 1996-A, Class A-1, 5.613%,
12/20/1997 2,338,317
Total 33,338,317
FINANCE - EQUIPMENT--1.9%
10,832,858 Caterpillar Financial Asset Trust 1997-A, 5.791%, 5/25/1998 10,832,858
15,505,801 Copelco Capital Funding Corp. X 1997-A, 5.809%, 7/20/1998 15,505,801
Total 26,338,659
</TABLE>
PRIME CASH OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM NOTES--CONTINUED
INSURANCE--0.6%
$ 5,266,313 WFS Financial Owner Trust 1997-A, (FSA Gtd.) 5.630%, 3/20/1998 $ 5,266,313
2,720,078 Olympic Automobile Receivables Trust 1997-A, (FSA Gtd.) 5.500%,
3/15/1998 2,720,078
Total 7,986,391
TOTAL SHORT-TERM NOTES 207,268,221
CERTIFICATE OF DEPOSIT--3.2%
BANKING--3.2%
46,000,000 Societe Generale, Paris, 5.430% - 6.140%, 8/18/1997 - 7/23/1998 45,993,934
(A)COMMERCIAL PAPER--40.3%
BANKING--12.4%
27,000,000 Abbey National N.A. Corp., (Guaranteed by Abbey National
Bank PLC, London), 5.413% - 5.814%, 8/12/1997 - 10/1/1997 26,920,638
10,000,000 Abbey National Treasury Services, PLC, 6.050%, 6/8/1998 9,993,241
10,000,000 Australia & New Zealand ANZ (Delaware), Inc., (Guaranteed by
Australia & New Zealand Banking Group, Melbourne), 5.814%,
11/17/1997 9,830,500
18,000,000 Bank of Nova Scotia, Toronto, 5.709%, 8/26/1997 17,929,625
25,000,000 Canadian Imperial Holdings, Inc., (Guaranteed by Canadian
Imperial Bank of Commerce, Toronto), 5.435%, 8/27/1997 24,904,486
25,000,000 Den Danske Corp., Inc., (Guaranteed by Den Danske Bank A/S),
5.858%, 11/26/1997 24,537,688
7,000,000 National Australia Funding, Inc., (Guaranteed by National
Australia Bank, Ltd., Melbourne), 5.613%, 9/16/1997 6,951,163
15,000,000 Societe Generale North America, Inc., (Guaranteed by Societe
Generale, Paris), 5.604%, 9/10/1997 14,909,167
25,000,000 Svenska Handelsbanken, Inc., (Guaranteed by Svenska
Handelsbanken, Stockholm), 5.761% - 5.846%, 9/25/1997 -
11/13/1997 24,715,431
</TABLE>
PRIME CASH OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)COMMERCIAL PAPER--CONTINUED
BANKING--CONTINUED
$ 15,000,000 Toronto Dominion Holdings (USA), Inc., (Guaranteed by
Toronto-Dominion Bank), 5.816%, 10/6/1997 $ 14,844,625
Total 175,536,564
BROKERAGE--2.5%
35,000,000 Merrill Lynch & Co., Inc., 5.659%, 9/15/1997 34,755,875
FINANCE - COMMERCIAL--17.0%
25,000,000 Asset Securitization Cooperative Corp., 5.711%, 8/12/1997 24,956,993
50,500,000 Beta Finance, Inc., 5.413% - 5.888%, 8/7/1997 - 11/14/1997 50,287,576
27,000,000 CXC, Inc., 5.609%, 10/15/1997 26,688,938
20,000,000 Falcon Asset Securitization Corp., 5.413%, 8/19/1997 19,947,300
19,000,000 General Electric Capital Corp., 5.440%, 8/6/1997 18,986,014
24,813,000 Greenwich Funding Corp., 5.779%, 9/22/1997 24,610,140
20,000,000 PREFCO-Preferred Receivables Funding Co., 5.478%, 8/14/1997 19,961,506
56,340,000 Receivables Capital Corp., 5.564% - 5.587%, 9/9/1997 - 9/12/1997 55,987,948
Total 241,426,415
FINANCE - RETAIL--4.9%
70,000,000 Associates Corp. of North America, 5.596% - 5.851%, 8/1/1997 -
10/28/1997 69,679,397
OIL & OIL FINANCE--1.4%
20,000,000 Koch Industries, Inc., 5.901%, 8/1/1997 20,000,000
PHARMACEUTICALS AND HEALTH CARE--2.1%
30,000,000 Glaxo Wellcome PLC, 5.692%, 9/11/1997 29,808,325
TOTAL COMMERCIAL PAPER 571,206,576
(C)VARIABLE RATE OBLIGATIONS--17.6%
BANKING--11.7%
2,000,000 Albuquerque, NM, Series 1997, El Canto, Inc., (Norwest Bank
Minnesota, Minneapolis LOC), 5.970%, 8/7/1997 2,000,000
</TABLE>
PRIME CASH OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE OBLIGATIONS--CONTINUED
BANKING--CONTINUED
$ 2,250,000 Beech Grove, IN, Series 1997, Poster Display Co., (Bank One,
Indianapolis, IN LOC), 5.600%, 8/7/1997 $ 2,250,000
2,250,000 C. W. Caldwell, Inc., Sweetbriar Assisted Living Facility, Project,
(Huntington National Bank, Columbus, OH LOC), 5.620%,
8/7/1997 2,250,000
2,945,000 Casna Limited Partnership, Series 1997, (Huntington National
Bank, Columbus, OH LOC), 5.620%, 8/7/1997 2,945,000
2,000,000 Chestnut Hills Apartments, Ltd., (Huntington National Bank,
Columbus, OH LOC), 5.670%, 8/7/1997 2,000,000
1,500,000 Children's Defense Fund, (First National Bank of Maryland,
Baltimore LOC), 5.876%, 8/5/1997 1,500,000
2,500,000 Clarksville, IN, Series 1997, Metal Sales Manf., (Star Bank, N.A.,
Cincinnati LOC), 5.690%, 8/7/1997 2,500,000
6,970,000 Franklin County, OH, Series 1997, (Edison Wielding, Huntington
National Bank, Columbus, OH LOC), 5.740%, 8/7/1997 6,970,000
12,500,000 Georgetown, KY Educational Institution, Series 1997-A, (Bank
One, Kentucky LOC), 5.640%, 8/7/1997 12,500,000
5,900,000 IT Spring Wire, LLC, Series 1997, (Fifth Third Bank, Cincinnati
LOC), 5.620%, 8/7/1997 5,900,000
1,250,000 Jefferson County, KY, Series 1997, Advanced Filtration Concepts,
Inc., (Bank One, Kentucky LOC), 5.690%, 8/7/1997 1,250,000
2,000,000 Kit Carson County, CO, Midwest Farms Project, (Norwest Bank
Minnesota, Minneapolis LOC), 5.700%, 8/6/1997 2,000,000
85,000,000 Liquid Asset Backed Securities Trust, Series 1997-1, (Westdeutsche
Landesbank Girozentrale Swap Agreement), 5.680%, 8/15/1997 85,000,000
10,000,000 Mississippi Business Finance Corp., Kohler Project, (Wachovia
Bank of Georgia N.A., Atlanta LOC), 5.750%, 8/7/1997 10,000,000
5,000,000 New Jersey EDA, Morey Organization, Inc., Project Series 1997,
(Corestates Bank N.A., Philadelphia, PA LOC), 5.750%, 8/6/1997 5,000,000
</TABLE>
PRIME CASH OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE OBLIGATIONS--CONTINUED
BANKING--CONTINUED
$ 3,310,000 Oklahoma County Ind. Authority, Fred Jones Manufacturing Co.
