DEFINED ASSET FUNDS--REGISTERED TRADEMARK--
-------------------------------
---------------------
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--48
(A UNIT INVESTMENT TRUST)
- CALIFORNIA, CONNECTICUT, MASSACHUSETTS AND
VIRGINIA PORTFOLIOS
- PORTFOLIOS OF LONG-TERM MUNICIPAL BONDS
- DESIGNED FOR INCOME FREE FROM REGULAR FEDERAL
INCOME TAX
- EXEMPT FROM SOME STATE TAXES
- MONTHLY DISTRIBUTIONS
SPONSORS:
MERRILL LYNCH,
PIERCE, FENNER & SMITH
INCORPORATED -----------------------------------------------------
SALOMON SMITH BARNEY INC. The Securities and Exchange Commission has not
PRUDENTIAL SECURITIES approved or disapproved these Securities or passed
INCORPORATED upon the adequacy of this prospectus. Any
PAINEWEBBER INCORPORATED representation to the contrary is a criminal offense.
DEAN WITTER REYNOLDS INC. Prospectus dated January 28, 2000.
<PAGE>
- --------------------------------------------------------------------------------
Def ined Asset Funds-Registered Trademark-
Defined Asset Funds-Registered Trademark- 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:
- A Disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
- Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
- Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
- Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
- 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 SEPTEMBER 30, 1999, THE
EVALUATION DATE.
<TABLE>
<S> <C>
CONTENTS
PAGE
---
California Insured Portfolio--
Risk/Return Summary................ 3
Connecticut Portfolio--Risk/Return
Summary............................ 6
Massachusetts Portfolio--Risk/Return
Summary............................ 9
Virginia Portfolio--
Risk/Return Summary................ 12
What You Can Expect From Your
Investment......................... 16
Monthly Income..................... 16
Return Figures..................... 16
Records and Reports................ 16
The Risks You Face................... 16
Interest Rate Risk................. 16
Call Risk.......................... 17
Reduced Diversification Risk....... 17
Liquidity Risk..................... 17
Concentration Risk................. 17
State Concentration Risk........... 18
Bond Quality Risk.................. 21
Insurance Related Risk............. 21
Litigation and Legislation Risks... 21
Selling or Exchanging Units.......... 21
Sponsors' Secondary Market......... 22
Selling Units to the Trustee....... 22
Exchange Option.................... 22
How The Fund Works................... 23
Pricing............................ 23
Evaluations........................ 23
Income............................. 23
Expenses........................... 23
Portfolio Changes.................. 24
Fund Termination................... 24
Certificates....................... 25
Trust Indenture.................... 25
Legal Opinion...................... 25
Auditors........................... 26
Sponsors........................... 26
Trustee............................ 26
Underwriters' and Sponsors'
Profits.......................... 26
Public Distribution................ 26
Code of Ethics..................... 27
Year 2000 Issues................... 27
Taxes................................ 27
Supplemental Information............. 30
Financial Statements................. D-1
</TABLE>
2
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA INSURED PORTFOLIO--RISK/RETURN SUMMARY
<TABLE>
<C> <S>
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?
- The Fund plans to hold to maturity 7
long-term tax-exempt municipal bonds
with an aggregate face amount of
$4,925,000.
- The Fund is a unit investment trust
which means that, unlike a mutual fund,
the Portfolio is not managed.
- The bonds are rated AAA or Aaa by
Standard & Poor's, Moody's or Fitch.
- 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.
- The Fund is concentrated in refunded
bonds.
- 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:
</TABLE>
<TABLE>
/ / Housing 13%
<S> <C>
/ / Lease Rental Appropriation 15%
/ / Municipal Water/Sewer
Utilities 31%
/ / Refunded Bonds 26%
/ / Municipal Electric Utilities 15%
</TABLE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
municipal water/sewer utility bonds,
adverse developments in this sector may
affect the value of your units.
- 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.
- 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 CALIFORNIA SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO CALIFORNIA
WHICH ARE BRIEFLY DESCRIBED UNDER STATE
CONCENTRATION RISKS LATER IN THIS
PROSPECTUS.
</TABLE>
3
<PAGE>
<TABLE>
<C> <S>
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.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
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 $ 4.15
Annual Income per unit: $49.91
THESE FIGURES ARE ESTIMATES DETERMINED ON THE
EVALUATION DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S>
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:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
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%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$0.70
Trustee's Fee
$0.49
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$0.19
Evaluator's Fee
$0.34
Other Operating Expenses
-----
$1.72
TOTAL
</TABLE>
<TABLE>
<C> <S>
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 CALIFORNIA 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 California Series
were offered between June 22, 1988 and
September 27, 1996 and were outstanding on
December 31, 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
12/31/99.
</TABLE>
-------------------------------------------------------------------
<TABLE>
High 3.14% 6.73% 5.38% 3.54% 7.92% 5.97%
<S> <C> <C> <C> <C> <C> <C>
Average -3.57 5.28 5.21 -1.71 6.34 5.80
Low -8.58 2.79 5.04 -6.00 3.55 5.63
</TABLE>
-----------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Average
Sales fee 1.96% 5.20% 5.82%
</TABLE>
-----------------------------------------------------------
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
<TABLE>
<C> <S>
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.
</TABLE>
4
<PAGE>
<TABLE>
<C> <S>
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 $957.32
(as of September 30, 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.
</TABLE>
<TABLE>
<C> <S>
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
California state and local personal
income taxes if you live in California.
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.
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
CONNECTICUT PORTFOLIO--RISK/RETURN SUMMARY
<TABLE>
<C> <S>
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 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?
- The Fund plans to hold to maturity 8
long-term tax-exempt municipal bonds
with an aggregate face amount of
$3,245,000.
- The Fund is a unit investment trust
which means that, unlike a mutual fund,
the Portfolio is not managed.
- When the bonds were initially deposited
they were rated A or better by Standard
& Poor's, Moody's or Fitch. THE QUALITY
OF THE BONDS MAY CURRENTLY BE LOWER.
- 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.
- 44% 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:
</TABLE>
<TABLE>
<CAPTION>
APPROXIMATE
PORTFOLIO
PERCENTAGE
<S> <C>
/ / Airports/Ports/Highways 11%
/ / General Obligation 30%
/ / Hospital/Health Care 15%
/ / Municipal Water/Sewer
Utilities 13%
/ / Special Tax 15%
/ / Municipal Electric
Utilities 16%
</TABLE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
general obligation bonds, adverse
developments in this sector may affect
the value of your units.
- 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.
- 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 CONNECTICUT SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO
CONNECTICUT WHICH ARE BRIEFLY DESCRIBED
UNDER STATE CONCENTRATION RISKS LATER IN
THIS PROSPECTUS.
