MONEY MARKET OBLIGATIONS TRUST II, 485APOS, 1999-01-29

MONEY MARKET OBLIGATIONS TRUST II
485APOS, 1999-01-29

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1933 Act File No. 33-55034
1940 Act File No. 811-7364

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
------

Pre-Effective Amendment No. .........................
--------- ------

Post-Effective Amendment No. 16 ......................... X
--------- -------

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X

Amendment No. 20 .........................................X
------- ------

MONEY MARKET OBLIGATIONS TRUST II

(Exact Name of Registrant as Specified in Charter)

Federated Investors Funds

5800 Corporate Drive

Pittsburgh, Pennsylvania 15237-7000

(Address of Principal Executive Offices)

(412) 288-1900

(Registrant's Telephone Number)

John W. McGonigle, Esquire

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)

(Notices should be sent to the Agent for Service)

It is proposed that this filing will become effective:

_ immediately upon filing pursuant to paragraph (b)
on , pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i)

X on MARCH 31, 1999, pursuant to paragraph (a) (i)
75 days after filing pursuant to paragraph (a)(ii)
on _________________ pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Copies to:

Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP

2101 L Street, N.W.
Washington, DC 20037

PROSPECTUS

PRIME CASH OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SHARES

A money market mutual fund seeking to achieve current income consistent
with stability of principal and liquidity.

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.

CONTENTS

Risk/Return Summary
What are the Fund's Fees and Expenses?
What are the Fund's Investment Strategies?
What are the Principal Securities in Which the Fund Invests?
What are the Specific Risks of Investing in the Fund?
What do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem Shares
Account and Share Information
Who Manages the Fund?
Financial Information

March 31, 1999

<PAGE>

RISK/RETURN SUMMARY

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The Fund is a money market fund which seeks to maintain a stable net asset
value of $1.00. The Fund's investment objective is current income consistent
with stability of principal and liquidity. While there is no assurance that the
Fund will achieve its investment objective, it endeavors to do so by following
the strategies and policies described in this prospectus.

This investment objective may be changed by the Fund's Trustees without
shareholder approval.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high quality fixed income securities
maturing in one year or less. The average maturity of the Fund's portfolio will
be 90 days or less.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

Although the Fund seeks to maintain a stable net asset value, it is
possible to lose money investing in the Fund.

The shares offered by this prospectus are not deposits or obligations of
any bank, are not endorsed or 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.

Although the Fund seeks to maintain a stable net asset value, it is
possible to lose money investing in the Fund. The Shares offered by this
prospectus are not deposits or obligations of any bank, are not endorsed or
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.

<PAGE>

RISK/RETURN BAR CHART AND TABLE

The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Institutional Shares as of the calendar
year-end for each of five years.

The `y' axis reflects the "% Total Return" beginning with "0.00%" and
increasing in increments of 1.00% up to 7.00%.

The `x' axis represents calculation periods from the earliest calendar year
end of the Institutional Share's start of business through the calendar year
ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Shares for each
calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1998, The percentages noted are: 4.29%, 6.08%,
5.41%, 5.57% and 5.56%, respectively. The Fund's Institutional Shares are not
sold subject to a sales charge (load). Hence, the total returns displayed above
are based upon the net asset value.

The Fund's Institutional Shares total return from January 1, 1998 to
December 31, 1998 was 1.31%.

Within the period shown in the Chart, the Fund's highest quarterly return
was 1.53% (quarter ended June 30, 1995). Its lowest quarterly return was 0.81%
(quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN

LIFE OF THE FUND1 1 YEAR 5 YEARS
Institutional Shares 5.05% 5.56% 5.38%

1 The Fund's Institutional Shares start of performance date was February 8,
1993.

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's actual total return on
a yearly basis. The table shows the Fund's average annual total returns for the
calendar periods ended December 31, 1998.

The Fund's 7-DAY NET YIELD as of December 31, 1998 was 5.10%.*

*Investors may call the Fund at 1-800-341-7400 to acquire the current 7-Day
Net Yield. Past performance does not necessarily predict future performance.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?

PRIME CASH OBLIGATIONS FUND

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund's Institutional Shares.
<TABLE>
<CAPTION>

SHAREHOLDER FEES
<S> <C>
FEES PAID DIRECTLY FROM YOUR INVESTMENT
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of None
offering price)
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase None
price or redemption proceeds, as applicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other None
Distributions) (as a percentage of offering price).
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None

ANNUAL FUND OPERATING EXPENSES[Before Reimbursements)(1)

EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS (AS A PERCENTAGE OF AVERAGE NET
ASSETS)
Management Fee (2) 0.20%
Distribution (12b-1) Fee(3) None
Shareholder Services Fee(4) 0.25%
Other Fees(5) ____%
Total Annual Fund Operating Expenses ____%
- ------------------------------------------------------------------------------

</TABLE>

(1) Although not contractually obligated to do so, the

distributor will reimburse certain amounts. These are shown

below along with the net expenses the Fund actually paid for
the fiscal year ended January 31, 1999.

- ------------------------------------------------------------------
Reimbursements of Fund Expenses ___%

- ------------------------------------------------------------------
Total Actual Annual Fund Operating Expenses (after ___%
reimbursements)

- ------------------------------------------------------------------

(2) The adviser voluntarily waived a portion of the management fee. The adviser
can terminate this voluntary waiver at any time. The management fee paid by
the Fund ( after the voluntary waiver) was ___% for the year ended 1/31/99.

(3) Institutional Shares did not pay or accrue the distribution (12b-1) fee
during the fiscal year ended 1/31/98. Institutional Shares have no present
intention of paying or accruing the distribution (12b-1) fee during the
year ended 1/31/99.

(4) The shareholder services fee for Institutional Shares has been voluntarily
reduced. This voluntary reduction can be terminated at any time. The
shareholder services fee paid by the Fund (after the voluntary reduction)
was ___% for the year ended 1/31/99. Institutional Shares have no present
intention of paying or accruing the shareholder services fee during the
year ended 1/31/99.

(5) The adviser voluntarily reimbursed certain operating expenses of the Fund.
The adviser can terminate this voluntary reimbursement at any time. Total
other expenses paid by the Fund ( after the voluntary reimbursement)
was___% for the year ended 1/31/99.

<PAGE>

EXAMPLE

The following Example is intended to help you compare the cost of investing
in the Fund's Institutional Shares with the cost of investing in other mutual
funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Shares for the time periods indicated and then redeem all of your shares at the
end of those periods. Expenses assuming no redemption are also shown. The
Example also assumes that your investment has a 5% return each year and that the
Fund's Institutional Shares operating expenses are BEFORE REIMBURSEMENTS as
estimated above and remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:

INSTITUTIONAL SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Expenses assuming redemption $____ $____ $____ $____
- -----------------------------------
Expenses assuming no redemption $____ $____ $____ $____
- -----------------------------------

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high quality fixed income securities
maturing in one year or less. The average maturity of the Fund's portfolio will
be 90 days or less.

In order to select individual investments, the Fund's Adviser performs a
fundamental credit analysis to develop an approved list of issuers and
securities that meet the Adviser's minimum credit standards. The Adviser
assesses likely movements in interest rates based upon general economic and
market conditions. Considering this assessment, the Adviser targets an average
portfolio maturity range. The Adviser generally shortens the portfolio's average
maturity when it expects interest rates to rise and extends the maturity when it
expects interest rates to fall. In adjusting the portfolio's average maturity,
the Adviser selects among investments with different maturities comparing their
relative returns.

INDUSTRY CONCENTRATION

The Fund may invest 25% or more of its assets in obligations of issuers in
the banking industry or in obligations, such as repurchase agreements, secured
by such obligations; provided that there is no limitation with respect to
investments in U.S. government securities or, in bank instruments issued or
enhanced by approved banks.

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

CORPORATE DEBT SECURITIES are issued by businesses. Short-term notes,
variable rate demand notes, and commercial paper are the most prevalent types of
corporate debt securities that the Fund purchases.

COMMERCIAL PAPER is an issuer's draft or note with a maturity of less than
nine months. Companies typically issue commercial paper to Fund current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. Commercial paper may default
if the issuer cannot continue to obtain liquidity in this fashion.

DEMAND INSTRUMENTS are corporate debt securities that the issuer must repay
upon demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Fund treats
demand instruments as short-term securities, even though their stated maturity
may extend beyond one year.

BANK INSTRUMENTS are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances.

ASSET BACKED SECURITIES are payable from pools of debt obligations. Almost
any type of fixed income assets (including other fixed income securities) may be
used to create an asset backed security. However, most asset backed securities
involve consumer or commercial debts with maturities of less than ten years.
Asset backed securities may take the form of commercial paper or notes, in
addition to simple ownership interests in the underlying debt obligations.

CREDIT ENHANCEMENT consists of an arrangement in which one company agrees
to pay amounts due on a fixed income security after the issuer defaults. In some
cases the other company makes all payments directly to the security holders and
receives reimbursement from the issuer. Normally, the company providing such
credit enhancement has greater financial resources and liquidity than the
issuer. This may lead the Adviser to evaluate the credit risk of a fixed income
security based soley upon its credit enhancement. The Adviser purchases fixed
income securities that have been credit enhanced.

REPURCHASE AGREEMENTS are transactions in which the Fund buys a security
from a dealer or bank and agrees to sell the security back at a mutually agreed
upon time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return for the transaction.

INVESTMENT RATINGS

The Fund invests in high-quality money market instruments that are either
rated in the highest short-term rating category by one or more nationally
recognized statistical rating organizations or are of comparable quality to
securities having such ratings.

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

Although there are many factors which may effect an investment in the Fund,
the principal risks of investing in a corporate money market fund are described
below.

MARKET RISK

Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise, prices
of fixed income securities fall.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

CREDIT RISK

Credit risk is the possibility that an issuer will default (fails to repay
interest and principal when due). If an issuer defaults, the Fund may lose
money. Money market funds try to minimize this risk by purchasing higher quality
securities.

Many fixed income securities receive credit ratings from companies such as
Standard & Poor's and Moody's Investor Services. Fixed income securities receive
different credit ratings depending on the rating company's assessment of the
likelihood of default by the issuer. The lower the credit rating, the greater
the credit risk.

SECTOR RISKS

A substantial part of the Fund's portfolio may be comprised of fixed income
securities and loans by companies in the banking industry. As a result, the Fund
will be more susceptible to any economic, business, political, or other
developments which generally affect these issuers.

WHAT DO SHARES COST?

You can purchase or redeem Shares any day the New York Stock Exchange
(NYSE) is open. When the Fund receives your transaction request in proper form,
it is processed at the next determined net asset value (NAV). The Fund does not
charge a front-end sales charge. NAV is determined at 12:00 noon and 3:00 p.m.
(Eastern time) and as of the end of regular trading (normally 4:00 p.m. Eastern
time) each day the NYSE is open.

The required minimum initial investment for Fund Shares is $1,000,000.
There is no required minimum subsequent investment amount.

An account may be opened with a smaller amount as long as the $1,000,000
minimum is reached within 90 days. An institutional investor's minimum
investment is calculated by combining all accounts it maintains with the Fund.
Accounts established through investment professionals may be subject to a
smaller minimum investment amount. Keep in mind that investment professionals
may charge you fees for their services in connection with your Share
transactions.

HOW IS THE FUND SOLD?

The Fund offers three share classes: Institutional Shares, Institutional
Service Shares and Institutional Capital Shares, each representing interests in
a single portfolio of securities. This prospectus relates only to Institutional
Shares. Each share class has different expenses, which affect their performance.
Contact your investment professional or call 1-800-341-7400 for more information
concerning the other classes.

The Fund's Distributor markets the Shares described in this prospectus to
institutions acting in an agency or fiduciary capacity. The Distributor and its
affiliates may pay out of their assets other amounts (including items of
material value) to investment professionals for marketing and servicing Shares.
The Distributor is a subsidiary of Federated Investors, Inc. (Federated).

HOW TO PURCHASE SHARES

You may purchase Shares through an investment professional or directly from
the Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

o Establish an account with the investment professional; and

o Submit your purchase order to the investment professional before 3:00 p.m.
(Eastern time). You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment
by 3:00 p.m. (Eastern time). You will become the owner of Shares and
receive dividends when the Fund receives your payment.

Investment professionals should send payments according to the instructions
in the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed New Account
Form; and

o Send your payment to the Fund by Federal Reserve wire or check.

You will become the owner of Shares after the Fund receives your wire or
your check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees the Fund or its transfer agent incurs.

An institution may establish an account and place an order by calling the
Fund and will become a shareholder after the Fund receives the order.

BY WIRE
Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire

ABA Number 011000028
Attention: EDGEWIRE

Wire Order Number, Dealer Number, or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on
the check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE
that requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317

Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund
will not accept third-party checks (checks originally payable to someone other
than you or The Federated Funds). Orders by mail are considered received when
payment by check is converted into federal funds (normally the business day
after the check is received) and Shares begin earning dividends the next day.

BY INVEST-BY-PHONE

Once you establish an account, you may use the Fund's Invest-By-Phone
privilege for future Share purchases if you have an account with a bank that is
an Automated Clearinghouse member. To apply, call the Fund for an authorization
form. You may use Invest-By-Phone to purchase Shares approximately two weeks
from the date you file the form with Federated Shareholder Services Company.

BY AUTOMATED CLEARINGHOUSE (ACH)

Once you have opened an account, you may purchase additional Shares through
a depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the New Account Form.

HOW TO REDEEM SHARES

You should redeem Shares:

o through an investment professional if you purchased Shares through an
investment professional; or

o directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

Submit your redemption request to your investment professional by the end
of regular trading on the NYSE (normally 4:00 p.m. Eastern time). Investment
professionals are responsible for promptly submitting redemption requests and
providing proper written redemption instructions as outlined below.

DIRECTLY FROM THE FUND

BY TELEPHONE

You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions. If you call before
3:00 p.m. (Eastern time) your redemption will be wired to you the same day. You
will not receive that day's dividend.

If you call after 3:00 p.m. (Eastern time) your redemption will be wired to
you the following business day. You will receive that day's dividend

BY MAIL

You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317
All requests must include:

o Fund Name and Share Class, account number and account registration;

o amount to be redeemed; and

o signatures of all Shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

SIGNATURE GUARANTEES
Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last thirty days; or

o a redemption is payable to someone other than the shareholder(s) of record.

A signature guarantee is designed to protect your account from fraud.
Obtain a signature guarantee from a bank or trust company, savings association,
credit union or broker, dealer, or Securities Exchange member. A NOTARY PUBLIC
CANNOT PROVIDE A SIGNATURE GUARANTEE.

PAYMENT METHODS FOR REDEMPTIONS

Your redemption proceeds will be mailed by check to your address of record.
The following payment options are available if you complete the appropriate
section of the New Account Form or an Account Service Options Form. These
payment options require a signature guarantee if they were not established when
the account was opened:

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a
Federal Reserve System member.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day
after receiving a request in proper form. Payment may be delayed up to seven
days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund
if those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Fund will record your telephone instructions. If the Fund does not
follow reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

The Fund no longer issues share certificates. If you are redeeming Shares
represented by certificates previously issued by the Fund, you must return the
certificates with your written redemption request. For your protection, send
your certificates by registered or certified mail, but do not endorse them.

ACCOUNT AND SHARE INFORMATION

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases and redemptions. In addition,
you will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

The Fund declares any dividends daily and pays them monthly to
shareholders. If you purchase shares by wire, you begin earning dividends on the
day your wire is received. If you purchase shares by check, you begin earning
dividends on the business day after the Fund receives your check. In either
case, you earn dividends through the day your redemption request is received.

In addition, the Fund pays any capital gains at least annually. Your
dividends and capital gains distributions will be automatically reinvested in
additional Shares without a sales charge, unless you elect cash payments.

If you purchase Shares just before a Fund declares a dividend or capital
gain distribution, you will pay the full price for the Shares and then receive a
portion of the price back in the form of a taxable distribution, whether or not
you reinvest the distribution in Shares. Therefore, you should consider the tax
implications of purchasing Shares shortly before the Fund declares a dividend or
capital gain. Contact your investment professional or the Fund for information
concerning when dividends and capital gains will be paid.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, accounts
may be closed if redemptions cause the account balance to fall below the minimum
initial investment amount. Before an account is closed, you will be notified and
allowed 30 days to purchase additional Shares to meet the minimum.

TAX INFORMATION

The Fund sends an annual statement of your account activity to assist you
in completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

WHO MANAGES THE FUND?

The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Management. The Adviser manages the Fund's assets, including
buying and selling portfolio securities. The Adviser's address is Federated
Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.

The Adviser and other subsidiaries of Federated advise approximately 175
mutual funds and separate accounts, which total more than $111 billion in assets
as of December 31, 1998. Federated was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees. More than 4,000 investment professionals make Federated Funds
available to their customers.

<PAGE>

ADVISORY FEES

The Adviser receives an annual investment advisory fee of 0.20% of the
Fund's average daily net assets. The Adviser may voluntarily waive a portion of
its fee or reimburse the Fund for certain operating expenses.

YEAR 2000 READINESS

The "Year 2000" problem is the potential for computer errors or failures
because certain computer systems may be unable to interpret dates after December
31, 1999. The Year 2000 problem may cause systems to process information
incorrectly and could disrupt businesses that rely on computers, like the Fund.

While it is impossible to determine in advance all of the risks to the
Fund, the Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.

The Fund's service providers are making changes to their computer systems
to fix any Year 2000 problems. In addition, they are working to gather
information from third-party providers to determine their Year 2000 readiness.

Year 2000 problems would also increase the risks of the Fund's investments.
To assess the potential effect of the Year 2000 problem, the Adviser is
reviewing information regarding the Year 2000 readiness of issuers of securities
the Fund may purchase. The financial impact of these issues for the Fund is
still being determined. There can be no assurance that potential Year 2000
problems would not have a material adverse effect on the Fund.

FINANCIAL HIGHLIGHTS

The following Financial Highlights will help you understand the Fund's
financial performance for its past five fiscal years, or since inception, if the
life of the Fund is shorter. Some of the information is presented on a per share
basis. Total returns represent the rate an investor would have earned (or lost)
on an investment in the Fund, assuming reinvestment of any dividends and capital
gains.

This information has been audited by Ernst & Young LLP, whose report, along
with the Fund's audited financial statements, is included in this Prospectus.

[Financial Highlights and Financial Statements to be filed by Amendment.]

<PAGE>

PRIME CASH OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SHARES

A Statement of Additional Information (SAI) dated March 31, 1999, is
incorporated by reference into this prospectus. To obtain the SAI and other
information without charge, call your investment professional or the Fund at
1-800-341-7400.

You can obtain information about the Fund (including the SAI) by visiting
or writing the Public Reference Room of the Securities and Exchange Commission
in Washington, DC 20549-6009 or from the Commission's Internet site at
http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.

INVESTMENT COMPANY ACT FILE NO. 811-7364
CUSIP 608912705

G01881-03-IS (3/99)

PROSPECTUS

PRIME CASH OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SERVICE SHARES

A money market mutual fund seeking to achieve current income consistent
with stability of principal and liquidity.

CONTENTS

March 31, 1999

<PAGE>

RISK/RETURN SUMMARY

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

This investment objective may be changed by the Fund's Trustees without
shareholder approval.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high quality fixed income securities
maturing in one year or less. The average maturity of the Fund's portfolio will
be 90 days or less.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

Although the Fund seeks to maintain a stable net asset value, it is
possible to lose money investing in the Fund.

<PAGE>

RISK/RETURN BAR CHART AND TABLE

The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Institutional Service Shares as of the
calendar year-end for each of five years.

The `y' axis reflects the "% Total Return" beginning with "0.00%" and
increasing in increments of 1.00% up to 6.00%.

The `x' axis represents calculation periods from the earliest calendar year
end of the Institutional Service Share's start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Service Shares for
each calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1998, The percentages noted are: 4.03%, 5.82%,
5.15%, 5.31% and 5.29%, respectively. The Fund's Institutional Service Shares
are not sold subject to a sales charge (load). Hence, the total returns
displayed above are based upon the net asset value.

The Fund's Institutional Service Shares total return from January 1, 1998
to December 31, 1998 was 1.24%.

Within the period shown in the Chart, the Fund's highest quarterly return
was 1.46% (quarter ended June 30, 1995). Its lowest quarterly return was 0.75%
(quarter ended
March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN

LIFE OF THE FUND1 1 YEAR 5 YEARS
Institutional Service Shares 4.98% 5.29% 5.12%

1 The Fund's Institutional Service Shares start of performance date was
September 2, 1993.

The Fund's 7-DAY NET YIELD as of December 31, 1998 was 4.85%.*

*Investors may call the Fund at 1-800-341-7400 to acquire the current 7-Day
Net Yield. Past performance does not necessarily predict future performance.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?

PRIME CASH OBLIGATIONS FUND

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund's Institutional Service Shares.
<TABLE>
<CAPTION>

ANNUAL FUND OPERATING EXPENSES[Before Reimbursements)(1)

EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS (AS A PERCENTAGE OF AVERAGE NET
ASSETS)
Management Fee (2) 0.20%
Distribution (12b-1) Fee(3) None
Shareholder Services Fee(4) 0.25%
Other Fees(5) ___%
Total Annual Fund Operating Expenses ___%
- ------------------------------------------------------------------------------
</TABLE>

(1) Although not contractually obligated to do so, the

distributor will reimburse certain amounts. These are shown

below along with the net expenses the Fund actually paid for
the fiscal year ended January 31, 1999.

- ------------------------------------------------------------------
Reimbursements of Fund Expenses ___%

- ------------------------------------------------------------------
Total Actual Annual Fund Operating Expenses (after ___%
reimbursements)

- ------------------------------------------------------------------

(3) Institutional Service Shares did not pay or accrue the distribution (12b-1)
fee during the fiscal year ended 1/31/98. Institutional Service Shares have
no present intention of paying or accruing the distribution (12b-1) fee
during the year ended 1/31/99.

(4) The shareholder services fee for Institutional Service Shares has been
voluntarily reduced. This voluntary reduction can be terminated at any
time. The shareholder services fee paid by the Fund (after the voluntary
reduction) was ___% for the year ended 1/31/99.

<PAGE>

EXAMPLE

The following Example is intended to help you compare the cost of investing
in the Fund's Institutional Service Shares with the cost of investing in other
mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Service Shares for the time periods indicated and then redeem all of your shares
at the end of those periods. Expenses assuming no redemption are also shown. The
Example also assumes that your investment has a 5% return each year and that the
Fund's Institutional Service Shares operating expenses are BEFORE REIMBURSEMENTS
as estimated above and remain the same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:

INSTITUTIONAL SERVICE SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Expenses assuming redemption $____ $____ $____ $____
- -----------------------------------
Expenses assuming no redemption $____ $____ $____ $____
- -----------------------------------

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high quality fixed income securities
maturing in one year or less. The average maturity of the Fund's portfolio will
be 90 days or less.

INDUSTRY CONCENTRATION

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

BANK INSTRUMENTS are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances.

INVESTMENT RATINGS

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

Although there are many factors which may effect an investment in the Fund,
the principal risks of investing in a corporate money market fund are described
below.

MARKET RISK

Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise, prices
of fixed income securities fall.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

CREDIT RISK

SECTOR RISKS

WHAT DO SHARES COST?

