<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------
- ----------------------------------
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--44
(A UNIT INVESTMENT TRUST)
O NEW YORK, PENNSYLVANIA AND TEXAS PORTFOLIOS
O PORTFOLIOS OF INTERMEDIATE LONG-TERM MUNICIPAL
BONDS
O DESIGNED FOR INCOME FREE FROM REGULAR FEDERAL
INCOME TAX
O EXEMPT FROM SOME STATE TAXES
O MONTHLY DISTRIBUTIONS
SPONSORS:
Merrill Lynch,
Pierce, Fenner & Smith -------------------------------------------------
Incorporated The Securities and Exchange Commission has not
Salomon Smith Barney Inc. approved or disapproved these Securities or
Prudential Securities passed upon the adequacy of this prospectus. Any
Incorporated representation to the contrary is a criminal
PaineWebber Incorporated offense.
Dean Witter Reynolds Inc. Prospectus dated October 29, 1999.
<PAGE>
- --------------------------------------------------------------------------------
Defined Asset FundsSM
Defined Asset FundsSM is America's oldest and largest family of unit investment
trusts, with over $160 billion sponsored over the last 28 years. Defined Asset
Funds has been a leader in unit investment trust research and product
innovation. Our family of Funds helps investors work toward their financial
goals with a full range of quality investments, including municipal, corporate
and government bond portfolios, as well as domestic and international equity
portfolios.
Defined Asset Funds offer a number of advantages:
o A disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
o Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
o Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
o Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
o Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.
THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF JULY 31, 1999, THE
EVALUATION DATE.
CONTENTS
PAGE
-----------
New York Intermediate Portfolio--
Risk/Return Summary.................................. 3
Pennsylvania Insured Portfolio-- Risk/Return Summary.... 6
Texas Insured Portfolio--Risk/Return Summary............ 9
What You Can Expect From Your Investment................ 13
Monthly Income....................................... 13
Return Figures....................................... 13
Records and Reports.................................. 13
The Risks You Face...................................... 14
Interest Rate Risk................................... 14
Call Risk............................................ 14
Reduced Diversification Risk......................... 14
Liquidity Risk....................................... 14
Concentration Risk................................... 14
State Concentration Risk............................. 16
Bond Quality Risk.................................... 17
Insurance Related Risk............................... 18
Litigation and Legislation Risks..................... 18
Selling or Exchanging Units............................. 18
Sponsors' Secondary Market........................... 18
Selling Units to the Trustee......................... 18
Exchange Option...................................... 19
How The Fund Works...................................... 19
Pricing.............................................. 19
Evaluations.......................................... 19
Income............................................... 20
Expenses............................................. 20
Portfolio Changes.................................... 20
Fund Termination..................................... 21
Certificates......................................... 21
Trust Indenture...................................... 21
Legal Opinion........................................ 22
Auditors............................................. 22
Sponsors............................................. 22
Trustee.............................................. 22
Underwriters' and Sponsors' Profits 23
Public Distribution.................................. 23
Code of Ethics....................................... 23
Year 2000 Issues..................................... 23
Taxes................................................... 23
Supplemental Information................................ 25
Financial Statements.................................... D-1
2
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NEW YORK INTERMEDIATE PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured, intermediate term municipal revenue bonds with an
estimated average life of about 8 years.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 9 intermediate-term
tax-exempt municipal bonds with an aggregate face amount of
$5,230,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o The Fund is concentrated in refunded bonds.
o 17% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Airports/Ports/Highways 26%
/ / General Obligation 1%
/ / Municipal Water/Sewer Utilities 10%
/ / Refunded Bonds 25%
/ / Special Tax 38%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN HAPPEN
FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in airport/port/highway and
special tax bonds, adverse developments in these sectors may
affect the value of your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF NEW YORK SO
IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT
TO RISKS PARTICULAR TO NEW YORK WHICH ARE BRIEFLY DESCRIBED
UNDER STATE CONCENTRATION RISKS LATER IN THIS PROSPECTUS.
3
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in insured
bonds of several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.23
Annual Income per unit: $ 50.79
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.69
Trustee's Fee
$ 0.38
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.24
Evaluator's Fee
$ 0.47
Other Operating Expenses
-----------
$ 1.78
TOTAL
The Sponsors historically paid updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
New York Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to
this Fund. These prior Series differed in that they
charged a higher sales fee. These prior New York Series
were offered between January 14, 1988 and October 16, 1996
and were outstanding on June 30, 1999. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 6/30/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 3.57% 6.80% 6.38% 5.48% 8.00% 6.98%
Average -0.08 4.94 6.08 2.91 5.94 6.67
Low -3.92 3.62 5.85 -0.57 4.51 6.44
- -------------------------------------------------------------------
Average
Sales fee 3.05% 4.94% 5.78%
- -------------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
4
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,039.89
(as of July 31, 1999)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other
fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some New York state and local personal income
taxes if you live in New York.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective, but the bonds will generally not be
insured. Income from this program will generally be subject
to state and local income taxes. For more complete
information about the program, including charges and fees,
ask the Trustee for the program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
5
<PAGE>
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PENNSYLVANIA INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 8 long-term tax-exempt
municipal bonds with an aggregate face amount of
$4,500,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Hospital/Health Care 17%
/ / Lease Rental Appropriation 30%
/ / Municipal Water/Sewer Utilities 15%
/ / Refunded Bonds 21%
/ / Universities/Colleges 17%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in lease rental
appropriation bonds, adverse developments in this sector
may affect the value of your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF
PENNSYLVANIA SO IT IS LESS DIVERSIFIED THAN A NATIONAL FUND
AND IS SUBJECT TO RISKS PARTICULAR TO PENNSYLVANIA WHICH
ARE BRIEFLY DESCRIBED UNDER STATE CONCENTRATION RISKS LATER
IN THIS PROSPECTUS.
6
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in insured
bonds of several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.34
Annual Income per unit: $ 52.16
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.70
Trustee's Fee
$ 0.38
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.29
Evaluator's Fee
$ 0.72
Other Operating Expenses
-----------
$ 2.09
TOTAL
The Sponsors historically paid updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
Pennsylvania Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to
this Fund. These prior Series differed in that they
charged a higher sales fee. These prior Pennsylvania
Series were offered between May 19, 1988 and September 13,
1996 and were outstanding on June 30, 1999. OF COURSE,
PAST PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 6/30/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 2.62% 6.84% 6.08% 4.05% 8.04% 6.67%
Average 0.03 5.19 5.94 2.92 6.23 6.54
Low -3.24 3.43 5.85 -0.46 4.41 6.44
- -------------------------------------------------------------------
Average
Sales fee 2.95% 5.12% 5.82%
- -------------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
7
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,015.57
(as of July 31, 1999)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other
fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some Pennsylvania state and local personal
income taxes if you live in Pennsylvania.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective, but the bonds will generally not be
insured. Income from this program will generally be subject
to state and local income taxes. For more complete
information about the program, including charges and fees,
ask the Trustee for the program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
8
<PAGE>
- --------------------------------------------------------------------------------
TEXAS INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 7 long-term tax-exempt
municipal bonds with an aggregate face amount of
$2,105,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o The Fund is concentrated in refunded bonds.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Municipal Water/Sewer Utilities 35%
/ / Refunded Bonds 25%
/ / Municipal Electric Utilities 40%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in municipal water/sewer
utility and municipal electric utility bonds, adverse
developments in these sectors may affect the value of your
units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF TEXAS SO IT
IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT TO
RISKS PARTICULAR TO TEXAS WHICH ARE BRIEFLY DESCRIBED UNDER
STATE CONCENTRATION RISKS LATER IN THIS PROSPECTUS.