Project, (Texas Commerce Bank, N.A., Houston LOC), 6.000%,
10/1/1997 $ 3,310,000
9,233,218 Rabobank Optional Redemption Trust, Series 1997-101, 5.750%,
8/15/1997 9,233,218
4,125,000 Solon Properties, LLC, (Huntington National Bank, Columbus,
OH LOC), 5.620%, 8/7/1997 4,125,000
1,250,000 TDB Realty, Ltd., (Huntington National Bank, Columbus,
OH LOC), 5.620%, 8/7/1997 1,250,000
3,360,000 Team Rahal of Pittsburgh, Inc., Series 1997, (Huntington National
Bank, Columbus, OH LOC), 5.620%, 8/7/1997 3,360,000
Total 165,343,218
INSURANCE--5.9%
49,307,961 Liquid Asset Backed Securities Trust, Series 1997-3, Senior Note,
(Westdeutsche Landesbank Girozentrale Swap Agreement,
Guaranteed by AMBAC), 5.751%, 9/27/1997 49,307,961
25,000,000 Transamerica Life Insurance and Annuity Co., (Transamerica
Life Insurance and Annuity Co. LOC), 5.781%, 9/26/1997 25,000,000
10,000,000 (b)Travelers Insurance Company, 5.841%, 8/20/1997 10,000,000
Total 84,307,961
TOTAL VARIABLE RATE OBLIGATIONS 249,651,179
TIME DEPOSIT--3.5%
BANKING--3.5%
50,000,000 Royal Bank of Canada, Montreal, 5.813%, 8/1/1997 50,000,000
(D)REPURCHASE AGREEMENTS--21.0%
50,000,000 Chase Government Securities, Inc., 5.870%, dated 7/31/1997,
due 8/1/1997 50,000,000
60,000,000 Goldman Sachs Group LP, 5.850%, dated 7/31/1997, due
8/1/1997 60,000,000
</TABLE>
PRIME CASH OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(D)REPURCHASE AGREEMENTS--21.0%
$ 50,000,000 Greenwich Capital Markets, Inc., 5.850%, dated 7/31/1997,
due 8/1/1997 $ 50,000,000
58,000,000 HSBC Securities, Inc., 5.850%, dated 7/31/1997, due 8/1/1997 58,000,000
70,000,000 Toronto Dominion Securities (USA) Inc., 5.850%, dated 7/31/1997,
due 8/1/1997 70,000,000
9,400,000 UBS Securities, Inc., 5.770%, dated 7/31/1997, due 8/1/1997 9,400,000
TOTAL REPURCHASE AGREEMENTS 297,400,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $ 1,421,519,910
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase for
discount issues, or the coupon for interest bearing issues.
(b) Denotes a restricted security which is subject to restrictions on
resale under Federal Securities laws. At July 31, 1997, these
securities amounted to $113,500,000 which represents 8.0% of net
assets.
(c) Current rate and next reset date shown.
(d) The repurchase agreements are fully collateralized by U.S.
government and/or agency obligations based on market prices at the
date of the portfolio. The investments in the repurchase
agreements are through participation in joint accounts with other
Federated funds.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($1,418,614,774) at July 31, 1997.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation
EDA --Economic Development Authority
LOC --Letter of Credit
LP --Limited Partnership
PLC --Public Limited Company
(See Notes which are an integral part of the Financial Statements)
PRIME CASH OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 1,421,519,910
Cash 391,545
Income receivable 3,133,634
Total assets 1,425,045,089
LIABILITIES:
Income distribution payable 6,277,679
Accrued expenses 152,636
Total liabilities 6,430,315
NET ASSETS for 1,418,614,774 shares outstanding $ 1,418,614,774
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$956,907,082 / 956,907,082 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$442,158,800 / 442,158,800 shares outstanding $1.00
INSTITUTIONAL CAPITAL SHARES:
$19,548,892 / 19,548,892 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME CASH OBLIGATIONS FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JULY 31, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 46,004,837
EXPENSES:
Investment advisory fee $ 1,667,837
Administrative personnel and services fee 629,609
Custodian fees 75,979
Transfer and dividend disbursing agent fees and expenses 22,437
Directors'/Trustees' fees 7,160
Auditing fees 3,967
Legal fees 6,282
Portfolio accounting fees 89,972
Shareholder services fee--Institutional Shares 1,516,109
Shareholder services fee--Institutional Service Shares 539,395
Shareholder services fee--Institutional Capital Shares 29,293
Share registration costs 14,495
Printing and postage 8,433
Insurance premiums 11,872
Taxes 8,626
Miscellaneous 6,457
Total expenses 4,637,923
Waivers--
Waiver of investment advisory fee $ (1,013,037)
Waiver of shareholder services fee--
Institutional Shares (1,516,109)
Waiver of shareholder services fee--
Institutional Capital Shares (17,575)
Total waivers (2,546,721)
Net expenses 2,091,202
Net investment income $ 43,913,635
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME CASH OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
JULY 31, 1997 JANUARY 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 43,913,635 $ 149,363,883
Net realized gain (loss) on investments -- (930,171)
Change in net assets resulting from operations 43,913,635 148,433,712
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (32,224,947) (131,246,169)
Institutional Service Shares (11,112,436) (16,786,956)
Institutional Capital Shares (576,252) (861,359)
Class C Shares -- (489,156)
Change in net assets resulting from distributions to
shareholders (43,913,635) (149,383,640)
CAPITAL CONTRIBUTION -- 1,107,973
SHARE TRANSACTIONS--
Proceeds from sale of shares 11,356,371,773 44,315,024,567
Net asset value of shares issued to shareholders in payment
of distributions declared 17,912,471 70,429,183
Cost of shares redeemed (11,990,253,246) (46,619,754,483)
Change in net assets resulting from share transactions (615,969,002) (2,234,300,733)
Change in net assets (615,969,002) (2,234,142,688)
NET ASSETS:
Beginning of period 2,034,583,776 4,268,726,464
End of period $ 1,418,614,774 $ 2,034,583,776
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME CASH OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JULY 31, YEAR ENDED JANUARY 31,
1997 1997 1996 1995 1994(A)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.06 0.04 0.03
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.06) (0.04) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.69% 5.38% 6.08% 4.52% 3.14%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.18%* 0.18% 0.17% 0.12% 0.11%*
Net investment income 5.31%* 5.25% 5.90% 4.30% 3.16%*
Expense waiver/reimbursement(c) 0.37%* 0.14% 0.08% 0.13% 0.22%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $956,907 $1,572,912 $3,919,186 $1,538,802 $2,866,353
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from February 8, 1993 (date of
initial public investment) to January 31, 1994.