The required minimum initial investment for Fund Shares is $1,000,000.
There is no required minimum subsequent investment amount.

HOW IS THE FUND SOLD?

The Fund offers three share classes: Institutional Shares, Institutional
Service Shares and Institutional Capital Shares, each representing interests in
a single portfolio of securities. This prospectus relates only to Institutional
Service Shares. Each share class has different expenses which affect their
performance. Contact your investment professional or call 1-800-341-7400 for
more information concerning the other classes.

The Fund's Distributor markets the Shares described in this prospectus to
institutions acting in an agency or fiduciary capacity.

The Distributor and its affiliates may pay out of their assets other
amounts (including items of material value) to investment professionals for
marketing and servicing Shares. The Distributor is a subsidiary of Federated
Investors, Inc. (Federated).

HOW TO PURCHASE SHARES

You may purchase Shares through an investment professional or directly from
the Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

o Establish an account with the investment professional; and

Investment professionals should send payments according to the instructions
in the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed New Account
Form; and

o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the
Fund and will become a shareholder after the Fund receives the order.

BY WIRE
Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire

ABA Number 011000028
Attention: EDGEWIRE

Wire Order Number, Dealer Number, or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on
the check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE
that requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317

BY INVEST-BY-PHONE

BY AUTOMATED CLEARINGHOUSE (ACH)

HOW TO REDEEM SHARES

You should redeem Shares:

o through an investment professional if you purchased Shares through an
investment professional; or

o directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

DIRECTLY FROM THE FUND

BY TELEPHONE

You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 3:00 p.m. (Eastern time) your redemption will be wired
to you the same day. You will not receive that day's dividend.

If you call after 3:00 p.m. (Eastern time) your redemption will be wired to
you the following business day. You will receive that day's dividend.

BY MAIL

You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317
All requests must include:

o Fund Name and Share Class, account number and account registration;

o amount to be redeemed; and

o signatures of all Shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

SIGNATURE GUARANTEES
Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last thirty days; or

o a redemption is payable to someone other than the shareholder(s) of record.

PAYMENT METHODS FOR REDEMPTIONS

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a
Federal Reserve System member.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day
after receiving a request in proper form. Payment may be delayed up to seven
days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund
if those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Fund will record your telephone instructions. If the Fund does not
follow reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent
telephone instructions.

SHARE CERTIFICATES

ACCOUNT AND SHARE INFORMATION

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases and redemptions . In addition,
you will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

WHO MANAGES THE FUND?

<PAGE>

ADVISORY FEES

YEAR 2000 READINESS

FINANCIAL INFORMATION

FINANCIAL HIGHLIGHTS

This information has been audited by Ernst & Young LLP, whose report, along
with the Fund's audited financial statements, is included in this Prospectus.

[Financial Highlights and Financial Statements to be filed by Amendment.]

<PAGE>

PRIME CASH OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SERVICE SHARES

INVESTMENT COMPANY ACT FILE NO. 811-7364
CUSIP 608912804

G01881-04-SS (3/99)

PROSPECTUS

PRIME CASH OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL CAPITAL SHARES

A money market mutual fund seeking to achieve current income consistent
with stability of principal and liquidity.

CONTENTS

March 31, 1999

<PAGE>

RISK/RETURN SUMMARY

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

This investment objective may be changed by the Fund's Trustees without
shareholder approval.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high quality fixed income securities
maturing in one year or less. The average maturity of the Fund's portfolio will
be 90 days or less.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

Although the Fund seeks to maintain a stable net asset value, it is
possible to lose money investing in the Fund.

<PAGE>

RISK/RETURN BAR CHART AND TABLE

The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Institutional Capital Shares as of the
calendar year-end for each of four years.

The `y' axis reflects the "% Total Return" beginning with "4.80%" and
increasing in increments of 0.20% up to 6.00%.

The `x' axis represents calculation periods from the earliest calendar year
end of the Institutional Capital Share's start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features four distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Capital Shares for
each calendar year is stated directly at the top of each respective bar, for the
calendar years 1995 through 1998, The percentages noted are: 5.93%, 5.26%, 5.45%
and 5.43%, respectively.. The Fund's Institutional Capital Shares are not sold
subject to a sales charge (load). Hence, the total returns displayed above are
based upon the net asset value.

The Fund's Institutional Capital Shares total return from January 1, 1998
to December 31, 1998 was 1.28%.

Within the period shown in the Chart, the Fund's highest quarterly return
was 1.49% (quarter ended June 30, 1995). Its lowest quarterly return was 1.26%
(quarter ended June 30, 1996).

AVERAGE ANNUAL TOTAL RETURN

LIFE OF THE FUND1 1 YEAR

Institutional Capital Shares 5.49% 5.43%

1 The Fund's Institutional Capital Shares start of performance date was
October 6, 1994.

The Fund's 7-DAY NET YIELD as of December 31, 1998 was 4.98%.*

*Investors may call the Fund at 1-800-341-7400 to acquire the current 7-Day
Net Yield. Past performance does not necessarily predict future performance.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?

PRIME CASH OBLIGATIONS FUND

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund's Institutional Capital Shares.

ANNUAL FUND OPERATING EXPENSES[Before Reimbursements)(1)

EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS (AS A PERCENTAGE OF AVERAGE NET
ASSETS)
Management Fee (2) 0.20%
Distribution (12b-1) Fee(3) None
Shareholder Services Fee(4) 0.25%
Other Fees(5) ___%
Total Annual Fund Operating Expenses ___%
- ------------------------------------------------------------------------------

</TABLE>

(1) Although not contractually obligated to do so, the distributor will
reimburse certain amounts. These are shown below along with the net
expenses the Fund actually paid for the fiscal year ended January 31, 1999.

- ------------------------------------------------------------------
Reimbursements of Fund Expenses ___%

- ------------------------------------------------------------------
Total Actual Annual Fund Operating Expenses (after ___%
reimbursements)

- ------------------------------------------------------------------

(3) Institutional Capital Shares did not pay or accrue the distribution (12b-1)
fee during the fiscal year ended 1/31/98. Institutional Capital Shares have
no present intention of paying or accruing the distribution (12b-1) fee
during the year ended 1/31/99.

(4) The shareholder services fee for Institutional Capital Shares has been
voluntarily reduced. This voluntary reduction can be terminated at any
time. The shareholder services fee paid by the Fund (after the voluntary
reduction) was ___% for the year ended 1/31/99.

<PAGE>

EXAMPLE

The following Example is intended to help you compare the cost of investing
in the Fund's Institutional Capital Shares with the cost of investing in other
mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Capital Shares for the time periods indicated and then redeem all of your shares
at the end of those periods. Expenses assuming no redemption are also shown. The
Example also assumes that your investment has a 5% return each year and that the
Fund's Institutional Capital Shares operating expenses are BEFORE REIMBURSEMENTS
as estimated above and remain the same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:

INSTITUTIONAL CAPITAL SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Expenses assuming redemption $____ $____ $____ $____
- -----------------------------------
Expenses assuming no redemption $____ $____ $____ $____
- -----------------------------------

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high quality fixed income securities
maturing in one year or less. The average maturity of the Fund's portfolio will
be 90 days or less.

INDUSTRY CONCENTRATION

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

BANK INSTRUMENTS are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances.

INVESTMENT RATINGS

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

Although there are many factors which may effect an investment in the Fund,
the principal risks of investing in a corporate money market fund are described
below.

MARKET RISK

Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise, prices
of fixed income securities fall.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

CREDIT RISK

SECTOR RISKS

WHAT DO SHARES COST?

The required minimum initial investment for Fund Shares is $1,000,000.
There is no required minimum subsequent investment amount.

HOW IS THE FUND SOLD?

The Fund offers three share classes: Institutional Shares, Institutional
Service Shares and Institutional Capital Shares, each representing interests in
a single portfolio of securities. This prospectus relates only to Institutional
Capital Shares. Each share class has different expenses which affect their
performance. Contact your investment professional or call 1-800-341-7400 for
more information concerning the other classes.

HOW TO PURCHASE SHARES

You may purchase Shares through an investment professional or directly from
the Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

o Establish an account with the investment professional; and

o Submit your purchase order to the investment professional before [3:00 p.m.
(Eastern time)]. You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment
by 3:00 p.m. (Eastern time). You will become the owner of Shares and
receive dividends when the Fund receives your payment.

Investment professionals should send payments according to the instructions
in the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed New Account
Form; and

o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the
Fund and will become a shareholder after the Fund receives the order.

BY WIRE
Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire

ABA Number 011000028
Attention: EDGEWIRE

Wire Order Number, Dealer Number, or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on
the check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE
that requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317

BY INVEST-BY-PHONE

BY AUTOMATED CLEARINGHOUSE (ACH)

HOW TO REDEEM SHARES

You should redeem Shares:

o through an investment professional if you purchased Shares through an
investment professional; or

o directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

DIRECTLY FROM THE FUND

BY TELEPHONE

You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 3:00 p.m. (Eastern time) your redemption will be wired
to you the same day. You will not receive that day's dividend.

If you call after 3:00 p.m. (Eastern time) your redemption will be wired to
you the following business day. You will receive that day's dividend.

BY MAIL

You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317
All requests must include:

o Fund Name and Share Class, account number and account registration;

o amount to be redeemed;

o signatures of all Shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

SIGNATURE GUARANTEES
Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last thirty days; or

o a redemption is payable to someone other than the shareholder(s) of record.

PAYMENT METHODS FOR REDEMPTIONS

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a
Federal Reserve System member.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day
after receiving a request in proper form. Payment may be delayed up to seven
days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund
if those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Fund will record your telephone instructions. If the Fund does not
follow reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

ACCOUNT AND SHARE INFORMATION

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases and redemptions. In addition,
you will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

WHO MANAGES THE FUND?

ADVISORY FEES

YEAR 2000 READINESS

FINANCIAL INFORMATION

FINANCIAL HIGHLIGHTS

The Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years, or since inception, if the life of
the Fund is shorter. Some of the information is presented on a per share basis.
Total returns represent the rate an investor would have earned (or lost) on an
investment in the Fund, assuming reinvestment of any dividends and capital
gains.

This information has been audited by Ernst & Young, LLP, whose report,
along with the Fund's audited financial statements, is included in the Annual
Report.

[Financial Highlights and Financial Statements to be filed by Amendment.]

<PAGE>

PRIME CASH OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL CAPITAL SHARES

INVESTMENT COMPANY ACT FILE NO. 811-7364
CUSIP 608912887

G01881-08 (3/99)

STATEMENT OF ADDITIONAL INFORMATION

PRIME CASH OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
INSTITUTIONAL CAPITAL SHARES

This Statement of Additional Information (SAI) is not a prospectus. Read
this SAI in conjunction with the prospectuses for Institutional Shares,
Institutional Service Shares and Institutional Capital Shares of Prime Cash
Obligations Fund (Fund), dated March 31, 1999. Obtain the prospectuses without
charge by calling 1-800-341-7400.

March 31, 1999

CONTENTS
How is the Fund Organized?
Securities in Which the Fund Invests
What do Shares Cost?
How is the Fund Sold?
Subaccounting Services
Redemption in Kind
Massachusetts Partnership Law
Account and Share Information
Tax Information
Who Manages and Provides Services to the Fund?
How Does the Fund Measure Performance?
Who is Federated Investors, Inc.?
Addresses

CUSIP 608912705

CUSIP 608912804

CUSIP 608912887

G01881-11 (3/99)

<PAGE>

HOW IS THE FUND ORGANIZED?

The Fund is a diversified portfolio of Money Market Obligations Trust II
(Trust). The Trust is an open-end, management investment company that was
established under the laws of the Commonwealth of Massachusetts on November 16,
1992. The Trust may offer separate series of shares representing interests in
separate portfolios of securities. On November 15, 1996, the Trustees changed
the name of the Trust from Lehman Brothers Institutional Funds Group Trust to
Money Market Obligations Trust II and the name of Fund from Prime Money Market
Fund to Prime Cash Obligations Fund.

The Board of Trustees (the Board) has established three classes of shares
of the Fund, known as Institutional Shares, Institutional Service Shares and
Institutional Capital Shares (Shares). This SAI relates to all classes of the
above-mentioned Shares.

SECURITIES IN WHICH THE FUND INVESTS

In pursuing its investment strategy, the Fund may invest in the following
securities for any purpose that is consistent with its investment objective.

SECURITIES DESCRIPTIONS AND TECHNIQUES

FIXED INCOME SECURITIES pay interest, dividends or distributions at a
specified rate. The rate may be fixed or adjusted periodically. The issuer must
also repay the principal amount of the security, normally within a specified
time. Fixed income securities provide more regular income than equity
securities. However, the returns on fixed income securities are limited and
normally do not increase with the issuer's earnings. This limits the potential
appreciation of fixed income securities as compared to equity securities.

A security's YIELD measures the annual income earned on a security as a
percentage of its price. Securities with higher credit risks generally have
higher yields. A security's yield will increase or decrease depending upon
whether it costs less (a "discount") or more (a "premium") than the principal
amount. Under normal market conditions, securities with longer maturities will
also have higher yields. If the issuer may redeem the security before its
scheduled maturity, the price and yield on a discount or premium security may
change based upon the probability of an early redemption.

The following describes the types of fixed income securities in which the
Fund invests.

TREASURY SECURITIES are direct obligations of the federal government of the
United States. Investors regard treasury securities as having the lowest credit
risk.

AGENCY SECURITIES are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a "GSE"). Some GSEs
are supported by the full, faith and credit of the United States. Other GSEs
receive support through federal subsidies, loans or other benefits. A few GSEs
have no explicit financial support, but are regarded as having implied support
because the federal government sponsors their activities. Investors regard
agency securities as having low credit risk, but not as low as Treasury
securities.

The Fund treats mortgage backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against credit risk, it does not
reduce the market and prepayment risks of these mortgage backed securities.

CORPORATE DEBT SECURITIES are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt security. The credit risks of corporate debt securities vary
widely among issuers.

MUNICIPAL SECURITIES are fixed income securities issued by states,
counties, cities and other political subdivisions and authorities. Although many
municipal securities are exempt from federal income tax, the Fund intends to
invest in taxable or tax-exempt municipal securities.

MORTGAGE BACKED SECURITIES represent interests in pools of mortgages. The
underlying mortgages normally have similar interest rates, maturities and other
terms. Mortgages may have fixed or adjustable interest rates. Interests in pools
of adjustable rate mortgages are know as "ARMS."

Generally, homeowners have the option to prepay their mortgages at any time
without penalty. Homeowners frequently refinance high rate mortgages when
mortgage rates fall. This results in the prepayment of mortgage backed
securities, which deprives holders of the securities of the higher yields.
Conversely, prepayments due to refinancings decrease when mortgage rates
increase. This extends the life of mortgage backed securities with lower yields.
As a result, increases in prepayments of premium mortgage backed securities, or
decreases in prepayments of discount mortgage backed securities, may reduce
their yield and price.

This relationship between interest rates and mortgage prepayments makes the
price of mortgage backed securities more volatile than most other types of fixed
income securities with comparable credit risks. Mortgage backed securities tend
to pay higher yields to compensate for this volatility.

Mortgage backed securities come in a variety of forms. Many have extremely
complicated terms. The simplest form of mortgage backed securities are
"PASS-THROUGH certificates." Although a GSE guarantee protects against credit
risk, it does not reduce the market and prepayment risks of these mortgage
backed securities.

ASSET BACKED SECURITIES are payable from pools of obligations other than
mortgages. Almost any type of fixed income assets (including other fixed income
securities) may be used to create an asset backed security. However, most asset
backed securities involve consumer or commercial debts with maturities of less
than ten years. Asset backed securities may also take the form of commercial
paper or notes.

Historically, borrowers are more likely to refinance their mortgage than
any other type of consumer debt or short term commercial debt. In addition, some
asset backed securities use prepayment to buy addition assets, rather than
paying off the securities. Therefore, although asset backed securities may have
some prepayment risks, they generally do not present the same degree of risk as
mortgage backed securities.

ZERO COUPON SECURITIES do not pay interest or principal until final
maturity. Most debt securities provide periodic payments of interest (referred
to as a "coupon payment"). In contrast, investors buy zero coupon securities at
a price below the amount payable at maturity. The difference between the price
and the amount paid at maturity represents interest on the zero coupon security.
This increases the market and credit risk of a zero coupon security, because an
investor must wait until maturity before realizing any return on the investment.

There are many forms of zero coupon securities. Some securities are
originally issued at a discount and are referred to as "zero coupon" or "capital
appreciation" bonds. Others are created by separating the right to receive
coupon payments from the principal due at maturity, a process known as "coupon
stripping." Treasury STRIPs, IOs and POs are the most common forms of "stripped"
zero coupon securities. In addition, some securities give the issuer the option
to deliver additional securities in place of cash interest payments, thereby
increasing the amount payable at maturity. These are referred to as
"pay-in-kind" or "PIK" securities.

BANK INSTRUMENTS are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances. Instruments denominated in U.S. dollars and issued by
Non-U.S. branches of U.S. or foreign banks are commonly referred to as
EURODOLLAR instruments. Instruments denominated in U.S. dollars and issued by
U.S. branches of foreign banks are referred o as YANKEE instruments.

Common types of credit enhancement include guarantees, letters of credit,
bond insurance and surety bonds. Credit enhancement also includes arrangements
where securities or other liquid assets secure payment of a fixed income
security. Following a default, these assets may be sold and the proceeds paid to
security's holders. Either form of credit enhancement reduces credit risk by
providing another source of payment for a fixed income security.

FOREIGN SECURITIES are securities of issuers based outside the U.S. They
are primarily denominated in foreign currencies and traded outside of the U.S.
In addition to the risks normally associated with U.S. securities of the same
type, Foreign Securities are subject to Country Risk and Currency Risk.

DEPOSITARY RECEIPTS represent interests in underlying securities issued by
a foreign company, but traded in another market than the underlying security.
The foreign securities underlying American Depositary Receipts (ADRs) are traded
in the U.S. ADRs provide a way to buy shares of foreign-based companies in the
U.S. rather than in overseas markets. ADRs are also traded in U.S. dollars,
eliminating the need for foreign exchange transactions. The foreign securities
underlying European Depositary Receipts (EDRs), Global Depositary Receipts
(GDRs), and International Depositary Receipts (IDRs), are traded globally or
outside the U.S. Depositary Receipts involve many of the same risks of investing
directly in foreign securities, including Country Risk and Currency Risk.

FOREIGN GOVERNMENT SECURITIES generally consist of fixed income securities
supported by national, state or provincial governments or similar political
subdivisions. Foreign government securities also include debt obligations of
supranational entities, such as international organizations designed or
supported by governmental entities to promote economic reconstruction or
development, international banking institutions and related government agencies.
Examples of these include, but are not limited to, the International Bank for
Reconstruction and Development (the World Bank), the Asian Development Bank, the
European Investment Bank and the Inter-American Development Bank.

Foreign government securities also include fixed income securities of
"quasi-governmental agencies" which are either issued by entities that are owned
by a national, state or equivalent government or are obligations of a political
unit that are not backed by the national government's full faith and credit and
general taxing powers. Further, foreign government securities include mortgage-
related securities issued or guaranteed by national, state or provincial
governmental instrumentalities, including quasi-governmental agencies.

SPECIAL TRANSACTIONS

REPURCHASE AGREEMENTS are transactions in which a Fund buys a security from
a dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting an
agreed upon interest rate effective for the period the Fund owns the security
subject to repurchase. The agreed upon interest rate is unrelated to the
interest rate on the underlying security. The Funds will only enter into
repurchase agreements with banks and other recognized financial institutions,
such as broker/dealers, which are deemed by the Adviser to be creditworthy

A Fund's custodian or subcustodian is required to take possession of the
securities subject to repurchase agreements. The Adviser or subcustodian will
monitor the value of the underlying security each day to ensure that the value
of the security always equals or exceeds the repurchase price.

Repurchase Agreements are subject to Credit Risk.

REVERSE REPURCHASE AGREEMENTS are repurchase agreements in which a Fund is
the seller (rather than the buyer) of the securities, and agrees to repurchase
them at an agreed upon time and price. A reverse repurchase agreement may be
viewed as a type of borrowing by the Fund. Reverse Repurchase Agreements are
subject to Credit Risk. In addition, Reverse Repurchase Agreements create
Leverage Risk because the Fund must repurchase the underlying security at a
higher price, regardless of the market value of the security at the time of
repurchase.

WHEN ISSUED TRANSACTIONS are arrangements in which a Fund purchases
securities for a set price, with payment and delivery scheduled for a future
time. During the period between purchase and settlement, no payment is made by
the Fund to the issuer and no interest accrues to the Fund. The Fund records the
transaction when it agrees to purchase the securities and reflects their value
in determining the price of its shares. Settlement dates may be a month or more
after entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices. Therefore, when issued transactions
create Market Risk for the Fund. When issued transactions also involve Credit
Risk in the event of a counterparty default.

SECURITIES LENDING. A Fund may lend portfolio securities to firms that the
Adviser has determined are creditworthy.. In return,, it will receive either
cash or liquid securities as collateral from the borrower. A Fund will reinvest
cash collateral in securities that qualify as an otherwise acceptable investment
for the Fund. However, the Fund must pay interest to the borrower for the use of
any cash collateral. If the market value of the loaned securities increases, the
borrower must furnish additional collateral. While portfolio securities are on
loan, the borrower pays the Fund the equivalent of any dividends or interest
received on them. Loans are subject to termination at the option of the Fund or
the borrower. The Fund will not have the right to vote on securities while they
are being lent, but it will terminate a loan in anticipation of any important
vote. The Fund may pay reasonable administrative and custodial fees in
connection with a loan and may pay a negotiated portion of the interest earned
on the cash collateral to a securities lending agent or broker.

Securities lending activities are subject to Market Risk and Credit Risk.

ASSET COVERAGE. In order to secure its obligations in connection with
when-issued, and delayed-delivery transactions, the Fund will "cover" such
transactions, as required under applicable interpretations of the SEC, either by
owning the underlying securities; entering into an offsetting transaction; or
segregating, earmarking, or depositing into an escrow account readily marketable
securities in an amount at all times equal to or exceeding the Fund's commitment
with respect to these instruments or contracts. As a result, use of these
instruments will impede the Fund's ability to freely trade the assets being used
to cover them, which could result in harm to the Fund.

INVESTMENT RATINGS

An nationally recognized rating service's highest rating category is
determined without regard for sub-categories and gradations. For example,
securities rated A-1 or A-1+ by Standard & Poor's, Prime-1 by Moody's Investors
Service, Inc. ("Moody's"), or F-1 (+ or -) by Fitch IBCA, Inc. are all
considered rated in the highest short-term rating category. The Fund will follow
applicable regulations in determining whether a security rated by more than one
rating service can be treated as being in the highest short-term rating
category; currently, such securities must be rated by two rating services in
their highest rating category. See "Regulatory Compliance."

INVESTMENT RISKS

There are many factors which may effect an investment in the Fund. The
Fund's principal risks are described in its prospectus. Additional risk factors
are outlined below.

INVESTMENT RISKS

Although there are many factors which may effect an investment in the Fund,
the principal risks of investing in a corporate money market fund are described
below.