9
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in insured
bonds of several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.16
Annual Income per unit: $ 49.98
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.69
Trustee's Fee
$ 0.38
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.61
Evaluator's Fee
$ 0.78
Other Operating Expenses
-----------
$ 2.46
TOTAL
The Sponsors historically paid updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
Texas Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to
this Fund. These prior Series differed in that they
charged a higher sales fee. These prior Texas Series were
offered between March 9, 1988 and July 11, 1996 and were
outstanding on June 30, 1999. OF COURSE, PAST PERFORMANCE
OF PRIOR SERIES IS NO GUARANTEE OF FUTURE RESULTS OF THIS
FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 6/30/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 2.46% 6.56% 5.99% 4.38% 7.75% 6.58%
Average 0.59 5.08 5.90 3.02 6.11 6.49
Low -3.64 3.66 5.76 -0.47 4.45 6.35
- -------------------------------------------------------------------
Average
Sales fee 2.47% 5.11% 5.83%
- -------------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
10
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,009.87
(as of July 31, 1999)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other
fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some Texas state and local taxes if you live in
Texas.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective, but the bonds generally will not be
insured. Income from this program will generally be subject
to state and local income taxes. For more complete
information about the program, including charges and fees,
ask the Trustee for the program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
11
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR NEW YORK CITY RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 43,060 23.59 5.24 5.89 6.54 7.20 7.85 8.51 9.16 9.82 10.47
$ 0-25,750- 23.63 5.24 5.89 6.55 7.20 7.86 8.51 9.17 9.82 10.48
$ 25,751- 62,450 $ 43,051-104,050 35.35 6.19 6.96 7.73 8.51 9.28 10.05 10.83 11.60 12.37
$ 62,451-130,250 $104,051-158,550 38.04 6.46 7.26 8.07 8.88 9.68 10.49 11.30 12.11 12.91
$130,251-283,150 $158,551-283,150 42.53 6.96 7.83 8.70 9.57 10.44 11.31 12.18 13.05 13.92
OVER $283,151 OVER $283,151 45.77 7.38 8.30 9.22 10.14 11.06 11.98 12.91 13.83 14.75
</TABLE>
FOR NEW YORK STATE RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 20.82 5.05 5.68 6.31 6.95 7.58 8.21 8.84 9.47 10.10
$ 25,751- 62,450 $ 43,051-104,050 32.93 5.96 6.71 7.46 8.20 8.95 9.69 10.44 11.18 11.93
$ 62,451-130,250 $104,051-158,550 35.73 6.22 7.00 7.78 8.56 9.34 10.11 10.69 11.67 12.45
$130,251-283,150 $158,551-283,150 40.38 6.71 7.55 8.39 9.23 10.06 10.90 11.74 12.58 13.42
OVER $283,151 OVER $283,151 43.74 7.11 8.00 8.89 9.78 10.66 11.55 12.44 13.33 14.22
</TABLE>
FOR PENNSYLVANIA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5% 7%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 17.38 3.63 4.24 4.84 5.45 6.05 6.66 7.26 7.87 8.47
$ 27,751- 62,450 $ 43,051-104,050 30.02 4.29 5.00 5.72 6.43 7.14 7.86 8.57 9.29 10.00
$ 62,451-130,250 $104,051-158,550 32.93 4.47 5.22 5.96 6.71 7.46 8.20 8.95 9.69 10.44
$130,251-283,150 $158,551-283,150 37.79 4.82 5.63 6.43 7.23 8.04 8.84 9.65 10.45 11.25
OVER $283,151 OVER $283,151 41.29 5.11 5.96 6.81 7.66 8.52 9.37 10.22 11.07 11.92
</TABLE>
FOR TEXAS RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EFFECTIVE TAX-FREE YIELD
TAXABLE INCOME 1999* % TAX OF
SINGLE RETURN JOINT RETURN BRACKET 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 15. 4.71 5.29 5.88 6.47 7.06 7.65 8.24 8.82 9.41
$ 25,751- 62,450 $ 43,051-104,050 28. 5.56 6.25 6.94 7.64 8.33 9.03 9.72 10.42 11.11
$ 62,451-130,250 $104,051-158,550 31. 5.80 6.52 7.25 7.97 8.70 9.42 10.14 10.87 11.59
$130,251-283,150 $158,551-283,150 36. 6.25 7.03 7.81 8.59 9.38 10.16 10.94 11.72 12.50
OVER $283,151 OVER $283,151 39. 6.62 7.45 8.28 9.11 9.93 10.76 11.59 12.42 13.25
</TABLE>
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates 1999
federal and applicable State (and City) income tax rates and assumes that all
income would otherwise be taxed at the investor's highest tax rate. Yield
figures are for example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions or the possible partial disallowance of
deductions. Consequently, investors are urged to consult their own tax advisers
in this regard.
12
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
o elimination of one or more bonds from the Fund's portfolio because of
calls, redemptions or sales;
o a change in the Fund's expenses; or
o the failure by a bond's issuer to pay interest.
Changes in interest rates generally will not affect your income because the
portfolio is fixed.
Along with your income, you will receive your share of any available bond
principal.
RETURN FIGURES
We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.
Estimated Current Return equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):
Estimated Annual Estimated
Interest Income - Annual Expenses
- -------------------------------------------------
Unit Price
Estimated Long Term Return is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.
Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.
These return quotations are designed to be comparative rather than predictive.
RECORDS AND REPORTS
You will receive:
o a monthly statement of income payments and any principal payments;
o a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
o an annual report on Fund activity; and
o annual tax information. This will also be sent to the IRS. You must report the
amount of tax-exempt interest received during the year.
You may request:
o copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
o audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
13
<PAGE>
THE RISKS YOU FACE
INTEREST RATE RISK
Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, bonds with longer maturities will
change in value more than bonds with shorter maturities. Bonds in the Fund are
more likely to be called when interest rates decline. This would result in early
returns of principal to you and may result in early termination of the Fund. Of
course, we cannot predict how interest rates may change.
CALL RISK
Many bonds can be prepaid or 'called' by the issuer before their stated
maturity.
For example, some bonds may be required to be called pursuant to mandatory
sinking fund provisions.
Also, an issuer might call its bonds during periods of falling interest rates,
if the issuer's bonds have a coupon higher than current market rates.