(b) Based on net asset value, which does not reflect the sales charge
or contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense
and net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
PRIME CASH OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JULY 31, YEAR ENDED JANUARY 31,
1997 1997 1996 1995 1994(A)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.06 0.04 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.06) (0.04) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.56% 5.11% 5.83% 4.21% 0.99%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.44%* 0.43% 0.42% 0.37% 0.36%*
Net investment income 5.15%* 5.02% 5.65% 4.05% 2.91%*
Expense waiver/reimbursement(c) 0.12%* 0.14% 0.08% 0.13% 0.22%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $442,159 $412,762 $324,474 $342,673 $350,666
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from September 2, 1993 (date of
initial public offering) to January 31, 1994.
(b) Based on net asset value, which does not reflect the sales charge
or contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense
and net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
PRIME CASH OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL CAPITAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JULY 31, YEAR ENDED JANUARY 31,
1997 1997 1996 1995(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.06 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.06) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.63% 5.23% 5.94% 1.66%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.29%* 0.32% 0.32% 0.27%*
Net investment income 4.92%* 5.00% 5.75% 4.15%*
Expense waiver/reimbursement(c) 0.26%* 0.18% 0.08% 0.12%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $19,549 $48,910 $11,811 $8,318
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from October 6, 1994 (date of
initial public offering) to January 31, 1995.
(b) Based on net asset value, which does not reflect the sales charge
or contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense
and net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
PRIME CASH OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 (UNAUDITED)
1. ORGANIZATION
Money Market Obligations Trust II (the "Trust") is registered under
the Investment Company Act of 1940, as amended (the "Act") as an
open-end, management investment company. The Trust consists of three
portfolios. The financial statements included herein are only those of
Prime Cash Obligations Fund (the "Fund"). The financial statements of
the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held. The investment objective of
the Fund is to provide a high level of current income consistent with
stability of principal and liquidity. The Fund offers three classes of
shares: Institutional Shares, Institutional Service Shares and
Institutional Capital Shares. As of November 15, 1996, the Fund's
Class C Shares were no longer operational.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. These policies are in conformity with generally accepted
accounting principles.
INVESTMENT VALUATIONS-- The Fund uses the amortized cost method to
value its portfolio securities in accordance with Rule 2a-7 under
the Act.
REPURCHASE AGREEMENTS-- It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under
repurchase agreement transactions. Additionally, procedures have
been established by the Fund to monitor, on a daily basis, the
market value of each repurchase agreement's collateral to ensure
that the value of collateral at least equals the repurchase price to
be paid under the repurchase agreement transaction.
The Fund will only enter into repurchase agreements with banks and
other recognized financial institutions, such as broker/dealers,
which are deemed by the Fund's adviser to be creditworthy pursuant
to the guidelines and/or standards reviewed or established by the
Board of Trustees (the "Trustees"). Risks may arise from the
potential inability of counterparties to honor the terms of the
repurchase agreement. Accordingly, the Fund could receive less than
the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS-- Interest income and
expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code,
as amended (the "Code"). Distributions to shareholders are recorded
on the ex-dividend date.
PRIME CASH OBLIGATIONS FUND
FEDERAL TAXES-- It is the Fund's policy to comply with the
provisions of the Code applicable to regulated investment companies
and to distribute to shareholders each year substantially all of its
income. Accordingly, no provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS-- The Fund may engage
in when-issued or delayed delivery transactions. The Fund records
when-issued securities on the trade date and maintains security
positions such that sufficient liquid assets will be available to
make payment for the securities purchased. Securities purchased on a
when-issued or delayed delivery basis are marked to market daily and
begin earning interest on the settlement date.
RESTRICTED SECURITIES-- Restricted securities are securities that
may only be resold upon registration under federal securities laws
or in transactions exempt from such registration. Many restricted
securities may be resold in the secondary market in transactions
exempt from registration. In some cases, the restricted securities
may be resold without registration upon exercise of a demand
feature. Such restricted securities may be determined to be liquid
under criteria established by the Board of Trustees. The Fund will
not incur any registration costs upon such resales. Restricted
securities are valued at amortized cost in accordance with Rule 2a-7
under the Investment Company Act of 1940.
Additional information on each restricted security held at July 31,
1997 is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST
Goldman Sachs & Co. 7/28/1997 $50,000,000
Salts II Cayman Islands Corp. 6/11/1997 24,500,000
Salts III Cayman Island Corp. 6/5/1997 9,000,000
Salts III Cayman Island Corp.
(Bankers Trust International,
PLC Swap Agreement) 7/23/1997 20,000,000
Travelers Insurance Company 2/20/1997 10,000,000
Cargill Lease Receivables Trust 12/17/1996 2,338,317
USE OF ESTIMATES-- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those
estimated.
OTHER-- Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest ($0.001
par value) for each class of shares.
PRIME CASH OBLIGATIONS FUND
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
JULY 31, 1997 1997
INSTITUTIONAL SHARES SHARES SHARES
<S> <C> <C>
Shares sold 8,851,472,793 40,032,958,456
Shares issued to shareholders in payment of distributions declared 17,323,242 69,513,711
Shares redeemed (9,484,801,796) (42,448,889,011)
Net change resulting from Institutional Share transactions (616,005,761) (2,346,416,844)
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
JULY 31, 1997 1997
INSTITUTIONAL SERVICE SHARES SHARES SHARES
<S> <C> <C>
Shares sold 2,204,081,746 3,521,627,120
Shares issued to shareholders in payment of distributions declared 131,035 64,147
Shares redeemed (2,174,815,839) (3,433,416,889)
Net change resulting from Institutional Service Share
transactions 29,396,942 88,274,378
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
JULY 31, 1997 1997
INSTITUTIONAL CAPITAL SHARES SHARES SHARES
<S> <C> <C>
Shares sold 300,817,234 730,851,647
Shares issued to shareholders in payment of distributions declared 458,194 756,768
Shares redeemed (330,635,611) (694,511,244)
Net change resulting from Institutional Capital Shares
transactions (29,360,183) 37,097,171
<CAPTION>
PRIME CASH OBLIGATIONS FUND
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
JULY 31, 1997 1997(A)
CLASS C SHARES SHARES SHARES
<S> <C> <C>
Shares sold -- 29,587,344
Shares issued to shareholders in payment of distributions declared -- 94,557
Shares redeemed -- (42,937,339)
Net change resulting from Institutional Capital Shares
transactions -- (13,255,438)
Net change resulting from share transactions (615,969,002) (2,234,300,733)
</TABLE>
(a) As of November 15, 1996, the Fund's Class C Shares were no longer
operational.
At July 31, 1997, capital paid-in aggregated $1,418,614,774.
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE-- Federated Management, the Fund's
investment adviser (the "Adviser"), receives for its services an
annual investment advisory fee equal to 0.20% of the Fund's average
daily net assets. The Adviser may voluntarily choose to waive any
portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
CAPITAL CONTRIBUTION-- Lehman Brothers Global Asset Management,
Inc., the Fund's former adviser, made a capital contribution to the
Fund on November 15, 1996, of an amount equal to the accumalated net
realized loss on investments balance carried by the Fund.
This tranaction resulted in a permanent book and tax difference. As
such, the paid-in capital and accumulated net realized gain/loss
accounts have been adjusted accordingly. This adjustment did not
affect net investment income, net realized gains/losses, or net
assets.