MARKET RISK

Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise, prices
of fixed income securities fall.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

CREDIT RISK

SECTOR RISKS

INVESTMENT LIMITATIONS

DIVERSIFICATION OF INVESTMENTS

The Fund may not purchase securities of any one issuer if as a result more
than 5% of the value of the Fund's assets would be invested in the securities of
such issuer, except that up to 25% of the value of the Fund's total assets may
be invested without regard to such 5% limitation and provided that there is no
limitation with respect to investments in U.S. government securities.

ISSUING SENIOR SECURITIES, BORROWING MONEY AND PLEDGING ASSETS

The Fund may not borrow money, except that the Fund may (i) borrow money
for temporary or emergency purposes (not for leveraging or investment) from
banks or, subject to specific authorization by the SEC, from funds advised by
the adviser or an affiliate of the adviser, and (ii) engage in reverse
repurchase agreements; provided that (i) and (ii) in combination do not exceed
one-third of the value of the Fund's total assets (including the amount
borrowed) less liabilities (other than borrowings). The Fund may not mortgage,
pledge, or hypothecate its assets except in connection with such borrowings and
reverse repurchase agreements and then only in amounts not exceeding one-third
of the value of the Fund's total assets. Additional investments will not be made
when borrowings exceed 5% of the Fund's assets.

CONCENTRATION OF INVESTMENTS

The Fund may not purchase any securities which would cause 25% or more of
the value of its total assets at the time of such purchase to be invested in the
securities of one or more issuers conducting their principal business
activivites in the same industry, (unless the Fund is in a temporary defensive
position); provided that there is no limitation with respect to investments in
U.S. government securities or, in bank instruments issued by domestic banks.

LENDING CASH OR SECURITIES

The Fund may not make loans, except that the Fund may (i) purchase or hold
debt obligations in accordance with its investment objective and policies, (ii)
enter into repurchase agreements for securities, (iii) lend portfolio securities
as described in the prospectus, and (iv) subject to specific authorization by
the SEC, lend money to other funds advised by the adviser or an affiliate of the
adviser.

UNDERWRITING

The Fund may not act as an underwriter of securities, except insofar as the
Fund may be deemed an underwriter under applicable securities laws in selling
portfolio securities.

INVESTING IN REAL ESTATE

The Fund may not purchase or sell real estate or real estate limited
partnerships, provided that the Fund may purchase securities of issuers which
invest in real estate or interests therein.

INVESTING IN COMMODITIES AND MINERALS

The Fund may not purchase or sell commodities contracts, or invest in oil,
gas or mineral exploration or development programs or in mineral leases.

The above limitations cannot be changed unless authorized by the "vote of a
majority of its outstanding voting securities," as defined by the Investment
Company Act. The following limitations, however, may be changed by the Board
without shareholder approval. Shareholders will be notified before any material
change in these limitations becomes effective.

<PAGE>

INVESTING IN ILLIQUID SECURITIES

The Fund will not invest more than 10% of the value of its net assets in
illiquid securities including repurchase agreements providing for settlement in
more than seven days after notice.

SELLING SHORT AND BUYING ON MARGIN

The Fund will not sell any securities short or purchase any securities on
margin but may obtain such short-term credits as are necessary for clearance of
transactions.

INVESTING IN OPTIONS

The Fund will not invest in puts, calls, straddles, spreads, or any
combination of them.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The Fund will not acquire more than 3% of the total outstanding securities
of other investment companies, except as part of a merger, consolidation, or
other acquisition.

INVESTING IN NEW ISSUERS

The Fund will not invest more than 15% of the value of its total assets in
securities of companies (including predecessors) with less than three years of
continuous operation.

REGULATORY COMPLIANCE

The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this SAI, in order to comply with applicable laws and
regulations, including the provisions of and regulations under the Investment
Company Act of 1940. In particular, the Fund will comply with the various
requirements of Rule 2a-7, which regulates money market mutual funds. For
example, with limited exceptions, Rule 2a-7 prohibits the investment of more
than 5% of the Fund's total assets in the securities of any one issuer, although
the Fund's investment limitation only requires such 5% diversification with
respect to 75% of its assets. The Fund will invest more than 5% of its assets in
any one issuer only under the circumstances permitted by Rule 2a-7. The Fund
will also determine the effective maturity of its investments, as well as its
ability to consider a security as having received the requisite short-term
ratings by rating services, according to Rule 2a-7. The Fund may change these
operational policies to reflect changes in the laws and regulations without the
approval of its shareholders.

DETERMINING MARKET VALUE OF SECURITIES

The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of the
Fund computed by dividing the annualized daily income on the Fund's portfolio by
the net asset value computed as above may tend to be higher than a similar
computation made by using a method of valuation based upon market prices and
estimates. In periods of rising interest rates, the opposite may be true.

The Fund's use of the amortized cost method of valuing portfolio
instruments depends on its compliance with certain conditions in Rule 2a-7 (the
"Rule") promulgated by the Securities and Exchange Commission under the
Investment Company Act of 1940. Under the Rule, the Trustees must establish
procedures reasonably designed to stabilize the net asset value per share, as
computed for purposes of distribution and redemption, at $1.00 per share, taking
into account current market conditions and the Fund's investment objective. The
procedures include monitoring the relationship between the amortized cost value
per share and the net asset value per share based upon available indications of
market value. The Trustees will decide what, if any, steps should be taken if
there is a difference of more than 0.5 of 1% between the two values. The
Trustees will take any steps they consider appropriate (such as redemption in
kind or shortening the average portfolio maturity) to minimize any material
dilution or other unfair results arising from differences between the two
methods of determining net asset value.

<PAGE>

HOW IS THE FUND SOLD?

Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.), located at Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, PA 15222-3779, offers Shares on a continuous, best-efforts basis.

SHAREHOLDER SERVICES

The Fund may pay Federated Shareholder Services Company, a subsidiary of
Federated Investors, Inc. (Federated), for providing shareholder services and
maintaining shareholder accounts. Federated Shareholder Services Company may
select others to perform these services for their customers and may pay them
fees.

SUPPLEMENTAL PAYMENTS

Investment professionals may be paid fees out of the assets of the
Distributor and/or Federated Shareholder Services Company (but not out of Fund
assets). The Distributor and/or Federated Shareholder Services Company may be
reimbursed by the Adviser or its affiliates.

Investment professionals receive such fees for providing
distribution-related or shareholder services such as sponsoring sales, providing
sales literature, conducting training seminars for employees, and engineering
sales-related computer software programs and systems. Also, investment
professionals may be paid cash or promotional incentives, such as reimbursement
of certain expenses relating to attendance at informational meetings about the
Fund or other special events at recreational-type facilities, or items of
material value. These payments will be based upon the amount of Shares the
investment professional sells or may sell and/or upon the type and nature of
sales or marketing support furnished by the investment professional.

SUBACCOUNTING SERVICES

Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding Shares in a fiduciary, agency,
custodial, or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of
the Fund's portfolio securities.

Because the Fund has elected to be governed by Rule 18f-1 under the
Investment Company Act of 1940, the Fund is obligated to pay Share redemptions
to any one shareholder in cash only up to the lesser of $250,000 or 1% of the
net assets represented by such Share class during any 90-day period.

Any Share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.

Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving the portfolio securities and selling them
before their maturity could receive less than the redemption value of the
securities and could incur certain transaction costs.

<PAGE>

MASSACHUSETTS PARTNERSHIP LAW

Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust.

In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust is required by the Declaration of Trust to use
its property to protect or compensate the shareholder. On request, the Trust
will defend any claim made and pay any judgment against a shareholder for any
act or obligation of the Trust. Therefore, financial loss resulting from
liability as a shareholder will occur only if the Trust itself cannot meet its
obligations to indemnify shareholders and pay judgments against them.

ACCOUNT AND SHARE INFORMATION

VOTING RIGHTS

Each share of the Fund gives the shareholder one vote in Trustee elections
and other matters submitted to shareholders for vote. All Shares of the Trust
have equal voting rights, except that in matters affecting only a particular
Fund or class, only Shares of that Fund or class are entitled to vote.

Trustees may be removed by the Board or by shareholders at a special
meeting. A special meeting of shareholders will be called by the Board upon the
written request of shareholders who own at least 10% of the Trust's outstanding
shares of all series entitled to vote.

As of January 6, 1999, the following shareholders owned of record,
beneficially, or both, 5% or more of outstanding Shares: PNC Securities Corp.,
Pittsburgh, Pennsylvania, 5.80% of Institutional Shares; First Union Capital
Markets Corp., Charlotte, North Carolina, 6.13% of Institutional Shares; The
Northern Trust Company, Chicago, Illinois, 9.93% of Institutional Shares; Hare &
Co., New York, New York, 5.10% of Institutional Service Shares; Kaw & Co.,
Charleston, West Virginia, 8.27% of Institutional Service Shares; Harris Trust
and Savings Bank, Chicago, Illinois, 64.63% of Institutional Service Shares;
Hubco, Birmingham, Alabama, 5.15% of Institutional Capital Shares; PNC
Securities Corp., Pittsburgh, Pennsylvania, 11.29% of Institutional Capital
Shares; Heart Special Trust Account, New York, New York, 12.59% of Institutional
Capital Shares; Var & Co., St. Paul, Minnesota, 19.01% of Institutional Capital
Shares; and Jones Intercable, Inc., Englewood, Colorado, 23.42% of Institutional
Capital Shares.

Shareholders owning 25% or more of outstanding Shares may be in control and
be able to affect the outcome of certain matters presented for a vote of
shareholders.

TAX INFORMATION

FEDERAL INCOME TAX

The Fund intends to meet requirements of Subchapter M of the Internal
Revenue Code applicable to regulated investment companies. If these requirements
are not met, it
will not receive special tax treatment and will pay federal income tax.

The Fund will be treated as a single, separate entity for federal income
tax purposes so that income earned and capital gains and losses realized by the
Trust's other portfolios will be separate from those realized by the Fund.

WHO MANAGES AND PROVIDES SERVICES TO THE FUND?

BOARD OF TRUSTEES

The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birthdate, present position(s) held with the Trust,
principal occupations for the past five years and other notable positions held,
total compensation received as a Trustee from the Trust for its most recent
fiscal year, and the total compensation received from the Federated Fund Complex
for the most recent calendar year. The Trust is comprised of three funds and the
Federated Fund Complex is comprised of xxxxx investment companies, whose
investment advisers are affiliated with the Fund's Adviser.

As of January 6, 1999, the Fund's Board and Officers as a group owned less
than 1% of the Fund's outstanding Institutional, Institutional Service and
Institutional Capital
Shares.

An asterisk (*) denotes a Trustee who is deemed to be an interested person
as defined in the Investment Company Act of 1940. The following symbol (#)
denotes a Member of the Board's Executive Committee, which handles the Board's
responsibilities between its meetings.

<PAGE>

NAME

BIRTHDATE AGGREGATE TOTAL
ADDRESS COMPENSATION COMPENSATION
POSITION WITH TRUST PRINCIPAL OCCUPATIONS FROM TRUST FROM TRUST
FOR PAST 5 YEARS AND FUND COMPLEX

JOHN F. DONAHUE*+ Chief Executive Officer and Director or $0 $0 for the
Trustee of the Federated Fund Complex; Trust and

Birthdate: July 28, 1924 Chairman and Director, Federated Investors, 54 other
Federated Investors Inc.; Chairman and Trustee, Federated investment
Tower Advisers, Federated Management, and companies
1001 Liberty Avenue Federated Research; Chairman and Director, in the Fund
Pittsburgh, PA Federated Research Corp., and Federated Complex
CHAIRMAN AND TRUSTEE Global Research Corp.; Chairman, Passport
Research, Ltd.

- -------------------------
THOMAS G. BIGLEY Director or Trustee of the Federated Fund $ $113,860.22 for
Birthdate: February 3, Complex; Director, Member of Executive the
1934 Committee, Children's Hospital of Trust and
15 Old Timber Trail Pittsburgh; formerly: Senior Partner, Ernst 54 other
Pittsburgh, PA & Young LLP; Director, MED 3000 Group, investment
TRUSTEE Inc.; Director, Member of Executive companies
Committee, University of Pittsburgh. in the Fund
Complex

- -------------------------
JOHN T. CONROY, JR. Director or Trustee of the Federated Fund $ $125,264.48 for
Birthdate: June 23, 1937 Complex; President, Investment Properties the
Wood/IPC Commercial Corporation; Senior Vice President, Trust and
Dept. John R. Wood and Associates, Inc., 54 other
John R. Wood Realtors; Partner or Trustee in private investment
Associates, Inc. real estate ventures in Southwest Florida; companies
Realtors formerly: President, Naples Property in the Fund
3255 Tamiami Trial Management, Inc. and Northgate Village Complex
North Naples, FL Development Corporation.

TRUSTEE

- -------------------------
NICHOLAS CONSTANTAKIS Director or Trustee of the Federated Fund $ $47,958.02 for
Birthdate: September 3, Complex; formerly: Partner, Andersen the
1939 Worldwide SC. Trust and
175 Woodshire Drive 29 other
Pittsburgh, PA investment
TRUSTEE companies
in the Fund
Complex

- -------------------------
WILLIAM J. COPELAND Director or Trustee of the Federated Fund $ $125,264.48 for
Birthdate: July 4, 1918 Complex; Director and Member of the the
One PNC Plaza-23rd Floor Executive Committee, Michael Baker, Inc.; Trust and
Pittsburgh, PA formerly: Vice Chairman and Director, PNC 54 other
TRUSTEE Bank, N.A., and PNC Bank Corp.; Director, investment
Ryan Homes, Inc. companies
in the Fund

Previos Positions: Director, United Complex
Refinery; Director, Forbes Fund; Chairman,
Pittsburgh Foundation; Chairman, Pittsburgh

Civic Light Opera.

- -------------------------
JOHN F. CUNNINGHAM++ Director or Trustee of some of the $ $0 for the
Birthdate: March 5, 1943 Federated Funds; Chairman, President and Trust and
353 El Brillo Way Chief Executive Officer, Cunningham & Co., 26 other
Palm Beach, FL Inc. ; Trustee Associate, Boston College; investment
TRUSTEE Director, EMC Corporation; formerly: companies
Director, Redgate Communications. in the Fund
Complex

Previous Positions: Chairman of the Board
and Chief Executive Officer, Computer
Consoles, Inc.; President and Chief
Operating Officer, Wang Laboratories;
Director, First National Bank of Boston;
Director, Apollo Computer, Inc.

J. CHRISTOPHER DONAHUE+* President or Executive Vice President of $0 $0 for the
Birthdate: April 11, the Federated Fund Complex; Director or Trust and
1949 Trustee of some of the Funds in the 16 other
Federated Investors Federated Fund Complex; President and investment
Tower Director, Federated Investors, Inc.; companies
1001 Liberty Avenue President and Trustee, Federated Advisers, in the Fund
Pittsburgh, PA Federated Management, and Federated Complex
PRESIDENT AND TRUSTEE Research; President and Director, Federated
Research Corp. and Federated Global
Research Corp.; President, Passport
Research, Ltd.; Trustee, Federated
Shareholder Services Company; Director,
Federated Services Company.

JAMES E. DOWD, ESQ. Director or Trustee of the Federated Fund $ $125,264.48 for
Birthdate: May 18, 1922 Complex; Attorney-at-law; Director, The the
571 Hayward Mill Road Emerging Germany Fund, Inc. Trust and
Concord, MA 54 other
TRUSTEE Previous Positions: President, Boston Stock investment

Exchange, Inc.; Regional Administrator, companies
United States Securities and Exchange in the Fund
Commission. Complex

LAWRENCE D. ELLIS, M.D.* Director or Trustee of the Federated Fund $ $113,860.22 for
Birthdate: October 11, Complex; Professor of Medicine, University the
1932 of Pittsburgh; Medical Director, University Trust and
3471 Fifth Avenue of Pittsburgh Medical Center - Downtown; 54 other
Suite 1111 Hematologist, Oncologist, and Internist, investment
Pittsburgh, PA University of Pittsburgh Medical Center; companies
TRUSTEE Member, National Board of Trustees, in the Fund
Leukemia Society of America. Complex

EDWARD L. FLAHERTY, Director or Trustee of the Federated Fund $ $125,264.48 for
JR., ESQ. # Complex; Attorney, of Counsel, Miller, the
Birthdate: June 18, 1924 Ament, Henny & Kochuba; Director Emeritus, Trust and
Miller, Ament, Henny & Eat'N Park Restaurants, Inc.; formerly: 54 other
Kochuba Counsel, Horizon Financial, F.A., Western investment
205 Ross Street Region; Partner, Meyer and Flaherty. companies
Pittsburgh, PA in the Fund
TRUSTEE Complex
PETER E. MADDEN Director or Trustee of the Federated Fund $ $113,860.22 for
Birthdate: March 16, Complex; formerly: Representative, the
1942 Commonwealth of Massachusetts General Trust and
One Royal Palm Way Court; President, State Street Bank and 54 other
100 Royal Palm Way Trust Company and State Street Corporation. investment
Palm Beach, FL companies
TRUSTEE Previous Positions: Director, VISA USA and in the Fund
VISA International; Chairman and Director, Complex
Massachusetts Bankers Association;

Director, Depository Trust Corporation.

CHARLES F. MANSFIELD, Director or Trustee of some of the $ $0 for the
JR.++ Federated Funds; Management Consultant. Trust and
Birthdate: April 10, 25 other
1945 Previous Positions: Chief Executive investment
80 South Road Officer, PBTC International Bank; Chief companies
Westhampton Beach, NY Financial Officer of Retail Banking Sector, in the Fund
TRUSTEE Chase Manhattan Bank; Senior Vice Complex
President, Marine Midland Bank; Vice
President, Citibank; Assistant Professor of
Banking and Finance, Frank G. Zarb School
of Business, Hofstra University.

JOHN E. MURRAY, JR., Director or Trustee of the Federated Fund $ $113,860.22 for
J.D., S.J.D. Complex; President, Law Professor, Duquesne the
Birthdate: December 20, University; Consulting Partner, Mollica & Trust and
1932 Murray. 54 other
President, Duquesne investment
University Previous Positions: Dean and Professor of companies
Pittsburgh, PA Law, University of Pittsburgh School of in the Fund
TRUSTEE Law; Dean and Professor of Law, Villanova Complex
University School of Law.

WESLEY W. POSVAR Director or Trustee of the Federated Fund $ $113,860.22 for
Birthdate: September Complex; President, World Society of the
14, 1925 Ekistics (metropolitan planning), Athens; Trust and
1202 Cathedral of Professor, International Politics; 54 other
Learning Management Consultant; Trustee, Carnegie investment
University of Pittsburgh Endowment for International Peace, RAND companies
Pittsbugh, PA Corporation, Online Computer Library in the Fund
TRUSTEE Center, Inc., National Defense University Complex
and U.S. Space Foundation; President
Emeritus, University of Pittsburgh;
Founding Chairman, National Advisory
Council for Environmental Policy and
Technology, Federal Emergency Management
Advisory Board; Trustee, Czech Management

Center, Prague.

Previous Positions: Professor, United
States Military Academy; Professor, United
States Air Force Academy.

MARJORIE P. SMUTS Director or Trustee of the Federated Fund $ $113,860.22 for
Birthdate: June 21, 1935 Complex; Public the
4905 Bayard Street Relations/Marketing/Conference Planning. Trust and
Pittsburgh, PA 54 other
TRUSTEE Previous Positions: National Spokesperson, investment
Aluminum Company of America; business owner. companies
in the Fund
Complex

JOHN S. WALSH++ Director or Trustee of some of the $ $0 for the
Birthdate: November 28, Federated Funds; President and Director, Trust and
1957 Heat Wagon, Inc.; President and Director, 22 other
2007 Sherwood Drive Manufacturers Products, Inc.; President, investment
Valparaiso, IN Portable Heater Parts, a division of companies
TRUSTEE Manufacturers Products, Inc.; Director, in the Fund
Walsh & Kelly, Inc.; formerly: Vice Complex
President, Walsh & Kelly, Inc.

<PAGE>

EDWARD C. GONZALES Trustee or Director of some of the Funds in $0 $0 for the
Birthdate: October 22, the Federated Fund Complex; President, Trust and
1930 Executive Vice President and Treasurer of 1 other
Federated Investors some of the Funds in the Federated Fund investment
Tower Complex; Vice Chairman, Federated company
1001 Liberty Avenue Investors, Inc.; Vice President, Federated in the Fund
Pittsburgh, PA Advisers, Federated Management, Federated Complex
EXECUTIVE VICE PRESIDENT Research, Federated Research Corp.,
Federated Global Research Corp. and
Passport Research, Ltd.; Executive Vice
President and Director, Federated
Securities Corp.; Trustee, Federated
Shareholder Services Company.

JOHN W. MCGONIGLE Executive Vice President and Secretary of $0 $0 for the
Birthdate: October 26, the Federated Fund Complex; Executive Vice Trust and
1938 President, Secretary, and Director, 54 other
Federated Investors Federated Investors, Inc.; Trustee, investment
Tower Federated Advisers, Federated Management, companies
1001 Liberty Avenue and Federated Research; Director, Federated in the Fund
Pittsburgh, PA Research Corp. and Federated Global Complex
EXECUTIVE VICE PRESIDENT Research Corp.; Director, Federated
AND SECRETARY Services Company; Director, Federated

Securities Corp.

RICHARD J. THOMAS Treasurer of the Federated Fund Complex; $0 $0 for the
Birthdate: June 17, Vice President - Funds Financial Services Trust and
1954 Division, Federated Investors, Inc.; 54 other
Federated Investors Formerly: various management positions investment
Tower within Funds Financial Services Division of companies
1001 Liberty Avenue Federated Investors, Inc. in the Fund
Pittsburgh, PA Complex
TREASURER

WILLIAM D. DAWSON, III Chief Investment Officer of this Fund and $0 $0 for the
Birthdate: March 3, 1949 various other Funds in the Federated Fund Trust and
Federated Investors Complex; Executive Vice President, 41 other
Tower Federated Investment Counseling, Federated investment
1001 Liberty Avenue Global Research Corp., Federated Advisers, companies
Pittsburgh, PA Federated Management, Federated Research, in the Fund
CHIEF INVESTMENT OFFICER and Passport Research, Ltd.; Registered Complex
Representative, Federated Securities Corp.;
Portfolio Manager, Federated Administrative
Services; Vice President, Federated
Investors, Inc.; Formerly: Executive Vice
President and Senior Vice President,
Federated Investment Counseling
Institutional Portfolio Management Services
Division; Senior Vice President, Federated
Research Corp., Federated Advisers,
Federated Management, Federated Research,
and Passport Research, Ltd.

</TABLE>

+ Mr. Donahue is the father of J. Christopher Donahue, President and
Trustee of the Trust.

++ Messrs. Cunningham, Mansfield and Walsh became members of the Board on
January 1, 1999. They did not earn any fees for serving the Fund Complex since
these fees are reported as of the end of the last calendar year.

INVESTMENT ADVISER

The Adviser conducts investment research and makes investment decisions for
the Fund.

The Adviser is a wholly-owned subsidiary of Federated.

The Adviser shall not be liable to the Trust or any Fund shareholder for
any losses that may be sustained in the purchase, holding, or sale of any
security or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Trust.