An issuer might call its bonds in extraordinary cases, including if:
o it no longer needs the money for the original purpose;
o the project is condemned or sold;
o the project is destroyed and insurance proceeds are used to redeem the
bonds;
o any related credit support expires and is not replaced; or
o interest on the bonds become taxable.
If the bonds are called, your income will decline and you may not be able to
reinvest the money you receive at as high a yield or as long a maturity. An
early call at par of a premium bond will reduce your return.
REDUCED DIVERSIFICATION RISK
If many investors sell their units, the Fund will have to sell bonds. This could
reduce the diversification of your investment and increase your share of Fund
expenses.
LIQUIDITY RISK
You can always sell back your units, but we cannot assure you that a liquid
trading market will always exist for the bonds in the portfolio, especially
since current law may restrict the Fund from selling bonds to any Sponsor. The
bonds will generally trade in the over-the-counter market. The value of the
bonds, and of your investment, may be reduced if trading in bonds is limited or
absent.
CONCENTRATION RISK
When a certain type of bond makes up 25% or more of the portfolio, it is said to
be 'concentrated' in that bond type, which makes the Portfolio less diversified.
Here is what you should know about the Texas Portfolio's concentration in
municipal water and sewer revenue bonds. The payment of interest and principal
of these bonds depends on the rates the utilities may charge, the demand for
their services and the cost of operating their business which includes the
expense of complying with environmental and other energy and licensing laws and
regulations. The operating results of utilities are particularly influenced by:
o increases in operating and construction costs; and
o unpredicability of future usage requirements.
Here is what you should know about the Texas Portfolio's concentration in
municipal electric utility revenue bonds. The payment of interest and principal
of these bonds depends on the rates the utilities may charge, the demand for
their services and the cost of operating their
14
<PAGE>
business which includes the expense of complying with environmental and other
energy and licensing laws and regulations. The operating results of utilities
are particularly influenced by:
o increases in operating and construction costs;
o the costs and availability of fuel;
o unpredicability of future usage requirements; and
o the risks associated with the nuclear industry.
There has been an increase in competition in the electric utility industry. The
effect of this competition has been to induce municipal utilities to keep their
rates as low as possible. Municipal electric utilities may, therefore, be unable
to increase rates to recover their investment in generating plant.
Here is what you should know about the Pennsylvania Portfolio's concentration in
lease rental bonds. Lease rental bonds are generally issued by governmental
financing authorities that cannot assess a tax to cover the cost of equipment or
construction of buildings that will be used by a state or local government. The
risks associated with these bonds include:
o the failure of the government to appropriate funds for the leasing rental
payments to service the bonds; and
o rental obligations, and therefore payments, may terminate in the event of
damages to or destruction or condemnation of the of the equipment or
building.
Here is what you should know about the New York Portfolio's concentration in
special tax bonds. Special tax bonds are payable from and secured by the
revenues a municipality derives from a particular tax; for example, a tax on
hotel rentals, on the purchase of food and beverages, car rentals, or liquor
consumption. These bonds are not secured by general tax revenues. Payment on
these bonds may be adversely affected by:
o a reduction in revenues resulting from a decline in the local economy or
population; or
o a decline in the consumption, use or cost of the goods and services that
are subject to taxation.
Here is what you should know about the New York and Texas Portfolio's
concentration in refunded bonds. Refunded bonds are typically:
o backed by direct obligations of the U.S. government; or
o in some cases, backed by obligations guaranteed by the U.S. government and
placed in escrow with an independent trustee;
o noncallable prior to maturity; but
o sometimes called for redemption prior to maturity.
Here is what you should know about the New York Portfolio's concentration in
airport/port/highway bonds. These bonds are dependent for payment on revenues
from financial projects including:
o user fees from ports and airports;
o tolls on turnpikes and bridges;
o rents from buildings; and
o additional financial resources including
--federal and state subsidies,
--lease rentals paid by state or local governments, or
--the pledge of a special tax such as a sales tax or a property tax.
Airport income is largely affected by:
o increased competition;
o excess capacity; and
o increased fuel costs.
Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentrations over time.
15
<PAGE>
STATE CONCENTRATION RISK
NEW YORK RISKS
Generally
For decades, New York's economy has trailed the rest of the nation. Both the
state and New York City have experienced long-term structural imbalances between
revenues and expenses, and have repeatedly relied substantially on non-recurring
measures to achieve budget balance. The pressures that contribute to budgetary
problems at both the state and local level include:
o the high combined state and local tax burden;
o a decline in manufacturing jobs, leading to above-average unemployment;
o sensitivity to the financial services industry; and
o dependence on federal aid.
State Government
The State government frequently has difficulty approving budgets on time. Budget
gaps of $1 billion and $4 billion are projected for the next two years. The
State's general obligation bonds are rated A by Standard & Poor's and A2 by
Moody's. There is $37 billion of state-related debt outstanding.
New York City Government
Even though the City had budget surpluses each year from 1981, budget gaps of $2
billion are projected for each of the next three years. New York City faces
fiscal pressures from:
o aging public facilities that need repair or replacement;
o welfare and medical costs;
o expiring labor contracts; and
o a high and increasing debt burden.
The City requires substantial state aid, and its fiscal strength depends heavily
on the securities industry. Its general obligation bonds are rated A-by Standard
& Poor's and A3 by Moody's.
PENNSYLVANIA RISKS
Generally
Pennsylvania and many of its municipalities (including Philadelphia) have
undergone an economic decline:
o coal, steel, railroads and other heavy industry historically associated
with the Commonwealth has given way to increased competition from foreign
producers.
o agriculture and related industries are still an important part of the
Commonwealth's economy.
o Recently, however, service sector industries (trade, medical and health
services, education and financial services) have provided new sources of
growth.
State and Local Governments
Historically, both the Commonwealth and the City of Philadelphia have
experienced serious revenue shortfalls. At the same time, rising demands for
state and local programs and services (particularly medical assistance and cash
assistance programs) have lead to increased spending.
o In recent years, both the Commonwealth and the City of Philadelphia have
tried to balance their budgets with a mix of tax increases and spending
cuts.
o Philadelphia has considered significant service cuts and privatization of
certain services which it has provided to date.
o In 1991, the Commonwealth created the Pennsylvania Inter-Governmental
16
<PAGE>
Cooperation Authority ('PICA') which it authorized to issue debt to cover
Philadelphia's budget shortfalls, eliminate the City's projected deficits
and fund its capital spending. PICA issued approximately $1.76 billion of
Special Revenue Bonds on Philadelphia's behalf. Its power to issue bonds
on Philadelphia's behalf expired at the end of 1996; as of June 30, 1997,
approximately $1.1 billion in PICA Special Revenue Bonds were outstanding.
o Pennsylvania's general obligation bonds are currently rated A1 by Moody's
and AA-by Standard & Poor's. Philadelphia's general obligation bonds are
rated Baa by Moody's and BBB by Standard & Poor's. There can be no
assurance that these ratings will not be lowered.