</TABLE>
6
<PAGE>
<TABLE>
<C> <S>
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 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.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
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 $ 4.03
Annual Income per unit: $48.43
THESE FIGURES ARE ESTIMATES DETERMINED ON THE
EVALUATION DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S>
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 be charged 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:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
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%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$0.70
Trustee's Fee
$0.49
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$0.29
Evaluator's Fee
$0.49
Other Operating Expenses
-----
$1.97
TOTAL
</TABLE>
<TABLE>
<C> <S>
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 CONNECTICUT 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 Connecticut
Series were offered between October 26, 1988
and April 25, 1996 and were outstanding on
December 31, 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
12/31/99.
</TABLE>
<TABLE>
<CAPTION>
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
High 0.31% 6.45% 2.01% 7.65%
Average -2.84 4.61 -1.19 5.59
Low -8.97 3.39 -6.21 4.21
<C> <S>
<C> <S>
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.
</TABLE>
7
<PAGE>
<TABLE>
<C> <S>
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 $970.74
(as of September 30, 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
Connecticut state and local personal income taxes
if you live in Connecticut.
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. 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.
</TABLE>
8
<PAGE>
- --------------------------------------------------------------------------------
MASSACHUSETTS PORTFOLIO--RISK/RETURN SUMMARY
<TABLE>
<C> <S>
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 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?
- The Fund plans to hold to maturity 7
long-term tax-exempt municipal bonds
with an aggregate face amount of
$2,860,000.
- The Fund is a unit investment trust
which means that, unlike a mutual fund,
the Portfolio is not managed.
- When the bonds were initially deposited
they were rated A or better by Standard
& Poor's, Moody's or Fitch. THE QUALITY
OF THE BONDS MAY CURRENTLY BE LOWER.
- 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.
- 52% 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:
</TABLE>
<TABLE>
<CAPTION>
APPROXIMATE
PORTFOLIO
PERCENTAGE
<S> <C>
/ / Airports/Ports/Highways 10%
/ / General Obligation 18%
/ / Hospital/Health Care 53%
/ / Housing 11%
/ / Refunded Bonds 8%
</TABLE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
hospital/health care bonds, adverse
developments in this sector may affect
the value of your units.
- 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.
- 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 MASSACHUSETTS SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO
MASSACHUSETTS WHICH ARE BRIEFLY
DESCRIBED UNDER STATE CONCENTRATION
RISKS LATER IN THIS PROSPECTUS.
</TABLE>
9
<PAGE>
<TABLE>
<C> <S>
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 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.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
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 $ 4.17
Annual Income per unit: $50.07
THESE FIGURES ARE ESTIMATES DETERMINED ON THE
EVALUATION DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S>
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 be charged 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:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
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%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$0.70
Trustee's Fee
$0.49
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$0.33
Evaluator's Fee
$0.55
Other Operating Expenses
-----
$2.07
TOTAL
</TABLE>
<TABLE>
<C> <S>
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 MASSACHUSETTS 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 Massachusetts
Series were offered between June 23, 1989 and
February 3, 1994 and were outstanding on
December 31, 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
12/31/99.
</TABLE>
<TABLE>
<CAPTION>
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
High 1.77% 6.39% 2.70% 7.59%
Average -1.78 4.34 -0.51 5.34
Low -9.44 2.90 -6.94 3.64
<C> <S>
<C> <S>
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.
</TABLE>
10
<PAGE>
<TABLE>
<C> <S>
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 $954.97
(as of September 30, 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
Massachusetts state and local personal income
taxes if you live in Massachusetts.
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. 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.
</TABLE>
11
<PAGE>
- --------------------------------------------------------------------------------
VIRGINIA PORTFOLIO--RISK/RETURN SUMMARY
<TABLE>
<C> <S>
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 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?
- The Fund plans to hold to maturity 7
long-term tax-exempt municipal bonds
with an aggregate face amount of
$2,980,000.
- The Fund is a unit investment trust
which means that, unlike a mutual fund,
the Portfolio is not managed.
- When the bonds were initially deposited
they were rated A or better by Standard
& Poor's, Moody's or Fitch. THE QUALITY
OF THE BONDS MAY CURRENTLY BE LOWER.
- 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.
- 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:
</TABLE>
<TABLE>
<CAPTION>
APPROXIMATE
PORTFOLIO
PERCENTAGE
<S> <C>
/ / Airports/Ports/Highways 10%
/ / Hospital/Health Care 49%
/ / Housing 17%
/ / Lease Rental
Appropriation 7%
/ / Municipal Electric
Utilities 17%
</TABLE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
hospital/health care bonds, adverse
developments in this sector may affect
the value of your units.
- 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.
- 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 VIRGINIA SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO VIRGINIA
WHICH ARE BRIEFLY DESCRIBED UNDER STATE
CONCENTRATION RISKS LATER IN THIS
PROSPECTUS.
</TABLE>
12
<PAGE>
<TABLE>
<C> <S>
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 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.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
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: $49.95
THESE FIGURES ARE ESTIMATES DETERMINED ON THE
EVALUATION DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S>
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 be charged 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:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
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%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$0.70
Trustee's Fee
$0.49
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$0.32
Evaluator's Fee
$0.52
Other Operating Expenses
-----
$2.03
TOTAL
</TABLE>
<TABLE>
<C> <S>
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 VIRGINIA 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 Virginia Series
were offered between October 26, 1988 and
September 19, 1996 and were outstanding on
December 31, 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
12/31/99.
</TABLE>
<TABLE>
<CAPTION>
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
High 0.76% 6.45% 2.30% 7.64%
Average -3.12 5.10 -1.28 6.09
Low -9.61 2.95 -6.82 3.63
<C> <S>
<C> <S>
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.
</TABLE>
13
<PAGE>
<TABLE>
<C> <S>
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 $956.15
(as of September 30, 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
Virginia state and local personal income taxes if
you live in Virginia.
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. 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.