OTHER RELATED SERVICES

Affiliates of the Adviser may, from time to time, provide certain
electronic equipment and software to institutional customers in order to
facilitate the purchase of Fund Shares offered by the Distributor.

BROKERAGE TRANSACTIONS

When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the Adviser looks for prompt execution of the order at a
favorable price. The Adviser will generally use those who are recognized dealers
in specific portfolio instruments, except when a better price and execution of
the order can be obtained elsewhere. The Adviser may select brokers and dealers
based on whether they also offer research services (as described below). In
selecting among firms believed to meet these criteria, the Adviser may give
consideration to those firms which have sold or are selling Shares of the Fund
and other funds distributed by the Distributor and its affiliates. The Adviser
makes decisions on portfolio transactions and selects brokers and dealers
subject to review by the Fund's Board.

RESEARCH SERVICES

Research services may include advice as to the advisability of investing in
securities; security analysis and reports; economic studies; industry studies;
receipt of quotations for portfolio evaluations; and similar services. Research
services may be used by the Adviser or by affiliates of Federated in advising
other accounts. To the extent that receipt of these services may replace
services for which the Adviser or its affiliates might otherwise have paid, it
would tend to reduce their expenses. The Adviser and its affiliates exercise
reasonable business judgment in selecting those brokers who offer brokerage and
research services to execute securities transactions. They determine in good
faith that commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided.

For the fiscal year ended, January 31, 1999, the Fund's adviser directed
brokerage transactions to certain brokers due to research services they
provided. The total amount of these transactions was $_______ for which the Fund
paid $_______ in brokerage commissions.

On January 31, 1999, the Fund owned securities of the following regular
broker/dealers:

Investment decisions for the Fund are made independently from those of
other accounts managed by the Adviser. When the Fund and one or more of those
accounts invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund.

<PAGE>

ADMINISTRATOR

Federated Services Company, a subsidiary of Federated, provides
administrative personnel and services (including certain legal and financial
reporting services) necessary to operate the Fund. Federated Services Company
provides these at the following annual rate of the average aggregate daily net
assets of all Federated Funds as specified below:

MAXIMUM ADMINISTRATIVE AVERAGE AGGREGATE DAILY NET ASSETS OF THE
FEE FEDERATED FUNDS
0.150 of 1% on the first $250 million

- -------------------------
0.125 of 1% on the next $250 million
- -------------------------
0.100 of 1% on the next $250 million
- -------------------------
0.075 of 1% on assets in excess of $750 million
- -------------------------

The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of Shares.
Federated Services Company may voluntarily waive a portion of its fee and may
reimburse the Fund for expenses.

Federated Services Company also provides certain accounting and
recordkeeping services with respect to the Fund's portfolio investments for a
fee based on Fund assets plus out-of-pocket expenses.

CUSTODIAN

State Street Bank and Trust Company, Boston, Massachusetts, is custodian
for the securities and cash of the Fund. Foreign instruments purchased by the
Fund are held by
foreign banks participating in a network coordinated by State Street Bank.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Services Company, through its registered transfer agent
subsidiary, Federated Shareholder Services Company, maintains all necessary
shareholder records. The Fund pays the transfer agent a fee based on the size,
type, and number of accounts and transactions made by shareholders.

INDEPENDENT AUDITORS

Ernst & Young LLP is the independent auditor for the Fund.

FEES PAID BY THE FUND FOR SERVICES

FOR THE YEAR ENDED JANUARY 31,

1999 CURRENT FYE PRIOR FYE PRIOR FYE
Advisory Fee Earned $ $ $

- ---------------------------------
Advisory Fee Reduction $ $ $
- ---------------------------------
Brokerage Commissions $ $ $
- ---------------------------------
Administrative Fee $ $ $
- ---------------------------------
Shareholder Services Fee

- ---------------------------------
Institutional Service Shares $ ---- ----
- ---------------------------------
Institutional Capital Shares $ ---- ----
- ---------------------------------

Fees are allocated among Classes based on their pro rata share of Fund
assets, except for shareholder services fees, which are borne only by the
applicable Class of Shares.

<PAGE>

HOW DOES THE FUND MEASURE PERFORMANCE?

The Fund may advertise Share performance by using the Securities and
Exchange Commission's (SEC) standard method for calculating performance
applicable to all mutual funds. The SEC also permits this standard performance
information to be accompanied by non-standard performance information.

Unless otherwise stated, any quoted Share performance reflects the effect
of non-recurring charges, such as maximum sales charges, which, if excluded,
would increase the total return and yield. The performance of Shares depends
upon such variables as: portfolio quality; average portfolio maturity; type and
value of portfolio securities; changes in interest rates; changes or differences
in the Fund's or any class of Shares' expenses; and various other factors.

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

AVERAGE ANNUAL TOTAL RETURNS AND YIELD

Total returns given for the one-year, five-year and since inception
periods] ended JANUARY 31, 1999.

Yield and Effective Yield given for the 7-day period ended JANUARY 31, 1999.

7-DAY PERIOD 1 YEAR 5 YEARS SINCE INCEPTION
ON FEBRUARY 8, 1993
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES

Total Return ___% ___% ___% ___%

Yield ___% ___% ___% ___%

Effective Yield ___% ___% ___% ___%

7-DAY PERIOD 1 YEAR 5 YEARS SINCE INCEPTION
ON SEPTEMBER 2, 1993

INSTITUTIONAL

SERVICE SHARES

Total Return ___% ___% ___% ___%

Yield ___% ___% ___% ___%

Effective Yield ___% ___% ___% ___%

7-DAY PERIOD 1 YEAR SINCE
INCEPTION

ON OCTOBER 6, 1994

INSTITUTIONAL

CAPITAL SHARES

Total Return ___% ___% ___%

Yield ___% ___% ___%

Effective Yield ___% ___% ___%

</TABLE>

TOTAL RETURN

Total return represents the change (expressed as a percentage) in the value
of Shares over a specific period of time, and includes the investment of income
and capital gains distributions.

The average annual total return for Shares is the average compounded rate
of return for a given period that would equate a $1,000 initial investment to
the ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of Shares owned at the end of the period by
the NAV per Share at the end of the period. The number of Shares owned at the
end of the period is based on the number of Shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional Shares, assuming the annual reinvestment of all
dividends and distributions.

YIELD

The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated by: determining
the net change in the value of a hypothetical account with a balance of one
Share at the beginning of the base period, with the net change excluding capital
changes but including the value of any additional Shares purchased with
dividends earned from the original one Share and all dividends declared on the
original and any purchased Shares; dividing the net change in the account's
value by the value of the account at the beginning of the base period to
determine the base period return; and multiplying the base period return by
365/7. The effective yield is calculated by compounding the unannualized
base-period return by: adding 1 to the base-period return, raising the sum to
the 365/7th power; and subtracting 1 from the result.

To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share performance is lower for shareholders paying those fees.

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;

o charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;

o discussions of economic, financial and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Funds; and

o information about the mutual fund industry from sources such as the
Investment Company Institute.

The Fund may compare its performance, or performance for the types of
securities in which it invests, to a variety of other investments, including
federally insured bank products such as bank savings accounts, certificates of
deposit, and Treasury bills.

The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

You may use financial publications and/or indices to obtain a more complete
view of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Fund uses in advertising may include:

O LIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund categories
based on total return, which assumes the reinvestment of all income
dividends and capital gains distributions, if any.

o IBC/DONOGHUE'S MONEY FUND REPORT publishes annualized yields of money
market funds weekly. Donoghue's MONEY MARKET INSIGHT publication reports
monthly and 12-month-to-date investment results for the same money funds.

o MONEY, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.

O BANK RATE MONITOR(C) NATIONAL INDex, Miami Beach, Florida, published
weekly, is an average of the interest rates of personal money market
deposit accounts at ten of the largest banks and thrifts in each of the
five largest Standard Metropolitan Statistical Areas. If more than one rate
is offered, the lowest rate is used. Account minimums and compounding
methods may vary.

<PAGE>

WHO IS FEDERATED INVESTORS, INC.?

Federated is dedicated to meeting investor needs by making structured,
straightforward and consistent investment decisions. Federated investment
products have a history of competitive performance and have gained the
confidence of thousands of financial institutions and individual investors.

Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is a fusion of individual talents and state-of-the-art
industry tools and resources. Federated's investment process involves teams of
portfolio managers and analysts, and investment decisions are executed by
traders who are dedicated to specific market sectors and who handle trillions of
dollars in annual trading volume.

FEDERATED FUNDS OVERVIEW

MUNICIPAL FUNDS

In the municipal sector, as of December 31, 1998, Federated managed 10 bond
funds with approximately $2.2 billion in assets and 23 money market funds with
approximately $12.5 billion in total assets. In 1976, Federated introduced one
of the first municipal bond mutual funds in the industry and is now one of the
largest institutional buyers of municipal securities. The Funds may quote
statistics from organizations including The Tax Foundation and the National
Taxpayers Union regarding the tax obligations of Americans.

EQUITY FUNDS

In the equity sector, Federated has more than 28 years' experience. As of
December 31, 1998, Federated managed 27 equity funds totaling approximately
$14.9 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value-oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.

CORPORATE BOND FUNDS

In the corporate bond sector, as of December 31, 1998, Federated managed 9
money market funds and 15 bond funds with assets approximating $22.8 billion and
$7.1 billion, respectively. Federated's corporate bond decision making--based on
intensive, diligent credit analysis--is backed by over 26 years of experience in
the corporate bond sector. In 1972, Federated introduced one of the first
high-yield bond funds in the industry. In 1983, Federated was one of the first
fund managers to participate in the asset-backed securities market, a market
totaling more than $209 billion.

GOVERNMENT FUNDS

In the government sector, as of December 31, 1998, Federated manages 9
mortgage-backed, 5 government/ agency and 19 government money market mutual
funds, with assets approximating $5.3 billion, $1.8 billion and $41.6 billion,
respectively. Federated trades approximately $425 million in U.S. government and
mortgage-backed securities daily and places approximately $25 billion in
repurchase agreements each day. Federated introduced the first U.S. government
fund to invest in U.S. government bond securities in 1969. Federated has been a
major force in the short- and intermediate-term government markets since 1982
and currently manages approximately $43.2 billion in government funds within
these maturity ranges.

MONEY MARKET FUNDS

In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market fund.
Simultaneously, the company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a principal means used by
money managers today to value money market fund shares. Other innovations
include the first institutional tax-free money market fund. As of December 31,
1998, Federated managed more than $76.7 billion in assets across 52 money market
funds, including 19 government, 9 prime and 23 municipal with assets
approximating $41.6 billion, $22.8 billion and $12.5 billion, respectively.

The Chief Investment Officers responsible for oversight of the various
investment sectors within Federated are: U.S. equity and high yield - J. Thomas
Madden; U.S. fixed income -William D. Dawson, III; and global equities and fixed
income - Henry A. Frantzen. The Chief Investment Officers are Executive Vice
Presidents of the Federated

advisory companies.

<PAGE>

MUTUAL FUND MARKET

Thirty-seven percent of American households are pursuing their financial
goals through mutual funds. These investors, as well as businesses and
institutions, have entrusted over $5 trillion to the more than 7,300 funds
available, according to the Investment Company Institute.

Federated distributes mutual funds through its subsidiaries for a variety
of investment purposes. Specific markets include:

FEDERATED CLIENTS OVERVIEW

Federated distributes mutual funds through its subsidiaries for a variety
of investment purposes. Specific markets include:

INSTITUTIONAL CLIENTS

Federated meets the needs of approximately 900 institutional clients
nationwide by managing and servicing separate accounts and mutual funds for a
variety of purposes, including defined benefit and defined contribution
programs, cash management, and asset/liability management. Institutional clients
include corporations, pension funds, tax-exempt entities,
foundations/endowments, insurance companies, and investment and financial
advisers. The marketing effort to these institutional clients is headed by John
B. Fisher, President, Institutional Sales Division, Federated Securities Corp.

BANK MARKETING

Other institutional clients include more than 1,600 banks and trust
organizations. Virtually all of the trust divisions of the top 100 bank holding
companies use Federated Funds in their clients' portfolios. The marketing effort
to trust clients is headed by Timothy C. Pillion, Senior Vice President, Bank
Marketing & Sales.

BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES

Federated Funds are available to consumers through major brokerage firms
nationwide--we have over 2,200 broker/dealer and bank broker/dealer
relationships across the country--supported by more wholesalers than any other
mutual fund distributor. Federated's service to financial professionals and
institutions has earned it high ratings in several surveys performed by DALBAR,
Inc. DALBAR is recognized as the industry benchmark for service quality
measurement. The marketing effort to these firms is headed by James F. Getz,
President, Broker/Dealer Sales Division, Federated Securities Corp.

<PAGE>

ADDRESSES

PRIME CASH OBLIGATIONS FUND

Institutional Shares
Institutional Service Shares
Institutional Capital Shares

Federated Investors Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7000

DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, PA 15222-3779

INVESTMENT ADVISER

Federated Management
Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, PA 15222-3779

CUSTODIAN

State Street Bank and Trust Company
P.O. Box 8600

Boston, MA 02266-8600

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

INDEPENDENT AUDITORS

Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072

PROSPECTUS

PRIME VALUE OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SHARES

A money market mutual fund seeking to achieve current income consistent
with stability of principal and liquidity.

CONTENTS

March 31, 1999

<PAGE>

RISK/RETURN SUMMARY

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

This investment objective may be changed by the Fund's Trustees without
shareholder approval.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high quality fixed income securities
maturing in one year or less. The average maturity of the Fund's portfolio will
be 90 days or less.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

Although the Fund seeks to maintain a stable net asset value, it is
possible to lose money investing in the Fund.

The Shares offered by this prospectus are not deposits or obligations of
any bank, are not endorsed or 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.

<PAGE>

RISK/RETURN BAR CHART AND TABLE

The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Institutional Shares as of the calendar
year-end for each of five
years.

The `y' axis reflects the "% Total Return" beginning with "0.00%" and
increasing in increments of 1.00% up to 7.00%.

The `x' axis represents calculation periods from the earliest calendar year
end of the Institutional Shares' start of business through the calendar year
ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Shares for each
calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1998. The percentages noted are: 4.30%, 6.10%,
5.44%, 5.65%, 5.58%, respectively. The Fund's Institutional Shares are not sold
subject to a sales charge (load). Hence, the total returns displayed above are
based upon the net asset value. The Fund's Institutional Shares year-to-date
total return as of the most recent calendar quarter ended December 31, 1998 was
1.31%. Within the period shown in the Chart, the Fund's highest quarterly return
was 1.53% (quarter ended June 30, 1995). Its lowest quarterly return was 0.82%
(quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN

LIFE OF THE FUND1 1 YEAR 5 YEARS

Institutional Shares 5.08% 5.58% 5.41%

1 The Fund's Institutional Shares start of performance date was February 8,
1993.

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Shares
total returns on a yearly basis.

The table shows the Fund's average annual total returns for the calendar
periods ending December 31, 1998. The Fund's 7-DAY NET YIELD as of December 31,
1998 was 5.15%.*

*Investors may call the Fund at 1-800-341-7400 to acquire the current 7-Day
Net Yield.

Past performance does not necessarily predict future performance.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?

PRIME VALUE OBLIGATIONS FUND

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund's Institutional Shares.

SHAREHOLDER FEES

<S> <C>
FEES PAID DIRECTLY FROM YOUR INVESTMENT
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of None
offering price)
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase None
price or redemption proceeds, as applicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other None
Distributions) (as a percentage of offering price).
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None

ANNUAL FUND OPERATING EXPENSES (Before Reimbursements)1

EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS (AS A PERCENTAGE OF AVERAGE NET
ASSETS)
Management Fee 2 0.20%
Distribution (12b-1) Fee 3 None
Shareholder Services Fee 4 0.25%
Other Expenses 5 ____%

Total Annual Fund Operating Expenses ____%
</TABLE>

1 Although not contractually obligated to do so, the distributor will
reimburse certain amounts. These are shown below along with the net
expenses the Fund ACTUALLY PAID for the fiscal year ending January 31,
1999.

Reimbursements of Fund Expenses ____%
Total Annual Fund Operating Expenses (after reimbursements) ____%

2 The adviser voluntarily waived a portion of the management fee. The adviser
can terminate this voluntary waiver at any time. The management fee paid by
the Fund (after the voluntary waiver) was ____% for the year ended January
31, 1999.

3 Institutional Shares did not pay or accrue the distribution (12b-1) fee
during the fiscal year ended January 31, 1998. Institutional Shares has no
present intention of paying or accruing the distribution (12b-1) fee during
the year ended January 31, 1999.

4 The shareholder services fee for Institutional Shares has been voluntarily
reduced. This voluntary reduction can be terminated at any time. The
shareholder services fee paid by the Fund (after the voluntary reduction)
was ____% for the year ended January 31, 1999. Institutional Shares has no
present intention of paying or accruing the shareholder services fee during
the year ended January 31, 1999.

5 The adviser voluntarily reimbursed certain operating expenses of the Fund.
The adviser can terminate this voluntary reimbursement at any time. Total
other expenses paid by the Fund (after the voluntary reimbursement) was
____% for the year ended January 31, 1999.

<PAGE>

EXAMPLE

The Example is intended to help you compare the cost of investing in the
Fund's Institutional Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Shares for the time periods indicated and then redeem all of your shares at the
end of those periods. Expenses assuming no redemption are also shown. The
Example also assumes that your investment has a 5% return each year and that the
Fund's Institutional Shares operating expenses are BEFORE REIMBURSEMENTS as
shown in the Table and remain the same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:

INSTITUTIONAL SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Expenses assuming redemption $___ $___ $___ $___
- -----------------------------------
Expenses assuming no redemption $___ $___ $___ $___
- -----------------------------------

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high quality fixed income securities
maturing in one year or less. The average maturity of the Fund's portfolio will
be 90 days or less.

INDUSTRY CONCENTRATION

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

BANK INSTRUMENTS are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances.

CREDIT ENHANCEMENT consists of an arrangement in which one company agrees
to pay amounts due on a fixed income security after the issuer defaults. In some
cases the other company makes all payments directly to the security holders and
receives reimbursement from the issuer. Normally, the company providing such
credit enhancement has greater financial resources and liquidity than the
issuer. This may lead the Adviser to evaluate the credit risk of a fixed income
security based solely upon its credit enhancement. The Adviser purchases fixed
income securities that have been credit enhanced.

INVESTMENT RATINGS

The securities in which the Fund invests must be rated in one of the two
highest short-term rating categories by one or more nationally recognized rating
services or be of comparable quality to securities having such ratings.

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

Although there are many factors which may effect an investment in the Fund,
the principal risks of investing in a corporate money market fund are described
below.

MARKET RISK

Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise, prices
of fixed income securities fall.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

CREDIT RISK

SECTOR RISKS

WHAT DO SHARES COST?

The Fund does not charge a front-end sales charge. NAV is determined at
12:00 noon and 3:00 p.m. (Eastern time) and as of the end of regular trading
(normally 4:00 p.m. Eastern time) each day the NYSE is open.

The required minimum initial investment for Fund Shares is $1,000,000.
There is no required minimum subsequent investment amount.

HOW IS THE FUND SOLD?

The Fund's Distributor markets the Shares described in this prospectus to
institutions acting in an agency or fiduciary capacity.

HOW TO PURCHASE SHARES

You may purchase Shares through an investment professional or directly from
the Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

o Establish an account with the investment professional; and

Investment professionals should send payments according to the instructions
in the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed New Account
Form; and

o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the
Fund and will become a shareholder after the Fund receives the order.

BY WIRE
Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire

ABA Number 011000028
Attention: EDGEWIRE

Wire Order Number, Dealer Number, or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on
the check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE
that requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317

BY INVEST-BY-PHONE

BY AUTOMATED CLEARINGHOUSE (ACH)

HOW TO REDEEM SHARES

You should redeem Shares:

o through an investment professional if you purchased Shares through an
investment professional; or

o directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

DIRECTLY FROM THE FUND

BY TELEPHONE

If you call after 3:00 p.m. (Eastern time) your redemption will be wired to
you the following business day. You will receive that day's dividend.

BY MAIL

You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317
All requests must include:

o Fund Name and Share Class, account number and account registration;

o amount to be redeemed; and

o signatures of all Shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

SIGNATURE GUARANTEES
Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last thirty days; or

o a redemption is payable to someone other than the shareholder(s) of record.

PAYMENT METHODS FOR REDEMPTIONS

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a
Federal Reserve System member.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day
after receiving a request in proper form. Payment may be delayed up to seven
days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund
if those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Fund will record your telephone instructions. If the Fund does not
follow reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

ACCOUNT AND SHARE INFORMATION

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases and redemptions. In addition,
you will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

WHO MANAGES THE FUND?

The Adviser and other subsidiaries of Federated advise approximately 175
mutual funds and separate accounts, which total approximately $111 billion in
assets as of December 31, 1998. Federated was established in 1955 and is one of
the largest mutual fund investment managers in the United States with
approximately 1,900 employees.

More than 4,000 investment professionals make Federated Funds available to
their customers.

<PAGE>

ADVISORY FEES

YEAR 2000 READINESS

FINANCIAL INFORMATION

FINANCIAL HIGHLIGHTS

This information has been audited by Ernst & Young LLP, whose report, along
with the Fund's audited financial statements, is included in this prospectus.

[Financial Highlights and Financial Statements to be filed by Amendment]

<PAGE>

PRIME VALUE OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SHARES

INVESTMENT COMPANY ACT FILE NO. 811-7364
CUSIP 608912408

G01881-01-IS (3/99)

PROSPECTUS

PRIME VALUE OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SERVICE SHARES

A money market mutual fund seeking to achieve current income consistent
with stability of principal and liquidity.

CONTENTS

March 31, 1999

<PAGE>

RISK/RETURN SUMMARY

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

This investment objective may be changed by the Fund's Trustees without
shareholder approval.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high quality fixed income securities
maturing in one year or less. The average maturity of the Fund's portfolio will
be 90 days or less.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

Although the Fund seeks to maintain a stable net asset value, it is
possible to lose money investing in the Fund.

<PAGE>

RISK/RETURN BAR CHART AND TABLE

The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Institutional Service Shares as of the
calendar year-end for each of five years.

The `y' axis reflects the "% Total Return" beginning with "0.00%" and
increasing in increments of 1.00% up to 6.00%.

The `x' axis represents calculation periods from the earliest calendar year
end of the Institutional Service Shares' start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Service Shares for
each calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1998. The percentages noted are: 4.04%, 5.84%,
5.18%, 5.38%, 5.32%, respectively. The Fund's Institutional Service Shares are
not sold subject to a sales charge (load). Hence, the total returns displayed
above are based upon the net asset value. The Fund's Institutional Service
Shares year-to-date total return as of the most recent calendar quarter ended
December 31, 1998 was 1.25%. Within the period shown in the Chart, the Fund's
highest quarterly return was 1.47% (quarter ended June 30, 1995). Its lowest
quarterly return was 0.76% (quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN

LIFE OF THE FUND1 1 YEAR 5 YEARS
Institutional Service Shares 5.02% 5.32% 5.15%

1 The Fund's Institutional Service Shares start of performance date was
September 1, 1993.

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Service
Shares total returns on a yearly basis.