TEXAS RISKS
Generally
Although the Texas economy has performed well in recent years, it still faces a
number of challenges:
o although oil prices are increasing, the recent low prices have adversely
affected Texas' economy and reduced tax revenues. Some local governments
and school districts have experienced such significant reductions in oil
related tax revenues that they may increase property taxes to meet their
obligations, including debt service.
o exports are a significant part of the Texas economy, as is retail trade in
the Texas-Mexico border area. Economic problems in Mexico and Asia have
hurt the state's economy. Exports to Mexico fluctuated widely in the
mid-1990s as a result of Mexico's financial crisis;
o reductions in federal defense spending have also hurt the state's economy.
Scheduled military base closings will cause the loss of many jobs in the
affected communities, with much of the burden falling on the state's
Hispanic population.
Despite Texas' recent economic performance, Texas continues to have one of the
country's highest poverty rates. This has created greater demand for social
services. The resulting strains on the state could effect its economy
significantly:
o over one-quarter of the state's spending is for health and human services,
and the state has received substantial federal funding to pay for such
services;
o recent federal welfare reform legislation has and will cut back funding for
such services, has reduced benefit levels, and has prohibited services for
illegal immigrants; and
o the cuts in federal funding and services may have a disproportionate effect
on Texas, since the state has a high number of illegal immigrants and
people dependent on welfare programs. Under the new federal funding scheme
Texas may receive insufficient funds for its own programs, placing
additional strains on state and local finances unless spending on such
programs is reduced.
Texas' general obligation bonds are rated AA by Standard & Poor's, Aa2 by
Moody's and AA+ by Fitch's.
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.
17
<PAGE>
INSURANCE RELATED RISK
Some bonds are backed by insurance companies (as shown under Portfolios).
Insurance policies generally make payments only according to a bond's original
payment schedule and do not make early payments when a bond defaults or becomes
taxable. Although the federal government does not regulate the insurance
business, various state laws and federal initiatives and tax law changes could
significantly affect the insurance business. The claims-paying ability of the
insurance companies is generally rated A or better by Standard & Poor's or
another nationally recognized rating organization. The insurance company ratings
are subject to change at any time at the discretion of the rating agencies.
LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
Future tax legislation could affect the value of the portfolio by:
o limiting real property taxes,
o reducing tax rates,
o imposing a flat or other form of tax, or
o exempting investment income from tax.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:
o adding the value of the bonds, net accrued interest, cash and any other
Fund assets;
o subtracting accrued but unpaid Fund expenses, unreimbursed Trustee
advances, cash held to buy back units or for distribution to investors and
any other Fund liabilities; and
o dividing the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge. We may resell the units to other buyers or to
the Trustee. You should consult your financial professional for current market
prices to determine if other broker-dealers or banks are offering higher prices.
We have maintained the secondary market continuously for over 25 years, but we
could discontinue it without prior notice for any business reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold Unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional documents are
needed such as a trust document, certificate of corporate authority, certificate
of death or appointment as executor, administrator or guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
18
<PAGE>
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.
There could be a delay in paying you for your units:
o if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
o if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
bonds not reasonably practicable; and
o for any other period permitted by SEC order.
EXCHANGE OPTION
You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 1.90%. You may exchange units of this Fund for units
of certain other Defined Asset Funds at a reduced sales fee if your investment
goals change. To exchange units, you should talk to your financial professional
about what funds are exchangeable, suitable and currently available.
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.
We may amend or terminate this exchange option at any time without notice.
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the bonds, less expenses, from
the initial most recent Record Day up to, but not including, the settlement
date, which is usually three business days after the purchase date of the unit.
A portion of the price of a unit consists of cash so that the Trustee can
provide you with regular monthly income. When you sell your units you will
receive your share of this cash.
EVALUATIONS
An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
Bond values are based on current bid or offer prices for the bonds or comparable
bonds. In the past, the difference between bid and offer prices of publicly
offered tax-exempt bonds has ranged from 0.5% of face amount on actively traded
19
<PAGE>
issues to 3.5% on inactively traded issues; the difference has averaged between
1 and 2%.
INCOME
The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.
EXPENSES
The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:
o to reimburse the Trustee for the Fund's operating expenses;
o for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
o costs of actions taken to protect the Fund and other legal fees and
expenses;
o expenses for keeping the Fund's registration statement current; and
o Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 55 cents per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. Legal,
typesetting, electronic filing and regulatory filing fees and expenses
associated with updating the Portfolio's registration statement yearly are also
now chargeable to the Portfolio. While this fee may exceed the amount of these
costs and expenses attributable to this Fund, the total of these fees for all
Series of Defined Asset Funds will not exceed the aggregate amount attributable
to all of these Series for any calendar year. The Fund also pays the Evaluator's
fees.
The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.
The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the Fund will owe the excess. The
Trustee has a lien on Fund assets to secure reimbursement of Fund expenses and
may sell bonds if cash is not available.
PORTFOLIO CHANGES
The Sponsors and Trustee are not liable for any default or defect in a bond; if
a contract to buy any bond.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
bonds in the portfolio even if their credit quality declines or other adverse
financial circumstances occur. However, we may sell a bond in certain cases if
we believe that certain adverse credit conditions exist or if a bond becomes
taxable.
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which will affect the size
and composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
o diversity of the portfolio;
20
<PAGE>
o size of the Fund relative to its original size;
o ratio of Fund expenses to income;
o current and long-term returns;
o degree to which units may be selling at a premium over par; and
o cost of maintaining a current prospectus.
FUND TERMINATION
The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of bonds deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.
When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final sale.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.
CERTIFICATES
Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.
TRUST INDENTURE
The Fund is a 'unit investment trust' governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
o to cure ambiguities;
o to correct or supplement any defective or inconsistent provision;
o to make any amendment required by any governmental agency; or
o to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Fund without your written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
o it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
o it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign
21
<PAGE>
or be removed by the Sponsors and the Trustee without the consent of investors.
The resignation or removal of either becomes effective when a successor accepts
appointment. The Sponsors will try to appoint a successor promptly; however, if
no successor has accepted within 30 days after notice of resignation, the
resigning Trustee or Evaluator may petition a court to appoint a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
o remove it and appoint a replacement Sponsor;
o liquidate the Fund; or
o continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
counsel for the Sponsors, has given an opinion that the units are validly
issued. Special counsel located in the relevant states have given state and
local tax opinions.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statements of Condition included in this
prospectus.
SPONSORS
The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PRUDENTIAL SECURITIES INCORPORATED (an
indirect wholly-owned subsidiary of the
Prudential Insurance Company of America)
One New York Plaza
New York, NY 10292
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
22
<PAGE>
TRUSTEE
The Bank of New York, 101 Barclay Street, 17 W, New York, New York 10268, is the
Trustee.
It is supervised by the Federal Deposit Insurance Corporation, the Board of
Governors of the Federal Reserve System and New York State banking authorities.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. The Sponsors also
realized a profit or loss on the initial date of deposit of the bonds. Any cash
made available by you to the Sponsors before the settlement date for those units
may be used in the Sponsors' businesses to the extent permitted by federal law
and may benefit the Sponsors.