</TABLE>
14
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR CALIFORNIA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 2000* TAX-FREE YIELD OF
SINGLE RETURN 7% 7.5% 8%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 26,250 $ $0- 43,050 20.10 3.75 4.38 5.01 5.63 6.26 6.88 7.51
$ 26,251- 63,550 $ 43,851-105,950 34.70 4.59 5.36 6.13 6.89 7.66 8.42 9.19
$ 63,551-132,600 $105,951-161,450 37.42 4.79 5.59 6.39 7.19 7.99 8.79 9.59
$132,601-288,350 $161,451-288,350 41.95 5.17 6.03 6.89 7.75 8.61 9.47 10.34
OVER $288,350 OVER $288,350 45.22 5.48 6.39 7.30 8.21 9.13 10.04 10.95
<S> <C> <C> <C> <C>
$ 0- 26,250 8.14 8.76 9.39 10.01
$ 26,251- 63,550 9.95 10.72 11.48 12.25
$ 63,551-132,600 10.39 11.19 11.98 12.78
$132,601-288,350 11.20 12.06 12.92 13.78
OVER $288,350 11.87 12.78 13.69 14.60
</TABLE>
FOR CONNECTICUT RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 2000* TAX-FREE YIELD OF
SINGLE RETURN 7% 7.5% 8%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 18.83 4.93 5.54 6.16 6.78 7.39 8.01 8.62
$ 25,751- 62,450 $ 43,051-104,050 31.24 5.82 6.54 7.27 8.00 8.73 9.45 10.18
$ 62,451-130,250 $104,051-158,550 34.11 6.07 6.83 7.59 8.35 9.11 9.86 10.62
$130,251-283,150 $158,551-283,150 38.88 6.54 7.36 8.18 9.00 9.82 10.63 11.45
OVER $283,151 OVER $283,151 42.32 6.93 7.80 8.67 9.54 10.40 11.27 12.14
<S> <C> <C>
$ 0- 25,750 9.24 9.86
$ 25,751- 62,450 10.91 11.63
$ 62,451-130,250 11.38 12.14
$130,251-283,150 12.27 13.09
OVER $283,151 13.00 13.87
</TABLE>
FOR MASSACHUSETTS RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 2000* TAX-FREE YIELD OF
SINGLE RETURN 7% 7.5% 8%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 26,250 $ 0- 43,850 19.97 5.00 5.62 6.25 6.87 7.50 8.12 8.75
$ 26,251- 63,550 $ 43,851-105,950 32.21 5.90 6.64 7.38 8.11 8.85 9.59 10.33
$ 63,551-132,600 $105,951-161,450 35.04 6.16 6.93 7.70 8.47 9.24 10.01 10.78
$132,601-288,350 $161,451-288,350 39.74 6.64 7.47 8.30 9.13 9.96 10.79 11.62
OVER $288,350 OVER $288,350 43.13 7.03 7.91 8.79 9.67 10.55 11.43 12.31
<S> <C> <C>
$ 0- 26,250 9.37 10.00
$ 26,251- 63,550 11.06 11.80
$ 63,551-132,600 11.54 12.31
$132,601-288,350 12.45 13.28
OVER $288,350 13.19 14.07
</TABLE>
FOR VIRGINIA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 2000* TAX-FREE YIELD OF
SINGLE RETURN 7% 7.5% 8%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 26,250 $ $0- 43,850 19.89 4.99 5.62 6.24 6.87 7.49 8.11 8.74
$ 26,251- 63,550 $ 43,851-105,950 32.14 5.89 6.63 7.37 8.10 8.84 9.58 10.32
$ 63,551-132,600 $105,951-161,450 34.97 6.15 6.92 7.69 8.46 9.23 10.00 10.76
$132,601-288,350 $161,451-288,350 39.68 6.63 7.46 8.29 9.12 9.95 10.78 11.60
OVER $288,350 OVER $288,350 43.07 7.03 7.90 8.78 9.66 10.54 11.42 12.30
<S> <C> <C>
$ 0- 26,250 9.36 9.99
$ 26,251- 63,550 11.05 11.79
$ 63,551-132,600 11.53 12.30
$132,601-288,350 12.43 13.26
OVER $288,350 13.17 14.05
</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 2000
federal and applicable State 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, you should consult your own tax advisers in this
regard.
15
<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:
- elimination of one or more bonds from the Fund's portfolio because of calls,
redemptions or sales;
- a change in the Fund's expenses; or
- 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):
<TABLE>
<S> <C> <C>
Estimated Annual Estimated
Interest Income - Annual Expenses
- -------------------------------------
Unit Price
</TABLE>
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:
- - a monthly statement of income payments and any principal payments;
- - a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
- - an annual report on Fund activity; and
- - 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:
- - copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
- - audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
16
<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:
- it no longer needs the money for the original purpose;
- the project is condemned or sold;
- the project is destroyed and insurance proceeds are used to redeem the
bonds;
- any related credit support expires and is not replaced; or
- 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 California 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:
- increases in operating and construction costs; and
- unpredicability of future usage requirements.
Here is what you should know about the California Portfolio's concentration in
refunded bonds. Refunded bonds are typically:
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- backed by direct obligations of the U.S. government; or
- in some cases, backed by obligations guaranteed by the U.S. government and
placed in escrow with an independent trustee;
- noncallable prior to maturity; but
- sometimes called for redemption prior to maturity.
Here is what you should know about the Connecticut Portfolio's concentration in
general obligation bonds.
- general obligation bonds are backed by the issuer's pledge of its full
faith, credit and taxing power;
- but the taxing power of any government issuer may be limited by provisions
of the state constitution or laws as well as political and economic
considerations; and
- an issuer's credit can be negatively affected by various factors, including
population decline that erodes the tax base, natural disasters, decline in
industry, limited access to capital markets or heavy reliance on state or
federal aid.
Here is what you should know about the Massachusetts and Virginia Portfolios'
concentrations in hospital and health care bonds.
- payment for these bonds depends on revenues from private third-party payors
and government programs, including Medicare and Medicaid, which have
generally undertaken cost containment measures to limit payments to health
care providers;
- hospitals face increasing competition resulting from hospital mergers and
affiliations;
- hospitals need to reduce costs as HMOs increase market penetration and
hospital supply and drug companies raise prices;
- hospitals and health care providers are subject to various legal claims by
patients and others and are adversely affected by increasing costs of
insurance; and
- many hospitals are aggressively buying physician practices and assuming risk
contracts to gain market share. If revenues do not increase accordingly,
this practice could reduce profits;
- Medicare is changing its reimbursement system for nursing homes. Many
nursing home providers are not sure how they will be treated. In many cases,
the providers may receive lower reimbursements and these would have to cut
expenses to maintain profitability; and
- most retirement/nursing home providers rely on entrance fees for operating
revenues. If people live longer than expected and turnover is lower than
budgeted, operating revenues would be adversely affected by less than
expected entrance fees.
Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentrations over time.
STATE CONCENTRATION RISK
CALIFORNIA RISKS
GENERALLY
From the late 1980s through the early 1990s, an economic recession eroded
California's revenue base. At the same time rapid population growth caused State
expenditures to exceed budget appropriations.
- As a result California experienced a period of sustained budget imbalance.
- Since that time the California economy has improved markedly and the extreme
budgetary pressures have begun to
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lessen. However, the Asian economic crisis is expected to continue to have
some negative effectt on the State's economy.
STATE GOVERNMENT
The 1997-98 Budget Act allocated a State budget of approximately $66.9 Billion
and contains no tax increases or reductions. Despite this somewhat improved
state, California's budget is still subject to certain unforeseeable events. For
example:
- In December, 1994, Orange County and its investment pool filed for
bankruptcy. While a settlement has been reached, the full impact on the
State and Orange County is still unknown.
- California faces constant fluctuations in other expenses (including health
and welfare caseloads, property tax receipts, federal funding and natural
disaster relief) that will undoubtedly create new budgetary pressure and
reduce issuers' ability to pay their debts.
- California's general obligation bonds are currently rated A1 by Moody's and
A+ by Standard & Poor's.
OTHER RISKS
Issuers' ability to make payments on bonds (and the remedies available to
bondholders) could also be adversely affected by the following constraints:
- Certain provisions of California's Constitution, laws and regulatory system
contain tax, spending and appropriations limits and prohibit certain new
taxes.