ADMINISTRATIVE FEE-- Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with
administrative personnel and services. The fee paid to FServ is
based on the level of average aggregate daily net assets of all
funds advised by subsidiaries of Federated Investors for the period.
The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per
portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE-- Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will
pay FSS up to 0.25% of average daily net assets of the Fund for the
period. There is no present intention of paying or accruing the
shareholder services fee for the Institutional Shares. The fee paid
to FSS is used to finance certain services for shareholders and to
maintain shareholder accounts. FSS may voluntarily choose to waive
any portion of its fee. FSS can modify or terminate this voluntary
waiver at any time at its sole discretion.
PRIME CASH OBLIGATIONS FUND
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES-- FServ,
through its subsidiary, Federated Shareholder Services Company
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number of
accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES-- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level
of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
GENERAL-- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
J. Christopher Donahue
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
J. Christopher Donahue
President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
J. Crilley Kelly
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board,
or any other government agency. Investment in mutual funds involves
risk, including possible loss of principal. Although money market
funds seek to maintain a stable net asset value of $1.00 per share,
there is no assurance that they will be able to do so.
This report is authorized for distribution to prospective investors
only when preceded or accompanied by the fund's prospectus which
contains facts concerning its objective and policies, management fees,
expenses and other information.
PRIME CASH
OBLIGATIONS
FUND
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
DATED JULY 31, 1997
[Graphic]Federated Investors
Federated Securities Corp., Distributor
Cusip 608912887
Cusip 608912705
Cusip 608912804
G01999-04 (9/97)
[Graphic]
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for
Prime Value Obligations Fund, a portfolio of Money Market Obligations
Trust II. The Report covers the six-month period ended July 31, 1997.
It begins with the fund's investment review, followed by a complete
list of holdings and the financial statements.
The fund continues to put your ready cash to work pursuing daily
income and stability of principal* while giving you easy access to
your money. At the end of the period, the fund's assets were invested
in a well-diversified portfolio of high quality money market
securities.
During the six-month reporting period, dividends paid to shareholders
of Institutional Shares, Institutional Service Shares and
Institutional Capital Shares totaled $0.03 per share. Net assets in
the fund reached $968.7
million at the period's end.
Thank you for keeping your cash working hard through Prime Value
Obligations Fund. We welcome your questions and comments.
Sincerely,
[Graphic]
J. Christopher Donahue
President
September 15, 1997
* Although money market funds seek to maintain a stable net asset
value of $1.00 per share, there is no assurance that they will be
able to do so. An investment in the fund is neither insured nor
guaranteed by the U.S.
government.
INVESTMENT REVIEW
Prime Value Obligations Fund invests in money market instruments
maturing in thirteen months or less. The average maturity of these
securities, computed on a dollar-weighted basis, is restricted to 90
days or less. Portfolio securities must be rated in one of the two
highest short-term rating categories by one or more of the nationally
recognized statistical rating organizations or be of comparable
quality to securities having such ratings. Typical security types
include, but are not limited to: commercial paper, certificates of
deposit, time deposits, variable rate instruments and repurchase
agreements.
For the first quarter of 1997, nearly all economic statistics showed
that an economic growth spurt continued. Private sector job gains
along with some acceleration in wage gains supported both hefty retail
sales and an uptick in the saving rate. Consumer confidence continued
upward to 126.5%, while the manufacturing sector has held its own as
evidenced by the capacity utilization rate of 83.5%. In the second
quarter of 1997, however, the consumer seems to have briefly stepped
to the sidelines despite the unemployment rate reaching a 20-year low
of 4.8%.
Although economic growth kept pace, inflation remained benign. Overall
the consumer price index rose just 1.4% during the reporting period
while the producer price index actually declined 3.4% on an annualized
basis. Energy prices drastically declined during the period, while
news on the wage inflation front was also positive. The employment
cost index during the first quarter rose just 0.8% and is expected to
have risen 0.7% for the second quarter.
Thirty-day commercial paper started the period at 5.35% on February 1,
1997, rose as high as 5.60% in late March near the time the Federal
Reserve Board (the "Fed") raised rates on March 25, 1997. Since that
time, 30-day commercial paper has been trading in a 5.55% - 5.60%
range.
The Fed raised the target Federal Funds rate on March 25, 1997, from
5.25% to 5.50% in order to prevent a rise in inflation. The increase
was largely anticipated and had been reflected prior to the actual
increase.
The target average maturity range for Prime Value Obligations Fund
remained in the 35-45 day range for the entire period, reflecting a
neutral position regarding Fed policy. In structuring the fund, there
is continued emphasis placed on positioning 30-35% of the fund's core
assets in variable rate demand notes and accomplishing a modest
barbell structure.
During the six months ended July 31, 1997, the net assets of the fund
increased from $426.4 to $968.7 million while the 7-day net yield for
the fund's Institutional Shares, Institutional Service Shares, and
Institutional Capital Shares increased from 5.31% to 5.62%, 5.06% to
5.37%, and 5.19% to 5.50%, respectively.* The effective average
maturity of the Fund on July 31,
1997, was 45 days.
* Past performance is not indicative of future results. Yield will vary.