A Sponsor or Underwriter may realize profits or sustain losses on bonds in the
Fund which were acquired from underwriting syndicates of which it was a member.
In maintaining a secondary market, the Sponsors will also realize profits or
sustain losses in the amount of any difference between the prices at which they
buy units and the prices at which they resell or redeem them.
PUBLIC DISTRIBUTION
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
CODE OF ETHICS
Merrill Lynch, as agent for the Sponsors, has adopted a code of ethics requiring
preclearance and reporting of personal securities transactions by its employees
with access to information on portfolio transactions. The goal of the code is to
prevent fraud, deception or misconduct against the Fund and to provide
reasonable standards of conduct.
YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the 'Year
2000 Problem'). We do not expect that the computer system changes necessary to
prepare for the Year 2000 will cause any major operational difficulties for the
Fund. The Year 2000 Problem may adversely affect the issuers of the bonds
contained in a Portfolio, but we cannot predict whether any impact will be
material to the Fund as a whole.
TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances or subject to
special rules. You should consult your own tax adviser about your particular
circumstances.
At the date of issue of each bond, counsel for the issuer delivered an opinion
to the effect that interest on the bond is exempt from regular federal income
tax. However, interest may be subject to state and local taxes and may be taken
into account in determining your preference items for alternative minimum tax
purposes. Neither we nor our counsel have reviewed the issuance of the bonds,
related proceedings or the basis for the
23
<PAGE>
opinions of counsel for the issuers. We cannot assure you that the issuer (or
other users) have complied or will comply with any requirements necessary for a
bond to be tax-exempt. If any of the bonds were determined not to be tax-exempt,
you could be required to pay income tax for current and prior years, and if the
Fund were to sell the bond, it might have to sell it at a substantial discount.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each bond in the Fund.
GAIN OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued 'market
discount'. Generally you will have market discount to the extent that your basis
in a bond when you purchase a unit is less than its stated redemption price at
maturity (or, if it is an original issue discount bond, the issue price
increased by original issue discount that has accrued on the bond before your
purchase). You should consult your tax adviser in this regard.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will be long-term if you are considered to have held
your investment on each bond for more than one year and short-term otherwise. If
you are an individual and sell your units after holding them for more than one
year, you may be entitled to a 20% maximum federal tax rate on any resulting
gains. Consult your tax adviser in this regard. Because the deductibility of
capital losses is subject to limitations, you may not be able to deduct all of
your capital losses.
YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges and the organizational expenses you pay, adjusted to
reflect any accruals of 'original issue discount,' 'acquisition premium' and
'bond premium'. You should consult your tax adviser in this regard.
EXPENSES
If you are not a corporate investor, you will not be entitled to a deduction for
your share of fees and expenses of the Fund. Also, if you borrowed money in
order to purchase or carry your units, you will not be able to deduct the
interest on this borrowing for federal income tax purposes. The IRS may treat
your purchase of units as made with borrowed money even if the money is not
directly traceable to the purchase of units.
STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation. If you are a New York taxpayer, your income from the
Fund will not be tax-exempt in New York except to the
24
<PAGE>
extent that the income is earned on bonds that are tax-exempt for New York
purposes. Depending on where you live, your income from the Fund may be subject
to state and local taxation. You should consult your tax adviser in this regard.
PENNSYLVANIA TAXES
In the opinion of Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania,
special counsel on Pennsylvania tax matters:
The Pennsylvania Trust will not be taxed as a corporation under the current
income tax laws of Pennsylvania. Your income from the Trust may be subject to
taxation depending on where you live. If you are a Pennsylvania taxpayer your
interest income from the Trust will be tax exempt to the extent that income is
earned on bonds that are tax exempt for Pennsylvania purposes. However, gains on
the sale of bonds by the Trust or on the sale of your Units will be subject to
Pennsylvania income tax. If you are a Philadelphia resident you may be subject
to the Philadelphia school district tax on any gains realized from the sale of
bonds by the Trust or the sale of Units by you to the extent either the bonds or
Units have been held for six months or less. You should consult your tax adviser
as to the consequences to you with respect to any investment you make in the
Trust.
TEXAS TAXES
In the opinion of Hughes & Luce, L.L.P., Dallas, Texas, special counsel on Texas
tax matters:
Under Texas law, the Fund will not pay Texas income taxes on any Fund income so
long as the Fund is not a corporation or limited liability company for Texas tax
purposes. You will not pay income taxes to any Texas taxing authority on income
you receive from the Fund. As long as the Fund owns no tangible property, you
will not pay Texas property taxes on your units in the Fund and the Fund will
not pay Texas property tax on the bonds it holds. Your estate may have to pay
Texas inheritance taxes on any units you own upon your death. You should consult
your tax adviser respecting Texas taxes.
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolios, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.
25
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (NEW YORK, PENNSYLVANIA AND TEXAS TRUSTS),
DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Municipal Investment Trust Fund,
Multistate Series - 44 (New York, Pennsylvania and Texas Trusts),
Defined Asset Funds:
We have audited the accompanying statements of condition of Municipal
Investment Trust Fund, Multistate Series - 44 (New York, Pennsylvania
and Texas Trusts), Defined Asset Funds, including the portfolios, as
of July 31, 1999 and the related statements of operations and of
changes in net assets for the years ended July 31, 1999, 1998 and
1997. These financial statements are the responsibility of the
Trustee. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. Securities owned at July 31, 1999, as shown in
such portfolios, were confirmed to us by The Bank of New York, the
Trustee. An audit also includes assessing the accounting principles
used and significant estimates made by the Trustee, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Municipal
Investment Trust Fund, Multistate Series - 44 (New York, Pennsylvania
and Texas Trusts), Defined Asset Funds, at July 31, 1999 and the
results of their operations and changes in their net assets for the
above-stated years in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
October 5, 1999
D - 1
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF JULY 31, 1999
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $5,264,023)(Note 1)...................... $5,345,016
Receivable from security sold or redeemed........ 104,987
Accrued interest receivable...................... 64,933
Cash............................................. 3,086
_____________
Total trust property................. 5,518,022
LESS LIABILITIES:
Redemptions payable.............................. $ 102,991
Accrued expenses................................. 3,039 106,030
_____________ _____________
NET ASSETS, REPRESENTED BY:
5,275 units of fractional undivided
interest outstanding (Note 3).................. 5,350,789
Undistributed net investment income.............. 61,203
_____________
$5,411,992
=============
UNIT VALUE ($5,411,992/5,275 units)................ $1,025.97
=============
</TABLE>
See Notes to Financial Statements.
D - 2
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
.........Years Ended July 31,............
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................... $307,187 $334,033 $355,460
Trustee's fees and expenses............... (6,786) (7,194) (9,156)
Sponsors' fees............................ (2,658) (2,382) (2,199)
_________________________________________
Net investment income..................... 297,743 324,457 344,105
_________________________________________
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on securities
sold or redeemed........................ 31,963 21,108
Unrealized appreciation (depreciation)
of investments.......................... (108,763) 44,207 342,644
_________________________________________
Net realized and unrealized gain (loss)
on investments.......................... (76,800) 65,315 342,644
_________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................... $220,943 $389,772 $686,749
=========================================
</TABLE>
See Notes to Financial Statements.