- Certain other California laws subject the users of bond proceeds to strict
rules and limits regarding revenue repayment.
- Bonds of healthcare institutions which are subject to the strict rules and
limits regarding reimbursement payments of California's Medi-Cal program for
health care services to welfare recipients and bonds secured by liens on
real property are two of the types of bonds affected by these provisions.
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CONNECTICUT RISKS
GENERALLY
Connecticut has experienced a variety of economic problems in the last several
years including:
- manufacturing, historically the state's most important activity, has
employed fewer and fewer people over the last 10 years;
- large cuts in defense spending threaten defense-related business, which has
traditionally represented a big part of the state's manufacturing activity;
and
- unemployment and poverty are high in certain parts of the state, even though
unemployment state-wide is below the national average.
STATE AND LOCAL GOVERNMENT
Connecticut's state and local governments have also experienced financial
difficulties for several years. For example:
- the state's General Fund had operating deficits for several years in the
late 1980s and early 1990s. Since 1991, however, the General Fund has had
operating surpluses;
- the state issued notes in 1991 to fund its accumulated deficit. The notes
were originally supposed to be paid by 1996, but they were rescheduled, so
that they will be repaid by 1999; and
- Connecticut has several of the nation's poorest and most financially
troubled cities, including Bridgeport, which filed for bankruptcy in 1991,
and its capital city of Hartford.
Local governments in Connecticut receive tax revenue only from taxes on real
estate and personal property, which makes it hard for them to raise additional
tax revenue. Both Connecticut and its cities depend heavily on federal aid, and
the cities also depend on a significant amount of state aid. Both the state and
its cities could be hurt by any future reduction in the amount of such aid.
Connecticut's general obligation bonds are rated AA by Standard & Poor's, Aa3 by
Moody's, and AA by Fitch.
MASSACHUSETTS RISKS
STATE BUDGET (JUNE 30 FISCAL)
By statute, the Legislature and the Governor must approve a balanced budget for
each fiscal year, and no supplementary appropriation bill may be approved by the
Governor if it will result in an unbalanced budget. However, this is a statutory
requirement that may be superseded by an appropriation act.
Fiscal 1999 spending is estimated to be approximately $21.151 billion.
The budget for fiscal 2000 calls for total spending of $20.556 billion.
The Commonwealth of Massachusetts experienced budget surpluses in both fiscal
1997 and fiscal 1998.
Certain legislation passed in recent years affects the taxing and spending power
of Massachusetts and its local governments. Currently, state finance law
provides for a Stabilization Fund, a Capital Projects Fund and a Tax Reduction
Fund relating to year-end surpluses.
- Up to 7.5% of budgeted revenues and other resources may be accumulated in
the Stabilization Fund
- Amounts in excess of that limit are transferred to the Tax Reduction Fund
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which can be used for cuts in personal income taxes; and
- Up to 40% of any year-end budget surplus can be transferred to the Capital
Projects Fund for use on capital expenditures, if there is a negative
balance in the State's capital funds.
In addition, State law limits the rate at which tax revenue can grow, based on
the average growth of wages and salaries in the state:
- This limit could affect the State's ability to pay principal and interest on
its obligations, although the limit has not been reached from fiscal years
1994 to 1998, and it is not expected to be reached for fiscal 1999.
- Projected tax revenues for fiscal year 1999 and 2000 are estimated to be $14
billion and $14.459 billion, respectively.
OTHER CONSIDERATIONS
Recent cash flow estimates predict that Massachusetts will have a cash position
of $975.9 million at fiscal year-end 1999 (not including activity after June 30,
1999, or the balance in the Stabilization Fund).
The Central Artery/Ted Williams Tunnel project has become the largest part of
the Commonwealth's capital spending.
- The magnitude of the Central Artery/Ted Williams Tunnel project has resulted
in the realignment of certain transportation assets in the Commonwealth and
the development of additional financing mechanisms to support its
completion.
The State has maintained a five-year capital spending plan since 1992. The goal
is to limit the State's debt burden by controlling the relationship between
current capital spending and the issuance of debt.
- The plan is based on numerous assumptions including the level of third party
funding and federal funding for the Central Artery/Ted Wiliams Tunnel
project.
There is a limit on debt service in the Commonwealth requiring that no more than
10% of the total appropriations in any fiscal year may be expended for payment
of interest and principal on general obligation debt of the Commonwealth:
- This limit has not been reached from fiscal years 1994 to 1998 and is not
expected to be reached for fiscal 1999.
The Commonwealth has established a Management Office for monitoring the progress
of state agencies in addressing the "year 2000 problem'. The exposure resulting
from the potential failures with electronic data processing systems and other
equipment affects only a few agencies significantly, but the impact of such
failures would be significant unless addressed timely.
General obligations bonds of Massachusetts are currently rated Aa3 by Moody's,
AA-by Standard & Poor's and AA- by Fitch. There can be no assurance that such
ratings will continue.
VIRGINIA RISKS
Virginia's economy is highly dependent on defense spending:
- there are major concentrations of defense installations in Northern Virginia
and the Hampton Roads area; and
- any substantial reductions in military spending, including base closings,
could hurt both the state and local economies.
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The state's general obligations are rated AAA by Standard & Poor's and Aaa by
Moody'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.
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:
- limiting real property taxes,
- reducing tax rates,
- imposing a flat or other form of tax, or
- 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:
- ADDING the value of the bonds, net accrued interest, cash and any other Fund
assets;
- 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
- 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
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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.
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:
- if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
- 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
- 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,
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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
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:
- to reimburse the Trustee for the Fund's operating expenses;
- for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
- costs of actions taken to protect the Fund and other legal fees and
expenses;
- expenses for keeping the Fund's registration statement current; and
- 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
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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 may affect the
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:
- diversity of the portfolio;
- size of the Fund relative to its original size;
- ratio of Fund expenses to income;
- current and long-term returns;
- degree to which units may be selling at a premium over par; and
- 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:
- to cure ambiguities;
- to correct or supplement any defective or inconsistent provision;
- to make any amendment required by any governmental agency; or
- to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
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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:
- it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
- 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 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:
- remove it and appoint a replacement Sponsor;
- liquidate the Fund; or
- 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
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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.
TRUSTEE
The Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th Floor, New York, New York 10004, 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.
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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 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 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,"
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"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 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.
CALIFORNIA TAXES
In the opinion of O'Melveny & Myers LLP, Los Angeles, California, special
counsel on California tax matters:
Under the income tax laws of the State of California, the Trust will not be
taxed as a corporation and you will be considered to own directly your share of
each bond of the Trust. If you are a California taxpayer, your share of the
income from the bonds of the Trust will not be tax-exempt in California except
for California personal income tax purposes and only to the extent that the
income is earned on bonds that are exempt for such purposes. If you are a
California taxpayer and all or part of your share of a bond is disposed of (for
example, when a bond is sold, exchanged or redeemed at maturity or you sell or
exchange your units), you will recognize gain or loss for California tax
purposes. Depending on where you live, your income from the Trust may be subject
to state and local taxation. You should consult your tax advisor in this regard.