PRIME VALUE OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM NOTES--5.3%
FINANCE - AUTOMOTIVE--2.3%
$ 2,115,103 Chase Manhattan Auto Owner Trust 1997-A, $ 2,115,103
5.545%, 4/10/1998
16,732,838 Chase Manhattan Auto Owner Trust 1997-B, 16,732,838
5.744%, 7/10/1998
3,191,420 Ford Credit Auto Lease Trust 1996-1, 5.451%, 3,191,327
11/15/1997
Total 22,039,268
FINANCE - EQUIPMENT--1.9%
18,242,119 Copelco Capital Funding Corp. X 1997-A, 5.809%, 18,242,119
7/20/1998
INSURANCE--1.1%
5,500,988 Arcadia Auto Receivables Trust 1997-B, (FSA
GTD), 5.743%,
6/15/1998 5,500,988
2,580,964 Olympic Automobile Receivables Trust 1997-A,
(FSA GTD), 5.500%,
3/15/1998 2,580,964
2,633,156 WFS Financial Owner Trust 1997-A, (FSA GTD), 2,633,156
5.630%, 3/20/1998
Total 10,715,108
TOTAL SHORT-TERM NOTES 50,996,495
CERTIFICATES OF DEPOSIT--6.2%
BANKING--6.2%
5,000,000 Australia & New Zealand Banking Group,
Melbourne, 5.420%,
8/20/1997 5,000,049
10,000,000 MBNA America Bank, N.A., 5.740%, 9/2/1997 10,000,000
5,000,000 National Australia Bank, Ltd., Melbourne, 5,000,003
5.505%, 8/6/1997
5,000,000 Svenska Handelsbanken, Stockholm, 5.690%, 5,000,044
9/9/1997
35,000,000 Societe Generale, Paris, 5.430% - 5.920%, 34,996,240
8/11/1997 - 7/16/1998
TOTAL CERTIFICATES OF DEPOSIT 59,996,336
</TABLE>
PRIME VALUE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
CORPORATE NOTES--5.8%
BANKING--3.7%
$ 6,000,000 BankBoston, N.A., 6.040%, 7/17/1998 $ 6,000,000
15,000,000 (b)SALTS II Cayman Islands Corp., (Bankers Trust
International
Swap Agreement), 5.863%, 9/18/1997 15,000,000
10,000,000 (b)SALTS III Cayman Island Corp., (Bankers Trust
International,
PLC Swap Agreement), 5.944%, 1/23/1998 10,000,000
5,000,000 (b)SALTS III Cayman Island Corp., (Bankers Trust
International
Swap Agreement), 6.065%, 12/18/1997 5,000,000
Total 36,000,000
BROKERAGE--2.1%
20,000,000 (b)Goldman Sachs Group, LP, 5.670%, 10/28/1997 20,000,000
TOTAL CORPORATE NOTES 56,000,000
(A)COMMERCIAL PAPER--31.5%
BANKING--11.8%
5,000,000 ABN AMRO Bank N.V., Amsterdam, 5.793%, 1/5/1998 4,877,235
15,000,000 Abbey National N.A. Corp., (Guaranteed by Abbey
National Bank
PLC, London), 5.419% - 5.869%, 8/21/1997 - 14,912,331
10/10/1997
5,000,000 Bank of Nova Scotia, Toronto, 5.661%, 9/17/1997 4,963,575
15,000,000 Canadian Imperial Holdings, Inc., (Guaranteed
by Canadian
Imperial Bank of Commerce, Toronto), 5.424% -
5.681%,
8/25/1997 - 10/1/1997 14,927,189
15,000,000 Cregem North America, Inc., (Guaranteed by
Credit Communal
de Belgique, Brussles), 5.660% - 5.680%, 14,899,033
9/9/1997 - 9/22/1997
18,000,000 Den Danske Corp., Inc., (Guaranteed by Den
Danske Bank A/S),
5.821% - 5.858%, 11/26/1997 17,667,915
10,000,000 Glencore Finance (Bermuda) Ltd., (Union Bank of
Switzerland
LOC), 5.680%, 9/11/1997 9,936,222
5,000,000 PEMEX Capital, Inc., (Swiss Bank Corp., Basle
LOC), 5.449%,
8/11/1997 4,992,632
5,000,000 Societe Generale North America, Inc.,
(Guaranteed by Societe
Generale, Paris), 5.604%, 9/10/1997 4,969,722
</TABLE>
PRIME VALUE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)COMMERCIAL PAPER--CONTINUED
BANKING--CONTINUED
$ 15,000,000 Svenska Handelsbanken, Inc., (Guaranteed by
Svenska
Handelsbanken, Stockholm), 5.672% - 5.857%,
8/22/1997 -
12/2/1997 $ 14,789,288
3,000,000 Toronto Dominion Holdings (USA), Inc.,
(Guaranteed by Toronto-
Dominion Bank), 5.730%, 12/17/1997 2,935,945
5,000,000 Westpac Capital Corp., (Guaranteed by Westpac
Banking Corp.
Ltd.), 5.455%, 8/11/1997 4,992,625
Total 114,863,712
BROKERAGE--3.2%
31,000,000 Merrill Lynch & Co., Inc., 5.628% - 5.762%, 30,820,117
8/18/1997 - 10/6/1997
FINANCE - AUTOMOTIVE--0.4%
4,000,000 General Motors Acceptance Corp., 5.953%, 3,935,136
11/10/1997
FINANCE - COMMERCIAL--12.2%
17,000,000 Asset Securitization Cooperative Corp., 5.717%
- 5.825%,
8/18/1997 - 12/9/1997 16,728,377
28,000,000 Beta Finance, Inc., 5.425% - 5.888%, 8/26/1997 27,708,878
- 12/2/1997
3,000,000 CXC, Inc., 5.680%, 8/19/1997 2,991,600
8,000,000 Falcon Asset Securitization Corp., 5.580% -
5.736%, 8/20/1997 -
10/27/1997 7,924,596
20,000,000 General Electric Capital Corp., 5.465% -
5.709%, 8/11/1997 -
1/15/1998 19,696,031
25,000,000 Greenwich Funding Corp., 5.660% - 5.701%, 24,872,063
8/28/1997 - 9/12/1997
5,000,000 PREFCO-Preferred Receivables Funding Co., 4,957,299
5.669%, 9/25/1997
13,000,000 Sheffield Receivables Corp., 5.660% - 5.681%, 12,920,794
9/5/1997 - 9/16/1997
Total 117,799,638
FINANCE - RETAIL--1.8%
7,000,000 Associates Corp. of North America, 5.371%, 6,974,576
8/26/1997
11,000,000 New Center Asset Trust, A1+/P1 Series, 5.465% -
5.690%,
8/4/1997 - 9/3/1997 10,957,530
Total 17,932,106
</TABLE>
PRIME VALUE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)COMMERCIAL PAPER--CONTINUED
OIL & OIL FINANCE--2.1%
$ 5,000,000 Chevron Transport Corp., (Guaranteed by Chevron
Corp.), 5.702%,
8/14/1997 $ 4,989,853
15,000,000 Koch Industries, Inc., 5.901%, 8/1/1997 15,000,000
Total 19,989,853
TOTAL COMMERCIAL PAPER 305,340,562
(C)NOTES - VARIABLE--27.5%
BANKING--23.2%
9,765,000 500 South Front St. L.P., Series A, (Huntington
National Bank,
Columbus, OH LOC), 5.650%, 8/7/1997 9,765,000
6,315,000 500 South Front St. L.P., Series B, (Huntington
National Bank,
Columbus, OH LOC), 5.650%, 8/7/1997 6,315,000
1,780,000 Alabama State IDA, (Nichols Research Corp.),
(SouthTrust Bank of
Alabama, Birmingham LOC), 5.680%, 8/8/1997 1,780,000
5,000,000 American Seaway Foods, Inc., (KeyBank, N.A.