D - 3
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
.........Years Ended July 31,............
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
OPERATIONS:
Net investment income....................... $ 297,743 $ 324,457 $ 344,105
Realized gain on securities
sold or redeemed.......................... 31,963 21,108
Unrealized appreciation (depreciation)
of investments............................ (108,763) 44,207 342,644
_________________________________________
Net increase in net assets resulting
from operations........................... 220,943 389,772 686,749
_________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income...................................... (298,323) (324,315) (344,947)
Principal................................... (36,328) (4,262)
_________________________________________
Total distributions......................... (298,323) (360,643) (349,209)
_________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of
710 and 780 units, respectively............. (738,900) (811,812)
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS......... (816,280) (782,683) 337,540
NET ASSETS AT BEGINNING OF YEAR............... 6,228,272 7,010,955 6,673,415
_________________________________________
NET ASSETS AT END OF YEAR..................... $5,411,992 $6,228,272 $7,010,955
=========================================
PER UNIT:
Income distributions during year............ $50.79 $50.85 $50.99
=========================================
Principal distributions during year......... $5.97 $0.63
=========================================
Net asset value at end of year.............. $1,025.97 $1,040.65 $1,036.36
=========================================
TRUST UNITS OUTSTANDING AT END OF YEAR........ 5,275 5,985 6,765
=========================================
</TABLE>
See Notes to Financial Statements.
D - 4
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (NEW YORK TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as
a Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator
based on bid side evaluations for the securities.
(b) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(c) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each
month. Receipts other than interest, after deductions for
redemptions and applicable expenses, are also distributed
periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 5,275 units at Date of Deposit.............. $5,494,659
Less sales charge................................... 192,326
______________
Net amount applicable to Holders.................... 5,302,333
Redemptions of units - net cost of 1,725 units
redeemed less redemption amounts.................. (34,254)
Realized gain on securities sold or redeemed........ 49,394
Principal distributions............................. (47,677)
Net unrealized appreciation of investments.......... 80,993
______________
Net capital applicable to Holders................... $5,350,789
==============
</TABLE>
4. INCOME TAXES
As of July 31, 1999, net unrealized appreciation of investments, based
on cost for Federal income tax purposes, aggregated $80,993 of which
$87,221 related to appreciated securities and $6,228 related to
depreciated securities. The cost of investment securities for Federal
income tax purposes was $5,264,023 at July 31, 1999.
D - 5
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44
DEFINED ASSET FUNDS
PORTFOLIO OF THE NEW YORK TRUST
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
__________ _________ ______ ______ _____________ _____________ ____ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 Buffalo Sewer Authority, Sewer AAA $ 520,000 5.250% 2008 07/01/03 $ 529,974 $ 528,434
System Revenue Bonds, Ser. G @ 100.000
(Financial Guaranty Ins.)(5)
2 The City of New York, NY, Gen. A- 780,000 5.700 2007(6) 08/01/03 786,685 828,446
Oblig. Bonds, Fiscal 1994 Ser. A, @ 101.500
Fixed Rate Current Interest Bonds, 60,000 5.700 2007 08/01/03 60,514 62,498
Subser. A-1 @ 101.500
3 New York Local Gov't Assistance A+ 1,000,000 5.250 2010 04/01/03 1,000,000 1,006,740
Corp. (A Public Benefit Corp. of @ 102.000
the State of New York), Ser. 1993 C
Rfdg. Bonds
4 New York State Med. Care Fac. Fin. AAA 335,000 5.500 2009(6) 02/15/03 346,520 353,887
Agy., Mental Health Services Fac. @ 102.000
Imp. Rev. Bonds, 1993 Ser. A 20,000 5.500 2009 02/15/03 20,688 20,498
(AMBAC Ins.)(5) @ 102.000
5 New York State Pwr. Auth., Gen. A 180,000 5.000 2009(6) 01/01/03 178,087 187,366
Purp. Bonds, Ser. CC @ 102.000
6 The Port Auth. of New York and AA- 560,000 5.200 2009 07/15/03 564,911 569,156
Jersey, Cons. Bonds, Eighty-Seventh @ 101.000
Ser.
7 The Port Auth. of New York and New- AA- 25,000 5.200 2009 None 25,405 25,662
Jersey, Cons. Bonds, Eighty-Sixth
Ser.
8 34th Street Partnership, Inc., NY, A1(m) 385,000 5.250 2007 01/01/03 386,605 385,520
34th Street Bus Imp. Dist., Cap. @ 102.000
Imp. Bonds, Ser. 1993 615,000 5.300 2008 01/01/03 617,558 614,145
@ 102.000
</TABLE>
D - 6
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44
DEFINED ASSET FUNDS
PORTFOLIO OF THE NEW YORK TRUST
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
__________ _________ ______ ______ _____________ _____________ ____ ________
<S> <C> <C> <C> <C> <C> <C> <C>
9 Triborough Bridge and Tunnel Aa3(m) $ 180,000 5.000% 2007 None $ 180,000 $ 183,681
Auth., NY, Gen. Purp. Rev. Bonds, 570,000 5.000 2008 None 567,076 578,983
Ser. 1
______________ ____________ _____________
TOTAL $5,230,000 $5,264,023 $5,345,016
============== ============ =============
</TABLE>
See Notes to Portfolios on Page D - 19.
D - 7
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF JULY 31, 1999
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $4,454,631)(Note 1)...................... $4,474,824
Accrued interest receivable...................... 42,361
Cash............................................. 28,737
_____________
Total trust property................. 4,545,922
LESS LIABILITY - Accrued expenses.................. 2,718
_____________
NET ASSETS, REPRESENTED BY:
4,511 units of fractional undivided
interest outstanding (Note 3).................. $4,483,303
Undistributed net investment income.............. 59,901
_____________
$4,543,204
=============
UNIT VALUE ($4,543,204/4,511 units)................ $1,007.14
=============
</TABLE>
See Notes to Financial Statements.
D - 8
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
.........Years Ended July 31,............
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................... $255,658 $271,022 $273,125
Trustee's fees and expenses............... (6,029) (6,208) (7,715)
Sponsors' fees............................ (2,111) (1,820) (1,622)
_________________________________________
Net investment income..................... 247,518 262,994 263,788
_________________________________________
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on securities
sold or redeemed........................ 8,155 3,499
Unrealized appreciation (depreciation)
of investments.......................... (88,265) 32,515 291,071
_________________________________________
Net realized and unrealized gain (loss)
on investments.......................... (80,110) 36,014 291,071
_________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................... $167,408 $299,008 $554,859
=========================================
</TABLE>
See Notes to Financial Statements.
D - 9
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
.........Years Ended July 31,............