CONNECTICUT TAXES
In the opinion of Day, Berry & Howard LLP, Hartford, Connecticut, special
counsel on Connecticut tax matters:
Under the income tax laws of the State of Connecticut, the Fund will not be
taxed. If you are an individual, trust or estate that is subject to the
Connecticut income tax, you will not be taxed on your share of the interest
derived by the Fund from those bonds that are tax-exempt for Connecticut income
tax purposes. In addition, if you hold your units of the Fund as a capital
asset, you will not recognize either gain or loss if the Fund enters into a
transaction in which it is treated for federal income tax purposes as having
sold a bond that is issued by an issuer in Connecticut and is tax-exempt for
Connecticut income tax purposes, and you may not have to recognize gain or loss
to the extent attributable to a unit's share of any such bonds if you sell,
exchange or redeem the unit. You should consult your tax adviser in this regard.
In all other instances, you will
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recognize gain or loss, in the event either the Fund enters into a transaction
involving a bond held by it or you sell, exchange or redeem a unit of the Fund,
to the same extent that you recognize gain or loss therefrom for Federal income
tax purposes.
In the case of an entity subject to the Connecticut corporation business tax,
its share of all income derived from units of the Fund or their ownership will
be subject to that Connecticut tax.
MASSACHUSETTS TAXES
In the opinion of Masterman, Culbert & Tully LLP, Boston, Massachusetts, special
counsel on Massachusetts tax matters:
This advice only applies to individual investors in the units who are subject to
Massachusetts income taxation and assumes the Fund is a Trust of the type
commonly known as a "fixed investment trust" for federal tax purposes.
1. The Massachusetts taxing authorities will not tax the Fund as an entity. They
will treat you as the owner of your share of each bond in the Fund.
2. If you are subject to Massachusetts income taxation, you need not include
your share of the Fund's earnings in your Massachusetts gross income to the
extent such earnings are derived by the Fund on tax-exempt bonds issued by
Massachusetts or its agencies or municipalities or by the governments of Puerto
Rico and Guam.
3. You must include gains and losses of the Fund as well as those resulting from
the sale or redemption of your Units in your Massachusetts gross income if you
are required to include such gains or losses in your federal gross income unless
these gains and losses are statutorily exempt from Massachusetts income
taxation. If gains from such bonds in the Fund are exempt from Massachusetts
income taxation, you will not be allowed to include losses in your Massachusetts
gross income to the extent such losses arise from the bonds for which the gains
are statutorily exempt. In each case, the taxability of the gains or losses
depends upon the particular bonds in the Fund.
4. Any distribution made to you by the Fund may be subject to Massachusetts
income tax to the same degree and in the same manner as income, gains and losses
of the Fund as are described in paragraphs 2 and 3 above.
VIRGINIA TAXES
In the opinion of Hunton & Williams, Richmond, Virginia, special counsel on
Virginia tax matters:
Under the income tax laws of the State of Virginia, the Virginia Trust will not
be taxed as a corporation. If you are a Virginia taxpayer, your income from the
Virginia Trust will not be tax-exempt in Virginia except to the extent that the
income is attributable to either (i) interest earned on bonds that are
tax-exempt for Virginia purposes or (ii) profits from the sale of certain
Virginia bonds that have been issued under Virginia legislation specifically
exempting all income from those bonds. If, at the time of your death, you either
are a Virginia resident or, in certain cases, are not a resident of the United
States, your units
30
<PAGE>
may be subject to Virginia estate tax. You should consult your tax adviser in
these matters.
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.
31
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (CALIFORNIA, CONNECTICUT,
MASSACHUSETTS AND VIRGINIA TRUSTS),
DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Defined Asset Funds - Municipal Investment Trust Fund,
Multistate Series - 48 (California, Connecticut, Massachusetts
and Virginia Trusts):
We have audited the accompanying statements of condition of Defined
Asset Funds - Municipal Investment Trust Fund, Multistate Series - 48
(California, Connecticut, Massachusetts and Virginia Trusts),
including the portfolios, as of September 30, 1999 and the related
statements of operations and of changes in net assets for the years
ended September 30, 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 September 30, 1999, as shown
in such portfolios, were confirmed to us by The Chase Manhattan Bank,
the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Trustee, as well
as evaluating the overall financial statement presentation. We believe
that our 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 Defined
Asset Funds - Municipal Investment Trust Fund, Multistate Series - 48
(California, Connecticut, Massachusetts and Virginia Trusts) at
September 30, 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.
January 10, 2000
D - 1.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (CALIFORNIA TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of September 30, 1999
TRUST PROPERTY:
Investment in marketable securities
at value (cost $ 4,883,521)(Note 1) ...... $ 4,585,046
Accrued interest............................. 69,095
Cash - principal ............................ 1,577
-------------
Total trust property ...................... 4,655,718
LESS LIABILITIES:
Income advance from Trustee.................. $ 9,077
Accrued Sponsors' fees ...................... 1,062 10,139
------------- -------------
NET ASSETS, REPRESENTED BY:
4,924 units of fractional undivided
interest outstanding (Note 3) ............ 4,586,623
Undistributed net investment income ......... 58,956 $ 4,645,579
------------- =============
UNIT VALUE ($ 4,645,579 / 4,924 units)......... $ 943.46
=============
See Notes to Financial Statements.
D - 2.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (CALIFORNIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended September 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 255,626 $ 258,462 $ 258,463
Trustee's fees and expenses ............ (5,818) (6,169) (6,007)
Sponsors' fees ......................... (1,537) (1,863) (1,812)
----------------------------------------------
Net investment income .................. 248,271 250,430 250,644
----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 93
Unrealized appreciation (depreciation)
of investments ....................... (395,438) 259,054 220,151
----------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (395,345) 259,054 220,151
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (147,074) $ 509,484 $ 470,795
==============================================
</TABLE>
See Notes to Financial Statements.
D - 3.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (CALIFORNIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended September 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income .................. $ 248,271 $ 250,430 $ 250,644
Realized gain on
securities sold or redeemed .......... 93
Unrealized appreciation (depreciation)
of investments ....................... (395,438) 259,054 220,151
----------------------------------------------
Net increase (decrease) in net assets
resulting from operations ............ (147,074) 509,484 470,795
----------------------------------------------
INCOME DISTRIBUTIONS (Note 2): ........... (247,865) (250,400) (250,700)
----------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (882)
Redemption amounts - principal ......... (76,428)
----------------------------------------------
Total share transactions ............... (77,310)
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .... (472,249) 259,084 220,095
NET ASSETS AT BEGINNING OF YEAR .......... 5,117,828 4,858,744 4,638,649
----------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 4,645,579 $ 5,117,828 $ 4,858,744
==============================================
PER UNIT:
Income distributions during
year ................................. $ 50.08 $ 50.08 $ 50.14
==============================================
Net asset value at end of
year ................................. $ 943.46 $ 1,023.57 $ 971.75
==============================================
TRUST UNITS:
Redeemed during year ................... 76 0 0
Outstanding at end of year ............. 4,924 5,000 5,000
==============================================
</TABLE>
See Notes to Financial Statements.