LOC), 5.750%,
8/8/1997 5,000,000
2,440,000 Arapahoe Water & Sanitation District, Arapahoe
County, CO,
Series 1997 B, (Banque Nationale de Paris
(Canada) LOC), 6.000%,
12/1/1997 2,440,000
5,850,000 Associated Materials, Inc., (KeyBank, N.A. 5,850,000
LOC), 5.750%, 8/8/1997
1,895,000 Athens-Clarke County, GA IDA, Barrett Project
(Series 1995),
(Columbus Bank and Trust Co., GA LOC), 5.850%, 1,895,000
8/7/1997
16,900,000 Beverly California Corp., (PNC Bank, N.A. LOC), 16,900,000
5.690%, 8/4/1997
17,500,000 Beverly Hills Nursing Center, Inc., Medilodge
Project Series 1996,
(KeyBank, N.A. LOC), 5.700%, 8/7/1997 17,500,000
2,145,000 Bissett, William K. and Sheryl B., Multi-Option
Adjustable Rate
Notes, (Huntington National Bank, Columbus, OH
LOC), 5.650%,
8/7/1997 2,145,000
3,400,000 Blackwell Investments, Inc., (Bank One,
Louisiana LOC), 5.690%,
8/7/1997 3,400,000
800,000 Carmel, IN, Telamon Corp. Series 1996-C,
(Huntington National
Bank, Columbus, OH LOC), 5.750%, 8/7/1997 800,000
</TABLE>
PRIME VALUE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)NOTES - VARIABLE--CONTINUED
BANKING--CONTINUED
$ 2,500,000 Carmel, IN, Telamon Corp. Series A, (Huntington
National Bank,
Columbus, OH LOC), 5.750%, 8/7/1997 $ 2,500,000
1,100,000 Carmel, IN, Telamon Corp. Series B, (Huntington
National Bank,
Columbus, OH LOC), 5.750%, 8/7/1997 1,100,000
2,000,000 Chestnut Hills Apartments, Ltd., (Huntington
National Bank,
Columbus, OH LOC), 5.670%, 8/7/1997 2,000,000
8,400,000 Cloquet, MN, Series 1996-B Potlach Corp.,
(Credit Suisse, Zurich
LOC), 5.700%, 8/6/1997 8,400,000
5,518,000 Congregate Care Corp., (Union Bank of
California LOC), 5.830%,
8/6/1997 5,518,000
1,405,000 Continental Commercial Properties, (Huntington
National Bank,
Columbus, OH LOC), 5.650%, 8/7/1997 1,405,000
2,260,000 Continental Downtown Properties, (Huntington
National Bank,
Columbus, OH LOC), 5.650%, 8/7/1997 2,260,000
6,000,000 Dellridge Care Center Limited Partnership,
Series 1997, (First
National Bank of Maryland, Baltimore LOC), 6,000,000
5.748%, 8/6/1997
2,100,000 Hill Dental Co, Inc., (SouthTrust Bank of
Alabama, Birmingham
LOC), 5.680%, 8/8/1997 2,100,000
8,660,000 International Processing Corp., (Bank One,
Kentucky LOC), 5.690%,
8/7/1997 8,660,000
2,500,000 Jeffersonville, IN, Series 1997-B Wayne Steel,
Inc., (Bank One, Ohio,
N.A. LOC), 5.640%, 8/7/1997 2,500,000
6,200,000 Kenny, Donald R. and Cheryl A., Series 1997,
(Star Bank, N.A.,
Cincinnati LOC), 5.700%, 7/31/1997 6,200,000
4,000,000 Lake Sherwood Senior Living Center, LLC, (Union
Planters NB,
Memphis, TN LOC), 5.900%, 8/7/1997 4,000,000
15,000,000 Liquid Asset Backed Securities Trust, Series
1997-1, (Westdeutsche
Landesbank Girozentrale Swap Agreement), 15,000,000
5.680%, 8/15/1997
4,500,000 Melberger, Clifford K. and Ruth B., (PNC Bank,
N.A. LOC), 5.690%,
8/4/1997 4,500,000
12,000,000 National Funding Corp., Series 1994-A,
(American National Bank,
Chicago LOC), 5.560%, 8/7/1997 12,000,000
</TABLE>
PRIME VALUE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)NOTES - VARIABLE--CONTINUED
BANKING--CONTINUED
$ 2,285,000 Panorama Metropolitan District Arapahoe County,
CO, Taxable
Variable Rate Refunding Bonds, Series 1997,
(Banque Nationale de
Paris LOC), 5.800%, 12/1/1997 $ 2,285,000
850,000 Pelham City, IDB, (Columbus Bank and Trust Co.,
GA LOC),
5.850%, 8/7/1997 850,000
1,285,000 Pelham City, IDB, (Columbus Bank and Trust Co.,
GA LOC),
5.850%, 8/7/1997 1,285,000
6,860,000 Pine Ridge Associates, LTD., (Mellon Bank N.A.,
Pittsburgh LOC),
5.700%, 8/6/1997 6,860,000
3,000,000 Poly Foam International, Inc., (National City
Bank, Cleveland,
OH LOC), 5.650%, 8/7/1997 3,000,000
8,500,000 Rubloff-Rockford, LLC, Series 1997, (First of
America Bank -
Illinois LOC), 5.800%, 8/6/1997 8,500,000
17,900,000 Scranton Times, L.P., Series 1997, (PNC Bank,
N.A. LOC), 5.690%,
8/4/1997 17,900,000
2,880,000 Solon, OH, Schneps, (Bank One, Ohio, N.A. LOC),
5.640%,
8/7/1997 2,880,000
1,230,000 Southeast Regional Holdings, LLC, (Series
1995-A), (Columbus
Bank and Trust Co., GA LOC), 5.850%, 8/7/1997 1,230,000
10,400,000 Southern Coil Processing, Inc. Notes (AmSouth
Bank LOC),
5.700%, 8/7/1997 10,400,000
1,720,000 Team Rahal of Mechanicsburg, Inc., Series 1997,
(Huntington
National Bank, Columbus, OH LOC), 5.650%, 1,720,000
8/7/1997
1,880,000 Team Rahal, Inc., Series 1997, (Huntington
National Bank,
Columbus, OH LOC), 5.650%, 8/7/1997 1,880,000
1,300,000 Tipton, Indiana, MCJS, LLC Project Series 1997,
(Bank One,
Indianapolis, IN LOC), 5.640%, 8/7/1997 1,300,000
1,764,000 Vista Funding Corp., (Series 1995-A), (Star
Bank, N.A.,
Cincinnati LOC), 5.760%, 8/7/1997 1,764,000
4,957,000 Westcourt, (Bank One, Texas N.A. LOC), 5.690%, 4,957,000
8/7/1997
Total 224,744,000
</TABLE>
PRIME VALUE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)NOTES - VARIABLE--CONTINUED
FINANCE - EQUIPMENT--0.5%
$ 5,000,000 Comdisco, Inc., 144A Notes, 5.933%, 8/26/1997 $ 5,000,000
FINANCE - RETAIL--0.2%
2,000,000 (b)AFS Insurance Premium Receivables Trust,
(Series 1994-A), 5.680%,
8/15/1997 2,000,000
INSURANCE--3.6%
5,000,000 (b)Jackson National Life Insurance Company, 5,000,000
5.900%, 8/25/1997
29,584,777 Liquid Asset Backed Securities Trust, Series
1997-3 Senior Notes,
(Westdeutsche Landesbank Girozentrale Swap
Agreement,
Guaranteed by AMBAC), 5.751%, 9/28/1997 29,584,777
Total 34,584,777
TOTAL NOTES - VARIABLE 266,328,777
SHORT-TERM MUNICIPAL--0.1%
1,000,000 Colorado Health Facilities Authority, Series B,
(Bank One,
Colorado LOC), 5.690%, 12/1/1997 1,000,000
(D)REPURCHASE AGREEMENTS--23.8%
30,600,000 Bear, Stearns and Co., 5.770%, dated 7/31/1997, 30,600,000
due 8/1/1997
40,000,000 Chase Government Securities, Inc., 5.870%,
dated 7/31/1997,
due 8/1/1997 40,000,000
15,000,000 Fuji Government Securities, Inc., 5.800%, dated
7/31/1997,
due 8/1/1997 15,000,000
30,000,000 Goldman Sachs Group, LP, 5.850%, dated 30,000,000
7/31/1997, due 8/1/1997
</TABLE>
PRIME VALUE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(D)REPURCHASE AGREEMENTS--CONTINUED
$ 10,000,000 Goldman Sachs Group, LP, 5.880%, dated $ 10,000,000
7/31/1997, due 8/1/1997
30,000,000 Greenwich Capital Markets, Inc., 5.850%, dated
7/31/1997,
due 8/1/1997 30,000,000
30,000,000 HSBC Securities, Inc., 5.850%, dated 7/31/1997, 30,000,000
due 8/1/1997
15,000,000 PaineWebber Group, Inc., 5.790%, dated 15,000,000
7/31/1997, due 8/1/1997
30,000,000 Toronto Dominion Securities (USA) Inc., 5.850%,
dated 7/31/1997,
due 8/1/1997 30,000,000
TOTAL REPURCHASE AGREEMENTS 230,600,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $ 970,262,170
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase for
discount issues, or the coupon for interest bearing issues.