The table shows the Fund's average annual total returns for the calendar
periods ending December 31, 1998. The Fund's 7-DAY NET YIELD as of December 31,
1998 was 4.90%.*

*Investors may call the Fund at 1-800-341-7400 to acquire the current 7-Day
Net Yield.

Past performance does not necessarily predict future performance.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?

PRIME VALUE OBLIGATIONS FUND

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund's Institutional Service Shares.

</TABLE>

ANNUAL FUND OPERATING EXPENSES (Before Reimbursements)1

EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS (AS A PERCENTAGE OF AVERAGE NET
ASSETS)
Management Fee 2 0.20%
Distribution (12b-1) Fee 3 None
Shareholder Services Fee 4 0.25%
Other Expenses 5 ____%
Total Annual Fund Operating Expenses ____%
- -------------------------------------------------------------------------

1 Although not contractually obligated to do so, the distributor will
reimburse certain amounts. These are shown below along with the net
expenses the Fund actually paid for the fiscal year ended January 31, 1999.

Reimbursements of Fund Expenses ____%
Total Annual Fund Operating Expenses (after reimbursements) ____%

3 Institutional Service Shares did not pay or accrue the distribution (12b-1)
fee during the fiscal year ended January 31, 1998. Institutional Service
Shares has no present intention of paying or accruing the distribution
(12b-1) fee during the year ended January 31, 1999.

4 The shareholder services fee for Institutional Service Shares has been
voluntarily reduced. This voluntary reduction can be terminated at any
time. The shareholder services fee paid by the Fund (after the voluntary
reduction) was ____% for the year ended January 31, 1999.

<PAGE>

EXAMPLE

The Example is intended to help you compare the cost of investing in the
Fund's Institutional Service Shares with the cost of investing in other mutual
funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Service Shares for the time periods indicated and then redeem all of your shares
at the end of those periods. Expenses assuming no redemption are also shown. The
Example also assumes that your investment has a 5% return each year and that the
Fund's Institutional Service Shares operating expenses are BEFORE REIMBURSEMENTS
as shown in the Table and remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high quality fixed income securities
maturing in one year or less. The average maturity of the Fund's portfolio will
be 90 days or less.

INDUSTRY CONCENTRATION

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

BANK INSTRUMENTS are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances.

CREDIT ENHANCEMENT consists of an arrangement in which one company agrees
to pay amounts due on a fixed income security after the issuer defaults. In some
cases the other company makes all payments directly to the security holders and
receives reimbursement from the issuer. Normally, the company providing such
credit enhancement has greater financial resources and liquidity than the
issuer. This may lead the Adviser to evaluate the credit risk of a fixed income
security based solely upon its credit enhancement. The Adviser purchases fixed
income securities that have been credit enhanced.

INVESTMENT RATINGS

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

Although there are many factors which may effect an investment in the Fund,
the principal risks of investing in a corporate money market fund are described
below.

MARKET RISK

Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise, prices
of fixed income securities fall.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

CREDIT RISK

SECTOR RISKS

WHAT DO SHARES COST?

The required minimum initial investment for Fund Shares is $1,000,000.
There is no required minimum subsequent investment amount.

HOW IS THE FUND SOLD?

The Fund offers three share classes: Institutional Shares, Institutional
Service Shares and Institutional Capital Shares, each representing interests in
a single portfolio of securities. This prospectus relates only to Institutional
Service Shares. Each share class has different expenses which affect their
performance. Contact your investment professional or call 1-800-341-7400 for
more information concerning the other classes.

The Fund's Distributor markets the Shares described in this prospectus to
institutions acting in an agency or fiduciary capacity.

HOW TO PURCHASE SHARES

You may purchase Shares through an investment professional or directly from
the Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

o Establish an account with the investment professional; and

Investment professionals should send payments according to the instructions
in the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed New
Account Form; and

o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the
Fund and will become a shareholder after the Fund receives the order.

BY WIRE
Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire

ABA Number 011000028
Attention: EDGEWIRE

Wire Order Number, Dealer Number, or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on
the check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE
that requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317

BY INVEST-BY-PHONE

BY AUTOMATED CLEARINGHOUSE (ACH)

HOW TO REDEEM SHARES

You should redeem Shares:

o through an investment professional if you purchased Shares through an
investment professional; or

o directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

DIRECTLY FROM THE FUND

BY TELEPHONE

You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 3:00 p.m. (Eastern time) your redemption will be wired
to you the same day. You will not receive that day's dividend.

If you call after 3:00 p.m. (Eastern time) your redemption will be wired to
you the following business day. You will receive that day's dividend.

BY MAIL

You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317
All requests must include:

o Fund Name and Share Class, account number and account registration;

o amount to be redeemed; and

o signatures of all Shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

SIGNATURE GUARANTEES
Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last thirty days; or

o a redemption is payable to someone other than the shareholder(s) of record.

PAYMENT METHODS FOR REDEMPTIONS

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a
Federal Reserve System member.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day
after receiving a request in proper form. Payment may be delayed up to seven
days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts the
Fund's ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund
if those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Fund will record your telephone instructions. If the Fund does not
follow reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

ACCOUNT AND SHARE INFORMATION

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases and redemptions. In addition,
you will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

WHO MANAGES THE FUND?

The Adviser and other subsidiaries of Federated advise approximately 175
mutual funds and private accounts, which total approximately $111 billion in
assets as of December 31, 1998. Federated was established in 1955 and is one of
the largest mutual fund investment managers in the United States with
approximately 1,900 employees. More than 4,000 investment professionals make
Federated Funds available to their customers.

<PAGE>

ADVISORY FEES

YEAR 2000 READINESS

FINANCIAL INFORMATION

FINANCIAL HIGHLIGHTS

This information has been audited by Ernst & Young LLP, whose report, along
with the Fund's audited financial statements, is included in this prospectus.

[Financial Highlights and Financial Statements to be filed by Amendment]

<PAGE>

PRIME VALUE OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SERVICE SHARES

INVESTMENT COMPANY ACT FILE NO. 7364
CUSIP 608912507

G01881-04-SS (3/99)

PROSPECTUS

PRIME VALUE OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL CAPITAL SHARES

A money market mutual fund seeking to achieve current income consistent
with stability of principal and liquidity.

CONTENTS

March 31, 1999

<PAGE>

RISK/RETURN SUMMARY

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

This investment objective may be changed by the Fund's Trustees without
shareholder approval.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high quality fixed income securities
maturing in one year or less. The average maturity of the Fund's portfolio will
be 90 days or less.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

Although the Fund seeks to maintain a stable net asset value, it is
possible to lose money investing in the Fund.

<PAGE>

RISK/RETURN BAR CHART AND TABLE

The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Institutional Capital Shares as of the
calendar year-end for each of five years.

The `y' axis reflects the "% Total Return" beginning with "0.00%" and
increasing in increments of 1.00% up to 6.00%.

The `x' axis represents calculation periods from the earliest calendar year
end of the Institutional Capital Shares' start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Capital Shares for
each calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1998. The percentages noted are: 4.14%, 5.95%,
5.29%, 5.52%, 5.46%, respectively. The Fund's Institutional Capital Shares are
not sold subject to a sales charge (load). Hence, the total returns displayed
above are based upon the net asset value. The Fund's Institutional Capital
Shares year-to-date total return as of the most recent calendar quarter ended
December 31, 1998 was 1.28%. Within the period shown in the Chart, the Fund's
highest quarterly return was 1.49% (quarter ended June 30, 1995). Its lowest
quarterly return was 0.78% (quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN

LIFE OF THE FUND1 1 YEAR 5 YEARS
Institutional Capital Shares 4.94% 5.46% 5.27%

1 The Fund's Institutional Capital Shares start of performance date was
February 8, 1993.

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Capital
Shares total returns on a yearly basis.

The table shows the Fund's average annual total returns for the calendar
periods ending December 31, 1998. The Fund's 7-DAY NET YIELD as of December 31,
1998 was 5.03%.*

*Investors may call the Fund at 1-800-341-7400 to acquire the current 7-Day
Net Yield.

Past performance does not necessarily predict future performance.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?

PRIME VALUE OBLIGATIONS FUND

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund's Institutional Capital Shares.

SHAREHOLDER FEES

FEES PAID DIRECTLY FROM YOUR INVESTMENT
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of None
offering price)
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase None
price or redemption proceeds, as applicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other None
Distributions) (as a percentage of offering price).
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None

ANNUAL FUND OPERATING EXPENSES (Before Reimbursements)1

Reimbursements of Fund Expenses ____%
Total Annual Fund Operating Expenses (after reimbursements) ____%

</TABLE>

3 Institutional Capital Shares did not pay or accrue the distribution (12b-1)
fee during the fiscal year ended January 31, 1998. Institutional Capital
Shares has no present intention of paying or accruing the distribution
(12b-1) fee during the year ended January 31, 1999.

<PAGE>

EXAMPLE

The Example is intended to help you compare the cost of investing in the
Fund's Institutional Capital Shares with the cost of investing in other mutual
funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Capital Shares for the time periods indicated and then redeem all of your shares
at the end of those periods. Expenses assuming no redemption are also shown. The
Example also assumes that your investment has a 5% return each year and that the
Fund's Institutional Capital Shares operating expenses are BEFORE REIMBURSEMENTS
as shown in the Table and remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high quality fixed income securities
maturing in one year or less. The average maturity of the Fund's portfolio will
be 90 days or less.

INDUSTRY CONCENTRATION

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

BANK INSTRUMENTS are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances.

CREDIT ENHANCEMENT consists of an arrangement in which one company agrees
to pay amounts due on a fixed income security after the issuer defaults. In some
cases the other company makes all payments directly to the security holders and
receives reimbursement from the issuer. Normally, the company providing such
credit enhancement has greater financial resources and liquidity than the
issuer. This may lead the Adviser to evaluate the credit risk of a fixed income
security based solely upon its credit enhancement. The Adviser purchases fixed
income securities that have been credit enhanced.

INVESTMENT RATINGS

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

Although there are many factors which may effect an investment in the Fund,
the principal risks of investing in a corporate money market fund are described
below.

MARKET RISK

Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise, prices
of fixed income securities fall.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

CREDIT RISK

SECTOR RISKS

WHAT DO SHARES COST?

You can purchase or redeem Shares any day the New York Stock Exchange
(NYSE) is open. When the Fund receives your transaction request in proper form,
it is processed at the next calculated net asset value (NAV). The Fund does not
charge a front-end sales charge. NAV is determined at 12:00 noon and 3:00 p.m.
(Eastern time) and as of the end of regular trading (normally 4:00 p.m. Eastern
time) each day the NYSE is open.

The required minimum initial investment for Fund Shares is $1,000,000.
There is no required minimum subsequent investment amount.

HOW IS THE FUND SOLD?

The Fund offers three share classes: Institutional Shares, Institutional
Service Shares and Institutional Capital Shares, each representing interests in
a single portfolio of securities. This prospectus relates only to Institutional
Capital Shares. Each share class has different expenses, which affect their
performance. Contact your investment professional or call 1-800-341-7400 for
more information concerning the other classes.

HOW TO PURCHASE SHARES

You may purchase Shares through an investment professional or directly from
the Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

o Establish an account with the investment professional; and

Investment professionals should send payments according to the instructions
in the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed New
Account Form; and

o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the
Fund and will become a shareholder after the Fund receives the order.

BY WIRE
Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire

ABA Number 011000028
Attention: EDGEWIRE

Wire Order Number, Dealer Number, or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on
the check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE
that requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317

BY INVEST-BY-PHONE

Once you establish and account, you may use the Fund's Invest-By-Phone
privilege for future Share purchases if you have an account with a bank that is
an Automated Clearinghouse member. To apply, call the Fund for an authorization
form. You may use Invest-By-Phone to purchase Shares approximately two weeks
from the date you file the form with Federated Shareholder Services Company.

BY AUTOMATED CLEARINGHOUSE (ACH)

HOW TO REDEEM SHARES

You should redeem Shares:

o through an investment professional if you purchased Shares through an
investment professional; or

o directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

Submit your redemption request to your investment professional by the end
of regular trading on the NYSE (normally 4 p.m. Eastern time). Investment
professionals are responsible for promptly submitting redemption requests and
providing proper written redemption instructions as outlined below.

DIRECTLY FROM THE FUND

BY TELEPHONE

You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 3:00 p.m. (Eastern time) your redemption will be wired
to you the same day. You will not receive that day's dividend.

If you call after 3:00 p.m. (Eastern time) your redemption will be wired to
you the following business day. You will receive that day's dividend.

BY MAIL

You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

<PAGE>

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317
All requests must include:

o Fund Name and Share Class, account number and account registration;

o amount to be redeemed; and

o signatures of all Shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

SIGNATURE GUARANTEES
Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last thirty days; or

o a redemption is payable to someone other than the shareholder(s) of record.

A signature guarantee is designed to protect your account from fraud.
Obtain a signature guarantee from a bank or trust company, savings association,
credit union or broker, dealer, or securities exchange member. A NOTARY PUBLIC
CANNOT PROVIDE A SIGNATURE GUARANTEE.

PAYMENT METHODS FOR REDEMPTIONS

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a
Federal Reserve System member.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio
securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day
after receiving a request in proper form. Payment may be delayed up to seven
days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund
if those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Fund will record your telephone instructions. If the Fund does not
follow reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

ACCOUNT AND SHARE INFORMATION

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases and redemptions. In addition,
you will receive periodic statements reporting all account activity, including,
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

<PAGE>

WHO MANAGES THE FUND?

More than 4,000 investment professionals make Federated Funds available to
their customers.

ADVISORY FEES

YEAR 2000 READINESS

FINANCIAL INFORMATION

FINANCIAL HIGHLIGHTS

This information has been audited by Ernst & Young LLP, whose report, along
with the Fund's audited financial statements, is included in this Prospectus.

[Financial Highlights and Financial Statements to be filed by Amendment]

PRIME VALUE OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL CAPITAL SHARES

A Statement of Additional Information (SAI) dated March 31, 1999, is
incorporated by reference into this prospectus. To obtain the SAI, and other
information without charge, call your investment professional or the Fund at
1-800-341-7400.

INVESTMENT COMPANY ACT FILE NO.811-7364
CUSIP 608912606

G01881-07 (3/99)

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

PRIME VALUE OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
INSTITUTIONAL CAPITAL SHARES

This Statement of Additional Information (SAI) is not a prospectus. Read
this SAI in conjunction with the prospectuses for Institutional Shares,
Institutional Service Shares, and Institutional Capital Shares of Prime Value
Obligations Fund (Fund), dated March 31, 1999. Obtain the prospectuses without
charge by calling 1-800-341-7400.

March 31, 1999

CUSIP 608912408

CUSIP 608912507

CUSIP 608912606

G01881-10 (3/99)

<PAGE>

HOW IS THE FUND ORGANIZED?

The Fund is a diversified portfolio of Money Market Obligations Trust II.
The Trust is an open-end, management investment company that was established
under the laws of the Commonwealth of Massachusetts on November 16, 1992. The
Trust may offer separate series of shares representing interests in separate
portfolios of securities. On November 15, 1996, the Trustees changed the name of
the Trust from Lehman Brothers Institutional Funds Group Trust to Money Market
Obligations Trust II and the name of the Fund from Prime Value Money Market Fund
to Prime Value Obligations Fund.

The Board of Trustees (the Board) has established three classes of shares
of the Fund, known as Institutional Shares, Institutional Service Shares, and
Institutional Capital Shares (Shares). This SAI relates to all classes of the
above-mentioned Shares.

SECURITIES IN WHICH THE FUND INVESTS

In pursuing its investment strategy, the Fund may invest in the following
securities for any purpose that is consistent with its investment objective.
SECURITIES DESCRIPTIONS AND TECHNIQUES

The following describes the types of fixed income securities in which the
Fund invests.

TREASURY SECURITIES are direct obligations of the federal government of the
United States. Investors regard treasury securities as having the lowest credit
risk.

SPECIAL TRANSACTIONS

Repurchase Agreements are subject to Credit Risk.

Securities lending activities are subject to Market Risk and Credit Risk.

INVESTMENT RATINGS

A nationally recognized rating service's two highest rating categories are
determined without regard for sub-categories and gradations. For example,
securities rated A-1, A-1+, or A-2 by Standard & Poor's, Prime-1 or Prime-2 by
Moody's Investors Service, Inc., or F-1+, F-1, or F-2 by Fitch IBCA, Inc. are
all considered rated in one of the two highest short-term rating categories. The
Fund will follow applicable regulations in determining whether a security rated
by more than one rating service can be treated as being in one of the two
highest short-term rating categories; currently, such securities must be rated
by two rating services in one of their two highest rating categories. See
"Regulatory Compliance."

INVESTMENT RISKS

MARKET RISK

Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise, prices
of fixed income
securities fall.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

CREDIT RISK

SECTOR RISKS

INVESTMENT LIMITATIONS

DIVERSIFICATION OF INVESTMENTS

ISSUING SENIOR SECURITIES, BORROWING MONEY AND PLEDGING ASSETS

CONCENTRATION OF INVESTMENTS

The Fund may not purchase any securities which would cause 25% or more of
the value of its total assets at the time of such purchase to be invested in the
securities of one or more issuers conducting their principal business
activivites in the same industry, except that the Fund intends to invest 25% or
more of the value of its total assets in obligations of issuers in the banking
industry or in obligations, such as repurchase agreements, secured by such
obligations; provided that there is no limitation with respect to investments in
U.S. government securities or, in bank instruments issued or enhanced by
approved banks.

LENDING CASH OR SECURITIES

UNDERWRITING

The Fund may not act as an underwriter of securities, except insofar as the
Fund may be deemed an underwriter under applicable securities laws in selling
portfolio securities.

INVESTING IN REAL ESTATE

The Fund may not purchase or sell real estate or real estate limited
partnerships, provided that the Fund may purchase securities of issuers which
invest in real estate or interests therein.

INVESTING IN COMMODITIES AND MINERALS

The Fund may not purchase or sell commodities contracts, or invest in oil,
gas or mineral exploration or development programs or in mineral leases.

INVESTING IN ILLIQUID SECURITIES

The Fund will not invest more than 10% of the value of its net assets in
illiquid securities including repurchase agreements providing for settlement in
more than seven days after notice.

SELLING SHORT AND BUYING ON MARGIN

The Fund will not sell any securities short or purchase any securities on
margin but may obtain such short-term credits as are necessary for clearance of
transactions.

INVESTING IN OPTIONS

The Fund will not invest in puts, calls, straddles, spreads, or any
combination of them.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The Fund will not acquire more than 3% of the total outstanding securities
of other investment companies, except as part of a merger, consolidation, or
other acquisition.

INVESTING IN NEW ISSUERS

The Fund will not invest more than 15% of the value of its total assets in
securities of companies (including predecessors) with less than three years of
continuous operation.

REGULATORY COMPLIANCE

The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940. In particular, the Fund will comply
with the various requirements of Rule 2a-7, which regulates money market mutual
funds. For example, with limited exceptions, Rule 2a-7 prohibits the investment
of more than 5% of the Fund's total assets in the securities of any one issuer,
although the Fund's investment limitation only requires such 5% diversification
with respect to 75% of its assets. The Fund will invest more than 5% of its
assets in any one issuer only under the circumstances permitted by Rule 2a-7.
The Fund will also determine the effective maturity of its investments , as well
as its ability to consider a security as having received the requisite
short-term ratings by NRSROs, according to Rule 2a-7. The Fund may change these
operational policies to reflect changes in the laws and regulations without the
approval of its shareholders.

DETERMINING MARKET VALUE OF SECURITIES

HOW IS THE FUND SOLD?

Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.), located at Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, PA
15222-3779, offers Shares on a continuous, best-efforts basis.

SHAREHOLDER SERVICES

SUPPLEMENTAL PAYMENTS

SUBACCOUNTING SERVICES

REDEMPTION IN KIND

MASSACHUSETTS PARTNERSHIP LAW

ACCOUNT AND SHARE INFORMATION

VOTING RIGHTS

As of January 6, 1999, the following shareholders owned of record,
beneficially, or both, 5% or more of outstanding Shares: Household Finance
Corp., Prospect Heights, Illinois, 5.98% of Institutional Shares; Gannett Co.,
Inc., Arlington, Virginia, 5.93% of Institutional Shares; Sunamerica National
Life Insurance Company, Los Angeles, California, 7.06% of Institutional Shares;
Federated Investors Management Company, Pittsburgh, Pennsylvania, 10.96% of
Institutional Shares; Hare & Co., c/o Bank of New York, New York, New York,
6.23% of Institutional Service Shares; Thafnab & Co., Terre Houte, Indiana,
10.21% of Institutional Service Shares; First Union Capital Markets Corp.,
Charlotte, North Carolina, 7.53% of Institutional Service Shares; Kaiser
Foundation Health Plan of Texas, Oakland, California, 9.91% of Institutional
Capital Shares; TJW SR/SKW Investments Ltd., Pasadena, Texas, 15.90% of
Institutional Capital Shares; First Union National Bank, Charlotte, North
Carolina, 26.32% of Institutional Capital Shares; and Norwest Investment
Services, Inc., Minneapolis, Minnesota, 11.79% of Institutional Capital Shares.

Shareholders owning 25% or more of outstanding Shares may be in control and
be able to affect the outcome of certain matters presented for a vote of
shareholders.

TAX INFORMATION

FEDERAL INCOME TAX

The Fund intends to meet requirements of Subchapter M of the Internal
Revenue Code applicable to regulated investment companies. If these requirements
are not met, it will not receive special tax treatment and will pay federal
income tax.

WHO MANAGES AND PROVIDES SERVICES TO THE FUND?

BOARD OF TRUSTEES

The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birthdate, present position(s) held with the Trust,
principal occupations for the past five years and other notable positions held,
total compensation received as a Trustee from the Trust for its most recent
fiscal year, and the total compensation received from the Federated Fund Complex
for the most recent calendar year. Trust is comprised of three funds and the
Federated Fund Complex is comprised of 54 investment companies, whose investment
advisers are affiliated with the Fund's Adviser.

As of January 6, 1999, the Fund's Board and Officers as a group owned less
than 1% of the Fund's outstanding Institutional, Institutional Service, and
Institutional Capital Shares.

NAME

BIRTHDATE AGGREGATE TOTAL
ADDRESS COMPENSATION COMPENSATION
POSITION WITH TRUST PRINCIPAL OCCUPATIONS FROM TRUST FROM TRUST
FOR PAST 5 YEARS AND FUND COMPLEX

JOHN F. DONAHUE*+ Chief Executive Officer and Director or $0 $0 for the
Trustee of the Federated Fund Complex; Trust and

TRUSTEE

Previos Positions: Director, United Complex
Refinery; Director, Forbes Fund; Chairman,
Pittsburgh Foundation; Chairman, Pittsburgh

Civic Light Opera.

Exchange, Inc.; Regional Administrator, companies
United States Securities and Exchange in the Fund
Commission. Complex

Director, Depository Trust Corporation.

Center, Prague.

Previous Positions: Professor, United
States Military Academy; Professor, United
States Air Force Academy.

<PAGE>

Securities Corp.

</TABLE>

+ Mr. Donahue is the father of J. Christopher Donahue, President and
Trustee of the Trust.