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
OPERATIONS:
Net investment income....................... $ 247,518 $ 262,994 $ 263,788
Realized gain on securities
sold or redeemed.......................... 8,155 3,499
Unrealized appreciation (depreciation)
of investments............................ (88,265) 32,515 291,071
_________________________________________
Net increase in net assets resulting
from operations........................... 167,408 299,008 554,859
_________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income...................................... (247,076) (261,777) (264,550)
Principal................................... (11,470)
_________________________________________
Total distributions......................... (258,546) (261,777) (264,550)
_________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of
313 and 176 units, respectively............. (324,246) (180,890)
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS......... (415,384) (143,659) 290,309
NET ASSETS AT BEGINNING OF YEAR............... 4,958,588 5,102,247 4,811,938
_________________________________________
NET ASSETS AT END OF YEAR..................... $4,543,204 $4,958,588 $5,102,247
=========================================
PER UNIT:
Income distributions during year............ $52.54 $52.66 $52.91
=========================================
Principal distributions during year......... $2.43
=========================================
Net asset value at end of year.............. $1,007.14 $1,027.90 $1,020.45
=========================================
TRUST UNITS OUTSTANDING AT END OF YEAR........ 4,511 4,824 5,000
=========================================
</TABLE>
See Notes to Financial Statements.
D - 10
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as
a Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator
based on bid side evaluations for the securities.
(b) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(c) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each
month. Receipts other than interest, after deductions for
redemptions and applicable expenses, are also distributed
periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 4,511 units at Date of Deposit.............. $4,688,079
Less sales charge................................... 210,934
______________
Net amount applicable to Holders.................... 4,477,145
Redemptions of units - net cost of 489 units
redeemed less redemption amounts.................. (14,219)
Realized gain on securities sold or redeemed........ 11,654
Principal distributions............................. (11,470)
Net unrealized appreciation of investments.......... 20,193
______________
Net capital applicable to Holders................... $4,483,303
==============
</TABLE>
4. INCOME TAXES
As of July 31, 1999, net unrealized appreciation of investments, based
on cost for Federal income tax purposes, aggregated $20,193, of
which $43,403 related to appreciated securities and $23,210 related
to depreciated securities. The cost of investment securities for
Federal income tax purposes was $4,454,631 at July 31, 1999.
D - 11
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44
DEFINED ASSET FUNDS
PORTFOLIO OF THE PENNSYLVANIA TRUST (INSURED)
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities(4) Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
_____________ _________ ______ ______ _____________ _____________ ____ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 Bucks County, Pennsylvania, AAA $ 750,000 5.250% 2021 07/01/03 $ 728,573 $ 713,423
Industrial Development Authority, @ 102.000
Hospital Revenue Refunding Bonds
(Grand View Hospital), Ser. 1993 A
(AMBAC Ins.)
2 Pennsylvania Intergovernmental AAA 695,000 5.625 2023(6) 06/15/03 701,081 727,762
Coop. Auth., Spec. Tax Rev. Bonds @ 100.000
(City of Philadelphia Funding
Prog.), Ser. 1993 (MBIA Ins.)
3 Ctfs. of Ptcptn., Ser. 1993 A, AAA 750,000 5.000 2015 07/01/03 711,735 708,248
Cmmnwlth of Pennsylvania, (AMBAC @ 102.000
Ins.)
4 Pennsylvania Higher Educational AAA 750,000 5.750 2031 04/01/01 761,468 757,313
Facilities Authority, Temple and @ 100.000
University Revenue Bonds, First
Ser. 1991 (MBIA Ins.)
5 City of Philadelphia, PA, Wtr. and AAA 665,000 5.500 2014 06/15/03 662,506 668,930
Wastewater Rev. Bonds, Ser. 1993 @ 102.000
(FSAM Ins.)
6 The Philadelphia Mun. Auth, PA, AAA 145,000 5.625 2014 11/15/03 146,583 147,247
Lease Rev. Rfdg. Bonds, 1993 Ser. A @ 102.000
(Financial Guaranty Ins.)
7 The Philadelphia Municipal AAA 460,000 5.250 2018 04/01/03 447,589 447,171
Authority, PA, Lease Revenue @ 102.000
Refunding Bonds, Ser. 1993 C
(Financial Guaranty Ins.)
</TABLE>
D - 12
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44
DEFINED ASSET FUNDS
PORTFOLIO OF THE PENNSYLVANIA TRUST (INSURED)
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities(4) Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
_____________ _________ ______ ______ _____________ _____________ ____ ________
<S> <C> <C> <C> <C> <C> <C> <C>
8 Washington County Hospital AAA $ 285,000 5.875% 2013(6) 12/15/02 $ 295,096 $ 304,730
Authority, PA, Hospital Revenue @ 102.000
Refunding Bonds, Ser. 1992 (AMBAC
Ins.)
______________ ______________ _____________
TOTAL $4,500,000 $4,454,631 $4,474,824
============== ============== =============
</TABLE>
See Notes to Portfolios on Page D - 19.
D - 13
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (TEXAS TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF JULY 31, 1999
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $2,065,708)(Note 1)...................... $2,087,411
Accrued interest receivable...................... 25,765
Cash............................................. 1,696
_____________
Total trust property................. 2,114,872
LESS LIABILITY - Accrued expenses.................. 1,928
_____________
NET ASSETS, REPRESENTED BY:
2,125 units of fractional undivided
interest outstanding (Note 3).................. $2,088,029
Undistributed net investment income.............. 24,915
_____________
$2,112,944
=============
UNIT VALUE ($2,112,944/2,125 units)................ $994.33
=============
</TABLE>
See Notes to Financial Statements.
D - 14
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (TEXAS TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
.........Years Ended July 31,............
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................... $120,168 $137,391 $152,035
Trustee's fees and expenses............... (4,263) (4,264) (5,534)
Sponsors' fees............................ (1,040) (947) (940)
_________________________________________
Net investment income..................... 114,865 132,180 145,561
_________________________________________
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) on securities
sold or redeemed........................ 17,035 7,466 (2,907)
Unrealized appreciation (depreciation)
of investments.......................... (46,799) 32,252 174,322
_________________________________________
Net realized and unrealized gain (loss)
on investments.......................... (29,764) 39,718 171,415
_________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................... $ 85,101 $171,898 $316,976
=========================================
</TABLE>
See Notes to Financial Statements.
D - 15
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (TEXAS TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
.........Years Ended July 31,............
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
OPERATIONS:
Net investment income....................... $ 114,865 $ 132,180 $ 145,561
Realized gain (loss) on securities
sold or redeemed.......................... 17,035 7,466 (2,907)
Unrealized appreciation (depreciation)
of investments............................ (46,799) 32,252 174,322
_________________________________________
Net increase in net assets resulting
from operations........................... 85,101 171,898 316,976
_________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income...................................... (115,893) (132,354) (146,301)
Principal................................... (16,299) (7,358) (3,599)
_________________________________________
Total distributions......................... (132,192) (139,712) (149,900)
_________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of
284, 447 and 96 units, respectively......... (292,818) (452,990) (89,739)
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS......... (339,909) (420,804) 77,337
NET ASSETS AT BEGINNING OF YEAR............... 2,452,853 2,873,657 2,796,320
_________________________________________
NET ASSETS AT END OF YEAR..................... $2,112,944 $2,452,853 $2,873,657
=========================================
PER UNIT:
Income distributions during year............ $50.51 $50.69 $50.94
=========================================
Principal distributions during year......... $7.37 $2.98 $1.26
=========================================
Net asset value at end of year.............. $994.33 $1,018.20 $1,006.18
=========================================
TRUST UNITS OUTSTANDING AT END OF YEAR........ 2,125 2,409 2,856
=========================================
</TABLE>
See Notes to Financial Statements.