(b) Denotes a restricted security which is subject to restrictions on
resale under Federal Securities laws. At July 31, 1997, these
securities amounted to $57,000,000 which represents 5.9% of net
assets.
(c) Current rate and next reset date shown.
(d) The repurchase agreements are fully collateralized by U.S.
government and/or agency obligations based on market prices at the
date of the portfolio. The investments in the repurchase
agreements are through participation in joint accounts with other
Federated funds.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($968,740,037) at July 31, 1997.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation FSA --Financial
Security Assurance GTD --Guaranty IDA --Industrial Development
Authority IDB --Industrial Development Bond LLC --Limited Liability
Corporation LOC --Letter of Credit LP --Limited Partnership PLC
- --Public Limited Company
(See Notes which are an integral part of the Financial Statements)
PRIME VALUE OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $ 230,600,000
Investments in securities 739,662,170
Total investments in securities, at amortized cost and value $970,262,170
Cash 575,610
Income receivable 2,503,717
Total assets 973,341,497
LIABILITIES:
Income distribution payable 4,553,886
Accrued expenses 47,574
Total liabilities 4,601,460
NET ASSETS for 968,740,037 shares outstanding $968,740,037
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$822,486,255 / 822,486,255 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$132,879,574 / 132,879,574 shares outstanding $1.00
INSTITUTIONAL CAPITAL SHARES:
$13,374,208 / 13,374,208 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME VALUE OBLIGATIONS FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JULY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $17,168,293
EXPENSES:
Investment advisory fee $ 610,842
Administrative personnel and services fee 230,593
Custodian fees 35,478
Transfer and dividend disbursing agent fees and expenses 20,203
Directors'/Trustees' fees 3,069
Auditing fees 6,303
Legal fees 1,953
Portfolio accounting fees 69,076
Shareholder services fee--Institutional Shares 662,081
Shareholder services fee--Institutional Service Shares 86,816
Shareholder services fee--Institutional Capital Shares 14,656
Share registration costs 16,579
Printing and postage 13,243
Insurance premiums 2,932
Taxes 2,417
Miscellaneous 3,901
Total expenses 1,780,142
Waivers--
Waiver of investment advisory fee $(578,130) Waiver of
administrative personnel and services fee (44,021) Waiver of
transfer and dividend disbursing agent fees and expenses (9,878)
Waiver of portfolio accounting fees (33,418) Waiver of
shareholder services fee--Institutional Shares (662,081) Waiver
of shareholder services fee--Institutional Capital (8,793) Shares
Total waivers (1,336,321)
Net expenses 443,821
Net investment income $16,724,472
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME VALUE OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
JULY 31, 1997 JANUARY 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 16,724,472 $ 57,298,613
Net realized gain (loss) on investments -- (1,090,952)
Change in net assets resulting from operations 16,724,472 56,207,661
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (14,581,672) (56,210,350)
Institutional Service Shares (1,824,525) (1,082,127)
Institutional Capital Shares (318,275) (6,136)
Change in net assets resulting from
distributions
to shareholders (16,724,472) (57,298,613)
CAPITAL CONTRIBUTION -- 1,330,378
SHARE TRANSACTIONS--
Proceeds from sale of shares 5,041,265,057 19,361,183,773
Net asset value of shares issued to shareholders
in
payment of distributions declared 9,038,566 26,082,775
Cost of shares redeemed (4,507,978,858) (21,735,853,130)
Change in net assets resulting from share 542,324,765 (2,348,586,582)
transactions
Change in net assets 542,324,765 (2,348,347,156)
NET ASSETS:
Beginning of period 426,415,272 2,774,762,428
End of period $ 968,740,037 $ 426,415,272
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME VALUE OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JULY 31, YEAR ENDED JANUARY 31,
1997 1997 1996 1995 1994(A)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.06 0.04 0.03
LESS DISTRIBUTIONS
Distributions from net investment (0.03) (0.05) (0.06) (0.04) (0.03)
income
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.74% 5.41% 6.10% 4.51% 3.21%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.12%* 0.16% 0.17% 0.09% 0.07%*
Net investment income 5.51%* 5.29% 5.93% 4.20% 3.23%*
Expense waiver/reimbursement(c) 0.46%* 0.15% 0.08% 0.16% 0.29%*
SUPPLEMENTAL DATA
Net assets, end of period (000 $822,486 $387,994 $2,754,390 $1,470,317 $3,981,184
omitted)
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from February 8, 1993 (date of
initial public investment) to January 31, 1994.
(b) Based on net asset value, which does not reflect the sales charge
or contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense
and net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
PRIME VALUE OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JULY 31, YEAR ENDED JANUARY 31,
1997 1997 1996 1995 1994(A)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.06 0.04 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.06) (0.04) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.61% 5.15% 5.84% 4.26% 1.26%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.36%* 0.41% 0.42% 0.34% 0.32%*
Net investment income 5.25%* 5.05% 5.68% 3.95% 2.98%*
Expense waiver/reimbursement(c) 0.22%* 0.16% 0.08% 0.16% 0.29%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $132,880 $18,415 $20,372 $21,739 $17,504
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from September 1, 1993 (date of
initial public offering) to January 31, 1994.
(b) Based on net asset value, which does not reflect the sales charge
or contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense
and net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
PRIME VALUE OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL CAPITAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
(UNAUDITED) ENDED
JULY 31, JANUARY 31,
1997 1997(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
TOTAL RETURN(B) 2.68% 5.26%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.23%* 0.28%
Net investment income 5.43%* 5.17%
Expense waiver/reimbursement(c) 0.37%* 0.31%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $13,374 $20,006
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from February 1, 1996 (date of
initial public offering) to January 31, 1997.
(b) Based on net asset value, which does not reflect the sales charge
or contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense
and net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
PRIME VALUE OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 (UNAUDITED)
1. ORGANIZATION
Money Market Obligations Trust II (the "Trust") is registered under
the Investment Company Act of 1940, as amended (the "Act") as an
open-end, management investment company. The Trust consists of three
portfolios. The financial statements included herein are only those of
Prime Value Obligations Fund (the "Fund"). The financial statements of
the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held.
The Fund offers three classes of shares: Institutional Shares, Institutional
Service Shares and Institutional Capital Shares.
The investment objective of the Fund is to provide a high level of
current income consistent with stability of principal and liquidity.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. These policies are in conformity with generally accepted
accounting principles.