INVESTMENT ADVISER

The Adviser conducts investment research and makes investment decisions for
the Fund.

The Adviser is a wholly-owned subsidiary of Federated.

OTHER RELATED SERVICES

BROKERAGE TRANSACTIONS

RESEARCH SERVICES

On January 31, 1999, the Fund owned securities of the following regular
broker/dealers: ____________________________.

ADMINISTRATOR

MAXIMUM ADMINISTRATIVE AVERAGE AGGREGATE DAILY NET ASSETS OF THE
FEE FEDERATED FUNDS
0.150 of 1% on the first $250 million

Federated Services Company also provides certain accounting and
recordkeeping services with respect to the Fund's portfolio investments for a
fee based on Fund assets plus out-of-pocket expenses.

CUSTODIAN

State Street Bank and Trust Company, Boston, Massachusetts, is custodian
for the securities and cash of the Fund. Foreign instruments purchased by the
Fund are held by foreign banks participating in a network coordinated by State
Street Bank.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

INDEPENDENT AUDITORS

Ernst & Young LLP is the independent auditor for the Fund.

FEES PAID BY THE FUND FOR SERVICES

- -------------------------------- CURRENT FYE PRIOR FYE PRIOR FYE
FOR THE YEAR ENDED JANUARY 31,

1999

Advisory Fee Earned $ $ $
- ---------------------------------
Advisory Fee Reduction $ $ $
- ---------------------------------
Brokerage Commissions $ $ $
- ---------------------------------
Administrative Fee $ $ $
- ---------------------------------
Shareholder Services Fee

- ---------------------------------
Institutional Service Shares $ ---- ----
- ---------------------------------
Institutional Capital Shares $ ---- ----
- ---------------------------------

Fees are allocated among Classes based on their pro rata share of Fund
assets, except for shareholder services fees, which are borne only by the
applicable Class of Shares.

HOW DOES THE FUND MEASURE PERFORMANCE?

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

<PAGE>

AVERAGE ANNUAL TOTAL RETURNS AND YIELD

Total returns given for the one-, five- and since inception periods ended
JANUARY 31, 1999.

Yield and Effective Yield given for the 7-day period ended JANUARY 31, 1999.

<S> <C> <C> <C> <C>
7 -DAY PERIOD 1 YEAR 5 YEARS SINCE INCEPTION
ON FEBRUARY 8, 1993

INSTITUTIONAL SHARES

Total Return ___% ___% ___%

Yield ___%
Effective Yield ___%

7 -DAY PERIOD 1 YEAR 5 YEARS SINCE INCEPTION
ON SEPTEMBER 1, 1993

INSTITUTIONAL
SERVICE SHARES

Total Return ___% ___% ___%

Yield
Effective Yield

7 -DAY PERIOD 1 YEAR 5 YEARS SINCE INCEPTION
ON FEBRUARY 1, 1996

INSTITUTIONAL
CAPITAL SHARES

Total Return ___% ___% ___%

Yield ___%
Effective Yield ___%

</TABLE>

TOTAL RETURN

Total return represents the change (expressed as a percentage) in the value
of Shares over a specific period of time, and includes the investment of income
and capital gains distributions.

YIELD

<PAGE>

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;

o discussions of economic, financial and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Funds; and

o information about the mutual fund industry from sources such as the
Investment Company Institute.

The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

O LIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund categories
based on total return, which assumes the reinvestment of all income
dividends and capital gains distributions, if any.

o MONEY, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.

WHO IS FEDERATED INVESTORS, INC.?

FEDERATED FUNDS OVERVIEW

MUNICIPAL FUNDS

In the municipal sector, as of December 31, 1998, Federated managed 10bond
funds with approximately $2.2 billion in assets and 23 money market funds with
approximately $12.5 billion in total assets. In 1976, Federated introduced one
of the first municipal bond mutual funds in the industry and is now one of the
largest institutional buyers of municipal securities. The Funds may quote
statistics from organizations including The Tax Foundation and the National
Taxpayers Union regarding the tax obligations of Americans.

EQUITY FUNDS

CORPORATE BOND FUNDS

GOVERNMENT FUNDS

MONEY MARKET FUNDS

In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market fund.
Simultaneously, the company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a principal means used by
money managers today to value money market fund shares. Other innovations
include the first institutional tax-free money market fund. As of December 31,
1998, Federated managed more than $63.1 billion in assets across 52 money market
funds, including 19 government, 9 prime and 23 municipal with assets
approximating $41.6 billion, $22.8 billion and $12.5 billion, respectively.

advisory companies.

MUTUAL FUND MARKET

FEDERATED CLIENTS OVERVIEW

Federated distributes mutual funds through its subsidiaries for a variety
of investment purposes. Specific markets include:

INSTITUTIONAL CLIENTS

BANK MARKETING

BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES

<PAGE>

ADDRESSES

PRIME VALUE OBLIGATIONS FUND

Institutional Shares
Institutional Service Shares
Institutional Capital Shares

Federated Investors Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7000

DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, PA 15222-3779

INVESTMENT ADVISER

Federated Management
Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, PA 15222-3779

CUSTODIAN

State Street Bank and Trust Company
P.O. Box 8600

Boston, MA 02266-8600

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

INDEPENDENT AUDITORS

Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072

PROSPECTUS

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SHARES

A money market mutual fund seeking to provide current income exempt from
all federal regular income tax consistent with stability of principal.

CONTENTS

March 31, 1999

<PAGE>

RISK/RETURN SUMMARY

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The Fund is a money market fund which seeks to maintain a stable net asset
value of $1.00. The Fund's investment objective is to provide current income
exempt from all federal regular income tax consistent with stability of
principal. While there is no assurance that the Fund will achieve its investment
objective, it endeavors to do so by following the strategies and policies
described in this prospectus.

This investment objective may be changed by the Fund's Trustees without
shareholder approval.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund invests in tax exempt securities so that the Fund's annual
interest income is exempt from federal regular income tax. Interest income from
the Fund's investments may be subject to the federal alternative minimum tax for
individuals and corporations.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

Although the Fund seeks to maintain a stable net asset value, it is
possible to lose money investing in the Fund.

<PAGE>

RISK/RETURN BAR CHART AND TABLE

The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Institutional Shares as of the calendar
year-end for each of five years.

The `y' axis reflects the "% Total Return" beginning with "0.00%" and
increasing in increments of 0.50% up to 4.50%.

The `x' axis represents calculation periods from the earliest calendar year
end of the Institutional Shares' start of business through the calendar year
ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Shares for each
calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1998. The percentages noted are: 2.92%, 4.04%,
3.58%, 3.67%, 3.56%, respectively. The Fund's Institutional Shares are not sold
subject to a sales charge (load). Hence, the total returns displayed above are
based upon the net asset value. The Fund's Institutional Shares year-to-date
total return as of the most recent calendar quarter ended December 31, 1998 was
0.86%. Within the period shown in the Chart, the Fund's highest quarterly return
was 1.04% (quarter ended June 30, 1995). Its lowest quarterly return was 0.60%
(quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN

LIFE OF THE FUND1 1 YEAR 5 YEARS
Institutional Shares 3.39% 3.56% 3.55%

1 The Fund's Institutional Shares start of performance date was February 8,
1993.

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Shares
total returns on a yearly basis.

The table shows the Fund's average annual total returns for the calendar
periods ending December 31, 1998. The Fund's 7-DAY NET YIELD as of December 31,
1998 was 3.77%.*

*Investors may call the Fund at 1-800-341-7400 to acquire the current 7-Day
Net Yield.

Past performance does not necessarily predict future performance.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?

MUNICIPAL OBLIGATIONS FUND

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund's Institutional Shares.

SHAREHOLDER FEES

ANNUAL FUND OPERATING EXPENSES (Before Reimbursements)1

Reimbursements of Fund Expenses ____%
Total Annual Fund Operating Expenses (after reimbursements)____%

3 Institutional Shares did not pay or accrue the distribution (12b-1) fee
during the fiscal year ended January 31, 1999. Institutional Shares has no
present intention of paying or accruing the distribution (12b-1) fee during
the year ended January 31, 1999.

4 The shareholder services fee for Institutional Shares has been voluntarily
reduced. This voluntary reduction can be terminated at any time. The
shareholder services fee paid by the Fund (after the voluntary reduction)
was ___% for the year ended January 31, 1999. Institutional Shares has no
present intention of paying or accruing the shareholder services fee during
the year ended January 31, 1999.

<PAGE>

EXAMPLE

The Example is intended to help you compare the cost of investing in the
Fund's Institutional Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Shares for the time periods indicated and then redeem all of your shares at the
end of those periods. Expenses assuming no redemption are also shown. The
Example also assumes that your investment has a 5% return each year and that the
Fund's Institutional Shares operating expenses are BEFORE REIMBURSEMENTS as
shown in the Table and remain the same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high-quality tax-exempt securities
maturing in 13 months or less. The average maturity of the Fund's portfolio will
be 90 days or less.

The Fund's Adviser performs a fundamental credit analysis to develop an
approved list of issuers and securities that meet the Adviser's minimum credit
standards. The Adviser targets an average portfolio maturity based upon its
interest rate outlook and the tax-exempt securities available. The Adviser
structures the portfolio by combining variable rate demand instruments and
municipal notes. Depending on the supply of municipal securities, the Adviser
generally shortens the portfolio's maturity when it expects interest rates to
rise and extends the maturity when it expects interest rates to fall. In order
to enhance yield, the Fund's Adviser will seek to invest a significant portion
of the portfolio in tax exempt securities subject to the alternative minimum
tax.

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

TAX EXEMPT SECURITIES are FIXED INCOME SECURITIES that pay interest that is
not subject to regular federal income taxes. Typically, states, counties, cities
and other political subdivisions and authorities issue tax exempt securities.
The market categorizes tax exempt securities by their source of repayment. FIXED
INCOME SECURITIES pay interest, dividends or distributions at a specified rate.
The rate may be a fixed percentage of the principal or adjusted periodically. In
addition, the issuer of a fixed income security must repay the principal amount
of the security, normally within a specified time.

The following describes the types of tax exempt securities in which the
Fund invests.

VARIABLE RATE DEMAND INSTRUMENTS are tax exempt securities that require the
issuer or a third party, such as a dealer or bank, to repurchase the security
for its face value upon demand. The securities also pay interest at a variable
rate intended to cause the securities to trade at their face value. The Fund
treats demand instruments as short-term securities, because their variable
interest rate adjusts in response to changes in market rates, even though their
stated maturity may extend beyond thirteen months.

MUNICIPAL NOTES are short-term tax exempt securities. Many municipalities
issue such notes to fund their current operations before collecting taxes or
other municipal revenues. Municipalities may also issue notes to fund capital
projects prior to issuing long-term bonds. The issuers typically repay the notes
at the end of their fiscal year, either with taxes, other revenues or proceeds
from newly issued notes or bonds.

CREDIT ENHANCEMENT consists of an arrangement in which a company agrees to
pay amounts due on a fixed income security if the issuer defaults. In some cases
the company providing credit enhancement makes all payments directly to the
security holders and receives reimbursement from the issuer. Normally, the
credit enhancer has greater financial resources and liquidity than the issuer.
For this reason, the Adviser usually evaluates the credit risk of a fixed income
security based solely upon its credit enhancement.

INVESTMENT RATINGS

The securities in which the Fund invests must be rated in one of the two
highest short-term rating categories by one or more nationally recognized rating
services or be of
comparable quality to securities having such ratings.

<PAGE>

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

Although there are many factors which may effect an investment in the Fund,
the principal risks of investing in a municipal money market fund are described
below.

CREDIT RISK

Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money. Money market funds try to minimize this risk by purchasing
higher quality securities.

Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services. These services assign ratings
to securities by assessing the likelihood of issuer default. Lower credit
ratings correspond to higher credit risk. If a security has not received a
rating, the Fund must rely entirely upon the Adviser's credit assessment.

BOND MARKET RISK

Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise, prices
of fixed income securities fall.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

SECTOR RISK

A substantial part of the Fund's portfolio may be comprised of securities
issued or credit enhanced by companies in similar businesses, by issuers located
in the same state, or with other similar characteristics. As a result, the Fund
will be more susceptible to any economic, business, political, or other
developments which generally affect these issuers

TEMPORARY DEFENSIVE INVESTMENTS. During adverse market conditions, the Fund
may temporarily depart from its principal investment strategies by investing in
securities subject to federal regular income tax. Temporary investments will be
of comparable quality to other securities in which the Fund invests. This may
cause the Fund to give up greater after tax investment returns to maintain the
safety of principal. This also may cause the Fund to receive and distribute
taxable income to investors.

WHAT DO SHARES COST?

The required minimum initial investment for Fund Shares is $1,000,000.
There is no required minimum subsequent investment amount.

HOW IS THE FUND SOLD?

The Fund's Distributor markets the Shares described in this prospectus to
institutions acting in an agency or fiduciary capacity.

HOW TO PURCHASE SHARES

You may purchase Shares through an investment professional or directly from
the Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

o Establish an account with the investment professional; and

Investment professionals should send payments according to the instructions
in the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed New Account
Form; and

o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the
Fund and will become a shareholder after the Fund receives the order.

BY WIRE
Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire

ABA Number 011000028
Attention: EDGEWIRE

Wire Order Number, Dealer Number, or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on
the check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE
that requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317

BY INVEST-BY-PHONE

BY AUTOMATED CLEARINGHOUSE (ACH)

HOW TO REDEEM SHARES

You should redeem Shares:

o through an investment professional if you purchased Shares through an
investment professional; or

o directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

DIRECTLY FROM THE FUND

BY TELEPHONE

You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions. If you call before
12:00 noon (Eastern time) your redemption will be wired to you the same day. You
will not receive that day's dividend.

If you call after 12:00 noon (Eastern time) your redemption will be wired
to you the following business day. You will receive that day's dividend.

BY MAIL

You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317
All requests must include:

o Fund Name and Share Class, account number and account registration;

o amount to be redeemed; and

o signatures of all Shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

SIGNATURE GUARANTEES
Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last thirty days; or

o a redemption is payable to someone other than the shareholder(s) of record.

PAYMENT METHODS FOR REDEMPTIONS

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a
Federal Reserve System member.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day
after receiving a request in proper form. Payment may be delayed up to seven
days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund
if those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Fund will record your telephone instructions. If the Fund does not
follow reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

ACCOUNT AND SHARE INFORMATION

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases and redemptions. In addition,
you will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax
liability.

WHO MANAGES THE FUND?

More than 4,000 investment professionals make Federated Funds available to
their customers.

ADVISORY FEES

YEAR 2000 READINESS

FINANCIAL INFORMATION

FINANCIAL HIGHLIGHTS

This information has been audited by Ernst & Young LLP, whose report, along
with the Fund's audited financial statements, is included in this prospectus.

[Financial Highlights and Financial Statements to be filed by Amendment]

<PAGE>

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SHARES

INVESTMENT COMPANY ACT FILE NO. 811-7364
CUSIP 608912101

G01881-05-IS (3/99)

PROSPECTUS

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SERVICE SHARES

A money market mutual fund seeking to provide current income exempt from
all federal regular income tax consistent with stability of principal.

CONTENTS

March 31, 1999

<PAGE>

RISK/RETURN SUMMARY

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

This investment objective may be changed by the Fund's Trustees without
shareholder approval.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

Although the Fund seeks to maintain a stable net asset value, it is
possible to lose money investing in the Fund.

<PAGE>

RISK/RETURN BAR CHART AND TABLE

The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Institutional Service Shares as of the
calendar year-end for each of five years.

The `y' axis reflects the "% Total Return" beginning with "0.00%" and
increasing in increments of 0.50% up to 4.00%.

The `x' axis represents calculation periods from the earliest calendar year
end of the Institutional Service Shares' start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Service Shares for
each calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1998. The percentages noted are: 2.67%, 3.78%,
3.32%, 3.41%, 3.30%, respectively. The Fund's Institutional Service Shares are
not sold subject to a sales charge (load). Hence, the total returns displayed
above are based upon the net asset value. The Fund's Institutional Service
Shares year-to-date total return as of the most recent calendar quarter ended
December 31, 1998 was 0.80%. Within the period shown in the Chart, the Fund's
highest quarterly return was 0.98% (quarter ended June 30, 1995). Its lowest
quarterly return was 0.53% (quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN

LIFE OF THE FUND1 1 YEAR 5 YEARS
Institutional Service Shares 3.14% 3.30% 3.29%

1 The Fund's Institutional Service Shares start of performance date was
February 8, 1993.

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Service
Shares total returns on a yearly basis.

The table shows the Fund's average annual total returns for the calendar
periods ending December 31, 1998. The Fund's 7-DAY NET YIELD as of December 31,
1998 was 3.52%.*

*Investors may call the Fund at 1-800-341-7400 to acquire the current 7-Day
Net Yield.

Past performance does not necessarily predict future performance.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?

MUNICIPAL OBLIGATIONS FUND

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund's Institutional Service Shares.

SHAREHOLDER FEES

ANNUAL FUND OPERATING EXPENSES (Before Reimbursements)1

</TABLE>

Reimbursements of Fund Expenses ____%
Total Annual Fund Operating Expenses (after reimbursements) ____%

<PAGE>

EXAMPLE

The Example is intended to help you compare the cost of investing in the
Fund's Institutional Service Shares with the cost of investing in other mutual
funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Service Shares for the time periods indicated and then redeem all of your shares
at the end of those periods. Expenses assuming no redemption are also shown. The
Example also assumes that your investment has a 5% return each year and that the
Fund's Institutional Service Shares operating expenses are BEFORE REIMBURSEMENTS
as shown in the Table and remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high-quality tax-exempt securities
maturing in 13 months or less. The average maturity of the Fund's portfolio will
be 90 days or less.

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

The following describes the types of tax exempt securities in which the
Fund invests.

INVESTMENT RATINGS

<PAGE>

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

Although there are many factors which may effect an investment in the Fund,
the principal risks of investing in a municipal money market fund are described
below.

CREDIT RISK

BOND MARKET RISK

Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise, prices
of fixed income
securities fall.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

SECTOR RISK

WHAT DO SHARES COST?

The required minimum initial investment for Fund Shares is $1,000,000.
There is no required minimum subsequent investment amount.

HOW IS THE FUND SOLD?

The Fund offers three share classes: Institutional Shares, Institutional
Service Shares and Institutional Capital Shares, each representing interests in
a single portfolio of securities. This prospectus relates only to Institutional
Service Shares. Each share class has different expenses which affect their
performance. Contact your investment professional or call 1-800-341-7400 for
more information concerning the other classes.

The Fund's Distributor markets the Shares described in this prospectus to
institutions acting in an agency or fiduciary capacity.

HOW TO PURCHASE SHARES

You may purchase Shares through an investment professional or directly from
the Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

o Establish an account with the investment professional; and

Investment professionals should send payments according to the instructions
in the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed New Account
Form; and

o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the
Fund and will become a shareholder after the Fund receives the order.

BY WIRE
Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire

ABA Number 011000028
Attention: EDGEWIRE

Wire Order Number, Dealer Number, or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on
the check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE
that requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317

BY INVEST-BY-PHONE

BY AUTOMATED CLEARINGHOUSE (ACH)

Once you have opened an account, you may purchase additional Shares through
a depository institution that is an ACH member. This purchase option can be
established by
completing the appropriate sections of the New Account Form.

HOW TO REDEEM SHARES

You should redeem Shares:

o through an investment professional if you purchased Shares through an
investment professional; or

o directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

DIRECTLY FROM THE FUND

BY TELEPHONE

You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 12:00 noon (Eastern time) your redemption will be wired
to you the same day. You will not receive that day's dividend.

If you call after 12:00 noon (Eastern time) your redemption will be wired
to you the following business day. You will receive that day's dividend.

BY MAIL

You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317
All requests must include:

o Fund Name and Share Class, account number and account registration;

o amount to be redeemed; and

o signatures of all Shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

SIGNATURE GUARANTEES
Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last thirty days; or

o a redemption is payable to someone other than the shareholder(s) of record.

PAYMENT METHODS FOR REDEMPTIONS

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a
Federal Reserve System member.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day
after receiving a request in proper form. Payment may be delayed up to seven
days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts the
Fund's ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund
if those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Fund will record your telephone instructions. If the Fund does not
follow reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

ACCOUNT AND SHARE INFORMATION

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases and redemptions. In addition,
you will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

<PAGE>

WHO MANAGES THE FUND?

More than 4,000 investment professionals make Federated Funds available to
their customers.

ADVISORY FEES

YEAR 2000 READINESS

FINANCIAL INFORMATION

FINANCIAL HIGHLIGHTS

This information has been audited by Ernst & Young LLP, whose report, along
with the Fund's audited financial statements, is included in this prospectus.

[Financial Highlights and Financial Statements to be filed by Amendment]

<PAGE>

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SERVICE SHARES

INVESTMENT COMPANY ACT FILE NO. 7364
CUSIP 608912200

G01881-06-SS (3/99)

<PAGE>

PROSPECTUS

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL CAPITAL SHARES

A money market mutual fund seeking to provide current income exempt from
federal regular income tax consistent with stability of principal.

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any
representation to the contrary is a criminal offense.

CONTENTS

March 31, 1999

<PAGE>

RISK/RETURN SUMMARY

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

This investment objective may be changed by the Fund's Trustees without
shareholder approval.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

Although the Fund seeks to maintain a stable net asset value, it is
possible to lose money investing in the Fund.

<PAGE>

RISK/RETURN BAR CHART AND TABLE

The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Institutional Capital Shares as of the
calendar year-end for each of five years.

The `y' axis reflects the "% Total Return" beginning with "0.00%" and
increasing in increments of 0.50% up to 4.00%.

The `x' axis represents calculation periods from the earliest calendar year
end of the Institutional Capital Shares' start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features five distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Institutional Capital Shares for
each calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1998. The percentages noted are: 2.77%, 3.88%,
3.42%, 3.55%, 3.44%, respectively. The Fund's Institutional Capital Shares are
not sold subject to a sales charge (load). Hence, the total returns displayed
above are based upon the net asset value. The Fund's Institutional Capital
Shares year-to-date total return as of the most recent calendar quarter ended
December 31, 1998 was 0.84%. Within the period shown in the Chart, the Fund's
highest quarterly return was 1.00% (quarter ended June 30, 1995). Its lowest
quarterly return was 0.56% (quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN

LIFE OF THE FUND1 1 YEAR 5 YEARS
Institutional Capital Shares 3.25% 3.44% 3.41%

1 The Fund's Institutional Capital Shares start of performance date was
February 8, 1993.

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Capital
Shares total returns on a yearly basis.

The table shows the Fund's average annual total returns for the calendar
periods ending December 31, 1998. The Fund's 7-DAY NET YIELD as of December 31,
1998 was 3.65%.* *Investors may call the Fund at 1-800-341-7400 to acquire the
current 7-Day Net Yield.

Past performance does not necessarily predict future performance.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?

MUNICIPAL OBLIGATIONS FUND

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund's Institutional Capital Shares.

SHAREHOLDER FEES
<TABLE>

ANNUAL FUND OPERATING EXPENSES (Before Reimbursements)1

</TABLE>

Reimbursements of Fund Expenses ____%
Total Annual Fund Operating Expenses (after reimbursements) ____%

<PAGE>

EXAMPLE
The Example is intended to help you compare the cost of investing in the
Fund's Institutional Capital Shares with the cost of investing in other mutual
funds.