D - 16
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (TEXAS TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as
a Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator
based on bid side evaluations for the securities.
(b) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(c) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each
month. Receipts other than interest, after deductions for
redemptions and applicable expenses, are also distributed
periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 2,125 units at Date of Deposit.............. $2,194,562
Less sales charge................................... 98,749
______________
Net amount applicable to Holders.................... 2,095,813
Redemptions of units - net cost of 1,125 units
redeemed less redemption amounts.................. 27,016
Realized loss on securities sold or redeemed........ (15,036)
Principal distributions............................. (41,467)
Net unrealized appreciation of investments.......... 21,703
______________
Net capital applicable to Holders................... $2,088,029
==============
</TABLE>
4. INCOME TAXES
As of July 31, 1999, net unrealized appreciation of investments, based
on cost for Federal income tax purposes, aggregated $21,703 of which
$36,512 related to appreciated securities and $14,809 related to
depreciated securities. The cost of investment securities for Federal
income tax purposes was $2,065,708 at July 31, 1999.
D - 17
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44
DEFINED ASSET FUNDS
PORTFOLIO OF THE TEXAS TRUST (INSURED)
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities(4) Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
_____________ _________ ______ ______ _____________ _____________ ____ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 City of Austin, TX, Combined AAA $ 500,000 5.250% 2018 05/15/03 $ 489,785 $ 487,715
Utility Systems Revenue Refunding @ 100.000
Bonds, Ser. 1993 (MBIA Ins.)
2 Brazosport Water Authority, AAA 310,000 5.500 2018 09/01/03 310,000 306,736
Brazoria County, Texas Water Supply @ 100.000
Revenue Refunding Bonds, Ser. 1993
(AMBAC Ins.)
3 Colorado River Municipal Water AAA 435,000 5.150 2021 01/01/03 420,724 411,249
District, Texas, Water System @ 100.000
Revenue Refunding Bonds, Ser. 1993
(AMBAC Ins.)
4 Lockhart Correction Facility AAA 90,000 5.500 2014(6) 04/01/03 89,450 93,656
Finance Corp., TX, Revenue Bonds @ 100.000
Ser. 1993 (MBIA Ins.)
5 Lower Colorado River Authority AAA 100,000 5.500 2010 01/01/03 100,411 102,965
Texas, Revenue Refunding Bonds @ 102.000
(Fifth Supplemental Ser.)(FSA Ins.)
6 Lubbock Health Facilities AAA 420,000 5.250 2019(6) 12/01/03 408,303 435,103
Development Corporation Texas @ 100.000
Hospital Revenue Refunding Bonds
(Methodist Hospital Lubbock, TX,
Project) Ser. 1993 B (AMBAC Ins.)
7 Texas Municipal Power Agency, AAA 250,000 5.250 2012 09/01/03 247,035 249,987
Refunding Revenue Bonds, Ser. 1993 @ 100.000
(MBIA Ins.)
______________ ______________ _____________
TOTAL $2,105,000 $2,065,708 $2,087,411
============== ============== =============
</TABLE>
See Notes to Portfolios on Page D - 19.
D - 18
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 44 (NEW YORK, PENNSYLVANIA AND TEXAS TRUSTS),
DEFINED ASSET FUNDS
NOTES TO PORTFOLIOS
AS OF JULY 31, 1999
(1) The ratings of the bonds are by Standard & Poor's Ratings
Group, or by Moody's Investors Service, Inc. if followed by
"(m)", or by Fitch Investors Service, Inc. if followed by
"(f)"; "NR" indicates that this bond is not currently rated by
any of the above-mentioned rating services. These ratings have
been furnished by the Evaluator but not confirmed with
the rating agencies.
(2) See Notes to Financial Statements.
(3) Optional redemption provisions, which may be exercised in whole
or in part, are initially at prices of par plus a premium, then
subsequently at prices declining to par. Certain securities may
provide for redemption at par prior or in addition to any
optional or mandatory redemption dates or maturity, for
example, through the operation of a maintenance and replacement
fund, if proceeds are not able to be used as contemplated, the
project is condemned or sold or the project is destroyed and
insurance proceeds are used to redeem the securities. Many of
the securities are also subject to mandatory sinking fund
redemption commencing on dates which may be prior to the date
on which securities may be optionally redeemed. Sinking fund
redemptions are at par and redeem only part of the issue. Some
of the securities have mandatory sinking funds which contain
optional provisions permitting the issuer to increase the
principal amount of securities called on a mandatory redemption
date. The sinking fund redemptions with optional provisions
may, and optional refunding redemptions generally will, occur
at times when the redeemed securities have an offering side
evaluation which represents a premium over par. To the extent
that the securities were acquired at a price higher than the
redemption price, this will represent a loss of capital when
compared with the Public Offering Price of the Units when
acquired. Distributions will generally be reduced by the amount
of the income which would otherwise have been paid with respect
to redeemed securities and there will be distributed to Holders
any principal amount and premium received on such redemption
after satisfying any redemption requests for Units received by
the Fund. The estimated current return may be affected by
redemptions.
(4) All Securities are insured either on an individual basis or by
portfolio insurance, by a municipal bond insurance company
which has been assigned "AAA" claims paying ability by
Standard & Poor's. Accordingly, Standard & Poor's has assigned
"AAA" ratings to the Securities. Securities covered by
portfolio insurance are rated "AAA" only as long as they
remain in this Trust.
(5) Insured by the indicated municipal bond insurance company.
(6) Bonds with aggregate face amounts of $1,295,00, $980,000 and $510,000
for the New York, Pennsylvania and Texas Trusts, respectively, have
been pre-refunded and are expected to be called for redemption on
the optional redemption provision dates shown.
D - 19
D - 8
D - 15
<PAGE>
Defined
Asset FundsSM
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most MULTISTATE SERIES--44
recent free Information (A Unit Investment Trust)
Supplement that gives more ---------------------------------------
details about the Fund, This Prospectus does not contain
by calling: complete information about the
The Bank of New York investment company filed with the
1-800-221-7771 Securities and Exchange Commission in
Washington, D.C. under the:
o Securities Act of 1933 (file no.
33-49799) and
o Investment Company Act of 1940 (file
no. 811-1777).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
Units of any future series may not be
sold nor may offers to buy be accepted
until that series has become effective
with the Securities and Exchange
Commission. No units can be sold in any
State where a sale would be illegal.
14582--10/99