INVESTMENT VALUATIONS-- The Fund uses the amortized cost method to
value its portfolio securities in accordance with Rule 2a-7 under the
Act.
REPURCHASE AGREEMENTS-- It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under
repurchase agreement transactions. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value
of each repurchase agreement's collateral to ensure that the value of
collateral at least equals the repurchase price to be paid under the
repurchase agreement transaction.
The Fund will only enter into repurchase agreements with banks and
other recognized financial institutions, such as broker/dealers, which
are deemed by the Fund's adviser to be creditworthy pursuant to the
guidelines and/or standards reviewed or established by the Board of
Trustees (the "Trustees"). Risks may arise from the potential
inability of counterparties to honor the terms of the repurchase
agreement. Accordingly, the Fund could receive less than the
repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS-- Interest income and
expenses are accrued daily. Bond premium and discount, if applicable,
are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the
ex-dividend date.
PRIME VALUE OBLIGATIONS FUND
FEDERAL TAXES-- It is the Fund's policy to comply with the provisions
of the Code applicable to regulated investment companies and to
distribute to shareholders each year substantially all of its income.
Accordingly, no provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS-- The Fund may engage in
when-issued or delayed delivery transactions. The Fund records
when-issued securities on the trade date and maintains security
positions such that sufficient liquid assets will be available to make
payment for the securities purchased. Securities purchased on a
when-issued or delayed delivery basis are marked to market daily and
begin earning interest on the settlement date.
RESTRICTED SECURITIES-- Restricted securities are securities that may
only be resold upon registration under federal securities laws or in
transactions exempt from such registration. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. In some cases, the restricted securities may be resold
without registration upon exercise of a demand feature. Such
restricted securities may be determined to be liquid under criteria
established by the Trustees. The Fund will not incur any registration
costs upon such resales. Restricted securities are valued at amortized
cost in accordance with Rule 2a-7 under the Act.
Additional information on each restricted security held at July 31,
1997, is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
AFS Insurance Premium Receivables Trust 6/23/1997 $2,000,000
Goldman Sachs Group 7/28/1997 20,000,000
Jackson National Life Insurance Company 4/25/1997 5,000,000
SALTS II Cayman Islands Corp. 6/11/1997 15,000,000
SALTS III Cayman Island Corp. 7/23/1997 10,000,000
SALTS III Cayman Island Corp. 6/05/1997 5,000,000
USE OF ESTIMATES-- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those
estimated.
OTHER-- Investment transactions are accounted for on the trade date.
PRIME VALUE OBLIGATIONS FUND
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest ($0.001
par value) for each class of shares. At July 31, 1997, capital paid-in
aggregated $968,740,037. Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
INSTITUTIONAL SHARES JULY 31, 1997 1997
<S> <C> <C>
Shares sold 4,259,259,505 19,036,179,355
Shares issued to shareholders in payment of distributions 8,354,751 26,074,950
declared
Shares redeemed (3,833,122,461) (21,428,886,085)
Net change resulting from Institutional Share transactions 434,491,795 (2,366,631,780)
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
INSTITUTIONAL SERVICE SHARES JULY 31, 1997 1997
<S> <C> <C>
Shares sold 610,841,294 305,004,232
Shares issued to shareholders in payment of distributions declared 450,220 2,107
Shares redeemed (496,826,748) (306,966,945)
Net change resulting from Institutional Service Share
transactions 114,464,766 (1,960,606)
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
INSTITUTIONAL CAPITAL SHARES JULY 31, 1997 1997
<S> <C> <C>
Shares sold 171,164,258 20,000,186
Shares issued to shareholders in payment of distributions declared 233,595 5,718
Shares redeemed (178,029,649) --
Net change resulting from Institutional Capital Share
transactions (6,631,796) 20,005,904
<CAPTION>
PRIME VALUE OBLIGATIONS FUND
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
CLASS C SHARES JULY 31, 1997 1997(A)
<S> <C> <C>
Shares sold -- --
Shares issued to shareholders in payment of distributions declared -- --
Shares redeemed -- (100)
Net change resulting from Class C Share transactions -- (100)
Net change resulting from Fund share transactions 542,324,765 (2,348,586,582)
</TABLE>
(a) As of November 15, 1996, the Fund's Class C Shares were no longer
operational.
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE-- Federated Management, the Fund's investment
adviser (the "Adviser"), receives for its services an annual
investment advisory fee equal to 0.20% of the Fund's average daily net
assets. The Adviser may voluntarily choose to waive any portion of its
fee. The Adviser can modify or terminate this voluntary waiver at any
time at its sole discretion.
Federated Management became the Fund's investment adviser on November
15, 1996. Prior to November 15, 1996, Lehman Brothers Global Asset
Management (the "former Adviser") served as the Fund's investment
adviser.
CAPITAL CONTRIBUTION-- The former Adviser made a capital contribution
to the Fund, during the period ended November 15, 1996, of an amount
equal to the accumulated net realized loss on investments balance
carried by the Fund.
These transactions resulted in a permanent book and tax difference. As
such, the paid-in capital and accumulated net realized gain/loss
accounts have been adjusted accordingly. This adjustment did not
affect net investment income, net realized gains/losses, or net
assets.
ADMINISTRATIVE FEE-- Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with
administrative personnel and services. The fee paid to FServ is based
on the level of average aggregate daily net assets of all funds
advised by subsidiaries of Federated Investors for the period. The
administrative fee received during the period of the Administrative
Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares. FServ became the Fund's
administrator on November 15, 1996. Prior to November 15, 1996, First
Data Investors Services Group ("FDISG") served as the Fund's
administrator.
SHAREHOLDER SERVICES FEE-- Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will
pay FSS up to 0.25% of average daily net assets of the Fund for the
period. The fee paid to FSS is used to finance certain services for
shareholders and to maintain shareholder accounts. FSS may voluntarily
choose to waive any portion of its fee. FSS can modify or terminate
this voluntary waiver at any time at its sole discretion. FSS became
the Fund's shareholder servicing agent on November 15, 1996.
PRIME VALUE OBLIGATIONS FUND
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES-- FServ,
through its subsidiary, Federated Shareholder Services Company
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number of
accounts and transactions made by shareholders. FSSC became the Fund's
transfer and dividend disbursing agent on November 15, 1996. Prior to
November 15, 1996, FDISG served as the Fund's transfer and dividend
disbursing agent.
PORTFOLIO ACCOUNTING FEES-- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level of
the Fund's average daily net assets for the period, plus out-of-pocket
expenses. FServ became the Fund's portfolio accountant on November 15,
1996.
GENERAL-- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
J. Christopher Donahue
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
J. Christopher Donahue
President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
J. Crilley Kelly
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board,
or any other government agency. Investment in mutual funds involves
risk, including possible loss of principal. Although money market
funds seek to maintain a stable net asset value of $1.00 per share,
there is no assurance that they will be able to do so.
This report is authorized for distribution to prospective investors
only when preceded or accompanied by the fund's prospectus which
contains facts concerning its objective and policies, management fees,
expenses and other information.
PRIME VALUE
OBLIGATIONS FUND
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JULY 31, 1997
[Graphic]
Federated Investors
Federated Securities Corp., Distributor
Cusip 608912606
Cusip 608912408
Cusip 608912507
G01999-06 (9/97)
[Graphic]