The Example assumes that you invest $10,000 in the Fund's Institutional
Capital Shares for the time periods indicated and then redeem all of your shares
at the end of those periods. Expenses assuming no redemption are also shown. The
Example also assumes that your investment has a 5% return each year and that the
Fund's Institutional Capital Shares operating expenses are BEFORE REIMBURSEMENTS
as shown in the Table and remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:

INSTITUTIONAL CAPITAL SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Expenses assuming redemption $___ $___ $___ $___
- -----------------------------------
Expenses assuming no redemption $___ $___ $___ $___
- -----------------------------------

<PAGE>

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high-quality tax-exempt securities
maturing in 13 months or less. The average maturity of the Fund's portfolio will
be 90 days or less.

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

The following describes the types of tax exempt securities in which the
Fund invests.

INVESTMENT RATINGS

<PAGE>

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

Although there are many factors which may effect an investment in the Fund,
the principal risks of investing in a municipal money market fund are described
below.

CREDIT RISK

BOND MARKET RISK

Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise, prices
of fixed income securities fall.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing
short-term securities.

SECTOR RISK

WHAT DO SHARES COST?

The required minimum initial investment for Fund Shares is $1,000,000.
There is no required minimum subsequent investment amount.

HOW IS THE FUND SOLD?

The Fund offers three share classes: Institutional Shares, Institutional
Service Shares and Institutional Capital Shares, each representing interests in
a single portfolio of securities. This prospectus relates only to Institutional
Capital Shares. Each share class has different expenses, which affect their
performance. Contact your investment professional or call 1-800-341-7400 for
more information concerning the other classes.

HOW TO PURCHASE SHARES

You may purchase Shares through an investment professional or directly from
the Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

o Establish an account with the investment professional; and

Investment professionals should send payments according to the instructions
in the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed New Account
Form; and

o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the
Fund and will become a shareholder after the Fund receives the order.

BY WIRE
Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire

ABA Number 011000028
Attention: EDGEWIRE

Wire Order Number, Dealer Number, or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

<PAGE>

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on
the check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE
that requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317

BY INVEST-BY-PHONE

BY AUTOMATED CLEARINGHOUSE (ACH)

Once you have opened an account, you may purchase additional Shares through
a depository institution that is an ACH member. This purchase option can be
established by
completing the appropriate sections of the New Account Form.

HOW TO REDEEM SHARES

You should redeem Shares:

o through an investment professional if you purchased Shares through an
investment professional; or

o directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

BY TELEPHONE

You may redeem Shares by calling the Fund once you have completed the
appropriate authorization form for telephone transactions.

If you call before 12:00 noon (Eastern time) your redemption will be wired
to you the same day. You will not receive that day's dividend.

If you call after 12:00 noon (Eastern time) your redemption will be wired
to you the following business day. You will receive that day's dividend.

<PAGE>

BY MAIL

You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company
1099 Hingham Street

Rockland, MA 02370-3317
All requests must include:

o Fund Name and Share Class, account number and account registration;

o amount to be redeemed; and

o signatures of all Shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

SIGNATURE GUARANTEES
Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last thirty days; or

o a redemption is payable to someone other than the shareholder(s) of record.

A signature guarantee is designed to protect your account from fraud.
Obtain a signature guarantee from a bank or trust company, savings association,
credit union or broker, dealer, or securities exchange member. A NOTARY PUBLIC
CANNOT PROVIDE A SIGNATURE GUARANTEE.

PAYMENT METHODS FOR REDEMPTIONS

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a
Federal Reserve System member.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day
after receiving a request in proper form. Payment may be delayed up to seven
days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts the
Fund's ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund
if those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Fund will record your telephone instructions. If the Fund does not
follow reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

ACCOUNT AND SHARE INFORMATION

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases and redemptions. In addition,
you will receive periodic statements reporting all account activity, including,
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

<PAGE>

WHO MANAGES THE FUND?

ADVISORY FEES

YEAR 2000 READINESS

FINANCIAL INFORMATION

FINANCIAL HIGHLIGHTS

This information has been audited by Ernst & Young LLP, whose report, along
with the Fund's audited financial statements, is included in this Prospectus.

[Financial Highlights and Financial Statements to be filed by Amendment]

<PAGE>

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL CAPITAL SHARES

INVESTMENT COMPANY ACT FILE NO.811-7364
CUSIP 608912309

G01881-09 (3/99)

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

MUNICIPAL OBLIGATIONS FUND

A Portfolio of Money Market Obligations Trust II

INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
INSTITUTIONAL CAPITAL SHARES

This Statement of Additional Information (SAI) is not a prospectus. Read
this SAI in conjunction with the prospectuses for Institutional Shares,
Institutional Service Shares, and Institutional Capital Shares of Municipal
Obligations Fund (Fund), dated March 31, 1999. Obtain the prospectuses without
charge by calling 1-800-341-7400.

March 31, 1999

CUSIP 608912101

CUSIP 608912007

CUSIP 608912309

G01881-12 (3/99)

<PAGE>

HOW IS THE FUND ORGANIZED?

The Fund is a diversified portfolio of Money Market Obligations Trust II.
The Trust is an open-end, management investment company that was established
under the laws of the Commonwealth of Massachusetts on November 16, 1992. The
Trust may offer separate series of shares representing interests in separate
portfolios of securities. On November 15, 1996, the Trustees changed the name of
the Trust from Lehman Brothers Institutional Funds Group Trust to Money Market
Obligations Trust II and the name of the Fund from Municipal Money Market Fund
to Municipal Obligations Fund.

SECURITIES IN WHICH THE FUND INVESTS

In pursuing its investment strategy, the Fund may invest in the following
securities for any purpose that is consistent with its investment objective.

SECURITIES DESCRIPTIONS AND TECHNIQUES

GENERAL OBLIGATION BONDS are supported by the issuer's power to exact
property or other taxes. The issuer must impose and collect taxes sufficient to
pay principal and interest on the bonds. However, the issuer's authority to
impose additional taxes may be limited by its charter or state law.

SPECIAL REVENUE BONDS are payable solely from specific revenues received by
the issuer such as specific taxes, assessments, tolls, or fees. Bondholders may
not collect from the municipality's general taxes or revenues. For example, a
municipality may issue bonds to build a toll road, and pledge the tolls to repay
the bonds. Therefore, a shortfall in the tolls normally would result in a
default on the bonds.

PRIVATE ACTIVITY BONDS are special revenue bonds used to finance private
entities. For example, a municipality may issue bonds to finance a new factory
to improve its local economy. The municipality would lend the proceeds from its
bonds to the company using the factory, and the company would agree to make loan
payments sufficient to repay the bonds. The bonds would be payable solely from
the company's loan payments, not from any other revenues of the municipality.
Therefore, any default on the loan normally would result in a default on the
bonds.

The interest on many types of private activity bonds is subject to the
federal alternative minimum tax (AMT). The Fund may invest in bonds subject to
AMT, as discussed in
"Securities Descriptions and Techniques" in this SAI.

<PAGE>

MUNICIPAL LEASES

Municipalities may enter into leases for equipment or facilities. In order
to comply with state public financing laws, these leases are typically subject
to annual appropriation. In other words, a municipality may end a lease, without
penalty, by not providing for the lease payments in its annual budget. After the
lease ends, the lessor (the Fund) can resell the equipment or facility but may
lose money on the sale.

The Fund may invest in securities supported by pools of municipal leases.
The most common type of lease backed securities are certificates of
participation (COPs). However, the Fund may also invest directly in individual
leases.

CREDIT ENHANCEMENT. Common types of credit enhancement include guarantees,
letters of credit, bond insurance and surety bonds. Credit enhancement also
includes arrangements where securities or other liquid assets secure payment of
a fixed income security. If a default occurs, these assets may be sold and the
proceeds paid to security's holders. Either form of credit enhancement reduces
credit risks by providing another source of payment for a fixed income security.

INVESTMENT RATINGS. A nationally recognized rating service'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 (S&P), MIG-1 or MIG-2 by Moody's Investors Service, Inc. (Moody's), or
F-1+, F-1, or F-2 by Fitch IBCA, Inc. (Fitch) are all considered rated in one of
the two highest short-term rating categories. The Fund will follow applicable
regulations in determining whether a security rated by more than one rating
service can be treated as being in one of the two highest short-term rating
categories; currently, such securities must be rated by two rating services in
one of their two highest rating categories. See "Regulatory Compliance."

INVESTMENT RATINGS

A nationally recognized rating service'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, MIG-1 or MIG-2 by
Moody's Investors Service, Inc., or F-1+, F-1, or F-2 by Fitch IBCA, Inc. are
all considered rated in one of the two highest short-term rating categories. The
Fund will follow applicable regulations in determining whether a security rated
by more than one rating service can be treated as being in one of the two
highest short-term rating categories; currently, such securities must be rated
by two rating services in one of their two highest rating categories. See
"Regulatory Compliance."

INVESTMENT RISKS

There are many factors which may effect an investment in the Fund. The
principal risks of investing in a municipal money market fund are described in
the Fund's prospectus. An additional risk factor is outlined below.

TAX RISKS

In order to be tax-exempt, municipal securities must meet certain legal
requirements. Failure to meet such requirements may cause the interest received
and distributed by the Fund to shareholders to be taxable.

Changes or proposed changes in federal tax laws may cause the prices of
municipal securities to fall.

FUNDAMENTAL INVESTMENT POLICIES:

As a fundamental investment policy, at least 80% of the Fund's annual
interest income will be exempt from federal regular income tax.

INVESTMENT LIMITATIONS

DIVERSIFICATION OF INVESTMENTS

ISSUING SENIOR SECURITIES, BORROWING MONEY AND PLEDGING ASSETS

LENDING CASH OR SECURITIES

The Fund may not make loans, except that the Fund may (i) purchase or hold
debt obligations in accordance with its investment objective and policies, (ii)
enter into repurchase agreements for securities, (iii) lend portfolio
securities, and (iv) subject to specific authorization by the SEC, lend money to
other funds advised by the adviser or an affiliate of the adviser.

UNDERWRITING

The Fund may not act as an underwriter of securities, except insofar as the
Fund may be deemed an underwriter under applicable securities laws in selling
portfolio securities.

INVESTING IN REAL ESTATE

The Fund may not purchase or sell real estate or real estate limited
partnerships, provided that the Fund may purchase securities of issuers which
invest in real estate or interests therein.

INVESTING IN COMMODITIES AND MINERALS

The Fund may not purchase or sell commodities contracts, or invest in oil,
gas or mineral exploration or development programs or in mineral leases.

CONCENTRATION OF INVESTMENTS

The Fund may not purchase any securities which would cause 25% or more of
the value of its total assets at the time of such purchase to be invested in the
securities of one or more issuers conducting their principal business activities
in the same industry, or in industrial development bonds or other securities,
the interest upon which is paid from revenues of similar types of projects
(unless the Fund is in a temporary defensive position); provided that there is
no limitation with respect to investments in U.S. government securities.

INVESTING IN ILLIQUID SECURITIES

The Fund will not invest more than 10% of the value of its net assets in
illiquid securities including repurchase agreements providing for settlement in
more than seven days after notice.

SELLING SHORT AND BUYING ON MARGIN

The Fund will not sell any securities short or purchase any securities on
margin but may obtain such short-term credits as are necessary for clearance of
transactions.

INVESTING IN OPTIONS

The Fund will not invest in puts, calls, straddles, spreads, or any
combination of them.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The Fund will not acquire more than 3% of the total outstanding securities
of other investment companies, except as part of a merger, consolidation, or
other acquisition.

In addition, without approval of the holders of a majority of the Fund's
outstanding shares, the Fund may not change its policy of investing at least 80%
of its total assets (except during temporary defensive periods) in Municipal
Securities.

REGULATORY COMPLIANCE

DETERMINING MARKET VALUE OF SECURITIES

HOW IS THE FUND SOLD?

SHAREHOLDER SERVICES

SUPPLEMENTAL PAYMENTS

SUBACCOUNTING SERVICES

REDEMPTION IN KIND

MASSACHUSETTS PARTNERSHIP LAW

ACCOUNT AND SHARE INFORMATION

VOTING RIGHTS

As of January 6, 1999, the following shareholders owned of record,
beneficially, or both, 5% or more of outstanding Shares: Society Asset
Management Inc., Cleveland, Ohio, 5.35% of Institutional Shares; Sinclair Oil
Corp., Salt Lake City, Utah, 10.83% of Institutional Shares; Employees
Reinsurance Corporation, Overland Park, Kansas, 5.19% of Institutional Shares;
Synopsys Inc., Mountain View, California, 16.57% of Institutional Shares; Dress
Barn Inc., Suffern, New York, 11.06% of Institutional Shares; Cenco, Birmingham,
Alabama, 15.56% of Institutional Shares; Houvis & Co., First American National
Bank, Nashville, Tennessee, 5.73% of Institutional Shares; Balcor Holding
Corporation, Oklahoma City, Oklahoma, 6.73% of Institutional Service Shares; PNC
Securities Corp., Pittsburgh, Pennsylvania, 8.60% of Institutional Service
Shares; S. Daniel Abraham, Carl Tsang, Palm Beach, Florida, 17.68% of
Institutional Service Shares; The Mark Travel Corp., Milwaukee, Wisconsin,
12.35% of Institutional Service Shares; Parker/Hunter Inc., Pittsburgh,
Pennsylvania, 15.65% of Institutional Capital Shares; Twelve (12) Technologies,
Inc., Irving, Texas, 29.09% of Institutional Capital Shares; D.A. Consulting
Group, Inc., Houston, Texas, 7.93% of Institutional Capital Shares; Excel
Industries, Elkhart, Indiana, 31.16% of Institutional Capital Shares; and
Brasfield and Gorrie LLC, Birmingham, Alabama, 6.26% of Institutional Capital
Shares.

Shareholders owning 25% or more of outstanding Shares may be in control and
be able to affect the outcome of certain matters presented for a vote of
shareholders.

TAX INFORMATION

FEDERAL INCOME TAX

The Fund intends to meet requirements of Subchapter M of the Internal
Revenue Code applicable to regulated investment companies. If these requirements
are not met, it will not receive special tax treatment and will pay federal
income tax.

The Fund will be treated as a single, separate entity for federal income
tax purposes so that income earned and capital gains and losses realized by the
Trust's other
portfolios will be separate from those realized by the Fund.

WHO MANAGES AND PROVIDES SERVICES TO THE FUND?

BOARD OF TRUSTEES

The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birthdate, present position(s) held with the Trust,
principal occupations for the past five years and other notable positions held,
total compensation received as a Trustee from the Trust for its most recent
fiscal year, and the total compensation received from the Federated Fund Complex
for the most recent calendar year. Trust is comprised of three funds and the
Federated Fund Complex is comprised of 54 investment companies, whose investment
advisers are affiliated with the Fund's Adviser.

As of January 6, 1999, the Fund's Board and Officers as a group owned less
than 1% of the Fund's outstanding Institutional, Institutional Service, and
Institutional Capital Shares.

NAME
BIRTHDATE AGGREGATE TOTAL
ADDRESS COMPENSATION COMPENSATION
POSITION WITH TRUST PRINCIPAL OCCUPATIONS FROM TRUST FROM TRUST
FOR PAST 5 YEARS AND FUND COMPLEX
<S> <C> <C> <C>
JOHN F. DONAHUE*+ Chief Executive Officer and Director or $0 $0 for the
Trustee of the Federated Fund Complex; Trust and

TRUSTEE

Previos Positions: Director, United Complex
Refinery; Director, Forbes Fund; Chairman,
Pittsburgh Foundation; Chairman, Pittsburgh

Civic Light Opera.

Exchange, Inc.; Regional Administrator, companies
United States Securities and Exchange in the Fund
Commission. Complex

Director, Depository Trust Corporation.

Center, Prague.

Previous Positions: Professor, United
States Military Academy; Professor, United
States Air Force Academy.

<PAGE>

Securities Corp.

</TABLE>

+ Mr. Donahue is the father of J. Christopher Donahue, President and
Trustee of the Trust.

INVESTMENT ADVISER

The Adviser conducts investment research and makes investment decisions for
the Fund.

The Adviser is a wholly-owned subsidiary of Federated.

OTHER RELATED SERVICES

BROKERAGE TRANSACTIONS

RESEARCH SERVICES

On January 31, 1999, the Fund owned securities of the following regular
broker/dealers: ___________________________.

ADMINISTRATOR

MAXIMUM ADMINISTRATIVE AVERAGE AGGREGATE DAILY NET ASSETS OF THE
FEE FEDERATED FUNDS
0.150 of 1% on the first $250 million

Federated Services Company also provides certain accounting and
recordkeeping services with respect to the Fund's portfolio investments for a
fee based on Fund assets plus out-of-pocket expenses.

CUSTODIAN

State Street Bank and Trust Company, Boston, Massachusetts, is custodian
for the securities and cash of the Fund. Foreign instruments purchased by the
Fund are held by foreign banks participating in a network coordinated by State
Street Bank.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

INDEPENDENT AUDITORS

Ernst & Young LLP is the independent auditor for the Fund.

FEES PAID BY THE FUND FOR SERVICES

- -------------------------------- CURRENT FYE PRIOR FYE PRIOR FYE
FOR THE YEAR ENDED JANUARY 31,

1999

- ---------------------------------
Institutional Service Shares $ ---- ----
- ---------------------------------
Institutional Capital Shares $ ---- ----
- ---------------------------------

INSTRUCTION: IF, DURING EITHER OF THE TWO YEARS PRECEDING THE FUND'S MOST
RECENT FISCAL YEAR, THE AGGREGATE DOLLAR AMOUNT OF BROKERAGE COMMISSIONS PAID BY
THE FUND DIFFERED MATERIALLY FROM THE AMOUNT PAID DURING THE MOST RECENT FISCAL
YEAR, STATE THE REASON(S) FOR THE DIFFERENCES. IF THIS IS THE CASE, THE ATTORNEY
SHOULD PURSUE THE ANSWER WITH TRADING AND DRAFT APPROPRIATE DISCLOSURE TO BE
INSERTED HERE.

Fees are allocated among Classes based on their pro rata share of Fund
assets, except for shareholder services fees, which are borne only by the
applicable Class of Shares.

HOW DOES THE FUND MEASURE PERFORMANCE?

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

<PAGE>

AVERAGE ANNUAL TOTAL RETURNS AND YIELD

Total returns given for the one-, five- and since inception periods ended
JANUARY 31, 1999.

Yield, Effective Yield, and Tax-Equivalent Yield given for the 7-day period
ended JANUARY 31, 1999.

7 -DAY PERIOD 1 YEAR 5 YEARS SINCE INCEPTION
ON FEBRUARY 8, 1993
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES

Total Return ___% ___% ___%

Yield ___%
Effective Yield ___%
Tax-Equivalent Yield ___%

7 -DAY PERIOD 1 YEAR 5 YEARS SINCE INCEPTION
ON FEBRUARY 1, 1996

INSTITUTIONAL
SERVICE SHARES

Total Return ___% ___% ___%

Yield ___%
Effective Yield ___%
Tax-Equivalent Yield ___%

7 -DAY PERIOD 1 YEAR 5 YEARS SINCE INCEPTION
ON FEBRUARY 1, 1996

INSTITUTIONAL
CAPITAL SHARES

Total Return ___% ___% ___%

Yield ___%
Effective Yield ___%
Tax-Equivalent Yield ___%

</TABLE>

TOTAL RETURN

Total return represents the change (expressed as a percentage) in the value
of Shares over a specific period of time, and includes the investment of income
and capital gains distributions.

YIELD

To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share
performance is lower for shareholders paying those fees.

TAX EQUIVALENCY TABLE

Set forth below is a sample of a tax-equivalency table that may be used in
advertising and sales literature. This table is for illustrative purposes only
and is not representative of past or future performance of the Fund. The
interest earned by the municipal securities owned by the Fund generally remains
free from federal regular income tax and is often free from state and local
taxes as well. However, some of the Fund's income may be subject to the federal
alternative minimum tax and state and/or local taxes.

TAXABLE YIELD EQUIVALENT FOR 1998 MULTI-STATE MUNICIPAL FUND

COMBINED FEDERAL AND STATE INCOME TAX 15.00% 28.00% 31.00% 36.00% 39.60%
BRACKET:
Joint Return $1-42,350$42,351-102,30$102,301-155,9$155,951-278,450 OVER

$278,450

Single Return $1-25,350$25,351-61,400$61,401-128,10$128,101-278,450 OVER
$278,450

TAX-EXEMPT YIELD: TAXABLE YIELD EQUIVALENT:
<S> <C> <C> <C> <C> <C>
- ------------------------------------------
1.00% 1.18% 1.39% 1.45% 1.56% 1.66%
1.50% 1.76% 2.08% 2.17% 2.34% 2.48%
2.00% 2.35% 2.78% 2.90% 3.13% 3.31%
2.50% 2.94% 3.47% 3.62% 3.91% 4.14%
3.00% 3.53% 4.17% 4.35% 4.69% 4.97%
3.50% 4.12% 4.86% 5.07% 5.47% 5.79%
4.00% 4.71% 5.56% 5.80% 6.25% 6.62%
4.50% 5.29% 6.25% 6.52% 7.03% 7.45%
5.00% 5.88% 6.94% 7.25% 7.81% 8.28%
5.50% 6.47% 7.64% 7.97% 8.59% 9.11%
6.00% 7.06% 8.33% 8.70% 9.38% 9.93%
6.50% 7.65% 9.03% 9.42% 10.16% 10.76%
7.00% 8.24% 9.72% 10.14% 10.94% 11.59%
7.50% 8.82% 10.42% 10.87% 11.72% 12.42%
8.00% 9.41% 11.11% 11.59% 12.50% 13.25%
- ------------------------------------------

</TABLE>

Note: The maximum marginal tax rate for each bracket was used in
calculating the taxable yield equivalent. Furthermore, additional state and
local taxes paid on comparable taxable investments were not used to increase
federal deductions.

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;

o discussions of economic, financial and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Funds; and

o information about the mutual fund industry from sources such as the
Investment Company Institute.

The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

o BANK RATE MONITOR(C) NATIONAL INDex, Miami Beach, Florida, published
weekly, is an average of the interest rates of personal money market
deposit accounts at ten of the largest banks and thrifts in each of the
five largest Standard Metropolitan Statistical Areas. If more than one rate
is offered, the lowest rate is used. Account minimums and compounding
methods may vary.

WHO IS FEDERATED INVESTORS, INC.?

FEDERATED FUNDS OVERVIEW

MUNICIPAL FUNDS

EQUITY FUNDS

In the equity sector, Federated has more than 27 years' experience. As of
December 31, 1998, Federated managed 27 equity funds totaling approximately
$14.9 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value-oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.

CORPORATE BOND FUNDS

GOVERNMENT FUNDS

MONEY MARKET FUNDS

advisory companies.