D - 4.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (CALIFORNIA 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
Cost of 4,924 units at Date of Deposit .................. $ 5,116,216
Less sales charge ....................................... 230,197
-----------
Net amount applicable to Holders ........................ 4,886,019
Redemptions of units - net cost of 76 units redeemed
less redemption amounts (principal).................... (1,014)
Realized gain on securities sold or redeemed ............ 93
Net unrealized depreciation of investments............... (298,475)
-----------
Net capital applicable to Holders ....................... $ 4,586,623
===========
4. INCOME TAXES
As of September 30, 1999, net unrealized depreciation of investments,
based on cost for Federal income tax purposes, aggregated $298,475, of
which $309,925 related to depreciated securities and $11,450 related
to appreciated securities. The cost of investment securities for
Federal income tax purposes was $4,883,521 at September 30, 1999.
D - 5.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (CALIFORNIA TRUST) (INSURED),
DEFINED ASSET FUNDS
PORTFOLIO
As of September 30, 1999
<TABLE>
<CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 City of Anaheim, CA, Anaheim Mem. Hosp. AAA $ 750,000 5.125 % 2020 None $ 747,270 $ 691,200
Association, Certs. of Part.
(AMBAC Ins.)
2 Cnty. of San Joaquin, CA, San Joaquin AAA 750,000 4.750 2019 11/15/03 701,250 649,125
Cnty. Pub. Fac. Fin. Corporation @ 102.000
(MBIA Ins.)
3 Jurupa Comm. Services Dist., CA, Rfdg. AAA 750,000 5.200 2023 09/01/03 750,000 695,243
Certificates of Participation @ 102.000
(Wastewater Capacity Refinancing)
(Financial Guaranty Ins.)
4 Redev. Agy. of the City of Riverside, AAA 525,000 5.625 2023(6) 08/01/02 545,386 556,836
CA, Tax Allocation Rfdg. Bonds, @ 102.000
1993 Ser. A (Casa Blanca Redev. Proj.)
(MBIA Ins.)
5 Southern California Pub. Pwr. Auth., AAA 750,000 5.000 2022 07/01/03 733,170 676,403
Trans. Proj. Rev. Bonds, 1993 @ 100.000
Subordinate Rfdg. Ser. (Southern Trans.
Proj.) (MBIA Ins.)
6 The City of Los Angeles, CA, Mtge. Rev. AAA 650,000 5.350 2022 01/01/03 653,250 607,796
Rfdg. Bonds, Ser. 1993 II-A @ 100.000
(FHA Ins. Mtge. Loans-Section 8
Assited Projects) (MBIA Ins.)
7 The City of San Diego, CA, Swr. Rev. AAA 750,000 5.250 2020 05/15/03 753,195 708,443
Bonds, Ser. 1993-A (AMBAC Ins.) @ 102.000
--------- --------- ---------
$ 4,925,000 $ 4,883,521 $ 4,585,046
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 22.
D - 6.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (CONNECTICUT TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of September 30, 1999
TRUST PROPERTY:
Investment in marketable securities
at value (cost $ 3,222,078)(Note 1) ...... $ 3,068,152
Accrued interest............................. 43,659
Cash - income ............................... 392
Cash - principal ............................ 10,427
-------------
Total trust property ...................... 3,122,630
LESS LIABILITIES:
Income advance from Trustee.................. $ 5,840
Accrued Sponsors' fees ...................... 1,063 6,903
------------- -------------
NET ASSETS, REPRESENTED BY:
3,252 units of fractional undivided
interest outstanding (Note 3) ............ 3,078,579
Undistributed net investment income ......... 37,148 $ 3,115,727
------------- =============
UNIT VALUE ($ 3,115,727 / 3,252 units)......... $ 958.10
=============
See Notes to Financial Statements.
D - 7.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (CONNECTICUT TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended September 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 170,941 $ 178,193 $ 177,240
Trustee's fees and expenses ............ (4,629) (5,007) (4,927)
Sponsors' fees ......................... (1,395) (1,301) (1,269)
----------------------------------------------
Net investment income .................. 164,917 171,885 171,044
----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized loss on
securities sold or redeemed .......... (714) (875)
Unrealized appreciation (depreciation)
of investments ....................... (254,168) 158,793 166,186
----------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (254,882) 157,918 166,186
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (89,965) $ 329,803 $ 337,230
==============================================
</TABLE>
See Notes to Financial Statements.
D - 8.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (CONNECTICUT TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended September 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income .................. $ 164,917 $ 171,885 $ 171,044
Realized loss on
securities sold or redeemed .......... (714) (875)
Unrealized appreciation (depreciation)
of investments ....................... (254,168) 158,793 166,186
----------------------------------------------
Net increase (decrease) in net assets
resulting from operations ............ (89,965) 329,803 337,230
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (165,232) (171,943) (171,080)
Principal .............................. (796)
----------------------------------------------
Total distributions .................... (166,028) (171,943) (171,080)
----------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (2,135) (399)
Redemption amounts - principal ......... (205,165) (40,940)
----------------------------------------------
Total share transactions ............... (207,300) (41,339)
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .... (463,293) 116,521 166,150
NET ASSETS AT BEGINNING OF YEAR .......... 3,579,020 3,462,499 3,296,349
----------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 3,115,727 $ 3,579,020 $ 3,462,499
==============================================
PER UNIT:
Income distributions during
year ................................. $ 48.74 $ 49.42 $ 48.88
==============================================
Principal distributions during
year ................................. $ 0.23
================
Net asset value at end of
year ................................. $ 958.10 $ 1,034.70 $ 989.29
==============================================
TRUST UNITS:
Redeemed during year ................... 207 41 0
Outstanding at end of year ............. 3,252 3,459 3,500
==============================================
</TABLE>
See Notes to Financial Statements.
D - 9.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (CONNECTICUT 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
Cost of 3,252 units at Date of Deposit................... $ 3,386,731
Less sales charge ....................................... 152,390
-----------
Net amount applicable to Holders ........................ 3,234,341
Redemptions of units - net cost of 248 units redeemed
less redemption amounts (principal).................... 549
Realized loss on securities sold or redeemed ............ (1,589)
Principal distributions ................................. (796)
Unrealized depreciation of investments................... (153,926)
-----------
Net capital applicable to Holders ....................... $ 3,078,579
===========
4. INCOME TAXES
As of September 30, 1999, unrealized depreciation of investments,
based on cost for Federal income tax purposes, aggregated $153,926,
all of which related to depreciated securities. The cost of investment
securities for Federal income tax purposes was $3,222,078 at September
30, 1999.
D - 10.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (CONNECTICUT TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of September 30, 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 Connecticut Mun. Electric Energy Coop., AAA $ 510,000 5.000 % 2018 01/01/04 $ 502,916 $ 464,386
Pwr. Supply Sys. Rev. Bonds, @ 102.000
Ser. 1993 A (MBIA Ins.) (5)
2 Town of Manchester, CT, G.O. AA 130,000 4.800 2011 None 126,941 126,537
Bonds Ser. 1993
3 Puerto Rico Hwy. and Trans. Auth., A 350,000 5.000 2022 07/01/03 337,071 311,602
Highway Rev. Rfdg. Bonds, Ser. X @ 101.500
4 South Central, CT, Regional Water Auth. AAA 410,000 5.750 2012 08/01/03 437,089 419,332
Water Sys. Rev. Bonds, Eleventh Ser. @ 102.000
(Financial Guaranty Ins.) (5)
5 State of Connecticut Hlth. and Educl. AAA 500,000 5.000 2023 07/01/03 488,615 442,850
Fac. Auth. Rev. Bonds, Saint Francis @ 102.000
Hosp. and Med. Ctr. Iss., Ser. C
(Financial Guaranty Ins.) (5)
6 State of Connecticut, Genl. Oblig. AA 455,000 4.750 2011 03/15/04 441,860 437,860
Bonds, 1993 Ser. E @ 101.500
7 State of Connecticut, Spec. Tax Oblig. AA- 500,000 5.000 2011 10/01/03 500,000 489,845
Bonds, Transp. Infrastructure @ 101.500
Purposes, 1993 Ser. C
8 Town of East Haven, CT, G.O. Bonds A 145,000 5.000 2012 10/15/02 144,120 140,540
@ 102.000
A 245,000 5.000 2013 10/15/02 243,466 235,200
@ 102.000
----------- ----------- -----------
$ 3,245,000 $ 3,222,078 $ 3,068,152
=========== =========== ===========
</TABLE>
See Notes to Portfolios on page D - 22.
D - 11.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (MASSACHUSETTS TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of September 30, 1999
TRUST PROPERTY:
Investment in marketable securities
at value (cost $ 2,849,065)(Note 1) ....... $ 2,675,248
Accrued interest.............................. 44,534
Cash - principal ............................. 3
-------------
Total trust property ....................... 2,719,785
LESS LIABILITIES:
Income advance from Trustee................... $ 10,797
Accrued Sponsors' fees ....................... 949 11,746
------------- -------------
NET ASSETS, REPRESENTED BY:
2,880 units of fractional undivided
interest outstanding (Note 3) ............. 2,675,251
Undistributed net investment income .......... 32,788 $ 2,708,039
------------- =============
UNIT VALUE ($ 2,708,039 / 2,880 units).......... $ 940.29
=============
See Notes to Financial Statements.
D - 12.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (MASSACHUSETTS TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended September 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 155,890 $ 164,210 $ 164,210
Trustee's fees and expenses ............ (4,322) (4,763) (4,787)
Sponsors' fees ......................... (1,246) (1,163) (1,132)
----------------------------------------------
Net investment income .................. 150,322 158,284 158,291
----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 6,290
Unrealized appreciation (depreciation)
of investments ....................... (252,428) 167,520 125,756
----------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (246,138) 167,520 125,756
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (95,816) $ 325,804 $ 284,047
==============================================
</TABLE>
See Notes to Financial Statements.
D - 13.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (MASSACHUSETTS TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended September 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income .................. $ 150,322 $ 158,284 $ 158,291
Realized gain on
securities sold or redeemed .......... 6,290
Unrealized appreciation (depreciation)
of investments ....................... (252,428) 167,520 125,756
----------------------------------------------
Net increase (decrease) in net assets
resulting from operations ............ (95,816) 325,804 284,047
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (150,630) (158,253) (158,315)
Principal .............................. (14,832)
----------------------------------------------
Total distributions .................... (165,462) (158,253) (158,315)
----------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (2,692)
Redemption amounts - principal ......... (252,548)
----------------------------------------------
Total share transactions ............... (255,240)
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .... (516,518) 167,551 125,732
NET ASSETS AT BEGINNING OF YEAR .......... 3,224,557 3,057,006 2,931,274
----------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 2,708,039 $ 3,224,557 $ 3,057,006
==============================================
PER UNIT:
Income distributions during
year ................................. $ 50.49 $ 50.56 $ 50.58
==============================================
Principal distributions during
year ................................. $ 5.15
================
Net asset value at end of
year ................................. $ 940.29 $ 1,030.21 $ 976.68
==============================================
TRUST UNITS:
Redeemed during year ................... 250
Outstanding at end of year ............. 2,880 3,130 3,130
==============================================
</TABLE>
See Notes to Financial Statements.
D - 14.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (MASSACHUSETTS 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
Cost of 2,880 units at Date of Deposit ..................... $ 3,007,331
Less sales charge .......................................... 135,331
-----------
Net amount applicable to Holders ........................... 2,872,000
Redemptions of units - net cost of 420 units redeemed
less redemption amounts (principal)....................... 27,380
Realized loss on securities sold or redeemed ............... (30,608)
Principal distributions .................................... (19,704)
Net unrealized depreciation of investments.................. (173,817)
-----------
Net capital applicable to Holders .......................... $ 2,675,251
===========
4. INCOME TAXES
As of September 30, 1999, net unrealized depreciation of investments,
based on cost for Federal income tax purposes, aggregated $173,817,
all of which $180,621 related to depreciated securities and $6,804
related to appreciated securities. The cost of investment securities
for Federal income tax purposes was $2,849,065 at September 30, 1999.
D - 15.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (MASSACHUSETTS TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of September 30, 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 Massachusetts Hlth. and Educl. AAA $ 500,000 5.375 % 2023 07/01/03 $ 505,365 $ 465,435
Facilities Auth., Rev. Bonds, Lahey @ 102.000
Med. Center Issue, Ser. B
(MBIA Ins.) (5)
2 Massachusetts Hlth. and Educl. Fac. AAA 500,000 5.250 2023 07/01/03 502,130 453,970
Auth., Rev. Bonds, Massachusetts Gen. @ 102.000
Hosp. Iss., Ser. G (AMBAC Ins.) (5)
3 Massachusetts Hlth. and Educl. Fac. AAA 500,000 5.500 2023 07/01/03 504,250 469,715
Auth., Rev. Bonds, Morton Hosp. and @ 102.000
Med. Ctr. Issue Ser. B
(Connie Lee Ins.) (5)
4 Massachusetts Hsg. Fin. Agency, Single- Aa(m) 320,000 5.300 2012 12/01/03 321,600 309,955
Family Hsg. Rev. Bonds, Ser. 28 @ 102.000
5 Massachusetts Wtr. Resources Auth., Aaa(m) 240,000 5.500 2022(6) 07/15/02 240,802 247,606
Gen. Rev. Bonds, 1992 Ser. A @ 100.000
6 Puerto Rico Hwy. and Trans. Auth., A 300,000 5.000 2022 07/01/03 288,918 267,087
Highway Rev. Rfdg. Bonds, Ser. X @ 101.500
7 The Commonwealth of Massachusetts, AA- 500,000 4.875 2013 10/01/03 486,000 461,480
Genl. Oblig. Bonds, Consol. Loan of @ 102.000
1993, Ser. B
----------- ----------- -----------
$ 2,860,000 $ 2,849,065 $ 2,675,248
=========== =========== ===========
</TABLE>
See Notes to Portfolios on page D - 22.