MUTUAL FUND MARKET

FEDERATED CLIENTS OVERVIEW

Federated distributes mutual funds through its subsidiaries for a variety
of investment purposes. Specific markets include:

INSTITUTIONAL CLIENTS

BANK MARKETING

BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES

<PAGE>

ADDRESSES

MUNICIPAL OBLIGATIONS FUND

Institutional Shares
Institutional Service Shares
Institutional Capital Shares

Federated Investors Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7000

DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, PA 15222-3779

INVESTMENT ADVISER

Federated Management
Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, PA 15222-3779

CUSTODIAN

State Street Bank and Trust Company
P.O. Box 8600

Boston, MA 02266-8600

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

INDEPENDENT AUDITORS

Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072

PART C. OTHER INFORMATION.

Item 23. EXHIBITS

(a) (i) Copy of Declaration of Trust of the
Registrant; (4)

(ii) Amendment No. 1 to the Declaration of
Trust; (4)

(iii) Designation and establishment of Series; (4)

(iv) Form of Certificate pertaining to
Classification of Shares dated
February 18, 1994; (1)
(v) Form of Amendment No. 2 to Declaration of

Trust; +

(b) (i) Amended and Restated By-Laws of the
Registrant; (4)

(ii) Copy of Amendment No. 1 to the By-Laws; (13)
(iii) Copy of Amendment No. 2 to the By-Laws; +
(iv) Copy of Amendment No. 3 to the By-Laws; +
(v) Copy of Amendment No. 4 to the By-Laws; +
(c) Specimen Share Certificate; (4)

(d) Conformed copy of Investment Advisory Contract;(11)
(e) (i) Copy of Distributor's Contract of the
Registrant; (11)

(ii) The Registrant incorporates the conformed
copy of the specimen Mutual Funds Sales
and Service Agreement; Mutual Funds
Service Agreement; and Plan Trustee/
Mutual Funds Service Agreement from Item
24(b)(6) of the Cash Trust Series II
Registration Statement filed with the
Commission on July 24, 1995. (File Number
33-38550 and 811-2669);
(f) Not applicable;
(g) (i) Conformed copy of Custodian

Contract; (13)
(ii) Conformed copy of Custody Fee

Schedule; (13)

(h) (i) Conformed Copy of Amended and Restated
Agreement for Fund Accounting Services,
Administrative Services, Transfer Agency
Services, and Custody Services
Procurement; (13)

(ii) Conformed copy of Amended and Restated
Shareholder Services Agreement; (13)
(iii) The responses described in Item 23(e)(iii)
are hereby incorporated by reference.

(i) Opinion and Consent of Counsel as to Legality of
Shares being Registered; (12)

+ All exhibits have been filed electronically.

1. Response is incorporated by reference to Registrant's Registration
Statement on Form N-1A. (File Nos. 33-55034 and 811-7364).

4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed March 30, 1995. (File Nos. 33-55034 and
811-7364).

11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 on Form N-1A filed January 27, 1997. (File Nos. 33-55034
and 811-7364).

12. Filed as part of the Registrant's Registration Statement effective February
5, 1993.

13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 15 on Form N-1A filed March 24, 1998. (File Nos. 33-55034 and
811-7364).

<PAGE>

(j) (i) Conformed copy of Consent of Independent
Auditors; (13)
(ii) Consent of Counsel; (10)

(k) Not applicable;

(l) Purchase Agreement between Registrant and Shearson
Lehman Brothers Inc.; (4)
(m) Not applicable.

(n) Copy of Financial Data Schedules; (13)

(o) The Registrant hereby incorporates the conformed
copy of the specimen Multiple Class Plan from
Item 24(b)(18)of the World Investment Series,
Inc. Registration Statement on Form N-1A, filed
with the Commission on January 26, 1996.
(File Nos. 33-52149 and 811-07141);

(p) (i) Power of Attorney of the Registrant; (13)

(ii) Power of Attorney of Chief Investment
Officer of the Registrant; +
(iii) Power of Attorney of Treasurer of the
Registrant; +
(iv) Power of Attorney of Trustee of the
Registrant; +
(v) Power of Attorney of Trustee of the
Registrant; +
(vi) Power of Attorney of Trustee of the
Registrant; +

Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:

None

Item 25. INDEMNIFICATION: (10)

+ All exhibits have been filed electronically.

4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed March 30, 1995. (File Nos. 33-55034 and
811-7364).

10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed March 29, 1996. (File Nos. 33-55034 and
811-7364).

13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 15 on Form N-1A filed March 24, 1998. (File Nos. 33-55034 and
811-7364).

<PAGE>

Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER:

For a description of the other business of the investment adviser, see the
section entitled "Who Manages the Fund?" in Part A. The affiliations with the
Registrant of four of the Trustees and one of the Officers of the investment
adviser are included in Part B of this Registration Statement under "Who Manages
and Provides Services to the Fund?" The remaining Trustee of the investment
adviser, his position with the investment adviser, and, in parentheses, his
principal occupation is: Mark D. Olson (Partner, Wilson, Halbrook & Bayard), 107
W. Market Street, Georgetown, Delaware 19947.

The remaining Officers of the investment adviser are:

Executive Vice Presidents: William D. Dawson, III

Henry A. Frantzen

J. Thomas Madden

Senior Vice Presidents: Joseph M. Balestrino

Drew J. Collins

Jonathan C. Conley

Deborah A. Cunningham

Mark E. Durbiano

Sandra L. McInerney

Susan M. Nason

Mary Jo Ochson

Robert J. Ostrowski

Vice Presidents: Todd A. Abraham

J. Scott Albrecht

Arthur J. Barry

Randall S. Bauer

David A. Briggs

Micheal W. Casey

Kenneth J. Cody

Alexandre de Bethmann

Michael P. Donnelly

Linda A. Duessel

Donald T. Ellenberger

Kathleen M. Foody-Malus

Thomas M. Franks

Edward C. Gonzales

James E. Grefenstette

Susan R. Hill

Stephen A. Keen

Robert K. Kinsey

Robert M. Kowit

Jeff A. Kozemchak

Richard J. Lazarchic

Steven Lehman

Marian R. Marinack

Charles A. Ritter

Keith J. Sabol

Frank Semack

Aash M. Shah

Christopher Smith

Tracy P. Stouffer

Edward J. Tiedge

Paige M. Wilhelm

Jolanta M. Wysocka

Marc Halperin

<PAGE>

Assistant Vice Presidents: Nancy J. Belz

Robert E. Cauley

Lee R. Cunningham, II

B. Anthony Delserone, Jr.

Paul S. Drotch

Salvatore A. Esposito

Donna M. Fabiano

John T. Gentry

William R. Jamison

Constantine Kartsonsas

John C. Kerber

Grant K. McKay

Natalie F. Metz

Joseph M. Natoli

John Sheehy

Michael W. Sirianni

Leonardo A. Vila

Lori A. Wolff

Gary Farwell

Secretary: Stephen A. Keen

Treasurer: Thomas R. Donahue

Assistant Secretaries: Thomas R. Donahue

Richard B. Fisher

Christine I. Newcamp

Assistant Treasurer: Richard B. Fisher

The business address of each of the Officers of the investment adviser is
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania
15222-3779. These individuals are also officers of a majority of the investment
advisers to the investment companies in the Federated Fund Complex described in
Part B of this Registration Statement.

Item 27. PRINCIPAL UNDERWRITERS:

(a) Federated Securities Corp. the Distributor for shares of the Registrant,
acts as principal underwriter for the following open-end investment
companies, including the Registrant:

Automated Government Money Trust; Cash Trust Series II; Cash Trust Series,
Inc.; CCB Funds; DG Investor Series; Edward D. Jones & Co. Daily Passport Cash
Trust; Federated Adjustable Rate U.S. Government Fund, Inc.; Federated American
Leaders Fund, Inc.; Federated ARMs Fund; Federated Core Trust; Federated Equity
Funds; Federated Equity Income Fund, Inc.; Federated Fund for U.S. Government
Securities, Inc.; Federated GNMA Trust; Federated Government Income Securities,
Inc.; Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust; Federated Insurance
Series; Federated Master Trust; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock and Bond Fund, Inc.; Federated Stock Trust; Federated Tax-Free
Trust; Federated Total Return Series, Inc.; Federated U.S. Government Bond Fund;
Federated U.S. Government Securities Fund: 1-3 Years; Federated U.S. Government
Securities Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10
Years; Federated Utility Fund, Inc.; Fixed Income Securities, Inc.; ; Hibernia
Funds; Independence One Mutual Funds; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Liberty U.S.
Government Money Market Trust; Liquid Cash Trust; Managed Series Trust; Marshall
Funds, Inc.; Money Market Management, Inc.; Money Market Obligations Trust;
Money Market Obligations Trust II; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; Regions Funds; RIGGS Funds; SouthTrust Funds;
Tax-Free Instruments Trust; The Planters Funds; The Wachovia Funds; The Wachovia
Municipal FundsTrust for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations; Vision Group of
Funds, Inc.; World Investment Series, Inc.; Blanchard Funds; Blanchard Precious
Metals Fund, Inc.; High Yield Cash Trust; Investment Series Trust; Star Funds;
Targeted Duration Trust; The Virtus Funds; Trust for Financial Institutions;

Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty Term Trust, Inc.- 1999.

(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
1001 Liberty Avenue Operating Officer, Asst.
Pittsburgh, PA 15222-3779 Secretary and Asst.

Treasurer, Federated

Securities Corp.

Edward C. Gonzales Director, Executive Vice Executive Vice
Federated Investors Tower President, President

1001 Liberty Avenue Federated Securities Corp.

Pittsburgh, PA 15222-3779

Thomas R. Donahue Director, Assistant Secretary --
Federated Investors Tower and Assistant Treasurer

1001 Liberty Avenue Federated Securities Corp.

Pittsburgh, PA 15222-3779

James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

David M. Taylor Executive Vice President --

Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Jill Ehrenfeld Vice President, --

Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Raymond Hanley Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Beth A. Hetzel Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

J. Michael Miller Vice President, --

Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

David W. Spears Vice President, --

Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Terri E. Bush Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Robert M. Rossi Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Matthew S. Hardin Secretary, --

Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Denis McAuley Treasurer, --

Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Leslie K. Ross Assistant Secretary, --

Federated Investors Tower Federated Securities Corp.

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

</TABLE>

(c)

<PAGE>

Item 28. LOCATION OF ACCOUNTS AND RECORDS:

All accounts and records required to be maintained by Section
31(a) of the Investment Company Act of 1940 and Rules 31a-1
through 31a-3 promulgated thereunder are maintained at one of
the following locations:

Registrant Federated Investors Tower
1001 Liberty Avenue

..............................Pittsburgh, PA 15222-3779

(Notices should be sent to
the Agent for Service at
the above address)

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

Federated Shareholder Federated Investors Tower
Services Company .............1001 Liberty Avenue

("Transfer Agent, Dividend Pittsburgh, PA 15237-7000
Disbursing Agent and

Portfolio Recordkeeper")

Federated Services Company Federated Investors Tower
("Administrator") 1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Federated Management Federated Investors Tower
("Adviser") 1001 Liberty Avenue

Pittsburgh, PA 15222-3779

State Street Bank and P.O. Box 8600
Trust Company Boston, MA 02266-8600

("Custodian")

Item 29. MANAGEMENT SERVICES: Not applicable.

Item 30. UNDERTAKINGS:

Registrant hereby undertakes to comply with the provisions of Section 16(c)
of the 1940 Act with respect to removal of Trustees and the calling of special
shareholder meetings by shareholders.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, MONEY MARKET OBLIGATIONS TRUST
II, has duly caused this Amendment to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Pittsburgh and Commonwealth of Pennsylvania, on the 29th day of January, 1999.

MONEY MARKET OBLIGATIONS TRUST II

BY: /s/ Nicholas J. Seitanakis

Nicholas J. Seitanakis, Assistant Secretary

Attorney in Fact for John F. Donahue

January 29, 1999

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:

NAME TITLE DATE

By: /s/ Nicholas J. Seitanakis

Nicholas J. Seitanakis Attorney In Fact January 29, 1999

ASSISTANT SECRETARY For the Persons

Listed Below

NAME TITLE

John F. Donahue* Chairman and Trustee

(Chief Executive Officer)

J. Christopher Donahue* President and Trustee

William D. Dawson III* Chief Investment Officer

Richard J. Thomas* Treasurer

(Principal Financial and

Accounting Officer)

Thomas G. Bigley* Trustee

John T. Conroy, Jr.* Trustee

Nicholas P. Constantakis* Trustee

William J. Copeland* Trustee

John F. Cunningham* Trustee

James E. Dowd, Esq.* Trustee

Lawrence D. Ellis, M.D.* Trustee

Edward L. Flaherty, Jr., Esq.* Trustee

Peter E. Madden* Trustee

Charles F. Mansfield, Jr.* Trustee

John E. Murray, Jr., J.D.,S.J.D.* Trustee

Wesley W. Posvar* Trustee

Marjorie P. Smuts* Trustee

John S. Walsh* Trustee

* By Power of Attorney

Exhibit (a)(v) under Form N-1A
Exhibit 3(i) under Item 601/Reg. S-K

LEHMAN BROTHERS INSTITUTIONAL FUNDS GROUP TRUST

Amendment No. 2

DECLARATION OF TRUST

dated November 16, 1992

This Declaration of Trust is amended as follows:

Strike the first paragraph of Section 1.1 of Article 1 from the Declaration
of Trust and substitute in its place the following:

SECTION 1.1. NAME. The name of the trust created hereby is Money Market
Obligations Trust II (the "Trust"). ----------- ----

Strike paragraph (2) of Section 1.2 of Article 1 from the Declaration of
Trust and substitute in its place the following:

(q) "TRUST" means Money Market Obligations Trust II.

The undersigned Trustees of Money Market Obligations Trust II hereby
certify that the above stated Amendment is a true and correct Amendment to the
Declaration of Trust, as adopted by the Board of Trustees on the 6th day of
September, 1996.

WITNESS the due execution hereof this 15th day of November, 1996.

- ---------------------------------------- -------------------------------
John F. Donahue John T. Conroy, Jr.

- ---------------------------------------- -------------------------------
J. Christopher Donahue Lawrence D. Ellis, M.D.

- ---------------------------------------- -------------------------------
Peter E. Madden John E. Murray, Jr.

- ---------------------------------------- -------------------------------
William J. Copeland Gregor F. Meyer

- ----------------------------------------
Marjorie P. Smuts

Exhibit (b)(iii) under Form N-1A
Exhibit 3(ii) under Item 601/Reg. S-K

MONEY MARKET OBLIGATIONS TRUST II

AMENDMENT #2
TO THE BY-LAWS

(EFFECTIVE FEBRUARY 23, 1998)

Delete Sections 1, 2 and 3 of Article VI, OFFICERS, and replace with:

Section 1. OFFICERS. The Officers of the Trust shall be a President, one or
more Vice Presidents, a Treasurer, and a Secretary. The Board of Trustees, in
its discretion, may also elect or appoint a Chairman of the Board of Trustees
(who must be a Trustee) and other Officers or agents, including one or more
Assistant Vice Presidents, one or more Assistant Secretaries, and one or more
Assistant Treasurers. A Vice President, the Secretary or the Treasurer may
appoint an Assistant Vice President, an Assistant Secretary or an Assistant
Treasurer, respectively, to serve until the next election of Officers. Two or
more offices may be held by a single person except the offices of President and
Vice President may not be held by the same person concurrently. It shall not be
necessary for any Trustee or any Officer to be a holder of shares in any Series
or Class of the Trust.

Section 2. ELECTION OF OFFICERS. The Officers shall be elected annually by
the Trustees. Each Officer shall hold office for one year and until the election
and qualification of his successor, or until earlier resignation or removal. The
Chairman of the Board of Trustees, if there is one, shall be elected annually by
and from the Trustees, and serve until a successor is so elected and qualified,
or until earlier resignation or removal.

Section 3. RESIGNATIONS AND REMOVALS AND VACANCIES. Any Officer of the
Trust may resign at any time by filing a written resignation with the Board of
Trustees (or Chairman of the Trustees, if there is one), with the President, or
with the Secretary. Any such resignation shall take effect at the time specified
therein or, if no time is specified, at the time of receipt. Unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective. Any Officer elected by the Board of Trustees or whose
appointment has been ratified by the Board of Trustees may be removed with or
without cause at any time by a majority vote of all of the Trustees. Any other
employee of the Trust may be removed or dismissed at any time by the President.
Any vacancy in any of the offices, whether by resignation, removal or otherwise,
may be filled for the unexpired portion of the term by the President. A vacancy
in the office of Assistant Vice President may be filled by a Vice President; in
the office of Assistant Secretary by the Secretary; or in the office of
Assistant Treasurer by the Treasurer. Any appointment to fill any vacancy shall
serve subject to ratification by the Board of Trustees at its next regular
meeting.

Exhibit (b)(iv) under Form N-1A
Exhibit 3(ii) under Item 601/Reg. S-K

MONEY MARKET OBLIGATIONS TRUST II

AMENDMENT #3

TO THE BY-LAWS

(EFFECTIVE FEBRUARY 27, 1998)

Delete Section 4 PROXIES of Article III SHAREHOLDERS, and replace with the
following:

Section 4. PROXIES. Only Shareholders of record shall be entitled to vote
at any meeting of Shareholders. Each whole shares shall be entitled to one vote
as to any matter on which it is entitled by the Declaration to vote, and each
fractional Shares shall be entitled to a proportionate fractional vote. Any
shareholder entitled to vote at any meeting of shareholders may vote either in
person, by telephone, by electronic means including facsimile, or by proxy, but
no proxy which is dated more than six months before the meeting named therein
shall be accepted unless otherwise provided in the proxy. Every proxy shall be
in writing, subscribed by the shareholder or his duly authorized agent or be in
such other form as may be permitted by law, including documents conveyed by
electronic transmission. Every proxy shall be dated, but need not be sealed,
witnessed or acknowledged. The placing of a shareholder's name on a proxy or
authorizing another to act as the shareholder's agent, pursuant to telephone or
electronically transmitted instructions obtained in accordance with procedures
reasonably designed to verify that such instructions have been authorized by
such shareholder, shall constitute execution of a proxy by or on behalf of such
shareholder. Where Shares are held of record by more than one person, any
co-owner or co-fiduciary may execute the proxy or give authority to an agent,
unless the Secretary of the Trust is notified in writing by any co-owner or
co-fiduciary that the joinder of more than one is to be required. All proxies
shall be filed with and verified by the Secretary or an Assistant Secretary of
the Trust, or the person acting as Secretary of the Meeting. Unless otherwise
specifically limited by their term, all proxies shall entitle the holders
thereof to vote at any adjournment of such meeting but shall not be valid after
the final adjournment of such meeting.

Exhibit (b)(v) under Form N-1A
Exhibit 3(ii) under Item 601/Reg. S-K

MONEY MARKET OBLIGATIONS TRUST II

AMENDMENT #4

TO THE BY-LAWS

(EFFECTIVE MAY 12, 1998)

Strike Section 1 - Meetings of Article III - Shareholders and replace it
with the following:

Section 1. MEETINGS. Meetings of the shareholders of the Trust or a
particular Series or Class shall be held at such place within or without The
Commonwealth of Massachusetts as may be fixed from time to time by resolution of
the Trustees. The holders of a majority of outstanding Shares of the Trust or a
Series thereof present in person or by proxy shall constitute a quorum at any
meeting of the Shareholders of the Trust or a Series thereof.

Strike Section 1 - Meetings of the Trustees of Article IV - Trustees and
replace it with the following:

Section 1. MEETINGS OF THE TRUSTEES. The Trustees may in their discretion
provide for regular or stated meetings of the Trustees. Meetings of the Trustees
shall be held at such place within or without The Commonwealth of Massachusetts
as fixed from time to time by resolution of the Trustees, or as the person or
persons requesting said meeting to be called may designate, but any meeting may
adjourn to any other place. Notice of regular or stated meetings need not be
given. Meetings of the Trustees other than regular or stated meetings shall be
given by the Secretary or an Assistant Secretary or by the officer or Trustee
calling the meeting and and shall be mailed to each Trustee at least two days
before the meeting, or shall be telegraphed, cabled, or wirelessed to each
Trustee at his business address, or personally delivered to him at least one day
before the meeting. Such notice may, however, be waived by any Trustee. Notice
of a meeting need not be given to any Trustee if a written waiver of notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any Trustee who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him. A notice or waiver of
notice need not specify the purpose of any meeting. The Trustees may meet by
means of a telephone conference circuit or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time and participation by such means shall be deemed to have been held
at a place designated by the Trustees at the meeting. Participation in a
telephone conference meeting shall constitute presence in person at such
meeting. Any action required or permitted to be taken at any meeting of the
Trustees may be taken by the Trustees without a meeting if all the Trustees
consent to the action in writing and the written consents are filed with the
records of the Trustees' meetings. Such consents shall be treated as a vote for
all purposes.

Exhibit (p)(ii) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretaries of MONEY MARKET OBLIGATIONS TRUST II and
each of them, their true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution for them and in their names, place and
stead, in any and all capacities, to sign any and all documents to be filed with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
the Securities Exchange Act of 1934 and the Investment Company Act of 1940, by
means of the Securities and Exchange Commission's electronic disclosure system
known as EDGAR; and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to sign and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as each of them might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.

SIGNATURES TITLE DATE

/S/WILLIAM D. DAWSON, III Chief Investment Officer January 12, 1999
- ------------------------------
William D. Dawson, III

Sworn to and subscribed before me this 12 day of JANUARY, 1999

/S/CHERI S. GOOD

Notarial Seal
Cheri S. Good, Notary Public
Pittsburgh, Allegheny County
My Commission Expires Nov. 19, 2001

Member, Pennsylvania Association of Notaries

Exhibit (p)(iii) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE

/S/RICHARD J. THOMAS Treasurer December 11, 1998
- -----------------------------
Richard J. Thomas (Principal Financial and
Accounting Officer)

Sworn to and subscribed before me this 11 day of DECEMBER, 1998

/S/CHERI S. GOOD

Notarial Seal
Cheri S. Good, Notary Public
Pittsburgh, Allegheny County
My Commission Expires Nov. 19, 2001

Exhibit (p)(iv) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE

/S/JOHN F. CUNNINGHAM Trustee January 13, 1999

John F. Cunningham

Sworn to and subscribed before me this 13 day of JANUARY, 1999

/S/CHERI S. GOOD

Notarial Seal
Cheri S. Good, Notary Public
Pittsburgh, Allegheny County
My Commission Expires Nov. 19, 2001

Member, Pennsylvania Association of Notaries

Exhibit (p)(v) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE

/S/CHARLES F. MANSFIELD, JR. Trustee January 13, 1999
- ----------------------------------------
Charles F. Mansfield, Jr.

Sworn to and subscribed before me this 13 day of JANUARY, 1999

/S/CHERI S. GOOD

Notarial Seal
Cheri S. Good, Notary Public
Pittsburgh, Allegheny County
My Commission Expires Nov. 19, 2001

Member, Pennsylvania Association of Notaries

Exhibit (p)(vi) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE

/S/JOHN S. WALSH Trustee January 13, 1999
John S. Walsh

Sworn to and subscribed before me this 13 day of JANUARY, 1999

/S/CHERI S. GOOD

Notarial Seal
Cheri S. Good, Notary Public
Pittsburgh, Allegheny County
My Commission Expires Nov. 19, 2001

Member, Pennsylvania Association of Notaries