D - 16.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (VIRGINIA TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of September 30, 1999
TRUST PROPERTY:
Investment in marketable securities
at value (cost $ 2,967,480)(Note 1) ....... $ 2,775,387
Accrued interest ............................. 33,994
Prepaid Trustee's fees and expenses .......... 497
Cash - income ................................ 1,297
Cash - principal ............................. 4,735
-------------
Total trust property ....................... 2,815,910
LESS LIABILITY:
Accrued Sponsors' fees ....................... 980
-------------
NET ASSETS, REPRESENTED BY:
2,989 units of fractional undivided
interest outstanding (Note 3) ............. $ 2,780,122
Undistributed net investment income .......... 34,808 $ 2,814,930
------------- =============
UNIT VALUE ($ 2,814,930 / 2,989 units).......... $ 941.76
=============
See Notes to Financial Statements.
D - 17.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (VIRGINIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended September 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 161,951 $ 169,531 $ 169,529
Trustee's fees and expenses ............ (4,414) (4,820) (4,763)
Sponsors' fees ......................... (1,287) (1,209) (1,173)
----------------------------------------------
Net investment income .................. 156,250 163,502 163,593
----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized loss on
securities sold or redeemed .......... (830)
Unrealized appreciation (depreciation)
of investments ....................... (272,428) 132,563 160,549
----------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (273,258) 132,563 160,549
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (117,008) $ 296,065 $ 324,142
==============================================
</TABLE>
See Notes to Financial Statements.
D - 18.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (VIRGINIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended September 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income .................. $ 156,250 $ 163,502 $ 163,593
Realized loss on
securities sold or redeemed .......... (830)
Unrealized appreciation (depreciation)
of investments ....................... (272,428) 132,563 160,549
----------------------------------------------
Net increase (decrease) in net assets
resulting from operations ............ (117,008) 296,065 324,142
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (156,405) (163,475) (163,605)
Principal .............................. (1,604)
----------------------------------------------
Total distributions .................... (158,009) (163,475) (163,605)
----------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (3,024)
Redemption amounts - principal ......... (262,245)
----------------------------------------------
Total share transactions ............... (265,269)
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .... (540,286) 132,590 160,537
NET ASSETS AT BEGINNING OF YEAR .......... 3,355,216 3,222,626 3,062,089
----------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 2,814,930 $ 3,355,216 $ 3,222,626
==============================================
PER UNIT:
Income distributions during
year ................................. $ 50.27 $ 50.30 $ 50.34
==============================================
Principal distributions during
year ................................. $ 0.50
================
Net asset value at end of
year ................................. $ 941.76 $ 1,032.37 $ 991.58
==============================================
TRUST UNITS:
Redeemed during year ................... 261
Outstanding at end of year ............. 2,989 3,250 3,250
==============================================
</TABLE>
See Notes to Financial Statements.
D - 19.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (VIRGINIA 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
Cost of 2,989 units at Date of Deposit .................. $ 3,123,504
Less sales charge ....................................... 140,543
-----------
Net amount applicable to Holders ........................ 2,982,961
Redemptions of units - net cost of 311 units redeemed
less redemption amounts (principal).................... 9,028
Realized loss on securities sold or redeemed ............ (13,100)
Principal distributions ................................. (6,674)
Unrealized depreciation of investments................... (192,093)
-----------
Net capital applicable to Holders ....................... $ 2,780,122
===========
4. INCOME TAXES
As of September 30, 1999, unrealized depreciation of investments,
based on cost for Federal income tax purposes, aggregated $192,093,
all of which related to depreciated securities. The cost of investment
securities for Federal income tax purposes was $2,967,480 at September
30, 1999.
D - 20.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (VIRGINIA TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of September 30, 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 Industrial Dev. Auth. of Arlington A1(m) $ 500,000 5.300 % 2015(6) 09/01/03 $ 502,150 $ 468,980
Cnty., VA, Hosp. Rev. Rfdg. Bonds @ 102.000
(The Arlington Hosp.), Ser. 1993
2 Chesapeake Hosp. Auth., VA, Hosp. Fac. AAA 500,000 5.250 2018 07/01/03 502,130 462,845
Rfdg. Rev. Bonds (Chesapeake Gen. @ 102.000
Hosp.), Ser. 1993 (MBIA Ins.) (5)
3 Commonwealth of Virginia, Transp. Rev. AA 500,000 5.250 2019 05/15/03 502,130 470,220
Bonds, Ser. 1993C (Northern Virginia @ 102.000
Transp. Dist. Prog.)
4 Indl. Dev. Auth. of Fairfax Cnty., VA, AA 455,000 5.000 2023 None 441,250 406,083
Hosp. Rev. Rfdg. Bonds (Inova Hlth.
Sys. Hosp. Proj.), Ser. 1993A
5 Puerto Rico Hgwy. and Trans. Auth., A 300,000 5.000 2022 07/01/03 288,918 267,087
Highway Rev. Rfdg. Bonds, Ser. X @ 101.500
6 Virginia Hsg. Dev. Auth., Commonwealth Aa1(m) 500,000 5.300 2015 01/01/02 500,000 475,840
Mtge. Bonds, 1992 Ser. C, Subser. C-3 @ 102.000
7 Virginia Pub. Bldg. Auth., State Bldg. AA 225,000 5.400 2013 08/01/03 230,902 224,332
Rev. Bonds, Ser. 1993A @ 101.000
----------- ----------- -----------
$ 2,980,000 $ 2,967,480 $ 2,775,387
=========== =========== ===========
</TABLE>
See Notes to Portfolios on page D - 22.
D - 21.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 48 (CALIFORNIA, CONNECTICUT,
MASSACHUSETTS AND VIRGINIA TRUSTS),
DEFINED ASSET FUNDS
NOTES TO PORTFOLIOS
As of September 30, 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" rating to the securities. Securities covered by
portfolio insurance are rated "AAA" only as long as they remain in the
Trust.
(5) Insured by the indicated municipal bond insurance company.
(6) Bonds with an aggregate face amount of $ 525,000 of the California Trust,
$240,000 of the Massachusetts Trust and $500,000 of the Virginia Trust
have been pre-refunded and are expected to be called for redemption on the
optional redemption provision dates shown.
D - 22.
<PAGE>
DEFINED ASSET FUNDS--REGISTERED TRADEMARK--
<TABLE>
<S> <C>
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most MULTISTATE SERIES--48
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 Chase Manhattan Bank investment company filed with the
1-800-323-1508 Securities and Exchange Commission in
Washington, D.C. under the:
- Securities Act of 1933 (file no.
33-50247) and
- 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.
14626--1/00
</TABLE>
